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Oct

20

2021

From The Blog

Learn How KICA’s Budget Works

KICA’s 2022 budget is in its final stages before it goes to the board in November. Members are invited to join any or all of three upcoming budget meetings. To make these sessions a little more clear, here’s a quick refresher on how KICA budgets each year.

KICA operates with two separate budgets, the operating budget and the reserve budget. The operating budget covers the costs of administration, security and livability, land and lakes maintenance, recreation and amenity operations, and general maintenance. This budget is funded primarily by: the annual assessment paid for by all property owners (more than 80% of funds), commercial access fees (about 10% of funds), investment income, the amenity assessment and user fees and other miscellaneous income. Principally, the operating budget covers expenditures that are routine and predictable.

The reserve budget covers the cost of major repair to or replacement of existing island infrastructure. The reserve budget takes into account Reserve Study projections, which forecast the lifespan of and maintenance costs for all infrastructure in the next 30 years. It also considers predicted revenues. The reserve budget is funded by five sources: a transfer fee on all real estate transactions (about 40-45% of funds), the annual supplemental reserve assessment (about 40% of funds) paid for by all property owners, commercial access fees (about 15% of funds), investment income and if needed, a transfer from operations income. Each year, reserve budget costs vary due to the planned repair and replacement schedule for all assets, so this budget is designed to fluctuate between deficit and surplus.

Next Steps for the 2022 Budget Draft

  • The Finance Committee will review the second draft of KICA’s budget and make a recommendation to the board of directors on Tuesday, Oct. 26.
  • The budget will be presented to the community at a virtual meeting on Monday, Nov. 1.
  • The final budget will go to the board for approval on Monday, Nov. 8.