CONSIDERATION OF OTHER SOURCES.

Th following Resolutions and actions of the Board of Supervisors make up the record in respect to the acquisition of sources of supply other than the so-called Hetch Hetchy system.

Resolution No. 6949, determining to refrain from expending further money, energy or time in an attempt to acquire the Tuolumne system, adopted January 29, 1906.

Resolution No. 7130, soliciting offers to furnish water supplies to the City and County of San Francisco, adopted March 12, 1906.

Resolution No. 32 (New Series), soliciting resubmission of offers to furnish water supplies to San Francisco from those who filed original offers previous to April 18, 1906, adopted May 14, 1906.

Proposition of the Bay Counties Water Company to furnish a water supply filed May 21, 1906.

Other propositions were received from Lake Tahoe and San Francisco Water Works, Hugo D. Newhouse, Russell L. Dunn, Jay E. Russell, Scofield Construction Company, Northern Sierra Water and Power Company, William Muir, Orrin S. Henderson, Sierra Nevada Water and Power Company, Stanislaus Electric Power Company, Snow Mountain Water and Power Company, S. P. Dunn, M. C. Taylor and John Neate.

Resolution No. 66 (New Series), re-adoption of Resolution No. 32 (New Series), owing to the fact that said Resolution had been adopted on a legal holiday, adopted June 4, 1906.

On July 23, 1906, a message was received from the Mayor recommending that an Advisory Board of Engineers be appointed in matter of the selection of a water supply. This message appears of record in the Journal of the Board of Supervisors of July 30, 1906.

On July 23, 1906, a Special Committee on Water Supply, consisting of Supervisors Phillips, Gallagher, Kelly, Boxton and Walsh, submitted a report on the subject and recommended the appointment of a Board of Engineers to investigate the same. This report appears of record in the Journal of the Supervisors of the above date.

On July 30, 1906, Resolution No. 226 (New Series), was adopted and approved August 2, 1906, appointing Major C. H. McKinstry, Prof. C. D. Marx and A. M. Hunt as Engineers of the Board of Supervisors, together with the City Engineer to examine and consider the propositions for a municipal water supply as recommended by the Special Committee on Water Supply.''

August 10, 1906, report of the City Engineer on the American-Consumnes Water Supply Project. Filed.

August 13, 1906, report of the Special Committee on Water Supply against the advisability of the Middle Fork of the Stanislaus River, Snow Mountain and Eel River as sources of supply. Adopted and printed in the Journal of Proceedings of said date.

August 13, 1906, a report of the same Committee was adopted, giving instructions to the Advisory Engineers as to the scope of their investigations.

On September 24, 1906, the Special Committee on Water Supply presented a report recommending the selection of the Bay Cities Water Supply as an available source for San Francisco. The report was adopted, together with Resolution No. 380 (New Series), requesting the Advisory Engineers to report upon the proposition as to whether the Bay Cities proposition complied with the Resolution soliciting offers and constituted an adequate supply.

Thereupon the Advisory Board of Engineers resigned, stating their unwillingness to confine their investigation to a single source of water supply, and

declaring that they should be allowed to make a comparative study of all available sources.

On October 8, 1906, the Special Committee on Water Supply in a Supple. mental Report explained their reasons for instructing the Engineers and limiting their duties to the investigation of a single project. This report appears of record in the Journal of the Board of Supervisors of said date.

On January 21, 1907, Resolution No. 716 (New Series, was adopted and approved January 30, 1907, appointing City Engineer Thomas P. Woodward and John R. Price, Engineers to report upon the Bay Cities Water Company proposition and detailing their duties in respect thereto.

Shortly after this date other matters interrupted the consideration of the acquisition of a water supply. In July following sixteen members of the Board of Supervisors resigned, a new Mayor and Supervisors were appointed. The consideration of the matter of water supply was resumed and the Tuolumne project was revived.

TUOLUMNE PROJECT REVIVED.

In the interval between January, 1906, and July, 1907, friends of the Tuolumne Water Supply project kept the matter before the various departments of the Federal Government. In 1907 James R. Garfield became Secretary of the Interior and his attention was called to the matter. In August, 1907, he was in San Francisco and gave a public hearing to all parties interested. A meeting was held on July 24, 1907, and a stenographic report of the conference is on file in the office of the Clerk of the Board of Supervisors. It was published in full in "Reports on the Water Supplies of San Francisco, 1900 to 1908 Inclusive," pages 148-168.

On August 14, 1907, a conference was held at the office of the Board of Supervisors between the Public Utilities Committee of said Board and representatives of the Modesto and Turlock Irrigation Districts, with a view of reaching an amicable settlement of the differences arising from the use of the waters of the Tuolumne River by the City. A stenographic report of this conference is on file in the office of the Clerk of the Board of Supervisors.

