Newcastle Now Accusing Council CEO Of Being "Scandalous" Following Discrepancy Claims

BY JARROD MELMETH

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.

Mr Duc describes Mr Bath as "scandalous" describing his attitude as "unbelievable."

"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.

Pictured L-R: Newcastle Now Chairman Ed Duc and Council CEO
Jeremy Bath. Image: Newcastle Herald.

Newcastle Business Improvement Associations Under The Spotlight

BY JARROD MELMETH

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.

Council CEO Jeremy Bath.

Newcastle CBD Business Owners Voice Fears Over Light Rail Construction

BY IAN CROUCH

It's feared Hunter Street Newcastle could be closed down block by block for up to 14 weeks at a time during construction of the city's light rail project.

The Herald reports Transport for Newcastle officials met with business representatives last week to discuss the building program.

It's estimated the light rail could take up to two years to complete.

Some shopkeepers have accepted the pending disruptions as a fact of life, while others say the government's plan is unworkable and could be the death knell for their businesses.

Artist's Impression Of Light Rail Down Hunter Street