Aged care into the future

Published on 06 February 2019

Glen Eira Mayor Cr Jamie Hyams

On 5 February 2019, Council resolved to sell its three residential aged care facilities. 

Since Glen Eira’s first facility opened more than 40 years ago, residential aged care has become more complex and challenging.

Council is proud of the quality care it provides but recognises that specialist residential aged care providers are best placed to deliver quality care, enhanced allied health services and activities into the future. 

After the meeting, Glen Eira Mayor Cr Jamie Hyams, recorded a message for the community explaining the decision and the benefits it would deliver to current and future aged care residents and the broader community for years to come.

Questions and answers

[Updated 3 April 2019]

Q. What decision has Council made about the future of its residential aged care facilities?

In February 2019, Council announced its intention to sell its residential aged care facilities. Following a statutory consultation process, Council has now resolved to proceed to an Expression of Interest process for the purpose of identifying suitable purchasers to own and operate Council’s residential aged care portfolio — Rosstown Community, Spurway Community and Warrawee Nursing Home.

Council will only consider selling to a specialist provider who will honour the current resident agreements, has a proven ability to provide quality aged care, has high employee and resident satisfaction levels and has the financial capacity to invest in the facilities.

Q. Council has operated the facilities very well for years, why is it suddenly not well suited to providing residential aged care?

Since Glen Eira’s first facility opened more than 40 years ago, residential aged care has become more complex and challenging.

The Local Government sector has long accepted that specialist residential aged care providers are best placed to provide aged care.

Glen Eira is the only council in Victoria still operating residential aged care facilities. That’s why, like other councils before us, we have resolved to sell our facilities to a specialist residential aged care provider that is better placed to provide the quality care, enhanced allied health services and activities aged care residents will need in the future.

Q. The term quality provider continually gets used, what does it mean?

Quality must be found in all aspects of service provision. It includes the care given by medical and nursing employees, allied health professionals and all other carers. It also includes meals, activities and surroundings. Most importantly, it is treating individuals with dignity and respect.

Quality also comes from having scale and expertise that only a specialist residential aged care provider can deliver.

Q. What does this mean for residents?

Quality care will continue to be provided while the sale process is underway, and after a sale the purchaser will be required to ensure a smooth transition for residents and families.

Current residents will continue to have the same rights, including tenure, which they currently enjoy as part of their resident agreement.

Q. Will residents be able to stay?

Yes. Council will only sell to a provider who agrees that, after a sale, residents will continue to have the same rights, including tenure, which they enjoy under current resident agreements

Q. Will a new provider be able to increase fees?

A new provider will be required to maintain all of the terms of current resident agreements.

Refundable Accommodation Deposits or Daily Accommodation Payments are determined when residents enter the facility and form part of the resident agreement.

The Daily Care fee is set by the Department of Health and reviewed in March and September each year.

Means tested or income tested fees are determined by a Centrelink financial assessment.

Q. Could a new owner choose not to operate the facilities as aged care facilities?

No. Council will only consider selling to a specialist residential aged care provider that will honour the current resident agreements, has a proven ability to provide quality aged care with high employee and residential satisfaction levels.

Q. Will the many long-standing volunteers be able to continue in their roles should the facilities be sold?

Council very much appreciates the role volunteers’ play and hopes they will continue to volunteer in the future.

Q. What does this mean for employees?

Council knows how dedicated the employees are and will work closely with employees and their representatives. Those staff who wish to stay on can transfer to the new provider, while those who wish to move on can access their severance or redeployment entitlements.

Q. Has the decision to sell been made for financial reasons?

The decision to sell has not been made for financial reasons but because Council believes that specialist providers are best placed to provide the high standard, quality aged care our community deserves into the future.

Q. How much does it currently cost Council to maintain the three aged care facilities in Glen Eira?

The decision to sell has not been made for financial decisions but because Council believes that specialist providers are best placed to provide the high standard, quality aged care our community deserves into the future.

Council’s 2017–18 annual accounts show a total cost of $14.3 million (excluding overheads) to maintain the three facilities. Over the past five years our residential aged care service has had an average annual operating deficit (excluding overheads) of $1.65 million. In 2017/18 the deficit was $1.88 million.

Q. Council will likely achieve a significant sale price for the facilities, what will the proceeds be spent on?

Sale proceeds will assist projects that would ordinarily be beyond Council’s ability to support from its rate base and will leave a lasting legacy. Council will prioritise projects that support vulnerable and isolated community members and align with Council’s community plan.

Q. How long will the process take from start to finish?

The process is likely to take nine to 12 months.

Q. What is the process from here?

Professional services firm Ernst and Young (EY) is Glen Eira’s commercial adviser. Council has also sought the advice of aged care, legal and engagement specialists.

In line with the decision made by Council on 2 April 2019 to go ahead with the sale, prospective respondents will be invited to make an application through an expression of interest process. Council will review and approve a shortlist of potential purchasers.

Shortlisted respondents that meet the criteria, will be put through an exhaustive due diligence and assessment process. A preferred respondent will be selected and approved by Council.

Council has already agreed that in the event that the process does not identify a quality provider, then it will not sell.