Waters from the Sierra Nevada that once carved its mountains through hydraulic mining are the same that provide recreational opportunities and drinking water to the residents of Nevada City. And while it may seem simple that Nevada City’s water comes from the Little Deer Creek, goes through the town’s water treatment plant off Gracie Road, then makes its way to the city’s homes and businesses, the particulars of that process pose a conundrum to city officials, which boils down to projected water rate increases over the next decade. “We have an old system,” said Verne Taylor, the public works director. …