9.15.22 OMA Finance Committee Meeting

7173 S. Havana St #600-130 Centennial, CO 80112 P: 303.770.2526 | F: 303.779.4834 obesitymedicine.org

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DEFINITIONS AND SPENDING POLICY

ResReserve Fund Reserve Fund Objective: To optimize yields on OMA’s short-term assets while maintaining adequate liquidity, without taking excessive principal risk. The Reserve Fund does not fall under the parameters of the Investment Policy Statement. The Parameters are listed below. Reserve Fund Purpose: To ensure adequate cash for operations. Note this policy excludes funds which are required for the normal operating activities of the association (i.e. the checking account), which at no point in time shall exceed $600,000. Reserve Fund Balance: OMA will maintain adequate reserves to provide for a minimum of six months of operating expense. While the industry average recommended target for reserves is three to six months of operating expenses, OMA will maintain a conservative reserve amount in the reserve fund balance. The board must authorize any disbursements from the reserve fund that require depletion below six months of operating expense. The reserve fund shall be invested in liquid instruments. When investing liquid assets, the advisor will emphasize safety, liquidity, and yield, in that order, with staggered maturities up to a maximum of 36 months. The weighted average duration of liquid assets shall be less than three years. The reserve fund may also be invested in short term fixed income assets. This portion of the portfolio is designed to maximize return, consistent with safety of the principal. Liquidity is a secondary objective. Maturities should be reasonably laddered out to a maximum of eight years. The weighted average duration of fixed income assets shall be less than six years. It is acceptable for there to be some principal fluctuation and risk in an effort to earn a greater total return. Investment Fund Investment Fund Objective: to support OMA’s strategic objectives and to be invested in medium to long-term vehicles designed to grow the organization’s savings, and to provide annual distributions to supplement operating revenue. Specific allocations of the investment fund have been designated in the OMA Investment Policy.

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