CHEYENNE - Gillette Mayor Duane Evenson says the city plans to seek about $20 million in the coming legislative session for design and preliminary work on a planned 42-mile water pipeline.

The proposed new pipeline would carry water to Gillette from groundwater wells north of Moorcroft, in Crook County. Gillette already has one pipeline that carries water from the area.

City and state officials say another pipeline is necessary because increasing demand for water in Gillette will soon exceed the available supply. The total project is estimated to cost $226 million and officials say they expect the state will ultimately pick up two-thirds of the cost.

Evenson said Thursday that he met this week with incoming Senate President John Hines, R-Gillette, to discuss the project. The mayor said Hines told him that he intends to sponsor legislation in the session that starts next month seeking approximately $20 million that would cover design work and other preparations for the pipeline construction.

An attempt to reach Hines for comment on Thursday was unsuccessful. Earlier this week, Hines said he's working with the city on legislation to secure state funding to begin the project. He said uncertainty about the state's budget picture prevented him from saying how much he would try to get.

Gov. Dave Freudenthal's proposed supplemental budget, released last month, called for putting $100 million toward the pipeline project at the end of the state's current two-year funding cycle provided the money was available in a reserve account.

State budget analysts in October predicted that lawmakers would have about $900 million in additional revenues to spend in the legislative session that begins next month. But analysts now say declining energy prices will likely result in a sharp reduction in that projected surplus when they issue their next projections early next month.

Freudenthal is scheduled to submit revised budget suggestions to the Legislature after the next revenue projections are released.

Chris Boswell, Freudenthal's chief of staff, said Thursday that the governor's final funding recommendations on the Gillette project will depend on how much the state can afford.

"It's likely that the governor will support upfront funding for some part of the initial work and planning process that goes into the project," Boswell said.

Boswell said the water pipeline is clearly important. "It's going to drive their growth for years to come - it's a very necessary project."

Mike Purcell, director of the Wyoming Water Development Office, said it's likely that if the state puts money into the pipeline project that his office would oversee the work.

Purcell said Gillette in October submitted a request to his office for around $229 million to fund the entire project. He said his office didn't have that much funding available, and directed the city to take its case straight to the Legislature.

"They have done a lot of population-projection type work," Purcell said of Gillette officials. "We reviewed their work and there's definitely a potential demand for a great deal of water in the Gillette regional area."

Purcell said the project proposes to draw water from the Madison Aquifer. He said the state owns unappropriated groundwater in the area and said all the evidence points to the aquifer holding enough water of good quality to satisfy the city's needs.

"One of the first phases of the study will be to do some test drilling," Purcell said. "But we've had considerable success with wells in the Madison Formation."

Mayor Evenson said the city's existing wells and pipeline can deliver about 14.4 million gallons of water a day. He said peak demand in the summertime can reach 15.5 million gallons, forcing the city to draw from its storage. However, he said the city needs to keep storage levels up to have water available to fight fires.

Evenson also said there are currently about 1,500 buildable lots in Gillette that already have water and sewer connections to them waiting for new homes to be built.

"It's very important that we get water for the infrastructure so we can have the growth that we're going to have," Evenson said.

Gillette residents have cut their water consumption from an average of about 230 gallons per person per day down to about 150 gallons, Evenson said.

"The community has certainly stepped up to help us conserve our water system, and our water capacity," Evenson said.

Recent population studies completed by government and private organizations predict that the population of Gillette will increase from its present level of around 31,000 up to 50,000 by the year 2035, Evenson said. He said peak water demand then could exceed 30 million gallons a day.

The state Water Development Commission generally requires local governments to pay one-third of the cost of any project, Evenson said. At that rate, he said Gillette's share of the water project would amount of about $75 million.

Purcell said the Gillette project probably represents the largest state investment to date in a municipal water supply project.

"They didn't locate Gillette on the banks of a mighty river," Purcell said. "That means that they have to be a little more innovative in getting the water supply they need for their future."