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CC SR 20161004 03 - PVPLC Board of Directors InvolvementRANCHO PALOS VERDES CITY COUNCIL MEETING DATE: 10/04/2016 AGENDA REPORT AGENDA HEADING: Regular Business AGENDA DESCRIPTION: Consideration and possible action to analyze the desired level of involvement and communication enhancements with the Palos Verdes Peninsula Land Conservancy (PVPLC) Board of Directors. RECOMMENDED COUNCIL ACTION: (1) Consider options for increased involvement and communication with the PVPLC Board of Directors. FISCAL IMPACT: None Amount Budgeted: N/A Additional Appropriation: N/A Account Number(s): N/A ORIGINATED BY: Katie Lozano, Administrative Analyst II , REVIEWED BY: Cory Linder, Director of Recreation and Parks � L- APPROVED BY: Doug Willmore, City Manager ATTACHED SUPPORTING DOCUMENTS: A. Letter from PVPLC Board of Directors (page A-1) B. Preserve Management Costs (page B-1) C. PVPLC Board of Directors Job Description (page C-1) D. PVPLC Bylaws (page D-1) BACKGROUND AND DISCUSSION: At the April 19, 2016, City Council meeting, the City Council directed Staff to bring back options for formalizing the City Council's relationship with the PVPLC Board of Directors to further the mission of excellent Preserve management, unified mission, and enhanced communication between the two bodies. The need for effective management of the Preserve has become increasingly apparent over the past several years as use has increased substantially, thereby impacting the resources. With the need for increased management also comes the need to maximize resources and efficiency. City and PVPLC management roles have shifted since 2010, with the City's dedicated resources more than doubling (Attachment B). 1 The PVPLC has land management responsibilities for 1,600 acres in four Peninsula cities: Rolling Hills, Rolling Hills Estates, San Pedro (Los Angeles) and Rancho Palos Verdes. Of that 1,600 acres, 1,400 acres are located in the City and comprise the Palos Verdes Nature Preserve. The PVPLC's land management roles in the City are derived from the 2004 City Council -adopted draft Natural Communities Conservation Plan (NCCP) and the City/PVPLC Management Agreement. PVPLC management roles include habitat restoration, invasive weed eradication, and monitoring land and making management recommendations to the City to achieve compliance with PVPLC's future conservation easement over the Preserve. In light of the fact that 87.5% of PVPLC's co -managed property is located in the City, is vital to the preservation of community character, and that the interface of City and Preserve programs is close and continuing, the City Council expressed a desire for direct representation on the PVPLC Board. The City Attorney advises that this is legally permissible since it does not violate conflict of interest laws if there is no financial interest (Government Code §87100) as an unpaid position, nor does it constitute dual office holding (Government Code §1123) since Board membership is not public office. Accordingly, a variety of arrangements would be possible. However, PVPLC has declined Council's request for Board representation, and has offered other options for increased Council involvement with PVPLC operations outlined below and in the attached letter from PVPLC (Attachment A): City Preserve Subcommittee (standing or ad hock A subcommittee could be formed consisting of one or two members of both the City Council and the PVPLC Board. The subcommittee could meet regularly or as needed. Staff Appointment: The City Council could direct the City Manager to have City Staff in attendance at all PVPLC Board meetings, where appropriate, and provide regular updates to the City Council. President's Advisory Council: A Council Member would be appointed to the PVPLC President's Advisory Council. In this capacity, they would be invited to an annual meeting where Advisory Council's feedback is solicited and PVPLC shares information on Preserve projects and efforts. Involvement could be at the member's discretion. Members also are provided with regular updates on Preserve management matters. PVPLC has declined the City's request to review the Board of Directors bylaws. However staff was able to obtain a version by searching online (Attachment D). Because PVPLC did not directly provide the bylaws to the City, the City is not certain it is the most current version. Depending on which of the above options is chosen, the City Attorney would review how to implement the change, but possible actions range from adoption of resolutions by the bodies, or an ordinance, and potential amendment of the PVPLC bylaws. For reference, the PVPLC's Board Member job description is attached (Attachment C). 2 ALTERNATIVES In addition to the Staff recommendation, the following alternative actions are available for the City Council's consideration: 1. The City Council may continue with the current level of involvement/com- munication with PVPLC regarding PVPLC's co -management of City - owned Preserve properties. 2. The City Council may direct Staff to research alternative land management options. 