Town Councils and Sinking Funds and Upgrading
It is with much concern I read about the obstacles Hougang MP went through in dealing with the HDB regarding his ward's lift upgrading program ( see below - Straits Times, 30 March 2006, "WP chief: HDB blocked lift upgrading in Hougang").
Correct me if I am wrong, but the facts are:
1. Both Opposition wards of Hougang and Potong Pasir DID NOT increase their S & C fees when the other PAP-controlled town councils did some 2 years ago (see my letter to the Ministry of National Development below, "PAP Town Councils must justify S & C fee increases when Opposition town councils did not");
2. Both Opposition wards were able to complete the lift upgrading program (LUP) without the need for the residents to co-pay (as they were all funded fully from the sinking funds) while the other PAP town councils required residents' co-payment;
3. However, "last August, the law was changed. The Town Councils Act now allows up to 10 per cent of a council's sinking funds to be used for lift upgrading if the cost for each home that gained from it did not exceed $5,000." This effectively means any future LUP will require co-payment from residents with limits imposed on how much that can be drawn from the sinking funds.
Is this an attempt to frustrate the Opposition's ability to provide the LUP for free to the residents which the PAP could not offer?
With the above, does it also mean the PAP town councils are less efficient in managing their estates?
March 30, 2006
WP chief: HDB blocked lift upgrading in Hougang
By Zakir Hussain
WORKERS' Party chief Low Thia Khiang yesterday revealed the obstacles that he faced in trying to upgrade lifts in his constituency, Hougang.
His comments come in the wake of the Housing Board disputing another opposition MP's account of his difficulty with lift upgrading.
The HDB said it was because of a law that Mr Chiam See Tong could not use his town council's sinking fund to provide lifts that stop on every floor for some blocks in his Potong Pasir constituency.
Last August, the law was changed. The Town Councils Act now allows up to 10 per cent of a council's sinking funds to be used for lift upgrading if the cost for each home that gained from it did not exceed $5,000.
In his press statement, Mr Low, however, pointed out that the Act does not disallow town councils from introducing lifts that stop on every floor. In 2000, the HDB approved such upgrading and the Hougang Town Council paid the entire bill. But in 2002, similar lift upgrading works were not approved by the HDB, he said.
Giving details, Mr Low said HDB gave its nod in August 2000 to the upgrading of 16 lifts in six blocks in Hougang Avenue 3 and 7. The work was completed in October 2001.
But in December 2002, the HDB did not allow the same to be done to 58 lifts in Blocks 301 to 334 in Hougang Avenue 5 and 7. The town council later replaced the lifts as they were old, he said.
But the lifts could not stop on every floor because landowner HDB had refused to approve it, Mr Low said, adding: 'The law was not the reason.'
HDB's reason for saying 'no' was not given in his statement yesterday but the subject was reported in the Hougang Town Council's annual report ending March 31 last year.
It said: 'According to the HDB, the town council would not be fair to all residents as the additional landings created would not serve all the residents of the blocks.'
It also said: 'The fact that the town council would progressively work towards providing this by first upgrading the existing lifts was not acceptable either to the HDB.'
In Potong Pasir's case, Mr Chiam had blamed HDB for thwarting his plans to upgrade the lifts in six point blocks in Toa Payoh Lorong 8.
Responding, HDB pointed out that despite the change in the Town Councils Act, Mr Chiam had not made any application to use the council's sinking fund for lift upgrading.
Mr Chiam replied that by the time the law was changed, the lift upgrading works had been completed.
Lift upgrading looks set to be key in the People's Action Party's quest to recapture the two opposition-held wards in the coming General Election.
PAP Town Councils must justify S & C fee increases when Opposition town councils did not
I refer to the recent media report that currently, there are some 580,000 work permit holders in Singapore, some 285,000 of whom are neither domestic workers nor working in the construction industry. (BT, 2 Mar 2006, “Foreigner-to-local worker ratio easing: Ng Eng Hen”).
Without any further details mentioned on the make up of this substantial group, I can only assume cleaners make up a fair bit of the 285,000.
While there have been questions about the hiring of foreign workers over locals, it must be pointed out that many of such jobs (such as cleaners) are shunned by locals. However, a better way of weighing the merits of hiring foreign workers vs locals (besides the consideration that some jobs may be shunned by locals) is to do a cost-and-benefit analysis of such policies.
For example, in hiring cleaners, the "cost" of doing so would be displacement of locals (assuming there are locals prepared to do the job). However, if the total salary package of the foreign workers so hired is lower than the locals, resulting in savings which are then passed on to the end-user (for example, the town council hiring these foreign workers and ultimately passing the savings to the HDB residents paying their Service & Conservancy (S & C) fees), then there may be grounds for justifying the hiring of foreign workers as there are "benefits" that can be accrued in doing so. However, what is not acceptable is the double whammy of many HDB residents having lost jobs to these cheap foreign labour and at the same time, being subjected to increases in S & C fees, which is exactly what has happened in many town councils.
