Single consultant on failed Horowhenua landfill paid nearly $1 million

6:36 pm on 1 February 2023
Levin landfill at Hōkio

The Hokio landfill. Photo: Supplied / Catalyst Group

A district council ignored its own financial controls to outlay almost $1 million on a single consultant, adding to a mountain of costs over a controversial dump.

What was meant to be $7500 of consultancy work in 2020, by May 2022 had ended up costing Horowhenua ratepayers $895,000, the auditor-general found.

The council (HDC) paid invoice after invoice from Morrison Solutions despite having no plan, no business case and no written contract, John Ryan said in a letter to the council on Tuesday.

"The spending was within delegated authority, and we have not identified a conflict of interest," he wrote.

"However, the absence of a written and clear rationale for the work and selection of the provider, and absence of a contract, raises questions about whether that spending represents good value for money."

Altogether, the long and tangled process to decide the fate of the dirty Hokio landfill has cost ratepayers $1.6m, and it was not over yet, according to Monique Davidson, who as chief executive since last May has worked to salvage a fraught, divisive situation.

Councillor Sam Jennings sparked the auditor-general's investigation, and feels vindicated.

"It's bittersweet... you don't like to have to complain about your own council," Jennings told RNZ on Wednesday.

"I don't think ratepayers have got good value for money because obviously, we've spent around $1.5 million on a process that we've had to start over again."

The council is meeting on Wednesday to hit the reset button, to consult yet again with the community over the dump.

The dump was meant to earn the council money, but instead Davidson revealed that the council's solid waste operations were about $8m in debt.

"Part of the reason it exists is to make money to offset rates... but we are borrowing money to fund the activity," she said.

"This demonstrates the challenge council has... in determining the future of the Levin landfill."

The dump has repeatedly polluted the groundwater and stream that runs through the Hokio Beach coastal settlement, in breach of its consents.

Local opponents, who fought to get the council to set up a group with them to help decide its future, have been frustrated at how slow things have gone.

The dump itself has been "temporarily" closed since 2021, with the waste - both Horowhenua's and nearby Kapiti's - trucked north to a big private landfill near Marton.

'No apparent attention paid'

The auditor-general said the council's procurement processes were weak to start with, and were not followed anyway when it first engaged Morrison Solutions for what turned out to be a complex job - reviewing a 2020 report that recommended keeping the landfill going.

The previous chief executive told the auditor-general the reasons he directly engaged Morrison, but these had not been documented, Ryan said in his letter to the HDC.

Any such spending above $30,000 demanded a procurement plan, but none was done.

By the end of 2020, already more than $100,000 had been invoiced - but the council's monthly financial reporting did not make this clear.

"The costs of the work on the future of the Levin landfill were not shown separately and it is likely the scale of the overall costs was not evident," Ryan said.

"There was... no apparent attention paid to the increasing costs."

The auditor-general looked into concerns about conflict of interest, but found no evidence of a pre-existing connection with the consultant, such as a friendship or other business or personal relationship, that might have required careful management.

"Although we have not identified a conflict of interest in this case, it is worth noting that situations like this can lead to questions about whether there is one."

Jennings said it was a bit disappointing the auditor-general did not investigate this further.

Overall, the entire landfill process was a "sorry saga... ultimately found to be illegal", he said.

'It's really unfortunate. There has been a huge wastage of ratepayer money on a flawed process."

The auditor-general said a lot of improvements had been made in the last year, including the council adopting central government procurement rules.

Jennings has been appointed to a new role of an elected representative on the council's procurement review group.

Davidson, in the meantime, got the council to agree to reconsider the landfill's future properly as part of amendments to the long-term plan, which is what Wednesday's meeting is about.

The process before "was not good enough" but they had made fundamental changes, she said.

Horowhenua Mayor Bernie Wanden said the millions in debt around waste operations had been incurred over many years, and it was not unlike how they borrowed to fund other core operations.

It was among the "enormous pressures" they, like other councils, faced as they looked at setting a rate rise, Wanden said.

"Once we get the decision on the future of the landfill then our waste minimisation strategy... will be a whole other piece of work we have to do."

Get the RNZ app

for ad-free news and current affairs