The San Francisco call., 1904-06-30
GILBERT RULES
IN WATER SUITS
Temporary Injunctions Are
Granted Against Council
and the Supervisors Board
NO DECISION ON MERITS
Spring Valley and Contra
Costa Will Work Under
the Former Rate Schedule

bllC Il VI IIIC1 1O0lO bO1lCu u1C
United States Circuit Judge William
B. Gilbert yesterday handed down a
decision granting the temporary in
junction asked by the Spring Valley
Water Works against the City and
County Of San Francisco to restrain
the Board Of Supervisors from enforc-
ing the water rates ordinance of March
Z. 1904 The amount of the general re-
duction in rates was shown to be seven
per cent except in the hydrant rate
which was reduced fifty per cent,
thereby reducing the monthly revenue
from hydrant service from 50 per
month to 81 per month. The water
company alleged that its plant was Of
the value Of $4,000, 900, and that the
rates as established by the ordinance
would not afford the company a Just
or reasonable compensation for its SER
vices.
Judge Gilbert also granted the tenn
porary injunction asked for by the Con-
ira Costa Water Company restraining
the Oakland City Council from putting
into force the water rate ordinance
adopted by that body for the ensuing
fiscal year. The water company claims
that its plant is Of the value of IS, 500. :
600, and that the rates should allow an
income Of seven per cent over and
above operating expenses and taxes.
The defendants deny that the plant is
worth more than $4,000, 900, and aver
that the rates complained of will allow
six per cent net upon 81, 700, oO0 In the
Contra Costa T,rd
There is nothing in the facts shown to
justify the charge that in adopting the reso-
luton the Council acted arbitrarily or were
actuated by improper motives or by any pur-
pose save to do what in their judgment was
right between the complainant and the city
and its inhabitants.
REMARKS ON SPRING VALLEY.
Judge Gilbert, however, did not pass
upon the merits of the case. He re-
quired the water company to furnish
bond of $4,000. The following are
extracts from Judge Gilbert's opinion
in the Spring Valley case:
It appears that the Board OF Supervisors
took pains to obtain all the information avail
ble to II, and gave free opportunity to the
complainant to present Its evidence and to
examine the witnesses whose evidence the
board acted. Nothing is discIosed in these
proceedings, nor IS anything shown in evidence
this hearing which tends 70 indicate tbst
the board acted otherwise than in good faith
and with an honest purpose TO arrive at a fair
valuation Of the comDlainants property and
TO fix a reasonable rate of compensation for
its water and service.
The opinion reviews the affidavit of
A. Wenzelburger, a public accountant.
who had been engaged in exporting the
water company's books and who found
the total of tangible properties of the
complainant as shown by it's trial bal
ance on December 81, 1903, to be s25,-
55S,1O0 The expert found also certain
items charged to operating expenses
which, in reality, went into part of the
permanent improvements of the com
pany and that the amount so errone-
ously charged to operating expenses for
three consecutive years was S217. 1897 ST.
and that other items which should have
no place in operating expenses brought
the aggregate to S236, ,759 66.
JUDGE MORROW A MODEL.
The opinion goes on to say that in
the case of the Spring Valley Water
Works VS.. San Francisco, decided a
year ago in the United States Circuit
Court by Judge Morrow, the total value
OF the water plant was fixed at $26, 49,
500, and five per cent per annum was
declared to be just compensation for
the use of the water by the city and it's
inhabitants. The opinion proceeds:
Since the date of that decision the nroner+v
of the complainant invested in the water
system exceeds that which was shown 70 he
invested in the former case by $3.50 767 m +hot
its taxes for the coming year will be in excess
of those shown in the former hearing bv S1So
oIO' that IT'S operating expenses will exceed
the operating expenses of that year by S54 600
ana that its income from hydrants viii he
S4S, 636 less than Its income from the same
source under the ordinance of March. 1903
On the face Of these figures It is apparent at
a glance that the net income of the complainant
VIII be less under the new ordinance than the
44O per cent which the court in the former
case adjudged to be less than lust coupenss
ton for the public use of the complainant's
property and to be such a taking of the nron
erty of the complainant for public use in vio-
lation Of constitutional provisions as would
justify its temporary injunction.
If to the estimate of gross earnings fur
nished by the complainant there be added on
account Of increased population the sum of
100000 or $500, 900, IL is still clear that upon
the figures submitted the net income derivable
from the cOmplainants property would under
the new ordinance, be less than Az per cent
1t is urged that since the hearing OF the
former case the defendants have, at great ex-
pense, carefully examined, investigated and
estimated the values of the properties OF the
complainant and have demonstrated by the r.
hdavits which they have presented that large
portions of such properties not actually in
use in furnishing water to the city and county
of San Francisco. and that state of facts is
which was shown on the hearing of the former
case. Without attempting finally to pass upon
the new evidence. or to prejudge its effect when
II shall be submitted on the final hearing when
all the matters therein involved shall be fully
investigated II is sufficient to say
that the showing made at the present time is
not convincing that the property so specified
is not in and is not necessary to the con-
servation Of the water supply, the protection
Of its purity and its delivery to the city nor
does il convince that the estimate placed
by the court upon the value of all the prop
critics in the former case was erroneous or ex-
ceeded their actual value.
The defendants and the Inhabitants of the
city can suffer but little injury in this case
from the enforcement of temporary restrain
ing order, since all the consumers of water
will be protected by bond furnished by the
complainant. On the other hand, IL the in
junction were refused and II should be finally
determined that the ordinance complained of
does. In fact, establish rates which are con-
hscatory and violative of the provisions of the
constitution. II is apparent that the complains
M uouId suffer irreparable loss and he s,,h