SMOKY
HILL HOMEOWNERS ASSOCIATION
Reserve Investment Policy
RECITALS:
A. Colorado Revised Statute ("C.R.S.")
38-33.3-209.5(1)(b)(vi) provides that Colorado Common Interest Communities shall adopt a policy
concerning investment of reserve funds.
B. C.R.S.
38-33.3-303(2)(b) provides that Members elected to the executive Board by the
Unit Owners will be liable for wanton or willful actions or omissions.
C. C.R.S.
7-128-401(2)(b) allows the Members of the Board
of Directors to rely on information, opinions, or statements if
presented by legal counsel, public accountant or other person as to matters the
Board reasonably believes are within such persons expert competence in
discharging their duties.
D. The
Colorado Courts have applied the Business Judgment Rule in their review of
actions taken by the Board of Colorado nonprofit corporations. See, e.g., Colorado Homes, Ltd. v.
Loerch-Wilson, 43 P.3d 718 (Colo.App. 2001).
E. Without
waiving the statutory duty of care applicable to Members of the executive Board
elected by Unit Owners, other than the Declarant, the Board would like to
implement elements of the Business Judgment Rule with respect to the investment
of the Association's reserve funds.
THEREFORE, IT IS RESOLVED the Association, acting
through the Board of Directors,
shall exercise business judgment in the investment of funds designated as
reserve funds.
1. The Board of Directors shall reasonably
investigate the options available for investment of some or all the reserve
funds; emphasis will be placed on the preservation of principal.
2. The Board of Directors shall discuss the
results of the investigation and the options for investment that meet the
Association's goal for safety and income potential.
3. In
the event the Board lacks experience in the investment options being considered
to evaluate the safety and income potential, the Board may consider, and pay
for, the opinions of its legal counsel, its public accountant, or other person
the Board Members reasonably believe are within that persons expert competence,
provided that other person will not directly benefit from the type and amount
of investment or that person is insured against errors and omissions.
4. Upon
the conclusion of the investigation, the discussion, and the opinions of
experts (if necessary) the Board of
Directors shall vote on how the reserve funds will be invested or
reinvested, each Member of the Board should vote in what they believe is the
best interest of the Association and a majority vote of the quorum shall
control.
Policy
adopted this 10th day of January, 2006 by Resolution of the Board of Directors.
Ron
Weidmann, President
Board
of Directors
Smoky
Hill Homeowners Association