R.A. 6234

REPUBLIC ACT No. 6234

AN ACT CREATING THE METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM AND DISSOLVING THE NATIONAL WATERWORKS AND SEWERAGE AUTHORITY; AND FOR OTHER PURPOSES.

Section 1. Declaration of Policy. The proper operation and maintenance of waterworks system to insure an uninterrupted and adequate supply and distribution of potable water for domestic and other purposes and the proper operation and maintenance of sewerage systems are essential public services because they are vital to public health and safety. It is therefore declared a policy of the state that the establishment, operation and maintenance of such systems must be supervised and controlled by the state.

Section 2. Creation, Name, Domicile and Jurisdiction.

Section 3. Attributes, Powers and Functions. The System shall have the following attributes, powers and functions:

Section 4. The Board of Trustees, composition; qualification; appointment; tenure. The corporate powers and functions of the System shall be vested in and exercised by a Board of Trustees composed of a Chairman, the General Manager as ex-officio Vice-Chairman and three members, one of whom shall be nominated by the Labor Union representing the majority of the rank and file of the employees in the System. They shall possess any one or a combination of the following qualifications; duly licensed professional of recognized competence in civil engineering and/or sanitary engineering, business management and finance, and law, or recognized labor leader within the ranks with sufficient training, particularly in the field of labor-management relations or corporate practice, all of good moral character with at least five (5) years of actual and distinguished experience in their respective fields of expertise.

The Chairman and the three members of the Board shall be appointed by the President of the Philippines with the consent of the Commission on Appointments. The Chairman and the three members of the Board shall hold office for a period of three years, except that the members initially appointed shall serve, as designated in their appointments, one for one year, one for two years and one for three years: Provided, That, any person chosen to fill a vacancy shall serve only for the unexpired term of the member whom he succeeds: Provided, further, That the term of the member nominated by labor maybe terminated sooner than as above provided if so requested by the nominating union in which case the President of the Philippines shall appoint a replacement who shall similarly be nominated by said union.

Section 5. The Suspension and Removal of Trustees. Any member of the Board of Trustees may for cause be suspended or removed by the President of the Philippines upon the recommendation of the Secretary of Justice after due notice and hearing.

Section 6. Meetings of the Board; quorum, required votes; per diems. The Board of Trustees shall, immediately after its organization, adopt rules and procedures in the conduct of its meetings. A majority of the Board shall constitute a quorum for the transaction of business and the affirmative vote of three shall be required for the adoption of any action. For actual attendance at meetings, the Chairman and the three members, shall each receive a per diem of one hundred pesos but in no case shall any one receive more than four hundred pesos a month.

Section 7. Other Officers and Employees; their appointment; qualifications; compensations and tenure. The management of the System shall be vested in the General Manager. He shall be assisted by four Assistant General Managers one for Engineering, one for Operation, one for Finance and Administration, one for Commercial and Customers Service, and the heads of departments. Said officials shall perform managerial and/or confidential functions.

The General Manager shall be appointed by the President of the Philippines with the consent of the Commission on Appointments. He shall receive an annual compensation of Thirty-six thousand pesos (P36,000.00) and hold office for a period of six years unless sooner terminated for incapacity or other causes. The President may for cause, suspend or remove the General Manager after due notice and hearing. In case of temporary disability or absence of the General Manager, the Chairman of the Board shall designate any Assistant General Manager to act as General Manager.

The Assistant General Managers shall be appointed by the Board with the approval of the President. Each shall receive an annual compensation of Twenty-eight thousand pesos (P28,000.00) and shall hold office until retirement age as determined by law, unless sooner terminated for incapacity or other causes. In case of temporary disability or absence of any Assistant General Manager, the act as Assistant General Manager.

The Assistant General Managers shall be persons of integrity, competence and experience in the technical and executive fields related to the purposes of this Act. Their other qualifications as well as powers and duties shall be determined by the Board.

The Department Heads, Division and Section Chiefs, and other officers of equivalent rank shall be appointed or promoted by the General Manager upon recommendation of the Assistant General Manager concerned, with the approval of the Board.

The powers, duties, qualifications and compensation of said officers and of the other personnel shall be determined by the Board.

All other personnel shall be appointed or promoted by the General Manager upon recommendation of the Assistant General Manager concerned. The General Manager shall submit to the Board a monthly report on such appointments and non-disciplinary transfer made in the month immediately preceding.

Section 8. Other powers and duties of the General Manager.

Section 9. Appointment and Promotion; Terms and Conditions of Employment. Officers and employees of the Metropolitan and Local Systems shall not be subject to the Civil Service Law, rules and regulations. The System is hereby empowered to conduct such appropriate examination it deems necessary as additional bases for appointment and promotion.

