2006 – 2007 annual report

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2006 – 2007 annual report Powered By Docstoc
					    THE
   VOICE
 OF LOCAL
GOVERNMENT
                                                                                                              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.




                                                                                                              CONTENTS
Published by                        Editor                      This report is produced on a combination       2 Year in Review                         28 Emergency Management &                 50 MAV Insurance Committee
Municipal Association of Victoria   Paula Hurley                of elemental chlorine-free papers, sourced     4 President’s Report                         Community Safety                      52 General Insurance
Level 12, 60 Collins Street         Design                      from sustainably managed forests and                                                    30 Community Development
                                                                100% recycled paper, and printed using         6 MAV Board                                                                        54 Civic Mutual Plus
Melbourne VIC 3000                  Frank Design Pty Ltd
                                                                                                               8 CEO’s Report                           32 Governance & Councillor Development    58 Municipal Officers’ Guarantee Fund
GPO Box 4326                                                    vegetable based inks by an environmentally
                                    Photography                 responsible printer. This reflects the                                                  34 Workforce & Professional Development
Melbourne 3001                                                                                                10 Collaboration & Capacity-building                                                59 Fidelity Members
                                    Steven Diffey Photography   Municipal Association of Victoria’s                                                     36 MAV Governance
Telephone: 03 9667 5555                                                                                       12 Economics & Finance                                                              60 CMP Members
                                                                commitment to environmental sustainability.
                                                                                                              14 Planning & Building                    40 MAV Operations                         61 Financial Overview
Facsimile: 03 9667 5550
                                                                                                              18 Human Services & Public Health         42 MAV Team                               62 Guide to the Financial Report
Email: inquiries@mav.asn.au
Website: www.mav.asn.au                                                                                       22 Infrastructure                         44 Committees                             64 Glossary
                                                                                                              24 Transport                              46 Future Directions                      65 MAV Financial Report
                                                                                                              26 Environment                            48 MAV Insurance Chair’s Report           91 MAV Insurance Financial Report
                                                                                                                                                                                                                      MAV ANNUAL REPORT 2006/07   1
                                                                                                                                                                                             Local government continued achieving service
                                                                                                                                                                                             improvements while taking the lead in policy directions
                                                                                                                                                                                             at both ends of life’s spectrum.




YEAR
IN
REVIEW
                         NEW MAV PRESIDENT                                    COLLABORATION & CAPACITY BUILDING                                                             INFRASTRUCTURE                                                         ENVIRONMENT
With the departure of Cr Geoff Lake to pursue a career in the law,       The MAV’s pre-election Call To Parties resulted in a State            Work undertaken ahead of a review of the Road Management Act              MAV advocacy contributed to the State Government’s commitment
Cr Dick Gross was elected as the new MAV President in August             Government commitment to support innovation in the sector.            led to the transfer of responsibility for water crossings from councils   to a $20 million Small Towns Water Quality Fund. Planning
2006. A former Mayor of the City of Port Phillip, long-time              The new integrated SWIFT library system went live and good            to water authorities. Agreement was reached on street lighting cost       commenced to establish the successful ECO-Buy program as
community activist and well-known identity across the local              progress was made on the EasyBiz intiative to streamline online       arrangements and power pole safety issues were addressed.                 an independent, not-for-profit entity. The MAV Weed Management
government sector, Cr Gross has brought a unique and colourful           transactions between small businesses and councils. Frameworks        Sustainable asset management practices continued to be a high             Case Studies report was produced and a Natural Resource
style to the role, as well as a strong commitment to supporting rural    were developed to support the objectives of the Future of Local       priority focus area for the MAV.                                          Management Fact Sheet series was distributed to councils.
councils, collaborating to reduce council costs and increasing           Government project.                                                                                                                             A forum showcased leading council waste management initiatives.
transparency and accountability in the sector.                                                                                                                                   TRANSPORT
                                                                                       PLANNING AND BUILDING                                   Following MAV advocacy, the State Government committed to                                 COMMUNITY DEVELOPMENT
                     ECONOMICS & FINANCE                                 A specialist planners’ group convened by the MAV provided expert      buying back the country rail freight network. The MAV also helped         Community Indicators Victoria, an interactive resource for
Extensive research and analysis of financial data contributed to a       input to key planning initiatives. A dedicated Melbourne 2030         councils to understand key initiatives related to community transport,    measuring the wellbeing of local communities, was launched.
detailed picture of local government funding needs. The MAV              Liaison Officer was appointed and the MAV contributed to the five-    rail crossing safety, residential speed limits and walking and cycling    The first year of the MAV’s Lighthouse Program saw 69 councils
advocated for a three-year valuation cycle and studied the capacity      year M2030 review. An e-Planning Roadmap was delivered and            grant packages. A new quarterly transport bulletin was launched.          actively involved in community planning initiatives. The MAV worked
of households to pay rates. Public library funding was substantially     the Planning Minister attended the Spotlight on the Planning System                                                                             with councils and departments to plan training about how the new
increased and $4.7million was provided by the State Government           forum. The MAV continued to be an active participant in key                              EMERGENCY MANAGEMENT                                   Charter of Human Rights impacts council services. Rural councils
for red tape reduction initiatives. A project to standardise             planning-related bodies such as the Development Assessment                                 & COMMUNITY SAFETY                                   benefited from the first outputs of the $1.8 million Small Towns
infringement documents was facilitated by the MAV, and the annual        Forum and the Growth Areas Authority.                                 A statewide survey revealed many examples of good emergency               Victoria Program.
fire services levy increase was kept to 3.5%, within the Association’s                                                                         management practices in councils and identified a range of
benchmark figure.                                                                HUMAN SERVICES & PUBLIC HEALTH                                training needs. A Drought Taskforce was convened to identify major                                 MAV INSURANCE
                                                                         The challenges, costs and benefits of providing quality aged          impacts on affected councils. Advocacy by the MAV led to $1.25            Cost savings and improved claims performance resulted in reduced
                                                                         care were explored through various MAV-sponsored initiatives.         million in funding for the installation of fire fighting infrastructure   Civic Mutual Plus premiums for the next financial year and effective
                                                                         Considerable resources were committed to supporting councils’         along the Wimmera Mallee Pipeline. A forum was held to assist             risk management initiatives contributed to improved results for the
                                                                         work in both the Maternal and Child Health and Early Years areas,     councils implement new planning powers over gaming venues                 Municipal Officers' Guarantee Fund. Eligibility criteria for the
                                                                         with strong advocacy for improved kindergarten funding resulting      and the MAV sought sector-wide input to a submission regarding            Community Groups Insurance Scheme were broadened and
                                                                         in a significant State Budget commitment. A national Youth            anti-graffiti legislation.                                                considerable effort was directed towards keeping drought-affected
                                                                         Symposium explored ways councils can engage young people in                                                                                     sports grounds operating. Policy coverage of webcasting activities
                                                                         their communities.                                                                                                                              was arranged and further progress was made on establishing the
                                                                                                                                                                                                                         Civic Workers' Plus self-insurance scheme.




2   YEAR IN REVIEW MAV ANNUAL REPORT 2006/07                                                                                                                                                                                                                  MAV ANNUAL REPORT 2006/07 YEAR IN REVIEW   3
                                                                                                                                                                                                  “The 2006 State Election and subsequent State
                                                                                                                                                                                                  Budget bore the fruits of our hard labour when
                                                                                                                                                                                                  the Victorian Government first promised, and
                                                                                                                                                                                                  then importantly delivered, a commitment to

PRESIDENT’S REPORT                                                                                                                                                                                support us on our journey of self-reform with
                                                                                                                                                                                                  some of the cold hard stuff.”

In 1997 I attended the launch             Through councils’ improved          The 2006 State Election and          And while I’m in a boastful               Then I claimed another $4.7          Let me conclude by saying what      Local government is both
of a landmark study into the              performance, we have seen           subsequent State Budget bore         mode I must mention the CEO.              million for his critical (although   a joy and honour it has been to     popular with its residents (80%
state of local government                 almost a one-third reduction in     the fruits of our hard labour        During the year I kept a tally of         admittedly not exclusive) role in    be elected to preside over this     approval rating for two years -
infrastructure at Knox. It painted        financially distressed councils.    when the Victorian Government        the amount he saved or earned             getting help for councils to deal    organisation. As the story of the   something no other sphere of
a diabolical picture.                     Importantly, we are all now aware   first promised, and then             the sector.                               with the effects of the drought      $21 Million Man demonstrates,       government could claim) and
Thus, the MAV took the bull by            of the extent of our challenges.    importantly delivered, a             It all began when our long-               on recreational assets to bring      the MAV is winning battles all      addressing its financial issues.
the horns and set out to more             We took another giant leap last     commitment to support us on          legged leader saved $6 million            him up to the ‘Almost $15            over the shop and I am truly        I would like to offer thanks to
closely monitor and assess the            year, agreeing we needed to         our journey of self-reform with      from disappearing from the                Million Man’.                        blessed to be sitting in the seat   the Board, the CEO, our
financial sustainability of               offer a quid pro quo to our         some of the cold hard stuff.         coffers using secret CEO’s                The pièce de résistance was          I now occupy.                       beloved officers and our whole
councils in Victoria.                     whinge about funding levels.        The relatively small amount          business to scrap a requirement           a saving of more than                I have only encountered             sector for this great year.
Today, Victoria undoubtedly               So we embarked on the mother-       of $4.7 million could have a         for matching funding from                 $6 million through reduced           excellence, friendliness and
has the most detailed and                 of-all collaborative projects to    significant impact by increasing     councils that couldn’t afford it.         insurance premiums.                  tolerance in my time here.
                                          demonstrate new levels of           innovation, resource sharing and                                                                                    The Board has provided loyal        DICK GROSS
accurate information available                                                                                     So I named him the ‘$6 Million            So Rob is now to be addressed
                                          accountability and transparency     service collaboration while also                                                                                    and wise counsel. The CEO           PRESIDENT
anywhere in Australia on the                                                                                       Man’ after the television series          as the ‘$21 Million Man’. It just
financial challenges facing               by voluntarily committing to        reducing councils’ material and      of the same name about a                  shows you the advantage of           is playing at the top of his
local government.                         improve our own efficiency          contract costs and red tape.         bionic man working for the                having good legs!                    game. The officers are brainy,
                                          and effectiveness.                  My point is, our plan is working,    American Secret Service.                                                       dedicated and fun to be with.
We have now identified funding
                                          This candid and confronting         and I think we owe ourselves         What began as a bit of a joke
liabilities for all asset classes in
all Victorian councils for the first      approach is consistent with the     a moment to reflect on our           soon amounted to a serious
time, something which has still           PricewaterhouseCoopers report,      success. Having been kicked          amount of cash worth noting
not been achieved anywhere                commissioned by the Australian      in the guts when change was          as part of my report for the year.
else in Australia.                        Local Goverment Association,        imposed on us over a decade
                                          which identified an opportunity     ago, we are now setting our          First his efforts to secure the State’s
Two years ago there were 18               to improve local government’s       own pace and our message is          election commitment of funding
councils considered financially           financial sustainability through    starting to be heard by other        for Future of Local Government
at risk. On the most recent data          the pursuit of further internal     spheres of government.               projects saw him dubbed the
available, the MAV has assessed           efficiency reforms, along with                                           ‘Almost $10 Million Man’.
                                                                              We’re all grown up and I feel
13 councils as financially at risk,       changes to intergovernmental
with 12 in declared Exceptional                                               like a proud dad, ever boastful
                                          funding agreements.                 of our position in the sun
Circumstances areas.
                                                                              nationally. There is still a long
                                                                              road ahead, but we are years
                                                                              ahead of other states who are
                                                                              only just beginning to tackle the
                                                                              difficult and emotional structural
                                                                              reform process.

4   PRESIDENT’S REPORT MAV ANNUAL REPORT 2006/07                                                                                                                                                                                                                  MAV ANNUAL REPORT 2006/07 PRESIDENT’S REPORT   5
                                          CR DICK GROSS                                                  CR SAM ALESSI                                        CR DARRYL ARGALL                                 CR JOE CAPUTO                                CR MARK CONROY                                    CR JENNY DALE                                             CR JOSEPH CUTRI
                                          Port Phillip City Council                                      Whittlesea City Council                              Hindmarsh Shire Council                          Moreland City Council                        Frankston City Council                            Indigo Shire Council                                      Maribyrnong City Council
                                          MAV PRESIDENT                                                  MAV DEPUTY PRESIDENT (METROPOLITAN)                  MAV DEPUTY PRESIDENT (RURAL)                     MAV Board Representative Metropolitan        MAV Board Representative Metropolitan             MAV DEPUTY PRESIDENT (until Feb 2007)                     MAV Board Representative Metropolitan
                                                                                                       MAV Board Representative Interface Region              MAV Board Representative Rural North West        Central Region                               Southern Region                                   MAV Board Representative Rural North East Region          West Region
                                          Member, MAV Future of Local Government Advisory Group.
                                                                                                                                                              Region                                           Member, MAV Future of Local Government       Member, MAV Strategic Environment Advisory                                                                  Councillor Maribyrnong City Council 1997
                                          Member, MAV Audit Committee. Member, MAV Insurance           Chair, MAV Transport and Infrastructure Advisory                                                                                                                                                       Chair, MAV Human Services Committee. Member,
                                          Committee. Member, Australian Local Government               Group. Councillor Whittlesea City Council 1997 to      Chair, MAV Drought Taskforce. Chair, MAV         Advisory Group. Member, MAV Professional     Group. Councillor Frankston City Council          MAV Professional Development Reference Group.             to present. Mayor Maribyrnong City Council
                                          Association Board. Councillor Port Phillip City Council 1996 present. Mayor Whittlesea City Council 1997-98,        Future of Local Government Advisory Group.       Development Reference Group. Councillor      1997 to present. Mayor Frankston City Council     Member, Australian Local Government Association           2001-02, 2004-05. Member Braybrook
                                          to present. Mayor Port Phillip City Council 1998 - 2000,     2000-01, 2004-05. Member, MAV/DOI Transport            Chair, MAV Strategic Environment Advisory        Moreland City Council 2001to present.        2000-2001. Deputy Mayor Frankston City            Board. Councillor Indigo Shire Council 1997 to present.   Community Visioning Reference Group.
                                          2004. Chair, Metropolitan Waste Management Group.            Working Party. Member, Yarra Plenty Regional Library   Group. Board Member, Australian Local            Councillor Brunswick City Council 1982-89.   Council 1999. Delegate, Mitcham-Frankston         Mayor Indigo Shire Council 1997-99, 2003-04.
                                          Member, Metropolitan Transport Forum. Director, Jewish       Services Board. Member, Interface Councils Group.      Government Association. Councillor Hindmarsh     Mayor Moreland City Council 2002-03.         Freeway Steering Committee. Delegate, Cities      Deputy Mayor Indigo Shire Council 1999-2002, 2006.
                                          Museum of Australia. Winner 2000 Public Relations Institute  Member, Metropolitan Waste Management Group.           Shire Council 1997 to present, Mayor, 1997-99,   Mayor Brunswick City Council 1985-86.        for Climate Protection. Delegate, International   President, Australian Local Government Women’s
                                          Association (PRIA) Victorian Award (Government                                                                      2004-07. Member, North West Municipalities       Deputy Mayor Moreland City Council 2003-     Council for Local Government Initiative.          Association Victorian Branch. Member, La Trobe
                                          Communications Category; Community Communications                                                                   Association. Deputy Chair, Wimmera Catchment     04. Commissioner, Victorian Multicultural                                                      University Advisory Board. Councillor, La Trobe
                                          Category). Winner 2000 PRIA National Golden Target                                                                  Management Authority Board. Chair, Wimmera       Commission. Member, Network of Italian                                                         University. Member, Roads Corporation Advisory Board.
                                          Award, Highly recommended. 1999 PRIA Victorian and                                                                  Regional Transport Group, Chair, Northwest       Mayors and Councillors. Chair Coburg 2020.                                                     State Government Honor Roll of Victorian Women 2005.
                                          National Award (Government Communications Category).                                                                Municipalities Assocition.




THE BOARD

                                          BOARD MEMBERS NOT PICTURED WHO                                  CR ROD FYFFE                                        CR GEOFF GOUGH                                   CR BRENDA HAMPSON                            CR BILL McARTHUR                                  CR JANE ROWE                                               CR LUKE TOBIN
                                          HELD OFFICE IN 2006-07                                          Greater Bendigo City Council                        Manningham City Council                          Moyne Shire Council                          Golden Plains Shire Council                       East Gippsland Shire Council                               Boroondara City Council
                                          GEOFF LAKE                                                      MAV Board Representative Rural North                MAV Board Representative Metropolitan            MAV Board Representative Rural South         MAV Board Representative Rural South              MAV Board Representative Rural Gippsland Region            MAV Board Representative Metropolitan
                                                                                                          Central Region                                      East Region                                      West Region                                  Central Region                                                                                               South East Region
                                          President                                                                                                                                                                                                                                                           Member, MAV Audit Committee. Member, MAV Strategic
                                                                                                          Chair, MAV Economics and Finance Advisory           Councillor Manningham City Council 1997          Councillor Moyne Shire Council 1999 to       Chair, MAV Planning Advisory Group, Chair,        Environment Advisory Group. Councillor East Gippsland      Councillor Boroondara City Council 2004
                                          JEFF AMOS                                                       Group. Member, MAV Future of Local                  to present. Mayor Manningham City Council        present. Mayor Moyne Shire Council 2002-     MAV Professional Development Reference Group,     Shire Council 2003 to present. Mayor East Gippsland        to present. Member, Boroondara City
                                                                                                          Government Advisory Group. Member, MAV              2002-03. Member, MAV Audit Committee.            05. Member, Victorian Local Sustainability   Councillor Golden Plains Shire Council 1996 to    Shire Council 2004-06. Deputy Mayor East Gippsland         Council Audit Committee. Chairman,
                                          Board Member Rural Gippsland Region
                                                                                                          Insurance Committee. Councillor Greater             Member, MAV Transport and Infrastructure         Advisory Committee. Chair, South West        present, Mayor, 2004-05, Member, MAV/VicRoads     Shire Council 2004, 2006 to present. Member, MAV           Boroondara City Council Special Services
                                                                                                          Bendigo City Council 1996 to present. Mayor         Advisory Group.                                  Regional Transport Taskforce. Member,        Liaison Committee, Member, Federal Blackspot      Water Taskforce. Chair, East Gippsland Catchment           Committee.
                                          JOHN CHANDLER                                                   Greater Bendigo City Council 2003-05.                                                                Small Towns Victoria Group.                  Advisory Committee, Member, Gorse Taskforce.      Management Authority. Member, East Gippsland
                                          Board Member Metropolitan South East Region                     Member, Ministerial Advisory Council on                                                                                                                                                             Water Board. Member, Gippsland Coastal Board.
                                                                                                          Libraries. Member, State Library Public Libraries
                                                                                                          Advisory Committee.




6   THE BOARD MAV ANNUAL REPORT 2006/07
                                                                                                                                                                                                                                                                                                                                                                        MAV ANNUAL REPORT 2006/07 THE BOARD          7
                                                                                                                                                                                                    “The organisation demonstrated its considerable
                                                                                                                                                                                                    horsepower in securing a number of significant

CEO’S REPORT
                                                                                                                                                                                                    policy and funding commitments in the lead-up
                                                                                                                                                                                                    to the state election in November 2006.”

When you strip away the                      This year, we took the step to     The organisation demonstrated          Grant activities this year have         The strength of our service is the   Always striving to stay one step I look forward to guiding the
insurance and grant-funded                   further bolster our credentials    its considerable horsepower in         included helping the sector             collective impacts of our risk       ahead, we have embarked on a     extraordinary team at the MAV
activities of the MAV, we’re left            and strengthen the basis of our    securing a number of significant       address skill shortages in maternal     management services, group           comprehensive review of our      and working with the newly
with a small core team running               advocacy on financial matters      policy and funding commitments         and child health services and           purchasing power and lobbying        insurance business in the past   installed Board, under the
on the sniff of an oily rag.                 impacting local government by      in the lead-up to the state            planning; developing councils’          activities. Even through difficult   year to make sure we continue    flamboyant direction of its
Flicking through this Annual                 establishing the Economic Policy   election in November 2006.             emergency management                    insurance market conditions,         to meet the insurance needs of   colourful President, to progress
Report, it becomes apparent the              and Research Unit. The Unit,       Highlights included support for        capabilities; assisting councils        premiums have been kept low          councils for the next 10 to 15   the position of our sector and
achievements of this group are               headed by Dr Michael Henry,        the reform process commenced           meet their environmental                through strength in numbers and      years. We are examining the      give effect to the influence of the
quite staggering given its size.             is focused on investigating        through the Future of Local            management responsibilities;            local government is now in its       optimum model for going          collective voice of local
This past year has certainly been            economic rationale and tackling    Government project; new                building the capacity of local          strongest position in the            forward, developing new          government for the benefit
one of the most productive years             the big questions including        funding for kindergarten facilities    government to respond to special        insurance market in years.           products where a need is         of Victorian communities.
for the MAV in my time as Chief              communities’ capacity to pay       and childcare centres; the             needs groups and supporting                                                  identified and ensuring we offer
Executive Officer.                           rates and opportunities to         extension of grants to upgrade         council innovation in community                                              the most competitive pricing
                                             reduce the sector’s regulation     and replace ageing community           service delivery, particularly during                                        available to local government.   ROB SPENCE
Nationally we’ve contributed
                                             burden on communities.             facilities; initiatives to implement   the early years.                                                                                              CHIEF EXECUTIVE OFFICER
significantly to progressing
arguments for a better funding               The benefit of having in-house     Melbourne 2030 and rural           The other component of our
deal for local government.                   legal expertise with significant   zones; and a renewed               business is providing insurance
We’ve been able to do this                   local government experience        commitment to help improve         services to councils. Previously we
because of the considerable                  came to the fore this year, with   water management capabilities.     have reported separately on the
data and expertise that have                 Alison Lyon kept busy in the new   Our advocacy work is               insurance business. This year we
been amassed over the years                  role of Legal and Corporate        underpinned by a range of          are dealing with insurance as part
by our financial analysts.                   Director providing advice on a     capacity-building programs,        of the MAV Annual Report in
                                             wide range of legislative and      largely funded through grants and  acknowledgement that we are
                                             governance matters to councils,    executed by a specialist team of   now regular providers of insurance
                                             individual councillors and CEOs.   fixed-term project officers. Each  services. Our purpose in providing
                                             The further appointment of         approach from funding bodies is    insurance services is aligned with
                                             Andrew Rowe as our Councillor      individually assessed on the basis the greater purpose of our
                                             Development and Promotion          of a project’s potential to        Association, to promote the
                                             consultant will increase our       contribute to the betterment of    efficient carrying out of municipal
                                             capacity again in the coming       local government. In order to      government throughout the state
                                             year to support councillors        protect our role in vigorously     of Victoria and to watch over and
                                             tackling governance challenges.    pursuing the interests of the sector, protect the interests, rights and
                                                                                funding for these activities is    privileges of municipal
                                                                                separated from general revenue     corporations. In a nutshell, our
                                                                                and never used to subsidise the    interest is in meeting the needs of
                                                                                Association’s core activities.     our members, not making a profit.

8   CEO’S REPORT MAV ANNUAL REPORT 2006/07                                                                                                                                                                                                                             MAV ANNUAL REPORT 2006/07 CEO’S REPORT   9
COLLABORATION &                                                                                                                                                                           Once again the value of building strong alliances
                                                                                                                                                                                          was demonstrated through the achievement of
CAPACITY BUILDING                                                                                                                                                                         substantial savings and improved outcomes.

          ADVOCACY                                     BUS                                EASYBIZ                       FUTURE OF                                SWIFT                          WORLD CLASS
The MAV was successful in                            SHELTERS                The EasyBiz project, which                   LOCAL                     The MAV/VicLink SWIFT Library                SERVICES
                                         In November the Australian                                                    GOVERNMENT                   project involves a consortium of      As part of the Victorian
obtaining a commitment from                                                  involves 31 councils led by the
                                         Competition and Consumer                                                In October, the MAV Future         nine council and regional             Government’s World Class
the re-elected Bracks                                                        City of Whittlesea, with $6.2
                                         Commission (ACCC) granted                                               of Local Government (FOLG)         libraries representing 54 public      Service program, the Business
Government to its Call To Parties                                            million funding support from
                                         interim approval to allow the                                           project received State Council     libraries, working collaboratively    Victoria website
request to ensure the Local                                                  the Federal Government’s
                                         MAV to tender for bus shelter                                           endorsement to develop a vision    to develop common, integrated         www.business.vic.gov.au was
Government Act remains                                                       Regulation Reduction Incentive
                                         installation and maintenance                                            for the sector. Three working      operational practices, purchase       developed to bring together
updated and can support                                                      Fund, is designing an online tool
                                         services on behalf of a group                                           groups, which were led by          a new computer system and             government services from the
innovation in the sector. The                                                to streamline and simplify small
                                         of metropolitan councils. The                                           the MAV and comprised              outsource managed services to         three spheres of government.
Government also agreed to                                                    business interaction with
                                         MAV sought ACCC authorisation                                           representatives from               a third party. An important           The site includes advanced
continue to implement reforms                                                councils. Progress over the last
                                         to allow participating councils                                         metropolitan, regional and         milestone was reached in March        online learning tools, step-by-
requested by local government                                                year included the establishment
                                         to enter into a Memorandum                                              rural councils, developed          with the first library, the Eastern   step guides, online and phone
through the Best Value                                                       of reference groups covering
                                         of Understanding with the                                               frameworks around the themes       Regional Libraries Corporation,       customer support facilities,
Commission to reduce the                                                     Project Directions and
                                         Director of Public Transport to                                         of collaboration, accountability   going live with the new system.       and an online account through
burden of state government                                                   Monitoring, Industry Reference,
                                         transfer responsibility for the                                         and performance, with the          The remaining library                 which permits, licences and
reporting. The Government                                                    and Monitoring and Technical
                                         provision of bus shelter services                                       common foundation principle        organisations went live by 30         registrations can be submitted.
allocated $4 million in its local                                            Development, as well as the
                                         and conduct a tender process                                            being local government’s           June 2007, in accordance with         The MAV worked closely with
government election policy to                                                identification of 25 applicable
                                         before the expiry of an existing                                        primary responsibility for         the implementation plan. Interest     Business Victoria to enable
support council innovation,                                                  online transactions. The Business
                                         agreement in July 2007. In                                              ensuring community wellbeing.      in belonging to SWIFT has             council information to be easily
collaboration and red-tape                                                   Victoria website will host the
                                         authorising its interim approval,                                       The frameworks were finalised      grown, with another four library      accessed on the website.
reduction initiatives. This was                                              EasyBiz service and provide a
                                         the ACCC provided immunity                                              at the June FOLG Summit,           organisations signing to              At the end of June 2007,
an important acknowledgement                                                 vehicle for aligning state and
                                         from potential court action                                             which was attended by over         participate during the 2007/08        29 councils had completed
of confidence in the work being                                              local government compliance
                                         related to anti-competitive                                             170 delegates, and will be         year, and a further eight             the publication process.
undertaken by the MAV and                                                    transactions involving small
councils in this emerging area           practices that would otherwise      business. The MAV is likely to      presented to the MAV Board         expressing interest to participate.
of expertise.                            breach the Trades Practices Act     enter into an agreement with        and annual State Council           The SWIFT Library Consortium
                                         1974, as it was satisfied that      Business Victoria on behalf of      meeting for final approval         is expected to eventually
                                         the proposal delivered a net        the consortium, in a similar role   during the latter half of 2007.    represent 52% of councils, 36%
                                         public benefit.                     to that provided to the SWIFT                                          of the population and 34% of
                                                                             consortium project.                                                    registered borrowers making
                                                                                                                                                    10.1 million visits and borrowing
                                                                                                                                                     15.5 million items per annum,
                                                                                                                                                     with projected savings for
                                                                                                                                                     libraries of between 13-28%.




10   COLLABORATION & CAPACITY BUILDING MAV ANNUAL REPORT 2006/07                                                                                                                                                             MAV ANNUAL REPORT 2006/07 COLLABORATION & CAPACITY BUILDING   11
ECONOMICS & FINANCE                                                                                                                                                                         Funding boosts and cost management initiatives were
                                                                                                                                                                                            high on the agenda, while significant progress was made
                                                                                                                                                                                            towards understanding long-term financial sustainability.

            CAPACITY                                   FIRE                   INTERGOVERNMENTAL                             LIBRARY                             NATIONAL                                NATIONAL                        INFRINGEMENTS                                     COUNCIL
             TO PAY                                  SERVICES                     AGREEMENT                                FUNDING                             COMPETITION                              FUNDING                   The MAV facilitated a project                            RATES &
The affordability of rates has                         LEVY                  A process was commenced with         Funding for public libraries
                                                                                                                                                                 POLICY                                   DEAL                    to prepare standard documents                         REVALUATIONS
                                        The MAV continued to lobby the                                                                                 The MAV negotiated with the          The MAV hosted a Financial            and forms for compliance with                 The MAV advocated for an
been an ongoing area of                                                      the State Government prior to        received a substantial boost
                                        Victorian Government for a                                                                                     Commonwealth and State               Sustainability Summit to build        the Infringements Act, including              adjustment of the current two
concern for the sector. To help                                              the November election to             following advocacy by the MAV
                                        review of the Metropolitan Fire                                                                                Government to retain $17 million     awareness about the campaign          standard infringement notices                 year valuation cycle to three
inform future council rating                                                 establish a bipartite agreement      and councils, with the State
                                        and Emergency Services Board                                                                                   in National Competition Policy       for a better national funding         and penalty reminder notices.                 years, and expressed ongoing
strategies, the MAV examined                                                 giving effect to the Inter-          Government committing $15
                                        budget processes, to ensure                                                                                    payments, however this effort was    deal and encourage greater            In addition, the MAV prepared                 concerns with the lack of
the capacity of households to                                                Governmental Agreement,              million to build and upgrade
                                        greater budgetary transparency                                                                                 unsuccessful due to the cessation    collaboration in lobbying to          similar documentation for the                 financial support from the State
pay rates. The research found                                                which was signed by the three        libraries and $5 million for book
                                        is shown in setting the fire                                                                                   of the program. The MAV continued    achieve a positive outcome            implementation of the new                     Revenue Office for undertaking
that rates consume, on average,                                              spheres of government in April       stock. It is pleasing that the
                                        services levy for metropolitan                                                                                 to explore the scope for payments    for the sector. For the first time,   owner-onus provisions, which                  valuations. The Association also
only a small proportion of total                                             2006. The Victorian Agreement        annual state allocation for public
                                        councils. The MAV successfully                                                                                 under the New Reform Agenda          councils received financial           will reduce the capacity for                  worked with councils to collect
household expenditure.                                                       established principles to guide      libraries continues to be indexed
                                        advocated for the fire services                                                                                being established by the Council     analysis undertaken by the MAV,       offenders to escape prosecution.              standard information on the
However, further research will                                               state-local relations on local       with CPI and population growth.
                                        levy to increase by 3.5% for                                                                                   of Australian Governments.           which resulted in a growing           The MAV also continued to                     movement in council rates and
be completed in 2007/08 on                                                   government matters, including        While the indexation is welcome,
                                        2007/08, which is within the                                                                                   The State Government supported       understanding of the financial        advocate for the Sheriff to utilise           the effects of the revaluations on
the effect of rates on businesses                                            three supporting mechanisms -        the MAV strongly believes further
                                        movement of the Association’s                                                                                  the MAV’s efforts to secure          challenges facing local               the new powers available to                   the burden of rates. To provide
and ‘asset rich, income poor’                                                guidelines for negotiating           increases in recurrent grants are
                                        benchmark, the Labour Price                                                                                    payments towards initiatives         government in Victoria.               enforce unpaid infringements.                 more informed media coverage
households to identify whether                                               funding agreements; guidelines       required to ensure libraries can
                                        Index. Further advocacy will seek                                                                              that reduce red tape, providing      Significant resources were also                                                     of rate increases, the MAV
these ratepayers have a similar                                              on communication and                 provide high quality services to
                                        improved State Government                                                                                      $4.7 million over two years          provided towards advocating                         WATER                           developed and distributed fact
capacity to pay rates. The MAV                                               consultation for engagement;         their communities. The MAV
                                        discipline in the budget process                                                                               for local government                 for the Australian Local                           RIGHTS &                         sheets to councils clearly
also commenced work on a                                                     and a framework for financial        will continue to work to secure
submission to the Productivity          to secure future increases in line   and asset management and             an escalation of grants in line
                                                                                                                                                       efficiency improvements and          Government Association to                            RATES                          explaining how rates work, the
                                        with a suitable cost index.                                                                                    the development of a                 commission an independent             The MAV worked closely with                   consequences of revaluations
Commission’s investigation into                                              reporting. It is anticipated that,   with the wage cost index and                                                                                    affected councils and the
                                                                                                                                                       procurement strategy.                report analysing the current                                                        and the general cost pressures
local government’s ability to                                                having received Cabinet              population movements and a                                                                                      Department of Sustainability and
                                                                                                                                                                                            financial state of Australian                                                       facing councils.
raise its own-source revenue.                                                approval, the draft Agreement        commitment to return the
                                                                                                                                                                  PLANNING                  councils. The resulting               Environment on the implications
                                                                             will be forwarded to councils,       state’s share of funding to                        FEES                   PricewaterhouseCoopers report         of the unbundling of water rights
                                                                             state departments and statutory      50% over time.                       As detailed in the Cutting Red                                             from rates. The MAV completed
                                                                                                                                                                                            recommended the Federal
                                                                             authorities for comment in                                                Tape in Planning Carbines Review,                                          a paper analysing the scope of
                                                                                                                                                                                            Government establish a $250
                                                                             late 2007.                                                                an examination of prescribed         million a year Community              the problem and proposing a
                                                                                                                                                       planning fees commenced to           Infrastructure Renewal Fund           number of preferred options
                                                                                                                                                       ensure they better relate to the     and that changes be made              which was submitted to the
                                                                                                                                                       cost of service provision. This      to the calculation of financial       Minister for Water. In addition,
                                                                                                                                                       work concentrated on data            assistance grants so as to take       the MAV worked with affected
                                                                                                                                                       availability and requirements to     account of movements in local         councils to develop a united
                                                                                                                                                       quantify costs of the planning       government costs.                     council position detailing a
                                                                                                                                                       process, with the MAV facilitating                                         number of potential strategies
                                                                                                                                                       analysis of the funding shortfall                                          to ameliorate any negative
                                                                                                                                                       experienced by councils as a                                               consequences of the policy.
                                                                                                                                                       result of the failure to index
                                                                                                                                                       planning fees.




12   ECONOMICS & FINANCE MAV ANNUAL REPORT 2006/07                                                                                                                                                                                                                 MAV ANNUAL REPORT 2006/07 ECONOMICS & FINANCE   13
PLANNING & BUILDING                                                                                                                                                                       Process improvements, strong sector advocacy and
                                                                                                                                                                                          positive collaboration with stakeholders were highlights
                                                                                                                                                                                          in the complex area of planning.

        DEVELOPMENT                                  E-PLANNING                          GROWTH                           HERITAGE                               HOUSING                                LOCAL                           MELBOURNE                                     PLANNING
         ASSESSMENT                      The e-Planning project was                        AREA                  The MAV successfully lobbied        The MAV participated in a                          POLICY                             2030                                        POSITION
           FORUM                                                                        PLANNING                                                     collaborative process between        The MAV participated in the          The MAV appointed a new                                STATEMENT
                                         finalised in early 2007, with                                           the State Government to provide                                                                                                                          The MAV was well prepared to
The MAV continued to be an                                                   MAV CEO Rob Spence                                                      the State Government and local       Ministerial Working Group on         Melbourne 2030 (M2030)
                                         delivery of a five-year strategy,                                       technical and financial                                                                                                                                  advocate members’ planning
active participant in the                                                    continued as a Board Member                                             governments to develop housing       Local Policy and facilitated input   Liaison Officer and continued
                                         the e-Planning Roadmap, which                                           assistance for councils in                                                                                                                               interests in the State election
Development Assessment Forum                                                 of the Growth Areas Authority                                           statements and implementation        by a number of councils to that      to convene the M2030
                                         will guide future development                                           implementing the new Victorian                                                                                                                           campaign in November 2006,
(DAF), which aims to reduce                                                  (GAA), which worked with the                                            plans that support strategic         group. The MAV achieved a            Reference Group. This year
                                         of planning systems in Victoria.                                        Aboriginal heritage protection                                                                                                                           having developed a
compliance burdens and enable                                                six interface councils that cover                                       planning work across                 significant shift through            also saw the continuation of
                                         Agreement was reached to                                                framework. The assistance                                                                                                                                comprehensive planning position
more flexible regulatory systems.                                            Melbourne’s five growth areas                                           metropolitan Melbourne. In           broadening the terms of              the successful MAV VicUrban
                                         enter a Memorandum of                                                   included funding for mapping                                                                                                                             statement that was reflected in
Projects undertaken in 2006/07                                               on Growth Area Framework                                                conjunction with the Department      reference of the group to look       business breakfast series for
                                         Understanding with the                                                  of culturally sensitive areas, an                                                                                                                        the MAV’s Call to Parties
provided useful input to many of                                             Plans and Precinct Structure                                            for Victorian Communities, the       at the Victoria Planning             local government CEOs, the
                                         Department of Sustainability                                            implementation officer located                                                                                                                           document. This work led to
the process improvement                                                      Plans, and explored ways to                                             MAV developed a suite of             Provisions and to discuss the        announcement of the inaugural
                                         and Environment for the                                                 in the MAV, training for council                                                                                                                         increased funds being made
projects involving local                                                     reduce the administrative burden                                        standard ‘low cost/no cost’          contribution by the Department       winner of the Proposition 3047
                                         implementation of the                                                   officers, advisory information                                                                                                                           available to support a number
government. These included:                                                  of growth area development.                                             accessible housing measures to       of Sustainability and the            design competition and a follow-
                                         e-Planning Roadmap, which                                               and advice from Aboriginal                                                                                                                               of key council initiatives such
                                                                             Councils continued to be                                                encourage a consistent approach      Environment (DSE) to the policy      up workshop for local councils,
· Objective Rules and Tests,             resulted in a successful $1.2                                           Affairs Victoria. The MAV was                                                                                                                            as rural planning and Cutting
                                                                             concerned by pressure for urban                                         by councils. The MAV continued       development process.                 and completion of the MAV
   which examines methodology            million budget bid to enable the                                        also pleased to see that many                                                                                                                            Red Tape activities.
                                                                             use in the green wedge areas                                            to advocate for the integration of   Discussions covered how policy       green wedge research report.
   for the development and               extension of the electronic                                             of the matters raised in its
                                                                             that encircle Melbourne, and                                            sustainability assessment into       objectives are supported by the      As part of the first five-year
   application of objective rules        planning applications system to                                         submission were adopted by
                                                                             the MAV sought to build                                                 councils’ planning approvals         tools or controls available and      Melbourne 2030 review, the
   and tests for permit                  handle all planning application                                         the State Government, notably
                                                                             relationships with staff of the                                         processes, and worked with the       how well the policy development      MAV prepared an issues paper
   assessment against local              types. Funding was also                                                 the change to the transitional
                                                                             GAA to progress this ongoing                                            Building Commissioner to             and permit assessment process        identifying local government
   government planning policy.           provided to the MAV to support                                          arrangements, which ensured
                                                                             issue. The MAV also worked                                              explore issues facing the sector     resolves tension between state       implementation issues and
· Track Based Assessment,                councils with the implementation                                        that all permit applications
                                                                             with the GAA on the Creating                                            and identify strategies to improve   and local policy objectives.         strategies to resolve them.
   which analyses and creates            of ‘Cutting Red Tape’ projects,                                         lodged at the commencement
                                                                             Liveable New Communities                                                working relationships between        The group agreed on a                The MAV call for interstate and
   guidelines for development            including e-Planning. Progress                                          of the scheme, but not yet
                                                                             project, which aims to provide                                          local government and the             framework for improved clarity       international experts to
   ‘tracks’ for applications in          was made in improving                                                   determined, were not affected
                                                                             planning guidance for                                                   Commission. As a participant         about the role in planning of        undertake a critique of
   each jurisdiction                     integration with other local                                            by the new regime. In the
                                                                             developers and councils.                                                in the Planning and Building         local government, the Victorian      implementation as part of the
· Benchmarking, which provides           government e-services projects                                          post-settlement heritage area,
                                                                             The provision for the state to                                          Approvals Issues Forum, the MAV      Civil Appeals Tribunal, Panels       M2030 review led to the
   each state and territory with         such as the NeDA project                                                the MAV was invited by
                                                                             collect developer contribution                                          joined other sector associations,    Victoria and regional and head       inclusion of Vancouver planning
   indications of the best practice      and EasyBiz.                                                            Heritage Victoria to participate
                                                                             charges to bring forward state                                          state government departments         offices of DSE.                      expert Dr Anne McAfee on the
   options available, and                                                                                        in the Reference Panel for
                                                                             infrastructure and services in                                          and industry bodies to deal                                               audit expert group. The MAV
· Electronic Development                                                                                         the Framework of Historic
                                                                             growth areas did not progress                                           with the complex range of                                                 also provided input to a Retail
   Assessment, a national                                                                                        Themes project.
                                                                             as quickly as was originally                                            government instruments that                                               Policy Review announced by
   communication protocol to
                                                                             envisaged and work will                                                 oversee housing for older people.                                         the Minister for Planning.
   facilitate the electronic
   processing of development                                                 continue on resolving this issue.
   applications, covering the
   entire process.




