QLDC councillor makes false shareholding claim as Rationale gets new contract
Analysis
Councillor Lisa Guy is at the centre of a gathering storm over what could be seen as a conflict of interest that includes a misleading claim that she’s “not a shareholder” in Rationale Ltd as the company is awarded a new $30,000 QLDC contract.
Mrs Guy is the wife of Edward Guy. The Companies Office records that Mrs Guy, together with her husband Edward Guy and EGLG Trustees Ltd (being their two initials – Edward Guy and Lisa Guy), are the majority 74.8% shareholders in Rationale Ltd.
Rationale Ltd was the main source of both the strategy and financial assumptions behind the Queenstown CBD upgrade, the arterial road and Project Manawa. All of these projects are at the centre of ongoing controversy connected with their dramatically over-budget costs and a number of what are now seen by the community as flawed strategic assumptions.
Mrs Guy has recently voted as a councillor on decisions affecting both the arterial road and Project Manawa.
Ratepayers funded Rationale’s strategic Queenstown work to the tune of millions of dollars via the QLDC.
During the local elections in 2022 Mrs Guy told Crux that she had “evidence” from the Office of the Auditor General (OAG) that there was no conflict of interest for her to be a councillor. She said she complied with a ruling that prohibited contracts of more than $25,000 in a financial year. She told Crux that only $8,000 had been paid to Rationale in the previous 12 months.
However, Mrs Guy did not mention a second requirement from the Auditor General that prohibits a councillor from voting on matters in which they have a financial interest.
Crux has also discovered that Mrs Guy and the QLDC wrote to the Auditor General in November 2023 seeking approval for a contract of $30,000 to be awarded to Rationale Ltd. The approval was provided with the caveat that “approving a contract does not affect the normal prohibition on a councillor discussing or voting on the contract or any other matters in which they have a financial interest.”
“Not a shareholder”
Mrs Guy brought herself into the public spotlight this weekend with an unusual Facebook post that featured a number of sideways and upside down Queenstown photos from 1988 referencing Rationale’s CBD and arterial road masterplans and that “I aim to celebrate every tiny improvement and step forward” including to “lift traffic out of the CBD.”
The removal of parking spaces from the CBD, the years of disruption caused by largely cosmetic $66 million street upgrades, the row over the new $50 million council headquarters and the massively over budget $128 million, 670 metre arterial “road to nowhere” have all attracted considerable negative attention from local businesses and ratepayers. These projects are all part of Rationale’s fully funded vision of Queenstown’s future.
Mrs Guy’s social media post attracted a lot of public attention and not much of it was positive. A lot of people commented on the sideways photos from the past and wondered about their relevance. But the question of Mrs Guy’s role as a councillor while being a shareholder in Rationale also resurfaced.
This weekend's Facebook post from Mrs Guy
In a response to this feedback Mrs Guy posted on her own QLDC Councillor Facebook page on Tuesday April 9th : “I personally am not a shareholder of Rationale, I am married to the managing director.”
This is the current company record for Rationale Ltd.
Mrs Guy’s own form submitted to the QLDC’s Register of Interests show that she is both a beneficiary and a trustee of the Guy family trust.
What does the Auditor General say?
Crux shared the situation regarding Mrs Guy with the Office of the Auditor General. The following statement was received by way of a reply:
“The Auditor-General’s legislative role in conflicts of interest is restricted to overseeing the Local Authorities (Members’ Interests) Act 1968 (LAMIA).
“Our November 2023 letter to the Council (QLDC) gave approval for the councillor to have an interest in the contract between Rationale and the Council, which is worth up to $30,000 in the current financial year.
“Our letter notes that “the approval does not suspend the normal prohibition on Councillor Guy discussing or voting on matters (including these matters) in which she has a financial interest.” So that process still needs to be managed by the Council and the councillor.
“Councils are ultimately responsible for managing conflicts of interest, and we expect them to carefully and appropriately manage any conflicts/perceived conflicts in accordance with their conflict of interest policies. As you’ve noted, we have published guidance for councils on how they can manage conflicts.”
This afternoon (April 10th) the Queenstown Lakes District Council has revealed to Crux that the new $30,000 Rationale contract relates to “background work on possible responses and opportunities created by the new government’s three waters review.”
A council spokesperson said that the contract was unrelated to work previously conducted by Rationale regarding Queenstown CBD, Project Manawa or the arterial road.
Crux asked what the procurement process for the Rationale three waters contract was but the question not answered by the council
It seems likely that councillors will need to vote on multiple three waters decision over the coming months but it is not clear whether Mrs Guy would voluntarily declare a conflict at that stage.
The QLDC told Crux that “it was appropriate for Council to seek formal approval from the OAG on this matter, and Council has acted in alignment with all OAG and other legislative requirements.
“The agreed thresholds were not breached as a result of the OAG approving a limit of $30,000. The total value of our contract with Rationale for this work did not exceed that approved limit.”
An enthusiastic Lisa Guy promotes Project Manawa during a public information event
Mrs Guy's full responses.
Responding to questions from Crux, Mrs Guy has provided the following information:
“Rationale has worked with QLDC, as openly stated. You have been provided with evidence confirming that there is no conflict under contracting law.
“On all matters before Council I respond to current evidence to form my decisions, and engage with people for feedback from all over our community.
“I continue to demand more efficiency in delivery of work. Budgets have been impacted by many factors, inflation, project scope, and the markets ability to deliver work. Cost to deliver infrastructure in NZ is staggering, Council must ensure better governance.
“I follow process when making any decisions. On the recommendation of the hearing panel with recent Manawa decisions I voted to engage with our community on sites for the CAB. I don’t and wouldn’t assume to hold any mandates.”
“One outcome of arterial flow removes congestion from Shotover St and Lake Esplanade, with evidence both are over capacity at times, improving shared use spaces for people and cars.”
In a subsequent email Mrs Guy made these additional points to Crux.
“Shareholding: I do not hold any shares of Rationale Ltd in person. I am a trustee of the Guy family trust, which hold shares in Rationale. I have declared pecuniary interest.
“Financial Interests: Councillors are responsible for managing conflicts of interest and do so as items come to the table. In every decision I make I must ask myself do I have a financial interest in this matter or decision. I have no financial interest in the decisions I have made to date. I have had no decision making in any contract Rationale has or does receive.
“Non-financial decisions: An interest becomes a potential conflict only if it overlaps in some way with my role as an elected member. “
Crux will continue to report on this story given the Auditor General’s emphasis in their guidance to local government on “actual, potential or perceived” conflicts of interest. We have reported over the years on the very close relationship between Rationale and the QLDC where millions of dollars has been spent on strategic masterplans.
Read: Councillors husband produced arterial road masterplan.
Read: QLDC rolls in the consultants to push growth agenda
Read: Rationale gets millions as QLDC outsources our future
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