MUNICIPAL ASSOCIATION OF VICTORIA Annual Report 2005
CONTENTS
Year in Review
President’s Report
MAV Board
CEO’s Report
MAV Governance
Economic & Finance
Environment
General Projects
Health & Human Services
Governance, Training & Relationships
Planning
Transport & Infrastructure
Communications & Information
Human Resources
MAV People
Committees
Financial Overview
Guide to the Financials
Glossary
Financial Report
2
4
6
8
10
12
14
16
18
21
24
26
28
29
30
32
34
36
38
39
LEADING THE WAY TO A BETTER FUTURE
PURPOSE To promote the
efficient carrying out of
municipal government throughout
the state of Victoria and to
watch over and protect the
interests, rights and privileges
of municipal corporations
AIM To be a world class
peak body for world class
local government
OBJECTIVE To be the
representative and influential
collective voice of local
government
year in
review
This was another year of concerted
effort and significant achievement…
a year in which a raft of new services
and programs were initiated and the
effectiveness of existing initiatives
was acknowledged with renewed
funding.
New Board settled and working well
Several changes to Board representation occured over the year.
Elections were held in August 2004 for a new President and in
September 2004 to fill the vacancy created by this appointment. The
February 2005 Board elections saw five new Board members elected
for two-year terms, and a further appointment in June 2005. The
new Board members have settled into their roles and are working
well and productively towards common and specified goals.
R2R funding renewed and increased
The MAV campaigned strongly throughout the year for renewal of
the highly successful R2R program. The Association’s efforts were
rewarded with an additional allocation of $1.35 billion per annum
to roads nationally over next four years to 2008/09.
MAV/HACC program partnership a first
PERIN powers to be upgraded
The MAV’s Home and Community Care (HACC) campaign had a
dual focus this year – to increase Federal and State Government
investment and to improve the efficiency and effectiveness of new
and existing programs. A definite highlight for the year was the
brokering of a program partnership agreement with the Department
of Human Services – the first time such an agreement on planning,
policy and provision of HACC services had been achieved.
Significant progress was made during the year on the review of the
Penalty Enforcement by Registration of Infringement Notice (PERIN)
system. Having received an in-principle agreement from the State
Government, the MAV anticipates the introduction of a range of
improved enforcement powers for the Sheriff’s office in late 2006.
Massive increase in immunisation funding
After a sustained and determined period of lobbying, the MAV was
successful in obtaining State Government funding of an additional $1.3
million per annum for delivery of immunisation services. This represents
a significant increase of almost 50 percent on current funding.
2
MAV ANNUAL REPORT 2004/5
Local ECO-Buy program attracts
international award
In recognition of the outstanding work undertaken to promote the
purchase of environmentally-friendly products, the innovative local
government ECO-Buy green purchasing program attracted a range
of awards during the year, including the United Nations World
Environment Day Award.
Safeguarding the financial sustainability
of local government
In September 2004 the Federal Government announced the
abolition of the National Competition Policy (NCP) payments to State
Governments. In response, the MAV stepped up its campaign to
ensure that local government retained access to incentive payments.
Throughout the year the MAV also continued to advocate, through
the Australian Local Government Association, on behalf of Victorian
councils to negotiate an Intergovernmental Agreement. Through this
process, the MAV’s aim is to reduce the cost burden increasingly
borne by local government on behalf of the Federal and State
Governments. The Agreement is currently being produced for
consideration at the Local Government and Planning Ministers’
Council in March 2006.
The position adopted by the MAV has national support across all
local government associations.
Ensuring the best possible outcomes for
Melbourne 2030
This year the MAV’s Melbourne 2030 focus was on the key issues of
public transport and infrastructure funding, consistency of advice and
support from DSE and the State Government, and better
communication to build community understanding and ownership of
the Melbourne 2030 framework.
MAV takes the lead in wise water
management
Now in its third year, the MAV’s Clearwater program is widely
recognised as a leader in the delivery of professional development
programs. In 2004/05, Clearwater conducted a range of innovative
education and training programs which addressed the issue of
sustainable urban stormwater management. The programs were
attended by every council in Victoria.
MAV only local government body
to receive Australian Financial
Services Licence
In April 2005, Australian Securities and Investment Commission
(ASIC) granted MAV an Australian Financial Services Licence (AFSL).
The licence entitles the MAV to provide public liability and fidelity
insurance services and to operate as an independent insurance business
on an equal commercial basis with general insurance organisations.
Conferences and training programs
delivered on multiple fronts
The MAV hosted a number of successful conferences and delivered a
range of professional development training programs and specialpurpose policy forums during the year. These included the Asset
Management Conference, the Future of Local Government Summit,
the Councillor Development Weekend, the Councillor Fundamentals
Development Program and, of course, the MAV Annual Conference.
MAV ANNUAL REPORT 2004/5
3
PRESIDENT’S REPORT
“…strong organisations don’t balk in
the face of change. They embrace it,
taking the opportunity to review, then
improve their performance.”
Whichever way you look at it, 2004/05 was a challenging year for
the MAV. But strong organisations don’t baulk in the face of change.
They embrace it, taking the opportunity to review, then improve their
performance. And if this year taught us anything, it’s that the MAV is
both strong and resilient.
We not only experienced changes to the Board, but to our staffing
structure. This resulted in an eventual increase in staff numbers,
including the first-time appointment of a Director of Policy and
Programs and new staff working on programs for water, volunteering
and Melbourne 2030. We also experienced a baby boom, with three
key staff members taking maternity leave.
4
MAV ANNUAL REPORT 2004/5
Our focus, as outlined in the Strategic Direction document adopted
in May 2005 by State Council, was to improve accessibility and
strengthen our links to member councils. We did this in a carefully
planned, three-stage process.
The first step was to undertake a systematic review into the way we
collect and collate information. We then hit the road to hear, first
hand, the views of councils throughout the state, and to receive their
feedback on the issues they face on a daily basis. Finally, we set in
train the processes needed to work collaboratively and effectively to
achieve positive outcomes for the sector as a whole, to share
information, and to build our networks.
In November 2004 I was elected Vice President of the Australian
Local Government Association. This presents the MAV and Victorian
councils with an opportunity to have our interests heard in the
national arena, and to ensure that the peak body responsible for
local government in Australia is well positioned and informed to
advocate for our interests. At a time when the Federal Government
has telegraphed its intention to build a positive relationship with
local government nationally, there has never been a better time to
assume such an influential position within the executive of the
national local government organisation.
Back in Victoria, significant progress was made on a range of
important programs aimed at building the capacity of member
councils to grow and thrive within the current social, economic and
political environment.
Throughout the year, the MAV has taken a leading role in improving
local government practices and lowering costs and risks on a range
of fronts, including IT, community volunteering, rural and urban
water management, indigenous affairs, programs for youth and the
unemployed, maternal and child health, disability access and
inclusion, and planning – both in rural Victoria and in relation to
Melbourne 2030.
This has been achieved through the development of new – and
the refinement of existing – policies and strategies, and supported
by the hosting of ongoing professional development programs for
councillors and staff.
2005/06 will see the MAV working on a united front with member
councils to deliver the goals set out in the Strategic Plan. The Board
has already commissioned a comprehensive review of the structure,
roles and Rules of the MAV. Following consultation and feedback
from member councils, an options paper will be circulated early in
the New Year, with resulting amendments to be taken to State
Council for debate and resolution in 2006.
Work is also underway to address existing and anticipated work force
challenges confronting the sector, to negotiate on behalf of Victorian
councils – through the ALGA – for an acceptable Intergovernmental
Agreement, and to meet our ongoing commitment to lobby for a
better funding deal for local government.
My thanks to the MAV CEO, Board and staff for their continued
support, commitment and hard work during the year. I would also
like to thank Victorian member councils for supporting us over the
past 12 months, for providing the essential information, data and
advice which enables the MAV to develop robust positions and
advocate for better outcomes from all levels of government.
GEOFF LAKE PRESIDENT
MAV ANNUAL REPORT 2004/5
5
THE
MAV
BOARD
AS AT 30 JUNE 2005
CR GEOFF LAKE
CR JENNY DALE
CR SAM ALESSI
Monash City Council
Indigo Shire Council
Whittlesea City Council
MAV PRESIDENT
Councillor Monash City Council 2000 to
current. Mayor Monash City Council
2002-03 and 2003-04.
DEPUTY PRESIDENT MAV
MAV Board Representative Rural North
East Region. Councillor Indigo Shire
Council 1997 to current. Mayor Indigo
Shire Council 1997-99 and 2003-04.
Deputy Mayor Indigo Shire Council
1999-00. Board Member Australian Local
Government Association (ALGA). State
President Australian Local Government
Women's Association-Victorian Branch
(ALGWA). Advisory Board Member La
Trobe University. Councillor La Trobe
University. Member Roads Corporation
Advisory Board. Board Member Victorian
Association of Health and Extended Care.
Awarded to State Government Honor Roll
of Victorian Women 2005.
MAV Board Representative Interface
Region. Councillor Whittlesea City
Council 1997 to current. Mayor
Whittlesea City Council 1997-98,
2000-01, 2004-05. Chair MAV Transport
and Infrastructure Advisory Group.
Member MAV Library Working Party.
Chair City of Whittlesea Responsible
Gaming Forum. Council Representative
Whittlesea Community Connections
Committee of Management. Board
Member Yarra Plenty Regional Library
Services Board of Directors.
Representative Whittlesea YMCA Board
of Directors. Council Representative
Interface Councils Group.
BOARD MEMBERS NOT PICTURED
WHO HELD OFFICE IN 2004-05
CR JOSEPH CUTRI
CR ROD FYFFE
Maribyrnong City Council
Greater Bendigo City Council
RAE PERRY
MAV Board Representative Metro West
Region. Councillor Maribyrnong City
Council 1997 to current. Mayor
Maribyrnong City Council 2001-02,
2004-05. Chair MAV Humans Services
Portfolio Committee. Member
Braybrook/Maidstone Public Housing
Redevelopment. Member Maribyrnong
Pool Planning Committee.
MAV Board Representative Rural North
Central Region. Councillor Greater
Bendigo City Council 1996 to current.
Mayor City of Greater Bendigo 2003-05.
Member MAV Insurance Committee. Chair
MAV Library Working Party. Member State
Library Public Libraries Advisory
Committee. Member Ministerial Advisory
Council on Libraries. Chair Regional Cities
Victoria. Chair Central Victorian
Greenhouse Alliance. Member Bendigo
Easter Festival Committee. Member
Bendigo Mining Environmental Trust.
Board Member Metropolitan Central Region
JULIE EISENBISE
Board Member Metropolitan Region
JIM RYAN
Board Member Rural South West Region
CHRIS PAPAS
Board Member Metropolitan Western Region
GEOFF DAVEY
Board Member Rural Gippsland Region
CLARE O’NEIL
Board Member Metropolitan Southern Region
6
MAV ANNUAL REPORT 2004/5
CR JEFF AMOS
CR DARRYL ARGALL
CR JOHN BRUCE
CR JOHN CHANDLER
Wellington Shire Council
Hindmarsh Shire Council
Manningham City Council
Stonnington City Council
MAV Board Representative Gippsland
Region. Councillor Wellington Shire
Council 2003 to current. Mayor Wellington
Shire Council 2004-05. Deputy Mayor
Wellington Shire Council 2005-06. Member
MAV Professional Development Reference
Group. Life Member Apex Australia.
Secretary Yarram Country Club Bowls.
Executive Member Yarram Genealogy
Group Inc. Council Representative Timber
Towns Victoria. Member Tarra Festival
Organising Committee. Member Victorian
Institute of Teaching. Member West
Gippsland Catchment Management
Authority Community Consultative
Committee. Member WGCMA Biodiversity
Portfolio Group.
MAV Board Representative of Rural
North West Region. Councillor
Hindmarsh Shire Council 1997 to current.
Mayor Hindmarsh Shire Council 1997-99
and 2004-05. Chair MAV Strategic
Environment Advisory Group. Member
North West Municipalities Association.
Member Wimmera Catchment
Management Authority (WCMA) Board.
Member WCMA Communication
Committee. Member Gerang Landcare
Group. Member Hindmarsh Landcare
Network. Member Gerang Fire Brigade.
MAV Board Representative Metro East
Region. Councillor Manningham City
Council 1997 to current. Mayor
Manningham City Council 2002-03.
Member MAV Economics & Finance Advisory
Group. Member MAV Melbourne 2030
Reference Group. Member MAV Planning
Advisory Group. Member Good Governance
Advisory Group. Member Royal Australian
Planning Institute. Member Australian Institute
of Company Directors. Vice President
Stormwater Industry Association Victoria.
Chair Melbourne Valley of the Arts Tourism
Marketing Board. Council Representative
Department of Infrastructure North East
Integrated Transport Strategy.
MAV Board Representative Metro South
East Region. Councillor Stonnington City
Council 1996 to current. Mayor
Stonnington City Council 1996-97. Chair
MAV Economics and Finance Advisory
Group. Member MAV Audit Committee.
Member Australian Building Codes Board
(ABCB). Member ABCB Building Access
Policy Committee. Member ABCB Energy
Efficiency Steering Committee.
CR DICK GROSS
CR BRENDA HAMPSON
CR NAIM MELHEM
CR MAX O’SHEA
Port Phillip City Council
Moyne Shire Council
Hepburn Shire Council
MAV Board Representative Metro Inner
Region. Councillor City of Port Phillip
1996 to current. Mayor City of Port Phillip
1998-2000. Member MAV Insurance
Committee. Chair City of Port Phillip
Statutory Planning Committee. Member
Towards Zero Waste Advisory Committee.
Vice President Association of Waste
Management Groups of Victoria. Deputy
Chair Western Region Waste Management
Committee. Member St Kilda Edge
Committee. Member Metropolitan
Transport Forum.
MAV Board Representative Rural South
West Region. Councillor Moyne Shire
Council 1999 to current. Mayor Moyne
Shire Council 2002-05. Board member
South West Sports Assembly. Member
Deakin University Reference Group
Warrnambool Campus. Chair Barwon
South West Regional Drug and Alcohol
Coalition. Chair Mortlake Community
Development Committee. Assistant
Secretary Deakin University Football/
Netball Club. Chair South West Regional
Transport Taskforce.
Greater Dandenong
City Council
MAV Board Representative Metro
Southern Region. Councillor Greater
Dandenong City Council 1997 to current.
Mayor Greater Dandenong City Council
1999-00. Board Member Southern Health.
Member Audit Committee Southern
Health. Board Member Antiochan
Orthodox Christian Archdiocese of
Australia and New Zealand.
MAV Board Representative Rural South
Central Region. Councillor Hepburn Shire
Council 1997 to current. Mayor Hepburn
Shire Council 1998-2001. Chair MAV
Planning Advisory Group. Chair MAV
Professional Development Reference
Group. Member MAV/VicRoads Liaison
Group. Member Daylesford Secondary
School Council. Chair Central Highlands
Regional Library Corporation.
MAV ANNUAL REPORT 2004/5
7
CEO’S REPORT
“2004/05 was the year we stopped
momentarily, looked at where we’ve
been, mapped out where we’re
heading, and made sure everything
was in place… to continue
representing the interests of local
government…”
After several years consolidating our position as the peak local
government body in Victoria, 2004/05 was the year we stopped
momentarily, looked at where we’ve been, mapped out where we’re
heading, and made sure everything was in place – a strong
organisational structure, efficient systems and professional staff – to
continue representing the interests of local government in the most
effective way.
8
MAV ANNUAL REPORT 2004/5
Sustained lobbying at both State and Federal levels resulted in
several wins for local government in the areas of community care,
immunisation, road funding and financial sustainability. We
successfully argued for and gained an additional $1.3 million
per annum for the delivery of immunisation services, and got
the final sign-off on the Home and Community Care (HACC)
program partnership agreement – a first in the area of planning,
policy and provision of HACC services. We campaigned strongly
for the renewal of the highly successful Roads to Recovery (R2R)
program which also resulted in the allocation of a further
$1.35 billion nationally to roads over the next four years. And as
part of the ongoing review of the Penalty Enforcement by Registration
of Infringement Notice (PERIN) system, we obtained an in-principle
agreement from the State Government to introduce a range of
improved enforcement powers for the Sheriff’s office in 2005.
Always keeping one step ahead of the game by identifying the issues
that will impact on the Victorian community and therefore local
government, we instigated or contributed to a range of reviews and
studies. This year we particularly turned our attention to the areas of
transport, planning and infrastructure, producing several important
strategy and issues papers for discussion at all levels of government.
2004/05 was also a year of great upheaval and change. In the
wake of Cr Brad Matheson’s highly publicised resignation, we
experienced two presidential elections, a Board by-election in late
2004, and the biennial Board election in February 2005. We also
saw significant movement of key MAV staff – three went on maternity
leave, one was seconded to work for the Department of Premier and
Cabinet, and another left to work with the State Government.
Each of these changes was necessarily accompanied by a period
of adjustment, where the organisation forged new relationships,
created new partnerships, and accommodated new visions and
directions. No mean task! I’m happy to say, however, that despite
all this, we made significant progress on a range of important
issues during the year.
One of our major achievements was undoubtedly the granting of the
Australian Financial Services Licence by ASIC in April 2005. The
licence is crucial in that it legitimises MAV’s right to operate as an
independent insurance business – on an equal commercial basis
with general insurance organisations – to provide public liability and
fidelity insurance services. The fact that the MAV is the only
government organisation to be granted the licence is something we
are particularly proud of.