14   PLANNING & BUILDING MAV ANNUAL REPORT 2006/07                                                                                                                                                                                                            MAV ANNUAL REPORT 2006/07 PLANNING & BUILDING   15
           PLANNING                                    RURAL                      STREAMLINING                       SUSTAINABLE
            SYSTEM                                   PLANNING                     THE PLANNING                          BUILT
The MAV convened an expert                            PROJECT                         PERMIT                        ENVIRONMENT
planners’ group to assist with           The MAV advocated strongly                 PROCESS                    In 2006/07 the Ecologically
input to the Ministerial Statement       for additional funds to support    The outcomes of the Cutting Red    Sustainable Development (ESD)
and other projects including             councils with applying the new     Tape in Planning Review were       Advocacy Group, which was
planning fees, the planning bank         rural zones, resulting in the      announced, following input from    established to provide a forum
and the Code Assess pilot.               granting of a further $500,000.    the MAV, councils and              for debate and advocacy on the
The Planning Minister, Hon               The MAV formed a Rural             particularly the work of the       strategic direction of State and
Justin Madden, joined local              Planning Project Steering          Eastern Region Councils and the    local ESD policy, developed
government representatives at            Committee to assist councils       Provincial Planners Network.       relationships with the Victorian
the Spotlight on the Planning            apply the new rural zones and      Among the 43 recommendations       Building Commission, VicUrban,
System forum, which provided             build capacity for longer-term     was an expanded range of           RMIT, the Property Council of
an important opportunity for             planning and management of         planning permit exemptions for     Australia and other building
participants to identify key             rural land. A submission was       minor works; examination of        agencies to support sharing
challenges facing the planning           made in response to the            options to update current          information and practice.
system in Victoria. The forum            Department of Sustainability and   statutory planning fees and the    Quarterly forums were held
heard from Gordon Price,                 Environment’s paper Applying       Planning and Environment Act;      focusing on issues facing
former councillor and Director           the Rural Zones. Planning          and preparation of a Ministerial   councils in relation to the
of Vancouver’s City Program,             commenced for a forum to be        statement on local policy.         sustainability of the built
and planning experts from RMIT,          held in August 2007 that will      The MAV was asked to represent     environment.
Melbourne University and La              facilitate sharing information,    local government on an expert
Trobe University. The MAV also           knowledge and practice related     working group overseeing
contributed to a number of               to the planning and                preparation of the Ministerial
reviews of technical provisions          management of rural land.          Statement. The MAV continued
of the planning system, such as                                             to advocate for greater weight
advertising signage, heritage,                                              to be given to local policy, and
subdivisions and registrar’s fees.                                          for councils to develop policy
                                                                            that is expressed in unambiguous
                                                                            language and can be applied
                                                                            through clear controls, and
                                                                            objective rules and tests.




16   PLANNING & BUILDING MAV ANNUAL REPORT 2006/07                                                                                                MAV ANNUAL REPORT 2006/07 PLANNING & BUILDING   17
HUMAN SERVICES &                                                                                                                                                                        Research, representation and resource provision were
                                                                                                                                                                                        just some of the ways the MAV helped local government
PUBLIC HEALTH                                                                                                                                                                           improve vital health services across the community.

               AGED                                    AGED                                POSITIVE                      DISABILITY                                EARLY                               FOOD                              HOUSING                                     MATERNAL &
                                                                                                                                                                   YEARS                               SAFETY                 A co-operative project between                           CHILD
               CARE                                    CARE                                AGEING                         SERVICES                                                                                            the MAV, Swinburne University,                           HEALTH
The MAV contributed to the                           FUNDING                  The MAV, in partnership with                                           A number of valuable early         In the past, new statutory
                                                                                                                        PROVISION &                  years resources were produced      obligations under the Food Act        the Department of Human                     The MAV commenced its
report Moving to Centre Stage,           The baseline study of Home and       the Council of the Ageing,                 ADVOCACY
                                         Community Care (HACC) costs                                                                                 for councils, including MAV’s      1984 have been imposed on             Services and Department of                  research into the unit costs for
published in August, which                                                    continued to manage the             Following MAV advocacy to
                                         commenced in early 2007 and                                                                                 framework on Municipal Early       local government with little          Sustainability and Environment              Maternal and Child Health
examined the community care                                                   Positive Ageing Project, with six   the Ministerial Taskforce on
                                         will inform the MAV’s discussions                                                                           Years Planning; the results of a   consultation. The MAV lobbied         worked on updating the Housing              (MCH) services and the current
needs of aged Victorians, and                                                 councils having projects funded     Accessible Housing, the State
                                         on the State Government’s                                                                                   survey of all Victorian councils   for local government interests        Toolkit publication for use by              distribution of MCH funds from
called for an additional $500                                                 in 2006/07, and a further 17        Government committed to
                                         contribution to HACC services.                                                                              that clearly demonstrated local    and expertise to be incorporated      local government. Following                 the State Government to
million annually in government                                                to receive project funding in       establishing a statewide
                                         The MAV supported the                                                                                       government support for early       into the development of statutory     the release of the Victorian                councils. The Department of
funding to provide for the                                                    2007/08, 11 of which are            Accessible Housing Program,
                                         advocacy efforts of the Southern                                                                            childhood services; and a          and administrative improvements       Housing Strategy in September,              Human Services (DHS) agreed to
increase in the ageing                                                        financially disadvantaged           encompassing an awareness
                                         Metropolitan Region councils                                                                                discussion paper on centralised    in food safety regulation. In         further work was done to align              consider these research findings
population and its complex care                                               councils. The project negotiated    campaign, a simple rating
                                         for an evaluation of the Victorian                                                                          childcare waiting lists. The MAV   response, the Minister for Health     the resource with statewide                 and the impact on funding levels
needs. Funding from the                                                       Melbourne’s participation in        system and an industry-led
                                         HACC funding formula and                                                                                    Early Years Strategy Group was     provided $150,000 per annum           policy directions. The May state            in consultation with the MAV.
Department of Human Services                                                  the World Health Organisation       ‘Homes for life’ guide. In
                                         assisted 17 councils unsuccessful                                                                           formed to enhance MAV policy       over three years to the MAV           budget announcement of a                    Data was collected from a
enabled the engagement of                                                     Global Age-friendly Cities          preparation for the introduction
                                         in their re-tender for Veteran                                                                              positions and actions on early     for a Department of Human             $500 million funding boost to               representative sample of councils
three senior project officers to                                              Project, and will use the           of the new Victorian Disability                                                                             expand and improve the public
                                         Home Care services to negotiate                                                                             years matters and to support       Services/MAV Food Safety                                                          and research was on track for
commence implementation of                                                    results, due in October 2007,       Act 2006, the MAV conducted                                                                                 housing budget paved the way                completion in mid 2007, ahead
the HACC Assessment                      better transition arrangements       as the basis for an ‘age-friendly   a survey on progress being         partnership work with the          Co-ordination Project to tackle
                                         and provide feedback to the                                                                                 Department of Human Services       recommendations made by               for partnerships between local              of the next State Budget cycle.
Framework, Access Points and                                                  cities’ guide for other councils    made by local government in
                                         Department on the tendering                                                                                 Office for Children. The MAV       the Auditor General and the           and state governments and                   The MAV, DHS and councils
Active Service Models and the                                                 in Victoria.                        developing and implementing
                                         process and outcomes. The MAV                                                                               responded to the review of the     Victorian Competition and             developers to develop                       contributed to the review of
continuation of the Culturally                                                                                    Disability Action Plans. The MAV
                                         also made a submission to the                                                                               Children’s Services Regulations    Efficiency Commission in recent       affordable housing.                         the MCH Key Ages and Stages
Equitable Gateways Strategy                                                                                       strongly advocated the interests
                                         Commonwealth Department of                                                                                  by hosting a forum for councils    years. This project provides the                                                  service activities, based on
(CEGS). The MAV’s work with                                                                                       of its members on the issue of
                                         Health and Ageing’s Review of                                                                               and preparing a response to        resources and close working                                                       evidence of the most effective
councils on CEGS has seen                                                                                         disability compliance for bus
                                         Subsidies and Services in                                                                                   the State Government. Detailed     relationship with the Department                                                  MCH service intervention with
significant progress achieved in                                                                                  stops, securing agreement from
                                         Australian Government Funded                                                                                consultation with councils was     of Human Services that will assist                                                families, and also the
areas of diversity planning, good                                                                                 the State Government to ensure
                                         Community Aged Care Programs.                                                                               undertaken regarding models of     local government to better                                                        development of the business
practice, workforce training and                                                                                  the Department of Infrastructure
                                                                                                                                                     viable family day care. Advocacy   administer food safety regulations.                                               case for a statewide information
recruitment, research and client                                                                                  conducts and pays for compliance
                                                                                                                                                     work related to a Kindergarten                                                                                       technology program to support
data collections.                                                                                                 audits and necessary upgrades.
                                                                                                                                                     Summit with Whitehorse City                                                                                          MCH service management
                                                                                                                  A review by the MAV of the
                                                                                                                                                     Council, combined with the                                                                                           by councils.
                                                                                                                  Disabled Persons’ Parking
                                                                                                                  Scheme resulted in a range         recommendations from
                                                                                                                  of recommendations: work           significant earlier work by the
                                                                                                                  continued with VicRoads and        MAV on Kindergarten Cluster
                                                                                                                  the Office for Disability in the   Management, was influential
                                                                                                                  Department for Victorian           in securing considerable budget
                                                                                                                  Communities to consider            commitments for kindergartens
                                                                                                                  implementation of a                in the 2007 State Budget.
                                                                                                                  revised scheme.




18   HUMAN SERVICES & PUBLIC HEALTH MAV ANNUAL REPORT 2006/07                                                                                                                                                                                    MAV ANNUAL REPORT 2006/07 HUMAN SERVICES & PUBLIC HEALTH   19
     MULTICULTURALISM                               TOBACCO                            YOUTH
In March, the MAV Board                  2006/07 was a challenging year      On behalf of local government
endorsed the MAV Statement               for councils in providing           nationally, the MAV convened the
of Commitment to Cultural                education and enforcement of        National Local Government Youth
Diversity, which aims to harness         the smoking reforms introduced      Symposium in May, attended by
and nurture cultural diversity           by the State Government in          councils from across Australia.
at the local level. The MAV              2005. The MAV was successful        Over 100 delegates participated
convened the Interface Councils’         in seeking an assessment of         to affirm and extend the role of
workshop on responding to                councils’ role in responding to     local government in engaging
cultural diversity, which covered        complaints of smoking in            and including young people.
best-practice responses to               enclosed workplaces. The MAV        The theme of the Symposium was
cultural diversity, future               also made representations to        that young people strongly
challenges and strategies to             the Ministers for Health and        identified with ‘place’, and thus
strengthen existing planning,            Planning and Environment            local government plays a critical
policy and service development           about the possible adverse          role across its many functions.
frameworks. Quarterly meetings           consequences likely to arise from   The Hon. James Merlino, Victorian
were initiated with the CEO              the ban on smoking in enclosed      Minister for Sport, Recreation and
and staff of the Victorian Ethnic        licensed premises. As a result,     Youth Affairs addressed the
Communities Council to                   the Department of Human             symposium and acknowledged
strengthen communication                 Services agreed to establish        the role of the universal services
and collaboration between the            an inter-governmental working       provided by councils in supporting
two peak bodies. The MAV                 group, a significant                young people. A key feature of
responded to the Federal                 acknowledgement of the              the day was revisiting the MAV
Government’s proposed changes            need for co-ordination among        Local Government Youth Charter
to Australian citizenship laws,          agencies and government             and Good Practice Guide,
advocating against the                   sectors to deal with the            launched in 2004. As a result of
introduction of a Citizenship Test.      unintended consequences             MAV advocacy, the Minister later
                                         of tobacco reform. The MAV          indicated that state support would
                                         administered the service            be provided to further the
                                         agreements for 77 councils          implementation of the charter
                                         to receive funding to support       as a tool to assist councils in
                                         the provisions of the Tobacco       engaging young people. The
                                         Act 1987, providing a positive      MAV submission to the State
                                         example of the way local            budget 2007/08 included a
                                         government can be funded            section advocating for funding
                                         by the State Government to          to meet the particular needs
                                         perform regulatory activities.      of young people living in the
                                                                             interface council municipalities.




20   HUMAN SERVICES & PUBLIC HEALTH MAV ANNUAL REPORT 2006/07                                                     MAV ANNUAL REPORT 2006/07 HUMAN SERVICES & PUBLIC HEALTH   21
INFRASTRUCTURE                                                                                                                                                                           With infrastructure management rating as one of local government’s
                                                                                                                                                                                         greatest challenges, improvements to asset management capability
                                                                                                                                                                                         and fairer cost arrangements were welcome.

     ASSET MANAGEMENT                            CHRISTMAS                             REGIONAL                            ROADS                                  SPATIAL                          STREET
          CAPACITY-                             DECORATIONS                            TRANSPORT                In preparation for a review of
                                                                                                                                                                PLANNING                         LIGHTING
          BUILDING                      An accident caused by a council                 GROUPS                                                       The MAV continued its               A working group of councils,
                                                                                                                the Road Management Act,
Through the Advanced Step               contractor placing a sign on a       As part of an ongoing                                                   membership of the Victorian         the MAV and VicRoads
                                                                                                                the MAV hosted forums and
Program, the MAV continued              power pole was the catalyst for      commitment to assist members                                            Spatial Council, which is           addressed the long-standing
                                                                                                                conducted a survey to identify
to assist councils to undertake         a review of practices for erecting   to access funding from the                                              responsible for co-ordinating       issue of shared cost arrangements
                                                                                                                council concerns. The MAV
strategic and sustainable asset         signs and banners on power           Regional Strategic component                                            policy development on spatial       for arterial roads, which has
                                                                                                                agreed to form a working group
management programs by                  poles. The electricity industry      of the Commonwealth Auslink                                             planning and initiating             seen the sector paying more
                                                                                                                with VicRoads and councils to
working with experts to assess          proposed that electrical safety      program, the MAV worked with                                            stakeholder frameworks.             than 60% of lighting costs,
                                                                                                                review the issues identified and
and measure council asset               legislation be applied more          councils to establish the                                               The Property Information Project    despite an historical
                                                                                                                recommend appropriate action,
gaps and practices, resulting           rigorously and a sector-wide         necessary regional structures.                                          was a key agenda item               arrangement local government
                                                                                                                including legislative
in more rigorous and                    agreement adopted. The MAV           Input was also provided into the                                        in 2006/07. A review of the         would pay one-third of these
                                                                                                                amendments. The significant
independent assessments of              represented councils on the          funding framework developed                                             existing process for transferring   costs. Agreement was reached
                                                                                                                work undertaken by the MAV
asset management capabilities.          issue and organised training         by the Commonwealth, and the                                            property information from           that VicRoads would fund 60%
                                                                                                                led to changes in the Act that
Further work identified the need        accreditation. The timing of this    MAV supported and contributed                                           councils to State Government,       of the ongoing operation and
                                                                                                                became operational in October,
to align asset management               issue meant that some councils       advice to members on specific                                           which was funded jointly by local   maintenance costs of lights on
                                                                                                                including the transfer of
assessment and accounting               and street traders were not able     project bids.                                                           government and the Department       arterial roads, with councils to
                                                                                                                responsibility for water crossings
policies. Through the Australian        to install Christmas decorations.                                                                            of Sustainability and               fund 40%. Lights designed to
                                                                                                                to water and catchment
Local Government Association,                                                                                                                        Environment, concluded it           directly illuminate service roads
                                                                                                                management authorities.
the MAV requested $1.7million                                                                                                                        was not meeting stakeholder         were not deemed to be part of
                                                                                                                Advocacy for a third round
of a $13 million proposal from                                                                                                                       requirements. As a result, a        this cost-sharing arrangement -
                                                                                                                of Roads to Recovery funding
the Minister for Transport and                                                                                                                       stakeholder management group        councils would fund 100%
                                                                                                                commenced, as part of the
Regional Services to improve                                                                                                                         was established to identify a       of these lights, while VicRoads
                                                                                                                Australian Local Government
the capability of local                                                                                                                              best-practice framework.            would continue to fund 100%
                                                                                                                Association’s Fairer Funding
government’s asset management                                                                                                                                                            of the lights on freeways.
                                                                                                                campaign. The
practices, including more                                                                                       PricewaterhouseCoopers
effective management of asset                                                                                   national study on the financial
data. The MAV continued to                                                                                      sustainability of local
work with the State Government                                                                                  government incorporated
and through the Future of Local                                                                                 significant input from the MAV,
Government Project to develop                                                                                   and included recommendations
an agreed financial and asset                                                                                   to make funding for Roads to
management reporting                                                                                            Recovery permanent and the
framework. The MAV and                                                                                          establishment of a $250 million
Department for Victorian                                                                                        per year Local Community
Communities also worked                                                                                         Infrastructure Renewals Fund.
together to identify councils’
asset renewal gaps.




22   INFRASTRUCTURE MAV ANNUAL REPORT 2006/07                                                                                                                                                                                           MAV ANNUAL REPORT 2006/07 INFRASTRUCTURE   23
TRANSPORT                                                                                                                                                                                    Sustainability and safety concerns underpinned several
                                                                                                                                                                                             of the year's key transport initiatives.



               BUS                                  COMMUNITY                            CONGESTION                            MAV                                    FREIGHT                            RAIL                                 ROAD                           WALKING &
                                                                                 The MAV made submissions to                                             Following advocacy and a forum               CROSSINGS                              SAFETY                           CYCLING
             SERVICE                                 TRANSPORT                                                              TRANSPORT                    hosted by the MAV on behalf of      In consultation with the sector,   The MAV continued involvement     Following the State
                                           The MAV was involved in               the Victorian Competition and
             REVIEWS                                                             Efficiency Commission’s
                                                                                                                             STRATEGY                    the Country Rail Freight Alliance   the MAV provided input to the      with the VicRoads’ Speed Limits   Government’s announcement
The MAV continued to be                    promoting and developing the                                             The MAV’s Sustainable Transport                                          Australian Local Government        Advisory Group, the VicRoads’     of the Meeting Our Transport
                                                                                 congestion inquiry, which were                                          Network, the State Government
an active participant in the               State Government’s Transport                                             Action Plan was signed off by                                            Association on the model rail      Road Safety Reference Group,      Challenges, the MAV facilitated
                                                                                 subsequently incorporated into                                          committed $133.8 million
Metropolitan Bus Service Review            Connections program, designed                                            the MAV Board and the                                                    safety legislation developed       and the VicRoads’ Local           information flows on relevant
                                                                                 the Draft Report, Making the                                            during the state election to buy
Reference Group, which will                to fund a range of community-                                            Transport and Infrastructure                                             by the National Transport          Government Speed Limits           walking and cycling grant
                                                                                 Right Choices: Managing                                                 back the country rail freight
oversee the implementation                 based transport initiatives across                                       Advisory Committee in July.                                              Commission. The MAV worked         Reference Group. The MAV          packages for local government
                                                                                 Transport Congestion.                                                   network from Pacific National.
of the 16 Bus Service Reviews              rural, regional and interface                                            A new quarterly transport bulletin                                       with the Victorian Department      assisted Sinclair Knight Merz     including the Local Area Access
                                           municipalities in Victoria.           Submissions were also made to
between 2007 and 2010. The                                                                                          was commenced in September                                               of Infrastructure (DoI) to         conduct two local government      Program. The MAV was
                                           Planning was undertaken for a         the State Government’s East-
local government sector, along                                                                                      and a database of local                                                  communicate proposed changes       practitioner workshops on the     represented on the new
                                           series of regional forums, run in     West Link Needs Assessment.
with public transport operators                                                                                     government transport contacts                                            to rail safety legislation in      issue of speed limits on local    Ride2School Steering Committee.
                                           partnership with the Department       A number of councils contributed
and community groups, is a key                                                                                      was initiated to keep members                                            Victoria to the local government   roads to inform best-practice
                                           for Victorian Communities, to         to the MAV submissions and
participant in the process.                                                                                         informed. The MAV Transport                                              sector. Workshops were held in     guidelines. These workshops
                                           showcase existing community           many community representatives
                                                                                                                    and Infrastructure Advisory                                              Camperdown, Warracknabeal,         allowed local government to
                                           transport initiatives and to assist   made individual submissions.
                                                                                                                    Group developed three key                                                Benalla and Traralgon to explain   have significant input to the
                                           councils in considering future                                           priority areas for the coming                                            what the changes may mean for      future direction of the
                                           options in community-based                                               year: federal funding for                                                councils as road managers and      management of low speeds
                                           transport.                                                               transport; infrastructure related                                        a metropolitan forum on the        in residential areas.
                                                                                                                    to growth; and freight and rail                                          changes was hosted by DoI.         The MAV continued to assist
                                                                                                                    infrastructure with position                                             These sessions also outlined a     with the co-ordination of the
                                                                                                                    papers prepared on each                                                  new package of rail safety         2007 Australasian Road Safety
                                                                                                                    of these topics. All councils were                                       initiatives announced by the       Research Policing and Education
                                                                                                                    consulted in the development                                             Victorian Government.              Conference, ensuring that
                                                                                                                    of these positions.
                                                                                                                                                                                                                                local government would have
                                                                                                                                                                                                                                strong representation at this
                                                                                                                                                                                                                                important event.




24   TRANSPORT MAV ANNUAL REPORT 2006/07                                                                                                                                                                                                                          MAV ANNUAL REPORT 2006/07 TRANSPORT   25
ENVIRONMENT                                                                                                                                                                                Local government's crucial role in protecting and enhancing
                                                                                                                                                                                           the environment was reflected in the MAV’s concerted efforts
                                                                                                                                                                                           to influence environmental management issues.

             CLIMATE                             NATURAL                              WASTE                              WATER                                     ENERGY                           ECO-BUY
             CHANGE                             RESOURCE                           MANAGEMENT                         MANAGEMENT                     The MAV actively participated in      In recognition of the growth and
The annual MAV Environment                     MANAGEMENT                  Litter was a significant issue for   The MAV worked with the State        the Victorian Sustainable Public      opportunities presented by the
Policy Forum on climate change          In response to legal               the year, with the MAV providing     Government and Office of the         Streetlighting Action Group,          success of the ECO-Buy
was held in October, with               interpretations of the Catchment   input into the review of the         Victorian Auditor General on the     which is working to add more          program, it was determined by
presentations covering potential        and Land Protection Act 1994,      Victorian 10 Year Litter Strategy,   challenges for local government      energy-efficient lighting types to    the MAV and its ECO-Buy
climate change impacts on local         the MAV advocated for              new Litter Prevention Toolkits       in issuing, monitoring and           the list of allowable lighting        partners, the Department of
government, examples of council         legislative amendments to          and the expected litter impacts      enforcing septic tank permits.       technologies, as well as              Sustainability and Environment
mitigation and adaptation               ensure roadside weed               of the July 2007 tobacco             In July the MAV lodged a             negotiating fair and reasonable       and Sustainability Victoria, that
achievements, and                       management responsibility rests    reforms. The MAV made a              response to the Auditor-General’s    operation, maintenance and            ECO-Buy should be established
Commonwealth and State                  with adjoining land owners.        submission to the Productivity       report, which detailed the need      repair charges. In response to        as an independent, not-for-profit
Government climate change               The MAV Weed Management            Commission Inquiry into Waste        for ongoing support of existing      the State Government’s Victorian      entity. Scoping and business
positions and programs pertinent        Case Studies report was            Generation and Resource              partnership arrangements             Energy Efficiency Target Scheme       planning during the year laid the
to the sector. The MAV produced         completed, helping to raise        Efficiency calling for further       between local and State              Issues Paper, the MAV made a          foundations for the launch of the
a report on local government            awareness and identify             work on providing useful tools       Government to address resource       submission calling for local          new organisation in mid-2007.
activity in greenhouse gas              opportunities for the sector.      for communities to make              gaps limiting councils’ ability to   government to be enabled to
mitigation and climate change           The Local Government and           informed decisions on how            meet their domestic wastewater       contribute to the efficiency target
adaptation, detailing the sector’s      Natural Resource Management        to treat solid waste. The MAV        management responsibilities.         through local community actions
level of commitment to                  (NRM) Fact Sheet series was        hosted a forum on extended           Following MAV advocacy, the          and activities.
greenhouse management and               produced and distributed to        producer responsibility featuring    Bracks Government committed
acknowledging the high priority         increase NRM agencies’             expert speakers from North           $20 million for a Small Towns
that over half of Victoria’s            understanding of the sector’s      America along with local             Water Quality Fund and $10
councils place on the issue.            roles, responsibilities and        perspectives on Australian           million for local water recycling
The MAV also strengthened its           significant contribution.          initiatives. A forum in November     and stormwater projects. The
relationship with the various           The MAV consulted with both        showcased leading council            MAV also secured funding from
Regional Greenhouse Alliances,          the Federal and Victorian          ‘waste-wise’ management              the Environment Protection
enabling improved information           Governments, seeking improved      initiatives and launched a           Authority for continuation of
flow and an increased                   recognition and participation      series of tools, systems and         the MAV Smart Septics Program,
understanding of council                of local government in NRM         benchmarks to assist the             with further funding to be used
participation in climate                arrangements. The National         sector more effectively              to undertake a costing study of
change activities.                      Local Government NRM Policy        manage waste reduction,              council spending on domestic
                                        Position, which articulates the    recycling and litter prevention.     wastewater management and to
                                        sector’s commitment to NRM,                                             deliver professional development
                                        was endorsed by the MAV Board                                           opportunities to council
                                        in October.                                                             environmental health officers.




26   ENVIRONMENT MAV ANNUAL REPORT 2006/07                                                                                                                                                                                            MAV ANNUAL REPORT 2006/07 ENVIRONMENT   27
EMERGENCY MANAGEMENT &                                                                                                                                                                            Extensive preparation and effective use of resources
                                                                                                                                                                                                  figured as key management strategies for councils
COMMUNITY SAFETY                                                                                                                                                                                  facing natural and man-made disasters.

            DROUGHT                                CAPACITY                                 FIRE                               FIRE                                      GRAFFITI                              GAMING                           PANDEMIC                              RECOVERY
The MAV convened a Drought                         BUILDING                              HYDRANTS                          MANAGEMENT                      In October, the MAV hosted a           Following council input, the MAV              PLANNING            During the 2006/07 bushfires
                                       The MAV, together with the            The MAV continued to lobby              The Integrated Municipal Fire         forum with the Department of           prepared a sector-wide response     The MAV continued to focus on the MAV played a key role in
Taskforce to identify major issues
                                       Office of the Emergency Services      for the shifting of fire hydrant        Management Planning project           Justice to examine State and           to issues papers released by the    the implications for local         liaising with the State Recovery
for affected councils and provide
                                       Commissioner, drafted a               maintenance costs from councils         incorporated feedback from MAV        local government strategies and        Gambling License Review.            government in planning for,        Manager to ensure that the
advocacy to the State
                                       protocol to provide a consistent      to the water agencies, and played       and local government into the         responses to graffiti                  During the state election,          responding to and recovering       needs of affected councils were
Government. This work followed
                                       process for sharing council           an active role on the Fire Plug         final framework for consistent fire   management. Attended by the            the Government committed            from a human influenza             acknowledged and addressed.
a seminar convened by MAV for
                                       resources in an emergency             Working Party, which was                management planning. The              Minister for Police and                $250,000 to help councils           pandemic. The Association was The MAV worked closely with the
drought-affected councils and the
                                       situation. The MAV also made          convened by the Department              framework was endorsed by the         Emergency Services, participants       implement new planning powers       influential in gaining acceptance Department of Human Services
Departments of Primary Industries,
                                       a submission to the Office of         of Sustainability and Environment       State Government and will be          determined a partnership               over gaming venues and              by relevant state agencies for     (DHS) Emergency Management
Victorian Communities and
                                       Emergency Services                    to address the issue. Concerned         implemented over the next two         approach was needed to                 undertake social impact             co-ordination and support roles Branch to develop practical
Innovation, Industry and Regional
                                       Commissioner calling for action       at the slow progress of the group,      years. The MAV was also               eradicate unsolicited graffiti, with   assessments. To assist local        to assist local government in the guidelines to assist local
Development. The MAV secured
                                       to resolve inconsistencies in local   the MAV ran a workshop to seek          instrumental in expediting the        councils to work collaboratively       government planners with            event of an outbreak. A            government planning for
a commitment from the State
                                       government emergency                  further progress, in particular to      release of the Essential Water        with other stakeholders and local      implementing these changes the      workshop in December held in recovery from disasters. The
Government that $300,000
                                       management planning, practice         lobby for a legislative review of       Replenishment Guidelines by the       strategies to be underpinned by        MAV, along with other interested    conjunction with the Department MAV was also instrumental in
provided to all councils in severely
                                       and competencies. A statewide         the Water Act. Advocacy by the          Department of Sustainability and      State funding and strategic            advocacy groups, convened a         of Human Services, the Office      arranging the Municipal
affected areas would not require
                                       survey was conducted to identify      MAV and north-west councils led         Environment and the release of        support. The MAV also held a           forum with speakers from the        of Emergency Services              Emergency Management
matched funding.
                                       the demographics, experience          to the State Government agreeing        a standard spreadsheet template       workshop with councils to discuss      Victorian Commission for            Commissioner and the Red Cross Enhancement Group annual
                                       and training needs of council         to provide $1.25 million in             by the Department of Treasury         a sector-wide submission being         Gambling Regulation, Maddocks       provided a valuable opportunity conference, based around the
           FLOOD                                                                                                                                                                                                                      for councils and agencies to
        MANAGEMENT                     officers with emergency               funding for the installation of fire-   and Finance to assist fire-           developed in response to the           Lawyers, the Planning Institute                                        theme of recovery, and arranged
Membership of the State Flood          management roles. The survey          fighting infrastructure along the       impacted councils lodge claims        State’s draft graffiti legislation.    and Department of Sustainability    begin to consider regional         for the State Recovery Co-
Policy Committee and the Victorian     revealed many examples of             Wimmera Mallee Pipeline.                for emergency expenditure                                                    and Environment. In April the       responses and co-ordination in ordinator to update council
Flood Warning Consultative             good practice and identified a                                                applications. A video conference                   DRUGS &                   MAV made a submission to the        large-scale health emergencies. practitioners on how DHS works
Committee highlighted the MAV’s        range of needs to inform MAV’s                                                covering Melbourne, Sale and                       ALCOHOL                   Victorian Parliament Select                                            with councils to progress
key stakeholder role in statewide      representation at the state level.                                            Benalla was organised by the          The MAV agreed to take on              Committee on Gaming                                                    recovery planning.
flood management planning and                                                                                                                              an executive role with the Local       Licensing, arguing for stronger
                                                                                                                     MAV to brief fire-impacted
policy. The MAV advocated the                                                                                                                              Government Drug Issues Forum           requirements for the Community
                                                                                                                     councils on emergency
interests of local government                                                                                                                              and continued to work to               Support Fund, shorter review
                                                                                                                     expenditure reimbursement.
during the development of the                                                                                                                              improve information sharing            periods and lengths for gaming
State Flood Response Plan and                                                                                                                              on drug and alcohol issues with        licenses, and a separation of the
the review of the State Flood                                                                                                                              members. The MAV made                  monitoring and operational
Strategy and was instrumental                                                                                                                              submissions to the Packaged            functions for electronic gaming
in gaining participation for a                                                                                                                             Liquor Inquiry initiated by            machines to ensure probity.
number of interested councils in                                                                                                                           Consumer Affairs Victoria,
the Melbourne and Metropolitan                                                                                                                             and the Department of Human
Flood Warning Arrangements                                                                                                                                 Services discussion paper,
Forum.                                                                                                                                                     Towards a New Blueprint for
                                                                                                                                                           Alcohol and Other Drug
                                                                                                                                                            Treatment Services.




28   EMERGENCY MANAGEMENT & COMMUNITY SAFETY MAV ANNUAL REPORT 2006/07                                                                                                                                                                     MAV ANNUAL REPORT 2006/07 EMERGENCY MANAGEMENT & COMMUNITY SAFETY   29
COMMUNITY DEVELOPMENT                                                                                                                                                                      Active consultation with local communities, supported by a
                                                                                                                                                                                           clear understanding of their needs, emerged as increasingly
                                                                                                                                                                                           important aspects of local government decision making.

         COMMUNITY                              COMMUNITY                                    PAY                             SMALL                                 HUMAN                         VOLUNTEER
         INDICATORS                              PLANNING                                  PHONES                           TOWNS                                   RIGHTS                      PARTICIPATION
Community Indicators Victoria          The first year of the MAV’s three-     At the October 2006 MAV State                VICTORIA                                CHARTER                 Volunteering makes a vital
                                                                                                                  The Small Towns Victoria             The Charter of Human Rights         economic and social
(CIV) was launched following a         year Lighthouse Program                Council meeting, it was resolved
                                                                                                                  Program (STVP), a $1.8 million       and Responsibilities was passed     contribution to Victorian
collaborative project to develop       concluded, with 69 councils            that the MAV should advocate
                                                                                                                  five-year project to address         by the Victorian Parliament and     communities. In 2006/07
a centralised system for               actively involved in                   for a moratorium on the removal
                                                                                                                  issues facing small rural towns,     became law on 25 July 2006.         the MAV furthered the interests
measuring the well-being of local      understanding, exploring and           of payphones in local
                                                                                                                  was launched in September.           The introduction of the Charter     of local government in
communities. CIV is an                 implementing community                 communities until Telstra
                                                                                                                  Several initiatives were             has many implications for           volunteering through several
interactive resource which uses        planning initiatives. In September     engaged in meaningful
                                                                                                                  completed in 2006/07,                council service provision and       initiatives delivered under the
up to 80 indicators across a           the MAV hosted a community             consultation. The MAV advised
                                                                                                                  including the provision to 38        must be understood by a wide        Local and Regional Resource
range of social, environmental,        planning forum to enable               Telstra that the local government
                                                                                                                  rural councils of Sensis Business    range of local government           Networks program, funded by
economic, cultural and political       councils to share their                sector had significant concerns
                                                                                                                  Activity Statements, as well as      officers. The MAV worked with       the Department for Victorian
aspects to measure community           community planning knowledge,          about payphone removals.
                                                                                                                  reports from the National            the Departments of Justice,         Communities. The Tracking
well-being. Existing data from the     initiatives and models, while the      While recognising that a number
                                                                                                                  Institute of Economic and            Human Services, and Victorian       What Works report, which
Australian Bureau of Statistics        Planning By and For the People         of the removals may be
                                                                                                                  Industry Research detailing each     Communities to determine how        explored the relationship
and Victorian government               Conference in December further         legitimate on the basis of low
                                                                                                                  council’s performance on several     training on the Victorian Charter   between voluntary activity
departments was brought                explored global, national and          patronage, many councils
                                                                                                                  key economic indicators. A Rural     of Human Rights and                 and community strengthening,
together with newly collected          local trends that facilitate greater   expressed concern over the low
                                                                                                                  Councils Victoria Forum was          Responsibilities could be           was published in conjunction
indicators into a centralised          community engagement in                level of consultation undertaken
                                                                                                                  conducted in April, at which         delivered to the local              with the Deakin University
source of information. The MAV         community planning processes.          by Telstra and the lack of
                                                                                                                  members broadly endorsed the         government sector.                  Centre for Citizenship and
was a key contributor to this          The Lighthouse Program                 consideration about issues such
project and has an ongoing             continued to progress regional         as community safety, isolation,     work being undertaken by the                                             Human Rights. The MAV also
advisory role, reflecting its          meetings of councils, and also         equity and access, which is a       STVP Steering Committee. Other                                           participated in meetings with
commitment to assisting councils       played a role in facilitating the      requirement of Telstra’s current    initiatives commenced during the                                         councils and community
in community planning and              Port Phillip Community Summit          Universal Service Obligations.      year included a survey of current                                        organisations about the
economic development.                  in April. This successful event,       The MAV continued to urge           economic and community                                                   $6 million Volunteer Support
                                       which was attended by some             Telstra to further consider the     development initiatives being                                            Grants program, which supports
                                       800 local citizens, utilised           impact of payphone removals         undertaken in rural councils, and                                        opportunities for people to
                                       technology and a ‘bottom up’           and to cease removals until         research into the drivers of rural                                       volunteer in their community.
                                       community planning process to          more consultation has               economic development being                                               Workshops were also run to
                                       identify community priorities.         been completed.                     conducted by Swinburne’s                                                 assist councils with developing
                                       At the third Future of Local                                               Australian Graduate School                                               volunteering partnerships.
                                       Government Program in June,                                                of Entrepreneurship.
                                       community planning was
                                       endorsed as a key process that
                                       needs to be implemented across
                                       the sector.




