Annual Report 2004/2005 Lower Murray Water Annual Report 2004/05

Lower Murray Water “Make Every Drop Count”

Mildura (Head Office) Irymple (Area Office) (Area Office) (Area Office) (Area Office) 741-759 Fourteenth Street 2115 - 2117 Fifteenth Street 73 Beveridge Street 37 Moore Street 56 Wellington Street PO Box 1438 PO Box 1438 PO Box 1447 PO Box 600 PO Box 547 , 3502 Mildura, 3502 Swan Hill, 3585 Robinvale, 3549 Kerang, 3579 Telephone: (03) 5051 3400 Telephone: (03) 5051 3400 Telephone: (03) 5036 2150 Telephone: (03) 5026 1300 Telephone: (03) 5450 3960 Facsimile: (03) 5051 3480 Facsimile: (03) 5021 9778 Facsimile: (03) 5036 2180 Facsimile: (03) 5026 1106 Facsimile: (03) 5450 3967

Web: lmw.vic.gov.au Email: [email protected] L.M.W. ANN REPORT CVR OUTPUT 7/10/05 9:25 AM Page 2

Our Establishment Lower Murray Urban and Rural Water Authority was created under the provisions of the Contents

Water Act 1989 via Order in Council effective 1st July 2004. It assumed the whole of Our Profile 1 the property, rights, liabilities, obligations, powers and functions under the Water Act 1989 The Chair's Overview 2 of the Lower Murray Region Water Authority and Rural Water Authority. The Chief Executive Officer’s Review 3 The Authority reports to the Minister for Water, The Hon. John Thwaites MP. Our Board 4 Our Organisational Chart 7 Our Objectives 8 Our Works 10 Our Services Our Customers 18 In accordance with the Water Act 1989, Our Commitment to our Region 20 Lower Murray Water provides: Our Environment 24 • urban water and wastewater services to 14 townships Our People 28 and approximately 60,000 customers along the Murray • drainage design in new agricultural developments to River in from Kerang to Mildura; ensure conformity with salinity management plan Our Financial Management 30 development guidelines; Our Service Delivery 32 • wastewater collection, treatment and effluent disposal Performance Indicators services to 11 towns via 10 treatment plants; • support for the design, implementation, operation and maintenance of works initiated by the Catchment Our Transfer of Water Rights, 33 • river quality water services to 305 stock, 850 garden Management Authority; Licences and Sales Water, and 1,350 irrigation customers in the three pumped Irrigation Water Usage and irrigation districts of , Red Cliffs and Robinvale, • management of the private diversion licences of 1,059 Licence Entitlements the rural district and some areas of the water users along the in Victoria between Reportable Information 36 West and the South Australian border; and waterworks districts of Carwarp and Yelta; Disclosure Index 37 • management of the region’s rural bulk water entitlement • the assessment and approval of permanent and Financials 39 of 347,337 ML; temporary water trade applications. Our Performance Reporting 2004/05 68 • for the collection and disposal of subsurface drainage As well as security of supply, public health, water quality water from the three pumped irrigation districts, and environmental responsibilities, Lower Murray Water Cover: The Murray River at Red Cliffs, Victoria Nangiloc, Robinvale diverters and Boundary Bend; recognises the crucial economic role of water from a regional and state context.

Our Region

Mildura NSW SA Murray River Lindsay Point VIC Merbein Mildura Irymple Red Cliffs NSW Ballarat Nangiloc Robinvale Extent of Lower Murray Water Boundary Bend Area SA Wemen

Ouyen Nyah Woorinen Legend Murray River Vic Swan Hill Boga Urban Water Services Urban Wastewater Services Kerang Rural Irrigation Services Rural Drainage Services Rural Stock Supply N Private Diverters

Sunrise over the storage lagoon at Lower Murray Water Mildura Wastewater Treatment Plant Annual Report 2004/2005 between thisresourceandthesocial economicfabricofourregion. How wemanageourwaterresourcesrecognises theintrinsicinterrelation form oureconomicbackbone. tourismandsupportindustrieswhich is directlylinkedtotheagricultural, Lower Murray Water recognisesthatouroverallwell-beingandlivelihood collection anddisposalofsubsurfaceirrigationdrainagewater. alongwiththe gardenandirrigationcustomers, quality watertostock, river treatmentandeffluentdisposalservices, wastewater services, The Authority providestheregionwithurbanwaterand Gannawarra. SwanHilland Australian bordertakinginthemunicipalitiesofMildura, Lower Murray Water’s areaofoperationextendsfromKerangtotheSouth Our Region water services. our customersandcommunitybyprovidingreliablesecure Our corebusinessistomeetthepresentandfutureneedsof Our Core Business whilstprotectingourenvironment. social advancementofourregion, Managing ourwaterresourcesresponsiblytopromotetheeconomicand VitalService Vital Resource: Our Vision Our Profile .MotivatedandEmpoweredPeople: 5. .SustainabilityofOurEnvironment: 4. BuildingaProsperousRegion: 3. PositiveCustomerandStakeholderRelationships: 2. Delivery: QualityServices 1. Our Goals .EfficientFinancialand Asset Management: 6. .ResponsibleCorporateGovernance: 7. To responsible andsustainablemanner. To water resource. the regionandensuresecurityofcommunity’s collective To governmentandotherstakeholders. urban customers, To toourcustomers. and waterrecyclingservices To To standards ofcorporategovernance. To

plan andmanageallouroperationsinanenvironmentally manage the Authority’s assets andfinancialresourcesresponsibly. skilledandcommittedworkforce. appropriately maintain aquality, otiuet h cnmc socialandculturaldevelopmentof contribute totheeconomic, maintain positiverelationshipsandcommunicationswithrural drainage irrigation, wastewater, provide highqualitydrinkingwater, manage ourbusinessaffairsinamanner consistentwiththebest Annual Report 2004/2005 Lower Murray Water Sprinkler irrigationforhorticulture 1

Performance Summary OurChairandCEO

The Chair’s Overview It is with pleasure that I report on the first twelve months of operation of the new Lower Murray Urban and Rural Water Authority. The initial challenge faced by the new Board in “getting its feet under the table” was an appraisal and prioritisation of the many and varied issues facing the merged Authority. By hastening slowly with this process we were able to assemble an appropriate management team who then participated in the development of a five year strategic plan during the later half of this first term. The body of this report is framed around progress against this plan. While eager to generate early achievements the Board has been prudent in building a solid platform for the new Authority upon which we can both strategically plan and deliver. The Authority was required to undertake an asset revaluation in 2004/05 and engaged independent valuers to undertake this work. The result is that the Authority’s infrastructure assets increased by 68% with fixed assets now $440M. As a consequence there is a $6M increase in depreciation, which has impacted and resulted in an accounting pre-tax operating loss of $2.6M for 2004/05. Pleasingly we have seen significant recurrent cost removal from the new entity. This will offset the merger set up costs in the early years and will be enjoyed into the future. Further efficiency gains are anticipated. Customer Committees have been established for both our rural and urban customer groups. These committees have and will continue to provide valuable advice to the Board on customer issues. We have not been standing still on the infrastructure front with substantial progress being made on the construction of the new 20 ML per day Mildura West Water Treatment Plant, which is the first stage of an eventual 80 ML per day plant. Additionally, we have engaged consultants to prepare a Master Plan for renewal of our irrigation districts’ infrastructure. My fellow Directors and I are cognisant of the many changes and initiatives emanating from the Victorian Government’s White Paper ‘Securing our Water Future Together’; the Basin Left to right - CEO - Ron Leamon Commission’s ‘The Living Murray’ and the Federal Government’s National Water Initiative. We wish and Chair, Michael Tilley to acknowledge our Government’s foresight in actioning the merger of our antecedent Authorities on 1 July 2004. Our combined skillsets better place this Authority to provide leadership in water management across our region on a holistic basis. The new Authority gives us a core mass to be able to deal with the complex regulatory environment of today’s industry including jurisdictional coverage by the Essential Services Commission. I believe our business is well placed to address both the growing needs of our region and the costly and complex task of asset maintenance and renewal. I sincerely thank the many people who have contributed to our first year of success and I look forward to the continued prosperity of the Authority and our region.

MICHAEL D TILLEY

CHAIR

Lower Murray Water 2 Annual Report 2004/2005 Chairman & CEO Chairman & CEO

The CEO’S Review We have achieved a lot in 12 months but are now confronting several issues that will set the tone of our business for some time to come. The first twelve months of our new business has been a period of These include the negotiation of a single new enterprise Agreement and considerable change generating many managerial challenges. Staff have the introduction of Essential Services Commission jurisdiction. understandably been under additional stress but have coped well in continuing to deliver our services to customers. I would like to express my thanks to the Board of Directors, to my Management Team, support staff and all employees for the With our new staff structure now in place there is growing recognition genuine commitment to the new Authority and the obvious desire to that former rural and urban business needs are complex requiring highly see it succeed. skilled staff. The cross pollination of duties and integration of staff has assisted and will lead to a new culture and identity over time. Good staff will always be so and the challenges of our new business have provided opportunities for many employees to develop and grow into more diverse career positions. I openly acknowledge my pleasure in seeing the many staff embracing the changes and challenges and getting on with making our business RON LEAMON work. I feel that our success is assured with so many positive people involved. CHIEF EXECUTIVE OFFICER

Lower Murray Water Annual Report 2004/2005 3 Our Board

Under the Order made by The Hon. John Thwaites MP, Minister for Water Richards and an irrigator in the Merbein Pumped Irrigation District. Kay on 18 June 2004, the Board of Lower Murray Urban and Rural Water has both a Bachelor of Law and a Bachelor of Economics and has worked Authority is comprised of nine members appointed by the Minister. in the legal profession since 1977. She has for many years been a member of the Legal Aid Child Representative Panel and was a former An Instrument of Appointment by Minister Thwaites appointed Leonie President of the Board of the Mildura Base Hospital and Deputy Chair of Burrows, Damien Heintze, Peter MacIntosh, Barrie MacMillan, Kay Martin, the former Sunraysia Rural Water Authority. Michael Tilley and May Ward as members of the Authority from 1 July 2004 to 30th June 2007. Barrie MacMillan is Chair of the Lower Murray Water Audit Committee and a member of the Human Resources Committee. Barrie is currently a Frank Smith and Allison McTaggart were appointed as Members of the Board Member of the Mallee Catchment Management Authority, Chair of Board on 2nd August 2004 to 30th June 2007. the Dried Fruit Marketing and Dried Fruit Research and Development Michael Tilley was appointed by the Minister as the inaugural Chairperson Industry Advisory Committees. He is a member of the Australian Society of the Authority. of Certified Practising Accountant and a former Director of Sunraysia Rural Water Authority. The primary focus of the Board is to meet Government objectives for water and sewerage, and rural water and drainage services whilst Allison McTaggart is Manager, Human Resources/Community Relations for operating as a commercially oriented body with a high degree of the publicly listed agribusiness - Tandou Limited and Chair of the autonomy. Lower Murray Water provides financial and logistical support Authority’s Northern Urban Customer Consultative Committee and a to Members to maintain or update their skills and knowledge base on an member of the Human Resources Committee. Allison’s previous annual basis. experience includes a Marketing Managerial role with Sunraysia Institute of TAFE. She is a Member of the Institute of Company Directors and Membership Australian Human Resources Institute. Allison is a past Member of the Board of Lower Murray Region Water Authority and the Mildura Private Michael Tilley is Managing Director of the corporate advisory company Hospital, and is currently a joint Director of a family operated Terrain Capital Ltd. He lives in Melbourne and is a Chartered Accountant earthmoving business. with wide business experience in and overseas. Michael is the Water Industry Representative to Vision Super’s Board, where he is Damien Heintze is a Councillor on the Mildura Rural City Council and Chairperson. He is Chair of the Lower Murray Water Human Resources represents Lower Murray Water on the Board of Chances for Children and Committee and was Chair of the former Lower Murray Region Water the Mallee Catchment Management Authority Salt Disposal Committee. Authority. Damien gained a degree in Environmental Management at the University of and his first employment was with Lower Murray Water Kay Martin, Deputy Chair and member of the Lower Murray Water Audit as a part-time Mallee Waterwatch Coordinator before moving to the Committee, is the Managing Partner in the legal firm Martin, Irwin and Mallee Catchment Management Authority.

Lower Murray Water 4 Annual Report 2004/2005 Our Board

Left to right : Michael Tilley, Kay Martin, Leonie Burrows, Peter MacIntosh, May Ward, Frank Smith, Barrie MacMillan, Damien Heintze, Allison McTaggart

May Ward is an owner Director of Bulga Wine Estates, in the Woorinen Wangaratta. Frank worked in Scotland as a Structural Engineer and was a irrigation district of Swan Hill. May is a former Mayor, Deputy Mayor and long serving Municipal Engineer with various municipalities in rural Victoria, Councillor of Swan Hill Rural City and is on several community committees, including Swan Hill. He recently retired from his own engineering and including being Chair of the Authority’s Southern Urban Customer planning consultancy practice and is currently involved in community Consultative Committee. She has considerable experience in the health activities with a continuing interest in the development of the Lower Murray industry, as a nurse/midwife, unit manager, and is currently a Director on Water Region. Swan Hill Hospital Board. She is a member of the Australian Institute of Leonie Burrows is Principal of Leonie Burrows and Associates Management Company Directors, and has a Diploma of Business - International Marketing. Consulting Services and has a background in local government management. Peter MacIntosh is a member of the Lower Murray Water Audit Committee Leonie is a member of Lower Murray Water’s Human Resources Committee. and an irrigation farmer from Robinvale with many years experience in the Her previous roles have included Chief Executive Officer, Director of industry and industry based organisations. Peter is Chairperson of the Table Community Services and Director of Operations with Mildura Rural City Grape Industry Advisory Committee and President of the Robinvale Golf Club. Council. Leonie has a Bachelor of Arts (Information Science) and Bachelor of He was a Director of the former Sunraysia Rural Water Authority. Business and is an Associate Fellow of the Australian Institute of Management, a Fellow of Local Government Professionals and member of the Frank Smith, Deputy Chair of the former Lower Murray Region Water Authority Australian Institute of Municipal Management. is a Civil Engineer, Building Surveyor and Municipal Engineer who lives in

Members Attendance at Meetings

Board Audit Committee Human Resources Committee

Members Eligible to Attend Attended Eligible to Attend Attended Eligible to Attend Attended

Michael D Tilley 11 11 6 5 Kay Martin 11 8 4 4 Barrie MacMillan 11 11 4 4 6 6 Leonie Burrows 11 10 6 5 Damien Heintze 11 9 May Ward 11 10 Peter MacIntosh 11 10 4 4 Frank Smith 10 9 Allison McTaggart 10 10 6 5

Lower Murray Water Annual Report 2004/2005 5 Directors inspecting Mildura Water Our Board Treatment Plant

Board Committees Human Resources Committee The Human Resources Committee reviews executive remuneration in Audit Committee accordance with the requirements of Government Sector Executive The Audit Committee reviews the financial accounts, approves an audit Remuneration Panel, conducts the CEO’s performance review, authorises plan and reviews internal and external audit reports, accounting policies bonuses and reviews the organisational structure. and standards, internal controls and audit performance. Directors Tilley, MacMillan, Burrows and McTaggart are members of the Meetings of the Committee are held no less than four times per financial Human Resources Committee which met on six occasions in 2004/05. year and minutes are presented to the full Board with recommendations for consideration. The General Manager Financial Services provides an Corporate Governance executive service to the Audit Committee. Risk Management In compliance with the Minister for Finance Standing Direction number 2.2, one member of the Audit Committee has had relevant past Risk Management is incorporated into the Authority’s decision making employment experience in the accounting profession and a professional processes. During 2004/05 the services of an external consultant were qualification in accounting. One member has legal and economic engaged to undertake a review of Lower Murray Water’s Risk qualifications and the third member has extensive experience in Management Plans and amalgamated the two previous authorities operational functions appropriate to the needs of the tasks to risk registers. be undertaken. The Authority’s Public Liability Insurer also carried out a risk assessment The Audit Committee’s independent accounting advice, as required, is program and reported that Lower Murray Water had been benchmarked derived from the services of an appointed independent internal auditor fifth out of 13 with a 73% rating against other Regional Water who is suitably qualified. In addition the Committee sources professional Authorities. The average was 70.2%. independent advice/expertise as required. Directors MacMillan (Chair), Martin and MacIntosh are Members of the Audit Committee which met on four occasions in 2004/05.

Lower Murray Water 6 Annual Report 2004/2005 Our board

OurOrganisationalChart

Kevin Murphy Ron Leamon Maurice Tyers

Loris Davis Lee Harding Owen Russell

CHIEF EXECUTIVE OFFICER RON LEAMON

GENERAL MANAGER GENERAL MANAGER GENERAL MANAGER GENERAL MANAGER MANAGER SOUTHERN TECHNICAL SERVICES FINANCIAL SERVICES CORPORATE SERVICES RURAL SERVICES REGION KEVIN MURPHY LORIS DAVIS LEE HARDING OWEN RUSSELL MAURICE TYERS

• Engineering Services • Business Planning & Reporting • Government Relations • Private Diversions •Works and Services •Water/Wastewater Treatment •Treasury & Finance • Customer Relations • Irrigation District Planning and • Operations and Property Operation • Asset/Maintenance • Financial Services • Public Relations Services Management • New Irrigation Development • Customer Accounts & Metering • Legal •Capital Works • Rural Customer Services • Information Technology • Regulatory/Compliance • Environmental Services •Water Trading • Stores • Records Management • Operational Efficiencies • Insurance •Planning/Subdivision • Risk Management /Property Services • Governance •Trade Waste • Human Resource Management

Lower Murray Water Annual Report 2004/2005 7 OurObjectives

Objective - Urban Water Supply Objective Set Action Taken Provide quality potable drinking water in accordance Strategic Plan • Operated systems to achieve 100% compliance with continuous supply with the Safe Drinking Water Act 2003 to urban of water meeting Australian Drinking Water Guidelines (ADWG) 2004. customers in prescribed areas. % compliance of drinking water samples (all categories): E.coli 100.0% Chloroacetic acids 100.0% Trihalomethanes 100.0% Turbidity 100.0% Aluminium 99.4%* Reported against the ADWG 2004: pH 99.9%** Colour 100.0%

* Tests prior to and after were at 100% with there being no change in operational conditions. ** Addressed with flushing/air scouring programs. Continue to meet the levels of service as set out in • Introduction of weekly testing to monitor the quality of drinking water in the Authority’s Statement of Obligations and other all declared districts on an ongoing basis. prescribed health and environmental regulations. •Maintained assets commensurate with reliable delivery of potable water supply services to achieve 99.2% of unplanned interruptions to be restored within 3.63 hours. Number of unplanned water supply interruptions restored within 5 hours: 99.0% Customer water supply average interruption time: 3.57 hrs • Maintained management systems and contingency plans that ensure the quality of product and service is maintained at an acceptable level. •Average number of customers receiving greater than 5 water supply interruptions in a year as a % of customer: 0.08%

Objective - Wastewater Treatment Objective Set Action Taken & Recycling Collect, treat and manage wastewater throughout the Strategic Plan • Progressed Koorlong Wastewater Treatment Plant upgrade. region applying appropriate methods of wastewater •Maintained assets commensurate with reliable delivery of waste-water management which are commensurate with end use. treatment and recycling services to achieve 100% compliance. •Average number of customers receiving greater than 3 sewerage service interruptions in a year as a % of customers: 0 • Maintained management systems and contingency plans that ensured the quality of product and service was maintained at an acceptable level. Number of sewer overflows per 100 km of sewer: 2.19 Volume of wastewater reused as a % of total wastewater produced: 64.2% • Received a report on the options for the future Kerang Wastewater Treatment Plant operation. Assessed options and included the preferred action into the 5 year Capital Works Plan. Seek opportunities to recycle wastewater •Identified new water recycling/re-use opportunities for investigation including potential 3rd party, agricultural and industrial re-use schemes. •Collected and treated wastewater and returned it to the environment. Continuously monitor and review trade waste • Operated and maintained productive wastewater re-use schemes. agreements with industrial users.

