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

Q. Why has Council made this decision?

Over the past 10 years, the Cities of Kingston, Knox and Monash have all sold their aged care facilities. Glen Eira is the only council in Victoria that still operates residential aged care.

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.

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. 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. Can a new provider increase my fees?

We will only sell to a provider who agrees that, after a sale, you will continue to have the same rights, including with respect to payments, which you currently enjoy under your resident agreement.

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

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

If you pay a means tested or income tested fee, this is separately determined by a financial assessment completed by Centrelink.

Q. Will I continue to have a bed?

Council will only sell to a provider who agrees that, after a sale, you will continue to have the same rights, including tenure, which you currently enjoy under your resident agreement.

Q. What does this mean for employees?

Council knows how dedicated the employees are and will work closely with employees and representatives. Those 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. What other facilities is Council planning on selling?

None.

Q. How much does it currently cost the 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. What profit will Council make through this process? How will those funds be spent?

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. 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. 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. What is the process from here, residents deserve clarity, when will you determine if you plan to sell, and who to?

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.

Phase 1: Council resolves to proceed in accordance with Section 189 of the Local Government Act and call for public submissions on a proposed sale of its three residential aged care properties.

Phase 2: Council determines if it is to proceed with a sale. If Council resolves to go ahead with the sale, prospective respondents will be invited to make an application via an expression of interest process. Council reviews and approves a shortlist.

Phase 3: Shortlisted respondents that meet the criteria, will be put through an exhaustive due diligence and assessment process.

Phase 4: A preferred respondent will be selected and approved by Council before negotiations will be entered into.

Throughout the sale process, Glen Eira City Council will ensure all those with an interest in it will be kept informed.

Q. Who will we sell to?

We will only proceed with a sale to a specialist residential aged care provider who will honour the current resident agreements; has a proven ability to provide quality-aged care with high employee and resident satisfaction levels; and has the financial capacity to invest in the facilities.

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

Council’s selection criteria will require any prospective purchaser to agree that all 173 residential aged care beds remain in Gen Eira. 

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

Q. How long will the process take from conception to completion?

The process is likely to take nine to 12 months.