I have a 3 rack system, the lowest for a water pan. From the lowest rack to the top of the drum is 16 1/4". From the lowest rack go up 6" and drive a hole for the middle rack. Then 11" up from the lowest rack, for your highest rack.
With this system I have been able to smoke just about anything including a turkey w/ a water pan. Good Luck!
BTW just my 2 cents, I won't use a water pan or diverter anymore. I would use it for beans or a side. Last time I used my smoker, I made 3 racks of BB ribs. And water was dripping out of the intake pipe. So I no longer use a water pan, BUT I was told to use one if I am smoking ONLY breasts (chicken or turkey) otherwise it does not need it.