Bylaws cont.

c.      Any other provisions of these Bylaws to the contrary notwithstanding, the Association shall not approve or enter into any covenant or other written instrument for the purposes of making any lands or property subject to the provisions of Rancho Santa Fe Protective Covenant or the jurisdiction of the Association, except in compliance with the provisions of this subsection (c). For the purpose of this subsection, any such action taken by the Board may be referred to as an “annexation.”

1. No annexation shall be valid unless and until the Board of Directors shall first conduct a hearing thereon at which Association members shall have the right to speak. Notwithstanding the existence of a quorum at a meeting of the Board of Directors, approval by the Board of any annexation shall require the affirmative vote of at least a majority of all members of the Board.
2. With respect to any lands or property within any of Blocks 1 through 48, inclusive, including lots 3 and 4 of Block 38, commonly known as Block M, and Blocks A through H, inclusive, as described in Map 1742, filed in the Office of the County Recorder of San Diego County, California on December 28, 1922, or within any part of Map 2089 filed in the Office of said County Recorder on April 17, 1928, or within any part of Map 2129 file in the Office of said County Recorder on November 22, 1928, no such approval by the Board of Directors shall become effective until thirty (30) days written notice of such approval has been given by mail to all members of the Association. If during such thirty (30) day period there shall be presented to the Secretary of the Association a petition signed by one hundred (100) of the voting members of the Association protesting the approval, then such approval shall not become effective unless thereafter approved by the vote of a majority of the members of the Association present and voting at a members’ meeting (at which a quorum is present) called and held as prescribed in the Bylaws for special meetings, or by written ballot as provided in the California Corporation Code.
3. With respect to any other real property, with the exception of that described in the foregoing paragraph (2), no such approval given by the Board of Directors for any annexation shall become effective unless an until approved by a majority of the members of the Association present and voting at a members’ meeting (at which a quorum is present) called and held as prescribed in the Bylaws for special meetings, or by written ballot as prescribed in the California Corporation Code. Notice of any such special meeting shall first have been given by mail to all members of the Association not less than thirty-five (35) days prior thereto.

d.      Notwithstanding the provisions of Section 6 (b) of this Article lV, any approval given by the Board of Directors for any modification of Local Protective Restrictions of the Rancho Santa Fe Protective Covenant shall not become effective until thirty (30) days after giving notice to the Association members of the proposed modification, as contained in the minutes of the meeting at which such approval was given, by any one of the following methods: (i) notice mailed to each member by first class mail, postage prepaid; (ii) notice published in one or more newspapers that the Board of Directors determines have general circulation in Rancho Santa Fe; or (iii) notice posted on the Association bulletin board. If during such thirty (30) day period there shall be presented to the Secretary a petition signed by one hundred (100) voting members of the Association protesting against such approval, such approval shall not become effective unless approved by a majority of a quorum of voting members at a members’ meeting called and held within thirty (30) days after the filing of such petition. During the periods referred to above, the Board and/or Association shall not consummate the transaction and shall notify affected third parties of the provisions contained herein.

e.      Regulations may be adopted, amended or repealed after a hearing thereon conducted by the Board of Directors at which Association members shall have the right to speak, by affirmative vote of at least five (5) members of the Board of Directors. The Board of Directors shall cause written notice to be personally delivered or mailed by first class mail to each voting member of the proposed regulation (or amendment or repeal thereof) and the hearing thereon not less than fifteen (15) days prior to the hearing date. Any such regulation (or amendment or repeal thereof) shall have full force and effect immediately upon being so adopted.

f.      The Board of Directors shall cause a budget for each fiscal year to be regularly prepared and distributed to all members not less than sixty (60) days prior to the beginning of each fiscal year of the Association, regardless of the number of members or the amount of assets of the Association. The budget shall contain the following information: (i) the estimated revenue and expenses of the Association on an accrual basis; (ii) the amount of the total cash reserves of the Association currently set aside; (iii) an itemized estimate of the remaining life of, and the method of finding to defer repair, replacement or additions to major components of the areas and facilities for which the Association is responsible; and (iv) a general statement setting forth the procedures used by the Board of Directors in calculating and establishing reserves to defray the cost of repair, replacement or addition to major components of the areas and facilities for which the Association is responsible.

