County wants critical look at 1992 landfill contract

HILO — In 1992, the county inked a generous, endless contract with Waste Management Inc. to create and operate a landfill at Puuanahulu. Then the courts gave the private garbage giant a little more.

Now Hawaii County wants to negotiate the deal to realign it with present-day realities. Resolution 159 on the council Finance Committee’s agenda at 2 p.m. Tuesday would allow Corporation Counsel Joe Kamelamela to hire outside legal help, not to exceed $300,000, with expertise in solid waste contracting.

“This is the first time since 1992,” Kamelamela said Wednesday of contract negotiations. “It’s being reviewed overall. It’s a comprehensive review.”

A lot has happened in the almost 30 years since the contract, which has no termination date, was approved by the County Council and signed by then Mayor Stephen Yamashiro.

The original contract anticipated Waste Management would hire its own workers to run the landfill. But the Hawaii Supreme Court, in the precedent-setting 1997 ruling, Konno v. County of Hawaii, said government cannot turn over to the private sector work that is “customarily and historically provided by civil servants.”

The lawsuit was filed by the United Public Workers union, which had 10 employee members that at the time worked at the county landfill in Kealakehe, which was being closed.

The ruling meant the county had to continue to pay salaries and benefits for the landfill workers, while still paying Waste Management a tipping fee for each ton of waste dumped there.

Environmental Management Director Bill Kucharski said his office requested outside legal help.

“Waste Management is a very experienced corporation,” Kucharski said. “They have a contract that favors them very strongly. … The original contract with Waste Management — we just gave them everything.”

Telephone messages left with Waste Management’s Hawaii media contact were not returned by press-time Thursday.

Hilo attorney Brian De Lima was one of two dissenting council votes on the original deal. He said he had concerns about privatizing what was a government function, and especially about starting piecemeal a big-ticket solid waste project without taking a holistic approach to garbage handling through an integrated solid waste master plan.

“If you have a private contractor do it, then they’re making a profit, and then somebody else is giving,” De Lima said Thursday. “We didn’t have the numbers and it wasn’t part of an integrated solid waste plan. … In the long run, it wasn’t in the best financial interest of the county.”

Environmental Management officials predict the Puuanahulu landfill has enough room for 150 years worth of garbage, even when the entire island’s rubbish is sent there with the closure later this year of the county-run Hilo landfill. The contract, as written, runs for the life of the landfill.

“There’s no termination, no end,” Kucharski said of the West Hawaii landfill. “It ends when the landfill closes.”

And contract costs continue to rise. The county paid Waste Management $2.9 million in fiscal year 1993-94, a figure that escalated to $5.5 million in 2010-11 and has spiked to $11.5 million in the new budget.

The County Council agreed to raise rubbish fees in 2017.

The first fee hike, from $85 per ton to $108 per ton, went into effect July 1. Prices will continue to increase by $2 a ton each year until 2022, when it will be $116 per ton. It will take County Council action after that to raise it further.

Kucharski said the increase last year brought in $2.5 million, of which $2 million went to Waste Management.

“We’re just trying to come in and make basic changes,” Kucharski said. “There was a significant change in circumstances.”