2003 – 04 annual report - mav.asn.au · Web viewThe most extensive overhaul of the Local Government Act since its inception in 1989 occurred in 2003/04. Reforms that

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Published byMunicipal Association of Victoria

Level 12, 60 Collins StreetMelbourne 3000

Telephone: 03 9667 5555Facsimile: 03 9667 5550

GPO Box 4326PPMelbourne 3001

E-mail: [email protected]: www.mav.asn.au

PURPOSE TO PROMOTEMAV THE EFFICIENT CARRYING OUT OFMUNICIPAL GOVERNMENT THROUGHOUT THE STATE OF VICTORIAAND TO WATCH OVER AND PROTECT THE INTERESTS, RIGHTSAND PRIVILEGES OF MUNICIPAL CORPORATIONS

AIM TO BE A WORLD CLASS PEAK BODY FOR WORLD CLASSLOCAL GOVERNMENT

OBJECTIVE TO BE THE REPRESENTATIVE AND INFLUENTIALCOLLECTIVE VOICE OF LOCAL GOVERNMENT

CONTENTS

MAV ANNUAL REPORT 2003/41

Year in FocusPresident’s ReportMAV BoardCEO’s ReportCorporate GovernanceMAV StatementMAV OrganisationNew Business StrategiesEnvironmentProfessional DevelopmentSocial PolicyEconomic and FinanceInfrastructureCommunicationsPlanningGeneral ProjectsCommitteesFinancial OverviewGuide to the FinancialsFinancial Report

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10121314161922252830333638404244

YEAR FORIN FOCUGOVERNMENT SECTOR THAT STEMMED FROM THE MAV’SPARTNERSHIP APPROACH WERE EVIDENT DURING 2003/04.PROACTIVELY SEEKING MORE COLLABORATION BETWEEN THE SECTOR AND THESTATE AND FEDERAL GOVERNMENTS PAID OFF WITH EXTRA FUNDING ALLOCATEDTO LOCAL GOVERNMENT PROGRAMS AND SERVICES.

LOCAL GOVERNMENT ACTThe most extensive overhaul of the Local Government Act since its inception in 1989 occurred in 2003/04. Reforms thatcame into effect immediately included:····

Changes to council election dates, leading to the full alignment of elections in 2008The provision for independent reviews of council electoral structuresProportional representation for multi-member wards and unsubdivided districtsThe new Local Government Charter

The MAV commissioned legal analysis on the impact these changes would have on councils. This analysis was distributedto members and the MAV advocated with the State Government on council’s areas of concern.Other changes will be introduced progressively over the next 12 months, allowing time for new guidelines and supportingregulations to be issued and to give councils time to update their systems and procedures.

STATE COUNCIL PRIORITISES ISSUESOngoing priority issues including funding for public libraries, home and community care programs and the need toincrease pensioner rate rebates that MAV has been pursuing with the State Government were discussed at the MAV StateCouncil meeting in November. New issues that also gained support from councils included the MAV pursuing the removalof the workcover impact that has resulted from the superannuation shortfall and advocating for VCAT to give increasedweight to local planning policy in the decision making process. All resolutions that gained majority support from councilswere adopted by the MAV as part of the organisation’s future strategic directions.

STATE BUDGET WINS FOR LOCAL GOVERNMENTThe MAV was satisfied that many of the sector’s priority issues identified in its submission to the development of theState Budget 2004/05 were addressed. Pensioner rate concessions were increased for the first time to assist pensioners’capacity to pay rates. Public libraries received an increase on recurrent and capital spending and $3.1 million overthree years was committed to implement major process improvements to the planning system as outlined in BetterDecisions Faster.

FUNDING BOOST FOR R2R PROGRAMThe $1.2 billion boost to the Roads to Recovery (R2R) program represented one the most successful direct partnershipsbetween Federal and local government in recent years. The MAV and Victorian councils fought hard to ensure theprogram, that has been instrumental in reconstructing roads, building new bridges, improving road safety and stimulatingeconomic development, would continue. Councils around Australia will receive the extra funding over the next four years.The Federal Government will consult with ALGA and others to develop the distribution framework for the new programfunding beyond 2005.

POSITIVE OUTCOMES THE LOCAL

2MAV ANNUAL REPORT 2003/4

USANNUAL CONFERENCEThe October 2003 MAV Annual Conference attracted 270 attendees. Sponsored for the first time by the Commonwealth Bank, a majorhighlight of the two-day conference was guest speaker Stephen Mayne, creator of online independent newsline service crikey.com whoaddressed the audience on the topic of governance. Keynote speaker Tony Richardson explored the notion of being an effective leader in ademocratic society. More than 400 guests enjoyed the Annual Conference dinner, the MAV’s most popular annual event.

CEO APPOINTED TO LAS BOARDAs a result of the unfunded super liability issues of 2002/03 MAV CEO Rob Spence was appointed to the Local Authorities SuperannuationBoard. This appointment ensures councils’ interests and issues are raised at Board level along with providing a stronger link between MAV,councils and LAS. A critical issue is the assurance that equitable methodology for apportioning each council’s share of the shortfall ismaintained. A special advisory committee of skilled council officers to support local government’s participation on the board and increasethe information flow between the board and the sector has been established.

ECO BUY RECEIVES UNITED NATIONS AWARDECO Buy, the innovative Victorian local government green purchasing program, was the recipient of the United Nations WorldEnvironment Day national award in the Local Government Awards category for Best Specific Environmental Initiative. This recognition bythe United Nations Association of Australia not only acknowledges the achievements of the MAV program, but also the hard work thatlocal government contributes to many initiatives aimed at protecting our natural heritage, resources and environment.

ADVERSE POSSESSIONThe MAV took up a challenge from councils to advocate for legislative change that would better protect council land from adversepossession claims. The MAV's advocacy resulted in the release of proposed legislative amendments. Following the release of the draft Billthe MAV circulated a discussion paper and called on councils to prepare submissions that would be used to form a sector-wide response.The Bill is expected to be introduced into Parliament in the spring session 2004.

PERINIn response to councils' concern over the inefficiencies of the PERIN Court system, the MAV commenced intense lobbying activities thatincluded the establishment of a PERIN Court Reference Group, discussions with the Department of Justice and a formal submission to theAttorney General. The State Government responded to the MAV's concerns by establishing a whole of government review of infringementsand a review of the costs of the PERIN Court.


PRESIDENT’SREFORM WAS THE PRIMARY FOCUS FOR 2003/04. THE MAV TOOK ON AMAJOR ROLE IN ASSISTING COUNCILS DURING THE TRANSITIONAL PHASE OF THELOCAL GOVERNMENT ACT REFORMS AND IN THE STATE GOVERNMENT’S DEVELOPMENTOF THE ROAD MANAGEMENT BILL.

After only one month in the position of Acting President, I would like to acknowledge mypredecessor Cr Brad Matheson for his tireless commitment to both this organisation and tolocal government in general.Cr Matheson was instrumental in bringing forward many opportunities for local governmentin his seven years at the helm of the MAV and on behalf of the Board and MAV staff thankhim for his contribution.The current state of local government in Victoria is an exciting period for the sector.Relationships with State and Commonwealth Ministers and senior departmental decision-makers are continuing to strengthen. Regular formal meetings continue to be held with thePremier, Minister for Local Government and all key Victorian cabinet members. In addition,we have had regular dialogue with the Leader of the Opposition and the OppositionSpokesperson for Local Government and Federal Ministers on a range of issues affectingthe sector.Local government faced a number of significant legislative and policy reforms during theyear. The implementation of changes to the Local Government Act made way for transitionalarrangements to align council elections, the introduction of formal Codes of Conduct, anelection caretaker period and new financial management and reporting requirements.To ensure local government’s interests were maintained throughout the State’s developmentof the Road Management Bill, the MAV held regional workshops to determine asector-wide position.

ADVOCATING FOR A BETTER DEAL FOR LOCALGOVERNMENT ALONG WITH LEGISLATIVE CHANGE AND POLICY


REPORT

Our ongoing efforts have resulted in positive outcomes across a number of keypolicy areas. Numerous State funding wins were secured for home and communitycare, disability, immunisation, early years planning, Wired Development, planningsystem process improvements and advanced councillor training projects.An important confirmation of the MAV’s continued success as the peak bodyfor local government in terms of representation was the retainment of fullmembership by all 79 Victorian councils.Almost as important is the organisation’s freezing of membership subscriptionssince 1996/97. It is important to the MAV that councils continuereceiving membership benefits without additional cost burden.I would like to thank the Board, CEO Rob Spence and staff for their commitmentto local government over the past 12 months, loyalty to the organisation andsupport during the recent presidency transition.

JENNY DALE ACTING PRESIDENT

MAV BOARDCR JENNY DALEINDIGO SHIRE COUNCILACTING MAV PRESIDENTJUNE 2004 - CURRENTMAV Board representative of RuralNorth East Region, Councillor, IndigoShire Council 1997 to current, Mayorof Indigo 1997–99 and 2003 tocurrent, Deputy Mayor of Indigo1999–2000, Councillor, Shire ofYackandandah 1992–94 Chair, MAVHuman Services Committee; Member,Yackandandah Bush Nursing HospitalCommittee; Chair, Indigo ShireCommunity Services AdvisoryCommittee; Treasurer, YackandandahLions Club; Member, La TrobeUniversity Advisory Committee;Coordinator, Yackandandah Adult DayCentre and Beechworth Health

CR BRAD MATHESONBA, LLB, AFAIM

HOBSONS BAY CITY COUNCILMAV PRESIDENT1997 - JUNE 2004Councillor, Hobsons Bay City Council1996 to current, Mayor of HobsonsBay 1998–99 and 2001–02 President,Environment Protection Board; SeniorVice President, Australian LocalGovernment Association (ALGA);Member, Victorian ReconciliationCouncil; local governmentrepresentative on the VictorianEconomic, Environment and SocialAdvisory Council; Member, DrySeasonal Taskforce; Member, BuildingAppeals Board

CR SAM ALESSIBA, BEd, GDip (Comp), Dip Teach

WHITTLESEA CITY COUNCILMAV Board representative of InterfaceRegion, Councillor, Whittlesea CityCouncil 1997 to current, Mayor ofWhittlesea 1997–98, 2000–01,Councillor, City of Whittlesea1987–88, Member, MAV LibraryWorking Party; Chair, City of WhittleseaResponsible Gaming Forum;Representative, Community InformationWhittlesea Committee of Management;Chairperson, Yarra Plenty RegionalLibrary Service Board of Directors;Representative, Whittlesea YMCABoard of Directors; Board member,Victorian State Council of YMCAs;Director, Victorian YMCA’s CommunityProgramming Pty Ltd

CR JOHN CHANDLERSTONNINGTON CITY COUNCILMAV Board representative of MetroSouth East Region, Councillor,Stonnington City Council 1996 tocurrent, Mayor of Stonnington1996–97, Councillor, City of Prahran1982–94, Mayor of Prahran 1988–89Member, Australian Building CodesBoard (ABCB); Member, ABCBBuilding Access Policy Committee;Member, ABCB Energy EfficiencySteering Committee

Service; Member, Roads CorporationAdvisory Board; Rural Vice President,Australian Local Government Women’sAssociation Victorian Branch; Member,Victorian Association of Health andExtended Care

CR ROD FYFFEBA, BEc, Dip Ed, FSA Scot

GREATER BENDIGOCITY COUNCILMAV Board representative of RuralNorth Central Region, Councillor,Greater Bendigo City Council 1996 tocurrent; Mayor of Greater Bendigo2003 to current; Councillor, City ofBendigo 1983–1994; Chair, MAVLibrary Working Party; Member, StateLibrary Public Libraries AdvisoryCommittee; Chair, Bendigo IceStadium; Chair, Central VicGreenhouse Alliance; Chair,Environment Committee; Member,Bendigo Easter Festival


CR DARRYL ARGALLHINDMARSH SHIRE COUNCILMAV Board representative of RuralNorth West Region, Councillor,Hindmarsh Shire Council 1997 tocurrent, Mayor of Hindmarsh1997–99, Councillor, Shire ofDimboola 1985–95, President, Shireof Dimboola 1992–93 Chair, MAVStrategic Environment Advisory Group;Member, North West MunicipalitiesAssociation; Member, WimmeraCatchment Management Authority(WCMA) Board; Member, WCMACommunication Committee; Treasurer,Grampians Marketing Inc; Member,Gerang Landcare Group; Member,

CR CHRIS PAPASMELTON SHIRE COUNCILMAV Board representative of MetroWest Region, Councillor, Melton ShireCouncil 2001 to current, DeputyMayor of Melton 2002–03; Director,Western Region Waste ManagementGroup; Member, Boral Western LandFill Community Advisory Committee;Life member, Cyprian Greek OrthodoxCommunity ‘Apostolos Andreas’Sunshine; Chair, Melton CommunityWaste Management Committee;Member, Staughton College SchoolCouncil; Member, MeltonReconciliation Committee

CR GEOFF LAKEMONASH CITY COUNCILMAV Board representative of MetroSouthern Region, Councillor MonashCity Council 2000 to current, Mayorof Monash 2002–03, 2003 to current

CR JULIE EISENBISEGDip Ed, Dip Med Lab Tech

MANNINGHAM CITY COUNCILMAV Board representative of MetroEast Region, Councillor, ManninghamCity Council 1997 to current, Mayorof Manningham 2001-02; Member,MAV Human Services Committee;Member, MAV Library Working Party;Chair, Whitehorse/ManninghamRegional Library Corporation; DeputyChair, Migrant Information Centre forthe Eastern Region of Melbourne;Member, Business and ProfessionalWomen’s Association; Fellow,Australian Institute of CompanyDirectors

Hindmarsh Landcare Network;Member, Gerang Fire Brigade

CR RAE PERRYRN

DAREBIN CITY COUNCILMAV Board representative of MetroCentral Region, Councillor, DarebinCity Council 1998 to current; Chair,Community Power Group ElectricityPurchasing Working Group; Member,National Executive Australian LocalGovernment Association Board; Chair,Friends of Baucau; Member, Aboriginal& Torres Strait Islanders CommunityCouncil; Member, Darebin CommunityHealth Services Inc Board ofManagement (liaison position);Member, MAV Human ServicesPortfolio Committee; Chair, NationalAssembly ALGA Review Committee

CR JIM RYANBA, LLB

COLAC-OTWAY SHIRE COUNCILMAV Board representative of RuralSouth West Region, Councillor, Colac-Otway Shire Council 1996 to current;Mayor of Colac-Otway 1996–97,2003 to current; Councillor, City ofColac 1985–94; Mayor of Colac1990–91, 1993–94; Chairman, SouthWest Municipalities Group; Chairman,Colac Otway Performing Arts andCultural Centre Trustees; Life member,Law Institute of Victoria; Member,Colac Do Care Committee; President,Colac and District Cricket Association;Chairman, Colac Turf Club

CR MAX O’SHEATPTC

HEPBURN SHIRE COUNCILMAV Board representative of RuralSouth Central Region, Councillor,Hepburn Shire Council 1997 tocurrent; Mayor of Hepburn 1998–99,2000–01; Councillor, Shire ofDaylesford & Glenlyon 1991–95;Chair, MAV Right to Farm AdvisoryCommittee; Chair, MAV ProfessionalDevelopment Reference Group;Member, MAV/Vic Roads LiaisonGroup; Member, Regional ConnectivitySteering Committee; Member, HepburnHealth Service Board; Member,Daylesford Secondary College SchoolCouncil; Member, Daylesford

CR GEOFF DAVEYBA, LLB

BAW BAW SHIRE COUNCILMAV Board representative of RuralGippsland Region (elected April 2003),Councillor; Baw Baw Shire Council1997 to current; Mayor of Baw BawShire Council 1997–98, 1998–99,2003 to current; Member, Baw BawShire Tourism Advisory Board; Member,West Gippsland Regional LibraryService; Member, Arts and CulturalAdvisory Committee; Member, AustraliaDay Committee; Member, GippslandLocal Government Network

Community Enterprise Centre; Chair,Central Highlands Library Corporation


CEO’S

THEREPORTTHEIR COMMUNITIES, IT IS ONE OF COLLABORATION AND PARTNERSHIPS NOTONLY WITH THE STATE AND FEDERAL GOVERNMENTS BUT WITH AGENCIES,DEPARTMENTS AND ORGANISATIONS WHO ALSO SHARE THE VISION OF WORKINGTOGETHER TO ACHIEVE RESULTS.

