TCorp CCS loan council management said was a ‘certainty’ fails to materialise

Two confidential offers for Council Chambers too

Next Thursday Coffs Harbour City Councillors, at the last scheduled meeting before the Council elections on 4 September, will be asked to approve a 30 year loan with Westpac for the CCS.

By The Editor

Those of you who have been following the CCS saga reasonably closely might be somewhat taken aback by this because Senior Council Executive staff regularly said that the state government TCorp loan from the state treasury for a period of 30 years at 2.2% was merely a ‘formality.’ Indeed some Councillors who voted for the CCS said this was a key reason for doing so.

Wrong!

But the agenda for the next Council meeting states that these executive staff members were, at best, being too optimistic. This is what they have to say in the agenda under item BS 21/41;

“In recent discussions/meetings with representatives of TCorp, TCorp have communicated a reluctance to lend for ‘construction’ projects, particularly as the sole lender, due to the increased risks involved and they have indicated they are unable to offer a borrowing over a 30-year term. TCorp has also advised a range of additional due diligence requirements would need to be met, noting that this additional level of scrutiny has not been requested by the commercial lenders that local government traditionally relies upon for borrowing requirements.

TCorp has suggested that Council explore borrowing from the broader market; that is, the traditional commercial lenders, as a viable alternative.

For comparison purposes, it should be noted that as at 12 July 2021, TCorp’s indicative interest rate offered to Local Government generally for 20-year fixed rate amortising funds was 2.21%. However, as with all indicative rates, these may change for any particular borrowing based on the credit assessment and the time at which borrowing is actually drawn down. Recently, TCorp advised that on 11 June 2021 it had loaned a 20-year fixed rate semi-annual amortising funds at 2.59%. As mentioned above, an indicative rate was not formally sourced from TCorp through the EOI process as they are unable to offer a borrowing over a 30-year term, whereas other commercial lenders will thus de-risking the subject borrowing.”

So indicative rates do change? And 30 years wasn’t a guaranteed period, least of all at 2.2%?

If you think you are reading some ‘humble pie’ above you are right. Quite a lot of it in fact.

So now what?

Never fear Council has gone to the commercial market and after much analysis of a number of expressions of interest (EOIs) has arrived at this recommendation;

That Council:

1.    Enter into a fixed interest rate loan agreement to borrow $50.265 million over 30 years with the Westpac Banking Corporation.

2.    Authorise the General Manager under delegated authority to execute the loan agreement.

Interestingly the fixed interest rate payable for this loan appear to be in an attached ‘Confidential document’ One has to ask why such a thing is confidential! The opacity is highly problematic.

But get this!

It is proposed to draw down the loan by 14 August 2021. Why might that be?

Well according to Council; “in order to meet Council’s contractual commitments for the Cultural and Civic Space project it is recommended that Council progress the borrowing of funds in line with adopted Council minutes. Four EOIs have been received offering funds to fulfil (sic) Council’s loan requirements and it is recommended that Council accept the loan offer to borrow $50.265M at a fixed rate over 30 years with the Westpac Banking Corporation.’

Does that make you feel better? Especially as we now know the building is getting smaller in public and staff areas but bigger in Executive areas as per yesterday’s story?

Read it here; https://coffscoastoutlook.com.au/the-incredible-shrinking-building-yes-its-the-ccs/

The following comes from the NSW Planning Department which was referenced and linked in yesterday’s story. Red is a space decrease and black is a space increase;

But wait! It gets better! We now have two offers for the Council Chambers. ‘Confidential’ ones though

Agenda item BS 21/40 refers to the sale of 2 Castle Street, the Council Chambers no less.

A fortnight ago we knew council had an offer for $7.25m for this building. Now we have two confidential offers, presumably including the formerly public offer. And we have this recommendation from council executive;

Recommendation:

That Council:

1.       Adopts the recommendation in Confidential Attachment ATT1 BS21/40 CONFIDENTIAL Summary of Recent Offers and Recommendation.

2.       Notes that the matter will remain confidential until all necessary documents necessary to facilitate the sale and transfer of the property are executed by both parties.” (CCO emphasis added)

So ratepayers how do you like being a mushroom? You know as in kept in the dark and being fed unadulterated bullshit?

