Auditor General: 'Up to QLDC to manage any actual or perceived Lisa Guy conflicts of interest'

The Office of the Auditor General has replied to Crux questions as to whether Councillor Lisa Guy was in breach of any rules of guidelines by voting on the same issue (three waters reform/CCO) as her family company (Rationale Ltd) provided paid advice to the council.

In the full council statement to Crux (further below) the QLDC says: “Rationale does not benefit from a decision to create a Water Services CCO and therefore there is no pecuniary interest to be declared by Councillor Guy in this decision.”

It seems clear that this QLDC position does not include any future or unknown connection between Lisa Guy/Rationale and the soon to be formed $1 billion external QLDC water CCO.

Here’s the Auditor-General’s full statement:

“Our Office has statutory functions under the Local Authorities (Members’ Interests) Act 1968 (LAMIA) in relation to elected members’ financial interests. We also support transparency and good governance by providing guidance on managing financial and non-financial conflicts of interest.

In this case, in November 2023 we gave approval under section 3 of the LAMIA for Cr Guy to be interested in the contract between the Queenstown Lakes District Council and Rationale Limited for professional services relating to the three waters reform.

The approval letter included a standard reminder that the rule in section 6 of the LAMIA continued to apply. Section 6 of the LAMIA provides that members cannot participate in matters before their local authority in which they have a financial interest, other than an interest in common with the public.

Our interpretation is that a financial interest is “a reasonable expectation of financial loss or gain” from the particular decision.

From the information you have provided to us, it does not appear that Cr Guy or Rationale Limited had a reasonable expectation of financial loss or gain from the Council’s decision about its future water services delivery model. If you have any further information or evidence about how and why Cr Guy or Rationale does have a financial interest in this decision, then please provide this.

Our Office does not have a statutory role in relation to non-financial conflicts of interest. In accordance with our good practice guidance, we would expect the council to consider whether there are any actual or perceived conflicts of interest, identify these, and ensure that they are properly managed.

Finally, we cannot rule on whether a council decision or vote is valid. Responsibility for its own decision-making processes remains with the council.

For more information, please see our good practice guides Local Authorities (Members’ Interests) Act 1968: A guide for members of local authorities on managing financial conflicts of interest and Managing conflicts of interest: a guide for the public sector.”

Source: Office of the Auditor General, September 30, 2025.

Crux also asked the QLDC for their response to our coverage and if the CCO vote would be declared invalid.

“The QLDC finance team has confirmed the following two (Rationale Ltd/Lisa Guy) projects (including the three waters work) in the last two years:

• Visitor Levy Model Update - $8,751.50 (incl. GST) – September/October 2024.

• QLDC 3 Waters Future - $29,999.98 (incl. GST) – November-December 2023/January 2024.

“The vote will not be declared invalid on the basis of Councillor Guy’s involvement.

“The work undertaken by Rationale explored potential future options for responding to government three waters reform.

“Rationale does not benefit from a decision to create a Water Services CCO and therefore there is no pecuniary interest to be declared by Councillor Guy in this decision.”