2008-2009 ANNUAL REPORT MOUNT ISA WATER BOARD
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
2008-2009 ANNUAL REPORT
MOUNT ISA WATER BOARD
Page 2 of 46
Table of Contents�
Corporate Profile ........................................................................................................ 9�
Highlights .................................................................................................................. 10�
Chair’s Review .......................................................................................................... 11�
Chief Executive’s Report .......................................................................................... 13�
Role and Main Functions .......................................................................................... 14�
Operating Environment ............................................................................................. 15�
Changes to the Operating Environment ................................................................... 18�
Key Stakeholders Matters of Interest ........................................................................ 20�
MIWB Systems For Obtaining Information About Financial And Operational (Non-Financial) Performance ............................................................................................ 23�
Financial Performance .............................................................................................. 23�
Operational (Non-Financial) Performance ................................................................ 24�
Governance .............................................................................................................. 25�
Summary of Financial Information ............................................................................ 25�
Objectives and Performance Indicators .................................................................... 27�
Operational ............................................................................................................... 27�
Outputs and Output Performance Measures ............................................................ 28�
Organisational Structure at 30 June 2009 ................................................................ 29�
Chief Executive ......................................................................................................... 29�
Board ........................................................................................................................ 30�
Engineering and Capital Works Committee ........................................................... 30�
Finance, Audit and Compliance Committee .......................................................... 30�
MIWB as a Statutory Body .................................................................................... 30�
Board and Committees ............................................................................................. 32�
Board of Directors ................................................................................................. 32�
Board Members ..................................................................................................... 32�
Number of Board Meetings ................................................................................... 35�
Finance, Audit and Compliance Committee .......................................................... 35�
Engineering and Capital Works Committee ........................................................... 36�
Disclosure of Remuneration Paid to Directors ....................................................... 37�
Page 3 of 46
Risk Management ..................................................................................................... 37�
Human Resources .................................................................................................... 37�
Initiatives for Women ............................................................................................. 37�
Key Workforce Policies ......................................................................................... 37�
Staff Training and Development ............................................................................ 38�
Workforce Health and Safety ................................................................................ 38�
Workplace Planning, Retention and Turnover ....................................................... 39�
Consultancies and Contractors ................................................................................. 39�
Overseas Travel ....................................................................................................... 39�
Information Systems and Recordkeeping ................................................................. 40�
Water Quality ............................................................................................................ 40�
Waste Management ................................................................................................. 42�
Freedom of Information ............................................................................................ 42�
Glossary and Acronyms ........................................................................................... 43�
Financial Statements ................................................................................................ 46�
Annual General Purpose Financial Statements ..................................................... 46�
Certification of Financial Statements ..................................................................... 46�
Independent Auditor’s Report ................................................................................... 46�
Page 4 of 46
Mount Isa Water Board
Category 1 Water Authority established under the Water Act 2000
ABN: 97 761 284 021
Telephone: +61 07 4740 1000
Facsimile: +61 07 4740 1099
Address: 31 Carbonate Street, Mount Isa, QLD 4825
Postal Address: PO Box 1712, Mount Isa, QLD 4825
Email: [email protected]
This document is produced in accordance with the Financial Administration and Audit Act 1977 (FAA) which requires that all statutory bodies prepare annual reports and table them in the Legislative Assembly each financial year and the Financial Management Standard 1997 (FMS) which provides specific requirements for information that is to be disclosed in annual reports, and other legislative requirements and the Queensland Government Annual Report Guidelines for Queensland Government Agencies 2008-09.
This document was published in October 2009 by the Mount Isa Water Board located at 31 Carbonate Street, Mount Isa, Qld, 4825.
This document has been prepared for the Minister to submit to Queensland Parliament.
International Standard Serial Number (ISSN) 1837 – 3097
Page 5 of 46
Public Availability To obtain a copy of the 2008-09 Mount Isa Water Board Annual Report you can: • download a copy from the Mount Isa Water Board’s website
www.mountisawater.qld.gov.au/AnnualReport2008-09; • contact Mount Isa Water Board by telephoning (07) 4740 1000 or by facsimile
4740 1099 or email [email protected]; • written request to the Mount Isa Water Board at PO Box 1712, Mount Isa
Queensland, 4825; or • visit the Mount Isa Water Board’s office at 31 Carbonate Street, Mount Isa,
Queensland during business hours. (Please note that prepayment of $25.00 fee per copy will be required for colour hard copies of the annual report. However, less expensive black and white copies are available).
Interpreter Service Statement The Queensland Government is committed to providing accessible services to Queenslanders from all culturally and linguistically diverse backgrounds. If you have difficulty in understanding the 2008-09 Annual Report you can contact the Mount Isa Water Board on (07) 4740 1000. A free 24 hour instant online translation service for text and web pages is available at www.translate.google.com. A general government Translating and Interpreting Service is also available in Australia 24 hours a day, 7 days a week for the cost of a local call on 131 450.
Page 6 of 46
23 October 2009 The Honourable Stephen Robertson MP Minister for Natural Resources, Mines and Energy and Minister for Trade Department of Environment and Resource Management PO Box 15216 CITY EAST QLD 4000 Dear Minister I am pleased to present Mount Isa Water Board's 2008-09 Annual Report.
I certify that this Annual Report complies with:
• the prescribed requirements of the Financial Administration and Audit Act 1977 and the Financial Management Standard 1997; and
• requirements set out in the Annual Report Guidelines for Queensland Government Agencies 2008-09.
Yours sincerely Ian Pascoe Chief Executive Mount Isa Water Board
Page 7 of 46
Vision To be a sustainable business managing the efficient and reliable treatment and transportation of bulk water based on commercial principles.
Photograph (1): Fred Haigh Pump Station
Mission Committed to a capital work operations and maintenance program to ensure that the
infrastructure employed to transport and treat bulk water is maintained to a standard
that mitigates the risk of failure.
Photograph (2): MIWB Pump and Motor
Page 8 of 46
Values Reliability facilitates risk mitigation
Safety facilitates zero harm
Integrity fosters confidence in customers and stakeholders
Respect fosters successful dealings
Teamwork develops synergies to enhance efficiency and reliability
Transparency develops trust in dealings with external parties
Page 9 of 46
Corporate Profile The Mount Isa Water Board (MIWB) is a Category 1 Water Authority and service provider established under the Water Act 2000 (Water Act). It operates as a commercialised statutory authority, carrying out water activities in the State of Queensland.
