East Gippsland Water Annual Report 2009/10 At a glance East Gippsland Water’s Region

East Gippsland Water serves an area of 21,000 square kilometres in the far south east of Victoria, which boasts some of Australia’s most diverse and spectacular scenery and a population of some 41,000 people. The region’s world renowned beaches, lakes, high country and national parks are a natural drawcard for those seeking a lifestyle change, as well as for the many tourists that swell the region’s population numbers over the busy holiday periods. East Gippsland Water’s service area extends east from Lindenow, through to the region’s capital Bairnsdale, the holiday centres of Paynesville and Lakes Entrance, and on to the wilderness coast and Mallacoota near the New South Wales border. The Corporation also serves as far north as Dinner Plain in the High Country of the Victorian Alps. Water services are provided to more than 23,000 customers and wastewater services to over 19,900, spread across some 30 separate communities.

Water and Sewerage Services

Water Services

Other Townships

Genoa River Buchan River

Snowy River

Mt Hotham Cann River

Brodribb River Genoa Dinner Plain Bemm River Omeo Mallacoota Betka River Swifts Creek Buchan Rocky River Cann River Tambo River Ensay

Dargo

Princes Hwy Nicholson River Orbost Bemm River Newmerella Nowa Nowa Mitchell River Bruthen Marlo Johnsonville Swan Nicholson Reach Lake Tyers Bairnsdale Lindenow Lakes Entrance Metung Walpa Eagle Point Lindenow South Paynesville Newlands Arm

Melbourne

Fact file (as at 30 June 2010)

Water Wastewater Serviced properties Serviced properties - domestic assessments 20,655 - domestic assessments 17,789 - non domestic assessment 3,036 - non domestic assessments 2,154 Volume of water consumed (ML/y) 4,720 Volume of wastewater collected (ML/y) 2,675 Length of water mains (km) 888 Length of sewer mains (km) 593 Water treatment plants 9 Wastewater treatment plants 10 Water disinfection plants 17 Water recycled (%) 100 Separate water supply systems 9 Separate wastewater systems 10 The Corporation East Gippsland Region Water Corporation was initially established as East Gippsland Region Water Authority on 1 January 1995, by Ministerial Order and under powers conferred by the Water Act 1989. It became a Corporation on 1 July 2007 and trades as Contents Page East Gippsland Water. During the reporting period the responsible Minister was At a Glance Inside front cover The Hon Tim Holding MP, Minister for Water. In accordance with the Water Act 1989, East Gippsland Vision, Mission and Objectives 2 Water delivers the full range of retail water services including water harvesting, storage and drinking water Chairperson’s Report 2 supply. It also provides wastewater collection, treatment and recycling services, as well as trade waste services to industrial and commercial customers. Corporate Governance 4

Environmental Sustainability 7

About this Report Asset Management 16 This Annual Report details East Gippsland Water’s performance and achievements in all areas of its People and Culture 18 operations during 2009/10. It has been prepared in accordance with the Financial Reporting Direction FRD 30 - Standard requirements for the design and printing Water Quality 23 of annual reports. This defines the design and print specifications of annual reports to ensure consistency, Communication, Consultation cost minimisation and low environmental impact. and Education 28 Further information and previous Annual Reports are available at www.egwater.vic.gov.au. Management of Social and Economic Impacts 31

Financial Summary 33

Other Information 35

Performance Statements 37

Audit Certificate 43

Financial Report 45

Audit Certificate 76

Appendix: Whistleblower’s Protection Act Policy 78

Disclosure Index 86

ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 1 Vision, Mission and Objectives

East Gippsland Water’s Vision For East Gippsland Water to be recognised as a premier Corporation within the water industry, responsive to the needs of its community, the protection of the environment and the requirements of Government. Our Mission Chairperson’s Report Our core purpose is to ensure that… On behalf of the Board, and in accordance with • Our team provide quality water the Financial Management Act 1994, I am pleased and wastewater services to present the Report of Operations for East • Our approach is responsive to Gippsland Water for the year ending 30 June 2010. customers and the Government The Corporation continued to be highly proactive • Our operations are cost effective, in addressing the needs and requirements of the environmentally sensitive and conducted local community and Victorian Government, in a safe and efficient manner leading the way for water industries in a number of respects. We achieved a great deal and operated • We use sustainable management on a sound financial basis, during one of our principles in all our business activities most significant years for capital projects. Our objectives Our priorities continue to be driven by our Water Plan 2008-2013, which sets out our challenges, targets and In accordance with the Water Act 1989, East prices for the five year period. Along with our Water Gippsland Water has the following objectives, Supply Demand Strategy, this reflects our commitment which are reflected in its Corporate Plan – to ensure all customers have secure, high quality drinking water supplies well into the future, protected • Governance and Regulation against the impacts of changes in climate and extreme We are committed to meeting the requirements weather events that have bedevilled the region. of customers, government and stakeholders. Notable highlights and achievements • Environmental Sustainability for 2009/10 included: We are committed to environmental sustainability in all aspects of water and Aquifer Storage and Recovery wastewater service provision. Leading the way for Australia, East Gippsland Water • Asset Management and Development conducted the country’s first trial to assess the viability We are committed to optimising the use of of using an aquifer as a natural underground storage existing physical assets and developing new for drinking water. The trial concentrated on storing infrastructure for the delivery of water and water sourced from the Mitchell River and proved highly wastewater services and emerging requirements. successful. In June 2010 we applied for an operational licence from the regulator, Southern Rural Water, to • Management and Operations initially store 500ML from the Mitchell in the Latrobe We are committed to optimising the use of our Aquifer, with the potential to increase this up to 1.2GL human, financial and corporate resources. This will provide us with another storage option for water taken under our existing entitlement with the Mitchell River. It has great potential in ensuring long- term drinking water security for tens-of-thousands of East Gippsland Water customers, as well as having potential benefits for the wider community. Using an aquifer as a storage reduces water loss from evaporation and ensures the availability of high quality drinking water, free from risks of algal and airborne contamination. It also represents a more cost- effective water storage than constructing traditional infrastructure such as open basins, dams and tanks.

2 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 3 Major infrastructure openings The Environment June 2010 saw the official opening of a major new water For the sixth year running we achieved 100% reuse treatment plant and 715ML water storage for our region, across all our wastewater treatment plants and at Woodglen near Bairnsdale. These were constructed maintained our position at the forefront of Victorian as part of a five year, $67 million program of works water corporations in the area of water recycling. across East Gippsland, designed to ensure the long-term In the past year we also scooped a leading industry protection of drinking water supplies for all customers. award for our efforts to increase the sustainability of our With a combined cost of $22.5 million, the two business by purchasing environmentally sustainable goods projects were delivered some $3.5 million below and services. Entering the inaugural Strategic Purchasing budget. The water treatment plant was also Procurement Excellence Awards, we finished first in the delivered two years earlier than originally scheduled Sustainable Procurement category, as judged by leading in light of the impact of bushfires in 2006 and figures in the local government and public sectors. 2007 on water quality in the Mitchell River. Specifically, these initiatives will benefit around Sewerage Schemes 24,000 customers reliant on the Mitchell River The sewerage scheme for Banksia Peninsula was water supply system, from Lindenow through completed and we also investigated options for a to Nowa Nowa, including the communities of community-wide reticulated sewerage scheme for Bairnsdale, Paynesville and Lakes Entrance. Bemm River. This investigation was instigated by recommendations in East Gippsland Shire Council’s The year also saw the official opening of the upgraded Domestic Wastewater Management Plan. This identified water storage at Wy Yung, which had been lined the need for such a scheme as a high priority, to replace and covered, and two 6ML covered water storage the Bemm River community’s current reliance on tanks at Eagle Point to replace the existing open septic tanks. Submissions from the local community storage. Opened by the Water Minister, The Hon. were invited and carefully considered on a proposed Tim Holding, these facilities have been designed to option to construct a reticulated wastewater collection minimise water loss through evaporation and to ensure and treatment system, with wastewater recycled stored drinking water supplies are better protected to a standard suitable for subsurface irrigation. We against bacterial, algal and airborne contamination. resolved to progress with this option and work has The total cost of the works was $4.8 million. started on detailed designs for the scheme. The aim The Hon. Mr Holding also officially opened a is for construction to commence during 2010/11. $1.9 million upgrade to the winter storage basin Both the Banksia Peninsula and Bemm River at Mallacoota’s wastewater treatment facility. schemes are designed to benefit the health of local waterways and protect public health by removing Water Strategies risks associated with septic tank effluent. We commenced the process of updating our Water Supply Demand Strategy, which has In Summary a vital role to play in determining how we I am able to report that the Corporation has risk address long-term water security issues. management processes in place consistent with the The objective is to provide a detailed, long-term Australian/New Zealand Risk Management Standard forecast of water demands for communities across East AS/NZS4360:2004 and the newly issued International Gippsland, along with supply options to meet those Standard ISO 31000. There is an internal control demands. Consideration is being given to the latest system that enables our management to understand, projections on climate change and population growth, manage and satisfactorily control risk exposures. The as well as the impact of bushfires on water catchments. Audit & Risk Committee of the Corporation verifies This strategy will be instrumental in determining the this assurance and also that the risk profile has been direction of our coming 2014-2019 Water Plan. critically reviewed within the last 12 months. Complementing this, we are participating in the On 30 June 2010 I retire as Chairperson of the development of the Gippsland Region Sustainable Corporation after nine years in that role and take Water Strategy – a blueprint to secure the region’s this opportunity to assure both the Victorian water resources for the next 50 years. Work on this Government and our customers that the Corporation Victorian Government initiative continued during the is fully meeting its financial, social and environmental financial year. Those being consulted include water requirements. I also thank the management and corporations, local government, catchment management staff located across East Gippsland for their ongoing authorities, industry groups and the wider community. commitment to the work of the Corporation.

Robert Fordham Chairperson, East Gippsland Water 30 June 2010

2 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 3 Samuel Logan Corporate Governance Appointed: January 2008 The Board Samuel Logan (CA B.Bus (Accounting)) is a Chartered Accountant, Registered Tax Agent, and Director and In accordance with the Water Act 1989, the Board Principal of Riviera Accounting & Taxation Services of East Gippsland Water consists of eight non- Pty Ltd. His professional experience includes business executive Directors appointed by the Hon Tim advisory services in management improvement, budgeting Holding MP, Minister for Water, based on their skills. and financial reporting. He provides accounting and The Managing Director is also a Director on the Board. taxation compliance advice to a diverse range of business industries including primary production, transport, The Board is responsible for the establishment of manufacturing, retail, and professional organisations. corporate strategy and the oversight of policies and business objectives to achieve that strategy. It is Samuel is Chairperson of East Gippsland committed to performing its role in accordance with Water’s Audit & Risk Committee. the highest standards of Corporate Governance. Gail Morley Robert Fordham – Chairperson Appointed Chairperson: 1 July 2010 Reappointed: October 2007 Retired: 30 June 2010 Gail Morley is Managing Director of a consultancy Robert Fordham (B.Comm, Accounting and Economics, business and has expertise in organisational development, and B.A. Political Science) is Chairperson. Robert is a vocational education and business management. She Member of the Standing Committee of the Anglican holds a Bachelor of Arts, a Bachelor of Education Church of Australia and a Director of Narkoojee Pty Ltd. and a Graduate Diploma in Office Systems. Originally an accountant, he was a Member of the A graduate member of the Australian Institute Parliament of Victoria from 1970 - 1992. He was a Minister of Company Directors, who also serves on the and Deputy Premier of Victoria from 1982 – 1989. Board of Gippsland Ports, Gail brings significant corporate governance skills to the Board. Robert is Chairperson of East Gippsland Water’s Remuneration Committee. She is a member of East Gippsland Water’s Remuneration Committee. Bernie Smith – Deputy Chairperson Reappointed: October 2008 Jane Rowe Reappointed: October 2008 Bernie Smith (F.R.Ae.S.) is Chairperson of Gippsland Ports and former Chief Executive Officer of the Jane Rowe is serving her third term as a Councillor of Tasmanian Ports Corporation. Past roles include East Gippsland Shire Council, of which she has twice been Chief Executive Officer of Airservices Australia, elected Mayor. She is also the Rural Vice President of the Air Traffic Control Corporation, gas companies the Municipal Association of Victoria and Co-Chair of its Kinetik Energy and Westar, and also electricity Strategic Environment Advisory Group, a Member of the generation corporation, Hazelwood Power. He was Victorian Local Sustainability Advisory Committee and Director of Business Communications for Ericsson Keep Australia Beautiful Victoria Advisory Committee, Australia, and General Manager of Maintenance and Controller of the local State Emergency Service. and Engineering for Australian Airlines. She has served as Secretary of the Mitchell River Bernie has served on a number of Boards. He is a Management Board, Chair of the Gippsland member of East Gippsland Water’s Technical Committee. Local Government Network and Chair the East Gippsland Catchment Management Authority. Richard Elkington Jane brings particular expertise in local government and Appointed: October 2007 corporate governance to the Board and is a member Richard Elkington has worked for nearly 40 years in the of East Gippsland Water’s Audit & Risk Committee. Latrobe Valley power generation industry and has held a number of senior operational management positions. Eric Sjerp Reappointed: October 2007 He is currently Executive General Manager People & Positioning with Loy Yang Power. He is on the Executive Eric Sjerp, an Environmental Scientist with a Bachelor Council of the Victorian Employers’ Chamber of of Science degree (Geology and Geography), is Commerce and Industry and has served as a member Managing Director and Principal Consultant of of the Victorian Government Regional Development Ethos NRM Environmental Planning Consultants. Advisory Committee. In addition Richard represents He is a member of the Environmental Institute Loy Yang Power and the Latrobe Valley power industry of Australia and New Zealand, Victorian Planning on a host of committees at state and national level. and Environmental Law Association, Australian Previously Chair of neighbouring water corporation, Institute of Company Directors, East Gippsland Gippsland Water, he brings invaluable water industry Catchment Management Authority’s Technical and expertise to the Board of East Gippsland Water where Regional Assessment Panel and the East Gippsland he is also a member of the Audit & Risk Committee. Environmental Sustainability Advisory Board.

4 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 5 Eric has extensive professional experience in the Members: fields of environmental impact assessment, natural • Samuel Logan (Chairperson) resource and conservation management, strategic • Jane Rowe land use planning and government liaison. • Richard Elkington He is Chairperson of East Gippsland • Independent member John Howson B.Bus, Water’s Technical Committee. C.A. – appointed May 2010 for three years. • Independent member Ken Jones F.P.N.A., Robert Supplitt C.P.E. - term ended November 2009 Reappointed: October 2007 • Independent member Dr. Peter Veenker F.A.S.C.P.A., Robert Supplitt holds a Bachelor of Engineering C.P.A. - reappointed May 2010 for two years. (Civil) and a Master of Business Administration, and has worked extensively in the power supply, mineral Technical Committee resource, engineering consulting and construction The Technical Committee focuses on effective industries. He is a Director and Principal Consultant management of technical, operational and in the firm Crossco Consulting Pty Ltd. environmental risks, compliance with laws and His professional experience includes civil engineering regulations and the capital works program. design and construction, project management, Members: operational management, information technology, business planning and business process improvement. • Eric Sjerp (Chairperson) • Bernie Smith Robert is a member of East Gippsland Water’s • Robert Supplitt Technical Committee and Remuneration Committee. Les Mathieson – Managing Director Remuneration Committee Appointed: July 2007 The Corporation’s Remuneration Committee reviews and makes recommendations to Les Mathieson holds a Bachelor of Arts, a Diploma the Board concerning the performance and of Company Directors and a Diploma of Frontline remuneration of the Managing Director and Management, and has many years experience in members of the executive management team. executive roles within the Victorian water industry. Members: He is a Committee Member and an Associate of the • Robert Fordham (Chairperson) Institute of Water Administration and a Director of the • Gail Morley Paynesville & District Community Bank. Les is also a • Robert Supplitt Member of the Australian Institute of Management and a Fellow of the Australian Institute of Company Directors. Ethical Standards Board Meetings The Board of East Gippsland Water acknowledges the need for the highest standards of corporate The Board meets formally once a month, with governance practice and ethical conduct by all Directors, invited members of the executive management employees and contractors of the Corporation. The attending as necessary. Additional meetings are Board has adopted the Directors’ Code of Conduct held, as required, to consider specific issues. issued by the Public Sector Standards Commissioner. Board Committees Declaration of Pecuniary The Board has constituted the following committees Interests to assist in meeting its governance obligations, both statutory and to the community; All Board members and executive managers have completed a declaration of Audit & Risk Committee interests for the reporting period. The Audit & Risk Committee is chaired by a Board Director other than the Corporation Chairperson and includes three members of the Board and two independent persons with appropriate financial business acumen and experience. The Board has also appointed an Internal Auditor who reports directly to the Committee. The Committee determines a systematic internal audit program that looks at internal processes and controls with a view to testing these processes for minimisation of system, financial and operational risk, and to promote efficiency and effectiveness.

4 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 5 Meeting Attendance 2009/10

Board Audit & Risk Technical Remuneration Committee Committee Committee

Director Eligible Attended Eligible Attended Eligible Attended Eligible Attended Robert Fordham 12 12 - - - - 2 2 Bernie Smith 12 9 - - 6 3 - - Richard Elkington 12 11 4 3 - - - - Samuel Logan 12 11 4 4 - - - - Gail Morley 12 12 - - - - 2 2 Jane Rowe 12 9 4 3 - - - - Eric Sjerp 12 11 - - 6 5 - - Robert Supplitt 12 12 - - 6 6 2 2 Les Mathieson 12 12 ------

Organisation Structure East Gippsland Water’s organisation structure as at 30 June 2010: Board of Directors • Audit & Risk Committee • Technical Committee • Remuneration Committee

Managing Director

Les Mathieson B. Arts, Dip. Company Directors, Dip Frontline Management AIWA, M. AIM, F. AICD Responsible for • Corporate Management and Development • Strategy Implementation

Executive Manager Executive Manager Executive Manager Executive Manager Corporate Operations Finance and Assets and Development and Customer Services Infrastructure Services Development

Brett Millington Frank McShane Robert Carlesso Dean Boyd B.Sc(Hons), Grad Dip. Bus C Eng, BSc, MI Plant Eng, B. Bus. MNIA, GAICD BE, MBA, MIE Aust., CP Eng. GAICD MSOE. Responsible for Responsible for Responsible for Responsible for • Human Resources • Operations and • Financial and • Engineering Projects and • Industrial Relations Maintenance Management Program Management • Public Relations • Environmental Accounting Services • Infrastructure Asset • Special Projects Sustainability • Revenue and Management • Communications and • Wastewater Customer Services / • Capital Works Customer Consultation Treatment and Reuse Customer Charter • Developer Works • Business Risk and • Water Supply • Financial Asset Compliance and Treatment Management • IT Sevices • Financial Risk and Compliance • Regulatory Reporting

6 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 7 • winning the Sustainable Procurement category of Environmental the inaugural Strategic Purchasing Procurement Excellence Awards – as judged by leading figures Sustainability in the local government and public sectors; East Gippsland is an environmentally diverse part of • continued high performance of the corporation’s Victoria. The well-being of the environment, community Environmental Management System, with two and economy are closely linked, particularly in relation highly successful external audits finding no non- to the region’s dominant industries of tourism, forestry, conformances during the reporting period; fishing and agriculture. During 2009/10 the Corporation’s high priority commitment to sustainability and • a switch to 100% recycled paper and a continued protecting the environment was reinforced through: reduction in paper use despite an increase in staff numbers at the Bairnsdale office. • 100% reuse across all its wastewater treatment plants - a record it has The reporting period saw a notable reduction in maintained every year since 2004/05; the total water consumed by residential and non- residential customers from 4,991.3ML in 2008/09 • a continued reduction in water consumption figures; to 4,719.8ML. Average residential consumption also decreased from 179.8kL to 167kL. Organisation Structure East Gippsland Water’s organisation structure as at 30 June 2010: Water Consumption

Water Consumption Statistics by District/System 2009/10

District/ Assessment Numbers Non-Revenue Water Water Consumption Average System (= Customer Numbers) (ML) (ML) Annual Water Consumption (ML) – based on last 3 years Residential Non-Residential Total Unaccounted Water #1 Accounted water not Billed #2 Total Residential Non-Residential #3Total

Bemm River 90 8 98 1.3 0.024 1.4 11.9 4.5 16.4 15.8 Buchan 83 31 114 3.6 0.075 3.7 11.9 9.1 21.0 20.0 Cann River 150 67 217 3.8 0.795 4.6 18.0 18.8 36.8 40.0 Dinner Plain 487 56 543 14.2 0.350 14.6 21.1 6.5 27.5 26.8 Mallacoota 938 104 1,042 11.2 1.214 12.4 103.8 45.7 149.6 150.6 Mitchell 16,930 2,274 19,204 437.7 310.99 748.7 2,567.9 1,162.4 3,730.3 3,699.4 Omeo 214 75 289 16.4 3.219 19.6 23.0 14.0 37.0 40.3 Orbost 1,661 391 2,052 125.3 13.856 139.1 274.7 399.6 674.4 693.0 Swifts Creek 102 30 132 3.6 0.120 3.7 16.8 9.9 26.8 29.1

Total 2009/10 20,655 3,036 23,691 616.6 331.2 947.8 3,049.1 1,670.7 4,719.8 4,714.9

Notes: #1 Unaccounted Water includes water lost through leakages because of pipe breaks and any water not calculated. #2 Accounted Water not Billed includes water used for mains flushing, scouring of tanks and basins, bleeds for disinfection, and where storages may have been emptied for augmentation. It also includes 253.1ML specifically recorded for use in the construction of a new water storage at Woodglen and the upgrading of water storages at Wy Yung and Sarsfield. #3 Total Water Consumption excludes Non-Revenue Water.

6 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 7 This occurred despite more than 460 additional In addition, the 160ML open storage basin at assessments (customers). Factors helping to drive the Sarsfield was replaced by a 6ML, covered storage level of consumption down included regular publicity tank to reduce water loss through evaporation and surrounding key water conservation messages, the leakage, and to significantly reduce the risk of soil, implementation of effective water saving plans by algal or airborne contamination of stored water. local businesses (under the WaterMAP program) Elsewhere, design and planning work to increase and a mild summer. Customers continued to follow a the capacity of Omeo’s drinking water storage from conservative, conscientious approach to water usage five to 15ML got underway. This was identified as a and were keen to adopt water efficiency measures. priority in the Corporation’s Water Supply Demand Our Water Our Future Strategy for that area and follows a number of water scarcity issues in recent years resulting from prolonged During 2009/10 the Corporation continued to periods of dry weather, with rivers ceasing to flow. progress a number of initiatives from the Victorian Government’s Our Water Our Future policy, It is anticipated that construction work will which is designed to drive initiatives conserving and commence and be completed during 2010/11. securing water supplies for the next 50 years. Working with businesses East Gippsland Water’s achievements during East Gippsland Water maintains a record of non- the 2009/10 reporting period included: residential customers consuming more than 10ML of drinking water a year, who are required to Water Efficiency and Security prepare and implement water saving plans under East Gippsland Water’s ongoing program to utilise the Victorian Government’s WaterMAP initiative. water supplies more efficiently and reduce its Ten businesses in the region consumed in excess of 10ML impact on the environment includes managing water in the reporting period, of which nine have developed losses by replacing old meters. It also investigates a WaterMAP and one an Energy Resource Efficiency pipelines and property connections to pinpoint and Plan (EREP) which also addresses water efficiency. reduce leaks under its leak detection program. The Corporation continues to work with all The Corporation continued with its meter replacement these customers on the implementation and program, with 753 meters replaced during 2009/10, monitoring of water efficiency measures. which included commercial premises previously billed on assessed useage to accurately gauge their water Major non-residential water users 2009/10 consumption. Five bulk flow meters were also replaced. Volumetric Range – ML/year Number of Customers All bulk flow meters are calibrated at least once a Equal to or greater than year to ensure accurate readings are maintained. 1* 50ML and less than 100ML Water treatment processes have traditionally resulted Equal to or greater than 1** in water loss due to the filtering of contaminants and 100ML and less than 200ML the Corporation has been keen to address these Equal to or greater than 0 losses. Improvements made to the Orbost and Omeo 200ML and less than 300ML water treatment plants in 2009/10 enabled the Equal to or greater than 0 annual recycling of some 18 ML of water (washwater) 300ML and less than 400ML used in operating the facilities. This was water that Equal to or greater than 0 would otherwise discharge into the sewer. 400ML and less than 500ML Equal to or greater than 0 Storages and Tanks 500ML and less than 750ML A top priority for the Corporation is ensuring Equal to or greater than 0 all customers have secure, consistently high 750ML and less than 1000ML quality drinking water supplies for the long- Greater than 1000ML 0 term future, protected against the impact of extreme weather events and climate change. Total number of customers 2

East Gippsland Water continued to make significant Name of Customer’s participation progress on key projects, as part of a five year, $67 customer in a water conservation million program of capital works. June 2010 saw program the official opening of a new raw water storage * Patties Bakery Water management and water treatment plant at Woodglen. plan developed The new 715ML water storage adds significantly to the drinking water storage capacity for the ** Vegco Energy Resource Efficiency Mitchell system, supplementing Woodglen’s original Plan developed 850-million-litre storage basin built 11 years ago. The water treatment plant is the first for the system and capable of processing up to 20ML of water a day.

8 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 9 Laundries Water Efficiency Program throughout the region. This is considering latest During the reporting period East Gippsland projections on climate change, and population growth, Water encouraged business customers with an as well as the impact of bushfires on water catchments. on-site laundry to participate in the DSE-funded The objective is to provide a detailed, long-term Laundries Water Efficiency Program. A total forecast of water demands for communities across of 204 businesses were targeted in the region the region, along with supply options to meet to take part in the $1 million initiative, ranging those demands. A key outcome will be individual from laundrettes with public users to hotels. strategies for each water supply system. With this program participants were able to access a Omeo and Mallacoota were targeted as a priority in web-based assessment system that helps to evaluate 2009/10, due to ‘cease-to-flow’ events in Butchers Creek water efficiency performance and potential savings for serving Omeo and the Betka River supplying Mallacoota. their facility. They also received a business tool kit that includes a best practice guide, a business case assessment A review of the region’s other water supply tool, product fact sheets and an awareness package. systems also commenced. By the end of June 2010 individual strategies had been produced for Omeo, Assisting Local Government Mallacoota, Buchan, Dinner Plain and Swifts Creek. The Corporation has been actively involved with The remainder will be completed early in 2010/11. the development of East Gippsland Shire Council’s The new Water Supply Demand Strategy will be Environmental Sustainability Strategy. One of its Executive instrumental in determining the direction of East Managers was reappointed on the Council’s Environmental Gippsland Water’s coming 2014-2019 Water Plan. Sustainability Advisory Board, providing specialist input It is also being incorporated into the Corporation’s in relation to water effieciency and management. Drought Response Plans to enable an integrated In addition, the two organisations have a approach to water management across a full range Memorandum of Understanding committing both of projected water supply and demand scenarios. to work together on projects and issues of common East Gippsland Water actively pursues water efficiency, interest including water conservation initiatives. as highlighted elsewhere in this report. The target adopted is a 25% reduction in per capita demand Gippsland Region Sustainable Water by the year 2015, relative to 1990’s demand. Strategy With the objective to ensure long-term water security Water recycling for the region, this strategy is being developed by the East Gippsland Water maintained its record as a Victorian Government in consultation with water leader amongst Victorian water corporations in water corporations, catchment management authorities, local recycling, with it again achieving 100% reuse across government, the community and industry groups. all ten of its wastewater treatment plants. It has East Gippsland Water’s Managing Director is an achieved 100% reuse every year since 2004/05. active member of the Consultative Committee. The Corporation completed its second full financial year A discussion paper for the strategy was released for operating under a Corporate Licence agreed with the public comment early in the reporting period, with the EPA. While licence requirements remain as rigorous draft strategy due to be published during 2010/11. as ever, East Gippsland Water is able to devote more focus to long-term sustainability initiatives designed Community Education and Awareness to further enhance the Corporation’s environmental performance, as opposed to simply reporting. East Gippsland Water employs a range of strategies to communicate key messages to school students and adults, Indeed, staff have been working with the EPA and to focus on the importance of using water efficiently and other organisations to identify further long-term, to highlight that Permanent Water Saving Rules apply sustainable solutions for the internationally significant across the region. Further details on this can be found Macleod Morass. This already benefits from the fresh, in the Corporate Sustainability section of this report. recycled water produced by the nearby Bairnsdale Wastewater Treatment Plant, to combat encroaching Water Supply Demand Strategy salinity from the Mitchell River and Gippsland Lakes. East Gippsland Water is in the process of updating All the recycled water produced by the Corporation is its Water Supply Demand Strategy (WSDS) directed at beneficial reuse, with a priority on protecting for the region, which has a vital role to play in the environment. It is utilised on its own properties to determining how the Corporation addresses long- irrigate pasture and tree plantations at Newmerella, term water security issues in each of its systems. Mallacoota, Metung, Paynesville, Bairnsdale and at its The present WSDS, adopted by the Board in 2007, Bruces Track Farm near Swan Reach. Third parties was instrumental in determining the priorities and to benefit include golf courses and the Bairnsdale direction of East Gippsland Water’s 2008-2013 Water Racecourse, as well as farmers in Newmerella, Swan Plan. A revision of the WSDS was initiated in 2008/09, Reach, Paynesville, Omeo, Cann River and Kalimna West. responding to a significant reduction in stream flows

8 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 9 Volume of Wastewater Collected, Treated and Reused Volume (ML)

2006/07 2007/08 2008/09 2009/10 Wastewater collected 2,851 2,838 2,718 2,674.7 Wastewater treated 2,429 2,730 2,370 2,152.6 Wastewater reused 2,429 2,730 2,370 2,152.6 Actual wastewater reuse 100% 100% 100% 100% Target reuse 100% 100% 100% 100%

Volume of Wastewater Reused per Town/System - 2009/10 Town/System Number of Assessments Annual Wastewater Volume Re-used (ML) Bairnsdale 6,702 1,119.3 Cann River 171 8.1 Dinner Plain 533 38.2 Lakes Entrance 4,507 415.7 Lindenow 176 7.3 Mallacoota 996 19.8 Metung / Bruthen 1,458 65.2 Omeo 238 18.9 Orbost / Marlo 1,674 243.3 Paynesville 3,488 216.7 Total 19,943 2152.6

During 2009/10 East Gippsland Water’s Newmerella Newmerella. As part of the approved Bemm River Farm was successfully leased out to a local farmer, Sewerage Scheme, East Gippsland Water is proposing as part of the Corporation’s commitment to further to use subsurface irrigation for the recycled water optimise beneficial reuse. This is highly productive generated, which is a first for the Corporation. irrigation pasture providing good financial returns. A number of new reuse projects were investigated during 2009/10 including the development of recycled water schemes in Bairnsdale, Metung and

How 100% reuse is achieved Location Reuse Purpose

Bairnsdale Wetlands East Gippsland Racecourse Water tree plantations Lindenow Wetlands Paynesville East Gippsland 3rd party Water pasture pasture Metung East Gippsland Water pasture Lakes Entrance, East Gippsland East Gippsland 3rd party Golf Kalimna West Water pasture Water tree pasture course and Swan Reach plantations Omeo 3rd party pasture Dinner Plain Alpine woodland Orbost and East Gippsland East Gippsland 3rd party Newmerella Water pasture Water tree pasture plantations Mallacoota East Gippsland Golf Water tree course plantations Cann River 3rd party pasture

