A council community water forum at the Orange Civic Theatre on Thursday was told tank rebates rises were being considered.

After the meeting council spokesman Nick Redmond said a report would go to council in a few weeks.

He said it would mean the top rebate, for people with large tanks [more than 5000 litres] that were connected to household utilities such as a toilet or washing machine could recoup up to $1000 from council. The current top rate is $750.

And even people with small stand-alone tanks would see rebates rise from $100 to $125 if a 25 per cent rise was approved by council.

Only about eight rebates have been claimed and approved in the past seven months and the move would encourage more people to get tanks to save water in the drought.

About 30 people attended the second of the public forums.

Residents asked council officers about a range of water issues extending from whether council had looked at using water from mines at Lucknow and Browns Creek to seeking explanations about council's water arrangements with the Cadia mine.

Council technical services director Ian Greenham said council had been in discussion about using mine water but they were concerned taking water from Lucknow could cause mine subsidence.

He said the Browns Creek mine, currently owned by Australian Natives Landscapes, was a better prospect that could produce one or two megalitres of water for Orange a day.

Residents were also concerned about why council was allowing the construction of more homes in Orange when water was in such short supply.

Cr Joanne McRae said Orange was in demand from people wanting to move here with work but she accepted a balance was needed.

"We can't really close the doors and I'd hate to see the 1500 people who are employed in building and construction told 'sorry we're in a drought you've got to stop work," she said.

"It's a tricky one and it's one that worries me."

Residents also asked about the use of bore water.

Mr Greenham said council was using several bores including one at the Showgrounds which was 120 metres deep.