Glossary
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GLOSSARY
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Ad valorem Taa - a tax levied on the assessed value, net of any exemptions, of real or personal
(" property. This is commonly referred to as `property tax".
t Adopted Budget -The financial plan of revenues and expenditures fora 5sca! yeaz (October 1 -
September 30) as approved by the City Commission.
` Amendment - A change to the adopted budget which may increase or decrease a fund total.
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Appropriation - A specific amount of funds authorized by the City Commission to which financial
obligations and expenditures may be made.
Assessed Value - A value established by the property appraiser for all real or personal property for
use as the base for levying property taxes.
Bond - A written promise to pay a sum of money on a specific date at a specific interest rate as
deta~7ed in a bond ordinance.
Boad Covenants - An agreement between the City and lenders which specifies a payment schedule,
i terms, security, pledges, use of funds and reserves to be held.
Budget Calendar -The schedule of key dates for the process ofadopting and executing anadopted
budget.
~" Budget Document -The official written statement of the annual fiscal year financial plan for the
l : ' City as presented by the City Manager.
(" Budget Hearing -The public hearing conducted by the City Commissioners to consider and adopt
l the annual budget.
Budget Message - A briefwritten statement presented by the City Manager to explain the principal
~" Capital Needs -The identification of public facffities needed within the community.
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' budget issues and to provide policy recommendations to the City Commissioners.
Capital Improvement Plan - A plan for capital expenditures to be incurred each year over a fixed
number of years. The plan sets forth each capital project and identifies the expected beginning and
ending year for each project and the amount to be expended in each year and a method of funding for
r, those projects.
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Capital Outlay -Expenditures that result in the addition of a capital asset (fixed asset costing
$1,000 or more with useful life of greater than one year). ^
Capital Projects -The acquisition, construction or improvement ofdesignated fixed assets suchas
land and buildings.
Cash Reserves -Moneys either restricted or designated which are set aside in a fund and which are
appropriated to ensure sufficient cash is available for the following fiscal year.
City Commissioner -The governing body of the City ofAtlantic Beach composed of five elected
officials. The duties and responsibilities ofthe Commission are established by Florida Statutes and the
City's Code of Ordinances.
City Manager - 7'he chief administrative officer of the City appointed by the City Commission.
Contingency - A budgetary reserve to provide for emergency or unanticipated expenditures during
the fiscal year.
Contracting Out -Legal agreement whereby the City pays a private business or individual to --
provide the public with a service or product.
Credit Ratings - An independent rating service's evaluation of the credit worthiness of notes and
bonds. Ratings influence the cost of borrowing funds.
Debt -Funds owed as a result of borrowing.
Debt Service -The expense of retiring such debt as loans and bond issues. It includes principal and
interest payments, and payment for the paying agents, registrars and escrow agents. .-
Debt Service Reserve -Moneys set aside to ensure that funds will be ava$able in the event that
pledged revenues fall short of expectations.
Deficit -The excess of expenditures over revenues during a fiscal year.
Department - A basic organizational unit of the City which is functionally unique in its service
delivery.
Depreciation -The periodic expiration ofan asset's useful life. Depreciation is a requirement inthe
proprietary fund types including the Enterprise and Internal Service Funds.
Encumbrance -The commitment of appropriated funds to purchase an item or service. ^.
Enterprise Fund - A governmental accounting fund in which the services provided are finviced and
operated similarly to those of a private business enterprise, i.e., to be self supporting through user --
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charges or other fees.
Expenditure -Decrease in fund financial resources for the procurement of assets or the cost of
goods and / or services received.
Final Millage -The tax rate adopted in the final public hearing of a taxing authority.
Fiscal Year -The annual budget yeaz for the City which runs from October 1 through September
30. The abbreviation to designate fiscal yeaz is "FY".
l Franchise Agreement - Agreement between the City and a provider of public services, such as
l cable television or gazbage collection, which unparts certain standazds on the company and provides
for the payment of franchise fees to the City.
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t " Fund - A fiscal and accounting entity with a self balancing set ofaccounts recording cash and other
financial resources, together with all related liabilities and residual equities or balances, and changes
therein, which are segregated for the purpose of carrying on specific activities or attaining certain
objectives in accordance with special regulations, restrictions, or limitations.
~ ; Fund Balance -The excess of fund assets over fund liabilities. These unspent funds canbe included
as revenues in the following yeaz's budget. A negative fund balance is sometunes referred to as a
r deficit.
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General Fund -The governmental accounting fund supported by ad valorem property taxes,
t licenses and pen~nits, service charges, and other general revenues to provide city-wide operating
t services. This maybe referred to as the Operating Fund.
