HomeMy WebLinkAbout; ; Appraisal; 1956-06-01* 1
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City of Carlsbad, California
APPRAISAL
of
' CARLSBAD
:, MUTUAL WATER COMPANY
and
fERRAMAR WATER COMPANY
RETUR
June, 1956 •
JAMES M. MONTGOMERY^^
CONSULTING ENGINEER
IS NORTH OAKLAND AVENUE
PASADENA 1, CALIFORNIA
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JAMES M.MONTGOMERY
CONSULTING ENGINEER
IS NORTH OAKLAND AVENUE
PASADENA I.CALIFORNIA
•RYAN 1-5619 • SYCAMORE 3-7126
INVE5TIGATIOMS AND REPORTS
PLANS ANO SPECI ncATION S
SUPERVISION OF CONSTRUCTION
SUPERVISION OF OPERATION
MANAGEMENT VALUATIONS
T>f Honorable City Council
f^Ji ^ 'City of Carlsbad
'tl; , City Hall
^ ' i * * CM-lsbad, California
June, 1956
31
•^"^"^y^ Gentlemen:
1^ In accordance with the tems of my contract with the City of
" v-^ Carlsbad dated March 12, 1956, I .am submitting herewith a comprehensive
, i '^1 appraisal of the Carlsbad Mutual Water Company and the Terramar Water
Company.
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^ ^ scope of the appraisal and a summary of the values deter-
<- are outlined in Section I.
. . ^ "^^^^ express my appreciation for the assistance received
fepS-*^- ^^^^^"t Nelson, City Manager, Mr. Dennis Wood .aad Mr. Robert
'PHE^ J"^ Carlsbad Mutual Water Company, and .Mr. W..D. Cannon, owner
TOthe Terramar Water Company.
' ' -x^l^othPr^ r-t+ ^ members of my staff will be happy to meet with you or
• ' - ^^^y officials at your convenience for the purpose of discussins
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., 7 - - >-vij. vciixciiLic i uj, uue pLLi pose 01 a
appraisal and answering any questions which you may have.
Respectfully submitted.
James M. Montgomery
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lis not given in this section since this information is detailed in the body
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-I cr med by the South Coast Land Company. The original capital of the
V? f"]HJ Company was $100,000, said amount being .secured from the sale of 2,000 shares
r U3t',ichanged since the original issue.
The present water system is shown in Figures 1 and 2. Figure 1
f*f'f4*^'^ Shows the water system within the city limits of the City of Carlsbad and
1 H*^? V"^t Figure 2 shows the existing .distribution system pressure zones.
SECTION II.- DESCRIPTION OF SYSTEMS
01. General, The following paragraphs briefly describe each water
"^'system. Detailed information with respect to individual sizes and capacities
of the appraisal
l^^^f^i'^-"* 2.02. Carlsbaq. Mutual Water Company. The Carlsbad Mutual Water Company
V. ranized in 191^4- as .the Oceanside Mutual '.Water Company. In 1915^ the
^Ki' Company,obtained control of all water rights> water right .contracts, and
%'< i.real and personal .property of. the then existing .water system in the Carlsbad
'it-*/- t>-^'of Cla'3S."A" stock at $50.00 Jteir value. The number of shares of stock has
Six wells within the Mission Basin in the San Luis Rey River and
^v-* ^ J .a connection to the Citv of Oceanside's lateral pipeline connecting the City
^^i** J"^ °" Oceanside to the San Diego County Water Authority's pipeline comprise
^ sources of supply' for-the Carlsbad Mutual .Water Company. The Carlsbad
'^'i* 1 Water Company receives Colorado River Water through this connection,-
pi^^ valving.arrangement is such that water is delivered only when the m
^^tm^^'fy "'WiKBtic demand of the City of Oceanside is low and, hence, the pressure in
'^'•***i^^"'-=^>r °^^aj^side system is high.
II - 1
JAMES M. MONTGOMERY
COHSUUT1NO ENGINEE^
IB N OAKLAND AVE.
PASADENA I, CALIF
ClTV OF C^Rl.Se.A.D
E X I S T I MG •P1G".U R E:-
05/04/1936 17:24 8195636367 MONTGOMERY WATSON PAGE 02
SgCTIOS II - DESCRIFTXQN OF SYSIEMS
The Carlsbad Mutual Water Competiiy*s system Is divided Into 6
pi^BBure zones, each zone controlled either through a pumping station or
reservoir, or T^oth. The veil supply from the Mission Basin is boosted by
Booster Station No, 5 to Reservoir No, 1 at Elevation 23^j from which it
flows by gravity into Pressure Zone I. The water is chlorinated at both
Booster Station No. 5 and at Reservoir No. 1. Reservoir No. 2, at Eleva-
tion iQk in the City of Carlsbad, is connected to the Mission Basin
transmiflsion line- Two float valves control the amount of flow received
by Reservoir No. 2. During periods of high demand im^ Pressure Zone I, a
separate outlet from Reservoir No. 2, controlled by a check, valve, allows
water to flow from the reservoir into the system.
PresBure Zone II is controlled by Reservoir No. 3 Elevation
2kk. Two separate booster pumps at Reservoir No. 2 supply the wat«r to
this Zone. Ellery Reservoir at Elevation 3U1 controls Pressure Zone III.