30   COMMUNITY DEVELOPMENT MAV ANNUAL REPORT 2006/07                                                                                                                                                                            MAV ANNUAL REPORT 2006/07 COMMUNITY DEVELOPMENT   31
GOVERNANCE &                                                                                                                                                                             The MAV continued to work towards improving the performance
                                                                                                                                                                                         of local government by facilitating opportunities for skill
COUNCILLOR DEVELOPMENT                                                                                                                                                                   enhancement and contributing to the process of electoral reform.

       CONFLICTS OF                             COUNCILLOR                          COUNCILLOR                        COUNCILLOR                            ELECTORAL                               ELECTORAL
         INTEREST                               DEVELOPMENT                        REMUNERATION                        TRIBUNAL                           REPRESENTATION                             REFORM
In response to expressions of                     PROGRAM                    At the MAV State Council           During the MAV’s strategic
                                                                                                                                                             REVIEWS                     With simultaneous local              was also requested to undertake
                                        In July the MAV released the                                                                                The MAV facilitated workshops        government elections in all 79       a statewide campaign to
concern about legislative                                                    meeting in May, the Minister for   planning process, councils
                                        Councillor Competency                                                                                       for interested councillors and       Victoria councils to be held in      encourage voting and ensure
provisions relating to interests                                             Local Government, Hon. Richard     identified a need for the
                                        Framework, the result of                                                                                    council officers and the Victorian   November 2008, the MAV               that Returning Officers do
and conflicts of interest, the MAV                                           Wynne announced a                  Association to examine suitable
                                        research into the competencies                                                                              Electoral Commission, which          invited councils to identify areas   not provide assistance to
sought advice from members                                                   remuneration review for elected    processes and models for
                                        necessary to be an effective                                                                                enabled attendees to better          of potential electoral reform.       candidates where the statement
about the specific issues that                                               councillors. The announcement      dealing with councillor conduct
                                        councillor. The seven key                                                                                   understand the background to         The feedback informed the MAV        submitted by the candidate
required addressing. The                                                     followed a long-term campaign      issues. In response, the MAV
                                        competencies identified were                                                                                the current Electoral Review         position paper, which proposed       exceeds the maximum number
overwhelming response was that                                               by the MAV to ensure               prepared a discussion paper
                                        leadership; strategy; relationship                                                                          Process (ERP), the legislative       legislative changes to:              of words allowed.
the provisions were unnecessarily                                            allowances adequately reflected    outlining current practices,
                                        management; financial                                                                                       and public consultation              · reduce the caretaker period
complicated and an overhaul of                                               the workload, time commitment      approaches in other jurisdictions
                                        management; governance;                                                                                     processes, the VEC guidelines,          and the limitations imposed
the requirements was needed.                                                 and skills of elected local        and options for reform.
                                        environment and asset                                                                                       internal structure considerations,      in relation to contracts
As a result, the MAV provided                                                government representatives.        Following consultation within
                                        management; and land-use                                                                                    and matters relating to ‘fair and    · eliminate the legislative
assistance to Ombudsman                                                      The 2003 and 2006 MAV              the sector, representative groups
                                        planning. These competencies                                                                                equitable representation’.              obligation for the CEO to
Victoria in the ‘own motion’                                                 Councillor Census both             and the Minister’s office,
                                        were used as the basis for                                                                                  Material detailing the processes        write to each person whose
review. Further work will depend                                             suggested that allowances are      agreement was reached that
                                        expanding the MAV’s 2007                                                                                    and data relating to review             enrolment has lapsed,
upon the recommendations                                                     not adequate. A previously         all parties should progress this
                                        councillor development offering                                                                             outcomes were distributed               advising of the requirement to
made in the review and the                                                   released MAV discussion paper      issue collectively. The MAV
                                        from 4 to 14 workshops with                                                                                 to attendees. The State                 renew the enrolment
response of the State                                                        examining models used in other     distributed its discussion paper
                                        new workshops offered in areas                                                                              Government committed to a            · ensure consistency between the
Government. The MAV                                                          jurisdictions was updated and      for consultation with members
                                        such as leadership,                                                                                         comprehensive review of the ERP         ‘gift’ disclosure requirements
continued to provide training to                                             re-released in conjunction with    and feedback contributed to
                                        environmental management,                                                                                   process following the completion        for Pecuniary Interest Returns
councillors and senior officers                                              the announcement, with a view      the development of an Exposure
                                        strategy and speed reading.                                                                                 of the current cycle of reviews.        and Campaign Returns
on the interest provisions and                                               to developing a united position    Draft and Recommendations
provided assistance to individual       The Councillor Development           on how councillor remuneration     considered by State Council.                                             · provide for a timeframe of
councillors in understanding the        Weekend in July was once again       should be structured into          Members resolved to support the                                             more than six-months for the
application of the provisions in        a successful event, with 157         the future.                        establishment of an independent                                             adoption of the Council Plan
particular circumstances.               councillors coming together at                                          tribunal to handle allegations of                                           after an election.
                                        the Cumberland Resort in Lorne.                                         councillor misconduct and                                                A request was also made to
                                        Popular speakers included Joe                                           agreed to overarching principles.                                        the State Government to provide
                                        Goldman from the deliberative                                           Following this work, the State                                           a general exemption from the
                                        democracy organisation                                                  Government agreed to establish                                           tendering requirements for
                                        AmericaSpeaks, Jude Munro,                                              a tribunal to arbitrate serious                                          electoral services contracts and
                                        CEO City of Brisbane and                                                disputes between councillors or                                          to implement additional
                                        comedian Tracey Harvey.                                                 councillors and council officers.                                        initiatives to deliver quality,
                                                                                                                                                                                         cost-effective services and
                                                                                                                                                                                         provide clarification about
                                                                                                                                                                                         caretaker limitations. The VEC




32   GOVERNANCE & COUNCILLOR DEVELOPMENT MAV ANNUAL REPORT 2006/07                                                                                                                                                                   MAV ANNUAL REPORT 2006/07 GOVERNANCE & COUNCILLOR DEVELOPMENT   33
WORKFORCE &                                                                                                                                                                                 Recognising the human resource challenges faced by individual
                                                                                                                                                                                            councils, the MAV harnessed the collective power of the sector to
PROFESSIONAL DEVELOPMENT                                                                                                                                                                    provide programs that attract, develop and retain the best people.

       PROFESSIONAL                             EMPLOYMENT                               CAREERS                  MATERNAL & CHILD                                 SEEK                               PLANNING                       WORKFORCE                                        WORKPLACE
       DEVELOPMENT                                BRAND                                   EXPOS                        HEALTH                                    ALLIANCE                               BANK                         PLANNING &                                       RELATIONS
         PROGRAM                        Detailed research into the sector   The Careers in Local                    WORKFORCE                       In March the MAV entered into           The Planning Bank was launched             SERVICES                             The Australian Industrial
In partnership with the Australian                                                                                  RECRUITMENT                     a partnership with online job           in February in response to the         ADVISORY GROUPS                          Relations Commission invited the
                                        employment brand commenced          Government Village made its                                                                                                                        As part of the MAV’s ongoing
Institute of Management (AIM),          with local government human         debut in April and May 2007         The Maternal and Child Health       advertiser SEEK to establish the        identified shortage of town                                                     MAV to participate in regular
                                                                                                                Services (MCHS) Workforce           Local Government Job Centre.            planners in local government       involvement in workforce                     forums to discuss its services and
the MAV revamped its officer            resources representatives at the    at the two largest career expos
                                                                                                                Initiatives project continued to    This facility enables visitors to the   across Victoria, particularly in   planning issues, two advisory                provide constructive feedback.
development calendar by                 Local Government Workplace          in Melbourne, promoting local
                                                                                                                respond to projected shortages      MAV’s website to search current         regional and rural areas.          groups were formed, one with                 The MAV attended a number of
incorporating the seven existing        Conference in May. Agreement        government careers to over
                                                                                                                of MCH nurses by implementing       vacancies in local government and       The Bank was promoted to all       representation from metropolitan             seminars presented by Industrial
GetSet workshops as foundation          was reached to use a ‘common        55,000 job seekers. The 36m2
                                                                                                                marketing, recruitment and          provides a complementary listing        relevant council chief executive   councils and the other from                  Relations Victoria on their
workshops and adding four               language with 79 accents’ to        expo stand featured new local
                                                                                                                retention strategies. A brand was   for councils advertising positions      officers and was supported with    regional and rural councils.                 Workforce Participation
advanced workshops: Advanced            raise awareness of local            government branding, a plasma
                                                                                                                developed for the marketing of      vacant through SEEK. Under the          three regional planner forums.     The groups commenced work                    Partnerships program and other
Project Management; Finance             government as an employer.          screen with multi-media
                                                                                                                Maternal and Child Health           partnership agreement, councils         The response from the planning     to identify, discuss and develop             key initiatives. Discussions were
for Non-finance Managers;               The local government                presentations and internet
                                                                                                                Nursing as a career and             can place casual advertisements         industry was very positive.        appropriate responses to a                   held with the Australian Services
The New Manager; and Time               employment brand was                terminals for surfing council job
                                                                                                                included marketing materials        with SEEK through the Local             Over 50 registered planners        range of workforce issues                    Union (ASU) and in-principle
Management. The AIM                     launched at the Careers in Local    vacancies. The eleven councils
                                                                                                                for use by councils. A website,     Government Job Centre, and the          were registered in the pool,       including skills shortages, ageing           agreement was reached to work
partnership offers high quality         Government Village. The blue        that participated in the career
                                                                                                                www.mchnursing.org.au, was          MAV receives 15% commission on          and in the first few months of     workforce, ageing population,                collaboratively on matters of
training to MAV members at              and white branding featured the     village program were: Bass
                                                                                                                launched, on which councils can     all advertisements placed through       operation a number of requests     the branding and marketing                   mutual interest. The MAV
a substantial discount.                 slogan, ‘Different people make a    Coast, Bayside, Campaspe,
                                                                                                                promote MCH nursing positions       its website. These funds are set        from councils were successfully    of local government and other                provided a response to an ASU
Understanding Local                     difference in local government’     Glen Eira, Hobsons Bay,
                                                                                                                for free. The site also provides    aside for promoting careers in          matched to suitable resources.     human resource management                    proposal for a review of the
Government continued to be              and was used to identify the        Kingston, Knox, Maribyrnong,
                                                                                                                information about MCH careers       local government.                                                          related matters. Some 37                     Local Government (Long Service
MAV’s most popular officer              expo stand and carried over         Moreland, Wellington,
                                                                                                                for students and resources for                                                       WORKPLACE                 councils are represented on                  Leave) Regulations 2002. The
development workshop with               into newspaper advertising          Whittlesea.
                                                                                                                the current MCH nursing                           SKILL                             CONFERENCE                 these groups through their                   MAV worked with councils to
80 people completing the                and printed brochures.
                                                                                                                workforce. Work also progressed                SHORTAGES                    The inaugural Local Government     human resource management                    determine the sector’s approach
course, including six in-house
workshops at councils.                                                                                          with the Department of Human                     REPORT                     Workplace Conference, hosted       practitioners.                               to a new industrial agreement
                                                                                                                Services Grampians region on a      The Australian Local                    by the MAV, offered a diverse                                                   for early childhood workers.
                                                                                                                                                    Government Association (ALGA)           workshop program. High-calibre                                                  The MAV wrote to the Minister
            GOGRAD                                                                                              model to increase workforce
                                                                                                                                                    agreed to a study assessing the         facilitators addressed a range                                                  for Employment and Workplace
The MAV’s GoGrad program is                                                                                     supply through a pilot rural
                                                                                                                                                    overall skill shortages in local        of topics including workforce
a high quality marketing,                                                                                       health bank.                                                                                                                                                Relations expressing concerns
                                                                                                                                                    government and initiatives being        planning, organisational                                                        about the financial and
recruitment, screening and
                                                                                                                                                    undertaken by state associations        development, employee                                                           resource costs of the proposed
selection program that supports
                                                                                                                                                    to address this issue. The MAV          relations, occupational health                                                  WorkChoices changes
councils with the graduate
                                                                                                                                                    co-ordinated this national              and safety, attraction and
recruitment process. In 2006/07                                                                                                                                                                                                                                             concerning record-keeping.
                                                                                                                                                    project, which resulted in the          retention, vocational education,                                                The relevant regulation was
five graduates were recruited
                                                                                                                                                    Skills Shortages and Workforce          superannuation, learning and                                                    subsequently amended to reflect
through the program, filling
                                                                                                                                                    Planning National Activity              development and human capital                                                   the record-keeping requirements
positions at the City of Casey
                                                                                                                                                    Report. This was endorsed by the        measurement.
and Bass Coast Shire Council.                                                                                                                                                                                                                                               that operated prior to
                                                                                                                                                    ALGA Board and used to inform                                                                                           WorkChoices.
                                                                                                                                                    their work in this field.




34   WORKFORCE & PROFESSIONAL DEVELOPMENT MAV ANNUAL REPORT 2006/07                                                                                                                                                                       MAV ANNUAL REPORT 2006/07 WORKFORCE & PROFESSIONAL DEVELOPMENT     35
                                                                                                                                                                                               Local government continued achieving service
                                                                                                                                                                                               improvements while taking the lead in policy directions
                                                                                                                                                                                               at both ends of life’s spectrum.




MAV
GOVERNANCE


        GOVERNANCE STRUCTURE AT THE MAV                                 MAV INSURANCE COMMITTEE                                                                                 RULES REVIEW                                                       BOARD REGIONAL MEETINGS
MUNICIPAL ASSOCIATION ACT 1907                                          The Board of Management has delegated authority and                      As part of the process to review the MAV Rules 2004, the Board                     In addition to undertaking regional meetings as part of the
The Municipal Association Act 1907 defines the purpose of the MAV       responsibility for the operation of the MAV Insurance business (Civic    developed Rule change proposals, which were supported at the                       development process for the Strategic Work Plan, the Board has
- to promote the efficient carrying out of municipal government         Mutual Plus and the Municipal Officers’ Fidelity Guarantee Fund) to      October 2006 State Council, with the exception of a proposal for                   also committed to holding some Board meetings in regional
throughout the state of Victoria and watch over and protect the         the MAV Insurance Committee (MAVIC). MAVIC has oversight of the          all councils to receive equal voting entitlements and a related                    locations. The objective of this is to make the MAV more accessible
interests, rights and privileges of municipal corporations. It          operation of the insurance schemes and monitors the MAV’s                proposal to change the majority required for policy motions to                     to rural councils and provide an opportunity for councils to meet
establishes the MAV as a corporation with perpetual succession and      compliance with its Australian Financial Services Licence (AFSL).        succeed. Rule changes require 60% of all votes (support from                       directly with the Board to discuss issues. One regional meeting was
requires it to provide a public liability scheme for local government   It comprises nine members - four independent insurance experts,          48 councils) and the vote on the day was 47 in favour. The State                   held in the past year with Moyne Shire Council in November 2006.
and empowers it to provide fidelity insurance.                          one council CEO, one MAV board member, one representative of             Council requested a further report on the potential impacts of this
                                                                        the Local Government Association of Tasmania, and the President          proposal with the intention of revisiting the proposal again next year.                         BOARD ADVISORY COMMITTEES
STATE COUNCIL                                                           and CEO of the MAV. The committee oversees                                                                                                                  The Board has established a number of Advisory Committees to
The Act provides that each member council may appoint a                 the day-to-day operations of the MAV Insurance business with the                              BOARD OF MANAGEMENT                                           support and provide advice across a range of policy portfolios.
councillor as its representative, and these representatives so          assistance of the Contract Manager.                                      Cr Geoff Lake resigned as President of the MAV, effective from 25                  A Board member is appointed to Chair each of these Committees
appointed constitute the Association. The representatives come                                                                                   August 2006, to pursue his legal career. The membership elected                    and provide a conduit for feedback between the Committee and
together twice annually to form State Council which sets the policy     SCHEME MANAGER                                                           Board member Cr Dick Gross, from Port Phillip City Council, to                     the Board. Current Committees in place are:
direction of the Association and monitors its performance.              The Scheme Manager operates the liability insurance business
                                                                                                                                                 replace the outgoing President. Elections were then held for the                   · Human Services Portfolio Committee - Chair, Jenny Dale
The representatives of State Council elect the Board of Management      and provides services to the fidelity fund in accordance with the
                                                                                                                                                 whole Board when its term expired in February 2007. The incumbent                  · Strategic Environment Advisory Group - Chair, Darryl Argall
and President of the MAV, and set the Rules for the Association.        provisions of the Scheme Management Agreement.
                                                                                                                                                 President, Cr Dick Gross, was re-elected to the role for another two               · Planning Advisory Group - Chair, Bill McArthur
                                                                                                                                                 years. Seven Board members were returned unopposed:
MAV RULES 2007                                                                                 STATE COUNCIL                                                                                                                        · Economics and Finance Advisory Group - Chair, Rod Fyffe
The Act requires the MAV to set Rules for                               The State Council met twice in 2006/07. The AGM for 2005/06              · Cr Brenda Hampson, Moyne Shire Council (Rural South West region)                 · Strategic Transport and Infrastructure Group - Chair, Sam Alessi
· the management of the Association                                     was held in October 2006 and received a report from the President        · Cr Darryl Argall, Hindmarsh Shire Council (Rural North West region)              · Professional Development Reference Group - Chair, Bill McArthur
· the regulation of proceedings                                         on the activities and financial affairs of the Association, considered   · Cr Geoff Gough, Manningham City Council (Metropolitan East region)               · Future of Local Government Advisory Group - Chair, Darryl Argall
· fixing the annual subscription paid by each municipality                                                                                       · Cr Jenny Dale, Indigo Shire Council (Rural North East region)                    · Drought Taskforce - Chair, Darryl Argall
                                                                        reports on the MAV Rules Review, Managing Councillor Conduct
                                                                                                                                                 · Cr Joseph Cutri, Maribyrnong City Council (Metropolitan West region)
· fixing of contributions to the Municipal Officers’ Fidelity           and the Future of Local Government, and considered 70 motions                                                                                               For further detail on the role of each Advisory Committee, see p 44.
                                                                                                                                                 · Cr Mark Conroy, Frankston City Council (Metropolitan Southern region)
   Guarantee Fund                                                       from member Councils. In May 2007 the State Council met and              · Cr Rod Fyffe, Greater Bendigo City Council (Rural North Central region)
· other matters affecting the management of the Association.            approved the Strategic Work Plan for the MAV for 2007/08 and
The Rules require Governor-in-Council consent.                                                                                                   Representatives successful in contested elections included:
                                                                        considered a further 70 motions from member councils.
                                                                                                                                                 ·   Cr   Bill McArthur, Golden Plains Shire Council (Rural South Central region)
BOARD OF MANAGEMENT                                                            MAV STRATEGIC WORK PLAN 2007/08                                   ·   Cr   Jane Rowe, East Gippsland Shire Council (Rural Gippsland region)
Twelve Board members are elected to the Board of Management for a       The MAV commenced its annual Work Plan review in March 2007              ·   Cr   Joe Caputo, Moreland City Council (Metropolitan Central region)
two-year term. Each Board member is elected to represent a geographic   with a series of meetings for member councils in various rural and       ·   Cr   Luke Tobin, Boroondara City Council (Metropolitan South East region)
grouping of councils. The representatives in that grouping elect the    metropolitan locations. The feedback was used to inform and update       ·   Cr   Sam Alessi, Whittlesea City Council (Interface region)
regional Board member. The thirteenth member of the Board is the        the Strategic Work Plan 2007/08, which was approved in draft form        Former Metropolitan South East Representative, Cr John Chandler
President who is elected at large by the representatives of each        by the MAV Board and circulated to all councils for review in April.     from Stonnington City Council did not contest the election; and
member council. The Rules prescribe the functions of the Board which    The draft Work Plan was then discussed and approved at the May           former Rural Gippsland Representative, Cr Jeff Amos from
include ensuring the directions set by State Council are met, setting   State Council. The Board is responsible for overseeing delivery of the   Wellington Shire Council was replaced by Cr Jane Rowe from
the budget and employing and managing the performance of the            actions identified in that plan, and for determining, when required,     East Gippsland Shire Council. The current term of office expires
chief executive officer.                                                how those actions may be implemented. The MAV Annual Report for          in February 2009.
DEED OF ESTABLISHMENT                                                   2007/08 will provide a summary of achievements against the
The Deed of Establishment sets out how the insurance scheme is to       objectives and actions in that plan.
operate as a mutual liability fund. It includes rules as to eligibility
and obligations of the participants. It requires the formation of a
management committee, and formalises authorities, duties and
powers of delegation by the committee and provides guidance as to
the day-to-day operation of the insurance business.

36   MAV GOVERNANCE MAV ANNUAL REPORT 2006/07                                                                                                                                                                                                                       MAV ANNUAL REPORT 2006/07 MAV GOVERNANCE   37
                 BOARD MEETING ATTENDANCE                                                                                                        INSURANCE STRATEGIC OVERVIEW                                        MAV INSURANCE COMMITTEE SITTING FEES                                 Cardinia Shire Council                  Cr   Kate Lempriere
                                                                                                                                                                                                                                                                                          Casey City Council                      Cr   Mick Morland
                  July Aug Sept Oct Nov Dec Feb Mar April May June                                                                     MAV Insurance has established a strategic framework within which         The MAV makes provision for independent committee members to
                                                                                                                                                                                                                                                                                          Central Goldfields Shire Council        Cr   Brian O’Connor
Sam Alessi         ✔          ✔            ✔          ✔           ✔           ✔           ✔           ✔       ✔ ✔              ✔       Civic Mutual Plus and the Municipal Officers’ Fidelity Guarantee         receive a sitting fee for each meeting attended. In 2006/07 the
                                                                                                                                                                                                                                                                                          Colac Otway Shire Council               Cr   Warren Riches
Jeff Amos         ✔           ✔           ✔           ✔           ✔           ✔       ✔               -       -        -       -       Fund operate. This strategic framework, along with all related           sitting fee was:                                                          Corangamite Shire Council               Cr   Ruth Gstrein
Darryl Argall      ✔          ✔            ✔          ✔           ✔           ✔           ✔           ✔       ✔ ✔              ✔
                                                                                                                                       documentation and policy matters, is reviewed at least annually.         · Chair: $750                                                             Darebin City Council                    Cr   Marlene Kairouz
                                                                                                                                       The documentation making up the strategic framework includes:            · Independent Committee members: $500                                     East Gippsland Shire Council            Cr   Jane Rowe
Joe Caputo            -           -           -       ✔           ✔           ✔           ✔           ✔       ✔ ✔               ✔
                                                                                                                                       · MAV Insurance strategic plan                                           In addition, an allowance of $1,030 was paid to the independent           Frankston City Council                  Cr   Mark Conroy
John Chandler ✔               ✘            ✔          ✔           ✔           ✔           ✔               -       -        -       -
                                                                                                                                       · Reinsurance management strategy                                        committee members for attendance at other insurance-related               Gannawarra Shire Council                Cr   Keith den Houting
Mark Conroy        ✘          ✔            ✔          ✔           ✘           ✔           ✔           ✔       ✔ ✔              ✔
                                                                                                                                       · Business and operational plan                                          meetings, such as the Claims and Technical Committee.
                                                                                                                                                                                                                                                                                          Glen Eira City Council                  Cr   David Feldman
Joseph Cutri       ✘          ✔            ✘          ✔           ✔           ✔           ✘           ✔       ✘ ✔              ✔
                                                                                                                                       · Scheme management agreement                                                                                                                      Glenelg Shire Council                   Cr   Frank Zeigler
Jenny Dale        ✔           ✘           ✔           ✔           ✔           ✔           ✔       ✔           ✔ ✔              ✘       · Operational policies.                                                                                                                            Golden Plains Shire Council             Cr   Bill McArthur
                                                                                                                                                                                                                     MAV INSURANCE COMMITTEE ATTENDANCE                                   Greater Bendigo City Council            Cr   Rod Fyffe
Rod Fyffe          ✔          ✔            ✔          ✔           ✘           ✔           ✘           ✔       ✔ ✔              ✔
                                                                                                                                                                                                                                       Aug Oct Dec Feb April June                         Greater Dandenong City Council          Cr   Youhorn Chea
Geoff Gough ✘                 ✔           ✔           ✔           ✔           ✘       ✔           ✔           ✔ ✔              ✔                           RISK MANAGEMENT                                      Ron Farrell            ✘     ✔    ✔     ✔    ✔     ✘                      Greater Geelong City Council            Cr   Jan Farrell
Dick Gross        ✔           ✔           ✔           ✔           ✔       ✔           ✔           ✔           ✔ ✔              ✔       To effectively manage risk exposures at the MAV, the Management                                                                                    Greater Shepparton City Council         Cr   Bruce Wilson
                                                                                                                                       Board, with the approval of State Council, has put in place a            Rod Fyffe              ✔     ✘    ✔    ✘     ✘    ✔
Brenda Hampson✔ ✔ ✔ ✘ ✔ ✔ ✔                                                                               ✔       ✔            ✘ ✔                                                                                                                                                        Hepburn Shire Council                   Cr   Bill McClenaghan
Geoff Lake  ✔ ✔  -  - - - -                                                                               -       -        -       -   structure to ensure sufficient oversight of the activities of both the   Allan Garcia          ✔      ✔    ✔    ✔     ✔    ✔                       Hindmarsh Shire Council                 Cr   Darryl Argall
                                                                                                                                       Association and the two insurance schemes operated by the MAV:           Dick Gross             ✘     ✔    ✘    ✔     ✘     ✔                      Hobsons Bay City Council                Cr   Bill Baarini
Bill McArthur      ✔          ✔            ✔          ✔           ✔           ✔           ✔           ✔       ✔ ✔ ✔
                                                                                                                                       Civic Mutual Plus and the Municipal Officers’ Fidelity Guarantee         Michael Kennedy                                                           Horsham Rural City Council              Cr   Roslyn MacInnes
Jane Rowe           -             -           -           -           -           -           -       ✔        ✔ ✔ ✔                                                                                                                    ✔     ✔    ✔     ✔    ✔     ✔
                                                                                                                                       Fund. This structure includes:                                                                                                                     Hume City Council                       Cr   Adem Atmaca
Luke Tobin                -           -           -           -           -           -           -       ✔       ✔            ✘ ✔                                                                              Anne Murphy            ✔     ✘    ✔     ✔    ✔     ✔                      Indigo Shire Council                    Cr   Jenny Dale
                                                                                                                                       AUDIT COMMITTEE
                                                                                                                                                                                                                Adrian Nye            ✔      ✔    ✔    ✔     ✔    ✔                       Kingston City Council                   Cr   Justin McKeegan
                              BOARD ALLOWANCES                                                                                         The Audit Committee is an independent committee established at                                                                                     Knox City Council                       Cr   Jim Penna
                                                                                                                                       the direction of the MAV Board of Management in 2004. The                Rob Spence             ✔     ✘    ✔     ✔     ✔    ✔
The Board Allowance and Expense Policy makes provision for Board                                                                                                                                                                                                                          Latrobe City Council                    Cr   Bruce Lougheed
members to receive an annual allowance paid quarterly in advance, and to                                                               Committee comprises three independent members; Hugh Parkes               John Warburton          ✔     ✔    ✔     ✔    ✔     ✔                     Loddon Shire Council                    Cr   Allen Brownbill
claim out-of-pocket expenses for travel, parking, accommodation and meals                                                              FCA CISA (Chair), Dean Newlan CPA and Elizabeth Reeves CPA;                                                                                        Macedon Ranges Shire Council            Cr   Noel Harvey
when undertaking duties as a Board member. Board allowance amounts are                                                                 two Board members, Cr Geoff Gough and Cr Jane Rowe                                                        COMPLIANCE                               Manningham City Council                 Cr   Geoffrey Gough
adjusted by CPI each July.                                                                                                             (appointed April 2007); and the MAV President, Cr Dick Gross. The        In addition to the requirements of the Municipal Association Act 1907     Mansfield Shire Council                 Cr   Sandie Jeffcoat
In 2006/07 the annual allowance amounts were as follows:                                                                               primary objective of the Committee is to assist MAV Management in        and MAV Rules 2007, the MAV must comply with regulations and              Maribyrnong City Council                Cr   Joe Cutri
· President $50,923                                                                                                                    maintaining good governance, compliant financial reporting,              obligations applicable to statutory and public bodies including the       Maroondah City Council                  Cr   Jo-anne Taylor
· Deputy President $10,496                                                                                                                                                                                      Information Privacy Act 2000, Whistleblowers Protection Act 2001 and      Melbourne City Council                  Cr   Brian Shanahan
                                                                                                                                       management of risk, maintaining a reliable system of internal
                                                                                                                                                                                                                                                                                          Melton Shire Council                    Cr   Chris Papas
· Board member $7,147                                                                                                                  controls and monitoring organisational performance. The                  Freedom of Information Act 1982. The MAV has established policies
                                                                                                                                                                                                                                                                                          Mildura Rural City Council              Cr   John Arnold
                                          Annual                          Travel and                           TOTAL                   Committee meets quarterly and additional meetings are convened           and procedures to meet legislative requirements and staff are advised
                                                                                                                                                                                                                                                                                          Mitchell Shire Council                  Cr   Bill Melbourne
                                          Allowance                        Accommodation                                               as required. The Audit Committee met on 6 occasions during               of these policies at induction. Copies are publicly available on the      Moira Shire Council                     Cr   Frank Malcolm
                                                                              claims
                                                                                                                                       2006/07. Minutes of all Audit Committee meetings are provided to         MAV website. No privacy complaints or Freedom of Information              Monash City Council                     Cr   Tom Morrissey
Sam Alessi                            7,705.34                                    1,336.90                             9,042.24
                                                                                                                                       the MAV Management Board and MAV Insurance Committee and                 applications were made to the MAV in 2006/07.                             Moonee Valley City Council              Cr   Jan Chantry
Jeff Amos                             5,360.25                                    4,182.61                            9,542.86
                                                                                                                                       MAV Insurance Committee minutes are provided to the Audit                The MAV is also required to comply with the provisions of its             Moorabool Shire Council                 Cr   Thomas Sullivan
Darryl Argall                         7,705.34                                16,177.92                               23,883.26        Committee. During 2006/07 the MAV Audit Committee reviewed                                                                                         Moreland City Council                   Cr   Joseph Caputo
                                                                                                                                                                                                                Australian Financial Services Licence (AFSL). The MAV has
Joe Caputo                            5,539.09                                        330.00                           5,869.09        and recommended to the MAV Management Board the adoption of                                                                                        Mornington Peninsula Shire Council      Cr   Bill Goodrem
                                                                                                                                                                                                                established a significant compliance and governance structure to
John Chandler                         5,360.25                                         522.60                          5,882.85        the annual financial statements. The Committee provided oversight        ensure it meets its obligations under the AFSL. This structure includes
                                                                                                                                                                                                                                                                                          Mount Alexander Shire Council           Cr   Philip Schier
                                                                                                                                       to the internal audit risk assessment report, the internal audit plan                                                                              Moyne Shire Council                     Cr   Brenda Hampson
Mark Conroy                           7,147.17                                                        -               7,147.17                                                                                  a compliance and risk management strategy; compliance and risk            Murrindindi Shire Council               Cr   Bob Flowers
Joseph Cutri                          7,147.17                                            363.00                       7,510.17        and approved the 2007 external audit plan. The Committee                 management plan; compliance and risk analysis table; and disaster         Nillumbik Shire Council                 Cr   Warwick Leeson
                                                                                                                                       received reports from MAV Executive on the policy and risk of MAV        recovery and business continuity plan. An electronic risk
Jenny Dale                            9,659.67                                    3,081.88                            12,741.55                                                                                                                                                           Northern Grampians Shire Council        Cr   Robyn Smith
                                                                                                                                       events, monthly financial statements, quarterly investment reports,      management and compliance system operates within MAV Insurance
Rod Fyffe                             7,147.17                                    5,831.86                            12,979.03                                                                                                                                                           Port Phillip City Council               Cr   Dick Gross
                                                                                                                                       development of the SWIFT project (shared library software), sector
Geoff Gough                           7,147.17                                    1,216.07                            8,363.24                                                                                  to ensure compliance with its AFSL obligations. Compliance with this      Pyrenees Shire Council                  Cr   Gabriel Horvat
                                                                                                                                       development programs and the activities undertaken from the
Dick Gross                    44,344.94                                           3,318.12                        47,663.06
                                                                                                                                                                                                                system is audited by the MAV’s independent internal auditor and           Queenscliffe Borough Council            Cr   Pat Semmens
                                                                                                                                       Knowledge Engineering project.                                                                                                                     South Gippsland Shire Council           Cr   David Lewis
                                                                                                                                                                                                                findings are reported to both the MAV Insurance Committee and the
Brenda Hampson                            7,147.17                                    2,314.49                         9,461.66                                                                                                                                                           Southern Grampians Shire Council        Cr   Mick Leeming
                                                                                                                                       CONTRACT MANAGER                                                         MAV Board of Management.
Geoff Lake                            7,665.85                                    2,051.16                            9,717.01                                                                                                                                                            Stonnington City Council                Cr   Claude Ullin
                                                                                                                                       The Contract Manager has a key responsibility to facilitate the flow                                                                               Strathbogie Shire Council               Cr   Gregory Carlson
Bill McArthur                         7,147.17                                    2,467.21                             9,614.38
                                                                                                                                       of information from MAVIC to the MAV Board. The Contract                                         MAV REPRESENTATIVES                               Surf Coast Shire Council                Cr   Beth Davidson
Jane Rowe                                 2,488.85                                 1,748.78                            4,237.63        Manager also ensures the Scheme Manager performs its duties in           COUNCIL                           REPRESENTATIVE                          Swan Hill Rural City Council            Cr   Gary Norton
Luke Tobin                                2,488.85                                                        -            2,488.85        accordance with the requirements of the Scheme Management                                                                                          Towong Shire Council                    Cr   Peter Joyce
                                                                                                                                                                                                                Alpine Shire Council                   Cr Daryl Pearce
The above amounts do not correlate to the allowance and expense payments figures in                                                    Agreement and monitors compliance with Australian Financial              Ararat Rural City Council              Cr Ian Wilson                      Wangaratta Rural City Council           Cr   Don Joyce
the financial statements as they include some payments made to Board members for                                                       Services Licence requirements, risk management strategies and risk       Ballarat City Council                      Cr David Vendy                 Warrnambool City Council                Cr   David Atkinson
expenses incurred in 2005/06 and claimed in 2006/07. Some expenses are also                                                                                                                                                                                                               Wellington Shire Council                Cr   Jeff Amos
charged to other areas in the MAV accounts.                                                                                            management plans.                                                        Banyule City Council                       Cr Jenny Mulholland
                                                                                                                                                                                                                Bass Coast Shire Council                   Cr Neville Goodwin             West Wimmera Shire Council              Cr   Darren Rayner
Payments were made direct to Board members, to their council for travel where they                                                                                                                                                                                                        Whitehorse City Council                 Cr   Sharon Ellis
have utilised a council fleet vehicle, or directly to the hotel for some accommodation                                                 SYSTEMS DEVELOPMENT                                                      Baw Baw Shire Council                      Cr David Balfour
expenses. It should be noted that some Board members may lodge claims after 30 June                                                    An electronic risk management system operates within MAV                 Bayside City Council                       Cr James Long                  Whittlesea City Council                 Cr   Sam Alessi
2007 for expenses incurred in the 2006/07 year, details of which will be reflected in                                                  Insurance. During the year, this system was extended to monitor          Benalla Rural City Council                 Cr Pat Claridge                Wodonga City Council                    Cr   Rodney Wangman
the 2007/08 Annual Report.                                                                                                                                                                                      Boroondara City Council                    Cr Luke Tobin                  Wyndham City Council                    Cr   Leigh Barrett
                                                                                                                                       requirements and milestones set out in the grant service
As President until 25 August 2006, Geoff Lake was also provided with full private use                                                                                                                           Brimbank City Council                      Cr Anthony Abate               Yarra City Council                      Cr   Gurm Sekhon
of a motor vehicle at cost of $1,683.21 and mobile phone $1,278.46. As President                                                       agreements. The implementation of this program continues the
                                                                                                                                                                                                                Buloke Shire Council                       Cr Harold Flett                Yarra Ranges Shire Council              Cr   Kenneth Smith
from 25 August 2006, Dick Gross was also provided with full private use of a motor                                                     establishment of a risk management process and is part of the
                                                                                                                                                                                                                Campaspe Shire Council                     Cr John Elborough              Yarriambiack Shire Council              Cr   Geoffrey Lovel
vehicle at cost of $12,823.76 and mobile phone $2,079.10.                                                                              overall aim to build a strong risk management culture across MAV.
38   MAV GOVERNANCE MAV ANNUAL REPORT 2006/07                                                                                                                                                                                                                                                                              MAV ANNUAL REPORT 2006/07 MAV GOVERNANCE   39
                                                                                                                                                                                              Local government continued achieving service
                                                                                                                                                                                              improvements while taking the lead in policy directions
                                                                                                                                                                                              at both ends of life’s spectrum.




