MIDDLETOWN — The town is considering charging residents an annual fee for curbside trash pickup, a move that, combined with cash infusions from the town’s coffers, would bail out the program’s estimated $300,000 to $500,000 deficit.

The “pay-as-you-throw” trash program’s $1.5-million operational costs were supposed to be carried entirely by the revenue from trash-bag sales.

But town officials last month warned the program isn’t paying for itself, in part because participation rates are at about 70 percent, lower than first projected, and because residents are recycling more materials and thus, buying fewer trash bags to handle their waste.

At a Town Council workshop this week, interim Town Administrator Shawn J. Brown proposed a potential $25-per-year user fee, as well as the siphoning of about $150,000 in capital-improvement-program money and about $200,000 in money from the general fund, to offset the trash program’s deficit. Brown said the annual fee would be in addition to the cost of trash bags, although those prices — now $2.50 for each 33-gallon bag and $2 for each 15-gallon bag — might be lowered.

The council will again discuss the issue at a budget workshop Monday night at 6 at Town Hall, before the council meeting at 7.

“It would be an additional revenue source and a way of creating internal controls to tell us who’s participating,” Brown said yesterday of the proposed annual fee. “Right now, there’s really no way of telling who has opted in.”

The town decided to move to the automated, curbside-pickup program last November to handle the town’s waste once Middletown’s lease expired on the Navy-owned Burma Road transfer station site.

While the program is functioning well and the town’s recycling rates are up, the program’s fiscal concerns mean residents will likely have to eventually pay more to participate. Brown notes, however, that even with a user fee, the municipal trash program would still cost residents less than hiring a private hauler to cart away their trash.

The Town Council sparred about the issue last month, with Councilmen Robert J. Sylvia and Edward J. Silveira Jr. balking at council president Paul M. Rodrigues’ suggestion that the town always knew the program would lose money.

Sylvia had cast the lone nay vote on the curbside-pickup program, citing his worry that the council-set bag prices wouldn’t generate enough revenue to support the program. Last month, he proposed a trash-bag price increase, to between $3.50 and $3.75 per bag, to solve a shortfall he estimated at upward of $2 million over the next three years, but he eventually backed off the proposal, saying that residents shouldn’t be penalized for “this program’s financial failure.”

The town is also considering whether to add multifamily units and small businesses to the pickup routes to boost revenue.

mwims@projo.com