Who Should Own the Water Company? Municipal Ownership

Overview

Including correspondence, reports, legislation, and data tables, this kit follows the progression of movement from the San Pedro, Los Angeles, and Salt Lake Railroad's privately owned Las Vegas Land & Water Company to the publicly-owned Las Vegas Valley Water District. Amidst a need to meet growing residential demands coupled with a decrease in profitability, the railroad sought to relinquish its ownership of the utility and its infrastructure while the citizenry petitioned for public ownership.

Educator Resources

Activity Suggestions

Class Discussion Questions

  • Should public or private entities own and manage utilities?
  • What methods should the public use to finance major expenditures?
  • After reviewing the 1947 artifacts as a class, deliver a short lecture describing and differentiating between law-making processes of state and national Senates. Then, identify a contemporary controversial topic (e.g., class size, national deficit, war policies). Have students research both sides of the issue and plan arguments for a debate. On the day of the debate, have students randomly choose whether they will argue for or against the topic. After the debate, discuss the complexity of political decision-making and the roles of factional advocates.
  • Review the 1948 artifacts as a class. Then, have students propose a change they would like to see in the school or community and go through the democratic process of committee meetings, petitions (outside the classroom, if possible), and writing a letter asking for action from the principal or public official. Have students send the letter.

Research Topics

Political Science/Business

Vocabulary

public vs. private ownership, condemnation, operations, bond issue, pumping stations, deed, county commission, petition, divesting

  • Trace the process of moving Southern Nevada's water from private to public ownership. Then, identify two recent occurrences of an exchange of ownership. In one, it should move from public to private. In the other, it should move from private to public. Finally, create flow charts showing the processes of each contemporary change and a Venn diagram comparing the historical and modern moves from private to public ownership.
Mathematics
  • Review the financial documents relating to the proposed bond issue and consider planned expenditures in contemporary dollar amounts (after inflation). Next, choose any current bond issue and compare relative costs. Identify similarities and differences between philosophies of expenditures.

Introduction to Topic

As long as there was enough water for Las Vegas and the service of providing it was relatively inexpensive and efficient, the question of who owned the water company seemed inconsequential. But when water shortages invariably occurred as the city grew and the Water Company reacted with calls for restrictions on water use or the installation of water meters, citizens began to propose public ownership of the water company through the process of “condemnation” of private property for public use. Some people felt the railroad was too conservative in expanding its water production, too concerned with profit, and less interested in investing in new water sources. These discussions often occurred during city and county elections when feelings against the railroad, fueled by “reform” candidates, ran high. The railroad watched local politics closely and its local officials spoke out against municipal ownership. After World War II, however, the attitude of the railroad’s top executives shifted. The continued and increasing expense of maintaining and expanding a city water system and the frustration of forcing any conservation measures on an unwilling populace made the Las Vegas Land & Water Company a much less profitable operation.

At the urging of southern Nevada legislators in 1947, the state legislature passed a bill allowing for the establishment of the Las Vegas Valley Water District. How such a District would operate and how it would be funded were still open questions. In a series of public meetings attended by railroad and water company officials, both railroad and District officials voiced their opinions. The biggest issues to resolve were funding (taxes), methods for acquiring the current water system, and necessary new infrastructures such as a pipeline to Lake Mead and new pumping stations. The railroad agreed to sell its facilities and land to the Water District if the Water District could raise the necessary money by passing a bond issue. There were other issues, such as whether the city’s water supply, formerly provided by the Las Vegas Land & Water Company, should be used to supply water to Strip resorts lying outside city limits. Also, they questioned whether and how to tap the water of Lake Mead.

The bond issue passed in a special county election in 1953 and the new District proceeded to negotiate with the railroad for its water. It eventually acquired the water rights. The Las Vegas Valley Water District had a number of other problems and issues to overcome, but the era of private ownership of the valley’s water and water system was at an end.

1934 Correspondence between railroad official E.E. Bennett and Leo McNamee, assistant attorney to the general attorney for the San Pedro, Los Angeles, and Salt Lake Railroad. In the communications, Bennett seeks to determine the status of public interest in acquiring a public water company (as opposed to continuing to allow the railroad to own and operate the utility) and the legal opinion on condemnation.
1935 Letter from Bracken to UP President Jeffers with overview of water situation, possibility of municipal ownership
1057-8 Bennett , McNamee, Knickerbocker correspondence re. Water rights independent of deed, recommends attending city and county commission meetings in case water is discussed
  These documents include correspondence between Bennett, McNamee, and Knickerbocker as they question whether water rights are independent of deed. Ultimately, they recommend attending city and county commission meetings in case water is discussed. Their presence would ensure railroad officials are kept aware of any possible changes in public tone.
1937 Telegram from Walter Bracken to Bennett officially informing the railroad  that condemnation can only apply for greater public use, not the same use. 
1942 Called “Las Vegas Water Supply Recommendations”, internal report on the Las Vegas Land & Water Company addresses whether it is advantageous to the railroad to keep its water facilities. 
  Complementing the report, is this letter from Hulsizer to G.F. Ashby discussing whether it is advantageous to the railroad to keep its water facilities.
1947 Series includes railroad correspondence relating to petitions for moving from a railroad-owned water utility to a public utility, a copy of Senate Bill 63 (creating a public water district in the Las Vegas Valley), and an article and accompanying graphic showing the progression of the public water utility.
1948 Various documentation and newspaper clippings from meetings, petitions, and a special election of the water district appear in this sub-collection. Its focus is on the short-term processes involved in transference from a private to public utility entity.
1949/50 Series (1929;1939), including a chart showing water consumption by month, and a detailed valuation of water facilities, and letter by Calvin Cory to William Reinhart about the purchase of the Vegas Land & Water Company by the Las Vegas Valley Water District.
1952 Letters include internal discussions by railroad officials about divesting itself of water production facilities should the bond issue fail.
  These items include a map of land to be purchased by the Water District as well as offers to purchase the water rights and infrastructure.
1953

Various documentation and maps identify lands, pipelines, facilities, agreements, and notices about the bond issue and its related election.

  These documents show the financial expenditures associated with the 1953 bond issue. They appear in report, press release, and memo formats outlining itemized details of the $8,700,000 general obligation waterworks bonds of the Las Vegas Valley Water District. The artifacts include a letter from the railroad expressing their concern over the valuation of the sale given that many of the facilities were never officially capitalized and, therefore, do not appear in financial ledgers.