A Hawke's Bay businessman who conducted an independent review into the loss-making Horse of the Year is rejecting claims he was not independent.

The claims came from Jessica Maxwell, a Hastings ratepayer, who as chairwoman of local animal welfare group Watchdog raised concerns about conditions at the Hastings dog pound a few years ago.

Ms Maxwell, a former competitive horse rider, has raised questions about a review the Hastings District Council commissioned to look into this year's Horse of the Year Show, which recorded a loss of about $170,000. The show was run by Auckland-based company SMC Events for the first time this year.

Ms Maxwell has challenged Hastings Mayor Lawrence Yule calling the review independent because she says Craig Waterhouse, the businessman who did the review, has a long-standing business association with council management.


She said Mr Yule should not have appointed Mr Waterhouse for the job based on the fact he was the director of three council businesses (and chairman of two) - Hastings District Holdings Ltd, H.B. LASS Ltd and Hastings District Council's Parks Business Establishment Unit.

Mr Waterhouse said the allegations were confusing because he worked for councils often, as HB Lass Limited chairman as well as being on the board of Hastings District Council Holding Company.

"My understanding is my appointment was recommended by a number of councillors and I can only assume this was due to the quality of work I have undertaken in the past."

He said councillors were aware of the numerous contracts he previously had with councils.

"When I presented the outcomes of my review to the Hastings City councillors I spoke to the content of the report and issues.

"There is no error of my judgment in describing myself as independent, as I have never made this representation."

He added that his proven track record of undertaking trading reviews for the council should not stop him from undertaking further work for council.

Ms Maxwell said the review process had lacked transparency.

Mr Yule defended the appointment saying the reviewer was completely independent from both the show, HOY Board and SMC Events - the entities being reviewed.

He said Mr Waterhouse was a highly skilled adviser to the council.

The council and Mr Waterhouse had no vested interest in the outcome of the report which was made public, Mr Yule said.

"Mr Waterhouse's recommendations have been used by the council to provide guidance on how to manage the HOY situation."

But Ms Maxwell said the overall handling of HOY resulted in taxpayers' money coming to the rescue after what she believed was an in-house prearranged solution to the fallout which was fronted by HOYL chairwoman Cynthia Bowers.

Councillors decided to bail out HOY by agreeing to pay off the $170,000 loss, set aside $120,000 for next year's event and gifted a further $200,000 to A&P Showgrounds for maintenance.

Ms Maxwell said Ms Bowers' dual role as Hastings Deputy Mayor and HOYL chairwoman compromised her impartiality.

"It appeared that it was a done deal before the meeting."

But Ms Bowers said the allegations were "absolutely incorrect" and that she had not attended two closed council workshops and, therefore, did not know the outcome of either.

The chairwoman said her dual roles had previously been referred to the Auditor-General and no issue was found.

In appointing SMC Events to run the show, Ms Maxwell said the council was allowing it to become too big and costly when it should be self-funded.

She said Mr Waterhouse's suggestion for the council to set aside up to $600,000 of ratepayer money for future losses was unrealistic. "It should be funded from gaming trust grants, corporate sponsorship, trade stands and gate entrance fees. It's a dilemma."

Mr Waterhouse defended this, saying the $600,000 referred to the risk potential of future events. The figure was calculated using similar methodology the council used when it assessed the new HOY company's risks.

"The continuation of SMC as event manager, and the consistency in chairmanship of HOY will both, in themselves, reduce this risk."

He said SMC Events had a year to achieve its targets and would work with more knowledge in the future.

The mayor said the council was awaiting another report for consideration of the $600,000 recommendation. "We either support the event or we lose it to another region.

Mr Waterhouse advised that because we had never actually had to bid or pay for the event a contribution at this stage made sense."

He supported the continuation of Ms Bowers' role as chairwoman to ensure continuity of knowledge.

Mr Yule spoke to Ms Maxwell's claims that the economic benefit of HOY was not actually $12 million by saying a second economist agreed the benefit was in the $10 million to $12 million-dollar range.