Newcastle Maritime Museum Society is under pressure to find somewhere to store its 7500-piece collection by September 23.
City of Newcastle has written to the society saying it must vacate the commercial storage shed at Carrington that has housed the collection since Hunter and Central Coast Development Corporation evicted the museum from the Honeysuckle A Shed two years ago.
The letter says the council will not pay to store the collection "where it is inaccessible to the public indefinitely".
The museum society appears to have few resources to pay for moving and storing the collection, let alone displaying it.
The council has proposed taking on the collection and displaying part of it at Newcastle Museum, but the society has resisted this option, arguing the artefacts deserve a more prominent home.
It has enlisted the help of peak union body Hunter Workers, but the museum's financial position remains a stumbling block to finding a permanent solution.
The museum society owes almost $300,000 to various creditors, including $85,000 to HCCDC in unpaid rent, but president Bob Cook insists most of these debts have been waived.
Hunter Workers secretary Daniel Wallace said on Tuesday that he had told the society to "get their finances up to date and in order".
"I wasn't confident that that was going to happen to be in a position to negotiate any type of extension with the council," he said.
"To get the support they need there needs to be more openness and transparency."
Mr Cook regards the museum's 2018 closure as "unlawful" as it was enacted by a former leadership he says was not popularly elected by society members.
"If council does not offer an alternative solution, our collection must be returned to us as it existed, as we were not involved in moving it," he said on Tuesday.
The council paid a $20,000 bond for the Thales shed at Carrington but is not paying rent.
A City of Newcastle spokesperson said on Tuesday that five museum creditors had told the council in the past two months that they had not waived their debts.
"As repeatedly communicated to Bob Cook, City of Newcastle is legally unable to accept the transfer of the collection while ever creditors remain unpaid," the spokesperson said.
"City of Newcastle has met with Bob Cook and several members of his board on at least five occasions.
"For reasons that we cannot explain, he continues to seek more meetings to push his case rather than address the outstanding debts.
"We have again agreed to meet with museum representatives in August."
The spokesperson said lord mayor Nuatali Nelmes and chief executive officer Jeremy Bath had met with the Maritime Union of Australia last week to discuss the issue.
The museum society's 2018 annual information statement to the Australian Charities and Not-for-profits Commission showed it had assets of $254,000 and liabilities of $456,000 on its balance sheet.
Its 2019 information statement, lodged in December, said the museum had $1478 in assets and no liabilities.
The museum's last profit and loss statement showed it had revenue of $104,000 in 2017-18 but recorded a $152,000 loss. Its operating expenses included $142,000 paid to contractors.
The previous year it made a profit of $16,000 after paying contractors $17,000.
HCCDC said it had ceased any formal relationship with the museum in 2018 but wanted to collaborate with the society on using artefacts in future public spaces.
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