ANNUAL MEETING NOTICE

FOR THE

ASSOCIATION OF APARTMENT OWNERS OF KALANIKAI

The 2020 Annual Meeting of the Association of Apartment Owners of

KALANIKAI is scheduled to be held on-site, on Saturday, February 15, 2020

at 9:00 a.m. (Registration begins at 8:30 a.m.).

At least two (2) Directors will be elected for the ensuing year. Pursuant to the law, any homeowner wishing to solicit proxies at the Association's expense shall submit a statement "not to exceed one single-sided 8-1/2" x 11" page,

indicating the owner's qualification to serve on the Board or reasons for wanting to receive

proxies" within seven (7) days following the posting of this notice. Such requests and written statements must be received at the office of the Managing Agent, Touchstone Properties, Ltd., Dole Office Building, 680 Iwilei Road, Suite 777, Honolulu, Hawaii, 96817, or provided to the President via electronic submission no later than January 27, 2020. You may submit a letter of nomination to the managing agent or Board President by electronic submission, but those received after January 27, 2020 will not have the ability to receive proxies. You will however, be nominated on the ballot. You will receive more detailed information in the next few days. Watch your email or

doorstep for it.

Please call the Managing Agent, Cindy Kuhlman Low, 808-566-4100 or the Board President, Bruce Gainer, 541-270-0734, if you have any questions.

For the Board of Directors Cindy Kuhlman Low, Managing Agent, TOUCHSTONE PROPERTIES, LTD. Bruce Gainer, Board President

Date of this Notice: January 15, 2020

PROXY FORM EXPLANATION SHEET

1. THE BOARD OF DIRECTORS AS A WHOLE, TO BE VOTED ON THE BASIS OF

THE PREFERENCE OF A MAJORITY OF THE BOARD PRESENT AT THE

MEETING.

If marked, this gives your proxy (vote) to the Board of Directors as a whole based on a vote of the board members present at the meeting. An example would be: if 3 members of a total of 5 board members were present at the meeting and 2 of the 3 voted for a particular motion, your vote will be for that motion.

2. THE DIRECTORS PRESENT AT THE MEETING AND THE VOTE TO BE SHARED

WITH EACH BOARD MEMBER RECEIVING AN EQUAL PERCENTAGE.

If marked, this gives an equal percentage of your vote to each of the directors attending the meeting. Using the above example: 2 / 3 of your vote will be for the motion, and 1 / 3 will be against it.

3. THE INDIVIDUAL WHOSE NAME IS PRINTED ON THIS LINE.

If marked, this gives your vote to an individual (owner or non-owner of the association) that you have designated. He (or she) casts your vote. You may direct your proxy holder how to vote. The direction must be in writing, and can be hand written on the proxy form. This selection provides the greatest assurance that your voice will be heard, even though you cannot be physically present at the meeting.

4. NO ONE; FOR QUORUM PURPOSES ONLY.

If marked, your proxy will be issued to establish a quorum only. This option allows the meeting to be held and regular business conducted. Votes taken that require a majority of members present can be held. Votes that require total individual votes to total more than 65% may not be able to be taken. To assure that all business can be conducted, you should select one of the first three options. It is important to at least select this option , otherwise the association may incur expenses needlessly.

PLEASE TURN IN YOUR PROXY EVEN THOUGH YOU PLAN TO

ATTEND THE ANNUAL MEETING. YOU MAY REVOKE YOUR PROXY

WHEN YOU REGISTER FOR THE MEETING.

ASSOCIATION OF APARTMENT OWNERS OF KALANIKAI

PROXY

Please check ONLY ONE of the following boxes. If no proxy holder is designated, or if no box is checked, or

if more than one box is checked, the proxy shall be given to the Board of Directors as a whole. If you are not

present at the meeting, this proxy designates your proxy holder as your substitute for any proxies assigned to

you unless you designate another substitute in writing subsequent to this proxy.

The undersigned, being the owner(s) of the apartment(s) shown below, does hereby constitute and appoint

The Board as a whole, to be voted on the basis of the preference of a majority of the Directors present at

the meeting, or

The Directors present at the meeting and the vote to be shared with each Director receiving an equal

percentage, or

___________________________________ the individual whose name is printed on this line (to be used

for quorum if absent and if the individual has not assigned his proxy)

as the undersigned's attorney and agent, with full power of substitution, to act in the undersigned's name, place, and

stead, and to vote the undersigned's proxy at the February 15, 2020 annual Association meeting to be held on site, and

at any and all adjournments thereof, for the transaction of any and all business that may properly come before the

meeting, including the election or re-election of directors, according to the proportional interest in the common

elements that the undersigned would be entitled to vote if then personally present, hereby revoking any proxy or

proxies heretofore given, and ratifying and confirming all that said attorney and agent may do by virtue hereof, or

For quorum purposes only.