g.      The Board of Directors shall cause to be prepared and distributed to all members, within one hundred twenty (120) days after the close of each fiscal year, an annual report, which shall include: (i) a balance sheet as of the end of each fiscal year; (ii) an operating (income) statement for the fiscal year; (iii) a statement of changes in financial position for the fiscal year; (iv) any information required to be reported under Section 8322 of The California Corporations Code; and (v) for any fiscal year in which the gross income to the Association (including all regular and special assessments levied upon all members during the fiscal year) exceeds $75,000, a copy of a review of the annual report prepared in accordance with generally accepted accounting principles by a licensee of the California Stare Board of Accountancy. If the annual report is not prepared by an independent accountant, it shall be accompanied by the certificate of an authorized officer of the Association that the statements were prepared from the books and records of the Association without independent audit or review. For any fiscal year in which the annual report is not prepared by a licensee of the California State Board of Accountancy, the statements prepared in connection with the annual report shall be prepared in conformity with generally accepted accounting principles, or some other basis of accounting which reasonable sets forth the assets and liabilities and the income and expenses of the Association, and discloses the accounting basis used in the preparation. Upon written request of a member, the Board of Directors shall promptly cause the most recent annual report to be sent to the requesting member.

h.      The Board of Directors shall cause to be distributed to all members, within sixty (60) days prior to the beginning of each fiscal year, a statement of the Association’s policies and practices in enforcing its remedies against members for defaults in the payment of annual assessments, including the recording and foreclosing of delinquent assessment liens.

i.      Absent prior authorization by a majority of the voting members pursuant to written ballot, the Board of Directors shall not initiate or pursue any activity nor authorize or incur any expense in connection with any proposition or proposal which in any way deals with or concerns (i) the potential incorporation as a city of all (or any portion of) the properties subject to the Rancho Santa Fe Protective Covenant or to the jurisdiction of the Association, either independently or in common with other communities, or (ii) the potential annexation into a city of all (or any portion of) the properties subject to the Rancho Santa Fe Protective Covenant or to the jurisdiction of the Association, either independently or in common with other communities.  

Section 7.            Self-Dealing Contracts.

            As used in this section, a “self-dealing contract” is any contract or transaction (i) between the Association and one or more of its Directors, or between the Association and any corporation, firm or association in which one or more of its Directors has a material financial interest, or (ii) between the Association and a corporation, firm or association of which one or more of its Directors are Directors of the Association.  Pursuant to Section 7233 of the California Nonprofit Corporation Law, no self-dealing contract shall be void or voidable because such Director(s) or corporation, firm or association are parties or because such Director(s) are present at the meeting of the Board which authorizes, approves or ratifies the self-dealing contract, if:

a.            All material facts are fully disclosed to or otherwise known by the members and the self-dealing contract is approved by the members in good faith (without including the vote of any membership owned by such interested Director(s); or

b.            All material facts are fully disclosed to or otherwise known by the Board and the Board authorizes, approves or ratifies the self-dealing contract in good faith by a vote sufficient (without counting the vote of the interested Director(s), and, in the case of a self-dealing contract described above, the Board resolves and finds that the contract is just and reasonable at the time it is authorized, approved or ratified; or

c.            The person asserting the validity of the self-dealing contract sustains the burden of proving that the contract was just and reasonable as to the Association at the time it was authorized, approved or ratified.

Section 8.            Standard of Conduct.

            A Director shall perform the duties of a Director, including duties as a member of any committee of the Board upon which the Director may serve, in good faith, in a manner such Director believes to be in the best interest of the Association and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances.  In performing the duties of a Director, a Director shall be entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, in each case prepared or presented by:

1.            One or more officers or employees of the Association who the Director believes to be reliable and competent in the matters presented;

2.            Counsel, independent accountants or other persons as to matters which the Director believes to be within such person’s professional or expert competence; or

3.            A committee of the Board upon which the Director does not serve, as to matters within its designated authority, which committee the Director believes to merit confidence, so long as, in any such case the Director acts in good faith, after reasonable inquiry when the need therefore is indicated by the circumstances and without knowledge that would cause such reliance to be unwarranted.

Section 9.            Removal of Directors.

            Directors of the Association may be removed from office as follows:

a.            The Board of Directors may declare vacant the office of a Director who, during such Director’s term of office, (i) has been declared of unsound mind by a final order of court, (ii) has been convicted of a felony, (iii) had his or her membership rights suspended pursuant to the provisions of Section 3(b) of Article ll of these Bylaws or (iv) shall have an unexcused absence from four (4) consecutive meetings of the Board of Directors; provided, however, a Director shall be excused from attending a meeting of the Board of Directors if (1) an oral or written request for such excuse is received, prior to such meeting, by the President or Secretary and (2) the Board of Directors, by a majority vote taken at such meeting, excuses said Director.

b.            Any Director or all of the Directors may be removed if the removal is approved by the affirmative vote of a majority of the voting members voting by written ballot, whether without a meeting or following a special meeting of members duly called and held for the purpose of distributing written ballots on the question of removal, where the total number of votes cast by ballot equals or exceeds the quorum required to be present at a special meeting.

c.              A reduction in the number of authorized Directors shall not remove any Director prior to the expiration of such Director’s term of office.

