PRESENT: President John Riggins, Vice President Greg Peterson Secretary Stephen Enomoto, Treasurer Carol Smith, and Directors Carolyn Ancheta, Jennifer Curtis, Steven Loring, and Kevin Lum.

EXCUSED: Director Tom Otake

CALL TO ORDER

There being a quorum present, President Riggins called the meeting to order at 7:00 p.m.

Director Enomoto motioned, seconded by Director Smith, to approve the minutes of the Board of Directors meeting held on April 28, 1999. Motion carried unanimously.

III REPORTS

A. Homeowners Comments -- The following homeowner addressed the board:

Lot 1-505 -- Jimmy Santos

Emergency phone numbers will be left on the Association's answering machine's message if an emergency arises.

General Manager's Report - Mr. Warren Wegesend provided a verbal, as well as a written report which will become a part of the meeting file. He reported on the following items:

Marlou Agpaoa, our new Facilities Director, was introduced to and welcomed by the Board. Mr. Agpaoa joined us on May 20, 1999.

The Audit is completed. This will be discussed further under Treasurer's Report.

VIP Summer Session Sign-Up -- Our license currently allows us to enroll up to 160 children. We signed up 109 on the first night of registration. Since we seem to have enough openings to accommodate our community, staff is considering going back to giving out registration forms in advance and taking enrollment on a first come, first served basis.

Movie Night -- The first Movie Night was held on May 14, featuring Water Boy. There were 85 to 90 attendees. The next scheduled Movie Night will be on July 30, featuring ANTZ.

HCDCH Workshop Meeting Rescheduled -- The meeting to be held here at the Rec. Center has been rescheduled to June 2, 1999. Homeowners will have an opportunity to ask questions.

Account Analysis -- Staff completed the comparison on whether we should remain under the Account Analysis Program with Bank of Hawaii. Currently, while we are under Account Analysis, the Association's net cost for Lock Box Services is approximately $83 a month. If we were to go off of Account Analysis and open accounts at Schwab, keeping a minimum balance and earning a higher interest rate, our net cost will be less or none.

Director Smith motioned, seconded by Director Curtis, to go off of the Account Analysis with the Bank of Hawaii and place any balance over $100,000 into a Schwab Money Market account labeled Money Market Checking. Motion carried unanimously.

Payroll and Benefits -- Chaney Brooks will close out the second quarter, and beginning with the pay period beginning June 16, 1999, we will do our own payroll in-house. We were also able to get our own benefits packages comparable to those offered by Chaney Brooks. Due to the many errors which occurred each payroll since Chaney Brooks decided to do the payroll themselves beginning July 1998, they agreed to reimburse us for the payroll service which we paid for since July 1998.

Collection Agency -- Staff have researched various collection agencies to be used for accounts which have been foreclosed and sold and the previous owners have left without paying their delinquent account. The going rate is 50%. Staff will also check with the Better Business Bureau to see if there were any complaints against the agencies' methods of collection. The time frame for collection will also be looked into with each agency and the engagement agreement will be reviewed by our attorney before it is signed.

Director Loring motioned, seconded by Director Smith, to authorize the General Manager to enter into an agreement with an agency for collection of bad debts. Motion carried unanimously.

Treasurer's Report -- Treasurer Smith reported on the April 1999 Financials with no objections.

   1. CD Maturity -- One CD for approximately $35,000 expires today, and another for approximately $5,000 will expire on June 30, 1999. The money in these CD's are both from operating reserves. Since interest rates can fluctuate from day to day, the Treasurer was instructed to look for the highest and best rates. If the rates are very close between a local and a mainland company, go with the local company.

2.    Auditor's Report -- The 1998 audit has been completed and the Auditor's Report will become a part of the meeting's file. Director Lum motioned, seconded by Director Peterson to accept the Auditor's Report. Motion carried unanimously.

Community Policing -- Mr. Wegesend reported that Mr. Lenny Farm called and advised that he would not be able to attend tonight's meeting. This matter will be deferred until the next meeting, when they are expected to report on their activities.

Legislative Action -- Director Peterson reported that he only just received a legislative report from Brian Kanno today. He will provide a copy to the Board after he has had a chance to review the report. The committee will also look into setting up Town Meetings and asking Senator Kanno and Representative Moses to attend.

Traffic Committee -- Director Lum gave an oral report, as well as a written report which will become a part of the meeting file.

The letters from Mary Hunter and Toni Floerke-Politsch were discussed. A draft of the response to Ms. Floerke-Politsch's letter was provided for review.

The Board was also concerned about the allegations made at a school function in which the Board was not invited, and also that community members do not attend the Board meetings to express their concerns. It was agreed that a Town Meeting be set up to educate and try to bring a consensus within the community about how to handle the traffic problems in the Villages. A Town Meeting will be tentatively scheduled for September 1999.

Kapolei Knolls -- To be deferred until the next meeting. Questions to be asked about this matter at the June 2^nd HCDCH meeting.

Retaining Walls -- The owner of lot 2-262 addressed the Board about the retaining wall which was approved at a height of 19" by the Design Review Committee (DRC) to stop her home from shifting any further. However, because the owner neglected to take into account the slope of the property, she informed the DRC that the wall would only need to be 19" in height. The wall starts off as 19" in the front end of the property, and ends at 27" in the side end of the property. Photos of the wall were passed around for the Board's review. A modified photo of what the wall would look like if it was brought into compliance by removing one tile from the point where it began to exceed 19" was also passed around. After much discussion, the Board was reminded that the DRC is autonomous and the Board cannot tell the DRC what to do. Director Loring requested to go on record as being in favor of the wall as is without any modification. It was decided that the General Manager will inquire of our attorney what the Board can do to inform the DRC of the Board's feelings on such or other situations which may arise. In the meantime, a moratorium on fines will be placed for this lot, until the matter is resolved.

Resolution Adopting Flexible Benefit Plan -- Mr. Wegesend informed the Board that AFLAC, the company who provided the Flexible Benefits Plan through Chaney Brooks, can continue to offer us the same plan at no cost to the association with a minimum enrollment, which we already have. The company will require that a resolution be adopted by the Board.

Director Smith motioned, seconded by Director Enomoto, to adopt the Resolution Adopting A Flexible Benefits Plan. Motion carried unanimously.