San Diego took a key step Thursday toward charging single-family homes in the city for trash and recycling after decades of those services being free.
A City Council committee approved paying a consultant $4.5 million to study how much to charge customers, whether to add new services and what discounts customers should get for producing less trash.
But council members raised concerns about plans to handle trash billing in-house, the higher-than-expected price tag for the consultant’s study and plans to adjust trash services based on a series of neighborhood forums.
The proposed deal with the consultant comes 15 months after city voters approved Measure B, which amended a 1919 law called the People’s Ordinance that had prohibited the city from charging for trash pickup at single-family homes.
Measure B is expected to create a roughly $80 million windfall in new annual revenue for the city once nearly 300,000 single-family home customers start paying monthly trash and recycling fees in summer 2026.
But now that the city is allowed to begin charging those customers, it must figure out which services those customers want while making sure it doesn’t violate state law by charging more than it costs to deliver those services.
That complex process is why the contract with the consultant costs so much more than the roughly $1 million council members were expecting, said Renee Robertson, who oversees trash collection as the city’s environmental services director.
“What’s unique about this process is that this is the first time we are evaluating services and setting rates,” Robertson said. “This is a significant change that requires time, thoughtfulness and a continuous focus on customer experience.”
Councilmember Jennifer Campbell criticized plans to gather feedback on trash and recycling services at forums in each of the city’s nine council districts, an effort that’s the centerpiece of a $1.7 million outreach campaign the consultant is planning.
“Very few people come to these meetings,” said Campbell, suggesting it would be more cost-effective to poll residents. “It’s a waste of staff time and money.”
But Randy Wilde, an aide to Mayor Todd Gloria, said a thorough and robust process is necessary to avoid lawsuits accusing the city of violating Proposition 218, which says government agencies can’t charge more for a service than it costs.
“This is brand new territory for the city,” he said. “It’s very likely this will be litigated. There will be a lot of questions about ‘Is the city being as efficient as possible?’ before we levy these new fees,” said Wilde, contending the $4.5 million will be money well-spent.
Councilmember Joe LaCava agreed.
“We’re really looking at the whole spectrum of what we could do,” he said. “You really have to button it down from every direction.”
Issues for the consultant to consider are whether the city should add new services, such as regular pickups for bulky trash and hazardous waste, or shifting recycling pickups from every two weeks to every week.
A potentially larger 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. City officials say such a program will help achieve San Diego’s goal of net-zero waste by 2035.
The city’s independent budget analyst said in fall 2022 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 of inflation since then and because the IBA’s analysis didn’t account for increased service levels and the need to create 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 monthly charges might be slowly raised up to full cost recovery and that low-income residents and seniors may get subsidies.
Councilmember Marni von Wilpert said San Diego should outsource trash billing based on years of complaints about billing problems in the city’s water and sewer divisions.
“It’s been a huge mess, and it’s not going to get better any time soon,” said von Wilpert, noting that the Fire-Rescue Department chose to outsource billing last year when it took over city ambulance service.
The proposed deal with the consultant, which the council’s Environment Committee approved 3-0 Thursday, must be approved by the full council next month.
If approved, the deal calls for consultant HDR Engineering to hold community forums during the second half of this year, create a proposal for a rate structure in early 2025 and present that structure to the council for approval in summer 2025.
Campbell said she wants the city to stop providing free trash pickup to single-family homes as soon as possible.
“There are other things we can’t fund because of it, whereas other cities don’t have this burden on their budget,” she said.
