winter 2009 views from the cliffs newsletter

12
V V V i i i e e e w w w s s s F F F r r r o o o m m m T T T h h h e e e C C C l l l i i i f f f f f f s s s T T T h h h e e e N N N e e e w w w s s s l l l e e e t t t t t t e e e r r r o o o f f f t t t h h h e e e C C C l l l i i i f f f f f f s s s a a a t t t P P P r r i i i n n n c c c e e e v v v i i i l l l l l l e e e W W W i i i n n n t t t e e e r r r 2 2 2 0 0 0 0 0 0 9 9 9 The purpose of the report is to illuminate aspects of the situation and condition of The Cliffs, which should be interesting to those who receive it. Questions and suggestions should be sent or called to AOAO President, Don Jacobs, (9046 E. Colorado Circle, Denver, CO 80231; (303-750-3214) [email protected]; CCIOA President Gus Daal, 4444 Delaney Drive, Burlington, Ontario, Canada, L7L 5J2 (905-637-8083) [email protected]; CRVOA President, Chris Stawski, 111 E. Wisconsin Avenue, Suite 1750, Milwaukee, WI 53202 (414-276-8202) [email protected]. Comments on the Newsletter should be sent to the Editor, Lou Genett, 1849 Oakmont Drive, Denver, NC 28037 (704-560-6338) [email protected]. G G G e e e n n n e e e r r r a a a l l l M M M a a a n n n a a a g g g e e e r r r s s s R R R E E E P P P O O O R R R T T T K K K i i i m m m o o o M M M . . . K K K e e e a a a w w w e e e Pool Renovation Continues loha! Our pool project continues to progress well although typical with Hawaiian winters, we have seen several days of heavy showers that delayed construction for about a week. Fortunately, within the past 2 weeks the weather has been beautiful and the crew has caught up as a result. The main pool has been shotcreted (similar to gunnite), the water feature, keiki pool and upper pool have all been excavated. The keiki pool and upper pool will be steeled this week and poured next week. The water feature will be done at a later date prior to pouring the pool deck. The synthetic rock work is arriving by container next week and the installation of that material will begin shortly thereafter. We are still on schedule for a mid February finish. The landscaping plans for the pool have been finalized and we are excited about the lush tropical environment that will be created with several different varieties of palm trees, Heliconias and Hawaiian Tree ferns. Included in this project is the upgrading of our bathrooms in the Recreation Building to comply with the Americans with Disabilities Act. This project will begin next week and will make these facilities wheelchair accessible. In addition, we will install new ceramic tile and bathroom fixtures. Website Updates We have upgraded our website with the addition of a feature called TSW Net which will allow owners to view their accounts in real time. Credit or debit card payments can be made directly online and credited to your account. We encourage you to take advantage of this new system which reduces our overall cost of processing transactions as there is no delay in posting payments which prevented you from making reservations in the past. Within the near future we hope to have the ability for multiple week owners to make one payment for all of their weeks in addition to the use of e-Checks. Unit Renovations Complete for 2008 We have completed renovations of all of the CCIOA units is Buildings 3 and 8. In addition, the remaining units for CRVOA in buildings 1, 2 and 7. The majority of the feedbacks we have gotten from owners and guests have been very positive. There were a few suggestions from owners that will be incorporated into the next phase. Those units are in Buildings 7 and 9 and have been scheduled for September of 2009. Concerns with the Economy We have all felt the effects of the downturn in our economy, especially in the financial markets. We truly live in a global economy as countries like China and Indonesia have seen their factory orders drop significantly from their biggest customer the United States. We see a steady stream of news of the latest company to lay off workers as businesses struggle to stay afloat with reduced or no credit lines. Closer to home we have noticed a dramatic increase in the number of “no shows” for confirmed reservations. People all over the country are economizing, downsizing and cancelling their annual vacations. If you have confirmed reservations for 2009 and know that you will not be coming please let us know so we can make adjustments in our staffing thereby reducing the overall costs of operating your resort. Here’s wishing you a very Happy and safe Holiday Season!! Mele Kalikimaka and Hauoli Makahiki Hou!! A

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Page 1: Winter 2009 Views From The Cliffs newsletter

