Indian Hills' $4.5 million effort to meet federal arsenic standards is timed to go into operation six months after a deadline set by the Nevada Department of Environmental Protection.
A treatment plant will require water rate increases that should have been implemented a year ago, according to a report from district engineer Brian Randall to Indian Hills General Improvement District trustees on Wednesday.
Randall said a good-faith effort on the part of the district might get them out of trouble with the state if they are able to treat water on the present schedule.
"The train is going down the track," he said. "Your design engineer will be soliciting proposals next week for the microfilters needed for the treatment plant. Once he receives the proposals it will go out to bid. Once the bids are in, if you don't have the funding, you can't acquire the equipment."
Randall said building the plant will require a substantial rate increase. That rate increase will need to be higher the longer it takes trustees to implement it.
"I don't know how it will come out," he said. "If you go with establishing your own treatment plant, it's going to be hard to put together a rate structure to pay for it."
There might be a white knight coming to the district's rescue, but that rescue will also come with costs.
A pipeline has been proposed between Minden and Carson City that could provide the district with water to reduce their arsenic to the required level, but waiting on the pipeline could be a trap.
There is also the question as to what it would cost the district to participate in the pipeline and whether the pipeline would be completed in time for the July 2010 deadline.
"You have no idea what the cost of the pipeline is going to be and there's no way of knowing," Randall said. "That means you can't plug the cost into a rate study.
If the district waits on the pipeline, Randall said, the state might not accept that as a good faith effort to deal with the arsenic problem.
"The district is caught in a really bad spot," Randall said.
District trustees plan to discuss the rate increase at their next meeting to prepare for the public hearing needed to actually increase rates.
Federal arsenic standards dropped from 50 parts per billion to 10 parts per billion in 2006.
The district met the old standard, but like many water systems around the state was higher than the old standard.