The Mt Isa council has spent $4 million on new equipment to keep their water flowing.

There has been some criticism of the decision to spend millions hiring equipment, but the council says water quality must be maintained.

A near-complete lack of rainfall has resulted in blue-green algae outbreaks, pushing levels in the city's main water supply, Lake Moondarra, beyond reasonable limits.

The local water board has been forced to hire treatment equipment at a cost of more than $250,000 a month to protect the city’s thirsty residents.

Mayor Tony McGrady says the high price will be borne by ratepayers.

Mt Isa residents will see water rates increase by around $440 per household, when the bills come in next financial year.

Local Jays Real Estate agent Sophie Keilyhas told Mt Isa’s newspaper, The North West Star, that locals are used to this kind of spending, downplaying the risk that residents and investors may be looking to move somewhere less parched.

“They [investors] probably won't be happy but we've been pre-warned and it's been building for a while,'” she said.

“Costs in Mount Isa can be very high anyway so it's just another slug really.”

Mayor McGrady has called on state and federal governments for financial help.

He says higher levels of government should realise the plight they are in.

“We will simply tell them what the facts of life are and that if this city is to continue, which it will, but if this city continues to pay the royalties and the other costs to the State Government throughout the mining industry, governments have to ensure the survival of our city,” he told the ABC.