OPINION

[dropcap style=”color: #a02f2f;”]P[/dropcap]lans to hit traders with a compulsory levy to raise $3 million over five years for Commerce Warrnambool are headed for court unless the Warrnambool City Council puts a stop to the levy immediately.

Commerce Warrnambool and the Warrnambool Traders Action Group agreed to not talk publicly about the levy while negotiations were underway between the two, but don’t think for a moment they have struck a deal.

In fact, it is the opposite.

In a hard-hitting letter sent to all councillors and council Chief Executive Officer Bruce Anson last week, the traders are asking the council to withdraw the levy proposal at its meeting next Monday (21/7), or it will take legal action against Commerce Warrnambool to prevent it from acting outside its legal powers.

The first step in that process is an injunction issued by the Magistrates’ Court.

Before delivering this ultimatum out of sheer exasperation, the W’bool Traders Action Group spent a lot of time identifying where it believes Commerce Warrnambool has breached its legal requirements as an incorporated body and hoped that something would be done to address these concerns.

It also, despite weeks of discussion between the two groups, is still waiting for answers to its questions about how the levy has been justified.

It appears the traders have finally run out patience.

[dropcap style=”color: #a02f2f;”]W[/dropcap]ith their gloves firmly off, the traders have, in their letter, accused Commerce Warrnambool of making “false and misleading” claims about the level of support for the levy, which would raise $600,000 in its first year and rise by 5 per cent each year.

In arguing why the levy should go ahead, Commerce Warrnambool said its consultant, Peter McNabb, had visited more than 900 businesses to explain how the levy would work and that this resulted in signed support from more than 150 traders.

The W’bool Traders Action Group says it has since spoken to more than 300 businesses and found less than 20 who were formally consulted: most found out about the levy through the media.

(As an aside, Bluestone asked the council if it had seen the 150 signed forms of support and was told that they had been “viewed by council staff”, but presumably not the elected councillors.)

Similarly, Commerce Warrnambool said its consultant received verbal support (ie. via telephone) from 150 corporate businesses who have their head offices outside of Warrnambool – a claim the traders describe as “fanciful” because finding the right person to speak to in corporations is difficult, let alone gaining their “verbal support” for anything.

And it doesn’t stop there.

[dropcap style=”color: #a02f2f;”]T[/dropcap]he Traders Action Group goes on to reveal in its letter that the “purpose” of the Commerce Warrnambool Strategic Business Plan – as stated in the business plan – is actually the “purpose” of the Swan Hill Incorporated plan (which Peter McNabb and Associates also developed) and has nothing to do with the objectives of Commerce Warrnambool.

There are also allegations of threatening, potentially libelous emails being sent from a member of Commerce Warrnambool to two members of the Traders Action Group.

Put simply, the levy proposal is a mess and, as a result, Commerce Warrnambool is in a mess.

This is a shame, because the city needs a robust Chamber of Commerce – something the W’bool Traders Action Group also agrees on – but how that body is funded, and what it does, needs more investigation and discussion.

I have written previously about how chambers of commerce in other regional cities use memberships and corporate sponsorships to survive and how they are primarily focussed on lobbying, networking and professional development: not things like Christmas decorations, ‘buy local’ campaigns and promoting the local football finals.

[dropcap style=”color: #a02f2f;”]I[/dropcap]n addition, we still don’t know – if the levy was to go through – what Commerce Warrnambool will deliver in its first year, beyond some very broad-brush goals that require a huge leap of faith that the $600,000 will be well spent.

Our elected officials have an opportunity, next Monday, to put the brakes on the whole levy proposal and Commerce Warrnambool has an opportunity to start over, with a view to building a robust plan for its future that has solid – rather than fractured – support.

The most likely result, however, is that the council will vote to defer the levy process until later in the year, which really helps neither side and only extends the war.

The council might prefer to stay in limbo, but the traders have made it clear that they will not.

This time, time has run out.

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OPINION – CAROL ALTMANN

[dropcap style=”color: #a02f2f;”] P [/dropcap]lans to introduce a new trader levy to raise $3 million over five years for Commerce Warrnambool have taken a dramatic twist.

