1 Hawaiiana Management Company, Ltd. Kukui Grove Executive Center 4370 Kukui Grove Street, Suite #208 Lihue, Hawaii 96766 Tel: (808) 240-3218 Fax: (808) 245-6583 Internet: www.hmcmgt.com May 2017 Re: Fiscal Year 2017-2018 Budget and Maintenance Fees Aloha, Owners of Kakela Makai Oceanview Community Association, This year s budget, which will take effect June 1, 2017, was approved by the Board of Directors and ratified by the owners on April 19, 2017. After careful consideration of operating and reserve expenses and contributions to reserves, the board unanimously agreed not to raise maintenance fees. Maintenance fees will remain at $800 for the year, payable in two installments of $400 each, due on July 1, 2017 and January 1, 2018. Hawaii Revised Statute Requirement Maintenance Fee Payment Information Hawaii Revised Statute requires that owners be provided with certain information on an annual basis with regard to the operating budget. The 2018 Budget is available for your review on the Kakela Makai Oceanview Community Association (KMOCA) website www.kakelamakai.com. The Association governing documents require that delinquent accounts be charged interest at 10% per annum, prorated daily from such due date until paid. Additionally, a $50 late fee will be assessed after 30 days delinquency. The association has established a priority of payments policy that requires payments to be applied in the following order: legal charges, non-sufficient funds or postdated charges, late fees, fines, special assessments, miscellaneous charges, then maintenance fees, applied to the oldest balances first. Maintenance Fee Coupons or SurePay Program A maintenance fee statement and return envelope for the July 1, 2017 payment will be mailed out in June. If you are enrolled in Hawaiiana Management s electronic SurePay payment program, a statement is not needed, and no action is required on your part. If you are not using Hawaiiana Management s SurePay program for automatic maintenance fee payments, you may want to consider using it now. SurePay and Other Automatic Payment Instructions To enroll in SurePay, return the enclosed application to Hawaiiana Management Company prior to June 15, 2017, to ensure that your July 1, 2017 payment is made on time. If your maintenance fees are paid by a financial institution or bill payment agency other than Hawaiiana Management s SurePay program, please make sure that your financial institution or payment agency is provided with the maintenance fee amount, which is effective on July 1, 2017. Sincerely, For the Board of Directors Kakela Makai Oceanview Community Association Richard Roberts, CMCA, AMS Management Executive Hawaiiana Management Company, Ltd. Managing Agent 1
2 Hawaiiana Management Company, Ltd 2018 Monthly Cash Operating Budget For Kakela Makai Oceanview Community Association N Approved by Board of Directors on February 15, 2017 DESCRIPTION JUNE JULY AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY ANNUAL REVENUE 2017 2017 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018 TOTAL MAINTENANCE FEES 79,600 79,600 159,200 INVESTMENT INTEREST 99 99 99 99 99 99 99 99 99 99 99 99 1,188 CHECKING INTEREST 3 3 3 3 3 3 3 3 3 3 3 3 36 DESIGN REVIEW FEE 50 50 50 50 50 50 50 50 50 50 50 50 600 CLUBHOUSE CLEANING 50 50 50 50 50 50 50 50 50 50 50 50 600 TOTAL REVENUE 202 79,802 202 202 202 202 202 79,802 202 202 202 202 161,624 UTILITIES JUNE JULY AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY TOTAL ELECTRICITY 700 700 700 700 700 700 700 700 700 700 700 700 8,400 WATER 316 316 316 316 316 316 316 316 316 316 316 