Birmingham Utilities Inc · 10-Q · For 6/30/99

Filed On 8/13/99   ·   SEC File 0-06028   ·   Accession Number 915656-99-41

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FORM  10-Q              

SECURITIES AND EXCHANGE COMMISSION                

WASHINGTON, D.C.  20549           

QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)                 
OF THE SECURITIES EXCHANGE ACT OF 1934                

For Quarter Ended June 30, 1999  Commission File Number 0-6028        

BIRMINGHAM UTILITIES, INC.          
(Exact name of registrant as specified in its charter)          

CONNECTICUT                                 06-0878647          

230 Beaver Street, Ansonia, CT                        06401                   
(Address of principal executive office)            (Zip Code)                 

________________________________________________________________            
(Former name, former address and former fiscal year,                  
if changes since last report)                     

Indicate by check mark whether the registrant (1) has filed all 
reports required to be filed by Section 13 or 15(d) of the Securities           
Exchange Act of 1934 during the preceding 12 months (or for such                
shorter period that the registrant was required to file such reports;           
and (2)has been subject to such filing requirements for the past                
90 days.                                                                        

No   _________                         Yes  ____X_____            

Indicate the number of shares outstanding of each of the          
issuer's classes of common stock, as of the latest practicable date.            

Class                      Outstanding at August 1, 1999    
Common Stock, No Par Value                 1,560,523                      

Page 2                                                                          

PART I. FINANCIAL INFORMATION       

ITEM 1    FINANCIAL STATEMENTS                                                  

BIRMINGHAM UTILITIES, INC.  
STATEMENTS OF INCOME AND RETAINED EARNINGS      
   UNAUDITED

                                                                · Download Table

                            Three Months Ended            Six Months Ended 
                               June 30,                       June 30,     
                            1999          1998          1999           1998
                                                                           
Operating Revenue     $1,164,439    $1,118,132    $2,241,078     $2,125,018

 Operating Expenses:                                                       
  Operating Expenses     613,624       582,332     1,185,119      1,178,847
  Maintenance Expense     43,017        34,551        98,166         76,289
  Depreciation           134,001       118,499       268,002        237,000
  Taxes Other Than                                                         
   Income Taxes           87,251        62,772       160,836        142,375
 Taxes on Income          54,992        72,318       102,727         79,745
 Total Operating Expense 932,885       870,472     1,814,850      1,714,256

Utility Operating Income 231,554       247,660       426,228        410,762
Amortization of Prior                                                      
 Years' Deferred Income                                                    
 on Land Dispositions                                                      
 (Net of income taxes)    85,740        38,307       171,480         76,613

Other Income, net          6,758        19,213        41,049         21,464

Income before                                                              
 interest expense        324,052       305,180       638,757        508,839

Interest and Amortization                                                  
 of Debt Discount        112,801       140,218       225,603        287,067
Income from dispositions                                                   
 of land                                                                   
(net of income taxes)     $2,095        21,110         2,095        849,396

Net income               213,346      $186,072       415,249      1,071,168

Retained earnings,                                                         
 beginning             5,266,306    $2,586,984     5,219,875     $1,831,377
Dividends                156,052       130,488       311,524        259,977

Retained earnings,                                                         
 ending               $5,323,600    $2,642,568    $5,323,600     $2,642,568

Earnings per share - basic  $.14          $.12          $.27           $.70
Earnings per share - diluted$.13          $.12          $.26           $.69
Dividends per share         $.10         $.085          $.20           $.17

The accompanying notes are an integral part of these financial statements.      

Page 3                                                                          

BIRMINGHAM UTILITIES, INC.    
BALANCE SHEETS      

       (Unaudited)
                           June 30,           Dec. 31,
                         1999               1998

                                                                · Download Table
                                                                    
ASSETS:                                                             

Utility Plant                        $21,171,581        $20,622,907 
Accumulated depreciation              (6,391,360)        (6,189,596)
Net Utility Plant                     14,780,221         14,433,311 

Current Assets:                                                     
 Cash and cash equivalent                556,702          2,696,706 
 Accounts receivable, net of                                        
 allowance for doubtful accounts         451,490            493,165 
 Accrued utility revenue                 456,905            361,448 
 Materials & supplies                    110,976             62,046 
 Prepayments                              66,510             42,643 
       Total current assets            1,642,583          3,656,008 

