Currently he is late for the last month's rent and it looks like he is thinking to use his one month's security deposit as the last month's rent.

About a month ago, the plumber said the repair would need to go through insurance.

Just over 4 months.

That was close to my annual electric bill.

I just paid off $1500 in bills, so almost a wash.  

These yields do fluctuate daily so you may also want to explore a liability-matching strategy where you buy t-bills at a specified duration (ie. 1 year) to match when your tax bill is due (ie. 1 year-ish).

I have been waiting to hear back from him now for over a month.

However the tenant was constantly late with rent, the lease was written so that the PM kept all late fees (thus incentivising late payments), and after being assured that this was a good tenant on renewal, 6 months later I was handed a $3500 repair bill for the initial tenant turn.

My suggestion would be to cap your utilities at a certain amount and have Tenants pay anything over that amount.That will help you manage your expenses, and also allow Tenants to gage their usage each month, and make adjustments if they don't want to go over the allotted amount.As far as collection, provide the bill showing any overages and just have them pay for it along with their rent. 

This consultation process often extends permit timelines to 6 months.