ARTICLE V                        DUTIES OF OFFICERS

Section 1.              Officers.

            The officers of the Association shall be President, Vice President, Secretary, Treasurer, Assistant Secretary, Chief Financial Officer, Manager and Building Commissioner.  No individual may hold more than one (1) office, except the same individual may hold one or more of the offices of Secretary, Manager, Chief Financial Officer, and Building Commissioner.  All officers are chosen by and serve at the pleasure of the Board of Directors.

Section 2.             Election of Officers.

            As soon as possible after the election, following each annual meeting of members, the Board of Directors shall hold a special meeting for the purpose of organization, election of officers and the transaction of other business.

Section 3.            President.

            The President shall preside over all meetings, shall sign all instruments in writing which have been approved by the Board of Directors, shall be recognized as the official head of the Association, and shall have such powers as generally pertain to the office of the President, together with such other powers as may be conferred upon that office by the Board.  The President shall consult with the President of the Art Jury prior to appointing anyone to serve as a member of the Art Jury.

Section 4.              Vice President.

            The Vice President shall assume the duties of the President whenever the latter is absent or is unable or refuses to act.  If both, the President and Vice President are unable to act, the Board shall appoint a Director to serve as a President Pro Tem.

Section 5.              Secretary.

            The Secretary shall keep a record of the proceedings of the Board of Directors and of the members, and shall perform such other duties as may be prescribed by the Board.  The Secretary shall keep a record containing the list of the members of the Association, with the name and address of each member. The Manager shall at all times serve as the Secretary.

Section 6.            Treasurer.

            The Treasurer shall be responsible for serving as Chair of the Audit/Finance Committee, and for providing advice concerning the financial affairs of the Association.  The Treasurer shall be selected each year from among the sitting Board of Directors.

Section 7.            Chief Financial Officer.

            The Chief Financial Officer shall be responsible for safeguarding and accounting for the receipts and disposition of assets of the Association.

Section 8.            Assistant Officers.

            The Board of Directors may at any time appoint one or more Assistant Secretaries, Assistant Treasurers and such other officers as the business of the Association may require, each of whom shall hold office for such period, have such authority and perform such duties as the Board of Directors may from time to time determine.

Section 9.            Association Manager.

            The Manager shall be the chief administrative officer and Secretary of the Association. The powers, duties and manner of appointment of the Manager are specified in detail in Article VII.

Section 10.            Building Commissioner.

a.            There is created the office of Building Commissioner, with such powers as are authorized by the Articles of Incorporation, and such duties as are prescribed in the Rancho Santa Fe Protective Covenant.  The Building Commissioner shall be appointed by the Board of Directors upon the recommendation of the Association Manager.

b.            The Building Commissioner shall perform such other duties and have such other responsibilities as may be prescribed by the Board of Directors and the Association Manager, and shall be responsible to the Association Manager in performance of the Building Commissioner’s duties.

ARTICLE VI                        ASSOCIATION COMMITTEES   

            The Board of Directors may establish committees of members in good standing to provide the Board with advice and counsel toward meeting Association objectives regarding open space, recreation, parks, finance and such other matters as the Board shall from time to time deem appropriate.  The Board shall, at the time of the establishment of each such committee, define the committee’s responsibilities and the Board shall monitor the performance of each such committee.  All committees shall be under the direct supervision and subject to control of the Board of Directors.

ARTICLE VII                        ASSOCIATION MANAGER

Section 1.            Creation of Office.

            The position of Association Manager (herein referred to as “Manager”) is hereby created.

Section 2.            Appointment of Manager.

            The Manager shall be appointed by affirmative vote of at least five (5) members of the Board of Directors.  The Manager shall be chosen by the Board solely on the basis of executive and administrative qualification with special reference to actual experience in or knowledge of accepted practice in respect to the duties of the office as hereinafter set forth.  The terms of the Manager’s employment may be set forth in a written employment contract.  No member of the Association shall receive such appointment. 

Section 3.            Removal of Manager.

            The Board of Directors may remove the Manager at any time by affirmative vote of at least four (4) members of the Board of Directors.

Section 4.            Powers and Duties of Manager.