MAV
OPERATIONS


                        CORPORATE RENEWAL                                                    STAFF DEVELOPMENT                                                     KNOWLEDGE MANAGEMENT                                                         MEDIA, MARKETING
During 2006/07, the MAV continued to focus on corporate renewal           The MAV implemented a performance review and skills                                       & INFORMATION SYSTEMS                                                      & COMMUNICATIONS
to ensure organisational policies and procedures support a                development program during the year and staff have performance          The MAV continued to implement its Information and                     The MAV continued to place a strong emphasis on fostering media
dynamic, innovative and practical approach to meet corporate              and development plans in place. Regular meetings for all staff, as      Communications Technology Strategy - now called the Knowledge          relationships in order to play an educative and informative role in
responsibilities. Key activities included the redevelopment of the        well as issue-specific meetings have supported knowledge                Management and Information Systems Strategy - which aims to            assisting journalists to understand the broad range of responsibilities
MAV offices to encourage project collaboration and communication          development and information sharing within the organisation. The        ensure the MAV has information technology systems that provide         and issues facing local government. A series of meet and greet
and a review of corporate policies relating to human resource             new intranet, called MAVIS, also increased the capacity of staff to     reliable and secure support to its activities.                         sessions with the MAV CEO, President and Communications staff was
management, finance, telecommunications and information                   share information and collaborate on projects. In addition,             The MAV is in the process of building the foundations to support       undertaken with key journalists who report on local government
technology. A revamp of the MAV information technology network            $19,284 was spent on staff development during the year, reflecting      knowledge management and engagement with members with                  matters from major daily, regional and suburban newspapers.
improved security and data quality, while an upgrade of the               the MAV’s ongoing commitment to staff development and training.         strategies including:                                                  Through the work of the MAV, a substantial increase in media
accounting system added greater capability to financial operations.                                                                                                                                                      coverage was achieved on a variety of matters relating to council
                                                                                                                                                  1.The Intranet and Document Management System Project. The new
                                                                                               MEMBER SUPPORT                                                                                                            cost pressures, financial sustainability, rate increases and councillor
                                                                                                                                                     system, named ‘MAVIS’ by MAV staff, was launched in June 2007
                          HUMAN RESOURCES                                 The MAV provides significant support to members through its                                                                                    conduct. Strong leadership by the MAV on council governance and
The MAV is committed to building a team that is responsive to its         delivery of key projects, policy work and by strategically supporting      and ensures that:
                                                                                                                                                     - documents can be tracked and managed to meet business             expenditure also received widespread coverage in statewide print
members, can provide a co-ordinated approach to emerging issues           the future of local government. Other ways in which the MAV has                                                                                and electronic media. In particular, feature stories in the Australian
and is at the forefront of local government policy thinking. In           boosted its capacity to support members are:                                  requirements and legislative requirements such as the Freedom
                                                                                                                                                        of Information Act 1982.                                         Financial Review Personal Investor insert in the Sunday Age; Domain
2006/07, the MAV consolidated its organisational structure and            · recruiting key experts such as Michael Henry and Andrew Rowe to                                                                              in the Saturday Age property section and a cover story in the
staffing and continued to strengthen its management and staff skill                                                                                  - contacts with Association members and key groups are
                                                                             support the development of economic policy and research, advise            managed effectively                                              Melbourne Times provided strong explanations of how council rates
base. The staffing profile of the MAV includes:                              councillors on key issues and deliver activities to support                                                                                 are calculated and the funding shortfalls experienced by the sector.
                                                                                                                                                     - corporate knowledge capture and sharing is encouraged
· staff funded from membership subscriptions whose focus is on               councillor development                                                     and supported                                                    A range of initiatives were implemented during the year to improve
   delivering the MAV Strategic Work Plan ratified by State Council.      · providing a professionally managed venue for key meetings and            - business continuity is maintained                                 the MAV’s communications with members including a website
   These staff provide policy support, advice to councils, capacity-         events with over 900 events for around 6,000 attendees hosted in        - key documents can be developed collaboratively and tracked        redesign project and launch of five new policy e-Bulletins to
   building programs, and support the representation of Victorian            the 2006/2007 year at the MAV offices                                      through the development process.                                 complement existing MAV publications. The refreshed website was
   local government views to State and Commonwealth Government            · ensuring that the culture of the MAV remains responsive to and                                                                               launched after all content was audited and updated, with other
                                                                                                                                                  2.Upgrading of the MAV website in January improved the MAV’s
   and other key groups                                                      focused on its members through staff involvement in activities                                                                              features including stronger branding, a more intuitive structure and
· staff funded from State and Commonwealth grants to deliver                 such as the State Council meetings and the Councillor                   online presence to more effectively promote the organisation’s
                                                                                                                                                     role in championing local government. The site has enabled a        easier navigation. New features for members included an online
   specific projects and programs and support to Victorian councils          Development Weekend.                                                                                                                        subscription tool for all major MAV publications, a new resource
   in these areas                                                                                                                                    stronger focus on accessibility and information sharing with
                                                                                                                                                     members and other stakeholders.                                     centre, improved search capabilities, more detailed information
· specialist consultants who supplement the skills of staff and                                                                                                                                                          about local government in Victoria, and improvements to policy
   provide support in areas such as insurance, financial                                                                                          3.Disaster Recovery processes were implemented to ensure the MAV       area structures and accessibility to information.
   management, and business development.                                                                                                             could continue to operate if there was a major impact on the
                                                                                                                                                                                                                         The MAV also developed a Visual Style Guide to ensure all
During the year, eight staff left the organisation - three grant-funded                                                                              office or IT system.
                                                                                                                                                                                                                         publications and outgoing material have a consistent style and
positions and five MAV employees. These positions were filled                                                                                     4.Significant work was undertaken to improve the MAV network and       tenor. This resource provides the standard framework for planning
through recruitment or reorganisation.                                                                                                               this provided more effective security management, faster delivery   and designing communication material.
                                                                                                                                                     of software changes and a better ability to track issues.
                                                                                                                                                                                                                         At the request of State Council, a reference group of council
                                                                                                                                                  5.Planning has begun for rebuilding the MAV website to improve         communications professionals was formed to advise the MAV on the
                                                                                                                                                     event registration and management, including online payments for    development of a marketing and communications campaign to
                                                                                                                                                     the more than 60 events run by the MAV each year. The site will     improve access to council services, increase engagement in local
                                                                                                                                                     change to a .net environment from a Lotus Notes environment         decision-making processes and attract a high quality skilled
                                                                                                                                                     which will improve the MAV’s ability to quickly load information    workforce. A discussion paper proposed a number of new actions the
                                                                                                                                                     onto the website for members. The plan will also incorporate        MAV could undertake to complement its existing programs and deliver
                                                                                                                                                     establishment of a members-only section in mid 2008.                a statewide campaign to reposition local government in Victoria.




40   MAV OPERATIONS MAV ANNUAL REPORT 2006/07                                                                                                                                                                                                               MAV ANNUAL REPORT 2006/07 MAV OPERATIONS   41
THE                                                                                                                                                                                                                                                                 1
                                                                                                                                                                                                                                                                          2
                                                                                                                                                                                                                                                                                3




MAV
                                                                                                                                                                                                                                                                                     4
                                                                                                                                                                                                                                                                                                                       5
                                                                                                                                                                                                                                                                                                                                6




TEAM
                                                                                                                                                                                                                                                                     7
                                                                                                                                                                                                                                                                          8
                                                                                                                                                                                                                                                                                9
                                                                                                     MAV BOARD
                                                                                                                                                                                                                                                                                    10
                                                                                                                                                                                                                                                                                                             11
                                                                                                                                                                                                                                                                                                                               12
                                                            Gavin Mahoney         Chris Jones        Rob Spence        Trevor Koops                John Hennessy
                                                            Senior Project        Executive          Chief             Senior Economist            Sector
                                                            Officer               Assistant          Executive                                     Development
                                                                                  to the CEO         Officer                                       Consultant
                                                                             23                 21                42                                                   17

       Michael Henry               Alison Lyon                                                                         Paula Giles
       Economic Policy             Legal and                                                                           Policy, Programs
       and Research                Corporate                                                                           and Commercial
       Unit Convenor               Director                                                                            Director
                              40                      31                                                                                      28

       Owen                        Amanda Martin            Allan Holmes          Andrew Rowe                          Rosemary                    Nina Rogers              Clare                    Liz Johnstone          Jeff Burns           Geoff Pawsey       13
                                                                                                                                                                                                                                                                         14
       Harvey-Beavis               Corporate                Finance and           Councillor                           Hancock                     Environment              Hargreaves               Senior                 Professional         Workforce                     15
       Policy Adviser              Services                 Insurance             Development                          Policy Adviser              Policy                   Social Policy            Planning               Development          Services                           16
                                   Manager                  Consultant            Consultant                                                       Manager                  Manager                  Adviser                Manager              Consultant                                                  17
                                                                                                                                                                                                                                                                                                                               18
                         15                                                  33                  4                                            37                       36                                                                   18                  5

       Taegen                      Debbie Smith                                                                        Eleanor Williams Pablo Brait                                                                         Jodie Delaney
       Edwards                     Senior                                                                              Policy Adviser              Policy Adviser                                                           Events
       Policy Adviser              Communications                                                                                                                                                                           Coordinator
                                   Adviser
                         1                            34                                                                                      13                       16                                                                   24

       Michelle                    Imogen Kelly                                                                        Ann Tok
       Osborne                     Communications                                                                      Events Coordinator
       Policy Adviser              Adviser

                                                      27                                                                                       3                                                                                                                    19
                                                                                                                                                                                                                                                                         20
                                   Lauren Burns                                                                                                                                                                                                                                21
                                   Design and                                                                                                                                                                                                                                       22
                                                                                                                                                                                                                                                                                                             23
                                   Development                                                                                                                                                                                                                                                                                 24
                                   Coordinator                                                                         GRANT-FUNDED
                                                      10

                                   Rod Mummery                                                                         Sarah Fagan                 Alison Standish          Liz Harvey               Lisel Thomas
                                   IT Coordinator                                                                      Maternal & Child   ECO-Buy                           Positive                 Melbourne 2030
                                                                                                                       Health Workforce Program                             Ageing                   Liaison Project
                                                                                                                       Recruitment &                                        Project
                                                       8                                                               Retention Project 25                            39                        6                     19

                                   Simon Morgan                                                                        Norm Free                   Tania Struzina           Eugenia
                                   Finance and                                                                         Emergency                   ECO-Buy                  Grammatikakis
                                   Insurance Officer                                                                   Management                  Program                  Multicultural                                                                           25
                                                                                                                       Project                                              Project                                                                                      26
                                                       14                                                                                     20                        2
                                                                                                                                                                                                                                                                               27
                                                                                                                                                                                                                                                                                    28
                                   May Yin                                                                             Liz Hogan                   Iona                     Nicola Wood                                                                                                                           29
                                   Posarnig                                                                            Local & Regional            Theodoridis              Disability                                                                                                                                         30
                                   Accounts Officer                                                                    Resource                    ECO-Buy                  Access and
                                                                                                                       Networks                    Program                  Inclusion Project
                                                       35                                                              Project                                         22                       30

                                   John Ryan                                                                                                       Alison Raymond Katherine
                                   Corporate                                                                                                       ECO-Buy            Wositzky
                                   Administrative                                                                                                  Program                  Culturally Equitable
                                   Officer                                                                                                                                  Gateways Project
                                                      29                                                                                                               26                       38

                                   Julie Jackson                                                                                                   Luke Murphy              Sally Everitt
                                   Corporate                                                                                                       Natural Resource         Early Years                                                                             31
                                                                                                                                                                                                                                                                         32a
                                   Administrative                                                                                                  Management               Project
                                                                                                                                                                                                                                                                               33
                                   Officer                                                                                                         Project                                                                                                                          34
                                                       9                                                                                                                1                       41                                                                                                                35
                                                                                                                                                                                                                                                                                                                               36
                                                                                                                                                   Ben Morris               Derryn Wilson
                                                                                                                                                                                                                                                                                    40
                                                                                                                                                   Waste                    HACC                                                                                                                                       41
                                                                                                                                                   Management               Project                                                                                                                                             42
                                                                                                                                                   Project
                                                                                                                                                                       32                        7

                                                            Contractor            Part time                                                        Simone Stuckey           Deb Warren
                                                                                                                                                   Assoc. of Bayside        HACC
                                                                                                                                                   Municipalities &         Project
                                                                                                                                                   Timber Towns
                                                                                                                                                   Victoria            12
                                                                                                                                                                                                                                                                    37

42   THE MAV TEAM MAV ANNUAL REPORT 2006/07
                                                                                                                                                                                                                                                                         38
                                                                                                                                                                                                                                                                               39        MAV ANNUAL REPORT 2006/07 THE MAV TEAM      43
                                                                                                                                                                                                                                                                                                                           1
                                                                                                                                                         MAV RURAL PLANNING PROJECT STEERING COMMITTEE                                        Metropolitan Fire and Emergency Services Board
                                                                                                                                                         Provides advice on strategic land use and statutory planning issues                  Metropolitan Transport Forum
                                                                                                                                                                                                                                              Ministerial Advisory Committee for Victorian Communities
                                                                                                                                                         impacting on councils with rural land.
                                                                                                                                                                                                                                              Ministerial Advisory Council on Public Libraries


COMMITTEES                                                                                                                                               MAV MELBOURNE 2030 LOCAL GOVERNMENT REFERENCE GROUP
                                                                                                                                                         Advises the MAV on matters relating to the implementation of the
                                                                                                                                                         Melbourne 2030 policy framework.
                                                                                                                                                                                                                                              Ministerial Planning Roundtable
                                                                                                                                                                                                                                              Ministerial Utilities Infrastructure Reference Panel
                                                                                                                                                                                                                                              Ministers Statement on Local Planning Policy Working Group
                                                                                                                                                                                                                                              Model Split Contracts Advisory Group
                                                                                                                                                                                                                                              Municipal Emergency Management Enhancement Group
                                                                                                                                                         MAV SWIFT CONSORTIUM MANAGEMENT GROUP
                                                                                                                                                                                                                                              Municipal Emergency Management Plan Audit Committee
                                                                                                                                                         Manages the ongoing implementation of shared library services                        National ECO-Buy Alliance
                                                                                                                                                         contracts and policies.                                                              National Electronic Development Assessment Program Committee
                                                                                                                                                                                                                                              National Packaging Covenant Council
                                                                                                                                                                                 EXTERNAL COMMITTEES                                          National Parks Advisory Council
                                                                                                                                                         As the peak body for local government, the MAV is regularly invited                  Native Vegetation Exemptions Review Advisory Group
                                                                                                                                                         by the Victorian and Federal Governments and various agencies to                     North Central Local Government Environment Network
                                                                                                                                                                                                                                              North East Environment Network
                                                                                                                                                         represent the sector on a range of committees. In 2006/07, these                     Northern Biodiversity Network
                                                                                                                                                         committees included:                                                                 Port Phillip and Westernport Flood and Drainage Strategy Steering Committee
          MAV BOARD ADVISORY COMMITTEES                                                OTHER MAV COMMITTEES                                              Accessible Built Environment Working Group                                           Public Land Stewardship Reference Group
The MAV has convened a number of key Advisory Committees to The MAV has also established and supported several other                                     Alpine Advisory Committee                                                            Public Sector Management Program
                                                                                                                                                                                                                                              Public Transport Access Committee
assist the Board and organisation in strategic policy development. Committees across major policy areas and projects, including:                         Alternative Urban Water Supplies Review Working Group
                                                                                                                                                         Animal Welfare Advisory Committee                                                    Reconciling Native Vegetation Management and Bushfire Safety State Advisory Group
These committees are                                                                                                                                                                                                                          Regional Greenhouse Alliance and Stakeholders Network
                                                                            MAV/SUSTAINABILITY VICTORIA/DSE ECO-BUY STEERING COMMITTEE                   Association of Bayside Municipalities
                                                                                                                                                         Association of Regional Waste Management Groups                                      Ride to School Steering Committee
MAV ECONOMICS AND FINANCE ADVISORY GROUP                                    Provides direction for ECO-Buy program.                                                                                                                           Road Safety Reference Group
                                                                                                                                                         Australian Drug Information Clearinghouse Advisory Partners Group
Provides advice to the MAV Board and support to achieve objectives         MAV INFORMATION TECHNOLOGY & TELECOMMUNCIATIONS                               Australian Environmental Labelling Association Advisory Committee                    Road Safety Conference Committee
                                                                                                                                                                                                                                              Road Transport Advisory Committee
relating to financial sustainability for local government, including the COMMITTEE                                                                       Broiler Code Committee
                                                                                                                                                         Building Regulation Advisory Committee                                               Roundtable on Inclusive Arts, Tourism, Sport and Recreation for People with a Disability
development of campaigns, submissions and analysis of issues.      Plans, co-ordinates and supports IT&T initiatives that deliver better                                                                                                      Rural Workforce Agency Victoria
                                                                                                                                                         Bus Service Review Reference Group
                                                                           council services and reduce costs.                                                                                                                                 Saferoads Partnership
MAV HUMAN SERVICES PORTFOLIO COMMITTEE                                                                                                                   Business Skills Victoria Board
                                                                                                                                                         Catchment Management Authority Local Government Coordinators Network                 South West (Corangamite) Environment Network
Provides advice to the MAV Board on social policy and human              MAV PERIN REFERENCE GROUP                                                                                                                                            Sports Drought Taskforce
                                                                                                                                                         Central Region Sustainable Water Strategy Consultative Committee
services issues, particularly on intergovernmental relations. The Provides advice to the MAV on issues with the infringement system                      Clearwater Steering Committee                                                        Standing Committee on Local Government & Cultural Diversity
committee also facilitates consultation with regional groupings of and the enforcement of outstanding infringement notices.                              Commonwealth Aged Care Advisory Committee                                            State Emergency Mitigation Committee
councils on current statewide issues.                                                                                                                    Commonwealth Children’s Services Planning Advisory Committee                         State Emergency Recovery Planning Committee
                                                                            MAV/VICROADS LIAISON GROUP                                                   Community Safety Month Reference Group                                               State Emergency Relief Sub-committee
MAV PLANNING ADVISORY GROUP                                           Facilitates regular consultation between the MAV and VicRoads at                   Community Services and Health Industry Training Board                                State Flood Policy Committee
Provides advice to the MAV Board on strategic and statutory                         executive level.                                                     Country Fire Authority Board                                                         State Library Advisory Committee on Public Libraries
planning issues affecting local government and guides MAV policy                                                                                         Country Town Water Supply and Sewerage Project Steering Committee                    State Stormwater Strategy Steering Committee
                                                                                     MAV VICTORIAN LOCAL SUSTAINABILITY NETWORK                          Customer Consultative Committee, Essential Service Commission                        Streamlining the Planning Process Review Committee
and position development on planning related issues.                                                                                                                                                                                          Streamlining the Planning Process Roundtable
                                                                                     Brings together councils and stakeholders actively pursuing local   DE&T/MAV Joint Working Party
                                                                                                                                                         Development Assessment Forum                                                         Timber Towns Victoria
MAV PROFESSIONAL DEVELOPMENT REFERENCE GROUP                                  sustainability approaches such as Local Agenda/Action 21.
                                                                                                                                                         DHS Early Years Advisory Group                                                       Urban Stormwater & Water Conservation Fund Steering Committee
Provides input to the MAV’s professional development program for                                                                                                                                                                              VicRoads Board (Roads Corporation Advisory Board)
                                                                                     MAV LOCAL GOVERNMENT INDIGENOUS NETWORK                             DHS HACC Department Advisory Committee
councillors, identifies ongoing areas of need within the sector to be                                                                                    DHS Human Services Partnership Implementation Committee                              VicRoads Road Management Act Review Committee
                                                                                     Brings councils together to share ideas and information for
addressed, and encourages participation of colleagues in the MAV                                                                                         DHS Influenza Pandemic Planning Steering Committee                                   Victorian Catchment Management Stakeholders Forum
                                                                                     improving relations with Victoria’s Indigenous communities.         DPI Drought Reference Group                                                          Victorian Childcare Industry Liaison Group
professional development program.
                                                                                                                                                         DOI Maintaining Mobility Steering Group                                              Victorian Children’s Council
                                                                            MAV WATER TASKFORCE
MAV STRATEGIC ENVIRONMENT ADVISORY GROUP                                                                                                                 Domestic Animal Management Implementation Committee                                  Victorian Community Care Coalition
                                                                            Advises the MAV on priority water issues affecting the sector and            DSE e-planning Steering Committee                                                    Victorian Emergency Management Council
Provides advice to the MAV Board on environmental issues of                 assists in the development of key water policy positions.                    Emergency Management Manual Victoria - Strategy Group                                Victorian Food Safety Council
importance to local government and the needs and issues of                                                                                                                                                                                    Victorian Jurisdictional Projects Group for the National Packaging Covenant
                                                                                                                                                         Emergency Recovery Planning Committee
members for delivery of environmental outcomes.                              MAV WORKFORCE PLANNING AND SERVICES ADVISORY GROUPS                         Environmental Weeds Working Group Committee                                          Victorian Litter Action Alliance Advisory Group
                                                                            Informs and shapes initiatives to address key strategic and                  Flood Warning Consultative Committee Victoria                                        Victorian Local Government Disability Planners’ Network
MAV STRATEGIC TRANSPORT AND INFRASTRUCTURE ADVISORY                                                                                                                                                                                           Victorian Local Government Multicultural Issues Network
GROUP                                                                       operational issues affecting the sector in workforce planning.               Goulburn Broken Environment Planning Network
                                                                                                                                                         Greater Melbourne Water Sensitive Urban Design Steering Committee                    Victorian Local Sustainability Accord Committee
Provides advice to the MAV Board on infrastructure and transport            MAV WASTE REFERENCE GROUP                                                    Greenfleet Victoria’s Greenhouse Forests Project Steering Committee                  Victorian Ministerial Housing Council
issues affecting local government and assists the MAV Board to              Informs and guides MAV policy and position development on waste              Infringements Standing Advisory Committee                                            Victoria Multicultural Commission
carry forward key policies and campaigns in this area.                      and resource recovery related issues.
                                                                                                                                                         Integrated Municipal Fire Management Planning Project Multi-Agency Reference Group   Victorian Natural Resource Management Facilitator Network
                                                                                                                                                         Intergovernmental Tobacco Reforms and Amenity Working Group                          Victorian Rail Environmental Forum
MAV FUTURE OF LOCAL GOVERNMENT ADVISORY GROUP                               MAV/DOI PUBLIC TRANSPORT LIAISON GROUP                                       Library Network Committee (State Library)                                            Victorian Road Based Public Transport Advisory Committee
Provides advice to the MAV Board on future trends in the role of            Facilitates regular discussion on public transport related matters of        Local Government Drug Issues Forum                                                   Victorian Road Freight Advisory Council
                                                                                                                                                         Local Government Natural Resource Management Facilitator Network                     Victorian Safe Communities Network
government and promotes the importance of local government,                 mutual interest to the MAV and Department of Infrastructure at               Local Government Waste Management Forum                                              Victorian Settlement Planning Committee
identifying and pursuing its preferred direction.                           executive level.                                                             Local Government Working Group on Gambling                                           Victorian Spatial Council
                                                                                                                                                         MAV/DHS Food Safety Coordination Project Steering Committee                          Victorian Speed Limit Advisory Group
MAV DROUGHT TASKFORCE                                                       MAV PLANNING EXPERT REFERENCE GROUP                                          MAV/DHS MCH Services Improvement Implementation Advisory Group                       Victorian Statewide Natural Resource Management Facilitator Network
Provides advice to the MAV on existing and emerging concerns for            Informs and guides the MAV on technical land use planning matters.           MAV/DHS HACC/Primary Care Working Party                                              Victorian Sustainable Public Lighting Action Group
local government arising from drought conditions in order to inform                                                                                      MAV/DHS Office for Children Partnerships Working Party                               Victorian Universities Rural Health Consortium
advocacy to the State Government.                                           MAV ECOLOGICALLY SUSTAINABLE DEVELOPMENT ADVOCACY GROUP                      Melbourne 2030 Activity Centres Thematic Working Group                               Vision Super Board
                                                                            Advises the MAV and shares information on reducing the                       Melbourne 2030 Implementation Reference Group                                        Wastewise Local Government Steering Committee
                                                                            environmental impacts of the built environment.                              Melbourne and Metropolitan Flood Warning Arrangements Group                          Water Quality Improvement Plan Steering Committee
                                                                                                                                                         Melbourne Water Drainage Implementation Steering Committee                           Women’s Participation in Local Government Coalition


44   COMMITTEES MAV ANNUAL REPORT 2006/07                                                                                                                                                                                                                                                MAV ANNUAL REPORT 2006/07 COMMITTEES      45
                                                                                                                                                                                                       Local government continued achieving service
                                                                                                                                                                                                       improvements while taking the lead in policy directions
                                                                                                                                                                                                       at both ends of life’s spectrum.




FUTURE
DIRECTIONS
In 2007, the MAV focused considerable resources on progressing                The leadership shown by the sector in examining how it contributes        Priorities as determined by member councils will continue to be             Target areas for achieving a reduction in regulations and increased
initiatives aimed at repositioning local government through an                to the evolution of its roles and directions, and how to best meet        pursued across all functional areas of local government                     council efficiencies will include planning approval processes and food
ambitious reform agenda to realise greater efficiencies and                   future expectations of communities and other governments, while           responsibility. Effort will be focused on five major issues identified by   safety. The MAV will also work with the State Government to
improvements on a sector-wide scale. It also began consolidating              also ensuring councils' long-term viability, will be put into action.     the sector: long term financial viability; managing the effects of cost     implement a $4 million project to reduce council business costs,
its insurance businesses by commencing a comprehensive review                 The Future of Local Government project will implement the                 shifting; population ageing and the associated financial strain on          increase innovation and remove impediments to service collaboration.
process and strengthening the emphasis on appropriate risk                    performance, co-operation and accountability frameworks through           councils; the effects of drought and climate change; and the                MAV member support services will be expanded, building on the
management practices across all areas.                                        detailed plans to drive ongoing improvements for councils and             challenge of renewing local community infrastructure.                       legal, governance, policy, strategy and personal support already
In 2008, the MAV will further build on these initiatives. A central           assist in delivering required community outcomes.                         Work will continue to finalise a Victorian Agreement to be signed by        available to councils and individuals. The range of information,
focal point will be the delivery of a range of benefits to members            With initiatives underpinned by the common foundation principle           the MAV and State Government to guide state-local government                development, advice and support programs for mayors will continue
through our policy, advocacy, business and insurance services.                of local government's primary responsibility for ensuring community       relations into the future and give effect to the national                   to expand and a strengthened councillor development program will
An estimated $30 million in member benefits is a target to be                 wellbeing, the focus will be on councils as the brokers of priorities.    InterGovernmental Agreement (IGA) on cost shifting signed in 2006.          offer discounted redeemable training credits through MAV
realised before 2010, through reduced insurance premiums and new              This will be achieved through stronger community-planning models          Further research will examine the capacity of communities to pay            membership renewals. Meanwhile, a renewed focus on workforce
collaboration opportunities, as well as programs to realise gains in          being adopted and owned by communities across Victoria, and new           rates, particularly the farming, business and pensioner sectors. This       development in 2007 will seek further opportunities to profile
council productivity, service delivery and operational effectiveness.         principles for councils to use these plans as input to their own          work will inform a report for members on policy implications arising        council employment options, and marketing of roles experiencing
Protection, cost-effectiveness and a return of benefits to members            decision-making and planning processes.                                   from the research, as well as long-term strategies to ensure                skills shortages will be targeted.
are the hallmarks of MAV Insurance. Building on these drivers, the            Building on the model of the SWIFT integrated library management          ratepayer affordability.                                                    In preparation for the first round of aligned council elections in
MAV will focus on the collective impacts of its risk management               system and Australia Post Billpay services, new opportunities for         With rates and water entitlements due to be separated for property          2008, the MAV will prepare an extensive program of activities to
services, group purchasing power and advocacy efforts to deliver              business collaboration, shared services and targeted procurement          valuation purposes in mid-2008, the MAV will continue joint                 encourage voter and candidate participation. A web-based
savings of more than $6 million to local government through                   activities will also be identified. A knowledge bank of case studies,     advocacy efforts with irrigation councils to receive a state-funded         information resource, regional training and a media/marketing
reduced contributions in the 2007/08 year.                                    regional study tours, workshops and facilitation of regional              compensation package to lessen the impost on non-irrigation                 campaign will be progressively rolled out to boost the profile and
Restructuring the public liability (Civic Mutual Plus) and fidelity           co-operation activities will be undertaken by the MAV to imbed            farming communities.                                                        understanding of the role of councillors.
(Municipal Officers' Fidelity Guarantee Fund) insurance businesses            innovative new practices into local government culture.                   The 2007 federal election will provide an opportunity for the MAV           Meanwhile, the MAV will continue its advocacy for core policy
will continue, with the objective of achieving a world-class insurance        In addition, the MAV will pursue greater transparency and                 to renew its advocacy on funding and program models for home                priorities such as greater funding for public libraries, home and
program for local government. Advice on future business strategies            accountability for councils by working with the State Government to       and community care to address the growing demands of an ageing              community care, maternal and child health nursing and
has been sought from several experts and a significant relationship           establish an independent tribunal to address councillor conduct and       population and the increasing costs borne by Victorian councils.            infrastructure. Discussions with the State Government will continue
development program will continue to enhance information flows                governance breakdowns, develop statistical reporting of food safety                                                                                   to progress improved service delivery models and support for
with members and provide a sound base upon which to implement                                                                                           It also affords local government significant scope to achieve national      councils to deliver state-driven policies and regulations.
                                                                              regulations and clarify conflict of interest legislation.                 reforms to intergovernmental funding arrangements. Building on the
future reforms.                                                                                                                                                                                                                     It will be important for the sector to remain in the driver's seat of local
                                                                              Greater focus on safeguarding the reputation and promoting the role       PricewaterhouseCoopers report on local government financial
A major priority will be the rollout of Civic Workers' Plus, a consolidated                                                                                                                                                         government reform and collaboration processes, with the MAV playing
                                                                              of local government will be vital for building the trust and confidence   sustainability, more appropriate indexation of grants will be sought
workcover model for local government in Victoria. Cost-benefit analyses       of communities, governments and stakeholders. The MAV will work           from major political parties, along with a commitment to fund a new         a crucial role in assisting members to realise these achievements.
will determine projected financial benefits for members, as well as           with members to investigate effective communication strategies and        community infrastructure renewal program.
improved occupational health and safety performance measures.                 re-branding options to overcome misunderstood perceptions of the
With these goals in mind, the MAV hopes to receive license approval           sector, while also raising awareness and understanding of its own
to establish a self-insurance scheme by 2008/09.                              advocacy and policy roles, with particular reference to aggregated
                                                                              service provision and State Government liaison.



46   FUTURE DIRECTIONS MAV ANNUAL REPORT 2006/07                                                                                                                                                                                                                       MAV ANNUAL REPORT 2006/07 FUTURE DIRECTIONS   47
                                                                                                                                                                                                    “A major strength of all MAV Insurance
                                                                                                                                                                                                    programs is the past and continuing emphasis

MAV INSURANCE CHAIR’S REPORT
                                                                                                                                                                                                    on appropriate risk management activities
                                                                                                                                                                                                    across all areas.”

2007 is the centenary year of            During the year the MAV                 and local government to this        · MAVIC worked closely with           continually monitors reinsurers           The underlying performance       In closing, I again acknowledge
the Municipal Association of             Insurance Committee embarked            vital community sector.                VMIA, to ensure that common,       to ensure they maintain an                of the CMP business continued    the work of Jardine Lloyd
Victoria providing insurance             on a strategic review of all         · MAVIC endeavoured to keep               consistent messages are            appropriate financial rating              to improve and 2007 can          Thompson, our scheme
services to members. The MAV             insurance products being offered        open sporting grounds that             communicated to key                and capital level for the risk            be judged as another very        manager, the work of our
formed the Municipal Officers’           to local government. This review        were severely affected by the          stakeholder groups.                transferred. This has enabled             successful year.                 actuaries and other professional
Fidelity Guarantee Fund in 1907          is being conducted by Ernst &           drought. Discussions took           · Negotiations with MAVIC             our exposure to trends to be                                               advisers, the contribution of
                                                                                                                                                                                                    Our share of profit arrangement
as the result of failure of the          Young. The brief included,              place with key stakeholders,          reinsurers resulted in the          managed effectively and has                                                MAV staff, particularly CEO
                                                                                                                                                                                                    with reinsurers matured on 30
general insurance market to              among other things, the                 including the Australian              inclusion of webcasting in          lessened the impact of general                                             Rob Spence and Contract
                                                                                                                                                                                                    June 2007 and assuming both
cover members’ insurance risks.          establishment of international          Football League, Cricket              our CMP policy coverage.            market fluctuations.                                                       Manager Allan Holmes, and
                                                                                                                                                                                                    members’ performance and
The Fund has been providing              best practice in local                  Australia, councils and user                                              The reported results for this year, performance nationally is              the very strong and enthusiastic
                                                                                                                     A major strength of all MAV
insurance protection to its              government insurance services,          clubs, which produced user                                                $2,631,396 (2006 $2,144,894) maintained, financial benefits                support of my fellow members
                                                                                                                     Insurance programs has been
members ever since. Centenary            the steps required to achieve           agreements that reflected tort                                            and the accumulated surplus at should now begin to flow to                 of the MAVIC.
                                                                                                                     the continuing emphasis on
celebrations will involve all            best practice and the level of          reform and legal precedents.                                              30 June 2007, $7,667,014            CMP and its members.
                                                                                                                     appropriate risk management
members of MAV Insurance                 cost savings that could be              Agreement was also reached                                                (2006 $10,545,618) after
                                                                                                                     activities across all areas. The                                                                                 JOHN WARBURTON
and will occur towards the               generated for members by                that user groups would be                                                 return of $5.5 million in capital
                                                                                                                     increased emphasis by MAVIC                                                                                      CHAIR MAV INSURANCE
end of 2007.                             implementing any identified             involved in determining                                                   to members. The results were
                                                                                                                     on risk management initiatives                                                                                   COMMITTEE
Improved claims performance              improvements. This review is            whether grounds remained                                                  impacted by the significant
                                                                                                                     has been supported by
and cost savings, together with          expected to be completed in             open for use.                                                             reduction in claims expense.
                                                                                                                     members, and has resulted in
a review of capital requirements         August 2007.                         · In conjunction with the State        the number of claims reported
by the Civic Mutual Plus (CMP)           The MAV Insurance Committee’s           Government’s insurer,               to the Fidelity Fund during the
business, led to the decision by         aim is to ensure its members            Victorian Managed Insurance         2007 financial year being at
the MAV Insurance Committee              benefit from first-class insurance      Authority (VMIA), MAVIC             their lowest for many years.
(MAVIC) to return $5.5 million           cover at a reasonable premium           contracted Life Saving Victoria
                                                                                                                     As a mutual insurance scheme,
in capital to members and                cost over the long term. There          to undertake compulsory
                                                                                 random audits of pools              CMP exists for its members and
reduce contributions for the             were a number of achievements
                                                                                 insured for Victorian and           relies heavily on arranging
2008 financial year by                   during the year that supported
                                                                                 Tasmanian councils. The             reinsurance of a significant part
$600,000. The Fidelity Fund              this objective:
                                                                                 Committee is determined to          of the risks it covers on behalf of
experienced another year of              · MAV’s public liability program
                                                                                 ensure pools are as safe as         members. As we have seen in
lower than expected claims,                 for not-for-profit community
                                                                                 possible and that there are         the past, reinsurers do
which resulted in a 20%                     groups was restructured and
                                                                                 fewer, if any, swimming pool        occasionally fail. However,
reduction in premiums for the               expanded to broaden the
                                                                                 accidents which lead to             prudent surplus and capital
2008 financial year.                        range of groups eligible to be
                                                                                 claims. It is envisaged that this   management has ensured that
                                            insured. The MAV’s                                                       such failures have not affected
                                                                                 program will be ongoing.
                                            Community Groups Insurance                                               the capacity for CMP to provide
                                            Scheme builds on the                                                     reliable insurance cover for its
                                            commitment of both the MAV                                               members. The MAVIC
48   MAV INSURANCE CHAIR’S REPORT MAV ANNUAL REPORT 2006/07                                                                                                                                                                                            MAV ANNUAL REPORT 2006/07 MAV INSURANCE CHAIR’S REPORT   49
                                      JOHN WARBURTON                                              RON FARRELL                                             CR ROD FYFFE                                  ALLAN GARCIA                             CR DICK GROSS                                        DR MICHAEL KENNEDY                                    CR GEOFF LAKE
                                      Appointed 1995                                              Appointed 2001                                          Appointed 2004                                Appointed 2003                           Appointed 2005                                       Appointed 1995                                        Appointed 2004
                                      COMMITTEE CHAIRMAN AUGUST                                   CHAIR CLAIMS AND TECHNICAL COMMITTEE                    Current and past positions held               Current and past positions held          Current and past positions held                      Current and past positions held                       Current and past positions held
                                      2005 to present
                                                                                                  Current and past positions held                         MAV Board Representative for Rural North      Representative Local Government          MAV President, August 2006                           CEO, Mornington Peninsula Shire Council               MAV President, 2004-August 2006
                                      Current and past positions held                                                                                     Central Region                                Association of Tasmania (LGAT)           Councillor City of Port Phillip                      Chairman, Victorian Healthcare Association            Councillor Monash City Council 2000 (to
                                                                                                  Non-Executive Director, Victorian Managed
                                                                                                                                                          Councillor, Greater Bendigo City Council      CEO LGAT                                 Mayor City of Port Phillip 1998-2000, 2004           Chairman, Inner East Community Health                 present)
                                      Director, Australian Wealth Management Limited              Insurance Authority
                                                                                                                                                          Mayor of Greater Bendigo City Council                                                  Member, Australian Local Government                  Director, LifeSaving Victoria                         Mayor Monash City Council 2002-03 and
                                      Director, MFS Living & Leisure Group                        General Manager, Australian Eagle Insurance Co Ltd
                                                                                                                                                          2003-05                                                                                Association Board                                    CEO, Boroondara City Council 1995-99                  2003-04
                                      Trustee, Melbourne Exhibition and Convention                Chairman and Non Executive Director, Utilities
                                                                                                                                                                                                                                                                                                      CEO, Shire of Hastings 1993-94                        Vice President Australian Local Government
                                      Centre Trust                                                Insurance Co Pty Ltd
                                                                                                                                                                                                                                                                                                                                                            Association
                                      Chairman, Port of Hastings Corporation                      Non Executive Director, connect.com.au Pty Ltd
                                      Director, Vision Super (formerly Local Authorities Super)   Non Executive Director, Metropolitan Fire & Emergency
                                      1997- June 2007                                             Services Board
                                      Deputy Chair, Victorian Managed Insurance Authority
                                      1996-2000




MAV INSURANCE COMMITTEE

                                                                                                                                                                                                     ANNE MURPHY                                 ADRIAN NYE                                           ROB SPENCE
                                                                                                                                                                                                     Appointed 1993                              Appointed 2004                                       Appointed 1997
                                                                                                                                                                                                     Current and past positions held             Current and past positions held                      Current and past positions held
                                                                                                                                                                                                     Committee Chairman 1993 - August 2005       Company Director and Management Consultant           CEO, MAV
                                                                                                                                                                                                     Past President MAV                          Chairman, Victorian Managed Insurance Authority      CEO, Brimbank City Council 1994-97
                                                                                                                                                                                                     Principal, Anne Murphy Strategy and         Chairman, Showground Nominees Pty Ltd, Melbourne     CEO, City of Footscray 1992-94
                                                                                                                                                                                                     Facilitation                                Showgrounds Redevelopment Joint Venture              Director of Municipal Operations, Office
                                                                                                                                                                                                     Board member, KYM Employment Services Inc   Director, Victorian WorkCover Authority              of Local Government
                                                                                                                                                                                                                                                 Director, Smartimbers Pty Ltd                        Trustee, Vision Super
                                                                                                                                                                                                                                                 Associate, HLB Mann Judd                             Deputy Chair, Growth Areas Authority
                                                                                                                                                                                                                                                 Member, Broadmeadows Schools Regeneration            Member, Victorian Children’s Council
                                                                                                                                                                                                                                                 Project Board
                                                                                                                                                                                                                                                 Deputy Director, Emergency Services Superannuation
                                                                                                                                                                                                                                                 Board

50   MAV INSURANCE COMMITTEE MAV ANNUAL REPORT 2006/07                                                                                                                                                                                                                                                                                  MAV ANNUAL REPORT 2006/07 MAV INSURANCE COMMITTEE           51
                                                                                                                                                                                            Local government continued achieving service
                                                                                                                                                                                            improvements while taking the lead in policy directions
                                                                                                                                                                                            at both ends of life’s spectrum.




