Bahrain utility cost increases mean changes for US personnel
March 2, 2016
MANAMA, Bahrain — The U.S. military will offset higher utility costs taking effect in Bahrain and change how personnel are reimbursed, officials said this week.
Bahrain, which like other countries in the Persian Gulf, is suffering from a drop in oil prices that has put pressure on revenue, is cutting subsidies on utilities over the next four years. Utilities costs are expected to about double starting with the March bills, officials said.
“The bottom line is, this utility increase will affect every single person in this room because we all have leases and we all live out in town,” Capt. Cory R. Howes, commander of Naval Support Activity Bahrain, said at a town hall meeting Monday.
The Defense Travel Management Office will increase the utilities allowance for military personnel starting March 16 to keep pace with Bahrain’s increases.
“So what that means is, nobody here should ever pay out of pocket, because there will be a mechanism to make sure that the utilities portion of your OHA [overseas housing allowance] goes up should you need it,” Howes said.
That increase will apply to new rental contracts with an effective date of March 1 or existing contracts that are amended, Leslie Jett, Bahrain’s country allowance coordinator, said at a town hall meeting Tuesday.
Until now, rental agreements have included utilities, with a single payment going to the landlord to cover both expenses. If utility costs are lower than estimated, the landlord pockets the difference. If they are higher, the renter pays the difference, but the landlord must provide monthly copies of the utility bills to show the annual allowance was exceeded, Howes said.
Under new and amended rental agreements, military personnel will reimburse landlords for the actual cost of utilities, meaning if the bills are lower than the allowance, servicemembers can pocket the difference, Jett said. The arrangement is similar to how servicemembers pay rent and utilities elsewhere overseas.
Howes said this new arrangement would be incentive for personnel to conserve energy, as it could increase the amount of money they are able to keep.
Under the new rental agreements, personnel would also be responsible for paying the 10 percent municipality or rental tax, Jett said.
Those who already have rental contracts must negotiate an addendum to the existing lease signed by the landlord before they can receive the new allowance. If the landlord refuses to agree to the addendum, personnel must stick with the current arrangement until the lease is up, Jett said. But that may not be such a bad thing.
These personnel will not have to assume responsibility for the municipality tax, and the allowance they receive will likely cover most personnels’ utilities even after the cost doubles, Jett said.
The situation is slightly different for civilians, who receive a Living Quarters Allowance under a State Department program. The base is working with the State Department to conduct a survey in April to assess the impact of the utility prices on LQA and potential rate changes, according to a statement from the Naval Support Activity public affairs office.
Under the new lease, civilians will have to file a reconciliation 12 to 15 months after the lease is signed to determine if they were paid too much or too little to cover utilities; they could be required to reimburse the government if they were paid too much. Civilian employees who stay in their current lease do not have to do a reconciliation.
Jett said personnel can consult the housing office to get help determining if they are good candidates for changing their current leases.
In the future, to keep up with Bahrain’s changes in utility costs, the Defense Travel Management Office will conduct surveys to help accurately adjust utility allowances, Howes said.
“We don’t have all the answers yet; it’s still a work in progress,” he said. “We’re going to get there, but there will be a transition process with leases, and some fits and spurts that go along with this.”