Lower Murray Water 8 Annual Report 2004/2005 Supply &Drainage Services Financials ataglance and financiallyviableinthelong-term. efficientlyandremainsprofitable basis, cost recovery Ensure thebusinessof Authority operatesonafull pumped irrigationdistrictsby2020. increasing wateruseefficiencybypressure-pipingall Contribute totheStateGovernment’s goalof of thecommunityandcustomers. infrastructure tomeettheprojectedlong-termneeds irrigationanddrainageassets wastewater, water, maintainandimprovethe Authority’s Continue toplan, for long-terminfrastructureandsystemdevelopment. arefairandreflectthefundingneeds rural services Ensure thatpricingstructures/tariffsforurbanand Objective Develop andimplementMasterPlan. Encourage on-farmwateruseefficiency. initiatives. Paper Implement White condition thanatitspointofextraction. Strive todeliverwatercustomersinnoworse acceptable manner. irrigation propertiesinanenvironmentally disposeorreusedrainagewaterfrom Collect, seasonal allocations. inlinewithentitlementsandtheir and gardenusers, Provide river-quality watertoallirrigatorsandstock Objective 0

10000 T otal Income 2004/05 38,638 $‘000 riain Stock &Garden - Irrigation, 20000 Objectives - Budgetary

30000

40000

50000 0 Captal Works Expenditure

5000 2004/05 12,955 $‘000 Strategic Plan Objective Set Strategic Plan Objective Set

10000

15000 • •O • • •M • • • Action Taken •R • Action Taken • • • • •D 0 h he riainDsrcs ThisplanwillbereleasedinOctober2005. the threeIrrigationDistricts. URS wasengagedbyLowerMurray Water tocompleteaMasterPlanfor water usepolicy. provide thelawsrequiredtoimplementGovernment’s directionon Legislation isduetogoParliamentinthe2005/06yearwhichwill quality of product and service wasmaintainedatanacceptablelevel. quality ofproductandservice Maintained managementsystemsandcontingencyplansthatensuredthe maintenance group. Authority’s operationscentreandareactedoninapriorityorderbythe Allinterruptionsaremonitoredthroughthe an infrequentbasis. Irrigation interruptionsthroughouttheirrigationdistrictsoccuron in 2005toestablishwhetherareasarenowredundant. willbeundertaken Areviewofdrainageservices are decreasingannually. drainagevolumesandlevels drought andimprovedirrigationpractices, Duetotheprolonged the regionaremonitoredbymaintenancegroup. within Drainageservices and gardenwatersupplydrainageservices. 284,438ML. bulk entitlementdelivered: Volume of Extracted riverwaterandpumpedittoirrigationcustomers. requirements. to ensurecompliancewithregulatory Reviewed alloutofdistrictandPrivateDiverterlicencesagreements used irrigationanddrainageassets. Investigated thepotentialforretirementofredundantand/orunder- asset managementsystem. Incorporatedruralassetsintotheurban Management System(AIMS). Optimised assetmanagementutilisingthe Asset Information to drivebusinessefficiencies. In2005/06the Authority willfocusonreviewingworkpractices structure. Implementedastaff Combined thefinancialoperationsontooneplatform. detailed financialmodels/forecasts. Developing aMasterPlanforeachpumpedirrigationdistrictincorporating Monitored performancestandardsforallassets. Expended $13Moncapitalworks. evaluation. stepped charge1stJuly2005. eviewed andmodelledurbanvolumetrictariffstointroduceathird vlpdana AE lnadrnwl rga,includingproject eveloped annualCAPEXplanandrenewalsprogram, fficers ofthe Authority haveattendedthe White Paperbriefingforums. itie sescmesrt ihrlal eieyo riain stock ofirrigation, aintained assetscommensuratewithreliabledelivery

10000 T otal Expenditure

2 2004/05

0000 $‘000 41,291

30000

40000 Annual Report 2004/2005 0 Debt Servicing as%of Debt Servicing Lower Murray Water Operating Expenses 2004/05 0.08

0.05 9

0. 10

PerformanceOur Objectives Summary Our Works

Clarifier No. 4 Mildura Water Treatment Plant overlooking Ornamental and Murray River, Mildura

Lower Murray Water is committed to providing high quality drinking water, wastewater, irrigation, stock and garden, Type of Service

Industry & Business Residential (Urban) Residential (Rural) Agricultural Rural drainage and water recycling services to Supply of Drinking Water to Urban Areas • • our customers. Treatment & Disposal of Wastewater • • Supply of River Water for Irrigation • • Collection, Disposal & Recycling of Drainage Water • Treatment and Recycling of Wastewater • • Stock and Garden Water Supply • •

Lower Murray Water 10 Annual Report 2004/2005 Our Works

Merbein Main Irrigation Pump Station

Major Projects •A further 4.4 km of water mains were constructed for various new infrastructure projects. These included 2.3 km of major supply mains • The Mildura West Water Treatment Plant was scheduled to be required for the distribution into the reticulation system for the new commissioned in November 2004, but the main contractor, Mildura West Water Treatment Plant. Environmental Solutions International Ltd, went into receivership before completing this project. Protracted negotiations with the • Continued development in the Mildura area resulted in 3.4 km of receivers/managers were not resolved until July 2005. The plant will mains being constructed in 11 major subdivision developments. Gas now be completed by the Authority and is expected to be mains for Origin Energy were installed in a number of these commissioned in February 2006. developments in a joint trenching arrangement. In Swan Hill, works have commenced on stage two of the Tower Hill residential •Works were completed on the $2.3M Mildura South West Sewerage development consisting of 46 lots, and a 30 lot industrial Catchment Development Project which involved the construction of a development in Karine Street. 525 mm trunk sewer, major pumping station and associated rising main to service this residential development area. •A major meter replacement program continued for our private diverters’ with Murray River off-takes. The project will see all meters NETWORK RELIABILITY 2003/04 2004/05 2004/05 Variance greater than 100 mm being replaced with electro magnetic flow RESTORATION OF WATER SUPPLY Result Target Result % meters. The project is scheduled to be completed in 2009/10 at a cost of $3.5 - $4.0M. No. of unplanned interruptions restored within 5 hours x100 100% 99.2% 99.0% -0.2% Urban Water Projects Total No. unplanned interruptions • The air scouring program for all townships in the northern region of Lower Murray Water’s potable water distribution system was completed in June 2005. The program which cost $370,000 improved supply to around 20,000 customers and involved cleaning of 540 kilometres of water mains ranging in size from 63mm to 300mm in diameter. • The Authority continued with its program of replacing deteriorating water mains. 3.5 km of mains were selected for replacement in the Mildura region. Mains were also replaced in the shopping precinct of Merbein and the water supply system to the western area of the township of Red Cliffs was upgraded. 1.7 km of mains were replaced in the southern region including 1.0 km in the Swan Hill area and 0.7 km in the Kerang area.

Lower Murray Water Annual Report 2004/2005 11 Our Works

Works at Swan Hill

Inspecting Wastewater Treatment Plant Lagoons Cleaning and inspection of Mildura Wastewater Treatment Plant

Hazard Analysis and Critical Control Points (HACCP) • The Authority constructed 377 metres of 450 mm pipeline in Swan Hill which replaced two parallel pumped sewer mains at a cost of $174,000. HACCP is a quality control system that Lower Murray Water utilises to assess These works were completed prior to commencement of the second hazards/risks in our water treatment and distribution processes. The system stage of the Tower Hill development works. establishes control points at critical steps within the processes that focus on public health and quality issues. HACCP has previously been implemented at • Rehabilitation of 1600 metres of sewer mains ranging in size from the Mildura, Red Cliffs and Robinvale water treatment plants and in 2005 150mm to 300mm diameter was undertaken in the Northern Region HACCP was successfully implemented at the Authority’s remaining water at a cost of $350,000. treatment plants and associated supplies, at Swan Hill, Lake Boga, Nyah, • Some 6.1 km of sewer mains were constructed in new subdivisions Nyah West, Woorinen South, Kerang, Murrabit, Koondrook and Piangil. this year. Urban Wastewater Projects • The major works consisted of 4.3 km (15 projects) in the Mildura area, 0.5 km (3 projects) in Red Cliffs, and 0.6 km (1 project) in the Robinvale • It has been 24 years since anyone has seen the bottom of the Mildura area. Additional sewers were constructed in new subdivisions in the Wastewater Treatment Plant. However, as a result of suspected leaking Kerang and Swan Hill areas. The major Tower Hill development is also construction joints within the carousels (oxidation ditch) it was decided nearing completion in Swan Hill. that the plant would have to be emptied and a closer inspection carried out. After much preparation the plant was emptied by both contractors •A major engineering study has been undertaken in respect to Koorlong and LMW staff over a period of approximately two days, and in the Wastewater Treatment Plant Augmentation to determine the most cost process the remnants of a garden shed (which blew into the plant 18 efficient treatment process that will facilitate reuse of treated wastewater. years earlier) was unearthed. The plant was in good condition although Expressions of interest for total reuse of all available wastewater both some minor structural faults were found. now and in the future, have been received. • Replacement of 1,010 metres of Chapman Street Main from Sewage • An options study for the repair of the lagoon embankments at the Kerang Pump Station No 1 in Swan Hill has been completed at a cost of Wastewater Treatment Plant has been completed. An environmental $495,000. Completion of this pipeline greatly increases the security of assessment of the sustainability of using Fosters Swamp for evaporative the sewerage system in Swan Hill. disposal is required before this project can proceed.

NETWORK RELIABILITY CONTAINMENT OF 2003/04 2004/05 2004/05 Variance SEWER SPILLAGES Result Target Result % (PRIORITY 1 AND 2)

No. spillages contained within 5 hrs x 100 100% 100% 100% Total No. of sewer spillages 0.00%

Lower Murray Water 12 Annual Report 2004/2005 Our Works

Merbein Irrigation Rising Main Rehabilitation Project Lower Murray Water Annual Report 2004/2005 13 Our Works

Our Urban Water and Wastewater Statistics 2004/05

WATER WASTEWATER Residential Non Residential Total Total Raw Water Total Non Revenue Av. Annual Current year Total Volume Assessments* Assessments* Assessments* Metered Taken*** supplied Water (Between Demand Raw Water Assessments Collected Consumption from Plant and meters) (Raw Water) Taken as % Treatment Average Annual Plant Demand

No. ML No. ML No. ML ML ML. ML. ML. % No. ML

Loddon 86 GMW Channel 390 Murray 636 Kerang 1701 777 302 216 2003 993 1112 1054 61 980 122% 1888 527 Koondrook 399 160 48 19 447 179 272 182 3 227 130% 448 91

Lake Boga** 393 208 46 44 439 252 0 280 28 0 0% 323 41

Mildura* 15526 9670 1907 2875 17433 12546 13841 13235 689 13928 99% 14583 3459

Murrabit 37 16 14 9 51 24 33 35 10 35 101% 0 0

Nyah** 260 139 31 38 291 177 0 180 3 0 0% 394 55 Nyah West** 242 145 37 30 279 175 0 222 47 0 0%

Piangil 88 51 19 34 107 85 110 106 21 101 110% 0 0

Red Cliffs 1218 715 175 448 1393 1163 1267 1304 141 1243 101% 1179 208

Robinvale 714 378 193 139 907 517 634 611 94 627 100% 866 229

Swan Hill 4272 2038 794 671 5066 2709 4112 3132 423 4192 103% 4647 1427

Woorinen Sth** 144 79 16 17 160 96 0 137 41 0 0% 0 0

TOTALS 24994 14376 3582 4540 28576 18916 21381 20478 1561 21333 102% 24328 6037

Production Loss & Non-Revenue water - raw water to metered water: 12% Non-revenue water - treated water to metered water: 8% *Includes Merbein and Irymple for water, and Merbein and Koorlong for wastewater. **Supplied from Swan Hill. For these towns “Total supplied from Treatment Plant’ is the volume supplied from the Ground Water Storage. Nyah total metered consumption figure includes customers off the supply pipeline to Nyah before the water storage *** Water is sourced from the Murray River, except as indicated for Kerang Assessments have been aligned to reflect the definition as required by the Essential Services Commission.

Lower Murray Water 14 Annual Report 2004/2005 Our Works

Irrigation Water Usage for the year ended 30th June 2005

District/Area/Waterway Red Cliffs Robinvale Merbein Millewa Murray below Total (“District”) WWD Nyah

TO ML ML ML ML ML ML

Total water rights allotted to district and diversion licences (note 1) 44,862.1 21,453.6 31,944.2 249,077.6 347,337.5

Total domestic and stock allowance (note 1 ) 2,233.7 718.5 1,473.5 700.0 2,507.9 7,633.6

Gross supply at off-takes (note 2) 44,061.0 20,597.0 30,662.0 95,320.0

Used in District Under water rights (note 3) 39,220.0 19,779.0 27,072.0 86,071.0 Under stock and Domestic allowance 0.0 Sale of water 0.0

Total delivered in district 39,220.0 19,779.0 27,072.0 0.0 0.0 86,071.0

Used outside District Under licence 0.0 Under stock and Domestic allowance 0.0

Water Works District (note 4) 15.0 70.0 85.0

Other (note 5) 1702.0 1702.0

Total delivered outside District 1717.0 0.0 70.0 0.0 0.0 1787.0

Diversions from rivers, streams, lakes and main channels Usage under Entitlements 195,879.7 195,879.7 Usage under stock and Domestic

Sales usage

Total delivered Diversions 195,879.7 195,879.7

Total Usage 40,937.0 19,779.0 27,142.0 700.0 195,879.7 284,437.7

Note 1. Includes Red Cliffs or Merbein water rights or D&S including entitlements attached to properties supplied via those systems, but located outside the District boundary. Note 2. Volume shown is total extracted from the river, including that passed onto other districts. Note 3. Includes water delivery to Red Cliffs or Merbein district properties and other properties supplied via those systems, but located outside the District boundary. Note 4. Carwarp WWD supplied through Red Cliffs and Yelta-Wargan through Merbein. Note 5. Volume shown for Red Cliffs is for delivery of environment water for Cardross Basin.

Lower Murray Water Annual Report 2004/2005 15 Our Works

Old and new Red Cliffs irrigation Rising Main

Rural Projects

Irrigation Consultancy work commenced during the year on the three Irrigation • Replacement of 3/10 Pipeline in Robinvale along new alignment. Districts’ Master Plan. This plan seeks to provide a schedule of required •Millewa Lake Pump station – Filter Replacement. works in a priority order for replacing the existing ageing irrigation infrastructure. This work is being completed by URS Consulting Pty Ltd. • Private Diverter’s Metering Project – Completion of Mildura Parish and Work also commenced on the regional business case for accessing the Lake /Lindsay Point stages of project in 2004/05. $20M of funds allocated by the Victorian Water Trust to the Sunraysia region. • Metering of Garden Supplies – The ongoing project to meter all garden Capital works completed: supplies commenced in 2004/05. •Merbein Main Pumping station suction bell replacement – Four suction Drainage bells and bends replaced with fibreglass – Completed June 2005. The Bumbang and Tol Tol drainage schemes were commissioned for • Rehabilitation of Merbein Main Pumping station rising main – Project operation throughout the year. These drainage works now provide drainage commenced 2004/05 to replace pipeline concrete support pedestals and services to private diversion customers in the Robinvale region. The works excavation to provide clearance and access – Project to be completed were commissioned under the joint direction of the Mallee Catchment over two years. Management Authority and Lower Murray Water. • Pipelining of Merbein West drainage channel completed. Property Services • Red Cliffs Main Pumping station subfloor works near completion. Repair work to corroded steel structural supports and concrete reinforcing was The pattern of sustained growth that the region’s building and development completed including the provision of stairs to allow ease of access. sector has experienced over the past several years was evident again during 2004/05. Although development activity was slower, the Authority saw near • Replacement of Red Cliffs No.3 Channel Interceptor Drain – Drain failed record numbers of applications for connection in the residential sector. causing water logging close to residential housing. Growth in the commercial/industrial area has remained buoyant with several • Robinvale Drainage Pump Replacement Program – Four new pumping projects exceeding $20M. installations completed during 2004/05 to replace obsolete units.

Lower Murray Water 16 Annual Report 2004/2005 Our Works

Suction bell replacement at Merbein Main Irrigation Pump Station

Corporate Projects

Information Technology Systems Rationalisation

The merger of Lower Murray Water and Sunraysia Rural Water A major data conversion and validation activity was undertaken to bring Authorities required the rationalisation of existing Information Technology all existing Rural customer, property and billing history records across (IT) systems to enable the new authority to manage and process all from the previous system. information efficiently and appropriately. It also provided an opportunity A decision was made to standardise on the ESRI Land Information to improve processes and procedures in some areas. Decisions were System. This required a major data upgrading project for existing Rural made to standardise on the following systems: GIS records as well as a data conversion project for Urban records from Finance One Financial Management system the previous Infomaster GIS. People One Payroll system Records and Document Management was a new system for the Urban Proclaim Property and Billing system business. The existing Rural TRIM system was upgraded and totally re- Hansen Asset and Works Management system implemented, providing a far more effective tool for the management of WaterNow Irrigation Water Ordering system all the Authority’s critical business documentation and records. The roll TRIM Records and Document Management system out of stage 1 of the TRIM system commenced on 1 June 2005 and ESRI Geographical Land Information System (GIS) encompasses the Corporate, Information Technology, Human Resources To achieve this rationalisation, several sub-projects were undertaken to and Finance business areas. The new system will improve make necessary changes to the above systems to meet the business communication with our customers and stakeholders and enhance the requirements of the new authority. Internal procedures covering all of Authority’s governance obligations in respect to privacy principles. the above areas were modified, data was transferred from previous The IT technical infrastructure for the merged authority is commonly systems and, wherever required, staff trained to work with new or based on Microsoft operating and office business systems. Coinciding changed systems and procedures. with an existing project that has upgraded telecommunications capacity For the Hansen system, system changes were required to cover between the Northern and Southern Regions, the Irymple and Red Cliffs business rules applying to how maintenance and operations activities locations of the Rural business have been linked to the central were managed and tracked. Existing data for the Rural business was Fourteenth Street site, so that all IT facilities and business systems are brought into Hansen from both the previous Mainpac system as well as now accessible, from all Lower Murray Water locations. the Rural ESRI GIS. Rural staff were re-trained to work with Hansen By July 2005, all of the above systems were in operation for the merged work order and timesheet procedures. business, with final stages of implementation of TRIM and the ESRI GIS For the Proclaim system, there was a significant requirement for due to occur over the next few months. enhancement to the complex tariff calculation and billing processes within the system.

Lower Murray Water Annual Report 2004/2005 17 Our Customers Lower Murray Water is committed to maintaining positive relationships and communications with our rural and urban customers, government and other stakeholders.

Customer Consultation The Authority maintains customer-representative and advisory structures and processes through which customers can have meaningful input to the Authority’s planning processes. To this end we have five Rural Customer Service Advisory Committees covering the three Pumped Irrigation Districts, the Millewa and the Private Diverters. There are two Urban Customer Consultative Committees covering the Northern and Southern regions. The Rural Committees were very helpful this year in providing advice on a range of rural issues from Winter Pumping and Maintenance Scheduling, to the Master Plan. Four of the five Committee Chairs and Deputy Chairs met with the Board of Directors in the second half of the year to exchange information and to discuss relevant issues.

