Was the CCS loan too high a risk for TCorp?

The recommendation that has been put to Councillors to vote on in two days time, is the biggest decision that this Council has had to make, during the 5 years of their elected term.

By Rodger Pryce, Together We’ll Fix It Mayoral Candidate

The funding for the CCS has now been rejected by the finance arm of NSW Treasury, T Corp, on the grounds I understand that the Coffs Council has not satisfied the due diligence requirements of the lender.

Lenders in the commercial market do not have as strict lending criteria as T Corp. This is identical to the difference in borrowing from a Finance Company, versus a Bank. The risk is higher to the lender so they charge the borrower a higher rate of interest.

So our Council is too high a risk for T Corp, we are now in the higher interest rate sector of the market.

This is us, this is where we are now at. We are higher risk borrowers.

The funding cost of any project is a cost which forms part of the feasibility. So what is the interest cost to this project?

Well, even though we are the borrowers, we are not allowed to be told. This is confidential. apparently.

Can you imagine going into a bank, being offered a loan and being told that you are not allowed to know the interest rate, nor the cost to you? This is where we as ratepayers are at, this is a farce.

We believe that the banks will charge a fair bit more than T Corp, however we have done our calculations still on a conservative basis of less than 4% interest rate.

The business paper for this Thursday’s Council meeting carries a recommendation to Councillors that our General Manager be authorised to sign a $50 million loan for 30 years at a fixed interest rate,with Westpac.

Based on our calculations, the interest cost will be in the order of $38 million. This interest cost is an added cost to the project.

Then add to this cost the fact that the previously budgeted $20 million from the sale of four properties was a gross, not a net figure and did not factor in the cost of lease back rents.

The more likely cash contribution from the sale of these assets is $10m, not $20m.

So does our CCS project now look like this?:

Building cost – $81.5M

Interest cost – $38M

Loss on asset sales – $10M

Total cost – $129.3M

We would be very happy to be proved wrong. If these figures are wrong, they are wrong because of the lack of transparency that we have to struggle with.

The above is a media release, Monday 12 July 2021, on behalf of the Together We’ll Fix it Team for the Coffs Harbour City Council election on 4 September.

Coffs Coast Outlook will publish all media releases by candidates for the council elections to be held on 4 September on the Coffs Coast so long as they have legally acceptable content. Media releases can be sent to [email protected]

7 thoughts on “Was the CCS loan too high a risk for TCorp?

  1. With the hopeful indulgence of Mr Rodger Pryce, on this matter, here is the comment with some observations about how General Manager Steve McGrath engages with councillors and affects proceedings in Council meetings, given especially for those who will be listening in for the first time.

    A meeting wherein your venerable representatives are wanting to flog off Council Chambers, dearly respected by them as we’ve for five years seen, to try to construct a testament to their worthiness, and in physical enactment of the General Manager’s desires and dreams, made easier by them perhaps not being in it when they do.

    Those actions futile, though, even when they vote for it, as the new council goes on to wipe the plans at the carpark, puts together a magnificent cultural precinct in which a charming Entertainment Centre presides, thereby blocking what looks like the C.ex from further shoving that befuddled moniker in your face when trying to do that charm-less-ly, having to deal with a council who looked on and thought this whole episode mongrel ugly. An anti-bias which for half a century will stick.

    Intention here is to be informative. McGrath has an interesting managerial style to observe. My opinion is that this style creates a barrier between Management and Councillors, and the overall effect, developed over months and years, is that it also acts as a force against them into which councillors must mentally push. It ain’t open arms and welcome, by this General Manager, though his politeness would so have you think.

    This barrier and very subtle psychological force has, I’m sure, led to councillors continually feeling the need to apologise for asking questions. When a councillor feels that, a council is sick. It’s getting better lately but it still happens.

    This apologising is not about a councillor being polite, this is about being placed in a psychological situation where asking questions is an offense to, or imposition on, the dear General Manager. Hard to believe, yet true.

    Other than the power of the position, Steve McGrath is not I feel a powerful person. The opposite, actually. However, the tactics he employs, some of which you’ll see below, are very powerful indeed.