MIWB activities are underpinned by the Commercialisation Principles in the Water Act, Part 5, which require MIWB to operate, “as far as practicable, on a commercial basis and in a competitive environment.”
Three major customers of MIWB are:
• Mount Isa City Council (MICC) reticulates treated water to residential and commercial customers which in some cases is supplied directly from MIWB pipeline route. The water demand is largely determined by the levels of commercial and residential use and is moderated by the MICC as required. For example, during the recent drought MICC implemented water conservation measures and watering restrictions;
• Xstrata Mount Isa Mines (XMIM) uses water in its mining processes. The XMIM water demand is driven by the level of operational activities, and in particular, the volume of water used in its extraction, concentration and smelting processes; and
• Incitec Pivot uses water in its operational facilities. The Incitec Pivot water
demand is determined by the volume of water used in its acid manufacturing processes.
Finally, MIWB as Trustee is responsible for the day-to-day management of the R48 Recreational Reserve (R48 Reserve).
Page 10 of 46
Highlights Financial Performance in 2008-09
• revenue of $16.07 million - increase of $1.92 million from 2007-08.
• expense of $15.75 million - increase of $5.61 million from 2007-08. • net assets of $71.27 million - increase of $3.09 million from 2007-08.
Operational Achievements in 2008-09
• MIWB achieved consistent, uninterrupted and high quality water delivery to customers despite drought and record low dam levels in the second half of 2008 and despite record rainfall and flooding in the early part of 2009.
• Work on MIWB’s new Mount Isa Terminal Reservoir (new MITR) pump station was substantially completed, with commissioning scheduled for the second half of 2009.
• MIWB successfully used a powdered activated carbon dosing system to
counteract abnormally high blue-green algae levels in water pumped from Lake Julius during 2008-09. This action ensured drinking water consistently met the required safety and quality standards.
• MIWB substantially completed its tenure acquisition project. This project relates to
the acquisition of formal tenure over all infrastructure assets required to be used in the distribution and treatment of water to customers. The formal transfer of MIM assets is scheduled for the second half of 2009, to coincide with the implementation of the Gulf Resource Operations Plan (ROP).
Page 11 of 46
Chair’s Review On behalf of the Board I am pleased to present the Mount Isa Water Board Annual Report for 2008-09. Overall, the 2008-09 year was one of the most challenging for the Board in a number of years. The drought extended into 2008 bringing the need for Mount Isa Water Board to manage water in an operating environment of extremely low dam levels and continued low rainfall. Further challenges occurred during the Christmas period, with December 2008 bringing abnormally high blue-green algae levels instead of the longed for rain. In dramatic contrast, the first week of 2009 brought with it almost as much rainfall as the entire previous year, causing flooding and damage to Mount Isa Water Board and community infrastructure but immediate relief from the drought and associated logistical difficulties. The 2008-09 financial year was Mount Isa Water Board’s 35th year of supplying water to Mount Isa. Sustained drought and more recent flooding has necessitated a tight and steady focus on the capability and efficiency of Mount Isa Water Board's network of pipes, pumps and water treatment facilities between Lake Moondarra, Mount Isa and Lake Julius. Lake Moondarra and Lake Julius, which together provide the storage for the region’s water reserves, have sufficient combined capacity to provide a number of year’s supply based on forecast consumption. While this places the Mount Isa region in an enviable position at present, this has not always been the case and may not remain so. We recognise that it is important that the region does not become complacent with regards to water and that MWIB and its customers engage in good planning and risk management strategies for bulk water infrastructure. The Board is confident that Mount Isa Water Board is well positioned to do this. For its own part, Mount Isa Water Board has and will continue to undertake a number of infrastructure projects that are designed to ensure the on-going reliability of the region’s water supply. Work on a number of significant capital infrastructure projects has been substantially completed, including replacement of the main pumping station, with the new MITR scheduled to be commissioned in October 2009.
Page 12 of 46
As for the year ahead, we will continue our role in the delivery of water and will be seeking to optimise the resilience and efficiency of our water distribution network to meet the water demands of industry and the community in 2009-10. I would like to acknowledge the valuable contributions that were made during the year by my fellow directors, Karen Read, Terry O’Neill, Graeme Saunders and Ron McCullough AM and the hard work and enthusiasm of the Board’s new Chief Executive Ian Pascoe and all our dedicated Mount Isa Water Board staff. All have contributed to the progress made during the year, and towards building the foundation for what I expect to be a year of excellence and achievement in 2009-10. Rowena McNally Chair Mount Isa Water Board
Page 13 of 46
Chief Executive’s Report
I was appointed by the Board as Chief Executive in April 2009 to manage Mount Isa Water Board’s core business activities which include transition to becoming a distribution operations licence holder.
In 2008-09, Mount Isa Water Board achieved consistent, uninterrupted and high quality water delivery to customers. This was despite drought and record low dam levels in the second half of 2008 and record rainfall and flooding in the early part of 2009. Despite drought and floods the work on Mount Isa Water Board’s new MITR pump station was substantially completed, with commissioning scheduled for October 2009.
In addition, Mount Isa Water Board successfully used a powdered activated carbon dosing system to counteract abnormally high blue-green algae levels in water pumped from Lake Julius during the year to ensure drinking water consistently met the required Australian Drinking Water Guidelines.
Mount Isa Water Board substantially completed its tenure acquisition project, which relates to the acquisition of formal tenure over all infrastructure assets required to be used in the distribution and treatment of water to customers. The formal transfer of remaining assets is scheduled for the second half of 2009, to coincide with the implementation of the Gulf Resource Operations Plan.
In 2009-10 the focus will be on: (i) maintaining and improving the integrity of Mount Isa Water Board infrastructure; (ii) ensuring all agreements required for Mount Isa Water Board regulatory and operational needs are in place; and (iii) maintaining and improving Mount Isa Water Board’s financial position. This will be achieved by strategically reviewing the capital, operation and maintenance programs, and strategically planning the efficient and effective allocation of financial and human resources.
I would like to thank Mount Isa Water Board staff for their dedication and contributions to the Mount Isa Water Board operations.
