SCHENECTADY — To save a few cents on their trash bill, nonprofits and city businesses have dramatically reduced the amount of garbage they throw away, Commissioner of General Services Carl Olsen said.

The city collected 3.5 percent less trash last year than it has in years before, a 1,000-ton reduction that saved the city $66,000 in disposal fees.

Recycling is also up, but not enough to account for the reduction in waste. While businesses appear to be recycling about 150 tons more every year now, they have also simply cut their garbage by 850 tons. It’s the first waste reduction in the city in 17 years, Olsen said.

Environmentalists have long encouraged not just recycling but also reducing waste and reusing items to protect the planet. But Olsen said what’s really motivating local businesses is the fact that they now have to pay for every gallon of trash they throw away.

In 2005, the city started charging for its trash collection. Residents are charged a flat fee, but businesses and nonprofits are charged by the gallon, based on the size of containers. Recycling is collected for free, motivating them to stop throwing cans and paper in with the rest of their trash.

“The more you recycle, the less you pay,” Olsen said. “So they pay a little more attention to their waste stream and recycle more.”

They are also recycling more than just the obvious paper and soda cans.

MVP now recycles batteries and encourages employees to bring in their household batteries for recycling as well. Jars have been set up in the lunch rooms to collect batteries.

At Fortitech, which receives stacks of materials in cardboard boxes every day, workers had been trying to find inventive ways to reuse the cardboard.

But they gave in when Fortitech recently built a 35,000-square-foot warehouse that increased their facility by one-third. Managers are starting a recycling program now.

“If you don’t, it starts taking up a lot of space,” communications manager Patrick Morris said. “We’d need another warehouse.”

While recycling will reduce the amount of trash Fortitech must pay to have hauled away, Morris said that wasn’t the primary reason for the change. “It’s part of being socially responsible,” he said.

At Price Chopper, managers are trying to encourage residents to use their plastic bag recycling program, which has been offered for 20 years but still attracts very little participation. The bags are converted into pellets which are used to make new Price Chopper grocery bags, spokeswoman Mona Golub said.

As for reducing use, the company has recently seen a 2 percent reduction in the amount of cardboard used to ship cases of food, she added. That cardboard is recycled as well.

All this recycling isn’t adding up to huge savings for each business that contracts with the city for garbage collection. That’s because for-profit businesses pay just 4.5 cents per gallon of trash. Nonprofits pay 8.5 cents per gallon because they don’t pay taxes to cover the rest of the trash collection costs.

But the tiny reduction in garbage from each business adds up to a big savings for the city, which pays $66 per ton to dispose of the trash. With the 1,000-ton reduction in trash last year, the city saved $66,000, Olsen said.

“That’s significant,” he said. “After we implemented our waste fee, it forced them to take a closer look at their waste stream.”

Looking back to 2005, the garbage fee had an immediate effect on recycling. In the first year of the fee, the city collected 4,700 tons of recyclables, up from 4,360 tons the year before.

Unfortunately, it’s gone down since then. In 2007, the city collected 4,500 tons of recycling. Still, Olsen said it’s clear the garbage fee encouraged more recycling.

But he doesn’t think the same strategy would work for residents, who can currently throw away as much as they want each week.

Private haulers in the suburbs charge by the gallon by issuing large containers to each customer. It would cost $2.5 million to buy enough containers for every residence in the city, Olsen said.

“It’s a huge capital investment,” he said. “Also, if it doesn’t fit in the waste-wheeler you pay extra. People would just throw it over an embankment.”

Workers would also have difficulty lifting the heavy containers — which are lifted by machine in the suburbs, but would be blocked by cars parked on the streets in the city.

“It would be optimal to do it with everyone, but it would be very difficult,” Olsen said.