The city government wants to establish a tariff rate that will only consider the households connected with the Baguio Sewage Treatment Plant (BSTP) instead of applying a uniform tariff rate to all households to allow the repayment of the said loan within a 20-year period after its proposed upgrading through a loan of $62.4 million or P3.7 billion loan from the Asian Development Bank (ADB)
City Budget Officer lawyer Leticia O. Clemente stated that the earlier tariff rate projections were based on water and electric connections and existing real property units registered with the city government.
She pointed out that it implies that whether or not connected to the sewer system, one pays for the tariff rate considering that after the project implementation, out of 108,000 households, only 17,000 will be served by the upgraded BSTP.
The city budget officer claimed that some costs were not included in the earlier tariff study such as the cost of collection and dislodging of waste of households not served by the BSTP for the 91,000 remaining households.
Further, she added that it has been an observation that the proposed tariff rates for commercials are reportedly lower compared to existing fees in the city government.
According to her, there is a need to establish proper inventory records for existing sewer connections and a systematic collection process to contribute in the proper implementation of existing rates to maximally help in the economy of the city government as published in Ordinance No. 18, series of 2016, or the city’s Environment Code.
Clemente disclosed that the Baguio Water District (BWD) shall be the collecting agent for sewer fees as provided in Section 156 of the same Code.
However, she stipulated some things still need to be worked out with BWD as collecting agent such as the modalities on the aforesaid collection; an agreement with BWD should be drafted and discussed; actions against defaulting customers to be completed with appropriate policy and regulation, and that there must be a clear strategy of collection.
The city government is given 20 equal installments to pay the loan with the ADB with an annual interest of 1.68 percent.
Among the options for charging tariff rate being considered by the city government include direct charging or linking the same to water consumption or indirect charging through proxy indicators such as through the real property tax and electricity consumption.
The city government is inclined to acquire the $72.4 million or P3.7 billion loan from the ADB with the international financial institution serving as the funding agency, the State-owned Tourism Infrastructure and Enterprise Zone Authority (TIEZA) serving as the implementing and executing agency and the city as the recipient to be able to realize the so-called Baguio Resilient City Tourism Project (BRCTP) which will focus on the upgrading of the BSTP.