Applications opened on July, 1 and will close on Friday, September 27 at 5pm, with the announcement of successful projects expected from January 2020.

Local councils, and incorporated, not-for-profit organisations or other organisations that have a public purpose are eligible to apply.

According to the council report the program objectives are:

Lithgow City Council general manager Graeme Faulkner said that consultation with the community is required.

"Given the time frame, by the time we have community consultation, gather together a list of recommendations and put the application forward it puts us towards the end of the application date, and we don't want to be caught out like we were with the drought funding," he said.

Lithgow City Councillor Stephen Lesslie said they needed to advise the community that money was available.

"We need to let them know there is an opportunity for them to put in a direct submission themselves, lets work with the community on this matter," he said.

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"I congratulate the government on coming through with this funding."

Councillor Steve Ring reiterated that community groups could apply directly for funding and didn't have to go through council.

"I fully support that 50 per cent of the funding going to youth, we have enough problems in this community and if we can do something that helps them then that's what matters," he said.

Councillors moved the recommendation that council should move forward with community consultation.