The Turn of the Century

New Directions for a New Century

To provide a sharper focus on the Board’s community development policy, three new committees were elected at the Annual Board Meeting on 11th December 2001. Directors Mr. M. J. Martin and Mr. D. B. Guinness were nominated to form the Regional Development Committee, and Directors Mr. G. J. Regan and Mr. G. C. Johnson were nominated to form the Community Housing Committee. The other committee to be established was the Education Committee to bring together certain staff members.

Just in time for the Christmas 2000 holiday period, four additional ATM's were installed in Coffs Harbour, Urunga, and Port Macquarie. Those at the Jetty Shopping Village, Coffs Harbour, and at the Urunga branch sustained heavy use by visitors and the ATM installed at Coffs Harbour’s “Bailey Centre”, was the nexus for a strong promotion campaign combining both the Credit Union and tenants of the centre.

Later in 2001, as a consequence of the abolition of foreign ATM fees between Coastline Credit Union and ourselves, the Port Macquarie unit at 85 Horton Street was found to be under-utilised and was later relocated to the Ballina branch at 275 River Street.

In just six months, the Port Macquarie branch had made a big impact in the Hastings Valley. Its performance far exceeded the expectations of the Board, prompting an investigation into further opportunities for expansion in that catchment. Except for the installation of an ATM in the Wauchope RSL Club, these options were eventually shelved in favour of satisfying a growing demand for the services of our Credit Union in the Northern Rivers region.

Around this time, a strategic alliance was forged with the Coastline Credit Union, which resulted in the abolition of foreign ATM fees between the two credit unions. This was of great benefit to the members of both credit unions, and reduced the pressure on providing additional facilities for our members in the Hastings Valley.

March saw the expansion of individual member’s transaction services with the introduction of BPAY and iBank, with just about any form of branch transaction being made available on their personal computer via the Internet, as well as through the accountaccess system established in 1996.

On 6th May, employee Roslyn Ward was the guest of honour at a small luncheon function at the Boatshed Brasserie beside the Nambucca River. The Board and Management were fulsome in their praise and gratitude to Ros for her 25 years (and continuing) service to the Credit Union.

The Credit Union’s first participation in the Primex Field Days at Casino on 14th, 15th & 16th June was rewarded with a very positive response from the public, which reinforced the Board’s decision to expand the influence of the Credit Union into the Northern Rivers region.

For the 12 months to 30th June 2001 the Credit Union made a profit of $1,710,719. Membership stood at 59,163, assets at $388,584,409 and outstanding loans $303,891,083.

The onerous effects of the change from the previous ‘protected’ legislative environment to the new Corporations Law structure were becoming more evident as time passed, and would have a greater impact on our Credit Union than any other change in its 31-year history. The capital requirements under Corporations Law proved to be much harder for a mutual organisation like ours to maintain, because its only source of capital could be retained earnings – gained from its own members. The impost of company income tax, the impact of the GST, more intense market competition, and the continued downward pressure on interest rates, all contributed to the challenge of maintaining capital.

Following the successful representation at Primex in June, this year’s presence at the Gunnedah Ag-Quip Field Days in August was again strongly supported by prospective members.

After three years of carefully evaluating various options to maintain the required level of capital, the Capital Committee recommended that the Board introduce a membership levy together with some increases in current fees and charges to apply from 1st October 2001. In adopting the Committee’s recommendation, the Board felt confident that the Credit Union would be able to meet its statutory requirements comfortably and continue to develop and expand its services for the benefit of all members. Due to unforseen changes in the membership figures (not to ignore the increases in charges passed on by banks), a review in February deemed it necessary to increase the membership levy and some of the fees and charges from 1st June 2002.

To save on downtime and staff overtime when backing-up the mainframe computer, the Directors sanctioned the installation a new high-speed LTO tape drive (for an outlay of $34,265) at their November meeting.

Also at their November meeting, the Directors requested that a formal agreement be drawn up with the Coffs Harbour Health Campus for the installation of an ATM (at an indicative cost of $35,000). This state-of-the-art machine was installed and operational in the main entrance area during March 2002.

