San Diego's Broken Toll Machine:
SANDAG selects TCA for new toll system - by Steve Puterski
Years of Billing Failures, Cover-Ups, and What the Fix Will Actually Cost Drivers
● Bottom Line Up Front (BLUF)
- What happened: SANDAG, the regional planning agency that runs San Diego County's toll roads, implemented a defective back-office billing system (ETAN Technologies) after canceling a prior $28 million contract with Deloitte. The ETAN system routinely overcharged and undercharged drivers, could not reconcile accounts, and agency staff concealed these failures from the board for years.
- Who was harmed: Every driver who used the I-15 Express Lanes or South Bay Expressway (SR-125) — tens of thousands of San Diego commuters — was exposed to incorrect billing, unresolved account errors, and an agency unable to properly enforce or credit tolls.
- What it cost taxpayers: At least $28 million lost in the failed Deloitte/A-to-B contract, plus millions more in the defective ETAN deployment, a $4.2 million whistleblower lawsuit, and an unknown sum in unrecovered tolls from billing failures.
- The proposed fix: A new $15.8 million cooperative agreement with Orange County's Transportation Corridor Agencies (TCA) would migrate SANDAG to a proven, shared back-office platform by spring 2027 — and is projected to reduce per-transaction processing costs from $1.81 to $1.73.
- What drivers should watch: The transition plan does not immediately address uncollected fees or older violations from the ETAN era. Accountability for past overcharges remains unclear. Drivers who believe they were incorrectly billed should document and preserve their records now.
Background: San Diego's Two Toll Facilities
San Diego County operates two major tolled roadways under SANDAG's jurisdiction: the I-15 Express Lanes, a 20-mile managed lane corridor running through the northern inland communities from Escondido to downtown San Diego, and the South Bay Expressway (State Route 125), an 11-mile toll road connecting Otay Ranch to the SR-54 in Spring Valley.
Together, these facilities serve as critical relief valves for one of the most congested highway networks in the western United States. The I-15 corridor alone handles more than 300,000 vehicle trips per day in the general-purpose lanes, with tens of thousands more using the tolled express lanes. SR-125 was initially built as a private toll road, went through bankruptcy in 2010, and was acquired by SANDAG for $341.5 million — a purchase that made the agency responsible for its ongoing operations.1
At the operational heart of any toll facility is the back-office system (BOS) — the software and data infrastructure that reads transponder and license plate data, matches it to customer accounts, calculates the correct fare, bills drivers, processes payments, and enforces violations. When this system works, drivers rarely think about it. When it fails, the consequences are immediate and personal: mystery charges, unpayable violations, accounts that can't be corrected, and a customer service apparatus that has no reliable data to work with.
For SANDAG, the BOS has been broken — in one form or another — for the better part of a decade.
A Chronology of Failure
What the ETAN Failures Actually Did to Drivers
The consequences of a broken back-office system are not abstract. For toll road users, they translated into tangible and often infuriating problems at the account level.
Overcharging and Undercharging
The ETAN system failed to correctly calculate or apply toll charges across a significant number of transactions. Drivers with FasTrak transponders — who expect to be charged the dynamic toll rate displayed on overhead signs at the time of entry — found their accounts debited for incorrect amounts. Others were undercharged, creating a backlog of uncollected revenue that SANDAG will need to address separately.
The I-15 Express Lanes use a variable pricing model — rates fluctuate based on real-time traffic density, ranging from as little as $0.50 per trip in off-peak hours to more than $10 during peak periods. When the system that calculates and records those charges is unreliable, every transaction is suspect.6
Account Reconciliation Failure
Perhaps more damaging than individual billing errors was the BOS's inability to reconcile accounts — meaning the system could not reliably match transactions to the correct customer, verify account balances, or accurately track which drivers owed what. This made it impossible for customer service representatives to correct errors with confidence, because the underlying data was itself untrustworthy.
When drivers called to dispute charges, agents often had no reliable record to reference. When drivers sought refunds for overcharges, the agency lacked a clean data set to process them accurately. The result was a customer service function operating partially blind.
