Letter from Thomas A. Campbell (Las Vegas) to members of underwriting group for bonds, including supporting documents, 1957

LAS VEGAS VALLEY WATER DISTRICT 919 WEST BONANZA ROAD P. O. BOX 1109 LAS VEGAS, NEVADA TELEPHONE DU 2-6300 OFFICERS AND DIRECTORS WILLIAM C. RENSHAW THOMAS A. CAMPBELL PRESIDENT G. WILLIAM COULTHARD VICE PRESIDENT HARRY E.MILLER SECY. - TREAS. C. NORMAN CORNWALL ASST. SECY.. TREAS. CHIEF ENGINEER AND GENERAL MANAGER April 1, 1957 R.E. THORN WILLIAM L. ROSEVEAR GEORGE L. ULLOM $8,700,000 Waterworks Bonds, 1954 of the LAS VEGAS VALLEY WATER DISTRICT To ? MEMBERS OF THE UNDERWRITING GROUP: Some weeks ago we communicated with you relative to certain legislative measures then pending in the 48th Session of the Nevada State Legislature which seriously affected the holders of the above bonds. Now we take pleasure in informing you that, due in targe measure to the vigorous opposition offered by investment banking houses throughout the country, the adverse legislation was de- feated in the closing days of the legislative session, which finality adjourned on March 27, [957. For such assistance as you may have rendered in connection with this important matter, please accept the sincere expressions of appreciation from the District - along with the thanks of at! other public agencies in Nevada whose credit rating was likewise threatened. in view of the decisive manner in which the upper chamber of the Legislature rejected the Hi- advised legislation which originated in the tower branch, we believe you will share our opinion that confidence in existing and future Nevada municipal obligations has been fully restored. Very truly yours LAS VEGAS VALLEY WATER DISTRICT TAC:mjb OFFICERS AMD DIRECTORS THOMAS A. CAMPBELL PRESIDENT G. WILLIAM COULTHARD VICE PRESIDENT HARRY E. MILLER SECY. - TREAS. C. NORMAN CORNWALL ASST. SECY.. TREAS. R.E. THORN WILLIAM L. ROSEVEAR GEORGE L. ULLOM LAS VEGAS VALLEY WATER D!STR!CT 9)9 WEST BONANZA ROAD P.O. BOX 1)09 LAS VEGAS, NEVADA TELEPHONE DU 2-6300 March 30, 1957 WILLIAM C. RENSHAW CHIEF ENGINEER AND GENERAL MANAGER REPORT ON LEG!SLAT!QN AFFECTING DISTRICT Summary of Various Measures and Final Disposition A total of six (6) different pieces of legislation directly affecting the District were actuary introduced in the tower house during the 48th session of the Nevada Legislature which adjourned on Wednesday, March 27, 1957. However, only two of the six measures were finally passed by both houses, and both of these were entirety acceptable to the District. The other four proposed amendments to the District Enabling Act, which were vigorously opposed by the District and the underwriters of its $8,700,000 outstanding bond issue, were defeated. The following summary explains the six separate measures which were involved, and gives the final results: ASSEMBLY BILL #302: As originally introduced, this consisted of three (3) major amendments to the District Enabling Act, as follows: SIMPLIFIED DISTRICT ELECTION PROCEDURE AB #302 (a): Simplification of the cumbersome special registration and election procedure prescribed in the act, so as to make it conform to and synchronize with the regular State and County genera) elections. District Position: Full approval, compete endorsement and unqualified support. Disposition: Passed by both legislative branches without opposition. PUBLIC SERVICE COMMISSION JURISDICTION AB #302 (b) : Placed the District under jurisdiction of the Nevada Public Service Commission, introduction of this measure in the Assembly brought strong protests from many sources against transferring final control of the District's rate fixing powers and genera) operations to another agency, on the ground that such legislation would be an unconstitutional) impairment of the bond- holder's contract. The sponsors yielded to the widespread opposition against Public Service Com- mission jurisdiction, but they immediately substituted an even more objectionable amendment, which is described under AB #302 (c) just below. CLARK COUNTY "BOARD OF REViEW" AB #302 (c): Assembly member proponents of AB #302 (b), described just above, sought to over- come the specific objections to Public Service Commission control by setting up the Board of Report On Legislation Affecting District March 1957 - Page two- Commissioners (governing body) of Clark County as a so-styled "Board of Review" over District affairs. However, the provisions of this substitute measure actually conferred upon the Clark County governing body even greater power and control over the District than if it had been subjected to Public Service Commission jurisdiction. Consequently, this substitute measure also met with strenuous opposition from water district officials, the bond underwriting group and investment bankers genera!ty. Disposition: Despite concerted opposition from all sides, the measure identified above as AB #302(c) was passed by the tower house of the Legislature, but upon reaching the Senate it was summarily re- jected and defeated. outlawing METERS AB #302 (d): This amendment sought to prohibit the District from instating, operating or otherwise using for any purpose whatsoever any mechanical water meter or other mechanical device to measure the quantity of water delivered to water users. Disposition: The assembly committee to which this bill was referred following initial introduction yielded to District and other widespread opposition from water consumers and deleted this amendment before the main bill was sent to the floor for action. MUNICIPALITIES COULD DIRECT OPERATIONS ASSEMBLY BILL #402: This bill was sponsored by municipal authorities who