 Deferred Charges                        489,783            377,182 
 Unamortized debt expense                162,357            170,481 
 Income taxes recoverable                414,080            414,078 
 Other assets                            461,869            467,826 
                                       1,528,089          1,429,567 
                                     $17,950,893        $19,518,886 
STOCKHOLDERS' EQUITY AND LIABILITIES                                

Stockholders' Equity:                                               
 *Common Stock, no par value, authorized                            
  2,000,000 shares; issued and outstanding                          
   6/30/99- 1,560,523 shares;                                       
   12/31/98- 1,550,316                $2,508,379          2,427,752 
   Retained earnings                   5,323,588          5,219,875 
                                       7,831,967          7,647,627 

Long-term debt                         4,418,000          4,418,000 

Current Liabilities:                                                

 Current portion of note payable                                    
  and long term debt                      94,000             94,000 
 Accounts payable and accrued                                       
  liabilities                            815,596          2,456,271 
     Total current liabilities           909,596          2,550,271 

Customers' advances for construction   1,328,265          1,261,090 
Contributions in aid of construction   1,043,716          1,043,719 
Regulatory liability-income taxes                                   
 refundable                              172,356            172,356 
Deferred income taxes                  1,480,486          1,391,476 
Deferred income on disposition                                      
 of land                                 766,507          1,034,347 
                                       4,791,330          4,902,988 

                                     $17,950,893        $19,518,886 

The accompanying notes are an integral part of these financial statements.      

Page 4                                                                          
BIRMINGHAM UTILITIES, INC.            
STATEMENTS OF CASH FLOWS            
(UNAUDITED)             

                                                                · Download Table
                                                                           
                                                Six Months Ended June 30,  
Cash Flows From Operating Activities                 1999          1998    
  Net Income                                      $415,249      $1,071,168 
Adjustments to reconcile net income to                                     
  net cash provided by operating activities:                               
Income from land dispositions                       (2,095)       (849,396)
Depreciation and amortization                      295,762         264,610 
Amortization of deferred income, net of tax       (171,480)        (76,613)
  Increases and decreases in assets                                        
   and liabilities:                                                        
Accounts receivable and accrued utility revenue    (53,782)         19,372 
Materials and supplies                             (48,930)        (14,358)
Prepayments                                        (23,867)        (45,647)
Accounts payable and accrued expenses           (1,640,685)       (103,336)
Deferred income taxes                               (7,350)         (7,350)

Total Adjustments                               (1,652,427)       (712,718)

Net cash flows provided by (used in)                                       
 operating activities                           (1,237,178)        358,450 

Cash flows from investing activities:                                      
 Proceeds from land dispositions                     5,000       1,896,000 
 Net construction expenditures                    (559,754)       (761,569)
Other assets and deferred charges, net             (78,837)       (115,933)

Net Cash flows from (used in)                                              
 Investing activities                             (633,591)      1,018,498 

Cash flows from financing activities:                                      
 (Decrease) in current note payable                  ---        (1,132,500)
 Dividends paid - net                             (269,235)       (233,962)

Net Cash flows provided by financing activities:  (269,235)     (1,366,462)

Net (decrease) increase in cash                                            
 & cash equivalents                             (2,140,004)        (10,486)
Cash equivalents, beginning                      2,696,706          62,699 
Cash, ending                                      $556,702         $52,213 

Supplemental disclosure of cash flow information:                          
 Cash paid for                                                             
  Interest                                        $217,478        $279,600 
  Income Taxes                                   1,805,000        $382,600 

Supplemental disclosure of non-cash flow information:                      
 The Company receives contributions of plant from                          
 builders and developers.  These contributions of                          
 plant are reported in utility plant and in                                
 customers' advances for construction.  The                                
 contributions are deducted from construction                              
 expenditures by the Company.                                              
    Gross Plant, additions                        $629,946        $793,349 
    Customers' advances for construction           (70,192)        (31,780)
    Capital expenditures, net.                    $559,754        $761,569 


The accompanying notes are an integral part of these financial statements.      

