THE ENVIRONMENTAL Protection Authority fears increased complaints about smelly Woodvale ponds if people build a house and pet therapy facility nearby.
It has issued the warning to the City of Greater Bendigo, which is considering approving a home and pet therapy business on Dalys Road, close to the site that miners used to pump underground mine water into.
A "strong sulphur odour" is already known to sometimes waft off the ponds in summer months, the EPA has told the council.
"EPA is concerned that developing a dwelling on an adjacent parcel of land may increase complaints about the existing evaporation pond facility," it said.
The EPA said its concerns should not be considered objection to the proposal, according to quotes in council documents.
Mining and environmental authorities have long declared the ponds safe for nearby residents.
Some community advocates have previously raised concerns about any toxic minerals at the site, though regulators and former mine owners say they have managed the land to minimise any risks.
Mining regulator Earth Resources Regulation has been considering separate plans to transform the evaporation ponds back into farmland.
But the EPA's warning could be a further blow for applicants behind the pet therapy proposal.
Municipal officers have said councillors could exercise "the precautionary principle" and refuse permissions when they vote on the matter on Monday night.
The officers also say they had not received enough evidence the development would meet enough requirements under the city's planning scheme.
The 16.6 hectare site sits in an area zoned for farming, which is supposed to protect land for agriculture.
Council officers fear it is too small to appeal to "genuine farmers", should current owners one day decide to sell it.
Applicants have told the council they want to set up space for up to 20 animals including paddocks for cows, sheep, goats, chickens and ducks.
Some stock would also be bred on the site for sale.
No-one who lives nearby has objected to the proposal.
The applicants have provided several letters of support from local health providers extolling the benefits of pet therapy.
Council officers say they are not casting judgements on pet therapy's merits.
"This is about whether the proposed land use warrants the development of a dwelling based on the scale and nature of the agricultural activity, in particular, whether the proposal is viable and enduring," they said.
The council officers say there is other land in the municipality that might be more appropriate for a dwelling and pet therapy facility.
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