We continue to work closely with councils to support them in dealing
with current issues as well as identifying those that will potentially be
the issues of the future. One of the many important areas we have
paid a great deal of attention to in recent years is environmental
management. So it is with great pleasure that our work in local
government green purchasing through the ECO-Buy program was
again recognised by several awards including the United Nations
World Environment Day Award.
Our efforts too in the area of insurance for local government have
also been strong this year. We registered an overall surplus of
$10.1 million for MAV insurance, as well as locking in a
favourable reinsurance agreement that makes the most of the
benefits of tort reform.
But none of this would have been possible without the
commitment and hard work of the MAV Board and the wonderful
people who make up our staff. Their energy and innovation on
numerous projects not only ensures that local government has a
strong voice where it counts, but is able to carry out its work
efficiently and effectively.
ROB SPENCE CEO
MAV ANNUAL REPORT 2004/5
9
MAV governance
Structure and accountabilities
A range of structures and accountabilities defined in legislation, rules and
protocols, governs the way the MAV operates and makes decisions.
2005, the Board determined not to hold a by-election to fill these
vacancies.
Municipal Association Act 1907
The Act established the MAV as a corporation. It requires the MAV to
provide a public liability scheme for local government, and
empowers it to provide fidelity insurance for the sector.
In the February 2005 Board elections, five new Board members were
elected for a two-year term.
The Act defines the purpose of the MAV as being to promote the
efficient carrying out of municipal government throughout the state
of Victoria and watch over and protect the interests, rights and
privileges of municipal corporations.
The MAV Rules
Approved by Governor in Council, the MAV Rules outline the role,
function and operation of the Association, its State Council and
Management Board.
State Council
State Council meets twice yearly and is comprised of a representative
(councillor) of each financial member council of the MAV. State
Council elects the MAV Board of Management, sets the strategic
direction of the Association, and appoints the MAV auditor.
A final change occurred in May 2005 with Cr O’Neil resigning her
position. A by-election was conducted in the Metropolitan Southern
Region, with Cr Naim Melhem elected uncontested in June 2005.
New advisory committee structure
In 2004/05, the MAV Board reviewed its advisory structures,
confirmed existing roles, and established a number of new
committees in recognition of the breadth and complexity of the
issues confronting local government and member councils’ needs. As
well as providing advice to the Board, the new structure assists in the
development of policies and strategies and provides networking and
development opportunities to councils. Each committee is chaired by
a Board member who is accountable for keeping the Board
informed of committee activities and recommendations.
MAV advisory committees
· Human Services Portfolio Committee
· Strategic Environment Advisory Group
MAV Management Board
· Planning Advisory Group
In accordance with the Rules of the MAV, the Management Board is
· Economics and Finance Advisory Group
comprised of 12 members, each elected by a geographic region.
· Strategic Transport and Infrastructure Group
The 13th member, the MAV President, is elected at large. The Board
· Professional Development Reference Group.
has responsibility for the conduct of the affairs of the Association. It
is responsible for setting the budget and subscription levels, defining
MAV Strategic Plan
the detail of the policy and strategy direction of the MAV, and
appointing the CEO who, in turn, is responsible for day-to-day
Planning and reporting cycle
management of the Association.
Janaury
February/
Board changes
During the 2004/05 reporting period, there was significant change to
the MAV Management Board. In June 2004, the then President, Brad
Matheson, resigned. Deputy President, Jenny Dale, was appointed by
the Board to act in the capacity of Acting President until the
Presidential election was conducted. The MAV membership elected
existing Board member, Cr Geoff Lake as President in August 2004.
A by-election for the Metropolitan Southern Region was then held to
fill the vacancy created by Cr Lake’s appointment as President. Cr
Clare O’Neil from Greater Dandenong was elected to fill the
position in September 2004.
Council elections held in November 2004 also impacted on the
Board. Cr Rae Perry was unsuccessful in her bid for a further term as
councillor and was therefore ineligible to continue as a Board
representative, and Cr Jim Ryan did not recontest his council’s
election. Cr Julie Eisenbise resigned from the Board in December
2004. With the biennial Board elections due to be held in February
10
MAV ANNUAL REPORT 2004/5
Issues identification
and data collation
undertaken by
MAV staff
March
Regional
meetings with
membership
April
MAV Board
strategy session
November
State Council –
report back to
members
October
Annual report on
achievements
May
State Council
adoption of work
plan by
membership
The planning and reporting cycle outlines the process undertaken
annually by the MAV. As a result of Board elections occurring in
February, this process was delayed in 2005. Consequently, regional
meetings usually held in February and March occurred in March and
April, the Board workshop was held in May, and the work plan was
sent out for consideration by State Council just prior to its meeting.
In 2006 normal timing will be followed to ensure adequate time for councils
to consider the draft work plan prior to its adoption at State Council.
Board allowances
In accordance with the MAV Board Expense and Allowance Policy,
Board members receive an annual allowance paid quarterly in
advance, and are able to claim for out-of-pocket expenses for travel,
parking, accommodation and meals.
Board allowances for 2004/05 were as follows
· President $46,500
Review of MAV Rules
In response to a State Council request, the Board undertook to
conduct a comprehensive review of MAV Rules. This process has
commenced and it is anticipated that redrafted Rules will be
presented to a State Council in 2006 for approval.
· Deputy President $9,750
· Board member $6,500.
Allowance and expense payments made to Board members in
2004/05
Risk management
To further improve the management of risks, the Board appointed
an audit committee comprised of an independent chair, two
independent members and two Board members. The committee
has commenced work on risk identification and the development
of a work plan.
Sam Alessi
Jeff Amos
Annual
Allowance
$6,500
Travel and/
or parking
$605
$2,167
$339.16 1
Darryl Argall
$6,500
$7,081.762
John Bruce
$2,167
John Chandler
$6,500
Joseph Cutri
Accommodation TOTAL
and meals
$7,105
$440.46
$2,946.62
$3,607.90 $17,189.66
-
$384.4
$2,167
-
-
$2,167
-
$6,884.40
-
$2,167
At the May 2005 State Council meeting, following recommendation
from the MAV Board, it was resolved that expressions of interest be
called for the external auditor. It was considered timely that this
appointment be reviewed. A recommendation is planned for the
October State Council.
Jenny Dale
The MAV Insurance Committee continues to provide support and
advice to the MAV Board on the management of the public liability
and fidelity insurance schemes. This committee is independently
chaired and, in addition to industry experts, comprises
representatives from local government and the MAV Board.
Geoff Lake
Board meeting attendance
The above amounts do not correlate to the allowance and expense payments figures in
the financial statements as this includes some payments made to Board members for
expenses incurred in 2003/04 and claimed in 2004/05. Some expenses are also
charged to other areas in the MAV accounts.
Payments were either made direct to Board members, to their council for travel where
they have utilised a council fleet vehicle, or directly to the hotel for some
accommodation expenses.
It should be noted that some Board members will lodge claims after 30 June 2005,
details of which will be reflected in the 2005/06 annual report.
Sam Alessi
July Aug Sept
✔ ✔ ✘
Oct Nov Dec
✘ ✔ ✔
Feb Mar April May June
✔ ✔ ✔ ✔ ✔
$17,442.313
$5007.604
Geoff Davey
$4,333
$936.92
Julie Eisenbise
$3,250
Rod Fyffe
$6,500
Dick Gross
$2,167
-
-
$2,167
Brenda Hampson
$2,167
-
-
$2,167
$40,048.40
$1,860.72 $24,310.63
$479.50
-
$4,190.70
$3,123
Max O’Shea
$6,500
Chris Papas
$4,333
$1,052.84
Rae Perry
$3,250
$1,325.756
Jim Ryan
$3,250
$3,250
- $10,690.70
$1,272.88
Clare O’Neil
$5,749.42
-
$2544.24 $43,865.525
-
$2,699.04
-
$3,123
$1,613.35 $10,812.39
$1988
-
$5,385.84
$6,563.77
-
$3,250
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✔
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✔
✔
✔
✔
✔
✔
✔
✘
✔
✔
✔
✔
✔
Jenny Dale
✔
✔
✔
✔
✘
✔
✔
✔
✔
✔
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2 Paid to Hindmarsh Shire Council for use of council vehicle
Geoff Davey5
✔
✘
✔
✔
✔
✘
✔
-
-
-
-
Julie Eisenbise 4
✔
✔
✔
✔
✔
✔
Rod Fyffe
✔
✔
✔
✔
✔
✘
✔
✘
✔
✔
✔
3 Includes component of Presidential allowance while Acting President, as well as
allowance for Deputy President
4 Includes payments made to Indigo Shire Council for use of council vehicle
Dick Gross
-
-
-
-
-
-
-
✔
✔
✔
✘
✔
✔
✔
✔
✔
Jeff Amos
Darryl Argall
John Bruce
John Chandler
Joseph Cutri
Brenda Hampson ✘ ✔ ✔
Geoff Lake
Clare O’Neil1 & 7
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✘
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Term commenced September 2004
2&3 Term concluded November 2004
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5&6 Term concluded February 2005
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1 Payment made to Wellington Shire Council for travel expenses
5 As President, Geoff Lake is also provided with full private use of a motor vehicle at a
cost in 2004/05 of $14,950.80 and mobile phone $3,059.77
6 Includes travel to ALGA as MAV representative
Compliance
In addition to the requirements of the Municipal Association Act
1907 and its Rules, the MAV must comply with regulations and
obligations applicable to statutory and public bodies including the
Information Privacy Act 2000, Whistleblowers Protection Act 2001
and Freedom of Information Act 1982.
The MAV has established policies and procedures with respect to
legislative requirements. Staff are advised of these policies on
induction, and copies are publicly available on the MAV website.
MAV ANNUAL REPORT 2004/5
11
economics & finance
LEADING BY EXAMPLE
The MAV’s economic and financial
focus is sharp, steady and
singleminded. With its sights set on
a continually improving financial
position for local government,
the MAV assumes a responsible,
yet imaginative approach to
achieving better State and Federal
government funding, while
supporting local government in the
strategic use of existing resources.
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MAV ANNUAL REPORT 2004/5
Policy and Advocacy
PERIN legislative reform imminent
The review of the Penalty Enforcement by Registration of Infringement
Notice (PERIN) system continued during the year, with legislation now
anticipated for introduction in late 2005.
This marks a significant achievement for the MAV and local
government. After what has been a long and hard-fought struggle, a
range of improved enforcement powers for the Sheriff’s office has
now been mooted by the State Government.
The MAV is continuing to advocate for a review of the VicRoads
database, and is liaising with the State Government on methods for
improving the integrity of data used to locate offenders.
Preparing for the introduction of water rates reform
In response to the State Government’s decision to uncouple water
value from property valuations from 30 June 2006, the MAV
modelled the anticipated impact of the reforms.
The conclusion of the modelling – that there is no solution available
in the rating system that will provide a suitable outcome to all
ratepayers – has been raised with the Department for Sustainability
and Environment and the Department of Premier and Cabinet.
The MAV is continuing to advocate for direct funding to enable
councils with substantial portions of water-based rates to undertake
reviews of rating strategies, and to implement the reforms equitably.
MAV appointed to MFES Board
After intense lobbying, an MAV representative was appointed to the
Metropolitan Fire and Emergency Services Board (MFESB) for the first
time in 2004.
As the voice of local government on the Board, the MAV was
instrumental in determining the strategic priorities of the MFESB,
highlighting the fact that continued increases in the fire services levy
was ultimately an impost borne by ratepayers. As a consequence, the
increase was reduced for 2005/06.
MAV exerts influence in federal arena
In the lead up to the 2004 Federal election, the MAV successfully
campaigned for key local government concerns to be addressed.
These included community care, immunisation, road funding and
financial sustainability.
In response to MAV lobbying, the Federal Government renewed the
successful Roads to Recovery (R2R) program and announced a
productivity commission inquiry into the ability of local government
to source and obtain revenue. This will have considerable influence
on the financial sustainability of the sector.
During the year, the Federal Government also delivered a detailed
response to the Hawker Inquiry into cost shifting. The report
recommends the introduction of an intergovernmental agreement
specifying reallocation of responsibilities, improved processes and
efficiency at council level, and a review of revenue streams.
New electricity rating regime benefits councils
After sustained lobbying by the MAV, a new rating regime was
introduced, providing affected councils with an increase of
approximately 20 percent on the previous level of rates paid by
electricity generator businesses.
Valuation of Land Act review completed
The MAV coordinated a sector-wide response to the review of the
Valuation of Land Act 1960. A number of issues were raised
including opposition to
· the introduction of fees for objectors
· the extension of the ‘highest and best use’ principles
underpinning site valuations
· the requirements placed on local government to issue multiple
rates notices to both tenants and property owners.
The MAV understands that all proposals objected to by the sector will
be abandoned.
Lobbying to negate impact of funding cutback
In September 2004, the Federal Government announced the abolition
of National Competition Policy (NCP) payments to state governments
by 2006. As a result, incentive payments traditionally passed to
Victorian councils are likely to cease, with significant adverse
implications on the capacity of local government to deliver services.
The MAV is lobbying the Federal Government for a continued
provision of NCP payments beyond 2006, and advocating for
ongoing local government access to incentive payments.
Capacity Building
Collaboration the key to enhancing council IT
During the year, information technology has been a major MAV
focus for supporting the efficiency of council business functions and
enhancing competitiveness. Accordingly, the MAV IT&T Management
Committee was established to coordinate statewide local
government IT initiatives and collaborative projects. Over 70
councils contributed to the process, resulting in lower participation
costs, reduced level of risk, and greater transparency.
Getting ready for regional business growth
The MAV appointed financial services provider, Ernst & Young, to
support a contract between the MAV and Minister for State and
Regional Development to promote the Regional Business Investment
Ready program. The program provides regional municipalities with a
financial advisory resource to assist with business case development
for infrastructure projects and funding proposals.
Promoting volunteering in local communities
The MAV is taking a lead role in strengthening and sustaining
volunteer participation in local communities. In partnership with the
Department for Victorian Communities, the MAV is coordinating
delivery of the Local and Regional Resource Networks (LRRN) Project.
Future Directions
· The Fire Services levy continues to be a key concern for both
the MAV and local government and will continue to be
carefully monitored.
· With regard to the unbundling of water rights, the MAV will
continue to advocate for direct funding to enable affected
councils to undertake reviews of rating strategies.
· Continued lobbying to ensure NCP payments to local
government is ongoing.
MAV ANNUAL REPORT 2004/5
13
environment
BREAKING NEW GROUND
The MAV took the lead on key
environmental management issues
this year. Always looking for the
most effective way to represent
the interests of local government
and offer practical support,
the MAV participated in crucial
decision-making forums, initiated
critical reviews and developed
groundbreaking programs to
advance environmental
management in Victoria.
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MAV ANNUAL REPORT 2004/5
Policy and Advocacy
Submission made on National Packaging Covenant
This year the MAV, the Local Government Association of Queensland
(LGAQ) and the Australian Local Government Association (ALGA) carried
out an independent review of the National Packaging Covenant (NPC).
The review found that local governments around Australia were
critical of the NPC and would like to see a number of key reforms
to the Covenant.
The MAV also made a submission to the Regulatory Impact
Statement (RIS) on the NPC, identifying a number of serious
concerns about the conclusions reached, and calling on the
Environment Protection Council (EPC) to further investigate the
options presented. The MAV emphasised the need to ensure that
new NPC targets would not impose additional costs to local
government and ratepayers.
With support from the MAV, the URL program achieved several
significant milestones in 2004/05. These include an increase in the
program coordinator’s hours to three days, the participation of 27
schools (over 800 students) in the program, establishing key networking
partnerships, and attracting sponsorship from Rural Finance Victoria.
Reviewing native vegetation management
In 2004/05, the MAV completed a 12-month study investigating the
challenges faced by local government in meeting its responsibilities
for native vegetation management. A key issue was the capacity of
Leading in sustainable urban water management
councils to administer increasingly complex native vegetation
The Clearwater program is jointly managed by the MAV and the
planning controls with few resources.
Stormwater Industry Association of Victoria (SIAV), and is funded by
During the year the MAV also made submissions to both the State
the Environment Protection Authority Victoria (EPA) through the
Government’s Native Vegetation Operational Guidelines and the
Victorian Stormwater Action Program. It develops and delivers
Federal Government’s review of the National Framework for Native
tailored education and training packages for local government and
Vegetation Management.
industry professionals which address the sustainable management of
urban stormwater.
MAV signs sustainability accord
The MAV’s ongoing commitment to sustainable management of the
environment was reinforced this year with the signing of a Heads of
Agreement to begin developing a local government sustainability
accord between the State Government and councils.
Improving waste management throughout Victoria
MAV and EcoRecycle Victoria established a liaison group to build
high-level relationships and improve understanding between the two
organisations.
The main focus of the group is to jointly promote issues relating to
waste avoidance, and improve resource recovery from the sector.
Capacity Building
Award-winning ECO-Buy leads the country in green purchasing
ECO-Buy, the innovative Victorian local government green
purchasing program, this year attracted recognition for its
outstanding work with local government promoting the purchase
of environmentally friendly products from
· United Nations (Australia) World Environment Day Award
· 2004 Premier’s Business Sustainability Award
· Banksia Award 2005 – finalist.
