UC-NRLF Report on the Appraisement of Properties of the San Jose Water Company SCALE LEGEND Lands ou/nec/ by San Jose Water Co. F/umes .... . . Condu/fc /? /par i an ?ighfe owned 'by SJWCo H/a fer sheaf L /rres PROPERTIES AND MAIN CONDUl TS SAN JOSE W4TER CO. REPORT ON THE Appraisement of Properties OP THE San Jose Water Company San Jose, California, December 31, 1913 F. C. Herrmann, G. A. Elliott, Engineers or TWF. UNIVERSITY c*/. CONTENTS PAGE Consumption of Water 16 Construction, Chronological Order of 8 Conclusions 42 Description of Properties 10 Depreciation, Discussion of 23 Development Expense 28 Financial Data 17 Going Concern 28 Historical Outline 7 Lands, Value of 45 Letter of Transmittal 5 Operation, Method of 10 Overhead Charges 20 Pump Stations 13 Quality of Water 17 Quality of Service 14 Rainfall, Los Gatos Canyon 35 Reservoirs, Supply 10 Reservoirs, Distributing 1 1 Run-Off, Los Gatos Canyon 37 Saratoga System 14 Service Conditions 14 Subterranean Waters 38 Valuation, Method of 20 Water Rights 34 Water Rights, Method of Valuation 39 Water Rights, Value of 41 APPENDIX Valuation of Real Estate and Rights of Way. PAGE Valuation, Method of *. . 43 Lands, Value of 45 Rights of Way, Value of 49 Summary, Lands and Rights of Way 51 285860 MAPS AND DIAGRAMS. PAGE General Map of System Frontispiece Depreciation Diagram ' 24 Development Expense Diagram 32 Run-Off, Los Gatos Canyon, Mass Diagram 36 ILLUSTRATIONS. PAGE Los Gatos Canyon 7 Howell and Lake Ranch Reservoirs 1 1 Main Pump Station 13 Seventeenth Street Pump Station 15 Buena Vista Pump Station 23 Santa Cruz Mountains 35 Coast Range 39 TABLES. PAGE Consumption 16 Depreciation, Straight Line Sinking Fund 26 Development Expense 33 Overhead Charges, Percentage 23 Pressures in San Jose 15 Rainfall, Los Gatos Canyon 35 Reservoirs, Distributing Capacities of 1 1 Revenue and Expenditures, Six Years 17 Revenue, Sources of 18 Statistics for 1912, General 19 Valuation Structural Property 29 Valuation, Total 42 F. C. HERRMANN G. A. ELLIOTT HERRMANN & ELLIOTT Engineers San Francisco, Cal. February 28, 1914 Joseph R. Ryland, Esq., President San Jose Water Company, San Jose, California. Dear Sir: In compliance with our arrangement of November 25, l $13, we are transmitting herewith our report upon the valuation of the properties of the San Jose Water Company, accompanied by a detailed appraisal schedule. The report is the result of a very careful investigation of the extent, character and condition of all of the properties of the Company. In the absence of plans showing the arrangement and extent of structures, it was necessary to maintain in addition to the men used in the field inventory, an engineering force engaged in surveying and making plans of structures. The present con- dition of structures was given special attention by the writers. Inasmuch as the values of land upon which are located the storage reservoirs of the Company were inventoried separately from the values of the structures thereon, the question of service value of this land for the purpose for which it is used has not been dis- cussed nor any value assigned, other than that given by the Real Estate Appraisers. Respectfully, F. C. HERRMANN, G. A. ELLIOTT, Engineers. o APPRAISEMENT OF PROPERTIES OF THE SAN JOSE WATER COMPANY Historical Outline of Development: The San Jose Water Company was incorporated November 21, 1866, under the laws of the State of California, with a capital of $100,000.00. Up to that date San Jose had been supplied with water pumped from a well located at the corner of First and San Antonio streets; owned by Donald McKenzie. The San Jose Water Company took over the McKenzie plant and extended the service to include the suburbs of San Jose, the town of Los Gatos and vicinity and the town of Santa Clara. With the exception of Santa Clara where a municipal waterworks was installed in 1895, and the addition of Saratoga and Alma, this is the field covered today. The capitalization of the Company at the present time is $1,250,000.00. Briefly the physical properties consist of, 4047 Acres of land on Los Gatos Creek. 30 Acres of land on Coyote Creek. 8.5 Acres of land on Saratoga Creek. Rights of Way and Lots in San Jose. Eleven reservoirs of a total capacity of over 300 M. G. Miscellaneous diverting dams, flumes and conduits for the collection of water. Nine Pumping Stations, and Deep Wells. San Jose Distributing System. Los Gatos Distributing System. Saratoga Distributing System. Office building property, Yard, etc. Water Rights. SEVEN Chronologically the properties of the San Jose Water Com- pany were acquired or constructed as follows: 1869. Agreement made with the Los Gatos Manufac- turing Company to use the water of Los Gatos Creek. Water rights on Los Gatos Creek north of Los Gatos purchased in this year and 1870. 1870-71. Three Mile and Seven Mile Reservoirs con- structed. 1871. Tisdale Reservoir near Los Gatos built in con- junction with the Los Gatos Manufacturing Company. Jones Dam and Flume constructed. 1872. Seven Mile Reservoir enlarged and flume built to Los Gatos. 1874-76. Lake Ranch Reservoir built. 1877. Land acquired and construction commenced on Upper Howell Reservoir. Water Rights of Rundell Creek purchased. Part of present office building location purchased. 1878. Upper Howell Reservoir completed. 1881. Lower Howell Reservoir constructed. 1882. Seven Mile Reservoir enlarged and wood flume replaced in part by concrete. 1886. Additional land purchased at site of present office building and a pumping station erected. 1887. Law suit with Los Gatos Manufacturing Com- pany affecting method of diverting water com- promised. Water rights and lands of the Saratoga and Licks Mill Paper Company at Saratoga purchased. Howell Reservoir enlarged. Water Rights on Saratoga Creek purchased. 1888. Flume from Jones Dam to Tisdale Reservoir reconstructed. 1889. Dam at Lake Ranch Reservoir raised. Addi- tional waters of Saratoga Creek filed upon for use of Saratoga. Site of Cambrian Reservoir purchased. One-half interest in "Los Gatos Waterworks" purchased from the Los Gatos Manufacturing Company. 1890. Cambrian Reservoir built. EIGHT 1892. Land purchased on Los Gatos Creek for protect- tection of its waters. Ousley Reservoir site purchased. Williams Reservoir site purchased. 1893. Additional land purchased at Howell Reservoir. More land secured on Los Gatos and Cava- naugh Creeks to insure purity of the supply. 1894. Site of Saratoga Reservoir purchased and con- struction commenced. 1895. Santa Clara supply discontinued owing to con- struction of Municipal Waterworks. Holly Pumps installed at Main Station. Additional land for protection of waters of Los Gatos and Cavanaugh Creeks purchased. Construction of concrete dam at Williams Reservoir com- menced. 1896. Construction of Main Pump building finished and wells bored in yard. Coyote Creek land purchased. 1897. Buena Vista Pump Station land purchased. 1898. Roberts Springs Pump Station land was pur- chased and station constructed. Ousley Reser- voir built. 1899. Properties of Mountain Spring Water Company of Los Gatos purchased. 1901-02. Williams Reservoir concrete dam raised. Addi- tional land on Los Gatos Creek purchased. 1903. Wells bored on Coyote land. 1906. Williams Reservoir concrete dam raised. Los Gatos consumers services metered. Buena Vista Steam Station built. 1908. Seventeenth Street Pump Station lot purchased, and one well bored. 1909. Pipe line laid from Main Pump Station to cen- tral business district of San Jose for fire pro- tection. Another well bored at Seventeenth Street Pump Station. 1910. Three wells bored at Seventeenth Street Pump Station. 