2003 – 2004 annual report by fanzhongqing

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          Fr@nk Design Pty Ltd

                Photography
      Steven Diffey Photography

                Published by
Municipal Association of Victoria
     Level 12, 60 Collins Street
              Melbourne 3000
     Telephone: 03 9667 5555
      Facsimile: 03 9667 5550
             GPO Box 4326PP
              Melbourne 3001
  E-mail: inquiries@mav.asn.au
      Website: www.mav.asn.au
MAV
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
                                                          Year in Focus               2
                                                          President’s Report          4
                                                          MAV Board                   6
                                                          CEO’s Report                8
                                                          Corporate Governance       10
                                                          MAV Statement              12
                                                          MAV Organisation           13
                                                          New Business Strategies    14
                                                          Environment                16
                                                          Professional Development   19
                                                          Social Policy              22
                                                          Economic and Finance       25
                                                          Infrastructure             28
                                                          Communications             30
                                                          Planning                   33
                                                          General Projects           36
                                                          Committees                 38
                                                          Financial Overview         40
                                                          Guide to the Financials    42
                                                          Financial Report           44




                                                      1
                           MAV ANNUAL REPORT 2003/4
YEAR IN FOCU
POSITIVE OUTCOMES FOR LOCAL
                    THE
GOVERNMENT SECTOR THAT STEMMED FROM THE MAV’S
PARTNERSHIP APPROACH WERE EVIDENT DURING 2003/04.
PROACTIVELY SEEKING MORE COLLABORATION BETWEEN THE SECTOR AND THE
STATE AND FEDERAL GOVERNMENTS PAID OFF WITH EXTRA FUNDING ALLOCATED
TO LOCAL GOVERNMENT PROGRAMS AND SERVICES.



        LOCAL GOVERNMENT ACT
        The most extensive overhaul of the Local Government Act since its inception in 1989 occurred in 2003/04. Reforms that
        came into effect immediately included:
        ·   Changes to council election dates, leading to the full alignment of elections in 2008
        ·   The provision for independent reviews of council electoral structures
        ·   Proportional representation for multi-member wards and unsubdivided districts
        ·   The new Local Government Charter
        The MAV commissioned legal analysis on the impact these changes would have on councils. This analysis was distributed
        to members and the MAV advocated with the State Government on council’s areas of concern.
        Other changes will be introduced progressively over the next 12 months, allowing time for new guidelines and supporting
        regulations to be issued and to give councils time to update their systems and procedures.


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


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


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




             2
             MAV ANNUAL REPORT 2003/4
US
ANNUAL CONFERENCE
The October 2003 MAV Annual Conference attracted 270 attendees. Sponsored for the first time by the Commonwealth Bank, a major
highlight of the two-day conference was guest speaker Stephen Mayne, creator of online independent newsline service crikey.com who
addressed the audience on the topic of governance. Keynote speaker Tony Richardson explored the notion of being an effective leader in a
democratic society. More than 400 guests enjoyed the Annual Conference dinner, the MAV’s most popular annual event.


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


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


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


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




                                                                                                                       3
                                                                                            MAV ANNUAL REPORT 2003/4
PRESIDENT’S
ADVOCATING FOR A BETTER DEAL FOR LOCALGOVERNMENT ALONG WITH LEGISLATIVE CHANGE AND POLICY
REFORM WAS THE PRIMARY FOCUS FOR 2003/04. THE MAV TOOK ON A
MAJOR ROLE IN ASSISTING COUNCILS DURING THE TRANSITIONAL PHASE OF THE
LOCAL GOVERNMENT ACT REFORMS AND IN THE STATE GOVERNMENT’S DEVELOPMENT
OF THE ROAD MANAGEMENT BILL.




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




                 4
                MAV ANNUAL REPORT 2003/4
REPORT

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


                                          JENNY DALE ACTING PRESIDENT
MAV BOARD
CR JENNY DALE                            CR BRAD MATHESON                       CR SAM ALESSI                              CR JOHN CHANDLER
                                         BA, LLB, AFAIM                                                                    STONNINGTON CITY COUNCIL
INDIGO SHIRE COUNCIL                                                            BA, BEd, GDip (Comp), Dip Teach

ACTING MAV PRESIDENT                     HOBSONS BAY CITY COUNCIL               WHITTLESEA CITY COUNCIL                    MAV Board representative of Metro
JUNE 2004 - CURRENT                      MAV PRESIDENT                          MAV Board representative of Interface      South East Region, Councillor,
MAV Board representative of Rural        1997 - JUNE 2004                       Region, Councillor, Whittlesea City        Stonnington City Council 1996 to
North East Region, Councillor, Indigo    Councillor, Hobsons Bay City Council   Council 1997 to current, Mayor of          current, Mayor of Stonnington
Shire Council 1997 to current, Mayor     1996 to current, Mayor of Hobsons      Whittlesea 1997–98, 2000–01,               1996–97, Councillor, City of Prahran
of Indigo 1997–99 and 2003 to            Bay 1998–99 and 2001–02 President,     Councillor, City of Whittlesea             1982–94, Mayor of Prahran 1988–89
current, Deputy Mayor of Indigo          Environment Protection Board; Senior   1987–88, Member, MAV Library               Member, Australian Building Codes
1999–2000, Councillor, Shire of          Vice President, Australian Local       Working Party; Chair, City of Whittlesea   Board (ABCB); Member, ABCB
Yackandandah 1992–94 Chair, MAV          Government Association (ALGA);         Responsible Gaming Forum;                  Building Access Policy Committee;
Human Services Committee; Member,        Member, Victorian Reconciliation       Representative, Community Information      Member, ABCB Energy Efficiency
Yackandandah Bush Nursing Hospital       Council; local government              Whittlesea Committee of Management;        Steering Committee
Committee; Chair, Indigo Shire           representative on the Victorian        Chairperson, Yarra Plenty Regional
Community Services Advisory              Economic, Environment and Social       Library Service Board of Directors;
Committee; Treasurer, Yackandandah       Advisory Council; Member, Dry          Representative, Whittlesea YMCA
Lions Club; Member, La Trobe             Seasonal Taskforce; Member, Building   Board of Directors; Board member,
University Advisory Committee;           Appeals Board                          Victorian State Council of YMCAs;
Coordinator, Yackandandah Adult Day                                             Director, Victorian YMCA’s Community
Centre and Beechworth Health                                                    Programming Pty Ltd
Service; Member, Roads Corporation
Advisory Board; Rural Vice President,
Australian Local Government Women’s
Association Victorian Branch; Member,
Victorian Association of Health and
Extended Care




                                                                                                                           CR ROD FYFFE
                                                                                                                           BA, BEc, Dip Ed, FSA Scot

                                                                                                                           GREATER BENDIGO
                                                                                                                           CITY COUNCIL
                                                                                                                           MAV Board representative of Rural
                                                                                                                           North Central Region, Councillor,
                                                                                                                           Greater Bendigo City Council 1996 to
                                                                                                                           current; Mayor of Greater Bendigo
                                                                                                                           2003 to current; Councillor, City of
                                                                                                                           Bendigo 1983–1994; Chair, MAV
                                                                                                                           Library Working Party; Member, State
                                                                                                                           Library Public Libraries Advisory
                                                                                                                           Committee; Chair, Bendigo Ice
                                                                                                                           Stadium; Chair, Central Vic
                                                                                                                           Greenhouse Alliance; Chair,
                                                                                                                           Environment Committee; Member,
                                                                                                                           Bendigo Easter Festival




                        6
                       MAV ANNUAL REPORT 2003/4
CR DARRYL ARGALL                        CR CHRIS PAPAS                            CR GEOFF LAKE                              CR JULIE EISENBISE
HINDMARSH SHIRE COUNCIL                 MELTON SHIRE COUNCIL                      MONASH CITY COUNCIL                        GDip Ed, Dip Med Lab Tech

MAV Board representative of Rural       MAV Board representative of Metro         MAV Board representative of Metro          MANNINGHAM CITY COUNCIL
North West Region, Councillor,          West Region, Councillor, Melton Shire     Southern Region, Councillor Monash         MAV Board representative of Metro
Hindmarsh Shire Council 1997 to         Council 2001 to current, Deputy           City Council 2000 to current, Mayor        East Region, Councillor, Manningham
current, Mayor of Hindmarsh             Mayor of Melton 2002–03; Director,        of Monash 2002–03, 2003 to current         City Council 1997 to current, Mayor
1997–99, Councillor, Shire of           Western Region Waste Management                                                      of Manningham 2001-02; Member,
Dimboola 1985–95, President, Shire      Group; Member, Boral Western Land                                                    MAV Human Services Committee;
of Dimboola 1992–93 Chair, MAV          Fill Community Advisory Committee;                                                   Member, MAV Library Working Party;
Strategic Environment Advisory Group;   Life member, Cyprian Greek Orthodox                                                  Chair, Whitehorse/Manningham
Member, North West Municipalities       Community ‘Apostolos Andreas’                                                        Regional Library Corporation; Deputy
Association; Member, Wimmera            Sunshine; Chair, Melton Community                                                    Chair, Migrant Information Centre for
Catchment Management Authority          Waste Management Committee;                                                          the Eastern Region of Melbourne;
(WCMA) Board; Member, WCMA              Member, Staughton College School                                                     Member, Business and Professional
Communication Committee; Treasurer,     Council; Member, Melton                                                              Women’s Association; Fellow,
Grampians Marketing Inc; Member,        Reconciliation Committee                                                             Australian Institute of Company
Gerang Landcare Group; Member,                                                                                               Directors
Hindmarsh Landcare Network;
Member, Gerang Fire Brigade




CR RAE PERRY                            CR JIM RYAN                               CR MAX O’SHEA                              CR GEOFF DAVEY
RN                                      BA, LLB                                   TPTC                                       BA, LLB

DAREBIN CITY COUNCIL                    COLAC-OTWAY SHIRE COUNCIL                 HEPBURN SHIRE COUNCIL                      BAW BAW SHIRE COUNCIL
MAV Board representative of Metro       MAV Board representative of Rural         MAV Board representative of Rural          MAV Board representative of Rural
Central Region, Councillor, Darebin     South West Region, Councillor, Colac-     South Central Region, Councillor,          Gippsland Region (elected April 2003),
City Council 1998 to current; Chair,    Otway Shire Council 1996 to current;      Hepburn Shire Council 1997 to              Councillor; Baw Baw Shire Council
Community Power Group Electricity       Mayor of Colac-Otway 1996–97,             current; Mayor of Hepburn 1998–99,         1997 to current; Mayor of Baw Baw
Purchasing Working Group; Member,       2003 to current; Councillor, City of      2000–01; Councillor, Shire of              Shire Council 1997–98, 1998–99,
National Executive Australian Local     Colac 1985–94; Mayor of Colac             Daylesford & Glenlyon 1991–95;             2003 to current; Member, Baw Baw
Government Association Board; Chair,    1990–91, 1993–94; Chairman, South         Chair, MAV Right to Farm Advisory          Shire Tourism Advisory Board; Member,
Friends of Baucau; Member, Aboriginal   West Municipalities Group; Chairman,      Committee; Chair, MAV Professional         West Gippsland Regional Library
& Torres Strait Islanders Community     Colac Otway Performing Arts and           Development Reference Group;               Service; Member, Arts and Cultural
Council; Member, Darebin Community      Cultural Centre Trustees; Life member,    Member, MAV/Vic Roads Liaison              Advisory Committee; Member, Australia
Health Services Inc Board of            Law Institute of Victoria; Member,        Group; Member, Regional Connectivity       Day Committee; Member, Gippsland
Management (liaison position);          Colac Do Care Committee; President,       Steering Committee; Member, Hepburn        Local Government Network
Member, MAV Human Services              Colac and District Cricket Association;   Health Service Board; Member,
Portfolio Committee; Chair, National    Chairman, Colac Turf Club                 Daylesford Secondary College School
Assembly ALGA Review Committee                                                    Council; Member, Daylesford
                                                                                  Community Enterprise Centre; Chair,
                                                                                  Central Highlands Library Corporation




                                                                                                                         7
                                                                                          MAV ANNUAL REPORT 2003/4
CEO’S REPORT
THE MAV IS NOT A SOLO OPERATION.REPRESENTING 79THE ACROSS
                                                COUNCILS
THEIR COMMUNITIES, IT IS ONE OF COLLABORATION AND PARTNERSHIPS NOT
                                                                               STATE AND, IN TURN,

ONLY WITH THE STATE AND FEDERAL GOVERNMENTS BUT WITH AGENCIES,
DEPARTMENTS AND ORGANISATIONS WHO ALSO SHARE THE VISION OF WORKING
TOGETHER TO ACHIEVE RESULTS.




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




               8
               MAV ANNUAL REPORT 2003/4
T

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




                                                  ROB SPENCE CHIEF EXECUTIVE OFFICER
CORPORATE GOVERNANCE
THE MUNICIPAL ASSOCIATION OF VICTORIA
WAS INCORPORATED UNDER THE MUNICIPAL ASSOCIATION ACT 1907.