    In putting forward the following, the context is: Do other GMs also respond like this? Many probably do, but I wouldn’t have thought others do it to this extent, or for every question that points to something Management has done wrong or could do better.

    Certainly, the GM who comes from the ideal 3X population wouldn’t do it, if not for the simple reason she or he wouldn’t be in the position to have to do it, in the first place.

    Mostly, though, the ideal GM would possess the better, stronger character and qualities as explained in the presentation from the link below, which is the last time it’s provided, and apologies to those who’ve seen it before, so please bookmark it if needed.

    The characteristics of the “good” and “bad” GM as presented in that article are well known for any managerial role and are not specific to the company. It’s just that the information is well presented and I don’t have time to find another, which anyway would say essentially the same things.


    One particular “good quality” is that the on-top-of-it GM can admit wrongs and failures. They would do so in an environment of very clear overall success, of an LGA thriving without big problems or issues within its jurisdiction.

    Beset by big-issue, costly, problems, Steve McGrath is in no position to admit to one failing, by the looks, as it could precipitate a collapsing house-of-cards consequence.

    As this comment finds you, you probably have a little if not a lot of comfort and personal space by which to read it. This distinction is important: when and how the following happens is a situation worlds apart from yours this moment.

    Councillors come to meetings with their heads packed full of information that they had to read. They come from their private or professional lives, other than council. They have in their minds enormous responsibilities. Gigantic costs, wide consequences for what they will do, as procedure unfolds with them in it.

    They may not have had sufficient time to prepare, because of their private or professional other-lives; given their role is not a full-time paid position.

    Councillors are in a meeting in public. They have to be public speakers and are judged for it. They are under scrutiny. Their reputations are on show, at stake.

    They are allowed, if you count it, usually around two seconds to think on their feet before that instant passes, within which to say something. That something could change Coffs Harbour and its region forever. Two seconds, max.

    They are not provided the luxury we all have, when they’re in the thick of a meeting, as things develop very swiftly, which is someone saying to them: “Take five minutes and have a think about it”. Or better, “Sleep on it”.

    Meeting agendas can have several critical items to get through. Meetings can’t devolve into slugfests and fruitless meanderings. Councillors jump from completing one item immediately into the next.

    It is, really, a unique situation of unimaginable pressures.

    And that’s a normal council meeting, for the councillors this term. That pressure is lessened, of course, if a matter is expected to fall in a particular councillor’s favour. This one, or bloc, need not say a thing. Need not really care, in that case. Job done; all that councillor has to do is stay silent and vote. (It’s instructive to think: who doesn’t speak.)

    (One particular councillor, from the silent bloc, may well rise to regale you with infinite wisdom, affected differently from the pressures by feeling said pressures are a call to exhibit said wisdom. In case that grand and commanding orator, in the grip of self-love and self-admiration, happens to do that, hurry for the spew bucket. Then feel the efficacy of the meeting plummet by 50%. Councillors themselves do take a while to recover.)

    If however a councillor is attuned to public sentiment, this meeting on Thursday could be as intense as it gets: as intense as the final voting on the long, long airport lease. Who knows. The sale and loan may go through relatively quickly. It is, after all, the end of days. A trusted one may have capitulated already.

    The following then occurs for those attuned councillors in that crucible of pressure.

    Steve McGrath, differently, works in that building full-time. He only has to walk downstairs. It’s like his second home. Measured by the weight of physical attendance, councillors are attending on his home turf. Even remotely, if covid affected, attendances place Steve McGrath in the formidable advantage, not councillors.

    Anything spoken goes through the chair. You’ll hear from a councillor: “Through you Madam Mayor, I have a question for the General Manager please,” and variations of that.

    When you hear: “General Manager please,” from Denise Knight, it means he’s on the spot to respond.

    So here we are, in a meeting, and the General Manager has been asked a question.

    One of the common responses he’ll say is this: “Director, please.” What he’s doing is asking the relevent Director to answer the question. Listen then to how Steve McGrath says that. Two words. But these two words send a powerful message, because the tone of voice is filled with what I hear as confected tiredness and exasperation. It’s deliberate.

    He’ll often speak those two words in the most forlorn and saddened fashion. His tone produces a message, as I hear it, that says to the councillors: for gods sake, this is ridiculous, the question is completely unnecessary, and you are wrong to ask it.

