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Naawan, Misamis Oriental Increasing Income through Sustainable Public Economic Enterprise Management


Increasing Income through Sustainable Public Economic Enterprise Management in Naawan, Misamis Oriental Copyright Š 2005 Philippines-Canada Local Government Support Program (LGSP) The Philippines-Canada Local Government Support Program encourages the use, translation, adaptation and copying of this material for non-commercial use, with appropriate credit given to LGSP. Although reasonable care has been taken in the preparation of this book, neither the publisher and/or contributor and/or editor can accept any liability for any consequence arising from the use thereof or from any information contained herein. Printed and bound in Manila, Philippines Published by: Philippines-Canada Local Government Support Program Unit 1507 Jollibee Plaza Emerald Ave., Pasig City 1600 Philippines Tel. Nos. (632) 637-3511 to 13 www.lgsp.org.ph This project was undertaken with the financial support of the Government of Canada provided through the Canadian International Development Agency (CIDA).


Increasing Income through Sustainable Public Economic Enterprise Management NAAWAN, MISAMIS ORIENTAL

Philippines-Canada Local Government Support Program (LGSP) Documentation of LGU Exemplary Practices

Replicable Practice

INCREASING INCOME THROUGH SUSTAINABLE PUBLIC ECONOMIC ENTERPRISE MANAGEMENT IN NAAWAN, MISAMIS ORIENTAL (5TH CLASS MUNICIPALITY)

Contents

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Summary

2

Project Description: Addressing the challenge of public economic enterprise management

2

Project History: How the project came to be

3

Results: Building LGU self-reliance through public economic enterprises

4

Key Implementation Steps

5

Analysis and Lessons Learned

10

Annexes: Annex A – Results of the Naawan Diagnostic Workshop Annex B – Naawan MEEDO Organization Chart Annex C – Outline of MEEDO PEE Operations

11 14 15 16

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Increasing Income through Sustainable Public Economic Enterprise Management NAAWAN, MISAMIS ORIENTAL

SUMMARY Like other 4th to 6th class municipalities, the municipal government of Naawan in Misamis Oriental has long been dependent on its internal revenue allotment (IRA) and was in search for ways to increase its local income. Naawan found an answer in 2003 when it participated in the Philippines-Canada Local Government Support Program (LGSP)- assisted capacity-building project, “Enhancing Local Government Units’ Capacities in Managing Public Economic Enterprises in Region 10”. As a result of Naawan’s participation in the LGSP project, the LGU created a Municipal Economic Enterprise and Development Office (MEEDO) in September 2003 to efficiently coordinate and manage all public economic enterprises in Naawan. The main tasks of the MEEDO include 1) billing and collection, 2) monitoring of delinquencies, 3) keeping complete records, and 4) maintaining the facilities and buildings of various LGU-managed public economic enterprises, such as the municipal water system, public market and the slaughter house. The local government of Naawan aimed to effectively manage its public economic enterprises, achieve greater efficiency and generate more income and economic opportunities for their town. Since the establishment of the MEEDO in 2003, public economic enterprise management in Naawan has improved. The Naawan municipal water system (NMWS) has expanded its service areas and improved its delivery of services. The LGU has also managed to generate additional revenues from water consumption fees and improved market operations. While generating local income that could fund other development activities, the municipal government of Naawan has also enhanced the capacity of its personnel in public enterprise management.

Project Description: Addressing the challenges of public economic enterprise management Naawan is an IRA dependent, fifth class agricultural municipality in the province of Misamis Oriental. It is strategically located along the Cagayan-Iligan Industrial Corridor (CIC). However, economic growth has been slow to come to the corridor and Naawan has not benefited substantially from economic activities in the area. This has prompted the local government unit (LGU) of Naawan to search for ways to generate more income for the municipality.

