I have a similar model.
First - replace the bottom charcoal pan with a grill wok. This is the best investment you will make for your smoker.
I run mine without any water in the pan. Temps go up and I don't have any complaints on the finished Q.
The temperature gauge on the front of my unit was of 40 degrees. When smoking a Boston Butt I use two remote temperarture probes. One in the meat and the other stuck through a potato and put on the top rack near the vent. I drilled a small hole through the side of the smoker and run the probe wires up to the top of the smoker. I just set a block of wood on the top of the smoker to isolate the gauge body from the heat of the smoker.
The height of the racks and the water pan on my smoker are adjustable. If you raise the water pan higher off of the charcoal, temperatures will increase.
Using lump charcoal, you should be able to maintain 250 degree temps without any trouble. On mine, I run with the top vent wide open and one of the bottom vents closed and the other just slightly open.
Hope this helps.