Cebu City 2015 budget SRP lots as fund sources lacks council backing

CEBU, Philippines - The inclusion of the sale of three parcels of land at the South Road Properties as fund source for the 2015 annual budget may not be feasible as it lacks authority from the Cebu City Council.

City Councilor Margarita Osmeña said that while the City Council authorized Mayor Michael Rama last August 13 to negotiate and dispose of 45.2 hectares of land at the SRP by sale through public bidding, the authority did not include 15.5 hectares of SRP lot worth around P3.21 billion and another three- hectare North Reclamation Area lot amounting to P1 billion that were identified as annual budget fund source.

The August 13 authorization only includes Lot No. 8 (located near the Calungsod templete) with a total land area of 26 hectares; and consolidated lots No. 7 and No. 17 (located beside SM Seaside) consisting of 19.2 hectares.

Based on a conservative projected revenue computed at P20,000 per square meter, the sale of Lot No. 8 is pegged at P5.3 billion and P3.8 billion for the consolidated lots.

The City Council has started the marathon budget hearing for the city’s biggest proposed annual budget at P18.9 billion, tackling yesterday the fund sources.

“We can’t recognize these properties (as fund sources) because there is yet no authorization from the council to sell them,” Osmeña said.

City Treasurer Diwa Cuevas contended that the properties can still be considered as fund sources as they are identified s government “assets.”

Cuevas cited Section 306 of the Local Government Code of 1991 that provides that “funds also include other assets convertible to cash such as receivables from real property taxes.”

Also, SRP Management Office Chief Roberto “Bu” Varquez explained that they included SRP lots because there were already interested buyers and lessees, such as SM Prime Holdings Inc, Robinsons Land Corporation, among others.

“Selling and developing the 60-hectare of land would not just generate income but the city will also earn more fees and real estate property taxes, and generate 80,000 jobs that has been the objective of the SRP,” he said.

With a total area of 300 hectares, the SRP is the biggest asset of the Cebu City government. Of the 300 hectares, 90 hectares are already sold to SM Prime Holdings Inc., Bigfoot Entertainment, and Filinvest Land Incorporated, while five hectares was donated for a University of the Philippines-SRP campus.

Varquez further said the city would be earning at least P50 million from joint venture agreements with Total (Philippines) Corporation; Bright Academy and Play House Children’s Center; a proposed P1.41-billion Japanese retirement facility; and Damac Properties Company, which want to develop a 10-hectare land in Kawit Island, among others.

Other identified annual budget fund sources are projected tax revenue (P2.6 billion), non-tax revenue (P770 million), sale of government lots (P10.8 billion), auction sale of real properties and share from joint venture and other activities (P50 million each), Internal Revenue Allotment (P1.4 billion) as recommended by the Department of Budget and Management, SRP loan conversion amounting to P3.1 billion, among others.

The next budget hearing is scheduled Thursday, with City Administrator Dr. Lucelle Mercado asked to defend the P17.2 million budget and allocations under the Office of the Mayor (P349.6 millon), all offices under the office of the mayor (P2.8 billion) and for the non-office expenses (P1.3 billion). (FREEMAN)