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


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


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


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




           10
          MAV ANNUAL REPORT 2003/4
Expenses claimed by Board members in 2003/04 are as follows:
                       Cr Sam Alessi                    $781.30
                       Cr Geoff Lake                              -
                       Cr Darryl Argall             $13,725.40
                       Cr Brad Matheson#              $7,043.64
                       Cr John Chandler                           -
                       Cr Max O’Shea                  $3,068.49
                       Cr Jenny Dale               $17,685.23*
                       Cr Chris Papas                 $1,111.82
                       Cr Geoff Davey                 $2,414.61
                       Cr Rae Perry                   $4,162.27
                       Cr Julie Eisenbise               $100.00
                       Cr Jim Ryan                                -
                       Cr Rod Fyffe                   $2,928.00



NOTES
The above expenses relate to payments made to Board members over the 2003/04 financial year.
The amount does not correlate to the allowance and expense payments figures in the financial statements as this includes some payments
made to Board members for expenses incurred in 2002/03 and claimed in 2003/04. Some expenses are also charged to other areas in
the MAV accounts.
Payments were either made direct to Board members, to their council for travel where they have utilised a council fleet vehicle, or directly
to the hotel with respect to some accommodation expenses.
It should be noted that some Board members have lodged claims after 30 June 2004, details of which will be reflected in the 2004/05
financials.
* This amount includes $11,789.05 of expense payments claimed and made to Cr Dale and Indigo Shire Council in 2003/04 that were
   actually were incurred in the 2001/02 and 2002/03 financial years.
# Cr Matheson’s expenses include mobile phone costs but not motor vehicle.


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




                                                                                                                          11
                                                                                               MAV ANNUAL REPORT 2003/4
MAV
ENTITIES SHOULD
UNNECCESARILY
                NOT BE MULTIPLIED

THE SIMPLEST EXPLANATION FOR SOME
PHENOMENON IS MORE LIKELY TO BE ACCURATE
THAN MORE COMPLICATED EXPLANATIONS.
IF YOU HAVE TWO EQUALLY LIKELY SOLUTIONS
TO A PROBLEM, PICK THE SIMPLEST.
THE EXPLANATION REQUIRING THE FEWEST
ASSUMPTIONS IS MOST LIKELY TO BE CORRECT.
KEEP THINGS SIMPLE!
OCCAM'S RAZOR
PRINCIPLE BY 14TH CENTURY LOGICIAN WILLIAM OF OCCAM


  STAFF NUMBERS AS AT 30 JUNE EACH YEAR
  STAFF NUMBERS                1997           1998           1999           2000          2001        2002          2003          2004
  Full time                            24             13             15             16           16           26            23            24
  Part time                              2             1              1              1            0            4              4            3
  Temp/Casual                            -              -              -              -           -             -             2            1
  Vacant/other                           -              -              -              -           -            1              -           2#
  Total staff                          26             14             16             17           16           30            30            30

  Gender
  Male                                   7             6              5              4            6           11            11            10
  Female                               19              8             11             13           10           19            18            18
  Vacant                                 -              -              -              -           -             -             1          2 (f)
  Total staff                          26             14             16             17           16           30            30            30

  EFT* POSITIONS
  MAV filled                          24.1           11.5           14.5           15.5          14          19.7          20.8          20.4
  MAV vacant/other                       -             3              1              1            3             -             -             2
  MAV temp/cas                           -              -              -              -           -             -           0.6           0.6
  Total MAV funded                    24.1           14.5           15.5           16.5          17          19.7          21.4           23

  Grant funded                          1              2              1              2            2            8            4.3           5.6
  Grant vacant                           -              -              -              -           -             -            1              -
  Grant casual                           -              -              -              -           -             -            1              -
  Total EFTS                          25.1           16.5           16.5           18.5          19          27.7          27.7          28.6

  CATEGORIES
  Management                            1              1              1              1            1            1              1            1
  Policy                                6              5              6              8            6           6.9             8            9
  Training & Operations                 3              1              1               -           2           3.8           5.4            6
  Corporate                           14.1            7.5            7.5            7.5           8            8              7            7
  Grant                                 1              2              1              2            2            8            6.3           5.6

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

                          12
                      MAV ANNUAL REPORT 2003/4
MAV ORGANISATION
AS AT 30 JUNE 2004
                                                             MAV
                                                             STATE
                                                             COUNCIL




                                                             MAV
                                                             MANAGEMENT
                                                             BOARD




FINANCE & INSURANCE   SNR ECONOMIST       LEGAL CONSULTANT   CHIEF EXECUTIVE   BUSINESS            COMMERCIALISATION   EXECUTIVE
CONSULTANT                                                   OFFICER           DEVELOPMENT         CONSULTANT          ASSISTANT
                                                                               CONSULTANT                              TO CEO




DIRECTOR POLICY                                                                MANAGER                                 MANAGER
& STRATEGY                                                                     CORPORATE & SECRETARIAT                 PEOPLE &
                                                                                                                       PERFORMANCE




POLICY ADVISER        SENIOR ADVISER      SENIOR ADVISER     SENIOR ADVISER    COMMUNICATIONS      ACCOUNTING          EVENTS MANAGER
                      ENVIRONMENTAL       SOCIAL POLICY      PLANNING          ADVISER             SUPPORT
                      SUSTAINABILITY                                                               OFFICER




POLICY ADVISER        EXECUTIVE OFFICER   DISABILITY                           COMMUNICATIONS      DATABASE            PROJECT OFFICER
                      ECOBUY*             PROJECT OFFICER*                     ADVISER             ADMINISTRATOR




POLICY ADVISER        OFFICER ECOBUY*                                                              RECEPTIONIST




PROJECT MANAGER       PROJECT OFFICER                                                              CORPORATE SUPPORT




POLICY OFFICER        PROJECT MANAGER                                                              PROJECT OFFICER
                      STORMWATER*




POLICY OFFICER        NRM FACILITATOR*




                      PROJECT OFFICER*                                                            *GRANT FUNDED POSITIONS




                                                                                                           13
                                                                                MAV ANNUAL REPORT 2003/4
NEW BUSINESS
STRATEGIES
THE MAV’S OWN BUSINESS DEVELOPMENT
HAS BEEN A FOCUS THIS YEAR. DEVELOPMENTS AROUND IT, PROVISION OF NEW
PROGRAMS AND THE INTRODUCTION OF A PERFORMANCE FOCUSED DEPARTMENT HAVE
ADDED VALUE TO THE ORGANISATIONS MEMBER SERVICES.



      ACT PROGRAM                                        WEBCASTING
      In April 2004 the MAV delivered its inaugural      MAVConnect, a new webcasting facility
      Advanced Councillor Training (ACT) program to      enabling councillors and officers to participate
      16 Victorian councillors at Werribee Mansion       in MAV meetings remotely via the internet, was
      Hotel. This five-day residential program was       launched in September 2003.
      Victoria’s first accredited training program for
                                                         This service is particularly beneficial to regional
      councillors and was sponsored by Regional
                                                         and rural councils who now have better access
      Development Victoria through the Department
                                                         to a range of important policy discussions and
      of Innovation, Industry & Regional
                                                         professional development opportunities without
      Development. The ACT program was
                                                         the added pressure of travelling to the city.
      developed by the MAV in conjunction with Our
                                                         During the year 2003/04 15 meetings were
      People Plus and an advisory committee. The
                                                         broadcast using MAVConnect.
      program engaged participants in debate and
      discussion on a range of local government
      related topics. The program developed              PEOPLE AND PERFORMANCE
      councillors’ leadership skills, enhances their     In response to a growing number of requests
      understanding of a councillor’s role and           from councillors and local government officers
      expands their critical thinking.                   for support in the area of performance
                                                         management and appointment and recruitment,
                                                         the MAV created a new People and
      MAV IT STRATEGY                                    Performance division. Staff in this area work
      In 2004 management consultants Whitehorse
                                                         with councils in defining expectations and
      Strategic Group (WSG) delivered the
                                                         developing processes and behaviours that
      Information and Communication Technology
                                                         support performance and good governance.
      Strategy for the Municipal Association of
      Victoria – Moving to the Future.
      The strategy included an examination of the
      MAV’s business requirements and information
      and communication technology (ICT) delivery
      tools. The outcome was a comprehensive list of
      initiatives that once implemented will position
      ICT to better support the business.
      By the end of the financial year several
      initiatives were already implemented including:
      · an audit of all IT infrastructure
      · the replacement and update of crucial
           backend infrastructure to reduce
           organisational risk, offer better network
           security and improve the back-up facility.




NEW BUSINESS STRATEGIES
          14
              MAV ANNUAL REPORT 2003/4
S




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




                                                                                        NEW BUSINESS STRATEGIES
                                                                                          15
                                                                     MAV ANNUAL REPORT 2003/4
ENVIRONMENT MANAGEMENT IS A KEY
PRIORITY AREA FOR BOTH COUNCILS AND THE MAV. TO ENSURE
LOCAL GOVERNMENT’S RESPONSIBILITIES IN ENVIRONMENTAL MANAGEMENT ARE MET,
THE MAV REPRESENTS THE SECTOR AND LOBBIES FOR ADEQUATE FUNDING ON
COUNCILS’ BEHALF.

      WASTE MANAGEMENT                                       WATER MANAGEMENT
      NATIONAL PACKAGING COVENANT (NPC)                      GREEN PAPER SUBMISSION AND
      A two-year action plan for 2002–2004 was               WATER POLICY FORUM
      submitted by the MAV as part of its requirements       As part of the process for developing a local
      under the National Packaging Covenant. The             government submission to the Government’s
      organisation also worked with the Australian           Green Paper, Securing Our Water Future, the
      Local Government Association (ALGA) and Local          MAV held a major water policy forum with over
      Government Association of Queensland (LGAQ)            60 councils represented. Key policy issues that
      to conduct an independent review of the NPC            formed the basis of the MAV submission to
      as part of the review process for the Covenant.        Government included the impact of un-
      The report, undertaken by Meinhardt                    bundling of water title on irrigation district
      consultants, indicated that councils considered        council rate bases, stormwater management
      the Covenant needed major revision to meet             and water conservation. The MAV has also
      local government concerns.                             provided input to the COAG water reform
                                                             initiatives.
      FINANCIAL ASSURANCE FOR LANDFILLS
      An agreement was reached with the Environment          SUSTAINABLE WATER USE PLANS
      Protection Authority (EPA) on a simplified and cost    The MAV continued its successful partnership
      effective financial approach for councils to provide   with Melbourne Water to assist councils in
      for financial assurance for landfills.                 metropolitan Melbourne to improve water
                                                             conservation. The MAV has established a
      ECOBUY PROGRAM                                         network for councils undertaking water
      ECO-Buy members increased expenditure on               conservation planning and will establish an
      green products from $15.9 million to $33.5             information exchange to allow councils access
      million. To support members, the program, with         to best practice case studies and approaches.
      support of funding partners EcoRecycle Victoria
      and the Victorian Greenhouse strategy,                 SMART SEPTICS PROGRAM
      developed the new ECO-Guide to green                   The Smart Septics program gained funding
      purchasing and also developed an online data           from the EPA to develop further resources to
      base listing over 400 suppliers and thousands          assist local government with domestic waste
      of green products. The ECO-Buy program                 water (septics) management including a
      received a United Nations World Environment            community information resources kit, data
      Day national award.                                    management approaches and a guide to
                                                             technical innovation. The MAV continued to
                                                             work with the EPA Onsite Domestic Wastewater
                                                             Advisory Committee on grey water and septics
                                                             regulatory issues.




ENVIRONMENT
         16
              MAV ANNUAL REPORT 2003/4
T




CLEARWATER PROGRAM-          SUPPORTING SUSTAINABLE
MANAGEMENT OF URBAN STORMWATER.
The success of the MAV’s Clearwater program during 2003/04 can be attributed to the strong framework set
during the program’s infancy that was developed using extensive market research, detailed program planning and
setting benchmarks for capacity building in best practice urban stormwater management. This framework set the
scene for delivering 20 training and education events across the state in 2003/04. A total of 875 local, interstate
and overseas participants attended the Water Sensitive Urban Design tours and workshops, the Doing it Right On
Site summit and face-to-face roadshows held in metropolitan and rural Victoria. The Clearwater InfoExchange
website was launched in November 2003 and hosts over 800 resources, case studies and reports focusing on key
areas of sustainable urban water management. Each month the website receives more than 1500 hits. The
Clearwater Program is jointly managed by the MAV and the Stormwater Industry Association of Victoria and funded
by EPA Victoria through the Victorian Stormwater Action Program. www.clearwater.asn.au
                                                                                                 17    ENVIRONMENT
                                                                      MAV ANNUAL REPORT 2003/4
     NATURAL RESOURCE MANAGEMENT AND                           PUBLIC LIGHTING
     NATIVE VEGETATION MANAGEMENT                              The MAV worked with the Sustainable Energy
     LOCAL GOVERNMENT NRM                                      Authority of Victoria to support a Sustainable
     FACILITATOR PROGRAM                                       Public Lighting Initiative to encourage local
     In April 2004 the MAV entered into a three-               government initiatives in energy efficient public
     year, $360,000 partnership agreement with the             lighting. The MAV also made a submission to
     Federal Government to provide a Local                     the Essential Services Commission review of
     Government Natural Resource Management                    Operation Maintenance and Replacement
     (NRM) Facilitator in Victoria. The purpose of the         charges for public lighting.
     Local Government NRM Facilitator program is
     to communicate Australian and State                       TIMBER TOWNS VICTORIA
     Government NRM policy and information to                  Timber Towns Victoria undertook the
     local government and to improve local                     Implementation of the Forest Practitioner
     government engagement in regional NRM                     Accreditation Scheme plus initiated a national
     processes.                                                meeting of timber councils as part of the ALGA
                                                               Conference in Canberra.
     CAPACITY BUILDING PROJECT
     A major study into the capacity and needs of
     Victorian local government to deliver key                 ASSOCIATION OF BAYSIDE
     elements of sustainable natural resources                 MUNICIPALITIES
     management with a focus on native vegetation              The MAV continued to provide secretariat
                                                               support for the Association of Bayside
     was undertaken by the organisation. The project
     was funded by the National Action Plan for                Municipalities, which continued its work on litter
     Salinity and Water Quality.                               issues around Port Phillip Bay and monitored
                                                               the process for the Channel Deepening Project.

