EXPLAINER: Why Cebu officials are fighting over the Metropolitan Cebu Water District

CEBU, Philippines – In the city of Cebu, former political allies are fighting over the management of the Metropolitan Cebu Water District (MCWD), one of the largest water districts in the Philippines.

These friends-turned-foes are no other than MCWD chairman Jose Daluz III, the current leader of the Partido Panaghiusa, and Cebu City Mayor Mike Rama, the founding president of the Partido Barug.

To recall, both Daluz and Rama ran under the same party alliance during the May 2016 local elections. While Rama lost to former mayor Tommy Osmeña, Daluz won and became a city councilor until 2019 when the late Cebu City mayor Edgardo Labella appointed Daluz to become part of MCWD’s board of directors.

This was preceded by Labella moving for the termination of the previous directors of MCWD in October 2019, citing “widespread dissatisfaction” over the services they provided.

As fate would have it, Daluz would have his chairmanship challenged by Rama for similar reasons, initially wanting the chairman replaced with MCWD vice chairman Miguelito Pato on May 18 and then with retired major general Mel Feliciano on October 31.

Rama said in a media forum on Friday, November 3, that the city mayor has the power to appoint and remove MCWD chairman and members of the board. 

Daluz, on the other hand, argued that the Local Water Utilities Administration (LWUA) has the authority to oversee and govern MCWD, including changes in the composition of the board. 

With Rama’s insistence on having Feliciano recognized as the newly-appointed head of MCWD versus Daluz standing his ground for the post, the controversy has now sparked debates on the validity of the new appointments and even that of the positions held by the incumbent heads. 

Cebu City and MCWD

In 1973, the late president Ferdinand E. Marcos signed Presidential Decree 198, also known as “The Provincial Water Utilities Act of 1973,” creating the LWUA.

The LWUA would act as the lone lending institution mandated to promote and develop water supply systems in provincial cities and municipalities outside of Metro Manila.

After the formation of LWUA, the Cebu City government, under the leadership of the late mayor Eulogio Borres, formed the MCWD via the approval of Resolution No. 873 on May 9, 1974.

At the time, the goal of the local water district was to improve the services provided by the Osmeña Waterworks Systems (OWS). The Cebu city council, which was the Cebu municipal council at the time, created the OWS in 1910. 

On July 18, 1974, the Cebu City government passed Resolution No. 1378 to specify that component cities and municipalities benefitting from the MCWD should share in the subsidy or counterpart funds whenever necessary.

Over the years, the MCWD would embark on multiple projects to increase the number of available water sources in the province, better water pressure monitoring and management, and conduct massive rehabilitation campaigns for its pipelines. 

As of February 2023, the MCWD has P5.2 billion in total assets, producing 270,000 cubic meters of water per day for 200,000 service connections in the cities of Cebu, Mandaue, Lapu-Lapu, and Talisay, and the municipalities of Liloan, Consolacion, Cordova, and Compostela.

2019 takeover

Since the mid-2000s, the MCWD has experienced several hiccups in operations in the form of day-long water interruptions and system leakages worsened by the El Niño phenomenon and natural disasters.

The issue reached a boiling point in 2019 when the city and municipal councils issued separate resolutions expressing their dissatisfaction with MCWD’s services.

Labella, citing the resolutions, served notices of termination of service to then-MCWD chairman Joel Mari Yu and board members Augustus Pe Jr., Cecile Adlawan, Procopio Fernandez, and Ralph Sevilla on October 15, 2019.

The MCWD board members were appointed by former Cebu City mayor Tommy Osmeña, Labella’s political rival.

On October 25, 2019, the LWUA appointed an interim board to run the affairs of the MCWD while it was reviewing Labella’s termination order against the board of directors. 

The interim board was composed of LWUA legal department manager Roberto San Andres, LWUA deputy administrator for institutional development service Aileen Dela Veyga, and LWUA manager of the utilities development division for Visayas Cristina Marcelino.

While this was happening, Sevilla, Pe, and Adlawan filed a civil case at the Regional Trial Court in Cebu City on November 11, 2019, seeking to nullify the termination. They argued that the mayor only had the authority to appoint and not remove the MCWD board.

Under Section 3 of Presidential Decree 198, the mayor of the city of Cebu would act as the primary appointing authority of the MCWD board of directors as more than 75% of the total active water service connections of the water district are within the boundary of the Queen City.

In a decision signed by Presiding Judge Anacleto Debalucos of Regional Trial Court Branch 17 in Cebu City dated June 30, 2023, the court ruled that the mayor did have the power to remove the board, subject to the review and approval of the LWUA.

“Under the doctrine of implication, the power to appoint carries with it the power to remove except when such power to remove is expressly vested by law in an office of authority other than the appointing power,” the decision read.

In a letter by the late acting LWUA administrator Jeci Lapus to Labella dated October 1, 2019, Lapus said he had no objections to the removal of the MCWD board members and that it was within the bounds of the law consistent with the last sentence of Section 11 of Presidential Decree No. 198, as amended.

