Letter from A. M. Folger (Las Vegas) to Frank Strong, May 7, 1947

Las Vegas - May 7, 1947 (Personal) Mr. Frank Strong: (2) ( co - Mr. Wm. Reinhardt Mr. E. E. Bennett) From time to time, the question of municipal owner-ship of public utilities is revived in Las Vegas, usually just before election and usually on behalf of some candidate who can think of nothing else to offer. That is true of todays municipal election of a mayor and two city commissioners. How-ever, very little interest was taken in the Municipal ownership question. One of the candidates for mayor, Walter Bates, half-heartedly advocated the creation of a "municipal authority" under which utilities might be acquired. He ran third in the three-candidate race, Only one of the 20 candidates for commissioner mentioned the subject, (George Knipp, a local tire dealer, and he was lost in the shuffle. However, I was advised in confidence today that the County was also interested, and at a committee meeting of the Chamber of Commerce last night, motion was passed authorising the committee to contact Mr. Ashby with regard to acquisition of the Las Vegas Land and Water Co's water distribution facilities in the city. The idea is to finance this by issuing "revenue bonds". Which, they say, will cost the taxpayers nothing and will redeem themselves from revenues. They have employed two engineers to estimate the cost and practicability of extending the present pipe line from Lake Mead, which now ends at the Basic Magnesium Project, on to Las Vegas. As you will recall, the Goverment made a re-connaissance of a similar proposal five or six years ago, the plan then being to bring the water in from Lake Mead for irri-gation of the Las Vegas Valley, but when It was found that this water would cost $30.00 per acre, the idea was abandoned. In the Chamber of Commerce committee meeting last night, the engineers were none too happy about success of the present plan, and in fact flatly stated it would not be practical from a financial standpoint unless the Las Vegas Land and Water Co's system would be taken into the plan. Even so, the cost of the Lake water delivered at Las Vegas would be ll% per 1,000 gallons or more than three times our cost. Consequently, the domestic rate for water to the consumer here would have to be increased, presenting an objectionable problem, to say nothing of the quality of the water. It was also stated in this private meeting of the committee last night that two years ago in a meeting held at the El Rancho between the Chamber of Commerce members and repre-sentatives of the Railroad Company, that the Railroad Company stated it would sell the water system to the City. You and I were both present at that meeting, and as I recall it your re-sponse was that you had no authority to answer that question as it would have to be passed upon by our executives in Omaha. In 1944, I secured some figures on the cost of the Basic Magnesium Plant pipe line and pumping system, which in-volved some 15 miles of 40-inch welded steel pipe, pumping plant, booster pumps, reservoirs, water treatment plant, etc.. In-stalled at a cost in excess of $5,000,000.00. At the meeting last night, the engineers advised the committee that the Basic water system had been subjected to considerable wear and tear, besides being Installed in a hurry as a war emergency measure, and that they (the committee) Should therefore expect to bo saddled with the entire cost of a line from the Lake. This statement was made in response to a rumor that the National Government might be persuaded to give the system to Clark County without cost. The Basic Magnesium water line operating costs, in-cluding Cost of Water Purchased (at Lake), Supply and Transmission, storage and Treatment, was $32.50 per million gallons. Based on a maximum demand of 14,000,000 gallons per day (which we ap-proached last summer) the cost would be $22,950.00 per month. Our sales now run $13,000.00 per month. The BMI operating cost above quoted does not include depreciation, reserve for replace-ment, taxes nor interest on investment, and contemplates delivery only half-way to Las Vegas. Tha capacity of their water treatment plant is 20 million gallons per day, and 6 million gallons per day of this amount must be delivered to the present Basic Magnesium Project and the town of Henderson adjoining. Frankly, I do not see what could be accomplished by the proposed plan, except that it might make a supply of water available for irrigation in the Las Vegas Valley (at the expense of domestic consumers in the city). However, you may wish to transmit this information to Mr. Ashby so he will be advised in the premises if and whan he ia contacted by Mr. Archie Grant, who is the chairman of the Chamber committee. I attach newspaper clipping on the subject from tonights Review-Journal. A. M. Folger