2011 Executive Budget: Advancing Our People’s Vision

The proposed 2011 Annual Budget of the city government totaling P609,027,078 is an
affirmation of our vision for a livable Naga City in 2011. It balances outlays for social and
welfare services with growth sustaining capital expenditures. The proposed allocation for
social and welfare services covers new and regular programs in health, nutrition and
education as well as support for special sectors such as senior citizens, women, children and
the differently abled. Our capital budget, on the other hand, will fund the continuing
redevelopment of our central business district, revitalization of the Naga River, upgrading of
urban poor settlements, improvement of our urban drainage system, as well as rehabilitation
of irrigation systems and provision of post harvest facilities, among others. To carry out
these programs and projects, the city government’s bureaucracy has been streamlined and
provided with the necessary manpower and resources while accountability for results has
been strengthened. All these are captured by our banner program: Naga SMILES.

Naga SMILES builds on the renowned accomplishments of the previous administration.

Naga SMILES focuses on six key areas that we believe will propel our city to its next stage
of development. We have been pretty successful in the area of good governance and urban
development. My duty is to make our city an even better place for Nagaenos and an even
better place for others to See, and where others can Meet, Invest, Live, Experience and Study
as well.

A. Goals and Objectives:

Our goals and objectives are captured by the slogan: Naga SMILES:

• See Naga – We would like to see more domestic and foreign tourists come to Naga City to
enjoy its many natural and historico-cultural attractions. More tourists results in more job and
income opportunities and the infusion of new development ideas. It will also be an opportunity to
take pride in our culture that traces its roots to pre-colonial days and enriched during the Spanish
period.

• Meet in Naga – We have recently completed the Naga City Coliseum and we have the best
hotels and venues in the region for conventions, meetings and other events. We will leverage these
assets to make Naga City the convention destination in Southern Luzon. Again, we want more
conventions, meetings and events for the economic opportunities they bring to our people.

• Invest in Naga – We are targeting investments that generate jobs, utilize inputs our small
enterprises and farmers produce, complement our competitive strengths, and position Naga in a
niche it has a strong potential to grow. We can already point to initial results, by way of firm
commitments from potential locators, thru the efforts of this office the past few months and we
intend to see it to fruition next year.

• Live in Naga –We want to make the city the preferred place to live in given with its modern
amenities, low cost of living, a broad range of economic opportunities, and accessibility to other
urban centers and regional destinations. Still, we will retain our city’s provincial charm that makes
urban life a little less hurried and leaves one less pressured and harassed. We want to keep Naga
abreast with the times but we will make sure it remains connected with its past. Maintaining our
connectedness with our colorful past, mitigating urban congestion and revitalizing our green areas
are key features to the livability of our city.

• Experience Naga – In national and international circles, our city is synonymous with good
urban governance. Experiencing the city is thus learning about transparency, accountability, and
people participation; immersing in the city’s partnerships with civil society and the individual
Nagueño, experiencing excellence and innovations in various aspects of urban governance.

• Study in Naga – With its top notch universities and other learning institutions that span the
breadth of educational courses, Naga City can very well be the “University Town” of Bicol. This is
important because certain sectors of our populace depend on a large student population for their
daily keep: the transport sector and other entrepreneurs catering to the needs of students and the
 youth. In addition, the youth is the harbinger of new ideas, innovation and change with whom the
city government will be forging partnerships to attune its programs with the needs of the youth.

B. Revenue Outlook

This year’s budget will be driven by a robust outlook for 2011. We are looking at a revenue
increase of P92.0 million which makes our proposed budget higher by 18% compared to the
2010 budget.

Internal revenue allotment will account for only 54% of the total projected income, the rest
will be contributed by business taxes at 19%, economic enterprises at 9%, real property taxes
at 7%, and the remaining 11% by various fees, charges and transfers. (Please see Table 1.)

We anticipate a continuation in the rise in business taxes. This will be accounted for not only
by new upscale establishments but even by smaller entrepreneurs who will capitalize on the
opportunities created by the big entrants. Of course, we will sustain our tax collection effort.
One initiative is to contract out the sending of demand letters. Per experience of the City
Treasurer’s Office, demand letters generate a surge in delinquent tax payments. Some
taxpayers just need to be reminded of their tax obligation. The problem is that our existing
manpower and logistic complement can only deliver a fraction of the letters or so that need to
be sent out in a year. Contracting out part of the job will make up for our limitations at a
very minimal cost.

