Hawaii, the island state, contends with a uniquely difficult trash problem: a critical shortage of landfill space within cheap, easy reach.
The HPOWER waste-to-energy plant addresses much of that, but the removal of recyclable containers from the trash stream also makes sense.
A decade ago, the state launched the Hawaii Deposit Beverage Container (DBC) Program — better known as HI-5 — to incentivize the recycling of designated and marked bottles and cans. The state Department of Health, which manages the program, estimates that more than 600 million containers are recycled annually through DBC.
It should be a public-policy priority to maintain a high level of reclamation, which requires a consumer subsidy at the point of purchase. But there are limits to how much subsidy beverage purchasers should pay out, especially given the longstanding call for tighter oversight of the program.
Purchasers of each container pay a nickel charged as the deposit redeemable upon return, in addition to a 1-cent handling fee to help recyclers cover the costs of managing the program.
Recently, the commodity prices for the recyclable materials have fallen, which company officials said makes the economics more difficult. This has been named as a factor in the closure of 21 redemption centers, 18 of them in the last three months and most run by Reynolds Recycling. This leaves 77 centers in operation statewide.
But the solution isn’t as simple as raising the handling fee by a penny, as some have proposed.
Before any such change is contemplated, the Health Department needs a complete review of the program aimed at reducing losses.
Inefficiencies comprise an issue noted repeatedly in audits but still lingering, even after 10 years.
The first real danger sign flashed in 2013. That’s when a state audit showed HI-5 paying out $6.2 million in 2010-12 for nearly 7.5 million pounds of material that could not be accounted for.
That kind of sloppy bookkeeping should not be tolerated, especially in a program operating with thin margins.
And in July, state Auditor Jan Yamane issued a new report about problems in department procurements, with the DBC program raised up as Exhibit A.
Lax oversight was blamed for decisions to overpay for redemption-center audits that were “of little value,” according to the report.
The department renegotiated the audit contract with its sole bidder from $76,400 to $340,000, and then amended it three times over the course of three years. The grand total: $543,374, or 611 percent above the original price.
That’s an appalling result for an initiative geared to ensure fiscal accountability in the first place.
In addition to the lapses in oversight, there have been declining redemptions in more recent years that have added to the budgetary strain.
The rate of redemption dropped to 68.4 percent in the 2015 budgetary year, only a tad higher than the 67.6 percent rate achieved at the outset.
Under the state law, a dip below a 70 percent redemption rate automatically caused the handling fee to tick a half-cent lower, down to the current 1 cent-per-container charge.
Problems were exacerbated when some of the program’s funds were siphoned off to offset the state’s recessionary revenue losses.
The program remains important to the state’s environmental imperatives, bringing in the vast majority of recyclable containers. The city’s “blue bin” curbside recycling efforts account for less than 2 percent of the HI-5 containers turned in, said Janice Okubo, state Health Department spokeswoman.
Only Oahu runs curbside recycling collections, so although consumers might find it tempting to ditch the state’s costly and inefficient program, there’s no capacity in place to replace it.
Okubo said that many centers are located within close proximity of one another, so that the closures could be seen as a “market correction” rather than a failure of the entire system.
The department plans to study rates to evaluate the handling fee and may audit the centers, she added.
Surely it isn’t too much to expect that this audit would be conducted more effectively than it was in 2008.
In addition, the Legislature should revisit other strategies, such as placing redemption sites at convenient retail locations.
On Oahu, at least, rail construction has put some centers out of reach, and alternatives are needed to overcome that barrier.
Lawmakers must above all resist the call to uncritically bump up the handling fee.
Instead, they must comprehensively review what should be a program designed to benefit the environment without excessively burdening the consumers who support it.
