RESOLUTION CREATING A CAPITAL RESERVE ACCOUNT FOR THE ASSOCIATION

WHEREAS, the Association currently has an informal policy of allocating funds to reserve funds for asset replacement and capital contingencies;

WHEREAS, the Association currently has no formal long-range financial plan covering the funding and use of its reserves;

WHEREAS, the Board of Governors recognizes the need for the Association to have a long-range financial plan providing for the funding and use of its reserves;

WHEREAS, the Long-Range Financial Planning Subcommittee of the Board of Governors has recommended the establishment of a long-range financial plan in accordance with the Report;

NOW, THEREFORE, BE IT RESOLVED:

1. That the Association shall have as a priority goal the funding of adequate reserves, including capital reserves;

2. That the Association hereby establishes two reserve funds, one for asset replacement and the other for capital contingencies;

3. That the reserve funds of the Association be restricted to the purposes for which they were established and to be expended only pursuant to resolution of the Board of Governors;

4. That the Association have as a goal the funding of reserve funds at the rate of a minimum of two and one-half percent (2-1/2%) of the Association's annual gross income (not including Section dues);

5. That the reserve funds shall be accounted for separately;

6. That the interest earned on the reserve funds shall be allocated to and reinvested in the funds; and

7. That the Treasurer and the Budget Committee shall develop an investment policy for the reserve funds to recommend to the Board for its approval.

PHILADELPHIA BAR ASSOCIATION
BOARD OF GOVERNORS
ADOPTED:  June 25, 1992