Osmeña’s advice: ‘Just obey COA’
“JUST obey COA.”
So said former Cebu City mayor Tomas Osmeña when asked about Cebu City Mayor Michael Rama’s decision to review the joint venture agreement (JVA) with Tokogawa Global Corp. (TGC), the City’s pay parking service provider.
On a City Hall-run radio program on Tuesday, Oct. 24, 2023, Rama instructed City Administrator Collin Rosell to either review the JVA with TGC or seek a new contractor to manage the City’s pay parking system. This action followed a COA report that identified deficiencies in the 2018 JVA between the City and the private firm.
Osmeña clarified that his opinion is not an endorsement of Rama’s decision.
“No. The hell with Rama,” he said in a text message to SunStar Cebu on Friday, Oct. 27.
The City’s Information Office, in a statement, said that during Osmeña’s tenure, the City initiated a JVA with TGC to address issues of insufficient parking management services and illegal parking causing daily traffic congestion. The initial “unincorporated” JVA with TGC was established in November 2018 for a three-year term.
When the agreement expired in December 2021, it was renewed on Feb. 8, 2022, for a five-year term. The agreement will expire in 2026.
COA report
The COA, in its December 2022 Annual Audit Report, flagged the 2018 JVA entered into by the City Government and the TGC for various deficiencies.
COA said the contract was not compliant with certain parameters set forth under City Ordinance 2154 dated Sept. 17, 2008, thus earning a “semblance of a void contract.”
COA also highlighted that the JVA was not an agreement to undertake an investment activity, but merely a concession of governmental function involving the collection of charges to a private entity, contrary to Section 130 (c) of the Local Government Code (LGC) of 1991, which provides that the collection of local taxes, fees, charges, and other impositions shall in no case be left to any private person.
The state auditors also said that in the JV contract, there was no clearly defined business objective and that there was no clear management role given to the City. “Other than the retained regulatory function, the City has no apparent voice about how the operation goes,” COA said.
Moreover, COA found that despite the TGC needing less capital, the City’s assets having strong revenue potential, and expanded scope in the renewed JVA, it is unfair that TGC still receives the same 78 percent of revenue as before, while the City only gets 22 percent.
COA also said the City Government failed to use its right to inspect TGC’s financial records, violating the JVA’s Paragraph F and Section 20(d) of Article II in Republic Act 3857, or the Revised City Charter of the City of Cebu.
Paragraph F of the JVA provides that the City Government shall have the authority to conduct an audit and examination of the books of accounts of the TGC.
COA recommendation
COA recommended that the City Government consider the termination of the “unincorporated” JVA with TGC.
However, if the recommendation for termination is rejected, COA recommends contract revision or at least include a supplemental JVA to incorporate all the required parameters, including an amendatory provision on revenue-sharing terms to make it more “just and equitable for the parties.”
Rama has already ordered the conduct of review on the JVA and said the City does not have to wait until 2026 to rescind the JVA with TGC, depending on the result of the review.
He is also keen on venturing into online means in the collection of parking fees.
‘Still my mentor’
In a press conference on Friday, Oct. 27, Rama said he still sees Osmeña as his mentor, even though the latter has been critical of his administration.
“He is still my mentor,” Rama said.
He said the grade of negative three given to him by Osmeña does not matter because the latter is not anymore in the government position.
“I give it to him, if it will make him happy, let it be so. I wanted him to be happy. What will make him happy, he can do it, but at my expense, it does not really matter,” Rama said.