Tri-state water war negotiations are slowly inching forward, but legislators must prepare to make decisions in the next session about the state’s water supply, officials said Monday.

More than 200 state lawmakers gathered at the University of Georgia in Athens for a three-day conference to prepare for the legislative session that starts Jan. 10, and many grabbed seats to hear an update on the state’s water situation.

“Economic sustainability and environmental sustainability can and must coexist,” said Allen Barnes, director of the Georgia Environmental Protection Division. “I think there is a path forward, which includes conservation, reservoirs, underground water storage, groundwater augmentation, salt water desalination and interbasin transfers.”

Creating new regional reservoirs is inevitable, but lawmakers must create them where they will have the least impact on the environment, he said.

“That’s no secret. We need to move forward and get started,” Barnes added. “We need to look at all the options collectively. Will it cost a lot of money? Yes, but I will submit to you that it will cost more if we don’t.”

Much of the debate hinges on a 2009 ruling by U.S. District Judge Paul Magnuson, who found that Lake Lanier is not an authorized source of drinking water. The decision set a 2012 deadline for Congress to act before Gainesville and Buford would become the only cities allowed to continue to use Lake Lanier for drinking water, and at mid-1970s levels.

Negotiation teams from Georgia, Florida and Alabama continue to talk, said Nels Peterson, executive counsel for the Governor’s Office.

“Negotiating teams are working on this regularly. Last week, I spent a full day in Montgomery, (Ala.),” he said.

“Everything else is relying on these negotiations before moving forward.”

Rep. Lynn Smith, chairwoman of the House Natural Resources and Environment Committee, and Sen. Ross Tolleson, chairman of the Senate Natural Resources and the Environment Committee, sponsored and passed bills during the last session that promoted conservation methods.

The legislation, which requires an outdoor watering ban during the hottest part of the day and mandatory leak detection by large water systems, could become mandatory if no additional moves are made, said Kevin Clark, executive director of the Georgia Environmental Finance Authority.

“Right now, it is incentivized and voluntary, but we must be prepared to institute mandated conservation measures if necessary,” he said. “We’re also starting a detailed engineering study to find connections between the state’s water systems. We signed the engineer recently and are in the throes of collecting data now before presenting a report to legislators by September 2011.”

Smith and Tolleson encouraged new lawmakers to brush up on their water knowledge about the entire state so this session’s arguments won’t boil down to emotion or regional fights.

“Water is all interconnected in our economy, and we have to balance the water policies we pass. We don’t need to introduce legislation that could damage the economy of the state,” Tolleson said. “If you decide your hot idea may look good at home, let’s talk about the impact it will have on the entire state. Don’t get on the lightning rod train, get on the good policy train.”

Lawmakers in the audience posed questions about Lake Lanier’s congressional authorization and whether Magnuson will allow credit for how much water is returned to Lake Lanier each day.

“We have been working with our congressional delegation, and they’ve been reaching out to the other states, but the issue here is that authorization has to be passed through Congress,” Peterson said. “When two states are on the other side, it’s an uphill battle unless there is a negotiated agreement. The negotiations between the states are in the front seat, and the congressional move is taking a back seat for now.”

Peterson added that Magnuson didn’t allow credit for returned water in his ruling, but the congressional delegation is working on that as well.

“This is the same stuff that we continue to hear,” Rep. Doug Collins said. “We need to protect Lake Lanier and also put in our efforts at the state level to look at the big picture in all the regions.”

Barnes said Gainesville and Hall County officials will start mediation about the Glades Farm and Cedar Creek reservoirs after the beginning of the year, and he hopes they move forward.

“Of the problems in the state, water is at the foremost because it affects agriculture, manufacturing, distribution and so much more,” Sen. Butch Miller said. “We’ve got to think about reservoirs and storage capacity and the water supply manual. As someone has said, ‘The wars of the future will be fought over water, not oil.’”