1 0 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 11 Macleod Morass minimise the volume of bulk water diverted Under EPA licensing requirements, and a Memorandum from the region’s streams and aquifers; of Understanding with Parks Victoria, East Gippsland • through the East Gippsland Water Managing Water’s Bairnsdale Wastewater Treatment Plant Director being an active member of the supplies high quality recycled freshwater to the VicWater team - working with the DSE, EPA Macleod Morass, via constructed wetlands. and Department of Health on progressing the East Gippsland Water is now planning a major upgrade removal of cattle access to rivers and streams to the wastewater treatment plant, sections of which in potable drinking water catchments. This not are now some 70 years old. As part of this process only protects drinking water quality, but also it is considering the long-term requirements of the provides for wider river health benefits. morass from a water quality and quantity perspective. In 2009 the EPA established a Macleod Morass working Regional Catchment Strategy group, comprising representatives from 13 stakeholder The Corporation is a member of the EGCMA’s organisations, to assess the benefits of continuing to Program Working Group whose purpose is to supply recycled fresh water to the morass. This group improve the coordination of various activities, to concluded that the supply to the morass is beneficial and meet the objectives of the East Gippsland Regional recommended that it should continue. It also made a Catchment Strategy and supporting plans. number of recommendations for the ongoing management It also works with the EGCMA, Parks Victoria, of the morass, which have been endorsed by the EPA. East Gippsland Shire Council, Alpine Shire Council In addition East Gippsland Water carried out and DSE on catchment-related projects and acts improvement works along the access track to make the as a referral authority for works that occur in morass more accessible to cyclists, wheelchairs and prams. the Corporation’s water supply catchments. East Gippsland Water continues to contribute River Health more broadly to strategy and biodiversity The Corporation actively works to ensure management across the region. compliance with river health requirements set out in its Statement of Obligations is consistent with Victorian Biodiversity Strategy the Victorian River Health Strategy, in particular the The Corporation complies with the Victorian East Gippsland Catchment Management Authority Biodiversity Strategy through implementation of the (EGCMA) Regional River Health Strategy. East Gippsland Water Biodiversity Management Plan Extractions for drinking water to supply East and maintenance of its Biodiversity Asset Register. Gippsland Water customers are undertaken with East Gippsland Water assets/sites have been minimal impact on existing environmental flows assessed for biodiversity significance values, and from the region’s waterways. The Corporation has risks to these, as well as those posed by any new no major on-stream dams and the small, 640 ML works, to ensure they are managed in accordance Nicholson River dam has been recommended for with the Biodiversity Management Plan. decommissioning due to augmentations undertaken The Corporation’s plan is designed to minimise elsewhere in East Gippsland Water’s supply system. any potential harm to threatened and endangered The Corporation is actively involved in initiatives to species by identifying the locations of any previously protect and improve wetland and river health including: recorded sensitive species or vegetation types. The plan also involves training field staff and raising • through investigation of the impact that biodiversity awareness within the Corporation. East Gippsland Water infrastructure and operations may have on local river health, and During the reporting period independent biodiversity using the results to minimise any impact; assessments were completed along the Sarsfield and Eagle Point main supply pipeline alignments. In addition, • participation in the Gippsland Regional Water an independent biodiversity assessment was commenced Monitoring Partnership Group, which monitors along the proposed extension of the Lakes Entrance water quality across Gippsland streams and sewerage system to Lake Tyres Aboriginal Trust. estuaries. The group’s information is crucial in monitoring catchment health and the Corporation contributes funds, staff and other resources; • working with the EGCMA to provide better river health outcomes; • as a member of the Gippsland Lakes Taskforce - a partnership of organisations including the DSE and EGCMA, established to protect and enhanc e the health of the Gippsland Lakes; • through its ongoing leak detection program and water conservation measures, designed to

1 0 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 11 Water Entitlements

East Gippsland Water Entitlement Reporting 2009/10 Supply System Source Annual amount water of taken (ML) EntitlementTotal (ML/year) Volume Unused (ML/year) Any temporary or permanent transfer allof part of Bulk of Entitlement (ML) Any BE or licence in respect the of waterway temporarily or permanently transferred to the Corporation Any amendment to the Bulk Entitlement Any failure the by Corporation to comply with any provision theof Bulk Entitlement Any difficulties experienced or anticipated the by Corporation in complying with the BE and any remedial action taken or proposed Passing Flow Compliance Clause

Bairnsdale Mitchell River 4,801.6 5,902 1,100.4 0 0 Nil Nil Nil Cl. 8 Lakes Entrance Nicholson River 0 2,993 2,993 0 0 Nil Nil Nil Cl. 8 Bemm River Bemm River 17.5 100 82.5 0 0 Nil Nil Nil Cl. 7 Cann River Cann River 41.2 192 150.8 0 0 Nil Nil Nil Cl. 7 Mallacoota Betka River 67.5 330 262.5 0 0 Nil Nil Nil Cl. 7 Bruthen Tambo River 0 313 313 0 0 Nil Nil Nil Cl. 7 Nowa Nowa* Boggy Creek 0 118 118 0 0 Nil Nil Nil Cl. 7 Swifts Creek Tambo River 30.5 224 193.5 0 0 Nil Nil Nil Cl. 7 Buchan Buchan River 24.7 170 145.3 0 0 Nil Nil Nil Cl. 7 Orbost Brodribb River 762.7 2,031 1,268.3 0 0 Nil Nil Nil Cl. 7 / Rocky River Omeo Butchers Creek 56.1 77 20.9 0 0 Nil Nil Nil Cl. 7 Mallacoota Groundwater 117.4 120 2.6 0 0 Nil Nil Nil N/A** Dinner Plain Groundwater 42.1 120 17.9 0 0 Nil Nil Nil N/A** Mitchell System*** Groundwater 45.3 120 74.7 0 0 Nil Nil Nil N/A** Notes: * All infrastructure to enable harvesting from Boggy Creek and the Tambo River at Bruthen has been decommissioned ** Not applicable *** The licence was issued by the licensing authority Southern Rural Water during 2009/10

3,306ML additional water from the river each year, if Transfer of Bulk Entitlement required, subject to strict environmental conditions In June 2010 East Gippsland Water applied to the being met. This water would only be available as ‘winter Minister for Water (under Section 44 of the Water Act fill’, which means it could only be drawn from 1 July to 1989) to transfer 3,306ML of its Nicholson and Tambo 31 October, when Mitchell River flows are higher and River Bulk Entitlements across to the Mitchell River. then only up to a maximum draw rate of 60ML a day. This would allow the Corporation to consolidate The transfer would bring East Gippsland Water’s total water supply infrastructure around a single, reliable, annual bulk entitlement for the Mitchell to 9,200ML, while high quality water supply source to bolster water the mean annual flow of the river is more than 1,300GL security for the next 50 years to some 24,000 people served by the Mitchell River Water Supply This proposal would also be of direct environmental System. This includes customers in the major centres benefit to the Nicholson River, enabling the existing of Bairnsdale, Paynesville and Lakes Entrance. dam infrastructure on that river to be removed and river flows to be restored to natural levels. The proposal follows a thorough analysis to ensure there is minimal risk to the Mitchell River The Minister for Water is expected to make a decision itself, with the DSE and EGCMA both involved in on the Bulk Water Entitlement transfer proposal early in the environmental risk assessment process. 2010/11, following feedback sought via public submissions. The Corporation would be able to access up to

1 2 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 1 3 Office Based Environmental further reducing the corporation’s environmental Impacts impact. The environmental impact of East Gippsland Water’s office-based vehicle fleet has decreased The Corporation continued to review its office- through use of more fuel efficient vehicles and staff based activities, as part of its commitment efforts to reduce vehicle use where possible. to continually improve resource efficiency and lessen its environmental footprint. Total energy usage for the Bairnsdale office increased from 710,764 to 728,558 MJ. This can be attributed to Despite an increase in staff numbers in the Bairnsdale an increase in staff numbers from 44 to 47, requiring office there were notable reductions in paper use additional computers, hot water and other electrical and vehicle emissions during the reporting period, items. Importantly the energy use per FTE staff member continuing a five year downward trend. The corporation actually decreased from 17,769 MJ to 15,501 MJ. has also made the switch to 100% recycled paper

Office Impacts Parameter Quantity Quantity Units 2008/09 2009/10 Energy Energy used per full time employee 17,769 15,501 Megajoules/FTE* Energy per square metre of office space 588.9 577.8 Megajoules/m² Total energy usage 710,764 728,558 Megajoules

Greenhouse gas emissions 262.6 269.2 CO2 Tonnes Waste Production

Total units of waste produced 38.6 67.3 Kg/FTE Total units of waste recycled 1,544 1,591 Kg Paper Use

Units of paper used per employee 13.2 8.2 Reams/FTE Total units of paper used 528 385 Reams Water Consumption

Units of water used per employee 5.58 4.7 kL/FTE Total units of water consumed 223 223 kL Units of water used per square metre of office space 184.8 176.8 kL/ m² Transport

Total energy consumption 875 576 Gigajoules

Total CO2 equivalent 60 34.95 CO2 –e tonnes Energy consumption per employee 22 12.26 GJ / FTE

CO2 equivalent/per employee 1.61 0.74 CO2 - e tonnes / FTE Kilometres travelled per employee 5,097 4,106 km / FTE Total kilometres travelled (not private or commuting) 203,895 192,997 km Percentage of employees using public transport, 12% 9% car pool, cycling or walking to work.

Note: * FTE = Full time equivalent staff

1 2 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 1 3 Corporate Water Consumption In spite of these measures and the energy savings achieved at a number of sites, the Corporation’s Total water consumption was calculated overall level of greenhouse gas emissions increased for the Corporation’s Bairnsdale office in 2009/10 from 8,525 to 8,736 CO2-e tonnes. This and remained unchanged at 223 kL. was mainly due to the new 715ML water storage and Again, because of an increase in staff, the volume water treatment plant at Woodglen, which came of water consumed per FTE staff member in the into operation towards the end of the reporting office decreased from 5.58kL in 2008/09 to 4.7kL period to help ensure long term water security for in 2009/10. Other contributing factors included the some 24,000 customers. These projects increased fixing of leaking and dripping taps and continued use electricity consumption, primarily because of the initial of rainwater for the office’s drought- tolerant garden. need to pump additional water to fill the storage. Water consumption is not calculated for East Gippsland Electricity consumption also rose as a result of Water’s other sites such as depots, water and the Corporation’s Aquifer Storage and Recovery wastewater treatment plants as the majority of water trials, with it used to inject water into bores. they use is utilised as part of their operation processes. In total, electricity usage increased from 7,148

to 7,399 CO2-e tonnes, which accounts for 84% Greenhouse Gas Emissions of East Gippsland Water’s carbon footprint. The Corporation’s Greenhouse Gas Reduction Another factor that led to an increase in greenhouse Strategy, launched in 2008, contains a five year action gas emissions was fuel required for transport. The plan for achieving greenhouse gas reductions. focus on a more proactive approach to equipment Initiatives implemented during the and facility maintenance, together with the sharing reporting period included: of specialist in-house skills across the Corporation’s more remote sites resulted in increased travel for • continuation of a program to replace old and operations staff and therefore fuel useage. This worn pumps with new, energy-efficient models; was offset by benefits such as a reduction in sewer • use of a solar-powered aerator (a Solarbee) in overflows and service disruptions to customers. place of electric-powered aerators at a wastewater treatment plant – saving 100 CO2-e tonnes per year; • switching from diesel to electric irrigation systems and reducing cattle stock numbers to help reduce overall emissions related to sewage treatment and management.

Greenhouse Gas Emissions 2009/10 Electricity Usage Fuel Direct emission ULP / Diesel LPG

CO2-e (tonne) CO2-e CO2-e CO2-e (tonne) (tonne) (tonne)

Water Treatment and Supply 4,646 Sewage Treatment and Management 2,450 21 2 952 Transport 346 21 Other (ie office buildings) 303 Total 7,399 367 23 952

Total Greenhouse Gas Emissions = 8,741 CO2-e tonnes Offsets = 4.82 CO2-e tonnes (greenfleet) Net Greenhouse Gas Emissions = 8,736 CO2-e tonnes

1 4 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 15 Environmental Management System The Corporation maintained certification of its Environmental Management System (ISO 14001) during the reporting period, consistently performing at a high level in the two surveillance audits conducted by external auditors NCS International. This system is invaluable for identifying and minimising East Gippsland Water’s environmental impacts, with significant environmental aspects, both positive and negative, identified.

Significant environmental aspects identified Action taken during 2009/10 to reduce impact 1 July 2009

Direct emissions of methane and CO2 from Sludge surveys and preliminary investigation wastewater treatment and reuse activities works into the design of a replacement contributing to a change in climate. wastewater treatment plant for Bairnsdale. Use of electricity and fuel contributing Despite a number of savings, emissions have increased to a change in climate. overall as a result of a new water treatment plant and 715ML water storage coming on line at Woodglen. These are significant to ensure the long term security of water supplies for some 24,000 customers reliant on the Mitchell River water supply system. Extraction of raw water from bores, creeks and rivers A review of the Corporation’s Water Supply Demand impacting on water available for the environment. Strategies is underway in light of recent climate change, bushfire and population projections. The storage and handling of bulk diesel A significant reduction in bulk diesel storage, and presenting a risk of pollution. a change over from diesel to electric powered irrigation systems at a number of sites, means that this is no longer a significant aspect. Sewer overflows contributing to Proactive root cutting, manhole inspections pollution and public health risks. and CCTV camera inspections of sewers have reduced sewer blockages and overflows. Paper use contributing to deforestation The Corporation has changed over to recycled and a change in climate. paper and continues to reduce paper usage therefore this is no longer a significant aspect. The supply of freshwater to the Macleod Morass The Macleod Morass stakeholder working group providing benefit to the environment. confirmed that the freshwater supply continues to be beneficial to the morass and recommended that this should continue. This has been endorsed by the Environment Protection Authority.

Biosolids Management East Gippsland Water is committed to the sustainable reuse of biosolids. In 2009/10 extensive sludge survey work was conducted at seven wastewater treatment plants to quantify the volume of biosolids that had accumulated in the primary lagoons. This information will be incorporated into a comprehensive Biosolids Management Strategy which will steer East Gippsland Water’s long-term action plan for managing biosolids in an effective, sustainable and cost-effective manner.

1 4 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 15 Geographic Information System (GIS) Asset Management A key component of the Corporation’s Asset Management System for water and sewer East Gippsland Water is responsible for delivering quality infrastructure is the Geographic Information System water and wastewater services to its customers through (GIS). Access to the GIS is available at depots and the operation of an extensive range of physical assets. also on laptop computers so that maps can be The construction and maintenance of these accessed during field operations and out of hours. assets is often carried out in partnership with GIS property data is updated fortnightly to incorporate the engineering consulting firm AECOM. Vicmap changes to land parcel data. Following These assets comprise water and sewerage networks, these updates the linkages between the GIS and and include pipes, pumps, storages, treatment plants East Gippsland Water’s AquaRate billing system and equipment, as well as depots and office buildings. are recalculated. More than 95% of assessments in AquaRate are linked to land parcels in the GIS. The commitments contained in the Corporation’s Asset Management Policy are aimed at achieving a safe, reliable The ongoing process of integrating Conquest, and high quality of service to existing and new customers. the GIS and AquaRate continued during the financial period. When completed, this will provide East Gippsland Water is responsible for ensuring important improvements to pipeline performance that its services meet legislative, stakeholder records and the implementation of timely, efficient and corporate objectives. During the reporting pipeline maintenance and renewal programs. period it continued work to ensure that assets were being managed safely, effectively, efficiently New Assets and Projects and with minimal environmental impact. A number of significant projects were either Key asset management initiatives identified in the progressed or commissioned during the reporting Corporation’s Corporate Plan were progressed period to improve services to customers and during the 2009/10 financial year as outlined below. secure water supplies. These included:

Asset Management System Mitchell River Water Supply System Development Augmentation Program The actions in the Asset Management This program, implemented under the Mitchell Improvement Plan earmarked for 2009/10 River Water Supply System Improvement Strategy, were all completed. Highlights included: addresses long term risks associated with water quality and water security in relation to extreme • completion of an Asset Management weather events, changes in climate and population Plan for all wastewater assets; growth. This system supplies some 24,000 people. • further refinement of the Conquest asset During the reporting period work on major management software package to enable the components of this program included: Corporation to more effectively and efficiently manage the scheduling of work tasks for depot • Woodglen Water Treatment Plant – Construction and other staff - streamlining the process of task was completed and the new plant is providing prioritisation and resource allocation. In particular: improved quality drinking water to customers. It has greatly reduced potential risks to supplies from - improvements were made to the structure algal blooms and bushfires. Operational testing of and integrity of major asset data. the new plant will be completed early in 2010/11 - an automated maintenance schedule and the water supply will also be fluoridated, for pump stations was incorporated to as directed by the Department of Health; ensure the timely, effective completion • Woodglen water storage – construction of a second, of crucial maintenance works. major off-stream storage capable of holding some - development of a pipeline and 715ML was completed, with the facility brought non-pipeline asset register. into service in April 2010. This storage is providing additional security for drinking water supplies to • commencement of a comprehensive asset customers served by the Mitchell River supply system; inspection program to assess the condition, • performance and financial value of assets; Sarsfield – Construction of a new 6ML covered water storage tank to replace the • streamlining of work progress information open basin was completed in June 2010; from capital projects as it appears on East • Major pipeline augmentation projects - work Gippsland Water’s Asset Management System. commenced on two significant water pipeline upgrade projects benefitting customers between Sarsfield and Lakes Entrance, and from Eagle Point to Paynesville and Raymond Island. Some 9km of ageing water mains is being replaced by larger diameter, heavy duty pipeline

1 6 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 1 7 to improve the reliability and efficiency of local Supervisory Control and Data water supply networks, enabling greater volumes of Acquisition (SCADA) drinking water to be delivered to the communities served. The projects, with a combined value of $2.8 During the reporting period East Gippsland Water million, are due to be completed during 2010/11. conducted ongoing upgrade work to its SCADA system • The Wy Yung storage bypass project was commenced at 29 key sites, comprising pump stations and water and completed during 2009/10. Newly installed treatment plants, to enhance its operation and reliability. pipework provides operational versatility and enables In addition, the system was installed at the new water to be bypassed around the storage so that water storage and water treatment plant at maintenance work can be carried out on the facility. Woodglen and the new Sarsfield water storage Linked to the Mitchell River water supply augmentation tank. Work also commenced on rolling out SCADA program is East Gippsland Water’s Aquifer Storage across the Corporation’s wastewater facilities. and Recovery initiative. More details are included in A long-term strategy steering East Gippsland the Research, Development and Adoption of New Water’s future development of this system is Technology section on this page. underway and due for completion during 2010/11. Using remote monitoring, SCADA operates 24 hours Bairnsdale a day and provides monitoring, control and early The Bairnsdale Sewerage Master Plan was completed warning of faults or performance issues at facilities and will be invaluable in helping East Gippsland Water such as water treatment plants, wastewater treatment identify key sewerage asset upgrades required over plants and pump stations. Its objective is to minimise the next 20 years to address projected population operational problems and improve equipment growth. It will also help the Corporation to tackle any reliability, compliance and customer service. other deficiencies or vulnerabilities in the sewerage system, such as from floods, and complements Developer Works and a study into ‘one-in-five year’ flood events. Subdivisions Omeo A total of 220 new allotments were created during Design work commenced on an additional 10ML 2009/10, compared with 432 the previous year. water storage for the town, which is required to The value of owner-financed works involving water ensure the local community has secure drinking water and wastewater assets was in the order of $0.56 supplies well into the future. This will increase the million, compared with $1.1 million in 2008/09. town’s total drinking water storage capacity from five to 15ML, to capitalise on larger river flow events. It Research, Development and follows a number of water scarcity issues in recent Adoption of New Technology years which have resulted from prolonged periods of dry weather, with Butchers Creek ceasing to flow. New technology provides opportunities for East Gippsland Water to achieve improvements in Tambo Bluff Estate efficiency, cost-effectiveness and risk management, along with environmental and/or social benefits. East Gippsland Shire Council is managing the construction of infrastructure for 320 allotments During 2009/10 the Corporation carried out pioneering at Tambo Bluff Estate, including roads, drainage, work for Australia in the use of an aquifer as a electricity, water and wastewater systems. During the storage for drinking water, known as Aquifer Storage reporting period East Gippsland Water continued and Recovery (ASR). Trials using the deep Latrobe to liaise with the Council in relation to the water Aquifer proved very successful, demonstrating its and wastewater components of this project. viability as a massive, natural underground storage for drinking water sourced from the Mitchell River. Sewerage schemes This has great potential in ensuring long-term water security The sewerage scheme for Banksia Peninsula was for the thousands of East Gippsland Water customers, as completed and East Gippsland Water commenced well as the wider community, reliant on the Mitchell. work on detailed designs for a reticulated wastewater collection and treatment system at Bemm River. Using an aquifer reduces the potential for water loss from evaporation and ensures the availability of high quality Both the Banksia Peninsula and Bemm River drinking water, free from risks of algal and airborne schemes are designed to benefit the health of local contamination for supply to customers as required at a waterways and protect public health by removing later date. An aquifer also represents a far more cost- risks associated with septic tank effluent. effective water storage than constructing traditional infrastructure such as open basins, dams and tanks. Following the success of the trials, in June 2010 East Gippsland Water applied to the groundwater regulator, Southern Rural Water, for an operational licence to store up to 500 megalitres of water sourced from the Mitchell

1 6 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 1 7 in the Latrobe Aquifer. A decision on this is expected infiltration of the network caused by leaks in early 2010/11. There are also plans to expand the and illegal stormwater pipe connections; volume of water stored up to 1.2 gigalitres eventually. • commissioning of a new irrigation pump Water would only be drawn from the Mitchell River and rising sewer main upgrade at the during periods of peak flow over the winter months, Orbost Wastewater Treatment Plant to travelling by gravity to the aquifer for storage until improve energy and pumping efficiency. required at a later date. It would then be pumped In addition, approximately $1.7 million worth of water as needed to the nearby water treatment plant at main renewals were carried out across Bairnsdale, Woodglen, before being supplied to customers. Lakes Entrance, Orbost, Omeo and Eagle Point, The Corporation continued its ongoing program to replace ageing, poor-performing infrastructure of upgrade work involving the installation of high to boost the reliability of water services. technology pump control systems and hardware across Expenditure on the replacement of poorly performing a network of some 100 sewer pump stations. This wastewater reticulation network assets totalled some upgrade initiative is designed to maximise the efficiency, $500,000, with customers in parts of Bairnsdale, Lakes performance and reliability of pumping operations. Entrance, Paynesville, Johnsonville and Orbost benefitting. This ‘intelligent pump control system’ (Multi-smart) enables sewerage flows and pump performance at each station to be very accurately and comprehensively People and Culture monitored on an hourly, daily and weekly basis. Importantly, this enables the Corporation to more Our Philosophy readily pinpoint and address potential trouble-spots. East Gippsland Water continues to provide a safe and respectful working environment where the personal and Asset Maintenance and Renewals professional development of staff is actively encouraged. East Gippsland Water has a priority commitment These principles, along with the application of safe to continuously improve the reliability of its working practices, are of the up most importance water and wastewater services and to minimise to enhance the operation of the organisation and service interruptions faced by customers. lead to ongoing improvements in service delivery. The Corporation operates a very proactive regime Risk Management when it comes to inspecting and maintaining its East Gippsland Water applies risk management as underground water and wastewater assets, using the standard management technique in all aspects dedicated teams and the latest in technology. This has of its work. It is used in managing areas such as: brought reductions in the number of pipeline blockages and bursts, which in turn has cut the level of reactive • business operations; work required. The Essential Services Commission • the evaluation and management of new projects; and report for 2009/10 shows that East Gippsland Water • stakeholder management. performs very well compared with the industry average The Corporation’s four executive managers and the for blockages, bursts and customer response. Manager Business Risk and Compliance comprise Work undertaken as part of ongoing programs included: East Gippsland Water’s Risk Management Team, which meets bi-monthly to review and discuss risk • extensive mains cleaning using an air scouring unit issues. Responsibility for the management of risk purchased during the reporting period to ensure is clearly defined within each Executive Manager’s the efficiency of the water supply network and portfolio and the team approach allows for ‘top level’ maintain drinking water quality. Communities visibility across the organisation. The interaction and targeted included Orbost, Newmerella, Nicholson, interdependence of the portfolios is also recognised. Lindenow, Lindenow South, Walpa, Mallacoota, Wy Yung, Eastwood and West Bairnsdale; East Gippsland Water’s risk management system, based on Australian Standard 4360 and incorporating • a closed circuit television (CCTV) inspection the new International Standard, ISO 31000, of sewers in a number of townships – continued to be enhanced during 2009/10. The using a small remote controlled camera Corporation has linked its strategic risk profile - to check for pipe breaks, leaks, tree root directly to its mission and key strategic objectives intrusions and groundwater infiltration; to ensure that key business plan activities are • chemical foaming of sewer pipelines with directed towards mitigating strategic risk issues. known tree root intrusion problems. This The reporting year also saw a review of East Gippsland helps to prevent the re-growth of tree Water’s risk management system by an external roots and the recurrence of blockages; consultant, and participation in the DSE’s water • extensive checks on sections of sewer pipeline sector strategic risk project. in the Eastwood district of Bairnsdale, parts The key systems that currently assist in the management of Lakes Entrance and Dinner Plain. Smoke of risk are: testing was carried out to check for stormwater

1 8 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 1 9 • Drinking Water Quality Management System Staff Training and Achievements • Environmental Management System The Corporation invests significant resources • Occupational Health & Safety Management System, into staff training and development to enhance including the Contractor Safety Management System skills and promote personal advancement. There is a clear focus on safe working practices. • Emergency Incident Response System, which includes the emergency incident response During 2009/10, many staff commenced or manual, business continuity and pandemic plans, successfully completed accredited training at as well as the security risk management plan various levels, as well as pursuing a diverse range of short courses. East Gippsland Water continued • Asset Management System, which includes the to provide ongoing training and assessments for capital works and project planning processes Operations and Maintenance staff in relation to • Financial Management System ,which incorporates Certificate II/III & IV in Water Industry Operations. the Financial Management Compliance Two staff members completed Certificate III in Framework, Accounting Manual and Audit Plan Water Industry Operations. Four Operations and Effective risk management requires the identification Maintenance staff members enrolled in Certificates ll of relevant stakeholders and an understanding of and lll in Water Industry Operations and a significant their needs, issues, concerns and interests. This aids number also received various certificates relating to the development of marketing and communications new work skills and further personal development. strategies, as stakeholder consultation is an Occupational Health and Safety Coordinator, Judd integral part of the risk management process. Boeker, completed his Master of Occupational Health The Corporation is a member of the DSE Water and Safety from the University of Newcastle. Security Continuity Network and regularly reviews measures to manage critical infrastructure. Other key Staff undertaking accredited training achievements during 2009/10 were the development 2009/10 and implementation of a bushfire preparedness, response and recovery plan, and the completion Water Industry Operations Cert II/III 6 of several emergency response exercises. Water Industry Operations Cert IV 6 Diploma of Civil Engineering 1 Public Liability and Property Risk Diploma of Frontline Management 1 Management Audit Diploma of Business Management 2 East Gippsland Water is regularly assessed by its public Financial Services Cert IV 1 liability insurer, Civic Mutual Plus, for public liability and Diploma of Record Keeping 1 property risk management. Previously assessed annually, Diploma Company Directors 3 detailed audits are now conducted every two years, Foundations of Directorship 2 with a brief review carried out during intervening years. Leadership Management Course 2 The Corporation’s last full Public Liability and Advanced Diploma (Accounting) 1 Property Risk Management audit was conducted in March 2010. Adding to the award for excellence in Certified Practising Accountant 1 risk management it received from its insurer Civic Graduate Diploma of Business 1 Mutual Plus (CMP) in the previous financial year, Bachelor of Commerce Degree 1 East Gippsland Water was ranked first by CMP for Bachelor of Business & Commerce Degree (HR) 1 public liability and property risk management in Diploma in Information Technology 1 Victoria, with scores of 97% and 99% respectively. Masters (IT) 1 This performance has translated to reduced OHS Cert IV 1 insurance premiums for the Corporation, qualifying it for the maximum discount available. Masters (OHS) 1 TOTAL 34 As a proactive measure, East Gippsland Water representatives regularly attend best practice forums held by the public liability and property insurer. The Corporation’s Manager Business Risk and Compliance is a member of the consultative committee of the Municipal Association of Victoria Insurance Committee and is the water industry representative on the committee that manages most of the Victorian local government and water corporation property insurance. In addition, in early 2010 East Gippsland Water again facilitated the insurance forum for the Victorian Water Industry. This was the second meeting of the recently established forum, which is planning to meet annually.

1 8 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 1 9 Staff Health and Well Being A number of specific development opportunities have been identified for female staff in the past year The Corporation maintained its commitment to which have seen them move into management roles raising the profile and highlighting the importance of a fit and healthy lifestyle, via its health program Youth and health promotion calendar. This is a key element The Corporation is keen to provide educational of the OHS Management System, linking personal opportunities for school-age people through life and working life through fitness programs. information sessions on water conservation A staff wellbeing workgroup managed a number of and wastewater management issues. key health-related events during the reporting period, It also offers traineeships, work experience and aimed at maximising employee involvement in health and work placements in field operations, business fitness-related initiatives. These are detailed below - administration and Information technology.

Inaugural staff soccer match: Field and office East Gippsland Water signed up to the Gippsland staff came together on the soccer pitch for a friendly Youth Commitment in 2009. This commitment aims match. This led to East Gippsland Water fielding a team to strengthen education, training and employment for an outdoor summer competition. outcomes for the region’s young people and help build a strong skills base to support region’s development. Fit ‘n’ Healthy Steps (Water Industry) The Corporation continues to participate in Monash Challenge: First conducted in 2007/08, this initiative University’s Gippsland Co-operative Education Program. was expanded into a competitive challenge by East The essence of this initiative is to place students in a work Gippsland Water to all Victorian water corporations. program with industry for the life of their undergraduate The three teams entered by the Corporation went on course. One student continued to be engaged by to finish in the top ten across all industries that entered. East Gippsland Water during this reporting period. Movember and Pink Ribbon: Staff raised more Summer vacation employment for students than $2,000 for cancer research during these cancer undertaking degree level studies is also offered. In awareness campaigns, with significant involvement addition the Corporation participates in a graduate and sponsorship coming from East Gippsland Water’s engineering training program, in partnership Bairnsdale-based engineering consultant AECOM. with its consulting engineer AECOM. Australian Red Cross Blood Service: The Corporation maintained active involvement, with staff Cultural Diversity and Indigenous Affairs donating blood through the mobile donor service on all The Corporation respects the rights and culture its visits to Bairnsdale. of East Gippsland’s Indigenous people, as well as embracing those of recent immigrants. Employee Assistance Program: This ongoing It continues to build relationships to improve East Gippsland Water initiative offers staff confidential understanding of issues experienced by the counselling and support for personal and workplace indigenous communities of East Gippsland, issues that may impact on their well being and work while also exploring opportunities for both capability. The Corporation employs the services of a indigenous and migrating individuals. qualified independent counsellor, who regularly visits work sites to discuss any issues with staff in the strictest During the reporting period the Corporation supported confidence. This counsellor also provides Executive local NAIDOC celebrations and Indigenous youth days. Management with an independent overview of the East Gippsland Water also welcomed three water psychological health of the workforce, highlighting any industry specialists from overseas - Egypt, the USA and areas of concern. Ireland - under a professional advancement program Organisational Diversity and coordinated by East Gippsland Water and VicWater. Cultural Recognition To help staff to gain a better understanding of the cultural diversity of the Corporation’s workforce, Women a series of ‘Where do I come from’ presentations East Gippsland Water recognises the importance of were scheduled in June 2010. These provided staff supporting women’s advancement in the workplace originating from abroad with the opportunity to share and is committed to assisting and encouraging information about their background, country of origin personal and professional development. and the cultural differences and similarities. These As part of this commitment the Corporation hosted sessions were held at lunchtime and were voluntary a number of events during the year. A dinner event but extremely well attended by fellow work mates. in November 2009 provided an opportunity for female employees to meet with other women holding senior positions in water industry-related businesses and to network and share experiences. Further events have been scheduled later in 2010.

