The Cuneta Astrodome in Pasay City (Metro Manila) has been incurring losses totaling P45.09 million in the last four years, according to state auditors.
This was based on a Value for Money Audit in a 2014 report on Pasay City by the Commission on Audit (COA).
“The CG [City Government] did not achieve its goal to generate income from the operation of the Cuneta Astrodome. [I]nstead, its scarce funds were drained due to the Astrodome’s continued [incurring]of operating losses [in]the last four years in the total amount of P45,091,126.78,” the auditors said, referring to calendar year (CY) 2011 to 2014.
Section 458 of Republic Act (RA) 7160 or the Local Government Code, authorizes city mayors to lease public buildings upon the majority vote of all the members of the Sangguniang Panlungsod (SP or City Council) subject to existing laws, rules and regulation.
“Despite our diligent search of SP ordinances that would serve as basis in establishing the Astrodome as well as to identify its objectives, none could be found. The Officer in Charge [OIC] of the Astrodome, Mr. Aurelio P. Vendivel Jr., provided us only with documents where the objectives of the establishment of the Astrodome were reiterated,” the state auditors said.
According to the Functional Statements, Objectives and Expected Results Form submitted by the city government to support the CY 2014 Budget of the Astrodome, its objective was “to help generate income for the city and to support the city with providing services in terms of facility requirements.”
City Resolution 477 Series of 1992 states that the city administration decided that a “new and modern sports complex be constructed to answer [to]the varied sports needs of our citizenry.”
The auditors said the Report on the Physical Count of Property, Plant and Equipment (RPCPPE) as of December 31, 2014 showed that the Astrodome was built in 1993 from a loan granted by the PNB (Philippine National Bank).
“The construction cost of P21 million included the rehabilitation cost of the Pasay City Sports Complex (PCSC). In the absence of disbursement vouchers and other documents, the original construction cost of the Astrodome and the rehabilitation cost of PCSC were lumped together in the RPCPPE in the amount of P21 million. On the other hand, the OCA [Office of the Chief Accountant] lumped together the original construction cost as well as the major repairs and rehabilitation costs of the Astrodome with the costs of other infrastructure projects in Buildings–Other Structures account (account 215) in the General Fund (GF),” they said.
The Astrodome underwent major repairs and rehabilitation in the succeeding years, and its total cost including rehabilitation cost of the PCSC as of December 31, 2014 “ballooned to P85,527,913.41,” according to COA.
The Astrodome has a court area, 18 commercial stalls, one function room, one press room, four dugouts, one bodega (storeroom), one Administration Office, one Artist Room and one referees’ room.
“Of the 18 commercial stalls, 7 stalls are occupied by the Postal Office and Pasay City extension offices and 11 stalls are rented out. While the court area and the function room are either leased to private parties or used by the CG and other government agencies/corporations for free,” the auditors said.
The OIC provided the audit team with a table of rental fees for usage of the Astrodome but without supporting ordinances and resolutions.
“In his letter dated April 27, 2015 to COA, he [Vendivel] averred that the rental fees used by the previous administration were still followed and the approval of the City Administrator was required for events where no fees were collected. He added that no new ordinances for the operation of the Astrodome were passed by the SP and no bidding for leasing out the commercial stalls was conducted in CY 2014 which explained the absence of contracts of lease for CY 2014,” the auditors said.
Based on the table, the rental rate is P80,000 for sports events and religious celebrations; P100,000 for corporate events, convention and private occasions; and P150,000 for concerts, musicals and variety shows (8 hours maximum.).
The refundable surety bond is P20,000 and an additional P15,000 is charged for excess hours.
COA’s audit report said the Astrodome incurred losses of P10,392,780.05 in 2011, P45,509.29 in 2012, P18,464,700.02 in 2013 and P16,188,137.42 in 2014.
It added that before 2011, the Office of the Chief Accountant (OCA) did not prepare the Statement of Income and Expenses (SIE) “thus, there are no records to show if the Astrodome generated income or loss in its operation.”
The auditors identified several factors, which they said contributed to the continued operating losses of the Astrodome, including the absence of the presentation of a feasibility study “that would have assured the CG of the viability of the Astrodome prior to its construction.”
“Through the years of its operation, no proof could be presented that marketing strategies were carried out to make the Astrodome viable,” they added.
According to the auditors, “[t]he management of the CG lacked the required managerial and marketing skills to run a multimillion enterprise for money-making purposes, like that of an Astrodome.”
Moreover, they said, the Astrodome earned only P39,354,233.93 from 2011 to 2014.
Based on the audit report, the generated income fell from P12.9 million in 2011 to P7.98 million in 2014.