During the last 12 months improving financial arrangements and ongoing sustainability for the sector was again amajor focus of our activities with key areas including cost shifting, inefficiencies of the PERIN system and the MFESBfire services levy.Issues raised by the MAV in the 2004 State Budget submission were addressed positively. Following years ofcampaigning $43m was allocated to increase pensioner rate concessions and an additional $8.5m for libraries weremajor wins for the sector.We worked closely with the State Government to ensure the sector’s issues were presented during the development ofthe Road Management Act, which was passed by State Parliament in May and will come into effect from 1 July 2004.Through participation on the Utilities Working Group and the Reference Panel MAV actively represented the interests oflocal government. In conjunction with VicRoads we facilitated regional workshops to discuss the Road Management Billand its links to the Step Asset Management Improvement Program.We are very proud that the importance and success of the ECO-Buy program — a partnership between the MAV,EcoRecycle Victoria and the Victorian Greenhouse Strategy — was officially recognised with a United Nations WorldEnvironment Day national award in the Local Government Awards category for Best Specific Environmental Initiative.

THE MAV IS NOT A SOLO OPERATION.REPRESENTING 79 COUNCILS ACROSS STATE AND, IN TURN,


T

The MAV’s Professional Development Reference Group, represented by 14 rural, regional, andmetropolitan councils, assisted in identifying gap areas within the sector. As representatives ofthe peak body for local government, the group has also been asked to provide feedback onlocal government strategies delivered from outside agencies.The MAV experienced a strained transition period towards the end of the financial year with thevery public resignation of our President Cr Brad Matheson.After seven years at the helm of the MAV, Cr Matheson personally contributed to manyimprovements for local government in Victoria and I commend and thank him for his longstanding commitment. Cr Jenny Dale of Indigo Shire Council in north-east Victoria embracedthe role of Acting President at short notice and I thank her and all the MAV Board members fortheir support during this time of adjustment.I would like to also pass on my appreciation and thanks to the loyal and committed MAV Boardand staff members for their lobbying efforts and delivery on the numerous projects andprograms that directly impact on every Victorian community.

ROB SPENCE CHIEF EXECUTIVE OFFICER

CORPORATE GOVERNANCETHE MUNICIPAL ASSOCIATION OF VICTORIAWAS INCORPORATED UNDER THE MUNICIPAL ASSOCIATION ACT 1907.

As the peak body for local government its purpose directly benefits the sector and the Victorian community. The MAV wascreated in 1879 at the instigation of councils and in 1907 was incorporated as a statutory body under the MunicipalAssociation Act. The Act establishes the governance framework, defines the working mandate and sets the parameters andaccountabilities within which the Association must operate.This statutory framework establishes the MAV as a public body and cements the link between the Association, localgovernment and the communities that each council represents. The Preamble to the Act recognises that the MAV wasestablished for the purpose of “promoting the efficient carrying out of local government in Victoria and watching over andprotect the interests, rights and privileges of municipal corporations.” The governance of the MAV and its statutory purposemake the primary objective of the Association to work with and support councils in achieving their constitutional andlegislative responsibilities in accordance to regulations set by its governing body, State Council.The Act states that the MAV must be legally constituted by representatives appointed from each council. The representativemust be an elected councillor. Under the MAV Rules, the councillor representatives comprise State Council who elect theMAV Board of Management and exercise the legal and statutory powers and responsibilities of the Association.The work of the MAV is directed to achieving the purpose set out in the Preamble and the activities outlined in this AnnualReport demonstrate the breadth of work and how that accountability was met over the past 12 months.

CHANGE IN LEADERSHIPAfter seven years of service, Cr Brad Matheson tendered his resignation as President from the MAV in June. In accordancewith the MAV Rules, Deputy President Cr Jenny Dale of Indigo Shire Council assumed the role of Acting President for theremainder of the financial year 2003/04.

RISK MANAGEMENTAn important ongoing service provided by the MAV is the mutual fidelity insurance fund established under the Act for thebenefit of local government. The Act also requires the MAV to establish Civic Mutual Plus, a non discretionary mutualinsurance fund of which Victoria councils are members. The purpose of this fund is to provide councils with the necessaryindemnity and protection to enable them to meet their obligations under the Local Government Act.

BOARD ALLOWANCESThe expense policy and remuneration level for board members was originally set in March 2000. Under this policy Boardmembers receive an annual allowance plus reimbursement for travel, accommodation and parking.The Board reviewed the policy in June 2003 and resolved to increase allowances for Board members as of 1 July 2003.The annual allowance amounts were increased as follows:· President from $36,000 to $46,500· Deputy President from $7,500 to $9,750· Board member from $5,000 to $6,500The President is also provided with full private use of a motor vehicle, a mobile phone and office facilities at the MAV.


Expenses claimed by Board members in 2003/04 are as follows:Cr Sam AlessiCr Geoff LakeCr Darryl ArgallCr Brad Matheson#Cr John ChandlerCr Max O’SheaCr Jenny DaleCr Chris PapasCr Geoff DaveyCr Rae PerryCr Julie EisenbiseCr Jim RyanCr Rod Fyffe

$781.30-

$13,725.40$7,043.64

-$3,068.49

$17,685.23*$1,111.82$2,414.61$4,162.27

$100.00-

$2,928.00

NOTESThe above expenses relate to payments made to Board members over the 2003/04 financial year.The amount does not correlate to the allowance and expense payments figures in the financial statements as this includes some paymentsmade to Board members for expenses incurred in 2002/03 and claimed in 2003/04. Some expenses are also charged to other areas inthe MAV accounts.Payments were either made direct to Board members, to their council for travel where they have utilised a council fleet vehicle, or directlyto the hotel with respect to some accommodation expenses.It should be noted that some Board members have lodged claims after 30 June 2004, details of which will be reflected in the 2004/05financials.* This amount includes $11,789.05 of expense payments claimed and made to Cr Dale and Indigo Shire Council in 2003/04 that were

actually were incurred in the 2001/02 and 2002/03 financial years.# Cr Matheson’s expenses include mobile phone costs but not motor vehicle.

STATUTORY COMPLIANCEIn addition to the work mandated by the Act, the MAV must itself comply with regulations and obligations applicable to statutory andpublic bodies including the Information Privacy Act 2000, Whistleblower Protection Act 2001and Freedom of Information Act.The MAV has established policies and proceedures with respect to these legislative requirements. Staff are advised of these policies oninduction, and copies are publically available on the MAV website.


ENTITIES SHOULDMAVNOT BE MULTIPLIEDUNNECCESARILYTHE SIMPLEST EXPLANATION FOR SOMEPHENOMENON IS MORE LIKELY TO BE ACCURATETHAN MORE COMPLICATED EXPLANATIONS.IF YOU HAVE TWO EQUALLY LIKELY SOLUTIONSTO A PROBLEM, PICK THE SIMPLEST.THE EXPLANATION REQUIRING THE FEWESTASSUMPTIONS IS MOST LIKELY TO BE CORRECT.KEEP THINGS SIMPLE!OCCAM'S RAZORPRINCIPLE BY 14TH CENTURY LOGICIAN WILLIAM OF OCCAM

STAFF NUMBERS AS AT 30 JUNE EACH YEARSTAFF NUMBERSFull timePart timeTemp/CasualVacant/otherTotal staff

1997242--

26

1998131--

14

1999151--

16

2000161--

17

2001160--

16

2002264-1

30

20032342-

30

20042431

2#30

GenderMaleFemaleVacantTotal staff

719

-26

68-

14

511

-16

413

-17

610

-16

1119

-30

11181

30

1018

2 (f)30

EFT* POSITIONSMAV filledMAV vacant/otherMAV temp/casTotal MAV funded

Grant fundedGrant vacantGrant casualTotal EFTS

24.1--

24.1

1--

25.1

11.53-

14.5

2--

16.5

14.51-

15.5

1--

16.5

15.51-

16.5

2--

18.5

143-

17

2--

19

19.7--

19.7

8--

27.7

20.8-

0.621.4

4.311

27.7

20.42

0.623

5.6--

28.6

CATEGORIESManagementPolicyTraining & OperationsCorporateGrant

163

14.11

151

7.52

161

7.51

18-

7.52

16282

16.93.8

88

18

5.47

6.3

1967

5.6

These numbers include staff funded under grant programs. *EFT – equivalent full time.# two staff members were on maternity leave as at 30 June 2004.


AS AT 30 JUNE 2004MAV ORGANISATION

MAVSTATECOUNCIL

MAVMANAGEMENTBOARD

FINANCE & INSURANCECONSULTANT

SNR ECONOMIST LEGAL CONSULTANT CHIEF EXECUTIVEOFFICER

BUSINESSDEVELOPMENT

COMMERCIALISATIONCONSULTANT

EXECUTIVEASSISTANT

CONSULTANT TO CEO

DIRECTOR POLICY& STRATEGY

MANAGERCORPORATE & SECRETARIAT

MANAGERPEOPLE &PERFORMANCE

POLICY ADVISER SENIOR ADVISERENVIRONMENTAL

SENIOR ADVISERSOCIAL POLICY

SENIOR ADVISERPLANNING

COMMUNICATIONSADVISER

ACCOUNTINGSUPPORT

EVENTS MANAGER

SUSTAINABILITY OFFICER

POLICY ADVISER EXECUTIVE OFFICERECOBUY*

DISABILITYPROJECT OFFICER*

COMMUNICATIONSADVISER

DATABASEADMINISTRATOR

PROJECT OFFICER

POLICY ADVISER

PROJECT MANAGER

POLICY OFFICER

POLICY OFFICER

OFFICER ECOBUY*

PROJECT OFFICER

PROJECT MANAGERSTORMWATER*

NRM FACILITATOR*

PROJECT OFFICER*

RECEPTIONIST

CORPORATE SUPPORT

PROJECT OFFICER

*GRANT FUNDED POSITIONS


NEW BUSINESSTHE MAV’S OWN BUSINESS DEVELOPMENTHAS BEEN A FOCUS THIS YEAR. DEVELOPMENTS AROUND IT, PROVISION OF NEWPROGRAMS AND THE INTRODUCTION OF A PERFORMANCE FOCUSED DEPARTMENT HAVEADDED VALUE TO THE ORGANISATIONS MEMBER SERVICES.

ACT PROGRAMIn April 2004 the MAV delivered its inauguralAdvanced Councillor Training (ACT) program to16 Victorian councillors at Werribee MansionHotel. This five-day residential program wasVictoria’s first accredited training program forcouncillors and was sponsored by RegionalDevelopment Victoria through the Departmentof Innovation, Industry & RegionalDevelopment. The ACT program wasdeveloped by the MAV in conjunction with OurPeople Plus and an advisory committee. Theprogram engaged participants in debate anddiscussion on a range of local governmentrelated topics. The program developedcouncillors’ leadership skills, enhances theirunderstanding of a councillor’s role andexpands their critical thinking.

MAV IT STRATEGYIn 2004 management consultants WhitehorseStrategic Group (WSG) delivered theInformation and Communication TechnologyStrategy for the Municipal Association ofVictoria – Moving to the Future.The strategy included an examination of theMAV’s business requirements and informationand communication technology (ICT) deliverytools. The outcome was a comprehensive list ofinitiatives that once implemented will positionICT to better support the business.By the end of the financial year severalinitiatives were already implemented including:· an audit of all IT infrastructure· the replacement and update of crucial

backend infrastructure to reduceorganisational risk, offer better network

security and improve the back-up facility.


STRATEGIES

NEW BUSINESS STRATEGIES

WEBCASTINGMAVConnect, a new webcasting facilityenabling councillors and officers to participatein MAV meetings remotely via the internet, waslaunched in September 2003.This service is particularly beneficial to regionaland rural councils who now have better accessto a range of important policy discussions andprofessional development opportunities withoutthe added pressure of travelling to the city.During the year 2003/04 15 meetings werebroadcast using MAVConnect.

PEOPLE AND PERFORMANCEIn response to a growing number of requestsfrom councillors and local government officersfor support in the area of performancemanagement and appointment and recruitment,the MAV created a new People andPerformance division. Staff in this area workwith councils in defining expectations anddeveloping processes and behaviours thatsupport performance and good governance.

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GOGRAD SINCE THE LAUNCH OF THE MAV’S GOGRAD PROGRAM INMARCH 2004, A TOTAL OF 15 POSITIONS HAVE BEEN OFFERED TO GRADUATING STUDENTSBY 14 VICTORIAN COUNCILS.GoGrad was developed in response to councils’ concerns over staff and skills shortages in key local governmentareas such as planning, environmental health and engineering. Gograd is an ongoing MAV project that will continueto position local government as an employer of choice by recruiting and retaining high calibre graduates. The 15newly appointed graduates will commence their employment positions in 2005. Employed graduates receive ongoingsupport through the GoGrad program with opportunities to attend regular training and development sessions. Theprogram has a dedicated website www.gograd.com.au and hotline number 9203 4929.

15

NEW BUSINESS STRATEGIES


ENVIRONMENTPRIORITY AREA FOR BOTH COUNCILS AND THE MAV. TO ENSURELOCAL GOVERNMENT’S RESPONSIBILITIES IN ENVIRONMENTAL MANAGEMENT ARE MET,THE MAV REPRESENTS THE SECTOR AND LOBBIES FOR ADEQUATE FUNDING ONCOUNCILS’ BEHALF.

WASTE MANAGEMENTNATIONAL PACKAGING COVENANT (NPC)A two-year action plan for 2002–2004 wassubmitted by the MAV as part of its requirementsunder the National Packaging Covenant. Theorganisation also worked with the AustralianLocal Government Association (ALGA) and LocalGovernment Association of Queensland (LGAQ)to conduct an independent review of the NPCas part of the review process for the Covenant.The report, undertaken by Meinhardtconsultants, indicated that councils consideredthe Covenant needed major revision to meetlocal government concerns.

FINANCIAL ASSURANCE FOR LANDFILLSAn agreement was reached with the EnvironmentProtection Authority (EPA) on a simplified and costeffective financial approach for councils to providefor financial assurance for landfills.

ECOBUY PROGRAMECO-Buy members increased expenditure ongreen products from $15.9 million to $33.5million. To support members, the program, withsupport of funding partners EcoRecycle Victoriaand the Victorian Greenhouse strategy,developed the new ECO-Guide to greenpurchasing and also developed an online database listing over 400 suppliers and thousandsof green products. The ECO-Buy programreceived a United Nations World EnvironmentDay national award.

