Changes to Town Council Act: MND, return to the drawing board please

Oct 19, 2016 07.00PM |

by Bertha Henson

I THINK the G is probably really fed-up with me badgering it over the promised review of the Town Council Act (TCA). Now, after dithering for three years, it has come up with a consultation paper and asked for public feedback.

We are given one month. Then presumably, amendments will be introduced in Parliament in one sitting and approved in another. That is, unless the G counteracts its allergy to having a Parliamentary Select Committee scrutinise the words in the proposed legislation.

That wouldn’t do, I suppose, because the House would be compelled to have opposition MPs on the panel – and who knows what trouble they would kick up since the proposed amendments are supposed to bring them to heel.

Never mind that.

I was excited enough to look at what’s in the consultation paper for the public to chew on.

I was more than disappointed. I was appalled. At the lack of information and details that would allow a citizen to make constructive comments. It’s on the Reach portal. You can read it here.

I was more than disappointed. I was appalled.

Since the former National Development Minister Khaw Boon Wan proposed the review three years ago, nothing much seemed to have moved beyond a suggestion to use the Charities Act as a kind of proxy for town council governance.

This is a change from Mr Khaw’s earlier suggestion that the review take into account best practices of commercial companies. It looks like a big suggestion but all we have in terms of explanation is this:

Given the similarities between TCs and charities (both entities are run autonomously, manage public funds and consist of volunteers who help out on a part-time basis), MND has taken reference from provisions in the Charities Act, where appropriate, and adapted them for the purposes of the TCA.”

Somebody has forgotten that TCs are also political entities run by people interested in political longevity and who wouldn’t hesitate to tarnish a rival so that residents will be wooed over come the next election.

Political entities would balk at doing something unpopular even if it’s the right thing to do, like ensuring timely collection of service and conservancy charges and not imposing by-laws too strictly. Charities have no such qualms. They only compete for funds and volunteers – not clients.

We’re given the background and the scope of the review which is to:

(a) Clarify the roles and functions of TCs;

(b) Improve TC governance;

(c) Strengthen financial management in TC; and

(d) Enhance MND’s regulatory oversight.

So what has it come up with? You might want to note that the consultation paper has just seven pages and is in the form of a table which states what the G wants to amend and why.

Note that the consultation paper on changes to the Copyright Act, still going on, has 54 pages and is replete with examples of how the changes may affect writers and artistes. It contains websites that you can turn to and interesting signposts throwing up questions for interested parties to think about.

The TC consultation paper is so skimpy and generally-worded that you can only take issue with the amendments if you think the Housing Board should be running the show – or if you want to argue for the sake of arguing. There is so little fodder for you to chew on or mull over.

At 7 pages, the consultation paper is so skimpy… There is so little fodder to chew on.

So one amendment is about facilitating G agencies in carrying out statutory duties in housing estates “to better serve residents’ needs and interest”. You can’t possibly disagree with allowing the HDB to carry out upgrading and letting the police install CCTV cameras.

Is this really a problem? Have TCs been un-cooperative? And what does cooperation entail? Giving agencies carte blanche?

Likewise, the injunction that town councils “may be directed to make preparations for public emergencies” like a disease outbreak. Why? Because TCs “manage HDB common property (e.g. lifts, electrical installations, common water pipes etc.) and would play an important role in the national framework for managing public emergencies”. Hands up anyone who says no.

Then there is something on lifts, which is the big thing with housing estates given the spate of lift accidents, which seemed to have been shoe-horned into the consultation paper and which the G wants made law.

TCs will be required to set up a dedicated Lift Replacement Fund for cyclical replacement of lifts and critical lift parts. Currently, TCs are required to set up an Operating Fund for daily operations and a Sinking Fund for cyclical works (including lift replacement).

Given the lumpy and back-loaded nature of cyclical replacement expenses, MND will be seeking inputs from TCs on higher contribution rates to their Sinking Funds and Lift Replacement Funds (e.g minimum contributions from their S&CC collections and government grants). MND will be seeking inputs separately from TCs on higher contribution rates to their Sinking Funds and Lift Replacement Funds.

Read the second part carefully. It’s repeated. That’s why I said “shoe-horned”.


Conflicts of interest

One interesting amendment is barring TCs from engaging in “substantial trading or financial activities which are incompatible with or would detract TCs from their core functions in managing and maintaining common property in HDB estates”.

TCs can let out common spaces for a fee but it shouldn’t be operating commercial fairs or promotional events.

Now, which TC has been doing this? It would seem that the Workers’ Party and its past run-ins with various agencies over trade fairs – like who should give the green light – might have something to do with it.