Imogen, “Scruffy” the Rabbit and Tate discussing the Lower Murray Water Customer Charter Customer Service Meetings Eligible Forums / Briefings Attended Advisory Committees to Attend Eligible to Attend The Urban Customer Consultative Committees met jointly on two occasions in Merbein and each held one separate meeting in 2004/05. The primary Dr Don Wheatley * 3 2 5 issues for consideration related to the Water Plan, the Customer Service Mr Alan Greatz 3 2 5 Code, Customer Charter, tariffs for 2005/06, customer satisfaction survey Mr Danny Lee 2 2 4 results, the environmental levy and the effect of the merger of Lower Murray Mr David Beard 2 2 4 Water and Sunraysia Rural Water Authority, together with its impact on Mr Richard Wells 2 2 3 customers. Community representatives also raised the issues of Mrs Roslyn Hudson 2 2 4 development and subdivision charges, opportunities for dual water supply Millewa systems, long term water pricing effects on the region and the lack of water Mr Stuart Thomson * 2 2 4 restrictions during the peak Summer period. Mr Allen Harmer 1 2 3 Customer Consultative Committees Meetings Eligible Attended Mr Ian Arney 1 2 3 to Attend Mr Kevin Coogan 1 2 3 Mr Neil Board 1 2 3 Northern Committee Mr Stephen Bennett 2 2 4 Board Member Allison McTaggart * 3 3 Ms Nola Andriske - Community Representative 3 2 Red Cliffs Mr Michael Freeman - Community Representative 3 3 Mr Lindsay Leake * 3 2 5 Mr Glenn Milne - Community Representative 2 2 Mr Cosimo Dichiera 2 2 4 Joined 18 October 2004 Mr Greg Hutchinson 2 2 4 Mr Doug Tonge - Community Representative 1 1 Mr John Piccirillo 3 2 5 Resigned 3 March 2005 Mr John Strangio 2 2 4 Vacancy Mr Robert Bate 2 2 4 Vacancy

Robinvale Southern Committee Mr Ken Stringer * 2 2 4 Board Member May Ward * 1 1 Mr Ian Boyd 1 0 1 Mr Graeme Jilbert - Community Representative 3 2 Mr Kevin Stafford 1 1 2 Ms Deborah Quinn - Community Representative 3 3 Mrs Jeanette Cattanach 2 2 4 Mr Anthony Melis - Community Representative 3 2 Private Diverters Mr Colin Myers - Community Representative 3 2 Mr Geoff Minter * 1 2 3 Mr Graeme Hayes - Community Representative 2 1 Mr Reg Cua 1 2 0 Joined 18 October 2004 Mr Tim Millen 1 2 3 * Denotes Chair of Committee * Denotes Chair of Committee

Lower Murray Water 18 Annual Report 2004/2005 Customer Communication Commitment to our Customers - Lower Murray Water aims to increase the awareness and understanding Customer Satisfaction Survey of the Authority’s services by applying the objectives set down in its Customer A random sample survey of urban customers, balanced across our various customer

Communication Strategy and via the production of informative educational material. groupings and our regions, was conducted by telephone during 2005. Large urban Our Customers Printed brochures are available as a means of imparting new information and customers were surveyed separately by mail. promoting better customer understanding. Electronic copies are available on the The survey sought opinions on a range of services offered by the Authority including Authority’s web site. The brochures also form part of the Valued Customer Kit, which water supply, sewage disposal, billing and handling of enquires. is mailed to every new customer. The kit includes brochures on Customer Services Initiatives, General Customer Information, Resolving Problems, Safeguarding our The satisfaction rating for all questions in the Customer Survey was 84.3%, which is Customers Privacy, the WaterWise Public Garden, “We’ve Used How Much!?” and an improvement on the 2004 result of 83.6%. Your Account Explained. The satisfaction ratings increased in the areas of Water Service, General Service and The Authority provides financial support to the Sunraysia Rural Counselling Service. Sewerage Service. The Service assists rural customers assess their current financial position and identify The highest rating achieved this year is again the Reliability of Water Supply, at options including accessing government assistance if required. 94.85% up from 93.64% last year. Ease of Contacting the Authority was at 83.43% Lower Murray Water provides customers with special communication needs access to with Service Once Contacted, rated at 76.00%. services through the National Relay Service using modem or textphone (TTY) by The lowest satisfaction rating in both 2004 and 2005 was Value for Money of Water dialling 133 677 and quoting 03 5051 3400. Service at 75.15%, down from 76.23% last year. A significant achievement during 2004/05 was the development of a Customer In the survey of Large Customers, ratings in 2005 were up in most areas, with only Charter which sets out the service standards that all urban customers can expect Smell of Water slightly down on last year. from Lower Murray Water. The Customer Charter was signed off by the Essential Services Commission for implementation from 1st July 2005. Complaint Resolution The Authority’s Website, www.lmw.vic.gov.au, provides our customers, and users of the Lower Murray Water maintains open and constructive relationships with all customers Internet with up to date information about the many and various aspects of our business. and listens to and respects their ideas and input. Contact by our customers is treated as a mechanism to gain feedback on the Authority’s services. All urban Payment Options customer complaints are documented by Pro-Act in our billing system, which Lower Murray Water now provides customers with the option to pay their water provides a tracking and reporting facility that ensures each complaint is investigated accounts via Centrepay. Customers are able to have regular deductions taken from and responded to within appropriate timeframes. their CentreLink payments and forwarded direct to the Authority. This service is in addition to the existing payment methods – BillExpress, POST billpay (telephone and Energy & Water Ombudsman Case Handling Statistics internet) Post Offices/Agencies, Direct Debit and any Lower Murray Water office. Customers may elect to contact the Energy and Water Ombudsman Victoria (EWOV) Customer Complaints Performance Indicators - Urban in the event that Lower Murray Water is unable to satisfactorily resolve a complaint. EWOV data for Lower Murray Water is based on its urban and rural sectors. The Authority reports customer complaint data to the Essential Services Commission on a quarterly basis and training was conducted during the year to ensure staff were EWOV 2004/05 Enquiries Complaints Levels 1-3 familiarized with the new system. Overall Water Industry 1083 173

During the year the Authority carried out a complete review of the collection of key Lower Murray Water - Total 19 5 performance data. One outcome was the alignment of customer numbers to that of Lower Murray Water – Urban 8 2 the Essential Services Commission which has decreased the customer numbers from when the 2004/05 target figures were determined. This alteration is part of the Lower Murray Water – Rural 11 3* variance for all of the indicators. * One level 1 complaint in the rural area remains open at 30th June 2005.

Complaints per 1000 2004/05 2004/05 Variance * Water Quality urban customers Target Result % The Authority carried out an extensive air scouring program which resulted in increased complaints in relation to colour and service interruption. No. of complaints x 1000 No of customers Ω Sewerage Service Quality Water Quality Complaints 0.3 0.52 73%* Odour complaints related to a one week period, at one pump station and were Includes all complaints related to colour, taste and odour associated with odour from a particular industrial waste load. The issue was corrected. Sewerage Service Quality ∞ Affordability and Reliability Complaints 0.0 0.70 100% Ω Includes all complaints concerning sewer blockages, spills, sewage odours and service interruptions. Affordability complaints were generally associated with pension concessions, Does not include trade waste complaints lack of BPay as a payment option, body corporate issues and final notices. The Authority has reintroduced BPay as a payment option and has worked with the Water Supply 0.4 1.05 162%* Department of Human Services/Centrelink to provide a more efficient and Reliability Complaints streamlined approach to claiming concessions. Complaints have not been in Includes all complaints concerning burst, leaks, pressure and service interruptions. relation to tariffs and charges, nor related to processing of financial hardship cases. Affordability Complaints 0.0 0.97 100%∞ # Other Includes all complaints concerning billing, financial hardship, installment plans, capacity to pay, prices and tariffs. Complaints were mainly associated with reinstatement of property after work Other Complaints 0.0 0.70 100%# had been undertaken. Such complaints are always immediately followed up Includes all complaints concerning quality and timeliness of other services eg connections, account confidentiality, and actioned. responding to correspondence, staff behavior, trade waste.

Lower Murray Water Annual Report 2004/2005 19 OurCommitmentto Our Region

Director Barrie MacMillan presenting the Tourism Attractions Award, sponsored by Lower Murray Water, to Wilma Bowring and Ken Mansell representing the Australian Inland Botanical Gardens at the 2004 Mildura Business Excellence Awards

To protect and enhance the security of the region’s bulk water entitlement and to Lower Murray Water is committed to ensure that it continues to reflect the economic importance in a national context, contributing to the economic, social and Lower Murray Water is participating in the Murray Demands Study which will model the anticipated flow requirements for the Lower Murray region. This cultural development of the region and document will provide surety to the Authority on issuing water use licences for new irrigation developments. ensuring the security of the community’s The Authority is also participating in the implementation of the Victorian collective water resource. Government’s White Paper ‘Securing our Water Future’, in particular the concept of unbundling of water rights. This new system of water management will provide ease in the transferring of water shares and also the establishment of more robust water use licences for all customers. Lower Murray Water is continuing to purchase water entitlements to add to its urban bulk entitlement. This new water is being purchased to ensure that urban expansion is being catered for.

Lower Murray Water 20 Annual Report 2004/2005 Our Commitment To Our Region Our Commitment To

Lower Murray Water marquee at charity golf day Natalie Raeck presenting Director Barrie MacMillan with a ceremonial bowl and certificate of appreciation on behalf of the Samoa Water Authority

Pursuant to Action 7.7 of the White Paper the Authority has initiated Customers are able to make donations and pay pledges through the discussions with Grampians Wimmera Mallee Water to examine Authority’s quarterly account. appropriate financial readjustments that may facilitate the transfer of the Northern Mallee Pipeline District to Lower Murray Water. Samoa Water Authority The Authority has the role of coordinating new irrigation developments. The Authority donated computers including monitors and keyboards to the This continues to be very important with the dramatic expansion in the Samoa Water Authority in Apia in December 2004. Darren Raeck who region of horticultural development and the flow on effect to our urban had taken leave from the engineering team of the former Sunraysia Rural areas. The Authority approved new irrigation developments totaling 3,500 Water worked with the Samoa Water Authority as an Advisor, providing hectares in 2004/05. training to upgrade employee skills to enable the Authority to design and install pipeline and water treatment systems. One of the major hurdles Working In Our Community Darren faced was the lack of computers and Lower Murray Water was able to assist by providing eight reconditioned PC’s and monitors which Lower Murray Water recognises our interrelationship with the economic, were identified as excess following the merger. The Authority conducted social and cultural well-being of our region and has continued its an in-house auction of other excess IT equipment with monies raised sponsorship of local schools and community groups such as the Country going to the cost of freighting the computers to Samoa. Fire Authority, garden and swimming clubs and the River Health Conference for school students. The Authority also participated in the Natalie Raeck on behalf of Moefaauo Taputoa Titimaea, Managing Director Mildura Rural City Council’s Mayor’s Prize for Water Saving Initiatives. of Samoa Water Authority presented Barrie MacMillan, Director, Lower In return for corporate sponsorship the community groups promote water Murray Water with a Certificate of Appreciation and a ceremonial bowl conservation. Lower Murray Water also sponsors three Business in recognition. Excellence Awards across the region. The Authority was delighted to present the Tourism Attractions Award to the Australian Inland Botanical Value of Community Service Obligations Provided Gardens, at the 2004 Mildura Business Excellence Awards. Lower Murray 2004/05 Water provides support to the gardens by way of the donation of pipes. Concession to Pensioners $1,056,814 Our three corporate marquees again proved very popular with community groups, school and sporting clubs. The marquees appeared at 79 State Revenue Office Rebates $134,367 separate locations during 2004/05. These marquees, which are provided Utility Relief Grants Scheme $3,645 free of charge, link Lower Murray Water to our community. Total $1,194,826 The Authority also provides bottled water to many major conferences held in our region. This service not only promotes the Authority but assists our Urban Metering large corporate customers. The integrity of our metering system is of paramount importance to the Authority as over 60% of charges to customers relate to volume of water Chances for Children consumed. Lower Murray Water operates a meter retrofit program based Chances for Children was an initiative of the Sunraysia Rural Water on age and volumetric recording. Authority, Lower Murray Water and the First Mildura Irrigation Trust in Significant meter regulatory controls which are being introduced at a partnership with Mallee Family Care. Lower Murray Water continues to National and State level have led to a decision by the Authority to decrease support the fund which was established in 2001 to ensure that the the volumetric recording trigger for 20mm meters from 8,000kL to 5,000kL. absence of money does not stand in the way of a young person’s ability to This level of replacement is to be phased in over the next three years. achieve their maximum potential in life. The fourth birthday of Chances for Children celebrated 300 young people being assisted by this partnership. All 20mm and 25mm meters are supplied with dual check valves integrally fitted, which protect and minimise the risk of contamination The Chances for Children Mentoring Program was re-established in through backflow to our water supply. All high-risk properties, including August 2004. The focus of the program is to offer Chances recipients who public standpipes are required to have reduced pressure zone/backflow are participating in tertiary education, the opportunity to work with a prevention devices fitted. mentor who is qualified in the same or an associated area of study and preferably living in the same area. Twelve students are currently matched with mentors and more matches are in train.

Lower Murray Water Annual Report 2004/2005 21 Our Commitment To Our Region

Jim Jones assigning scrapped meters to Around Again

Lower Murray Water 22 Annual Report 2005 Our Commitment To Our Region Our Commitment To

Waterwatch Water Quality Monitoring Project Work experience student on site

Scrapped Meters Culturally/Linguistically diverse backgrounds Meters that have reached the end of their service life are transported to The Authority is committed to ensuring that its ethnic customers have the “Around-Again” recycling depot operated by the Christie Centre at the access to information on the provision of water, sewerage and irrigation Mildura Landfill. Meters are dismantled and sorted into the various metal services. Customers with special communication needs can call compounds ready for sale on the scrap metal market. Additionally, 13 14 50 to access language interpreter services. “Around Again” supplies painted survey pegs to the Authority. Both A pool of employees who speak languages other than English is available activities provide employment opportunities for people with dissabilities to address the cultural and linguistic diversity of our customers. within our region. Women Splash Gang Recruits The Authority’s nine member Board includes four female members and it The Splash Gang water conservation program continued in summer has an on-going initiative to promote participation in the “Women in the 2004/05 with the production of new TV and radio commercials. The Water Industry” Forum. scene is set in a court room and depicts adults being tried and convicted by a Splash Gang jury. Employment conditions provide for maternity, paternity, adoption and carers leave. Lower Murray Water applies merit and equity principles in A series of water conservation announcements depicting various wasteful staff appointments to ensure that the most competent person is selected situations to which Splash Gang members offered solutions was also for the work required. aired on television throughout the region. Youth River Watch Lower Murray Water actively encourages work experience for secondary River Watch promotes the theme of “Treat the River Like a Friend” and students and vacation employment for students studying at universities encourages people to report any incidents of unsocial behaviour that may and TAFE colleges. The Authority hosted three engineering tertiary be detrimental to the health of the river. The program operates in a similar students and five secondary students in various fields and offices during way to Neighbourhood and Rural Watch. 2004/05. The Authority also participates in a Group Apprenticeship Scheme which annually involves six first year apprentices and a Waterwatch 2004/2005 traineeship. Lower Murray Water also supports youth through its Lower Murray Water partly funds both the Mallee and North West involvement with local schools during National Water Week and through Waterwatch programs which have this year delivered valuable education the Chances for Children program which assists young people attain to a wide range of audiences on a variety of water issues. The number of their potential. visits to schools, community groups, and individuals increased due to the ongoing interest in water management. The program has become more Indigenous Affairs focused on River Health issues and is gaining a larger number of The Authority makes available financial support for the employment of a interested community monitors. Waterwatch has increased the 0.5EFT position related to a local indigenous project which is consistent community’s capacity to be involved in river health management through with the Victorian Government Public Sector Indigenous employment changing attitudes and actions concerning local waterways. Strategy ’Wur-cum-barra’ In excess of 5,500 participants were involved in Waterwatch activities Lower Murray Water liaises with local Aboriginal communities in respect such as the water bug surveys, water quality monitoring and habitat to protection and salvage activities and provides for indigenous cultural assessments and attended presentations on water conservation, salinity, heritage and Native Title requirements by carrying out Environmental water quality, nutrients, river health and environmental flows. Impact Assessments prior to undertaking capital works. Community Inclusiveness Lower Murray Water supports the government’s initiatives on community inclusiveness. It recognises that cultural diversity will result in a thriving community and consideration of cultural needs in the daily operation of the business will enrich the community further.

Lower Murray Water Annual Report 2004/2005 23 Our Environment

Johnson's Bend - Site of emergency watering of river Red Gums carried out with water donated by the region's irrigators. The Authority facilitated this concept by waiving water transfer fees

Lower Murray Water is committed to Our Water – Our Future planning and managing all our Many forums and working group meetings have been held in the past year. The Authority is represented on all of the ‘Unbundling’ of Water Entitlement Working Groups operations in an environmentally and the Water Market and Irrigation Reforms Steering Committee. responsible and sustainable manner. The Authority has briefed rural customers on the potential implementation issues of the White Paper.

Recycling of Water The Authority continues to address the Victorian Government’s White Paper requirements related to re-use of wastewater and recycles effluent from its wastewater treatment plants using a variety of methods. Currently the Authority has two on-site reuse agreements for the irrigation of fodder at Robinvale and Koondrook and one off- site third party agreement to supply Red Cliffs Golf Club with secondary treated wastewater from the Red Cliffs Wastewater Treatment Plant.

Lower Murray Water 24 Annual Report 2004/2005 Class C Effluent from Mildura Wastewater Treatment Plant is utilised to Lower Murray Water will develop a Biodiversity Management Plan in irrigate tree lots, permanent pasture and fodder. Class D effluent from the 2005/06 that will overarch the Authority’s Biodiversity Asset Register. The Our Environment Our Environment Koorlong Wastewater Treatment Centre is utilised for the irrigation of tree Management Plan will provide guidance on how the Authority is to lots on-site, however plans for the upgrade of this plant include the manage its biodiversity and issues impinging on biodiversity. provision of producing an effluent quality that is of Class C standard, Currently Lower Murray Water is engaged in biodiversity preservation. At suitable for the irrigation of high value horticulture. The Authority’s Lake Cullulleraine the Authority is examining options for the protection of remaining sites return water to the water cycle via evaporation from Growling Grass Frog habitat. Within the confines of the Mildura West lagoon based systems. Water Treatment Plant the Authority is working with stakeholders to The Lake Boga Wastewater Treatment Plant was commissioned in May ensure the protection of the Hooded Scaly Foot Lizard. 2004. The plant has been designed to meet Class C standards and the wastewater is returned to the environment via evaporation after treatment Victorian River Health Strategy in two facultative lagoons. Key benefits of the plant include expected Lower Murray Water is a representative body on the local Mallee Regional reductions in nutrient loads and the resultant incidence of blue-green River Health Strategy. This strategy is a five year management plan for algae blooms in Lake Boga caused by seepage from septic tanks and the region’s waterways and links management actions of other regional open drains carrying grey water to the lake. action plans and programs. Examples of these action plans include the Lower Murray Water will commence providing the Mildura Golf Club with Yarriambiak Creek Management Plan, the Murray River Frontage Action alum sludge lagoon supernatant water, once the Mildura West Water Plans and the Living Murray Significant Ecological Asset Plan. Treatment Plant is operational. The Authority project managed a regional consultancy in the 2004/05 year on the Zoning of Diversion Works in the Murray River Public Purpose Environmental Water Allocation Reserve. This consultancy set up areas of preferred placement for any Lower Murray Water worked with the Department of Sustainability and new diversion works. Environment (DSE) to provide a freshwater supply to the Cardross Lakes The Authority financially supports River Watch, a river care group located to support the aquatic ecosystems. The Authority provided 1,702ML for in Sunraysia and also contributes both in-kind and financial support to the the Lakes system from DSE’s Environmental Bulk Water Entitlement. Mallee and North Central Catchment Management Authorities’ The Authority’s irrigation customers also participated in the temporary Waterwatch programs. transferring of unused irrigation water to the DSE Environmental Bulk Lower Murray Water financially supports the e-Water CRC and Water Entitlement. This water was used for the local Red Gum Watering subsequently the Lower Basin Laboratory of the Murray Darling Projects. The Authority supported this project by waiving all transfer fees Freshwater Research Centre located in Mildura. The Authority also associated with the donation of water to the environment. The Authority provides in kind support by providing a staff member to sit on the local transferred a total of 943.4ML from irrigators and our Urban allocation to advisory committee to the Lower Basin Laboratory. the program. The Authority is an associate member of and financially contributes to Trade Waste Partnership the Co-operative Research Centre for Water Quality and Treatment and continues to be a member of the Sunraysia Regional Algal The Authority has joined with the Environmental Protection Authority (EPA) Co-ordinating Committee. and local industry in Sunraysia in an innovative program to reduce liquid waste flows and inputs of salt and other parameters to the Authority’s Victorian Greenhouse Strategy Wastewater Treatment Centres. The improvement in trade waste water quality will ensure that good quality water is available for reuse and will Lower Murray Water has initiated a study to review the aeration reduce pressure on our water supplies and improve our environment. equipment on the activated sludge process at the Authority’s Mildura Wastewater Treatment Plant. A full economic analysis is to be completed Regional Catchment Strategy (RCS) in the 2005/06 financial year. Lower Murray Water is a partner agency for the Mallee Catchment In order to reduce greenhouse gas emissions the Authority purchased, Management Authority in implementing the Mallee RCS (2003 – 2008). where possible, high efficiency motors for its Mildura West Water Treatment Plant. The Authority undertakes various activities and projects in relation to salinity and drainage management on behalf of the local Catchment An augmentation study is currently being undertaken for our Koorlong Management Authority and is also represented on many of their Wastewater Treatment Plant. The study includes a Net Present Value implementation committees and groups. analysis on energy costs over a 20 year period to assist in the selection of a preferred treatment process. Victorian Biodiversity Strategy A formal Strategy Plan for the management of the Authority’s greenhouse The Victorian State Government requires all Water Authorities to prepare emissions will be developed in 2005/06. This plan will set the framework and report on their Biodiversity Asset Register in line with the Victorian to assist Lower Murray Water reduce its greenhouse emissions and Biodiversity Strategy. ensure that this is fully considered in future decision making relating to the creation of new assets. Lower Murray Water has Biodiversity Asset Registers for both its rural and urban sites which are used to monitor and manage the significant flora Salinity and Water Quality Management and fauna that exists on Authority land. The Authority was a major stakeholder in the preparation of the Draft A consultant will be engaged in the 2005/06 financial year to undertake a Victorian Mallee Salinity and Water Quality Management Plan and review of the Authority’s Biodiversity Asset Registers. The two new sites of will continue as an implementation partner for the new plan once it Lake Boga Wastewater Treatment Plant and the Mildura West Water is approved. Treatment Plant will be included in this review.

