Newspaper clipping, Nevada lawmakers study bills to curb operations of agency, Wall Street Journal, March 8, 1957

Reproduced from: THE WALL STREET JOURNAL THE WALL STREET JOURNAL, Friday, March 8, 1957 Nevada Lawmakers Study Bills to Curb Operations of Agency Las Vegas Valley District Has $8,700,000 Issue Outstanding; Opponents See Breach of Faith CARSON CITY, Nev.- Legislative hearings are under way here on a series of bills which may affect the credit rating of public agencies in Nevada. The measures would place restrictions on the Las Vegas Valley Water District, which has an $8,700,000 bond issue outstanding. In- troduced last week, they ar& now before a committee of assembly representatives from Clark County, where Las Vegas is located. Officials of the water district are in sharp op- position to two of the four proposed measures. Spokesmen for two investment concerns which managed the underwriting group for the $8.7 million issue in 1954 also have Indicated re- sistance to the legislation. , Opponents of the bills argue that changing regulations over the district, while bonds are still outstanding, would be a breach of "good faith." Citing an opinion by bond attorneys for the district, they contend the enabling act which set up the body was, in effect, a con- tract with investors and it would be illegal to change, it now. Representatives of Ira Haupt A Co. and Cruttenden, Podesta .& Co., the underwriters, warn that passage of the legislation would weaken security of the outstanding issue. They claim the precedent would hamper future at- tempts to raise capital, not only by the district but also by other state agencies. The bill is backed by seven of the nine as- sembly representatives from Clark County. "I think curbs are in order for the water district. It has been too arbitrary in the way it conducts business," said James Ryan, Las Vegas as- semblyman. He added he considers the legis- lation's chances "good." If passed, the bills would am^nd the district enabling act to place the rate setting power of the district tinder the state Public Service Com- mission, to outlaw water meters and to change the method of electing directors of the district. A fourth bill would require the district to com- ply with laws of municipalities in which it op- erates.