Town councils to set aside 14% of income for lift fund

All town councils must set aside a minimum of 14 per cent of their income in a dedicated Lift Replacement Fund from April 1.
All town councils must set aside a minimum of 14 per cent of their income in a dedicated Lift Replacement Fund from April 1.ST PHOTO: SEAH KWANG PENG

MND will offer more grants to help with costs as new requirement is put in place

From April 1, all town councils must set aside a minimum of 14 per cent of their income in a dedicated Lift Replacement Fund, the Ministry of National Development (MND) said yesterday.

This is on top of existing sinking fund contributions, but town councils will also get more MND grants to help with costs.

The new Lift Replacement Fund requirement was announced last September as part of efforts to improve Housing Board lift performance and reliability. But the specific proportion that town councils have to put into the fund was revealed only yesterday.

To help town councils with the new requirement, MND will increase the operating grants it gives and allocate additional grants to match part of town councils' contributions to the new fund. Details of these will be released separately.

Town councils have two main sources of income: Service and conservancy charges (S&CC) and an annual operating grant from MND, which accounts for about 15 per cent of total annual income.

Most of these go into a town council's operating fund for short- term routine expenses such as estate cleaning. But town councils must also set aside at least 26 per cent of S&CC collections and government grants in their sinking funds. This is for long-term replacement works and major repairs.

The new requirement announced yesterday means that each town council will have to set aside several million dollars.

Ang Mo Kio Town Council, for instance, would have to set aside more than $11 million, based on how much it collected for the financial year that ended March 31.

The smaller East Coast-Fengshan Town Council would have to set aside about $4.5 million.

Explaining the need to set more funds aside, MND said: "As our HDB estate infrastructure gets older, more expenditure will be needed for the maintenance and replacement of these infrastructure assets. Town councils must therefore plan ahead and contribute more to their sinking funds to pay for these major expenses."

As another example of how town councils are getting help to cope with long-term expenditures, MND pointed to HDB's $450 million Lift Enhancement Programme. Announced last September, this co- funds town councils' costs of retrofitting older lifts with safety features and enhancements.

Dr Teo Ho Pin, coordinating chairman for the 15 town councils run by the People's Action Party (PAP), said the town councils support the Lift Replacement Fund move, and "welcome any additional grants" from the Government.

Asked if PAP town councils were looking at raising S&CC, Dr Teo said: "We are studying the revision of S&CC in view of the new requirements and rising maintenance cost."

Mr Pritam Singh, chairman of Workers' Party-run Aljunied-Hougang Town Council, said his town council "will wait for more information from HDB before commenting".

Lift safety has made headlines after a spate of accidents. In one incident, the lift door at a Tah Ching Road HDB block closed on a woman in October 2015, severing her hand.

A version of this article appeared in the print edition of The Straits Times on January 24, 2017, with the headline 'Town councils to set aside 14% of income for lift fund'. Print Edition | Subscribe