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N E L S O N C O N W A Y , C . P . A . K - E R M I T M O E , C . P . A . C L A R E N C E T . H I B B S , C . P . A . R . Y O R K F U N S T O N , C . P . A . C E R T IF IE D P U B L IC A C C O U N T A N T S 4 4 0 H O O V E R S T R E E T L A S V E G A S , N E V A D A C o n w a y , M o e , H i b b s & F u n s t o n M E M B E R S A M E R IC A N I N S T I T U T E O F A C C O U N T A N T S T E L E P H O N E 7 0 2 0 June 3, §pj|§ Mr. Harry E. Miller Secretary and Treasurer of the Las Vegas Valley Water District 900 South Fifth Street Las Vegas, Nevada Dear Sirs We have reviewed pertinent provisions of your notice of election to issue bonds and the "Official statement respecting $8,700,000. Waterworks Bonds, 19$h of the Las Vegas Valley Water District", dated April 28, 19!?lf, together with the Appendix thereto which contains the Resolution of Issuance, dated January 8, 19%h, for the purpose of submitting our recommendations relative to the finding of the cash pro­ceeds of your recent bond issue. Section 13 of your Resolution of Issuance provides for the following cash funds (all to be identified with the prefix "Waterworks Bonds, 195>U” )s The revenue fund (item 2 above) is to be established as the depository for all moneys received by the District from the sale or distribution of water; and the var­ious sinking funds and the maintenance and operation fund are to be established by transfers from the revenue fund. Therefore, none of the foregoing, except the acqui­sition and construction fund, need be established until the purchase of the water system has been consummated. Section lif of your Resolution of Issuance states in part that the Treasurer will immediately place the proceeds from the sale of bonds in the Acquisition and Construc­tion fund. Said funds are to remain in the construction fund until expended for the purposes stated in your notice of election^ provided however, that money may be paid or transferred from the construction fund in furtherance of the purpose of its es­tablishment, to any others such separate fund established for a like purpose, and any proceeds so transferred shall be applied exclusively to said purpose. The proposed allocation of the proceeds from the bond sale is set forth in your bond proposal statement, based on estimates prepared by James M. Montgomery, consult­ing engineer. An analysis of this estimate, supplemented by your contract commit­ments and Resolution of Issuance, we suggest that the following accounts be established by transfers from the acquisition and construction funds 1. Acquisition and Construction Fund 2. Revenue Fund 3. (a) Sinking Fund— Bond Service 3- (b) Sinking Fund— Bond Redemption 3. (c) Sinking Fund— Reserve For Contingencies if. Waterworks Maintenance and Operation Fund