ASHLAND — Garbage rates will go up by an average of 11.2 percent beginning in January 2012 after the Ashland City Council approved a rate increase on Tuesday night.

Residential, commercial can, debris box, compactor and medical garbage rates will rise by 7.5 percent, while commercial bin customers will see an average 20 percent increase.

Actual commercial bin rate increases will vary from 7.5 percent for businesses that produce a small amount of trash, to a high of a 27.8 percent increase for businesses that create a high volume of garbage.

The average 11.2 percent increase for all customers is far below an average 23.3 percent rate hike that Recology Ashland Sanitary Service had requested of city officials. The Bay Area-headquartered garbage and recycling company has a franchise agreement with the city of Ashland to provide services throughout the city. Rate increases must be approved by the City Council.

Recology had asked for the 23.3 percent rate hike so that it could have a 10 percent profit margin.

The average 11.2 percent rate increase approved by the council will allow the money-losing company to break even. The rate increase will last for a year as city and Recology officials meet to discuss the company's rate structure and services.

Recology officials said they are losing money in part because as residents recycle more, the company bills less than projected for garbage collection.

In 2007 during stronger economic times, Recology could sell recyclables and earn money. By 2009, Recology was paying to get rid of recyclables, according to a report Recology submitted to city officials.

Earlier this year, Recology was once again earning money off recyclables, but the value of the material dipped down to zero as of October, company officials said in the report.

Further eroding its earnings, Recology offers discount programs to residents who produce a small amount of trash, as well as deep discounts to businesses that produce a high volume of trash.

The new rates for 2012 will rein in the discounts for businesses that produce a lot of trash.

City Council members Carol Voisin, Russ Silbiger, David Chapman and Mike Morris approved the garbage rate increases.

Councilman Greg Lemhouse voted against the increases, saying he hadn't seen enough evidence from Recology that the company had worked to reduce costs.

Councilman Dennis Slattery was absent, and Mayor John Stromberg votes only to break ties.

A person with a 32-gallon garbage can for home use pays $16.61 per month for service. The 7.5 percent residential rate increase will boost that bill by almost $1.25 to $17.86.

Rates for commercial garbage bins vary based on size and frequency of garbage pickup. Businesses that use bins will see monthly increases that range from $6.33 to $143.03 in 2012, according to Recology rate documents.

Vickie Aldous is a reporter for the Ashland Daily Tidings. She can be reached at 541-479-8199 or vlaldous@yahoo.com.