Carol Altmann – The Terrier

Lyndoch Living spent $1.2 million on consultants and lawyers in 2020, and at least another $3 million on its ever-expanding administration.

A deeper dive into the 2020 financial figures reported to the Australian Charities and Not for Profit Commission show Lyndoch has spent at least $1 million a year for the past three years – a total of $3.34 million – on legal fees, consultancies and auditors.

That $3.34 million over three years is more than the food budget for the 200 to 240 residents, but more on that shortly.

Behind the scenes at Lyndoch, a steady stream of consultants has been working on the $100 million masterplan, including – as I understand it – around $99,999 and 99 cents paid to one consultant for the business plan for the medical clinic that will be built on site later this year.

We haven’t seen that business plan, but we can only trust that it’s a good one, because Lyndoch is going into the uncharted waters of borrowing big to finance the estimated $23 million cost.

At the same time, Lyndoch’s administration costs are now more than $3 million a year, compared to $2.5 million in 2015.

The admin budget is hard to follow from year to year, because it keeps bouncing around the balance sheet like a bee in a bottle.

In 2018, it was $3.3m.

In 2019, it suddenly fell to $1.94m after an adjustment or “restatement”.

In 2020, it was back up to $3.07m.

While the figures are subject to the vagaries of various accounting methods, one thing we do know is that the number of admin staff at Lyndoch has gone up.

As has already been reported here, admin staff at Lyndoch shot up from 37 in 2016 to around 60 in 2018, and several other, highly paid souls have joined since.

(Since 2018, Lyndoch no longer publishes a staff breakdown of how many people work in each area.)

In addition to these costs, just under another $1 million has been spent in the past three years on advertising and marketing, including Lyndoch’s sponsorship of the grand annual jumps race at the Warrnambool May Races.

This sponsorship, which was renewed in 2019 and now runs until 2022, was designed to promote its Waterfront Living apartments.

I am yet to hear of anyone buying one of the apartments because they were at the races, but perhaps in between punts they were persuaded.

As it happens, the last of the apartments were sold at heavily discounted prices late last year so Waterfront could finally reach full occupancy.

But enough of the fascinators and corporate suits, what of the budget for residential care?

This brings us back to the kitchen.

I always like to check how much is being spent on food, given this – unlike the races – really is the core business of an aged care home.

In 2019, Lyndoch spent $1.2m on food for around 200 residents, or about $16.50 per resident, per day.

In 2020, this had risen to $1.44m, which looks good on paper, but Lyndoch has also since bought the May Noonan Hostel in Terang, so the number of residents has also increased to around 240.

This means the food budget works out to be the same – around $16.50 per resident, per day.

That is around $6000 in food per resident, per year.

(I suspect the various legal battles funded by Lyndoch against The Terrier have cost the equivalent of that per month.)

Again, I provide this information so the community, which owns Lyndoch, can keep an eye on its direction and priorities behind the marketing and public relations. If you wander over to the Australian Charities and Not for Profit Commission, you can check it all out for yourself.

In the meantime, we keep digging.

More soon.

Carol Altmann – The Terrier

Lyndoch Living, having recorded a fifth deficit in six years, is digging into residential bonds to fund its $100m masterplan.

And a warning – figures ahead, lots of figures – as we dive again into the swirling financials of Lyndoch Living.

One, two, three…jump!

When you bob up you will see that figures lodged by Lyndoch Living last week show an even greater loss – a $2.4 million deficit – than was reported at last October’s AGM (the one we were not invited to Zoom, but could watch later on YouTube).

The annual information statement lodged last week with the Australian Charities and Not for Profit Commission reveals a $600,000 increase on the $1.88 million loss reported at the AGM and in Lyndoch’s full financial statements to the commission.

The $2.4 m is the loss recorded by Lyndoch without taking into account the profit from the Warrnambool Medical Clinic, which it bought in 2019. Either way, it is the fifth deficit for Lyndoch in six years.

This doesn’t seem to trouble the board.

As reported here last November, Lyndoch’s overall asset base (assets minus its liabilities) also continues to slide and is now $47.6m down from $69m in 2015.

This doesn’t seem to trouble the board either.

There is a lot to digest in the 60-page financial statement, so I am going to break it into bite-sized chunks tonight and in follow-up pieces.

