September 2006 Board Minutes

Minutes of KPHA Board Meeting Tuesday September 19, 2006 at 5:30 pm

The meeting was called to order at 5:40 pm, The following Board members were present for the Board meeting: Ray Foster, Liz Hyde, and Richard Messina, Cyrus Siu, and Maria Sullivan, and Peter Fuller. Tom DeCourcy, and Dave Hafermann were not present. Jim Fader arrived at 5:55 after review of the August 15 minutes. Office Manager Juanita Colon and Water Chair Dick Glenn and Design Committee Chair Don Borden were present, as were a few homeowners.

Review of August 15, 2006 minutes. Following approval of Sullivan’s motion to amend the minutes (second by Messina) to include Ms. Hyde’s proposed language, the minutes of the August 15, 2006 minutes were unanimously approved.

Manager’s Report. (by Juanita Colon) See attached. Ms. Colon is to seek a quote from MOC on preparing firebreaks on well sites and around the pump stations. Molokai Landscape Maintenance will service the entrance to Unit I. There was extensive discussion regarding homeowners’ concerns about water leaks and alleged inaccurate meters. Foster made a motion that 50% consideration be given to lot owners’ Cushman (#38), Nash (#137) and Anderson (#336) for their disputed bill, which they believe is related to leaks or water meter problems. The motion died for lack of a second. Siu moved to offer Cushman 50% consideration with notice they are responsible for future water usage, seconded by Fuller, which was unanimously carried. Siu moved to deny Nash and Anderson; Fader who seconded the motion, and it was carried with Siu, Fader, Fuller, Sullivan voting for; Foster and Messina against, and Hyde abstained. Fuller moved to allow the Ms. Colon to work out a five month payment plan with no interest with Mrs. Nash, and Siu seconded, and it was unanimously carried. Homeowners’ with excessive water usage concerns are to submit them in a detailed writing and they will be considered by the KPHA Board (not the Water Committee.)

Committee Reports
Water Committee Report (by Dick Glenn) See attached. Overall water usage is down, since KPHA implemented separate water charges effective July 1. Fuller moved that we do the sustained pump test and test the salinity of the Breadfruit Well (Unit 1). That Breadfruit Well is not currently being used (due to leakage when it is operational). Fader seconded the motion. Foster moved to amend Fuller’s motion to include all of the wells in the salinity test. Sullivan seconded Foster’s motion. The amendment to Fuller’s motion was approved with Messina, Fuller, Siu, Hyde, Foster and Sullivan approving and Fader abstaining. Discussion-Foster indicated that we should continue to look at long term development, which may include a new well at a higher elevation (to replace a lower elevation well without an increase in pumpage), and that we should test the salinity of all of our wells. The Fuller motion as amended was unanimously approved. We will arrange to have the sustained pump test done to the Breadfruit Well and all wells will be analyzed for salinity.
Svetin & Son and Pacific Underground Detection has been hired to find and install the meters for the 14 lots’ critical service connections, including Messina’s lot (#155) and Lynch (#49). Foster moved to have Svetin & Son install basic equipment in every lot that does not have a service connection. The cost will be passed on to the lot owner, when the respective lot owner requests their meter (there will be an equal cost per lot.) Fader seconded the motion and it was carried unanimously.

Finance Committee (by Liz Hyde) Treasurer’s report (dated September 19, 2006), related to the conversion of the Maintenance Trust. Foster moved, and Fader seconded, that we present the following management plan to the court:
Currently, our small “current needs” capital reserve is held in a money market fund with Morgan Stanley. After reviewing plans from Bank of Hawaii, USAA and Morgan Stanley we would like to continue handling our funds through Morgan Stanley;
We are expecting to have about $1.2 million after liquidation of current assets;
We would maintain a Money Market account for current needs. Since, when the Trust is converted, we will be around 250% funded, we would like to invest 20%, as long as there is an excess, in conservative equities, and the balance of 80% in US zero coupon bonds, US government securities, and CDs of differing maturities; with the objective to ladder large expected expenses, based on a capital reserve study. Expected management costs would be from $2000 to $4080 per year on the equity portion only.
The motion passed unanimously.
Since we have enough funds on hand to cover expected expenditures for the remainder of the year, Hyde moved that we not charge the membership a Capital Reserve Assessment[1] for the 4th quarter of 2006 (begins October 1), and it was seconded by Messina. The motion passed unanimously.
A Profit & Loss Budget v. Actual Report (Jan. through August 2006; and August 2006) dated 9/18/06; and a Balance Sheet dated 9/21/06, were presented. We are in good financial condition.

Common Grounds – Fuller will investigate the issue of wind energy and MECO.

Design Committee (Don Borden): No report.

New Business-No matters were discussed.

The meeting was adjourned at 8:45 pm.

Respectfully Submitted,

Maria Sullivan
KPHA Board Secretary

Note—KPHA members may request committee reports from the KPHA office.
[1] The capital reserve assessment was $200 for the 1st 3 quarters.