In November 2022, heeding Mayor Todd Gloria and Councilmembers Joe LaCava and Sean Elo-Rivera, San Diego voters narrowly approved Measure B permitting the city to charge residents a fee for trash collection. Voters were misled in the voter pamphlet by city projections of the fee amount. Councilman Raul Campillo, who opposed the fee amount later imposed on residents, called the city’s action a “bait and switch.”
In fact, the city projected a fee amount similar to surrounding cities during the election (“the bait”), but then charged a much greater amount after the election (“the switch”). A private business that treated customers like San Diego treated its residents would have faced the San Diego City Attorney’s Office Consumer Protection Unit.
In addition to losing trust and credibility, the city now faces a lawsuit claiming the fee is illegal under state law because the amount charged exceeds the city’s actual cost in providing the service. If successful, the fee would likely be thrown out and residents reimbursed.
The lawsuit was filed by former City Attorney Mike Aguirre and former Chief Deputy City Attorney Maria Severson on behalf of a group of residents. Severson alleges the city illegally padded its fee calculations with improper projected costs in order to drive up the trash fee imposed on residents.
The city filed a motion to dismiss the lawsuit, claiming it lacks merit, and submitted evidence showing how the fee was calculated. On April 10, however, Judge Euketa Oliver denied the city’s motion and gave some credence to Severson’s allegations, at least for the purpose of the motion.
Judge Oliver pointed out that the city’s fee projection during the Measure B election campaign assumed there would be 285,000 homes receiving trash service, but the number served was reduced to 222,485 when the fee was imposed by the City Council, a reduction of nearly 60,000 homes.
“Despite this decline in demand and correlating reduction in waste tonnage,” the judge wrote, “the city’s projections show increasing — not decreasing — costs.”
“In ordinary economic terms,” the judge further explained, “a reduction in output (here, waste collection services) would be expected to reduce at least variable costs.”
Instead, the city increased its overall projected costs for delivering trash service in the city, resulting in fees to individual residents that were nearly double the low end of the estimate provided voters in 2022.
After reviewing the city’s evidence as to how the fee was calculated, the judge concluded: “The apparent inconsistency between declining service demand and increasing costs, coupled with unsupported assumptions and, at this point, unexplained deficiencies in the city’s analysis, creates triable issues of material fact as to whether the fee exceeds the ‘actual cost’ of providing the service [in violation of state law].”
Trial before Judge Oliver is scheduled to begin on May 8 when the city will have a second chance to present evidence.
Regardless of Judge Oliver’s final decision, it is concerning that the city was unable to clearly justify its fee calculations in support of its motion.
While city lawyers scramble to find new evidence for trial, the city needs to take steps to avoid something like this happening again and earn back some credibility it lost in the process.
Earlier this year, Councilman Campillo proposed a series of reform measures to do that. Among those measures was a proposal requiring any ballot measure establishing a fee to undergo a thorough analysis and calculation as to the fee amount before it is presented to voters. In that way, voters would have confidence in the fee amount before voting.
However, the City Council’s rules committee killed the proposal in February.
“This item on the surface appears reasonable, but in practice it creates additional hurdles — and more hurdles are not what our government needs,” Councilwoman Vivian Moreno said in opposing the measure.
“This policy limits the council’s ability to govern. It restricts our legislative authority, and that is not something I’m willing to support.”
Councilman Campillo responded: “Shouldn’t we be extremely thorough, to know how policies are going to impact people? I don’t think speed is more important than diligence.”
San Diego has a significant budget problem and needs support from the community in addressing it. Questionable fee calculations, bait and switch practices and rejecting measures to improve transparency are not ways to earn that support.
Goldsmith is an award-winning Union-Tribune contributing columnist and former Superior Court judge, San Diego city attorney, Poway mayor and state legislator.