Hey there! I’m billing back W/S to a community that wasn’t set up that way before, as it turns out however, the city charges roughly $20of base fees per Mobile Home Lot in this community before any usage is accounted for (Water and sewer base fees, taxes and something else) - this to me means that with regular usage (3,000-5,000) gallons of usage per home, their bill would be 50-60 a month when you add in the base fees from the city. This seems pretty high to me…
Curious to know what other operators would prefer to do. Would you guys:
Absorb these base fees and only charge the tenant for their usage.
Bill them back to the tenant along with their usage bill?.
In this state it’s legal to do it both ways, so long you aren’t profiting, which was also confirmed by the city. So it’s a business decision really, not a legal one.
I know operators typically just bill it all, but to me 20 dollars on just base fees seems pretty egregious. Not sure how others would feel…
The base fees can be very high sometimes. The Village/Town where my park is charges a base/flat rate of $30 for sewer and $11.44 for water, then $9.72 for every 1000 gallons of sewer processed and $4.51 for every 1000 gallons of water used. When I bought the park the previous owners weren’t charging for water/sewer however the lots were sub metered. They just had a lot rent increase of $25. When I bought the park my plan was to pass along the water and sewer fee but felt it was too expensive for the tenants to take on all at once, especially since there was a rent increase a few months before. I ended up reducing the lot rent by $15 and passed along only the sewer fee (base fee and usage fee). Then a year later passed along the water base and usage fee. The average water/sewer bill in my park is $77 (2500 gallons).
SUB-METERING
I understand you’re in a non-regulated state (if regulated , the “approved rates” should be charged).
Charging residents for their fair share of utilities, or increasing rents to market levels is necessary for the economic viability of your MHP.
That being said, we have had success with charging the full amounts on the residents’ monthly W & S bills, along with a credit reflecting “Amount Paid by Management”.
Reflecting the actual W & S cost puts residents on notice what water and sewer actually cost;
Close to market if not at market. Water/sewer is however killing profits at this specific park, so it has to be done for the park to succeed. Last rent increase was $15 and rent was not increased in 2020, years beforehand it has been $10 steadily.
@tmperrault - that’s interesting. I opted to simply just pass it all, and offer a one time credit of 20 dollars this month to warn tenants to start conserving usage for next bill which will not have a credit. I’m also offering free plumber visit per home to help with common leaks, and handed some flyers to help with water usage. Will report later how it goes…
@DanHelton do these base fees look in line to you or is it egregious?
On another note - do you guys also pass monthly water meter fees or do you just cover it from the community side? Curious on what other operators are doing.
Regarding “Base Fees” charged by your municipal supplier, the charges are a factor in in the utility’s total revenue structure. Some municipal utilities charge higher per gallon rate, while others charge less and include higher base fees. Seems simple, but not really:
Base Fees make up for non-revenue producing water;
Non-revenue water consumption is due to aging infrastructure (old meters and leaking pipes). Old meter do not capture (measure low flow).
New smart meters (like used in sub-metering) can identify wastes and leaks, then water consumption drops, and the utility charges more in base fees to offset the loss of revenue producing water.
Finally, your state’s Public Utility Commission reviews the rational of water rates, however Sewer is typically not regulated by the PUC: Sewer infrastructure is financed through Revenue Bonds; Sewer Rates are set to insure the Bond investors gets paid.