Wednesday, 19 November 2014

SG Leaks: Interview with a former Town Council General Manager

Speaking on the condition of anonymity, SG Leaks managed to speak to a former General Manager (GM) of a PAP Town Council. When asked to comment on the various issues raised by The Real Singapore and The Online Citizen about the on-going debate over AHPETC and the Town Council Management Report, the former GM gave us his views …
1. “Requiring the transfer of surplus funds to the Sinking Fund makes it difficult for the opposition to run their Town Councils and this is what caused AHPETC’s deficit.”
Yes, it is true that the Town Council Act requires this transfer. All Town Councils have to transfer their accumulated surplus to their sinking fund after an election. The sinking fund is no different from the sinking fund in condominiums, which could be used to pay for their own major repair and repainting work. This is different from the operating surplus, where is it equal to the income minus expenditure for any particular year.
Operating surplus = Income – Expenditure
2. “Why is there a deficit in AHPETC in FY2012?”
Well, if you look at FY2010, Aljunied’s income - expenditure = $3.3m surplus. In FY2012, after merging with Hougang, income – expenditure = $734,000 deficit. Since the annual S&CC income remained largely unchanged (and of course not considering the high S&CC arrears), the deficit is likely due to sharp increase in its annual expenditure. This means they were spending more in FY12 compared to FY10. For example, they could be paying more to their Managing Agent, which I was told was a lot higher than any other Town Councils. From insider, I was told the Managing Agent was their own friends, and there was no tender process for this.
3. “That Opposition wards get less MND grant, and PAP wards get disproportionately more, so blatantly unfair.”
This is an utter lie. The amount of grants that a ward receives is quite fixed. From my knowledge, it is based on the number HDB dwelling units and the type of flats. For example, a 1-3 room flat will get higher grant as compared to larger flats. Since the profile of residents living in Aljunied has not changed significantly after 2010, the grant should be about the same.  It is sad that TRS has misquoted figures using the electoral base as the basis to determine S&CC grants.  Because the S&CC grants is only given to HDB flats. If the electoral base was used as the basis, MND would be subsidizing private property owners.
4. “That PAP wards have large deficits too.”
I think that we need to be clear on how deficits or surpluses are reported. Unless a Town Council has been run well for several years and hence has access to past surpluses, all Town Councils will incur deficits before S&CC grants. It is thus a misconception that income from resident’s S&CC is sufficient to run and manage a Town Council. Without government subsidies (that average 40%), no Town Council can survive. The main point is compare how much surpluses (if any) a Town Council has after subsidies.
Thus, while TRS and TOC would like your readers to think that the issues with regards to AHPETC are caused by the PAP (and the MND) trying to fix the Worker’s Party, the truth is that poor management and possible misappropriation of public funds is the cause.
Being intimately familiar with the running of a Town Council, industry talk is that the AHPETC’s arrears rate is high because the Town Council wants to be popular with their residents. In my former role as the GM, I always struggle with balancing exercising empathy for individuals facing financial hardships, with the need to ensure that I have sufficient cash flow to run my Town Council well for the rest of my residents.

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