(10-15-2024, 02:00 AM)ChunksterK Wrote: Patricia, forgive me if this has already been mentioned, but did the court allow HPPOA to spend up to 5% of its revenues on non-road purposes such as mail boxes? I asked a board member how that was kosher, and she said they were allowed 5% for other items.-----------
Aloha. This is another confused issue, which the current board does not understand because they do not know their history. I will try to simplify.
When Paradise Hui Hanalike (now HPPOA) was given charge of the road maintenance crew and were deeded the roads, they acted kind of like a parent company- overseeing the road maintenance. There was not a lot of money at that time. This was because only the properties at the bottom of The Park were obligated (in their deeds) to pay for road maintenance. The majority of properties, at the top of The Park, had no maintenance obligations. This arrangement proved expensive for Paradise Hui Hanalike who quickly grew concerned about liability. So, Paradise Hui Hanalike took all the lot owners in Increment I (the upper part of The Park) to court and sued them.
After winning their lawsuit, Paradise Hui Hanalike took their club and road maintenance crew and wrote out bylaws which separated the functions and expectations of the club from the Road Maintenance Committee. Up until this point, the club was actually pulling in more money than the Road Maintenance Committee. And there were concerns with how the Road Maintenance Committee was managing themselves as Paradise Hui Hanalike (because of their liability) was having to monetarily bail the Road Committee out (help them purchase equipment, etc.) So, it was mandated, in the bylaws at that time, that the Road Maintenance Committee was required to put away 5% of all the Road Fees collected into a fund that would be used for equipment purchase. (The first mention of 5%)
Unfortunately, there was more fighting and more court battles that would follow. And in 2001 Paradise Hui Hanalike won another lawsuit, which resulted in them restructuring themselves, and getting rid of the Road Maintenance Committee (they absorbed them). But Paradise Hui Hanalike (now HPPOA) was also ordered (by the court) to maintain the separation of restricted road maintenance funds and club money. And at the time, this suited Paradise Hui Hanalike, as they had historically always collected more money as the club, than the Road Maintenance Committee had. In fact, they had bailed out the Road Maintenance Committee so many times, the court allowed Paradise Hui Hanalike (now HPPOA) to do what they needed to do to complete the "restructure" and reimburse themselves, with road fee money for several years, at the sum of $24,000 per year.
After the restructure and years of $24,000 reimbursement were completed, HPPOA was still allowed a 5% reimbursement (compensation). This money was to defray any expenses that HPPOA might have had to pay (out of club money) for road maintenance business. However, as time went by HPPOA stopped collecting club dues- there was a lot of road fee money coming in (millions). So, HPPOA no longer subsidized road maintenance with club dues. There were/are no club dues to spend.
The thing is, just about everything is paid for with road fee money- salaries, legal fees, office supplies. There is nothing to reimburse HPPOA for. However, if HPPOA wished to charge owners for the use of their clubhouse (for meetings) that would be acceptable and allowable. That type of "compensation" is what the clause in the bylaws is intended for. Unfortunately, that kind of compensation is much less than the $170,000 plus HPPOA charges Owners for their "General Fund Transfer" every year.
That said, short answer, "No. HPPOA cannot take 5% of road fees and reimburse themselves $170,000 plus a year when they do not provide services (clubhouse rentals do not total anything near that amount) or pay for road maintenance costs using club dues (dues which are non-existant).
Let me know if I can try to better explain it.
Aloha
Everything I write has been taken from historical documents, including those that came from Paradise Hui Hanalike (now HPPOA). I have not added opinion to the telling of the history.
Opinion arises when the question as to if the history and documentation should or should not apply or
matter. My opinion on that is, history does matter.