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cc Y Ur. - Mr. A. L. Coey B. H. Prater: Los Angeles, May 17th, 1938. Eg 9436-3-W Contract Audit No. 6177, dated April 18th, 1927, provides for sale of water by Railroad Company to Las Vegas Land and Water Company at Yermo. Since that time the Land and Water company has been delivering water to employes and A) others at Yermo at flat monthly rates of $1.50 to employes ^ ^ ,t> and $2.50 to outsiders, and has been Incurring a deficit in ^ the sale of this water, although the Railroad Company sells ^ it to the Land and Water Company at cost, or 10$ per thousand gallons. It is, of course, desirable to have this water distri­bution system pay its way, which it is not doing at the present time. Iiformal conferences with representatives of the California Railroad Commission indicate that under the California law the LVL&W Company, a foreign corporation, cannot act as a public utility, and that it would be desirable to have the distribu­tion performed by the Railroad Company, under separate con­tract with each user, as was the practice prior to 1937. After considerable discussion and correspondence, it has finally been decided that, 1. Railroad Company will leas© the water lines from the Land and Water Company. 2. Railroad Company to distribute water. 3. Meters to be installed at expense of Railroad Company 4. Monthly rates to be established similar to those in effect at Barstow, which are, From 0 to 600 C. F.l From 600 to 1300 C. F. - From 1300 to 3000 C. F. ~ All over 3000 C. F. 25$ per 100 C.F 30$-* 1 * * 15$ » » ? 12$ ? » " with minimum monthly charges, o 5/8 inch line 3/4 » • 1 H » U » « 2 » « $1.50i__ —- <&# 3.00- — — tS* 3.00 ——. f^go 6.00— . jS'fr'9 . 7.50— o L° 1 It is the opinion of our Law Department that the above arrange­ment can be made without further authority from the State Com­mission.