Kaitaia's perception that it has an unlimited supply of water is one of the challenges facing the Far North District Council in terms of maintaining the supply according to a water strategy reported presented to the council in August.

"The expectation that customers can use unlimited potable water in the depth (sic) of summer is outdated, and education of the community about water conservation, inside and outside the home, is needed to improve the perception of our service," the report said.

Elsewhere it described Kaitaia customers as conservative users of water, however, consuming a daily average of 202 litres per person, compared with the national average of 260 litres.

There were other problems, however, including a substantial unexplained loss of water between the river that supplied it and customers' meters.

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A large portion of Kaitaia's water reticulation was built in 1969, and much of it was still being used, the report said. Those pipes were reaching the end of their life, and as a result Kaitaia had the greatest unaccounted for water losses in the district, although unaccounted for water could also be attributed to faulty billing meters and use for firefighting (including training).

A recent investigation had found no significant leaks, while 3.5km of pipes had been replaced over the last four years and hundreds of new meters had been installed to minimise any error in sales figures.

"The improvement one would expect from those projects has not eventuated in this case. It would appear that the rate of deterioration of the network and/or meters exceeds our ability to renew them," the report added.

Over the last three years, 30 per cent of water "produced" was not accounted for in billing.

Meanwhile the report identified two issues that needed to be addressed — that "exiting" from the Kauri Dam would further degrade the town supply's limited resilience, meaning that the resilience of the remaining sources would have to be improved, and that the treatment plant was reaching capacity during peak demand (mid-December to mid-January).

Key contributing factors were increased residential demand in dry weather (customers generally feeling entitled to make outdoor use of water in summer; Juken NZ's mills using approximately one-sixth of the plant's capacity (the equivalent of 1200 households, while a total of 20 customers used more than 10 times the household average); and the unaccounted for loss of water.

The report noted that the council held a consent to take water from the Aupouri-Sweetwater sub-aquifer, at a maximum of 5000 cubic metres in any consecutive 24 hours, or a daily average of 4000 cubic metres. If Council it did not implement the consent, it would lapse.

A request for a two-year extension to the original lapse date (March 2017) had been approved by the Northland Regional Council, but if a further extension was not granted the consent would lapse on March 8 next year.

The consent was due to expire in November 2031.

Meanwhile drought scenarios placed Kaitaia's water supply at some risk, albeit of non-compliance with the conditions of the resource consent authorising the water take (from the river), as opposed to actually running out of water.

"Whilst the prospect of recurring non-compliance needs to be addressed, the risk is not of a severity that would warrant an immediate investment in an alternative water source," the report said.

Since the 2010 drought, the river flow had twice fallen below the consented limit, during the 2013 drought (nationally the worst in 70 years), for a total of three days over autumn, and in 2014, when localised dry conditions resulted in a drop over a continuous period of nine days.

"These more recent events are considered minor in nature, and NRC at the time did not deem it necessary to issue water shortage directions as a result of the minor non-compliances associated with the river flows," it added.