The reason for extending his employment contract was threefold, Mrs Hazlehurst said.
"Council believed Mr McLeod was in the best position to deal with matters identified during investigations into the Havelock North water contamination; that he was in the best position to support the council's transition through the period of an acting mayor and byelection given Lawrence Yule's impending leave of absence/resignation; and that the optimum time to re-advertise the position would be in 2018 once a new mayor had been elected and prior to the next Local Government elections."
It was considered by councillors that the extension would ensure stability and continuity, she added.
The council was able to extend the contract because the appointment of Mr McLeod (following the last advertising of the position) was for less than the maximum five years because of the amalgamation process that was underway at the time of his re-appointment.
Taxpayers' Union executive director Jordan Williams said that in any other job a chief executive who failed in their primary responsibility to keep the public safe would have been sacked.
"Only at the Hastings District Council would you get a pay rise - even though it's small it should be reflecting performance and given the performance of this council and its failure a year ago his salary should be going down, not up."
He said the responsibility rested on former mayor Mr Yule's shoulders.
"He needs to justify why not only did no heads roll as a result of the Havelock North water crisis, but he approved a pay increase for his number one lieutenant.
"Even worse, by extending the contract he has tied the hands of his successor and that's morally wrong."
Mr Yule said he had nothing to say on the matter other than that all the councillors agreed to all of these processes.
"I did not make these decisions alone, they were made collectively."
In the most recent chief executive annual salary figures obtained by the Taxpayers Union, Mr McLeod was among the top earners, behind the Taupo District Council chief executive who received $397,105, the New Plymouth District Council chief who was paid $360,264 and the Thames/Coromandel District Council chief's pay packet of $351, 659.
Of the most recent figures, the Far North District Council's chief executive received the lowest amount of $246,000.