     SUSTAINABILITY
     VICTORIAN LOCAL SUSTAINABILITY
     NETWORK
     More than 40 councils reconfirmed their
     commitment to local sustainability initiatives by
     joining the Victorian Local Sustainability Network
     in February 2004. Additionally, a range of
     organisations supporting Victorian municipal
     councils in their local sustainability initiatives have
     joined the network, including Environs Australia
     Projects (Vic), Planning Institute of Australia (Vic),
     ICLEI A/NZ, VLGA and the Victorian Water
     Industry Association. The network seeks to be a
     learning, information and advocacy forum to
     share and explore different models of local
     sustainability through integrated social,
     environmental, cultural and economic
     approaches.

     LOCAL SUSTAINABILITY ACCORD
     The MAV worked with the State Government
     and other local government bodies to progress
     the idea of a Local Sustainability Accord
     between State and local government to
     recognise the important role councils play
     in sustainability. In April 2004 the Minister
     for Environment agreed to the concept and
     the Accord will be developed over the next
     12 months.




ENVIRONMENT POLICY
         18
              MAV ANNUAL REPORT 2003/4
PROFESSIONAL
 DEVELOPMENT
PROFESSIONAL DEVELOPMENT IS A GROWING
BUSINESS AREA WITHIN THE MAV. ENHANCING SKILLS AND
BROADENING THE KNOWLEDGE BASE OF COUNCILLORS, CEOS AND SENIOR
MANAGERS IS ACHIEVED THROUGH THE DELIVERY OF HIGH LEVEL COURSES, WORKSHOPS & SEMINARS.


                      COUNCILLOR DEVELOPMENT WEEKEND                                   MAV/TELSTRA FELLOWSHIP AWARD
                      Representatives from 58 councils took part in the                The 2003/2004 Telstra/MAV Local Government
                      MAV’s Councillor Development Weekend held                        Fellowship Award was presented to Cr Jackie
                      at the Cumberland Resort in Lorne. The number                    Fristacky from Yarra City Council. The $10,000
                      of councillors attending the event increased by                  bursarship was used to examine the latest
                      55 percent from the previous year, making the                    international thinking on traffic management
                      2003 Councillor Development Weekend the                          measures and road safety models that have
                      most successful since the annual event began in                  reduced the incidence of accident and injury in
                      2000. Of the 163 councillors in attendance:                      local streets. Cr Fristacky visited Barcelona,
                                                                                       Munich and Manchester to investigate successful
                      ·   70 councillors were newly elected in 2003
                                                                                       local government management initiatives that
                      ·   73 were re-elected in 2003
                                                                                       have reduced speed and significantly improved
                      ·   15 were elected in 2002
                                                                                       pedestrian safety.
                      ·   5 were elected in 2001


                      MAV TRAINING COURSES
                      There have been a number of new
                      developments as part of the MAV’s ongoing
                      commitment to provide quality training for
                      councillors. The MAV delivered on its promise
                      to cater for both newly elected and re-elected
                      councillors by expanding existing professional
                      development programs. 2003/2004 saw the
                      launch of the Advanced Councillor Training
                      program and Councillor Fundamentals and
                      the commencement of GoGrad.




                                                                                     PROFESSIONAL DEVELOPMENT
                                                                                          19
                                                                          MAV ANNUAL REPORT 2003/4
     ACT PROGRAM                                      GOVERNANCE
     The Advanced Councillor Training program is      Changes to the Local Government Act during
     Victoria’s first accredited professional         2003/2004 required councils to develop a
     development program for councillors. The April   Code of Conduct that includes:
     2004 inaugural program was presented as a
                                                      · Council’s rules of conduct;
     five-day residential course at the Werribee
                                                      · Procedures to be followed in relation to
     Mansion Hotel. Guest speakers covered a wide
                                                         conflict of interest;
     range of topics such as leadership, civics,
                                                      · Processes to resolve disputes between
     democracy, governance, policy development
                                                         councillors; and
     and entrepreneurship.
                                                      · Caretaker procedures to apply during
                                                         an election.
                                                      The MAV provided assistance to councils in
                                                      developing their Codes of Conduct and will
                                                      continue to guide councils through the next
                                                      phase of changes.
                                                      A Governance Officers’ Network was also
                                                      established with its first meeting held in
                                                      February 2004. The objective of the network
                                                      is to provide officers with opportunities to
                                                      access information and share knowledge and
                                                      expenses. It also provides a useful sounding
                                                      board for the development of councillor
                                                      training initiatives such as post council
                                                      election induction programs.




PROFESSIONAL DEVELOPMENT
         20
             MAV ANNUAL REPORT 2003/4
GOVERNANCE SUPPORT                       THE MAV WAS APPROACHED BY
A REGIONAL COUNCIL TO FACILITATE A DISCUSSION AIMED AT IDENTIFYING
KEY ISSUES FOR INCLUSION IN THE DEVELOPMENT OF A CODE OF CONDUCT AS REQUIRED UNDER
CHANGES TO THE LOCAL GOVERNMENT ACT.
Councillors and senior officers attended the informal two-hour session, which focused on reinforcing positive
behaviours and developing a framework for councillors and staff to drive good governance. At the end of the
session, decisions were made around balancing a high level of transparency and openness in council decision
making while maintaining productivity and effectiveness.The council has used the issues and ideas raised in this
discussion to develop a draft Code of Conduct and will use the support of the MAV to finalise their code.



                                                                                PROFESSIONAL DEVELOPMENT
                                                                                     21
                                                                     MAV ANNUAL REPORT 2003/4
SOCIAL POLICY
THE MAV’S         PORTFOLIO IS ONE
             POLICY
OF THE LARGEST WITHIN THE ORGANISATION.
RESPONSIBLE FOR ASSISTING COUNCILS TO DELIVER VITAL
COMMUNITY SERVICES, THE ORGANISATION REPRESENTS AND LOBBIES ON BEHALF
OF THE SECTOR TO ENSURE STATE AND FEDERAL GOVERNMENTS RECOGNISE THE
IMPORTANT ROLE COUNCILS PLAY IN PROVIDING HUMAN SERVICES.




      COMMUNITY CARE FOR THE AGEING                       OH&S GUIDELINES FOR HOME CARE
      CAMPAIGN                                            INDUSTRY
      In response to a State Council motion in 2003       A project to improve occupational health and
      to develop and implement a strategy to secure       safety (OH&S) in the Victorian home care
      adequate funding for the ageing population,         industry was initiated by the MAV and Victorian
      the MAV commenced work on the Community             Association of Health and Extended Care
      Care for the Ageing Campaign by developing a        (VAHEC). The project, funded by DHS, will
      communications kit for councils. To increase its    develop guidance material for councils around
      lobbying power on this issue the MAV joined         improving employee OH&S.
      the Community Care Coalition (CCC) as the
      Victorian representative to develop and             CULTURAL EQUITABLE GATEWAYS
      implement a National Community Care                 STRATEGY
      Awareness Program. The MAV will have an             MAV received funding from the State
      ongoing role in this campaign including             Government to assist councils in making their
      participation in CCC meetings, developing           Home and Community Care services more
      strategic directions and activities and providing   culturally responsive to older people from ethnic
      advice, support and resources to councils.          communities.

      FOOD SERVICES REVIEW
      The Victorian Review of Home and Community
      Care (HACC), a 12 month partnership project
      between the MAV and Department of Human
      Services, was completed. The final report
      included detailed recommendations for short,
      medium and long term impacts on the
      improvement of HACC food services.




SOCIAL POLICY
           22
              MAV ANNUAL REPORT 2003/4
Y




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


                                                                                                23
                                                                                                      SOCIAL POLICY
                                                                     MAV ANNUAL REPORT 2003/4
      MUNICIPAL EARLY YEARS PLANS                      IMMUNISATION
      FRAMEWORK                                        A study undertaken by the MAV showed
      A framework for Municipal Early Years Plans      Victorian councils cover 60 to 80 percent of
      was prepared jointly by the MAV and DHS and      the cost of delivering vaccines. The MAV will
      circulated to councils to provide practical      commence lobbying Federal and State for
      assistance in developing their plans. Councils   further immunisation funding.
      are required to develop these plans by July
      2004 as part of the new Maternal and Child
                                                       DISABILITY ACCESS
      Health funding.
                                                       The Access, Services, Support, Respect: Local
                                                       Governments' Response to Cultural Diversity in
      LOBBYING GIVES FAMILY DAY CARE A                 Victoria report was launched at the MAV
      FUTURE                                           Annual Conference. Led by the Victorian
      MAV represented the ALGA in a national           Multicultural Council, the MAV played a major
      lobbying campaign around the Federal             role on the project reference group by
      Government’s review of the broadband subsidy     distributing a survey to all 79 councils for
      and future of family day care. The continued     analysis.
      provision of broadband was announced in the
                                                       All Victorian councils responded to the MAV’s
      2004/05 Federal Budget.
                                                       Disability Access and Inclusion Survey, which
                                                       measured their progress in developing and
                                                       implementing strategies for people with a
                                                       disability. Response rates increased from
                                                       70 percent in 1998/99, 88 percent in
                                                       2001/02 to 100 percent in 2003/04.
                                                       Information received showed 97 percent of
                                                       councils have developed, or committed to
                                                       develop, a Disability Action Plan — an increase
                                                       of 22 percent from last year.




SOCIAL POLICY
           24
              MAV ANNUAL REPORT 2003/4
ECONOMICS &
FINANCE
ACHIEVING ECONOMIC SUSTAINABILITY IS A MAJOR
PRIORITY FOR LOCAL GOVERNMENTS. THE MAV
CONTINUOUSLY ADVOCATES FOR A BETTER FINANCIAL DEAL ON ALL SERVICES
PROVIDED BY THE SECTOR.


                 COST SHIFTING                                                 STATE BUDGET 2004/05
                 On 24 November 2003, the final report on                      Several pressing issues raised by the MAV in its
                 the Inquiry into Cost Shifting on to Local                    pre-Budget submission on behalf of local
                 Government — Rates and Taxes – a Fair Share                   government were addressed in the
                 for Responsible Local Government — was                        announcement of the 2004/05 State Budget
                 tabled in Parliament, signaling the conclusion                including:
                 of the Federal Government’s inquiry. The
                                                                               · An increase in pensioner rate concessions
                 inquiry clearly acknowledged deficiencies in
                                                                                  ($43 million)
                 local government’s revenue base against its
                                                                               · A commitment to providing recurrent and
                 roles and responsibilities. The MAV viewed the
                                                                                  capital spending on public libraries
                 report as an important step in acknowledging
                                                                                  ($8.5 million)
                 the existence of cost shifting and a first step
                                                                               · $3.1 million over three years to implement
                 towards rectifying the problem in collaboration
                                                                                  process improvements to the planning
                 with other levels of government.
                                                                                  system as outlined in Better Decisions Faster.
                 In the report 18 recommendations for reform                   · Significant spending on arterial roads
                 were made, including:                                            ($237 million)
                                                                               · A significant allocation to the statewide
                 · All three levels of government working
                                                                                  blackspots program ($130 million)
                    together to develop an inter-governmental
                    agreement on the roles and responsibilities
                    of local government
                 · A summit on inter-governmental relations to
                    be held by COAG in 2005
                 · A new model for distribution of financial
                    assistance grants (FAGs) to be based on
                    equalisation principles (according to need)
                    and phased in over three years.




                                                                                               ECONOMICS
                                                                                              25                  & FINANCE
                                                                   MAV ANNUAL REPORT 2003/4
     FIRE SERVICES LEVY                                  NATIONAL COMPETITION POLICY
     Upon receipt of written correspondence from         In early 2004 the State Government announced
     the Metropolitan Fire and Emergency Services        an increase of 4.4 percent on last year’s
     Board (MFESB) to councils advising of a 12–15       funding to councils under the Government’s
     percent increase in council contributions to the    commitment to share a proportion of National
     service for the financial year to 30 June 2005,     Competition Policy (NCP) payments. As well as
     the MAV immediately commenced a lobbying            complying with the general requirements of the
     campaign to halt the rapid rise. Discussions        NCP, councils also have to show that they are
     were held between the MAV, the State and the        reporting appropriately to their communities on
     Insurance Council of Australia seeking              Best Value and implementing asset
     justification of the increase. The MAV              management plans under the Local
     negotiated for a local government position on       Government Improvement Incentive Program
     the MFESB Board for the second half of 2004         (LGIIP). The MAV, Department of Treasury &
     as well as a commitment from the State to           Finance and Department for Victorian
     publicly announce that the fire service levy is a   Communities hosted a series of training
     State tax.                                          sessions that provided an overview of the Local
                                                         Government Improvement Incentive Program.
     REFORMING THE PERIN COURT SYSTEM                    The MAV continues to monitor all developments
     The MAV has worked closely with a number of         on behalf of the local government sector.
     metropolitan councils over concerns with the
     inefficiencies of the PERIN Court system for
     collecting and recovering fines and penalties.
     The MAV’s intense lobbying activities through
     the establishment of a PERIN Court Reference
     Group included a formal submission to the
     Attorney General; seeking expressions of
     interest for third party collection agencies and
     meetings with the Department of Justice. A call
     for change to the PERIN Court system was also
     a key priority in the MAV’s State Budget
     submission. Advocacy for change resulted in
     two projects from the State: a whole of
     government review of infringements and a
     review of the costs of the PERIN Court.




