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REPORT ON WATER MAIN EXTENSION POLICY FOR THE LAS VEGAS VALLEY WATER DISTRICT 1. Scope of report. The methods by which water main extensions are financed require (l) the establishment of basic principles upon which policy may be based and (2) a complete analysis of the financial require­ments of the utility. Whether the utility is publicly or privately owned, extension policies should be based upon sound business principles which assure extensions that will be self-supporting. Fixed charges, operating costs, depreciation and debt service requirements determine the financial position of the utility and its ability to make extensions at the least possible cost without placing an undue burden on existing customers. The financial requirements of publicly-owned utilities differ from those of privately owned utilities. In the case of the publicly-owned utility, the concept of furnishing water to consumers at the least cost is fundamental; while in the case of the privately-owned utility, a profit or return on the utility's investment is necessary and, therefore, least cost to the consumer is of secondary importance. The purpose of this report is to propose a water main extension financing policy for the las Vegas Valley Water District. To accomplish this purpose, broad principles established by the American Water Works Association Committee on Water Main Extension Policy have been referred to, and an analysis has been made of the financing policy practiced by publicly and privately-owned utilities in California cities. The present financing policy adopted by the Las Vegas Valley Water District has been -1-