The success of the ECO-Buy program is also reflected in the continuing
growth of its membership which now includes more than 75 percent of
councils. Victorian local government continues to lead the way on
environmental purchasing initiatives with expenditure on green products
increasing from $5.9 million in 2002 to $36.9 in 2004.
NRM facilitator appointed to work with local government
The MAV and the Federal Government appointed a Local
Government Natural Resource Management (NRM) facilitator in
Victoria as part of the new national Australian Government NRM
Facilitators Network.
The facilitator’s main task is to assist local government in the
planning and implementation of its natural resource management
program, particularly initiatives supported by the Natural Heritage
Trust and other Federal Government NRM programs.
URL program achieves significant milestones
The Urban Rural Links (URL) program, housed at the MAV, brings
together local government and primary schools from across Victoria
to share information about their community and environment.
Now in its third year, Clearwater is widely recognised as a leader of
professional development programs for integrated urban water
management.
In 2004/05 Clearwater conducted a range of innovative education and
training programs which were attended by every council in Victoria.
Managing risk through the MAV Smart Septics program
In partnership with the EPA and other organisations, the MAV developed
the Smart Septics program to improve local government’s capacity to
address significant risks to the State’s waterways and public health.
In 2004/05, the program produced a package of new planning and
management tools for councils. This package assists councils to
educate the community about best-practice management of
household wastewater systems, provides guidance on managing
wastewater system data, and sets out guidelines for managing
household wastewater in areas where reticulated sewerage is not
currently a feasible option.
Beach cleaning subsidies for bayside councils
Councils provide a vital service in maintaining safe, clean beaches
which is, in part, achieved with subsidies from the State Government.
In 2004/05, the MAV worked in partnership with the Association of
Bayside Municipalities (ABM) to ensure all eligible councils received
the subsidy.
Future Directions
· The MAV, with SIAV and EPA Victoria, will explore options to
continue and expand the Clearwater program beyond the life
of its current funding.
· A partnership with DSE will provide funding for rural and
interface municipalities to develop Domestic Wastewater
Management Plans which complement the work of the Smart
Septics program.
· The MAV will continue its discussions with the State Government on
future capacity of councils to administer native planning controls.
· The ECOBuy program will work with the Office of the
Commonwealth Games to support the establishment of greenpurchasing practices by the business sector.
· In 2005/06 an Australian/Indian school links pilot will be
established as part of URL’s ongoing efforts in setting up
international school links.
MAV ANNUAL REPORT 2004/5
15
general projects
Policy and Advocacy
ALL BASES COVERED
The MAV takes a fiercely proactive
stance to protect the interests and
rights of local government, without
fear or favour. When the Association
identifies an issue affecting councils –
be it Indigenous rights, jobs for
young people or bushfire
management – it takes decisive
action to address the issue now,
for the benefit of the future.
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MAV ANNUAL REPORT 2004/5
Financial Services Licence signed, sealed and delivered
In a significant achievement for the year, the Australian Financial
Services Licence was finalised. (For more detailed information see
the MAV Insurance Annual Report.)
MAV initiates statewide insurance education program
Following State Government reform to insurance legislation, the
MAV initiated the Public Liability Insurance, Risk Management and
Victorian Community Groups project. This project, which builds on
existing forums conducted by the MAV and ourcommunity.com, aims
to educate community organisations about the recent legislative
changes, and improve understanding about the importance of
adequate insurance and risk management. The project places
particular emphasis on regional and rural areas.
In line with the goal to educate and inform, the project distributed
newsletters to all municipalities and ran workshops across the state.
Capacity Building
Promoting local government involvement with Aboriginal
communities
As a strong supporter of reconciliation, the MAV is involved in a
number of initiatives to ensure that local government structures,
planning processes and services are relevant and accessible to
Indigenous people. In 2004/05, the MAV coordinated two Indigenous
committees – one that works with federal and state agencies, and
another that provides networking opportunities within local government.
The MAV provided feedback on discussion papers, produced by the
Department of Sustainability and Environment (DSE), and Aboriginal
Affairs Victoria, about local government involvement in preserving
Aboriginal cultural heritage and the practical problems councils face
in undertaking additional activities in this area.
With the demise of the Aboriginal & Torres Strait Islander
Commission (ATSIC), the MAV contacted the Office of Indigenous
Policy Coordination – the new body in Victoria created by the
Federal Government to replace ATSIC – and the State Government
to explore the implications of the changes for local government.
Working to create jobs for unemployed young people
This year the State Government provided a second round of funding
for the Jobs for Young People program. The MAV has continued to
encourage councils to match skill shortages in the sector with local
government traineeships and apprenticeships for unemployed young
people. Councils are supportive of the principles of the program and
welcome the opportunity to participate in the skill development of
young people within their communities.
The final stage of the project saw the launch of a web-based risk
assessment program which allows community groups to assess their
risk and receive advice on areas for improvement.
Fire refuge guidelines finalised
The MAV has been a key participant in the Fire Refuges Strategy
Group which developed guidelines and standards for the provision
of fire refuges. The document Fire Refuges – Policy and Practice was
finalised during the year and, following ministerial approval, is
expected to be released later in 2005. Importantly the document
concludes that the refuges may not be the best community safety
solution in all communities.
Ongoing participation in municipal fire management planning
As part of its commitment to representing the interests of local
government, the MAV is actively involved in the Integrated Municipal
Fire Management Planning (IMFMP) Project. With funding provided
from the project, the MAV seconded the IMFMP Local Government
Consultation and Communications Manager to ensure local
government’s views and interests are considered. The MAV also sits
on the Multi-Agency Reference Group for this project.
A discussion paper on integrated fire management planning will be
released for comment by the IMFMP project team later in 2005.
Leading the way on the future of local government
Almost 300 participants from Australia and overseas attended the
inaugural Future of Local Government summit in Melbourne in June
2005. Hosted by the MAV, this two-day summit featured local and
international speakers – from the United Kingdom, Europe, USA,
Canada and New Zealand – who provided fascinating insights into
local government trends around the world.
An important outcome of the summit was the production of a draft
vision statement: ‘Local government is valued by all Australians for
building strong and successful communities’.
MAV hosts online demonstration conference
In November 2004, the MAV hosted the fourth national Local
Government Online Demonstration Conference. Held at
Melbourne’s Telstra Dome, the conference explored the potential
that innovation in IT offers local government service delivery. An area
of particular interest was the concept of shared services.
Future Directions
· After the release of the Fire Refuges – Policy and Practice
guidelines, the MAV in conjuction with the Office of the
Emergency Services Commissioner (OESC), will hold a series of
information sessions for councils which currently have fire refuges.
· Following on from the Future of Local Government summit, the MAV
has established a working group to advance the outcomes and plan
for a 2006 summit.
MAV ANNUAL REPORT 2004/5
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health & human services
READY FOR ACTION
With the announcement in April of a
new social action plan for A Fairer
Victoria, the State Government
quickly passed the baton to the MAV.
The Association has maintained its
early lead, providing the assistance
councils need to play their part in
addressing disadvantage and
creating opportunities within their
communities.
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MAV ANNUAL REPORT 2004/5
Local government youth charter guides launched
As a joint initiative of the MAV and RMIT University, two youth
guides were produced for local government during the year –
the Youth Charter Guide and Engaging Young People.
Working towards an integrated statewide library system
The MAV is continuing its work with councils to develop local
government policy and a preferred funding position. As an important
part of this process, the MAV is participating in ‘vision’ development
for libraries through the Ministerial Advisory Council.
Policy and Advocacy
Improving the efficiency and effectiveness of community care
Throughout 2004/05, the MAV’s community care campaign focused
on two primary goals: to increase investment by Federal and State
Governments, and to improve efficiency and effectiveness by
facilitating the integration of disparate programs.
Community Care for the Ageing campaign delivers results
As an active member of the Victorian Community Care Coalition
(CCC), the MAV
· participated in the national summit in 2004
· increased awareness amongst Victorian Federal MPs and
election candidates of the valuable work of both paid and
unpaid carers via its federal election ‘call to parties’
· generated 96 stories in Stage 1
· facilitated the hosting by councils of nine CCC regional forums
in the second half of 2005.
Statewide HACC program partnership breaks new ground
The Home and Community Care (HACC) program partnership
agreement negotiated by the MAV and the Department of Human
Services (DHS) was finalised and circulated to councils for comment.
This is the first time agreement between the State and local
government has been achieved on planning, policy development
and provision of HACC services.
The Home and Community Care food services review was
successfully launched in March 2005.
OH&S guidelines drafted for home care industry
In a project jointly managed by the MAV and the Victorian
Association of Health and Extended Care, draft Occupational Health
& Safety (OH&S) guidelines were completed and circulated to all
stakeholders, including councils, in late 2004.
MAV takes the lead in childcare debate
In April 2005, the MAV – in conjunction with Community Child Care –
completed a discussion paper on the role of local government in
supporting childcare. Undertaken in response to the challenges councils
are currently facing in accommodating a growing demand for childcare,
the MAV was successful in putting Victorian council concerns to the
Federal Minister for Family and Community Services.
A key MAV achievement was obtaining the Department's agreement
in the re-tendering process for the Children’s Services Resource and
Redevelopment Officer as a regional program to fund successful
councils individually under separate agreements with the Department.
In conjunction with relevant State departments and Viclink (the
peak body for library professionals), work is continuing towards
the establishment of an integrated library system to improve access
and increased information technology capacity, particularly in
rural libraries.
Close monitoring of proposed Health Act amendments
In December 2004, the MAV responded to a discussion paper
released by the Department of Human Services concerning a revised
Health Act. As this review will have funding and capacity implications
for local government and is likely to impose additional liabilities, the
MAV is closely monitoring the range of new directions which emerge
from the consultation process.
MAV negotiates better deal for Tobacco Act enforcement
On behalf of the State Government, the MAV again administered
service agreements with councils for their enforcement of the Tobacco
Act 1987. In 2004/05, approximately $612,000 was distributed to
77 councils and two statutory authorities to fund visits to tobacco
retailers and food outlets, presentations to educational institutions and
test purchases aimed at preventing cigarette sales to minors.
The MAV also negotiated a better deal for local government than
initially considered by the State Government for enforcement of a
new raft of anti-smoking proposals announced in late 2004, and
lobbied for additional tasks to be fully funded.
Lobbying delivers significant immunisation funding increase
As a result of a costing study initiated and undertaken by the MAV,
and subsequent lobbying for increased funding, the State
Government agreed in January 2005 to provide an additional $1.3
million per annum to local government for immunisation service
delivery – an increase of almost 50 percent on current funding.
During 2005 the MAV continued to lobby the Federal Government
for acknowledgement of the efficient and universal service provided
by local government in Victoria. In particular, the MAV asked for
Federal Government agreement to the introduction of a local
government immunisation incentive scheme. The MAV also urged the
Australian Local Government Association (ALGA), newly appointed
as an observer member of the National Immunisation Committee, to
lobby for such a scheme.
Working party reviews food safety legislation
Responding to a request from the Department of Human Services
(DHS), the MAV established a DHS/MAV food safety legislation
working group in March 2005 to develop recommendations for
legislative reforms that would improve local government enforcement
of the Food Act 1984.
MAV ANNUAL REPORT 2004/5
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Capacity Building
Targeting maternal and child health workforce issues
A project addressing recruitment and retention issues of maternal
and child health nurses commenced this year. The project focuses on
· identifying priority areas (with an emphasis on raising the profile
of maternal and child health nursing)
· developing a coordinated approach to maximise service delivery
· developing support mechanisms to retain maternal and child
health nurses in local government
· attracting maternal and child health students to local
government employment.
Developing culturally responsive HACC services
In partnership with the State Government, the MAV is implementing
the Culturally Equitable Gateways Strategy (CEGS). The MAV is
working with CEGS-funded councils to support, resource and
enhance the capacity of HACC services to respond to the needs of
elderly people from culturally and linguistically diverse backgrounds.
Victorian councils first to complete MEYPs
Facilitated by the MAV, Victorian councils are the first in Australia to
have completed Municipal Early Years Plans (MEYPs). The model for
integrated planning for young children’s health, care and education
has been presented to government officials, community leaders and
policy makers at the state, national and international levels.
The MAV/DHS Annual Early Years Forum was held in April 2005
with an attendance of 180.
The MAV has successfully negotiated with DHS for continuation of
the MEYP project until June 2006.
MAV’s work on PCAC acknowledged
The report of the Premier’s Children’s Advisory Committee (PCAC)
was released in December 2004. The work of the MAV and councils
was recognised in the report, and its recommendations for policy
and service development relating to early childhood generally – and
Maternal and Child Health Services (MCHS) in particular – were
endorsed by the Premier.
Improving disability access and inclusion
The MAV is currently in the process of rolling out a three-year
strategy to assist local government’s capacity to improve access and
participation of people with disabilities. This includes completion of
an MAV Disability Action Plan, representation on the Public Transport
Access Committee, the Round Table on Tourism, Sport, Recreation
and Arts for people with a disability, and the Metro Access Advisory
Committee (initiated by the MAV). It involves partnerships with all
metropolitan and rural councils and with relevant disability services
including the Disability Advisory Council of Victoria.
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MAV ANNUAL REPORT 2004/5
Future Directions
· The next stage of the Community Care campaign will include
discussions with the Federal Minister for Ageing on the need for
research into the relative decline in the dollar value of
community care services, and development of best practice
models. Presentations to State Government community cabinet
meetings will also be facilitated.
· Discussions with the Minister and the Department of Family &
Community Services will focus on childcare planning,
maintenance of infrastructure and family day care, including
council concerns that under the new Family Day Care (FDC)
formula, financial support for FDC will decline in real terms.
governance, training
& relationships
PEOPLE MATTER
The MAV knows that local
government’s greatest asset is
its people – those who work within
the sector and those who govern.
The Association understands the
importance of attracting and
nurturing talent to ensure the longterm vitality of local government,
and actively seeks ways to provide
opportunities for networking,
training and employment.
Policy and Advocacy
MAV represents local government on electoral representation
reviews
The MAV conducted initial research to examine the current process
and outcomes of electoral representation reviews, and wrote to the
Minister for Local Government expressing local government concern
at the current electoral representation review process. Following a
resolution of the May 2005 State Council, the MAV will continue to
advocate for councils to ensure they have adequate input into the
electoral structures set for their municipalities.
Councillor remuneration discussion paper drafted
Using the results from a survey of Victorian councillors, and an
extensive assessment of councillor and mayoral remuneration
schemes overseas and interstate, the MAV prepared a draft discussion
paper on councillor and mayoral remuneration in Victoria.
MAV ANNUAL REPORT 2004/5
21
Large attendance at MAV’s 2004 Councillor Development
Weekend
In July 2004, 110 elected representatives from 46 councils across
Victoria came together for the MAV’s annual professional
development weekend at the newly-developed Geelong Waterfront.
Launch of new professional development program for new
councillors
In December 2004, the MAV launched the Councillor Fundamentals
development program to assist new councillors gain the skills and
knowledge they need in the early months of their first term.
Highlights of the program included the presentations of renowned
author, Arnold Zable who spoke about the power of narrative, and
Melinda Muth, Professional Fellow at the Melbourne School of
Business, who explored the behavioural side of good governance.
The program also included a number of development workshops in
areas such as emotional intelligence, influencing and negotiating,
and decision making.
The program consisted of four workshops covering financial
management, planning, governance and media skills. The workshops
provided a broad overview of each area and developed councillors’
skills and understanding of critical issues affecting local government.
Once again, a large number of delegates’ families attended the
weekend. The MAV continues to encourage the participation of
families and partners in recognition of the significant role they play
supporting councillors in their demanding roles.
Offered in Melbourne and Camperdown, the workshops were
attended by newly-elected and more experienced councillors from
across the state.
Winner of 2004 Fellowship explores council role in forest
management
Cr Phil Millar from Hepburn Shire Council used this year’s $10,000
Australia Post/MAV Fellowship research grant to examine local
government’s role in public forest management through participation
in community forest management (CFM). CFM is a newly-emerging
system for the management of forests that involves more active
community input and participation through a collaborative decision
making and management approach.
Capacity Building
Statewide graduate recruitment program expands
Now in its second year, the MAV’s graduate recruitment program,
GoGrad, continued to build on the success of its first year.
In 2004/05, the program received over 200 applications for
positions across metropolitan and rural Victoria – a significant
increase on the previous year – and successfully recruited a number
of graduates for work in engineering, planning and public policy.
As part of a long-term plan to encourage greater representation of
talented young people in the sector – particularly in rural and
regional areas – the MAV actively sought opportunities to raise the
profile of local government as a choice employer. In one of a series
of marketing initiatives, the MAV invited council staff to attend
university careers fairs to pass on valuable first-hand knowledge, as
well as promote the diversity of roles available in local government.
Supporting new graduate recruits
In 2004/05 the MAV developed GetSet, a new program to support
the latest group of GoGrad recruits. Following extensive consultation
with senior officers and specialist staff, eight workshops were
developed to build new graduates’ skill base and provide an
understanding of the local government sector.
Over 80 participants from 30 Victorian councils have so far attended
one or more of the workshops, which will continue to be offered
throughout 2005.
