In compliance with the Board of Trustees’ direction, the College will maintain an operating reserve balance to ensure the College has the ability to carry out its mission. The Board, in its fiduciary capacity for prudent financial management, directs the College to accumulate and maintain sufficient reserves to accomplish specific, strategic objectives of the College. Therefore, the Board directs the College to begin each fiscal year with local operating reserves of no less than 15% of the annual operating revenue budget of the College and to maintain debt appropriate for sound financial management of the College.
The administration is to consider the following goals in managing fund balances:
A. Accumulate financing for specific capital or other significant equipment/facility investments for the future.
B. Maintain a level of funds that can be used to minimize the impact associated with unexpected allocation reductions to the operating budget.
C. Create and maintain the ability to respond to unplanned events, such as natural disaster, to keep the campus operating.
D. One time expenditures for program start-up and enhancement.
E. Other situations as determined by the President and/or approved by the Board.
Expenditures of greater than $100,000 of unobligated reserves will be submitted by the President to the Board of Trustees for approval prior to the use of such funds; total annual expended funds by the President under this provision, will not exceed $250,000.
The Board delegates to the President responsibility for managing fund balances. The President is to strictly adhere to state investment guidelines in the investment and management of all fund balances.
The administration is to comply with the following for debt management:
A. In accordance with RCW 29B.50.140(6) and with approval by the Board of Trustees and by the State Board for Community and Technical Colleges (SBCTC), the college may borrow money and issue and sell revenue bonds in accordance with the provisions of RCW 28B.10.330 and RCW 39.94.
B. The college shall not incur debt or borrow money which will cause the aggregate debt contracted by the college to exceed that amount for which payments of principal and interest in any fiscal year would require the college to expend more than 7 (seven) percent of the average general operating revenues, to include general operating revenue and auxiliary services revenue, for the three immediately preceding fiscal years.
The President shall provide annual fund balance and debt service status reports to the Board of Trustees. Such reports shall include, but not be limited to, analysis utilizing State Board for Community and Technical Colleges Fiscal Health Measures Guidelines.
The president and the Board of Trustees.