The Honolulu City Council has approved a subsidy for recycling firms that’s estimated to cost taxpayers $600,000, overriding a veto by Mayor Kirk Caldwell.

Nearly 90 percent of the subsidy will support Schnitzer Steel, a metals recycling company based in Oregon that reported $1.9 billion in revenue last year.

The vote to approve Bill 50 was 7-2. The bill, which will take effect Jan. 1, 2017, establishes a 25 percent discount on tipping fees that recycling companies pay when they bring a certain amount of solid waste to the landfill and the city’s waste-to-energy facility.

Honolulu City Council Chair Ernie Martin.
Honolulu City Council Chair Ernie Martin said the measure will support small local businesses in addition to Oregon-based Schnitzer Steel. Cory Lum/CIvil Beat

Several Council members said they supported the measure because it will help small businesses, not just Schnitzer Steel. In response, Caldwell announced a compromise proposal Tuesday that he said would help local recycling businesses.

Caldwell’s alternative would have applied the discounted disposal rate to only the first 1,250 tons of residue that’s delivered to the city’s waste-to-energy facility.

Paul Perry, who owns Leeward Auto Recycling, testified Wednesday in support of the veto override, noting that his business relies upon Schnitzer Steel for machinery to shred cars and separate waste from recyclable material.

“The only way you can help me is to help all of us,” Perry said.

Council members Wednesday criticized Caldwell’s decision to call a Tuesday press conference to announce the proposal and then share his bill with the Council just minutes before Wednesday’s meeting.

Council Chairman Ernie Martin and Councilman Joey Manahan both said Caldwell’s actions were insincere and disrespectful to the Council.

Councilman Ozawa agreed, and said the mayor held the press conference “for his own political ambition,” sparking applause in the Council chambers.

Martin has received $2,000 from 2011 to 2015 in campaign donations from Schnitzer Steel and its representatives. Caldwell received $250 in 2009 from Melissa Pavlicek, the company’s lobbyist.

Councilman Ron Menor said he had concerns about the override, but voted in favor of it. Councilman Brandon Elefante and Councilwoman Kymberly Pine voted against it.

Jesse Broder Van Dyke, the mayor’s spokesman, issued a statement after the override defending the mayor’s decision to call a press conference Tuesday, noting “it is our responsibility to inform the public when their money is being misspent.”

He said the mayor’s office called and emailed Council staff to inform them of the press conference but no one came. He contended that the fact there has been no subsidy for the recycling firms since 2013 “demonstrates that the subsidy is an unnecessary corporate giveaway.”

“The mayor’s request to compromise was sincere and it is unfortunate that it was ignored, especially for Honolulu taxpayers who will be forced to give away over half a million dollars to profitable Schnitzer Steel every year in perpetuity,” Broder Van Dyke wrote. “It is obvious that the subsidy is unnecessary and will simply add to the company’s profitability. It is not good policy.”

About the Author