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  March 1, 2017
PERIMETER FENCE FAQ continued

WHY NOT SIMPLY FIX AND MAINTAIN THE EXISTING FENCE?   There is not a “do nothing” alternative.  Fence and asset experts advised the committee that, for cost efficiency, cedar fences should be replaced after 20 to 25 years.  The reserve report projected that the existing cedar fence should be replaced in 2017 and forecasted funds needed based on $35 per linear foot.  Contractors today tell us cedar prices have soared and to expect to pay $50 or more. 

 

We could re-stain, and patch, repair and replace the fence in pieces over time, until the entire fence is eventually replaced, and then repeat as necessary.  However, the committee believes that over 50 years, the cost of maintaining and replacing a cedar fence might approach the cost of building a masonry/brick fence now.  Over 75 years, cedar could cost more than masonry.  And during that time period we would not have the aesthetic, safety and noise benefits that a masonry/brick fence should offer our community.

WHAT IS A GID?  A GID is an independent governmental entity formed to build public improvements.  In our case, the area covered by the District would be WC 1 and 2.  To form a GID, a majority of those voting in an election within the proposed District must approve.  If formed, the GID would design, construct and maintain a replacement perimeter masonry/brick wall with funds obtained from selling tax-advantaged municipal bonds.  Interest, principal and maintenance costs would be funded from a property tax authorized in the same election.  The first step in the creation of the GID would be to petition the city to allow a vote for its creation.  The GID’s Board of Directors would be the City Council aided by an advisory committee of District residents (fence committee). Each year, the GID Board would determine the amount of taxes, within the maximum authorized by the election.  It could not collect more than what is actually needed.  The duration of the bonds and tax is estimated at 30 years.

 

HOW WOULD UP-FRONT COSTS FOR THE ELECTION BE FUNDED?  There are two ways to approach this issue.  (1) Ideally, we would do the property right acquisition, legal, design, engineering and bidding before the election, so we could present the voters with a fully developed plan and know the exact cost.  However, this process would likely cost the two HOAs as much as $120,000 – with no guarantee the election would be successful and the costs would be reimbursed. (2)  To avoid those high initial costs, the committee recommends the election be held using estimated not-to-exceed construction costs.  In this way, up-front and at risk costs are reduced to about $29,000, mostly for the election itself. 

 

WHAT IS INCLUDED IN THE SCOPE OF THE PROJECT?  First of all, even though we are referring to a “masonry” fence throughout our communications, the committee will still consider building a pre-cast concrete fence with brick siding when we are making final determinations.  A pre-cast fence would have many of the attributes of a masonry fence, but our initial quotes showed no significant cost savings over masonry.  Though that could change when we finalize our negotiations with multiple contractors after the election.  The project proposes replacement of all the perimeter fencing with masonry/pre-cast, all existing columns, the monuments at the corners and entrances with a more modern look, and creating a concrete bumper at the bottom of the fence.

 

IF A GID WERE FORMED, HOW MUCH WOULD IT COST ME?  As part of the upfront costs, the committee proposes to retain a professional municipal financial advisor at a cost to WC 2 of less than $3,000.  Based on an estimated not to exceed project cost of $3.5 M, the financial advisor will develop an analysis of project details including the homeowner property tax.  This would be published prior to the election so everyone can make an informed decision.  The best estimate of the Committee is that the average home would have a property tax equivalent of $20 to $25 per month, depending on individual property and income tax situations.  Unlike a dues increase or special assessment where each home is charged the same amount each month, property taxes are based on the assessed value of each home.  

 

WHY IS WC 3 NOT PARTICIPATING & SHOULD WE CONTINUE WITHOUT THEM?   In January, WC 3 decided not to participate because of a cost benefit analysis of their 1,400 linear feet of non-County Line Road fence versus the 14,000 feet for WC 1 and 2.  They also considered the possibility that the next County Line Road widening project between University and Broadway would retroactively include a wall for Willow Creek similar to the others along County Line built after the WC 2 section was widened.  Though it would be nice to have a uniform fence around all of Willow Creek, our current fence is uniform only around WC1 and WC2, because WC3 chose not to participate back in 1989-1991, when we replaced our perimeter fences.  The South Suburban property adjacent to the main channel of Willow Creek provides a natural break between WC 2 on the east and WC3 on the west.  

                                                                                                    

WHAT HAPPENS WITHOUT A GID?   If the GID is not formed and if the fence is maintained/replaced with cedar, the HOA will need to use reserve funds for that fence.  When dues were increased in 2015, they were not raised as high as the Reserve Report and several Board members thought were necessary to fully fund the reserves.  Everyone was warned that because we were so far in the hole on reserves, a $20 increase may not be enough to fully fund all necessary items.  While the dues increase is now providing funding to catch up with capital project needs, reserve funds are not adequate to build a replacement cedar fence. 

 

WHAT ARE THE NEXT STEPS?    The WC 2 HOA Board of Directors has unanimously approved two resolutions (conditioned on the legal review of two technical issues) that allows the fence committee to continue pursuing the GID election process.

