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directly to and then paid by the third party billing company. However it is more common for the owner or property manager to continue to receive the utility bill and then pass the information along the billing service provider. The billing service provider sends the bills the residents, and the residents send their payments to the owner. The owner pays the full utility bill. Billing service companies profess not to make a profit reselling water and wastewater services. The research team found that in most submetered properties the actual commodity charge for water and wastewater from the utility is passed straight through to the residents without any inflation. There were a few notable exceptions to this however. With RUBS it is frequently impossible to determine the actual commodity charge from the bill sent to the resident, and therefore it cannot be determined empirically if water and wastewater services are being inflated. Billing service companies make a profit by including a service charge on every bill they send out. This service charge typically ranges from $1 to more than $6 per bill, and the average service charge is about $3.25 per bill. Like service charges assessed by water utilities, the third party billing company service charge is assessed irrespective of the amount of water used. In addition to the service charge, billing service companies may assess late fees and other charges on the resident’s bill such as a metering fee. The exact fees charged are often determined on a property by property basis and depending upon the regulatory requirements of state or local jurisdiction. As evidenced by the number of billing service companies doing business in the US, billing multi-family dwelling residents for water, wastewater, and other services is profitable. A simplistic analysis shows that a relatively small company sending out 30,000 bills per month and charging an average service fee of $3 per bill could gross more than $1 million per year. A large billing service company sending out 300,000 bills per month could gross more than $10 million per year. These are simplified gross revenue estimates and actual net revenue must take into account all of the costs of doing business, but the potential profitability of this type of business is apparent. To learn more about billing service companies, their business practices, and how they operate the research team developed a survey instrument that was sent to the highest-ranking officer that could be identified at each billing service company. 118
Sample Size A total of 36 surveys were sent to all water billing companies listed in the most recent roster from the National Submetering and Utility Allocation Association. A second mailing was sent to non-respondents. A total of 18 surveys (50% response rate) were completed and returned. General Description of Billing Companies The 18 companies that responded to the survey send a combined total of 1,428,200 individual bills per month. The largest company sends about 450,000 bills per month and the smallest about 2,500. The median was 36,000. Most of the companies began operating during the 1990s and 1997 was the median start date. The oldest company was started in 1984 and the newest in 2002. Just over 61% of the companies have a national clientele while the remaining 39% are regionally focused. About 61% of the companies are bonded and 39% are not. Billing Method The overwhelming majority of billing companies surveyed (94.7%) offer a combination of submetering, RUBS, and hot water hybrid billing methodologies. Only one company indicated that they provide RUBS billing exclusively. Approximately 44.7% of the bills sent out by respondents are to submetered dwellings, 48.6% of the bills go to RUBS units, and 6.6% of the bills are for hot water hybrid. RUBS Methods Many of the billing companies offer a wide variety of RUBS allocation methodologies to their customers. Billing based on the number of residents per unit was the most common allocation method followed by billing based on the area (square footage) of each dwelling unit. Table 4.20 shows the frequency of each methodology (percents add to more than 100% as respondents could give more than one answer). The “other” methods implemented included combinations of other allocation methods and other weighting factors customized on an individual property basis. Respondents indicated that the practice of subtracting common area water use and/or irrigation from RUBS customers bills is a fairly common practice with 55.6 percent reporting that they make this subtraction for all of their RUBS customers. Another 38.9 percent reported making this adjustment for “some” RUBS properties. Only one respondent (5.6%) reported 119
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NATIONAL MULTIPLE FAMILY SUBMETERIN
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CONTENTS LIST OF TABLES............
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Matched-Pair Analysis .............
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LIST OF TABLES Table ES.1.1 Breakdo
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Table 6.6 Elasticity values, analys
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Figure 4.30 RUBS water bill #6 ....
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investigated local water savings as
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We are grateful to the members of a
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quantitative aspects of separate bi
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3. Owner/postcard survey: To identi
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"averages" of impact property water
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in-rent properties, others used the
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of these models included the billin
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70 Average Annual Water Use Per Uni
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COSTS AND BENEFITS Beyond quantifyi
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service charge, then the resident w
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Billing Method Efficient Fixtures?
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70 Avg. Water Use per MF Unit (kgal
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REGULATORY FRAMEWORK REVIEW The fra
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Table ES.1.12 NSUAA Summary of Stat
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above, the researchers offer the fo
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service is preferable, and would he
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practices (BMPs) should be implemen
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infrastructure of the building and
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multi-family housing. The transfer
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CHAPTER 1 INTRODU CTION More and mo
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In 1998, 15.0%, or 15.4 million, of
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TERMINOLOGY AND DEFINITIONS OF BILL
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submetering. With utility-submeteri
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all the two bedroom units for $20 p
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HOW TO USE THIS REPORT This report
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CHAPTER 2 LITERAT URE REVIEW As the
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A review of the literature unearthe
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The price elasticity of water deman
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expected. Additionally, McClelland
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submetered and five control (in-ren
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Another study might want to target
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CHAPTER 3 RESEARC H METHODS, APPROA
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1. Selection of participating study
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STUDY SITE SELECTION The Study aime
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Figure 3.2 National Multiple Family
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Matched pair protocol/survey - conf
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information given the available bud
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survey. Service companies that prov
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in “business to business” calli
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MATCHED PAIR SAMPLE The purpose of
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The second part of the visit requir
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epresentative of a known population
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51 Table 3.7 Postcard survey statis
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Table 3.8 Comparison of annual wate
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postcard survey. Nevertheless, exam
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confidence interval ranged from 49.