Lower Murray Water Annual Report 2004/2005 25 Our Environment

Lower Murray Water 26 Annual Report 2004/2005 New Irrigation Development An important facet of an EMS is staff education. Lower Murray Water Our Environment conducted information sessions for staff in relation to the Authority’s The region continues to grow at a substantial rate. Permanent water environmental aspects and impacts, objectives and targets and the trading from the Goulburn Murray Gravity Irrigation Districts predominantly Environmental Management Program. Information sessions were also to the large scale almond plantations continues at record levels, with a net conducted for outdoor staff on how to appropriately respond to and report 20,848ML moving into the Mallee in the 2004/05 season. sewage spills. Lower Murray Water is working with the Department of Sustainability and Development of the Authority’s EMS also includes the production of a Environment on the ‘Assessment of Victorian Demands in the River Murray central EMS manual located on the Authority’s Intranet. This manual allows and Future Supply Options’ project. This project will provide quantified data easy access for staff, reduces paper use and is an effective tool for on the effects of large volumes of water being supplied and extracted from maintaining document control. the Victorian Lower Murray region. To assist our evaluation of compliance with environmental legal obligations, Water Quality Monitoring – Drainage Water the Authority has subscribed to a legal updating service and a legal obligations directory. The Authority continued to form a part of the regional project support group for the Implementation of Catchment and Hydrogeological The Authority’s EMS is a dynamic system that is reviewed and updated to monitoring. The monitoring within the region provided data on the reflect changes that occur within the business. continued downward trend of the amount of drainage water coming from the Authority’s drainage systems. Reduction in Corporate Waste A major change in the monitoring of regional surface and drainage water As part of our goal to plan and manage our operations in an occurred in March of 2005 and saw the establishment of the regional environmentally responsible manner the Authority has introduced the use North West partnership by DSE and partner agencies. As a result of this of Australian made 80% recycled paper for photocopying and printing partnership Thiess Environmental has been contracted to conduct project purposes. The Authority is also rolling out across the business in a three management monitoring services right across North West Victoria. stage process, an electronic records management system (TRIM) which will reduce paper usage. Incoming documents are now scanned and Mallee Salinity Disposable Entitlement (SDE) emailed alleviating the need to copy and distribute. Paper/cardboard usage is also reduced as the Authority has eliminated the use of Financial Committee suspension and manilla file folders. The Mallee SDE Committee provides governance over the funds generated from water trading in the Mallee CMA’s region. Lower Murray Water Collection and Sale of Eucalyptus Grandis irrigators contributed in 2004/05 $828K (Capital) and $325K (Operations Seed from Koorlong and Maintenance) to the CMA for regional salinity credit generating projects. The Authority has a collaborative agreement with ensis Genetics for the collection and sale of E.grandis seed from the 110 hectare woodlot at the Environmental Management System (EMS) Koorlong Wastewater Treatment Plant. Lower Murray Water has harvested a total of 1,828 grams of seed in the past five years which is sold by the In order to comply with the Authority’s Statement of Obligations, Lower Australian Tree Seed Centre to enhance the genetics of E.grandis in Murray Water must develop and implement an EMS. The current EMS plantation forestry. Seed has been sold both within Australia and to reflects the urban operations, however the Authority is currently overseas countries including Eritrea, Vietnam, China, Argentina, Israel and undertaking the process of identifying significant aspects of the rural Sri Lanka. business which will be incorporated into the Authority’s Environmental Management Program (EMP). The Authority’s EMP is a plan of action for improving the Authority’s environmental performance. The EMP designates responsibility and resources to ensure that its environmental objectives and targets are achieved. Actions that have been achieved under the EMP include: • Spill risk audits completed for all the Authority’s Water Treatment Plants and the Koorlong Wastewater Treatment Plant. • Spill control equipment has been sourced for use during sewage spills. • Bird surveys have been completed for the Swan Hill and Koondrook Wastewater Treatment Plants.

•Weed surveys have been completed for all Water and Wastewater Cumbungi at Murrabit Dam Treatment Plant sites. •Weed education sessions in partnership with the Department of Primary Industry were held for all Lower Murray Water outdoor staff. • Soil bed filters have been installed at selected sewage pump stations in the Southern region to reduce odours from these pump stations.

Flax Lily at Koorlong

Lower Murray Water Annual Report 2004/2005 27 Our People

Preparing to change over the chlorine cylinder

Lower Murray Water Staff - July 2004 Our new farm dog 'Chester' with Graeme Hobbs

Our Philosophy Lower Murray Water - a place We recognise and value the contribution our staff make to the business of Lower where people want to work. The Murray Water and provide them with a positive, safe working environment. We seek to ensure the workforce of Lower Murray Water is reflective of the gender, Authority motivates and empowers age and ethnic diversity of the wider community and provide opportunities for all its people to ensure that a quality, staff to develop and improve their skills to contribute to the Authority’s overall business performance. skilled and committed workforce is The Authority recruits the best people for the job and provides terms of maintained. engagement which reflect both Authority and employee needs. We maintain and enhance a positive work environment and culture that encourages staff, rewards effort and innovation and makes the Authority a desirable place to work. A survey of 150 staff was conducted in October 2004 with 110 responses received. 81% of staff rated their job as very good or good.

Lower Murray Water 28 Annual Report 2004/2005 Staff Development and Training Lower Murray Water expanded its commitment to staff safety with a new Our People initiative of setting safety related Key Performance Indicator (KPIs) targets. Lower Murray Water has adopted an Authority-wide, strategic approach to The KPIs are part of the Authority’s ongoing program of occupational identifying and meeting the learning and development needs of staff. It health and safety and part of the strategic plan designed to engender a has cooperative arrangements with other authorities within the region to safe and healthy work environment. provide learning and development programs for staff. During 2004/05 over 120 training sessions were conducted, primarily in the area of Lower Murray Water utilises the services of an OHS Consultant on a occupational health and safety. contract basis. Following the amalgamation in July 2004, an integrated OH&S program was formulated for the organisation as a whole, with The Authority also participates in a local Group Training Scheme and differing Policies, Operating Procedures, reporting methods and forms annually hosts and trains up to nine apprentices/trainees. being revised. In February 2005 the Board approved a Study Leave Application from Ms Due to the large geographical area of the Authority, two Safety Monica Peers, Environmental Officer, to undertake her Bachelor of Committees operate (Northern and Southern) and each meets at least Environmental Science (Catchment Management) via distance education. quarterly. Information on staff skills and needs are identified, with staff receiving training they require to carry out their duties, and maintain the Staffing Trends and Profiles certificates and qualifications necessary for working safely. In addition, The Authority employs staff at Mildura, Irymple, Red Cliffs, Robinvale, information sessions and tool-box meetings are conducted regularly by Lake Cullulleraine, Swan Hill and Kerang. our Consultant and/or relevant Supervisors. The OHS program includes regular workplace and site inspections for both Staff and Contractors. The staff turnover rate for 2004/05 was 10%. As the merger took place on 1st July 2004, the following statistics are a combination of the two former Authorities. Statistics 2003/04 2004/05 Days Lost 2004 2005 - Sick/Family Leave 895 972 Male Female Total Male Female Total - Workcover 143 132 Executive 9 1 10 8 1 9 Number of Lost Time Injuries 9 3 Administration 53 37 90 57 27 84 Lost Time Injury Frequency Rate * 25.1 11.5 Operations 67 0 67 47 0 47 Claims Frequency Rate ** 21.5 3.8 Special Projects 1 1 1 1 Percentage of annual Workplace 100% 100% 130 38 168 113 28 141 Inspections completed Vacancies 2 16 * Number of injuries x 1,000,000 ÷ by total hours worked Totals 170 157 ** Report may not result in a lost time injury claim To assist staff minimise health risks, the Authority arranges for service providers to conduct skin cancer checks, hearing and eye testing and Staff Service Awards vaccinations for influenza, hepatitis and tetanus. An Employee Assistance In 2004/05 the Authority presented service awards to the following staff: Program is also available to staff and their families who may experience problems whether they be work or personal related problems. The service is provided on a personal and confidential basis. 25 Years 20 Years 10 Years Janet Dawes David Elms Owen Russell Industrial Relations Kevin Gates Jan Evans Beverly Simpson Lower Murray Water has achieved the integration of all staff to the new organisational structure and consulted with relevant unions regarding Ian Matheson Don Howarth Roger Smith transition arrangements. No disputes or days lost occurred. Daryl Wilkie Pam Midgley Brian Teasdale Development of an integrated Enterprise Bargaining Agreement for the Leigh Thomas merged workforce has commenced with the target date for implementation being January 2006. Merit and Equity Staff Charity Fund The Authority applies merit and equity principles when appointing staff. The selection processes ensure that applicants are evaluated on the basis Lower Murray Water staff and Directors can elect to contribute to a Staff of key selection criteria without discrimination. No issues of Merit and Charity Fund by way of regular salary deductions. Accumulated funds are Equity were raised in 2004/05. The Authority provides detailed reports then distributed to charities within our region. Donations from the Staff and statistics to the State Services Authority as required annually. Charity Fund this year have been made to the Salvation Army Red Shield Appeal, Mallee Sexual Assault Unit, Sunraysia District Scouts and Mallee Occupational Health and Safety Accommodation and Support Program. Safety is of paramount importance to Directors, Management and Staff at Lower Murray Water and it is one of our main areas of focus. In 2004/05

Lower Murray Water Annual Report 2004/2005 29 OurFinancialManagement

View of Eucalyptus Grandis Plantation - Koorlong Wastewater Treatment Plant

Lower Murray Water is committed to Financial Review managing the Authority’s assets and Lower Murray Water has completed its first year of operations as a merged entity and during this period the combined assets of the financial resources responsibly. Authority were required to be revalued. Independent valuers, Currie & Brown were engaged. The result was a 68% increase in infrastructure assets which gave rise to a $6M increase in Financial Summary $'000 depreciation. This increase in depreciation has resulted in an operating deficit before tax of $2.6M. Total Revenue 38,638 Development activity although still strong, did abate with a reduction of $1.1M in income from last year. Expenses - OM & A 26,723 As reflected in the Financial Summary, the Authority has a very - Depreciation 14,537 sound and strong balance sheet. The Authority completed $13M in - Borrowing 31 capital works during the year, which was all internally cash funded. 41,291 No new loans were taken out in the year. Net Operating Result (b/f tax) (2,653) Renewals Reconciliation Total Assets 468,416 As required by Government, the Authority’s pricing policy for the Total Liabilities 14,092 rural services of the business includes providing adequate funding to maintain the condition of the required network of channels, pipelines and structures using the renewals concept. This methodology involves planning and setting aside funds for known future asset replacement and rehabilitation, rather than including a depreciation charge based on existing assets in prices.

Lower Murray Water 30 Annual Report 2004/2005 The following financial statements are prepared in accordance with The following key assumptions have been used in determining the Australian Accounting Standards which require that asset consumption be Authority’s renewals charge: measured using conventional depreciation charges based on replacement The renewal annuity was last calculated in 2001 cost and expected lives. • The annuity period selected is 100 years The following table reconciles the financial result shown in the financial statements with that based on the renewal annuity approach. • The assumed interest rate is 4% Our Financial Management Year Ending 30th June 2005 $’000 • All assets directly associated with water distribution and drainage Operating Result / surplus (deficiency) (179) are included in the determination Add back: Depreciation 5,304 The renewals result for each of the Authority’s business entities is Subtract: Renewals 2,999 available from the Authority’s office at Fourteenth Street, Mildura. Operating result / surplus (deficiency) 2,126 after Renewals Charges

Financial Indicators 2004/2005 Actual Target Variance % % % Long Term Profitability Return on Assets -0.6 0.5 -220* Owner’s Investment Return on Equity -1.0 0.2 -350* Long Term Financial Viability Debt to Equity 0.0 1.0 -100* Liquidity & Debt Servicing Interest Coverage -19107 4503 -524* Immediate Liquidity & Debt Servicing Interest Coverage -581 31897 -102 Operating Efficiency - Water Operations, Maintenance, & Administration 51.8 N/A N/A Expenses/ML transported. Reticulation/Treatment Operating Efficiency - Wastewater Operations, Maintenance, & Administration 98.1 N/A N/A Expenses/ML transported. Reticulation/Treatment *The Authority undertook a revaluation as at 1 July 2004. The result of the revaluation was greater than expected which effected depreciation.

Loan Liability as at: 30 June 2005 LOAN NO. PERIOD AMOUNT RAISED INT. RATE REDEEMED LIABILITY

ROBINVALE SEWERAGE DISTRICT 3 73 - 13 250,000.00 6.90 0.00 250,000.00 TOTAL ROBINVALE SEWERAGE 250,000.00 0.00 250,000.00 TOTAL LOAN LIABILITY - ROBINVALE 250,000.00 0.00 250,000.00

SWAN HILL SEWERAGE DISTRICT 16 66 - 06 75,000.00 5.75 0.00 75,000.00 22 71 - 11 50,000.00 7.40 30,090.46 19,909.54 24 72 - 12 50,000.00 7.10 29,416.76 20,583.24 26 73 - 13 100,000.00 6.40 56,947.92 43,052.08 28 73 - 13 100,000.00 7.40 51,256.71 48,743.29 TOTAL SWAN HILL SEWERAGE 375,000.00 167,711.85 207,288.15 TOTAL LOAN LIABILITY - SWAN HILL 375,000.00 167,711.85 207,288.15

TOTAL LOAN LIABILITY - AUTHORITY 457,288.15 LESS separately held Loan Redemption Reserves as at 30-Jun-05 $0.00

TOTAL ADJUSTED LOAN LIABILITY - AUTHORITY 30-Jun-05 457,288.15

Lower Murray Water 31 Annual Report 2004/2005 OurService Delivery Performance Indicators

Quality of Wastewater Disposal Aggregate Annual Performance of a Treatment or Disposal Facility No. of individual test results meeting EPA licence conditions x 100 2003/04 Result 2004/05 Target 2004/05 Result Variance % No. of routine tests for the year Kerang 100% 100% 100% 0% Koorlong 100% 100% 100% 0% Merbein No irrigation 100% 100% 0% Mildura 92% 100% 100% 0% Red Cliffs 100% 100% 100% 0% Robinvale 100% 100% 100% 0%

Quality of Wastewater Disposal Short Term/Persistent Compliance with EPA Licence No. of sets of test results meeting EPA licence conditions x 100 2003/04 Result 2004/05 Target 2004/05 Result Variance % No. of sets of routine tests for year Kerang 100% 100% 100% 0% Koorlong 100% 100% 100% 0% Merbein No irrigation 100% 100% 0% Mildura* 75% 100% 100% 0% Red Cliffs 100% 100% 100% 0% Robinvale 100% 100% 100% 0% There are no EPA licence discharge limits for the Koondrook, Nyah/Nyah West, Lake Boga and Swan Hill WWTPs. This is the first full 12 months operation of the Lake Boga treatment plant. *Note the Mildura EPA licence limits are median values over the licence reporting period.

Waste Management for Wastewater Effluent Reused Volume of effluent reused x 100 2003/04 Result 2004/05 Target 2004/05 Result Variance % Total volume of effluent produced Kerang 0% 0% 0% 0% Koorlong 100% 100% 100% 0% Merbein 0% 0% 100% 100% Mildura 100% 100% 100% 0% Nyah/Nyah West 0% 0% 0% 0% Red Cliffs 100% 100% 100% 0% Robinvale 100% 100% 100% 0% Lake Boga N/A 0% 0% 0% Swan Hill 0% 0% 0% 0% No effluent is discharged to waterways. At Kerang, Nyah/Nyah West, Swan Hill, Lake Boga and Merbein all effluent passes to evaporation lagoons and is returned to the water cycle via evaporation. Due to reduced influent volumes at Merbein a minimal volume may be used in some years to irrigate a tree plantation to maintain plantation viability. This occurred in 2004/05 resulting in the variance from target. No effluent has become available for reuse from the Koondrook WWTP (commissioned October 2000).

Wastewater Sludge Reused/Recycled Lower Murray Water has no reused/recycled wastewater sludge for 2004/05. The Authority’s Koorlong lagoons were de-sluged in June and will be reused in accordance with the guidelines when a suitable site is obtained. Some sludge from the Mildura lagoons has been used on a National Biosolids Trial conducted by CSIRO. Sludge is currently being stockpiled ready for pasture renovation works in 2006/2007 on site in accordance with guidelines. The Merbein lagoon is programmed to be desludged in 2005. Minimal sludge is produced at the Red Cliffs Plant, stored on site and will be transported to Koorlong for reuse. De-sludging is not programmed at Robinvale, Nyah, Lake Boga, Kerang, Koondrook and Swan Hill for at least 10 years.

Lower Murray Water 32 Annual Report 2004/2005 OurTransfer of Water Rights, Licences and Sales Water, Irrigation Water Usage and Licence Entitlements

Permanent Transfers of Water Rights and Diversion Licences Processed by the Authority during the year ended 30th June 2005 Summary

District / Internal transfers Total transfers Total transfers to Total transfers from Total transfers to other Net increase Area/ within district / from other districts other districts / other districts /areas other districts / areas / decrease for Waterway area or waterway /areas and areas and and waterways of and waterways of other other district / area (“District”) waterways within waterways within other Water Water Authorities or waterway Lower Murray Lower Murray Authorities Urban & Rural Urban & Rural Water Authority Water Authority

No. ML No. ML No. ML No. ML No. ML ML

Red Cliffs 5 57.1 2 12.0 7 -53.0 1 6.5 12 -291.5 -326.0 Red Cliffs O/D 0 0.0 2 11.0 0 0.0 2 33.0 0 0.0 44.0

Robinvale 1 1.5 1 2.0 1 -20.0 4 176 1 -20.0 138.0

Robinvale O/D 0 0.0 1 3.0 0 0.0 1 0.0 0 0.0 3.0

Merbein 2 13.5 0 0.0 10 -151.5 5 41.7 18 -420.8 -530.6

Merbein O/D 0 0.0 5 24.5 0 0.0 2 103.0 0 0.0 127.5

Murray below Nvah 30 7904.5 11 189.0 4 -17.0 170 25,175.1 10 -3955.0 21,392.1

Total 38 7976.6 22 241.5 22 -241.5 185 25,535.3 41 -4687.30 20,848.0

Note. O/D areas are those outside the irrigation districts but supplied by the district supply system.

