It is an obligation of the Board to ensure the continued fiscal responsibility of Union WELL Inc. This Reserve Policy provides criteria for the Management and Board of Union WELL Inc. and the staff of the university to measure the adequacy of the Union WELL Inc. reserves, fee rates and to guide in allocation from Union WELL Inc. Reserves for repair, replacement, facility modification and other projects.
Reserves - financial resources set aside for future or potential use.
Revenue Fund – a trust fund, administered by the campus on behalf of Union WELL Inc. It is used to deposit, transfer, and/or expend specifically defined monies such as student fees. The monies are maintained at the University with regular accounting reports, or access through Campus systems made available to Union WELL Inc.
Operating Fund – a fund administered directly by Union WELL Inc. A portion of the Revenue Fund is transferred each fiscal year in order to fund Union WELL Inc.'s operating budget. All operating fund accounting transactions are recorded on the books of Union WELL Inc.
Guidelines and Procedures
A. Sources of Local Funds
Union WELL Inc. receives its operating funds from the following sources:
B. Sources of funds for the Revenue Fund (Referendum) Recreation Programs
C. Financial Standards
2. Fund Levels:
a. Repair and Replacement: (Designated Unrestricted Net Asset, Fund 2): Union WELL Inc. will maintain a major repair, replacement and refurbishment reserve for Union WELL Inc. equipment, furnishings, and facilities at a level of fifty percent (50%) of the current total replacement value of Union WELL Inc. furnishings and equipment (The WELL value is 1/3 of the value of fitness equipment should be planned for each year) and that this reserve requirement shall be determined and updated annually by application of the then current cost-of-living index to the acquisition cost of furnishings and equipment.
d. Interest and Redemption Fund: Used as a source to pay for annual debt service on outstanding 30-year bonds issued to finance construction of all Union WELL Inc. buildings and facilities.
e. Construction Fund (TBU02) used as a source for the construction or major renovations of Union WELL Inc. facilities.
D. The annual budget review process shall include an analysis of the funding goals for each reserve, the adequacy of purpose of each reserve account, and the recommended funding for each reserve account based upon the established priority. Estimated funds in excess of operations need and reserve funding goals, if all reserves are fully funded, shall be available as income for the General Operating Budget and capital projects.
E. Reserve Investment Earnings
All annual earnings from the reserve accounts shall be allocated during the budget development process as available income for the next General Operating budget.
Special Note: Union WELL Inc. has continued to operate utilizing an ultra-conservative funding model since its creation as approved by the CSU Chancellor's Office. Currently, the corporation works one year in arrears in utilizing student fees. The ability to modify its funding model, and go to a current year model (collecting and using the current student fees in the current year) exists should the corporation ever need it. The current method in place protects the long term viability of the corporation, even in times of economic hardship. Changes to this financial model requires approval from Finance, Treasury and Risk Management at the Chancellor's Office.
Adopted: May 1985
Approved: May 9, 2002
Approved: April 2009
Approved: December 9, 2013
Approved: February 17, 2016
Approved: April 20, 2016