Friday, 07 August 2020


More than $240,000 spent on council investigation into Smart Environmental

In September last year, we reported extensively on the solid-waste disposal contract between Thames-Coromandel District Council and Smart Environmental.

Our report covered a lot of ground, including allegations of Smart enjoying a competitive advantage from TCDC with regard to the collection and disposal of the commercial waste (household waste in wheelie bins, waste generated by businesses and skip bin waste) and a comment from the Office of the Auditor-General (OAG) that the relationship between TCDC and Smart warranted further investigation (but that it was the OAG’s understanding that TCDC had “some work in progress” in that regard).

At the time our report was published, TCDC was still “negotiating” their contract with Smart, approximately six months after we have approached TCDC for the first time to respond to some questions about the contract. At that time already TCDC could not meaningfully reply to us as negotiations on the contract have already commenced.

In February this year, we requested TCDC under the Local Government Official Information and Meetings Act (LGOIMA) to provide us with an update on the contract negotiations and any investigation they may have undertaken into their relationship with Smart. Our request was made up of 27 questions. TCDC responded to us not long before commencement of the Covid-19 lockdown. Although some of the information we sought was withheld under the provisions of the LGOIMA, it is clear that TCDC’s legal and communications departments attempted to reply to us as fully as possible. We thank them for that.

What we have learned is that TCDC indeed undertook an investigation into their contract with Smart. The investigation was conducted by chartered accountants, PriceWaterHouseCoopers, consultants, Morrison Low, and a private investigator. Council unilaterally decided to carry out the investigation and not because of a recommendation by the OAG.

The investigation has been completed at a total cost to the ratepayers of the Coromandel Peninsula of $242,389 plus GST - $109,873 plus GST to the private investigator, $78,795 plus GST to Morrison Low and $53,721 plus GST to PriceWaterHouseCoopers.

The investigation was funded from council’s Corporate Services Legal Expenses, Solid Waste Collection Legal Expenses and Legal, Audit and Risk Legal Expenses budgets.

PriceWaterHouseCoopers focused in the investigation on whether Smart, according to TCDC, “…had acted in a manner deliberately contrary to [their] contract with council,” and Morrison Low reviewed the payments made by Smart for the disposal of their commercial waste at TCDC-owned refuse transfer stations. The private investigator collected information early on in the investigation, which information was handed to PriceWaterHouseCoopers.

Specific issues considered in the investigation included whether Smart declared the disposal of all of their commercial waste at TCDC-owned refuse transfer stations, whether Smart disposed of their commercial waste outside the normal operating hours of the transfer stations and at rate cheaper than what other commercial waste disposal operators on the Coromandel were paying, and whether Smart has been transporting heir commercial waste to the landfill at Tirohia at the expense of the ratepayers of the Peninsula.

The findings of the investigation have already been reported to the OAG and forms, according to TCDC, “…the basis of ongoing commercial negotiations between council and Smart.”

On the specific question of whether TCDC was aware of incidences where Smart mixed glass recycling in with kerbside rubbish collection (the collection of blue bags), council replied, “This issue forms part of the commercial negotiations ongoing between Smart and council.”

The relationship between TCDC and Smart featured prominently at a consultation meeting on council’s draft Annual Plan 2020/2012 in Whitianga on 18 March (reported on in The Informer of 25 March). At the meeting, Bruce Hinson, TCDC’s Operations Group Manager, indicated negotiations regarding the TCDC solid waste contract with Smart were expected to be completed within a month. Obviously the Covid-19 lockdown will push that timeframe out, but hopefully the ratepayers of the Coromandel Peninsula will not have to wait too long once life returns to some form of “new normal.” They deserve to know that their $242,389 plus GST was money well spent, that all the issues that need to be made public have been made public and that going forward, after more than a year of “negotiating” an existing contract, there is nothing further to be concerned about.

Pictured: The entrance to the Whitianga Refuse Transfer Station last Sunday afternoon.


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