VVViiieeewwwsss FFFrrrooommm TTThhheee CCCllliiiffffffsss TTThhheee NNNeeewwwsssllleeetttttteeerrr ooofff ttthhheee CCCllliiiffffffsss aaattt PPPrrriiinnnccceeevvviiilllllleee WWWiiinnnttteeerrr 222000000999 The purpose of the report is to illuminate aspects of the situation and condition of The Cliffs, which should be interesting to those who receive it. Questions and suggestions should be sent or called to AOAO President, Don Jacobs, (9046 E. Colorado Circle, Denver, CO 80231; (303-750-3214) [email protected]; CCIOA President Gus Daal, 4444 Delaney Drive, Burlington, Ontario, Canada, L7L 5J2 (905-637-8083) [email protected]; CRVOA President, Chris Stawski, 111 E. Wisconsin Avenue, Suite 1750, Milwaukee, WI 53202 (414-276-8202) [email protected]. Comments on the Newsletter should be sent to the Editor, Lou Genett, 1849 Oakmont Drive, Denver, NC 28037 (704-560-6338) [email protected].

GGGeeennneeerrraaalll MMMaaannnaaagggeeerrr’’’sss RRREEEPPPOOORRRTTT KKKiiimmmooo MMM... KKKeeeaaawwweee

Pool Renovation Continues

loha! Our pool project continues to progress well although typical with Hawaiian winters, we have seen several days of heavy showers that delayed construction for about a week. Fortunately, within the past 2 weeks the weather has been beautiful and the crew has caught up as a result. The main pool has been shotcreted

(similar to gunnite), the water feature, keiki pool and upper pool have all been excavated. The keiki pool and upper pool will be steeled this week and poured next week. The water feature will be done at a later date prior to pouring the pool deck. The synthetic rock work is arriving by container next week and the installation of that material will begin shortly thereafter. We are still on schedule for a mid February finish. The landscaping plans for the pool have been finalized and we are excited about the lush tropical environment that will be created with several different varieties of palm trees, Heliconias and Hawaiian Tree ferns. Included in this project is the upgrading of our bathrooms in the Recreation Building to comply with the Americans with Disabilities Act. This project will begin next week and will make these facilities wheelchair accessible. In addition, we will install new ceramic tile and bathroom fixtures.

Website Updates We have upgraded our website with the addition of a feature called TSW Net which will allow owners to view their accounts in real time. Credit or debit card payments can be made directly online and credited to your account. We encourage you to take advantage of this new system which reduces our overall cost of processing transactions as there is no delay in posting payments which prevented you from making reservations in the past. Within the near future we hope to have the ability for multiple week owners to make one payment for all of their weeks in addition to the use of e-Checks.

Unit Renovations Complete for 2008 We have completed renovations of all of the CCIOA units is Buildings 3 and 8. In addition, the remaining units for CRVOA in buildings 1, 2 and 7. The majority of the feedbacks we have gotten from owners and guests have been very positive. There were a few suggestions from owners that will be incorporated into the next phase. Those units are in Buildings 7 and 9 and have been scheduled for September of 2009.

Concerns with the Economy We have all felt the effects of the downturn in our economy, especially in the financial markets. We truly live in a global economy as countries like China and Indonesia have seen their factory orders drop significantly from their biggest customer the United States. We see a steady stream of news of the latest company to lay off workers as businesses struggle to stay afloat with reduced or no credit lines. Closer to home we have noticed a dramatic increase in the number of “no shows” for confirmed reservations. People all over the country are economizing, downsizing and cancelling their annual vacations. If you have confirmed reservations for 2009 and know that you will not be coming please let us know so we can make adjustments in our staffing thereby reducing the overall costs of operating your resort. Here’s wishing you a very Happy and safe Holiday Season!! Mele Kalikimaka and Hauoli Makahiki Hou!!

A

Page 2: Winter 2009 Views From The Cliffs newsletter

Page 2

CCLLIIFFFFSS CCLLUUBB

RREEPPOORRTT GGuuss DDaaaall,, PPrreessiiddeenntt

i All - The CCIOA board completed its regular October meeting were a number of items were addressed. One of the most important financial decisions was the approval of our 2009 budget. We are facing a maintenance fee increase of 5.4 % over the current year.

As stated by others in this news letter the new pool is under construction and weather permitting we are looking for a completion by late January or early February. The high cost of electricity is making us work on more energy savings projects. We are contemplating the use of heat pumps on existing water heaters. The expectation is a saving on energy of approximately 20 to 30 percent. Accelerated tests on a few water heaters are currently being conducted. In conjunction with AOAO and CCIOA we are working towards generating sufficient energy to also produce a significant amount of our own energy for all our buildings and recreational area, through the use of solar photovoltaic technology. Our Director Norman Litell and staff are working hard towards new software that will prepare our system for on line payments. Since our bylaws do allow us to vote electronically, the same group is working towards implementing this option on line in the near future.