Economic enterprises formerly account for 8% of total projected income. The percentage
point increase is due to the anticipated normalization of operation of the Naga City Coliseum.
We are formalizing the terms and conditions for the privatization of the facility and we will
submit the same to this body for its review and approval. In the interim, we will request for
the approval of a provisional set of rates to support the rental fee collection from Coliseum
users.

The increase in real property taxes will be driven both by new property developments and by
the relaxation of the cap to 50% next year from the current 25%. Property taxes will further
be boosted by regional magnets in the city and forthcoming commercial developments by
local businessman in partnership with national conglomerates, and new business entrants
next year.

Still, sound fiscal management dictates that we be conservative in our expenditures. We will
thus maintain a 150% reserve on all maintenance and other operating expenses. This will be
gradually lowered as actual collections approximate target. A firm control on expenditures
will be maintained to ensure that every peso spent move us forward to the desired vision of
our city.

C. Budget Highlights

The proposed budget is based on a streamlined bureaucracy which is likewise submitted for
your review and consideration. Reference has been made the output of the Public Service
Excellence Project initiated late last year during the time of then Mayor Jesse M. Robredo,
before I and the management committee have colectiely decided to put in place the required
support structure for Naga SMILES. Among the proposed changes are:

1. Creation of the Office of the City Administrator (OCA) which will cover existing as well
as new units which are not full-fledged departments. Under the OCA will be:
i. City Properties Management Office – which will handle the upkeep of center islands, parks
and plazas, youth center and similar facilities. It will also take charge of completing the inventory
and ownership documentation of city properties.
ii. Media Relations Office – this will manage the dissemination of accurate and timely
information to the public in partnership with local media outlets and thru its own activities.
iii. City Publications and External Relations Office (formerly the Naga City Visitors Center)–
this will handle the publication of the city’s official organ, brochures, and other publications as well
as handle visits by other LGUs, civil society and other groups,

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 iv. i-Governance Program Office – this will oversee the implementation of transparency and
accountability tools such as the city website and the citizens charter.
v. i-Serve Information and Action Center – this will facilitate the proper interfacing of
frontline services with client needs, track and facilitate service delivery, and provide a one-stop
assistance center on availment of city hall services.
vi. Arts, Culture and Tourism Office – this will implement an effective tourism campaign that
highlights the richness and diversity of arts and culture in Naga City, in addition to the natural spots
of Mt. Isarog.

2. Creation of six other city departments that will push our agenda for growth. These are:
i. Solid Waste Management Office (SWMO) – Given the gargantuan responsibilities of the
Environment and Natural Resources Office which span the length and breadth of our ecosystem,
from air, water to land, the PSEP recommended the spin-off of ENRO’s solid waste management
division leaving ENRO with the enforcement of the Clean Air and Clean Water Acts as well as
environmental permitting and regulatory functions. The implementation of the Solid Waste
Management Act (RA 9003) will be handled by the proposed Solid Waste Management Office,
presently a unit of ENRO. Among SWMO’s tasks are the institutionalization of the 3Rs of waste,
street cleaning, curbside garbage collection, waste transport, and final waste disposal.
ii. Information Technology Office (ITO) – This will provide hardware and network
maintenance, software development and maintenance, as well as contract management for
outsourced programming services for our varied offices. We have been ahead in the implementation
of various IT initiatives in the past but because of the absence of an attractive career path within our
EDP unit, young IT talents leave us once they gain experience. The ITO seeks to provide this career
opportunity and thus mitigate the exodus of talent giving city hall a firm IT support team.
iii. Education, Scholarship and Sports Office (ESSO) – Our existing educational facilities and
services will be handled by ESSO. The secretariat of the Naga City School Board, the scholarship
desk of the Human Resources Management Office, and the integration of all educational and sports
programs of the city will be fashioned to complement each other thus strengthening their positive
impact on the education and sports development. ESSO will further be bolstered by competent
individuals who will introduce a more rational sports development program for the youth.
iv. Housing Settlements and Development Office– The city’s urban poor program has been
one of the cornerstones of our development program since the early years of the previous
administration and played a big part in the sustained growth of our city. Its importance has grown as
reflected in the huge investment we have poured into the program as well as its significant impact on
the lives of a lot of Nagauenos. Given its crucial role in charting a sustainable course for our city,
UPAO needs a beefed up and a more responsive structure which only a department can give. We
will now call it Department of Housing in keeping with its broader mandate.
v. Market Enterprise and Promotions Office– The Market Office has long been treated as a
division of the City Treasurer’s Office and thus is measured by the amount of revenue it collects for
the city. But the Naga City Public Market has overgrown this narrow measure and now has to
deliver not only revenue but also quality service to both its tenants and its patrons. Indeed, it goes
beyond service, what it is expected to deliver to its clients is quality experience. Such cannot be
performed within the confines of a revenue collections office, thus the need to detach the Market
Office from the City Treasurer’s Office and transform it into a full department with the challenge to
make the NCPM a competitive and self-reliant economic entity. We will call this new department as
the Market Enterprise and Promotions Office.
vi. Naga City Abattoir - The Naga City Abattoir is in the same boat as the Market Office, the
same argument holds for its elevation into a full department.
vii. Early Childhood Care and Development Division and Children-in-Conflict-with-the-
Law Diversion and Intervention Division – These divisions will be created at the City Social
Welfare and Development Office. The Early Childhood Care and Development Division will
spearhead the complementation of CSWDO’s childcare program with other children-related
programs of other city government departments and offices. The CICL Division, on the other hand,
will enable us to apply more manpower and resources to minimize juvenile delinquencies in the city
as well as rehabilitate those already remiss with the law. While we do have personnel performing
some of these tasks already, the creation of these divisions will further improve systems and
procedures that will make our effort more effective and long lasting.
viii. Water Services Office – Formerly known as Task Force Tubig, this office will be under the
Office of the City Mayor to expedite our response to one of the basic needs of our people,
particularly the urban poor segment of our population: water. The Water Services Office will

