Nearly two years after the state Health Department fined the Waimanalo Gulch landfill $2.8 million for a variety of environmental violations, the company that operates the site has agreed to spend about half that amount to settle the matter.

Waste Management of Hawai'i agreed to pay a $520,000 penalty and spend more than $1 million on supplemental environmental projects at the city-owned landfill, near Kahe Point on the Leeward Coast.

The settlement comes as the city is seeking to extend the life of the controversial site, which serves as the island's main garbage dump. The landfill's operating permit expires in May, but the city is seeking a two-year extension and is planning a 60-acre expansion that could keep the site open for at least 15 more years.

The Health Department cited the landfill in January 2006 for 18 types of violations, and all but one have been corrected.

"We have always felt the amount of the fines levied by the Department of Health were excessive, but in the interest of the City and County of Honolulu and all the residents we serve, we believe it was best to put this issue behind us," said Waste Management spokesman Russell Nanod.

Most of the violations were resolved before the fine was levied. A violation concerning a faulty leachate pump to remove liquids from beneath garbage piles was corrected when the mechanism was replaced this year.

The single remaining issue concerned levels of incinerator ash that had been piled higher than a grading permit allowed. That issue may be resolved by today.

The supplemental projects will include a community drop-off center at the landfill for residents to deposit their solid waste and recyclables, and other projects to be selected by the Department of Health or designated state agencies.

Mayor Mufi Hannemann thanked Waste Management for assuming all financial responsibility.

"It is critical that everyone is aware that no taxpayer monies will be used to pay for this settlement," Hannemann said.

The city Planning Commission last week heard arguments from opponents of the landfill extension: state Senate President Colleen Hanabusa and the Ko Olina Resort and Marina, located across Farrington Highway from the site. If the panel approves the extension next year, it would still require approval from the state Land Use Commission.

If the request is rejected, Hannemann has indicated he would ask Gov. Linda Lingle to declare a state of emergency to keep the landfill open.

The violations the landfill was cited for included: