Autonomy of water districts

Tension continues to mount, both at the Local Water Utilities Administration (LWUA) and the Metro Cebu Water District (MCWD), after LWUA’s intervention and blessing were sought to validate the change of leadership made at the water district.

At the MWCD, there is a leadership crisis, with chairman Jose Daluz III, who was removed together with two other board members by Cebu City Mayor Michael Rama, refusing to vacate his post, even as Mel Feliciano, who was appointed by Rama to replace Daluz, was already making plans to solve Cebu’s water supply issues.

Rama claims that the mayor has the authority to appoint and remove members of the MWCD board. He cited lack of confidence and alleged graft and corruption under Daluz’s term as basis for the removal of Daluz and two other board members and the appointment of new ones.

On the other hand, Daluz alleges that their removal was improper since it did not have the express approval of LWUA and that it was politically motivated. He also claims that the mayor’s action is an attack on the independence and autonomy of water districts from the local government units.

Meanwhile, at the LWUA, chairman Ronnie Ong allegedly included in the agenda of the LWUA board meeting on Sept. 28 Resolution 35 for LWUA intervention in the MCWD leadership crisis and providing an interim board for the water district. LWUA administrator Vicente Homer Revil manifested his reservations since the proposed resolution was only submitted during the meeting itself. According to Revil, copies of board materials have to be submitted five days in advance before they become part of the agenda and there was no prior legal and technical review by LWUA management on the proposed takeover of the MCWD.

While Ong was abroad, the resolution was reportedly routed for signature by members of the board but assistant board secretary Danilo Beleno Jr., when alerted about the alleged forged signature of board secretary Stephanie Clare Rojas among others, and other circumstances that raised suspicion, recalled the documents.

Upon his arrival from Italy, Ong asked Beleno what happened and the latter claimed that there was an integrity issue because of forgery in the resolution. Insiders say Ong got very angry at Beleno when the latter pulled out the document without Ong’s consent and physically assaulted him. After reporting the incident to LWUA’s HR department, Beleno was reportedly brought to a hospital where a medical report was prepared and the incident reported to the police. A photo of Beleno’s huge red mark on his left chest was shown to this writer.

But Ong claims he never touched Beleno and that he merely raised his voice and probably berated the young lawyer due to Beleno’s suspicious actions.

Meanwhile, the Office of the Government Corporate Counsel (OCGG), in response to Ong’s request for opinion on LWUA’s power and authority to intervene in the operations of erring and/or problematic water districts, categorically stated that there is nothing in PD 198 as amended and jurisprudence that expressly or specifically empowers LWUA to enforce a takeover of the board of water districts.

LWUA was created by virtue of PD 198 or the Provincial Water Utilities Act as a government owned and controlled corporation with the power to, among others, lend to water districts, monitor and evaluate local water standards, and promote and oversee the development of water supply systems in provincial cities and municipalities outside of Metro Manila.

PD 198 likewise provides that water districts are created by virtue of a resolution of the city, municipality or provincial legislative bodies and that members of the board of a water district are to be appointed by the governor or the mayor of a city or municipality. Water district directors, who have a six-year term, may be removed for cause only, the law also stated.

According to Government Corporate Counsel Rogelio Quevedo, LWUA’s power of intervention in water districts is limited to the management and operations of water districts for the purpose of ensuring that they are able to return to and sustain financial viability and the capacity to meet repayment obligations to LWUA and that there is nothing in the law that would authorize LWUA to cause the removal of board members of water districts.

He said that aside from the fact that the power to appoint board members of water districts is generally not granted to LWUA under PD 98, personnel actions involving removal from office can only be validly and lawfully done by government agencies such as the Civil Service Commission and the Office of the Ombudsman and with just cause and observance of due process.

Based on the OGCC opinion, LWUA can only intervene if the water district is indebted and unable to meet its financial obligations to LWUA or if there is a valid and lawful from either the CSC or the Ombudsman.

Thus, while the power to appoint members of the board of water districts is with the local government head, the latter and LWUA have no authority to remove them.

In an attempt to have a legal basis for removing Daluz and the two other board members and appointing their replacements, the Cebu City Legal Office had previously asked LWUA to issue a certificate of no objection to Rama’s approval of the City Legal Office’s recommendation to remove and terminate the MCWD chair and two other board members.

Just recently, LWUA administrator Revil and legal department manager Roberto San Andres in a letter to Cebu City Attorney Jerome Castillo responded by stating that local executives have no authority to remove the chairperson and members of the board of a water district. Thus, there is no legal basis to issue the requested certificate, they said.

Revil and San Andres cited PD 198 Section 7 which states that once a water district is created by a local government unit, such LGU concerned shall lose ownership, supervision and control or any right whatsoever over the water district and pursuant to this provision, a local chief executive does not have authority to remove the chairperson and member of the board of a water district.

They likewise cited DILG Memorandum Circular 2016-146 reminding local authorities that water districts once formed are not under the jurisdiction of any political subdivision and that these water districts are autonomous agencies independent of local governments. The DILG issued the circular in response to reports that some local government officials continue to exercise control and supervision over water districts.

Because of this, the ousted members of the MCWD board were actually right when they said that water districts are independent from the LGUs and that Mayor Rama had no right to remove them from office nor to appoint new board members when there is no vacancy. Daluz has said that with the favorable LWUA letter, he would not step down from the board but is willing to leave his position as chairman until the end of his term on December 2024.

But according to Rama, he would have allowed Daluz to finish his term had his former ally agreed to step down as chairman.

Meanwhile, an investigation is reportedly ongoing at the LWUA to find out why Resolution 35 was being routed for signature allegedly by the private staff of Ong while the chairman was abroad, including who forged the signatures of both Ong and the corporate board secretary.

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