It's good to know that people care about their animals as part of the family and want them to have a good send off too. At the same time, I believe it's more important to care about them and spend time and money on them (and with them) before they go. I knew someone who kept asking what to do for the cat's burial and for the cat's remains before finding out what was wrong with the cat and whether it could be saved (for the record, when the cat was brought to the vet and treated, it got better and is now fine).
I know some caregivers will cremate the cats, and I can understand that. After all, everyone wants to honour a deceased loved cat. However it can be a very expensive proposition. If it's at the expense of the other community cats, then I think that it would be best to spend the money on the other cats that are alive in the colony. Those few hundred dollars could do a lot for the other cats who could benefit from the money.