FINANCES
2020 Budget Meets Future Challenges
The process of stewarding millions of dollars annually
to maintain Kiawah Island is lengthy and thoughtful.
Although it’s an ongoing process, budget season
officially launches with the creation of the first draft
in early September and culminates with final approval
by the board in early November. The 2020 budget was
finalized at the Nov. 4 board meeting. (Note: amounts
have been rounded. See the approved 2020 Budget at
kica.us/finances for exact dollar amounts.) project when it’s beneficial. This allows more timely
repair of systems and savings on mobilization costs.
One specific project planned for 2020 is the dredging
of a tidal channel that empty into the river to optimize
drainage. The area of greatest need is the Trumpet
Creeper inlet, which comes up to the roadway near the
Vanderhorst mansion. The dredging, planned for early
2020, is intended to increase water flow off the island
and should reduce flooding in that area.
KICA’s budget is two discrete budgets: the operating and
the reserve. The operating budget covers expenditures
that are routine and predictable. It is funded primarily
by the annual assessment paid for by all property owners,
commercial access fees, investment income, the amenity
assessment and user fees, and other miscellaneous
income. The association is committed to a balanced
operating budget. In 2020, both revenue and expenses
for the operating budget are just over $12.6 million. Each year, landscape capital improvement projects refresh
key areas of the island. $280,000 is budgeted for this
work in 2020. In 2019, KICA’s Lakes department began
a pond mitigation project focused increasing drainage
and pond health. After a positive response, $100,000
was set aside for mitigation work on additional ponds.
Another focus will be getting the island camera-ready
ahead of the 2021 PGA. Plantings will go in around
the island, particularly in high-traffic areas, with time to
mature before the event. “We always want the island to
look good but this is as good an opportunity as any to
showcase Kiawah’s beauty,” Jimmy remarked.
The reserve budget covers the cost of major repair to
or replacement of existing island infrastructure, based
on reserve study projections. This study forecasts the
lifespan of and maintenance costs for all infrastructure
in the next 40 years, and considers predicted revenues.
The reserve budget is primarily funded by Contributions
to Reserves (CTRs), which in 2020 are projected
at $1.3 million. The remaining amount is funded
through reserve assessments, commercial access fees
and investment income. Each year, reserve budget costs
vary due to the repair and replacement schedule for all
assets, so this budget is designed to fluctuate between
deficit and surplus. KICA’s 2020 reserve expenses are $4
million, leaving a deficit of about half a million dollars.
This is consistent with the nature of a reserve fund.
2020 Reserve Budget
One of the largest annual expenditures is the
improvement and maintenance of island drainage.
In 2020, the drainage allocation is $1.7 million. The
switch to budgeting an annual allocation rather than
budgeting for specific projects was made several years
ago; the change enables staff to modify the scope of a
2 | KIAWAH ISLAND DIGEST
Other noteworthy expenses in the reserve budget are:
• $250,000 for resurfacing, retiling and filter
replacement for the family pool at The Sandcastle.
• $308,000 to redeck and reinforce the Eagle Point 2
bridge. This will be the fourth of the seven timber
vehicular bridges to undergo this type of repair.
• $250,000 to replace the walkbridge to the Marsh
Island Tower, which has outlived its useful life.
2020 Operating Budget
The operating budget covers expenditures that are
routine and predictable. In 2020, payroll, employee
benefits and technology investments are areas of focus.
Close to 60% of KICA’s operating budget is payroll and
employee benefits, which is in line with metrics from
the Club Managers Association of America for clubs
of similar size and service level. As in previous years,
staffing has been a consistent challenge, with record low
unemployment and increasing cost of living in the area.