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KANALOA COMMUNIQUÉ

A HOMEOWNERS' PUBLICATION ABOUT HAPPENINGS AND EVENTS AT KANALOA AT KONA
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Wayne House AOAO President

PRESIDENT'S LETTER

October 2026 Board Meeting Aloha! As always, I want to thank all those present and on Zoom as well as our Castle support team for the October 30, 2026Board of Directors Meeting of the Kanaloa at Kona AOAO. Here’s some of the things going on at Kanaloa; past, current and future. Since we met in July, quite a bit has been happening around Kanaloa. ✔ The Fairway buildings 1-12 and the administration building painting was completed in August. ✔ The Ocean Pool Owners’ Kitchen (may not be the final designation), is almost complete and will beready for reservations soon. Cabinetry and beautiful countertops and sink have been installed. Thereis also a nice, party tray-size, refrigerator included. Further details should be coming out soon. Thisproject is being completed by our own Kanaloa Maintenance staff, with some help from a coupleoutside contractors. It looks great, and you can use that staff to do upgrades on your own unit, too.
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  • ✔ The Endless Summer Café (coffee bar) is open on Wednesday mornings in the Lobby. They are
  • currently serving drip Kona coffee (light, medium and dark) and selling bulk coffee in as small as 4 oz
  • bags (great gift idea!). They hope to expand the days open and their offerings after a couple more
  • months of evaluation and feedback from customers. We are trying to coordinate their expansion and
  • our own Lobby upgrades. Again, look for more on this in the near future.
  • ✓ All components for our new streetlights along the main road are manufactured in-house, ensuring superior quality control and seamless integration.
  • Jim Heather's new report will be posted shortly with other property updates and upcoming improvements.

  • The 2027 Budget for the Kanaloa AOAO was also discussed and approved at this meeting. Highlights include:
  • ✔ Incorporation of our recent Reserve Study, which included an onsite re-evaluation of our future reserve
  • projected expenditures, including updated roofing estimates after an outside contractor study. This
  • results in a larger reserve contribution from our Maintenance Fees. ✓ Lower estimated 2027 insurance rates for Liability and Flood. The 2027 estimates include about a
  • $200K saving over our 2026 estimates. This savings is being rolled forward to 2027 to offset increased
  • reserve contribution requirements.
  • ✓ We have included a 3% increase for salary and benefits costs for the Kanaloa staff.
  • ✓ The Registration Fee for Non-Castle owners will be increased to $33 per stay beginning January 1,
  • 2027. This is the first increase since the fee began in 2021. The fee is based on labor only and
  • represents less than a 2% per year increase while labor costs have risen each year.
  • ✓ Bottom Line – Maintenance fees are increasing by approximately 4.3%, primarily due to normal
  • inflationary increases across the operating budget. Savings realized through insurance costs are
  • helping to offset revised estimates for future reserve expenditures, helping to moderate the overall
  • increase.
  • I have a reminder about parking. Since we are a condotel, there are many short-term stays at Kanaloa. If you
  • have an extra car, STVR regulations require that your assigned parking spot be vacant for the guests’ use. Also,
  • per the Kanaloa house rules, one and two-bedroom units are allowed 2 cars and three-bedroom units are
  • allowed up to 3. If you have an extra car, please park it offsite or in the middle parking lot near the Quiet Pool.
  • Guest parking spots are for temporary parking only, so guests can unload groceries or have friends over, etc.
  • They are not for permanent parking. Please be courteous to other owners and guests.
  • We have a couple of changes for the next two scheduled meetings. In January, in addition to the normal BOD
  • meeting on Friday the 29th, we will be doing an Employee Appreciation Event on Tuesday, the 26th. Volunteers
  • and donations are greatly appreciated to celebrate our great staff. Let Wendy Benson know if you can help out. You can text Wendy at 925-915-1310 or email at wb8221@gmail.com.
  • In April for the Annual Meeting, which will be held on Friday, the 30th of April, the Owners Reception will be
  • held on Tuesday, the 27th instead of the usual Thursday evening. Both of these changes to events near the
  • meeting day will give the BOD and Kanaloa staff a little more preparation time before the meetings.
  • I also want to ask that any owner who might be interested in being a part of the BOD to submit a short bio to
  • Jim Heather (jheather@castleresorts.com), or any member of the BOD. We are always looking for great skills
  • to enhance the capability of the Board to keep Kanaloa as great as it is.
  • As always, much happens between meetings, and these were just the highlights. Plan on attending the next
  • BOD meeting scheduled for January 29, 2027 to get the full picture of what goes on at Kanaloa.
  • Mahalo,
  • Wayne House
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JIM HEATHER General Manager
Management Team
General Manager Jim Heather jheather@castleresorts.com (808) 322-1008 Vice President of Finance Dean Yamamoto dyamamoto@ castlehospitalitygroup.com (808) 524-9277 Property Accountant Lynn Shimabukuro lshimabukuro@castleresorts.com(808) 524-9280 Director of Condominium Administration Renette Carpio rcarpio@castlehospitalitygroup.com (808) 524-0236

