Budget Guideline: 5-Year Reserve Utilization Plan

Effective Date: February 2, 2026 (see revision log for what changed on this date)

Guideline

Units will maintain a documented strategy for planned reserve utilization.
Leaders should understand how to develop a 5-year Reserve Utilization plan to create long-term forecasts. The goal is to ensure reserves are being used effectively and proactively to support institutional priorities while maintaining financial stability.
Prioritize reserve utilization before making new one-time budget requests and develop a clear reserve plan to help units and campus leadership align priorities and expected use of funds across the institution.

Key Details

Each fall, Budget and Fiscal Planning (BFP) will distribute a standardized reserve utilization template to all units, org level 4 or org level 5. Units must complete the provided reserve template to communicate their planned use of reserves to executive leadership.
Ensure strategic use of reserves and management of revenue/expense volatility.

Planning Considerations

Be sure to consider what is needed to cover expected one-time expenses.
Monitor and manage reserve growth. Review unplanned vacancy savings or unexpected surpluses—are reserves growing faster than expected? If reserves are accumulating beyond anticipated needs, establish a plan to strategically reinvest those funds.
Ensure alignment with unit and the campus strategic plans. Identify upcoming strategic priorities, program expansions, or operational enhancements that may require reserve funding for your unit. Before submitting a one-time funding request, assess whether reserves can be used to cover the need. If the expense is ongoing, determine whether an internal adjustment of continuing budget is required.
If a unit leverages vacancy savings in budget planning, ensure that reserve planning includes a contingency for unmet vacancy savings.

FAQ for 5-Year Reserve Utilization Plan

Which reserve fund type should I spend down first?

Expenses should be covered using the most restrictive dollars first and then applying less restrictive dollars thereafter. Contact BFP@colorado.edu for guidance tailored to your specific reserves.

Can reserves be used for ongoing expenses?

Reserves should generally be used for one-time costs rather than ongoing expenses. If a need is recurring, work with your executive leader to identify a long-term funding strategy.

How often should the reserve plan be updated?

A 5-Year Reserve Utilization Plan should be reviewed and updated at least annually during the fall submission process to reflect changes in priorities, funding needs, and unexpected financial shifts.

Revision Log

February 2, 2026: Original publication