The source of water for this Zone is Booster Station No. 3^ located at
Reservoir Jlo. 3. Pressure Zone No. k contains an area along Sltyline Road
and is controlled by a hydro-pneumatic system, called Booster Station
No* 6.
There are three pressure aones In the North Carlsbad area.
Booster Station No. If boosts from the Mission Basin transmission mln to
Reservoir No. h-. The area served by Reservoir No. k is shown on Figure 2
as Pressure Zone V, A hydro-pneumatic installation at Reservoir No, h
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SECTION II - DESCRIPTION.OF SYSTEMS.
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lies water to a limited high area .surrounding the reservoir, called
sure Zone VI. The third zone is a .small area served by gravity from the
smission pain and, hence, is the same as Pressure Zone I.
.. One' further operation that is of interest is the use of . Calavera
rvoir to regulate the supply to the system. During off-peak demand
ods. Booster Station No. .6 boosts water from the system to Calavera
rvoir so .that the flow may be reversed during .the simmier months and
storage used to meet peak-dBioands. The pump at Booster Station No. 6
erely tiorned around when it becomes necessary to boost back into the
s^^W Booster Station No,. 7 .is located along the lU-inch line to Calavera
and boosts water from .this line into Pressure Zone III.
. -Terramar Water Company. The Terramar Water Company is a iSmall
>plied from two sources. The first source consists of four .wells
1 Agua Hedionda Creek, and the second source is a 6-inch connection
'Isbad Mutual Water Company's Calavera pipeline at El Camino Real,
ibution system is shown in Figure 1.
The system is all in one pressxure zone controlled by a reservoir
ion 117. Since the elevation of this reservoir .is low relative
-a it serves, a small booster pmp boosts out of the reservoir and
system to increase system pressures.
to th
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=;ECTX0T^ III - DEFKECIATIOK AND COSTING METHODS .USED IN APPRAISAL
General. Information for this appraisal was obtained from records
first-hand field investigations. In conducting the appraisal'.of the
Mutual .Water Company, considerable cooperation was extended by the
; personnel, both in making .available all .records of the Company and
iing in field investigations. Use was made of the following reports
jmpany's .files :
(l) Legal Report for Berkeley Bank .for Cooperatives. August, 19^6-
Ray C.Eberhard, Attoraey.
(a) Report- on Water Rights and Forecast -Qf Water Supply and
Demand for Berkeley Bank for Cooperatives. August, 19^0.
S. D. Fraser, Manager - C.M.W.C.
(3) .Sanitary Siirvey, City of Carlsbad. 1953"
•State of California Department of Public Health.
(k) City of Carlsbad Fire Protection -Report., July, 195^.-
. Board ,of Fire Underwriters of the Pacific.
(5) Carlsbad Mutual'.Water Company - Economic and Engineering
Studies.
C. R. Browning, .Consiilting Engineer,
In .conducting the appraisal of the Terramar Water Company, the
ords made available to.us were a map of the' distribution system and
.owing the alignment of the transmission main, prepared by the San
15 .and.Electrlc Company. Prior to entering into a contract for making
•aisal,. a representative of this office and Mr. Herbert Nelson, City
. City of Carlsbad, called on. Mr. Williajn Cannon, owner of the Terramar
Mpany. It was understood that .all records of the company would be
3-4lable. These records, however,, were not available after we had
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SECTION III - DEPRECIATION AND COSTING METHODS USED .IN APPRAISAL
^d on the appraisal, aud_, therefore, a number of estimates have "been mad
reparing the appraisal.
.3.02. .Depreciation, A number of methods are commonly used for appor-
ing depreciation expense over a period .of years, such as the straight
method, the fixed percentage of remaining value method, and the sinking
method. In this appraisal, the straight line method has been used,
is the. same method .used by the Carlsbad Mutual Water Company..
.To calculate depreciation by the straight line method, the esti- •
d reproduction cost is divided by the probable life, the quotient repre-
ing .the annual..depreciation charge..
The probable life, or service life, of each individual item has
been-established in this appraisal .after consideration of all .factors involve
^neral, a basis for establishing .service lifes is set forth by the U.S.
Bureau of Internal .Revenue Depreciation Schedule, but this schedule should be
modified to meet local conditions.
3.03. Costing the Inventory. The total estimated costs In the apprais;
* based on the sum of direct construction costs and overhead .costs. In a
few cases it was not possible to determine reproduction costs because of
>lescence. Therefore, replacement costs for substitute facilities identi
capacity have been .computed. Also, in certain cases where the exact deta
^Df 3n installation .could not be . determined, the reproduction .cost was deter-
applying cost index ratios to the original .cost figures.
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SECTION III. - DEPRECIATION AND COSTING METHODS-USED IN APPRAISAL
No original cost figures were available for the Terramar Water
Company, and in-some cases for the Carlsbad Mutual Water Company. The total
.original .cost shown on the detail sheets, of the appraisal for the Carlsbad
Mutual, water Company does not agree with the original .cost shown on the
Company's balance sheet because the information on some of the facilities
TRS not available in detailed form.
