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are on a prorated-basis, while others, such as water conservation ad­vertising, are directly charged to water utility operation. Historically, no charge has been made the Water Utility for rent of its main office at 401 South Second Street in Las Vegas. No land or office building is included in the fixed capital of the Water Utility. The adjusted 1949 and 1950 estimates provide for a charge of $1,800 per year, which is believed reasonable. 782. - Retirement Expense Retirement expense is the computed annual depreciation ex­pense. It is calculated on a straight-line basis against the invest­ment cost of depreciable property used in providing water service, excluding any amortized facilities. 785.2 - Pensions These are the direct payments to retired employees coming under pension benefits. These charges are prorated to the water operation on the general expense basis, i. e. 88$ in 1949 and 76$ in prior years. The charge to this account for 1949 was in the amount of $999.61. Joint Facility Rents This item represents a proportionate cost of the operation of the Railroad’s water production and transmission facilities used in furnishing water to the Water Utility’s distribution system. The method of calculating monthly bills for joint facility rents is set forth in the agreement between Los Angeles & Salt Lake Railroad Company and Las Vegas Land and Water Company, entered into March 30, 1929, prior to the leasing of properties of Los Angeles & Salt Lake Railroad Company by the Union Pacific Railroad Company on January 1, 1936. This agreement states that "the cost is made up by adding _____________________________________________________________________ 25