The California Lawyers Association (“Association”) requires that all Sections maintain a reserve account in order to pay for expenses as incurred. The Association requires that the Sections prepare an annual budget and strongly urges the Sections to operate within that budget. The Association expects that all Sections shall operate without a deficit. However, the Association acknowledges that issues can arise such as programs may not be as profitable as expected. As a result, it is prudent for each Section to maintain a reserve account that can be used to pay for the Section’s separately incurred expenses as well as the shared expenses of the Association when needed.
Additionally, the Sections recognize that each Section’s utilization of shared expenses, such as administrative costs, mutually benefits the Sections and the Association. It is crucial that the Association’s overhead costs and other shared expenses be paid timely and that no Section burden the other Sections with an inability to pay its share of costs.
I. Policy Statement
This reserve policy (“Policy”) sets forth the requirements for Sections to establish and maintain a reserve account.
This Policy covers all 16 Sections of the Association.
III. General Guidelines
- All 16 Sections will receive their 2016 reserve fund plus any reserves generated in 2017 from the State Bar of California.
- Sections and the California Young Lawyers Association shall prepare an annual budget by November 1st for the following year.
- Sections shall maintain a reserve account of at least 50% of the current year’s budgeted operating expenses.
- Any Section that does not have a reserve of 50% of budgeted expenses as of January 1, 2018, shall have until January 1, 2020 to build up a reserve account with 50% of budgeted operating expenses.
- If a Section’s reserves during any given year drops below 50% of budgeted operating expenses, the Section shall work with the Association’s Chief Financial Officer and Executive Director on budgeting and planning for the next year to build up its reserves to 50% of operating expenses.