Foundation assistance plan is now set for July.

The Bar Board of Governors reaffirmed its support for a $6 million loan to the financially strapped Florida Bar Foundation, but it will be the July meeting before the board receives the final details for approval.

Bar Foundation President John Patterson, at the board's May 23 meeting, updated the Foundation's financial position and its predictions for returning to financial health after the loan.

Patterson presented to the board a history of the Foundation's income from the IOTA program, its efforts to build reserves, and how the recession and resulting nearly nonexistent interest rates decimated its prime source of income, thereby draining reserves. Currently, the Foundation gets around $6 million from its IOTA program, but hands out around $12 million in grants--a significantly lower grant amount than just a few years ago.

The loan details are based "on the best advice that we can get from our economists," Patterson said. "What you see is we have about a two- to three-year crisis where reserves go out, and we need bridge funding in some manner to get through that."

He added that the Foundation's advisors predict that interest rates will begin to rise in 2016. With the interest rate on IOTA funds running at 0.125 percent, Patterson said even a slight rise in rates will mean a dramatic improvement in Foundation finances, enabling it to repay the loan, rebuild its reserves, and expand funding for legal aid and other programs.

He said if interest rates were at normal historical levels, the Foundation's IOTA income would exceed $40 million. Before the recession, IOTA income peaked at around $74 million, which was largely put into reserves.

Without the loan, the already reduced grants to legal aid agencies will have to be cut so severely that it would take years to recover from the loss of key staff and other problems, Patterson said. He said that the Foundation would not be seeking the loan if it was not certain the loan could be repayed.

Bar President Eugene Pettis noted that he approached the Foundation, not vice versa, with the idea of a loan. That discussion came in the wake of the member petition to add up to $100 to annual Bar membership fees with the extra money going to the Foundation.

The Board of Governors voted at its May meeting to oppose that petition, which backers plan to file at the Supreme Court on June 16.

Pettis said it will be hard for the Bar to oppose that petition if it isn't offering alternatives to address the...