Paniolo Hale AOAO

Treasurer’s Report to the Board of Directors

November 4, 2011

Challenges: Three issues continue to be a problem:

Defaults: Although defaults by units K-1 and S-2 have seen some action in that both units have been sold and we have received limited funds at closing (K-1 $1270.99, S-2 $3,600), nothing is in the works toward the sale of Unit S-3. We are still working with a collection agency to obtain resolution of the monies due from all three units.

Our water expense continues to grow exasperated by the discovery that one of the two water meters apparently was not reading consumption correctly. The Ranch replaced the meter and now we are being billed for consumption through the new meter.

Tax Liens: Although some progress has been made to resolve the State of Hawai’i liens on the property for alleged non-payment of certain taxes going back some 20 years, the issues still await final resolution.

Actions planned for the near term:

Establish a new Collections Policy and Procedure: The new procedure must take a harder line with those few homeowners who fail to pay their assessments (operating as well as reserves) on time. The longer we wait to take action the harder it is to resolve the issue.

Tax Liens: Resolve the tax issues that remain.

Current Financial Status:

The Latest financial report detailing the first nine months of 2011’s performance has been distributed to all Board members and is available to owners by visiting our web site paniolohale.org.

2012 Budget: The recommended budget has been reviewed by the Finance Committee and the resulting proposed budget for both Operating and Reserves accounts will be presented for Board adoption at today’s meeting. The proposed budget represents a ~3% increase in each owner’s monthly assessment.

Mahalo:

A special Mahalo to the members of the Finance Committee, Lynn Jarman, Priscilla Elfers, Nancy Omeron, and Wes Weston for their hours and hours of work over many days in drafting a well-crafted budget proposal to the Board.

Respectfully submitted:

Harvey James

Treasurer