Shellharbour councillors have agreed to continue to take waste from the neighbouring Kiama municipality, but only for two years, not the five years initially requested.
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Shellharbour City Council said it had been taking domestic and trade waste from its southern neighbour since 2004, when the Kiama council closed its landfill operations at Gerroa and Minnamurra.
A five-year contract to accept the waste expires in December and the Kiama council has asked for another five-year contract.
However Shellharbour council staff said a two-year contract would provide the Shellharbour council with the flexibility to participate in any regional strategies that may become available in the short to medium term.
A two-year contract will reduce the life of the Dunmore landfill by three months, however Shellharbour council said recent initiatives put in place by both councils had extended the life of the landfill from about 15 to 25 years.
This week the Joint Regional Planning Panel approved the $14.6 million redevelopment of the Dunmore facility, which will soon see green waste collected weekly from Shellharbour households.
Cr John Murray said it was important Shellharbour co-operate with its neighbour, "but we need them to move on and work out a strategy, as we want to make our tip last as long as we can make it".
Cr Peter Moran said waste was not a problem confined to one area, but it was "unreasonable" to continue to offer five-year agreements.