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The Honolulu Advertiser

Posted on: Saturday, April 23, 2005

Sand Island firm loses city recycling contract

By Karen Blakeman
Advertiser Staff Writer

City officials have fired the contractor for a planned curbside recycling program that was scheduled to begin in June, expressing doubts that Island Recycling Inc. will be able to meet its deadlines and obligations.

Although the contract will have to be reopened for bids, city spokesman Bill Brennan said he thinks the city will be able to do that and still get the curbside recycling program launched by June or July.

"I think we'll be more likely to get it started in time," he said.

James Nutter, president of Island Recycling, said he is disappointed in the city's decision.

"We are confident we could have efficiently and cost-effectively handled the islandwide collection of curbside recyclables," he said.

The termination is among a number in a line of setbacks for Island Recycling, a company that employs about 80 people.

Island Recycling was the site of a massive tire fire on Sand Island last year. In the course of cleanup from that event, the state Department of Transportation, the recycling company's Sand Island landlord, discovered the company was using parcels of land that had not been rented to them.

Citing concerns about compliance with clean water legislation, the state initiated eviction procedures late last year, but granted Island Recycling a six-month extension.

"Then they asked for an extension on top of the extension," said Scott Ishikawa, a spokesman for the DOT. "I don't think they're going to get that."

Although they will be able to continue cleanup past the eviction date, Ishikawa said, the company must vacate the property by May 1.

The company also ran up against the state recently when it demanded to be reimbursed for bottle recycling refunds totaling $250,000 it had handed out to citizens under the state's bottle legislation. The state refused to reimburse the company, saying Island Recycling owed the state $146,000 in back taxes.

Island Recycling this week said it has paid the back taxes and received the remainder of the $250,000 owed by the Health Department for containers collected at its Kalihi site.

Meanwhile, the recycling company was purchasing land in Campbell Industrial Park and trying to process the government paperwork it needed to use the land as a recycling site.

Nutter was informed by the city in a letter dated April 15 that the city's curbside recycling contract, granted last year under the Harris administration, was terminated because of the city's doubts that the company would be able to get its new facility in Campbell Industrial Park running in time to launch the program.

"Although Island Recycling Inc. has applied for a solid waste management permit for a new proposed facility ...," wrote Mary Patricia Waterhouse, city budget director, "it does not appear likely that Island Recycling will be able to obtain the necessary permits from the state Department of Health" in time to move and meet city deadlines.

Nutter said he thought the company could pull it off.

"We've already applied for those permits and we feel confident we would have had them by June," he said. "We could have had all the equipment in place and ready to go on time."

He said he could have coped with the state's eviction by moving to temporary sites while waiting for documentation on the Campbell site.

Waterhouse's letter said the state Department of Health had recently returned Island Recycling's application because the enclosed documentation was incomplete.

Eric Takamura, city director of the Department of Environmental Services, said it is possible that the bids for curbside recycling may come in higher this time. Island Recycling's last bid was half the price of its competitor, he said.

"Recycling is not a free enterprise," Takamura said. "We may have to bite the bullet."

City Councilman Rod Tam, chairman of the public works committee, which oversees recycling, said he thought it was a good idea to terminate the Island Recycling contract.

"No consumer would want to hire a contractor with a lot of liability," he said. "You don't know whether your job will be completed."

Staff writer Robbie Dingeman contributed to this report. Reach Karen Blakeman at 535-2430 or kblakeman@honoluluadvertiser.com.