October 17, 2011
By: Jason E. Fisher
Quorum
The Washington Suburban Sanitary Commission (“WSSC”) historically has billed multi-unit residential properties such as condominiums, co-operatives and apartment buildings utilizing a “unit count” method. The purpose of the “unit count” billing method provided consistency with the way that WSSC billed single family residential properties. Previously, neither the policy nor the regulations provided a mechanism for how to bill mixed-use multifamily units (i.e. those properties that had both residential and non-residential units served by the same master meter). In 2009, after WSSC attempted to impose the non-residential rate, which is in effect double the residential rate, on several properties, a challenge was raised as to the basis for the billing methods imposed. In one example, WSSC billed a condominium with 198 residential units and only 4 non-residential/commercial units at the commercial/non-residential rate. In one year’s time, the imposition of the higher rate doubled their water & sewer billings to the tune of approximately an additional $100,000 for that one year!
After the condominium appealed the charges to the WSSC Board and then subsequently challenged the decision in the Circuit Court, an Order was entered finding that WSSC lacked a basis to bill at the higher rate, thereby resulting in a refund to the condominium. In response to that decision, WSSC thereafter sought to change its regulations to permit charging any mixed-use property at the non-residential rate.
The effect of the proposed change would have resulted in associations with both residential and non-residential units on the same meter to either (1) pay double the rates for water and sewer charges (as all units would be billed at the non-residential rate), or (2) undertake new construction to modify the existing metering of the non-residential units to separate those units from the residential ones, which in most cases would be an enormous expense. Since those changes were proposed, a task force of members of WMCCAI and other groups worked on modifications of the originally proposed billing method.
After substantial negotiations with WSSC staff, WSSC recently approved the amendments in their final form. These new regulations take effect December 31, 2011 but in anticipation of those changes, many associations should take action now to prepare for those changes.
The full provisions of the new regulations appear at: http://www.wsscwater.com/file/CustomerCare/notice_of_adoption8_11.pdf
Under the new version of the regulations adopted, clarification was provided regarding how mixed-use properties would be billed. Essentially, WSSC created a classification system whereby a chart exists that lists the unit use types and whether it is considered to be a “high flow unit”. If it is a high flow unit, it is presumed to be a commercial use and will be subject to the higher billing rate. In such a case, the association or property owner can choose to:
- Pay the higher commercial rate for all units served by that meter;
- Install a separate sub meter to separate those commercial units (WSSC refers to this as a “separate meter”); or
- Seek a waiver even if the unit type falls under the definition of a high flow/commercial unit.
The full text appears at the link above and includes the list of “high flow” units, which is based upon the use. Unlike the originally proposed separate master meter requirement, a sub meter allows an association to install a meter at that unit only to track its individual usage, so only that unit is billed at the higher rate. Note, prior to this new regulation, WSSC would not allow or accept sub metering for billing purposes.
The date of implementation of this new regulation is set for December 31, 2011, which gives your association time to research and/or obtain bids for sub metering if it is deemed necessary. While WMCCAI pushed for a complete grandfathering in of all existing mixed use unit properties, WSSC would not go for it. Instead, this compromise should allow for most associations to work at considering a less expensive alternative/retrofit or pursue a waiver. In some cases, depending on the nature and/or type of commercial units at exist at your property, there may be no practical impact on your billing as only those commercial units classified as “high flow” need to consider sub metering or the waiver.
In addition to the mixed-use unit property billing change, it should be noted that effective July 1, 2011, WSSC also approved an 8.5 percent rate increase that took effect July 1, 2010 for all properties. The full rate schedule appears at: http://www.wsscwater.com/home/jsp/content/rates.faces
Jason Fisher, a community association attorney at Lerch, Early & Brewer, provides skilled representation to community and homeowners associations, condominiums and co-operatives in Maryland and the District of Columbia, and is recognized as a leader in the community associations field. For more information about how to prepare for these changes, contact Jason at (301) 657-0743 or jefisher@lerchearly.com.
This article originally appeared in the October 2011 edition of Quorum magazine, published by the Washington Metropolitan Chapter Community Associations Insitute
