Parking at a meter in San Diego — which doubled in price to $2.50 an hour in February — will soon get even more expensive because city officials plan to start charging credit card transaction fees.
The new policy, which is expected to raise roughly $1 million in annual revenue, was part of a budget compromise last month between the City Council and Mayor Todd Gloria.
The new revenue helped the council and Gloria reverse plans to slash hours at libraries and recreation centers and avoid other unpopular proposed budget cuts.
Instead of covering the fees charged by banks when people use credit cards at parking meters, the city will now force the drivers parking at those meters to begin paying those fees on a per-transaction basis.
The fee is expected to be a surcharge of roughly 3 percent, officials said.
A foursome of council members who proposed the new policy June 10 — Henry Foster, Joe LaCava, Kent Lee and Sean Elo-Rivera — estimated it could generate $1 million during the new fiscal year that began Tuesday.
The mayor praised the proposal but lowered that estimate to $750,000 in a package of line-item vetoes he issued June 17.
Gloria said he chose the lower amount because it would take about three months for the city treasurer to negotiate the change with city vendors handling meters and banking services.
While the council didn’t override that part of the veto package, the four council members who proposed it said they believed their $1 million figure was likely a significant underestimate.
The city paid about $1 million in credit card fees during fiscal year 2025 — but meters cost drivers only $1.25 an hour during seven of that year’s 12 months.
In addition, the City Council recently approved a package of new parking rules that pave the way for charging people to park on Sundays, $10-an-hour meters near Petco Park and more meters in neighborhoods across the city.
City officials also say they’re also close to finalizing plans to start charging for parking at the San Diego Zoo and in the rest of Balboa Park.
And they say they’ve also begun negotiations with the state Coastal Commission over city plans to start charging for parking in Mission Bay Park and inside city beach parking lots.
“One million dollars is a conservative estimate,” the four council members said in a joint budget memo.
They also downplayed the bureaucratic hurdles mentioned by Gloria.
“Charging the cost of credit card transactions to the customer has been already accomplished in several departments, including the Public Utilities Department and in-person transactions for the City Treasurer,” they said in their memo.
The city’s new trash fee won’t be affected by the new policy because it will be collected on property tax bills.
The foursome said the city appears to be on solid legal ground in starting to charge users for credit card transactions, instead of covering those fees itself with its parking meter revenue.
City Attorney Heather Ferbert issued a memorandum of law in May suggesting that such a move doesn’t violate Proposition 26, which helps determine which fees government agencies can pass on to users.
“The City may be able to charge the public for credit card transaction fees on parking meters, as that is part of the City’s cost of administering the parking meter program,” Ferbert’s memo said. “Charging the public for this fee is part of the City recovering its program costs, which is likely valid under Proposition 26.”
Passing credit card fees on to drivers who park at city meters is the latest in a long line of San Diego’s efforts to boost revenue after voters narrowly rejected a one-cent sales tax hike last November.
The city was left with a budget deficit of roughly $300 million, and in response, it raised the cost of hundreds of permits, fees and citations — many of them related to parking.
One such move was raising fines for the violations of a new “daylighting” law — a state law that bans parking within 20 feet of an intersection, in an effort to make streets safer — from $77.50 to $117 on March 1, just two days after enforcement began.
The city had issued 6,133 daylighting citations through the end of May, prompting the city’s independent budget analyst to estimate the fines could help balance the budget during the new fiscal year by generating $850,000.