A bank loan worth more than half a billion pesos may be in the offing for Cebu City should local officials wish to fund most of its identified projects under its P1.147-billion second supplemental budget.
Cebu City Treasurer Tessie Camarillo said the city is short of P674 million after their office identified only P473 million in unused funds from previous years.
Her disclosure and recommendation didn’t sit well with the Cebu City Council.
“Where would we source the P1.1 billion? I want to know if we can afford it because Mayor Michael Rama is proposing a big budget,” said Vice Mayor Joy Augustus Young.
Young said while Rep. Tomas Osmeña of Cebu City’s south district left the city over P1 billion in surplus funds after his term as mayor, part of the amount was placed on time deposit by former city treasurer Ofelia Oliva.
Councilor Margot Osmeña, chairperson of the council’s budget committee, said she wants to clarify the urgency of items proposed under the supplemental budget.
These include over P600-million worth of infrastructure projects and nearly P100 million in salaries.
‘Poor management’
Over P3 billion in revenues, which the City Treasurer’s Office (CTO) collected so far, have been appropriated to fund the city’s P4.5-billion annual budget.
Camarillo said available cash includes the P331.64 million in retained operating surplus last year.
Other sources include the P52.36 million in reversions of accounts payable from the General Fund, the P36.48 million in transfers from the city’s trust funds.
Camarillo said P52.66 million in realigned funds from 2008-2010 appropriations is another source.
Young said any plan of opening a credit line with a depository bank to fund the supplementary budget is an indication of “poor fiscal management” by the Rama administration.
Still, Young admitted that he and the rest of the councilors are also as guilty because they are part of the administration.
The vice mayor said Rama should have included other urgent appropriations in the supplemental budget.
Skin and bones
Such appropriations include the city’s payment to the Rallos property and the P50-million down payment for 93-1 lots occupied by the city’s urban poor residents.
Young said Rama’s proposed supplemental budget is a sharp departure from the “skin and bones” budget implemented by former mayor Osmeña during his tenure.
He said the budget only included funding for basic expenses like fuel, power, supplies and salaries.
Additional expenses are included in the supplemental budgets passed during the year.
In contrast, Young said Rama pushed a full budget of P4.5 billion for 2011.
“But they were not ready for it. They were not even ready to defend all the project included in it but we allowed it anyway,” Young said.
City Administrator Jose Marie Poblete said plans of opening a credit line doesn’t necessarily lead to a bank loan.
Available source
He said the city government only wanted to have a possible fund source ready.
But if other fund sources are made available, Poblete said there may no longer be a need to draw cash from a bank loan.
“But it’s not just a matter of drawing money (from a bank loan). What if we spend for another? We are just trying to find an easy, available source of funding,” said Young.
Instead of opening a credit line, Young said the CTO should instead review the city’s finances and identify unused funds.
“The city has money, it’s just not properly managed,” the vice mayor said.
Young called for a meeting with councilors in his City Hall office last Monday afternoon for a rundown of the second supplemental budget.
“I don’t want to delay the discussions due to the long holiday next week since the budget included salaries,” he said.
Bloated targets
Young said the supplemental budget will be referred to the budget committee for review to pave the way for next week’s budget hearing.
He said he invited Camarillo to meet councilors this afternoon for a briefing on the city’s financial standing.
Councilor Osmeña questioned the P1.147-billion supplementary budget, saying the city has yet to consume its 2011 P4.5-billion budget.
Young said he wanted to verify reports that former city treasurer Ofelia Oliva “bloated” tax collection targets for this year, the reason why the city came up with a P4.5-billion budget.
He said Oliva gave the Cebu City Integrated Traffic Operations Management (Citom) a P100-million target when it only collected P60 million last year.
Young said he heard reports that the city may resort to disposal of its properties should it fail to hit revenue targets.
Even with available cash, Young said the city government won’t have time to bid out all projects and purchases under the supplementary budget.
Subsidy
Young explained that bidding and the delivery of goods take about two months to complete and the city’s finance department is busy preparing next year’s budget.
“So what is the point of passing supplementary budget No. 2 when it is now September?” he said.
The vice mayor said majority of the purchases and projects identified in the supplementary budget should be reserved in the 2012 budget.
But Young said he wanted to pass the supplementary budget since it included the salaries of the employees.
For one, Citom chief Rafael Yap asked for P49 million after their subsidy was reduced to P20 million resulting in the delays of the salaries of their personnel.
Earlier Rep. Osmeña chided Rama on the delays of the salaries of City Hall employees.
He said the delays in the salaries was one of the reasons why he couldn’t help criticize the mayor on the way he was running the city government.
“People are criticizing me and asking me to keep quiet and stop criticizing Rama since I’m no longer mayor. Why? When I left City Hall, I left behind more than a billion pesos in the bank and can I just keep quiet when I could see that it’s not being spent well?” he said.