It also recommended a management group be appointed to lead the water services change programme, including an external chair to ensure rigorous monitoring and reporting.
Mr McLeod said it was too early to tell if jobs would be lost; at this point it was a matter of working through the recommendations.
Mr Robertson said full and frank discussions were held with team members in preparing the report, as well as key external people, and he said the team wanted to do better.
"None of these people come to work to do a bad job, but even so this council still finds itself in crisis."
He said the key messages were the old ways of doing things were inadequate, and the team needed to move into a new operating environment, not just fix the status quo.
"We are recommending change and it needs to happen now, even though we acknowledge for Hastings and the entire sector that Stage 2 of the inquiry could change the ground again."
Mr McLeod said an estimated time frame to move out of crisis mode would be three months. The risk and audit subcommittee would be updated on a regular basis, and a full progress report would be given to the council in December.
An additional external 12-month review of the change programme would be undertaken and reported back to the council, he said.