City councillors have already responded nervously to the proposed three-bin system, which would see residents rolling out two wheelie bins for recycling and a third for rubbish by October next year.
The scheme would cost $5.2 million annually and add 5.5% to the city's rates, up to 14.2%, in 2010-11.
However, Cr Andrew Noone - chairman of the council's rubbish working party - acknowledged this week the cost could rise higher still, if contractors were unable to make a return by selling the recyclables they collected.
While any new contract was yet to be tendered, under the terms of the council's existing collection contract, recyclables became the property of the contractor tasked with collecting them, he said.
The materials could be on-sold by the company to help offset its costs, allowing companies to tender to the council for collection work at a lower price and reducing the burden on ratepayers, Cr Noone said.
However, the price paid for recycled glass had dropped by more than half, to about $15 per tonne, since hitting a peak of about $40 a tonne early last year, he said.
"It's at an all time low," Cr Noone said.
"There's very little in the margins. That's really unfortunate, because clearly, from a contractor's point of view, for them to be interested in these contracts, it would obviously help."
Last year's rubbish survey - which garnered almost 10,000 responses and showed strong support for wheelie bins - had included indicative costs for various collection service options, as did a report to this week's infrastructure services committee.
Cr Noone said he was unsure when the indicative prices were compiled, and confirmed they could change when it came time to tender a contract for a new collection service.
If a three-bin system won support from councillors and the community, a targeted rate across the service area was forecast to cost each household $190 each year.
However, Cr Noone said councillors supported adding other service options to consultation if possible, including a scaled-back service - for example two bins, rather than three - or a staggered introduction over several years.
Asked yesterday if he thought the three-bin scheme was affordable, Cr Noone said it would depend on the service option selected.
Some form of rates increase was inevitable, as even maintaining the existing service would add 0.6% to rates in 2010-11, he said.
However, he acknowledged a projected 5.5% increase was "a major issue".
"With all the other projected increases in rates, particularly over the next three years . . . there's really not much room for many additional increases," he said.
Councillors at this week's committee meeting asked staff to investigate whether consultation could include more than one option, with a report to be presented to a special meeting of the committee on August 3.
Cr Noone said it appeared councillors were not "totally convinced" by the three-bin proposal, meaning there was still a lot of work to be done.
