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DIALOGUE SESSION ON THE INCLUSION OF FINANCIAL MANAGEMENT INDICATORS IN THE TOWN COUNCIL MANAGEMENT REPORT
At a dialogue session seeking inputs on the Town Council Management Report (TCMR), participants felt that proper financial management represented an essential component of a town council’s work, and indicators on this aspect should form part of the report. However, simply ranking or comparing raw results across town councils might not be meaningful, given their different property and resident profiles. Instead, the information to be presented should help residents and town councils monitor trends of their key indicators over time.
2 Although audited financial accounts from the various town councils are already available to the public, participants felt that an additional summary, containing brief, key financial information, would be helpful. This summary should be easy to understand and accessible to the public via newsletters and online channels.
3 Taking a longer term view, some participants suggested that individual town councils forecast their long-term expenditure requirements over the next few years and assess if their sinking funds would be adequate for the needs of each town.
4 Participants also felt that the extent of overdue service and conservancy charges (S&CC) should be included as one of the indicators of financial management. S&CC arrears directly affect the town councils’ financial health and ability to pay their bills. It also shows whether the town council is effective in engaging their residents to play their part in sharing the costs of estate management.
Dialogue Sessions
5 These views were articulated at the final of three such dialogue sessions organised as part of the multi-pronged public consultation on the TCMR framework. The details on the participants’ feedback and comments at the dialogue session on Financial Management are in Annex A.
6 The dialogue sessions were chaired by Senior Minister of State for National Development and Education, Ms Grace Fu. Commenting on the discussions, Ms Fu said, “The dialogue sessions helped us to focus on what residents and town councilors felt were important. Residents said some basic key financial indicators such as arrears should be in the TCMR. They also wanted short summaries of the audited financial reports to be separately disseminated at the town-level. This will help residents to better understand the work of their town councils. While the dialogue sessions have concluded, we still welcome feedback through online channels. All these will help us shape the TCMR framework.”
e-Poll on TCMR
7 The public consultation for the TCMR continues. Apart from submitting feedback at www.hdb.gov.sg/TCMR, interested members of public can also provide their quick views on the TCMR via an online e-Poll on the REACH website at www.reach.gov.sg/tcmrpoll from 27 July 2009 to 7 Aug 2009. Members of the public with views on the TCMR are welcomed to contribute relevant feedback through these channels.
Background
8 The TCMR is meant to provide HDB residents with objective information on key areas of town council management. It will comprise a common set of key indicators and the respective results of every town council. The intention is not to rank town councils, but to provide an additional basis for informed discussion between residents and their town council about their estates and living environment. It will help residents and town councils determine how their town improves over time.
9 The multi-pronged TCMR consultation process was announced by MND and HDB in June this year, and as part of the consultation process, MND/HDB invited HDB residents and representatives from all town councils to three dialogue sessions in June and July 2009. The dialogue sessions sought views on the possible indicators to be included in the TCMR. Each dialogue session focused on a specific theme – Cleanliness, Maintenance, and Financial Management respectively.
10 Feedback received from the various channels will be taken into consideration in the development of the TCMR framework that is scheduled to be ready in Sep 2009. The results of the first TCMR is expected in 2010.
| Issued by: |
Ministry of National Development
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| Date: |
27 July 2009 |
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Annex A
Summary Notes of Town Councils Management Report Dialogue Session on Financial Management
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S/N
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Issue
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Participants’ Comments / Feedback
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| 1 |
Including Financial Management in the Town Council Management Report (TCMR) |
Participants generally agreed that financial management was an important aspect to include in the TCMR.
Some participants felt it was not meaningful to compare/rank town councils on their performance in financial management since each town council was unique, and media should not be encouraged to do so too. Any indicator on financial management would be more meaningful for monitoring trends over time |
| 2 |
Assessment of financial management |
While some participants pointed out that the town councils’ financial management was already reflected in their audited annual accounts, others wanted some simple and summarised information on town councils finances that are easy for residents to understand. This could include information on how the town council manages its income and expenditure. It could be included in town councils’ newsletters and websites regularly, instead of being part of the TCMR. |
| 3 |
Adequacy of funds |
Some participants suggested a measure of whether town councils were putting aside enough sinking funds for long-term works. If town councils could forecast their expenditure needs over the next few years, based on their maintenance schedule, this could help show if their sinking funds were adequate. This would enhance public visibility and understanding that the sinking funds collected were not spare reserves but needed for specific, long-term works.
Participants highlighted that the town councils helped residents by co-paying for the Lift Upgrading Programme (LUP) works using their sinking funds. An increased number of lifts and lift landings would need to be maintained after LUP. Some suggested that more government grants be given to the town councils to help offset some of the increase in costs.
Some residents felt that the sum of the service and conservancy charges (S&CC) collected by town councils and the season parking fees were comparable to the maintenance fees in some private condominiums. It was clarified that condominium unit owners collectively owned the land of the condominium project. Therefore, the price of a private condominium unit would have included the costs for the car park lot. This was not the case for HDB estates, where the car park charges were collected separately upon usage .
A few participants shared that they were involved in both town council work and private condominium management corporations. They noted that in private condominiums, the management corporations would inform residents of all expenditure required and seek residents’ agreement to raise maintenance fees. Private condominium residents would usually agree to the fee increases, as they understood its necessity. If residents voted not to raise maintenance fees, they would need to pay a lump sum later when major repairs were due. If there were insufficient funds, the necessary repairs would not be carried out or delayed until money was collected. This was not the practice in public housing estates as town councils collected S&CC and accumulated sinking funds over time so that essential works can be carried out without additional lump sum payments by residents . |
| 4 |
Service & Conservancy Charges Arrears |
Some participants also felt that town councils should focus on recovery of overdue S&CC. This was because residents needed to play their part in paying S&CC for town councils to carry out estate management. S&CC also made up a substantial part of the town councils’ income and S&CC arrears could affect town councils’ financial health. Participants agreed that S&CC arrears recovery should be included as one of the indicators of financial management.
While some cautioned that the enforcement actions taken by the town councils would be unpopular and politically difficult, there was general consensus that town councils should not shy away from taking action to recover S&CC arrears from residents who owed S&CC with no strong mitigating reasons. One suggestion was to impose penalty charges and heavy interest rates on outstanding S&CC, as was the case in private condominiums. |
| 5 |
Town councils’ investments |
One suggestion was for town council funds to be pooled together for investing. However, some felt that compulsory pooling of funds would not be able to meet local financial expenditure preferences and needs. It was also regressive, as TCs were empowered 20 years ago to better cater to local preferences and needs. |
| 6 |
Issues relating to Town Councils’ operations |
Participants also brought up several issues on town councils’ operations and made suggestions on how to improve them. The suggestions were:
- To reap economies of scales, where feasible, by calling tender for the same type of work together. However, by putting too many eggs in one basket, the potential downside was that the failure of a single contractor would affect many areas simultaneously.
- To first assess the financial situation of the residents in S&CC arrears and then take appropriate enforcement actions.
- To better empower the residents in estate management matters, town councillors could make themselves known to all residents so that residents can easily channel feedback through them. Some participants clarified that the names of the town councillors are already displayed on the block notice boards.
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Last updated on 29 July, 2009
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