Shellharbour Mayor David Hamilton says councillors chose a $2 million more expensive waste tender because the company recommended by officers was known for deliberately under quoting in order to monopolise the market.
Councillor Hamilton yesterday told the NSW Government public inquiry into Shellharbour City Council that his ALP caucus ignored the recommendation from staff and independent consultants out of fear the company would increase the price further down the track.
"There was a feeling among councillors that they were trying to grab a monopoly of waste within the state," Cr Hamilton said.
"Our inquiries found they had done this on a number of occasions. We were frightened our residents would end up paying more."
Graham Standen, the council's customer and environmental group manager, told the inquiry this week that the councillors' December decision would add an extra $1.9 million to the waste bill over a six-year contract.
The eight Labor councillors have all been asked at the inquiry if they knew the company they chose was a state ALP donor.
The Mayor raised the issue of unscrupulous waste contract pricing after being questioned at length about his understanding of councillors' role in the tender process and his reasons for not following the tender evaluation panel recommendation.
Echoing his ALP colleagues, Cr Hamilton cited social concerns as a major sticking point.
The councillors maintain it was their duty to ensure there were no job losses and that cost to residents was not the priority.
The inquiry has unearthed a lack of understanding on the part of councillors, and perhaps general manager Brian Weir, of their role and responsibilities in relation to government tenders.
The ALP councillors have insisted it was up to them to pick the best tender, regardless of price.
However, senior council staff and Commissioner Richard Colley have said statutory regulations guide councillors to simply rubber stamp the selected tender.
Mr Weir told the inquiry he was also unaware the councillors' action was illegal.
Counsel assisting the inquiry, Daniel Meltz, asked the Mayor how developers and contractors involved in major projects, such as Shell Cove, could be confident the council would make decisions based on proper process.
Cr Hamilton: I don't believe we went against the criteria.
Mr Meltz: Do you accept that there was only one recommendation made as to who the successful tender was?
Cr Hamilton: From the council officers' point of view.
Mr Meltz: Did you have a duty as chair not to allow that motion to go through?
Cr Hamilton: I disagree. Under the local government regulations, we as councillors selected the tender we considered the most advantageous to the community.