At a minimum, the Operating Reserve balance of the Scarborough Public Library Corporation shall be the greater of (a) one twelfth of the current Library budget, or (b) $200,000.
Source of funds
Funds directed to other accounts (other than the endowment funds), but which remain as cash shall be transferred into the Corporation's main demand account as soon as is practicable. In addition, all payments due to the library from budgeted operating funds from the Town of Scarborough are to be deposited in the Operating Reserve account, as are all donations as received from time to time from annual campaigns or special donor appeals, with excess funds moved to the Discretionary Investment Fund from time to time as described above.
Calculation basis
The Operating Reserve balance shall be calculated as the amount of all cash and cash equivalents held directly by the Corporation. Cash equivalents held by the endowment funds shall be excluded from the calculation. In addition, any amounts received as part of a designated gift, but not yet disbursed to purchase the designated asset, shall be excluded. Accounts payable and receivable shall also be excluded when calculating the total Operating Reserve balance.
Actions regarding excess (deficit) balances
The Board shall review the adequacy of the amount of operating reserve at least annually. If excess funds above the operating minimum have accrued since the prior review, the Director shall be instructed to move the excess balance to the Discretionary Investment Fund. Alternatively, if the operating reserve drops below the target balance, the Director is instructed to reduce discretionary budget spending until the balance is back above the minimum target above.
Authorized spending
The Library Director is authorized to draw down the Operating Reserve to pay for all ordinary and budgeted expenditures, and to pay for unbudgeted expenses up to $2,500 per month. The President, with concurrent approval of the Library Director and the Treasurer, is authorized to draw down the Operating Reserve to pay for unbudgeted expenses and for fundraising costs, up to $10,000 per month, respectively. Unbudgeted expenditures above such amounts require review and approval by the Board of Trustees.
Adopted June 2025