Osmeña firm on stand not to use SRP funds for city’s infra projects

CEBU City Mayor Tomas Osmeña is standing pat on his decision not to use P9.8 billion of the city’s funds received from giant developers, Ayala Land, Cebu Holdings Inc., SM Prime Holdings, and Filinvest Land Inc. as down payment for the purchase of a 45.2-hectare property at the South Road Properties (SRP).

The mayor’s stand is backed by a letter-opinion issued by the Office of the City Accountant.

The opinion cites that more prudence should be exercised in handling the proceeds of the SRP lot considering that its sale is now the subject of protest.

Osmeña had planned to rescind the sale of the SRP lots which were sold in 2015 under a Deed of Sale on Installment during the incumbency of former mayor Michael Rama.

According to the contract, the remaining half of the total price will be paid in equal annual installments until the year 2018.

But city accountants believe that the money paid cannot be used until the property is fully paid and the title is transferred to its buyers.

“The signing, executing and delivery of the Deeds of the Absolute Sale is the operative act that would completely vest to the parties their respective rights, titles and interest in the contract,” a portion of the letter-opinion read.

As of now, the mayor said, the city will continuously work on the revocation of the sale of the lots and pursue efforts to get back the 45.2-hectare property.

The city is then obligated to return the payments made by the buyers.

“First, the transaction is illegal and by using the funds it is found illegal. We will all get a disallowance for using the funds of a transaction that is illegal,” he said.

Osmeña said he intends to demonstrate that the city will survive even without the 45.2-hectare SRP sale.

“Let us leave something for the youth,” he said.

The use of SRP lot proceeds was raised by members of the opposition after Osmeña announced last week that he was inclined to accept a P3-billion loan offer from the Land Bank of the Philippines to fund the city’s infrastructure projects such as roads and drainage.

According to Councilors Joel Garganera, Jocelyn Pesquera, Raymond Alvin Garcia and Eduardo Rama Jr., there was no need for the city to borrow money because the city had funds from the proceeds of the 45.2-hectare SRP sale.