Page 5                                                                          

BIRMINGHAM UTILITIES, INC.          
NOTES TO FINANCIAL STATEMENTS           
(UNAUDITED)           

Birmingham Utilities, Inc. is a specially chartered public service    
corporation in the business of collecting and distributing water for            
domestic, commercial and industrial uses and fire protection.  The              
Company provides water to Ansonia and Derby, Connecticut and in small           
parts of the contiguous Town of Seymour with a population of                    
approximately 31,000 people.                                                    

The Company is subject to the jurisdiction of the Connecticut         
Department of Public Utility Control ("DPUC") as to accounting,                 
financing, ratemaking, disposal of property, the issuance of long term          
securities and other matters affecting its operations.  The Connecticut         
Department of Public Health (The "Health Department" or "DPH") has              
regulatory powers over the Company under state law with respect to              

Page 6                                                                          

water quality, sources of supply, and the use of watershed land.  The           
Connecticut Department of Environmental Protection "DEP") is authorized         
to regulate the Company's operations with regard to water pollution             
abatement, diversion of water from streams and rivers, safety of dams           
and the location, construction and alteration of certain water                  
facilities.  The Company's activities are also subject to regulation            
with regard to environmental and other operational matters by federal,          
state and local authorities, including, without limitation, zoning              
authorities.                                                                    

The Company is subject to regulation of its water quality under       
the Federal Safe Drinking Water Act ("SDWA").  The United States                
Environmental Protection Agency has granted to the Health Department            
the primary enforcement responsibility in Connecticut under the SDWA.           
The Health Department has established regulations containing maximum            
limits on contaminants which have or may have an adverse effect on              
health.                                                                         

NOTE 1  - QUARTERLY FINANCIAL DATA                                              

The accompanying financial statements of Birmingham Utilities,        
Inc. (the "Company") have been prepared in accordance with generally            
accepted accounting principles, without audit, except for the Balance           
Sheet for the period ending December 31, 1998, which has been audited.          
The interim financial information conforms to the instructions to Form          
10-Q and Rule 10-01 of Regulation S-X and, as applied in the case of            
rate-regulated public utilities, complies with the Uniform System of            
Accounts and ratemaking practices prescribed by the authorities.                
Certain information and footnote disclosures required by generally              
accepted accounting principles have been omitted, pursuant to such              
rules and regulations; although the Company believes that the                   
disclosures are adequate to make the information presented not                  
misleading.  For further information, refer to the financial statements         
and accompanying footnotes included in the Company's Annual Report on           
Form 10-K for the year ended December 31, 1998.                                 

The Company's business of selling water is to a certain extent        
seasonal because water consumption normally increases during the warmer         
summer months.Other factors affecting the comparability of various              
accounting periods include the timing of rate increases and the timing          
and magnitude of property sales. Accordingly, annualization of the              
results of operations for the six months ended June 30, 1999 and June           
30, 1998, would not necessarily accurately forecast the annual results          
of each year.                                                                   

NOTE  2 - CALCULATION OF WEIGHTED AVERAGE SHARES OUTSTANDING-DILUTED            

The following table summarizes the number of common shares used       
in the calculation of earnings per share.                                       

Page 7                                                                          

                                                                · Download Table
                            Three Months Ended          Six Months Ended
                                                                        

                          6/30/99        6/30/98     6/30/99     6/30/98

Weighted average shares                                                 
outstanding for earnings                                                
per share, basic         1,556,812      1,530,908   1,555,036  1,527,172

Incremental shares from                                                 
assumed conversion of                                                   
stock options              143,992         43,804      72,392     34,778

Weighted average shares                                                 
outstanding for earnings                                                
per share, diluted       1,700,804      1,574,712   1,627,428  1,561,950


NOTE 3 - RATE MATTERS                                                           

On January 21, 1998, the DPUC granted the Company a 4.1% water        
service rate increase designed to provide a $177,260 annual increase in         
water service revenues and a 12.16% return on common equity.  New rates         
became effective on February 1, 1998.                                           

NOTE 4 - LAND SALES                                                             

On January 21, 1998, the Company sold to the City of Derby,           
Connecticut, 145 acres of land in Derby, Connecticut for $1,800,000.            
The total gain from the sale amounted to $910,306 of which $81,983 was          
deferred and will be recognized over a 3-year period, as approved by            
the DPUC.                                                                       

