Upcoming Elections

[Jeff From Salem]

As you may know, Linda Kolstad of Wyndham has stepped down from the KBV Board of Directors. Charles Twardzicki has taken her spot on the board, but, as of now, there is no acting President. I understand that both current VP, Larry Walker, and Jack Goodstein have put their hat in the ring, so to speak, for the position of President. As Charles Twardzicki is taking Linda Kolstad's seat, that seat (and Charles) will be on the ballot for next year's election (along with Jack Goodstein's seat). Every other year - three seats, two seats. This ensures continuity on the BOD.

We, as owners (and non-board members) do not have a say in who is President of the KBV BOD, but I'd much prefer having Jack Goodstein in that position, someone who has the right temper and demeanor to really be accepting of different points of view. Furthermore, his long-term vision of having greater participation and influence by individual owners is a goal I can really get behind.

Meanwhile, we all need to get to know and ask questions of those who are running for available seats on the BOD this time around. This time, we have Trish Harrington, Dani Ramos from Wyndham, and Larry Walker in seats up for election.

There will be several on the ballot we may or may not be personally familiar with, but we need to give them a chance and a voice. They need to make themselves available here so we can not only ask questions about their background, but their vision.

Jeff

 

[bianchicycle]

Well, this is good news and congrats to Charles! I think we have a good team on the present BOD but I do agree that we should see bios, etc from all candidates way before elections so we can ask questions.

Tom

 

[Jeff From Salem]

Well, we have at least two people on the BOD I can get behind, but I don't necessarily get behind ALL of their thinking. For example, Larry and Charles, from my understanding, are advocates for finding a cheaper alternative to Grand Pacific. GP's contract is up this year, and Wyndham wants back in.

Grand Pacific has done an AMAZING job turning the resort around. They have brought in 8x the rental income that Wyndham did. The renovations that Grand Pacific did for the Makai Club and others (I went up to Princeville and took tours) is absolutely beautiful. And anyone who has seen the model done for KBV should be very impressed. Grand Pacific has been working amazingly hard and effectively for us. But Larry and Charles (correct me if I'm wrong) want to put this out to bid.

They may get cheaper, but frankly, I think Larry will push for Wyndham to come back in. Why do I think this? Because two years ago, Larry Walker got put onto the KBV BOD with lots of votes from Wyndham. He was then made Vice-President, pushing Trish Harrington aside as VP.

Now you're probably aware of this - Wyndham employees can't actually vote on what company will act as Manager of the resort, because that would be an overt conflict of interest. With Dani and Linda present, that would mean that only Trish, Jack, and Larry would be able to vote. Jack is not likely to vote for Wyndham and Trish won't either. That would leave Wyndham out.

But now what? Linda "resigns" from the board a couple of months ago. You think that she is no longer around the scene? She may not be on the board, but do you think Wyndham's brain is not cranking? With Linda out from the BOD itself, there can now be another person to potentially vote Wyndham back in. THAT'S their goal, I suggest. With the management contract up for voting this year, Wyndham wants to get Wyndham back in. After that, Linda could come back, or they could try to put another employee on the board next year.

Larry can say that he's independent, but frankly, I'm not sure I can trust him. And at this election, I'd like to find out how many of Wyndham's ~3300 votes (oe 3x the number of deeds currently in their possession) go to Larry.

So again, Larry, Dani, and Trish are up for re-election. You KNOW that Trish will be a reliable vote and do the right thing. Jack is a fixture until at least next year. So that's two solid votes. When Charles and I last spoke, he was a proponent of finding ways to get a greater percentage of the rental income (and potentially sales income) that Grand Pacific has raised. But Grand Pacific has done such an outstanding job (and seems to do that wherever they are - they are top notch at doing their job), that not keeping them could mean a higher percentage of much less income. I mean, would you prefer to get, say, 65% of $1,000,000 (about the amount of rent they have raised for us over the past year), or 85% of $120,000 (the amount Wyndham had raised in their last year of managing the timeshares)?

