Letter from Walter R. Bracken (Las Vegas) to W. M. Jeffers (Omaha) May 20, 1942

Copy Las Vegas - May 20, 1942 Mr. W. M. Jeffers, President, Omaha, Nebraska. Dear Sir: Referring to your letter May 17th, file 199, regarding physical check by Auditing Department of Las Vegas Water services. The count of services was made by a representative of the Accounting Department and the Assistant Agent from my office and the revised rates were placed in effect immediately on com-pletion of check May 1st. We check the town by sub-divisions thoroughly each Spring and Fall, and I believe between 85 and 90% of these additions were made since the tremendous mushrooming of the town started with the beginning of the Magnesium Plant last November. In our last sub-division check in December 1941 we picked up 68 houses not previously shown on our books. Since the housing situation has become so acute here, practically every block has one or two small houses erected on rear of lot, and since the owner usually makes no application for such new service but simply connects it onto the service line to front house, the only way we have of getting these in our accounts is by constantly checking them. Of the additional services picked up by the April 1942 check, there were 137 cabins, rated at $151.50. Since notifying our customers of the revised rates, quite a number of them have called at the office and complained that there is no water con-nection in their cabins, that they are used only for sleeping and they do not feel it is right to be charged for something they are not receiving. I will discuss this with the Auditor. Also, $100 per month was accounted for by vacancy allow-ances we made in hotels and auto courts, on the same basis, as authorized by the Public Service Commissions' rate schedule. will also handle this with the Auditor. Thirty-six trailers were picked up in the Auditor's check. We have no provision in our rate schedule to cover trailers, as this is a new sanitary hazard brought on by the Magnesium Plant, but we have arbitrarily placed a rate of $1 each on these, when they stay in one place long enough for us to collect a month's bill. 214 extra toilets were picked up for a total of $79.85. We have not previously searched for extra toilets in our period-ical checks, but this is entirely proper that they should be included in our rates, inasmuch as flat rate charges are based on the number of facilities served. The same is true of extra bathe, of which 105 were found, total $53.70. 2 137 extra rooms were found, the rate on which is 15% each, as the $2 rate is predicated on a 5-room house. 14 extra chairs were found in the various barber shops around town, 5 small stores, a dress shop, wash rack in garage, 8 offices and other miscellaneous charges totalling $56.70. The most difficult thing to explain is the 106 houses, added by our customers without notification to me. Of course, those with whom I have talked, have stated in general that their houses were but newly built and that they intended to notify the water office as soon as their first months rent was received, but human nature being what it is, they apparently think it is quite all right to cheat a public utility. Considering the fact that the population of Las Vegas has increased from 8,500 in the last official census in 1940, to approximately 23,000 today, and most of this since last November when Basic Magnesium commenced construction, the increase of 13.3% In revenues developed by physical check of services does not of course reflect the full development of the city. We regularly check the city by sub-divisions, picking up $35 to $50 per sub-division, in addition to smaller increases picked up by observ-ation on Sundays. A portion of the increases in report are due to elimina-tion of vacancy allowances which we have granted in the past under authority of the rate schedule authorized by the Commission. During the present "boom" practically all auto courts and hotels are fully occupied on week ends, but average 10% to 20% vacant from Mondays to Fridays. These accommodations do not cater to "regulars", as a higher rental can be obtained from transients, and in fact those regularly employed here could not pay the rates. We have operated on the basis that we do not ask any-one to pay for something they are not getting; but when the facility is in service and we are supplying it with water, we insist on being paid for it. On a flat rate system, judgment must be exercised as to the quantity of service used, and inasmuch as it is not practicable to check the vacancies daily in each