THE outbreak of COVID-19 is estimated to blow a $4 million hole into Tamworth Regional Council's (TRC) bottom line by the end of the financial year.
The potentially deadly virus has decimated the council's usually profitable business ventures, including Tamworth Regional Airport and a number of major events.
A $395 million lifeline from the state government announced on Monday could not have come at a better time, mayor Col Murray said.
"All in all it will be significant, TRC is in a relatively strong financial situation but we can't continue to carry those levels of impact without a cut to services," he said.
"The timing of this announcement is pretty much on the money, it gives us that assurance that we won't have too big an impact on delivering services into the future."
The council employs about 570 full-time staff and the $4 million loss is expected to hurt the budget through to next year as well.
Council employees were not included in the list of eligible businesses for the federal government's JobKeeper payments.
As part of the state government support package, those employees will now have access to a $1500-a-fortnight Council Job Retention Allowance.
The council itself will be able to borrow more money from TCorp - the central borrowing authority for the state - after the NSW government pledged $250 million in low-cost loans to drive investment into community infrastructure.
TCorp offers local councils modest interest rates which makes the announcement more attractive, Cr Murray said.
"The important thing about this announcement is it is a safety net there for all employees of local governments," he said.
"That will ensure the financial well-being of our employees."
It's predicted the virus will have a $1.7 million impact on the council's general fund by June 30, which it uses to deliver community services.
The state government support package would support all 128 local councils in NSW, from big councils like Sydney to those in small rural towns, Tamworth MP Kevin Anderson said.
"Councils are definitely feeling the economic struggle that most businesses across NSW are feeling as well," he said.