Transfers from and to Districts / Areas and Waterways within Lower Murray Urban and Rural Water Authority 30th June 2005

FROM Red Cliffs Red Cliffs Robinvale Robinvale Merbein Merbein Murray below Totals O/D O/D O/D Nyah

No. ML No. ML No. ML No. ML No. ML No. ML No. ML No. ML

Red Cliffs 5 57.1 2 12.0 7 69.1

Red Cliffs O/D 2 11.0 2 11.0

Robinvale 1 1.5 1 2.0 2 3.5

Robinvale O/D 1 3.0 1 3.0

Merbein 2 13.5 2 13.5

Merbein O/D 1 5.0 4 19.5 5 24.5

Murray below Nyah 4 37.0 1 20.0 6 132.0 30 7904.5 41 8093.5

Total 12 110.1 0 0 2 21.5 0 0.0 12 165.0 0 0.0 34 7921.5 60 8218.1

Note. O/D areas are those outside the irrigation districts but supplied by the district supply system.

Transfers from Districts / Areas and Waterways of other Water Authorities

FROM Other Bulk Other Bulk Other Bulk Other Bulk Other Bulk Other Bulk Totals Entitlement Entitlement Entitlement Entitlement Entitlement Entitlement Holder-GMW Holder-FMIT Holder-NSW Holder-SA Holder-LMW Holder-Wimmera Grampians Water

TO No. ML No. ML No. ML No. ML No. ML No. ML No. ML

Red Cliffs 2 6.5 2 6.5

Red Cliffs O/D 1 25.0 1 8.0 2 33.0

Robinvale 3 176.0 3 176.0

Robinvale O/D 0 0.0

Merbein 1 41.7 1 41.7

Merbein O/D 1 100.0 1 3.0 2 103.0

Murray below Nyah 161 25,076.9 9 98.2 170 25,175.1

Total 166 25,377.9 14 157.4 0 0.0 0 0.0 0 0.0 0 0.0 180 25,535.3

Note. O/D areas are those outside the irrigation districts but supplied by the district supply system.

Lower Murray Water Annual Report 2004/2005 33 OurTransfer of Water Rights, Licences and Sales Water, Irrigation Water Usage and Licence Entitlements

Permanent Transfers to Districts / Areas and Waterways of other Water Authorities (cont’d)

FROM Other Bulk Other Bulk Other Bulk Other Bulk Other Bulk Other Bulk Totals Entitlement Entitlement Entitlement Entitlement Entitlement Entitlement Holder-GMW Holder-FMIT Holder-NSW Holder-SA Holder-LMW Holder-Wimmera Grampians Water

TO No. ML No. ML No. ML No. ML No. ML No. ML No. ML

Red Cliffs 1 2 3 98.0 8 191.5 12 291.5

Red Cliffs O/D 0 0.0

Robinvale 1 20.0 1 20.0

Robinvale O/D 0 0.0

Merbein 1 5.0 5 134.0 12 281.8 18 420.8

Merbein O/D 0 0.0

Murray below Nyah 1 200.0 1 50.0 8 3,705.0 10 3,955.0

Total 1 200.0 2 7.0 9 282.0 29 4,198.3 0 0.0 0 0.0 41 4,687.3

Note. O/D areas are those outside the irrigation districts but supplied by the district supply system.

Temporary Transfers of Water Rights and Diversion Licences processed by the Authority during the year ended 30th June 2005 Summary

District / Internal transfers Total transfers Total transfers to Total transfers from Total transfers to other Net increase Area/ within district / from other districts other districts / other districts /areas other districts / areas / decrease for Waterway area or waterway /areas and areas and and waterways of and waterways of other other district / area (“District”) waterways within waterways within other Water Water Authorities or waterway Lower Murray Lower Murray Authorities Urban & Rural Urban & Rural Water Authority Water Authority

No. ML No. ML No. ML No. ML No. ML ML

Red Cliffs 140 1,171.0 24 270.1 59 -1,018.6 32 354.8 95 -2271.5 -2,665.2

Red Cliffs O/D 0 0.0 7 333.5 2 -12.1 18 1,051.0 1 -10.8 1,361.6

Robinvale 37 461.8 36 574.8 16 -705.0 1 30.0 15 -374.5 -474.7

Robinvale O/D 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0.0

Merbein 56 476.7 15 223.5 47 -989.1 10 120.0 66 -1,447.0 -2,092.6

Merbein O/D 1 20.0 5 223.5 3 -123.0 3 59.0 3 -110.0 49.5

Murray below Nyah 158 21,785.5 96 2,267.2 45 -1,044.8 109 10,482.5 285 -36,645.4 -24,940.5

Total 392 23,915.0 183 3,892.6 182 -3,892.6 173 12,097.3 465 -40,859.2 -28,761.9

Note. O/D areas are those outside the irrigation districts but supplied by the district supply system.

Transfers from and to Districts / Areas and Waterways within Lower Murray Urban and Rural Water Authority during the year ended 30th June 2005

FROM Red Cliffs Red Cliffs Robinvale Robinvale Merbein Merbein Murray below Totals O/D O/D O/D Nyah

TO No. ML No. ML No. ML No. ML No. ML No. ML No. ML No. ML

Red Cliffs 140 1,171.0 17 179.0 1 8.0 2 42.0 160 1,400.0

Red Cliffs O/D 5 73.5 2 260.0 7 333.5

Robinvale 1 5.0 37.0 461.8 2 18.0 33 551.8 73 1,036.6

Robinvale O/D 0 0.0

Merbein 10 99.5 56 476.7 1 88.0 4 36.0 71 700.2

Merbein O/D 1 10.0 1 89.0 2 9.5 1 20.0 1 115.0 6 243.5

Murray below Nyah 43 835.6 1 6.0 15 616.0 36 782.6 1 27.0 157 21,745.5 253 24,012.7

Total 199 2,189.6 2 11.0 53 1,166.8 0 0.0 113 1,465.8 4 143.0 199 22,750.3 570 27,726.5

Note. O/D areas are those outside the irrigation districts but supplied by the district supply system.

Lower Murray Water 34 Annual Report 2004/2005 OurTransfer of Water Rights, Licences and Sales Water, Irrigation Water Usage and Licence Entitlements

Transfers from Districts / Areas and Waterways of other Water Authorities during the year ended 30th June 2005

FROM Other Bulk Other Bulk Other Bulk Other Bulk Other Bulk Other Bulk Totals Entitlement Entitlement Entitlement Entitlement Entitlement Entitlement Holder-GMW Holder-FMIT Holder-NSW Holder-SA Holder-LMW Holder-DSE Environmental BE

TO No. ML No. ML No. ML No. ML No. ML No. ML No. ML

Red Cliffs 32 354.8 32 354.8

Red Cliffs O/D 3 10.0 12 216.0 3 825.0 18 1,051.0

Robinvale 1 30.0 1 30.0

Robinvale O/D 0 0.0

Merbein 9 115.0 1 5.0 10 120.0

Merbein O/D 2 45.0 4 14 3 59.0

Murray below Nyah 18 1,216.0 54 1,313.5 20 4,813.0 5 965.0 12 2,175.0 109 10,482.5

Total 21 1,226.0 109 2,044.3 22 4,848.0 6 979.0 15 3,000.0 0 0.0 173 12,097.3

Note. O/D areas are those outside the irrigation districts but supplied by the district supply system.

Transfers to Districts / Areas and Waterways of other Water Authorities During the year ended 30th June 2005

FROM Other Bulk Other Bulk Other Bulk Other Bulk Other Bulk Other Bulk Totals Entitlement Entitlement Entitlement Entitlement Entitlement Entitlement Holder-GMW Holder-FMIT Holder-NSW Holder-SA Holder-LMW Holder-DSE Environmental BE

TO No. ML No. ML No. ML No. ML No. ML No. ML No. ML

Red Cliffs 68 1,795.9 8 84.4 4 137.0 15 254.3 95 2,271.5

Red Cliffs O/D 1 10.8 1 10.8

Robinvale 7 322.6 1 10.0 7 41.9 15 374.5

Robinvale O/D 0 0.0

Merbein 39 1001.8 2 19.0 3 145.0 5 100.0 17 181.2 66 1,447.0

Merbein O/D 2 105.0 1 5.0 3 110.0

Murray below Nyah 200 16,499.4 11 357.0 24 8,012.0 40 11,266.0 1 250.0 9 261.0 285 36,645.4

Total 316 19,724.7 22 471.1 32 8,304.0 45 11,366.0 1 250.0 49 743.4 465 40,859.2 Note. O/D areas are those outside the irrigation districts but supplied by the district supply system.

Private Diversions from Waterways as at 30th June 2005 (Entitlements held)

Regulated

Irrigation Licences Stock & Domestic Only Other

Drainage Basin Licence No. Irrigation ML D&S ML Ha Licence No. D&S ML Licence No. ML Total Volume

Murray-Darling 786 249,077.6 1,075.2 31,134 273 1,432.7 251,585.5

Groundwater Extractions as at 30th June 2005 (Entitlements held)

Irrigation Other Total Drainage Basin Licences Authorised Authorised Licences Authorised Authorised Volume Volume Volume Volume

No. ML Ha No. ML ML

Sunraysia 1 174.0 174.0

Other

Total 1 174.0 174.0

Lower Murray Water Annual Report 2004/2005 35 ReportableInformation Reportable Information Freedom of Information The Freedom of Information (FOI) Act 1982 provides the public with the By-Laws right to request information held by the Authority. It gives the public the The Authority has three By-Laws which were not amended during right to access documents about their personal affairs and the activities 2004/05. of Lower Murray Water and the right to request that incorrect or misleading information held by the Authority be amended or removed. By-Law No 1 – Water Supply and Sewerage Administration. The FOI Officer for the Authority is the General Manager Corporate By-Law No 2 – New Water Conservation, Demand Management and Services. Requests under the Freedom of Information Act 1982 may Restrictions By-Law. be made in writing to [email protected] or, Lower Murray Water, P O Box 1438, Mildura 3502. The fee for provision of information under By-Law No 4 – Trade Waste. the FOI Act is $22.50. No requests under FOI were received by Lower Murray Water during 2004/05. Declarations of Pecuniary Interests All Members and all Officers with a financial delegation in excess of Information Privacy Act 2000 $20,000 have completed the required declarations of private interests. Lower Murray Water supports and endorses the provisions of the Pecuniary interests are declared prior to the commencement of Information Privacy Act 2000 and has established a policy for the Board meetings. collection and handling of personal information from its customers. A copy of the Authority’s commitment to safeguarding customers’ privacy Whistleblowers Protection Act 2001 is available on our Internet site and upon request. Our website home The Whistleblowers Protection Act 2001 which came into operation on page can be accessed and our site can be browsed without disclosing 1 January 2002 is designed to protect people who disclose information personal information. The site does not use cookies. about serious wrongdoing within the Victorian Public Sector and to provide a framework for the investigation of these matters. National Competition Policy The Protected Disclosure Coordinator for the Department of The Authority complies with the relevant Victorian Government Sustainability and Environment (DSE) acts as an agent for the Authority policies and timetables for National Competition Policy, including to receive disclosures under the Act, and applies DSE procedures in competitive neutrality. managing disclosures. Compliance with the Building Act 1993 Disclosures of improper conduct by the Authority or its employees may be made in writing or by telephone and directed to: Lower Murray Water complies with the statutory requirements of the Building Act 1993 and the accompanying Building Regulations 1994 in Deidre Egan respect to office accommodation occupied by the Authority. These Protected Disclosure Coordinator requirements will be adhered to when the refurbishment of the Department of Sustainability and Environment Fourteenth Street offices is undertaken in 2005/06. PO Box 500, East Melbourne Vic 3002 Ph: 9637 8575 Facsimile: 9637 8128 Subsequent Events Email: [email protected] No event or transaction has occurred subsequent to year end which or, may have a significant effect on the operations of the Authority, and The Ombudsman Victoria which has not already been disclosed elsewhere in this report. Level 3, South Tower, 459 Collins Street Melbourne 3000 Tel: 9613 6222 Toll Free 1800 806 314 Other Reportable Information Lower Murray Water did not receive or investigate any disclosures Subject to the provisions of the Freedom of Information Act 1982 and during the reporting period. Information Privacy Act 2000, all relevant information required under Financial Reporting Direction 22 of the Financial Management Act 1994 is available upon request.

Urban Bulk Entitlement Bulk Entitlement 21,946.0 ML Mildura Wastewater Treatment Farm Licence 694.0 ML Volume of permanent water rights purchased this year and available for use during: • 2004/05 808.9ML • 2005/06 715.0ML Volume of temporary water rights purchased for the 2004/05 irrigation season 250.0ML Volume of permanent water rights, under Agreement to purchase at 30 June 2005 (available in 2005/06) 23.0ML Volume available for the 2004/05 year, inclusive of Diversion Licences for the Mildura WWTP and amounts purchased in previous years 30,234.5ML 8,788 of these water rights were temporarily transferred out for the 2004/05 year. No new off take points were established and no water was returned at any point. A metering program has been implemented and a full maintenance history is kept. There was no amendment to the bulk entitlement nor any new entitlement granted during 2004/05. The Authority has acted in compliance of the Bulk Entitlement (River Murray – Lower Murray Water) Conversion Amendment Order 2004 and no difficulties have been experienced or are anticipated in complying with this Order.

Lower Murray Water 36 Annual Report 2004/2005 Disclosure 2 ttmn faalblt fohrifrain 36 36 64 36 36 64 30 2, 8 n/a 65 30 Statementofavailabilityotherinformation Disclosureindex 22 10 Insidecover StatementonNCP 22 OHS 1 CompliancewithbuildingandmaintenanceprovisionsofBuilding Act 1993 22 Applicationandoperationofthe Whistleblowers Protection Act 2001 22 29 ApplicationandoperationofFOI Act 1982 22 Disclosureofmajorcontracts 22 Insidecover andcost<$100,000 Detailsofconsultancies-totalNo. 12 Detailsofconsultancies>$100,000 22 Subsequenteventswhichwillaffectoperationsinfutureyears 22 Majorchangesorfactorsaffectingperformance 7 22 Objectivesandperformanceagainstobjectives 22 Significantchangesinfinancialpositionduringtheyear 22 ofthefinancialresults 5yearsummary 22 Executiveofficerdisclosures 22 Meritandequity 15 Statementofworkforcedataforcurrentandpreviousfinancialyear 22 Namesofboardmembers 22 namesandfunctionalareasofresponsibilityseniorofficers Organisationalstructure, 22 provided Natureandrangeofservices 22 powersandduties functions, Objectives, 22 MannerofestablishmentandtherelevantMinisters 22 22 FRD DISCLOSURE facilitate identificationofthe Authority’s disclosurerequ compliancewithFinancialReportingDirections(FRD)andstatutory Thisindexha The 2004/05 Annual ReportofLowerMurray Water ispreparedinaccordancewithallrelevant Victorian legislation. Disclosure Index V egetables beingwateredbyatravelingirrigator Index Annual Report 2004/2005 irements. Lower Murray Water s beenpreparedto 37 29 36 61 63 29 4 P AGE 37

Performance Private diverters irrigation pump on River Murray

Lower Murray Water 38 Annual Report 2004/2005 Financials

NOTES CONTENTS PAGE NOTES CONTENTS PAGE

Certification 40 13 Property, Plant and Equipment 55 Auditor General’s Report 41 14 Payables 56

Statement Of Financial Performance 42 15 Provisions 57 Statement Of Financial Position 43 16 Superannuation 57 Statement Of Cash Flows 44 17 Interest Bearing Liabilities 58 NOTES TO AND FORMING PART OF THE 18 Deferred Tax Provisions 58 FINANCIAL STATEMENTS 19 Contributed Capital 59 1 Statement of Significant Accounting Policies 45 20 Retained Profit 59 2 Impact of Adopting AASB equivalents to IASB Standards 48 21 Equity 60 3 Revenue From Ordinary Activities 51 22 Reconciliation of Net Cash provided by the 4 Expenditure From Ordinary Activities 52 Operating Activities to Net Surplus 60 5 Depreciation 53 23 Capital and Leasing Commitments 61 6 Income Tax Expense 53 24 Future Major Capital Works 62 7 Cash Assets 53 25 Responsible Persons Disclosure 63 8 Receivables 54 26 Consultancies 64 9 Inventories 54 27 Auditor Remuneration 64 10 Other Financial Assets 54 28 Statement Of Operations By Segments - Retail Operations 65 11 Other Assets 54 29 Events Subsequent To Reporting Date 65 12 Deferred Tax Assets 54 30 Contingent Liabilities 65 31 Financial Instruments 66

Lower Murray Water Annual Report 2004/2005 39 Lower Murray Water 40 Annual Report 2004/2005 Lower Murray Water Annual Report 2004/2005 41 Statement of Financial Performance for the Year Ended 30 June, 2005

2005 Notes $’000

REVENUE FROM ORDINARY ACTIVITIES

Revenue from Operating Activities Operating Revenue (3a) 31,430 Income for Capital Purposes (3b) 3,301

Revenue from Non-Operating Activities Interest Revenue (3c) 1,374 Other Revenue (3d) 2,533 TOTAL REVENUE FROM ORDINARY ACTIVITIES 38,638

EXPENSES FROM ORDINARY ACTIVITIES

Direct Expenses (4a) 30,876 Administration Expenses (4b) 10,384 Borrowing Cost Expense (4c) 31 TOTAL EXPENDITURE FROM ORDINARY ACTIVITIES 41,291

SURPLUS/(DEFICIT) FROM ORDINARY ACTIVITIES BEFORE TAX (2,653)

Income Tax Expense (6) 1,791 NET SURPLUS/(DEFICIT) FOR YEAR (4,444)

TOTAL CHANGE IN EQUITY OTHER THAN THOSE RESULTING FROM TRANSACTIONS WITH THE VICTORIAN STATE GOVERNMENT AS OWNER (4,444)

The above Statement of Financial Performance should be read in conjunction with the accompanying notes.

Lower Murray Water 42 Annual Report 2004/2005 Statement of Financial Position as at 30 June, 2005

2005 Notes $’000

CURRENT ASSETS Cash Assets (7) 19,172 Receivables (8) 4,969 Inventories (9) 1,552 Other Financial Assets (10) 1,619 Other Assets (11) 145 27,457

NON CURRENT ASSETS Receivables (8) 608 Deferred Tax Assets (12) 600 Property, Plant and Equipment (13) 439,751 440,959

TOTAL ASSETS 468,416

CURRENT LIABILITIES Payables (14) 4,168 Provisions (15) 1,168 Interest Bearing Liabilities (17) 13 5,349

NON-CURRENT LIABILITIES Provisions (15) 1,948 Interest Bearing Liabilities (17) 444 Deferred Tax Provision (18) 6,339 Other Liabilities 12 8,743

TOTAL LIABILITIES 14,092

EQUITY Contributed Capital (19) 458,768 Retained Profit (20) (4,444) 454,324

TOTAL LIABILITIES & EQUITY 468,416

The above Statement of Financial Position should be read in conjunction with the accompanying notes.

