The Evergreen Water and Sewer District has decided to give $578,000 back to the federal government.

The funding initially was called “a Christmas present” in an Inter Lake story from December 2003. It turns out that present is being returned unopened.

The money was part of a grant the district received seven years ago, according to Jack Fallon, president of the Evergreen Water and Sewer District Board.

The seven-member board decided unanimously last month to give the money back because of the federal government’s budget deficit.

The district requested that the Environmental Protection Agency place the money in reserve status with a high priority for future use when the federal budget is balanced.

“Given the state of the economy, somebody’s got to take the lead,” said.

He noted that the district came up with several projects the money could be used for, but in the end the board decided to give the money back.

Other contributing factors include the federal government spending money on the stimulus package and the extra reporting and contracting requirements that have come into play since the grant first was awarded.

Fallon said the district board was thinking about using the money to construct a sewer treatment facility. Such a facility would cost between $20 million and $25 million, Fallon said.

The grant was the result of a conversation Pam Holmquist had with then-U.S. Sen. Conrad Burns about the district’s desire to build its own wastewater treatment facility. Holmquist was and still is a member of the Evergreen Water and Sewer District Board.

“We were all trying different angles and she just happened to succeed on that one,” Fallon said.

The district has a contract with the city of Kalispell to treat its sewage. The contract is good until 2015 but has 10-year renewal options. The contract gives Evergreen the capacity to have quite a bit more effluent treated.

The Evergreen Water and Sewer District recently built a 1.6-million-gallon water tank next to a 1-million-gallon tank that was built in 1967 on Mission Trail Road.

The new $2 million water tank should be online within the next 30 days, Fallon said. It was built by DYK Inc. of El Cajon, Calif.

The sewer district also spent $400,000 on two new water wells this past summer.

The district has $1.7 million in cash reserves, according to District Manager Roberta Struck.