Published in the ECHO Journal, June 2008

Water is one of our most precious commodities. Thus water shortages and the threat of mandatory cuts of water usage are large concerns among all California citizens. Water districts throughout the state are asking residents to cut their water usage by 10 percent or 20 gallons per day. Some water districts are also looking at restructuring their water rates to penalize the larger users by imposing escalating tiers. Sub-metering promotes water conservation and might be a responsible solution for your homeowner association if the association pays for all water.

What is Sub-Metering?

In the past, condominium communities were built with one master city water meter, and that meter would service all residents. Water and sewer costs were simply included in the homeowner’s maintenance assessment. That worked well when water wasn’t an issue, and water/sewer costs were a fraction of what they are now. If this is the case for your association, now is the time to look for a responsible solution that reduces the association’s expenses, increases property value and promotes water conservation.

Approximately ten years ago, sub-metering became a popular new trend, and now all new communities in California are being sub-metered. Sub-meters are the same type of meters the city uses to measure water usage. They are installed behind the city master meter at each individual condominium unit. Figure 1 shows a typical meter installation outside one unit. Residents are charged the same rate for water and sewer as their city is charging the association. It offers equitable distribution of cost, as well as the peace of mind of knowing that you are paying only for the water you use and not for your neighbors’ leaks and water wasting habits.

How Does Sub-Metering Work?

  1. The requirements to sub-meter water mandate that each unit must have an individual hot water heater and an individual water shut-off valve. Your board or mamager can contact a sub-metering specialist to obtain an estimate to install sub-meters. The sub-metering company will require a plot map of your community, copy of a recent water bill, and a couple photos of your plumbing configurations where your shut-off valves are located.
  2. If the board accepts the estimates, then a meeting between the sub-metering company and the board should be scheduled. The board members need to have their questions answered before they present the concept of sub-metering to the residents.
  3. Here are just some of the frequently asked questions:

    • Where will the meters be installed and how will they look? The meters will be installed just above the shut-off valve to each unit. The shut-off valves are usually located just outside the units or in the garages.
    • What is the service fee to read, bill, and collect for water? The sub-metering company will provide that information based on whether the meters will be billed monthly or bi-monthly.
    • Who pays the service fee? The service fee is added on the water bill and is paid by the homeowner.
    • Do we still pay the city water bill? Yes, the association will still receive the city water bill and pay the bill as they have done in the past.
    • How are meters paid for? Usually the meters are paid for by the money in reserves. Also, you can ask the sub-metering company if it offers a financing program.
    • Who owns and services the meters? The meters are owned by the association and most sub-metering companies will service the meter if needed.
    • It is important that the board is well informed and in agreement with the various sub-metering issues prior to addressing the residents. Many boards feel they have a financial obligation to sub-meter water because it saves money, fairly allocates water cost based on usage and thus promotes water conservation.
  4. If you vote to proceed, establish a plan of actions. Start with a projected date and a goal of when you would like the meters installed and to start billing residents for water and sewer. Schedule another meeting with the sub-metering company to review and approve the installation process.
  5. Send a newsletter to the residents informing them of the sub-metering process. You will notice immediately that water consumption starts to go down as occupants anticipate having to start paying for their water usage. Sub-metering generates big savings and immediately rewards residents for water conservation.
  6. After the meters are installed, they are all read on the same day. Figure 2 shows a meter being read. The sub-metering company will send the meter reading and a general information letter to each homeowner. This will inform them how the sub-metering company reads the meters, bills the residents and collects the money. The company will add a service fee to the water bill. All water bills are mailed to the owners; renters are not billed. The money collected along with accounting worksheets are sent by the sub-metering contractor to the property manager who in turns pays the city water bill as they have always done.

After sub-meters are installed, water usage typically goes down between 20 to 30 percent. When homeowners start paying for their water, they will be encouraged to conserve and to repair leaks. The results show dramatic reduction in water usage and costs. In addition when water rates increase in the future, you will not have to raise your homeowner dues to cover the cost of residential water cost ever again.

Mary Wulf is the director of business and development at California Sub-Meters, Inc.