KAHLER GLEN ATHLETIC CLUB

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These covenants were replaced in May 2009 with the membership approval of the Bylaws;
Covenants, Conditions, Restrictions, And Reservations Of The Kahler Glen Athletic Club

ARTICLE I.   ORGANIZATION AND NAME

Section 1. Name 

The name of the corporation shall be the Kahler Glen Athletic Club and for designated purposes may be referred to as the “KGAC” in these covenants.

Section 2. Location 

The principal office of the KGAC shall be at  20700 Kahler Drive, Leavenworth, WA, 98826, but nothing shall prevent the holding of meetings or the transaction of any business pertinent to the KGAC at some other place providing adequate notice is provided.

Section 3. Object 

The primary purpose for which the KGAC is being formed is to own, establish, and maintain a multi-use recreational facility for the exclusive use of its members and guests. The facility shall initially be equipped with an indoor heated pool, spa, sauna, sports-court, exercise room and exercise equipment, locker rooms, restroom facilities, and patio area, as well as such other recreational facilities which may be determined as necessary and convenient for the benefit of the membership. The KGAC, from time to time, reserves the right to modify, add, or delete the recreational facilities or equipment with a 75% majority vote of the membership.

Section 4.  Accounting 

For accounting purposes the fiscal year shall commence on May 1st and end on April 30th.

Section 5.  Purpose of the KGAC

The KGAC is a non profit corporation and the ownership, management and control of the Club shall be vested in those that own a membership.

Section 6.  Distribution of Assets 

In the event of liquidation, and after payment of all debts and liabilities, contingent or otherwise, and in compliance with state laws, the remaining assets shall be distributed to each membership owner on a pro-rata share basis.

ARTICLE II.  MEMBERSHIP

Section 1.  Nondiscrimination 

Membership is open to any person or family of good character and responsible credit background. KCAC policy is to accept applications for membership without regard to race, creed, color, sex, or national origin.

Section 2.  Membership Terms 

Memberships are limited to Equity Owners and their direct families. All memberships are perpetual but may be transferred, gifted, or sold to a transferee in accordance with Article II –Section 11 and 12. The transfer shall be subject to the approval of the Board of Directors of the KGAC, and shall not be valid until the new transferee completes the registration process and pays an administrative fee to the KGAC. Until the transfer has been consummated, as herein provided, the transferor shall remain liable for all KGAC dues and charges.

Section 3.  Voting Rights

Each membership is equivalent to purchasing an equity share of the Club. Each member will retain one vote per Equity Ownership for business decisions presented by the Board at Annual meetings or special meetings.

Section 4.  Membership Classifications

There shall be two types of membership classifications: 1) Charter Memberships were available under the cut-off date of August 1st, 2001. A Total of 85 Charter Memberships shall be available.  2) General memberships are available after August 1st, 2001.  The total membership shall never exceed 150 members, but may be reduced below 150 with a 75% majority vote. The limit of 85 Charter Members may not be amended or changed.

Section 5.  Membership Pricing

 The KGAC Board of Directors shall be authorized to establish the dues, initiation and or/transfer fees for each classification.

Section 6.  Charter Memberships

Charter members shall enjoy the following permanent benefits: free lockers, and a $120 reduction on annual dues each year. Charter members that have purchased multiple undeveloped lots in the Kahler Glen Development shall be provided a discounted operating expense fee of $120 per year per lot, but shall pay their pro-rata share of residual mortgage expenses. If a lot in the Kahler Glen Development is subsequently sold and the membership is purchased or transferred to a new owner, the new owner shall pay full operating expenses without the benefit of a multi-property discount.

Section 7.  General Membership

The general membership equity share shall start at $7,500 and shall increase in cost in accordance with the Board of Directors. In addition to the initiation fee, general members shall pay annual dues priced at $120 per year above the charter membership rate, plus a mandatory locker fee of no less than $10 per month.

Section 8.   Membership Rights

Membership rights are limited to equity owners and their direct families. Equity owners and families shall consist of the purchaser of the membership, his or her spouse or partner, their parents, and their children, and grandchildren. Other extended family members are considered guests of the equity owner and must be accompanied by an equity owner or one of their direct families. Each equity owner shall provide a list of names and relationships in writing to the Secretary of the Association of all persons entitled to exercise ownership rights during the registration process. This list may be amended and modified annually or as required.