ECONOMICS 26& FINANCE
             MAV ANNUAL REPORT 2003/4
COST SHIFTING-       FEDERAL INQUIRY ACKNOWLEDGES LOCAL
GOVERNMENT’S ROLE IN PROVIDING VITAL COMMUNITY SERVICES.
The MAV responded to the 18 recommendations made in the final report of the Inquiry into Cost Shifting onto
Local Government. The Association became actively involved in developing an Intergovernmental Agreement to
ensure that reforms adopted will provide long term financial sustainability for local government and equity for
all communities.




                                                                                                ECONOMICS
                                                                                               27           & FINANCE
                                                                    MAV ANNUAL REPORT 2003/4
INFRASTRUCTU
LOCAL GOVERNMENT RESPONSIBLE FOR THE
MANAGEMENT OF OVER $33 BILLION WORTH OF
ASSETS AND INFRASTRUCTURE.     THE MAV WORKS IN PARTNERSHIP WITH
COUNCILS TO RAISE ISSUES AROUND IMPROVING ASSET MANAGEMENT AND
LOBBIES ON THEIR BEHALF ON LEGISLATIVE REFORMS.



      MAV PLAYS PART IN FIXING LOCAL                      ASSET MANAGEMENT CONFERENCE
      ROADS                                               The MAVs Asset Management Conference
      The MAV worked closely with the ALGA on             attracted over 250 delegates from Australia and
      securing adequate ongoing local roads funding       overseas. Strong support was given for the
      programs. The Commonwealth’s Auslink White          establishment of a national local government
      Paper contained initiatives to improve long-term    direction for asset management including
      land transport infrastructure needs of              standards and policies.
      communities while the Roads to Recovery (R2R)
      program was extended and a further $1.2b of
                                                          SAFEROADS CONFERENCE
      funding was committed over the next four years
                                                          The Saferoads partnership — MAV, VicRoads,
      to Australian local government. R2R has been        Victoria Police, RACV, TAC and LGPro —
      instrumental in widening and reconstructing
                                                          convened the third Saferoads (Local
      crumbling roads, building new bridges,              Government Road Safety) Conference in May
      improving road safety and stimulating
                                                          2004. Internationally renowned road safety
      economic development. The MAV convened              experts shared ideas, knowledge and resources
      meetings of council infrastructure and asset
                                                          to address road safety issues in local
      managers to provide regular updates of the          communities with Victorian councils. The
      process. In May, the MAV kick-started a state-      conference highlighted the pivotal role local
      wide process that would enable councils to
                                                          government plays in improving road safety
      maximize their outcomes from the R2R and            through local partnership initiatives and
      Auslink processes.
                                                          managing the extensive local road network.

      STEP PROGRAM                                        HUGE COST SAVINGS FROM LGOS
      Managing community assets is of relevance to
                                                          The MAV Local Government Online Services
      many local government areas including               project, funded through the Federal
      nonfeasance immunity and public liability
                                                          Government’s Networking the Nation program,
      insurance premiums.                                 has achieved $25 million in cost savings to
      There are 75 councils involved in the MAV's         local government, representing a four-fold
      STEP Asset Management Improvement Program,          return on investment.
      which provides councils with a best practice
      framework for continuous improvement of asset       NATIONAL ONLINE CONFERENCE
      management practices. The MAV held Step             More than 160 delegates from across Australia
      Road Management Plan Regional Workshops             attended the MAV National Local Government
      throughout the year to keep councils up-to-date     Online Demonstration Conference held in
      with the progressions of the Road Management        October 2003. The major theme of the
      Bill, assess councils’ current position in regard   conference was enhancing local government
      to the preparation of road management plans         efficiencies to deliver 24-hour local community
      and to assist individual councils.                  access to information and services.




INFRASTRUCTURE
          28
              MAV ANNUAL REPORT 2003/4
URE




A LONG ROAD RESULTS IN NEW BILL                   THE MAV HAS BEEN
WORKING CLOSELY WITH THE STATE GOVERNMENT TO ENSURE THE PROPOSED
ROAD MANAGEMENT BILL WAS DEVELOPED WITH CONSIDERATION OF THE
INTERESTS OF LOCAL GOVERNMENT.
The proposed road management legislation will establish a framework for the management of roads including:
· A process to develop standards for the inspection, maintenance and repair of roads and road infrastructure
   (including public utilities and other infrastructure on roads) to ensure a safe and efficient road network
· Simplification of road classifications with VicRoads being responsible for all main roads
· Demarcation of functions between VicRoads and municipal councils
· Defining the powers and responsibilities of road authorities, utilities and other bodies that carry out road works
The MAV has worked in conjunction with VicRoads to facilitate regional workshops to discuss the Road
Management Bill and its links to the Step Asset Management Improvement                                  INFRASTRUCTURE
Program.                                                                                     29
                                                                  MAV ANNUAL REPORT 2003/4
COMMUNICATIO
THE MAV COMMUNICATIONS IS THE
DRIVING FORCE BEHIND THE ORGANISATION’S COMMITMENT
TO PROVIDE RELEVANT INFORMATION TO ITS MEMBERS AND
RAISE THE PROFILE OF LOCAL GOVERNMENT.




     COMMUNICATING EFFECTIVELY                         MEDIA MANAGEMENT
     The Communications Unit provides direction        In 2003/04 the main issues MAV made media
     and strategic advice to the MAV President, CEO    comment on were:
     and policy areas to promote local government
                                                       ·   MAV’s Roads to Recovery funding campaign
     activities and campaigns. By working closely
                                                       ·   Council rate rises
     with the media, the communications unit plays
                                                       ·   LAS superannuation shortfall
     a vital role in creating a better public
                                                       ·   Public library funding
     perception of the responsibilities and services
     of the sector.                                    The primary issues covered in metropolitan,
                                                       regional and rural media related to the key
                                                       priority issues and campaigns.
     NEW LOOK PUBLICATIONS
     To improve MAV branding, all communications       It is positive to note that the majority of media
     material produced by the organisation was         coverage was proactive, however, as the peak
     redesigned for consistency. The MAV Bulletin,     body for local government, the MAV has
     President’s Report, Milestones and regular        strongly positioned itself within the media to
     publications for policy areas including           be contacted on many smaller local issues
     planning and environment are distributed to       each month.
     all member councils and are available on
                                                       MEDIA COVERAGE 1 JULY 2003 –
     the organisation’s website.
                                                       30 JUNE 2004




                                                                                            PRINT 64%


                                                                                            RADIO 29%


                                                                                            INTERNET 4%


                                                                                            TELEVISION 3%

                                                       Source: Rehame




COMMUNICATIONS
         30
             MAV ANNUAL REPORT 2003/4
ONS




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




                                                                                                 31
                                                                                                      COMMUNICATIONS
                                                                      MAV ANNUAL REPORT 2003/4
     MEMBER SURVEY
     In December 2003 the MAV distributed a
     member survey to councils for the purpose of
     measuring sector-wide views of the organisation
     and to obtain feedback on the MAV’s
     performance.
     Members were asked to rate the importance of
     identified issues and the MAV’s performance.
     Responses from 129 councillors and CEOs
     showed the average MAV performance for all
     survey factors increased from 59.7% in 1999 to
     70.4% in 2003. In benchmarking terms, this
     placed the MAV in the top quartile of 42 public
     sector organisations, while in 1999 MAV was in
     the bottom quartile.
     The MAV will conduct a membership survey
     every two years to track the organisation’s
     improvement in meeting the needs of its
     members and to confirm the key characteristics
     and services of importance to the sector.
     The findings of the survey will be used to
     guide the MAV’s ongoing activities and
     priorities in order to ensure the performance
     of the organisation meets the needs and
     expectations of member councils.


     Top Ten Services of Importance                                          2003 ranking
     Lobbying to State and Federal Government                                92.1%
     Funding from State and Federal Government                               90.8%
     Managing sector relationships with State Government                     89.4%
     Social policy – capacity to negotiate funding for councils              89%
     Planning – consultation with sector on important issues                 88.7%
     Infrastructure – consultation with sector on important issues           88.6%
     Economics – ability to influence legislative and policy outcomes        88.4%
     Ensuring appropriate brokerage arrangements for general insurance       88.4%
     Infrastructure – ability to influence legislative and policy outcomes   88.1%
     Provision of public liability and professional indemnity insurance      87.8%




COMMUNICATIONS
         32
              MAV ANNUAL REPORT 2003/4
PLANNING
THE MAV ASSISTS COUNCIL OFFICERS
INCREASINGLY, COUNCILLORS IN PERFORMING
                                                                                                               AND,
                                                                                                                         THEIR ROLE
WITHIN THE CONSTANTLY CHANGING PLANNING ENVIRONMENT.           THE CHALLENGES
COUNCILS FACE ARE SUPPORTED BY THE MAV TO ENSURE LOCAL GOVERNMENT’S ROLE IN THE
PLANNING SYSTEM IS RECOGNISED.




                    RURAL PLANNING REVIEWS                                                PRE-LODGEMENT CERTIFICATION
                    The Proposed New Zones for Rural Victoria                             The MAV/DSE Continuous Improvement
                    prohibited construction of dwellings on existing                      Program received $50,000 to roll-out the pre-
                    lots below the minimum lot size. Concerned                            lodgement certification concept. The funding
                    over the lack of procedural fairness for affected                     was used to engage a facilitator to assist in the
                    property owners in green wedge zones, the MAV                         operational set up and promotion of pre-
                    prepared a submission to the Minister for                             lodgement certification. In Victoria nine councils
                    Planning focusing on issues raised by the sector.                     established a pre-lodgement certification system.
                    Representation by the MAV and councils played                         Pre-lodgement certification is designed to fast
                    a major role in the continuation of some existing                     track planning application timeframes by
                    rights in the proposed farm zones and a                               encouraging high quality applications to be
                    commitment by the State to honour expectations                        lodged.
                    of purchasers on re-zoned land in green wedge
                    areas.                                                                SPEAR PILOT PROJECT
                                                                                          The MAV participated in a working group
                    WIND FARMS                                                            overseeing a pilot program of Streamlined
                    MAV held a forum to discuss the State                                 Planning through Electronic Applications and
                    Government's planning policy on the siting of                         Referrals (SPEAR). This program will enable
                    wind farms in Victoria. The Minister for Planning                     subdivision applications to be lodged, managed,
                    attended the forum to provide clarification on                        referred and tracked online. MAV assisted in the
                    the State Government's planning policy following                      coordination of the SPEAR user interface
                    the release of the Victorian Wind Atlas. Councils                     development, establishment of model
                    put forward relevant issues of concern,                               agreements between DSE and councils and held
                    determined a sector-wide position and                                 professional development forums for council
                    developed an action plan.                                             planners and municipal building surveyors.




                                                                                                    33
                                                                                                                             PLANNING
                                                                        MAV ANNUAL REPORT 2003/4
     MELBOURNE 2030                                        BUILDING GUIDE FOR COUNCILLORS
     DSE released a detailed five-year                     The MAV worked closely with the Building
     implementation program for its blueprint for          Commission to develop a building guide for
     sustainable growth — Melbourne 2030. This             councillors. Building in Victoria - A Local
     program was evaluated by the MAV and                  Government Guide provides detail on local
     feedback was gathered from councils. MAV              government’s role within the building control
     stressed the need for an ongoing financial            system in Victoria. The MAV’s Professional
     commitment through the Melbourne 2030                 Development Reference Group provided advice
     targeted grants program and a meeting for             and comment during development of the guide.
     Melbourne 2030 portfolio councillors was held
     to discuss the implementation program prior to
     the State Budget announcement.


     NEIGHBOURHOOD CHARACTER
     MAV met with several councils and the DSE to
     discuss difficulties and frustrations councils were
     experiencing in seeking to give statutory effect
     to neighbourhood character in their planning
     schemes. The MAV met with the Minister for
     Planning to discuss the need to strike an
     appropriate balance between planning controls
     to protect neighbourhood character and the
     objectives for housing in Melbourne 2030 was
     discussed.




PLANNING      34
              MAV ANNUAL REPORT 2003/4
WIRED FOR BROADBAND SERVICES                 AN INITIATIVE
OF WHITTLESEA, CASEY, CARDINIA, MELTON AND WYNDHAM COUNCILS,
THE PROJECT AIMS TO ENCOURAGE THE EARLY PROVISION OF BROADBAND INFRASTRUCTURE
AND SERVICES TO NEW HOUSING ESTATES IN MELBOURNE'S FRINGE SUBURBS.
The MAV Wired Development Project commenced in August 2003. The MAV managed an Expression of Interest
(EOI) process to lease the conduit network to a broadband infrastructure operator who would install and manage
the delivery of a range of services including telephony, high speed internet and video services. A total of seventy-
three companies registered for the EOI and 11 submissions were received from a range of companies and joint
ventures. This positive response demonstrated an interest by commercial operators to invest in broadband
telecommunications access infrastructure by utilising the conduit networks of councils in new subdivisions.



                                                                                                  35
                                                                                                                PLANNING
                                                                       MAV ANNUAL REPORT 2003/4
GENERAL PROJE
MAV WORKS IN PARTNERSHIP WITH
GOVERNMENT DEPARTMENTS AND OTHER ORGANISATIONS TO
                                                                     STATE

DELIVER JOINT INITIATIVES AND PROGRAMS TO LOCAL
GOVERNMENT FOR THE BETTERMENT OF THE COMMUNITY.

