Raupunga's water system won an award from the Hawke's Bay District Health Board four years ago, but under new regulations due in July it may have to close it.
About 40 households - about 300 people - are supplied by the treated river-water system, including a marae, kaumātua flats and two kōhanga.
It cost $1 million to implement and consumers are charged $400 a year for the water, subsidised by ongoing fundraising by the community trust that owns the water supply.
Raupunga resident Theresa Thornton said finding money to keep the water system running was a struggle despite volunteer help.
"We're lucky we can go to the Ngāti Pāhauwera Development Trust," she said.
"They give out pūtea for community organisations and it's a huge help. But that funding is not available every year.
"We struggle to find funding to fund it in the future to keep our system running. Because it's run by us, it's owned by us, and we have to look after it."
Thornton said Raupunga would be devastated if it lost its water supply.
"Whānau could move away. We have had whānau move home since we got the water.
"We've got new buildings going up in our community - papakāinga, which is five new houses - and we are looking to build more houses."
Tighter drinking-water standards will be implemented by new government entity Taumata Arowai, which took over the regulation of drinking water from the Ministry of Health in November.
The increased standards are part of the Government's Three Waters programme to take control of drinking, sewage and storm waters away from local councils, to be run by four new publicly-owned regional entities.
Because Raupunga's water supply is not council-owned the community retains ownership, yet must follow the new standards.
The new standards can be traced to the 2016 Havelock North campylobacter outbreak.
The outbreak was caused by contaminated surface water entering an untreated water supply.
Several deaths were linked to the outbreak and about 8000 people affected.
Raupunga's volunteer water-treatment operator Guy Taylor said the plant meets current standards and had never tested positive for E. coli.
He said up to $100,000 would be needed to install new equipment, and operating costs would at least triple.
"We'll have to find someone silly enough to want to take on my job, because it's going to require a lot more hours," he said.
"That person will have to be paid and they'll probably have to be paid quite well, considering the liabilities they're taking on."
Taylor said the new regulations would affect thousands of people in New Zealand, disillusioning communities that aspired to a water supply such as Raupunga's.
"We need another category that caters for small communities that are so dependent on the water," he said.
"Without it, it would be like stepping back 40 years, where people are carting water to their house from the local stream.
"You'd see people driving down the road with a big white cube on a trailer to fill up somewhere and bring it back.
Hawke's Bay Regional councillor for Wairoa, Charles Lambert, said Wairoa District Council could not afford to help Raupunga come up to standard "so it really does require support from central government".
Taumata Arowai head of regulatory Ray McMillan said the new regulations were not engraved in stone and he hoped a sustainable solution could be found for Raupunga.
"We have already contacted the supplier on November 17 and are keen to meet with them to better understand their situation," McMillan said.
"We also want to discuss our approach as the new water services regulator with them and to answer any questions they might have. This meeting is being planned for early in the new year.
"Our mutual goal is to ensure the Raupunga community continues to have access to safe drinking water.
"We have a range of regulatory tools available to us to help us find solutions that work for different circumstances.
"We're also working over the longer-term to improve capability within the drinking water sector so that suppliers have an easier time satisfying requirements, including by finding people who can help them do that."
He said while the Water Services Act 2021 was now largely in force, there were parts of the regulatory framework that needed to be filled in.
"These include things like new drinking water standards, rules, and Acceptable Solutions.
"We want to make sure that the regulatory framework is fit for purpose for the diverse needs of various water suppliers across Aotearoa."
He said a 10-week public consultation started on January 17, looking at concerns such as Raupunga's.
"We hope that smaller water suppliers like the one at Raupunga take the opportunity to make a submission," McMillan said.