2 0 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 2 1 Public Administration Values, Staff Satisfaction Employment Principles and Surveys help East Gippsland Water to identify Trademark Behaviours where it is performing well, as well as identifying East Gippsland Water recognises the influence that staff opportunities for improvement in workplace practices. behaviour has on productivity, internal relationships, the In March 2010 the Corporation participated in the work environment, public relations and relationships with State Services Authority (SSA) People in Water customers, clients, contractors and the wider community. Matter Survey to assess staff satisfaction with the In accordance with the principles of Equal Employment organisation and its employment practices. This survey Opportunity and the Victorian Charter of Human is an invaluable tool for measuring staff perceptions in Rights and Responsibilities, all staff are expected relation to employment principles and values, and a to actively promote a workplace that abides by useful comparison with other water sector employees. this Charter and are provided with appropriate East Gippsland Water staff involvement in the survey training to inform them of this obligation. was the highest of any water corporation in the state, and they showed an overall level of satisfaction of 99%. East Gippsland Water also has an identified Equal Opportunity Officer and two trained Equal Workplace Relations Employment Opportunity Contact Officers who can provide informal counselling to staff. East Gippsland Water’s Employee Consultative Committee provides an invaluable means of To complement its code of conduct for staff, which is communication and information flow within the consistent with the Code of Conduct for Victorian Public Corporation. Its primary role is to monitor the Sector Employees, the Corporation has also established contribution made by staff to the Corporation’s a set of trademark behaviours that staff have identified performance and its adherence to Key Performance as important for the effective functioning of the business. Indicators as identified in the East Gippsland Water These behaviours have been built into East Gippsland Certified Agreement. It also provides feedback on Water’s annual review process and will continue to be the the quality of staff training and participates in the focus of organisational development in the coming years. identification of continuous improvement programs. Staff receive updates on the Victorian Charter of Staff continued to operate effectively and efficiently Human Rights and all new staff receive an introduction under the East Gippsland Water Certified Agreement to this and the Equal Opportunity Act as part of in 2009/10. their overall induction to East Gippsland Water. Workforce Data As at June 30, 2010 the Corporation employed 83 people. The breakdown of staff was as follows:

Staff classification Total Male Female 2008/09 2009/10 2008/09 2009/10 2008/09 2009/10

Managing Director and Executive staff 5 5 5 5 0 0

Technical and Administrative staff (full time) 36 40 19 24 17 16

Technical and Administrative staff (part time & temp) 3 3 2 0 1 3

Field staff (full time) 35 35 33 33 2 2

Total 79 83 59 62 20 21

Occupational Health & Safety East Gippsland Water works closely with contractors to ensure safety is a key focus in all contract works Staff, contractor and public safety are a top priority for and that these works adhere to the Corporation’s East Gippsland Water across all areas of its business Contractor Safety Management System. East Gippsland and are integral to its delivery of reliable and efficient Water continued to lead the steering group of the East services across the region. Staff safety awareness Gippsland Occupational Health and Safety Network begins at induction and is maintained throughout in 2009/10. It also maintained its involvement in the the duration of employment via formal and industry- Victorian Water Industry OH&S Network, which specific training including on-the-job, industry and receives significant support from the Victorian Water nationally accredited training programs. With an Industry Association. The importance of this network emphasis on working cost-effectively during the was recognised officially in 2007/08 when a Victorian reporting period, the Corporation increased its use of Water Association OH&S Steering Committee (now competent, qualified staff to deliver training, as well as termed ‘Task Group’) was created. East Gippsland involving local training institutions and contractors. Water’s Manager Business Risk and Compliance chairs this Committee and the industry OH&S Network.

2 0 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 2 1 The network provides a valuable forum for sharing • Development of an electronic chemical industry issues and solutions and has proved very management system which is much more active and worthwhile since its formation in 2002. accessible and user-friendly than the previous hard copy, chemical register. Significant achievements in OH&S for 2009/10 included: • Continued use of extensive OH&S, audit • Continued certification of the Corporation’s and training plans to address all safety issues, OH&S Management System against AS/NSZ including the development and implementation 4801:2001, with successful completion of the of annual OH&S strategic plans. Maintenance of two six-monthly certification surveillance audits close collaboration with safety partners, service by our certification body, NCS International. providers and other utility asset owners. • Continuation of the corporate health and • Achievements against Key Performance Indicators wellbeing program, with an emphasis on the embedded into the Certified Agreement, to changes individuals can make independent of the reflect OH&S commitment and performance. workplace to achieve health gains. The success of this was highlighted by the Fit ‘n’ Healthy Steps (Water Industry) Challenge, with a number of staff recording terrific personal outcomes. • 570 days ‘lost-time injury free’, with an increase in hazards reported and a reduction in incidents demonstrating the effectiveness of East Gippsland Water’s OH&S systems and the conscientiousness of staff. Occupational Health and Safety Statistics

Number of Incidents/Lost-Time Incidents A high number of incidents does not necessarily reflect The corporation’s success in safety continues to badly on the organisation. It is the type of incident, be benchmarked against incidents reported, their severity of injury and the personal consequences that are severity, rectification and trends from previous years. important. Medical treatment incidents are those that During 2009/10 there were nine reported incidents, result in treatment by a registered medical practitioner, of which two were not injury-related. All incidents not just referral to a doctor. Lost-time incidents are those were investigated to determine how a repeat could be that result in a person being absent from work for at least prevented. one full shift due to a workplace injury. The safety system also encourages staff to report hazards, with an increase in hazard reporting recorded during the reporting period.

Incidents 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 Total incidents reported 25 15 13 16 12 9 Medical treatment incidents 6 7 1 1 1 0 Lost-time incidents 2 4 3 0 1 1 Working Days Lost 174 16 21 0 2 3

Average Time Lost Average Time Lost is the average time lost from work, per incident, in days. For the purpose of this indicator 12 months (220 days) is the maximum time for any single incident. It is calculated against total incidents recorded, as well as against lost time incidents. Average Time Lost = Number of Working Days Lost Number of Incidents in the Period

Average Time Lost 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10

Days lost per total incidents 6.96 1.07 1.62 0.00 0.17 0.33

Days lost per lost-time incident 87.00 4.00 7.00 0.00 2.00 3.0

2 2 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 2 3 During 2009/10 East Gippsland Water Water Quality complied with this requirement.

Drinking Water Quality System Chloroacetic Acids East Gippsland Water is responsible for providing drinking Chloroacetic acids are produced in drinking water as water that meets the requirements of the Safe Drinking by-products of the reaction between chlorine and Water Act 2003, the Safe Drinking Water Regulations naturally occurring organic material in water. Monitoring 2005 and the East Gippsland Water Customer Charter. for three types of chloroacetic acids is undertaken in areas where chlorine based disinfectants are used: The Corporation recognises that the delivery of safe water to the community is fundamental. • monochloroacetic acid – limit ≤ 0.15 mg/L This is achieved by effective management of • dichloroacetic acid – limit ≤ 0.1 mg/L water quality from catchment to tap, including reliable water treatment, risk management and • trichloroacetic acid – limit ≤ 0.1 mg/L responsiveness to customer expectations. During 2009/10 the chloroacetic acid This commitment includes operating a Drinking Water limits were not exceeded Quality Management System, which has certification in accordance with the Safe Drinking Water Act 2003, Trihalomethanes with regulatory audits undertaken by a certified auditor Trihalomethanes can be present in drinking water from NCS International. East Gippsland Water’s as a result of chlorine based disinfection. Chlorine opening of a $13.5 million water treatment plant at can react with naturally occurring organic material in Woodglen during 2009/10 provides a major boost to the water to produce trihalomethanes. The limit for the long-term security of drinking water supplies and trihalomethanes in drinking water is ≤ 0.25 mg/L. quality for some 24,000 people reliant on the Mitchell River water supply system. This includes the major During 2009/10 this limit was not exceeded. towns of Bairnsdale, Paynesville and Lakes Entrance. Aluminium Drinking Water Quality Aluminium may be present in water through natural leaching from soil and rock, or from the use of aluminium- The Safe Drinking Water Act 2003, in conjunction with based coagulants in the treatment of water. East the Safe Drinking Water Regulations 2005, makes Gippsland Water uses aluminium-based coagulants in the provision for the supply of safe drinking water and treatment of water in Buchan, Cann River, Bemm River, outlines requirements for management of risk. Swifts Creek, Omeo, Orbost and Mallacoota. The new East Gippsland Water complied fully with the Woodglen WTP, which services Bairnsdale, Paynesville, Act and Regulations during the reporting period Lakes Entrance and other smaller communities also in its provision of drinking water services. utilises aluminium based coagulants in the treatment process. There is no health-based guideline for aluminium, The Corporation monitors drinking water quality in however this parameter is monitored to ensure that the some 30 communities, incorporated in 19 Water Quality treatment process is working effectively and efficiently. Zones and its Annual Water Quality Report is available in The limit for aluminium in drinking water is ≤ 0.2 mg/L. hard copy and on its website (www.egwater.vic.gov.au). Each Water Quality Zone encompasses a source water During 2009/10 this limit was not exceeded. entry point after disinfection and sampling sites are normally customer taps. In accordance with the Act and Turbidity Regulation, designated customer taps are sampled at Turbidity is caused by the presence in water of fine specified frequencies for seven regulated parameters. suspended matter such as clay, silt, small particles, A brief explanation of each parameter is given below. plankton, algae and other microscopic organisms. High turbidity can result in water having a ‘muddy’ or ‘dirty’ More detailed explanations can be obtained from appearance. Turbidity is reported in ‘Nephelometric the Australian Drinking Water Guidelines 2004 and Turbidity Units’ or NTU. By way of comparison, it World Health Organisation Guidelines for Drinking would be difficult to see through a glass of water with Water Quality. Refer to figures 1-7 on pages 24- a turbidity of more than 60 NTU, while ‘crystal clear’ 27 for summaries of water quality performance water usually has a turbidity of less than 1 NTU. for the following regulated parameters - The limit for turbidity in drinking water is “the E.coli 95% upper confidence limit of the mean of samples Escherichia coli (E.coli) is a bacteria found in large of drinking water collected in any 12 month period numbers in the faeces of humans and other warm must be less than or equal to 5.0 NTU.” blooded animals and serves as a reliable indicator * (refer to Table 1 on page 24 for an of recent faecal contamination of water. The Safe explanation of the statistical analysis) Drinking Water Regulations 2005 require that at least 98% of drinking water samples taken At the end of the 12 month period of 2009/10, in any 12 month period contain no E.coli. all sites were compliant for the turbidity limit.

2 2 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 2 3 Table 1: Water Quality Reporting Standards Minimum sampling Parameter frequency per water Standard quality zone Microbiological organisms At least 98% of all samples of drinking water collected Escherichia coli (E.coli) One sample per week in any 12 month period contain no Escherichia coli per 100 millilitres of drinking water

Chlorine based chemicals Not relevant for chlorine dioxide treatment (Swifts Creek, Nowa Nowa, Bemm River) or UV treatment (Dinner Plain) Monochloroacetic acid One sample per month 0.15 milligrams per litre of drinking water (100% of all samples) Dichloroacetic acid One sample per month 0.1 milligrams per litre of drinking water (100% of all samples) Trichloroacetic acid One sample per month 0.1 milligrams per litre of drinking water (100% of all samples) Trihalomethanes One sample per month 0.25 milligrams per litre of drinking water (100% of all samples) Chemicals derived from disinfection or treatment with ozone Not relevant to EGW – no ozone disinfection Bromate One sample per month 0.02 milligrams per litre of drinking water Formaldehyde One sample per month 0.5 milligrams per litre of drinking water

Aluminium based chemicals Relevant for full water treatment plants – Omeo, Orbost and Mallacoota Aluminium One sample per month 0.2 milligrams per litre of drinking water (acid-soluble) 95% upper confidence limit* of the mean of samples of Turbidity One sample per week drinking water collected in any 12 month period must be less than or equal to 5.0 Nephelometric Turbidity Units t(a) x s * 95% Upper Confidence Limit = mean + √number of turbidity samples Where s = standard deviation t(a) = student t statistic where: degrees of freedom are number of samples – 1 and probability is 0.05. Figure 1: E.coli Compliance Number of Minimum Maximum % samples with Water Quality Zone Samples (E.coli/100 mL) (E.coli/100 mL) zero E.coli Bairnsdale 73 0 0 100% Bemm River 52 0 0 100% Buchan 52 0 0 100% Cann River 54* 0 0 100% Dinner Plain 52 0 0 100% Eagle Point / Paynesville 52 0 0 100% Kalimna 53** 0 0 100% Lindenow 52 0 0 100% Lindenow South 52 0 0 100% Mallacoota 52 0 0 100% Merrangbaur 53 0 0 100% Metung 53 0 0 100% Nicholson / Swan Reach 53 0 0 100% Nowa Nowa 52 0 0 100% Omeo 52 0 0 100% Orbost 52 0 0 100% Sarsfield / Bruthen 52 0 0 100% Sunlakes / Toorloo 58*** 0 0 100% Swifts Creek 52 0 0 100% * issues with the transport of samples within the holding period during February 2010 resulted in the need to resample twice during the financial year, at the start and the end of March. ** Kalimna, Metung, Swan Reach / Nicholson and Merrangbaur were sampled 53 times due to there being 53 Wednesdays in 2009/10. *** Additional sampling undertaken due to the influx of visitors during the summer months of December, January and February.

2 4 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 2 5 Figure 2: Monochloroacetic Acid Compliance Number of Minimum Maximum Water Quality Zone % Compliance Samples (mg/L) (mg/L) Bairnsdale 12 0.005 0.005 100% Bemm River 12 0.005 0.005 100% Buchan 12 0.005 0.005 100% Cann River 12 0.005 0.005 100% Eagle Point / Paynesville 12 0.005 0.005 100% Kalimna 12 0.005 0.005 100% Lindenow 12 0.005 0.005 100% Lindenow South 12 0.005 0.005 100% Mallacoota 12 0.005 0.005 100% Merrangbaur 12 0.005 0.005 100% Metung 12 0.005 0.005 100% Nicholson / Swan Reach 12 0.005 0.005 100% Nowa Nowa 12 0.005 0.005 100% Omeo 12 0.005 0.005 100% Orbost 12 0.005 0.005 100% Sarsfield / Bruthen 12 0.005 0.005 100% Sunlakes / Toorloo 12 0.005 0.005 100% Swifts Creek 12 0.005 0.005 100%

Figure 3: Dichloroacetic Acid Compliance Number of Minimum Maximum Water Quality Zone Samples (mg/L) (mg/L) % Compliance Bairnsdale 12 0.005 0.031 100% Bemm River 12 0.005 0.005 100% Buchan 12 0.005 0.014 100% Cann River 12 0.005 0.005 100% Eagle Point / Paynesville 12 0.007 0.013 100% Kalimna 12 0.005 0.042 100% Lindenow 12 0.008 0.018 100% Lindenow South 12 0.005 0.023 100% Mallacoota 12 0.005 0.005 100% Merrangbaur 12 0.005 0.016 100% Metung 12 0.005 0.005 100% Nicholson / Swan Reach 12 0.005 0.013 100% Nowa Nowa 12 0.005 0.017 100% Omeo 12 0.005 0.016 100% Orbost 12 0.005 0.012 100% Sarsfield / Bruthen 12 0.006 0.017 100% Sunlakes / Toorloo 12 0.005 0.037 100% Swifts Creek 12 0.005 0.005 100%

2 4 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 2 5 Figure 4: Trichloroacetic Acid Compliance Number of Minimum Maximum Water Quality Zone % Compliance Samples (mg/L) (mg/L) Bairnsdale 12 0.019 0.045 100% Bemm River 12 0.005 0.005 100% Buchan 12 0.006 0.016 100% Cann River 12 0.005 0.007 100% Eagle Point / Paynesville 12 0.027 0.050 100% Kalimna 12 0.010 0.057 100% Lindenow 12 0.011 0.024 100% Lindenow South 13 0.018 0.030 100% Mallacoota 12 0.005 0.005 100% Merrangbaur 12 0.005 0.050 100% Metung 12 0.005 0.007 100% Nicholson / Swan Reach 12 0.005 0.020 100% Nowa Nowa 12 0.008 0.055 100% Omeo 12 0.007 0.023 100% Orbost 12 0.005 0.019 100% Sarsfield / Bruthen 12 0.014 0.032 100% Sunlakes / Toorloo 12 0.005 0.055 100% Swifts Creek 12 0.005 0.005 100%

Figure 5: Trihalomethanes Compliance Number of Minimum Maximum Water Quality Zone % Compliance Samples (mg/L) (mg/L) Bairnsdale 12 0.042 0.140 100% Bemm River 12 0.007 0.028 100% Buchan 12 0.020 0.094 100% Cann River 12 0.017 0.054 100% Eagle Point / Paynesville 13 0.066 0.130 100% Kalimna 12 0.039 0.130 100% Lindenow 12 0.029 0.063 100% Lindenow South 12 0.044 0.069 100% Mallacoota 12 0.034 0.110 100% Merrangbaur 12 0.026 0.110 100% Metung 12 0.039 0.068 100% Nicholson / Swan Reach 12 0.029 0.054 100% Nowa Nowa 12 0.056 0.150 100% Omeo 12 0.010 0.054 100% Orbost 12 0.021 0.081 100% Sarsfield / Bruthen 12 0.043 0.080 100% Sunlakes / Toorloo 12 0.007 0.140 100% Swifts Creek 12 0.007 0.027 100%

Figure 6: Aluminium Compliance Number of Minimum Maximum Water Quality Zone % Compliance Samples (mg/L) (mg/L) Bemm River 12 0.010 0.030 100% Buchan 13 0.030 0.110 100% Cann River 12 0.010 0.170 100% Mallacoota 12 0.010 0.020 100% Omeo 12 0.030 0.160 100% Orbost 12 0.010 0.050 100% Swifts Creek 12 0.010 0.120 100%

2 6 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 2 7 Figure 7 : Turbidity Compliance Number of Minimum Maximum Comply Water Quality Zone 95% UCL Samples (NTU) (NTU) (Yes / No) Bairnsdale 72 0.5 7.3 0.92 Yes Bemm River 52 0.4 0.9 0.76 Yes Buchan 53 0.1 1.1 0.30 Yes Cann River 54 0.2 0.4 0.27 Yes Dinner Plain 52 0.1 0.6 0.81 Yes Eagle Point / Paynesville 53 0.5 0.8 0.55 Yes Kalimna 54 0.5 1.4 0.70 Yes Lindenow 52 0.2 0.6 0.81 Yes Lindenow South 52 0.3 0.5 0.63 Yes Mallacoota 52 0.3 0.4 0.75 Yes Merrangbaur 53 0.4 0.6 0.85 Yes Metung 53 0.3 1.0 0.61 Yes Nicholson / Swan Reach 53 0.4 0.8 0.71 Yes Nowa Nowa 52 0.5 0.6 0.62 Yes Omeo 53 0.1 14.0 0.93 Yes Orbost 52 0.1 1.0 0.38 Yes Sarsfield / Bruthen 52 0.4 1.8 1.13 Yes Sunlakes / Toorloo 58 0.4 0.8 0.83 Yes Swifts Creek 52 0.4 0.7 0.89 Yes

mg/L represents milligram per litre, or 1 part per million Gram – 1000 grams in a kilogram Milligram is 0.001 of a gram Microgram is 0.000001 of a gram

Water Quality Compliance Water Quality Performance Incidence Indicators During the year, three issues arose with the For detailed water quality results and performance regular sampling program, of which two reports, refer to the East Gippsland Water: Water required Section 22 notifications. Quality Annual Report 2009/10 available from the Corporation’s Bairnsdale office (133 Macleod Street) The two issues requiring Section 22 notifications and from the website www.egwater.vic.gov.au occurred at Bairnsdale and Mallacoota. At Bairnsdale a large rainfall event during February led to a compromised water quality sampling result at the aerodrome storage tank due to roof run off. A flushing program and subsequent resampling confirmed that there was no ongoing issue with the water quality within the vicinity of the tank. Further works have been carried out at the aerodrome tank to prevent a recurrence of this issue. At Mallacoota a rainfall event during February impacted on a sampling point that was subsequently found to be underneath a bird roosting tree. Again, flushing and resamplng demonstrated that there was no ongoing issue. The sample point has been relocated. A third issue arose at Cann River, where samples taken at the end of February were analysed outside the 24 hour holding period. Subsequent resampling analysed within the holding period confirmed that there were no issues with the water quality. Steps have been taken to address the logistical challenge of transporting samples from isolated areas of East Gippsland to the water quality laboratory in Melbourne.

2 6 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 2 7 Customer Service Follow-up Communication, A random sample of customers reporting incidents to the Corporation are subsequently contacted by Consultation and East Gippsland Water to assess their experience with the service received. This follow-up is conducted by Education phone on a monthly basis and is invaluable in gauging how efficiently and effectively staff have responded Communication and to incidents, the quality of customer service provided Consultation and any aspects requiring improvement. The results East Gippsland Water utilises a wide range of are considered at the monthly Board meetings. communication and consultation methods to During the reporting period 1,634 service-related engage with its domestic and business customers, incidents were recorded. Of the 137 customers because they are spread across a vast geographic contacted, 97% were at least satisfied with the service area spanning some 21,000 square kilometres. provided by the Corporation, compared with 99% The methods used include: in 2007/08. The percentage very satisfied was 89%, • media releases, advertorials, advertisements and compared with 93%% in 2008/09, while 3% indicated articles published in local newspapers, on the that they were dissatisfied, compared with 1%. Corporation’s website and broadcast on local TV and radio, often inviting public feedback Where customers were dissatisfied, their incidents were further investigated, with the • publicity in the Corporation’s Pipeline newsletter aim of reaching a satisfactory resolution. (targeted at a selection of key stakeholders) and its On Tap news sheet (mailed to all account Customer Satisfaction Survey holders), again often inviting public comment Annual customer satisfaction surveys are a very • information brochures covering important tool to measure the perception of East a wide range of topics Gippsland Water services, including where the Corporation is delivering services well and any • the operation of Customer Reference/Advisory areas that may require action and improvement. Committees (Groups) where appropriate In July 2009 a random sample of 600 customers from • monthly customer service follow-up calls districts across the region were interviewed over the • monthly Regional Visits/Consultative Meetings telephone. Bartley Consulting, an independent research where customers are invited to discuss East consultancy, was engaged to conduct the survey. Gippsland Water issues with senior management The results showed the overall level of satisfaction • an annual, independently conducted customer with East Gippsland Water remaining high and satisfaction survey to assess how well consistent, with 98% of customers contacted Corporation services are being delivered. at least satisfied with the service they received – an increase of 1% on the previous year. Consultation is conducted on specific issues and proposed projects as well as draft East Gippsland Water Even more encouraging, the number very strategies and policies, where there is a significant satisfied increased from 40 to 45%. potential impact on customers and the community. The percentage of customers at least satisfied with Community Reference Groups the quality of their drinking water remained unchanged East Gippsland Water established the Bemm River for 2009 compared with 2008, at 96%, while the Sewerage Scheme Community Reference Group to proportion very satisfied increased from 47% to 53%. help keep the local community informed about progress Contributing factors included recently upgraded water on a proposed sewerage scheme for the township. storages at Wy Yung (serving the Bairnsdale area), The group held its inaugural meeting on 19 August Sunlakes (for Lakes Entrance and Kalimna) and Eagle 2009 and has been proving invaluable in helping the Point (supplying Eagle Point, Paynesville, Raymond Island Corporation to address any questions or concerns raised and Newlands Arm), along with an ongoing water mains by the community. It will continue to meet on a regular cleaning program covering East Gippsland townships. basis for the term of the sewerage scheme project. Regional Consultative Meetings The Corporation schedules monthly community consultative meetings at regional centres across the region including Omeo, Lakes Entrance, Orbost and Mallacoota. These are advertised in advance in the local press, with customers invited to meet with the Managing Director and senior management to discuss any issues relating to East Gippsland Water.

2 8 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 2 9 Annual Customer Satisfaction Survey % of customers at least satisfied % of customers very satisfied 2008 2009 2008 2009 Overall satisfaction 97 98 40 45 Water supply 98 97 54 60 Wastewater services 99 99 70 70 Water quality 96 96 47 53 Customer accounts 99 97 57 61 The price 84 82 21 20 Information provided 95 91 34 38 Note: The survey is conducted in July each year and considers East Gippsland Water’s performance over the previous 12 months.

Water Efficiency and Permanent Water Information brochures Saving Rules East Gippsland Water’s extensive brochure range The Corporation maintained a comprehensive includes customer service and environmental communication program to remind customers information, as well as water conservation, about the application of Permanent Water Permanent Water Saving Rules, water restrictions Saving Rules across the region. and information about the Corporation’s water and wastewater systems. These are available at East East Gippsland Water reiterated the importance of Gippsland Water offices and on its website. adhering to the Rules, to encourage good practice in water efficiency. It also highlighted water saving incentives available to customers, such as the Victorian Web Site Government’s Water Smart Gardens and Homes East Gippsland Water’s website www.egwater. Rebates Scheme. Key messages, along with water vic.gov.au aims to provide customers with easy to saving tips, were publicised in media releases and access information about the Corporation and its adverts, as well as in the Corporation’s Pipeline and services, as well as direct links to other water-related On Tap newsletters distributed to key stakeholders websites. Following a major revamp of design and and all account holders. They were also given content, a new-look site was launched in 2009/10. prominence on East Gippsland Water’s website. Sponsorship Utilising the local media, in February 2009 East East Gippsland Water provides financial, merchandise and Gippsland Water requested Omeo customers to in-kind sponsorship to a number of local organisations implement Voluntary Water Savings in addition to and community groups for activities with a focus on Permanent Water Saving Rules. This was to help water use, conservation and environmental sustainability. conserve drinking water supplies in the area following an unprecedented heatwave and reduction in flows in the Sponsorship provided during the local waterway. The request was removed at the end reporting period included: of April following significant rainfall in the catchment. • East Gippsland Corporate Teams Triathlon

Customer Charter • Two primary schools and two secondary colleges to support their participation in the A revised version of East Gippsland Water’s RACV Energy Breakthrough Challenge Customer Charter came into operation on 1 July 2009, after being approved by the Essential Services • NAIDOC Week celebrations Commission and adopted by the Corporation’s Board • Mallacoota Cup Soccer Tournament the previous month. This outlines East Gippsland Water’s commitments and obligations to customers. • Noweyung annual garden show It is available, as well as a summary, in hard copy • Sale to Sea Disability Kayak Challenge or electronically on the Corporation’s website. • Children’s Week with Kilmany Newsletters/news sheets Uniting Care, Bairnsdale Three issues of East Gippsland Water’s Pipeline newsletter were published during the reporting period. Promotional items This is designed to inform key stakeholders of significant East Gippsland Water provides promotional Corporation activities and projects. It is mailed out, items to the community which are practical and is also available on the Corporation’s website and and carry a water conservation message. over the counter at East Gippsland Water offices. Three issues of the On Tap news sheet were Water Trailer East Gippsland Water’s mobile drinking water published in 2009/10. This is mailed out to all trailer creates a highly visible and positive image for account holders with their bill, to inform them about the Corporation at community events. Operating East Gippsland Water services and projects.

2 8 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 2 9 under the slogan Preserving our environment – was open to primary and secondary schools, Naturally, it is available free of charge to community including P-12 colleges, throughout the region. and not-for-profit regional organisations. The name for the Eisteddfod was the brainchild of During 2009/10 the water trailer attracted more than 20 students and teachers from St Joseph’s Primary School bookings and was utilised at a variety of events including in Orbost, while Lindenow Primary School came up community festivals, major sporting events and field days. with the support slogan Put the plug in and perform. Performances needed to focus on one of two Education themes; the importance of water and water East Gippsland Water employs a range of strategies conservation or the environmental importance to communicate key messages to all age groups in the of protecting our rivers, streams and lakes. community. The emphasis is on using water efficiently, Lindenow Primary School finished overall winners. awareness that water is a finite resource, the impact of The event will be staged again in 2010/11. extreme weather events and changes in climate, and the drive for long term security of drinking water supplies. Community events and tours A major message is the Corporation’s commitment East Gippsland Water once again participated in to environmental benefit and sustainability as a the Summer by the Sea Program coordinated by fundamental requirement of all its operations in Coast Action/Coastcare, which toured a number of relation to water, wastewater and water recycling. coastal towns in the region during January 2010. Water Education in Schools As part of this the Corporation ran an information East Gippsland Water is a member of the stand to publicise water efficiency tips, its water and Victorian Water Educators’ Network, which wastewater services and major initiatives to ensure is invaluable for sharing ideas and strategies the long-term security of drinking water supplies for to advance water education in schools. customers. It was a great opportunity for customers to discuss water-related issues with staff face-to- The Corporation responded to a number of requests face. A total of ten towns were targeted, with more from schools for presentations and tours of infrastructure than 500 people visiting the stand in Mallacoota, such as water and wastewater treatment plants, an increase of some 100 on the previous year. covering issues such as wastewater treatment, water recycling and the importance of using water efficiently. The Corporation handled numerous requests for tours of its infrastructure and gave presentations East Gippsland Water staff registered for the covering various aspects of its activities. Those to CSIRO Scientist in Schools program in the reporting benefit included Paynesville Probus, Nagle College, period, which enables local schools to tap into Lakes Entrance Secondary College, St Mary’s Primary the scientific and mathematical expertise of these School, Wesley College (Melbourne), Methodist Ladies individuals. A number of local schools have taken College (Melbourne), Lindenow Primary School, up this offer to assist with their education programs Lindenow & District Progress Association, Orbost with significant benefits to the students. Lochiel House, Orbost Secondary College, Nungurner Primary School and Bairnsdale Homeschoolers. National Water Week National Water Week in October each year provides a focus for water sustainable issues at national, state and regional level. As in previous years East Gippsland Water promoted the National Water Week Primary Schools Poster Competition, receiving entries from a number of schools across the region. Students from Noorinbee, Cann River and Buchan primary schools came out as East Gippsland region winners, with five year old Chelsea Filmer from Noorinbee Primary School also scooping first prize in the Year Prep category for Victoria. Her memorable poster included the message ‘Tank-you for saving our water’, highlighting the importance of water efficiency.

