CITY TO STUDY TRASH PICKUP PRICING
San Diego will spend $1.1 million to develop rate structure; new charges not expected to begin until 2026
San Diego is preparing to launch a $1.1 million study to determine how much the city should start charging single-family homes for trash pickup, how to subsidize pickup for low-income families and how to reward people for producing less trash.
Preparations for the study come six months after city voters approved Measure B, which amends a 1919 law called the People’s Ordinance that had prohibited the city from charging for trash pickup at single-family homes.
City officials say they expect the study to take more than two years because of its complexity, which will include proposing a rate structure and a billing system and recommending the addition of services such as regular pickups for bulky trash and hazardous waste.
“We’re starting from scratch and there are a lot of variables — there could be a lot of alternatives,” said Councilmember Joe LaCava, who spearheaded the ballot measure along with Council President Sean Elo-Rivera.
Perhaps the largest challenge will be designing a “pay as you throw” program that would mean lower bills for people who produce less trash and higher bills for those who produce the most trash.
Being allowed to start charging for trash service at single-family
homes, which costs San Diego nearly $80 million a year, will be an annual boon to the city budget and allow higher spending on other priorities.
“It’s going to be a fundamental change to the budget,” LaCava said.
The city’s Office of the Independent Budget Analyst said last fall that a rough estimate of monthly bills for single-family homes would fall between $23 and $29 if all the 285,000 households that had been getting no-fee service were charged equally.
But bills will almost certainly be higher because the IBA’s analysis didn’t account for increased service levels, such as a state requirement that San Diego pick up recycling twice as frequently as it does now, or the costs of a new city billing bureaucracy.
City leaders, however, say there is no guarantee they will charge residents the full cost of the service. They’ve also said that monthly charges might be slowly increased up to full cost recovery and that low-income residents will
get subsidies.
“The question is, do we want to go for a number that big?” LaCava said. “We are not required to make any program fully cost-recoverable. But we do have that option.”
The San Diego County Taxpayers Association said it plans to analyze the new study carefully and lobby city officials to lighten the burden of any new charges for a service residents have been getting at no cost beyond their property taxes.
“The city needs to be mindful of people who already face a lot of expenses that have been rising sharply,” said Haney Hong, the association’s chief executive.
The new monthly charges aren’t expected to begin until early 2026 — more than three years after voters gave the city the power to charge for the service.
LaCava said a request for proposals seeking a consultant to complete the study is expected to be released in September. A consultant will likely be chosen at the end of this year or in early 2024 to begin the two-year study, he said.
He blamed the six-month delay on starting preparations for the study partly to city officials not expecting Measure B to succeed.
“To be candid, I think there was a little surprise that the measure passed,” he said. “It was kind of like, ‘Wow, what do we do now?’ ”
Measure B was approved by 50.48 percent of city voters in November and a margin of fewer than 4,000 votes — 203,223 versus 199,384.
The new study, an independent cost-of-service analysis, is required by state law to ensure the city doesn’t charge any more than what it actually costs the city to perform the service.
San Diego routinely does such studies to determine what it charges water and sewer customers, but the trash study will be significantly different because water
and sewer studies rely mostly on meter readings.
The IBA says the trash study will require the consultant to gather a large amount of data about the city’s customers, determine the need for additional services and their cost, and recommend how to create billing and customer service functions.
LaCava said a priority is the possible “pay as you throw” program.
“Do we just charge a flat rate for each property, or do we charge based on the size and the number of bins that you have?” he asked. “We want to encourage people as we move toward our zerowaste goals. Incentivizing them by what you charge them monthly would certainly be a good way.”
But he stressed that such a program must be designed strategically, noting that San Diego is embroiled in ongoing litigation over its tiered billing structure for water customers that lowers per-gallon charges for people who use less.
“You have to be very careful,” LaCava said. “State law doesn’t allow you to favor one customer over another.”
The city couldn’t previously create such a program because it wasn’t allowed to charge at all for trash pickup at single-family homes, making it impossible to create a varied rate structure.
Another focus will be possibly phasing in monthly charges and providing subsidies, LaCava said.
The idea of not charging the full amount the first year so people can get used to paying probably makes sense, he said.
If including subsidies for low-income customers within the rate structure creates the risk of violating state law by shifting the burden to other customers, LaCava said the City Council could create a separate subsidy fund. That way other trash customers wouldn’t shoulder the burden.
Deciding which new services to provide will also be part of the analysis. Measure B already guarantees one
new service: free trash bins for new customers and free replacement bins for all customers.
Likely new services include regular days for bulky trash pickup, which has been offered infrequently and erratically, and hazardous waste pickup, which now requires a special appointment and a trip to the Miramar landfill.
LaCava said city officials have no plans to dramatically increase service now that they can charge residents, but he said the city has probably been avoiding some enhanced services that make sense because it couldn’t charge for them.
“You might find you can provide additional services at a tiny incremental increase in cost,” he said.
The city also must create a billing department, which will require new staff to handle the bills and provide customer service.
The taxpayers association, which opposed Measure B, expressed concern during the campaign that the measure guaranteed city workers would continue handling all aspects of trash service.
“It’s so disappointing we have a monopoly on residential trash,” said Hong, suggesting that allowing the private sector to compete could drive down costs to residents.
Businesses and people living in most apartments and condominiums can choose from eight private haulers the city allows to serve those customers, although some haulers decline to offer service in some neighborhoods.
LaCava said he expects a long and healthy debate among residents, community leaders and city officials after the cost-of-service study is complete.
“I think everyone is going to be very motivated to have a lot of open conversations before there is a decision made,” he said. “We certainly want to get this done right out of the gate.”