Rain last week has done little to ease Mullumbimby's water crisis.
Byron Council is now looking at upping restrictions to level four this month and hooking into the Rous Water supply through an emergency pipeline in November.
The council's general manager, Pamela Westing, has described the situation as "serious".
Ms Westing said water use in the town had increased despite restrictions.
She said the present seven-day average daily water consumption at Mullumbimby was 1186 kilolitres a day compared with 1153 kilolitres a day before the restrictions were introduced.
"Other data shows that Mullumbimby is also using more water than is being received in the Wilsons Creek," she said.
"This means that we now have to use the small amount of water we have in storage at Laverty's Gap."
The council is encouraging residents to save water by keeping a timer in the shower, using washing machines and dishwashers only when they have full loads, using a trigger operated spray gun on hoses and using the reduced flow option on dual flush toilets.
It also is urging residents to take up Rous Water's house tune up program which offers replacement of showerheads with a water saving model, flow regulators on spouts in hand basins and sinks and a general leak check around the house by a plumber.
Ms Westing said the council was continuing to reduce the water pressure to Mullumbimby in a bid to reduce water consumption.
Update your news preferences and get the latest news delivered to your inbox.