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V Los Angeles, April 17, 1933 9215-3-W Mr. Walter R. Bracken: Regarding rental charge for conveying water from springs and well to City of Las Vegas, subject your letter April 11th, file W 23-3-3: covers not only actual maintenance for year 1932, but several items of operating expense averaged over a period of 10 years, and for period 1934 this item will be materially reduced. Regarding rental on spring house and R. C. pipe installed in 1911, as well as 16" pipe installed in 1918: These items are all reflected in our investment accounts and Contract Audit 7372 provides that rental shall be based upon carrying charges, including interest, taxes and depreciation; therefore, the charge as now made is correct. You will please recall that over a considerable period only a small rental was paid by the Water Company for use of Railroad facilities and 4$ for reserve has only been in effect since 1929; there­fore, payment has not been made for 22 years. In this connec­tion, Railroad does not set up a reserve for replacement. be materially reduced in 1934 unless extensive repairs are required this year, and while it is preferred to permit present valuation to remain for this year, consideration will be given to eliminating the 16" clay pipe item, amount #3850.21, from rental base for year 1934. The maintenance and operating charge of #4200.00 As indicated above, item covering maintenance will Yours t