GENERAL
INSURANCE


For many years the Municipal Association of Victoria (MAV)                      COMMUNITY GROUPS INSURANCE                                                              CIVIC WORKERS PLUS                                                 MAV INSURANCE VISION
operated an insurance broking business for the local government       In 2002 many communities were at a crossroads in terms of                 In October 2006 the MAV appointed Willis Australia Limited to           The MAV Insurance vision is to be the preferred supplier of public
sector known as MAV Insurance Broking Services. An agreement          insurance costs. The not-for-profit groups that make such an              manage the process of establishing a self-insurance scheme for          and product liability, professional indemnity, workers’ compensation
between the MAV and Jardine Lloyd Thompson (JLT) was signed on        important contribution to our society were being crippled by dramatic     Victorian local government.                                             and fidelity insurance products to members.
17 July 1987 whereby JLT agreed to pay certain fees to MAV, in        increases in insurance premiums. Many activities and events, from         The project covers four stages:                                         MAV Insurance will work with members to ensure they have in place
return for the use of the business name ‘MAV Insurance Broking        major festivals to small hobby group meetings, were under threat.
                                                                                                                                                1.Analysis of the current situation in local government regarding       the best possible risk management policies, strategies and practices,
Services’, the opportunity to earn brokerage on insurance contracts   The MAV responded to the looming crisis by establishing a group
                                                                                                                                                   WorkCover administration, occupational health and safety and         and to provide appropriate insurance services for the protection of
for clients introduced by MAV and the accessing of certain            buying scheme attached to council insurance policies, which became
                                                                                                                                                   claims.                                                              their assets and liabilities.
information.                                                          known as the Community Groups Insurance Scheme.
                                                                                                                                                2.Consolidation of all local councils into a single group with one or   MAV Insurance will:
Subsequently, in June 1993, the MAV agreed to remove the              The MAV this year negotiated the inclusion of Victoria’s not-for-profit
requirement for JLT to trade as ‘MAV Insurance Broking Services’,                                                                                  two WorkCover agents working across the sector under strict key      · create a safer community environment by enhancing the risk
                                                                      sector in an expanded national community insurance scheme,
but all other provisions of the 1987 agreement remained.                                                                                           performance indicators                                                  management policies and procedures of members
                                                                      enabling many more community groups to benefit from low-cost
                                                                      insurance cover and attractive terms and conditions.                      3.Development of consistent, agreed procedures for safety and           · ensure stability for members in liability insurance through the
The MAV receives commission from JLT for the duration of the
                                                                                                                                                   training designed to reduce the number of incidents in Victorian        provision of effective cover at reasonable premiums, and
agreement. The commission is calculated at the rate of 22.5% per      For most categories the premiums and excesses were reduced.                  local government; development of a Victorian local government
annum of all fees payable to JLT by underwriters, insurers, clients   The broader eligibility criteria now offered by MAV Community                                                                                     · respond to the changing needs of members, including local
                                                                                                                                                   industry rate and reduction in premium amounts paid by councils         councils and the communities they serve, by tailoring liability
introduced by the MAV and all clients that are local government       Insurance means amateur sporting groups previously not covered by            in preparation for self-insurance.
bodies, as well as 22.5% of the related investment income.            the scheme now have the same access to affordable public liability                                                                                   insurance to suit contemporary circumstances.
                                                                                                                                                4.Preparation of the application to the Victorian WorkCover
During the 2006/07 financial year the MAV received commission         insurance as more than 1000 other groups.                                    Authority for self-insurance for Victorian local government.
under this agreement totalling $1,427,914 (2006 $1,316,165).                                                                                    Most of the research and consultation with councils conducted for
                                                                                                                                                previous applications to the Victorian WorkCover Authority is still
                                                                                                                                                relevant, and the general structure of the proposed self-insurance
                                                                                                                                                scheme, to be known as Civic Workers’ Plus (CWP), is not intended
                                                                                                                                                to alter.
                                                                                                                                                A Civic Workers Plus Consultative Committee was established
                                                                                                                                                during the year and was the main forum for strategy development,
                                                                                                                                                decision making on behalf of members and the management of
                                                                                                                                                Willis Australia Ltd.
                                                                                                                                                It is anticipated that early in the next financial year the MAV will
                                                                                                                                                provide councils with a comprehensive strategic document setting
                                                                                                                                                out full details of the proposed scheme and its implementation.
                                                                                                                                                The MAV is confident that the proposed Victorian scheme will also
                                                                                                                                                bring about improved occupational health and safety, a reduction in
                                                                                                                                                claims frequency and severity, improved claims and injury
                                                                                                                                                management and consequent cost savings.
                                                                                                                                                In addition to this initiative, it is planned that a statewide risk
                                                                                                                                                management system will be implemented across the sector to
                                                                                                                                                ensure all councils, their staff and councillors are protected as far as
                                                                                                                                                possible from the potential of accident and personal liability.




52   GENERAL INSURANCE MAV ANNUAL REPORT 2006/07                                                                                                                                                                                                       MAV ANNUAL REPORT 2006/07 GENERAL INSURANCE   53
                                                                                                                                                                                                                 Local government continued achieving service
                                                                                                                                                                                                                 improvements while taking the lead in policy directions
                                                                                                                                                                                                                 at both ends of life’s spectrum.




CIVIC
MUTUAL
PLUS

                                CMP RESULTS                                                        CLAIM TRENDS                                     YEAR BY YEAR SCHEME PERFOMANCE TABLE
The financial result for 2007 improved on the 2006 year result due          A number of factors have affected the long-term trend of claims                                                                                                                                                                                                Scheme surplus

to falling claims costs. The claims costs for 2007 were impacted by         against the Civic Mutual Plus scheme. Improvements in risk              6000000
                                                                                                                                                                                                                                                                                             5,735,467
the effect of tort reform resulting in reduced cost of claims               management practices relating to specific local government
compared to previous years.                                                 activities, such as playground maintenance, contribute to a reduced     4800000
                                                                                                                                                                                                                                            3,215,704
The operating surplus for the 2007 financial year was $2,474,744            number of claims. Similarly, the tort reforms introduced in 2003        3600000                                                                                                                     2,899,303
(2006 $1,941,013). This result increased the net asset (equity)             have also impacted claims, as the application of the concept of                                                                                                             2,336,396
                                                                                                                                                                                                                                                                    2,020,659
                                                                                                                                                                                                                                                                                                           2,074,324            2,340,639
                                                                                                                                                    2400000
position of the Scheme from $10.2 million in 2006 to $12.7                  foreseeable risk has improved legal outcomes for councils being                                                                                                                                                                                                          887,242

million of which $5.5 million was returned to members leaving               sued for compensation. Furthermore, the implementation of council       1200000
                                                                                                                                                                                                                                                                                                                          324,933

an accumulated surplus of $7.2 million at the end of the 2007               Road Management Plans, in accordance with the Road                                 0

financial year.                                                             Management Act, has resulted in a statutory defence being                                                                                            -656,972
                                                                                                                                                    -1200000
                                                                            available to defend road reserve claims.
In addition to the falling claims costs and the return of capital the
                                                                            Two clear trends that have been evident in recent years are, firstly,   -2400000
                                                                                                                                                                                                                -2,382,448                                                                                                  Tasmania joined in June 1996
result was also affected by CMP increasing its insurance cover from
$2 million to $5 million.                                                   the declining number of public liability claims, in large part due to   -3600000
                                                                                                                                                                                                 -3,013,554

                                                                            the reasons outlined above, and secondly, an increase in the size of                                -4,028,368
The actuary has calculated the potential value of CMP's profit share        amounts claimed in professional indemnity cases.
                                                                                                                                                    -4800000       -4,562,660                                            Scheme Deficits                                                                    Reinsurance has been renewed through to 2008

with its reinsurers for the first four years of the five-year program to                                                                            -6000000                                                         96/97       97/98
                                                                                                                                                                       93/94         94/95            95/96                                    98/99      99/00       00/01       01/02         02/03         03/04     04/05      05/06     06/07
be $12.5 million at 30 June 2007. The profit share is not included
within the financial statements as it’s receipt is not certain.                                                                                     (1)This diagram shows the year-by-year performance of the scheme with regard to the                                (4)Tasmanian Councils joined the scheme in June 1996.
                                                                                                                                                       position as at 30 June 2007.                                                                                    (5)Each year is a separate independent insurance year.
                                                                                                                                                    (2)Effective from 30 June 1998, full re-insurance was introduced and from 1998 the                                 (6)The surplus of $2,336,396 for 99/00 is after returning $2,000,000 to members
                                                                                                                                                       surpluses, per year, are effectively ‘guaranteed’.                                                                 from that year.
                                                                                                                                                    (3)The aggregate position as at 30 June 2007 is a consolidated scheme surplus of                                   (7)The surplus of $5,735,467 for 02/03 is after returning $3,500,000 to members
                                                                                                                                                       $7,208,665.                                                                                                        from that year.

                                                                                                                                                    ACCUMULATED SURPLUS TABLE
                                                                                                                                                                                             Scheme carrying first $2M                                                                          Full reinsurance
 INCURRED CLAIMS 1993-2007                                                  NUMBER OF CLAIMS 1993-2007
                                                                                                                                                    12000000
                                                                                                                                                                                                                                                                                                                         9,994,908 10,233,920
                                         Roads & footpaths   $52,813,081                                  Roads & footpaths     4179                10000000
                                                                                                                                                                                                                                                                                                           8,612,552
                                         Professional        $40,221,058                                  Professional           976
                                         indemnity                                                        indemnity                                  8000000                                                                                                                                                                                         7,208,665
                                         Natural              $1,387,708                                  Natural                 88
                                                                                                                                                                                                                                                                                             5,821,464
                                                                                                                                                     6000000
                                         Other               $12,984,253                                  Other                  600

                                         Person                $3,295,100                                 Person                 145                 4000000                     3,287,000                                                              2,867,000
                                                                                                                                                                                                  1,644,000 1,450,000
                                         Construction          $2,084,927                                 Construction           253
                                                                                                                                                     2000000        1,007,000                                                    763,000
                                         Environmental         $8,617,519                                 Environmental          903                                                                                                           2,422
                                                                                                                                                               0
                                         Leisure             $19,442,310                                  Leisure                745                                                                                                                                -756,474
                                                                                                                                                    -2000000
                                         Building              $5,215,812                                 Building               350                                                                                                                                            -2,400,557

                                         PAID                $109,966,421                                  TOTAL                8239                -4000000           93/94         94/95            95/96          96/97          97/98      98/99      99/00       00/01       01/02         02/03         03/04        04/05        05/06          06/07
                                         PLUS O/S             $36,095,348                                                                           The above graph depicts the accumulated surplus as at the end of each 30 June
                                         TOTAL               $146,061,769                                                                           financial year. It is important to appreciate that the reduction in the Accumulated
                                                                                                                                                    Surplus as at 30th June 2007 is due to the Scheme returning $5,500,000 of capital
                                                                                                                                                    to its members. If this return of surplus/capital was not made, the accumulated surplus
                                                                                                                                                    as at 30 June 2007 would have been $12,708,665.

54   CIVIC MUTUAL PLUS MAV ANNUAL REPORT 2006/07                                                                                                                                                                                                                                                                   MAV ANNUAL REPORT 2006/07 CIVIC MUTUAL PLUS   55
CIVIC MUTUAL PLUS                                                                                                                                                                         Effective risk management practices contributed to significant
                                                                                                                                                                                          cost savings for members, while community safety initiatives
                                                                                                                                                                                          were a key focus area for the MAV insurance business.

           PREMIUM                                       BIKE                         DROUGHT                         LABOUR HIRE                              MEDIA                                  RISK                               SWIMMING
         REDUCTIONS                                     PATHS                        CONDITIONS                       TRANSFER OF                           REPORTING &                           MANAGEMENT                               POOLS
The collective benefits of MAV           Numerous bicycle incidents have     The drought brought with it a              LIABILILTY                          WEBCASTING                              AWARDS                     The safety of users of municipal             MAVIC committed to rolling
                                                                                                                Concerns relating to CMP           CMP members were advised by            The Civic Mutual Plus Award for      swimming pools has been a                    audits of swimming pools over
Insurance’s risk management              occurred on shared bicycle          range of social and economic
                                                                                                                scheme members entering into       JLT in February 2006 that libel        Excellence recognises local          major concern of MAVIC for                   the coming years, until
services, group purchasing               pathways and offroad pathways.      impacts on local communities,
                                                                                                                agreements that contain            or slander claims against              government efforts to develop        many years. MAVIC is concerned               convinced that pools are fully
power and lobbying activities            In an effort to reduce the          including the cancellation of
                                                                                                                complex and onerous indemnity      council, councillors and council       sound risk management                to ensure that risk management               compliant with LSV criteria.
delivered savings of more than           number of severe injuries           some local sporting activities
                                                                                                                clauses in favour of the other     officers resulting from                practices. The Victorian recipient   measures adopted by councils:
$6 million to local government           sustained by cyclists, and the      because of concern that the
                                                                                                                party have been previously         defamatory comments made in            of this year’s award was Glen        · minimise the likelihood of
through reduced premiums.                consequent claims on Civic          dangerous playing surfaces
                                                                                                                reported to members. JLT, as       council meetings that were             Eira City Council for its strategy      deaths and serious injuries
Cost effectiveness and stability         Mutual Plus (CMP), the              could result in injuries and
                                                                                                                CMP’s scheme manager,              broadcast, were not covered due        to manage and enforce critical          sustained by pool users
are hallmarks of MAV Insurance.          Municipal Association of Victoria   therefore claims against
                                                                                                                assisted councils in negotiating   to a policy exclusion relating to      town planning permit conditions.     · ensure legislative compliance
Even through difficult insurance         Insurance Committee (MAVIC)         councils. Through a combination
                                                                                                                either the removal of these        ‘advertising, broadcasting or          Glen Eira established                   so as to avoid potential fines
market conditions, premiums              approved the conduct of             of legal precedents and the
                                                                                                                clauses or amending clauses        telecasting activities conducted       operational processes and               and penalties imposed by
have been kept low by strength           metropolitan and rural seminars     recommended Sports Grounds
                                                                                                                that might result in a transfer    by or on behalf of the insured.’       systems that link its planning and      legislative authorities, and
in numbers. A reduction in               about shared bike path safety.      Agreements, developed by JLT
                                                                                                                of uninsured risk to the member.   Reinsurers had previously argued       building departments to ensure       · minimise the financial
claims across both MAV                   Representatives from 60 councils    at the request of MAVIC,
                                                                                                                These clauses may be contained     that this exclusion also applied       permit conditions designed to           consequences for the scheme
Insurance operating divisions,           attended the seminars and were      councils were able to work with
                                                                                                                in a diverse range of              where media recorded or                promote public safety and               should claims result from
a negotiated reduction in the            provided with information on        local sporting bodies to keep
                                                                                                                agreements, including State        reported on council meetings,          reduce risk exposures are               unsafe swimming pools.
excess insurance premium for             the legal and risk management       grounds open, subject to the
                                                                                                                Government agreements and          but have since accepted that           enforced by the building
the Municipal Officers’ Fidelity         aspects of shared bicycle paths     agreement of the local clubs.                                                                                                                     MAVIC ensured that JLT worked
                                                                                                                labour hire contracts for          their original interpretation of the   department during construction.
Guarantee Fund and the early             and numerous case studies.          The recommended agreements                                                                                                                        with Life Saving Victoria (LSV)
                                                                                                                temporary staff. It is important   exclusion in relation to media         In Tasmania, the winner was
impacts of tort reform on CMP            MAVIC requested that Jardine        provided for the club to make                                                                                                                     and councils to raise the safety
                                                                                                                that councils continue to seek     reporting was incorrect. Policy        Meander Valley Council. Its
have put local government in             Lloyd Thompson (JLT), the           the decision on whether grounds                                                                                                                   of municipal swimming pools to
                                                                                                                advice on these clauses to be      extensions were negotiated to          submission detailed the
its strongest position in the            Scheme Manager, liaise with         were kept open, either solely or                                                                                                                  a reasonable standard, noting
                                                                                                                well informed about the            provide cover to councils for          Waterways Audit and Signage
insurance market in years.               the Victorian Managed               in conjunction with the council.                                                                                                                  that even simple improvements
                                                                                                                consequences of entering into      publication of defamatory              Project, which introduced a
These achievements provided              Insurance Authority to expand                                                                                                                                                         can prevent injuries and,
                                                                                                                an agreement that transfers        comments occurring from                system of inspections, hazard
the catalyst for a comprehensive         awareness of the various issues                                                                                                                                                       therefore, major claims against
                                                                                                                uninsured risks to the council.    webcasting activities, subject to      removal, public signage and
review of the capital                    and run more detailed seminars                                                                                                                                                        the scheme. During the year,
                                                                                                                                                   the cover not extending to any         education to reduce the risk of
management policy and the                which would also address Road                                                                                                                                                         LSV undertook audits of more
                                                                                                                                                   person who makes a malicious           serious incidents in all municipal
MAV Board’s delegated expert             Management Act issues relating                                                                                                                                                        than 30 Victorian and
                                                                                                                                                   defamatory comment.                    recreational areas, recognising
Insurance Committee                      to bicycle paths.                                                                                                                                                                     Tasmanian municipal swimming
                                                                                                                                                                                          that it was unable to constantly
determined that a reduction in                                                                                                                                                                                                 pools, and other aquatic
                                                                                                                                                                                          patrol recreational areas. The
premiums was both justifiable                                                                                                                                                                                                  facilities. The findings and
                                                                                                                                                                                          winning councils received an all-
and financially responsible.                                                                                                                                                                                                   recommendations were shared
                                                                                                                                                                                          expenses-paid trip to attend the
                                                                                                                                                                                                                               with all Victorian and Tasmanian
                                                                                                                                                                                          Risk and Insurance Management
                                                                                                                                                                                                                               councils and follow-up action
                                                                                                                                                                                          Society annual conference in
                                                                                                                                                                                                                               taken on all high risks.
                                                                                                                                                                                          New Orleans.




56   CIVIC MUTUAL PLUS MAV ANNUAL REPORT 2006/07                                                                                                                                                                                                                   MAV ANNUAL REPORT 2006/07 CIVIC MUTUAL PLUS   57
                                                                                                                                                                                       Local government continued achieving service
                                                                                                                                                                                       improvements while taking the lead in policy directions
                                                                                                                                                                                       at both ends of life’s spectrum.




MUNICIPAL
OFFICERS’ FIDELITY
GUARANTEE
FUND
                     CHANGE TO STRUCTURE                                                 INSURANCE PROPOSAL FORM
                                                                                                                                                    FIDELITY                                                                               OTHER AUTHORITIES
                                                                                                                                                                                              Loddon Shire Council
The MAV Insurance Committee (MAVIC) made the decision to                     During the year MAV and Jardine Lloyd Thompson (JLT) met to                                                      Macedon Ranges Shire Council         Bendigo Cemeteries Trust

                                                                                                                                                    MEMBERS
change the reinsurance arrangements for the Municipal Officers'              discuss the issues identified by the MAV's risk review and the audit                                             Manningham City Council              Central Highlands Water
Fidelity Guarantee Fund. Effective from 1 July 2006, Chubb                   conducted by JLT on fidelity issues. Further discussions were held                                               Mansfield Shire Council
replaced Swiss Re as insurer to the fund and its members. The fund           with the reinsurer, Chubb, and a consolidated document was                                                                                            Citywide Service Solutions Pty Ltd
                                                                                                                                                                                              Maribyrnong City Council
now covers the first $100,000 of each and every claim (subject to            devised to provide members with a single form to be completed for                                                                                     Coliban Region Water Authority
                                                                                                                                                                  COUNCILS                    Maroondah City Council
the member $1,500 excess) and Chubb insures all members of the               all parties. This document is the Insurance Proposal Form.                                                                                            Corangamite Regional Library Corporation
                                                                                                                                                    Alpine Shire Council                      Melbourne City Council
fidelity fund for $400,000 in excess of the $100,000. In addition,           In past years, the audit process was conducted using the Jardine                                                                                      Crowlands Water Supply Cooperative
Chubb insures those members who wish to take out cover in excess                                                                                    Ararat Rural City Council                 Melton Shire Council
                                                                             Mutual Asset Protection Plan (JMAPP) scheme on internal control                                                                                       East Gippsland Water
of $500,000. Eighteen members of the fund have insurance limits                                                                                     Ballarat City Council                     Mildura Rural City Council
                                                                             and risk prevention relating to fraud. It was agreed during the year                                                                                  Eastern Regional Libraries
in excess of $500,000.                                                                                                                              Banyule City Council                      Mitchell Shire Council
                                                                             that the audit process be changed in order to better target the main                                                                                  First Mildura Irrigation Trust
                                                                             issues impacting members and to reflect the requirements in the        Bass Coast Shire Council                  Moira Shire Council
                                                                                                                                                                                                                                   Geelong Cemeteries Trust
                                    RESULTS                                  Insurance Proposal Form.                                               Baw Baw Shire Council                     Monash City Council
The surplus for the year of $156,652 (2006 $203,881) was a                                                                                                                                                                         Geelong Regional Library Corporation
                                                                                                                                                    Bayside City Council                      Moonee Valley City Council
satisfactory result. No claims were made during the year and a               The value of the audit process will be reviewed through discussion                                                                                    Goulburn Region Valley Water Authority
                                                                                                                                                    Benalla Rural City Council                Moorabool Shire Council
provision of $108,000 remains for future claims.                             with members during 2008.                                                                                                                             Grampians Wimmera Mallee Water
                                                                                                                                                    Boroondara City Council                   Moreland City Council
The capital of the fund at the end of the 2007 financial year was                                                                                                                                                                  Authority
                                                                                                   CLAIMS TRENDS                                    Brimbank City Council                     Mornington Peninsula Shire Council
$468,349 (2006 $311,697). With the continuing reduction in                                                                                                                                                                         Lower Murray Water
                                                                             No claims were paid during the 2007 financial year. This led to the    Buloke Shire Council                      Mount Alexander Shire Council
claims and the lower reinsurance premiums, MAVIC made the                                                                                                                                                                          Melbourne Wholesale Fish Market
                                                                             decision to commence reduction of capital held by the fund.            Cardinia Shire Council                    Moyne Shire Council
decision during the year to reduce the capital base of the fund to           Subsequent to balance date, a claim on the fund was received. At                                                                                      Municipal Association of Victoria
                                                                                                                                                    Casey City Council                        Murrindindi Shire Council
$300,000 over a five-year period, subject to the continuation of             the time of publication of this Annual Report, we are unable to                                                                                       North East Region Water Authority
favourable conditions. The first return of capital occurred on 1 July                                                                               Central Goldfields Shire Council          Nillumbik Shire Council
                                                                             accurately estimate the cost to the fund for this claim.                                                                                              Queen Victoria Market
2007 with contributions to the pool being reduced by 20%.                                                                                           Colac Otway Shire Council                 Northern Grampians Shire Council
                                                                                                                                                                                                                                   South Gippsland Region Water Authority
                                                                                                                                                    Corangamite Shire Council                 Port Phillip City Council
                                                                                                                                                                                                                                   Southern Rural Water
                                                                                                                                                    Darebin City Council                      Pyrenees Shire Council
                                                                                                                                                                                                                                   Tanjil Bren Water Co-op Ltd and Committee
                                                                                                                                                    East Gippsland Shire Council              Queenscliffe Borough Council
                                                                                                                                                                                                                                   of Management - Recreation Reserve
                                                                                                                                                    Frankston City Council                    South Gippsland Shire Council
                                                                                                                                                                                                                                   Wannon Region Water Authority
                                                                                                                                                    Gannawarra Shire Council                  Southern Grampians Shire Council
                                                                                                                                                                                                                                   West Gippsland Regional Library
                                                                                                                                                    Glen Eira City Council                    Stonnington City Council
                                                                                                                                                                                                                                   Corporation
                                                                                                                                                    Glenelg Shire Council                     Strathbogie Shire Council
                                                                                                                                                                                                                                   Western Region Water Authority
                                                                                                                                                    Golden Plains Shire Council               Surf Coast Shire Council
                                                                                                                                                                                                                                   Westernport Region Water Authority
                                                                                                                                                    Greater Bendigo City Council              Swan Hill Rural City Council
                                                                                                                                                    Greater Dandenong City Council            Towong Shire Council
                                                                                                                                                    Greater Geelong City Council              Wangaratta Rural City Council
                                                                                                                                                    Greater Shepparton City Council           Warrnambool City Council
                                                                                                                                                    Hepburn Shire Council                     Wellington Shire Council
                                                                                                                                                    Hindmarsh Shire Council                   West Wimmera Shire Council
                                                                                                                                                    Hobsons Bay City Council                  Whitehorse City Council
                                                                                                                                                    Horsham Rural City Council                Whittlesea City Council
                                                                                                                                                    Hume City Council                         Wodonga City Council
                                                                                                                                                    Indigo Shire Council                      Wyndham City Council
                                                                                                                                                    Kingston City Council                     Yarra City Council
                                                                                                                                                    Knox City Council                         Yarra Ranges Shire Council
                                                                                                                                                    Latrobe City Council                      Yarriambiack Shire Council
58   MUNICIPAL OFFICERS’ FIDELITY GUARENTEE FUND MAV ANNUAL REPORT 2006/07                                                                                                                                                               MAV ANNUAL REPORT 2006/07 FIDELITY MEMBERS   59
CMP
MEMBERS                                                                                                                                       FINANCIAL
                                                                                                                                              OVERVIEW
           COUNCILS                                                                                           WATER AUTHORITIES
VICTORIA                                Monash City Council             Glenorchy City Council              VICTORIA
Alpine Shire Council                    Moonee Valley City Council      Hobart City Council                 Central Gippsland Region Water
Ararat Rural City Council               Moorabool Shire Council         Huon Valley Council                 Authority
Ballarat City Council                   Moreland City Council           Kentish Council                     Central Highlands Region Water
Banyule City Council                    Mornington Peninsula Shire      King Island Council                 Authority
Bass Coast Shire Council                Council                         Kingborough Council                 Coliban Region Water Authority
Baw Baw Shire Council                   Mount Alexander Shire Council   Latrobe Council                     East Gippsland Water Authority
Bayside City Council                    Moyne Shire Council             Launceston City Council             First Mildura Irrigation Trust
Benalla Rural City Council              Murrindindi Shire Council       Meander Valley Council              Gippsland and Southern Rural                 REPORT ON FINANCIAL RESULTS FOR                                 relating to grant activities was $649,749 for the year ended 30
Boroondara City Council                 Nillumbik Shire Council         Northern Midlands Council
                                                                                                            Water Authority                                THE YEAR ENDED 30 JUNE 2007                                   June 2007 as compared to a deficit in 2006 of $503,585.
                                                                                                            Goulburn Murray Rural Water       In accordance with the requirements of the Municipal Association           Consequently, as at 30 June 2007 the MAV had a commitment
Brimbank City Council                   Northern Grampians Shire        Sorell Council
                                                                                                            Authority                         Act 1907, and applicable accounting standards, the economic
Buloke Shire Council                    Council                         Southern Midlands Council                                                                                                                        to expend $3.33 million (2006 $2.39 million) of grant funds on
                                                                                                            Goulburn Valley Water Authority   activity of the Municipal Association of Victoria, the Municipal
                                        Port Phillip City Council                                                                                                                                                        projects for the betterment of local government and Victorian
Campaspe Shire Council                                                  Tasman Council                                                        Officers' Fidelity Guarantee Fund and Local Government Mutual
                                        Pyrenees Shire Council                                              Grampians Wimmera Mallee                                                                                     communities.
Cardinia Shire Council                                                  Waratah-Wynyard Council                                               Liability Insurance Scheme (Civic Mutual Plus) is reported to the
                                                                                                            Water Authority                                                                                              2006/07 was again a year of project delivery and firm cost control.
Casey City Council                      Queenscliffe Borough Council    West Coast Council                                                    members as an economic entity within the annual accounts.
                                                                                                            Lower Murray Urban & Rural        The combined activities are shown as the consolidated accounts
Central Goldfields Shire Council        South Gippsland Shire Council   West Tamar Council                                                                                                                               The operating surplus of the consolidated entity was $3.307 million
                                                                                                            Water Authority                   and the Municipal Association of Victoria, being the parent entity,
Colac Otway Shire Council               Southern Grampians Shire                                                                                                                                                         (2006 $1.658 million). This had the affect of increasing the net
                                                                                                            North East Water Authority        is shown separately as the MAV General Fund.
Corangamite Shire Council               Council                                                                                                                                                                          assets of the Association from $14.4 million in 2006 to $17.7
                                                                               NON-COUNCIL                  South Gippsland Region Water                                                                                 million this year, prior to the return of $5.5 million to members
Darebin City Council                    Stonnington City Council                                                                              The Association represents local government in Victoria. One of the
                                                                                  BODIES                    Authority                                                                                                    of Civic Mutual Plus. The net assets of the Association at 30 June
                                        Strathbogie Shire Council                                                                             activities of the MAV is that it seeks out, applies for, and administers
East Gippsland Shire Council                                            VICTORIA                            Wannon Region Water Authority
                                        Surf Coast Shire Council                                                                              grant funds for, and on behalf of, its members, for the benefit of         2007 were $12.2 million, after the capital distribution.
Frankston City Council                                                  Eastern Regional Libraries          Western Region Water Authority
                                        Swan Hill Rural City Council                                                                          both local government and the Victorian community. This activity
Gannawarra Shire Council                                                Corporation                         Westernport Region Water          of the Association has been accounted for as a segment and                                          MAV INSURANCE
Glen Eira City Council                  Towong Shire Council            Goulburn Valley Regional Library                                                                                                                 The MAV Insurance business consists of Civic Mutual Plus and the
                                                                                                            Authority                         included at note 25 in the financial statements.
Glenelg Shire Council                   Wangaratta Rural City Council   Corporation                                                                                                                                      Municipal Officers' Fidelity Guarantee Fund. The Association is
                                        Warrnambool City Council                                                                              The MAV financial statements also include the activities of its
Golden Plains Shire Council                                             Municipal Association of Victoria                                                                                                                required under the Municipal Association Act 1907 to provide both
                                                                                                            TASMANIA                          insurance business, MAV Insurance, which operates the Municipal
                                        Wellington Shire Council        North Central Goldfields Library                                                                                                                 public liability and fidelity insurance to local government and other
Greater Bendigo City Council                                                                                Esk Water Authority               Officers' Fidelity Guarantee Fund and the Local Government Mutual
                                        West Wimmera Shire Council      Service                                                                                                                                          statutory authorities.
Greater Geelong City Council                                                                                Rivers and Water Supply           Liability Insurance Scheme (Civic Mutual Plus) for the benefit of
Greater Shepparton City Council         Whitehorse City Council         Victorian Water Industry                                              councils and other local authorities. Both insurance activities are        MAV Insurance is not subject to Australian Prudential Regulatory
                                                                                                            Commission
                                        Whittlesea City Council         Association Inc.                                                      non-discretionary mutual funds and are subject to the oversight            Authority (APRA) regulations. However, the MAVIC views compliance
Hepburn Shire Council                                                                                       Hobart Regional Water Authority
                                        Wodonga City Council            West Gippsland Regional Library                                       of the Association's board of management, which acts through               with these regulations as being good business governance and
Hindmarsh Shire Council                                                                                     Cradle Coast Water Authority
                                        Wyndham City Council            Service                                                               a committee of management constituted by the board, the MAV                practice and has a policy of complying with several, but not all,
Hobsons Bay City Council                                                                                                                                                                                                 of the APRA regulations.
                                        Yarra City Council              Whitehorse Manningham                                                 Insurance Committee of Management (MAVIC).
Horsham Rural City Council
                                        Yarra Ranges Shire Council      Regional Library Corporation                                          MAVIC carries out oversight and management of the operational              The MAV holds an Australian Financial Services Licence (AFSL
Hume City Council
                                        Yarriambiack Shire Council      Yarra Plenty Regional Library                                         activities of both the Municipal Officers' Fidelity Guarantee Fund         No 27143).
Indigo Shire Council                                                    Service                                                               and Civic Mutual Plus. Jardine Lloyd Thompson Pty. Ltd provides            The MAV and MAV Insurance have AFSL-compliant processes and
Kingston City Council                   TASMANIA                                                                                              the claims and risk management services to the MAV.
Knox City Council                       Break O’Day Council             TASMANIA                                                                                                                                         activities in place to maintain the highest standards of governance,
                                                                        Local Government Association of                                                                                                                  provide operational efficiency and enhance the future viability of the
Latrobe City Council                    Brighton Council                                                                                                                              MAV                                MAV Insurance business.
                                                                        Tasmania
Loddon Shire Council                    Burnie City Council                                                                                   The financial result for the MAV in 2007 has again been solid,
                                                                                                                                                                                                                         The combined surplus for 2007 was $2.631 million (2006 $2.145
Macedon Ranges Shire Council            Central Coast Council                                                                                 achieving a small surplus for the year of $26,208 (2006 $16,227).
                                                                                                                                              The result inclusive of grants received and expended for the 2007          million). The net asset position at the end of 2007 was
Manningham City Council                 Central Highlands Council                                                                                                                                                        $7.67 million (2006 $10.55 million)
                                        Circular Head Council                                                                                 year was a $675,958 (2006 $487,358 deficit), with net assets
Mansfield Shire Council
                                                                                                                                              increasing to $4.558 million (2006 $3.882 million).
Maibyrnong City Council                 Clarence City Council
                                        Derwent Valley Council                                                                                In 2007 the MAV received a further $3.78 million (2006 $4.89
Maroondah City Council
                                        Devonport City Council                                                                                million) in grants from both Federal and State Governments. The
Melbourne City Council
                                                                                                                                              MAV delivered on several significant projects during the year that
Melton Shire Council                    Dorset Council
                                                                                                                                              have been funded by grants from both Federal and State
Mildura Rural City Council              Flinders Council                                                                                      Governments and funds contributed from its members. These grants
Mitchell Shire Council                  George Town Council                                                                                   and contributions are managed by the MAV for the betterment of
Moira Shire Council                     Glamorgan/Spring Bay Council                                                                          the local government sector and Victorian communities. The surplus

60   CMP MEMBERS MAV ANNUAL REPORT 2006/07                                                                                                                                                                                                             MAV ANNUAL REPORT 2006/07 FINANCIAL OVERVIEW   61
                                                                                                                                                    The components of the balance sheet are:                                                 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
                                                                                                                                                    2.1 Current and non-current assets                                                       debts and liabilities.

