An independent report has criticised two councils for waiting until after a flood that forced a state of emergency before they responded to reduce flood risk.
The Ngongotahā Stream in Rotorua burst its banks in April, forcing the evacuation of about 30 homes.
Rotorua Mayor Steve Chadwick declared a state of emergency after 62.5 mm of rain fell in one hour in the area.
She said there had been 94 insanitary notices issued since the flood with 21 still in place.
"In the future with the inclusion of a 20 percent allowance for climate change, the return period would be reduced to approximately a 50-year return period," the report said.
But the review, commissioned by the Rotorua Lakes Council (RLC) and the Bay of Plenty Regional Council (BOPRC), found heavy rain was only one of the reasons for the flooding.
The homes in the worst affected area is known as the Pioneer Property Trust Subdivision and includes Pioneer Road, Mohi Crescent and Oakland Place.
The review found that the houses were built on known floodplains that the RLC knew of as early as 1999.
It found the stormwater infrastructure there was inadequate and RLC overlooked errors in the design.
The report also said the Ngongotahā Stream, upstream on Ngongotahā Road, was not maintained to any particular design standard.
A 100-year-flood design standard was only applied downstream from the road despite the BOPRC knowing about flood risks upstream as well.
"Floodwaters spilled out of the stream banks and inundated houses where it had been generally identified that it would do so by the Bay of Plenty Regional Council in 2005 - 2007," the report said.
The BOPRC did not reply to requests by the RLC to extend the design at the time.
The review criticised that decision.
"It is unfortunate that a flood has had to occur to physically demonstrate the extent and consequences of the flood hazard to the Ngongotahā community and to instigate a response from BOPRC and RLC to reduce flood risk," the report said.
"The panel has noted that both councils have responsibilities for managing flood risk and that either council could have proactively taken steps to reduce known flood risks, especially, in the reach upstream of Ngongotahā Road bridge, on the basis of the information provided by BOPRC in 2005-2007."
The report said that neither council did so even though preventing and mitigating natural hazards is a "core service" for both councils under New Zealand law.
It made 24 recommendations, including identifying the responsibilities of both the BOPRC and RLC and urgent work on implementing measures that would improve the outcome for those in high risk flood areas.
'Before my time' - Rotorua mayor
Ms Chadwick declined to speak about the consents that RLC granted for the homes built on floodplains.
"That's 12 years ago and that's before my time, so I'm not going to speak to that," she said.
Ms Chadwick said both councils were now working together to develop an action plan based on the recommendations.
"There are some easy fixes there [and] these are things we've actually started to get on with," she said.
The report commended the work the BOPRC and the RLC had already done.
Ms Chadwick said the community would be able to have their say on the report.
"They'll be looking at the report as we speak and they'll be forming their view," she said.
She said she wanted to give residents confidence going forward.
"There are many of them quite anxious about going back into their houses and they won't be comforted until they see a work programme," she said.
A draft action plan will be available early next year and there will be community consultation.