Lerwin sale process went on in secret for two years, documents reveal

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Two years of secrecy led to the Murray Bridge council’s decision to sell the Lerwin Nursing Home, according to council documents newly released from confidence.

The meeting minutes, released to Murray Bridge News after the sale was announced last month, revealed that:

• A sub-committee was tasked with assessing whether the council should invest in, maintain or sell Lerwin as long ago as December 2023
• Councillors voted in December 2024 to open a public consultation about the future of Lerwin, but staff never enacted that decision
• South Australia’s Valuer-General put the value of the nursing home at almost $12.6 million – $1.5 million more than the council received in the sale
• Two councillors, Andrew Baltensperger and Clem Schubert, opposed the decision to sell

The council last month entered into an agreement to sell Lerwin to the Western Australia-based Roshana Care Group, which had made an unsolicited offer for the facility.

Councillors chose to accept Roshana’s offer rather than going through a public sale process.

In fact, the council paid for legal advice to confirm that it had no legal obligation to consult the community.

Cr Baltensperger told Murray Bridge News he had wanted the public to be consulted before the council agreed to the sale – “it didn’t sit right with me.”

Being asked to keep the whole process secret for two years had been a heavy burden to bear, he said.

Cr Schubert went further, describing the sale process as “underhanded” and the final decision as “a betrayal of the community”.

Community members originally raised the funds to build and operate Lerwin, Murray Bridge’s first aged care facility, before giving it over to the council in 1984.

“The council doesn’t own the town; the council runs the town, the council serves the people,” Cr Schubert told Murray Bridge News.

“This was bulls*** from the start.

“They should have went to the community, said ‘Lerwin is running against the tide, would you like a night on this? What do you think the outcome should be?’

“But they ran on secrecy and swore us (councillors) to secrecy.”

Councillors voted for consultation, but it never happened

In December 2024, the newly released minutes show, a council sub-committee gave its final recommendation about what to do with Lerwin.

Rather than investing in the facility or maintaining the status quo, the recommendation was that the council should sell up.

Councillors voted at that time to “consult the community, Lerwin staff, residents and families regarding future options for Lerwin”, according to the minutes of a later meeting.

But no consultation ever happened.

Council staff did “some preliminary works to begin preparation of consultation documentation”, but that was as far as it went.

Why?

Council CEO Heather Barclay said councillors had wanted to review all of the consultation material before it was made public – a reasonable request for a sensitive topic.

Staff did not begin preparing that material until February 2025, when they returned from Christmas holidays; but the process was put on hold when Roshana first made contact in March.

Councillors would ultimately vote in September to proceed with the sale without a public consultation process.

If they had not voted to accept Roshana’s offer, the public consultation would have gone ahead, Ms Barclay said.

But until November 25, aside from councillors and staff, no-one was to know about any of it.

All relevant documents and discussions were kept secret.

The only people who know how the sub-committee’s meetings went are Councillors Fred Toogood and Karen Eckermann; committee members Marie Wittwer, Rick Brandon and Anna Howard; and a handful of council staff.

They voted to exclude the public from their meetings, and keep their discussions off the public record, on the basis that:

• disclosing the existence of the sub-committee’s review would confer a commercial advantage on a person with whom the council was conducting, or proposing to conduct, business; or else it would have prejudiced the council’s commercial position; and
• disclosure would have been contrary to the public interest

Ms Barclay said disclosing the existence of the review could have compromised “contracts and the supply situation” at Lerwin, and limited the council’s future options.

The sub-committee had decided that it was not in the public interest for the council to be put in that position, she said.

The sub-committee only ever considered one notable proposal in public: a plan to rebrand the facility as Lerwin Residential Care.

All other information from its meetings would be made public after the sale was settled, Ms Barclay said.

How much is Lerwin worth?

Another common question in the community since the sale was announced has been: did ratepayers get a good deal out of the Lerwin sale?

Ms Barclay told Murray Bridge News two weeks ago the final sale price had been $11.04 million.

But SA’s Valuer-General estimated the property’s value at $12.58 million, according to the newly released minutes.

Property consultant Hymans valued Lerwin at $12.4 million, while another consultant, Knight Frank, gave a range of $9.4-10.1 million.

Knight Frank advised that, in practice, Lerwin was “commercially unsaleable” for one simple reason: its car park was leased from the Murray Bridge hospital, rather than being owned by the council.

“This significantly impacts the commercial value of the facility,” the consultants said.

Ms Barclay defended the final sale price as being “right in the midrange” of the different valuations.

Cr Schubert suggested that the amount of money the council would actually get from selling Lerwin, after paying off necessary debts, would be much lower – potentially only 15 per cent of that $11 million price.

Ms Barclay declined to provide Murray Bridge News with an estimate.

The council would have more clarity around that dollar figure at settlement, she said, and would disclose it after that.

CEO defends closed sale process

Finally, Murray Bridge News asked two weeks ago why the council had chosen to negotiate with only one bidder for Lerwin, rather than going through an open and transparent sale process.

The answer Ms Barclay and Mayor Wayne Thorley gave was that they had wanted to protect residents and staff from prolonged uncertainty; and to respect Roshana’s preference for a private sale.

According to the recently released minutes, Ms Barclay also determined that Roshana, and Roshana alone, was uniquely qualified to continue and expand the services offered at Lerwin “based on its proven track record and size”.

Aged care consultants Pride Aged Living found that there were pros and cons associated with that decision.

A closed sale process might be faster, but an open or limited tender would have been “more likely to achieve a robust market price”.

Did the council choose speed over the potential for a higher financial return?

“I wouldn’t say the council reached a decision (to choose) speed over price,” Ms Barclay told Murray Bridge News.

“While Pride Aged Living are experts in the area, they’re not a valuation company.

“Council made sure it had solid information to be able to make an informed decision for the community.”

What happens now?

As we reported a fortnight ago, the sale will become final early in the new year – it’s a done deal.

However, the council has committed to consulting the community about how it should spend the proceeds of the sale.

That consultation will open in the coming months.

After the sale is settled, ratepayers will no longer be on the hook for the money Lerwin has been losing each year.

As the recently released documents made clear, those losses were significant: an estimated $1.6 million this financial year and $15.7 million over the next decade.

That figure did not include an extra $8.6 million which would need to be spent keeping Lerwin’s facilities up to date.

“These losses are currently funded by ratepayers across the Rural City of Murray Bridge,” staff reported to councillors in September.

“(They) should be considered an opportunity cost that could be otherwise attributed to enhancing existing services or providing new services.”

• Read more: Lerwin Nursing Home sold to private operator