Sembawang Town Council has just released its Annual Report and the audited financial statements for the FY 2008/09. It was an eventful year.
We not only witnessed the completion of various upgrading and improvement projects targeted at improving the living environment for our residents, but also launched initiatives aimed at addressing the sustainable maintenance of our Town in the long term.
Improving on our service to residents has always been the key priority of our Town Council. Towards this end we have for instance, set up our Call Centre and streamlined our processes to offer our residents a simple and no-fuss way to channel feedback for more expeditious action.
In FY2008/09, we witnessed the global financial crisis which resulted in one of the world’s worst economic recession. Many countries and institutions were affected and our Town Council was not immune to the negative effect of the financial crisis.
In its wake, many people ask whether Town Councils should simply place all their sinking funds in fixed deposits, rather than investing part of the funds in bonds or other financial instruments.
Personally, I think we should take a total approach in safeguarding our Town Council’s funds. Take Sembawang Town Council as an example. With a prudent and balanced approach, we had made a total return of S$61 million from the investment of our funds in the past 6 ½ years from FY2003/04 to 30 September 2009, despite the financial crisis experienced in FY2008/09. This is a return of 4.3% per annum.
If, on the other hand, our Town Council were to place all our funds in fixed deposits, we would have made only S$13 million over the same period, based on the average fixed deposit of 0.9% per annum over the same period.
This is a difference of S$48 million, which is equivalent to 67% of our one year’s total collection of $72 million from service and conservancy charges (s&cc). Put it in another way, if we were to match this return of S$48 million (form our investments), Town Council would need to increase our s&cc rates by an average of 10% over the period starting from FY2003/04. But thanks to our prudent and balanced approach, we are able to keep our s&cc rates at an affordable level while ensuring that long term and expensive cyclical works, such as replacement of lifts and water supply systems, repainting, re-roofing and electrical rewiring works, can be carried out smoothly.
In a nutshell, we need to take a total and long term approach to safeguard our Town Council’s funds for the benefit of our residents.