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Basic Profile – Naawan, Misamis Oriental Land area: Population: No. of households: Population growth: Ave Household Size: Income class: IRA: Local Revenues: No. of barangays: Land use: Major industries/ Economic Activities:

8808 hectares 17,431 (2004) 3,684 (2004) 1.7 % 5 5th Php19,693,668 (2004) Php21,225,806 (2005) Php4,031,950.78 (2004) Php4,349,346.50 (2005) 10 Agriculture Agriculture, Poultry, Fruit Trees, and Seedling Production

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Increasing Income through Sustainable Public Economic Enterprise Management NAAWAN, MISAMIS ORIENTAL

In 2003, Naawan decided to explore other economic opportunities by reviewing the performance of its public economic enterprises, including (1) a public market with a 6-stall concrete meat section constructed in 2001, and a jeepney terminal, (2) a slaughterhouse that became operational in 2002 and (3) a municipal water system. The review revealed a number of problems: • • • • •

PEEs were not financially viable and losing profit because of large personnel costs MTO and MEO were not effectively managing public enterprise projects Market facilities were crowded and needing repair Absence of an updated Municipal Tax Code and Market Code Staff lacked technical and management skills for public enterprise management

Project goal and objectives Through the MEEDO, Naawan’s goal is to manage its public economic enterprises effectively and efficiently towards generating more income and economic opportunities for the municipality. This goal translates into the following specific objectives: 1) Enhance the capacities of LGU personnel to efficiently manage the operations of the existing public economic enterprises to be selfliquidating and sustainable; 2) Develop new sources of water supply and expand the service area of the municipal water system; 3) Improve market facilities and encourage expansion of the existing business establishments and attract new investors; 4) Upgrade the slaughter house facilities and operations to provide the community with better quality meat products, and 5) Develop strategies for the efficient collection of rentals and other fees from the market and other economic enterprises to fund other development programs.

Project History: How the project came to be The establishment of the MEEDO of Naawan benefited from collaboration among different stakeholders. In 2003, Naawan participated in the LGSP project called “Enhancing Local Government Units’ Capacities in Managing Public Economic Enterprises in Region 10.” The project provided LGU executives and MEEDO personnel with a series of capability building initiatives between January 2002 and February 2003, which equipped them with necessary knowledge and skills to manage public economic enterprises more effectively.

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Increasing Income through Sustainable Public Economic Enterprise Management NAAWAN, MISAMIS ORIENTAL

Having participated in the consensus-building workshop for 20 selected municipalities of Region 10 on February 17-19, 2003 to improve LGU public economic enterprises, Mayor Dennis L. Roa issued an Executive Order calling for the creation of a MEEDO Technical Working Group (TWG) (E.O. No. 02, s. 2003) that would draft a municipal ordinance creating the MEEDO. Another TWG was formed to conduct a Resource Scanning and Diagnostic Audit of existing public economic enterprises of the LGU. The audit confirmed the need for a MEEDO. On March 24, 2003 the Sangguniang Bayan of Naawan approved Municipal Ordinance No. 04 2003 creating the MEEDO which was formally launched on September 23, 2003 and has since been operational.

Results: Building LGU self-reliance through public economic enterprise management In September 2004, a year after it was created, the MEEDO reported the following gains and accomplishments: Increased capacity of LGU personnel to efficiently manage public economic enterprises •

More efficient water services provided to consumers, which include Improved repair and maintenance services Replacement of old pipelines and defective meters Making available water to households on a 24-h cycle Twice a month Chlorination to ensure clean water Improved collection and monitoring of delinquencies in the payment of bills

Water service areas expanded to cater to other members of the community, with the number of clients increasing from 240 to 651 under MEEDO management; expansion covered the following: Drilling of new water sources Expansion to other barangays outside the Poblacion

Increased revenues, which suggest that Naawan’s public enterprises can eventually be independent of LGU subsidy Water use fees increased, with a positive net income in 2004 of Php 181,186.80 Gross and net income from cash tickets from the public terminal and vegetable tables improved and was pegged at Php 392,414.44 and Php 99,615.37 (2004), respectively, because of the presence of a permanent market collector

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Increasing Income through Sustainable Public Economic Enterprise Management NAAWAN, MISAMIS ORIENTAL

Additional employment with improved job security provided The new office provided contractual jobs to 7 casual (renewed semiannually) and 2 permanent employees who were previously with the Municipal Treasurer’s Office Although not permanent positions, the MEEDO personnel have better job security because they have annual contracts

Improved services and management of public enterprises. Better sectioning of fish and meat in the public market, and additional market stalls Improvements in the municipal slaughter house to meet sanitation standards Better collection because a fulltime market inspector was assigned to collect monthly rents and issue daily cash tickets for the bus terminal and market.

