Environmental Services pitches $1.32 billion FY26 budget as landfill siting, sewer fee increase draw council scrutiny

Roger Babcock, director designate of the Department of Environmental Services, told the Honolulu City Council Committee on Budget that the department’s FY26 request totals about $1.32 billion, including $537.9 million in operations, $249.5 million in debt service and $533.7 million for capital projects. He said the dollar figures reflect debt refinancing savings and an administrative decision to move engineering salaries from capital into operations.

The budget hearing focused on two high-profile, interlocking issues: identifying a site for a new municipal landfill and financing long-term wastewater projects. Babcock said the administration met the first statutory deadline to identify potential landfill sites and noted that a second deadline — to close Waimānalo Gulch Landfill to incoming waste by 2028 — is unlikely to be met given the lead time to open a new facility.

Why it matters: The landfill timeline, decisions about candidate sites and potential state-level changes to Act 73 that affect buffer zones will influence whether the city needs the $77 million placeholder included in FY26 for land acquisition and how soon a new disposal facility could be operational. Separately, the sewer capital plan and a proposed multi-year sewer-rate package would affect household bills and the schedule for major treatment-plant upgrades tied to federal and state regulatory requirements.

Babcock said the landfill acquisition line — about $77 million in the proposed budget — is a placeholder and would lapse if a subsequent law or administrative action made the proposed site unavailable. He told council members the city’s current permitted landfill footprint still has usable capacity, but that available space changes over time and the department is updating its volume estimates. He also said prior landfill construction offers an order-of-magnitude cost reference: the existing Waimānalo Gulch facility was built in two phases — roughly $36 million in 1989 and about $86 million in a later phase — and that a new 100-acre landfill of the type the city is considering would likely be a substantial multimillion-dollar investment once land and configuration are accounted for.

On solid waste diversion and H-POWER byproduct reuse, Babcock described an ash-recycling project that would process bottom ash from the island’s waste-to-energy plant into a coarse aggregate or sand substitute that could be blended into asphalt or concrete. He said ReWorld, the H-POWER operator’s contractor, operates a similar processing plant in Pennsylvania and that Department of Health review and permitting are underway; any permit would carry conditions addressing public and environmental safety. Babcock said the project could recycle roughly 60 percent of H-POWER ash streams into a usable product and reduce imported sand demand.

Sewer funding and consent-decree obligations consumed much of the committee’s time. Babcock outlined a 15-year capital program totaling roughly $10.1 billion that spans treatment-plant upgrades, collection-system work and other regulatory projects. He said the Sand Island secondary-treatment Phase 2 upgrade is one of the largest single projects at about $1.8 billion and that roughly 30 percent of the near-term CIP is driven by regulatory enforcement or orders.

Babcock and council members discussed integrated planning — an approach added to the Clean Water Act in 2019 that lets municipalities group and prioritize stormwater and wastewater work — and whether it could be used to modify existing enforcement agreements. Babcock said the EPA’s integrated-planning ombudsman previously advised the city that integrated planning can be incorporated before a consent decree is finalized, but it generally does not reopen an existing consent decree. He told the committee the administration had not sought, as of the hearing, a formal modification of the 2010 consent decree under integrated planning but said staff could pursue that conversation with EPA.

Council members pressed whether integrated planning or other alternatives could reduce the size or timing of fee increases the department has proposed to pay for the capital program. Babcock said the department relies on a mix of sewer cash, state revolving loans and revenue bonds to fund projects and that some federal and state low-interest loans are available but are not sufficient to pay for the entire CIP. He noted the department receives about $50 million a year in state revolving fund loans on average and that the bulk of the CIP will be debt-funded. Several council members requested that the department and the administration re-engage EPA and explore integrated-planning options that might yield cost efficiencies or modifications to enforcement timelines.

Babcock also reported vacancies, recruitment and staffing: ENV had 1,184 budgeted positions and 322 vacancies at the February snapshot (about a 27 percent vacancy rate), with plans to fill many roles before the end of the fiscal year. He described active recruitment efforts including off‑island outreach, CDL driver training, operator training, and retention incentives for hard-to-fill jobs.

What’s next: Council members asked for follow-up materials, including a multi-year revenue-bond issuance plan, a breakdown of charges funded from solid-waste funds that are routed to other city departments, and more detail on the assumptions behind the sewer-rate study and capital plan. Babcock said the department would provide requested documents and that the city would continue outreach and technical work on landfill siting and regulatory compliance.