Announcements and 2023 Budget

A couple of announcements from the CCHOA as we head into the 4th quarter of the year:

If you missed bulk-item pickup earlier this month or are still hanging on to stuff you’d rather part with, hang on to it just a little longer for the neighborhood garage sale that will be held the weekend of Oct. 22. As usual, we have signs at the entrances to the neighborhood and will publicize the event through our normal channels. We do these twice a year and there is usually good traffic through the neighborhood by bargain hunters so if you plan to participate, you have a good chance of selling a fair bit of your unwanted stuff. You may feel free to put signs out directing visitors to your sale but you must collect them afterwards.

The pool will close for the season on October 31 and will reopen in generally in April of next year. Our master of amenities, Dave Marshall, has expressed a desire to make the pool patio/breezeway available for private reservation during the off season so this is something we would like to try. While we don’t have a firm operating plan to support this desire, we would like to work with Members interested in using this facility for private events during the off-season to help us define a sensible and workable set of processes and policies. Please do reach out if you have an event coming up and are interested in booking this facility.

The Board met on Monday, the 19th of September to approve the budget and set the regular assessment rate for 2023. The Board unanimously approved an increase of $52 to the annual assessment, going from $526 the prior two years to $578 for 2023. In addition to our normal 3-5% increases to our landscaping, management and a handful of other contracts, there were significant increases to a several other operating line items.

We saw substantial increases to our property & casualty and liability insurance rates. We had been expecting an increase in property damage insurance last year due to underwriters attempting to recover higher costs associated with winter storm damage but there were increases across the board for all types of insurance we carry. We use an insurance broker who shops multiple underwriters in order to build a complete package of the best bids for each type of coverage we carry. Given there are only a handful of A-rated underwriters who cover HOAs, it is very unlikely that we can lower this expense by bidding with another broker. We have tried this approach in years prior with little success and have no reason to believe things have changed since then.

After almost five years without an increase, our lifeguard contract will increase by over $13,000 annually due to higher expected wage costs. Since we have been with this vendor for several years, we are due to shop this business with other vendors to make sure this is inline with how the overall market is trending. Additionally, our pool chemical costs have increased substantially. The supply of chlorine for pool sanitization was constrained last year by a fire in a major manufacturing facility. This resulted in significantly higher costs for chlorine sanitizer. Even though chlorine sanitizer is once again readily available, it appears that these price increases are going to be the new normal so we have adjusted the budget to reflect the increase.

We have continued to chase down leaks and make repairs to our irrigation system in order to control our water expense. Aggressive management on this front has put us in a position to lower our water budget by around $18,000. For 2023, we have reduced the water budget from just over $90,000 to $72,000.

After accounting for higher operating and maintenance expenses and somewhat offset by a lower water budget, the Association’s budgeted operating margin for 2023 will drop to just over 21%. The board’s target operating margin is 20% or higher. What this means is that in order to stay above the 20% target operating margin, another increase will be likely in 2024 due to normal year-over-year cost increases .

The Association budget process begins in mid-summer with approval typically occurring in September or October. In prior years, the board often sought cost estimates on capital and large discretionary projects targeted for the coming year to assist with budgeting and planning. This often meant that it could be up to 15 or 16 months before a project got underway. For 2022, we had a long list of landscape refresh and renovation that we had to scale back or defer since by the time we were ready to get started, the executable bids bore little relation to the original, cost estimates provided. For 2023, we are altering our approach in that rather than identifying every project with a dollar amount for next year, we are allocating a pool of funds (with a contingency hold back) toward a list of projects that we’d like to address. A handful of these projects are high-priority “must do” based on our reserve study’s recommendations and include replacement of the shade canopy structures at the pool. The remainder are either high-priority maintenance, repairs and upgrades, or fall into the discretionary category of ongoing landscape refresh and renovation. Each board meeting from now through next year we’ll look at where we are, assess any new needs, discuss prioritization, and review bids. Presently, the major projects we’re looking at include:

• Pool canopy structures - total replacement;

• Addition of shading canopy at baby pool;

• Landscaping and solar lighting at the south entrance median;

• Repairs to south entrance median tree well stonework;

• Side-street median bed refresh throughout neighborhood;

• Pool area - drainage improvements, tree replacements and bed refresh;

• Pool / pool house - repairs to swim lane hooks, rust treatment, paint work;

• Courts area - Landscaping, walk path, and drainage improvements;

• Completion of Boulder Lane center island bed renovations;

• Completion of upper tennis court conversion to LED lighting;

We think this approach offers a little more flexibility to select projects based on evolving priorities given the current environment of unpredictable, escalating costs that make it difficult to plan and estimate.

