On April 17 Mike Richards, senior administrative officer for the Hamlet of Rae-Edzo, told the contractor, Rix Trucking, to limit water deliveries to Rae-Edzo's 80 social housing units to one delivery per week as of April 22.
Some homes regularly receive a delivery a day, depending on the size of the holding tank.
Richards said the NWT Housing Corporation owes $133,000 in unpaid water bills and according to a hamlet bylaw, bills can't go beyond 30 days before action must be taken.
"We're struggling and can't afford to pay the truckers," said Richards.
"We don't know how much longer we can keep our doors open."
The Dogrib Rae Band Housing division has held the NWT Housing Corporation contract for several years and is usually responsible for paying the bills, said Greg Barton, manager of policy and implementation for the NWT Housing Corporation.
Last month the division and the board running it was disbanded by the corporation because of "accountability issues", said Barton.
Board member Clifford Daniels said the housing division was having some inconsistencies in rent collection and bill payments. He said there were also internal problems to deal with.
"I think it shouldn't have happened," said Daniels of stopping the deliveries. "We needed time to iron things out ... There was no warning given. It just happened. I didn't think the hamlet would do things like that. It reminds me of the Iraqis -- no water."
Barton said a new board will be formed as soon as possible and will take over retroactively from April 1.
The new board will be made up of appointed members rather then half appointed and half elected members. It will also operate under a new name, the Rae-Edzo Housing Authority, said Daniels.
"Everything should be back to normal in the short term," said Barton.
Barton met with Richards Thursday and assured him the $106,000 that is 60 days overdue would be put directly into the hamlet's account by Friday.
"I think we're dealing in good faith here," said Richards, Thursday.
"If it's not paid by Tuesday then we're back to where we are (now)."
The water, sewage and garbage services provided to the social housing units cost between $55,000 and $60,000 a month, making it the hamlet's largest client, said Richards.
The new Rae-Edzo housing authority hopes to host a public meeting in May to "resolve things with the public," said Daniels.