So we can't rest or lay back thinking that our work is done, and assume that we're being represented on the BOD with the best group possible.

I'm going to guess that we're not going to be able to vote Larry Walker off the board (Larry and Dani will get most of Wyndham's votes), but we really need to be diligent about who we DO get on the board. Of the three seats up for election this year, we need Trish (or someone as reliable) as well one more.

Jeff

 

[DeniseM]

I also don't want Wyndham back - they are more interested in their sales presentations than they are in managing the resort in the best interest of owners. In addition to Jeff's points above, look how KBV owners got screwed out of hotel swimming pool access when Wyndham wanted to use pool access as a sales incentive - that was more important to them than allowing all owners to have access to the pools.

I hope that all of the candidates will post here.

 

[ValChatelle44]

I am new to this site so hope I don't mess things up. I am one of the candidates for the Board and my official bio is below. I don't want to step out and declare what I might do on the Board until I have time to study our legal documents, our financials, and the interrelationships of all the "Associations" affecting KBVIOA. We just returned from Hawaii with a week at Kauai Beach Villas, Hanalei Bay Resort, Bali Hi Resort and Royal Sea Cliff on the big island and experienced some good and some not so good. When making spending decisions I firmly believe the incremental benefit from the decision has to be greater than the incremental cost and have seen instances when Boards made decisions where the cost well exceeded the benefits the members received in return. thanks Larry Geiger


Larry Geiger, CPA, Lieutenant Colonel US Army Retired, 25 Year Controller for a $400,000,000 homebuilding company, now retired. Own 3 Pahio memberships at KBV (never traded) and 10 other timeshare weeks.

I am running for the Board of KBV IOA with the hope of using my experience on other Boards of timeshare associations and governmental entities to improve the financial position of our association. I understand association legal documents having amended documents of another association and participated in drafting organizational governing documents for communities being created by my employer. I have prepared business plans for organizations varying in size from $400,000 to $400,000,000 in annual revenue.

I also understand that the success of KBV relies on KBV providing a first class experience to all its guests. I spend over 12 weeks a year in timeshare resorts and sample the product of all the major timeshare managers. I reflect on how their programs (check-in, unit amenities, layout, housekeeping, activities, recreation, check-out) impact on my enjoyment of their properties.

I appreciate your support and hope to get the opportunity use my financial, leadership, and travel experience to enhance KBV and thus the quality of your experience at your Kauai Beach Villas.

 

[DeniseM]

Welcome, Larry! Thank you for posting, and don't be a stranger.

 

[ecwinch]

While I know we live in this day and age where complex issues are poorly summarized in slogans and catch-phrases, I would encourage my fellow KBV owners to invest the time and energy to understand the actual issues facing KBV.

While some would like to paint this as a grass-roots campaign to keep Wyndham from "taking over the resort", the reality is that Wyndham already holds a sizable ownership interest in the resort (20%+). So the better question might be - how does the HOA BoD work with Wyndham to ensure the long-term success of KBV? Because unless someone has a plan to buy-out Wyndham's ownership position, the reality is that any BoD is going to have to work with Wyndham to make KBV a success.

And while some like to point out the 8x increase in rental income, the broader question is which is of greater benefit to KBV in the long run - dues paying members or rental income? Because as we witnessed during the last recession, rental income tends to evaporate during economic downturns. A period in which KBV was somewhat insulated from the impact of defaulting owners due to the presence of the foreclosure agreement. So I would encourage engaged owners to ask tough questions like:

1. On a "net revenue" basis - does a rented week generate enough revenue to cover the dues for that week? Or are we renting weeks out for less than dues (once GPR's commission is paid)?
2. Where are we on a plan to convert foreclosed weeks into dues paying weeks? What role should GPR play in that plan?
3. If the resort next door was so willing in the past to grant pool access in exchange for their use of our tennis courts, why are we now paying tens of thousands of dollars for pool access? Or is this an updated version of the debunked rumour that the KBV special assessment was used to build the pool at Bali Hai?
4. When will the fully-owned condo owners start paying an equal share of costs?

