Utility audits save on cost and energy audits save on consumption. Community managers should do both to minimize annual utility expenses.
Board members and homeowners look to community managers for professional guidance on managing their associations for long-term sustainability and sound economic advice. Measures that increase reserve funding and/or reduce overall expenses are always in demand, bur must nor compromise the common area maintenance and overall value for the homeowners.
Trying to cover increasing annual maintenance costs without increasing homeowner dues each year is difficult ac best. When a manager has done all he or she can to minimize association expenses and costs are still escalating, what else can be done?
Take a look at your utility consumption.
While every association depends on electricity. refuse, telephone. gas and water services to make the common areas functional, most associations believe there is little they can do to lower the cost of these necessities Some associations manage to lower .utility consumption by improving conservation practices, planting drought tolerant landscaping, or installing energy efficient lighting and equipment. Others control costs by limiting the range of common area services they use. Some pass the costs on to their homeowners. Others simply pay their utility bills without question.
Double check utility bills.
Utility bills are confusing and cryptic and they are getting more complex, which means they are prone to even more errors. If an association 1s paying more than it should for utilities. that money is coming straight out of the operating budget – which ultimately comes straight out of the homeowner’s pocket! Utilities are almost always the largest single expense on an association’s annual budget. and they can also be the largest uncontrollable expense. If gas. electric, water, sewer. telephone or trash rates increase. the association is stuck footing the bill. and year after year these bills continue to spiral upward In most instances. associations are overpaying simply because they are not aware of how their utility bills are calculated. In fact. a utility audit will probably uncover surprising errors and opportunities for savings
Plan for a utility audit.
A utility audit does not involve retrofitting, rebates. energy management. conservation techniques, new equipment installation or changing the way you use your common areas or utilities. A utility audit is something to consider after an association has done all of the above to reduce their overall utility use or consumption. A utility audit will reduce the “per unit” cost of each utility, not the number of units used.
After an association reduces its overall water, gas, electric or crash consumption via retrofitting, rebates, energy management, conservation techniques, new equipment installation or a change in common area use, there is an immediate reduction in utility expenses. However, as the utility races continue to increase each year, these savings disappear at some point, even with the reduced utility consumption. In other words, there is a “break even” point chat occurs, generally from three to five years. At this point, even with the reduced utility consumption, the association is paying the same amount it was paying before these measures. With a utility audit, the association continues to realize the lower per unit utility cost indefinitely, regardless of utility rate increases.
A utility audit will:
I. Find utility billing errors and overcharges, resulting in refunds to the association, or
2. lower race schedules available through the same utility provider, which may reduce the per unit cost of their utilities, regardless of how much or how little is used.
All community managers and homeowners associations can benefit from a utility audit, which generally results in a 20% annual utility expense reduction or more!