Central Hawke's Bay District Council is seeking advice over claims councillors face a conflict of interest if they vote to invest ratepayer money in the Ruataniwha water storage scheme.

The claims were made during hearings on the council's proposal to invest $5 million in the Hawke's Bay Regional Council-backed Ruataniwha dam and irrigation project planned for Central Hawke's Bay.

Submitter Paula Fern singled out CHB Mayor Peter Butler and his sister, councillor Sally Butler, who are both owners of property within the planned irrigation area.

They stood to benefit from potential capital gains on their properties if the dam went ahead and were conflicted under the Local Authorities (Members'Interests) Act, Mrs Fern said.


"Those councillors should not be involved in this process at all, let alone be voting on committing ratepayer funds to a scheme that they may financially benefit from," she said.

Council chief executive John Freeman said he had discussed the issue with Local Government New Zealand and the Office of the Auditor-General. Their advice was that councillors in the irrigation zones were not conflicted because they were not in line to receive a pecuniary advantage greater than other land owners in the area. The council's vote to invest money in the scheme was also not capable of determining whether the project went ahead or not.

Another submitter, Trevor Le Lievre, said he had received conflicting legal advice to the effect that land interests of councillors needed to be declared.

After the hearing, Mr Butler - who owns farms in Tikokino in partnership with his brother, two sons and two nephews - said the council would go back to the Office of the Auditor General today to seek more clarity on the issue and "check up on one or two facts".

"The information I got today I was very happy with, but we'll just look into it a little further," he said.

Councillors also came under attack at the hearing from submitters who claimed they had already made up their mind to invest in the Ruataniwha scheme and were simply "ticking boxes" through the public consultation process.

Submitter Gerard Pain called the process a "sham".

"You all made up your minds, back about the draft annual plan time that you were going to invest in the RWSS." Councillor Maitland Manning said he took "strong exception" to Mr Pain's claim.


"This is a hearing where we are listening to everything and then we weigh it up. Sure we've got feelings that go one way or the other but they're not set."

Councillor Andrew Watts also challenged Mr Pain, saying he was considering not voting on the investment decision, having previously made statements supporting the dam.

Councillors will reconvene the hearing on Thursday at which time they will vote.