As Honolulu moves forward with controversial plans to expand the Waimanalo Gulch landfill, Mayor Mufi Hannemann plans to seek millions of dollars from a special state fund to help compensate the surrounding community.

The money would come from the 6 cents in deposits and fees that Hawai'i consumers pay when they purchase beverages in recyclable containers.

More than three out of every 10 containers are never returned for the 5-cent deposit, and more than $23 million was left over in the deposit fund when the fiscal year ended in June.

Since many of the unreturned bottles and cans end up as trash in the landfill, a large share of the surplus should be spent to address needs of Wai'anae Coast residents, such as healthcare and solutions to homelessness, Hannemann said.

"I think they have a rightful claim to some of that money," he said.

Whether the state would agree to such a plan is anyone's guess. Hannemann has broached the subject with lawmakers before but been sidetracked.

State law currently allows money from the special fund to be spent only on operating the deposit program and associated education, development and training.

The deposit law took effect in 2005, and state waste management officials caution that less money would be left over if recycling increases in the future, as hoped.

The state collects fees and deposits on more than 900 million beverage containers each year. By the end of fiscal 2006, the special fund held a $17.5 million surplus, state records show.

City officials estimate that containers worth $9 million to $13 million in deposits are dumped in the landfill every year.

And since Honolulu bears the cost of operating the site, the city should receive some of the deposit surplus, Hannemann said. A large chunk of any money received should go to projects identified by the Wai'anae Coast community, he said.

"Obviously, there are needs throughout the island, but we should look to them first and give them first priority," Hannemann said.

The city launched its own compensation program last year and directed $2 million to projects identified by a community panel, such as park upgrades. Another $2.5 million was earmarked for similar projects this year.

Hannemann hopes to enlist Neighbor Island mayors to support his request for state money — and seek proportional shares of the special fund based on their county population sizes — before the Legislature convenes in January.

Senate President Colleen Hanabusa, D-21st (Nanakuli, Makaha), said she's skeptical of Hannemann's plan.

She noted that the landfill generates revenue for the city through "tip fees" paid by garbage haulers who use the facility. The city should therefore take responsibility for financing any community benefits, she said.

"The city makes enough money on the dump," said Hanabusa, who has long pushed to close the site. "If he's trying to argue that this is something that should come to the community, then the dump should pay."

The city should focus on reducing waste and finding alternatives to the landfill, rather than seeking money to facilitate keeping it open longer, she said.

Hanabusa said she was very curious about whether city plans to launch an islandwide residential recycling program would be successful. If not, the state may need to consider expanding its own recycling efforts, and may need money from the special fund to help pay for it, she said.

Reach Johnny Brannon at jbrannon@honoluluadvertiser.com.