Council's 2020/21 budget was prepared before the pandemic.

Since then, adjustments have had to be made due to council's expected losses in income.

The Dubbo City Regional Airport will be the hardest hit with council expecting a $1.69 million shortfall on the initial budget projection for 2020/21. Council's investments will also be hit hard with an expected $1 million decrease in the interest.

But council's chief executive officer Michael McMahon says the shortfalls will be covered through the COVID-19 reserve.

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"We've been fortunate enough that we had developed a COVID reserve which was basically a sweeping of many restricted assets that had been sitting in the balance sheet for some years. We put it into one account and had $8 million available," he said.

"In the first six months of last years budget we lost $2.2 million. In this current review of the budget, because our budget was based on a pre-COVID situation, we then found we needed another $4.23 million."

The adjustments to the budget have been made with the assumption the current COVID restrictions will remain until the end of the financial year in June 2021.

Council is anticipating a 40 per cent reduction from show income, and 60 per cent reduction from hire promoter events and bar sales at the Dubbo Regional Theatre and Convention Centre. The Wellington Civic Centre has had all of its events cancel.

It's expected to total a $370,000 loss, which will be covered from the COVID-19 reserve.

Wellington Caves is likely to see a 55 per cent cut in tour numbers for the rest of the year.

There could also be a 20 per cent reduction in people staying at the caravan park. As such, a $180,000 reduction in money coming to council is forecast.

Another $83,000 reduction in takings from the Old Dubbo Gaol is expected and $82,000 from the Dubbo Showground.

Money will be added to the COVID reserve thanks to the Fire and Services Levy and the Office of Local Government's fee relief income to the tune of $30,000.

As it stands, council is expecting a loss of $269,000 at the Dubbo Regional Livestock Markets. It comes from a reduction in cattle, sheep and goat sales. It could lead to a $147,000 shortfall in the budget, however it will be funded from the DRLM reserves.

"We were fortunate enough that this council has been financially well run over many years so we've had that money up our sleeves," Mr McMahon said.

"A lot of other councils have had to cut services but we've been fortunate enough that we've been able to maintain services with huge losses associated with some of our income streams."

Once the $8 million COVID-19 reserve is depleted, the CEO said council would have to start cutting back on services.

Council staff could be put on COVID leave to allow council to claim back money from the NSW government.

"The state government have got some money available, they put $350 million available for local government, because we're not available for JobKeeper through the federal government. So to avoid that they've got this provision but we can only take it if we put staff off," Mr McMahon said.

"At this stage, staff are gainfully employed and we hope to see them remain gainfully employed through this process."