(Unofficial) Historical Record of the Royal Mauian HOA

Royal Maui Meeting Notes: November 11, 2023

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.

Q3 Financial Overview

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.

2024 Budget Proposal

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.

Elevator No. 2: Breakdown and Repair Status

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.

Driveway Project Delays

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.

Facilities and Maintenance Updates

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.

Next Steps

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.

Elevator Repairs and Power Conditioning Top Agenda at Royal Mauian HOA Meeting

January 24, 2024 – Kihei, Maui — The Royal Mauian Homeowners Association Board convened for its first meeting of the year on Wednesday, January 24, 2024, to discuss key updates and challenges facing the condominium community. The meeting, held via Zoom with full board attendance, focused on elevator repairs, potential electrical infrastructure upgrades, and preparations for the upcoming annual meeting in March.

Board member Paul Piraino presented a detailed report on the resolution of Elevator 2’s mechanical failure. After months of documentation and follow-up, the HOA secured a $110,615.25 insurance reimbursement from Travelers Insurance under a boiler and machinery policy. The total cost of repairs, including a new motor and crane rental, was approximately $113,115.25. The HOA’s direct outlay was limited to $7,700, including a $2,500 deductible and $2,700 in consulting fees. Board members credited Piraino’s persistence and the consultant’s contribution with both securing the reimbursement and reducing the original repair estimate by over $25,000.

The board unanimously voted to allocate the insurance funds to the 2024 reserve balance and formally ratified the repair contract with TK Elevator. Board President Mary Sipes and other members acknowledged the frustration of needing repairs so soon after recent elevator installations and discussed the warranty limitations that led the board to file an insurance claim instead of pursuing legal action.

Concerns over the root cause of the elevator failure sparked a broader discussion on Maui’s inconsistent power quality. Sipes noted that although a definitive cause couldn’t be determined, low-level power surges remain a plausible contributing factor. The board is exploring installation of a power conditioning system, including models with backup battery capability to ensure elevator functionality during outages. They are seeking input from owners with relevant electrical expertise to assist in evaluating vendor quotes and consultant recommendations.

Preparations for the March 16 Annual General Meeting were also discussed. The agenda will largely mirror prior years, with standard business including board elections, memorial acknowledgments, and financial presentations. A proposed change would allow the board to approve meeting minutes soon after the annual meeting, improving availability for prospective buyers and lenders. Two board seats are up for election, with both incumbents indicating interest in serving additional terms.

During owner comment periods, topics included the one-year elevator warranty, power conditioning benefits, and the governor’s initiative to encourage converting short-term rentals to long-term housing for Maui wildfire victims. Sipes clarified that while the board does not regulate whom units are rented to, long-term rentals are permitted and owners may participate in FEMA-related programs independently. She added that, as of the meeting, there was no indication of any Royal Mauian units participating in such programs.

The meeting concluded at 9:04 a.m. HST, with an executive session to follow. The board expressed appreciation for community engagement and invited further owner involvement in ongoing infrastructure planning.

At the Royal Mauian Homeowners Association Board of Directors meeting held on November 21, 2024, board members and owners convened to conduct essential year-end business, including financial reporting, a reserve study review, and approval of the 2025 budget. The meeting, led by board president Mary, included directors Jerry, Don, Jack, Maggie, and Treasurer Paul Perino, who provided detailed financial updates and led key presentations.

Paul Perino reported the HOA’s financial position remained sound, with revenue modestly exceeding budget projections and expenses coming in slightly under budget through Q3. He noted particular savings in payroll, utilities (notably due to reduced propane and water usage), and property taxes, the latter due to a reclassification from short-term to long-term rental status. However, the board was cautioned about increases in insurance premiums and estimated federal taxes due to reserve fund interest income.

The reserve study revealed the HOA’s reserve fund is at 43.5% funded—considered moderate risk but aligned with national averages. The board adopted the 2025 reserve study and its associated projects, including roof resealing, window and door replacements, and the removal of invasive African tulip trees. Notably, a motion passed to pre-authorize reserve-funded projects, streamlining approvals for budgeted work unless substantial cost deviations arise.

The 2025 operating budget was also approved unanimously. A 7% increase in HOA maintenance fees will go into effect, driven primarily by a steep rise in property and flood insurance premiums. Despite this, the board emphasized that all other categories were tightly controlled, with efforts to minimize fee increases through careful planning and leveraging solar reimbursement contributions.

Resident Manager Jack Wilson highlighted completed maintenance projects, including landscaping, pool area improvements, structural expansion joint repairs, and basement wall renovations. He also praised the certified arborist hired to trim large trees and addressed plans to remove 13 deteriorating African tulip trees, noting both safety and environmental concerns. Replacement plans, likely with hedges for sound and visual screening, will be finalized with county input.

The meeting concluded with appreciation for board members, staff, and Jack’s team, recognizing their dedication and effectiveness in maintaining the property while navigating external challenges like water restrictions and rising insurance costs.

Meeting Opening and Attendance

Meeting called to order at 2:01 PM Hawaii time.

• Four board members present: Paul Perato, Jerry Rubin, Kevin Ferris, and Don (Chair).
• Two members absent due to illness (Maggie, Sheldon) and Susan Sipe not in attendance.
• Minutes from May 15 and May 22, 2025 board meetings approved.