     JOBS FOR YOUNG PEOPLE                             EMERGENCY MANAGEMENT
     The MAV supported the State Government’s          The MAV worked actively to improve the
     Jobs for Young People program by facilitating     relationships and build alliances between itself
     information roadshows around the state,           and the key bodies with responsibilities in
     conducting a survey of all councils and           emergency management such as Victoria
     promoting the employment scheme through its       Police, SES, CFA, Department of Human
     publications. Almost 60 Victorian councils were   Services and Office of the Emergency Services
     funded $2.56 million to offer traineeships in     Commissioner.
     local government through the first round of the
                                                       The CEO of the MAV sits as the local
     Jobs for Young People program in 2003/04. In
                                                       government representative on the Victorian
     its first round, Jobs for Young People created
                                                       Emergency Management Council chaired by
     171 new jobs and is expected to create a total
                                                       the Minister for Police and Emergency Services.
     of 1,100 new employment and training
     opportunities for young people over the next
     four years.                                       COMMUNITY MATTERS
                                                       In a joint initiative by the MAV and
                                                       ourcommunity.com, councils received gift
     TOBACCO                                           certificates to issue to schools and community
     A report compiled by the MAV showed local
                                                       groups within their municipality that entitled the
     government had significant involvement in
                                                       bearer to subscribe to a free capacity building
     implementing tobacco reforms during
                                                       newsletter titled Our Community Matters. Over
     2003/04. Key achievements included:
                                                       1000 community groups subscribed to
     · 3,350 education visits to tobacco retailers     February’s first edition of the newsletter which
     · 3,927 education visits to eating                featured practical information on insurance and
         establishments with on-premises dining        risk management; financial membership
     · 1,461 education visits to licensed premises     management; community leadership and
     · 1,532 test purchases at tobacco retailers       advocacy; management and training;
         over 120 days.                                marketing and media; boards, committees of
                                                       management and governance; and community
     The MAV will continue to provide councils with
                                                       and business partnerships.
     support, consultation and information as the
     State Government proposes to strengthen anti-
     smoking laws.




GENERAL PROJECTS
          36
             MAV ANNUAL REPORT 2003/4
ECTS




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




                                                                                                  37
                                                                                                       GENERAL PROJECTS
                                                                       MAV ANNUAL REPORT 2003/4
COMMITTEES
AS THE PEAK BODY FOR LOCAL GOVERNMENT, THE
                                           MAV IS REGULARLY ASKED BY BOTH
STATE AND COMMONWEALTH GOVERNMENTS AND RELATED AGENCIES TO PROVIDE
NOMINATIONS OR REPRESENT THE SECTOR ON A RANGE OF EXTERNAL COMMITTEES.


        EXTERNAL COMMITTEES                                  Goulburn North East Water for Growth Initiative    Saferoads Partnership
                                                             Committee                                          State Emergency Mitigation Committee
        A current or former councillor, council
                                                             Hospital Admission Risk Program (HARP)
        officer, MAV Board member or MAV                                                                        State Emergency Recovery Planning Committee
                                                             Reference Group
        employee represented local                                                                              State Emergency Relief Sub-Committee
                                                             Influenza Pandemic Planning Committee
        government on the following                                                                             State Flood Policy Committee
                                                             Infringements Framework Reference Group
        committees during 2003/04:                                                                              State of the Parks Stakeholder Reference Group
                                                             Inter-Governmental Coastal Reference Group
                                                                                                                State Weed Policy Committee
        Accessible Built Environment Working Group           LGIIP Assessment Panel for Compliance
                                                                                                                Stormwater Industry Association of Victoria
        Advisory Committee on Public Libraries               2003/2004
                                                                                                                Tackling Weeds on Private Land Initiative
        Agricultural Subcommittee of the State               LGPro Human Resources Special Interest Group
                                                                                                                Stakeholder Reference Group
        Emergency Recovery Planning Committee                Library Network Committee
                                                                                                                Telecommunications Working Group
        Alpine Advisory Committee                            Local Sustainability Accord Committee
                                                                                                                Timber Towns Victoria
        Animal Welfare Advisory Committee                    M2006 Commonwealth Games Emergency
                                                                                                                VicRoads Board (Roads Corporation Advisory
        Association of Bayside Municipalities                Management Services Working Group
                                                                                                                Board)
        Association of Providers for Inclusive Recreation,   MAV/DHS Disability Services Working Party
                                                                                                                Victorian Advisory Committee for General
        Sport, Arts and Tourism                              MAV/DHS HACC/Primary Care Working Party            Practice Sub-committee
        Association of Regional Waste Management             MAV/DHS Community Care Partnerships                VicHealth Planning and Health Advisory Panel
        Groups                                               Working Party
                                                                                                                Victorian Agricultural Chemicals Advisory
        Australian Building Codes Board                      Melbourne 2030 Implementation Reference            Committee
        Australian Environmental Labelling Association       Group
                                                                                                                Victorian Catchment Management Stakeholders
        Advisory Committee                                   Melbourne Water / VicSES Liaison Group
                                                                                                                Forum
        Broiler Code Committee                               Melbourne Water Drainage Implementation            Victorian Childcare Industry Liaison Group
        Building Regulation Advisory Committee               Steering Committee
                                                                                                                Victorian Community Care Coalition
        Business Skills Victoria Board                       Metropolitan Fire and Emergency Service Board
                                                                                                                Victorian Disability Advisory Council
        Commonwealth Aged Care Advisory                      Metropolitan Transport Forum
                                                                                                                Victorian Emergency Management Council
        Committee                                            Ministerial Advisory Council on Public Libraries
                                                                                                                Victorian Feedlot Committee
        Commonwealth Aged Care Planning and                  Ministerial Drought Taskforce
        Building Approvals Issues Forum                                                                         Victorian Food Safety Council
                                                             Ministerial Employment Advisory Panel
        Commonwealth Children’s Services Planning                                                               Victorian Jurisdictional Recycling Group
                                                             Ministerial Housing Committee
        Advisory Committee                                                                                      Victorian Litter Action Alliance Steering
                                                             Municipal Emergency Management                     Committee
        Community Health Policy Reference Group
                                                             Enhancement Group
        Community Safety Month Reference Group                                                                  Victorian Local Government Disability Planners'
                                                             Municipal Emergency Management Plan Audit
                                                                                                                Network
        Community Services and Health Industry               Committee
        Training Board                                                                                          Victorian Ministerial Housing Council
                                                             National Kerbside Recycling Group
        Coordination Committee for Local Government                                                             Victorian Road Based Public Transport Advisory
                                                             National Local Government Training &
                                                                                                                Committee
        Country Fire Authority                               Professional Development Group
                                                                                                                Victorian Road Freight Advisory Council
        Country Town Water Supply and Sewerage               National Packaging Covenant Council
        Project Steering Committee                                                                              Victorian Road Safety Reference Group
                                                             National Parks Advisory Council
        Development Assessment Forum                                                                            Victorian Settlement Planning Committee
                                                             Neighbourhood Environment Improvement
        DSE Continuous Improvement Program                                                                      Victorian Speed Limit Advisory Group
                                                             Plans Committee
        DSE Stormwater Conservation Fund Steering                                                               Victorian Stormwater Advisory Committee
                                                             Personal Emergency Plans Project Steering
        Committee                                            Committee                                          Victorian Universities Rural Health Consortium
        DSE Sustainability In Built Environment              Place Names Committee                              Vision Super Board
        Reference Group                                                                                         Women’s Participation in Local Government
                                                             Port Phillip & Westernport Catchment
        Eco-Buy Reference Group                              Management Authority Local Government              Coalition
        Emergency Management Manual Victoria –               Working Group                                      Working Party on Council Sports Facility
        Strategy Group                                       Public Administration and Emergency Services       Tenancy Agreements – Insurance & Indemnities
        Environmental Weeds Working Group                    Public Land Stewardship Reference Group            Year of the Built Environment Steering
        Committee                                                                                               Committee
                                                             Public Records Advisory Committee
        EPA On-site Wastewater Advisory Group
                                                             Public Transport Access Committee
        Fire Refuges in Victoria Steering Committee
                                                             Rural Disputes Settlement Centre Working
        Flood Warning Consultative Committee Victoria        Group
        Forest Health Advisory Committee                     Rural Workforce Agency Victoria



              38
             MAV ANNUAL REPORT 2003/4
INTERNAL COMMITTEES                                     communicate and provide resource support on              consultation between the MAV and VicRoads at
                                                        environmental policy issues relevant to the sector.      an executive level, to identify issues of mutual
The MAV has established a number of advisory
                                                                                                                 issues and concern and to establish arrangements
committees to assist the organisation in developing     MAV/EcoRecycle Local Government Buy
                                                                                                                 for more detailed consideration and resolution of
policies. These committees serve to benefit the         Recycled Alliance Steering Committee:
                                                                                                                 such issues.
local government sector by providing opportunities      Representatives from funding partners provides
for the exchange of information. MAV advisory           direction for the ECO-Buy program.                       MAV Competition Committee: To provide
committees include:                                                                                              discussion and consultation about competition
                                                        Indigenous Interagency Coordination
MAV Human Services Portfolio                                                                                     policy and the Local Government Improvement
                                                        Committee: Comprises representatives from
                                                                                                                 Incentive Program (LGIIP), and to address issues
Committee: Provides strategic advice to the             State and Federal Government agencies involved
                                                                                                                 around training, implementation and compliance.
MAV Board on social policy and human services           in service delivery to Indigenous people, and
issues, particularly in intergovernmental relations.    representatives from local government. Its terms         Good Governance Advisory Group: To
The committee also facilitates consultation with        of reference include assisting local government          improve the overall standard of democratic
regional groupings of councils on current               and other agencies to maintain and improve their         governance throughout local governments by
statewide issues.                                       governance responsibilities for Indigenous               identifying existing best practice initiatives and
MAV Strategic Environment Advisory                      communities, and taking a whole-of-government            making recommendations to assist the MAV,
                                                        approach to furthering reconciliation between            VLGA, LGPro, the State Government and the
Group: Provides strategic advice to the MAV
                                                        non-Indigenous and Indigenous Victorians.                Victorian community to promote and progress
Board on environmental issues of importance to
                                                                                                                 democratic governance at the local level.
local government and the needs and issues of            MAV Library Working Party: Provides
members in relation to delivery of environmental        support to the MAV on campaigning for                    Wired Development Consortium: The
outcomes.                                               improved outcomes for councils in public library         purpose of the consortium is to progress
MAV Planning Advisory Group: Provides                   funding, policy input and planning.                      investment in broadband telecommunications
                                                                                                                 infrastructure by utilising the conduit networks of
strategic advice to the MAV Board on strategic and      Library Policy Sub-Group: Created by the
                                                                                                                 new outer-metropolitan council subdivisions.
statutory planning issues impacting on local            Library Working Party to develop the detail of a
government and guides MAV policy and position           public libraries policy. It is composed of               MAV/EcoRecycle Victoria Liaison
development on planning related issues.                 representatives from the MAV (Board Member               Committee: A quarterly forum between senior
MAV Economics and Finance Advisory                      and officer), VicLink and Country Public Libraries       staff within the MAV and EcoRecycle Victoria and
                                                        Group of Victoria, as well as a councillor and a         the EcoRecycle Board to consider and advance
Group: Provides strategic advice to the MAV
                                                        council officer.                                         strategic waste management issues of mutual
Board and provides support to achieve objectives
                                                                                                                 interest and relevance to both State and local
relating to financial sustainability for local         Victorian Local Sustainability Network: A
                                                                                                                 government.
government, including the development of               group of councils and stakeholders actively
campaigns, submissions and analysis of issues.         pursuing local sustainability approaches such as          MAV PERIN Reference Group: provides advice
MAV Strategic Transport and Infrastructure Local Agenda/Action 21 plans. The meetings                            to the MAV on issues with the infringement system
                                                       offer a networking opportunity for exchange of            and the enforcement of outstanding infringement
Advisory Group: Provides strategic advice to the
                                                       ideas on sustainability.                                  notices. It is composed of council officers from
MAV on infrastructure and transport issues impacting
                                                                                                                 predominantly metropolitan Melbourne.
on local governments and assists the MAV Board to      Right to Farm Advisory Group: Comprises
carry forward key policies and campaigns in this area. mainly councillor representatives from councils across    National Eco-Buy Alliance: The National
Professional Development Reference                     Victoria to provide advice to the MAV on right to         Alliance aims to support and partner other states
                                                       farm matters, which primarily relate to the tensions      and territories in the establishment of their own
Group: Provides input into the MAV’s professional
                                                       between farm practices and residential development.       successful green purchasing programs. The MAV
development program, identifies ongoing areas of
                                                                                                                 has encouraged all State Local Government
need within the sector to be addressed, and            MAV Domestic Wastewater Management
                                                                                                                 Associations and the ACT Government to
encourages participation of colleagues in the MAV      Steering Committee: The Committee is
                                                                                                                 become members. To date the membership
professional development program.                      responsible for providing project management
                                                                                                                 comprises MAV, WALGA, LGAQ, ACT Chief
                                                       oversight for all domestic wastewater related
                                                                                                                 Ministers Department, Local Govt & Shires
                                                       projects. The committee comprises representatives
OTHER MAV COMMITTEES                                   from local government, EPA, Melbourne Water,
                                                                                                                 Association of NSW, NSW Buy Recycled Alliance
Local Government Indigenous Network:                                                                             and the NZ Ministry of Environment.
                                                       VicWater, DSE and the Australian Institute of
A network of councillors and council officers          Environmental Health.                                     EPA/MAV State Environmental Protection
interested in promoting Indigenous issues within                                                                 Policy Implementation Steering Committee
                                                       Clearwater (formerly Stormwater
Victorian local government.                                                                                      (SEPP): A committee comprising senior staff within
                                                       Capacity Building) Steering Committee:
MAV Insurance Committee: Management                                                                              the MAV and EPA to oversee the development and
                                                       Committee directs the development and delivery
                                                                                                                 delivery of a joint project aimed at improving local
Committee established under Deed by the MAV            of a statewide education and training program
                                                                                                                 government implementation of the SEPP (Waters of
Board to oversight the arrangements for Civic          for local government and industry professionals in
                                                                                                                 Victoria).
Mutual Plus (CMP) and the Municipal Officers           the sustainable management of urban
Fidelity Guarantee Fund and provide                    stormwater. Comprising EPA, Melbourne Water,              MAV On-site Wastewater Steering
recommendation where required to the MAV Board.        Stormwater Industry Association of Victoria and           Committee: A group comprising MAV staff and
Corangamite Region Local Government                    LGPro.                                                    broad representation from local government and
                                                                                                                 State Government departments and agencies
Environment Network, North East Local                   Public Lighting Reference Group: A group
                                                                                                                 established to oversee the development and
Government Environment Network and                      of council officers actively involved in advancing
                                                                                                                 delivery of a number of wastewater related
North West Local Government                             public lighting issues. Issues include energy
                                                                                                                 projects and to provide the MAV with advice on
Environment Network: Through the                        efficiency of public lighting, pricing systems and
                                                                                                                 key wastewater issues and to assist the MAV
Environment Resource Officer the MAV facilitates        market regulation.
                                                                                                                 to carry forward key policies and campaigns
a number of local government environment
                                                        MAV/VicRoads Liaison Group: The purpose                  in this area.
networks, the purpose of which is to
                                                        of the Liaison Group is to facilitate regular