In conclusion, Mount Isa Water Board is well placed to consolidate its operations and develop its reputation as a sustainable commercial operation which provides a secure and reliable infrastructure to treat and transport bulk water to its customers. Ian Pascoe Chief Executive Mount Isa Water Board
Page 14 of 46
Role and Main Functions MIWB is a Category 1 Water Authority established under the Water Act. It operates as a commercialised statutory authority carrying out water activities in the Mount Isa region in the State of Queensland.
Pursuant to section 569 of the Water Act, the main function of a water authority is to carry out the water activities decided by the authority. Where an authority has an authority area, then its main function is to carry out the water activities for the authority area. A water authority may also carry out water activities outside its authority area if carrying out that activity does not limit the authority’s ability to perform its main function, or financially prejudice the authority, or its ratepayers, or customers and, in the case of MIWB, as a Category 1 Water Authority, the activity must also be in accordance with MIWB’s Performance Plan.
Under the Performance Plan, approved by the Board and by the Minister, the activities of MIWB are to:
• conserve, store and supply water in bulk to local authorities and industrial customers;
• take appropriate measures to protect the quantity and quality of present and future supplies of water;
• investigate and plan for the future infrastructure requirements;
• construct, operate and maintain water infrastructure necessary to meet customer demands;
• administer and manage property under the Board’s control; and
• act as Trustee for the R48 Reserve.
The last activity is consistent with section 570 of the Water Act which permits a water authority to carry out functions including riverine area protection; soil erosion control; land degradation treatment and prevention; and the management of recreational areas on land owned by the authority or under its control (and whether inside or outside an authority’s designated authority area).
Page 15 of 46
Operating Environment Mount Isa is situated approximately 340 kilometres (km) south of the Gulf of Carpentaria, and with the Coral Sea 740 km to the east north-east. The City of Mount Isa is located on the Leichhardt River which is the primary source of water for Lake Moondarra and Lake Julius Dams which supply the region’s water demand. The Leichhardt River catchment covers an area of approximately 33 000 square km. The river rises in the Selwyn Ranges, 40 km southeast of Mount Isa, flowing in a northerly direction, through the city of Mount Isa and Lake Moondarra, before passing through to the Lake Julius Dam. The river flows north and is joined by a number of tributaries before entering the Gulf of Carpentaria some 30 km northeast of Burketown. During the wet season, floods often develop in the headwaters of the Leichhardt River and its major tributaries. Heavy rainfall can also follow from cyclonic influences. These can result in widespread flooding, particularly in the lower reaches beyond Lorraine. The Mount Isa region has three main seasons. There is a period of mild temperatures and low humidity between May to August. Between September to April, the region experiences hot temperatures while between January to April usually brings high temperatures and high humidity. Maximum temperatures can reach well into the 40-degree Celsius scale during summer. Summer is also when the region receives most of its annual rainfall. Rainfall in the Mount Isa catchment area is usually in the form of heavy thunderstorms that result from the intense heat of the summer months, and the passage of the inland trough system which is prevalent during the spring and summer months. Heavy and prolonged rain resulting in flooding also occurs periodically, when cyclones caused by monsoon troughs in the north move south across the region. The variability of rainfall in the Mount Isa district is between 20 to 25 per cent. Annual rainfall amounts may be less than 250 millimetres (mm) in one year and greater than 500 mm in the following year. For comparative purposes the lowest recorded rainfall was 161 mm in 1970, compared with 174 mm in 2008 being the second lowest annual rainfall recorded in Mount Isa. In January 2009 the highest monthly rainfall of 535 mm was officially reported. The wet season is between December to March, with over 75 per cent of the annual rainfall occurring during these months. Consecutive low rainfall wet seasons, as occurred during the 2006, 2007 and 2008 years, cause severe strain on the available surface water supplies and on the ability of the Lake Moondarra Dam to meet the bulk water demands of Mount Isa’s industrial, commercial and residential users.
Page 16 of 46
The impact of drought is greatly exacerbated by the high evaporation rates during the summer months. Although the evaporation loss during the dry season is reduced due to the lower temperatures – evaporation, particularly in Lake Moondarra, can be up to four meters in a year.
The construction of the Lake Julius Dam in 1976 allowed for the allocation of additional water for Mount Isa to supplement the regional water supply. However, water from Lake Julius is used judiciously due to the high electricity cost of pumping water.
Shown in Graph 1 are the effects of the severe drought which caused a decline in the Lakes’ storage capacities and total water supplied in 2008-09. It is worth noting the heavy rains in January 2009 resulted in Lake Moondarra and Lake Julius reaching 100 per cent capacity.
�
���
�����
�����
�����
�����
��
���
���
���
��
���
��
���
���
��
����
������ ������ ������ ������ ������ ������ ����� �!�� "�#�� ��#�� "�$�� �����
�������������� ������� Graph 1Lake Capacity Compared With Water Supplied
%�&��"���'�##��(%)�* %�&�����+�,�(%)�* -���#�,����+�'�� �������(.)�*
Page 17 of 46
Photograph (3): Lake Moondarra during 2009 Flood
Photograph (4): Lake Moondarra after 2009 flood
Page 18 of 46
Changes to the Operating Environment Traditionally MIWB’s role has been that of a regional water supplier. This involved sourcing and supplying water to customers and undertaking planning to meet the Mount Isa regional supply-demand balance.
The most significant change to MIWB’s operating environment will be the implementation of the ROP as part of the State Government’s plan for the management of water resources in North West Queensland as outlined in the Water Resources (Gulf) Plan 2007.
With the implementation of the ROP there will be a fundamental shift to this arrangement, effectively unbundling, the elements of supply to MICC and XMIM as a result of the granting of entitlements to them.
The ROP will present issues on how MIWB operates and services its customers, and its overall risk profile going forward. MIWB activities will be specified under the Water Act and authorised under a distribution operations licence (DOL). A key element of MIWB’s assumption of a DOL licence will be MIWB taking ownership of several pieces of infrastructure which have historically formed part of MIWB distribution network, but which have not been formally owned by MIWB. MIWB has been in negotiations with MIM to acquire the relevant assets and securing the land tenure on which these and other key assets reside. Most of the tenure issues are being addressed, including the grant of a perpetual lease to MIWB over the Lake Julius pipeline. Some matters remain to be finalised between MIWB, the relevant government agencies and MIM which are scheduled for conclusion in the second half of 2009.
