The HOA Board Quarterly Winter 2013 Issue #8 | Page 6

CAN TREASURERS BUY CDS?

ELECTRONIC BALLOTING

Question: our board does not have an
investment firm to help them. They just let
the treasurer take a check and buy a cd
when they have extra money. Is that legal?

Question: our hoa website has a feature for
electronic balloting that we were planning to
use this year. It provides for secret ballots,
i.E., We only see which properties have
voted and the totals by candidate, not who
voted for whom. Would that qualify or are
all forms of electronic balloting prohibited?
Paper balloting seems very archaic for such
a progressive state.

Answer: it is perfectly legal. There is no
requirement that boards have investment
advisers and there is nothing wrong in buying
certificates of deposit. Cds are probably
the most common form of investment for
homeowner associations. They are safe
because they are backed by the full faith
and credit of the united states (although that
seems increasingly shaky.)

Answer: electronic balloting was introduced
to the legislature earlier this year as ab
1360. The author, senator torres, said that
“this bill is part of our effort to modernize
the democratic process for community
associations and will help increase
involvement while reducing costs.” Although
the bill has wide-spread support, some
security concerns were raised. To address
those concerns, the bill was temporarily put
on hold. As a result, e-voting is not yet an
authorized form of balloting for associations.

In the event of a bank failure, the federal
deposit insurance corporation (fdic) pays
each depositor their principal and accrued
interest up to $250,000 as of the date of
the bank’s closing. Even though the federal
reserve has been flooding the market with
cheap money (a precursor to inflation)
and artificially driving interest rates to
Recommendation: those who want to
record lows, cds are still one of the safest
see electronic voting pass should support
investment vehicles for associations.
clac. This organization is your voice in
Recommendation: for associations with sacramento and has been instrumental in
large reserve deposits, using an investment promoting good legislation for homeowners
adviser to develop a written investment and opposing the truly bad stuff that oozes
policy is a good idea. Do not pay a board out each year. If you can write them a check
member to manage your funds. Instead, for $20, $50 or $100 dollars, it’s worth the
use an independent third party professional investment. Donations can be sent to:
to develop a sound investment policy. CAI-CLAC, 5355 Par