9 July 7, 2016 Via Electronic Mail PRESERVING LAND AND RESTORING HABITAT FORTH E EDUCATION AND ENJOYMENT OF ALL Honorable Mayor and Council Members of the City of Rancho Pales Verdes 30940 Hawthorne Blvd. Rancho Palos Verdes, CA 90275 Subject: City Council Agenda Item for the August 2, 2016 Concerning Palos Verdes Peninsula Land Conservancy Honorable Mayor and Council Members: Creating the Palos Verdes Nature Preserve has over time been the product of a tremendous partnership between the Palos Verdes Peninsula Land Conservancy (PVPLC) and the City of Rancho Palos Verdes. PVPLC introduced preservation of our coastal open space to the public and to prior city councils, persevered on behalf of its supporters and City residents, and raised and continues to raise significant financial contributions and volunteer efforts on behalf of the Preserve. For its part, the City made possible a process (the NCCP) to achieve preservation and contributed acquisition funding and lands to the Preserve, and since that time has satisfied its NCCP-mandated funding obligations. PVPLC is proud of its heritage in shaping the Peninsula, proud of the community for supporting these efforts, and appreciates the opportunity to help the City fulfill its own open space commitments and its goals of providing a beautiful, natural, public resource. Decently, the City Council has identified its desire to have more information regarding PVPLC's activities affecting the Preserve. PVPLC respects this desire and wants to worn with the City in every reasonable way to achieve this result. When considering the City Council's involvement with PVPLC going forward, it is worth recalling that: • PVPLC staff and City staff have numerous regular routines for the sharing of information on Preserve priorities and work. The City has, through its management agreement with PVPLC, significant rights and power to approve what occurs in the Preserve so long as the primacy of habitat protection is not violated. * PVPLC staff provides monthly updates that City staff is informed of major and strategic issues. 916 SILVER SPUR ROAD A207 -ROLLING HILLS ESTATES. CA 90274-3826T 310.541.7613 F 310.541.7623 WWW,PVPLC.ORA-1 Honorable Mayor and City Council City of Rancho Palos Verdes July 7, 2016 Page 2 City Council members are invited to PVPLC events and receive PVPLC newsletters and other communications, via social media and otherwise, all of which afford opportunities to build an understanding of what PVPLC is doing and PVPLC's relationship with the community. +� Members of PVPLC's Board of Directors reach out regularly to Council members to establish relationships in order to facilitate better communication. Although PVPLC believes these and other efforts already allow for substantial information sharing between PVPLC and the City Council, PVPLC welcomes greater communication opportunities with the City Council. To this end, PVPLC suggests the following possibilities to the City Council and to City staff that PVPLC believes will create the relationship between City Council and PVPLC's Board of Directors that is necessary, appropriate and will benefit bath parties: • The City of RPV creates a Preserve subcommittee of two Council members who meet regularly with the PVPLC Board President and Executive Director or such other PVPLC Board members as may benefit the conversations. This has historically been the City Council's preferred approach to managing matters of special interest to the Council. • A City Council member joins the PVPLC's President's Advisory Council. Although this group was formed to bring major donors together to provide their advice and experience to the full breadth of the organization and the work of the President's Advisory Council goes beyond issues affecting the Preserve, PVPLC acknowledges that the City can be an important member of this group. • Along with other governments that have jurisdiction over the Peninsula, create an Open Space Council of the Peninsula, with members comprised of mayors (or their delegates) and city managers (or their delegates) of the four Peninsula cities, the 40 District Supervisor of the Los Angeles County Board of Supervisors (or his or her delegate), the Los Angeles City Council District 15 councilmember, and PVPLC's Board President and Executive Director. This Open Space Council would meet quarterly to hear from PVPLC, ask questions, exchange information and collaborate on ideas to advance open space protection and enhancement. e Without the necessity of formality, any member of the City Council may be delegated responsibility to meet regularly with PVPLC's Board President and Executive Director and PVPLC would welcome such meetings. Any City Council member may attend PVPLC Board meetings without the necessity of being a board representative. 916 SILVER SPUR ROAD # 207, ROLLING HILLS ESTATES. CA 90274-3826 T310.541.7613 F310-541.7623 V WW PVPLC.0R(�A_2 Honorable Mayor and City Council City of Rancho Pales Verdes July 7, 2016 Page 3 At a recent City Council meeting, one or more Council members suggested that one of its members be appointed to the PVPLC Board, whether as a voting member or ex officio. For various reasons, PVPLC's Board will not agree to put on its board an active representative of any government entity where PVPLC: currently contracts with that government entity. Whether or not this would constitute a strict legal conflict of interest (although the potential for legal breach of fiduciary duty would be significant in the City's proposal), PVPLC's Beard believes it would both constitute a practical conflict and create the appearance of impropriety. PVPLC is not a governmental or quasi -governmental entity where the representatives are elected by the public or appointed by elected representatives. It is a private, 501(c)(3) tax exempt California corporation with a legal fiduciary responsibility to all of its constituents to select board representatives who do not have a significant conflict of interest or appearance of conflict of interest with the mission and function of PVPLC. Also, having a board member who is conflicted in the mission of the organization can give rise to challenges to the organization's tax exempt status. From a board management perspective, it