REVISION OF S&CC
Why is there a need to increase the S&CC?
Is the need for an increase in S&CC because the Town Council suffered losses by investing in failed Lehman-link structured products?
Why is there a need to build up the sinking fund?
It is observed that the Town Council has been consistently achieving healthy surpluses. Is there a real need to increase the S&CC at this juncture?
How are the various rates of increase for each property type determined?
How are the different charges for every Town Council determined?
Please elaborate on your proposed cost-saving measures carried out by Town Council.
For residents who have difficulty settling current charges, has the Town Council implemented any additional assistance schemes when the new charges are in effect?
Will the residents ultimately benefit from the Town Council with the increase? How?


1)    Why is there a need to increase the S&CC?

The S&CC was last revised five years ago in January 2005. Several of the Town Council’s operating expenses have increased significantly. To have more lifts to serve the residents better and to provide lifts to stop at every floor, Jurong Town Council need to set aside $115m, over a span of 10 years, as co-payment towards the Lift Upgrading Programme (LUP). The other items which have increased substantially are:

Electricity tariffs
Electricity tariffs have increased by 38.4% (It costs 16.53 cents per kWH in October 2004 and 22.87 in January 2010).  This increase impacts the Town Council greatly as utility bills, of which electricity forms the bulk, account for 30% of the overall operating cost. Electricity consumption is also forecasted to increase with the installation of more lifts, linkways and amenities within the town.

Lift maintenance
Lift maintenance costs have also increased substantially over the years with the upgrading of existing lifts as well as addition of new lifts that stop on every floor. It costs $100 per month to service a 12 storey building that only stops on 3 of the 12 storeys. Once upgraded to serve every floor, servicing the same lift will cost $208. Since 2005, the number of lifts has grown from 1002 to 1139 and will increase further to 1575 when the LUP is completed.

Cleaning costs
Cleaning costs, which makes up 15% of the town council’s annual expenditure, have increased by 10%. Cleaning costs is also forecasted to increase due to higher manpower cost and demands on cleaning standards.

The increase of S&CC ensures that:
a)    There is sufficient fund to maintain the estate in view of the increase in operating expenses and;
b)    To ensure that the building elements are well taken care of over the long term, we need to build up the Sinking Funds for the future anticipated major expenditures.


2)    Is the need for an increase in S&CC because the Town Council suffered losses by investing in failed Lehman-link structured products?

The Town Council did not invest in any of the then troubled financial products. In fact, the Town Council’s investments have been generating returns of 2.57% per annum over the last 5 years.


3)    Why is there a need to build up the sinking fund?

The Lift Upgrading Programme, which benefits our residents by providing direct access to every floor, is a costly project to implement. While the government is paying for the bulk of the costs, the Town Council is also required to set aside a sum of $115m as co-payment for this project.

The funding the LUP will use up a significant portion of the sinking fund. As such, there is a need for us to build up the sinking funds to pay for other essential works such as the re-painting and re-roofing of the flats, and the replacement of lifts and water supply systems which are all very costly projects to implement. Such works are important as they enable us to maintain the estates and buildings in good condition. If the estate is not well kept, this will affect the value of the apartment you own.


4)    It is observed that the Town Council has been consistently achieving healthy surpluses. Is there a real need to increase the S&CC at this juncture?

Without government operating grants, the Town Council would be in operating deficit.  After taking into consideration government grants, the Town Council manages to achieve some surplus.  These operating surplus will also be channeled into the Sinking Funds, as required by regulation, and the mandatory payment of the Town Council’s share of the lift upgrading programme.

Lift upgrading is a useful programme which not only facilitates mobility, but also enhances the value of HDB flats, which is something unique to Singapore. However, this programme does not come cheap as the Town Council has to set aside 115m as co-payment.


5)    How are the various rates of increase for each property type determined?

The increase was based on the consideration of the following factors:
a)    The existing S&CC rates of the properties.
b)    The projected financial position (both operating & sinking funds) of the types of properties. Eg: Residential, commercial & Market/Hawker Stalls.


6)    How are the different charges for every Town Council determined?

The age and profile of the properties, the amount of grants received from the government, and the facilities of the estates are all different for the different Town Councils. Each Town Council determines its own rates of S&CC based on its needs and financial position.


7)    Please elaborate on your proposed cost-saving measures carried out by Town Council.

Some of the cost saving measures carried out by Town Council includes Energy saving devices, re-lamping exercises, calling tenders for liberation of electricity supply, etc

In fact, Jurong Town Council will be embarking on a major project to replace the current T5 common corridor lights with LED over the next 5 years. We expect to save $800,000.


8)    For residents who have difficulty settling current charges, has the Town Council implemented any additional assistance schemes when the new charges are in effect?

The Town Council will work out installment plans to needy residents or refer hardship cases to the CDC and other social service agencies for financial assistance on a case-by-case basis.


9)    Will the residents ultimately benefit from the Town Council with the increase? How?

The increase of S&CC will ensure that:
a)    The standard of maintenance will not suffer as there is no need for the Town Council to ‘cut corners’ due to insufficient funds.
b)    There will be sufficient sinking funds available for future cyclical maintenance to be carried out promptly.