3.0^.. Service Lives .Used, (a) Wells. All .veils have been given a
ervice life of ten years. This life is shorter than used in may other
localities, but the records of the Carlsbad Mutual Water Company indicate
that.a ten year service life is avera^ for the. Company's wells based .on the
onstruction methods used. (Ten years is the life of wells that the Company
OBrries on its own books). Well No. 45-1 .of the Carlsbad Mutual Water Company,
-tiUe still .in existence, has been abandoned and, hence, has not been listed.
A ten year service life has also been used for the Terrajnar Water
Company veils. Although the welis axe of a different type of- construction,
the corrosive water and its probable action on the well .casings limit the
service life of the, wells. -The physical features of the wells were determined
f^om conversations with one of the well drillers and with the equipment
^ 'lapany that furnished and installed all of the pumping .:equipment.
(b) Reservoirs. Concrete or gunited reservoirs :have be^n given a
ervice life of 50 years. .Roof systems, which have been listed separately,
^ ^en given a life of 25 years. .The reproduction .costs listed include -
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SECTION III - DEERECIATION AND COSTING METHODS .USED IN .APPRAISAL
ippurtenant piping and other accessory equipment.
Calavera Dam and-Reservoir have been given a 50 year life.
(c) Pumping Equipment. Both well pumps and booster pumps, together
vfith .all appurtenant electrical .equipment, have been given a service life of
15 years. The present condition of the equipment, toother with the corrosive
water and a corrosive atmosphere indicates that a 15 year life is reasonable.
(d) Pipelines. The service lives used for the pipelines are much
the same as currently used by the Carlsbad Mutual .Water Company, with the
exception .of the life used for asbestos cement pipe = • Resistivity measure-
ments were'taken to determine soil .corrosiveness, and the Carlsbad Mutual
Water Company exposed the pipe where requested. In the cases where the pipe
is cement lined, the life of'the pipe has been increased by 10 years over the
life for. the sajue type of unlined pipe. In the case of asbestos cement pipe,-
service life of 50 years has been used for all sizes, whereas the Mutual'
ter Company uses. 1^0 years for pipe 6-inches in diameter and smaller and 70
years for pipe 8-inches in diame.ter and larger.
(e) Valves. .All .Valves have been tabulated separately from .the
pelines and given varying lives in accordance with their size.. The Carls-
i Mutual .Water Company has .no separate accomt for valves.
(f) Services and Meters. Within the Carlsbad Mutual Water Company,
od records are not available giving .the a^s of its existing services and
ters. The policy of the Mutual Water Company has .been not to depreciate
SECTION III - DEPRECIATION AND COSTING METH.ODS USED IN APPRAISAL
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ler item, but the Company attempts to keep them in "as good as new" condition-
Mutual Water Company started in 1952 .replacing .all its steel pipe services
L copper tubing. At the present time, there are .1^53 copper services having
erage age of 2 years and 726 steel pipe services having' an estimated
•age a^ of 10 years. (The estimated age is based .on the opinion of the
_sbad Mutiial Water Company, personnel),
While the policy of the Mutual Water Company has been to repair
!rs when the new copper services - are installed, estimates indicate that the
•age ag^ of the meters is 7 years. Service lives for steel pipe services
meters have been taken as 15 years,- and copper services have been given a
'ear life. -Reasonable estimates could be made on the lives .of the services
m the Terramar Water Company by knowing the dates of 'construction of the
.ous housing .units.
(g) Fire Hydrants. . When the Board of Fire Underwriters of the
Fac Lf ic< surveyed .the Carlsbad Mutual Water Company and Terramar Water Company
systems in May, 195^^ there were hi hydrants in the City. At the present
tnne^ there are 113. A service life of 30 years ha.s been assigned to the fire
bydrant assemblies, for both water systems.
(h) Miscellaneous Items, The service lives of many other miscel-
-ous items are listed in the detailed appraisal sheets.
3.05. Water Rights - Carlsbad Mutual Water Company. (a) Historical
jgg^TQund. The historical background on the Company's water rights in the
'ion Basin is.very adequately described in a report prepared for the
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SECTION' III - DEPRECIATION AMD .COSTING METHODS USED IN APPRAISAL
company by Ray C. Eberhard, of the law firm Scott and Eberhard. .This report
•was prepared .in August, 19hQ, and was titled -"I^gal Report for Berkeley Bank
for Cooperatives.
(1)
(2)
The principle conclusions reached in this report are:
"That the right of Carlsbad Mutual Water Company to
a minimum.of 200 miner's inches continuous flow is •
incontestable <."
"The Company has complied with every requirement
necessai-y to establish a prescriptive right to use
the water which it actually has applied to a bene-
ficial use for many years."
(3) "The Company has the right to divert and .use five
second feet of water during .the irrigation season.
A-limitation on the use of Mission Basin Water is brought out by
Mr.-Eberhard in a letter to Mr. C.,R. Browning, dated January 27, 1955-In
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this letter Mr. Eberhard stated:
- "Reference is made to the contract with the City of Oceanside. The
contract referred to is a contract between South Coast I^d Company
• (predecessor to the Mutual Water 'Company) and the City of Oceanside
by which the South Coast Land Company recognized and .acknowledged
the priority of the right of the City of Oceanside to the waters of
-.• • the San Luis Rey River and that the Company 'has not the right to
• cause either in the present or in the future, any curtailment of the
- water supply actually required for the municipal or other purposes
of the City or the ddmestic, irrigating-or othe purposes .of the
inhabitants of the Cityj or to cause any material increase of cost
• of procuring water for municipal or other purposes to accrue to tiie
City'.
