A Central Otago councillor-elect accused of financial misconduct has quit saying "destructive misinformation and hatred" have become too much for his family.
Mayor Tamah Alley said she received an email from Dave McKenzie on Wednesday afternoon advising of his decision to withdraw from the election process.
McKenzie, who held a lead of fewer than 40 votes in the Vincent ward seat, was investigated by the council when he was a contractor.
Council documents show he admitted to at least one instance of charging the council an extra $1000 on an invoice.
In a statement, McKenzie said he was disappointed but destructive misinformation and hatred online had become too much for his family and his well-being.
"I am proud I tried to do something good by standing for council for the benefit of the ratepayers. Thank you for all the people who saw my ideals, worthy of your vote," he said.
"I stand by every decision or action I have taken in my life and the accountability that goes along with that. The online destructive, misinformation and hatred has become a too higher price to pay for my children, my wife, and my physical and mental well-being.
"I am disappointed, I am forced to put our well-being ahead of the communities need.
"Therefore, I resign/withdraw from the council election with immediate effect. My family wish to take some time, decompress and move on with our lives. Consequently, I will not be making any further comments on my resignation or online posts."
Alley said McKenzie's resignation would take effect immediately if he was confirmed as a councillor in official results.
"We anticipate official results by the end of this week. This will trigger a by-election for the Vincent ward, expected to be held in the next few months," she said.
"While this will incur additional costs for ratepayers, I believe it is the best outcome to ensure our community's full confidence in the integrity of their council over the next three years."
The district council had been reviewing concerns about McKenzie raised by members of the public on social media and released a tranche of 2018 investigation documents to RNZ under the Local Government Official Information and Meetings Act.
They showed McKenzie, who was the director of DM Property Solutions, might have taken thousands more but the council decided it was not worth pursuing a police prosecution.
The documents show McKenzie's company was first contracted in 2011 to perform building warrant of fitness inspections and maintenance work and in 2018 admitted to billing the council significantly more than a subcontractor's charges, which he initially put down to an "input error".
The council terminated his contract with one month's notice and began to audit other subcontractor invoices submitted by DM Property Solutions.
It found unauthorised mark-ups on 14 of out of a sample of 17 invoices, ranging from $30 to $300.
Legal counsel estimated that if the practice had continued over six years, the total potential unwarranted payments could amount to approximately $80,000, although "the actual amount could be much more or much less".
The council ultimately chose not to pursue criminal prosecution, partly because police deemed the matter a civil, rather than criminal dispute.
The council also sought advice from the legal firm Anderson Lloyd, who noted there was no formal contract with DM Property Solutions.
"In view of the murky contractual position, we do not consider DM's addition of mark-ups to the invoices meets a criminal threshold for fraud," Anderson Lloyd said.
The firm also warned the council that asking a forensic accountant to trace the full extent of the mark-ups could cost more than $10,000.
"This exercise would unlikely be an efficient use of ratepayer money in the absence of clear evidence of a breach of contract," it said.
Anderson Lloyd noted that McKenzie had issued a credit for the initial $1000 mark-up, meaning "from a financial perspective, the issue has been resolved".
Accusations about McKenzie's conduct first emerged on social media over the weekend, with some members of the public asking him to stand down.
Central Otago District Council chief executive Peter Kelly told RNZ he was aware of the concerns and the council would thoroughly review the investigation findings.
"Council will remain transparent about the matter and inform the public in due course," he said.
The council told RNZ its procurement processes had improved since 2019.
"A procurement audit was carried out in 2022, that had further strengthened policies and processes. These improvements would help lessen misunderstandings between council and its contractors," the council said.
In his candidate profile McKenzie described himself as a bringing 44 years of business management to the role, including "22 years within councils, 12 years working with them".
He said his approach was "common sense, not political ideology".
"Every decision I make focuses on delivering practical, affordable, core functions. Our community desires change. While experience is important, same councillors, same outcomes. New voices are needed to drive change and growth. I am that voice," he said.
By Katie Todd for rnz.co.nz
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