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You are here: Home News Blog Mindanao News Blog City Government Ordered by Court to Pay BCWD more than 4.2M

City Government Ordered by Court to Pay BCWD more than 4.2M

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June 25, 2009 by: striker_jem Butuan – The Regional Trial Court 10th Judicial Region, Branch 3 favored Butuan City Water District in its petition to nullify a provision of the city ordinance to obligate in paying 1% of its gross sales to the city coffers. In a decision released by Presiding Judge Francisco Maclang, the city government was [...]

June 25, 2009

by: striker_jem

Butuan – The Regional Trial Court 10th Judicial Region, Branch 3 favored Butuan City Water District in its petition to nullify a provision of the city ordinance to obligate in paying 1% of its gross sales to the city coffers.

In a decision released by Presiding Judge Francisco Maclang, the city government was mandated to pay BCWD the amount of 100,000 as attorney’s fee and 50,000 as litigation expenses, refund the amount of more than 4 million remitted from October 10, 1994 up to July 19, 2004.

On top of these, the court also ordered for the city government to cease and desist from collecting any amount from BCWD the provisions stated under SP ordinance 976-93-imposing and collecting 1% share of the city government in the annual gross sales.

The basis for nullifying Ordinance 976-93 as stated by the decision of the court is the fact, that when the Local Government Code of 1991or RA 7160 took effect, it did not cover the local water districts because they are not yet government owned and controlled corporations.

The court further said that since SP Ordinance 976-93 gets its authority from RA 7160 and since RA 7160 does not cover the local water district, then the ordinance enacted by the Sangguniang Panglunsod of Butuan City does not cover BCWD.

It is to be recalled, that BCWD religiously complied beginning 1994 in remitting the full amount corresponding to provisions that the city government of Butuan shall collect the one percent share in the annual gross sales derived from BCWD’s utilization and development of the natural wealth in the city of Butuan.

The manner of payment shall start with paying the 50% of 1% , to be increased by the payment of 75% of the 1% beginning 1999, and 100% of the 1% beginning the year 2000 and annually thereafter.

Records obtained showed that from July 25, 1994 to October 20, 2004 BCWD remitted a total amount of more or less 4.2 million pesos.

However, in a letter by dated October 2004, City Treasurer Adulfo Llagas obliged BCWD to pay the more than 6.7 million unremitted balance corresponding the 80% of the 1% from 1994 and thereafter.

BCWD Board of Directors seeks legal redress in a court by filing a “Declaratory Relief” to nullify SP Ordinance 976-93 and won the case.


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