August 24, 2004
MINUTES OF THE REGULAR MEETING OF
THE SAN FRANCISCO RESIDENTIAL RENT
STABILIZATION & ARBITRATION BOARD,
Tuesday, August 24, 2004 at 6:00 p.m. at
25 Van Ness Avenue, Suite 70, Lower Level
I. Call to Order
II. Roll Call
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Commissioners Present:
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Becker; Henderson; Hurley; Justman;
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Marshall; Mosbrucker; Mosser;
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Wasserman.
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Commissioners not Present:
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Gruber.
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Staff Present:
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Gartzman; Wolf.
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III. Approval of the Minutes
IV. Remarks from the Public
A. Carolyn Cahn, President of the Parkmerced Residents' Organization (PRO),
informed the Commissioners that Genevieve Callejo, the tenant appellee in
the case concerning 552 Arballo (AL040084), had fractured her hip and is in
the hospital. Ms. Callejo also has double pneumonia. Ms. Cahn stressed that
Parkmerced has known about and refused to address errors in their PG&E
passthrough calculations, which has forced the issuance of a Decision by the
Rent Board.
B. Robert Pender, Vice-President of PRO, distributed a copy of PRO's most
recent newsletter and announced the date and time of the organization's next
meeting.
C. Ernestine Weiss spoke regarding problems she perceives at the Golden Gateway
complex. Ms. Weiss filed a petition alleging a substantial decrease in housing
services due to rust in her shower, which was denied. Ms. Weiss said that
she is "frustrated and disgusted," and won't even bother to appeal.
Ms. Weiss also alleged that the Board is "unfair" and "corrupt,"
and admonished the Commissioners to "be aware of what's going on in the
City.
D. Joseph Bravo, Attorney for Parkmerced (Olympic View Realty), brought to
the Board's attention a letter he filed after the briefing deadline in the
case. He asked that the Commissioners consider his request for Technical Correction
and additional argument.
E. Kenneth Perez, the tenant in the case at 201 Leavenworth (AT040094), told
the Board that there has been illegal activity in his building, including
mail fraud. A letter that he had written concerning these topics was returned
to him.
V. Consideration of Appeals
The tenant's petition alleging decreased housing services was dismissed due
to the tenant's failure to appear at the properly noticed hearing. On appeal,
the tenant alleges non-receipt of the Notice of Hearing, and attaches the
requisite Declaration of Non-Receipt.
B. 530-1/2 Noe St. AL040092
The tenant's petition alleging unlawful rent increases was granted and the
landlords were found liable to the tenant in the amount of $6,088.70. On appeal,
the landlords claim that: since the tenant moved out of the unit prior to
issuance of the Decision of Administrative Law Judge (ALJ), the Decision should
be moot; the ALJ engaged in ex parte communication with the tenant after the
hearing; the refund goes back longer than the 3-year Statute of Limitations;
allowable rent increases are not offset from sums owing from the landlords
to the tenant; the tenant perjured herself during the hearing; and the rental
agreement between the parties provides that any disputes are to first be taken
before the Community Boards mediation program.
C. 1408 California #201 AT040093
The tenant's petition alleging decreased housing services due to alleged
noise emanating from another unit in the building was denied. The tenant appeals,
claiming that: the Administrative Law Judge erred in finding that she failed
to meet her burden of proof; ceiling tiles are not sound barriers; other tenants
in the building are not affected by the noise in the unit below, which can
only be experienced in the tenant's unit; she does not wish to move from her
unit, and it is the offending neighbor who should have to do so; and the situation
is having a deleterious effect on the tenant's health.
D. 201 Leavenworth #411 AT040094
The tenant's petition alleging various decreases in housing services was
denied. On appeal, the tenant claims that the Decision constitutes a gross
misinterpretation of the facts concerning Federal mail fraud, as well as a
series of crimes committed against the tenant in the building.
MSC: To recuse Commissioner Mosser from consideration of this appeal.
