HILO — Mayor Harry Kim defended his decision to cancel a 10-year compost agreement before the Hawaii County Council on Tuesday evening.
“I truly thought every single decision I made was right by law and was right for the people of this island,” said Kim, who emphasized what he saw as a “tremendous cost factor” in the contract that took effect last July.
But several council members appeared skeptical of the decision or expressed disappointment that they weren’t consulted prior to the termination notice being sent Feb. 17 to Hawaiian Earth Recycling. The contract includes ongoing mulching services at county solid waste facilities and construction of a $10.3 million composting facility next to the Hilo landfill.
Kona Councilwoman Karen Eoff, who was part of the previous council that authorized the bond for the project, said she was proud that the county was going to be on the cutting edge of waste diversion. The facility would use food scraps to generate compost.
“That was a high point for the previous council,” she said. “… It’s kind of hard to embrace where we are going now.”
For now, the council is taking more time to review the issue before giving the administration the go-ahead to pursue a new contract for mulching of green waste. Those services will end June 30 when the contract is terminated.
A resolution authorizing a request for proposals for a three-year deal was postponed to March 21.
Council members said they wanted time to read a staff analysis of the contract that Kim said he used to make the decision.
“We can’t make a good decision unless we (see the document),” Council Chairwoman Valerie Poindexter said.
Council members also heard from Hawaiian Earth Recycling representatives and employees who highlighted the popularity of their product.
“Down Pahoa side, there’s a lot of rock,” said employee Bob Manuel. “They can take mulch home and plant things. They grow food for their families.”
The company also has warned the county that terminating the deal could be costly.
On March 1, Senior Vice President John Brigham said in a letter to county officials that the company would seek more than $4 million to reimburse expenses it incurred under the contract, including preparing for construction of the composting facility. He alleged the county acted in bad faith, which could allow it to seek more.
County Corporation Counsel Joe Kamelamela in a written response Monday said the county was acting within the contract, which contains a “termination for convenience” clause.
He said the allegation was an “emotional response based solely on conjecture” and that Hawaiian Earth Recycling “would be well-advised to not attempt to unjustly enrich itself through unjustifiable claims and demands for additional payments that are not supported by the contract or the law.”
A claim for reimbursement, which is allowed under the contract, would be reviewed by the county and subject to non-binding mediation prior to litigation, Kamelamela said.
Hawaiian Earth Recycling Executive Director Mark Cummings told the council the company remains interested in amending the contract to address the administration’s concerns.
“We have this agreement. We believe we were in good stead with you,” he said.
Kim reiterated he didn’t have a problem with the company’s performance.
But he said the agreement was a “bad contract except for the contractor.”
“I don’t blame private business,” Kim said. “Private business is there to make money.”
In addition to capital costs, operational expenses would be between $2.9 million and $4.5 million a year, according to the Department of Environmental Management. The contract includes minimum annual payments that would reach $4 million after the composting facility is completed.
Email Tom Callis at tcallis@hawaiitribune-herald.com.