City of Newcastle is reviewing a proposed "splinter award" with the United Services Union which would guarantee council workers at least $850 a week for three months.
Councils were excluded this week from the federal government's $130 billion JobKeeper program, which will pay companies and non-profit organisations $750 a week per employee if they lose 30 per cent of their revenue during the coronavirus pandemic.
The USU and Local Government NSW are working on the deal to support council staff who cannot be redeployed.
The arrangement includes up to four weeks of special leave then at least $850 a week in pay.
City of Newcastle chief executive officer Jeremy Bath said his organisation was reviewing the proposal.
"City of Newcastle is already identifying those teams who will eventually have little to no meaningful work to perform should the government's public health orders continue for much longer," he said.
"The critical task right now is identifying whether these staff have the skills to undertake alternative work both safely and competently."
Councils will likely lose income from property rentals, holiday parks, parking meters, theatre bookings and other revenue streams during the pandemic.
"Standing staff down is something none of us want to do, although I'm aware some councils have already commenced those conversations," Mr Bath said.
Mr Bath said in a report to councillors last month that the council would expand its works programs in the next two financial years and bring forward shovel-ready infrastructure projects.
The council's efforts to stimulate the economy would include rescheduling autumn and winter events "to provide the city with an unprecedented level of activity" when it was safe.
Newcastle council is offering grants up to $30,000 to non-government organisations, not-for-profits, charities and for-profit providers which directly support community health and wellbeing during the pandemic.
Applications are open until June 30, but the program could be extended into the new financial year.
Newcastle Airport, which is owned by Newcastle and Port Stephens councils, remains open.
Gold Coast Airport closed on Friday after the last Virgin and Jetstar flights took off from the holiday destination on Thursday.
But regional airline FlyPelican is still operating from Newcastle, three times a week to Canberra and twice a week to Dubbo and Ballina.
FlyPelican suspended its flights between Sydney and Newcastle last week.
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