The council has been looking at ways to deal with a dire financial situation, one of which was the plan to sell off the aged care facility.

That decision from councillors was rescinded at a meeting last month.

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In a joint statement from former Kiama mayors Sandra McCarthy, Brian Petschler and Mark Honey, they say Blue Haven residents deserve respect rather than "the alarm raising and selective release of information" in a push to sell off the facility.

"Residents of Blue Haven's aged care nursing home and those living in the independent living units would naturally be frightened by headlines of 'missing millions' and claims of millions 'unaccounted for," they said.

"They would be concerned that Blue Haven might not be able to repay them (or their families) their financial entitlements when they leave."

The former mayors claimed "things are nowhere near as gloomy or desperate as has been made out".

"Kiama Council has been operating Blue Haven since 1979," the statement read.

"In the more than 40 years since that time, it has become a wonderful asset of which the community is justifiably proud.

"There is certainly light at the end of the tunnel, and even council's own projections show that this is a short-term problem from which Blue Haven will recover.

"Indeed council's forward plans indicate that Blue Haven will be returning an annual surplus - projected to be around half a million dollars - in two years' time."

However a recent council report noted that Blue Haven's cashflow position would present "significant deficits" after those first two years.

The three former mayors wanted to see a "comprehensive and independent report by industry experts" on all options council has regarding Blue Haven.

They also called for community to be consulted and given the opportunity to provide its views before any final decision was made.

A Kiama Council spokesperson supplied the following statement in response to the Mercury's questions.

"As has already been widely reported, council has received detailed independent advice on financial issues relating to Blue Haven and other matters, and is continuing to work through a strategic improvement plan in response to this advice," the spokesperson said.

"At an Extraordinary Meeting last month, the majority of councillors voted in favour of a motion to reverse Council's previous decision on the sale of Blue Haven, replacing it with a new motion to develop a consultation plan and further analyse all options of lease, sell, joint venture or retain the business."

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