Mathew Dickerson says if the dam gets "zero inflows" in that period and runs dry, the city's entitlement of about 4 gigalitres (GL) of bore water could keep it afloat.

The rush to level four restrictions is hurting the city's image and ability to attract new residents and visitors, he says.

"It's sending the wrong message out that Dubbo's going to run out of water and I think the reputational damage already done is severe," Mr Dickerson said.

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This month WaterNSW announced progress in projects aimed at keeping water flowing out of the dam well into 2020.

They include the pumping of remnant storage after the dam releases all of the water transferred into it later this year.

"With the addition of water transferred from Windemere Dam via the Cudgegong River, even with zero inflows into Burrrendong there is sufficient dam water supply for towns and critical human needs until at least May 2020," a WaterNSW spokesman said.

Mr Dickerson seized on "zero inflows" in arguing that Dubbo's water situation was not as bad as it was being portrayed.

"That assumption that they can't provide water past May is based on zero rainfall in the 13,900-square-kilometre catchment area, not low rainfall, not below-average rainfall," the businessman said.

"Now I know it's been very tough in terms of rainfall we have received but I find it terribly unlikely that the catchment won't get any in the next eight months."

The former mayor is not worried for the city should the dam falter and has an idea about how a grant from the state government should be spent.

"Even if we get to May next year and the dam does run out of water, we still have got about 4GL from the bores and that's still a reasonable amount," he said.

"With the 4GL we've got, in eight months time with $30 million in our back pocket surely we could buy some extra bore licences."

Mr Dickerson has looked at Dubbo Regional Council's daily water usage figures and extrapolated that the city is using "about 5GL a year" on level two water restrictions.

He suggests a 10 per cent water reduction target for individual households is a better option than restrictions.

"Your next water bill that comes out would have a comparison to the equivalent quarter last year," he said.

The former mayor wants all bores in the Upper Macquarie alluvial aquifer to be metered.

"We don't know how much water a lot of people are taking," he said.