TAKEOVER DONE? LWUA: YES; MCWD: WE’RE RESISTING. MCWD, in a memorandum signed by Assistant Manager Pia May Barido in GM Edgar Donoso’s name last Friday, March 15, 2024 -- the same day the LWUA takeover order was issued and served -- told Metro Cebu water district employees that LWUA’s move was merely “an intention to intervene, rather than a valid and legal order implemented.” The same memo told employees and the public the Daluz board was still the “legitimate and recognized board.”
LWUA has flatly disagreed with that. LWUA considers the takeover as accomplished and in place while MCWD considers the LWUA move a plan, “an intention.” The interim board also issued a memo to MCWD personnel, rejecting the legitimacy of the Daluz board and telling them to follow orders only from the said LWUA-created temporary board.
I asked MCWD public information officer Minerva Gerodias that same Monday: “Have the interim directors been installed and started their job?” No answer. And then on Wednesday, March 17, I asked again for the situation on the takeover. Minerva’s sum-up, which came along with a press release: “The situation is we are resisting the legality of the takeover.”
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QUESTION OF LEGALITY the MCWD workers are using to “resist” the takeover was anticipated by the board of trustees. The legal issues are high up on Page 1 of the 15-page resolution the LWUA board of trustees approved on September 28, 2023. Gerodias said, citing the MCWD press release, its primary legal objections are: (1) lack of due process, not having been given “prior notice” before the March 15 order; and (2) having only one legal reason for a takeover -- default on its loan.
On judicial process, LWUA says in Resolution No. 35 that “MCWD board and others were given audience various times as evidenced by their visits to LWUA chairman’s office, administrator’s office and legal department.” In those calls and meetings, they discussed, among others, the situation in Cebu, desalination projects, requests for additional loans, and a 70 percent water rate increase.
LWUA said it also considered the findings of the Commission on Audit, the City Government, and the OGCC regarding uncompleted and under-documented projects and increasing levels of non-revenue water which has caused losses in millions of pesos. LWUA can declare default not just because of actual failure to pay the loan but for the threat of not being able to pay in the future. LWUA’s mandate includes looking after the corporate health of local water districts so they can continue serving safe, clean, and reasonably priced water.
In Thursday’s presscon, Salonga found it “unusual” for MCWD to want LWUA to ask for permission before it can take regulatory action against the local water district. And for resisting investigation into matters flagged by COA and cited by the local government, “ka OA (over-acting) naman,” reporters quoted Salonga.”
Regarding default, MCWD may have not known or has forgotten the law: (1) Default may be declared, not just for non-payment of amortization, but also for any other violation of any promise, term, or condition in the contract of MCWD’s loan-grant; (2) LWUA may declare a default of a local water district and “without judicial process take over and operate the facilities of properties of the district.”
MCWD HAS NO COPY OF RESOLUTION NO. 35. Daluz said so in an interview with Jason Monteclar on Monday, March 15. No copy of the resolution was attached to the letter. PIO Gerodias complained to me Wednesday, March 17: “Why man dili sila mohatag sa Resolution 35 namo. Our Legal (Department) checked online, dili available. Also, if there are violations sa MCWD, why man outright takeover and no notices issued.”
A copy must have been finally given when the interim board, with the LWUA official overseeing the installation, met with MCWD managers. That was probably sorted out. Copies of Resolution No. 35 were circulating in Cebu City weeks before the LWUA team’s arrival. To be sure, the mayor’s camp had its copy. How could Daluz’s camp have done less, given the cited several visits of the board to LWUA offices?
What MCWD must have also been told but the Cebu public still wouldn’t know is how Resolution No. 35 was “hijacked” last September 2023 at the secretariat in the LWUA administrator’s office to abort its implementation and, more relevant now, is how it was revived and officially decided to be implemented finally.
Should the takeover have surprised MCWD? Not after the publicity and noise over it and the change of LWUA administrator last February. Not immediately believable that the mayor’s camp knew about it and Daluz’s camp didn’t, when the LWUA administrator at the time, who was the only trustee who opposed it, reportedly stopped the resolution on its track, which then benefited the Daluz board.
MCWD WAYS OF RESISTING. MCWD’s executive committee must have given LWUA’s team in Cebu the position of GM Donoso and company, aside from its formal letter to LWUA’s board of trustees, namely: It is withholding its compliance with the LWUA order until it receives the opinion of OGCC, the national government’s lawyers. But it has already taken the position that the takeover is illegal and without due process.
The immediate problem is: Will MCWD managers follow orders from the interim board? Is it MCWD -- the GM, no higher -- that decides when MCWD directors are considered suspended so that an inquiry into board transactions can be made?
Specific case: The interim board just called out Daluz’s alleged use of MCWD’s social for political activity. Could Donoso be sanctioned for the violation? Could the GM not give the same favor to Daluz or some other director? Would the interim board call the shots at MCWD during the half-year period of suspension?
WHAT EXACTLY IS MCWD AUTONOMY? The action of MCWD managers, supervisors, and rank-and-file employees would make the public believe that the workers’ groups decide when to recognize national authority. Is that how the bureaucracy at MCWD works? Its employees can decide when and when not to follow LWUA, and when to turn on or off recognition of LWUA’s regulatory power, like opening or closing a faucet?
Presidential Decree No. 198, as amended, must not have intended that. Or does the law “protect” a local water district against its regulating agency the same way it keeps local politicians at bay? The Cebu Regional Trial Court ruling against three ousted MCWD directors appointed by the late mayor Edgardo Labella doesn’t agree on total exclusion of the city mayor but the Supreme Court, where the case is pending, may interpret it differently. Imagine though a situation where a local water district decides when to respect the authority of its regulator.
POLITICS IN THE DISPUTE. Daluz -- a former city councilor and campaign manager of Mayor Michael Rama’s Partido Barug -- and other opposers to the mayor’s “meddling” in MCWD affairs have raised the issue of politicking by Mayor Rama. He’s running for reelection in 2025 but his most likely rival is Daluz, who has confirmed the plan and his preparations for it.
LWUA, probably for the first time, raised the matter of politics against Daluz in the MCWD controversy. LWUA has required GM Donoso to explain the “unauthorized and illegal use” of MCWD’s social hall for a Daluz political activity, reprimanding him on what it sees as “propagandizing and politicking,” along with “misinformation” on the LWUA takeover issue.
Irony is not lost on the purpose of granting autonomy to water districts -- to keep out politics and politicians from their operations districts -- and yet still some, like MCWD, are deeply mired in it.
Mayor Rama is going to be locked in combat with Daluz for the seat of Cebu City chief executive. Shut out incumbent politicians from MCWD but keep returnee politicians’ access to MCWD resources? That must not be the result intended by the law that seeks to promote autonomy among local water districts.