The first barge of O'ahu garbage should be steaming off to the Mainland for disposal by late September under an agreement reached yesterday between the city and a Washington-based contractor.

The agreement ends a yearlong stalemate between the city and Hawaiian Waste Systems LLC, which will ship 100,000 tons of municipal solid waste a year to the Mainland for $99 a ton. The agreement is for the next three years, or less if the third boiler at the city's waste-to-energy H-Power facility is completed before then.

Hawaiian Waste was the low bidder when the Hannemann administration asked for proposals a year ago. But city finance officials said they could not accept the bid because Hawaiian Waste failed to meet all the conditions of the bidding process.

Hawaiian Waste filed an appeal with the state Department of Commerce and Consumer Affairs. A hearings officer asked the two sides to try to settle the matter before the Aug. 31 deadline for him to decide the issue.

The company has 30 days to begin operations.

Company president Jim Hodge has said his company has spent more than $10 million building a baling and wrapping facility at Campbell Industrial Park and was ready to ship garbage off-island, with or without a city contract.

City Council leaders have criticized the administration's handling of the contract. Yesterday, they pushed out a bill and a resolution clearing the way for Hawaiian Waste to ship waste without a city contract if an agreement had not been reached.

Those actions drew strong opposition from administration officials, who said they were concerned that they could not be able to control the amount of solid waste being diverted from the city's waste stream. The administration pointed out that the city is contractually obligated to provide a minimum amount of waste to fuel H-Power, which burns trash to generate electricity and sells its energy to Hawaiian Electric Co.

Mayor Mufi Hannemann said he's pleased with the agreement since it allows the city to retain flow control and maintain control over a scale installed at the Hawaiian Waste facility.

"I've always said I'm not opposed to shipping, that we just needed to do it the right way," Hannemann said. "Now that the concerns I've had have been addressed, we're ready to roll up our sleeves and make this happen."

If a hearings officer were to have ordered the city to allow the shipping without maintaining flow control, the city would have appealed, the mayor said. He noted that the H-Power expansion costs more than $300 million.

The expansion should be done by 2012, possibly earlier, Hannemann said.

Tim Steinberger, the city's director of environmental services, said the city will pay about $120,900 for the scale.

Hodge, in a joint release with the city, said "we believe that the interim shipping of waste will be an important tool for the city's waste management efforts, and we look forward to working closely with the city to meet its municipal solid waste management goals."

Council Chairman Todd Apo, who represents the West O'ahu region and has been among the council's biggest supporters of shipping O'ahu's trash out of state, said he is generally pleased with the agreement.

Apo said the council voted to keep alive the bill and resolution allowing the shipping because "we need to know that these things are actually going to happen." Nonetheless, he said, "the administration has taken a huge step in getting to that by reaching the settlement."