(Mosser/Justman: 5-0)
MSC: To deny the appeal. (Hurley/Murphy: 5-0)
E. 552 Arballo Dr. AL040084
The tenants' petition alleging that the landlord incorrectly calculated the
PG&E passthrough was granted and the landlord was found liable to the
tenants in the amount of $302.77. Additionally, the current passthrough in
the amount of $23.17 was reduced to $0.18. On appeal, the landlord asserts
that: the landlord should not be required to provide PG&E bills and evidence
establishing laundry room utility usage for base year 1979-1980 because the
tenants did not previously challenge the claimed 1979-1980 base year utility
costs and the landlord did not own the property at that time; the landlord's
utility cost spreadsheet which includes data "inherited" from prior
owners is reliable evidence to establish utility costs between 1979-1999;
the landlord did not discontinue the tenants' utility passthrough in 1987
when no passthrough was imposed, but rather preserved its 1979-1980 base year;
the landlord's decision to continue the prior passthrough amount as a "place
holder" instead of recalculating a new amount for the tenants' 2000-2001
passthrough should not result in the establishment of a new base year under
Rules and Regulations Section 4.11(c); and, there is adequate evidence to
establish base year and comparison year utility costs for each of the relevant
passthrough periods.
MSC: To recuse Commissioner Becker from consideration of this appeal.
(Becker/Justman: 5-0)
MSC: To deny the appeal except to remand the case to the Administrative
Law Judge for a necessary Technical Correction. (Marshall/Henderson: 3-2;
Mosser, Murphy dissenting)
VI. Public Hearings
A. Proposed Amendments to Rules and Regulations Sections 1.19, 4.11 and
10.12 and Proposed New Rules Sections 6.16 and 10.13 Regarding Utility Passthroughs
A Public Hearing regarding proposed amendments to the Rules pertaining to
calculation of utility passthroughs was convened at 7:05 p.m. President Wasserman
explained to those assembled that Supervisor Peskin had held hearings on issues
regarding PG&E passthroughs before the Housing and Land Use Committee
of the Board of Supervisors. As a result of those hearings, Supervisor Peskin
asked the Rent Board to make some revisions to the existing procedures, so
that the Board of Supervisors did not have to take up the issue. A Public
Hearing was held on two proposals, one with indexing for inflation and one
without. Subsequently, Commissioner Justman worked with staff on drafting
a compromise proposal, which was the subject of the instant Public Hearing.
Twelve individuals testified as follows below:
1. Tenant Ernestine Weiss said that she appreciated all the hard work the
Commissioners put in, but that it wasn't necessary: it would be simpler to
just include utility costs in the base rent that the tenant pays. Ms. Weiss
said that she believes her landlord, the Golden Gateway complex, received
rebates from PG&E that they won't reveal. She wondered: "Where is
the Sunshine Ordinance?"
2. Tenant Laura Traveler suggested that where the proposed regulations say
"landlord," it should specify "landlord of record." She
said that Olympic View Realty is using a spreadsheet from the prior owner,
since they do not have the supporting documents. Despite her one suggestion,
Ms. Traveler declared herself "very pleased" with the proposed amendments.
3. Tenant Carolyn Cahn also thanked the Commissioners for their hard work.
She told the Board that it is difficult for tenants to prove their contentions,
since they are not allowed to subpoena the owner's records; it is easier for
large landlords to hide information; and it takes tenants some time to realize
there are problems.
4. Tenant Beatrice Wahlbeck posed several questions, including: the status
of improper pre-2002 passthroughs; whether tenants will be able to petition
for an alternate base year; and whether changes in garage rentals will result
in changes to how the passthrough is calculated.
5. Tenant Robert Pender seconded the comments of Laura Traveler and Carolyn
Cahn. Mr. Pender registered his displeasure with the way the regulations are
written, and requested that they be drafted in "plain English" or
he will not support them.
