Former Rancho Santa Fe Association manager outlines pros, cons of bylaw changes

The Rancho Santa Fe Public Interest Committee (PIC) held an informational session on the proposed changes to the bylaws on April 13 at the RSF Golf Club. About 50 people were in attendance at the meeting led by former RSF Association Manager Pete Smith.

The RSF Association will host its own town hall meeting on the governing documents on Wednesday, April 27 at 4 p.m. at the RSF Association offices.

An RSF Association governing documents committee has been working on changes to the bylaws and the articles of incorporation to comply with the 2014 Davis-Stirling Act and the California Corporations Code, as well as to create equity and fairness in voting and to simplify both documents.

Smith was complimentary on the efforts of the governing documents committee, which includes Kris Charton, Allen Finkelson (RSF Association board candidate) Judge David Moon and RSF Association Director Fred Wasserman. Charton, Finkelson and Moon are all experienced attorneys and Wasserman is a successful businessman.

Smith retired in 2014 after serving as the RSF Association manager for 18 years and RSF Golf Club manager for five years. He is currently in a partnership with another former RSF Association manager, Walt Ekard, with Ekard Smith and Associates. As they have several clients in Rancho Santa Fe, they have been reviewing the bylaw changes over the past months, drawing on their combined experience of over 25 years managing the RSF Association.

Smith acknowledged that some might question his intent in speaking to the community, whether it is driven by his contract dispute with the RSF Association board or issues with board members, but he said that is not the case.

“My goal here is to just give you the pros and cons on the issues as I see them having been a manager,” Smith said. “I’m not here to advocate one way or the other, this is for you, the decision makers of this community, to decide. We’re just here to try and give you the facts.

“Walt and I love this community and we take a great deal of pride in this community and want to see it successful, we want to see it thriving.”

Smith went through some positives and negatives on the bylaw changes relating to access to books and records, committees, special meetings and quorums, director qualifications and voter registration in the articles of incorporation.

The “redline” copy of the bylaws has been available for members to review online, however, Smith said the documents only highlight the items that are being deleted, not the items that have been added. Additionally, Smith said not all of the deletions are highlighted which makes it a little confusing.

When it comes to governing documents, Smith reminded residents that interpretation of the bylaws carries a lot of weight. He referenced the recently settled Crosby Homeowners Association lawsuit, a case that lasted three years in which both sides spent over $2 million to fight. Smith said the whole legal debate centered on the definition of one word: “private.”

“Words, phrases are very, very important as to what’s in your governing documents,” Smith said.

In his review, Smith said he found an error in the section related to review of documents and records. The proposed new language states that “members shall be entitled to inspect or obtain documents and records as provided by law and as provided by Resolution 2015-109 approved September 15, 2015.”

Smith said there was no meeting on Sept. 15 and that the “real” resolution 2015-109 was adopted on Oct. 1 and was a boundary adjustment for a private resident.

The Association has presented another Resolution 2015-109 to support the bylaw change as being correct and having been approved on Sept. 3, 2015, however, Smith said while there is an item on the Sept. 3 agenda for “revised access to records policy,” there was no mention on the agenda of the formal resolution. He said the minutes do not mention a resolution or what the approved policy stated.

Smith said he only pointed this out as governing documents really need to be scrubbed and clean.

“This is not the fault of the committee,” Smith said. “Staff really should have picked this up…I also want to defend the staff, these types of projects are very time consuming and the community has a lot of issues going on. Your staff is stretched thin.”

Smith also expressed his concerns about the changes in the articles of incorporation regarding voting and voter registration. As the changes state, each member shall have the right to cast two votes on all matters requiring a vote and “registration is no longer needed since a building site owner is a member eligible to vote.”

As Smith noted, Rancho Santa Fe is the only homeowners association out of 45,000 in California that requires its members to register, “actually that’s kind of a neat thing.”

He understands that the change is meant to resolve members having to fill out an eight -page document to register, but he said the advantage of a document is that it establishes ownership and who is entitled to vote and, most importantly, who is entitled to join the community’s exclusive golf club. He said the documents work to substantiate that member of ownership and certify that they have a beneficial interest in the community before being allowed to register to vote.

Smith said he understands if the changes are meant to make the process less bureaucratic, but said the current system of registration, although not perfect, works.

Smith noted that homeowners can register online now and it only takes about five to 10 minutes.

In several meetings, Wasserman has stated that the issue of fairness and equality in the voting process is something the committee considers very important with these proposed revisions. The committee additionally continues to pursue granting voting rights for condominium owners.

Smith reiterated that he was not there to make any recommendation but encouraged residents to express their opinions on the bylaw changes. RSF resident Lisa Bartlett agreed, and asserted that the governing documents committee has been open and honest in its work and has encouraged participation from the start.

“The committee has asked over the past year for input and they’ve received virtually none,” Bartlett said. “I think the important thing is for all of us to be involved and give the committee input.”

“It would be easier to provide meaningful input if we had a foundation to understand why changes are recommended in the first place,” countered another resident.

He said even if the changes are beneficial, if people don’t understand the reasoning, they are more likely to vote them down.

It is the hope that the committee will be able to address the reasons behind the proposed changes at the upcoming town hall meeting on April 27, before the changes go out to a vote in May. The redlined documents are available for review at rsfassociation.org. Hard copies are available at the Association office.