Building rental of P374k per month: City government inks pact with MCWD

CEBU, Philippines — Cebu City Mayor Raymond Alvin Garcia is set to seal the lease agreement for the Metro Cebu Water District (MCWD)-owned City Hall Satellite Office building, which was once the subject of a dispute during the previous administration.

This came after the City Council, during its regular session a week ago, authorized him to sign the lease agreement on behalf of the city. With the agreement, the city government and MCWD will share in the use of the Satellite Office, which was also the old Prince Hypermart edifice.

“Once it is already available, and I have been given authority, then ako na nang ipirma dayon uy kay aron hapsay among pagpuyo sa pila ka offices,” said Garcia.

Currently, the building, located close to the MCWD main building and just a stone’s throw away from City Hall, houses the city government’s Task Force Gubat sa Baha; City Agriculture Department; Cebu City Environment and Natural Resources Office, Cebu City Nutrition Council; Sugboanon Channel, the city’s broadcasting arm, among others.

As to the rental amount, the mayor said it is based on what the Commission on Audit (COA) suggested. He also said that the compromise agreement with MCWD includes waiving the unpaid rent for the previous year, and the one-year contract of lease.

The board resolution transmitted by the MCWD before the City Council stipulated an agreement to lease 2,001 square meters of the building, encompassing the 2nd floor area, including the canopy, balcony, and stairs going to the second floor.

The agreement also includes MCWD utilizing the ground floor.

The rental fee will be at P186.99 per square meter per month, or P374,166.99 per month, with a term of one year starting from the execution of the lease without a provision for renewal.

Previously, the building was among the subjects of a bitter disagreement between the MCWD management and the administration of then mayor Michael Rama, who refused the heed the water utility firm’s notice to vacate.

The city, through the City Legal Office and in a Feb. 20, 2024 letter to General Manager Edgar Donoso, told MCWD that it is in “lawful possession of the property” and would not obey its demands.

State auditors also flagged the P5 million that the city government spent to renovate the American-period without a formal lease agreement with MCWD.

The COA noted that the repair was completed in 2023 and City Hall offices immediately occupied the building even if the city did not have any lease agreement with MCWD.

Atty. Jose Daluz III, the former chairman of the MCWD Board of Directors, mentioned that they consented to the city's “donation” of P5 million for renovations due to the city government's outstanding rental fees owed to MCWD.

In its annual audit report, the COA recommended that the city engage in a dialogue with MCWD to resolve the disagreements over the monthly rental rate, using the formula outlined in the Government Procurement Reform Act.

MCWD wanted a rental fee of P700,000 a month, but the city government only offered to pay P200,000 per month.— (FREEMAN)