6. Landlord Attorney Barbara Herzig spoke on behalf of the landlords at the
Golden Gateway complex and Parkmerced. Ms. Herzig voiced a concern that there
is a transitional period between the old and new regulations during which
time a landlord will lose the passthrough; she also believes that there is
a due process problem with having to prove an alternate base year that is
very old. Ms. Herzig postulated that, at some point, a landlord's right to
a certain rental amount vests, and cited the Palacio case as authority.
Ms. Herzig finally stated that the regulations' treatment of laundry room
income constitutes an expropriation of an individual source of income.
7. Landlord Attorney Nancy Lenvin spoke on behalf of the landlords at the
Golden Gateway complex, and said that her client cannot support the regulations
as written. Ms. Lenvin maintained that: the proposed amendments are in conflict
with the Ordinance; there is no need for revision of the existing system;
the Golden Gateway landlord wishes to keep their existing base year and will
not be able to do so, which renders the system confiscatory; the annual rent
increase was intended to recover other costs; and the entire regulatory scheme
is getting shaky. Ms. Lenvin cited the Kavanaugh and Galland
cases.
8. Mitchell Omerberg spoke on behalf of the Affordable Housing Alliance,
which he said was generally supportive of the proposed compromise amendments.
Mr. Omerberg said that having a landlord petition requirement will "clean
up mistakes"; landlords should have to prove their base year; there is
a "double collection issue" because operating expenses include utilities;
and indexing would address the inflationary effects of money. Mr. Omerberg
finished with an exhortation to the Board to "move forward, with this
amount of work."
9. Janan New submitted written comments in opposition to the amendments on
behalf of the S.F. Apartment Association, especially ruing the complexity
of the proposal.
10. Property manager Richard Lee suggested that where laundry facilities
are not separately metered and there is not a third party vendor or user fee,
the landlord should be able to pass through any increase in the cost of the
building's utilities. He was informed that his concern was addressed in the
proposed amendments.
11. Landlords' representative Andy Braden told the Board they spent lots
of time, but weren't trying to make it simple. He suggested that the Commissioners
just apply the 60% of CPI figure to the base year costs, which reflects inflation.
He also pointed out that increases are almost always for heat, and not electrical.
Since garages aren't heated, tenants using the garage will pay a disproportional
share - especially since the cost of lights in a garage are "miniscule."
12. Joseph Bravo, Attorney for Parkmerced, said that laundry costs could
be calculated pursuant to "a simple formula." Mr. Bravo was concerned
about the "standard of proof." Now, the fact that the landlord will
have to prove their base year costs will result in keeping records for many
years. However, the Statute of Limitations provides that a tenant must challenge
a passthrough within one year; the landlord does not have subpoena power to
get the records from the prior owner; and PG&E won't provide records from
a period of prior ownership.
After the conclusion of the Public Hearing at 8:00 p.m., the Commissioners
discussed the proposal. Commissioner Becker pointed out that many tenants
move in under an agreement where the landlord pays for utilities, and these
charges are on top of that. Commissioner Murphy said that he could not support
a Rule that makes people prove up something that they've relied upon for years,
although he would support having to prove base year costs on a going-forward
basis. Commissioner Henderson suggested that landlords might have to go to
court to subpoena records. President Wasserman pointed out that there are
several methods of proving costs besides the actual bills. Commissioner Marshall
was concerned that landlords who testified wished to be able to prove the
actual costs of utilities that serve the laundry facilities, and thought they
should have that option. She suggested that the following additional language
be added as Section 6.16(g)(iv): "where the laundry facilities are not
separately metered in both the `base year' and `comparison year', the landlord
deducts the actual costs of utilities that serve such laundry facilities,
if proved by the landlord."
MSC: To adopt the proposed amendments to Rules and Regulations Sections
1.19, 4.11 and 10.12 and proposed new Rules and Regulations Sections 6.16
and 10.13 regarding utility passthroughs, including new subsection 6.16(g)(iv),
effective November 1, 2004.
