G.R. No. 197146 , December 6, 2016
Hon. Michael L. Rama, et al., Petitioners, vs. Hon. Gilbert P. Moises, et al., Respondents.

FACTS

This case involves a dispute over the appointing authority for the board of directors of the Metropolitan Cebu Water District (MCWD). MCWD was created in 1974 under Presidential Decree No. 198 (The Provincial Water Utilities Act of 1973). Section 3(b) of PD 198 provides that the appointing authority is the city mayor if over 75% of the district’s active water service connections are within a single city or municipality; otherwise, it is the provincial governor. From 1974 to 2002, the Mayor of Cebu City consistently appointed MCWD directors.
In 2002, the Governor of Cebu Province asserted the power to appoint, contending that no single city or municipality held 75% of MCWD’s connections, thus making the Governor the appointing authority under the law. Despite this, the Cebu City Mayor appointed Joel Mari S. Yu to the board in 2008. Petitioners, including the Mayor, argue that Section 3(b) of PD 198 is unconstitutional for violating local autonomy, due process, and equal protection, noting Cebu City holds a majority (though not 75%) of the connections and the province did not participate in MCWD’s creation.

ISSUE

Whether Section 3(b) of Presidential Decree No. 198 is unconstitutional.

RULING

The Concurring Opinion of Justice Leonen declares Section 3(b) of PD 198 unconstitutional for violating the local autonomy of cities and municipalities. The legal logic centers on the fundamental principle that local governments must be empowered to manage their own affairs, particularly in delivering basic services like water supply. The opinion traces the policy of local autonomy back to foundational state principles, emphasizing that decentralization aims to create self-reliant communities with responsive governance.
The provision’s mechanism, which vests appointing power in a provincial governor when no single locality contains 75% of water connections, constitutes an impermissible interference. It disregards the operational reality and needs of the constituent localities that actually utilize the water district’s services. By allowing an external provincial authority to control the board of a utility serving multiple cities and municipalities, the law undermines the constituent localities’ authority and responsibility over a vital public service. Therefore, the law fails to respect the constitutionally guaranteed autonomy of local governments and is invalid.