TOWN COUNCILS' FUNDS

TOWN COUNCILS' FUNDS

5.

Ms Ellen Lee asked the Minister for National Development where Town Councils have surpluses or savings in any given financial year, whether these Town Councils can pass on these savings by reducing the monthly conservancy charges imposed on the residents for the next financial year instead of excessively building up their funds.

Mr Mah Bow Tan: The main income sources of Town Councils are Service and Conservancy Charges (S&CC) collected from residents and Grants from the Government.

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Under the Town Councils Act, Town Councils are required to set aside 30% to 35% of the S&CC collections and Government Grants into a sinking fund for major cyclical works like repainting, re-roofing, rewiring, replacement of lifts, etc. The balance of the funds is used for routine operating expenditure to maintain the town. These include repairs of lifts and other common property, cleaning services, horticulture services, utilities charges and town management fees.

Town Councils are free to set their own S&CC rates. However, they should consider both short-term and long-term needs when planning and managing their finances. It is not prudent for a Town Council to adjust its S&CC rates based solely on the operating results of a particular financial year.