THE cost of the Lake Wallace Dam, which will deliver a secure water supply to the residents of Nimmitabel, has blown out to more than $3 million.
And the final figure could be more as it is still not known the cost of environmental offsets.
Initial estimates in 2009 put the cost of the Cooma-Monaro Shire Council project at $1.103 million for the construction of a 320 Mega Litre dam at Lake Wallace.
That figure now stands at $3.522 million and will increase when council finds out exactly what the cost of the environmental offsets will be later in the year.
The figures were released at a community meeting in Nimmitabel on Wednesday. It was hosted by council to inform the residents of the status of the project.
Mayor Dean Lynch said about 20 residents attended the meeting and some raised concerns that the project may not go ahead.
"They've been talking about this since the 1980s. They were concerned this was going to be going on for another 20 years," he said.
"I gave assurances I would represent the community of Nimmitabel as strongly as I can."
Cr Lynch said council would seek government funding for the project.
The final cost would not be known for a few months when the environmental offsets could be determined in November after a particular type of flower had bloomed.
"In the original costings there were a lot of things not allowed for," he said.
"Final costings will be known before Christmas.
"The figure of $3.5 million doesn't allow for environmental offsets."
The 320 Mega litre reservoir would give the 240 residents of Nimmitabel secure, and reliable water supply.
Water is currently pumped out the McLaughlin River and when conditions are dry there is bore water back up.
Council found there was a need for a secure water supply in the village as the existing water supply system was insufficient to meet the current and future demands during drought or prolonged dry periods.
Already $700,000 has been spent on feasibility study's environmental assessments and a detailed site survey, with $464,000 of that funding provided by the federal government.