Maui Sands I and Maui Sands II

Association of Apartment Owners

Maui Sands I and Maui Sands II

Annual Meeting Minutes

April 28, 2012 -- Page XXX

DRAFT

Association of Apartment Owners

Maui Sands I & II

Annual Meeting Minutes

April 28, 2012

Maui Sands I Board Jean Rachkowski, Laura Cowan, Doug Wallway,

Members Present: David Bontorin, Keith Hertz, and John Cush

Maui Sands II Board Members Art Ford, Lucia Livoti, and Tracy Barrett

Present:

Other Attendees: Dave Ferguson, Pat Bauwens and Kai Medeiros, Management Consultants of Hawaii; Kailana Flores, Recording Secretary; Michael Pang, Monarch Properties

I. DECLARATION OF QUORUM

A quorum for Maui Sands I was declared with 30.9094% of the owners present in person and 30.9094% represented by proxy for a total of 61.8188% owners represented.

With 85.0% of the owners present in person and 0.0% owners represented by proxy, a quorum for Maui Sands II was declared with a total of 85.0% of owners represented.

II. PROOF OF NOTICE

It was certified Notice was sent to all owners of record on March 28, 2012, in accordance with the Association governing documents, and it was posted on property in compliance with Hawaii State Law.

III. CALL TO ORDER

Chairperson Jean Rachkowski called the combined Maui Sands I and Maui Sands II Annual Meetings to order at 9:04 a.m. The meeting was held at the Paki Maui, Honokowai, Maui, Hawaii.

IV. INTRODUCTIONS

Introductions were made at this time.

V. APPROVAL OF MINUTES

The owners considered approval of the April 23, 2011, combined Annual Meeting Minutes. With no objections, reading of the Minutes was waived. With no objections or corrections made, the Minutes of the 2011 combined Annual Meeting Minutes were approved as distributed. With no objections voiced, the Board was authorized to approve the Minutes of the 2012 Annual Meeting, as provided in 514B of the Hawaii Revised Statutes, as to form and content.

VI. PRESIDENT’S REPORTS – MAUI SANDS I

Jean Rachkowski (Maui Sands I) submitted an annual report with the information distributed to owners at registration. She announced the time and dates of social gatherings and community functions.

The President acknowledged former Maui Sands I Board President Rosa McAllister for her dedication and her hard work. She was key to the implementation of a variety of improvements on property. Although no longer serving on the Board, she continues to support and contribute to the Association.

President Rachkowski reported the roofs for Phase I, Buildings 1-6, were completed in December 2011. The owners of Maui Sands I approved a special assessment for the roofing project at last year’s Annual Owners’ Meeting.

Due to the high cost and complexity of providing property-wide WIFI internet access, free internet access is only available at the pool. Owners that want this service in their units should call providers on their own.

The Board has approved an additional $1,200 to upgrade the irrigation system.

Last year, the Board approved a request by an owner to install a faux lava wall over the lanai cinderblock at her own expense to shore up cracks in the blocks. A number of other owners have added this feature at their own expense as well. Interested owners may contact Jean Rachkowski or Rose McAlister on guidelines.

With limits in available staffing, repairs and projects may be completed slower than some owners and Board members would like. The Board is in process of drafting a priority list with safety issues at the top. The two Boards met recently and toured the property with Resident Manager Ken Kuhlman and Bill East from Management Consultants of Hawaii. At registration, owners were given a questionnaire compiled from owners' suggestions for improvements and beautification on property. Owners were asked to rank them by priority.

The President said a professional Reserve Study hasn’t been conducted for a number of years. The study provides an analytical long-range approach, and lists future major capital improvements and repairs. The Maui Sands I Board, at the April 14 Board Meeting, approved an updated Reserve Study. Resurfacing the pool and resealing the parking lot are upcoming major Reserve projects on the schedule.

The Maui Sands I and II Boards met with a mediator on April 26. Negotiations are ongoing. The President is optimistic that the parties are close to a solution. She asked that everyone at Maui Sands work together for the betterment of the property.

VII. PRESIDENT’S REPORT - MAUI SANDS II

Director Livoti of Maui Sands II said the Board of Maui Sands II has been working on the re-roofing project. Director Ford reported that Phase II Roofing will commence shortly. Owners will be kept up-to-date on the re-roofing status and logistics.

Ms. Livoti reported the two Boards have been working cooperatively on property towards improvements.

VIII. TREASURER’S REPORT

Director Ford of Maui Sands II said his report is virtually identical to last year. There are two owners in arrears (one seriously). Phase II is in good shape concerning delinquencies. Reserves of $135,000 will be seriously depleted with the roof project. The recent walk-through at Phase II found only minor landscaping issues to address. The building is in pretty good shape.

Treasurer Cowan of Maui Sands I said copies of the Draft Audit are available for review. In the past year, there were three units sold, which improved delinquency issues. Other units in both phases may fall into foreclosure, but the Association can use rental power of attorney to collect revenues from them. Overall, the delinquency problems have improved.

IX. APPOINTMENT OF TELLERS

Chair Rachkowski asked for two volunteers to act as inspectors of elections for certifying any ballot count for the meeting. Anna Kelso (4G) and Shirley Allen (5F) volunteered.

X. ELECTION OF DIRECTORS

There are three vacancies on the Board for Maui Sands I as follows: two for three-year terms, and one for a two-year term. Directors Bontorin and Rachkowski have indicated a willingness to seek re-election to serve on the Board, and their names appear on the ballot. With no objections voiced, Directors Bontorin and Rachkowski are considered nominated as candidates for the Board.

