SUBJECT: PROPOSAL FOR THE ADOPTION OF VALENCIA CITY WATER DISTRICT

(VCWD) ORGANIZATIONAL STRUCTURE FOR CATEGORY B WATER DISTRICT PER

LOCAL WATER DISTRICT MANUAL ON CATEGORIZATION, RE-CATEGORIZATION AND
OTHER RELATED MATTERS (LWD-MaCRO)

Rationale
The Department of Budget and Management (DBM) had issued Budget Circular
Letter No. 2011-10 dated November 18, 2011 mandating the Local Water Districts
to adopt the revised organizational structure that was developed and designed by
the Oversight Committee in the form of a Manual on Categorization, Re-
Categorization, and Other Related Matters with acronym: LWD-MaCRO.
The Local Water Utilities Administration (LWUA) conferred the Certificate of
Categorization to Valencia City Water District (VCWD) with CCC no. 141, as Category
B Water District, issued on March 14, 2012 (Exhibit A), and LWUA letter dated
March 26, 2012 (Exhibit B), as per criteria set under the Revised Local Water
District Manual on Categorization, Re-Categorization, and other Related Matters
(MaCRO) Manual to all LWDs.
In compliance to the instruction of the DBM thru its Circular Letter, the management
prepared a proposal for the modification of VCWD Organizational Structure and
Staffing Pattern (OSSP) in accordance with the model under the revised manual.

Background
On September 1997, using the Local Water District (LWD) first Manual on
Categorization/Re-categorization, LWDs were categorized into six (6) categories:
1. Small
2. Average
3. Medium
4. Big
5. Large
6. Very Large

VWD Initial Categorization

VWD was originally categorized as Medium category, in 1997
VCWD Re-categorization
Because of its growth, in 2004, the VCWD through the favorable recommendation of
the Management and approval of the Board of Directors, was confirmed and being
granted by the Department of Budget and Management (DBM) in its re-
categorization and became a BIG Water District.

What is Categorization of LWDs

Establishment of standards Organizational Structure / Staffing Pattern

(OSSP), Position Classification, and Salary based on size and scope and
extent of responsibility handled by the LWD;
Size of LWD directly proportional to the degree of its responsibility;

Modification of Categorization / Re-categorization of LWD

Between 2005 - 2011 PAWD studied and modified the Categorization / Re-
categorization of LWD which was implemented by 2012

Objectives of Modified Categorization / Re-categorization

Provides a general framework for the categorization and re-categorization of

LWDs as basis for determining the Organizational Structure / Staffing Pattern,
Position Classification and Salary Grade;
Categorize LWDs considers the present financial positions and operating
conditions in the LWDs;
Reduce number of categories from 6 to 4, for easier implementation and
monitoring of regulating agencies;
To provide a systematic and rational evaluation of the LWDs request for re-
categorization;
To determine if the LWD will be able to sustain the basic requirements for
upward categorization without jeopardizing its short-term budgetary
requirement and long-term obligations to creditors;

Basis for Categorization of LWDs

1. Initial, based on the number of active service connections, to wit:
Number of Active VCWD Data
Category Service Connections 2011 2016
A At least 30,000
B At least 10,000 13,996 18,904
C At least 3,000
D Below 3,000
 2. Point-Rating Category, using the following factors:
VCWD
Data
Factor Weight % 2011 Percent
2016 Percent
Gross Revenue 40 P 84,363,879.34 26 P
133,992,208.31 29
Total Assets 40 129,115,342.08 22
220,548,446.66 26
Net Income Before Interest 15 21,563,916.09 9
36,179,013.57 10
and Depreciation
Staff Productivity Index 5 1 : 135 (Per. 92) 3
Permanent - 82 3
Total 100 Total 60
(1 : 158) 69
Points Earned Category VCWD Category
75 - 100 A
50 - 74 B 60 - 69
25 - 49 C
1 - 24 D
The resulting point-rating category, compared to the service connection category,
whichever is lower, is the final category of the LWD.

Time frame for Implementation on Re-categorization

LWD-MaCRO provides that upon approval of the new category by LWUA, the LWD
may opt to retain its existing organizational structure for the first three (3) years.
This means that since 2012 of its LWUA approval for VCWDs B category,
supposedly, by 2015, VCWD re-categorization must be in-placed and implemented.
All Water Districts had already complied on it, therefore, VCWD should in-place its
mandatory re-categorization, duly recommended by the Management, for approval
first by the VCWD Board of Directors and for final confirmation by the Department of
Budget and Management (DBM).

VCWDs Present Structure

Since 2003 up to present, VCWD has 4 Divisions, namely (under Big Category):
1. Administrative and General Services Division (AGSD)
2. Finance Division (FD)
3. Commercial Services Division (CSD)
4. Engineering and Operations Division (EOD)
VCWD Category B proposal
I To have 4 Departments and 8 Divisions
1.1Administrative and Human Resource Department (AHRD)
1.1Administrative Services and Human Resource Division (ASHRD)
1.2General Services Division (GSD)
1.2Finance Services Department (FSD)
2.1Accounting Division (AD)
2.2Budget and Cash Management Division (BCMD)
1.3Commercial Services Department (CoSD)
3.1Customer Services Division (CuSD)
3.2Customer Accounts Division (CAD)
1.4Engineering and Operations Department (EOD)
4.1Water Resource Division (WRD)
4.2Construction/Maintenance and Planning/Design Division (CMPDD)
II The proposal requires:
1. Mandatory upgrading / renaming of 7 identified positions (Schedule 1 and 3)
2. Renaming of 8 positions (Schedule 2-3)
3. Renaming of 4 Divisions (Schedule 4)
4. Creation of 4 Departments and 4 Divisions (Schedule 5)
5. Creation of 36 identified required and needed positions (Schedule 6)
III By phase of implementation
1. Mandatory upgrading/renaming of positions, outright implementation,
starting Q3 of 2017, upon DBM approval
2. 36 created positions for gradual implementation within 5 years (2017-2021),
(Schedule 7-8)
2.1First year (2017), 10 positions
2.2Second year (2018), another 10 positions
2.3Third year (2019), another 8 positions
2.4Fourth year (2020), another 4 positions
2.5Fifth year (2021), another 4 positions
IV Financial Requirement
1. Upgrading of Positions (Schedule 9-10)
2. 36 additional positions for creations
2.1Annual budget (Schedule 11-12)
2.2Annual budget within 5 years (2017-2021) of implementation (Schedule
13-14)
3. Budget for 103 DBM approved positions based on approved 2 nd, 3rd and 4th
tranches (2017-2019) of salary increases (Schedule 15-16)
4. Budget of unfilled positions (Schedule 17)
5. Over-all budget for the proposal, percent (%) to revenue budget and staff-
productivity index (Schedule 18)
V Revenue Budget for 5 years (Schedule 19)
VI Recommendation
 Implement the VCWD re-categorization as category B. Based on the data
presented, the proposal for implementation within 5 years could sustain the
Districts operation. It can continue to address on gradual expansion of the District
which is revenue generating.

Prepared and concurred:

CELINIA V. ABODILES
Division Manager C, Commercial

Concurred:

EDGARDO S. BLANCO MA. LIZA M. ROBENTA

SHERLITA M. DEIPARINE
Division Manager C, Engineering Division Manager C, Admin Division
Manager C, Finance

Recommending Approval:

MA. SOCORRO ESTER R. PALUGA

General Manager