Budgeting and Controlling Water and Sewer Usage in Today’s Economy

Many condominium associations were developed with water and sewer charges built into the condominium fee structure because the builder installed one master water meter which the city would read and bill back to the association. In good economic times, this was an adequate arrangement, but it is a less than ideal situation now for several reasons.

Households vary in size and in water usage, so inevitably smaller families end up effectively subsidizing larger households higher water usage. In this situation, there is no immediate incentive for residents to conserve water use unless they are always considering the potential impact on their condominium budget. Residents typically don’t entertain such notions while taking Hollywood showers, watering their lawns or washing their cars. Another drawback is that as the community ages, there is no way to determine if minor plumbing leaks are occurring, flapper valves in toilets are not seating properly, etc. Lastly, in tough economic times when delinquencies rise, managers have no accurate way to gauge water usage when they have to turn over accounts to the association’s collections attorney, so they are not capturing the full extent of the delinquency situation.

I manage two communities that took effective action to deal with these situations. One condominium community installed water meters inside the homes several years ago, locating them inside a closet at the entrance area and running an electrical wire outside to their entrance patio area where a remote “counter” was located that the private meter reading company would read and bill back to the owners for reimbursement to the association. This worked well for quite some time, until the outside counters began to fail or people remodeled and the wires were cut on the inside in the course of installing new flooring. The gap between what the city charged the association for water and sewer use and what was reimbursed from owners grew as the counters started failing and under-reporting actual usage.

The solution chosen by the board of directors was a new meter face that could be changed out without replacing the meter itself. The new meter face has a transceiver on it that can be interrogated from quite a distance outside the home by the meter reading company using a handheld device. The new unit can report if there is any attempt to tamper with it, and can transmit detailed information such as times of high water use in particular units/ This ability has been of great assistance in identifying plumbing problems for owners. It also solved the problem of no access to reading the counters due to locked patio gates or dogs on the patios.

Another community was built as a single-family condominium association, with owners living in single family homes with garages. This community has one master meter at the entrance, which the city reads and bills to the association. Water and sewer charges constitute a significant portion of the overall condominium fee because the governing documents make all building maintenance an owner responsibility. Fenced-in back yards are maintained by the owner as well, so in this situation, water usage during the warmer months spiked when residents were watering lawns and washing cars more frequently. In this instance, the board of directors decided to install water meters at each of the homes. Once the project was complete the goal was to lower the condominium fee by dropping water and sewer charges out of the overall fee structure. They succeeded in this, and owners are happy that they are being charged for their actual usage.

In each instance, the board of directors appropriately responded to their budgeted water and sewer shortfalls with a solution that eliminated cash flow impacts and enhanced owner responsibility for utility usage. They communicated the problem to the community in advance in newsletters and stand-alone mailings, held meetings to discuss the situation, and garnered the support of the community for implementing the chosen solution, which has put their communities in better financial standing.

Daniel C. McAteer
CMCA®, PCAM®
Account Officer
Community Group
Virginia Beach, VA