Am I being too harsh? Or does the rubber stamp lead photo capture how you feel?

Because it sure as heck mirrors my feelings.


The agenda for Thursday 22 July’s CHCC meeting referenced above can be found here; https://infocouncil.coffsharbour.nsw.gov.au/Open/2021/07/CO_20210722_AGN_2245_AT_WEB.htm


For just a couple of past CCO stories on the interest rate issue see; https://coffscoastoutlook.com.au/can-councils-ccs-interest-rate-estimate-be-believed/ and this one from the ABC (reproduced on CCO) on 28 April 2020 which states;

The council planned to fund the construction by selling four of its buildings, including its existing offices, and applying for a loan from the State Government’s financial authority, TCorp.

But Ms Hancock said legislative amendments made due to COVID-19 prohibit loans for works on council offices.” See; https://coffscoastoutlook.com.au/mayor-says-to-state-government-give-me-good-reasons-in-writing-to-stop-cultural-civic-centre/

19 thoughts on “TCorp CCS loan council management said was a ‘certainty’ fails to materialise

  1. The rubber stamp lead photo encapsulates the feelings of many, I suspect. If a scriptwriter wanted to produce a screenplay featuring all of the elements of tragic farce, embellished with a little suspicion of incompetence and/or corruption, s/he could not have done the job as well as those who have fabricated this saga.

    My (insert Mythical Omnipotent Being), what a effin’ mess!

  2. Seriously this Council needs to be stopped NOW and an administrator placed in charge until the elections. With the giant clusterf*ck that this has turned into our local member should be stepping in with a no confidence motion and putting a freeze on everything!

  3. So where do the other millions on top of this planned $ 50.000,000 come from? This is a total mess we are in thanks to the GM and Knight and the support of 3 councillors. Unbelievable. Who are the other offers from? People waiting till council is desperate for money now to want to purchase buildings for a much lower amount?

  4. You will note that CHCC Management continually refers to this statement in its recommendations to councillors: “in line with adopted Council minutes”. That is to put the weight of responsibility entirely on councillors. As in “you did this, so you continue with it.”

    That would be, at a guess, the usual format for recommendations, not having followed recommendations from councils elsewhere. Please note, importantly, that not once has CHCC Management referred to what itself says. Nowhere. And never in meetings.

    Please listen in to this next meeting. You will hear General Manager Steve McGrath continually “indicating” and not stating. This is slippery language. It is the language of a person trying to evade being held to account. You will also notice that McGrath is long-winded and evasive in ‘answers’ (non-answers) to questions that point towards his or his team’s failures, or points towards failures of the project or Council in general, again, to evade and to direct the councillor away from the target to which the question was directed. Further, you will notice that McGrath answers instantly, and directly, and quickly, questions that support the agenda he is pushing.

    Do listen. He’s exceptional at it. Clear and quick and distinct when the answer is “for” the project. Evasive, long-winded and misdirective when the question is “against” the project.

    This project has been going a long time now. It has evolved. Councillors voting approval for something many, many months ago, into years ago, voted for a certainty that they were led to believe. It was the “project” at that stage. It was CHCC Management that changed and altered the thing. It was CHCC Management, after having changed the project, then told councillors that they (councillors) had approved something months or years ago and therefore are recommended ‘now’ to approve the (changed) project on that previous basis.

    Slowly, slowly, bit by bit, councillors have been led down a path that CHCC Management wants them to go, according to what CHCC Management wants to happen. To say it another way is that McGrath recommends project “A”, then changes to project “C” then “K” then “L” down through the months and years, now to “U”. But its recommendations carry that “you voted for the project – in line with council minutes” regardless that they’re now at U stage, a very different project in very different ways, referring to a project at say stage “K”. So McGrath can pick and choose from stages as to how councillors voted and, effectively, throw it back in councillors faces — so councillors feel they must continue.

    The project carried this big imprimatur: being the “Cultural and Civic Space”. So it has this continued appearance of being the one project. It is always referred to as the one project. Yet within it, things change, emphases change, targets change, finances change, etc. It is never in truth a singular stable entity.

