People using "too much" water on their gardens and lawns could force Dubbo Regional Council to introduce level five water restrictions.
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The local government area is currently on level four restrictions with a target of 280 litres of water use per person, per day. But council data shows the targets are being exceeded.
Council chief executive officer Michael McMahon said there was a huge increase in the amount of water being used on Sundays, particularly between 6pm and 3am.
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"Sometimes that level of water is twice as much as what they would use on other days so we know people are expending too much water on their gardens and their lawns," he said.
Under level four, gardens and lawns can be watered for a maximum of 30 minutes on Wednesdays and Sundays, during the cooler parts of the day.
Those who breach the restrictions risk an on-the-spot fine of $220.
"We're hoping people will see that type of behaviour isn't tolerated and secondly, it does push us down the path of possibly pushing us to higher water restrictions, which we don't want to do," Mr McMahon said.
The CEO said council hoped to stay on level four but people weren't complying with the restrictions.
He said ultimately, the trigger for level five restrictions would depend on the level of water in the Macquarie River. If it "ran dry", council would have to decide when level five water restrictions were introduced.
Council hopes the fines will help deter residents from using extra water, with Mr McMahon comparing it to NSW Police using double demerit points to prevent bad behaviour on the roads.
"At the end of the day, we're all in it together. We're all saving the water together and we've got to act together in ensuring we don't get to a point that we have to escalate the water crisis even more," he said.
Under level five water restrictions, the daily water usage target is reduced to 240 litres per person, per day. Lawns can no longer be watered, while gardens can only be watered for a maximum of 15 minutes on a Sunday.