Presentation for the 2009 Amended and Restated Bylaws for Green Valley Recreation, Inc. February 23, 2009
Introductory Remarks Marge Garneau – Bylaws Chair • Bylaws changed 19 times since 1978 • Reasons for the proposed changes • Internally inconsistent • Ambiguous • Not well-organized • To comply with the Arizona NonProfit Corporation Act • Some of the Bylaws do not reflect how GVR operates as an organization • Amendments over the years were done without the assistance of an attorney
Introductory Remarks (Continued) • Poor amendments not well drafted by previous Bylaws Committees • Poorly structured » Bylaws are not placed in the correct Articles » Reorganized to group “like” Sections in the same Article • Categories of membership classifications not correct
Introductory Remarks (Continued) • Do not comply with the Arizona Non- Profit Corporation Act – Major oversight by previous Committees » GVR is not complying with the law » Revisions bring Bylaws into compliance » Arizona statutes differ from existing Bylaws » Expand and clarify the statutes
Introductory Remarks (Continued) • Changes to the proposed Bylaws • Clarify terms • Correct inconsistencies • Ballot contains 10 different provisions that will be voted on • 9 of those Bylaws will be voted on separately by the members • The remaining provisions will be voted on as a whole
Introductory Remarks (Continued) • 9 provisions voted on separately • If these individually proposed Bylaw changes are not approved » The approved/disapproved Bylaw would be placed into the main document • Members encouraged Bylaws Committee to have a separate vote on these Bylaws
Introductory Remarks (Continued) • Members are encouraged to vote “YES” on all recommended Bylaws changes • Improve the structure and flow of the current Bylaws • Internally consistent • Comply with the law • Introduction of GVR’s attorney – Wendy Ehrlich
Review of Restated and Amended Changes to the Bylaws Wendy Ehrlich • Purpose of Bylaws • To regulate and manage the affairs of the corporation • Can’t be inconsistent with Articles of Incorporation or the law • Bylaws are adopted when Corporation is first formed • GVR established in 1978 - merger of two previous organizations • Initial Bylaws adopted that same year
Review of Restated and Amended Changes to the Bylaws (Continued) • General Process of Amending Bylaws • Generally, the practice of amending the Bylaws is much like amending the CC&R’s in a subdivision • If changes are made to the bylaws, they are drafted in a separate document - usually by an attorney, and are referred to as the “first” amendment to the Bylaws
Review of Restated and Amended Changes to the Bylaws (Continued) • When additional amendments are passed, they are contained in a third document entitled “second” amendment to Bylaws. • When there are four or more separate amendments to the Bylaws, an “amended and restated” bylaws is drafted
Review of Restated and Amended Changes to the Bylaws (Continued) • The purpose of the amended and restated document is to : • Incorporate all of the amendments that were made over the years • Reorganize the document • Correct any internal inconsistencies that may have occurred as a result of the amendments • Bring the provisions into compliance with law
Review of Restated and Amended Changes to the Bylaws (Continued) • GVR’s Process of Amending Bylaws • Amendments to GVR’s Bylaws were not drafted or reviewed by attorneys • They were drafted by Bylaws Committee members and board members in some instances as in 1997 they were drafted by members • Amendments were not contained in a separate document where they could be easily identified, they were incorporated into the main document every year
Review of Restated and Amended Changes to the Bylaws (Continued) • No efforts were made to determine whether the existing provisions or the amendments complied with Arizona law - specifically, the Nonprofit Corporation Act adopted in 1997 • Result of this process was: • Some of the provisions were ambiguous - in the 2007 bylaws, increases in dues had to be “justified” by 9 members of the Board
Review of Restated and Amended Changes to the Bylaws (Continued) • Some of the provisions are now inconsistent: Article II Section 3 refers to establishing membership by a “purchase” of property • Article II, Section 2 defines a member as an “owner” of property • Is someone who inherits a property a member of GVR?
Review of Restated and Amended Changes to the Bylaws (Continued) • Some of the provisions were vague • The current quorum requirement for actions of the members is “established by the number of ballots returned” • Some of the provisions did not comply with the NPCA • Bylaw amendments require a approval of a majority of the members - the NPCA provides that bylaws can be amended by a majority vote of all members or 2/3 of those voting, whichever is less
Review of Restated and Amended Changes to the Bylaws (Continued) • Provisions in the document are poorly organized. For example, the types of “fees” that GVR can impose are not easily found in one section: • Assigned member fees in Article I, Section 2 • New member capital fees are found in Article I, Section 3 • Lifecare fees are in Article 1, Section 4 • Voting Provisions are in Article II, Section 4 and Article XI
Review of Restated and Amended Changes to the Bylaws (Continued) • Because of these issues, the ambiguity, vague provisions, internal conflicts, and the noncompliance with the NPCA, it was determined that the time had come to rewrite the Bylaws - and that is the document you have in Question 10 • Since it is a complete re-write - a reorganization and a clarification - it is not practical and perhaps not possible, that members vote on the changes individually
Review of Restated and Amended Changes to the Bylaws ( Continued) • If members voted on individual changes, and did not pass them all, the result would likely be another set of Bylaws with internal inconsistencies • The nine separate items that you are voting on • Are either “new” provisions that the Board is proposing or are “substantive changes” to the existing Bylaws • As in the past, they are being proposed for separate votes
Review of Restated and Amended Changes to the Bylaws (Continued) • Reorganization of Bylaws and Clarification of Terms • Article I - No significant changes - language that referenced old dates have been removed • Article II - Most difficult section to rewrite - intention was to incorporate the current policies and practices of GVR:
Review of Restated and Amended Changes to the Bylaws Wendy Ehrlich, GVR’s Attorney • Definition of “GVR Property” - more clearly drafted and includes certain commercial properties previously omitted in the definition • Qualified Member is defined as any person who holds title to a GVR property - removing the inconsistency that a qualified member be a purchaser” of a GVR property
Review of Restated and Amended Changes to the Bylaws (Continued) Allows members to “assign” their usage of the facilities to occupants - either as assigned members or tenants - by separating “tenants” from “assigned members” - the purpose was to create a new category of members to address changes in ownership of GVR properties over the years: those individuals who occupy a GVR property but do not own it and are not tenants – examples: a long-standing GVR member
Review of Restated and Amended Changes to the Bylaws (Continued) transfers title of the property to a child for estate purposes - a GVR member places the property in a trust. These individuals, who are not “tenants” may be “assigned members” and have the right to use GVR’s facilities. Under a separate vote, is whether these “assigned” members may also be assigned the right to “vote” as GVR members and serve on the Board.
Review of Restated and Amended Changes to the Bylaws (Continued) • A definition section has been added where no previously existed. Use of facilities are now in a separate section and address the rights of “members” and the rights of “life care privileges.” Currently these provisions are lumped in with “voting rights”
Review of Restated and Amended Changes to the Bylaws (Continued) • The only significant change is that where previously only 2 GVR membership cards were allotted per household, now all GVR members, Assigned members, Life Care members, members, commercial residents and tenants are assigned cards
Review of Restated and Amended Changes to the Bylaws (Continued) • Article III • Only significant change is to Section 3 - where all GVR fees are contained in one section and are more clearly defined to reflect the policies and practices of GVR
Review of Restated and Amended Changes to the Bylaws (Continued) • For example: The Board and Bylaws Committee agreed that the New Member Capital Fee should not apply to: • New members who become owners by virtue of a intra-family transfer (parents put the property in their child’s name) • Members who become owners of a GVR property by virtue of marrying a GVR member
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