G.R. No. 45310 - Rotea vs. Delupio

Presidential Decree No. 198 (Provincial Water Utilities Act of 1973) issued May 25, 1973, declares national policy favoring locally controlled water districts and authorizes their formation.
By virtue of P.D. 198, Cebu City enacted Resolution No. 873 on May 9, 1974, creating the Metropolitan Cebu Water District (MCWD) and transferring to it the Osmeña Waterworks System (OWS) along with its assets (approx. ₱25.4 million).
Subsequently, the cities of Mandaue, Lapu-Lapu, Talisay and the municipalities of Liloan, Compostela, Consolacion, and Cordova turned over their waterworks to MCWD.
Section 3(b) of P.D. 198 provides that the appointing authority for a local water district’s board is:

the city/municipal mayor if >75% of active service connections lie within that city/municipality; otherwise
the provincial governor.

From 1974 to 2002, the Cebu City Mayor appointed MCWD directors under §3(b).
In July 2002, Cebu Provincial Governor Pablo L. Garcia asserted he was the appointing authority, citing City connections having fallen below 75%.
MCWD first filed (and lost) a declaratory relief action challenging §3(b)’s validity or interpretation.
Two vacancies arose on MCWD’s board; the Provincial Governor and City Mayor jointly appointed members, including Atty. Adelino Sitoy.
After Sitoy’s election as Cordova Mayor in 2007, Governor Gwendolyn F. Garcia sought declaratory relief on §3(b)’s meaning. Meanwhile, Mayor Tomas R. Osmeña unilaterally appointed Joel Mari S. Yu to fill the vacancy.
On May 20, 2008, the RTC dismissed the initial declaratory relief. On June 13, 2008, Governor Garcia sued to annul Yu’s appointment as illegal.
In November 2010, RTC Branch 18 declared Yu’s appointment void, held §3(b) constitutional, and enjoined that the Governor appoint MCWD directors whenever no city/municipality meets the 75% threshold.
Petitioners (Osmeña and Yu) moved for reconsideration; the RTC denied it.

Who is the proper appointing authority under Section 3(b) of P.D. 198 for the MCWD board when no city/municipality holds >75% of connections: the Cebu City Mayor or the Provincial Governor?
Whether Section 3(b) of P.D. 198 is unconstitutional:

Under the local autonomy provisions of the 1987 Constitution and the 1991 Local Government Code (LGC), as it purportedly allows provincial interference in highly urbanized/independent component city affairs.
As violating substantive due process and the equal protection clause by granting the Governor appointing power irrespective of the City’s majority of water connections and the Province’s lack of participation in MCWD’s creation.