Shellharbour City Council has been forced to write off a $430,000 debt after a lengthy dispute with the previous operators of the city's only hockey grounds.
Councillors at Tuesday night's meeting were told they had little choice but to wipe the massive debt owed by Shellharbour Hockey Centre Inc (SHCI) because there was no chance of recovering the money.
Mayor Marianne Saliba said she was "bitterly disappointed that we've reached this stage" after the hockey organisation went into voluntary administration last year and was later liquidated.
A report to the council said it had received a final payout of $120,000 following the liquidation, leaving $430,000 unpaid from two previous loans, the latest in 2005 to resurface a field at the Croome Road complex.
Negotiations were now under way for South Coast Women's Hockey Association and Illawarra Hockey Inc to form a new association to run the fields.
"This debt is unable to be transferred to this new association as it would be financially unsustainable and would in effect mean that council would be holding this group responsible for the action of the previous association and we would be setting it up for failure at the outset," the report said.
At Tuesday's meeting, Cr Saliba said the situation was unfortunate.
"While it's very disappointing that this particular group of people would put this kind of expense onto the broader community ... unfortunately unless we write off this bill it will be there as a debt that's outstanding for as long as we go on," she said.
After lengthy negotiations, the council and former operators had been unable to reach a deal on how to restructure the loan.
The issue was complicated because of a dispute over maintaining the field lights.
The council had since replaced bulbs and the lights were now working, Tuesday's meeting heard.
Deputy Mayor Paul Rankin argued the council should take action against SHCI's former directors, however general manager Michael Willis said he saw no good purpose in pursuing anyone involved.
"One of the things that has concerned me as I've come into this job is that we do seem to spend a lot of money on legal fees chasing things," he said.
Independent councillor Helen Stewart said the loan was given in "good faith" and Shellharbour residents had "lost out".
Yesterday, a former SHCI committee member said the organisation had entered voluntary administration because it was unable to make payments required by the council and was at risk of trading insolvent.