This past October we completed the renovation of the last building that was planned for this year. So far we have completed 1, 2, 3 and 8. Next year 2009 plans will include another two buildings. The solar panels that are currently supplying power to our Administrative building have not produced the results we had hoped for. Therefore a small committee was formed to analyze the assumptions that were made initially so that the necessary improvements can be worked on. As you might be aware CCIOA owns unit 4109 which was used by staff as an office for a number of years. CCIOA is currently renovating this unit with the intention to put it up for sale when the Real estate market returns back to normal. In the interim after completion of the renovation the unit will be leased. With the 2009 annual meeting coming up in April our Chairmen Jerry Hempenius informed the board that there will be two vacancies next year and that the deadline for submitting biographies and letters of intents to run for the Board is January 30th. Any of you who are interested to contribute their expertise I recommend you to submit your name and resume to Fred Constantino by email: [email protected]. Hope to see you soon at The Cliffs!

H

CANDIDATES SOUGHT FOR CCIOA BOARD

Nominating Committee Chair Jerry Hempenius announces at the Twenty-Fourth Annual Meeting in Princeville, Kauai, interval owners of the CCIOA will have the opportunity to elect two members to the Board of Directors. The terms of Peter Carlson and Donald Jacobs expire on April 23, 2009. The Nominating Committee invites paid up members with strong financial (accounting), legal and/or management backgrounds, and who are interested in serving three-year terms as Directors to become candidates. Directors are appointed to committees, are expected to attend four meetings a year and participate in as many teleconferences as needed. Board related expenses are reimbursed in accordance with the approved expense policy. Applicants are to submit a summarized biographical background stating principal qualifications, education and experience and a letter of intent to run by fax to (808) 826-1272, via E-mail to [email protected], or sent by mail to CCIOA Nominating Committee, Cliffs Club, 3811 Edward Road, Princeville, Kauai, HI 96722. Submition deadline is Friday, January 30, 2009.

For Your Info. . . . 2009 Real Estate Taxes (Cliffs Club)

1 bdrm $33.15 2 bdrm $36.50 4 bdrm $47.96 2008 Real Estate Taxes (Cliffs Club) 1 bdrm $33.95 2 bdrm $37.39 4 bdrm $49.13

It is as easy as 1-2-3; please block your timeshare use week by visiting www.cliffsatprinceville.com

Contact Cliffs Activities at 800-367-8024 to book your next Kaua`i excursions, and don’t forget to ask for your Aloha discounts!

To our Cliffs whole unit homeowners, if you are looking for someone to provide you with housekeeping services for your rental, consider Cliffs Housekeeping, 808-826-2009.

We now accept credit or debit cards and eChecks for payment of your maintenance fees.

Moving, don’t forget to let us know of your address, telephone, and e-mail changes.

Page 3: Winter 2009 Views From The Cliffs newsletter

Page 3

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CChhrriissttoopphheerr SSttaawwsskkii,, PPrreessiiddeenntt

2009 MAINTENANCE FEES By the time you read this article, you should have received the billing for your 2009 CRVOA maintenance fees. I am pleased to announce that this year’s maintenance fees will increase by only 3.5%. My letter to CRVOA owners which accompanies the billing indicates the reasons for this modest increase.

Even with this increase in maintenance fees, Cliffs Resort owners still have one of the best values on Kauai. Your 2009 maintenance fees are as follows:

1. One bedroom - $776.09; 2. Two bedroom Loft - $921.66; and 3. Four bedroom - $1,082.48.

Other articles in this newsletter highlight the many exciting projects taking place on property. We expect that our brand new pool will be ready for use soon after you get this newsletter. All but one of The Cliffs Resort units have been fully renovated within the past two years. Our capitol reserve fund is where it needs to be. All in all, things are looking great for 2009. Thanks to all of you for your continuing support of The Cliffs Resort.

COLLECTIONS UPDATE In an effort to insure that The Cliffs Resort collects sufficient maintenance fees to meet our budget, your Board has become more aggressive over the past year in connection with owners who fail to pay their maintenance fees. While we are generally willing to work with owners who need some additional time to pay their maintenance fees on a case-by-case basis, we do have some owners who simply do not pay their maintenance fees. As our budget is based upon a projection of the maintenance fees that we believe we will collect, this issue impacts all of us.

In early January, we foreclosed on a number of units whose owners were delinquent on their maintenance fees. We now have a number of intervals available for purchase. If you are interested in purchasing an additional week at The Cliffs Resort, now is the time to do so. Anyone interested in receiving more information regarding the purchase of a Cliffs Resort week should contact Rosarie Kelekoma. Rosarie can be reached at rkelekoma@[email protected].

