Following his remarks, the Cheney project was discussed. Barclay, of the Bureau of Reclamation, reported that the north fork of the Ninnescah was the most feasible site available for the proposed Cheney reservoir. The cost for the project was estimated to be $15.4 million, with federal aid to be between $6.257 and $9.377 million. Black and Veatch supported the conclusion by the Bureau in confirming Cheney's feasibility, saying also that city ownership of the water system would achieve the lowest water bills for the citizens. The Financial Advisory Group created on July 31, 1956, by the City Commission with local bank and financial company officials, concluded unanimously that purchase of the company would be in the best interest of the city, to be paid by waterworks revenue bonds, payable from water revenue rather than ad valorem taxation.

At the conclusion of the hearings, Robert Morton, the special water counsel, presented his views, emphasizing the period of time required in litigation if the stock option was pursued and reminding the city that during the delay it could not expand the system nor finance a new source of supply through revenue bonds. That last factor was critical since the financial experts had reported that the general debt of the city could not be raised by the amount necessary to expand the water supply sufficiently without exacting a severe penalty to the four local taxing authorities responsible for administering ad valorem debt. According to Robert B. Fizzell, a Kansas City attorney and noted expert on municipal bond issues, the issuance of the needed $30 to $50 million in general obligation bonds could drop the city's "A" credit rating, costing it several hundreds of thousands of dollars a year in interest. Experts claimed, "The future of the water utility is the future of the city. There is no choice (to the bond issue) if the future of the city is to be protected." (Eagle, 9/8/56).

Negotiated acquisition based on the $29.5 million figure was recommended by the advisors because of time limits. The city appeared to have little choice. It needed a new water supply and only one area was clearly available. Only by having total municipal ownership could it raise the needed funds to construct it. And only by obtaining the Water Company's approval could the purchase be made soon enough to meet the city's rising needs. In completing the special meeting, the commission asked the local manager of the Water Company if the company would consider a negotiated price, and to report by the City Commission meeting on August 11.

At the meeting, the commission took the necessary steps. The Water Company submitted a letter at the meeting, read by Vice-President and General Manager J.W. Heiney, agreeing to the sale of property to the city for $30 million, thus opening the way for the city's purchase, if the voters approved, and also requested that the company be retained to manage the system. In response, two resolutions were passed unanimously, calling for City Manager Frank Backstrom to prepare the necessary engineering estimates and reports on the purchase of the Water Company for around $30 million, and the extension of the water supply to the Ninnescah River, with $7.65 million for a pipeline to the site and between $6.5 and $9.5 million for the city's share of the reservoir project. The figures would then be placed on the ballot for citizen approval. The company's compliance came after years of balking, but apparently this time the odds were different. If the company had refused to sell, the city could have taken it to court to obtain the stock option, costing both parties a large sum. And with the Chicago firm's original appraisal of $26.9 million, $8.1 million less than the water company's own estimate of $35 million, it became clear that if the company was forced into condemnation proceedings, it could experience negative results. With the city clearly forced to buy, whereas before it was only a possibility, the company decided that seeking a favorable price was preferable to fighting the sale. Negotiations commenced on the exact price as well as the management contract, with Howse bargaining for the city.

During the meeting, bonds for two other projects were delayed. While pressure was building for a secondary sewage treatment plant and improvements, that seven million dollar project was delayed until April to allow the city to concentrate on its main problem, water, and to give the city's Joint Governmental Committee on Revenues, along with the Wichita Civic Council, time to determine financing. In addition, refinancing the $9.7 Equus Beds expansion program was considered, to convert the temporary bonds used for building the 66-inch main and the emergency wells into general obligation bonds. However, the commission decided against that, since it would prevent using revenue bonds later, with City Attorney Aley arguing the state legislature would give the city authority to convert it to revenue bonds if the voters approved the issue. If the legislature refused, the city could put it up for a vote at a later time. The commission approved seeking enabling legislation instead of relying on the general obligation bonds.

Negotiation between the city and the Water Company began on September 14, 1956, with the main argument centering on the payment for the company to perform management service for the city. Initially, a stalemate seemed to occur as the company wanted from seven to eleven percent of the gross water receipts, while the city agreed to three percent. The agreement was necessary since the company linked a management contract with purchase of the property. J.J. Barr, president of the company, said the company would be willing to sell for $30 million only if there was a satisfactory management contract. After two weeks of bargaining when agreement seemed questionable, the two sides reached agreement on September 18. Howse reported to the commission that both sides had agreed to a commission of four percent of the gross water revenues as a fee for performing management services. The company would assume its responsibilities on the final payment of the $30 million on November 1, 1957. The proposal was accepted by the commission. Some question remained whether the city had the authority to write such a contract with a private company. The limitation was stated by Morton, "This city can accept any contract only on the condition that the 'completed' contract (is) within the statutorily delegated powers of the city." (Eagle, 9/19/56). The city began an investigation to see if the contract would be valid, assuming voter approval. Eventually it was determined that the contract would be effective on the condition of state legislative approval.

The company and city had also agreed on a figure of $32.5 million for the purchase of the company. Additions and improvements worth $2.5 million had been added to the original figure, since a year's delay was expected in consummation of the deal. In response to Howse's report, the city placed two ordinances on first reading. The first one would place on the ballot the question of whether the city should purchase the company property for a cost not to exceed $32.5 million, to be paid back in 30-year revenue bonds. The second question was more complicated. It called for the issuance of water revenue bonds for not more than $7,650,000 for constructing a pipeline to Cheney, only in the event that the city received the contract with the federal government for the construction of Cheney Reservoir at a total cost of $15,392,000, with the city's share to be $9,377,000. In order for this to be implemented, enabling legislation was required at both the state and federal level.

Changes in state law were necessary to allow the city to enter into a 40-year contract with the federal government, and federal legislation was required for funds to be allocated for the project. If those charges were made and the voters approved the bonds at the local level, the reservoir could be constructed.