By Marice Richter

DALLAS (Reuters) - When the going got tough due one of with worst droughts in a century, the parched Texas city of Wichita Falls got going with its program to recycle sewage water for drinking.

The city this month opened the spigots on a $13 million system that mixes 5 million gallons a day of treated waste water with area lake water to keep drinking water flowing for its 105,000 residents.

Convincing them to drink it is another matter.

"Everyone I know is buying bottled water," said Ronna Prickett, co-owner of Polka-Dot Penguin gift shop.

"People at the city have been telling us to have faith in the system but there is a stigma attached."

The reservoirs that serve Wichita Falls, about 100 miles northwest of Dallas, have dropped below 25 percent of their capacity and are expected to run dry in two years.

Residents said the treated water is clear but a bit soapy tasting.

While other areas have recycled waste water for years, Wichita Falls bills its plan as a pioneering program for a U.S. city of its size to treat household sewage and pump it directly back to residents.

Other cities facing shortages have been keeping a close eye on the program in case they have to adopt similar measures.

"The water is now cleaner and clearer than the water that came just from our lakes," said City Manager Darron Leiker.

The system has been thoroughly tested and carefully monitored to make sure the water stays clean, he said.

The city that bakes under the hot Texas sun has banned lawn watering to save water. It has tried to seed clouds to bring about rain and use chemicals in reservoirs to slow evaporation.

"We don't have any alternative sources. We don't have ground water. We can't build a pipeline to a reservoir that is close to us," said Russell Schreiber, the city's director of public works.

But Sabrina Hayes said in a letter to the local Wichita Falls Times Record News she had no plans to drink the water.

"I do not wish to come into any contact with what we refer to as 'peepee' water," Hayes wrote in a letter to the editor.

(Reporting by Marice Richter; Editing by Jon Herskovitz and Eric Beech)