ELECTRONIC COMMUNICATIONS The Cliffs Resort is in the process of formulating a plan for utilizing electronic communications to contact owners when maintenance fees are billed, meetings are scheduled, votes are required or with regard to other items that might arise. Our cost for using the U.S. Postal Service, factoring in the cost of preparation and mailing materials, is over $25,000.00 per year.

The Cliffs Resort will realize a tremendous savings if those of you who use e-mail regularly give us permission to contact you via e-mail for the above purposes. Any savings realized by the utilization of e-mail would likely be used to increase our capitol reserve fund, which will in turn have a positive impact on your 2010 maintenance fees. Look for additional information concerning this initiative in upcoming editions of this newsletter.

2009 ELECTIONS At the CRVOA’s annual meeting in July, the Board positions currently held by Terence Cannings and Ronald Raine will expire. A call for candidates will appear in your next newsletter. Chuck Gehrke, James Moyes and I will serve on the committee to review applications of prospective Board members.

CRVOA Board members are expected to attend two Board meetings on site each year and participate in at least two teleconferences. It’s sometimes hard work but I try to make our meetings as much fun as I can. Anyone having questions regarding serving on the CRVOA Board is encouraged to contact at the e-mail address below.

MAHALO Before concluding this column, I want to thank all of you for allowing me to serve as CRVOA President during 2008. I would also like to send out a mahalo nui loa to our hardworking Board of Directors and tremendous staff. We are very lucky at The Cliffs Resort to work with great people like Kimo Keawe, Julie Monroe, John Mahoney, Rosarie Kelekoma and Fred Constantino. The rest of the staff here at The Cliffs is also spectacular. I look forward to continuing to serve all of you during 2010.

As always, I invite Cliffs Resort owners to contact me directly with any questions or concerns regarding the property. My e-mail address is [email protected].

For Your Info. . . . 2009 Real Estate Taxes (Cliffs Resort)

1 bdrm $34.63 2 bdrm $36.31 4 bdrm $56.88 2008 Real Estate Taxes (Cliffs Resort) 1 bdrm $34.93 2 bdrm $36.41 4 bdrm $55.47

Page 4: Winter 2009 Views From The Cliffs newsletter

Page 4

CCLLIIFFFFSS AAOOAAOO Donald M. Jacobs, President

loha Owners and Guests – I hope you are enjoying a wonderful holiday season and are in good health. As is customary during this time of year and in addition to all of the ongoing projects, extensive time was reviewing and approving our budget for 2009.

Finances: Our Treasurer, Mark Barra reported that we were about $90,000 ahead of budget through September. He is projecting that we will end the year about $20,000 ahead of budget.

Approving the budget was challenging. Employee health benefits increased by approximately 17%. Utilities increased by approximately 40%. Our revenue decreased since the CCIOA moved into the Administration Building and no longer pays rent for using our facilities. In addition, the economy has declined dramatically and there is no estimate when the recession will end. The board decided to approve an increase in dues of 1.5 per cent. We hope that it will have minimal financial effect on you.

Pool Area: The renovation of our pool has begun and we are on schedule (pending the weather). Our owners and guests have been using the pool at Hanalei Bay Resort and are pleased with the facilities and hospitality being provided by our neighbors.

Solar Energy for Residential Buildings: As part of Congress’ bailout plan the federal solar credits were extended through 2009. This has given us time to find financing which is especially challenging at this time. In addition, although the solar is working very well on the Administration Building it is only satisfying about 60% of our energy needs. It was estimated it should satisfy approximately 90%. We have appointed a special Board Committee, chaired by Gus Daal, to research why our needs were so underestimated and to evaluate the proposed design for our residential buildings. We want to avoid this type of problem in the future.

Our energy consultant also recommended that we install heat pumps on all of our water heaters. His initial estimates showed we could save 40-60% of the energy to generate hot water in each unit. Tests are being conducted in various units to try and determine the actual savings. Our Board Committee will evaluate the results of these tests as well.

Amended House Rules: Although most owners and guests are complying with the House Rules, our management did not have the appropriate policies to

enforce them when it was required. The Board approved enforcement rules which are for all of our benefit. These will be posted on our web-site.

Insurance Info for Whole Unit Owners: As I reported in my last report, the Board recommended we modify our declarations to be sure all owners have sufficient insurance. This insurance will protect other units in case there is a problem which spills over to these other units. The modification to our declarations was passed with a 78.4% vote. A letter will be going out to all owners requesting proof of appropriate insurance.

