Water Billing - Tiered?


We are going to be installing water meters under each home and am weighing billing options. We are on a well and currently water is included in lot rent but too many people take advantage of it leaving their sprinklers running all night, inside faucets running full blast during the winter so their pipes won’t freeze, etc.

How do you bill?? Do you determine a per gallon charge based on expenses for the prior month, prior year, prior quarter or something else? Do you bill for every gallon used or include a base amount in lot rent and tier the billing for usage over and above? Do you offer credits in the summer for lawn watering?

I want to make sure I’m fair to my tenants but don’t want to screw myself. Thanks!


In Texas when you do this you have to register as a new Utility District. As part of this you have to demonstrate to the Utility Commission your expected charges per 1,000 gallons. Take your historical data related to how much it truly costs to operate the entire water service, including any of your time to manage it, reserves for capital improvements (when the big stuff breaks), electricity, treatment supplies, service providers, etc to come up with a rate per 1,000 gallons, plus any fees, taxes required by your regulatory body.

Compare that to the rates charged by the nearest city or other Utility Districts as a barometer and ask yourself if you think this is a fair deal for everyone. If you end up being short or long then you can submit an adjustment to the Utility Commission every 6 months I believe, but have to show the math behind that change. Communicate a lot with your Commission to make sure you get a view on what they typically see, any pitfalls.

Not sure where you’re based but hopefully this is helpful and similar where you reside.


Thanks, jhutson!

That does help. We are in WA and don’t have to go through the Utility Commission but can only charge tenants what our actual costs are.