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Sr. Peart - Pag# #3 In conversation with your of floe, the- question was raised as to what proportion of labor cost including Supervision, office employees and other indirect labor charges would he assigned to the production facilities and to th® distribution facilities. I plan on making a monthly distribution of all labor charges including Supervision, etc., incurred by th© Water Company for both distribution and transmission facilities as outlined above. With respect to the determination of amounts for that portion of the bill against the Railroad Company called for under Section 3, paragraphs 1 through f o f Agreement 8 Q3Q0 , 1 believe this is an account­ing matter and should b# determined by your department from records in your office. However, if I can be of any assistance, pleas# Call on me. With regard to the preparation of bVhSsif Oo., monthly bill against the Railroad Company f o r water furnished in each proceeding month, it will be noted that Agreement Audit Mo. 80300 Section 2, Page 7, provides that the monthly bill will be baaed on 8the best Information then available && to the cost of producing, transporting and delivering water, etc.**, in the proceeding month. As a means of simplifying preparation of monthly M i l , which would be uniform for the balance of 1953, would suggest that you prepare this bill on the basis of /< jf^fo the record cost to Railroad Company of operating and maintain­ing the Production Facilities during th# period January to July 31* 1953* which will of course, include all of the overhead and indirect costs charged th# Water Company for that period, fhe accumulation of monthly charges could then be adjusted at end of year as provided for in Audit 80300.