Q3 Updates and 2024 Budget

As we approach the end of Q3, the board has some updates on a handful of things and a discussion of our priorities and the budget as we head into 2024.

The long, hot and dry summer has been especially hard on everyone’s landscaping including the Association. Continue to keep irrigation systems in good working order and water lawns according to the current City of Austin watering restrictions. Sod that has browned and goine dormant due to heat and drought should revive this fall if you’ve kept up with watering thoughout the summer. As a warning, if you are found in violation of current watering restrictions, the City of Austin can impose fines or even cut off your water service as many residents of Steiner Ranch have recently discovered.

Continue to care for your lawns and landscaping according to the standards published in the current Design Guidelines and other documents. Lawns are expected to be kept mowed and treated for weeds. Driveways, sidewalks and curbs are expected to be kept neatly edged and brush and limbs encroaching on the sidewalks are expected to be kept trimmed back. Dead or downed limbs and branches must be removed promptly. Bare dirt is not allowed; when cooler weather arrives, either re-sod or use mulch and other plantings to maintain a neat and tidy appearance. Nothing on your Lot should appear overgrown or unmaintained.

Right now, the board does not see the need to do a special assessment related to winter storm cleanup. We have been paying our vendors out of cash reserves as invoices come due and submitting to insurance for reimbursement. Right now, we have been reimbursed for some but not all of our expenses. It appears that we may need to get the Association attorney involved in order to ensure that our insurer pays all of the cleanup expenses it is obligated to pay under our policy. The currently outstanding amounts due for reimbursement are not significant enough to impact our operations but may cause us to temporarily delay or scale back some of the landscaping improvements we had planned for this year.

Earlier this week the board held the annual meeting to review and approve the budget and assessment amount for 2024. Most of the Association’s annual operating budget is allocated to paying our bills for services that keep the common areas mowed and irrigated, cleaning and upkeep on the pool and courts, insurance, management fees, etc. and keeping things in good working order by fixing things when they break. Our target operating metric is that the operating budget take up no more than 80% of the annual assessments with the remaining 20% allocated to our capital account to be spent on items identified in our triennial reserve study as in need of replacement or renovation or on “soft” projects such as large scale landscape refresh / renovations. Like many of you have experienced firsthand, inflationary pressures have increased our costs across the board as well. Of particular note, our property and casualty insurance costs increase by around 50%, going from around $14,000 to $21,000 in just one year. In years past, we have tried to shop around for alternative coverage but with only a small number of A rated issuers providing coverage for HOAs at the level that we require, our options here are limited. Management fees increased at the contracted 3% as did various other services.

The last two years have been especially hard on our irrigation system. The long, hot summers dry the soil which causes shifting and pressure on the irrigation water lines. This results in costly efforts to locate the source of the leaks and make repairs. In each of the last two years, we’ve spent upwards of $20,000 annually to keep the system in good working order. This amount is signifiantly higher that what was budgeted in each of those years. As a result, we’ve substantially increased the irrigation system repair budget for 2024 to be more reflective of recent historical costs.

The subject of wildfire risk is one that has been on the minds of the board for several years. With the recent fires in Maui resulting in significant loss of life and property, combined with damage from this winter’s ice storm adding to the fuel load in the greenbelt canyonlands, the board is approaching this matter with new urgency. We have recently begun working with a local firm called Environmental Survey Consulting with extensive experience in wildfire risk mitigation. This firm currently works with various departments in both the City of Austin and Travis County on land preservation and restoration projects including wildfire risk management. For 2024, the board has allocated $50,000 to develop a comprehensive, multi-year wildfire risk mitigation plan and pilot project with the goal of having a measurable impact on the community’s wildfire risk. We’ll be able to share more details on this effort as we get further into 2024 and better clarity on the elements of the plan and its approach to the problem. At a high level, we are looking to address three key elements: 1) improved canyonland access for first responders and firefighting equipment; 2) construction of fire breaks at key points; and 3) fuel reduction.

After accounting for this new effort and all of our other increased costs, at the current assessment level of $578 annually, we would be almost 9 percentage points above our target operating expense ratio of 80%. Accordingly, the board has unanimously approved an increase of $57 to $635 annually in 2024, payable in two installments, due Jan. 1 and July 1. This represents a 9.86% increase which is is just below the 10% threshold permitted by the Association’s governing documents. Even with this increase, the operating budget is still just a bit over the 80% target.

Canyon Creek Traffic and Safety Committee Newsletter – April 2023

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