Lower Murray Water Annual Report 2004/2005 43 Statement of Cash Flows for the Year Ended 30 June, 2005

2005 Notes $’000 $ INFLOWS (OUTFLOWS) Cash Flows from Operating Activities $’000

Receipts (Inclusive of GST) Rates & Meter Charges 33,385 Interest Received 1,374 Other Revenue 2,306 Payments (Inclusive of GST) Payments to Suppliers & Employees (31,498) Borrowing Costs (31)

Net Cash from Operating Activities (22) 5,536 Cash Flows from Investing Activities

Payment for Purchases of Property, Plant and Equipment (12,955) Proceeds from Sale of Investments (276) Proceeds from Sale of Property, Plant and Equipment 346 Proceeds from Scheme Debtors 543 Income for Capital Purposes 2,938

Net Cash used in Investing Activities (9,404)

Cash Flows from Financing Activities

Repayment of Borrowings (13) Repayment of Refundable Contributions - Government Capital Contribution Received 188 Dividend Paid (88)

Net Cash from Financing Activities 87

Net Movement in Cash (3,781) Cash at 1 July 22,953

Cash at 30 June (7) 19,172

The above Statement of Cash Flows should be read in conjunction with the accompanying notes.

Lower Murray Water 44 Annual Report 2004/2005 Notes to and Forming Part of the Financial Statements for the Year Ended 30 June, 2005

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Grants and contributions received from the Victorian State Government which were originally appropriated by the Parliament as additions to net As part of the Victorian Government’s initiative “Securing our Water assets or where the Minister for Finance and the Minister for Water Future”, Lower Murray Region Water Authority merged with Sunraysia have indicated are in the nature of owners’ contributions are accounted Rural Water Authority on 1 July 2004. for as Equity - Contributed Equity.

The new Authority, Lower Murray Urban and Rural Water Authority, In accounting for the sale of fixed assets, gross proceeds from the sales operates under the registered name Lower Murray Water. All property, are included as other revenue and the written down value of the assets rights, liabilities, obligations, powers and functions of the former Boards sold is disclosed as an operating expense. were transferred to the successor Authority. Interest and rentals are recognised as revenue when the payment is This financial report of Lower Murray Urban & Rural Water Authority is a due, the value of the payment is notified, or the payment is received, general purpose financial report that consists of a Statement of whichever first occurs. Financial Performance, a Statement of Financial Position, a Statement of Cash Flows and notes accompanying these statements. The general All income is stated net of the amount of Goods and Services Tax purpose financial report has been prepared in accordance with (GST). Australian Accounting Standards, Urgent Issues Group Consensus Views, other authoritative pronouncements of the Australian Accounting Standards Board and the requirements of the Financial Management (b) Government Grants for Services Act 1994 and applicable Ministerial Directions. Programs such as salinity management and the construction of The financial report has been prepared on an accrual and going associated drainage schemes are performed under an agreement with concern basis and is based on historical costs and does not take into the Mallee Catchment Management Authority. The reimbursement of the account changing money values or, except where stated, current costs of these services is included as government contributions in the valuations of non-current assets. Cost is based on the fair values of Statement of Financial Performance. The cost of provision of these consideration given in exchange for assets. services is included in the operating expenses or as capital expenditures. The following is a summary of the material accounting policies adopted by the Authority in the preparation of the financial report. The (c) Water Entitlements accounting policies have been consistently applied, unless otherwise stated. Purchases of water entitlements are expensed in the year in which they are acquired as a cost of water supply. The entitlements are to be added to the Authority’s bulk entitlement. (a) Income Recognition (d) Property, Plant and Equipment Revenue is brought to account when services have been provided or when a tariff/rate/charge is levied or determined. Each class of property, plant and equipment are carried at either cost, or at independent or directors’ valuation, less, where applicable, any All Water and Wastewater rates/tariffs are recognised as income when accumulated depreciation or amortisation. the services are provided. Urban meter readings are undertaken on a quarterly basis. The last meter read for the year occurs in June with The cost of fixed assets constructed within the Authority includes the the income being accrued. Irrigation meter readings are cyclical and cost of contract payments, materials, direct labour and borrowing costs. an estimate of consumption, based on land usage is made for umetered outlets. Assets acquired at no cost to the Authority are brought to account at fair value, being the actual or estimated cost of construction. The value of all goods and services received free of charge are recognised as revenue when the Authority gains control of them. (i) Valuation of Property, Plant and Equipment The benefits derived from these goods and services are recorded at Land, buildings and infrastructure assets are stated at their fair value. their fair values in the financial statements. A revaluation was carried out, effective as at 1 July 2004.

Fees paid by developers to connect new developments to the Independent valuers Currie & Brown and Cleary Valuers conducted the Authority’s existing water supply and wastewater systems or for new valuation of land, buildings and infrastructure assets. The adopted capital works are recognised as revenue when they are received. method for establishing fair value was to derive an engineering estimate Non-current assets acquired from developers are recognised as of the replacement cost assuming the current service potential and revenue on transfer at the fair value of those assets. using modern engineering equivalent assets.

Grants and contributions for capital works from all sources are disclosed Plant and equipment, computer equipment, office furniture and in the Statement of Financial Performance as “Income for Capital equipment and motor vehicles are recorded at cost or deemed cost. Purposes”.

Lower Murray Water Annual Report 2004/2005 45 Notes to and Forming Part of the Financial Statements for the Year Ended 30 June, 2005

(ii) Depreciation (e) Inventories The depreciable amount of all fixed assets including buildings and capitalised lease assets, but excluding freehold land, is depreciated on a straight line Inventories comprise stores and materials used in the construction of basis over their useful lives to the Authority commencing from the time new works and for the repair and maintenance of existing assets. the asset is held ready for use. All inventories are valued at the lower of cost and net realisable value. Costs are assigned to inventories on hand at balance date by using the Assets with a cost in excess of $1000 are capitalised. average cost method.

The depreciation rates applied to asset classes are: Farm sheep stock are valued at market value.

(f) Receivables WATER Useful Life (Years) Trade debtors are carried at amounts due.

Storage Tanks 60 - 100 Provision has been made for doubtful debts in relation to amounts Pumping Stations 30 - 80 raised under the Residential Tenancy Legislation and trade rural debtors. Reticulated Networks 60 - 100 Water Treatment 10 - 80 This provision has been determined following review of collection Water Meters 8 statistics and an analytical review of result from collection procedures implemented. Buildings 60 Plant and Machinery 6 Bad debts are written off in the period in which they are identified.

WASTEWATER (g) Classification between Current and Non-current

Sewers 45 - 80 In the determination of whether an asset or liability is current or non- Trunk Sewer Main 80 current, consideration is given to the time when each asset or liability is Pumping Stations 10 - 80 expected to be realised or paid. The asset or liability is classified as Treatment and Disposal 10 - 100 current if it is expected to be turned over within the next twelve months, being the Authority’s operational cycle. Buildings 40 - 60 Plant and Machinery 6 (h) Other Financial Assets

IRRIGATION Other financial assets are carried at cost and are classified between current and non-current assets based on the Board of Management’s Storages 60 - 100 intention at balance date with respect to the timing of disposal of each Pumping Stations 40 - 80 investment. Channels 80 Rural Water Pipelines 60 - 80 Interest revenue from other financial assets is brought to account when Water Meters 10 it is earnt.

Buildings 40 - 60 (i) Employee Entitlements Plant and Machinery 6 Provision is made for the Authority’s liability for employee entitlements ADMINISTRATION arising from services rendered by employees to balance date. Oncosts such as Workcover and Superannuation are included in the calculation Computer Equipment 3 of leave provisions. Office Furniture and Equipment 6 Motor Vehicles 10 (i) Wages and Salaries, Annual Leave and Accrued Days Off Buildings 60 Liabilities for wages and salaries, expected to be settled within 12 Plant 6 months of the reporting date, are measured at their nominal amounts in Machinery 6 respect of employees’ services up to the reporting date. The nominal Communication Equipment 5 basis of measurement uses employee remuneration rates Lower Murray Water expects to pay as at each reporting date and does not discount cash flows to their present value.

Annual leave, and accrued days off entitlements are accrued on a pro rata basis in respect of services provided by employee up to balance date, having regard to current rates of pay and oncosts. Annual leave and accrued days off entitlements are provided for at their nominal value as above.

Lower Murray Water 46 Annual Report 2004/2005 Notes to and Forming Part of the Financial Statements for the Year Ended 30 June, 2005

(ii) Long Service Leave (m) Rounding A legal provision for long service leave entitlement is recognised for all employees, and is determined in accordance with the Accounting All amounts shown in the financial statements are expressed to the Standard AAS30. nearest thousand dollars (‘000).

Long service leave entitlements payable are assessed at balance date (n) Investments having regard to expected future employee remuneration rates, employment related oncosts and other factors including accumulated Investments are measured at cost. years of employment, future remuneration levels and experience of employee departure per year of service. Long service leave expected (o) Borrowing Costs to be paid later than one year have been measured at the present value of the estimated future cash outflows to be made for these entitlements. Borrowing costs are recognised as an expense in the period in which Commonwealth Bond Rates are used to discount future cash flows. they are incurred, except where they are capitalised as a qualifying asset constructed by the Authority. The proportion of long service leave estimated to be payable within the next financial year is included in the balance sheet as a current liability. Borrowing costs include interest on bank overdrafts and interest on The balance of the provision is classified as a non current liability. borrowings.

(iii) Superannuation Contributions (p) Segment Information The Authority makes contributions on behalf of employees to a number of superannuation schemes administered by the State Superannuation Segment information is reported on the basis of business segments, as Board and the Local Authorities Superannuation Board. the Authority’s risks and returns are affected predominantly by differences in the products and services provided through those The amounts of these contributions are determined by each scheme’s segments. actuary in accordance with statutory requirements. Segment revenues, expenses, assets and liabilities are those that are The Statutory contributions made for employees who are members of directly attributable to a segment on a reasonable basis. Segment the superannuation schemes controlled by the Government assets include all assets used by a segment on a reasonable basis. Superannuation Office and the Local Authorities Superannuation Board Segment assets include all assets used by a segment and consist are recognised in the financial statements of the Authority. primarily of operating cash, receivables, inventories, plant and equipment and other intangible assets, net of related provisions. (iv) Performance Payments Segment liabilities consists primarily of trade and other creditors, Seven Executive Officers have annual bonus payments (fixed amounts) employee entitlements and provision for service warranties. within their individual employment contracts. These payments are payable within the currency of each financial year. Segment revenues, expenses and results include transfers between segments. These transfers are priced on an arm’s-length basis and are There are no performance payments accruing to the end of the eliminated on consolidation. employment contract period which are to be recognised as non-current liability. (q) Taxation

(j) Cash The Authority was notified by the Treasurer, of the Government’s decision to direct Regional Urban Water and Rural Water Authorities to For the purpose of the Statement of Cash Flows, cash includes: become subject to the National Tax Equivalent Regime (NTER) from 1 - cash on hand and at call deposits with banks or financial institutions, July 2002. The NTER is administered by the Australian Taxation Office. net of bank overdrafts. Investments in money market instruments with a term of less than 90 days to maturity. The Authority has adopted the liability method of Tax Effect Accounting in accordance with the requirements of AAS3. (k) Payables Tax effect accounting is applied using the liability method whereby Liabilities are recognised for amounts payable in the future for goods income tax is regarded as an expense and calculated on accounting and services received, whether or not billed to the Authority. profit after allowing for permanent differences.

(l) Comparative Figures To the extent timing differences occur between the time items are recognised in the financial report and when items are taken into As the reporting year ended 30 June 2005 is the first year of the account in determining taxable income, the net related taxation benefit merged Authority, there are no comparative figures. and liability, calculated at tax rates applicable at the point of reversal, is disclosed as a future income tax benefit or a provision for deferred income tax.

Lower Murray Water Annual Report 2004/2005 47 Notes to and Forming Part of the Financial Statements for the Year Ended 30 June, 2005

(r) Dividend Policy With certain exceptions, entities that have adopted A-IFRS must record transactions that are reported in the financial report as though A-IFRS The Authority is required to pay a dividend in accordance with a had always applied. This requirement also extends to any comparative determination of the Treasurer of Victoria under the Public Authorities information included within the financial report. Most accounting policy (Dividend) Act 1983. adjustments to apply A-IFRS retrospectively will be made against accumulated funds at the 1 July 2004 opening balance sheet date for An obligation to pay a dividend only arises after consultation with the the comparative period. The exceptions include deferral until 1 July portfolio Minister and the Treasurer and a formal determination is made 2005 of the application and adjustments for: by the Treasurer. • AASB 132 Financial Instruments: Disclosure and Presentation; (s) Reporting Lines of Business • AASB 139 Financial Instruments: Recognition and Measurement; • AASB 4 Insurance Contracts; The financial information has been prepared based on the Authority’s • AASB 1023 General Insurance Contracts (revised July 2004); and main functions, of delivery of potable water, the disposal of wastewater, • AASB 1038 Life Insurance Contracts (revised July 2004). supply of river water for irrigation and collection and disposal of drainage water. The Authority has no wholesale function. The comparative information for transactions affected by theses standards will be accounted for in accordance with existing accounting (t) Environmental Contribution standards.

The Water Industry (Environmental Contributions) Act 2004 amended Lower Murray Urban and Rural Water Authority has taken the following the Water Act 1989 to make provision for environmental contributions steps in managing the the transition to A-IFRS and has achieved the to be paid by water supply Authorities. The Act establishes an obligation following scheduled milestones: for Authorities to pay into the consolidated fund annual contributions for the first period, from 1 October 2004 (Urban) and 1July 2005 (Rural) • established a steering committee to oversee the transition to and to 30 June 2008 in accordance with the pre-established schedule of implementation of the A-IFRS; payments, which sets out the amounts payable by each Authority. • nominated staff to review the new accounting standards, to identify key issues and the likely impacts resulting from the adoption of A-IFRS The purpose for the environmental contribution is set out in the Act, and and any relevant Financial Reporting Directions as issued by the the funding may be used for the purpose of funding initiatives that seek Minister for Finance; to promote the sustainable management of water or address adverse water-related initiatives. • participated in an education and training process for stakeholders to raise awareness of the changes in reporting requirements and the The environmental contributions are disclosed separately within the processes to be undertaken; expenses. • initiated reconfiguration and testing of user systems and processes to meet new requirements. 2. IMPACT OF ADOPTING AASB EQUIVALENTS TO IASB STANDARDS This financial report has been prepared in accordance with current Australian accounting standards and other financial reporting Impacts of adopting AASB equivalents to IASB standards requirements (Australian GAAP). A number of differences between Australian GAAP and A-IFRS have been identified as potentially having a Following the adoption of Australian equivalents to International Financial material impact on the Authority’s financial position and financial Reporting Standards (A-IFRS), Lower Murray Urban and Rural Water performance on the adoption of A-IFRS. Set out below are key areas Authority will report for the first time in compliance with A-IFRS, when where accounting policies are expected to change on adoption of results for the financial year ended 30 June 2006 are released. A-IFRS and the best estimate of the quantitative impact of the changes on net profit, net assets and total equity for the year ended The Authority is established to achieve the objectives of government in 30 June 2005 providing essential services to the community which are incompatible with generating profit as a principal objective. Consequently, where The estimates disclosed below are the Authority’s best estimates of the appropriate, the Authority applies those paragraphs in accounting quantitative impact of the changes as at the date of preparing the 30 standards applicable to not-for-profit entities. June 2005 financial report. The actual effects of transition to A-IFRS may differ from the estimates disclosed due to: An A-IFRS compliant financial report will comprise a new statement of changes in equity in addition to the three existing financial statements, • change in facts and circumstances; which will all be renamed. The Statement of Financial Performance will be renamed as the Operating Statement, the Statement of Financial • ongoing work being undertaken by the A-IFRS project staff; Position will revert to its previous title as the Balance Sheet and the • potential amendments to A-IFRS and Interpretations; and Statement of Cash Flows will be simplified as the Cash Flow Statement. However, for the purpose of disclosing the impact of adopting A-IFRS in • emerging accepted practice in the interpretation and application of the 2004-05 financial report, existing titles and terminologies will be A-IFRS and UIG interpretations. retained.

Lower Murray Water 48 Annual Report 2004/2005 Notes to and Forming Part of the Financial Statements for the Year Ended 30 June, 2005

Reconciliation of net result under Australian GAAP to that Reconciliation of equity as presented under Australian GAAP and that under A-IFRS under A-IFRS

Net result as reported under Australian Note Year Ended 30 Total equity result as reported under Australian Note Year Ended 30 GAAP Jun - 05 GAAP Jun - 05 $’000 $’000 Net Result as reported under Australian GAAP (4,444) Total equity as reported under Australian GAAP 454,324

Estimated A-IFRS impact on revenue Adjustment to accumulated surplus/(deficit) Revenue from ordinary activities (a) 0 Provision for deferred income tax (j) (43,699) Gain on sale of non-current assets (a) 0 Impairment of Assets (b) 0 Other revenue items 0 Recognition of restoration and decommissioning (c) 0 provision Estimated A-IFRS impact on expenses Derecognition of previously capitalised Depreciation and amortisation (b)(c)(d)(e)(g) 0 borrowing costs (d) 0 Borrowing costs (d) 0 Other - Employee benefits provision (i) 29 Impairment of non-current assets (b) 0 Restoration and decommissioning expenses (c) 0 Adjustments to Reserves Supplies and consumables (f) 0 Asset Revaluation Reserves (b)(c)(e) 0 Employee benefits (i) (29) Other Reserves 0 Other expenses from ordinary activities (a) 0 Other 0 Total equity under A-IFRS 410,654

Net result under A-IFRS (4,415) (a) Revenue from Ordinary Activities

Reconciliation of total assets as presented under Australian GAAP Although not impacting the net result of the Authority, the adoption of A-IFRS and that under A-IFRS will result in some transactions being recorded on a ‘net’ rather than a ‘gross’ basis. In addition, the adoption of A-IFRS results in the reclassification of Total result as reported under Australian Note Year Ended 30 proceeds from the sale of non-current assets from ‘revenue from ordinary GAAP Jun - 05 activities’ to other income and expense items in the Statement of Financial $’000 Performance. This change in accounting policy will not materially effect the Total Assets as reported under Australian GAAP 468,416 reporting of revenue from ordinary activities for the reporting financial year ending 30 June 2005. Estimated A-IFRS impact on assets Inventory held for distribution (f) 0 (b) Impairment of Assets Plant, equipment and infrastructure systems (b)(c)(d) 0 AASB 136 Impairment of Assets requires assets to be assessed for Intangible assets (b)(d)(e) 4,386 impairment each year. Impairment testing will apply to all assets, other than Assets held for sale (g) 0 inventories, financial assets and assets arising from construction contracts, Other assets - Non Current Software (e) (4,386) regardless of whether they are measured on a cost or fair value basis. If indicators of impairment exist, the asset will need to be tested to ensure that Total Estimated A-IFRS impact on Assets 0 the carrying value does not exceed its recoverable amount, which is the higher of its value-in-use and fair value less costs to sell. For not-for-profit Total Assets Result under A-IFRS 468,416 entities, value-in-use of an asset is generally its depreciated replacement cost. An impairment test was conducted on transition date, 1 July 2004, Total Liabilities as reported under Australian GAAP 14,092 which indicated no impairment.

Estimated A-IFRS impact on liabilities (c) Property, Plant and Equipment Provision for Deferred Income Tax (c)(j) 43,699 Finance Leases (h) 0 AASB 116 Property, Plant and Equipment requires the capitalisation of costs Other liabilities - Employee Benefits Provision (i) (29) of dismantling and removing an asset and restoring the site on which the asset was created, together with the recognition of a provision at present Total Estimated A-IFRS impact on Liabilities 43,670 value in accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets. These costs (and the related provisions) are not Total Liabilities result under A-IFRS 57,762 recognised under Australian GAAP and the authority would expense such costs as they are incurred. The Authority has reviewed its obligations under AASB 116 and have established that no provisions are required in transition to A-IFRS. The Authority has had non-current fixed assets revalued at 1 July 2004 and the Authority has taken the revaluation as ‘deemed cost’ upon adoption of A-IFRS.