 

Hopefully, this information is beneficial and helps answer some of your questions.

 
     
  January 30, 2017
PERIMETER FENCE UPDATE continued

The WC1&2 HOAs would find it extremely difficult to fund their share of fence replacement with cedar or Trex.  This cost would be about $441,000 for WC1 and $609,000 for WC2, which works out to about $983 for each dues-paying home.  Absent a special assessment, each HOA would be required to defer all other needed HOA capital expenses for at least four years, or raise assessments by $20-$25 per month.  Replacement of the fence with a masonry wall incorporating brick (approximately $3,936 per dues-paying home) is simply beyond the financial ability of the either HOA to undertake absent a special assessment.

For those reasons, the Committee recommends that a replacement masonry/brick wall be financed by creating a General Improvement District (GID).  Such a GID could impose a property tax of between $20 and $25 per month on all homes in WC1&2.  With this tax base, the GID could then borrow (bond) the cost of masonry/brick and thereby construct the wall all at once and in the near future.  The Committee believes there are at least four advantages to this form of financing: (a) unlike HOA assessments, this property tax could be a deduction from income tax for those who itemize;  (b) though the cost of the masonry/brick wall is higher than cedar or Trex, because the bond repayment (and thus the property tax) would be payable over 20-30 years, the cost of the wall would not be born entirely by current residents, but would be spread between both current and future residents; (c) avoids the need to use non-tax advantaged monthly assessments equal to $20-$25 per month to pay for a cedar fence replacement in four to five years, and (d) current interest rates are still very low which favors construction of a masonry/brick fence in the near future. 

To establish the GID an application would need to be filed with the City of Centennial by May 1, 2017, and a majority of voters within the proposed GID (WC1&2) would need to approve both its formation and the Mill Levy (property tax) at the general election in November 2017. If we miss this timing, the next election will not be until November 2019.  There would be upfront costs required to hold the election, which are currently estimated to be not more than $29,000 for WC2. 

The WC2 Board requests homeowner input regarding this proposal.  We would appreciate your input on the following questions no later than February 20, 2016. Please use the following survey monkey URL: https://www.surveymonkey.com/r/WC2FenceSurvey.  If you wish to comment but cannot complete the survey online, please call a Board member.  The survey questions are as follows:

  1. What type of replacement would you prefer for the perimeter fence/wall: (a) Cedar, (b) Trex, (c) Masonry incorporating brick.

     

  2. Would you support the formation of a GID to construct a masonry/brick fence right away, through a tax-advantaged property tax of $20-$25 per month, payable for 20-30 years, rather than using assessment revenues?  (a) Yes, (b) No.

     

  3. If a GID is not created to construct a masonry/brick wall, would you support a special assessment (estimated to be $983 per home payable over one year) for a new Trex or cedar fence?  (a) Yes, (b) No.

     

  4. If a GID is not created, would you support a special assessment (estimated to be $3,936 payable over one year) for a masonry/brick wall?  (a) Yes, (b) No.

     

  5. If a GID is not created, would you support an increase in dues of $20-$25 per month for 4 to 5 years to fund replacement of the fence with Trex or cedar at the end of that period?  (a) Yes, (b) No.

     

  6. Do you support the WC2 Board paying upfront costs (estimated not to exceed $29,000) for its share of the cost of conducting a GID election in November?  (Note: If the GID is approved by voters, these funds would be reimbursed.  If the GID is not approved, these funds would not be reimbursed.  The GID option would only be used to build masonry/brick wall.)  (a) Yes, (b) No.

 
     
  June 10, 2016
COMMITTEE TO INVESTIGATE PERIMETER FENCE OPTIONS

In identifying alternative fence materials the HOA Boards have directed the Committee to consider a number of goals.  These include fence materials which will look good and be distinctive over time, reduce the cost of periodic maintenance, provide increased safety from vehicle intrusions, provide better mitigation of traffic noise, and serve to aesthetically unify the entire Willow Creek neighborhood.

 

When alternative fence materials are identified and ranked in relation to meeting the goals, the Committee will look at alternatives for funding fence replacement which are fair to both homeowners and the involved HOAs.  One alternative the Committee will examine is creation of a General Improvement District to build and maintain the fence utilizing a mill levy to be collected as part of property taxes, rather than through HOA dues.  This would provide a tax benefit to most homeowners, avoid assessing for a large up-front cost, spread a relatively low payment over time recognizing homeownership changes, and allow fence replacement costs to be bonded at lower rates.  The Committee will also explore contributions from involved governmental entities.

 

Homeowner input will be sought at several stages in this process.  At this stage, input is sought on (1) the goals to be addressed by fence replacement, and (2) in light of those goals, what type of fence or wall around Willow Creek is desired by homeowners.  For instance, if our goals include safety and noise mitigation, should simple replacement of our old cedar fence with a new cedar fence stay in the mix?  Or should we consider only improvements such as Trex-like and Poly materials, or some more costly types such as precast reinforced concrete, masonry or a combination of materials?  If you have questions or suggestions on goals and/or fence materials, please direct them to the Joint Fence Committee, at mmorgan@LSJPC.com.