With Members’ acceptance of Internet Banking growing exponentially, the Board decided to upgrade iBank to version 3.0 at a cost of $35,000. Four months later, by the end of March 2002, 5577 Members (10.46%) had registered to use the service and by July this number had grown to 8,000.

Although the date of the 31st Annual General Meeting (26th November) was scheduled as late as possible, plans for it to be the launch of an historic initiative by the Credit Union were still stymied by delays in getting the necessary ATO Private Ruling and approval by the regulators. It wasn’t until 4th March 2003 that Treasury announced policy approval of Redeemable Preference shares as equity (subject to a new regulation yet to be issued).

The guest speaker at the AGM, Mr. Michael Oswald, CEO of the Creditlink Group, gave a very interesting presentation on the history and services of his group of companies, praising in particular the support provided by our Credit Union and CEO, Mr. Ray Battle.

After a fit-out costing $173,000, the 14th branch of our Credit Union opened for business at Ballina on 18th December 2002, extending the coverage of our Credit Union’s full range of services from the Hastings Valley in the south to the far north of the State.

Storage continued to be a major concern, even after the alterations to Head Office. Initially, investigations were made into the erection of a specialised storage facility at the rear of the Bowraville branch, but local government requirements for the building made the project too expensive to be a viable proposition. It was decided instead to rent more space in the industrial area of Macksville, and relocate Credit Administration (and allied document storage) to the Credit Union Arcade in Nambucca Heads. With other necessary renovations, the budgeted cost was $121,587.

A Special General Meeting of Members held 27th May 2002 approved a number of changes to the Constitution of the Credit Union. Most notable of these were the alterations that would enable our Credit Union to pay a scrip dividend and assign franking credits to Shareholders with more than 12 months membership. The first scrip dividend [for the financial period 2000-2001] to be paid 15th June 2001, was set at $35 with a franking credit of $15 for Full Members, and $7 with a franking credit of $3 in the case of Junior Members. The Directors authorised expenditure of $71,633.61 for the necessary software modifications.

This was the culmination of a long campaign to convince the industry’s regulators and the Taxation Department that the retained profits of the Credit Union and the associated tax credits belonged to its Members as Shareholders. Ours became the first Australian credit union to initiate a loyalty Bonus Share Scheme, allowing Members to increase their equity and enhance the capital of their Credit Union. At the same time, shareholders gained the benefits of tax credits with the Taxation Department. Importantly, the mutual status of our Credit Union would not change, because the bonus shares carried no voting rights. In view of the disheartening recent history of increasing regulation and associated compliance costs, this represented a monolithic milestone that could be used to advantage by most Australian credit unions.

At their 22nd April 2002 meeting, the Directors elected a Directors’ Nomination Committee to seek out and evaluate prospective directors to facilitate orderly progression within our Credit Union. The new committee was comprised of Mr. W. J. Singleton, Mr. R. A. Battle, Mr. D. B. Guinness and Mr. G. J. Regan. It was also decided to expand our Credit Union’s agri/commercial lender services with regular visits to Casino and Tamworth on a six-month trial basis from 1st May.
The staff of Northside branch in Coffs Harbour suffered an armed hold-up on 29th April.  The offender was arrested a short time later.

As a consequence of several months of negotiations, the Board’s decision to make a $500,000 investment in Community & Corporate Financial Services Pty Ltd [COMCORP] came to fruition in May 2002.

Around this time, an agreement was also made between our Credit Union and Creditlink Management for the provision of a loan securitisation program with the Trinity Mortgage Trust. This resulted in an initial tranche of loans worth about $6 million being securitised.

Increasing demands placed on the existing ATM at Toormina branch were answered with the installation of a second machine.

For the 12 months to 30th June 2002 the Credit Union made a profit of $2,562,088. Membership stood at 50,364, assets at $434,921,637, and outstanding loans at $361,445,325.

