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When Naples begins expanding its reclaimed water system within the next 1½ years, residents of Gordon Drive, Port Royal, Aqualane Shores and Old Naples will be hit with bills ranging from $3,898 to $31,477 — even more if their homes sit on more than 2 acres.

The neighborhoods were chosen for the city’s $17.4 million first phase because their potable water usage is the highest and city officials estimate the switch to reclaimed water will save between 2.5 million and 4 million gallons daily of its drinking water supply. But they emphasize homeowners’ costs likely will drop because the project hasn’t been designed, bids may come in lower than estimated, and grant money will cut fees.

“Those are just preliminary estimates,” City Manager Bob Lee said, adding that bids now under consideration came in less than the $4.8 million estimate for the first phase.

Last week, 540 residents on Gordon Drive and in Port Royal, the first residential phase, received letters from Public Works Director Dan Mercer detailing estimated fees from $3,898 to $14,496, or more for properties greater than 2 acres. Before January, City Council will hold meetings to offer residents a chance to hear more and ask questions.

But after the initial payout for mandatory hookup, residents will have two water meters — and see lower monthly water bills.

“It’s not going to be a drastic windfall,” Naples Utilities Director Bob Middleton said of the drop, estimating residents will see a $15 to $20 decrease.

Homeowners now pay $1.78 per 1,000 gallons used, Middleton said, but will pay 75 cents per 1,000 gallons for the reclaimed water, which will be used for irrigation. And, he said, Port Royal residents will see a drastic improvement to their water pressure, which drops due to sprinkler systems.

The switch means Naples will be more environmentally friendly because 70 percent of its drinking water is being used for irrigation. Residents hope the fees will be reduced, but most agree it’s needed to improve Naples Bay’s water quality.

“I applaud the city for doing it,” said John Allen, president of the Port Royal Property Owners Association. “It’s the environmentally sustainable thing to do. ... I don’t think anyone is doing any cartwheels, but I think everyone will realize it’s prudent.”

Residents can pay the entire bill, or over 10 years at 6 percent interest, with the first charges hitting annual tax bills in November 2007. It’s uncertain yet whether property owners who irrigate lawns with well water will be forced to switch.

The project is part of a consent order with the state Department of Environmental Protection, which fined Naples $20,250 and ordered it to expand its reclaimed water system to reduce treated water being dumped into Gordon River. City officials also complied by providing about 900 homeowners with water-sensor sprinklers.

Naples’ reclaimed water use began in 1985, when it installed a line to golf courses along Goodlette-Frank Road, which were using water wells and reducing Naples’ groundwater supply. Use spread to city parks, medians, its public schools and Coastland Center mall. In spring 2002, Naples prepared a Reclaimed Water Master Plan targeting the highest potable usage areas, dividing them into two phases: south of Central Avenue and north.

In January 2005, council approved a contract with Tetratech/Hartman & Associates to design the system. This February, council voted to pay $3.9 million to Danella Construction Inc. to lay the transmission line. Two months later, the contractor broke ground on the line, which will hook up 2,005 households.

The first subphase, the main trunk line from Central to the end of Gordon Drive, is under construction, with completion expected by January. The Port Royal area subphase is scheduled for August 2007 completion. There are 823 customers affected. The final subphase — the 1,182 customers in Aqualane Shores and Old Naples — should be finished by January 2008. The first phase was broken into subphases to gain more competitive construction pricing, but it could be separated into more areas, further cutting costs.

So far, city officials received a $1.2 million grant from South Florida Water Management District, which was applied to the trunk line, Gordon Drive and Port Royal residents because that project began this year.

Middleton said Naples applied for a grant for the $4.8 million Port Royal work and should receive word in October. Naples will seek funding for the $8.7 million Aqualane Shores and Old Naples project next year. If grants are approved, he said, the price differences among neighborhoods could be cut.

City staff recommended charging residents a flat rate, but in April, council contended larger property owners use more water and can afford higher fees. Council decided that Equivalent Residential Units (ERUs) based on property size was fairer. Each phase’s ERU, however, would be calculated by construction and engineering costs, with the Port Royal and Gordon Drive ERU at $2,398, and Aqualane Shores and Old Naples estimated at $5,531.

In an April memo, Finance Director Ann Marie Ricardi detailed property charges based on ERUs: less than a half-acre was assessed one ERU; one-half to less than one acre, 2.8 ERUs; and more than one acre, but less than two, 5.42 ERUs. A $1,500 connection cost was added to each to arrive at the total charge.

The letter Gordon Drive and Port Royal property owners received says those with less than a half-acre will pay $3,898, or $553.45 annually; more than one-half acre to less than one acre, $8,214 or $1,166.24 annually; and more than 1 acre, but less than two, $14,496, or $2,058.17 yearly.

Ricardi’s memo says Old Naples and Aqualane property owners with a less than one-half acre will pay $7,031; more than one-half acre to less than 1, $16,986; and more than 1 acre, but less than 2, $31,477.

Residents support the project, but some question how fees were calculated.

The Port Royal association’s president looked forward to an improvement in water pressure. “I’m hoping it turns out to be an economic savings, as well,” Allen said, adding that he thought more residents would support rather than criticize the mandate. Still, he was surprised at the fees. “I’m sure their theory is if you have more lawn area, you’re probably using more water.”

Past president Margaret “Dee” Sulick said many are confused by charges for lot size hookup and reduced charges they will see in their monthly water bills due to the new reclaimed water meters for irrigation. “It’s very equitable,” she said of the metered monthly charges, which city officials chose over flat rates. “This is an investment in the community. It’s something I think is sorely needed.”

Old Naples Association President Alan Mengel said homeowners support making Naples Bay healthier. However, he questioned why Old Naples and Aqualane Shores, which have more homeowners to divide the total cost, are expected to pay about double. “I have no reason to believe we’re going to get any less grant money than Port Royal,” he said.