Section 9.  Guests

A current equity owner or one of their direct families must accompany all guests. Guests who live outside of a 50 mile radius and do not own property in Chelan County are allowed when accompanied by a member or one of their family guests.  Guests who live within the 50 mile radius shall be limited to 2 visits per year in an effort to encourage them to become members. A guest is subject to all the rules and regulations of the Club. All members and guests must sign in the register upon entry to the facility.

Section 10.  Leased or Rental Properties

Any permanent or temporary visitors of an equity owner, renters or lessor’s of an equity owner’s property shall not be entitled to membership rights unless accompanied by an equity owner. (The interest is personal to the owner of the equity interest and not his/her real property) Section 10.  Transfers of Memberships  Any equity owner, who is current in the payment of all KGAC dues, fees, and charges, may transfer his or her membership by sale or gift to a person exclusive of a corporation, trust, or other artificial entity. If the purchase is by sale, it may be for such price and on such terms as the transferor and transferee decide. The transfer shall be subject to the approval of the Board of Directors of the KGAC, and shall not be valid until the new transferee completes the registration process and pays an administrative fee to the KGAC. Until the transfer has been consummated, as herein provided, the transferor shall remain liable for all KGAC dues and charges. A transfer by gift to a spouse, partner, son, or daughter, or other party, shall not be effective until the Board of Directors has approved the transferee for ownership.  The transferor must be current in the payment of all KGAC dues, fees, and charges and the new transferee must complete the registration process and pay an administrative fee to the KGAC prior to approving the transfer.

Section 11.  Transfers Upon Death  Upon the death of an equity owner, the personal representative of such member’s estate shall determine the new transferee. The term “personal representative” as herein shall include a person appointed or confirmed by a court as executor, administrator, or personal representative of a decedent’s estate, or a trustee under a living trust, or a surviving spouse or other distributor under a community property agreement. Any such transfer shall not create greater rights than the decedent had in his or her equity membership. The transfer shall be subject to the approval of the Board of Directors of the KGAC, and shall not be valid until the new transferee completes the registration process and pays an administrative fee to the KGAC. Until the transfer has been consummated, as herein provided, the transferor shall remain liable for all KGAC dues and charges.

Section 12.   Dissolution or Legal Separation

Upon entry of a decree of dissolution or legal separation, the ownership shall pass to or be retained by the spouse awarded the same who shall be entitled to the same rights and privileges and subject to the same dues and assessments as the membership afforded. The transfer shall be subject to the approval of the Board of Directors of the KGAC, and shall not be valid until the new transferee completes the registration process and pays an administrative fee to the KGAC. Until the transfer has been consummated, as herein provided, the transferor shall remain liable for all KGAC dues and charges.

ARTICLE III.   FEES, DUES, AND ASSESSMENTS

Section 1.  Responsibility of Board Members

The Board of Directors shall be responsible for maintaining the property, facilities, and equipment of the KGAC in good condition through prudent management of the operating expenses and capital improvement funds.

Section 2.  Power Vested in the Board of Directors

The Board of Directors shall have the power to fix, assess, and levy fees, dues, charges, and assessments including initiation and/or transfer fees to be paid by the members.

Section 3.  Dues

All owners shall pay semi annual dues each fiscal year to fund the operating expenses necessary to maintain and operate the KGAC in a well maintained and safe condition.  Invoices shall be forwarded to each member for payment in May and November which shall be payable by the 20th day of the following month. Operating cost estimates for the fiscal year shall be forwarded to every member 30 days in advance of the Annual ownership meeting to be held in the 1st week of May. During the first year of operation, estimated dues for 6 months shall be invoiced and payable no later than 30 days from the date of substantial completion of the facility. The KGAC shall pay for all costs associated with operating the KGAC including: electricity, road maintenance, sewage, domestic and irrigation water, snow removal, material and supplies, property taxes, building &, liability insurance, labor and site supervision, loan interest expenses, capital and lease expenses, or any other such expenses, which from time to time, may be required to safely and effectively maintain and operate the facility. Dues shall vary in price each year based on the total amount of members, type of membership classification, principle and interest loan balance, estimated operations expense, and capital assessment charges.

