Water tests have been carried out regularly across Kawerau to monitor the quality of the town's water supply. Three days ago it tested positive for E. Coli, a bacteria commonly found in faeces.
Mayor Malcolm Campbell denied spoken suggestions the results were due to an ageing infrastructure.
"The most important thing is the test came about by normal sampling, it had positive reaction," Campbell said.
"It had nothing to do with daily basis, something has happened in the system and we are taking it very seriously."
The presence of E. Coli in the town's water supply meant residents were told to boil their water until further notice. That notice was lifted this afternoon.
Water engineer Hanno van der Merwe said they were trying to pin down the source of the bacteria, however he ruled out the likeliness of the reservoirs, the newest being more than 30 years old, being the problem.
"For this specific incident, it's not impossible but very unlikely the infection came from the roofs - we only found a high count in the one reservoir." Van der Merwe said.
"It's unlikely the reservoirs were responsible, nevertheless we are continuing the work to ensure they are improved. That's required for the years to come."
Three days of testing have now produced clear results, residents have now been given the all clear to stop boiling water. However, Campbell is determined to invest in improving the older reservoirs.
"We don't want to be [boiling water] every two or three weeks, our engineers are working diligently to work out what's gone wrong - we don't think it's a water supply problem," Campbell said.
"Our testers do a pretty good job, but they're still done by man, so maybe we need to account for the 'human factor'. It's not the nicest time of year to start mucking around with people's water, but we will spend the money - we knew we would be up for $10 million to $15 million anyway, we're just bringing that forward."