MUCH has been said about the LWUA Board Resolution No. 34-2024 which purports to authorize the LWUA administrator to appoint and interim board of directors and general manager of the Cagayan de Oro Water District.
To my mind, the question to be asked is, "Is LWUA right?" My humble opinion is NO.
Under LWUA's Charter, Title III of PD 198, it is a specialized lending institution for local water utilities, among other functions. As such, it may extend loans to qualified water districts or utilities for the latter's operational requirements. Through this charter, the LWUA also assumes the role of a regulator for water utilities.
Can the LWUA take over the policy-making and operating functions of a water utility? The answer is a big YES. But, let us dissect the grounds under which this power of the LWUA may be exercised.
Under what conditions therefore can the LWUA, by a resolution of its board of trustees, appoint an interim board of directors and general manager of a water utility? The LWUA charter itself provides the answer.
As opined by the Office of the Government Corporate Counsel in Opinion No. 046-2024 involving a water district in the Visayas, "(t)he LWUA law provides for a single instance when LWUA may take over or intervene in the management and operations of a local water district, including the policy-making of the district, and that is when the district is in default of its loan obligations to LWUA" not to any other entity.
LWUA's Resolution No. 34 does not mention this only ground for a take over or intervention. If the copy I got hold of is authentic, the LWUA resolution merely states that the focus of the intervention shall be:
- Solutions to the water supply situation in CDO including the implementation of a viable NRW program.
- Operation of the entire facilities of the COWD.
- Addressing any irregularity and problem in the accounts of the COWD and its obligations to LWUA.
- Implementing other measures that will address all violations and causes of default.
The resolution does not mention that the COWD is in default in its loan obligations to LWUA should the it be indebted to the latter. The resolution is but a blatant violation of the right to due process which protects any person from deprivation of its property.
Therefore, the act of the LWUA intervening in the management and operation of the COWD without any established basis may be considered ultra vires, or in excess of its powers, authority, or functions.