"The Company further agreed that water diverted by it from the River
should not be sold or otherwise disposed of outside a .district
bounded on the west by the Pacific Ocean, on the north by the souther-
ly line of Rancho Santa .Margarita, on the south by the north bank of
Agua Hedionda .Creek, and -on the east by a line parallel to and "three
r' miles inland from the shore of the ocean. The City agreed that it
would not interfere with the establishment and operation of the Com-
>i Pany's extracting not to exceed 200 miner's inches of' water measured
under a four inch pressure, and the diversion of such waters to lands
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•.SECTION III - DEPRECIATION AND COSTING METHODS USED IN APPRAISAI.
situated south of the City of Oceanside within the limits of the
territory hereinafter described^ That agreement contained fruther
provisions .of no particular consequence here excepting that it
•defined an inch of water as meaning l/50th of a .second foot.-"
In this .same letter of January 27, 1955, Mr .-Eberhard furnished the
Lowing, information on the water rights picture:
"The Company holds Permit No. 8205, issued by the State Division
• of Water Resources in October, 1938, permitting it to .divert
•750 acre feet .of water per year from said river, plus th^ right .
to- pump water in excess of said 750 acre feet during any time
when such pumping reduces in like amount the water wasting into
.the ocean;-in other words to divert surface water which other-
wise would waste into the ocean. Such Permit is subject to the.
condition that if diversions thereunder at any time reduce the
static water'table at the Company's wells to less than 10 feet
above mean sea level/'it shall cease pumping .under the Permit
unless the static water table is at least 10 feet above mean se^
.level at the lowest,point .along SOIK cross section of the alluvial
.bottoms between the'company's pumps .and the ocean. For more than
five years last past, no water has been available to the Company
under such Permit by reason of the fact that the water table af
the points specified has been belowthe specified level."
For a period of more than five years last past, I have
been urging the Company to commence a proceeding for the adjudica-
tion of the rights on the San Luis .Rey River so that the unauthor-
' ized or excessive use of water upstream, as well as in the
Mission Basin, can be prevented, and the use of water by riparian
or overlying owners limited to their proportionate share of the
water available. Finally, the Boar-d .of Dii-ectors authorized me
to prepare a complaint to accomplish that purpose, and pursuant
to this action of the Board, steps were taken to" secure the names
of landowners and water users on the stream below. Henshaw Dam. ^
•When this information was. available I prepared a complaint, which
has been filed in the Superior Court of 'San .Diego County, entitled
.'Carlsbad Mutual .Water Company vs. A.A-. Adams, et. al.', being
"Case No. 19^^32 in said Court. Messrs. -Smith and Swirsky of
Carlsbad,- Attorneys, appear as co-counsel for plaintiff. Although
ve limited the defendents to those having 20.acres or more, there
are nearly 9OO defendents named, and we. have included something over
1000 fictitious defendents, as it is anticipated that the necessity
of serving other users will develop = It is my opinion that the
filing ,of this suit was essential to'protect the rights of the
Company on the San Luis Rey River against the certainty that exces-
sive uses upstream, or even in the Mission Basin, will develop into
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SECTION III - DEPRECIATION AND COSTING METHODS USED IN APPRAISAL
prescriptive rights unless the' suit were filed."
Another source of water in the past has been the Calavera well.and
the Calavera Reservoir. This reservoir is an open reservoir having a capacity
but 500 acre feet and is. formed by an earth filled dam- Said dam was
constructed in 19^1 under a-State pemit which allows the annual,storage of
ere feet of run-off from the watershed. The well was drilled in 1950,
I .B no longer being used because of the unsuitable quality of the water..
The principal use of the reservoir; has .been seasonal storage, whereby high
peak demands in the summer are partially met by pimiping from the reservoir.. A
filter plant consisting .of two lupid sand filters exists" at the dam.
(b) Amount of Water Available. Before va.lue can be determined, the
Important criteria to consider, regardless of the fact that ownership has been
determined and may be uncontestable are:
1. Certainty o^' delivery of the quantity obtainable through
that right based on the safe yield of the basin.
2. Assurance against deterioration in quality of the
• supply.
3. -Relationship of quantity of supply to total .demand .on the'
system and the need for supplemental .water..
. The Mission Basin has behaved erratically because of poor run-off
^ conditions and because of increased draft on the whole river system. The
continual depression of water leve.ls indicates an .overdraft of the basin. -This
*^ ition .has been understood by the Carlsbad Mutual Water "Company as evidenced
% the fact that a complaint has been filed in Superior Court of San Diego
County to prevent development of further prescriptive rights. Pumping records
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ggOTTON III - DEPREClATIOjLi^D^B^''^^^- METHODS. USED IN' APPRAISAL
,mpany -indicate that, even though they possess a-200-inch water right,
a right may be' in the magnitude of 2700 .acre feet per year. This is
.tely 185 inches continuous flow. Upon-adjudication resulting from
Laint already filed and'the detemination of safe'yield of the Basin,
s .amount ,mi^t be somewhat reduced -through the process of mutual
tion.
