THE city council passed a resolution in a special session Thursday afternoon authorizing Mayor Belen Fernandez to negotiate with a reputable banking institution for a P590-million loan to fund the construction of a new and state-of-the art government center to be built on a donated land in Barangay Pantal.

Councilor Jeslito Seen, chair of the committee on appropriations, who proposed the measure, said of the P590-million loan being sought, P570 million will be spent for the construction of the government center and another P20 million for the installation of the e-government system that will link city hall with the 31 barangays of the city via the computer system to speed up transactions with the city government.

Seen revealed the city has the capacity to borrow and pay for the loan following a certification from the Bureau of Local Government Finance of the Department of Finance that the borrowing capacity of Dagupan to date is P886 million.

He said the city of Dagupan as of today has a Net Debt Servicing Capacity of Php485 million yearly, corresponding to the annual Internal Revenue Allotment (IRA) that it receives from the national government.

With the P590 million loan, its estimated yearly amortization is pegged at P127,547,000.

Seen cited Section 324 of the Local Government Code that provides that debt servicing of a loan should only be 20 percent of the regular income of the Local Government Unit.

City Budget Officer Luz de Guzman also certified that if Dagupan borrows the amount, payment of quarterly amortization will not disrupt the financial performance and management of the City.

De Guzman said Dagupan borrowed more than P300 million in 2004 to fund the construction of the three-storey Malimgas Public Market and its annual budget at that time was only more than P300 million.

She said the city is borrowing P590 million at the time when its annual budget has risen to P948 million next year.

The loan is payable from 10 to 15 years and if paid in 10 years, the city will save at least P78 million in interest payment, said De Guzman.

City Engineer Virginia Rosario said the total area to be built in the four-storey government center totals 12,500 square meters and is estimated to cost, P35,000 per square meter or P437,500,000.

Landscaping area of 12,000 sq. meters cost P24 million (P2,000 per square meter).

Electrical and mechanical elevator will cost P108.5 million, said Seen.

On the establishment of the eGovernment System, the system of Milpitas City, the sister city of Dagupan in California, U.S.A, will be adopted.

City’s Information Technology chief Ryan Castaneda said the city will soon use eGovernment System model used by cities of Valenzuela and Pasig.

The loan is separate from the P60 million earmarked by the city council for the site development and procurement of consultancy services for the preparation of architectural and engineering design and plans. (Leonardo Micua)

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