1911. Seventeenth Street Pump Station constructed. Well "A" bored at Main Pump Station. NINE 1912. Steel bridge constructed over Guadalupe Creek to carry fire line pipe. 1913. Electric Pumping Station built at Buena Vista. Three wells bored at Buena Vista Station. Electric Pumping Station built at Main Sta- tion and Well "N" bored. Water rights of Pacific Gas and Electric Company on Los Gatos Creek purchased. Tisdale Electric Booster Pump built. Three Mile Pumping Station built. Control of San Jose Water Com- pany vested in State Railroad Commission by town of San Jose. Case No. 476 of Monahan (Mayor of San Jose) versus San Jose Water Company in matter of rates brought before State Railroad Commission. Inventory and appraise- ment of properties of San Jose Water Com- pany begun by Herrmann and Elliott. Description of Properties and Method of Operation: The sources of supply utilized by the San Jose Water Com- pany may be divided into two classes surface and subterranean, these in turn being subdivided into storage and run-off yields and yields from infiltration galleries and deep or artesian wells. As will be seen, the yield from one or more of the pumping supplies is frequently used to augment the gravity supply, and this should be borne in mind in considering the system as a whole. The use of stored water is resorted to only when conditions are such that the yield from other sources is insufficient to meet the consumption, it being held in reserve at other times against such a contingency. Water is impounded in the following reservoirs: Williams Reservoir, situated near the head waters of Los Gatos Creek, and having a storage capacity of 51,173,000 gallons. Upper and Lower Hoivell Reservoirs, located at the head waters of Rundell Gulch, the Upper Reservoir having a capacity of 71,938,500 gallons and the Lower Reservoir a capacity of 46,477,000 gallons. Lake Ranch Reservoir, situated at the head waters of Beards- ley Gulch, and having a capacity of 110,070,000 gallons. TEN Pi o IT. w u 52; w The other reservoirs in the system may be regarded as Distri- buting Reservoirs, though they serve also as regulators and settling basins. With their several capacities they are: Ousley Reservoir 2,428,680 gallons Mountain Spring Reservoir 4>353>5oo " Tisdale Reservoir 1,868,950 " Seven Mile Reservoir 5,629,800 " Cambrian Reservoir 3,385,820 Three Mile Reservoir 3> 12 3>35o " Saratoga Reservoir 333>oo " San Jose and Los Gatos System: In the operation of the system storage water from the Wil- liams Reservoir is discharged into JLos Gatos Creek, the channel of which is used as a conduit until the Jones Dam is reached. Jones Dam diverts this flow together with the discharge from Rundell Gulch, hereinafter referred to, into a conduit leading to the Tisdale Reservoir in Los Gatos. This conduit consists in part of a flume 24" by 28" in cross section, a portion of which is constructed of wood and a portion of concrete, the balance of 'the conduit being a pipe 28" in diameter. Storage water from the Howell Reservoirs reaches this conduit by means of the channel of Rundell Gulch to its confluence with Los Gatos Creek, whence it is diverted by the Jones Dam. Lake Ranch Reservoir storage is also conveyed to this conduit by means of the channel of Beardslev Gulch to the lower Beardsley Dam, where it is diverted and conveyed in a 12" pipe line to the overflow line from the Ousley Reservoir, thence to the conduit under considera- tion. Besides conveying these storage waters this conduit performs the function of conveying the run-off, directly and indirectly, of Cavanaugh and Trout Gulches, as well as of such tributaries of Los Gatos Creek as empty into it above the Jones Dam. The total capacity of this conduit is about seven and one-half million gal- lons daily. ELEVEN Run-off water is collected in Cavanaugh Gulch by means of two diversion dams, the lower leading directly into a flume tribu- tary to the conduit above referred to and the upper dam diverting the flow into a conduit of six-inch and eight-inch pipe leading to the Ousley Reservoir. The overflow from this reservoir is con- veyed in a twelve-inch pipe to the above mentioned conduit to the Tisdale Reservoir. Trout Gulch run-off also reaches Tisdale Flume by means of a diversion dam and a line of ten and twelve-inch pipe. Run-off from Los Gatos Creek and such of its tributaries as empty into it below the Jones Dam is diverted at the Forbes Dam near Los Gatos and conveyed through a pipe line around Tisdale Reservoir to the main supply line to San Jose. Water from the Ousley Reservoir is gravitated directly into the Distributing System of the City of Los Gatos, the surplus above the daily use finally reaching the Mountain Springs Reservoir. It can also be used to gravitate water to supply the Town of Alma and its vicinity, and further to increase the supply in the Moun- tain Springs Reservoir which it feeds by gravity. The Town of Alma usually derives its supply from the Upper Cavanaugh Dam, and the Ousley Reservoir supply is resorted to only when the run- off from Cavanaugh Gulch is insufficient for this purpose. The Mountain Springs Reservoir derives its supply from Beckwith Spring as a principal source. When necessary this sup- ply is increased by an auxiliary supply from the Ousley Reservoir. Water from Mountain Springs Reservoir is gravitated directly into the Los Gatos Distributing System and contiguous County pipe lines, pressure on all of which can be increased by the Almond Grove, Tisdale and Hill Well Pumping Stations acting as boost- ers. Tisdale Reservoir is the final distributor of the surface sup- ply. Its outlet works are so arranged that water can be delivered directly into the Los Gatos Distributing System as well as into the conduit leading to San Jose. In the latter case the supply gravi- TWELVE MAIN ELECTRIC PUMP STATION EQUIPMENT. Capacity, Twelve Million Gallons Daily. MAIN ELECTRIC AND STEAM PUMP STATIONS. These Stations Receive Their Supply from Subterranean Gravel Measures Eight Hundred Eeet Deep. tates to Seven Mile Reservoir which serves as a regulator. After leaving Seven Mile Reservoir the water passes by gravity to the Cambrian Reservoir, it being arranged however to by-pass this reservoir when desired. From the Cambrian Reservoir water is carried in two lines one of which leads to the Three Mile Reser- voir, the other delivering water directly into the San Jose Dis- tributing System, via Hamilton Avenue and Willow Street. Water is pumped from Three Mile Reservoir into San Jose via Johnson Avenue and Stevens Creek Road. Correlated with the supply reservoirs and conduits are pump- ing plants, which furnish additional water from wells tapping the extensive water-bearing gravels of the Santa Clara Valley. The Tisdale Pump Station is operated by electric power, and has a capacity of 600 gallons per minute. This station pumps from Tisdale Reservoir into the Los Gatos System, and may also be used to pump into the Mountain Springs Reservoir, using the Los Gatos Distributing System as a conduit for this purpose. The Almond Grove Pump Station is operated by steam, and has a capacity of 350 gallons per minute, pumping from wells directly into the Los Gatos System. The Hill Wells Pump Station, a steam plant with a capacity of 350 gallons per minute, pumps water from wells either into the Los Gatos System or into the main supply conduit leading from the Tisdale Reservoir to San Jose. It is also arranged to pump water from the San Jose conduit directly into the Los Gatos Sys- tem, and from either of the above sources through the Los Gatos System into the Mountain Springs Reservoir. The wells at this station are shallow, and may be regarded as an adaptation of infil- tration galleries. The Roberts Pump Station is operated by steam, and has a capacity of 300 gallons per minute. It pumps from infiltration galleries at the site of the pumps into the San Jose supply conduit. The Three Mile Pump Station is electrically operated, and has a capacity of 1200 gallons per minute against a pressure of sixty THIRTEEN pounds, the working pressure of., the San Jose System. It pumps from the Three Mile Reservoir into the main supply conduit, the water passing to San Jose either via Johnson Avenue or Hamilton Avenue as required. The Buena Vista Pump Station is equipped with both steam and electrically operated pumps, and has a capacity of 9000 gal- lons per minute. Water is drawn from deep wells by means of small multiple-stage turbine pumps placed in the well casings, dis- charging into a concrete tank from which it . is pumped directly into the Tisdale