Indian Hills' exemption from enforcement of new arsenic regulations expired last week.
The district is in violation of a Nevada State Environment Commission order to reduce arsenic levels in its water.
The district received theexemption in 2006 when limit for arsenic levels dropped from 50 parts per billion to 10. Indian Hills tested at 17 parts per billion.
The district doesn't qualify for another extension because it serves more than 5,000 people, according to Bureau of State Water Quality Chief Jennifer Carr.
Carr said the department is in the process of finding the district in violation.
She said the state, county and the district are meeting to determine whether a pipeline from Minden is about finished to the East Valley Water System.
Indian Hills plans on building a $4.5 million plant to remove the arsenic.
A pipeline would be an alternative to the plant, but cost of running a line and connecting to the waterline is unknown.
Carr said the advantage to the waterline is that it would be a lot cheaper to operate and maintain than a treatment plant.
District officials are expected to discuss raising water rates to either build the plant or the pipeline at their 6 p.m. Feb. 18 meeting.
The earliest the plant could be online is December 2010, according to district engineer Brian Randall.
Carr said the department will establish a timeline for the district to come into compliance with federal water standards.
