Newsletter
December 2011
2012 BUDGET: MAINTENANCE FEE INCREASE
Our 2012 budget with reserve analysis has been approved by the Board. The short-term picture does not look good, primarily due to the unexpected sharp increases we have all seen in electrical costs; each of the past four months our electrical costs have been about $50,000 over budget. We have tried to reduce our common area electrical costs every way we can, but we have no control over the apartments.
If residents are able to reduce their electrical usage, that will help reduce the Association’s expenses. You or your agent can help by asking tenants to pay attention to their energy use and taking simple conservation measures, like turning off the air conditioner when they’re not actually in the unit.
We are looking at several large projects coming online in 2012, including the building exterior repair and paint, heat pump replacement, and trash chute replacement. These projects can not be delayed.
Under HRS 514B, we are required to maintain a 20 year replacement plan for major building elements. We do our reserve analysis on a cash flow basis and each year’s replacement projects must be fully funded for the entire 20 year plan. Some buildings plan on funding replacements through assessments, but we have been able to fund our reserves through maintenance fees.
Our expenses for 2011 have been higher than expected, almost entirely due to increases in utility costs, with by far the biggest increases coming in electrical charges.
In order to continue to fully fund our reserves over the next 20 years, and to keep up with rising costs, the Board has approved a maintenance fee increase from $305 to $325, effective February 1, 2012.
We redo the reserve analysis every year, and part of that analysis is determining the likely life of our major components. This is where our staff comes in. With the continuing efforts of all our staff and hard-working techs from maintenance contractors like Otis and Honeywell, our building’s major components have generally functioned well past their predicted life-spans.
The other factors that influence our predicted needs are inflation and interest rates; if inflation stays low for the next few years, then we will be in better shape. If interest rates rise, then our reserve funds will accrue more.
LEASE RENT CREDIT
Those owners who purchased their portion of the ground lease and not the sandwich lease had their accounts credited with $55.37.
That amount sits in your unit account and you can apply it against your outstanding balance by paying the net balance (amount you owe minus the credit) as many owners have already done.
If you prefer, you can request a refund from Hawaiiana and they will send you a check. The credit you receive may vary, depending on whether you have additional credits in your account.
Contact Pete at 808-593-6842 or pdelacruz@hmcmgt.com