Newsletter: The Communication Committee reported that the web-site continues to be enhanced. Major upgrades include sending bills, payment of dues on-line and being able to vote on-line. These are complex issues and will take some time to implement.

Board Meeting Dates: Our next meeting will be January 30, 2009. We hope to see you there. We also adopted October 22, 2009 for our October meeting next year.

We appreciate hearing from you. It helps us know we are doing what you want and your comments are most appreciated. Mahalo Nui!

A

THREE DIRECTORS TO BE ELECTED AT 2009 MEETING

At the Twenty-Ninth Annual Meeting on April 24, 2009, the Cliffs AOAO will elect three Directors to the Board. The terms of Gerald “Jerry” Hempenius, Donald Jacobs, and Rolf Ramelmeier end in April 2009. Candidate Review Committee Chairman James Moyes announces all paid up members who are interested in serving the Association are encouraged to apply.

Interested members are to submit brief biographical sketches stating their principal qualifications, education and a written statement of intent to run. All information will be sent to the AOAO Committee on Candidate Review at The Cliffs no later than Friday, January 30, 2009.

The Cliffs is self managed. Board members are responsible for the oversight management of all functions. Candidates with strong financial (accounting), legal and/or management background are encouraged to apply. Directors are appointed to committees and are responsible for introducing or revising policies for the AOAO. Directors attend four meetings a year and participate in as many teleconferences as are needed. AOAO reimburses for all related Board expenses, including coach air travel, ground transportation, lodging and meals.

Biographical sketches and written statements of intent to run are to be sent to AOAO Committee on Candidate Review, Cliffs at Princeville, 3811 Edward Road Princeville, Kauai, Hawaii 96722. Documents may also be sent by fax at (808) 826-1272 or by e-mail to [email protected].

Page 5: Winter 2009 Views From The Cliffs newsletter

Page 5

EXTREME MAKEOVER ON

SCHEDULE

Page 6: Winter 2009 Views From The Cliffs newsletter

Page 6

Rendition of The Cliffs Pool, options subject to revision.

Renovations to The Cliffs pool complex proceed as earth is removed and concrete is poured. On several occasions, rain threatened the project, but overall our contractor is on schedule. A decision was made to remove two coconut trees near the adult Jacuzzi, as the root system poised a future problem. We thank everyone for their patience as we continue with the pool project.

Page 7: Winter 2009 Views From The Cliffs newsletter

Page 7

TThhee CClliiffffss aatt aa GGllaannccee

TThhee CClliiffffss OOhhaannaa

Ralph Kitashima says – “Help me help you, your friends and family SAVE MONEY on a time share

ownership resale in this wonderful Cliffs Resort.

For your referrals it would be my pleasure to repay you with credits that you may apply towards

airfares, car rentals, island itinerary, maintenance fees and groceries at Foodland!

You’ll receive 250 credits for every referral who purchases through us. Each credit

equals one dollar redeemable for the above mentioned incentives.

Give us a call for details.

For those of you, who no longer use or need your ownership, call us for details on how we

can assist you.

Toll free: 800-222-5541 Office: 808-826-6585

E-Mail: [email protected]

Timeshare Solutions is an affiliate of Oceanfront Realty International, Inc.

THIS IS A TIMESHARE SALES SOLICITATION

Rose Ann “Rose” Canosa of Kapa’a was recently hired and is working in the Housekeeping Department. Rose is an excellent Karaoke singer and also enjoys dancing and playing volleyball. Please say hello the next time you see Rose and welcome her to The Cliffs.

When asked what is her secret to her employment at The Cliffs since 1983, Rosarie Kelekoma states, “I have made so many friends along the way. The owners and my peers keep me going and I enjoy providing continuity.” On her free time, you can find her with her family on their ATV’s taking a tour of pasture land. The next time you see Rosarie take the time to congratulate her on her milestone achievement!

