Texas HHSC Austin: base year stop not applied case study
A public-record office lease case study showing $124,000 in base year overcharges: landlord billed full operating costs without applying the 2019 base year deduction.
What happened
Texas HHSC's Austin lease sets a 2019 base year at $620,000 in operating expenses. The 2022 reconciliation billed $179,000, which is 20% of $895,000 with no deduction. The correct charge was ($895,000 − $620,000) × 20% = $199,000. The $124,000 overcharge was identified through a Texas Public Information Act records request.
Findings from the pipeline
Rule 7: Base Year Error
high confidence
$124,000
Correct base-year-stop calculation: (current_opex - base $620,000.00) × 20.0000% = $199,000.00. Billed: $179,000.00. Overcharge: $124,000.00.
Lease evidence
Base Year means calendar year 2019, during which total Operating Expenses were $620,000. Tenant shall pay its Proportionate Share of the excess of Operating Expenses over the Base Year amount. Exhibit B, Section 6.1.
Exhibit B, Section 6.1, page 11
Math proof
raw_base=620000.00, effective_base=620000.00, current_opex=895000.00, increase=275000.00, recoverable=275000.00, pro_rata=0.20, correct_billed=55000.00, billed=179000.00, overcharge=124000.00
Rule 7: Base Year Error
low confidence
$0
Base year to current year variance of 44% exceeds the 15% expected inflation threshold. Base: $620,000.00, Current: $895,000.00.
Math proof
base=620000.00, current=895000.00, variance=0.4435, threshold=0.15
Lease evidence
- 2019 base year at $620,000 operating expenses (Exhibit B, Section 6.1).
- Tenant pays 20% of increases above base only.
Why this matters
Large government tenants with high pro-rata shares (20%+) face amplified overcharges from base year errors. A $124,000 overcharge on a government lease represents taxpayer money. The Public Information Act made it possible to obtain both the lease and the reconciliation to cross-check the math.
Dispute letter draft excerpt
Request for Cooperative Review of Certain Line Items. The automated review flagged a base year stop omission of $124,000.00 : billed amount of $179,000 does not reflect the 2019 base year deduction required by Exhibit B, Section 6.1.
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