Even after the ROP implementation MIWB will remain a Category 1 Water Authority as specified under the Water Act. Its activities will be authorised under a DOL, subject to ownership of the relevant assets being transferred to it from MIM.
As a Category 1 Water Authority, MIWB functions will remain consistent with, or related to, the purpose for which it was established which include core distribution services and related activities, such as water quality and treatment.
MIWB is progressing towards becoming a DOL holder. Once the ROP implementation occurs there will be a change to the regulatory environment, as has occurred in relation to the allocation of water in North-West Queensland. The revised allocation entitlements are shown in Table 1. It is worth noting that MIWB did not receive any compensation with the change in allocations.
Page 19 of 46
Family name / company Location PurposeNominal volume
(ML)Priority
Mount Isa City Council Zone 1 Any 7 900 High
Xstrata Mount Isa Mines Ltd Zone 1 Any 8 850 High
Mount Isa Water Board Zone 1 Any 5 000 High
Mount Isa Water Board Zone 1Distribution
Loss1 250 High
Mount Isa City Council Zone 2 Any 12 500 Medium
Xstrata Mount Isa Mines Ltd Zone 2 Any 12 500 Medium
Mount Isa Water Board Zone 2Distribution
Loss1 250 Medium
Mount Isa Water Board Zone 2 Any 50 Medium
Julius Dam Water Supply Scheme
Moondarra Dam Water Supply Scheme
Water Allocations Distributed Under the Resource Operations Plan
Table 1
Page 20 of 46
Key Stakeholders Matters of Interest
There are numerous stakeholders and interested parties in the Mount Isa region that rely on the activities undertaken by MIWB. A summary of the major matters of interest to stakeholders include:
• Commissioning of the new MITR
In 2008-09 the new MITR reached practical completion and the head contract was finalised. However, project delivery issues including the insolvency of a major contractor required MIWB to assume direct control for the completion of the chlorination system. It is expected that the new MITR will be operational towards the end of 2009.
• Infrastructure Performance
MIWB is committed to a capital investment program that provides for the future reliability and sustainability of its assets. This includes periodic reviews of the Strategic Asset Management Plan (SAMP), System Leakage Management Plan (SLMP) and Infrastructure Plan Review (IPR) to identify and prioritise those issues that require attention. The new MITR project was identified through this process and its impending completion will address the increasing number of faults and breakdowns in the old MITR.
• Capital Expenditure
The major focus in 2008-09 was completion of the new MITR project. Due to unavoidable delays in the construction program (mentioned above), several smaller projects were deferred to 2009-10. However, the replacement of the F4 Clear Water Lagoon (CWL) pipeline; on-going power pole replacement along the Lake Julius power line; and completion of routine maintenance; and automation of the reservoir selection valve were undertaken.
• Regulatory Compliance
MIWB is required to regularly review and report on a range of statutory and regulatory obligations, both as a water authority and as a government business entity.
MIWB is currently fully compliant which includes: timely submission of its corporate plan; performance plan; annual report; and quarterly reports, SAMP report, SAMP audit, financial reporting, event based and quarterly water quality reporting and drought management plan. It is noted that the implementation of the ROP will result
Page 21 of 46
in a more detailed reporting regime than currently exists, with greater emphasis on water transportation.
• Operations & Maintenance (O&M)
MIWB continues to use the Utilities Department of XMIM (Power and Water sections) as its O&M contractor, reflecting XMIM significant support resources and extensive knowledge of the system. The O&M program and budget are reviewed annually to ensure that both parties are in agreement on budget, reliability and maintenance matters.
• Infrastructure Details
The old MITR and the new MITR are located on the same site in Mount Isa.
The new MITR (to be commissioned in late 2009) has a flow rate between 520 litres per second to 815 litres per second. At the new MITR the water is chlorinated twice before it leaves the facility to supply town and industry.
Lake Moondarra Booster Pump Station is located 8 km north-east of Mount Isa and aids Col Popple pumps in pumping into town when water demand is high.
CWL is located 18 km north-east of Mount Isa and carries out the main natural water treatment process via a series of lagoons. Then the water chlorinated and pumped to Mount Isa via Col Popple pump station at a flow rate between 760 litres per second to 1 120 litres per second when the Lake Moondarra Booster is operating.
Lake Moondarra is located approximately 25 km north-east of Mount Isa and is Mount Isa’s primary water storage.
C4 valve station is located 20 km north of Mount Isa and aids in controlling the flow between Lake Julius to CWL, and between CWL to George Fisher Mine.
Lake Julius Fred Haigh pump station is located 64 km north of Mount Isa and acts as the secondary water storage for Mount Isa.
Lake Julius Booster Pump Station is located 42 km north of Mount Isa. It assists in pumping water to CWL when the Fred Haigh pump station is running due to the significant distance of 67 kilometres that the water has to travel.
• R48 Reserve
MIWB continues to maintain a significant number of community facilities at the R48 Reserve at no cost to the public.
Page 22 of 46
In MIWB’s capacity as Trustee for the R48 Reserve, MIWB undertakes the maintenance of public amenities and parks within the R48 Reserve. This includes maintaining facilities for community use in and around Transport Bay and Warrina Park which includes extensive walking tracks and recreational areas targeted to families and children. Maintenance work undertaken is diverse and entails: maintaining the BBQ areas and amenity blocks; the removal of rubbish; removal of noxious (aquatic and terrestrial weeds); and fencing for animal exclusion. The R48 Reserve, particularly Lake Moondarra, is a popular recreational area where numerous water sport recreational activities (eg water skiing, fishing and canoeing) are enjoyed by members of the Mount Isa community.
Lake Moondarra which forms part of the R48 Reserve was constructed in 1958 and much of the infrastructure is now aged and requiring substantial maintenance. The Lions Youth Camp was closed during the financial year due to the disproportionately high cost of ongoing capital works and maintenance. During 2008-09 in excess of $390 000 was spent on maintaining Warrina Park, Transport Bay and the R48 Reserve.