316 3,792 GAS 1,280 1,280 1,280 1,280 1,280 1,280 1,280 1,280 1,280 1,280 1,280 1,280 15,360 TELEPHONE 140 140 140 140 140 140 140 140 140 140 140 140 1,680 TOTAL UTILITIES 2,436 2,436 2,436 2,436 2,436 2,436 2,436 2,436 2,436 2,436 2,436 2,436 29,232 CONTRACT SERVICES JUNE JULY AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY TOTAL CLEANING SERVICE 1,417 1,417 1,417 1,417 1,417 1,417 1,417 1,417 1,417 1,417 1,417 1,417 17,004 GROUNDS 750 750 750 750 750 750 750 750 750 750 750 750 9,000 POOL 855 855 855 855 855 855 855 855 855 855 855 855 10,260 SECURITY EQUIP. MAINT. 200 200 200 200 200 200 200 200 200 200 200 200 2,400 TOTAL CNTRCT SVCS 3,222 3,222 3,222 3,222 3,222 3,222 3,222 3,222 3,222 3,222 3,222 3,222 38,664 MAINTENANCE JUNE JULY AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY TOTAL GROUNDS 100 100 100 100 100 100 100 100 100 100 100 100 1,200 POOL 275 275 275 275 275 275 275 275 275 275 275 275 3,300 BUILDING REPAIRS 500 500 500 500 500 500 500 500 500 500 500 500 6,000 TOTAL MAINTENANCE 875 875 875 875 875 875 875 875 875 875 875 875 10,500 2
3 Approved by Board of Directors on February 15, 2017 2018 Monthly Operating Budget For Kakela Makai Oceanview Community Association DESCRIPTION JUNE JULY AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY ANNUAL PROFESSIONAL SVCS 2017 2017 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018 TOTAL ADMIN SUPPLIES & SVCS 660 660 660 660 660 660 660 660 660 660 660 660 7,920 AOAO ADMIN EXPS 100 100 100 100 100 100 100 100 100 100 100 100 1,200 CLUBHOUSE PROCESSING FEE 25 25 25 25 25 25 25 25 25 25 25 25 300 MANAGEMENT SRVCS 2,733 2,733 2,733 2,733 2,733 2,733 2,733 2,733 2,733 2,733 2,733 2,733 32,790 AUDIT 1,310 1,310 LEGAL FEES GENERAL 400 400 400 400 400 400 400 400 400 400 400 400 4,800 LEGAL FEES COLLECTIONS 250 250 250 250 250 250 250 250 250 250 250 250 3,000 PROF & ADMIN SVS-OTHER 938 938 938 938 938 938 938 938 938 938 938 938 11,256 TOTAL PROF. SERVICES 6,416 5,106 5,106 5,106 5,106 5,106 5,106 5,106 5,106 5,106 5,106 5,106 62,576 OTHER EXPENSES JUNE JULY AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY TOTAL PROPERTY INSURANCE 2,053 2,053 LIABILITY INSURANCE 2,814 2,814 D AND O INS 1,613 1,613 INSURANCE-UMBRELLA 1,184 1,184 ASSOC APT R. P. TAX 75 75 150 STATE GET 9 9 9 9 9 9 9 9 9 9 9 9 108 TOTAL OTHER EXP. 7,748 9 9 9 9 9 84 9 9 9 9 9 7,922 TOTAL OP EXPENSE 20,697 11,648 11,648 11,648 11,648 11,648 11,723 11,648 11,648 11,648 11,648 11,648 148,894 LOAN PAYMENTS TRANSFER TO RESERVES 3,182 3,182 3,182 3,182 12,730 3
KAKELA MAKAI OCEANVIEW COMMUNITY ASSOCIATION YEAR 2018 RESERVE PROJECTS AS OF FEBRUARY 15, 2017 COST NOW and NORM LIFE values are best estimates by Hawaiiana Management and vendors who were nice enough to inspect the property or give a best guess. 4 It may be advisable to employ an expert to evaluate those projects with high cost. RESERVE FUND STATUS - COMPONENT METHOD M. FEE RESERVE. MAINT. First Plan Year - Fiscal 2018 Reference Year 2017 THE MODEL'S FINDINGS FOR % FUNDING 2017 Deficit CHANGE CONTRIB FEES Final Plan Year 2037 Recommended Reserve Funding 100% (69,696) -51% (124,948) 77,609 2017 Maintenance Fees 159,200 2018 Maint Fees 159,200 Target Reserve Funding Level 60% (139,856) -81.44% (173,007) 29,550 2017 Other Income 3,092 2018 Othr Inc 2,424 Minimum Reserve Funding Level 50% (157,396) -89% (185,022) 17,535 2017 Operating Expenses -122,513 2018 Exp -148,894 EOY 2018 Funding %@ Approved Lev 167.91% (43,357) 159,200 2017 Reserve Contribution 39,779 2018 Contribution 12,730 Condition Codes Source Codes Source Codes Projected Reserves At