First, the report shows us that Lyndoch has funded at least part of its $13 million Swinton Wing expansion by doing something it has never done before, which is borrow money.

It has visited the bank and also borrowed a big chunk out of the $26 million it holds in residential bonds paid by residents.

From this $26 million in bonds, Lyndoch has thus far extracted $10,944,323.

By law, as long as an aged care provider can cover its residential bond refunds for the next 12 months, it can dig into the rest and repay it down the track.

If an aged care home defaults, the Federal Govt will pick up the tab, so it’s kind of a taxpayer-backed Ponzi scheme that relies on an aged care home doing the right thing.

It’s also cheap, interest-free money, but concerns about how these bonds are being used is one reason (among many) that the whole bond scheme is now under review as part of the Royal Commission into Aged Care.

The loans, of course, will need to be repaid at some point, including fairly substantial interest on the bank loans, despite low interest rates.

In 2018, Lyndoch paid zero interest on any loans.

In 2019, it paid $62,420.

In 2020, it paid $372,669.

As of 7 July 2020, Lyndoch signed up for another loan from the NAB for $3,386,000 which is due to be repaid by June 2022.

This was needed to fund the “redevelopment of a residential building” which, I assume, was the blowout in cost of the Swinton Wing.

That project, where residents are not allowed to hang any pictures on the walls despite paying huge bonds which helped fund it, grew from a budget of $10 million to $13 million.

Relying big on borrowed money is new territory for Lyndoch, which once upon a time used to spend only what it had, what the government gave it, and what it raised from the public.

But Lyndoch, as we know, is now a long way from those comfortable shores as it sails into a $100 million masterplan under the captaincy of a CEO and board that firmly believes you must spend money to make it.

This is why in 2019 Lyndoch bought the Warrnambool Medical Clinic, Health Spot and May Noonan Hostel, in Terang, for around $3.3 million.

(Lyndoch also recently hired JB Were – who will charge fees accordingly – to look after its complicated investment portfolio. We are not in Kansas anymore, Toto.)

The Warrnambool Medical Clinic last year turned over $3.8m in revenue, but had $2.8m in expenses.

According to the financials, the clinic returned a final profit of $539,249 to Lyndoch Living in 2020 which is not to be sneezed at… but $372,000 of this will be spent this year paying out the original owners of the clinic as the final instalment of the sale contract. Achoo!

The WMC was pretty much break even for last year.

As for this year, well this is when things get interesting, because Lyndoch has the wire fencing up and around its now-vacant Tomlinson Wing (built in 1991 with help from a generous donation from the Tomlinson family), all set for demolition to make way for a new, two-storey Lyndoch medical clinic to replace the existing WMC.

This clinic will have acute care, dentistry, an x-ray machine, up to 20 GPs, allied health, education rooms, a cafe, a chemist and no doubt wonderful indoor plants and a red-and-white colour scheme.

The cost? An estimated $24 million. Where is that money coming from?

The bigger question, however, is will Lyndoch Living thrive or dive under this grand expansion and multi-million dollar spend up? Time will tell.

More soon.

Carol “Alice” Altmann – The Terrier

Take my hand and follow me into the strange, alternative world of Lyndoch Living Wonderland, a sparkly world with a lovely colour palette, and where a deficit is “a good result”.

Lyndoch has just posted its fourth deficit in the past five years, but according to those who sit at the big table, there is no need for concern.

(Caterpillar: I don’t know what they’re smokin’ over there in the boardroom, but I want to try it!)

What’s more, Lyndoch CEO Doreen Power, who was appointed in 2015, has announced – without so much as a twitch of an eye – that we can expect our largest, fully-booked aged care home to run at a loss for another two to three years.

This means that by 2022, Lyndoch will have run at a loss for six or possibly seven years out of the past eight.

(Cheshire Cat: keep smiling everyone, keep smiling! Oh blast, here comes Alice with her practical facts…)

In 2014, the year former CEO Rhys Boyle retired, Lyndoch was comfortably in the black and recorded a $901,214 surplus, which came on top of surpluses in 2012 and 2013.

Here are the figures since:

2015: $208,707 deficit

2016: $130,037 deficit

2017: $846,563 surplus

2018: $1,573,98 deficit 

2019: $398,356 deficit

I think this tells us pretty clearly that Lyndoch is living beyond its means – each year it is spending more than it makes – but somehow an almost $400,000 loss like last year is a “good result”.