The amendments read as follows below:
Section 1.19 Tenant's Utilities
For the purpose of Ordinance Section 37.2 (q) and Sections
4.11 and 6.16
of these Rules, "Tenant's Utilities" means charges for
natural gas or electricity provided by Pacific Gas and Electric Company
directly to the unit occupied by the tenant or to the building in which
the unit is located and benefiting the tenant, whether paid by the tenant
alone, by the landlord alone, or part by the tenant and part by the landlord.
Section 4.11 Computation of Passthrough of Gas
and Electricity
The following provisions shall apply to utility passthroughs where the
notice of rent increase for the utility passthrough was served prior to
or on [the effective date of Section 6.16], except that with respect to
such utility passthroughs, the passthrough shall be discontinued twelve
months after it was imposed or by [60 days after the effective date of
Section 6.16], whichever is later.
(a) No landlord may pass through any increase in the cost of the utilities
to a tenant until the tenant has occupied one or more units in the subject
building for one continuous year. Each utility passthrough may be charged
to the tenant only at the time of an annual rent increase.
(b) Where a landlord pays for gas, electricity, and/or steam and seeks
to recover the increase in the cost of these utilities from tenants, the
landlord shall calculate the amount of such increase by using either of
the following two methods, both of which should always yield the same
results:
(1) Method 1: Compile the utilities receipts for the two calendar
years preceding the first noticing of the utility passthrough. The calendar
year immediately preceding the noticing shall be referred to as the
"comparison year;" the calendar year preceding the "comparison
year" shall be referred to as the "base year." The base
year will remain the same for all future calculations, except where
the pass through is discontinued pursuant to subsection (c) below. Different
tenants in the same building may have different base years depending
on when they moved into the building and when utility increases were
first passed through to them.
(i) Calculate the total utility cost for the comparison year and
the total utility cost for the base year.
(ii) Subtract the total base year utility cost from the total comparison
year utility cost. If there is no increase or if there has been a
decrease, no pass through for the current calendar year is allowed
and any increase levied in a prior year must be discontinued.
(iii) Divide the resulting figure, if greater than zero, by 12 to
determine the average monthly utility increase or decrease for the
entire building.
(iv) Divide the average monthly utility increase or decrease by the
number of rooms in the building. For the purposes of this section
the number of rooms in a building shall be calculated by presuming
that single rooms without kitchens are one room units, studios are
two room units, one bedroom units without a separate dining room are
three room units, and so on.
(v) If a utility pass through has been instituted, subsequent passthroughs
shall be determined for the immediately following year by calculating
the utility cost for the calendar year preceding the noticing of the
passthrough. This amount shall become the updated comparison year
figure. The passthrough shall then be calculated in accordance with
Rules and Regulations Sections 4.11(b)(1)(ii) through 4.11(b)(1)(iv).
(2) Method 2: Alternatively, the landlord may choose, in subsequent
years, to use the prior year's "comparison year" as the current
base year and subtract the updated base year amount from the new comparison
year total utility cost. The resulting amount would be added to the
prior year's total utility passthrough. The passthrough shall then be
calculated in accordance with Rules and Regulations Sections 4.11(b)(1)(iii)
through 4.11(b)(1)(v).
(c) Until such time as an annual rent increase is noticed the current
pass through shall remain in effect. However, if a landlord does not recalculate
and re-notice the pass through at the subsequent annual rent increase,
the entire pass through is discontinued until recalculated and re-noticed.
At such time as a new pass through is calculated and noticed, a new base
year is established which shall be the calendar year preceding the new
comparison year.
(d) In the event that more than one year has passed since the imposition
of the last PG&E pass through, the landlord must adjust for any increases
or decreases that have occurred since the last pass through was implemented,
so that the tenant receives the benefit of any utility decrease that occurred
in the intervening period.
