2024-03-04 Letter AOAO of Colony 1 at Sea Mountain, Anthony Gand (PL-CCH-2024-022)

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C & A Punalu'u, LLC Financial Plan as of July 13, 2020 Punalu'u Water & Sanitation, LLC Financial Plan as of July 13, 2020 The following financial plan is based on information available at this time. Given that C & A Punalu'u, LLC ("C & A Punalu'u") only acquired the utility less than two months ago and in light of the current COVID-19 pandemic, travel restrictions, and quarantine requirements, C & A Punalu'u reserves the right to update this information should new or additional information become available. 1. Operating Projections Currently, the sole revenue source for Punalu'u Water & Sanitation, LLC ("PWS") is the potable water sold to the PWS' twenty residential and commercial customers in the Punalu'u area. The water consumption for those customers has remained relatively consistent in past years. Without seeking any rate increase,the projected revenue for the next consecutive two years is approximately $36,000 per year. PWS anticipates an increase of 25% in revenue during the third year if the Black Sand Beach development is able to proceed, and the projected revenue for the third year would be approximately $45,000.00. The operating expenses of Punalu'u Water & Sanitation, LLC mainly fall in two line items, service fees paid to Aqua Engineers, Inc. ("Aqua Engineers"), which operates and maintains the potable water and wastewater systems for Punalu'u Water & Sanitation, LLC, and electricity payments to Hawaii Electric Light Company. The newly signed service contract with Aqua Engineers is $86,199 per year, including taxes. Aqua Engineers is expecting a 2% yearly increase on its service fees. If there is no significant increase of water consumption by customers, the PWS' electricity usage will remain consistent as electricity is primarily used to power a pump to pump water. PWS projects $5,000 in monthly expenses for its utility bills with a 1% increase in the the second year and a 10% increase starting the third year. PWS has prepared a budget plan for operating PWS and is expecting a total operating loss of around $380,000. Following the recommendation of Aqua Engineers, PWS has also budgeted $120,000 for facility and equipment improvements over the next three years. This budget amount is based on the PWS and Aqua Engineers' best estimates and is subjectto change depending on whether there are changes in circumstances and if there is a need to increase the plant capacity during the next three years. Exhibit B Page 1 of 4