Despite the worsening drought, the organisers and exhibitors rated the 30th Ag-Quip at Gunnedah in August as one of the best. Following a disappointing report on new business introduced by our Credit Union’s representatives at the Field Days, the Board decided not to field a presence there in 2003, but still conduct the mail-out advertising to RMBs as in previous years. After promising rains and a reorganisation of territorial responsibility for the two agri-lenders, this decision was reversed in March 2003.

At their meeting on 23rd September 2002, the Board decided to support a Native Hardwood Project with a $30,000 interest free loan. The loan was subject to the attainment of other funding as indicated in its Business Plan, and set for 5 years, with no repayments for the first 12 months. Approval came as a result of a recommendation by an investigative committee. The Credit Union expected to be issued with 2000 shares as a substitute for interest.

The Board also decided to accept an offer of $900,000 for the sale of the Credit Union Arcade in Nambucca Heads.

Shortly before noon on Tuesday 8th October 2002, two men gained entry to the foyer office of the Credit Union’s Administration Centre. One man jumped the counter and began rummaging through desk drawers and office equipment. When the startled receptionist retreated to a back office and raised the alarm, the intruders snatched up her handbag and darted out of the building. They were last seen in the Star Street car park.  Unfortunately the handbag also contained a full set of keys to the Administration Centre. [All of the locks were changed that afternoon.]

In October, Carol Ward completed 25 years of service as an employee of our Credit Union, starting at the Coffs Harbour branch in 1976 and later moving to Head Office.

The guest speaker at the 32nd Annual Meeting of the Credit Union on 21st October 2002 was the foundation Chairman, Mr H. M. Ussher, who recounted many interesting details from the early years of the Credit Union, reiterating that he would never have dreamt that the fledgling Credit Union would ever become such a significant institution.

At the annual board meeting a week later, Director Mr. D. B. Guinness was elected to the Community Housing Committee and the Capital Committee.

Mr. W. A. (Bill) Rainnie, the Credit Union’s new General Manager - Operations, was appointed 18th November 2002 and thrown in the deep end. As part of his familiarisation process, he attended the Sydney CreditLink Conference that week with senior management, the Chairman and four other Directors. Bill was previously serving as Assistant General Manager at the New England Credit Union.

On 23rd November, Barry Martin and Director Micheal Martin attended the annual Coffs Coast Business (Sunny) Awards dinner, where half the winners were members of our Credit Union and publicly full of praise for the services it provides.

The Board decided that a $1.3 million bonus scrip dividend for the financial period 2001-2002 would be paid 16th December 2002 at the rate of $30 for Full Members and $6 in the case of Junior Members. The Credit Union’s CEO, Mr. Ray Battle, was appointed by APRA [Australian Prudential Regulation Authority] to a select group of nine Credit Union Liaison Representatives.  Their responsibility was to actively bring forth issues relating to credit unions and their supervision at their regular meetings with APRA representatives.  Mr. Battle attended his first meeting on 16th December 2002.

The Pub With No Beer at Taylors Arm was once again the venue for a very auspicious gathering in the history of the Credit Union on Tuesday 10th December 2002.  As many founding members and original Directors as were able, attended to record an oral history of the the formation of the Credit Union.  At their 3rd February meeting, the Board of Directors instigated the commissioning of a commemorative plaque inscribed “Birthplace of Bananacoast Community Credit Union Ltd” to be mounted in the Pub.

Historically, the Board had set a constant brief to the IT department to seek out the best computer software to improve efficiency and member service.  Further to this goal, the Directors decided to approve a recommendation to upgrade our Ultradata software from its current version 2.2 to the latest version 2.5.  This upgrade promised to provide considerably improved functionality at a cost of $438,900 plus maintenance fees.  At their 3rd February meeting they approved additional expenditure to allow participation in the initial testing phase of new software being developed for managing customer relationships. More IT expenditure was approved in March 2003 with a $36,405 router upgrade.

The Board also approved the purchase of a Credit Risk Based Loan Pricing Model from PricewaterhouseCoopers at a cost of around $40,000, and engaged PwC for the provision of advisory services for an Operational Risk Review for $26,400.

In further support of the Credit Union’s $500,000 investment in COMCORP back in May 2002, the Board approved a recommendation to take up additional equity at their 16th December 2002 and 3rd March 2003 meetings.