(e) Nothing in this section or in these Rules and Regulations shall be
interpreted as requiring any landlord to pass through any utility increase
or to raise any tenant's rent. However, where the utility costs decrease
in years subsequent to the passing through of an increase, the tenant
must be given the benefit of such decrease calculated in the same manner
as any increase passed through under Ordinance Section 37.2(n). A tenant
may petition the Board for an arbitration hearing whenever a pass through
charge has been noticed or is in effect and the tenant protests the amount
being charged or the calculation procedure being used by the landlord.
If the comparison year utility costs fall below the base year costs, the
landlord shall not be required to reduce the rent beyond eliminating any
utility pass through made in prior years.
(f) If the methods set forth for an increase (or decrease) in utilities
in subsection (b) of this Section cannot be applied for reasons beyond
the control of the landlord, and in the absence of a relevant agreement
between the landlord and the tenant, the landlord may petition the Board
for an arbitration hearing to establish an appropriate alternative method,
which shall be used for all following years unless another method is approved
by the Board.
(g) The amount of rent due from the tenant for any utility pass through
shall be due on the same date as a rent payment normally would be due.
(h) No amount passed through to the tenant as a utility increase shall
be included in the tenant's base rent for purposes of calculation of the
amount of rent increases allowable under the Ordinance and these Rules
and Regulations.
(i) The provisions of this Section shall be deemed a part of every rental
agreement or lease, written or oral, for the possession of a rental unit
subject to the Ordinance unless the landlord and the tenant agree that
the landlord will not pass through any utility increases, in which case
such agreement will be binding on the landlord and on any successor owner
of the building, unless such agreement is changed in accordance with applicable
law.
(j) Where a utility increase has been lawfully passed through to the
tenant, a change in the ownership of the building in which the tenant's
unit is located will not affect the tenant's liability to pay the amount
passed through or the tenant's entitlement to the benefit of decreases
in the utilities costs.
Section 6.16 Utility Passthrough
The following provisions shall apply to utility passthroughs where the
notice of rent increase for the utility passthrough was served after [the
effective date of Section 6.16]:
(a) Where a landlord pays for gas, electricity
and/or steam provided directly to the unit occupied by the tenant and/or
to the common areas of the property in which the unit is located, and
seeks to recover the increase in the cost of these utilities from the
tenant, the landlord must file a petition for approval of the utility
passthrough on a form prescribed by the Board. The petition shall specify
the units on the property that are subject to the petition. The petition
will be decided without a hearing unless the Administrative Law Judge
determines that a hearing is required.
(b) Determination of Initial "Base Year"
(i) For all tenancies existing on December 31, 2003,
the initial "base year" for purposes of this section shall be
calendar year 2002.
(ii) However, where a utility passthrough is in
effect for a tenancy on [the effective date of this amendment], the landlord
may elect to use calendar year 2002 as the initial "base year"
or elect to continue to use the earlier "base year" for all future
utility passthrough calculations, provided that the landlord petitions the
Board for approval of the earlier "base year" and the Board determines
that the earlier "base year" is proper under Section 4.11 of these
Rules.
(iii) For all new tenancies commencing after December
31, 2003, the initial "base year" shall be the calendar year immediately
preceding the year of the inception of the tenancy.
(iv) A landlord may petition the Board for approval
of an alternate "base year" if the landlord became an owner
of record after December 31, 2002 and demonstrates a good faith, but unsuccessful,
effort to obtain the utility bills from the former landlord and/or the
utility company that are necessary to establish the "base-year"
utility costs required by subsections (b)(i), (b)(ii) or (b)(iii). The
Board will not approve an alternate "base year" that creates
exaggerated results unless the proposed alternate "base year"
coincides with the landlord's first full calendar year of ownership.
