McLeod's design for the Borough Race was deficient in one major respect. It sourced its supply from downstream of the Maerewhenua River, when it was already obvious that the river was a source of pollution from placer gold sluicing works at Livingston. The river was cloudy with silt. In about 1902 the Waitaki County and Borough councils sought a statutory injunction on gold mining on the Maraewhenua - some hope! The Crown which derived revenue aplenty from gold mining, simply declared the Maerewhenua a sludge channel - a legal "entity"
A new intake was later (1920) constructed, taking water from above the conflux, passing under the Maerewhenua in a box culvert below river bed level. The new intake was to provide both clean drinking water and more volume for the power station - as by now it was obvious that the design of the power station and the miss-matched Pelton wheel and generator were compromising its output. The box culvert survived - only just - until the end of gold mining and was then swept away in a flood. Another intake and a big deep borrow pond to settle silt was then dug into the true right bank of the Waitaki and water from this borrow pond supplied Oamaru's water needs until 1983.