By Laura Dougherty, Director of Legal Affairs for Howard Jarvis Taxpayers Association – 2022-2023

Is there a new pail in your kitchen? Like many of you already are, or soon will be, I am a new customer of those small green compostable garbage bags. Cities, counties, and community service districts responsible for trash service have been implementing a law known as Senate Bill 1383 from the 2015–2016 legislative session. Its full title was: Short-lived climate pollutants: methane emissions: dairy and livestock: organic waste: landfills.

For me, the City of Sacramento implemented SB 1383 on July 1. Kissing a rabbit’s foot in hopes of good management, I now dutifully put all my food scraps and used paper napkins in the compostable bags and drop those bags in my yard waste bin. If you don’t have a yard waste bin, your local government might be adding another bin to your collection. If none of this sounds familiar, perhaps your area has been exempted or waived, at least for now.

While you may be putting more work into your trash-sorting than ever before, you might also be confused by increasing trash bills. After all, shouldn’t you be paying less since you’re doing more? SB 1383 is likely a major cause.

Through SB 1383, the State mandated that local governments help reduce greenhouse gases by changing residents’ trash removal procedures at home. This generally involves keeping organic material separate from the gray bin waste destined for the landfill. In some jurisdictions, this organic kitchen waste can be commingled with yard waste in the green bin because it will all be composted together. In other jurisdictions, organic kitchen waste must be specially bagged and composted separately. In still other jurisdictions, customers have received or will receive a new bin solely for organic kitchen waste, increasing the cost of trash service to purchase and empty additional bins. In order to cover the cost of creating new collection and composting systems, rates in many jurisdictions are increasing.

Why doesn’t the State pay for the higher costs if the State is the one requiring the transition to expanded composting? Good question. Unfortunately for ratepayers, and conveniently for the State, SB 1383 is not a reimbursable state mandate, so your local government cannot be reimbursed for increased program costs by the Commission on State Mandates. In fact, SB 1383 cites portions of the Constitution and the Government Code declaring that if user fees can recover the new costs imposed by the State, the State does not have to reimburse your city, county or district. Of course, the user is you.

Also, unfortunately, the effects of the new mandate can be disproportional. Waivers and exemptions for up to five years seem to abound, meaning that some ordinary Californians are paying for a greenhouse gas reduction program, and some are not. For example, about three-quarters of Stanislaus County (inland area) is currently exempt. Exemptions and waivers might apply to high elevation areas, low population areas, and certain rural areas. For specifics, visit https://calrecycle.ca.gov/organics/slcp/waivers.

Proposition 218 cannot correct these disproportions because your local government can only control its own costs, and now it may or may not have a new state-mandated cost to factor into your bill. We encourage you to contact your state representatives to discuss. You can look up their names and contact information at findyourrep.legislature.ca.gov.

Now that we’ve had the bad news, here’s some good news for your trash bill. If your trash is collected by a private hauler, the California Supreme Court has perhaps reduced or removed franchise fees from your bill. Thanks to a recent positive decision, cities and counties may not use franchise fees to make a profit from you. And you have every right to contest those fees.

In Zolly v. City of Oakland, decided late this summer, the Supreme Court trashed a scheme by the City of Oakland to collect extra money from its ratepayers. They were seeing purposeless increases of 80–155% on their monthly bills, the last thing any household budget needs right now.

Here’s the backstory. After “negotiating” with companies that responded to its Request for Proposals, the City of Oakland granted exclusive franchises to two waste haulers, one for solid waste pickup and one for recycling. Each agreement included the payment of an annual franchise fee to the City: $25 million from the solid waste hauler and $3 million from the recycler. Naturally, these were passed through to the ratepayer. Plaintiffs Robert Zolly, et al., challenged the franchise fees as disguised taxes that needed voter approval under California Constitution, Article XIII C, as amended by Proposition 26. The superior court ruled against them, but the Court of Appeal and Supreme Court agreed with them.

The City had argued that it could sell a “property interest” in the exclusive opportunity to be a waste hauler as well as charge the haulers for using city streets. (In “friend of the court” briefs, HJTA and others pointed out, among other things, that under the Constitution and in statutes, anyone can use the public streets for free. We don’t charge “franchise fees” to UPS, Amazon, Lyft drivers, or the U.S. Postal Service, right?) The California Supreme Court didn’t buy either of the City’s arguments, with Justice Liu calling it what it was, saying, “It’s collusion, basically.”

The Supreme Court also made sure ratepayers can challenge such fees. The City of Oakland had belatedly argued that the ratepayers were not “directly obligated” to pay the franchise fees and so they shouldn’t be able to sue. Only the haulers could sue, even though they would have no incentive. The Supreme Court said the ratepayers have economic injury, so they can sue. An all-around win for ratepayers! Hopefully, however, all a ratepayer needs to do now is send a copy of the Zolly decision to their city or county if it has a franchise agreement. We are hopeful this decision will reduce bills outside of Oakland.

Remember, your garbage cans are public. We have no information on how they will be checked for compliance with the new mandate, so we encourage taxpayers to keep themselves aware and informed.

HJTA.org is your source for everything Proposition 13 and for information valuable to California taxpayers. For more information or to take action, go to HJTA.org/take-action.

Published by the Howard Jarvis Taxpayers Association (HJTA). Copyright © 2022-2023 by Howard Jarvis Taxpayers Association. All rights reserved.