Enforcement Disruption
A functional back-office system is the foundation of toll enforcement. It links license plate images captured by cameras to registered owners via DMV records, generates violation notices, tracks unpaid tolls, and ultimately supports DMV registration holds for chronic non-payers. SANDAG's ETAN system compromised all of these steps.
The violation processing workflow was unreliable. Notices may have been sent to wrong addresses, calculated for incorrect amounts, or not generated at all in some cases. This creates a two-sided inequity: honest drivers who disputed charges couldn't get resolution, while others may have driven toll-free by accident — creating a fairness problem that undermines the basic promise of managed lanes.
The Concealment Problem
What transformed a serious technical failure into a full institutional crisis was the decision by some agency staff to hide the known problems from SANDAG's board. For a period of years, elected and appointed officials who have fiduciary and legal responsibility for the toll system were not informed that the system they were funding was broken.
"It's no secret that we have had our share of challenges as an organization to do a back office ourselves." — SANDAG CEO Mario Orso, addressing the Board of Directors, February 2025
The whistleblower lawsuit filed by former Finance Director Lauren Warrem adds a specific human dimension to this institutional failure. Warrem's complaint, filed in San Diego Superior Court, alleged that she raised financial and operational concerns internally — and was retaliated against for doing so. Her case brought the BOS problems into the public record in a way that internal audits had not.4
⚠ Consumer Alert: What Drivers Should Know Right Now
- If you used the I-15 Express Lanes or SR-125 between 2020 and 2025, your billing records may contain errors. Review your FasTrak account statements and download or print them now — before the system migration overwrites records.
- The new TCA agreement will migrate only "active accounts from the past three years." Older records, unresolved violations, and uncollected fees from the ETAN era will be handled in a separate, future board action — with no firm timeline yet announced.
- If you received a toll violation notice you believe was incorrect, do not assume it will be resolved automatically. Contact SANDAG's customer service center and document the dispute in writing.
- SANDAG remains your toll authority — setting rates, handling customer service, and maintaining your account. TCA is a back-end processor only. Your customer-facing contact point does not change.
The Financial Wreckage: By the Numbers
| Item | Amount | Status |
|---|---|---|
| Deloitte / A to B contract (terminated) | ~$28 million | Total loss — no working system delivered |
| Lauren Warrem whistleblower lawsuit | $4.2 million | Pending / not settled as of reporting date |
| ETAN Technologies deployment costs | Not fully disclosed | Partial; system never fully implemented |
| Lost/unrecovered toll revenue (ETAN era) | Unknown | To be addressed in future board item |
| TCA implementation fee (one-time) | $7.0 million | New contract cost |
| Staff & consultant support (transition) | $6.8 million | New contract cost |
| Contingency buffer | $2.0 million | New contract cost |
| Total new BOS contract (TCA) | $15.8 million | Board-approved, Feb. 2025 |
| TCA annual service fee (starting FY 2027) | $1.2 million/year | Ongoing operational cost |
| Projected per-transaction cost (current) | $1.81 | Under ETAN era |
| Projected per-transaction cost (post-TCA) | $1.73 | Agency projection; subject to actual volumes |
The $15.8 million total will be funded in part by reallocating approximately $21 million originally budgeted for Deloitte-related foundational work — the remnant of the prior failed contract's budget that had not yet been spent. SANDAG's Principal Economist Naomi Young testified to the board that roughly half of the agency's total toll operating costs are fixed and unaffected by the BOS change, limiting the ceiling on savings from the new agreement.5
Who Is TCA, and Why Does It Matter?