On April 29, 1998, the Company sold 2.9 acres of land in              
Woodbridge, Connecticut for the development of a single-family home             
for $96,000.  The total gain from the sale amounted to $28,955 of which         
$9,243 was deferred and will be recognized over a 10-year period as             
approved by the DPUC.                                                           

The Company also sold, on November 23, 1998, 229 acres of land in     
Seymour and Oxford, Connecticut to the Town of Seymour.  This parcel            
was sold below market value, and as a result, the transaction was               
classified as a bargain sale for income tax purposes. The net gain              
from the sale amounted to $1,010,209 of which $90,965 was deferred              
and will be recognized over a 3-year period as approved by the DPUC.            
As a result of the bargain sale, the net gain also includes tax                 
deductions of $177,064 of which $98,900 will be carried forward to              
reduce the Company's tax liability in subsequent years.                         

Page 8                                                                          

On December 3, 1998, the Company sold 515 acres of land in Oxford     
and Seymour, Connecticut to The Trust for Public Land for $3,220,000.           
The Trust for Public Land,in turn, simultaneously sold the property to          
the Town of Oxford for the same price.This parcel was also sold below           
market value, and therefore, the transaction was classified as a bargain        
sale for income tax purposes. The net gain from the sale amounted to            
$1,743,998 of which $157,037 was deferred and will be recognized over           
a 3-year period as approved by the DPUC.  As a result of the bargain            
sale, the net gain includes tax deductions of $329,274 of which $184,100        
will be carried forward to reduce the Company 's tax liability in               
subsequent years.                                                               

In 1997, the Company had entered into a contract to sell 245 acres    
of land in Seymour, Connecticut to M/1 Homes by December 31, 1998 for a         
purchase price of $3,950,000.  Because M/1 Homes had been unable to             
secure various land use approvals for the part of its development plan          
that included construction of an 18-hole golf course, it has amended            
its development plan. The delays caused by, among other things, the             
modified development plan, resulted in M/1 Homes requesting that the            
Company extend the closing deadline beyond the original December 31,            
1998 date.  The Company and M/1 Homes recently agreed to a contract             
amendment extending the closing date to June 30, 1999 and providing             
for certain other modifications to the agreement.  The amended                  
agreement contemplates, instead of a golf course, the dedication by             
M/1 Homes of over 50% (approximately 130 acres) of the acreage                  
included in the transaction for open space purposes. Among other                
things, the modified agreement also provides for a $70,000 increase             
in the purchase price to $4,020,000, of which $2,370,000 will be                
payable at the closing, and the $1,650,000 balance within one year              
from the closing.  Payment of the deferred portion of the purchase              
price will be secured by a first mortgage in favor of the Company on            
a portion of the property.  The original 1997 agreement had been                
approved by the DPUC, and the Company applied to the DPUC for approval          
of the modified agreement on January 29, 1999.  On June 16, 1999, the           
DPUC issued a final decision denying approval of that agreement.  As a          
result of that denial, and in accordance with the original agreement,           
the Company refunded to M1Homes $147,500 plus interest of the original          
$197,500 deposit and retained the remaining $50,000 plus interest.              
The Company has now begun the process of re-marketing this property.            

NOTE 5 - STOCK SPLIT                                                            

On January 11, 1999, the Company filed with the DPUC an Application   
for Approval to Issue approximately 780,000 additional shares of common         
stock in conjunction with a 2-for-1 stock split.  The stock split which         
had been approved by the Board of Directors in December, 1998, and by           
the DPUC on February 26, 1999. The stock split became effective on March        
31, 1999 with respect to shares held of record on March 18, 1999.               
All financial information contained in Form 10-Q has been adjusted to           
reflect the impact of the common stock split.                                   

Page 9                                                                          

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF                     
OPERATIONS AND FINANCIAL CONDITION                            

Management's Discussion and Analysis of the Results of Operations     
and Financial Condition contained in the Company's Annual Report in Form        
10K for the year ended December 31, 1998, should be read in conjunction         
with the comments below.                                                        

CAPITAL RESOURCES AND LIQUIDITY                                                 

Completion of the Company's Long Term Capital Improvement Program     
is dependent upon the Company's ability to raise capital from external          
sources, including, for the purpose of this analysis, proceeds from the         
sale of the Company's holdings of excess land.  For the six months ended        
June 30, 1999 and 1998, the Company's additions to utility plant, net           
of customer advances, cost $559,754 and $761,569, respectively.  (see           
Statement of Cash Flows). These additions were financed primarily from          
external sources, namely proceeds from land sales.                              

