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To: Prom: Mr. Wm. Reinhardt Mr. Roy A. Wehe Subject: -Possible Commission Award, Las Vegas Land and Water Company Application for Increase in Water Rates. In accordance with your request and that of Mr. Bennett, Mr. Bertolacci and I have critically reviewed our report from point of view of determining what might be the minimum award that a commission might make under your pending application for an increase in water rates. Such analysis indicates a very substantial reduction in the $90,000 proposed increase. The estimated minimum awards at the following rates of return are: 5|$______5-5/4$_______6$_________6j$ IGerlocspsg s lRseg vezLnziue $24,413 $29,086 $33,758 $38,431 It is my view that it would be very unlikely that the Commission would come to the conclusion that all of the adverse factors should be adopted and applied against the Company, as such in.my opinion are unreasonable. My own view as to the possible gross revenue award would be somewhere around $65,000. This is approximately 72$ of that requested. The attached discussion and tables set forth the de­tail in support of these estimates. Considerable study has been made as to the possible impact of federal income taxes under different bases. The con­clusion reached is this; 1 - Under our claims, as per report for either the Investment or Original Cost basis, the net taxable income is substantially in excess of $50,000 for each individual companyj hence the income tax rate for corporations having taxable net income of $50,000 or less does not apply.