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In March, the council announced both Lakes Environmental and Lakes Leisure were to be brought back in-house, following advice from an organisational review team.
The review was recently completed and the final report was released on Tuesday, with more than 100 staff being directly affected by the disestablishment of about 40 full-time equivalent positions.
Yesterday, at an extraordinary full council meeting which lasted only two minutes, Cr John Mann was appointed a director of Lakes Environmental in place of Ms van Uden.
A report, prepared by the council's general manager of regulatory and corporate services Roger Taylor, was discussed. The report said, ''following the appointment of the mayor as a director of Lakes Environmental and the subsequent appointment of Peter Laurenson as the acting CEO of that company, the mayor has chosen to resign because there is the potential for a public perception of a conflict of interest to exist''.
The report said Mr Mann had knowledge of the business of Lakes Environmental through various roles, and the constitution of Lakes Environmental required a minimum of three directors.
The council's chief executive Adam Feeley and deputy chief executive and finance general manager Stewart Burns are the two other directors and as the company is in transition to be absorbed within the council, ''there is no merit in seeking an outside director''.
The Otago Daily Times reported on April, 10 Lakes Environmental chief executive Hamish Dobbie had resigned and would finish with the company on Friday, April 12. The board of directors resigned on April 12.