(c) Subsequent Adjustments to Initial "Base
Year"
Different tenants in the same property may have
different initial "base years" depending on when they moved into
the property or whether the Board has approved use of an earlier "base
year" pursuant to subsection (b)(ii) above or use of an alternate "base
year" pursuant to subsection (b)(iv) above. The initial "base
year" utility costs shall be adjusted every five years as follows:
(i) Where the initial "base year" is 2002
or later, a new "base year" is established at the end of every
fifth calendar year after the initial "base year". For example,
where the initial "base year" is 2002, the new "base year"
shall be 2007 for petitions filed between January 1, 2009 and December 31,
2013. If the tenancy continues for an additional five years, the "base
year" will become 2012 for petitions filed between January 1, 2014
and December 31, 2018, and so on. For another example, where the initial
"base year" is 2004, the new "base year" shall be 2009
for petitions filed between January 1, 2011 and December 31, 2015. If the
tenancy continues for an additional five years, the "base year"
will become 2014 for petitions filed between January 1, 2016 and December
31, 2020.
(ii) Where the initial "base year" is
prior to 2002 and has been approved by the Board pursuant to subsection
(b)(ii) above, the landlord may elect to keep said "base year"
for purposes of future utility passthrough calculations without regard to
subsection (c)(i) above. However, in such a case, the landlord must adjust
the "base year" utility costs every five years beginning with
utility passthrough petitions filed in 2009. The first "base year"
adjustment shall equal the difference, if more than zero, between 2003 utility
costs and 2007 utility costs, and it shall be added to the "base year"
utility cost used by the landlord. This "base year" adjustment
shall be in effect for petitions filed between January 1, 2009 and December
31, 2013. Every fifth year thereafter (i.e. 2014, 2019, etc.), the landlord's
petition shall include another "base year" adjustment equal to
the difference in utility costs, if more than zero, for each subsequent
five-year period (e.g., 2008 and 2012, 2013 and 2017, etc.). If utility
costs decrease during any five-year adjustment period, then no adjustment
shall be required to the "base year" utility costs, but the landlord
must deduct the amount of the decrease from the difference between the initial
"base year" utility costs and the new "comparison year"
utility costs. For example:
(A) Suppose a tenant's approved "base year"
is 1986, and the 1986 utility costs are $15,000. In 2009, the landlord must
calculate the difference between the 2003 utility costs ($20,000) and the
2007 utility costs ($30,000). Since utility costs increased between 2003
and 2007, the landlord must add the increase ($10,000 [$30,000 minus $20,000])
to the initial "base year" utility costs ($15,000) and then compare
the adjusted "base year" utility costs ($25,000 [$10,000 + $15,000])
to the 2009 "comparison year" utility costs ($35,000) in order
to calculate the new utility passthrough ($10,000 [$35,000 minus $25,000]).
(B) If utility costs have decreased (e.g.,
2003's utility costs = $20,000 and 2007's utility costs = $15,000), then
the landlord does not adjust the 1986 "base year" utility costs
($15,000), but must deduct the decrease ($5,000 [$20.000 minus $15,000])
from the 2009 passthrough as follows: $35,000 (2009 utility costs) minus
$15,000 (1986 utility costs) = $20,000 minus $5,000 (decrease between 2003
and 2007) = $15,000 new utility passthrough.
(d) Determination of "Comparison Year"
For purposes of this section, the "comparison
year" in all cases shall be the calendar year immediately preceding
the filing of the landlord's petition for approval of the utility passthrough.
(e) The landlord must file a petition before giving
legal notice of a rent increase for a utility passthrough. The petition
must be filed no more than twelve months after the "comparison year"
listed in the petition. The notice of rent increase shall be in conformance
with the requirements set forth in Section 4.10 above and shall further
include the dollar amount requested for the utility passthrough. This
increase for the utility passthrough shall be inoperative unless and until
the petition is approved by the Administrative Law Judge. Any amounts
approved by the Administrative Law Judge shall relate back to the effective
date of the legal notice, if given. A landlord may choose instead not
to serve legal notice of a proposed utility passthrough until after the
decision of the Administrative Law Judge is rendered. In any event, no
rent increase approved by the Administrative Law for a utility passthrough
shall become effective until the tenant's anniversary date.
