PICTON, Ont. -- A southeastern Ontario community continues to grapple with a water crisis after a sunken barge leaked contaminants into a bay on the north shore of Lake Ontario.

The mayor of Picton, Ont., declared the water emergency as a precautionary measure and shut down the local water treatment plant Tuesday after an oily sheen appeared in Picton Bay.

Although the Picton-Bloomfield Water Plant resumed operations Wednesday, Mayor Robert Quaiff warned that wind and weather patterns could prompt the system's closure again.

"We will maintain the emergency status until such time as we are confident that the sheen has dispelled or floated sufficiently far from the intake," he said in a news conference. "Given the risk that the sheen is posing to our water system, authorities are investigating methods of vacuuming up the sheen."

Residents are being asked to limit water use to essential needs only to ensure sufficient reserves are in place should the plant be shut down again.

About 1,100 litres of fuel remained in the barge in a double-walled tank and precautions are being taken to ensure no fuel is released. Containment booms have been set up around the 27-metre vessel.

However, roughly 30-litres of fluid, possibly a mixture of diesel and hydraulic fluid, was stored in jerry cans on the deck of the barge. Quaiff said this is the mixture that appears to have leaked into the bay, but he stressed that the drinking water supply has not been contaminated.

The vessel's operator, McKeil Marine, has submitted salvage plans, which have been reviewed and accepted by the Canadian Coast Guard and Transport Canada.

Coast Guard officials will remain on-site to monitor pollution and oversee any clean up that may be required until the barge is removed.

"There's a lot of concern from people over this incident," Picton Coun. Lenny Epstein said. "It's our drinking water supply and it's the ecology of the bay at risk."

He called the water crisis a "wake-up call" that could lead to more stringent regulations for shipping and boating traffic.

The state of emergency will remain in effect until officials are confident contaminants no longer pose a threat to the water system, county officials said in a statement.