WATER MANAGEMENTGREEN PAPER SUBMISSION ANDWATER POLICY FORUMAs part of the process for developing a localgovernment submission to the Government’sGreen Paper, Securing Our Water Future, theMAV held a major water policy forum with over60 councils represented. Key policy issues thatformed the basis of the MAV submission toGovernment included the impact of un-bundling of water title on irrigation districtcouncil rate bases, stormwater managementand water conservation. The MAV has alsoprovided input to the COAG water reforminitiatives.

SUSTAINABLE WATER USE PLANSThe MAV continued its successful partnershipwith Melbourne Water to assist councils inmetropolitan Melbourne to improve waterconservation. The MAV has established anetwork for councils undertaking waterconservation planning and will establish aninformation exchange to allow councils accessto best practice case studies and approaches.

SMART SEPTICS PROGRAMThe Smart Septics program gained fundingfrom the EPA to develop further resources toassist local government with domestic wastewater (septics) management including acommunity information resources kit, datamanagement approaches and a guide totechnical innovation. The MAV continued towork with the EPA Onsite Domestic WastewaterAdvisory Committee on grey water and septicsregulatory issues.

MANAGEMENT IS A KEY

ENVIRONMENT


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CLEARWATER PROGRAM- SUPPORTING SUSTAINABLEMANAGEMENT OF URBAN STORMWATER.The success of the MAV’s Clearwater program during 2003/04 can be attributed to the strong framework setduring the program’s infancy that was developed using extensive market research, detailed program planning andsetting benchmarks for capacity building in best practice urban stormwater management. This framework set thescene for delivering 20 training and education events across the state in 2003/04. A total of 875 local, interstateand overseas participants attended the Water Sensitive Urban Design tours and workshops, the Doing it Right OnSite summit and face-to-face roadshows held in metropolitan and rural Victoria. The Clearwater InfoExchangewebsite was launched in November 2003 and hosts over 800 resources, case studies and reports focusing on keyareas of sustainable urban water management. Each month the website receives more than 1500 hits. TheClearwater Program is jointly managed by the MAV and the Stormwater Industry Association of Victoria and fundedby EPA Victoria through the Victorian Stormwater Action Program. www.clearwater.asn.au


17 ENVIRONMENT

ENVIRONMENT POLICY

NATURAL RESOURCE MANAGEMENT ANDNATIVE VEGETATION MANAGEMENTLOCAL GOVERNMENT NRMFACILITATOR PROGRAMIn April 2004 the MAV entered into a three-year, $360,000 partnership agreement with theFederal Government to provide a LocalGovernment Natural Resource Management(NRM) Facilitator in Victoria. The purpose of theLocal Government NRM Facilitator program isto communicate Australian and StateGovernment NRM policy and information tolocal government and to improve localgovernment engagement in regional NRMprocesses.

CAPACITY BUILDING PROJECTA major study into the capacity and needs ofVictorian local government to deliver keyelements of sustainable natural resourcesmanagement with a focus on native vegetationwas undertaken by the organisation. The projectwas funded by the National Action Plan forSalinity and Water Quality.

SUSTAINABILITYVICTORIAN LOCAL SUSTAINABILITYNETWORKMore than 40 councils reconfirmed theircommitment to local sustainability initiatives byjoining the Victorian Local Sustainability Networkin February 2004. Additionally, a range oforganisations supporting Victorian municipalcouncils in their local sustainability initiatives havejoined the network, including Environs AustraliaProjects (Vic), Planning Institute of Australia (Vic),ICLEI A/NZ, VLGA and the Victorian WaterIndustry Association. The network seeks to be alearning, information and advocacy forum toshare and explore different models of localsustainability through integrated social,environmental, cultural and economicapproaches.

LOCAL SUSTAINABILITY ACCORDThe MAV worked with the State Governmentand other local government bodies to progressthe idea of a Local Sustainability Accordbetween State and local government torecognise the important role councils playin sustainability. In April 2004 the Ministerfor Environment agreed to the concept andthe Accord will be developed over the next12 months.


PUBLIC LIGHTINGThe MAV worked with the Sustainable EnergyAuthority of Victoria to support a SustainablePublic Lighting Initiative to encourage localgovernment initiatives in energy efficient publiclighting. The MAV also made a submission tothe Essential Services Commission review ofOperation Maintenance and Replacementcharges for public lighting.

TIMBER TOWNS VICTORIATimber Towns Victoria undertook theImplementation of the Forest PractitionerAccreditation Scheme plus initiated a nationalmeeting of timber councils as part of the ALGAConference in Canberra.

ASSOCIATION OF BAYSIDEMUNICIPALITIESThe MAV continued to provide secretariatsupport for the Association of BaysideMunicipalities, which continued its work on litterissues around Port Phillip Bay and monitoredthe process for the Channel Deepening Project.

PROFESSIONALPROFESSIONAL DEVELOPMENT IS A GROWINGBUSINESS AREA WITHIN THE MAV. ENHANCING SKILLS ANDBROADENING THE KNOWLEDGE BASE OF COUNCILLORS, CEOS AND SENIORMANAGERS IS ACHIEVED THROUGH THE DELIVERY OF HIGH LEVEL COURSES, WORKSHOPS & SEMINARS.

COUNCILLOR DEVELOPMENT WEEKENDRepresentatives from 58 councils took part in theMAV’s Councillor Development Weekend heldat the Cumberland Resort in Lorne. The numberof councillors attending the event increased by55 percent from the previous year, making the2003 Councillor Development Weekend themost successful since the annual event began in2000. Of the 163 councillors in attendance:

MAV/TELSTRA FELLOWSHIP AWARDThe 2003/2004 Telstra/MAV Local GovernmentFellowship Award was presented to Cr JackieFristacky from Yarra City Council. The $10,000bursarship was used to examine the latestinternational thinking on traffic managementmeasures and road safety models that havereduced the incidence of accident and injury inlocal streets. Cr Fristacky visited Barcelona,

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70 councillors were newly elected in 200373 were re-elected in 200315 were elected in 20025 were elected in 2001

Munich and Manchester to investigate successfullocal government management initiatives thathave reduced speed and significantly improvedpedestrian safety.

MAV TRAINING COURSESThere have been a number of newdevelopments as part of the MAV’s ongoingcommitment to provide quality training forcouncillors. The MAV delivered on its promiseto cater for both newly elected and re-electedcouncillors by expanding existing professionaldevelopment programs. 2003/2004 saw thelaunch of the Advanced Councillor Trainingprogram and Councillor Fundamentals andthe commencement of GoGrad.

DEVELOPMENT

PROFESSIONAL DEVELOPMENT



ACT PROGRAMThe Advanced Councillor Training program isVictoria’s first accredited professionaldevelopment program for councillors. The April2004 inaugural program was presented as afive-day residential course at the WerribeeMansion Hotel. Guest speakers covered a widerange of topics such as leadership, civics,democracy, governance, policy developmentand entrepreneurship.

GOVERNANCEChanges to the Local Government Act during2003/2004 required councils to develop aCode of Conduct that includes:· Council’s rules of conduct;· Procedures to be followed in relation to

conflict of interest;· Processes to resolve disputes between

councillors; and· Caretaker procedures to apply during

an election.The MAV provided assistance to councils indeveloping their Codes of Conduct and willcontinue to guide councils through the nextphase of changes.A Governance Officers’ Network was alsoestablished with its first meeting held inFebruary 2004. The objective of the networkis to provide officers with opportunities toaccess information and share knowledge andexpenses. It also provides a useful soundingboard for the development of councillortraining initiatives such as post councilelection induction programs.



GOVERNANCE SUPPORT THE MAV WAS APPROACHED BYA REGIONAL COUNCIL TO FACILITATE A DISCUSSION AIMED AT IDENTIFYINGKEY ISSUES FOR INCLUSION IN THE DEVELOPMENT OF A CODE OF CONDUCT AS REQUIRED UNDERCHANGES TO THE LOCAL GOVERNMENT ACT.Councillors and senior officers attended the informal two-hour session, which focused on reinforcing positivebehaviours and developing a framework for councillors and staff to drive good governance. At the end of thesession, decisions were made around balancing a high level of transparency and openness in council decisionmaking while maintaining productivity and effectiveness.The council has used the issues and ideas raised in thisdiscussion to develop a draft Code of Conduct and will use the support of the MAV to finalise their code.


SOCIALPORTFOLIOPOLICYOF THE LARGEST WITHIN THE ORGANISATION.RESPONSIBLE FOR ASSISTING COUNCILS TO DELIVER VITALCOMMUNITY SERVICES, THE ORGANISATION REPRESENTS AND LOBBIES ON BEHALFOF THE SECTOR TO ENSURE STATE AND FEDERAL GOVERNMENTS RECOGNISE THEIMPORTANT ROLE COUNCILS PLAY IN PROVIDING HUMAN SERVICES.

COMMUNITY CARE FOR THE AGEINGCAMPAIGNIn response to a State Council motion in 2003to develop and implement a strategy to secureadequate funding for the ageing population,the MAV commenced work on the CommunityCare for the Ageing Campaign by developing acommunications kit for councils. To increase itslobbying power on this issue the MAV joinedthe Community Care Coalition (CCC) as theVictorian representative to develop andimplement a National Community CareAwareness Program. The MAV will have anongoing role in this campaign includingparticipation in CCC meetings, developingstrategic directions and activities and providingadvice, support and resources to councils.

FOOD SERVICES REVIEWThe Victorian Review of Home and CommunityCare (HACC), a 12 month partnership projectbetween the MAV and Department of HumanServices, was completed. The final reportincluded detailed recommendations for short,medium and long term impacts on theimprovement of HACC food services.


THE MAV’S POLICY IS ONE

SOCIAL POLICY

OH&S GUIDELINES FOR HOME CAREINDUSTRYA project to improve occupational health andsafety (OH&S) in the Victorian home careindustry was initiated by the MAV and VictorianAssociation of Health and Extended Care(VAHEC). The project, funded by DHS, willdevelop guidance material for councils aroundimproving employee OH&S.

CULTURAL EQUITABLE GATEWAYSSTRATEGYMAV received funding from the StateGovernment to assist councils in making theirHome and Community Care services moreculturally responsive to older people from ethniccommunities.

Y

PUBLIC LIBRARIES- MAV LOBBYING RESULTS IN WIN FOR PUBLICLIBRARIESAfter three years of solid campaigning, the MAV played a crucial role in the 2004/05 State Budget announcementwhich provided indexed and increased recurrent funding to public libraries by $4million and an additional$4.5million to build new, and upgrade existing, libraries in Victoria. As part of its campaign, the MAV organiseda Public Library Summit in March 2004 for local government to develop a coordinated library policy and fundingposition. Local government representatives developed key campaign positions on public library funding, structureand policy. The result was viewed as a solid commitment from the State and a change in emphasis away fromshort-term capital expenditure towards long-term recurrent funding. The MAV is currently advocating forconsolidation of library responsibilities into one single governmental department and developing a statewidepublic library policy.

MAV ANNUAL REPORT 2003/423 SOCIAL POLICY

SOCIAL POLICY

MUNICIPAL EARLY YEARS PLANSFRAMEWORKA framework for Municipal Early Years Planswas prepared jointly by the MAV and DHS andcirculated to councils to provide practicalassistance in developing their plans. Councilsare required to develop these plans by July2004 as part of the new Maternal and ChildHealth funding.

LOBBYING GIVES FAMILY DAY CARE AFUTUREMAV represented the ALGA in a nationallobbying campaign around the FederalGovernment’s review of the broadband subsidyand future of family day care. The continuedprovision of broadband was announced in the2004/05 Federal Budget.

IMMUNISATIONA study undertaken by the MAV showedVictorian councils cover 60 to 80 percent ofthe cost of delivering vaccines. The MAV willcommence lobbying Federal and State forfurther immunisation funding.

DISABILITY ACCESSThe Access, Services, Support, Respect: LocalGovernments' Response to Cultural Diversity inVictoria report was launched at the MAVAnnual Conference. Led by the VictorianMulticultural Council, the MAV played a majorrole on the project reference group bydistributing a survey to all 79 councils foranalysis.All Victorian councils responded to the MAV’sDisability Access and Inclusion Survey, whichmeasured their progress in developing andimplementing strategies for people with adisability. Response rates increased from70 percent in 1998/99, 88 percent in2001/02 to 100 percent in 2003/04.Information received showed 97 percent ofcouncils have developed, or committed todevelop, a Disability Action Plan — an increaseof 22 percent from last year.


ECONOMICS &FINANCE IS A MAJORPRIORITY FOR LOCAL GOVERNMENTS. THE MAVCONTINUOUSLY ADVOCATES FOR A BETTER FINANCIAL DEAL ON ALL SERVICESPROVIDED BY THE SECTOR.

COST SHIFTINGOn 24 November 2003, the final report onthe Inquiry into Cost Shifting on to LocalGovernment — Rates and Taxes – a Fair Sharefor Responsible Local Government — wastabled in Parliament, signaling the conclusionof the Federal Government’s inquiry. Theinquiry clearly acknowledged deficiencies inlocal government’s revenue base against itsroles and responsibilities. The MAV viewed thereport as an important step in acknowledgingthe existence of cost shifting and a first steptowards rectifying the problem in collaborationwith other levels of government.In the report 18 recommendations for reformwere made, including:· All three levels of government working

together to develop an inter-governmental

STATE BUDGET 2004/05Several pressing issues raised by the MAV in itspre-Budget submission on behalf of localgovernment were addressed in theannouncement of the 2004/05 State Budgetincluding:· An increase in pensioner rate concessions

($43 million)· A commitment to providing recurrent and

capital spending on public libraries($8.5 million)

· $3.1 million over three years to implementprocess improvements to the planningsystem as outlined in Better Decisions Faster.

· Significant spending on arterial roads($237 million)

· A significant allocation to the statewideblackspots program ($130 million)

agreement on the roles and responsibilitiesof local government

· A summit on inter-governmental relations tobe held by COAG in 2005

· A new model for distribution of financialassistance grants (FAGs) to be based onequalisation principles (according to need)and phased in over three years.

ACHIEVING ECONOMIC SUSTAINABILITY

ECONOMICS & FINANCE


FIRE SERVICES LEVYUpon receipt of written correspondence fromthe Metropolitan Fire and Emergency ServicesBoard (MFESB) to councils advising of a 12–15percent increase in council contributions to theservice for the financial year to 30 June 2005,the MAV immediately commenced a lobbyingcampaign to halt the rapid rise. Discussionswere held between the MAV, the State and theInsurance Council of Australia seekingjustification of the increase. The MAVnegotiated for a local government position onthe MFESB Board for the second half of 2004as well as a commitment from the State topublicly announce that the fire service levy is aState tax.

REFORMING THE PERIN COURT SYSTEMThe MAV has worked closely with a number ofmetropolitan councils over concerns with theinefficiencies of the PERIN Court system forcollecting and recovering fines and penalties.The MAV’s intense lobbying activities throughthe establishment of a PERIN Court ReferenceGroup included a formal submission to theAttorney General; seeking expressions ofinterest for third party collection agencies andmeetings with the Department of Justice. A callfor change to the PERIN Court system was alsoa key priority in the MAV’s State Budgetsubmission. Advocacy for change resulted intwo projects from the State: a whole ofgovernment review of infringements and areview of the costs of the PERIN Court.