(f) No landlord may pass through any increase
in the cost of utilities to a tenant until the tenant has occupied the
unit in the subject property for one continuous year.
(g) Where the utility bills include the cost of
gas and/or electricity for laundry facilities and the landlord charges
a user fee for the laundry facilities, the landlord may not pass through
any increase in the building's cost of utilities unless the landlord complies
with one of the following subsections:
(i) where the laundry facilities are separately
metered in both the "base year" and "comparison year",
the landlord shall not include the utility costs for the laundry facilities
in the utility passthrough calculation; or
(ii) where the laundry facilities are not separately
metered in both the "base year" and the "comparison year"
and there is a third party vendor that collects the user fees from the laundry
facilities, the landlord shall deduct the income actually received by the
landlord from the third party vendor from the total utility costs for the
building; or
(iii) where the laundry facilities are not separately
metered in both the "base year" and the "comparison year"
and there is not a third party vendor that collects the user fees from the
laundry facilities, the landlord shall deduct 50% of the user fees actually
collected by the landlord from the total utility costs for the building;
or
(iv) where the laundry facilities are not separately
metered in both the "base year" and "comparison year",
the landlord deducts the actual costs of utilities that serve such laundry
facilities, if proved by the landlord.
(h) Where the utility bills include the cost of
gas and/or electricity for laundry facilities and the laundry facilities
are not available to or operated for the benefit of the tenant, and the
laundry facilities are not separately metered in both the "base year"
and "comparison year", the landlord may not pass through to
that tenant any increase in the building's cost of utilities.
(i) The landlord shall calculate the amount of
the utility passthrough as follows:
(i) Compile the utility bills for the "base
year" and the "comparison year" as defined in subsections
(b), (c) and (d) above. The utility passthrough shall be based on actual
costs incurred by the landlord during the relevant calendar years, regardless
of when the utility bill was received or paid.
(ii) Calculate the total utility cost for the "base
year" and the total utility cost for the "comparison year".
(iii) Where applicable, compile evidence of any
and all laundry facilities income actually received or collected by the
landlord for the use of the laundry facilities in the "base year"
and the "comparison year". Calculate the total laundry facilities
income for the "base year" and the total laundry facilities income
for the "comparison year".
(iv) Where applicable, subtract the laundry facilities
income from the total utility cost for the "base year" and the
total utility cost for the "comparison year".
(v) Subtract the total "base year" utility
cost (excluding laundry facilities income) from the total "comparison
year" utility cost (excluding laundry facilities income) to get the
utility cost increase. If there is no increase or if there has been a decrease,
no passthrough is allowed.
(vi) Divide the resulting figure, if greater than
zero, by twelve (12) to determine the average monthly utility increase for
the entire property.
(vii) Divide the average monthly utility increase
by the number of rooms in the property to get the amount of the utility
passthrough that may be imposed for each room. For purposes of this section,
the number of rooms in a property shall be calculated by presuming that
single rooms without kitchens are one room units, studios are two room units,
one bedroom units without a separate dining room are three room units, and
so on. Each parking space and garage space in the building, which is included
in a tenant's rental or for which a user fee is charged, shall be counted
as one room. Areas used for commercial purposes but for which no user fee
is charged to the tenants, including but not limited to management offices
and retail space, shall be included in the room count in a manner that most
reasonably takes into account the size of the space and its utility usage.
(viii) To get the monthly utility passthrough for
a unit, add the number of rooms in the unit to the number of rooms for parking
and/or garage spaces included in the tenant's rental or for which a user
fee is paid by the tenant, and multiply that total number of rooms by the
monthly utility increase per room.
(j) Each utility passthrough shall apply only
for the twelve-month period after it is imposed.
(k) Nothing in this section or in these Rules
and Regulations shall be interpreted as requiring any landlord to pass
through any utility increase or to increase any tenant's rent.