Key Implementation Steps The Successful implementation of the Public Economic Enterprises in Naawan through the MEEDO involves the following key implementation steps:

1. Create two Technical Working Groups (TWGs): Two Technical Working Groups were created to oversee the legal, technical and administrative requirements of establishing a MEEDO. These were the MEEDO and Resource Scanning and Diagnostic Audit (RS/DA) Technical Working Groups (TWG), created through Executive Order No. 02, s. 2003, and a Memorandum Order. 1.1 MEEDO TWG The MEEDO TWG was tasked to draft a municipal ordinance that would facilitate the creation of MEEDO, The following senior LGU personnel composed the MEEDO TWG: • • • • • •

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Planning and Development Officer Municipal Treasurer MEEDO Manager Municipal Engineer SB Secretary Budget Officer 5


Increasing Income through Sustainable Public Economic Enterprise Management NAAWAN, MISAMIS ORIENTAL

1.2 Resource Scanning & Diagnostic Audit TWG At around the same time, the RS/DA TWG was created to: Conduct a Resource Scanning & Diagnostic Audit of existing public economic enterprises; Draft a report; and Present the findings/results of the audit to the MEEDO TWG, for review by the SB. The Resource Scanning & Diagnostic Audit TWG (RS/DA TWG) were composed of second-line technical staff from various LGU offices who are familiar with the operations of existing public enterprises, including the heads of the public economic enterprises were part of this TWG. 2. Conduct a Public Economic Enterprise Diagnostic Audit Workshop In Naawan, a Diagnostic Audit was conducted by the RS/DA TWG in February 2003. The audit identified the strengths, weaknesses and problems of the Public Market/Terminal operation, identified as a priority LGU project. The audit (Refer to Annex A for Diagnostic Audit Results) revealed that Naawan’s public enterprises seriously needed upgrading and streamlining to increase their efficiency and to generate more income for the LGU. The results of the audit was presented to the MEEDO TWG, finalized, and then submitted to the SB for final review and approval. The Audit provides a clear rationale for constituting a MEEDO. 3. Create the MEEDO The MEEDO TWG then endorsed a draft ordinance to the Sangguniang Bayan (SB) using the diagnostic/audit report to support the need for a MEEDO. The Sangguniang Bayan reviewed and approved the ordinance creating the MEEDO. This paved the way for the formal creation of the MEEDO, which included the following tasks: 3.1 Creating an eight-member Management Board that would be responsible for the overall management and supervision of MEEDO. The Municipal Mayor serves as the Chairperson of the Management Board. 3.2 Organizing the Project and Development Committee composed of key LGU personnel that can provide technical support to the Management Board. 3.3 Designating or hiring a MEEDO Manager who will be responsible for the immediate supervision of office personnel and activities.

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Increasing Income through Sustainable Public Economic Enterprise Management NAAWAN, MISAMIS ORIENTAL

3.4 Assigning appropriate personnel to operate the different components of MEEDO as identified by the requirements of the public economic enterprises. Personnel from the MTO and MEO can be reassigned to the MEEDO on a temporary or permanent basis 3.5

Launching the MEEDO and creating public awareness about the office.