Tailored staff development programs increasingly popular
During the year, the MAV received an increasing number of requests
from local government for tailored staff learning and professional
development programs. One workshop, Understanding Local
Government (developed for the GetSet program), has been
particularly popular, attracting over 100 participants.
Another program conducted across the state in 2003, was offered to all
councils this year. With the significant support of the City of Casey, the
Authorised Officers Program was conducted in four Victorian locations
and attracted over 60 participants from 35 Victorian councils.
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MAV ANNUAL REPORT 2004/5
As part of his research, Cr Millar visited the USA and Canada to
investigate existing community-managed forest models of relevance
to Australia. Cr Millar’s research will benefit councils involved in
forestry activities and will have wider applications for councils
considering community involvement in a range of natural resource
management issues.
Annual Conference 2004 plans for the future
The 2004 Conference attracted 240 delegates from councils across
Victoria. Officially opened by The Hon John Thwaites, Minister for
Environment, Water and Victorian Communities, the conference
featured keynote speakers Dr Keith Suter, social commentator and
author, and Professor Louise Rolland, Centre for Ageing and Work
at Swinburne University. Both speakers focussed on the theme of
planning for the future, identifying current demographic changes
and the challenges faced by local government.
A new, and very popular, addition to the conference program this
year was the ‘Conversation’ sessions. Skilled facilitators and expert
panellists led discussions on a range of topics including advocacy,
demographics and rating strategies.
MAV celebrates 125 years at Annual Conference dinner
Almost 400 delegates, partners and guests attended the Annual
Conference dinner which this year formally celebrated the MAV’s
125th anniversary.
To commemorate the occasion, each guest received a copy of The
Road to Municipal Leadership: Mapping the early years of the MAV ,
a short history produced especially for the anniversary. Guests were
also treated to a performance of a speech by one of the MAV’s
founding fathers, Allan McLean.
Newly-elected councillors welcomed to sector by MAV
The MAV’s President and the Minister for Local Government officially
welcomed newly-elected councillors at a cocktail party in February
2005. Coinciding with the completion of the first Councillor
Fundamentals workshops, this event was a good opportunity for new
councillors to start building relationships across the sector.
Working to attract more women to local government
The MAV is an active member of the Women’s Participation in Local
Government Coalition (WPILGC). In 2004/05, the coalition
established the Victorian Women’s Charter Awards. The coalition
also redeveloped its Women-Get-Elected workshop program with
funding from the Community Support Fund, and received secretariat
support from the Victorian Local Governance Association (VLGA).
Ongoing support for the Rural Councils Network
This year the MAV again provided secretariat support for the Rural
Councils Network to assist the 26 smallest Victorian councils.
MAV pre-election information sessions well received
Formed as a cooperative grouping of councils, the network works
In November 2004, 25 councils faced general elections. In
collectively to influence decision makers and tackle the long-term
preparation for these elections, the MAV coordinated a series of
strategic challenges facing rural communities with small populations.
evening sessions to provide prospective candidates with the
information needed to make a considered decision to nominate.
Good Governance Advisory Group (GGAG)
During the year, the GGAG assisted councils to respond to the
range of legislative changes impacting on governance practices in
local government. This included meeting with representatives of key
organisations such as the Victorian Electoral Commission (VEC) and
advocating on behalf of the sector on key governance issues.
Nineteen information sessions were held across metropolitan and
regional Victoria, and were all well attended. MAV staff chaired the
sessions which involved a series of presentations from CEOs,
councillors and representatives of the VEC. Guest speakers were
brought in from neighbouring councils to preserve impartiality.
In response to the requirement that all councils develop a code of
conduct, GGAG prepared a minimalist code to assist councils in
developing their own. In addition, the GGAG obtained funding from
the Department for Victorian Communities (DVC) to produce a
publication that guides councils through the process of creating a
code of conduct. The publication will be completed towards the
end of 2005.
Passing on knowledge and expertise to local community
groups
In conjunction with ourcommunity.com.au, and with funding from the
Community Support Fund (CSF), the MAV began a series of seminars
– Secrets to Successful Boards and Committees – in June 2005. The
seminars were hosted by each of Victoria's 79 councils.
Governance Officers Network
The Governance Officers Network met twice in 2004/05 to discuss
the many governance challenges facing local government. Both
sessions were well attended and featured guest speakers from the
VEC and Local Government Victoria. The group will continue to
meet on a regular basis.
Governance support
At the request of a large number of Victorian councils, the MAV
provided various levels of governance support during the year. This
included offering advice and information to individual councillors
and CEOs, as well as providing more formal support to 15 councils
– through tailored workshops, developing performance review
frameworks and facilitating CEO performance reviews.
Future Directions
· The MAV will formulate a proposal to the State Government
outlining recommendations for the revision of the existing
councillor and mayoral remuneration framework. The proposal
will take into account the variety of councillor and mayoral
duties across Victoria.
· Based on feedback received from participants, the Councillor
Fundamentals program will be further developed and offered in
2006 following the next round of council elections. An
additional resource kit will also be developed to support new
councillors in their first months in office.
· The GetSet learning and development program will be
redeveloped before being offered to all councils in 2006.
MAV ANNUAL REPORT 2004/5
23
planning
BUILDING STRONG FOUNDATIONS
Protecting community and local
government interests is the MAV’s
number one priority. In its role of
interpreting and facilitating the
implementation of State Government
policy, the MAV always takes a
practical and professional approach.
It is strongly committed to assisting
councils in finding their way
through the complex and evolving
planning environment.
24
MAV ANNUAL REPORT 2004/5
Capacity Building
Agreement guarantees universal internet access
Working with the Wired Development Consortium councils and the
Minister for Information and Communication Technology, the MAV
developed a contract which ensures universal conduit access on new
housing estates. This agreement provides metropolitan interface
councils with an important tool for negotiating with housing
developers where existing broadband infrastructure is not available.
It will be used for the first time by VicUrban in the new Aurora
housing estate.
Policy and Advocacy
Driving planning system reform
Building on the improvements provided by the Better Decisions Faster
initiative, the MAV Planning Advisory Group (PAG) produced an
issues paper in May outlining further suggestions for fundamental
reform of the planning system. Distributed to local government
planning managers for comment, the suggestions were based on a
paper prepared by the Planning Institute of Australia in 2004, and
include recommendations for
· strengthening leadership in planning
· bolstering the state planning policy framework
· balancing state and local interests
· increasing emphasis on ecologically sustainable development
· clarifying the role of the Department of Sustainability and
Environment (DSE)
· reviewing the Victorian planning provisions
· recruitment and retention of planners.
Lobbying succeeds in streamlining developer contributions
After a period of sustained lobbying by the MAV, the Developer
Contributions Bill was passed in December 2004. The amendments
to the Planning and Environment Act 1987 streamline the approach
to introducing developer contributions, while retaining crucial
accountability measures.
Councils granted interim height controls
Responding to council concerns, the Minister for Planning
approached the MAV for assistance in resolving the issue of
developers exploiting the objectives of Melbourne 2030. The
overriding concern – that developers were applying for high-rise
developments in activity centres where structure plans had not been
completed – was brought to a head when the City of Whitehorse
challenged a Victorian Civil and Administrative Tribunal (VCAT)
decision for a high-rise apartment building in Mitcham.
After intensive discussions with the Minister, the MAV was successful
in brokering an agreement on height controls which has been
embraced by both State and local government. Councils are now
able to introduce interim height controls in activity centres and
residential areas pending the finalisation of structure plans.
Making the most of Melbourne 2030
The MAV continued to work with State and local government to
ensure the best possible outcomes for Melbourne 2030. This year’s
focus was on the key issues of public transport and infrastructure
funding, consistency of advice and support from DSE and the State
Government, and better communication to build community
understanding and ownership of the Melbourne 2030 framework.
Significant achievements include
· the appointment of a Melbourne 2030 liaison officer at the MAV
· development of capacity building programs through beacon
project identification
· the participation of all 31 metropolitan and interface councils in
the MAV Melbourne 2030 Councillor Reference Group and the
Planning Technical Committee
· facilitation of training and information exchange
· hosting of high-level members’ forum resulting in an action plan
for improved MAV advocacy and assistance to councils.
Addressing the shortage of rural and regional planners
Jobs for Young People offers paid work experience, training and
qualifications leading to sustainable employment. The MAV played an
instrumental role in developing and adapting this program to address
the critical shortage of planners in regional and rural Victoria.
Future Directions
· Following amendments to the Planning and Environment Act
1987, the MAV will continue to address concerns not currently
included in developer contribution schemes, and lobby to increase
the amount of infrastructure revenue able to be generated.
· A comprehensive overhaul of the fee structure will be pursued
(working group comprising councils already established to
conduct a review of planning fees).
· As part of the MAV annual budget submission, a memorandum
of understanding will be developed with the State Government
to assist in implementation and preparation of an annual
Melbourne 2030 priority statement for local government.
· A further round of Melbourne 2030 forums will be hosted on
structure planning, integrated transport planning and amenity
and design.
· Following a change in State Government direction, the MAV will
put forward proposals to support councils in the implementation
of the new rural zones.
MAV ANNUAL REPORT 2004/5
25
transport & infrastructure
MAKING THE RIGHT CONNECTIONS
In a year that saw a major shift in
focus – from road transport to an
integrated and sustainable
community transport system – the
MAV has been the driving force
behind the forward-thinking, strategic
approach adopted by local
government. Along the way, the
Association made sure that protective
measures were in place to counteract
the abolition of nonfeasance.
26
MAV ANNUAL REPORT 2004/5
Policy and Advocacy
Providing effective support, feedback and liaison
The MAV, in conjunction with the Australian Local Government Association
(ALGA) and other state associations, was proactive in providing
· support for the development of the AusLink Green and White
Papers, including representation on national working groups
· feedback to the Federal Government on the effectiveness of the
Roads To Recovery (R2R) program, and lobbying successfully for
its continuation – resulting in the allocation of a further $1.35
billion to local roads in the four years to 2008/09.
In preparation for the anticipated future emphasis on regional policy
by State and Federal Governments, the MAV, in conjunction with
Victorian councils, established regional transport groups.
Capitalising on the opportunity for developing council-specific
RMPs
The virtual abolition of nonfeasance by the High Court resulted
in the State Government passing the Road Management Act 2004
as a means of providing public bodies with a public policy defence.
This opened up opportunities for councils to develop Road
Management Plans (RMPs) to identify appropriate policies and
practices within their jurisdictions.
Seventy eight Victorian councils have now sought the protection
offered by the Road Management Act by developing their own RMPs.
The MAV Step Asset Management program has placed a heavy focus
on assisting councils with this process, including onsite reviews of the
alignment of RMPs and the documentation, processes and systems
relative to the Road Management Act and CMP requirements.
Public transport liaison group established
In association with the Department of Infrastructure (DoI), the MAV
established a high-level executive transport liaison group to discuss
and resolve public transport-related matters. In addition to MAV and
DoI executive management and senior staff, the group invited local
government representatives to give councils the opportunity to raise
matters of vital concern for the sector.
MAV transport strategy addresses key challenges
The MAV Transport and Infrastructure Advisory Group prepared a
comprehensive strategy paper setting out a strategic framework and
recommendations for the MAV and local government to address key
transport challenges facing Victorian communities. Building on a
broad analysis of the current status of transport across the state, the
paper identifies critical gaps and challenges, and sets out priorities
and recommendations for action.
Capacity Building
Step Asset Management program continues to deliver results
During 2004/05, the Step Asset Management program continued to
offer valuable assistance enabling councils to meet requirements and
timelines within an evolving and challenging environment. Major
outcomes include
· involvement of 78 Victorian councils in the process, with four
other state associations also established
· improvement in sector-wide asset management performance in
all categories including policy, strategy, planning and operations
· development of a range of support tools to assist councils to
complete RMPs in accordance with the Road Management Act
· development of the Road Asset Management Plan framework,
audit and field reviews of council RMPs, and provision of
legal advice.
In recent months, the focus of the program has begun to shift to
other asset classes, with an emphasis on building infrastructure.
Accordingly, MAV Step providers established a buildings framework
to support councils in this process.
Asset management conference a first for Australia
The inaugural Asset Management Conference held in May 2005,
brought together the most impressive array of knowledge on local
government asset management presented in Australia. Delegates
included over 300 asset, finance and risk managers as well as
councillors from around Australia.
The conference agenda underlined the current importance of asset
management for local government.
Future Directions
· Following the success of the Step Asset Management program
within Victoria, the MAV will work to encourage its acceptance
across local government nationally.
· An infrastructure renewal 'gap' program and associated
management process for all councils will be developed, along
with asset management plans for all classes of assets.
· An assessment of service sustainability will be carried out for all
Victorian councils.
· In partnership with member councils, the State Government and
other stakeholders, the MAV will develop a proactive,
sustainable and long-term strategy to address the broad range
of transport challenges facing Victorian communities.
MAV ANNUAL REPORT 2004/5
27
communications and
information
Efficient, targeted communications
achieved in-house
The MAV Communications Unit provides comprehensive in-house
communications services, including issues management, strategy
development, stakeholder relations, media relations, publication and
web content management.
The unit is the first port of call for all media inquiries and is
responsible for managing relationships with key media personnel.
Staff monitor issues that have potential to impact on local
government and advise the President and Chief Executive on
appropriate media and communication management strategies.
The Communications Unit identifies opportunities to communicate
the role and achievements of local government. This year
opportunities were proactively pursued with The Age and community
television station Channel 31, to enhance positive media coverage
of local government activities.
Another key function of the unit is to keep councils informed. This
role was expanded during the year through the brokering of a
heavily discounted media monitoring service and a wholly subsidised
parliamentary monitoring service.
Council-wide media monitoring service
negotiated
Targeted TV news program delivers on
several fronts
In 2004 the MAV entered into an arrangement with community
television station Channel 31 to support the development of a new
nightly news service, C News. Consisting of locally-focused news and
current affairs, the program not only gives the MAV a unique
opportunity to promote local government and send community
messages direct to the target market, but importantly, enables
Channel 31 to employ a dedicated local government reporter.
This arrangement greatly assists the MAV to deliver its dual objectives
of representing and advocating the interests of local government and
raising its profile. At the same time, the MAV’s involvement supports
the production of a high-quality nightly news service that provides
balance to the increasingly global focus aired on commercial
stations at the expense of local news.
This year, local government messages delivered through sponsorship
The MAV brokered an arrangement with media monitoring agency,
spots included community insurance and council elections.
Rehame, to extend its service to member councils at greatly reduced
rates than could be negotiated on an individual basis.
Subscribing councils receive access to services that would otherwise
be unaffordable. This is particularly relevant for smaller regional and
rural councils.
The service is delivered via an internet portal protected by individual
logins and passwords. In addition to standard packages, the contract
negotiated by the MAV gives councils the choice of additional levels
of service at a discount of 20 percent.
Enhancing the image of local
government
The MAV worked with The Age newspaper to launch Local Life, a
monthly colour supplement which ran in three editions of the paper.
The project was well supported by councils and was successful in
promoting awareness, visibility and exposure of local government.
28
MAV ANNUAL REPORT 2004/5
Unprecedented council access to
political process
Throughout 2004/05, the MAV wholly subsidised the cost of a
weekly electronic newsletter which provides councils with regular
updates on state parliamentary, political, regulatory and legislative
developments.
Published each Friday, the e-newsletter summarises all press releases,
Hansard, bills, regulations and parliamentary committee reports, and
details the progress of inquiries tabled within state parliament in that
week. It is delivered to nominated email addresses free of charge.
The e-newsletter is linked to a password-protected website enabling
councils access to all relevant documentation. The website also acts
as an electronic library with an advanced search engine for sourcing
state parliamentary and government decisions and information
dating back to 1999.
human resources
The MAV prides itself on recruiting and retaining high quality staff
with a shared commitment to supporting a strong and vibrant local
government sector.
Staffing changes
2004/05 was a year of significant change in the staffing profile of
the MAV. Overall staff numbers grew by 20 percent with the increase
being primarily in staff numbers in grant-funded positions. During
this period, three senior staff members were also on maternity leave
with their positions being backfilled by other staff and consultants.
Organisational profile
The staffing profile of the MAV is divided into three components
· employees funded by membership subscriptions and MAV
revenue to deliver policy and advocacy advice, capacity building
programs, and representation of Victorian councils
There was also a number of departures from the MAV with the
resignations over this period of the Director Policy, Manager
Environment, Senior Policy Adviser, Disability Project Officer, Water
Project Officer and Receptionist. All of these vacancies were filled.
· employees funded by state and federal grants to deliver specific
programs and support to Victorian councils
Staff development
· specialist consultants, contractors and advisers to support a range
of functions within the organisation in areas such as the insurance
scheme contract management and business development.
As a consequence of changes to the staffing profile of the
organisation, work commenced on the rebuilding of a cohesive
team. The first step in this process was a strategy and team
development session held in October 2004. This session identified
areas for improvement within the organisation and allocated
responsibility for supervision of the process to nominated teams.
Staff numbers as at 30 June each year
Staff numbers
1997 1998 1999 2000 2001 2002 2003 2004 2005
Full time
24
13
15
16
16
26
23
24
Part time
2
1
1
1
0
4
4
3
Temp/casual
-
-
-
-
-
-
2
Vacant/other*
-
-
-
-
-
-
-
26
14
16
17
16
Total staff
30
Work also continued on development and agreement of position
profiles for all staff and the implementation of a performance
management system for the organisation. Continuing effort and
focus on this area is planned for 2005/06.
