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V In summary form the results for the forecasted year 1950 are: #2 - Mr, Wm. Reinhardt June 15, 1950 Present Rates Revenues Expenses Net Revenue Rate Base Rate of return ( ) Red figure. Investment Cost |214,GOO 222,231 ( a , 231) 550,000 (1*50*) Original Cost |214,000 231,813 (1 7 ,8 1 3 ) 639,000 ( 2. 78$) Present-Day Cost $214,000 270,023 (56,023) 862,600 (6 . 5056) It is thus seen that not only will the Water Depart­ment of the Las Vegas Land and Water Company fail to earn a fair return on the capital employed in rendering the water service, but it will fail to earn its costs of operation be­fore any return. In other words, its operations are estimated to be in the ”redM for 1950 and future years, irrespective of the capital base used. A 6£$ return has been used as reasonable in determin­ing the deficiency in earnings. Such deficiencies as devel­oped are as follows: Deficiency in Gross Revenue to yield 6£$ Investment Cost Original Cost Present-Day Cost Est’d. Gross Revenue needed $277,675 $296,227 $356,980 h h h Present Rates Deficiency in Gross Revenue 214.000 $63,675 214.000 214.000 $82,227 $142,980 Per cent increase needed 29.75$ 38.42$ 66.81$ The proposed water rates developed will yield an in­crease of approximately $8 0,000 of gross revenue for the year or an over-all increase of 37.3$. Such increase is viewed as not unreasonable, as the average billing for water service in Las Vegas will still remain low as compared to most other cities and exceedingly low when the high per