 

[DeniseM]

3. If the resort next door was so willing in the past to grant pool access in exchange for their use of our tennis courts, why are we now paying tens of thousands of dollars for pool access? Or is this an updated version of the debunked rumour that the KBV special assessment was used to build the pool at Bali Hai?

Once Wyndham started paying the hotel for pool access so they could use it as a sales incentive (blocking owners from using the pools, unless they drove up to Princeville and wasted half a day on a hard core sales presentation) why would the hotel be willing to go back to giving pool access away for free? Plus, I'm guessing that 10 times as many people use the pools, as play tennis, if not more.

***I think this pool deal is the perfect symbol of Wyndham's priorties - sales, not owners.

4. When will the fully-owned condo owners start paying an equal share of costs?

Condo owners maintain the interior of their own units. They only pay for exterior repairs and maintenance.

 

[Jeff From Salem]

While I know we live in this day and age where complex issues are poorly summarized in slogans and catch-phrases, I would encourage my fellow KBV owners to invest the time and energy to understand the actual issues facing KBV.

While some would like to paint this as a grass-roots campaign to keep Wyndham from "taking over the resort", the reality is that Wyndham already holds a sizable ownership interest in the resort (20%+). So the better question might be - how does the HOA BoD work with Wyndham to ensure the long-term success of KBV? Because unless someone has a plan to buy-out Wyndham's ownership position, the reality is that any BoD is going to have to work with Wyndham to make KBV a success.

They may own a sizable number of deeds, but having them be the management company is a conflict of interest. For example, what if I were the management company, and as a for-profit company, I'm trying to make as much profit from what I do with you as I can. And say, in this hypothetical situation, I also own 2/3rds of all the deeds, therefore I can use my deeded interest to keep voting my company in as the management company? Sure, I wouldn't be able to directly vote, but I make sure I vote members onto the board who are friendly to me and my business. I find ways, behind the scenes, to grease the wheels.

That scenario, unto itself, should make you wary. But I could further that scenario to make it even worse. Say I make sure that things are sort of mediocre enough that many just give up their deeds for nothing, because they feel that they're essentially worthless. I scoop them up, and essentially make the resort into the Me-Me-Me resort. Now that I have control and essentially own the resort, I can do with it what I want. What WAS essentially a non-profit resort, as owners bought in thinking it was going to be an economical way of vacationing with much better return for the dollar than they put in, the resort can be a pure profit endeavor for me-me-me! As a result, I know that every dollar I put into the resort is about making profit for me!

Wouldn't that make you excited??

So back to current reality, I'd much rather have the resort in the hands of many smaller-sized owners. It would provide a more stable, equitable, and responsible ownership. And individual owners are generally not in it for the money profit. They're in it for a relatively economical, fantastic vacation. Given that Wyndham has a majority of the active deeds right now, we need to be aware of their power, but we also, then, need to do what we can to not hand the management of the IOA back to Wyndham.

And it's not just the above scenario that would essentially create a monopoly, but it's that Wyndham didn't do an impressive job in their 10 years here as management company.

Jeff

 

[ecwinch]

At this point, I could care less who has the mgt contract or controls the BoD. What will make me "excited" is a plan to address the fundamental challenge of being a legacy resort - defaulting owners and managing the bad debt expense of the resort.

And we certainly should brainstorm how to address that problem. But it has to be a viable plan.

KBV is a unique location with the golf course to the north and the state/county park to the south. Within the Club Wyndham portfolio on Kauai it is the only true oceanfront resort.

If the concern is Wyndham - then we have to consider if GPR is willing to enter into a foreclosure agreement. Or some other third party. If not then the Devil we know is the default option.