No it isn’t. It’s a bad result.

(Mad Hatter: Oh Alice, anyone knows a good result is better than a bad result which is better than a worserer result. Pour me some tea!)

If we push aside the spin and boil it down to the absolute basics, Lyndoch has one important job to do, which is to care for our elderly and infirm, for which it receives money from the Federal Government, the State Government, live-in residents, clients and its own investments.

From all these things, Lyndoch last year received a total income of $38.9 million.

It spent $39.3 million, in other words, it went over its budget…again.

On top of this, Lyndoch also confirmed a slightly awkward piece of news, which The Terrier flagged back in October, which was $11.3 million was wiped off its assets after certain, unnamed buildings were re-valued using a different method that, from what I can see, used market prices.

This is like owning a house you thought was worth $12 million, only to be told it is actually worth $1 million.

(Mad Hatter: Oh who cares? $1 million, $12 million, it’s only on paper! Tear it up and start over! More tea?)

Have a big sip of whatever you are drinking, because now we wade deeper into the forest of figures in search of the bottom line.

In 2015, Lyndoch had total assets of $96.5 million – this is whole shopping cart: the properties, the cash, the residential bond money, the investments, the cups and saucers, cutlery and cars.

At the same time, it had expenses, or liabilities, of $27.7 million, leaving it with a bottom line of $68.7 million.

By 2019, Lyndoch had total assets of $98.9 million – (White Rabbit: clap, clap, wonderful, magnificent! Well done!) – but….it also had liabilities of $47.7 million, leaving it with a bottom line of $51.1m.

This means Lyndoch’s overall bottom line has fallen from $68.7 million to $51.1 million in just five years.

(White Rabbit: Oh. But the cash, dear Alice, what about the cash?)

Lyndoch has plenty of cash: $48.7 million in cash and other investments, except they can’t touch most of it – around $30 million from my reckoning – because it is tied up in residents’ bonds.

(White Rabbit: So I can’t spend it on a shiny new pocket watch? Damn.)

As we know, other things have changed dramatically in the past five years too, including just about every member of the executive team being replaced, from the Director of Nursing, to the Chief Financial Officer, to the Human Resources head, with more than 80 staff having gone elsewhere.

I have since been told by a strong source that my figures are wrong and it’s closer to 120 staff, but I can’t verify this.

(Queen of Hearts: At last, at last, my walk on part…Off with their heads, I say! Off with their heads! Strike up the trumpets!)

No wonder the board wasn’t keen to trumpet all of this news at the annual general meeting last October, where written questions from the public were ignored, because they were not members of Lyndoch.

Anyone who has since tried to become a member has been rejected.

(Queen of Hearts: Close the gates! Don’t let the rabble in!)

And the crazy making thing is that despite these worrying figures, Lyndoch is not tightening its belt, but going on a spending spree: a $100 million masterplan that includes buying two medical clinics for a cost of $1.6 million, including $1.3 million for the Warrnambool Medical Clinic, so it can move them to a medical clinic that it will build.

(Mad Hatter: And don’t forget the horse race! We want to go to the races, so we bought the race! Giddyup Dormouse!)

I am worried, dear citizens, that we who own Lyndoch are being dragged deep into this wonderland and we won’t be able to find our way out, which is why we have to keep going.

(Caterpillar: Ah, chill baby and pass me the pipe.)

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Carol Altmann – The Terrier

The time has come to use our voices, stand up for Lyndoch and show that Warrnambool will not tolerate bullies, no matter who they are, where they come from, or what they promise.

I have now had contact with 33 people, including past and present Lyndoch workers, about the toxic culture and the warped priorities that have allegedly taken root within its walls. By the end of this weekend, I will have spoken to 36.

We can’t turn away and expect the victims of this culture to fix it; they can’t.

Instead we, as a community of terriers, need to get involved, to step up and hold the Lyndoch board to account for what is unfolding on its watch.

We did this with the Warrnambool City Council credit card scandal and we can do it again.

Some of Lyndoch’s most senior and experienced staff are among the 70 to 80 people who have left in the past two years and the resignations just keep coming, yet the board remains silent.

If this was happening in a primary school, or our hospital, or inside TAFE, it would be front page news.

So would some of the decisions around the use of public funds.