This proxy is valid only for the meeting cited above and any and all adjournments thereof. If I/we attend the meeting in

person, I/we may request a ballot to vote in person thereby voiding this proxy (if not previously exercised). Receipt of

notice of said meeting is hereby acknowledged.

PRINTED NAME(S) OF OWNER(S) [REQUIRED BY LAW]: SIGNATURE(S) OF OWNER(S) [REQUIRED BY LAW]:

___________________________________ ________________________________

___________________________________ ________________________________

UNIT NO(S): ______________________________ DATE SIGNED: __________________________________________ [REQUIRED BY LAW] [REQUIRED BY LAW] Do Not Post Date

Sign and print your name as it appears in the Association's records, and provide your unit number(s) and the date. Persons signing in a representative capacity (personal representatives. executors, administrators, trustees, guardians, conservators, partners, members of a member-managed LLC, managers of a manager-managed LLC, and corporate officers) are to add their titles and, if requested, are to submit evidence of their authority to act in that capacity.

For this proxy to be valid, the proxy must be received by the Association's Managing Agent or Secretary/President no later

than 4:30 p.m., on February 13, 2020. Please return this written consent to: Touchstone Properties, Ltd, c/o Cindy Kuhlman

Low, 680 Iwilei Road, Suite 777, Honolulu, Hawaii 96817. You may also fax this proxy to: (808) 556-4110 or scan and e-mail

this proxy to: Cindy Kuhlman Low at: cindy@touchstoneproperties-hawaii.com and/or Board President Bruce Gainer at:

president@kalanikaicondos.com

IF NOT PROVIDED PRIOR TO OR TOGETHER WITH THE NOTICE OF MEETING, I WISH TO OBTAIN A COPY OF THE ANNUAL AUDIT REPORT IF ACCOMPLISHED.

Date Received, _________________ by Managing Agent/Board President

Note:

ASSOCIATION OF APARTMENT OWNERS OF KALANIKAI

PROXY

Please check ONLY ONE of the following boxes. If no proxy holder is designated, or if no box is checked, or

if more than one box is checked, the proxy shall be given to the Board of Directors as a whole. If you are not

present at the meeting, this proxy designates your proxy holder as your substitute for any proxies assigned to

you unless you designate another substitute in writing subsequent to this proxy.

The undersigned, being the owner(s) of the apartment(s) shown below, does hereby constitute and appoint

The Board as a whole, to be voted on the basis of the preference of a majority of the Directors present at

the meeting, or

The Directors present at the meeting and the vote to be shared with each Director receiving an equal

percentage, or

___________________________________ the individual whose name is printed on this line (to be used

for quorum if absent and if the individual has not assigned his proxy)

as the undersigned's attorney and agent, with full power of substitution, to act in the undersigned's name, place, and

stead, and to vote the undersigned's proxy at the February 15, 2020 annual Association meeting to be held on site, and

at any and all adjournments thereof, for the transaction of any and all business that may properly come before the

meeting, including the election or re-election of directors, according to the proportional interest in the common

elements that the undersigned would be entitled to vote if then personally present, hereby revoking any proxy or

proxies heretofore given, and ratifying and confirming all that said attorney and agent may do by virtue hereof, or

For quorum purposes only.

This proxy is valid only for the meeting cited above and any and all adjournments thereof. If I/we attend the meeting in

person, I/we may request a ballot to vote in person thereby voiding this proxy (if not previously exercised). Receipt of

notice of said meeting is hereby acknowledged.

PRINTED NAME(S) OF OWNER(S) [REQUIRED BY LAW]: SIGNATURE(S) OF OWNER(S) [REQUIRED BY LAW]:

___________________________________ ________________________________

___________________________________ ________________________________

UNIT NO(S): ______________________________ DATE SIGNED: __________________________________________ [REQUIRED BY LAW] [REQUIRED BY LAW] Do Not Post Date

Sign and print your name as it appears in the Association's records, and provide your unit number(s) and the date. Persons signing in a representative capacity (personal representatives. executors, administrators, trustees, guardians, conservators, partners, members of a member-managed LLC, managers of a manager-managed LLC, and corporate officers) are to add their titles and, if requested, are to submit evidence of their authority to act in that capacity.

For this proxy to be valid, the proxy must be received by the Association's Managing Agent or Secretary/President no later

than 4:30 p.m., on February 13, 2020. Please return this written consent to: Touchstone Properties, Ltd, c/o Cindy Kuhlman

Low, 680 Iwilei Road, Suite 777, Honolulu, Hawaii 96817. You may also fax this proxy to: (808) 556-4110 or scan and e-mail

this proxy to: Cindy Kuhlman Low at: cindy@touchstoneproperties-hawaii.com and/or Board President Bruce Gainer at:

president@kalanikaicondos.com

IF NOT PROVIDED PRIOR TO OR TOGETHER WITH THE NOTICE OF MEETING, I WISH TO OBTAIN A COPY OF THE ANNUAL AUDIT REPORT IF ACCOMPLISHED.

