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Publisher
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Transcription
Mr. Wm. Reinhardt 6. August 7, 1952 (3) Interest During Construction This item is a proper charge to a reprodue- tion estimate and I do not see that it would have any bearing whatever on the payment of interest on construction advances. The total of ’’Overhead* as Included in the District depreciated total may be broken down as follows: Engineering | 49,547 General Expenditures 39*367 Interest During Construc- Pereent of Depreciated Cost 8.53$ In addition to the foregoing the District has included under "Overheads” an a-mount of $2,751, which is the estimated a-mount of freight on additions to Production Facilities subsequent to December 31* 1950. In my opinion this item of freight is a proper charge to Additions and should not be deducted. As a matter of information, the Taylor & Taylor Report on Appraisal of Water Facilities at Las Vegas in 1947 states, as follows: "Arbitrarily we use 10 par cent of new cost as overhead to cover engineering and administrative expense in the construction of such works* This is about the lowest rate applicable and we are inclined to believe a rate-making body or court conducting a condemnation suit would accept showing a figure near 15 per cent.” Deduction claimed by the District for Overhead, including freight, is $222,357* tlon Total 130.692 $219,606 r\
