Newcastle Business Improvement Associations will come under the spotlight at a City of Newcastle council meeting on Tuesday night.
A report commissioned by the City of Newcastle will be tabled at the meeting which concludes "The proportion of Levy funding allocated towards administration costs also appears to be excessive and at the cost of additional economic development output."
The report also recommended updated the existing funding model for BIAs "to better involve their members, align operations with emerging opportunities and make structural changes that can ensure funding certainty and improved governance."
Chief Executive Officer Jeremy Bath said four of the five BIAs have this year requested Council funding, with 46 per cent of their collective ratepayer funds to go to administration and salaries.
Mr Bath said the AECOM report found that the governance arrangements for BIAs require significant improvement.
"Earlier this year a BIA requested more than $100,000 with no explanation of how the money would be spent.
"Another requested to spend all (and more) of their special rate funding on administration.
"More than $10 million of commercial ratepayers money has been provided to BIAs during the past seven years. During this time, the amount being diverted to administration and salaries has substantially increased.
"Every dollar that is spent on administration and salaries is a dollar that isn't going towards on-the-ground delivery of events and programs that attract people to local shops and businesses," Mr Bath said.
But Newcastle Now Chair Edward Duc said without staff, the association would not be able to provide community events and programs.
"The people who are employed in the office, run the programs. They actually run the events and if we don't have those people then we would have to outsource. Our experience with outsourcing this sort of activity is more expensive than doing it in-house," Mr Duc said.
Councillors will consider the recommendation in a confidential meeting to replace the model of funding agreements with a new framework with an emphasis on events, local projects and infrastructure.
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| Council CEO Jeremy Bath. |
