A Southern District Health Board (SDHB) spokeswoman said the Observatory Village Trust, set up by Waitaki District Health Services, will care for the 50 residents of Rendell on Reed from December 15.
The board facilitated a deal with the trust, which was announced on Wednesday night.
Trust chairman Ken Scott, of Oamaru, said the trust stepping in meant residents would not have to "spread all over the district" as there were few other care options in Oamaru.
"Because we have the structure and because of our plans a new aged-care facility the trust is building on Observatory Hill, it was logical for the trust to do what it could."
The trust would continue to operate the home as and where it was and residents and their families should rest-assured it would stay that way until the Observatory Hill village opened in August next year.
At that point residents could choose to transfer to the new village, which would have retirement units, rest-home and hospital care services.
While the trust operated it day-to-day, he understood the physical buildings of Rendell on Reed would remain the property of the present owner.
The board of the trust had experience and expertise in running rest-homes and had already "lined up" a competent and highly-skilled interim manager to run the home, Mr Scott said.
"The management of the home will totally be taken care of."
He declined to name the interim manager at this stage and said he expected details of when the trust would take over the home would be discussed at a meeting in Oamaru this morning.
Various agreements and contract details would also be discussed at the meeting.
Rendell on Reed director Vic Inglis, of Dunedin, said Seniorcare Nominees, the owner, of which he was also a director, had struggled to make the business viable, predominantly because of its inability to recruit and retain key staff.
The latest manager hired at the home, the seventh in the past two years, was leaving for Australia in two weeks, and another manager was moving out of the industry.
Mr Inglis believed his company’s struggles were not an isolated case when it came to rest-homes in small regions.
He was relieved a plan was in place for staff and residents.
A meeting with all residents and their families was called on Wednesday to advise them of the impending changes.
Etu Union organiser Ann Galloway said staff were told their jobs were secure for nine months and their contracts, while new, would not be altered from what they had agreed with Rendell on Reed.
She said what would happen to staff at the end of the nine-month period was the "six-million-dollar question" and some staff were "really upset and disappointed" about the changes.
The union would keep in close touch with the new operator.
New Zealand Aged Care Association southern representative Malcolm Hendry, of Dunedin, said smaller facilities in older buildings that were not purpose-built had been finding it increasingly difficult to stay viable in the aged-care sector. Maranatha Home in Mosgiel was another recent example.
The plan that was going ahead appeared to be pragmatic and would minimise disruption to residents.
SDHB executive director of planning and funding Sandra Boardman said the DHB was told two weeks ago Rendell on Reed wished to end its contract. She said no money had exchanged hands at this point.
"The agreement that has been reached is that Observatory Village Trust will aim to run the facility as close to cost neutrally as possible. Southern DHB will work with them to mitigate any financial risk relating to taking on the facility, in the form of covering the lease costs. Southern DHB and Observatory Village Trust will work transparently in relation to the running costs, with any profit returned to the DHB.
"So the overall value of the agreement cannot be determined until the ongoing running costs are known. However, the priority was to ensure that Observatory Village Trust was able to provide continuity of care for the residents of Rendell on Reed without exposing themselves to financial risk, and we are pleased to have reached an agreement that provides the best possible outcome for residents and the community."
She said residents would not incur costs above what they already paid to stay at Rendell.
