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Glossary of Budget and Finance Terms
ACTIVITY: A specific unit of work or service performed.
ADA: Americans with Disabilities Act, which is the federal legislation, requiring all public buildings to be handicap accessible.
ADJUSTED BUDGET: The Adopted Budget as amended by the City Council and adjusted to show comparability as a result of shifts in programmatical or functional responsibilities.
AMENDED BUDGET: The Adopted Budget as formally adjusted by the City Council.
APPROPRIATION: An authorization made by the City Council which permits officials to incur encumbrances or obligations against and to make expenditures of City controlled governmental dollar resources. Appropriations are usually made for fixed dollar amounts and are typically granted for a one (1) fiscal year period.
APPROPRIATION ORDINANCE: The official enactment by the City Council establishing the legal authority for the City officials to encumber or obligate and expend dollar resources.
ASSESSED VALUATION: The estimated dollar value placed upon real and personal property by the chief appraiser of the appraisal district as the basis for levying property taxes.
ASSETS: Property owned by the City which has book or appraised monetary value.
AUDIT: A systematic examination of resource utilization concluding in a written report. It is a test of management’s internal accounting controls.
BASE BUDGET: On-going expense for personnel, contractual services, materials and supplies, and the replacement of supplies and equipment required to maintain service levels previously authorized by the City Council.
BOCA: United States (Building Officials and Code Administrators) Code.
BOND (DEBT INSTRUMENT): A written promise to pay (debt) a specified sum of money (called principal or face value) at a specified future date (called the maturity date) along with periodic interest paid at a specified percentage of the principal (interest rate). Bonds are typically used for long-term debt to pay for specific capital expenditures.
BUDGET (OPERATING): A plan of financial operation embodying an estimate of proposed revenues and expenditures for a given period (typically a fiscal year). The term “Approved Budget” is often used to denote the City Council officially Approved Budget under which the City and its departments operate.
BUDGET CALENDAR: The schedule of key dates or milestones which the City follows in the preparation, processing and adoption of the budget.
BUDGET DOCUMENT: The official written statement prepared by the Budget office and supporting staff which presents the Proposed Budget to the City Council.
BUDGET MESSAGE: A general discussion of the Proposed Budget presented in writing as a part of the budget document. The budget message explains principal budget issues against the background of financial experience in recent years and presents recommendations made by the City Manager and the Budget Director.
CAPITAL ASSETS: Assets of significant value and having a useful life of several years. Capital assets are also called fixed assets.
CAPITAL BUDGET: A plan of proposed capital expenditures for buildings, parks, utilities, etc., and their financing sources. The Capital Budget should be enacted as part of the City’s Consolidated Budget which includes both the Operating Budget and the Capital Budget. The Capital Budget should be based on the first fiscal year of the five (5) (plus) year Capital Improvement Budget (CIB).
CAPITAL IMPROVEMENT BUDGET: A plan for capital expenditures to be incurred each year over a period of five (5) future years setting forth each capital project, identifying the expected beginning and ending date for each capital project, the amount to be expended in each year, and the method of financing those expenditures. Also, operating cost impacts are identified for each project for inclusion in appropriate operating budgets.
CAPITAL OUTLAYS: Expenditures for the acquisition of capital assets. Includes the cost of land, buildings, permanent improvements, machinery, large tools, rolling and stationary equipment.
CAPITAL PROJECTS: Projects which purchase or construct capital assets. Typically a capital project encompasses a purchase of land and/or the construction of a building or facility.
CEIC: Chesapeake Environmental Improvement Council.
CERTIFICATE OF DEPOSIT: A negotiable or non-negotiable receipt for monies deposited in a bank or financial institution for a specified period for a specified rate of interest.
CHARTER: The legal document in which the Commonwealth of Virginia Assembly grants the City’s authority.
CIB: Capital Improvement Budget, which is the City’s plan for capital expenditures.
CITY GARAGE: An Internal Service Fund (Inter-Department Transfer) financed operation where user pays/absorbs the costs of service.
COMMERCIAL PAPER: A very short-term unsecured promissory note, supported by a bank line or letter of credit, which has a maturity from one (1) to 270 days. Some cities issue commercial paper for their Sewer Revenue Fund to provide some flexibility in financing the Capital Improvement Program for the Sewer System.