Reservoir San Jose conduit. The Main Pump Station located at Santa Clara Avenue and River Street is a steam and electric plant in separate units, having a total capacity of twelve million gallons in twenty-four hours. Its supply is drawn from a cistern fed by deep artesian wells at the plant, and is pumped directly into the San Jose Distributing System. The Seventeenth Street Pump Station is electrically operated, and has a capacity of 3000 gallons per minute. It pumps from deep artesian wells directly into the San Jose Distributing System. Water is supplied to the pumps by small units in the wells as at Buena Vista. Saratoga System: Saratoga is supplied from Campbell Quito Creek. Water is distributed from a small reservoir located west of the town. This reservoir with its conduits is a system in itself, it having no physi- cal connection with either the San Jose or Los Gatos Systems. Service Conditions: The character of service in San Jose and vicinity is best illus- trated by noting, that despite the fact that during the past two unusually dry years the San Jose Water Company was called upon to supply additional emergency consumers whose regular supply had failed, there was not one complaint of lack of water from any service connection to the Company's mains. During the winter months practically all the water used is supplied from the gravity FOURTEEN INTERIOR OF STATION. SEVENTEENTH STREET PUMP STATION. Receives Water from Wells, and Discharges Into the Distributing System at an Unusually Favorable Location for the Maintenance of Excellent Pressure. system. In the summer season this supply is necessarily reinforced by pumping from the deep water-bearing gravels of the Santa Clara Valley. The pumping stations and capacities have been noted before, but attention is directed here to the foresight used in the location of Seventeenth Street and the Main Stations, both of which are so placed with respect to the distributing system that any loss of head is compensated by their discharge at strategic points. These stations pump directly into the Santa Clara Street main at opposite sides of the City. The congested business district centering at Santa Clara and First Streets, lies directly between these two stations and is well protected from fire hazard insofar as water is concerned. In addition to the regular distributing mains, an independent fire line leads directly from the Main Pumping Station to the center of the business district, and is there interconnected with the Santa Clara Street main. The distributing pipe system is of ample size and fairly well connected at intersecting streets. A pressure of from fifty-five to sixty pounds is maintained at Santa Clara and River Streets, the variation from this amounting to about five pounds at practically all points in the system. Hydrant pressures taken at representative points showed the following conditions, using a gauge at Santa Clara and River Streets as a reference. Street Time A. M. Pressure Santa Clara and River 9:30 57 Fair and Alam 10:00 67 Seventeenth Street Station 10:05 63 Seventeenth Street Station 10:05 65 Seventeenth and Jackson 10:30 63 Jackson and First 10:40 63 Fire House bet. St. John and Santa Clara 10:50 55 Tenth and Margaret 1 1 :oo 54 Locust and Grant 1 1 :io 56 University and Alameda 11:25 61 FIFTEEN The total yearly consumption during the past five years, as shown by the Company's records was as follows: 1909 1910 1911 San Jose M. G. 2,628 2,737 2,642 Los Gatos. . . .M. G. 137 137 137 Saratoga M. G. 19 19 19 Total M. G. 2,784 2,893 2 >798 2,346 2,220 Average M. G. D. 7.65 7.95 7.67 6.4 6.1 While records in sufficient detail to determine the daily, weekly and monthly maximums are not available, experience in nearby cities where similar conditions exist indicate that the maximum uses during the year in question would be about the following: 1909 1910 1911 1912 1913 Maximum Day 13.8 14.3 13.8 11.5 n.o Maximum Week 11.5 11.9 11.55 9-6 9- I 5 Maximum Month.... 10.0 10.2 10.0 8.3 7.95 To meet maximum conditions the following resources are avail- able in addition to the gravity supply and outside pumping stations: Seventeenth Street Station 4.3 M. G. D. Main Pump Station 12.0 " Total 16.3 M. G. D. Both these stations discharge directly into the distributing pipe system. If the gravity supply does not utilize the entire capacity of the Tisd ale-San Jose conduit, additional water to the amount of over 12 M. G. D. can be pumped at Buena Vista, mak- ing a total emergency capacity of over 24 M. G. D. Recogniz- ing the fact that a complete dependency on electrical power to operate the various pumping stations might result in an interrup- tion to the supply involving disastrous consequences in the event of fire, working steam pressure is maintained in the boilers at the Main Steam Pumping Station. This station can be put in opera- tion to meet any emergency arising from failure of power or other causes. It is inconceivable therefore, keeping the present use in SIXTEEN mind, that there should be any possibility of a total failure of the supply. The quality of water is excellent. The well supply is bac- teriologically pure, and due to the fact that it goes directly to the consumer without storage in open reservoirs, does not develop algae with its attendant esthetic objections. The gravity supply is well protected by the ownership in fee simple by the Water Company of the watershed lands bordering the Los Gates Canon streams. Sanitary features on the watershed are looked after, the Creek being patrolled during the dry season. Conduits conveying the supply through inhabited portions of the catchment area are so constructed and protected that little danger of contamination exists. Financial Data: There is given herewith in tabulated form data pertaining to the financial operations of the Company exclusive of capital expen- ditures: RECEIPTS. Year Water Sales Miscellaneous 1908 $153,277.11 1909 159,900.70 I9 10 169,442.55 191 1 172,400.64 1912 180,676.87 i9 J 3 204,283.27 $7,562.95 6,890.86 6,856.25 5.504.05 6,256.30 6,992.01 Total $160,840.06 166,791.56 176,298.80 177,904.69 186,833.17 211,275.28 OPERATING EXPENDITURES. Year 1908 . Taxes $12 ^7.80 Operation $76 186.^7 Depreciation Dividends $67,06^.00 Total $156,689.26 TQOQ , I4.22O.7Q <;<;,4<;o.4g $24,038.46 69,759x0 163,487.24 I9IO . m,^6^.io 63,158.85 2^,484.20 72,163.50 176,169.74 IQII , T6,/MC,28 co, 770.78 25,648.73 74,096.50 175,521.29 1912 . . . , 16,402.06 70,40^.14 24,^4^.81 7^,000.00 186,238.91 IQIT. . I7.42Q.66 Q<.68i.i8 27.014. ^4 7^,000.00 2l6.025.58 Year Receipts 1908 $160,840.06 1909 166,791.56 1910 176,298.80 1911 177,904-69 1912 186,833.17 211,275.28 COMPARISON. Expenditures $156,689.26 163,487.24 176,169.74 175,521.29 186,238.91 216,025.58 Surplus $4,150.80 3,304-32 129.06 2,383-40 594.26 Deficit $4,750.30 SEVENTEEN gob t> HH 10 8 tx 00 rt bfl O 3 rt CO 49- CO O "* 0* HH 49- CM 49- S oo o y 10 o ~ 00 Ov xo ^ VO *"> .g IO 00 O ON tx N 0} ON CO ON tx tx O CO ON ON 10 49- o CO W u rt S o o o Tf - . - , o "? ^ "? ^ "**" 9 ^ Jr< tO tx 6 O iO -^- r}- toXS H VQ QC HH vrj OH f* 00 ^J- >O 00 ) Tj- tX HH CO g tX ONOO 10 O txX5^ Ti 10 **) 10 rf- rt XO rf HH ^v(- H tVj H- HH OQ HH HH CO O 4 VC to vo 49- 4^ i- 49- 49- . . . ba ' B g *r-3 G 5 -'" ' 01 " w 'C "3 *^ c HH tn . Q p.,^ "- 1 , p ' 5? f> rt ^ ^Iti ^ S 3 H a, +? D < t. O -M ^ _, III PH SU EIGHTEEN WATER WORKS GENERAL STATISTICS. HERRMANN & ELLIOTT, Engineers, San Francisco, Cal. Information obtained by P. D. RICE. San Jose Los Gatos Saratoga Year ending 1912. Population 45,000. Gravity or pumping. Miles of pipe, all kinds. Miles of C. I. pipe only. Pop. per mi. of pipe, Both 141. 79-3 320. Range of sizes, inches diam i" 18' % Wrought Iron 43-6 Taps in service live 9,761. Per 1,000 population 217. Per mile of pipe 69. Persons per tap 4.6 Meters 2,983. % of taps metered 30.5 Consump. annual m. g 2,190. Daily, gpd 6,000,000. Per capita, gpd 133. Per mile of pipe, gpd 42,644. Per tap, gpd 615. Pressure (range) Ibs 45 70. Hydrants number 425. Per 1,000 population 9.5 Per mile of pipe 3. Gross revenue, total $ 161,438. Per capita $ 3.59 Per mile of pipe $ 1,147. Per tap $ 16.53 Per m. g. Consumption $ 73-71 Gross rev. excl. hyd. rev. $ 158,822. Per capita $. Per mile of pipe $ Per tap $ Per mil. gals. $ Oper. exp. excl. fixed chgs. & depr. $, Per capita $ Per mile of pipe $ Per tap $ Per mil. gals. $ % of gross revenue Net inc. excl. fixed chgs. & depr. $. . . Per capita $ Per mile of pipe $ Per tap $ Per mil. gals. $ % of gross revenue 3-54 1,128. 