2002 FEBRUARY - Laserfiche WebLink

6.60.060 1. The park owner's operating ex- penses and real property taxes in the base year were unusually high or low in comparison to other years. In such in- stances adjustments may be made in calculating such expenses so the base year of operating expenses reflects average expenses for the park over a reasonable period of time. The follow- ing factors shall be considered in mak- ing this decision: a. The park owner made substantial capital improvements during the base year which were not reflected in the rent levels. b. Substantial repairs were made due to damage caused by natural disaster, vandalism or other unusual cause. c. Other expenses were unreasonably high or low due to unusual circum- stances, notwithstanding prudent busi- ness practices. 2. The gross income during the base year was significantly lower than nor- mal because of destruction of the pre- mises and/or temporary eviction for construction or repairs, or other special circumstances. F. Schedule Of Increases In Operat- ing Expenses And Real Property Taxes: Where the schedule of rent increases or other calculations require projections of a prior year's income and expenses, it shall be presumed, subject to rebuttal, that operating expenses, exclusive of property taxes and management expens- es, increased at the cost of living, that property taxes increased at two percent (2%) per year, and that management expenses are five percent (5%) of gross income. G. Authorized Adjustments: The hearing officer shall grant an increase to a park owner in excess of that al- lowed by section 6.60.040 of this chap- ter if the hearing officer finds and determines that it is necessary to pro- vide the park owner with a net oper- ating income, after adjustment for one hundred percent (100%) of the increase in the cost of living, equal to the net operating income realized for the park during the base year. The percentage rent increase needed to cover increases in operating expenses and real property taxes shall be calculated in the follow- ing manner which is structured to per- mit growth of the net operating income of the park and to provide a fair and reasonable return on investment based upon objective standards: 1. For 2002, adjust the base year net operating income by adding thereto one hundred percent (100%) of the cost of living; subtract therefrom the 2001 net operating income; and divide by the 2001 gross rents. 2. For 2003 and thereafter, adjust the base year net operating income by add- ing thereto one hundred percent (100%) of the increase in the cost of living; subtract therefrom the current year net operating income; and divide by the current year gross rents. H. Return On Investment: It is pre- sumed subject to rebuttal that this for- mula will provide a fair and reasonable return on investment. The park owner may establish by clear and convincing evidence that this formula will not provide a fair and reasonable return on investment, and that an alternative 192-51 (Pleasanton February 2002)