Henderson complex’s water system failure spurs effort to change Nevada law

A proposed change to Nevada law would allow local governments to step in to fix water and sewer systems at communities with homeowners associations.

Henderson pitched Assembly Bill 10 Tuesday to the Assembly’s Committee of Government Affairs.

The city requested the law in response to a crisis at the Somerset Park community last summer.

The city stepped in to replace a broken underground water distribution system at the townhome complex to not displace residents, officials told the committee, adding that 1 million gallons of water were leaking monthly.

If signed into law, the proposal would give local governments the authority to repair or replace water and sewer systems at similar communities with a repayment plan.

The city had been aware for months about the leaks at Somerset because excessive water bills, but the city didn’t discover how dire the issue was until crews showed up to the complex in August to make emergency repairs to a sinkhole that had started swallowing a car, officials said.

Leaking water was eroding carports, asphalt and the soil-based bedding underneath.

The city warned residents that if the community’s homeowners association did not fix the problem, they could be forced out of their homes.

The company that managed the association’s finances told the city that the association had no funds to cover repairs, a responsibility that strictly fell on the property owners of the 85 townhomes.

The Henderson City Council improvised, fronting the nearly $700,000 repair and then billing the homeowners through a lien-based plan — similar to a tax — for those who couldn’t immediately pay more than $8,000 that corresponded to each townhome owner.

Those owners were given 12 quarterly installments to satisfy the debt.

Proposal would empower local governments

The city wants to place that type of solution into Nevada law.

“Our bill will provide cities and counties greater flexibility when responding to damaged water or sewer infrastructure that can threaten the health and safety of residents, leaving them unable to remain in their homes,” Henderson Government Affairs Manager David Cherry told the Assembly members.

Cherry said that under the law, local governments would have discretion on whether they want to draft an ordinance to use the “tool.”

“It is solely the choice of the local elected leaders,” he said.

Once the local government decides to intervene, however, homeowners would not have a choice to opt out, Cherry explained.

“Either you fix your water system on your own or we’re going to take action before it becomes a crisis,” he added.

Cherry said Henderson hopes the Somerset situation doesn’t repeat itself, noting that there will be plenty of communication before the city takes action and even more time to reimburse the city.

“This experience became a catalyst for AB10, not because the city wants to ever be in the business of replacing private water or sewer systems,” he said.

Cherry explained that the bill was narrowly drafted and did not aim to address other HOA-related issues, such as how they maintain their state-mandated coffers for emergency repairs.

Assemblyman Jovan Jackson, D-Clark County, expressed concern that the law doesn’t explicitly lay out how much time homeowners would have to repay costs.

Assemblywoman Heather Goulding, D-Washoe County, said she worried HOAs would let repairs lapse so that a local government entity fixes it.

“I would hate to create a situation where there’s an incentive to just wait until everything crumbles knowing that the city’s going to swoop in and take care of everything. … Maybe an HOA would be happy to just say, ‘The city will take care of it if we just wait long enough.’”

Contact Ricardo Torres-Cortez at rtorres@reviewjournal.com.