                                                                                                                          39
                                                                                               MAV ANNUAL REPORT 2003/4
FINANCIAL OVERVIEW
In accordance with the requirements of the Municipal
                                                                  Association
                                                              Act 1907 and applicable accounting standards, the
the Municipal Association of Victoria, the Municipal Officers’ Fidelity Guarantee Fund and Local Government Mutual Liability Insurance
                                                                                                                                       economic activity of


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


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


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




                      40
                      MAV ANNUAL REPORT 2003/4
CIVIC MUTUAL PLUS (CMP)
Prudent management and improved performance of the fund’s members has seen an improvement in this years result.
The fund is still dealing with:
a) The failure of two insurance companies that directly impacted this years result.
b) The abolition of the non feasance defence for road authorities
The Board of the Municipal Association of Victoria have considered these matters carefully and have decided to take a conserv ative
approach and provide fully for the potential losses from both these occurrences.
The general insurance environment also improved and this has led to improved returns for this year.
The operating surplus of Civic Mutual Plus for this year was $2.8 million (2003 $8.2 million).
The surplus of assets against liabilities at 30 June 2004 was $8.6 million (2003 $5.8 million).


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




                                                                                                                   41
                                                                                        MAV ANNUAL REPORT 2003/4
GUIDE TO THE FINANCIALS
The financial report is a key part of the MAV’s Annual Report. It shows how the MAV performed financially during the 2003/200 4 financial
year and the position at the end of the financial year (30 June 2004).
The financial report is presented in accordance with the Australian Accounting Standards and the recommendations of the Urgent Issues Group.
The MAV is a not-for-profit association that represents its members who are the seventy-nine local government authorities around Victoria.
The MAV also runs the MAV Insurance business. This business consists of two entities, Civic Mutual Plus (public liability and professional
indemnity insurer) and the Municipal Officers Fidelity Guarantee Fund. The MAV also manages grants received from Federal and State
governments, for and on behalf of the local government industry.
All these different interests are accounted for separately and then consolidated into the MAV financial report.
The MAV is committed to accountability in all respects of its operations. It is with this in mind that this plain english guide has been
developed to assist readers understand and analyse the financial report.


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


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

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

2.1. CURRENT AND NON-CURRENT ASSETS
Cash assets includes cash held in the bank, petty cash, cash deposits and cash investments.
Receivables are monies owed to the Association.

Prepayments are payments made in the current financial year, which relate to the next financial year (ie annual subscriptions).

Property, Plant and Equipment represents the value of the equipment, furniture and fittings, computers, web site and intranet and
motor vehicles owned by the Association.
Intangible Assets are trademarks, educational programs and other intellectual property owned by the Association

Other Financial Assets represent the value of shares held by the Association in the Co-operative Purchasing Scheme.




                       42
                      MAV ANNUAL REPORT 2003/4
2.2. CURRENT AND NON-CURRENT LIABILITIES
Bank Overdraft indicates the amount the Association owes its bankers on its daily operating account.

Payables are monies owed by the Association to its suppliers as at 30 June.

Premiums in advance are insurance premiums relating to the next financial year billed to members of the insurance fund before 30 June.

Provision for employee entitlements is the accounting term for Annual Leave, Long Service Leave and staff retirement gratuities owed
to staff.
Provision for claims outstanding represents insurance claims reported by members together with an estimate of claims incurred but
not yet reported including an estimate of the costs of settlement for these claims.
Other liabilities represents fees received in advance for seminars and conferences to be held in the 2005 financial year.

2.3. NET ASSETS
Net Assets this term describes the difference between total assets and total liabilities. It represents the net worth of the Association as at
30 June.

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

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

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

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


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


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

INDEPENDENT AUDIT REPORT
This report is the independent auditors opinion on the financial statements. It provides the reader of the financial statements a completely
independent opinion of the financial statements of the Association. The opinion covers all statutory and accounting standards compliance
requirements as well as providing a view on the truth and fairness of the financial statements.


                                                                                                                            43
                                                                                                 MAV ANNUAL REPORT 2003/4
MAV
2004 FINANCIAL                  REPORT




  44
  MAV ANNUAL FINANCIAL 2003/4
STATEMENT OF FINANCIAL PERFORMANCE
FOR THE YEAR ENDED 30 JUNE, 2004
                                                                               CONSOLIDATED                MAV - GENERAL FUND
                                                                           2004               2003         2004             2003
                                                           NOTE                 $                 $               $                $


REVENUE FROM ORDINARY ACTIVITIES                            2, 3   49,946,566        47,163,661       7,277,598        7,205,114


EXPENSES FROM ORDINARY ACTIVITIES                           4(b)   47,490,651        41,454,454       7,501,498        9,813,509


LAS UNFUNDED SUPERANNUATION                                  17                 -           253,851               -      253,851
SURPLUS(DEFICIT) FROM ORDINARY ACTIVITIES                      2    2,455,915         5,455,356       (223,900)       (2,862,246)
TOTAL CHANGES IN EQUITY                                      16     2,455,915         5,455,356       (223,900)       (2,862,246)


The accompanying notes form an integral part of these statements




                                                                                       45
                                                              MAV FINANCIAL REPORT 2003/4
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE, 2004
                                                                               CONSOLIDATED             MAV - GENERAL FUND
                                                                           2004             2003        2004            2003
                                                           NOTE                   $            $               $               $


CURRENT ASSETS
Cash Assets                                                          20,154,086       16,472,782   3,318,973       4,331,058
Receivables                                                    9     44,048,992       48,249,912    508,235         673,849
Prepayments                                                             114,823           73,569    114,823           73,569
TOTAL CURRENT ASSETS                                                 64,317,901       64,796,263   3,942,031       5,078,476


NON-CURRENT ASSETS
Receivables                                                    9     44,626,582       45,086,770               -               -
Property, Plant and Equipment                            1(e),11        599,778          549,290     599,778        549,290
Intangibles                                              1(e),12         52,724            3,928      52,724           3,928
Other Financial Assets                                                        10              10          10              10
TOTAL NON-CURRENT ASSETS                                             45,279,094       45,639,998     652,512        553,228
TOTAL ASSETS                                                        109,596,995 110,436,261        4,594,543       5,631,704


CURRENT LIABILITIES
Payables                                                              3,371,753        3,582,387     431,321        945,771
Premiums in Advance                                           10     29,205,209       28,703,707               -               -
Provision for Employee Entitlements                           15        240,825          219,261     240,825        219,261
Provision for Claims Outstanding                              13     13,780,202       15,611,232               -               -
Other Current Liabilities                                               111,064          203,566     111,064        203,566
TOTAL CURRENT LIABILITIES                                            46,709,053       48,320,153     783,210       1,368,598


NON-CURRENT LIABILITIES
LAS Unfunded Superannuation                                   17                  -      253,851               -    253,851
Provision for Employee Entitlements                           15         98,097           72,119      98,097          72,119
Provision for Claims Outstanding                              13     50,101,954       51,558,162               -               -
TOTAL NON-CURRENT LIABILITIES                                        50,200,051       51,884,132      98,097        325,970
TOTAL LIABILITIES                                                    96,909,104 100,204,285          881,307       1,694,568
NET ASSETS                                                           12,687,891       10,231,976   3,713,236       3,937,136


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


The accompanying notes form an integral part of these statements.




                  46
                 MAV ANNUAL FINANCIAL 2003/4
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE, 2004
                                                                                CONSOLIDATED                   MAV - GENERAL FUND
                                                                            2004               2003           2004              2003
                                                           NOTE                   $                 $                 $                $


CASH FLOW FROM OPERATING ACTIVITIES
RECEIPTS
Subscriptions, Grants and Fees                                       45,117,397       36,396,177         7,780,746         8,262,229
Investment Income                                                       880,295              909,357       211,212           234,609
Excesses and Recoveries                                              12,705,898       12,482,804                      -                -


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


CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sale of Fixed Assets                                      247,772              245,681       247,772           245,681
Payments for Fixed Assets                                              (568,337)        (253,909)         (568,337)        (253,909)
NET CASH USED IN INVESTING ACTIVITIES                                  (320,565)              (8,228)     (320,565)           (8,228)


NET INCREASE / (DECREASE) IN CASH HELD                                3,681,304         6,777,041       (1,012,085)       (2,260,713)
Cash at Beginning of Year                                            16,472,782         9,695,741        4,331,058         6,591,771
CASH AT END OF YEAR                                           8a     20,154,086       16,472,782         3,318,973         4,331,058


The accompanying notes form an integral part of these statements.




                                                                                        47
                                                               MAV FINANCIAL REPORT 2003/4
    NOTES TO AND FORMING PART OF THE FINANCIAL
    STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2004
1   SUMMARY OF ACCOUNTING POLICIES
    The financial report is a general purpose financial report which has been drawn up in accordance with Accounting
    Standards, Mandatory Professional Reporting Requirements (Urgent Issues Group Consensus Views) and other relevant
    requirements.
    The principal accounting policies adopted in preparing the financial report are stated to assist in a general
    understanding of the financial report. Accounting policies have been consistently applied unless otherwise indicated.

a   Basis of Accounting
    The accounts have been prepared on the accrual basis using historical costs and, except where stated, do not take into
    account current valuations of assets.

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

c   Change in Accounting Policy – Insurance Activities
    The MAV Insurance Committee requested the independent actuary to provide an estimate of the provision required to
    cover claims settlement administrative expenses that would be incurred in managing all outstanding claims in the event
    that Civic Mutual Plus winds down. This practice is consistent with insurance industry standards. In accordance with the
    recommendation of the independent actuary the Committee has decided to provide 4% of the gross outstanding claims
    estimates (including gross IBNR and Development) as the provision for claims settlement administration costs. This
    provision has been established over the last two-years. As a result of the change in accounting policy the surplus for the
    2004 financial has been reduced by $1,257,798 (2003 $1,684,243)

d   Income Tax
    The Association is exempt from income tax, in accordance with sections 50-10 and 50-25 of the Income Tax
    Assessment Act 1997

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


    THE FOLLOWING DEPRECIATION RATES ARE IN USE:                                 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%
    Web Site and Intranet at cost                                                            33%
    Trademarks, Intellectual Property & Educational programs at cost                   10 – 20%




                     48
                     MAV ANNUAL FINANCIAL 2003/4
    NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2004



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

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

h   Revenue Recognition
    INTEREST REVENUE
    Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial
    asset.
    GRANT REVENUE
    Grants are recognised as revenue when the Association obtains control over the assets comprising the contribution.
    Control over the grants is normally obtained upon their receipt or upon prior notification that a grant has been secured.
    SUBSCRIPTIONS AND SPONSORSHIPS
    Subscriptions and Sponsorships are recognised on an accrual basis.



    SUMMARY OF ACCOUNTING POLICIES RELATING TO INSURANCE ACTIVITIES

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

j   Premiums Receivable
    During the month of June each year, the Schemes issue premium notices to Scheme Members. The risk attaches to the
    premiums in the next accounting period and accordingly the revenue is recognised each following year commencing 1 July.

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




                                                                                         49
                                                                MAV FINANCIAL REPORT 2003/4
    NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2004



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

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

m Revenue Recognition
    Revenue is recognised to the extent that it is probable that the economic benefit will flow to the entity and the revenue
    can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised.
    (i)     Premiums – recognised in the period the fund is at risk.
    (ii)    Excesses and Recoveries – on an accruals basis.
    (iii)   Investment Income – on an accruals basis including adjustments to bring values of cash backed unit trusts to
            account as investment income.