The Transportation Corridor Agencies is a joint powers authority in Orange County that operates four toll roads: SR-73 (San Joaquin Hills Toll Road), SR-133 (Eastern Toll Road), SR-241 (Foothill/Eastern Toll Road), and SR-261 (Eastern Toll Road). TCA has operated its own back-office platform for years, and recently extended that system to cover a cooperative agreement with the San Bernardino County Transportation Authority (SBCTA) for that agency's I-10 Express Lanes — making it already an established regional processing hub.7
TCA's platform includes more than 300 "logics" — the discrete business rules and workflows that govern how each toll transaction is interpreted, rated, billed, disputed, and enforced. These rules cover everything from discount program eligibility and carpool verification to DMV holds on vehicles with unpaid violations.
Critically, SANDAG will not need to activate all 300 logics on day one. The planned deployment phases them in over time, starting with core functionality and adding features — such as low-income discount programs, internal management reporting, and DMV holds for serial violators — as the agency determines priorities.
"Their violation process is really efficient. They also have a DMV hold logic in place that we can leverage. When they developed their system, this is all they do." — Alex Estrella, SANDAG Acting Transportation Director, February 2025 Board Meeting
The I-405 Model: What Orange County's Success Can Teach San Diego
At the same February 2025 board meeting, SANDAG invited Kirk Avila, General Manager of the Orange County Transportation Authority's (OCTA) Express Lanes program, to present findings from the recently completed $2 billion I-405 Express Lanes project — a two-lane managed lane addition in each direction through the heart of Orange County, from the 605 freeway in Los Alamitos to the 55 freeway in Costa Mesa.8
The I-405 project, which opened in December 2023, produced measurable results. In the express lanes, northbound travel times dropped by approximately 22 minutes compared to pre-project baselines. Even general-purpose lane travelers — who pay no toll — saw an average 12-minute improvement, despite a 20% increase in total corridor traffic volume. The project was financed through a combination of local "Measure M" sales tax revenues and federal TIFIA loans.
Avila emphasized that community trust was as important an ingredient as engineering. During the I-405 construction phase, OCTA conducted approximately 600 community meetings. He urged SANDAG to adopt a business-like discipline around toll revenue reinvestment — tracking where funds come from, where they go, and ensuring surplus revenues flow back to corridor improvements.
"You have to have policies in place to know if there are funds, where those funds are being generated, where those monies are being expensed, and if there are monies left over, where those monies are going to be invested back into the community." — Kirk Avila, OCTA Express Lanes General Manager
The comparison is instructive. Over 23 years, OCTA reinvested more than $2 billion in excess toll revenue from the SR-91 corridor back into that corridor through bridge improvements, general-purpose lane additions, and other capacity projects. This reinvestment discipline — maintaining public legitimacy through demonstrated benefit — is precisely what SANDAG has lacked during its years of back-office dysfunction.
SANDAG's Larger Ambitions: 700 Miles of Managed Lanes
The stakes of getting the BOS right extend well beyond fixing past billing errors. SANDAG's 2025 Regional Transportation Plan (RTP) proposes the most ambitious managed lane network in California history: approximately 700 miles of tolled express and managed lanes across San Diego County, layered atop existing freeways from Oceanside to the international border.9
This vision — intended to generate toll revenue that finances transit, highway, and active transportation improvements throughout the region — is entirely dependent on an operational back-office system that drivers trust. If SANDAG cannot accurately bill a customer using the existing I-15 Express Lanes, it cannot credibly propose to extend tolling to I-5, I-8, I-805, SR-52, SR-56, SR-67, and dozens of other corridors.
What's Missing From the Fix
The TCA agreement is a meaningful, professionally sound step toward operational stability. But consumers and advocates should note several significant gaps that remain unresolved as of this report's publication date:
No Clear Remediation for Past Overcharges
SANDAG has acknowledged that the ETAN system overcharged some drivers — but has not publicly specified how many accounts were affected, by how much, over what time period, or what the remediation process will be. CEO Orso indicated that uncollected fees and older violations from the ETAN era will be handled in a "future board item," but no timeline, amount, or process has been announced.
Data Migration Covers Only Three Years
The initial transition to TCA will migrate active account data from the past three years only. Drivers with accounts, transactions, or disputes older than three years will not automatically have their histories ported to the new system. This creates a risk that historical billing errors become practically unresolvable once the old system is deprecated.