Following an offer to buy the Credit Union’s Coramba Branch for $238,000, the Board approved a recommendation to sell and lease back the premises. The sale was finalised in June 2003.

At their 30th June meeting, the Directors voted to grant $30,000 to the Southern Cross University School of Rural Health Faculty of Medicine ASLaRC [Aged Services Learning and Research Collaboration] program of research into death & dying in non-cancer patients.

As a reflection of the level of importance the Board placed on the management of risk, the Audit Committee was given that responsibility, and its name changed to “Audit Compliance & Risk Management Committee” effective from 1st July 2003.

For the 12 months to 30th June 2003 the Credit Union made a profit of $5,110,970. Membership stood at 50,156, assets at $514,109,015, and outstanding loans at $402,320,746.

As the Credit Union’s representatives attending Ag-Quip at Gunnedah in August reported that the results achieved were the best so far, the Board decided to plan for representation again in 2004.

At their 22nd September meeting, the Directors confirmed their commitment to Creditlink’s Transactional Fraud Detection System, and to provide a more efficient and timely ATM fault response, they also approved subscription to Creditlink’s ATM Monitoring Solution at a set-up cost of $3,800 and monthly management fee of $67 per ATM.

After over 30 years of exceptional service to the members of our Credit Union, Director Ronald A. Stone announced that he would not be standing for re-election at the 24th November Annual General Meeting. Many long-term members presented testimonials on his dedication to service, even to his own detriment at times.  At the meeting, it was decided to reduce Board representation to 9 Directors, and to extend the Credit Union’s bond area north to the Noosa River.  Steve Mortimer was guest speaker at the Annual General Meeting and at a Business Breakfast held the following morning at Pacific Bay Resort.

Following on with the business theme, those members who attended the evening seminar with Martin Grunstein on 27th November in Coffs Harbour went away “thinking outside the square” with a new slant on business promotion.  Similarly, the Directors and Staff of our Credit Union who attended the in-house “Share the Vision” Conference at Pacific Bay Resort on 28th & 29th November came away revitalised and keen to work as a team.

At the Annual Meeting of Directors on 8th December, Director D. B. Guinness retired from the Audit Compliance & Risk Management Committee in accordance with its Terms of Reference and was eligible for re-election. Following a secret ballot, the results were tied, and the Chairman declared that the position would be drawn from a hat. Consequently, Director M. J. Martin was appointed to the Committee.

On 16th December 2003, a bonus scrip dividend was paid at the rate of $45 for Full Members and $9 for Junior Members.

Following months of investigation, council negotiations and contractor wrangling, the new branch at South Tweed Heads opened for business on 17th December at a final cost of $444,176.  The installation of an ATM followed early in the next year.

A proposal to upgrade the Credit Union’s primary and disaster-recovery computers had been stalled due to the high cost, but when the suppliers came up with a much cheaper quote, the Board approved the $133,000 expenditure needed for the plan.

The Woolgoolga Seniors Centre was another stalled project that received strong support from our Credit Union.  Having raised $267,000, and with the building nearly to lock-up stage, the Woolgoolga Rotary Club’s project had a shortfall of $120,000.  To ensure that the Centre was finished as soon as possible, our Board granted $30,000 immediately with the proviso that Coffs Harbour City Council would guarantee the balance.  The facility was officially opened by the Deputy Prime Minister John Anderson on 3rd May, not many days before our Woolgoolga Branch celebrated 20 years of service in the community.

Our Credit Union started 2004 on a high after winning two awards in the prestigious Money magazine’s “Best of the Best Annual Awards for 2004”.  It was the only financial provider to win two awards from a field that included almost every bank, building society and credit union in Australia.  The Money team voted our Savings Account as the “Best Transaction Account – Electronic User,” and our Personal Cheque Account was equal first in the “Best Transaction Account – Combination User” category.

Following recommendations by the CEO at their 19th January meeting, the Directors voted to take up an additional 200,000 Ordinary Shares in COMCORP @ $1.50 each, and decided not to renew the Legal Documentation Support contract with the MBT Group, but to recruit an internal Legal Services Manager to aggregate that service in-house.

