Auditing a 200-unit apartment complex in Phoenix on APS. The complex has a master meter and the landlord sub-meters to individual tenants. The franchise fee on the master meter bill seems high. Is the franchise fee supposed to be applied once on the master meter total, or is there some per-unit calculation happening? The bill shows a franchise fee that's about 30% higher than what I'd expect based on the franchise percentage times the total charges.
Apartment complex master meter — franchise fee applied per unit or per meter?
The franchise fee should be a straight percentage of the charges on the master meter bill — there's no per-unit multiplier. If the franchise fee amount is higher than the percentage times total charges, either the wrong percentage is being applied or the fee is being calculated on a different base than what appears on the bill. I'd calculate it manually: take the total charges on the bill, multiply by the franchise fee percentage from the city ordinance, and compare to the actual franchise fee line item. If there's a discrepancy, you've found an error. APS has had billing system issues with master-metered accounts in the past.
Karen's approach is correct. One additional thing to check on master-metered apartment complexes: some municipalities have different franchise fee rates for residential vs commercial accounts. If the master meter is classified as commercial but serves residential tenants, the utility might be applying the commercial franchise fee rate which could be higher than the residential rate. The correct rate depends on the franchise agreement language — some apply based on the meter classification, others based on the end-use. This is a nuance worth checking because the difference between a 3% residential rate and a 5% commercial rate on a large apartment complex can be significant.
Did the math and the franchise fee should be $412/month based on 3% of total charges. The bill shows $536/month. That's $124/month overcharge. Going to file the claim with APS and the city to figure out where the extra is coming from. Thanks for confirming my math was right.