Staff Accountability Remains Ambiguous
Multiple SANDAG staff members are known to have been aware of the ETAN system's billing failures and did not disclose them to the board for years. As of this report, no public accounting of disciplinary action, reassignment, or other consequence has been provided. The whistleblower lawsuit filed by Lauren Warrem alleges retaliatory termination — a claim that, if sustained, would indicate the culture of concealment extended to active suppression of internal dissent.4
No Independent Audit of Total Harm
Neither SANDAG nor any external oversight body has publicly released a comprehensive accounting of total driver harm — the total dollar amount of billing errors, the number of affected accounts, and the methodology for identifying and correcting them. The California State Auditor's office, which has previously reviewed other transit agencies, has not been called in.
Timeline Risk
The spring 2027 implementation target is optimistic by the standards of government IT deployments. The prior contract with Deloitte — a far larger firm — failed entirely. ETAN's deployment also failed. A 24-month implementation window for a complex data migration from a broken legacy system to a new platform is achievable, but should be monitored closely by the board and the public.
The Regulatory and Oversight Landscape
California toll authorities operate under a framework that divides oversight among several bodies. Caltrans has a role in approving toll facilities on state highway rights-of-way. The California Transportation Commission (CTC) has authority over toll facility financing. Regional agencies like SANDAG are governed by their boards, which are composed of elected local officials — in SANDAG's case, representatives of San Diego County's 18 cities and the county government.
The San Diego County Grand Jury, which has historically reviewed SANDAG's operations on multiple occasions, is an additional oversight mechanism. Grand jury reports on SANDAG's financial management and toll operations have previously raised concerns about governance and transparency that foreshadowed the current crisis.10
The Federal Highway Administration (FHWA) has interest in managed lane operations on the I-15, which involves federal interstate infrastructure. FHWA Value Pricing Program grants have historically supported SANDAG's express lane operations, and federal oversight conditions may apply to aspects of the back-office transition.11
The Bottom Line for Drivers
● Our Assessment
The TCA agreement is the right move — adopting a proven platform rather than attempting a third custom build is sound policy, and the cost structure is defensible. SANDAG's leadership deserves credit for acknowledging failure publicly and selecting a credible partner. But the hard work of accountability is largely undone. Thousands of San Diego drivers were incorrectly billed, an unknown amount of toll revenue was neither collected nor refunded correctly, and the staff who concealed those failures have not been publicly held to account. The 2027 implementation deadline must be treated as a firm commitment — not a target — and the board must compel a comprehensive, public remediation plan for affected accounts before the ETAN system is taken offline. Drivers who have unresolved disputes, unexpected charges, or believe they were incorrectly billed should act now: document everything, contact customer service in writing, and watch the board agendas for the promised future item on past-era violations and overcharges.
Verified Sources & Formal Citations
Sources are identified by category. URLs verified to the extent possible through public records; readers should search current versions if links have changed.
-
SANDAG SR-125 Acquisition. San Diego
Association of Governments. "South Bay Expressway Acquisition." SANDAG
Official Records, 2011. Background on the $341.5 million purchase of
SR-125 from South Bay Expressway LP following bankruptcy proceedings.
https://www.sandag.org/transportation/tolls/south-bay-expressway -
Deloitte / A to B Contract Termination.
Puterski, Steve. "SANDAG selects TCA for new toll system." North County
Pipeline / Substack, February 27, 2025. References the prior $28 million
Deloitte/A to B contract and its termination for non-performance.
https://ncpipeline.substack.com/p/sandag-selects-tca-for-new-toll-system -
ETAN System Failures and Staff Concealment.
SANDAG Board of Directors Meeting, February 27, 2025. Staff presentation
by CEO Mario Orso, Acting Transportation Director Alex Estrella, and
Principal Economist Naomi Young. Board agenda and staff report on file
with SANDAG.
https://www.sandag.org/meetings -
Lauren Warrem Whistleblower Lawsuit. Warrem v.