A Facebook post by Commerce Warrnambool (CW) president Tony Herbert has revealed that CW is no longer seeking $600,000 a year from the trader levy, but $300,000 – with the remaining $300,000 to come straight from the Warrnambool City Council coffers.

This new idea is central to the negotiations between CW and the Warrnambool Traders Action Group – with Mayor Michael Neoh sitting in the middle – to try and reach a compromise, after the initial levy proposal sparked an angry and rolling protest.

It might look like an attempt at a compromise, but to me it sounds like policy on the run and former Labor leader Kevin Rudd is living proof of where that can lead: disaster.

Commerce Warrnambool no doubt has noble intentions in trying to raise funds to spend on promoting Warrnambool, but its proposals continue to raise more questions than they answer.

Shifting half of the cost burden from traders to general ratepayers does not change the need for a full and robust discussion on how the funds will be spent.

It also raises the question of whether this is the best use of $1.5 million of public funds. (Especially when the council is already spending close to $1 million a year on propping up Fun4Kids and Flagstaff Hill).

Indeed this new idea, if it is accepted, only widens the discussion – from traders to the general community – and we should now all be invited to have a say.

Bluestone Magazine is not alone in its concerns.

 

[dropcap style=”color: #a02f2f;”] A [/dropcap]s it so happens, not only did we stumble across Mr Herbert’s Facebook post today, but the council sent us a wad of documents in response to a Freedom of Information request we lodged in late May regarding the levy.

We are still working our way through these documents and will reveal more over time, but email correspondence between the council’s Director of City Growth, Bill Millard, and Commerce Warrnambool as recently as April this year indicates that both councillors and Council Chief Executive Officer Bruce Anson wanted to see much more detail on how the first $600,000 would be spent.

“I think one of the things you guys do need to work on is answering the question that Bruce asked Richard (Montgomery, from CW) ie. what is the $600k going to spent on in year one, remembering that council needs to sign on to the quantum and the KPIs,” Mr Millard wrote on March 6.

“Personally, I think you need to be definitive here. It will hurt your overall push if the councillors don’t know what the money will be spent on.”

You were not wrong there, Bill!

Mr Millard wrote another email dated April 1 – just weeks before the levy process was approved by the council – indicating councillors were still seeking critical details.

The email is too long to reproduce in full here, but it summarises the questions from councillors, including, again, the need for some firm details on how the money will be spent in the first year, how Commerce Warrnambool decided on the figure of $600,000 as an annual total, and what was the level of support for the levy among traders.

I would strongly argue that these questions still stand.

[dropcap style=”color: #a02f2f;”] I [/dropcap] spoke to Mr Herbert today and he said he was hopeful of reaching some middle ground, although he did not wish to go into any further detail because the negotiations were at a critical stage.

“Members of Commerce Warrnambool and Warrnambool Traders Action Group are working together with the council to try and get an outcome that is hopefully more suitable,” he said.

The trader action group has put forward a compromise of their own which, I understand, has already been knocked on the head by Commerce Warrnambool.

Their suggestion was to withdraw the levy proposal, have key members of the action group join the Commerce Warrnambool board and start from scratch as a united group.

This united group would review the business plan, look at how other towns run their Chambers of Commerce and come up with a fresh approach to council by November.

Perhaps that would provide the breathing space that this whole messy proposal so desperately needs.

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OPINION:

[dropcap style=”color: #a02f2f;”] A [/dropcap] ballot will soon be held on whether Warrnambool traders should pay a special levy to fund a $600,000 marketing plan by Commerce Warrnambool, but the main game – to unite the traders as one – has already been lost.

Traders for and against the annual levy are deep in their trenches and, no matter how the ballot falls, there will be bitterness on at least one side.

Even the ballot process itself is fundamentally negative: rather than relying on enough traders to vote for the levy, it will go ahead unless enough traders vote against it. Hence there is now a very active and growing grassroots campaign by the Warrnambool Traders Action Group asking traders to be sure they object.

Given this no-win situation, I would suggest it is time to scrap the levy idea and start over.

It is three weeks since Bluestone Magazine exposed the full extent of the plan by Commerce Warrnambool (a chamber of commerce) to ask the Warrnambool City Council to attach a levy to 1346 commercial and industrial properties based on their capital improved value.

