Residents in Conwy, North Wales, are paying up to £40 a month for private bin collections after the council reduced its service to once every four weeks.
The additional expense comes as locals face their third consecutive year of 10 per cent council tax increases, with another rise expected from April.
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Conwy became Britain's third council to implement monthly bin collections in 2018, aiming to save £390,000 annually.
The decision faced opposition from residents and councillors, who reported increased problems with rats, seagulls and flies during the 12-month trial period.
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The council has continued to face financial pressures, with leader Charlie McCoubrey warning of a £19million budget deficit in December.
Local entrepreneurs are filling the gap by advertising private collection services on community noticeboards and social media platforms.
Some operators are offering fortnightly collections for £20 per month, promoting their services through WhatsApp and Facebook.
"Get the big bin empty in between the council collection so you have an empty bin every two weeks," reads one advertisement.
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Craig Spence, who runs a garden waste removal company, has expanded into bin collections after noticing families struggling with monthly collections.
"The main customer base that we have are younger, single parents who don't cope," said Spence, who charges £20 monthly and covers a 20-mile radius.
He warns of unfair competition from illegal operators, stating: "The fly-tipping in this area is horrific."
Matthew Felton, a former Army serviceman, has built a customer base of over 175 people since launching his waste removal business four years ago.
"Most of our residential customers are larger families with three or four children and they can't contain the waste on a monthly cycle," said Felton, who also charges £20 for fortnightly collections.
"Unfortunately, people are still paying their taxpayers' money but having to fork out more to get a bin service as well."
The council defends its approach, with Andrew Wilkinson, head of neighbourhood services, stating: "Weekly recycling and four-weekly black bins has been the system in Conwy for seven years now and we receive very few complaints."
"The vast majority of Conwy residents recycle everything and so have enough space in their bin," he added, highlighting the area's 70 per cent recycling rate.
The situation reflects a broader funding crisis facing councils across Britain, with Deputy Prime Minister Angela Rayner recently approving six local authorities to raise bills above the five per cent cap.
Data from the Taxpayers Alliance indicates one in 10 councils are considering reducing their bin collection services.
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