Section 4.  Capital Fund and Assessments

An adequate reserve shall be collected from annual dues for the replacement of large capitalized items. This reserve fund shall be used exclusively for large-scale capital repairs and improvements, construction projects, or capital equipment purchases. An initial reserve fund of $5,000 shall be established the first year of operation from annual dues and shall be incrementally increased each year in accordance with the Board of Directors. Capital improvements may be assessed by the Board of Directors for special projects as required; however, any capital improvement assessments over $5,000 shall require a 51% majority vote of the membership for approval. Membership approval shall not be required if the special assessment is required to ensure the health or safety of the membership.

Section 5.  Kahler Glen Community Association Assessments

The KGAC shall pay the Kahler Glen Community Association three (3) shares of Kahler Glen Community Association dues annually as compensation for domestic and irrigation water, and road utilization and maintenance. In addition, the KGAC shall pay as required (3) shares or 3/159th’s of the cost for any future capital improvement assessments related to the repair of the Kahler Glen water system or roads which are directly utilized by the KGAC.

Section 6.  Kahler Glen Community Association Land Use Fee

Pursuant to the agreement letter between the Kahler Glen Community Association and the KGAC, the KGAC shall pay the Kahler Glen Community Association a one-time fee of $7,000 as compensation for the right to use the land for the specific purpose of installing a multi-purpose swimming and athletic facility.

Section 7.  Lease Expenses

Pursuant to a lease agreement, the Kahler Glen LLC has leased to the KGAC the property identified as Tract B, Phase 4, Second Amendment, owned by the Kahler LLC for a period of 75 years for the express purpose of building a multi-purpose swimming and athletic facility. Said lease is for one dollar ($1.00) per year and is renewable for an additional 75 years.

ARTICLE VI.   ENFORCEMENT, COLLECTION, OF DUES, FEES, AND ASSESSMENTS

Section 1.  Late Fees

Any payments of dues, fees, or assessments delinquent more than 10 days shall be assessed a 5% penalty. . Accounts which continue to remain delinquent for more than 30 days  shall accrue interest at the rate of 1.5% per month and shall result in the suspension of membership rights to the equity member and family and guests until all past due accounts have been paid in full.  

Section 2.  Lien For Non-Payment of Dues, Fees, and Assessments

The Club shall have, and is hereby given, a first and prior lien against stock membership for payment of any dues or indebtedness to the Club. In the event an equity owner shall cease to be a member, due to resignation, suspension, cancellation, or being dropped for non-payment of dues or indebtedness to the Club, any indebtedness shall be immediately due and payable, and in the event said indebtedness shall not be paid with thirty (30) days from the occurrence of any such event, then said equity ownership in the Club shall be in due course be sold to a new member at the then available price as determined in the sole and absolute discretion of the Board of Directors, and the former equity owner (shareholder) shall receive the amount remaining after deductions of such member’s indebtedness to the Club, including interest, penalties, and other charges provided by these Covenant, Conditions and Restrictions, and all further obligations of the Club to said former member shall cease.

Section 3.  Costs and Attorney’s Fees

The Club shall be entitled to recover any costs and reasonable attorney’s fees incurred in connection with the collection of delinquent assessments, whether or not such collections activities result in suit being commenced or prosecuted to judgment. In addition, the Club shall be entitled to recover any costs and reasonable attorney’s fees if it prevails on appeal and in the enforcement of any judgment.

Section 4.  Remedies Cumulative

The remedies provided are cumulative; and the Board may pursue them concurrently, as well as any other remedies which may be available under law although not expressed herein.

ARTICLE V.  OPERATIONS

Section 1.  Kahler Glen Community Association Covenants

  Although the KGAC shall have its own bylaws, covenants, rules and regulations, the KGAC shall be accountable to operate within the provisions of the Kahler Glen Community Association covenants.

Section 2.   Hours of Operation

  The KGAC shall be open year around with the hours of operation established by the Board of Directors. Should the facilities be unavailable for service repairs or utility reasons the KGAC has no obligation to reimburse any dues or initiation fees.

