He said Dr Smith's sudden departure would be a "big loss" to the local government and environment sector.
"He had a massive amount of knowledge around environment, water and land issues, as well as the emissions trading scheme.
"So from a technical point of view, it is a big loss not only to Cabinet but also to the decision making of New Zealand," Mr Yule said.
The changes would not have a major effect on the reforms and it would be business as usual in terms of the meetings planned for mayors and CEOs.
"The Prime Minister has signalled there is not likely to be any major changes to the reforms, although I guess it depends on who the new minister is," Mr Yule said.
Dr Smith did attend the first meeting in Wellington on Tuesday where some of the headline issues included councils' ability to fund infrastructure while keeping rates down to the level of inflation.
"And certainly for others, the reorganisation of councils is causing some concern," Mr Yule said.
Napier Mayor Barbara Arnott, who also attended the Wellington meeting, said reorganisation, which meant the merger of councils, was the main point her council was worried about.
"None of the other reforms really impact on us, because we are already fiscally responsible and sticking to our core business," Mrs Arnott said.
"I wanted to know what level of significant community support, as outlined in his reforms, meant in order to trigger amalgamation," she said.
"He [Dr Smith] couldn't answer that one and just said it was the start of a conversation."
Mr Brownlee and Mr Yule would meet with mayors in Tauranga and Auckland on Wednesday, March 28 and in Christchurch on Friday, March 30.
Email: lawrence.gullery@hbtoday.co.nz