Wicked Water Eisteddfod Six schools made it through to the grand final of the East Gippsland Wicked Water Eisteddfod – the first event of its kind to be held in the region. This provided a fitting climax to National Water Week. The water-themed event, run jointly by East Gippsland Water and East Gippsland Waterwatch,

3 0 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 31 Smart Water Fund Management of Social The Corporation helped publicise the Victorian Government’s Smart Water Fund and most notably and Economic Impacts grants of up to $100,000 available to East Gippsland The Corporation employs a triple bottom line approach individuals, community groups and businesses to its decision making and strategic planning. This developing innovative water saving initiatives. recognises that the provision of water and wastewater services has the potential for both positive and Showerhead exchange program negative social, economic and environmental impacts East Gippsland Water continued to operate a showerhead exchange program, providing the In relation to social sustainability: opportunity for residential customers to swap • East Gippsland Water is committed to the provision inefficient showerheads for three-star rated, of high quality drinking water to all communities, water-efficient models, free of charge. not just the larger population centres. As part of East Gippsland Water’s Corporate Licence • It is committed to a 100% environmentally beneficial, with the EPA, this program continued to also include affordable and sustainable reuse of wastewater. tourist accommodation operators. The Corporation is committed to work closely with the region’s • The new water treatment plant at Woodglen, tourism industry to improve water conservation. which came into operation in 2009/10, will have a positive impact on local communities, tourism and future development. It will secure Trigger nozzle exchange program the quality and quantity of water supplies The Corporation participated in the Victorian to the growing populations of Bairnsdale, Government’s state-wide trigger nozzle exchange Paynesville, Lakes Entrance and surrounds. program, launched towards the end of 2009/10. This provides the opportunity for customers to exchange • The revegetation and passive use of East Gippsland up to two twist-action hose nozzles for the more Water land for public purposes is another focus water-efficient trigger types, free of charge. for enhancing environmental and social capital. The Corporation is actively involved with Water Leaks, Exceptional Circumstances Landcare groups in rehabilitating wetlands. East Gippsland Water policy allows for dispensation on high water usage accounts in instances • East Gippsland Water’s Permanent Water Saving where customers cannot reasonably have been Rules include watering times adjusted to meet the expected to be aware of a water leak. needs of the region’s significant older age group. Each case is considered on merit and $13,467 was WaterSmart Rebates adjusted on accounts during the reporting period. East Gippsland Water supports the Victorian To be eligible, customers must have engaged a licensed Government’s Water Smart Gardens and Homes plumber to confirm the leak, the circumstances Rebate Scheme. During the reporting period this surrounding it and the repair undertaken. included using the On Tap news sheet (mailed to all account holders) and Pipeline newsletter (distributed to key stakeholders) to publicise the initiative.

WaterSmart Rebates 2009/10 Rebate Type Applications Applications Applications Approved Received Granted $ Rainwater Tank 12 23 $1,800 Large Rainwater Tank 24 27 $21,900 Greywater System 1 2 $500 Tank to Toilet 0 0 $0 Basket Offer 241 248 $9,920 Dual Flush Toilet 11 13 $520 Shower Rose 6 6 $100 Cleaning Device 0 0 $0 Water Conservation Audit 0 0 $0 Not For Profit Organisations 0 0 $0 Total 295 319 $31,640

3 0 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 31 Community concessions provided East Gippsland Water provides concession relief to some members of the community as part of its community services obligations.

Value of Community Service Obligation provided 2008/09 2009/010 Concessions to pensioners $916,404 $1,098,139

Rebates to Not-For-Profit Organisations under the Water & Sewerage Rebate Scheme $132,769 $132,187

Utility Relief Grant Scheme payments $7,857 $10,538

Water Concessions on Life Support machines - Haemodialysis $0 $0

Hardship Relief Grant Scheme (Sewerage Connection Scheme) $0 $0 Total $1,057,030 $1,240,864

3 2 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 3 3 Financial Summary Operating Revenue and Expenditure: 5 Year Comparative Analysis

2005/06 2006/07 2007/08 2008/09 2009/10 Last 2 Year Details Movement Actual Actual Actual Actual Actual Comparisons $M $M $M $M $M $M Revenue

Water Fees and Charges 7.118 7.836 8.204 10.018 10.575 0.557 Wastewater Fees and Charges 7.357 8.235 9.165 9.619 11.061 1.442 Government Contributions 0.000 0.105 0.900 0.000 0.000 0.000 Interest Earned 0.397 0.241 0.125 0.105 0.088 -0.017 Other Revenue 1.006 0.821 0.929 1.948 2.077 0.129 Developer Capital Contributions 3.772 2.666 2.559 1.773 0.743 -1.030 Total Revenue 19.650 19.904 21.882 23.463 24.544 1.081 Expenditure

Operations and 7.266 7.064 7.726 7.623 8.241 0.618 Maintenance Expenses Administration Expenses 3.639 4.220 4.795 5.566 5.026 -0.540 Interest Payments 0.000 0.011 0.793 1.285 2.023 0.738 Other expenses 0.660 0.267 0.676 0.567 2.500 1.933 Depreciation 4.837 4.953 5.323 5.951 6.382 0.431 Total Expenditure 16.402 16.515 19.313 20.992 24.172 3.180 Surplus for the period 3.290 3.389 2.569 2.471 0.372 -2.099

Revenue A change to tariff charges approved by the Essential Services Commission increased revenue from Water and Wastewater Fees and Charges. Lower than expected water volume sales impacted on the final revenue figures. A slowdown in the development of new subdivisions also resulted in a reduction in revenue from Developer Capital Contributions.

Expenditure The commissioning of major new capital projects - as part of the five year, $67 million capital infrastructure program - increased ‘Depreciation’. The disposal of major assets associated with the construction of the Woodglen Water Treatment Plant led to a significant increase in ‘Other Expenses’. The rise in borrowings to fund asset development during the year also brought an increase in interest payments.

The coming year (2010/11) The budget for the 2010/11 financial year has been prepared taking into account a fall in customer water demand. Operating expenditure has been adjusted to bring it in line with the Water Plan. It is expected that these changes will return the Corporation to a normal surplus position for 2010/11.

3 2 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 3 3 Comparative Actual to Budget Report 2009/10 2009/10 Actual Budget Variance Details $M M % Revenue Water Fees and Charges 10.57 11.26 -6.13% Wastewater Fees and Charges 11.06 10.77 2.69% Interest Earned 0.09 0.05 71.29% Other Revenue 2.08 1.48 40.20% Developer Capital Contributions 0.74 1.53 -51.29% Total Revenue 24.54 25.09 -2.19% Expenditure Operations & Maintenance Expenses 8.24 7.68 7.29% Administration Expenses 5.03 4.73 6.28% Interest Payments 2.02 2.01 0.90% Other expenses 2.50 1.82 37.14% Depreciation 6.38 6.75 -5.48% Total Operating Expenditure 24.17 22.99 5.14% Surplus for the period 0.37 2.10 - 83%

Comments on variances Other Payments – Increases in this expenditure Exceeding 5% were due to the disposal of major emergency works assets at the Woodglen Water Treatment Plant site Revenue ($1.678M) in preparation for the commissioning Water Fees and Charges – Revenue of Woodglen Water Treatment Plant itself.. from these was 6.13% below budget due to Depreciation – Budgeted depreciation was based on a reduction in water demand and sales. the completion of an infrastructure asset revaluation Interest Earned – Higher than anticipated interest during the reporting period, however this revaluation rates resulted in greater income for the period. was postponed until the 2010/11 financial year. Other Revenue – Change of Scheme Accounting Policy saw recognition of total scheme revenue at the time of completion of construction schemes instead of when payment instalments are made. Two major schemes at Gilsenens Drive in Metung and at Banksia Peninsula were completed during the year, which added to this revenue. Developer Capital Contributions – A slow down in developer activity throughout the region reduced revenue from gifted/donated assets.

Expenditure Operations & Maintenance Expenses – Greater costs were incurred in preparation for the commissioning of the Woodglen Water Treatment plant, because of scouring of the main water supply pipeline. There was larger than expected electricity useage pumping water to fill the second water storage at Woodglen and as part of the Aquifer Storage and Recovery trial. Administration Expenses – The requirement to complete Water Demand / Supply Strategies for all water systems earlier than planned was the main contributor to this expenditure increase.

3 4 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 3 5 Other Information National Competition Policy Competitive neutrality seeks to enable fair competition Freedom of Information between government and private sector businesses. Any advantages or disadvantages that government The Freedom of Information Act 1982 allows public access businesses may experience, simply as a result of to documents held by government entities, which includes government ownership, should be neutralised. right of access to documents held by East Gippsland Water. East Gippsland Water continues to implement and A decision to release information is made by apply this principle in its business undertakings. an Authorised Officer. Freedom of Information requests need to be made in writing to: Financial Management Compliance Framework Mr Brett Millington, Freedom of Information Officer, The Financial Management Compliance Framework East Gippsland Water, was implemented on 1 July 2003. The Department PO Box 52, of Treasury and Finance developed the framework in Bairnsdale, Victoria, 3875. response to the Government’s initiative of promoting responsible financial management in the public sector. The telephone number is 1300 720 700 and enquiries The framework provides a vehicle for Department can also be e-mailed to [email protected]. of Treasury and Finance to monitor and report The fee for requests from 1 July 2010 is $23.90. on East Gippsland Water’s financial management obligations. The annual certification for 2009/10 During the reporting period no requests for information assessed the Corporation’s compliance at 100%. were made to the Corporation. Subsequent Events Whistleblowers’ Protection Act 2001 No significant matters arose between the end of the 2009/10 financial year and this Annual The main objective of the Whistleblowers Protection Report going to print which will have a material Act 2001 is to encourage and facilitate the making impact on East Gippsland Water’s financial of disclosures of improper conduct or detrimental position in subsequent reporting periods. action by public officers and public bodies. Further information is available from the Victorian Contracts Ombudsman’s website at www.ombudsman.vic.gov.au East Gippsland Water engages AECOM to Within the terms of reference of the provide design and project management services Whistleblowers Protection Act, no disclosures and has done so for a number of years. were made to East Gippsland Region Water The Corporation and AECOM have a contractual Corporation, or to the Ombudsman, for public arrangement in place for engineering services covering interest determination or investigation. the provision of feasibility studies, detailed design, A copy of East Gippsland Water’s Whistleblower’s project management and construction supervision. This Protection Act Policy is included in this Annual arrangement is independently assessed, benchmarked and validated every three years to ensure that East Report. See Appendix A (pages 78 - 85) Gippsland Water receives value for money and that Implementation of the Victorian the appropriate governance issues are upheld. Industry Participation Policy Following an independent, external review the contract was extended in November 2009 for four years. During 2008/09, the Corporation did not commence or complete any contracts applicable to the requirements The agreement is monitored against ongoing of the Victorian Industry Participation Policy. and annual performance indicators. There are provisions in the agreement and the Corporation’s Compliance with the Building policies to ensure conflict of interest issues are avoided and the Board of East Gippsland Water Act also actively oversees the ongoing arrangement. During the reporting period East Gippsland Water More than 90 per cent of the work complied with the building and maintenance completed by the AECOM Bairnsdale office provisions of the Building Act 1993. is on East Gippsland Water projects. It also completed an assessment of all its buildings The total paid in fees to AECOM for design, project for compliance with the Building Code of Australia, management and construction work undertaken on specifically in relation to essential safety measures. behalf of the Corporation in 2009/10 was $3.8 million. The contractual arrangement is non exclusive and the Corporation may also engage other consulting engineers who have expertise in specialist areas.

3 4 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 3 5 Major Contracts East Gippsland Water did not enter into any contracts greater than $10 million during the reporting period.

Consultants to the Corporation Consultants costing below $100,000 in the 2009/10 financial year Number – 41 Total cost of consultants engaged - $596,140 Consultants costing over $100,000 in the 2009/010 financial year Number – 7

Consultant Project Total cost Expenditure Future 2009/10 commitment

Technology One Upgrade to finance, HR and payroll system $226,121 $126,121 $100,000

Thinking Windows Upgrade to billing and customer $389,963 $219,963 $170,000 service IT system Thiess Hydro-geological monitoring for Aquifer $337,575 $307,575 $30,000 recharge project and hydrographic monitoring for bulk water entitlements compliance Terra Firma Compaction testing on second Woodglen $160,230 $160,230 $0 water storage during construction Parasyn Consulting Upgrade work to Supervisory Control $893,376 $873,376 $20,000 And Data Acquisition (SCADA) system FYB Implementation of TRIM electronic $196,060 $196,060 $0 document management system Tardis Cultural heritage monitoring $241,670 $226,670 $15,000

Energy and Water Ombudsman Victoria Customers dissatisfied with any aspect of interaction or service performance from a utility within Victoria may seek assistance from the Energy and Water Ombudsman Victoria. This is an independent body funded by member utilities. During the reporting period East Gippsland Water received five complaints that were referred to a higher-level contact in the Corporation for resolution and two complaints that were subsequently investigated by the Energy and Water Ombudsman Victoria. All the complaints were resolved satisfactorily. Availability of Other Information The following information is available on request in relation to East Gippsland Water, subject to the Freedom of Information Act 1982: • details of shares held in subsidiaries; • details of changes in prices, fees, charges, rates and levies charged by East Gippsland Water; • major external reviews; • official overseas travel; • further details on assessments and measures undertaken to improve the occupational health and safety of employees (covered in the People and Culture section of this Annual report).

3 6 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 3 7 Performance Statements 2009/10 EAST GIPPSLAND REGION WATER CORPORATION Financial Performance Indicators

Variance 2008-09 2009-10 2009-10 (+) Favourable Code Performance indicator Result Result Target (-) Unfavourable F1 Long Term Profitability Earnings before net interest and 1.78% 1.83% 1.84% -0.7% tax ÷ average total assets Owner’s Investment F2 0.84% 0.15% 0.79% -80.7% Net profit after tax ÷ average total equity F3 Long Term Financial Viability Total debt (including finance 10.38% 15.62% 13.52% -15.6% leases) ÷ total assets F4 Liquidity and Debt Servicing (Interest Cover) Earnings before net interest and tax 3.09 2.06 2.07 0.0 expense ÷ net interest expense (times) F5 Immediate Liquidity and Debt Servicing (Cash Cover) Cash flow from operations before 7.83 3.61 6.27 -2.7 net interest and tax payments ÷ net interest payments (times)

Operating Efficiency F6 Water supply Reticulation – costs per Volumetric Measure

Operating, Mtc and Admin Costs $3,928,000 $4,313,000 $3,315,000 ML Volume throughput for the year 4,991 4,720 5,215 Recurrent Cost $/ML $787 $913.77 $636 -44% F7 Water supply Treatment – costs per Volumetric Measure

Operating, Mtc and Admin Costs $2,429,000 $2,658,000 $3,565,000 ML Volume throughput for the year’ 4,991 4,720 5,215 Recurrent Cost $/ML $487 $563.14 $684 +18% F8 Wastewater Reticulation – costs per Volumetric Measure

Operating, Mtc and Admin Costs $3,006,000 $3,165,000 $2,765,000 ML Volume throughput for the year 2,718 2,675 2,921 Recurrent Cost $/ML $1,106 $1,183 $947 -17% F9 Wastewater Treatment – costs per Volumetric Measure

Operating, Mtc. and Admin.Costs $3,003,000 $3,130,000 $2,765,000 ML Volume throughput for the year 2,370 2,153 2,921 Recurrent Cost $/ML $1,267 $1,454 $947 -54%

3 6 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 3 7 EAST GIPPSLAND REGION WATER CORPORATION Service and Environmental Performance Indicators

Performance Indicator Variance (Complying with Essential Services 2008-09 2009-10 2009-10 (+) Favourable Code Commission definitions) Result Result Target (-) Unfavourable Water supply interruptions Number of customers receiving 1 S1 2,204 1,524 1,700 +10% unplanned interruptions in the year Number of customers receiving 2 S2 144 201 442 +55% unplanned interruptions in the year Number of customers receiving 3 S3 13 39 no target* N/A unplanned interruptions in the year Number of customers receiving 4 S4 7 20 no target* N/A unplanned interruptions in the year Number of customers receiving 5 S5 0 0 no target* N/A unplanned interruptions in the year Number of customers receiving > 5 S6 0 0 no target* N/A unplanned interruptions in the year * Targets were not set as a service standard by the ESC, nor required in the 2009/10 Corporate Plan Interruption time indicators S7 Average duration of unplanned water 109 72 125.9 +43% supply interruptions (minutes) minutes minutes minutes S8 Average duration of planned water 107 154 114.6 -35% supply interruptions (minutes) minutes minutes minutes

Restoration of water supply ** Unplanned water supply interruptions no R1 91% 97% N/A restored within 3 hours target* Unplanned water supply interruptions R2 96% 100% 97.5% +3% restored within 5 hours Unplanned water supply interruptions R3 98% 100% 99.3% +1% restored within 12 hours * Targets were not set as a service standard by the ESC, nor required in the 2009/10 Corporate Plan ** Unplanned water supply interruptions expressed as a percentage of the total number of unplanned interruptions

Reliability of sewerage collection services indicators R4 Sewer spills – Priority 1 (number)*** 0 3 no target* N/A R5 Sewer spills – Priority 2 (number) **** 62 47 no target* N/A R6 Sewer spilt from emergency relief 0.0016 0.01319 no target* N/A structures and pumping stations (% of volume transported) R7 Sewerage blockages (per 100km) 17.1 15.5 18.9 +18% * Targets were not set as a service standard by the ESC, nor required in the 2009/10 Corporate Plan *** Sewer Spills from reticulation and branch sewers Priority 1 are those that result in: . A public health concern . Significant damage to property . A discharge to a sensitive receiving environment . A discharge from a sewer pipe that is 300mm diameter or greater, or . A flow >80L/min **** Sewer spills from reticulation and branch sewers. Priority 2 spills are minor failures to contain sewerage within the sewerage system. They are also any spill affecting several users that result in minor property damage or a surcharge outside a building that does not pose a health risk.

Containment of sewer spillages R8 Average time to attend a sewer 25.7 26.7 30.2 +12% spill and blockage (minutes) R9 Average time to rectify a 75.4 85.5 76.9 -11% sewer blockage (minutes) R10 Sewerage spills contained 98.39 98% 100 -2% within 5 hours (%)

3 8 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 3 9 EAST GIPPSLAND REGION WATER CORPORATION Service and Environmental Performance Indicators (continued)

Performance Indicator Variance (Complying with Essential Services 2008-09 2009-10 2009-10 (+) Favourable Code Commission definitions) Result Result Target (-) Unfavourable Customer complaints indicators Water quality complaints C1 1.30 1.19 6.87 +83% (per 1000 customers) Water supply reliability complaints C2 0.34 0.14 7.68 +98% (per 1000 customers) Sewerage service quality and reliability C3 1.93 1.88 5.40 +65% complaints (per 1000 customers) Affordability complaints C4 0.00 0.00 0.38 +100% (per 1000 customers) C5 Billing complaints (per 1000 customers) 0.22 0.05 0.89 +95% C6 Pressure complaints (per 1000 customers) 1.10 0.24 1.14 +79% Sewage odours complaints C7 0.28 0.28 0.51 +44% (per 1000 customers) C8 Other complaints (per 1000 customers) 2.37 1.14 2.45 +54%

Total of all Facilities E2 Reuse Indicator Effluent reuse (volume) 100% 100% 100% 0% Biosolids reuse (dry mass) N/A N/A 0% N/A E3 Sewage Treatment Standards Number of analyses complying with 100% 100% 100% 0% licence agreements as % of samples

Bairnsdale Sewage Treatment Standards Number of analyses complying with 100% 100w% 100% 0% licence agreements as % of samples Paynesville Sewage Treatment Standards Number of analyses complying with N/A N/A N/A N/A licence agreements as % of samples Lindenow Sewage Treatment Standards Number of analyses complying with 100% 100% 100% 0% licence agreements as % of samples Lakes Entrance Sewage Treatment Standards Number of analyses complying with N/A N/A N/A N/A licence agreements as % of samples Metung Sewage Treatment Standards Number of analyses complying with N/A N/A N/A N/A licence agreements as % of samples Dinner Plain Sewage Treatment Standards Number of analyses complying with N/A N/A N/A N/A licence agreements as % of samples Omeo Sewage Treatment Standards Number of analyses complying with N/A N/A N/A N/A licence agreements as % of samples

3 8 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 3 9 EAST GIPPSLAND REGION WATER CORPORATION Service and Environmental Performance Indicators (continued)

Performance Indicator Variance (Complying with Essential Services 2008-09 2009-10 2009-10 (+) Favourable Code Commission definitions) Result Result Target (-) Unfavourable Orbost Sewage Treatment Standards Number of analyses complying with N/A N/A N/A N/A licence agreements as % of samples Mallacoota Sewage Treatment Standards Number of analyses complying with N/A N/A N/A N/A licence agreements as % of samples Cann River Sewage Treatment Standards Number of analyses complying with N/A N/A N/A N/A licence agreements as % of samples Performance Report Variances Explained

F2 F9 This was a result of reduced demand, therefore water Costs per ML have increased due to the effect of sales and reduced revenue from gifted assets affected decreased volumes and unchanged fixed operating costs. revenue targets. Depreciation from commissioning major capital projects in advance, increased borrowing costs S1 and asset disposals significantly increased expenses. The increase in the number of customers having one The impact of both these factors affected net profit. unplanned water interruption is a result of unplanned water supply interruptions occurring in more densely F3 populated areas of the region compared to previous Long term financial viability reports a below budget years. The number of water supply interruptions has variance as a result of timing and project cost differences decreased by 29% over the last 3 years however to budget in the capital infrastructure investment the number of customers interrupted has only program. decreased by 19%. This indicates the variability and uncertainty of these interruptions having the greatest impact in areas where the water network F6 is concentrated by a large number of customers. Higher than planned water supply reticulation operations and maintenance costs were incurred in preparation for the commissioning of the Woodglen S3 and S4 Water Treatment plant which involved major main The total number of customers receiving 3 and 4 pipeline cleaning. Higher than expected electricity unplanned interruptions in the year increased from 20 usage was incurred as a result of pumping water to fill in 2008/09 to 59. This was due to improvements in the second water storage at Woodglen and as part of the reporting of results and the deteriorating condition the Aquifer Storage and Recovery trial. Costs per ML of some water mains infrastructure. Mains which have also increased as a result of decreases in water caused multiple disruptions are programmed for repair demand but with unchanged fixed operating costs. or replacement in future capital works programs.

F7 S7 and S8 The focus on reticulation maintenance and reduced Improved maintenance planning supported the outcome water sales resulted in less than budgeted expenses for of fewer unplanned interruptions over this period. treatment. Non-compliance with East Gippsland Water targets on Planned Interruptions due to increased proactive maintenance activities such as air scouring. F8 This affects 3 KPIs - Average planned customer Costs per ML have been impacted due to the minutes off water supply, Average frequency of affect of decreased volumes and unchanged fixed planned water supply interruptions and Average operating costs. Reduced inflow to the Wastewater duration of planned water supply interruptions. Treatment Plants has been attributed to the impact of water savings initiatives and changes to customer water use leading to reduced flows into sewer.

4 0 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 4 1 R4 E3 There were three Priority 1 spills in 2009/10 compared In March 2008, the Corporation’s 10 separate EPA to none in the previous year. These were isolated licences for each wastewater treatment plant were incidents and proactive maintenance programs replaced with a single Corporate Licence which sets are underway to reduce such occurrences. limits for Bairnsdale and Lindenow only. Bairnsdale and Lindenow achieved 100% compliance. R5 There were 15 less Priority 2 spills in 2009/10 years. This favourable result is indicative of the Corporation’s proactive maintenance program to reduce sewer spills.

R7 There were 18% less sewerage blockages from target for blockages per 100km due to the Corporation’s proactive sewer maintenance programs.

R8 The average time to attend a sewer spill and blockage was better by 3.5 minutes or 12% from target as a result of the Corporation’s ongoing effort to improve customer service.

R9 This variance against target was caused mainly as a result of several single sewer collapses which took time to repair because of major excavations. 80% of all other blockages were rectified within 75 mins of notification.

C1 There were significantly fewer water quality complaints due to the Corporation’s proactive water infrastructure cleaning program and improved water quality monitoring.

C8 Other reported complaints were significantly lower this year as a result of the Corporation’s ongoing drive to improve customer service.

4 0 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 4 1 East Gippsland Region Water Corporation Statement of Performance Statutory Certification for 2009/10

We certify the attached Statement of Performance of East Gippsland Regional Water Corporation has been prepared in accordance with standing direction 4.2 of the Financial Management Act 1994. We further state that, in our opinion, the information set out in the Statement of Performance is presented fairly for the actual results achieved for the financial year against pre determined performance targets for these indicators, and an explanation of any significant variance between the actual results and performance targets.

We are not aware of any circumstances which would render any particulars included in the Statement to be misleading or inaccurate.

Gail Morley Chairperson East Gippsland Region Water Corporation

Les Mathieson Managing Director East Gippsland Region Water Corporation

Rob Carlesso Chief Finance & Accounting Officer East Gippsland Region Water Corporation

18 August 2010

4 2 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 4 3 4 2 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 4 3 4 4 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 4 5 Financial Report For the Year Ended 30 June 2010 Table of Contents Statement of Comprehensive Income 46

Balance Sheet 47 Statement of Changes in Equity 48 Cash Flow Statement 49 Notes to the Financial Report Note 1 Summary of Significant Accounting Policies 50

Note 2 Financial Risk Management 56 Note 3 Operating Statement – Disclosures 58 Note 4 Income Tax Expense 59 Note 5 Cash and Cash Equivalents 59 Note 6 Receivables 59 Note 7 Inventories 60 Note 8 Property, Plant & Equipment 60 Note 9 Intangible Assets 64 Note 10 Payables 64 Note 11 Provisions 65 Note 12 Interest Bearing Liabilities 66 Note 13 Deferred Tax Liabilities 66 Note 14 Contingent Liabilities 66 Note 15 Superannuation 66 Note 16 Lease Commitments 68 Note 17 Contributed Capital 68 Note 18 Asset Revaluation Reserve 68 Note 19 Accumulated Surplus 68 Note 20 Reconciliation of Surplus from Ordinary Activities to Cash provided by Operating Activities 68 Note 21 Capital Commitments 69 Note 22 Reconciliation of Cash 69 Note 23 Auditors Remuneration 69 Note 24 Executive Officers Remuneration 69 Note 25 Responsible Persons Related Disclosures 70 Note 26 Financial Instruments 71 Note 27 Operating Results of Retail Operations 74 Note 28 Events Subsequent to Balance Date 74 Certification of Financial Statements 75 Audit Certificate 76

4 4 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 4 5 EAST GIPPSLAND REGION WATER CORPORATION Statement of Comprehensive Income for the year ended 30 June 2010

Note 2010 2009 $000 $000 Revenue from operating activities 1(b) Service Charges 3(a) 16,284 14,584 Metered Charges 5,979 5,722 Trade Waste Charges 197 155 Developer Contributions 3(a) 742 1,772 Other Revenue 3(a) 1,165 1,050 Total Revenue from operating activities 24,367 23,283

Revenue from non-operating activities Other Income 3(a) 89 79 Interest Income 88 104 Total Revenue from non-operating activities 177 183

Total Revenue 24,544 23,466

Expenses Borrowing Costs 1(c) 2,023 1,285 Depreciation 3(b) 5,850 5,538 Amortisation - Intangible Assets 3(b) 532 414 Employees 3(b) 6,426 5,851 Environmental Contribution 1(q) 823 823 Suppliers & Materials 6,841 6,516 Loss on Assets Disposed 8(b) 1,678 566 Total Expenses 24,173 20,993

Net Result before tax 371 2,473

Income Tax Expense 1(r), 4 102 1,010

Net Result for the Period 19 269 1,463

Other Comprehensive Income 0 0

Income Tax Relating to Comprehensive Income 0 0

Total Comprehensive Income for the year 269 1,463

The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

4 6 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 4 7 EAST GIPPSLAND REGION WATER CORPORATION Balance Sheet as at 30 June 2010

Note 2010 2009 $000 $000 Current Assets Cash and Cash Equivalents 5, 22 615 2,670 Receivables 6 5,511 5,215 Prepayments 245 226 Inventories 1(i), 7 489 490 Total Current Assets 6,860 8,601

Non Current Assets Receivables 1(h), 6 636 514 Property, Plant and Equipment 8 206,166 187,017 Intangible Assets 9 1,276 733 Capital Works in Progress 8 8,599 14,992 Total Non Current Assets 216,677 203,256

Total Assets 223,537 211,857

Current Liabilities Payables 10 3,501 5,998 Interest Bearing Liabilities 12 3,000 5,000 Funds Held in Trust 7 75 Short-Term Provisions 11(a) 1,477 1,296 Deferred Revenue - Developer Deposits 1(b) 457 214 Total Current Liabilities 8,442 12,583

Non Current Liabilities Provisions 11(b) 134 137 Interest Bearing Liabilities 12 32,000 17,000 Deferred Tax Liabilities 13 7,360 7,258 Total Non Current Liabilities 39,494 24,395

Total Liabilities 47,936 36,978

Net Assets 175,601 174,881

Equity Contributed Capital 17 95,694 95,243 Reserves 18 9,781 9,781 Accumulated Surplus 19 70,126 69,857 Total Equity 175,601 174,881

The above Balance Sheet should be read in conjunction with the accompanying notes.

4 6 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 4 7 EAST GIPPSLAND REGION WATER CORPORATION Statement of Changes in Equity for the year ended 30 June 2010

Contributions Accumulated by Owners Reserves Funds Total Note $000 $000 $000 $000

Balance as at 1 July 2008 94,103 9,781 68,394 172,278

Total Comprehensive Income for the year as reported in the 2009 financial report 0 0 1,463 1,463

Transactions with State in its capacity as owner Contributions by owners 1,140 0 0 1,140

Balance as at 30 June 2009 95,243 9,781 69,857 174,881

Total Comprehensive Income for the year 0 0 269 269

Transactions with State in its capacity as owner Contributions by owners 451 0 0 451

Balance as at 30 June 2010 95,694 9,781 70,126 175,601

The above statement of Changes in Equity should be read in conjunction with the accompanying notes.

