California Apartment Association

Sen. Lois Wolk’s water submetering bill sank this year, but it’ll likely resurface in 2014.

With some success at the negotiating table, it has a good chance of passing, too.

SB 750  got close this year. But by the end of the legislative session, loose ends and disagreements about the bill’s wording had it taking on water.

When Wolk introduced the bill in early February, she said it would help Californians “make environmentally and economically responsible choices and that they needed accurate information about their water usage and cost so that they can use existing supplies as efficiently as possible.”

At its essence, Wolk’s bill would require that all apartments built after Jan. 1, 2015, be fitted with water submeters in each residential unit so that renters would be billed precisely for the water they use.

Wolk argued that while 46 percent of Californians live in multifamily housing, 80 percent of those tenants see no correlation between their water use and what they pay because charges for water are included in the rent, charged as a flat fee, or allocated some other way based on a master meter – or a single meter for an entire apartment building.

In those instances, owners implement water-bill-share systems, often referred to as RUBS or ratio-utility billing systems. Tenants each pay a portion of the master water bill each month based on the size and amenities of the unit and the number of tenants living there. While not as precise as submeters, a RUBS program is fair in the absence of submeters, and CAA worked with Wolk to remove a ban on its use.

While Wolk was amenable to RUBS in existing buildings, SB 750 clearly would eliminate the practice in new construction with submeters.

CAA members had no direct objections to the required installation of the meters going forward, but they demanded the ability to recoup their costs for reading submeters and billing tenants.

Current law is not clear on this practice, and CAA members wanted clarity.

The guide post came from the city of San Diego, where lawmakers passed an ordinance allowing apartment owners to collect a fee each month to cover the administrative cost to read the meters and send tenants bills. It seemed only fair. Under existing state law, water purveyors are allowed to collect fees for service, so landlords should be allowed to do the same thing.

Wolk agreed, and a $4 monthly fee was built into SB 750 with an increase allowed annually based on the consumer price index.

This marked the first time in more than a decade – and there were numerous legislative attempts — that tenant advocates came to terms with a fee.

The bill’s sponsors, CAA, and submeter/billing companies also came to agreement on other important components for the bill. For example, SB 750 would allow rental property owners to:

• Collect a late fee from tenants, including permission to deduct unpaid amounts from the tenant’s security deposit.
• Evict those tenants who refused to pay their water bills. 

Tenant groups, of course, wanted in return proper disclosure about water billing practices, and they wanted to ensure that water submeters were installed correctly.  Finally, they wanted assurances that property owners would fix water leaks when requested by tenants.

Despite concessions on both sides, the legislation was already 94 pages, and much writing and rewriting was still necessary to make all parties content.

At the same time, there were still remaining concerns over the state’s ability to approve enough submeters for use in California by 2015.

California, after all, isn’t known for its easy meter approval process. Submeter manufacturers and retailers argued that California was the most difficult place in the union to get submeters approved. 

The arguments waged on, and by the time the bill made its appearance in its final committee – the Assembly Committee on Water, Parks, and Wildlife – the interested parties had not come to full agreement on the wording.

Legislators on the committee were unwilling to give Wolk their blessing until stakeholders got there.

So in early September, Wolk gave the parties more time to work out their differences, moving SB 750 to a two-year status. If all interested parties can come to an agreement for wording next year, the bill will pick up where it left off.

SB 750 is the furthest along of any previous legislation on the topic, and with limited exception, all parties who spent many hours working for compromise hope to see success next year.

Related stories:

• CAA wins more positive amendments for water submeter bill
• Submeter bill hits snag; CAA remains opposed
• Submeter bill revised to allow landlords to recover administrative fees