auto court and hotel in the city, we arrived at an arbitrary vacancy allowance of 10 to 20% after inspection of the property and con-ference with the owner. This we felt to be fair both to the Company and the consumer. in all cases; in fact we have lost a few of our beat accounts because the consumer felt it would be cheaper to drill a well on his property than to pay his monthly water bill. This included: Svc. 3065 - Blakely Apts. $24 per month and we were notified during the physical check last month that the "Chief Autel" would henceforth secure water from its own well, when the rate was raised from $26.40 to $33.00 per month. While the loss in revenues from these four accounts is about $100 per month or the equivalent of 50 houses, the tendency toward an in-crease in private well-drilling is disturbing, and we protested vehemently to the State Engineer, both personally and in writing. Without going into details, the present status of our campaign on this subject is that the state officials claim they cannot stop the well drilling unless they hold a public hearing in each case. We are now handling through the State Board of Health. My object in mentioning the above is the thought that the application of water rates should be left in the hands of the local office, as a general policy, subject to approval of the Aud-itor in each case. For example, in the case of the "Chief Autel" the owner installed his own water line from our nearest main, some 850 feet, without cost to the Company, and consideration should be given this in applying the rate under the schedule. It is unfortunate that the bulk of these houses were added at a time when our forces were tied up with work orders, new connections, water main extensions into Defense Housing Pro-jects and incidental extraordinary work that always accompanies a "boom" town, and I am grateful for the assistance rendered us by the Accounting Departments check. We shall, of course, con-tinue these checks, and I might say that even since the Auditor's check we have picked up a number of new houses under construction. The Accounting Department has in the past made periodical surprise checks on our monthly report of services and collections, in addition to checks by traveling auditor, but this is the first physical check, to my knowledge, made by other than our own office force. The four consumers against whom bills were not rendered as referred to in first paragraph of your letter, were, as near as I can determine (we did not receive copy of Auditor's report): Buckley's Dress Shop - Opened March 25, 1942. We have billed them for April and May. Wood Furniture Store - Opened March 1st. This was a portion of the Hogan-Westlake automobile shop and they claim they use no water. J. Williams Mr. Williams is a retired railroad employee, sometimes used as an extra police officer, and I arranged with him a few years ago to check the rooming-house lobby at night, eject tramps and generally guard the property, in exchange for his water service. This arrangement has been discon-tinued on advice of auditor. Pearl Allen Mrs. Allen resides in Old Town and was unable to pay her water bills. When a local charitable organization discontinued paying them, there was nothing we could do but discontinue service, which we did in October 1940. Apparently she has been "borrowing" water from neighbors through a hose; this situation has also been corrected. Yours very truly, /s/ WALTER R. BRACKEN, Vice President. copy Analysis of undercharges, Las Vegas Water Services: By Subdivisions: Clark's Las Vegas Townsite (a) $290.55 West Side (Inc. H.F.M.& M.) (b) 179.45 South Additions (c) 103.00 Fairview Addn. (d) 74.95 Buck's " 66.80 Hawkins " 38.65 Wardie " 33.65 Park View " 20.50 Pioneer " 17.15 Hawkins-Craner 2.00 Marlin Add'n .75 $827.45 (A) Business district, hotels & auto courts. (b) Location where pipe line extension was was completed in March 1942, WO-431. (c) Rapidly developing residential district. (d) Residential district, pipe line exten-sion under WO-442 completed April 1942. Las Vegas, Nevada, May 20, 1942. Analysis of Undercharges, Las Vegas Water Services: Houses 106 $204.75 Apartments 51 86.00 Cabins 137 151.50 Trailers 36 36.00 Exa Toilets 214 79.85 Exa Baths 105 53.70 Exa Rooms 137 20.40 Vacancy Allowances (18) 100.50 Miscellaneous 26 56.70 Detail of Miscellaneous: Restaurant (1) Barber Chairs (14) Music Studio (1) Clinic (1) Stores (4) Wash Rack (1) Dress Shop (1) Offices (8) Brick Manufacturer (1)* (Rate increased from minimum of $2.50 per month, to 10% per 1000 brick). Las Vegas, Nevada, May 20, 1942.