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City of Newcastle CEO Jeremy Bath:

Newcastle Now appears to be under the false impression that City of Newcastle must provide them
with ongoing funding. This is not the case. Rather, the contract between the two organisations
makes clear that an annual business plan must be approved in order for any funding to be released.
As such, the City cannot commit to provide ongoing funding to Newcastle Now to a date of their
choosing. An external investigation into funding between Newcastle Now and Council has confirmed
that approximately $4 million of rate payers funds has been released to Newcastle Now during the
past five years alone without an approved business plan. I am currently considering these breaches
and Newcastle Now's culpability in them.

I offer no apologies for requiring Newcastle Now to uphold the conditions clearly stipulated in the
funding contract which involves almost $9 million in rate payers money over a 10-year period. These
conditions cannot be bypassed simply because Newcastle Now has elected to hold its AGM two
weeks before AECOM completes a review of the business improvement association model that has
funded Newcastle Now for the past seven years.

However, in order to ensure the Herald has the necessary facts, in October the City provided
Newcastle Now $165,000 following the approval of an abbreviated business plan. That same month I
asked Newcastle Now to submit an updated business plan to ensure it had sufficient funding to
continue its operation until at least the end of the year. I only received this business plan on
Tuesday, meaning Newcastle Now has provided me just 36 hours to approve a request for a further
$131,000 of rate payers' funds. In addition to the $165,000 the City provided Newcastle Now last
month, they have approximately $250,000 in the bank which is the result of funding previously
provided by City of Newcastle.

The review of the BIA model is due for completion by the end of this month. This applies to BIAs in
Newcastle, Mayfield, Hamilton, Wallsend and New Lambton. Council is holding about $1.1 million of
rate payers funds on behalf of these BIAs. It's critical that funds are spent on projects that are
consistent with the expectations of the businesses who have paid the special rate. The review will
determine whether the current model is delivering value for money, or requires amending.

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