Because clearly a special assessment is on the horizon. That is going to spike bad debt expense. So having a viable plan for converting foreclosures into active dues paying intervals is important.

To provide some context to the discussion, what % of the budget is allocated to bad debt expense?

 

[Jeff From Salem]

Eric, while it's important to focus on long term, legacy issues, it's important to focus on shorter term financial health, comfort and usefulness issues because we visit KBV on a regular basis. Grand Pacific Resort's raising of rental income, for example, will allow for unit upgrades, paying for the use of the pools (without an added fee for owners). Down the road, we might even be able to have an activities director so we could feel like a real resort.

 

[DeniseM]

To provide some context to the discussion, what % of the budget is allocated to bad debt expense?

I believe that is listed in the budget.

 

[TUGBrian]

love seeing owners take a more proactive interest in the management of their resort!

also best of luck to the TUGGER running for the board!

 

[ecwinch]

Per the BoD minutes:

D. Inventory and Default Analysis/Delinquency Report As of September 18, 2018 there are currently 299 whole intervals in the name of the Association. There are currently 17 intervals in the foreclosure process and 10 biennial intervals in the process to deed back.

E. Delinquency Report Year-to-date delinquency is 15.67%. Projected year-end delinquency is 12.50%. In the month of August 590 outbound phone calls were made to delinquent Kauai Beach Villa Owners.

And despite rental revenue being 8x over Wyndham:

The Board moved to approve the 2019 Operating Budget as presented by Management with a total weighted average increase to the assessment of 4.90%.

Do these facts support the potential of unit upgrades, "free" pool access (paid by our dues), an activities director, or KBV becoming a "real" resort? Without a sizable "special" assessment?

And if rental revenue is such a significant increase to our revenues ($650k last year was cited) - why the dues increase?

And since GPR is making $350k off our rental income - with no long term investment in our resort - they would seem to have less incentive in seeing our default issues resolved - as that will only take money out of their pocket.

 

[DeniseM]

The Board moved to approve the 2019 Operating Budget as presented by Management with a total weighted average increase to the assessment of 4.90%.

I would wager that this is close to the average yearly increase for Hawaii resorts - I'm not concerned about 4.9% at all.

Do these facts support the potential of unit upgrades, "free" pool access (paid by our dues), an activities director, or KBV becoming a "real" resort? Without a sizable "special" assessment?

• It is completely possible to make gradual changes with reasonable maintenance fee increases - a special assessment is not mandatory for improvements.

• We already have pool access, so it shouldn't be lumped into future cost increases. Since Wyndham set precedence by paying for pool access as a sales incentive, and would undoubtable be willing to do so again, I don't see "free" access coming back. The current board has to compete with Wyndham for pool access - that is on Wyndham.

• I for one, have zero interest in an activity director, unless the owners who want activities pay for it.

• KBV's strength is that it is a quiet ocean front resort - a lot of people like that, especially adults traveling without children. I would like to see gradual improvements, but I think it's unrealistic and undesirable to expect it to become a Marriott or Westin.

• It is the BOD's fiscul duty to improve the resort, at a cost that is palatable to owners, and it's the board's responsibility to implement a plan to recover and sell deeds that are in default. I believe that is our board's goal - I don't think it's Wyndham's goal. Wyndham's primary goal is to sell points. If you don't believe that, attend a KBV sales presentation on your next trip.

 

[ecwinch]

I would wager that this is close to the average yearly increase for Hawaii resorts - I'm not concerned about 4.9% at all.

Did most resorts receive an increased $650k in rental revenue in 2018? If not, why didnt that additional revenue deliver dues increase below the average?

And your position about blaming Wyndham for the pool situation is speculative. Wyndham did not terminate the sharing agreement with the resort, the resort was acquired and the resort terminated the agreement because - as you pointed out earlier - it was not beneficial to the resort.