is impractical to include a representative from each interested government entity and it would be difficult for a single elected government official to take into account the needs of their own electorate as well as that of other local governments. Moreover, PVPLC is committed to recruiting and retaining board members who are fully involved in board governance and committees, publicly visible as representatives of the organization, and financially committed to personally giving funding as well as supporting fundraising activities. This type of board is incredibly important in the area of fundraising, and in maintaining long-term sustainability of the organization. Creating an alternate type of member unnecessarily diminishes this effort when better solutions are available. The PVPLC Board is firmly committed to finding the right, mutually agreeable solution with the City Council in line with the foregoing. We look forward to the opportunity to discuss this in greater detail with the City Council. Sincer L .P i Cassie Jones President, Board of Directors Palos Verdes Peninsula Land Conservancy cc: City Manager, City of Rancho Palos Verdes Executive Director, PVPLC 916 SILVER SPUR ROAD # 207. ROLLING HILLS ESTATES. CA 90274-3826 T 310.541.7613 F 310.541.7623 WWWPVYLC.oRCA- 3 City Costs - Palos Verdes Nature Preserve* Purpose FY 10-11 Amount FY 16-17 Amount Description Habitat Restoration $126,411 $166,500 Payment to PVPLC and City restoration activities City In -Kind Services $277,082 $881,525 Public services, enforcement, OSM staff, general maintenance, contractors, and field equipment. Non -wasting Endowment $10,000 $10,000 Annual contribution to fund PVPLC's conservation easement responsibilities post permit. TOTAL $413,493 $1,058,025 *This chart excludes the City's $50,000 Dedicated Habitat Restoration Fund PVPLC Costs - Palos Verdes Nature Preserve** Purpose FY 15-16 Amount Description Salaries/Contract Services $439,616 Staff salaries, project labor, accounting fees, irrigation installation, and surveys. Facility & Equipment $59,171 Building lease, vehicles, and equipment Other non -Personnel expenses $94,604 Supplies, insurance, computer services, travel, and equipment repairs. TOTAL $593,391 ** Excludes expenses for volunteer program management estimated at $40,000 and plant growth expenses. M PALOS VERDES PENINSULA, Palos Verdes Peninsula Land Conservancy BOARD MEMBER JOB DESCRIPTION The Palos Verdes Peninsula Land Conservancy is a 501(c)(3) independent non-profit California corporation with the mission to preserve land and restore habitat for the education and enjoyment of all. The Land Conservancy's board plays an important fiduciary role, and is responsible for corporate governance of the organization and secondarily for support of fundraising, including making personal significant financial contributions annually and asking others to contribute financially to the Conservancy. Board member responsibilities include that members act in accordance with legal standards and duty of care by staying informed and asking questions. Duty of loyalty is required in which board members must show undivided allegiance to organization's welfare. Duty of obedience is also important in which board members must stay faithful to the organization's mission. Roles & Responsibilities: Collectively, the Board of Directors should have expertise or experience in administration, financial management, investment, land acquisition, natural sciences, conservation and stewardship, law, fundraising, community outreach, education, and government. Individually, each Board Member will participate as follows: • Exercise fiduciary responsibility for the organization and its assets. • Attend all board meetings plus annual retreat. • Serve on at least one committee each year. • Make significant annual personal financial contributions, and contribute to special fund-raising projects such as land acquisition, endowment and stewardship. • Participate in all major fund-raising and friend -raising events (i.e., do at least one of the following for eaeh fundraising opportunity to support the Conservancy: contribute your service to help organize or conduct a fundraising activity, contribute directly, or recruit others who can contribute). • Serve as ambassadors to the community, the business sector, conservation partners, public officials, the media, and opinion leaders to leverage our conservation work, secure public funding, support sound conservation policies, and position Conservancy as a uniquely effective, highly respected conservation organization. • Participate in at least two outreach activities each year such as a walk -table, a booth, etc. in order to get a least a little `face -time' with the people we are trying to reach and serve. • Assist the Conservancy in gaining community support by exercising personal and professional contacts whenever possible and appropriate. • Accept a leadership position on the board as experience and time allow. • Establish and continuously evaluate and refine the mission and strategic plan of the organization. • Create and promulgate policy for the organization as a whole as well as for developing the Board. • Establish standards to measure conservation success as well as organization effectiveness and efficiency. • Select, evaluate, and set compensation for the Executive Director. • Serve the interest of the whole organization. Qualifications: • Enthusiasm and commitment to advancing the PVPLC's Mission and Vision. • Willing to contribute at least 4-6 hours per month (in addition to regular board meetings) to support the work of the board and the organization. C-1 • Will make personal financial contributions