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anticipate the need for water supply, prepare the plan to address them, and deploy the resources to
resolve them.

The end result of these new offices and realignments will be a flatter organization
which will make executive decisions and feedback direct to and from the people
concerned without any intervening hierarchy, and making service delivery faster
and accountability of implementing offices more defined. I believe this makes for
a more responsive and efficient organization. Also, the proposed organizational
structure aligns us with our commitment to our employees to be motivated by
elevating those that are crucial to department status.

3. Creation of new positions and rationalization of assignments. The proposed budget

likewise includes several new plantilla positions for a couple of departments which submitted
proposed organizational structures linked with their deliverables such as the Information Technology
Office (as submitted by EDP personnel) and the City Agriculture Office.

What we will do is further fine-tune our organizational structure by tightening its

link with the results expected of the city government abolishing extraneous ones
and aligning everything else with our deliverables. What positions are necessary
and what aren’t to deliver the desired results of a department? Equally essential
are positions that offer career growth for high performing employees, we will
fund them as well to motivate performance and reward those who excel. Funding
the streamlined positions will be a multi-year undertaking given the PS ceiling.
That is, we will fund them as our income increases until such time that no
unfunded positions remain. We are now formulating a criteria to guide us in
determining which positions should be filled up.

Corollary to the creation of new departments and offices is the rationalization of

personnel deployment. Those who were assigned to other offices and have
proven themselves useful will be permanently transferred to those offices—
position and all—of course with leave from the head of their mother units. The
movements and the creations are all reflected in the attached plantilla.

4. Compliance with Salary Standardization III and the Magna Carta for Public Health
Workers. The proposed budget covers the implementation of the second tranche of Salary
Standardization III which will effect an increase in salaries and wages effective January 1, 2011.
The requirements of the Magna Carta for Public Health Workers have been complied with in
keeping with the mandate of the law and the clamor of our health personnel.

5. Full budgetary support for the programs and projects of our departments as contained
in their budget proposal. We have been very tight in our previous years’ budgetary allocations for
our departments and offices. To a certain extent, this has dampened innovation and creativity as
department heads lack sufficient resources to fund their initiatives. More often than not, they just
waited for initiatives to come from the top as these will be backed by resources.

Under the proposed budget, majority of the funding request by departments have
been granted except for a few whose submissions did not make it to the cut-off.
The minor changes that were made involved telephone and fuel allocations as
these were based on a uniform formula and items whose submitted budget were
patently excessive as to invite waste and inefficiencies.

Likewise, requests for additional equipment which will enhance service delivery
were mostly granted so as not to sacrifice service quality and . Among these are: a
more reliable man-lift for the General Services Offices, motorcycles for the
collectors and tax mappers of the City Treasurer’s Office (as of now, private
motorcycles augment the few official ones that are available), equipment to cater
to the comfort of out-patient clients of the Naga City Hospital (such as aircon,
paging/numbering system and television to be placed at the waiting area), new
service vehicles for pooled use by all departments, computer equipment for the
Sangguniang Panlungsod secretariat, server room for the City Assessor to house
the LAMP servers, library books for the Raul S. Roco Library, new exhibits for
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 the Bicol Science and Technology Centrum (the preceding two offices are
proposed to be placed under the Education, Sports and Scholarship Office), dog
pound and motorcycle for the veterinary office, and replacements of aging office
equipments of most offices. Indeed, this budget proposal empowers our
departments to serve our people better.