    Result? Councillors don’t feel like asking questions.

    You won’t hear an enthusiastic tone, such as our other GMs have used. An enthusiastic tone expresses just that: enthusiasm to get an answer for the councillor, and respect for the fact of it being asked.

    Steve McGrath’s use of tone, as you’ll hear, is the opposite: no expressed respect. Don’t ask questions. You are the lesser for asking.

    Listen carefully, though. At the end of those two words you’ll often hear a sigh, or possibly at the start of them. An audible sigh. An exasperated sigh. I wonder if it’s done on purpose; it seems so. And made certain that it’s heard.

    The sigh communicates the unnecessary imposition the question has caused. Not every time, but you’ll hear it. The message in it again: don’t ask questions.

    Councillors are already put off, and no content of a response has yet been given. It’s “us vs them”, councillors vs management already. Two words in.

    You are likely to hear, after “Director, please” this sort of thing: “The Director may provide some detail for the councillor. I may add something to it.”

    Steve McGrath is now reserving his right to vague-out what the Director says, or to lead the governing body in a direction that for him is preferable over the one the Director could now provide.

    So here’s how that goes:

    The question from the councillor is: “Is this colour blue?”

    Steve McGrath: “Director, please. I may add something,”

    Director: “In most cases, yes, it is blue. We have looked at all other options, and yes, it is blue.”

    Steve McGrath: “If I may add something to that. The Director has indicated that the colour falls on the spectrum of colours-”

    Let’s interrupt him there. The obvious vague-out of the Director’s clear response is in the sentence spoken, the looseness of which I haven’t exaggerated, but it’s the word “indicated” that performs an important function for McGrath.

    That word sucks the definitiveness out of what the Director stated. The Director made a statement. But it’s now dissolved into something indefinite. In the councillor’s mind, under pressures, the ‘answer’ is no longer certain. “Blue” has become only a possibility, one of many.

    This may seem trivial. But it’s powerful. It unfastens the thoughts of the councillor and sends them flying away. These are thoughts that could have been carefully prepared. Now loosened and flying. Remember, they only have two seconds at most to think on their feet. That councillor is at an immediate disadvantage right now.

    Steve McGrath is continuing, let’s listen in: “on the spectrum of colours. We have done exhaustive research on this matter, according to Section 5 of the Spectrometer Plan as provided by the various authorities-” More councillor thoughts flying away, as they are forced to consider the implications of those authorities’ involvement, “which were provided to you, around May last year, early June, in briefing notes around that time-” Councillor’s thoughts now trying to remember all of that, back then, for which they were responsible, “-so the more complete answer to assist the councillor is that the matter falls between the red area of the spectrum, and directly opposite that, the yellow portion of the spectrum.”

    The thing was blue.

    Not now, it’s a blancmange of swirling uncertainties. Woop! Time’s up!

    The chair has moved on to someone or something else, and no follow up question comes.

    None of that by Steve McGrath has helped the councillor. It has effectively thwarted more questions about the topic.

    The clear answer by the Director has been successfully vagued-out.

    Also mentioned in a previous comment, in a business meeting the other party, like yourself, gives a straightforward answer, being un-frightened of it showing you have failed or there’s a problem. This is terrific, as it means that both of the parties can apply their knowledge and skills to solving the problem identified. In this direction resides success and achievement. Parties working together to a common goal, assisting each through fruitful intention.

    You don’t get any of the extended bullshit above, in a business meeting, because you walk away. You just don’t deal with someone who does that sort of thing.

    This comment will take far too long to unpack the nuances of the many scenarios like the above; hopefully though it gives a context for the sort of thing you’ll hear in the meeting. You’ll hear a lot of waffle and a lot of vague-ing out. A lot of what I think is misdirecting.

    Having said that, when Steve McGrath’s style was questioned on CCO some while ago, he happened to be a lot more accommodating and considerate for councillors in the next meeting. But I think it’s in his DNA. A reason I attribute some of it to is that he seems he just doesn’t ‘get’ the ‘spirit of local government’. It feels like he’d like to do away with councillors altogether.

    Perhaps someone from Council is looking over this, and can point him towards it. The ideal, of course, is that councillors are given direct and definitive answers to questions and treated respectfully for having asked them.