Available Infonnation Indicates that the ™ter supply to be obtained
.avera Lake about equals the evaporation from the' late surface. The
aua^tlty, therefore, can only be considered as a saving of wter which
le would have to be pumped from Mission Basin. .
As a result of tie lowering of the water table, water <iuality has
rated because of Increased salinity. Froi. only a prellminar^y investi-
.f the basin, it would appear that there are three causes of increased
y in the ground water. These are:
(l) Sea water intrusion.
(£) Unfavorable salt balance.
(3) Percolation of -connate waters from the San .Diego
formation on both sides of the valley.
rhe intrusion of highly saline sea wai^r into the well field area appears
likely each year as the pumping trough has deepened and inland gradients '
=curred. -This is shown diagramaticaLly on Figure 3, ^^^^"^ ^
of the alluvial .fill.,from the ocean throu^ the river valley. The
ion of the pumping trou^ , as of January, 1956, vas directly under the
^'s well field': The intrusive sea water is lagging ).ehind .this trough.
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nlylEIiS u-.IVI..,,^ IVIV<i^' 1 .Ui W.IViC
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.SECTION III - DEPRECIATION AND COSTING METHODS USED IN APPR.AISAL
i but it is moving inland, under the present conditions, as .shown by the graph
1 "of chloride ion concentration at a few select wells (Figure 4).
\ The Division of Water Resources has studied in detail the salinity
problem of the San Luis Rey River and it is understood that a report on their
es will .be published in the near future. It .is our belief that the
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r» i *'| ' salxnity problem ..can be remedied, but just how and when is beyond .the scope
of this, appraisal. .The purpose of .discussing the situation is to show the
uncertainity of a continued adequate supply from the present wells of the
: 1 my.
The unfavorable salt balance in the-rivef system has resulted-from
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.hp^ i-- -"rrepeated .cycles of use of the water. Evaporation of a portion of the water
( &i ' Without a corresponding reduction in the total quantity of salt (except for
, * 0^ ) rt) occurs each time the water is used. .This concentration results in
A.
/^t^,^* , [unbaLanee is undoubtedly one of the causes of variability "of quality within
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, : r f Lt .content of tjie ground water that may be above desirable limits. This
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¥'uM ''^'^ basin.
Another source of variability in quality could be the percolation
. O-L :onnate waters from the San Diego formation bordering both sides of the
i r ' rer fill. .The San-Diego formation is defilied as lenticul.ar deposits of
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^^''^'^^^Sloffierate, sandy marl, sand and clay with a very few lenses of lijnestone.
•/"^ tT' ^^^^ water conditions in the river filly some of the connate
••
.73 i"^ ^^r''" ^^"^s held in the formation could
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possibly percolate into the river fill.
Because of possible reduction in available quantity and possible
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JAMES M. MONTGOMERY
r ^°'^SULTING ENGINEER
'® N. OAKLAND AVE.
§ASADENA I, CAL.IF.
.jpy:
CITV OP C AvE. L ^ E> A, O
PLO T OF
GMLORlOe .ION CONCENTR^TiOM
AT SELECTED WELLS
IN TMe S^N LU^-b RE.V
F-iG-UR t.
4
• SECTION III - DEPRECIATION AND COSTING METHODS USED IN APPRAISAL
-ther deterioration in quality, there is no question of the need for supple-
ital water. .This supplemental water should be considered as a base supply
ice' any water from the Metropolitan Water District via .the San Diego County
:er .Authority would be delivered at a unifoxm rate of flow^ The demands
on any water system are far from uniform, and, therefore, the long term carry-
over storage in a ground water basin becomes important for supplying peak
demands and to otherwise compensate for the varying .demands on -the system.
(c) Value of .Water Rights. A water right is the right together
:h the ability, both legal and physical, to take' and use water to the
:lusion of others. Its value is an expression of Judgment .and is,.,not
jceptible to exact mathematical .determination.
Some of the factors influencing Judgment of the value of the water
rights of, the Carlsbad Mutual Water Company have been given above. Other
factors may "be stated as:
1. The relationship of increased land values with water
and depressed land values without water.
2i Costs of capital facilities to produce and deliver
water'to. the land. '
3- Operating .and maintenance costs, including power
for pumping.
.Cost of :capital .facilities .and of water from
supplemental .supply sources.
5- Review.of sales of waterstock in mutual water
Companies and the cost of acquiring a water right
for dry lands by purchase from owners of irrigable
lands their rights to receive water from irrigation
.districts.
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r .SECTION III.- DEPRECIATION AND COSTING METRODS .USED IN APPRAISAL
6. Appraisals by courts, commissions and other official .
authority.
The Carlsbad Mutual Water Company carries its water rights .on-its
is at a value of $11,^^13,00. This .does not reflect the value of these rights
probably only the.out of pocket expense for engineering reports and legal
ice on protecting those rights. C. R. .Browning ,in a report to the Carlsbad
" ual Water Company, dated February, 1955^ stated:
'.'The water rights in the ^assion Basin .are placed at $150,000,00
on- account of the .depleted condition of the Basin and the
relatively poor quality of water; If the basin were fully
. charged and the water of high quality,- the value of the 200-
inch .water right in San Diego County would .be at least double
that shown."