Lower Murray Water Annual Report 2004/2005 49 Notes to and Forming Part of the Financial Statements for the Year Ended 30 June, 2005

(d) Capitalised Borrowing Costs (h) Finance Leases

The Authority currently expenses borrowing costs related to qualifying assets. Existing Australian accounting standards require a lessee of a finance lease to On adoption of A-IFRS, the Authority has elected to continue expensing all recognise a lease asset and a lease liability equal to the present value of borrowing costs as they are incurred, even where they relate to qualifying minimum lease payments at the beginning of the lease term. On adoption of assets. As a result, there will be no change in the carrying values of qualifying A-IFRS, the lease asset and lease liability recognised will be equal to the assets as compared with Australian GAAP, with borrowing costs being lower of the present value of minimum lease payments and fair value of the immediately expensed in the Statement of Financial Performance, rather than leased asset which, in those cases where the present value of minimum being capitalised and depreciated over the useful life of the asset. lease payments exceeds the fair value of the leased asset, will require an adjustment to the Authority’s lease assets and liabilities at the date of (e) Intangibles transition. In addition, the guidance on whether a lease is a finance or operating lease is less prescriptive under A-IFRS, and there is a greater For Lower Murray Water, capitalised software & database assets fall into the emphasis on the substance of the transaction when making such a definition of an Intangible asset. The asset register has been reviewed for judgement. As a consequence, there may be instances where leases that items & balances held as at 1 July 2004. A transfer of identified assets is to have previously been classified as operating leases under Australian GAAP be made to the Intangible Asset and Intangible Amortisation ledger accounts. may be reclassified as finance leases under A-IFRS. Amortisation is allocated to intangible assets with finite useful lives on a systematic basis over the asset’s useful life. Annual impairment assessment The Authority has reviewed all leases in which they are a party to on arises at the end of each report period. transition to A-IFRS and have judged all leases remain classified as under Australian GAAP. The effect of the above requirement on the Statement of Financial Position as at 30 June 2005 will be only a disclosure change. (i) Employee Benefits

(f) Inventories Held for Distribution Under existing Australian accounting standards, employee benefits such as wages and salaries, annual leave and sick leave are required to be measured Under existing accounting policies, costs of goods and services to be at their nominal amount, regardless of whether they are expected to be distributed for no consideration or at a nominal amount are currently settled within 12 months of the reporting date. On adoption of A-IFRS, a expensed when incurred. The new standard on inventories requires such distinction is made between short-term and long-term employee benefits and costs to be capitalised as inventories held for distribution and AASB 119 Employee Benefits requires liabilities for short-term employee expensed when distributed. Inventories held for distribution are measured at benefits to be measured at nominal amounts and liabilities for long-term the lower of cost and current replacement cost. The Authority did not have employee benefits to be measured at present value. AASB 119 defines any inventory classified as ‘Inventories held for distribution’ as at transition short-term employee benefits as employee benefits that fall due wholly within date, which will have no effect on the Net result of Assets. twelve months after the end of the period in which the employees render the related service. Therefore, liabilities for employee benefits such as wages and Inventories other than inventories held for distribution will continue to be salaries, annual leave and sick leave are required to be measured at present measured at the lower of cost and net realisable value. value where they are not expected to be settled within 12 months of the reporting date. The effect of the above requirement on the Authority’s (g) Assets Held for Sale Statement of Financial Position as at 30 June 2005 will be an estimated decrease in employee benefits liability of $29,000. AASB 5 Non-Current Assets Held for Sale and Discontinued Operations requires an entity to classify a non-current asset (or disposal group) as held (j) Income Taxes for sale, if its carrying amount will be recovered principally through its sale rather than through continuing use. A non-current asset (or disposal group) Currently, Lower Murray Water adopts the liability method of tax-effect classified as held for sale is to be measured at the lower of its carrying accounting whereby the income tax expense is based on the accounting amount and fair value less costs to sell. In addition, an entity is also required profit adjusted for any permanent differences. Timing differences are currently to cease depreciation on an asset that has been classified as held for sale. brought to account as either a provision for deferred income tax or future Lower Murray Water is a newly merged authority and whilst management income tax benefit. Under AASB 112: Income Taxes, Lower Murray Water will have identified non-current assets that will be sold as a result of the merger, be required to adopt a balance sheet approach under which temporary they are exempt from AASB 5 as they arise from restructuring administrative differences are indentified for each asset and liability rather than the effects of arrangements of government entities. the timing and permanent differences between taxable income and accounting profit.

The most significant impact will be the recognition of a deferred tax liability of approximately $50m in relation to asset revaluations. On transition to A-IFRS the estimated cumulative financial effect of the reliably known differences as highlighted, will be to reduce the reported total equity by a total of $43m at 30 June 2005.

Lower Murray Water 50 Annual Report 2004/2005 Notes to and Forming Part of the Financial Statements for the Year Ended 30 June, 2005

3. REVENUE FROM ORDINARY ACTIVITIES

TOTAL WATER SUPPLY WASTEWATER RURAL SERVICES 2005 2005 2005 2005 (a) Operating Revenue comprises: $’000 $’000 $’000 $’000

General Tariff Charges 18,797 3,194 6,236 9,367 Govt. Pensioner Rate Reimbursement 1,057 484 559 14 Metered Charges 10,852 6,426 - 4,426 Trade Waste Charges 586 - 586 - Customer Service Obligations 138 39 99 - 31,430 10,143 7,480 13,807

TOTAL WATER SUPPLY WASTEWATER RURAL SERVICES 2005 2005 2005 2005 (b) Income For Capital Purposes: $’000 $’000 $’000 $’000

Lake Boga Sewerage Scheme 328 - 328 - Capital Contributions 2,863 1,524 1,339 - Scheme Contributions 110 96 14 - 3,301 1,620 1,681 -

Income for capital purposes is a once off payment which may not occur in future periods.

TOTAL WATER SUPPLY WASTEWATER RURAL SERVICES 2005 2005 2005 2005 (c) Interest Revenue comprises: $’000 $’000 $’000 $’000

Interest on Investments 1,312 258 227 827 Interest on Private Schemes 62 27 35 - 1,374 285 262 827

TOTAL WATER SUPPLY WASTEWATER RURAL SERVICES 2005 2005 2005 2005 (d) Other Revenue: $’000 $’000 $’000 $’000

Income from Fees 904 483 255 166 Rent/Lease Income 543 512 28 3 Government Contributions 134 - - 134 Proceeds from Sale of Assets (Refer Note 13(c)) 346 138 117 91 Sundry Income 606 122 183 301 2,533 1,255 583 695

Lower Murray Water Annual Report 2004/2005 51 Notes to and Forming Part of the Financial Statements for the Year Ended 30 June, 2005

4. EXPENDITURE FROM ORDINARY ACTIVITIES

TOTAL WATER SUPPLY WASTEWATER RURAL SERVICES 2005 2005 2005 2005 (a) Direct Expenses comprise: $’000 $’000 $’000 $’000

Labour 4,571 1,300 1,012 2,259 Bulk Water Maintenance Charge 2,826 446 - 2,380 Water Purchased 1,787 1,787 - - Chemicals 589 472 72 45 Electricity 2,359 785 356 1,218 Repairs and Maintenance 3,126 883 711 1,532 Depreciation Expense (Refer Note 5) 13,200 5,418 2,861 4,921 Lease/Rentals Expenses 25 24 - 1 Other Expenses 2,393 1,250 723 420 30,876 12,365 5,735 12,776

TOTAL WATER SUPPLY WASTEWATER RURAL SERVICES 2005 2005 2005 2005 (b) Administration Expenses comprise: $’000 $’000 $’000 $’000

Salaries & Labour Oncost 4,521 1,823 1,528 1,170 Audit Fees (Refer Note 27) 72 23 20 29 Bank Charges & Agency Collection Fees 156 78 66 12 Insurances 325 95 81 149 Environmental Contribution 600 324 276 - Depreciation Expense (Refer Note 5) 1,337 515 439 383 Disposal of Fixed Assets 302 156 133 13 Bad Debts /Write Offs 45 41 4 - Members & Chair. Allowance 130 42 36 52 Other Expenses 2,896 1,073 898 925 10,384 4,170 3,481 2,733

TOTAL WATER SUPPLY WASTEWATER RURAL SERVICES 2005 2005 2005 2005 (c) Borrowing Cost Expenses: $’000 $’000 $’000 $’000

Interest on Private Loans 31 - 31 -

Lower Murray Water 52 Annual Report 2004/2005 Notes to and Forming Part of the Financial Statements for the Year Ended 30 June, 2005

5. DEPRECIATION

Depreciation expense for the year: 2005 $’000

Works 12,807 Buildings 198 Plant, Equipment and Vehicles 1,532 14,537

6. INCOME TAX EXPENSE

2005 $’000

The prima facie tax payable on profit from ordinary activities is reconciled to the income tax expense as follows: Result for the year before income tax expense (2,654)

Prima facie tax payable on profit from ordinary activities before income tax at 30% (796) Add : Tax effect of: - Non Deductible Expenses 2,587

Income Tax Expense 1,791

Future Income Tax Benefit (9)

Provision for Deferred Income Tax 1,800

1,791

7. CASH ASSETS

Cash at the end of the financial year as shown in the Statement of Cash Flows is reconciled to items in the Statement of Financial Position as follows:

2005 $’000

Cash Assets 19,172

19,172

Lower Murray Water Annual Report 2004/2005 53 Notes to and Forming Part of the Financial Statements for the Year Ended 30 June, 2005

8. RECEIVABLES

Receivables comprise of:

TOTAL WATER SUPPLY WASTEWATER RURAL SERVICES ADMINISTRATION 2005 2005 2005 2005 2005 Current Receivables: $’000 $’000 $’000 $’000 $’000

Tariffs & Charges 3,367 2,078 116 1,154 19 Scheme Debtors 516 167 349 - - Other Debtors 1,194 103 588 486 17 Provision for Doubtful Debts (i) (108) (50) - (58) - Total Current Receivables 4,969 2,298 1,053 1,582 36

Non Current Receivables: Scheme Debtors 608 346 262 - - Total Non Current Receivables 608 346 262 - -

9. INVENTORIES

Values as at 30 June, were:

2005 $’000

Stores and Consumables 1,483 Sheep Stock 69 1,552

10. OTHER FINANCIAL ASSETS

Current 2005 $’000

Fixed Interest Bearing Deposit 1,619 1,619

11. OTHER ASSETS

Current 2005 $’000

Prepayments 145 145

12. DEFERRED TAX ASSETS

2005 $’000

Future Income Tax Benefit 600

The Future Income Tax Benefit is made up of the following estimated tax benefits: - timing differences 600

Lower Murray Water 54 Annual Report 2004/2005 Notes to and Forming Part of the Financial Statements for the Year Ended 30 June, 2005

13. PROPERTY, PLANT AND EQUIPMENT

TOTAL WATER WASTEWATER RURAL SERVICES ADMIN 2005 $’000 $’000 $’000 $’000 $’000

Land - at independent valuation 2004 6,000 1,432 2,693 388 1,487 Land - subsequent additions at cost 21 - - 21 - 6,021 1,432 2,693 409 1,487

Works - at independent valuation 2004 412,278 165,943 117,822 128,513 - Less: Accumulated depreciation (12,807) (5,261) (2,690) (4,856) - Works - subsequent additions at cost 8,502 2,929 4,420 1,153 -

407,973 163,611 119,552 124,810 -

Buildings - at independent valuation 2004 5,719 342 1,577 542 3,258 Less: Accumulated depreciation (198) (13) (47) (50) (88) Buildings - subsequent additions at cost 24 - - 8 16

5,545 329 1,530 500 3,186

Plant, Equipment & Vehicles - at cost 13,597 - - 232 13,365 Less: Accumulated depreciation (8,392) - - (61) (8,331)

5,205 - - 171 5,034

Works In Progress at cost 15,007 13,830 600 405 172

Total 439,751 179,202 124,375 126,295 9,879

(i) As the Authority has chosen to progressively revalue its infrastructure assets, there are some assets which are recognised at values other than fair value until they are revalued. Deprival value is determined using depreciated optimised replacement cost.

Buildings, water, wastewater and natural services infrastructure were valued at 1 July 2004 at independent valuation as disclosed in 1 (d).

Lower Murray Water Annual Report 2004/2005 55 Notes to and Forming Part of the Financial Statements for the Year Ended 30 June, 2005

13. PROPERTY, PLANT AND EQUIPMENT (continued)

(b) Movement in Carrying Amounts

Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year.

TOTAL LAND WORKS BUILDINGS Pl, EQUIP & VEHICLE WIP $’000 $’000 $’000 $’000 $’000 $’000

Balance 1 July 441,635 6,000 412,200 5,719 5,630 12,086 Additions 12,955 21 8,580 24 1,409 2,921 Disposals (302) - - - (302) - Depreciation Expense (14,537) - (12,807) (198) (1,532) -

Balance 30 June 439,751 6,021 407,973 5,545 5,205 15,007

(c) Profit on Sale of Property, Plant and Equipment

2005 $’000

Proceeds on Sale 346 Less Written Down Value (302)

Net Profit/(Loss) on Disposal 44

14. PAYABLES

TOTAL WATER SUPPLY WASTEWATER RURAL SERVICES ADMINISTRATION 2005 2005 2005 2005 2005 Unsecured Liabilities: $’000 $’000 $’000 $’000 $’000

Accrued Creditors 1,860 556 383 346 575 Deposits 213 77 130 6 - Advances for Works Program 1,367 - - 1,367 - Pre Paid Revenue 728 126 424 - 178

4,168 759 937 1,719 753

Lower Murray Water 56 Annual Report 2004/2005 Notes to and Forming Part of the Financial Statements for the Year Ended 30 June, 2005

15. PROVISIONS

Long Service Leave

The Board’s legal liability to Long Service Leave attributable to its employees at 30 June, 2005 was $1,997,609 which has been fully funded.

TOTAL CURRENT NON-CURRENT 2005 2005 2005 $’000 $’000 $’000

Annual Leave 908 908 - Long Service Leave 1,998 50 1,948 Accrued Bonus 210 210 -

Aggregate of Employee Entitlement Liability 3,116 1,168 1,948

16. SUPERANNUATION

The Authority contributes, in respect of it’s employees, to a number of superannuation schemes of Boards and Authorities.

Contribution details are shown in the following table :

Scheme Type of Scheme Employee Rate 2005 Numbers $’000

State Employees Retirement Benefits Scheme Defined Benefit 1 12.50% 5 State Superannuation Board Revised Scheme Pension 3 17.00% 25 State Superannuation Board New Scheme Lump Sum 10 9.5% - 10% 60 Vision Super Defined Benefit 45 9.25% 199 Vision Super Saver Accumulation 93 9.00% 360 Others 3 9.00% 7 Total Contributions to all Funds 656

The Authority makes employer contributions to the defined benefits category of the funds at rates determined by the Funds’ Trustee on the advice of the actuary. As at reporting date: # Loans to or from the Authority to any of the above funds Nil # Unfunded Liabilty as advised by Vision Super $39,532

Lower Murray Water Annual Report 2004/2005 57 Notes to and Forming Part of the Financial Statements for the Year Ended 30 June, 2005

17. INTEREST BEARING LIABILITIES

(a) Bank Loans expected to be settled within 12 months and after 12 months and more TOTAL CURRENT NON-CURRENT NON-CURRENT (12 MONTHS) (2 - 5 YEARS) (5 YEARS PLUS) 2005 2005 2005 2005 Secured: $’000 $’000 $’000 $’000

Loans 457 13 139 305 457 13 139 305

(b) The carrying amounts of Non-Current Assets pledged as security are: 2005 $’000

Floating charge over the Authority’s Urban Rate Revenue 2,194 Total Assets Pledged as Security 2,194

Loans from Banks and other Government Authorities are secured by way of charge over the tariffs of the Authority.

18. DEFERRED TAX PROVISION 2005 $’000

Provision for Deferred Income Tax 6,330 Future Income Tax Benefits attributable to tax losses 9

Provision for Deferred Income Tax 6,339

Lower Murray Water 58 Annual Report 2004/2005 Notes to and Forming Part of the Financial Statements for the Year Ended 30 June, 2005

19. CONTRIBUTED CAPITAL

2005 $’000

Balance 1 July 458,768 Capital Contribution - Balance 30 June 458,768

20. RETAINED PROFIT

2005 $’000

Retained Surplus at 1 July 0 Net Surplus/(Deficit) for the year after Income Tax Expense (4,444)

Retained Surplus at 30 June (4,444)

Lower Murray Water Annual Report 2004/2005 59 Notes to and Forming Part of the Financial Statements for the Year Ended 30 June, 2005

21. EQUITY

2005 $’000

Total Equity at 1 July 458,768 Total Changes in Equity Recognised in the Statement of Financial Performance (4,444) Contributions by Owner - Total Equity at 30 June 454,324

22. RECONCILIATION OF NET CASH PROVIDED BY THE OPERATING ACTIVITIES TO NET SURPLUS

2005 $’000

Net Surplus For Year (4,444) Non Cash Flows in Surplus from Ordinary Activities Depreciation 14,537 Contributions for Capital Works (2,938) Contributions for Schemes (437) Contributions from Government (188) Loss (Gain) on Sale of Fixed Assets (44) Tax Expenses 1,791 8,277 Changes in Assets & Liabilities: Decrease (Increase) in Debtors (423) Decrease (Increase) in Inventories (247) Decrease (Increase) in Prepayments 8 Decrease (Increase) in Future Income Tax Benefits - Increase (Decrease) in Other Creditors & Accruals (2,306) Increase (Decrease) in Employee Entitlements 227 Increase (Decrease) in Deferred Tax Provision - 5,536

Credit Standby Arrangement with Banks 2005 $’000

Credit Facility 621 Amount Utilitised - Unused Credit Facility 621

Lower Murray Water 60 Annual Report 2004/2005 Notes to and Forming Part of the Financial Statements for the Year Ended 30 June, 2005

23. CAPITAL and LEASING COMMITMENTS

Incomplete Contracts Payable - not later than one (1) year:

Contract Contractor Contract Amount Amount Completed $’000 $’000

#Mildura West Water Treatment Plant Environmental Solutions International 12,043 10,996 Construction of Sewage Rising Main - Lake Boga Swan Constructions 220 217 Construction of Sewage Rising Main Chapman St - Swan Hill Swan Constructions 313 306 Sewer Rehabilitation - Mildura Kembla Watertech Pty Ltd 301 249

12,877 11,768

2005 $’000

Payment due within one year 1,109

# Mildura West Treatment Plant Construction - Refer to Note 29.

Lower Murray Water Annual Report 2004/2005 61 Notes to and Forming Part of the Financial Statements for the Year Ended 30 June, 2005

24. FUTURE MAJOR CAPITAL WORKS

Over the next three (3) financial years, i.e. 2005/06 to 2007/08 the Board has planned a number of major capital works projects. The proposed works as per the Authority’s current draft Water Plan are summarised below:

2005/06 Project Description Estimated Expenditure $’000

Main/Sewer Replacement - various 1,322 Mildura West - New Plant 1,065 Mildura West - Pumping Stations 250 MWTP - Process Upgrade 300 Mildura Catchment Augmentation 300 Replace Treated Water Pump Station - Swan Hill 550 Koondrook - Pressure Enchancement 250 MWWTP - Upgrade Sludge Handling 400 Koorlong WWTP - Augmentation 500 Replace Soft Liners - Kerang 450 Replace Support Pedastals 200 Meter Replacement - Various 600 Drainage Pit Lids - Various 420 Other 7,649 14,256

2006/07 Project Description Estimated Expenditure $’000

Main/Sewer Replacement - various 1,150 MWTP - Process Upgrade 1,100 SHWTP - Filter Refurbishment 200 Swan Hill - New Trunk Mains 300 RCWTP - Automation/Upgrade 350 RWTP - Automation/Upgrade 300 Koondrook - Pressure Enchancement 200 Koorlong WWTP - Augmentation 10,000 Meter Replacement - Various 1,000 Meter Wheel Replacement 525 Drainage Pit Lids 220 RWWTP - Upgrade 180 Other 10,397 25,922

2007/08 Project Description Estimated Expenditure $’000

Main/Sewer Replacement - Various 1,200 Mildura Catchment Augmentation 300 Koorlong WWTP - Augmentation 4,500 RWTP - Automation/Upgrade 300 RWWTP - Upgrade 300 Swan Hill - Refurbish RWPS 250 Decommission RCWWTP 1,500 Meter Replacement - Various 1,000 Koorlong WWTP - Augmentation 3,500 Water Wheel Replacement 525 Other 2,034 15,409

Lower Murray Water 62 Annual Report 2004/2005 Notes to and Forming Part of the Financial Statements for the Year Ended 30 June, 2005

25. RESPONSIBLE PERSONS DISCLOSURE

(i) Names of persons who were responsible persons at any time during the financial year ended 30 June, 2005:

The Hon J Thwaites MP Mr M D Tilley (Chair) Ms K Martin - (Deputy Chair) Ms A McTaggart Mr F Smith Mr P MacIntosh Mr B MacMillan Ms L Burrows Mr D Heintze Ms E Ward

Mr R J Leamon (Chief Executive Officer)

The relevant remuneration relating to the Minister is reported separately in the financial statements of the Department of Premier and Cabinet.

