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Los Angeles, October 3» 1950 80-5 Mr. Clarence M. Batesv and Mr. R. L. Adamson: (cc - Mr. Wm. Reinhardt Mr. Roy Wehe Mr. R. L. Bertolacci) It has come to my attention that LVL&WCo. owns pipe lines at Las Vegas which occupy property of the Railroad which there is no agreement between those parties anCdo mpfoarn yw fhoirc h LVL&WCo. pays no rental to the Railroad Company. In connection with our impending rate increase case involving the water facilities at Las Vegas, it is essential that the Water Department pay the Railroad fair compensation for all services and facilities furnished by the Railroad Company to the Water Company. I suggest that you jointly work up the data required for the preparation of a license agreement running from the Railroad to the LVL&WCo. under which the LVL&WCo. will pay the Railroad annually a fair rental for the use of all Railroad property or rights of way occupied by LVL&WCo. facilities. We should have this information as soon as possible so that Mr. Bertolacci can include the rental in the estimate of LVL&WCo. operating expenses in the study whieh he is now completing. It has also come to my attention that there is no land in the rate base of the LVL&WCo. nor any value included therein representing the portion of the rooming house at Las Vegas occupied by the office of the LVL&WCo. It seems to me that it would be proper in the operating expense estimates which are being made by Mr. Bertolacci to include the fair rental value of the land occupied by a tool building of LVL&WCo. and the fair rental value of the office space occupied rby the Water Department in the LVL&WCo. rooming house. I would appreciate it if Mr. Bates would furnish to me and Mr. Bertolacci an estimate of the rental value of the facilities mentioned. 'jjJlilp — 1. Bennett