San Diego is squandering millions and shortening the life of the Miramar Landfill by not charging its contracted private trash haulers high enough fees and not giving them incentives to boost recycling, a new city audit says.
The city is losing at least $4 million a year — possibly as much as $15 million a year — by not raising fees at the rate of inflation and not having the fees reflect the damage private trash trucks do to city streets, the audit says.
The lack of hauler incentives has left San Diego’s recycling rate stagnant at about 67% for a decade, which is putting city climate goals out of reach and could force closure of the landfill earlier than the now-planned 2031, auditors find.
Fifteen private hauling companies handle trash and recycling for San Diego businesses and most apartment and condominium complexes. In-house city crews handle trash and recycling for most single-family homes.
The 59-page audit says recycling rates for city crews are even worse than the private haulers, at 32%. The audit estimates 80% of the waste taken to the landfill by city haulers could be recycled.
The city plans to boost the 32% rate by doubling the frequency of recycling collection to once a week in 2027. That’s one of the new services San Diego plans to offer when it starts charging single-family homes for trash service.
The audit makes eight recommendations — among them a hike in the franchise fees paid by haulers to match inflation and possibly to match the full costs to the city of allowing the haulers to use city streets.
Other recommendations include amending the city’s deals with haulers to incentivize higher recycling rates and to boost ability by making recycling rates a condition of contract renewals.
The audit also recommends establishing a recycling rate goal for city crews, which handle roughly 30% of the trash produced in the city compared to 70% for private haulers.
City officials have agreed to make all the recommended changes. But they say money will be needed for two studies and five new employees, and they estimate they can’t complete the changes until July 2028.
San Diego collected $14 million from haulers during the fiscal year that ended last June — $4 million less than the $18 million the audit says could have been collected that year if city fees had kept pace with inflation since 2010.
The city has only raised fees twice since then, once in 2020 and once in 2023. Those increases amount to 13% total, while inflation over the same time period has been 54%, the audit says.
If city fees had kept up with inflation since 2010 instead of lagging behind, the city would have received about $25 million more from the haulers over that entire period, the audit says.
But the audit says the $14 million per year should probably be closer to $29 million if the city were to comprehensively study the full costs of allowing private companies like the haulers to use public resources like city streets.
That estimate only takes into street damage and oversight of the haulers by city officials. The audit says other costs to the city and its residents include noise, pollution and traffic congestion.
San Diego’s fees — $17 a ton for high-volume haulers and $18 for low-volume haulers — fall on the low end of cities across the state and locally.
San Jose charges $49 a ton, Chula Vista is at $41, Sacramento charges $32, Long Beach is at $30 and Los Angeles charges $30. But Carlsbad charges $17 a ton, Oceanside is at $15 and Anaheim charges no fees at all.
The audit says raising fees on the haulers is unlikely to have much of an impact on rates paid by customers, partly because San Diego uses a non-exclusive model where haulers compete against each other for customers.
“If some haulers choose to on the increased franchise fee cost, those customers could choose from other approved haulers who may not choose to on the cost increase,” the audit says.
But even if most or all of the haulers the costs on to customers, the impact would be relatively small, the audit says.
“If the city set the fee at $25 per ton, in line with increases in the consumer price index since 2010, we estimate the additional cost per household would increase by just $1.74 per month,” the audit says. “If the City conducted a study and set the franchise fee at $30 per ton, potentially more in line with other large California cities, we estimate the additional cost per household would increase by $2.98 per month.”
San Diego considered shifting to an exclusive model with only one hauler in 2018, but the City Council opted to stay with a non-exclusive model partly to ensure continued competitive pricing.
But the audit says recycling rates often rise when a city has one exclusive hauler, because that hauler has a strong incentive not to disappoint the city and lose the contract.
“A key reason other cities have implemented exclusive systems is their potential to improve waste diversion from landfills,” the audit says.
San Diego’s overall 67% recycling rate actually compares favorably to other large California cities and locally.
San Francisco at 81% and Oakland at 74% are far ahead, but Los Angeles and San Jose are both at 61%, Fresno is at 54% and Sacramento is at 48%.
Locally, Oceanside is at 72%, Chula Vista is at 65%, Carlsbad is at 60% and Escondido is at 44%.
But San Diego is far below its climate goals, which include reaching a 75% recycling rate by 2020, 82% by 2030 and 100% by 2040.
While San Diego has 15 private haulers under contract, many of them are smaller companies owned by the region’s big three haulers, which control 90% of the city’s hauling contracts.
The audit says Republic Services controls 40%, EDCO controls 27% and Waste Management controls 25%.
