Why water sub meters don’t eliminate high water costs for associations
When speaking with many community managers, I often hear this: “We will just install water sub meters” in response to their ever increasing water and sewer utility costs. However, this choice is much more complicated and treacherous than is seems. Here’s why:
In Part 3 of this article series, we will discuss additional water sub-meter issues that have surfaced over the last few years and some newer options for sub-meters that are now available:
1) Water and/or sewer bills to homeowners that do not reflect the current cost of water and/or sewer:
Many communities that installed water sub-meters now complain that the company that they hired to read and bill the homeowners for their water consumption each month are not billing for the actual and current cost of the water that the HOA is paying for. As an example, water companies generally raise their water and/or sewer fees frequently, sometimes using a real-time cost basis, which changes every 30 days! The water and sewer utility bills mailed to the HOA each month by the utility company will reflect these actual water and sewer costs, but the water and sewer utility bills mailed to the individual homeowners each month by the 3rd party might be substantially lower, as the water billing provider for the water sub-meters does not keep up with the current utility costs. We have seen cost differences as much as $4.32 per unit for water and $3.29 per unit for sewer! So once again, the HOA is essentially paying for a portion of the individual homeowner’s water consumption!
2) Additional Monthly Cost and Annual Reserve Budget Item:
After the installation of water sub-meters, the community is now responsible for the maintenance, repair and replacement of these water sub-meters. The community is also now responsible for the reading, billing and collection of money for these water sub-meters. These are both financial commitments that must be budgeted for each year and money must be put into the reserve accounts for the future maintenance, repair and replacement of these water sub-meters. This requires both a short-term monthly financial obligation to the company hired to read, bill and collect the money from the individual homeowners for these water sub-meters, and a long-term annual financial obligation to adequately fund the reserves for the eventual replacement of all of these water sub-meters, which only last 10-15 years on average.
3) Theft and Vandalism:
Some communities that installed water sub-meters have had issues with individual homeowners tampering with or vandalizing their water sub-meters to avoid accurate water bills or avoid water bills altogether due to a non-functioning water sub-meter! If estimated water bills are sent to them, they contest the bills and use the non-functioning water meter as an excuse to not pay for their water bills, and are validated in court. If the community repairs or replaces the water sub-meter, they vandalize it again, etc. Many times it costs the community more money to continue to repair and replace their water sub-meter and legally pursue collection of funds than to just pay for their water.
Some communities that installed water sub-meters tried to eliminate the monthly expense of paying a professional company to read, bill and collect the money from the homeowners by assigning this job to their onsite manager and/or board members(s). This went wrong when they discovered that there were two sets of bookkeeping, where what was collected by the individual homeowners was different that what was paid to the community!
WATER SUB-METER ALTERNATIVE:
Recently, there is a new alternative to water sub-meters that we have become aware of. SimpleSUB makes a water measuring device that straps onto the water pipe with zip ties and works on a cellular connection – no Wi-Fi, and no plumbing required. They also offer a monthly water billing service. We do not know of any communities that have used this product yet, but it appears to be a good way to try water sub-metering without a huge financial cost and long-term commitment. Here is a link to their website: https://www.simplesubwater.com/
There are probably other alternatives to this company, but the idea is to monitor water consumption without additional huge short-term and long-term financial costs for homeowner associations and communities!
In Part I of this article series, we discussed in detail each of these issues for individual homeowner water sub-meters:
1) Prior to installing sub meters for any utility, the CC&R’s have to be amended to allow the association to legally collect any subsequent charges for the individual homeowner’s water utility charges!
2) Getting CC&R’s amended, in most associations, requires a majority vote of the homeowners.
3) If CC&R’s are amended, can sub meters actually be installed on property?
4) If sub meters can be installed on the property, what is the cost, and is a special assessment needed?
5) Once sub meters are installed on the property, who reads them each month and who sends out the bills each month and who collects the money from each homeowner each month?
6) What if the sub meters break or stop working property?
7) You will still get billed from the city or utility company – these water/sewer bill(s) never go away!!
8) If the association water utility bills increase, these cost increases are generally just filtered through to the homeowners, instead of questioned by the manager and/or board of directors or homeowners.
In Part 2 of this article series, we discussed in detail each of these issues for water sub-meters for irrigation-only water. In other words, eliminating sewer service charges for irrigation water or reducing sewer service charges so that they reflect only the amount of water returned to the sewer service system, excluding water used for pools, spas, boilers, HVAC systems, cooling towers, water features and landscaping:
1) Cost of sub-meters.
2) Extensive and time-consuming application process with city or county.
3) Extensive and costly plumbing process.
4) You will be responsible for all of the costs associated with the installation and maintenance of the sub-meter, as the sub-meter belongs to you.
5) You will be paying higher sewer fees in the future for all water that is not registered by the sub-meter, many times resulting in higher overall water bills than before.
6) Higher risk of incorrect water/sewer bills in the future.