The Hikurangi board yesterday begun a consultation process with staff and residents to discuss the future of home.
Pam Erni, chair of the board of trustees, said they had been assessing the home's financial status in the wake of some concerns raised in the 2012-13 draft budget.
Mrs Erni said the previous year's losses had been met from cash reserves, but that was no longer sustainable.
"The board is working through the financial issues in an endeavour to resolve the situation, but unless there is a dramatic turnaround in Hikurangi's fortunes, it is likely the home may have to close," she said.
She said a number of factors were contributing to the situation. These included fluctuating occupancy rates over the past five years, rising costs, future earthquake strengthening liabilities and the ongoing expenditure of maintaining the facility.
"There's also a widening gap between the funding provided through DHBs for rest home care and the actual cost of provision to the level required for increasingly frail, elderly residents," Mrs Erni said.
She said they had looked at other options, including a move to provide hospital care to boost revenue, but these and other similar options were not considered viable because of the cost of implementing them.
"We're mindful of the fact that other providers in the Wanganui area are moving, or have moved, to providing that level of care."
Earlier, Mrs Erni had met with Tracey Schiebli, Whanganui District Health Board service and business planning general manager, and outlined the board's financial difficulties.
The Hikurangi board is contracted to the WDHB to provide rest home services.
Ms Schiebli said news of a possible closure would be very hard for everyone concerned - "more so when it comes so soon after the closure of the Aubert Home of Compassion".
She said it highlighted the strain smaller rest homes throughout the country were under as the market continued to change. "It's all about economies of scale. Rest homes are expensive to run, and the smaller the number of beds they have, the harder it is to make ends meet."
THE HOME
Hikurangi was originally the homestead of Mr and Mrs Hope Gibbons in a park-like setting on Mt View Rd, Bastia Hill.
The home was bought by the Wanganui City Council and Anglican Church in 1953 and established as a home for the elderly.
Over the years, the home has been extended and facilities added to improve conditions and it is currently run by a charitable trust. It is licensed as a Stage 2 rest home.
There are four bedroom wings, two therapy activity areas, a chapel, hairdressing salon, two small lounges and a main lounge, and each resident has their own room.