Lunchtime Sunday 1st February was the occasion of Ron Stone’s Retirement Dinner, and time for all present to hear of his many happy experiences and occasional misadventures in servicing our Credit Union’s early membership in the Bellinger Valley.

The Board and Senior Management of our Credit Union put in an intensive weekend of Strategic Planning at Jacaranda Lodge from 19th to 21st March 2004. The workshop was facilitated by Frank Kopciewicz of Finmark Australia, and addressed many of the issues raised by an Environmental Scan, Member and Staff Surveys and other research that had taken several months to complete.  A follow-up meeting was held 27th July where the Directors adopted the Strategic Plan to 2009 with an aim to become one of the header 12 credit unions in Australia in that time.

Following on from a Board decision taken on 2nd December 2002 not to extend the lease to the ANZ Bank at Toormina, and gaining control of the balance of the building in August 2003, construction work commenced on the new Toormina branch late in March 2004 at a budgeted cost of $267,025.  The new premises were officially opened on 31st May 2004 by Cr. Keith Rhodes, the Mayor of Coffs Harbour City Council.

It was with deep regret that the Directors and Staff reflected on the sad passing of our Credit Union’s first Chairman and Member Number 1, Bill Ussher, on 25th May 2004. Readers of the early history of our Credit Union will recall that Bill served as Chairman for the first seven years, and as a very committed Director for another ten years.  He had maintained an avid interest in the Credit Union’s progress right up until his death.  In order to remind Members of his selfless dedication, the Directors applied themselves to the search for a fitting memorial.

For the 12 months to 30th June 2004 the Credit Union made a profit of $5,623,742. Membership stood at 50,477, assets at $566,043,880, and outstanding loans at $482,709,136.

Reports on the BCU’s presence at Casino’s Primex and the Coffs Harbour 4WD Camping & Leisure Show were discussed at the 26th July Board Meeting, and the Directors decided that our Credit Union should be represented again in 2005.  Ag-Quip at Gunnedah in August was deemed to be another successful promotion, with our representatives reporting that the Credit Union was now well known and sought out by visitors with good prospects.

Pelican Beach Resort was the venue for the 2004 BCU Annual Conference where Management who attended on 18th & 19th September enjoyed many role-playing, team-building activities and interaction with the Directors.

At their 27th September meeting, the Directors decided to allocate $5,000 to the costs associated with incorporating “Credit Baseline Pty. Ltd.” to further develop the Credit Risk Grading System that was instigated months earlier.  Further expenditure budgeted at $34,155 up front and $6,831 per annum was approved on 22nd November for software development and maintenance for the project.

Minor local flooding around Bellingen on 20th October 2004 restricted access to Bellingen Branch and the Phone Loan Centre. This provided a short, real-life test for the Business Continuity Plan creating the need for a number of improvements and adjustments to be introduced.

At the 34th Annual General Meeting on 29th November, Directors W. J. Singleton, D. B. Guinness and M. J. Martin retired in accordance with the Constitution of the Credit Union and were eligible for re-election together with a new candidate, Mr. P. J. Wardman.  Subsequent to the resulting ballot, Directors W. J. Singleton, D. B. Guinness and P. J. Wardman were declared elected.  The Chairman acknowledged the contribution of Micheal Martin to the Board and this was carried by acclamation.

At their meeting on 11th December 2004 our Directors decided to support the inaugural professorial Chair in Aged Services at Southern Cross University.  Under the terms of the agreement with the university, BCU would provide $87,500 over three years and receive naming rights over the BCU Neville Spear Chair in Aged Services (named after our founding General Manager).  On 14th February, Colleen Cartwright took up the position of Foundation Professor of the Chair, which also included being Director of ASLaRC (Aged Services Learning and Research Collaboration).

Mitchell Tate from Manilla was the successful applicant for the inaugural BCU Bachelor of Business Scholarship at Southern Cross University.  This three-year scholarship entitled him to receive $5,000 per year for his three years of study.