The levy, which would rise by 5 per cent each year for the next five years, would fund Commerce Warrnambool to operate as a major promotional and marketing body for the city.

Of the $600,000 to be raised, around $200,000 will be used for administrative and professional development costs, $100,000 will go toward an annual infrastructure project, and the remainder will be used for a range of promotional and marketing activities.

Regardless of its intent, however, the roll-out of the levy plan has so far been a dismal failure.

 

[dropcap style=”color: #a02f2f;”] D [/dropcap]espite Commerce Warrnambool saying it had contacted hundreds of people about the idea, a large number of traders, including several high-profile businesses, said they knew nothing about it until they read it in Bluestone, on Facebook, or after it was tabled as a fait accompli at the May 19 council meeting.

These traders fall into two broad camps:

i) those who object to paying any more than what they already do in council rates and various tourism levies;

ii) those who might support the concept, but fear Commerce Warrnambool will only duplicate what is already being done by Warrnambool City Council, the Great South Coast Group and the Great Ocean Road Regional Tourism Board.

Last week, the city of Geelong was held up as an example of how a trader levy for marketing and promotion can work very well, but the Geelong model is run completely differently to that being proposed for Warrnambool.

 

 

[dropcap style=”color: #a02f2f;”] I [/dropcap]n taking a closer look at Geelong, there is a template for how things could work here.

First, the Geelong Chamber of Commerce has nothing to do with the special levy: it does not collect it, spend it, administer it or receive a cent from it.

Instead, the Geelong Chamber of Commerce – which has been running for about 160 years – is an independent body funded through memberships, corporate partners and fundraising events and does all of the things that a business group aims to do, such as networking and lobbying.

Second, the Central Geelong marketing levy, as it is called, is collected by the City of Geelong Council and is administered by a special committee set up within the council.

The Central Geelong Marketing Committee is made up of 12 volunteer representatives from local businesses and sectors, plus one councillor, and supported by a four-person executive team that is employed by the council, including CEO Jodie Reyntjes. (You can read more here).

The committee manages a levy that in 2012-13 raised $671,000 and the process appears entirely transparent and fully accountable: they hold monthly public meetings, upload their monthly minutes and produce an annual report.

Indeed, in 2009, Ms Reyntjes wrote an interesting presentation that underscored the importance of being able to measure the success of the levy in real and meaningful ways: right down to counting the number of pedestrians in the city on a given day.

Such an approach avoids unnecessary duplication of staff and projects, and sits the levy within an established civic framework rather than trying to replicate this framework outside the council and from the ground up.

The Central Geelong levy has been running since 2001 – although not without its detractors – but its ongoing survival and successes indicates that it is doing something right.

Could we learn something from our coastal cousins?

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[The promotional video above was made by the Warrnambool City Council in 2011. It reflects the type of work that Commerce Warrnambool now wants to be paid to do.]

 

OPINION

[dropcap style=”color:#A02F2F;”] S [/dropcap]hortly after we started Bluestone Magazine last year, I wrote a piece about the importance of transparency, accountability and a preparedness to ask the hard questions of those tasked with running our city.

At that time, I lamented the fact that people who were prepared to put their head above the sand dunes and ask the prickly questions were often howled down as being trouble makers, out-of-touch, or holding the city back.

Judging by the response to the Warrnambool traders who have stood up and challenged a proposal to hit them with a new levy, little has changed.

The men in suits have again rallied to remind the rest of us of who they think should run this city and that we best shut up and let them get on with it.

That has certainly been the tenor of the argument as to why Commerce Warrnambool, a volunteer body of around only 100 members, should be allowed, via the Warrnambool City Council, to whack every trader with a special fee to raise $600,000 for promotions and marketing.

The proposed fee, which is based on property values, would run for five years and increase by 5 per cent each year.

Traders have every right to ask questions – and lots of them – especially when the finer details about this levy have been so vague.

 

 

[dropcap style=”color:#A02F2F;”] A [/dropcap]s was revealed when we first wrote about this issue last week, numerous traders, including several high-profile business operators, said they knew nothing about the levy until it was presented to council as a virtual fait accompli.

Instead of questions being asked of Commerce Warrnambool as to why its communications strategy had obviously fallen short, the guns were turned on the traders.