GUIDE
                                                                                                                                                    Cash assets include cash held in the bank, petty cash, cash deposits
                                                                                                                                                    and cash investments.                                                               NOTES TO THE FINANCIAL STATEMENTS
                                                                                                                                                                                                                                             To enable the reader to understand the basis on which the values

TO THE
                                                                                                                                                    Receivables are monies owed to the Association.
                                                                                                                                                                                                                                             shown in the statements are established it is necessary to provide
                                                                                                                                                    Prepayments are payments made in the current financial year which                        details of the Association’s accounting policies. These are described in

FINANCIAL                                                                                                                                           relate to the next financial year. For example, annual subscriptions etc. note 2. Apart from the accounting policies, the notes also give details
                                                                                                                                                    Property, plant and equipment represents the value of the               behind many of the summary figures contained in the statements. The

REPORT                                                                                                                                              equipment, furniture and fittings, computers, web site and intranet note numbers are shown beside the relevant items in the income
                                                                                                                                                    and motor vehicles owned by the Association.
                                                                                                                                                    Intangible assets are trademarks, educational programs and other
                                                                                                                                                                                                                                   statement, balance sheet and the statement of cash flows.
                                                                                                                                                                                                                                          Where the Association wishes to disclose information which cannot
                                                                                                                                                    intellectual property owned by the Association                                        be incorporated into the statements, it this is shown in the notes.
                                                                                                                                                    Other financial assets represent the value of shares held by the                      The notes should be read at the same time as the financial
                             INTRODUCTION                                       WHAT IS CONTAINED IN THE ANNUAL                                     Association in the Co-operative Purchasing Scheme.                                    statements in order to get a full and clear picture of the financial
The financial report is a key part of the MAV’s Annual Report.                          FINANCIAL REPORT?                                                                                                                                 statements.
It shows how the MAV performed financially during the 2006/07            The financial report contains three main sections: the financial           2.2 Current and non-current liabilities
financial year and the position at the end of the financial year (30     statements, the notes to the financial statements and the statements       Bank overdraft indicates the amount the Association owes its                          STATEMENTS BY DIRECTORS
June 2007).                                                              by the directors and auditor.                                              bankers on its daily operating account.                                               The statement by directors is made by two directors on behalf of the
The financial report is presented in accordance with the Australian      The financial statements consist of three main statements: income          Payables are monies owed by the Association to its suppliers as                       Board of the Municipal Association of Victoria. The statement states
                                                                         statement, balance sheet and statement of cash flows.                      at 30 June.                                                                           that in the opinion of the Board the financial statements present a
Accounting Standards and the recommendations of the Urgent
                                                                                                                                                                                                                                          true and fair view of the operations of the Association and that the
Issues Group.                                                            The notes to the financial statements detail the Association’s             Premiums in advance are insurance premiums relating to the next                       Association can pay its debts as and when they fall due.
The MAV is a not-for-profit association that represents its members      accounting policies and sets out the detailed values that are carried      financial year billed to members of the insurance fund before
who are the 79 local government authorities around Victoria. The         into the financial statements.                                             30 June.                                                                              INDEPENDENT AUDIT REPORT
MAV also runs the MAV Insurance business. This business consists of      The statements by directors and auditor provide the views                  Provision for employee entitlements is the accounting term for                        This report is the independent auditor’s opinion on the financial
two entities, Civic Mutual Plus (public liability and professional       of the directors of the MAV and the independent auditor on                 annual leave, long service leave and staff retirement gratuities owed                 statements. It provides the reader of the financial statements a
indemnity insurer) and the Municipal Officers’ Fidelity Guarantee        the financial report. The statement by directors confirms the view         to staff.                                                                             completely independent opinion of the financial statements of the
Fund. The MAV also manages grants received from Federal and              of the directors that the financial report provides a true and fair view                                                                                         Association. The opinion covers all statutory and accounting
                                                                                                                                                    Provision for claims outstanding represents insurance claims
State Government for and on behalf of the local government sector.       of the financial performance, financial position and solvency of the                                                                                             standards compliance requirements as well as providing a view on
                                                                                                                                                    reported by members together with an estimate of claims incurred                      the truth and fairness of the financial statements.
All these different interests are accounted for separately and then      Association. The audit report by the independent auditor expresses         but not yet reported including an estimate of the costs of settlement
consolidated into the MAV Financial Report.                              the auditor’s opinion on whether the financial statements present          for these claims.
                                                                         fairly the financial position of the Association as at 30 June 2007,
The MAV is committed to accountability in all of its operations. It is
                                                                         and the results of the various business operations and cash flows          2.3 Net assets
with this in mind that this plain English guide has been developed to
                                                                         for the year ended 30 June 2007, in accordance with Accounting             This term describes the difference between total assets and total
assist readers understand and analyse the financial report.
                                                                         Standards and other mandatory professional report requirements.            liabilities. It represents the net worth of the Association as at 30 June.
                                                                         FINANCIAL STATEMENTS                                                       3.    Statement of cash flows
                                                                         1. Income statement                                                        The statement of cash flows summarises cash payments and cash
                                                                         The income statement shows:                                                receipts for the year.
                                                                         · the MAV’s revenue from its various activities
                                                                                                                                                    The values may differ from those shown in the income statement
                                                                         · the expenses incurred in running the MAV and its business                because the income statement is prepared on an accrual basis.
                                                                            activities.
                                                                         These expenses relate only to the business operations and do not           Cash is derived from, and is used in, two main areas:
                                                                         include costs associated with the purchase of assets. The expense          3.1 Cash flows from operating activities:
                                                                         item ‘depreciation’ spreads the cost of the assets over the estimated      Receipts relate to all cash received into the Association’s bank
                                                                         life of the assets.                                                        account from members and others who owed money to the
                                                                         The most important figure is the surplus for the year. Where it is         Association in the form of fees or premiums. Receipts also include
                                                                         positive, this means that revenues were greater than expenses.             interest earned from the Association’s cash investments. It does not
                                                                                                                                                    include receipts from the sale of assets.
                                                                         2. Balance sheet
                                                                                                                                                    Payments relate to all cash paid out of the Association’s bank
                                                                         The balance sheet shows the assets the Association owns and the
                                                                                                                                                    account to staff, creditors and others. It does not include cash paid
                                                                         liabilities it owes at 30 June.
                                                                                                                                                    for the purchase of assets.
                                                                         The balance sheet separates the assets and liabilities into current
                                                                         and non-current. Current means those assets or liabilities that will       3.2 Cash flows from investing activities
                                                                         be either collected or that fall due within the next 12 months.            This relates to cash receipts and cash payments resulting from either
                                                                                                                                                    the sale or purchase of property, plant and equipment.



62   GUIDE TO THE FINANCIAL REPORT MAV ANNUAL REPORT 2006/07                                                                                                                                                                                                    MAV ANNUAL REPORT 2006/07 GUIDE TO THE FINANCIAL REPORT   63
GLOSSARY



AFSL – Australian Financial Services Licence
ALGA – Australian Local Government Association
APRA – Australian Prudential Regulation Authority
ASIC – Australian Securities and Investment Commission
CEGS – Culturally Equitable Gateways Strategy
CMP – Civic Mutual Plus
CWP – Civic Workers’ Plus
DHS – Department of Human Services
DoI – Department of Infrastructure
DSE – Department of Sustainability and Environment
DVC – Department for Victorian Communities
HACC – Home and Community Care
IMFMP – Integrated Municipal Fire Management Planning
JLT – Jardine Lloyd Thompson
LGAT – Local Government Association of Tasmania
LGIIP – Local Government Improvement Incentive Program
LRRN – Local and Regional Resource Networks
MAV – Municipal Association of Victoria
MAVIC – Municipal Association of Victoria Insurance Committee
MFESB – Metropolitan Fire and Emergency Services Board
PERIN – Penalty Enforcement by Registration of Infringement Notice
RIS – Regulatory Impact Statement
SEPP – State Environmental Protection Policy
VEC – Victorian Electoral Commission




64   GLOSSARY MAV ANNUAL REPORT 2006/07
      MAV
FINANCIAL REPORT
    2006/07




              MAV FINANCIAL REPORT 2006/07   65
     INCOME STATEMENT
     FOR THE YEAR ENDED 30 JUNE 2007
                                                                                    CONSOLIDATED                   MAV - GENERAL FUND
                                                                                2007             2006             2007             2006
                                                                NOTE                   $                $                $                $

     REVENUE                                                        4     46,846,705       45,407,042       11,158,243       10,150,094


     EXPENSES                                                    5(b)     43,539,352       43,749,511       10,482,285       10,637,452
     NET SURPLUS/(DEFICIT)                                          3      3,307,353        1,657,531          675,958         (487,358)




     BALANCE SHEET
     AS AT 30 JUNE 2007
                                                                                    CONSOLIDATED                   MAV - GENERAL FUND
                                                                                2007             2006             2007             2006
                                                                NOTE                   $                $                $                $

     CURRENT ASSETS
     Cash and cash equivalents                                   9(a)     26,372,954       25,140,202        4,489,475        4,063,005
     Receivables                                             2(p),10      36,822,332       40,764,031        1,253,407          593,850
     Prepayments                                                              52,280          220,875           52,280          220,875
     TOTAL CURRENT ASSETS                                                 63,247,566       66,125,108        5,795,162       4,877,730


     NON-CURRENT ASSETS
     Receivables                                             2(p),10      43,598,526       47,967,122                    -                -
     Property, plant and equipment                            2(e),12        617,706          610,015          617,706          610,015
     Intangibles                                              2(e),13        224,217           77,011          224,217           77,011
     Other financial assets                                                        10               10               10              10
     TOTAL NON-CURRENT ASSETS                                             44,440,459       48,654,158          841,933         687,036
     TOTAL ASSETS                                                        107,688,025 114,779,266             6,637,095       5,564,766


     CURRENT LIABILITIES
     Payables                                                              4,127,102        3,835,358        1,055,260          823,053
     Premiums in advance                                           11     30,024,265       27,169,013                    -                -
     Provision for employee entitlements                           17        486,678          438,928          486,678          438,928
     Provision for claims outstanding                           14(a)     15,593,966       15,830,519                    -                -
     Other current liabilities                                               253,823          113,815          253,823          113,815
     TOTAL CURRENT LIABILITIES                                            50,485,834       47,387,633        1,795,761       1,375,796


     NON-CURRENT LIABILITIES
     Provision for employee entitlements                           17        142,194          143,566          142,194          143,566
     Provision for claims outstanding                        2(o),14      44,683,853       52,657,050                    -                -
     Other non-current liabilities                                           140,868          163,094          140,872          163,094
     TOTAL NON-CURRENT LIABILITIES                                        44,966,915       52,963,710          283,066          306,660
     TOTAL LIABILITIES                                                    95,452,749 100,351,343             2,078,827        1,682,456
     NET ASSETS                                                           12,235,276       14,427,923        4,558,268        3,882,310


     EQUITY                                                               12,235,276       14,427,923        4,558,268        3,882,310


     The accompanying notes form an integral part of these statements.


66   MAV FINANCIAL REPORT 2006/07
STATEMENT OF CHANGES IN EQUITY
FOR YEAR ENDED 30 JUNE 2007
                                                                                CONSOLIDATED                  MAV - GENERAL FUND
                                                                            2007            2006             2007              2006
                                                           NOTE                   $                $                 $               $

RETAINED EARNINGS
Balance at beginning of year                                         14,427,923       12,770,392        3,882,310         4,369,668
Capital return to members                                    2(t)    (5,500,000)                   -                 -                -
Surplus (Deficit) from ordinary activities                            3,307,353        1,657,531          675,958          (487,358)
BALANCE AT END OF YEAR                                               12,235,276       14,427,923        4,558,268         3,882,310




CONSOLIDATED STATEMENT OF CASH FLOWS
AS AT 30 JUNE 2007
                                                                                CONSOLIDATED                  MAV - GENERAL FUND
                                                                            2007            2006             2007              2006
                                                           NOTE                   $                $                 $               $

CASH FLOW FROM OPERATING ACTIVITIES
RECEIPTS
Subscriptions, grants and fees                                       42,688,873       44,708,865        9,799,311        11,801,813
Investment income                                                     1,479,841        1,153,312          265,204           221,090
Reinsurance and other recoveries                                     12,954,093       12,427,791                     -                -


PAYMENTS
Suppliers                                                           (43,476,233) (45,218,854)          (9,238,436) (12,077,279)
Claim payments                                                      (12,014,216) (13,538,997)                        -                -
NET CASH (USED IN)/PROVIDED BY
OPERATING ACTIVITIES                                        9(b)      1,632,361         (467,883)         826,079           (54,376)


CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sale of fixed assets                                      150,690          158,219          150,690           158,219
Payments for fixed assets & intangibles                                (550,299)        (380,338)        (550,299)         (380,338)
NET CASH USED IN INVESTING ACTIVITIES                                  (399,609)        (222,119)       ( 399,609)         (222,119)


NET (DECREASE)/INCREASE IN CASH HELD                                  1,240,953         (690,002)         426,470          (276,495)
Cash at beginning of year                                            25,140,202       25,830,204        4,063,005         4,339,500
CASH AT END OF YEAR                                         9(a)     26,372,954       25,140,202        4,489,475         4,063,005


The accompanying notes form an integral part of these statements.




                                                                                                                               MAV FINANCIAL REPORT 2006/07   67
       NOTES TO AND FORMING PART OF THE
       FINANCIAL STATEMENTS AS AT 30 JUNE 2007
     1. CORPORATE INFORMATION
       The consolidated financial report of the Municipal Association of Victoria for the year ended 30 June 2007 was authorised for issue in
       accordance with a resolution of the directors on the date shown on the attached Statement by Directors.
       The Municipal Association of Victoria is an association incorporated by an Act of the Parliament of Victoria, Australia, known as the Municipal
       Association Act 1907.
       The nature of the operations and principal activities of Municipal Association of Victoria are:
       -   to provide a public liability insurance scheme for local government
       -   to provide fidelity insurance for local government
       -   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
       -   to serve the interests of the Victorian community.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation
       The financial report is a general purpose financial report drawn up in accordance with Australian Accounting Standards, Mandatory Professional
       Reporting Requirements (Urgent Issues Group Interpretations) 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.
       The financial report is presented in Australian dollars.
       The accounts have been prepared on the accruals basis using historical costs and, except where stated, do not take into account current
       valuations of assets.

(b) Statement of compliance
       The financial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting
       Standard (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with
       International Financial Reporting Standards (IFRS).

(c) Principles of consolidation
       The economic entity comprises the financial report of the Municipal Association of Victoria and its controlled entities the Local Government
       Mutual Liability Insurance Scheme, trading as Civic Mutual Plus (CMP), and the Municipal Officers’ Fidelity Guarantee Fund.
       A controlled entity is any entity controlled by the Municipal Association of Victoria (incorporated under the Municipal Association Act 1907).
       Control exists where the 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 the Municipal Association of Victoria to achieve the objectives of the
       Municipal Association of Victoria.
       The effects of all transactions between entities in the consolidated entity have been eliminated.
       The financial statements of the divisions are prepared for the same reporting period as the Municipal Association of Victoria, using consistent
       accounting policies.
       All inter-divisional balances and transactions, including unrealised profits arising from intra-divisional transactions, have been eliminated.
       Unrealised losses are eliminated unless costs cannot be recovered.
       The equity in the insurance businesses of Civic Mutual Plus and the Municipal Officers’ Fidelity Guarantee Fund represents the assets of the
       members of each of the insurance mutuals and is not available to the members of the Association.

(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.




68     MAV FINANCIAL REPORT 2006/07
    NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


(e) Property, plant, equipment, trademarks and intellectual property
    Plant and equipment, trademarks and intellectual property are carried at cost, less where applicable, any accumulated depreciation or
    amortisation and any impairment value.
    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:                            ANNUAL RATE
    Leasehold improvements at cost                                                      20%
    Furniture and equipment at cost                                               20 - 33%
    Motor vehicles at cost                                                              20%
    Interactive communications system at cost                                           33%
    Software and website at cost                                                        33%
    Trademarks and intellectual property at cost                                  10 - 20%

    INTANGIBLE ASSETS
    Intangible assets acquired separately or in a business combination are initially measured at cost. The cost of an intangible asset acquired in a
    business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any
    accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets, excluding capitalised development
    costs, are not capitalised and expenditure is recognised in profit or loss in the year in which the expenditure is incurred.
    The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised over the useful life
    and tested for impairment whenever there is an indication that the intangible assets may be impaired. The amortisation period and the
    amortisation method for an intangible asset with a finite life are reviewed at least at each financial year-end. Changes in the expected useful life
    or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for prospectively by changing the
    amortisation period or method, as appropriate, which is a change in the accounting estimate. The amortisation expense on intangible assets with
    finite lives is recognised in profit or loss in the expense category ‘Amortisation’.
    The Association does not have any intangible assets with indefinite useful lives.
    IMPAIRMENT
    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 the recoverable amounts.

(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 of whether they are expected to be settled within 12 months of balance date.
    Other employee entitlements are expected to be settled within 12 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 of staff departures. Related on-costs are included.
    Contributions made to an employee superannuation fund are charged as expenses when incurred.




                                                                                                                                       MAV FINANCIAL REPORT 2006/07   69
     NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


(h) Revenue recognition
     Interest revenue is recognised on a time-proportionate basis that takes into account the effective yield on the financial asset.
     Grants are recognised as revenue when the Association obtains control over the assets comprising the contribution. Control over the grants is
     normally obtained upon their receipt or upon prior notification that a grant has been secured.
     Subscriptions and sponsorships are recognised on an accrual basis.

(i) Investment income
     Investment income consists of interest recognised on a time-proportionate basis that takes into account the effective yield on the financial asset
     and movement in unit values in cash and fixed interest funds carried at fair value through the income statement.

(j) Other financial assets
     Investments are valued at net market value at balance sheet date. The insurance scheme and fund 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.

(k) Comparative figures
     Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year.

(l) Cash flows
     For the purposes of the statement of cash flows, cash includes cash on hand and deposits held at call with banks and investments in cash
     backed unit trusts net of outstanding bank overdrafts.



     SUMMARY OF ACCOUNTING POLICIES RELATING TO INSURANCE ACTIVITIES

(m) 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.

(n) Premiums receivable
     In 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. Prior to each balance date members have committed to
     participate in both the scheme and the fund for the ensuing year and accordingly the premiums are disclosed in the balance sheet as
     ‘contributions receivable’ with an offsetting liability described as ‘contributions billed in advance’.

(o) 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 2% (2006 2%) and the discount rate at 6.45% (2006 5.9%)
     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 22.
     Claims-incurred expense has reduced from the prior year due to the impact of
     (i) improved risk management practices by members, and
     (ii) reform to the law of tort.




70   MAV FINANCIAL REPORT 2006/07
    NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


(p) Reinsurance and other recoveries receivable
    Reinsurance and other recoveries receivable on paid claims, reported claims not paid, claims incurred but not reported and unexpired risk
    liabilities are recognised as revenue. Recoveries receivable are assessed in a manner similar to the assessment of outstanding claims. Recoveries
    are measured as the present value of the expected future receipts, calculated on the same basis as the liability for outstanding claims.
    Reinsurance recoveries are reduced from the prior year due to a reduction in claims caused by:
    (i) improved risk management practices by members, and
    (ii) reform to the law of tort

(q) 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) Future reinsurance and other 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.

(r) Catastrophe Insurance
    Catastrophe insurance relates to insurance premiums paid to reinsurers in accordance with the established reinsurance strategy of the entity and
    in order to protect the insurance businesses from catastrophic and unforseen claims.

(s) Alteration due to an error from a prior year
    Civic Mutual Plus provides public, product liability and professional indemnity insurance to its members up to a policy limit of $5 million (2006
    $2 million) and facilitates insurance cover for each its members up to a limit of $300 million of public and product liability and $200 million for
    professional indemnity insurance. In previous years Civic Mutual Plus has accounted for premium revenue and catastrophe insurance as if it insured
    members to the limits of $300 million of public and product liability and $200 million for professional indemnity insurance. In 2007 the MAV
    Insurance Committee decided to account for premium revenue and catastrophe insurance on the basis of the limit of its insurance liability being
    $5 million (2006 $2 million). The introduction of this policy has resulted in premium revenue for 2007 being reduced by $1,300,777 (2006
    $3,656,000), catastrophe insurance being reduced by $1,181,417 (2006 $3,555,000) and stamp duty paid being reduced by $116,630
    (2006 $101,600). The adjustment does not have any impact on the surplus earned by either Civic Mutual Plus or the consolidated entity.
    The change in policy has also resulted in the current liability, premiums in advance to be reduced by $1,181,417 (2006 $3,555,000)
    representing 2008 year premiums invoiced in the 2007 financial year.

(t) Return of Capital
    At 30 June 2007 $5.5million (2006 $nil) of the capital of CMP was returned to members. This decision was made by the Committee after
    considering current and past performance of the scheme and actuarial advice on the appropriate level of capital to be retained by CMP.
    A five-year forecast was considered to ensure the future viability of CMP was not compromised by the decision to return capital.




                                                                                                                                         MAV FINANCIAL REPORT 2006/07   71
         NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


                                                                                      CONSOLIDATED
                                                                                  2007             2006
                                                                  NOTE                   $                $



     3    CONTRIBUTION TO OPERATING SURPLUS
          CONTRIBUTION FROM INSURANCE ACTIVITIES
          Premium income                                                    31,697,332       27,344,810
          Catastrophe insurance                               2(r) & 2(s) (24,034,727) (18,317,398)
          NET INCOME BEFORE CLAIMS                                           7,662,605        9,027,412
          Claims expense                                           5(a)     (4,779,785) (11,106,894)
          Reinsurance and other recoveries                         2(p)      3,436,297        7,604,111
          NET CLAIMS EXPENSE                                                (1,343,488)      (3,502,783)
          UNDERWRITING RESULT                                                6,319,117        5,524,629
          Investment income                                                  1,211,599          929,077
          Administration and general expenses                               (4,899,320)      (4,308,817)
          INSURANCE ACTIVITY OPERATING SURPLUS                               2,631,396        2,144,889
          MAV SURPLUS / DEFICIT                                                675,957         (487,358)
          OPERATING SURPLUS                                                  3,307,353        1,657,531


                                                                                      CONSOLIDATED                  MAV - GENERAL FUND
                                                                                  2007             2006             2007             2006
                                                                                         $                $                $             $



     4    REVENUE
          REVENUES FROM OPERATING ACTIVITIES
          Subscriptions/premiums                                    2(s)    33,710,973       29,301,492        2,087,547        2,030,588
          Reinsurance and other recoveries                         2(p)      3,436,297        7,604,111                    -                -
          Brokerage and management fees income                               1,427,914        1,316,165        1,427,914        1,316,165
          Seminars and sale of publications                                    889,934          771,891          889,934          771,891
          Project, sponsorship and management income                           305,754          307,214          888,614          854,358
          Grant income                                                       5,590,668        4,935,162        5,590,668        4,935,162
          TOTAL REVENUE FROM OPERATING ACTIVITIES                           45,361,540       44,236,035       10,884,677        9,908,164


          REVENUES FROM NON-OPERATING ACTIVITIES
          Investment income                                                  1,472,330        1,146,373          260,731          217,296
          Gain on disposal of non-current assets                                 12,835          24,634           12,835           24,634
          TOTAL REVENUE FROM OUTSIDE THE
          OPERATING ACTIVITIES                                               1,485,165        1,171,007          273,566          241,930
          REVENUE                                                           46,846,705       45,407,042       11,158,243       10,150,094


                                                                                      CONSOLIDATED
                                                                                  2007             2006
                                                                  NOTE                   $                $



     5(a)CLAIMS EXPENSES
          Paid                                                              12,989,535       14,529,869
          Outstanding claims at end of financial year             14(a)     60,277,819       68,487,569
          Outstanding claims at beginning of financial year                (68,487,569) (71,910,544)
          TOTAL CLAIMS EXPENSES                                    2(o)      4,779,785       11,106,894




72       MAV FINANCIAL REPORT 2006/07
     NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


                                                                          CONSOLIDATED                    MAV - GENERAL FUND
                                                                       2007             2006             2007             2006
                                                                              $                $                $                $


5(b)OPERATING EXPENSES
    The following items have been recognised in the
    operating surplus (deficit):
    Claims expense                                                4,779,785       11,106,894                    -                -
    Catastrophe insurance expense                                24,034,727       18,317,399                    -                -
    Stamp duty                                                    2,058,605        1,669,309                    -                -
    General scheme expenses                                          94,922          253,182                    -                -
    Salary and payroll costs                                      2,664,288        2,489,255        2,664,288        2,489,255
    Grants, projects and legal                                    4,192,711        4,569,129        4,192,711        4,569,129
    Administration                                                1,577,842        1,595,310        1,273,222        1,461,701
    Operating lease rental expense                                  312,243          277,593          312,243          277,593
    Superannuation contributions                                    229,948          301,277          229,948          301,277
    Scheme management fee                                         1,784,408        1,631,666                    -                -
    Meetings and seminars                                         1,021,785          789,684        1,021,785          789,684
    Depreciation leasehold improvements                              46,762           17,921           46,762           17,921
    Depreciation furniture and equipment                             92,384           78,554           92,384           78,554
    Depreciation motor vehicles                                      84,385          100,648           84,385          100,648
    Amortisation of website, educational programs & trademarks       34,017           39,813           34,017           39,813
    Board of management expenses                                    199,579          196,166          199,579          196,166
    ALGA membership                                                 330,961          315,711          330,961          315,711
    TOTAL EXPENDITURE                                            43,539,352       43,749,511       10,482,285       10,637,452

6   LEASING COMMITMENTS
    Operating lease commitments, being for lease of
    new OCE and OCE colour copiers
    Not later than one year                                          29,216           11,186           29,216           11,186
    Later than one year but not later than five years               102,256                    -      102,256                    -
    TOTAL LEASE COMMITMENT                                          131,472           11,186          131,472           11,186


    Operating lease commitments, being for lease of
    leasehold premises:
    Not later than one year                                         276,485          264,976          276,485          264,976
    Later than one year but not later than five years             1,557,433        1,493,325        1,557,433        1,493,325
    Later than five years                                           230,159          594,209          230,159          594,209
    TOTAL LEASE COMMITMENT                                        2,064,077        2,352,510        2,064,077        2,352,510



7   AUDITOR’S REMUNERATION
    Amounts received or due and receivable for audit services:
    Audit services                                                  115,212           65,097           35,882           22,000
    Tax Compliance                                                   11,440                    -                -                -
                                                                    126,652           65,097           35,882           22,000




                                                                                                                           MAV FINANCIAL REPORT 2006/07   73
         NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


                                                                                          CONSOLIDATED
                                                                                      2007              2006
                                                                        NOTE                 $                 $



     8    SCHEME MANAGEMENT FEES
          Scheme management fees are paid to the scheme
          manager for:
          Risk management and administrative services                   5(b)     1,784,408         1,631,666
          Claims management (included in claims expenses)               5(a)     1,459,970         1,424,195
          TOTAL SCHEME MANAGEMENT FEES                                           3,244,378         3,055,861



     9    NOTES TO STATEMENT OF CASH FLOWS
          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 and cash equivalents at balance date as shown
         in the statement of cash flows are reconciled to the
         related items in the balance sheet as follows:
                                                                                          CONSOLIDATED                  MAV - GENERAL FUND
                                                                                      2007              2006            2007           2006
                                                                                              $                $               $             $

          Cash                                                                   8,091,856        11,155,857       4,489,475       4,063,005
          Other financial assets                                                18,281,098        13,984,345                   -               -
          TOTAL CASH AND CASH EQUIVALENTS                                       26,372,954        25,140,202       4,489,475       4,063,005



     (b) Reconciliation of net cash used in operating
         activities to operating surplus/(deficit)
          Surplus/(deficit) for year                                             3,307,353         1,657,531         675,958       (487,358)
          Capital return to members                                      2(t)   (5,500,000)                    -               -               -
          Depreciation & amortisation                                              257,547           236,936         257,547        236,936
          (Surplus)/deficit on disposal of assets                                  (12,835)          (24,634)        (12,835)        (24,634)
          Changes in assets and liabilities
          (Increase)/decrease in accounts receivable                    2(p)     8,275,754           167,738       (659,557)        208,526
          (Increase)/decrease in prepayments                                       168,595            59,293         168,595          59,293
          Increase/(decrease) in accounts payable                                  326,278           (69,684)        232,207       (226,929)
          Increase /(decrease) in provision for employee entitlements               46,378           175,486          46,378        175,486
          Increase/(decrease) in outstanding claims                     2(o)    (8,209,750)       (3,422,975)                  -               -
          Increase/(decrease) in accrued revenue                                 2,995,263           773,797         140,008          25,675
          Increase/(decrease) in other liabilities                                 (22,222)          (21,371)        (22,222)        (21,371)
          CASH FLOWS FROM OPERATIONS                                             1,632,361          (467,883)        826,079         (54,376)




74       MAV FINANCIAL REPORT 2006/07
    NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


                                                                                  CONSOLIDATED              MAV - GENERAL FUND
                                                                               2007             2006        2007          2006
                                                              NOTE                    $            $               $             $


10 RECEIVABLES
   Future reinsurance and other recoveries receivable          2(p)     67,763,949        78,423,222
   Discount to present value                                           (11,634,968) (13,146,356)
                                                                        56,128,981        65,276,866
   Premiums receivable                                  2(n) & 2(s)     20,989,701        20,744,302
   Other receivables                                                     3,302,176         2,709,985   1,253,407       593,850
   TOTAL RECEIVABLES                                                    80,420,858        88,731,153   1,253,407       593,850
   Represented by:
   CURRENT                                                              36,822,332        40,764,031   1,253,407       593,850
   NON-CURRENT                                                          43,598,526        47,967,122               -             -
   TOTAL                                                                80,420,858        88,731,153   1,253,407       593,850



11 PREMIUMS IN ADVANCE
   Contributions billed in advance                              2(s)    30,024,265        27,169,013               -             -



12 PROPERTY, PLANT AND EQUIPMENT
   Leasehold improvements - at cost                                        598,123           404,008    598,123        404,008
   Less accumulated depreciation                                           426,417           379,655    426,417        379,655
                                                                           171,706            24,353    171,706         24,353
   Furniture and equipment - at cost                                       484,637           468,642    484,637        468,642
   Less accumulated depreciation                                           441,885           400,502    441,885        400,502
                                                                             42,752           68,140      42,752        68,140
   Motor vehicles - at cost                                                411,310           505,495    411,310        505,495
   Less accumulated depreciation                                             94,720          107,300      94,720       107,300
                                                                           316,590           398,195    316,590        398,195
   Software and website                                                    119,184           112,584    119,184        112,584
   Less accumulated amortisation                                           112,899            97,772    112,899         97,772
                                                                              6,285           14,812       6,285        14,812
   Information technology equipment- at cost                               446,127           423,002    446,127        423,002
   Less accumulated depreciation                                           365,754           318,487    365,754        318,487
                                                                             80,373          104,515      80,373       104,515
   TOTAL PROPERTY, PLANT AND EQUIPMENT                                     617,706           610,015    617,706        610,015




                                                                                                                           MAV FINANCIAL REPORT 2006/07   75
     NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


                                                                     CONSOLIDATED               MAV - GENERAL FUND
                                                                 2007            2006           2007            2006
                                                                         $           $                 $             $


      12 PROPERTY, PLANT AND EQUIPMENT
      (CONTINUED)

      Reconciliations of the carrying amounts of property,
      plant and equipment at the beginning and end of
      the financial year.
      LEASEHOLD IMPROVEMENTS
      Movements during the year
      Beginning of year                                        24,353          35,273         24,353          35,273
      Additions                                               194,115           7,000        194,115           7,000
      Depreciation                                            (47,762)        (17,920)       (47,762)        (17,920)
      End of year                                             171,706          24,353        171,706          24,353


      FURNITURE AND EQUIPMENT
      Movements during the year
      Beginning of year                                        68,140          99,981         68,140          99,981
      Additions                                                15,995          12,906         15,995          12,906
      Write offs                                                         -       (500)                  -       (500)
      Depreciation                                            (41,383)        (44,247)       (41,383)        (44,247)
      End of year                                              42,752          68,140         42,752          68,140


      MOTOR VEHICLES
      Movements during the year
      Beginning of year                                       398,195         407,821        398,195         407,821
      Additions                                               140,633         224,614        140,633         224,614
      Disposals                                              (137,853)       (133,593)      (137,853)       (133,593)
      Depreciation                                            (84,385)       (100,647)       (84,385)       (100,647)
      End of year                                             316,590         398,195        316,590         398,195


      INFORMATION TECHNOLOGY EQUIPMENT
      Movements during the year
      Beginning of year                                       104,515                   -    104,515                   -
      Additions                                                23,126         135,089         23,126         135,089
      Depreciation                                            (47,268)        (30,574)       (47,268)        (30,574)
      End of year                                              80,373         104,515         80,373         104,515


      SOFTWARE AND WEBSITE
      Movements during the year
      Beginning of year                                        14,812          35,766         14,812          35,766
      Additions                                                  6,600                  -      6,600                   -
      Amortisation                                            (15,127)        (20,954)       (15,127)        (20,954)
      End of year                                                6,285         14,812          6,285          14,812




76   MAV FINANCIAL REPORT 2006/07
    NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


                                                                                CONSOLIDATED                  MAV - GENERAL FUND
                                                                            2007             2006            2007              2006
                                                                                  $              $                  $               $


13 INTANGIBLE ASSETS
   Trademarks and intellectual property                                 288,546          118,718         288,546           118,718
   Less accumulated amortisation                                        (64,329)         (41,707)        (64,329)          (41,707)
                                                                        224,217            77,011        224,217            77,011

   Reconciliation of the carrying amounts of intangible
   assets at the beginning and end of the financial year
   INTANGIBLE ASSETS
   Movement during the year
   Beginning of year                                                     77,011            98,368          77,011           98,368
   Additions                                                            169,828             1,234        169,828              1,234
   Amortisation                                                         (22,622)         (22,591)        (22,622)          (22,591)
   End of year                                                          224,217            77,011        224,217            77,011
   DESCRIPTION OF INTANGIBLE ASSETS
   Trade marks and intellectual property costs are carried at cost less accumulated amortisation. These intangible assets have been assessed as
   having a finite life and are amoritised using the straight line method over a period of five to ten years. The amortisation has been recognised in
   the income statement in the line item ‘Amortisation’. If an impairment indication arises, the recoverable amount is estimated and an impairment
   loss is recognised to the extent that the recoverable amount is lower than the carrying amount. An electronic data management system was
   installed during the year.



14(a) OUTSTANDING CLAIMS
                                                                                CONSOLIDATED
                                                                            2007             2006
                                                                                  $              $

   Central estimate                                                 67,448,523        76,331,070
   Discount to present value                                       (11,339,489) (13,010,444)
                                                                    56,109,034        63,320,626
   Claims handling costs                                             2,694,341         3,049,643
   Risk margin                                             14(b)     1,474,444         2,117,300
   TOTAL OUTSTANDING CLAIMS                                         60,277,819        68,487,569
   Comprising:
   Current                                                          15,593,966        15,830,519
   Non-current                                                      44,683,853        52,657,050
   TOTAL CLAIMS PROVISION                                   2(o)    60,277,819        68,487,569



14(b) RISK MARGIN - PROCESS FOR DETERMINING RISK MARGIN
   Figures for private insurers published by the Australian Prudential Regulatory Authority in October 2005 showed an average risk margin of
   15.7% for public and product liability outstanding claims and 11.3% for professional indemnity. Based on these averages, and on three actuarial
   publications, Cumpston Sarjeant Pty Ltd, the appointed actuary, recommended that risk margins be adopted intended to give an overall risk
   margin of 15% for outstanding claims, in the absence of reinsurance.
   After allowing for the extent of reinsurance for each year, Cumpston Sarjeant Pty Ltd calculated risk margins for each year, in total being 1.7% of
   gross outstanding claims. They recommended a risk margin of 20% for the net unexpired risk liability.
   These risk margins are likely to give a probability of about 75% that the provisions including the risk margins will proved adequate to meet the
   relevant liabilities.




                                                                                                                                MAV FINANCIAL REPORT 2006/07   77
      NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


                                                                                2007                                         2006
                                                                GROSS     REINSURANCE                NET          GROSS   REINSURANCE               NET
                                                                    $               $                  $              $             $                 $

     14(c) RECONCILIATION OF MOVEMENT IN
         DISCOUNTED OUTSTANDING
         CLAIMS LIABILITY
        Outstanding claims brought forward               68,487,569       65,276,866         3,210,703     71,910,544     69,580,042        2,330,502
        Changes in assumptions (i)                       10,886,709       12,570,678        (1,683,969)     (1,234,000)   (1,264,000)           30,000
        Increase in claims incurred/                     (7,566,894)      (9,147,885)        1,508,991     12,340,894       8,868,111        3,472,783
        recoveries anticipated
        Incurred claims recognised in                     3,319,815           3,422,793       (102,978)    11,106,894       7,604,111        3,502,783
        income statement
        Claim payments/recoveries during the year (11,529,565) (12,570,678)                  1,041,113 (14,529,869) (11,907,287)           (2,622,582)
        Outstanding claims carried forward               60,277,819       56,128,981         4,148,838     68,487,569     65,276,866         3,210,703


        (i) Significant changes in assumptions relate to the changes in the actuarial calculation of future investment earnings and the average delay in
        reinsurance receipts.


                                                                                2007                                         2006
                                                        CURRENT YEAR           PRIOR YEAR          TOTAL   CURRENT YEAR      PRIOR YEAR           TOTAL
                                                                   $                    $              $             $               $               $

     15 NET CLAIMS INCURRED
        INSURANCE
        Gross claims and related expenses -
        undiscounted                                     14,387,239 (11,270,089)             3,117,150     20,858,271     (7,497,481)       13,360,790
        Discount                                         (2,777,861)          4,448,815      1,670,954      (3,995,548)     1,741,652       (2,253,896)
        Gross claims and related expenses -
        discounted                                       11,609,378       (6,821,274)        4,788,104     16,862,723     (5,755,829)       11,106,894
        Reinsurance and other recoveries -
        undiscounted                                   (10,828,628)       11,440,165           611,537 (17,342,365)         4,875,876       (12,466,489)
        Discount                                          1,428,183       (5,476,017)       (4,047,834)      3,212,803      1,649,575       4,862,378
        Reinsurance and other recoveries -
        discounted                                       (9,400,445)          5,964,148     (3,436,297) (14,129,562)        6,525,451       (7,604,111)
        NET CLAIMS INCURRED                               2,208,933           (857,127)      1,351,807       2,733,161        769,622       3,502,783




78    MAV FINANCIAL REPORT 2006/07
    NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


16 CLAIMS DEVELOPMENT TABLE
    - CIVIC MUTUAL PLUS
   ACCIDENT YEAR                                       2003              2004             2005          2006             2007                 TOTAL
                                                              $                 $             $                $                 $                   $

   GROSS ESTIMATE OF ULTIMATE CLAIMS COST
   At end year of accident                      20,194,583        20,602,497        18,375,690    19,426,057       12,918,950
   One year later                               18,948,794        18,799,966        17,546,887    14,414,065
   Two years later                              16,345,749        16,772,897        17,554,596
   Three years later                            14,715,087        15,229,343
   Four years later                             11,869,840
   Current estimate of cumulative claims cost   11,869,840        15,229,343        17,554,596    14,414,065       12,918,950         71,986,794
   Cumulative payments                          (8,523,743)       (6,897,259)       (2,762,401)    (969,716)         (228,561) (19,381,680)
   Outstanding claims - undiscounted             3,346,097         8,332,084        14,792,195    13,444,349       12,690,389         52,605,115
   Discount                                                                                                                          (11,172,349)
   Claims handling expense                                                                                                             2,104,205
   2002 and prior                                                                                                                     16,632,848


   TOTAL GROSS OUTSTANDING CLAIMS
   - CIVIC MUTUAL PLUS                                                                                                               60,169,819
   MUNICIPAL OFFICERS’ FIDELITY GUARANTEE FUND
   - TOTAL GROSS OUTSTANDING CLAIMS                                                                                                       108,000
   COMBINED GROSS OUTSTANDING CLAIMS
   refer note 14(a)                                                                                                                  60,277,819


   ACCIDENT YEAR                                       2003              2004             2005          2006             2007                 TOTAL
                                                              $                 $             $                $                 $                   $

   NET ESTIMATE OF ULTIMATE CLAIMS COST
   - CIVIC MUTUAL PLUS
   At end year of accident                       2,035,718         3,048,847         2,125,606     2,182,437        2,103,826
   One year later                                1,667,854         2,431,922         1,847,897     2,104,523
   Two years later                                 991,622         1,245,405         2,191,811
   Three years later                             1,156,060         1,280,196
   Four years later                              1,555,335
   Current estimate of cumulative claims cost    1,555,335         1,280,196         2,191,811     2,104,523        2,103,826          9,235,691
   Cumulative payments                            (974,612)         (332,963)         (811,680)    (295,414)         (138,816)        (2,553,484)
   Outstanding claims - undiscounted               229,609           561,443           675,455     1,192,993        1,965,010          6,682,207
   Discount                                                                                                                           (4,041,855)
   Claims handling expense                                                                                                                267,288
   2002 and prior                                                                                                                      1,133,198


   TOTAL NET OUTSTANDING CLAIMS
   - CIVIC MUTUAL PLUS                                                                                                                 4,040,838
   MUNICIPAL OFFICERS’ FIDELITY GUARANTEE FUND
   - TOTAL NET OUTSTANDING CLAIMS                                                                                                         108,000
   COMBINED NET OUTSTANDING CLAIMS
   refer note 14(c)                                                                                                                    4,148,838




                                                                                                                           MAV FINANCIAL REPORT 2006/07   79
      NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


                                                                                   CONSOLIDATED                 MAV - GENERAL FUND
                                                                               2007             2006            2007             2006
                                                              NOTE                   $                $                $             $


     17 PROVISIONS FOR EMPLOYEE ENTITLEMENTS
        The aggregate amount of employee entitlement
        liability is comprised of:
        Provisions (current)                                               486,678          438,928         486,678          438,928
        Provisions (non-current)                                           142,194          143,566         142,194          143,566
        TOTAL EMPLOYEE ENTITLEMENTS                                        628,872          582,494         628,872          582,494
        Meets AIFRS requirements                                2(b)


        Reconciliation of the carrying amounts of provision
        for employee entitlements at the beginning and
        end of the financial year
        EMPLOYEE ENTITLEMENTS
        Movement during the year
        Beginning of year                                                  582,494          407,008         582,494          407,008
        Additions                                                            46,378         175,486           46,378         175,486
        End of year                                                        628,872          582,494         628,872          582,494

     18 SUPERANNUATION CONTRIBUTION
        The Municipal Association of Victoria contributes in respect of its employees to both the Vision Super Superannuation Fund’s Accumulation Fund
        and the Defined Benefits Fund.
        The amount of superannuation contributions paid by the Municipal Association of Victoria to the Vision Super Accumulation Fund and the
        Defined Benefits Fund during the reporting period was $229,948 (2006 $301,277). The Municipal Association of Victoria contributes to the
        Accumulation Fund based on a fixed percentage of employee earnings in accordance with the Superannuation Guarantee legislation - 9% in
        2007 and 9% in 2006. 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 fund’s liability for accrued benefits for defined benefit
        and defined contribution members was determined in the 31 December 2005 actuarial investigation carried out by Local Authorities Super
        pursuant to the requirements of Australian Accounting Standard AASB 2005-13. The actuarial investigation calculated that the Defined Benefits
        Superannuation Fund was in surplus.