30
4
1
1
2# 2#
30
30
37
$22,506 was spent on staff training and development during the
2004/05 reporting period.
Gender
Male
7
6
5
4
6
11
11
10
Female
19
8
11
13
10
19
18
18
11
26
Vacant
-
-
-
-
-
-
1
2(f)
2(f)
EFT Positions
MAV filled
24.1 11.5 14.5 15.5
MAV vacant/other
-
3
1
MAV temp/casual
-
-
-
Grant funded
1
2
Grant vacant
-
-
Grant casual
-
-
-
Total EFT’s
14 19.7 20.8 20.4 20.8
1
3
-
-
-
- 0.6 0.6 0.6
1
2
2
8 4.3 5.6 11.9
-
-
-
-
1
-
-
-
-
-
1
-
-
25.1 16.5 16.5 18.5
-
2
2
Policy
1
Training and Operations
Corporate
Grant
1
5
6
14.1
1
3
1
6
19 27.7 27.7 28.3 35.3
1
8
1
6
1
6.9
1
8
1
1
9 8.4
1
1
-
2
3.8
5.4
6
7*
7.5
5.5
7.5
8
8
7
7
7
2
1
2
2
8
6.3
# maternity leave
* includes 2 staff on maternity leave
In line with the growth in the size and function of the organisation,
the MAV recognised and addressed the need for greater internal
structure and more rigour in processes.
· In May 2004, a Director of Policy position was created to
provide support to the CEO in the management and overseeing
of the policy and grant programs delivered by the MAV.
Categories
Management
Systems and structure improvements
5.6 11.9
· Implementation of the Information Technology Strategy
commenced in 2004/05 with changeover of hardware, and
approval from the MAV Board to migrate from a platform of
Lotus Notes to Microsoft. Work also commenced on the
development of a new file classification system and identification
of records management needs in the lead up to a tender for a
new records management system in 2005/06.
In 2005/06 further work will be undertaken to strengthen internal
policy and procedures, and develop an appropriate and equitable
remuneration structure for the organisation.
MAV ANNUAL REPORT 2004/5
29
THE
MAV
PEOPLE
AS AT 30 JUNE 2005
ALLAN
HOLMES
TANIA
STRUZINA
PAULA
GILES
JOHN
RYAN
JULIE
JACKSON
JOHN
HENNESSY
GAVIN
MAHONEY
IMOGEN
BAGHURST
ADAM
MAXEY
SARAH
FAGAN
ALISON
STANDISH
VICKY
MAVROS
ADRIENNE
STEPHENS
JODIE
DELANEY FIONA
McALLISTER
AMY
McDONALD
ALISON
RAYMOND
CHRISTINE
JONES
MAV STATE COUNCIL
MAV MANAGEMENT
BOARD
FINANCE &
INSURANCE
CONSULTANT#
SENIOR
ECONOMIST
EXECUTIVE
ADVISER
CHIEF EXECUTIVE
OFFICER
EXECUTIVE
ASSISTANT TO CEO
DIRECTOR
POLICY, PROJECTS
& COMMERCIAL#
COMMUNICATIONS
ADVISERS
2 EFT
SECTOR
DEVELOPMENT
CONSULTANT#
MANAGER
CORPORATE &
SECRETARIAT
MANAGER
PEOPLE &
PERFORMANCE
PROJECT MANAGER
MANAGER
ENVIRONMENT
POLICY & PROGRAMS
SENIOR ADVISER
SOCIAL POLICY
SENIOR ADVISER
PLANNING
VOLUNTEERING
IT PROJECT
PROJECT MANAGER* CONTRACTOR#
EVENTS MANAGER
POLICY ANALYSTS
3.4 EFT
EXECUTIVE OFFICER
ECOBUY*
DISABILITY
PROJECT OFFICER*
2030 SENIOR
LIAISON OFFICER*
VOLUNTEERING
PROJECT OFFICER*
PROJECT OFFICER
IMFMP
PROJECT OFFICER*
RESOURCE
OFFICERS ECO-BUY
1.8 EFT*
PROJECT MANAGER
DATABASE
ADMINISTRATOR
PROJECT MANAGER
CLEARWATER*
EARLY YEARS
PROJECT OFFICER*
ACCOUNTING
SUPPORT OFFICER
PROJECT OFFICER
CLEARWATER*
CEGS & HACC
PROJECT OFFICER*
CORPORATE
SUPPORT
NRM FACILITATOR*
POSITIVE AGEING
PROJECT OFFICER*
RECEPTIONIST
ABM EXECUTIVE
OFFICER*
PROJECT OFFICER
*Grant funded
#Consultants
URBAN RURAL LINKS
COORDINATOR*
SARAH
JONES
TIMBERTOWNS
EXECUTIVE
OFFICER*
DAVID
DENNIS
NAREE
ATKINSON
PROJECT MANAGER
DOMESTIC WASTE*
WATER
KELLIE
KENDRICK
LIZ
HOGAN
ELEANOR
JACOBS
LIZ
JOHNSTONE
MAY YIN
POSARNIG
CLARE
HARGREAVES
TAIMOR
HAZOU
ROB
SPENCE
SIMON
MORGAN
LUKE
MURPHY
GILL
PISANI
ROD
MUMMERY
OWEN
HARVEY-BEAVIS
MAV ANNUAL REPORT 2004/5
31
committees
As the peak body for local
government, the MAV is regularly
asked by both State and Federal
governments, and related
agencies, to provide nominations
and represent the sector on a
range of external committees.
External
committees
A current or former councillor,
council officer, MAV Board member
or MAV employee represented
local government on the following
committees during 2003/04
Accessible Built Environment
Working Group
Advisory Committee on Public
Libraries
Agricultural Subcommittee of the
State Emergency Recovery Planning
Committee
Alpine Advisory Committee
Animal Welfare Advisory Committee
Asbestos Management Working
Group
Association of Bayside Municipalities
Association of Regional Waste
Management Groups
Australian Building Codes Board
Australian Environmental Labelling
Association Advisory Committee
Country Town Water Supply and
Sewerage Project Steering Committee
Implementation Steering Committee
Metropolitan Fire and Emergency
Service Board
Telecommunications Working Group
Timber Towns Victoria
Development Assessment Forum
DHS Industry Development Plan
Reference Group
Metropolitan Transport Forum
Transport Safety Committee
Ministerial Advisory Council on
Public Libraries
DSE Continuous Improvement Program
Urban Rural Links Steering
Committee
Ministerial Drought Taskforce
DSE Urban Stormwater & Water
Conservation Fund Steering
Committee
Ministerial Employment Advisory Panel
VicHealth Planning and Health
Advisory Panel
DE&T/MAV Joint Working Party
DSE Sustainability In Built
Environment Reference Group
Eastern Water Recycling Proposal
Steering Committee
EcoRecycle Victoria Liaison Group
Emergency Management Manual
Victoria – Strategy Group
Environmental Weeds Working
Group Committee
EPA On-site Wastewater Advisory
Group
Fire Refuges in Victoria Steering
Committee
Flood Warning Consultative
Committee Victoria
Hospital Admission Risk Program
(HARP) Reference Group
Influenza Pandemic Planning
Committee
Infringements Framework Reference
Group
Intergovernmental Agreement
Working Party
Broiler Code Committee
LGIIP Assessment Panel for
Compliance
Building Regulation Advisory
Committee
LGPro Human Resources Special
Interest Group
Business Skills Victoria Board
Library Network Committee
Central Region Sustainable Water
Use Plan Advisory Group
Local Sustainability Accord
Committee
Commonwealth Aged Care Advisory
Committee
Commonwealth Aged Care Planning
and Building Approvals Issues Forum
Commonwealth Children’s Services
Planning Advisory Committee
Community Health Policy Reference
Group
Community Safety Month Reference
Group
Community Services and Health
Industry Training Board
M2006 Commonwealth Games
Emergency Management Services
Working Group
MAV/DHS Disability Services
Working Party
MAV/DHS HACC/Primary Care
Working Party
MAV/DHS Community Care
Partnerships Working Party
Melbourne 2030 Implementation
Reference Group
Melbourne Transport Committee
Coordination Committee for Local
Government
Melbourne Water/VicSES Liaison
Group
Country Fire Authority Board
Melbourne Water Drainage
32
MAV ANNUAL REPORT 2004/5
Model Split Contracts Advisory Group
Municipal Emergency Management
Enhancement Group
Municipal Emergency Management
Plan Audit Committee
National Local Government Training
& Professional Development Group
National Packaging Covenant Council
National Parks Advisory Council
Native Vegetation Exemptions Review
Advisory Group
Towards Zero Waste Working Party
VicRoads Board (Roads Corporation
Advisory Board)
Victorian Advisory Committee for
General Practice Sub-committee
Victorian Agricultural Chemicals
Advisory Committee
Victorian Catchment Management
Stakeholders Forum
Victorian Childcare Industry Liaison
Group
Victorian Community Care Coalition
Native Vegetation Permit Tracking
System Advisory Group
Victorian Emergency Management
Council
Neighbourhood Environment
Improvement Plans Committee
Victorian Feedlot Committee
Victorian Food Safety Council
Personal Emergency Plans Project
Steering Committee
Victorian Jurisdictional Recycling
Group
Place Names Committee
Victorian Litter Action Alliance
Advisory Group
Port Phillip & Westernport Catchment
Management Authority Local
Government Working Group
Victorian Local Government
Disability Planners' Network
Public Administration and Emergency
Services
Victorian Local Sustainability Accord
Committee
Public Land Stewardship Reference
Group
Victorian Ministerial Housing Council
Public Records Advisory Committee
Public Transport Access Committee
Roundtable on Inclusive Arts,
Tourism, Sport and Recreation for
People with a Disability
Rural Disputes Settlement Centre
Working Group
Rural Workforce Agency Victoria
Saferoads Partnership
State Emergency Mitigation Committee
State Emergency Recovery Planning
Committee
State Emergency Relief Sub-committee
State Flood Policy Committee
State of the Parks Stakeholder
Reference Group
State Weed Policy Committee
Stormwater Industry Association of
Victoria
Tackling Weeds on Private Land
Initiative Stakeholder Reference Group
Victorian Road Based Public
Transport Advisory Committee
Victorian Road Freight Advisory
Council
Victorian Road Safety Reference Group
Victorian Settlement Planning
Committee
Victorian Speed Limit Advisory
Group
Victorian Universities Rural Health
Consortium
Vision Super Board
Water Quality Improvement Plan
Steering Committee [?]
Women’s Participation in Local
Government Coalition
Working Party on Council Sports
Facility Tenancy Agreements –
Insurance & Indemnities
Yarra Study Liaison Group
Year of the Built Environment
Steering Committee
Internal
committees
The MAV has established a
number of advisory committees
to assist the organisation in
developing policies. These
committees serve to benefit the
local government sector by
providing opportunities for the
exchange of information. MAV
advisory committees include
MAV Economics and Finance
Advisory Group
Provides strategic advice to the
MAV Board and provides support
to achieve objectives relating to
financial sustainability for local
government, including the
development of campaigns,
submissions and analysis of issues.
MAV Human Services
Portfolio Committee
Provides strategic advice to the
MAV Board on social policy and
human services issues,
particularly in intergovernmental
relations. The committee also
facilitates consultation with
regional groupings of councils
on current statewide issues.
MAV Planning Advisory
Group
Provides strategic advice to the
MAV Board on strategic and
statutory planning issues
impacting on local government
and guides MAV policy and
position development on
planning related issues.
MAV Professional
Development Reference Group
Provides input into the MAV’s
professional development
program for councillors,
identifies ongoing areas of
need within the sector to be
addressed, and encourages
participation of colleagues in
the MAV professional
development program.
MAV Strategic Environment
Advisory Group
Provides advice to the MAV
Board on environmental issues
of importance to local
government and the needs and
issues of members for delivery of
environmental outcomes.
to furthering reconciliation
between non-Indigenous and
Indigenous Victorians.
MAV Strategic Transport and
Infrastructure Advisory Group
Provides advice to the MAV on
infrastructure and transport issues
impacting on local governments
and assists the MAV Board to
carry forward key policies and
campaigns in this area.
Local Government Indigenous
Network
Network of councillors and council
officers interested in promoting
Indigenous issues within Victorian
local government.
Other MAV
Committees
Clearwater (formerly
Stormwater Capacity
Building) Steering Committee
Committee directs development
and delivery of statewide
education and training program
for local government and
industry professionals in
sustainable management of
urban stormwater. Comprises
EPA, Melbourne Water,
Stormwater Industry Association
of Victoria and LGPro.
EPA/MAV State Environmental
Protection Policy
Implementation Steering
Committee (SEPP)
Comprises senior MAV and EPA
staff to oversee development
and delivery of joint project
aimed at improving local
government implementation of
the SEPP (Waters of Victoria).
Good Governance Advisory
Group
Joint initiative of MAV, VLGA,
LGPro and the Department for
Victorian Communities.
Indigenous Interagency
Coordination Committee
Comprises representatives from
State and Federal government
agencies involved in service
delivery to Indigenous people,
and representatives from local
government. Role to assist local
government and other agencies
to maintain and improve
governance responsibilities for
Indigenous communities, and
whole-of-government approach
MAV Audit Committee
Advisory committee established by
MAV Board to oversee and make
recommendation to the MAV on
potential risk exposures to the
organisation and its management.
MAV Competition Committee
Discussion and consultation on
competition policy and Local
Government Improvement
Incentive Program (LGIIP), and
issues of training, implementation
and compliance.
MAV/EcoRecycle EcoBuy
Steering Committee
Representatives from funding
partners, provides direction for
EcoBuy program.
MAV/EcoRecycle Victoria
Liaison Committee
Quarterly forum for senior MAV
staff, EcoRecycle Victoria and the
EcoRecycle Board to consider
and advance strategic waste
management issues of mutual
interest and relevance to both
State and local government.
MAV Insurance Committee
Management Committee
established under deed by the
MAV Board to oversee
arrangements for Civic Mutual
Plus (CMP) and the Municipal
Officers Fidelity Guarantee
Fund, and provide
recommendations where
required to the MAV Board.
MAV IT Management
Committee
Plans, coordinates and supports
information technology and
communication initiatives for
better delivery of council services
and to reduce ITC costs.
MAV Library Working Party
Provides support to the MAV on
campaigning for improved
outcomes for councils in public
library funding, policy input and
planning.
MAV PERIN Reference Group
Provides advice to the MAV on
issues with the infringement
system and the enforcement of
outstanding infringement notices.
It is composed of council officers
from predominantly metropolitan
Melbourne.
MAV/VicRoads Liaison Group
Facilitates regular consultation
between the MAV and VicRoads at
executive level to identify issues of
mutual concern and to establish
arrangements for more detailed
consideration and resolution.
National ECO-Buy Alliance
Aims to support and partner
other states and territories in
establishment of successful green
purchasing programs.
Membership comprises the MAV,
Western Australian Local
Government Association
(WALGA), Local Government
Association Queensland
(LGAQ), ACT Chief Minister’s
Department, Local Government
& Shires Association of NSW,
NSW Buy Recycled Alliance and
NZ Ministry of Environment.
Public Lighting Reference
Group
Council officers actively involved
in advancing public lighting
issues. Issues include energy
efficiency of public lighting,
pricing systems and market
regulation.
Victorian Local Sustainability
Network
Group of councils and
stakeholders actively pursuing
local sustainability approaches
such as Local Agenda/Action
21. Meetings offer networking
opportunities for exchange of
ideas on sustainability.
MAV ANNUAL REPORT 2004/5
33
financial
overview
Structure and accountabilities
In accordance with the requirements of the Municipal Association Act
1907 and applicable accounting standards, the economic activity of
the Municipal Association of Victoria (MAV), the Municipal Officers’
Fidelity Guarantee Fund and Local Government Mutual Liability
Insurance Scheme (Civic Mutual Plus) is reported to the members as
an economic entity within the annual accounts. The combined
activities are shown as the consolidated account and the Municipal
Association of Victoria, being the parent entity, is shown separately
Financial results – MAV
as the MAV General Fund.
In 2005, the MAV incurred a deficit for the year of $166,370 (2004
The MAV represents local government in Victoria. One of the
$38,479). The result, inclusive of grants received and expended for
activities of the MAV is to seek out, apply for, and administer grant
the 2005 year, was a surplus of $718,583 (2004 $223,900 deficit)
funds for and on behalf of its members for the benefit of local
with net assets rising to $4.43 million (2004 $3.71 million).
government and the Victorian community. This activity of the
During 2005 the MAV received a further $4.95 million (2004 $2.27
Association has been accounted for as a segment and included at
million) in grants from both Federal and State governments. It was a
Note 21 in the financial statements.
year when the MAV delivered on several significant projects that had
The MAV financial statements also include activities of its insurance
been funded by grants from both Federal and State governments.
business, MAV Insurance, which operates the Municipal Officers’
These grants are managed by the MAV for the benefit of the local
Fidelity Guarantee Fund and the Local Government Mutual Liability
government sector and Victorian communities. The surplus relating
Insurance Scheme (Civic Mutual Plus) for the benefit of councils and
to grant activities was $885,000 for the year ended 30 June 2005
other local authorities. Both insurance activities are mutual funds
as compared to a deficit in 2004 of $262,000.
and are subject to the overseeing of the Association’s Board of
Consequently, as at 30 June 2005 the MAV has a commitment to
Management, which acts through a committee of management
expend $3.0 million (2004 $2.1 million) of grants funds on projects
constituted by the Board (the MAV Insurance Committee of
for the benefit of local government and Victorian communities.