    CHCC Management and those councillors supporting it refer to these changes as “normal” for a large project, calling up all manners of selective data to back it up. The question though is whether that data is relevent to this precise situation. Cr Townley, for instance, has referred to selective data (selected by consultants) that says: these things work so it will work here. (Really? Has everything that’s the same as those locations and different from those locations been taken into account?). The main point here is that there is always something somewhere from which to back up McGrath’s offerings on the day. It’s a consultant’s world. So much is available you can get anything you want, arrange it any way you want, and it will be persuasive and ‘professional’.

    (If you think about that for a sec, you’ll see that consultants have created a self-fulfilling treadmill for themselves, continually providing an income, and a big one at that. Data is chosen selectively from sources that supports a project, this project is built, the project goes into the treadmill and more projects get built, all adjusted and changed with more selected data. It’s at the point now where selected data could end up in serious recommendations to councillors in Wee Waa to build an ocean breakwall.)

    Nothing will change for the three who would vote for whatever incarnation and cost this amoebic entity turns into. But for someone like Sally Townley, who bases her decisions on a standpoint, so she says, that standpoint that she has in her mind has every chance of being a very different standpoint from when it occurred, and upon which she later decides. In short, she could easily have been hoodwinked by the way this Mgmt operates. The reverse is true, too. Paul Amos may well vote for this incarnation as it meets the alterations that he finds agreeable. Please don’t be surprised if he does.

    It’s a slippery, amoebic project. Forget selective data from somewhere else. That’s what this ‘project’ is. This amoebic slipperiness is born of a single principle: it was never conceived in clarity. “Pure as the driven acid sulphate soils” is an apt description for the ‘vision’ in it. And it is born of this: it is run by CHCC Managers that are on what appears to me as “work experience” for a job this size. If not, show me where on their CV they’ve successfully managed a huge construction project to completion on budget.

    This lengthy comment is for a reason, though. The slipperiness of its evolvement, the indistinctness of Management’s ‘answers’ in meetings — the place where the rubber hits the road — is at the point, from having listened to it so much as to form this view, of being alarming.

    Anyone who has done a business deal would know the difference. The party with whom you’re dealing is straightforward, simple as that. It’s in the better interests of the goal. But not here.

    Far from it. I think it so alarming that an ICAC investigation is appropriate.

    I guarantee you won’t catch out McGrath. Go through every record on tape and you’ll find he can’t be tied down. Listen in next Thursday, you’ll see why. But isn’t there a “spirit of the law” involved? Is there misleading going on? Not with what is said, but with how it’s said, how it’s framed, how it’s presented, how discourse is redirected, and so on?

    It’ll never happen, of course. The new council will be too busy to be engaged in an ICAC referral. It is with some considered hope, however, that the nine candidates once elected keep it in mind.

    Please take heart. All that’s changed, once they vote these items through, which is reasonably expected, is that the element of engaging the NSW Government to assist in arranging finance now, along with Westpac, which can do so as well, to stop the current incarnation at the point of the new council’s first meeting, and re-purpose the block for a housing and or aged care precinct. The builder’s contract, by the looks of it, is less of an issue. These both can be corrected.

    We know what we’re in for. It’s crunch time. None of the nuances above, though definitive to the project, will matter to current councillors. They’re caught up in the melee. Only from outside of that can this be seen clearly. Councillors have been led down a path and they’ll continue on it.

    On that, nothing would give me more pleasure than to be wrong.

    So what does “crunch time” also mean? It calls for the strongest mayoral leadership in the new council that Coffs Harbour and its region has ever had. It calls for new councillors, who don’t yet know they are, to look upon this and be hardened as steel for it not to happen to them.

    Coffs Harbour City Council Senior Managment needs to be taught this lesson. This — the ‘project’ over all this time, and on other matters — is not how to be treated.

    The game is finished. Let’s watch them slobber in the final throws. Let’s wear it. Then it’s over.

    On the more important side, the inspiring direction our minds can move into, is the knowledge that a “plan” is what’s required, ever, always, rolled gold electoral truth, to be elected in community confidence as a mayor. I’ll end now with this: You have one, on these pages. Rename it what you will. It is the three-point plan, of three distinct and pristine visions. One of which is “world class” and puts Coffs Harbour, along with the region, into peoples’ minds as the place to visit.

