Ratio Billing Water/ Sewer Charges
Why is water/ sewer ratio-billed?

What? Ratio-billing means that there is one bill for the entire building which is divided equally between all units regardless of occupancy. This means that Wiechmann Enterprises foots the bill for vacant units where water isn't even being used.
When? Municipal utility bills for water/ sewer/ etc are sent out regularly (monthly or quarterly) in arrears. As soon as we receive the bills, we post the charges to resident accounts to be paid with the upcoming month's rent. So, for example, a bill you receive in July would cover a period of March, April, & May and be due with August's rent.
Why? Ratio billing is so common a practice in property management as to be considered standard. The vast majority of buildings in this country were constructed with one water/ sewer hook-up and one meter total for the whole property. Every water/ sewer hook-up automatically incurs at least three set fees that show up on every bill: "Water Service Charge," "Sewer Treatment Service," and "Storm Water Management Charge." Depending upon which municipality issues the bills, these three set fees account for anywhere between a quarter to two thirds of the total bill.
To demonstrate, on Oct 14th, we received a bill for $677.31 which covered water/ sewer usage in a 7-unit building in Milwaukee from Jun 4th to Sept 4th. During that time, there was one vacant unit. The charges were posted to resident accounts on Oct 21st and marked as due with Nov rent.
Of the $677.31, $261.77 was for set fees. This means that nearly 40% of the total bill was not based on actual water/ sewer usage.
Over the years, residents have reached out to us expressing concern over the fairness of ratio billing. It has been argued that, for example, one unit has four residents while another has two, or that someone was on vacation for much of the billing period, or that one unit shouldn't be held responsible for another unit's wasteful habits, or even that a unit with less square footage shouldn't have the same bill as a unit with greater square footage.
To address these concerns, let's use the information from the above described bill. Every apartment was charged $96.76. Of the $96.76, $37.40 was for set fees. The remainder of the bill, $59.36, covered water/ sewer usage for 92 days. That breaks down to $00.645 per day, or $00.027 per hour. Every apartment was billed less than 65 cents per day for water/ sewer usage. Our company paid $96.76 of the total $677.31 bill ourselves because there was a vacant unit, even though no water/ sewer usage occurred there.
If every unit had its own water/ sewer hook-up and meter, those set fees totaling $261.77 on our one bill would not have been divided seven ways.
Differences in individual usage amount to very little change on the final bill.
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