General Manager's Report

July 2026 Board Meeting Aloha!Welcome to Hurricane Central! Kanaloa has dodged two major hurricanes this month with Hurricane Lala causing major damage to the south part of Hawaii Island followed by Hurricane Lowell that hit Niihau, Kauai and Oahu a week later. Historians say the Hawaiian Ali’i lived in the Keauhou area due to the protection this area is provided by Mauna Loa. While watching the hurricane’s progress on windy.com, I could see that Kona had calm winds while the rest of the island was getting thrashed. Don’t let this give us a false sense of security that we are protected from all weather events. Just remember the “Kona Low” storm that sent wind driven rain at 60 mph at our buildings back in March. This is good reminder to check out Kanaloa’s Emergency Action Plan available at Kanaloa’s website kanaloacommunique.com in the “Documents” section. I suggest printing out a copy and leaving it in your unit for your guests to refer to in case of emergencies. A link to the Plan is here. Kanaloa has been lucky to have not lost power during any of these events. I lost power for 20 hours in an area 15 minutes away from Kanaloa while others lost power for weeks. Is your unit supplied with any emergency lighting, like flashlights and batteries? Is there a means to store water in your unit in case of emergency. If you rent your unit, be proactive and make an emergency kit for your unit. Reserve Study: We are currently updating Kanaloa’s reserve study for next year’s budget and I am happy to say that there are no scheduled disruptive projects for 2027 and 2028! No exterior painting, no asphalt, no termite tenting! We have accomplished a lot in the last three years so it is time to give our owners and guests a break. I don’t know what I am going to do now that I don’t need to ask you to move your car or ask for keys! Yippie! We will continue to build our reserve fund for the big projects that are planned in the future such as exterior painting of the ocean facing units in 2029 and possibly the first phase of roof replacement in 2030. We had our roofs inspected last month to establish the “remaining useful life” of our roofs for our reserve study. Currently we have a schedule to replace the roofs at a very conservative remaining useful life of 25 years for our “50 year” shingle. I have not received this report yet, but we arehoping the report will give the Board confidence to schedule this project for the best date for the association which is preferably after I retire! Ocean Pool Owners’ Kitchen: This area is going to be a fantastic amenity for Kanaloa owners. The area already boasts the best view in Hawaii and now there is a first-class kitchen area to prepare for owner gatherings. The Ocean Pool Pavilion area can be reserved by Kanaloa owners through me. The Board is still considering the guidelines for the Kitchen use so please stand by for more information. We are forecasting the kitchen area to be complete by early October. Coffee Shop: We had the first trial run of the coffee shop concept in the lobby recently. The turnout was quite impressive with many guests remarking that they were happy to have a morning coffee option on property. It was nice to see the lobby abuzz with activity and caffeine. Kailani Coffee will also be producing K- Cup version of their coffee, so if you rent your unit and want a signature Kanaloa coffee for your guest, check them out. Mahalo,Jim