Goulburn Mulwaree Council acted after vision of the theft emerged.

A spokesman said the filling of tankers from hydrants presented a high risk to water quality as there was no protection against backflow from the tanker into the main.

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"This places our customers at high risk of contamination. The council has three designated fill points in Goulburn and one in Marulan that allow tankers to fill at locations that have backflow protection to protect the water supply from cross contamination," he said.

General manager Warwick Bennett said it was theft not just from the council, but the community as well.

"Our ratepayers pay for the use of water and it's upsetting to see a company taking water from a fire hydrant which is there for the safety and use of firefighters or the council only," he said in a statement.

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"The risk to public health is what is really frustrating, as this could potentially be dangerous for our residents if it occurred."

The council confirmed the company had been fined but would not release the amount.

It followed another water theft from a fire hydrant last November. At the time, Mr Bennett said takers were "pulling up in the dead of night," stealing potable water and then selling it at cost.

Back then, the city was on the verge of water restrictions. But subsequent rain has recovered water stocks. On June 30, Goulburn's usable storage sat at 94.7 per cent, a council report stated.

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Special connections are required to take water from the hydrants.

The organisation is asking the community to report sightings of people, other than the council and fire brigade, taking water from fire hydrants. They can do so by calling 4823 4444.

"If you can take a photo with a mobile phone that would be very helpful," a spokesman said.

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