Generally, most municipalities attach fixed flat charges to the water and wastewater usage bills as part of their capital charges. These charges are usually attributed to the master meter on-site, and can be quite substantial. When a commercial property is submetered and all utility charges are passed on to the tenants, it is very important to divide the fixed charges fairly to maintain tenant satisfaction and retention.
For example, I have seen instances where a small jewelry store was paying the same flat charges as the restaurant next door, which used 10 to 20 times more water. The jeweler had to vacate the premises because of the high utility costs.
There are several methods to equitably allocate these flat charges. Each method depends on the tenant mix as well as square footage rented by each tenant. As in the example above, one method is to divide the charges equally among the tenants.
Another method divides the charges according to the percentage of square feet occupied by each tenant. A third method divides the fixed charges based on the water usage of each tenant as a percentage of all the usage on the property. If this method was used in the case of the jewelry store, the jeweler would pay a small portion of the fixed charges compared with the restaurant.
To equitably allocate the fixed water and wastewater municipal charges to you commercial tenants, contact WaterWatch Corporation. WaterWatch will determine which method is the right fit for your property!
John Paul is Vice President of Operations for WaterWatch Corporations and has over 10 years of experience in the utility submetering industry. He previously spent 30 years with IBM developing and implementing customer service applications.