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HomeMy WebLinkAboutCOM 0116.001 2016-2018 Eileen O'Hara tV o� ;,••• Phone: (808) 965-2712 1 Council Member :�p� '' •'.+,;•. Fax: (808) 961-8912 Council District 4 �'°l Email: eileen.ohara@hawaiicounty.gov Chair: Environmental • •'•.;_ Vice Chair: Planning Committee and •• +••ice Mi •MOw i•• Management Committee '+TE off•;,;+►`:- Agriculture, Water&Energy Sustainability Committee County of Hawaii Hawaii County Council COUNTY CLERK 25 Aupuni Street, Suite 1402 • Hilo, Hawai'i 96720 COUNTY OF HAWAI I RECEIVED Time q'•2-1 a.o- By Date tlikt 0 S DATE: March 6, 2017 TO: Valerie T. Poindexter, Council Chair and Members of the Hawai'i County Council FROM: t -Eileen O'Hara, Council Member SUBJECT: Informational materials relating to Communication No. 116 Attached please find informational materials relating to Communication No. 116 on the agenda of the March 7, 2017 EMC meeting. It would be greatly appreciated if the attached information were distributed to all council members. Thank you for your attention to this matter. EO:bl Att. Comm.No. t I(o Ref.To; t'/t✓M L Ref.Date Mc -d . 1)1.O r By TOM CALLIS Hawaii Tribune-Herald published Feb.5, 2017 Kim looks to cancel compost contract Mayor Harry Kim says he is looking to scrap plans for a$10.3 million composting facility, citing concerns about its cost. Kim said he supports the intent of the project, which would divert organic waste from Hawaii County's landfills, but that he saw the contract signed last year as being too expensive and not comprehensive enough. "I'm seriously considering terminating the contract,"he said. "I'm working with them," Kim added, referring to the contractor, "to see how this can be done." He said he was concerned that it relied too much on diverting waste from businesses and wouldn't increase sorting at transfer stations. If the 10-year contract, which went into effect last July, is terminated, Kim said he would plan to issue a new request for proposals that would cover organic waste diversion. "I think I'm one of the biggest fans of composting," he said. Kim said he intends to work with the company, Hawaiian Earth Recycling, to end the agreement while avoiding penalties. Kim said he notified the company Friday and they discussed an"amicable"termination. The contract has provisions for canceling if certain steps aren't met, including the completion of an environmental assessment. One clause says the county would have to reimburse the contractor for development costs. HER was the only company that responded to the previous composting RFP. The contract also includes ongoing mulching operations, and Kim said he wants to avoid any disruptions in service. "This cannot be canceled until we make sure we keep our ducks in order;" he said. "That's not going to be done overnight." The Keaukaha Panaewa Farmers Association objected to construction of the compost facility next to the Hilo landfill, which is near their lots, due to concerns about health, noise and odor impacts. Kim said his issue wasn't the location, but that he would involve nearby residents in discussions if another project is pursued. Maile Lu'uwai, president of the farmers group. said in an email that Kim's decision came as a"great relief." She said a recent trip to similar facilities in Washington state solidified "our position that the facility should not be located in Panaewa." The association had complained that they weren't properly consulted. Hilo Councilwoman Sue Lee Loy said she hopes Panaewa residents will be part of the conversation if another RFP is issued. "They should have been at the table from the beginning,"she said. "We all will get a fresh set of eyes on it." The Hilo landfill could be full in one-three years. County officials are working with a consultant to draft a closure plan. The composting facility would be designed to process food waste, food soiled paper and green waste, according to the project's draft EA. If built, trucks would take rubbish from East Hawaii to the West Hawaii landfill and return with organic waste for composting following closure of the Hilo landfill, county officials had said, Meanwhile, a waste-to-energy plant proposed in Waikoloa recently received a finding of no significant impact from the county Planning Department. BioEnergy Hawaii LLC plans to build a waste separation and anaerobic digestion facility that will produce methane and other gases. Byproducts would include soil amendments and fertilizer. Lu'uwai said the county should look to that as an alternative. "The West Hawaii facility is not located next to a community,"she said. Kim said he did not blame the contractor for issues in the agreement. "This is no reflection on the company and the work they have done with us," he said. Under the contract, the county pays$85.08 or$99.58 per ton for mulch and compost, depending on whether it's produced at the West Hawaii or East Hawaii solid waste facilities. That's up from the previous mulching contract, which had prices of$41.95 and $44.85 per ton. As part of the deal, mulch and compost would be naturally heated to kill invasive species. The contract also includes a minimum annual payment of$2.8 million, which would increase to$4 million once the facility is built. Email Tom Callis at tcallis@hawaiitribune-herald.com. By Tom Hasslinger West Hawaii Today thasslinger@westhawaiitoday.com published Feb. 18,2017 Kim cancels compost contract KAILUA-KONA—Mayor Harry Kim Thursday signed a termination of a composting contract that was deemed disadvantageous to the County of Hawaii. The county informed the contractor, Hawaiian Earth Recycling, LLC that the service agreement for the Organics Diversion Program in East and West Hawaii with the County of Hawaii will be terminated as of June 30, according to a press release Friday issued by the Office of the Mayor. Kim said that he had no issue with the performance of Hawaiian Earth Recycling, and that he believes that composting is an important part