Blue Haven Bonaira tender update -February 2024

Kiama Council’s divestment of Blue Haven has moved a step forward. The tender for Blue Haven Bonaira was considered at an Extraordinary Meeting on 1 February in a confidential session, due to its commercial nature.

Council resolved to decline all tenders and enter direct negotiations with the preferred tenderer.

This process will take five (5) weeks and any draft contract arising from the negotiation with the preferred tenderer will be returned to Council for resolution prior to contract execution.

Further, Council resolved not to include the Community Transport component in the main tender, due to Transport for NSW providing its own preferred tenderers for this portion of the business. The CEO was given delegated authority to directly negotiate on community transport with the specified tenderers.

The full text of the resolution is included below.

Kiama Mayor Neil Reilly said “This is one of the biggest decisions ever made by Kiama Council and has not been taken lightly. I thank my fellow Councillors, Council staff and the executive team for the many months and in fact years of hard work it has taken to reach this point.”

“I can honestly say this is the best outcome for Blue Haven residents and loved ones, our community and for Kiama Council. The divestment of Blue Haven Bonaira to the preferred tenderer, who is a registered Aged Care provider, will mean that Council can refocus on the core business of providing local government services, while knowing that we have retained this much loved and valued asset within our community.”

“As stated in the recent Ministerial review and Intention to vary a Performance Improvement Order, which was also tabled for information at tonight’s meeting, Blue Haven is running at a loss, the sale is essential to reduce debt and reduce liquidity, and urgency is required.”

“As we work through the next steps in the process, and as always, I want to reassure everyone that the wellbeing and care of Blue Haven residents and their families remains our highest priority,” he said.

Council CEO Jane Stroud said, “While Blue Haven is in Kiama Council’s ownership, we will continue to provide the high levels of quality care we have always delivered. In the meantime I will be working hard on negotiations with the preferred tenderer to finalise the details of the contract so it can return to Council in five weeks.”

In the next week, Kiama’s Mayor, CEO and executive team will hold a series of meetings with Blue Haven residents and their next of kin, Independent Living Unit residents, Blue Haven staff and Kiama Council staff to share information and discuss next steps.

We will keep our community updated as well.

Resolution

That Council:

1. receives that by RFT process, Request for Tender – Blue Haven (November 2023) (RFT) Council invited tenders in relation to the sale of its aged care business known as Blue Haven – Bonaira located at 14a Bonaira Street, Kiama NSW 2533 (together with relevant assets used to conduct the Business and the land);

2. receives the confidential report in relation to the RFT, “Tender – Blue Haven – Bonaira Divestment” (Confidential Report);

3. receives that the RFT did not include the Council’s Community Transport Operations, due to issues raised by Transport for NSW (TfNSW);

4. declines to accept any of the tenders submitted in response to the RFT;

5. for the purpose of section 178(3)(e) of the Local Government (General) Regulation 2021 (LG Regulation), resolves to enter into direct negotiations with the Preferred Tenderer identified in the Confidential Report in the manner described in the Confidential Report;

6. notes that the reason for Council determining to enter into direct negotiations with the Preferred Tenderer is that Council is satisfied that the Preferred Tenderer would be capable of meeting the requirements set out in the RFT; and

7. accepts that the reasons for Council declining to invite fresh tenders or applications under sections 178(3)(b)-(d) are:

(a) it is not expected that further market testing will provide a more satisfactory result;

(b) despite none of the tenders being capable of acceptance at the end of the RFT Tender, Council considers that there are reasonable prospects of achieving an advantageous outcome through direct negotiations with the Preferred Tenderers;

(c) inviting fresh tenders would delay the sale with potentially adverse consequences for the organisation;

8. authorises the Chief Executive Officer to directly negotiate with the Preferred Tenderer(s):

(a) in the manner described in the Confidential Report for the purposes of entering into an agreement to sell Council’s aged care business known as Blue Haven – Bonaira;

(b) ensuring in accordance with the Fair Work Act 2009 that for a period of five years, the current terms and conditions of employment be transferred to the employment of the transferring employees with the new employer;

9. directs the Chief Executive Officer to table any draft contract arising from the direct negotiations with either of the Preferred Tenderer(s) before Council for resolution prior to contract execution;

10. resolves that because of extenuating circumstances a satisfactory result would not be achieved by inviting tenders for the sale of the Council’s Community Transport Operations related to Blue Haven-Bonaira, and notes that the reasons for forming that view are that a fresh open tender process would be difficult to conduct where Transport for NSW requires direct involvement;

11. authorises the Chief Executive Officer under s55(3)(i) of the LG Act, to:

(a) directly negotiate with the parties listed in the Confidential Report for the purposes of entering into an agreement to sell the Council’s Community Transport Operations related to Blue Haven-Bonaira and

(b) execute any agreement arising from those direct negotiations.