Major metal recyclers on the island would once again enjoy a substantial discount in disposal fees under a plan making its way through the Honolulu City Council despite objections from Mayor Kirk Caldwell’s administration.

Bill 50 got a preliminary nod from the Council Budget Committee on Wednesday. Council Chairman Ernie Martin said he introduced the measure at the request of Oahu’s metal recyclers.

Major recyclers typically dispose of their recycling residue, the nonrecyclable byproduct left after processing, at either Waimanalo Gulch Sanitary Landfill or the HPOWER waste-to-energy facility.

Ross Tanimoto, deputy environmental services director, said reinstating a discount at 65 percent, as proposed in the bill, would cost the city about $1.5 million annually in revenues.

THE DISCOUNT would be on the so-called “tipping fee,” the amount the city charges recyclers to accept their waste, currently $81 per ton plus $25.25 per cubic yard.

The city began offering a discount — which has ranged from 20 percent to 80 percent over the years — in the early 1990s as an incentive to support the growth of the then-fledgling recycling industry, Tani­moto told the committee.

“When recycling was in its infancy, a discount made absolute sense to kick-start the program and establish some sort of momentum,” he said.

But that discount was discontinued in mid-2013 because the city didn’t feel it was affecting the volume of recycling residue that was being sent to the city by Oahu’s top recyclers.

“Today, we don’t feel that further discounts are necessary to keep the program running,” he said.

What’s more, the bill provides a discount for disposal at both HPOWER and the landfill, Tanimoto said. “It is … our policy to reduce the disposal quantities going into the landfill. This bill may provide an enticement to dispose at the landfill.”

Tanimoto’s written testimony also pointed out that 89 percent of the benefit of reduced disposal fees would be gained by one company — Schnitzer Steel.

Melissa Pavlicek, who testified on behalf of Schnitzer, said the discount would help a great deal since the price of the metal products the company sells is at a six-year low.

“Anything you can do would be fantastic,” Pavlicek said.

Allen Evans, president of Refrigerant Recycling, said he supports the bill.

“By incentivizing the recyclers, it would help tremendously in the effort to keep that material going to those recyclers that can handle it properly,” he said.

EVANS DISMISSED the suggestion that Schnitzer alone would benefit from the discount.

“There are thousands and thousands of us that use that facility to deliver scrap material,” he said.

Martin said he wants the administration to provide financial information showing specifically how big an impact a $1.5 million drop in annual revenues would have on the Environmental Services Department’s operating budget.

Council Budget Chairwoman Ann Kobayashi said, “It’s a balance we have to look at because the department does need funds so we do not have to subsidize them as much. So do we subsidize the department or the businesses? It kind of boils down to that.”