ALJUNIED RESIDENT CONCERNED WITH MND’S PUNITIVE WITHHOLDING OF GRANTS

AHPETC missed 2 Sinking Fund payments

According to the Straits Times news report “Workers’ Party-run town council has enough funds till June and missed two Sinking Fund payments: MND” (May 4) – “The ministry, in a letter dated April 28 last year, told the town council that it was considering withholding its grant, which would have amounted to $7 million.”

Aljunied residents’ concerns

As a resident of Aljunied – I am curious.

Withholding grants?

Does this mean that the AHPETC’s cashflow problems started because of the Ministry’s withholding of the grants in the first place – even whilst the process of the audit team was on-going and not completed yet?

Isn’t this kind of like punishing you even before the audit is complete – to the detriment of the residents?

As to “Despite asking for a response by May 14 the same year, the town council replied only on June 16 saying that “the continued withholding of grants is likely to critically and adversely affect the town council’s cash flow position” resulting in an inability to pay contractors and affect essential services.

It then asked the ministry to “appreciate the consequences” and called on the ministry “to disburse, without further delay, the grants”.

It also said that it was unable to transfer a sum exceeding $4 million into the Sinking Fund by July 31 as the money was needed to pay for essential services.

The ministry expressed its surprise over the town council’s cash flow position, and offered to disburse half the grants.

But this would be subject to the town council explaining a $8.4 million decrease in its accounts within 16 months, and ensuring that all necessary transfers are made to the sinking fund for the financial year, among other conditions.

“But AHPETC replied that it will reply should we wish to take the option of the half grant,” Ms Kam said. “There was a change of tune here.”” – Isn’t this akin to – in effect not giving the grants which AHPETC is entitled to – because it was subject to so many conditions, some of which may deplete or worsen its cashflow position?

Transfer of accumulated surplus to Sinking Fund

Isn’t the fact that the legislation that when a town council is won by a different party in an election – 100 per cent of the accumulated surplus has to be transferred to the sinking fund – the root cause of AHPETC’s cashflow problem?

“Ms Kam also disclosed that on March 27 this year, at a closed-door court hearing, Ms Lim indicated that the town council had sufficient funds for “the next three months” – that is, until June 2015.

But Ms Kam noted that in a April 17 affidavit filed by Ms Lim, the sufficiency of funds was “premised on them not making sinking fund transfers”.”

Win battles lose war