You can’t argue over how TCs shouldn’t be running for-profit businesses on the side, but will this include events that raise money that will eventually return to the TC’s coffers?

Are TCs not free to look at other ways to raise money beyond raising service and conservancy charges and being dependent on G grants? Would spending time looking at how TC funds are invested qualify as “financial activities” that detract them from their core functions?

Or should the operative word be “substantial”, so a little bit of activity can lah…?

What is the G worried about? That a TC would be a money-spinner for some unscrupulous politician or used to enrich a political party? Or that it can be used as some form of patronage for cronies? If so, then safeguards should apply the other way – that TCs shouldn’t be allowed to engage companies owned by political parties or their cronies. Think AIM.

The next set of proposals seemed to have been the direct result of the Aljunied-Hougang-Punggol East Town Council (AHPETC) saga. They involve notification of changes in key appointments, timely submission of accounts and specifying what is conflict of interest. (Recall the fuss over the husband and wife team who ran FM Solutions and Services, which managed AHPETC. They are WP partisans and have been accused of over-charging or misusing their authority. Some sort of collusion was even alleged even though nothing illegal was found.)

According to the paper, “a TC member or staff has a conflict of interest if he/she or his/her associate has a personal or financial interest in the decision of the TC, and to outline procedures for declaring and keeping records of such conflicts”.

You wonder what the term “associate” and “personal interest” means. A politician and all members of a TC definitely have a personal and financial interest in any decision simply because their jobs and political future depend on it. Any resident will have both a personal or financial interest as well because nobody wants S&C fees raised. And does the G really mean any decision? Or decisions related to transactions?

There are a few other things it wants to do to make sure it wouldn’t have to go through the see-saw and ding dong that it did with the WP, with the judiciary as referee.

Basically, it wants powers to compel TCs to take action if it’s in financial trouble and to initiate compliance proceedings. No need therefore to quarrel about whether the G can send in independent auditors to look at accounts and so forth.

Amendments will make it clear. No, there is nothing about whether the G can withhold grants or can move in to take over a troubled TC.


‘Light touch’ no more

The Charities Act is heavily “referenced”. The TC penalty regime – there are practically none now – will be similar to those for charities. Likewise the amendments will take a leaf or several from the charities’ Code of Governance, which means TCs will be required to comply or explain why not.

The powers of the G or in this case, MND, is akin to that of the Charities Commissioner who can institute inquiries. The Charities Act took a very long time to pull together with extensive consultations and papers put up. Now, the G seems to think that it’s enough to piggyback on it.

Mr Khaw had said that the “light touch” on the regulation of town councils should no longer apply. Town councils have been given too much autonomy, or how can anyone explain why the WP was so far behind in collection of S&C fees or its messy accounting?

Frankly, the review should also govern the changeover of town councils from one political party to the next. The PAP’s Punggol East data hasn’t been handed over entirely a year after the election. A tighter administration of handover of funds and data would stop all the politicking that can arise.

And while the review is focused on the G’s regulatory powers; it is top-down. Is there any avenue for redress if off powers are abused? After all, town councils are not part of the civil service.

That’s why you have experts like Associate Professor Mak Yuen Teen, from NUS Business School, who thinks that de-politicising town councils and returning the management of towns to the HDB is “the ideal safeguard for residents’ interests”, reported TODAY.

“Having statutory boards like the Housing and Development Board (HDB) take over town management and allowing MPs to focus on national issues is better in my view… At the moment, we are hybrid and confusing.”

Given that the MND is “not independent of the Government”, it’s “critical” that the ministry uses the proposed enhanced powers in an even-handed manner on town councils run by the PAP and the WP, he said.

I don’t know whether to laugh or cry. Doesn’t it sound like the debate on whether the elected president should return to its old ceremonial role and leave the safe-keeping functions to someone else or some other body? And how it’s difficult for candidates to stay above politics since the electoral process is a political exercise?


Back to the drawing board

The G can do better to give people more information on the issues that confront town councils. It’s very obvious that the original drafters did not take into account issues such as changeover of TCs and what would happen if TCs won’t comply with regulations.

The words of the Act are so vague that even the courts have trouble deciding on the appropriate agency to start court proceedings.

The Act needs updating, just like the laws governing the elected presidency which had a constitutional commission recommending changes. Three years later, all we have from the G on an institution that affects more than 80 per cent of residents is a skimpy consultation paper.

So I will be sending this post to the Reach people with this message: Get the MND to re-do the consultation paper please. I don’t think anyone minds waiting a bit longer.


Featured image by Sean Chong.

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