Legal Basis for the Sinking Fund
- Republic Act No. 6039, amending Sec. 18(cc) of Republic Act No. 409 (Revised Charter of the City of Manila), mandates creation of a sinking fund.
- The sinking fund is sourced from 30% of the gross market fee receipts.
- Intended uses include amortization, financing new markets, remodeling/replacing old market buildings, purchasing buildings and sites for public market purposes, and constructing market facilities.
- Until old self-liquidating markets are replaced/reconstructed as per Market Committee specifications, market fee collections are to be allocated 70% to the city's special fund and 30% to the sinking fund.
Management and Operating Contract with Asiatic Integrated Corporation
- On December 28, 1972, a contract was executed between the City of Manila and Asiatic Integrated Corporation for the management of 35 public markets and talipapas.
- The contract mandates appropriation of no less than 30% of the gross market fee receipts from fiscal year 1971-1972 for maintenance, repair, reconstruction, development, and rehabilitation of said markets.
Accumulated Sinking Fund Prior to Contract
- By the time of the contract, there was an accumulated sinking fund amounting to P3,696,921.99.
- This sum represents 30% of gross market fees but was not appropriated as required by law.
Rationale for Reversion
- The accumulated sinking fund is no longer needed for its original purposes since Asiatic Integrated Corporation assumes responsibility for market improvements.
- The city has urgent pending public works projects, such as street construction, repair, and estero dredging and clearing, lacking sufficient funds.
- Utilizing the accumulated sinking fund for these urgent projects is necessary to ensure their successful undertaking.
Presidential Authorization and Implementation
- President Ferdinand E. Marcos, under Constitutional powers and proclamations related to martial law, authorizes the reversion of the P3,696,921.99 sinking fund to the City's General Fund.
- The City of Manila is authorized to appropriate this reverted fund for its public works projects.
- The decree takes effect immediately upon issuance on November 26, 1973.
Important Legal Concepts
- Sinking fund: a reserved portion of market fees for specific public market-related capital expenses.
- Reversion: the legal act of redirecting reserved funds to a different government fund.
- Contractual delegation: transfer of market maintenance responsibilities to a private entity with budgetary provisions.
- Public works prioritization: allowing fund reallocation to address more urgent infrastructural needs.
- Presidential decree: a law issued by the President under emergency powers granted by the Constitution and special proclamations, which has immediate force of law.