live and accessible. That is the list of documents that we have. We will make sure Mr.
Cann gets that. Any additional review we will put that in there. I am sorry that you only
had a brief time to review this. Obviously, we are going to stay in place until we get this
resolve. I need you guys to stay comfortable. You have enough time to analyze the
information. If you don’t have any other comments, I am going to bring Mr. Cann and
his clients up here from him and his summary on what he is thinking base on his brief
amount of time to analyze at least parts of the record.
Cann: In response to your other comment let me summarize where I think we are at.
First, let me start by saying prior to the last hearing I wrote most on what I think it’s
important as well as said on what I think is important. A few things have come up
since then. After, I give you what I think the issues are here and what the resolutions
us I would like to take 10 minutes to go over the new stuff. Although, I did put it all in
the September 27th letter here is where I think we are at. The appeal necessary
generates two issues. First, is whether utilities are part of the rent because she (Ms.
Wilhight) is challenging what she considers a rent increase. She is paying at 3% rent
increase plus utilities cost that were estimated to increase her total cost in living in the
apartment by 11-12%. The appeal necessary relates to two issues. One is we are
saying these utilities cost were cost that are rent for purposes of the rent control las
and the total increase exceeds what’s permitted in the ordinance and the rules.
The first issue is are those utility allocations rent that is control by the ordinance? The
answer is yes. Secondly, is the total rent including those utilities clause an excess of
what is permitted in the ordinance and regulations? The answer is yes, it does. It
obviously exceeds. Again, its 11.3% to 12.5%, depending because they gave her a
range of the utilities cost from $130-150 dollars. That exceeds the 3% that is in the
ordinance. It exceeds the 8% that they applied for, with respect to her apartment. It
also exceeds the 9.67% that Mr. Sass found. In more detail, it seems to me that the
staff position is that those addition to those utilities cost or rent, for purpose of
definition and statue. The DSI director stated and this is a quote from the last hearing
“There is a misconception within the landlord community that utilities can be added
onto a 3% increase and not be considered a rent increase”. It seems about as clear
as it can get that yes of course is rent. Finally, the staff report on parking said
essentially the same thing. Anything that the owners charge characterizes it as rent or
a fee or something else. It is rent for the purposes of rent the control law. It may not
be rent for the purposes of other laws. It is rent for the purposes of the City Rent
Control law. Mr. Terry has insisted that it is not rent because somehow it is pay by the
tenant to the utility company. The introduction of Sarah Davis’ bill in the last hearing
demolishes that notion. She doesn’t pay a utility allocation she pays lump sum to the
landlord every month that includes rent, parking fee what amounts to a utility fee. The
owner she certainly doesn’t pay anything to the utility company. All of that lump sum
flows into the owner’s bank account. Then the owner pays all the owner’s operating
expenses out of that bank account and some of those expenses includes utility
payments. Faced with Sarah Davis bill, what Mr. Terry came up with at the last hearing
was that still those portion utility payments are not rent because quote “the utilities are
actually consumed by the tenant. That is what makes them different form every other
operating expense”. Mr. Terry is wrong there because those utility allocations include
the utility for the common areas. Those common areas include all the hallways, stair
walls, and front entry, which is use by the restaurant guest, as well tents, the lobby,
the mail area, the management office, the community room, the gym, the bathroom
associated with the gym, the elevators. There are two levels of parking. There may be
separate metering for some of that. If not, it is solely the responsibility of the landlord.
We don’t know, but it is virtually certain that the hallways are not separate metered.
They couldn’t be nor the elevator shafts. It is probably the case and virtually certain
that that the gym isn’t separately metered probably the management office isn’t,
maybe the parking is or maybe it isn’t. However, that works out it is clear that there is
a significant amount of utility expense for each of the utility except maybe trash that is