The terms and conditions of employment in the System are governed by law, except that the WAPCO rules and regulations shall not apply, without prejudice to the right of collective bargaining.

Section 10. Administrative Jurisdiction for Disciplining Other Officers and Employees. The General Manager may, for dishonesty, oppression, misconduct, neglect of duty, conviction of a crime involving moral turpitude, notoriously disgraceful or immoral conduct, improper or unauthorized solicitation of contributions from subordinate employees, lobbying for personal interest or gain in legislative halls and offices without authority from the Board, directly or indirectly obstructing, defeating or violating the civil rights and liberties of an individual, promoting the sale of tickets in behalf of private enterprises that are not intended for charitable or public welfare purposes and even in the latter cases if there is no prior authority willful violation of reasonable office regulations, or in the interest of the service, remove after due notice and hearing, any subordinate officer or employee from the service, demote him in rank, suspend him for not more than one year without pay or fine in an amount not exceeding six month's salary.

A transfer from one position to another without reduction in rank and salary shall not be considered disciplinary when made in the interest of public service and the action of the General Manager shall not be final until approved by the Board of Trustees.

Section 11. Audit. The Auditor General shall appoint a representative known as the Auditor and the necessary personnel to assist said Auditor in the performance of his duties. The Auditor General shall also fix the salaries and the number of personnel to assist said Auditor. Once fixed by the Auditor General, such salaries and number of auditing personnel shall not be thereafter increased, diminished or altered unless initiated by him. The auditing personnel under this section shall be subject to the provisions of the civil service law. The budget and plantilla for salaries, maintenance and operating expenses of the auditing office as fixed by the Auditor General shall be subject to confirmation by the governing board of the corporation.

The financial transactions of the System shall be audited in accordance with law, administrative regulations, and the generally accepted principles of accounting and standards of auditing. The Auditor General shall submit to the President of the Philippines, the Presiding Officers of the two Houses of Congress and the Board of Trustees an Audit Report for each fiscal year, within ninety days after the close thereof.

Section 12. Review of Rates by the Public Service Commission. The rates and fees fixed by the Board of Trustees for the System and by the local governments for the local systems shall be of such magnitude that the System's rate of net return shall not exceed twelve per centum (12%), on a rate base composed of the sum of its assets in operation as revalued from time to time plus two months' operating capital. Such rates and fees shall be effective and enforceable fifteen (15) days after publication in a newspaper of general circulation within the territory defined in Section 2 (c) of this Act. The Public Service Commission shall have exclusive original jurisdiction over all cases contesting said rates or fees. Any complaint against such rates or fees shall be filed with the Public Service Commission within thirty (30) days after the effectivity of such rates, but the filing of such complaint or action shall not stay the effectivity of said rates or fees. The Public Service Commission shall verify the rate base, and the rate of return computed therefrom, in accordance with the standards above outlined. The Public Service Commission shall finish, within sixty (60) calendar days, any and all proceedings necessary and/or incidental to the case, and shall render its findings or decisions thereon within thirty (30) calendar days after said case is submitted for decision.

In cases where the decision is against the fixed rates or fees, excess payments shall be reimbursed and/or credited to future payments, in the discretion of the Commission.

Section 13. Disposition of Income. The income of the System shall be dispose of according to the following priorities:

First, to pay its contractual and statutory obligations and to meet its essential current operating expenses;

Second, to serve at least fifty per cent (50%) of the balance exclusively for the expansion, development and improvement of the System; and

Third, to allocate the residue enhancing the efficient operation and maintenance of the System which include increases of administrative expenses or increases or adjustment of salaries and other benefits of the employees.

Section 14. Assistance to local system. The System may provide technical and management assistance to the various local waterworks and sewerage system upon their request; and for this service the System may charge actual expenses incurred plus ten per cent (10%) thereof as overhead expenses.

Section 15. Abolition of NWSA; Transfer of Assets, Liabilities, and Personnel. The Corporation known as the National Waterworks and Sewerage Authority shall be abolished upon the organization of the Metropolitan Waterworks and Sewerage System as provided for in Section 2 (a) of this Act. Its records, properties, equipment, assets, rights, choses in action, obligations and liabilities are hereby transferred to, vested in, and assumed by the System: Provided, That an inventory and valuation of the properties, equipment, assets, rights choses in action, obligations, liabilities of NWSA shall be made by the Auditor General, and the accountable officers of NWSA shall continue to be fully accountable therefor, until issued a certificate of clearance by the Auditor General.