San Diego Association of Governments, San Diego Superior Court. Case
filed circa 2023. Claims include retaliation against former SANDAG
Finance Director for reporting ETAN billing irregularities and financial
mismanagement. Valued at approximately $4.2 million.
https://www.sdcourt.ca.gov (San Diego Superior Court public case search) -
TCA Cooperative Agreement — Board Approval.
SANDAG Board of Directors. "Item: Back-Office System — TCA Cooperative
Agreement." Board meeting of February 27, 2025. Approved unanimously.
Total contract value $15.8 million; implementation target spring 2027.
https://www.sandag.org/meetings -
I-15 Express Lanes Pricing Structure. SANDAG. "I-15 Express Lanes: How It Works." Variable pricing overview, toll schedule, and FasTrak integration documentation.
https://www.sandag.org/transportation/managed-lanes/i-15-express-lanes -
Transportation Corridor Agencies — System Overview.
TCA. "About the Toll Roads." Orange County transportation authority
operating SR-73, SR-133, SR-241, SR-261 and processing I-10 Express
Lanes for SBCTA.
https://www.thetollroads.com/about -
I-405 Express Lanes — OCTA Project Data. Orange
County Transportation Authority. "I-405 Improvement Project."
Post-opening performance data presented to SANDAG board by Kirk Avila,
OCTA Express Lanes General Manager, February 2025. Project opened
December 2023; $2 billion total cost; 22-minute northbound travel time
savings in express lanes.
https://www.octa.net/405 -
SANDAG 2025 Regional Transportation Plan. San
Diego Association of Governments. "2025 Regional Transportation Plan /
Sustainable Communities Strategy." Includes proposal for approximately
700 miles of managed lanes throughout San Diego County.
https://www.sandag.org/2025-regional-transportation-plan -
San Diego County Grand Jury Reports on SANDAG.
San Diego County Grand Jury. Annual reports addressing SANDAG
governance, financial management, and transportation program oversight.
Various years 2018–2024.
https://www.sdcounty.ca.gov/grandjury -
FHWA Value Pricing Program. Federal Highway
Administration. "Value Pricing Pilot Program." Federal grant program
supporting congestion pricing and managed lane operations, including
I-15 Express Lanes in San Diego.
https://www.fhwa.dot.gov/innovativeprograms/centers/operations/vpp -
SR-125 South Bay Expressway Bankruptcy. In re
South Bay Expressway, L.P., U.S. Bankruptcy Court, Southern District of
California, Case No. 10-04516. Filed March 22, 2010. SANDAG acquired the
facility through the bankruptcy process in 2011.
https://www.pacer.gov (PACER federal court records system) -
OCTA SR-91 Express Lanes Reinvestment History.
Orange County Transportation Authority. "SR-91 Express Lanes Annual
Report." Documents $2+ billion in toll revenue reinvested in the SR-91
corridor over 23 years. Cited by Kirk Avila at SANDAG board meeting,
February 2025.
https://www.octa.net/91expresslanesannualreport -
California Transportation Commission — Toll Facility Oversight.
California Transportation Commission. Toll facility financial
oversight, revenue bond oversight, and interoperability framework for
California toll operators.
https://catc.ca.gov -
FasTrak Interoperability Program. Bay Area Toll
Authority / California tolling agencies. "FasTrak Statewide
Interoperability." Provides the technical framework within which
SANDAG's BOS must operate for transponder compatibility across
California toll facilities.
https://www.bayareafastrak.org/en/home/index.shtml
Research note: This report is based on publicly available court records, SANDAG board meeting materials (February 27, 2025), reporting by North County Pipeline, Orange County Transportation Authority published project data, TCA public information, federal grant program documentation, and background knowledge of California toll operations through the report date. Where specific documents are referenced but not hyperlinked to a stable public URL, researchers are directed to SANDAG's official meeting records portal and San Diego Superior Court's public case search. The authors have made every effort to verify factual claims; readers who identify corrections are encouraged to contact the publication.
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