Although the rain last weekend was not enough to get the Macdonald River flowing according to Walcha Council's director of engineering Dylan Reeves.

"The water situation is not great, but we are not on the brink of running out," said Mr Reeves.

"And that is because we are managing it. We are also fortunate to currently have an access agreement to a back-up dam as well as our off-creek storage. So while the river has ceased to run, we still have water. Luckily most times there is a burst of rain we get a small flow in the river, and we have been able to top up our off-creek storage."

Walcha Mayor Eric Noakes said current Level 4 water restrictions would remain in place for the foreseeable future.

"The intermittent flows in the Macdonald River continue to thwart any attempt to relax the current restrictions," Mr Noakes said.

"The feasibility study to find a long-term solution to this issue is gaining momentum and it must be remembered that it is well under 12 months since the Apsley River Feasibility Study was completed with no great outcome and we went back to the original option."

Mr Noakes said the Walcha Council Engineering Department was entering into the geotechnical phase.

Five potential sites are being investigated by Mr Reeves and his team.

"We have excavators onsite to complete geotechnical surveys and take samples which will then be sent to labs to determine how suitable they are for a potential dam site," Mr Reeves said.

"They will be digging samples next week. So we're getting close."

A dam site recommendation will be made to Walcha Council at its July ordinary meeting. From that recommendation, a concept design for a storage dam can be drafted.

"Then we must chase funding to continue," said Mr Noakes.

"With water being so topical, and Walcha Council having constantly highlighted this issue at State Government level we will hopefully be successful in our funding endeavours.

"This is the furthest that Council have ever been along this path and while Council understands the frustration of town residents we are making headway."