Kiama councillors rejected all the offers to buy the Kiama aged care centre Blue Haven in a meeting that saw the police called to clear the gallery.
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The sale of Blue Haven Bonaira was the focus of two motions in the business paper; the one to decide the successful purchaser was held in confidential session.
The other, put forward by Cr Kathy Rice, hoped to pause the tender and call for the Local Government Minister Ron Hoenig to review the entire process.
Members of the gallery opposed the sale; at one stage one of them called Mayor Neil Reilly a liar.
The decision to call the police came between Cr Rice's motion and the move to go into confidential session, when areas of the public gallery erupted.
Mayor Reilly was heard to say the police would be called to clear out the gallery. However, from that point most left of their own accord.
The ruckus caused the council meeting to be paused for a half-hour and it is understood United Services Union representatives in the gallery were hit with a move on order by police.
In the confidential session council voted not to accept any of the bids for Blue Haven though CEO Jane Stroud will negotiate a purchase with the preferred tenderer.
Part of the motion passed by councillors noted that "the reason for council to determining to enter into direct negotiations with the preferred tenderer is that council is satisfied that preferred tenderer would be capable of meeting the requirements set out in the RFT (request for tender)".
The option of calling for fresh tenders was rejected because it wasn't expected to provide a more satisfactory result and the councillors "considers there are reasonable prospects of achieving an advantageous outcome through direct negotiation with the preferred tenders".
Another point in the motion empowered Ms Strout to also start negotiations for the sale of the Blue Haven community transport service.
Cr Rice's motion arose from an open letter written by former Mayor Sandra McCarthy and Deputy Mayor Howard Jones that questioned whether the council had the "social licence" to sell Blue Haven.
In the council business papers CEO Jane Stroud questioned the lawfulness of the motion, as a tender process could not be paused.
In those council papers, she also questioned the motivations of Cr Rice, who said in the meeting that she had requested an apology from the CEO "for the comments judging my motivation, performance and character".
Mayor Reilly ruled that her motion could not be considered but the open letter would be tabled; Cr Rice disagreed with that and called a motion of dissent.
Objecting to the ruling, Cr Rice said the community "has been denied a fair opportunity to participate" in a decision on the future of Blue Haven.
"Kiama has functioned as a caring culture and a consultative culture for many years - this has been the norm of this community," Cr Rice said.
"The community has not been openly consulted about introducing such great cultural change because the divestment intention has been economically driven from the top down.
"The community has been consistently held at bay with multiple reports remaining confidential and inaccessible. Council has assumed the trust of the community throughout the process yet this has never been ground-truthed through properly representative consultation."
In response, Mayor Reilly said there had been three versions of the motion put forward by Cr Rice, none of which were workable.
He also took issue with the claims of lack of effective community consultation.
"Essentially we must ignore the 62 reports on Blue Haven, 35 reports on financial management matters, 24 investment reports, 20 briefings to council, 17 workshops primarily focusing on finance, Blue Haven and risk matters, the pages of the newspaper columns covered in Blue Haven stories, reports and conversations in Woolies and numerous public meetings with Blue Haven residents to see if we've let people know, to see that they understand what is the process and what's happening and get their opinion on Blue Haven," Cr Reilly said.
With the council in financially tough times he felt that needed to be front and centre for councillors.
"While it's important to acknowledge all voices it's equally crucial to focus on the tangible and planned outcomes of council's work," he said.
"That is legitimate motions that are working towards financial stability. Putting this motion will not achieve that."
Cr Rice's dissent motion was lost 6-3.