The concern was raised yesterday by Cr Richard Thomson, a dog-lover, after it was confirmed the Otago SPCA would cease housing stray dogs caught by the council's animal control team.
Otago SPCA chairwoman Sharon Lont wrote to the council last month to advise the existing dog pound on its property was no longer consistent with the SPCA's nationwide "saving lives" programme.
The programme sought to rehouse - rather than euthanise - as many animals as possible, and the perception was healthy animals were being euthanised at the Dunedin pound, she said.
The issue was raised at this week's community development committee meeting, council development services manager Kevin Thompson saying the council had one year to find a new operator to run a pound or build one of its own.
The council housed 714 stray dogs at the pound last year, of which about 20% were euthanised after seven days if deemed unsuitable for rehousing because of their breed, behaviour or temperament, he told the Otago Daily Times.
Council animal control staff caught and euthanised the dogs, the Otago SPCA being paid $11 a day by the council for each dog housed, to cover sustenance costs, he said. The council was required by law to provide for a pound, but an advertisement last week for a new operator had generated just one expression of interest, he told the meeting.
The council could alternatively build and run its own pound, but a similar move involving the Invercargill City and Southland District Councils was costing about $550,000, he said.
However, Cr Thomson told this week's meeting he was "alarmed" by the prospect of a private operator running the council's pound. That would raise a significant animal welfare issue, as a profit-driven company would have less incentive to spend money trying to rehouse stray dogs, meaning more could be euthanised instead, he believed.
"Then what we will have ... is a seek-and-destroy mission," he said.
"I don't want to be seen to be supportive of that."
Otago SPCA executive officer Phil Soper told the meeting his organisation did not make a profit from the pound, but had been losing essential support from donors upset healthy dogs were still being euthanised at the facility.
The aim was to become a "no kill" facility, and the Otago SPCA had already withdrawn support for the trapping and killing of feral cats in Dunedin, he said.
The Otago SPCA had received an annual council grant to help the council with stray cats and dogs, which since 2006 had been for the removal of feral cats, and last year totalled $14,600.
However, the Otago SPCA earlier this year withdrew support for that work, while at the same time requesting a switch from an annual contestable grant to a three-year civic grant.
The grant would reflect the organisation's wider community work, including work in schools, microchipping and desexing programmes, and the trapping, neutering and release of feral cats instead.
The request prompted a staff report to this week's meeting, which recommended accepting the change.
However, councillors instead requested two further reports covering all issues raised.