As it stands, Lyndoch Living – as a registered charity – has spent more than $100,000 on gambling via sponsoring a steeplechase and hosting a corporate marquee at the May races, and somehow this passes as core business.

We also know that Lyndoch plans to spend millions of dollars to build and run a new medical centre that nobody has asked for, while at the same time it doesn’t have enough experienced nurses to fill shifts, and basic furniture needs replacing.

Enough.

I am unable to look on while personal power trips are pursued at the expense of Lyndoch staff wellbeing and, ultimately, the care of our elderly.

So this is what we can do:

– contact the board: chair Kerry Nelson (knelson@mpower.org.au) or any of the other board members: Andrew Paton, Cr Sue Cassidy, Ron Page, Percy Eccles, Kane Grant, Peter Downs, Suzanne Coulson and Lorraine Mielnik via a letter to Lyndoch Living, 10 Hopkins Rd, Warrnambool.

– ask the board about staff morale, staff resignations and Lyndoch’s core priorities;

– contact our local MP Roma Britnell (roma.britnell@parliament.vic.gov.au) and ask her to investigate, just as her Liberal colleague Cindy McLeish did in response to the troubles at Seymour Health;

– write a letter to the editor of the local newspaper which, unfortunately, no longer does investigative journalism;

– most importantly, become a member of Lyndoch: it’s free to apply, can be done by filling out a simple form, and means you can have a say on where Lyndoch is heading and who is in charge.

 

At the moment, Lyndoch has very few members, including the nine people on the board, two life members (Ron Patterson, David Atkinson), the CEO Doreen Power, and four senior staff.

It’s a tight little shop.

Under the new rules of Lyndoch (last year it changed from an association to a company limited by guarantee), these members have significant powers, including standing for the board, voting for the board, and being involved in the AGM.

In fact, unless you are a member, Lyndoch has no obligation to even tell you when the AGM will be held.

This is what happened last October when, for the first time, the Lyndoch AGM was not advertised, nor were the board vacancies.

But here’s the rub: the board gets to decide who can become a member of Lyndoch, so even if you apply, you may not be accepted.

It’s open to all sorts of manipulation and perhaps explains why the current board is such a curious mix.

There are no GPs on the board. There is no lawyer.

But there is the former CEO of the Warrnambool Racing Club, Mr Downs, who now lives in Melbourne and works for Moonee Valley: if that’s not a massive conflict of interest between the board and Lyndoch’s support for racing, Barry the Bullshite Detector and I will run three times around the racecourse.

(Actually, Barry, we will need to do four laps, because Ms Power and Mr Downs also have shares in a racehorse.)

The Lyndoch company secretary – a former PA to Ms Power – also has no accounting or legal qualifications, despite now monitoring a multi-million-dollar organisation.

From all the evidence, none of these people in charge are asking the hard questions about Lyndoch’s operations, or none are asking them publicly.

Cr Cassidy, for example, has gone from being a power house to a mouse. The bold woman who stood up and exposed the games behind the council mayoral race has nothing to say about Lyndoch. She won’t return my calls.

Chair Kerry Nelson? Not a word.

They are supposed to be our eyes and ears, yet all we have is silence.

To me, the entire Lyndoch board and senior executive are accountable for the distress of every single Lyndoch person who is suffering or has suffered.

So I am going to keep exposing what I know, and I am going to also apply to become a member of Lyndoch, although I doubt I will be accepted, even though my mother was in Lyndoch for 10 years, and my late Dad, as a bricklayer, helped build some of it.

Warrnambool people started Lyndoch, we still own it, and we all have a stake in caring for its residents, its staff and its future.

What started as an important story for me is now a campaign – unashamedly – to restore a bold community voice inside Lyndoch and to stand up for those who need us to be strong.

On we go.

You can find the Lyndoch membership form here and its new constitution here.

Next: digging into the multi-million-dollar medical clinic.

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Carol Altmann – The Terrier

If we need a canary in the coal mine about what is unfolding at Lyndoch Living, it’s what happened at the Seymour hospital earlier this decade.

Seymour hospital was plagued with problems in the early 2000s, with a string of doctors resigning, a loss of birthing services, a dysfunctional board, and four official inquiries into the mess in less than two years.

Into this crisis came Doreen Power, who was appointed CEO of Seymour Health in 2007 and left in 2012, during which time the hospital saw many changes and the small town of 7000 people virtually imploded.