ECONOMICS 26& FINANCEMAV ANNUAL REPORT 2003/4

NATIONAL COMPETITION POLICYIn early 2004 the State Government announcedan increase of 4.4 percent on last year’sfunding to councils under the Government’scommitment to share a proportion of NationalCompetition Policy (NCP) payments. As well ascomplying with the general requirements of theNCP, councils also have to show that they arereporting appropriately to their communities onBest Value and implementing assetmanagement plans under the LocalGovernment Improvement Incentive Program(LGIIP). The MAV, Department of Treasury &Finance and Department for VictorianCommunities hosted a series of trainingsessions that provided an overview of the LocalGovernment Improvement Incentive Program.The MAV continues to monitor all developmentson behalf of the local government sector.

ECONOMICS & FINANCE

COST SHIFTING- FEDERAL INQUIRY ACKNOWLEDGES LOCALGOVERNMENT’S ROLE IN PROVIDING VITAL COMMUNITY SERVICES.The MAV responded to the 18 recommendations made in the final report of the Inquiry into Cost Shifting ontoLocal Government. The Association became actively involved in developing an Intergovernmental Agreement toensure that reforms adopted will provide long term financial sustainability for local government and equity forall communities.


INFRASTRUCTUMANAGEMENT OF OVER $33 BILLION WORTH OFASSETS AND INFRASTRUCTURE. THE MAV WORKS IN PARTNERSHIP WITHCOUNCILS TO RAISE ISSUES AROUND IMPROVING ASSET MANAGEMENT ANDLOBBIES ON THEIR BEHALF ON LEGISLATIVE REFORMS.

MAV PLAYS PART IN FIXING LOCALROADSThe MAV worked closely with the ALGA onsecuring adequate ongoing local roads fundingprograms. The Commonwealth’s Auslink WhitePaper contained initiatives to improve long-termland transport infrastructure needs ofcommunities while the Roads to Recovery (R2R)program was extended and a further $1.2b offunding was committed over the next four yearsto Australian local government. R2R has beeninstrumental in widening and reconstructingcrumbling roads, building new bridges,improving road safety and stimulatingeconomic development. The MAV convenedmeetings of council infrastructure and assetmanagers to provide regular updates of theprocess. In May, the MAV kick-started a state-wide process that would enable councils tomaximize their outcomes from the R2R andAuslink processes.

STEP PROGRAMManaging community assets is of relevance tomany local government areas includingnonfeasance immunity and public liabilityinsurance premiums.There are 75 councils involved in the MAV'sSTEP Asset Management Improvement Program,which provides councils with a best practiceframework for continuous improvement of assetmanagement practices. The MAV held StepRoad Management Plan Regional Workshopsthroughout the year to keep councils up-to-datewith the progressions of the Road ManagementBill, assess councils’ current position in regardto the preparation of road management plansand to assist individual councils.


LOCAL GOVERNMENT RESPONSIBLE FOR THE

INFRASTRUCTURE

ASSET MANAGEMENT CONFERENCEThe MAVs Asset Management Conferenceattracted over 250 delegates from Australia andoverseas. Strong support was given for theestablishment of a national local governmentdirection for asset management includingstandards and policies.

SAFEROADS CONFERENCEThe Saferoads partnership — MAV, VicRoads,Victoria Police, RACV, TAC and LGPro —convened the third Saferoads (LocalGovernment Road Safety) Conference in May2004. Internationally renowned road safetyexperts shared ideas, knowledge and resourcesto address road safety issues in localcommunities with Victorian councils. Theconference highlighted the pivotal role localgovernment plays in improving road safetythrough local partnership initiatives andmanaging the extensive local road network.

HUGE COST SAVINGS FROM LGOSThe MAV Local Government Online Servicesproject, funded through the FederalGovernment’s Networking the Nation program,has achieved $25 million in cost savings tolocal government, representing a four-foldreturn on investment.

NATIONAL ONLINE CONFERENCEMore than 160 delegates from across Australiaattended the MAV National Local GovernmentOnline Demonstration Conference held inOctober 2003. The major theme of theconference was enhancing local governmentefficiencies to deliver 24-hour local communityaccess to information and services.

URE

A LONG ROAD RESULTS IN NEW BILL THE MAV HAS BEENWORKING CLOSELY WITH THE STATE GOVERNMENT TO ENSURE THE PROPOSEDROAD MANAGEMENT BILL WAS DEVELOPED WITH CONSIDERATION OF THEINTERESTS OF LOCAL GOVERNMENT.The proposed road management legislation will establish a framework for the management of roads including:· A process to develop standards for the inspection, maintenance and repair of roads and road infrastructure

(including public utilities and other infrastructure on roads) to ensure a safe and efficient road network· Simplification of road classifications with VicRoads being responsible for all main roads· Demarcation of functions between VicRoads and municipal councils· Defining the powers and responsibilities of road authorities, utilities and other bodies that carry out road worksThe MAV has worked in conjunction with VicRoads to facilitate regional workshops to discuss the RoadManagement Bill and its links to the Step Asset Management ImprovementProgram.


INFRASTRUCTURE

COMMUNICATIODRIVING FORCE BEHIND THE ORGANISATION’S COMMITMENTTO PROVIDE RELEVANT INFORMATION TO ITS MEMBERS ANDRAISE THE PROFILE OF LOCAL GOVERNMENT.

COMMUNICATING EFFECTIVELYThe Communications Unit provides directionand strategic advice to the MAV President, CEO

MEDIA MANAGEMENTIn 2003/04 the main issues MAV made mediacomment on were:

and policy areas to promote local governmentactivities and campaigns. By working closelywith the media, the communications unit playsa vital role in creating a better publicperception of the responsibilities and services

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MAV’s Roads to Recovery funding campaignCouncil rate risesLAS superannuation shortfallPublic library funding

of the sector.

NEW LOOK PUBLICATIONSTo improve MAV branding, all communicationsmaterial produced by the organisation wasredesigned for consistency. The MAV Bulletin,President’s Report, Milestones and regularpublications for policy areas includingplanning and environment are distributed toall member councils and are available onthe organisation’s website.

The primary issues covered in metropolitan,regional and rural media related to the keypriority issues and campaigns.It is positive to note that the majority of mediacoverage was proactive, however, as the peakbody for local government, the MAV hasstrongly positioned itself within the media tobe contacted on many smaller local issueseach month.MEDIA COVERAGE 1 JULY 2003 –30 JUNE 2004

PRINT 64%

RADIO 29%

INTERNET 4%

TELEVISION 3%

Source: Rehame

THE MAV COMMUNICATIONS IS THE

COMMUNICATIONS


ONS

NEW STRATEGY FOR BETTER RATES REPORTINGA NEW COMMUNICATIONS STRATEGY WAS DEVELOPED TO IMPROVE MEDIACOVERAGE OF COUNCIL BUDGETS AND RATES INFORMATION.The MAV implemented the strategy to address the media’s rates reporting including collating common rates datafrom councils for the first time. The Communications Unit also prepared a kit containing fact sheets outlining therole of local government, how it is funded, how rates are set and the cost pressures that influence a council’sbudget. A media conference was held to release this information package and kits were posted to all councils andmedia outlets. The MAV’s proactive media strategy resulted in balanced and informative reporting of this issue andincluded coverage of many of the external cost pressures faced by councils.

MAV ANNUAL REPORT 2003/431 COMMUNICATIONS

COMMUNICATIONS

MEMBER SURVEYIn December 2003 the MAV distributed amember survey to councils for the purpose ofmeasuring sector-wide views of the organisationand to obtain feedback on the MAV’sperformance.Members were asked to rate the importance ofidentified issues and the MAV’s performance.Responses from 129 councillors and CEOsshowed the average MAV performance for allsurvey factors increased from 59.7% in 1999 to70.4% in 2003. In benchmarking terms, thisplaced the MAV in the top quartile of 42 publicsector organisations, while in 1999 MAV was inthe bottom quartile.The MAV will conduct a membership surveyevery two years to track the organisation’simprovement in meeting the needs of itsmembers and to confirm the key characteristicsand services of importance to the sector.The findings of the survey will be used toguide the MAV’s ongoing activities andpriorities in order to ensure the performanceof the organisation meets the needs andexpectations of member councils.

Top Ten Services of Importance

Lobbying to State and Federal GovernmentFunding from State and Federal GovernmentManaging sector relationships with State GovernmentSocial policy – capacity to negotiate funding for councilsPlanning – consultation with sector on important issuesInfrastructure – consultation with sector on important issuesEconomics – ability to influence legislative and policy outcomesEnsuring appropriate brokerage arrangements for general insuranceInfrastructure – ability to influence legislative and policy outcomesProvision of public liability and professional indemnity insurance


2003 ranking

92.1%90.8%89.4%89%88.7%88.6%88.4%88.4%88.1%87.8%

THE MAV ASSISTS COUNCIL OFFICERSPLANNINGAND,INCREASINGLY, COUNCILLORS IN PERFORMING THEIR ROLEWITHIN THE CONSTANTLY CHANGING PLANNING ENVIRONMENT. THE CHALLENGESCOUNCILS FACE ARE SUPPORTED BY THE MAV TO ENSURE LOCAL GOVERNMENT’S ROLE IN THEPLANNING SYSTEM IS RECOGNISED.

RURAL PLANNING REVIEWSThe Proposed New Zones for Rural Victoriaprohibited construction of dwellings on existinglots below the minimum lot size. Concernedover the lack of procedural fairness for affectedproperty owners in green wedge zones, the MAVprepared a submission to the Minister forPlanning focusing on issues raised by the sector.Representation by the MAV and councils playeda major role in the continuation of some existingrights in the proposed farm zones and acommitment by the State to honour expectationsof purchasers on re-zoned land in green wedgeareas.

WIND FARMSMAV held a forum to discuss the StateGovernment's planning policy on the siting ofwind farms in Victoria. The Minister for Planningattended the forum to provide clarification onthe State Government's planning policy followingthe release of the Victorian Wind Atlas. Councilsput forward relevant issues of concern,determined a sector-wide position anddeveloped an action plan.

PRE-LODGEMENT CERTIFICATIONThe MAV/DSE Continuous ImprovementProgram received $50,000 to roll-out the pre-lodgement certification concept. The fundingwas used to engage a facilitator to assist in theoperational set up and promotion of pre-lodgement certification. In Victoria nine councilsestablished a pre-lodgement certification system.Pre-lodgement certification is designed to fasttrack planning application timeframes byencouraging high quality applications to belodged.

SPEAR PILOT PROJECTThe MAV participated in a working groupoverseeing a pilot program of StreamlinedPlanning through Electronic Applications andReferrals (SPEAR). This program will enablesubdivision applications to be lodged, managed,referred and tracked online. MAV assisted in thecoordination of the SPEAR user interfacedevelopment, establishment of modelagreements between DSE and councils and heldprofessional development forums for councilplanners and municipal building surveyors.

MAV ANNUAL REPORT 2003/433 PLANNING

MELBOURNE 2030DSE released a detailed five-yearimplementation program for its blueprint forsustainable growth — Melbourne 2030. Thisprogram was evaluated by the MAV andfeedback was gathered from councils. MAVstressed the need for an ongoing financialcommitment through the Melbourne 2030targeted grants program and a meeting forMelbourne 2030 portfolio councillors was heldto discuss the implementation program prior tothe State Budget announcement.

NEIGHBOURHOOD CHARACTERMAV met with several councils and the DSE todiscuss difficulties and frustrations councils wereexperiencing in seeking to give statutory effectto neighbourhood character in their planningschemes. The MAV met with the Minister forPlanning to discuss the need to strike anappropriate balance between planning controlsto protect neighbourhood character and theobjectives for housing in Melbourne 2030 wasdiscussed.

BUILDING GUIDE FOR COUNCILLORSThe MAV worked closely with the BuildingCommission to develop a building guide forcouncillors. Building in Victoria - A LocalGovernment Guide provides detail on localgovernment’s role within the building controlsystem in Victoria. The MAV’s ProfessionalDevelopment Reference Group provided adviceand comment during development of the guide.

PLANNING 34MAV ANNUAL REPORT 2003/4

WIRED FOR BROADBAND SERVICES AN INITIATIVEOF WHITTLESEA, CASEY, CARDINIA, MELTON AND WYNDHAM COUNCILS,THE PROJECT AIMS TO ENCOURAGE THE EARLY PROVISION OF BROADBAND INFRASTRUCTUREAND SERVICES TO NEW HOUSING ESTATES IN MELBOURNE'S FRINGE SUBURBS.The MAV Wired Development Project commenced in August 2003. The MAV managed an Expression of Interest(EOI) process to lease the conduit network to a broadband infrastructure operator who would install and managethe delivery of a range of services including telephony, high speed internet and video services. A total of seventy-three companies registered for the EOI and 11 submissions were received from a range of companies and jointventures. This positive response demonstrated an interest by commercial operators to invest in broadbandtelecommunications access infrastructure by utilising the conduit networks of councils in new subdivisions.

MAV ANNUAL REPORT 2003/435 PLANNING

GENERAL

STATEPROJEGOVERNMENT DEPARTMENTS AND OTHER ORGANISATIONS TODELIVER JOINT INITIATIVES AND PROGRAMS TO LOCALGOVERNMENT FOR THE BETTERMENT OF THE COMMUNITY.

JOBS FOR YOUNG PEOPLEThe MAV supported the State Government’sJobs for Young People program by facilitatinginformation roadshows around the state,conducting a survey of all councils andpromoting the employment scheme through itspublications. Almost 60 Victorian councils werefunded $2.56 million to offer traineeships inlocal government through the first round of theJobs for Young People program in 2003/04. Inits first round, Jobs for Young People created171 new jobs and is expected to create a totalof 1,100 new employment and trainingopportunities for young people over the nextfour years.

TOBACCOA report compiled by the MAV showed localgovernment had significant involvement inimplementing tobacco reforms during2003/04. Key achievements included:· 3,350 education visits to tobacco retailers· 3,927 education visits to eating

establishments with on-premises dining· 1,461 education visits to licensed premises· 1,532 test purchases at tobacco retailers

over 120 days.The MAV will continue to provide councils withsupport, consultation and information as theState Government proposes to strengthen anti-smoking laws.


MAV WORKS IN PARTNERSHIP WITH

GENERAL PROJECTS

EMERGENCY MANAGEMENTThe MAV worked actively to improve therelationships and build alliances between itselfand the key bodies with responsibilities inemergency management such as VictoriaPolice, SES, CFA, Department of HumanServices and Office of the Emergency ServicesCommissioner.The CEO of the MAV sits as the localgovernment representative on the VictorianEmergency Management Council chaired bythe Minister for Police and Emergency Services.

COMMUNITY MATTERSIn a joint initiative by the MAV andourcommunity.com, councils received giftcertificates to issue to schools and communitygroups within their municipality that entitled thebearer to subscribe to a free capacity buildingnewsletter titled Our Community Matters. Over1000 community groups subscribed toFebruary’s first edition of the newsletter whichfeatured practical information on insurance andrisk management; financial membershipmanagement; community leadership andadvocacy; management and training;marketing and media; boards, committees ofmanagement and governance; and communityand business partnerships.

ECTS

EMERGENCY MANAGEMENT- FIRE SERVICESThe Victorian Bushfire Inquiry, which followed the devastating bushfires in the north-east and Gippsland regions ofVictoria in 2002/03 resulted in recommendations calling for an increase in local government’s role in emergencymanagement both with the community and the State and Commonwealth governments.

