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I’m very sorry I missed what sounded like a very successful meeting yesterday, but work takes me off island and I am not able to be here all the time. I am grateful for all the work our BOD is putting into the paving project and all other matters.
Jeff, thank you for addressing the rumors and bond issues yesterday and thank you for the clarification and for your invitation for further questions. I apologize in advance for what might seem to be obvious questions here but I don’t have a background in finance and am trying to get my head around some of the points you made. Perhaps most of these will be answered when you have all the numbers on May 5 and if so I look forward to reading the minutes.
10) “ We now have a consideration that would allow us to literally sell back a part of the bond contract (we may never use) for a minimum of $500,000.”
Does this mean we could sell back part of the bond if in the end it is cheaper to do so than if we keep it all and continue to pay interest for years until we collect enough road fees to pay it all back?
11) The original Broker of the Bond has suggested that we add an additional $1,000,000 to the existing trust (completion account) with a 125% ratio instead of 110%. Our attorney has indicated that this is only conditional and has nothing to do with the terms of the contract.
Could you please explain this in layman’s terms and how it affects our debt and obligations? Are we considering borrowing another $1,000,0000?
13) If we returned funds at this point our estimated penalty would be $3.500,0000. Is that a better way to end the controversy? It’s the will of the collective that matters and should be and will be honored.
How does this relate to the $500,000 fee above? Does this mean if we return funds we will be paying a fee and penalty totaling $4,000,000? Won’t the controversy be settled once it becomes clear whether it costs us more in the end to keep the bond money or return funds?
16) Bond is collateralized by our account receivables only.
Are there penalties if we don’t collect enough road fees to pay the bond back by a specific date?
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Youser.....would you like to be on the Finance Committee? That is from the heart, as you ask the right questions and because you ask those questions and clarity you would be a tremendous asset. Please do not apologize for asking questions to add clarity to all those who are asking themselves the same things. I will try and answer below as best I can:
10) “ We now have a consideration that would allow us to literally sell back a part of the bond contract (we may never use) for a minimum of $500,000.”
Does this mean we could sell back part of the bond if in the end it is cheaper to do so than if we keep it all and continue to pay interest for years until we collect enough road fees to pay it all back?
Seperate issue, but was presented to us by Dexia. They are willing to pay us money to delete a clause in the contract that allows us to "call the bonds" and pay them off. If we sell it back it's worth $500,000 plus. The question is, will we ever have the need for this call option. That is what is being considered. We would still continue the bond.
11) The original Broker of the Bond has suggested that we add an additional $1,000,000 to the existing trust (completion account) with a 125% ratio instead of 110%. Our attorney has indicated that this is only conditional and has nothing to do with the terms of the contract.
Could you please explain this in layman’s terms and how it affects our debt and obligations? Are we considering borrowing another $1,000,0000?
Of the orininal amount of apporx. $12,000,000 $1.2 was set aside in trust to make certain that the project could be completed or debt paid. If all conditions are met then the money is released. They are asking us to put aside another $1,000,000 of the borrowed funds with even more restrictive criteria for releasing the funds. In short order, we would have $2.2 Million in resticted accounts.
13) If we returned funds at this point our estimated penalty would be $3.500,0000. Is that a better way to end the controversy? It’s the will of the collective that matters and should be and will be honored.
How does this relate to the $500,000 fee above? Does this mean if we return funds we will be paying a fee and penalty totaling $4,000,000? Won’t the controversy be settled once it becomes clear whether it costs us more in the end to keep the bond money or return funds?
Your logic is sound minus the $500,000 as it is not a fee.
16) Bond is collateralized by our account receivables only.
Are there penalties if we don’t collect enough road fees to pay the bond back by a specific date?
Like any other contract there are penalties up to and including default.
I hope this helps.
Jeff
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By the way......for all interested, I will be making a motion that we completely change/enhance the way we report information to our members. The minutes all have to be ratified prior to posting and that is at least a 30 day delay. We have to maintain that of course, but in this day and age we can certainly get the substance out much faster. While we address that, I would suggest a quick and easy clean up of our HPPOA site.
Aloha,
Jeff
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Hey Jeff,
Could you please tell the parents of elementary aged children in the park why its been taking "years", years for HAAS to get a lease to build a school?
I am not associated with HAAS yet, because they do not have a elementary school campus yet, but I have been inquiring for years and they just say they are trying to get a lease in the Park.
So whats the hold up? Whats with all the hoops and red tape?
Do you think MWS had to jump through all those hoops? How do you think that worked out for everybody in HPP? You think Connections had to go through a "Schools in the Park Committee"!!!!
It appears the HPPOA is being real greedy, Impact fees what the heck?! Seems to me HPPOA should be doing everything it can to lure HAAS here, what a marvelous asset to our community that would be. Hope they don't find some place else thats more accommodating and receptive like the lot adjoining their present campus! or Nanavale or!!
