City councilors involved in overseeing the Buckman Direct Diversion expressed concern Thursday that taxpayers are helping pay to reorganize the project on behalf of the private Las Campanas development.

The city and county of Santa Fe and Las Campanas are partners in a plan to draw drinking water from the Rio Grande. The project broke ground last year.

Las Campanas now wants to withdraw from the partnership and become a customer of the county water system instead of building its own water-treatment plant.

Legal representatives and engineers have said such a change is technically possible, based on a mostly complete analysis authorized by the board and funded this year by Las Campanas. But altering the role of Las Campanas might require amendments to federal permits, operating agreements between the parties or other actions.

City Councilor Rebecca Wurzburger asked who was paying for the work that had already occurred and requested a cost analysis before other negotiations or analysis take place involving government staff and contractors.

"The longer we talk about this, the more uncomfortable I get," she said.

Councilor Chris Calvert noted that the city didn't initiate the change and shouldn't be penalized. "This issue was caused by an outside entity," he said.

County Commissioners Virginia Vigil and Harry Montoya, who both serve on the joint city/county board overseeing the project, said getting water to residents of Las Campanas through a public system would be beneficial even if it was an unanticipated change in the project.

Las Campanas, a luxury development northwest of the city, faces difficulties caused by the recent housing market downturn. The common areas in the subdivision — including the golf courses and country club — as well as unsold lots are under the direction of a management team appointed by its finance company, Bank of Scotland.

Project managers also reported Thursday that material costs for the river diversion have escalated by about $4 million. Other budget changes, however, mean that about $800,000 will be added to the $186 million design-build contract to address the materials increase. A contingency fund for the project should cover the additional cost, said Mark Ryan, a board engineer.