A development application for a $950,000 firefighting water supply on the banks of the Murrumbidgee River was lodged late last year but was not completely assessed.

Village residents in January met to express their frustration over the plan, which they said did not meet the firefighting or water-supply needs of the village and posed an environmental risk to the river.

In April, the community was told other options would be explored by Transport Canberra and City Services.

A privately held site behind the existing firefighting shed was the community's preferred option, which would allow for a gravity-fed water supply. But a site on unleased territory land at the corner of North Street and Clarrie Lane was the government's preferred site.

A new development application would be lodged later this month and, pending approvals, construction was expected to start this year, a spokeswoman for the directorate said.

The spokeswoman said the government's preferred site was a strategic firefighting advantage zone and the community's preferred site did not provide adequate access and had poorer bushfire protection.

Geotechnical investigations were done this week and a tree assessment and detailed survey would be completed in the next fortnight, she told the Sunday Canberra Times.

Tharwa Community Association president Kevin Jeffery said the process had been frustrating to village members because consultation did not want to take into account the needs of the community. "All feedback has not been well received," he said.

"What I don't think they get is the impact of any small thing on a tiny village. ... This does not fit the scale of the community at all. I've tried to speak to a number of people from [Planning Minister] Mick Gentleman's office down about the scale of the impact on the village and they just don't get it," he said.

The community manages an ageing water supply and, in a previous submission, the village's community association said it would prefer investment in a replacement to that system.