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Las Vegas - May 24, 1946 Mr. Trank Strong! V 23-1 f 23-1-28 Mr. S. S. Bennett Mr. L. A. MoNamee) lour letter Kay 20, file 1-7334, with regards to adding ten percent {10$) to cost of water mains In­stalled under Rule 9-A, Will be glad to have your reasons for this change of policy so that we will be able to defend our po­sition in the next hearing of the Public Service Commission if and when the question is raised as to why the water company Installed mains at actual cost for five (6) years under Rule #-A and then suddenly decided to add ten percent thereon. A public utility must, by it1 a very nature, be impartial and without desorifelnatlon. We have, in the past, advised applicants for pipe line extensions that same would be installed at their cost without the addition of any arbitrary or hidden charges. This policy has strengthened our ability to keep Rule 9-A in effect, one of the most important controls we have against unwarranted extensions to increase property values at the water com­pany1 • expense. With particular reference to the McNeil case, will you kindly refer to ray letter April 3 to McNeil Con­struction Company, copy to you. In which we were definitely committed to make the extension at actual oost and refund to McNeil any un-used portion of the contingency fund. This is strictly in line with verbal advice to other sub­dividers regarding oost of pipe line Installation, will you kindly oonfer with out legal department to determine If, under the circumstances. It would be advisable to attempt to inoluds the additional ten percent In contract and If such a position would be tenable. It is my understanding that the ten percent for “Office Expense" In the Cantrell and Gibson agreements were included In error, and should be del eat ed If our policy is to be consistent with past practices. In the McNeil case, this charge of ten percent for offloe expense and supervision would amount to over $1,000.00, which Is many times the out—of—pocket oost to the water company, and X seriously question whether our position could be Justified or sustained, particularly in view of the fact that the pipe line is turned over to us Immediately upon oompletion with no Investment on our part except the agreement to provide water in the new system. WALTER R. BRACES!