to the Conservancy. • Willing to ask others to contribute financially to the PVPLC, an organization you care passionately about and where you've contributed yourself. • Where knowledge and experience applies, will provide pro bono work/advice in addition to monetary contributions. • Experience with `friend -raising', building relationships, attendance at events, making introductions, making calls, writing letters, etc. • Experience or knowledge in at least one of the following areas: Community and public relations or outreach; conservation and stewardship of natural resources; finance; fundraising; law; nonprofit organization management; real estate transactions; volunteer recruitment; human resources; or other area in which the person would make a valuable contribution to the Conservancy. • Energetic and highly respected individuals, preferably well known within our service area. • Would find the experience meaningful, challenging, fun and rewarding. The Land Conservancy maintains high standards of corporate professionalism with legal and moral oversight, to ensure compliance with legal requirements and to safeguard organizational values, and avoid conflicts of interest. Annually, each board member must complete a disclosure form identifying any relationships, positions, or circumstances in which the Board member involved that he or she believes could contribute to a Conflict of Interest arising. In addition to an annual disclosure form, each Board member shall immediately disclose a conflict of interest. Such relationships, positions, or circumstances might include service as a director of or consultant to a not-for-profit organization, or ownership of a business that might provide goods or services to the Palos Verdes Peninsula Land Conservancy, or interest in a property under management or preservation by the Palos Verdes Peninsula Land Conservancy. C-2 BYLAWS OF PALOS VERDES PENINSULA LAND CONSERVANCY ARTICLE I NAME, PURPOSES AND PRINCIPAL OFFICE Section 1.1 Name. The name of this corporation is the PALOS VERDES PENINSULA LAND CONSERVANCY. Section 1.2 Purposes. The corporation is organized under the Nonprofit Public Benefit Corporation Law of California exclusively for charitable and educational purposes, within the meaning of Section 501(c)(3) of the Internal Revenue Code of 1954. The specific purposes of this corporation include, but are not limited to, the preservation of land for historic, educational, recreational, scenic or open space uses. Preservation of land shall be accomplished by acquiring real property or partial interests therein, including conservation easements as defined in California Civil Bode Section 815.2, and retarding appropriate instruments necessary to protect in perpetuity the physical environment of the area for wildlife, ecological and aesthetic purposes beneficial to the public interest. Section 1.3 Principal Office. The principal office of this corporation shall be located in Los Angeles County, State of California, at an address to be established by resolution of the board of directors. ARTICLE II MEMBERSHIP This corporation shall have no members. ARTICLE III BOARD OF DIRECTORS Section 3.1 Powers. This corporation shall have powers to the full extent allowed by law. All powers and activities of this corporation shall be exercised and managed directly by the D-1 board of directors or, if delegated, under the ultimate direction of the board. Section 3.2 Number of directors. The authorized number of directors shall be eleven. Section 3.3 Election and Term of Office of directors. 3.3.1 The initial eleven directors of the corporation shall be appointed by their execution of the articles of incorporation. of those eleven directors, six directors shall serve from the date of appointment through the first regularly scheduled annual meeting of the board, and for a term of two years thereafter, until a successor has been elected, qualified, and accepted as a replacement on the board. The remaining five initial directors shall serve from the date of their appointment, through the first regularly scheduled annual meeting of the board of directors, and for a term of one year thereafter, until a successor has been elected, qualified, and accepted as a replacement on the board. Thereafter, each director shall be elected for a term of two years. 3.3.2 Each director shall hold office until the expiration of the term for which the director was elected, unless said director resigns or is removed from the board. 3.3.3 No director may serve more than two consecutive terms. 3.3.4 All subsequent directors shall be elected at the annual meeting of the board to fill the vacancies then occurring. All then sitting directors shall be entitled to vote, by secret written ballot, for the directors to be elected. At the discretion of the board, the election may be conducted by mail. 3.3.5 The quorum for election of directors is two-thirds of the then sitting directors, rounded to the next whole number. If a quorum is not met upon the first regularly scheduled election as a result of a sitting director refusing to vote, said director shall automatically be removed from the board. 3.3.6 All persons who wish to become candidates for election to the board must identify themselves to the Nominating Committee at least forty-five days prior to the date set for the election of directors. The Nominating -2- D-2 Committee has the authority to recommend to the board the candidates it suggests for election. 