Using a Utility Billing Company for a Condo complex

Dotti, first off can you do it? Our Covenants for instance specify water and sewage will be included in our annual assessment but also specifies a mechanism by which we can add individual metering. If your Covenants don't have a similar provision then in my lay opinion you would first have to amend your Covenants to allow it. Next you really need to run the numbers to see if it is worth it, instead of paying the company $3. month to bill individually what if you just raised assessments $3. a month to pay for the water.

Dotti

Will you be lowering the dues as a result of the association not paying the water bill anymore? If not, then expect a sever backlash.

We can do it. According to the Utility Billing Company, the $3 service charge is
passed onto the homeowner. The RUB cost does not cover the entire water bill
just a percentage of it, to add a little extra income to the HOA to be used
exclusively toward our high water bills.
The company also tells us, other communities that have implemented RUB, reduce their water
bills because usage goes down. When people have to pay for water they conserve more.
The company tells us there are several ways to compile the monthly fee, by square footage,
number of residents or a combination.
Thanks so much for your help.

You're right but the company tells us they have methods of figuring an amount.
It's not an amount that covers 100% of their water usage just a portion of it.
It's supposed to be a way of generating money for the HOA to help pay the water bills.

Dotti, I reiterate does your Covenants allow for this scheme or is water supposed to be part of the assessments? If it is then that is where you need to start, by amending the Covenant to allow it.

We turned off the irrigation system for a year now, so it is not being used for landscaping.
The RUB is the suggestion from our Property Manager. We have a Management company.

Dottie

The more you post, the more I think your association is in more financial trouble then just the water bill. You say you are behind and your income does not cover your out go (Operational Expenses). What are you doing about Reserve Funding for the future?

We have been studying and implementing water conservation measures for the last couple of years. I am not familiar with RUB or TABS. But I did look them up.

TABS appears to make sense in the commercial retail setting. They have collected lots of data on what each type or retail operation uses. So an 800 s.f. shoe repair shop typically uses so much water (or electricity or other utility) and a 3,000 s.f. toy store uses so much water. This information is then used to estimate usage for the retail tenants.

RUB appears to make sense in a residential rental setting. They typically calculate fees and track move in and move out dates. Fees can be based on number of beds, bedrooms, s.f., or other factors.

In both of these settings, the landlord typically has the leverage and the tenant does not. If you don't like the program, rent from someone else.

As an HOA, you don't have this kind of leverage and you should expect a lot of push back.

One issue we faced is that some of our owners live here only 6 months a year. When water was part of the general fees, we never had any objections. But once you break things down to the level of water usage, those who go south for the winter object to paying for services they don't use. Then we have those who go away for a month. What do we do about them? And once we open that door, are we going to be tracking everyone's vacation. Some will demand it. Others will object to it. There is also a point where people think we are intruding on their lives if we ask for too much info.

There are no simple answers. Much depends on how urgent your needs are.

Let me get this straight. You want to change to a scheme where each owner writes a check each month for a fraction of the cost of the water he uses plus a fee. But the bill does not actually depend on how much water he uses. So there is minimal incentive to reduce water use and there is no feedback if he has reduced water use.

A rational person would prefer the original scheme, because he would not have to write a monthly check and he would save the 3 bucks.

There are sub-metering companies out there who will cover the initial capital investment so that there are no up front costs to the HOA. This initial cost is typically amortized over 5 years. The owner is billed for his or her share of this amortization cost plus actual usage plus service fee.

I did a little research and found that there are a lot of companies that offer this billing service. Therefore, encourage your Board to shop around.

Excluding the billing companies websites, I didn't find a whole lot of info. I did find the following article on Ratio Utility Billing System from CA:

Utility Billing Alternatives in Master Metered Apartment Buildings from the CA Apartment Association. It does mention that there have been several unfair business practice lawsuits due to RUBS.