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Omaha August 11, 1950 E. Bennett H - Loa Angeles: 0^1^3703.1 "O / id?' ; 00 - Mr. A. E. Stoddard, Mr. Wm. Reinhardt - Los Angeles Mr. T. |L: Boches Referring to your letter of June 26, 1950, file 80-5, enclosing rough, draft of report prepared "by Mr. Wehe on results of operation of the water system at Las Vegas, and draft of nro— posed new agreement between the Railroad Comoany and the Water Company: With respect to Mr. Welle*s report, I am attaching a memorandum listing my views and suggestions. While your attention is called to several apparent errors as noted, we have not made a mechanical ehech of all the computations. The main points at issue as I see it are (1) - the question of reduoing rental base by the estimated deereclation accrued thereon in computing Interest charged the Water Company for use of Railroad Company*s facilities as outlined in my comments on attached memo regarding page 27 of the report, item 6(c), and (2) - reduction in rate base by the estimated unrefun&able portion of construction advances subject to complete ;a partial refund, as referred to on the attached memo in my comments regarding page 36 of the report. While I believe that, for our information, we should have the results of operations as set out in Mr. Wehe*s report, including the adjustments noted in (1) and (2) above, the report, in my opinion, should not be presented to the Utilities Commission on that basis. With respect to the proposed new agreement between Railroad and Water Company: Section ^ (c). An item of ’’vacation allowance" should be added.