3.3.7 All voting directors shall have allocated to them the number of votes corresponding to the number of vacancies then to be filled at that election. Each director may then cast his or her votes for the candidates standing for election allocating their votes among the candidates in any fashion, and the candidates with the greatest number of votes shall be elected. Votes may not be split into fractional shares, and in the event of any tie votes, such candidates shall not be elected, but the board shall fill said position or positions as if a vacancy existed on the board. Section 3.4 Vacancies. A vacancy shall be deemed to exist in the event that the actual number of directors is less than the authorized number for any reason. Designation of any director shall be effective upon receipt of written notice of such resignation by the board, the president, the vice president, or the secretary. The board may remove any director with or without cause by the vote of at least two-thirds of all then sitting directors. Unexcused absence of a director from three or more consecutive regular board meetings shall constitute Cause for removal. Vacancies may be filled by the board for the unexpired portion of the term of any director who does not complete his or her term. Section. 3.5 Annual Meeting. The annual meeting of the board of directors shall be held during the third week of October. Notice of the exact date, time, and place of the meeting shall be mailed to all directors at least 30 days in advance of the meeting. Section 3.6 Regular Meetings. The board, by resolution, may establish a schedule of regular meetings of the board. Section 3.7 Special etings Special Meetings of the board may be called by the president, or by any two (2) directors, by written notice delivered personally or by telephone or telegraph to each of the directors, or mailed by first class mail at least four (4) days or more prior to any such meetings. The notice shall state the time and place of such special meeting. Members of the board may participate in annual, regular, or special meetings of the board through the use of conference -3- D-3 telephone or similar communications equipment so long as all directors participating in such meeting can hear one another. Section 3.8 Quorum. A majority of the directors then in office shall constitute a quorum for the transaction of business, except to elect directors as provided in Section 3.3 of this Article III, or to adjourn as provided in Section 3.10 of this Article III. Every act or decision by a majority of the directors present shall be regarded as the act of the board, subject to the provisions of the California Nonprofit Corporation Law, especially those provisions relating to (i) approval of contracts or transactions in which a director has a direct or indirect material financial interest, (ii) appointment of committees, and (iii) indemnification of directors. A meeting at which a quorum is initially present may continue to transact business, notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting. Section 3.9 Waiver of Notice. The transactions of any meeting of the board, however called and noticed or wherever held, are as valid as though the meeting had been duly held after regular call and notice, provided (a) a quorum is present, and (b) either before or after the meeting, each of the directors not present signs a written waiver of notice, a consent to holding the meeting, or an approval of the minutes. The waiver of notice or consent need not specify the the purpose of the meeting. All waivers, consents, and approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Notice of a meeting shall also be deemed given to any director who attends the meeting without protesting before or at its commencement about the lack of adequate notice. Section 3.7.0 Adjournment. A majority of the directors present, whether or not constituting a quorum, may adjourn any meeting to another time and place. Notice of the time and place of holding an adjourned meeting need not be given, unless the meeting is adjourned for more than 24 hours, in which case personal notice of the time and place shall be given before the time of the adjourned meeting to the directors who were not present at the time of the adjournment. -4- Section 3.11 Standard of Care. UM B. General. A director shall perform the duties of a director, including duties as a member of any committee of the board on which the director may serve, in good faith, in a manner such director believes to be in the best interests of this corporation, and with such care, including reasonable inquiry, as an ordinarily prudent person in a like situation 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 corporation whom 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 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. A person who performs the duties of a director in accordance with the foregoing shall have no liability based upon any failure or alleged failure to discharge that person's obligations as a director, including, without limiting the generality of the foregoing, any actions or omissions which exceed or defeat the public and charitable purposes to which the corporation, and assets held by it, are dedicated. Non -liability of Directors. The directors shall not be personally liable for the debts, liabilities, or other obligations of the corporation. -5- D-5 C. Insurance for Corporate Agents. The board may adopt a resolution authorizing the purchase and maintenance of insurance on behalf of any agent of the corporation (including a director, officer, employee or other agent of the corporation) against any liability other than for violating provisions of law relating to self-dealing (Section 5233 of the California Nonprofit Public Benefit Corporation Law) asserted against or incurred by the agent in such capacity or arising out of the agent's status