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Las Vegas - March 29, 1950 ¥ 23-6 Mr. Wm* Reinhardt: MAR 31 ( cc Mr. E. E. Bennett In connection with proposed application for increase in water rates: looking over the file covering our previous rate increase in 1931, it was felt that it would be desirable to break down our accounts by classifications showing how much revenue is produced by each class of service* This has taken some time, but is now available and is attached in triplicate. the previous hearing, they will probably ask us to suggest specific increases for each class of service in order that these may be considered in their relation to the total revenues that may be produced and the percentage of return on investment. We have therefore shown, in red on attached analysis, the suggested increase for each classification now shown in our rate schedule. It is not expected that these will be approved in toto, but we must have a basis from which to negotiate, and these will probably serve as well as any. month, but that is the source from which we derive more revenue than from any other classification. The proposed rate of $2.50 compares favorably with the Reno rate of $2.75, Ely $2.50 and Elko $3.00, and will probably en­counter little resistance. After the house rate is once established and accepted, it is important that other rates be consistent therewith in order to permit a clear and unquestionable application of the rates in the future, as it is sometimes difficult to draw a fine line between a large cabin and a small house. The next highest source of revenues is produced by apartments, which is in practically the same category as a house, and should bear a similar rate. Cabins are next, and should have some differential from the house rate, but not too wide, for the reason ex­plained above. Unfortunately, this is the classification under which auto courts and motels are rated, and we can expect some organized resistance from this source. We may be able to trade some concession in the rate, in exchange for elimination of the present vacancy allowance granted motels and auto courts, although I understand the Motel In discussing this subject with Mr. Wehe and Judging by the procedure of the Commission in The house rate is increase only 50 cents per W~ H. J MAR 31 1950