Treasurer’s Report – First Half of Fiscal Year (Through June 30)

Revenue Performance

• Total revenue: $552,357 vs. budgeted $491,393 — a 12.4% positive variance (+$60,965).
• No delinquencies in owner dues.
• Overages in miscellaneous accounts, notably:
  • Registration fees: $59,023 recognized due to settlement, including $34.2K in legal fee reimbursement and $24.8K from 2025 collections.
  • Rental, transfer, and fines revenue over budget by $1,475.

Expense Performance

• All operating expense categories under budget.
• Payroll: $3,070 under (1.7%), though 10% health benefits increase expected to absorb savings.
• Contract services: $649 under; landscaping over by $3,706 due to dethatching project.
• Savings in elevator services ($1,849), refuse ($737), tree trimming ($1,060), maintenance ($644), and utilities ($11,094 — mainly from faulty water meter).
• Other expenses: $10,207 under, mostly from insurance and tax timing.
• Net ordinary income: $86,628 YTD, expected to decrease after budget revisions.

Reserves

• Reserve balance: $1,315,903 (cash in operating and fixed asset accounts).
• Q2 income: $81,518 (maintenance fees, interest, solar reimbursements).
• Q2 expenses: $23,527 for power conditioning, backflow prevention, emergency repairs, and taxes.
• Year-to-date reserve expenditures: $61,208.

Budget Amendments and Maintenance Fee Adjustment

• Integration of guest registration fee revenue into 2025 budget (projected $50,000, conservative vs. $54K estimate).
• Reallocation of $34.2K in legal fee reimbursement to operating reserves.
• Reduction of maintenance fee revenue requirement by $50,000.
• Result: 4.1% maintenance fee credit to owners in Q4 2025 billings.
• Approved unanimously.

Insurance Renewal

• 2025–26 insurance premiums: $271,162 vs. $223,154 prior year (+22% / $48,498 increase).
• Key changes:
  • Property insurance up 25% due to $7.4M higher building valuation and rate hike.
  • Equipment breakdown insurance +13% ($240 increase).
  • Umbrella coverage: new carrier, 22% decrease ($809 savings).
  • Flood insurance up 17% ($9,654 increase).
  • Legacy relationship with FICO kept premiums competitive; no competing carriers offered better terms.
• Renewal approved.

Projects and Staffing Report

Facilities

• Pool: Emergency quartzite repairs completed; heavy summer use increasing chemical needs.
• Parking lot & sidewalks: 115 ft of curb and 70 sq ft of sidewalk replaced; rock wall repaired; asphalt patching completed ahead of sealing (Aug 21, 28; Sept 4, 11).
• Drainage issue near car wash corrected.
• Landscaping: Positive feedback on Rapa Nui’s work; Phase 3 dethatching planned; new podocarpus plantings underway; coconut palm trimming pending.
• Roof: Drone infrared inspection showed no major issues; one area flagged for follow-up.

Staffing

• Resident maintenance manager injured offsite (broken fibula); expected out 2–3 months.
• Part-time help under consideration.
• Some projects delayed; staff praised for hard work.

Community Development and Local Issues

Kamole Grand Development

• Proposed 217-unit condo project across from Royal Mauian.
• Concerns: traffic congestion, flooding, increased pedestrian traffic, unauthorized beach/lawn use.
• September 9 public hearing; owners urged to submit testimony.
• Potential strategies: oppose project or advocate mitigations (reduced size, controlled access).

Park Maui Proposal

• Paid parking at nearby beaches (Kam I–III): $10/day for non-residents; Hawaii driver’s license holders park free until noon.
• Virtual meeting August 24; owners encouraged to participate.

Legal Counsel Update

• New local attorney retained: Carrie Maling (Maui-based, experienced with condominiums, lower rates than prior Honolulu firm).
• Role includes advice on ordinances, rental issues, fines, and potential advocacy regarding Kamole Grand.

The meeting was attended by Treasurer Paul Perano, Secretary Kevin Tarras, Directors Jerry Rubin and Susan Sipe, and later Maggie Sheldon, along with bookkeeper Amalia and several owners. The board unanimously approved the minutes from the November 13, 2025 meeting. Treasurer Paul Perano then presented the 2026 operating budget, noting that it had already been thoroughly reviewed at the prior meeting and that no changes were made. The approved budget includes a 5% increase in maintenance fees, effective January 1, 2026, raising $1,215,770 to meet operating and reserve funding needs. Paul explained that insurance premium increases account for over half of the increase, and that the combined average budget increase for 2025–2026 is 3.95%, which is lower than several previous years. The board unanimously approved the 2026 operating budget.

Paul next reviewed the 2026 Reserve Study, completed October 15 by Association Reserves. No site visit was conducted this year, and no major changes were recommended compared to 2025 aside from inflationary adjustments. The study calculated a fully funded balance requirement of $3.136 million, compared with an estimated actual year-end reserve balance of $1.14 million, placing the association at a 36.4% funded level, categorized as medium risk for deferred maintenance or special assessments. Recommended 2026 reserve contributions total $283,296 (including $25,000 from solar reimbursements), and the study outlined several planned projects such as painting, waterproofing, roof maintenance, electrical fixture upgrades, fire system inspections, and refurbishment of selected building areas. The board unanimously approved the reserve study.

Before adjournment, the board announced that the Annual General Meeting will be held on March 21, 2026, and the next board meeting is scheduled for January 15 at 2:00 p.m. Hawaii Time. With no owner questions presented, the meeting was adjourned at 2:14 p.m., after which the board proceeded to an executive session.