as such, whether or not the corporation would have the power to indemnify the agent against such liability under the provisions of Section 5238 of the California Nonprofit Public Benefit Corporation Law. D. Investments. Except with respect to assets held for use or used directly in carrying out this corporation's charitable activities in investing, reinvesting, purchasing, acquiring, exchanging, selling and managing this corporation's investments, the board shall avoid speculation, looking instead to the permanent disposition of the funds, considering the probable income as well as the probable safety of this corporation's capital. The provisions of Subsection A, above, shall apply to this Subsection. Section 3.12 Prohibited Transactions. A. Loans. This corporation shall not make any loan of money or property to or guarantee the obligation of any director or officer; provided, however, that this corporation may advance money to a director or officer of this corporation or of any subsidiary for expenses reasonably anticipated to be incurred in performance of the duties of such officer or director so long as such individual would be entitled to be reimbursed for such expenses absent that advance. • S. Self -Dealing Transactions. Except as provided in Subsection C below, the board shall not approve a self-dealing transaction. A self-dealing transaction is one to which the corporation is a party and in which one or more of the directors has a material financial interest. C. Approval. The board may approve a self-dealing transaction if the board determines that the transaction is undertaken for the corpora -- ton's own benefit, and is fair and reasonable to this corporation; and the board, after reasonable investigation under the circumstances, determines that this corporation could not have obtained a more advantageous arrangement with reasonable effort under the circumstances. Such deter- minations must be made by the board, in good faith, with knowledge of the material facts concerning the transaction and the director's interest in the transaction, and by a vote of a majority of the directors then in office, without counting the vote of the interested director(s). Section 3.13 ComDensation. Mone of the directors shall be persons compensated by this corporation for services performed for this corporation. In this Section, the term "persons" includes individuals related by blood or marriage. ARTICLE IV COMMITTEES section 4.1 Committees of Directors. The board may designate one (1) or more commit- tees, each consisting of two (2) or more directors to serve at the pleasure of the board; provided, however, that if an executive committee is authorized by the board, said committee shall consist of not Less than three (3) directors, and the resolution establishing such executive committee shall be adopted by a majority of the directors then in office. Appointments to all committees shall be made by the board of directors except that appointments to the executive committee shall be by majority vote of the -7- D-7 directors then in office. Any committee, to the extent provided in the resolution, shall have all the authority of the board except that no committee, regardless of board resolution may: A. B. C. D. E. Section 4.2 Fill vacancies on the board of directors or on any committee; Expend any corporate funds for any purpose without the express authorization of the board of directors; Amend or repeal Bylaws or adopt new Bylaws; Amend or repeal any resolution of the board of directors which by its express terms is not so amendable or repealable; Appoint any other committees of the board of directors or the members of these committees. Meetings Meetings and actions of committees shall be governed by and held and taken in accordance with the provisions of Article III of these Bylaws concerning meetings of directors, with such changes in the context of those Bylaws as are necessary to substitute the committee and its members for the board of directors and its members. Minutes shall be kept of each meeting of any committee and shall be filed with the corporate records. The board of directors may adopt rules for the governance of any committee not inconsistent with the provisions of these Bylaws. ARTICLE V OFFICERS Section 5.1 Officers. The officers of this corporation shall be president, vice-president, secretary and treasurer. The corporation may also have, at the discretion of the directors, such other officers as may be appointed by the directors. Any number of offices may be held by the same person, except that neither the secretary nor the treasurer may serve concurrently as the president of the board. All officers of the corporation shall be selected from the membership of the board of directors, and must be members of the board of directors. -6- glee] Section 5.2 Election. The officers of this corporation shall be chosen annually by the directors, and each shall serve at the pleasure of the board, subject to the rights, if any, of an officer under any contract of employment. Section 5.3 Removal. Subject to the rights, if any, of any officer under any contract of employment, any officer may be removed, with or without cause, by the board of directors at any meeting of the board. Section 5.4 Resignation. Any officer may resign at written notice to this corporation. A take effect at the date of the receipt any later time specified by that otherwise specified in that notice, tY resignation shall not be necessary to Any resignation is without prejudice to of this corporation under any contract is a party. Section 5.5 Vacancies. any time by giving ay resignation shall of that notice or at notice, and unless .e acceptance of