ENDING a dispute over rental rates, the Cebu City Government and the Metropolitan Cebu Water District (MCWD) signed a compromise and lease agreement on Monday, Nov. 25, 2024, regarding the use of an MCWD building currently serving as a City Hall satellite office.
City Government officials hailed the agreement as proof that diplomacy works.
MCWD also announced the availability of 20,000 new water connection slots for Cebu City households after securing permits to install new pipelines.
On Monday, Mayor Raymond Alvin Garcia and MCWD general manager Edgar Donoso inked the compromise and lease agreement, which allows the City Government to continue using the water district’s annex building across City Hall.
The deal, which contained the agreed rental rates, sets aside the previous disagreement on City Hall’s unpaid rentals since its occupation of the MCWD-owned building in 2022.
Compromise
Garcia said MCWD will no longer charge the City for all the back pays over the months, while the City Government will no longer seek compensation or remove all improvements made at the water district’s annex building.
“We made our calculations and the result is the values are almost the same,” said Garcia.
MCWD will charge the City Government a monthly rent of P419,067.03 to use the second floor of its annex building, which covers an area of at least 2,001 square meters.
Garcia said the offices on the first floor must be vacated and transferred to the second floor.
The City Hall has at least 11 offices currently occupying the satellite office.
The rental rate was set at P186.99 per square meter, in compliance with the Commission on Audit (COA) Circular 88-282A, or the Uniform Standards/Guidelines to Determine Reasonableness of the Terms and Rental Rates of Lease Contracts for Private Government Building/Space.
The City Hall has to pay two months’ rent from November to December 2024 (P838,134.16) plus one month’s advance rental (P419, 067.03) and two months’ security deposit (P838,134.16), accumulating to a total payment of P2,095,335.15 to MCWD.
In the 2023 Audit report, COA flagged the City’s P5.3 million expenditure on repairs for the satellite office, noting the absence of a formal lease agreement with MCWD.
Both parties were unable to sign a lease agreement due to contrasting proposed rates.
MCWD initially set the monthly lease rate at P700,000, while the City came up with a counterproposal of P200,000.
The annex building currently houses 10 city offices, including the Division for the Welfare of the Urban Poor, the City Hospitalization Assistance and Medicines Program and the City Agriculture Office. The building is located at the corner of M.C. Briones St. and P. Burgos St., across from the City Hall executive building.
New water connection
Meanwhile, Donoso said the MCWD can now accommodate 20,000 Cebu City households for water connection, following the City Government’s approval of excavation and digging permits for new pipelines.
Garcia added that the City Government will assist MCWD in identifying new applicants.
Donoso said that by the end of December, MCWD will provide water to several households in the mountain barangays, with the rest expected by January or February.
He added that the City Government plans to lead the construction of a rainwater catchment or detention pond at the MCWD’s property in Barangay Talamban seeking to resolve the flooding incident in the Banilad and Talamban areas. / EHP