upr000091 91

Los Angelas, August 7, 1952 Mr. Wm. Reinhardt: (cc - Mr. E. E* Bennett Mr. W. H. Hulsizs: Mr. F. A. Hubbard Mr. R. L. Adamson ,-rj, Referring to letter dated July 22, 1952, from Mr. Thomas A. Campbell, President, Las Vegas Valley Water District, to you, in which he refers to attachments con­sisting of two statements entitled Appendix A and Appen­dix B, both of which deal with certain adjustments in ap­praisal figures previously submitted by the District*s Engineer, Mr, James M. Montgomery: I will comment on each of the items mentioned in Mr, Campbell’s letter. However my comments will refer to dif­ferent amounts of money which are the result of certain ad­justments made by Mr. Montgomery subsequent to the writing of Mr. Campbell’s letter. 1• District Pricing Methods and Price Adjustments. In connection with Mr. Campbell’s statement that 1952 prices were applied to physical units of property as of December, 1950, and his claim for 16 months’ accrued depreciation for the pe­riod January 1, 1950, to May 1, 1952, I have re­examined prices used by the District’s engineer for the distribution system of LVL&WCo. and have found that the prices used here were based on 1952 contract ”in place” prices for a subdivi­sion job at Pomona, California. After investi­gation of 1952 costs of labor and materials and making comparison of construction, costs and con­ditions at Pomona as compared with Las Vegas for pipe line work, this matter was taken up with Mr. Montgomery and reasons pointed out why, in my o-pinion, it would be improper to use Pomona ”in place” prices in developing reproduction costs at Las Vegas. Mr. Montgomery agreed to inves­tigate this matter and subsequently sent one of his men to Phoenix and Tucson, Arizona, to study