the make it effective. the rights, if any, to which the officer A vacancy in any office for any reason shall be filled in the manner described in these Bylaws for regular appointments to that office. Section 5.5 President. The president shall be the chief executive officer of the corporation, shall preside at all meetings of the board of directors and shall, subject to control of the board, generally supervise, direct and control the business and the officers of the corporation. The president shall be a member of all committees and shall have the general powers and duties of management usually vested in the office of president of a corporation, and shall have such other powers and duties as may be prescribed by the board of by the Bylaws. Section 5.7 Vice -President. In the absence of the president, the vice-president shall preside at all meetings of the board of directors, and shall, subject to the control of the board, have the powers and duties of the president. -9- M • Section 5.8 Secretary. The secretary shall keep a full and complete record of the proceedings of the directors, shall keep the seal of the corporation and affix the same to such papers and instruments as may be required in the regular course of business, shall make service of such notices as may be proper or necessary, shall supervise the keeping of the books of the corporation, and shall discharge such other duties as pertain to the office or as prescribed by the directors. Section 5.9 Treasurer. The treasurer shall have charge and custody of all funds of the corporation, shall deposit such funds in the manner required by the board, shall keep and maintain ade- quate and correct accounts of the corporation's properties and business transactions, shall render reports and accountings as required, and shall discharge such other duties as pertain to the office or as prescribed by the directors. ARTICLE VI REPORTS TO DIRECTORS S12ection 6.1 President's Annual Re ort. The president shall furnish a written report annually to all directors of this corporation containing the following information: A. The assets and liabilities, including the trust funds of this corporation, as of the end of the fiscal year; B. The principal changes in assets and liabil- ities, including trust funds, during the fiscal year; C. The revenue or receipts of this corporation, both unrestricted and restricted for particu- lar purposes, for the fiscal year; D. The expenses or disbursements of this corpo- ration, for both general and restricted purposes during the fiscal year; E. Any transaction during the previous fiscal year involving FIVE THOUSAND DOLLARS ($5,000.00) or more by this corporation and in which any director or officer of the corporation was a party. The report must -IO- D-10 disclose the names of the interested persons involved in such transaction, stating such person's relationship to the corporation, the nature of such person's interest in the transaction, and, where practicable, the amount of such interest; F. The amount and circumstances of any indemni- fications or advances aggregating more than TWO THOUSAND DOLLARS ($2,000.00) paid during the fiscal year to any officer or director of the corporation. Section 6.2 Audited Financial Statement Included within the president's annual report shall be the financial statements of the corporation in audited form. ARTICLE VII INDEMNIFICATION Section 7.1 Definitions. For the purposes of this Article VII, "agent" means any person who is or was a director, officer, employee, or other agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust, or other enterprise, or was a director, officer, employee, or agent of a foreign or domestic corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation; "proceeding" means any threatened, pending, or completed action or proceeding, whether civil., criminal, administrative, or investigative; and "expenses" includes without limitation attorneys' fees and any expenses of establishing a right to indemnification under Section 7.4 or 7.5(b) of this Article VII. Section 7.2 Indemnification in Actions by Third Parties. The corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any proceeding (other than an action by or in the right of the corporation to procure a judgment in its favor, an action brought under Section 5233 of the California Nonprofit Public Benefit Corporation Law, or an action brought by the Attorney General or a person granted relator status by the Attorney General for any breach of duty relating to assets held in charitable trust), by reason of -1�- D-11 the fact that such person is or was an agent of the corpo- ration, against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with such proceeding if such person acted in good faith and in a manner such person reasonably believed to be in the best interests of the corporation and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of such person was unlawful. The termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in the best interests of the corporation or that the person had reasonable cause to believe that the person's conduct was unlawful. Section 7.3 Indemnification in Actions by or in the Right of the Corporation. The corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action by or in the right of the corporation, or brought under Section 5233 of the California Nonprofit public Benefit Corporation Law, or brought by the Attorney General or a person granted relator status by the Attorney General for breach of duty relating to assets held in charitable trust, to procure a judgment in its favor by reason of the fact that such person is or was an agent of the corporation, against expenses actually and