Money Down The Drain
August 27, 2015
ST. PETERSBURG -- Dan Helton likes to tell a story that involves an
apartment renter who would run her shower all night long because the
sound helped her sleep. Helton says this type of behavior has helped him
build a multi-million dollar business.
Helton is the president of Southern Water Management Inc., which
utilizes sub-metering utility technology to measure the amount of water
each individual renter uses in his or her apartment. The company then
bills the residents, collects the fees, pays the apartment management
for the water usage and keeps a portion of the collections as a service
With sub-metering, a resident's utility bill is based on actual metered
consumption. It comes from a third-party service provider not the
Residents lower their bill by doing things such as taking shorter
showers and reporting leaky faucets. They feel more in control and
responsible for their own bills, Helton said.
By billing each resident for only the actual water usage, sub-metering
allows the apartments to delay or lower rent increases, promotes water
conservation, and most importantly, said Helton, saves the landlord
"We can show that on average, apartment communities use 25-percent to
30-percent less water after we install the meters," he said.
Since the water charges aren't built into the rent, residents are more
aware of usage and more quickly report leaks and other problems, Helton
Helton started his company in 1994 with a partner, Don Stevens. After
reviewing financing for two similar apartment communities, one with
sub-metering and one without, Helton noticed that the sub-metered unit
performed more profitably than the other.
From his background as a financial analyst, he developed a computer
program that customizes reports for the apartment investors and
Ten years later, the company has clients in four states and grosses more
than $1 million per year.
And as far as his local clients, they have gotten "smaller."
"Locally, the last year I have seen my biggest growth come from smaller
complex owners -- landlords who own anywhere from 50 to 100 units," said
Helton. "For these people, we have been able to save them as much as 50
percent on their monthly utility bills. In most cases, that number has
been abouts 35 (percent)."
Randy Hendricks, president of Hendricks Enterprises in South Pasadena,
owns about 600 rental units throughout the Tampa Bay area. His
properties range from, on average, 25 to 100 units per community.
Hendricks began sub-metering his properties a few years ago and plans to
convert all his properties by the end of 2005. He said he realized his
"The moment those meters were put in, the overall water bill dropped by
32 percent within the first month," said Hendricks. "As soon as you tell
the renters they're paying for it, they quit wasting it."
Hendricks said not only is the sub-metering system valuable for him as a
landlord, it's valuable to the state as a whole.
"We're now finding that people call us a lot more if there's a leaky
faucet or their toilet is running," Hendricks said. "They're conserving
whereas before, when they weren't paying for each drop, they'd be more
likely to ignore the problem."
Hendricks said he has one renter that takes "thriftiness" to a whole new
"I have one guy who takes a shower and fills a five gallon bucket to
catch the cool water while it (the shower) is warming up," Hendricks
said. "He then uses that water to flush his toilet."
According to a report by Environmental Protection Agency Administrator
Christie Whitman, a typical U.S. family of four spends around $820 every
year on water and sewer fees, plus another $230 in energy charges for
A study conducted by Industrial Economics Inc. for the National
Apartment Association and the National Multi-Housing Council showed that
only about 2 million of the country's approximately 35 million rental
households pay a separate bill for their water.
However, the study showed that apartments that did charge for water
consumption found an immediate 18- to 39-percent decrease in water
While some apartment communities try to provide the metering service
in-house, this generally doesn't work as well as using an outside
metering company, Helton said.
"The residents feel double-dipped, paying rent and then for water on top
of that," he said. "They don't resent paying us because we're not
connected with the property."
Because water is regulated based on the municipality in which it
resides, Helton must stay on top of local, state and national
regulations that pertain to each property.
"In St. Petersburg alone, we probably have 10 different rate schedules.
It really depends on how the municipalities set it up," said Helton.
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