            The Manager shall be the chief administrator of the Association.  The Manager may head one or more departments and shall be responsible to the Board of Directors for the proper administration of all affairs of the Association.  To that end, the Manager shall have power and shall be required to:

• Appoint and, when necessary for the good of the Association, suspend or remove any employees of the Association except as otherwise provided by the Rancho Santa Fe Protective Covenant, Articles of Incorporation, employment contracts, or law; however, the Manager may authorize the head of a department to appoint, suspend, or remove subordinates in such department.  No member of the Association may be a full-time, paid employee of the Association.
• Prepare the budget annually and submit it to the Board of Directors together with a message describing its important features, and be responsible for its administration after adoption.
• Cause to be prepared and submit to the Board of Directors and Treasurer within sixty (60) days of the fiscal year end a complete written report on the finances and administrative activities of the Association for the preceding year.
• Keep the Board of Directors advised of the current financial condition and future needs of the Association, and make such recommendations as the Manager may deem desirable.
• Recommend to the Board of Directors job descriptions and a standard schedule of pay for each position in the Association, including minimum, intermediate and maximum rates.
• Recommend to the Board of Directors adoption of such measures as the Manager may deem necessary or expedient for the health, safety, or welfare of the community or for the improvement of administrative services.
• Consolidate or combine positions, departments, or units under the Manager’s jurisdiction, with the approval of the Board of Directors.
• Attend all meetings of the Board of Directors unless excused therefrom, and take part in the discussion of all matters coming before the Board.  The Manager shall be entitled to notice of all special meetings of the Board.
• Supervise the purchase of all materials, supplies and equipment for which funds are provided in the budget, let contracts necessary for operation or maintenance of Association services for amounts up to such maximum as may be determined by resolution of the Board of Directors, receive sealed bids for purchases or contracts in excess of such maximum and present them to the Board for approval, and advise the Board on the advantages or disadvantages of contract and bid proposals.  No purchase shall be made, contract let or obligation incurred for any item or service which exceeds the current budget appropriation without a supplemental appropriation by the Board.  No contract for construction shall be let, nor shall any construction be otherwise undertaken, except by authority of the Board.
• See that the provisions of the Rancho Santa Fe Protective Covenant, Articles of Incorporation, these Bylaws, and all rules, regulations and resolutions of the Board of Directors are duly enforced.
• Investigate the operations of the Association or any Association department.  Investigate all complaints in relation to matters concerning the administration of the Association, and see that all franchises, permits and privileges granted by the Association are faithfully observed.
• Devote full time to the discharge of the Manger’s duties.

Section 5.            Control of Personnel.

            Except for the purpose of inquiry, the Board of Directors and its members shall deal with the Association personnel solely through the Manager, and neither the Board nor any member thereof shall give orders to any subordinates of the Manager, either publicly or privately, neither the Board nor any of its members shall request or direct the Manager to appoint or remove any person.

Section 6.            Emergencies.

            In case of accident, disaster, or other circumstances creating a public emergency, the Manager may award contracts and make purchases for the purpose of meeting said emergency, but the Manager shall file promptly with the Board of Directors a certificate showing such emergency and the necessity for such action, together with an itemized account of all expenditures.

Section 7.            Compensation.

            The Manager shall receive such compensation as the Board of Directors shall fix from time to time by agreement or resolution.

Section 8.            Vacancy.

            Any vacancy in the office of Manager shall be filled by the Board of Directors as soon as possible after the effective date of such vacancy.

ARTICLE VIII            INDEMNIFICATION

            The Association shall have and agrees to exercise the power to indemnify any person who was or is a party or is threatened to be made a party to any proceeding by reason of the fact that such person is or was a Director, officer, employee, or member of the Art Jury of the Association, and may exercise the power to indemnify any person who was or is a party or is threatened to be made a party to any proceeding by reason of the fact that such person is or was an agent of the Association, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with such a proceeding to the full extent allowed by Section 7237 of the Nonprofit Corporation Law.

ARTICLE IX                        INSTRUMENTS, DEPOSITS AND FUNDS

Section 1.            Contracts.

            The Board of Directors may authorize any officer or agent of the Association, in addition to the officers so authorized by these Bylaws, to enter into any contract or execute and deliver any instrument in the name of, and on behalf of, the Association, and such authority may be general or confined to specific instances.  Unless so authorized, no officer, agent or employee shall have any power or authority, except as in these Bylaws provided, to bind the Association by any contract or engagement, or to pledge its credit or to render it liable pecuniarily for any purpose or in any amount.

Section 2.            Signatures.

            All checks, drafts, or orders for the payment of money, notes, or other evidences of indebtedness issued in the name of the Association, shall be signed by the Treasurer and counter-signed by the President, unless otherwise directed by resolution of the Board of Directors as provided in Section 1 hereto.

Section 3.            Deposits.

            All funds of the Association shall be deposited from time to time to the credit of the Association in such banks, trust companies or other depositories as the Board of Directors may select.

