By Scott Albright
Hawaii County officials are considering new measures to ensure commercial trash haulers don’t skip out on paying tipping fees at the island’s two landfills. Zendo Kern, Puna’s representative for County Council District 5, is proposing a bill that would require commercial trash haulers to hand over some form of collateral to the county before being allowed to unload waste at the landfills.
“We would still bill them, but this way we would have some money on the side in case they default,” Kern said.
Commercial trash haulers who are continuously delinquent on their tipping fee payments are causing quite the headache for some county officials. According to Dora Beck, acting director of the Department of Environmental Management, $1,589,537.84 of the $2,481,593.73 in the accounts receivable for solid waste was over 90 days past due as of November 30, 2012. Beck did not say how much of those overdue payments are from tipping fee charges only, but she did explain the difficulties the county has had in collecting those payments and what is currently being done to alleviate the problem.
“The Department has begun denying access to Landfill customers who are delinquent on their accounts, has filed lawsuits, and is looking at possible changes to the County Code that will aide in the collection or prevention of past due fees,” Beck wrote in an email. “Lawsuits are a useful tool but its effectiveness depends on the financial situation of the offender.”
Kern’s proposed bill is not designed to make commercial trash haulers who are late on their bills pay up, but rather seeks to prevent similar offenses from occurring in the future. The bill is still in the working stages, but what Kern envisions is a system where commercial trash haulers are required to provide cash or a certified check in the amount of about 1 ½ times of their monthly tipping fees as collateral to the county. If the hauler is delinquent on their monthly payment then the county will take out the designated amount from the collateral to cover the costs.
According to Beck, about 60 percent of the county’s budget for disposal of solid waste comes from a general fund and about 25 percent from tipping fees. Despite the fact that more than $1.5 million of solid waste management money is overdue, Beck explained “lost revenue from tip fees does not greatly impact the County’s ability to effectively dispose of solid waste.” Over the long term the delinquent payments do add up though, and the costs have to be adjusted somewhere in the budget or passed on to another entity outside the county’s control.
One proposal introduced last year by former councilor Brittany Smart would essentially pass those costs off to anyone disposing of their waste at landfills or transfer stations through a ‘pay as you throw’ system. That proposal, which would have required residential and commercial trash haulers to pay a fee upon entrance to a transfer station or landfill, was rejected by the county council, and, according to Beck, “there are currently no plans to charge residential customers a fee to dispose of waste at the transfer stations.”
Rather than charge a fee, the county may end up doing the opposite – that is allowing small businesses to use the transfer stations for waste disposal at no to little cost. The idea was listed on the Jan. 30 Department of Environmental Management Commission meeting’s agenda but has yet to be officially considered by the county. Kern, who was familiar with the item but unsure of who introduced the concept, explained that under the proposal free use of the transfer stations would not be for commercial trash haulers, but rather for small businesses who dispose of their own waste instead of hiring commercial haulers to do it for them. He said under the concept a small enterprise like a bed & breakfast would be allowed to purchase bags from the county with a logo or some other type of identifier on them that they could use to dispose of commercial waste at the transfer stations. Fee-free trash disposal for small businesses could potentially provide an incentive for small businesses to manage their own waste, and in effect require them to reduce that waste so as to prevent unnecessary trips to transfer stations.
A 2006 Kohala Center report titled Managing Waste on the Big Island, explained that commercial enterprises are a huge contributor to the county’s waste problem, particularly when the economy is doing good. According to the report, increasing waste generation rates on the Big Island grew “somewhat faster in what is defined as the ‘commercial sector,’ which in this case includes both businesses (large and most small) and some more densely populated and wealthier residential developments that have contracted with private waste haulers to have their trash removed curbside/locally.”
The report goes on to say, “Hawai?i County’s per capita waste generation was 9.5 pounds per day, compared to a national average listed by the EPA as only 4.5 pounds per day” in fiscal year 2004-2005. According to data from the EPA’s website, the national average for municipal solid waste disposal was 4.45 pounds per person per day in 2010. No data was available for Hawai?i County’s waste generation rate for 2010, but a December 2009 County of Hawai?i Integrated Resources and Solid Management Plan Update states the county generated 9.4 pounds of waste per person per day in fiscal year 2007-2008.
Although there are differing views as to why more waste was generated on the Big Island per capita than in the rest of the country, the Kohala report says “most agree that it is related to both the island’s high level of tourism and its general reliance on imported goods, both of which tend to result in the consumption and disposal of large amounts of packaging waste.”
The report predicted that the increase in tipping fee rates, which rose from $35 per ton in 2003 to $85 per ton in 2008, “should provide an incentive for those generators who pay tipping fees to reduce their disposal rate,” however the report did not indicate how small commercial trash haulers would be able to afford increased rates while hauling less trash without passing the costs off to the waste generators.
