Island Recycling Inc. said it is owed $250,000 by the state for containers redeemed between January and mid-March and will stop accepting bottles and cans at its redemption center in Kalihi tomorrow if it isn't reimbursed before then. Atlas Recycling on the Big Island closed six satellite redemption centers last week after the state fell behind in reimbursing the nickel-per-container refunds.

"We haven't been reimbursed one cent yet," said Jim Nutter, president of Island Recycling.

Stores began collecting 5-cent deposits on each eligible container on Nov. 1. Starting Jan. 1, shoppers were able to take their containers to recycling centers to get back the deposit. The program has been plagued by a low participation rate in part because the low number of recycling centers made returning bottles inconvenient.

If some centers close because of the state's failure to reimburse them for deposits paid, the problem can only get worse.

The state Department of Health, which administers the HI 5 redemption program, hopes to catch up on disbursements as soon as possible, said Larry Lau, state deputy director for environmental health.

The state has the money to repay redemption centers, Lau said. The problem, which affected recycling centers statewide, was in working with other state departments to get authorizations needed to spend money, he said. Health Department officials also failed to notice that the authorizations didn't come in a timely manner, Lau said.

"Everybody got caught up in this problem," Lau said. "We really wanted to avoid something like this. Hopefully it won't happen again."

Atlas Recycling owner Willi Allen said she decided to close six satellite redemption centers on the Big Island for the remainder of April because of the lack of payments from the state. Atlas' locations in Hilo and Kona remain open.

"We couldn't front any more money to the state," Allen said. "They just put me in a spot. We're going to review it at the end of the month and consider reopening them come May 1."

The state has been encouraging recycling companies to open more redemption centers. At the end of March, 56 centers were operating statewide, more than double the number in January.

Through March the state collected an estimated $12.5 million in container deposits, of which just $2.2 million was returned to consumers. Returns in January and February were especially low. March saw an improvement with a fivefold increase in returns.

Without a nearby redemption center, Lilo Schroeter, a retiree in Waikiki, said she has been giving away containers by leaving them in a public place. The nearest redemption centers to Waikiki are in Mo'ili'ili, Kahala and McCully.

"I can't get on The Bus and take them to King Street," she said. "I want the program to succeed and we do need recycling, but if they make it impossible, or so hard, it may not work."

Under the recycling program consumers pay 6 cents for each eligible container purchased. They get back 5 cents from recycling centers when the containers are redeemed and the state keeps 1 cent for administrative costs. The redemption centers receive 5 cents for each container taken in and on O'ahu another 2 cents per container to cover handling costs.

Ideally it should take two to three weeks for redemption centers to receive reimbursements, according to state officials. Island Recycling's Nutter said he's been waiting since February for reimbursement from the state.

"It (the money) doesn't belong to the government," Nutter said of the container deposits. "It was given to the government in trust ... by the people."