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$1 billion in town council funds : what’re they used for?

Posted by theonlinecitizen on December 3, 2007

By Leong Sze Hian

I refer to the CNA news report “Prudent to protect sinking funds of town councils: DPM Wong” (CNA, Dec 2) and the article “Move to protect council funds” (Today, Dec 1).

According to Creative Technology’s (CT) annual report, Holland-Bukit Panjang Town Council (HBPTC) was listed as one of the majority shareholders with 530,000 shares currently valued at about $3.2 million. I understand that CT’s share price from 2003 to 2007, has ranged from a high of $27.30 to it’s current price of $6.10 on 12 October 2007.

According to CT’s Statistics of Shareholding as at 19 August 2005, HBPTC held 200,000 shares. The CT high price for fiscal 2005 and 2006 was $27.20 and $14.40 respectively. Does this mean that the 200,000 shares could have cost as much as $5.4 million?

When did HBPTC purchase its CT shares, and at what price?

If it had held its total holding of TC shares on 1 July 2006, I believe it would have been valued at about $6 million.

According to HBPTC’s annual report, it had $8.4 million of quoted equities on 1 April 2005.

If this is the case, does it mean that it accounted for about 70 per cent of HBPTC’s total quoted securities portfolio of $8.4 million?

If the above assumptions and timelines are correct, why is its quoted securities portfolio so apparently non-diversified?

Isn’t diversification the key principle of prudent investing?

What guidelines do town councils use in investing their residents’ funds?

Another question which needs to be asked is: What are the profits from such investments used for and have they ever been used, since town council funds keep growing to more than $1 billion now? Perhaps the town councils should include this in their annual reports and make them public.

When we last checked, only 6 out of the 16 town councils have their annual reports easily available on their websites. Why are the reports of the other 10 town councils not available on their websites?

Read also: “Uniquely Singapore, F1 or F9: “Residents willing to pay more for service and conservancy?”

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23 Responses to “$1 billion in town council funds : what’re they used for?”

  1. LifesLikeThat said

    Without any form of accountability or transparency, if they lose money in investments, they can just increase S&C charges and nobody would know.

    $1,000,000.00 in funds. Goodness gracious holy macaroni!

    And everyday singaporeans are struggling to survive. And all they can say to those struggling is: “Come and get our food vouchers!” – like Vivian Balakrishnan just did yesterday.

    The government is losing – and losing it fast! Now, lets see if they really increase the ministers pay again.

    Bloody PAP. I’m sick of them.

  2. Gary Teoh said

    Til now I still don’t know town council used our fund for investment, what happen it loses money, who will suffer ?PAP or the HDB dwedllers? What kind of policy is this

  3. Eric Cheng said

    I wonder if they really know how to manage their fund. It would have been reasonable to expect them to limit their risk exposure and not to hold too much in a single company stock. Would like to know the value of the 530,000 shares as a percentage of their total reserve held.

    The Town Council should remember that it is not an investment company. While it may be necessary to invest some funds to earn a better return, it should take a responsible and conservative approach by allocating the bulk of its reserves in fixed income instruments like our Singapore government bonds.

    People who lose money in investment are usually those who knows nothing about it and those who think they know everything about it.

    Hope they have learned a good lesson from here.

  4. macabresg said

    I hope it’s not another attempt to restrict the use of opposition TCs’ funds. It’s good that the government is highlighting this potential problem while the stock market is still bullish.

  5. blackshirt said

    In most (if not, all) of the current Town Councils’ Annual Reports that I have read, the item “Funds with fund manager” was used in the finanical statements. There was no mention of the names of the fund managers concerned.

    For example, in the Tanjong Pagar Town Council Annual Report (Page 18-34), it is stated on Page 22 (Section 5: Sinking Funds) as follow:

    Non-Current Assets
    • Fund with fund manager = S$37,172,597
    • Investments = S$73,307,489

    (See page 25 for additional notes)

    Now, who are the likely fund managers that the town councils will use?

