City of Newcastle chief executive officer Jeremy Bath says a review of ratepayer-funded business organisations in the city was driven by concerns expressed publicly in 2017 by Hunter Chamber of Commerce, one of four groups opposing the review.
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The heads of the Hamilton, CBD, New Lambton and Mayfield business improvement associations (BIAs) wrote to the Office of Local Government this week seeking an "urgent investigation" into how Newcastle council is managing a levy on commercial ratepayers.
They say they are concerned about the "procedural fairness and lack of natural justice evident" in a council-led review of the BIAs and that the council launched the review without consulting the business community.
Councillors approved a motion in December 2017 which noted a submission from Hamilton chamber boss Nathan Errington and asked Mr Bath to review BIAs.
Mr Errington's submission on a proposed council open and transparent governance strategy said, in part, that the council should set up a committee to "look at the wider BIA city problems ... determine how we can work more cooperatively together, including consideration of combining some of the special rates to work cooperatively to spend more wisely and be more accountable."
Mr Bath said on Friday that the BIAs had concluded the council should not ask questions only after "governance issues" and their "propensity to over spend on salaries" became known.
"Council has during the past few years regularly been contacted by commercial ratepayers concerned about how special rates are being spent," he said.
"Having now had time to look under the bonnet of the BIAs, it's clear the concerns of the business community are well founded."
Mr Errington said on Friday that his 2017 submission had been intended to ensure better communication between BIAs and councillors.
The review led the council to vote in December 2018 to terminate its funding deeds with the Newcastle, Hamilton, Mayfield and Wallsend BIAs and enter into revised deals with each by July 2019.
These deals will allow third parties to bid for BIA funds to conduct events and promotions in each of the commercial areas.