The Dunedin City Council is facing tough choices over the future of its crematorium after competition from a new private operator.
A report tabled at last month's community and environment committee meeting said cremations at the council's Andersons Bay facility had dropped off "significantly'' since Hope and Sons Ltd opened its own in Mosgiel last November.
It said a review of the council's operation would be carried out in the 2016-17 financial year to ensure it "remains efficient''.
Hope and Sons managing funeral director Michael Hope said the council was paying for a decision back in 2012 not to sell its facility to Hope and Sons, going against advice from staff and a consultant.
However, Cr Richard Thomson said Mr Hope was mistaken about what happened in the closed-to-the-public meeting.
"Mr Hope wasn't at that meeting and for him to speculate about what councillors may not have determined as their reasons for hanging on to it is perhaps not appropriate,'' Cr Thomson said.
Councillors were told at the meeting the amount being offered for the crematorium meant the council was financially better off keeping it.
This was because the revenue predicted in the period between 2012 and when a private crematorium was expected to open was predicted to be "significantly'' greater than the money the council would have got from selling it.
"It was a commercial decision to hang on to it.''
There was acceptance at the time that revenue would substantially drop once a private operator entered the market and some tough decisions would have to be made.
Mr Hope said it was not a surprise the number of cremations at the council facility had dropped off, given it looked after "probably 70%'' of the funerals in Dunedin.
The situation could become worse for the council if Hope and Sons began offering its crematorium to other funeral directors, which it was probably going to consider.
Given the drop in use, he believed the council could consider decommissioning one of its two cremation units.
But, despite believing the council's operation was at a competitive disadvantage, he believed there was room for two crematoriums in the city.
Council parks operations manager Hamish Black said despite the drop in cremations the council's facility was still running at a surplus.
Asked if the review could include cutting staff numbers or shutting down some of the facility he said: "All options to better utilise resources will be considered in the review''.
