1. Annual Meeting February 24, 2015

2. 1.Introduction – Current Board – DAPER 2.Reports – Membership – Activities – Survey – Treasurers – Tennis – Swim 3. Tax Issue 4.Special Member Issue – Case to follow 15% Rule – Case for Special Members 5. Questions/Comments 6.Election of Directors – Nom. Com. Slate – Vote

4. Ray Purpur Deputy Director of Athletics Steve Robe SCRA General Manager Andrea Barnes* Tennis Director Laura MitchellAquatics Director Head Age Group Coach Joey SemmentelliHead Swim Coach * Resigned as of March 16, 2015

6. Faculty members of Academic Council Senior Fellow members of Academic Council Medical Center Line Professors University N11 Staff University 1M5 Staff Hoover Senior Fellows Emeritus Retired Staff

7. 2008: 400 Renovation year, 2007-2008 2009: 415 2010: 435 2011: 450 2012: 465 2013: 475 2014: 494 On average ~ 15 new memberships/year

8. EmeritusTOTAL Club Members Regular Member Families 36780 447 Extended Family 21 DAPER 18 Special 8 12 Swim Only 10 VOTING 367 ½ (80)= 40 votes 407 NON-VOTING 47 TOTAL 49480 367+1/2(80)= 407 votes

9. Resident Fellow Special membership, for duration of fellowship provided not otherwise SCRA eligible Divorced Spouse/Domestic Partner Evidence this has been offered since 1997 Extended Family Provided only if primary member remains a member DAPER awarded as a result of the Loan and Management Agreement with Stanford

10. Some Background: SCRA registered as 501(c)(7) Social Club non- profit tax exempt organization 15% Rule of a 501(c)(7): Non-member income cannot exceed 15% of gross annual income

11. DAPER contacted by Franchise Tax Board for SCRA failure to file Tax Returns 2006 through 2013 SCRA advised to be silent on this issue until initiating filing with the IRS through Stanford and PWC DAPER initiates filing but discovers we are in non compliance with IRS 15% Rule for 501(c)(7) Tax Exempt Social Club

12. PWC retained by SCRA through Stanford to rectify by filing State and Federal Income tax for 2006-2013 Potential penalties, back taxes, fees, owed No information yet as to settlement with IRS

13. Largely due to Swim Team Non- Member Revenue

14. 2014 Swim Team Demographics

15. FALL SWIM TEAM USE* * BASED ON FALL 2014 – HIGHEST NUMBER OF SCRA MEMBER SWIMMERS

16. SUMMER SWIM TEAM USE* * BASED ON SUMMER 2014 – MEDIUM NUMBER OF SCRA MEMBER SWIMMERS

17. SCRA must comply with 15% Rule. How?

18. One view: Swim Team footprint too large, SCRA should follow the 15% Rule. Interests of SCRA membership participating in the Swim Team are not in balance with interests of rest of SCRA membership.

19. Other view: In order for Swim Team to be competitive, attract the best coaches, provide a good experience for the swimmers, Swim Team must maintain a critical size. SCRA should award Special Team Only Memberships to non-members. This will categorize NON-member income as member income.

20. SCRA Board granted 75 Team Only Special Memberships in order to categorize non-member income as member income.

21. 2014 Fall Team 276 Swimmers (115 Members) 69 SCRA FAMILIES PARTICIPATING = 14% OF MEMBER FAMILIES

22. Fall 2014 by Group After tax constraints in effect: Compliant given 74 provisional memberships

23. 2014 Fall Team 276 Swimmers (115 Members) 69 SCRA FAMILIES PARTICIPATING = 14% OF MEMBER FAMILIES

24. Board solution is unstable, Board divided Too high a number of Special Memberships for Board to act alone Board should act according to the interests of all members Discuss and Vote

25. Should SCRA award Special Memberships as a workaround the IRS 15% rule for Social Clubs? or Should SCRA adhere to the IRS 15% rule set by the IRS for Social Club organizations?

26. What Kind of Swim Program does SCRA Want? SCRA Summer Team has always had a large majority of SCRA member kids. Does a majority non-member swim team serve the interests of our membership as a whole? How much non-member participation is the right balance?

28. 1.The size and footprint of the swim team is out of balance with the interests of a majority of members. 2.To grow the swim team, we should grow the membership. But growth should be balanced with the interests of ALL members. 3.The need for revenue is not a legitimate reason to grant special memberships. Nor is the need anticipated. 1.May be legal for tax compliance reasons, but are these memberships legal given our obligation with Stanford University to serve the Stanford Community and its families?

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