Page 8: Winter 2009 Views From The Cliffs newsletter

Page 8

A LETTER TO CLIFFS CLUB MEMBERS

December 1, 2008 Aloha to all members of the Cliffs Club Interval Owners Association. The Board of Directors and the staff at our beautiful property wish each and every one of you a happy, healthy and joyous Holiday season. Unfortunately, along with Holiday greetings we also have to acknowledge that this has been a difficult year for many, with people losing jobs and savings at the same time that costs have increased across the board. Nationwide, year-to-date cost of living increases have averaged 5% and island economies such as Kauai have seen even greater increases. Your association is not immune to these forces. For example, we have seen dramatic increases in our electric bill – over 45% from October 2007 to October 2008. Our premiums for employee health insurance have increased over 17% this year. And the income on our reserve accounts has been reduced by the same pressures that have eroded interest on your savings accounts and CDs. This past year, your Board and the Cliffs staff have been working on a number of cost-reduction projects, many of which have been discussed in the quarterly newsletters you receive. Increased use of email and the Cliffs website for Owner communication is one example. Next year you will be able to access the Cliffs website and see all of your maintenance bills in one consolidated statement. This year you will be able to use both credit or debit cards and eChecks for payment of your bills. And this spring we anticipate using the website to handle balloting for the Annual Meeting, significantly reducing the more than $25,000 that is spent on that activity. We are also making good progress with reducing our overall energy costs at the same time that we are moving forward with converting the entire campus to solar power – a move that will fix our power costs for the next 10 years, and then give us virtually free power for the next 10 years. After robust discussion and analysis, your Board has decided to increase the 2009 Maintenance Fees by 5.4%. We are pleased that, by virtue of our aggressive cost-management programs, we have been able to hold our increase to such a low number. By contrast, some of the top-end mainland timeshares are seeing 9-10% increases in 2009 fees. According to ongoing surveys, the Cliffs Club fees are in line with other 5-star, Gold Crown properties on Kauai. While none of us like paying more for these services, I hope you can see that the value you are receiving is well worth the cost, and can appreciate the need to maintain what we all feel is the best property in Hawaii. Again, we wish you a joyous Holiday season and a healthy and happy new year. Thank you for your continued support – we hope to see you during the year at our wonderful island home!

Norman G. Litell, Treasurer The Cliffs Club Interval Owners Association

Page 9: Winter 2009 Views From The Cliffs newsletter

Page 9

CMG TO ELECT ONE DIRECTOR AT APRIL ANNUAL MEETING

Cliffs Management Group (“CMG”) Nominating Committee Chair Deborah E. Nicosia announced the term of Susan Collins ends on April 24th , 2009.

The Nominating Committee invites paid up members, who are interested in serving a three-year term as Director to consider serving CMG by putting their names up for election.

Directors are appointed to committees and normally meet 3-4 times a year and conduct other business by teleconferences. Director expenses related to assigned Board activities are reimbursed by CMG. Applications for Advisors are also being sought. There are currently openings for two advisors. If you have any specialized experience you would be willing to contribute to CMG, please submit your name for consideration

Applicants are to submit a biographical sketch and a written notice of intent to serve by fax to (716) 687-1146, via Email to [email protected], or sent by mail to CMG Nominating Committee, c/o Deborah E. Nicosia, P.O. Box 441, East Aurora, NY 14052-0441. Submission deadline is Friday, January 30, 2009.

VISIT US AT

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Page 10: Winter 2009 Views From The Cliffs newsletter

Page 10

The following letter is being sent to CMG Shareholders. An application for conversion will be sent with the letters to Shareholders, or you may obtain one by contacting Deborah E. Nicosia, Secretary, at either the e-mail or postal addresses at the end of the letter.

December, 2008

Dear Shareholder,

Cliffs and CMG records show that you own one or more shares of CMG stock and do not hold title to the underlying land in your individual name(s).

When the Cliffs Club was developed and built, timeshare ownership was in its infancy. Owners purchased their interests as leaseholders. CMG (Cliffs Management Group, Inc.) was then formed and purchased the land under the timeshare project. When some of the timeshare owners paid for the cost of their land interest, new deeds were not issued. Rather, a share of CMG stock was issued to the timeshare owner. The land continues to be titled in the name of CMG.

Owning CMG stock entitles the shareholder the right to vote in CMG elections and to hold CMG office. Since CMG was incorporated as a “for profit” entity, CMG technically could declare dividends. It has never done so, and does not anticipate declaring dividends in the foreseeable future. In fact, the CMG Board recently discussed investing in The Cliffs in some way which would benefit all owners, in the event that CMG finds itself in a position to do so, rather than declare shareholder dividends. No decisions have been made and alternatives are still being discussed.

Ownership of timeshares in fee simple has now become commonplace and many new purchasers are reluctant to buy leasehold (or what appears to be leasehold), although we still have a significant number of owners who hold their units as “leaseholders” and pay rent to CMG each year.

There are advantages to holding one’s timeshare unit in “fee simple,” including the fact that it is easier to sell the unit, or transfer it for estate purposes. Owners of “fee simple” own their unit “in perpetuity,” - that is, forever (assuming all taxes and maintenance fees are paid).