PURCHASE OF SPRING VALLEY PROPERTY-REPORT OF FEDERATED WATER COMMITTEE.

Several civic associations, interested in the acquisition of a water supply for San Francisco, conducted an inquiry as to the possibility of acquiring the property of the Spring Valley Water Company. The result of the investigation was set forth in a communication to the Board of Supervisors, filed on September 3, 1907, and is as follows:

To the Honorable,

the Board of Supervisors:

August 28, 1907.

Gentlemen:-Enclosed herewith please find a copy of the report made by Col. W. H. Heuer of the Federated Water Committee.

To this report, by Resolution, submitted to your Honorable Board for your early consideration.

FEDERATED WATER COMMITTEE,

By Wm. F. Smith, Secretary.

To the Executive Committee of the Federated Water Committee,

San Francisco, California.

Sirs: It is well known that the existing water supply of San Francisco is deficient and that an additional supply is imperative. To meet these conditions the Federated Water Committee, at its first session, declared that, in its judgment, several things are necessary, among them, first, to obtain a fair and equitable appraisement of the valuation of the Spring Valley Water Company's plant and properties as a basis upon which to establish an annual water rate for consumers, as provided by law, so as to enable the Water Company to have an income sufficient to pay its operating expenses, interest on its investment, taxes and make such betterments as may be necessary to place its plant in proper condition to supply an adequate amount of water until such time as the City could acquire its own water supply; second, that the City ought to have an option to purchase the Water Company's plant at the appraised value within ten years or some other specified time; third, that such appraisement should not include property of the Water Company which may not be necessary for its working plant but which have been acquired by it in other counties to shut out competition or property which has fallen into disuse.

There appeared, by invitation, before the Executive Committee of the Federated Water Committee, Capt. A. H. Payson, President of the Spring Valley Water Company, who stated frankly to the Committee the financial and physical conditions of the company and afterwards submitted a letter to said Committee, enclosing copy of letter which he had submitted, under date of May 22, 1907, to the Chairman of the Finance Committee of the Board of Supervisors. Capt. Payson was requested by the Executive Committee to submit, as far as praeticable, terms and conditions on which his company might enter into negotiations with properly authorized persons for the sale of its property. After conference with the board of directors, he stated orally to the Committee that, in the absence of the consent of the stockholders, he could not fix a specific price at which the property might be sold, but suggested as a basis for negotiations and consideration that the directors would be willing to recommend to the stockholders that the property be sold to the City for the face value of the bonds and stocks; that there be excepted from the sale the Lake Merced property, for which the Water Company would deduct from the purchase price $4,000,000, and allow the City the use of the water in Lake Merced for a charge of 4% per annum interest on $4,000,000, until such time as the City no longer desires to use the water of the lake; and that the Water Company would also deduct from the purchase price the land value of any property which it owned not actually in use for a water supply and which the City would not require. À list of these properties, with their reported cost, is appended hereto; aggregate cost, $641,009.

The Chairman of the Finance Committee of the then Board of Supervisors also, by request, appeared before the Executive Committee and, after being informed of the condition of the Water Company and of the desires of the Executive Committee, stated the difficulties in obtaining an appropriation for the City's water supply and of changing the rates from those already fixed, but promised to submit the matter to the Finance Committee and to the Board of Supervisors with favorable recommendation.

Recently a new Mayor and Board of Supervisors were placed in charge of the City's affairs. At a meeting of our Executive Committee, held August 2nd, it was resolved that a Committee be appointed to arranged a conference with the Finance Committee of the new Board of Supervisors, to lay the matter of water supply before it. A committee of one called on the Chairman of the Finance Committee and, at the suggestion of the latter, petitioned, on August 3rd, for a public hearing before the Finance and Public Utilities Committees of the Board of Supervisors. The petition was submitted to the Board of Supervisors

on August 5th and, it is believed, received consideration, but, up to the present time, no date has been set for the public hearing.

At all events, up to date, your Executive Committee has been diligent in getting information concerning the matters entrusted to its charge and has the honor to submit its conclusions for such actions as the Federated Water Committee may deem proper.

The questions before us are these: What is a fair value of all the property of the Spring Valley Water Company? Secondly, in case the City decides to purchase, is it advisable to eliminate the Lake Merced Ranch?

We have made no independent investigation in the field, but present to the Committee the values of the property placed upon it from time to time:

First. The testimony given by various expert engineers in the suit of the Spring Valley Water Company brought in 1903 in the United States Court.

Second. From official reports showing the value put upon the property by City Engineers in water rate investigations.

