[dropcap style=”color: #a5cecd;”] A [/dropcap]s the proposed Warrnambool traders levy rolls into another month without a resolution between the two sides, there is a burning question that remains unanswered: why is the council persisting with it?
Bluestone has been looking for clues.
As we know, more than 100 angry traders crammed into the Warrnambool City Council chambers for its last meeting and demanded that it quash moves to raise $3 million over five years for Commerce Warrnambool via a compulsory levy on businesses.
Despite this show of dissatisfaction, Mayor Michael Neoh used his casting vote to give Commerce Warrnambool more time – until the end of September – to try and negotiate a deal with traders.
What this means is that, behind the scenes, the push is on to split the levy between traders and the council and call it a “compromise”.
As we wrote last month, instead of traders paying the full $600,000 a year, they will be asked to pay less – say, $450,000 – and the council will chip in the remaining $150,000 because it has decided it really wants to help Commerce Warrnambool along.
The council’s enthusiasm is where we have our first clue about what we believe is really going on.
It is a rare day that the council finds a group that is willing to tax its own members to pay for things that the council should be doing, ie. supporting businesses and promoting the city.
If this $3 million fund goes ahead, the council can justifiably shift the bulk of the cost (and responsibility) of marketing, promotions and supporting businesses on to Commerce Warrnambool and have the traders fund it.
Initially, the council thought it would not have to pay a cent (more about that in a moment), but even if it contributes $150,000, all it needs to do is cut a couple of people from its marketing department and “voila!” it has broken even.
[dropcap style=”color: #a5cecd;”] F [/dropcap]or the council’s beancounters, this is a sweet deal in the making, even if not quite as sweet as the traders being hit with the full $600,000 a year, it is an excellent start.
Angry traders, of course, will be told that they can still vote “no” to stop the levy, but if the pressure on opposing traders is considerable now, I can only imagine what it will be like when they are seen to be objecting to a “compromise”.
Given the levy idea has created such a toxic split in the business community, why didn’t Commerce Warrnambool just ask the council for $150,000 in the first place and start small? Well, it did.
Bluestone has learned that since Commerce Warrnambool began in 2010, it has approached the council many times to see if it would provide seed funding (something like $80,000-$100,000 a year for three years) until it found its feet and became financially independent.
At that time, Commerce Warrnambool was primarily a business advocacy, network and support group, which is what chambers of commerce are all about, rather than focussing on the much larger role of promoting and marketing the whole city.
It was knocked back each time.
So what has changed?
We believe the clues lie in a series of events late last year.
[dropcap style=”color: #a5cecd;”] B [/dropcap]y that time, Commerce Warrnambool had in its hands a proposal prepared by consultants Peter McNabb and Associates which, in the face of the council’s persistent knock backs, detailed how a business levy could not only fund its activities, but widen them substantially.
The business levy would not be a seed fund for Commerce Warrnambool until it attracted memberships and corporate sponsorships, but virtually its entire fund. Its budget would no longer be around $300,000 over three years, but $3 million over five years.
Some (but not all) members of Commerce Warrnambool got very excited and now the council was also listening – for the cost-saving reasons mentioned earlier. But there was still a sticking point.
Commerce Warrnambool, at that time, was still operating under its original board of management including secretary Jennifer Lowe.
It’s no secret to those who have watched the council for a long time that Ms Lowe, who is a former city councillor, was not universally embraced by fellow councillors and council staff during her term (that ended in 2012) because of her outspoken stand on many issues.
Imagine if Commerce Warrnambool learned that the council liked its big, bold levy idea to raise $3 million from traders, but it didn’t like Ms Lowe holding a key role in an organisation that was set to become much more influential. The money, or the secretary?
Whatever the scenario, Ms Lowe suddenly stepped down in late November, together with two other founding board members in Darren Harris and Peter Watson.
From there, the levy proposal was rolled out in something of a rush.
Within a few months, a new Commerce Warrnambool board of management was elected – with Tony Herbert replacing Richard Montgomery as president – a business plan went to council, the levy was ticked off at its May meeting, the public notices were being prepared…and then an increasing number of traders realised that they would have to pay for it and the wheels began to fall off.
As it stands, the traders are holding off on their threatened legal action pending more discussions which may or may not see Ms Lowe back at the negotiating table.
It is understood that, privately, she has made her feelings about the levy debacle well known to her Commerce Warrnambool colleagues, but is also among those keen to see the impasse resolved.
Whether somebody left outside the tent can now clean up the mess within it, remains to be seen.
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