RESOLUTION OF THE
MILL IRON 5 RANCH ESTATES SUBDIVISION HOMEOWNER'S ASSOCIATION
	ADOPTING POLICY AND PROCEDURE FOR
	INVESTMENT OF RESERVE FUNDS

SUBJECT:  Adoption of a policy and procedure for investment of reserves of the Association.

PURPOSES:  To adopt a policy and procedure for the investment of reserve funds.

AUTHORITY:  The Declaration, Articles of Incorporation and Bylaws of the Association and Colorado law.

EFFECTIVE DATE:  _________

RESOLUTION:  The Association, at this time does not have a reserve fund in place. However, if in the future the Board of Directors finds it in the best interest of the community to establish a reserve fund; such fund shall be managed in accordance with the following:

1.  Purpose of the Reserve Fund. The purpose of the Reserve Fund shall be to responsibly fund and finance the projected repair and replacement of those portions of the Community that the Association is responsible for and for such other funding as the Board of Directors may determine. The portions of the Community that the Association is responsible for typically have limited but reasonably predictable useful lives.

2.  Investment of Reserves. The Board of Directors of the Association shall invest funds held in the Reserve Funds accounts to generate revenue that will accrue to the Reserve Funds accounts balance pursuant to the following goals, criteria and policies:

(a) Safety of Principal. Promote and ensure the preservation of the Reserve Fund's principal. 
(b) Liquidity and Accessibility. Structure maturities to ensure availability of assets for projected or unexpected expenditures.
(c) Minimal Costs. Investments costs (redemption fees, commissions, and other transactional costs) should be minimized.
(d) Diversify. Mitigate the effects of interest rate volatility upon reserve assets.
(e) Return. Funds should be invested to seek the highest level of return.

3.  Limitation on Investments. Unless otherwise approved by the Board, all investments will be FDIC (Federal Deposit Insurance Corporation) insured and/or guaranteed by the United States Government.

4.  Investment Strategy. The investment strategy of the Association should emphasize a long-term outlook by diversifying the maturity dates of fixed-income instruments within the portfolio utilizing a laddered investment approach.

5.  Independent Professional Investment Assistance. The Board of Directors of the Association may hire a qualified investment counselor to assist in formulating a specific investment strategy.

6.  Review and Control. The Board shall review Reserve Fund investments periodically to ensure that the funds are receiving competitive yields and shall make prudent adjustments as needed.

7.  Reserve Study. In order to determine funding of the Reserve Fund, the Board of Directors may determine, with the assistance and advice of professionals, the life expectancy of those portions of the Community to be maintained by the Association and the anticipated costs of maintaining, replacing and improving those identified areas (hereinafter referred to as a "Reserve Study").

8.  Review of Reserve Study. The Board of Directors shall cause the Reserve Study, if any, and reserve funding to be reviewed and updated periodically, at least once every. three ???, to adjust and make changes in costs, inflation and interest yield on invested funds, plus modification, addition or deletion of components.

9.  Standard of Care. The officers and members of the Board of Directors shall make investment decisions in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances, and in a manner the Director or officer reasonably believes to be in the best interests of the Association in accordance with the Colorado Revised Nonprofit Corporation Act.

10. Definitions. Unless otherwise defined in this Resolution, initially capitalized or terms defined in the Declaration shall have the same meaning herein.

11. Supplement to Law. The provisions of this Resolution shall be in addition to and in supplement of the terms and provisions of the Declaration and the law of the State of Colorado governing the community.

12. Deviations. The Board may deviate from the procedures set forth in this Resolution, if approved by all Board members with documentation of such approval, and if in its sole discretion such deviation is reasonable under the circumstances.

13. Amendment. This policy may be amended from time to time by the Board of Directors.

PRESIDENT'S CERTIFICATION:
The undersigned, being the President of the Mill iron 5 Ranch Estates Subdivision Homeowner's Association a Colorado nonprofit corporation, certifies that the foregoing Resolution was adopted by the Board of Directors of the Association, at a duly called and held meeting of the Board of Directors on	_______ and in witness thereof, the undersigned has subscribed his/her name.

MILL IRON 5 RANCH ESTATES SUBDIVISION HOMEOWNER'S ASSOCIATION

By:  ____________________________________________ President