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The Otago Regional Council (ORC) announced it will hold public consultation on three possible methods for the lake’s remediation later this year.
Some of the proposals could cost hundreds of thousands of dollars over a 10-year period.
Deputy chairwoman of the council’s technical committee, Cr Ella Lawton, said the local authority wanted to ensure the "council and community have a common vision for the future" of the lake and overall management of the catchment area.
"As part of our long-term plan process we’ve had strong feedback that progress towards remediating Lake Hayes water quality is an absolute priority for the local community.
"We’re happy to say that we’re making good progress.
Nutrients in the lake bed have caused algal blooms to spread, as a result of phosphorus residue from fertilisers previously used nearby.
The technical committee discussed the three possible methods — flushing, capping and destratification — at a meeting this week.
The flushing scheme would involve installing a pipe to carry Arrow irrigation water to Mill Creek to increase flows into Lake Hayes.
Under the proposed capping scheme, chemicals would be used on the lake bed in an attempt to stop phosphorus rising into the water and causing further algal growth.
The process of destratification would involve mixing up water layers in the lake by using air compressors.
Flushing and destratification were estimated to cost about $400,000 over a decade and capping was expected to cost between $90,000 and $550,000.
Council chairman Stephen Woodhead said none of the methods offered a quick fix to the problem.
"The potential methods are long-term approaches — we’ll be looking at a decade or more to see significant progress."
The Friends of Lake Hayes Society has warned that further development in the catchment area would only increase contamination levels if the correct infrastructure was not installed.
Freshwater ecologist Dr Marc Schallenberg said both Mill Creek and Lake Hayes already failed to meet water quality levels set by the Government and the ORC.
Other initiatives approved by the ORC included a lake monitoring buoy and a detailed study of the catchment’s inflows, as well as initial works towards the proposed flushing method.
Gavin Palmer, the ORC’s director of engineering for hazards and science, said with works soon to be carried out at Millbrook Resort, "an opportunity presented itself to put some infrastructure in place, sooner rather than later".
"Funding for the pipeline, which would be put in place in the coming months, was approved as part of the long-term plan process."
No date was set for the consultation.