of any waste reduction program. He said composting holds a significant role on Hawaii. "The two areas of concern were the financial commitments of the county, and the limited nature of the contract regarding composting," Kim said. Kim said in early February that he was looking to scrap plans for a$10.3 million composting facility, citing concerns about its cost. He said at the time he supports the intent of the project, which would divert organic waste from Hawaii County's landfills, but that he saw the contract signed last year as being too expensive and not comprehensive enough. He also said in early February that he intended to work with Hawaiian Earth Recycling to end the agreement while avoiding penalties. The contract had provisions for canceling if certain steps weren't met, including the completion of an environmental assessment. One clause says the county would have to reimburse the contractor for development costs. HER was the only company that responded to the previous composting RFP. The composting facility would be designed to process food waste, food soiled paper and green waste, according to the project's draft EA. If built, trucks would take rubbish from East Hawaii to the West Hawaii landfill and return with organic waste for composting following closure of the Hilo landfill, county officials had said. Hawaiian Earth Recycling, which couldn't be reached for comment late Friday,will continue current operations until the official termination date of June 30, Friday's release said.All terms and conditions of the current contract will remain in place until the termination date. According to William Kucharski, the Director of Environmental Management(DEM), the mayor instructed DEM to develop a plan to ensure a continued mulching operation with a new contract. "The goal is to have a seamless operational transfer of the very successful mulching operation," Kucharski said. The mayor directed DEM to create a comprehensive waste minimization/waste diversion plan, and to prepare a request for proposals(RFP)to seek an islandwide solution to the county's solid waste disposal issues, Kucharski said. He said that the mayor wants to develop a process leading to a dramatic reduction in waste disposal, with a commensurate increase in overall recycling and material reuse, in compliance with the Integrated Solid Waste Plan requirements. By TOM CALLIS Hawaii Tribune-Herald published Feb. 22, 2017 Kim : No penalties for cancelling compost contract Hawaii County will not pay any penalties for terminating its composting and mulching contract, according to Mayor Harry Kim. The Mayor's Office announced last week the contract with Hawaiian Earth Recycling will end June 30 because of concerns about cost and scope. A request for proposals for a new mulching contract will be drafted. The 10-year agreement went into effect last July and covers the ongoing mulching operations on both sides of Hawaii Island in addition to construction of a $10.3 million compost facility next to the Hilo landfill. Construction had yet to begin and an environmental assessment had not been completed. The approximately 220-page contract allows the county to terminate the agreement at its convenience. While there are no termination penalties, the contract does allow the company to submit a"termination claim"for reimbursement of certain expenses. That includes costs"incurred in preparation and performing the terminated portion of the work ..." Kim said Tuesday the company hadn't provided any indication it would or wouldn't file a claim. Any claim filed is subject to review by the county and mediation. Hawaiian Earth Vice President Mark Cummings didn't return a voice mail on his cellphone Tuesday, Kim reiterated that he didn't have an issue with the company's performance and that he supports composting. But he thought the contract wasn't in the county's interest. The facility was intended to divert food waste from the county's landfills, which the contractor could then sell as compost. Kim said he thought it was too limited in scope and thought it relied too much on food waste primarily from West Hawaii hotels and other businesses. The county would have to pay a minimal annual fee of$4 million once the facility was built. Complicating that is BioEnergy Hawaii LLC's plan to build a waste separation and anaerobic digestion facility at the West Hawaii Concrete Quarry that also would rely on organic waste. Hawaii County Environmental Management Director Bill Kucharski said the county would be competing with many of the same suppliers. "Had we gone through with the contract and had completed the facility. all the food waste we were going to use would be used by another facility," he said. "We'd be paying the same amount and not have any kind of quality compost." The county needs to have another contract in place to continue mulching operations after June 30. Kucharski said the County Council will be asked to issue an RFP, possibly in March. Kim said the request will allow for companies to make offers for mulching operations at either the East and West Hawaii solid waste facilities, or both. He said the county also will pursue a separate RFP to deal with composting and other methods of waste diversion. Kucharski estimates the Hilo landfill has one to three years left before its full. The county is working with a contractor to develop a closure plan. Once the Hilo landfill is closed, additional waste would be trucked to the West Hawaii landfill at Puuanahulu. Kucharski said it could take a couple of years to sort out the long-term diversion plan. This isn't the first time Kim, who was previously mayor from 2000-08, faced the county's solid waste problems. He previously proposed a $125 million waste-to-energy plant, but that plan was killed by the County Council in 2008 when costs came in much higher than expected. Kim said he's leaving his options open. "I hope there are better solutions out there," he said. Email Tom Callis at tcallis@hawaiitribune-herald.com. By