The Auckland City Council has been accused of misleading the public over its controversial water policy in a damning parliamentary report.
The council's description of price rises from its water company, Metrowater, as "modest" and "small" during public consultation was "misleading", according to the local government and environmentselect committee.
The report, tabled in Parliament today, also said the council "abused" its ability to take charitable payments from Metrowater.
While the council and Metrowater acted within the terms of Metrowater's constitution and the letter of the law, "it was unwise for a public body to stretch the charitable payments provisions so far, and this undermined the public's trust in this local authority".
The report was sparked by a petition from the Water Pressure Group and a month-long investigation by the Herald into the controversial water policy.
The select committee's findings are a huge blow to Mayor Dick Hubbard, deputy mayor Dr Bruce Hucker, chief executive David Rankin and finance general manager Andrew McKenzie.
They have steadfastly defended their actions in raising water bills to take $324 million from Metrowater over the next 10 years.
Critics have accused the council of using Metrowater as a "cash cow" and gouging ratepayers to hide rate rises.
Other findings in the report included:
* The council could have kept the public better informed about the charitable payments(dividends), the rise in water rates, and the decision made to direct the payment from Metrowater into stormwater.
* The council should reconsider the policy.
* The policy of using charitable payments in this way is not best practice and should not be adopted by other councils.
The Ombudsman is conducting a separate investigation into Mr Rankin, who has refused to release secret details of a plan for the region's councils to take profits from the region's monopoly bulk water supplier, Watercare. The region has dropped the idea but Mr Rankin is still refusing to release material on the proposal.
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