Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, August 19, 1993 TAG: 9308190167
SECTION: VIRGINIA PAGE: A-9 EDITION: METRO
SOURCE:
DATELINE: LENGTH: Long
AUGUST 1992:
Roanoke Gas Co. makes initial request to begin negotiations on the company's 20-year franchise agreement and asks the city to appoint a negotiating team. Franchise is scheduled to expire a year later.
Roanoke City Manager Bob Herbert responds 27 days later, saying that after City Council members are briefed, "the city representatives for franchise negotiations or asset acquisition can be identified to you." (City officials now cite Herbert's Aug. 31 letter to rebut company claims that it never knew - until 11 months later - the city had any intention of possibly acquiring the company's assets within the city limits.)
SEPTEMBER 1992:
Roanoke Gas executive John Williamson asks Herbert for city documents outlining the city's franchise agreements with Appalachian Power Co. and C&P Telephone Co.
City Utilities Director Kit Kiser responds on behalf of city, answering certain questions and supplying some documents.
Kiser requests financial documents from Roanoke Gas.
NOVEMBER 1992:
Williamson responds to Kiser's request for company financial documents.
In a reply, Kiser asks: "John, my records indicate that the current Gas Company franchise fee is based on rates that have not changed in at least 40 years. Do your records indicate how long the current rates have been in effect?"
Williamson confirms that same franchise fee - $30,000 - has been in effect "through the last two agreement cycles" - 40 years.
City Council votes to spend $50,000 plus expenses to hire a Connecticut-based consultant, The Columbia Group Inc., to evaluate its franchise agreement with Roanoke Gas.
DECEMBER 1992:
Williamson sends Kiser a copy of Roanoke Gas's annual report for the year ended Sept. 30, 1992.
JANUARY:
Williamson sends Kiser a copy of the company's Form 10-K - which reveals financial and legal information that could affect the value of stock - filed with the Securities and Exchange Commission for the year ended Sept. 30, 1992. "If you or your consultants have any questions, please let me know," Williamson writes.
APRIL:
The Columbia Group produces what city officials call their "preliminary report." Its title: "A Feasibility Study of the Public Acquisition of the Roanoke Gas Company." The study is not made public nor released to the gas company, but instead undergoes several revisions.
JULY:
A meeting is scheduled for July 23 "to discuss the Roanoke Gas Company franchise." In attendance for the city: Herbert, City Attorney Wilburn Dibling and Acting Finance Director James Grisso. Representing the company: Williamson; Robert Glenn, senior vice president for marketing and strategic planning; and Art Pendleton, vice president for operations.
City officials ask for franchise to be extended for as much as one year to enable them to explore whether it might make sense for the city to acquire the company's assets within the city limits.
Consultant's study is revealed to company officials. Because council would be required to vote twice to extend the franchise, gas company officials are given nine working days to make a decision. Company asks that no public disclosures be made and that they be told of any public statements so their employees can be notified.
Frank Farmer, president and chief executive officer of Roanoke Gas, writes Herbert on July 30 refusing city's request for franchise extension. In the company's view, officials later said, an extension would serve only to give the city time to prepare its acquisition bid. "We, of course, remain interested in commencing and concluding discussions concerning a long-term franchise renewal," Farmer writes.
AUGUST 1993:
Consultants hired by Roanoke Gas are flown in Aug. 8 to rebut the city's Columbia study before council's August 9 meeting.
Company lawyers and auditors tell company officials that the possibility company's assets within the city may be acquired must be disclosed to shareholders and the Securities and Exchange Commission on Friday, Aug. 13.
Company officials say three city officials - Kiser, Mayor David Bowers and Councilman William White - are notified of the SEC deadline. Kiser confirms having discussion with Williamson on Tuesday, Aug. 10.
At 7 a.m. on Friday, company officials begin first of two one-hour meetings with company employees telling them of the city's intention to explore the acquisition.
At 10 a.m., Roanoke Gas officials hold a news conference announcing the city's intentions and their filing of a Form 10-Q - a quarterly report to shareholders - with the SEC spelling out the situation. Kiser says he received a telephone call from Williamson at 10:17 a.m. but could not reach him until later in the day. Kiser learned of the news conference from a reporter and later talked with Williamson.
by CNB