Investigations of the Water Rights of the Carlsbad Mutual Company,
both in Mission Basin and Calavera Lake point to .a concurrence with Mr»
Browning's JudgnEnt. The amount of $150,000.00 has been used as the value of
alL.of the water rights of the Company in this appraisal of-the Carlsbad
.Mixbual Water Company.
3.06. -Water Rights Terramar Water• Company. The Terramar Water Company
r^ceivee its water from two sources:
(1) -Wells in the Agua-Hedionda Creek .on Lot B,
.Rancho Agua Hedionda.
(2) Purchase from the Carlsbad Mutiaal Water Company.
right to drill .wells and pump water from the Agua Hedionda Creek was secured
"-. W. .D, Cannon in an agreement with Ellen K. Hall, vho owns the lands,
^is agreement is recorded in Book 3819, Page I9I. 0fficia:L Records, County of
in-12
•SECTION III :- DEPRECIATION .AND -COSTING METHODS USED' IN APPRAISAL
Saa.Deigo. In essence, the agreement states that W. D. .Cannon has the right
to .construct wells.and other production equipment on these lands and'"operate
all of such equipment and puc^ wa-fcer from said we.lls and to take and remove
all water that he may develop -on said lands and deliver it to such place or
places off of said lands as he in his sole discretion may determine." " In
return for these rights and priveleges, W.-D= Cannon paid the- sum .of
$500i.OO in cash and has to pay $7.. GO per acre foot for each acre foot of
H ter pumped-or taken from said lands. The agreement also contains other
:)i-3visiQns, one of which is the •furnishing of water without'limitation to
LL under certain situations. In developing .this supply, Mr. CaQri,oh also
entered .into agreements with other parties to secure right-of-way for a pipe-
line from the well field. In one of these agreements, Mr. Cannon agreed that
tlB.. extraction from the-basin would not exceed 275 sm-
From discussions "with one of the "we'll drillers and .with the Company
"that maintains the well pumps and also has test pumped .the "wells, it is evir-
dent-that .water is available in only a limited quantity," and what water is
cvnilable is of very poor quality with total .dissolved solids in excess .of
1" »0 parts per million. Mr. .Carl .Wilson, a consulting technologist in water
siTtply^, studied .and wrote a report on the quality of water derived from these
^Hs .in 1953, and it was his tentative conelusion that the Terramar well
'^ter is."affected by ocean water infiltrations."
Bec?Luse of this evidence, this water would not be utilized if there
, re a better alternate source, and, hence, from the City's point of view this
to piimp by agreement has little, if any value.
Ill-13
SECTION IV - FUHCTIOMAL ADEQITAriY OF SYSTE MS
^•°^" ^'^"tional Adequacy of Systems - nen...i m considering the
rchase of a system, sn important consideration is whether or not the
stem, is adequate for what is intended, and hence, upon purchase, whether
not a considerable expenditure of money is required to rehabilitate the
3tem. It is quite possible that many facilities, that do have some re-
Lning physical life, would be removed or abandoned in a rehabilitation
.gram. It has been considered necessary to study the systems in suffi-
mt detail to develop Ideas as to how adequate the existing systems are .
It is recommended, however, that if the City purchases the systems, a master
plan of water system development should be made and-the City should follow
suali a plan to completion.
Ca'-l^t-ad Mutual Water Comnanv. (a) Well .field. The supply
ture in the Mission Basin is an uncertain picture, as described in -detail
in Section III. 'The present well facilities have some remaining life as "
S as the water quality remains suitable. It is our understanding that the
rtty collection lines are operating at capacity and cannot handle addi-
tional wells. The collection sump which collects the well .water needs a new
Booster Station No. 5, which boosts the Mission Basin water to
^rvolr No. 1, is in poor condition, and is so designed that a break in the
•ng could inundate the pump motors and eliminate, the station. In an
f^Eineering study, a new booster station would be proposed and, hence, its
ining life has been adjusted to 2 years.
The Calavera well has not been pumped recently by the Company because
1§
•m
IV-l
SECTION IV - FUNCTIONAL ADEQUACY OF SYSTEMS
saline water. However, in^an emergency the well could be used. For these
Lsons, the value of the well has been adjusted so that its value is one-
'th of its reproduction cost less accrued depreciation.
(b) Reservoirs. Reservoir No. 1 is a concrete and gunite
'ucture with a wood roof. The roof has been fully depreciated and should
replaced. Reservoir No. 2 is a concrete and gunite structure with a wood
)f. This reservoir is at a much lower elevation than Reservoir No. I. .
This low elevation is necessary in order that adequate flow can be received
from Reservoir No. 1. The wood roof on Reservoir No. 2 shoiild be replaced.
In considering Reservoir No. 3, cognizance must be taken of past
;ineering planning for the elimination of this reservoir. In searching
3t reports and in discussions with present operating personnel, it was
found that there is an existing plan to elimina"te Reservoir No. 3 and its
:endant pressure zone by pumping from Reservoir No. 2 directly to Ellery
Reservoir... .Ellery Reservoir would then control a.ll the area now controlled
by Reservoir No. 3 plus its own present area. Some change of this 'nature
)uld be accomplished because of the very small difference in control
Jvation between Pressure Zones I and II, Within the scope of this appraisal,
however, it is not possible to state that this is the only and best solution.
