Upper Lachlan Shire Council hopes to have a new water filtration plant installed at Taralga by February.
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The negotiations to purchase the equipment followed a fire that destroyed the town's water treatment plant on December 8. General manager Colleen Worthy said it was started by an electrical fault.
Taralga has been placed on level three restrictions ever since and up to 240 kilolitres trucked from Crookwell daily to meet residents' needs.
But Mrs Worthy said the $3420 daily cost of doing so was unsustainable.
"There is some financial assistance for water supply available from the Department of Planning, Infrastructure and Environment (DPIE) for consumption below 100 kilolitres per day and this is only available for a short duration," she said.
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The Post has asked how much state financial assistance the council is receiving.
Meantime, it has held talks with state authorities about a permanent plant replacement.
Mrs Worthy said on Wednesday, December 16 the council secured the purchase of a new ultra filtration plant to be transported from South Australia and installed.
"State regulatory authorities will be required to approve the plant but the council is confident it can meet any requirements set for installation," she said in a statement.
"(We) aim to modify the site and install the plant and ancillary equipment, and have it operating by early February, 2021. Once the plant is in place and operating successfully water restrictions will return to level one until the new or repaired dam is constructed."
A report to Thursday's ordinary meeting asks councillors to give her delegated authority to buy the plant and to do so without going to tender. The NSW Local Government Act allows the latter in emergency cases.
But no cost is mentioned. The Post has also asked for the agreed price.
Mrs Worthy's report stated the financial impact could not be quantified at the time of writing as variables including state subsidies for water carting and emergency assistance for part of the plant's replacement were unknown. In addition, the council had lodged an insurance claim following a property loss adjustor's inspection. It is also seeking government grants.
The GM said the choice of the South Australian plant followed investigations last week into the hire or purchase of a replacement.
But these revealed that most hire plants were for mining and industrial water and not potable supply, or were too expensive to relocate.
"The DPIE estimated the hire time could be as long as two years to align with the construction of a repaired or new dam, making the price of hire cost prohibitive," Mrs Worthy said.
"Unfortunately the plant that was destroyed at Taralga is no longer available to hire or purchase. Any hire or new plant construction requires alterations on site to the council's plumbing and electrical system to align with the new plant."
It aims to have the new filtration plant installed and running by February, 2021.
The council will clean up the site and remove the destroyed plant once insurers provide clearance.
Meantime, negotiations are underway to replace the town's water storage dam and boost capacity from 30 megalitres to 50Ml.
These followed a draft engineer's report in October which found leaks and erosion in the structure had been occurring for some years and put it at risk of failure. The storage was drained to 30 per cent to prevent this happening.
Mrs Worthy said talks had occurred with several landowners with a view to relocating the dam but all options were being considered. This included its repair.
"(However) we have been advised by the dam safety engineer that the cost of repair and reconstruct according to legislation would more than likely cost more than a newly constructed dam," she said.
"The council is also seeking financial assistance for a grant that closes at the end of January, 2021 when detailed plans and costings will be calculated. If this grant is successful it will assist council financially to construct a new dam.
"There are still a number of steps required as potable water supply is heavily regulated to ensure it is safe to drink and its supply is secured.
"Council will seek the advice and approval of DPIE, which will entail submitting detailed designs which then require independent approval. But( we) will do all it can to expedite each step."
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