Councillors told option the riskiest
Councillors who backed going it alone on building a new Dunedin landfill were warned by independent experts it was the riskiest option being considered.
The report on Smooth Hill, developed by consultancy Morrison Low, was released publicly last week ahead of deliberations on the Dunedin City Council Long Term Plan.
In November, councillors voted 11-2 to build a landfill at Smooth Hill independently, subject to long-term-plan funding, rather than exporting waste out of the district or building in partnership with a private company.
Cr Sophie Barker said she was "satisfied" the council made the right decision, while Cr Andrew Whiley was concerned the proposed model could be affected by private competitors.
Council staff recommended the council go it alone, but Morrison Low's report advised the Smooth Hill landfill be built in partnership.
In 2023, Morrison Low said although a council-owned and operated landfill would have a lower impact on annual rates, it had significant capital requirements and was the highest risk of the final options.
Morrison Low also ranked the option 12 from 13 longlisted options, where it scored low in potential affordability and achievability.
Building in partnership would provide the council with industry expertise and access to a wider disposal market while disposing of waste out-of-district was "not a viable" alternative.
In a 2024 update, Morrison Low told councillors building alone had the highest potential revenue but remained the highest financial risk.
Running with a commercial partner was highly dependent on the commercial model and "deficiencies in contractual arrangements" between councils and private waste companies had been recently highlighted.
"Overall, the difference between [building alone or in partnership] is small."
If the council built the landfill alone, there was a risk of competition from commercial waste companies.
"AB Lime have already signalled they would look to develop their own transfer station in Dunedin, attract commercial customers away from DCC and transport waste to their landfill in Southland."
In their report to the council, staff said building independently provided more autonomy to dispose of its own waste and meet waste reduction goals.
It did rely on annual waste to the Smooth Hill landfill remaining "the same or similar" to current tonnages to the Green Island Landfill.
"There may be measures that could mitigate this risk, such as a landfill management contract with appropriate incentives," the report said.
It also noted Morrison Low estimated the landfill would cost $80 million, including 20% contingency.
The council had included $92.4m in the draft long-term-plan budget, which included a further contingency.
Cr Barker said councillors had "ample opportunity" to ask questions during the process and she was "satisfied" with the decision.
Risks were able to be managed through the contingency and Dunedin had "mountains of waste to dispose of", she said.
Cr Andrew Whiley opposed building the Smooth Hill landfill and said he was surprised to hear of AB Lime's planned transfer station.
"That was mentioned briefly in our papers, but yet when you look at our modelling and everything else, I found that revelation actually quite concerning because I believe that does change our business model on that basis."
Mayoral candidate Andrew Simms said he welcomed the release of information which allowed greater scrutiny of the council's decision but urged councillors to be certain they had considered all options.
"At first read of the report there are some figures that are difficult to reconcile with my evaluation of the business case for Smooth Hill. This requires more investigation and more questions before I could be in any way confident that council is making the correct decision."
Councillors are expected to vote on funding for the Smooth Hill landfill today, as part of long-term-plan deliberations.
ruby.shaw@odt.co.nz
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