The Sangguniang Bayan approved Municipal Ordinance No.04 s. 2003 on March 24, 2003 formally creating the Municipal Economic Enterprise Development Office. (Refer to Annex B for the MEEDO Organizational Chart) The MEEDO was constituted and launched in September 2003. Naawan constituted a MEEDO with three divisions, namely: a Maintenance and Utilities Section, a Billing and Cash Ticket Section, and a Sanitation and Inspection Section. Some staff from the Municipal Treasurer’s Office were transferred to man these divisions. While it was initially led by an officer-in–charge, a manager was officially appointed in February 2004. Presently, the MEEDO has seven regular staff, composed of the Manager, one market inspector, one market collector, three-meter readers and one maintenance plumber. The sanitary inspector is a part-time staff assigned to the project from the Rural Health Unit (RHU). 4. Obtain legislative & institutional support The next task was ensuring that the MEEDO has all the necessary legislative and institutional support by: 4.1 Getting the endorsement and approval of the Civil Service Commission for the MEEDO 4.2 Ensuring that all procedures and approaches in the management of public economic enterprises (i.e., implementation of rates and fees, billing and collection system, incentive and penalty system) are supported by municipal ordinances 4.3 Drafting the Implementing Rules and Regulation for the MEEDO ordinance that will serve as a Manual of Operations for the office. 4.4 Tapping other institutions like government financial institutions, private sector groups or donor agencies, that can assist in strengthening the economic enterprises or increasing the capacities of LGU personnel in enterprise management

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Increasing Income through Sustainable Public Economic Enterprise Management NAAWAN, MISAMIS ORIENTAL

The Civil Service Commission approved the creation of the MEEDO in Naawan. All operations and projects were also supported by municipal ordinances. Implementing Rules and Regulations (IRR) were drafted, which serves as the Manual of Operations for the MEEDO. Naawan’s MEEDO continues to build institutional support. It works closely with other offices in the LGU and also enjoys institutional support from organizations like LGSP and the Enterprise Work Foundation (EWF). It has also tapped government financial institutions (GFIs) such as government banks (e.g. DBP, LBP) for financial support. 5. Ensure budgetary appropriation for MEEDO operations and project implementation The MEEDO manager prepares the annual budget for the office and for economic enterprise management and submits its budget proposal to the Municipal Mayor for inclusion in the executive budget for SB approval. Once appropriation is approved, the MEEDO is assured of funds for its operations. A Php1.2 Million was allocated for personal services (PS) under the MEEDO in 2004. All expenditures (PS and MOOE) by the MEEDO were taken from the LGU Development Fund, and not from the General Fund. Large development costs, such as improvement of facilities and expansion of water service area, came from external funding sources. 6. Develop the capacity of MEEDO personnel in the different aspects of public enterprise management To ensure that the MEEDO will operate efficiently, the capacities of its personnel were enhanced. This was done by tapping coaches and providing capacity-building programs to enhance the skills of the MEEDO staff. Gaps in existing capacities were determined and matched with appropriate capacity-building interventions. Government and private institutions with expertise in public enterprise management were tapped. Where funds are not available, Naawan looked to national government agencies for technical assistance. The LGU tapped LGSP and with its assistance, the MEEDO personnel participated in the following capacity enhancement programs: Special Training on Public Market Operations Enterprise Development Training A “Financing Forum” with the Land Bank of the Philippines (LBP) and Training in Water Systems Operations and Management On-site coaching was also provided to the Naawan MEEDO personnel and the public economic enterprise officers' in-charge for the whole duration of

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Increasing Income through Sustainable Public Economic Enterprise Management NAAWAN, MISAMIS ORIENTAL

the project. A coach provided one-on-one consultancy on the functional aspects of public economic enterprise development. 7. Operationalize the MEEDO to implement projects and manage public economic enterprises The MEEDO then implements projects that would improve the operations of public economic enterprises, ensuring proper systems are in place for the efficient operation of public economic enterprises, such as computerization, data banking, etc. It also requires that the MEEDO office monitor problems and concerns and address them promptly. The MEEDO office of Naawan has been in full operation since September 2003 with seven staff. It has a manual of operations and a set of more committed personnel who have a better appreciation of their jobs. The MEEDO also has a computerized system that generates regular updates on profits and incomes. (Refer to Annex C for an Outline of MEEDO PEE Operations) Some difficulties encountered during first year of operation included: Poor monitoring and collection resulted in irregular payments and large arrears incurred by stall lessees/occupants. Daily collection from cash tickets was not a perfect system, as some PUJs find ways to evade payment. Enforcement of the penalties for non-compliance depends on police back-up or sanction as the market collector has no authority to apprehend violators. The MEEDO Board has not yet been created to oversee the holistic management of the project and address its many challenges The greatest challenge for MEEDO has been its public market. However, the MEEDO has found ways to address these problems by streamlining market operations to make the enterprise cost-efficient and more profitable. 8. Ensure sustainability of the MEEDO In Naawan, working to sustain gains concretely meant improving the performance of municipality’s public economic enterprises. For example, the expansion and improvement of the Naawan Municipal Water System will continue under a proposed Php20 million Mindanao Basic Urban Services Sector (MBUSS) Project that is expected to serve 1,500 households in three coastal barangays in Naawan, and the poblacion area of the neighboring municipality of Manticao. Supported by the Land Bank-Asian Development Bank (LBP-ADB), the project will be implemented on the following cost-sharing scheme:

