The bankruptcy of local trash hauler Rolloffs Hawaii could end up costing Oahu taxpayers millions of dollars.
Rolloffs was sold in a bankruptcy auction to West Oahu Aggregate Co. for $5 million on Wednesday. But under bankruptcy law, most of the proceeds will go to Rolloff's secured lender and not the city, which is owed nearly $3 million.
"With these big companies if they owe money to the city for one or two years, that's okay. I don't think that's right. It's not fair to our taxpayers," said City Councilmember Ann Kobayashi.
Rolloffs is one of the largest customers to the city's landfills and its HPower Plant. It collects trash from apartment complexes, government buildings and shopping centers and takes it to the dumps and the HPower incinerator, paying the city an average of about $825,000 a month.
The city said the company has been current until late last year when it ran into financial problems.
It says the bankruptcy sale will allow Rolloffs to continue to dump trash at its landfills and incinerators. The company has agreed to pay the city a weekly rate of $125,000 for future deliveries.
Kobayashi says the city's losses could have been avoided. More than two-thirds of Rolloffs' debt is more than 30 days old.
Back in 2014, Kobayashi authored a city law to make it harder for refuse companies like Rolloffs to run up huge debts to the city. It required the city to charge penalties if payments aren't made within 30 days. But she says the city did little to enforce the law.
"The city should be collecting within 30 days. but that hasn't happened," she said.
"Taxpayers, if they pay their property tax a little bit late, or a month late, or two months later, you know there's a fine."