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County certifies $5.3 million operating payment for organics diversion; contract includes 40,000-ton annual minimum
Summary
Department of Environmental Management business manager Robin Baumann said the $5.3 million certified for fiscal 2025–26 covers operating costs under a multiyear contract with Hawaii North Recycling; the contract is structured around a 40,000‑ton annual minimum and the county pays the minimum even if throughput is lower.
Robin Baumann, business manager with the Department of Environmental Management, told the Committee on Finance that a supplemental contract certification for fiscal 2025–26 reflects operating costs for a multiyear agreement with Hawaii North Recycling to provide green‑waste and organics services across East and West Hawaii.
"This supplemental contract is just to certify the funds for this fiscal year, fiscal 25–26," Baumann said, explaining the roughly $5.3 million figure is the operating cost for the current year under the multiyear arrangement. She said an earlier portion of the original contract had been intended to construct an organics facility but that portion was suspended; the current funding covers ongoing processing and mulch‑production operations and some loading services at transfer stations.
Council members pressed for a clearer breakdown of the $5.3 million and asked how the county accounts for contract penalties or payments when minimum tonnage targets are not met. Baumann said the contract includes a minimum‑tonnage guarantee (40,000 tons per year) and the county pays based on that minimum; if the county falls short of actual throughput the contractor still receives payment calculated on the minimum, which increases costs to the county. Baumann told the committee the department would provide additional detail on how penalties or shortfalls are calculated and said the remaining term of the contract is approximately 10 years.
Members also asked whether mulch produced on the West side is being moved to East Hawaii to help meet tonnage targets. Baumann said mulch movement between sides occurs “as needed” and that the volumes moved are counted in the contract tonnage calculations. The committee approved closing the file on the report-of-change-orders item after the exchange.
Council requested a follow-up breakdown showing how much the county has paid in minimum‑tonnage payments or penalties in recent years and a clearer timeline for any remaining contract years.
