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estimated at $50*000*00 in laying new mains* increasing the flow from the springs and installing meters throughout the Town* with the object of bringing about an equitable distri­bution of the charges and providing an adequate water system for the Town* The Power District has also made arrangements for a contract to provide a practically unlimited water sup­ply from the pumping operations of the Combined Metals Re­duction Company* Before the appointment of a Receiver* the manage­ment of the water company administered the water with very little regard to equality so far as rates were concerned* They had a schedule of rates approved many years ago by the Public Service Commission* but in the administration this schedule was not adhered to* little effort was made to col­lect delinquent accounts, very few meters were Installed be­cause of the cost* and the emphasis was upon discouraging the use of water so as to conform to the supply, and to milk the system without any further investment outlay* The water management also made many deals such as the one with the Union Pacific which you mentioned in your letter* by which preferential treatment was given in order to secure certain advantages to the mining company* These deals were* of course, contrary to the interests of the water custo­mers, not in line with the schedule of rates prescribed by the Public service Damaission* and discriminatory in character* Since the Power District has taken over this water system* it has been their aim to place meters upon every out­let so that all water delivered wbuld be paid for, and the use of water encouraged* This Is thought to be the only way to avoid the condition that existed before* where many people who were paying the minimum used much more water than others paying the same rate and there was no way to control it* Water was wasted* shortages were produced* much revenue was not collected* and a general failure of the system was the result* The installation of meters has largely corrected this At the time the Power District took over the water they asked for an approval of their rates by the Hevada Public Service Commission* The Public Service Commission takes the position that since the Power District is a municipal corpora­tion* it is not voider the jursidietion of the Commission* and they refused either to approve or disapprove the rate schedule A rate schedule has been adopted* however, in agreement with the Board of County Commissioners! this schedule is believed to be In line with the rates generally approved by the Commis­sion, is haded upon a rational scheme for successful operation