 

[DeniseM]

It's not speculative - and that's not what happened. I've been an owner for a long time:

-First owners had free access to the hotel pools, and hotel guest could use the timeshare tennis courts.
-Then, the reciprocal agreement ended, but all owners could still pay to use the hotel pools. Not ideal, but better than no access at all.
-Then, Wyndham came along and eliminated that by purchasing pool access for sales presentations only.

So instead of negotiating pool access for everyone, Wyndham negotiated a deal for themselves.

IMNSHO - Wyndham will always put sales before owners. YMMV

 

[DeniseM]

Did most resorts receive an increased $650k in rental revenue in 2018? If not, why didnt that additional revenue deliver dues increase below the average?

That's hard to know without an indepth review of the budget - but the resort is aging and maintenance isn't getting any cheaper, so I have zero expectations of maintenance fees decreasing. I know that maintenance fees can become too high for some owners, and with an aging resort, with an aging ownership population, on a fixed income, even people who want to keep their ownership, simply may not be able to. However this is not unique to KBV - every mid-range resort in Hawaii is in the same boat.

 

[ValChatelle44]

At this point, I could care less who has the mgt contract or controls the BoD. What will make me "excited" is a plan to address the fundamental challenge of being a legacy resort - defaulting owners and $500,000managing the bad debt expense of the resort.

And we certainly should brainstorm how to address that problem. But it has to be a viable plan.

KBV is a unique location with the golf course to the north and the state/county park to the south. Within the Club Wyndham portfolio on Kauai it is the only true oceanfront resort.

If the concern is Wyndham - then we have to consider if GPR is willing to enter into a foreclosure agreement. Or some other third party. If not then the Devil we know is the default option.

Because clearly a special assessment is on the horizon. That is going to spike bad debt expense. So having a viable plan for converting foreclosures into active dues paying intervals is important.

To provide some context to the discussion, what % of the budget is allocated to bad debt expense?

TOOT TOOT TOOT, that is me blowing my own horn. Those of us on this site have lots of questions and a lot of them are financial. Who is our independent CPA digging into our budgets and better yet our historical financials to evaluate what is going on? To answer these questions we need a board member with the experience to ask the right questions and make sure we don't get bull****and verify the answer in the financials. No one would be better qualified to do that than a CPA with an additional 28 years accounting controller experience. Vote Larry Geiger to the KBVIOA Board. I have no preconceived opinions other than my goal is for KBVIOA to be the vacation condo in Hawaii that I would own if I had the $500,000 to own on outright. Mahalo

 

[DeniseM]

Hi Larry - Thanks for posting - we appreciate your input!

 

[leehad50]

Hello, we bought at KVB in 2000 after staying in 1999 and taking advantage of a one-year offer. We own an every year, oceanfront, 1 bedroom, two bath unit. We love the property and return every year. We recently purchased a similar every-other-year unit. Sadly, I paid little attention to the BOD makeup until two years ago. From a historical point, I can say that our ocean-front unit was a little run down when Wyndham took over management. I hoped for improvements with Wyndham involvement. I saw very little improvement and in fact, tried for years to get the door fixed in G5 with no success. Now that Grand Pacific is managing the property, I have seen improvements. When we purchased the additional every-other-year week, we ran afoul of the rules for making a reservation. It was a frustrating experience and I thought the rule situation was arbitrary. However, Clinton, the GM at KBV helped me make a satisfactory arrangement. Murphy's Law inspired a new issue but GPX also resolved that problem. All in all, we are quite happy with Grand Pacific.

During the last twenty years, we've been more than annoyed with sales presentations by Wyndham. In particular, two people, Carlos and another woman (can't remember her name) were very rude and in the end, caustic when we didn't convert to Wyndham points. Carlos, a salesman at Princeville told us never to come back. And believe me, we didn't want to suffer his abuse again. At that point, we began refusing to go to the sales presentations. It simply wasn't worth the harassment.

I now read the Yahoo emails and occasionally visit this forum. There are lots of opinions and accusations thrown around, but I see very few facts. One develops a feeling for the words and statements that can be trusted but they are just feelings. Our experience with Wyndham causes me to distrust their motives. I would not want to see Wyndham manage the resort again.

