This may have been mentioned in another of your threads, but doesn't hurt to repeat. If using the API liquid test kit for nitrate, make sure to shake Regent #2 for a good 2 minutes before adding the drops. Less shaking has been known to result in inaccurate and higher readings. Also, the local water supply people should know the average nitrate level in the water, this is a public health issue, and that would confirm your test results.
As for dealing with nitrates, lots of plants especially fast-growers. Use Prime [I've never used the powder, but like someone else said I too prefer liquid additives as they are much easier for me at least] at each water change. This detoxifies the initial increase of nitrates and by the time Prime wears off the plants and bacteria [yes, there are bacteria in the substrate that use nitrates to produce oxygen] will have things under control when the nitrates are relatively minimal as here. If you had higher nitrate in the source water, other steps would be necessary as AD has clearly mentioned.
To pick up on DKRST's point about nitrate toxicity, there is a lot of inaccurate information around the hobby on nitrates. Some maintain levels up to 100ppm are "harmless" to most fish, and one still frequently sees advice to keep nitrate below 40ppm. This is far too high. Dr. Neale Monks has been writing on nitrates frequently in his responses to questions in the UK periodical Practical Fishkeeping, and being a biologist he should know; he says that all fish are probably affected by nitrates in excess of 20ppm, and cichlids certainly are. This should not be surprising, when one considers that none of the fish we maintain in aquaria have evolved in waters with nitrates much above zero. Nitrate is simply another form of nitrogen, and while it may not be as immediately toxic to fish and plants as ammonia and nitrite, it is still toxic and should be kept as low as possible.