     19 GOVERNMENT GRANTS
        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 1004. At the end of the financial year the
        Association had commitments to expend grants totalling approximately $3,333,891 (2006 $2,388,437) after deducting an estimate of costs of
        administering the grants.
                                                                                   CONSOLIDATED                 MAV - GENERAL FUND
                                                                               2007             2006            2007             2006
                                                                                      $               $                $             $

        RECOGNISED IN INCOME STATEMENT
        Grant income                                                     5,590,668        4,935,162       5,590,668        4,935,162
        The Association does not receive any other government assistance.




80    MAV FINANCIAL REPORT 2006/07
    NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


20 FINANCIAL INSTRUMENTS INTEREST RATE AND CREDIT 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                       MAV - GENERAL FUND

                                                                           Non-          Floating                Non-         Floating
                                                                        interest          interest             interest        interest
                                                                        earning               rate             earning             rate
                                                                                                        2007
                                                                                 $                 $                  $                 $


   FINANCIAL ASSETS
   Bank                                                                119,926         7,971,926           119,926          4,369,549
   Cash investments                                                              -    18,281,098                      -                  -
   Receivables                                                     80,420,858                       -    1,253,407                       -
   TOTAL FINANCIAL ASSETS                                          80,540,784         26,253,024         1,373,333          4,369,549
   Weighted average interest rate                                                          5.74%                                6.22%

   FINANCIAL LIABILITIES
   Outstanding claims                                              60,277,819                       -                 -                  -
   Unearned premiums/subscriptions                                 30,278,088                       -      253,823                       -
   Accounts payable                                                 4,127,098                       -    1,055,260                       -
   TOTAL FINANCIAL LIABILITIES                                     94,683,005                       -    1,309,083                       -
   Weighted average interest rate                                                             0%                                    0%
   The carrying amounts of financial assets and financial liabilities represent their approximate net fair value.


                                                                                CONSOLIDATED                      MAV - GENERAL FUND

                                                                           Non-           Floating                Non-         Floating
                                                                         Interest          Interest            Interest         Interest
                                                                         Earning              Rate             Earning             Rate
                                                                                                        2006
                                                                                 $                 $                  $                  $


   FINANCIAL ASSETS
   Bank                                                                  47,902       11,107,955               47,902       4,015,103
   Cash investments                                                               -   13,984,345                        -                -
   Receivables                                                      88,731,153                      -      593,850                       -
   TOTAL FINANCIAL ASSETS                                           88,779,055        25,092,300           641,752          4,015,103
   Weighted average interest rate                                                          5.56%                                5.54%

   FINANCIAL LIABILITIES
   Outstanding claims                                               68,487,569                      -                   -                -
   Unearned premiums/subscriptions                                  27,169,013                      -      113,815                       -
   Accounts payable                                                  3,835,357                      -      823,056                       -
   TOTAL FINANCIAL LIABILITIES                                      99,491,939                      -      936,871                       -
   Weighted average interest rate                                                              0%                                   0%
   The carrying amounts of financial assets and financial liabilities represent their approximate net fair value.
   All maturity dates are within twelve months.




                                                                                                                                   MAV FINANCIAL REPORT 2006/07   81
      NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


     21 INSURANCE CONTRACTS - RISK MANAGEMENT

        Risk management objectives and policies for mitigating insurance risk
        The Association’s local government mutual liability scheme (trading as Civic Mutual Plus) is established by legislation contained in the Municipal
        Association Act 1907. Membership is available to local government councils and prescribed bodies. The scheme operates in Victoria and
        Tasmania to provide a claims management service to members of their potential and actual liabilities. A member may seek indemnity from the
        scheme in respect of a claim.
        Actuarial models, using information from the scheme’s management information systems are used to confirm contributions and monitor claim
        patterns. Past experience and statistical methods are used as part of the process.
        The principal risk is that the frequency and severity of claims is greater than expected. Civil liability risk events are, by their nature, random, and
        the actual number and size of events during any one year may vary from those estimated using established statistical techniques.

        Objectives in managing risk arising from insurance and policies for mitigating those risks
        The scheme has an objective to control insurance risk thereby reducing the volatility of its operating surplus. In addition to the inherent
        uncertainty of civil liability risks, which can lead to variability in the loss experience, operating surpluses can also be affected by external factors,
        such as competition and movements in asset values.
        The scheme relies on a strong relationship with its members and actively encourages them to adopt practices of risk management that reduce the
        incidence of claims to the scheme.

        Reinsurance strategy
        The scheme adopts a conservative approach towards management of risk and does this by utilising various risk transfer options. The MAV
        Insurance Committee determines the level of risk, which is appropriate for the scheme having regards to ordinary concepts of prudence and
        regulatory constraints. The risk transfer arrangements adopted by the scheme include the utilisation of commercial reinsurance/excess
        arrangements.
        These risk transfer arrangements assist the scheme to limit exposures to large single claims and catastrophic events. These programs are
        reviewed each year to ensure they continue to meet the risk needs of the scheme.

        Terms and conditions of membership
        Membership to the scheme is offered to eligible bodies and renewed annually on 30 June. Payment of the annual contribution confirms
        continuation of membership. Termination of membership is subject to at least 90-days written notice of intention as laid out by the scheme rules.

        Product features
        The scheme operates in Victoria and Tasmania. Should a claim be accepted the scheme provides indemnity to the member in respect of their
        civil liabilities for $5 million public/products liability and professional indemnity insurance, subject to any excess, for any claim incurred anywhere
        throughout the world.
        Operating surpluses arise from the total contributions charged to members less the amounts paid to cover claims and the expenses incurred by
        the scheme.

        Management of risks
        The key insurance risks that affect the scheme are contribution risk and claims experience risk.
        Contribution risk is the risk that the scheme does not charge contributions appropriate for the indemnity cover it provides. The scheme partially
        manages contribution risk through its proactive approach to risk management that addresses all material risks both financial and non-financial.
        There are no specific terms and conditions that are expected to have a material impact on the financial statements.
        Claims experience risk is managed through the non-financial risk assessment and risk management and reinsurance management process.
        Claims experience is monitored on an ongoing basis to ensure that any adverse trending is addressed. The scheme is able to reduce the claims
        experience risk of severe losses through the reinsurance program, and by managing the concentration of insurance risks.

        Concentration of insurance risks
        Insurance risk is managed by taking a long-term approach to setting the annual contribution rates that eliminates price fluctuations, applying
        appropriate investment strategies, utilising reinsurance and maintaining an active statewide risk management profile. It is vital that the scheme
        keeps abreast of changes in the general economic, legal and commercial environment in which it operates.




82    MAV FINANCIAL REPORT 2006/07
     NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


    Interest rate risk
    The reinsurance indemnity contracts contain no clauses that expose the scheme directly to interest rate risk. The reinsurance contracts are long-
    term arrangements, reviewed and payable annually.

    Credit risk
    The scheme is exposed to credit risk on insurance contracts as a result of exposure to reinsurers. The credit risk to reinsurers is managed through
    the scheme regularly monitoring the financial rating of the reinsurers both prior to and during the reinsurance program.

22 ACCOUNTING ESTIMATES AND JUDGEMENTS
    The scheme makes estimates and judgements in respect of certain key assets and liabilities. Estimates and judgements are continually reviewed
    and are based on past experience and other factors, including expectations of future events that are believed to be reasonable under the
    circumstances. The key areas in which critical estimates and judgements are applied are described below.

a) Estimation of outstanding claims liability
    Provision is made at the year-end for the estimated cost of claims incurred but not settled at the balance sheet date, including the cost of claims
    incurred but not yet reported to the Scheme.
    The scheme takes all reasonable steps to ensure it has appropriate information regarding its claims exposure. However, given the uncertainty in
    establishing claims provisions, it is likely that the final outcome may be different from the original liability established.
    Provisions are calculated gross of all recoveries. A separate estimate is made of the amounts that will be recoverable from reinsurers and any
    third party.
    The determination of an appropriate outstanding claims provision involves:
    (i) establishing a case estimate for each reported claim at year-end taking into account legal advice where appropriate on larger claims
    (ii) a development allowance of 25% on the net outstanding balance of reported claims and confirmed as appropriate by the Actuary
    (iii) allowance for incurred but not reported claims as confirmed by the actuarial review on 30 June 2007
    (iv) an allowance of 4% for claim settlement expenses, as assumed by the actuary
    (v) allowances for discount at 6.45%, as assumed by the actuary
    (vi) a risk margin of 20% of net outstanding claims after the effect of reinsurance has been applied, as assumed by the actuary.
    Details of specific actuarial assumptions used in deriving the outstanding claims liability at year-end are detailed in note 23.

b) Assets arising from reinsurance contracts
    Assets arising from reinsurance contracts were estimated for each accident year, from the payments to date and estimated outstanding claims
    history at 30 June 2007, taking into account the reinsurance terms applying to that accident year. In calculating the present value of reinsurance
    recoveries, allowance was made for an average recovery delay of 3.5 months, as assumed by the actuary.
    In accordance with the actuarial recommendations, an allowance was made for non-recoveries from relevant insurers.



23 ACTUARIAL ASSUMPTIONS AND METHODS

    Actuarial assumptions
    The following assumptions have been made in determining the outstanding claims liabilities:


                                                           2007             2006

    KEY ACTUARIAL ASSUMPTIONS
    Case estimate development                               25%              25%
    Wage inflation                                            4%              4%
    Claim administration expense                              4%              4%
    Superimposed inflation                                    2%              2%
    Discount rate                                         6.45%             5.9%
    Risk margin                                             20%              20%




                                                                                                                                MAV FINANCIAL REPORT 2006/07   83
      NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


     23 ACTUARIAL ASSUMPTIONS AND METHODS (CONTINUED)

        Process used to determine actuarial assumptions
        A description of the processes used to determine the above key actuarial assumptions is provided below.
        Civic Mutual Plus (CMP) has provided public and professional indemnity insurance to local government bodies in Victoria and Tasmania and
        other bodies constituted under any Act for any public or local governing purpose since 30/9/1993. The actuary was supplied aggregate data on
        claims from each year’s cover at each balance date, together with details for each claim at various dates, including 30/6/2007. The individual
        claim payments and case estimates reconciled closely with totals in CMP’s financial statements for each year of cover. The actuary made
        estimates of gross outstanding claims with four differential actuarial methods - payments per person incurred, developed claims incurred,
        developed case estimates and estimated claim incurred but not reported. The actuary selected the last of these methods, including a 25%
        allowance for case estimate development, for use in estimating outstanding claims. Payments were projected with a payment pattern, based on
        past experience, assuming an average delay of 4.8 years from the middle of the accident year. Estimates of outstanding non-reinsurance
        recoveries were made by a recoveries per person insured method.
        During the 2001 financial year two of the participants in the Scheme’s reinsurance program FAI/ HIH and Independent were placed into the
        hands of liquidators. These companies were part of the reinsurance programs in fund years from 1994 to 1998. The MAV Insurance Committee
        continues 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. In accordance with the committee’s prudent approach to reserving within the actuarial calculation of the central
        estimate of reinsurance recoveries, the estimated future recoveries from FAI/HIH were assumed to be 10% of the debt due. The MAV is currently
        in negotiation with The Underwriting Insurance Company (TUIC) of the UK, a company under management runoff, regarding its reinsurance
        obligations to Civic Mutual Plus and its ability to meet liabilities to Civic Mutual Plus. At the date of this report there has been no resolution to
        this issue. Within the actuarial calculation of the central estimate of reinsurance, the estimated future recoveries from TUIC were assumed to be
        75% of the debt due.
        Estimates of reinsurance recoveries were made from projected gross payments and non-reinsurance recoveries, allowing for the different
        insurance treaties applying to each year and assuming an average 3.5 months’ delay in the receipt of reinsurance recoveries . Recoveries from
        FAI/HIH were assumed to be 10% and Independent were assumed to be zero. Recoveries from TUIC were assumed to be 75% of those due.
        Based on the yields of medium term Commonwealth bonds at 30/6/2007 the discount rate was assumed to be 6.45% pa. Based on the actual
        expense rates of Civic Mutual Plus, claim administration expenses were assumed to be 4% of the net claim payments.
        Based on averages for private insurers by APRA, and on three actuarial publications, the actuary recommended that risk margins be adopted to
        give an overall risk margin of 15% for outstanding claims, in the absence of reinsurance. After allowing for the extent of reinsurance for each
        year, the actuary calculated risk margins for each year, in total being 1.7% of gross outstanding claims liabilities. The actuary considered that
        these risk margins are likely to give a probability of about 75% and that the provisions including the risk margins will prove adequate to meet the
        relevant liabilities. Unexpired risk liabilities were estimated by bringing gross claim incurred estimates for each of the 10 years to 30/6/2003 to
        2007/08 values, using Victorian average weekly earnings adjusting for membership changes and fitting a trend line to the 10-year period. The
        trend value for 2002/03 was projected to 2007/08, assuming a 20% drop due to tort reform, superimposed inflation at 2% pa and population
        growth at 1% pa. After allowing for reinsurance costs and a risk margin of 20%, no premium deficiency was apparent.




        VARIABLE                                      IMPACT OF MOVEMENT IN VARIABLE
        Wage inflation                                Expected future payments are inflated to take account of inflationary increases. An increase or
                                                      decrease in the assumed levels of economic inflation would have a corresponding impact on claims
                                                      expense, with particular reference to longer tail claims.
        Superimposed inflation                        In addition to the general economic inflation rate an amount is superimposed to take account of non-
                                                      economic inflationary factors, such as increases in court awards. Such rates of superimposed inflation
                                                      are specific to the model adopted. An increase or decrease in the assumed levels of superimposed
                                                      inflation would have a corresponding impact on claims expense, with particular reference to longer
                                                      tail claims.
        Discount rate                                 The outstanding claims liability is calculated by reference to expected future payments. These
                                                      payments are discounted to adjust for the time value of money. An increase or decrease in the
                                                      assumed discount rate will have an opposing impact on total claims expense.
        Case estimate development                     Case estimates are initially established in accordance with established guidelines and by reference
                                                      to the known facts. Where new information becomes available the initial case estimate will change.
                                                      This development movement is applied to open claims and will have a corresponding impact on
                                                      claims expense.




84    MAV FINANCIAL REPORT 2006/07
    NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


23 ACTUARIAL ASSUMPTIONS AND METHODS (CONTINUED)

   IMPACT OF CHANGES IN KEY VARIABLES

   CIVIC MUTUAL PLUS
   Variable                                        Current Rate         Change        Operating         Operating         Total accumulated
                                                                        variable     surplus at 30     surplus at 30    funds after the impact
                                                                           to         June 2007         June 2012        of applying variable
                                                          %                 %              $                 $                     $

   Base value at 30 June 2007                                                         2,474,744       23,666,000             7,209,000
   Interest rate pa                                      6.45%            9.45%       2,430,744       27,750,000             7,165,000
                                                                          3.45%       2,551,744       20,103,000             7,286,000
   Inflation rate pa                                          4%              7%      2,470,744       23,232,000             7,205,000
                                                                              1%      2,479,744       24,088,000             7,214,000
   TUIC recovery                                            75%            100%       4,625,744       25,852,000             9,360,000
                                                                             50%        789,744       21,586,000             5,524,000
   Contribution increase                                      0%            2.5%      2,474,744       31,049,000             7,209,000
                                                                           -2.5%      2,474,744       16,558,000             7,209,000
   Reinsurance premium increase                               0%            2.5%      2,474,744       17,969,000             7,209,000
                                                                           -2.5%      2,474,744       29,151,000             7,209,000




24 RENT-FREE PERIOD
   During the 2004 financial year the Association negotiated a new 10-year lease on the property at Level 12, 60 Collins Street Melbourne with the
   Reserve Bank of Australia. The lease commenced on 1 March 2004 and included a 15-month rent-free period up to 31 May 2005.
   In accordance with ‘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.




                                                                                                                               MAV FINANCIAL REPORT 2006/07   85
                                                                                        25 SEGMENT INFORMATION – PRIMARY SEGMENT
                                                                                           SEGMENT                 TYPES OF PRODUCTS AND SERVICES
                                                                                           Insurance               Insurance including public liability, professional liability, product liability and fidelity
                                                                                                                   guarantee.
                                                                                           Grants                  Obtains Federal and State government grants and expends these grants on projects for the betterment of both local government and the community in
                                                                                                                   Victoria.
                                                                                           Association             Local Government Industry group and represents and provides support to Local Government and its communities in
                                                                                                                   Victoria.
                                                                                                                                                                                   LOCAL GOVERNMENT
                                                                                           BUSINESS SEGMENTS                                      INSURANCE                             GRANTS                   ASSOCIATION             ELIMINATIONS                     CONSOLIDATED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007




                                                                                                                                           2007              2006                2007            2006          2007        2006        2007           2006               2007          2006
                                                                                                                                              $                 $                                                 $           $                                             $             $
                                                                                           OPERATING
                                                                                           REVENUE
                                                                                           Sales to customers outside the          36,271,322         35,804,092        5,659,818         4,962,100       4,915,564   4,640,850                                    46,846,704    45,407,042
                                                                                           group
                                                                                           Inter-segment                                 73,906            73,908                                         1,820,615   1,841,907   1,894,521       1,915,815                                   -
                                                                                           sales
                                                                                           TOTAL SEGMENT                           36,345,228         35,878,000        5,659,818         4,962,100       6,736,179   6,482,757   1,894,521       1,915,815
                                                                                           REVENUE
                                                                                           TOTAL CONSOLIDATED REVENUE                                                                                                                                              46,846,704    45,407,042
                                                                                           SEGMENT                                   2,631,396         2,144,889          649,749          (503,585)         26,208      16,227               -               -     3,307,353     1,657,531
                                                                                           RESULT
                                                                                           CONSOLIDATED ENTITY
                                                                                           SURPLUS                                                                                                                                                                  3,307,353     1,657,531
                                                                                           FROM ORDINARY
                                                                                           ACTIVITIES
                                                                                           ASSET
                                                                                           S
                                                                                           Segment                               101,253,537 109,382,572                4,388,891         3,120,196       2,549,728   2,633,279   (504,135)       (356,781) 107,688,021 114,779,266
                                                                                           assets
                                                                                           TOTAL                                                                                                                                                                  107,688,021 114,779,266
                                                                                           ASSETS
                                                                                           LIABILITI
                                                                                           ES
                                                                                           Segment                                 93,576,523         98,836,956        1,229,544           620,595       1,150,813   1,250,573   (504,135)       (356,781) 95,452,745 100,351,343
                                                                                           liabilities
                                                                                           TOTAL                                                                                                                                                                   95,452,745 100,351,343
                                                                                           LIABILITIES
                                                                                           OTHER SEGMENT INFORMATION
                                                                                           Acquisition of property, plant
                                                                                           and                                                    -                -              280                 -    550,019      217,154               -               -       550,299       217,154
                                                                                           equipment and other non-current
                                                                                           assets
                                                                                           Depreciatio                                            -                -        14,956           28,989        242,591      207,947               -               -       257,547       236,936
                                                                                           n
                                                                                           GEOGRAPHICAL SEGMENTS




                                                                                                                                                                                                                                                                                                  MAV FINANCIAL REPORT 2006/07
                                                                                           All of the Association’s business segments operate only in the geographical area of
                                                                                           Australia.




                                                                                                                                                                                                                                                                                                  86
    NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


26 CONTINGENT ASSET
   Reinsurance share of profit
   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 local government claims experience nationally. 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.
   The actuary has calculated the potential value of the CMP scheme’s profit share for the first four years of the five-year program, at balance date,
   to be $12.5 million (2006 $7.139 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 2007 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.




27 REMUNERATION OF KEY MANAGEMENT PERSONNEL
   The MAV employed 35 key management personnel and provided these personnel with short-term employee benefits and post
   employment benefits.
                                                                                CONSOLIDATED                   MAV - GENERAL FUND
                                                                            2007             2006             2007              2006
                                                                                   $              $                  $               $

   Short-term employment benefits                                       715,939           700,339         702,079           684,389
   Post-employment benefits                                               46,912           76,722           46,912           76,722



   Loans to directors
   No loans were made to or are payable by directors.

   Other transactions
   There were no other material transactions with directors.

   Insurance
   The activities of the MAV board members are covered by the MAV directors’ and officers’ indemnity insurance policy effected by the Municipal
   Association of Victoria



28 RELATED PARTIES
   The Municipal Association of Victoria is a body corporate established under the Municipal Association Act of 1907 to provide services for and
   represent 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 Deed of Establishment provides for the MAV to appoint a committee of management
   (MAVIC) to be responsible for the administration of the scheme. Mr A. Nye is the Chairman of the Victorian Managed Insurance Authority (VMIA)
   and Mr R. Farrell is a board director of VMIA. The MAV and the VMIA from time to time have conflicting interests in insurance claims matters.
   Any such claims were settled on commercial terms without the involvement of these committee members. The discreet nature of these
   transactions is not material. There were no material-related party transactions during the year.




                                                                                                                                 MAV FINANCIAL REPORT 2006/07   87
     STATEMENT BY DIRECTORS
     In the opinion of the 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 2007;
(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.




     Richard Gross President                                                        Geoff Gough Director


     Melbourne
     26 September 2007




     STATEMENT BY AUDITORS
     AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF MUNICIPAL ASSOCIATION OF VICTORIA
     In relation to our audit of the financial report of Municipal Association of Victoria for the financial year ended 30 June 2007, to the best of my
     knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any
     applicable code of professional conduct.




     Ernst & Young                                                                  T.M. Dring Partner


     Melbourne
     26 September 2007




88   MAV FINANCIAL REPORT 2006/07
    CONSOLIDATED FINANCIAL REPORTS-
    INDEPENDENT AUDIT REPORT
    INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MUNICIPAL ASSOCIATION OF VICTORIA
    We have audited the accompanying financial report of Municipal Association of Victoria (“the Entity”), which comprises the balance sheet as at
    30 June 2007, and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary
    of significant accounting policies, other explanatory notes and the directors’ declaration of the consolidated entity comprising the company and
    the entities it controlled at the year’s end or from time to time during the financial year.

    Directors’ Responsibility for the Financial Report
    The directors of the entity are responsible for the preparation and fair presentation of the financial report in accordance with the Australian
    Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes
    establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material
    misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are
    reasonable in the circumstances. In Note 1, the directors also state that the financial report, comprising the financial statements and notes the
    consolidated/parent financial statements and notes, comply with International Financial Reporting Standards.

    Auditor’s Responsibility
    Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian
    Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan
    and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.
    An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures
    selected depend on our judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or
    error. In making those risk assessments, we consider internal controls relevant to the entity’s preparation and fair presentation of the financial
    report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
    effectiveness of the entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the
    reasonableness of accounting estimates made by the directors2, as well as evaluating the overall presentation of the financial report.
    We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

    Independence
    In conducting our audit we have met the independence requirements of the Corporations Act 2001. We have given to the directors of the
    company a written Auditor’s Independence Declaration, a copy of which is included in the directors’ report.

    Auditor’s Opinion
    In our opinion:
1. the financial report of Municipal Association of Victoria is in accordance with the Corporations Act 2001, including:
    (i) giving a true and fair view of the financial position of Municipal Association of Victoria and the consolidated entity at 30 June 2007 and of
    their performance for the year ended on that date; and
    (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001.
2. the consolidated/parent financial statements and notes or financial report also comply with International Financial Reporting Standards as
    disclosed in Note 1




    Ernst & Young                                                                  T.M. Dring Partner


    Melbourne
    26 September 2007




                                                                                                                               MAV FINANCIAL REPORT 2006/07   89
      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 government and its communities.

      Employees
      Average number of equivalent full-time employees during the year is 39.5 EFT.




90   MAV FINANCIAL REPORT 2006/07
       MAV
   INSURANCE
FINANCIAL REPORT
     2006/07




             MAV INSURANCE FINANCIAL REPORT 2006/07   91
    INCOME STATEMENT
    FOR THE YEAR ENDED 30 JUNE 2007
                                                               COMBINED                 CIVIC MUTUAL PLUS        MUNICIPAL OFFICERS’
                                                                                                                FIDELITY GUARANTEE FUND
                                                     2007               2006          2007           2006        2007            2006
                                    NOTE                   $                 $               $           $              $            $
    Premium revenue                     3    31,697,332 27,344,810 30,979,972 26,629,943                      717,360         714,867
    Catastrophe insurance expense           (24,034,726) (18,317,398)(23,624,671) (17,911,600)               (410,055)       (405,798)
    NET INCOME BEFORE CLAIMS                   7,662,606         9,027,412       7,355,301       8,718,343    307,305         309,069
    Claims expense                   4(a)     (4,779,785) (11,106,894) (4,691,135) (11,009,925)               (88,650)        (96,969)
    Reinsurance and other
    recoveries                          3      3,436,297         7,604,111       3,422,793       7,505,366     13,504           98,745
    NET CLAIMS EXPENSE                11      (1,343,488) (3,502,783) (1,268,342) (3,504,559)                 (75,146)           1,776


    UNDERWRITING RESULT                        6,319,118         5,524,629       6,086,959       5,213,784    232,159         310,845
    Investment income                   3      1,211,599           929,077       1,169,521        901,397      42,078           27,680
    Administration and general
    expenses                         4(b)     (4,899,321) (4,308,812) (4,781,736) (4,174,168)                (117,585)       (134,644)
    OPERATING SURPLUS
    (DEFICIT)                                  2,631,396         2,144,894       2,474,744       1,941,013    156,652         203,881




    BALANCE SHEET
    AS AT 30 JUNE 2007
    CURRENT ASSETS
    Cash Assets                      7(a)    21,883,474 21,077,195 21,310,431 20,662,556                      573,043         414,639
    Receivables                         8    35,771,537 40,338,253 35,346,695 39,704,933                      424,842         633,320
    TOTAL CURRENT ASSETS                     57,655,011 61,415,448 56,657,126 60,367,489                      997,885        1,047,959


    NON-CURRENT ASSETS
    Receivables                         8    43,598,526 47,967,122 43,598,526 47,967,122                                 -               -
    TOTAL NON-CURRENT
    ASSETS                                   43,598,526 47,967,122 43,598,526 47,967,122                                 -               -
    TOTAL ASSETS                            101,253,537 109,382,570100,255,652 108,334,611                    997,885        1,047,959


    CURRENT LIABILITIES
    Payables                                   3,274,439         3,180,371       3,237,329       3,117,321     37,110           63,050
    Premiums in advance                 9    30,024,265 27,169,012 29,639,839 26,603,800                      384,426         565,212
    Provision for claims
    Outstanding                    10(a)     15,593,966 15,830,519 15,485,966 15,722,519                      108,000         108,000
    TOTAL CURRENT LIABILITIES                48,892,670 46,179,902 48,363,134 45,443,640                      529,536         736,262


    NON-CURRENT LIABILITIES
    Provision for claims
    outstanding                    10(a)     44,683,853 52,657,050 44,683,853 52,657,050                                 -               -
    TOTAL NON-CURRENT
    LIABILITIES                              44,683,853 52,657,050 44,683,853 52,657,050                                 -               -
    TOTAL LIABILITIES                        93,576,523 98,836,952 93,046,987 98,100,690                      529,536         736,262
    NET ASSETS                                 7,667,014 10,545,618              7,208,665 10,233,921         468,349         311,697


    EQUITY                                     7,667,014 10,545,618              7,208,665 10,233,921         468,349         311,697

    The accompanying notes form an integral part of these statements.

92 MAV INSURANCE FINANCIAL REPORT 2006/07
STATEMENT OF CHANGES IN EQUITY
FOR YEAR ENDED 30 JUNE 2007
                                                             COMBINED                CIVIC MUTUAL PLUS           MUNICIPAL OFFICERS’
                                                                                                                FIDELITY GUARANTEE FUND
                                                   2007             2006           2007            2006           2007                2006
                                NOTE                     $                $               $               $              $                  $
Balance at beginning of year               10,545,618         8,400,724 10,233,921            8,292,908        311,697            107,816
Capital return to members          2(p)    (5,500,000)                    - (5,500,000)                   -               -                  -
Surplus/(deficit) from ordinary
activities                                  2,631,396         2,144,894       2,474,744       1,941,013        156,652            203,881
BALANCE AT END OF YEAR                      7,677,014 10,545,618              7,208,665 10,233,921             468,349            311,697




CASH FLOW STATEMENT
STATEMENT FOR THE YEAR ENDED 30 JUNE 2007
                                                             COMBINED                CIVIC MUTUAL PLUS           MUNICIPAL OFFICERS’
                                                                                                                FIDELITY GUARANTEE FUND
                                                   2007             2006           2007            2006           2007                2006
                                NOTE                     $                $               $               $              $                  $


CASH FLOW FROM
OPERATING ACTIVITIES
RECEIPTS
Premiums and fees                          32,889,560 32,907,052 32,108,656 32,070,990                         780,904            836,062
Investment income                           1,214,637           932,222       1,169,989         909,248         44,648              22,974
Reinsurance and other recoveries           12,954,093 12,427,791 12,940,589 12,336,046                          13,504              91,745


PAYMENTS
Suppliers                                 (34,237,795) (33,141,575)(33,557,143) (32,316,835)                  (680,652)         (824,740)
Claim payments                            (12,014,216) (13,538,998)(12,014,216) (13,475,090)                              -       (63,908)
NET CASH PROVIDED BY/
(USED IN) OPERATING
ACTIVITIES                         7(b)        806,279         (413,508)        647,875        (475,641)       158,404              62,133


NET INCREASE/
(DECREASE) IN CASH HELD                        806,279         (413,508)        647,875        (475,641)       158,404              62,133


Cash at beginning of year                  21,077,195 21,490,703 20,662,556 21,138,197                         414,639            352,506
CASH AT END OF YEAR                7(a)    21,883,474 21,077,195 21,310,431 20,662,556                         573,043            414,639


The accompanying notes form an integral part of these statements.




                                                                                                                          MAV INSURANCE FINANCIAL REPORT 2006/07   93
     NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


1. CORPORATE INFORMATION
     The combined financial report of MAV Insurance for the year ended 30 June 2007 was authorised for issue in accordance with a resolution of
     the directors of the Municipal Association of Victoria on the date shown on the attached statement by directors.
     MAV Insurance is the insurance division of the Municipal Association of Victoria. The Municipal Association of Victoria is an association
     incorporated by an Act of the Parliament of Victoria known as the Municipal Association Act 1907.
     The nature of the operations and principal activities of MAV Insurance are the provision of public liability, professional indemnity and fidelity
     insurance to its members and community groups within its council member boundaries.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation
     The financial report is a general purpose financial report which has been drawn up in accordance with Australian Accounting Standards,
     Mandatory Professional Reporting Requirements (Urgent Issues Group Interpretations) 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.
     The financial report is presented in Australian dollars.
     The accounts have been prepared on the accruals basis using historical costs and, except where stated, do not take into account current
     valuations of assets.

(b) Statement of compliance
     The financial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting
     Standard (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with
     International Financial Reporting Standards (IFRS)

(c) The basis of the combined report
     The combined financial report relates to the insurance activities of the Municipal Association of Victoria being its controlled entities the local
     government mutual liability insurance scheme, trading as Civic Mutual Plus (CMP), and Municipal Officers’ Fidelity Guarantee Fund.
     The presentation of the combined balances is for management purposes only. The two entities are separate independent legal entities.
     The affects of all transactons between entities in the combined entity have been eliminated.
     The financial statements of the entities are prepared for the same reporting period as the Municipal Association of Victoria, using consistent
     accounting policies.

(d) Income tax
     The entities are exempt from income tax, in accordance with sections 50-10 and 50-25 of the Income Tax Assessment Act 1997.

(e) Investment income
     Investment income consists of interest which is recognised on a time-proportionate basis that takes into account the effective yield on the
     financial asset and movements in unit values in cash and fixed interest funds which are carried at fair value through the income statement.

(f) 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.

(g) Premiums receivable
     In June each year, the CMP scheme issues 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. Prior to each balance date, members have committed to
     participate in the scheme and the fund for the ensuing year and accordingly the premiums are disclosed in the balance sheet as ‘contributions
     receivable’ with an offsetting liabilty described as ‘contributions billed in advance’.

(h) 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,

94   MAV INSURANCE FINANCIAL REPORT 2006/07
    NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


    which is affected by factors arising during the period to settlement such as normal inflation and ‘superimposed inflation’.
    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 16.
    Claims-incurred expense has reduced from the previous year due to the impact of improved risk management practices by members and reform
    to the law of tort.

(i) Other financial assets
    Investments are valued at net market value at balance date. Investment income includes interest received and receivable on investments and
    changes in net market values of investments in cash and bond unit trusts at call. 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.

(j) Cash flows
    For the purposes of the statement of cash flows, cash includes cash on hand and deposits held at call with banks and investments in cash-
    backed unit trusts net of outstanding bank overdrafts.

(k) Reinsurance and other recoveries receivable
    Reinsurance and other recoveries receivable on paid claims, reported claims not paid, claims incurred but not reported and unexpired risk
    liabilities are recognised as revenue. Recoveries receivable are assessed in a manner similar to the assessment of outstanding claims.
    Recoveries are measured as the present value of the expected future receipts, calculated on the same basis as the liability f or outstanding claims.
    Reinsurance recoveries are reduced from the prior year due to a reduction in claims caused by improved risk management practices by members
    and reform to the law of tort.

(l) 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) Future reinsurance and other 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.

(m) Comparative figures
    Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year.

(n) Catastrophe insurance
    Catastrophe insurance relates to insurance premiums paid to reinsurers in accordance with the established reinsurance strategy of the entity and
    in order to protect the insurance businesses from catastrophic and unforseen claims.

(o) Alteration due to an error from a prior period
    Civic Mutual Plus provides public and product liability and professional indemnity insurance to its members up to a policy limit of $5 million
    (2006 $2 million) and facilitates insurance cover for each its members up to a limit of $300 million for public and product liability and $200
    million for professional indemnity insurance. In previous years Civic Mutual Plus has accounted for Premium Revenue and Catastrophe Insurance
    as if it insured members to the limit of $300 million for public and product liability and $200 million for professional indemnity insurance. In
    2007 the MAV Insurance Committee decided to account for premium revenue and catastrophe insurance on the basis of the limit of its
    insurance liability being $5 millon (2006 $2 million). The introduction of this policy has resulted in premium revenue for 2007 being reduced by
    $1,300,777 (2006 $3,656,600), catastrophe insurance being reduced by $1,181,417 (2006 $3,555,000) and stamp duty paid being reduced
    by $116,630 (2006 $101,600). The adjustment does not have any impact on the surplus earned by Civic Mutual Plus.
    The change in policy has also resulted in the current liability, premiums in advance to be reduced by $1,181,417 (2006 $3,555,000)
    representing 2008 year premiums invoiced in the 2007 financial year.

(p) Return of Capital
    At 30 June 2007 $5.5million (2006 $nil) of the capital of CMP was returned to members. This decision was made by the committee after
    considering current and past performance of the scheme and actuarial advice on the appropriate level of capital to be retained by CMP.
    A five-year forecast was considered to ensure the future viability of the CMP was not compromised by the decision to return capital.




