Hamilton funeral homes could carry up to $80,000 of city council debt each month if the council makes them responsible for prepaying burial and cremation costs on behalf of bereaved families.
In May this year, the city council was owed $181,000 in fees for burials and cremations at Hamilton Park Cemetery, $58,500 of which was 90 days or more overdue.
The debt, largely owed by bereaved families and some of which was tied up in legalities over wills and estates, had been decreasing since January when it was $257,000.
But councillors wanted to reduce the debt further by shifting the responsibility for prepaying cemetery costs to funeral directors.
At a workshop yesterday councillors were presented with three options - the status quo under which families pay the council directly, upfront payment by families before the funeral or making funeral directors pay all cemetery charges before the funeral was held.
Seddon Park Funeral Home manager Ferdi Bosch said such a move would be unfair and would have a negative effect on business.
"You can just imagine if you're having 10 or 20 funerals a month what the bill is for the funeral home. I don't think that's going to be very fair."
A plot in the Oak Lawn at Hamilton Park Cemetery at Newstead costs $3533 for adults plus a $600 digging fee. Cremations cost significantly less at $555.
The prices had all increased from July 1.
"So you're looking at $4133 just to be able to buy a plot and bury somebody. So you can just think for yourself what the cost implications on any funeral home will be. You're looking at huge costs."
Mr Bosch said that if the council went ahead with the move Seddon Park Funeral Home would have to consider introducing a deposit system to cover its costs.
A discount for prompt payment would not help, he said.
"It's still a huge amount of money you're going to have to carry, and I don't think any business would like to carry that."
The home would not install its own crematorium to combat the increased debt.
Funerals at Seddon Park Funeral Home cost between $10,000 and $12,000 and include the service fee, burial fee, casket, and disbursements which covered flowers, newspaper notices, church fees or hall hireage, clergy or celebrant fees, service sheets, photo shows, etc.
"It is quite an expensive exercise for families to pay for funerals."
In Tauranga, and at Snapper Rock and Mangere Lawn cemeteries in Auckland, funeral directors are invoiced by the local councils, which give a discount for prompt payment.
Councillor Roger Hennebry said the debate had been going on for two years, but funeral homes should be responsible.
Deputy Mayor Gordon Chesterman called the dual payment system a "little bit of a jungle" but said there needed to be incentive, such as a prompt payment discount, for funeral directors.
A report investigating the cost benefit and any risk in implementing a system where funeral homes pay the cemetery charges upfront is to come back to the council.
Families now pay
* Funeral homes: Service fee, coffin, disbursements.
* Hamilton City Council: Cemetery fees including burials and cremations.
Families could pay
* Funeral homes: Service fee, coffin, disbursements, and all cemetery fees.