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HomeMy WebLinkAboutREP FC 070 2017/12/04 (2016-2018)DATE: December 4, 2017 PLACE: Council Chambers Hilo, Hawaii TIME: 10:04 a.m. Council Chair and Members Hawaii County Council Hilo, Hawaii 96720 REPORT OF THE COMMITTEE ON FINANCE Re: Comm. No. 606/Bill No. 82 Your Committee on Finance, to which was referred Bill No. 82, reports as follows: Bill No. 82, transmitted by Finance Director Deanna Sako, via Communication No. 606 dated November 15, 2017, amends Chapter 20, Article 4, of the Hawaii County Code 1983 (2016 Edition, as amended), relating to solid waste fees. This bill increases disposal fees from the current $85 per ton to $101 per ton, to be further increased by $3 per ton on July 1st of each year, from July 1, 2018, through July 1, 2022. Also increases fees to be applied when the scale cannot be used due to outages, for special handling and all types of vehicles. Before proceeding with a request by Councilmember O'Hara to amend Bill 82, William Kucharski, Director of Environmental Management, stated that the department is required to present a status quo budget every year. He explained that operational costs are about $11 million, recycling around $7 million, equipment expense $4 million. Waste Management at Pu`uanahulu, about $6.7 million a year, and that approximately $20 million per year is drawn from the general fund for expenditures that total approximately $29 million. Director Kucharski noted that going to Pu`uanahulu would be cheaper than building a new landfill on the east side. Mr. Kucharski also commented that before the suggested increase noted in Bill 82 and in order to meet their stand-alone budget, if disposal fees were not adjusted for the Solid Waste Division, it would likely result in removing the entire recycling program in order to meet operational costs. The increase in fees is critical in order to maintain operations. He also noted that the last fee increase was in 2007 and the department has taken cuts in the budget every year. There are 82 thousand tons of municipal solid waste that comes from transfer stations and 100 percent of that is paid for by the County. He noted there is about $7 to $8 million dollars in fees that the County does not collect, by its own decision, and about 42 percent of what is disposed of is covered entirely by the County (tipping fee, transport, and collection being covered by Environmental Management's (EM) operational budget). Mr. Kucharski also noted that Bill 82 addresses overdue and late charges by changing the current 90 -day window when fees deemed overdue and late to a 30 -day window to pay and decreases the interest rate from 18 percent to 12 percent. The commercial haulers would bear the majority of the proposed increase and majority of the funds will pay the contract associated with Pu`uanahulu due to the increase of tonnage that will be transported to Pu`uanahulu, which will increase costs of hauling from East to West Hawai `i, and will require EM to also perform some site and program improvements. EM is required to address polystyrene foam and therefore need someone to bring together an educational plan by January 2019 as well as an enhanced litter program. FC Report No. 70 FC -70 Page 2 December 4, 2017 Gregory Goodale, Solid Waste Division Chief, stated their goal is to provide site and program improvements. There are three projects that Solid Waste has been working on: (1) green waste collection area at the Hawi transfer station; (2) expanding the Glenwood transfer station; and (3) improvements to the Kea`au transfer station to reinstall the leaking water lines. Council Member Eileen O'Hara inquired about the cost per ton for mixed recycling as well as the possibility of increasing the hours at the transfer stations. Mr. Kucharski responded that it costs approximately $170 per ton to process mixed recyclables and as far as increasing hours, he cannot guaranty they can do that but will do what they can to address it. Ms. O'Hara commented that not opening the transfer stations in the rural area is causing more litter. Council Chair Valerie Poindexter stated she would like to see a pilot program where the community takes ownership, as with the parks, believes that working with the community, they can be stewards of the transfer station. Council Member Karen Eoff suggested that EM and Solid Waste bring companies together to inform thein of the rate increase so they could infonn their customers. Mr. Kucharski stated they intend to go out and explain. Ms. Eoff asked what the fee would be per month for people having their waste picked up. Mr. Kucharski stated the fee increase adds up to about 27 percent increase. For those haulers with small residential pickups, it increases by that amount as well. Council Member Susan Lee Loy asked if the County pays additional fees to the Department of Health (DOH) or Environmental Protection Agency (EPA) related to managing a landfill. Mr. Goodale stated they currently pay the DOH $0.35 per ton which goes to the DOH to fund its program. Committee Chair Maile David asked of the Director with respect to the tipping fees, what the impact would be on his department and on our communities if tipping fees were not increased and remained status quo. Mr. Kucharski stated they have a stand-alone budget; so with their current income and if they had to prioritize, the department would have to reduce or remove the recycling program since it is not a health and safety issue. Ms. David stated the code requires that prior to taking Council action that this bill be reviewed by the Environmental Management Commission and recommendations be made by the commission and also the director. Mr. Olsen testified that at a commission meeting it was unanimously supported. Ms. Eoff said that a communication from the vice chair was received stating that it was reviewed and approved at their last meeting. Mr. Kucharski also submitted his written communication in support. Director Kucharski noted there is no commission meeting scheduled for December and, given the 45 -day response requirement, the commission was provided a copy of the written bill to review and ultimately its unanimous support. By request of Ms. David, Mr. Kucharski will provide that portion of the commission meeting minutes in which Bill 82 was discussed, reviewed, and approved. It will be provided at the next County Council meeting on December 20, 2017. FC Report No. 70 FC -70 Page 3 December 4, 2017 Ms. David stated that this Council has been the recipient of addressing increases that should have been addressed ten or fifteen years ago and preferably done in incremental stages; however given there is no explanation why it was or was not done, increase in fees is one of the biggest issues the Council is having to address. Your Committee on Finance is in accord with the purpose and intent of Bill No. 82, as amended to Draft 2, and recommends its passage on first reading. dmrn Respectfully submitted, COMMITTEE ON FINANCE oL-ao MAILE DAVI , CHAIR FC REPORT NO.: 70 ADOPTED: DEC 2 0 2017 AYES NOES ABS EX CHUNG X DAVID X EOFF X KANUHA X LEE LOY X W HARA X POINDEXTER X RICHARDS X RUGGLES X Respectfully submitted, COMMITTEE ON FINANCE oL-ao MAILE DAVI , CHAIR FC REPORT NO.: 70 ADOPTED: DEC 2 0 2017