Chair Rachkowski called for nominations from the floor for Maui Sands I. Wendy Cush was duly nominated, and her name was added to the ballot. Bob Jenks was duly nominated, and his name was added to the ballot. Ryan Logtenberg was duly nominated, and his name was added to the ballot. The President called for further nominations, and the nominations were duly closed. Mr. Jenks, Ms. Cush, Ms. Rachkowski and Mr. Bontorin introduced themselves and discussed their qualifications; a letter written by Mr. Logtenberg, who was absent, was read during nominations. An owner asked the candidates to explain if they are full- or part-time residents. Qualifications for serving on the Board were reviewed.

Election and balloting procedures were explained. The two candidates that receive the most votes will serve three-year terms, and the candidate that receives the third-most votes will serve the two-year term.

For Maui Sands II, there is one three-year seat open. Treasurer Barrett's term is expiring, and she is not seeking reelection. There was a call for nominations; there were none. There was a request to defer Phase II balloting, so balloting for Phase I can continue.

Marie Loquet was duly nominated for the Maui Sands II Board. With no further nominations, nominations were duly closed. Since there is just one candidate for one position, that person can be elected by unanimous vote. There were no objections.

MOTION: To elect Marie Loquet to a three-year term on the Maui Sands II Board of Directors by acclamation.

Livoti/Ford Unanimous Approval

(There was a recess at 9:51 a.m. Annual Meeting business resumed at 10:20 a.m.)

XI. ANNUAL RESOLUTIONS

The following Annual Resolutions were presented to the owners.

MOTION: Be it Resolved by the Association of Apartment Owners, that the amount by which each member’s assessment in 2012 exceeds the total payments for the Association for maintenance, repairs and other expenses and capital expenditures of the Association as the Board of Directors has appropriately paid or determined payable shall be applied to 2013 regular member assessments.

MOTION: That the Board of Directors is authorized to select the Auditor to perform the year-end December 31, 2012, audit, unannounced verification of cash and prepare the tax returns for the Association.

With no objections voiced, the President declared the Resolutions adopted.

XII. NEW BUSINESS

Cheryl Llewellyn noted that monthly financial statements are available to all owners as a matter of State Law. She would like them posted on a secure area on the MauiSands.org website, so owners can access and review them. The webmaster would increase the website fees for this service. David Llewellyn explained that the goal is to ensure transparency with the Association’s financials and allow owners to understand the financial status on a month-to-month basis.

MOTION: To ensure that these items are readily available to all owners in good standing: Maui Sands I and II financials, including the monthly statement of revenue and expenses, monthly balance sheet, monthly budget comparison standard, monthly statement of changes in funds, balances, and the monthly statement of cash flow for the purpose of ready access to all owners in good standing, be made available no later than the 25th of each month, by means of secure website with owner login. The responsibility to ensure posting of financials should be the AOAO President, who may authorize and/or appoint another member in good standing to facilitate the reporting post.

Llewellyn /Wallway

The Motion passed by a majority vote, with 19 owners voting in favor and 13 owners voting against.

The financials will be posted on Maui Sands’ website each month.

Ms. Llewellyn said that to eliminate any conflict of interest with internal management of Maui Sands I and II, the Directors, Board members, committee members and owner voters have to resolve ongoing delinquency issues that limit necessary and desired improvements.

MOTION: That all voting members (owners), Directors, Board members and committee members must be a member in good standing. The definition of member in good standing is any AOAO member who is current in regard to their association dues, fees and assessments. “Current” is to be defined as paid within 30 days or less. Furthermore, any Board member, Director, committee member and voting member who is more than 30 days past due on AOAO dues, fees and assessments shall no longer be considered in good standing and shall have all voting privileges suspended until the delinquency is made fully current. In addition, any Director, Board member or committee member who does not within 60 days bring their AOAO dues, fees and assessments current shall be asked to resign. If the said Director, Board member or committee member does not resign from their position, they shall be dismissed. The replacement of the resigned or dismissed Director, Board member or committee member shall be made by a majority vote of all the rest of the owners in good standing.

Cheryl Llewellyn

The pros and cons were discussed.

The Motion was withdrawn.

MOTION: To explore the legality of taking away the voting rights of owners in arrears, and/or their ability to vote and serve as a Director, Board member or committee member. If it is determined legal, the Association shall prepare a written consent ballot for voting by all owners.

Cheryl Llewellyn The Motion passed by a majority voice vote.

XIII MICHAEL PANG PRESENTATION

Mr. Pang updated the owners on the status of the lease-to-fee conversion and lease rent negotiations. Rent re-negotiations are listed on the lease, as follows: July 1, 2012; July 2017; and July 1, 2027. The lease expires on July 1, 2037. Mr. Pang answered questions the owners had.

XIV. ELECTION RESULTS

David Bontorin and Jean Rachkowski were elected to serve on the Maui Sands I Board of Directors for three-year terms. Wendy Cush was elected to serve on the Board for Maui Sands I for a two-year term.

XV. NEXT ANNUAL MEETING

The next Annual Meeting will be held on April 27, 2013.

XVI. OPEN FORUM

There was an Owners’ Forum, and the following topics were discussed: 1) Pool resurfacing project; 2) Resealing of the parking lot; 3) Suggestion to improve communications with Facebook and newsletter; and 4) Legal fees.

XVII. ADJOURNMENT

The Meeting adjourned at 11:52 a.m.

Respectfully submitted,

Louise Rockett

Louise Rockett

Transcriptionist