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Increasing Income through Sustainable Public Economic Enterprise Management NAAWAN, MISAMIS ORIENTAL

20% as grant 10% as LGU equity 70% as a loan payable in 10 years Naawan is also looking at the MEEDO to manage other income generating projects. The Agricultural Development Center, the residential lots project and the public cemetery are other projects being considered to come under MEEDO management. The residential lot project is part of the LGU’s response to the needs of the community for decent and affordable housing, where a large tract of land was purchased and subdivided, then sold to residents of Naawan at very reasonable prices. Naawan took seven months to complete its preparatory activities, but this can be shortened to five months, as capacity building initiatives are continuous. Some of the implementation steps can be done simultaneously so that the project can be implemented faster. Matrix of Key Implementation Steps Implementation Steps 1.

Create two Technical Working Groups (TWGs): (a) MEED0 TWG, (b) Resource Scanning/Diagnostic Audit TWG a. b.

2.

Draft Executive Orders to facilitate the creation of TWGs Orient the TWGs in relation to role and responsibilities

Conduct Public Economic Enterprise Diagnostic Audit a.

b.

A Diagnostic Audit should be conducted to identify the strengths, weaknesses and problems of the public economic enterprises The audit report should cover the following components: 1) Market Planning 2) Organization and Management 3) Financial Management 4) Legal/Taxation and 5) Technical Considerations.

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Expected Output Executive Orders to create TWGs

Timeframe

Responsible Persons/unit

2 days

Mayor’s Office

Resources/ Budget Required Commitment of personnel

1 day workshop

Mayor’s office

Approx P7,000.00

2-3 weeks

R/SD MTWG

Municipal Economic Enterprise and Development Technical Working Group Created: Composition of MEEDO TWG: the Planning and Development Officer, Municipal Treasurer, MEEDO Manager, Municipal Engineer, SB Secretary, and Budget Officer. Resource Scanning/Diagnostic Audit TWG created Problems in relation to the LGU operation of public economic enterprises identified. Immediate action on improving operation of public economic enterprises also identified. The setting-up of MEEDO discussed. Public enterprises assessed on planning, organization and management, financial management, legal, and technical aspect: absent, badly needs updating, updating desirable, adequate at present, and adequate for the future Audit report finalized at R/SD MTWG level and at MEEDO MTWG

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Increasing Income through Sustainable Public Economic Enterprise Management NAAWAN, MISAMIS ORIENTAL Implementation Steps

Expected Output

Timeframe

Responsible Persons/unit

Resources/ Budget Required

4-5 months

Mayor’s Office

Approx P20,000 for:

Draft ordinance is finalized at the MEEDO TWG level

MEEDO TWG

Draft ordinance is reviewed and approved by the SB

SB

P5,000 (Drafting ordinance and review)

level, then reviewed and approved by the SB

3.

Create the MEEDO with Defined Organizational Structure a.

4.

5.

Create the Municipal Economic Enterprise Development Office through an ordinance. b. The ordinance should mandate the creation of: 1) an eight-member Management Board which shall be responsible for the overall management and supervision of MEEDO, with the Municipal Mayor as Chairman, 2) a Project and Development Committee lending support to the MEEDO, composed of key LGU personnel 3) MEEDO established with a fulltime MEEDO Manager Obtain legislative, legal & institutional support, which includes coming up with the appropriate ordinances, the Implementing Rules and Regulations (IRR) that will also serve as the Manual of Operations for the office, etc. Ensure the necessary Budgetary Appropriation for Project Implementation

6.

