Loading...
HomeMy WebLinkAboutCOM 0062.008 1998-2000 O~ ~ N MEMORANDUM ~ ~ w TO: The Members of the Hawaii County Council - ~ w CC: Public works; Jiro Sumada, Corporation Council; Richard Wurdeman, Hawaii ~ Tribune Herald; Jason Armstrong, Recycling Systems Hawaii; Ululani Rosario, Margaret Pahio FROM: Shon Pahio DATE: 8/11/1999 SUBJECT: Glass Audit (Recycling Systems Hawaii) Last night I watched the County Council Meeting about glass recycling on channel 9 and decided that I needed to write this letter in the defense of Margaret Pahio and Ululani Rosario. I am the son of Margaret Pahio and I have recently moved back from Oregon to assume the position of General Manager at Business Services Hawaii. I spent four (4) years at Eastern Oregon State College majoring in Business and Economics, and two (2) years in Portland working as a manager for a recycling company (Far West Fibers, Inc.). During this period I was exposed to several dealings with County officials and County sub-committees. I was also involved in the development of various private sector contracts. I consider myself a "good" businessperson with adequate common sense. Based on Councilman Yagong and Councilman Tyler's conclusion at the August 10, 1999 meeting this qualifies me to be an interpreter of the Hawaii County Glass Contract. Therefore, I am submitting my argument and conclusion in favor of Recycling Systems Hawaii. I contend that Recycling Systems Hawaii along with its owners and operators should not be held liable for any damages to the County because they followed all of the contract guidelines. Listed below are the guidelines that Councilman Yagong claims were not followed by Recycling Systems Hawaii. Pace 1, Paragraph 2: Background: "Through this program, monies will be awarded to approved glass processors who divert glass, to in-or out-of-state. Payments will be based on reported amounts of glass diverted to an end market orout-of--state from either landfill." Page 1, Paragraph I: Introduction: "The monies will be awarded at a rate of $.08 per pound of recycled glass, with required documentation showing proof that the glass was diverted to an oft= or on-Island market orout-of-state" Page 2 Paragraph 1: Funding Levels for Diversion Grants: "To be eligible for payment, approved glass processors must show proof that glass has been diverted to an on- or of~island market or out-of-state." 6 2 , QOg Comm. No, )}le No. REF Ref. To: Ref. Date Page 2, ParaEraph 2: Elieibility: "Glass processors must submit accurate and complete claim forms, (Exhibits I, II, III) bill of lading for the material sent out-of--state and proof of acceptance by an end market enti for in-state uses." PaEe 3, Application Form and Criteria for Approval: "(6) A listing, description and proof of end markets;" (Exhibit II) Paee 3 and 4 Contracts: "The County reserves the right not to approve any payments for which back-up documentation or reporting is not complete." Page 5 Audits: "Participants are subject to audit by the County to assure that the activities were in accordance with the terms of the Glass Recycling and Diversion Program and the executed contract. If participant is found to have falsified documentation, the participant will be responsible to return to the County all grant money received with 15% interest, compounded daily, from the time the participant received the money." Conclusion• I have underlined the term "end market" in the attached guidelines because it is the most significant term that needs to be reviewed. This term is located in many places throughout the contract and the guidelines, yet nowhere in the guidelines does it state what qualifies as an "end market." The county does not give an example of what a legitimate "end market" is. The county does not provide a definition of the term "end market." I don't even think the county knew what they meant by an "end market." Therefore as "good" businesswomen Margaret Pahio and Ululani Rosario used common sense to make this determination. They concluded that an "end market" was the end of the line where the product is finally used for a utilitarian purpose. They do not contest the fact that the material processed needed to be diverted to an end market. That is what they have been doing for the past 6 years. If you look at their applications and invoices you will find that they stated with every submittal that they were their own "end market." The weight tickets were the documents they used to show when they transferred glass out of their processing department and used the processed glass for their operations. When they made improvements to their property they had two options. They could go to Glover or Yamada and Sons to purchase gravel and sand, or they could use the glass that they had processed. Being the "good" businesswomen that they are they choose the lower cost alternative. Rather than pay $10.00 or more per ton for crushed rock, they paid $0.00 per ton for crushed glass. Makes sense huh? They provided all of the necessary documentation to the County and when their invoices were paid they knew that they were doing things right. Thus this became an accepted practice for them. If their claim had been rejected and sent back with an explanation, they simply would have made the required changes and continued the program in that manner. This is exactly what they did when the new guidelines came out in the beginning of 1999. To think that Councilman Yagong expects them to repay $200,000 because a mistake was made when the County drafted the guidelines and again when the staff interpreted them is ludicrous. They did all the work that was required of them and also met the County's objectives. They diverted over 5,130,100 lbs. (256,505 of Councilman Yagong's rice bags) of glass out of the landfill between Jan 1997 and Dec 1998. They should be commended not scrutinized. As representatives of the people I realize that you are required to do audits and make sure programs are running effectively, but please don't use my mom as a scapegoat for setbacks that occurred in a startup program that was mismanaged by your employees. You all know that when new programs are started transition periods are needed to work out the kinks. During this period the program needs to be closely managed so that everyone involved is provided the proper infoanation and guidance. I know that you are upset and embarrassed by this fiasco so I ask you to use logic and not emotion when you are making your determination. I have also provided some other comments at the end of this memo for you to review. Sincerely Yours, Shon Pahio Additional Comments: 1. The contract with the County does not state that the end market for the glass must be a separate company or individual. 2. The County must prove that Recycling Systems Hawaii was not a legitimate end market. 3. Recycling Systems Hawaii was using the glass in some of the same ways that the county is using it now. ? If you go down to the landfill you will find crushed glass spread out in the driveway near the scale. ? If you go to the Recycling Systems Hawaii site you will find crushed glass spread out all over their driveway. ? The County weighs the glass once; only when they receive it. They don't weigh it when they take material out of the stockpile. ? Why should Recycling systems be required to provide weight tickets to document every use and placement of the glass material? 4. Recycling Systems Hawaii was using the Hawaiian Cracked Glass as driveway sand, for decorative glass gardens, for oil absorbent, and for planters, statues and stepping stones. This sounds like an end market to me. 5. Page 4 paragraph 5, Payment: "The county will review the claim forms and documentation to determine whether the amount of glass listed will be approved. If conflicts arise within documentation, participants will be in ormed of the error". Until now Recycling Systems was not informed of any error, so how were they to know that they were not meeting the criteria that the council has identified. 6. Recycling Systems Hawaii did not falsify any documents. They filled these documents out honestly, and being that public works wrote the guidelines and public works approved Recycling Systems Hawaii's application and invoices there is no discrepancy. Who could know better than public works (the people writing the guidelines) what public works meant by an "end market."