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September 2016
KICA Finances Remain Strong Halfway Through 2016
As the weather changes and we move into fall, we take a look back
at how KICA performed financially during the first half of 2016.
Financial data as of June 30 show the association with slightly
lower revenues but also lower expenses compared to budget.
Below we take a more detailed look at the numbers and what is
behind the variances.
At the end of the second quarter, KICA had a net surplus of just
over $1 million and is on pace to finish the year within its $13
million annual budget.
Revenues
“While assessments and other revenues slightly exceeded forecast,
contributions to reserves (CTRs) lagged projections at June 30 by
just over $117,000,” says Jane Ovenden, KICA director of finance.
CTRs are a 0.5% transfer fee paid by the purchaser on property
sales. These are the primary source of KICA’s reserve funds, which
are committed to major repairs and replacements of buildings, their
components, and infrastructure owned by KICA (including roads,
bridges, lakes and our 43-mile underground drainage system, leisure
trails, boardwalks and bulkheads).
During the first six months of 2015, 125 properties were transferred
at an average sales price of $1,263,188. For that same period in
2016, those numbers were 118 properties with an average sale
price of $1,170,118.
Ovenden added, “On the positive side with our revenues,
commercial access fees are running $86,000 ahead of forecast
thanks to strong construction and heavy permit renewal activity.
Also, Sandcastle operations are $47,000 ahead of budget.”
Expenses
“At mid-year, overall spending is less than expected largely due
to the timing of major projects, but we do expect to finish the
year on pace with budget,” says Ovenden.
Major repairs and replacement costs reflect a $216,000
favorable variance due to a slower than expected rollout of
street signage and timing of some street resurfacing. Landscape
capital improvements are $215,000 favorable due to planned
changes in the scheduling for cul-de-sac improvements and the
Flyway Drive and Surfsong park projects. All of these projects
are expected to finish the year on schedule.
“Operating expenses show a $371,000 favorable variance
due to savings from turnover, unpaid leave and open staff
positions, as well as lower than expected legal expenses, savings
from changes in the member voting system, and Sandcastle
improvements which have been delayed pending board
direction,” says Ovenden.
Ovenden reiterated that, as many of these variances are based
on timing, expenses will likely begin to even out as we move
towards the end of 2016.
All-in-all KICA’s finances look strong and the budget remains
balanced as we move into the second half of the year. For a
more detailed look at the association’s budget and financial
reports, visit kica.us/finances.
Article contributed by Digest Member Volunteer Deb Stewart.