Develop the capacity of MEEDO personnel in the different aspects of public enterprise management

7.

Operationalize the MEEDO by setting up or streamlining standardized procedures for the different public economic enterprises

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Recommendation made to create the MEEDO Draft ordinance creating the MEEDO formulated

P15,000 (Launching)

MEEDO is initially operationalized MEEDO is launched

Ordinances, implementing rules and regulations, institutional commitment and partnership, concrete assistance being offered to the LGU on public economic enterprise managements

On-going

Provide budgetary appropriation in the Annual Budget for the MEEDO office.

MEEDO personnel trained on: Public Market Operations Enterprise Development Financing Forum of Land Bank of the Philippines Partners/Policy Forum Computerization: Water billing and collection and Launch your Business software installed; MEEDO staff assume respective roles/functions.

MEEDO

Mayor’s Office SB Office

3 days 4 days 1 day 2 days Continuous

Mayor’s Office

MEEDO

Committed and creative MEEDO leadership, meeting costs

MEEDO leadership, budget for MEEDO operations (P1.2M) P40,000 for capacitybuilding

Operational budget and committed staff

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Increasing Income through Sustainable Public Economic Enterprise Management NAAWAN, MISAMIS ORIENTAL Implementation Steps 8.

Ensure sustainability of the MEEDO

Expected Output Sustainable and profitable public economic enterprises and active MEEDO

Timeframe

Responsible Persons/unit

Continuous

MEEDO

Resources/ Budget Required Operational budget and committed staff

Analysis and Lessons Learned The various components of MEEDO establishment can be easily replicated by other municipalities of any income class that are operating public economic enterprises but experiencing difficulties in managing them. Several lessons can be learned from the experience of Naawan in successfully managing their public economic enterprises through the MEEDO: •

Strong political will. An important lesson learned from the MEEDO operations in Naawan is that political will in implementing new approaches to public economic enterprise management is necessary to attain success. This is especially true when deciding to create a special office. The selection of the right people to manage it and the enforcement of rules and regulations, especially in collection, require political will.

Efficiency and institutional support to the MEEDO. The general community perception is that public economic enterprises are established as a service facility. However, there is a need to run them like a business. Institutional support is thus crucial to make this possible. While the short-term goal is not to create profit but to reduce deficit, public enterprises should eventually be financially efficient and profitable. This, however, requires political will, institutional support and efficiency.

Capacity and the right attitude of staff. Efficiency translates to ensuring that MEEDO staffs have the correct work attitude, characterized by dedication, professionalism and honesty. It also requires that the LGU, particularly the MEEDO personnel, enhance its capacity in enterprise development and financial management.

Need for good supervision and management of MEEDO. Improved efficiency in public enterprise management under MEEDO is a result of a more focused supervision of its various projects. The LGU must have a pool of qualified personnel to efficiently manage the MEEDO and its leadership must have the political will to impose policies and legal measures to deal with delinquencies among beneficiaries or consumers. There should also be a harmonious relationship between the executive and legislative (SB) branches of the local government.

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Increasing Income through Sustainable Public Economic Enterprise Management NAAWAN, MISAMIS ORIENTAL

•

Clear direction on how revenues from public economic enterprises can be plowed back to development projects that would benefit the community. An important consideration for project sustainability is how the collected revenues from the various economic enterprises can be utilized or plowed back into development projects that will benefit the municipality. A portion of the revenues can also be retained for research & development of other public enterprises, and capacity building of staff.

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Increasing Income through Sustainable Public Economic Enterprise Management NAAWAN, MISAMIS ORIENTAL

Annex A Results of the Diagnostic Workshop The following are some of the major weaknesses identified by the Diagnostic Audit: •

Financial management system needs upgrading to improve profitability of the PEE. Net income from market operations remained small because of large personnel costs (i.e. salaries) that were charged on these projects. Naawan’s public economic enterprises were not able to financially support their own operations and had to be subsidized by the LGU.

Absence of a management system manual that clearly defines duties and responsibilities of MTO and MEO. Their system of record keeping had to be improved to provide better estimates of LGU income from public enterprises. Their financial management system needed upgrading to improve profitability. These two offices had other responsibilities as well, which stretched their already limited human resource. These resulted in inefficiencies in the delivery of services and revenue collection.

