Aloha Kepuhi Beach Resort Homeowner,

I wrapped up a very successful Molokai trip last week and want to give you a quick update on recent

Management Company Changeover: I spent half a day in Honolulu working with the support staff
at Hawaiiana. The transition is going well, but a lot of previously routine activities need to be
thoroughly reviewed to evaluate their purpose and effectiveness. Hawaiiana represents a fresh set of
eyes looking at everything we do, which will ensure the best and most efficient operating policies and
procedures moving forward.’

Kepuhi Beach Resort Staff: Simultaneous to the change to a new management company, we
underwent some significant staffing changes. Our property is now a non-union workplace with four
relatively new employees in addition to three longstanding staff members. Paul Snyder, our property
manager, has re-organized the crew, work areas and schedules, creating a more efficient and
effective maintenance team.

Grounds Maintenance: You may have heard that we’ve had a very difficult summer, with many
irrigation problems caused by huge herds of deer invading the property, plus some very destructive
nighttime tampering with our irrigation equipment. Sadly, this left various parts of our lawn without
water for extended periods. An enormous amount of repair work over the past 5 weeks has finally
turned the corner on these problems and the entire property is quickly greening up again.

Building Maintenance: Repairing and restoring our buildings have been a major priority this
year. We dedicated a lot of resources to various efforts throughout the resort and the progress
should please everyone. Private contractors and supplemental labor, plus a new building repair
specialist on staff, have completed a long list of repairs. There is much more to do and these
activities will remain our highest priority well into next year.

Hotel Lot Restoration: It should be no surprise that upon my arrival, September 17th, I once again
found the Hotel Lot restoration was not complete. A short, but important list of items remain and I’m
hoping those will be finished within the next few weeks. On the other hand, I was very impressed
with the swimming pool restoration. (see photo below) The work quality seems very good and it looks
absolutely fantastic! (Feels great on the feet, too.)

Ranch Negotiations: We achieved a major breakthrough on the Cross Easement charges. Most of
the common area outdoor lighting runs off the Ranch’s electrical meter and our AOAO has been
charged back a large portion of those costs since the Hotel closed in 2001. Our current Board has
taken the position that separate metering under the Cross Easement Agreement means we do not
owe the Ranch any additional charges for electricity or water. The Ranch finally yielded this point and
removed all water and electricity costs from the Cross Easement bills, retroactive to the
arbitration. Unfortunately, no payments prior to that can be recovered due to an AOAO signed
agreement at that time. This change is huge and will save us approximately $2,000 per month…

Annual Meeting: You should have already received the first notice for our November annual
meeting along with a schedule of homeowner events. The second notice, along with the official
meeting documents, will be in the mail to you this week.

The above are just a brief summary of the many positive developments at the Kepuhi Beach
Resort. Please join us in November and enjoy the rebirth of our shared piece of paradise.


Jeff Kent
President, Kepuhi Beach Resort AOAO