Appeal and Request for Review

Matthews tendered an appeal of the presiding officer's decision (POD), but it was untimely and cannot be filed. We will not consider this appeal.

The assigned Commissioner filed a timely request for review of the POD, which seeks review of the propriety of including the cost of water devoted to amenities in Meadows' water rates. Meadows has filed a response explaining that the majority of Meadows' tenants are on long-term leases of either five or ten years, with rent increases keyed to a cost of living indicator only. These leases were signed in the expectation that all water charges would continue to be paid separately during the lease term. If we disallow inclusion of the water cost for common areas in the current rates, Meadows would not be compensated for the cost of this water at all. As the tenants essentially receive all of the benefit of this water use, denying Meadows reimbursement would not be just and reasonable.

In the circumstances of this proceeding, inclusion of this common cost for the water in the rates is currently not unjust or unreasonable, and we will allow it. However, we do so with the admonition that this water cost should be included in the rental price in the future, as it is a variable cost over which the tenants have no direct control. Consequently, this issue will be subject to reexamination in the future at such time as the terms of a significant number of the current long-term leases expire.