Council, mayor at odds over recycling subsidies

Council, mayor at odds over recycling subsidies
Image: Hawaii News Now
Image: Hawaii News Now

HONOLULU (HawaiiNewsNow) - The administration of Mayor Kirk Caldwell and a majority of the Honolulu City Council are at odds over a proposal to discount trash disposal fees for Oahu recycling companies.

Supporters of the discount said a struggling recycling industry needs the help but opponents said city taxpayers should not subsidize private businesses.

By a seven-to-one vote, the Council Wednesday approved a 25 percent discount on trash disposal fees for recycling companies that claim to be struggling because worldwide scrap metal prices are at a six-year low.

Council Chair Ernie Martin said the Council has heard from 10 small recyclers asking for relief.

"This was a make-or-break thing for them.  It's very tough industry for them.  Any type of discount that they could have to continue to be in operation definitely would assist them in continuing in this business," said Martin.

But the state's largest recycling company -- Schnitzer Steel -- would get 89 percent of the benefit of that discount, according to city officials.

"A reduction in the disposal fee for recycling residue should help recyclers to weather the storm in a market that continues to experience significant headwinds," said Schnitzer Steel's Jennifer Hudson in written testimony.

Tim Houghton, deputy director of the city's environmental services department, said, "This is a very large company that to me, this should be part of their business plan.  They have to deal with changes in the markets that they deal with."

Houghton said in the last five years, increasing, decreasing and even getting rid of the trash disposal discounts for recyclers has not affected the amount of material that's recycled.

"We just don't see a public policy benefit for us to subsidize a private company or private companies in terms of doing that without having any positive impact on the recycling rates," Houghton said.

Martin said, "It's hard to argue that point when they were recently criticized for the H-Power contract where they gave a 40-year sole-source contract that was worth tens of millions of dollars when we're only talking about a small subsidy to assist recyclers."

Houghton said the 25 percent trash disposal discount for recyclers would cost city taxpayers nearly $600,000 a year, an amount Martin, the Council chair, said is a drop in the bucket when you consider the city's garbage division had $20 million in unspent funds in 2014.

"You can't even spend all of the monies that the council provided you, in fact, had to carry over or lose $20 million in a fiscal year.  You know, that's not very compelling," Martin said."As much as we can encourage them (recyclers) to stay in business, I think it's well worth it," Martin said.

Caldwell's spokesman said the mayor is still deciding whether he will veto the proposal.