What is CSA?
Continuous Service Agreements (CSA’s) are contracts between property owners and utility companies to ensure uninterrupted utility service in rental units when they become vacant.

While CSAs have advantages for multifamily owners, they also make it easy for residents to commit utility theft. When a new resident fails to apply for utility service under his name, the property receives—and is responsible for—the utility bills for the occupied unit. Likewise, at move-out, if a resident closes his account too early, the property becomes responsible for the utility bills under a CSA. This is referred to as a CSA violation since the resident is in violation of the lease by not taking responsibility for his energy costs. When a resident responsible for enrolling with an electricity provider “forgets” to do it, you will bear the cost.

What is the actual cost of CSA theft?
Do you know the true cost of CSA violation per community per year?
$5000?
$10,000?
$20,000? Or more?

Your answer depends on the size of the community, its location and utility rates, among other factors. However, our research based on studying CSA data for 99 communities over a 12-month period showed that a typical 300-unit community can reduce annual operating expenses by an average of  $19,985 (if no VCR process is in place) or $6,900 with a VCR process implemented.

What is the impact on NOI?
CSA Violations Impact NOI and Community Valuation Much More Than You Think

If you are in charge of energy management, ancillary services, asset management or site operations in the multifamily industry, you are probably concerned about energy expenses and their impact on NOI.

In the past 10 years, many multifamily owners have implemented energy-efficiency programs ranging from water conservation to lighting retrofit aimed at lowering energy consumption and, ultimately, utility costs. 

In addition, many have adopted other ancillary programs such as water bill back (RUBs or a submetering system) and Vacant Cost Recovery (VCR) programs to reduce utility operating costs. These energy-efficiency practices certainly have positive impact on NOI.

But have you reached their true potential? How do you measure the effectiveness of your current energy programs?

One of the key elements of any energy-efficiency program is benchmarking—defined as the process of identifying, sharing, and using knowledge and best practices. It focuses on how to improve any given business process by exploiting topnotch approaches rather than merely measuring the best performance.

• Do you have a Vacant Cost benchmark?
• Do you have a Continuous Service Agreement (CSA) benchmark?
  
• Have you implemented a Vacant Cost Recovery (VCR)? If so, how do you measure its effectiveness?
  
• When the VCR process falls short, how are you notified? 

How does CSASecure® compare to other recovery programs?
CSASecure®: the Next Generation CSA Solution.

The patented CSASecure® process compares utility meter transactions with resident data nightly and reports violations within 24 hours versus 45 to 60 days later with a VCR program. This permits timely notice to CSA violators within few days of move-in. The CSASecure® program automatically alerts you—within 24 hours of violation occurrence—of those residents who have switched the responsibility of electricity service back to you during the lease term. 

CSASecure® is a proactive approach that facilitates 100% identification and collection of charges at move-in, during the lease term and prior to move-out. No other system can make this claim.

We offer a 30-day free “proof of concept” to determine your benchmarks. We work side-by-side with your other business partners—including your utility and VCR providers—to identify, eliminate and recover CSA theft within 24 hours of its occurrence.

Why other Recovery programs are not 100% effective?
Although we invented the VCR process in 1999, we believe you should not depend on it alone to identify and collect 100% of all opportunities. Here’s why:

• A VCR program based on utility bills cannot identify move-out violations and misprocessed utility bills, which together are estimated at 35% of total available CSA violation dollars.
• If you just recover vacant cost through VCR and don’t eliminate the CSA violation after the first month, you will continue to pay for additional utility bills every month.
• Pay first and recover later is not a good cash flow policy.
• You lose the “marketing” incentive for CSA violators.
• You have more negative interactions with residents. It’s harder to collect for several months of violation than for a few days of misuse.
• You cannot identify skips with a VCR program.

How do other Recovery programs work?
With a Vacant Recovery program, aging utility bills are matched with current resident data to identify violators. A VCR bill is sent to violators for their portion of utility consumption since move-in.
 
But, a VCR program cannot capture move-out violations. When a resident moves out with outstanding violation days, the owner ends up paying for as much as two months of the resident’s electricity bill. That’s because the utility bill will not arrive until after the resident has moved out.

How do you handle move-out CSA violations?
Move-out violations under a CSA Secure program are identified and a final bill is generated BEFORE the resident moves out. CSA Secure can identify any move-out violation within 24 hours, allowing the site manager to take action immediately and stop the theft.