WHAT JUST HAPPENED. Thursday, August 17, 2023, Acting City Attorney cum special projects assistant to the mayor Jerone Castillo and City Administrator Collin Rosell announced at a City Hall press-con the revocation of appointment and removal from office of MCWD Chairman Jose Daluz III and two other directors. The legal ground: mayor’s loss of confidence in them.
Notices of termination dated July 29, 2023 were served on Daluz and members Miguel C. Pato and Jodelyn May G. Seno; must have been served a day or two before Mayor Rama left for the US on August 15.
Wait, wasn’t Daluz’s firing announced before after he was reportedly replaced as chairman by Mayor Michael Rama?
Earlier, on May 18, 2023, Mayor Mike’s two key assistants -- yes, also Atty. Jerone and Atty. Collin -- also announced the replacement of Daluz as chairman and the installation of vice chairman Miguel Pato in Daluz’s place. That didn’t fly. The MCWD board, including Pato, didn’t unseat Daluz as the mayor had expected, with the chairman loudly protesting that only the board could replace him.
WHAT PROMPTED CHANGE OF TACK. City Hall watchers first thought that it was the Regional Trial Court ruling on the earlier dismissal of Augustus Pe and two other MCWD directors by then mayor Edgardo Labella Jr. Atty. Castillo in the August 17 press-con harped on the part of the RTC ruling about the right of the mayor to fire being implied from his power to appoint.
But then came the Facebook post of Cebu Updates Friday, August 18, purportedly with a letter from Administrator Homer B. Revil, to Mayor Rama saying the ombudsman, not LWUA, has “exclusive jurisdiction over the complaint.” That must be so because the report that LWUA got was an investigation on the complaint of former officers of the MCWD employees union, not a dismissal that LWUA can legally review.
The LWUA letter, which didn’t “basura” or dump the report but tossed the case to the ombudsman, was dated July 3, 2023, before the mayor’s order of dismissal, which was approved July 29 before Rama left for his trip abroad.
URGENT QUESTION: WHEN TERMINATION TAKES EFFECT. Earlier, Daluz told me in an interview he’d step down once LWUA would approve his dismissal from the board. Atty. Castillo in Thursday’s press-con said the termination order takes effect until “to” or disapproved by LWUA.
The positions clash: Daluz argues for status quo: he keeps his post until LWUA decides otherwise. The mayor’s lawyers contend the order takes effect at once until LWUA decides otherwise. What does the law say?
The law is not clear although the law cited by MCWD in its statement (Section 11 of Presidential Decree #198, as amended by PD #768) says “directors may only be removed for cause, subject to review and approval” by LWUA. The mayor’s lawyers may argue that LWUA approval comes after the termination because of the word “review.” Daluz’s lawyers may argue that review of the mayor’s action may be done by LWUA before the order of dismissal takes effect. Depends on how LWUA interprets the mandate of “review and approval.”
As to the effect of the mayor’s order to remove three directors, an MCWD source told me Friday, August 18, the notice was served the day after its board meeting last Wednesday and thus the board couldn’t promptly respond to it as a group. The issue may have to wait for the next meeting Wednesday, August 23.
On MCWD operations, Atty. Rosell said management is handled by a general manager and his staff. The board’s job is limited to policies and won’t be immediately affected by the banishing of three directors. MCWD, in its statement, gave the usual line of fulfilling its “mandate of providing safe, clean and affordable water,” confirmed by its publicist that it is business as usual in the water district’s operations.
Except for the mayor’s order taking out or down its chairman and two directors, the MCWD board has no life-altering decision to make for the water district. When asked by a City Hall reporter about the terminated directors’ replacement, Atty. Castillo said they will abide by the process.
IMPOSING, NOT RECOMMENDING, SANCTION. The decision of the Cebu Regional Trial Court, promulgated June 30, 2023 but announced July 11, 2023 -- in a civil case involving three MCW directors (namely, Augustus Pe Jr., Ralph Sevilla and Cecilia Adlawan), who were removed by then mayor Labella before the end of their term -- legally supported Mayor Mike’s shift in strategy.
But LWUA’s rejection of the CLO report obviously was the clincher. The RTC ruled that then mayor Labella had the power to dismiss the directors because the power to appoint “carries with it the power to remove or discipline.” But LWUA said in effect, not our case, this is not a case of dismissal.
Mayor Mike expanded the initial offensive: From mere loss of the chairmanship, Daluz lost his member’s seat as well. Pato and Seno, not included in the initial shooting target, were also dismissed, apparently for taking Daluz’s side. More crucial though: the act of firing brought the case to LWUA’s grounds as this time, the mayor is no longer recommending sanctions, he had imposed the sanctions.
Earlier, the mayor required the board members to explain the complaints filed with the ombudsman by the former MCWD employees’ union officers and then ordered the City Legal Office (CLO) to investigate the irregularities alleged in the complaints. The result: the CLO recommended termination but the mayor merely endorsed the findings to the ombudsman and LWUA.
An Explainer of July 15, 2023 noted that “Rama could’ve dismissed outright Daluz and company without going through the ‘recommendation’ route.” As Labella did in the Jun Pe et al case, Rama “could’ve just sent the dismissal to LWUA for review.”
It’s clear that Mayor Rama started with “no legal formalities” in getting rid of Daluz. When the informal placement of Pato didn’t work, followed by a “survey” among the MCWD employees, the mayor’s lawyers went through the “due process” protocol, (a) requiring explanation from the three targeted directors (which only Daluz complied with) and (b) sending the result of investigation to the ombudsman and LWUA.
COLLATERAL ISSUE OF PRIVATIZATION was touched upon by Atty. Castillo but his blanket denial may have failed to erase public doubt after Daluz raised the alleged motive of the mayor in having the former councilor and Barug campaign manager removed as chairman, then as member. The mayor favors privatization of MCWD; Daluz is generally opposed to it. Not the issue, said Castillo, they should’ve just focused on the alleged irregularities cited by the complaint against them.
Watch if Daluz could later crow, “I told you so.”
BOOSTING RAMA’S THRUST to kick out Daluz, on the aspect of legal procedure, is that Mayor Mike, unlike his predecessor, gave Daluz and company due process, or the semblance of it. In the Jun Pe case, Labella didn’t give due process, the RTC ruling said, but that absence was remedied by LWUA. The RTC disagreed with Labella’s contention that the directors weren’t entitled to notice and hearing prior to removal, branding it as illegal, which however was “legitimized” by LWUA. LWUA gave Pe and company “opportunity to explain their side” and “refute the accusations against them.”
LWUA may or may no longer require that. There’s no published procedure on how LWUA conducts its review of a dismissal of directors of a local water district but it’s expected that it will determine whether the legal requirements are met, especially on just cause and due process. If Daluz had given LWUA his side, besides answering the City Legal Office, it may also consider the chairman’s reply -- or not and give the mayor the benefit of the doubt, that Mayor Mike is just acting in the city’s better interest.