L General Obligation Bond - A bond secured by the pledge ofthe issuing jurisdiction's full faith,
credit and taxing authority and is voter approved.
.Grant - A contnbution ofassets (usually cash) by one governmental unit or other organizztion to
(' another made for a specific purpose.
t ; Impact Fee -Monetary payments made by bu~7ders or developers to defray the public cost of
r providing infrastructure capital to a development.
` , Infrastructure -Public support structures such as roads, street lighting, water and sewer lines and
r storm drainage.
` ' Intergovernmental Revenue - Revenue received from another governmental unit for a specific
P~re•
Levy - To impose taxes, special assessments, or service chazges. Another term for a m~llage rate.
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License or Permit Fee - A charge for specific items as required or approved by local and state
regulations for example, building permits and mob~7e home licenses. -_
Line -Item Budget - A budget that lists each account category separately along with the dollar
amount budgeted for each account, such as office supplies, overtime or buildings.
Long Term Debt. -Debt with the maturity date being more than one year after issuance.
Mandate -Any responsibdity, action or procedure that is imposed by one government entity on ~
another through constitutional, legislative, administrative, executive or judicial action as a direct order
or that is required as a condition ofaid. "'
Matching Requirement - A jurisdictions contnbution to a project or function required by a
grantor. Matching requirements are frequently imposed as a proportionate share of the overall
contnbution.
Mill or Millage Rate - (1 / 1,000) of one dollar, used in computing taxes by multiplying the rate ..
times the taxable value divided by 1,000. Example: millage rate of 3.71 per thousand; taxable value
of 550,000 = 550,000 divided by 1,000 = 550 multiplied by 3.71 = 185.5. .-.
Non-Departmental Eapenditures -Expenditures which benefit all or a portion of City
departments, such as property and liability insurance. ^
Object Code - An account to which an expenditure or expense is recorded in order to accumulate
and categorize the various types of payments that are made by governments. Certain object codes are "'
mandated by the Uniform Accounting System chart of accounts.
Operating Eapenditures -Also known as Operating and Maintenance Costs, these are the
expenses of the day to day operations which exclude capital costs, such as office supplies,
maintenance of equipment and utilities.
Personal Services -Also known as Salary ,Wages and Benefits related to the compensation of
employees. --
Privatization -The government policy of allowing or contracting with the private sector for the
provision of public services.
Property Taa -Same as definition for ad valorem tax.
Proposed Millage -The tax rate certified to the property appraiser by each taxing authority.
Real Property -Land and the buildimgs and other structures attached to it that are taxable under
state law.
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Reserve - Aa account used to indicate that a portion of a fund's balance is restricted for a specific
purpose and is therefore, not available for general appropriation.
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Revenue -Funds that a government receives as income. These receipts may include tax payments,
(, interest earnings, service charges, grants and intergovernmental receipts. .
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Revenue Bonds -Bonds usually sold for the construction of a capital project that will produce
revenue for the governmental unit issuing the bonds. The revenue is pledged and used for the
~' payment of principal and interest on the bonds.
Special Assessment - A compulsory levy imposed on certain properties to defray part or all of the
costs of a specific improvement or service deemed to primarfiy benefit those properties.
l : Tax Base -The total property valuation on which each taxing authority levies it's tax rates.
Taz roll -The certificate of assessed taxable value prepazed by the property appraiser and presented
to the taxing authority by July 1, or later if an extension is granted by the State, each year.
(~ Taa Year -The calendaz year in which ad valorem property taxes are levied to finance the ending
t . fiscal year budget. For example, the tax roll for the 1998 calendar year would be used to calculate the
ad valorem taxes levied for the FY 1998-99 budget.
C Tentative Millage -The tax rate adopted in the fast public hearing of a taxing authority. Under
state law, the authority may reduce, but not increase without individual notification, the tentative
millage during the final budget hearing.
r Truth In Millage Law -also known as the TRIM Bill. A 1980 law enacted by the Florida
l ' Legislature which changed the budget process for local taxing authorities. It was designed to keep
the public informed about the taxing intentions of the various authorities.
Uniform Accounting System -The chart of accounts prescn'bed by the Office of the State
Comptroller designed to standardize financial information to facilitate comparisons and evaluation of
reports.
_ User Fees -The charges for direct receipt ofpublic services.
Unencumbered Balance -The amount of an appropriation that is neither expended nor
encumbered. It is essentially the amount of funds still available for future needs.
' Voted Millage -Property tax levies authoruxd by voters within a taxing authority. Bond issues that
are backed by property taxes are a common reason for a voted millage in the State of Florida. A
bond issue of this type is called a General Obligation Bond.
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