UPDATE: Gateway Answers Questions on Water Bills

(UPDATE: This letter from GGTA President Bill Hannan was sent to all GGTA members with email on Wednesday, Sept. 17 and is a follow-up to the letter below.)

Dear GGTA members in Vista West –

We have more information from Gateway management about the July 1 increase in water bills.  According to management, it raised water and sewer rates at different percentages for different buildings based of their different vacancy rates.  Management also advises that it pays 3% of the costs of common area water use, based on a review or audit.  it also confirms that the Bay Club is metered separately and pays SFPUC directly for the water it uses.

The bills we have received from tenants in Vista South and Vista East appear to show that tenants in Vista East received much steeper percentage increases in July than tenants in Vista South.  We have only one bill each from Vista West and Vista North, so we cannot draw any conclusions about those buildings.

Martie Young and JoAnn Michael and I have asked for a meeting with Clarisse Tan after she returns from vacation on 9-23.  We hope to explore the use of vacancy rates in calculating water bills, and the nature of the review or audit used to calculate management’s share of costs for common area watering.

– Bill Hannan

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(This letter from GGTA President Bill Hannan was sent to all GGTA members with email on Friday, Sept. 12.)

Dear GGTA members,

Those of us who moved in before 2001 do not receive bills for water or sewer service.  Those moving in after a date in 2001 have different lease provisions, and are billed monthly by Conservice, the Gateway’s billing agency.

Recently there was a substantial increase in those bills.  Depending on your apartment’s square footage and number of occupants, your bill for July went up anywhere between about 20% and about 44% from your June bill.  GGTA asked Gateway management for an explanation of the increases, and for related information.  As we understand management’s answers [see below], and some information from the website of the SF Public Utilities Commission, here is the situation, which is complicated.  The individual apartments at the Gateway are not metered (someone would have to pay that cost), so use by individual units is unknown.

SFPUC sets rates for water and sewer service, and bills property owners.  SFPUC set a rate increase of 10% or 12%, which went into effect on July 1, 2014. SFPUC also plans substantial future rate increases for each July 1 in the years 2015, 2016, and 2017, due to the drought and the need to replace aging sewer systems.  The July 1 rate increase was part of a triple whammy that resulted in the big billing increases at the Gateway.

The Gateway meters are read 12 times a year at slightly irregular intervals.  (The dates recited in the Conservice bills are apparently fictitious.) According to management, there were only 29 days between the May reading and the June reading, but 32 days between the June reading and the July reading, a 3-day difference that resulted in a 10% difference.  The good news here is that some future intervals between readings will be shorter than 32 days, so the bills should drop.

The third factor contributing to the increase was reportedly a 10% increase in water and sewer use at the Gateway.  Management advises that there was an SFPUC investigation to check for leaks, but no leaks were found.

Asked why the percentage increase varied so widely for different apartments, management replied that Conservice bills are based half on square footage of the unit, and half on the number of occupants.  GGTA is asking for a further explanation of the differential for percentage increases.

Some residents saw a notice on the reverse of the Conservice July bill that account numbers had been changed “due to the recent request to split your property”.  Management says this request was for internal reporting purposes only, and does not result in increased bills.

Management says that charges for water used for irrigation, and water used by commercial tenants such as Safeway are billed separately and not billed to residents.  A portion of the SFPUC bill for water used for common areas and for the laundries is billed to the Gateway, and the remaining portion is billed to the residents.

The Gateway pays for the water and sewer service used by the pre-2001 tenants as an operating expense, and that amount is not re-billed to the newer tenants.  The same is true for the very new tenants who are billed for Recology trash removal – these very new tenants are billed only for their shares, and the Gateway pays the rest.

Martie Young, JoAnn Michael and I have asked to meet with management soon, to confirm these understandings and clear up any remaining uncertainty.  Please feel free to contact me with any questions.

– Bill Hannan, president, GGTA

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(Below is the email sent to Gateway management’s Clay Tominaga and Clarisse Tan regarding water increases. Tan’s answers are in blue.)

Hello, Clay and Clarisse –

Thank you for Clarisse’s prompt reply of August 27 to my question about water and sewer bills.  Many tenants were surprised by the substantial increases in their Conservice bills for the month of July, and it now appears that SFPUC intends further substantial rate increases each July 1 in the years 2015, 2016 and 2017.

Tenants advise that the unexpected July 1 rate increases caught their attention, that they have little information about Gateway and Conservice billing procedures, and they want to increase their knowledge.  We are not complaining about what has been done, but want to educate ourselves.  I would greatly appreciate any information you are willing provide to answer as many of these these questions as possible.