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particular property (e.g., the mont
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State PUC officials - water commiss
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10. The PROPID number appearing on
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These costs represent the commodity
Page 120 and 121: The postcard survey provided inform
Page 122 and 123: Table 4.4 Average number of units f
Page 124 and 125: Two-thirds of the properties that r
Page 126 and 127: Percent of Surveyed Properties with
Page 128 and 129: $700 Average Rent Per Bedroom ($) $
Page 130 and 131: Percent of Surveyed Properties with
Page 132 and 133: Impact properties were also more li
Page 134 and 135: Table 4.8 Issues considered before
Page 136 and 137: Percent of Surveyed Impact Properti
Page 138 and 139: 60% Percent of Surveyed Properties
Page 140 and 141: From the visits, it was found that
Page 142 and 143: 100% Percent of Surveyed Residents
Page 144 and 145: Roughly similar proportions of resi
Page 146 and 147: inserts for toilets (21%) or low-fl
Page 148 and 149: proportion were unsure, 37% from su
Page 150 and 151: Table 4.18 Ownership and rental rat
Page 152 and 153: Figure 4.17 Submeter water bill #1
Page 158 and 159: wastewater rates are not shown so t
Page 160 and 161: Figure 4.23 Hot water hybrid water
Page 162 and 163: RUBS Sample Bills Seven sample RUBS
Page 164 and 165: wastewater rates are not shown so t
Page 166 and 167: Figure 4.28 RUBS water bill #4 from
Page 168 and 169: Figure 4.30 RUBS water bill #6 RUBS
Page 172 and 173: never subtracting for common area w
Page 174 and 175: Late Fees At the start of water bil
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Page 178 and 179: intuitively clear, and matches comm
Page 180 and 181: Indoor water use was normalized on
Page 182 and 183: Table 5.3 Summarized water use anal
Page 184 and 185: easonable assumption since there is
Page 186 and 187: Figure 5.1 shows the frequency dist
Page 188 and 189: 40 Difference in Annual Water Use p
Page 190 and 191: after 1995. By including only those
Page 192 and 193: 70 Average Annual Water Use Per Uni
Page 194 and 195: Table 5.11 Statistical tests compar
Page 196 and 197: Factors that Influence Water Use Th
Page 198 and 199: Table 5.12 Association of categoric
Page 200 and 201: Indoor Water Use per Unit in 2001 I
Page 202 and 203: Table 5.13 Continuous factors from
Page 204 and 205: Multivariate Models to Determine Im
Page 206 and 207: properties built before 1995 were c
Page 208 and 209: 70 Average Annual Water Use Per Uni
Page 210 and 211: A = Beta coefficient for “Propert
Page 212 and 213: substantially reduces the sample si
Page 214 and 215: Table 5.17 Model #2 coefficients an
Page 216 and 217: 0.00 indicating that whatever fit d
Page 218 and 219: commodity charge for water and wast
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properties having generally lower w
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110 Average Annual Water Use Per Un
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analysis, intended to control best
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Table 5.27 Paired samples test, all
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Table 5.30 Estimated water use befo
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Table 5.33 Comparison of water savi
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180
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sector only reduced usage by 18% (A
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Table 6.1 Avoided costs from submet
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submetered. Complete responses of c
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included in this cost/benefit analy
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Table 6.3 Cost and benefit for owne
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Perceived Concerns In the resident
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With a service fee, residents could
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Table 6.4 Economic return for a res
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ANALYSIS OF PRICE ELASTICITIES Econ
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concluded that if a single elastici
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esults from this analysis point to
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over which they have control than d
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According to the basic consumer cho
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The consumer choice problem can be
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210
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water systems from compliance with
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and methods of practice. NIST publi
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Table 7.1 NSUAA Summary of State Re
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New Surveys of State Agencies and W
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the AWWA WaterStats 1999 database.
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Measures, which dispatches a public
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Mississippi, Missouri, Pennsylvania
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226 Table 7.6 Summary of utility re
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DISCUSSION - KEY EXAMPLES OF STATE
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ill. Condominium associations are g
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under construction after January 1,
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Weights and Measures Regulation In
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from the submetering. Meter testing
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clean and decent housing or the lac
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240
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NATIONAL ORGANIZATIONAL STRUCTURE F
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complaints in all 50 states and app
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- Meters must demonstrate in testin
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- Plumbing systems are space constr
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(2) Twisted or kinked flex supply l
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252
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Estimated Water Use By Different Bi
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there are clear benefits to these s
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study site. These values were then
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immediately strengthens the owner's
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among the nation's key strategies f
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all repair and replacement decision
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These findings underscore the obser
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varies with volume of use) for mult
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Recommendation 6 - Efficient plumbi
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financially responsible for their o
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individual unit, the volume allocat
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RECOMMENDATIONS FOR FURTHER RESEARC
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Fixed rates - Part of a master mete
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Total-capture submetering - a type
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282
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Corral, L.R. 1997. Price and Non-Pr
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McClelland, L. 1980. Encouraging En
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Young, C.E., K.R. Kinsley and W.E.
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