Start of 2018 245,097 Target Funding L 60% EXCELNT E Contractor Proposal 1 Cost at Similar Project 5 Projected Reserve % at Start of 2018 139.7% Tgt Ann Contrib 11,932 GOOD G Contractor Estimate 2 Statistical Guideline 6 Minimum Inflation 2.0% Req Contrib-Tgt (127,924) FAIR F Engineer/Arch Estimate 3 Inflate First Year? Yes Projected Savings Interest 0.5% App. % Change POOR P Cost When Last Done 4 CAPITAL INVENTORY NORM DONE LAST CO NEXT COST COST FUNDING EOY ITEM ADJUSTMENT LIFE LAST COST ND DUE DATE NOW SRC RQMNT RES DEFICIT Entry and Security System 2008 10 2018 25,000 24,988 24,988 Septic System Inpsection Ports Upgrade 1919 99 2018 10,000 9,995 9,995 Wood Shake - R & R 8 5 2005 2018 5,948 5,490 5,490 Landscaping & Irrigation - Refurbish -2 15 2005 2018 4,326 3,993 3,993 Metal Fencing - Paint 9 4 2005 2018 3,059 2,824 2,824 Exercise Equipment - Stationary Bike -2 10 2010 2018 2,060 2 1,803 1,803 Exterior Wood - Paint 9 4 2005 2018 1,648 1,521 1,521 Irrigation Controller -2 15 2005 2018 1,236 1,141 1,141 Water Heater 3 10 2005 2018 1,133 1,046 1,046 Water heater 3 10 2005 2018 773 714 714 Spa - Heater -7 12 2014 2019 4,120 2,472 2,472 Exercise Equipment - Stride Stepper 5 2016 2021 4,120 2 824 824 Signage - Misc. Small 1 15 2005 2021 3,940 2,955 2,955 Pool - Filters 1 15 2005 2021 3,708 2,781 2,781 Signage - Community Monument 1 15 2005 2021 3,090 2,318 2,318 Exercise Equipment - Treadmill 5 2016 1891 2021 1,948 390 390 Spa - Filter -7 15 2013 2021 1,854 927 927 Exterior Security Fixtures - Solar 1 15 2005 2021 1,313 985 985 Signage - large, Clubhouse 1 15 2005 2021 618 464 464 Spa - Pumps/Motors II for Jets 6 2017 1000 2023 2,451 Pool - Pumps/Motors 1 6 2016 2023 2,451 350 350 Security Cameras 10 8 2005 2023 2,318 1,545 1,545 Security Camera DVR 10 8 2005 2023 1,545 1,030 1,030 Exterior Stucco - Paint 2 8 2014 2024 9,100 2,730 2,730 Pool Deck - Repair & Seal 2 5 2017 7660 2024 7,890 Pool - Furniture Loungers 1 8 2015 6300 2024 6,489 1,442 1,442 Pool - Furniture Chairs 1 8 2015 4470 2024 4,604 1,023 1,023 Interior Surfaces - Paint Clubhouse & RR 11 8 2005 2024 3,801 2,401 2,401 Termite Treatment 11 8 2005 2024 1,648 1,041 1,041 Spa - Pumps/Motors I 2 6 2016 2024 1,226 153 153 Pool - Furniture Tables 8 2017 2130 2025 2,130 Spalling - Repair Contingency 8 2017 2060 2025 2,060 Exterior Stucco Wall At Lower Level 8 2017 1980 2025 1,980 Restroom Refurbish 1 20 2005 2026 5,150 2,943 2,943 Kitchen Cabinets/Counters Refurbish 1 20 2005 2026 4,635 2,649 2,649 Parking Lot & Ramp - 10% Repair Contingen 11 10 2005 2026 4,153 2,373 2,373 Furniture - Chairs 1 10 2015 3060 2026 2,627 478 478 Ceiling Fans 1 20 2005 2026 2,472 2 1,413 1,413 Drinking Fountains 1 20 2005 2026 2,472 1,413 1,413 Exterior Pillar & Wall Fixtures - Replace 1 20 2005 2026 2,096 1,198 1,198 Metal Pedestrian Gates 3 18 2005 2026 1,648 942 942 PooL & Spa Rails 1 20 2005 2026 1,545 883 883 Exterior Doors - Metal Pool Equipment Room 2 20 2005 2027 618 337 337 Tile Flooring 1 25 2005 2031 17,304 7,986 7,986 Tile Walls 1 25 2005 2031 17,304 7,986 7,986 Tile Flooring 1 25 2005 2031 8,240 3,803 3,803 Partitions 1 25 2005 2031 3,399 1,569 1,569 Interior Clubhouse & RR Fixtures - Replace 1 25 2005 2031 3,090 1,426 1,426 2588BGT18 5/23/2017 4