Date Received, _________________ by Managing Agent/Board President

Note:

KALANIKAI AOAO ANNUAL MEETING –

February 16, 2019 – 9:12 A.M. at Kalanikai

1. ROLL CALL- CALL TO ORDER - Bruce Gainer, Roma Johnson, Jessica Haley 2. DETERMINATION OF A QUORUM: 52.44% quorum established. 3. PROOF OF NOTICE OF MEETING: Owner’s Notice, January 11, 2019. 4. INTRODUCTION OF BOARD MEMBERS AND GUESTS: Roma Johnson, Jessica Haley, Alice

Schack (2018), Bruce Gainer, board members present, Sheryl Weinstein, excused board member, Bernice Barnett is acting recording secretary, Jeremy Montanez, RM, Cindy Kuhlman-Low, from Touchstone, Tad Nottage from Aloha Insurance.

5. CONDUCT OF BUSINESS: Roberts Rules of Order (see Rules below). No objection: Rules adopted. This meeting is being recorded.

6. APPROVAL OF MINUTES OF 2018 ANNUAL MEETING: No objections/ to waiving reading of the minutes. No objections or modifications to the minutes. Minutes approved as presented. Will be posted within 60 days from today. President Bruce Gainer made a request to allow Tad Nottage, Aloha Insurance to present Insurance information to owners out of agenda order. No objection. Presentation by Tad Nottage regarding the AOAO’s insurance. Tad explained our condominium complex property value is established and how insurance premiums are ascertained. 1. General Liability – slip and fall coverage. The limits are one million dollars per occurrence or two million dollars per year. 2. Crime Policy - to cover employee dishonestly. The State requires this coverage. 3. Directors and Board members liability policy limit is one million dollars. 4. Umbrella liability has a five million dollar limit. 6. Workers Comp policy. 7. Temporary Disability Insurance required by State law. 8. Flood Insurance. There is a required flood policy for each building. This is required based on the real property zone that Kalanikai is located in. The information above is overview of the AOAO insurance policies. Tad Nottage also answered owner questions about individual homeowners’ policies.

7. REPORTS OF OFFICERS:

A. President's Report:

Electricity Consumption: Bruce reports that last September there was a huge increase in the bill. He believes it may have been caused by HELCO billing issue. However, he is having difficulty accessing information regarding the billing from HELCO. Bruce explained that the AOAO has done most of what it is able to do to reduce common area electrical usage. It is now up to owners to reduce their individual usage. The association has LED lights which it will provide to owners at no cost. If owners are not using LED lights, please do so. Jessica Haley, unit 106 stated that our rates will go up if we don’t conserve energy. Owner Comments: There was a vigorous exchange of ideas regarding ways to reduce electrical consumption. The ideas included using clear insulation tape on our louvered window to better insulate them, installing a card system in our units which shuts off the unit’s lights and air conditioners when people leave the unit. It was also suggested that people install tankless water heaters.

An owner asked why we don’t produce enough so that we pay nothing to HELCO. Bruce explained how our solar system works. We must buy electricity during non-daylight hours. We hope we produce enough electricity during the day to balance out the use. We don’t always accomplish this goal. Nick Dodson, unit 211, pointed out that we don’t own the solar panels, the electricity we use from the solar panels is still an expense to us. We pay the company that installed our solar panels for the electricity we use. Their rate is less than the rate we pay HELCO. But it is a cost to owners.

There was a discussion about water heaters and leaks. Sharyn Holliday, unit 116, talked about water heaters and the importance of having a newer non-leaking water heater. She asked if we could have yearly inspections and require the water heaters in units be no older than 7 years. Don Koepnick, unit 306 brought up individual meters and asked about the cost and possibility of installing them at Kalanikai. It was pointed out that the expense to do this has been calculated and it is prohibitive. Carol Souther, unit 121 suggested that we have an inspection of water heaters. Monica Gelien, unit 208 stated that she just bought a 10-year water heater. She is concerned about having to replace it prior to its expiration date. Sharyn Holliday, unit 116 stated that PSI says water heaters only last 7 years. Bruce Gainer, unit 209 stated that the tanks on 7 years or 10 years are the same tanks. Maria Lopez, unit 218 further discussed using systems to stop electricity by installing a cut off card. Can the Board require tankless water heaters? Bernice Barnett, unit 209 was against this rule. John Bauer, unit 216 stated inspections will not detect leaks and are not useful. He pointed out that leaks can spring up at any time including directly after an inspection. Don Koepnick , unit 306 discussed the benefits of tankless water heaters. They are more economical. However, the tankless can also leak.

