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Mr. Wm. Reinhardt - Los Angeles: (cc - Mr. A. E. Stoddard Mr. T. W. Bockes Mr. E. E. Bennett - Los Angeles Mr. R. M. Sutton) Om"v,QM'April 28, IS W M . R. MAY 5 trfSO In connection with your letter of April 10, 1950 your file 1-733^* and the memorandum of March 29, 1950 attached thereto, in regard to ^additional data for use in preparing LVL&WCo. application for rate increase". Renwick, I told them I would endeavor to set out what argu­ments I could think of to refute the Commission's theory that so-called "donations" with respect to the construction of pipe lines for additional subdivisions, should be excluded from the rate base. I have the following ideas on the subject: items were designated as "donations". A better description of them would have been "Advances for property Installed, subject to refund". There is, of course, you understand, a distinction in the method of handling pipe lines constructed under Rules 9A and 90• Under Rule 9C we have a contract with a subdivider that he will agree to construct a certain number of houses and the water lines to serve them, and if and when he lives up to this contract and the houses are completed, we then immediately reimburse him for the entire cost of main extensions which have been constructed divider at Ills own expense. piecemeal by the sub­called "Donations" which I am referring to, are those under Rule 9A. Awuidtiht hiNso. l1et0t1e1r4 aonf dA wpriinld intyg, 1u9p5 0w,i ths tcaornttirnagc to uAt udwiitt hN oc.o n1t0r5a2c2t, were installed during the period from February 1, 19^1 to December 29, 19^9, and as Mr«J3utton’s later letter of April 25th informed you, there were^instances as of December 31* 19^9 , where contracts had expired before complete refund of costs. Regardless of this fact, however, I cannot understand by what method of reasoning the Commission reaches the con- D«^«j.ders, all of the other residents of Las Vegas, including those in the new sub-division, should be entitled to water rates lower because of them, which is what would W.~ M jhappen from a practical standpoint if the cost of these ex- MAY 5 ’ 1950 In my phone conversation with Mr. Wehe and Mr, It is my opinion that it is unfortunate that these In the following, therefore, the particular so- The list of such items furnished you by Mr. White