The Company has outstanding $4,418,000 principal amount of            
Mortgage Bonds, due September 1, 2011, issued under its Mortgage                
Indenture.  The Mortgage Indenture limits the issuing of additional             
First Mortgage Bonds and the payment of dividends.It does not, however,         
restrict the issuance of either long term or short term debt which is           
either unsecured or secured with liens subordinate to the lien of the           
Mortgage Indenture.   The Company also had a $1,500,000 secured, term           
loan which was repaid in full on November 23, 1998.  Principal and              
interest payments were made monthly up to the time of repayment.                

In 1998, the Company converted a $600,000 working capital line of     
credit and a $1,500,000 secured line of credit to a two-year $2,100,000         
revolving line of credit. In June, 2000, the Company will have the              
option to convert any outstanding balance to a six-year term note with          
principal payments based on a 20-year amortization schedule, with a             
balloon payment at the end of the six-year term.  The revolving line of         
credit is secured by a lien (subordinate to the lien of the Mortgage            
Bond Indenture) on all of the Company's utility property other than its         
excess land available for sale.  There were no borrowings outstanding           
on the revolving line of credit on June 30, 1999.                               

The Company may choose among several interest rate options on the     
revolving line of credit variable option of 30- or 90-day LIBOR plus            
100 basis points, or prime.  The term loan interest rate options consist        
of a fixed rate at the bank's cost of funds plus 100 basis points, or           
a variable rate of the prime rate or 90 day LIBOR plus 100 basis points         
which is reset every 90 days.                                                   

The Company's 1999 Capital Budget of $1,800,000 is two-tiered.        
The first tier consists of typical capital improvements made each year          
for services, hydrants and meters, is budgeted for $550,000 in 1999,            
and is expected to be financed primarily with internally generated              
funds.                                                                          
Page 10                                                                         

The second tier of the 1999 Capital Budget consists of                
replacements and betterments which are part of the Company's Long Term          
Capital Improvement Program and includes $1,250,000 of budgeted plant           
additions.  Plant additions from this part of the 1999 budget may               
require use of the Company's line of credit. Second tier plant additions        
can be, and portions of it are expected to be, deferred to future years         
if funds are not available for their construction in 1999.                      

As of June 30, 1999, the Company has approximately 960 acres of       
excess land available for sale, consisting of land currently classified         
as Class III, non-watershed land under the statutory classification             
system for water company lands. The Company believes that by selling            
these excess lands it can generate sufficient equity capital to support         
its 5 year capital budget, currently estimated at $10,000,000.  Such            
land dispositions are subject to approval by the DPUC. Proceeds from            
the sale of land are recorded as revenue at the time of closing and             
portions of the gains are deferred and amortized over various times as          
stipulated by the DPUC.                                                         

Year 2000 Compliance                                                            

The Company is currently evaluating its exposure to the Year 2000     
problem and is taking steps to be Year 2000 compliant.  In general              
terms, the problem arises from the fact that many existing computer             
systems and other equipment containing date-sensitive embedded                  
technology use only two digits to identify a year in the date field,            
with the assumption that the first two digits of the year are always            
"19".  As a result, such systems may misinterpret dates after December          
31, 1999, which may result in miscalculations, other malfunctions or            
the total failure of such systems.                                              

The Company's existing billing and accounting software are            
currently in the process of being upgraded to comply with all Year              
2000 related issues. Management anticipates its computer systems will           
be fully compliant by the end of the second quarter of 1999.                    

The Company also is evaluating the Year 2000 compliance of systems    
and equipment which are not linked to billing and accounting software           
and has identified items that could be impacted by the Year 2000                
problem.  For the items identified as possibly presenting a Year 2000           
problem, the Company has contacted suppliers, where possible, to obtain         
adequate assurance that it is Year 2000 compliant or is in the process          
of determining and addressing any noncompliance.  In addition, wherever         
practical, the Company is independently testing such items for                  
compliance.                                                                     

In addition to its own systems and equipment, the Company depends     
upon the proper function of computer systems and other date-sensitive           
equipment of outside parties. These parties include other water                 
companies, banks, telecommunications service providers and electric             
and other utilities.                                                            

