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h $4 PbRNI^NHSH ?-< ?• •*$$#« J o U B i sh§ ia 3i i l l f © o i l VOL. XLIII, NO. 294 LAS VEGAS, NEVADA, TUESDAY, DECEMBER 4, 1951 10c PER COPY SIXTEEN PAGES Federal Restrictions Mayj Upset Water System Deal Federal regulations pose a primary hurdle, for the moment, for the Las Vegas water district in its pro­gram for the purchase of the Las Vegas Land and Water company’s distribu­tion system in the city, it was reported by Thomas A. Campbell, chairman of the Las Vegas valley water district. The entire negotiation will be stymied by -the federal restric­tions, Campbell said, unless the water company will agree at the outset to accept bonds, Which might be issued, inpaym ent for the distribution system. This new impediment was re­vealed when it was recalled that the voluntary credit restraint committee has refused to ap^ prove bond issues where the money would be used to replace equity capital in any community. In this instance the bonds would replace the equity capital the Water company has invested in the system. Campbell pointed out, how­ever, that there was some hope that the credit restraint commit­tee would agree to waive the reg­ulations if the purchase of the Las Vegas Land and Water com­pany system was only a part of the entire program and the mu-nicipal investment only a small portion of the equity capital in­volved. ; . He said that the water district had been working along those lines in negotiation for the local system , independent of plans for acquiring the Laker Mead water supply, which would_.be the most costly of the two operations. tional ray of hope, despite the applications of the new regula­tions. In previous- conferences, Union Pacific officials have in­dicated they might accept the bonds as at least partial Pay­ment for the system, and i f a deal can be worked out whereby such a move will be taken, then, the bond issue can go forward, Campbell said. E. E. Beiyiett and William Rheinhardt, officials of the Un­ion Pacific, were scheduled to -.come to Las Vegas ^Friday for a preliminary session looking forward to negotiations for the purchase of the system. How­ever, Campbell said that, unless the railroad company would agree to accept the bonds in pay­ment, there would be no need for such a meeting. Campbell was to contact the railroad officials today to deter- 1 mine their views o f the latest developments. When this is made clear, then a decision on the Fri­day meeting will be made. At a meeting last night be­tween the water district and the city officials, it was agreed that the water district should be the agency to negotiate for the pur­chase of the water distribution system ,' and the city gave^ the j green light for such negotiations. It was stated at the., meeting last night that, at top speed, it would be five months before pur­chase of the system could be-s come an established fact. It was [I estimated, however, that be­tween nine and 12 months would be a better forecast, because of the legal technicalities involved. Meantime,, the Colorado river commission is going forward on an investigation of the so-called O’Neil plan for bringing water (Continued on Page Two) l o o shdani |gpjjgi .neHswgilgB (Continued from Page One) into the city of Las Vegas, and it was estimated that some definite answer would be forthcoming in the next few weeks. The lessees at the plant al­ready have agreed to make available to the city 20 million gallons per day for the first 10 years and 10‘V iillion thereafter, providing the O’Neil plan is de­termined feasible. With negotiations for sale of the plant at Henderson to the lessees by the first of the year, it is entirely possible that the foundation for the water supply can be completely laid by Jan­uary n The program as regards the distribution system in Las Ve­gas, however, remains rather clouded.