5 CAPITAL INVENTORY NORM DONE LAST CO NEXT COST COST FUNDING EOY ITEM ADJUSTMENT LIFE LAST COST ND DUE DATE NOW SRC RQMNT RES DEFICIT Toilets & Urinals 1 25 2005 2031 2,472 1,141 1,141 Sinks & Counters 1 25 2005 2031 1,545 713 713 Pool - Tile Surface 1 20 2014 2035 28,840 4,120 4,120 Spa - Tile Surface 1 20 2014 2035 8,240 1,177 1,177 Pool & Spa - Coping 1 20 2014 2035 4,893 699 699 Septic System Tank & Leach Field - Replace 1 30 2005 2036 20,600 7,974 7,974 Wood Shake Clubhouse - Replace 1 30 2005 2036 20,394 7,894 7,894 Wood Shake RR Bldg. - Replace 1 30 2005 2036 10,197 3,947 3,947 Exterior Doors - Wood Restroom Building 1 30 2005 2036 1,648 638 638 Gutters & Downspouts 1 30 2005 2036 973 377 377 Metal Fencing 3.5' 10 25 2005 2040 25,209 8,643 8,643 Windows 35 2005 2040 7,725 2,649 2,649 Sliders 35 2005 2040 5,768 1,978 1,978 Metal Fencing 5.5' 10 25 2005 2040 4,378 1,501 1,501 Jalousie Windows 35 2005 2040 1,803 618 618 Exterior French Door - Clubhouse 35 2005 2040 1,133 388 388 Pool Deck - Replace 40 2005 2045 47,339 14,202 83,898-69,696 2017 End Yr Totals 399,497 175,400 245,097 (69,696) 5
6 2588 Kakela Makai Oceanview Community Association Board Approved 2018 Cash Flow Plan Prepared By: Richard Roberts and Hawaiiana Management Company, Ltd Maintenance Fee Plan to Accomplish All Known Improvements and Repairs For Next 30 Years Assumed Rate of Inflation: 2% Assumed Savings Interest Rate: 0.5% 30 Year Projection of Maintenance Fee Changes 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 Maint Fee Resv Exp Balance 100% Reserve 60% Reserve Contingency Reserve Fun $0. FY Starting -Reserve -Loan -Operating +Maint. +Other +Interest =Ending % Maint. Fee Net Reserve Percent Year Balance Expense Payments Expenses Fees Income Income Balance Change Contrib. Funded 2018 245,097 56,087 0 148,894 159,200 2,424 Included 201,739 0.0% (43,357) 168% 2019 201,739 4,286 0 151,872 159,200 1,200 1,019 207,001 0.0% 4,242 143% 2020 207,001 0 0 154,910 159,200 1,200 1,049 213,540 0.0% 5,490 122% 2021 213,540 22,290 0 158,008 159,200 1,200 1,018 194,660 0.0% (19,898) 105% 2022 194,660 5,197 0 161,168 159,200 1,200 958 189,653 0.0% (5,965) 90% 2023 189,653 16,568 0 164,391 162,384 1,200 905 173,183 2.0% (17,375) 76% 2024 173,183 39,926 0 167,679 167,256 1,200 768 134,801 3.0% (39,150) 61% 2025 134,801 7,230 0 171,033 173,946 1,200 666 132,351 4.0% (3,117) 53% 2026 132,351 44,904 0 174,453 180,904 1,200 569 95,666 4.0% (37,254) 40% 2027 95,666 753 0 177,942 189,949 1,200 509 108,629 5.0% 12,453 39% 2028 108,629 43,410 0 181,501 199,446 1,200 482 84,846 5.0% (24,265) 31% 2029 84,846 16,222 0 185,131 209,418 1,200 447 94,559 5.0% 9,265 32% 2030 94,559 7,674 0 188,834 219,889 1,200 534 119,674 5.0% 24,582 37% 2031 119,674 88,940 0 192,611 233,083 1,200 480 72,887 6.0% (47,268) 26% 2032 72,887 34,511 0 196,463 244,737 1,200 402 88,252 5.0% 14,963 31% 2033 88,252 24,271 0 200,392 256,974 1,200 525 122,288 5.0% 33,511 41% 2034 122,288 17,637 0 204,400 267,253 1,200 727 169,431 4.0% 46,416 53% 2035 169,431 66,948 0 208,488 275,270 1,200 850 171,315 3.0% 1,034 57% 2036 171,315 120,055 0 212,658 280,776 1,200 730 121,308 2.0% (50,737) 55% 2037 121,308 0 0 216,911 280,776 1,200 769 187,142 0.0% 65,065 71% 2038 187,142 60,050 0 221,249 280,776 1,200 937 188,756 0.0% 677 76% 2039 188,756 18,169 0 225,674 280,776 1,200 1,039 227,928 0.0% 38,133 82% 2040 227,928 112,999 0 230,187 280,776 1,200 987 167,704 0.0% (61,211) 80% 2041 167,704 27,569 0 234,791 280,776 1,200 888 188,207 0.0% 19,616 83% 2042 188,207 9,732 0 239,487 280,776 1,200 1,023 221,987 0.0% 32,757 84% 2043 221,987 16,847 0 244,277 280,776 1,200 1,162 244,001 0.0% 20,852 82% 2044 244,001 16,280 0 249,162 280,776 1,200 1,261 261,796 0.0% 16,533 79% 2045 261,796 82,418 0 254,146 280,776 1,200 1,173 208,380 0.0% (54,588) 70% 2046 208,380 63,796 0 259,228 280,776 1,200 939 168,271 0.0% (41,049) 59% 2047 168,271 16,994 0 264,413 280,776 1,200 843 169,682 0.0% 569 53% 6