Rural properties and Franz Josef's waste water treatment system may be threatened by the flood-prone Waiho River changing its course.
The main channel of the river has deflected to the true right - towards the northern bank - due to sediment build up.
This has created an additional channel into the much smaller Tartare catchment on the other side of the town.
The Waiho (Waiau) River has tended to erode the southern side, and burst its banks in 2019, flooding the rural Waiho Flat community and causing continued uncertainty and stress over its future.
West Coast Regional Council chief executive Darryl Lew said they were working out the ramifications of this shift with Te Rūnanga o Makaawhio, Westland District Council, and Waka Kotahi NZ Transport Agency.
"The waste water system for the township of Franz Josef and the oxidation ponds are potentially threatened by the river changing course. But also, the prospect is that the flow of the Waiho River will tip across into the neighbouring catchment," Lew said.
"The situation that is of most concern is if during a particular high-flow event, the Waiho River decides to almost permanently shift its flow into the neighbouring catchment, and the initial advice is that would make it very difficult, engineering-wise, to actually get it back into the main channel of the Waiho."
It appeared that the channel to the Tartare catchment remained dry until there were higher river flows, he said.
"The Tartare catchment is a much smaller channel than the Waiho and so all sorts of river management issues would accrue if some or the majority of the Waiho flow - the dominant flow path became the Tartare."
There would be more issues if sediment from the Waiho River was deposited into the neighbouring catchment, which leads to a world-recognised wetland, Lew said.
He acknowledged significant community concern about the river's behaviour and asked for their patience while they worked through the solutions.
The council will discuss the current situation, the future state of the river, potential solutions, and create a 10-year plan for the river in a workshop next month, before hosting a community meeting in September to discuss the options.
"Council is bringing together some of the most experienced thinkers in this space to consider the options for the future and create a 10-year plan for the river. Once we have this plan, we can then bring this to the community as well as seeking the appropriate funding."
With roughly 10,0000 millimetres of rain falling in the catchment annually and a highly seismic environment, the sediment build-up had been exacerbating, Lew said.
"The Waiho is one of the most dynamic river systems in New Zealand. Being constrained within floodwalls has meant that the natural deposition of gravel over the river plain has been unable to occur with the river bed building up faster than ever before.
"When the accumulated sediment grows formidable enough to impede the flow of water, the river seeks an easier course."