Section 4.            Gifts.

            The Board of Directors may accept on behalf of the Association any contribution, gift, bequest or devise for the general purposes or for any specific purpose, of the Association.

Section 5.            Books.

            The accounting books and records, and the minutes of proceedings of the members, the Board of Directors and committees, shall be open to inspection upon written demand of any Association member in good standing at any reasonable time during usual business hours, for a purpose reasonably related to such member’s interests as a member.  Any Association member may obtain from the Association copies of said minutes, books, records or documents upon payment of reasonable reproduction costs.  Upon written request of any Association member, the Board may permit inspection of other Association records provided, however, that unless the Board permits otherwise no member shall inspect the records of an election for Directors or other vote outside the presence of the inspectors of elections for such election or vote.

ARTICLE X                        NOTICES

Section 1.            Mailing.

            All notices required under these Bylaws to be given to members must be given in writing by depositing the same in the U.S. Mail, postage prepaid, properly addressed to the person to whom it is to be given at such person’s last known address as shown on the records of the Association.

Section 2.            Time of Notices.

            Unless specified otherwise in these Bylaws, notices of hearings shall be given in the time and manner prescribed by the Board of Directors.

ARTICLE XI                        BYLAWS AND AMENDMENTS TO BYLAWS

Section 1.            By Members.

            Any of these Bylaws may be amended or repealed, and any Bylaw may be adopted, amended or repealed, by the written consent of voting members entitled to exercise a majority of the voting power of the Association, or by the vote of majority of a quorum at a meeting of Association members duly called for the purchase thereof according to these Bylaws.  The Board of Directors shall have no power to amend or repeal any bylaw or amendment adopted b the members of the Association, or to adopt any bylaw repealed by the members of the Association.

Section 2.            By Board of Directors.

            Subject to the right of Association members to adopt, amend, or repeal bylaws, any of these Bylaws may be amended or repealed, and any bylaw may be adopted, amended or repealed by the Board of Directors, unless such action would:

• Materially and adversely affect the rights of members as to voting, dissolution,

redemption, or transfer;

• Increase or decrease the number of members authorized in total for any class;
• Effect an exchange, reclassification or cancellation of all or part of the membership; or
• Authorize a new class of membership;

Provided, however, that such adoption, amendment or repeal shall be void and of no effect unless it follows a hearing thereon conducted by the Board of Directors at which Association members shall have the right to speak, after written notice of the proposed action and the hearing thereon is given to the members of the Association at least fifteen (15) days before such hearing; provided, however, that whenever a bylaw requires for Board action the affirmative vote of a large proportion of the Board than is otherwise required, the bylaw requiring such greater vote shall not be altered, amended or repealed by the Board except by such greater affirmative vote.

Section 3.            Effective Date of Amendments.

            Any action taken in accordance with these Bylaws to adopt, amend or repeal any bylaw shall become effective immediately upon being so taken unless a later date is provided for as part of such action.

Section 4.            Savings Clause.

            Any provision of these Bylaws which conflicts with the Rancho Santa Fe Protective Covenant, the Articles of Incorporation, or law shall be void and have no force or effect.  The remaining Bylaws shall remain in full force and effect.

Section 5.            Place Where Bylaws and Articles Kept.

            The original or copy of these Bylaws, as amended, or otherwise altered to date, certified by the Secretary of the Association, and the Articles of Incorporation, shall be recorded and kept in a book which shall be kept in the Office of the Association, and such book shall be open to inspection by any Association member at all reasonable times during office hours.

Section 6.            Effective Date of Original Bylaws.

            These Bylaws shall become effective immediately upon their adoption.

ARTICLE XII                        CORPORATE SEAL

            The Seal of the Association shall consist of a circle having the words, “Rancho Santa Fe Association, California, Incorporated July 14, 1927”.

Originally adopted:  August                        1927

Amended:                June                           1950                       

                                 June                          1956

                                 April                           1959

                                 April                           1969

                                 May                           1969

                                 June                           1969

                                 November                   1972

                                 February                      1973

                                 May                              1975

                                 October                        1975

                                 February                       1976

                                 March                           1976

                                 April                              1976

                                 March                           1977

                                 April                              1977

                                 February                        1978                       

                                 March                             1979

                                 November                       1980                       

                                 May                                1982

                                 September                      1983

                                 January                           1984

                                 June                                1988

                                 May                                 1989                       

                                 November                       1990

                                 January                           1991

                                 June                                 1992

                                 December                        1992

                                 September                       1993

                                 November                        1993

                                 December                        1994           

                                 January                            1995

                                 December                        2006

                                 November                        2008