Employees and laborers, including the personnel of the planning and coordinating office and the provincial, city and municipal departments in the places enumerated in Section 2(c) of this Act are hereby transferred to and absorbed by the System: Provided, That the Board of Trustees is hereby authorized to make personnel movement on the basis of merit and fitness in accordance with the comprehensive and progressive merit system to be established by the Metropolitan Waterworks and Sewerage System immediately upon its organization: Provided, further, That the salary of any employee shall in no case be reduced as a consequence of said personnel movement: Provided, finally, that in no case shall the expense in any fiscal year for salaries, wages, allowances, emoluments, and other fringe benefits exceed thirty five per cent (35%) of the gross income of the system in the immediately preceding fiscal year.

Section 16. Gravity. Any personnel of the National Waterworks and Sewerage Authority not so appointed or who refuses such appointment shall be paid the money value of his accumulated vacation and sick leave, and such retirement gratuity as may be due him under existing retirement laws. Any of the employees and laborers who does not qualify under any existing retirement law shall be paid one month salary for every year of service, payable in lump sum. For this purpose, there is hereby appropriated out of any funds in the national treasury not otherwise appropriated the sum of fifteen million pesos to provide for their separation gratuities, accumulated vacation and sick leaves and/or retirement, when and if, payable and due to them, subject to reimbursement by the system to the national treasury out of its earnings within three fiscal years from the date of availment of the appropriated amount.

The personnel of the Wells and Springs Department whose salaries are paid from Congressional Appropriations and who cannot be absorbed by the Bureau of Public Works, shall be paid their terminal pay and retirement gratuity from Congressional Appropriations. However, in case an officer or employee is subsequently reinstated in the government, its branches and instrumentalities, including government corporation, he shall refund to the paying agency the value of the gratuity which he would not have received had he been paid in monthly installments.

Section 17. Transfer of local systems. Whenever the local government exercises the right mentioned in Section 2(c) hereof, the local systems now under the control and supervision of the NWSA together with all the employees and laborers including the personnel of the district offices, records, properties, equipment, assets, choses in action, obligations and liabilities shall be ceded, transferred and conveyed to their respective provinces, cities and/or municipalities which owned and/or operated them before the NWSA operated the same: Provided, That in case of disagreement between the system and the local governments on liabilities or obligations being charged by the National Waterworks and Sewerage Authority to the local government, the same shall be passed upon and decided by an arbitration committee to be composed of a representative of the local government, a representative of the System, and a third member to be chosen by both.

Any of the employees and laborers not so appointed in the local system or who refuses such appointment shall be paid from the amount of fifteen million pesos appropriated under this Act, the money value of his accumulated vacation and sick leaves and such retirement gratuities as may be due him under existing retirement laws: Provided, That any of the employees and laborers who does not qualify under any existing retirement laws, shall be paid one month salary for every year of service payable in lump sum.

Similarly, all employees and laborers, records, property and equipment of the Wells and Springs Department shall be ceded, transferred and conveyed to the Bureau of Public Works. The accounts and liabilities corresponding to said Department shall be adjusted accordingly by the Auditor General.

Those systems initially constructed and operated by the NWSA, shall be ceded, transferred and conveyed to the provinces, cities or municipalities which they serve: Provided, however, That where the System serves two or more municipalities, the same shall be ceded, transferred and conveyed to the provincial government: Provided, further, That where the System serves a city, or a city and municipalities, the system shall be transferred, ceded or conveyed to the city: Provided, furthermore, That the outstanding obligations incurred by the NWSA, including interest, in the construction, operation and maintenance of such systems, shall be assumed by the local government concerned: Provided, still further, That in the case of outstanding bond indebtedness in the construction, operation and maintenance of such systems, the national government shall continue to guarantee the obligation until the same shall have been fully paid: Provided, finally, That the Auditor General shall determine the accounts and liabilities of the respective local governments. In case the liabilities exceed the value of the assets transferred to the local governments, the excess shall be assumed by the national government.

Conflicts between local governments served by one system shall be decided by a board to be composed of their respective mayors, and treasurers as members, and the representative of the Auditor General as Chairman.

Section 18. Tax Exemption. All articles imported by the Metropolitan Waterworks and Sewerage System or the local governments for the exclusive use of their waterworks and sewerage systems particularly machineries, equipment, pipes, fire hydrants, and those related to, or connected with, the construction, maintenance, and operation of dams, reservoirs, conduits, aqueducts, tunnels, purification plants, water mains, pumping stations; or of artesian wells and springs within their territorial jurisdictions, shall be exempt from the imposition of import duties and other taxes.

Section 19. Repeal or Modification. All Acts, executive orders, administrative orders, and proclamation or parts thereof inconsistent with any of the provisions of this Act, are hereby repealed or modified accordingly.

Section 20. Separability Clause. In the event that any provision of this Act or the application of such provisions to any person of circumstances is declared unconstitutional, the remainder of this Act or the application of said provision to other persons or circumstances shall not be affected thereby.

Section 21. Effectivity. This Act shall take effect upon its approval.

Approved: June 19, 1971