    Candidates for mayor, think hard on this plan. Ask yourself how difficult it is to get a message across. How much more difficult then to get that message repeated by others, commended by others — the voters. This three-point plan achieves that. 90% of voters who hear about the “three-point plan” will remember that there are three points to it. They’ll remember what they are. The remaining 10% will remember that there’s a “plan”. That’s the recall and relay factor. It is incredibly strong. So what you’ll have are people who can relay this information, about you, about the future, to others. By this relay — friends talking — your plan will reach deep into the hard-to-get trenches of the community: those who only think about politics and voting at the latest minute.

    Without a clear plan, which achieves this recall and relay necessity, few will be able to remember tomororow what you are on about today, and none will tell their friends. What you have to offer may be undeniably strong in your mind, and those closest to you, but not where it matters: into the deepest corners of the voting public. And this plan is your best chance for media to run it, getting it into those areas all the moreso. Without a clear plan, the strength in your mind of what you want to achieve and can achieve is lost to the wind.

    The Three-point Precinct Plan has been created for you. By the community. Call it what you will. It’s yours, and get a hold of it, and do it right, and you’ll be voted in with a community thrilled.

    1. 40c’s assessment is disturbing. No, it’s alarming, given that it may be hideously accurate. If the business of Coffs Harbour Council, highlighting the tragedy of the new council offices with attached cultural spaces, were written as a screenplay, it would have a distinctly Orwellian feel. “Animal Farm” and “1984”, flavoured with a touch of Golding’s “Lord of The Flies”, come alive in this saga of deceit, illicit machinations and treachery.

      No, I’m neither joking nor exaggerating.

      The Coffs community has, in my opinion, been right royally ripped off, by a council which is either inept, incompetent, incapacitated or deliberately corrupt. The picture which 40c has painted, suggests a group of councillors which has been effectively “played” by council management. Some of these councillors may have been swimming innocently in waters too deep for their safety, whilst others may have been happy to see their fellow councillors drowning in a sea of bullshit, which may have been created with Machiavellian guile and efficiency.

      I don’t know what is true. There is too much conflicting data available for me to sort through it in my lifetime, but I do know one absolute truth. This issue stinks. It’s at least as rancid as any of the feds’ and state pollies’ pork-barrelling events in my view, and it cries out for an independent investigation. The miscreants need to be identified and punished for their apparent misdeeds. It’s a matter of justice being done for our community in my opinion.

      1. Julian, it’s not a case of suggesting, if I may add, it’s evident in every single meeting. CHCC Management, Steve McGrath superlatively, “plays” councillors in every single answer he provides unless the question points towards support for what he wants to do. Check in this Thursday and you’ll see it on display, and see then if you don’t agree with that opinion.

        I don’t think it’s malicious on behalf of Mgtmt, at all. Steve McGrath I’m sure has long seen and felt himself sitting high above the street in ‘that’ big building, surrounded by councilalia, protected by it. The proposition made publicly is that this will improve council operation; the obvious way to improve council operation is to get rid of him, I would have thought. I do think, all considered, there is cause for investigation into this project.

        Think back to other GMs and you won’t find this “us vs them” situation he has manifested. Other GMs work with councillors, not as he does, which is to put up an invisible barrier between management and councillors which in effect says: catch me if you can, you can’t, do what I want, you’re elected you’re lowly, I know what I’m doing, just let me do it, questions are an imposition. All in polite eloquence. It’s not good.

        A correction to my above comment. CHCC Management does refer to itself, in meetings, but only to tell of its overachieving. As people know, this is a sure sign that things are amiss.

        A little while ago I wanted to add a comment about how Steve McGrath affects proceedings with his responses to councillors questions, then decided to let it pass, but with this meeting being highly viewed, I think it may help to show a little of what to look for, so I’ll prepare that comment meanwhile.

  5. After two years of conflict, we the “shareholders” stand powerlessly by as our grid-locked Councillors are presented with recommendations cloaked in secrecy.

    The TCorp loan was misrepresented as secured. Now TCorp can’t (or won’t) accommodate us.
    A Westpac loan of $50,265,000 at (for we the shareholders) an undisclosed interest rate.
    The funds will be spent immediately, 3 weeks before we can halt proceedings at the Ballot Boxes.
    Fire sale our Chambers at $7,250,000 minus 3 years rent to NET 0NLY $4,700,000 towards the CCS. PANIC! PANIC! PANIC! If we act in haste, we repent at leisure!

