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Undeveloped reservoir sites in the Sacramento watershed which hare surveyed and reported upon include the following:

The Folsom site, on the American River a few miles above the city of mento; the Auburn and Coloma sites further upstream on the same ri These three sites are reported upon in Bulletin No. 24, California Engine? Series, under the title "A Major Development on the American River."

The Iron Canyon site, on the main Sacramento River 4 miles abote Bluff, approved by the United States Reclamation Service in 1921, ani plan drawn, which were subsequently reconsidered and revised by Mr. Walker I Young, engineer, United States Bureau of Reclamation, and are covered iz la report dated 1926 and published in Bulletin No. 13, California Engior Series, entitled "The Development of the Upper Sacramento River."

The Table Mountain site, on the Sacramento River 6 miles above the 1-1 Canyon site, now being studied by the United States Bureau of Reclamat currently rumored to have been proven suitable for dam construction.

The Baird site, on Pit River, being a part of the site of the proposed Kez Reservoir project, also under study by the United States Bureau of Reclame and currently rumored to be proven suitable for dam.

In addition to the sites listed within the Sacramento watershed is the Ta view site, on the Trinity River, an adjacent watershed, designed to imp waters for conveying by tunnel for delivery into the Sacramento River point near Red Bluff.

All of these are potential power sites.

Estimates of storage capacities and costs, as given in the Report on 21 Water Plan, and for Iron Canyon in the report on the development of the 19 Sacramento River, are as follows (Bull. 25, p. 94, and Bull. 13, pp. 141, 116

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1 Includes delivery into Sacramento River.

It is believed and here represented that a selection from among theses will afford opportunity for supplying the reasonable water needs and prin of the Sacramento Valley, the Sacramento-San Joaquin delta and the up San Francisco Bay area, with resulting economies of importance.

Using for purposes of illustration the estimated costs of the Iron Car project, with which I am familiar, a saving in capital cost for this projet compared to the much larger Kennett Reservoir is indicated as follows: Kennett Reservoir, cost---Iron Canyon Reservoir, cost (Bul. No. 13, p. 141)--


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Saving in capital cost.
This is the saving in reservoir cost alone. Other savings to be
achieved by elimination of San Joaquin diversion project are as fol-

San Joaquin pump system--
Delta cross channel-----------


Combined saving in capital cost-..

87.927 That the Iron Canyon Reservoir is economically desirable is clearly inte in the Report on the Iron Canyon Project, California, by Mr. Walker R. V dated 1926, in which it is shown that at the rates for power then presse this reservoir would have paid for itself entirely out of net power reveases quote from the synopsis contained in this report as follows:

"In the report it is shown that upon the assumption that the Iron Co Reservoir, power plant, and the Mooney Island power plant (a seconda plant then contemplated) would cover a period of 5 years, that money w


available at 5-percent interest, compounded semiannually; that the cost of the two plants, would not exceed $26,363,810 ; and that the Iron Canyon Reservoir would be permitted to exercise a water right for generating power prior to any up-stream reservoirs not yet constructed; and that the net revenue derived from the sale of power at 4 mills per kilowatt-honr would be applied in the repayment of construction costs; the entire indebtedness ($26,363,810) could be repaid in 53 years after beginning construction” (Bull. No. 13, pp. 75-76).

Under the plan of operation upon which the above estimate was predicated, after allowance to create a minimum power head, the annual yield of water would be 757,300 acre-feet, approximately double the average annual requirement of the delta for salt-water control, 348,000 acre-feet (Bul. No. 13, p. 116; Bul. No. 23, p. ).

In case it should be considered advisable for any reason that larger water storage be provided for use in the Sacramento Valley and Sacramento-San Joaquin delta, such could be provided by a combination of the Iron Canyon, or other reservoir on the upper Sacramento, and one or more American River sites, still at a greatly reduced cost as compared to the Kennett project.

The Folsom site, recommended in the report of the National Resources Committee, December 1936, which estimates the cost at $12,000,000 (p. 125). together with that at Iron Canyon, would provide a combined storage of 1,476,000 acre-feet at an estimated capital cost of approximately $37.000,000. This combination would achieve a measure of regulation and improvement on the Sacramento and of control over American River floods which periodically threaten the city of Sacramento and its environs.


Finance Dirision. APPENDIX No. 3

Memorandum to Colonel Clark :
Re: Docket No. 7030, Central Valley Water Project Authority of the State of


The Finance Division has made a preliminary investigation of this project, known as the Central Valley project, involving the expenditure of approximately $170,000,000 for the comprehensive development of the water resources of the Sacramento and San Joaquin Rivers, for flood control, navigation, irrigation, and power purposes. This investigation was as detailed as was considered appropriate, in view of the fact that we were advised that the amount of money involved would preclude any allocation of funds from appropriations currently available, but because of the great scope of the project and the limited time it was possible to devote to it, it cannot be regarded as final or conclusive.

The preliminary conclusions reached may be summarized as follows:

1. As to flood control, aid to navigation, and salinity control in the San Joaquin Delta : Based on reports of the War Department and the Bureau of Reclamation, the project appears to be desirable and feasible.

