With $707K payment from state, Reynolds reopening recycling centers
KALIHI, OAHU (HawaiiNewsNow) - Reynolds Recycling, the state's largest recycling company, plans to reopen its 35 redemption centers statewide Friday after closing them Thursday in a payment dispute with the state. The company said the state owed it more than $1 million, but when the state cut Reynolds a check for $707,000 Thursday, the company said it would call its employees back to work and reopen for business.
Kevin Basoc of Salt Lake had taken a car-full of recyclables to Reynolds' Puuhale Road location Thursday morning and then he learned they were closed for the day.
"I guess I have to wait, wait a little longer until the problem's resolved," Basoc said.
Reynolds said the state has been reimbursing it for fronting can and bottle deposits within about ten days, but the state admitted it took 16 days to pay them this time, only after Reynolds closed for business and temporarily laid off 105 staff Thursday.
"We have a significant amount of money which we're waiting for repayment for and until the state does that, purse strings stretch so far and then they don't stress any further," said Reynolds Recycling spokesman Bruce Iverson.
State Health officials said even though the law allows the state to pay their invoices within 30 days, they usually take just ten days or less to pay the recycling companies.
But because the Health Department had to juggle some accounts before the fiscal year ends on Monday, there was a delay.
"Normally they get paid within ten days, they got paid within 16 days. That's what's at issue," said Gary Gill, deputy director of the State Health Department, which oversees the recycling program.
Gill said the company received a check from the state for $707,000 Thursday afternoon, including $250,000 that Reynolds invoiced June 10 and the remainder that it requested June 17.
"The bottom line is it was a one-week delay for $250,000 but still conforming with the law and still faster than the law demands," Gill said.
Meanwhile, business was brisk at other recyclers that remained open, such as the RRR Recycling location on King Street near Pua Lane in Kalihi.
RRR said it too has dealt with delayed payments from the state.
'We can understand Reynolds' situation because the companies are fronting the money and we've been in the same predicament ourselves," said Keala Murphy, a spokeswoman for RRR.
Iverson, the spokesman for Reynolds, said, "I hope in the future the Department of Health can continue to work forward on payment issues so that we don't have the big build up of payments that seemed to have happened at this time."
Gill, from the Health Department, said "It's unusual that waiting an extra week for part of the reimbursement that is normally paid early would have caused that business to close for the day."
"We can anticipate that from time to time there will be short delays, so that's why it's important that a recycling business have enough cash flow and have enough liquidity and not go under when a check from the state is four or five days late. I should say when a check from the state is less than two weeks early," Gill added.
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