Failed Nabunturan bond float PLAN TO PAY P1.8 M TO BUY OUT PREFERRED VENTURES HIT

March 31-April 6, 2011

Remaining oppositors to the P90-million bond flotation which the current administration of Nabunturan Mayor Romeo Clarin has recently dumped in favor to an P82-million bank borrowing have slammed the municipal buy-out plan of paying P1.8 million to Preferred Ventures Corporation, the municipal bond float consultant, citing “it is disadvantageous and prejudicial to the government.”
Emilio ‘Meloy” delos Reyes, one of the remaining lead oppositors to the municipal bond float, said in an interview that the administration of Clarin “might again be entangled with a new legal case… this time, it would not come from us (old oppositors) but from new and younger opposing taxpayers if they would pay P1.8million to Preferred Ventures in their planned buy-out scheme.”
“In the first place, Preferred Ventures should only be paid in no cure, no pay basis, that is if there would be proceeds from bonds floated, but there’s no bond proceed yet ,” added Delos Reyes, a PTCA-NNCHS official.
The bond flotation started by the past administration of former Mayor Macario Humol obviously failed in raising funds to finance the construction of the two-storey “mall-type” public market building as there was reportedly no buyers in the public auction of bonds to the general public and the bond float’s second-stage underwriting phase, which entails more obligations, is snagged by the reported denial of the Veterans Bank Manila to release funds to buy the bonds in bulk due to existing injunction issued in November 2010 by the Regional Trial Court Branch 3 in Nabunturan temporarily stopping the municipal bond flotation.
The group of bond float oppositors composed of taxpayers and market vendors filed an injunction case in November 2008 in their legal bid of stopping the bond flotation after the previous Sangguniang Bayan presided then by Clarin turned down their people’s initiative petition in their bid to put the issue for a local referendum.
The oppositors cited that the bond flotation is disadvantageous to the municipal government owing to its many un-understood and unknown obligations and conditionalities besides that the rentals to spaces in the proposed public market building were exorbitant as earlier tagged by a group of complaining market vendors.
The buy-out scheme appears to be paying Preferred Ventures in exchange that it would already exit as the municipal consultant from the terminated bond flotation.
At presstime, an ordinance is being passed for new readings authorizing Mayor Clarin to contract a bank loan worth P82 million “to finance the planning, design, construction and development of the public market (building) and to buy-out the agreement with the bond flotation financial advisor.”
Rationale d) in the the proposed ordinance authored by Councilor Carlo Ancla states: “Consonant to the shifting of form of borrowing, the agreement with the financial advisor must be terminated, thus the buy-out provision of the Memorandum of Agreement must be complied with.”
BOND FLOAT BACKGROUND
Former Mayor Macario Humol started the bond flotation during his second term starting particularly in 2006. He further pushed it in his third term starting in 2007.
During those last two terms of Humol, Clarin was the vice mayor actively supporting the much-touted P90-million bond flotation . Clarin had gave a thumbs up to a pending measure filed in the Sangguniang Bayan repealing the bond flotation ordinance and authorizing him to sign,contract and negotiate an P82-million loan with the Land Bank of the Philippines.
At presstime, sources said that the measure repealing Municipal Ordinance 2008-10 which authorized the P90-million bond flotation has already passed the first and second reading. But in the next session the SB reportedly backpedalled by aborting the ordinance repealing the bond float ordinance and instead pushed the ordinance authorizing the mayor to contract a bank loan with the buy-out provision.
Right after the May election last year, Clarin, who just assumed as the new town mayor, Humol, who was already a plain citizen, and other pro-bond flotation officials formally launched the project for a construction phase in a ground-breaking ceremony, putting up a huge tarpaulin billboard at the site in the market where block tienda stalls were razed to the ground by a fire in 2005. Sooner the site was enclosed with a fence made of galvanized iron sheets.
Subsequently, words were abuzz that inside the fenced area foundation works had been made by a contractor who already spent some P20 million but which had reportedly stopped further funding the project at present while waiting for the release of money from the Veterans Bank-Manila the local officials earlier identified to be buying the bonds in bulk.
Said contractor named by sources as CCJJ construction company and represented by one Engr. Moreno had invested some P20 million to start the construction works specifically for the foundation of the market building including its architectural and engineering design that in the feasibility study made by the bond flotation financial advisor-consultant Preferred Ventures Corporation would cost some P6.7 million.
Separate reports however said that the Veterans Bank-Manila is not releasing any single amount to buy municipal bonds unless the injunction issued in November 2009 by Regional Trial Court Branch 3 Judge Hilarion Clapis Jr would be reversed or dismissed such that the bond flotation would be free from any legal suit.