MAV ANNUAL REPORT 2003/437 GENERAL PROJECTS

AS THE PEAK BODY FOR LOCAL GOVERNMENT, THECOMMITTEESMAV IS REGULARLY ASKED BY BOTHSTATE AND COMMONWEALTH GOVERNMENTS AND RELATED AGENCIES TO PROVIDENOMINATIONS OR REPRESENT THE SECTOR ON A RANGE OF EXTERNAL COMMITTEES.

EXTERNAL COMMITTEESA current or former councillor, councilofficer, MAV Board member or MAVemployee represented localgovernment on the followingcommittees during 2003/04:Accessible Built Environment Working GroupAdvisory Committee on Public LibrariesAgricultural Subcommittee of the StateEmergency Recovery Planning CommitteeAlpine Advisory CommitteeAnimal Welfare Advisory CommitteeAssociation of Bayside MunicipalitiesAssociation of Providers for Inclusive Recreation,Sport, Arts and TourismAssociation of Regional Waste ManagementGroupsAustralian Building Codes BoardAustralian Environmental Labelling AssociationAdvisory CommitteeBroiler Code CommitteeBuilding Regulation Advisory CommitteeBusiness Skills Victoria BoardCommonwealth Aged Care AdvisoryCommitteeCommonwealth Aged Care Planning andBuilding Approvals Issues ForumCommonwealth Children’s Services PlanningAdvisory CommitteeCommunity Health Policy Reference GroupCommunity Safety Month Reference GroupCommunity Services and Health IndustryTraining BoardCoordination Committee for Local GovernmentCountry Fire AuthorityCountry Town Water Supply and SewerageProject Steering CommitteeDevelopment Assessment ForumDSE Continuous Improvement ProgramDSE Stormwater Conservation Fund SteeringCommitteeDSE Sustainability In Built EnvironmentReference GroupEco-Buy Reference GroupEmergency Management Manual Victoria –Strategy GroupEnvironmental Weeds Working GroupCommitteeEPA On-site Wastewater Advisory GroupFire Refuges in Victoria Steering CommitteeFlood Warning Consultative Committee VictoriaForest Health Advisory Committee


Goulburn North East Water for Growth InitiativeCommitteeHospital Admission Risk Program (HARP)Reference GroupInfluenza Pandemic Planning CommitteeInfringements Framework Reference GroupInter-Governmental Coastal Reference GroupLGIIP Assessment Panel for Compliance2003/2004LGPro Human Resources Special Interest GroupLibrary Network CommitteeLocal Sustainability Accord CommitteeM2006 Commonwealth Games EmergencyManagement Services Working GroupMAV/DHS Disability Services Working PartyMAV/DHS HACC/Primary Care Working PartyMAV/DHS Community Care PartnershipsWorking PartyMelbourne 2030 Implementation ReferenceGroupMelbourne Water / VicSES Liaison GroupMelbourne Water Drainage ImplementationSteering CommitteeMetropolitan Fire and Emergency Service BoardMetropolitan Transport ForumMinisterial Advisory Council on Public LibrariesMinisterial Drought TaskforceMinisterial Employment Advisory PanelMinisterial Housing CommitteeMunicipal Emergency ManagementEnhancement GroupMunicipal Emergency Management Plan AuditCommitteeNational Kerbside Recycling GroupNational Local Government Training &Professional Development GroupNational Packaging Covenant CouncilNational Parks Advisory CouncilNeighbourhood Environment ImprovementPlans CommitteePersonal Emergency Plans Project SteeringCommitteePlace Names CommitteePort Phillip & Westernport CatchmentManagement Authority Local GovernmentWorking GroupPublic Administration and Emergency ServicesPublic Land Stewardship Reference GroupPublic Records Advisory CommitteePublic Transport Access CommitteeRural Disputes Settlement Centre WorkingGroupRural Workforce Agency Victoria

Saferoads PartnershipState Emergency Mitigation CommitteeState Emergency Recovery Planning CommitteeState Emergency Relief Sub-CommitteeState Flood Policy CommitteeState of the Parks Stakeholder Reference GroupState Weed Policy CommitteeStormwater Industry Association of VictoriaTackling Weeds on Private Land InitiativeStakeholder Reference GroupTelecommunications Working GroupTimber Towns VictoriaVicRoads Board (Roads Corporation AdvisoryBoard)Victorian Advisory Committee for GeneralPractice Sub-committeeVicHealth Planning and Health Advisory PanelVictorian Agricultural Chemicals AdvisoryCommitteeVictorian Catchment Management StakeholdersForumVictorian Childcare Industry Liaison GroupVictorian Community Care CoalitionVictorian Disability Advisory CouncilVictorian Emergency Management CouncilVictorian Feedlot CommitteeVictorian Food Safety CouncilVictorian Jurisdictional Recycling GroupVictorian Litter Action Alliance SteeringCommitteeVictorian Local Government Disability Planners'NetworkVictorian Ministerial Housing CouncilVictorian Road Based Public Transport AdvisoryCommitteeVictorian Road Freight Advisory CouncilVictorian Road Safety Reference GroupVictorian Settlement Planning CommitteeVictorian Speed Limit Advisory GroupVictorian Stormwater Advisory CommitteeVictorian Universities Rural Health ConsortiumVision Super BoardWomen’s Participation in Local GovernmentCoalitionWorking Party on Council Sports FacilityTenancy Agreements – Insurance & IndemnitiesYear of the Built Environment SteeringCommittee

INTERNAL COMMITTEESThe MAV has established a number of advisorycommittees to assist the organisation in developingpolicies. These committees serve to benefit thelocal government sector by providing opportunitiesfor the exchange of information. MAV advisorycommittees include:MAV Human Services PortfolioCommittee: Provides strategic advice to theMAV Board on social policy and human servicesissues, particularly in intergovernmental relations.The committee also facilitates consultation withregional groupings of councils on currentstatewide issues.MAV Strategic Environment AdvisoryGroup: Provides strategic advice to the MAVBoard on environmental issues of importance tolocal government and the needs and issues ofmembers in relation to delivery of environmentaloutcomes.MAV Planning Advisory Group: Providesstrategic advice to the MAV Board on strategic andstatutory planning issues impacting on localgovernment and guides MAV policy and positiondevelopment on planning related issues.MAV Economics and Finance AdvisoryGroup: Provides strategic advice to the MAVBoard and provides support to achieve objectivesrelating to financial sustainability for localgovernment, including the development ofcampaigns, submissions and analysis of issues.MAV Strategic Transport and

InfrastructureAdvisory Group: Provides strategic advice to theMAV on infrastructure and transport issues impactingon local governments and assists the MAV Board tocarry forward key policies and campaigns in this area.Professional Development ReferenceGroup: Provides input into the MAV’s professionaldevelopment program, identifies ongoing areas ofneed within the sector to be addressed, andencourages participation of colleagues in the MAVprofessional development program.

OTHER MAV COMMITTEESLocal Government Indigenous Network:A network of councillors and council officersinterested in promoting Indigenous issues withinVictorian local government.MAV Insurance Committee: ManagementCommittee established under Deed by the MAVBoard to oversight the arrangements for CivicMutual Plus (CMP) and the Municipal OfficersFidelity Guarantee Fund and providerecommendation where required to the MAV Board.Corangamite Region Local GovernmentEnvironment Network, North East LocalGovernment Environment Network andNorth West Local GovernmentEnvironment Network: Through theEnvironment Resource Officer the MAV facilitatesa number of local government environmentnetworks, the purpose of which is to

communicate and provide resource support onenvironmental policy issues relevant to the sector.MAV/EcoRecycle Local Government

BuyRecycled Alliance Steering Committee:Representatives from funding partners providesdirection for the ECO-Buy program.Indigenous Interagency CoordinationCommittee: Comprises representatives fromState and Federal Government agencies involvedin service delivery to Indigenous people, andrepresentatives from local government. Its termsof reference include assisting local governmentand other agencies to maintain and improve theirgovernance responsibilities for Indigenouscommunities, and taking a whole-of-governmentapproach to furthering reconciliation betweennon-Indigenous and Indigenous Victorians.MAV Library Working Party: Providessupport to the MAV on campaigning forimproved outcomes for councils in public libraryfunding, policy input and planning.Library Policy Sub-Group: Created by theLibrary Working Party to develop the detail of apublic libraries policy. It is composed ofrepresentatives from the MAV (Board Memberand officer), VicLink and Country Public LibrariesGroup of Victoria, as well as a councillor and acouncil officer.Victorian Local Sustainability Network:

Agroup of councils and stakeholders activelypursuing local sustainability approaches such asLocal Agenda/Action 21 plans. The meetingsoffer a networking opportunity for exchange ofideas on sustainability.Right to Farm Advisory Group: Comprisesmainly councillor representatives from councils acrossVictoria to provide advice to the MAV on right tofarm matters, which primarily relate to the tensionsbetween farm practices and residential development.MAV Domestic Wastewater

ManagementSteering Committee: The Committee isresponsible for providing project managementoversight for all domestic wastewater relatedprojects. The committee comprises representativesfrom local government, EPA, Melbourne Water,VicWater, DSE and the Australian Institute ofEnvironmental Health.Clearwater (formerly StormwaterCapacity Building) Steering Committee:Committee directs the development and deliveryof a statewide education and training programfor local government and industry professionals inthe sustainable management of urbanstormwater. Comprising EPA, Melbourne Water,Stormwater Industry Association of Victoria andLGPro.Public Lighting Reference Group: A group

of council officers actively involved in advancingpublic lighting issues. Issues include energyefficiency of public lighting, pricing systems andmarket regulation.MAV/VicRoads Liaison Group: The purposeof the Liaison Group is to facilitate regular

consultation between the MAV and VicRoads atan executive level, to identify issues of mutualissues and concern and to establish arrangementsfor more detailed consideration and resolution ofsuch issues.MAV Competition Committee: To providediscussion and consultation about competitionpolicy and the Local Government ImprovementIncentive Program (LGIIP), and to address issuesaround training, implementation and compliance.Good Governance Advisory Group: Toimprove the overall standard of democraticgovernance throughout local governments byidentifying existing best practice initiatives andmaking recommendations to assist the MAV,VLGA, LGPro, the State Government and theVictorian community to promote and progressdemocratic governance at the local level.Wired Development Consortium: Thepurpose of the consortium is to progressinvestment in broadband telecommunicationsinfrastructure by utilising the conduit networks of

new outer-metropolitan council subdivisions.MAV/EcoRecycle Victoria LiaisonCommittee: A quarterly forum between seniorstaff within the MAV and EcoRecycle Victoria andthe EcoRecycle Board to consider and advancestrategic waste management issues of mutualinterest and relevance to both State and localgovernment.MAV PERIN Reference Group: provides adviceto the MAV on issues with the infringement systemand the enforcement of outstanding infringementnotices. It is composed of council officers frompredominantly metropolitan Melbourne.National Eco-Buy Alliance: The NationalAlliance aims to support and partner other statesand territories in the establishment of their own

successful green purchasing programs. The MAVhas encouraged all State Local GovernmentAssociations and the ACT Government tobecome members. To date the membershipcomprises MAV, WALGA, LGAQ, ACT ChiefMinisters Department, Local Govt & ShiresAssociation of NSW, NSW Buy Recycled Allianceand the NZ Ministry of Environment.EPA/MAV State Environmental ProtectionPolicy Implementation Steering Committee(SEPP): A committee comprising senior staff withinthe MAV and EPA to oversee the development anddelivery of a joint project aimed at improving localgovernment implementation of the SEPP (Waters ofVictoria).MAV On-site Wastewater SteeringCommittee: A group comprising MAV staff andbroad representation from local government andState Government departments and agenciesestablished to oversee the development anddelivery of a number of wastewater relatedprojects and to provide the MAV with advice onkey wastewater issues and to assist the MAVto carry forward key policies and campaignsin this area.


FINANCIALAssociationOVERVIEW economic activity

ofthe Municipal Association of Victoria, the Municipal Officers’ Fidelity Guarantee Fund and Local Government Mutual Liability InsuranceScheme (Civic Mutual Plus) is reported to the members as an economic entity within the annual accounts. The combined activities areshown as the consolidated accounts and the Municipal Association of Victoria, being the Parent Entity, is shown separately as the MAVGeneral Fund.The MAV represents local government in Victoria. One of the activities of the MAV is that it seeks out, applies for, and administers grantfunds for and on behalf of its members for the benefit of both local government and the Victorian community. This activity of theAssociation has been accounted for as a segment and included at Note 20 in the financial statements.The MAV financial statements also include the activities of its insurance business, MAV Insurance, which operates the Municipal OfficersFidelity Guarantee Fund and the Local Government Mutual Liability Insurance Scheme (Civic Mutual Plus) for the benefit of councils andother local authorities. Both Insurance activities are mutual funds and are subject to the oversight of the Association’s Board ofManagement, which acts through a committee of management constituted by the Board (The MAV Insurance Committee of Management).The MAV Insurance Committee of Management carries out oversight and contract management of the operational activities of both theMunicipal Officers’ Fidelity Guarantee Fund and Civic Mutual Plus. Jardine Lloyd Thompson Pty Ltd provides the claims and riskmanagement services under contract to the MAV.

MAVThe financial result for the MAV in 2004 has again been solid achieving a small surplus for the year of $38,479 (2003 $266,536). Theresult inclusive of grants received and expended for the 2004 year was a $223,900 deficit (2003 $2.86 million deficit) with net assetsfalling to $3.71 million (2003 $3.94 million).During 2004 the MAV received a further $2.27million (2003 $3.1 million) in grants from both Federal and State governments. It was ayear when the MAV delivered on several significant projects that had been funded by grants from both Federal and State governments.These grants are managed by the MAV for the benefit of the local government sector and Victorian communities. The deficit relating togrant activities was $262,000 for the year ended 30 June 2004 as compared to a deficit in 2003 of $2.62 million.Consequently, as at 30 June 2004 the MAV had a commitment to expend $2.1 million (2003 $2.22 million) of grant funds on projects forthe benefit of local government and Victorian communities.During 2004 the MAV achieved solid project delivery and firm cost control.The operating surplus of the consolidated entity was $2.46 million (2003 $5.46 million) after providing $Nil (2003 $253,851) for theMAV’s share of the LAS Unfunded Superannuation Liability. This had the affect of increasing the net assets of the MAV from $10.23 millionin 2003 to $12.69 million this year.

MAV INSURANCEThe MAV Insurance business consists of Civic Mutual Plus and The Municipal Officers Fidelity Guarantee Fund. Under the MunicipalAssociation Act 1907 the MAV is required to provide public liability and can provide fidelity insurance to local government and otherstatutory authorities.MAV Insurance is not subject to Australian Prudential Regulatory Authority (APRA) regulations. However, the MAV Insurance Committee ofManagement views compliance with these regulations as being good business governance and practice and has a policy of complyingwith the “spirit” of the APRA regulations.In addition, application has been made to the Australian Securities and Investment Commission (ASIC) for an Australian Financial ServicesLicence. Obtaining an AFSL licence will ensure that MAV Insurance will maintain the highest standards of governance, provide operationalefficiency and enhance future viability of the MAV Insurance business for the betterment of both the Scheme and Fund members.2004 was another difficult year for the insurance industry. With prudent financial management MAV Insurance has navigated these difficulttimes to achieve an excellent outcome for the year. The introduction of tort reform during the financial year has already provided financialbenefits to Civic Mutual Plus. In addition, evidence suggests that tort reform has also had a positive impact on the under excess claimspaid by CMP scheme members.The STEP program is progressing well and it is anticipated that all members will have Asset Management Plans in place and operational by1 January 2005 when the non-feasance protection for road authorities will cease.The combined surplus for 2004 was $2.7 million (2003 $8.3 million). The net asset position at the end of 2004 was $8.97 million (2003$6.29 million).

