Junk-car pileup averted as city cuts landfill fees

By James Gonser
Advertiser Leeward Bureau

The closing of the state's only auto recycler was averted when the city agreed Thursday to cut the fees paid by recycling companies to use the Waimanalo Gulch landfill.

Under an agreement, Hawai'i Metal Recycling Co. and other recycling businesses would get an 80 percent reduction from the regular $72.25-per-ton "tipping" fees at the city landfill. Recycling companies already get a 50 percent discount off that rate, but with the further reduction would pay just $14.40 per ton.

The new rates should save Hawai'i Metal Recycling about $360,000 a year in tipping fees.

"When Mayor (Jeremy) Harris understood the whole picture, he also understood that the proposal has merit," Jim Banigan, general manager of Hawai'i Metal Recycling, said yesterday.

The company takes in and shreds junked cars, selling the metal for profit, but it must pay to dispose of the nonmetal parts of the car — windows, seats, carpeting — at the city's landfill. Banigan says those fees make up 37 percent of his operating costs, between $500,000 and $600,000 a year. Before an agreement was reached, the company had decided it would stop accepting derelict vehicles that were not already stripped of nonmetal items because it could not afford the tipping fees.

The deal, which will allow the more than 7,000 derelict and abandoned cars left on public streets every year to continue being recycled, was announced yesterday during a Tip Fee Workshop made up of industry and government representatives that deal with waste product issues.

After months of negotiations, the city Department of Environmental Services reached the agreement with Hawai'i Metal Recycling. The City Council regulates tipping fees, so Councilwoman Rene Mansho drafted a bill to put the changes into effect.

The measure will be introduced at the next full council meeting Sept. 11 and is expected to take about three months to go through the approval process. Mansho expects the bill to pass, and Harris has indicated that he will support the measure.

"We strongly support recycling and feel this is the best solution to ensure that the industry can continue to operate during this tough market period," Harris said.

Banigan said Hawai'i Metal Recycling saves the city about $2.1 million a year by separating the metal from other waste products in cars and compacting those materials to take up less space at the landfill. The city also benefits by not having to dispose of the cars on its own.

"It's never been an issue of price," said Banigan. "It is the recognition that it is a value-to-value exchange. But the money does help the bottom line."

The bill also puts a three-year freeze on all tipping fees and gives a retroactive credit to Sept. 1 for recyclers paying the standard tipping fee until the new price reduction is put into effect after the bill becomes law.

The company will continue to pay city and private towing companies between $17 and $20 a ton for old cars and appliances. The metal is sold to countries in Asia for about $70 a ton, where it is melted down and reused in steel mills. A car with a motor weighs about 1 ton on average, and about 25 percent of that is waste materials.

Hawai'i Metal Recycling has reduced about 360,000 old cars into scrap metal in the last 10 years, 25,000 cars last year alone.

Reach James Gonser at jgonser@honoluluadvertiser.com or 988-1383.