The changes proposed to the Town Councils Act this week are the most significant since the law came into being in 1988.

There are 12 amendments, but one proposal, perhaps, leads the list - the move to give the Ministry of National Development (MND) the much-needed teeth to obtain information on finances or relevant documents from town councils.

Those who fail to do so will face penalties similar to those in the Charities Act.

The ministry did not give details, but the Charities Act says those who fail to submit reports on time face a maximum fine of $5,000, and a fine of up to $50 for each day the offence continues.

The change would strengthen the ministry's hand in ensuring the financial records of town councils are in order. This is important as town councils' revenues are largely from the service and conservancy charges paid by Housing Board estates' residents. Also, the government grants they receive are public monies.

The proposed reforms, which were put out for public feedback on Tuesday, can be grouped in four broad categories. These are: clarify the roles and functions of town councils; improve governance; strengthen the way they manage their finances; and enhance the ministry's regulatory oversight.

For instance, to beef up town councils' financial management, they will have to set up a fund solely for replacing lifts. It will ensure they have enough in the long run to sustain this critical feature in residents' daily lives, as well as make clear that such work is their responsibility, as is the case in private estates.

MND said the proposals strike a balance between making sure public services are delivered to residents and retaining the autonomous nature of these institutions. Some observers, however, hope the public feedback would lead to tweaks, like ensuring the smooth handover of town council data after elections.

Even as the proposed changes are set for a robust debate in Parliament next year, the outcome is indisputable: the new Act will ensure town councils run HDB estates for the greater benefit of residents.

Rachel Au-Yong