Page 11                                                                         

Due to the uncertainties presented by such third party Year 2000      
problems, and the possibility that, despite its efforts, the Company            
may be unsuccessful in preparing its internal systems and equipment             
for the Year 2000, the Company is developing working plans for dealing          
with its most reasonably likely worst-case scenario, many of which are          
contained in the Company's approved Emergency Contingency Plan.  The            
Company's assessment of its most reasonably likely worst-case scenario          
and the exact nature and scope of its contingency plans will be                 
affected by the Company's continued Year 2000 assessment.  The Company          
expects to complete such assessment and contingency planning during the         
third quarter of 1999, and to have all contingency systems in place and         
fully tested by the fourth quarter of 1999.  Costs to meet Year 2000            
compliance are not expected to have a material impact on the Company's          
financial position or results of operations.                                    

Results of Operations for the Six Months and Three Months Ended June            
30, 1999 and 1998.                                                              

Net Income                                                                      

Net Income for the six months ended June 30, 1999 was $415,249        
compared with $1,071,168 for the same 1998 period.  The sale of                 
property in January of 1998 in Derby, Connecticut, to the City of               
Derby, contributed $828,286 to net income in the first quarter of 1998.         
There were no comparable land sales in 1999. Net Income for the three           
months ended June 30, 1999 of $213,346 is $27,274 higher than the               
comparable three month period in 1998. Increased revenues, lower                
interest charges and increased income resulting from the amortization           
of prior year land sales are somewhat offset by increased property              
taxes and depreciation expense.                                                 

Operating Revenues                                                              

Operating revenues for the first six months of 1999 of $2,241,078     
are $116,060 higher than operating revenues of $2,125,018 for the first         
six months of 1998. Increased water consumption in 1999 from all classes        
of customers and the effects of an over-all four percent water service          
rate increase that became effective February 1, 1998, accounts for this         
increase. Operating revenues for the three month period ending June 30,         
1999 are $46,305 higher than the comparable 1998 quarter. Increased             
consumption as a result of dry weather conditions during the second             
quarter account for the increase.                                               

Operating and Maintenance Expenses                                              

Operating and Maintenance expenses for the first six months of        
1999 are $28,149 higher than the comparable 1998 period.  Increased             
purchased power costs relating to increased water sales and higher              
main maintenance and service line expense principally account for the           
variance.  Operating and Maintenance expenses for the three month               
period ending June 30, 1999 are $39,758 higher than the comparable 1998         
quarter.  Increased purchased water costs, meter expenses, transmission         

Page 12                                                                         

line expense and main maintenance costs principally account for the             
variance.                                                                       

Depreciation Expense                                                            

Depreciation expense for the first six months of 1999 and for         
the three month period ending June 30,1999 are $31,002 and $15,502,             
respectively, higher than the comparable 1998 periods due to                    
depreciation expense relating to general plant additions.                       

Taxes Other Than Income Taxes                                                   

Taxes other than income taxes for the six and three month periods     
ended June 30, 1999 is $18,461 and $24,479 respectively, higher than            
the comparable 1998 periods. Increased property taxes in conjunction            
with the Company's capital improvement program account for these                
increases.                                                                      

Other Income                                                                    

Other income for the first six months of 1999 is $19,585 ahead of     
the comparable 1998 period.  Investment interest income as a result of          
the Company's temporary cash investments accounts for the increase.             
Other income for the three month period ending June 30, 1999 is $12,455         
below the comparable 1998 period.  Timber sales of $13,908 which were           
recorded in the second quarter of 1998 did not occur in 1999.                   

Interest Expense                                                                

Interest expense for the six and three month periods ending June      
30, 1999 is $61,464 and $27,417 below the comparable 1998 periods.              
Interest charges relating to short term borrowing and in conjunction            
with the Company's term loan, which was repaid in the fourth quarter            
of 1998, have not occurred in 1999.                                             

Land Dispositions                                                               

When the Company disposes of land, any gain recognized, net of tax,   
is shared between rate payers and stockholders based upon a formula             
approved by the DPUC. The impact of land dispositions is recognized in          
two places on the statement of income.                                          