Finally, our 2021 audit is completed but I need to make a correction to my last update when I stated that the steps we took earlier this year to clean up the books related to amenity key card deposits for “this year’s audit” would clear up the “qualified opinion.” It turns out that my timing is incorrect. The audit that was just completed this month is for fiscal year 2021. The board did not take steps to resolve the “qualified opinion” until earlier this year, 2022. Therefore, the 2021 audit has still resulted in a qualified opinion. The audit that will be done next calendar year, for fiscal year 2022 will have the adjustments necessary to resolve the qualified opinion. Aside from this minor issue resulting in the “qualified opinion” the audit uncovered no problems with the HOA finances.

As always, you can reach the full HOA board at board@canyoncreek.net with questions or concerns. Thanks again for the trust you have placed in us. On behalf of the board,

Brett Funderburg
President, CCHOA

Q3 2022 Update / Reserve Study

Just a quick update on a couple of things of interest to Members. The HOA board meeting scheduled for this Monday, September 19 at 6:30 will be to approve the 2023 budget and set the assessment amount for the year. All are welcome to join us online where we will go through the budget line by line. For 2023, we have finally seen the large increase in our insurance rates that I was expecting last year as insurers look to recover the huge costs associated with the winter storms from recent years. Overall, our renewal is coming in at approximately 50% higher. In addition, as identified in our recent reserve study, we are expecting a doubling of our spending on concrete fence maintenance to approximately $70,000 annually. If you care to review the reserve study report, it is available here.

We have also seen higher maintenance spending on our irrigation system this year. One bright spot is that with the City of Austin’s conversion of our legacy water meters, we have been able to identify a series of leaks in the irrigation system accounting for roughly $10,000 in annual water loss this year. As we have no clean baseline to work from, it is unknown for how long this has been going on or what the cost has been. Repairs to these leaks are ongoing but we expect less than a 2 year return on investment in the cost of leak location and repair.. Once these are fixed, we’ll be able to establish a good baseline and be able to identify the presence of new leaks almost immediately going forward. For a couple of years now, the board had been investigating various resource monitoring solutions for this purpose so it has been advantageous that with Austin Water’s conversion to this new technology, we now get this capability at no cost.

As I signaled in the Q2 update, with the higher costs we are experiencing, I expect to propose the full board approve an annual assessment increase of just under a 10% in order to maintain our target operating expense ratio and to fund necessary capital maintenance and improvement projects.

The annual audit for 2021 is underway. With the solution to the handling of amenity key card deposits in effect, I expect no issues and a clean bill of health. This should wrap up before the end of the year.

Finally, our neighborhood scouts have started their annual popcorn sales fundraiser. For a number of years now, the scouts have supported the Canyon Creek HOA through various volunteer service projects. We like working with these young, future leaders of our communities and try to support them in return when we can. Please consider supporting our neighborhood scouts with a popcorn purchase if you can.

As always, you can reach the full board with questions or comments at board@canyoncreek.net

Best,

Brett Funderburg
President, CCHOA

Compliance Relief During Current Drought Conditions

The Canyon Creek deed restrictions along with guidelines published by the Board and ARC require that Members maintain landscape irrigation systems in good working order and apply sufficient water, in compliance with any mandatory water restrictions, to maintain the lawns, plantings and other vegetation. That said, due to the exceptional heat and drought conditions this summer, the Board recognizes the difficulty of keeping lawns and landscaping maintained at the typical community standards. Indeed, the Association has experienced difficulty maintaining its own landscaping in various areas throughout the Common Property. For this reason, the Board has instructed the management company to be lenient in the issuance of compliance violations related to lawns obviously affected by the drought and heat. Although it would be irrational or impractical to require Members to water dead grass or install new sod at this time, this is not an invitation to stop watering or suspend caring for lawns and landscaping that is merely stressed. To avoid potential compliance issues, please continue to maintain your landscaping on a reasonable, “best effort” basis. Failure to maintain landscaping now could result in substantial costs later if you must reinstall sod or other plantings in order to come into compliance when normal maintenance standards resume.

The Board will continue to monitor drought conditions and expects that our normal care and maintenance standards will resume in the Spring. Similar to the flexibility that was afforded to Members after the winter storm of 2021, we anticipate that an appropriate recovery time for homeowners to address landscaping issues will be provided before we reauthorize the management company to issue notices and/or violations for landscaping that is not in compliance with published guidelines.  The Board will communicate this date and/or any related updates to homeowners well in advance to provide sufficient time for all homeowners to address any landscaping needs on their property.

2022 Annual Meeting of Members

The presentation slides with notes from the 2022 Annual Meeting of Members can be found here (4.8MB PDF).