2. As to irrigation: The applicant's estimates of revenue from the sale of water for irrigation purposes have been accepted by the Engineer Examiner and by the Finance Examiner as reasonable. The financial condition of many of the irrigation districts which may be purchasers of the water is, however, unsatisfactory, and the debt structure of many of them should be revised before they can be depended on as solvent customers.

It is probably true that some percentage of the land now being irrigated, for which the present sources of supply provide insufficient water for maximum production, are not economically as well suited to irrigation as the moredesirable lands in such a reas, and an economic study should be made to determine whether it would not be more desirable to retire the less-productive land from irrigation and use the water which is now devoted to such land to provide supplementary supplies for the better lands, which are now suffering because of the attempt to make a limited water supply serve too great an area. In other words, it appears possible that intensive, rather than extensive, irrigation in certain regions might be economically desirable, and the retirement of less suitable land through purchase might achieve economic benefits eqnal to those of certain portions of the present project, at a lower cost. In this connection, the effect of greatly increasing agricultural production in the area involved, through increased irrigation, should be studied as to its effect on creation of surpluses and the effect of such surpluses on the market for prol ucts grown competitively in various sections of the United States.

3. As to power developments: The estimates of power revenues by the appli cant, by the Federal Power Commission, and by the engineer examiner ure widely at variance. The dependable market for power does not appar to e to justify the estimates of revenue of the applicant, as it appears that tben must be a very large development of the market for power to absorb all of the available power which may be developed in connection with this project. Os the other hand, the use of water for power must be subordinated to the other requirements if the water is to be available as and when needed for the other purposes of the project. This means that there will be a large variation in the amount of water released from the Kennett Reservoir. This is true becale the reservoir is to be near the head of the Sacramento Basin, and the water stored there will be used to equalize the flow from tributary streams entering the Sacramento River below the reservoir. Moreover, the other demands for water will at times result in drawing down the water level in the reservoir i such a way as materially to affect the operating head. It has been estimated that the minimum production of power available for sale may fall as low 34 10 percent of the maximum. Under these conditions, if the power available for sale is to have value as primary power, a very large steam power standby station will be required; otherwise the great preponderance of available power will be secondary, or dump power, and will have a very low market ralo. No provision has been made in the estimates for such a stand-by station, and no provision has been made for electric distribution systems to facilitate the marketing of power.

4. As to the plan of financing: It does not appear that any estimate or assured revenues can be made which would warrant the conclusion that a les for the construction of this project, payable solely from the net revenues de rived therefrom, would be reasonably secured. The project, if economically sound and carried to completion, would be of far-reaching benefit to the whole State of California, and more particularly to the counties which will receive its benefits, as well as to the particular lands directly affected. It therefore seems entirely reasonable to suggest that the cost of the project and the tr sponsibility for financing it should be apportioned in some way commensurate with the benefits. It has already been recommended by the Chief of Engineen of the United States Army that the Federal Government make a contributie of $12,000,000 toward the construction of the Kennett Dam as representing the direct benefits to navigation and flood control. The State of California should likewise pledge its credit through the issuance of a substantial amount of general obligation bonds, and the various counties benefited by the project either individually or through the creation of a taxing authority including them, should constribute their credit in like manner. Finally, a conservative estimate of reasonably assured revenues could be used as a basis for issuing a limited amount of revenue bonds to finance the balance of the cost. In such a financial set-up, provision should, of course, be made so that surplus rerende would be used equitably to reduce the tax burden necessary to support the general obligation bonds.

You understand, of course, that the above conclusions are the result of preliminary studies, and that the Finance Division feels that further economie studies should be made, and the financial set-up radically revised before any final recommendation can be made on this project.


Assistant Finance Director, JULY 26, 1934.






TRACTS AND ACQUISITION OF PROPERTIES 1. This contract, made this 25th day of March, 1936, pursuant to (a) the act of Congress approved June 17, 1902 (32 Stat. 388), and acts amendatory therent or supplementary thereto, all of which acts are commonly known and referred

to as the reclamation law, and (b) the act of Congress approved April 8, 1935 (Public Res. No. 11, 74th Cong.), designated the Emergency Relief Appropriation Act of 1935, between the United States of America, hereinafter referred to as the United States, acting for this purpose by the contracting officer executing this contract, and Water Project Authority of the State of California, a body politic and corporate created in and by an act of the Legislature of the State of California, approved August 5, 1933 (Stats. 1933, Ch. 1042), designated the (entral Valley Project Act of 1933, and acts amendatory thereof or supplementary thereto, hereinafter referred to as the Authority: Witnesseth:


2. Whereas the sum of $15,000,000 has been allotted to the Bureau of Recla. mation out of funds made available by the aforesaid Emergency Relief Ap. propriation Act of 1935 for the purpose of constructing certain irrigation and reclamation works known as and designated the Central Valley project, California (O. P. 5-24), and the United States, acting by and through the Bureau of Reclamation, is now actively engaged in the prosecution of necessary field investigations preliminary to the design of such irrigation and reclamation works and the preparation of detail plans and specifications for the construction thereof; and

