Wagga's long-standing water issues at Lake Albert could be closer to being solved following an agreement between the City Council and NSW government.
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A spokesperson for NSW Water Minister Melinda Pavey said she had a "very productive" meeting with Wagga City Council in Sydney on Tuesday.
As a result of the meeting, the council will work with NSW Department of Planning, Industry and Environment (DPIE) for a proposal to raise the lake's water level.
Ms Pavey's spokesperson said she "looks forward to receiving the council and DPIE's proposal for the future of Wagga's water supply".
Wagga Independent MP Joe McGirr said the city's residents "should take heart" from Tuesday's developments and said the council was "working very hard for a solution to a very complicated problem".
"We spent nearly an hour with the minister and I think we have found a way to move forward," Dr McGirr said.
"Clearly there is detail to work out but I do think there is a genuine willingness to work at this and we have made some progress on understanding what is happening."
Wagga-based Nationals MLC Wes Fang was also at the meeting in Sydney and said the council and DPIE would return to the minister with a joint proposal for consideration by the end of the month
"I'll give credit to [council general manager] Peter Thompson, who has been steadfast in his advocacy," Mr Fang said.
"I have also been behind-the-scenes with the minister's office and the Deputy Premier's office. The Deputy Premier [John Barilaro] has taken a very keen interest in the issues of the lake and has looked to assist in achieving an outcome."
The lake's low water level and blue green algae blooms have impeded recreational use and resulted in the city losing out on a major waterskiing competition.
Tensions over the decades-old problem came to a head last month when several people installed an unauthorised shutter over a drain to keep rainwater in the lake.
Dr McGirr said he could "understand why people are frustrated" about the lake.
"The lake is absolutely critical to the people of Wagga...to the credit of the current council, they have been working on a solution and come up with a very sound concept.
"The government and the department wanted us to look at some alternatives, they're not sensible or practical, and I think today we have been able to resolve that with them."
The council had planned to request Ms Pavey use her ministerial discretion to grant a specific purpose access licence for 5000 extra megalitres to top up the lake.
That plan would give the council credit for effluent currently discharged in the Murrumbidgee River and then allowing it to pump one third of the equivalent water into the lake.
Lake Albert Forum member Garry Williams said he had hoped the council would have been granted permission to start work immediately as the lake was in "dire straits".
"It is currently not a resource for the community except as a stretch of water to walk around," he said.
Wagga mayor Greg Conkey has been contacted for comment.
Mr Fang said the meeting reached an understanding that the council's proposal to claim credit for effluent water returned to the river "needs further refinement in order to come back to the minister".
"We are going to work with the council and some very senior and expert people from DPIE to ensure that what comes back to the minister is something that is feasible, not only from Wagga's perspective, but the system's perspective," Mr Fang said.