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THE two municipal councils' takeover of the 15-year-old Music Office may run into cost problems.

  The Government wants the transfer to be done without changing the civil servant status of its more than 130 staff.

  But Urban Council member Frederick Fung Kin-kee said yesterday: ''It will be costly to maintain staff salaries on the civil service pay scale and to take care of their pension payment after retirement.

  ''It will probably expand the first tri-annum [1994-97] budget prepared by us from $80 million to $110 million.''   Mr Fung, a legislator, questioned the need to maintain the civil servant status when the original aim of the transfer was to improve the flexibility of the organisation.

  ''The civil servant system will pose difficulties for us when we want to hire new musical officers.

  ''The arts personnel should be replaced from time to time. But the civil servant status is not flexible enough,'' said Mr Fung, adding that it would be better to recruit staff on a contract basis.

  Of the 130 staff, around 63 are under the music officer grade with salaries ranging from $12,315 to $59,965 a month.

  They are professional staff, such as conductors, bandmasters of orchestras or tutors.

  Deputy Secretary for Recreation and Culture, Rachel Cartland, told the councillors yesterday that the two councils were the best choice for the takeover among several options, including takeover by the Academy for Performing Arts or the Tung Wah Group of Hospitals.

 The Government has proposed making the office a privately-run organisation since last year. The office costs the Government $52 million a year.



Note of discord looms on takeover