The Astrodome’s income was P12,901,679.89 in 2011, P10,591,318.06 in 2012, P7,966,504.94 in 2013 and P7,984,731.04 in 2014.
Records showed that the income-generating capacity of the Astrodome was not fully maximized in several areas, according to auditors.
“The SP [Sangguniang Panlungsod-]mandated rental rate for commercial stalls pegged for a minimum of P300.00 per sq.m. for stalls along Roxas Boulevard and P250.00 for stalls along Derham Street and later reduced to a minimum of P150.00/sq.m. was very much below the current rental rate of P1,000.00 per sq.m. in the vicinity,” they said.
The SP mandated regulation of rents for commercial stalls within the premises of the Cuneta Astrodome particularly along Roxas Boulevard and Derham Street through Ordinance 2322 in 2002.
Its specific rules are the creation of a Bidding and Awards Committee (BAC), as well as the setting of the minimum criteria for a bidder that includes the minimum bid for stalls along Roxas Bouevard at P300 per sq.m. and those along Derham Street at P250.00 per sq.m.
In 2005, Ordinance 3378 stated that “the minimum bid for stalls shall be the prevailing market value but not lower than P150.00 per sq.m.”
The 2002 ordinance said that the BAC is responsible for, among others, devising ways on how to bid out the existing commercial stalls either by ordinary public bidding open to any interested party, bidding through selective invitations to qualified and established business entities or through negotiated contract.
But the auditors said, “No public bidding was conducted by the BAC in order to get the highest fees for the commercial stalls.”
At present, they said, the minimum rental fee imposed on stall owners is P250 per sq.m.
“No ordinance was passed mandating the regulation on rental fees for the court area, function room and the press room, thus the fees currently collected from the users had no legal basis. Varied fees were collected from the users of the court area, function room and press room…from as high as P800,000.00 to as low as P500.00. The frequent users were the religious organizations and the Philippine Basketball Association. Had there been an application of uniform rates, the Astrodome could have generated more income,” the state auditors added.
They observed that the rental fees imposed for the usage of the court area for basketball events were left to the BAC’s judgment. “No records would show how the fees were determined in comparison with other sporting venues, such as, the Mall of Asia Arena, Araneta-Smart Coliseum and other similar sports venue,” they said.
Further, the auditors added, “In the list of events of CY 2014 that was submitted by management, the Astrodome was lent out for free to four private affairs, a debut, a clan reunion, reporters meeting and a radio company activity. As of today, no ordinance or resolution had been passed by the SP setting out the guidelines in the free use of the Astrodome.”
According to the audit report, those who want to use the Astrodome for free must “merely” submit a letter-request to the City Administrator for his approval. The officer in charge of the Astrodome then allows them free use of the Astrodome including water and electric consumption.
“No utility charges were paid by government agencies…the Astrodome hosted seventy (70) events for free. Forty seven (47) were CG activities, seventeen (17) were National Government Agencies (NGA) activities, two (2) were Government Corporation (GC) activities and four (4) were activities of private parties,” it said.
The state auditors pointed out the non-collection of fees from food cart owners who sell food during events, as well as the non-utilization of areas for advertising purposes.
On the latter, they said the previous contract was not renewed for unknown reasons.
“The Astrodome spent huge sums of money for its upkeep. The total operating expenses for the four year period totaled to P84,441,759.81. Big sums of money were spent for big-ticket expenses,” the auditors added.
In the audit report, COA stated that the Astrodome was overstaffed with 17 personnel with an annual payroll including benefits of P3,835,414.51.
Stall owners paid a fixed rate of P1,000 per month for water consumption “even if the actual consumption was either higher or lower than the fixed rate since no sub-meters were installed.”
The city government’s janitorial and security agencies rendered services “on a per need basis, only when there are events” and they billed the Astrodome based on the actual number of janitors and security guards deployed.
The state auditors said, “As stated in the objectives of the establishment of the Astrodome, it was constructed not only to generate income for the City but also to support the City with providing services in terms of facility requirements and to answer for the varied sports needs of the citizenry.”
“We have recommended and management agreed to institute a recovery plan to avert the continued operating losses generated by the Astrodome by instituting marketing strategies, creating a management team with proven marketing and managerial skills, maximizing its income-generating capacity and reducing its operating expenses to the barest minimum. In case the recovery plan would not be successful, then the CG may consider disposing the Astrodome, the proceeds of the sale would be used to fund the delivery of basic services and facilities to the citizenry of Pasay City. The facility requirement can still be provided by the Pasay City Sports Complex or by renting venues for big events, the rental fee of which will be by far lower than the operating losses that the Astrodome incurred annually,” the audit report said.