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It is felt that the overhead item could veil he eliminated from the valuation of the property. It Is true that engineering expense was required for a part of the system hut other parts " Juat grew*. It la felt that the unrefunded portions of the advances in aid of construction would offset the engineering costs. The charge for general expenses, according to Mr. Wehe, has not been made prior to 1951 and, while the point might he argued, it seems to he a poor time to "find" this amount when selling the property. Interest during construction at 9^ should not b® allowed for several reasons s 1 - If allowed, the rate Is too high. 2 - For years the la® Vegas land and Water Co. has borrowed from the Union Pacific through an open account at no interest. 3 - Much of the system was built with funds advanced in aid of construction by subdividers. k - I f interest during construction were allowed then the Water Company should pay interest on advances for construction. For the above reasons the entire overhead it®® has been eliminated. Conclusion In asking this appraisal It has been our intention to arrive at a fair value of the property by using th© reproduction cost method of evaluating the system. The deductions which have been mad© from the overall value of the system have been explained la considerable detail and have been itemised so that the Board can Judge as to their fairness. It ie our opinion that the fo llo w in g ad d itio n al considerations might w e ll be weighed in n egotiatin g w ith the Union P a c ific o ffic ia ls t -12-