Let me give the readers a comparison between the Pasir-Ris Town Council and the condominium where I live. Before the present MCST took over the running the condo some 3 years ago, we used to have a Singaporean cleaner who was paid about $1,500 per month whose responsibility was merely to do daily cleaning of the 20,000 sq ft premises of the 23-unit condo. However, after the MCST was formed and subsequent review of the vendors, a new cleaner contractor who offered to do the job for an equivalent of about $750 per month (or half the previous vendor) was subsequently hired to do the same job. How could he do it? Well, hiring foreign worker, of course.
The search for cost savings at the condo is still ongoing, and when substantial savings can be realized, the MCST has plans to pass the savings back to the residents with a reduction in their monthly maintenance fees.
Therefore, from the above condo experience, while a Singaporean lost his job to the foreign worker (a necessary "cost" in the pursuit of cost savings as a result), the residents will benefit at the end of the day if the savings are passed back to them.
What I find perplexing is the decision by town councils (probably with the exception of the 2 opposition wards of Potong Pasir and Hougang) to raise the S & C fees about 2 years ago (roughly about the time when the my condo decided to hire the cheaper cleaner) when they are supposed to have better bargaining power through economies of scale and hence, the ability to hire such foreign workers at much reduced cost? (Again, I can only assume that many of the 285,000 foreign workers mentioned in Minister Ng Eng Hen’s article are cleaners employed at town councils). Why then are they not passing back the savings to the residents, but instead, raising their fees, as in the case of the Pasir Ris-Punggol Town Council? ("....Pasir Ris-Punggol Town Council's...cleaning bill has risen 9 per cent since 2002..." - ST, 27 July 2004, "Town council explains new charges")
If I use the example of my condo to do a cost comparison, about $32.60 of each condo resident's monthly maintenance fees go towards the cleaner's fees (cleaner’s salary of $750 divided by 23 units = $32.60). Do Pasir Ris-Punggol residents know how much of the monthly $73.50 S & C fees ("...I am very surprised that I am paying $73.50 to the Pasir Ris-Punggol Town Council for my five-room flat..." - ST, 28 July 2004, "Five room, different charges") paid by them go towards the cleaners, after setting aside some 30 to 35% for sinking fund (simple estimates can be made by dividing cleaners’ salaries with the number of flats in the block)?
Do these cleaners just concentrate on cleaning their blocks on a daily basis? Or are they paying for the same cleaners who also double or triple up as cleaners for other public areas (like drains, parks, etc. around these HDB blocks) which should be funded from government funds instead of residents’ funds (I find it puzzling that the Pasir Ris-Punggol Town Council hardly receives any government grants for "...The constituency is especially squeezed for funds because it gets the least government funding of all the PAP town councils as most of the flats there are five-room units....,(as) five-roomers and bigger ones get nothing (in government funding)" - ST, 27 July 2004, "Town council explains new charges"). Why should residents' S & C fees be used to pay for the cleaning of public areas?
What about car parks – is the maintenance taken care of by this same group of cleaners (which is inappropriate) or rightfully by a new set of cleaners whose salaries should be funded from car park fees collected?
It is noted that in some town councils, cost saving measures are in place by having cleaners clean the HDB blocks "once every six weeks now" (ST, 27 July 2004, "Town council explains new charges"). Only once every 6 weeks? Cleaners in condos clean their blocks every day (except Sundays and public holidays).
How then can HDB residents justify paying $73.50 for cleaning done once every 6 weeks when condo residents pay only $32.60 for cleaning done daily? Is this the reason why "..During the dengue fever outbreak, it was reported that 49 per cent of the breeding grounds found were in Town Council-maintained areas" (Today, 5 Jan 2006, "Service please, Town Council").
The mystery can only be solved if town councils are more transparent in how residents’ fees so collected are spent – how much goes towards cleaners, sinking funds, lift maintenance, admin and utility charges, etc..
With condominium MCSTs, residents as stakeholders can question the council how each dollar contributed goes into what and where, but does the resident in the area managed by town councils have access to such information? That is the big difference - do the residents know how each dollar collected by the town councils is spent?
Perhaps in the coming election (even if this happens but once every 5 years), it will be good if such information be made available so that the residents know how well the town council has been managing their estates before casting their votes. While the residents welcome the government's providence to PAP-run town councils with billion-dollar budgets to upgrade their towns every election year, what is equally important is the council's prudential management of residents' funds with decision to increase further S & C fees to be taken only after exhausting all possible cost-saving alternatives.