Bidgee Hostel Expansion Public Meeting

• Background to Residential Aged Care

• LGA providers in context

• About Balranald Shire

• About the Facility

• Expansion Option

• Other solutions

• Key findings

Overview of the Aged Care Sector

1. Increased focus towards home care

2. Deregulation of accommodation

3. A re calibration of the means test provisions

4. More User pays

5. Focus on rural & Remote

Remote and Local Government Providers

Financial outcomes

Relative Scale of Government Providers

Balranald Shire Resident Profile

2011 2016 2021 2026 2031

Balranald (A) 2.350 2,200 2,100 2,050 1,900

LGA 2011 2016 2021 2026 2031

Balranald (A) 249 277 323 394 394

Govt. target 20 22 26 32 32

Population forecast over 70 & Target supply

Long term demand for residential places exists

Data source:

- Department of Planning & Environment 2014, 2014 NSW projection data by LGA, Department of Planning & Environment, NSW Government;

- Australian Bureau of Statistics 2011 & 2014, Population Estimates by Age and Sex, Local Government Areas, ASGS 2011 & ASGS 2014, ABS,

Canberra

About Bidgee Hostel

• The facility was built in 1994

• Minor refurbishment in 2012

• Persistent vacancies

• Opportunity to increase revenue by

refurbishing

• Approval - 15 places & capital grant

$1,999,000

• Staff recruitment challenges

Operational review of Bidgee Hostel

2013 2014 2015 2016b

Revenue $880,465 $1,124,790 $1,160,837 $1,113,400

EBITDA* -$37,116 $131,307 $85,987 -$17,800

Net Surplus -$105,494 $72,676 $29,967 -$72,800

EBITDA vs Revenue -4% 12% 7% -2%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

-$200,000

$-

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

Operating Outcomes

Hostel Occupancy in Comparison

Financial Summary

• No charge in 2014 & 15 for council costs

• Not all costs borne by council reflected in

result

• Indicative 2016 outcome - loss $150,000 -

$250,000

• Capital support to maintain the facility

Review of expansion proposal

1. Cost $3,200,000 - $1,200,000 to be found

2. Losses will exceed $5k per place

3. Limited or no lump sums

4. Operating surplus of $13K to repay over 10yr

5. Human resources

6. Capabilities and Competencies

7. Governance

• Is aged care core business to Council?

• Is it within the competency of Council?

• Does it require council involvement?

• When is the right time to expand?

• How to solve the human capital issues?

• How to maintain skills & competency?

Issues to consider

Facility Owner Action taken

Teloca House Hostel Narrandera Shire Council Sold to RSL Lifecare

Broken Hill Closed

Bert England Lodge City of Rockingham Management passed to

Southern Cross care

Kalkarni Residency Shire of Brookton

Carramar Hostel City of Bayswater Transferred to Churches of

Christ

Corben House City of Kingston Transferred to Southern Cross

Care

Jindera, Holbrook & Howlong Greater Hume Sold to United Protestant

Association

Lara Aged Care Dungog and District Retirement

Living Ltd (NFP Community)

Merged with RSL Lifecare

Balranald is not alone - Rural and remote single

facility operators challenged

Alternative Solutions

1. Bidgee remains viable through explicit

and implicit subsidies from council

2. Report operating arm’s length results

3. Not appropriate to expand at this time

4. Consider alternative options

Key findings of Report