LEAVENWORTH — The Leavenworth National Fish Hatchery has lost much of an $18.1 million federal stimulus grant to replace its failing water system because of design flaws in the project and public opposition.

The federal Bureau of Reclamation announced Thursday that the funding, part of the American Recovery and Reinvestment Act, will now be used for other projects. The loss of funding will likely push off replacing the hatchery’s deteriorating water system — which had been scheduled to start this fall — for years.

In a news release, the agency said its recent decision to delay issuing a draft environmental assessment for the hatchery project conflicts with deadlines for spending the stimulus money.

Leavenworth businesswoman and environmentalist Harriett Bullitt said today that she believes overwhelming public opposition to the project played a big role in delaying the environmental assessment and losing the stimulus money.

“This project was not ready to go, obviously,” she said. “They thought they could get it ready as they went along. It’s too bad that they didn’t get these things solved sooner, but the project is so complicated.”

The Bureau of Reclamation, which funds the hatchery, and the U.S. Fish and Wildlife Service, which operates it, have been working for years on a plan to upgrade the hatchery’s old water system and improve Icicle Creek. Last month, the agencies held two public meetings in Leavenworth to unveil their preferred plan, which called for moving the current water diversion for the hatchery and building a large pumping station to replace the existing gravity-feed system. To ensure a steady flow of water for the pumping station, a weir, or dam-like structure would be built across the creek near the hatchery.

More than 200 people attended the meetings, many of them questioning the accelerated timeline for the project and the need for the new dam structure. Several requested a more thorough environmental study of the project.

In late December, Reclamation announced it would delay issuing the environmental assessment in order to further investigate design problems with the project and to address public concerns raised at the meetings in Leavenworth.

The additional studies will take several months, the agency stated.

Bob Hamilton, an activity manager for the Bureau of Reclamation, who was working on the hatchery project, said the agency still plans to move forward with designing the new water system.

But he said the stimulus money was the only source of funding for doing the work. Without it, the agency will have to go back through the process of applying for federal appropriations, a process that can take several years.

“The issue of the hatchery needing a new water system is not going away,” he said. “The system could fail tomorrow or it could fail in 20 years. We just don’t know.”

In the meantime, the Fish and Wildlife Service has an emergency plan to deal with a sudden failure of the water system, he said.

A smaller portion of the $18.1 million will still be spent on design and construction of an adult salmon holding pond at the Winthrop National Fish Hatchery and a pollution abatement pond at the Leavenworth hatchery. But Hamilton did not know how much of the money was going to those projects.

Bullitt said the hatchery is a “public institution” in Leavenworth that provides education, recreation and natural experiences. She said a coalition of local agencies and environmental groups want to see the hatchery upgraded, but did not support the government’s plan for doing it.

“We want a plan that will allow the hatchery to go ahead and rear fish successfully and, at the same time, leave a restored and healthy river,” she said. “We think that’s possible.”

Michelle McNiel: 664-7152

mcniel@wenatcheeworld.com