    For our Councillors, this is a “Poison Chalice”. To burden a new Council with these commitments only hours before entering the caretaker mode is unconscionable. Councillors seeking re-election should consider this critical vote very carefully.

  6. Surely this statement of recent weeks by the Minister prohibits McGrath from recommending this loan?
    “But Ms Hancock said legislative amendments made due to COVID-19 prohibit loans for works on council offices. She said that means the Coffs Harbour City Council would not be able to borrow money to build the Cultural and Civic Space for the foreseeable future.”

  7. One of the offers has to be from the CEX Club (remember the offhand comment by Knight “maybe it – Castle St building -could be used for an entertainment centre”?)

    Caretaker starts 6 August. Is this loan signing likely to happen before that? Given that the Councillors have to pass it first?

    What happened to the expected recouping of $20million from the sale of 4 buildings. Arguably the admin building would be the most valuable; the museum has gone for $1million, the admin building may reach $8million. Seems to me to be less than half realised.

    What a bunch of financial morons, led by the GM (and they pay him HOW MUCH?)

    Grrrrrrrrrrrrrrummmmmmmmmmmppppppppppppppppp

    1. Dianne, the caretaker role starts next Friday 23rd July. Nominations open 6th August. That makes the situation even more precarious!

  8. But, but but but but but – NO, I am not stuttering. Mr Beswick, Council’s Finance Director, stated and supported by our illustrious GM, “Tcorp have expressed a lot of interest in lending us the money”

    Show us the money Stevo !

    1. I suspect, and as we all would be hoping for, that Mr Beswick and our charming Mr McGrath may soon partake in a little “creative restructuring” of their CV’s in readiness for their next “circus”?

  9. Have you ever watched a strangler fig vine take over and destroy a tree? As our CCS shrinks in size and quality, the administration office now occupies an additional; 284 square metres of floor space! Another 221 square metres for services. Will the Regional Gallery supporters welcome the loss of 109 square metres from their area? This building is not about culture!

  10. I’ve been a Westpac customer for 40 years since I landed here from the US. I plan to let my bank manager know that if this offer is on the table and not retracted I will withdraw both my business and personal accounts which comprise six figures and move it to another bank that I have a smaller personal account with. I urge other Westpac customers to notify Westpac of your intentions if the loan offer remains.

    1. Phil, I think we all have a duty to inundate Westpac ASAP with our grave concerns for the people of Coffs Harbour and for the city itself.
      And yes closing of accounts is a must in y opinion.

  11. Phil: You might quote to your bank the Minister for LG resolution (above) about Council Offices. This building is primarily Council Offices.

  12. Can anyone tell us if Mr. Mc Grath’s and Ms Knight’s houses are on the market?
    Many people hope so. If so. Let it be a quick sale. Good bye. Don’t come back
    not even for a visit.
    So what now? Put the two extra floors on 2 Castle St.
    Now for Gordon Street. Stop now! as of today 19/07/2021. Enough money wasted.
    Leave as it is as a reminder to the stupidity of people who think more of their own self importancee, and not of the people they said they would look after.but in this case that is the last think on their minds.
    Let it sit there for the full 30 years,sunny they are tring to saddle the longsuffering people of Coffs Harbour to.
    In the years to come take your grandkids to see the hole and impress on them what can happen happen, if people go too far. Maybe it will never happen again.
    We can but live in hope.

  13. “It is proposed to draw down the loan by 14 August 2021. Why might that be?”

    Yes why indeed? It can’t be a Westpac stipulation so why does council have to access $50.265 million in three weeks time?

    To tie the hands of any new council? To rob Peter to pay Paul to pay for something else? What? And why?

    I smell a rat.

    And why is a fixed term rate ‘commercial in confidence?” Why is a $7.25m offer for the council chambers that was public two weeks ago now suddenly also “commercial in confidence?”

    Give me a break! That is just plain insulting to residents and ratepayers.

    This senior council management needs to go in my view.

    In my opinion they are unaccountable and incompetent and therefore are also way over paid. The failure to get the TCorp loan on the terms they said would “happen easily” is proof positive of that in my view.

    They would have been booted out long ago in the private sector.

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