August at PHCA: What Happened, and What Comes Next

August was an unusual month for the Princeville at Hanalei Community Association.

PHCA staff continued working on roads, drainage, community facilities and day-to-day operations. But at the Board level, much of the month was consumed by director recalls, legal questions, executive sessions and preparations for the regular Board election.

The result has been understandable confusion among members. Here is a simple summary of where things stand and the position of Friends of Princeville.

Part A — What happened in August

Two separate recall efforts

There are now two separate recall efforts involving three PHCA directors. The first seeks to remove Director Rose Krebs.

On August 17, PHCA publicly posted a Notice of Intent to hold a special membership meeting concerning her proposed removal and, if she is removed, the selection of a replacement for the remainder of her term. PHCA said that the date, voting procedures and other details would follow in the formal meeting notice.

During the statutory period that followed, PHCA received a second petition concerning Board Chair Patti Thiele and Vice President Dale Sands. PHCA subsequently informed members that it had completed an administrative review and intended to place those proposed removals before the membership as well.

These are therefore two different recall efforts and should be considered separately.

How is a recall supposed to work?

Hawaiʻi law provides a fairly detailed procedure. HRS §421J-3.3 allows members of a planned community association to remove an elected director with or without cause. A member-initiated removal petition must meet specific requirements, including signatures representing at least 100 units or 25 percent of the community's units, whichever is less, together with identifying information and applicable filing deadlines.

If a qualifying petition proceeds, the proposed removal must appear in the meeting notice. State law requires at least 14 days' notice for an association meeting, and the notice must identify any proposal to remove a director.

PHCA's own Bylaws also say that a director may be removed “with or without cause.” They provide for written ballots and permit cumulative voting in Board elections. This last point makes the actual removal vote more complicated than a simple majority of ballots cast. Under state law, a director can be removed only if the votes for removal would have been sufficient to elect that director, and cumulative-voting protections must also be considered.

That is why PHCA should give members a plain-language explanation of the voting formula before voting begins. If a director is removed, state law provides for a replacement to serve the remainder of the term. Ideally, that replacement is elected at the same membership meeting; if that does not occur, the law provides an interim process.

There has been considerable debate among members about how some of these provisions apply to PHCA. That makes clear, counsel-reviewed instructions more important, not less.

The regular Board election is separate

At the same time, PHCA is conducting its normal annual election. Two Board seats will be filled at the October 24 Annual Meeting. Three candidates are running:

• MJ Stancil is Hotel Manager at 1 Hotel Hanalei Bay. She emphasizes local experience, listening, service and what she describes as thoughtful progress.

• Tom Bartlett is a long-time Princeville resident and former PHCA director and Treasurer with a background in hospitality and real estate. He emphasizes preserving Princeville's existing character and open spaces.

• Dale Sands is the current Vice President (subject to a recall) and is seeking reelection. He emphasizes infrastructure, operations and completing projects already underway.

PHCA has scheduled a candidate forum for September 12 and a candidate meet-and-greet for September 17. Voting opens September 11, subject to change. The regular election and the recalls are different processes. Members should not confuse them.

A busy staff, but limited visible Board leadership

It would be unfair to say that nothing happened during August. PHCA staff continued moving some road, drainage, fencing, park, accounting and other operational projects forward. The General Manager's reports show substantial staff activity, and the Fall Newsletter describes several projects that have been completed or are advancing.

The problem is different: At the Board level, much of August was spent in meetings that produced little visible action. The August 4 Committee of the Whole took no action. The August 13 working meeting primarily set agendas. Special meetings on August 13 and 14 moved almost immediately into executive session. The August 20 Committee of the Whole again discussed issues without taking action. Procedural and confidential meetings are sometimes necessary. But Princeville also needs visible leadership on its larger priorities.

And then the Chair and Vice President stepped aside

The second recall petition created another problem: Because Patti Thiele and Dale Sands themselves became subjects of the recall process, both have recused themselves from recall-related activities. There are understandable reasons for directors to step away from decisions in which they have a direct personal interest. But when both the President and Vice President withdraw from a major governance matter at the same time, someone still has to manage it.

In practice, much of that responsibility has fallen to General Manager Bryan Allen.

That is not an ideal governance structure. PHCA's Bylaws assign the President responsibility for presiding over the Board and carrying out its decisions, while the Vice President is supposed to act when the President cannot. When both step aside, the Association needs a clearly defined Board-level process rather than leaving difficult legal and governance questions largely to staff.

Part B — The Friends of Princeville position

Friends of Princeville believes August illustrates a larger problem.

The recalls matter, but they are not the real objective.

Better governance is:

RETAIN Rose Krebs. REMOVE Patti Thiele. REMOVE Dale Sands.

We reach those conclusions for different reasons. In Rose Krebs's case, we have not seen a persuasive reason for overturning the membership's election of an independent director before her term ends. A recall may legally proceed without cause. That does not mean members should remove someone without a convincing reason. Ms. Krebs has asked difficult questions, challenged decisions and disagreed with other directors. In our observation, she has done so professionally. Independence on a Board should be protected, not treated as misconduct.

Our concerns about Patti Thiele and Dale Sands are different. They concern leadership and Board performance: financial stewardship, procurement discipline, transparency about legal advice, communication with members, project execution and long-term planning. August reinforced the communication problem. PHCA's September newsletter contains useful information about projects and the regular election, but it does not explain the recall situation—the most consequential governance issue currently before the membership.

Princeville needs more than a series of individual decisions and projects. As we have argued before, the next Board should have four priorities:

The current recall controversy should not become a contest over which faction controls PHCA. The larger question is simpler:

Can we create a Board that represents the entire membership, asks difficult questions, manages our money carefully, communicates clearly and plans beyond the next meeting?

That is the change Friends of Princeville is seeking.

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