UPDATE: On May 17, Tucson City Council approved increases in fees for city trash and recycling collection. The approved proposal will total more than $1 a month for residents' trash bills. 

The Council also decided to increase water bills by an average of 8.4%, or $2.50 a month, bringing the average residential rate from $29.85 a month to $32.35.

Dive Brief:

• Tucson, AZ Environmental Services Department is proposing to add a monthly recycling surcharge of 45 cents to residents' trash bills. This surcharge would generate about $767,100 a year to support processing recyclables and to compensate for lost revenue to fund trash service.

• The city spends more than $200,000 a year to process recyclable materials. Revenue from recycling has dropped from almost $1.9 million five years ago to $405,260 for this fiscal year to date, Environmental Services Director Andy Quigley told The Arizona Daily Star.

• The city is projecting zero revenue from recycling next fiscal year. The extra fee would be dropped if and when revenue rebounds to $750,000 annually, which was the return in FY 2011 through 2014.

Dive Insight:

As of the first of this year, more than 2,000 U.S. municipalities were paying to dispose of their recyclables by some reports, and governments and the industry are looking for ways to absorb the costs.

The city is looking at other options, including a proposed monthly $10 recycling surcharge to commercial recycling customers.

Meanwhile, the recycling industry at large is getting creative to find ways to ride the tide as recycling goes through less-than lucrative times. Options range from exploration into new commodities markets, to private-public partnerships to share the impact of negative revenue, to approaches like Casella's, which is similar to Tucson's proposed surcharge: a recycling fee, which floats as a percentage of customers' bills, based on the markets.

The Tucson City Council is expected to discuss the fee proposals on Tuesday. A final version of the schedule would go back to the council in May for a public hearing before it can be approved.