4 8 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 4 9 EAST GIPPSLAND REGION WATER CORPORATION EAST GIPPSLAND REGION WATER CORPORATION Statement of Changes in Equity for the year ended 30 June 2010 Cash Flow Statement for the year ended 30 June 2010

Contributions Accumulated 2010 2009 by Owners Reserves Funds Total $000 $000 Note $000 $000 $000 $000 Inflows / Inflows / Note (Outflows) (Outflows) Cash flows from Operating Activities Balance as at 1 July 2008 94,103 9,781 68,394 172,278 Receipts Total Comprehensive Income for Rates, Tariffs, Fees and Charges 22,044 18,841 the year as reported in the 2009 Interest 88 104 financial report 0 0 1,463 1,463 Other 1,254 1,062 Transactions with State in its GST Collected 3,100 1,979 capacity as owner Contributions by owners 1,140 0 0 1,140 Payments Interest Paid (1,953) (1,230) Employees (6,106) (5,499) Balance as at 30 June 2009 95,243 9,781 69,857 174,881 Suppliers and Others (inclusive of GST) (13,568) (7,560) Total Comprehensive Income for the year 0 0 269 269 Net Cash Inflow from Operating Activities 20 4,859 7,697

Transactions with State in its Cash flows from Investing Activities capacity as owner Payment for Property, Plant and Equipment (20,360) (18,876) Contributions by owners 451 0 0 451 Payments for Intangibles (550) (276) Contributions for Capital Works 404 947 Balance as at 30 June 2010 95,694 9,781 70,126 175,601 Trust Monies Received 7 125 Trust Monies Paid (75) (96) The above statement of Changes in Equity should be read in conjunction with the accompanying notes. Proceeds from Sale of Property, Plant and Equipment 209 328

Net Cash Outflow from Investing Activities (20,365) (17,848)

Cash flows from Financing Activities Proceeds from contributions by Owners 17 451 1,140 Net Proceeds from Borrowings 13,000 8,000

Net Cash Inflow from Financing Activities 13,451 9,140

Net Increase in Cash and Cash Equivalents (2,055) (1,011)

Cash and Cash Equivalents at the Beginning of Financial Year 2,670 3,681

Cash and Cash Equivalents at end of Financial Year 5, 22 615 2,670

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

4 8 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 4 9 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report for the year ended 30 June 2010 Note 1: Summary of Significant Accounting Policies (a) Basis of Accounting

General This financial report includes separate financial statements for East Gippsland Region Water Corporation as an individual reporting entity. This financial report is a general purpose financial report that consists of a Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and notes accompanying these statements. The general purpose financial report has been prepared in accordance with Australian Accounting Standards (AAS's), Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board and the requirements of the Financial Management Act 1994 and applicable Ministerial Directions. This financial report has been prepared on an accrual and going concern basis.

Accounting Policies Unless otherwise stated, all accounting policies applied are consistent with those of the prior year. Where appropriate, comparative figures have been amended to accord with current presentation and disclosure made of material changes to comparatives.

Functional and Presentation Currency Items included in this financial report are measured using the currency of the primary economic environment in which East Gippsland Region Water Corporation operates ("the functional currency"). The financial statements are presented in Australian dollars, which is East Gippsland Region Water Corporation's functional and presentation currency.

Classification between Current and Non-Current In the determination of whether an asset or liability is current or non-current, consideration is given to the time when each asset or liability is expected to be realised or paid. The asset or liability is classified as current if it is expected to be turned over within the next twelve months, being the Corporation's operational cycle - see Note 1(o) for a variation in relation to employee benefits.

Rounding Unless otherwise stated, amounts in the report have been rounded to the nearest thousand dollar.

Historical Cost Convention These financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets, certain classes of property, plant and equipment, and investment property.

Critical Accounting Estimates The preparation of financial statements in conformity with AAS's requires the use of certain critical accounting estimates that affect the application of accounting policies and the amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. It also requires management to exercise its judgement in the process of applying the entity's accounting policies.

Financial Statement Presentation The entity has applied the revised AASB 101 Presentation of Financial Statements which became effective on 1 January 2009. The revised standard requires the separate presentation of a Statement of Comprehensive Income and a Statement of Changes in Equity. All non-owner changes in equity must now be presented in the statement of comprehensive income. As a consequence, the Corporation had to change the presentation of its financial statements. Comparative information has been re-presented so that it is also in conformity with the revised standard.

Changes in Accounting Policies The accounting policies are consistent with those of the previous year, unless otherwise stated. Where necessary, comparitives have been amended to facilitate comparison.

(b) Revenue Recognition Revenue is recognised at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances and duties and taxes paid.

Service and Metered Charges Rate/tariff and service charges are recognised as revenue when levied or determined. Water usage charges are recognised when the product is provided through metered water volume measure. Wastewater volume measure is based on the metered water volume measure for Dinner Plain. Meter reading is undertaken progressively during the year. An estimation, calculated by multiplying the number of days since the last reading by each customer’s average water volume measure usage, is made at the end of each accounting period in respect of water meters which have not been read at balance date. This amount is included as accrued income for the reporting period. All tariffs for Water and Wastewater include the Environmental Contribution.

Developer Contributions / Fees paid by developers Fees paid by developers to connect new developments to the Corporation’s existing water supply and sewerage systems are recognised as revenue when the construction work and connection to the system has been completed and the contributions are received. In cases where the Corporation has entered into conditional agreements with developers to meet outfall and headworks charges, revenue is recognised at the date of agreement. Developer deposits received for construction works are recognised as deferred revenue until works are completed. Assets acquired at no cost to East Gippsland Region Water Corporation (developer’s capital contributions) are recognised as revenue upon their acceptance by East Gippsland Region Water Corporation for maintenance in perpetuity, and are recorded at their fair value in the financial statements.

Government Grants and Contributions Government grants and contributions are recognised as operating revenue on receipt or when an entitlement is established, whichever is the sooner, and disclosed in the statement of comprehensive income as government grants and contributions. However, grants and contributions received from the Victorian State Government, which were originally appropriated by the Parliament as additions to net assets or where the Minister for Finance and the Minister for Water have indicated are in the nature of owners’ contributions, are accounted for as Equity – Contributions by Owners.

5 0 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 5 1 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report for the year ended 30 June 2010

Interest Interest income is recognised using the effective interest rate method. Lease Income Income from operating leases (i.e. rentals) is recognised on a straight-line basis over the lease term. (c) Borrowing Costs Borrowing costs are recognised as expenses in the period in which they are incurred. Borrowing costs include interest on bank overdrafts and short-term and long-term borrowings, amortisation of discounts or premiums relating to borrowings, amortisation of ancillary costs incurred in connection with the arrangement of borrowings and finance lease charges.

(d) Recognition and Measurement of Assets Property, plant and equipment represent non-current assets comprising land, buildings, water infrastructure, sewerage and drainage infrastructure, heritage assets, plant, equipment and motor vehicles, used by the Corporation in its operations. Items with a cost or value in excess of $500 and a useful life of more than one year are recognised as an asset. All other assets acquired are expensed. Where assets are constructed by the Corporation, the cost at which they are recorded includes an appropriate share of fixed and variable overheads.

Assets acquired at no cost or for nominal consideration by the Corporation are recognised at fair value at the date of acquisition.

Repairs and Maintenance Routine maintenance, repair costs and minor renewal costs are expensed as incurred. Where the repair relates to the replacement of a component of an asset and the cost exceeds the capitalisation threshold, the cost is capitalised and depreciated. Measurement of Non-Current Physical Assets All non-current physical assets except land under declared roads and water infrastructure assets are recognised initially at cost and subsequently revalued at fair value less accumulated depreciation and impairment in accordance with the requirements of Financial Reporting Directive (FRD) 103D. Revaluations are conducted using management expertise and are classified as a managerial revaluation.

Plant, equipment and motor vehicles are measured at fair value For the plant, equipment and vehicles asset class, where the Corporation is able to demonstrate that there is no evidence that a reliable market-based fair value (or other fair value indicators) exist for these assets, depreciated replacement cost could represent a reasonable approximation of fair value. Water infrastructure assets are measured at cost less accumulated depreciation and any accumulated impairment losses. These assets comprise substructures or underlying systems held to facilitate the harvesting, storage, treatment and transfer of water to meet customer needs. They also include infrastructure assets that underly sewage and drainage systems. For Whole-of-government reporting at 30 June 2009 and 30 June 2010, water infrastructure assets are measured at fair value less any accumulated depreciation and any accumulated impairment losses, in accordance with FRD 121 Infrastructure Assets (Water/Rail). During 2009, the Minister for Finance issued two new FRD’s in relation to non-current physical assets that are relevant to water infrastructure assets. FRD 103D Non-current Physical Assets (“FRD 103D”), as revised in March 2009, requires all non-current physical assets to be measured using the revaluation model unless the entity has received prior written approval of the Minister for Finance to measure the assets at cost. FRD 103D is applicable for reporting periods commencing on or after 1 July 2008, superseding FRD 103C. However, in recognition of the initial workload and heavy demand on resources within a relatively tight timeframe for implementation, transitional dispensation is available to relieve measurement at fair value at the entity reporting level for 2008-2009 financial year until the temporary exemption is withdrawn. The temporary exemption is made under FRD 121 Infrastructure Assets (Water/Rail) (“FRD 121”). During the year, this temporary exemption was extended until the financial year ending June 2011 at the direction of DTF.

Revaluation of Non-Current Physical Assets Revaluation increments are credited directly to equity in the revaluation reserve net of tax effect, except that, to the extent that an increment reverses a revaluation decrement in respect of that class of asset previously recognised as an expense in determining the net result, the increment is recognised as revenue in determining the net result. Revaluation decrements are recognised immediately as an expense in the net result, except that, to the extent that a credit balance exists in the revaluation reserve in respect of the same class of assets, they are debited to the revaluation reserve. Revaluation increases and revaluation decreases relating to individual assets within a class of property, plant and equipment are offset against one another within that class but are not offset in respect of assets in different classes. Revaluation reserves are not transferred to accumulated funds on derecognition of the relevant asset. Land Assets were revalued in the 2007/08 finanicial year, in accordance with FRD 103C. All fixed assets excluding land are depreciated on the straight-line basis over the estimated useful lives of the assets to the Corporation.

(e) Impairment of Non-current Assets Impairment of Assets Goodwill and intangible assets with indefinite useful lives are tested annually as to whether their carrying value exceeds their recoverable amount. All other assets are assessed annually for indicators of impairment, except for; - inventories; - deferred tax assets; and - financial instrument assets. If there is an indication of impairment, the assets concerned are tested as to whether their carrying value exceeds their recoverable amount. Where an asset’s carrying amount exceeds its recoverable amount, the difference is written-off by a charge to the Statement of Comprehensive Income except to the extent that the write-down can be debited to an asset revaluation reserve amount applicable to that class of asset. The recoverable amount for most assets is measured at the higher of depreciated replacement cost and fair value less costs to sell. Recoverable amount for assets held primarily to generate net cash inflows is measured at the higher of the present value of future cash flows expected to be obtained from the asset and fair value less costs to sell. It is deemed that, in the event of the loss of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made.

5 0 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 5 1 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report for the year ended 30 June 2010

A reversal of an impairment loss on a revalued asset is credited directly to equity under the heading revaluation reserve. However, to the extent that an impairment loss on the same class of asset was previously recognised in the Statement of Comprehensive Income, a reversal of that impairment loss is also recognised in the Statement of Comprehensive Income.

Assets Held for Sale Assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell, as their carrying amount will be recovered principally through a sale transaction, rather than through continuing use. The Corporation considers that the sale is highly probable, The asset is available for immediate sale in its present condition and the sale is expected to be completed within 12 months from the date of classification. Non-current assets are not depreciatied or amortised while they are classified as held for sale. Assets that are classified as held for sale are classified as current assets.

(f) Depreciation and Amortisation of Non-Current Assets All non-current physical assets that have a limited useful life are depreciated. Where assets have separate identifiable components that have distinct useful lives and/or residual values, a separate depreciation rate is determined for each component. Land is not depreciated. Depreciation on other assets is calculated using the straight line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives, commencing from the time the asset is held ready for use. The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. Major depreciation periods used are listed below and are consistent with the prior year, unless otherwise stated. Intangible assets with finite useful lives are amortised as an expense on a systematic basis (typically straight line) commencing from the time the asset is available to use. The amortisation periods are reviewed and adjusted if appropriate at each balance date. Intangible assets with indefinite useful lives are not amortised. However, all intangible assets are assessed for impairment as outlined in note 1(k). The expected useful lives used for each class of assets are as follows and consistent with those used in the prior year:

Class of Fixed Asset Useful Life (Years) Buildings 67 Water Infrastructure 10 to 100 Wastewater Infrastructure 10 to 80 Plant & Equipment 3 to 20 Motor Vehicles 8 Office Equipment 1 to 10 intangible Assets 3

The cost of assets constructed by the Corporation includes all direct labour, materials and administration costs used in construction. Works on existing assets are only capitalised if they substantially increase the useful life of the asset. The cost of capital works projects are accumulated as work in progress until the projects have been commissioned. Costs are then transferred to completed works at the end of each month and depreciation is applied from the following month.

(g) Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within interest bearing liabilities on the balance sheet, but are included within cash and cash equivalents for cash flow statement presentation purposes.

(h) Receivables Receivables are recognised initially at fair value and subsequently measured at amortised cost, less an allowance for impaired receivables. Receivables are due for settlement no more than 28 days from the date of recognition for tariff debtors, and no more than 30 days for other debtors. Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written off. A allowance for impaired receivables is established when there is objective evidence that the Corporation will not be able to collect all amounts due, according to the original terms of receivables on tenant accounts, as all accounts raised against property owners are collectable on sale of the property and hence have been excluded from any impairment assessment. The amount of the allowance is the difference between the assets carrying value and the present value of estimated future cash flows, discounted at the original effective interest rate. The amounts credited to the allowance are recognised as an expense in the Statement of Comprehensive Income.

(i) Inventories Inventories comprise stores and materials used in the construction of new works and for the repair and maintenance of existing assets. All inventories are valued at the lower of cost and net realisable value. Costs are assigned to inventory quantities on hand at balance date on a weighted average cost basis. Inventories include goods and other property held either for sale or for distribution at no or nominal cost in the ordinary course of business operations. Inventories held for distribution are measured at the lower of cost and current replacement cost. All other inventories, including land held for sale, are measured at the lower of cost and net realisable value. Where inventories are acquired at no cost, or for nominal consideration, the cost shall be the current replacement cost as at the date of acquisition. Livestock inventory was valued at 30 June 2010 by Landmark Kyle & Obst for stock held at the Orbost property.

(j) Investments Investments if any, are brought to account at cost with interest revenue recognised in the Statement of Comprehensive Income on a time proportionate basis that takes into account the effective yield in the financial asset.

(k) Intangibles Intangible assets represent identifiable non-monetary assets without physical substance. Intangible assets are initally recognised at cost. Subsequently, intangible assets with finite useful lives are carried at cost less accumulated amortisation and accumulated impairment loss. Costs incurred subsequent to initial acquisition are capitalised when it is expected that additional future economic benefits will flow to the Corporation.

5 2 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 5 3 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report for the year ended 30 June 2010

Amortisation is allocated to intangible assets with finite useful lives on a systematic basis over the asset’s useful life. Amortisation begins when the asset is available for use, that is, when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each annual reporting period. In addition, an assessment is made at each reporting date to determine whether there are indicators that the intangible assets concerned are impaired. If so, the assets concerned are tested as to whether their carrying value exceeds their recoverable amount. ntangible assets with indefinite useful lives are not amortised. The useful lives of intangible assets that are not being amortised are reviewed each period to determine whether events and circumstances continue to support an indefinite useful life assessment of that asset. In addition, the entity tests all intangible assets with indefinite useful lives for impairment by comparing their recoverable amount with their carrying amount annually and, whenever there is an indication that the intangible assets may be impaired. Any excess of the carrying amount over the recoverable amount is recognised as an impairment loss. A summary of the policies applied to the Corporation’s intangible assets is as follows:

Development Costs Useful Lives Finite Method Used 3 Years - Straight Line Internally Generated / Acquired Internally Generated Impairment Test / Recoverable Amortisation method reviewed at financial year ended 30 June 2010

Licences Useful Lives Indefinite Method Used Not amortised or revalued Internally Generated / Acquired Acquired Impairment Test / Recoverable Annually and where an indicator of impairment exists

(l) Interest Bearing Liabilities Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the initial amount recognised and the redemption amount is recognised in the Statement of Comprehensive Income over the period of the borrowings, using the effective interest method. Borrowings are classified as current liabilities unless the Corporation has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

(m) Payables Payables consist predominantly of trade and sundry creditors. These amounts represent liabilities for goods and services provided to the Corporation prior to the end of the financial year, which are unpaid at financial year end. The amounts are unsecured and are usually paid within 30 days of recognition. Payables are initally recognised at fair value, being the cost of the goods and services, and subsequently measured at amortised cost.

(n) Financial Instruments

Recognition Financial instruments are initially measured at fair value, plus in the case of a financial asset or financial liability not at fair value through profit and loss, transaction costs that are directly attributable to the acquisition or the issue of the financial asset or liability. Subsequent to initial recognition, the financial instruments are measured as set out below.

Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Assets in this category are classified as current assets. Gains and losses arising from changes in the fair value are recognised in the Statement of Comprehensive Income.

Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the reporting date which are classified as non-current assets. Loans and receivables are included in trade and other receivables and other receivables in the balance sheet.

Held-to-maturity investments Held to maturity investments are non derivative financial assets with fixed or determinable payments and fixed maturities that the Corporation’s management has the positive intention and ability to hold to maturity. If the Corporation was to sell other than an insignificant amount of held to maturity financial assets, the whole category would be tainted and reclassified as available for sale. Held to maturity financial assets are included in non current assets, except for those with maturities less than 12 months from the reporting date, which are classified as current assets. Any held-to maturity investments held by the Corporation are stated at amortised cost. Available-for-sale financial assets Available-for-sale financial assets include any financial assets not included in the other categories. Available-for-sale financial assets are reflected at fair value. Gains and losses arising from changes in fair value are taken directly to equity and recycled to the statement of comprehensive income upon disposal or the financial asset is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in the statement of comprehensive income of the period. Fair value Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.

5 2 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 5 3 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report for the year ended 30 June 2010

Impairment At each reporting date, the Corporation assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for- sale equity investment, a significant or prolonged decline in value of the instrument below its cost is considered as an indicator that the investment is impaired. If any such evidence exists for available for sale financial assets, the cumulative loss measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss is removed from equity and recognised in the Statement of Comprehensive Income. Impairment losses are recognised in the Statement of Comprehensive Income. Impairment losses recognised in the Statement of Comprehensive Income on equity instruments classified as available for sale are not reversed through the Statement of Comprehensive Income. Derivatives Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument. (o) Employee Benefits

Wages and salaries, annual leave and sick leave Liabilities for wages and salaries, annual leave accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in employee benefits liabilities in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled, at their nominal values. Employee benefits which are not expected to be settled within 12 months are measured at the present value of the estimated future cash outflows made by the Corporation, in respect of services rendered by employees up to the reporting date. Regardless of the expected timing of settlements, liabilities made in respect of employee benefits are classified as a current liability, unless there is an unconditional right to defer the settlement of the liability for at least 12 months after the reporting date, in which case it would be classified as a non-current liability. Long Service Leave (LSL) Current Liability - unconditional LSL (representing 7 or more years of continuous service) is disclosed as a current liability even where the Corporation does not expect to settle the liability within 12 months because it does not have the unconditional right to defer the settlement of the entitlement should an employee take leave within 12 months. The components of this current LSL liability are measured at: - Present value - component that the Corporation does not expect to settle within 12 months; and - Nominal value - component that the Corporation expects to settle within 12 months Non-Current Liability - conditional LSL (representing less than 7 years of continuous service) is disclosed as a non-current liability. There is an unconditional right to defer the settlement of the entitlement until the employee has completed the requisite years of service. Conditional LSL is required to be measured at present value. In calculating present value, consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. Superannuation The amount charged to the Statement of Comprehensive Income in respect of superannuation represents the contributions made by the Corporation to the superannuation plan in respect to the current services of entity staff. Superannuation contributions are made to the plans based on the relevant rules of each plan. Employee Benefit on-Costs

Employee benefit on-costs, including superannuation, payroll tax and worker’s compensation are recognised and included in employee benefit liabilities and costs when the employee benefits to which they relate are recognised as liabilities. (p) Provisions

Provisions are recognised when the Corporation as a result of a past event, has a legal or constructive obligation that can be estimated reliably, and it is probable that an outflow fo economic benefits wil be required to settle the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the provision. (q) Environmental Contribution

The Water Industry (Environmental Contributions) Act 2004 amended the Water Industry Act 1994 to make provision for environmental contributions to be paid by water supply corporations. The Act establishes an obligation for corporations to pay into the consolidated fund annual contributions. The contribution period has been extended to cover the period from 1 July 2008 to 30 June 2012, which sets out the amounts payable by each Corporation. The purpose for the environmental contribution is set out in the Act, and the funding may be used for the purpose of funding initiatives that seek to promote the sustainable management of water or address water-related initiatives. The environmental contributions are disclosed separately in expenses within the Statement of Comprehensive Income. (r) Taxation

The Corporation is subject to the National Tax Equivalent Regime (NTER), which is administered by the Australian Taxation Office. The income tax expense or revenue for the period is the expected tax payable or receivable on the current period’s taxable income based on the national income tax rate of 30%, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses. Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantially enacted. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. Deferred Tax Assets of $504,726 and provision for deferred income tax liabilities of $7,864,725 (net of tax benefit of carry forward income tax losses of $9,568,346) have been included in the accounts. Realisation of those benefits is contingent upon the future ability of the Corporation to generate taxable income, continued compliance with the conditions of deductibility imposed by the law and the taxation law itself not changing in a manner which would adversely affect the Corporation in realising those benefits.

5 4 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 5 5 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report forthe year ended 30 June 2010

(s) Capitalisation of Administration Expenses

The Corporation undertook significant capital works throughout the year. The current policy in relation to these works does not require the recognition of the administrative overhead contribution to the capital works program and the cost of capital works only includes direct administration expenses. (t) Government Dividend Policy

The Corporation is required to pay a dividend in accordance with a determination of the Treasurer of Victoria under the Public Authorities (Dividend) Act 1983, based on a prescribed percentage of the previous years’ adjusted net profit. An obligation to pay a dividend only arises after consultation with the portfolio Minister and the Treasurer and a formal determination is made by the Treasurer. The Corporation does not expect to provide a dividend from the results of this reporting period. (u) Goods and Services Tax

Revenues, expenses and assets are recognised net of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of an item of expense. Receivables and payables are stated inclusive of GST. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the Balance Sheet. Cash flows arising from operating activities are disclosed in the Cash Flow Statement on a gross basis – i.e., inclusive of GST. The GST component of cash flows arising from investing and financing activities which is recoverable or payable to the taxation Authority is classified as operating cash flows. (v) Segmental Reporting - Wholesale/Retail Function

The Corporation has no wholesale activities. Details of the retail services of the Corporation, in accordance with the Ministerial Direction under Section 51 of the Financial Management Act is disclosed in note 27 (w) Contributions by Owners

Additions to net assets which have been designated as contributions by owners are recognised as contributed capital. Other transfers that are in the nature of contributions or distributions have also been designated as contributions by owners. Transfers of net assets arising from administrative restucturings are treated as distributions to or contributions by owners. (x) Critical accounting Estimates and Judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Corporation and that are believed to be reasonable under the circumstances. The Corporation makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results.

Standard / Summary Applicable Impact on financial statements Interpretation for annual reporting periods beginning on or after

AASB 2009- In May 2009, the AASB issued a number of improve- 1-Jan-10 The entity does not expect that any adjustments will 5 Further ments to existing Australian Accounting Standards. be necessary as a result of applying the revised rules. Amendments The entity will apply the revised standards from 1 July to Australian 2010. Accounting Standards arising from the Annual Improvements Project [AASB 5, 8, 101, 107, 117, 118, 136 & 139]

AASB 9 Financial AASB 9 Financial Instruments addresses the 1-Jan-13 The entity is yet to assess its full impact. However, Instruments and classification and measurement of financial assets and initial indications are that it may affect the entity’s ac- AASB 2009-11 is likely to affect the entity’s accounting for its financial counting for its available-for-sale financial assets, since Amendments assets. The standard is not applicable until 1 January AASB 9 only permits the recognition of fair value to Australian 2013 but is available for early adoption. gains and losses in other comprehensive income if Accounting they relate to equity investments that are not held Standards arising for trading. Fair value gains and losses on available- from AASB 9 for-sale debt investments, for example, will therefore have to be recognised directly in profit or loss.

Revised AASB In December 2009 the AASB issued a revised 1-Jan-11 When the amendments are applied, the entity and 124 Related Party AASB 124 Related Party Disclosures. It is effective the parent will need to disclose any transactions Disclosures and for accounting periods beginning on or after 1 between its subsidiaries and its associates. However, AASB 2009-12 January 2011 and must be applied retrospectively. it has yet to put systems into place to capture the Amendments The amendment removes the requirement for necessary information. It is therefore not possible to to Australian government-related entities to disclose details of disclose the financial impact, if any, of the amendment Accounting all transactions with the government and other on the related party disclosures. Standards government-related entities and clarifies and simplifies the definition of a related party.

5 4 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 5 5 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report forthe year ended 30 June 2010

Standard / Summary Applicable Impact on financial statements Interpretation for annual reporting periods beginning on or after

AASB Interpretation AASB Interpretation 19 clarifies the accounting when 1-Jul-10 It is not expected to have any impact on the entity’s 19 Extinguishing an entity renegotiates the terms of its debt with the financial statements since it is only retrospectively financial liabilities result that the liability is extinguished by the debtor applied from the beginning of the earliest period with equity issuing its own equity instruments to the creditor presented (1 July 2009) and the entity has not instruments and (debt for equity swap). It requires a gain or loss to entered into any debt for equity swaps since that AASB 2009-13 be recognised in profit or loss which is measured date. Amendments as the difference between the carrying amount of to Australian the financial liability and the fair value of the equity Accounting instruments issued. Standards arising from Interpretation 19

AASB 2009-14 In December 2009, the AASB made an amendment 1-Jan-11 The entity does not make any such prepayments. Amendments to to Interpretation 14 The Limit on a Defined Benefit The amendment is therefore not expected to have Australian Interpre- Asset, Minimum Funding Requirements and their any impact on the entity’s financial statements. tation – Prepay- Interaction. The amendment removes an unintended consequence of the interpretation related to voluntary ments of a Minimum prepayments when there is a minimum funding Funding Require- requirement in regard to the entity’s defined benefit ment scheme. It permits entities to recognise an asset for a prepayment of contributions made to cover minimum funding requirements.

Note 2: Financial Risk Management The Corporation's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. This note presents information about the Corporation's exposure to each of these risks, and the objectives, policies and processes for measuring and managing risk. The Corporation's Board has the overall responsibility for the establishment and oversight of the Corporation's risk management framework. The Corporation's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Corporation. The Corporation uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate and other price risks and ageing analysis for credit risk. Risk management is carried out by the Audit and Risk Committee under policies approved by the Board of Directors. The Board provides written principles for overall risk management , as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk and investment of excess liquidity. An effective framework is in place to adequately assess, monitor, manage and report, the significant financial risks to which the Corporation is exposed to as a result of, and in the course of its activities and responsibilities. (a) Risk Exposures The main risks the Corporation is exposed to through its financial instruments are as follows: Market risk Market risk is the risk that changes in market prices will affect the fair value or future cash flows of the Corporation's financial instruments. Market risk comprises of foreign exchange risk, interest rate risk and other price risk. The Corporation's exposure to market risk is primarily through interest rate risk, there is insignificant exposure to foreign exchange risk and other price risk. Objectives, policies and processes used to manage these risks are disclosed in the paragraphs below: (i) Interest rate risk The Corporation's exposure to market interest rates relates primarily to the Corporation's long term borrowings. The Corporation minimises its exposure to interest rate changes on its long term borrowings by holding fixed rate debt. Debt is sourced from Treasury Corporation of Victoria and is managed within a range of Board approved limits with debt levels and interest rates being monitored regularly. In accordance with the Corporation's Treasury Management Policy, floating debt is limited to less than 20% of the total borrowing portfolio. This debt is restricted to short term borrowings, which limits the exposure to interest rate risk further. The Corporation has minimal exposure to interest rate risk through its holding of cash assets and other financial assets. (ii) Foreign exchange risk The Corporation has limited exposure to changes in the foreign exchange rate. (iii) Other price risk The Corporation has no significant exposure to other price risk. Market Risk Sensitivity Analysis

The sensitivity analysis below has taken into consideration past performance, future expectations, economic forecasts and management’s knowledge and experience of the financial markets, the Corporation believes that a movement of 1% in interest rates is reasonable over the next 12 months.

5 6 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 5 7 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report for the year ended 30 June 2010

Interest Rate Risk Carrying -1% 1% 30th June 2010 amount $000 Result Equity Result Equity $000 $000 $000 $000 Financial Assets Cash 615 (6) (6) 6 6 Receivables: Trade 5,558 0 0 0 0 Private Schemes 636 (6) (6) 6 6

Total Financial Assets 6,809 (12) (12) 12 12

Financial Liabilities Trade Creditors & Accruals 3,501 0 0 0 0 Borrowings 35,000 0 0 0 0

Total Financial Liabilities 38,501 0 0 0 0

Total Increase / (Decrease) (12) (12) 12 12

Interest Rate Risk Carrying -1% 1% 30th June 2009 amount $000 Result Equity Result Equity $000 $000 $000 $000

Financial Assets Cash 2,670 (26) (26) 26 26 Receivables: Trade 5,282 0 0 0 0 Private Schemes 514 (5) (5) 5 5

Total Financial Assets 8,466 (31) (31) 31 31

Financial Liabilities Trade Creditors & Accruals 5,998 0 0 0 0 Borrowings 22,000 50 50 (50) (50)

Total Financial Liabilities 27,998 50 50 (50) (50)

Total Increase / (Decrease) 19 19 (19) (19)

Credit Risk

Credit risk is the risk of financial loss to the Corporation as a result of a customer or counterparty to a financial instrument failing to meet its contractual obligations. Credit risk arises principally from the Corporation’s receivables. The Corporation’s exposure to credit risk is influenced by the individual characteristics of each customer. The receivable balance consists of a large number of residential and business customers which are spread across a diverse range of industries. Receivable balances are monitored on an on-going basis to ensure that exposure to bad debts is not significant. The Corporation has in place a policy and procedure for the collection of overdue receivables, and if required, can evoke sections of the Water Act 1989 to recover unpaid debts from customers. An analysis of the ageing of trade receivables is presented in Note 6. Liquidity Risk

Liquidity risk is the risk that the Corporation will not be able to meet its financial obligations as they fall due. The Corporation’s policy is to settle financial obligations within 30 days and in the event of dispute make payments within 30 days from the date of resolution. The Corporation manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continually monitoring forecasts and actual cash flows and matching the maturity profiles of financial assets and financial liabilities. To manage liquidity risk the Corporation has in place an ability to access funds via overnight notifications to Treasury Corporation of Victoria in accordance with the Treasurer’s borrowing approval limits. Under the State’s centralised borrowing arrangement, TCV has assumed responsibility for securing adequate access to global financial markets. The Corporation’s financial liability maturities have been disclosed on Note 26(b). (b) Fair Value Measurements The carrying amounts of trade receivables are assumed to approximate their fiar values due to their short-term nature. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the group for similar financial instruments. The fair value of current borrowings approximates the carrying amount, as the impact of discounting is not significant.