1 6.06 72.52 76,798. 1.71 545.83 7.86 35-52 47-57 84,640. 1.88 601.56 8.67 38.65 52-43 1912. 3,000. Both 13.2 7-4 227. i" 10" 45-5 832. 277. 63- 3-7 804. 96.6 i37. 375,ooo. 125- 28,409. 451- 20 125. 57- 19. 4.4 17,158- 572 1,300. 20.62 125.24 16,873. 5.62 1,278. 20.28 123.16 8,758. 2.92 663.50 10.52 63.99 51.04 8,399- 2.80 636.31 10.10 61.31 48.96 1912. 750- Both 2.15 0.41 349- 2" 6" 80.6 207. 276. 96. 3-6 119. 57-5 21. 57,500. 77- 26,744. 278. 10 80. 3- 4- i-5 2,080. 2-77 967. 10.04 99.04 2,080. 2-77 967. 10.04 99.04 894. 1.19 415.63 4.31 42-56 42-97 1,186. 1.58 551-74 5-73 56.48 57-03 NINETEEN San Jose Los Gatos Saratoga Hydrant rental, total $ '. . . 2,616. 285. o. Per hydrant $ 6.15 5.00 o. Per mile of pipe $ J 8.59 2I -59 o. Taxes, annual $ 21,560. I >779- 90. % of gross revenue !3-35 10.31 0.43 Bonds o. o. o. Rate of interest o. o. o. Capital stock $1,250,000. Floating debt $135,000. Valuation: The valuation of the property of the San Jose Water Com- pany was determined as of December 31, 1913, by the well-known method of "Reproduction less Depreciation," now in general use for cases of this kind. The San Jose Water Company is one of the oldest corporations in the State, dating back to 1866, and as might be expected under these conditions a history of daily transactions in detail was not obtainable. Until a few years ago only two accounts were kept, entitled "Construction" and "Operation." To the first of these all capital expenditures of any kind and nature were charged in total amounts, whether used for the purchase of land, water rights or structure. The second account was charged with all expenditures made from the revenues of the corporation. Large capital expenditures made in the last few years were shown in detail. Whenever possible this "actual cost" was considered in connection with present value as will be noted on the inventory valuation sheets. For the greater part of the properties it was necessary to draw upon the experience of the writers extending over some twenty years, over five of which were in the construc- tion and operation of water works for domestic and public use. Detailed construction costs of similar work done under the writers' direction and supervision were available. These were changed to conform to the labor conditions existing in San Jose. Prices of material cover an average of the past five years, thereby avoiding unusual fluctuations which would result in abnormal values. Overhead Charges: The reproduction labor and material unit cost of the physi- TWENTY cal elements of any utility does not represent the value of the util- ity, for the reason that the unit costs used include for labor only the value of the services of the men actually engaged upon the work in question. In other words, no allowance is made for con- tingencies, superintendence, engineering, legal expenses, organiza- tion, interest on capital during construction, discounts on capi- tal, insurance and taxes. These expenses are just as real and tangible as the cost of the material and labor and have been paid for by the Corporation in the same way that material and labor were paid for. Contingencies which cannot be foreseen are always present and no matter how carefully the estimated unit costs of reproduction are worked out, experience has shown it is practi- cally impossible to determine accurately the probable cost within 5% of either reproducing or building a structure new. An engineering organization must be maintained for (i) the report and plans preceding organization, (2) final plans, estimates, inspection and supervision of construction. Experience has shown that this expense runs from 2 l / 2 % to 10% of the cost of construc- tion depending upon the nature of the work. Legal expenses of forming the corporation, obtaining the neces- sary rights to operate, and in connection with the acquisition of rights of way and necessary lands should be included, as well as fees paid to the authorities in connection with issuing securities. A proportionate part of the office expense, such as the execu- tive, auditing, purchasing and other departments, is properly a part of construction cost. During the construction of the works capital must be pro- vided for from time to time to meet the expenditures, Until such time as the completed works can be operated, the interest on this capital must be met from some source other than revenue. This interest is a proper charge to construction. It varies with the magnitude of the works, the time taken for construction, and the condition of the money market. In this case the assumed time for the construction of the plant of the San Jose Water Company has TWENTY-ONE been taken at two years and the interest rate at 6%. There must also be taken into account the discounts in marketing securities, all of which should become a part of the construction cost. Liability and plant insurance is another charge which is always present, amounting to between 3% and 4% of the labor cost for ordinary construction work. Finally taxes must be paid on the property as it is acquired, and before it becomes operative. All of the above expenses are present during construction and properly become a part of the capital outlay. They have been recognized by the Courts and Commissions as proper charges, the only indeterminate factor being the amount allowed. This of course varies with local conditions and the size and nature of the utility. The Public Service Commission of New York added for these expenses 23% in the case Brooklyn Borough versus Kings County Company. In the Queensborough Gas and Electric Com- pany Case 22% was added. In the application of the Rochester Corning Elmira Traction Company for authority to issue secur- ities the Commission allowed i6 l /2% for overhead charges. The Wisconsin Commission has usually added 12% for overhead charges, with an additional allowance for "going'' or "earning value". In the valuation of the plant of the San Jose Water Company it has been assumed the shortest time in which the plant could be efficiently reproduced is two years and overhead charges have been worked out on this basis. It is also recognized that certain parts of the plant would not require as much engineering supervision or head office expense as others. With these facts in mind the following rates have been used: TWENTY-TWO ONE UNIT AND SWITCHBOARD AT BUENA VISTA PUMP STATION. BUENA VISTA ELECTRIC PUMP STATION. Water is Pumped from Deep Wells, Insuring the Continued Purity of the Supply. DISTRIBUTING SYSTEM Interest during construction (2 years) 6 % Contingencies and omissions 5 % Engineering and supervision 4-5% Permit to issue securities. . . i % Legal expenses, organization 2 % Taxes, insurance *$% Total 20 % PUMPING PLANTS, RESERVOIRS, CONDUITS, DAMS Interest during construction (2 years) 6 % Contingencies and omissions 5 % Engineering and supervision 7 % Permit to issue securities I % Legal expenses, organization 2 -5% Taxes, insurance Total 23.0% Depreciation : The question of depreciation has long been a subject for argu- ment not only between engineers, but before Courts, Commissions and other rate fixing tribunals. There is no doubt that an honest difference of opinion can exist in regard to the condition of a pipe, pump or any other article, but it seems to the writers that much of this dispute might have been avoided had it been kept in mind that the only true depreciation that can occur (neglecting for the moment functional depreciation) is a lessening in the value or worth due to wear, and that this actual loss in worth is not represented by the application of any theory of probable life but by the actual condition of the structure under consideration. While it is true that in fixing a