Management).
During 2005 the MAV achieved solid project delivery and firm
The MAV Insurance Committee of Management carries out
cost control.
overseeing and contract management of the operational activities of
both the Municipal Officers’ Fidelity Guarantee Fund and Civic
The operating surplus of the consolidated entity was $1.89 million
Mutual Plus. Jardine Lloyd Thompson Pty Ltd provides the claims and
(2004 $2.46 million). This had the affect of increasing the net assets
risk management services under contract to the MAV.
of the MAV from $12.69 million in 2004 to $14.57 million this year.
34
MAV ANNUAL REPORT 2004/5
Civic Mutual Plus
Prudent management and improved performance of the fund’s
members has seen an improvement in this years result.
Financial results – MAV Insurance
The MAV Insurance business consists of Civic Mutual Plus and The
Municipal Officers’ Fidelity Guarantee Fund. Under the Municipal
Association Act 1907 the MAV is required to provide public liability
and can provide fidelity insurance to local government and to other
statutory authorities.
MAV Insurance is not subject to Australian Prudential Regulatory
Authority (APRA) regulations. However, the MAV Insurance
Committee of Management views compliance with these regulations
as being good business governance and practice and has a policy of
complying with the spirit of the APRA regulations.
The MAV holds an Australian Financial Services Licence (No 27143).
The AFSL ensures that MAV Insurance maintains the highest
standards of governance, provides operational efficiency and
enhances future viability of the MAV Insurance business for the
betterment of both the Scheme and Fund members.
2005 was a year of consolidation for the insurance industry. With
prudent financial management, MAV Insurance has achieved an
excellent outcome for the year. The introduction of tort reform is
starting to provide financial benefits to Civic Mutual Plus. In addition,
evidence suggests that tort reform has also had a positive impact on
the under-excess claims paid by CMP Scheme members.
The combined surplus for 2005 was $1.7 million (2004 $2.7
million). The net asset position at the end of 2005 was $10.14
million (2004 $8.97 million).
The fund is still dealing with
· the failure of two insurance companies that directly impacted
this year’s results
· the abolition of the non feasance defence for road authorities.
The Board of the MAV has considered these matters carefully, and
has decided to take a conservative approach by providing fully for
the potential losses from these occurrences.
The general insurance environment also improved and together with
strong financial management this has led to stable returns for the year.
The operating surplus of Civic Mutual Plus for this year was $1.4
million (2004 $2.8 million).
The surplus of assets against liabilities at 30 June 2005 was $10
million (2004 $8.6 million).
Municipal Officers’ Fidelity Guarantee Fund
During 2005 the Fidelity Guarantee Fund again experienced higher
reinsurance premium payments, up by 23.8%, as against an
increase of 32.5% in 2004. The year included continuing high
claims expenditure – $412,833 in 2004 to $329,786 in 2005. The
major fraud claims on the Fund during the year were in the area of
electronic funds transfer.
The operating deficit for 2005 was $215,289 (2004 deficit
$111,264). The net asset position of the Fund reduced to
$146,816 (2004 $362,105) with cash assets amounting to
$352,506 (2004 $236,108).
MAV ANNUAL REPORT 2004/5
35
guide to the
financials
The financial report is a key part of the Annual Report of the
Municipal Association Victoria (MAV). It shows how the MAV
performed financially during the 2004/05 financial year and the
position at the end of the financial year (30 June 2005).
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 79 local governments authorities around Victoria. The
MAV also runs the MAV Insurance business. The business consists of
two entities, Civic Mutual Plus (public liability and professional
Financial Statements
indemnity insurer) and the Municipal Officers’ Fidelity Guarantee
Fund. The MAV also manages grants received from Federal and
1. Statement of financial performance
State governments for and on behalf of the local government sector.
The statement of financial performance shows
· The MAV’s revenue from its various activities
All these different interests are accounted for separately and then
consolidated into the MAV financial report.
· The expenses incurred in running the MAV and its business activities.
The MAV is committed to accountability in all respects of its
operations. It is with this in mind that this plain English guide has
been developed to assist readers understand and analyse the
financial report.
These expenses relate only to the business operations and do not
include the costs associated with the purchase of assets. The expense
item ‘depreciation’ spreads the cost of the assts over the estimated
life of the assets.
What is contained in the annual
financial report?
2. Statement of Financial Position
The Statement of Financial Position shows the assets the Association
owns and the liabilities it owes a the 30th June.
The financial report contains three main sections – the financial
statements, the notes to the financial statements, and the statements
by the directors and auditors.
The statement separates the assets and liabilities into current and
non-current. Current means those assets or liabilities that will be
either collected or that fall due within the next twelve months.
The financial statements include the statement of financial performance,
statement of financial position and statement of cash flow.
The components of the Statement of Financial Position are
The notes to the financial statements detail the MAV’s accounting
policies and sets out the detailed values that are carried into the
financial statements.
The statements by directors and auditors provide the views of the
directors of the MAV and the independent auditors with regard to the
financial report. The statement by directors confirms the view of the
directors that the financial report provides a true and fair view of the
financial performance, financial position and solvency of the
Association. The audit report by the independent auditor expresses
the auditor’s opinion as the whether the financial statements present
fairly the financial position of the Association as at 30 June 2005,
and the results of the various business operations and cash flows for
the year ended 30 June 2005 in accordance with Accounting
Standards and other mandatory professional report requirements.
36
MAV ANNUAL REPORT 2004/5
2.1Current and Non-Current Assets
Cash Assets include cash held in the bank, petty cash, cash deposits
and cash investments.
Receivables are monies owned 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, trademarks, web site and intranet
and motor vehicles owned by the Association.
Intangible Assets are trademarks, educations programs and other
intellectual property owned by the Association.
Other Financial Assets represent the value of shares held by the
Association in the Co-operative Purchasing Scheme.
2.2Current and Non-Current Liabilities
Bank 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 is 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 owed to staff.
Provision for Claims Outstanding represents insurance claims
reported by members together with an estimate of claims incurred
but not yet reported including an estimate of the costs of settlement
for these claims.
Other Liabilities represent insurance premiums received in advance
and fees received in advance for seminars and conferences to be
Notes To The Financial Statements
held in the 2005 financial year.
2.3Total Equity
Total Equity describes the components making up net assets. In effect,
the only component that comprises Total Equity is Accumulated
Surplus which is the value of all net assets accumulated over time.
3. Statement of Cash Flows
The Statement of Cash Flows summaries 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 is
prepared on an accrual basis.
Cash is derived from, and is used in, two main areas:
3.1Cash Flows from Operating Activities
Receipts relate to al cash received into the Association’s bank
account from members and others who owed money to the
Association in the form of fees or premiums. Receipts also include
interest earned from the Association’s cash investments. It does not
include cash paid for 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 receipts
from the purchase of assets.
3.2Cash Flows from Investing Activities
This relates to cash receipts and cash payments resulting from either
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 its
debts and liabilities.
To enable the reader to understand the basis on which the values
shown in the statement are established, it is necessary to provide
details of 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 note numbers are shown beside the relevant items in the
statement of financial performance, statement of financial position
and the statement of cash flows.
Where the Association wishes to disclose other information, which
cannot be incorporated into the statements, this is shown in the notes.
The notes should be read at the same time as reading the financial
statement in order to get a full and clear picture of the financial statement.
Statements By Directors And Auditors
Statement By Directors
The Statement By Directors is made by two directors on behalf of the
MAV Board. It states that in the opinion of the Board the financial
statements present a true and fair view of the operations of the
Association and that the Association can pay its debts as and when
they fall due.
Independent Audit Report
This report is the independent auditor’s opinion on the financial
statements. It provides the reader of the financial statements with a
completely independent opinion of the financial statements of the
Association. The opinion covers all statutory and accounting
standards and compliance requirements as well as providing a view
on the truth and fairness of the financial statement.
MAV ANNUAL REPORT 2004/5
37
glossary
ABCB – Australian Building Codes Board
ABM – Association of Bayside Municipalities
ALGA – Australian Local Government Association
ALGWA – Australian Local Government Women's Association
CCC – Community Care Coalition
CEGS – Culturally Equitable Gateways Strategy
CFM – Community Forest Management
CSF – Community Support Fund
DHS – Department of Human Services
DoI – Department of Infrastructure
DSE – Department of Sustainability and Environment
DVC – Department for Victorian Communities
EPA – Environment Protection Authority
EPC – Environment Protection Council
FDC – Family Day Care
GGAG – Good Governance Advisory Group
HACC – Home and Community Care
IMFMP – Integrated Municipal Fire Management Planning
LGAQ – Local Government Association of Queensland
LGIIP – Local Government Improvement Incentive Program
LRRN – Local and Regional Resource Networks
MCHS – Maternal and Child Health Services
MEYP – Municipal Early Years Plans
MFESB – Metropolitan Fire and Emergency Services Board
NCP – National Competition Policy
NPC – National Packaging Covenant
OESC – Office of the Emergency Services Commissioner
PAG – Planning Advisory Group
PBS – Performance Based Standards
PCAC – Premier’s Children’s Advisory Committee
PERIN – Penalty Enforcement by Registration of Infringement Notice
RIS – Regulatory Impact Statement
RM – Road Management
RMPs Road Management Plans
R2R – Roads To Recovery
SEPP – State Environmental Protection Policy
URL – Urban Rural Links
SIAV – Stormwater Industry Association of Victoria
VCAT – Victorian Civil and Administrative Tribunal
VEC – Victorian Electoral Commission
VLGA – Victorian Local Governance Association
WCMA – Wimmera Catchment Management Authority
WALGA – Western Australian Local Government Association
WPILGC – Women’s Participation in Local Government Coalition
38
MAV ANNUAL REPORT 2004/5
Published by
Municipal Association of Victoria
Level 12, 60 Collins Street
Melbourne 3000
Telephone: 03 9667 5555
Facsimile: 03 9667 5550
GPO Box 4326
Melbourne 3001
E-mail: inquiries@mav.asn.au
Website: www.mav.asn.au
Writers
Costigan & Murphy
Photography
Steven Diffey Photography
Design
Frank Design Pty Ltd
MAV
FINANCIAL
REPORT
2005
MAV ANNUAL REPORT 2004/5
39
STATEMENT OF FINANCIAL PERFORMANCE
FOR THE YEAR ENDED 30 JUNE 2005
CONSOLIDATED
NOTE
2005
$
MAV - GENERAL FUND
2004
$
2005
2004
$
$
REVENUE FROM ORDINARY ACTIVITIES
2, 3
61,565,779
49,946,566
9,687,690
7,277,598
EXPENSES FROM ORDINARY ACTIVITIES
4(b)
59,680,127
47,490,651
8,969,107
7,501,498
2
1,885,652
2,455,915
718,583
(223,900)
16
1,885,652
2,455,915
718,583
(223,900)
SURPLUS(DEFICIT) FROM ORDINARY ACTIVITIES
TOTAL CHANGES IN EQUITY
The accompanying notes form an integral part of these statements
MAV FINANCIAL REPORT 2004/5
41
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2005
CONSOLIDATED
NOTE
2005
$
MAV - GENERAL FUND
2004
$
2005
$
2004
$
CURRENT ASSETS
Cash Assets
8(a)
25,830,204
20,154,086
4,339,500
3,318,973
Receivables
9
40,483,814
44,048,992
802,376
508,235
Prepayments
TOTAL CURRENT ASSETS
280,168
114,823
280,168
114,823
66,594,186
64,317,901
5,422,044
3,942,031
51,970,077
44,626,582
NON-CURRENT ASSETS
Receivables
9
-
-
Property, Plant and Equipment
1(e),11
578,841
599,778
578,841
599,778
Intangibles
1(e),12
160,520
93,865
160,520
93,865
Other Financial Assets
10
TOTAL NON-CURRENT ASSETS
52,709,448
TOTAL ASSETS
10
45,320,235
119,303,634 109,638,136
10
10
739,371
693,653
6,161,415
4,635,684
CURRENT LIABILITIES
Payables
3,905,043
3,412,894
29,975,891
29,205,209
Premiums in Advance
10
Provision for Employee Entitlements
15
282,708
240,825
Provision for Claims Outstanding
13
17,015,589
13,780,202
Other Current Liabilities
88,140
TOTAL CURRENT LIABILITIES
51,267,371
1,049,983
472,462
-
282,708
240,825
-
-
111,064
88,140
111,064
46,750,194
1,420,831
824,351
124,300
NON-CURRENT LIABILITIES
Provision for Employee Entitlements
15
124,300
98,097
Provision for Claims Outstanding
13
53,153,955
50,101,954
Other Non-Current Liabilities
184,465
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
16
The accompanying notes form an integral part of these statements.
42
MAV FINANCIAL REPORT 2004/5
98,097
-
-
-
184,465
-
53,462,720
50,200,051
308,765
98,097
104,730,091
96,950,245
1,729,596
922,448
14,573,543
12,687,891
4,431,819
3,713,236
14,573,543
12,687,891
4,431,819
3,713,236
CONSOLIDATED STATEMENT OF CASH FLOWS
AS AT 30 JUNE 2005
CONSOLIDATED
NOTE
2005
$
MAV - GENERAL FUND
2004
$
2005
$
2004
$
CASH FLOW FROM OPERATING ACTIVITIES
RECEIPTS
Subscriptions, Grants and Fees
46,510,145
Investment Income
Excesses and Recoveries
45,117,397
10,580,819
1,036,681
880,295
192,915
15,318,370
12,705,898
7,780,746
211,212
-
-
PAYMENTS
Suppliers
(40,432,431) (38,717,627)
Claim Payments
(16,413,015) (15,984,094)
NET CASH PROVIDED BY/(USED IN)
OPERATING ACTIVITIES
8(b)
(9,409,575)
(8,683,478)
-
-
6,019,750
4,001,869
1,364,159
(691,520)
88,064
247,772
88,064
247,772
Payments for Fixed Assets & Intangibles
(431,696)
(568,337)
(431,696)
(568,337)
NET CASH USED IN INVESTING ACTIVITIES
(343,632)
(320,565)
(343,632)
(320,565)
NET INCREASE/(DECREASE) IN CASH HELD
5,676,118
3,681,304
1,020,527
(1,012,085)
20,154,086
16,472,782
3,318,973
4,331,058
25,830,204
20,154,086
4,339,500
3,318,973
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sale of Fixed Assets
Cash at Beginning of Year
CASH AT END OF YEAR
8(a)
The accompanying notes form an integral part of these statements.
MAV FINANCIAL REPORT 2004/5
43
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS AS AT 30 JUNE 2005
1
SUMMARY OF ACCOUNTING POLICIES
The financial report is a general purpose financial report which has been drawn up in accordance with Accounting Standards, Mandatory
Professional Reporting Requirements (Urgent Issues Group Consensus Views) and other relevant requirements.
The principal accounting policies adopted in preparing the financial report are stated to assist in a general understanding of the financial report.
Accounting policies have been consistently applied unless otherwise indicated.
(a) Basis of Accounting
The accounts have been prepared on the accrual basis using historical costs and, except where stated, do not take into account current
valuations of assets.
(b) Principles of Consolidation
The economic entity comprises the financial report of Municipal Association of Victoria and of its 100 percent controlled entities the Local
Government Mutual Liability Insurance Scheme (trading as Civic Mutual Plus, - CMP), and Municipal Officers’ Fidelity Guarantee Fund.
A controlled entity is any entity controlled by Municipal Association of Victoria (Incorporated under the Municipal Association Act 1907). Control
exists where Municipal Association of Victoria has the capacity to dominate the decision-making in relation to the financial and operating policies
of another entity so that the other entity operates with Municipal 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.
(c) Change in Accounting Policy – Insurance Activities
The MAV Insurance Committee requested the independent actuary to provide an estimate of the provision required to cover claims settlement
administrative expenses that would be incurred in managing all outstanding claims in the event that Civic Mutual Plus winds down. This practice
is consistent with insurance industry standards. In accordance with the recommendation of the independent actuary the Committee has decided
to provide 4% of the gross outstanding claims estimates (including gross IBNR and Development) as the provision for claims settlement
administration costs. This provision has been established over the last two-years. As a result of the change in accounting policy the surplus for the
2005 financial has been reduced by $163,001(2004 $1,257,798)
(d) Income Tax
The Association is exempt from income tax, in accordance with sections 50-10 and 50-25 of the Income Tax Assessment Act 1997
(e) Property, plant, equipment, trademarks and intellectual property
Property, plant, equipment, trademarks and intellectual property are carried at cost, less where applicable, any accumulated depreciation or
amortisation. The carrying amount of property, plant, equipment, trademarks and intellectual property is reviewed annually by directors to ensure
it is not in excess of the recoverable amount from those assets. The recoverable amount is assessed on the basis of the expected net cash flows
that will be received from the assets employment and subsequent disposal. The expected net cash flows have not been discounted to present
values in determining recoverable amounts.
On disposal of an item of property, plant, equipment, trademarks and intellectual property the difference between the sales 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/amortised on a straight line basis
over their estimated useful lives to the entity commencing from the time the asset is held ready for use. Leasehold improvements are depreciated
over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.
