By Terry Xu
Service and conservancy charges (S&CC) for flats, shops/offices and market/cooked food stalls have been increased for eight town councils, Ang Mo Kio, Jurong, Marine Parade, Moulmein-Kallang, Nee Soon, Pasir Ris-Punggol, Potong Pasir and Sembawang town councils, with effect from 1 April.
Sembawang Town Council, which announced the increase in an earlier statement, cited rising costs and inflation as reasons for the revision.
The statement wrote:
The current Service and Conservancy Charges (S&CC) have remained unchanged for the last ten years. Over this period, estate maintenance and operational costs have continued to rise. Despite’s Sembawang Town Council’s best efforts to manage these rising costs, the growth in maintenance and operational costs has made it increasingly difficult to continue our operations at the current S&CC rates. As a result, a two-stage S&CC rate revision will be implemented, starting from 1 April 2014.
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Table depicting the rate of increase for the S&CC of different properties.
Taking the income from S&CC of Pasir Punggol for example, it took in about 66 million for the last fiscal year. The increase of S&CC would probably bring in an increase of probably 2 to 3 million or more to “offset” the “deficit” of the town council’s operation.
But is it really justifiable to increase the S&CC for the residents? Apart from the “deficit” of the town councils, created largely by the transfers of income into sinking funds. What about expenses of the town councils? Can anything be done to reduce cost so as not to pass the buck to the residents?
Using Pasir Ris Punggol Town Council as an example. Let’s revisit the cost of the electricity bill which is said to have increased over the years.
How much was the cost of electricity for 2012/2013? S$21,298,519
And how much more did the town council pay in relation to the year before? S$275,467 (S$21,023,052 in 2011/2012)
Does that seem like a significant increase in cost? Well, if electricity bills are increasing beyond inflation, someone got to explain why the power plants are not national assets to begin with.
Moving on to another cost of the town council in 2012/2013, cleaning services.
How much did the town council pay for cleaning services for the financial year of 2012/2013? S$10,068,042
And how much more did the town council pay in relation to the year before? S$1,299,532 (S$8,768,510 in 2011/2012)
Rise in S&CC and the “increase” in cleaner wages come hand in hand?
In defense of the increased contractor fees, some may say that the increase in cleaning contractor costs are mostly due to increase in wages for the workers. But in the case of Pasir Ris Punggol Town Council, is it the case?
Going back to the story which TOC covered about the estate cleaners at Pasir Ris GRC were being sent back because they refused to pay a sum of $5000 to have their contract renewed.In the interview, we got to know that the cleaning company paid the workers $700 a month for seven days a week with no overtime pay for the period of three years with no pay increase. (Only couple tens of dollar nearing to the end of the contract with the estate.)
We were informed that the cleaners work in a team of 15 workers maintains the estate along with about 3 Singaporean cleaners who provide the quota for the foreign cleaners.Estimating how much a company would need to pay in such an instance. A total of 15 workers paid 700 dollars a month without overtime along with 3 cleaners paid say… the minimum amount of 1000 dollars now, comes to be 13500 dollars.
I have asked the Bangladeshi supervisor how many blocks do the team of cleaners clean, the supervisor said to be close to two hundred blocks. For the benefit of a doubt, Let’s put it to be 100 blocks per team given that we do not have the exact figures of the other cleaning companies servicing the estate.So given that the estate has said to hold about one thousand blocks, so we can assume that ten teams of the above configuration is required to clean the estate.In total, one month in labor cost, the different cleaning companies engaged by the town council would have to pay up to 135,000 in total.
Multiply that by 13 months, it will bring the total annual labor cost to be 1,755.000. (This is despite knowing that the foreign workers whom we interviewed are not paid the 13 month bonus.) Based on the team which I interviewed, they had 15 persons staying in one five room HDB flat which cost about $2000 per month, so annual cost of accommodations would probably cost up to S$300,000,
Of course, not forgetting the work permit levy. S$600 multiplied by 150 foreign workers for a year, that comes up to be 1.08 million. (Ministry of Manpower does earn alot from the employment of foreign workers.)
