Owners, property managers and condo associations have two challenges in common when it comes time to develop an annual budget. Utility costs, particularly water, rise without any hint of abating and raising rents or condo fees becomes increasingly challenging, particularly in hot markets where maxed-out rents are coupled with rising vacancy.

 

As local municipalities try to ballast their tax base, they have found water and sewer charges an attractive way to raise revenues without appearing to raise property taxes. By employing submetering, savvy owners and property managers have discovered a way to bolster revenue and contain utility costs. But even if your 100-unit property is fortunate enough to have 100 separate water meters, tracking each unit's water usage and billing accordingly can be a logistical headache.

 

That's where utility billing software often fills a gap.

 

Keep Money Flowing In
Utility billing software such as El Dorado Softworld, distributed by Richmond, Ore.-based ELD. Soft, can manage all sorts of charges, from electric and gas to water and trash, even cable. By loading your rate schedules and regular meter readings, the software will calculate bills, generate statements or assess late fees. The advantage, says Moquey Marquross of El Dorado Softworld, is that it saves the property owner time. By avoiding hand calculations or maintaining complicated spreadsheets, the property manager or owner has the time to more effectively manage the property. The software also can be loaded onto hand-held devices so that readings can be taken faster.

 

"With the options of loading as many as 99 different rate schedules (if you're managing different buildings from one location), and 14 fields to sort clients, our average client uses only about 20 to 30 percent of the functionality," Marquross says.

 

By using reports from the software, managers can flag meters that suddenly show spikes in usage, a possible sign that there's a costly pipe leak, before your water bill arrives to break the bad news. Over time, submetering can actually affect behavior. Several studies, such as one conducted by The National Multiple Family Submetering and Allocation Billing Program Study, have shown that submetering can reduce water consumption by an average of 15 percent.

 

Before jumping into the submetering fray too quickly, there are some things an owner or manager should consider.

 

Know Your Community
Marquross concedes that his system works well if you are managing at least 20 units or more. Fewer than that and the task of breaking out a water bill probably is manageable with a pen and paper. That said, smaller property owners of 5 to 15 unit communities increasingly have pooled their resources, sometimes using Marquross or another third-party provider, such as San Diego-based Greiner Billings, to print and mail statements in exchange for the use of the software.

Some buildings are more adaptable to submetering than others. According to Bill Greiner of Greiner Billings, all buildings built since 1991 have the capacity to be submetered in order to conform to the National Plumbing Code's universal standards. Older buildings may be trickier to retrofit.

 

Nobody Likes Surprises
When coming into a new community, Greiner urges owners to prepare their tenants for the new charges, especially if utilities had previously been included in the rent. He sends introductory letters well before the first billing and that first bill arrives with a statement and an explanation of the charges.

 

The most common source of lost money is a leaky toilet. "People don't believe me when I tell them how a leaky toilet can cost them $500," he says. He suggests that those with sudden increases in their water bills put dark kitchen food dye in the toilet tank before retiring for the evening. In the morning, if the dye has gone from the tank to the commode itself, it's an indicator of a worn-out stopper that needs to be replaced.

 

A tip for property managers: If you find one unit with a corroded toilet stopper, save yourself some grief and replace all stoppers in your building. Odds are if one fails, the rest are soon to follow.

 

Where to Begin

There are several providers of utility billing software on the market. Some questions to ask include: How often does the provider upgrade its software? You don't want to install a program that may become obsolete with the next system upgrade. What ancillary services are provided? Some providers also offer third-party billing and hand-held devices to facilitate regular readings. Is the provider experienced in your market? Different states regulate submetering differently. Some states, like Massachusetts, forbid submetering water. Other states require the manager to become a licensed utility provider.