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On December 5, 2006, the Board of Directors sent you the following message regarding the association’s operating direction. Immediately following the letter, we have presented additional information that provides support for the board’s decision.

Board of Directors Announce New Governance Approach

A Message from the KICA Board of Directors

Dear Members:

We have a very positive message for you.

From the board’s viewpoint, the future of your association is bright. Today Kiawah Island is approximately 70% developed. As the island continues to grow, the association must develop opportunities to enhance members’ quality of life, preserve and enrich the island’s habitat-centered natural environment, and provide access to stimulating recreational and cultural amenities.

Capitalizing on these opportunities will require the board’s energy and focus. We retained an organizational consultant to confirm the board’s view about focusing on long range planning. Through the consultant’s work and our deliberations, we believe the time is right to vest the staff with greater authority to operate the association, allowing more of the board’s time to plan for the island’s future.

We are pleased to announce that beginning December 4, the organization’s structure will change to facilitate the new direction. First, the current general manager, Joe Bunting, will be designated Chief Operating Officer, responsible and accountable to the board. While general association policies will continue to be established by the board, operational decisions will be made by Joe and the staff.

The current committee structure will be altered and volunteers will now advise the COO rather than the board. We believe the change will lead to committee recommendations being evaluated with increased efficiency. This should result in more members willing and able to volunteer. The present committees’ work will remain as currently defined until their charters expire at the annual meeting in March 2007.

Consistent with the above and reflecting a more strategic focus, the board will implement a new long-range planning initiative, which is a key component of the new direction. In accordance with the shift from operational to strategic, the board President will become Chairman of the Board, and the Vice President will become the Vice Chairman.

The decision to move forward with these organizational changes is made with confidence, given the experience and quality of the staff and the financial health of the association. The past two member surveys have clearly reflected the membership’s view that we have a great staff. Our financial auditor tells us we are operating with good controls and our reserves consultant states the association’s infrastructure is well funded.

We believe with these changes the board can better serve the membership by allocating ample time to focus on what matters most — extraordinary future opportunities, the association’s long-term health and complex multi-year issues such as access to adequate recreational amenities and the preservation of Kiawah’s natural beauty and wildlife habitat.

As always, thank you for your interest and support.

Sincerely,

Signature - Dick Sula, Board President

KIAWAH ISLAND COMMUNITY ASSOCATION, INC.
Richard L. Sula
President

Addendum to Board of Directors New Governance Approach Announcement

Further Facts for Your Consideration

Association Growth

As illustrated by the following comparison, KICA is a large and growing operation. Continued growth in the size and complexity of the organization makes this change critical to the board’s ability to focus at a strategic level.

  In 1996 In 2006
Residential properties 3,200 4,300
Reserve funds $1.3 M $7.4 M
Replacement cost (assets) $13 M $36 M
Staff 71 people,
6 departments
89 people,
9 departments
Member volunteers 2 member directors 6 member directors
40 members 93 members
5 committees 9 committees

Conditions Supporting the Timing of the Change in Governance

The change is supported by important facts in three key areas: quality and experience of the KICA staff, the strong financial position of the association, and an exceptional volunteer base:

  • A credentialed staff
    • The community association management includes four staff members credentialed through the Community Associations Institute. One is serving on the National Board for Community Association Managers, and one on the Community Association Management Institute advisory board.
    • The association’s controller is a certified public accountant.
    • The human resources director is credentialed through the Society for Human Resource Management.
    • Two advance degree biologists are on staff as part of the lakes management department.
    • The director of security is a former police chief and is certified in Homeland Security.
    • The staff is published in community association industry publications for best practices in governance, administration, lakes management, land management, and security.
    • The staff is recognized by the membership as providing excellent service (Source: member surveys of 2004 and 2006).
  • A well funded association
    • A 2006 independent reserves study, confirmed by a financial auditor, shows appropriate levels of funding to replace infrastructure components as needed (click here to see the study).
    • The association is projected to hold approximately $7.4 million in reserves by year-end.
    • Looking toward the future, even with planned major expenditures for infrastructure replacements and expenditures for new capital projects -- like Sandcastle renovation upgrades -- the reserve balances are projected to be well above the minimum reserves thresholds established by the board (click here for a copy of the 2007 draft budget which includes the 10-year reserves forecast. The final draft of the budget was approved at the Dec. 4 board meeting and will be posted here shortly).
  • Dedicated volunteers
  • The talents of the association volunteers are enormous.
  • Volunteers include captains of industry and heads of multi- national corporations.
  • Volunteers provide excellent contributions to the committees, volunteer groups and the board.

Under the board’s new approach, what should association members expect?

  • The board firmly keeps its fiduciary role while transitioning operational responsibility and accountability to a chief operating officer (formerly the general manager).
  • The board focuses on policy and planning for the future.
  • The board lays out a new long range planning process in 2007, providing many opportunities for member input.
  • The board is positioned to meet long-term member needs, of which maintaining and raising the quality of life, the environment and property values, are key.
  • The board provides greater leadership among the island entities to further common interests.
  • The board focuses on opportunities to enhance members’ quality of life, enrich the island’s habitat-centered natural environment, and provide access to stimulating recreational and cultural amenities.
  • Volunteers continue to provide expertise to the association and the COO. The volunteer experience is enriched by more effective task completion.

Timing

  • December 4, 2006 marked the beginning of operational transition to the COO.
  • Board voted changes to the bylaws and board resolutions to provide for such a change.
  • Committees keep their current charters and memberships, now advising the COO, rather than the board.
  • Existing committee charters and memberships expire in March following the board member election at the annual meeting. At that time, most of the current committees will transition to volunteer groups advising the staff (click here to see organizational chart).
  • Three committees will be re-chartered as standing advisory committees to the COO. These are finance, human resources, and major repairs and replacements.

Whom may I contact if I have questions about these changes?

Members are encouraged to contact COO Joe Bunting at 768-9194 ext 206, toll free at (866) 226-1770 ext 206, or via e-mail at Joe.Bunting@Kiawah-Owners.org.


KICA Administration, 23 Beachwalker Drive Kiawah Island, South Carolina 29455
Toll-free: 866.226.1770 Phone: 843.768.9194 Fax: 843.768.4019
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