The Seberang Perai Municipal Council (MPSP) continues to climb to a healthier financial position after wasting lots of money on mainland Penang pre-2008.
Some basic data about MPSP:
Staff: 1,817 people
Rateable properties: 278,000
Total budget: RM177 million (compared to Penang Island’s more than RM200 million)
73 per cent comes from tax collection (assessment, etc)
Council members: 24
Surplus for the last three years:
- 2007 – RM3m
- 2008 – RM14m
- 2010 – RM20m (expected)
- 2007 – RM18m
- 2010 – RM83m
- 2015 – RM171m (targeted)
The council has also been shortlisted to be among the four finalists for the Financial Innovation Award 2010 organised by the Treasury out of 24 local authorities that participated. Not bad for a council that nearly went bust a few years ago.
Its main focus areas for now are:
- revitalisation of urban centres
- education and enforcement
- strengthening of the organisation and work processes
MPSP, through its rep, has also expressed openness in looking at gender-responsive budgeting in addition to performance management.
While congratulating the MPSP on its improved financial standing, I would like to caution the MPSP and MPPP that they should not just focus on increasing its ‘profitability’ and reserves: funds have to be spent on social infrastructure such as creating parks and recreational areas, public amenities and community welfare.
For example, the mainland has few open green spaces left and if the MPSP has some unused land – and it does have the old council premises in Butterworth town centre, which it has put up for sale or rent – there are two things it can do:
- it can sell the land (to developers or speculators) or rent the land and make a huge surplus, OR
- it can turn the the property into a public park with recreational facilities (a gym and aerobics centre in the old building, perhaps). This option would lead to less impressive financial results but the facilities would meet an important social need.
That’s just an example. There are so many other essential services that a local council could provide to the public.
A council therefore should not be motivated by the bottom line but should ensure that revenue is collected efficiently and compassionately (i.e without being oppressive) and put to the best use for the community.
One bright note is that the MPSP plans to put up its Balance Sheet and Income and Expenditure Account (minus the Notes to the Accounts) and Annual Budget on its website from mid-2011 onwards. Apparently, this will make it the first council in Malaysia to do so! (I asked an MPSP rep why the Notes to the Accounts should be omitted and was told there were just too many pages. Not an acceptable reason, in my view.)
Local councils should know that corporations are required to disclose their Annual Reports (which include the Notes to the Accounts) to the Bursa and the Companies Commission of Malaysia. Now if a corporation is compelled to disclose their financial statements to the public, it is all the more important for local councils to be similarly transparent and accountable to the public (who contribute to council revenue through rates/assessment payments) by placing their full financial statements on their respective websites.