5 6 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 5 7 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report for the year ended 30 June 2010

Note 3: Operating Statement - Disclosures 2010 2009 $000 $000 (a) Significant Revenues Service Charges Water Charges 5,511 4,643 Wastewater Charges 10,773 9,941

16,284 14,584

Developer Contributions Headwork / Outfall Fees 273 185 Landowner Contributions 469 1,587 742 1,772

Other Revenue Planning Fees 498 406 Farm Operation Income 176 169 Rental Income 89 79 Miscellaneous 425 382 Legal Fees Recovered 66 93 1,254 1,129

(b) Expenses Depreciation and Amortisation Buildings 59 59 Water Infrastructure 2,814 2,606 Wastewater Infrastructure 2,323 2,262 Plant, Equipment, Office and Motor Vehicles 654 611 Sub-total 5,850 5,538

Amortisation - Intangible Assets 532 414

6,382 5,952

Employee Costs Salaries & Wages 4,830 4,636 Leave Payments 677 509 Superannuation Contributions 484 415 Other 435 291 6,426 5,851

Bad and Doubtful Debts (4) 40

Loss on Assets Disposed Water Assets 1,621 520 Wastewater Assets 3 1 Corporate Assets 54 46 1,678 567 Auditors' Remuneration Auditor General for audit of financial statements 39 37 Internal Audit 48 62 87 99

5 8 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 5 9 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report for the year ended 30 June 2010

Note 4: Income Tax Expense 2010 2009 The income tax expense for the financial year differs from the amount calculated on $000 $000 the profit. These differences are reconciled as follows:

(a) Components of Tax Expense Deferred tax relating to temporary differences 102 736 Adjustments for current tax on prior periods 0 274

102 1,010

Deferred income tax expense included in income tax expense comprises: Decrease / (increase) in deferred tax assets (47) (77) (Decrease) / increase in deferred tax liabilities 149 1,087

102 1,010 (b) Reconciliation of income tax to prima facie tax payable

Profit from ordinary activities before income tax expense 371 2,473

Income tax at 30% 111 742

Add / (Deduct) Tax Effect of: - Depreciation on Buildings 18 18 - Entertainment 2 5 - Amortisation of Buildings (29) (29) - Prior Year Correction 0 274

Aggregate Income Tax Expense 102 1,010 Aggregate income Tax Expense comprises: - Deferred Income Tax Provision 102 1,010

Note 5: Cash and cash equivalents 2010 2009 $000 $000

Current Cash on Hand and Bank Accounts 608 2,595 Developer Bond Accounts 7 75

615 2,670

Note 6: Receivables 2010 2009 $000 $000 Current Trade Debtors 467 585 Other Debtors 5,091 4,697 Less Provision for Impaired Receivables (47) (67)

5,511 5,215

Non Current Private Schemes 636 514

636 514

5 8 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 5 9 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report for the year ended 30 June 2010

Note 6: Receivables (continued) Provision for impaired receivables As at the 30 June 2010, current receivables of the Corporation with a nominal value of $433K (2009: $537K) were past due but not impaired. The amount of the provision was $46K (2009: $67K) The individually impaired receivables relate to tenant debtors. The ageing of these receivables is as follows: 2010 2009 $000 $000 3 to 6 months 230 275 Over 6 months 203 262

433 537 The other amounts within receivables do not contain impaired assets and are not past due. Based on credit history, it is expected these amounts will be received when due. Movements in the provision for impaired receivables are as follows: At 1 July 67 35 Provision for impairment recognised during the year (4) 39 Receivables written off during the year as uncollectable (17) (7)

46 67

The creation and release of the provision for impaired receivables has been included in 'Suppliers & Materials' in the Statement of Comprehensive Income. Amounts charged to the provision account are generally written off when there is no expectation of recovering additional cash. Note 7: Inventories 2010 2009 $000 $000

Stores at Cost 457 449 Livestock at Valuation 32 41

489 490

Note 8: Property, Plant and Equipment 2010 2009 $000 $000 (a) Classes of Property, Plant and Equipment Land At Fair Value (Crown) 2,492 2,492 At Fair Value (Freehold) 13,627 13,627 At Cost (freehold) 1,369 934

17,488 17,053 Buildings At Fair Value 4,636 4,636 At Cost 98 70 Less Accumulated Depreciation (186) (127)

4,548 4,579 Water Infrastructure At Deemed Cost 64,910 64,910 At Cost 54,249 33,854 Less Accumulated Depreciation (18,243) (15,653)

100,916 83,111

Wastewater Infrastructure At Deemed Cost 65,900 65,900 At Cost 33,609 30,100 Less Accumulated Depreciation (18,981) (16,658)

80,528 79,342

6 0 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 6 1 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report for the year ended 30 June 2010

Note 8: Property, Plant and Equipment (continued) 2010 2009 $000 $000 Motor Vehicles At Fair Value 931 1,391 At Cost 442 0 Less Accumulated Depreciation (24) 0 1,349 1,391

Plant and Equipment At Fair Value 973 1,257 At Cost 149 0 Less Accumulated Depreciation (16) 0 1,106 1,257

Office Equipment At Fair Value 171 284 At Cost 83 0 Less Accumulated Depreciation (23) 0 231 284

Total Property, Plant and Equipment 206,166 187,017

Capital Works in Progress Water, At Cost 6,426 11,966 Wastewater, At Cost 2,173 3,026

Total Capital Works in Progress 8,599 14,992

Asset Value Accumulated Profit / at Sale Depreciation WDV at Proceeds (Loss) on Date on Disposal Sale Date from Sale Sale $000 $000 $000 $000 $000

(b) Profit / Loss on Sale of Non Current Assets 2010 Motor Vehicles 366 (100) 266 208 (58) Plant and Equipment 3 (3) 0 0 0 Office Equipment 53 (53) 0 0 0 Infrastructure 1,844 (224) 1,620 0 (1,620) Total 2,266 (380) 1,886 208 (1,678)

(b) Profit / Loss on Sale of Non Current Assets 2009 Motor Vehicles 568 (195) 373 326 (47) Plant and Equipment 1 (1) 0 0 0 Office Equipment 16 (16) 0 2 2 Infrastructure 681 (160) 521 0 (521) Total 1,266 (372) 894 328 (566)

6 0 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 6 1 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report for the year ended 30 June 2010

Note 8: Property, Plant and Equipment (continued)

Opening Deprecition Closing WDV Additions Disposals Revaluation Impairment Exp WDV $000 $000 $000 $000 $000 $000 $000 (c) Movement during financial year 2010

Land At Fair Value (Crown) 2,492 2,492 At Fair Value (Freehold) 13,627 13,627 At Cost 934 435 1,369 17,053 435 0 0 0 0 17,488

Buildings At Fair Value 4,509 4,509 At Cost 70 28 (59) 39 4,579 28 0 0 0 (59) 4,548

Water Infrastructure At Deemed Cost 54,864 54,864 At Cost 28,246 22,240 (1,620) (2,814) 46,052 83,110 22,240 (1,620) 0 0 (2,814) 100,916

Wastewater Infrastructure At Deemed Cost 56,882 56,822 At Cost 22,520 3,509 (2,323) 23,706 79,342 3,509 0 0 0 (2,323) 80,528

Motor Vehicles At Fair Value 1,392 (266) (194) 932 At Cost 0 441 (24) 417 1,392 441 (266) 0 0 (218) 1,349

Plant and Equipment At Fair Value 1,257 (284) 973 At Cost 0 149 (16) 133 1,257 149 0 0 0 (300) 1,106

Office Equipment At Fair Value 284 (113) 171 At Cost 0 83 (23) 60 284 83 0 0 0 (136) 231 Total 187,017 26,885 (1,886) 0 0 (5,850) 206,166

At 1 July 2009 Cost / fair value 222,095 Accumulated Depreciation and Impairment (35,078) Net Carrying Amount 187,017 At 30 June 2010 Cost / fair value 246,712 Accumulated Depreciation and Impairment (40,546) Net Carrying Amount 206,166

6 2 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 6 3 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report for the year ended 30 June 2010

Note 8: Property, Plant and Equipment (continued)

Opening Additions Disposals Revaluation Impairment Depreciation Closing WDV Exp WDV $000 $000 $000 $000 $000 $000 $000 (d) Movement during financial year 2009

Land At Fair Value (Crown) 2,492 2,492 At Fair Value (Freehold) 13,627 13,627 At Cost 884 50 934 17,003 50 0 0 0 0 17,053

Buildings At Fair Value 4,568 (58) 4,510 At Cost 70 (1) 69 4,638 0 0 0 0 (59) 4,579

Water Infrastructure At Deemed Cost 55,384 (58) (462) 54,864 At Cost 21,413 9,439 (2,606) 28,246 76,797 9,439 (58) 0 (462) (2,606) 83,110

Wastewater Infrastructure At Deemed Cost 56,823 (1) 56,822 At Cost 19,874 4,908 (2,262) 22,520 76,697 4,908 (1) 0 0 (2,262) 79,342

Motor Vehicles At Fair Value 1,269 695 (373) (199) 1,392 1,269 695 (373) 0 0 (199) 1,392

Plant and Equipment At Fair Value 1,373 173 (288) 1,258 1,373 173 0 0 0 (288) 1,258

Office Equipment At Fair Value 257 151 (124) 284 257 151 0 0 0 (124) 284 Total 178,032 15,416 (432) 0 (462) (5,538) 187,017

At 1 July 2008 Cost / fair value 208,321 Accumulated Depreciation and Impairment (30,289) Net Carrying Amount 178,032

At 30 June 2009 Cost / fair value 222,095 Accumulated Depreciation and Impairment (35,078) Net Carrying Amount 187,017

6 2 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 6 3 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report for the year ended 30 June 2010

Note 8: Property, Plant and Equipment (continued)

(e) Capital Works in Progress Opening Cost Additions Transfer Closing Cost 2010 $000 $000 $000 $000

Water At Cost 11,966 17,836 (23,376) 6,426 Wastewater At Cost 3,026 2,656 (3,509) 2,173 14,992 20,492 (26,885) 8,599

Opening Cost Additions Transfer Closing Cost 2009 $000 $000 $000 $000

Water At Cost 6,692 15,732 (10,458) 11,966 Wastewater At Cost 3,925 4,009 (4,908) 3,026 10,617 19,741 (15,366) 14,992

Note 9: Intangible Assets 2010 2009 $000 $000

Cost (Gross Carrying Amount) - Software 2,547 1,653 Cost (Gross Carrying Amount) - Ground Water Licence (Indefinite Life) 181 0 Accumulated Amortisation and Impairmen (1,452) (920)

Net Carrying Amount 1,276 733 Opening Written Down Value 733 871 Additions 1,075 276 Amortisation (532) (414)

Net Carrying Amount 1,276 733

Note 10: Payables 2010 2009 $000 $000 Unsecured Trade Creditors and Accruals 2,571 5,072 Contractor Deposits and Retention 930 926

3,501 5,998

6 4 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 6 5 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report for the year ended 30 June 2010

Note 11: Provisions 2010 2009 $000 $000 (a) Current Annual Leave 604 535 Provision for Long Service Leave 873 761

1,477 1,296 (b) Non Current Provision for Long Service Leave 134 137

134 137 (c) Employee Statistics Number of Employees 86 78 Number of Effective Full Time Employees 81 78

The present value of employee entitlements that are not expected to be settled within twelve months of balance date have been calculated using the following weighted averages, as advised by the Department of Treasury and Finance. Rostered Days Off were not deemed to be liabilities and no provision was calculated during the reporting period. Assumed rate of increase in wage and salary rates 4.48% 4.45% Discount Rate 4.98% - 5.65% 3.00% - 5.41% Note 9: Intangible Assets 2010 2009 Settlement Term (years) 7 7 $000 $000 Note 12: Interest Bearing Liabilities 2010 2009 $000 $000 Cost (Gross Carrying Amount) - Software 2,547 1,653 Cost (Gross Carrying Amount) - Ground Water Licence (Indefinite Life) 181 0 Current Accumulated Amortisation and Impairmen (1,452) (920) Secured TCV Borrowings 3,000 5,000

Non-Current Net Carrying Amount 1,276 733 Secured TCV Borrowings 32,000 17,000 Opening Written Down Value 733 871 Additions 1,075 276 Total Interest Bearing Liabilities 35,000 22,000 Amortisation (532) (414) The borrowings are not directly secured by assets of the Corporation but have the benefit of the Treasurer's guarantee in favour of TCV dated 25 April 2002. Net Carrying Amount 1,276 733 Credit Standby arrangements

Note 10: Payables 2010 2009 Bank (TCV) loan facilities $000 $000 Total Facilities 36,500 35,500 Unsecured Used at Balance Date 35,000 22,000 Trade Creditors and Accruals 2,571 5,072 Contractor Deposits and Retention 930 926 Unused at Balance Date 1,500 13,500

Interest rate risk exposures 3,501 5,998 The following table sets out the Corporation's exposure to interest rate risk, including the contractual repricing dates and the effective weighted average interest rate maturity periods. Exposures arise predominately from, liabilities bearing variable interest rates as the Corporation intends to hold fixed borrowings to maturity.

TCV Borrowings - Floating 0 5,000 TCV Borrowings - Fixed 35,000 17,000

35,000 22,000

6 4 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 6 5 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report for the year ended 30 June 2010

Note 12: Interest Bearing Liabilities (continued) 2010 2009 $000 $000

Weighted Average interest rate (%) 5.83% 6.03%

None of the Corporation's interest bearing liabilities are readily traded on organised markets in standardised form. The fair value of the Corporation's interest bearing liabilities are disclosed in Note 26. All of the Corporation's interest bearing liabilities are denominated in AUD and are not subject to foreign exchange risk. Note 13: Deferred Tax Liabilities 2010 2009 $000 $000

The balance comprises temporary differences attributable to: Amounts recognised in Operating Statement Employee Benefits (483) (429) Doubtful Debts (14) (20) Other (7) (7)

Total deferred tax assets (504) (456)

Tax Losses (9,569) (8,158) Depreciation 15,590 14,029

Total deferred tax liabilities 6,021 5,871

5,517 5,415

Amounts recognised directly in Equity Revaluation of property, plant and equipment 1,843 1,843

1,843 1,843

Net deferred tax liabilities 7,360 7,258

Movements Opening Balance at 1 July 7,258 6,249 Charged/(credited) to Statement of Comprehensive Income 102 1,010 Charged/(credited) to Equity 0 0

Closing Balance 7,360 7,258

Deferred tax liabilities to be recovered after more than 12 months 7,360 7,258 Deferred tax liabilities to be recovered within 12 months 0 0

Note 14: Contingent Liabilities At balance date the Corporation is unaware of any contingent liabilities or contingent assets that have not been disclosed or recorded. Note 15: Superannuation The Corporation contributes to the following superannuation schemes in respect of its employees with contribution rates varying from 9% - 9.25% of employee salaries. 2010 2009 Contributions by the Corporation during the reporting period are detailed below: $000 $000

Local Authorities Super - Defined Benefits 104 98 Local Authorities Super - Super Saver 380 317

484 415

6 6 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 6 7 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report for the year ended 30 June 2010

The Corporation makes employer superannuation contributions in respect of most employees to the Local Authorities Superannuation Fund (the Fund).

Obligations for contributions are recognised as an expense in profit or loss when they are due. The Fund has two categories of membership, accumulation and defined benefit, each of which is funded differently.

The Fund's accumulation category, Vision Super Saver, receives both employer and employee contributions on a progressive basis. Employer contributions are normally based on a fixed percentage of employee earnings (9% required under Superannuation Guarantee Legislation). No further liability accrues to the employer as the superannuation benefits accruing to employees are represented by their share of the net assets of the fund.

Defined Benefit Plan

The Fund's Defined Benefit Plan is a multi-employer sponsored plan. As the Plan's assets and liabilities are pooled and are not allocated by employer, the Actuary is unable to reliably allocate defined liabilities, assets and costs between employers. As provided under paragraph 32 (b) of AASB 119, the Corporation does not use defined benefit accounting for these contributions.

The Corporation makes employer contributions to the defined benefit category of the Fund at rates determined by the Trustee on the advice of the Fund's Actuary. On the basis of the results of the most recent full actuarial investigation conducted by the Fund's actuary as at 31 December 2008, the Corporation makes the following contributions -

- 9.25% of member's salaries - the difference between resignation and retrenchment benefits paid to any retrenched employees, plus contributions tax.

The Fund’s liability for accrued benefits was determined by the Actuary at 31 December 2008 pursuant to the requirements of Australian Accounting Standard AAS25 is as follows:

31-Dec-08 $000

Net Market Value of Assets 3,630,432 Accrued Benefits 3,616,422

Difference between Assets and Accrued Benefits 14,010

Vested Benefits (Minimum sum which must be paid to members when they leave the Fund) 3,561,588

The financial assumptions used to calculate the Accrued Benefits for the defined benefit category of the Fund were:

Net Investment Return 8.50%p.a Salary Inflation 4.25%p.a Price Inflation 2.75%p.a

The Corporation has been advised that no additional contributions will be required as at 30 June 2010. The actuary will undertake the next actuarial investigation during October 2010 to ascertain whether additional contributions are required. Should the review identify a funding shortfall requiring additional contributions, the Corporation will be notified of any payment by November 2010 for payment on 1 July 2011. A further actuarial review will be undertaken as at 30 June 2011. Based on the result of this further review, a detailed funding plan will be developed and implemented to achieve the target of fully funding the Fund by 31 December 2013.

6 6 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 6 7 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report for the year ended 30 June 2010

Note 16: Lease Commitments 2010 2009 $000 $000 Less than One Year 228 157 One to Five Years 646 528 Over Five Years 248 272 1,122 957 Lease and rental income is derived from lease of telecommunication tower sites, rental of residential farm property and rental of sites for weather and navigational monitoring facilities with terms between 5 and 20 years. The Corporation has entered into a 5 year lease arrangement for agistment of owned land to a third party. Note 17: Contributed Capital 2010 2009 $000 $000 Opening Balance 95,243 94,103 Equity Contributions from Victorian Government - Cash 451 1,140 Total Contributed Capital 95,694 95,243

Note 18: Reserves 2010 2009 $000 $000

Asset Revaluation Reserve Land 8,465 8,465 Buildings 1,316 1,316

Total Reserves 9,781 9,781

Movements in Reserves

Opening Balance 9,781 9,781 Closing Balance 9,781 9,781

The asset revaluation reserve is used to record asset revaluation increments and decrements in the value of non-current physical assets.

Note 19: Accumulated Surplus 2010 2009 $000 $000

Balance July 1 69,857 68,394 Net result for the period 269 1,463 Accumulated Surplus at the end of year 70,126 69,857

Note 20: Reconciliation of net results from Ordinary Activities 2010 2009 to Cash Provided by Operating Activities $000 $000

Net Result for the Period 269 1,463 Loss on Sale on Non-Current Assets 1,678 565 Depreciation and Amortisation 6,382 5,952 Bad Debts 17 7 Income for Capital Purposes (742) (1,771)

6 8 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 6 9 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report for the year ended 30 June 2010

Note 20: Reconciliation of net results from Ordinary Activities 2010 2009 to Cash Provided by Operating Activities (continued) $000 $000

Movement in Assets and Liabilities (Increase)/Decrease in Receivables (173) (1,857) (Increase)/Decrease in Inventories 1 52 Increase/(Decrease) in Provisions (178) (237) Increase/(Decrease) in Accounts Payable (2,497) 2,513 Increase/(Decrease) in Deferred Tax Liabilities 102 1,010

Net cash provided by operating activities 4,859 7,697

Non Cash Activities 2010 2009 $000 $000

Income for Capital Purposes - Donated Developer Assets 340 828

Income for capital purposes includes the value of donated developer assets received, where the Corporation gains control of those assets. They represent "non-cash" activities.

Note 21: Capital Commitments 2010 2009 $000 $000

Capital Project Commitments due within 12 months (exclusive of GST) 1,677 15,391

Note 22: Reconciliation of Cash Cash as at the end of the financial year as shown in the Cash flow Statement is reconciled to the related items in the Balance 2010 2009 Sheet as follows: $000 $000

Cash on Hand 1 1 Cash at Bank 607 2,594 Developer Bond Accounts 7 75

615 2,670

Note 23: Auditor's Remuneration 2010 2009 $000 $000

Amounts paid/payable to the Victorian Office of the Auditor General (inc. GST) 43 38

Note 24: Executive Officers' Remuneration The number of Executive Officers', other than the responsible persons, whose total remuneration falls within the specific bands above $100,000 as are follows: Total Remuneration Base Remuneration 2010 2009 2010 2009

$100,000 - $109,999 0 0 0 1 $110,000 - $119,999 0 2 1 2 $120,000 - $129,999 2 1 2 1 $130,000 - $139,999 1 1 1 0 $140,000 - $149,999 1 0 0 0

Total Remuneration 520 486 497 449

Total Numbers 4 4 4 4

6 8 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 6 9 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report for the year ended 30 June 2010

Note 25: Responsible Persons' Related Disclosures The names of persons who were responsible at any time during the financial year were:

Ministers The Hon. Timothy Holding MP Minister for Water

Board Chairperson Robert Fordham Deputy Chairperson Bernie Smith Director Robert Supplitt Director Jane Rowe Director Eric Sjerp Director Gail Morley Director Richard Elkington Director Samuel Logan Managing Director Les Mathieson

Remuneration of Responsible Persons Remuneration paid to Ministers is reported in the Annual Report of the Department of Premier and Cabinet. Other relevant interests are declared in the Register of Members' Interests which each member of the Parliament com- pleted.

The number of Responsible Persons' whose remuneration from the Corporation was within the specific bands were as follows:

2010 2009

$10,000 - $19,999 6 7 $20,000 - $29,999 1 0 $30,000 - $39,999 0 1 $40,000 - $49,999 1 0 $190,000 - $199,999 0 1 $210,000 - $219,999 1 0

Total Numbers 9 9

Remuneration received or receivable by responsible persons' and related parties in respect of the management of the Corporation during the reporting period was: 2010 2009 $000 $000

385 349

Retirement Benefits The Corporation has made superannuation payments of $35,000 (2009: $31,000) on behalf of the Responsible Persons.

Transactions between responsible persons and the Corporation There have been no transactions between responsible persons and the Corporation other than in the normal capacity as ratepayers and consumers.

7 0 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 7 1 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report for the year ended 30 June 2010

Note 26: Financial Instruments (a) Terms, Conditions and Accounting Policies The Corporation's accounting policies including the terms and conditions of each class of financial assets, financial liability and equity instrument, recognised at balance date, are as follows:

Financial Instrument Refer Accounting Policies Terms and Conditions Notes to Accounts

(i) Financial Assets

Receivables - Tariffs and Charges 6 Trade Receivables are carried at Credit is allowed for a 28 day nominal amounts due less any term. Interest of 12.25% is provision for doubtful debts. chargeable on overdue amounts. A provision for doubtful debts is recognised when collection of the full nominal amount is no longer probable. Receivables - 6 Private Scheme receivables are Billing is conducted every quarter Private Schemes carried at nominal amounts due. and credit is allowed for a 14 day term. Interest at 6.8% is chargeable on outstanding amounts. Receivables - 6 Developer charges owing are All charges are to be paid on Developer Charges recognised on the issue of a application for a certificate of certificate of compliance and compliance. are payable on application for a certificate of compliance.

Cash and cash 5 Investments and cash at bank are Bank bills and short term deposits equivalents brought into account at cost, with have an average maturity of 90 interest revenue recognised in the days. operating statement on a time proportionate basis that takes into account the effective yield in the financial asset. (ii) Financial Liabilities

Payables - 10 Liabilities are recognised for Trade liabilities are settled as cash Trade Creditors and amounts to be paid in the future flows permit, or within 30 days Accruals for goods and services received, payment terms. Cash flows are whether or not billed to the monitored on a daily basis. Corporation.

Payables - 10 Contract retentions are held at Retentions payable on satisfactory Retention between 5% and 10% of contact completion of 12 months mainte- works and repayable within 12 nance period. months of completion of works.

Interest Bearing 12 Interest Bearing Liabilities are Interest Bearing Liabilities are Liabilities brought into account at fair value sourced at call (11am) rate and net of transaction costs. They via longer term secured funds. are subsequently measured at The effective interest rate for the amortised cost. Any differences period was 6.03% between the proceeds and the redemption amount is recognised in the operating statement over the period of the borrowings using the amortised cost method. (iii) Equity

Contributed Capital 17 Contributions to the Corporation are recognised as Contributed Capital with the approval of the Minister of Finance.

7 0 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 7 1 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report for the year ended 30 June 2010

Note 26: Financial Instruments (continued)

(b) Interest Rate Risk The following table sets out the Corporation's exposure to interest rate risk, including the contractual repricing dates and the ef- fective weighted average interest rate by maturity periods. Exposures arise predominantly from liabilities bearing variable interest rates as the Corporation intends to hold fixed rate liabilities to maturity. Contractual repricing of maturity periods Non- Floating Fixed Over Over Over Over interest interest interest 1 year 1 to 2 2 to 3 3 to 4 4 to 5 Over 5 2010 bearing rate rate or less years years years years years Total Financial Instruments $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 (i) Financial Assets Cash 7 608 615 Receivables: Trade 5,558 5,558 Private Schemes 10 10 8 8 8 592 636

Total Financial Assets 5,565 608 0 10 10 8 8 8 592 6,809

(ii) Financial Liabilities Trade Creditors & Accruals 3,508 3,508 Borrowings 3,000 7,500 7,000 7,000 5,500 5,000 35,000

Total Financial Liabilities 3,508 0 0 3,000 7,500 7,000 7,000 5,500 5,000 38,508

Net Financial Asset / (Liabilities) 2,057 608 0 (2,990) (7,490) (6,992) (6,992) (5,492) (4,408) (31,699)

Contractual repricing of maturity periods Non- Floating Fixed Over Over Over Over interest interest interest 1 year 1 to 2 2 to 3 3 to 4 4 to 5 Over 5 2009 bearing rate rate or less years years years years years Total Financial Instruments $000 $000 $000 $000 $000 $000 $000 $000 $000 $000

(i) Financial Assets Cash 75 2,595 2,670 Receivables: Trade 5,282 5,282 Private Schemes 10 8 8 8 8 472 514

Total Financial Assets 5,357 2,595 0 10 8 8 8 8 472 8,466

(ii) Financial Liabilities

Trade Creditors & Accruals 6,073 6,073 Borrowings 5,000 7,500 7,000 2,500 22,000

Total Financial Liabilities 6,073 5,000 0 0 0 7,500 0 7,000 2,500 28,073 Net Financial Asset / (Liabilities) (716) (2,405) 0 10 8 (7,492) 8 (6,992) (2,028) (19,607)

7 2 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 7 3 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report for the year ended 30 June 2010

Note 26: Financial Instruments (continued)

(c) Net Fair Values Measurements The carrying amount of financial assets and financial liabilities in the financial statements approximates their net fair values. There are 3 methods available for estimating the fair value of financial instruments in active markets.

(a) Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities (b) Level 2 - inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices), and (c) Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs). Fair value of the current balance of interest bearing liabilities approximates their carrying amount, as the impact of discounting is not considered to be material. The fair value of non current interest bearing liabilities are based on cash flows discounted using interest rates ranging from 4.5% to 7.15% depending on the type of borrowings.

The aggregate fair values of financial assets and financial liabilities, both recognised and unrecognised, at the balance date, are as follows: Total Carrying Aggregate Net Amount as per Fair Value Balance Sheet 2010 2009 2010 2009 Financial Instruments $000 $000 $000 $000

(i) Financial Assets Cash 615 2,670 615 2,670 Receivables 5,558 5,282 5,558 5,282 Private Schemes 636 514 636 514

Total Financial Assets 6,809 8,466 6,809 8,466

(ii) Financial Liabilities Payables - Trade Creditors and Accruals 3,508 6,073 3,508 6,073 Borrowings - TCV 35,000 22,000 35,840 22,550

Total Financial Liabilities 38,508 28,073 39,348 28,623

(d) Credit Risk Exposure The Corporation's maximum exposure to credit risk at balance date in relation to each class of recognised financial asset is the carrying amount of those assets as indicated in the Balance Sheet.

Concentration of Credit Risk The Corporation minimises concentrations of credit risk in relation to Trade Accounts Receivable by undertaking transactions with a large number of customers. The Corporation has the power under the Water Act 1989 to claim monies from the sale of properties to recover outstanding accounts. Credit risk in trade and other receivables is managed by payment term of 14 days. Credit risk for bank accounts is reduced by banking with reputable financial institutions with a sound credit rating.

7 2 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 7 3 EAST GIPPSLAND REGION WATER CORPORATION Notes to the Financial report for the year ended 30 June 2010

Note 27: Operating Results of Retail Operations In accordance with directions issued by the Minister for Water under the Financial Management Act 1994, the Corporation is required to provide as part of its financial statements, separate details of the revenue, expenses, assets and liabilities and the results of its wholesale and retail operations. The Corporation does not have any wholesale operations. Details of the retail operations are as follows:

Revenue is allocated against the retail segment it represents, whilst expenditure is allocated directly to the retail segement or split on a 50:50 basis where the expense is determined to be of a corporate nature.

Water Wastewater Total 2010 2009 2010 2009 2010 2009 $000 $000 $000 $000 $000 $000

Revenue Sales - External 10,843 10,285 11,620 10,175 22,463 20,460 Developer Contributions 331 720 411 1,053 742 1,773 Other 701 717 638 515 1,339 1,232

Total Service Revenue 11,875 11,722 12,669 11,743 24,544 23,465

Expenses Borrowing Costs 1,012 642 1,011 643 2,023 1,285 Depreciation 3,144 2,918 2,706 2,619 5,850 5,537 Amortisation 266 207 266 207 532 414 Employees 3,308 2,954 3,118 2,897 6,426 5,851 Environmental Contribution 412 412 411 411 823 823 Suppliers and Materials 3,668 3,403 3,173 3,113 6,841 6,516 Loss on Assets Sold 1,648 542 30 24 1,678 567

Total Service Expense 13,458 11,077 10,715 9,913 24,173 20,993

Operating Surplus/(Deficit) from Retail Operations (1,583) 644 1,954 1,829 371 2,472

Income Tax Expense 0 (263) (102) (746) (102) (1,009)

Net Surplus for Reporting Period (1,583) 381 1,852 1,082 269 1,463

Note 28: Events Subsequent to the Balance Date

No matters or circumstances have arisen since the end of the reporting period which significantly affected or maysignificantly affect the operations of the Corporation, the results of those operations, or the state of affairs of the Corporation in future financial years.

7 4 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 7 5 East Gippsland Region Water Corporation Statutory Certification for 2009/10

We certify the attached financial statements for East Gippsland Region Water Corporation have been prepared in accordance with standing direction 4.2 of the Financial Management Act 1994, applicable Australian Accounting Standards, Interpretations and other mandatory professional reporting requirements. We further state that, in our opinion, the information set out in the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and notes accompanying these financial statements, presents fairly the financial transactions during the year ended 30 June 2010 and the financial position of the Corporation as at 30 June 2010. We are not aware of any circumstances which would render any particulars included in the financial statements to be misleading or inaccurate.

