Newcastle Now has hit back at council following claims the Business Improvement Association has a $1.1 million discrepancy relating to staffing costs.
In a statement, City of Newcastle CEO Jeremy Bath said a breakdown of the groups' expenses for the past three years does not match the groups audited reports for the same three years.
Mr Bath claims the group listed expenditure on wages at $244,949, but an audit put that figure at $1,384,488.95.
"Until I terminated its funding on 31 December last year, Newcastle Now was spending 56 per cent of its annual income on employee and administration expenses. This is money that ratepayers expect would be spent promoting the CBD.
"Newcastle Now's financial explanation is concerning. Unless they can reasonably account for the $1.1 million discrepancy in their employee costs, my recommendation to council will be that a new agreement shouldn't be offered to Newcastle Now for the new financial year," Mr. Bath said.
However, Newcastle Now Chairman Ed Duc denies the figures saying they are "incorrect".
"An organization that is handling $800,000, or thereabouts, of ratepayers money has to be very careful as to what it does with that money.
"The truth of the matter is, in order to spend that money, you need to have administration. Our administration costs, we know, are 20 per cent. That is 20 per cent of the gross special benefit rate. The remainder of the funds Bath is talking about are expanded wages for programs approved by the traders through the elected board," Mr Duc said.
Issues between Newcastle Now and City of Newcastle date back to a year ago when Mr Duc and Lord Mayor Nuatali Nelmes exchanged words during a council meeting after Ms Nelmes raised questions about how the group was promoting the city during light rail construction.
Mr Bath rehashed the light rail issue in his statement.
"The past 12 months were the most challenging faced by many traders in the Newcastle CBD due to the light rail construction.
"In a year when Newcastle Now should have been investing every last cent into promoting and activating the CBD, we now know that they instead spent more than half a million dollars on employee and administration costs," Mr Bath said.
"He knows that this is not true and we are trying to figure out just what motivation he has behind making these scurrilous claims," Mr Duc said.
Newcastle Now will be writing to the Office of Local Government asking for it to come in and review the situation.
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| Pictured L-R: Newcastle Now Chairman Ed Duc and Council CEO Jeremy Bath. Image: Newcastle Herald. |