    If it were a business meeting, guaranteed, only a selection of the responses Steve McGrath has provided would be actionable. Councillors however have to act, they have to vote.

    It’s a fire-cauldron, though, and my bet is you’ll get more than enough of the above style of directing and redirecting, and him vagueing-out a councillor’s precious ability to think clearly on the spot. Under those intense pressures.

    Consider the alternative for Coffs Harbour City Council. The answer comes thus: “Yes, it’s blue.” And it’s left as that.

    The councillor then thinks, ‘got it’, processes it, and quickly the next question comes, “In that case, through you madam Mayor, a follow up question to the General Manager. Can we look to perhaps provide some sound effects to the blue so people in-”

    The result of direct answers? The quality of council operation improves by a thousand percent.

    Two quick explanations of other elements to Steve McGrath’s style.

    He’ll include in his response something like: “councillors were already provided with this information.” The result? The councillor feels bad suddenly, putting him or her off their thinking. The better response? Don’t include it, just don’t say that. Or include it more respectfully if it’s categorically necessary; though I can’t recall any occasion that McGrath saying that was in any way helpful or even necessary. It’s a tactic.

    In those moments, when Steve McGrath says that, the councillor wanted more information then and there. Why not just give it? Summarise it if needed, or just take the time to provide the answer.

    In other words, understand and respect the spirit of the moment: the councillor needs that information, they’re about to vote, identify what they’re getting at, and give it to them.

    Instead, Steve McGrath uses the sentence following “councillors were already provided with this information” so he can direct and redirect according to his ideals. It’s another psychological tactic. Makes a councillor feel bad, look bad (in public), puts them off, and: don’t ask questions.

    You’ll also hear that Management, as they speak it, were and are never wrong. Blame is always laid at some other party, or some other circumstance. Listen, then, for them placing the blame on something or someone else. Always.

    The bottom line is that a General Manager is legally bound to answer to councillors. As you listen, you may want to form an opinion as to how well he does this; how successfully he makes a councillor feel comfortable to do so; how clear his responses are; how thoughtfully he answers to help that councillor have a clear mind in the moment to then follow up and thereby obtain more information so their decision is better made, for them, for what and who they represent; how enthusiastic he is in his responses; and if you as a councillor would like to be in the position of asking him.

    Perhaps keep in mind that ideal and highly-accomplished General Manager, from a flourishingly successful and problem-less jurisdiction, which Council could have, by which to compare.

    Bear in mind also please that it is only in the last six months or so that councillors have gained the strength to ask questions as you’ll hear. They obtained this strength only after the big deals have been done: the airport lease and engaging a contractor. They are, however, continually getting better at asking him, keeping at it for a line of inquiry, maintaining focus. Not an easy thing to do, at all.

    To combat Steve McGrath’s style is simple, or should be. Be aware that’s what you’ll get. Then don’t accept vague-outs and non-answers and ask the question again. Push on.

    However, you do need a mayor who is aligned with the governing body, or is at least impartial, in the chair – a mayor who doesn’t accept bullshit and vague-outs from a General Manager would change the place immeasurably.

    So for new councillors next term, you’ll likely have a bit of wry fun watching Steve McGrath squirm, trying to find his sense or at least expressions of respect, when the new mayor lets you get the clarity you need. (I don’t think Steve McGrath would want to hang around for overly long, having to do that.)

    And know McGrath is of course unfailingly polite, and highly articulate. Again, so what, if it’s used to vague you out?

    If Council is reading this, a request again to please take care and consideration for the listening public, to ensure at all times all speakers are heard loud and clear. Especially as at the time of writing attendances may be forced into remote, if not already. Many thanks.

    1. It would be interesting to find out just how familiar our current councillors are with the NSW Government publication: “Guidelines for the Appointment and Oversight of General Managers”? On their past performance, I don’t expect they’ve read it in recent times.

      Your psychological dissection of the GM’s strengths, foibles and tactics goes a long way in explaining how the community reached the precarious position it now finds itself in and makes it patently clear in my view that this GM’s been off the leash for the most part of Knight’s tenure, freely lording it over an accommodating and submissive group of councillors. A classic example of the tail wagging the dog!

