Matamata-Piako District Council has been convicted and fined $67,500 for unlawfully discharging at least 2.8 million litres of wastewater into the Mangawhero Stream last year.
The wastewater, which included untreated human effluent, entered the stream during Easter weekend in April 2023, when the council failed to turn on key equipment and then did not respond to a series of automated warnings.
In the Hamilton District Court, Judge Melinda Dickey said she found the council's offending "highly careless" and "that multiple alarms were raised, and their being ignored had serious consequences".
The case was taken by Waikato Regional Council.
Matamata-Piako District Council said it was sincerely sorry about the event, but it was disappointed Waikato Regional Council decided to prosecute the matter.
The district council's chief executive Don McLeod said it had been working to upgrade its water and wastewater systems.
"Dealing with a prosecution takes time and money. While the majority of the costs are covered by insurance, the process impacts significantly on staff morale and detracts from the projects we're already working hard to deliver across our district, which are aimed at substantially improving plant performance for our growing towns and reducing incidents of this nature."
He said both councils serve the same ratepayers.
"We would prefer to work alongside Waikato Regional Council and focus on progressing this critical work, and meeting the standard that regional council and the community wants to see."
Judge Dickey acknowledged the significant cultural, spiritual, historical and environmental importance of the receiving waterways in her decision.