Assembly committee hears Henderson-backed bill letting local governments repair private water, sewer systems in HOAs

Assembly Committee on Government Affairs members heard testimony on AB 10, a bill from the City of Henderson that would add a new category to Nevada’s neighborhood improvement district law to allow local governments, at their discretion, to repair or replace privately owned water or sewer systems that serve common-interest communities.

The bill would amend the neighborhood improvement project provisions of NRS chapter 271 to permit an NID to be created for a water or sewer system owned by a homeowners association or similar entity. The creation of such an NID would be discretionary for the local governing body and, as drafted, would not require the consent of the common-interest community or individual property owners, proponents said.

AB 10 was presented by David Cherry, government affairs manager for the City of Henderson. Cherry said the measure grew out of an emergency in Henderson’s Somerset Park, an 85-unit development where a master-metered private water system was failing. “The system was leaking a million gallons of water per month,” Cherry told the committee, and the damage included a sinkhole in a parking lot and notices that residents could be displaced if service was turned off. Henderson provided public funding to install a new system and asked owners to repay the cost over multiple years; proponents said that experience motivated the bill.

“As a city, we do not want to be in the business of replacing private water or sewer systems,” Cherry said. “We sincerely hope that we never have to use the authority granted under AB 10, but it is important that we have it available.”

Supporters — including the Urban Consortium (representing Nevada’s large cities), the Nevada Association of Counties, chambers of commerce and the Las Vegas Valley Water District — told the committee the bill would be a limited tool that could prevent displacement and protect public health and shared water resources.

Committee members pressed presenters on safeguards and mechanics. Assemblymember Gallant asked about community notice and the ability of an HOA to respond; Wade Goughner, assistant city attorney for Henderson, said formation under NRS chapter 271 requires published notice and a public hearing that cannot be held “for at least 30 days and no more than 60 days” after publication. Goughner described the standard assessment process under chapter 271: after an engineer’s plan and a public hearing the governing body passes an ordinance setting assessments and payment terms; an assessment lien, similar to a property tax lien, attaches to the properties and unpaid assessments can be sold. He said owners who lose an assessment sale have two years to redeem the sale certificate before a deed process can be pursued.

Presenters emphasized the permissive nature of the bill. Cherry and other city officials said common-interest communities remain free to address problems themselves using HOA reserves and assessments; AB 10 is intended as a narrowly tailored backstop in extreme life-safety situations.

Committee members also asked how repayment would be structured. Cherry described the Somerset arrangement as costing “not quite $700,000” and divided equally among about 85 units, paid quarterly over a three-year schedule in that case. Goughner and city staff said the improvement-district statute gives local governments flexibility to set repayment schedules and to use billing and collections processes established by the jurisdiction.

Several legislators raised broader governance concerns about HOAs and state oversight. Panelists noted state statutes and an ombudsman for common-interest communities exist (NRS chapter 116 was cited during the hearing); presenters said AB 10 does not address HOA regulatory structure or oversight — it is focused strictly on authorizing a narrowly defined improvement district use.

The committee took testimony in support, opposition and neutral positions; no final vote occurred in the hearing. The City of Henderson and other proponents asked the Assembly to approve the bill to give local governments an optional tool to protect residents and shared water resources when private systems fail.

Votes at the hearing: no formal vote on AB 10 was recorded; the committee opened and closed the public hearing and took testimony.