      We can only hope the fresh governing body elected in September make themselves aware of their duty of oversight and hold this GM and senior council staff to account on behalf of the community. In this vein, I refer them to the following publication:


  2. A recommendation to authorise the sale of Council’s current headquarters for its July 22 meeting. This is Council’s last meeting before it goes into caretaker mode, during which no major decisions can be made, until the new Council is elected.

    Based on what was said at Council’s last meeting, there will be a strong push to authorise the sale, to a bidder who is unknown to the voters. If this sale proceeds, the Council will no longer own its headquarters and will therefore have to build the new Cultural and Civic Centre. This mystery buyer arriving just before the Council election is an amazing coincidence!

    Some Councillors’ performance at recent meetings gives the impression that they and senior staff own the building and can sell it with virtually no information being available to ratepayers. All we know is that various experts are saying that the offer price is too low. I believe that ratepayers, who own the building, should be told who wants to buy it and is the offer price reasonable. The lack of public information about this whole deal makes a mockery of Council’s regular claims of transparency.

    Council’s next meeting gives the Mayor and her 3 supporters the last opportunity to demonstrate that they have some respect for
    democracy. Clearly there is strong opposition to the Cultural and Civic Centre, which four Councillors dismiss as a noisy minority.

    If the Mayor and her supporters believe that the majority of residents support the Cultural and Civic Centre, they should be confident to let the next Council make the decision to sell its headquarters.

    If instead, they use the old strategy of the Mayor’s casting vote to sell this building to a mystery buyer at the last meeting before going into caretaker mode, then all the Councillors supporting this sale can guarantee they won’t be re elected. They would also be clearly demonstrating that they couldn’t care less what the voters think.

  3. COUNCILLORS – PLEASE PAUSE NOW! Don’t be driven into making rash decisions, please! The building permit for the current work is almost completed and expires on September 2 . This creates the perfect opportunity for the new Council to review our moving forward.

    Thursday’s meeting has the potential to sink our LGA under a mountain of debt and squandered assets. The moment that new Chambers/Offices were included, our CCS lost its entitlement to $$$$MILLIONS in Government Grants and the costs continue to spiral out of control.
    Please don’t make it worse.

    Ironically, we have dug a deep hole and it’s time to stop digging!

  4. I notice the mayor and Keith Rhodes are pulling the plug before the upcoming council elections and it is pretty obvious to all and sundry that three of the other councillors will be tossed out over their involvement in pushing through, on the back of a hung council, the controversial CCS project which now looks like costing up to twice its stated cost to ratepayers. The mayor has to take major responsibility as she voted twice on every step on the way to where we are now when convention says in a hung council she should have stuck to the status quo i.e. not to progress the project and so it is easy to see why she is stepping down before the balloon of council debt goes up over the project. Rhodes did his best to stop the project, is probably worn out and doesn’t need the grief that will come to a new council once the real cost of this folly is realised. Hopefully, Adendorff and Cecato were just blinded by their pro developer stance on everything but even so deserve never to be placed in a position in local government again. Townley we have to assume was just misguided but even so her time on council is done because of the legacy she leaves in this costly CSS project. So there will be a major renewal of Council and it is hoped that the ratepayers show a little more due diligence this time when selecting their councillors and actually investigate the vested interests of those who stand before casting their vote.

  5. If we consider 40c’s assessment of the situation as feasible, and there’s every chance that it is, we have a quagmire created by egotists, who have manipulated a system for the purpose of self-aggrandisement. If the GM’s alleged desire to control the council has overridden his responsibility to be accountable to that same council, (which, in theory, acts in the interests of the community) that same council has been complicit in enabling the GM to allegedly exercise that control.

    In my opinion, it must have suited the needs and desires of Knight’s coterie, to allow the GM to exercise inordinate control over the process of creating Knight’s Palace. No council which was observant of it’s responsibilities, would have allowed such a violation of trust to occur. Here we have a situation in which the tail may have been wagging the dog, with the dog’s compliance.

    To discover why and how this could happen requires some exploration of the possible motivations of each of the parties involved. Having no personal knowledge of any of the people, I must resort to speculation.