THE FOLLOWING DEPRECIATION RATES ARE IN USE:
20%
Furniture and Equipment at cost
20 – 33%
Motor Vehicles at cost
20%
Interactive Communications System at cost
33%
Software, Web Site and Intranet at cost
Trademarks, Intellectual Property & Educational programs at cost
44
ANNUAL RATE
Leasehold Improvements at cost
MAV FINANCIAL REPORT 2004/5
33%
10 – 20%
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005
(f) Leases
A distinction is made between finance leases which, effectively transfer from the lessor to the lessee substantially all the risks and benefits
incidental to ownership of the leased property, without transferring the legal ownership, and operating leases 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 an asset at the beginning
of the lease term and amortised on a straight line basis over the expected economic life. A corresponding 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 derived from the leased property.
Lease incentives received under operating leases are recognised as a liability.
(g) Employee Entitlements
The 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 months of 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 future cash outflows in respect
of services provided up to balance date. Liabilities are determined after taking into consideration estimated future increase in wages and salaries
and past experience regarding staff departures. Related on-costs are included.
Contributions made to an employee superannuation fund are charged as expenses when incurred.
(h) Revenue Recognition
INTEREST REVENUE
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial asset.
GRANT REVENUE
Grants are recognised as revenue when the Association obtains control over the assets comprising the contribution. Control ov er the grants is
normally obtained upon their receipt or upon prior notification that a grant has been secured.
SUBSCRIPTIONS AND SPONSORSHIPS
Subscriptions and Sponsorships are recognised on an accrual basis.
SUMMARY OF ACCOUNTING POLICIES RELATING TO INSURANCE ACTIVITIES
(i) Premiums
Premiums comprise amounts charged to members of the Schemes for policy cover, net of amounts returned to members as bonuses. The earned
portion of premiums received is recognised as revenue. Premiums are treated as earned from date of attachment of risk. The pattern of
recognition over the policy is based on time, which is considered to closely approximate the pattern of risks undertaken.
(j) Premiums Receivable
During 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.
(k) Claims
Claims incurred expense and liability for outstanding claims are recognised in respect of direct business. The liability covers claims incurred but
not yet paid, incurred but not yet reported claims, and the anticipated direct and indirect costs of settling those claims. Claims outstanding are
assessed by reviewing individual claim files and estimating claims not notified and settlement costs using statistical and actuarial techniques. The
liability for outstanding claims is measured as the present value of the expected future payments, reflecting the fact that all the claims do not
have to be paid out in the immediate future. The expected future payments are estimated on the basis of the ultimate cost of settling 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% (2004 6%)and the discount rate at 5.2% (2004 5.5%)
Superimposed inflation refers to factors such as trends in court awards, for example increases in the level and period of compensation for injury.
The expected future payments are then discounted to a present value at the reporting date using discount rates based on the investment
opportunities available to the organisation on the amounts of funds sufficient to meet claims as they became payable.
Details of rates applied are disclosed in note 13.
MAV FINANCIAL REPORT 2004/5
45
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005
(l) Excesses and Recoveries
Excesses and other recoveries are brought to account when established at the time of consideration of the claims details and only where a
definite set of circumstances exist which will support the credibility of the justification of obtaining either a recovery of excess from scheme
member or recovery of claim cost from a third party.
(m) Revenue Recognition
Revenue is recognised to the extent that it is probable that the economic benefit will flow to the entity and the revenue can be reliably measured.
The following specific recognition criteria must also be met before revenue is recognised.
(i) Premiums – recognised in the period the fund is at risk.
(ii) Excesses and Recoveries – on an accruals basis.
(iii) Investment Income – on an accruals basis including adjustments to bring values of cash backed unit trusts to account as investment income.
(n) Provision for Reinsurance Recoveries
During the 2001 financial year two of the participants in the Scheme’s reinsurance program were placed into the hands of liquidators. These
companies were part of the reinsurance programs in fund years from 1994 to 1998. The Directors have determined that sufficient information to
reasonably estimate the extent and timing of the return to the Scheme from the liquidators of these companies is not currently available. The
Directors therefore determined in the 2001 year that the most prudent course of action was to provide against 100% of the estimated future
recoveries due from these insurers. The Directors continue to constantly monitor the position with a view to ensuring that the Scheme takes all
reasonable 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 liquidators to date regarding potential
returns to unsecured creditors is not considered to be sufficient for the Board to make any change 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 the policy of providing against
100% of the estimated future recoveries due from these insurers is continuing.
(o) Investment Income
Investment income is recognised on a time proportionate basis that takes into account the effective yield on the financial asset.
(p) Other Financial Assets
Investments are valued at net market value at balance sheet date. Investment income includes interest received and receivable on investments
and changes in net market values of investments in unit trusts. The schemes have adopted a policy of investing in secure investments backed by
fixed interest securities of amounts and terms broadly matching its liabilities for claims and unearned contributions.
(q) Comparative Figures
Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year.
46
MAV FINANCIAL REPORT 2004/5
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005
CONSOLIDATED
2005
$
2
MAV - GENERAL FUND
2004
$
2005
$
2004
$
CONTRIBUTION TO OPERATING SURPLUS
CONTRIBUTION FROM INSURANCE ACTIVITIES
Premium income
30,360,081
Catastrophe insurance
29,784,412
(23,128,011) (22,511,076)
NET INCOME BEFORE CLAIMS
7,232,070
Claims expense (Note 4(a))
7,273,336
(23,907,535) (13,906,333)
Excesses and Recoveries
21,206,941
12,561,825
NET CLAIMS EXPENSE
(2,700,594)
(1,344,508)
4,531,476
5,928,828
848,927
674,730
UNDERWRITING RESULT
Investment income
Reduction in Doubtful Reinsurance Debts
Administration and general expenses
INSURANCE ACTIVITY OPERATING SURPLUS / (DEFICIT)
PARENT ENTITY SURPLUS / DEFICIT
OPERATING SURPLUS
355,377
36,946
(4,568,711)
(3,960,689)
1,167,069
2,679,815
718,583
(223,900)
1,885,652
2,455,915
CONSOLIDATED
2005
$
3
MAV - GENERAL FUND
2004
$
2005
2004
2,030,588
2,020,263
$
$
REVENUE FROM ORDINARY ACTIVITIES
REVENUES FROM OPERATING ACTIVITIES
Subscriptions/premiums
32,324,809
31,804,675
Insurance excesses and recoveries
21,206,941
12,561,825
1,190,426
1,092,588
1,190,426
1,092,588
Seminars & sale of publications
706,482
629,599
706,482
629,599
Project, sponsorship and management income
227,048
461,355
699,048
813,354
4,769,193
2,269,166
4,769,193
2,269,166
60,424,899
48,819,208
9,395,737
6,824,970
1,052,816
879,586
203,889
204,856
88,064
247,772
88,064
247,772
Brokerage and Management Fees Income
Grant income
Total Revenue from operating activities
-
-
REVENUES FROM NON-OPERATING ACTIVITIES
Investment Income
Proceeds from Sale of Non Current Assets
TOTAL REVENUE FROM OUTSIDE THE
OPERATING ACTIVITIES
TOTAL REVENUE FROM ORDINARY ACTIVITIES
1,140,880
1,127,358
291,953
452,628
61,565,779
49,946,566
9,687,690
7,277,598
CONSOLIDATED
NOTE
2005
$
2004
$
4(a)CLAIMS EXPENSES
Paid
Outstanding claims at end of financial year
Outstanding claims at beginning of financial year
TOTAL CLAIMS EXPENSES
13
17,620,147
17,193,571
70,169,544
63,882,156
(63,882,156) (67,169,394)
23,907,535
13,906,333
MAV FINANCIAL REPORT 2004/5
47
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005
CONSOLIDATED
2005
$
MAV - GENERAL FUND
2004
$
2005
$
2004
$
4(b)OPERATING EXPENSES
The following items have been recognised in the
operating surplus (deficit):
Claims expense
23,907,535
13,906,333
-
-
Reinsurance Expense
23,128,011
22,511,076
-
-
-
-
-
-
Doubtful Reinsurance Recovery
Stamp Duty
General Scheme Expenses
(36,946)
1,970,768
238,699
251,590
Salary and Payroll Costs
1,908,185
1,802,751
1,908,185
1,802,751
Grants, Projects and Legal
3,789,263
2,656,324
3,789,263
2,656,324
Administration
1,672,100
987,551
1,438,668
1,079,469
271,597
151,474
271,597
151,474
248,564
Operating lease rental expense
Superannuation Contributions
Scheme Management Fee
Meetings and Seminars
248,564
194,297
1,590,167
1,478,250
-
-
194,297
-
-
561,432
667,243
561,432
667,243
Written down value of Non- current assets disposed of.
64,382
216,488
64,382
216,488
Depreciation Leasehold Improvements
18,694
60,075
18,694
60,075
Depreciation Furniture and Equipment
49,650
90,585
49,650
90,585
Depreciation Motor Vehicles
92,045
74,959
92,045
74,959
Amortisation of Website, Educational programs
and Trademarks
Board of Management Expenses
ALGA Membership
TOTAL EXPENDITURE
5
(355,377)
1,968,553
52,076
27,082
52,076
27,082
167,600
179,315
167,600
179,315
306,951
301,436
306,951
301,436
59,680,127
47,490,651
8,969,107
7,501,498
LEASING COMMITMENTS
Operating lease commitments, being for lease of
computer and other equipment:
Not later than one year
22,372
14,000
22,372
14,000
Later than one year but not later than five years
11,186
21,000
11,186
21,000
TOTAL LEASE COMMITMENT
33,558
35,000
33,558
35,000
254,785
20,213
254,785
20,213
1,435,198
1,366,334
1,435,198
1,366,334
916,593
1,303,307
916,593
1,303,307
2,606,576
2,689,854
2,606,576
2,689,854
47,700
53,855
19,000
12,855
Operating lease commitments, being for lease of
leasehold premises:
Not later than one year
Later than one year but not later than five years
Later than five years
TOTAL LEASE COMMITMENT
6
AUDITORS REMUNERATION
Amounts received or due and receivable for audit services:
Audit Services
Other Services
48
MAV FINANCIAL REPORT 2004/5
-
-
-
-
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005
CONSOLIDATED
2005
$
7
MAV - GENERAL FUND
2004
$
2005
$
2004
$
SCHEME MANAGEMENT FEES
Scheme management fees are paid to the Scheme
Manager for:
8
Risk Management and Administrative Services
1,590,167
1,478,250
Claims management
1,301,046
1,209,478
TOTAL SCHEME MANAGEMENT FEES
2,891,213
2,687,728
NOTES TO STATEMENT OF CASH FLOWS
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 market value at balance date.
(a) Cash at balance date as shown in the Statement
of Cash Flows is reconciled to the related items
in the Financial Position as follows:
CONSOLIDATED
2005
$
MAV - GENERAL FUND
2004
$
2005
$
4,339,500
2004
$
Cash
15,293,081
10,708,619
Other financial assets
10,537,123
9,445,467
3,318,973
TOTAL CASH
25,830,204
20,154,086
4,339,500
3,318,973
-
-
(b) Reconciliation of Net Cash Used In Operating
Activities to Operating Surplus/(Deficit)
Surplus (Deficit) for year
1,885,652
2,455,915
718,583
(223,900)
Depreciation &Amortisation
212,465
252,566
212,465
252,566
Doubtful reinsurance
355,377
-
(Surplus)/deficit on disposal of assets
(23,683)
(31,285)
-
-
(23,683)
(31,285)
Changes in assets and liabilities
(Increase)/decrease in accounts receivable
(Increase)/decrease in prepayments
Increase/(decrease) in accounts payable
Increase / (decrease) in provision for employee entitlements
Increase/(decrease) in outstanding claims
Increase/(decrease) in accrued revenue
(4,271,131)
(294,140)
165,614
(165,345)
(41,254)
(165,345)
(41,254)
922,379
(210,634)
871,118
(514,450)
68,086
47,542
68,086
47,542
6,287,388
(3,287,238)
748,562
409,000
Increase/(decrease) in LAS Liability
CASH FLOWS FROM OPERATIONS
4,661,108
6,019,750
(22,925)
(253,851)
4,001,869
1,364,159
(92,502)
(253,851)
(691,520)
MAV FINANCIAL REPORT 2004/5
49
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005
CONSOLIDATED
NOTE
9
2005
$
MAV - GENERAL FUND
2004
$
2005
2004
$
$
RECEIVABLES
Reinsurance and other recoveries receivable
1(l)
Discount to Present Value
83,837,756
79,058,485
(11,115,162) (12,950,150)
72,722,594
66,108,335
Provision for Doubtful Reinsurance Recoveries
(6,832,663)
(7,188,040)
Net Reinsurance and other Recoveries Receivable
65,889,931
58,920,295
Excesses Recoverable
Premiums receivable
Other Receivables
1(j)
3,690,111
4,935,966
22,241,911
24,359,930
631,938
459,383
802,376
508,235
92,453,891
88,675,574
802,376
508,235
CURRENT
40,483,814
44,048,992
802,376
508,235
NON-CURRENT
51,970,077
44,626,582
TOTAL
92,453,891
88,675,574
29,975,891
29,205,209
Leasehold Improvements - at cost
397,008
397,008
397,008
397,008
Less accumulated depreciation
361,735
343,041
361,735
343,041
35,273
53,967
35,273
53,967
Furniture and Equipment -- at cost
456,236
388,028
456,236
388,028
Less accumulated depreciation
356,255
306,603
356,255
306,603
99,981
81,425
99,981
81,425
Motor vehicles - -at cost
512,116
448,546
512,116
448,546
Less accumulated depreciation
104,295
44,836
104,295
44,836
407,821
403,710
407,821
403,710
112,584
101,275
112,584
101,275
76,818
40,598
76,818
40,598
35,766
60,677
35,766
60,677
Interactive Communications System - at cost
287,913
287,913
287,913
287,913
Less accumulated depreciation
287,913
287,913
287,913
287,913
TOTAL PROPERTY, PLANT AND EQUIPMENT
578,841
TOTAL RECEIVABLES
REPRESENTED BY:
802,376
508,235
10 PREMIUMS IN ADVANCE
Contributions billed in advance
-
-
11 PROPERTY, PLANT AND EQUIPMENT
Software, Web site and Intranet
Less accumulated amortisation
-
50
MAV FINANCIAL REPORT 2004/5
599,778
578,841
599,778
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005
CONSOLIDATED
MAV - GENERAL FUND
2005
2004
2005
53,967
102,042
53,967
$
$
$
2004
$
(a) Reconciliations
Leasehold Improvements
Movements during the year
Beginning of year
Additions
-
12,000
102,042
-
12,000
Depreciation
18,694
60,075
18,694
60,075
End of year
35,273
53,967
35,273
53,967
Beginning of year
81,425
130,968
81,425
130,968
Additions
80,475
41,042
80,475
41,042
Write Offs
12,269
Depreciation
49,650
90,585
49,650
90,585
End of year
99,981
81,425
99,981
81,425
Beginning of year
403,710
275,405
403,710
275,405
Additions
195,634
419,751
195,634
419,751
Disposals
99,478
216,487
99,478
216,487
Furniture and Equipment
Movements during the year
-
12,269
-
Motor Vehicles
Movements during the year
Depreciation
End of year
92,045
74,959
92,045
74,959
407,821
403,710
407,821
403,710
Interactive Communications System
Movements during the year
-
Beginning of year
-
-
-
-
Depreciation
-
-
-
-
End of year
-
-
-
-
Software, Web site and Intranet
Movement during the year
Beginning of year
60,677
40,875
60,677
40,875
Additions
11,309
43,625
11,309
43,625
Amortisation
36,220
23,823
36,220
23,823
End of year
35,766
60,677
35,766
60,677
179,636
97,124
179,636
97,124
19,116
3,259
19,116
3,259
160,520
93,865
160,520
93,865
12 INTANGIBLE ASSETS
Trademarks and Intellectual Property
Less accumulated amortisation
MAV FINANCIAL REPORT 2004/5
51
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005
CONSOLIDATED
NOTE
2005
2004
$
$
13 OUTSTANDING CLAIMS
Reported claims outstanding
Provision for incurred but not reported claims,
claims development and settlement costs
Discount to present value
35,105,177
29,454,174
45,820,914
47,117,002
(10,756,547) (12,689,020)
Total Outstanding Claims
70,169,544
63,882,156
Current
17,015,589
13,780,202
Non-Current
53,153,955
50,101,954
TOTAL CLAIMS PROVISION
70,169,544
63,882,156
COMPRISING:
Actuarial advice indicates that:
(a) The average term to settlement of outstanding claims is 2.9 years (2004: 3.6 years).
(b) The following average inflation rates and discount rates were used in measuring the liability
for outstanding claims.
