Aloha,
Russell Ackoff (
https://en.wikipedia.org/wiki/Russell_L._Ackoff ) defined a “mess” as a complex system of interacting problems (paraphrasing). KBV’s situation is that type of mess.
Cost estimating for large multi-year projects has many sources of uncertainty. The following examples are not a complete list. When technology development is required (e.g. Polaris missile submarine and Apollo moon landing programs), cost estimates are all but worthless. When the technology is mature and the statement of work (SOW) is well defined (e.g. new building on an already permitted site with utilities installed, costs can be estimated with relatively high confidence. The SOW for KBV’s renovation has a substantial amount of uncertainty. The schedule availability and cost of contractors on Kauai has a substantial amount of uncertainty. Delays coupled with inflation creates cost estimate uncertainty. The technology to do KBV remediation work is probably mature and reliable. Funding sources (us owners & potential lenders) have substantial uncertainty. Common practice for handling budget uncertainties is to pad individual components (tasks / sub-projects) of the SOW. This frequently fails in execution because potential savings from positive cost deviations at the component level are often consumed at that component level and not passed back to the larger project to address significant cost overruns at other components.
Funding KBV’s remediation is complex and rife with uncertainty. The information shared to date does not address collection issues and seems to assume that all owners will pay their allocated share. What happens when some/many/most individual owners decided to just not pay?
Complicating all of the above is Wyndham’s history with both timeshare and whole unit owners. I have no data but suspect that trust and confidence are somewhere between slim and none.
In any event, the information presented within the most recent letter fails to address many issues. The presentation shared at a previous AOAO board meeting has not been posted yet as promised (
https://tugbbs.com/forums/threads/kbv-news-letter-the-resort-is-in-bad-shape.338006/post-2854880 ). We haven’t decided what we will do. Our willingness to participate in the costs hinges heavily on having confidence that there is a realistic plan that addresses all foreseeable contingencies as well as potential unforeseeable ones and a project manager that is capable of executing that plan within budgeted cost and schedule in the face of adverse developments. In the Project Management Institute’s (
https://www.pmi.org/ ) Body of Knowledge (BOK) unknown unknowns are a real project management challenge (
https://www.pmi.org/learning/library/characterizing-unknown-unknowns-6077 https://www.pmi.org/chapters/luxembourg/chapter-news/pm-fair-2020# https://www.pmi.org/learning/library/living-with-uncertainty-in-projects-10133 )
We’re travelling now and I’m not going to reread the governing documents until after we return home, but I believe that a special assessment above a certain percentage requires a vote of the owners. It’s not clear to me that enough independent owners will approve if Wyndham does not already possess a sufficient majority of the IOA on its own.
Jack
expressoprod.com