“Directors may be removed for cause only, subject to review and approval of the Administration [Local Water Utilities Administration],” the last sentence of Section 11 of Presidential Decree No. 198 read.

In January 2020, Labella appointed Daluz, Pato, and Francisco Malilong Jr. as the new members of the MCWD board, which was then approved by LWUA. 

Decision Mcwd vs. Labella by john.sitchon

Singing different tunes

On May 16, Rama presided over a meeting with the MCWD board of directors discussing plans to address water supply concerns during another El Niño season. As Daluz was not present during the meeting, Rama used this as justification to terminate the MCWD chairman from his position. 

In a letter dated May 18, Rama demanded that the directors recognize Pato as their new chairman, replacing Daluz. Despite this, Daluz would still continue his duties as the MCWD chairman as revealed in his statement on May 19.

On July 29, Rama would approve the city legal office’s (CLO) recommendation to dismiss Daluz along with MCWD directors Pato and Jodelyn May Seno. The recommendation was based on a complaint of the MCWD Employees Union against Daluz and the two directors.

However, it was revealed on August 17, that the LWUA had already responded to the CLO on July 3 about the investigation into the union’s complaint, stating that the Ombudsman had exclusive jurisdiction over the case.

On October 31, Rama appointed retired major general Feliciano, along with businessman Nelson Yuvallos and lawyer Aristotle Batuhan, to replace Daluz, Pato, and Seno, respectively.

Daluz, Pato, and Seno still remained as board members, pending formal communication about their removal as incumbent MCWD board members by LWUA. 

On November 3, Daluz showed Rappler a copy of a letter from the Office of the Government Corporate Counsel (OGCC) sent to LWUA Chairman Ronnie Ong on September 16. 

In that letter, Government Corporate Counsel Rogelio Quevedo said personnel action involving removal from office can only be validly and lawfully done by, or through, other government agencies, such as the Civil Service Commission (CSC) and the Office of the Ombudsman. 

Days later, on November 7, Rappler got hold of a copy of a letter from LWUA Administrator Vicente Homer Revil and legal department manager Roberto San Andres, addressing Cebu City Attorney Jerone Castillo about their request for issuance of a certificate of no objection relative to Rama’s approval of the CLO’s recommendation to remove and terminate Daluz, Pato, and Seno.

“Local authorities have no authority to remove the chairperson and members of the Board of Directors of a Water District,” the letter dated October 17 read.

Letter to Cebu Legal Office by john.sitchon

After the letter was spread, Amando Virgil Ligutan, a high-profile lawyer and legal counsel of the previous board fired by Labella, called out Daluz and the city mayor for “singing a different tune” in a press conference on November 8.

“The law is clear, the mayor cannot terminate. If your occupation of the position now is the termination of the previous board, have some delicadeza and think twice,” Ligutan said in a mix of English and Cebuano.

The legal counsel added that Rama did not even agree with Labella’s decision to fire the previous board based on a manifestation filed in court.

As of this writing, Ligutan said, they have a pending petition to reinstate the previous board at the Supreme Court.

A rift in the coalition

“I’ve lost my trust and confidence in the chairman [Daluz] but never was it a thing that I wanted him removed,” Rama told city hall employees during the flag ceremony on Monday, November 6.

For Daluz, Rama’s attempt to remove him was motivated by an alleged scheme to privatize MCWD and take out officials who aren’t “aligned [with] the mayor’s political interests.”

“This is an attack on the independence and autonomy of the water district,” Daluz told Rappler on November 3.

Regardless of their reasons, Vice Mayor Raymond Alvin Garcia told reporters on November 8 that the controversy has affected their parties’ alliance.

“The coalition between the Panaghiusa Party and Mayor Mike, it has really been affected,” Garcia said.

Garcia currently leads the Partido Kugi Uswag Sugbo (KUSUG) with his father Alvin, a former mayor of Cebu City. According to him, KUSUG’s relations with the two parties has not changed.

The Panaghiusa Party was founded by the late Nenita “Inday Nita” Cortes-Daluz, a broadcaster known for being a staunch critic of the Marcos Sr. administration and the MCWD chairman’s mother.

In early 2021, rumors spread on social media about KUSUG and Panaghiusa separating from their alliance with Rama’s Barug. These rumors were dispelled when the three parties renewed their alliance for the 2022 elections.

Garcia, who is acting mayor as Rama takes a month-long vacation in November, said that the law must prevail at the end of the day.

“For me, this controversy should be left to the courts to handle, if ever they will file it in the proper courts, but the law is very clear and it should be followed… now, on what that procedure would be, I leave that for you to discern,” Garcia concluded.

As of November 15, MCWD general manager Edgar Donoso and heads of the Association of MCWD Managers, MCWD Supervisors Association, MCWD Employees Union, and the Non-Regular Manpower Resources Association have signed a statement adopting a “status quo position,” still recognizing Daluz as part of the MCWD board.

“My position is that I want [Donoso] out… He does not carry my respect anymore,” Rama said on Cebu City’s teleradio portal, Sugbuanon Channel, on November 16. – Rappler.com