Gail Morley Chairperson East Gippsland Region Water Corporation

Les Mathieson Managing Director East Gippsland Region Water Corporation

Rob Carlesso Chief Finance & Accounting Officer East Gippsland Region Water Corporation

18 August 2010

7 4 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 7 5 7 6 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 7 7 7 6 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 7 7 Whistleblowers Protection Act 2001

Appendix: Whistleblowers Report

Whistleblower’s Protection Act Policy 1. PURPOSE The conduct must be serious enough to constitute, These procedures establish a system for reporting if proved, a criminal offence or reasonable grounds Investigation of Disclosures disclosures of improper conduct or detrimental action for dismissal. by East Gippsland Water or its employees. The system 4.2 Corrupt conduct enables such disclosures to be made to the Protected Investigation of Disclosures Corrupt conduct means: and Protection for Whistleblowers (2009/10) Disclosure Co-ordinator or to one of the nominated Protected Disclosure Officers. Disclosures may be made ● Conduct of any person (whether or not a public and Protection for Whistleblowers by employees or members of the public. official) that adversely affects the honest performance of a public officer’s or public body’s functions; These procedures are designed to complement normal Within the terms of reference of the Whistleblowers Contents Page communication channels between supervisors and ● The performance of a public officer’s functions Protection Act which came into effect on January 1, 1. Purpose/whistleblowers support statement79 2 employees. Employees are encouraged to continue dishonestly or with inappropriate partiality; 2002, no disclosures were made to East Gippsland 2. Approval 792 to raise appropriate matters at any time with their ● Conduct of a public officer, former public officer Region Water C orporation, nor were any disclosures 3. Objectives of the Act 792 supervisors. As an alternative, employees may make or a public body that amounts to a breach of made to the Ombudsman for determination as to 4. Procedures: Definitions of key terms 792 a disclosure of improper conduct or detrimental action public trust; whether such disclosures were public interest 4.1 Improper conduct 792 under the Act in accordance with these procedures. ● Conduct by a public officer, former public officer disclosures. 4.2 Corrupt conduct 792 4.3 Detrimental act 792 1.1 Statement of support to whistleblowers or a public body that amounts to the misuse of No investigation or disclosure of any type was taken information or material acquired in the course of over from East Gippsland Water by the Ombudsman, and 5. The reporting system 792 East Gippsland Water is committed to the aims and 5.1 Contact persons within East Gippsland Water 792 the performance of their official functions; or no requests by complainants to have disclosures objectives of the 5.2 Alternative contact persons 803 ● A conspiracy or attempt to engage in the above investigated by the Ombudsman due to their dissatisfaction Whistleblowers Protection Act 2001 (the Act). It does 6. Roles and responsibilities 803 conduct. with the way East Gippsland Water investigated any matter, not tolerate improper conduct by its employees, officers 6.1 Employees 803 were received. or members, nor taking of reprisals against those who 6.2 Protected Disclosure Officers 803 4.3 Detrimental action come forward to disclose such conduct. East Gippsland Water did not decline to investigate any 6.3 Protected Disclosure Co-ordinator 803 The Act makes it an offence for a person to take disclosure and no recommendations were received by 6.4 Investigator 803 East Gippsland Water recognises the value of detrimental action against a person in reprisal for East Gippsland Water from the Ombudsman in relation to 6.5 Welfare Manager 803 transparency and accountability in its administrative a protected disclosure. Detrimental action includes: any aspect of the Whistleblowers Protection Act. 7. Confidentiality 814 and management practices, and supports the making ● Action causing injury, loss or damage; 8. Collating and publishing statistics 814 of disclosures that reveal corrupt conduct, conduct Policy No 31 (as follows) was adopted on February 19, ● Intimidation or harassment; and 2002. The policy reads: “East Gippsland Region Water 9. Receiving and assessing disclosures 814 involving a substantial mismanagement of public ● Discrimination, disadvantage or adverse treatment in Corporation (EGW) is committed to the aims and objectives 9.1 Has the disclosure been made in accordance resources, or conduct involving a substantial risk with Part 2 of the Act? 814 relation to a person’s employment, career, profession, of the Whistleblowers Protection Act 2001 and will not to public health and safety or the environment. 9.1.1 Has the disclosure been made to the trade or business, including the taking of disciplinary tolerate improper conduct by its employees, officers or East Gippsland Water will take all reasonable steps to appropriate person? 814 action. members, nor the taking of reprisals against those who protect people who make such disclosures from any 9.1.2 Does the disclosure contain the essential come forward to disclose such conduct. detrimental action in reprisal for making the disclosure. elements of a protected disclosure? 814 It will also afford natural justice to the person who is 5. THE REPORTING SYSTEM East Gippsland Water recognises the value of transparency 9.2 Is the disclosure a public interest disclosure?82 5 the subject of the disclosure. and accountability in its administrative and management 10. Investigations 825 5.1 Contact persons practices, and supports the making of disclosures that 10.1 Introduction 825 - East Gippsland Water 2. APPROVAL reveal corrupt conduct, conduct involving a substantial 10.2 Terms of reference 825 Disclosures of improper conduct or detrimental action mismanagement of public resources, or conduct 10.3 Investigation plan 825 Managing Director by East Gippsland Water or its employees, may be made involving a substantial risk to public health and safety 10.4 Natural justice 825 to the following officers: or the environment. 10.5 Conduct of the investigation 836 3. OBJECTIVES OF THE ACT ● 10.6 Referral investigation to ombudsman 836 The Protected Disclosure Co-ordinator East Gippsland Water will take all reasonable steps to protect The Whistleblowers Protection Act 2001 commenced 10.7 Reporting requirements 836 East Gippsland Water persons who make such disclosures from any detrimental operation on 1 January 2002. The purpose of the Act 11. Action taken after an investigation 836 Managing Director, Les Mathieson: action in reprisal for making the disclosure. It will also afford is to encourage and facilitate the making of disclosures 11.1 Investigator’ s final report 836 telephone 5150 4444 – internal extension 417; natural justice to the person who is the subject of the of improper conduct by public officers and public bodies. 11.2 Action to be taken 836 e-mail [email protected] disclosure. The Act provides protection to whistleblowers who make 12. Managing welfare of the whistleblower 836 ● disclosures in accordance with the Act, and establishes The Protected Disclosure Officer A copy of the Whistleblowers Protection Act 2001 12.1 Commitment to protect. whistleblowers83 6 a system for the matters disclosed to be investigated East Gippsland Water Ombudsman’s Guidelines is registered on File No. 12.2 Keeping the whistleblower informed 847 Executive Manager Corporate Development and 0/040/570 Document No. 24620.” 12.3 Occurrence of detrimental action 847 and rectifying action to be taken. Services, Brett Millington: 12.4 Whistleblowers/ improper conduct 847 East Gippsland Water’s Standard Operating Procedure, telephone 5150 4444 – internal extension 415; 13. Management of the person against whom 4. PROCEDURE: SOP 084 Whistleblowers: Investigation - Protection e-mail [email protected] provides detailed procedures to facilitate the making a disclosure has been made 847 Definitions of key terms All correspondence, phone calls and emails from and investigation of disclosures and protection of 14. Criminal offences 858 Three key concepts in the reporting system are improper 15. Review 8 internal or external whistleblowers will be referred whistleblowers from reprisals. SOP 084 is reprinted 85 conduct, corrupt conduct and detrimental action. 16. Reporting structure for East Gippsland Water 8 to the Protected Disclosure Co-ordinator. as follows. 85 Definitions of these terms are set out as follows. Annexure A – Model Register 858 Where a person is contemplating making a disclosure 4.1 Improper conduct and is concerned about approaching the Protected A disclosure may be made about improper conduct by Disclosure Co-ordinator or a Protected Disclosure Officer a public body or public official. Improper conduct means in the workplace, he or she can call the relevant officer conduct that is corrupt, a substantial mismanagement East Gippsland Water Whistleblowers Report 2007-2008: 1 and request a meeting in a discreet location away from of public resources, or conduct involving substantial risk the workplace. to public health or safety or to the environment.

7 8 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL2 East Gippsland REPORT Water - EAST Whistleblowers GIPPSLAND Report 2007-2008WATER 2009/10 7 9 Whistleblowers Protection Act 2001

Whistleblowers Report

1. PURPOSE The conduct must be serious enough to constitute, These procedures establish a system for reporting if proved, a criminal offence or reasonable grounds disclosures of improper conduct or detrimental action for dismissal. by East Gippsland Water or its employees. The system 4.2 Corrupt conduct enables such disclosures to be made to the Protected Investigation of Disclosures Corrupt conduct means: Disclosure Co-ordinator or to one of the nominated Protected Disclosure Officers. Disclosures may be made ● Conduct of any person (whether or not a public and Protection for Whistleblowers by employees or members of the public. official) that adversely affects the honest performance of a public officer’s or public body’s functions; These procedures are designed to complement normal Within the terms of reference of the Whistleblowers Contents communication channels between supervisors and ● The performance of a public officer’s functions Protection Act which came into effect on January 1, 1. Purpose/whistleblowers support statement 2 employees. Employees are encouraged to continue dishonestly or with inappropriate partiality; 2002, no disclosures were made to East Gippsland 2. Approval 2 to raise appropriate matters at any time with their ● Conduct of a public officer, former public officer Region Water C orporation, nor were any disclosures 3. Objectives of the Act 2 supervisors. As an alternative, employees may make or a public body that amounts to a breach of made to the Ombudsman for determination as to 4. Procedures: Definitions of key terms 2 a disclosure of improper conduct or detrimental action public trust; whether such disclosures were public interest 4.1 Improper conduct 2 under the Act in accordance with these procedures. ● Conduct by a public officer, former public officer disclosures. 4.2 Corrupt conduct 2 4.3 Detrimental act 2 1.1 Statement of support to whistleblowers or a public body that amounts to the misuse of No investigation or disclosure of any type was taken information or material acquired in the course of over from East Gippsland Water by the Ombudsman, and 5. The reporting system 2 East Gippsland Water is committed to the aims and 5.1 Contact persons within East Gippsland Water 2 the performance of their official functions; or no requests by complainants to have disclosures objectives of the 5.2 Alternative contact persons 3 ● A conspiracy or attempt to engage in the above investigated by the Ombudsman due to their dissatisfaction Whistleblowers Protection Act 2001 (the Act). It does 6. Roles and responsibilities 3 conduct. with the way East Gippsland Water investigated any matter, not tolerate improper conduct by its employees, officers 6.1 Employees 3 were received. or members, nor taking of reprisals against those who 6.2 Protected Disclosure Officers 3 4.3 Detrimental action come forward to disclose such conduct. East Gippsland Water did not decline to investigate any 6.3 Protected Disclosure Co-ordinator 3 The Act makes it an offence for a person to take disclosure and no recommendations were received by 6.4 Investigator 3 East Gippsland Water recognises the value of detrimental action against a person in reprisal for East Gippsland Water from the Ombudsman in relation to 6.5 Welfare Manager 3 transparency and accountability in its administrative a protected disclosure. Detrimental action includes: any aspect of the Whistleblowers Protection Act. 7. Confidentiality 4 and management practices, and supports the making ● Action causing injury, loss or damage; 8. Collating and publishing statistics 4 of disclosures that reveal corrupt conduct, conduct Policy No 31 (as follows) was adopted on February 19, ● Intimidation or harassment; and 2002. The policy reads: “East Gippsland Region Water 9. Receiving and assessing disclosures 4 involving a substantial mismanagement of public ● Discrimination, disadvantage or adverse treatment in Corporation (EGW) is committed to the aims and objectives 9.1 Has the disclosure been made in accordance resources, or conduct involving a substantial risk with Part 2 of the Act? 4 relation to a person’s employment, career, profession, of the Whistleblowers Protection Act 2001 and will not to public health and safety or the environment. 9.1.1 Has the disclosure been made to the trade or business, including the taking of disciplinary tolerate improper conduct by its employees, officers or East Gippsland Water will take all reasonable steps to appropriate person? 4 action. members, nor the taking of reprisals against those who protect people who make such disclosures from any 9.1.2 Does the disclosure contain the essential come forward to disclose such conduct. detrimental action in reprisal for making the disclosure. elements of a protected disclosure? 4 It will also afford natural justice to the person who is 5. THE REPORTING SYSTEM East Gippsland Water recognises the value of transparency 9.2 Is the disclosure a public interest disclosure? 5 the subject of the disclosure. and accountability in its administrative and management 10. Investigations 5 5.1 Contact persons practices, and supports the making of disclosures that 10.1 Introduction 5 - East Gippsland Water 2. APPROVAL reveal corrupt conduct, conduct involving a substantial 10.2 Terms of reference 5 Disclosures of improper conduct or detrimental action mismanagement of public resources, or conduct 10.3 Investigation plan 5 Managing Director by East Gippsland Water or its employees, may be made involving a substantial risk to public health and safety 10.4 Natural justice 5 to the following officers: or the environment. 10.5 Conduct of the investigation 6 3. OBJECTIVES OF THE ACT ● 10.6 Referral investigation to ombudsman 6 The Protected Disclosure Co-ordinator East Gippsland Water will take all reasonable steps to protect The Whistleblowers Protection Act 2001 commenced 10.7 Reporting requirements 6 East Gippsland Water persons who make such disclosures from any detrimental operation on 1 January 2002. The purpose of the Act 11. Action taken after an investigation 6 Managing Director, Les Mathieson: action in reprisal for making the disclosure. It will also afford is to encourage and facilitate the making of disclosures 11.1 Investigator’ s final report 6 telephone 5150 4444 – internal extension 417; natural justice to the person who is the subject of the of improper conduct by public officers and public bodies. 11.2 Action to be taken 6 e-mail [email protected] disclosure. The Act provides protection to whistleblowers who make 12. Managing welfare of the whistleblower 6 ● disclosures in accordance with the Act, and establishes The Protected Disclosure Officer A copy of the Whistleblowers Protection Act 2001 12.1 Commitment to protect. whistleblowers 6 a system for the matters disclosed to be investigated East Gippsland Water Ombudsman’s Guidelines is registered on File No. 12.2 Keeping the whistleblower informed 7 Executive Manager Corporate Development and 0/040/570 Document No. 24620.” 12.3 Occurrence of detrimental action 7 and rectifying action to be taken. Services, Brett Millington: 12.4 Whistleblowers/ improper conduct 7 East Gippsland Water’s Standard Operating Procedure, telephone 5150 4444 – internal extension 415; 13. Management of the person against whom 4. PROCEDURE: SOP 084 Whistleblowers: Investigation - Protection e-mail [email protected] provides detailed procedures to facilitate the making a disclosure has been made 7 Definitions of key terms All correspondence, phone calls and emails from and investigation of disclosures and protection of 14. Criminal offences 8 Three key concepts in the reporting system are improper 15. Review 8 internal or external whistleblowers will be referred whistleblowers from reprisals. SOP 084 is reprinted conduct, corrupt conduct and detrimental action. 16. Reporting structure for East Gippsland Water 8 to the Protected Disclosure Co-ordinator. as follows. Definitions of these terms are set out as follows. Annexure A – Model Register 8 Where a person is contemplating making a disclosure 4.1 Improper conduct and is concerned about approaching the Protected A disclosure may be made about improper conduct by Disclosure Co-ordinator or a Protected Disclosure Officer a public body or public official. Improper conduct means in the workplace, he or she can call the relevant officer conduct that is corrupt, a substantial mismanagement East Gippsland Water Whistleblowers Report 2007-2008: 1 and request a meeting in a discreet location away from of public resources, or conduct involving substantial risk the workplace. to public health or safety or to the environment.

7 8 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 ANNUAL2 East Gippsland REPORT Water - EAST Whistleblowers GIPPSLAND Report 2007-2008WATER 2009/10 7 9 Whistleblowers Report WhistleblowersWhistleblowers Report Report

5.2 Alternative contact persons ● Commit to writing any disclosure made orally; 7. CONFIDENTIALITY ● The number and types of disclosed matters referred to A disclosure about improper conduct or detrimental ● Impartially assess the allegation and determine East Gippsland Water will take all reasonable steps to the public body by the Ombudsman for investigation; action by East Gippsland Water or its employees, whether it is a disclosure made in accordance with protect the identity of the whistleblower. Maintaining ● The number and types of disclosures referred by may also be made directly to the Ombudsman: Part 2 of the Act (that is, a protected disclosure); confidentiality is crucial in ensuring reprisals are not made the public body to the Ombudsman for investigation; The Ombudsman Victoria ● Take all necessary steps to ensure the identity of the against a whistleblower. ● The number and types of investigations taken over Level 3 (South Tower), 459 Collins Street whistleblower and the identity of the person who is The Act requires any person who receives information due from the public body by the Ombudsman; Melbourne Victoria 3000 the subject of the disclosure are kept confidential; to the handling or investigation of a protected disclosure, ● The number of requests made by a whistleblower to (DX 210174) ● Forward all disclosures and supporting evidence to not to disclose that information except in certain limited the Ombudsman to take over an investigation by the Internet: www.ombudsman.vic.gov.au the Protected Disclosure Co-ordinator; circumstances. Disclosure of information in breach of public body; Email: [email protected] ● Liaise with the Managing Director East Gippsland section 22 constitutes an offence that is punishable by ● The number and types of disclosed matters that Toll Free: 1800 806 314 Water. a maximum fine of 60 penalty units ($6000) or six the public body has declined to investigate; months imprisonment or both. ● The number and types of disclosed matters that were 6.3 Protected Disclosure Co-ordinator The following table sets out where disclosures about substantiated upon investigation and the action taken The Protected Disclosure Co-ordinator has a central The circumstances in which a person may disclose persons other than employees of East Gippsland Water on completion of the investigation; and clearinghouse role in the internal reporting system. He or information obtained about a protected disclosure include: should be made. ● Any recommendations made by the Ombudsman she will: ● Where exercising the functions of the public body relating to the public body. ● Receive all disclosures forwarded from the Protected under the Act; Disclosure Officers; ● When making a report or recommendation under Person who is Person/body to 9. RECEIVING AND ASSESSING DISCLOSURES the subject of whom the disclosure ● Receive all phone calls, emails and letters from the Act; the disclosure must be made members of the public or employees seeking to ● When publishing statistics in the annual report 9.1 Has the disclosure been made in make a disclosure; of a public body; and accordance with Part 2 of the Act? Employee of a That public body ● Impartially assess each disclosure to determine ● In criminal proceedings for certain offences in the Act. public body or the Ombudsman Where a disclosure has been received by the whether it is a public interest disclosure; However, the Act prohibits the inclusion of particulars in Protected Disclosure Officer or by the Protected Disclosure Member of Parliament Speaker of the ● Refer all public interest disclosures to the Ombudsman; any report or recommendation that is likely to lead to the Co-ordinator, he or she will assess whether the disclosure (Legislative Assembly) Legislative Assembly ● Be responsible for carrying out, or appointing an identification of the whistleblower. The Act also prohibits has been made in accordance with Part 2 of the Act Member of Parliament President of the investigator to carry out, an investigation referred the identification of the person who is the subject of the and is, therefore, a protected disclosure. (Legislative Council) Legislative Council to the public body by the Ombudsman; disclosure in any particulars included in an annual report. 9.1.1 Has the disclosure been made ● Be responsible for overseeing and co-ordinating an Councillor The Ombudsman East Gippsland Water will ensure all files, whether paper investigation where an investigator has been appointed; to the appropriate person? Chief Commissioner The Ombudsman or or on computer disk (all electronic files must be suitably ● ● For the disclosure to be responded to by East of Police Deputy Ombudsman Appoint a Welfare Manager to support the password protected) are kept under lock and key in the whistleblower and to protect him or her from Gippsland Water, it must concern an employee, Member of the The Ombudsman, personnel files cabinet, and can only be accessed by the any reprisals; member or officer of East Gippsland Water. If the police force Deputy Ombudsman Protected Disclosure Co-ordinator, Protected Disclosure disclosure concerns an employee, officer or member ● Advise the whistleblower of the progress of or Chief Commissioner Officer, the Investigator or Welfare Manager (in relation of another public body, the person who has made an investigation into the disclosed matter; of Police to welfare matters). All printed material will be kept in the disclosure must be advised of the correct person ● Establish and manage a confidential filing system, files that are clearly marked as a Whistleblower Protection or body to whom the disclosure should be directed. collate, publish statistics on disclosures made; Act matter, and warn of the criminal penalties that apply (See the table in 5.2). If the disclosure has been made ● 6. ROLES AND RESPONSIBILITIES Take all necessary steps to ensure the identity of to any unauthorised divulging of information concerning anonymously, it should be referred to the Ombudsman. the whistleblower and the identity of the person who a protected disclosure. Electronic files will be produced 6.1 Employees is the subject of the disclosure are kept confidential; and stored on a stand-alone computer and be given 9.1.2 Does the disclosure contain the essential Employees are encouraged to report known or suspected password protection. Backup files will be kept on floppy elements of a protected disclosure? 6.4 Investigator incidences of improper conduct or detrimental action in disc. All materials relevant to an investigation, such as ● To be a protected disclosure, a disclosure must satisfy The Investigator will be responsible for carrying out accordance with these procedures. tapes from interviews, will also be stored securely with the following criteria: an internal investigation into a disclosure where the All employees of East Gippsland Water have an important the whistleblower files. ● Did a natural person (that is, an individual person Ombudsman has referred a matter to East Gippsland role to play in supporting those who have made a East Gippsland Water will not e-mail documents relevant rather than a corporation) make the disclosure? Water. An Investigator may be a person from within an legitimate disclosure. They must refrain from any activity to a whistleblower matter and will ensure all phone calls ● organisation or a consultant engaged for that purpose. Does the disclosure relate to conduct of a public body that is, or could be perceived to be, victimisation or and meetings are conducted in private. or public officer acting in their official capacity? harassment of a person who makes a disclosure. Further, 6.5 Welfare manager ● Is the alleged conduct either improper conduct or they should protect and maintain the confidentiality of a The welfare manager is responsible for looking after 8. COLLATING AND PUBLISHING STATISTICS detrimental action taken against a person in reprisal person they know or suspect to have made a disclosure. the general welfare of the whistleblower. The welfare The Protected Disclosure Co-ordinator will establish a for making a protected disclosure? 6.2 Protected Disclosure Officers manager will: secure register to record the information required to ● Does the person making a disclosure have reasonable ● Protected Disclosure Officers will: Examine the immediate welfare and protection needs be published in the annual report and generally keep grounds for believing the alleged conduct has occurred? of a whistleblower who has made a disclosure and account of the status of whistleblower disclosures. ● Where a disclosure is assessed to be a protected ● Be a contact point for general advice about the seek to foster a supportive work environment; The register will be confidential and will not record disclosure, it is referred to the Protected Disclosure operation of the Act for any person wishing to make ● Advise the whistleblower of the legislative and information that may identify the whistleblower, Co-ordinator. The Protected Disclosure Co-ordinator a disclosure about improper conduct or detrimental administrative protections available; and will contain the following: will determine whether the disclosure is a public action; ● Listen and respond to any concerns of harassment, ● The number and types of disclosures made to public interest disclosure. ● Make arrangements for a disclosure to be made intimidation or victimisation in reprisal for making bodies during the year; ● Where a disclosure is assessed not to be a protected privately and discreetly and, if necessary, away from disclosure; and disclosure, the matter does not need to be dealt with the workplace; ● The number of disclosures referred to the Ombudsman ● Ensure the expectations of the whistleblower are for determination as to whether they are public interest under the Act. The Protected Disclosure Officer will ● Receive any disclosure made orally or in writing realistic. disclosures; decide how the matter should be responded to in (from internal and external whistleblowers); consultation with the Protected Disclosure Co-ordinator.

8 0 ANNUALEast Gippsland REPORT Water Whistleblowers - EAST GIPPSLAND Report 2007-2008: WATER 3 2009/10 ANNUAL4 East Gippsland REPORT Water - EAST Whistleblowers GIPPSLAND Report 2007-2008WATER 2009/10 8 1 Whistleblowers Report WhistleblowersWhistleblowers Report Report

5.2 Alternative contact persons ● Commit to writing any disclosure made orally; 7. CONFIDENTIALITY ● The number and types of disclosed matters referred to A disclosure about improper conduct or detrimental ● Impartially assess the allegation and determine East Gippsland Water will take all reasonable steps to the public body by the Ombudsman for investigation; action by East Gippsland Water or its employees, whether it is a disclosure made in accordance with protect the identity of the whistleblower. Maintaining ● The number and types of disclosures referred by may also be made directly to the Ombudsman: Part 2 of the Act (that is, a protected disclosure); confidentiality is crucial in ensuring reprisals are not made the public body to the Ombudsman for investigation; The Ombudsman Victoria ● Take all necessary steps to ensure the identity of the against a whistleblower. ● The number and types of investigations taken over Level 3 (South Tower), 459 Collins Street whistleblower and the identity of the person who is The Act requires any person who receives information due from the public body by the Ombudsman; Melbourne Victoria 3000 the subject of the disclosure are kept confidential; to the handling or investigation of a protected disclosure, ● The number of requests made by a whistleblower to (DX 210174) ● Forward all disclosures and supporting evidence to not to disclose that information except in certain limited the Ombudsman to take over an investigation by the Internet: www.ombudsman.vic.gov.au the Protected Disclosure Co-ordinator; circumstances. Disclosure of information in breach of public body; Email: [email protected] ● Liaise with the Managing Director East Gippsland section 22 constitutes an offence that is punishable by ● The number and types of disclosed matters that Toll Free: 1800 806 314 Water. a maximum fine of 60 penalty units ($6000) or six the public body has declined to investigate; months imprisonment or both. ● The number and types of disclosed matters that were 6.3 Protected Disclosure Co-ordinator The following table sets out where disclosures about substantiated upon investigation and the action taken The Protected Disclosure Co-ordinator has a central The circumstances in which a person may disclose persons other than employees of East Gippsland Water on completion of the investigation; and clearinghouse role in the internal reporting system. He or information obtained about a protected disclosure include: should be made. ● Any recommendations made by the Ombudsman she will: ● Where exercising the functions of the public body relating to the public body. ● Receive all disclosures forwarded from the Protected under the Act; Disclosure Officers; ● When making a report or recommendation under Person who is Person/body to 9. RECEIVING AND ASSESSING DISCLOSURES the subject of whom the disclosure ● Receive all phone calls, emails and letters from the Act; the disclosure must be made members of the public or employees seeking to ● When publishing statistics in the annual report 9.1 Has the disclosure been made in make a disclosure; of a public body; and accordance with Part 2 of the Act? Employee of a That public body ● Impartially assess each disclosure to determine ● In criminal proceedings for certain offences in the Act. public body or the Ombudsman Where a disclosure has been received by the whether it is a public interest disclosure; However, the Act prohibits the inclusion of particulars in Protected Disclosure Officer or by the Protected Disclosure Member of Parliament Speaker of the ● Refer all public interest disclosures to the Ombudsman; any report or recommendation that is likely to lead to the Co-ordinator, he or she will assess whether the disclosure (Legislative Assembly) Legislative Assembly ● Be responsible for carrying out, or appointing an identification of the whistleblower. The Act also prohibits has been made in accordance with Part 2 of the Act Member of Parliament President of the investigator to carry out, an investigation referred the identification of the person who is the subject of the and is, therefore, a protected disclosure. (Legislative Council) Legislative Council to the public body by the Ombudsman; disclosure in any particulars included in an annual report. 9.1.1 Has the disclosure been made ● Be responsible for overseeing and co-ordinating an Councillor The Ombudsman East Gippsland Water will ensure all files, whether paper investigation where an investigator has been appointed; to the appropriate person? Chief Commissioner The Ombudsman or or on computer disk (all electronic files must be suitably ● ● For the disclosure to be responded to by East of Police Deputy Ombudsman Appoint a Welfare Manager to support the password protected) are kept under lock and key in the whistleblower and to protect him or her from Gippsland Water, it must concern an employee, Member of the The Ombudsman, personnel files cabinet, and can only be accessed by the any reprisals; member or officer of East Gippsland Water. If the police force Deputy Ombudsman Protected Disclosure Co-ordinator, Protected Disclosure disclosure concerns an employee, officer or member ● Advise the whistleblower of the progress of or Chief Commissioner Officer, the Investigator or Welfare Manager (in relation of another public body, the person who has made an investigation into the disclosed matter; of Police to welfare matters). All printed material will be kept in the disclosure must be advised of the correct person ● Establish and manage a confidential filing system, files that are clearly marked as a Whistleblower Protection or body to whom the disclosure should be directed. collate, publish statistics on disclosures made; Act matter, and warn of the criminal penalties that apply (See the table in 5.2). If the disclosure has been made ● 6. ROLES AND RESPONSIBILITIES Take all necessary steps to ensure the identity of to any unauthorised divulging of information concerning anonymously, it should be referred to the Ombudsman. the whistleblower and the identity of the person who a protected disclosure. Electronic files will be produced 6.1 Employees is the subject of the disclosure are kept confidential; and stored on a stand-alone computer and be given 9.1.2 Does the disclosure contain the essential Employees are encouraged to report known or suspected password protection. Backup files will be kept on floppy elements of a protected disclosure? 6.4 Investigator incidences of improper conduct or detrimental action in disc. All materials relevant to an investigation, such as ● To be a protected disclosure, a disclosure must satisfy The Investigator will be responsible for carrying out accordance with these procedures. tapes from interviews, will also be stored securely with the following criteria: an internal investigation into a disclosure where the All employees of East Gippsland Water have an important the whistleblower files. ● Did a natural person (that is, an individual person Ombudsman has referred a matter to East Gippsland role to play in supporting those who have made a East Gippsland Water will not e-mail documents relevant rather than a corporation) make the disclosure? Water. An Investigator may be a person from within an legitimate disclosure. They must refrain from any activity to a whistleblower matter and will ensure all phone calls ● organisation or a consultant engaged for that purpose. Does the disclosure relate to conduct of a public body that is, or could be perceived to be, victimisation or and meetings are conducted in private. or public officer acting in their official capacity? harassment of a person who makes a disclosure. Further, 6.5 Welfare manager ● Is the alleged conduct either improper conduct or they should protect and maintain the confidentiality of a The welfare manager is responsible for looking after 8. COLLATING AND PUBLISHING STATISTICS detrimental action taken against a person in reprisal person they know or suspect to have made a disclosure. the general welfare of the whistleblower. The welfare The Protected Disclosure Co-ordinator will establish a for making a protected disclosure? 6.2 Protected Disclosure Officers manager will: secure register to record the information required to ● Does the person making a disclosure have reasonable ● Protected Disclosure Officers will: Examine the immediate welfare and protection needs be published in the annual report and generally keep grounds for believing the alleged conduct has occurred? of a whistleblower who has made a disclosure and account of the status of whistleblower disclosures. ● Where a disclosure is assessed to be a protected ● Be a contact point for general advice about the seek to foster a supportive work environment; The register will be confidential and will not record disclosure, it is referred to the Protected Disclosure operation of the Act for any person wishing to make ● Advise the whistleblower of the legislative and information that may identify the whistleblower, Co-ordinator. The Protected Disclosure Co-ordinator a disclosure about improper conduct or detrimental administrative protections available; and will contain the following: will determine whether the disclosure is a public action; ● Listen and respond to any concerns of harassment, ● The number and types of disclosures made to public interest disclosure. ● Make arrangements for a disclosure to be made intimidation or victimisation in reprisal for making bodies during the year; ● Where a disclosure is assessed not to be a protected privately and discreetly and, if necessary, away from disclosure; and disclosure, the matter does not need to be dealt with the workplace; ● The number of disclosures referred to the Ombudsman ● Ensure the expectations of the whistleblower are for determination as to whether they are public interest under the Act. The Protected Disclosure Officer will ● Receive any disclosure made orally or in writing realistic. disclosures; decide how the matter should be responded to in (from internal and external whistleblowers); consultation with the Protected Disclosure Co-ordinator.

