Blocking the waters is a huge sandbar and locals are demanding the local Shoalhaven City Council build a permanent channel to allow the lake to drain to the ocean.

While some locals are concerned what a dirty, flooding lake would do to the local economy, others are worried permanently opening the lake will commercialise the relatively untouched coastline Canberrans love.

And while the council has said the lake is safe to swim in, the local council-run caravan park has issued refunds to disappointed guests and given free passes to those looking to swim at nearby pools.

Conjola Community Association publicity officer Kristen Bird said holidaymakers have lost business and people living lakeside are starting to see the waters rise into their properties.

"It's been like that since the rains before Christmas; the foreshores are a nightmare," Ms Bird said.

"You can't launch the boats because the boat ramps are under water. The water table is so high, all the sewage is coming up through the drains .. trees have fallen into the lake."

In April last year, dead fish began to wash up on the shores of the lake, something locals blamed on the lack of outflow.

In December, the local council hired an excavator to dig a channel through the sandbar after complaints from locals and green algae building along the banks.

But after the channel opened to the ocean on December 21, it closed in on itself overnight, with locals picking up their shovels to dig their own channel on December 27.

Ms Bird said the water levels at the lake had dropped slightly but said another storm would send the levels up again.

The lake was previously dredged in 2016 but had been closed since. In 2014, dead stingrays were found in the lake when it was cut off from the ocean.

The locals blamed the lack of outflow, while officials said a sudden drop in lake temperatures had killed off the rays unsuited to colder water.

Ms Bird said locals now wanted action by the council with a consistent management plan to drain the lake when it started to flood and water quality started to go south.

Another local, Mark Stapleton, was more on the fence than Ms Bird.

He was sceptical about clearing the lake, believing it would take a massive, expensive project from council to completely remove the offending sandbar.

But he said council had left locals mostly in the dark as retailers feared a loss of business with tourists, put off by the poor quality of the lake, heading elsewhere for summer.

He said he had read the council's report but said council needed to get better at communicating with Lake Conjola residents.

Similar lakes along the coast north of Conjola are permanently open or have a stronger management plan in place, Mr Stapleton said.

"I don't want to see the waterways here heavily developed or commercialised so I wouldn't support some of the permanent openings some of the towns - particularly in the north - have," Mr  Stapleton said.

The Canberra Times requested time with Shoalhaven City councillors but was instead given responses by a council spokeswoman.

The spokeswoman said Lake Conjola was an intermittently closed lake and blockages to the ocean were a natural occurrence, especially considering the drought NSW was experiencing.

"Council understands the significance of the lake for the community and visitors and is continuing to speak with the community and visitors about the ongoing management of the lake," the spokeswoman said.

The council's current policy was to conduct emergency drainage when the water levels reached a certain height, but locals wanted this minimum height lowered.

The spokeswoman said the council was reviewing the policy.

She also said it was important to protect a local shorebird population which called the northern part of the bank home.

While the spokeswoman said tests had confirmed the lake water was safe, the council-run caravan park had seen cancellations and visitors issued free passes to a swimming pool in Ulladulla.