In its editorial on Friday, the local newspaper spoke of the perils of conservatism, of traders ‘tying themselves in knots’ and failing to embrace change, and that, as a city, Warrnambool really needed to grow up. (As an aside, the paper has failed, thus far, to mention that its General Manager, Tim Lewis, is a general board member of Commerce Warrnambool. Update: a new board has since been elected and no longer includes Mr Lewis. He does, however, remain a member of the organisation.)

These traders are the same people who have busted their guts renovating the often rundown CBD properties that they are forced to rent at prices which can be on par with those charged in suburban Melbourne. (Indeed I know of one hairdressing salon that floods each time it rains, but the property owner refuses to upgrade the plumbing.)

These traders have stripped back floors, painted walls, installed tearooms, hired staff, filled out myriad paperwork for everything from an A-frame to window signage and now, for their sins, they work long and exhausting hours in the belief that they have something to offer Warrnambool: and they do.

But apparently they could do being doing even better, if only they each paid another tax.

 

 

[dropcap style=”color: #A02F2F;”] S [/dropcap]o let’s look at how this $600,000 would be used and how many innovative ideas it might fund.

According to Commerce Warrnambool documents, it is broken down into something like this:

•  $150,000 for an executive officer and associated costs
• $110,000 for “branding” of Commerce Warrnambool and a website
•  $70,000 for professional development
• $10,000 to attend the Regional Living Expo (currently attended by WCC)
•  $25-30,000 for the annual business awards (currently run by WCC and sponsored by Powercorp)
•  $130,000 for local promotional events – from speedway, to whales, to Christmas decorations
• $100,000 for an annual infrastructure project of some description.
• (plus, although it is not specifically mentioned, an extra $15,000 for WCC to handle the levy)

Using these figures, just over a third of the levy – $230,000 – will be spent each year on local promotions and physical works. So far, I can see little difference from what is already being done via the WCC, the Great South Coast Group and the Great Ocean Road Regional Tourism Board.

No wonder traders want to ask a lot more questions and three that come to the top of my mind immediately, are:

i. who will decide how the money is spent?

ii. what are their qualifications or experience to do so?

iii. how will the success of the projects be measured and by whom?

Commerce Warrnambool (and some councillors) have pointed to Swan Hill as a shining example of how the levy can work, so let’s have a closer look at that.

 

 

[dropcap style=”color: #A02F2F;”] P [/dropcap]eter McNabb and Associates, who were paid a large chunk of the $35,000 in public funds that Commerce Warrnambool received last year, developed the Swan Hill levy model, so it mirrors what is planned for Warrnambool.

The levy has been in place in Swan Hill since 2002 to support a group called Swan Hill Inc, but that doesn’t mean it is popular.

In fact it was described by the Swan Hill local paper just two months ago as “controversial“, with the Swan Hill Rural City Council holding a Special Meeting on April 1 to discuss if the levy should continue for another five years.

The council received more than 380 written submissions, including 318 from people directly affected by the impost. Of the 318, 177 people (24%) supported it, and 141 (19%) didn’t – hardly an overwhelming endorsement.

The council went ahead with the levy, but not without its internal critics, such as Cr Gary Norton who was quoted by the local paper as saying:

“Swan Hill Inc has been operating for 10 or 12 years and what have they achieved? Lots of shops and businesses? Lots of empty shops?”

Cr Norton said Swan Hill Inc had not been effective enough in what he believed was a difficult financial climate for local business in Swan Hill.

“If we’re going to attract new businesses we need to reduce our overheads,” he said.

“High rates are killing the region. I urge council to squash this.”

You could swap the words Swan Hill for Warrnambool and the sentiment, for some, would be the same as Cr Norton’s.

So here’s an idea: why not tax the property owners, rather than traders who are being charged a levy based on a property value for a building that – in most cases – they don’t even own?

Then we might get a sense of how popular this idea really is among those with power.

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OPINION

[dropcap style=”color: #abccab;”] I [/dropcap]t’s a rare day when businesses ask other businesses to pay more – not less – council rates, but that is exactly what is happening in Warrnambool.

A group called Commerce Warrnambool has asked the Warrnambool City Council to introduce a special levy that would see 1300 commercial and industrial businesses each pay between $100 and up to $6000 a year for the next five years, with the first year expected to raise $600,000.

