PURPOSE

To inform Members of the new management model to be applied to the six estates sold under the Tenants Purchase Scheme (TPS).

BACKGROUND

2. TPS was launched in January 1998, and six Housing Authority (HA) public rental estates were selected for phase 1 of TPS.

3. Upon signing the Deeds of Assignment for the first batch of sold flats in April 1998, the six TPS estates will become very much like private estates. As provided under the Deed of Mutual Covenant (DMC) of these estates, HA will serve as the property manager for an initial period of two years. Thereafter, the appointment of the manager is for the owners to decide.

4. The new management model is developed on the assumption that most of the affected tenants would buy.

FEATURES OF THE NEW MANAGEMENT MODEL

The Property Management Unit (PMU)

5. The six TPS estates will become leasehold estates after April 1998 with HA holding a government lease. The residential portion and flats put to sale will be owned by both HA and the individual flat owners holding the respective undivided shares. Control and management of the common parts of the land and buildings within the residential portion will be subject to the provisions of the DMC and the Building Management Ordinance (BMO).

6. Against this background, the management of TPS estates under the new model will be carried out by two different units, i.e. the Property Management Unit (PMU) and the Tenancy Management Unit (TMU). The PMU will be modeled on PMAs?operation and staffing with costs being met by management fees. This PMU will be initially directly responsible to the Owners Committee (See paragraph 12), and subsequently to the Owners Corporation (OC). Its main task is property management, which includes such duties as the enforcement of DMC, cleansing, security, day-to-day repairs and maintenance, supervision of service contractors, control of traffic and hawkers, collection of management fees, daily patrol, etc.

7. HA procedures will be revamped in order to enable the new PMU to discharge its duties in a more business-like and responsive manner and to help reduce HA headquarters administrative overheads. This Unit will be given greater flexibility in pre-qualifying its service contractors, have its own dedicated service contracts and above all the power to hire and fire its contractors.

The Technical Unit (TU)

8. On par with the practice of the private sector and PMAs, a small dedicated Technical Unit (TU) comprising several building works and building services staff members will back up the PMU in the day-to-day repairs and minor maintenance. They will constantly station on estate to provide a prompt and efficient technical support. As and when required, major repairs and improvement works will be dealt with as consultancy service by our Regional Offices where professional maintenance expertise is available. The PMU will be charged on a fee and/or time charge basis for the service rendered.

The Tenancy Management Unit (TMU)

9. The residual functions relating to tenancy control and enforcement for the public housing tenants remaining on the TPS estates will be entrusted to a new Tenancy Management Unit (TMU) with costs being chargeable to HA's accounts. Correspondingly, this Unit will be set up with a proportion of the original management staff strength (excluding staff provided for non-domestic/commercial premises, carparks, etc.) to deal with tenancy matters such as the enforcement of HA policies like Housing Subsidy Policy, Rent Assistance Scheme, the administration of overcrowding relief, splitting of tenancies, rent chasing, etc. Buy-back and resale of TPS flats would also be taken up by the same Unit.

STAFFING STRUCTURE UNDER THE NEW MANAGEMENT MODEL

10. The management teams under the new management model are very competitive with a thin and lean multi-disciplinary structure. To reflect this business-like mode of operation where, like their counterpart in the private sector, all PMU and TU staff members are multi-tasked, the management posts will be retitled as follows (There will be no change to their salaries and terms of employment) -

Rank in Department	Proposed Post Titles
PMU
Housing Manager	Area Manager
Assistant Housing Manager	Assistant Area Manager
Housing Officer	Estate Officer
Contract General Clerical Officer	Clerk
Customer Service Assistant	Customer Service Assistant
Chief Estate Assistant	)Building Supervisor
Senior Estate Assistant	)
Estate Assistant	Assistant Building Supervisor
Artisan	Technician
TU
Assistant Clerk of Work	Maintenance Officer
Work Supervisor I/II(BW)	Assistant Maintenance Officer
Assistant Building Services Inspector	Maintenance Officer
Work Supervisor I/II(BS)	Assistant Maintenance Officer

11. In view of the good response to TPS Phase 1, the residual public functions to be carried out by the TMU staff such as minor repairs inside tenanted flats, rent arrears, overcrowding relief and annual inspection etc., would be significantly reduced. The staffing position for the TMU will be reviewed later in the light of experience.

FORMATION OF OWNERS CORPORATIONS

12. The TPS flat owners will be encouraged to take over the management of their own property through the formation of OCs within a year after the signing of the first DMC. In the absence of the OC, it is necessary to establish an Owners Committee to look after the management of the estate as stipulated in the DMC.

13. The existing (EMACs) will be transformed to the first Owners Committees. This can be done by assisting EMAC members who have become owners to elect among themselves at the first owners meeting to take up key offices in the transformed body that may be called the state Management Owners Committee?(EMOC). Other EMAC members who remain as tenants may continue to attend the EMOC meetings to represent tenants?interest but without the right to vote.

14. The functions of the EMOC are to follow those governing the Owners Committee in the DMC. HA's capacity as the landlord of the tenanted flats will be represented by a staff member not belonging to the PMU to avoid conflicts and embarrassments caused by the other role as property manager.

15. Upon their formation, the EMOCs will be responsible for controlling funds budgeted for the management and maintenance of the estates and, after incorporation, the control of the Maintenance Fund contributed by HA.

16. To allow for unfettered participation by owner-occupiers, HA, in its capacity as owner, will not take up any role as key office-bearers in the EMOC. The PMU will provide secretarial support to EMOC and serve as a facilitator in the running of its business whilst the existing EMAC staff who have sound community networking skills will be retained at HA's cost for 12 months to render support in the transformation of EMAC to EMOC and its eventual incorporation as OC.

STAFFING IMPLICATIONS

17. The success of TPS and the reengineering consequence of the new management model will inevitably generate staff surplus. The Housing Department (HD) is now exploring the long term solution and is looking for new areas of works for absorbing the surplus staff.

STAFF RESPONSE

18. Consultation meetings were held on 4 and 26 March 1998 between HD and the "League of Housing Department Staff Associations" A clear conception of how things would be arranged under the new management model was provided and the drivers of change were explained to the representatives of the 29 staff associations. They did not oppose to the new model, albeit not without concern on staff redeployment and the long term prospect of their career that the HD undertook to address.

IMPLEMENTATION

19. The new management model and staffing arrangements will be implemented progressively on the six TPS estates with effect from 1 April 1998.


(c:/lydia/HOC23-98)