On 31st January 2005, the Board congratulated Mr. D. S. Bevan, General Manager Finance & Administration, on the formalisation of his appointment as Deputy Chief Executive Officer.

After many months of deliberation, the final concept for a “BCU Bill Ussher Agricultural Scholarship” was approved by the Board on 31st January 2005.  Director Michael J. Spear was appointed as their representative on the selection panel.  Bill Ussher was always at the forefront when it came to community service, and the annual scholarship of $5,000 was seen as the best way to honour one of the Credit Union’s founding fathers, while providing financial assistance to improving the commercial viability of rural businesses.  Fittingly, the scholarship was initially announced to the public on 27th July at the Southern Banana Growers Field Day held on the Knoblock property in South Boambee.

As the number of Lismore members using the branch at Ballina increased, in mid 2003 our Directors sought a suitable location to open a branch with an ATM in Lismore.  Although this was found and secured reasonably quickly, redevelopment of the site (budgeted at $333,486) encountered many hurdles in the local government arena, and wasn’t ready for occupation until 21st March 2005.

Port Macquarie branch jumped to the attention of the Directors with favourable comments from Members after Martin Grunstein (in his own special way) revitalised a number of business promotion principles for them at the Members information night at Port Panthers on 8th March.  Other great news came later, that our staff member Kerry Marriott had been awarded “Employee of the Year – Voters Choice” from the Hastings Region.

Around $1.7 million was distributed to eligible Members on 15th March 2005 in the form of Bonus Shares.  A dividend of $40 was paid to Full Members and $8 to Junior Members.  When approving this dividend the Directors decided to suspend future dividend payments in this form, and to consider  introducing Redeemable Preference Shares to enable all Members to increase the level of capital invested in our Credit Union.

After considering the increased level of importance the management of risk deserved, the Board decided on 29th March to form a new Risk Management Committee, and return the Audit Compliance & Risk Management Committee to its former status as the Audit Committee effective from 1st July 2005.  At the same meeting they approved the un-budgeted expenditure of $25,344 for a note counter.

In order to address their concerns about conforming to APRA’s proposed “Fit & Proper Persons” and “Corporate Governance” guidelines, our Directors instigated a program of Board Audit & Assessment at their meeting on 30th May 2005 and decided to pursue specialised training for the Audit Committee and Risk Management Committee.

Four days after the perpetrator’s first offence in Lismore on 10th June 2005, the Lismore Branch of our Credit Union suffered the unwanted attention of an antisocial hold-up merchant armed with a knife. Thankfully, the staff involved, whilst shaken, were unharmed in the incident. The offender was later apprehended and appeared in court.

On 17th June, following months of careful investigation and sensitive negotiation by Management and the Board, Big River Credit Union Members voted in favour of merging with our Credit Union.  Similarly, on 20th June, again following months of sensitive negotiation and due diligence investigation by Management and the Board, our Members voted in favour of merging with the Big River Credit Union, effective from midnight 30th June 2005.

Two new ATMs became operational in 2005.  The first was conveniently located at the new Boambee Central Shopping Centre during April without much fanfare, but after the second was installed in the Coffs Harbour Airport Terminal in June, the mayor of Coffs Harbour City Council, Cr. Keith Rhodes, commented publicly that it was a very welcome addition to the terminal, and a great community service.

At their 28th June meeting, the Board appointed Director P. J. Wardman as the BCU representative on the ASLaRC committee.

Due to the positive vote for the merger, the Board also ratified the provisional resignations of two Directors to take effect from 1st July 2005.  One was that of Mr. W. J. [Bill] Singleton, Director for 14 years and Chairman for 7 of them, the other was that of the longest-standing Director of 23 years Mr. R. H. [Roley] Palmer.  Director G. J. Regan was elected to fill the vacant Chairman’s position, and the resultant vacancy for that of Deputy Chairman was filled by Director G. C. Johnson (both by secret ballot).

For the 12 months to 30th June 2005 the Credit Union made a profit of $5,409,960. Membership stood at 49,230, assets at $639,937,084, and outstanding loans at $540,048,175.