CEBU City officials promised to immediately use SM Prime Holdings Inc.’s P677-million down payment on barangay projects, but they will have to wait a few more months before they can spend the money.

City Treasurer Ofelia Oliva said yesterday SM Prime’s payment for the South Road Properties (SRP) lot was included in the P787-million expected income from the sale of government land, which forms part of the fund sources for the P2.9-billion budget this year.

This means it cannot be called surplus funds and cannot be identified as fund sources for the supplemental budget (SB) until City Hall exceeds its targeted income for the sale of government land.

Among the projects to be delayed are the repair works of the rubberized track of the Cebu City Sports Center, the expansion of St. Anthony Mother and Child Clinic and

infrastructure projects for the barangays, which the mayor said he will fund using SM’s payment.

Councilor Jose Daluz, chairman of the City Council committee on budget and finance, only learned of the limitation last Friday during a briefing with the city treasurer and city budget officer.

He said the soonest that the City can tap the funds would be in the second quarter of this year, when the City shall have collected a total of P1 billion, or some P200 million in excess of what it expected to collect from the sale of land.

For now, he said, the City can only fund SB No. 2 through the retained operating surplus for 2009, which is estimated to amount to some P400 million.

“We have already informed the mayor that we can’t use SM’s down payment yet because the P677 million is part of the collection for 2010. We thought we can use it but according to the Commission on Audit, it’s still not realized income so there is no surplus yet. It means we cannot use that money,” Daluz told Sun.Star Cebu.

Payments

The City received P677.4 million from SM Prime last Jan. 15 as down payment for a 30-hectare SRP lot.

Next month, the City will receive Filinvest Land Inc.’s (FLI) second installment for the 10.6-hectare Pond F that it bought last year, amounting to P269.5 million.

By March 14, SM Prime will make its first quarterly payment of P110 million, which shall earn for the City a total of P1.05 billion for the sale of government land for this year.

“After the first quarterly payment of SM in March, we will already have surplus funds and we can start using it for our projects for the barangays,” said Daluz.

In a phone interview yesterday, Oliva said the City can use the retained operating surplus for 2009 for its supplemental budgets while they are waiting for surplus income to come in.

She expects the surplus to exceed P400 million, which can be tapped for the next supplemental budget.

The surplus has been identified as fund sources for the P25-million Election Reserve Fund, this year’s first SB.

SB 2, on the other hand, will be funded by the unappropriated balance of the 2010 General Fund.

Items in the P255-million SB 2 include cash assistance to senior citizens (P78 million), burial assistance (P6 million), medical assistance (P30 million), and the mandated salary increase for city employees and officials (P98 million). (LCR)