So once again, how much does the Pasir Ris GRC pay in sum for cleaning services to the contractors? S$10,068,042.
By subtracting the estimated labor cost and work levy off from this grand sum, we have only to guess that detergents, brooms, supervisors and the profit margin comes to around 7 million.
Town councils passing the buck to residents
Taking Pasir Ris Punggol Town Council for example again. Even if it employs two hundred locals paid the minimum sum of 1000 dollars, it would only cost the town council about 2.6 million instead of thecurrent cost of 10 million. Even if we throw in the local supervisors which are not present in the team which I interviewed, it would still never reach the amount that the town council is paying now.
So given that the estate requires close to 200 cleaners. Why is it that there is no intention of employing the cleaners within the estate itself?Some may say it is impossible to rely on locals to be cleaners. If that is the case, so be it. Though the town councils, would save even more if they employed local cleaners.
And this is just the tip of the iceberg, what about the other costings of the town council? Is there any part of the job which the town council performs itself instead of just simply outsourcing the work out?
Even the management of the contractors are outsourced! In the case of Pasir Ris Punggol Town Council, it pays up to 7.3 million to the management agent and for Sembawang Town Council, that went up to 9.8 million. Rather than trying to keep up with the increasing costs, why not have a re look at what constitutes most of the expenses of the town council before passing the buck to the residents?
Town councils running at a “deficit”
It cannot be emphasized anymore than that the town councils do, in fact, operate in surplus. The only reason town councils operate in deficit is that it transfers a portion of the operating income into the sinking fund before it is used on the operating expenses.
Under the Subsidiary legislation of the Town Council Act governing sinking funds, it is stated that 30% to 35% of the S&CC collected shall be transferred to the sinking funds.
Going back to the example of Pasir Ris Punggol Town Council. In 2012/2013, the town council collected S$66,367,208 in S&CC, on papers, it had a deficit of S$2,787,162. But how much of the 66 million was transferred into the sinking funds for the same year? S$23,154,712.
If not for the sinking funds, the town council would have an operating surplus of S$20,367,550. How is that an operating deficit to begin with? Not to mention that there is 135 million in the existing residential property sinking funds.
Deep rooted problem
A few weeks after the announcement of the increase of the S&CC for the 8 town councils, Aljunied-Hougang-Punggol East Town Council (AHPETC) announced that it will increase the charges in its estate amounting to between S$3.50 and S$10 for some residents. It too found itself in deficits of 5 million in its operating expenses.
So, is it possible for any town council run to have done any differently? Potong Pasir SMC was one. For many years, Singapore People’s Party employed the cleaners themselves and managed the contractors by the town council itself. But after it lost the election in 2011, the candidate from PAP had a management agency to take over the operation of the town council, going back to conventional means of management.
Has the town council system that was introduced in 1989 to empower elected members of parliament of the constituency done any better for the residents apart from instilling fear that the estate will deteriorate into ruins should an opposition party come to power through the elections.
The AIM saga of the town councils had brought a new perspective to the whole issue. Is there any safe guard in the abuse of power by the town councils to either protect a party’s interest, to jeopardize competition from other political parties or to give favors to supporting companies to the party?
Do residents have any say over improvement projects, how money to be spent, whether a contractor should be re-engaged? How democratic is a system that allows one to vote for one’s choice once only 5 years?
The issue is a deep rooted problem which affects all residents. Increasing cost of operation will be always be present, and unsustainable given that one has to cater for the profit margin of private contractors on top of rising labor and operating expenses. But it is one that people of the country cannot advise nor get involved in as power of the residents are merely restricted to feedback and complaints. Perhaps only if they raise this issue up during election period, would those in power listen to their grievances, for only it is then when the people have the power which they fear.