TOM CALLIS Hawaii Tribune-Herald published March 5, 2017 Composting company seeks $4M compensation Hawaiian Earth Recycling isn't going to let Hawaii County go scot-free after canceling its 10-year compost agreement. In a letter to county officials Wednesday, Senior Vice President John Brigham said the company would seek more than $4 million to cover expenses it incurred under the contract if Mayor Harry Kim's termination notice isn't rescinded. Kim, who ended the agreement in its first year due to concerns about cost and logistical issues, said the county would not have to pay a penalty to get out early. But the contract does allow the company to seek reimbursement for some of its expenses if the agreement covering mulching operations and construction of a $10.3 million composting facility is terminated. Those costs could be substantial and could include lost profits if the county acted in bad faith, Brigham warned. The contract went into effect last July. "The county's anticipated liability for the latter will result in dramatically higher damages than the county administration anticipates," he said. Expenses the company wants to be reimbursed for include engineering, permitting, bonds, attorney and consultant fees, and new equipment. Construction of the composting facility had not started. Kim said he stands by the decision to cancel the agreement. "I firmly believe the action taken was absolutely the right thing to do for Hawaii County concerning waste management and finances and everything else connected to it," he said, In addition to capital costs, operational expenses would be between $2.9 million and $4.5 million a year, according to the Department of Environmental Management. The County Council will take up the issue this week when it reviews a request for proposals for a new contract covering only mulching of green waste, such as tree trimmings, during the Finance Committee meeting Tuesday. They also will hear from Kim and Hawaiian Earth representatives, who have been asked to attend the Environmental Management Committee meeting the same day. Kim said he will attend. Puna Councilwoman Eileen O'Hara, who chairs the Environmental Management Committee, said she is concerned the county is acting hastily and doesn't see the timeline for a new contract as reasonable. The cancellation notice terminates the contract June 30. The county needs a new contract in place the next day for free mulch to continue to be available for residents. For that to occur, the County Council needs to approve the issuance of a request for proposals, the county needs to select a bidder and then negotiate a contract. "We're asked to assume we have a new contract ready to roll July 1. 2017,"said O'Hara, a former county recycling coordinator. "I think that's highly unrealistic." Even before June 30, the contractor could have to stop mulching green waste at least a month prior so it can work through the supply it already has, said Marvin Min, Hawaiian Earth operations manager. The company handles mulching operations at the Hilo landfill, the West Hawaii landfill and the Kealakehe Recycling &Transfer Station, "We're trying to work with the county," Min said. "The contract took three years to build." Kim said the new contract would be less complicated since it won't include construction of a composting facility. "The goal is to have a seamless transition from this contract to the next one." he said. Bill Kucharski, county Environmental Management director, said the county could store green waste if a mulching service was temporarily not available. "Our plans are to do everything we can to continue accepting green waste and not have a break in service," he said. Kucharski said the county could allow the contractor to continue mulching up until the last day. O'Hara said storing green waste could put the county in violation of its permit with the state Department of Health. She said the county can only store so much. O'Hara said she also is concerned the county is souring its relationship with one of the few companies that does this kind of work in the state. It was the only company to bid on the last contract. "We have a company doing a really good job on mulching," she said. "Why would we rush this and basically send them away'?" Kim, who reiterated he doesn't have a problem with the company's performance, said he doesn't think the county is sending a bad message to the business community. "That's not a factor," he said. The composting facility would have diverted food waste, mainly from hotels and restaurants, that currently goes into the landfills. Kim issued a termination notice Feb. 16. He said he supports more composting but didn't like that the county would be responsible for supplying a minimum amount of organic waste for the facility. Planned placement of the composting facility next to the Hilo landfill was opposed by the Keaukaha-Panaewa Farmers Association due to its proximity to farm lots. Kim said he didn't cancel the contract because of that issue. O'Hara said she also was concerned that the county would not be able to provide enough food waste to satisfy the composting agreement. "It's pretty apparent to me that the county was not prepared to deliver on their requirement in this contract," she said. But the councilwoman said such requirements could have been delayed. "I don't think that the citizens are going to be well-served by this cancellation versus modification to the contract,"she said. Kim said the county's attorneys advised him that he couldn't substantially change the contract without going through another request for proposals. EJ Noeau, a Panaewa resident, said he depends on the free mulch to support his farm,which has little natural soil. While loading mulch in his flatbed Thursday, he said he heard the contract was canceled and was concerned about losing the service. "If you use this mulch anything can grow," Noeau said. "This is magic." Email Tom Callis at tcallis@hawaiitribune-herald.com.