The emergence of a competitor in the cremation business has persuaded the Tauranga City Council to look at spending $225,000 to build a function room off its Pyes Pa Crematorium chapel.
Legacy Funerals, the dominant force in Tauranga funerals, now has a crematorium at Tauranga Park as part of its shift from Grange Rd up to its site near Pyes Pa Cemetery.
The loss of the council's monopoly on cremations now threatened its bottom line in which the cemetery business must be self-funding and not a drain on ratepayers.
The council responded this week to protect its financial position by backing the 100 sq m addition to the chapel, creating an area where people can gather after funerals for a cup of tea.
Council property services manager Anthony Averill said the function room would be funded from the cemetery activity's $357,000 cash reserves. The council is upgrading the chapel at a cost of $50,000.
Mr Averill said the function room would be large enough to host 80 people, with the ability to move outside.
It would increase the use of the chapel and had the support of Tauranga's five other funeral directors.
Responding to a question from Councillor Murray Guy about contracting out the crematorium, he said the most efficient way was to keep the cemetery activity as a total package because when staff were not doing cremations they were out working in other parts of the cemetery.
The council this week agreed to take the next step - to prepare a draft concept and project budget that will be considered as part of the 2013-14 annual plan debate.