In accordance with the requirements of the Municipal Act 1907 and applicable accounting standards, the


CIVIC MUTUAL PLUS (CMP)Prudent management and improved performance of the fund’s members has seen an improvement in this years result.The fund is still dealing with:a) The failure of two insurance companies that directly impacted this years result.b) The abolition of the non feasance defence for road authoritiesThe Board of the Municipal Association of Victoria have considered these matters carefully and have decided to take a conservativeapproach and provide fully for the potential losses from both these occurrences.The general insurance environment also improved and this has led to improved returns for this year.The operating surplus of Civic Mutual Plus for this year was $2.8 million (2003 $8.2 million).The surplus of assets against liabilities at 30 June 2004 was $8.6 million (2003 $5.8 million).

MUNICIPAL OFFICERS FIDELITY GUARANTEE FUNDDuring 2004 the Fidelity Guarantee Fund again experienced higher reinsurance premium payments, up by 37.5%, as against an increaseof 20% in 2003. The year included an increase in claims expenditure from $134,102 in 2003 to $412,833 in 2004. The major fraudclaims on the Fund during the year were in the area of electronic funds transfer.The operating deficit for 2004 was $111,264 (2003 surplus $95,581). The net asset position of the fund reduced to $362,105 (2003$473,369) with cash assets amounting to $236,108 (2003 $520,681).


GUIDE TO THE FINANCIALSThe financial report is a key part of the MAV’s Annual Report. It shows how the MAV performed financially during the 2003/2004 financialyear and the position at the end of the financial year (30 June 2004).The financial report is presented in accordance with the Australian Accounting Standards and the recommendations of the Urgent Issues Group.The MAV is a not-for-profit association that represents its members who are the seventy-nine local government authorities around Victoria.The MAV also runs the MAV Insurance business. This business consists of two entities, Civic Mutual Plus (public liability and professionalindemnity insurer) and the Municipal Officers Fidelity Guarantee Fund. The MAV also manages grants received from Federal and Stategovernments, for and on behalf of the local government industry.All these different interests are accounted for separately and then consolidated into the MAV financial report.The MAV is committed to accountability in all respects of its operations. It is with this in mind that this plain english guide has beendeveloped to assist readers understand and analyse the financial report.

WHAT IS CONTAINED IN THE ANNUAL FINANCIAL REPORT?The financial report contains three main sections — the financial statements, the notes to the financial statements and the statements bythe directors and auditors.The financial statements include the statement of financial performance, statement of financial position and statement of cash flows.The notes to the financial statements detail the MAV’s accounting policies and sets out the detailed values that are carried into thefinancial statements.The statements by directors and auditors provide the views of the directors of the MAV and the independent auditors with regard to thefinancial report. The statement by directors confirms the view of the directors that the financial report provides a true and fair view of thefinancial performance, financial position and solvency of the Association. The audit report by the independent auditor expresses theauditors opinion as to whether the financial statements present fairly the financial position of the Association as at 30 June 2004 and theresults of the various business operations and cash flows for the year ended 30 June 2004 in accordance with Accounting Standards andother mandatory professional report requirements.

FINANCIAL STATEMENTS1. STATEMENT OF FINANCIAL PERFORMANCEThe statement of financial performance shows:· The MAV’s revenue from its various activities· The expenses incurred in running the MAV and its business activities.These expenses relate only to the business operations and do not include costs associated with the purchase of assets. The expense item“depreciation” spreads the cost of the assets over the estimated life of the assets.The most important figure is the surplus for the year. This means that revenues were greater than expenses.

2. STATEMENT OF FINANCIAL POSITIONThe statement of financial position shows the assets the Association owns and the liabilities it owes at the 30th June.The statement separates the assets and liabilities into current and non-current. Current means those assets or liabilities that will be eithercollected or that fall due within the next twelve months.The components of the statement of financial position are:

2.1. CURRENT AND NON-CURRENT ASSETSCash assets includes cash held in the bank, petty cash, cash deposits and cash investments.Receivables are monies owed to the Association.Prepayments are payments made in the current financial year, which relate to the next financial year (ie annual subscriptions).Property, Plant and Equipment represents the value of the equipment, furniture and fittings, computers, web site and intranet andmotor vehicles owned by the Association.Intangible Assets are trademarks, educational programs and other intellectual property owned by the AssociationOther Financial Assets represent the value of shares held by the Association in the Co-operative Purchasing Scheme.


2.2. CURRENT AND NON-CURRENT LIABILITIESBank Overdraft indicates the amount the Association owes its bankers on its daily operating account.Payables are monies owed by the Association to its suppliers as at 30 June.Premiums in advance are insurance premiums relating to the next financial year billed to members of the insurance fund before 30 June.Provision for employee entitlements is the accounting term for Annual Leave, Long Service Leave and staff retirement gratuities owedto staff.Provision for claims outstanding represents insurance claims reported by members together with an estimate of claims incurred butnot yet reported including an estimate of the costs of settlement for these claims.Other liabilities represents fees received in advance for seminars and conferences to be held in the 2005 financial year.

2.3. NET ASSETSNet Assets this term describes the difference between total assets and total liabilities. It represents the net worth of the Association as at30 June.

2.4. TOTAL EQUITYTotal Equity this describes the components making up net assets. The only component that comprises ‘total equity’ is ‘accumulatedsurplus’ which is the value of all net assets accumulated over time.

3. STATEMENT OF CASH FLOWSThe statement of cash flows summarises cash payments and cash receipts for the year.The values may differ from those shown in the statement of financial performance because the statement of financial performance isprepared on an accrual basis.Cash is derived from, and is used in, two main areas:

3.1. CASH FLOWS FROM OPERATING ACTIVITIESReceipts relate to all cash received into the Association’s bank account from members and others who owed money to the Association inthe form of fees or premiums. Receipts also include interest earned from the Association’s cash investments. It does not include receiptsfrom the sale of assets.Payments relate to all cash paid out of the Association’s bank account to staff, creditors and others. It does not include cash paid for thepurchase of assets.

3.2. CASH FLOWS FROM INVESTING ACTIVITIESThis relates to cash receipts and cash payments resulting from either the sale or purchase of property, plant and equipment.The statement of cash flows concludes with ‘cash at end of year’, which indicates the cash the Association has at 30 June to meets itsdebts and liabilities.

NOTES TO THE FINANCIAL STATEMENTSTo enable the reader to understand the basis on which the values shown in the statements are established it is necessary to provide detailsof the Association’s accounting policies. These are described in Note 1.Apart from the accounting policies, the notes also give details behind many of the summary figures contained in the statements. The notenumbers are shown beside the relevant items in the statement of financial performance, statement of financial position and the statementof cash flows.Where the Association wishes to disclose other information, which cannot be incorporated into the statements, then this is shown in the notes.The notes should be read at the same time as reading the financial statements in order to get a full and clear picture of the financial statements.

STATEMENTS BY DIRECTORS AND AUDITORSSTATEMENT BY DIRECTORSThe statement by directors is made by two directors on behalf of the MAV Board. The statement states that in the opinion of the Board thefinancial statements present a true and fair view of the operations of the Association and that the Association can pay its debts as andwhen they fall due.

INDEPENDENT AUDIT REPORTThis report is the independent auditors opinion on the financial statements. It provides the reader of the financial statements a completelyindependent opinion of the financial statements of the Association. The opinion covers all statutory and accounting standards compliancerequirements as well as providing a view on the truth and fairness of the financial statements.


2004 FINANCIALMAVREPORT

44MAV ANNUAL FINANCIAL 2003/4

STATEMENT OF FINANCIAL PERFORMANCEFOR THE YEAR ENDED 30 JUNE, 2004

CONSOLIDATED MAV - GENERAL FUND

NOTE2004

$2003

$2004

$2003

$

REVENUE FROM ORDINARY ACTIVITIES

EXPENSES FROM ORDINARY ACTIVITIES

LAS UNFUNDED SUPERANNUATIONSURPLUS(DEFICIT) FROM ORDINARY ACTIVITIESTOTAL CHANGES IN EQUITY

2, 3

4(b)

172

16

49,946,566

47,490,651

-2,455,9152,455,915

47,163,661

41,454,454

253,8515,455,3565,455,356

7,277,598

7,501,498

-(223,900)(223,900)

7,205,114

9,813,509

253,851(2,862,246)(2,862,246)

The accompanying notes form an integral part of these statements

45MAV FINANCIAL REPORT 2003/4

STATEMENT OF FINANCIAL POSITIONAS AT 30 JUNE, 2004


NOTE2004

$2003

$2004

$2003

$

CURRENT ASSETSCash Assets 20,154,086 16,472,782 3,318,973 4,331,058ReceivablesPrepaymentsTOTAL CURRENT ASSETS

9 44,048,992114,823

64,317,901

48,249,91273,569

64,796,263

508,235114,823

3,942,031

673,84973,569

5,078,476

NON-CURRENT ASSETSReceivablesProperty, Plant and EquipmentIntangiblesOther Financial AssetsTOTAL NON-CURRENT ASSETS

91(e),111(e),12

44,626,582599,778

52,72410

45,279,094

45,086,770549,290

3,92810

45,639,998

-599,778

52,72410

652,512

-549,290

3,92810

553,228TOTAL ASSETS 109,596,995 110,436,261 4,594,543 5,631,704

CURRENT LIABILITIESPayables 3,371,753 3,582,387 431,321 945,771Premiums in AdvanceProvision for Employee EntitlementsProvision for Claims OutstandingOther Current LiabilitiesTOTAL CURRENT LIABILITIES

101513

29,205,209240,825

13,780,202111,064

46,709,053

28,703,707219,261

15,611,232203,566

48,320,153

-240,825

-111,064783,210

-219,261

-203,566

1,368,598

NON-CURRENT LIABILITIESLAS Unfunded SuperannuationProvision for Employee EntitlementsProvision for Claims OutstandingTOTAL NON-CURRENT LIABILITIES

171513

-98,097

50,101,95450,200,051

253,85172,119

51,558,16251,884,132

-98,097

-98,097

253,85172,119

-325,970

TOTAL LIABILITIES 96,909,104 100,204,285 881,307 1,694,568NET ASSETS 12,687,891 10,231,976 3,713,236 3,937,136

EQUITY 16 12,687,891 10,231,976 3,713,236 3,937,136

The accompanying notes form an integral part of these statements.


CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 30 JUNE, 2004


NOTE2004

$2003

$2004

$2003

$

CASH FLOW FROM OPERATING ACTIVITIESRECEIPTSSubscriptions, Grants and FeesInvestment IncomeExcesses and Recoveries

45,117,397880,295

12,705,898

36,396,177909,357

12,482,804

7,780,746211,212

-

8,262,229234,609

-

PAYMENTSSuppliers (38,717,627) (28,041,487) (8,683,478) (10,749,323)Claim Payments (15,984,094) (14,961,582) - -NET CASH PROVIDED BY/(USED IN)OPERATING ACTIVITIES 8b 4,001,869 6,785,269 (691,520) (2,252,485)

CASH FLOW FROM INVESTING ACTIVITIESProceeds from sale of Fixed AssetsPayments for Fixed AssetsNET CASH USED IN INVESTING ACTIVITIES

NET INCREASE / (DECREASE) IN CASH HELDCash at Beginning of Year

247,772(568,337)(320,565)

3,681,30416,472,782

245,681(253,909)

(8,228)

6,777,0419,695,741

247,772(568,337)(320,565)

(1,012,085)4,331,058

245,681(253,909)

(8,228)

(2,260,713)6,591,771

CASH AT END OF YEAR 8a 20,154,086 16,472,782 3,318,973 4,331,058

The accompanying notes form an integral part of these statements.


NOTES TO AND FORMING PART OF THE FINANCIALSTATEMENTS FOR THE YEAR ENDED 30 JUNE, 2004

1

a

b

c

d

e

SUMMARY OF ACCOUNTING POLICIESThe financial report is a general purpose financial report which has been drawn up in accordance with AccountingStandards, Mandatory Professional Reporting Requirements (Urgent Issues Group Consensus Views) and other relevantrequirements.The principal accounting policies adopted in preparing the financial report are stated to assist in a generalunderstanding of the financial report. Accounting policies have been consistently applied unless otherwise indicated.

Basis of AccountingThe accounts have been prepared on the accrual basis using historical costs and, except where stated, do not take intoaccount current valuations of assets.

Principles of ConsolidationThe economic entity comprises the financial report of Municipal Association of Victoria and of its 100 percentcontrolled entities the Local Government Mutual Liability Insurance Scheme (trading as Civic Mutual Plus, - CMP), andMunicipal Officers’ Fidelity Guarantee Fund.A controlled entity is any entity controlled by Municipal Association of Victoria (Incorporated under the MunicipalAssociation Act 1907). Control exists where Municipal Association of Victoria has the capacity to dominate thedecision-making in relation to the financial and operating policies of another entity so that the other entity operates withMunicipal Association of Victoria to achieve the objectives of Municipal Association of Victoria.The affects of all transactions between entities in the consolidated entity have been eliminated.

Change in Accounting Policy – Insurance ActivitiesThe MAV Insurance Committee requested the independent actuary to provide an estimate of the provision required tocover claims settlement administrative expenses that would be incurred in managing all outstanding claims in the eventthat Civic Mutual Plus winds down. This practice is consistent with insurance industry standards. In accordance with therecommendation of the independent actuary the Committee has decided to provide 4% of the gross outstanding claimsestimates (including gross IBNR and Development) as the provision for claims settlement administration costs. Thisprovision has been established over the last two-years. As a result of the change in accounting policy the surplus for the2004 financial has been reduced by $1,257,798 (2003 $1,684,243)

Income TaxThe Association is exempt from income tax, in accordance with sections 50-10 and 50-25 of the Income TaxAssessment Act 1997

Property, plant, equipment, trademarks and intellectual propertyProperty, plant, equipment, trademarks and intellectual property are carried at cost, less where applicable, anyaccumulated depreciation or amortisation. The carrying amount of property, plant, equipment, trademarks andintellectual property is reviewed annually by directors to ensure it is not in excess of the recoverable amount from thoseassets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from theassets employment and subsequent disposal. The expected net cash flows have not been discounted to present valuesin determining recoverable amounts.On disposal of an item of property, plant, equipment, trademarks and intellectual property the difference between thesales proceeds and the carrying amount of the asset is recognised as a gain or loss.The depreciable amount of all fixed assets including buildings and capitalised leased assets are depreciated/amortisedon a straight line basis over their estimated useful lives to the entity commencing from the time the asset is held readyfor use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or theestimated useful lives of the improvements.

THE FOLLOWING DEPRECIATION RATES ARE IN USE:Leasehold Improvements at costFurniture and Equipment at costMotor Vehicles at costInteractive Communications System at costWeb Site and Intranet at costTrademarks, Intellectual Property & Educational programs at cost


ANNUAL RATE20%

20 – 33%20%33%33%

10 – 20%

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2004

f

g

h

i

j

k

LeasesA distinction is made between finance leases which, effectively transfer from the lessor to the lessee substantially all therisks and benefits incidental to ownership of the leased property, without transferring the legal ownership, and operatingleases under which the lessor effectively retains substantially all the risks and benefits.Where assets are acquired by means of finance leases, the present value of minimum lease payments is established as anasset at the beginning of the lease term and amortised on a straight line basis over the expected economic life. Acorresponding liability is also established and each lease payment is allocated between such liability and interest expense.Operating lease payments are charged to expense on a basis which is representative of the pattern of benefits derivedfrom the leased property.Lease incentives received under operating leases are recognised as a liability.