Last February 23 another fire ate up block tiendas just adjacent to the fenced site. A day after the recent fire, the gate of the fenced site was opened and visibly seen were steel trusses laying down on the ground.
The present measure while still being debated at presstime would seek to alternatively fund the project that has already eaten up three various sets of sanggunian bayans since the bond flotation financing scheme was pushed by Humol starting in year 2006 during his second term.
In 2008 midway during Humol’s last term, his bond flotation scheme was opposed by a local group of taxpayers including a good number of market vendors whose block tienda stalls were eaten up by the 2005 fire. The group then complained that the bond flotation’s terms, conditions and obligations were exorbitant and disadvantageous to the government while particularly the market vendors feared loss of livelihood as they cited excessive and high rentals of spaces inside the proposed public market building as spelled out in the project’s approved feasibility study.
The bond float oppositors during Humol’s last term included former Councilors Alfonso “Jun” Tabas and Raul Caballero, former provincial agriculturist Antonio Mencidor, former NNCHS PTCA president Emilio “Meloy” delos Reyes, journalist Charlie “Cha” Monforte, groups of market vendors led by Dodong Coquilla, and now Councilors Mario Angelo “Dodong’ Sotto and Atty. Carlo Ancla, who were then a plain citizen and one of the legal counsels of the oppositors, respectively.
In their opposition, the group first launched a people’s initiative petition seeking to repeal the controversial ordinance and to put the bond flotation issue under a local referendum but the previous SB presided by Clarin junked their petition in its Resolution No. 2008-206 made on October 21, 2008.
Subsequently, the oppositors represented by former Councilor Tabas, Delos Reyes and Monforte went to the RTC Branch 3 and filed an injunction case with application for writ of preliminary injunction in their bid of stopping the bond flotation through the court.
Respondents, who had taken pro-bond float position, were Humol, Clarin, Councilors Darwin Tan (now the new vice mayor), Iluminada Cabuga (now plain citizen), Eduardo Minoza (now barangay captain), Vivencia Secuya (now on second term), Cheryl Asion (now on third term), Alfredo Manalop (now deceased), indigenous people representative Felipe Masambo and Sangguniang Kabataan president Jennefer Gamao (now out of SK).
In February 2009, the respondents made a motion to dismiss on grounds of lack of jurisdiction and lack of cause of action.
While both parties tangled in court over an injunction issue, in May 2009 and subsequently thereafter the Humol administration made a first pre-bid conference and bidding for the project’s construction works. Sources said there was failure of the first bidding.
After series of hearings where various resource persons from the regional offices of the Dept. of Budget and Management (DBM), Dept. of Finance and municipal and provincial accountants and treasurers shed light about the bond flotation, Judge Clapis issued the writ of preliminary injunction on November 4, 2009 citing that the court has jurisdiction to rule over the issue and that the complainants have cause of action and legal standing on the case.
Judge Clapis also called Preferred Ventures Corp to shed light on bond flotation, but no company representative appeared during the hearings.
Subsequently, the respondents reportedly wanted to make a motion for reconsideration in view of the injunction issued, but complainants later heard of the respondents’ petition for Judge Clapis to inhibit from hearing the case, to which Clapis accepted their petition and inhibited himself as the judge of the case.
Clapis later said that his injunction can only be reversed by the Court of Appeals or by the Supreme Court.
Since when Clapis issued his injunction in November 2009, the respondents had not made an appeal to a higher court.
Reports instead said that the pro-bond float officials had since proceeded implementing the project and before the last May 2010 election they had already a contractor winning in the second bidding.
For proceeding with the bond flotation despite Clapis injunction and for, among others, allegedly giving the financial advisorship of the project to Preferred Ventures Corporation without “legislative enactment, ordinance or resolution to hire a financial consultant and advisor” and “without passing through the bidding procedure as required by law,” the oppositors represented by Delos Reyes and Monforte filed a grave abuse of authority case against the respondents to the Office of the Ombudsman for Mindanao in August 2009. Respondents denied the charges.
Last July after the May polls, Clarin, who just assumed as the new mayor, and newly elected and reelected officials and a plain citizen Humol formally launched the project’s construction phase at the burned site in the town public market
Just last January 12, 2011, the Ombudsman for Mindanao had ordered the two parties to file their respective verified position papers before the resolution of the case. It was the latest Ombudsman’s directive since when the complainants filed their complaint affidavits and the respondents replied with their counter affidavits to the Ombudsman in late 2009. (Rural Urban News/Cha Monforte)

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