stated that its sole purpose was to more clearly define the extent of existing statutory regulations pertaining to the use, opening and restoration of streets and alleys. However, as originally introduced in the Assembly, this bill re- quired the District to comply with any and all taws and ordinances of any incorporated city or town within the boundaries of the District. District officials, acting under the advice of counsel, immediately protested this measure on the ground that it would empower present and future municipalities to direct District operations in a manner that would prevent compliance with the bond covenants, and raise constitutional problems. In its original form, this bill was seen as the most dangerous and potentially damaging to the District and its bond- holders of all the legislative measure actually introduced or threatened. Disposition: As a result of the strenuous opposition which developed when the far reaching implications and potentially detrimental effects of such an amendment were fully realized, the sponsoring municipal officials agreed to a complete revision. After all of the objectionable features had been eliniated a bill entirety acceptable to the District and its general and bond counsel, was finally passed by both branches of the Legislature. CHANGING DISTRICT'S RATE FIXING POWERS ASSEMBLY BILL #477: introduced as an emergency measure during the closing days of the session, the purpose of this amendment was to compel the District to deliver water to public agencies at reduced rates, in direct violation of Covenant 6 of the District's Resolution of issuance covering the outstanding $8,700,000 Waterworks Bonds. Disposition: The Assembly passed this bill, but due to the strong protests which were immediately registered by the District and the bond underwriters, the Senate declined to consider this last minute piece of legislation and refused to take action on it. Las Vegas Valley Water District 919 West Bonanza Road Las Vegas, Nevada Telephone DUdtey 2-6300 LAS VEGAS VALLEY WATER DlSTRlCT Results of Legislative Measures Affecting District and its Bondholders FOR lMMEDlATE RELEASE !r LAS VEGAS, NEVADA---A serious threat against the credit rating of public agencies in Nevada was averted during the closing days of the 48th session of the State Legislature held in Carson City by Senate rejection of a series of bills passed by the tower house which investment bankers regarded as a breach of "good faith" with the holders of an outstanding $8,700,000 issue of Las Vegas Valley Water District bonds. The defeated measures catted for transferring final control of the water district's operations and general affairs to the Board of County Commissioners of Clark County, where Las Vegas is located, and also for altering the rate fixing powers provided under the district's contract with its bondholders. Sponsors of the adverse legislation originally introduced a bill placing the water district under jurisdiction of the Nevada Public Service Commission. This was discarded when investment houses throughout the country which had participated in the $8.7-mittion issue in 1954 besieged legislators and high state officials with a barrage of protests claiming such legislation would be an unconstitutional impairment of the bondholders' contract. However, this was immediately followed by a substitute amendment setting up the Clark County governing body as a "board of review" over the water district affairs. Opponents insisted that the substitute measure was actually more detrimental to the bondholders than the original Public Service Commission jurisdiction bill, but it was passed by the tower chamber of the Legislature more more more LAS VEGAS VALLEY WATER DISTRICT News Release Page 2 over the strenuous objections of water district officials, the bond underwriters and financial concerns generally. Upon reaching the Senate the measure was kitted in committee without being put to a floor vote. The same treatment was accorded another bill passed by the Assembly which would have com- petted the district to deliver water to municipalities and other public agencies at reduced rates. This was contrary to provisions in the bondholders' contract which specifically require that cities, towns, counties, public corporations and all political subdivisions be charged on the same basis as others receiving simitar services. A fourth bill affecting the district which met vigorous opposition upon initial introduction in the house was subsequently amended and passed by both branches after elimination of the features objected to by its opponents. As originally written, this measure compelled the district to comply with any and all taws and ordinances of cities and towns within its boundaries, and empowered the municipalities to direct district affairs in conflict with the bond covenants. Municipal officials who sponsored the bill stated that its sole purpose was to more clearly define certain existing statutory provisions pertaining to the use and restoration of public streets and alleys, and agreed to revisions acceptable to the district and its bankers. Other legislative measures affecting the Las Vegas Valley Water District involved simplification of cumbersome special registration and election procedure to vote on directors, and an attempt to outlaw meters. The changed method of election, synchronizing district elections with regular state and county general elections, carried full district and bond house endorsement, and was enacted into taw. Vigorous protests from water consumers resulted in dropping the anti-metering bill before it was put to a vote. 4/t/57