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Valuation of water system* 2-a® Nevada, May 10, 1938* Mr* I* H# KniolcerboUker, General Header, loe ^ag*elee,;' California* £ear Sirs Pursuant to the setting with Mr* Hough and'yourself, held la my office last n!3ht, ?.:r* Connolly and syself reviewed our record® this morning aid. submit the following$ ' <?u©t what basis the Auditor'® office used la arrive at the amount of 3104*77- depreciation for Jiarah 19?8, we ere unable to ©ay* However, it oppeara that they are using a; basis ? Of approximately 8 per cent on valuation established by the pb- llo utilities Com.eeion at the recent hearing In las vega®, which would mean retirement in a period of 50 yeara* »© know' that redwood pipe will not last that.long, and while we have a ? guarantee of - BO year© on thie pipe and anticipate satief©story service from It for a period of 80 to 86 year®, 1 believe depre­ciation should || accrued on-' our -wood §>S§i' at the rate of | per sent per annuo, which will amply • -roteot oa? investment by re­tirement in 17 year©* Cast Iron ripe, carioeering depart-neate-eud other© have assured ue, we could depend on for 00 year© of life, How­ever, as suggested by Hr• Baugh* we believe retirement should be completed in ©bout Si year® and the- -rate of 4 per cent per annum should be used* %e question of a proper representative figure for our investments wee alsoStalked over, ...and while no definite coaolu-' sion wee reached, X sm of the opinion that where the large ea$e?i* di fares of 1984 and 1986 were charged to "v * an adjustment in our Investment account©-should be made to'Show these amounts in Capitol ?Account, os thie is the beeie for oar earnings* - 1 - Gy W 23-1-7 Gy f 23-6 ^