Ms Power, who is now CEO of Lyndoch Living, was hired by the Seymour hospital to get things done and she did: birthing services were resumed, the doctors came back to work, and the hard-working staff at the hospital continued to provide the best services that they could.

But behind the scenes of all this “success” was a human train wreck of broken, dis-spirited people, many of whom were allegedly treated so appallingly that they are only just starting to recover and some say they never will.

I have spoken to many people from Seymour about this period and the same stories are repeated over and over:

staff being bullied, losing their jobs for no reason, being “marched off the premises” without warning, hounded over minor issues, feeling disempowered, afraid, depressed and having “nowhere to turn” because the board either wouldn’t listen, or wasn’t told.

This sounds frightening familiar to what is now allegedly unfolding at Lyndoch Living.

“People became severely depressed and traumatised and felt there was nobody who could help them,” said one Seymour woman who spoke on the condition of anonymity.

“There was a sense the board had been hand-picked and they wouldn’t help. You were told if you approached the board, you would be dismissed…if you wanted to keep your job, you had to shut up.”

In desperation, some staff organised a Seymour version of an underground resistance by wearing green ribbons to work as a sign that they were a “safe” person to approach if you were being bullied.

Can you imagine?

The terrible reality for these Seymour staff is nobody from the hospital board stepped up, staff were too scared to speak up, and the damage rolled on until the wider community was alerted to what was happening.

An anonymous letter drop was circulated throughout Seymour in early 2012 and local state MP Cindy McLeish, now deputy Opposition leader, was bombarded by people pleading for her to intervene.

Ms Power resigned as CEO in May 2012, just two months before Ms McLeish organised a public meeting that was held in the local footy clubrooms before a capacity crowd of more than 300 people. Nobody from the hospital executive showed up.

Neither Ms Power or the executive, however, escaped the wrath of the crowd.

“The meeting saw pent-up community frustration released about perceived high staff turnover at the hospital, allegations of bullying, a “toxic” workplace, former chief executive Doreen Power and the change from a community hospital to a ‘bean counter mentality’ among other things,” the Seymour Telegraph reported.

Seymour GP Dr Elliot Jarman was among the passionate speakers in the audience. He was quoted by the paper as saying:

“Over 25 years Seymour Hospital has evolved to provide first-class services. I’m proud of that. What I am not proud of is staff absolutely in tears, intimidated…what’s happening is (wrong).

“I’ve been to the courts, I’ve been to Worksafe…(they’re) unable to help. I’ve been seeing patients and my fellow colleagues in tears. It’s just not right. Our services are being damaged by the current management style.”

Another Seymour GP, Dr Rob Peterson, told the meeting that three core issues needed to be addressed immediately: improved communications from the board to staff, allegations of bullying, and low staff morale. Bang, bang, bang.

By the time of the town meeting, it’s understood up to 50 staff had left the hospital, either from being pressured or being fired, and a string of Fair Work claims that followed – I believe up to 14 or 15 –  have only recently been finalised.

“It broke this town and I don’t think it has ever fully recovered,” said one Seymour source.

Seymour ultimately had an intervention, with a ministerial appointment made to the hospital board to report back to then Health Minister David Davis.

By the end of 2012, the hospital chair had resigned and most of the executive team had been cleaned out after their positions became untenable.

As a local blogger, Seymour Dreaming, wrote: “why has the board been conspicuously silent when the community expressed concerns over controversial events for which is was ultimately responsible?”

Why indeed?

And then this, a heart-felt letter to the paper from resident, Janet McKenzie, which says it all:

“The (hospital) board…and past and present executive staff need to be accountable for the shame, hurt, stress and humiliation that has been placed on these staff and their families.

They deserve so much better treatment, as do volunteers who have so generously given their time…

These staff and volunteers must receive an unconditional apology and compensation/reinstatement for the treatment they have received at the hands of (the hospital).

It is not acceptable that is ignored as these are staff and volunteers who have given many years of unblemished, caring and passionate service..

Finally, I, like many other family members of the above staff will be there to give support, assistance and much needed emotional care to those that the (hospital) has abandoned.”

The canary is coughing at Lyndoch Living and I hope the board is listening, because this management style hasn’t happened just once before, but twice.

Next: Plenty Valley.

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