reasonably incurred by such person in connec- tion with the defense or settlement of such action if such person acted in good faith, in a manner such person believed to be in the best interests of the corporation, and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. No indemnification shall be made under this Section 7.3: A. In respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable to the corporation in the performance of such person's duty to the corporation, unless and only to the extent that the court in which such proceeding is or was pending shall determine upon application that, in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for the expenses which such court shall determine; -12- D-12 B. of amounts paid or expenses incurred in defending a threatened or pending action involving the Attorney General which is settled or otherwise disposed of without court approval, unless it is settled with the approval of the Attorney General. Section 7.4 indemnification Aaainst Expenses. To the extent that an agent of the corporation is to be indemnified for any proceeding referred to in Section 2 or 3 of this Article VII or in defense of any claim, issue, or matter therein, the agent shall be indemnified against expenses actually and reasonably incurred by the agent in connection therewith. Section 7.5 Required Determination. Except as provided in Section 7.4 of this Article VII, any indemnification under this Article VII shall be made by the corporation only if authorized in the specific case, upon a determination that indemnification of the agent is proper in the circumstances because the agent has met the applicable standard of conduct set forth in Section 2 or 3 of this Article VII, by: A. A majority vote of a quorum consisting of directors who are not parties to such pro- ceeding; or B. The court in which such proceeding is or was pending upon application made by the corpo- ration or the agent or the attorney or other person rendering services in connection with the defense, whether or not such application. by the agent, attorney, or other person is opposed by the corporation. Section 7.5 Advance of Expenses. Expenses incurred in defending be advanced by the corporation prior to tion of such proceeding upon resolution the agent is entitled to be indemnified this Article VII. -13-- any proceeding may the final disposi- of the board that as authorized in D-13 Section 7.7 other Indemnification No provision made by the corporation to indemnify its or its subsidiary's directors or officers for the defense of any proceeding, whether contained in the Arti- cles, Bylaws, a resolution of members or directors, an agreement, or otherwise, shall be valid unless consistent with this Article VII. Nothing contained in this Article VII shall affect any right to indemnification to which persons other than such directors and officers may be entitled by contract or otherwise. Section 7.6 Forms of Indemnification Not Permitted. No indemnification or advance shall be made under this Article VII, except as provided in Section 7.4 or 7.5(b), in any circumstances where it appears: A. That it would be inconsistent with a pro- vision of the Articles, these Bylaws, or an agreement in effect at the time of the accrual of the alleged cause of action asserted in the proceeding in which the expenses were incurred or other amounts were paid, which prohibits or otherwise limits indemnification; or B. That it would be inconsistent with any condition expressly imposed by a court in approving a settlement. Section 7.9 Nonapplicability to Fiduciaries of Employee Benefits Plans. This Article VII does not apply to any proceeding against any trustee, investment manager, or other fiduciary of an employee benefit plan in such person's capacity as such, even though such person may also be an agent of the corporation as defined in Section 1 of this Article VII. The corporation shall have power to indemnify such trustee, investment manager, or other fiduciary to the extent permitted by subdivision (f) of Section 207 of the California General Corporation Law. -14-- D-14 ARTICLE VIII AMENDMENTS Section 8.1 Amendment of Articles of Incorporation. Proposed amendments to the corporation's articles of incorporation must be submitted in writing to the direc- tors at least one (1) month in advance of the board meeting at which they will be considered for adoption. The vote of two-thirds (2/3) of the directors shall be required to adopt an amendment to the articles of incorporation. Section 8.2 Amendments to Bylaws. Proposed amendments to this corporation's Bylaws must be submitted in writing to the directors at least one (1) month in advance of the board meeting at which they will be considered for adoption. The vote of two-thirds (2/3) of the directors shall be required to adopt an amendment to the Bylaws of this corporation. ARTICLE IX MISCELLANEOUS Section 9.1 Fiscal Year. The fiscal year of this corporation shall end each year on 30 September. Section 9.2 Corporate Seal. This corporation shall have a seal which shall be specified by resolution of the board of directors. The seal shall be affixed to all corporate instruments, but failure to affix it shall not affect the validity of the instrument. Section 9.3 Contracts. All contracts entered into on behalf of this corporation must be authorized by the board of directors and signed by at least two officers of the corporation. Section 9.4 Execution of Checks. Except as otherwise provided by law, every check, draft, promissory note, money order, or other evidence of indebtedness of the corporation shall be signed by such individuals as are authorized by the board of directors. END OF BYLAWS -i5- D-15