Page 23 of 46
In 2008-09, MIWB, as Trustee, continued to improve the R48 Reserve and continued to work with sporting and community groups to promote safe and sustainable practices in water catchment areas. Also MIWB has pursued a weed and pest management program to reduce noxious weeds and feral pests in the Lake Moondarra catchment.
Photograph (5): Transport Bay at Lake Moondarra
MIWB Systems For Obtaining Information About Financial And Operational (Non-Financial) Performance
There are a range of reports prepared as part of MIWB statutory reporting obligations which include annual reports, financial statements, SAMP, SLMP, and water quality reports. These reports provide the Minister with a summary of information and events for the year, forecasts for the year ahead, assessments of status, and performance to date.
Financial Performance Measurement and monitoring of MIWB’s financial performance is conducted using a recognised accounting software package. Detailed financial reports with analysis are prepared each month and presented to the Board at the monthly Board Meetings.
Page 24 of 46
Financial reports are also prepared on a quarterly basis in order to report performance to Department of Environment and Resource Management (DERM) and Queensland Treasury through the “Tridata Reporting System and Quarterly Departmental Reporting system”. Operational (Non-Financial) Performance MIWB produces a variety of external operational reports for DERM and internal reports for the Board. External reports predominantly relate to water quality - incident related water quality summaries and outcomes; quarterly and annual water quality summaries provided to DERM’s Office of the Water Supply Regulator; or lake capacity data provided to the Bureau of Meteorology.
Internal reports include: a monthly O&M Report for the Board which summarises current water storage, recent demand and water quality data, and O&M issues, that may be of interest to the Board. Similarly a monthly capital project brief is also produced for the Board which summarises progress and issues.
Page 25 of 46
Governance Auditors – External
The Auditor General is the auditor of all Queensland public sector entities. The Queensland Audit Office engaged Moore Stephens (Townsville) to conduct the MIWB 2008-09 external audit. Moore Stephens were also the delegated external auditor to MIWB for 2007-08.
The external audit is normally conducted via visits to MIWB’s office with the auditor working closely with the Chief Executive, Finance Manager and finance staff.
MIWB produces a number of audit reports on a two to five year basis. During the financial year the majority of the latest SAMP audit was completed (The 2008-09 SAMP audit report will be submitted to DERM in August 2009). Future external audits will include a laboratory assurance audit and Environmental Management System audit.
Auditors – Internal
In 2008-09, MIWB appointed BDO Kendalls as its internal auditor. The Finance, Audit and Compliance Committee works closely with the internal auditor to develop a recommended audit programme for each year.
The internal auditor conducts the audits based on Australian Audit Standards and reports its findings and recommendations to the Board through the Finance, Audit and Compliance Committee.
The internal audit is normally conducted via visits to MIWB’s office with the auditor working closely with the Chief Executive, Finance Manager and finance staff.
Summary of Financial Information The net profit from ordinary activities after income tax equivalents expense for 2008-09 is $0.20 million compared with $2.80 million for 2007-08.
The drop in profitability was largely due to unforseen increases in costs as a result of increased reporting requirements brought on by the ROP, SAMP, and Asset Revaluation and other legislative and regulatory requirements that were essential for the finalisation of the 2007-08 Financial Statements.
In addition, there were higher than expected operating costs caused by the need to pump water from Lake Julius due to the drought experienced in the early part of the financial year. These costs included increased electricity costs due to the pumping as
Page 26 of 46
well as increased charges from SunWater. In addition, an added cost of approximately $1.0 million was incurred due to XMIM electricity billing errors.
Legal fees and recruitment costs were also higher than expected due to operational restructuring and various tenure and regulation projects.
A review of the Income Statement and associated notes shows 2008-09 revenue increased by $1.9 million compared with 2007-08 revenue. The increase is mostly attributable to an increase in water revenue received from customers.
The cost centres which have significantly contributed to the increase in expenses between 2007-08 to 2008-09, are as follows:
• operating expenses increased by $1.8 million (including increased power costs of $1.6 million);
• corporate expenses increased by $1.8 million which is primarily due to increased
expenditure on MIWB land tenure project, the development of quality control and audit processes, and work undertaken in completing a revaluation of MIWB assets, preparation of the SAMP and preparatory to the introduction of the ROP.
• employee expenses increased by $0.7 million due to increased human resources
for a major project and organisational restructure; and • depreciation expenses increased by $1.1 million as a result of the revaluation of
MIWB assets. The revaluation increased the value of the assets which caused the depreciation expense increase.
The balance sheet shows an increase of $3.1 million as a result of the asset revaluation during the financial year.
The cash flow statement shows a decline in cash from $7.0 million in 2007-08 to $1.7 million in 2008-09. This was due to increased capital expenditure funded by MIWB cash reserves, primarily on the new MITR project.
Finally, revenue from customers increased by $2.2 million from 2007-08 to 2008-09 as a result of increased revenue. However, the impact of payments to suppliers and employees increased by $1.5 million, interest costs increased by $0.27 million; and interest income reduced by $0.3 million. This reflected only a marginal increase in net cash provided by operating activities in 2007-08 and 2008-09 financial years.
Page 27 of 46
Objectives and Performance Indicators
MIWB strategic objectives are to:
• operate as a commercially and operationally sustainable business consistent with the Water Act and government policy; and
• ensure that the infrastructure is secure and reliable for the treatment and transport of bulk water.
In broad terms, MIWB’s performance objectives must be developed in a manner consistent with its commercial mandate which requires that MIWB:
• meet its statutory obligations; • achieve a sustainable return to the Queensland Government; and • earn a commercial rate of return on investment. Operational MIWB’s operational objectives are to:
• acquire MIM assets as required for MIWB regulatory and operational purposes which includes the acquisition of Lake Moondarra pipeline assets for $4.0 million (GST exclusive) and the George Fisher Mine pipeline assets for $0.7 million (GST exclusive);
• secure tenure over land on which the MIM assets to be acquired reside; • to ensure the security and integrity of treatment and transport infrastructure to
operate in a low risk, efficient and effective operating environment;
• strategically plan infrastructure investment and maintain maximum asset utilisation;
• implement system leakage mitigation strategies to minimise water losses in the
infrastructure;
• achieve ADWG guidelines in the quality of drinking water provided to our customers; and
• provide staff and contractors with a safe and satisfying working environment.