The levy, based on capital improved property value*, would rise by 5 per cent each year for the next 5 years.

And what would all this money be used for?

Well, according to the Commerce Warrnambool business plan, the first $200,000 will be used to employ a chief executive ($90,000) and associated support staff ($110,000), with the remaining $400,000 being spent on what can best be described as a huge public relations exercise.

Commerce Warrnambool, which started as a voluntary organisation in 2010 and has about 100 members, effectively wants to professionalise its role in promoting Warrnambool as “a great place to live, work and invest” (the same old mantra) and be paid to do so.

There are already at least three other marketing and public relations bodies that are funded to perform this task, including within the Warrnambool City Council, the Great South Coast Group and the Great Ocean Road Regional Tourism Board, but Commerce Warrnambool clearly feels there is room for even more.

 

 

[dropcap style=”color: #abccab;”] T [/dropcap]he group will also, among other things, lobby the council (in other words, the council will collect a levy that will be partly used to lobby itself) and help to promote events such as the May Racing Carnival, Port Fairy Folk Festival, Fun for Kids and the Allansford Speedway.

From from what I have seen, these events already have significant marketing budgets and, between them, attract tens of thousands of people.

Given the record number of empty shops in downtown Warrnambool, a proposed 5.5 per cent hike in council rates, and the economic times that trouble most traders, I thought the idea of forking out money for yet another public relations and marketing project would be shot down in flames.

But no.

Commerce Warrnambool says it has contacted at least 900 businesses and received between 250-300 letters of support. This means that only a third of those surveyed like the idea, but I am stunned that it is even that high.

The council, sensing an opportunity to partially outsource another of its functions, has seized on the idea and recommended that the special levy go ahead: the councillors will vote on it Monday night (May 19).

But let’s think about this for a moment.

Do we really need a special levy to promote how wonderful Warrnambool is? Why not spend the money – if we are going to travel down this path – to improve what people actually see and experience when they come here?

Perhaps, for example, some of the $600,000 could be used to help sustain The Artery, which has given a heartbeat back to the lower end of Timor St, but is largely funded by volunteers and artists paying what little they make to hire an exhibition or studio space.

Or maybe it could be used as a building restoration fund, where property owners are given an incentive to freshen up the many tired, peeling and grubby shop facades around the city.

 

 

[dropcap style=”color: #abccab;”] O[/dropcap]ne of the Commerce Warrnambool arguments is that other regional cities have set up a business fund, so why don’t we? It lists Ballarat, Shepparton, Swan Hill and Mildura among its examples of similar schemes, yet if we pick just one of these – Mildura – there is a cautionary tale to be heard.

The Mildura Rural City Council collects a special levy on behalf of the Mildura Development Corporation and Mildura Tourism – both of which are subsidiaries of the council – to be used for the very sort of activities outlined by Commerce Warrnambool.

Last year, however, the council swiped $100,000 from the special levy fund to use for other purposes so that it could keep its overall rates down. Ouch.

Imagine, for a moment, if instead of Commerce Warrnambool fronting up with this levy idea, it was The F Project – the local artists’ collective that started in 2008 and has around 150 members.

I am trying to picture the F Project president, instead of Commerce Warrnambool president Tony Herbert, asking the council to tax every business owner for a special public art fund that would raise $600,000 a year.

This fund, instead of being used for promotion and lobbying, would be used to commission artists from around South-West Victoria to create new works of public art (including murals, street furniture, sculptures etc) that would be installed around the the city each year.

Such a fund would buy a lot of public art and produce tangible, highly-visual results, yet there is little doubt The F Project would be laughed out of the council offices for suggesting such an “indulgence”.

Yet it is the tangible things – not just more words – that will ultimately make a difference to people wanting to visit, or move, to Warrnambool. There is no small irony in the council spruiking its Liebig St renewal plans from an empty shop in Liebig St, which is next to another empty shop, which is a few doors from another empty shop…

Money needs to be injected urgently into physical projects that will bring the city back to life – and we don’t need to pay $600,000 a year for somebody to tell us that.

[*The original version of this piece said the levy was based on 3 per cent of property value, which is incorrect. The levy will be calculated as a rate in the dollar based on CIV.]

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