A power struggle over water resources in Hall County threatens to deprive residents of an alternate water supply.

Even as Hall County and Gainesville officials say they are committed to an immediate resolution, any deal is sure to mean higher water rates in the county.

At issue is control over the Cedar Creek Reservoir in the Oconee River basin. If access to Lake Lanier water is cut by more than half in 2012 by July’s federal court ruling, Cedar Creek is Hall County’s first responder.

The 141-acre reservoir off Timber Ridge Road in eastern Hall County lies in wait as a primary resource to tide municipal water users over until another planned reservoir can be built in the Glades Farm area. But before its water can be tapped, facilities to take the water, treat it and send it to customers must be built.

But until the city and county agree on its control, Cedar Creek remains a useless pond.

Hall County built Cedar Creek a decade ago, but Gainesville owns it. A 2006 agreement between the two governments deeds the reservoir to Gainesville Public Utilities, along with all of the county-built fire hydrants, water lines and pump stations that once belonged to the former Hall County water system.

But that agreement makes no specific mention of the state-issued permit needed to take the water from the reservoir, treat it and sell it. That missing part of the 4-year-old agreement has given Hall County officials the perceived upper hand in talks with the city.

County officials believe that the city may own the reservoir, but they own the water, though the 2006 agreement says all facilities in the Hall County water system should belong to the city, including but not “limited to” the listed items in the agreement.

“We’ve talked to the EPD about it, and they agree,” Hall County Public Works Director Ken Rearden said.

Now the county wants to sell that water to the city.

A draft of a new agreement written by county officials this month — one that would make the 2006 agreement null and void — names Hall County as the main supplier of raw water in the county and leaves Gainesville with its current obligation to treat and distribute it.

The agreement also calls for a review of water rates for customers outside the Gainesville city limits. Hall County customers currently pay twice what city residents pay for water.

But the agreement, as is, likely won’t get a signature from anyone in the city. Gainesville City Manager Kip Padgett said Gainesville has some “serious” concerns with the county’s offer, and city officials are moving forward with the design of Cedar Creek’s water treatment plant, as per the 2006 agreement.

“The council’s been moving forward with our responsibilities as far as that 2006 agreement,” Padgett said. “And the council feels that is still the best course to go.”

Since 2006, the city has been the sole supplier of water to city and county residents, spending millions to extend lines, build pump stations and comply with state environmental regulations to maintain the right to withdraw and release water into Lake Lanier.

But U.S. District Court Judge Paul Magnuson threatened to change the game in July. Magnuson, ruling on a decades-old struggle between Georgia, Florida and Alabama over rights to Lake Lanier, ruled that the massive reservoir was not a federally-authorized source of drinking water.

He gave Georgia until July 2012 to make a deal with Florida and Alabama over the lake’s use or risk losing it as the main source of drinking water for most of metro Atlanta.

The consequence would limit Gainesville’s ability to pull water from the lake that had, for 50 years, been its sole supply.

City officials, who had been responsible for providing water to county residents for years, looked to plan B: Cedar Creek.

At its current capacity, Cedar Creek could provide about 7.3 million gallons of water daily to the county. If Lanier withdrawals were cut, the reservoir could nearly fill the water gap. But the reservoir still needs a water treatment plant.

“(After the ruling), the council immediately told the staff, ‘you guys have got to move forward as fast as you can,’” Gainesville Public Utilities Director Kelly Randall recalled.

Randall and his staff did what they were told. The utilities department made preparations to bid the treatment plant out for design, but stopped Sept. 16 at the county’s request.

On that day, Hall County Commission Chairman Tom Oliver wrote to city officials asking them to put plans for Cedar Creek’s water treatment plant on hold until the two governments could come up with a plan to coordinate both Cedar Creek and Glades reservoirs.

At the time of Magnuson’s ruling, county officials were knee-deep in the permitting process for Glades Reservoir in northeast Hall, which officials originally expected to provide about 6.7 million gallons of water daily to county residents. The county had planned to release the reservoir’s water into Lake Lanier for Gainesville to withdraw, treat and sell.

Magnuson’s ruling threatened the county’s ability to release the water into Lake Lanier for others to withdraw, but it also took a reservoir planned as the supporter of future development and made it the key to the county’s control of the local water business.