Inflation factor
Discount rate
1(k)
6.0%
6.0%
5.2%
5.5%
CONSOLIDATED
2005
2004
163,001
1,257,798
$
$
14 NET CLAIMS INCURRED
Allowance for claims settlement costs
Net claims incurred: current financial year incidents
Net Claims Settlement Costs
Reassessment for prior years claims
NET CLAIMS INCURRED
309,146
164,991
1,301,046
1,209,478
927,401
(1,287,759)
2,700,594
1,344,508
CONSOLIDATED
2005
$
MAV - GENERAL FUND
2004
2005
2004
$
$
$
15 PROVISIONS FOR EMPLOYEE ENTITLEMENTS
The aggregate amount of employee entitlement
liability is comprised of:
Provisions (Current)
282,708
240,825
282,708
240,825
Provisions (Non Current)
124,300
98,097
124,300
98,097
TOTAL EMPLOYEE ENTITLEMENTS
407,008
338,922
407,008
338,922
12,687,891
10,231,976
3,713,236
3,937,136
1,885,652
2,455,915
718,583
(223,900)
14,573,543
12,687,891
4,431,819
3,713,236
16 EQUITY
Balance at beginning of Year
Surplus (Deficit) from ordinary activities
BALANCE AT END OF YEAR
52
MAV FINANCIAL REPORT 2004/5
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005
17 Superannuation Contribution
The Municipal Association of Victoria contributes in respect of its employees to both the Local Authorities Superannuation Fund’s LASPLAN and
the Defined Benefits Fund.
The amount of superannuation contributions paid by the Municipal Association of Victoria to the Local Authorities Superannuation Fund’s
LASPLAN (or Accumulation Fund) and the Defined Benefits Fund during the reporting period was, $248,564 (2004 $194,297). The Municipal
Association of Victoria contributes to LASPLAN based on a fixed percentage of employee earnings in accordance with the Superannuation
Guarantee Legislation 9% in 2005 and 9% in 2004. No further liability accrues to the employer as the superannuation benefits accruing to
employees are represented by their share of the net assets of the Fund.
Contributions to the Defined Benefits Fund are determined by the Scheme’s actuary. The Funds liability for accrued benefits for defined benefit
and defined contribution members was determined in the 31 December 2004 actuarial investigation carried out by Local Authorities Super
pursuant to the requirements of Australian Accounting Standard AAS 25. The actuarial investigation calculated the Unfunded Superannuation
Fund Liability in the Defined Benefits to be $127 million. The Municipal Association of Victoria’s portion of this unfunded superannuation liability,
including contributions tax, was calculated to be $Nil (2004 $nil)
18 COMMITMENTS – UNEXPENDED GRANT MONIES
The Association receives grant monies from various Federal and State Government Departments on behalf of Local Government. Grant monies
received have been accounted for as income in accordance with Australian Accounting Standard 15 (AAS 15). At the end of the f inancial year
the Association had commitments to expend grants totalling approximately $2,987,029 (2004 $2,103,090) after deducting an estimate of costs
of administering the grants.
19 FINANCIAL INSTRUMENTS INTEREST RATE RISK EXPOSURE
The Group’s exposure to interest rate risk and the effective average interest rate for the classes of financial assets is set out below:
CONSOLIDATED
NonInterest
Earning
MAV - GENERAL FUND
Floating
Non-
Interest
Rate
Interest
Earning
Floating
Interest
Rate
2005
$
$
$
$
FINANCIAL ASSETS
Bank
100,001
Cash Investments
10,946,309
-
Receivables
92,453,891
Total Financial Assets
92,553,892
Weighted Average Interest Rate
92,730
14,783,894
-
25,730,203
4,246,770
802,376
-
895,106
4,246,770
5.8%
5.8%
FINANCIAL LIABILITIES
Outstanding claims
70,169,544
-
Unearned premiums/subscriptions
30,064,030
-
88,140
-
3,905,043
-
1,049,983
-
104,138,617
-
1,138,123
-
Accounts payable
Total Financial Liabilities
-
-
MAV FINANCIAL REPORT 2004/5
53
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005
CONSOLIDATED
NonInterest
Earning
MAV - GENERAL FUND
Floating
Non-
Interest
Rate
Interest
Earning
Floating
Interest
Rate
2004
$
$
$
$
FINANCIAL ASSETS
Bank
233,631
Cash Investments
7,389,646
-
Receivables
88,675,574
Total Financial Assets
88,909,205
233,631
12,530,809
-
19,920,455
Weighted Average Interest Rate
3,085,342
508,235
-
741,866
3,085,342
5.7%
5.86%
FINANCIAL LIABILITIES
Outstanding claims
63,882,156
-
Unearned premiums/subscriptions
29,316,273
-
111,064
-
3,412,894
-
431,321
-
96,611,323
-
542,385
-
Accounts payable
Total Financial Liabilities
-
-
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 Exposure
The maximum credit risk exposure on financial assets is represented by the carrying amounts of assets recognised in the Financial Position.
Concentrations of Credit Risk
Receivables due from Debtors in specific industry segments expressed as a percentage of the total balance receivable:
CONSOLIDATED
2005
$
MAV - GENERAL FUND
2004
$
2005
$
2004
$
State Government
-
-
8%
3%
Local Government
33%
38%
78%
25%
Reinsurers
67%
62%
-
-
Apart from the foregoing, the entity had no significant concentrations of credit risk with any single ‘counter-party or group of counter-parties’.
20 RENT FREE PERIOD
During the 2004 financial year the Association negotiated a new ten-year lease over the property at Level 12, 60 Collins Street with the Reserve
Bank of Australia. The lease commenced on 1 March 2004 and had 15 months rent free period up to 31 May 2005.
In accordance with UIG Abstract 3 “Lessee Accounting for Surplus Leased Space Under Non-Cancellable Operating Lease”, lease
incentives received have been recognised as a liability. This liability recognised in respect of the lease incentive will be reduced by allocating
lease rental payments between rental expense and reduction of the liability.
The Association is of the view that the treatment adopted by the standard does not fully recognise the position with regard to not for profit
enterprises. Members need be aware that even though a deficit has been booked due to implementing the accounting standard the cash benefit
of the saving from the rent free period has been passed on to members by holding subscription levels down and the deficit shown in the
accounts will be returned over the next 8 years of the lease rental contract.
54
MAV FINANCIAL REPORT 2004/5
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005
61,565,779
2,455,915
49,946,566
49,946,566
2004
$
1,885,652
2,455,915
104,730,091
(225,113) 104,730,091
568,337
252,701
96,950,245
96,950,245
-
431,696
212,465
119,303,634 109,638,136
(225,113) 119,303,634 109,638,136
1,885,652
61,565,779
2005
$
CONSOLIDATED
TYPES OF PRODUCTS AND SERVICES
(886,646)
2004
4,453,293
(886,646)
2005
4,270,676
1,333,063
2004
$
ELIMINATIONS
SEGMENT
21 SEGMENT INFORMATION – PRIMARY SEGMENT
2004
ASSOCIATION
Insurance
Grants
Association
2005
2,472,305
1,333,063
(233,724)
-
-
822,308
-
5,275,601
521,032
241,059
798,480
2,393,480
38,479
1,267,203
(166,370)
2,612,764
1,184,131
339,121
197,488
(233,724)
5,537,879
2005
$
LOCAL GOVERNMENT
2004
$
4,945,014
GRANTS
43,020,968
2005
$
52,350,089
47,305
11,642
283,002
2,401,234
(262,389)
2,472,305
64,338
92,575
14,977
579,477
3,582,661
884,954
4,945,014
43,085,306
2,679,824
65,860
1,167,068
96,093,876
113,341,933 105,068,535
103,200,207
-
-
52,415,949
INSURANCE
Insurance including Public Liability, Professional Liability, Product Liability and Fidelity
Guarantee.
Obtains Federal and State Government grants and expends these grants on projects for the betterment of both local government and the community in
Victoria
Local Government Industry group and represents and provides support to Local Government and its communities in
Victoria
BUSINESS SEGMENTS
OPERATING
REVENUE
Sales to Customers outside the
group
Inter-segment
Sales
TOTAL SEGMENT
REVENUE
TOTAL CONSOLIDATED REVENUE
SEGMENT
RESULT
CONSOLIDATED ENTITY
SURPLUS
FROM ORDINARY
ACTIVITIES
ASSET
S
Segment
Assets
TOTAL
ASSETS
LIABILITI
ES
Segment
Liabilities
TOTAL
LIABILITIES
OTHER SEGMENT INFORMATION:
Acquisition of property, plant
and
and other non current
equipment
assets
Depreciatio
n
55
MAV FINANCIAL REPORT 2004/5
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005
22 CONTINGENT ASSET
Reinsurance Share of Profit
The Association’s Local Government Mutual Liability Insurance Scheme (CMP), in conjunction with similar Local Government Self Insured Mutual
Liability Schemes around Australia has entered into a profit sharing arrangement with its primary reinsurers, based on the National Local
Government claims experience. The arrangement enables any surplus per each year over the five-year reinsurance period to be shared between
the various Schemes and the reinsurers on a proportional basis.
No amount is payable until June 2007 and, some of the surplus can only be redeemed on the commutation of the reinsurance policy. The actuary has
calculated the potential value of the CMP Scheme’s profit share for the first two years of the five-year program, at balance date, to be $3.4 million.
There is significant potential for future events to impact the profit share receivable and a number of variable factors involved in the final
determination of the Scheme’s profit share. Accordingly the directors are not satisfied at 30 June 2005 that the potential benefit is an asset that
is probable of receipt and reliably measurable. The financial statements do not include any value attributable to the share of profit. The position
will be monitored on an annual basis.
23 CONTINGENT LIABILITY
MAV Insurance provides cover to members up to a sum insured of $2million each and every claim and then arranges for insurance cover with
each member with various insurers up to a sum insured of $300 million each and every claim. The $2million sum insured provided by MAV
Insurance is reinsured through the international reinsurance market. There is uncertainty as to whether a portion of the premium paid to overseas
based insurers for the insurance cover provided to each member in excess of the $2million sum insured provided by MAV Insurance is subject to
withholding tax. If withholding tax is payable the amount of withholding tax liability has been estimated at $1.5 million. There is significant
uncertainty in relation to whether withholding tax liability exists and if so as to the amount of any such liability..
24 REPORTING STANDARDS (IFRS)
The Association is required to prepare financial statements that comply with Australian equivalents to International Financial Reporting Standards
(“A-IFRS”) for annual reporting periods beginning on or after 1 January 2005. Accordingly, the Association’s first annual financial report prepared
under A-IFRS will be for the year ended 30 June 2006. In 2004, the Association established a process to manage the transition to A-IFRS. In
consultation with the external auditors staff of the Association have completed the process set out and agreed in the document “Identifying the
impact of AASB standards for 2005 (IFRSs Equivalents) on the financial reports of Australian entities.” This process is now complete.
Likely Impacts of A-IFRS on the results and the financial position of the Association and Consolidated entity.
The following reconciliation outlines the likely impacts on the current year result and financial position of the Association and Consolidated entity
had the financial statements been prepared using A-IFRS, based on the accounting policy decisions current at the date of this financial report.
Readers of the financial report should note that further developments in A-IFRS (for example, the release of further pronouncements by the
Australian Accounting Standards Board and the Urgent Issues Group), if any, may result in changes to the accounting policy de cisions made by
the Association and, consequently, the likely impacts outlined in the following reconciliation.
NOTE
CONSOLIDATED
MAV - GENERAL FUND
$’000
$’000
1,885
719
RECONCILIATION OF OPERATING SURPLUS
Operating Surplus (Deficit) (AGAAP)
Net Claims
aa
OPERATING SURPLUS (DEFICIT) (A-IFRS)
bb
(57)
-
1,828
719
14,574
4,432
RECONCILIATION OF NET ASSETS
Net Assets (AGAAP)
Provision for Claims Outstanding
NET ASSETS (A-IFRS)
aa
(96)
14,478
4,432
aa Net Claims
Under 5.1.8 of the revised accounting standard AASB 1023 for the reporting year ending 30 June 2006 a risk margin is required to be added
to the central estimate of the present value of expected future payments. AASB 1047 requires disclosure of the impact of adopting this standard
in the 2005 financial statements. Actuarial advice from the independent actuary to the Association has advised that a prudential margin of 20%
of the next provision for outstanding claims is appropriate.
These estimates have been included as an adjustment in the “Reconciliation of Operating Surplus”
bb Revenue from ordinary activities
Although not impacting the net surplus of the MAV – General Fund or the consolidated entity, the adoption of A-IFRS will result in a number of
56
MAV FINANCIAL REPORT 2004/5
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005
transactions being recorded on a “net” basis rather than a “gross” basis. In addition, the adoption of A-IFRS results in the reclassification of proceeds
from the sale of non-current assets from “revenue from ordinary activities” to other income and expense items in the statement of financial performance.
As a consequence, revenue from ordinary activities will decrease by $88,064 (MAV –General Fund $88,004), other expenses will decrease by
$64,381 (MAV – General Account $64,381 and a gain on sale of non-current assets of $23,683 (MAV – General Fund $23,683) will be
recognised for the financial year ended 30 June 2005.
cc Defined benefit superannuation plan
Under A-IFRS, the consolidated entity is required to recognise the surplus or deficit of defined benefit plans as an asset or liability in the statement of
financial position. AASB 119 provides an exemption for multi employer sponsored funds where the assets and liabilities are pooled, which is the case
with the defined benefits plan of the Local Authorities Superannuation Fund. The Association is a member of the Local Authorities Superannuation Fund.
dd Property Plant Equipment and Intangible Assets
Property, plant, equipment and intangible assets of the Association will be subject to an impairment test when there is an indication that
impairment exists by reference to internal and external market factors. Any item of property, plant, equipment and intangible assets that is
impaired must be written down to its recoverable amount. The amount of the impairment write down for assets carried at cost will be expensed
through the statement of financial performance.
Management has considered the carrying values of property, plant, equipment and intangible assets and considers that there is not material
impact upon adoption of the AIFRS
25 RELATED PARTIES
The Municipal Association of Victoria is a body corporate established under the Municipal Association Act of 1907 to provide 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. The discreet nature of these transactions is not material. There were no material
related party transactions during the year.
Directors. Members During The Year
G. Lake
J. Ryan (Elected July 2004, Resigned November 2004)
R J Fyffe
J. Eisenbise (Resigned December 2004)
D. Argall
R. Perry (Resigned November 2004)
J V Chandler
R. Gross (Elected February 2005)
S. Alessi
C. Papas (Resigned February 2005)
J Dale
G. Davey (Resigned February 2005)
M O’Shea
B. Hampson (Elected February 2005)
J. Amos (Elected February 2005)
J. Bruce (Elected February 2005)
J. Cutri (Elected February 2005)
N. Melham (Elected June 2005)
C. O’Neil (Elected September 2004 Resigned April 2005)
CONSOLIDATED
MAV - GENERAL FUND
2005
2004
2005
2004
167,599
179,315
167,599
179,315
$
$
$
$
Remuneration of Directors
Total Income received or receivable by Directors
MAV - GENERAL FUND
2005
2004
17
15
$10,000 - $19,999
1
1
$40,000 - $49,999
1
1
$
$
Number of Directors of parent entity whose total income falls within the following bands:
$0 - $9,999
Loans to Directors
No loans were made to or are payable by Directors
Other Transactions
There were no other material transactions with Directors.
MAV FINANCIAL REPORT 2004/5
57
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 2005;
(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 applicable Accounting Standards and
other mandatory professional reporting requirements.
Signed in accordance with the resolution of directors.
Geoff Lake President
Melbourne
29 September 2005
58
MAV FINANCIAL REPORT 2004/5
John Chandler Director
CONSOLIDATED FINANCIAL REPORTSINDEPENDENT AUDIT REPORT
INDEPENDENT AUDIT REPORT
To the members of the Municipal Association of Victoria
Scope
We have audited the financial statements of The Municipal Association of Victoria for the financial year ended 30 June 2005 as set out on
pages 41 to 58. The financial report includes the consolidated entity comprising the Municipal Association of Victoria and the entities it
controlled at the year’s end or from time to time during the financial year. The Municipal Association of Victoria’s directors are responsible for
the financial report. We have conducted an independent audit of this financial 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 assurance whether the financial
statements are free of material misstatement. Our procedures included examination, on a test basis, of evidence supporting the amounts and
other disclosures in the financial report, and the evaluation of accounting policies and significant accounting estimates. These procedures have
been undertaken to form an opinion whether, in all material respects, the financial report is presented fairly in accordance with Accounting
Standards and other mandatory professional reporting requirements and statutory requirements so as to present a view which is consistent with
our understanding of the Municipal Association of Victoria and the consolidated entity’s financial position and performance, as 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 Opinion
In our opinion the financial statements present fairly in accordance with Accounting Standards and other mandatory professional reporting
requirements the financial position of the Municipal Association of Victoria and the consolidated entity as at 30 June 2005 and the results of
their operations and their cash flows for the year then ended.
PKF
R. A. Dean Partner
Chartered Accountants
A Victorian Partnership
Melbourne
29 September 2005
MAV FINANCIAL REPORT 2004/5
59
OTHER INFORMATION
Legal Form
The Municipal Association of Victoria is an Association Incorporated by the Municipal Association Act 1907
Domicile:
Melbourne, 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 and their communities.
Employees
Average number of equivalent full time employees during the year is 35.3 EFT.
60
MAV FINANCIAL REPORT 2004/5
Published by
Municipal Association of Victoria
Level 12, 60 Collins Street
Melbourne 3000
Telephone: 03 9667 5555
Facsimile: 03 9667 5550
GPO Box 4326
Melbourne 3001
E-mail: inquiries@mav.asn.au
Website: www.mav.asn.au
Writers
Costigan & Murphy
Photography
Steven Diffey Photography
Design
Frank Design Pty Ltd