Halifax regional council has extended a costly garbage collection contract as the city works to overhaul its current garbage system.

The current garbage system is being changed in a bid to save millions of dollars, but the new plans won't be in place for a while. To cover the gap, the Halifax Regional Municipality has extended its current contract for another year.

"Let's finish our negotiations, discussions on what the strategy should be," said Coun. David Hendsbee.

"Why should the carriers or garbage collectors be held up in the meantime? So let business continue, is still has to be collected at the curb, let's carry on with business."

Staff said when the new agreement is negotiated, the service cost will likely rise.

Hendsbee said he has a few suggestions on how to reduce costs.

"Having a transfer depot station somewhere on the eastern side of the harbour. Right now we have one in Sheet Harbour and Musquodoboit Valley, where the garbage collectors in that area take it to a compacting trailer and bring the trailers in," he said.

"As it stands now, every dump truck on the eastern side of Dartmouth has to go all the way into Otter Lake and come back empty so therefore a lot of deadheading and a lot of greenhouse gases from all that wasted gasoline being burned."

There was good financial news as well. Halifax regional council also agreed to sign a recycling deal with Chester to accept 1,200 tonnes of recycling a year, which will add about $10,000 to city coffers.

Last year, East Hants started sending 1,400 tonnes of recycling material a year to the Halifax plant.