The county’s new plan was to pipe water directly from Glades to Cedar Creek and charge Gainesville to withdraw it. The county unveiled the plan in a draft of a new water agreement officials presented to the city in a Jan. 14 meeting.

The county’s plan was revealed three days after Gainesville Mayor Ruth Bruner wrote to Oliver notifying him that the city planned to move forward with the “design, construction and operation” of a water treatment plant at Cedar Creek. Bruner said the city had seen no movement on the county’s end since Oliver’s September letter, and could not wait any longer.

The future of Hall County’s water supply was at stake, she wrote.

“... Glade Farm cannot be available in the short-term, and therefore, should not hold up efforts to ensure our community has water in 2012 if the Judge’s Order is not vacated,” Bruner wrote. “Therefore, we feel construction of the Cedar Creek Plant must proceed quickly to avoid costly, or worse, public health issues if reauthorization (of Lanier) is not accomplished by the summer of 2012.

“... We cannot sit idly by and expose the residents of Gainesville/Hall County to this uncertainty when we have other options available.”

Nobody denies that Cedar Creek is the county’s only interim plan if Magnuson’s ruling limits Lanier’s use. But to make it useful in time for the 2012 deadline, the plant’s design should already be under way, Randall said.

“We’re ready to go,” he said. “We’ve been ready to go ... I need to start building a plant tomorrow if I need to have it available by 2012.”

The only holdup is the permit needed to withdraw water. In her letter, Bruner addressed the county’s repeated assertions that it holds the title to Cedar Creek’s water.

The city needs the county’s blessing to take over the withdrawal permit, Rearden said. But until the city concedes the ownership of the reservoir, the county has no plans to hand it over. The city’s other option is to wait for the county’s permit to expire, which isn’t until the summer of 2012, Randall said.

The city has yet to ask the state Environmental Protection Division if it can apply for its own withdrawal permit since the city owns the reservoir.

“Obviously, the facilities with no permit are about as useful as a permit with no facilities,” Bruner wrote. “Your current position is clearly not what either entity was thinking at the time the agreement was executed. Waiting until the current permit expires and then to be issued in our name wastes valuable time.”

But county officials say it is the city that is wasting valuable time. If the city signs its newly-proposed agreement, and gives the Cedar Creek property back to the county, the county will automatically give the city a site to build a plant and a permit to withdraw water from the reservoir.

“What we’re proposing to do is quit all this bickering between us and Gainesville over who does what in the water business in Hall County,” Rearden said.

And since Magnuson’s ruling may have given the county control over more raw water than the city, Assistant County Administrator Phil Sutton said the county’s plan makes the most sense.

“The whole idea of raw water being in short supply and costing us a significant — a significant — amount of money to build, we need to understand that we have a revenue source that’s going to be able to pay for that,” Sutton said.

Paying for the construction of Glades Reservoir means selling its water, and Gainesville is the county’s likely customer.

“That (2006) agreement doesn’t address any of that,” Sutton said. “We have to have an agreement with Gainesville as the No. 1 receiver of water that assures that we’ve got some revenue off those raw water sales. We can’t put that on the general taxpayers; it’s not done that way.”

If Gainesville has to start paying for water, that cost will most certainly be passed on to Gainesville’s customers, and may have a greater impact on the cost to provide customers outside the city limits with water, Randall said. Customers outside of Gainesville already pay twice the rate city residents pay for water.

But before those details ever matter, the two governments must resolve the Cedar Creek issue. Gainesville Mayor Pro Tem Danny Dunagan and Hall County Commissioner Ashley Bell say they are confident the governments will come to an amicable resolution.

And, yes, Dunagan prefers holding to the 2006 agreement in regard to Cedar Creek, but he is willing to negotiate with the county.

“We’ve got to work together and we’ve got to put politics aside and secure the future for water in Gainesville and Hall County,” Dunagan said. “... I don’t know what will be the perfect scenario. There’s a happy medium in what we want and what they want.”

South Hall Commissioner Bobby Banks says that negotiations are up to Oliver, Bell, Dunagan and Bruner, along with top city and county officials.

But despite the fact that he is on a “need-to-know basis” with issues surrounding Cedar Creek, there is one thing he’s sure of.

“I know we’ll not vote to give them authority to distribute water out of those two reservoirs,” Banks said. “I know we won’t do that.”