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¥ v - 2 - $20,415.46 shown in the Income Statement on page 9 of the An­nual report of LYiiw to the Public Service Commission. Mr.Sex­ton has stated this rental charge is exorbitant. The amount of the rental is computed by the application of the percentage which the water metered to LVL&W by the Railroad bears to the total amount of water developed and used or sold by the Railroad to the total cost of producing that water. The percentage of water metered to LVL&Sf is approximately 60^> of the total used or sold. The cost of producing water for 1939 was as follows: presumably book cost of the water facilities including right of way, pipe lines, wells, housing over springe, reservoir and meters located on Railroad property on which LVL&W pays its pro­portionate part of interest, depreciation and taxes. The tax estimate is on the basis of $1.75 per tXOO valuation. facilities in connection with the water supply are located on Railroad land outside of the right of way and yards. the property used directly in the operation of the railroad as a collective unit and apportions that valuation to the counties Interest 6$ of $204,677*21 Reserve 4$» of 204,677*21 Insurance (estimated) faxes (estimated) Repairs -Labor $12,260.63 8,1S470..0090 4,000.00 651.7^ » Material estimated 300.00 Supplies Wage of pumpers etc. 2.62 The above item $204,677.71 represents the valuation The sources of the water and practically all the The State Tax Commission establishes the valuation of