In the past six months, below average rainfall and an unexpected blue-green algae outbreak has affected the supply of water available to Mount Isa residents.

Not only do we have less water, but it is getting more and more expensive to filter and supply it.

This month, the Mount Isa City Council warned ratepayers they would have to pay a $440 levy or utility charge to keeping its water up to Australian drinking water standards.

 The North West Star  sat down with the Mount Isa City Council and the Mount Isa Water Board  to explore where these costs came from and what got us to this point.

? WATER RESOURCES

?MOUNT Isa City Council buys water from the Mount Isa Water Board, and is one of its three major clients.

Potable water for drinking and operational water for the mine is generally pumped from Lake Moondarra, and supplemented by water from Lake Julius when capacity at Lake Moondarra hits 20 per cent.

Mount Isa's water supply is uniquely controlled by a category 1 water authority (the Mount Isa Water Board) rather than the council.

Our two major water supplies aren't owned by the city either.

Lake Moondarra is owned by Xstrata (now Glencore), and Lake Julius is owned by the state government.

Water from Lake Moondarra is treated naturally in the water board's Clear Water Lagoon, before being disinfected with chlorine and pumped to the city's edge.

The water board's chief executive Greg Stevens said the natural process was a relatively cheap way to filter water, and was stumbled on by accident when the resource was developed.

MOUNT ISA

WATER BOARD

?GREAT confusion exists within the community about the function of the board and its responsibilities.

Its chief executive Greg Stevens said the bulk water supply business was owned by the state government and governed by The Water Act 2000.

Mr Stevens said that as a business, the water board was expected to operate efficiently, effectively and make a profit for the state government.

``We make a profit most years, not every year, and we pay taxes and dividends to the state government, who have historically passed that on to council,'' he said.

Mr Stevens said it was often hard for the public to separate the water board from the city council because decisions and changes it made directly affected decisions at the local government level.

The water board operates and maintains $100 million worth of infrastructure to supply bulk water from Lake Moondarra and Lake Julius to the Mount Isa Terminal Reservoir.

Water charges are based on a user-pays system and when a customer uses the board's infrastructure it has to cover those costs.

Mount Isa City Council said it was charged a monthly fixed cost to cover its use of the board's infrastructure, as well as a forecasted price for the amount of water the city used in each financial year.

 WATER SHORTAGE

?MOUNT Isa was formally drought declared in May 2013, and received a poor wet season about March this year.

Mr Stevens said Lake Moondarra started this season at a historic low level, a trend that Mount Isa had not seen since drought years in 2007 and 2008.

He said plots kept by the water board showed that on average the city could only rely purely on Lake Moondarra's resources for two out of every five years.

``There's enough water in Lake Julius to last us until March or April next year at our current pump station, and we're investigating mechanical changes to that that will take us through to the next wet, but that's going to be a pretty dire situation then,'' Mr Stevens said.

Mount Isa uses an average of 20 gigalitres a year, but Mr Stevens said water restrictions and local conservation efforts could see that number reduced to 17 gigalitres.

``At this stage, we are forecasting a 15 per cent water saving against forecast for the year ending June 30, 2014,'' he said.

``Most of this has been in the last three months, where we have seen a reduction of about 25 per cent.'' 

Evaporation also sucks up an average of 11 to 13 millilitres every day from Lake Moondarra.

Level 3 water restrictions have been in place since November 2013, and the council has announced further reductions in the amount of recycled water available for community use.

Mount Isa Mayor Tony McGrady said he understood why people wanted to continue using their 900 kilolitre allowance that their current water rate covered.

However, he said the faster Lake Moondarra's supply was used the sooner the city would face a $1 million bill to start pumping from Lake Julius.

Even if residents reduced usage across the city, the price of our water from both water sources has increased dramatically after the most serious blue-green algae outbreak the city has ever seen.

?vp+4??tfhelv??ps11? ALGAE OUTBREAK

?vp+1??tfutopia??ps9.5??hp0?LAKE Moondarra's natural filtration system, Clear Water Lagoon, was immune to natural blue-green algae outbreaks for the past three decades, but last year's bloom broke all of the records.

Mr Stevens said that at the outbreak's peak, the water board measured five-million bacteria in one millilitre of water.

Hotter than average temperatures, low rainfall and a higher concentration of nutrients in the water led to one of the most serious outbreaks of the bacteria in both Lake Moondarra and Lake Julius that he had ever seen.

``In that period last year, for some reason, it just went bananas,'' Mr Stevens said.

``We got in a guy from the Australian Water Quality Centre and the guy who wrote the book on blue-green algae, and had them up here for a month.

``They said there was basically little we could do to control it.'' 

The North West Queensland Hospital and Health Board was notified, and the city was in crisis mode, but Mr Stevens said little more than odour complaints were received from residents accessing the water supply during this time.

He said dosing the lakes with an algaecide was not an option, and that was what led the water board to start leasing an ultrafiltration plant that the council claims will cost the city $3.2 million plus operating costs in the next financial year.