COMMODITIES: Items of expenditure (in the Operating Budget) which, after use, are consumed or show a material change in their physical condition, and which are generally of limited value and are characterized by rapid depreciation. Office supplies and motor fuel are examples of commodities.
CONTINGENCY: A budgetary reserve set aside for emergencies or unforeseen expenditures.
CONTRACTUAL SERVICES: Are items of expenditure for services the City receives from an InterDepartment Transfer or from an outside company. Utilities, rent, and postage are examples of contractual services.
COPS: Federal grants awarded to support community policing programs and other law enforcement initiatives.
DEBT SERVICE: Payment of fees, interest and repayment of principal to holders of the City’s debt instruments.
- The excess of an entity’s or fund’s liabilities over its assets (See Fund Balance).
- The excess of expenditures or expenses over revenues during a single accounting period.
- Expiration in the service life of capital asset attributable to wear and tear, deterioration, action of the physical elements, inadequacy obsolescence.
- That portion of the cost of a capital asset which is charged as an expense during a particular period.
DEQ: Department of Environmental Quality.
DMHRMRSAS: The Commonwealth of Virginia Department of Mental Health, Intellectual Disabilities and Substance Abuse Services which is the parent organization to the City’s Community Services Department.
DMV: Division of Motor Vehicles, a federal agency responsible for administering the registration of vehicles.
ENCUMBRANCES: Obligations in form of purchase orders, contracts or salary commitments which are chargeable to an appropriation and for which a part of the appropriation is reserved. They cease to be encumbrances when paid or when an actual liability is set-up/recorded.
ENTERPRISE FUND: Public Utilities are examples of enterprise funds. Separate financial accounting used for government operations that are financed and operated in a manner similar to business enterprises, and for which preparation of an income statement is desirable.
EPA: The Environmental Protection Agency, which is a federal agency that enforces environmental regulations.
EVMS: Eastern Virginia Medical School which is a medical school located in Hampton Roads.
EXPENDITURES: Where accounts are kept on the accrual or modified accrual basis of accounting, the cost of goods received or services rendered whether cash payments have been made or not. Where accounts are kept on a cash basis, expenditures are recognized only when the cash payments for the above purposes are made.
FISCAL YEAR: The twelve (12) month period beginning July 1st and ending the following June 30th.
FULL FAITH AND CREDIT: A pledge of the City’s taxing power of a government to repay debt obligations (typically used in reference to General Obligation Bonds or tax-supported debt).
FUNCTION: An accounting entity which is part of a fund. It is a compilation of all costs associated with a program or a department within a fund.
FUND: An independent fiscal and accounting entity with a self-balancing set of accounts recording cash and/or other resources together with all related liabilities, obligations, reserves, and equities which are segregated for the purpose of carrying on specific activities or attaining certain objectives.
FY: The abbreviation for Fiscal Year which the twelve (12) period beginning on July 1st and ending on
GENERAL OBLIGATION BONDS: When the City pledges its full faith and credit to the repayment of the bonds it issues, then those bonds are general obligation (G.O.) bonds. Sometimes the term is also used to refer to bonds which are to be repaid from taxes and other general revenues.
GIS: Geographical Information System which is a City-wide computerized mapping program.
GOALS: Statements about a department’s long term objectives.
HVAC: Heating, ventilating and air conditioning; the system or systems that condition air in a building.
HUD: Housing and Urban Development which is a federal agency that awards the grant funding to the City for housing and urban development projects.
INTERGOVERNMENTAL GRANT: A contribution of assets (usually cash) by one (1) governmental unit or other organization to another. Typically, these contributions are made to local governments from the State and Federal Governments. Grants are usually made for specified purposes.
INTERNAL SERVICE FUND: Funds used to account for the financing of goods or services provided by one (1) department or agency to other departments or agencies of the City, or to other governments, on a cost-reimbursement basis. Transfer of charges are made by Inter-Departmental Transfer (IDT).
INVESTMENT: Securities and real estate purchased and held for the production of income in the form of interest, dividends, rentals or base payments.
