At the November 9, 2023 Royal Mauian HOA Board meeting, directors reviewed the third-quarter financials, showing modest revenue gains and controlled expenses, and presented a draft 2024 budget proposing a 10% increase in maintenance fees due to rising insurance, payroll, and reserve funding needs. The Board also provided updates on the prolonged outage of Elevator #2, detailing repair estimates, an ongoing insurance claim, and legal considerations, as well as discussed delays in the driveway reconstruction project caused by structural inconsistencies and the discovery of plumbing issues. Additional reports covered restroom repairs due to water intrusion, pool maintenance challenges related to new sunscreen regulations, landscaping improvements, and the importance of water alarms for unit protection.
The following is a factual summary of the HOA meeting:
The Royal Mauian Condominium Association held its scheduled Board of Directors meeting on November 9, 2023, at 9:00 a.m. HST via Zoom. Five of six board members were present, establishing a quorum. The agenda included review of the third-quarter financials, presentation of the draft 2024 budget, updates on several property issues, and a summary of ongoing elevator repairs. Board President Mary Sipes presided.
Treasurer Paul Piraino reported that revenues for the first nine months of 2023 were 1.3% above budget, with an overage of $8,594. This figure included a one-time credit of $5,794 from Spectrum, following a new bundled services agreement. Routine revenues such as maintenance fees were mostly in line with expectations, though one unit carried an unpaid balance.
Expenses came in 0.98% under budget year-to-date, primarily due to savings in utilities and maintenance accounts. However, some categories, such as payroll and contract services, showed overages attributed to rising costs in health insurance and emergency repairs.
The net ordinary income reported as of September 30 was $14,949. Piraino noted that the budget was tighter than in previous years and that the association is seeing fewer surpluses compared to 2021 and 2022, when pandemic-related slowdowns reduced costs.
Reserve funds totaled just over $1 million at quarter’s end. Projects funded during the year included basement driveway work, roof improvements, structural repairs, and minor equipment replacements. Notably, expenditures did not yet reflect pending payments for a roof vent replacement project and completion of the driveway.
Piraino also presented a preliminary 2024 budget, which includes a 10% increase in maintenance fees. The increase, totaling $102,581 over the prior year, was attributed to several factors:
Insurance and property tax increases (33% of the total increase)
Rising costs in payroll, contract services, and utilities (25%)
Increased reserve contributions (21%)
Absence of carryover funds from 2023 (21%)
The proposed budget allocates $235,950 to reserves, continuing a multi-year effort to reach full funding of capital reserves. The final budget is scheduled for approval at a special meeting on November 20, 2023.
There was no indication from board members or attending owners of significant opposition to the budget framework as presented.
The meeting included a detailed summary of the prolonged outage of Elevator #2, which was removed from service in May 2023 after vibration and control system issues emerged. ThyssenKrupp, the elevator contractor, initially proposed a $139,000 repair estimate, later reduced to $109,000 after the Board questioned the cost basis and involved a consultant.
An insurance claim was filed under the building’s equipment breakdown policy. A forensics engineer hired by the insurer has not yet issued a final report. Until a determination is made, the Board is weighing the risk of proceeding with repairs independently, which could impact the claim.
One board member is also reviewing potential legal remedies under implied warranty doctrines, given that the elevator failed within 18 months of installation, despite only a one-year express warranty.
Staff and board members reiterated that the elevator is only used selectively under supervision due to safety concerns.
The driveway reconstruction project encountered delays due to unexpected inconsistencies in the existing concrete structure. Engineering plans had assumed a uniform depth of 12 inches, but actual measurements revealed thinner areas, requiring a redesign.
During the delay, staff inspected and replaced a section of exposed sewer line and performed hydrojetting and camera inspection. Updated engineering drawings have since been received, and work is expected to resume around late November, pending contractor availability.
Building Manager Jack Wilson reported on several ongoing facilities issues:
Basement Restroom: A leak from the Oceanside pond waterfall was discovered behind the men’s restroom wall, causing water intrusion. Repairs are underway, including rerouting the waterfall and installing exhaust fans in both restrooms.
Plumbing: Old cast iron piping above Unit 110 was found to be deteriorating and was replaced.
Pool Maintenance: Staff continue to report challenges associated with mineral-based sunscreens, now mandated in Hawaii. These have contributed to buildup in sand filters and along water lines. Regular cleaning and chemical adjustments are ongoing.
Landscaping: 450 square feet of sod was recently replaced, and irrigation systems were upgraded following discovery of broken piping.
Owner Participation and Questions Several owners asked questions related to the proposed budget, water alarm recommendations, and long-term insurance implications. The Board reiterated that 10% of the proposed maintenance fee increase reflects external factors beyond its control, and noted that Wi-Fi-connected water alarms have helped mitigate water damage risks.
Concerns about future elevator reliability and insurance claim history were acknowledged, but no definitive resolution was offered pending further investigation.
The Board will reconvene on November 20, 2023, to formally vote on the 2024 budget. Draft minutes and budget materials from the November 9 meeting will be published on the Association website for owner review.
No other decisions requiring a vote were made during the meeting.