rate for the sale of a public service corporation commodity depreciation must be allowed, and that some theoretical finite life must be determined on, upon which to base the rate or allowance, it is equally as certain that this assumed life is for what might be termed "accounting purposes" only or the building up of a depreciation fund, and bears no relation to the actual condi- TWENTY-THREE DEPRECIATION DIAGRAM, Illustrating Result of Using Sinking Fund and Straight Line Theories. TWENTY-FOUR tion or value of the property at a given time. The fallacy of attempting to ascertain the "present value" of a structure by care- fully working up the cost of reproduction from actual facts, and then depreciating this value by a factor determined from the ex- pired and theoretical "probable life" is obvious if one considers for a moment the results that are obtained depending upon the method of depreciation adopted. Various ways of providing for depreciation funds have been used, all of which are modifications of two known as the "Straight Line" and "Sinking Fund" methods. The first assumes that the depreciation fund shall be created by charging a flat rate each year against the original cost, based on the expectancy of life. For instance, a structure with an assumed life of twenty years and a cost of $100.00 would carry an annual depreciation allowance of $5.00. This method assumes no interest will be received on the deprecia- tion fund. The "Sinking Fund" method assumes that a sum will be set aside each year at compound interest, that will at the end of the term of life of the structure under consideration return the full investment. Both of these methods have been largely used. They are cited here simply to illustrate the erroneous conclusions that will be arrived at, should either of them be applied to prop- erty with an already partly expired life to determine present value. On the accompanying diagram there is shown the percentage of value remaining at any age for apparatus having lives of twenty- five, fifty, seventy-five and one hundred years, assuming that this value has been determined by applying either of these theoretical depreciation rates to the reproduction value. The sinking fund payments are compounded at 5% interest. Referring to the diagram it is apparent at a glance that there is a wide difference in "Per- centage of Original Value Remaining" or "Present Value" depend- ing upon which of the two methods is used. The differences are tabulated below: TWENTY-FIVE Assumed Life 100 Years. Present Value Expired Life Straight Line Sinking Fund Difference o Years 100% 100% 0% 25 Years 75% 98% 23% 50 Years 50% 92% 42% 75 Years 25% 7i% 46% 100 Years 0% 0% 0% Assumed Life 75 Years. Present Value Expired Life Straight Line Sinking Fund Difference o Years 100 % 100 % % 25 Years 66.6% 94-5% 27.9% 50 Years 33-3% 73 % 39-7% 75 Years % % % Assumed Life 50 Years. Present Value Expired Life Straight Line Sinking Fund Difference o Years 100% 100% 0% 20 Years 60% 84% 24% 30 Years 40% 69% 29% 40 Years 20% 43% 23% 50 Years 0% 0% 0% Assumed Life 25 Years. Present Value Expired Life Straight Line Sinking Fund Difference o Years 100% 100% 0% 5 Years 80% 89% 9% 10 Years 60% 74% H% 15 Years 40% 55% 15% 20 Years 20% 3i% n% 25 Years 0% 0% 0% It is clearly apparent that neither one of the percentages bears any relation to the actual condition of the plant itself, as they ignore all of those factors upon which the expectancy of life depends. It is also apparent that if the property were valued by TWENTY-SIX two capable investigators, one believing in the Straight Line and the other in the Sinking Fund theory, that they would get values as greatly at variance with each other as with the true service value of the utility. It may be held that the Corporation should have provided a depreciation fund out of revenues so that regardless of the condi- tion of the plant at the time of valuation, there will exist a fund which when added to the present value of the plant will approxi- mate the cost. This theory may be applicable to corporations of recent inception, but it must also be remembered that little knowl- edge was had until comparatively recent years as to the necessity for such a fund, and usually it was not considered in fixing rates. The foregoing discussion on the method of arriving at present value in connection with depreciation is not to be construed as an argument against the manner in which depreciation funds are to be provided. To properly protect the stability of the works and guarantee service it is necessary to provide a fund for replacement. The annual contribution to this fund can only be determined on probabilities. It is unfortunate that so much of the published literature on the expectancy of life of various structures is based upon experience in the eastern part of the United States where conditions are more severe than in California, as the result has been to place too short a life on many structures. Functional depreciation or obsolescence exists in water works to a much smaller degree perhaps than in other utilities. In the development of many of the arts, a number of which are of com- paratively recent origin changes and improvements occur almost from day to day. This is not the case with water works except- ing some of the parts of lesser importance. Consequently this feature of depreciation appears principally as inadequacy rather than obsolescence, and therefore depends almost entirely on local conditions. In determining the accrued depreciation of the structural properties of the San Jose Water Company, the condition was TWENTY-SEVEN determined by personal examination. The distributing pipe sys- tem was inspected and a number of samples of pipes were cut out at points selected with a view to age and location. Soil condi- tions were looked into with great care and both the interior and exterior condition of the pipes received careful scrutiny. From the condition and expired life a "Condition Percentage Depre- ciation" was worked out and applied to the reproduction value in order to obtain the present value. As far as possible this course was followed with the remainder of the structures also resulting in a total present value of the physical properties, excepting land of $1,539,699.34, as summarized in Table No. i and shown in detail on the accompanying schedule: Development Expense: No undertaking earns a proper return on the investment from its inception. This has been particularly true of public utility corporations, where a large initial expenditure is necessary to fur- nish the commodity to consumers. Money has to be spent and losses endured to bring the business to the point where it returns a fair rate upon the investment. In a private enterprise early losses can be compensated for by providing for them out of future returns, but in the case of a regulated utility this opportunity does not exist. It is generally recognized in these cases that the cor- poration is entitled to be reimbursed for the early losses attendant upon the building up of a paying business. The history of such California Water Companies as the writers are familiar with all show losses to some extent. The history of the development of the San Jose Water Company shows that during the years 1869-72 inclusive, various assessments were collected amounting in all to $35.00 per share, or about $105,000.00. It is reasonable to assume that part of these assessments was due to deficits in operating revenue, and it is certain that no dividends were paid. It is unfor- tunate that the books of the Company were stolen in 1869, as it is probable in view of the financial history above, that assessments TWENTY-EIGHT TABLE No. i. VALUATION OF STRUCTURAL PROPERTIES. San Jose Water Company. Distributing System, San Jose $816,521.10 Supply Line, Tisdale Reservoir San Jose 121,308.89 Main Steam Pumping Plant 72,706.99 Main Electric Pumping Plant 3 2 >475-53 Seventeenth Street Electric Pumping Plant 32,018.95 Buena Vista Electric Pumping Plant 24,642.49 Buena Vista Steam Pumping Plant 16,476.35 Three Mile Pumping Plant 794-5 1 Three Mile Reservoir 11,089.77 Seven