Table of Contents Transmittal Letter ............................................................................................................... 1 BUDGET SUMMARY .............................................................................................................. 2 Overview .......................................................................................................................... 2 Water Sales and Other Revenues ............................................................................... 3 Personnel Services (PS) and Maintenance and Other Operating Expenses (MOOE) ............................................................................................................................. 3 Capital Expenditure Highlights .................................................................................... 4 2020 CORPORATE TARGETS ................................................................................................ 5 2020 DEPARTMENT PLANS AND BUDGET ............................................................................ 7 THE BOARD OF DIRECTORS AND THE EXECUTIVE COMMITTEE ......................................... 8 Office of the Board of Directors .................................................................................. 9 Office of the General Manager .................................................................................. 10 Office of the Assistant General Manager for Finance/Customer Services ....... 11 Office of the Assistant General Manager for Administration ............................... 12 Office of the Assistant General Manager for Operations ..................................... 12 Office of the Assistant General Manager for Technical Services ........................ 13 GENERAL MANAGER’S GROUP ........................................................................................... 15 Corporate Planning Department .............................................................................. 15 Internal Audit Department ......................................................................................... 16 Legal Department ........................................................................................................ 17 CUSTOMER SERVICES/FINANCE GROUP ........................................................................... 21 Commercial Services Department ........................................................................... 21 Financial Management Department ....................................................................... 22 ADMINISTRATION GROUP .................................................................................................. 25 Human Resources Department................................................................................. 25 Property and Materials Management Department............................................... 27 Information and Communication Technology Division........................................ 30 OPERATIONS GROUP .......................................................................................................... 33 Production Department .............................................................................................. 33 1 Pipelines and Appurtenances Maintenance Department ................................... 35 Sewerage and Sanitation Department .................................................................... 36 TECHNICAL SERVICES GROUP ........................................................................................... 39 Engineering Department ............................................................................................ 39 Construction Department .......................................................................................... 40 Environment and Water Resources Department ................................................... 42 ANNEXES ............................................................................................................................. 44 2 Inter-Office Memorandum MEMO FOR : THE BOARD OF DIRECTORS MEMO FROM : THE ACTING GENERAL MANAGER SUBJECT : 2020 CORPORATE BUDGET DATE : December 11, 2020 I am pleased to present the 2020 Corporate Budget of the Metropolitan Cebu Water District, which has been prepared in line with the company’s strategic vision for the next 10 years. Some of the key objectives of this budget are: Continued production and distribution efficiency improvement which includes the Rehabilitation of our Jaclupan Water Facility and Construction of DMAs; Water sourcing and expansion projects to support MCWD’s thrust to increase demand coverage. In 2020, MCWD will commence the procurement of bulk water supply in Lahug, Cebu City (15 mld) and desalinated water supply in Mactan (90 mld). Construction of new pumpstations are also lined up for implementation; Maintenance and replacement of aging water infrastructure to reduce non- revenue water; Rehabilitation of Septage Treatment Facility in North Reclamation Area in anticipation of JICA’s grant of ₱1,000.0 million to construct a 400 m3 capacity septage treatment plant. Highlights of the 2020 Budget include: Target billed volume of 65.8 million cubic meters, equivalent to ₱1,847 million – an increase of 4.4% from 2019’s projected revenues. Total Sources of Funds of ₱4,053.6 million which includes the ₱353.1 million loan from the Development Bank of the Philippines and ₱46.9 million grant expected from Vitens Evides International. This is ₱200.2 million or 4.7% higher than the 2019 Sources of Funds and supports the following cash requirements: a. Operating costs of ₱ 2,007.4 million b. Capital Expenditures of ₱1,606.0 million c. Debt service and related expenses totaling ₱ 174.3 million Growth in revenues from our Septage Management Program by 30.7% The 2020 Annual Corporate Budget will allow the MCWD to continue providing safe, potable water and affordable water, and septage treatment services at reasonable costs while also ensuring the operational and financial stability of the water district. Respectfully submitted for your approval. STEPHEN D. YEE 1 BUDGET SUMMARY Overview The Corporate Budget for 2020 presents a comprehensive projection of MCWD’s operations from January 1, 2020 through December 31, 2020. This budget summary describes the key recommendations encompassing the 2020 Corporate Budget. Target gross water sales has been set at ₱ 1,847.4 million – an increase of 4.4% from the projected sales of 2019. The total service income which includes revenue from septage treatment, installation fees, penalty charges and water levy is targeted to reach P 1,965.1 million or an increase of 4.8% from the 2019 projections. The operational and capital requirements are presented in the succeeding sections. The sources of funding to meet these requirements are provided in the table below: ₱ in Millions 2020 % 2019 Projected Variance Budget Variance Sources of Funds Cash Balance 1,457,147,704.72 1,365,092,526.74 (92,055,177.98) (6.3%) Cash Inflows from 2,129,400,118.04 2,288,488,031.52 159,087,913.48 7.5% Operations Loans and Grants - 399,992,875.44 399,992,875.44 - Total 3,586,547,822.76 4,053,573,433.71 467,025,610.95 13.0% Use of funds Operating Costs 1,807,244,308.26 2,007,384,359.83 200,140,051.57 11.1% Capital Expenditures 232,671,903.48 1,606,037,084.05 1,373,365,180.57 590.3% Debt Servicing 166,539,084.28 174,255,002.33 7,715,918.05 4.6% Reserve funds - JSA* 15,000,000.00 10,000,000.00 (5,000,000.00) (33.3%) Unappropriated funds 1,365,092,526.74 255,896,987.50 (1,109,195,539.24) (81.3%) Total 3,586,547,822.76 4,053,573,433.71 467,025,610.95 13.0% The 2020 budget presents a financial plan designed to continue MCWD’ mission to provide safe, potable and affordable water services. The budget balances revenue requirements with operating revenues and other funding sources. Some of the key objectives of this budget are: Continued production and distribution efficiency improvement which includes the Rehabilitation of our Jaclupan Water Facility and Construction of DMAs; Water sourcing and expansion projects to support MCWD’s thrust to increase demand coverage. In 2020, MCWD will commence the procurement of bulk water supply in Lahug, Cebu City (15 mld) and desalinated water supply in Mactan (90 mld). Construction of new pumpstations are also lined up for implementation; * JSA – Joint Savings Account with LWUA 2 Maintenance and replacement of aging water infrastructure to reduce non- revenue water; Rehabilitation of Septage Treatment Facility in North Reclamation Area in anticipation of JICA’s grant of ₱1,000.0 million to construct a 400 m3 capacity septage treatment plant. Water Sales and Other Revenues Billed volume is targeted to reach 65,843,748 cubic meters at an average effective rate of ₱28.06 per cubic meter. This brings the total gross water sales to ₱1,847.4 million. More details in the supply and demand forecast are incorporated in the 2020 Corporate Plan. Penalty charges for late payments in the amount of more than ₱15.9 million are expected to be collected from delinquent consumers – an increase of 4.4%. This is based on the on-time collection ratio target for 2020. Items that are included in the non-operating income section of the income statement budget are from interest revenues, the rental of the old MCWD building, income from Water Truck deliveries, and donation from San Miguel Corporation. Personnel Services (PS) and Maintenance and Other Operating Expenses (MOOE) The 2020 Personnel Services and MOOE budget total ₱1,766.1