THE Cebu City Government has been utilizing and occupying a building owned by the Metropolitan Cebu Water District (MCWD) located across the Cebu City Hall for more than five months.
However, since both parties have yet to agree on the lease rates, the City has not paid any rent, according to MCWD board of directors chairman Jose Daluz III.
If an agreement is not reached by the end of January, Daluz said they may be forced to send a demand letter to the City to vacate the building.
“No payment yet. We will remove them already,” Daluz told SunStar Cebu on Sunday, Jan. 7, 2024.
He assured that they will follow the legal process in removing the City Hall departments that are occupying the building.
According to the City’s Public Information Office Facebook page, the City opened a satellite office at the MCWD-owned building on July 21, 2023.
In earlier reports of SunStar Cebu, City Administrator Collin Rosell said all offices under the executive department that were housed in the legislative building, but are not policy-determining offices, would be transferred to the satellite office.
These included the Division for the Welfare of the Urban Poor and the City Hospitalization Assistance Management Program, among others.
In a report published by SunStar Cebu last August, the MCWD proposed a monthly rental rate of P700,000, a far cry from the City’s proposal of P200,000.
The MCWD earlier said they came up with the amount based on the standard set by the Commission on Audit Circular 88-282-A, or the Uniform Standards/Guidelines to Determine the Reasonableness of the Terms and Rental Rates of Lease Contracts for Private or Government Buildings/Spaces.
Daluz said there were ongoing talks up to last December to come up with an agreement on lease rates, deposits and other lease terms, but to no avail.
“I think it’s futile because the price, deposits and other term, until now we cannot agree so it’s better to remove them,” Daluz said on Sunday, referring to the negotiations.
Rosell, in a phone interview on Sunday, said any demands or transactions with the City should be put into writing, considering the City will be using the public’s money to pay MCWD.
Rosell said that if there is an ongoing negotiation between the two government entities, the matter should then be settled by representatives of both parties, and not through a media interview.
“If that’s about payment. I’d like to quote certain provisions of the law, ‘no demand, no delays.’ So it should be in writing, especially that’s not our money, it’s the public’s money,” he said.
He said “it is the right time to finalize whatever needs to be finalized,” but he did not elaborate.
MCWD, in an earlier statement, said it made three written follow-ups to the City dated June 2, June 13 and June 23.
MCWD said the City responded on July 5 with lawyers Luigine Christi Chan and Lyndon Bernardo Basan stating that “the terms and conditions in the Draft Contract of Lease are in accordance with the law, morals, public policy and good customs.”
However, MCWD said it received an email from the mayor’s office on July 24 containing the City’s counterproposal of the P200,000 rental rate made through lawyer John Michael Lequigan.
The MCWD-owned building was occupied by a retailer for 15 years. When the latter’s contract expired in September 2021, MCWD did not renew it.
The management of the water district intended to repurpose the building and use a portion for customer care and teller offices, but decided not to implement any refurbishing works since the contract of the retail store had a stipulation that it would restore the building.
Last Aug. 11, Jundel Bontuyan filed criminal and administrative complaints before the Office of the Ombudsman against Mayor Michael Rama, Rosell, Department of General Services head Rolando Ardosa and Local School Board officer-in-charge Kristian Hassamal over the City Hall’s use of MCWD-owned building.
Bontuyan, manager of the Cebu City Sports Center during the time of the late mayor Edgardo Labella, accused them of wasting public funds by renovating the MCWD-owned building despite the lack of a contract.
The complainant said city officials violated Section 41 of Presidential Decree 447, or the Decree of Local Fiscal Administration, as well as Republic Act 9184, or the Government Procurement Reform Act.
As for Daluz, he has been at odd with City Hall since Mayor Rama moved for his ouster from MCWD last May.
Rama appointed retired military general Melquiades Feliciano, lawyer Aristotle Batuhan and businessman Nelson Yuvallos last Oct. 31 to replace Daluz, Miguelito Pato and Jodelyn May Seno.
The Rama-appointed board members then elected Feliciano to be their chairman, hence replacing Daluz.
Daluz, Pato and Seno have since refused to step down from the MCWD board.