20 January 2011

An example of regulatory crazy

Anonymous sent me this interesting opinion on a little bit of regulatory crazy:
In the past you have blogged about the inefficiency of RUBS* as a conservation mechanism for tenants. Mandating per unit metering will eventually serve to end RUBS. One of the major driver for using RUBS currently is that some properties are plumbed in a way that all of the water used in a unit cannot be measured by a single water meter (and "point of use" meters aren't approved in CA--yet). One of the opponents of the legislation was the CA Dept. of Weights and Measures (W&M).

W&M has jurisdiction over anything which involves a weighing or measuring device. From taxi meters to berry baskets to gas pumps. They are not a fan of RUBS (but they do not have jurisdiction because a measuring device is not utilized). This does not stop W&M from trying to convince County District Attorneys to go after multifamily owners for utilizing RUBS. As I stated above, mandating metering would serve to end RUBS in the future, so why does W&M fight against the mandate? The primary reason is their ability to test meters prior to installation.

California is the only state in which W&M must type approve and test all or some meters prior to installation. In every other state, AWWA/NIST certification is acceptable. Each county has a W&M office which operates independently from the state agency.** This includes interpreting W&M regulations as they see fit. Each county has a test bench for meters. Many of these benches are no longer accurate. Our meter manufacturing partners use sophisticated laser testing to verify accuracy prior to shipping to CA. Typically, more than half of those same meters fail the county W&M testing. One interested party portrayed this as having a third grader (W&M) check a computer's ability to do math.

W&M has acknowledged for many years that it needs new test benches. Instead of revamping the benches, they have decided to attempt to convince the District Attorneys in a few counties that criminal liability for the meter manufacturer should attach when meters which do not pass W&M testing are submitted to W&M. This theory rests on an expanded reading of what "placed into service" means in the W&M regulations. W&M prefers to ignore the established understanding of "placed into service" as being installed, sealed and used in a commercial transaction, in favor of "submitted to testing." The Dept. of Ag's counsel attempted to disabuse W&M of this theory but they indicated that they will continue to pressure the DA to file criminal charges. Needless to say, this made meter manufacturers alarmed. Most of them will not do business in CA. Meanwhile, we succeeded in passing an ordinance in San Diego with the mandate and there is a good chance of passage on the state level so they will have to test a lot more meters.

I think you can sense my frustration. County W&M personnel have justified the current stance because:
  1. There isn't a regulatory framework which protects tenants in CA.

  2. They are certain that tenants are being overcharged or unfairly charged by unscrupulous owners.

  3. They have a budget problem and hope to recoup some funds from owners by issuing violations. Recently they have been issuing violations at RUBS properties to "highlight the issue" for county DAs and the Los Angeles County Sealer sent an email to several District Attorneys outlining their theories on RUBS with the salutation of "Happy Hunting".
Opinions differ on the fairness of RUBS. However, metered billing has a proven track record of conservation. We are on the cusp of metering a large segment of water usage (and reducing the electric consumption from pumping) and there is a rogue agency doing its best to protect territory that is arguably redundant.***
Bottom Line: Bureaucratic monopolists can do what they want, whether or not it makes sense.

* Ratio Utility Billing System means that tenants in an apartment building share the water bill, by dividing the cost of water at the master meter by the number of units (and occasionally on the number of occupants) in the building.

** "Each county has its own test bench. Seriously. True story, back in 2004 W&M did not differentiate between hot and cold water meters. A meter manufacturer built a hot water meter. W&M (state) had no bench to type approve it so the manufacturer worked with Utah State university to build the bench to type approve the meter.In 2005 W&M pushed the DAs in LA, Santa Clara and SD counties to investigate apartment owners who were using only cold water meters but billing for all water usage because it was an "estimate". But, during the statutory period, there was no hot water meter to measure all water. W&M lot tests the meters at the county and knows how they will be used and released all of the meters. Just insane. The owner settled and ended up $4M out of pocket. http://www.signonsandiego.com/. We told them to dig in and fight but they took the certain way out.

W&M is petty but they've been hostile toward our industry going way back. We now have owners and developers who are choosing not to install meters and forgo the 20-35% reduction in water usage just because it may take months to get all of the meters through the county W&M. The people W&M are trying to protect--residents--ultimately pay more through RUBS or in rent adjustments. It is completely backward."

*** I asked anonymous "why doesn't W&M want to replace RUBS with subunit meters? They get rid of RUBS and get more work, no? Sounds skitzo," who replied: "I agree. Doesn't make sense. They simply state that resident billing, whether rubs or metered has the capacity to be abused by unscrupulous owners but never go into why the proposed tenant protections are inadequate. They don't like RUBS. Don't like non-utilities doing any billing of residents. When the proposed legislation came up with the mandate, they decided that their ideological dislike of landlord billing trumps the added revenue/work they would get. Also, their setup with the state W&M dept and mini-fiefdoms in each county allows both sides plausible denial with the illusion of local control."

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