Part of a Blue Haven will be put up for sale following a vote at a Kiama Municipal Council meeting on Thursday night.
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In a 5-4 decision in favour, councillors voted to rescind a motion that wanted council to look at divestment opportunities, capital works cutbacks and a possible rate rise as ways to raise desperately-needed funds.
The new motion that councillors Neil Reilly, Mark Croxford, Warren Steel, Matt Brown and Stuart Larkins approved will see the start of the process to sell Blue Haven's Bonaira aged care centre - which will have to start with its reclassification from community to operational land.
Under the motion council will retain Blue Haven's Terralong facility as well as looking into paid parking as a means to raise funds.
The vote would seem to put to an end almost a year of debate on the future of Blue Haven, which was touched on by several councillors.
"Everyone else in the community is missing out because all we ever do is talk about Blue Haven," Cr Brown said.
"I've added it up and we've had 30-plus reports [on Blue Haven] given to us. Thirty-plus reports and some councillors still don't think they can make a decision on our finances."
Cr Reilly said opting to keep Blue Haven in its entirety would have serious consequences for the broader community.
"The consequences simply are that we will have to reduce costs and that that means an increase in rates, it means a reduction in services," Cr Reilly said.
He added that rather that having "us amateurs" looking after things, running Blue Haven "needs to be done by people who know what they're doing and have the scale to do it".
The new motion was brought forward in the wake of a letter from Local Government Minister Wendy Tuckerman, which threatened issuing Performance Improvement Orders, which Cr Reilly said called for urgent action.
Cr Imogen Draisma disputed whether selling Blue Haven would fulfill that criteria, given the extended time frame to sell it.
"It would be remiss of us based on the information that we know about Blue Haven Bonaira to believe that the sale of that asset and a commitment to the sale tonight would resolve the issues for the next two years," Cr Draisma said.
"We know that it's highly unlikely the sale would be executed in that time and as such we need to be diverting ourselves of other assets."
Among those opposing the new motion with its commitment to sell was Cr Kathy Rice, who said the motion was "premature" as councillors were still waiting for financial information on the keep, lease and sell options that was requested five months ago.
Cr Karen Renkema-Lang was also against the motion, fearing it would affect the lives of many people in the community.
"In my view the motions related to the sale of Blue Haven put to council to date have been reactive, premature, not well thought out, not backed with sufficient evidence or with the necessary financial impact assessments," Cr Renkema-Lang said.