Financial Irresponsibility
We believe there should be greater financial responsibility from the Board of Directors. Here are some examples of their poor fiscal stewardship.
For several years the Board has been going overbudget and spending more than it has been receiving, but the shortfall reached a whole new level in 2021. Amounts in the bulleted points below are data from the 2022 budget that was unanimously approved by the current Board members.
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In 2021 the Board budgeted and spent over $182,000 of Association funds, more than double the $86,880 collected in monthly fees.
- In 2021 the Board spent $55,476 in legal fees, mostly to harass homeowners. This is in addition to legal fees of $12,552 for collection issues. Total legal fees exceeded $68,000, over 78% of the monthly fee assessments.
- In addition to the above legal fees, the Board paid Hawaiiana $60,144 for community governance, administrative services and management services. That is almost 70% of the monthly fees assessed.
- The 2022 budget projects HOA expenses of over $115,000, which is more than 30% greater expected income. Given this shortfall, it is no surprise that the budget projects an increase in homeowner monthly fees of over 50% over the next two years (2023 and 2024).
Meetings of most HOAs our size are run by the HOA president. The current Board relinquished their responsibility to Hawaiiana to run Board meetings and the annual meetings and later hired, at an additional cost, a professional parliamentarian who lives on Oahu. The parliamentarian they hired mentioned at a recent Board meeting that when the Board reverts from Zoom meetings to in person meetings, the HOA will be responsible for his travel expenses in addition to his professional fee.
At a recent Board meeting the President bragged that the annual meeting had been scheduled to better fit the schedule of the parliamentarian in order to reduce the expense of flying him over from Oahu.
We commend the Board for adopting our suggestion from last year that community inspections could be done once/quarter instead of once/month. As we expected, appearances of the community have not suffered, but the Board insists on paying non-homeowners do the inspections. We find it an insult that the Board believes non-residents are better qualified than a committee of homeowners to process community issues. In addition, Hawaiiana has a conflict-of-interest as they charge a separate fee for each violation notice they send to a homeowner.
In 2020, a Board member decided she didn't like the color of one of the houses in our neighborhood. The house had been repainted with the color the builder originally used for the house. The homeowner appealed the demand that she repaint, and had to share the cost of mediation with the association. The Board, realizing it would lose in arbitration, mollified the Board member by agreeing to use your HOA funds to repaint the two sides of the homeowner's house that face the street.