Third. From a printed report of the Chief Engineer of the Spring Valley Water Company, Mr. Herman Schussler, prepared after the disaster in 1906. Fourth. From statements submitted by the Spring Valley Water Company. Fifth. From outside sources.

From copies of Court Records:

Mr. Grunsky's estimate (omitting franchise)

Mr. Dockweiler's estimate

Mr. Desmond Fitzgerald's estimate

Mr. Schussler's estimate

Mr. Schuyler's estimate

Mr. Rudolf Herring's estimate

Mr. Adams' estimate (variable-3 estimates-lowest)

.$25,524,389

24,053,390

22,736,643

51,500,000

46,000,000

46,000,000

35,634,397

The face value of the bonds and stocks of the company is said to be 31,859,000 Present market value, based on stock at 20 and bonds at 83

City Engineer's estimate to Board of Supervisors:

In 1904

...... 20,422,970

1905 1906

1907

In 1877 the City offered to purchase the property of the Spring Valley

Water Company Peninsula System for

Betterments made (Schussler) 1877 to 1900

Alameda system bought in 1875

Betterments (Schussler) 1900 to 1905

$24,673,212

25,001,441

25,450,327

24,569,828

11,000,000

14,932,485

1,000,000

3,402,454

$30,334,939

The latter amount represents valuation, as determined above, in 1905, with out considering any variation in value of property since 1877.

The aggregate of 14 above estimates is $433,760,536.00.
Average, $30,982,895.43.

The amount thus deduced, viz.: $30,982,895.43, was obtained by attaching equal weight to each of the fourteen estimates above referred to and taking

a mean or average of all of them. This, it was thought, would afford a reason ably close approximation to the value of all the property owned by the Spring Valley Water Company, including that at Lake Merced, which had not been offered for sale.

Twelve of the estimates used in the above calculations, were made before the fire and earthquake of April 18, 1906.

In consideration of the estimates taken before the fire, it cannot be now overlooked that the Spring Valley Water Company suffered in common with most other property owners by direct and indirect injury.

The blow given the City is reflected by all its public service corporations. Consumers have been reduced in number and others have taken up new locations, rendering useless many of the old service connections in the burned district; pipes have been broken and mains have been ruptured.

"Pilarcitos conduit, which, for a considerable portion of its length is crossed by the fault line, was, from such portion broken, telescoped, collapsed, pulled apart and damaged beyond possibility of economical repair. The San Andreas conduit was broken where it crossed the head of the Baden Marsh. Several stretches of the Crystal Springs conduit were injured. At Baden Marsh the pipe was ruptured in many places and long sections were thrown from the trestle and a great length of the trestle was broken down. Examinations disclosed that some of the timbers were decayed. The distributing mains were injured in many places. Those from College Hill and University Mound Reservoirs were completely severed and those from Lake Honda badly damaged.''

(Report of Committee on Water Supply to the Committee on Reconstruction of San Francisco, May 26, 1906. Signed by C. H. McKinstry, Engineer Corps, U. S. A.; Thomas P. Woodward, City Engineer, and Messers. Bogue, Marx, Hunt, Duryea, Manson and Brown.)

The fault line ran through the center of the San Andreas and Crystal Springs Reservoirs, causing some damage to the upper Crystal Springs dam, and by reason of this partial destruction causing the abandonment of the Pilarcitos thirty-inch pipe line.

The total distance of destroyed bridges and broken pipes in the valleys was 2,850 feet. Lake Honda Reservoir was damaged by the earthquake, cracking the heavy western wall. (See the report on the Water Supply of San Francisco, by Herman Schussler, Chief Engineer Spring Valley Water Company, July 23, 1906.)

These reports, when examined, show not only considerable actual damage which has since been in part repaired, but they reveal the potential danger to a water system whose main reservoirs in San Mateo County are traversed by the earthquake fault which may, at any time, cause serious injury.

The market or selling price of the securities, bonds and stocks of the Spring Valley Water Company has declined since the disaster, which, perhaps, indicates, to some extent, the measure of the damage done to the property by the disaster. In January, 1906, I. W. Hellman, syndicate manager, who had agreed to purchase the bonds at 93, sold them to the public in large blocks at 98. They are now selling at 83, or a decline of fifteen points, which represents a shrinkage of $2,678,850. Likewise, the stock, which was selling before the fire at 37% dropped to 20, representing a decline of 17% on the 280,000 shares, or $4,970,000, or a total depreciation in the property, so far as the market value of the securities is concerned, of $7,648,850,

Since the disaster an assessment of three dollars per share has been levied and collected, amounting to $840,000, a large part of which has been presumably used to repair damage.