Maybe you all do not realize the desperate, desperate situation for our families and our charters.
Need before Greed please, enough BS let them break ground NOW!
And make HPP a great place to live for Families and not just retirees.
The only conclusion I can make is that someone on the board or the committee is thwarting the process in favor of MWS. And it would not be the first time. Check it out.
Oh I also heard MWS is going to make a summer boarding camp for delinquents, would that be against their lease??? Because we really have enough delinquents in the park already but what do you expect without any decent schools for them to attend.
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Angela111
I have no clue what happened prior to my tenure on the BOD (2008 to present), but I looked at it the same way you do. Why haven't we done something .....HELLO !!!!!
Based on your comments, I must conclude that you may not have attended our last BOD meeting. I disclosed my absolute positive bias towards HAAS and my 100% support of the concept and making it a reality. No committees or analysis paralysis....just make it happen. We have a 12 year old that goes to HAAS Real Class and we know first hand what a positive impact having a HAAS program or similar in HPP would have on our community.
I can assure you that this BOD is not complacent on the matter. If we were, then how did HAAS, the Planning Department and our County Councilperson end up at the same meeting? It wasn't magic; it was alignment and BOD invitations that got them there.
Keep pushing us so we can push in the right direction.
Aloha,
Jeff
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Jeff,
Thank you for the compliments on my question-asking. I would be happy to help out on the finance committee but at the moment I am off island for long periods and just can't make a commitment to be at meetings with other committee members when they arrange to get together. If my situation changes I'll let you know. However, if there is something I can do from my laptop, remotely, I am willing!
And thank you for your post and explanations. They are very helpful.
If we are allowed to call the bond, maybe it would be a good idea now as interest rates have dropped. As I understand this type of bond, we can call it in and re-issue at a lower interest rate. It sounds like Drexia wants to pay us to kill that option and lock us in to the higher rates for the full term. I am sure the Board is considering what is the best option at this time (I'm just thinking maybe we shouldn't lock ourselves in.)
If we do put aside another $1,000,000 into the restricted account can we renegotiate better terms? If we are willing to have more restrictions, we should get something for it.
Is there somewhere (previous minutes or finance statements) where we can see the terms of the bond? This might help us to see the big picture and why the options or choices are not that obvious. For example, having the call option might not be worth an additional $500,000. And perhaps paying the penalty to return funds would cost us less in the long run.
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Angela you sound frustrated, which I can understand, but the BOD is not a School Board, and HPPOA is a private non-profit corporation. The 1997 HPPOA Community Master Plan and the 2005 Revised HPPOA Community Master Plan show lands identified for schools. The State DOE is not interested in building a school on those sites. HAAS applied to HPPOA for use of one of the sites. HPPOA has certain conditions on the use of any school site. Use of any school site has conditions. HPPOA will not be 'giving' land to any applicant, but will be leasing the land. There are policies and procedures and systems of accountability that will be put in place for the use/lease of any HPPOA school site, for the benefit of all.
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So lease it to them for a dollar a year. The benefit to HPP would be having a fine school within walking distance for many. The benefit for HAAS would be a new venue and positive growth in Lower Puna. HAAS is part of the state DOE, and apparently they are willing to build a school in HPP. Anyone with a doubt about the commitment or capability of HAAS should visit their Pahoa campus.
The HPPBOD would be foolish not to make this happen.
punatoons
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Common sense......we have multiple parcels suited for the purpose and deed restrictions in place that dictate this use as proper. This was meant for the community and not supposed to be a profit center. I will push for the highest use for the lowest possible cost to the provider. If it's legal and costs a dollar a year.....so be it. Just my humble opnion
Aloha,
Jeff
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Joined: Oct 2006
The BOD's past discussions about the development and use of any reserved site, i.e, schools was very deliberate. All uses of all sites in HPP, be they your home on your lot, or mine, create a traffic burdenon the road. As HPP develops there is a greater burden on our roads. Some is to be expected. Some not. HPPOA has limited funds for specific uses. HPPOA can notbear the costs of increased traffic burdens on HPPOA roads, beyond that which is expected. Identifying school sites is one matter. Paying for development of the site is the responsibility of whatever entity is awarded a lease to use that site. HAAS is a great applicant. Any applicant would have to meet the terms of a long term lease of the property and conditions of a County Special Pemit.
The experience HPPOA has had with Malamalama School, let the various BOD's know, from 2004 to the present, that HPPOA must have a cost effective lease arrangement with the use of any HPPOA property.
We currently have a BOD where most of the Directors, not all, understand the responsibility and obligations of the BOD as a whole to the Membership.
Hooray! Maybe the one who doesn't get it, will get it.
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