Robin Bauman, DEM business manager, said the increase in tipping fees could be attributed to the high cost of shipping waste/recyclables off-island, while Kern said he believes the tipping fee rates are fair. According to an October 2012 Waste Business Journal article, the average price to dispose a ton of waste in US landfills was $45.02, almost half the cost of the Big Island’s rates.
(Scott Albright graduated with a Master’s degree in China-U.S. Relations from the University of Hawai?i at Hilo in May 2012. Before moving to Hawai?i Scott worked as a newspaper reporter for The Independent in Edgewood, New Mexico, where he was awarded first place in the 2009 New Mexico Press Association Newspaper Contest for best continuous coverage in a class I weekly newspaper. Scott is currently seeking to continue his education at the University of Auckland in New Zealand where he plans to obtain a PhD researching the role newspapers have in promoting peace and cross-cultural dialogue in global settings. To see more of Scott’s work visit www.chinausrelations.com or follow him on Twitter at www.twitter.com/ChinaUSRelation.)
February 11th, 2013 at 5:15 am
As much as I respect native Hawaiian rights and feel our refuse system is much less than perfect, at some point county government has to come to grips with these free riders.
The Keaukaha situation on unpaid taxes has approached the intolerable level. Any other homeowner from Hilo to Puna or Kona might well be facing foreclosure action by now.
I have watched the disposal process closely since Matayoshi days and the county seems unwilling to tackle it fairly and honestly. (That’s six different administrations!)
I say no more free rides. Patience,understanding and tolerance is being abused by these miscreants.
February 11th, 2013 at 6:10 pm
I have never understood the process the County uses that creates this issue.
A waste generator, such as a business, hires a trash hauler who bills the customer for services rendered, such as dumpsters, hauling etc., and also include the landfill “tipping fees.”
And the hauler “floats” this “tipping fee” money – obviously for quite some time.
Try to get waste picked up by any hauler once YOU as a customer get past 30 to 45 days. IMPOSSIBLE!
Thus, the haulers are making big bucks – by taking their customer’s money for the tipping fees, and not paying the County in proper time.
How about the County just bill the generators directly?
Let the hauler do the hauling.
Or, could it be a potential profit making business for the County to just become the only waste hauler itself?
I do however, like the requirement of a cash security deposit. However, if the County is not going to manage its delinquent Accounts Receivable as it does now, how or why would it manage it any better under a cash deposit manner? That just seems like a short term fix that does not cure the core issue.
The ONLY way at the present time this can get fixed real fast – deny ANY waste hauling company landfill access – once their payments hit day 31.
PERIOD.
Just like the hauler does when a business does not pay.
The County could also do itself a big favor – notify any customer of ABC and XYZ hauler – once that hauler becomes delinquent. Maybe provide each waste generator a list of hauling companies that consistently pay the County on time and a list of those who don’t.
I wonder how many of these delinquent haulers are allowed to “bid” County work for other projects too.
Maybe a rule that disqualifies any hauler from bidding any County/State/Federal project that has outstanding fees due over 30 days???
Again, the County can learn to manage its affairs like a business does. Like the very businesses that haul waste currently do to their customers!
February 11th, 2013 at 6:48 pm
Lots of good notions, Ken.
However, haulers do not share their customer base with anyone.
If the county shuts them off, there quickly will be a new dump site, all sans an EIS. We simply have no municipal waste system. This is not Oahu or the mainland.
February 11th, 2013 at 7:11 pm
I agree Hugh.
Perhaps maybe in this situation, the County needs to become more like Oahu or the mainland. Keep in mind this same government entity that sold an owned D-9 and then the whole rent back deal!
However, that being said, the “customer base” here is not a significant number of businesses.
For the cost of one full page ad in the HTH and WHT, the County could list every hauler and amounts overdue. Let the “customers” decide if paying money to a hauler that is supposed to cover the tipping fees and the hauler keeps the money for as long as they see fit – with immunity from the County – maybe they may elect to use a different hauler. I wonder – does the County even assess an interest charge on delinquent accounts?
Let the “press” do the County’s job of collecting the outstanding AR.
I also can imagine and I would even place a small wager – but I bet the top three biggest delinquents – have most of the County/State/Federal Waste Hauling Contracts.
Maybe it’s time the County look at privatizing the solid waste operations here.
March 31st, 2013 at 1:47 pm
ryan k rubbish aka, olivia inc, aka ryans towing and used auto parts aka ryank services inc. aka hawaiin island disposal, aka hawaii island scrap. owes the county over 500,000 dollars in unpaid tipping fees but is still allowed to dump. by spending $5.00 per truck changing registration! kumalani ryan kekipi (ryan k) was able to change the names on his trucks to hawaiin island disposal and still able to dump at the landfill. Is he paying off county officials as they still let him dump at the landfill no question asked? but other haulers were shut off? good question?