Mile Reservoir 12,232.14 Cambrian Reservoir 10,487.07 Santa Clara Street Yard 12,526.01 Vehicles, Stock, etc 29,342.93 Distributing System, Los Gatos 85,102.33 Almond Grove Pumping Plant 11,061.33 Hill Well Pumping Plant 7,842.44 Tisdale Pumping Plant 1,389.69 Mountain Spring Reservoir 12,840.77 Ousley Reservoir 10,450.76 Pipe Line, Ousley Reservoir Los Gatos 9,635.19 Williams Reservoir 31,938.69 Lake Ranch Reservoir 29,526.19 Upper Howell Reservoir 28,868.49 Lower Howell Reservoir 24,333.83 Tisdale Reservoir 3,741.33 Flume, Jones Dam Tisdale Reservoir 40,323.07 Trout Dam and Pipe Line 1,403.85 Beckwith Pipe Line 3,501.56 Lower Beardsley Gulch Pipe Line 3,925.04 Upper Beardsley Gulch Pipe Line 4,339.52 Forbes Dam and Pipe Line 2,823.75 Upper Cavanaugh Dam and Line to Ousley Reservoir 12,626.82 Lower Cavanaugh Dam and Flume 4,174.58 Jones Diverting Dam I ,35-33 Distributing System, Saratoga 4,700.76 Saratoga Reservoir 2,484.69 Saratoga Reservoir Supply Line 2,403.50 Miscellaneous Property not in Use : Roberts Station Frame Building $1,191.32 Coyote Wells 2,641.78 River Street Cottage 2,500.00 6,333.10 Total $1,539^99-34 TWENTY -NINE were levied prior to this date. It is certain in view of the fact that assessments were necessary that the revenue was not sufficient to provide for the fixed charges and operating expenses, to say nothing of a return upon the investment. The fact that the Com- pany has a fully connected and established business gives in addi- tion to the reproduction value of the physical plant, a "service value." Various methods have been used to determine this intangible value that accrues to an operating public utility. Capitalization of the net earnings used in private enterprises is not available here for the obvious reason that these earnings in a regulated utility depend entirely on its value. If it were possible to ascertain the actual amount expended for the construction of the plant plus the cost of acquiring the business, the development expense would be comparatively simple to determine. The value of the stocks and bonds does not always have a direct bearing on the service value of a utility. A method first used in the valuation of the Dubuque Water Works and later elaborated by Messrs. Metcalf and Alvord seems to offer the most logical method for determining this value. This method determines the cost of reproducing the business over a period of years covering the completion of the construction work and the first few years of its operation. A comparative plant is used for this purpose corresponding to the one in use, assuming the beginning of construction to be the date of the valuation. Com- putations are made as to the difference in earning power of the two plants, and "The sum of the present worths of the annual excess in net return of the existing plant over the comparative plant in the period of years from the date of taking to the time when the earnings of the comparative plant are assumed to become identi- cal with those of the existing plant, represents the development expense of the existing plant." While this method has been criticized as depending entirely THIRTY upon judgment in regard to the time required by the comparative plant to reproduce the earning capacity of the existing plant, it may be said that an appraiser sufficiently familiar with water works to make a reproduction valuation of the structural plant, would also be competent to determine the value of development expense. It has been noted before that the construction period would be two years. In view of the fact that the town of San Jose is situated directly over the water-bearing gravels of the Santa Clara Valley affording an opportunity for every consumer to supply him- self through the medium of a private well, it is reasonable to sup- pose that it would require a more earnest effort and a consequently longer time to acquire the volume of business now enjoyed by the Water Company, than if a town situated in a location where water is not so easily accessible was under consideration. All things con- sidered, a period of six years including the construction period appears to be the time necessary for the comparative plant to acquire the present business of the old plant. Naturally the order of construction would be such as to allow the use at the earliest moment of as much of the plant as possible. In the following calculation of the Development Expense it has been assumed that as much of the distributing pipe system as possible was laid in the first year, together with sufficient supply works to furnish water to consumers at a period commencing one year after the beginning of construction. The tabulation and diagram are explanatory of the method used. THIRTY-ONE 300 DEVELOPMENT EXPENSE DIAGRAM. THIRTY-TWO 3 a Qo 888888 If) M CO M H-t M $$$ ON ON w u-jVO O JN, m o< ! . hi* $ o N oo W M W u o in O H H > O u w co W OH W H 55 W O W fi "oo" 00 s-SS M o es 00 ti T; 01 8^13 ^5.2 >n c 1i I i B*|| COU^M-OO" tS5 fl S. ^ ONVO 00 O M 2^ o c 00 O 10 in co TJ- ON covo 2^8 2 ^R oT^ tN,oo ON S ON ON ON ON ON ON a &. OH water flow ceased, which was near the site of the present town of Campbells. It was also necessary to provide means to prevent the contamination of the water thereby protecting the public from epidemics of typhoid and similar water-borne diseases. The Los Gatos Canyon was, and still is, a favorite place for picnics and camping parties, a source of contamination practically impossible to restrain without absolute control of the watershed. Wisely the Company purchased not only the water rights along the stream as far down as Campbells but also the land bordering the creek above the point of diversion. Beginning in 1870 water rights to approximately 3,000 acres of land just upstream from Campbells were purchased. Unfortunately owing to the method of accounting in early years, it is impossible to ascertain the cost of these water rights. As an element having bearing on the present value the cost would be of great assistance. As nearly as can be determined from existing evidence, at least $100,000 was paid out for this purpose. Several methods have been advanced to arrive at the value of water rights. The most logical method is to apply the water for which the right has been developed to the highest use to which it can be put wherein it competes in the open market, and capitalize its estimated net earning in this use. By reason of the fact that in this locality the supply of water for domestic purposes is not a com- petitive industry, we must turn to irrigation, the next highest use where this condition exists, knowing that the value obtained for the water right therefrom is less than its value for domestic purposes. The domestic use of water is a higher use than irrigation and the water rights used for this purpose have a correspondingly higher value. Lands are now irrigated to some extent from Los Gatos Creek though the water rights of the San Jose Water Company on this stream are superior to all irrigation use. The water of the Los Gatos Creek at present used by the San Jose Water Company could be used for irrigation purposes on lands lying southeast of Los Gatos. THIRTY-NINE Irrigation in the Santa Clara Valley was very carefully and thoroughly investigated by Professor S. Fortier, Chief of the Irriga- tion Investigations of the U. S. Department of Agriculture, the data relating thereto being published in O. E. S. Bulletin No. 158. Subsequently another investigation was made by the Conservation Commission of California in co-operation with the U. S. Experi- ment Stations, the results of this latter investigation being given in O. E. S. Bulletin No. 245. Both of these authorities find that the average net duty of water for irrigation in this valley is 1.6 acre feet per acre, per year. In the latter bulletin the sale price of water is given as follows : Orchard Irrigation Company $3.60 per ac. ft. Santa Clara Valley Water Company. . . . 