Refer to Table 2.
Page 28 of 46
Outputs and Output Performance Measures
Action Performance Indicator Target Outcome
Provide sound financial management Manage to Profit and Loss Budget. plus or minus 7.5% on budget down 92.0% on budget
Fitch Credit Rating BBB Rating BBB Credit Rating No change to credit rating
Return on Investment (1) WACC = 4.0% 4.000% 0.003%
Manage debt/equity ratio (2) Debt to equity gearing ratio less than 12% 6%
Commercial contracts
Manage capital infrastructure program. Key commercial agreements with Xstrata, MICC and incitec
Delivery within 5% time/costs. Contracts by June 2009
Revised time scale (Dec 2009)
Manage capital programManage projects to forecast time & budget
Within 5% costs and 5% time Not achieved. New MITR over initial budget and other projects deferred.
Reduce losses from closed systemWater losses within closed system target
less than 1 000 ML per annum Achieved (closed system losses 922 ML)
Testing, monitoring and comparing water quality results to ADWG standards
No aesthetic or health exceedences aesthetics 95% and health 95% aesthetic 89.89% and health 99.91%
Provide reliable water delivery services to customers.
Provide reliable water delivery. Meet delivery and reliability targets as agreed in commercial customer
98% Achieved
Manage water losses from systemWater losses within target of Water Loss Management Plan
100%Network losses 214 ML (<2 500 ML allowance)
Provide water quality services that meet customer requirements
Compliance with customer commercial agreements
Achieved
Available yield versus demandCustomer supply exceeding demand availability
100% 100%, DMP in 2008
Manage unplanned interruptions to supplyMeet delivery and reliability targets as supplied in Customer Service Agreements
<10 interruptions per year with a total downtime of <10 hrs
Nil supply interruptions or downtime.
Management to the Corporate Environmental Management Plan
Meet EMS KPIs 98% Compliance Achieved
Provide a safe and healthy workplaceMeasure of workplace safety related incidents resulting in disabling injury
nil Achieved
(1) Return on investment is a result of a low profit NPAT.(2) Gearing ratio below expectations due to the allocated debt not being taken up.
Table 2
Page 29 of 46
Organisational Structure at 30 June 2009
Board
Chief Executive
Asset Engineer
Project Engineer
Water Quality
Engineer
Admin Projects Officer
Recreational Reserve
Supervisor
R48 Reserve Officer
R48 Reserve Officer
Finance Manager
Accounts Officer
Assistant Accountant
/0����+����,,+,����
Chief Executive The Chief Executive reports directly to the Board of Directors and is charged with and accountable for the overall performance of the organisation reflecting the Board’s approved strategy as reported in the Board’s approved performance plan, corporate plan and annual budget.
In addition, the Chief Executive is responsible for the leadership of the organisation, and maintaining effective business relationships with the Board Members, customers and other stakeholders, and interested parties.
Page 30 of 46
Board Engineering and Capital Works Committee The role of the Engineering and Capital Works Committee is to plan and monitor progress of major capital programs.
Finance, Audit and Compliance Committee The Finance, Audit and Compliance Committee is responsible for the review and oversight of financial performance and financial regulatory compliance of MIWB including the integrity of its accounting and financial reporting; compliance with applicable accounting standards; appointment of internal and external auditors; appointment of significant consultancies (eg legal and insurance brokers); and ensuring the integrity of the accounting and financial reporting.
MIWB as a Statutory Body Section 599 of the Water Act provides details for the publishing of a notice in the Queensland Government Gazette that states the composition of the Board is to consist of:
• one person nominated by the Chief Executive of DERM;
• two persons nominated by MICC; and • two persons nominated by MIM. Directors of a water authority must be appointed by the Governor in Council.
Section 611 of the Water Act requires that directors must act in the best interests of MIWB.
Page 31 of 46
Executive Management The executive team is responsible for the overall day-to-day operational performance of MIWB and participation in senior management groups and/or committees.
Profile of executive team members:
Ian Pascoe (Chief Executive)�MBA, MEc, BEc, CFTP, PMESA
Mr Pascoe commenced in April 2009 as Chief Executive and is accountable for the overall performance of the organisation, consistent with the approved strategy set out in the five year Corporate Plan and the approved business plans and budgets as shown in the Annual Performance Plan. Furthermore, Mr Pascoe reports to the Chair and the Board of Directors and is also responsible for the leadership of the organisation and sound and effective relationships with Board, customers and other stakeholders.
Bruce Galbraith (Finance Manager) BMS NZICA
Mr Galbraith commenced in February 2009 as Finance Manager and Board Secretary.
Greg Stevens (Asset Engineer) BE (Hons)
Mr Stevens commenced in October 2008 as Asset Engineer.
Page 32 of 46
Board and Committees Board of Directors MIWB is governed by an independent Board of Directors (Board) appointed by the Governor in Council pursuant to section 598 of the Water Act.
The Board is responsible for ensuring effective and efficient performance of MIWB functions and is accountable for its performance to the Minister. Each director is required to act in the best interest of MIWB and ensure that MIWB achieves and acts in accordance with its Performance Plan and Corporate Plan. The Board is also responsible for MIWB’s commercial policy and management.
The term of appointment is set out under section 604, subsection (2) Subject to subsections (3) and (4), a director is appointed for the term of up to 3 years as stated in the director’s instrument of appointment.
Board Members Rowena McNally LLB, MAICD (Chair) Director since February 2002
Ms McNally was first appointed to the Board in February 2002. She was reappointed in June 2008 for a further term of 3 years (until 28 May 2011) and is Board Chairperson. She is an experienced corporate lawyer and director, with expertise in water infrastructure, corporate law and corporate governance. During the year she was a director of Gladstone Area Water Board and WorkCover Queensland and Sugar Industry Commissioner and was formerly a Director of Burnett Water Pty Ltd. She is Chair of the Queensland Cerebral Palsy League and is a member of the AICD, Australian Water Association; AIM and Australian Institute of Arbitrators & Mediators and is a registered building and construction adjudicator. Ms McNally is the nominee of the Director-General of the Department of Natural Resources and Water and serves on various legal and other committees. She is also an ex officio member of the Finance, Audit and Compliance Committee.
