Murrah residents have shared their concern over water use for Bega Valley Shire Council roadworks at Barragga Bay.
One resident, who wished to remain anonymous, said a council truck had been pumping water from Brockelos Creek for two weeks.
They said they were concerned the water source may be negatively effected by the pumping given the current drought conditions.
Despite the drought concerns, council said the creek is a licensed water point, and the use of town water would come at a financial cost.
"Bega Valley Shire Council is mindful of the current scarcity of water in creeks and other natural water sources, however Brockelos is still flowing and a licenced water point," council said.
"The only alternative to using water from Brockelos for this grading work is to cart in potable drinking water from either Tathra or Bermagui, which would come at a considerable cost to the community."
The state government controls the use and flow of all water in rivers, lakes and aquifers, and in water sharing plan areas, licences allow for the use of water from a specified source.