Employee EntitlementsThe following liabilities arising in respect of employee entitlements are measured at their nominal amounts:wages and salaries, annual leave and sick leave regardless whether they are expected to be settled within twelve monthsof balance date, other employee entitlements that are expected to be settled within twelve months of balance date.All other employee entitlements, including long service leave, are measured at the present value of the estimated futurecash outflows in respect of services provided up to balance date. Liabilities are determined after taking intoconsideration estimated future increase in wages and salaries and past experience regarding staff departures. Relatedon-costs are included.Contributions made to an employee superannuation fund are charged as expenses when incurred.

Revenue RecognitionINTEREST REVENUEInterest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financialasset.GRANT REVENUEGrants are recognised as revenue when the Association obtains control over the assets comprising the contribution.Control over the grants is normally obtained upon their receipt or upon prior notification that a grant has been secured.SUBSCRIPTIONS AND SPONSORSHIPSSubscriptions and Sponsorships are recognised on an accrual basis.

SUMMARY OF ACCOUNTING POLICIES RELATING TO INSURANCE ACTIVITIES

PremiumsPremiums comprise amounts charged to members of the Schemes for policy cover, net of amounts returned to membersas bonuses. The earned portion of premiums received is recognised as revenue. Premiums are treated as earned fromdate of attachment of risk. The pattern of recognition over the policy is based on time, which is considered to closelyapproximate the pattern of risks undertaken.

Premiums ReceivableDuring the month of June each year, the Schemes issue premium notices to Scheme Members. The risk attaches to the

premiums in the next accounting period and accordingly the revenue is recognised each following year commencing 1 July.

ClaimsClaims incurred expense and liability for outstanding claims are recognised in respect of direct business. The liabilitycovers claims incurred but not yet paid, incurred but not yet reported claims, and the anticipated direct and indirectcosts of settling those claims. Claims outstanding are assessed by reviewing individual claim files and estimating claimsnot notified and settlement costs using statistical and actuarial techniques. The liability for outstanding claims ismeasured as the present value of the expected future payments, reflecting the fact that all the claims do not have to bepaid out in the immediate future. The expected future payments are estimated on the basis of the ultimate cost ofsettling claims, which is affected by factors arising during the period to settlement such as normal inflation and“superimposed inflation”. Advice from the MAV’s actuary has estimated normal and superimposed inflation to be 6%(2003 6%)and the discount rate at 5.5% (2003 4.5%)



Superimposed inflation refers to factors such as trends in court awards, for example increases in the level and period ofcompensation for injury. The expected future payments are then discounted to a present value at the reporting dateusing discount rates based on the investment opportunities available to the organisation on the amounts of fundssufficient to meet claims as they became payable.Details of rates applied are disclosed in note 13.

l Excesses and RecoveriesExcesses and other recoveries are brought to account when established at the time of consideration of the claimsdetails and only where a definite set of circumstances exist which will support the credibility of the justification ofobtaining either a recovery of excess from scheme member or recovery of claim cost from a third party.

m Revenue RecognitionRevenue is recognised to the extent that it is probable that the economic benefit will flow to the entity and the revenuecan be reliably measured. The following specific recognition criteria must also be met before revenue is recognised.(i)(ii)(iii)

Premiums – recognised in the period the fund is at risk.Excesses and Recoveries – on an accruals basis.Investment Income – on an accruals basis including adjustments to bring values of cash backed unit trusts toaccount as investment income.

n

o

p

q

Provision for Reinsurance RecoveriesDuring the 2001 financial year two of the participants in the Scheme’s reinsurance program were placed into the handsof liquidators. These companies were part of the reinsurance programs in fund years from 1994 to 1998. The Directorshave determined that sufficient information to reasonably estimate the extent and timing of the return to the Schemefrom the liquidators of these companies is not currently available. The Directors therefore determined in the 2001 yearthat the most prudent course of action was to provide against 100% of the estimated future recoveries due from theseinsurers. The Directors continue to constantly monitor the position with a view to ensuring that the Scheme takes allreasonable steps to protect its position and to maximise potential recoveries.The Board is monitoring the provision made during the 2001 year. The information made available by the liquidatorsto date regarding potential returns to unsecured creditors is not considered to be sufficient for the Board to make anychange to the level of the provision.As at the date of this report the Directors are of the view that the potential for any recovery is still uncertain and thepolicy of providing against 100% of the estimated future recoveries due from these insurers is continuing.

Investment IncomeInvestment income is recognised on a time proportionate basis that takes into account the effective yield on thefinancial asset.

Other Financial AssetsInvestments are valued at net market value at balance sheet date. Investment income includes interest received andreceivable on investments and changes in net market values of investments in unit trusts. The schemes have adopted apolicy of investing in secure investments backed by fixed interest securities of amounts and terms broadly matching itsliabilities for claims and unearned contributions.

Comparative FiguresWhere necessary, comparative figures have been adjusted to conform with changes in presentation in the current year.



CONSOLIDATED2004

$2003

$$

2 CONTRIBUTION TO OPERATING SURPLUSCONTRIBUTION FROM INSURANCE ACTIVITIESPremium income 29,784,412 23,028,078Catastrophe insurance (22,511,076) (11,171,940)NET INCOME BEFORE CLAIMS 7,273,336 11,856,138Claims expense (Note 4(a)) (13,906,333) (18,479,170)Excesses and RecoveriesNET CLAIMS EXPENSEUNDERWRITING RESULTInvestment incomeReduction in Doubtful Reinsurance DebtsAdministration and general expensesINSURANCE ACTIVITY OPERATING SURPLUS / (DEFICIT)PARENT ENTITY SURPLUS / DEFICITOPERATING SURPLUS

12,561,825(1,344,508)

5,928,828674,730

36,946(3,960,689)

2,679,815(223,900)

2,455,915

16,551,875(1,927,295)9,928,843

680,595426,474

(2,718,310)8,317,602

(2,862,246)5,455,356


3 REVENUE FROM ORDINARY ACTIVITIES

2004$

2003$

2004$

2003$

REVENUES FROM ORDINARY ACTIVITIESSubscriptions/premiumsInsurance excesses and recoveriesBrokerage and Management Fees IncomeSeminars & sale of publicationsProject, sponsorship and management incomeGrant incomeTOTAL REVENUE FROM OPERATING ACTIVITIES

31,804,67512,561,825

1,092,588629,599461,355

2,269,16648,819,208

25,006,01616,551,875

937,537250,859144,953

3,088,88845,980,128

2,020,263-

1,092,588629,599813,354

2,269,1666,824,970

1,977,938-

937,537250,859446,953

3,088,8896,702,176

REVENUES FROM NON-OPERATING ACTIVITIESInvestment IncomeProceeds from Sale of Non Current Assets

879,586247,772

937,852245,681

204,856247,772

257,257245,681

TOTAL REVENUE FROM OUTSIDE THEOPERATING ACTIVITIESTOTAL REVENUE FROM ORDINARY ACTIVITIES

1,127,35849,946,566

1,183,53347,163,661

452,6287,277,598

502,9387,205,114

CONSOLIDATED

4a CLAIMS EXPENSESPaid

NOTE2004

$

17,193,571

2003$$

16,064,883Outstanding claims at end of financial year 13 63,882,156 67,169,394Outstanding claims at beginning of financial year (67,169,394) (64,755,107)TOTAL CLAIMS EXPENSES 13,906,333 18,479,170



CONSOLIDATED MAV - GENERAL FUND2004

$2003

$2004

$2003

$

4b OPERATING EXPENSESThe following items have been recognised in theoperating surplus (deficit):Claims expenseReinsurance ExpenseStamp DutyGeneral Scheme ExpensesSalary and Payroll CostsGrants, Projects and LegalAdministrationOperating lease rental expenseSuperannuation ContributionsScheme Management FeeMeetings and SeminarsWritten down value of Non- current assets disposed of.Depreciation Leasehold ImprovementsDepreciation Furniture and EquipmentDepreciation Motor VehiclesDepreciation Interactive Communications SystemAmortisation of Website and TrademarksBoard of Management ExpensesALGA MembershipTOTAL EXPENDITURE

13,906,33322,511,076

1,970,768251,590

1,802,7512,656,3241,051,133

14,000194,297

1,478,250667,243216,488

60,07590,58574,959

-27,082

179,315301,436

47,416,759

18,479,17011,171,9401,008,467

189,3511,374,6624,592,7382,321,623

18,766159,362

1,220,937439,322251,44577,00285,29869,2333,120

16,910116,860284,724

41,454,456

----

1,802,7512,656,3241,216,943

14,000194,297

-667,243216,488

60,07590,58574,959

-27,082

179,315301,436

7,501,498

----

1,374,6624,592,7382,339,568

18,766159,362

-423,821251,44577,00285,29869,2333,120

16,910116,860284,724

9,813,509

5 LEASING COMMITMENTSOperating lease commitments, being for lease ofcomputer and other equipment:Not later than one yearLater than one year but not later than five yearsTOTAL LEASE COMMITMENT

14,00021,00035,000

14,00035,00049,000

14,00021,00035,000

14,00035,00049,000

Operating lease commitments, being for lease ofleasehold premises:Not later than one yearLater than one year but not later than five yearsLater than five yearsTOTAL LEASE COMMITMENT

20,2131,366,3341,303,3072,689,854

112,4721,091,5361,598,4192,802,427

20,2131,366,3341,303,3072,689,854

112,4721,091,5361,598,4192,802,427

6 AUDITORS REMUNERATIONAmounts received or due and receivable for audit services:Audit ServicesOther Services

53,855-

37,9709,504

12,855-

14,8709,504




7 SCHEME MANAGEMENT FEES

2004$

2003$

2004$

2003$

Scheme management fees are paid to theScheme Manager for:

8

Risk Management and Administrative ServicesClaims managementTOTAL SCHEME MANAGEMENT FEES

NOTES TO STATEMENT OF CASH FLOWS

1,478,2501,209,4782,687,728

1,220,9351,102,8582,323,793

For the purposes of the Statement of Cash Flows, the Association considers cash to include cash in hand, cash at bank,certificates of deposit with short terms to maturity, bank bills and other financial assets.All of the surplus funds of the Civic Mutual Plus Scheme are invested at market rates with UBS Asset Management (Aust)Ltd in their Cash Enhanced Cash Fund and their Australian Bond Fund. Investments are brought to account at net marketvalue at balance date.

a Cash at balance date as shown in the Statement ofCash Flows is reconciled to the related items in theStatement of Financial Position as follows:


$2003

$2004

$2003

$CashOther financial assetsTotal Cash

10,708,6199,445,467

20,154,086

7,172,4339,300,349

16,472,782

3,318,973-

3,318,973

4,331,058-

4,331,058

b Reconciliation of Net Cash Provided by/(Used In)Operating Activities to Operating Surplus/(Deficit)Surplus (Deficit) for yearDepreciation &Amortisation

2,455,915252,566

5,455,356251,562

(223,900)252,566

(2,862,246)251,562

GAINS ON SALE OF:(Surplus)/deficit on disposal of assets (31,285) 5,764 (31,285) 5,764CHANGES IN ASSETS AND LIABILITIES(Increase)/decrease in accounts receivable(Increase)/decrease in plant & equipment(Increase)/decrease in intangible assets(Increase)/decrease in prepaymentsIncrease/(decrease) in accounts payableIncrease / (decrease) in provision for employee entitlementsIncrease/(decrease) in outstanding claimsIncrease/(decrease) in accrued revenueIncrease/(decrease) in LAS LiabilityCASH FLOWS FROM OPERATIONS

4,661,108--

(41,254)(210,634)

47,542(3,287,238)

409,000(253,851)

4,001,869

(8,880,600)3,103

(4,063)(10,385)520,53820,637

2,414,2876,755,219

253,8516,785,269

165,614--

(41,254)(514,450)

47,542-

(92,502)(253,851)(691,520)

(219,570)3,103

(4,063)(10,385)105,29620,637

-203,566253,851

(2,252,485)




NOTE2004

$2003

$2004

$2003

$

9 RECEIVABLESReinsurance and other recoveries receivable 1l 79,058,485 76,140,461Discount to Present Value (12,950,150) (10,492,281)

66,108,335 65,648,180Provision for Doubtful Reinsurance RecoveriesNet Reinsurance and other Recoveries ReceivableExcesses Recoverable

(7,188,040)58,920,295

4,935,966

(7,224,986)58,423,1945,719,273

Premiums receivable 1j 24,359,930 28,705,916Other ReceivablesTOTAL RECEIVABLES

459,38388,675,574

488,29993,336,682

508,235508,235

673,849673,849

REPRESENTED BY:CURRENTNON-CURRENTTOTAL

44,048,99244,626,58288,675,574

48,249,91245,086,77093,336,682

508,235-

508,235

673,849-

673,849

10 PREMIUMS IN ADVANCEContributions billed in advance 1i 29,205,209 28,703,707 - -

11 PROPERTY, PLANT AND EQUIPMENTLeasehold Improvements - at costLess accumulated depreciation

Furniture and Equipment - at costLess accumulated depreciation

Motor vehicles - at costLess accumulated depreciation

Web site and IntranetLess accumulated amortisation

Interactive Communications System - at costLess accumulated depreciation

TOTAL PROPERTY, PLANT AND EQUIPMENT

397,008343,041

53,967388,028306,603

81,425448,546

44,836403,710101,275

40,59860,677

287,913287,913

-599,779

385,008282,966102,042346,986216,018130,968362,05486,649

275,40557,65016,77540,875

287,913287,913

-549,290

397,008343,041

53,967388,028306,603

81,425448,546

44,836403,710101,275

40,59860,677

287,913287,913

-599,779

385,008282,966102,042346,986216,018130,968362,05486,649

275,40557,65016,77540,875

287,913287,913

-549,290




a Reconciliations

2004$

2003$

2004$

2003$

Leasehold ImprovementsMovements during the yearBeginning of yearAdditionsDepreciationEnd of year

102,04212,00060,07553,967

179,044-

77,002102,042

102,04212,00060,07553,967

179,044-

77,002102,042

Furniture and EquipmentMovements during the yearBeginning of yearAdditionsWrite OffsDepreciationEnd of year

130,96841,042

-90,58581,425

222,00515,83321,57285,298

130,968

130,96841,042

-90,58581,425

222,00515,83321,57285,298

130,968

Motor VehiclesMovements during the yearBeginning of yearAdditionsDisposalsDepreciationEnd of year

275,405419,751216,487

74,959403,710

372,189201,363229,87368,274

275,405

275,405419,751216,487

74,959403,710

372,189201,363229,87368,274

275,405

Interactive Communications SystemMovements during the yearBeginning of yearDepreciationEnd of year

---

3,1193,119

-

---

3,1193,119

-

Web site and IntranetMovement during the yearBeginning of yearAdditionsAmortisationEnd of year

40,87543,62523,82360,677

25,00032,65016,77540,875

40,87543,62523,82360,677

25,00032,65016,77540,875

12 INTANGIBLE ASSETSTrademarks and Intellectual PropertyLess accumulated amortisation

55,9833,259

52,724

4,063135

3,928

55,9833,259

52,724

4,063135

3,928



CONSOLIDATED

13 OUTSTANDING CLAIMSReported claims outstandingProvision for incurred but not reported claims,claims development and settlement costsDiscount to present valueTOTAL OUTSTANDING CLAIMSCOMPRISING:CurrentNon-CurrentTOTAL CLAIMS PROVISION

NOTE2004

$

29,454,174

47,117,002(12,689,020)

63,882,156

13,780,20250,101,95463,882,156

2003$

32,689,154

43,900,324(9,420,084)67,169,394

15,611,23251,558,16267,169,394

Actuarial advice indicates that:(a) The average term to settlement of outstanding claims is 4.9 years (2003: 4.9 years).(b) The following average inflation rates and discount rates were used in measuring the liability

for outstanding claims.

