KICA is funded primarily through property owner and commercial entity assessments (accounting for 82% of operating revenue and 39% of the Major Repairs and Replacements (MRR) revenue), a half percent transfer fee on real estate transactions called Contributions to Reserves or CTRs (38% of MRR revenue), commercial access fees (9% of operating revenue and 13% of MRR revenue) and investment income. In 2019, the association is anticipating revenue consistent with 2018.
When allocating this revenue to pay for expenses (which is done in the latter half of the previous year – in 2018 for the 2019 budget year), funding is allocated to two discrete budgets, the operating budget and the reserve budget.
The Operating Budget funds the predictable association functions including security and livability; land, lakes and general maintenance; administration; recreation and amenity operations.
Of note for 2019, the Operating Budget reflects an 8 percent increase to personnel wages from the 2018 budget. KICA faces the staffing challenges of national low unemployment (2.7% in Charleston County), a dwindling supply of of nearby affordable housing and commuter traffic issues. In order to offer competitive wages and retain quality employees, KICA’s board voted in August 2018 to increase wages for hourly positions to a minimum of $13/hour, which alone accounts for nearly a 5% increase over the 2018 budget.
KICA is also investing in island security and gate operations. Community members would like more stringent gate access procedures, but want to maintain rapid entry for members. Security is implementing new gate access management technology and will expand its pass office later this year to more tightly manage island access for those who arrive without a property owner guest pass or a resort reservation. Stay tuned for more information on these initiatives as they roll out in future months.
The Reserve Budget funds major repairs and replacements to existing Kiawah Island infrastructure. This budget is planned with consideration to the projected life of each association asset for the next 40 years.
The largest expense in the Reserve Budget for 2019, and consistently year-to-year, is drainage. Drainage projects will account for about 43 percent of the Reserve Budget. KICA maintains 43 miles of existing pipe, connecting 119 lakes and ponds, making up 14 drainage basins. Water levels can be managed, to an extent, within the drainage basins, which is crucial to prevent or reduce flooding that can accompany significant rain events.
Other Reserve Budget expenses include the major repair to, or replacement of, 60 miles of roadway and bridges (30 percent of the Reserve Budget), 19 miles of leisure trails and 25 boardwalks (7.5 percent of the Reserve Budget), and large-scale landscape revitalization projects (8.5 percent of the Reserve Budget).