Hilltops mayor Brian Ingram says council has "no ability" to apply for funding from the NSW Government's Safe and Secure Water Program to help fix Young's 70-year-old water system, despite Member for Cootamundra Steph Cooke's encouragement.
A main break on Berthong Street on Monday created widespread water discolouration across town, one business closing its long weekend operations as a result.
An Edwards Street resident said it was the third time in six months her home had experienced brown water supply.
MP Steph Cooke said upgrade work must be initiated by Hilltops Council.
"Maintenance of water infrastructure falls within Hilltops Council's area of responsibility and any maintenance or upgrade work must be initiated by them," she said.
"The NSW Government has a program available to assist with the cost of water infrastructure work and Hilltops Council has successfully applied for funding in the past."
That program is the State Government's Safe and Secure Water Program.
However Hilltops mayor Brian Ingram says he's been advised it won't help with renewal work to Young's water system.
"Sadly I have been advised that there is no ability to apply for this type of work to be funded under the current program guidelines," he said.
"I am aware that the fund is there for major upgrades to treatment plants for both sewer and water but not for the renewal of the sub-ground pipe replacement that we need."
Mr Ingram said the large backlog of infrastructure needs across Hilltops, which they "inherited overnight", was the biggest hurdle for the merged council.
He believes there was opportunity to support projects, like Young's water reticulation system, through the amalgamation funding pool, however he says council was restricted by the State Government on how money could be spent.
"Instead, the administrators were left to allocate these funds to community projects that council must now deliver. Whilst these projects support valuable community activities, our essential assets still remain vulnerable," mayor Ingram said.
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