Hovever, this appraisal has considered that Reservoir No. 3 and Booster
itions Nos. 2 and 3 "would be abandoned or replaced in about 2 years.
Ellery Reservoir has a few cracks in the circular vertical wall and
a wood, roof that should be covered. In general, the structure is an
.IV-2
SECTION .IV - FUNCTIONAL ADEQUACY OF SYSTEMS
lequate structure, but this zorie will require additional stora^ if the
sntemplated changes in pressure zoning-are accomplished.
-Reservoir No. k, in North Carlsbad, is a concrete structure with
wood roof and .composition covering. The reservoir also serves as the wet
veil i"or the hydro-pneumatic system serving the higher areas in North Carls- "
bad. , It is understood that some difficulty has been encountered in the
)eration of the hydro-pneumatic system as a result of the controls.
Booster Pumping .Stations, Most of the booster pumping stations
appear sub-standard. Booster Pumping Stations .Nos. 2 and 3 have already been
.scussed in Subsection (b) herein, where • it has been explained tliat the
pumping stations have little value to a purchaser intending to rehabilitate
^the water system. Booster Pumping Station No. k is adequate except that certain
of the facilities, such as the building are.^_fully depreciated. Booster Station
No. 5 has already been described in Subsection (a) herein. Booster Station
No. 6,is located awkwardly and the design of the station, whereby the pump
has to be physically turned around periodically depending upon whether flow
" ould be to or from the Calavera Reservoir, is poor. It is estimated that
this station along ,with Booster Pumping Station No. 7 would be replaced by
City soon after purchase. The present Booster Station No. 7 is in poor
c-adition. The value of both stations has been adjusted to allow for replace-
^it in.2 years. Booster Station No. 8 appears to be "in excellent condition.
(d) Transmission and Distribution System. In 195^, when the Board
Pire Underwriters of the Pacific graded the system, they placed the system
^e.tional Board Class 8. This is a poor classification, but in -discussions
IV-3
SECTION IV - FUNCTIONAL ADEQUACY OF SYSTEMS
ith representatives of the Board-and'in studying their rating sheets, it was
ound that the water system was about a Class 5, -The rating sheet showed that
the Fire Department an'd Fire Alarm System within the City was responsible for
he lower grading. In any case, the Board's data indicates the need for
improvements to the water sys-tem.
Out of the nine fire flow tests .conducted by the Board, five resulted
a flows below the minimum requirements. These deficiencies indicate that in
certain areas the distribution sys-tem is weak and needs reinforcing. It is
believed that if the City were to take over the system all of the mains smaller
than U-inch^and a large portion of the _i|-inch would have to be replaced, and
hence, the value of all mains smaller than l|-inch has been subtracted and the
value of the 4^inch mains reduced by a factor of three-quarters. A number of
larger mains will also have to be installed in the future.
In the large pipelines, an adjustment should be made for the poor
edition of the Calavera pipeline. In a report prepared by the Mutual
Water Company in December, I95Jf, they state in reference to this pipeline:
"This line is in very bad condition and shoiUd be replaced
• in the immediate future, or should be cleaned and cement
lined, with cathodic protection a.pplied to the exterior of
the pipe."
The value of this pipeline has been adjusted so that it now hais a two year
remaining:life.
(^) Filtration Plant. While the reproduction cost less deprecia-
^ ion value of 'the filtration plant at Calavera .Reservoir is considerable, it
^lieved that its value to the City is limited. One-haLF of its remaining
SECTION IV - FUNCTIONAL ADEQUACY OF SYSTEMS
alue has "been considered-as its a'djusted .value. The plant is imdersized
or the demand of the system and it has no provisions for any additional
reatment such as softening, or even .coagulation. If Calavera Dam were to
e raised, the plant would also have to be enlarged. There is a good
possibility that the complete plant would be redesigned.
(f) Adjustments in Value. Based on the foregoing, the following
idjustments have been made in the reproduction cost less accrued deprecia-
;ion value of several of the facilities of the Carlsbad Mutual Water Com-
3any.
Facility
Calavera Well
Reservoir No. 3
.Booster Station No. 2
Booster Station No. 3
Booster Station No. 5
Booster Station No. 6
Booster Station No. 7
Filtration Plant
Transmission Mains
Distribution Mains
Amount Deducted for
Inadequacy and. Obsolescence
$ 8,312.2k
7,905.32
5,670.5^
362.00
76U.26
225.02
229.13
8,929.16
25,760.00
55,^70.83
TOTAL $ 113,629-50
k.O-^. . Oterramar Water Company. (a) Well .field. Since these wells
vould'undoubtedly not be pxmiped by the City, their value is close to zero.
AJi adjusted value of two years remaining life has been given to these wells
In this appraisal, no reproduction cost less accrued depreciation value has
^en listed for the abandoned wells and for the two wells that are not
IV-5
SECTION IV - FUNCTIONAL ADEQUACY OF SYSTEMS
4
4
[uipped. From a .discussion with the driller, the most southeasterly well
' these two that are capped .could produce about 15 gp^^.