    It is my opinion that narcissism and self-interest are the two key factors which have led to the deplorable behaviour of the principal players in this melodrama.

    40c has studied, at length, the behaviour of the GM, and, in the absence of my own observations of this individual, I defer to 40c’s assessment. In my opinion, it would appear that the GM has a need to control, to bend others to his will. Underlings have no choice but to comply, for fear of losing their jobs, but councillors are elected to manage the affairs of our community and have no reason to be directed by a general manager, who is employed by them on behalf of the community.

    When councillors are controlled by a bureaucrat, it is because they allow themselves to be treated in this fashion – they comply willingly.

    There are numerous possible reasons for such compliance. These would include incompetence, and the fear which this creates in the incompetent councillor, self-interest, possibly in terms of economic and/or personal financial gain, or the dominance of ego in the councillor’s decision-making. In my view, these are the three dominant factors in the creation of the abysmal mess which lies before our community.

    Consider these imagined scenarios:
    ONE – I am an elected councillor. I have sought public office in order that I might serve my community, and, in so doing, gain positive attention for myself. My self-image will be enhanced when community members say good things about me. Although I am able to express myself effectively, I have no management skills or experience of any kind, so I am unable to make considered, independent, management decisions, particularly when huge sums of public money are involved. I live in fear of doing something wrong, and then being the subject of community censure. This means that I have to rely upon bureaucrats and other councillors to tell me how to vote on issues of spending.

    A grandiose plan to build new council chambers has been floated. As a smokescreen, designed to deceive the community, cultural spaces will be included in the building, so that it may be advertised as a cultural and administrative centre. To be personally and publicly associated with such a structure, would be a huge boost to my self-esteem. I have no real understanding of the process involved, so I decide that I will be instructed by council bureaucrats and the mayor, who is a major proponent of the scheme. I will vote as I have been instructed. I won’t need to take responsibility for my actions because I am following the lead of others.

    TWO – although I have no interest in community welfare, I managed to get elected by promising to support the mayor. My interests are purely personal and financial. I own numerous commercial properties in the centre of town, and development of this area will enhance the value of my properties. The plan floated by the council’s manager and mayor, is likely to impact positively upon my financial welfare, so I’ll support it no matter what the cost. If the whole thing turns out to be a disaster it won’t affect me because ratepayers will foot the bill.

    THREE – I’m a mayor who has dedicated several decades of my life to the betterment of my community. I deserve some recognition. I want to be remembered as the person who created an architectural masterpiece, my town’s small scale equivalent of the Sydney Opera House. When finished, it will be a monument to my success as mayor. There has been strong community opposition to my plan, but I am prepared to do whatever it takes to succeed. If my actions result in a massive community debt, so be it. I am entitled to have a memorial to my tireless work for the community. Fortunately, I have a council manager on side. He wants new offices and the personal prestige of having been involved in the construction of a magnificent piece of architecture. Like me, he will always have his name associated with this splendid building. He knows how to get the job done, so I only have to ensure that the council is not able to stand in his way.

    FOUR – My last position as a council manager was in a small rural town. I was amazed when I got his job in a much larger town, despite having no experience of a job on this scale. The councillors don’t know enough about what council management entails to understand what I am doing, so I can effectively tell them anything, and they’ll be reluctant to challenge me. A couple of the councillors are egotistical individuals who are easy to manage by pandering to their need to feel important and in control. I’m going to make my mark on this place. I’m going to prove to people who have doubted my ability, that I am up to the task of managing a large council community. I’m going to build plush new council chambers, with a spectacular office for myself. Since a number of the councillors also want to make themselves famous, or get some financial benefit from the scheme, they’ll pretty much do as they’re told.

    Despite having no majority support on council, Denise Knight has pushed through with her plan to build the Gordon St edifice. She has resorted to using behaviour which, in my opinion, is undemocratic, unethical, immoral and unconscionable. It is also my opinion that she has worked in concert with the council bureaucracy, in a project, the enactment of which has now reached the stage of poor farce.

    I am confident that this will draw to its ultimate and inevitable conclusion, with Knight using her casting vote to ensure the sale of the present council chambers, thereby leaving the incoming council with a massive dilemma, the management of which she will observe from the sidelines.

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