1)  Clarisse’s reply states that the July 1 rate increases were 10.67% (tier 1) and 13.5% (tier 2) for water, and 12% (tier 1) and 4.37% (tier 2) for water discharge (sewer).  How did those rate increases result in what Conservice describes as “actual increases” of 28% for water and 33% for sewer?

There are three factors resulting in the ‘actual’ increase of water and sewer in July. 1. Rates. 2. Billing cycles dates. 3. Usage. The total increase for about 30% comes from rates increase (about 10-12%), extra billing cycles – 3 days (about 10%) and higher usage (about 10.05%). SFPUC investigated the higher usage for any possible leaks and the result is negative.

2)  Although Conservice apparently claims it billed for only 29 days in June and for 32 days in July, with 3 extra days resulting in a 10% increase, the Conservice bills recite billing periods of 30 days in June and 31 days in July (please see attachments A and B [these have been redacted for privacy]).  If Conservice did bill for 3 extra days in July, will future bills drop when fewer days are billed in August or September?

Yes. Conservice will take whatever amount on the bill as its month expense, regardless of the actual bill cover partial prior month (about 10-12 days) and current month (about 19-23 days) depending on the meter reading dates. When the actual billing days were less, it will be adjusted accordingly on the next Conservice bill. The actual 365-366 days a year will be reflected in 12 invoices and the number of days will be based on the actual meter reading dates.

3)  The “actual increases” of 28% for water and 33% for sewer are, on average, consistent with the Conservice bills provided or described by tenants, but there is a wide variation of percentage increases for different types of apartments, from a low of 19% for a studio with one occupant to a high of 44% for a one-bedroom with two occupants (attachments A and B).  Should not the percentage of increase be the same for every unit?

The way Conservice calculated the expense to be billed are based on the unit’s square-footage and number of person living in the unit. 50% by the square-footage and 50% by the number of tenants. To split up the expense evenly among the buildings we are billing each a certain percentage of the provider bills depending on what percentage of the total community that building makes up.

GC01- Vista West is the first building and is billed 32% of the bill.

GC02- Vista North building 2 is billed out 14%.

GC03- Vista South building 3 is also billed 14%.

GC04- Vista East building 4 is billed 35%.

GC05-  Vista Townhomes Phase 1, apts #1-38 is billed 3%.

GC06-  Vista Townhomes Phase 2 # 39-58 is billed 2%.

4)  The July bills state on the reverse that due to the recent request to split the property it was necessary to assign a new account number, requiring all tenants with automatic payment programs to re-enroll (attachment C).  Why was there a request to split the property?

It was for internal reporting purposes only.

5)  The Charge Explanations in attachment C state that management pays “a portion” of the SFPUC bill to cover common area usage.  Is that portion sufficient to cover common area water use including irrigation and the laundry rooms?  (By the way, I applaud your decision to shut off the fountains and the water sculpture during the drought.)

Irrigations and commercial are billed separately and these accounts were not included on the Conservice calculations. Only the accounts that provide water to Residential units were included on the calculations (some may include laundry). The % that were taken out (for Laundry and any other common area uses) were remains the same with priors, and the % were from the audit performed.

6)  Do the bills to the residential tenants include charges for water used by Gateway’s commercial tenants such as Safeway or L’Olivier?

They have different meter # and billed separately.

7)  Before the leases were reworded in 2001, they provided that the owner would make available hot and cold water in reasonable quantities, and the pre-2001 tenants are not billed for water or sewer services.  How is the water used by the remaining pre-2001 tenants factored into the billing formula?  Does the Gateway pay for that water use as an operating expense, or are the post-2001 tenants billed for it?

All tenants and units were included on the calculations. However, pre-2001 tenants will not be billed and it’s the Gateway’s responsibility, and yes, we pay it as an operating expense.

8)  A very new tenant asks a similar question about monthly Conservice charges for Recology trash removal.  Are the very new tenants being billed only for their share of the Recology bills, or are they paying the entire Recology bill all by themselves?

Residents only pay their share. An analysis performed to calculate % for residential and % for management.

I realize it will take time to gather the requested information.  At a time that is convenient for you, Martie Young and JoAnn Michael and I would like to meet with you to discuss the available information.  We hope that the information provided will satisfy the tenants who were ruffled by the July 1 rate increases, and will allow them to plan for the future.

Thank you for your continuing work in keeping the Gateway one of the best places to live in our great city.

Sincerely,

Bill Hannan, president

Golden Gateway Tenants Association