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The serious effect upon the revenues of the Water Com - pany of the deficiencies in the Joint Facility Rent charge found by the Commission becomes very apparent when we examine some cal­culations which will be hereafter discussed, showing the deficien­cies in earnings which will still exist under the prescribed rates. The following computations are based upon the assumption that the Commission’s findings with respect to the rate base of the Water Company itself and its operating revenues and expenses other than the Joint Facility Rent charge are correct, However, at this point we wish to state that we do not agree that the findings of the Commission with respect to the Water Company it­self are correct as we will point out in a latter portion of this memorandum. Nevertheless, we are making that assumption for the purpose of clearly setting forth the affect which the Commission’s findings with respect to the Joint Facility Rents alone have upon the earnings of the Water Company. Attached as Schedule II is a statement showing the de­ficiency in revenues which will be suffered by the Water Company in an annual period under the rates prescribed bjr the Commission, if the Water Company pays Joint Facility Rents to the Railroad that will afford the Railroad Company a return of 65$, after federal income taxes, upon an Original Cost rate base, including 679.42 acres of land and necessary rights of way at present day cost. This schedule eliminates the water rights value from the Railroad Company rate base and includes them at $30,000.00 in the Water Company rate base. Other than that, there has been no -52-