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H. T. W . jun 2 7 iwo 'm 'M W M . R. , O JUN 2 8 1950 % Los Angelas, June 26, 1950 60-5 Mr. w* H. Hulsizer: I am enclosing herewith two copies of rough draft of report Issued by Mr. wehe on the results of operation of the water system at Las Vegas. The report will not be placed in final form until all concerned have had an opportunity to study it and furnish their comments. Since we only have a limited number of copies of the rough draft, I assume that you will make available to the other inter­ested parties at Omaha the extra copy which 1 am sending you. Mr. Reinhardt and x have only had an opportunity to go over the report in a very casual manner since receiving it and have not had an opportunity to discuss it with Mr. Wehe. There are a number of items which we will wish to discuss with himjsuch as his valuation of water rights, the allocation of a portion of the Railroad taxes to the water production facilities* the handling of unrefunded advances for pipe line extensions, and the manner in which he has computed a number of the figures used in his report. Mr. Reinhardt and 1 will appreciate having your views on Mr. Wehefa conclusions. At the time w© are considering the report, I think all concerned should be considering the desirability of entering into a new agreement between the Railroad Company and the Water Company with respect to the water furnished by Railroad Company to the water Company. X am sending you a rough draft of a proposed agreement which merely indicates in broad outline the various matters which X think will have to be given consideration in the drafting of a new agreement• One thing that should be decided and incorporated in tbs agreement is the rate base upon which the Railroad will be entitled to earn a return upon its water production facilities. Also we should be sure that all possible elements of cost should be charged to the Water Company. In Section 4 of the rough draft I have indicated the various items which I think W.' H. j. JON 2 9 1950