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JAMES M. MONTGOMERY Consulting Engineer 15 North Oakland Avenue Pasadena 1, California December 15, 195^- Board of Directors Las Vegas Valley Water District P.0. Box 1109 Las Vegas, Nevada Gentlemen: In accordance with your request, the accompanying report on Water Main Extension Policy for the Las Vegas Valley Water District is submitted for your consideration. Basic principles upon which policy may be based have been reviewed and are out­lined in the report, together with an analysis of the financial requirements of the District pertaining to water main extensions. An analysis also has been made of extension practice in California cities and is presented in Table I. . After studying the data collected, it appears reasonable and equitable that the District and the consumer share in the cost of faking an extension. This conforms to the practice by California publicly-owned utilities. It is believed also equitable for the extension applicant to advance the total cost of the extension. It has been determined that the District can afford to invest $2.20 per dollar of anticipated revenue received from the extension. When this is applied to the estimated annual revenue from an average consumer and refunded over a 10-year period, the refund is 22$ of the annual revenue. It is believed, however, that the refund should approximate the amount of money refunded in the past by the Las Vegas land and Water Company to provide an equitable refund for both past and future extension applicants. It is, therefore, recommended that a refund of 15$ of the gross annual revenue be made for a period of 10 years. I hope that the information presented in this report is adequate to meet your needs in formulating a water main extension policy for the District. I will be happy to meet with you to discuss the report and answer any questions which you may have. JMM;rw Enclosure