7 questions for the Town Council

I refer to the article “MP Teo Ho Pin: Our net investment return of TC fund is 2.9%, better than inter-bank rate of 0.9%” (TR Emeritus Editorial, Aug 19).

Investment loss $10.5 m?

Investment and interest income loss in FY2008/2009 was $10.5 million. What was this due to?

Need to increase S & CC now?

On the town council’s web site, there is a link to “Why the council’s costs keep going up”, which says that “the cost of maintaining amenities increased 20% in the last eight years” and “It cost an average of $5.80 per flat in 2004. Under current three-year contracts, cleaning cost $7 per flat”

The above may be of little meaning, without telling us how much their revenue or Government grants may have increased too.

Acumulated surplus $2.3 m

Deficit for the financial year was 0.67 million. However, with an accumulated surplus of $2.3 million, is there an urgent need to increase S & CC now?

How transfer to sinking fund determined?

It would appear that the deficit may be due to some extent to the $4.1 million transfer to sinking funds from the Government grants of $9.6 million. In contrast, in the previous year FY2009/2010, the transfer to sinking funds was much lower at $2 million, resulting in a surplus for the fiscal year of $2 million.

How is the quantum of this transfer to sinking fund determined, as it is separate from the Conservancy and Service Fees operating transfer to sinking funds (minimum required by law)?

Was last year’s deficit due to tranferring more to the sinking fund than the minimum required by law?

$16 m over how many years?

For what period does the positive net investment return of over $16 million or average 2.9% represent? – 1, 3, 5 years or from the town council’s inception in 2001?

Benchmark against inter-bank rates?

Are there any funds in the world which benchmark their returns against inter-bank rates of about 0.9%?

Finally why did its total funds fall from $84 million to $80 million, from 2010 to 2011?

 

Leong Sze Hian

About the Author

Leong
Leong Sze Hian has served as the president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), Hotel Mumbai (associate producer), invited to speak more than 200 times in about 40 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of 2 countries. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.