The statement of income reflects income from the disposition of       
Land (net of taxes) of $849,396 for the three months ended June 30,             
1998.  That amount represents the sale of 145 acres of land to the              
City of Derby, CT on January 21,1998 and 2.9 acres of property in               
Woodbridge, CT in  May of 1998.  That amount represents the                     
stockholders' immediate share of income from the land sales.  The net           
gain on both sales totaled $941,312, including the deferred portion.            
The DPUC's October 22, 1997 Decision approving the Derby sale provided          
for a 3-year amortization period, as 75% of this parcel has been                
dedicated as open space.  There was a minor sale of property that took          

Page 13                                                                         

place in June of 1999 in conjunction with an encroachment.  The net             
gain totaled $2,095 on that sale.                                               

Land disposition income is also recognized in the financial           
statements as a component of operating income on the line entitled              
"Amortization of Deferred Income on Dispositions of Land."  These               
amounts represent the recognition of income deferred on land                    
dispositions which occurred in prior years.  The amortization of                
deferred income on land dispositions net of tax, was $1,171,480 and             
$76,613 for the six months ended June 30, 1999 and 1998, and $85,740            
and $38,307, respectively, for the three-month periods ending June 30,          
1999 and 1998.                                                                  

Recognition of deferred income will continue over time periods        
ranging from three to fifteen years, depending upon the amortization            
period ordered by the DPUC for each particular disposition.                     

PART II.  OTHER INFORMATION           

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                    

During the first half of 1999, the only matters submitted to a        
vote of the holders of the Company's common stock, its only class of            
voting stock, were submitted at the Company's Annual Meeting of                 
Shareholders held on May 12, 1999, as follows:                                  

(a) Election of Directors - All nominees for Director were elected,             
as follows:                                                                     

                                                                · Download Table
                                                                  
                                   Votes                    Votes 
Director                            For      Pct           Against

S.P. Ahern                      1,414,429   90.874%         7,456 
E.G. Brickett                   1,414,429   90.874%         7,456 
J.E. Cohen                      1,414,429   90.874%         7,456 
B. Henley-Cohn                  1,414,429   90.874%         7,456 
A. da Silva                     1,414,429   90.874%         7,456 
A.J. Rivers                     1,414,429   90.874%         7,456 
B.L. Sauerteig                  1,414,165   90.858%         7,720 
K.E. Schaible                   1,414,429   90.874%         7,456 
D. Silverstone                  1,414,429   90.874%         7,456 
J. Tomac                        1,414,429   90.874%         7,456 

(b)  Approval of Auditors - Shareholders approved the appointment of            
Dworken, Hillman, LaMorte & Sterczala, P.C. as independent auditors             
for the Company for 1999. Total votes cast were 1,399,960 representing          
89.95% of all outstanding shares. 1,396,894 representing 89.749% of all         
outstanding shares were cast in favor of the appointment of Dworken,            
Hillman, LaMorte & Sterczala, P.C.                                              

Page 14                                                                         

(c)  1998 Stock Incentive Plan -  Shareholders approved a Stock                 
Incentive Plan for Employees of the Company.  Total votes cast were             
1,412,142, representing 90.72% of all outstanding shares.  1,371,373,           
representing 88.10% of all outstanding shares, were cast in favor of            
the Stock Incentive Plan for Employees.                                         

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K                                       

(a)  Exhibits - Financial Data Schedule filed herewith.                         

SIGNATURES              

Pursuant to the requirements of the Securities Exchange Act of        
1934, the Company has duly caused this report to be signed on its               
behalf by the undersigned, thereunto duly authorized.                           

          BIRMINGHAM UTILITIES, INC.

Registrant      

Date:  August  6  , 1999        /s/ John S. Tomac                               
        John S. Tomac, President

Dates Referenced Herein   and   Documents Incorporated By Reference

This 10-Q Filing		Date		Other Filings
		10/22/97
		1/21/98
		2/1/98
		4/29/98
		6/30/98		10-Q
		11/23/98
		12/3/98
		12/31/98		ARS, DEF 14A, 10-K405
		1/11/99
		1/29/99
		2/26/99		8-K
		3/18/99
		3/31/99		10-K405, 10-Q
		5/12/99
		6/16/99
For The Period Ended		6/30/99
		8/1/99
Filed On / Filed As Of		8/13/99
		12/31/99		DEF 14A, 10-K, ARS
		9/1/11
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