Letter from E. E. Bennett (Los Angeles) to Ray Marks (Reno) regarding Nevada Senate Bill 155, March 9, 1949

Los Angeles, March 9, 1949 Mr. Ray Marks, Tax Agent Southern Pacific Company 139 N. Virginia Street Reno, Nevada: (cc - Mr. Reinhardt - LosA. Mr. Calvin M. Cory El Ranch Motel Carson City, Nevada Mr. A. M. Folger, LVL&WCo. Las Vegas, Nevada ) Nevada Senate Bill No. 155 Mr. Cory has called to my attention the above bill which you should do everything possible to defeat. It is detrimental to the interests of the Railroad and the Water Company and certainly is detrimental to the interests of all other property owners in the Las Vegas Utility District. The bill amends the act under which the district was created by increasing the power of the directors of the district in their own discretion to require the levying of taxes to support the district and to issue bonds which become a charge upon all property in the district. There are many arguments which can be made in opposition to this bill, some of which I mention below: 1. The amendments proposed in this bill make a radical change in the method of financing the district which was contemplated at the time the formation of the district was submitted to the vote of the people for approval. The original act under which the district was formed limited the power of the district to levy taxes to those which were required to get the district under way. The act provided that the district could cause taxes to be levied "For the purposes of paying any obligation of the district during its organizational stage?and further to assist in the operational expenses of said district until such taxes are no longer required therefor." 2. The act originally required that the bonds were self liquidating and to be paid only from the revenues of the district. By the proposed bill, the directors are authorized in their discretion to issue bonds in unlimited amounts for which the full faith and credit of the entire district is pledged and which become a charge upon all property in the district. 3. Such bonds can be issued without submitting to the electors and property owners in the district the question of the desirability of issuing the bonds which will become a charge upon their property. The amended bill does not in fact furnish any procedure under which the electors would be given an opportunity to be heard with respect to the question of the desirability of issuances of the bonds. 4. This bill endangers all other County revenues and County functions in Clark County, Nevada. The Board of supervisors is required to levy sufficient taxes to insure the payment of principal and interest obligations on the district bonds and in the event the constitutional tax limit is exceeded, the Board of Supervisors must allocate first to the district from the tax receipts sufficient money to meet the principal and interest obligations under the bonds. Our land and Tax Agent advised me that the proposed budget for Clark County, Nevada this year requires taxes of $5.60 per $100.00 valuation to be collected to meet the proposed budget requirements. Inasmuch as this is 60% in excess of the present constitutional tax limit, it is obvious that the proposed County expenditures must be reduced and that any bill which would give a priority to the district upon the tax money of Clark County would be disastrous to the other County functions. 5. Under the proposed bill the directors of the districts are given the power throughout the entire life of the district to require the levying of taxes not only for the purposes of paying principal and interest obligations on district bends but also to pay maintenance and operation expenses. It is obvious that the directors of the district are thus empowered to saddle upon the property owner and taxpayer a large share of the cost of furnishing water which should be paid for by the consumer in accordance with the amount of water consumed. If taxes should be used for such purposes, the tendency would be to penalize industry and other property owners within the district. Although this is objectionable to the Railroad Company, it is a factor in which other property owners in the district are vitally interested. Mr. Charles Adams, our Land and Tax Agent, advises me that the assessed valuation of the district is estimated at $37,000,000; of the Railroad property therein $2,300,000 and of LVL&WCo. property therein $482,000. Accordingly, the Railroad would bear about 7% and LVL&W Co. 1.3% (so long as it continues to exist) of any taxes levied by the district. E. E. Bennett P.S. As will appear from what is previously stated in this letter, the provisions of the bill which I consider particularly objectionable are the provisions of Section 3. There are other provisions in the bill which I do not favor. I think the provision of Section 2 of the bill which would eliminate the right of a person to be registered to represent a qualified corporation owning property in the district at a district election is objectionable. Also the portion of Section 5 of the bill which would permit the district to take possession of condemned property after judgment while an appeal is pending is objectionable even though the district is required to pay into Court the amount of the judgment. It is easy to imagine the difficulties which would be encountered if the district had taken possession of an operating utility and the judgment of condemnation was thereafter reversed so as to require the retrial of the case. The orderly procedure is for the owner to stay in possession until final judgment. I am not concerned with the provisions of Section 4 of the bill, nor the provisions of Section 5 not heretofore alluded to, nor the provisions of Sections 6, 7 and 8 of the bill. E. E. Bennett