Section 3.  Cardkey Access Controls

  Access shall be controlled via a cardkey system. Each equity member shall be provided two cardkeys. Additional cardkeys may be purchased for a price to be determined by the Board of Directors. Lost cardkeys shall be replaced for an administrative charge to be established by the KGAC Board of Directors. Providing unauthorized access to any persons who are not members may result in temporary suspension of access privileges.

ARTICLE VI.  INSURANCE

Section 1.  Insurance Coverage

The Board shall obtain and maintain at all times as a common expense, a policy or policies and bonds of property insurance covering all of the general improvements including fixtures and building service equipment, personal property and supplies belonging to the Club, and fixtures, equipment, and improvements owned by the Club. All insurance shall be obtained from insurance carriers that are generally acceptable for similar projects, authorized to do business in the State of Washington.

1.1 - Property Insurance

The property insurance shall, at a minimum, provide all risk or special cause of loss coverage in an amount equal to the full replacement cost of the improvements, equipment, fixtures, and personal property of the Club.

1.2 - Liability Insurance

General comprehensive liability insurance insuring the Board, the Club, the Equity Owners, any liability to the public or to the equity owners, and their invitees, or guests, incident to the ownership or use of the KGAC facilities (including but not limited to owned and non-owned automobile liability, water damage, host liquor liability and liability for property of owners). The liability coverage shall be in an amount determined by the Board after consultation with insurance consultants, but not less than $3,000,000.00 covering all claims for personal injury and/or property damage arising out of a single occurrence (such policy limits to be reviewed at least annually by the Board and increased in its discretion). Such insurance shall contain appropriate provisions or endorsements precluding the insurer from denying the claim of an owner because of the negligent acts of the Club or another equity owner.

ARTICLE VII.  RULES AND REGULATIONS

Section 1.  Adoption and Modification of Rules and Regulations

The KGAC may alter, amend or repeal the rules and regulations from time to time. The KGAC Board of Directors may also adopt other official rules; regulations or policies not herein covered and all members will be obligated to adhere to these policies. If adopted they will be officially published under “other rules and regulations” and become effective 30 days after they are adopted by the Club, unless deemed by the Club to be emergency Rules and Regulations in which case the same shall become effective immediately prior to the publication thereof. The terms and conditions of the Ownership Agreement executed by the member shall include these Rules and Regulations and shall be incorporated in one another. Where inconsistent, the language of these Rules and Regulations shall prevail. The rules will be posted on the bulletin board and mailed to each equity owner. It will be the responsibility of each equity owner to know and abide by the rules and regulations.

Section 2.  Damages and Conduct

Members must pay for all damages to KGAC property caused by the member, family members, or guests. The sponsoring member shall be liable and responsible for the conduct of his or her guests and family members.

ARTICLE VIII.  AMENDMENT

Section 1.  Amendment

Except as otherwise provided herein, these Covenants, Conditions, and Restrictions shall not be amended, unless any amendment, shall be approved by 75% of all members.

ARTICLE IX.  LIABILITY

 Section 1.  Liability

Each member expressly agrees that use of the KGAC facilities, undertaken by the equity member, direct family, and guests shall be at the sole risk of the member and the KGAC shall not be liable in any fashion for the injury or damage (s) to the equity member and extended family or guests, or the property of the equity member and extended family and guests.

Section 2.  Loss Or Theft of Property

The KGAC shall not be responsible or liable to the member or member’s direct family or guests for articles lost or stolen in the KGAC, nor shall the KGAC be responsible or liable for loss or damage to any other property of the member or member’s guests on or about the KGAC or its property.

Section 3.  Indemnification/Director Liability

A Director of the corporation shall not be personally liable to the corporation for monetary damages for conduct as a Director, except for liability of the Director (i) for acts or omissions which involve intentional misconduct by the Director or a knowing violation of law by the Director (ii) for conduct violating Section 24.03.127 of the Washington Non-Profit Corporation Act, or (iii) for any transaction from which the Director will personally receive a benefit in money, property, or services to which the Director is not legally entitled. The corporation has the power to indemnify and to purchase and maintain insurance for, its Directors, officers, trustees, employees and other persons and agents, and (without limiting the generality of the foregoing) shall indemnify its Directors, against all liability, damage and expense arising from or in connection with service for, employment by, or other affiliation with this corporation or other firms or entities to the maximum extent and under all circumstances permitted by the law.