San Diego OKs new deals with private trash haulers that are expected to raise rates
The deals, which shrink lucrative bonuses, aim to make haulers that serve businesses, apartments and condos comply with the state’s new organics recycling law.
San Diego reached new agreements this week with the city’s eight private trash haulers that aim to boost recycling by imposing new requirements and shrinking some lucrative bonuses the haulers get.
City Council members, who approved the new agreements unanimously, said the deals would help San Diego meet the waste-reduction goals of its Climate Action Plan.
The private haulers, which handle trash and recycling for businesses and people living in apartments and condominiums, are expected to raise rates to cover new equipment and other changes needed to meet the new requirements.
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Haulers in other cities across the state have raised rates 20 percent to 25 percent to cover the costs of complying with a new state law requiring the recycling of yard waste and uneaten food. But those are mostly in non-competitive situations in which one hauler has a city monopoly. San Diego doesn’t set the rates that private haulers charge their customers, instead allowing prices to be determined by a competitive marketplace in which customers can choose from among eight different haulers.
Trash customers living in single-family homes don’t pay for their trash and recycling services, which are provided by city crews instead of private haulers because of a 1919 city law called the “People’s Ordinance.”
Measure B on this year’s Nov. 8 ballot would allow the city to begin charging single-family homes for trash collection after a consultant determines how much customers should pay.
The estimate in the report by the city’s independent budget analyst doesn’t factor in required service upgrades or free bins
Private haulers handle about 70 percent of trash and recycling produced in San Diego, while city crews handle the rest.
City officials say they were forced to renegotiate the ongoing agreements with the private haulers by the new state law, which many call the biggest change to recycling in nearly 30 years.
Under Senate Bill 1383, haulers must begin providing each customer with three bins: black for trash, blue for recycling and green for organic waste such as food and yard trimmings.
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The private haulers also must educate all customers about the new state requirements, check all their bins regularly for contamination by improperly discarded items and submit records to the city for state review.
Of 21,000 accounts handled by the haulers last year, fewer than 200 paid for yard- or food-waste recycling. This year, that must increase to 100 percent or the customers, the city and the haulers could face state fines and other penalties.
City officials said most of the haulers are failing to meet their contractual requirements to recycle at least 50 percent of what they carry away from the businesses, condos and apartments they serve.
Any fines the state imposes on the city for failing to meet the requirements of the new law will be passed on to private haulers that have played a role in San Diego not meeting the goals, city officials said.
The records submitted by private haulers will be used to determine proportionate blame and the appropriate fines, said Renee Robertson, the city’s director of environmental services.
The state is scheduled to start imposing fines in January. Robertson said city crews are prepared to meet the new requirements at single-family homes, saying an adequate number of new drivers has been hired and that new trucks are expected to arrive soon.
The deals approved Oct. 10 with all eight city haulers are less aggressive than what Robertson proposed last spring.
In particular, city officials had recommended eliminating lucrative bonuses given to the city’s largest haulers — EDCO, Waste Management and Republic Services — for what is called third-party diversion.
The haulers are allowed to boost their official recycling rates by getting third-party “discounts” or credit when a customer voluntarily recycles materials without help from a hauler.
Examples include breweries sending used hops to dairy farms as animal feed, and grocery stores sending unsold products back to distribution centers for recycling instead of giving them to local haulers to recycle.
Supporters say the credits make sense because the removal of the recyclable materials leaves essentially only trash for the haulers to pick up. With most of the recyclable materials removed, the state’s mandated recycling rates become a much higher hurdle for the haulers to meet.
Backlash from the haulers this spring prompted the city to retreat from the elimination proposal and instead propose shrinking the discounts, which have been unlimited.
Under the agreements approved this week, the discounts will be limited to a maximum of 15 percent in 2023 and 2024 and a maximum of 10 percent in 2025 and all future years.
City Councilman Joe LaCava said the city’s retreat is warranted.
“Any time you touch existing agreements, you need to be a little more delicate and thoughtful,” he said.
In addition to EDCO, Waste Management and Republic Services, the city’s haulers are Allan Co., Debris Box, Diamond Solid Waste, Ware Disposal and John Smith Earthworks.