Administrator accepts $50M loan from unnamed institution

Former Council Administrator, Dick Persson

Central Coast Council administrator Dick Persson has continued on with a councillor resolution to secure a $50M loan.

Persson, installed by the State Government on October 30, called an extraordinary meeting on November 11 and immediately went into a confidential session for 10 minutes before re-emerging to publicly accept the loan.

Persson said he had convened the meeting to deal with a matter of financial urgency.

The loan is a principle and interest loan with a fixed five-year term amortised over 15 years.

No interest rate was mentioned.

Persson said he understood it was to Council’s commercial advantage not to name the institution, but he sought assurances from CEO Rik Hart and CFO Natalia Cowley that the loan was with an institution with a top credit rating.

It will be the second $50M loan Council has taken out this year.

Councillors decided at the May 25 meeting to borrow $50M over 20 years with NAB.

A Council spokesperson said the earlier loan was used to fund debt refinancing and capital works, whereas this second loan is of a more operational nature.

Persson’s confidential dealing of the loan comes after councillors were criticised for hiding behind confidential meetings as they attempted to deal with the council’s financial crisis.

The councillors, who were suspended the day Persson was appointed, voted on October 12 to secure necessary external borrowing up to $100M.

At that meeting, now-suspended councillors Greg Best, Bruce McLachlan and Jilly Pilon and former councillors Troy Marquart and Rebecca Gale voted against getting a loan.

The Council also approached the State Government at that time for permission to use restricted funds for operational cash but the State Government refused.

Member for Terrigal Adam Crouch said on October 14 that the NSW Government “will not bail out Central Coast Council from its financial mismanagement”.

The Council met on October 20 and again on October 21 to make urgent representations to the Minister for Local Government seeking permission for the partial utilisation of restricted funds to make staff payroll for the week ending October 18 saying should the Minister’s permission not be forthcoming 2,157 Council staff may not be paid.

The State Government then bailed out the Council with $6.2M to meet the staff wages bill.

The bail out was from the Office of Local Government’s early provision of Council’s Financial Assistance Grant Payments.

Merilyn Vale