As a CMG Shareholder, you are entitled to convert your share of stock to ownership of your timeshare in fee simple upon preparation and filing of a deed. For the past few years, CMG shareholders who wished to purchase their land (fee) interest from CMG, have paid an additional $226.00 to have a new deed issued and recorded. Once an owner’s share of CMG stock is surrendered, it cannot be repurchased.

AT THIS TIME, the CMG Board is offering shareholders the opportunity to surrender their share(s) of CMG stock in exchange for a fee simple deed (or deeds) at a subsidized rate through June 30, 2009. The owner’s share of the cost of conversion from CMG share to fee simple will be $96.00 per unit owned, provided that the title remains as currently shown on the current assignment of lease (or other conveyance document) recorded in the Hawaii Bureau of Conveyances. Any shareholder/owner who wishes to convert to fee simple after June 30, 2009 may still do so, but the entire cost may be the responsibility of the shareholder/owner.

In the event that an owner wishes to transfer the deed into another name, or names, or in the event that there has been a change of ownership (such as by death, divorce, or marriage), or the owner would prefer a change of ownership (such as living trust, remarriage, etc.), this special rate would not apply. The amount of the additional charge would depend on the nature of the title change (estate, marriage/divorce, conversion to living trust, etc.), and the ease or difficulty of obtaining the signature(s) of the prior owner(s). The price would be negotiated with the attorney preparing the documents. Naturally, each owner would be free to choose his/her/their own attorney, but the cost would be the responsibility of the owner/shareholder.

As a CMG shareholder, if you wish to convert your timeshare to a fee simple deed, rather than owning a share of CMG stock, please fill out and sign the enclosed form and send it , with your check for $96.00 payable to CMG, Inc., postmarked by June 30, 2009, to CMG Secretary Deborah Nicosia at the address below.

If you believe our records are not accurate and you own your unit in fee simple (that is, including the land), please provide us with a copy of your deed.

If you have any further questions, you may e-mail the CMG Secretary, Deborah Nicosia, at [email protected], or write to her at P.O. Box 441, East Aurora, NY 14052. If you communicate by regular mail, please include a telephone number, and the times you can be reached.

Sincerely, SUSAN B. COLLINS President, Cliffs Management Group, Inc.

Page 11: Winter 2009 Views From The Cliffs newsletter

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[Gleaned from The Garden Island newspaper, mahalo nui loa to them]

More Island Industry Hit With Layoffs By Michael Levine – THE GARDEN ISLAND Published: Saturday, December 6, 2008 Representatives of the Princeville Operating Company and Starwood Vacation Ownership confirmed that each group is laying off approximately 40 employees — for a total of 80. Princeville Operating Company, which manages the renovating Princeville Resort, to open next year as a St. Regis, on Thursday closed the final nine holes of its prestigious 27-hole Makai golf course. “It necessitated some temporary layoffs because we’re actually closing the entire course so that the work can be done,” said Mamo Cummings Graham, Director of Resort Marketing. Director of Golf Michael Castillo said the temporary layoffs covered “the entire operation, across the board,” including the pro shop, maintenance workers, managers and others. Castillo said, “Everyone is still employed. The employees were all told they still have their jobs, and that they’ll be asked to return. They’ll be asked to come back throughout the renovation and through the completion of the renovation.” Laid off Po‘ipu-based sales and marketing employees of Starwood Vacation Ownership will not be as fortunate. “Unfortunately, due to the economy, we have to make some difficult choices in the company,” said Vice President of Corporate Communications David Matheson in announcing the elimination of roughly 40 positions from the Po‘ipu sales gallery, which will be closed. Starwood’s lone vacation ownership property on Kaua‘i is the Westin Princeville Ocean Resort Villas, which has its own onsite sales gallery, Matheson said.

Hawai`i Welcomes Electric Car By Luke Shanahan – THE GARDEN ISLAND Published: Monday, December 8, 2008 Imagine an electric car with modern, lightweight batteries that could be charged in just a few hours and that run on little or no maintenance for years, supported by a network of recharging, or battery-swapping, facilities powered by green energy alternatives, like windmills. According to the book “Internal Combustion,” Thomas Edison worked with Henry Ford to produce this vehicle of the future, and by 1914 had announced a plan to produce thousands of Model T-priced electric vehicles. Nearly a century later, in 1996, General Motors — which, along with Ford and Chrysler, continues to petition Washington for billions in bailout loans — introduced the environmentally friendlier EV1 electric car. The program was soon pulled and, according to the documentary film “Who Killed the Electric Car,” the last EV1s were taken away to the Arizona desert and crushed in March 2005.

