Cloudy water as a result of snow melt and heavy rainfall in the catchment has meant the town's water users have had to boil their drinking water 52 days out of the past 260.
"The community has become increasingly frustrated at the frequency and duration of boil water notice events and are seeking improvements to the water supply to eliminate or minimise it," council water services manager Russell Bond told the Maniototo Community Board.
`The board considered a report by Opus International Consultants Ltd environmental engineer Greg Birdling which outlined the issues and possible solutions.
The supply comes from a water race that originates from Hoffmans dam, supplied from the Eweburn, and flows through the Naseby Forest for 2.2km. When it rained, the race collected surface run-off, lowering water quality, Mr Birdling said.
He said an additional treatment stage - a clarifier added upstream of the filter to remove the worst of the turbidity - could provide the greatest improvement.
A rough estimate of costs for that stage was between $150,000 and $200,000; he recommended the board investigate that option in more detail.
Other options included constructing a new settling pond ($75,000-$100,000), taking water from the Kyeburn dam ($250,000-$300,000) or using an existing pond ($30,000-$100,000).
The board would have to upgrade the water supply to meet the revised Ministry of Health drinking water standards, so any solution needed to meet that standard as well, Mr Bond said.
Spending $150,000 on the project would add $30 on to the water rate for each connection, while spending $300,000 would add $35 to each water rate.