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

o   Investment Income
    Investment income is recognised on a time proportionate basis that takes into account the effective yield on the
    financial asset.

p   Other Financial Assets
    Investments are valued at net market value at balance sheet date. Investment income includes interest received and
    receivable on investments and changes in net market values of investments in unit trusts. The schemes have adopted a
    policy of investing in secure investments backed by fixed interest securities of amounts and terms broadly matching its
    liabilities for claims and unearned contributions.

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




                      50
                     MAV ANNUAL FINANCIAL 2003/4
    NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2004



                                                                           CONSOLIDATED
                                                                       2004               2003
                                                                              $              $$


2   CONTRIBUTION TO OPERATING SURPLUS
    CONTRIBUTION FROM INSURANCE ACTIVITIES
    Premium income                                              29,784,412        23,028,078
    Catastrophe insurance                                      (22,511,076) (11,171,940)
    NET INCOME BEFORE CLAIMS                                     7,273,336        11,856,138
    Claims expense (Note 4(a))                                 (13,906,333) (18,479,170)
    Excesses and Recoveries                                     12,561,825        16,551,875
    NET CLAIMS EXPENSE                                          (1,344,508)       (1,927,295)
    UNDERWRITING RESULT                                          5,928,828         9,928,843
    Investment income                                              674,730              680,595
    Reduction in Doubtful Reinsurance Debts                          36,946             426,474
    Administration and general expenses                         (3,960,689)       (2,718,310)
    INSURANCE ACTIVITY OPERATING SURPLUS / (DEFICIT)             2,679,815         8,317,602
    PARENT ENTITY SURPLUS / DEFICIT                               (223,900)       (2,862,246)
    OPERATING SURPLUS                                            2,455,915         5,455,356


                                                                           CONSOLIDATED                MAV - GENERAL FUND
                                                                       2004               2003         2004            2003
                                                                              $               $               $               $


3   REVENUE FROM ORDINARY ACTIVITIES
    REVENUES FROM ORDINARY ACTIVITIES
    Subscriptions/premiums                                      31,804,675        25,006,016      2,020,263       1,977,938
    Insurance excesses and recoveries                           12,561,825        16,551,875                  -               -
    Brokerage and Management Fees Income                         1,092,588              937,537   1,092,588        937,537
    Seminars & sale of publications                                629,599              250,859    629,599         250,859
    Project, sponsorship and management income                     461,355              144,953    813,354         446,953
    Grant income                                                 2,269,166         3,088,888      2,269,166       3,088,889
    TOTAL REVENUE FROM OPERATING ACTIVITIES                     48,819,208        45,980,128      6,824,970       6,702,176


    REVENUES FROM NON-OPERATING ACTIVITIES
    Investment Income                                              879,586              937,852     204,856        257,257
    Proceeds from Sale of Non Current Assets                       247,772              245,681     247,772        245,681
    TOTAL REVENUE FROM OUTSIDE THE
    OPERATING ACTIVITIES                                         1,127,358         1,183,533       452,628         502,938
    TOTAL REVENUE FROM ORDINARY ACTIVITIES                      49,946,566        47,163,661      7,277,598       7,205,114


                                                                           CONSOLIDATED
                                                                       2004                2003
                                                        NOTE                  $              $$


4a CLAIMS EXPENSES
    Paid                                                        17,193,571        16,064,883
    Outstanding claims at end of financial year          13     63,882,156        67,169,394
    Outstanding claims at beginning of financial year          (67,169,394) (64,755,107)
    TOTAL CLAIMS EXPENSES                                       13,906,333        18,479,170




                                                                                   51
                                                          MAV FINANCIAL REPORT 2003/4
    NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2004



                                                                          CONSOLIDATED              MAV - GENERAL FUND
                                                                       2004             2003        2004            2003
                                                                              $            $               $               $


4b OPERATING EXPENSES
    The following items have been recognised in the
    operating surplus (deficit):
    Claims expense                                               13,906,333       18,479,170               -               -
    Reinsurance Expense                                          22,511,076       11,171,940               -               -
    Stamp Duty                                                    1,970,768        1,008,467               -               -
    General Scheme Expenses                                         251,590          189,351               -               -
    Salary and Payroll Costs                                      1,802,751        1,374,662   1,802,751       1,374,662
    Grants, Projects and Legal                                    2,656,324        4,592,738   2,656,324       4,592,738
    Administration                                                1,051,133        2,321,623   1,216,943       2,339,568
    Operating lease rental expense                                   14,000           18,766      14,000          18,766
    Superannuation Contributions                                    194,297          159,362    194,297         159,362
    Scheme Management Fee                                         1,478,250        1,220,937               -               -
    Meetings and Seminars                                           667,243          439,322    667,243         423,821
    Written down value of Non- current assets disposed of.          216,488          251,445    216,488         251,445
    Depreciation Leasehold Improvements                              60,075           77,002      60,075          77,002
    Depreciation Furniture and Equipment                             90,585           85,298      90,585          85,298
    Depreciation Motor Vehicles                                      74,959           69,233      74,959          69,233
    Depreciation Interactive Communications System                            -        3,120               -       3,120
    Amortisation of Website and Trademarks                           27,082           16,910      27,082          16,910
    Board of Management Expenses                                    179,315          116,860    179,315         116,860
    ALGA Membership                                                 301,436          284,724    301,436         284,724
    TOTAL EXPENDITURE                                            47,416,759       41,454,456   7,501,498       9,813,509



5   LEASING COMMITMENTS
    Operating lease commitments, being for lease of
    computer and other equipment:
    Not later than one year                                          14,000           14,000      14,000          14,000
    Later than one year but not later than five years                21,000           35,000      21,000          35,000
    TOTAL LEASE COMMITMENT                                           35,000           49,000      35,000          49,000


    Operating lease commitments, being for lease of
    leasehold premises:
    Not later than one year                                          20,213          112,472      20,213        112,472
    Later than one year but not later than five years             1,366,334        1,091,536   1,366,334       1,091,536
    Later than five years                                         1,303,307        1,598,419   1,303,307       1,598,419
    TOTAL LEASE COMMITMENT                                        2,689,854        2,802,427   2,689,854       2,802,427



6   AUDITORS REMUNERATION
    Amounts received or due and receivable for audit services:
    Audit Services                                                   53,855           37,970      12,855          14,870
    Other Services                                                            -        9,504               -       9,504




                     52
                     MAV ANNUAL FINANCIAL 2003/4
    NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2004



                                                                                    CONSOLIDATED                 MAV - GENERAL FUND
                                                                                2004                2003         2004             2003
                                                                                      $                 $               $                $


7   SCHEME MANAGEMENT FEES
    Scheme management fees are paid to the
    Scheme Manager for:
    Risk Management and Administrative Services                          1,478,250          1,220,935
    Claims management                                                    1,209,478          1,102,858
    TOTAL SCHEME MANAGEMENT FEES                                         2,687,728          2,323,793



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

a   Cash at balance date as shown in the Statement of
    Cash Flows is reconciled to the related items in the
    Statement of Financial Position as follows:
                                                                                    CONSOLIDATED                 MAV - GENERAL FUND
                                                                                2004                2003         2004             2003
                                                                                      $                 $               $                $
    Cash                                                                10,708,619         7,172,433        3,318,973        4,331,058
    Other financial assets                                               9,445,467         9,300,349                    -                -
    Total Cash                                                          20,154,086        16,472,782        3,318,973        4,331,058



b   Reconciliation of Net Cash Provided by/(Used In)
    Operating Activities to Operating Surplus/(Deficit)
    Surplus (Deficit) for year                                           2,455,915          5,455,356       (223,900)       (2,862,246)
    Depreciation &Amortisation                                              252,566              251,562      252,566          251,562
    GAINS ON SALE OF:
    (Surplus)/deficit on disposal of assets                                 (31,285)               5,764      (31,285)           5,764
    CHANGES IN ASSETS AND LIABILITIES
    (Increase)/decrease in accounts receivable                           4,661,108        (8,880,600)         165,614        (219,570)
    (Increase)/decrease in plant & equipment                                          -            3,103                -        3,103
    (Increase)/decrease in intangible assets                                          -           (4,063)               -       (4,063)
    (Increase)/decrease in prepayments                                      (41,254)             (10,385)     (41,254)         (10,385)
    Increase/(decrease) in accounts payable                               (210,634)              520,538    (514,450)          105,296
    Increase / (decrease) in provision for employee entitlements             47,542               20,637       47,542           20,637
    Increase/(decrease) in outstanding claims                           (3,287,238)        2,414,287                    -                -
    Increase/(decrease) in accrued revenue                                  409,000        6,755,219          (92,502)         203,566
    Increase/(decrease) in LAS Liability                                  (253,851)              253,851    (253,851)          253,851
    CASH FLOWS FROM OPERATIONS                                           4,001,869         6,785,269        (691,520)       (2,252,485)




                                                                                            53
                                                                   MAV FINANCIAL REPORT 2003/4
    NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2004



                                                                        CONSOLIDATED                MAV - GENERAL FUND
                                                                     2004             2003          2004          2003
                                                      NOTE                  $             $                $             $


9   RECEIVABLES
    Reinsurance and other recoveries receivable         1l    79,058,485        76,140,461
    Discount to Present Value                                (12,950,150) (10,492,281)
                                                              66,108,335        65,648,180
    Provision for Doubtful Reinsurance Recoveries             (7,188,040)       (7,224,986)
    Net Reinsurance and other Recoveries Receivable           58,920,295        58,423,194
    Excesses Recoverable                                       4,935,966         5,719,273
    Premiums receivable                                 1j    24,359,930        28,705,916
    Other Receivables                                            459,383           488,299       508,235       673,849
    TOTAL RECEIVABLES                                         88,675,574        93,336,682       508,235       673,849
    REPRESENTED BY:
    CURRENT                                                   44,048,992        48,249,912       508,235       673,849
    NON-CURRENT                                               44,626,582        45,086,770                 -             -
    TOTAL                                                     88,675,574        93,336,682       508,235       673,849



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



11 PROPERTY, PLANT AND EQUIPMENT
    Leasehold Improvements - at cost                             397,008           385,008       397,008       385,008
    Less accumulated depreciation                                343,041           282,966       343,041       282,966
                                                                   53,967          102,042        53,967       102,042
    Furniture and Equipment - at cost                            388,028           346,986       388,028       346,986
    Less accumulated depreciation                                306,603           216,018       306,603       216,018
                                                                   81,425          130,968        81,425       130,968
    Motor vehicles - at cost                                     448,546           362,054       448,546       362,054
    Less accumulated depreciation                                  44,836           86,649        44,836        86,649
                                                                 403,710           275,405       403,710       275,405
    Web site and Intranet                                        101,275            57,650       101,275        57,650
    Less accumulated amortisation                                  40,598           16,775        40,598        16,775
                                                                   60,677           40,875        60,677        40,875
    Interactive Communications System - at cost                  287,913           287,913       287,913       287,913
    Less accumulated depreciation                                287,913           287,913       287,913       287,913
                                                                            -                -             -             -
    TOTAL PROPERTY, PLANT AND EQUIPMENT                          599,779           549,290       599,779       549,290




                     54
                    MAV ANNUAL FINANCIAL 2003/4
    NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2004



                                                              CONSOLIDATED                  MAV - GENERAL FUND
                                                          2004               2003           2004          2003
                                                                $                $                 $             $


a   Reconciliations
    Leasehold Improvements
    Movements during the year
    Beginning of year                                 102,042              179,044       102,042       179,044
    Additions                                          12,000                        -    12,000                 -
    Depreciation                                       60,075               77,002        60,075        77,002
    End of year                                        53,967              102,042        53,967       102,042


    Furniture and Equipment
    Movements during the year
    Beginning of year                                 130,968              222,005       130,968       222,005
    Additions                                          41,042               15,833        41,042        15,833
    Write Offs                                                  -           21,572                 -    21,572
    Depreciation                                       90,585               85,298        90,585        85,298
    End of year                                        81,425              130,968        81,425       130,968


    Motor Vehicles
    Movements during the year
    Beginning of year                                 275,405              372,189       275,405       372,189
    Additions                                         419,751              201,363       419,751       201,363
    Disposals                                         216,487              229,873       216,487       229,873
    Depreciation                                       74,959               68,274        74,959        68,274
    End of year                                       403,710              275,405       403,710       275,405


    Interactive Communications System
    Movements during the year
    Beginning of year                                           -            3,119                 -     3,119
    Depreciation                                                -            3,119                 -     3,119
    End of year                                                 -                    -             -             -


    Web site and Intranet
    Movement during the year
    Beginning of year                                  40,875               25,000        40,875        25,000
    Additions                                          43,625               32,650        43,625        32,650
    Amortisation                                       23,823               16,775        23,823        16,775
    End of year                                        60,677               40,875        60,677        40,875



12 INTANGIBLE ASSETS
    Trademarks and Intellectual Property               55,983                4,063        55,983         4,063
    Less accumulated amortisation                        3,259                 135         3,259           135
                                                       52,724                3,928        52,724         3,928




                                                                      55
                                             MAV FINANCIAL REPORT 2003/4
    NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2004



                                                                              CONSOLIDATED
                                                                           2004             2003
                                                            NOTE                  $                $


