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SUBJECT: L.V.L.&W.Co. - Examination of Accounts 3 Mr* Frank Strong: Referring to your letter dated June 10 rates and charges for water furnished at Las Vegas by L.V.L.&W.Co: With due respect to the judgment of yourself and Mr. Bracken in the matter, I find that I do not have sufficient information in my files on which to base an independent judgment, nor have I been able to secure it through my own organization since receiving your letter. In order to build up the necessary information on which to base an opinion, I would like to determine whether the statements made in the following paragraphs are correct and what the answers are to the questions asked: (a) it appears that the vacancy allowance was established in 1931 and that the arbitrary figure of 20% was also established at that time. Have not housing conditions changed considerably since 1931? The percentage was established at a time when the present situation could hardly have been conceived. If it represented the average between 1930 and 1940, strong justification for its continuance now appears necessary. (b) Without suggesting that there be any change in the present schedule of rates, I note that they were established effective October 1, 1931 during the period of depression. I have been informed of increased costs of meals and lodging in Las Vegas, the former apparently having reached a new high. This Department also has record of salary increases that have recently been granted to supervisory positions at that point which were predicated on "High living expenses at Las Vegas". If there are reasons why the rates have not been increased and I suppose there are, this again in my opinion points to a reconsideration of the vacancy allowance and all other avenues for possible depletion of revenues. (c) The Commission’s schedule which you quote refers to "such appropriate vacancy allowance in monthly apartment houses, bungalow courts and auto camp services". It seems there must have been some reasons for the omission of "hotels", which poses this question: What were the Commission’s reasons and what outweighed them to the extent of justifying the extending of such allowances to "hotels"? (d) Dealing further with the matter of appropriate vacancy allowance": It appears that there should be some gauge