The news Kiama Council is to consider selling Blue Haven in its entirety, including the Terralong St ILUs, has raised questions for the Chairman of Blue Haven Action Group, Allan Holder, who believes Council does not have a strategy for when they lose Terralong St’s profitable income.

“Terralong St ILUs is currently generating a profit of $4 million on a cash flow basis to Council. That $4 million has been used to fund their library services, their parks and gardens people, their road maintenance and so on,” Allan says.

“If they sell this off, that income stream will be gone. How do they replace it?”

However, the report on Blue Haven review - on whether Council should keep, go into a partnership or sell - in the Business Papers presents a different view to Mr Holder on the ILUs’ profitability, saying, “The ILU appear on Council financial reports as generating significant surpluses but these results do not include any significant asset upgrading costs from a cash flow perspective and nor do they include any depreciation from an income and expenditure perspective. If these costs were included, the results would be significantly reduced and breakeven at best.”

He believes that up to 80 per cent of residents are opposed to Council selling the Terralong St ILUs.

“We’ve got people here ranging in age from early 60s right through to late 90s. With that spread of ages, you are going to get that spread of thought patterns. Some people are going to be scared about what they don’t know and that’s just human nature,” he says.

“There is a body of support that thinks we will be better off not being owned by Council, given the chaotic and dysfunctional way they have engaged with the committee for the last several years.

“But, quite a few of us moved in here knowing it was a Council-run facility and not a for profit facility. Therefore, we felt a sense of safety and security being under the Council banner.”

In her Report on the future direction and current state for Kiama Municipal Council in the Business Paper for the Extraordinary Meeting, CEO Jane Stroud says, "The business case has identified that selling Blue Haven property should generate enough funds to extinguish all debts, remove excessive current liabilities and stabilise the Council’s liquidity position; while the transfer of aged care, home care and community transport operations should relieve annual losses, extinguish unfunded asset renewal risk, and minimise any cross subsidy between municipal and business operations.

"Releasing the Kiama community from its financial responsibility for Blue Haven would free up resources that could be redirected into improving fundamental Council services and facilities. However, there will be several in the community who would consider Council should remain in the aged care/community care domain – even at a loss.

"Equally, several in the community would object to aged care and residential fees being raised by Council to reach benchmark parity with the sector."

According to Allan, residents fear new ownership will mean an increase in their maintenance levy and gives an example of IRT Harbourside Retirement Village.

“The two-bedroom residents there are paying something like $365 per fortnight in their maintenance agreement. Correspondingly, we’re paying $230 a fortnight here for a similar facility,” he says.

Allan agrees with Council’s decision to sell the Bonaira aged care home simply due to the loss it is making.

“They don’t have the people with the knowledge or expertise to run the place properly as things stand. It’s because there is regulation and red tape associated with aged care that is beyond the Council to get themselves as deeply involved as they need to be,” he says.

“I have got some sympathy with the CEO’s perspective that it’s not Council’s core business in terms of aged care but this (Terralong St) isn’t aged care, this is retirement village living. We get dragged into the aged care title and it is very unfortunate for us.”

The Extraordinary Meeting is being held Tuesday 28 February, 2.30pm (with Public Access earlier at 1pm)

Register to attend here.