Friday, 21 November 2014

AHPETC S&CC Scandal - Recap of the Story So Far ...

The Story So Far …
Since they have taken over Aljunied GRC, the Worker’s Party has been mismanaging the town council. They are in a financial mess and throwing smokescreens to cover it up.
$1 million is unaccounted for in their accounts. Management contracts have been awarded to cronies without a tender. Today rates are up to 50% more than a PAP town council – and they might hit 70% or more.
The most recent sign of mismanagement is the big hole in arrears – nearly one third of people don’t pay their S&CC fees. So effectively, two-thirds are subsidizing one-third of residents, who just decided that they don’t need to pay. From a $3.3 million surplus, AHPETC has run down the accounts to minus $700,000 after mingling their accounts with Hougang.
Now they are throwing smokescreens – their supporters are saying that the deficit is because they don’t get as much in government grants. This is plainly false. In fact, more than false. It malicious. Deliberately drowning out important questions with false noise.
Let’s work through this.
The Red Herring of Government Grants

Grants are transparent and objective, based on household numbers and types. It has been the same for Aljunied both before and after 2011.

The annual operating grant, also known as S&CC grant, is allocated to Town Councils based on the number of HDB flat units and the flat types. AHPETC’s grants are lower because they (a) manage fewer HDB flat units than TPTC and AMKTC, and (b) have the lowest proportion of 3R or smaller flats amongst the TCs listed:

AHPETC’s income for FY10 and FY12 was largely unchanged. The operating surplus (which gets transferred to sinking funds) is a separate issue. The only thing that has changed is AHPETC’s high expenditure. As a result, AHPETC’s financial position, compared to itself previously, has deteriorated. This is because its expenditure had risen sharply, when income and resident profile remained the same.

Higher expenditure has nothing to do with the transfer of the surplus.

In FY12, three TCs had an operating deficit: AHPETC ($740k), Moulmein-Kallang TC ($840k) and West Coast TC ($380k).  In FY13, MKTC and WCTC turned in a surplus.

We knew MKTC and WCTC had a deficit in FY12. They showed improvement in their FY13 statements. Where is AHPETC’s? Has spending further increased?

What is more instructive is that the Worker’s Party itself has been conspicuously quiet. Instead the claims are made by its agents, obscuring the main questions with political sabre-rattling.

The important questions have been asked since last year – and till today we have no answers.

Why So Quiet WP?

In May 2013, we wanted answers on the poor performance of FM Solutions and Services (FMSS), the managing agent for the WP Aljunied-Hougang-Punggol East Town Council (AHPETC). FMSS is a company set up four days after the WP won Aljunied in the 2011 elections and owned by a husband and wife who are WP party faithful.

To date, the town council has given away more than $26 million of public funds in contracts to these supporters - $5.2 million of this was handed over without a tender. In addition, it paid significantly higher management fees, when compared to the previous managing agent and to other town councils.

Ms Lim suggested that the higher price could be due to inflation. Really? Inflation in Aljunied is 50% higher than in Tampines?

During the debate in Parliament, Ms Lim issued a statement to explain the MA rates. Her estimate of the MA rate for FY2012 was $7.58 (more than 50% higher than the Tampines rate of $4.99). At $7.58, the MA contract value for the whole estate for 3 years is $15.8 million. But Ms Sylvia Lim had declared to HDB last year that the contract value was $16.8 million.

Where did the missing $1 million go? Ms Lim said that this was because the MA rates were “staggered”. So, does this mean they are going to rise by $1 million next year? She refuses to give a clear answer.

Perhaps the question is better answered by Danny Loh and How Weng Fan, the husband and wife who own FMSS. They were assentor and proposer for the WP team of candidates who contested in Ang Mo Kio GRC in 2006 General Election. They are the secretary and deputy secretary/general manager of the AHTC. Are they also the beneficiaries of the first $5.2 million contract, given to FMSS to manage AHTC without a tender? Are they profiting from the very high management fees paid by the town council, funded by the residents of Aljunied? Are they paid twice – once as employees and again as owners of FMSS?

Is the Worker’s Party using residents’ money to reward WP supporters? These questions remain unanswered.
What are you hiding WP? But we must continue to ask them these difficult questions. If the Town Council is inefficient, or they are inexperienced, these can be forgiven. But mismanagement and continued hiding of crucial information on town council affairs – this is far more serious.
The AHPETC collects more than $3 million in SC/C each month. We have to ask questions – no matter how inconvenient - about where this money is going.

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