Bella Vista saga: Damning internal Tauranga City Council report released

A photo taken at the Bella Vista Homes development site on March 9, 2018, the day the 21 houses were suddenly evacuated. Photo / File

The findings of a long-awaited internal investigation into the role of Tauranga City Council staff in the failure of Bella Vista Homes have finally been released – but only partly.

And the section of the report that has been released is damning.

One major finding is that the Bella Vista subdivision "threw up a particularly egregious conflict of interest that was identified late, treated too lightly (if not ignored) and was poorly managed, if managed at all."

The report says of that conflict: "It was, albeit subconsciously, probably a factor in the unwarranted passing of a number of building inspections of Bella Vista Homes."

Late this afternoon the council released the executive summary of the report by retired judge Graeme Colgan, who started his investigation in October last year.

The report cost almost $400,000.

Colgan says in his summary he concluded there were two major areas of deficiency that led to the Bella Vista subdivision's failure.

The first concerned ground stability and retention.

"When modified from its pre-subdivision state, inherently unstable ground was not properly or sufficiently retained for the development's intended use, the construction and occupation of medium-density residential dwellings."

The second fundamental deficiency related to the buildings constructed on the land.

Colgan says there was "substandard construction of dwellings" and "substandard inspection and approval of those substandard dwellings".

He says council staff - employees and contractors - had roles in each of those broad deficiencies.

Progress on the development stopped in November 2017, leaving behind unfinished houses and millions of dollars in outstanding debts.

Twenty-one of the building company's houses were suddenly evacuated by the council in March last year and families lost their homes.

Colgan also concluded two categories of conduct or omission by council staff contributed to the collapse of the Bella Vista subdivision.

Council staff followed flawed processes when dealing with both the resource consent and the building elements of the subdivision.

He says, in those cases, those staff should not be held responsible for the flawed consequences of their performance of their roles.

However, in other instances, individual staff did not do their jobs adequately.

"Such acts and omissions may be seen as culpable, that is in breach of relevant employment agreements, and blameworthy."

On March 9 last year, 21 Bella Vista houses were evacuated by the Tauranga City Council. The site was then fenced off. Photo / File

Colgan says he found examples of council staff being at risk of being subject to "undue and improper influences" in carrying out their work.

He recommended the council have someone for staff to go to if they are concerned about being targeted, and a process for handling it.

Some council staff had a "remarkable lack of awareness of the worsening Bella Vista situation," Colgan found.

He also highlighted the council's "significant under-resourcing" in some skill areas at times, which he recommended should be beefed up. That included geotechnical engineering.

The summary was provided in response to an official information request for the full report by the Bay of Plenty Times.

Council chief executive Marty Grenfell said the full report was withheld for now on legal advice, for privacy and confidentiality reasons.

It was also protecting the free and frank admissions made by staff in the preparation of the report.

Tauranga City Council chief executive Marty Grenfell. Photo / File

The Bay of Plenty Times had also asked for details about any employment actions taken as a result of the Colgan report. That was also withheld on privacy and other grounds.

The Times will challenge the council's response with the Ombudsman.

In a statement today, Grenfell said the shortcomings highlighted in the Colgan report were now "largely historic in nature".

"Tauranga City Council is now a very different organisation today from that which existed in 2015/17."

The council was also addressing issues raised in investigations by IANZ in 2017 and the Ministry of Business, Innovation and Employment in 2018.

Both organisations would visit the council next week to check its progress on those issues, and Grenfell said the council would welcome them.

"We believe it will allow us to put these issues to rest and move on, with significantly greater confidence in the integrity of our consenting, inspecting and monitoring activities."

Tauranga Mayor Greg Brownless. Photo / File

Grenfell said there were no outstanding employment-related issues to be addressed. Some staff were receiving professional development to prevent any repeat of Bella Vista.

Tauranga Mayor Greg Brownless said the summary was provided to elected members at the same time as the Bay of Plenty Times today.

He had not had an opportunity to read it yet due to a council meeting, but said generally there had been "big changes" in the organisation since Grenfell arrived a year ago.

He had been assured that any staff member assessed as having any culpability had been "held to account".