Page 33 of 46
Ron McCullough AM, GAICD Board Director Director since September 2004
Mr McCullough was appointed to the Board in September 2004. He is a member of the Board’s Finance, Audit and Compliance Committee. Mr McCullough served 23 years as a Councillor with the MICC and was the Mayor of Mount Isa for 18 of those years, until March 2008. Mr McCullough has had special interest in the development of infrastructure throughout the Northwest region. Mr McCullough has initiated and served on many development boards over that time. Since arriving in Mount Isa in 1960, Mr McCullough worked for 20 years in the mining industry and managed a local company for seven years. Mr McCullough is a Graduate of the Australian Institute of Company Directors. He was appointed to the Board as a nominee of the
Mount Isa City Council in September 2004 which expires on 30 June 2009*.
Terry O’Neill, Board Director Director since March 2005
Mr O’Neill was first appointed to the Board in March 2005. He is the Chairperson of the Engineering and Capital Works Committee and is also a member of the Finance, Audit and Compliance Committee. Mr O’Neill is General Manager, Copper Smelter and Bulk Products with MIM. He has lived in Mount Isa for 28 years and has substantial engineering, operations and maintenance experience in the engineering and copper divisions of MIM. Mr O’Neill was appointed to the Board as a nominee of
MIM in March 2005. His current term of appointment expires on 30 June 2009*.
* Section 604 (3) of the Water Act requires that a MIWB director will remain a director, even though their term may have expired, until their replacement is formally appointed by notice in the Queensland Government Gazette.
Page 34 of 46
Karen Read, Board Director Director since September 2004
Ms Read was appointed to the Board in September 2004 and is the Chair of the Finance, Audit and Compliance Committee. Ms Read is the General Manager, Business Planning and Reporting for Xstrata Copper. Ms Read is a Certified Practicing Accountant, and a member of the Australian Institute of Company Directors. She is also an experienced company director, serving on the boards of a credit union, health fund, several Xstrata companies and a stevedoring company. Ms Read has been employed by Xstrata Qld Limited for 25 years and is a nominee of MIM. She was appointed to the Board in September 2004. Her current term of
appointment expires on 30 June 2009*.
Graeme Saunders, Board Director Director since 1993
Mr Saunders was first appointed to the Board in 1993. He served as a Councillor with the MICC from 1985 until March 2008, including as Deputy Mayor. Mr Saunders is a small business proprietor in Mount Isa and has a deep understanding of commercial and local issues. Mr Saunders is the Board’s longest serving member. He was appointed as a nominee of the MICC and was last reappointed to the Board
in March 2004. His current term of appointment expires on 30 June 2009*.
* Section 604 (3) of the Water Act requires that a MIWB director will remain a director, even though their term may have expired, until their replacement is formally appointed by notice in the Queensland Government Gazette.
Page 35 of 46
Number of Board Meetings
The number of Board attendances is shown in Table 3.
Total Number of Meetings for 2008-09 19
Rowena McNally 19 / 19
Karen Read 18 / 19
Terry O'Neill 16 / 19
Ron McCullough 19 / 19
Graeme Saunders 11 / 19
Number of Board Meetings
Table 3
Finance, Audit and Compliance Committee The Committee consists of Karen Read (Chair of the Finance, Audit and Compliance Committee), Rowena McNally (Director), Terry O’Neill (Director), Ron McCullough (Director) and Graeme Saunders (Director). Ian Pascoe (CEO) and Bruce Galbraith (Finance Manager) attend committee meetings by invitation.
The committee meets at least six times each financial year and assists the Board in overseeing MIWB’s financial management, external financial reporting and compliance to auditing requirements by ensuring that financial reports are prepared in accordance with the Australian Accounting Standards (including Australian equivalence to International Financial Reporting Standards) and other prescribed statutory requirements.
The committee also advises the Board on the efficacy of the internal and external audit functions and preparation of the budget for the upcoming financial year.
The number of Finance, Audit and Compliance Committee attendances is shown in Table 4.
Page 36 of 46
Total Number of Meetings for 2008-09 7
Rowena McNally 6 / 7
Karen Read 7 / 7
Terry O'Neill 7 / 7
Ron McCullough 7 / 7
Graeme Saunders 4 / 7
Finance, Audit and Compliance Committee
Table 4
Engineering and Capital Works Committee Due to the intensive capital works program during the financial year a substantial numbers of meetings were held.
The committee meetings are held once a month and assist the Board in overseeing MIWB’s engineering projects. The main focus for the financial year has been the new MITR.
The Engineering and Capital Works Committee consists of Terry O’Neill (Chair); Ron McCullough (Director). Ian Pascoe (Chief Executive) and Greg Stevens (Asset Engineer) and other staff attend meetings by invitation.
The number of Engineering and Capital Works attendances is shown in Table 5.
Total Number of Meetings for 2008-09 19
Terry O'Neill 19 / 19
Ron McCullough 8 / 19
Engineering & Capital Works
Table 5
Page 37 of 46
Disclosure of Remuneration Paid to Directors Remuneration of the Directors is made in accordance with the current Government policy titled Remuneration of Part-Time Chairs and Members of Government Boards, Committees and Statutory Authorities (Category 1).
Remuneration is based on attendance at board and committee meetings. The total remuneration paid in the financial year was $74 831 consisting of fees of $42 231 and on-costs of $32 600. The Chairperson was also the acting General Manager for seven months of the reporting period.
Terry O’Neill and Karen Read are not paid any remuneration or on-costs by MIWB.
Risk Management MIWB’s risk management framework is maintained and reviewed regularly to identify new and existing risks. MIWB has a registered Drought Management Plan, a certified and department approved SLMP and a SAMP in place to ensure the efficient and effective management of the treatment and transport of bulk water to MIWB customers.
Human Resources MIWB has a specialised workforce which is dedicated to discrete aspects of the business operations. Staffing levels reflect the performance plan corporate services, and capital expenditure. Initiatives for Women During the financial year MIWB staff members consisted of six females and five males. Two females hold senior engineering positions in the organisation. MIWB is an equal opportunity organisation which promotes and encourages career development for female staff. Key Workforce Policies The key workforce policies approved by the Board are: • Alcohol and Drugs Policy;
Page 38 of 46
• Anti-Discrimination Policy;
• Code of Conduct Policy;
• Occupational Health and Safety Policy;
• Sexual Harassment Policy;
• Whistle Blowers Protection Policy: there was one disclosure received by MIWB under the Whistleblowers Protection Act 1994 during the reporting period; and
• Workplace Injury Rehabilitation Policy.
