The city of Ashland will pay a consulting firm up to $9,826 to analyze garbage rates in town to see if Recology Ashland Sanitary Service's request for more rate hikes is justified.

The city of Ashland will pay a consulting firm up to $9,826 to analyze garbage rates in town to see if Recology Ashland Sanitary Service's request for more rate hikes is justified.

Ashland City Council members authorized the rate analysis earlier this month.

In 2011, San Francisco Bay Area-headquartered Recology asked for an average 23 percent rate increase. A council majority reluctantly approved an average 11.2 percent increase. Rate increases went into effect in January of this year.

The 11.2 percent rate increase will allow Recology to break even. A 23 percent rate increase would have provided the company a 10 percent profit margin, according to company officials.

Recology, which has a franchise agreement with the city to provide garbage and recycling services in Ashland, will return to ask for another rate increase in 2013.

In the meantime, Washington state-based Bell and Associates Inc. will review Recology's financial records for its franchise in Ashland. The consulting firm will assess Recology's costs to provide services here.

Bell and Associates also will develop what it thinks are reasonable rates for Recology. Rate changes would have to be approved by the City Council.

Bell and Associates Project Manager Chris Bell will work on the analysis for Ashland.

A certified public accountant, he analyzed the operational and financial performance of 52 garbage and recycling collection operations in 2011, according to documents Bell and Associates submitted to the city of Ashland.

Before beginning his consulting career, Bell was the assistant divisional controller for the company Waste Management of Oregon, the documents said.

Recology officials previously said the company is not making enough money, in part, because as residents and businesses recycle more, the company bills less for garbage collection.

The company said it also faces costs in other areas.

Recology had offered deep volume discounts to businesses that produce a lot of trash, but the City Council approved rate changes to rein in those discounts beginning in January.

Recology bought out the locally owned Ashland Sanitary Service Inc. in 2009 and renamed it Recology Ashland Sanitary Service.

Staff reporter Vickie Aldous can be reached at 541-479-8199 or vlaldous@yahoo.com.