(01-11-2025, 06:18 AM)HiloJulie Wrote: Thank you for your reply Patricia.
My response is as follows: (which are my observations and opinions of those observations and is in no way intended to be an insult, or insulting in any way, shape or form)
I have found both the 2023-24 audited financial statement as well as the 2024-25 budget as you have stated above from the HPP website.
As I understand it, in accordance with the bylaws as amended, allows for THE BOARD to set the amount of compensation, not to exceed 5% of the road maintenance funds collected per year for "non road maintenance" expenses. As I can see in the audited financial statement, this amount for 2023-24 was $166,187.00. As you stated and as I can see in the 2024-25 budget, the amount has been BUDGETED to be $170,000.00.
Nowhere do I see in the charter, or the information you have provided, any stipulation of what this compensation can be spent on other than "non-road maintenance."
When considering that HPP is more or less a "business" that is doing 4 to 4.5 million a year in revenue and with a net worth a little north of 10 million, I'd say that 170k a year is chicken feed. I personally think your expectation of what "non-road expenses" are, or should be, differs quite vastly from what is reality as well to how, in accordance with GAAP as well as FASB standards require direct road and non-road expenses be reported.
Further, the audited financial statement is, in most cases, not a rubber stamp document, and in as much as it does contain some rather concerning comments about basic expenditure approvals, as well as policy and procedures and a rather embarrassing rebuke about the proper way to "void checks," and then the whole GET tax issue - which to me does raise an interesting question as to if the 5% of the road fee assessment portion is subject to GET Tax since it technically is a "non-maintenance" item but, in the end the auditor has signed off on HPPOA's financial statements with the standard "in all material aspects" to be accurate and correct.
"Skimming," "nest eggs" and other terminology such as that, if being employed by HPPOA, its Board and/or its Officers, would never get past any reliable auditing firm.
I will state that for the financial size HPP is and after reading the audited financial statements and seeing the 2024-25 budget spreadsheet, I am appalled at the archaic methods of accounting and financial reporting being used. While it is in compliance with GAAP and FASB, it's just by a hair. And when you consider in today's age, the cost of a decent, detailed and comprehensive accounting system is again, chicken feed to what HPPOA's size is coupled with hobbled together Excel spreadsheets no doubt "borrowed" from someone's former employer to me are quite ridiculous coupled with the GET Tax matter as discussed above. Any modern up to date accounting system would automatically determine what is and is not subject to the billing for and collection of and payment of Hawaii's GET tax.
However, that all being said, I don't see there being anything out of line with what HPPOA has or is doing, including the entire mailbox park matter. Which also touches base with the whole 414-D and 421-J, which has had three reputable law firms advise that HPPOA falls under both in various ways, as well as being mentioned and confirmed within the audited financial statement notes.
Now, to me, I would think a better focus on HPP, considering that the road fees are mandatory, and represents the other 95% of what you pay, but what is the measurement of "bang for your buck" there?
Are the assets being properly used? Normal wear and tear versus abusive damage? Check the oil AFTER the engine blows up? Are you paying for a mile of paved road but only getting 3/4 of a mile actually paved?
Where is the grain of sand detail concern for the actual accounting of and performance of the other 95% of the money you are paying?
As my grandfather and my father who both managed hundreds of millions of dollars of contract work (very successfully I might add) erecting boilers for power plants all over the country would always say "when you're bending over picking up those pennies, hundred-dollar bills are flying right over your head!"
At any event, I'm sure my words will upset a few.
Not upset. I just don't agree with you.
HPPOA is supposed to function as an administrator, with respect to road maintenance fee money. No one asked them to do this. No one forced them to do this. They are not doing HPP owners any favors.
HPPOA agreed to certain restrictions that define their administrative duties. Among these are that road maintenance activities and the cost for, are to be kept separate from HPPOA's voluntary club activities and expenses. HPPOA was not "hired" to make money as a road maintenance administrator. IF HPPOA is charging owners a 5% administrative fee ($170,000/ year) which is NOT compensation, then HPPOA is making a profit (because they are not being compensated for anything) and they should disclose this "fee" and claim it on their taxes as such.
HPPOA is claiming "compensation." But there is none owed to them, aside from the rental of the clubhouse.
HPPOA has never bothered to bend and pick up pennies. They have always aimed MUCH higher.