Council company critics


Queenstown councillors are beating their breasts in expressing views over controversial related-party transactions at council-owned company Lakes Leisure. 

In the wake of this paper’s revelations earlier this month, Cr John Mann is calling for a council-wide overhaul of the procurement policy. 

“I applaud your investigations,” Mann tells Mountain Scene. “Your articles are good ones. It’s an issue I’ve been working on, I intend to pursue it vigorously – it’ll be the first job I’ll be looking at this year.” 

Crs Cath Gilmour and Russell Ma­whinney have similar misgivings about the goings-on at Lakes Leisure, which runs community sports fields and swimming pools. 

Queenstown Job Agency, half-owned by Lakes Leisure director Wayne Evans, was handed $129,474 of temporary-staffing work by LL during the latter’s 2012 financial year. 

LL chairman Peter Faul concedes there were no tenders, contracts, quotes or contestability. 

Gilmour: “It’s strange – you have to be fairly transparent in any kind of government.” 

Mawhinney: “Everything needs to be transparent and if those sorts of things go on, it doesn’t sit well with people – and I can understand that.” 

Evans was appointed to LL’s board half-way through financial year 2012 and his conflict of interest “declared from the outset”, Faul says. 

Evans says he’s deliberately “distanced” himself from the Job Agency and has no participation other than his directorship and half-share. 

He has also strongly denied seeking the LL directorship to feather his private company’s nest. 

Before Evans joined its board, LL was already giving big business to the Job Agency – $112,000 in financial year 2011. 

Mawhinney says the revelations call into question LL’s governance. 

“It’s definitely a governance issue,” he says. “They need to be looking at how their procurement is done.” He supports Mann’s procurement policy push. 

Faul’s already told Mountain Scene LL’s procurement policy is being “reviewed” and given “the quantum of that relationship”, new procedures for Job Centre transactions may be needed – including inviting pitches from 

Gilmour draws a distinction between business granted by LL to the Job Agency before Evans’ board appointment – and afterwards. With Evans on board, procedures for transactions between LL and the Job Agency should have been tightened and contestability introduced, she says. 

“Where the system fell down is that it was not challenged and made more transparent from there on in.” 

Although Mann was aware of Evans’ business interests, all three councillors cannot recall being briefed on the scale of business between LL and the Job Agency before the council was asked to approve Evans’ directorship. 

Officials should have advised councillors better, Gilmour complains – “What concerns me is that we heard through the media what’s wrong, we should have heard it through our channels.” 

Told Mountain Scene dug up the dollar value of 2012 related-party transactions from LL’s annual report, Gilmour responds: “Maybe we aren’t reading [the reports] well enough.”