Is the “controversial” AHPETC management fee really that controversial?

ganga1 Sept 2015

By GangasudhanWith much being said about the management fee being paid by Town Councils to their vendors, the question comes down to how much all the Town Councils pay for the service of administration and support for the running of these municipal bodies.In order to do so, the audited 2013/2014 Annual Reports of the following Town Councils were inspected and the management fee for each was extracted and compiled in the table below. For added comparison on an additional critical role that Town Councils play – in keeping the estates they manage clean and tidy, the amount paid for cleaning works has also been included in this table.

Town Council	Management Fee	Cleaning Works	Constituency Size¹
Marine Parade	$3,592,395	$6,110,078	178,052
Aljunied - Hougang - Punggol East	$6,804,459	$8,990,525	200,817
Pasir Ris - Punggol	$6,498,180	$9,387,792	195,703
Choa Chu Kang	$4,491,218	$7,201,505	186,243
Nee Soon	$5,126,119	$7,197,430	148,168
Tanjong Pagar	$6,067,848	$8,961,437	170,639
Tampines	$3,445,019	$5,330,485	137,437
West Coast	$5,045,944	$6,873,931	146,688
Bishan - Toa Payoh	$4,760,284²	$5,823,706	122,416
Ang Mo Kio	$5,846,645	$9,086,487	205,802

Table 1: Management Fee and Cleaning Work Expenditure Reported in Annual Report 2014In terms of total cost paid, AHPETC’s expenditure is indeed the most expensive among the ten Town Councils listed here, with the majority at least a million dollars cheaper.However, factoring the size of the estate being served offers quite a different a picture. Taking the perspective that any expenditure is for the benefit of the residents of the constituencies being served, there is justification to compare the expenditure on an average-per-constituent scale. By dividing the management fee across the number of constituents served by each Town Council (based on the electoral count in the EBRC 2011 report), the comparison may even be more equitable.

Town Council	Management Fee	Constituency Size	Average Fee
Bishan - Toa Payoh	$4,760,284	122,416	$39
Tanjong Pagar	$6,067,848	170,639	$36
Nee Soon	$5,126,119	148,168	$35
West Coast	$5,045,944	146,688	$34
Aljunied - Hougang - Punggol East	$6,804,459	200,817	$34
Pasir Ris - Punggol	$6,498,180	195,703	$33
Ang Mo Kio	$5,846,645	205,802	$28
Tampines	$3,445,019	137,437	$25
Choa Chu Kang	$4,491,218	186,243	$24
Marine Parade	$3,592,395	178,052	$20

Table 2: Comparison of Management Fee per ConstituentSuch a comparison, as illustrated in Table 2, suggests that AHPETC’s management fee payment could be about the average as compared to the others – not the cheapest, but not the most expensive either. Interestingly, Bishan – Toa Payoh Town Council’s expenditure on salary (since they appear to employ their own administrative staff rather than appoint an external management agency) is higher on a per-constituent comparison than the other Town Councils in the list.Cost of keeping estates cleanLooking at the expenditure on cleaning the estates under their charge, AHPETC is the third-most expensive in terms of total cost, behind Pasir Ris – Punggol and Ang Mo Kio Town Councils. But again, when the expenditure is broken down on a per-constituent basis, AHPETC seems to be on par with the likes of Ang Mo Kio Town Council and lower than five others, as illustrated in Table 3.

Town Council	Cleaning Works	Constituency Size	Average Cleaning Works
Tanjong Pagar	$8,961,437	170,639	$53
Nee Soon	$7,197,430	148,168	$49
Pasir Ris - Punggol	$9,387,792	195,703	$48
Bishan - Toa Payoh	$5,823,706	122,416	$48
West Coast	$6,873,931	146,688	$47
Aljunied - Hougang - Punggol East	$8,990,525	200,817	$45
Ang Mo Kio	$9,086,487	205,802	$44
Tampines	$5,330,485	137,437	$39
Choa Chu Kang	$7,201,505	186,243	$39
Marine Parade	$6,110,078	178,052	$34

Table 3: Comparison of Cleaning Works Expenditure per ConstituentThe casual reading of the publicly available information thus seems to suggest that AHPETC’s management fee arrangement is not really out of the ordinary.Of course, there are other ways to compare the figures along a common unit of measurement – for instance by the number of commercial and residential units managed by each Town Council, which would then present a different scale of comparison that may contrast against the simplistic illustrations presented here. It is also possible that the type of facilities under the purview of each Town Council may impact the management fee costing. If more accurate information is made available, it would be possible to ascertain a more equitable comparison than these tables.Nevertheless, the analysis of the data here serves its purpose to demonstrate that it is quite possible that the issue regarding the management fee paid by AHPETC may not be as serious as first thought.¹Constituency size derived from the report by the Electoral Boundaries Review Committee in 2011.²Bishan - Toa Payoh Town Council does not report a management fee but employee salary, as they operate the Town Council in-house.