A former Corangamite Shire mayor has accused Lyndoch Living of a "conflict of interest" in its closure of Terang's May Noonan aged care home.
Chris O'Connor said the Terang community had "built and funded" May Noonan and was devastated it was shutting.
"Under Lyndoch's management, the home has continually failed aged care standards and been allowed to deteriorate," he said.
When Lyndoch board chair Sue Cassidy announced the closure on May 31, she said the board had been left with no choice.
"We've looked at everything we could possibly do... but we've made the decision that we can no longer keep May Noonan open," Ms Cassidy said.
"It is pretty devastating and it has been a massive decision for the board to go this way."
Mr O'Connor said he didn't believe Lyndoch had tried as hard as it claimed to keep the Terang home open.
"I'm not sure they've fully exhausted all the options," he said.
"I understand there is some interest from other parties, but I am also not sure Lyndoch will hand it over to another operator. One would question if there is a 'business incentive' to sell the land and fill empty beds in Warrnambool."
Mr O'Connor said by shutting down May Noonan, rather than handing it on to another operator, the organisation could keep the registered aged care beds and fold them into its Warrnambool operation.
He said it was ethically dubious for the board to be making a decision to close one arm of its business where there was a clear incentive for another arm of the business.
"There's definitely a conflict of interest, without a doubt, regarding the beds," he said.
Mr O'Connor said there was a risk of making a decision that was in the best interests of Lyndoch's bottom line, rather than the residents of May Noonan.
Occupancy at Lyndoch's Warrnambool facility has risen to 77 per cent, but Ms Davidson said it was staff availability rather than demand for beds that was keeping the figure down.
"We are at capacity with the staff that we have in Warrnambool," Ms Davidson said.
"We've got a substantial waiting list, 28 at last count, so the issue comes back to workforce, particularly registered nurses."
Ms Davidson said while Warrnambool occupancy had been growing, at May Noonan it had steadily dwindled, from 64 per cent in May, 2022, to 58 per cent in August, 53 per cent in November, and 47 per cent in February 2023. By the time of the closure announcement it had reached 45 per cent.
Mr O'Connor said the occupancy figures didn't tell the full story.
"To say the numbers have fallen is stating the obvious, particularly when my understanding is they have not been accepting new bookings at Terang for many months," he said.
Ms Cassidy said it had been nearly impossible to recruit permanent staff at May Noonan, particularly the registered nurses who needed to be available to oversee the other care workers. When occupancy had been higher in 2022 the facility hadn't been abiding by national aged care staffing ratios, which played a key role in the sanctions May Noonan received for the "immediate and severe risk" the residents were being exposed to.
In order to reach the necessary staffing ratios Lyndoch had relied on agency staff, which was hugely expensive and, in the board's view, impossible to maintain.
"If it's just a money thing and they're ripping people out of the Terang community for that, then it would be a very unfortunate thing," Mr O'Connor said.
"Particularly when, as I understand, there's still some flickering interest from other groups."
He said local community members had approached Lyndoch management in the past, offering to help, but had been peremptorily rebuffed.
"This board have watched over the continued failures of operations at Terang. They have in my view, been arrogant and unapproachable for community members who only wish to help," he said.
"There are two big questions: Can the community of Terang resurrect May Noonan in some form? Is it ethical or wise for Lyndoch, an organisation claiming to regain wider community trust, to close May Noonan before finding an organisation prepared to run the home or at least giving the Terang community the opportunity to explore other options?"
The Standard put Mr O'Connors concerns and questions to Lyndoch Living. Ms Davidson again said there had been no other option.
"Closing May Noonan was a difficult decision but it is the right one for residents and the community," she said.
"May Noonan is not fit for purpose in the current regulatory environment for residential aged care and Lyndoch lacks the financial capacity to lift it to the required standard.
"Persistent low occupancy rates and difficulties attracting staff pose a safety risk to residents. Lyndoch worked hard to find a buyer for the facility earlier this year but we were unable to do so.
"We will be closely supporting residents in transitioning to alternative accommodation; there are enough beds available at our Lyndoch facility in Warrnambool to accommodate all May Noonan residents and other suitable options are available in Terang."
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