(l) The amount of rent due from the tenant for
any utility passthrough shall be due on the same date as a rent payment
normally would be due.
(m) A utility passthrough may be imposed only
at the time of an annual rent increase. However, no amount passed through
to the tenant as a utility increase shall be included in the tenant's
base rent for purposes of calculation of the amount of rent increases
allowable under the Ordinance and these Rules and Regulations.
(n) The provisions of this Section shall be deemed
a part of every rental agreement or lease, written or oral, for the possession
of a rental unit subject to the Ordinance unless the landlord and the
tenant agree that the landlord will not pass through any utility increases,
in which case such agreement will be binding on the landlord and on any
successor owner of the property.
(o) Where a utility increase has been lawfully
passed through to the tenant, a change in the ownership of the property
in which the tenant's unit is located will not affect the tenant's liability
to pay the amount passed through.
Section 10.12 Documentation of Gas and Electrical
Increases
The following provisions shall apply to utility passthroughs where the
notice of rent increase for the utility passthrough was served prior to
or on [the effective date of Section 6.16]:
(a) A tenant may petition for an arbitration hearing if the landlord
has failed to provide the tenant with a clear explanation of the charges
for gas and electricity on which an increase is being based.
(b) The landlord shall have the burden of proving the calculations upon
which this increase is based.
(c) A petition based on this section shall be accompanied by the notice
of increase.
Section 10.13 Improper Utility Passthrough
The following provisions shall apply to utility passthroughs where the
notice of rent increase for the utility passthrough was served after [the
effective date of Section 6.16]:
(a) A tenant may petition for an arbitration hearing if the landlord
has increased the tenant's rent based on an increase in utility costs,
but (1) has failed to file a petition for approval of the utility passthrough
pursuant to Section 6.16 of these Rules, or (2) has failed to discontinue
the utility passthrough after twelve months.
(b) The landlord shall have the burden of proving that the utility passthrough
has been approved and/or imposed in accordance with Section 6.16 of these
Rules.
(c) A petition based on this section shall be accompanied by the notice
of increase.
No one appeared to speak at the scheduled Public Hearing regarding this issue.
In order to conform Rules Section 2.15 regarding per diem compensation to
Rent Board Commissioners with Ordinance Section 37.4(h), the following language
was proposed:
Section 2.15 Per Diem Compensation
Each member shall receive $75.00 for each Board meeting attended if
the meeting lasts for six hours or more in a single twenty-four hour
period, and $70.00 if the meeting lasts less than six hours in a single
twenty-four hour period. If a member or the alternate is not in attendance
for an entire meeting, compensation shall be determined by reference
to the actual aggregate time the member was in attendance in proportion
to the total time of the meeting.
MSC: To adopt the proposed amendments to Rules and Regulations Section 2.15
regarding Commissioner compensation. (Justman/Mosser: 5-0)
VII. Communications
In addition to correspondence concerning cases on the calendar, the Commissioners
received a letter from Attorney Daryl Nelson regarding a Variance Application
at 1460 Montgomery Street, with possible adverse rent control repercussions
to her client, the tenant at the property. The Commissioners asked that a letter
be sent to the Planning Department, letting them know of the Rent Board's availability
to answer any questions regarding the Rent Ordinance or the impact of any Planning
decisions under the Rent Ordinance.
VIII. Director's Report
Acting Executive Director Wolf informed the Board that Kathy Chau, a 1424 Clerk-Typist,
has been "bumped" by another City employee due to layoffs in her classification.
Unless the situation changes due to employees' acceptance of "3 + 3"
retirement offers, Ms. Chau's last day in the office will be August 31st.
Ms. Chau is an excellent employee, and the Department is doing everything within
its power to retain her.
IX. Calendar Items
August 31, 2004 - NO MEETING
September 7, 2004
6 appeal considerations
New Business: Residential Hotel Visitor Policy
X. Adjournment