Some members of the community have spoken out in support of David Sefton.
However, Rotorua Lakes Council chief executive Geoff Williams has since told the Rotorua Daily Post the tender process was fair and robust.
When this newspaper reported the story on social media, the response was huge.
The post got 428 reactions, 334 comments and was shared 33 times.
The majority of the comments centred around the council's support local campaign and how hiring an out-of-town owned company did not back this sentiment.
One commenter asked Rotorua Lakes Council "What are you thinking?! Support your local businesses I mean come on!"
However, others backed the council saying "why do you keep saying "out of town contractor" when McKay have a Rotorua branch and employs Rotorua people?"
The idea that favourability should always be given to local companies and regional projects should only be offered to locals was backed by many commenters.
"This sucks, it really does. And do you know what? I'd prefer to pay more to a local contractor because I know the money is going back into our community," another person said.
But others argued that McKay's teams were still locally based and the people employed to do the job were still locals.
Mayor Steve Chadwick said it would be "inappropriate" for her to meet with Sefton as "elected members are kept well out of tendering processes".
She said she was "very concerned about the public reaction" but was assured that Sefton had every opportunity in the tender process but was ultimately not the successful tenderer.
Williams said the "public attacks on the council, the process and the successful tenderer are very disappointing."
He said tendering was a competitive process and at the end of the day, the tender panel had selected the one that was "superior".
Williams referred to McKay being a local company and that "the highest-ranking tenderer" was not Sefton Electrical in this case.
He had requested an individual evaluation of Sefton's tender and this feedback supported the initial evaluation.
Rotorua Lakes councillor Fisher Wang posted on his Facebook page that he had moved this recommendation at a council meeting on July 29.
"McKay Ltd is local, in fact they are located on Lake Rd where they employ locals, contributing to our local economy and were, prior to this contract, already the incumbent contractor carrying out streetlight maintenance for Rotorua Lakes Council (RLC).
"Sefton Electrical are a preferred supplier, and they have other current contracts with RLC."