Port Stephens Council calls on CEO and president of Port Stephens Koalas to stand down while investigation takes place

The motion, moved by Independent Councillor Ken Jordan does not name the two, but the president of Port Stephens Koalas is the retired former mining official Ron Land, and the CEO is Port Stephens businesswoman Leah Anderson, who is standing as the ALP's candidate for mayor in the December local government elections.

A background report to councillors in last night's agenda written by council general manager Wayne Wallis says that Port Stephens Koalas had agreed to an "independent and confidential investigation".

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In an at-times passionate debate, Cr Jordan insisted he was acting on behalf of the people who had contacted him in tears with their concerns, while Labor councillor Giacomo Arnott criticised the notice of motion as "a joke" and "a sham political attack" that needed to be "voted down".

Cr Arnott moved a series of amendments - including one that would have had council acknowledge it did not have the power to have anyone step aside - but these lapsed for want of a seconder.

The council passed the original amendment on a division.

Earlier in the evening, the council had heard a public voice presentation from Ms Anderson and Port Stephens state Labor MP Kate Washington.

Both speakers said the criticisms were politically motivated against Ms Anderson as a Labor candidate.

Ms Anderson said she had been "publicly slandered and bullied" at recent council meetings.

"I am here tonight to let you know that I am not going to sit back and accept the appalling behaviour from some of the councillors in this room," Ms Anderson said.

The heated scenes at last night's council meeting are the latest episode in a growing controversy over the koala hospital, which came to public light in August when the Newcastle Herald reported that the koala board had appointed Ms Anderson - then recently announced as Labor's mayoral candidate - to the CEO's job without an external search.

On October 4, the Herald reported that a majority of councillors wanted an investigation into the management of Port Stephens Koalas over allegations of bullying, intimidation and poor animal care were levelled at the organisation and Mr Land.

At the previous council meeting a fortnight ago on October 12, Cr Jordan a lodged a motion without notice calling for an investigation but it was disallowed by the chair for not being of sufficient urgency to consider.

It was unclear tonight what impact the resolution would have, as Mr Wallis's report to councillors makes it clear that Port Stephens Koalas is a separate entity to the council.

The background report says the council has a commercially binding services agreement with Port Stephens Koalas.

"This arrangement is a highly cost-effective way for council to have koalas cared for and displayed at the Koala Sanctuary, which is critical to the success of this business," the report said.

"Following media reports, PSK have advised council an independent and confidential investigation of allegations relating to the management of PSK and the koala hospital will be undertaken."

Cr Jordan told the council he had a long speech prepared for what was his final night on council after 18 years but he was not going to read it after receiving "a legal letter" cautioning him about defamation.

But he said he would be negligent if he "did not stick up for" as many as 20 people who had contacted him in tears, "balling their eyes out".

"If you GIPA my emails you will probably get some of them, or I will share my texts, but these people are that scared they said that they vomit, they vomit, in fear," Cr Jordan said.

"Why would we not look after these people? They are people from Port Stephens who are in tears on the phone who are absolutely frightened. They've been bullied. That's what they tell me."

After Cr Arnott spoke in support of the koala hospital and against the motion of Cr Jordan - calling it "pure gutter politics" - Cr Jordan said that Cr Arnott's criticisms showed what happened if people came forward with complaints.

Cr Jaimie Abbott and Cr Glen Dunkley also spoke in favour of the motion.

"This is a very poor reflection on the ethics of the Labor Party," Cr Abbott said.

"The fact that we are in this situation where Labor is here tonight in a vicious dispute with the council over the koala hospital, tells us where the politics is coming from. Labor has made the koala hospital controversial, and frankly that is disgraceful. The hospital is for the koalas and its not for helping the Labor Party to win elections."

The Herald was unable to obtain comment from Mr Land after the vote.

Ms Anderson said that "as with all matters involving the operation of Port Stephens Koalas, the board will decide".

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