6. Robust support for health and welfare services. We have raised the budget for medicines
of the city hospital by half a million pesos and its budget for medical, dental and laboratory supplies
by the same amount bringing them to P5 million and P3 million respectively, and we elevate the
hospital to a secondary classification from its present primary category. On the other hand, the
proposed budget for drugs and medicines of the City Health Office is higher by a million pesos at P3
million. The proposed budget for food supplies of the City Population and Nutrition Office is higher
by P400,000 at P2.4 million while the proposed consolidated budget for direct welfare services of
the City Social Welfare and Development Office including assistance to individuals in crisis
situations now stands at over P15 million.

7. Funding for key infrastructure projects. We have four local funding sources for our
infrastructure projects. These are the capital outlay component of the City Engineer’s Office which
has a proposed allocation of P36.3 million for general civil work projects; the Local Development
Fund at over P60 million for various capital expenditures including the initial works for the Naga
River Rehabilitation Project and environmental flagship projects; the capital outlay component of the
Special Education Fund (the amount is for the school board to decide) for school-related
infrastructure; and the Disaster Mitigation and Risk Reduction Fund provided they are in the nature
of disaster risk reduction infrastructure. Altogether, we are anticipating over P100 million as
funding for infrastructure and related capital expenditures, a substantial portion of which will be
earmarked for solving the perennial flooding problem in the city.

8. Increased assistance for barangays. The annual budgetary requirement for barangay
volunteer workers, which includes tanods, barangay health workers and barangay nutrition scholars,
has been fully funded while assistance to barangays has been set aside as required by law. The
combined barangay assistance fund under the proposed budget stands at nearly P28 million ?
compared to only P16.3 million under the 2010 annual budget.

9. Sustained support for agriculture. Our thrust to enhance the quality of life of our farmers
is backed by a P3 million allocation for SARIG Naga (sustainable Agriculture for Rural Income
Growth in Naga) on top of the regular budget of the City Agriculture Office. This will fund more
post harvest facilities, particularly for drying, as these have the greatest value-adding impact on farm
produce, as well as sustain other income-enhancing interventions at the farm level. Better farm
income means more buying power which in turn means a larger market for urban goods and
services. It also means lesser incentive to convert agricultural land to other uses thus a better chance
of containing urban sprawl which is anathema to a livable city. It also means less people dependent
on government dole outs thus preserving our resources for development endeavors. But beyond all
these, better income means better lives for our people and that is what we are all here for.

10. Substantial support for youth programs. The proposed budget upped the allocation for
scholarship to P8 million from this year’s P5 million, both in anticipation of the proposed ordinance
on scholarships being crafted by this august body and of an increase in availment by our students.
On the other hand, funding for our youth summer programs (employment and city youth month),
sports and government internship have been retained at P2.1 million.

11. Tourism and investment promotion. The allocation for tourism and investment promotion
is proposed at a combined total of P4.1 million on top of the allocations for the Investment and
Trade Promotion Office and the Arts, Culture and Tourism Office, the latter under the Office of the
City Administrator. These proposed outlays will fund special projects supportive of Naga SMILES.
Not captured by the figures are our on-going initiatives to attract new investments into the city. For
instance, we have been successful in inviting Honda Cars Philippines to set up a sales and service
outlet here. We have opened the possibility for Convergys to set up a 1,000-seater call center in the
city, availability of manpower permitting. And we have also presented a sound business case to SM
management to justify expansion of SM City Naga, fortifying Naga’s position as the commercial,
financial and trading hub of Bicol. We are doing all these and a lot more not for the investments per

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se but for the jobs and economic opportunities they will bring to our people. Subregional office of
landbank and regional office of dbp, majorit of KB regional office already here plus gsis and sss.

I invite you to scrutinize thoroughly this executive budget as it introduces a lot of changes. During
the budget hearing, I also encourage you to query our department heads about the deliverables
justifying their respective budget proposals. While much time went into the crafting of this
executive budget, it remains a living document, not one carved in stone, I stand squarely behind this
executive budget but I am open to feedback and inputs if these will enhance our effectiveness and
make every tax money count.

Thank you very much.

Very truly yours,

JOHN G. BONGAT
City Mayor