At the last meeting of council on July 17, councillors noted a plan to overhaul the general fund budget throughout 2017/18.

General manager Graeme Faulkner said the move was motivated by the need for the organisation to be financially viable in order to be declared Fit for the Future.

Lithgow council has been placed on monthly watch by the Office of Local Government and Mr Faulkner is required to provide monthly reports on the administration’s progress.

Council will attempt to claw back a projected deficit of $853,000 for this financial year.

​"It might be too much of an ask to reduce the deficit totally for this year but we're going to give it a good go," the general manager said.

Although $853,000 is certainly a sizeable figure, Lithgow Council has improved dramatically after being in the red to the tune of over $4 million last financial year.

Lithgow Council general fund deficits in the past five years:

Lithgow Council will focus on making cuts to recurrent costs to ensure the budget stays in good shape for coming years.

Firstly council will seek to make savings through natural attrition in the workforce.

"So where vacancies in positions occur we will either not reappoint to those vacancies and work out a way of providing that service but without that position," Mr Faulkner said.

"It's a managed process to try and make sure that we don't forcibly make anybody redundant. We want to try and keep as many people employed so it's  a very delicately managed process to initiate."

The administration will also identify where savings can be made by examining all aspects of council’s operations and the service levels that need to be provided.

Any changes to services will only occur following discussions with councillors and the community.

"Across all of this process we have to make sure that the community have the services that they want and there are potential reductions in services we have to explain that to the community for council approval before that happens," Mr Faulkner said.