10
Year in Review - The Big Picture
Refined Governance Process
Obtaining Quality Board Candidates and Rethinking the Board Chair Service Term
An important achievement in 2013 was board’s vote to create a Nominating Committee to assist in the identification of potential
committee and board members. The board recognizes that our membership is comprised of some of the most skilled, educated, and
creative people in the nation. To engage this talent, a more formal process was implemented to ensure KICA obtains the highest quality
of leadership.
A second significant change, a by-law amendment, also impacts KICA’s leadership. Based on recommendations from the Governance
Committee, the length of the board chair’s term was extended from one year to two years to improve continuity for the benefit of the
community and KICA staff.
Supplemental Annual Assessment Approved
Building Reserves to Ensure a Healthy Financial Outlook
In 2013, the KICA Board of Directors approved a supplemental annual assessment (SAA) as a result of a thorough evaluation of KICA’s
future revenue needs and a consideration of alternative approaches to keep the association on a stable financial path. This action stems
from trends affecting both expenses and projected revenues.
Expenses: As Kiawah ages, the cost of maintaining our infrastructure continues to rise. In five of the last seven years, these costs have
exceeded available revenue, requiring KICA to fund them from, and thereby reduce, cash reserves. Despite continued efforts to extend
the life of existing assets and reduce costs, KICA projected that without additional revenue, required capital expenditures would exceed
projected revenue in each of the next 10 years.
Revenues: KICA’s primary revenue stream, a Contribution to Reserves (CTRs) fee (0.5% fee on real estate sales), has seen a significant
decline from nearly $3 million in 2005 to less than $883,000 in 2009 and most recently $1.5 million in 2013. CTRs have been the
predominant source of funding for infrastructure maintenance, repairs and additions, and while KICA anticipates real estate sales to
continue to improve, it is not foreseen that the income from CTRs will be returning to the peak level in 2005.
The strategy of building reserves over several years through smaller, ongoing supplemental assessments was chosen as the most manageable
option for property owners and more equitable between current and future property owners. This additional revenue will be directed
toward the ongoing maintenance, repair and replacement of our community’s infrastructure over the next seven to 10 years, and will not
be used for daily KICA operations. With income from the SAA, KICA can now proactively plan for our major repair and replacement
schedule over a three-year horizon, as opposed to reacting when the ɔ