Click right and choose 'Select Event'. Then click on Environment/Scenery/Water Level. At the right side there are some parameters. On 'Instant' you can choose if you want the water slowly rising up or suddenly be there when you touch the water event. 0 is slowly rising up (I think) and 1 is being there. Now press OK. Then go to Layer 4 and position the mouse on the height where you want to have the water (as you may noticed width doesn't matter). On the right bottom corner you can read your current position. It looks something like this: 6,4. The first number is the width, the second one is the height. Now rightclick on the position where you placed your water level event and fill in the second number in 'Height'. Now in the game, when you touch the water level event the water will appear as high as you selected in 'Height'. I hoped that helped you, if you have anymore questions feel free to ask.