Now, it’s Shai Agassi’s turn to try to get a viable large-scale electric car program up and running. The former Silicon Valley software executive plans to bring electric cars to Hawai’i. According to a news release from Gov. Lingle’s office this week, the governor and Mr. Agassi, founder and CEO of Better Place, a Palo Alto, Calif. company and “the world’s leading sustainability mobility operator,” are working together to position Hawai’i as one of the first models for the adoption of electric cars in the nation by unveiling a plan to bring an electric car network to the islands. According to the statement, “Better Place plans to begin permitting for the network within the next year and begin introducing vehicles within 18 months, with mass-market availability of electric cars in 2012. Hawai‘i joins Israel, Denmark, Australia and California in its commitment to deploying the world’s first electric car networks.” According to Agassi, Hawai‘i’s high gas prices and ready access to renewable energy resources make it an ideal spot for an electric car program. A Memorandum of Understanding was signed between Hawaiian Electric Companies and Better Place Hawai’i, the statement said. The memorandum describes an agreement to collaborate on infrastructure and energy sources to power the network of public “charging spots” and “battery swapping stations” with renewable energy. The governor said that the plan is in keeping with the Hawai‘i Clean Energy Initiative, signed in January, which seeks to guide Hawai‘i into using 70 percent renewable energy by 2030.

Conservation On The Wing Honored By Coco Zikos – THE GARDEN ISLAND Published: Wednesday, December 10, 2008 Imagine having to traverse the swampy, saturated depths of the Alaka‘i Swamp searching for invasive plant species. Thanks to Dana Slaymaker of Resource Mapping Hawai‘i, conservation officials can now pinpoint exact locations of invaders to Kaua‘i’s hidden corners, all while comfortably seated at their computer screens. After 30 years of dedicated work, and a multitude of donations from Hawai‘i residents, Slaymaker devised a system that has had tremendous success on Kaua‘i. In fact, Slaymaker is one of the six current recipients of the Innovation Awards presented by Gov. Linda Lingle this week. Teaming up with The Nature Conservancy, The U.S. Geological Survey and The University of Hawai‘i three years ago, Slaymaker began a difficult crusade battling against invasive species that are threatening Kaua‘i’s natural ecosystem. “Island ecology is incredibly delicate,” said Slaymaker, “once destroyed, it will never be able to come back.” According to Slaymaker, the Alaka‘i Swamp, Wainiha and Lumaha‘i Valley are the most crucial areas on the island because they are so difficult to access. With his advanced technological system, detailed three-dimensional images using high definition cameras and a GPS system mounted to a 182 Cessna airplane are captured and sent to a computer, where conservationists can easily track down exact locations of invasive weeds and plants.

News From Around The Island

Page 12: Winter 2009 Views From The Cliffs newsletter

Page 12

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THE CLIFFS 3811 Edward Road

Princeville, Kauai, HI 96722 www.cliffsatrprinceviille.com

Views From The Cliffs WINTER 2009 ISSUE

Editor Lou Genett Creative Director Fred Constantino

CCoonnttaacctt LLiizz aanndd lleett hheerr hheellpp yyoouu ppllaann yyoouurr HHaawwaaiiiiaann aaccttiivviittiieess!!

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aaccttiivvttiieess@@cclliiffffssaattpprriinncceevviillllee..ccoomm

ATVKayak Golf

Luaus Movie Tours Na Pali Coast

Tubing Zip Line Zodiac

And much more!

Board Meetings at The Cliffs J A N U A R Y Wed. 01.28.2009 – Joint Meeting of the Boards 01.28.2009 – CRVOA Regular Meeting Thur. 01.29.2009 – CCIOA Regular Meeting Fri. 01.30.2009 – AOAO Regular Meeting A P R I L Wed. 04.22.2009 – Joint Meeting of the Boards 04.22.2009 – CCIOA Regular Meeting Thur. 04.23.2009 – CCIOA Annual Meeting 04.23.2009 – AOAO Regular Meeting Fri. 04.24.2009 – AOAO Annual Meeting 04.24.2009 – CMG Regular Meeting 04.24.2009 – CMG Annual Meeting J U L Y Wed. 07.22.2009 – Joint Meeting of the Boards 07.22.2009 – CRVOA Regular Meeting 07.22.2009 – CRVOA Annual Meeting Thur. 07.23.2009 – CCIOA Regular Meeting Fri. 07.24.2009 – AOAO Regular Meeting O C T O B E R Thur. 10.22.2009 – Joint Meeting of the Boards 10.22.2009 – AOAO Regular Meeting Fri. 10.23.2009 – CCIOA Regular Meeting

Meeting itinerary subject to revision