13 OUTSTANDING CLAIMS
    Reported claims outstanding                                     29,454,174        32,689,154
    Provision for incurred but not reported claims,
    claims development and settlement costs                         47,117,002        43,900,324
    Discount to present value                                      (12,689,020)       (9,420,084)
    TOTAL OUTSTANDING CLAIMS                                        63,882,156        67,169,394
    COMPRISING:
    Current                                                         13,780,202        15,611,232
    Non-Current                                                     50,101,954        51,558,162
    TOTAL CLAIMS PROVISION                                          63,882,156        67,169,394


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


    Inflation factor                                          1k           6.0%             6.0%
    Discount rate                                                          5.5%             4.5%


                                                                              CONSOLIDATED
                                                                           2004             2003
                                                                                  $             $


14 NET CLAIMS INCURRED
    Allowance for claims settlement costs                     1c     1,257,798         1,684,243
    Net claims incurred: current financial year incidents              164,991           391,196
    Net Claims Settlement Costs                                      1,209,478         1,102,858
    Reassessment for prior years claims                             (1,287,759)       (1,251,002)
    NET CLAIMS INCURRED                                              1,344,508         1,927,295


                                                                              CONSOLIDATED                  MAV - GENERAL FUND
                                                                           2004             2003            2004             2003
                                                                                  $             $                  $                $


15 PROVISIONS FOR EMPLOYEE ENTITLEMENTS
    The aggregate amount of employee entitlement
    liability is comprised of:
    Provisions (Current)                                               240,825           219,261         240,825          219,261
    Provisions (Non Current)                                             98,097           72,119          98,097           72,119
    TOTAL EMPLOYEE ENTITLEMENTS                                        338,922           291,380         338,922          291,380



16 Equity
    Balance at beginning of Year                                    10,231,976         4,776,620       3,937,136        6,799,382
    Surplus (Deficit)from ordinary activities                        2,455,915         5,455,356       (223,900)       (2,862,246)
    BALANCE AT END OF YEAR                                          12,687,891        10,231,976       3,713,236        3,937,136




                       56
                       MAV ANNUAL FINANCIAL 2003/4
   NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2004



17 SUPERANNUATION CONTRIBUTION
   The Municipal Association of Victoria contributes in respect of its employees to both the Local Authorities Superannuation
   Fund’s LASPLAN and the Defined Benefits Fund.
   The amount of superannuation contributions paid by the Municipal Association of Victoria to the Local Authorities
   Superannuation Fund’s LASPLAN (or Accumulation Fund) and the Defined Benefits Fund during the reporting period was,
   $194,297 (2003 $159,362). The Municipal Association of Victoria contributes to LASPLAN based on a fixed percentage
   of employee earnings in accordance with the Superannuation Guarantee Legislation 9% in 2004 and 9% in 2003. No
   further liability accrues to the employer as the superannuation benefits accruing to employees are represented by their
   share of the net assets of the Fund.
   Contributions to the Defined Benefits Fund are determined by the Scheme’s actuary. The Funds liability for accrued
   benefits for defined benefit and defined contribution members was determined in the 31 December 2003 actuarial
   investigation carried out by Local Authorities Super pursuant to the requirements of Australian Accounting Standard AAS
   25. The actuarial investigation calculated the Unfunded Superannuation Fund Liability in the Defined Benefits to be $127
   million. The Municipal Association of Victoria’s portion of this unfunded superannuation liability, including contributions
   tax, was calculated to be $Nil (2003 $253,851)
   The Municipal Association of Victoria paid the unfunded superannuation liability during the year.

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

19 FINANCIAL INSTRUMENTS INTEREST RATE RISK EXPOSURE
   The Group’s exposure to interest rate risk and the effective average interest rate for the classes of financial assets is set out
   below:
                                                                                  CONSOLIDATED                     MAV - GENERAL FUND
                                                                                                           2004
                                                                              Non-             Floating             Non-        Floating
                                                                            Interest            Interest          Interest       Interest
                                                                            Earning                Rate           Earning           Rate
                                                                                    $                 $                 $                $

   FINANCIAL ASSETS
   Bank                                                                   233,631        7,389,646            233,631                    -
   Cash Investments                                                                 -   12,530,809                      -    3,085,342
   Receivables                                                        88,675,574                      -       508,235                    -
   TOTAL FINANCIAL ASSETS                                             88,909,205        19,920,455            741,866        3,085,342
   WEIGHTED AVERAGE INTEREST RATE                                                                5.7%                            5.86%


                                                                                                           2004
   FINANCIAL LIABILITIES
   Outstanding claims                                                 63,882,156                      -                 -                -
   Unearned premiums/subscriptions                                    29,316,273                      -       111,064                    -
   Accounts payable                                                     3,371,753                     -       431,321                    -
   TOTAL FINANCIAL LIABILITIES                                        96,570,182                      -       542,385                    -




                                                                                          57
                                                                 MAV FINANCIAL REPORT 2003/4
   NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2004



                                                                               CONSOLIDATED                        MAV - GENERAL FUND
                                                                                                         2003
                                                                           Non-            Floating                Non-         Floating
                                                                         Interest           Interest             Interest        Interest
                                                                         Earning               Rate              Earning            Rate
                                                                                 $                 $                   $                  $


   FINANCIAL ASSETS
   Bank                                                                424,929           2,841,375              424,929                   -
   Cash Investments                                                              -     13,206,479                         -   3,906,130
   Receivables                                                      93,531,782                       -          673,849                   -
   TOTAL FINANCIAL ASSETS                                           93,956,711         16,047,854          1,098,778          3,906,130
   WEIGHTED AVERAGE INTEREST RATE                                                                5.0%                              4.4%


                                                                                                         2003
   FINANCIAL LIABILITIES
   Outstanding claims                                               67,169,394                       -                    -               -
   Unearned premiums/subscriptions                                  28,907,272                       -          203,565                   -
   Accounts payable                                                  3,777,487                       -          945,764                   -
   TOTAL FINANCIAL LIABILITIES                                      99,854,153                       -     1,149,329                      -


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



19 FINANCIAL INSTRUMENTS INTEREST RATE RISK EXPOSURE (CONTINUED)

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

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

                                                                                     INSURANCE                       MAV - GENERAL
                                                                           2004              2003                 2004             2003

   State Government                                                              -                   -               3%            11%
   Local Government                                                         38%                  37%               25%             53%
   Reinsurers                                                               62%                  63%                      -               -
   Other                                                                                                           72%             36%


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




                    58
                   MAV ANNUAL FINANCIAL 2003/4
                            NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2004
CONSOLIDATED FINANCIAL STATEMENTS




                                                                                                                     20 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




                                                                                                                                                                                                                                                                                                                  59
                                                                                                                        BUSINESS SEGMENTS                                 INSURANCE                            GRANTS                   ASSOCIATION              ELIMINATIONS                 CONSOLIDATED




                                                                                                                                                                                                                                                                                                                       MAV FINANCIAL REPORT 2003/4
                                                                                                                                                                   2004             2003            2004                2003          2004        2003        2004            2003           2004          2003
                                                                                                                                                                      $                $                                                 $           $                                          $             $
                                                                                                                        OPERATING
                                                                                                                        REVENUE
                                                                                                                        Sales to Customers outside the      43,020,968        40,260,548       2,472,305         3,266,268       4,453,293    3,636,845                                49,946,566    47,163,661
                                                                                                                        group
                                                                                                                        Inter-segment                            64,338           48,390                   -                 -     822,308     662,163    (886,646)       (710,553)
                                                                                                                        Sales
                                                                                                                        TOTAL SEGMENT                       43,085,306        40,308,938       2,472,305         3,266,268       5,275,601    4,299,008   (886,646)       (710,553)
                                                                                                                        REVENUE
                                                                                                                        TOTAL CONSOLIDATED                                                                                                                                             49,946,566    47,163,661
                                                                                                                        REVENUE
                                                                                                                        SEGMENT                              2,679,824         8,317,602       (262,389)        (2,621,321)         38,479       12,685               -   (253,610)     2,455,914     5,455,356
                                                                                                                        RESULT
                                                                                                                        CONSOLIDATED ENTITY
                                                                                                                        SURPLUS
                                                                                                                        FROM ORDINARY                                                                                                                                                   2,455,914     5,455,356
                                                                                                                        ACTIVITIES
                                                                                                                        ASSET
                                                                                                                        S                                 105,068,535 104,999,657              2,401,234         3,154,605       2,352,339    2,523,341   (225,113)       (241,342) 109,596,995 110,436,261
                                                                                                                        Segment
                                                                                                                        Assets
                                                                                                                        TOTAL                                                                                                                                                         109,596,995 110,436,261
                                                                                                                        ASSETS
                                                                                                                        LIABILITI
                                                                                                                        ES
                                                                                                                        Segment                             96,093,876        98,704,823        283,002            773,977        757,339      966,827    (225,113)       (241,342)    96,909104 100,204,285
                                                                                                                        Liabilities
                                                                                                                        TOTAL                                                                                                                                                          96,909,104 100,204,285
                                                                                                                        LIABILITIES
                                                                                                                        OTHER SEGMENT INFORMATION:
                                                                                                                        Acquisition of property, plant
                                                                                                                        and
                                                                                                                        equipment and other non current                   -                -      47,305            33,981        521,032      219,928                -           -       568,337       253,909
                                                                                                                        assets
                                                                                                                        Depreciatio                                       -                -      11,642             9,926        241,059      241,636                -           -       252,701       251,562
                                                                                                                        n
    NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2004



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

a   Insurance Contracts
    Revised Accounting Standard AASB 1023 “General Insurance Contracts” defines an insurance contract and requires
    additional disclosures. The main accounting changes are the requirement to include a prudential margin on insurance
    liabilities, the introduction of an adequacy test for insurance liabilities and an impairment test for reinsurance assets. The
    entity has a long held policy of maintaining prudential margins in outstanding claims and a robust approach to the
    valuation of insurance liabilities and reinsurance assets and therefore no significant impact is expected. The fundamental
    changes to insurance recognition and measurement proposed in phase II of the IASB insurance contracts project due in
    2007 are being monitored.

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

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




                     60
                    MAV ANNUAL FINANCIAL 2003/4
   NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2004



22 RELATED PARTIES
   The Municipal Association of Victoria is a body corporate established under the Municipal Association Act of 1907 to
   provide services for and the representation of Local Government authorities in Victoria. The Association and its wholly-
   owned controlled entities trade with its members in the normal course of business and on an arm’s length basis. The
   discreet nature of these transactions is not material. There were no material related party transactions during the year.
   Directors
   Members During The Year
   B A Matheson(Resigned 17 June 2004)                           D. Cameron (Elected 5 July 2003 ceased March 2004)
   P H Watts (Ceased 5 July 2003)                                J. Ryan (Elected 5 July 2003)
   R J Fyffe                                                     J. Eisenbise (Elected 5 July 2003)
   E Johnstone (Ceased 5 July 2003)                              R. Perry (Elected 5 July 2003)
   J V Chandler                                                  G. Lake (Elected 5 July 2003)
   J Dale                                                        C. Papas (Elected 5 July 2003)
   S. Alessi (Elected 5 July 2003)                               G. Davey (Elected April 2004)
   M O’Shea                                                      D. Argall (Elected 5 July 2003)
   G Hayes (Ceased 5 July 2003)


                                                                                CONSOLIDATED              MAV - GENERAL FUND
                                                                            2004               2003       2004             2003
                                                                                  $                $             $               $


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


                                                                                                           MAV - GENERAL FUND
                                                                                                          2004             2003
                                                                                                                 $               $

   Number of Directors of parent entity whose total income falls within the following bands:
   $0 - $9,999                                                                                               15                15
   $10,000 - $19,999                                                                                           1                1
   $40,000 - $49,999                                                                                           1                1



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

   Other Transactions
   There were no other material transactions with Directors.




                                                                                        61
                                                               MAV FINANCIAL REPORT 2003/4
    STATEMENT BY DIRECTORS
    In the opinion of directors of The Municipal Association of Victoria:
(a) the accompanying Statement of Financial Performance is drawn up so as to give a true and fair view of the surplus of
    the association for the year ended 30 June 2004;
(b) the accompanying Statement of Financial Position is drawn up so as to give a true and fair view of the state of affairs of
    the association as at that date;
(c) at the date of this statement there are reasonable grounds to believe that the association will be able to pay its debts as
    and when they fall due; and
(d) the accompanying Consolidated Financial Statements give a true and fair view of the matters with which they deal.
    The financial statements and consolidated financial statements have been made out in accordance with applicable
    Accounting Standards and other mandatory professional reporting requirements.
    Signed in accordance with the resolution of directors.




    Geoff Lake President                                         John Chandler Director


    Melbourne
    3rd December 2004




                     62
                    MAV ANNUAL FINANCIAL 2003/4
CONSOLIDATED FINANCIAL REPORTS -
INDEPENDENT AUDIT REPORT
INDEPENDENT AUDIT REPORT
To the members of the Municipal Association of Victoria

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

Audit Opinion
In our opinion, the financial statements present fairly in accordance with Accounting Standards and other mandatory
professional reporting requirements the financial position of the Association and the Consolidated entity as at 30 June
2004 the results of their operations and their cash flows for the year then ended.




PKF                                                          R. A. Dean Partner
Chartered Accountants
A Victorian Partnership


3rd December 2004
Melbourne




                                                                                    63
                                                           MAV FINANCIAL REPORT 2003/4
OTHER INFORMATION
Legal Form
The Municipal Association of Victoria is an Association Incorporated by the Municipal Association Act 1907

Domicile
Melbourne, Australia

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

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

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




                    64
                    MAV ANNUAL FINANCIAL 2003/4

								
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