"Security testing has been planned but has not yet occurred. Without seeing the results of testing we cannot be confident the systems are secure enough."
The managing director of electionz.com, Steve Kilpatrick, whose company runs Rotorua's elections along with 41 other councils', said he was very disappointed with the decision "because we had done everything the DIA (Department of Internal Affairs) had asked us to do in terms of meeting their requirements".
Mr Kilpatrick said he did not understand Ms Upston's reasoning.
He said his company had been running elections using online voting since 2000 and ran online elections for Fonterra's board of directors, the former Teachers' Council, the New Zealand Law Society, New Zealand Chartered Accountants, as well as various other agricultural co-ops and Maori trusts.
"Online voting is alive and well," he said.
Mr Kilpatrick said he was particularly confused about Ms Upston's comments about security testing.
"If they had paid any attention to our timeframes they would have known our testing would have gone ahead in August. Testing was to be done quite late in the piece deliberately, due to things changing so rapidly there could be new risks that may have popped up during that time. We had all of that lined up."
The council's governance and partnerships manager, Oonagh Hopkins, said while $31,000 could seem like a lot of money, the council had done the groundwork for online voting in the future.
"We'd worked behind the scenes for about eight months ... and had total trust in our election provider. It was an opportunity to get more people involved, especially those in the 18 to 35 age group who tend to move house a lot and don't update their postal details.
"Everyone has a cellphone and younger people like to do everything instantly, which they can do with online voting."
She said the council was close to getting over the line.
"We had ticked all the boxes the government had asked for so yes, we are very disappointed.
"Online voting is attractive and modern and appeals to people who don't use the old methods. Sadly there is nothing new and exciting to offer people so the barrier to voting is still there."