(b) Reservoirs and Booster Pumping Stations.- The two reser-
jirs that belong to the Terramar" Water Company are not capable of pro-
Lding good reliable gravity storage for the domestic system as it now
tists. Both reservoirs are at-Elevation II7. With most of the houses
1 the Terramar Units between Elevation ^0 and Elevation 60, a static
pressur of only 25 to 33 psi results^ When the head loss in the 6-inch
_Lne feeding the subdivision is taken into consideration, the pressure is
msiderably lo"wer. The inadequacy of the system is pointed out by the
> jsults of the two fire flow tests conducted by the Board of Fire Under-
riters of the Pacific. .The fire flow requirement was 75O gpm for each
ist, but only 9k gpm was available during one test and 105 gpm during the
scond-test. Toovercome these low pressures, the Terramar Water Company
as installed a 5 horsepower pump designed to boost 320 gpm against a
tDtal head of 52 feet. The pump has a rather flat head-capacity curve
ad-shut-off head is about 62 feet. The pump is not capable of delivering
50 gpm, the minimum fire flow requirement.
If the 'City were to take over the two systems and integrate them,
the reservoirs would be of little value. To give the consumers adequate
lows at good pressures, either another higher reservoir would have to be
constructed, or the Terramar area would have to be connected to the Carls-
bad Mutual Water Company's Pressure Zone I. This will.be discussed further
^ Section V, but in either case, the reservoir and pumping station are
IV-6
T
SECTION IV - FUNCTIONAL ^SQUACY OF SYSTEMS
.dequate^ The value of the irrigation reservoir has been adjusted to zero
and .the "domestic reservoir has been given a value corresponding to a two year
aining life.
.Mr. W.-D, Cannon instructed a representative of this .office that a
11 hydro-pneumatic installation installed in the south end of the pump
building .at the reservoir and the irrigation manifolds and pipelines in the
pump house "were not to be considered as part of the appraisal. The value of
this equipment has not been included^ but if the grounds and .reservoirs are
secured by the City, some arrangement would have to be worked .out for the
.position of this equipment.
(c) Adjustments in value. Based on the foregoing, the following
adjustments ha-ve been made in the reproduction cost leSs accrued depreciation
value of several of the facilities of the Terramar Water Company.
Facility
Wells
Reservoirs
Pump Station
TOTAL
Amount Deducted for
Inadequacy and Obsolescence
$ 9,090.87
31,168.00
1,285.82
IV-7
• & •SECTIOM V - IMEGRATIOM OF THE TWO WATRP gyg^HP
Integration of the Two Water Systems. If both water systems are
purchased by the City,'the City would probably want to integrate the systems
nto a single operation. At the present time, both are operated independently,
xcept for the connection to the Calavera pipeline through which the Iterramar
^ water Company purchases water from the Carlsbad Mutual Water Company.
As was mentioned in Sections II and IV, the Terramar Water Company
B a .one pressure zone system .controlled by its reservoir at Elevation 117,
1 .this control elevation results in too low a pressure to insure adequate
" ^ service. A system analysis has not been conducted on these systems, but it
^^'f^'^'^* l^^ft solution to the problem is to abandon the existing
I - rramar Reseryoir and .connect the Terramar system into the Carlsbad Mutual
^ . ^r Company's Pressure Zone I. This could be done by.constructing an inter-
V^^^^"^ "^-^ ^^S^-^y- T° ^--^ adequate ' .
' ' ^^""l^ -^^ at least :i2-lnches in .diameter and should connect
^"^^ ^'^'^''^ •'^'"^^ ^^'^'^^'^ ^ Avenue. The actual size
' •^tai'C, • .Of this pipeline should be determined by a study that would consider the
i'Mip"^''^'^ °^ "''^ *° alignment of this line
' Ld be as follows :
mm
i
•
fr\ ^ ^^""^ intersection of .Grand Avenue and
the A.T. .& S.F. Railroad, the line should run parallel to
the railroad in railroad right-of-way to Chinquapin Avehue/
'JhxB .line would replace the existing If-inch line in the right-
of-way. At Chinquapin Avenue ^jhe line would turn southwest
and .follow Chinquapin Avenue to U.S. 101, and then would follow
the highway to the Terramar. system.
The Division .of Highways, State of California, has been contacted-and
stated that their policy would allow the construction of a pipeline
V-1
SECTION V - INTECglATION OF THE TWO WATER SYSTEMS
the old -U. S. 101 Highway.
One of the major functions of this 12-inch or larger line would be
strengthen a very weak .distribution grid in the southwest portion of the
Isbad Mutual Wa-ber Compgn.y's system, where there is a preponderance of
- Ech and smaller mains.
.As the Terramar area and other areas to the south develop, it will be
necessary to construct additional storage in this area= The exact location
of this storage and the amount would have to be determined by a study
^ iilting in a master plan of' development for a system covering .the entire,
city..
Another factor that must 'be considered .is the present transmission
main frcmi the well field. As was .stated in Section IV, it is believed that
the wells .of the Terramar Water Company will be abandoned in the futiire.
HoT^ever, it. is our understanding that the supp.lemental Co.lorado River water
vill come into, the area from the east and, hence, this same line can .be
^Used to supply the Terramar area ."with Colorado. Ri"ver water; Some readjustment
1^ slignmeht will probably haYe to be made an.d some pressure regulation .used,
Sucli a procedure would give the "Terramar area .water from two opposite sides
of ..the system and .would give the area a better system.
V-2