The social good of employing people with disabilities to hand-sort recyclable materials has been conservatively valued at $4 million, according to a document provided to the Southland App by the Invercargill District Council.

If 82 of the approximately 100 workers had lost their jobs when the Southland disAbility Enterprises contract ended earlier this year, it would have cost society an estimated $2.4 million in day care, residential care and hospital costs.

Additional family costs (assessed on the scenario of someone leaving a $50,000 job to become a caregiver) were estimated at $1.6 million.

“With the cost of $4m to the community if SdE were not able to continue employing their disabled staff, it is clear that the tangible social good element of this contract is substantial," the document says.  

The social good valuation was provided by Southland disAbility Enterprises to the council for consideration during discussions on a rescoped, 18-month contract with the facility, beginning on July 1.

The contract has been awarded and is now being checked by lawyers before signing off.

SdE chairman Stephen O’Connor said this week that social enterprises like SdE could mean additional service costs, but it seemed many were willing to incur those costs.

The difference between what to pay a commercial operator as opposed to a social enterprise was “very subjective".

Figures proposed 15 months ago, when SdE began renegotiating its recycling contract, were now “totally irrelevant in today’s environment because the whole market has changed considerably and impacted by Covid as well," he said.

The contract negotiations with the Invercargill council began after the Gore and Southland district councils both decided to exit the three councils’ WasteNet consortium, which had held the previous recycling contract with SdE for nine years.

Over that time, the three councils paid $10.5 million to SdE and under a revenue-share agreement earned about $611,000.

Mr O’Connor said the value of the social good was incorporated into the Invercargill City Council’s decision “so that they could assume - a commercial operator would pay this and social good is worth at least that, and so long as we are not paying more than the two combined we can put our hands on our hearts and say we are not abusing ratepayers money."

The report said while community goodwill was hard to quantify, SdE’s charitable objectives encouraged the public to recycle enthusiastically.

Losing the contract would have put major costs onto the social welfare system, the region and SdE’s families. SdE brought significant benefits, achieved council aims and objectives, provided equity and created an inclusive city, the report said.

“The controversy over the WasteNet tender process last year and WasteNet’s recommendation that the new recycling contract not be awarded to SdE resulted in widespread overwhelming support for SdE to continue as the service provider," it noted.

Supporters included community funders, Community Trust South and the Invercargill Licensing Trust. 

An online petition to Invercargill City Council was signed by 25,892 people.

A Southland Chamber of Commerce survey of over 400 businesses revealed 90% were prepared to pay up to $25 extra a year on household rates if SdE kept the contract.