ULTRAFILTRATION

SYSTEM

IT WAS revealed to ratepayers this month that the cost of leasing the ultrafiltration system would be passed on in full to the council.

Mount Isa Mines and Incitec Pivot have already started pumping water from Lake Julius, but neither customer needs the ultrafiltration plant to treat its operational water.

Cr McGrady said the ultrafiltration unit cost $250,000 a month to lease, and would clock up an extra $12,000 in operational costs during the next 12 months.

This equates to a bill of $3.2 million the council didn't factor into its budget, and will have to recoup in the next round of water rates.

Cr McGrady vowed as soon as the lake levels rose and blue-green algae blooms were contained, the proposed levy would be removed.

However, Lake Julius is still affected by blue-green algae even though it is 80 per cent full.

Mr Stevens said the back-up supply was still likely to need ultrafiltration treatment by the time it was accessed later this year.

``It's still spiking along,'' he said.

``The toxin levels aren't high, but the cell counts are moderately high.

``We've basically advised the supplier that medium to long term we're probably still going to need them [ultrafiltration plant] - and that's up to 12 months.'' 

 THIS YEAR'S WATER BILL

THE price Mount Isa residents will pay for water is based on the cost of having clean drinking water, pumping water when our closest supply runs too low, and paying the actual cost of the water we used in the last financial year.

Additional water rates costs in 2014-15 were:

$3.2 million - ultrafiltration costs

 $1 million - pumping charges for Lake Julius

$1.6 million - extra water charge based on Mount Isa's actual usage (True Up Cost) 

??  Total: $5.864 million

 If you're confused about why we're paying another $1.6 million in ``True Up Costs'' on top of pumping and filtration costs you're not alone.

The council described this as an additional charge passed on this year by the water board, but Mr Stevens said it was a charge the council payed every year.

Simply put, the council is charged for the amount of water it expects to use every year.

If the city uses more, the council is charged extra and if it uses less, it is paid back the difference.

Together, all of these costs have added an additional $5.8 million to the budget - and someone has to pay.

The $440 water levy or ``utility charge'' we are expected to pay on our next water rate is hoped to cover this cost.

Cr McGrady said the reason he wanted to impose a levy or separate utility charge was so future councils would not be tempted to leave it in the rates to recoup more money.

``My concern is that if we just added the $440 a year to the water rates it would always remain there and future councils, no matter what their views are this month, in 12 months time they'd be very reluctant to drop that,'' he said.

``We're not using this as an exercise to get extra revenue for council, it's there because these costs are outside the control of council.

``Once we have the water supply and get rid of the blue-green algae we'll drop the levy.'' 

? MOUNT ISA WATER

BOARD DIVIDEND

??CR McGRADY also announced this month that Mount Isa would miss out on a $2 million dividend of water board profits it expected to get from the state.

From 2000 until 2011-12, all of the dividends and taxes generated by the board were passed on to the council by the state government.

Cr McGrady said that when he was elected as mayor he found $4 million in unclaimed water board dividends and he used that money in the 2012-13 budget to freeze rates and absorb increases passed on by the board.

The Newman government abolished this payment in 2011.

Cr McGrady said he met with Water Minister Mark McArdle and the Premier soon after to convince them to phase the dividend payment out across three years.

``Rather than lose it, they phased it out over three years. That was a big win for us because it meant us getting about $6 million we probably wouldn't have received,'' he said.

The last year the council will receive a share of the dividend will be 2014-15, but Cr McGrady said he wasn't factoring the last payment into his next budget because he didn't expected the water board to make a profit next year either.

The dividend money received by the council has been used to balance the general rates budget in years past.

The council will still receive $900,000 from the government at the end of this financial year even though the water board forecasted it made little to no profits because of the blue-green algae outbreak.

LONG-TERM PLAN

?LEASING filtration equipment comes at a significantly higher cost than having a plant of our own, but the debate over whether we need a permanent filtration plant is still raging.

The water board has already started a water treatment plan options study and will work with Mount Isa Mines and the council to come up with a suitable design.

Cr McGrady said the council wasn't prepared to spend money on a filtration system the city might not need.

``The reality is that we'd have to borrow $30 million, not the water board, we would have to pay for it and chances are we would have wet seasons for the next 10 years,'' he said.

``We'd be abused for spending $30 million on a facility which had never ever been used.

``We've taken a gamble and said to the water board now that we'll pay these costs in the hope that in future years we'll get a decent wet.

``We'll run the risk of saying no and just leasing this in the hope that it rains.'' 

Mr Stevens said the board was in the same catch-22 situation, but based on last year's outbreak and the failure of Clear Water Lagoon to avoid infection, it was a risk worth taking.

``The fact that it has occurred has demonstrated the risk particularly over that period where we didn't have a good control system in place,'' he said.

``We need a reliable system to manage these outbreaks and a proper water treatment plant would be a good way to go.''