8 0 ANNUALEast Gippsland REPORT Water Whistleblowers - EAST GIPPSLAND Report 2007-2008: WATER 3 2009/10 ANNUAL4 East Gippsland REPORT Water - EAST Whistleblowers GIPPSLAND Report 2007-2008WATER 2009/10 8 1 WhistleblowersWhistleblowers Report Report

9.2 Is the disclosure a public interest disclosure? ● To make recommendations arising from the conclusions ● Where the Protected Disclosure Officer or Co-ordinator drawn concerning remedial or other appropriate action. has received a disclosure that has been assessed to 10.2 Terms of reference be a protected disclosure, the Protected Disclosure Before commencing an investigation, the Protected Co-ordinator will determine whether the disclosure Disclosure Co-ordinator will draw up terms of reference. amounts to a public interest disclosure. This assessment The terms of reference will set a date by which the will be made within 45 days of the receipt of the investigation report is to be concluded, and will describe disclosure. the resources available to the Investigator to complete ● In reaching a conclusion as to whether a protected the investigation within the time set. The Protected disclosure is a public interest disclosure, the Protected Disclosure Co-ordinator may approve, if reasonable, Disclosure Co-ordinator will consider whether the an extension of time requested by the Investigator. disclosure shows, or tends to show, that the public The terms of reference will require the Investigator officer to whom the disclosure relates: to make regular reports to the Protected Disclosure ● Has engaged, is engaging or proposes to engage in Co-ordinator who, in turn, is to keep the Ombudsman improper conduct in his or her capacity as a public informed of general progress. officer; or ● Has taken, is taking or proposes to take detrimental 10.3 Investigation plan action in reprisal for the making of the protected The Investigator will prepare an investigation plan disclosure. for approval by the Protected Disclosure Co-ordinator. The plan will list the issues to be substantiated and ● Where the Protected Disclosure Co-ordinator concludes describe the avenue of inquiry. It will address the that the disclosure amounts to a public interest following issues: disclosure, he or she will: ● What is being alleged? ● Notify the person who made the disclosure of that ● What are the possible findings or offences? conclusion; and ● What are the facts in issue? ● Refer the disclosure to the Ombudsman for formal ● How is the inquiry to be conducted? determination as to whether it is indeed a public ● interest disclosure. What resources are required? At the commencement of the investigation, the whistleblower should be: Where the Protected Disclosure Co-ordinator concludes ● Notified by the Investigator that he or she has been that the disclosure is not a public interest disclosure, appointed to conduct the investigation; he or she will: ● Asked to clarify any matters; and ● Notify the person who made the disclosure of ● Provide any additional material. that conclusion; and The Investigator will be sensitive to whistleblowers’ ● Advise that person that he or she may request the possible fear of reprisals and will be aware of statutory public body to refer the disclosure to the Ombudsman protections provided to whistleblowers. for a formal determination as to whether the disclosure is a public interest disclosure, and that this request must 10.4 Natural justice be made within 28 days of the notification. The principles of natural justice will be followed in any In either case, the Protected Disclosure Co-ordinator will investigation of a public interest disclosure. The principles make the notification and the referral within 14 days of of natural justice concern procedural fairness and ensure the conclusion being reached by the public body. a fair decision is reached by an objective decision maker. Notification to the whistleblower is not necessary Maintaining procedural fairness protects the rights of where the disclosure has been made anonymously. individuals and enhances public confidence in the process. East Gippsland Water will have regard to 10. INVESTIGATIONS the following issues in ensuring procedural fairness: ● The person who is the subject of the disclosure is 10.1 Introduction entitled to know the allegations made against him Where the Ombudsman refers a protected disclosure or her and must be given the right to respond. to East Gippsland Water for investigation, the Protected (This does not mean the person must be advised of Disclosure Co-ordinator will appoint an investigator to the allegation as soon as the disclosure is received carry out the investigation. or the investigation has commenced); The objectives of an investigation will be: ● If the Investigator is contemplating making a report ● To collate information relating to the allegation as adverse to the interests of any person, that person quickly as possible. This may involve steps to protect should be given the opportunity to put forward further or preserve documents, materials and equipment; material that may influence the outcome of the report ● Consider information collected/draw conclusions and that person(s) defence should be fairly set out in objectively and impartially; the report; ● To maintain procedural fairness in the treatment ● All relevant parties to a matter should be heard of witnesses and the person who is the subject and all submissions should be considered; of the disclosure; and ● A decision should not be made until all reasonable inquiries have been made;

8 2 ANNUALEast Gippsland REPORT Water Whistleblowers - EAST GIPPSLAND Report 2007-2008: WATER 5 2009/10 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 8 3 WhistleblowersWhistleblowers Report Report Whistleblowers Report

9.2 Is the disclosure a public interest disclosure? ● To make recommendations arising from the conclusions ● The Investigator or any decision maker should not have Where the Investigator has found that the conduct ● Where the Protected Disclosure Officer or Co-ordinator drawn concerning remedial or other appropriate action. a personal or direct interest in the matter being disclosed by the whistleblower has occurred, has received a disclosure that has been assessed to investigated; recommendations made by the Investigator will include: 10.2 Terms of reference be a protected disclosure, the Protected Disclosure ● All proceedings must be carried out fairly and without ● The steps that need to be taken by East Gippsland Before commencing an investigation, the Protected Co-ordinator will determine whether the disclosure bias. Care should be taken to exclude perceived bias Water to prevent the conduct from continuing or Disclosure Co-ordinator will draw up terms of reference. amounts to a public interest disclosure. This assessment from the process; and ?The Investigator must be occurring in the future; and The terms of reference will set a date by which the will be made within 45 days of the receipt of the impartial in assessing the credibility of the ● Any action that should be taken by East Gippsland investigation report is to be concluded, and will describe disclosure. whistleblowers and any witnesses. Where appropriate, Water to remedy any harm or loss arising from the the resources available to the Investigator to complete ● In reaching a conclusion as to whether a protected conclusions as to credibility should be included in the conduct. This action may include bringing disciplinary the investigation within the time set. The Protected disclosure is a public interest disclosure, the Protected investigation report. proceedings against the person responsible for the Disclosure Co-ordinator may approve, if reasonable, Disclosure Co-ordinator will consider whether the conduct, and referring the matter to an appropriate an extension of time requested by the Investigator. 10.5 Conduct of the investigation disclosure shows, or tends to show, that the public authority for further consideration. The terms of reference will require the Investigator The Investigator will make contemporaneous notes of officer to whom the disclosure relates: The report will be accompanied by: to make regular reports to the Protected Disclosure all discussions and phone calls, and all interviews with ● Has engaged, is engaging or proposes to engage in Co-ordinator who, in turn, is to keep the Ombudsman witnesses will be taped. All information gathered in an ● Transcript or other record of any oral evidence taken improper conduct in his or her capacity as a public informed of general progress. investigation will be stored securely. Interviews will be including tape recordings; officer; or conducted in private and the Investigator will take all ● All documents, statements or other exhibits received 10.3 Investigation plan ● Has taken, is taking or proposes to take detrimental reasonable steps to protect the identity of the by the officer and accepted as evidence during the The Investigator will prepare an investigation plan action in reprisal for the making of the protected whistleblower. Where disclosure of the identity of course of the investigation. disclosure. for approval by the Protected Disclosure Co-ordinator. the whistleblower cannot be avoided, due to the Where the Investigator’ report is to include an adverse The plan will list the issues to be substantiated and ● Where the Protected Disclosure Co-ordinator concludes nature of the allegations, the Investigator will warn comment against any person, that person will be given describe the avenue of inquiry. It will address the that the disclosure amounts to a public interest the whistleblower and his or her Welfare Manager the opportunity to respond and his or her defence will following issues: disclosure, he or she will: of this probability. be fairly included in the report. ● What is being alleged? ● Notify the person who made the disclosure of that It is at the discretion of the Investigator to allow any ● What are the possible findings or offences? The report will not disclose details likely to lead conclusion; and witness to have legal or other representation or support to identification of the whistleblower. ● What are the facts in issue? ● Refer the disclosure to the Ombudsman for formal during an interview. If a witness has a special need for ● How is the inquiry to be conducted? determination as to whether it is indeed a public legal representation or support, permission should be 11.2 Action to be taken ● interest disclosure. What resources are required? At the commencement granted. If the Protected Disclosure Co-ordinator is satisfied that of the investigation, the whistleblower should be: the investigation has found that the disclosed conduct Where the Protected Disclosure Co-ordinator concludes ● Notified by the Investigator that he or she has been 10.6 Referral of an investigation has occurred, he or she will recommend the action that that the disclosure is not a public interest disclosure, appointed to conduct the investigation; to the Ombudsman must be taken to prevent the conduct from continuing he or she will: ● Asked to clarify any matters; and The Protected Disclosure Co-ordinator will make a decision or occurring in the future. The Protected Disclosure ● Notify the person who made the disclosure of ● Provide any additional material. regarding the referral of an investigation to the Co-ordinator may also recommend that action be taken that conclusion; and Ombudsman where, on the advice of the Investigator: to remedy any harm or loss arising from the conduct. ● The Investigator will be sensitive to whistleblowers’ Advise that person that he or she may request the ● possible fear of reprisals and will be aware of statutory The investigation is being obstructed by, for example, The Protected Disclosure Co-ordinator will provide a public body to refer the disclosure to the Ombudsman protections provided to whistleblowers. the non-co-operation of key witnesses; or written report to the Minister for Conservation and for a formal determination as to whether the disclosure ● The investigation has revealed conduct that may Environment, the Ombudsman and the whistleblower is a public interest disclosure, and that this request must 10.4 Natural justice constitute a criminal offence. setting out the findings of the investigation and any be made within 28 days of the notification. The principles of natural justice will be followed in any remedial steps taken. Where the investigation concludes 10.7 Reporting requirements In either case, the Protected Disclosure Co-ordinator will investigation of a public interest disclosure. The principles that the disclosed conduct did not occur, the Protected make the notification and the referral within 14 days of of natural justice concern procedural fairness and ensure The Protected Disclosure Co-ordinator will ensure the Disclosure Co-ordinator will report these findings to the the conclusion being reached by the public body. a fair decision is reached by an objective decision maker. whistleblower is kept regularly informed concerning the Ombudsman and to the whistleblower. Notification to the whistleblower is not necessary Maintaining procedural fairness protects the rights of handling of a protected disclosure and an investigation. where the disclosure has been made anonymously. individuals and enhances public confidence in the The Protected Disclosure Co-ordinator will report to the 12. MANAGING THE WELFARE process. East Gippsland Water will have regard to Ombudsman about the progress of an investigation. OF THE WHISTLEBLOWER 10. INVESTIGATIONS the following issues in ensuring procedural fairness: Where the Ombudsman or the whistleblower requests ● The person who is the subject of the disclosure is 12.1 Commitment to protecting whistleblowers 10.1 Introduction information about the progress of an investigation, that entitled to know the allegations made against him information will be provided within 28 days of the date East Gippsland Water is committed to the protection Where the Ombudsman refers a protected disclosure or her and must be given the right to respond. of the request. of genuine whistleblowers against detrimental action to East Gippsland Water for investigation, the Protected (This does not mean the person must be advised of taken in reprisal for the making of protected disclosures. Disclosure Co-ordinator will appoint an investigator to the allegation as soon as the disclosure is received The Protected Disclosure Co-ordinator is responsible for carry out the investigation. 11. ACTION TAKEN AFTER AN INVESTIGATION or the investigation has commenced); ensuring whistleblowers are protected from direct and The objectives of an investigation will be: ● If the Investigator is contemplating making a report 11.1 Investigator’s final report indirect detrimental action, and that the culture of the ● To collate information relating to the allegation as adverse to the interests of any person, that person At the conclusion of the investigation, the Investigator workplace is supportive of protected disclosures being quickly as possible. This may involve steps to protect should be given the opportunity to put forward further will submit a written report of his or her findings to the made. or preserve documents, materials and equipment; material that may influence the outcome of the report Protected Disclosure Co-ordinator. The report will contain: The Protected Disclosure Co-ordinator will appoint a ● Consider information collected/draw conclusions and that person(s) defence should be fairly set out in ● The allegation/s: Welfare Manager to all whistleblowers who have made objectively and impartially; the report; ● An account of all relevant information received and, a protected disclosure. The Welfare Manager will: ● To maintain procedural fairness in the treatment ● All relevant parties to a matter should be heard if the Investigator has rejected evidence as being ● Examine the immediate welfare and protection needs of witnesses and the person who is the subject and all submissions should be considered; unreliable, the reasons for this opinion being formed; of a whistleblower who has made a disclosure and, of the disclosure; and ● A decision should not be made until all reasonable ● The conclusions reached and the basis for them; and where the whistleblower is an employee, seek to inquiries have been made; ● Any recommendations arising from the conclusions. foster a supportive work environment;

8 2 ANNUALEast Gippsland REPORT Water Whistleblowers - EAST GIPPSLAND Report 2007-2008: WATER 5 2009/10 ANNUAL6 East REPORT Gippsland - WaterEAST Whistleblowers GIPPSLAND Report WATER 2007-2008: 2009/10 8 3 Whistleblowers Report Whistleblowers Report

● Advise the whistleblower of legislative and 12.4 Whistleblowers implicated ● Given the opportunity to answer the allegations 2. It is an offence for a person to divulge information administrative protections available to him or her; in improper conduct before a final decision is made; obtained as a result of the handling or investigation ● Listen and respond to any concerns of harassment, Where a person who makes a disclosure is implicated ● Informed as to the substance of any adverse of a protected disclosure without legislative authority. intimidation or victimisation in reprisal for making in misconduct, East Gippsland Water will handle the comment that may be included in any report The Act provides a maximum penalty of 60 penalty disclosure; disclosure and protect the whistleblower from reprisals arising from the investigation; and has units ($6,000) or six months imprisonment or both. ● Keep a contemporaneous record of all aspects of the in accordance with the Act, the Ombudsman’s guidelines ● His or her defence set out fairly in any report. 3. It is an offence for a person to obstruct the case management of the whistleblower including all and these procedures. East Gippsland Water Where the allegations in a disclosure have been Ombudsman in performing his responsibilities under contact and follow-up action; and acknowledges that the act of whistleblowing should not investigated, and the person who is the subject the Act. The Act provides a maximum penalty of 240 shield whistleblowers from the reasonable consequences ● Ensure the expectations of the whistleblower are of the disclosure is aware of the allegations or the penalty units ($24,000) or two years imprisonment flowing from any involvement in improper conduct. realistic. fact of the investigation, the Protected Disclosure or both. Section 17 of the Act specifically provides that a All employees will be advised that it is an offence Co-ordinator will formally advise the person who 4. It is an offence for a person to knowingly provide person’s liability for personal conduct is not affected for a person to take detrimental action in reprisal for is the subject of the disclosure of the outcome of false information under the Act with the intention that by the person’s disclosure of that conduct under the Act. a protected disclosure. The maximum penalty is a fine the investigation. it be acted on as a disclosed matter. The Act provides In some circumstances an admission may be a mitigating of 240 penalty units ($24,000) or two years imprisonment a maximum penalty of 240 penalty units ($24,000) factor in considering disciplinary or other action. East Gippsland Water will give its full support to a or both. The taking of detrimental action in breach of this person who is the subject of a disclosure where the or two years imprisonment or both. The Protected Disclosure Co-ordinator will make the final provision can also be grounds for making a disclosure allegations contained in a disclosure are clearly wrong decision as to whether disciplinary or other action will under the Act and can result in an investigation. or unsubstantiated. If the matter has been publicly 15. REVIEW be taken against a whistleblower. Where disciplinary or Detrimental action includes: disclosed, the Managing Director of East Gippsland These procedures will be reviewed annually to ensure other action relates to conduct that is the subject of the Water will consider any request by that person to issue they meet the objectives of the Act and accord with ● Causing injury, loss or damage; whistleblower’s disclosure, disciplinary/other action will a statement of support setting out that the allegations the Ombudsman’s guidelines. ● Intimidation or harassment; and only be taken after the disclosed matter has been dealt were clearly wrong or unsubstantiated. ● with appropriately. Discrimination, disadvantage or adverse treatment in 16. REPORTING STRUCTURE FOR relation to a person(s) employment, career, profession, In all cases where disciplinary or other action is being 14. CRIMINAL OFFENCES EAST GIPPSLAND WATER trade or business (including the taking of disciplinary contemplated, the Managing Director must be East Gippsland Water will ensure officers appointed to action). satisfied that it has been clearly demonstrated that: handle protected disclosures and all other employees ● The intention to proceed with disciplinary action is 12.2 Keeping the whistleblower informed are aware of the following offences created by the Act: not causally connected to the making of the disclosure The Protected Disclosure Co-ordinator will ensure the 1. (as opposed to the content of the disclosure or other It is an offence for a person to take detrimental action Managing whistleblower is kept informed of action taken in relation available information); against a person in reprisal for a protected disclosure Director and to his or her disclosure, and the time frames that apply. being made. The Act provides a maximum penalty of Protected Welfare ● There are good and sufficient grounds that would fully Investigator The whistleblower will be informed of the objectives of a fine of 240 penalty units ($24,000) or two years Disclosure Manager justify action against any non- whistleblower in the Co-ordinator an investigation, the findings of an investigation, and imprisonment or both. same circumstances; and the steps taken by East Gippsland Water to address any and officer ● improper conduct that has been found to have occurred. There are good and sufficient grounds that justify The whistleblower will be given reasons for decisions exercising any discretion to institute disciplinary or Annexure A – Model Register made by East Gippsland Water in relation to a protected other action. The register below records information about disclosures made to East Gippsland Water that have been determined disclosure. All communication with the whistleblower will The Protected Disclosure Co-ordinator will thoroughly to be protected disclosures. document the process including recording the reasons be in plain English. File A File B File C File D File E why the disciplinary or other action is being taken, and 12.3 Occurrence of detrimental action the reasons why the action is not in retribution for the Date disclosure received If a whistleblower reports an incident of harassment, making of the disclosure. The Protected Disclosure Type of disclosure discrimination or adverse treatment that would amount Co-ordinator will clearly advise the whistleblower of Is disclosure a public interest disclosure? to detrimental action taken in reprisal for making the the proposed action to be taken, and of any mitigating disclosure, the Welfare Manager will: factors that have been taken into account. Date above determination made ● Record details of the incident; Date WB* informed of determination ● Advise the whistleblower of his or her rights under 13. MANAGING PERSONS AGAINST WHOM the Act; and A DISCLOSURE HAS BEEN MADE Date disclosure referred to the Ombudsman ● Advise the Protected Disclosure Co-ordinator of the East Gippsland Water recognises that employees against Determination made by Ombudsman detrimental action. whom disclosures are made must also be supported Was the investigation referred back to the Ombudsman? The taking of detrimental action in reprisal for the during the handling and investigation of disclosures. East Did the Ombudsman take over the investigation? making of a disclosure can be an offence against the Gippsland Water will take all reasonable steps to ensure Act as well as grounds for making a further disclosure. the confidentiality of the person who is the subject of Did WB request Ombudsman to take over investigation? the disclosure during the assessment and investigation Where such detrimental action is reported, the Protected Findings of the public body Disclosure Co-ordinator will assess the report as a new process. Where investigations do not substantiate disclosure under the Act. Where the Protected Disclosure disclosures, the fact that the investigation has been carried Recommendations made by the Ombudsman Co-ordinator is satisfied that the disclosure is a public out, the results of the investigation, and the identity of the Date reporting requirements satisfied person who is the subject of the disclosure will remain interest disclosure, he or she will refer it to the * WB refers to whistleblower Ombudsman. If the Ombudsman subsequently confidential. determines the matter to be a public interest disclosure, The Protected Disclosure Co-ordinator will ensure the the Ombudsman may investigate the matter or refer it person who is the subject of any disclosure investigated HEAD OFFICE: 133 Macleod Street Bairnsdale 3875 to another body for investigation as outlined in the Act. by or on behalf of a public body is: PO Box 52 B airnsdale 3875 ● Telephone: 03 5150 4444 ● Facsimile: 03 5150 4477 ● Informed as to the substance of the allegations; Email: [email protected] ● Website: www.egwater.vic.gov.au

8 4 ANNUALEast Gippsland REPORT Water Whistleblowers - EAST GIPPSLAND Report 2007-2008: WATER 7 2009/10 ANNUAL8 East Gippsland REPORT Water - EAST Whistleblowers GIPPSLAND Report 200WATER7 -200 8 :2009/10 8 5 Whistleblowers Report Whistleblowers Report

● Advise the whistleblower of legislative and 12.4 Whistleblowers implicated ● Given the opportunity to answer the allegations 2. It is an offence for a person to divulge information administrative protections available to him or her; in improper conduct before a final decision is made; obtained as a result of the handling or investigation ● Listen and respond to any concerns of harassment, Where a person who makes a disclosure is implicated ● Informed as to the substance of any adverse of a protected disclosure without legislative authority. intimidation or victimisation in reprisal for making in misconduct, East Gippsland Water will handle the comment that may be included in any report The Act provides a maximum penalty of 60 penalty disclosure; disclosure and protect the whistleblower from reprisals arising from the investigation; and has units ($6,000) or six months imprisonment or both. ● Keep a contemporaneous record of all aspects of the in accordance with the Act, the Ombudsman’s guidelines ● His or her defence set out fairly in any report. 3. It is an offence for a person to obstruct the case management of the whistleblower including all and these procedures. East Gippsland Water Where the allegations in a disclosure have been Ombudsman in performing his responsibilities under contact and follow-up action; and acknowledges that the act of whistleblowing should not investigated, and the person who is the subject the Act. The Act provides a maximum penalty of 240 shield whistleblowers from the reasonable consequences ● Ensure the expectations of the whistleblower are of the disclosure is aware of the allegations or the penalty units ($24,000) or two years imprisonment flowing from any involvement in improper conduct. realistic. fact of the investigation, the Protected Disclosure or both. Section 17 of the Act specifically provides that a All employees will be advised that it is an offence Co-ordinator will formally advise the person who 4. It is an offence for a person to knowingly provide person’s liability for personal conduct is not affected for a person to take detrimental action in reprisal for is the subject of the disclosure of the outcome of false information under the Act with the intention that by the person’s disclosure of that conduct under the Act. a protected disclosure. The maximum penalty is a fine the investigation. it be acted on as a disclosed matter. The Act provides In some circumstances an admission may be a mitigating of 240 penalty units ($24,000) or two years imprisonment a maximum penalty of 240 penalty units ($24,000) factor in considering disciplinary or other action. East Gippsland Water will give its full support to a or both. The taking of detrimental action in breach of this person who is the subject of a disclosure where the or two years imprisonment or both. The Protected Disclosure Co-ordinator will make the final provision can also be grounds for making a disclosure allegations contained in a disclosure are clearly wrong decision as to whether disciplinary or other action will under the Act and can result in an investigation. or unsubstantiated. If the matter has been publicly 15. REVIEW be taken against a whistleblower. Where disciplinary or Detrimental action includes: disclosed, the Managing Director of East Gippsland These procedures will be reviewed annually to ensure other action relates to conduct that is the subject of the Water will consider any request by that person to issue they meet the objectives of the Act and accord with ● Causing injury, loss or damage; whistleblower’s disclosure, disciplinary/other action will a statement of support setting out that the allegations the Ombudsman’s guidelines. ● Intimidation or harassment; and only be taken after the disclosed matter has been dealt were clearly wrong or unsubstantiated. ● with appropriately. Discrimination, disadvantage or adverse treatment in 16. REPORTING STRUCTURE FOR relation to a person(s) employment, career, profession, In all cases where disciplinary or other action is being 14. CRIMINAL OFFENCES EAST GIPPSLAND WATER trade or business (including the taking of disciplinary contemplated, the Managing Director must be East Gippsland Water will ensure officers appointed to action). satisfied that it has been clearly demonstrated that: handle protected disclosures and all other employees ● The intention to proceed with disciplinary action is 12.2 Keeping the whistleblower informed are aware of the following offences created by the Act: not causally connected to the making of the disclosure The Protected Disclosure Co-ordinator will ensure the 1. (as opposed to the content of the disclosure or other It is an offence for a person to take detrimental action Managing whistleblower is kept informed of action taken in relation available information); against a person in reprisal for a protected disclosure Director and to his or her disclosure, and the time frames that apply. being made. The Act provides a maximum penalty of Protected Welfare ● There are good and sufficient grounds that would fully Investigator The whistleblower will be informed of the objectives of a fine of 240 penalty units ($24,000) or two years Disclosure Manager justify action against any non- whistleblower in the Co-ordinator an investigation, the findings of an investigation, and imprisonment or both. same circumstances; and the steps taken by East Gippsland Water to address any and officer ● improper conduct that has been found to have occurred. There are good and sufficient grounds that justify The whistleblower will be given reasons for decisions exercising any discretion to institute disciplinary or Annexure A – Model Register made by East Gippsland Water in relation to a protected other action. The register below records information about disclosures made to East Gippsland Water that have been determined disclosure. All communication with the whistleblower will The Protected Disclosure Co-ordinator will thoroughly to be protected disclosures. document the process including recording the reasons be in plain English. File A File B File C File D File E why the disciplinary or other action is being taken, and 12.3 Occurrence of detrimental action the reasons why the action is not in retribution for the Date disclosure received If a whistleblower reports an incident of harassment, making of the disclosure. The Protected Disclosure Type of disclosure discrimination or adverse treatment that would amount Co-ordinator will clearly advise the whistleblower of Is disclosure a public interest disclosure? to detrimental action taken in reprisal for making the the proposed action to be taken, and of any mitigating disclosure, the Welfare Manager will: factors that have been taken into account. Date above determination made ● Record details of the incident; Date WB* informed of determination ● Advise the whistleblower of his or her rights under 13. MANAGING PERSONS AGAINST WHOM the Act; and A DISCLOSURE HAS BEEN MADE Date disclosure referred to the Ombudsman ● Advise the Protected Disclosure Co-ordinator of the East Gippsland Water recognises that employees against Determination made by Ombudsman detrimental action. whom disclosures are made must also be supported Was the investigation referred back to the Ombudsman? The taking of detrimental action in reprisal for the during the handling and investigation of disclosures. East Did the Ombudsman take over the investigation? making of a disclosure can be an offence against the Gippsland Water will take all reasonable steps to ensure Act as well as grounds for making a further disclosure. the confidentiality of the person who is the subject of Did WB request Ombudsman to take over investigation? the disclosure during the assessment and investigation Where such detrimental action is reported, the Protected Findings of the public body Disclosure Co-ordinator will assess the report as a new process. Where investigations do not substantiate disclosure under the Act. Where the Protected Disclosure disclosures, the fact that the investigation has been carried Recommendations made by the Ombudsman Co-ordinator is satisfied that the disclosure is a public out, the results of the investigation, and the identity of the Date reporting requirements satisfied person who is the subject of the disclosure will remain interest disclosure, he or she will refer it to the * WB refers to whistleblower Ombudsman. If the Ombudsman subsequently confidential. determines the matter to be a public interest disclosure, The Protected Disclosure Co-ordinator will ensure the the Ombudsman may investigate the matter or refer it person who is the subject of any disclosure investigated HEAD OFFICE: 133 Macleod Street Bairnsdale 3875 to another body for investigation as outlined in the Act. by or on behalf of a public body is: PO Box 52 B airnsdale 3875 ● Telephone: 03 5150 4444 ● Facsimile: 03 5150 4477 ● Informed as to the substance of the allegations; Email: [email protected] ● Website: www.egwater.vic.gov.au

8 4 ANNUALEast Gippsland REPORT Water Whistleblowers - EAST GIPPSLAND Report 2007-2008: WATER 7 2009/10 ANNUAL8 East Gippsland REPORT Water - EAST Whistleblowers GIPPSLAND Report 200WATER7 -200 8 :2009/10 8 5 Disclosure Index The Annual Report of the East Gippsland Region Water Corporation is prepared in accordance with all relevant Victorian legislation. This index has been prepared to facilitate identification of the Corporation’s compliance with statutory disclosure requirements. Legislation Disclosure Required Page Ministerial Directions Report of Operations

Charter and purpose FRD 22B Manner of establishment and the relevant Ministers 1 FRD 22B Objectives, functions, powers and duties 1-2 FRD 22B Nature and range of services provided Inside front cover, 1

Management and structure FRD 22B Organisational structure 4–6 Financial and other information FRD 10 Disclosure Index 86 FRD 12A Disclosure of major contracts 36 FRD 22B Workforce data – 2 year comparison of 21 FRD 22B Employment and conduct principles 21 FRD 22B 5 year summary of financial results 33 FRD 22B Summary of financial results for the year 34 FRD 22B Significant changes in financial position for the year 34 FRD 22B Operational and budgetary objectives and performance against objectives 2-3, 37–40 FRD 22B Major changes or factors affecting performance 40–41 FRD 22B Subsequent events 35, 74 FRD 22B Details of consultancies over $100,000 36 FRD 22B Details of consultancies under $100,000 36 FRD 22B Application and operation of Freedom of Information Act 1982 35 FRD 22B Application and operation of the Whistleblowers Protection Act 2001 35, 78–85 FRD 22B Compliance with building and maintenance provisions of Building Act 1993 35 FRD 22B Statement on National Competition Policy 35 FRD 22B Occupational health and safety policy 21-22 FRD 22B Statement of availability of other information 36 FRD 24C Office-based environmental data 13 FRD 25 Victorian Industry Participation Policy disclosures 35 FRD 30 Standard requirements for the design and print of annual reports Entire annual report 1 SD 4.2 (j) Accountable officer’s declaration 2 SD 4.5.5 Risk management compliance attestation 3 Financial Report Financial statements required under Part 7 of the Financial Management Act 1994 FRD 102 Inventories 47 52, 60 FRD 103D Non-current physical assets 47, 51, 52, 60–64 FRD 105 Borrowing costs 46, 51, 66 FRD 106 Impairment of assets 54, 62–64 FRD 109 Intangible assets 47, 53, 56 FRD 110 Cash flow statements 49 FRD 112B Defined benefit superannuation obligations 67 FRD 114A Financial instruments – general government entities and public non financial corporations 71–72 FRD 119 Contributions by owners 46, 50, 59, 68 FRD 121 Infrastructure assets (water/rail) 62-64 FRD 07A Early adoption of authoritative accounting pronouncements 56 FRD10 Disclosure Index 86 FRD 17A Long service leave wage inflation and discount rates 65 FRD 21A Responsible person and executive officer disclosures in the Financial Report 70 SD 4.2(a) Statement of changes in equity 48 SD 4.2(b) Statement of comprehensive income 46 SD 4.2(b) Balance sheet 47 SD 4.2(b) Cash flow statement 49 SD 4.2(b) Notes to the financial statements 50–74 SD 4.2(c) Compliance with applicable Australian accounting standards and other authoritative pronouncements 75 SD 4.2(c) Compliance with Ministerial Directions 75 SD 4.2(c) Accountable officer’s declaration 75 SD 4.2(d) Rounding of amounts 50 Legislation Freedom of Information Act 1982 35, 36 Whistleblowers Protection Act 2001 35, 78–85 Building Act 1993 35 Victorian Industry Participation Policy Act 2003 35 Financial Management Act 1994 2, 42, 50, 75 Water Act 1989 1, 4

8 6 ANNUAL REPORT - EAST GIPPSLAND WATER 2009/10 HEAD OFFICE 133 Macleod Street Bairnsdale 3875 PO Box 52 Bairnsdale 3875 T: 1300 720 700 F: 03 5150 4477 E: [email protected] www.egwater.vic.gov.au

24 hour emergency and faults service 1300 134 202

© State of Victoria, East Gippsland Water Corporation 2010. This publication is copyright. No part may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968.

Printed on recycled paper.

For more information on this Annual Report contact East Gippsland Water’s Communications Manager (ph: 1300 720 700, E-mail [email protected])

ISSN 1837-2449