Requests for Official Notice
Finally, we address two requests for official notice still outstanding. Hambly's December 7, 2000 filing asks us to notice three rent control documents attached to the filing: the City of Carson's Guidelines for Implementation of the Mobilehome Space Rent Control Ordinance and Application For Mobilehome Space Rent Increase; and Chapter 9.80 of the City of Sonoma's Municipal Code, entitled Mobilehome Park Space Rent Protection. Pursuant to Rule 73 the Commission may take official notice of such documents and we will do so, as Hambly requests, for the limited purpose of "reference and commentary" in briefing.
Hillsboro's January 11, 2001 request asks us to notice PG&E's residential gas tariff rates from January 1, 1987 through January 7, 2000 and residential electric tariff rates from July 15, 1993 through January 7, 1998. We grant Hillsboro's request with respect to all periods relevant to this complaint. On our own motion, we take notice of PG&E's residential electric tariff rates in effect through year-end 1998.
Findings of Fact
1. Hillsboro's receives from PG&E, on a monthly basis, a single master-meter bill for all gas and electric usage at the mobilehome park. The master-meter bill does not differentiate the tenants' individual usage and the common area usage (which includes streetlighting, the pool, and the clubhouse).
2. Though it is not calculated on the master-meter bill, the volumetric difference, on a kWh basis, between the master-meter bill and the total of the submeter bills represents the common area usage.
3. Hillsboro does not bill tenants directly for common area usage but recovers these costs through the rent control process.
4. Hillsboro has provided no documentation and no alternative proxy (to that specified in finding 7) for common area gas and electric usage.
5. In calculating the NOIs, Novato has recognized submetered receipts as an allowed income item and subtracted, as an allowed expense item, the master-meter bill. These two items do not cancel one another, but on the other hand, their difference, on a dollar basis, does not provide an accurate measure of gas and electric common area usage.
6. Mobilehome park owners have failed to follow the express direction of D.95-08-056, since they have not raised, in any generic proceeding at the Commission, whether common area and electric pedestal costs are statutorily required to be covered by § 739.5 or not.
7. Computation of the rents which should have been charged requires the following NOI adjustments in both the base year and each petition year:
(a) exclude submetered gas and utility receipts as an item of gross income;
(b) exclude the total master-meter bill as an item of operating expenses; and
(c) allow, as an item of operating expenses, costs for all common area usage (measured in kilowatt hours and multiplied by the applicable master-meter rate in the tariffs of Pacific Gas and Electric Company (PG&E). For those years in which Hillsboro is unable to document the master-meter bill charges necessary to calculate the volume of common area usage, the tenants' estimate of 10% provides a proxy.
8. The $3,251 in utility expenses for electrical conduit and trenching in the 1996 petition must be disallowed in NOI calculations.
9. The $23,884 in utility expenses for electric pedestals in the 1998 petition must be disallowed in NOI calculations.
10. Novato is the appropriate entity to ensure the accuracy of the NOI calculations, and in particular the base year NOI, which under its rent control ordinance is the yardstick for measuring all subsequent rent increase petitions.
1. Hillsboro is the party which should have knowledge of the common area gas and electric usage.
2. Consistent with D.95-08-056, utility common area costs (such as electrical conduit and trenching) and electric pedestal costs should not be used as expenses in NOI calculations for the purposes of Novato's rent control ordinance.
3. Hillsboro should apply to Novato for an adjustment of rent increases authorized on Hillsboro's 1996, 1997, and 1998 petitions under Novato's rent control ordinance in order to remove all rents assessed in violation of Public Utilities Code § 739.5.
4. In order to avoid violating § 739.5, Hillsboro should refund all excess rents paid by Hambly and the other Los Robles tenants. Hillsboro must refund the tenants the difference between the rents actually charged and the rents which should have been charged.
5. Excess rent should be refunded from January 13, 1997, since that is the date three years before the filing of the complaint, and should include interest at the prime three-month commercial paper rate, compounded monthly.