Triangle lot development President Bruce Gainer, unit 209 reported about the development which is happening on property adjacent and near Kalanikai. The board has gotten a good response from its contractors and owners. He also discussed the tri angle lot which borders Kalanikai and Henry Street. We have verbal agreements with the owners to clear the tri angle lot and maintain it. Bruce let the owners know they should expect a change in the look next door. Sharon asks if they will allow extra parking? Bruce stated he hasn’t asked yet. He will wait to ask after we have established a good relationship. Kalanikai will provide liability insurance. Robin O’Hara unit 114 asked about a tree that was cut down which had an effect on her unit. She asked that we plant more bushes. There was discussion about whether the tree was on the developer’s property? If this happened on other owner’s land and we have no control over them.

B. Treasurer's Report: TOTAL CASH ACCOUNT: $ 14,766.41 RESERVES TOTAL: $144,492.65 RECEIVABLES FROM OWNERS: $180,797.47 ASSETS TOTAL: $340,056,53 LIABILITIES: $37,657.50 TOTAL NET WORTH: $302,499.03

Owner’s Comments: Don Koepnick, unit 306 asked questions about our collection’s entry. Bruce stated the AOAO has only a couple of units which are a collection problem. One should be handled within two weeks. Don Koepnick pointed out that the way the management company listed the receivables was concerning. Bruce agreed the accounting method was misleading.

B. AUDITOR'S REPORT:

We don’t have our auditor’s report yet. The board has contracted for an audit. But there is a problem finding auditors.

8. ELECTION OF (3) DIRECTORS: The AOAO election requires two election inspectors. Don Koepnick, unit 306 and Terry Weber, unit 113 were selected as election inspectors.

a. NOMINATIONS: Bruce Gainer & Sheryl Weinstein have submitted nomination request forms. There was no objection, therefore Bruce Gainer, unit 209 and Sheryl Weinstein, S204 were nominated.

b. NOMINATIONS from the floor: Nominated: Sharyn Holliday unit 116, Maria Lopez, 218 nominated Dana Lewis, unit 314. Seconded by Ed Gibbons, unit 317 seconded the motion. Ed Gibbons, unit 317 was also nominated. Bruce Gainer seconded.

c. VOTING: By Secret ballot.

9. VOTING: Election results: Certificate of Elected: Bruce Gainer 55.28% Sheryl Weinstein, 46.505% 2021 Ed Gibbons 32.61%

10. QUORUM UPDATE: 65.965%

11. UNFINISHED BUSINESS: Discussion about the three issues presented at this meeting regarding an Owner’s survey (see attached). The survey items were discussed by owners before they voted. Smoking Rule: Don Koepnick, unit 306 noted that smoke drifts outside from units and into other units. Carol Souther, unit 121 doesn’t want any smoking station to be located in the back of our cement buildings. Parking Stall Rental: Sharyn Holliday, unit 116 asked how long we have been renting three visitor’s stalls. Maria Lopez, unit 218 stated the rentals started about four years ago. Robin O’Hara asked how often our remaining visitor stalls are full. Bruce Gainer, unit 209 stated we haven’t had issues with having no stalls for visitors to use. Bill Santos asked how long a visitor parking in a stall can park? President Bruce Gainer, unit 209 explained the visitor parking rules which provide for overnight visitor parking and multiple overnight parking with a permit. The permit can be obtained from the Resident Manager. The survey was collected and votes tallied by Director Jessica Haley. Reserve Contribution for Solar Purchase: President Bruce Gainer, unit 209, opened the discussion about prioritizing conributions to our reserve account to dedicate funds to allow the association to buy the solar voltaic system when our contract to utilize power through our PPA expires. Bruce Gainer, unit 209, explained we could let the contractor remove them at that time. But the system will continue to produce power for years after the contract expires. While it’s unknown how much the contractor would sell them for, they would be worth little on the market at that time. Bruce Gainer stated we could dedicate a specific amount to buying the system in our reserves. Director Jessica Haley, unit 106, stated the solar reserve dedication was just a guideline for the saving account and could be accessed if there were a need for the association to divert the funds. Bernice Barnett, unit 209, stated this designation of funds would comply with the Hawaiian law requiring twenty-year planning by associations. Robin O’Hara, unit 114, suggested we keep renting so the company would continue to maintain the system. It was pointed out that the association would no longer pay per kilowatt hour if we were to buy the system. Don Koepnick, unit 306, suggested option two seemed reasonable.

12. NEW BUSINESS:

a. Resolution on Assessments: If we have excess funds needing rollover to 2019 ledger in our accounts per IRS statues at year end. No objections to adopting resolution to avoid paying taxes on this amount.

13. OWNER’S FORUM: Owners had no additional subjects or issues to bring.

ADJOURNMENT at 11:48am by Bruce Gainer, President.