    There are always a mention of Financial Reporting Standards (FRS 39 & FRS 32, both revised 2004). This is especially to address the reclassifications of investments and sinking funds in the current annual reports. It seems that investments and sinking funds need to be reported in a different way.

  6. Alan Wong said

    So WTF are these town councils doing with so much surplus funds. I always thought that the priority of these town councils were to serve the common needs of each constituency and that the town council fees/charges were not meant to generate huge profits for the benefit of these town councils to invest in shares.

    So basically the Gahmen cannot now deny that all these years these town councils were actually sucking the hard earned monies of all the constituents. No wonder during election times they can out with so many carrots to entice the voters in the opposition wards which implied that they were actually using the constituents’ own contributions to bribe the same voters.

    Come to think of it, so the PAP Gahmen has actually been taking us for a ride all these while!

  7. Singapore Resident said

    Er…so can i drop by my town council for FREE investment advice?

  8. Singapore Resident said

    Town council so eager to slap $5 penalty for late payment…at least now i know that $ is invested to make more $..so in a way, i contributing to their sinking fund – juz hope it doesn’t really sink one day.

  9. […] are fed, up with progress! – The Online Citizen: $1 billion in town council funds – what’re they used for? – Pseudonymity:Singapore’s Strong Pro-Death Penalty Stand At U.N. Leaves Many Angered – i have […]

  10. xtrocious said

    I think the key question is how qualified are those guys at the Town Councils in investment…

    Maybe it’s time for the government to tighten the loophole that allows corporates and other non-profit entities to behave like mini treasury departments but without adequate risk management systems in place…

  11. Ong Lei Kit said

    Town Councils investing??? Doesn’t sound right. I am not a blogger. However, I get most of my news analysis from blogs. I am really looking forward to the Bloggers meet and meeting up with people like Alex from Yawning Bread, Bad Boy Bambie from the bruderhud. Can someone pls tell me who was the bloggers that AIMS originally approached? I would also like to aks whether the bruderhood is a blog, I am very confused as I don’t they are even listed. That is very strange. Thx and c u all there tonite

  12. Seeking Salvation said

    I have come across the ownership portfolio when doing a public valuation inspection at the inland revenue in 2003 that EM Services Pte Ltd own at lease over 10 units of Regency Park
    units (an upmarket condo in district 10) The rationality of running a town council should utilising the funds for maintaining the estate if the portfolio investments shows these
    ownership it does means they are overcharging and collecting too much conservancy and maintenance fees. what are we so say when the fees are collected however the level of service and cleanliness is almost zero.

  13. Disgusted said

    This is just the tip of the iceberg. The way the current government runs the country leaves me sick and disgusted. Very few(if any) of the current generation in parliament have any sort of vision or ability to get things done. Simply pathetic. We’ll see how long this currrent system can last before it implodes on itself.

  14. Barry Lee said

    The town councils should just aim for a balance budget and not be obsessed with running a surplus for surplus sake…

  15. TuraiKiller said

    why refuse removal charge was reflected on our PUB bill & should that included with monthly Town Council S & C charges, isn’t this a double charge from every local residents. Even Pub bill there are a lot of additional charge with adding burden to every citizen residents. The Charges like water conservative tax when there are already got 7% gst, look how greedy our government semi government sector.

    Furthermore, what the hack of this sanitary appliance fee for 2 fittings, shouldn’t that consider our home mortage when we purchased the so called subsidy flat. Lastly, waterborne fee, look i am ready sick of our government sucker mentality money driven strategy company.

  16. saintmoron said

    This money crazy society will soon be undone by the greedy culture eventually.

  17. shirley said

    As part of the younger generation in sg, I will be reminded to cast my vote wisely in the next round of election. May I implore for more truth to be revealed as we continue be disgusted by the current govt.

  18. saintmoron said

    The truth is You see more Singaporeans picking anything that can get them a little value to survive; see Martyn Sees’ video for proof.

  19. Foo P M said

    Town Council funds and UNCOMMON Conservancy Charges for COMMON Area Maintenance?

