Developer Rick Ferguson may or may not get his way on plans to build a gated community on 265 acres within the Lake Maumelle watershed. Either way, says Central Arkansas Water's top official, the utility's customers are going to pay. The utility is fighting Ferguson's plan to build about 85 houses close to the lake's northeastern shore, but the only way it can win is to buy the land, either outright or through condemnation. If Ferguson prevails, and his planned development ends up raising pollution levels in the lake as the utility fears - Ferguson says it won't- customers will end up having to pay for extra treatment of the water. "Ratepayers will have to pay it one way or the other," said Jim Harvey, Central Arkansas Water's chief executive officer. Just how much, it's not possible yet to tell. But with a land acquisition budget that has never topped $1 million per year, buying Ferguson's watershed property - which his attorney says is now worth $10 million, more than 10 times what Ferguson paid for it a few months ago - could hurt Back in 1992, the board of the Little Rock Municipal Water Works - CAW's predecessor - voted to buy all the land within a quarter of a mile of the lakeshore. Six years later, with that mostly accomplished, the board broadened its sights to include the entire watershed. The utility would try to buy all of the undeveloped land on the eastern half of the lake, dubbed Zone 1 - the half closest to where water actually flows from the lake into the distribution system - and work out use restrictions with the owners of land that's already developed. The watershed on the eastern half of the lake is fairly narrow, so it wasn't an impractical goal, Harvey said. On the western half of the lake, labeled Zone 2, the watershed broadens out much farther, making it unrealistic to buy all the land, Harvey said. Instead, the 1998 resolution spelled out the utility's intention to try to buy land within 300 feet of important tributaries, purchase other land if possible, and work out restrictive use covenants with other owners. Since 1992, the water company has bought just over 1,000 acres of watershed land at a cost of about $4 million. But beyond the quarter-mile buffer zone, CAW hasn't exactly been aggressive - in part, Jim Harvey said, because the merger of Little Rock's and North Little Rock's water utilities in 2001 slowed down the land acquisition program. The delay could prove costly. Ferguson paid about $2.5 million in January for 1,100 acres, 265 of which are in the Lake Maumelle watershed. Ferguson's attorney, Hal Kemp, has said Central Arkansas water would have to pay Ferguson about $10 million to match other offers on the 265 watershed acres. Harvey said water company officials are having the land appraised and don't think they should have to pay more than what Ferguson paid - between $2,400 and $2,500 per acre, or between $636,000 and $662,500 for the 265-acre parcel. If the two sides can't reach a deal, CAW would have to go the condemnation route: a judge would decide whether the water company had rights to the property, but a jury would decide what CAW would pay for it. The Little Rock Municipal Water Works did successfully condemn some land within the watershed. But Kemp said he doesn't think that means CAW will automatically have the same authority. And that's not even touching a larger parcel of watershed land owned by Deltic Timber south of the lake's eastern half. Deltic and CAW have been talking for months about the land, Harvey said. CAW wants to buy it, Deltic wants to build houses on it. Deltic official Jack McCray brought the development proposal to the water commission last month - right on the heels of Ferguson's proposal - but the commission didn't take any action. The water company plans to have Deltic's property appraised as soon as the appraisal of Ferguson's land is finished. Longtime Water Commissioner Claude Wilson, who with Commissioner Francille Turbyfill abstained from an otherwise unanimous vote against Ferguson, said he hopes that technology will advance far enough that the utility could allow some development in Zone 1 of the watershed without chancing damage to the lake. But he says it's not there yet. "I suspect that [buying the Deltic Timber land] is the ultimate solution," he said. "Right now, of all the known things you can do … that is probably the most logical one." As for why the utility didn't buy Ferguson's land when its previous owner, the timber company Soterra, put it up for sale, Harvey said that the utility had other priorities last fall, but he also said no one knew the land was for sale until Ferguson had a contract on it. Ferguson didn't return a message left at his office this week. Kemp, however, has defended Ferguson's efforts to make sure his development wouldn't affect the water quality in Lake Maumelle. And the utility's opposition to Ferguson's plan has raised some questions about why CAW doesn't want Ferguson's homes near the lake, but did work out an agreement with financier Warren Stephens to allow him to build his exclusive Alotian golf club within the watershed. Harvey's explanation is simple: the golf club developers agreed to build on land in Zone 2, considered to be less crucial to water quality, and are designing the course to retain and reuse any water that runs off the fertilized fairways. Ferguson's development is the kind you'd want if you had to have development in a watershed, Harvey acknowledged. He's proposing only about one house per three acres of land, and would pump sewage back out of the watershed. He has said he'd plant a 50-foot-wide strip of grass between the homes and CAW's lakeside property to filter out pollutants from runoff, and would test lake water regularly to make sure water quality didn't deteriorate. If Ferguson wanted to build the subdivision on land in Zone 2, CAW staff probably wouldn't have opposed it, Harvey said. But there's another question mark in the process. Dennis Ford, president of the environmental consulting firm that worked with both Stephens' Alotian golf club and Ferguson, told water commission members last month that the utility's officials are actually concentrating their watershed protection on the wrong end of the lake. CAW staff have said the eastern half of the lake is the most important because that's where the utility draws its water. If pollutants get into the water on the western side of the lake, they have time to settle out by the time that water travels to the intake pipe on the other end, Harvey said. But Ford told commission members that it's the western side that's more vulnerable to pollution because almost all the lake's tributaries - major potential sources of contamination - flow into the western half. Commission members asked CAW staff to look into Ford's assertions. Harvey, not surprisingly, defends the utility's precautions. Lake Maumelle's water quality data has been "boring" up to now, he said - good, and unchanging. He doesn't see the sense in jeopardizing that. And it's not enough that Ferguson's planned 85 homes might not hurt the lake, he said: the problem is that if the utility allows Ferguson to build, it would have to say OK to other developers who agree to abide by the same rules - such as Deltic Timber, which wants to build more than 200 houses on its Zone 1 property. A few houses might not make a difference, Harvey said, but close to 300 would. Tuesday, the Pulaski County Planning Commission will take up Ferguson's proposal. And while they'll probably listen to what CAW staff members have to say, Harvey said, they don't have the authority to block the development solely because it's in the watershed.