Staff Training and Development At MIWB there is a commitment to support staff with their skills training and personal development to allow staff to be more prepared to undertake their duties.
During the financial year MIWB invested $49 000 in training which included safety related training. Workforce Health and Safety MIWB had a formally certified Workplace Health & Safety (WH&S) Officer during the financial year. The WH&S Officer role was to ensure compliance to WH&S regulations and occupational safety for all employees.
The WH&S Officer attends courses to ensure that current safety practices are being adhered to and compliance to regulations.
In addition, staff members are formally inducted on the followings areas involving MIWB’s activities:
• safety of employees;
• health of employees;
• operating environment;
• environmental issues; and
• community issues.
Page 39 of 46
Workplace Planning, Retention and Turnover At 30 June 2009, MIWB workforce consisted of eleven full-time employees which are the same as at 30 June 2008.
Consultancies and Contractors In Table 6 below, are significant consultancies and contractors by category that were engaged during the financial year for various capital projects, MIWB operations, accounting, regulatory compliance, and ROP implementation.
Category Amount Paid
(excluding GST)Accounting $ 87 363Auditing $ 178 690Engineering $8 733 996Legal $ 239 691R48 Reserve $ 391 693Regulatory compliance $ 413 432Safety Management $ 153 633Surveying $ 116 219Testing Water Quality $ 291 032
Total Expenditure $10 605 750
2008-09 Financial Year
Table 6
Consultants and Contractors engaged by MIWB
Overseas Travel No overseas travel was undertaken by any MIWB directors or staff at the MIWB’s expense during the financial year.
Page 40 of 46
Information Systems and Recordkeeping MIWB maintains a secure and accurate manual and electronic recordkeeping system which supports delivery of services, and accountability for the Board and the requirements of the Public Records Act 2000.
MIWB uses an electronic recordkeeping system which was implemented in 2006. In addition, the manual colour coded information management system was implemented in 2009, replacing the former physical information management system.
In accordance with IS40 compliance, MIWB records are secure from unauthorised access, damage, and misuse. In addition a record back-up system is in place.
To ensure all staff members are familiar with the information management systems, training sessions are conducted on a regular basis.
MIWB is in the process of implementing IS31 Retention and Disposal of Public Records Information Standard.
Water Quality MIWB provides potable water to its customers in accordance with ADWG. The water storages at Lake Moondarra and Lake Julius are monitored against the Australian and New Zealand Environment and Conservation Council (ANZECC) freshwater ecosystem guidelines.
The Clear Water Lagoon acts as a natural filtration system to reduce the colour, turbidity and a number of other chemical and microbiological parameters. However, in times of high turbidity and blue-green algae (BGA) the flocculation system and/or a powdered activated carbon system can be initialised to achieve ADWG minimum specifications.
During the financial year, water supplied to the major customers has been 99.91 per cent compliant to ADWG and with no risk to human health.
Page 41 of 46
Photograph (6): Water being pumped (uplifted) from LM into CWL
�
�
Photograph (7): Uplifted water from LM into CWL flume
�
Page 42 of 46
Waste Management All waste generated on MIWB property is dealt with in accordance with the Environmental Protection (Waste Management) Regulation 2000.
Freedom of Information No applications were made during the financial year.
Page 43 of 46
Glossary and Acronyms The following acronyms and terms are used in this document:
Board The Board of Directors of Mount Isa Water Board
ADWG Australian Drinking Water Guidelines 2004
CWL Clear Water Lagoon. Located at Lake Moondarra, this lagoon filters and biologically and naturally treats the water from the raw water storages at Lake Moondarra and Lake Julius before being distributed to customers.
C4 The valve station is used for changing and controlling directional flows according to demand and is located on the Lake Julius to Clear Water Lagoon pipeline.
CSO Community Service Obligation
DMP The registered Drought Management Plan of Mount Isa Water Board
DERM Department of Environment and Resource Management
DOL Distribution operations licence issued under Division 1A of the Water Act
EBIT Earnings before Interest and Tax
EMS Environmental Management System complaint with AS/NZS ISO 14001:2004.
Financial year Refers to 2008-09 financial year
GFC Global Financial Crisis 2009 et seq
Gulf Plan Draft Water Resource (Gulf) Plan 2007
Km Kilometres
Page 44 of 46
LJ Lake Julius Dam – owned and operated by SunWater
LM Lake Moondarra Dam – Owned by Mount Isa Mines Limited, and operated by Mount Isa Water Board.
LYC Lions Youth Camp located at the R48 Reserve
MIWB Mount Isa Water Board
MICC Mount Isa City Council
MIM Mount Isa Mines Limited
Minister Minister for Natural Resources & Water, and Minister assisting Premier in North Queensland (April 2009 changed to Minster for Natural Resources, Mines and Energy and Trade)
New MITR Mount Isa Terminal Reservoir pump station facility to be commissioned in 2009. Located in Mount Isa it receives the water pumped from Clear Water lagoon, where it is chlorinated before distribution to customers located in the city area.
Old MITR Mount Isa Terminal Reservoir facility commissioned in early 1960s.
ML Mega Litre (measure water volume, 1 000 000 litres = 1 ML)
NPAT Net Profit after Tax
O&M Operations and Maintenance
QTC Queensland Treasury Corporation
Raw water Untreated water
ROL Resource Operations Licence holder for the relevant storage facility.
ROP The Resource Operation Plan for the respective storage facility pursuant to the Gulf Plan.
SAMP The registered Strategic Asset Management Plan for the Mount Isa Water Board
SLMP Strategic Leakage Management Plan
Page 45 of 46
SunWater The Government Owned Corporation operating under that name
Treated water Potable water that meets the minimum ADWG
XMIM Xstrata Mount Isa Mines Limited
Water Act Water Act 2000 (Qld) as amended
Page 46 of 46
Financial Statements
Annual General Purpose Financial Statements Certification of Financial Statements
Independent Auditor’s Report
Related Documents
