A below average wet season and minimal rain predicted for the coming months could see Mount Isa faced with water shortage implications and 'skyhigh' costs.
Costly charges for pumping from Lake Julius, restricted recreational activities and severe water restrictions will likely affect the community from June this year.
In discussions with the Mount Isa City Council, Mount Isa Water Board chief executive Greg Stevens said based on current forecasts, the water levels at Lake Moondarra were likely to drop below 40 per cent by the end of June.
The water board has advised the council that 'once Lake Moondarra reaches 40 per cent on 1 July, 2013 (on current forecast)', the council's water allocation would be reduced by 50 per cent of the current allowance and pumping water from Lake Julius would be likely.
Mayor Tony McGrady said once the water board start pumping from Lake Julius, 'the cost of water in this city goes skyhigh'.
"It costs us approximately $800,000 per year in additional costs for water when it is pumped from Lake Julius," Cr McGrady said.
That could mean as much as $114 per household, based on 7000 households in Mount Isa, however the council said it would be 'almost impossible to give an exact figure at this stage'.
Following the discussion, the council approved plans to action stage two water restrictions throughout the city.
Mount Isa Bureau of Meteorology field office manager Scott Adams said looking at long-range forecasts, he did not expect much rain in the coming months.
"For the next three months we're not expecting anything of significance in the North West," he said.
"The chances for substantial rain are somewhat remote - but unusual weather events do occur - although we're actually on track for our driest year on record since the sixties."
Residents would be further disadvantaged by restricted recreational activities if levels dropped to 20 per cent - the level deemed unsafe for boating by the Mount Isa Water Board.
However, Moondarra Fishing Classic co-manager Lyn Holmes-Kidd said there would be some good news for keen anglers, as low levels sometimes meant good fishing.
"There are people who are of the opinion that when the lake levels go down there are less places for the fish to hide, so they think that's an advantage," Mrs Holmes-Kidd said.
"But people need to be careful with possible obstructions in lower levels and if motorised boats are restricted, people can look at using paddle craft, or fish from the bank."
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