Existing market facilities need either replacement or repair. The limited area where the public market and terminal are located is presently crowded.

The LGU does not have an updated Municipal Tax Code and Market Code, and is still using the Local Tax Code drafted in 1992

The LGU has no development or improvement plan for the Public Market enterprise, and has not appropriated plans for its rehabilitation.

PEE personnel and who do not have sufficient technical and management skills to assist entrepreneurs in business development

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Increasing Income through Sustainable Public Economic Enterprise Management NAAWAN, MISAMIS ORIENTAL

Annex B Naawan MEEDO Organizational Chart

MEEDO BOARD Project & Dev’t Com.

MEEDO MANAGER

Staff

Billing &Cash Ticket Section

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Production & Maintenance Section

Inspection & Sanitation Inspection Section

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Increasing Income through Sustainable Public Economic Enterprise Management NAAWAN, MISAMIS ORIENTAL

Annex C Outline of MEEDO PEE Operations Operation and management of the various PEEs are clearly defined in the MEEDO IRR. The following is an outline of the PEE operations by the MEEDO. 1. Operations of the Naawan Municipal Water System (NMWS) The NMWS follows a standardized procedure of installation, maintenance and billing of water use by different consumers • • • •

Water connection - installation of distribution pipeline and water meters Meter reading and billing by a team of three meter readers Payment of fees at the Municipal Treasurer’s Office Delinquency, penalty, disconnection and reconnection

Water Pricing Mechanism. The water-use pricing scheme adopted by the NMWS after its expansion and which is currently managed by MEEDO is described as an increasing block pricing. This means that consumers pay an increasing rate per unit block water consumption beyond a minimum rate of P50 for the first 10 cu.m. (M.O. No. 07, s. 2003). Many economists consider this scheme to be the most efficient and equitable (as compared to flat rates) means of pricing use of water resources supplied by municipal governments. 2. Public Market/ Terminal Operations Operations at the Naawan Public Market involve the following procedure: • • •

Lease of LGU property through a contract approved by the Mayor Billing (issuance of a Statement of Account by the MEED Office) and collection Delinquency, penalty/demand notice and termination of lease contract

A new schedule of rental fees for stalls and tables was implemented in 2000, as follows: Concrete stalls/store Semi-concrete stalls Wooden core stalls Meat tables (class.1) Meat Tables (class.2) Fish Tables Vegetable Tables

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P350.00/month P250.00/mo. P150.00/mo. P200.00/mo. P160.00/mo. P100.00/mo. P3.00/day

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Increasing Income through Sustainable Public Economic Enterprise Management NAAWAN, MISAMIS ORIENTAL

Cash Ticket Collection. A full-time collector issues Cash Tickets (locally known as “sukay”) to extract payment for use of the public terminal by all forms of commercial or public transport, based on the following schedule of fees: Commercial delivery vans Public Utility Jeep (PUJ) Motorcycle “Habal-habal” Motorized “Sikad” Manual “Sikad”

-

P10.00 per delivery P 4.00 per round trip P 2.00 per day P 2.00 per day P 1.00 per day

The Cash Ticket scheme is also the mode of collecting daily rents from vegetable tables. The market collector remits all earnings to the MEEDO on Monday of each week, which the MEEDO Manager submits to the MTO after recording. 3. Municipal Slaughterhouse The municipal slaughterhouse located in BLISS, Naawan provides a sanitary facility for butchering farm animals to supply meat to the public market. Only butchers who are issued licenses by the LGU after paying a fee of P200/year are allowed to use the facility. The butcher’s fee is a private transaction between him and the owner of the animal. MEEDO collects a fee of P1.00/kg for every head of cattle (cow or carabao) and P0.50/kg of pig/swine. A Health & Sanitary Inspector (HSI) attached to the MEEDO inspects and certifies the meat as safe for human consumption, collects the fees for the LGU, and remits these to the MTO. The Public Economic Enterprises being managed by Naawan MEEDO: (from left to right) water system, public market, & slaughterhouse.

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Naawan, Mis.Or. - PEE