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Edward G. Renwiek -3- November 23, 1951 2* Public acceptance of the water oompany and higher rates would be greatly enhanced as its operation would be viewed as more a part of the city. 3» Du© to the issue of bonds and stocks, the Water Company would have definite financial obligations to meet. These could be used effectively as pointing to earnings and return required. At the present time with practically no financial structures, as that is normally looked upon, there is nothing that eah be pointed to in setting up the earning requirements of the ^ater Company. Sven on the open account, no interest is paid. Where the situation exists, in which the funds of the water company beoome intermingled with the parent company. It lays the parent oompany open to criticism. It is only necessary for the "champion" of the public to point to the "inner workings" of the top company and its creature to create in the minds of the public that the water oompany is being bled for the benefit of the big corporation. If the banking Is done locally and all dol­lars are accounted for and reported to the Commission, this situation will in large measure be cleared up, even though the securities are held by the Union Pacific. 4* The Regulatory Commission will look not only with favor on the change, since it places all operations under its control, but likewise it will take credit for bringing the change about. In a state where political influence with the party in control is not to be disregarded, there should be Indirect benefits that would follow any such merger. The net result should be the eventual obtaining of reasonable earnings and with service to the public at minimum costs. 5. Due to Improved and reasonable earnings the com­pany will be in a better position to (a) Finance and raise additional capital through a local public offering. (b) Command a higher price for the properties osi ssX®« (c) Work out a lease agreement with the city and receive a reasonable income from the properties if such should be desired.