The whole point of bottle deposit laws is to motivate individuals to return the bottles, so the municipality doesn't have to deal with it.
To me it's so much better if some people can take care of this specialized and noble task. I'd hope the municipality would make it more convenient for recyclers to do their work and get more income from it.
All glass (deposit or not) goes into one smashy-smashy pile, so the city loses the deposit value.