Toronto’s solid waste division posted a whopping $37.2 million surplus last year, thanks in part to an extra $9 million earned from the sale of recyclable material.

Due to strong prices, newsprint, cardboard and other paper brought in $7.4 million more than anticipated. And higher prices for metal and plastic produced an extra $1.6 million.

“There was a high demand for (paper) fibre and for aluminum and for polyethylene in 2011, which resulted in additional revenue,” said solid waste acting general manager Vince Sferrazza.

The solid waste surplus is in addition to the $292 million city-wide surplus last year, which includes savings from other city departments and unexpected higher revenues, particularly an extra $98.7 million from the land transfer tax.

Most of that windfall is expected to go to streetcar purchases.

The solid waste department, on the other hand, gets to keep its surplus by depositing it in the waste management reserve fund, which had a balance of $50.8 million as of Dec. 31, 2011 and will now grow to about $88 million.

Councillor Mike Layton tried but failed to divert $250,000 from the waste reserve to block new garbage collection fees being imposed on charities that have previously had free pickup. Charities, particularly those that accept donations of discarded food or clothing — some of which prove to be unusable — are facing huge increases in costs.

Layton pointed out that some of the organizations re-use clothing and other items that might otherwise be trucked to the city’s dump near London, Ont.

He noted the city also provides community partnership grants to some of the organizations that solid waste wants to charge for garbage pickup.

“I think you’ll find a lot of these organizations serve a good public purpose that we should be supporting. So why are we giving them a grant and then clawing it back through fees for waste?”

Leaving the money with the solid waste division means it will have the money to build new green-bin composting facilities, which can cost more than $75 million, said Councillor Peter Milczyn.

Currently, about 48 per cent of household waste is diverted from landfill. The city’s target is 70 per cent.

“It’s prudent to put that money aside and have it for future capital needs,” Milczyn said. “As our green bin participation increases, we may need to expand our organics processing.”

Some of the reserve money could be used to help fund a new organics processing plant now being built on Disco Rd. in Etobicoke, said spokesperson Pat Barrett. It could also be put toward the operating budget, to keep rates from rising, Milczyn said.

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“They didn’t go up this year; I would assume they won’t have to go up in 2013, and I would also assume probably not in 2014,” he said.

If the fund becomes bloated with cash, he added, it’s always possible for city council to approve lower garbage fees or transfer some of the money to other city priorities..