However, she said the council wanted the nationally-recognised charitable society to survive and wanted to discuss with Wastebusters potential future contracts covering a wide range of recycling and waste-diversion matters.
The council's infrastructure and services committee awarded the $301,400 annual contract for kerbside recycling collections and processing to the Auckland company on Tuesday and rejected two other tenders, including a $575,649 bid by present contractor, Wanaka Wastebusters.
The decision has outraged Wastebusters supporters and a protest march through town is being incorporated into this evening's Wanakafest parade.
Ms van Uden yesterday acknowledged, in a telephone interview with the Otago Daily Times, there were things the council could learn from the tender process and better ways were needed to acknowledge values that were of importance to Wanaka people.
She also hoped, in time, the community would get over the hurt.
"I think we need a process that is fair to tenderers but puts value on things that the community values. That is where we could sit down and work out how to do things better."
However, the council wanted to save ratepayers money and the decision also meant the Wakatipu Recycling Centre would operate at better capacity, Ms van Uden said.
The decision means Wastebusters will lose about half its annual revenue and will have to make up to nine staff redundant. All operations are being reviewed.
The new contractor starts on March 1.
Ms van Uden said the council did not want Wastebusters to disappear.
"We will be working with them actively, with open arms." Among the many things the council hoped to discuss with Wastebusters were contracts in education, biennial waste surveys, household drop-off recycling, construction and demolition waste diversion and processing, as well as food and green waste collection and composting.
Wastebusters' people were "the forerunners, the leaders, the visionaries" and problem-solvers who had dragged the council along with them in their bid to divert waste landfill over the past 10 years, she said.
Ms van Uden denied the council had been blinded by costs: "The reality is that $300,000 in costs goes straight back into the pockets of the whole community by way of reduced rates," she said.
Smart Environmental holds a separate recyclables processing contract for Queenstown and operates from the Wakatipu Recycling Centre, built by ratepayers in 2007 for $1.5 million.
Ms van Uden said the company was meeting performance indicators set for the Queenstown contract and would be monitored closely through the change. She did not think the council had got it wrong.
"The vote is with the head because that is what we are expected to do, with a balance of heart ... We were trying to recognise it would hurt Wanaka Wastebusters, so we are trying to stimulate it, trying to ensure it will keep going. But in the end, it was a competitive bid," she said.
