While the primary focus of Tuesday night's meeting of the City Council Finance Committee was how to address a $3.7 million deficit in the city's Refuse Fund, the newsworthy discussion focused on the idea of closing the Recycling Center in the Baylands.

City staff had included an option of downsizing the center and limiting its operation to only eight hours a week in a list of budget-saving measures, but Councilman Greg Scharff argued that a better solution might be to close the facility altogether.

With only 6 percent of the city's recyclable items now being taken to the Recycling Center and the rest being collected through the curbside recycling program, Scharff is correct in wondering why the city should continue to operate the center.

Years ago, prior to curbside recycling and, more recently, the implementation of single-stream recycling, the city's Recycling Center was a bustling facility essential to serving our environmentally conscious community.

But today the Recycling Center's primary benefit is as a place to take items that cannot be placed curbside, including used florescent lights, large scrap metal, batteries, oil and other hazardous waste. While there is value in that service and its convenience to residents, it is hard to see how it continues to justify operation of a seven-day-a-week center that contributes to the large financial losses associated with trash pick-up and recycling.

The bigger picture is a more difficult one to get across to city residents.

As the curbside recycling program has become more and more successful at diverting solid waste away from trash, residents are increasingly shifting to the small 16-gallon mini-cans when just a few years ago they more typically used two full-size 32-gallon cans.

This laudable shift has created enormous financial instability for the city's trash operations, since the work required to collect trash and recyclables from homes has only become more complicated and costly while the revenues have declined as the cheaper mini-cans become the norm.

In response, like other communities, the city has raised the prices for trash collection to try to keep revenues stable, and put the greater burden on commercial customers. The higher rates have accelerated a shift to fewer and smaller trash cans, putting more pressure on the city to again increase rates.

Understandably, that has led some residents to complain that they are being punished financially for cutting back on their trash and doing a better job at recycling.

The city staff is proposing another increase of about 13 percent for residential customers for this October, but the Council's Finance Committee balked at the idea Tuesday night and urged a different approach: a flat fee added to everyone's garbage bill that tied together the costs of not only trash collection but of recycling and composting services.

Adding to the financial puzzle is that the law now forbids cities from charging some users more than the actual cost of services in order to subsidize the costs charged to others. In Palo Alto, commercial rates have been much higher than comparable residential rates compared to the costs of pick-up, and that disparity must be corrected. The staff estimates that residential rates would eventually need to be increased by 79 percent while commercial rates would decline by 42 percent for parity to be reached. A cost-of-service study, due to be completed in November, will determine exactly what shifts must take place.

The real answer is in viewing trash and recycling as intertwined byproducts of our daily lives that need to be picked up and removed from our homes and businesses. We should all be striving to maximize what goes to recycling and minimize what goes to trash because we know it is good for the environment, not because of financial incentives.

We can no longer expect to only pay for trash pick-up while receiving "free" pick-up of our recycling. In reality, it's never been that way, since the cost of recycling has been factored into the overall costs of running the entire refuse operation.

Moving to at least a partial flat fee system that more accurately reflects the high fixed costs of picking up trash and recycling at every home and business and more honestly labels it on our utility bills makes sense.

It also makes sense to look at every way possible to reduce the operating costs, including downsizing or eliminating the Recycling Center and reducing street sweeping, a weekly luxury that can no longer be justified.

Zero waste is a laudable goal, and we're making great progress. But as trash levels continue to be reduced and recycling increases we can't pretend that the cost of collecting and transporting trash and recycling will somehow go anywhere but up.