The Board understands that in order to avoid financial instability, continuing requirements cannot increase faster than continuing revenues. It is the policy of the Board to establish unappropriated reserves and an emergency contingency account in the General Fund, each fiscal year during the budget process. These combined amounts are the ending fund balance, and the minimum combined amount shall equal 5%, with a target range of 6%-10%.

1. Unappropriated Reserves:
   Except for the specific conditions cited in ORS 294.455, no action may be taken through resolution or supplemental budget to spend these monies. The account will be funded at a minimum level of 2% of total General Fund expenditures, with a target of 3% to 5% on average.
2. Contingency Funds:
   Contingency will be funded at 3% to 5% of General Fund expenditures. To ensure contingency funds are only spent as absolutely necessary, the following are guidelines to be used by the Board, when considering requests for transferring monies out of the General Fund contingency account:
   • The contingency account may be used for “one-time-only” allocations, and
   • Limit contingency funding to the following:
     • Emergency situations which, if left unattended, will jeopardize the health and safety of the College community; or
     • Unanticipated expenditures necessary to keep a public commitment or fulfill a legislative or contractual mandate, or which have been demonstrated to result in significant administrative or programmatic efficiencies, that cannot be covered by existing appropriations.

When the Ending Fund Balance falls to less than 5%, the college shall adopt a plan to replenish the Ending Fund Balance to 5% within two years. If the total Ending Fund Balance (including restricted) falls to levels that require short-term borrowing, the levels set by this policy shall be automatically reviewed and adjusted as necessary.

END OF POLICY

Reference:
ORS 294.455