3. Whereas the Department of Public Works of the State of California has over a period of approximately 15 years conducted extensive preliminary investigations, has compiled valuable data, and has formulated a general plan and has prepared designs for the construction of the aforesaid irrigation and reclamation works, and has assembled a large amount of data in connection therewith; and

4. Whereas the department of public works has further initiated and conducted various studies, negotiations, and activities necessary for effectuating said ('entral Valley project, and has made substantial progress in connection therewith ; and

5. Whereas said data, studies, negotiations, and activities are incomplete in many details, but if completed would eliminate duplication of work by the Bureau of Reclamation, would result in the saving of large sums of moneys, and would very materially expedite the time when actual construction of said project could be commenced and the carrying out of work thereon, and it is the desire of the United States that the Authority, through the department of public works, complete such of the preliminary investigations, studies, negotiations, and activities as will result in economies to the United States and the expedition of actual construction work, and

6. Whereas the Authority, acting as aforesaid, is desirous of cooperating with the United States to the end that construction of said Central Valley project may be commenced and carried to completion at the earliest practicable date; and

7. Whereas this contract is entered into in contemplation that a further contract will be entered into between the parties hereto providing, among other matters, for the operation and maintenance by the Authority of the project or units thereof, for payment by the Authority to the United States for expenditures incurred in connection with the project, and the securing by the Authority of contracts for the disposal of facilities to be made available by the project:

8. Now, therefore, in consideration of the mutual covenants herein contained, the parties hereto agree as follows, to wit:


9. In order for the accomplishment of the early construction and operation of the project in the most expeditious and economical manner, the Bureau of Reclamation and the Water Project Authority shall cooperate fully each with the other in attaining such end.


10. The Bureau of Reclamation shall:

(a) Commence immediate construction of the said Central Valley project and continue such construction as funds may be available for such purpose;

(0) prepare all designs, detail plans, and specifications for all project works; (c) make the necessary surveys of rights-of-way and lands to be acquired; (d) furnish to the Authority legal descriptions of lands and properties be! necessary; and

(e) make or cause to be made appraisals of lands, rights, and propers required for project purposes.


11. The Authority, acting by and through the Departinent of Publie Wet of the State of California, to the extent it shall be reimbursed as berei provided, shall :

(a) Negotiate contracts, subject to the approval of the Secretary of Interior or such other officer of the United States as he may designate, pii may be necessary or appropriate for the purposes of said project, including a not limited to (1) contracts between the United States and railroad, telegre telephone, and utility companies, and public agencies having authority se control over highways, for the necessary realinements and rights-of-way : connection with said project; (2) contracts for the acquisition of DHESSEN water rights; (3) contracts for the disposal of facilities to be made available by the operation of the project;

(b) Conduct necessary negotiations for the acquisition of all water rights or rights to the use of water; all rights-of-way and all real property netesen for the purposes of said project, or incident thereto, after survey and apprais. thereof by the United States;

(c) Furnish and make available to and for the use of the United States & and all data, material, maps, plans, studies, and analyses which will me in economies to and expedite the work of the United States;

(d) Designate, subject to the approval of the Secretary of the Interior, the general location and specify the general type and capacity of the principe works of the project, and the chronological order of construction thereof, a all general plans therefor shall meet with the approval of the Authority:

(e) Cooperate with the United States in the preparation of plans for the project, and complete or carry on such investigations, studies, negotiations activities or other work as will result in economies to the United States 25€ the expedition of the work on said project to be performed by the Bureau Reclamation; and

(f) Perform such other work as may hereafter be mutually agreed upon.


12. The United States agrees to reimburse the Authority for its actual a bursements in the performance of the work to be performed by it under the terms hereof, subject to the allowance of vouchers hereunder by the General Accounting Office of the United States. The total obligation of the United State hereunder for service and expense as provided in this contract shall not exceed $75,000. Payment hereunder shall be made on the tenth of each month, or i soon thereafter as the necessary vouchers can be prepared, for expenditures incurred by the Authority hereunder during the preceding month. The AB thority shall make under oath such proof as may be required by the Commis sioner of the Bureau of Reclamation as to the amount of its expenditures here under, and the decision of said Commissioner as to whether such expenditures were made and as to the amount thereof shall be conclusively binding UI the parties hereto. The Authority shall under no circumstances be in any matner obligated to perform or continue to perform any duties, functions, and activities hereunder entailing a total expense in excess of said sum of $75,000


. 13. The books, records, papers, and accounts of the Authority insofar as they relate to the items of expense hereunder, or are in any way connected with the work herein contemplated by this contract, to be paid for by the United States, shall at all reasonable times be open to the inspection of the agents and representatives of the United States, and the Authority will permit the United States and its accredited officers and agents to have access to any and all data and material, assembled for the purposes of said project and will permit the taking of such copies of all books, records, papers, maps, and data thus prepared or assembled as the Bureau of Reclamation may desire.

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