MH: Mental Health Services which is a division of the Community Services Department.
MODIFIED ACCURAL ACCOUNTING: A basis of accounting in which revenues are recorded when collected with the current period or soon enough thereafter to be used to pay liabilities of the current period and expenditures are recognized when the related liability is incurred.
MR: Intellectual Disabilities Services which is a division of the Community Services Department.
OBJECT OF EXPENDITURE: Expenditure classifications based upon the types or categories of goods and services purchased. (For greater detail, see Chart of Accounts) Typical objects of expenditure include:
- Personal services (salaries and wages paid to employees for full and part-time work, including overtime, shift differential and similar compensation);
- Purchased services (private vendors, public authorities or other governmental entities);
- Materials and supplies;
- Capital outlay.
OPERATING FUNDS: Resources derived from recurring revenue sources used to finance ongoing operating expenditures and pay-as-you-go capital projects.
PERFORMANCE MEASURES: Specific quantitative productivity measures of work performed within an activity or program (e.g., total miles of streets cleaned). Also, a specific quantitative measure of results obtained through a program or activity (e.g., reduced incidence of vandalism due to new street lighting program).
PERSONAL SERVICES: Items of expenditures in the Operating Budget for salaries and wages paid for services performed by City employees, as well as the incidental fringe benefit costs associated with City employment.
PM: Preventative Maintenance, regular inspection to prevent problems before they happen.
RESERVE: An account used to indicate that a portion of fund equity or balance is legally designated or restricted for a specific purpose, e.g., cash flow reserve.
RESOURCES: Total dollars, people, materials and facilities available for use including estimated revenues, fund transfers, and beginning fund balances.
REVENUE: The term designates an increase to the dollar value of a fund’s assets which: - Does not increase a liability (e.g., proceeds from a loan); - Does not represent a repayment of an expenditure already made; - Does not represent a cancellation of certain liabilities; - Does not represent an increase in contributed capital.
REVENUE BONDS: When a government issues bonds, which do not pledge the full faith and credit of the jurisdiction, it issues limited liability revenue bonds. Typically, pledges are made to dedicate one (1) specific revenue source to repay these bonds. Revenue bonds are not included in the debt limit set by City Charter and under state law do not require voter approval.
REVENUE ESTIMATE: A formal estimate of how much revenue will be earned from a specific revenue sources for some future period; typically, a future fiscal year.
SEWER UTILITY: Funding received from sewer usage fees for the Public Utilities Department's operations.
SOL: Standards of Learning which are the measures used by the Commonwealth of Virginia against which all students’ achievement in school will be measured.
SOQ: Standards of Quality. A term describing the minimum limits the state prescribes for funding reimbursements of school personnel including teachers, principals, and other non-instruction staff.
SOURCE OF REVENUE: Revenues are classified according to their source or point of origin, e.g., real estate taxes.
STORMWATER MANAGEMENT OPERATIONS: A division of Public Works responsible for developing and implementing cost effective compliance with state and federal regulations governing stormwater quality.
TANF: Temporary Assistance to Needed Families, which is federal assistance, which replaced the Aid for Families with Dependent Children (AFDC). It requires all participants to find work after receiving assistance for 24 months and to participate in community services within two months.
TAX LEVY: The total amount to be raised by general property taxes for operations and debt service purposes specified in the Annual Tax Ordinance.
TAX RATE: The amount of tax levied for each $100 of assessed valuations of property.
TAX RATE LIMIT: The maximum legal property tax rate at which a municipality may levy a tax. The limit may apply to taxes raised for a particular purpose or for general purposes.
TV: (Not presented as an acronym) - to inspect water lines/pipes with a video camera.
USER CHARGES (ALSO KNOWN AS USER FEES): The payment of a fee for direct receipt of a public service by the party benefiting from the service.
VIEW: Virginia Initiative for Employment not Welfare which is the state welfare reform program that places work requirement and time limits on receiving public assistance.
VPDES: Virginia Pollutant Discharge Elimination System, referred to in relation to Stormwater Management Operations.
VRS: Virginia Retirement System which is the state retirement system for public employees that provides its members with benefits at retirement or upon disability or death.