Stonnington: Trader groups in limbo over divisive, $320K confidential funding review

Trader groups have lashed out at Stonnington councillors for trying to axe their funding behind closed doors, after a six-figure sum was spent on reports.

Stonnington councillors have been divided over review which could cut funding to five local trader associations, including the Chapel Street Precinct. File picture.

An inner city council has spent more than $300,000 of ratepayers money on a review of five local trader associations, and tried to keep a decision to axe their funding private.

Stonnington Council commissioned consultant Deloitte and auditor Grant Thornton to review a special rate scheme for trader groups in Toorak, South Yarra and Armadale, and on Glenferrie Rd Malvern and the Chapel Street Precinct, at a cost of $320,000.

Details of the scheme review, previously confidential, were released by Stonnington on October 11.

The review was first discussed as confidential business at the council’s September 26 meeting with a motion passed, four votes to three, to axe the scheme which provides $1.8m annually to the five groups.

Special meetings on September 29 and October 10 to debate reversing the decision were abandoned after not enough councillors attended due to boycotts.

A third special council meeting, scheduled for Thursday night, is tipped to have a similar outcome.

The scheme, organised by the council, collects a levy from businesses in Stonnington and then redistributes money to the trader associations for marketing, promotions and business development.

Chapel Street Precinct general manager Chrissie Maus said removing the scheme would be “a death blow” for many of the area’s small businesses, who would be left without marketing support to compete.

Chairman Justin O’Donnell said the association was angered by decisions to keep the issue confidential and the behaviour of the councillors who support axing the scheme.

Chapel Street Precinct chairman Justin O'Donnell is concerned about Stonnington councillors’ efforts to cut funding for his organisation through a special rates scheme. File picture.

“We are shocked and dismayed that a matter of such dire economic importance to our businesses and city has been hidden behind closed doors under the cloak of confidentiality,” he said.

Following the reports, council officers recommended councillors choose from three options: continuing with the scheme, making changes, or axing it entirely.

Mayor Jami Klisaris and councillors Melina Sehr, Matthew Koce and Polly Morgan have been present at the meetings and support axing the scheme.

Cr Alex Lew, who lodged a recision motion with support from councillors Marcia Griffin and Kate Hely, have boycotted the special meetings, while Cr Nikki Batagol is also against axing the scheme.

Cr Mike Scott has declared a conflict of interest.

Toorak Village traders association president Don Gurr said traders had been left “blindsided” by the council’s report and councillors’ attempts to axe the scheme.

“At no stage did that firm recommend dismissing all the traders associations,” he said.

Toorak Village Traders Association president Don Gurr. File picture.

“They (the council) paid a third of a million dollars to do an audit and then gloss it up in a really tricky manner … democracy has gone out the window.

“They (the councillors) are behaving like kids in their own little cubby house, like a gang that some people can’t join and others can.”

Toorak Road traders spokesman Ian Sharp criticised the spend on the report and said there was minimal consultation with traders.

“It’s a disgrace, and I don’t understand why they’re doing it,” he said.

“If there’s a reason why we’ve gambled it (the money) away, they can talk to me, but they haven’t given us a reason and they (the councillors) haven’t even explained to us why they’re voting against it.”

High St Armadale Business Association spokesman Steve Williams described the processes around the review as “opaque and misleading”, while Glenferrie Road Malvern Traders co-ordinator Alex Hume declined to speak on the issue.

Ratepayers Victoria and Ratepayers Stonnington president Dean Hurlston slammed the council for trying to keep the reports confidential.

“If you’re going to spend that much on ratepayers money, the reasons, results and cost need to be public,” he said.

Mr Hurlston also described the push by the four councillors to axe the scheme as “politically vindictive.”

Ratepayers Victoria president Dean Hurlston. Picture: Kiel Egging.

“For four of the councillors to go out on their own and ignore the other options presented by officers is disrespectful to the staff and the other councillors, because all of the recommendations should have been discussed.”

“These councillors are still trying to prevent their recorded debate becoming public … what is it they said that they are so desperate to hide?”

Cr Klisaris said the item was initially kept confidential following officer advice, which she said was allowed under the Local Government Act.

“Given information has been able to get out there regardless, it was better to release all the documents and get this out in the open,” she said.

Cr Klisaris said she supported axing the scheme from June 30 following the report’s findings, which she said showed the current model was “far too flawed”.

She said the $320,000 spent on the reports was justified, and she supported a new model which would have “proper governance procedures”.

“We hand out $1.8m annually to these associations and my priority is ensuring that money is spent appropriately, and that’s what these audits have helped us with,” she said.

“Council is not looking to de-fund these associations or ensure they don’t continue to exist, its about instilling and establishing a funding model that is equitable with proper governance procedures in place, to ensure ratepayers funds are used appropriately.”

Councillors Koce, Sehr and Morgan were contacted for comment.