Daily capital journal. (Salem, Oregon) 1903-1919, 1910-07-12

question of mountain gravity sys-
TEN. Should a gravity system be in
stalled the city should cease the use
of the water power under its lease,
but should 1t be decided not to in.
stall a gravity system, the city would
have the right of floating $4,000 of
authorized bonds for the purchase
of the power.
The only item in the nature of a
deduction from the appraisement of
the engineers made in the proposal
of the water company is that of wa
ter rights at the intake. The sum
of $4,000 was reported by the en-
gineers as an appraisement of the
value of the right to take water per-
petually from the gravel bar on Min.
to's island. This amount was ar
rived at by estimating the cost of in
stallfng a pipe line to the nearest
available point where similar gra-
vel formation exists. The water
company's right is exclusive SO far
as Minto's island is concerned. The
company, in its proposal, agrees to
lease this water right for $120 per
month, but its officials now state
that they will later submit an
amended proposal placing the rental
at the nominal sum of 81 per year.
The item of $9O,50O is the esti
mated amount for additions to the
plant from the date of the engineers
appraisement up to January 1, 1911,
the latest date at which it was
thought the actual transfer would be
made should the people vote to buy
the plant. The company is contin-
uing the work of extending its mains
and improving its property, and this
item is thought to be ample to meet
all possible demands for improve
ments and contingencies. If,
small sum is found to have been ex-
pended, the council need dispose of
only as much of the $30,500 Of
bonds authorized as is needed.
Cheaper to Buy Plant.
Your committee had hoped to Sc
cure a more favorable proposal from
the company than the one already
made, and which forms the basis
for the figures in the proposed char
ter amendment referred to above,
but the water company is the seller
and we. cannot deny its right to say
what it shall ask for its property |
The city could condemn the plant for
public use, to be sure, but the ex-
perience of other cities has been
that juries, depending necessarily
upon the testimony of experts, have |
invariably awarded sums on a basis
even higher than that reported by
our engineers in this case.
The physical value of the plant be-
ing purely a matter of expert judg-
ment, could not be entered into very
by your committee, and I
the figures reported by our engineer
MI M1AC AaAHHlg dC-
cepted, although certain allowances
for functional depreciation were
stoutly contended for by your COM
mittee.
In the report of our engineer an
item of $12,639 for reinvestment oe
funds and $1,000 for one years
profits to the city we're included In
the appraisement in accordance with
custom in appraising utilities of this
nature for public purchase. These
Items your committee stroVe to elm
mate without success.
While your committee believes
that the city is asked a higher price
Tor this system than private parties
would be willing to pay. neverthe-
less, in view Of all the facts in the
situation. it Is our judgment that the
sity would fin It cheaper to purchase
The pr9sent system than to under
take a competitive one.
A competitive system would In
yolve: First. the payment OF inter
est on a large outlay OF cash used
In the purchase OF equipment and in
OF a complete system, GOV
sring at least year and a half CT