Seattle College District Procedure

NUMBER: 608

TITLE: Reserve Policy Procedures

Seattle Colleges maintains operating reserves consistent with the targets established in the policy. Seattle Colleges works toward a long-term operating reserve goal equal to twenty-five (25) percent of operating expenditures, with a goal of achieving this target by the year 2034, through a phased, multi-year approach. This reserve will be maintained by each of its operating units, Seattle Colleges District Office, North Seattle College, Seattle Central College, and South Seattle College.

The phased approach includes incremental reserve targets over multiple fiscal years designed to achieve the District’s long-term operating reserve goal of twenty-five (25) percent. A chart outlining these benchmarks is incorporated into this procedure and serves as the basis for monitoring progress toward that goal.

Reserve funds may be used to help the Colleges and District deal with fluctuation in revenue or expenditure amounts in a given fiscal year, provide funding for special one-time expenditures for equipment, program start-up, and other costs; and ensure that adequate funds are available for the Districts working capital needs.

It is the intent that this reserve should include all operating and non-operating local funds within the District. Excluded from the calculation for reserves would be Capital Funds, and Trust and Agency Funds.

A reserve account will be maintained in each fund for each of the District operating units, and reserve funds will be transferred from budgets within that fund within that College or operating unit to be placed in the reserve. Transfers in and out of the reserve fund would have to be approved by the College President or Chancellor. The intent is to maintain a District-wide reserve aligned with the targets established in District policy, including progress toward the long-term goal of a twenty-five (25) percent operating reserve. Reserve levels are not required to be uniform across funds or operating units, but instead reflect an aggregated District-wide reserve. It is important that each of the operating units maintain a target for its cash reserve. The reserve is a variable amount to allow analysis by College and District personnel to determine the specific needs of each of the operating units for reserve balances.

Funds placed in reserve must be clearly surplus and not committed for any specific purpose. Operating budget funds roll up into one account balance at the end of the year. If there is a surplus in the operating balance, it may be placed in reserve. Non-operating funds, grants and contracts, enterprise funds, lab fees, community service, resale budgets, etc. these programs activities and their budgets are stand-alone, and may either be in a positive or a negative balance at the end of any fiscal year. Surpluses in these accounts are generally created either by generating more revenue than expected or budgeted or by spending less than originally budgeted.

In any given year, non-operating budgets grants and contracts, enterprise funds, lab fees, self-support programs, resale budgets, etc., may be in a deficit balance. It is important that these budgets be offset or brought back to zero before funds are placed in the reserve. Therefore it is important that all deficit budgets be zeroed out before the end of the next fiscal year, unless specifically approved to be carried forward for more than one fiscal year by the Chancellor. This will ensure that actual reserves identified by the District are not being offset by deficit budgets somewhere else, in that fund or another fund.

Chancellor’s Cabinet – Revision & Adoption History
Adopted:
Revised: 02/14/2014
Revised: 07/09/2026