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Posted December 13, 2011
As our economy continues to languish and we are faced with so much uncertainty, we continue to look for ways to reduce the cost of operating our property. Photovoltaic solar energy has been a consideration for the last several years after the installation of solar panels on our administration building, Hale Mana Ho’oko. This provided a substantial savings in our electric costs however we looked to other sources that were specifically related to the residential buildings. One of the largest consumers of energy in each unit is the water heater. We previously experimented with heat pumps that unfortunately did not prove feasible for our property.
A new test project to install solar thermal heating in Building 5 was approved. This project encompasses providing hot water via solar panels for 6 CCIOA units. Fortunately, much of the infrastructure work to connect the water heating systems in the 6 units was previously completed during the heat pump phase. The system is backed up by each individual unit’s hot water heater serving as an additional storage tank. We completed this project in nine days and the preliminary results from our most recent electric bills indicate a substantial savings for each of the six units. These costs will be monitored for the next several months to validate the initial results and if they continue to reflect substantial savings, we should consider a property-wide installation as an alternative to the more costly photovoltaic system.
Our experience with our new human resource administration service, Pro Service, was not without its challenges. However, it was not from lack of service or effort on their part. They provided an extensive orientation program before we actually made the transition and have provided the HR resources we have needed. They reviewed our employee handbook, provided OSHA guidelines, and have scheduled training sessions with our employees. The first training session is scheduled for October 25 for CPR and First Aid and includes twelve of our staff members. The challenges were issues of a more technical nature having to do with a new computerized payroll system and time clock. We look forward to working with them over the next year which will provide us with adequate time to evaluate their overall performance.
With the completion of Building 4, all of the CCIOA units have been renovated. We will begin the renovation process again in two years. Six CRVOA units are scheduled for renovation this year and eight during the first quarter of next year. This will complete all of their unit renovation requirements and now all units on property will be consistent with regard to their furnishings.
Our on-site activities program has really taken off (one of our initial goals when we reorganized this department) under Sabrina Callahan. As our population becomes more concerned with health and fitness, our new activities that include yoga classes and meditation and relaxation have become a big hit among owners and guests, with many sessions being sold out. We still offer watercolor classes, coconut postcards, a botanical tour of the property, in addition to a new Hawaiian basket weaving class.
We continue to look for ways to improve the overall guest experience. To that end we are emphasizing the value of making the “aloha” calls and stressing the importance of these calls to help solve small problems before they become big issues.
We are now seeing the effect of the prolonged economic downturn as more owners are transferring ownership back to the association in lieu of foreclosure. Our sales efforts continue with an onsite program and we are looking at revamping the program to move the inventory at a faster rate to offset the steady stream of incoming deed backs. Our goal has always been to move inactive inventory to generate dues payments from new owners who will support the property and all of its current and future programs. We are exploring several different options for reducing our inventory of returned weeks.
We are working on a program to generate income from these weeks based on a guaranteed rental rate per week with companies like Interval International and Hawaii Discount.com. This program has been successful in the past and we anticipate good results with the new program in the future.
We finally finished the Building 4 renovations after what was the most difficult project since we started renovating buildings in 2007. We learned that even with the best laid plans there are issues that we cannot control and need to rely on others to perform in order to achieve our goal. We were forced to be creative to solve problems by working together in a synergistic effort to get it done.
With the completion of Building 4, we moved on to many other projects that were waiting to be addressed. We completed many of the ADA improvements required for compliance as a result of the recently updated report. The improvements included moving the location of several handicap parking stalls, public bathroom improvements, fixing sidewalk grades and changes to the ADA designated BBQ area.
We installed lights on the front entry sign and new plantings at the base of the sign. It is very visible now at night, especially for first time guests.
Another example of our looking for areas to reduce our operating costs is the rain gutter project. Over time gutters on several buildings became loose and were hanging at odd angles, preventing them from effectively moving rainwater. We obtained bids from several contractors for this repair work. However, we decided to do it in-house by renting a boom lift and using one of our own crew experienced in this type of work. This project was completed in two days, saving several thousands of dollars.
The electronic locks were an issue that needed to be addressed and the company representative flew in to provide training on the proper use and maintenance of this lock system. These were originally installed several years ago and we needed to get an update on the capabilities and use of the lock readers, which became an issue. After several days of learning from his expertise, we now are fully utilizing the system and have several of our staff trained on repair techniques, preventive maintenance and programming of all available options on the system. Included in the system is an option to track, time and date all entries into a unit should a security issue arise.
Our overall goal when producing our 2012 budget was to keep maintenance fees at the 2011 level. Our 2012 budget was approved at our November meetings, resulting in no increase in your AOAO or CCIOA 2012 maintenance fees.
Bill’s executive management experience is becoming more evident as he works with managers to streamline their operations while building personal rapport with each of them. He is a tremendous asset to our management team.
As an update to the “seabird” issue, the applicants were successful in getting the attention of the agency heads directly involved in trying to address and solve the concerns expressed collectively by the applicants. The agencies understand that they need to come up with a plan that the applicants can support and will participate in. One of the agency heads was quoted as saying “we need to develop a Habitat Conservation Plan (HCP) that saves the species and incorporates what the participants need. This doesn’t work if nobody participates. We want something supportable by all.” Now that the agency heads (Washington, D.C.) are aware of our applicant group, we anticipate the process to obtain “take permits” will now be drawn out for possibly another two years. We are fortunate in that the costs of this process is primarily being borne by the larger applicants, like KIUC and the St. Regis Hotel who have hired specialized attorneys and consultants.
Our Rec Building renovation plans have been approved and a contract has been signed with Barto Construction who built our Administrative Building. We anticipate construction to begin in January with completion sometime in early March.
Our landscape architect submitted new plans at our November Board Meetings and is now working on finalizing the project costs both initial and long term.
As I mentioned in my July GM Report, the concerns with our fragile and uncertain economy continue and appear to be getting worse. Many owners that have experienced the roller coaster ride of the market’s ups and downs are now giving up their units as they lack the confidence that the economy will recover any time soon. Barring any miraculous breakthroughs in the ongoing congressional gridlock, we think the situation will not improve until new elections take place in 2012 and it may be 2013 before we see a turnaround..
We continue to develop new innovative sources of income and revenue and at the same time reducing our expenses while maintaining our service levels.
12/13/2011
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