                                                                                                                              MAV INSURANCE FINANCIAL REPORT 2006/07   95
     NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


                                                                  COMBINED                 CIVIC MUTUAL PLUS            MUNICIPAL OFFICERS’
                                                                                                                       FIDELITY GUARANTEE FUND
                                                       2007              2006            2007           2006            2007            2006
                                     NOTE                    $                  $               $           $                  $            $


3. REVENUE FROM
    ORDINARY ACTIVITIES
     REVENUES FROM
     OPERATING ACTIVITIES
     Premiums                         2(o)     31,697,332 27,344,810 30,979,972 26,629,943                           717,360         714,867
     Reinsurance and other
     recoveries                       2(k)       3,436,297          7,604,111       3,422,793       7,505,366         13,504          98,745
     TOTAL REVENUE FROM
     OPERATING ACTIVITIES                      35,133,629 34,948,921 34,402,765 34,135,309                           730,864         813,612
     REVENUES FROM
     NON-OPERATING ACTIVITIES
     Investment income                           1,211,599            929,077       1,169,521        901,397          42,078          27,680
     TOTAL REVENUE FROM
     OUTSIDE THE OPERATING
     ACTIVITIES                                  1,211,599            929,077       1,169,521        901,397          42,078          27,680
     TOTAL REVENUE FROM
     ORDINARY ACTIVITIES                       36,345,228 35,877,998 35,722,286 35,036,706                           772,942         841,292



4(a)CLAIMS EXPENSES
     Paid                                      12,989,535 14,529,869 12,900,885 14,306,900                            88,650         222,969
     Outstanding claims at end
     of financial year    (10) & 2(h)          60,277,819 68,487,569 60,169,819 68,379,569                           108,000         108,000
     Outstanding claims at
     beginning of financial year              (68,487,569) (71,910,544)(68,379,569) (71,676,544)                    (108,000)       (234,000)
     TOTAL CLAIMS EXPENSES                       4,779,785 11,106,894               4,691,135 11,009,925              88,650          96,969



4(b) ADMINISTRATION & GENERAL
    EXPENSES
     The following items have
     been recognised in the
     operating surplus (deficit):
     Stamp duty                                  2,058,605          1,669,309       2,058,605       1,669,309                   -              -
     Audit fees                                      90,770            39,960          85,620          36,960           5,150          3,000
     Administration                                870,616            776,047        870,555         768,107               61          7,940
     Actuary and legal fees                          94,922           253,180          90,898        237,826            4,024         15,354
     Scheme management fee                       1,784,408          1,740,316       1,676,058       1,631,966        108,350         108,350
     Scheme contribution to excess                            -     (170,000)                   -   (170,000)                   -              -
     TOTAL EXPENDITURE                           4,899,321          4,308,812       4,781,736       4,174,168        117,585         134,644



5. AUDITOR’S REMUNERATION
     Amounts payable or due
     and payable for audit services:
     AUDIT OF THE ENTITY                             79,330            39,960          74,180          36,960           5,150          3,000
     TAX COMPLIANCE                                  11,440                     -      11,440                   -               -              -
                                                     90,770            39,960          85,620          36,960           5,150          3,000



96   MAV INSURANCE FINANCIAL REPORT 2006/07
    NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


                                                              COMBINED                CIVIC MUTUAL PLUS           MUNICIPAL OFFICERS’
                                                                                                                 FIDELITY GUARANTEE FUND
                                                   2007             2006            2007            2006           2007                2006
                                                          $                $               $               $              $                  $


6   SCHEME MANAGEMENT FEES
    Included within administration
    and general expenses are
    management fees for:
    Risk management and
    administrative services          4(b)    1,784,408         1,740,316       1,676,058       1,631,966        108,350            108,350
    Claims management                4(a)    1,459,970         1,423,895       1,371,320       1,335,245         88,650              88,650
    TOTAL SCHEME
    MANAGEMENT FEES                          3,244,378         3,164,211       3,047,378       2,967,211        197,000            197,000



7   NOTES TO THE CASH FLOW STATEMENT
                                                              COMBINED                CIVIC MUTUAL PLUS           MUNICIPAL OFFICERS’
                                                                                                                 FIDELITY GUARANTEE FUND
                                                   2007             2006            2007            2006           2007                2006
                                                          $                $               $               $              $                  $


(a) Cash and cash equivalents at
    balance date as shown in the
    Statement of Cash Flows are
    reconciled to the related items
    in the Balance Sheet as follows:
    Cash at bank                             3,602,376         7,092,850       3,601,448       7,083,678            928                9,172
    Other financial assets                  18,281,098 13,984,345 17,708,983 13,578,878                         572,115            405,467
    TOTAL CASH                              21,883,474 21,077,195 21,310,431 20,662,556                         573,043            414,639

(b) Reconciliation of net cash
    used in operating activities
    to operating surplus/(deficit)
    Surplus/(deficit) for year               2,631,396         2,144,894       2,474,744       1,941,013        156,652            203,881
    Capital return to members        2(p)   (5,500,000)                    - (5,500,000)                   -               -                  -
    CHANGES IN ASSETS
    AND LIABILITIES
    (Increase)/decrease in accounts
    receivable                 2(k)          8,935,312           930,843       8,726,833       1,042,104        208,478          (111,261)
    Increase/(decrease) in accounts
    payable                                     94,069          (137,826)        120,009       (140,263)        (25,940)               2,437
    (Increase)/decrease in provision
    for reinsurance recoveries                            -     (279,266)                  -   (279,266)                   -                  -
    Increase/(decrease) in outstanding
    claims                     2(h)         (8,209,750) (3,820,274) (8,209,750) (3,694,274)                                -     (126,000)
    Increase/(decrease) in unearned
    revenue                                  2,855,252           748,121       3,036,039         655,045       (180,786)             93,076
    CASH FLOWS (USED IN)/FROM
    OPERATIONS                                 806,279          (413,508)        647,875       (475,641)        158,404              62,133




                                                                                                                           MAV INSURANCE FINANCIAL REPORT 2006/07   97
     NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


                                                                   COMBINED                   CIVIC MUTUAL PLUS         MUNICIPAL OFFICERS’
                                                                                                                       FIDELITY GUARANTEE FUND
                                                         2007             2006            2007            2006             2007             2006
                                       NOTE                   $                  $               $             $               $                $


8    RECEIVABLES
     Future reinsurance and
     other recoveries receivable        2(k)    67,763,949 78,423,222 67,763,949 78,423,222                                        -               -
     Discount to present value                 (11,634,968) (13,146,356)(11,634,968) (13,146,356)                                  -               -
                                                 56,128,981 65,276,866 56,128,981 65,276,866                                       -               -
     Premiums receivable       2(g) & 2(o)      20,989,700 20,744,302 20,567,260 20,123,049                          422,440             621,253
     Other receivables                            2,251,382          2,284,207       2,248,980       2,272,140             2,402          12,067
     TOTAL RECEIVABLES                          79,370,063 88,305,375 78,945,221 87,672,055                          424,842             633,320
     Represented by:
     CURRENT                                    35,771,537 40,338,253 35,346,695 39,704,933                          424,842             633,320
     NON-CURRENT                                43,598,526 47,967,122 43,598,526 47,967,122                                        -               -
     TOTAL                                      79,370,063 88,305,375 78,945,221 87,672,055                          424,842             633,320

9    PREMIUMS IN ADVANCE
     Contributions billed in advance 2(g)&2(o) 30,024,265 27,169,013 29,639,839 26,603,800                           384,426             565,212

10 (a) OUTSTANDING CLAIMS
    Central estimate      2(h)                  67,448,523 76,331,070 67,358,523 76,241,070                            90,000             90,000
     Discount to present value                 (11,339,489) (13,010,444)(11,339,489) (13,010,444)                                  -               -
                                                 56,109,034 63,320,626 56,019,034 63,230,626                           90,000             90,000
     Claims handling costs                        2,694,341          3,049,643       2,694,341       3,049,643                     -               -
     Risk margin                      10(b)       1,474,444          2,117,300       1,456,444       2,099,300         18,000             18,000
     TOTAL OUTSTANDING CLAIMS                   60,277,819 68,487,569 60,169,819 68,379,569                          108,000             108,000
     Comprising:
     CURRENT                                    15,593,966 15,830,519 15,485,966 15,722,519                          108,000             108,000
     NON-CURRENT                                44,683,853 52,657,050 44,683,853 52,657,050                                        -               -
     TOTAL CLAIMS PROVISION                     60,277,819 68,487,569 60,169,819 68,379,569                          108,000             108,000


10 (b) RISK MARGIN - PROCESS FOR DETERMINING RISK MARGIN
     Figures for private insurers published by the Australian Prudential and Regulatory Authority (APRA) in October 2005 showed an average risk
     margin of 15.7% for public and product liability outstanding claims, and 11.3% for professional indemnity. Based on these averages, and on
     three actuarial publications, Cumpston Sarjeant Pty Ltd, the appointed actuary, recommended that risk margins be adopted to give an overall
     risk margin of 15% for outstanding claims, in the absence of reinsurance. After allowing for the extent of reinsurance for each year, Cumpston
     Sarjeant Pty Ltd calculated risk margins for each year, in total being 1.7% of gross outstanding claims. They recommended a risk margin of 20%
     for the net unexpired risk liability. These risk margins give a probability of approximately 75% that the provisions including the risk margins will
     prove adequate to meet the relevant liabilities.
10 (c) COMBINED RECONCILIATION OF MOVEMENT IN DISCOUNTED OUTSTANDING CLAIMS LIABILITY
                                                                      2007                                           2006
                                                      GROSS        REINSURANCE          NET          GROSS         REINSURANCE            NET
                                       NOTE                    $           $                     $             $             $                   $
     Outstanding claims brought forward 68,487,569 65,276,866                        3,210,703 71,910,544 69,580,042                   2,330,502
     Changes in assumptions (i)                 10,886,709 12,570,678 (1,683,969) (1,234,000) (1,264,000)                                 30,000
     Increase in claims incurred/
     recoveries anticipated                      (7,566,894) (9,147,885)             1,580,991 12,340,894           8,868,111          3,472,783
     Incurred claims recognised in
     income statement                             3,319,815         3,422,793        (102,978) 11,106,894           7,604,111          3,502,783
     Claim payments/recoveries during the year (11,529,565)(12,570,678)              1,041,113 (14,529,869) (11,907,287)               (2,622,582)
     Outstanding claims carried forward 60,277,819 56,128,981                        4,148,838 68,487,569 65,276,866                   3,210,703

     (i) Significant changes in assumptions relate to the actuarial reassessment of future investment earnings and the average delay in reinsurance receipts.

98   MAV INSURANCE FINANCIAL REPORT 2006/07
   NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


11 NET CLAIMS INCURRED
                                                               2007                                            2006
                                       CURRENT YEAR        PRIOR YEAR          TOTAL CURRENT YEAR          PRIOR YEAR              TOTAL
                                                   $                $              $         $                     $                  $
   COMBINED
   Gross claims and related
   expenses - undiscounted              14,378,920(11,270,089)            3,108,831 20,858,271 (7,497,481) 13,360,790
   Discount                             (2,777,861)       4,448,815       1,670,954 (3,995,548)           1,741,652 (2,253,896)
   Gross claims and related
   expenses - discounted                11,601,059 (6,821,274)            4,779,785 16,862,723 (5,755,829) 11,106,894
   Reinsurance and other recoveries
   - undiscounted                      (10,828,628) 11,440,165              611,537 (17,342,365)          4,875,876 (12,466,489)
   Discount                              1,428,183 (5,476,017) (4,047,834)                3,212,803       1,649,575        4,862,378
   Reinsurance and other recoveries
   - discounted                         (9,400,445)       5,964,148 (3,436,297) (14,129,562)              6,525,451 (7,604,111)
   NET CLAIMS INCURRED                   2,200,614        (857,126)       1,343,488       2,733,161         769,622        3,502,783


   CIVIC MUTUAL PLUS
   Gross claims and related
   expenses - undiscounted              14,290,270(11,270,089)            3,020,181 20,761,302 (7,497,481) 13,263,821
   Discount                             (2,777,861)       4,448,815       1,670,954 (3,995,548)           1,741,652 (2,253,896)
   Gross claims and related
   expenses - discounted                11,512,409 (6,821,274)            4,691,135 16,765,754 (5,755,829) 11,009,925
   Reinsurance and other recoveries
   - undiscounted                      (10,815,124) 11,440,165              625,041 (17,243,620)          4,875,876 (12,367,744)
   Discount                              1,428,183 (5,476,017) (4,047,834)                3,212,803       1,649,576        4,862,379
   Reinsurance and other recoveries
   - discounted                         (9,386,941)       5,964,148 (3,422,793) (14,030,817)              6,525,452 (7,505,366)
   NET CLAIMS INCURRED                   2,125,468        (857,127)       1,268,342       2,734,937         769,623        3,504,559


   MUNICIPAL OFFICERS’ FIDELITY
   GUARANTEE FUND
   Gross claims and related
   expenses - undiscounted                   88,650                   -      88,650          96,969                   -         96,969
   Discount                                           -               -               -               -               -                  -
   Gross claims and related expenses
    - discounted                             88,650                   -      88,650          96,969                   -         96,969
   Reinsurance and other recoveries
    - undiscounted                         (13,504)                   -     (13,504)        (98,745)                  -       (98,745)
   Discount                                           -               -               -               -               -                  -
   Reinsurance and other recoveries
    - discounted                           (13,504)                   -     (13,504)        (98,745)                  -       (98,745)
   NET CLAIMS INCURRED                       75,146                   -      75,146          (1,776)                  -         (1,776)




                                                                                                                      MAV INSURANCE FINANCIAL REPORT 2006/07   99
      NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


12. CLAIMS DEVELOPMENT TABLE - CIVIC MUTUAL PLUS

      ACCIDENT YEAR                                   2003          2004           2005       2006           2007          TOTAL
                                     NOTE                 $             $             $           $              $                 $


      GROSS ESTIMATE OF
      ULTIMATE CLAIMS COST
      At end year of accident                   20,194,583 20,602,497 18,375,690 19,426,057 12,918,950
      One year later                            18,948,794 18,799,966 17,546,887 14,414,065
      Two years later                           16,345,749 16,772,897 17,554,596
      Three years later                         14,715,087 15,229,343
      Four years later                          11,869,840
      Current estimate of cumulative
      claims cost                               11,869,840 15,229,343 17,554,596 14,414,065 12,918,950 71,986,794
      Cumulative payments                       (8,523,743) (6,897,259) (2,762,401)       (969,716)      (228,561) (19,381,680)
      Outstanding claims - undiscounted          3,346,097     8,332,084 14,792,195 13,444,349 12,690,389 52,605,115
      Discount                                                                                                       (11,172,349)
      Claims handling expense                                                                                          2,104,205
      2002 and prior                                                                                                  16,632,848
      TOTAL GROSS OUTSTANDING
      CLAIMS-CIVIC MUTUAL PLUS10(a)                                                                                  60,169,819
      MUNICIPAL OFFICERS’
      FIDELITY GUARANTEE
      FUND - TOTAL GROSS
      OUTSTANDING CLAIMS 10(a)                                                                                           108,000
      COMBINED GROSS
      OUTSTANDING CLAIMS 10(c)                                                                                       60,277,819


      NET ESTIMATE OF
      ULTIMATE CLAIMS COST
      At end year of accident                    2,035,718     3,048,847     2,125,606    2,182,437      2,103,826
      One year later                             1,667,854     2,431,922     1,847,897    2,104,523
      Two years later                              991,622     1,245,405     2,191,811
      Three years later                          1,156,060     1,280,196
      Four years later                           1,555,335
      Current estimate of cumulative
      claims cost                                1,555,335     1,280,196     2,191,811    2,104,523      2,103,826     9,235,691
      Cumulative payments                        (974,612)     (332,963)     (811,680)    (295,414)      (138,816) (2,553,484)
      Outstanding claims - undiscounted            229,609       561,443       675,455    1,192,993      1,965,010     6,682,207
      Discount                                                                                                        (4,041,855)
      Claims handling expense                                                                                            267,288
      2002 and prior                                                                                                   1,133,198
      TOTAL GROSS
      OUTSTANDING CLAIMS
      - CIVIC MUTUAL PLUS                                                                                              4,040,838
      MUNICIPAL OFFICERS’
      FIDELITY GUARANTEE FUND -
      TOTAL NET
      OUTSTANDING CLAIMS                                                                                                 108,000
      COMBINED NET
      OUTSTANDING CLAIMS 10(c)                                                                                         4,148,838




100    MAV INSURANCE FINANCIAL REPORT 2006/07
   NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


13 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 are set out below:


                                                             COMBINED                CIVIC MUTUAL PLUS             MUNICIPAL OFFICERS’
                                                                                                                  FIDELITY GUARANTEE FUND
                                          NON-INTEREST           FLOATING NON-INTEREST            FLOATING NON-INTEREST        FLOATING
                                               EARNING        INTEREST RATE     EARNING        INTEREST RATE     EARNING    INTEREST RATE
                                                                                   2007
                                                         $                $               $                $             $                 $
   FINANCIAL ASSETS
   Bank                                                  -    3,602,376                   -    3,601,448                 -            928
   Cash investments                                      - 18,281,098                         17,708,983                 -     572,115
   Receivables                            79,370,063                      - 78,945,221                     -   424,842                     -
   TOTAL FINANCIAL ASSETS                 79,370,063 21,883,474 78,945,221 21,310,431                          424,842         573,043
   Weighted average interest rate                                   5.6%                             5.6%                           8.5%


                                                                                   2007
   FINANCIAL LIABILITIES
   Outstanding claims                     60,277,819                      - 60,169,819                     -   108,000                     -
   Unearned premiums/subscriptions        30,024,265                      - 29,639,839                     -   384,426                     -
   Accounts payable                        3,274,439                      -   3,237,329                    -    37,110                     -
   TOTAL FINANCIAL LIABILITIES            93,576,523                      - 94,046,987                     -   529,536                     -
   Weighted average interest rate                                       0%                             0%                               0%


                                                                                   2006
   FINANCIAL ASSETS
   Bank                                                  -    7,092,850                   -    7,083,678                 -          9,172
   Cash investments                                      - 13,984,345                     - 13,578,878                   -      405,467
   Receivables                             88,305,375                     - 87,672,055                     -   633,320                     -
   TOTAL FINANCIAL ASSETS                  88,305,375 21,077,195 87,672,055 20,662,556                         633,320          414,639
   Weighted average interest rate                                   5.6%                             5.6%                            5.6%


                                                                                   2007
   FINANCIAL LIABILITIES
   Outstanding claims                      68,487,569                     - 68,379,569                     -   108,000                     -
   Unearned premiums/subscriptions         27,169,012                     - 26,603,800                     -   565,212                     -
   Accounts payable                         3,180,372                     -   3,117,322                    -     63,050                    -
   TOTAL FINANCIAL LIABILITIES             98,836,953                     - 98,100,691                     -   736,262                     -
   Weighted average interest rate                                       0%                             0%                               0%


   The carrying amounts of financial assets and financial liabilities represent their approximate net fair value.
   All maturity dates are within twelve months.




                                                                                                                      MAV INSURANCE FINANCIAL REPORT 2006/07   101
      COMBINED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


14. INSURANCE CONTRACTS - RISK MANAGEMENT

      Risk management objectives and policies for mitigating insurance risk
      The local government mutual liability scheme (trading as Civic Mutual Plus) is established by legislation contained in the Municipal Association
      Act 1907. Membership is available to local government councils and prescribed bodies. The scheme operates in Victoria and Tasmania to
      provide a claims management service to members in respect of their potential and actual liabilities. A member may seek indemnity from the
      scheme in respect of a claim.
      Actuarial models, using information from the scheme’s management information systems are used to confirm contributions and monitor claim
      patterns. Past experience and statistical methods are used as part of the process.
      The principal risk is that the frequency and severity of claims is greater than expected. Civil liability risk events are, by their nature, random, and
      the actual number and size of events during any one-year may vary from those estimated using established statistical techniques.

      Objectives in managing risk arising from insurance and policies for mitigating those risks
      The scheme has an objective to control insurance risk thereby reducing the volatility of its operating surplus. In addition to the inherent
      uncertainty of civil liability risks, which can lead to variability in the loss experience, operating surpluses can also be affected by external factors,
      such as competition and movements in asset values.
      The scheme relies on a strong relationship with its members and actively encourages them to adopt practices of risk management that reduce the
      incidence of claims to the scheme.

      Reinsurance strategy
      The scheme adopts a conservative approach towards management of risk and does this by utilising various risk transfer options. The MAV
      Insurance Committee determines the level of risk, which is appropriate for the scheme, having regards to ordinary concepts of prudence
      and regulatory constraints. The risk transfer arrangements adopted by the scheme include the utilisation of commercial reinsurance/excess
      arrangements.
      These risk transfer arrangements assist the scheme to limit exposures to large single claims and catastrophic events. These programs are
      reviewed each year to ensure they continue to meet the risk needs of the scheme.

      Terms and conditions of membership
      Membership to the scheme is offered to eligible bodies and renewed annually on 30 June. Payment of the annual contribution confirms
      continuation of membership. Termination of membership is subject to at least 90-days written notice of intention as laid out by the scheme rules.

      Product features
      The scheme operates in Victoria and Tasmania. Should a claim be accepted, the scheme provides indemnity to the member in resp ect of their
      civil liabilities for $5 million public/product liability and professional indemnity insurance, subject to any excess, for any claim incurred anywhere
      throughout the world.
      Operating surpluses arise from the total contributions charged to members less the amounts paid to cover claims and the expenses incurred by
      the scheme.

      Management of risks
      The key insurance risks that affect the scheme are contribution risk and claims experience risk.
      Contribution risk is the risk that the scheme does not charge contributions appropriate for the indemnity cover it provides. The scheme partially
      manages contribution risk through its proactive approach to risk management that addresses all material risks, both financial and non-financial.
      There are no specific terms and conditions that are expected to have a material impact on the financial statements.
      Claims experience risk is managed through the non-financial risk assessment and risk management and reinsurance management process.
      Claims experience is monitored on an ongoing basis to ensure any adverse trending is addressed. The scheme is able to reduce the claims
      experience risk of severe losses through the reinsurance program and by managing the concentration of insurance risks.

      Concentration of insurance risks
      Insurance risk is managed by taking a long-term approach to setting the annual contribution rates that eliminates price fluctuations, appropriate
      investment strategy, reinsurance and by maintaining an active statewide risk management profile. It is vital that the Scheme keeps abreast of
      changes in the general economic, legal and commercial environment in which it operates.

      Interest rate risk
      The reinsurance indemnity contracts contain no clauses that expose the scheme, directly to interest rate risk. The reinsurance contracts are long-
      term arrangements, reviewed and payable annually.



102    MAV INSURANCE FINANCIAL REPORT 2006/07
    COMBINED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


    Credit risk
    The scheme is exposed to credit risk on insurance contracts as a result of exposure to reinsurers. The credit risk to reinsurers is managed through
    the scheme regularly monitoring the financial rating of the reinsurers both prior to and during the reinsurance program.

15. ACCOUNTING ESTIMATES AND JUDGEMENTS
    The scheme makes estimates and judgements in respect of certain key assets and liabilities. Estimates and judgements are continually reviewed
    and are based on past experience and other factors, including expectations of future events believed to be reasonable under the circumstances.
    The key areas in which critical estimates and judgements are applied are described below.

a) Estimation of outstanding claims liability
    Provision is made at the year-end for the estimated cost of claims incurred but not settled at the balance sheet date, including the cost of claims
    incurred but not yet reported to the scheme.
    The scheme takes all reasonable steps to ensure it has appropriate information regarding its claims exposure. However, given the uncertainty in
    establishing claims provisions, it is likely that the final outcome may be different from the original liability established.
    Provisions are calculated gross of all recoveries. A separate estimate is made of the amounts that will be recoverable from reinsurers and any
    third party.
    The determination of an appropriate outstanding claims provision involves:
    (i) establishing a case estimate for each reported claim at year-end taking into account legal advice where appropriate on larger claims
    (ii) a development allowance of 25% on the net outstanding balance of reported claims and confirmed as appropriate by the actuary
    (iii) allowance for incurred but not reported claims as confirmed by the actuarial review on 30 June 2007
    (iv) an allowance of 4% for claim settlement expenses, as assumed by the actuary
    (v) allowances for discount at 6.45%, as assumed by the actuary
    (vi) a risk margin of 20% of net outstanding claims after the effect of reinsurance has been applied, as assumed by the actuary.
    Details of specific actuarial assumptions used in deriving the outstanding claims liability at year-end are detailed in note 16.

b) Assets arising from reinsurance contracts
    Assets arising from reinsurance contracts were estimated for each accident year, from the payments to date and estimated outstanding claims
    history at 30 June 2007, taking into account the reinsurance terms applying to that accident year. In calculating the present value of reinsurance
    recoveries, allowance was made for an average recovery delay of 3.5 months, as assumed by the actuary.
    In accordance with the actuarial recommendations an allowance was made for non-recoveries from relevant insurers.

16. ACTUARIAL ASSUMPTIONS AND METHODS

    Actuarial assumptions
    The following assumptions have been made in determining the outstanding claims liabilities:


                                                   2007            2006
    KEY ACTUARIAL ASSUMPTIONS
    Case estimate development                       25%             25%
    Wage inflation                                    4%             4%
    Claim administration expense                      4%             4%
    Superimposed inflation                            2%             2%
    Discount rate                                 6.45%            5.9%
    Risk margin                                     20%             20%




                                                                                                                    MAV INSURANCE FINANCIAL REPORT 2006/07   103
      COMBINED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


16. ACTUARIAL ASSUMPTIONS AND METHODS (continued)

      Process used to determine actuarial assumptions
      A description of the processes used to determine the above key actuarial assumptions is provided below.
      Civic Mutual Plus has provided public and professional indemnity insurance to local government bodies in Victoria and Tasmania and other
      bodies constituted under any Act for any public or local governing purpose since 30/9/1993. The actuary was supplied aggregate data on
      claims from each year’s cover at each balance date, together with details for each claim at various dates, including 30/6/2007. The individual
      claim payments and case estimates reconciled closely with totals in Civic Mutual Plus’s financial statements for each year of cover. The actuary
      made estimates of gross outstanding claims with four differential actuarial methods - payments per person incurred, developed claims incurred,
      developed case estimates, and estimated claims incurred but not reported. The actuary selected the last of these methods, including a 25%
      allowance for case estimate development, for use in estimating outstanding claims. Payments were projected with a payment pattern, based on
      past experience, assuming an average delay of 4.8 years from the middle of the accident year. Estimates of outstanding non-reinsurance
      recoveries were made by a recoveries per person insured method.
      During the 2001 financial year, two of the participants in the scheme’s reinsurance program FAI/HIH and Independent were placed into the
      hands of liquidators. These companies were part of the reinsurance programs in fund years from 1994 to 1998. The MAV Insurance Committee
      continues 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. In accordance with the committee’s prudent approach to reserving within the actuarial calculation of the central
      estimate of reinsurance recoveries, the estimated future recoveries from FAI/HIH were assumed to be 10% of the debt due. The MAV is currently
      in negotiation with The Underwriting Insurance Company (TUIC) of the UK, a company under management runoff, regarding its reinsurance
      obligations to Civic Mutual Plus and about its ability to meet liabilities to Civic Mutual Plus. At the date of this report there has been no
      resolution to this issue. Within the actuarial calculation of the central estimate of reinsurance, the estimated future recoveries from TUIC were
      assumed to be 75% of the debt due.
      Estimates of reinsurance recoveries were made from projected gross payments and non-reinsurance recoveries, allowing for the different
      insurance treaties applying to each year and assuming an average 3.5 month’s delay in the receipt of reinsurance recoveries. Recoveries from
      FAI/HIH were assumed to be 10% and Independent were assumed to be zero. Recoveries from TUIC were assumed to be 75% of those due.
      Based on the yields of medium term Commonwealth bonds at 30/6/2007, the discount rate was assumed to be 6.45% pa. Based on the actual
      expense rates of Civic Mutual Plus, claim administration expenses were assumed to be 4% of the net claim payments.
      Based on averages for private insurers by Australian Prudential and Regulatory Authority (APRA), and on three actuarial publications, the actuary
      recommended that risk margins be adopted intended to give an overall risk margin of 15% for outstanding claims, in the absence of
      reinsurance. After allowing for the extent of reinsurance for each year, the actuary calculated risk margins for each year, in total being 1.7% of
      gross outstanding claims liabilities. The actuary considered that these risk margins are likely to give a probability of about 75% and that the
      provisions including the risk margins will prove adequate to meet the relevant liabilities. Unexpired risk liabilities were estimated by bringing gross
      claim incurred estimates for each of the 10 years to 30/6/2003 to 2007/08 values using Victorian average weekly earnings adjusting for
      membership changes and fitting a trend line to the 10-year period. The trend value for 2002/03 was projected to 2007/08, assuming a 20%
      drop due to tort reform, superimposed inflation at 2% pa and population growth at 1% pa. After allowing for reinsurance costs and a risk margin
      of 20%, no premium deficiency was apparent.


      VARIABLE                                      IMPACT OF MOVEMENT IN VARIABLE
      Wage inflation                                Expected future payments are inflated to take account of inflationary increases. An increase or
                                                    decrease in the assumed levels of economic inflation would have a corresponding impact on claims
                                                    expense, with particular reference to longer tail claims.
      Superimposed inflation                        In addition to the general economic inflation rate an amount is superimposed to take account of non-
                                                    economic inflationary factors, such as increases in court awards. Such rates of superimposed inflation
                                                    are specific to the model adopted. An increase or decrease in the assumed levels of superimposed
                                                    inflation would have a corresponding impact on claims expense, with particular reference to longer
                                                    tail claims.
      Discount rate                                 The outstanding claims liability is calculated by reference to expected future payments. These
                                                    payments are discounted to adjust for the time value of money. An increase or decrease in the
                                                    assumed discount rate will have an opposing impact on total claims expense.
      Case estimate development                     Case estimates are initially established in accordance with established guidelines and by reference
                                                    to the known facts. Where new information becomes available the initial case estimate will change.
                                                    This development movement is applied to open claims and will have a corresponding impact on
                                                    claims expense.




104    MAV INSURANCE FINANCIAL REPORT 2006/07
   COMBINED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


16. ACTUARIAL ASSUMPTIONS AND METHODS (continued)

   IMPACT OF CHANGES IN KEY VARIABLES

   CIVIC MUTUAL PLUS
   Variable                                         Current Rate          Change        Operating        Operating          Total accumulated
                                                                          variable      surplus at       surplus at       funds after the impact
                                                                              to      30 June 2007     30 June 2012        of applying variable
                                                           %                 %              $                 $                          $

   Base value at 30 June 2007                                                          2,474,744       23,666,000                   7,209,000
   Interest rate pa                                       6.45%            9.45%       2,430,744       27,750,000                  7,165,000
                                                                           3.45%       2,551,744       20,103,000                  7,286,000
   Inflation rate pa                                           4%                7%    2,470,744       23,232,000                  7,205,000
                                                                                 1%    2,479,744       24,088,000                  7,214,000
   TUIC recovery                                            75%             100%       4,625,744       25,852,000                  9,360,000
                                                                             50%         789,744       21,586,000                  5,524,000
   Contribution increase                                       0%            2.5%      2,474,744       31,049,000                  7,209,000
                                                                            -2.5%      2,474,744       16,558,000                  7,209,000
   Contribution increase                                       0%            2.5%      2,474,744       17,969,000                  7,209,000
                                                                            -2.5%      2,474,744       29,151,000                  7,209,000



17. CONTINGENT ASSET

   Reinsurance share of profit
   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 local government claims experience nationally. 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.
   The actuary has calculated the potential value of the CMP scheme’s profit share for the first four years of the five-year program, at balance date,
   to be $12.5 million (2006 $7.139 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 2007 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 potential share of profit.
   The position will be monitored on an annual basis.




                                                                                                                    MAV INSURANCE FINANCIAL REPORT 2006/07   105
      COMBINED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007


18. RELATED PARTIES
       The Municipal Association of Victoria is a body corporate established under the Municipal Association Act 1907 to provide services for and the
       representation of local government authorities in Victoria. The Association and its wholly-owned controlled entities, including MAV Insurance,
       trade with its members in the normal course of business and on an arm’s length basis. The Deed of Establishment provides for the MAV to
       appoint a committee of management (MAV Insurance Committee) to be responsible for the administration of the scheme. Mr A. Nye is the
       Chairman of the Victorian Managed Insurance Authority (VMIA) and Mr R. Farrell is a board director of VMIA. The MAV and the VMIA from time
       to time have conflicting interests in insurance claims matters. Any such claims were settled on commercial terms without the involvement of these
       committee members. The discreet nature of these transactions is not material. Total expenses of $565,494 (2006 $472,000) were payable to
       the Municipal Association of Victoria, being payment for administrative support, and overseeing the management of the insurance activities,
       including the conduct of bi-monthly Committee Meetings. Other than this there were no material related party transactions during the year.

       Committee members during the year
       J. Warburton (independent chairperson)
       A. Murphy (independent)
       G. Lake (MAV President, resigned September 2006)
       Cr. R. Gross (MAV President, appointed November 2006)
       A. Garcia (LGAT representative)
       R. Farrell (independent)
       A. Nye (independent)
       Dr. M. Kennedy (CEO, Mornington Peninsula Shire Council)
       R. Spence (MAV Chief Executive Officer)
       Cr. R. Fyffe (MAV representative)




       Key management personnel remuneration
                                                               COMBINED              CIVIC MUTUAL PLUS         MUNICIPAL OFFICERS’
                                                                                                              FIDELITY GUARANTEE FUND
                                                     2007            2006         2007           2006           2007           2006
                                                           $              $              $            $              $             $


       Independent committee members
       receive remuneration for meeting
       fees. Chairperson receives $750
       per committee meeting and other
       independent committee members
       receive $500 per committee
       meeting plus $1,030 per annum
       for claims and technical committee
       and other meetings.
       Short-term remuneration of key
       management personnel                      108,095           90,950      108,095         90,950                  -            -



       Loans to committee members
       No loans were made to or are payable by committee members.

       Other transactions
       There were no other material transactions with committee members.

       Insurance
       The activities of the MAV Insurance Committee members are covered by the MAV directors’ and officers’ indemnity insurance policy, effected by
       the Municipal Association of Victoria.




106     MAV INSURANCE FINANCIAL REPORT 2006/07
    STATEMENT BY COMMITTEE OF MANAGEMENT
    In accordance with a resolution of the MAV Insurance Committee, we state that:
    In the opinion of the members of The MAV Insurance Committee:
(a) the financial statements and notes of the combined entity are drawn up so as to give a true and fair view of the results of Civic Mutual Plus and
     the Municipal Officers’ Fidelity Guarantee Fund for the year ended 30 June 2007;
(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 Civic Mutual Plus and
     the Municipal Officers’ Fidelity Guarantee Fund as at that date;
(c) at the date of this statement there are reasonable grounds to believe that Civic Mutual Plus and the Municipal Officers’ Fidelity Guarantee Fund
     will be able to pay its debts as and when they fall due; and,
    The financial statements have been made out in accordance with applicable accounting standards and other mandatory professional reporting
    requirements.
    On behalf of the MAV Insurance Committee




    John Warburton                                                        Rob Spence
    MAV Insurance Committee Chairman                                      MAV Chief Executive Officer


    Melbourne
    26 September 2007




    STATEMENT BY DIRECTORS
    In accordance with a resolution of the directors of the Municipal Association of Victoria, we state that:
    In the opinion of the Directors:
(d) the accompanying Statements of Financial Performance is drawn up so as to give a true and fair view of the results of Civic Mutual Plus and the
     Municipal Officers’ Fidelity Guarantee Fund for the year ended 30 June 2007;
(e) the accompanying Statement of Financial Position is drawn up so as to give a true and fair view of the state of affairs of Civic Mutual Plus and
     the Municipal Officers’ Fidelity Guarantee Fund as at that date;
(f) at the date of this statement there are reasonable grounds to believe that Civic Mutual Plus and the Municipal Officers’ Fidelity Guarantee Fund
     will be able to pay their debts as and when they fall due; and
    The 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.




    Richard Gross                                                          Geoff Gough
    President                                                              Director


    Melbourne
    26 September 2007



                                                                                                                   MAV INSURANCE FINANCIAL REPORT 2006/07   107
    COMBINED FINANCIAL STATEMENTS
    INDEPENDENT AUDIT REPORT
    INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE LOCAL GOVERNMENT MUTUAL LIABILITY INSURANCE SCHEME
    AND MUNICIPAL OFFICERS FIDELITY GUARANTEE FUND
    We have audited the accompanying general purpose financial report of MAV Insurance, incorporating the Local Government Liability Insurance
    Scheme (“the Scheme”) and the Municipal Officers Fidelity Guarantee Fund (“the Fund”), which comprises the balance sheet as at 30 June
    2007, and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of
    significant accounting policies, other explanatory notes and the directors’ declaration in relation to the scheme and the fund.

    Directors’ Responsibility for the Financial Report
    The directors of the Municipal Association of Victoria are responsible for the preparation and fair presentation of the financial report and have
    determined that the accounting policies described in Note 1 to the financial statements, which form part of the financial report, are appropriate
    to meet the financial reporting requirements of the Trust Deed and are appropriate to the needs of the members. This responsibility includes
    establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material
    misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are
    reasonable in the circumstances. In Note 1, the directors also state that the financial report, comprising the financial statements and notes
    comply with International Financial Reporting Standards.

    Auditor’s Responsibility
    Our responsibility is to express an opinion on the financial report based on our audit. No opinion is expressed as to whether the accounting
    policies used are appropriate to the needs of the members.
    We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical
    requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free
    from material misstatement.
    An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures
    selected depend on our judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or
    error. In making those risk assessments, we consider internal controls relevant to the entity’s preparation and fair presentation of the financial
    report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
    effectiveness of the entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the
    reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.
    The financial report has been prepared for distribution to the members for the purpose of fulfilling the directors’ financial reporting requirements
    under the Trust Deed. We disclaim any assumption of responsibility for any reliance on this report or on the financial report to which it relates to
    any person other than the members, or for any purpose other than that for which it was prepared.
    We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

    Independence
    In conducting our audit we have met the independence requirements of the Australian professional accounting bodies.

    Auditor’s Opinion
    In our opinion:
1. the financial report presents fairly, in all material respects, the financial position of MAV Insurance and of its financial performance and its cash
     flows for the year then ended in accordance with the accounting policies described in Note 1 to the financial statements.


2. the financial statements and notes or financial report also comply with International Financial Reporting Standards as disclosed in Note 1.




    Ernst & Young                                                                   T.M. Dring Partner


    Melbourne
    26 September 2007




108 MAV INSURANCE FINANCIAL REPORT 2006/07
OTHER INFORMATION
Legal form
MAV Insurance is the insurance division of the Municipal Association of Victoria. The Municipal Association of Victoria is an Association
incorporated by the Municipal Association of Victoria Act 1907.

Domicile:
Melbourne, Australia

Address of registered office:
Level 12, 60 Collins Street, Melbourne, 3000, Victoria, Australia

Principal place of business
Level 1, 468 St. Kilda Road, Melbourne 3004, Victoria, Australia

Nature of the operation and principal activities:
The Municipal Association of Victoria has the power provided to it by the Municipal Association of Victoria Act 1907 to establish Civic Mutual
Plus and the Municipal Officers’ Fidelity Guarantee Fund in order to provide public liability, professional indemnity and fidelity insurance to local
government and water authorities.

Number of employees
Nil




                                                                                                                  MAV INSURANCE FINANCIAL REPORT 2006/07   109
110 MAV INSURANCE FINANCIAL REPORT 2006/07

				
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