Inflation factorDiscount rate

1k 6.0%5.5%

6.0%4.5%

CONSOLIDATED

14 NET CLAIMS INCURRED

2004$

2003$

Allowance for claims settlement costsNet claims incurred: current financial year incidentsNet Claims Settlement CostsReassessment for prior years claimsNET CLAIMS INCURRED

1c 1,257,798164,991

1,209,478(1,287,759)

1,344,508

1,684,243391,196

1,102,858(1,251,002)1,927,295


$2003

$2004

$2003

$

15 PROVISIONS FOR EMPLOYEE ENTITLEMENTSThe aggregate amount of employee entitlementliability is comprised of:Provisions (Current)Provisions (Non Current)TOTAL EMPLOYEE ENTITLEMENTS

240,82598,097

338,922

219,26172,119

291,380

240,82598,097

338,922

219,26172,119

291,380

16 EquityBalance at beginning of YearSurplus (Deficit)from ordinary activitiesBALANCE AT END OF YEAR

10,231,9762,455,915

12,687,891

4,776,6205,455,356

10,231,976

3,937,136(223,900)

3,713,236

6,799,382(2,862,246)3,937,136



17 SUPERANNUATION CONTRIBUTIONThe Municipal Association of Victoria contributes in respect of its employees to both the Local Authorities SuperannuationFund’s LASPLAN and the Defined Benefits Fund.The amount of superannuation contributions paid by the Municipal Association of Victoria to the Local AuthoritiesSuperannuation Fund’s LASPLAN (or Accumulation Fund) and the Defined Benefits Fund during the reporting period was,$194,297 (2003 $159,362). The Municipal Association of Victoria contributes to LASPLAN based on a fixed percentageof employee earnings in accordance with the Superannuation Guarantee Legislation 9% in 2004 and 9% in 2003. Nofurther liability accrues to the employer as the superannuation benefits accruing to employees are represented by theirshare of the net assets of the Fund.Contributions to the Defined Benefits Fund are determined by the Scheme’s actuary. The Funds liability for accruedbenefits for defined benefit and defined contribution members was determined in the 31 December 2003 actuarialinvestigation carried out by Local Authorities Super pursuant to the requirements of Australian Accounting Standard AAS25. The actuarial investigation calculated the Unfunded Superannuation Fund Liability in the Defined Benefits to be $127million. The Municipal Association of Victoria’s portion of this unfunded superannuation liability, including contributionstax, was calculated to be $Nil (2003 $253,851)The Municipal Association of Victoria paid the unfunded superannuation liability during the year.

18 COMMITMENTS – UNEXPENDED GRANT MONIESThe Association receives grant monies from various Federal and State Government Departments on behalf of LocalGovernment. Grant monies received have been accounted for as income in accordance with Australian AccountingStandard 15 (AAS 15). At the end of the financial year the Association had commitments to expend grants totallingapproximately $2,103,090 (2003 $2,218,090) after deducting an estimate of costs of administering the grants.

19 FINANCIAL INSTRUMENTS INTEREST RATE RISK EXPOSUREThe Group’s exposure to interest rate risk and the effective average interest rate for the classes of financial assets is set outbelow:

CONSOLIDATED2004

MAV - GENERAL FUND

Non-InterestEarning

$

FloatingInterest

Rate$

Non-InterestEarning

$

FloatingInterest

Rate$

FINANCIAL ASSETSBankCash InvestmentsReceivablesTOTAL FINANCIAL ASSETSWEIGHTED AVERAGE INTEREST RATE

233,631-

88,675,57488,909,205

7,389,64612,530,809

-19,920,455

5.7%

233,631-

508,235741,866

-3,085,342

-3,085,342

5.86%

2004FINANCIAL LIABILITIESOutstanding claimsUnearned premiums/subscriptionsAccounts payableTOTAL FINANCIAL LIABILITIES

63,882,15629,316,273

3,371,75396,570,182

----

-111,064431,321542,385

----



CONSOLIDATED2003

MAV - GENERAL FUND

Non-InterestEarning

$

FloatingInterest

Rate$

Non-InterestEarning

$

FloatingInterest

Rate$

FINANCIAL ASSETSBankCash InvestmentsReceivablesTOTAL FINANCIAL ASSETSWEIGHTED AVERAGE INTEREST RATE

424,929-

93,531,78293,956,711

2,841,37513,206,479

-16,047,854

5.0%

424,929-

673,8491,098,778

-3,906,130

-3,906,130

4.4%

2003FINANCIAL LIABILITIESOutstanding claimsUnearned premiums/subscriptionsAccounts payableTOTAL FINANCIAL LIABILITIES

67,169,39428,907,2723,777,487

99,854,153

----

-203,565945,764

1,149,329

----

The carrying amounts of financial assets and financial liabilities represent their approximate net fair value.

19 FINANCIAL INSTRUMENTS INTEREST RATE RISK EXPOSURE (CONTINUED)

Credit Risk ExposureThe maximum credit risk exposure on financial assets is represented by the carrying amounts of assets recognised in theFinancial Position.

Concentrations of Credit RiskReceivables due from Debtors in specific industry segments expressed as a percentage of the total balance receivable:

INSURANCE MAV - GENERAL2004 2003 2004 2003

State GovernmentLocal GovernmentReinsurersOther

-38%62%

-37%63%

3%25%

-72%

11%53%

-36%

Apart from the foregoing, the entity had no significant concentrations of credit risk with any single ‘counter-party or groupof counter-parties’.


SEGMENT

Insurance

Grants

Association

20 SEGMENT INFORMATION – PRIMARY SEGMENT

TYPES OF PRODUCTS AND SERVI

Insurance including Public Liability, Professional Liability, Product Liability and Fide

Obtains Federal and State Government grants and expends these grants on projects for the betterment of both local government and the co

Local Government Industry group and represents and provides support to Local Government and its comm

LOCAL GOVERNMENT

2004$

OPERATING REV

Sales to Customers outside the

Inter-segment

TOTAL SEGMENT RE

TOTAL CONSOLIDATED R

SEGMENT R

CONSOLIDATED ENTITY S

FROM ORDINARY ACTI

2003$

40,260,548

48,390

40,308,938

8,317,602

2004

2003

2004$

3,266,268

-

-4,453,293

822,308

2003$

3,636,845

662,163

2004

2003

2004$

2003$

43,020,968

64,338

43,085,306

2,679,824

2,472,305

2,472,305

(262,389)

49,946,566

3,266,268

(2,621,321)

5,275,601

38,479

4,299,008

12,685

47,163,661

(886,646)

(710,553)

(886,646)

(710,553)

49,946,566

47,163,661

-

(253,610)2,455,914

5,455,356

2,455,914

5,455,356

ASSET

Segment Asse

TOTAL ASS

105,068,535 104,999,657

2,401,234

3,154,6052,352,339

2,523,341

(225,113)

(241,342) 109,596,995 110,436,261

109,596,995 110,436,261

LIABILITI

Segment Liabilit

TOTAL LIABILI

OTHER SEGMENT INFORM

Acquisition of property, plan

equipment and other non current

Depreciatio

96,093,876

98,704,823

283,002

773,977

757,339

966,827

(225,113)

(241,342)96,909104 100,204,285

96,909,104 100,204,285

--

--

47,305

11,642

33,981

9,926

521,032

241,059

219,928

241,636

--

--

568,337

252,701

253,909

251,562

BUSINESS SEGMENT

INSURANCE

GRANT

ASSOCIATION

ELIMINATIONS

CONSOLIDATE

CONSOLIDATED FINANCIAL STATEMENTSNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2004



21 INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)The Australian Accounting Standards Board (AASB) is adopting IFRS for application to reporting periods beginning on orafter 1 January 2005. The AASB will issue AASB equivalents to IFRS, and Urgent Issues Group Abstracts corresponding toInternational Financial Reporting Interpretations adopted by the International Accounting Standards Board. The adoptionof IFRS will be first reflected in the economic entity’s financial statements for the year ending 30 June 2006. Uponadoption of IFRS, entities will be required to restate their comparative financial statement to amounts reflecting theapplication of IFRS for the comparative period. This will require adjustments to be made, retrospectively, against openingretained earnings as at 1 July 2004.As at the date of this Report, analysis of a significant number of the IFRS implications has been undertaken. This analysishas identified a number of accounting policy changes that will be required. In some cases, choices of accounting policiesare available including elective exemptions under AASB 1, “First time adoption of Australian International FinancialReporting Pronouncements”. Some of these choices are still to be analysed to determine the most appropriate accountingpolicy for the economic entity.Major changes identified to date that will be required to the economic entity’s existing accounting policies include thefollowing:

a

b

c

Insurance ContractsRevised Accounting Standard AASB 1023 “General Insurance Contracts” defines an insurance contract and requiresadditional disclosures. The main accounting changes are the requirement to include a prudential margin on insuranceliabilities, the introduction of an adequacy test for insurance liabilities and an impairment test for reinsurance assets. Theentity has a long held policy of maintaining prudential margins in outstanding claims and a robust approach to thevaluation of insurance liabilities and reinsurance assets and therefore no significant impact is expected. The fundamentalchanges to insurance recognition and measurement proposed in phase II of the IASB insurance contracts project due in2007 are being monitored.

InvestmentsThe AASB has prescribed that insurance companies must account for assets backing insurance liabilities at “fair valuethrough the profit and loss account” being one of the options available in Accounting Standard AASB 139, “FinancialInstruments: Recognition and Measurement.” This is consistent with current policy of taking market value movementsthrough the statement of financial performance. However, changes to this standard are being considered and their impacton the financial statements of the combined entity will be assessed when the exposure draft is finalised.

Employee EntitlementsEmployee entitlements (other than long service leave) were measured at their nominal amount expected to be paid outirrespective of the expected date of payment. In future, all employee entitlements in excess of 12 months will bediscounted.The above should not be regarded as a complete list of changes in accounting policies that will result from the transitionto Australian equivalents to IFRS. Not all standards have been fully analysed at this time and decisions have yet to bemade where choices of accounting policies are available. For this reason it is not possible to quantify the impact of thetransition to Australian equivalents to IFRS on the consolidated financial position and reported results of the Association.The Management of the Association with the assistance of the Association’s advisers is to develop a process to ensurecompliance with IFRS. This process is to be overseen by the Association’s Audit Committee.



22 RELATED PARTIESThe Municipal Association of Victoria is a body corporate established under the Municipal Association Act of 1907 toprovide services for and the representation of Local Government authorities in Victoria. The Association and its wholly-owned controlled entities trade with its members in the normal course of business and on an arm’s length basis. Thediscreet nature of these transactions is not material. There were no material related party transactions during the year.DirectorsMembers During The YearB A Matheson(Resigned 17 June 2004)P H Watts (Ceased 5 July 2003)R J FyffeE Johnstone (Ceased 5 July 2003)J V ChandlerJ DaleS. Alessi (Elected 5 July 2003)M O’SheaG Hayes (Ceased 5 July 2003)

D. Cameron (Elected 5 July 2003 ceased March 2004)J. Ryan (Elected 5 July 2003)J. Eisenbise (Elected 5 July 2003)R. Perry (Elected 5 July 2003)G. Lake (Elected 5 July 2003)C. Papas (Elected 5 July 2003)G. Davey (Elected April 2004)D. Argall (Elected 5 July 2003)


$2003

$2004

$2003

$

Remuneration of DirectorsTotal Income received or receivable by Directors 179,315 116,860 179,315 116,860

MAV - GENERAL FUND

Number of Directors of parent entity whose total income falls within the following bands:

2004$

2003$

$0 - $9,999$10,000 - $19,999$40,000 - $49,999

Loans to DirectorsNo loans were made to or are payable by Directors.

Other TransactionsThere were no other material transactions with Directors.


1511

1511

STATEMENT BY DIRECTORS

In the opinion of directors of The Municipal Association of Victoria:(a) the accompanying Statement of Financial Performance is drawn up so as to give a true and fair view of the surplus of

the association for the year ended 30 June 2004;(b) the accompanying Statement of Financial Position is drawn up so as to give a true and fair view of the state of affairs of

the association as at that date;(c) at the date of this statement there are reasonable grounds to believe that the association will be able to pay its debts as

and when they fall due; and(d) the accompanying Consolidated Financial Statements give a true and fair view of the matters with which they deal.

The financial statements and consolidated financial statements have been made out in accordance with applicableAccounting Standards and other mandatory professional reporting requirements.Signed in accordance with the resolution of directors.

Geoff Lake President

Melbourne3rd December 2004


John Chandler Director

CONSOLIDATED FINANCIAL REPORTS -INDEPENDENT AUDIT REPORTINDEPENDENT AUDIT REPORTTo the members of the Municipal Association of Victoria

ScopeWe have audited the financial report of the Municipal Association of Victoria for the financial year ended 30 June 2004as set out on pages 3 to 23. The financial report includes the consolidated entity comprising the Municipal Association ofVictoria and the entities it controlled at the year’s end or from time to time during the financial year. The MunicipalAssociation of Victoria’s directors are responsible for the financial report. We have conducted an independent audit of thisfinancial report in order to express an opinion on it to the members of the Municipal Association of Victoria.Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurancewhether the financial report is free of material misstatement. Our procedures included examination, on a test basis, ofevidence supporting the amounts and other disclosures in the financial report, and the evaluation of accounting policiesand significant accounting estimates. These procedures have been undertaken to form an opinion whether, in all materialrespects, the financial report is presented fairly in accordance with Accounting Standards and other mandatoryprofessional reporting requirements and statutory requirements so as to present a view which is consistent with ourunderstanding of the Municipal Association of Victoria’s and the consolidated entity’s financial position, and performanceas represented by the results of their operations and their cash flows.The audit opinion expressed in this report has been formed on the above basis.

Audit OpinionIn our opinion, the financial statements present fairly in accordance with Accounting Standards and other mandatoryprofessional reporting requirements the financial position of the Association and the Consolidated entity as at 30 June2004 the results of their operations and their cash flows for the year then ended.

PKF R. A. Dean PartnerChartered AccountantsA Victorian Partnership

3rd December 2004Melbourne


OTHER INFORMATION

Legal FormThe Municipal Association of Victoria is an Association Incorporated by the Municipal Association Act 1907

DomicileMelbourne, Australia

Address of Registered Office and Principal Place of Business:Level 12, 60 Collins Street, Melbourne, 3000, Victoria, Australia

Nature of the Operation and principal activities:The Municipal Association of Victoria represents, promotes and supports the interest of Victorian local governments andtheir communities.

EmployeesAverage number of equivalent full time employees during the year is 26.5 EFT.


Documents

2003 – 04 annual report - mav.asn.au · Web viewThe most extensive overhaul of the Local Government Act since its inception in 1989 occurred in 2003/04. Reforms that