6. Hillsboro should make a good faith effort to identify and reimburse any former tenants or their heirs for excess rents paid since January 13, 1997, including interest.
7. All refunds not collected within 12 months of the date quantification is approved by Novato should revert to the General Fund of the State of California.
8. At the end of the 12-month period, Hillsboro should inform current tenants, by letter with a copy to the Director of the Commission's Consumer Services Division, of the status of its refund program and the steps it has taken to turn over any uncollected refunds to the General Fund.
9. Hillsboro should examine its practices at other mobilehome parks which it owns and which are located within the service territories of gas and electric utilities regulated by this Commission, amend its future rent control applications where appropriate, and implement refunds where warranted.
10. The two pending requests for official notice should be granted. (Hambly's December 7, 2000 filing and Hillsboro's January 11, 2001 filing) and the Commission also should take notice of PG&E's residential electric tariff rates in effect through year-end 1998.
11. In order to provide certainty to all parties, ensure that refunds are paid on a timely basis, and to provide guidance to Novato with respect to Hillsboro's 1999 rent adjustment petition, which is pending without decision by Novato, this decision should be effective immediately.
IT IS ORDERED that:
1. The complaint of Robert Hambly against Hillsboro Properties (Hillsboro) and the City of Novato (Novato) is granted to the extent set out in these ordering paragraphs.
2. Hillsboro, the owner of the Los Robles Mobilehome Park (Los Robles), must apply to Novato, within 60 days of the effective date of this decision, for an adjustment of rent increases authorized on Hillsboro's 1996, 1997, and 1998 petitions under Novato's rent control ordinance in order to remove all rents assessed in violation of Pub. Util. Code § 739.5.
3. The excess rents Hillsboro must refund, on a pro rata basis to Hambly and the other Los Robles tenants who paid them, is the difference between the rents actually charged and the rents which should have been charged. In order to avoid violating § 739.5, the rents which should have been charged are to be calculated as follows:
a. The calculation of net operating income (NOI) in both the 1995 base year and each petition year shall be adjusted to (i) exclude submetered gas and utility receipts as an item of gross income; (ii) exclude the total master-meter bill as an item of operating expenses; and (iii) allow, as an item of operating expenses, costs for all common area usage (measured in kilowatt hours and multiplied by the applicable master-meter rate in the tariffs of Pacific Gas and Electric Company (PG&E). For those years in which Hillsboro is unable to document the master-meter bill charges necessary to calculate the volume of common area usage, the tenants' estimate of 10% shall serve as a proxy.
b. The $3,251 in utility expenses attributable to electrical conduit and trenching from the 1996 petition shall be removed.
c. The $23,884 in utility expenses to electric pedestals from the 1998 petition shall be removed.
4. Rent refunds shall be paid for the period beginning January 13, 1997 and shall include interest at the prime three-month commercial paper rate, compounded monthly, until the date of refund.
5. Hillsboro shall reimburse its current tenants and shall make a good faith effort to identify and reimburse any former tenants or their heirs for excess rents paid since January 13, 1997, including interest as calculated above.
6. All refunds not collected within 12 months of the date quantification is approved by Novato shall revert to the General Fund of the State of California.
7. At the end of the 12-month period, Hillsboro shall inform current tenants, by letter with a copy to the Director of the Commission's Consumer Services Division, of the status of its refund program and the steps it has taken to turn over any uncollected refunds to the General Fund.
8. Hillsboro shall examine its practices at other mobilehome parks which it owns and which are located within the service territories of gas and electric utilities regulated by this Commission, amend its future rent control applications where appropriate, and implement refunds where warranted.
9. The following two requests for official notice are granted: Hambly's December 7, 2000 filing and Hillsboro's January 11, 2001 filing. On our own motion, we also take notice of PG&E's residential electric tariff rates in effect through year-end 1998.
10. This proceeding is closed.
This order is effective today.
Dated , at San Francisco, California.
Attachment A
