IPART received 139 proposals, with councils asked to prove they could effectively manage infrastructure and services and deliver financial sustainability, scale, capacity and efficiency to the community.

Just 40 per cent of councils were deemed 'fit', with Dubbo's proposal to remain as a stand-alone council within an Orana Joint Organisation (JO) accepted.

"I think it's a reflection of the excellent position we're in as a council and the great work we have done over the last 10 years," mayor Mathew Dickerson said.

"We have been successful in gaining state and federal government grants, the financial management of our council has been excellent - we have been responsible financially."

Cr Dickerson said it also rewarded council's close engagement with, and the growth of, the Dubbo community.

But with councils in Narromine and Wellington both deemed 'unfit' by IPART, Dubbo may not be safe from amalgamation.

In 2014, an independent review into local government recommended Narromine and Wellington could either stand-alone within an Orana JO, or merge with Dubbo.

With both councils' proposals to stand alone now rejected by IPART, the option to merge with Dubbo remains.

"I'd be disappointed if we were deemed fit and then forced into amalgamation," Cr Dickerson said.

"We should be rewarded and acknowledged for the excellent work we have done, and we have got the full support of Troy Grant.

"Troy has said that if we are fit, as we obviously are in IPART's eyes, if our numbers stacked up then he would certainly back us as our local member."

Narromine mayor, and chair of the Orana Regional Organisation of Councils, Bill McAnally, said he feels the process has been a box-ticking exercise.

"Obviously the state government has taken no notice of the work we have done and are just taking on board the original IPART recommendation," Cr McAnally said.

"They do what they want to do. They've [the state government] made their decision."

Wellington mayor Anne Jones said the council now has no choice but to consider possible mergers.

"The state government undertook an investigation on the understanding there would be no forced amalgamations. Now they are saying we are given our last chance to voluntarily amalgamate. That says we have no choice. Either we do what they say or they will turn the tap off on us," Cr Jones said.

She fears the Wellington community would suffer, and lose representation under a merger.

"We need to look at councils in similar situations, we need to see which ones would be the best for us so that... we can work together as one," Cr Jones said.

"If we have a choice we need to choose those partners we can work with."

Dubbo MP Troy Grant was contacted for comment, but did not respond by deadline.