I truly appreciate the responses.
Two points for consideration. Most of my tenants in this park are on fixed incomes and cannot handle a large increase in monthly expense. Also, the majority of the water bill (60%) consists of non-consumption line items: municipal debt repayment, water capital replacement reserves, operations and maintenance, plant replacement, etc. These items are fixed costs and do not change whether I use 1 gallon of water or a 100,000.
So the reduction in actual consumption will have a minimal affect on the water/sewer bill. The real impact will be from sharing the fixed line item costs with the tenants. With this in mind, I’m leaning toward reducing the monthly rent by $20-30 for one year to offset the transfer of these costs to the tenants. The math demonstrates that I still end up ahead and my payback period for the initial sub meter purchase/installation will be measured in months.