Kiama's Blue Haven aged care facility contributed to a $9 million budget blowout, according to the council's financial statement.
According to the statement for the 2021-22 financial year that will be tabled at Tuesday night's council meeting, the budget for materials and services was $21.7 million.
However, the actual cost blew out by $9.4 million to $31.2 million.
Almost all of that blowout - $8.5 million - was linked to "significant budget overspend" at Blue Haven.
"COVID-19 added substantial business cost increases in order to comply with government restrictions and to ensure the protection of both residents and staff, but the general increasing regulatory environment also required additional resources," the council statement said.
"Furthermore, due to a continued nationwide shortage of aged care workers and consistently high staff turnover at both Blue Haven and in all areas of council, the widespread use of agency staff, contractors and consultants further contributed to the highly unfavourable budget variance."
Overall, Blue Haven had a $1 million surplus in the 2021-22 financial year.
However it is understood that some of that surplus has to be retained to refund deposits for those leaving the Blue Haven independent living units.
Also, because the Blue Haven facility was only last year separated from the council's other finances for account keeping purposes, it is impossible to tell whether that $1 million surplus represents an increase or decline on previous years.
The council has previously stated Blue Haven was losing more than $3 million a year. A report tabled in May this year stated the council would continue to run deficits if it retained Blue Haven.
After months of debate, councillors voted to sell off Blue Haven's Bonaira site in October last year.
A push to add the Terralong independent living units in the sale process was knocked back in February this year.
The council was hoping to complete the sale of Bonaira by February 2024.
Last week, it completed the reclassification of the site from community land to operational, which was required ahead of any sale and last month the council put out a call for companies interested in buying the Bonaira site.
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