Q4 2021 / Year End Update

As we close out 2021 and enter 2022, I want to share updates on a few things of interest to Members.

As a reminder, Association dues for the first half of 2022 were due on Jan. 1. The amount is unchanged from last year at $263. Late fees and interest will begin to accrue if not received by the end of the month and continue for each month thereafter until the balance is paid in full. Payment plans are available for Members having financial trouble due to job loss, health issues, etc. Getting on a payment plan will stop fees related to collection attempts so please do communicate with us early if you are having difficulty keeping current on assessments.

The first board meeting of 2022 is Monday, January 17 at 6:30pm. Notices will be going out via e-mail so keep an eye out for the details if you wish to join. For convenience, the Board has decided to continue virtual Board meetings via Zoom for the foreseeable future. There is an open forum for Members to address the Board publicly at the start of each meeting. Of course, we are also available by e-mail at board@canyoncreek.net if you prefer a less formal method for communicating with us.

The Annual Meeting of Members is tentatively planned as an in-person meeting and will be held at 6:30PM on March 7, 2022 at Peace Lutheran Church just north of Boulder Lane on 620. The venue may require attendees to mask up depending on the Austin-Travis County Public Health’s Covid-19 Risk Based Guidance at the time of the meeting. This information will be communicated to all Members prior to the meeting.

The annual audit of the Association’s books and records for 2020 was completed in Q4 under the direction of a new accounting firm and has resulted in a “Qualified Opinion” related to cash and liabilities associated with amenity key card deposits collected under the prior management company. Prior to Spectrum Management, amenity key cards were issued to Members on a cash deposit basis. Key cards could be turned in and the deposit reclaimed, usually upon sale of a home, but often cards were simply left behind for the new owner. Occasionally, key cards would be lost, rendering the deposit unrecoverable. Properly accounting for these events requires detailed recordkeeping. Unfortunately, the records that transitioned to Spectrum from prior management are incomplete so we are unable to accurately tie the amenity key card cash deposit balance to an accurate list of redeemable amenity key cards. To clear this up and move forward with an “Unqualified Opinion” in the future, the Board has decided that any Member in possession of a working amenity key card that was NOT issued by Spectrum Management may turn in their card prior to April 15, 2022 and reclaim their $20 deposit. After this date, any outstanding key card deposits will become the property of the Association, legacy key cards will be ineligible for return and become the property of the holder in accordance with the current amenity key card request policy. If a legacy key card is redeemed and a new card is subsequently requested, Members will need to follow the then current procedures for purchasing a new amenity key card. If you are already in possession of a working key card and wish to keep it, then no action is required on your part. Your card will be reclassified as a “sale” to you and become your property in accordance with the current keycard request process. If you wish to redeem an eligible key card and reclaim your deposit, e-mail Spectrum Management at contact@spectrumam.com with your request and address and our community manager will be in contact.

At the November meeting of the Board, we decided to make the covered patio available for reservation by Members during the winter off-season when the pool is otherwise closed for swimming. Use of this space is offered strictly on an “At Your Own Risk” basis so we are not requiring the presence of a pool monitor or lifeguard. Some operational details will need to be worked out as we gain experience over time with the types of events that Members are interested in holding. For example, a large party gathering may require posting a modest cleanup deposit that is fully or partially refundable depending on the condition the space is left in. Other types of events such as a small book club gathering may require no deposit at all. We’ll be working these types of details out in real time and they may be adjusted as needed so we do ask for patience and cooperation.

In December of last year, the Board made a change to our landscaping contractor for performance reasons. Our new contractor is Urban Dirt, a locally owned firm, with a number of very large contracts including Steiner Ranch, going back many years. With the completion of the pool renovation and repairs this past summer, we’ve now wrapped up the last of the major outstanding capital maintenance items from the last several years which frees up cash for some long planned investments in our landscaping. We have plans to refresh major portions of our landscaping with a more modern look and feel that incorporates clump grasses and other native and drought tolerant plants and annual and perennial color where appropriate while better managing our water usage. We have been working with this vendor for several months on preliminary design plans for this project and are looking forward to getting started in the coming weeks. This is a large effort that will take several years to fully realize.

In regards to landscaping compliance with your own home, the Board is aware that some Members feel they are being held to a higher standard than the Association is holding itself with respect to its Common Area landscaping and, in some respects, that is true. However, the Association is fiscally constrained in its ability to fund upwards of five linear miles of improvements along both sides of Boulder Lane and within the Amenity Areas. For this reason, it is all the more important that Members put in a little extra effort to help us keep the neighborhood as a whole looking its best as we get our Common Areas back to looking their best. To get Members excited and incentivized about landscaping compliance, we are launching this year a “Yard of the Month” competition. Each month in 2022, we’ll choose one property in Canyon Creek that represents the highest standards of landscape care and keeping as determined by a majority of the Board. That homeowner will be awarded a $50 gift card to Lowe’s for their efforts (and may not repeat within a 12 month period). Since we are looking to these homes as models for the rest of us, we ask that winners agree to let us share your address and a few photos with the rest of the Members.

