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Water Sub-Metering for Community Associations

10/01/2018 1:50 PM | CAI Rocky Mountain Chapter (Administrator)

By Rick Minogue, Metron Sustainable Services

In the last 5 to 10 years, prices for the delivery of fresh water to residences and businesses across the United States has skyrocketed.  The price for wastewater treatment, which is often connected by percentage or algorithm to fresh water consumption, has increased as well.  In Colorado, most new dwelling units are required to have water meters installed during construction.  However, that leaves structures and communities 10 years and older available as candidates for water sub-metering.

For Community Association Professionals and their Boards of Directors, here is a brief introduction to water sub-metering.

What is water sub-metering and how does it work?

Many older communities, including single family dwellings, condos, high rises, and townhomes, have one master meter on the water supply line serving all of the units.  The water supply lines that feed each individual unit subdivide AFTER the master meter.  The master meter shows the total amount of water delivered to the community, but there is no way to calculate how much was used by each individual home, the pool or clubhouse, irrigation, etc.

To sub-meter a community’s water use, a water meter is installed at each home where the fresh water supply line enters the home, usually on the inside.  Meters can also be placed in the clubhouse and irrigation lines.  In a home, the meter is placed before the water lines divide to hot and cold, before any hose connections, etc.  Most modern meters are electronic, and read to a tablet, computer application, and/or a web portal.  Some use internet, others use a cellular network. Some meters even have their own phone app, so that a resident can monitor his or her water consumption while texting, calling the kids, checking email, setting appointments, and other essential driving tasks. (JUST KIDDING!)

Once the meters are installed in the community, the management or sub-metering company takes a monthly consumption reading from each home on a designated day of the month via the web.  Then, using utility billing software and the local water rates and tiers that have been pre-loaded into it, each home is billed for the amount of water used.

Why would a Community Association sub-meter?

  • Water is a utility like electric and gas.  People should not expect to get their water for “free.”
  • Recovery of costs – Communities on a master meter get one large water bill every month. After sub-metering, the Association is able to recover most of the water expense (minus irrigation and shared use) directly from the users.  The money is collected and then used to pay the water utility, which is still billing the Association from the read on the master meter.
  • Fairness – With sub-metering, everyone pays for the water they actually use.  
  • Sustainability – When individual homes pay for the water they use, there is much more incentive to fix a leaking toilet or broken irrigation head.  A toilet that runs 2 gals/minute for a month wastes more water than 10 or more families of four during the same period.  
  • Conserving our water resources – it’s no secret – when people pay for something, they’re more conscious of its use.  In many communities, total water consumption at the master meter decreases by 20% or more simply because users are more conscientious.

Can any community sub-meter?

The short answer is no, for two main reasons:

  1. Many condo and high rise buildings recirculate hot water, in others, the units are plumbed together and share a common water heater, or utility risers are grouped so that one unit’s kitchen may be on one riser, but the same unit’s bathrooms may be on another.  Each dwelling unit would require multiple meters to collect the total consumption, or as in the case of shared supply lines, cost prohibitive changes would make sub-metering too expensive and invasive.

If an Association is considering sub-metering, the first step is a thorough evaluation by a qualified contractor.

  1. The governing documents may prohibit it.  Although the docs can be changed, that is typically a time consuming and expensive process.

Can Associations make a profit on water?

Absolutely not.  Marking up water effectively converts an Association into a sub-utility, with all the inspection and health monitoring requirements.  Don’t even think about it.

Can Associations add the cost of administration of sub-metering to water consumption invoices?

Yes, and many do.  Often, when the decision to sub-meter is implemented, the Association may also distribute the costs of wastewater management (which again is usually pegged to potable water consumption using a predetermined formula) with residents.

Are there arguments against sub-metering?

Yes.  Let’s look at a few:

  • The most obvious arguments against sub-metering are when governing docs or structural design make the process cost-prohibitive.
  • There have recently been special assessments or large increases in regular assessment amounts imposed, and asking owners to pay for water in addition to the new increases can be construed as draconian.
  • Fixed or low income population.

What advice would you give Boards and CMs?

  • The Community Manager and Board of Directors should look at the decision of whether to sub-meter a particular community very differently from the one focused on choosing which contractor should mow the grounds or clear the snow.  There should be several scheduled open forums allowing free give and take between residents, owners, and the Board.
  • Waive the first month’s water bills.  We always advise our new client associations to send the first one or two water bills with “DO NOT PAY.  THIS WOULD HAVE BEEN YOUR WATER BILL FOR THE PERIOD.”  That allows people to get their budgets and minds around the changes.

Conclusion:

Water sub-metering is growing exponentially across the entire United States.  Some of our company’s fastest growing states – Michigan, Wisconsin, Minnesota, might seem intuitively incongruous.  Everywhere, city and utility managers have become more conscious of our water resources, and are pricing water more accurately as scarcity and aging delivery infrastructure is replaced and upgraded.    At some point, most Community Associations in the Rocky Mountain Region will probably consider sub-metering as a way of getting control of escalating water costs.  

There are many great sub-metering companies out there, and when reviewing proposals, be sure to ask about warranty, accuracy, auxiliary services (such as installation, billing and collection, data management, software platforms that can communicate properly with the management company’s software, etc.).  Your association counsel should always be consulted before and during the process.

We are always here to help and to answer questions.  Thank you for conserving our most precious natural resource.

Rick Minogue is Managing Director of Metron Sustainable Services, and VP of Operations at Transparent Technologies and Metron-Farnier.  Rick Minogue agreed to run Frankfort, Germany-based Techem GmbH’s US water sub-metering start-up in 2014 .  Later, he helped guide the sale of the company to Boulder-based investors, who renamed it Metron Sustainable Services.  His background is in construction and real-estate.

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