UW Establishes Operations, Facilities Reserve Accounts

As part of an effort to improve financial management, the University of Wyoming will establish reserve accounts at levels appropriate to the size of the institution.

Following through on a resolution it adopted earlier this year, the UW Board of Trustees today (Thursday) authorized the movement of funding from a number of existing UW accounts to initially fund a $50 million operations reserve account and an initial $20 million capital facilities reserve account.

“This is a prudent action to ensure that the university is in a position to address unexpected or unusual conditions due to changes in available revenue, or unanticipated costs associated with the approved UW budget,” Board of Trustees President John MacPherson says. “Reserve accounts such as these are customary for public institutions, and the board is committed to building and maintaining them at appropriate levels.”

The board’s objective is to maintain an operations reserve of at least 10 percent of the university’s annual operating budget, which now stands at a little over $560 million. The initial target of a $50 million reserve is for specific purposes: general operations, employer-paid benefits, Academic Affairs, Information Technology and a voluntary separation program.

The board plans to build the capital facilities reserve to $40 million over time. Initially, $20 million will be moved into the account, with $10 million earmarked for Residence Life and Dining Services, and $5 million each for a general construction reserve and a distributed power project.

The resolution adopted by the board in January directed the administration to establish and fund the reserve accounts. The policy approved today requires that spending that would deplete the operating reserves to below 10 percent of UW’s annual operating budget will be done only with the approval of the Board of Trustees, upon recommendation of the president and the trustees’ Budget Committee.

Any spending out of the reserve accounts must be accompanied by a plan to replenish them.