With the Marshall fire in Colorado in the news recently, the subject of wildfire risk is on the minds of the Board and many residents. This fast moving, wind-driven fire in the Denver area consumed 6,000 acres and destroyed aver 1,000 homes in just a few hours. We often encounter similar conditions here in our area so our risk is high for this type of event occurring. The HOA has previously organized greenbelt cleanup and wildfire fuel reduction efforts in focused areas behind homes bordering the canyonlands but was forced to take a break due to COVID safety protocols. We would like to resume these efforts if possible this year but it is clear that we need much greater volunteer organization and participation going forward if this effort is to have a meaningful impact. If we have any residents in the community that feel called to service and are willing to help organize and lead a more structured effort to reduce wildfire risk in the community, the members of the Board would like to talk with you. This role will work closely with the Board, county and city officials and groups of residents to organize resources and coordinate risk mitigation efforts. If this opportunity to make a direct impact on your community sounds interesting, do reach out to us.

Finally, on the subject of community service, it’s time for Girl Scout cookies and we have multiple Scout troops in Canyon Creek who are ready to supply your cookie needs. If one of these adorable Scouts happens to pay you a visit, please do consider a cookie purchase to support her mission of leadership through kindness, service to her community, and development of lasting friendships. Canyon Creek HOA is a volunteer led organization and these are important values to cultivate in this next generation of leaders and community servants.

In closing, have a happy new year; let’s hope 2022 is better than 2021 and thanks for the trust you put in us. On behalf of the Board,

Brett Funderburg
President, CCHOA

Q3 2021 Update

As we close the 3rd quarter of 2021, I want to share status updates on a few things the board is working on. Many of you have no doubt noticed along Boulder Lane that we have begun the process of pruning and removing trees affected by the severe winter storms. The board has been working with an independent arborist in recent months to observe how trees in the common areas were recovering and to make recommendations to us on how to proceed with those that were distressed. It is upsetting that so many of our trees were affected especially since they are a key feature of our neighborhood that is not easily replaced. There were a few instances where trees were on the borderline between leave in and prune or take out. In deciding how to proceed with these, the board considered the overall aesthetics of each area giving consideration to spacing, future landscaping plans for the area and how the aesthetics would progress over the near and long term. In the coming days and weeks as this work is proceeding, you’ll start to see stumps being ground and this part of the recovery finishing up and then we’ll slowly begin the process of restoration.

At this time, we’re asking residents who have not already done so to begin clean up or removal of trees on their own property that have suffered weather damage. Our community inspector is now including tree inspections as part of his regular inspections and notices are being sent out. To help Members make informed decisions about how to proceed with trees on their own property, I’m including a link to information we’ve previously shared here, as well as including the arborist report for the trees in the common area. Most folks should find the arborist report very helpful in assessing their own trees since it includes many photographs and descriptions of common area trees with the recommended course of action. It is likely that you will find similarities to your own trees and can use this information to help guide you in your decision making and to understand the expectations in case you receive a notice from our community inspector.

The board meeting to approve the annual budget took place on Sep 22 at 6:30pm. The 2022 approved budget can be viewed here. The regular annual assessment will remain at $526 for 2022, payable in two installments due Jan 1 and July 1. In the operating budget, we allocated increases for regular concrete fence maintenance and tree trimming in the 5 year outlook. In general though, aside from normal increases in contract renewals, etc. the operating budget tends not to vary much from year to year. Major capital expenses, timings and target reserve balances are primarily driven by the triennial reserve study which is refreshed every 3 years with another due in 2022. With the major renovations and repairs to the pool bathhouse and pool now complete, we are turning our attention to the common area landscaping and expect to make a number of small to mid-sized investments in the capital expense budget to refresh and restore landscaping up and down Boulder Lane next year. In addition, we have a nice upgrade to the landscaping at the south entrance median happening next year as well with regular maintenance planned going forward. If all of our numbers and projections are correct, we should end 2022 with about $50,000 in excess of our most recent reserve study’s target reserve balance. This will put us on a nice footing heading into 2023 where we can begin to consider possibilities for new capital improvements as opposed to catching up on maintenance and repairs that were neglected in years prior.

As always, send questions or concerns to board@canyoncreek.net.

Best,

Brett Funderburg
President, CCHOA