I know this is a six year old message (!), but you never know, Heather - you might still be reading Rootschat.
I recently had the very same experience. One of my great grandmothers - the only one in the family with a headstone - turned out to be in a public grave. When I queried this, they said 'they must have paid extra'. Different cemeteries have different rules, it seems.
In fact, I now know far more than I ever did about public and private graves. I must say it annoys me intensely when I hear public graves referred to as 'pauper' graves. Of course, many unfortunate paupers are in public graves. But this doesn't mean that everyone in a public grave was a pauper - simply that their families didn't have the necessary capital behind them to stump up for exclusive use and, in many cases, to pay again every twenty five years.
I'm sure many of my hardworking, working class ancestors would be absolutely horrified to hear themselves described in this way! I'm on a soapbox about this today because I'm going to visit said great grandmother. Unfortunately neither her headstone nor her remains are there any more as the land was 'reclaimed' twenty years ago. But I'm hoping to find the sites of several of her children and grandchildren, and place a crafty memorial to her on one of them....