2.00 " " " Pumped Water up to 20.00 " " " Professor Fortier, in Bulletin No. 158, gives prices ranging from $2.50 to $13.00 per acre foot, according to the availability of water during the various seasons of the year. It is fair therefore to assume an average price of $4.00 per acre per year for irrigation water, which with a duty of 1.6 acre foot per acre, per year, amounts to about $2.50 per acre foot of water. The present annual draft of the San Jose Water Company from Los Gatos Creek (6400 acre feet) using a duty of 1.6 acre foot per acre per year would irrigate 4000 acres. Land to use this water is available on the west side of Santa Clara Valley. As a matter of fact, the farmers around Campbells owning lands aggre- gating much more than 4000 acres are at present seriously consid- ering a project for bringing water from the Coyote River 20 miles away with which to irrigate their orchards. These people would gladly purchase the water of the San Jose Water Company were it available for their use. It is estimated that the capital expenditure necessary to place the waters of Los Gatos Creek on the 4000 acres would be as fol- lows: FORTY Lands and rights of way $15,000 Diverting structures 2,000 Main Pipe Line 16,000 Canals 5,ooo Total $38,000 It is estimated that the annual charges against this plant would be 6% on the lands and rights of way and 10% on structures. The annual charges are therefore: 6% on $15,000 $900.00 10% on $23,000 2,300.00 Total Annual Charges. . . $3,200.00 The gross annual revenue for 6,400 acre feet at the rate above assumed as fair, would be: 4,000 x $4.00 $16,000 Gross revenue $16,000.00 Annual charges 3,200.00 Net revenue $12,800.00 Capitalized at 6% this gives $213,000, which represents the value of the developed water right of the San Jose Water Com- pany on Los Gatos Creek for irrigation purposes, or approximately $40,000 per M. G. D. For the purpose of comparison, it may be stated that Judge Farrington found a value of $60,000 per million gallons per day in the rate suit of the Spring Valley Water Company vs. the City of San Francisco, in 1903. The subterranean waters to which the San Jose Water Com- pany has developed a water right may be utilized for irrigation in a manner similar to that described for the surface waters of Los Gatos Creek. In both the bulletins of the U. S. Agricultural Department, above referred to, it is stated that pumped water commands a higher price than does surface water in existing irri- gation ditches. This is due to the fact that water in the latter is FORTY- ONE only available for a very short' period each year, while pumped water is available throughout the season. It is therefore eminently fair to use the same value per million gallons per day for the sub- terranean water right as is developed in the foregoing for the water right to surface water from Los Gatos Creek. Applying $40,000 per M. G. D. to the developed water right of 5.6 million gallons per day for subterranean water, its value becomes $224,000. Similarly, the value of the developed water right on Saratoga Creek of 4/10 million gallons per day becomes $16,000. Summing up the values of the various water rights as at pres- ent developed, we have: Los Gatos Creek $213,000.00 Saratoga Creek 16,000.00 Subterranean waters 224,000.00 Total value of water right $453,000.00 Or, in round numbers $450,000.00 Conclusions: It is our opinion that the fair present value of all the prop- erties and rights of the San Jose Water Company is $ segregated as follows : Structures $i,539, 6 99-34 Lands 493,218.25 Rights of Way 24,917.00 Development Expense 212,100.00 Water Rights (in use) 450,000.00 Total $2,719,934.59 Respectfully submitted, F. C. HERRMANN, G. A. ELLIOTT, Engineers. FORTY-TWO APPENDIX San Jose, Calif., February, 1914. To the President and Board of Directors of the San Jose Water Company Gentlemen : Herewith accompanying please find our report of appraise- ments of values of lands and rights of way belonging to your Com- pany, which we have made as per your request. The apparent delay in making our report was occasioned by the unusual storms which interfered with our physical examina- tion of the various properties. In arriving at values, in addition to the exercise of our own judgment, we have sought information as to prices at which adjoining and similarly situated lands have been sold and at which they are now held by owners. In making these inquiries we have been careful not to state our object, in order that values obtained might not be inflated. In considering values of those pieces having a frontage on water, we have ignored the value of water for any purpose of sale or commercial use. In reference to appraisement of Lots yoA and 706, being the 32 foot right of way occupied by flume of Company, would suggest that we have based our value for that portion within the Town of Los Gatos according to the values of adjacent property on an acreage basis, and also on that portion of said property from the Town of Los Gatos to Jones Dam, likewise on an acreage basis. While we are satisfied that to obtain this right of way would at the present time entail a cost vastly in excess of the figures here given, it occurs to us that our estimate of value should be based on the land value rather than the probable cost at this time of acquir- ing same by condemnation or otherwise. FORTY-THREE In estimating the values of Lots 15, 17, 20, 21, 22, 26, and 31, which are used for reservoir purposes, we have excluded all con- sideration of service value and have based our figures on the land values as compared with adjoining premises. Referring to Lot 72 and vicinity, while we are informed that some of these lands were acquired by the company at very extrava- gant prices, in one instance at about $3,000 per acre, but probably justified under the conditions, we believe the actual cash value as compared with surrounding tracts, to be about $300 per acre, and have so appraised same. In reference to right of way "B" at Seven Mile Reservoir, we have placed an apparently very low value for the reason that we deem this right of way not absolutely necessary for the operation of your system as a very much shorter and more feasible route could be obtained. We have inspected the various properties named in the accom- panying report, and after full, fair and careful consideration, believe that the values given represent a fair cash value of same. After having completed our statement of values we found it necessary, upon consideration, to make some changes, but owing to lack of time necessary in preparing new copies of this report, we simply erased former values and interlined the new. Respectfully submitted, (Signed) JNO. A. HICKS, (Signed) W. L. ATKINSON, (Signed) EDWARD G. ANGELL, Appraisers. FORTY-FOUR APPRAISAL OF THE LANDS OF THE SAN JOSE WATER COMPANY, A s per Assessment Maps. Lot No. 1A Williams Reservoir Site, Containing 600 acres ; Appraised at $21,000.00. Lot No. IB Williams Reservoir Watershed, Containing 599.95 acres ; Appraised at $14,998.50. Lot No. 10 Sutro Claim, Containing 42.87 acres ; Appraised at $643.05. Lot No. 2 McM. and McM. Purchase, Containing 277 acres ; Appraised at $83,100.00. Lot No. 3 McM. and McM. and Rhodes Pur- chase, Containing 129.71 acres; Appraised at $38,913.00. Lot No. 4 Hartzoke Purchase, Hooker Gulch, Containing 20 acres ; Appraised at $4,000.00. Lot No. S McM. and McM. and Combatalade Purchase, Containing 0.18 acre; Appraised at $36.00. Lot No. 6 Combatalade Purchase, Hooker Residence Site, Containing 15.11 acres; Appraised at $3,022.00. Lot No. 7 Billie Hooker Purchase, Watershed, Containing 161.73 acres; Appraised at $5,660.55. Lot No. 8 Nipher Purchase, Creek above Jones' Dam, Containing 24.04 acres; Appraised at $7,212.00. Lot No. 9 Jones' Dam Site, Containing 7.18 acres; Appraised at $2,154.00. Lot No. 10 Mouchet Purchase, Cavanaugh Gulch, Containing 114.60 acres; Appraised at $6,876.00. Lot No. 11 Simonet Purchase, Cavanaugh Gulch, Containing 97.32 acres ; Appraised at $4,866.00. Lot No. 12 Baker Purchase, Howell Residence Watershed, Containing about 5 acres ; Appraised at $625.00. Lot No. 13 Howell Reservoir Site, Containing 31.26 acres; , Appraised at $9,378.00. Lot No. Baker Purchase, Howell Residence Watershed, Containing 6.03 acres ; Appraised at $542.70. Lot No. 15 Owsley Reservoir Site, Kalfus Pur- chase, Containing 106 acres ; Appraised at $12,720.00. FORTY-FIVE Lot No. Lake Ranch Reservoir Site, Containing 26.03 acres; Appraised at $5,206.00. Lot No. 17 Tisdale Reservoir Site, Containing 3 acres; Appraised at $4,500.00. Lot No. Bray Purchase, near Nino, Containing 3.693 acres; Appraised at $2,215.80. Lot No. 19 Roberts Spring, Containing 3.70 acres ; Appraised at $2,590.00. Lot No. 20 Seven-Mile Reservoir Site, Containing 3.67 acres; Appraised at $1,468.00. Lot No. 21 Cambian Reservoir Site, Containing 5 acres ; Appraised at $2,000.00. Lot No. 22 Three-Mile Reservoir Site, Containing 7.40 acres ; Appraised at $3,700.00. Lot No. 23 Saratoga Hill Purchase, Containing 5.48 acres; Appraised at $3,288.00. Lot No. 24 News Letter Ranch, Containing 45.23 acres; Appraised at $13,569.00. Lot No. 25 Saratoga, Jarboe Purchase, Containing 1.27 acres; Appraised at $635.00. Lot No. 26 Saratoga Reservoir Site, Pullham Acre, Containing i acre; Appraised at $1,000.00. Lot No. 27 Coyote Wells Property, Containing 30 acres ; Appraised at $7,500.00. Lot No. 28 Buena Vista Pumping Plant Site, Containing i acre; Appraised at $1,200.00. Lot No. 29 Feeley Purchase, Big Slide of 1906, Containing 9.34 acres ; Appraised at $2,812.00. Lot No. 30 Saratoga Dam Site, Containing 0.75 acre ; Appraised at $500.00. Lot No. 31 Almond Grove Pumping Station Site, Containing 2.11 acres; Appraised at $3,000.00. Lot No. 32 Mt. Spring Reservoir Site, Containing i .667 acres ; Appraised at $3,300.00. Lot No. 33 Abandoned Reservoir Site, Mt. Spring Co., Containing 11.917 acres; Appraised at $5,550.00. Lot No. 34 Beckwith Dam Site, Mt. Spring Co., Containing 5 acres ; Appraised at $750.00. Lot No. 35 Protection Strip, Beckwith, Mt. Spring Co., Containing 0.51 acre; Appraised at $75.00. Lot No. 36 Beckwith Reservoir (proposed) Site, Containing 1.204 acres; Appraised at $1,000.00. Lot No. 37 Tarbett Wells, Containing 0.979 acre > Appraised at $1,200.00. Lot No. 38 Massol Well, Containing 0.077 acre; Appraised at $100.00. FORTY-SIX Lot No. 39 Hill Pumping Station Site, Containing 1.07 acres; Appraised at $750.00. Lot No. 40 Rich Purchase, Cavanaugh Gulch, Containing 105 acres; Appraised at $15,750.00. Lot No. 41 Riehl Purchase, first of, Containing 3.59 acres; Appraised at $1,077.00. Lot No. 42 McKenzie Purchase, Williams Watershed, Containing 151.53 acres; Appraised at $3,026.60. Lot No. 43 Blow Purchase, Containing 7.21 acres; Appraised at $2,163.00. Lot No. 44 Forest House Property, Containing 74.47 acres; Appraised at $13,032.25. Lot No. 45 Binnie Burell Purchase, Containing 282.34 acres; Appraised at $28,234.00. Lot No. 46 Burell 42-acre Purchase, Containing 42 acres; Appraised at $4,200.00. Lot No. 47 Riehl Purchase, second of, Containing 18.15 acres; Appraised at $5,445.00. Lot No. 48 Otto Purchase, Hooker Gulch, Containing 160 acres; Appraised at $4,000.00. Lot No. 49 Lyndon Purchase, Beardley Gulch, Containing 80 acres; Appraised at $3,600.00. Lot No. 50 Creek in Los Gatos, McM. and McM., Containing 10 acres, more or less ; Appraised at $5,000.00. Lot No. 51 Riecke Purchase, Containing 40 acres, more or less; Appraised at $12,000.00. Lot No. 52 Sold. Lot No. 53 Santa Clara Street, Main Pump Station Site, Appraised at $22,412.00. Lot No. 54 Eleventh Street Lot, Appraised at $2,625.00. Lot No. 56 Miller Wells, Appraised at $2,000.00. Lot No. 57 New York Ave., Los Gatos Lots, Appraised at $1,400.00. Lot No. 58 New York Ave., Los Gatos Lots, Appraised at $1,200.00. Lot No. 59 Kuhn Purchase, Williams' Residence Watershed, Containing 160 acres ; Appraised at $2,400.00. Lot No. BOA Matty Purchase, Sunset Park, Containing 72.83 acres; Appraised at $10,924.50. Lot No. 60B Matty Purchase, Sunset Park, Containing 121.57 acres; Appraised at $15,525.00. Lot No. 61 Scotchler (Losh) Purchase, Beard- ley Gulch, Containing 25 acres; Appraised at $3,125.00. FORTY-SEVEN Lot No. 62 Seventeenth (i4th) Street Pumping Plant Site, Appraised at $4,513.60. Lot No. 63 Adahlita, Adha Smith Purchase, Containing 12 acres; Appraised at $3,600.00. Lot No. 64 Aldercroft, Judah Purchase, Containing 13.15 acres; Appraised at $3,945.00. Lot No. 65 Witten Purchase, Containing 1.32 acres; Appraised at $396.00. Lot No. 66 May Park Lots, Containing 0.66 acre ; Appraised at $1,000.00. Lot No. 67 James Smith Purchase, Williams' Watershed, Containing 160 acres; Appraised at $2,400.00. Lot No. 68 H. Sund Purchase, Oakhill, Los Gatos, Appraised at $50.00. Lot No. 69A J. H. Levy Purchase, Alma Prop- erty, Containing 81.68 acres; Appraised at $16,336.00. Lot No. 69B J. H. Levy Purchase, Alma Prop- erty, Containing 4.12 acres; Appraised at $1,030.00. Lot No. 70A Flume Right of Way in Los Gatos, Containing ; Appraised at $3,600.00. Lot No. 70S Flume Right of Way Out of Los Gatos, Appraised at $220.50. Lot No. 71 Thompson Purchase, Howell Water- shed, Containing 31.28 acres; Appraised at $2,815.20. Lot No. 72 Lexington School Lot, Containing i.io acres; Appraised at $330.00. Lot No. 73 Idylwild Lots, Containing 9.79 acres; Appraised at $2,937.00. Lot No. 74 Howell Flume, Containing 0.216 acre, more or less; Appraised at $100.00. Lot No. 75 River Street Lot, Appraised at $2,500.00. Lot No. 76 Lund Purchase, Containing l / 2 acre, more or less ; Appraised at $100.00. Lot No. 77 Kenny Purchase, Containing 40 acres ; Appraised at $800.00. Lot No. 78 P. G. & E. Purchase, in Los Gatos, Containing ; Appraised at $250.00. Lot No. 79 P. G. & E. Purchase, Outside Los Gatos, Appraised at $3,000.00. Lot No. 80 P. G. & E. Purchase, at Alma, Appraised at $2,000.00. FORTY-EIGHT RIGHTS OF WAY SAN JOSE SYSTEM i. Main Pipe Line. Los Gatos to San Jose. 1. From Tisdale Reservoir to Seven Mile Reservoir. "A" From Tisdale Reservoir to line between P. G. & E. and McMurtry. Appraised at $1660.00. "B" From line between P. G. & E. and McMurtry to S. J. W. Co. Lot No. 58. Appraised at $520.50. "C" From S. J. W. Co. Lot No. 57 to Seven Mile Reser- voir. Appraised at $10,160.00. 2. From Seven Mile Reservoir to Cambrian Reservoir. "A" From Seven Mile Reservoir to point in Los Gatos Road. Appraised at $4344.00. 3. From Cambrian Reservoir to San Jose. "A" From Cambrian Reservoir to Casey Road. Appraised at $477.00. "B" From Casey Road to Union Ave. ( San Jose-Los Gatos Road.) Appraised at $1523.00. "C" From Union Ave. to John- ston Ave. Appraised at $1600.00. II. Adjoining Main Pipe Line. Los Gatos to San Jose. i. In Town of Los Gatos. "A" From Main Street to old mill of the P. G. & E. Co. Appraised at $100.00. "B" For future pipe lines adja- cent to the old mill. Appraised at $50.00. "C" For overflow waters of Tis- dale Reservoir. From Reservoir to old mill. Appraised at $50.00. 2. At Seven Mile Reservoir. "A" For a cleanout pipe line for the Seven Mile Reservoir. Appraised at $420.00. "B" For an overflow ditch for the Seven Mile Reservoir. Appraised at $571.00. III. Above the Town of Los Gatos. 1. Forbes Pipe Line. "A" From old mill at Los Gatos to Forbes Dam. Appraised at $500.00. 2. Trout Gulch Pipe Line. "A" Across line of S. P. R. R. Appraised at $50.00. 3. Lower Beardsley Gulch Pipe Line. "A" From intake, to Los Gatos Flume. Appraised at $500.00. "B" Across S. P. R. R. Line. Appraised at $50.00. "C" For extension of line up the Gulch to land of Curry and Brown. Appraised at $100.00. 4. Lake Ranch Overflow. "A" For flume and ditch from dam at Lake Ranch Res- ervoir. Appraised at $50.00. 5. Lake Ranch Road. "A" Leading from Black Road to Lake Ranch Reservoir. Appraised at $500.00. FORTY-NINE 6. Howell Reservoir Road. 2. Hill Well Pipe Line. "A" Leading from the Bhrfk " A " F m Hil1 Well to line of Road to the Howell Res- A San Jose-Los Gatos Road, ervoir and beyond to the . W** at $IO 7'5- Black Road again. 3- Hi Well Lane A From Hill Well to San Jose- Appraised at $300.00. Los Gatos Road. Appraised at $500.00. 4. Upper Beardsley Gulch Pipe Line. LOS GATOS SYSTEM. "A" From intake down Beardsley Gulch to Ousley Reser- I. Beckwith Spring Pipe Line. voir. "A" From Sta. 29 x 67 to north- TTnr Appraised at $150.00. erly line of S. J. W. Co. 5 ' Upper **+ Gukh Plpe Lot No. 34. <