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Offiah*, Nebraska, June S, 19^3 m * i 3 7 0 3 . 1 'lejk-Adami (€C-M r. 1. Wippreoht, Omaha, Mr. Frank Strong, Los Angeles, Mr. W. p Bracken, Las Vegas, Mr. K« I . Bennett, Los Angeles, Mr. 0. L. H a ll, Los Angeles, Mr. Leo A. Mcliamee, Las Vegas) P le a se r e f e r t© your l e t t e r o f May Ife, 1 9 A3 He Nevada f a r e s - LVL&W Co. Water Department* Prom the ta b u la tio n on the f i r s t pags o f your l a t t e r , the fa x Coffiffilaslon stay con sid er I t s e l f J u s t ifie d in in crea sin g the a sse ssed v a lu a tio n f o r i| f| o f the water system o f the LVL&W Co. a t Las Vegas, Nevada. However we do not have s u f f i ­c ien t in form ation re sp e ctin g investment revenues and expenses o f the oth er companies, which should a ls o rs c e iv e c on sid eration . Furthermore w ith re sp e ct to t h is p rop erty , we are a l ­ways confronted with the a lt e r n a t iv e o f paying in creased taxes on the one hand, o r having the w ater r a te s reduced on the other. I have d iscu ssed your l e t t e r w ith Mr. Ashby, and p a r t ic u la r ly the recommendations on page A o f your l e t t e r and i t i s our opinion th at, w h ile we must fu rn ish the fa x Commission and the P u b lic S ervice Commission a l l o f the accounting and oth er in fo r ­mation which they req u est, we do not see the n ec essity f o r changing the present accounting p ra c tic e and s e ttin g 'u p a sepa­r a t e set o f accounts f o r the w ater department. D ealing with your recommendations that the jo in t f a c i l i t y ren t fee reduced In the fo u r resp ecte eat out under recommendation Mo. 2, X do not agree that we should admit th at I t i s proper to decrease the d ep re c iatio n r a t e from ¥ to 2$. Such a reduction might fee sound i f th ere was a d e fin it e assurance th at the Land and Water Company w i l l continue to use i t s f a c i l i t i e s to serve the p u b lic at Las Vegas in d e f in it e ly . As you know, there have been se v e ra l p e rio d s durin g which th ere was strong a g it a t io n f o r a m unicipal w ater system, and i f such a system were ever e sta b lish e d , the major p a rt o f the LVL&W f a c i l i t i e s would become o b so le te and I t would be confronted with a la r g e excess capacity which could not be u t i li s e d . In view o f t h is s itu a tio n I b e lie v e the LVL&W i s J u s t ifie d in s e ttin g up d e p re c ia tio n a t a ra te o f dp* In re g a rd to the elim in atio n o f charges f o r taxes not s p e c i f i c a lly determ inable, S cannot see the j u s t if i c a t io n f o r t h is . I t appears to me that the only theory which would j u s t i f y t h is p o s itio n would be that the Commission would expect the H a ll-road Company to pay the same amount o f taxes that i t now pays, even i f a l l o f the w ater f a c i l i t i e s wers owned by, and taxed to the Hater Company. I do not think there i s a sound b a s is f o r the p o s itio n that no taxes should be charged to the Mater Company fo r