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#3 - Mr. Thomas A. Campbell - 2-24-53 under its project. At the present time the water facilities of B. M. I. are located in the public domain without ease­ments. The bonds should not be marketed until such legislation is obtained. Also the preparation of a complete and documented engineering report indicating the revenue producing potential of the project is a "must." Bond purchasers will probably place heavy reliance upon the District's proposed revenue structure. Although the bonds are to be general obligation bonds, payable from property taxes, it is hoped and expected that said bonds can be serviced from water revenues. The Nevada constitutional limitation on taxation (in the amount of $5.00 per $100.00 of assessed value) tends to weaken the attraction of the bonds as general obligations of the District. As a result it is highly important that prospective bond pur­chasers be given full facts concerning anticipated revenues. Adequate time must be given the District's Engineer to prepare such a report. In view of the above, we would recommend that the District seek to obtain from Union Pacific somewhat more flexible provisions covering the sale of the District bonds. The District, like Union Pacific, is anxious to consummate the transaction, but the District should be permitted to market its bonds in an orderly manner and given reasonable latitude to obtain the most favorable interest rate. Yours very truly, 0 ' MELVENY & MYERS By Franklin T. Hamilton FTH:fm