Submetering

The biggest cost facing Madison Hill is water. About 1/3 of the association's cost is the city water bill, which has been rising.

In an effort to conserve water (and create another fineable offense), the association banned the use of outdoor hoses earlier this year, and xeriscaped the front entrance. In spite of such heroic and creative efforts, the possibility of an increase in H.O.A. dues is very real. The property management company has already recommended increasing the monthly dues this year.

Currently, there is one water meter for the community, with the bill paid for by the H.O.A. as a whole. As a result, units that use less water subsidize units that use more water.

Installing municipal water meters to each unit would be prohibitively expense. The figure of $20,000 per unit was mentioned by the board of directors at the members meeting in June.

Fortunately, there is an alternative that has not yet been explored -- submetering. Submetering is a practice in which small meters are placed in each individual unit. Modern submeter units transmit their readings electronically to a master unit (or drive-by unit) over a wireless signal. The readings are then collected, and each individual unit is billed for actual water usage, either by the H.O.A. or directly by the submetering contractor.

Individual water submeter units cost about $100 each. According to the City of Westminster Utilities (Water Bill Payment) department, installation costs per unit would probably be in the hundreds of dollars, with $1,000 per unit being on the high end. *

Once individual units are being billed for the water they actually use, the H.O.A. can reduce the monthly dues by approximately 1/3 (minus the water used for the common areas). Instead of $161 per month (or more), monthly H.O.A dues could be reduced to the $110 range.

Fortunately, when considering what improvements needed to be made, the association decided that new siding -- which cost 5 to 10 times as much as submetering -- was more important. This was at the same time the H.O.A. president put his unit (#43) on the market for sale, about two years ago.

Once the $1.5 million loan for the siding project is paid off in another five years, the Madison Hill Homeowners Association can investigate a project that will save the homeowners money, improve property values, effectively promote water conservation, control the largest single expense for the association, and eliminate the need for at least one finable offense.

* Based on a phone conversation. Nobody has actually come to Madison Hill to make an inspection of the properties for a more accurate estimate.

UPDATE: Corrected figures on water usage and H.O.A. dues above. I had originally typed 2/3 instead of 1/3, thus overestimating the reduction in dues that would result from sub-metering.