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V Mr* W, R* Roust August 21, 1952 Tht P.F.E. obtains water at Las Vegas from the Railroad under agreement between Los Angeles & Salt Lake Railroad Company and Pacific Fruit Express dated December 12, 1929, effective December 1, 1929, Contract Audit No.1149. This contract was extended for an indefinite term, subject to 30 days* cancellation, by extension rider dated October 2, 1934, Contract Audit No* 1149-3. When the contract was originally entered into, it was submitted to the Public Service Commission for approval under Section 37 of the Act. I enclose a copy of the Order approving the contract dated December 3, 1929, in which you will notice it is expressly provided that: w * . the Los Angeles & Salt Lake Railroad Company does not, by the execution of this agreement herein approved, become a public utility within the. meaning of the Public Service Commission Act The Union Pacific Railroad Company has been furnishing water to the P.F.3. under this contract since the date of the lease effective January 1, 1936, without any further approval by the Public Service Commission. I doubt that any further approval is required, but if it is deemed desirable, Mr. Cory will probably be able to obtain such authority from the Public Service Commission. As a practical matter it is my thought that we should not disturb the existing situation until someone objects to our furnishing water to the P.F.E. This objection would undoubtedly come, if at all, from the Water District* If we found that we were getting into difficulties by serving the P.F.E., we could readily relinquish that service and the District would undoubtedly be willing to take over the P.F* E. as a customer* I think it is important that the Railroad take whatever steps it is going to take to protect its own water supply as soon as possible* The negotiations with the District for the sale of the water facilities at Las Vegas are reaching a head* So far as I know the District has not been informed that the Railroad intends to develop its own water supply and to sell water to the P.F.3* I think the