I can see that foreclosures are a problem and bad debt is never good. The timeshare world is changing. Radio ads blanket the airways promising to help people get rid of their timeshare ownership. It is possible that the old perspectives may need to change.

I wish that the BOD would be more transparent, clearly communicate our financial and management problems, potential solutions, and enacted solutions to the owners. My personal bias, and I'm willing t admit that it is a bias, is to steer us away from Wyndham management and control by Wyndham employees. However, as stated by someone above, a 20% Wyndham ownership assures their involvement whether we like it or not. So what I hope for now are candidates and elected officers that will be honest and that will faithfully report our problems, potential solutions, and the results of implemented plans.

 

[ecwinch]

That's hard to know without an indepth review of the budget - but the resort is aging and maintenance isn't getting any cheaper, so I have zero expectations of maintenance fees decreasing. I know that maintenance fees can become too high for some owners, and with an aging resort, with an aging ownership population, on a fixed income, even people who want to keep their ownership, simply may not be able to. However this is not unique to KBV - every mid-range resort in Hawaii is in the same boat.

Yes, it is hard to know when you only know with certainty the outcome and then speculate on the "why".

And here we know with certainty that we received a $650k revenue increase, and have speculated that the dues increase is likely in-line with similar resorts. Similar resorts that by definition are aging and facing increased maintenance costs, and I would speculate did not get a $650k increase in revenue.

And I could just as easily speculate that a BoD member - who when faced with the knowledge that Wyndham was going to force them out - engineered their removal to ensure her 10+ years of board membership (and free trips to Hawaii) could continue. And did so without fully considering the implications that act would have on the budget when the foreclosure agreement was cancelled. And further speculate that the lack of activity over the past 2+ years on getting a new agreement in place is a violation of their fiduciary responsibility.

Because when focusing on the what and not the why, is it safe to assume that in that 2+ year period, 299 intervals (or 5.3% of the IOA) are not included in budget? Does it stand to reason that is part of why are dues went up 5% despite the revenue windfall?

And given that we have 15.67% of owners delinquent (or 833 intervals) - what does that mean for the future?

I for one, would like to hear some candidates tell me how they are going to fix that problem - and not ask me to rely on their "hope" to fix that. Because given the size of the problem today - and risk for tomorrow - that is far more pressing.

 

[ecwinch]

During the last twenty years, we've been more than annoyed with sales presentations by Wyndham. In particular, two people, Carlos and another woman (can't remember her name) were very rude and in the end, caustic when we didn't convert to Wyndham points. Carlos, a salesman at Princeville told us never to come back. And believe me, we didn't want to suffer his abuse again. At that point, we began refusing to go to the sales presentations. It simply wasn't worth the harassment.

Was he the one who was the former professional polo player?

 

[LindaCPA]

As Charles Twardzicki is taking Linda Kolstad's seat, that seat (and Charles) will be on the ballot for next year's election (along with Jack Goodstein's seat). Every other year - three seats, two seats.

I am wondering if this statement is correct? I sit on a Board for an association where if someone steps down, mid-term, the replacement serves until the next election, at which time the Board seat is opened for election to be filled for the remaining term of the person replaced. In other words, Charles would serve as appointed until this year's 2019 election and then whomever fills this seat at this 2019 election will only serve until next year 2020 when Linda's seat originally comes up for election. I get the whole "continuity" concern, but without something like my description in place, someone can be voted in at the election, step down the next day, and the remaining Board members can choose a replacement that will sit for the next three years. LINDA

 

[LindaCPA]

Larry Geiger - thank you for your post regarding your interest in serving on the KBV Board. I too am a CPA and have an "auditor's" mindset so I am wondering if you have read the bylaws and can answer my question immediately above regarding mid-term elections and/or can provide me with your opinion on such? Thank you LINDA