(ii) Total remuneration received or due and receivable by responsible persons totalled $317,365

2005

$10,001 - $20,000 8 $30,001 - $40,000 1 $180,001 - $190,000 1

(iii) Annual remuneration of Chief Executive Officer has been disclosed above.

(iv) Executive Remuneration - The number of executives whose remuneration exceeded $100,000 during the reporting period are shown below in the relevant income bands: 2005

$120,001 - $129,999 1 $130,001 - $139,999 1

Total remuneration received or due and receivable by the Executives listed above totalled $256,100.

(v) Superannuation and other Transactions:

Superannuation contributions have been paid on behalf of Directors in accordance with the Superannuation Guarantee Charge at the required rate of 9%. Contributions of $12,496 were paid on behalf of the Directors in accordance with the Superannuation Guarantee Charge at the required rate of 9%.

(vi) Other Transactions of Responsible Persons and their Related Entities:

Water and Wastewater and Rural services were provided to responsible persons who reside within the boundaries of the Authority under normal terms and conditions, no more favourable than to other parties.

There were no other transactions relating to responsible persons and related entities.

(vii) Retirement Benefits and Loans:

There were no other retirement benefits or loans provided to responsible persons during the year.

Lower Murray Water Annual Report 2004/2005 63 Notes to and Forming Part of the Financial Statements for the Year Ended 30 June, 2005

26. CONSULTANCIES

(i) Over $100,000

GHD Pty Ltd - $414,769

GHD Pty Ltd are the Authority’s principal engineering consultants. GHD also assisted the Authority with the preparation of its Urban Water Plan for the Essential Services Commission.

Hansen International - $274,205

Hansen International assisted with the intergration of the rural assets into the existing urban Asset Management System.

Horton International - $230,820

The Board engaged Horton International to provide recruitment services in relation to the employment of the new Authority’s Executive Staff.

Currie & Brown - $151,000

Currie & Brown were engaged to revalue the Authority’s infrastructure.

Robert Cook - $120,616

Mr. Cook provides the Authority with expertise in Information Technology mainly in relation to major projects, such as the Asset Management System, Records Management System and communication upgrades.

Records Solution - $119,645

Records Solution have been engaged to supply and assist with the implementation of TRIM, the Authority’s electronic records management system.

Joypro Health & Safety First - $106,216

Joypro provides OH&S services to the Authority.

(ii) Under $100,000

The Authority engaged 34 consultants, for a total value of $825,228.

27. AUDITOR REMUNERATION

2005 Remuneration of Auditors $’000

Auditor General - Audit Services 43 43

Lower Murray Water 64 Annual Report 2004/2005 Notes to and Forming Part of the Financial Statements for the Year Ended 30 June, 2005

28. STATEMENT OF OPERATIONS BY SEGMENTS - RETAIL OPERATIONS

RETAIL OPERATIONS TOTAL WATER SUPPLY WASTEWATER RURAL SERVICES 2005 2005 2005 2005 $’000 $’000 $’000 $’000

Sales - External 31,430 10,143 7,480 13,807 Other Revenue 7,208 3,160 2,526 1,522 Total Revenue 38,638 13,303 10,006 15,329 Less - Expenses 41,291 16,535 9,247 15,509 Operating Surplus (before Tax) (2,653) (3,232) 759 (180)

RETAIL OPERATIONS TOTAL WATER SUPPLY WASTEWATER RURAL SERVICES 2005 2005 2005 2005 $’000 $’000 $’000 $’000

Assets: Segment Assets 436,512 181,846 125,691 128,975 Unallocated Assets 31,904 Total Assets 468,416

Liabilities: Segment Liabilities 3,031 203 1,011 1,817 Unallocated Liabilities 11,061 Total Liabilities 14,092

Acquisition of property, plant and equipment and other non-current segment assets 12,955 4,753 5,975 2,227

Depreciation and amortisation expense 13,200 5,418 2,861 4,921 Unallocated Depreciation and amortisation expense 1,337 14,537

The Authority does not provide any wholesale services.

29. EVENTS SUBSEQUENT TO REPORTING DATE

The Authority’s new Mildura West Water Treatment Plant was nearing completion when the principal contractor went into receivership. The Authority entered into discussions with the appointed Receiver with a Deed of Release signed in early July. There is no material impact on the project. The Authority have taken control of the works, enabling construction to recommence.

30. CONTINGENT ASSETS AND CONTINGENT LIABILITIES

At 30 June 2004, the Board was unaware of any liability or assets, contingent or otherwise not already disclosed elsewhere in these financial statements.

Lower Murray Water Annual Report 2004/2005 65 Notes to and Forming Part of the Financial Statements for the Year Ended 30 June, 2005

31. FINANCIAL INSTRUMENTS

(a) Terms, Conditions and Accounting Policies The economic entity’s accounting policies, including terms and conditions of each class of financial asset, financial liability and equity instrument, both recognised and unrecognised at the balance date, are as follows:

Recognised Balance Financial Sheet Instruments Notes Accounting Policies Terms and Conditions

(i) Financial Assets

Debtors – Property 8 Property receivables are carried at nominal amounts due less Quarterly accounts are issued any provision for doubtful debts. A doubtful debt provision is on 28 days payment term. made for any amounts, which are considered unlikely to be collectable.

Debtors – Other 8 Amounts (other than property debtors) are carried at nominal Accounts are issued on 28 days amounts due less any provision for bad debts.The provision payment term. is recognised when collection of the full nominal amount is no longer probable.

Short-Term 7 Short-term deposits are stated at the lower of cost and net Short-term deposits have an Investments realisable value. Interest is recognised in the statement of average maturity of 30 days and financial performance when earnt. effective interest rates of 5.0% to 5.61%

(ii) Financial Liabilities

Payables 14 These liabilities are recognised for amounts to be paid in the Trade creditors are normally future for goods and services received, whether or not billed settled on 30 day terms. to the Authority.

Interest Bearing 17 Loans – Private are carried at the principal amount. Interest Interest is charged either quarterly Liabilities is charged as it accrues. or semi-annually at borrowing rates of between 5.75% to 7.40%.

Lower Murray Water 66 Annual Report 2004/2005 Notes to and Forming Part of the Financial Statements for the Year Ended 30 June, 2005

31. FINANCIAL INSTRUMENTS (Continued)

(b) Interest Rate Risk

The economic entity’s exposure to interest rate risks and the effective interest rates of financial assets and financial liabilities, both recognised and unrecognised at the balance date, are as follows:

Financial Instruments Floating Fixed interest rate maturing in: Non-interest Total carrying Weighted interest 1 year or less Over 1 to More than bearing amount as per average effective rate 5 years 5 years the balance sheet interest rate

2005 2005 2005 2005 2005 2005 2005 $’000 $’000 $’000 $’000 $’000 $’000 % (i) Financial Assets Cash 12,672 6,500 - - - 19,172 5.35 Debtors - Property 1,154 - - - 1,962 3,116 5.04 Debtors - Other 979 - - - 1,481 2,460 4.40 Investments - 1,619 - - 1,619 5.40 Total Financial Assets 14,805 8,119 - - 3,443 26,367 4.72

(ii) Financial Liabilities Payables - - - - 4,168 4,168 N/A Interest Bearing Liabilities - 13 139 305 - 457 6.77 Total Financial Liabilities - 13 139 305 4,168 4,625 6.77

N/A - not applicable for non-interest bearing financial instruments.

(c) Net Fair Values

The aggregate net fair values of financial assets and financial liabilities, both recognised and unrecognised, at the balance date, are as follows:

Total carrying amount as Aggregate net fair value per the balance sheet (i), (ii)

2005 2005 $,000 $,000

Financial Assets Cash 19,172 19,172 Debtors – Property 3,116 3,116 Debtors – Other 2,460 2,460 Investments 1,619 1,619

Total Financial Assets 26,367 26,367 Financial Liabilities Payables 4,168 4,168 Interest Bearing Liabilities 457 304

Total Financial Liabilities 4,625 4,472

(d) Credit Risk

The maximum exposure to credit risk at balance date in relation to each class of recognised financial assets is represented by the carrying amount of those assets as indicated in the Statement of Financial Position.

Lower Murray Water Annual Report 2004/2005 67 OurPerformanceReporting2004/05

Financial Performance Indicators Target Result Variance % Long Term Profitability Return on Assets 0.5% -0.6% -220* Owner’s Investment Return on Equity 0.2% -1.0% -350* Long Term Financial Viability Debt to Equity 1.0% 0.0% -100* Liquidity & Debt Servicing Interest Coverage 4503% -19107% -524* Immediate Liquidity & Debt Servicing Interest Coverage 31897% -581% -102 Operating Efficiency - Water Operations, Maintenance, & Administration N/A -51.8% N/A Expenses/ML transported. Reticulation/Treatment Operating Efficiency - Wastewater Operations, Maintenance, & Administration N/A 98.1% N/A Expenses/ML transported. Reticulation/Treatment

*The Authority undertook a revaluation as at 1 July 2004. The result of the revaluation was greater than expected which effected depreciation.

Service Delivery Performance Indicators Target Result Variance % Reliability of Supply - Urban Supplies Property Interrupted Ratio 33.9% 94% 177*

Interuption Time (Hours) 3.63 3.57 -1.65 Average time taken in hours to restore an interrupted service

*2004/05 includes planned air scouring in Mildura, Red Cliffs and Merbein. This had a major impact on the result however if interruptions due to air scouring are excluded then the result is 9805 / 28577 = 34%. Air scouring is proposed every fourth year.

Reliability of Wastewater System Target Result Variance % Total No. sewage overflows X 100 Kilometres of sewerage mains Kerang 2.70 0.00 0.00 Koondrook 0.00 0.00 0.00 Lake Boga 0.00 0.00 0.00 Mildura/Irymple/Merbein* 0.70 1.35 92.86 Nyah/NyahWest 0.00 0.00 0.00 RedCliffs 3.10 3.10 0.00 Robinvale** 8.30 16.00 92.77 SwanHill 9.60 3.30 -65.63 Whole Authority 3.34 2.19 -34.43

* Overflows were caused by separate tree root blockages which rodding/jetting successfully cleared. Another overflow was caused by a faulty rising main air valve which was replaced. **Two overflows were caused by separate tree root blockages. **Two overflows (related) were caused by fat build up blockages. Main rodded and then jetted to clear blockage.

Lower Murray Water 68 Annual Report 2004/2005 Quality of Wastewater Disposal Aggregate Annual Performance of a Treatment or Disposal Facility No. of individual test results meeting EPA licence conditions x 100 Target Result Variance % No. of routine tests for the year Kerang 100% 100% 0 Koorlong 100% 100% 0 Merbein 100% 100% 0 Mildura 100% 100% 0 Red Cliffs 100% 100% 0 Robinvale 100% 100% 0

Quality of Wastewater Disposal Short Term/Persistent Compliance with EPA Licence No. of sets of test results meeting EPA licence conditions x 100 Target Result Variance % No. of sets of routine tests for year Kerang 100% 100% 0 Koorlong 100% 100% 0 Merbein 100% 100% 0 Mildura* 100% 100% 0 Red Cliffs 100% 100% 0 Robinvale 100% 100% 0 There are no EPA licence discharge limits for the Koondrook, Nyah/Nyah West, Lake Boga and Swan Hill WWTPs. This is the first full 12 months operation of the Lake Boga treatment plant. *Note the Mildura EPA licence limits are median values over the licence reporting period.

Environmental Performance Indicators

Waste Management for Wastewater Effluent Reused Volume of effluent reused x 100 Target Result Variance % Total volume of effluent produced Kerang 0% 0% 0 Koorlong 100% 100% 0 Merbein 0% 100% 100 Mildura 100% 100% 0 Nyah/Nyah West 0% 0% 0 Red Cliffs 100% 100% 0 Robinvale 100% 100% 0 Lake Boga 0% 0% 0 Swan Hill 0% 0% 0 No effluent is discharged to waterways. At Kerang, Nyah/Nyah West, Swan Hill, Lake Boga and Merbein all effluent passes to evaporation lagoons and is returned to the water cycle via evaporation. Due to reduced influent volumes at Merbein a minimal volume may be used in some years to irrigate a tree plantation to maintain plantation viability. This occurred in 2004/05 resulting in the variance from target. No effluent has become available for reuse from the Koondrook WWTP (commissioned October 2000).

Wastewater Sludge Reused/Recycled Lower Murray Water has no reused/recycled wastewater sludge for 2004/05. The Authority’s Koorlong lagoons were de-sluged in June and will be reused in accordance with the guidelines when a suitable site is obtained. Some sludge from the Mildura lagoons has been used on a National Biosolids Trial conducted by CSIRO. Sludge is currently being stockpiled ready for pasture renovation works in 2006/2007 on site in accordance with guidelines. The Merbein lagoon is programmed to be desludged in 2005. Minimal sludge is produced at the Red Cliffs Plant, stored on site and will be transported to Koorlong for reuse. De-sludging is not programmed at Robinvale, Nyah, Lake Boga, Kerang, Koondrook and Swan Hill for at least 10 years.

Lower Murray Water Annual Report 2004/2005 69 Network Reliabilty Performance Indicators

Network Reliabilty Restoration of Water Supply Target Result Variance %

No. of unplanned interruptions restored within 5 hours x100 99.2% 99.0% -0.2 Total No. unplanned interruptions

Network Reliabilty Target Result Variance Containment of Sewer Spillages (Priority 1 and 2) %

No. spillages contained within 5 hrs x 100 Total No. of sewer spillages 100% 100% 0.00

Customer Complaints Performance Indicators

Complaints per 1000 Target Result Variance * Water Quality urban customers % The Authority carried out an extensive air scouring program which resulted in increased complaints in relation to colour and service interruption. No. of complaints x 1000 No of customers Ω Sewerage Service Quality Odour complaints related to a one week period, at one pump station and Water Quality Complaints 0.3 0.52 73* were associated with odour from a particular industrial waste load. Includes all complaints related to colour, taste and odour The issue was corrected. ∞ Affordability Sewerage Service Quality Affordability complaints were generally associated with pension concessions, and Reliability Complaints 0.0 0.70 100 Ω lack of BPay as a payment option, body corporate issues and final notices. Includes all complaints concerning sewer blockages, spills, sewage odours and service interruptions. The Authority has reintroduced BPay as a payment option and has worked Does not include trade waste complaints with the Department of Human Services/Centrelink to provide a more efficient and streamlined approach to claiming concessions. Complaints have not Water Supply been in relation to tariffs and charges, nor related to processing of financial Reliability Complaints 0.4 1.05 162* hardship cases. # Includes all complaints concerning burst, leaks, pressure and service interruptions. Other Complaints were mainly associated with reinstatement of property after work had been undertaken. Such complaints are always immediately followed up ∞ Affordability Complaints 0.0 0.97 100 and actioned. Includes all complaints concerning billing, financial hardship, installment plans, capacity to pay, prices and tariffs.

Other Complaints 0.0 0.70 100# Includes all complaints concerning quality and timeliness of other services eg connections, account confidentiality, responding to correspondence, staff behavior, trade waste.

Lower Murray Water 70 Annual Report 2004/2005 Lower Murray Water Annual Report 2004/2005 71 Lower Murray Water 72 Annual Report 2004/2005 L.M.W. ANN REPORT CVR OUTPUT 7/10/05 9:25 AM Page 2

Our Establishment Lower Murray Urban and Rural Water Authority was created under the provisions of the Contents

Water Act 1989 via Order in Council effective 1st July 2004. It assumed the whole of Our Profile 1 the property, rights, liabilities, obligations, powers and functions under the Water Act 1989 The Chair's Overview 2 of the Lower Murray Region Water Authority and Sunraysia Rural Water Authority. The Chief Executive Officer’s Review 3 The Authority reports to the Minister for Water, The Hon. John Thwaites MP. Our Board 4 Our Organisational Chart 7 Our Objectives 8 Our Works 10 Our Services Our Customers 18 In accordance with the Water Act 1989, Our Commitment to our Region 20 Lower Murray Water provides: Our Environment 24 • urban water and wastewater services to 14 townships Our People 28 and approximately 60,000 customers along the Murray • drainage design in new agricultural developments to River in Victoria from Kerang to Mildura; ensure conformity with salinity management plan Our Financial Management 30 development guidelines; Our Service Delivery 32 • wastewater collection, treatment and effluent disposal Performance Indicators services to 11 towns via 10 treatment plants; • support for the design, implementation, operation and maintenance of works initiated by the Mallee Catchment Our Transfer of Water Rights, 33 • river quality water services to 305 stock, 850 garden Management Authority; Licences and Sales Water, and 1,350 irrigation customers in the three pumped Irrigation Water Usage and irrigation districts of Merbein, Red Cliffs and Robinvale, • management of the private diversion licences of 1,059 Licence Entitlements the Millewa rural district and some areas of the water users along the Murray River in Victoria between Reportable Information 36 Nyah West and the South Australian border; and waterworks districts of Carwarp and Yelta; Disclosure Index 37 • management of the region’s rural bulk water entitlement • the assessment and approval of permanent and Financials 39 of 347,337 ML; temporary water trade applications. Our Performance Reporting 2004/05 68 • for the collection and disposal of subsurface drainage As well as security of supply, public health, water quality water from the three pumped irrigation districts, and environmental responsibilities, Lower Murray Water Cover: The Murray River at Red Cliffs, Victoria Nangiloc, Robinvale diverters and Boundary Bend; recognises the crucial economic role of water from a regional and state context.

Our Region

Mildura NSW SA Murray River Lindsay Point VIC Merbein Mildura Irymple Bendigo Red Cliffs NSW Werrimull Ballarat Melbourne Nangiloc Robinvale Extent of Lower Murray Water Boundary Bend Area SA Wemen

Ouyen Piangil Nyah Nyah West Woorinen Legend Murray River Vic Swan Hill Lake Boga Urban Water Services Murrabit Urban Wastewater Services Koondrook Kerang Rural Irrigation Services Rural Drainage Services Rural Stock Supply N Private Diverters

Sunrise over the storage lagoon at Lower Murray Water Mildura Wastewater Treatment Plant Annual Report 2004/2005 Annual Report 2004/2005 Lower Murray Water Annual Report 2004/05

Lower Murray Water “Make Every Drop Count”

Mildura (Head Office) Irymple (Area Office) Swan Hill (Area Office) Robinvale (Area Office) Kerang (Area Office) 741-759 Fourteenth Street 2115 - 2117 Fifteenth Street 73 Beveridge Street 37 Moore Street 56 Wellington Street PO Box 1438 PO Box 1438 PO Box 1447 PO Box 600 PO Box 547 Mildura, 3502 Mildura, 3502 Swan Hill, 3585 Robinvale, 3549 Kerang, 3579 Telephone: (03) 5051 3400 Telephone: (03) 5051 3400 Telephone: (03) 5036 2150 Telephone: (03) 5026 1300 Telephone: (03) 5450 3960 Facsimile: (03) 5051 3480 Facsimile: (03) 5021 9778 Facsimile: (03) 5036 2180 Facsimile: (03) 5026 1106 Facsimile: (03) 5450 3967

Web: lmw.vic.gov.au Email: [email protected]