2011 R - 013 - EXPRESSING STRONG AND VIGOROUS OBJECTION TO THE ANNUAL WATER TARIFF ADJUSTMENT TO BE IMPLEMENTED BY THE SUBICWATER AND SEWAGE CO. INC.

EXCERPTS FROM THE MINUTES OF THE REGULAR SESSION OF THE SANGGUNIANG PANLUNGSOD OF OLONGAPO, HELD ON MARCH 16, 2011 AT THE CITY HALL.

PRESENT:

Hon. Rolen C. Paulino -- City Vice-Mayor & Presiding Officer

Hon. Rodel S. Cerezo ----- City Councilor

Hon. Eyrma Yvette Marzan-Estrella- City Councilor

Hon. Aquilino Y. Cortez, Jr. --City Councilor

Hon. James G. delos Reyes -- City Councilor

Hon. Gina Gulanes-Perez---- City Councilor

Hon. Elena C. Dabu ------ City Councilor

Hon. Eduardo J. Piano --- City Councilor

Hon. Noel Y. Atienza --- City Councilor

Hon. Sarah Lugerna Lipumano-Garcia-- City Councilor

Hon. Carlito A. Baloy --- President, Liga ng mga Barangay

Hon. Dolly Mae M. Ramos -- SK Federation President

ABSENT:

Hon. Edna A. Elane --- City Councilor

RESOLUTION NO. 13

(Series of 2011)

A RESOLUTION EXPRESSING STRONG AND VIGOROUS OBJECTION TO THE ANNUAL WATER TARIFF ADJUSTMENT TO BE IMPLEMENTED BY THE SUBICWATER AND SEWAGE CO. INC. RECOMMENDED BY THE SUBIC BAY WATER REGULATORY BOARD AND APPROVED BY THE SUBIC BAY METROPOLITAN AUTHORITY

WHEREAS, Subicwater and Sewage, Co. Inc. is in charge for the operation, maintenance, supervision of the water supply system for the Freeport and City of Olongapo;

WHEREAS, Subic Bay Water Regulatory Board empowered to receive, hear and approve water tariff adjustment applied for by the Subicwater and Sewage Co. Inc in turn recommended for approval to the Subic Bay Metropolitan Authority;

WHEREAS, Subicwater and Sewage Co. Inc forged a Franchise Agreement with the then Chairman Richard J. Gordon which was thereafter amended which states among others the following relevant provisions thereof:

4(b) SUBICWATER shall exclusively operate and maintain all the Existing and New Facilities in an efficient and safe manner. The peroid for the operation and maintenance by SUBICWATER of existing facilities shall commence from the effective of the rectification of Agreement and continue for the duration of this Agreement. The period for the operation and maintenance by the SUBICWATER of the New Facilities shall commence from the date of completion of each art of the New Facilities and continue for the duration of this Agreement.”

4© The operation and maintenance required by Section 4 (b) of this Agreement shall be carried out by SUBICWATER at its own expense, if SUBICWATER shall fail to operate and/or maintain the Existing and New Facilities as required by Section 4(b), SBMA shall notify SUBICWATER in writing of such failure and that SUBICWATER shall take such immediate action as it is reasonably able to take to commence rectification and shall inform SBMA from time to time of the status of such rectification. If SUBICWATER shall not commence action to remedy such failure within a period of sixty (60) days and to complete such action to a schedule agreed with SBMA, SBMA shall without prejudice to any other rights it may be entitled to carry out the required operation and maintenance work by its own workmen or by other contractors and other charges incurred in connection therewith shall be payable by SUBICWATER. If SBMA carries out such works and charges SUBICWATER accordingly, shall not be considered in breach of this Agreement giving rise to a right of termination.

Copy of the Franchise Agreement is attached herewith as Attachment “A” and made an integral part of the present complaint:

WHEREAS, Subicwater and Sewage Co., Inc. has implemented tariff rate increases 28% on 2003, 15% for 2004 and 9% for 2007 a total of 52.5% tariff rate increase since 2003 approximately amounting amounting to One Hundred Thirty-Five Million Pesos (PhP135,000,000.00);

WHEREAS, the purpose raised by the Subicwater and Sewage Co. Inc for the water tariff increases was for the expansion and improvement of existing facilities;

WHEREAS, during the public hearing on June 14, 2007 held at Rizal Triangle, West Bajac-Bajac, Olongapo City, representative from Subicwater and Sewage Co. Inc expressly mentioned that the 52.5% water tariff increase was sufficient enough to cover any improvements and expansion to be undertaken by the latter;

WHEREAS, on May 19, 2008 defendant Subicwater and Sewage Co. Inc filed a petition for water tariff review and adjustment with Subic Bay Water Regulatory Board proposing a water rate increase as follows:

WHEREAS, however, on account of the pendency of the deliberation of the 2nd amendment of the Franchise Agreement (Attachment “A”), the review supposedly to be made by Subic Bay Water Regulatory Board on the petition of Subicwater and Sewage Co. Inc. was held in abeyance;

WHEREAS, on October 24, 2008 Subicwater and Sewage Co. Inc formally withdrew its Petition Dated May 19, 2008 and instead submitted another petition to set the initial water tariffs with an adjustment of 10.5% in all categories of water rates and an inflation factor of 91.3% for the next two years;

WHEREAS, Subicwater and Sewage Co. Inc. issued a Notice of Public Consultation to be held at Olongapo City Convention Center on November 3 and 5, 2008 both at 2:00 in the afternoon. However, despite the irregularities in the conduct of public hearings Subic Bay Water Regulatory Board recommended for approval the Petition for Water Tariff Adjustment of 6.33% in all categories of the water supply rates. The recommendation for approval of the water tariff adjustment made by the Subic Water Regulatory Board was approved by the Subic Bay Metropolitan Authority.

WHEREAS, Subicwater and Sewage Co. Inc. in clear violation of the Franchise Agreement as stated in the preceding paragraphs made and filed the Petition for water Tariff Adjustment on several occasions and recommended for approval by the Subic Bay Water Regulatory Board had an adverse effect on the consuming public when in fact and in truth the former shall exclusively shoulder the cost of improvements and renovation of existing facilities and to shift the burden on the consuming public;

WHEREAS, water has become one of the basic necessities which the oublic should not be deprived access thereof;

WHEREAS, the consuming public has experienced the worst economic burden who cannot afford to pay high cost for their basic needs;

WHEREAS, as part of Local Government Unit who is supposed to address the plight of its constituents must take concrete action to eradicate if not reduce the effect of the successive water tariff increases;

NOW THEREFORE, with the unanimous accord of the Members of the Sangguniang Panlungsod present,

RESOLVED AS IT IS HEREBY RESOLVED, by the Sangguniang Panlungsod in session assembled, to express, as it hereby expresses strong and vigorous objection to the annual water tariff adjustment to be implemented by the Subic water and Sewage Co. Inc. recommended by the Subic Bay Water Regulatory Board and approved by the Subic Bay Metropolitan Authority.

APPROVED UNANIMOUSLY, March 16, 2011.