The concern comes as the Dunedin City Council has predicted water bills will double in the next decade to an average of $4200 per year.
Grey Power Otago president Jo Millar said should it reach that level it would be "fundamentally unaffordable" for those on lower or fixed incomes.
"This is another little thing that's come out of the woodwork, and all of a sudden we're going to have to find other ways of doing things.
"I don't think they understand the real post-Covid everyday cost of living that's being incurred by people.
"So the current cost of living we've got is bad enough, and it's scary to think what we're going to be going into with this water situation."
The council needed to be restructured with fewer management layers, she said.
Ms Millar also said the council’s planning documents and explanations for proposed changes to aspects such as water ownership were "too corporate" and needed to be written in plain language.
"We, the average person who's going to be paying for all of this, have to understand what we're voting for.
"I do not believe that the information we get ... is worded in everyday language."
Victoria University of Wellington senior research fellow Max Rashbrooke said New Zealand’s infrastructure was at a tipping point and "someone has to pay", but pressure in the past to keep rates low had led to a nearly impossible position.
"You know, we've stolen from the future in order to prop up the present.
"So the money has to be found from somewhere."
Mr Rashbrooke said the local government ratings system was "not progressive".
"Obviously, some of the burden has to fall on ratepayers, but I do think rates are a pretty blunt tool.
"Compared to central government taxation, they load more of the burden on to poorer households.
"Richer homeowners do pay more, but they're paying essentially the same proportion of the value of their property."
Central government should be investing more in local water infrastructure, rather than leaving it entirely to councils and communities, he said.
Dunedin Mayor Jules Radich said he too shared Grey Power’s concerns, and the council was doing all it could to keep costs down.
"We're in a position where we have to improve our water situation.
"We can't afford to end up like Wellington, where you've got leaks shooting out of the ground on a regular basis."
Mr Radich said a balance had to be struck.
"Everybody wants to have no rates rise, no debt and services imaginable: Community amenities and tip-top infrastructure and services that go with it."
Council infrastructure chairman Cr Jim O’Malley said he sympathised with Grey Power’s concerns.
"Honestly, the reality of it is this is effectively an extension of a lot of government policy for years, which is to push all the costs on to the house.
"Unfortunately, the council ends up being blamed as if they are the person doing it."
Asked if the council had lost touch post-Covid, Cr O’Malley again called for perspective.
"Well it would be very nice if the Reserve Bank hadn't negative geared the economy in front of us all.
"The fact of the matter was everybody was facing external inflation rises and that came directly into our infrastructure costs because of the price of steel and oil and gas and all that stuff all shot up.
"So what do you do in that environment?"
He also promised the draft LTP would come in two-versions.
"There will be a relatively low-information, easy-to-read consultation document and then another one which has got substantial lot of detail in it for those who want it."
