Memo from William Reinhardt about obtaining water from Lake Mead, September 8, 1935

Los Angeles - September 8, 1953 MEMORANDUM: The problem of obtaining an adequate water supply for the Las Vegas area insofar as the source of the water is concerned is a simple one. The present underground source has been developed to the point where not only have the maximum rates of production been reached, but because of the constantly declining water levels in the wells it is very probable that the rates of production will now begin to decline. The only other source where an adequate supply can be obtained is Lake Mead. For a privately owned utility to go to Lake Mead for additional water involves many complications. In the first place, there is the question of whether a privately owned utility would have the right to take water from Lake Mead. This possibly could be worked out but certainly not as simply as has been done in the case of the proposed Water District. In the second place, the private utility in order to finance the project would have to show earnings in order to service the bonds which would have to be sold for that purpose. The earnings history of LVL&WCo. have certainly not been such as to make the purchase of bonds attractive to investors. Added to this is, of course, the extravagant use and wastage of water in the area which can not be prevented due to the State Law prohibiting the installation of water meters. In order for a private utility to obtain the funds necessary for the development of a Lake Mead source it would first be neeessary to in effect guarantee earnings which would be adequate to meet operating expenses and to amortize the investment. This could only be done by some sort of finding by the State Utility Commission setting a schedule of rates which would become effective when Lake Mead water was made available and which would supply ths necessary income. It is doubtful whether the Utility Commission would or could follow this procedure. The past history of LVL&WCo.'s efforts to obtain adjustments in rates is the best indication of this. In the second place, it would be necessary to either get the State Law prohibiting the installation of water meters changed or Modified In order that present wastage could be avoided. It would seem obvious from the above that the development of an adequate water supply for Las Vegas by a private utility would be very difficult, if not Impossible, and it seems Just as obvious that under these conditions the development by a public utility is the answer. (Signed) WM. REINHARDT Wm. Reinhardt