    It is interesting to note that Town Councils actually use public funds to invest, and that there is $1billion in town council funds? It is appalling to learn that Town Councils, with example of Holland-Bukit Timah Town Council’s investments, should even invest using public funds that are meant for common area maintenance. In addition, nothing is done to pass back the huge amount of earnings back to the residents as savings. In fact, the conservancy charges seem to increase at every opportunity available, e.g. increase in GST.

    On this note, with references to Ms Maria Loh Mun Foong’s letter on “Why higher fees for empty flat?” (on ST Forum, Sep 29, 2007), as well as the news article “Hougang Council Raises Conservancy Charges” (by Jeremy Au Yong on ST, on 3 Oct 07), I’m writing this letter to the Town Councils to query their rationale for the current differentiation of Service and Conservancy Charges (SCC) rates based on the type of flat. I opine that the logic behind this design is fundamentally flawed, as the system is not consistent with its very purpose for which it is used for.

    1) Purpose of SCC. SCC that are “collected by the Town Council monthly are for the maintenance and enhancement of the common areas. This does not include collecting and removal of refuse.” (ref: http://services.spservices.sg/cs_faq.htm#Qn8b) Purpose of SCC is to provide for funds needed for the maintenance of common areas in the estate (i.e. the corridor, walkways, playground, etc). How then does each individual flat area fall under the definition of “common area”? Each flat is an area that is “privately utilised” by each owner. Unless Town Council is intending to maintain the individual flat’s premises, there is no grounds to include each individual flat area as “common area”.

    2) Property Tax & Refuse Removal. Property tax is already differentiated based on the type of flat that one stays in, and this is consistent since personal property is not shared common land. Thus, it is fair that property tax be based on the size of the flat and its share value. However, there is no reason that the SCC, which is for the maintenance of “common areas”, should be based on the same principle used in property tax calculation as well. Likewise, the refuse removal charges for each property owner are paid to the SembWaste Pte Ltd in the monthly utilities bill.

    As such, I think Town Council should be clear on what “common areas” constitutes. Common areas in the estates (in both private estates or HDB estates) are, as the name suggests, utilised by everyone regardless of the size of property they stay in. i.e. someone staying in a 3-room flat will also use the same corridor, same lift, same walkways, same playground, same void deck, as another person staying in a 5-room flat.

    I opine that SCC, based on its purpose of maintenance of common areas, should be a flat rate for all flat owners regardless the type of HDB apartment that he or she owns.

    I have raised this issue to Town Council since Nov 2006, but have yet to receive a satisfactory reply on this query. I would appreciate that Town Council will review the logic behind SCC (i.e. the “why” of SCC, and not the “what” of SCC), and correspondingly review the existing system of differentiated SCC charges.

    Senja Link
    Bukit Panjang

  20. Terence Lee said

    I cannot comprehend. Why is $1b used for investment when our government cannot even fork out $20 more for the poorer citizens who cannot even afford $1. I cannot even comprehend how the people in Town Council can have good investment foresight. If they do, they wouldn’t be in the Town Council will they?

    The covered walkway, the fancy (but slippery) tiles at the void deck, the expensive designer playground are redundant for the average commoners. What I would like to see is the money being used to subsidize our poor old folks who live in poverty after toiling almost all their lives for Singapore. Why are we still asking them to work, work, work? Why not just spare a bit of that $1b as welfare for them? I’m appalled.

  21. Crazy Dog said

    Vote wisely next time !!! If you have a chance to vote at all !!!!

  22. Anonymous said

    Why you all so worried about the 1 bn? GIC just bailed out UBS with a 10 bn capital injection. Imagine 10 bn growing at 5% interest … do you still need longivity annuity?

  23. not_here said

    so much money and yet so little done for the estates and we even have the govt saying that the punggol CC requires fund raising before it can be built. looks like whatever going into the pockets will find it difficult to be distributed back to the citizens and ended up, we have the town council trying to earn more money and focus in investment instead of thinking how to improve each town and quality of living.

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