Blue Mountains council dropped the ball on asbestos management for nearly five years but since 2017 it has dramatically improved its performance, the public inquiry has found.
The commissioner, Richard Beasley SC, said council's conduct between January 2013 and November 2017 "warranted criticism".
"Following the commencement of the Work Health and Safety Act, the council was slow to develop asbestos management plans, or adequate plans, and asbestos registers for all of its workplaces. It found itself, for too long, non-compliant with the WHS Act and regulations."
But he found that the councillors and senior management were unaware of the failings and that, when they were finally alerted in mid 2017, they acted immediately.
Mr Beasley also slammed radio shock jock, Ray Hadley, whose allegations about asbestos exposure which partly brought about the inquiry were "factually inaccurate".
"The phrase 'factually inaccurate' is probably too coy. What was publicly said that prompted some of the terms of reference was utter tripe."
The claims had caused a great deal of distress to both council employees and some councillors and had a widespread negative impact on the organisation as a whole.
"It is accepted that these untrue allegations had a lasting, negative effect on people within the council."
Mr Beasley said the work done by council since 2017 meant it was on the way to become an "exemplar" in asbestos management. And he recommended that a "toolkit" council has developed on how to deal with asbestos be distributed to councils across the state to learn from.
The inquiry was ordered in June 2018 by then local government minister, Gabrielle Upton, who had twice threatened to suspend the council. Mr Beasley found the initial allegation of asbestos at Wentworth Falls pre-school was incorrect and children had not been exposed.
But he said council had fallen "short of best practice" in creating asbestos plans and registers. There appeared to be confusion about which department was responsible.
"This lack of organisation-wide unity and coherence was a failure that for a time had an almost crippling effect on getting the council fully complaint with the WH&S laws concerning asbestos," Mr Beasley said.
He found sometimes staff exaggerated or were overly optimistic, which gave a false impression of progress being made.
It wasn't until SafeWork issued an improvement notice for the Springwood Depot on May 15, 2017, that alarm bells rang in senior management.
Then general manager, Robert Greenwood, told the mayor, Mark Greenhill, about the issues on May 31 and councillors were briefed a week later. By October, 200 sites had been inspected, 100 remediations completed and 160 staff had had health screenings.
Mr Beasley concluded that there were no grounds to dismiss the council.
Cr Greenhill said the elected councillors had been cleared on every count and that, "when informed, acted appropriately and diligently".
"I thank the majority of councillors for patiently awaiting the evidence and for balancing their responses against the facts.
"In addition, the commissioner properly described some comments made by a shock jock as 'utter tripe' which the commissioner rightly stated affected peoples' lives.
"The public inquiry finds that any failings in asbestos management were not known to the councillors or council executive, but when they became aware they worked together to investigate and address them.
"Most importantly, the council has fixed past organisational mistakes in relation to asbestos management."
Cr Greenhill added: "To the workers of the council and community, I say that in repairing these problems we regarded your safety as our paramount concern."
But Cr Kerry Brown said while Mr Beasley found neither senior management nor the governing body knew that the council had been non-complaint for five years, "he does not advise how this extraordinary ignorance is to be prevented".
She also felt for the workers on the front line. "There are two generations who must live with the fear of asbestos disease from some of the council sites."
She said there was a finding of "extended, dangerous and expensive non-compliance but the recommendations do not extend to how this can be prevented from happening again"."
"I agree with the commissioner that council was not meeting its obligations under the local government act for leadership, effective provision of services and regulation, consideration of the impact of its actions on future generations and as a responsible employer."
Council CEO, Dr Rosemary Dillon, said the relentless media attacks and multiple inquiries and investigations had "taken a massive toll on the organisation".
"It is my hope that we can now move forward, and continue to help other local government areas in managing asbestos safely."
