Financial Budget Links

Budget - Proposed
2010-2011

 

 

 

 

 

 

 


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Glossary of Budget and Finance Terms

A

Account:  a unique identification number and title for a class of expenditures; the most detailed level of budgeting and recording expenditures; also known as the “line item”.

Accounting System: the total set of records that are used to record, classify, and report information on the financial status and operation of an entity.

 Accrual Basis of Accounting: basis of accounting that records the financial effects of transactions and other events that have cash consequences in the periods in which those transactions or events occur rather than only in the periods in which cash is received or paid by the enterprise. 

Activity: an office within a department to which specific expenses are to be allocated.

Administrative Service Charge: an administrative fee charged to funds outside the General Fund for general overhead such as accounting, payroll, budget services and liability insurance.

Adopted Budget: a budget that has been approved by the City Council. 

Allocation:  the distribution of available monies, personnel and equipment among various City functions.

Amortization:  the reduction of an account through regular payments over a specific period of time.

Annual Budget: an estimate of expenditures for specific purposes during the fiscal year and the proposed means (estimated revenues) for financing those activities.

 Appropriation: an authorization made by the legislative body of a government that permits officials to incur obligations and to make expenditures of governmental resources.

Assessed Value: a valuation set upon real or personal property by the City Assessor as a basis for levying taxes.

 

Asset: anything owned by an individual or a business, which has commercial exchange value.  Assets may consist of specific property or claims against others, in contrast to obligations due others. 

Audit:  a study of the City’s accounting system to ensure that financial records are accurate and in compliance with all legal requirements for the handling of public funds, including state law and the City Charter. 

B

Balanced Budget: a budget in which estimated revenues are equal to or greater than estimated expenditures. 

Bond:  a written promise to pay a specified sum of money (principal or face value) at a specified future date (maturity date) along with periodic interest paid at a specified percentage of the principal (interest rate).  Bonds are used typically for long term debt. 

Bond Anticipation Notes: short-term interest bearing notes issued in anticipation of bonds to be issued at a later date. 

Budget (Operating): a plan of financial operation embodying an estimate of proposed expenditures for a given period of time and the proposed means of financing them. 

Budget Calendar: the schedule of key dates of milestones that a government follows in the preparation and adoption of the budget.

Budget Message: a general discussion of the submitted budget presented in writing by the City Administrator as part of the budget document. 

C

Capital Budget: a plan of proposed capital expenditures and the means of financing them.  The capital budget is enacted as part of the annual budget, which includes both capital budget is based on the Capital Improvement Program (CIP). 

Capital Improvement Plan (CIP): a plan for capital expenditures to be incurred each year over a fixed period of years setting forth each capital project, the duration of the project and the amount to be expended each year of financing those projects.

Capital Outlay: the purchase of items that cost over $1,000 and have a useful life of more than one year. 

Cash Basis of Accounting: records all revenues and expenditures when cash is either received or disbursed. 

Cash Flow Budget: a projection of the cash receipts and disbursements anticipated during a given period. 

CDBG Recipient: individuals or organizations that receive grants from Community Development funds. 

Cost Center: an organizational and/or budgetary unit within a division.  Also known as department ID within the accounting structure. 

Contingency: An estimated amount of funds needed for deficiency, contingent or emergency purposes. 

D

Debt Service: the actual cost of interest and principal on bond maturities as well as the interest costs of bond anticipation notes. 

Deficit:  (1) the excess of an entity’s liabilities over its assets; (2) the excess of expenditures over revenues during a single accounting period.

Depreciation: The amount of expense charged against earnings by a company to write off the cost of an asset over its useful life, giving consideration to wear and tear, obsolescence, and salvage value.

Department:  an organizational and/or budgetary unit established by City Council to carry out specified public services and implement policy directives. 

Direct Expenses: expenses specifically incurred as the result of providing a product of service (e.g., labor and material used). 

Disbursements:  funds actually expended. 

Division:  an organizational and/or budgetary unit within a department.

E

Encumbrance:  an obligation in the form of a purchase order, contract or salary commitment that is chargeable to an appropriation, and for which part of an appropriation is reserved.  These obligations become disbursements upon payment. 

Enterprise Fund: a fund established to account for operations that are financed and operated in a manner similar to private business enterprises.  The intent is that the full costs of providing the goods or services be financed primarily through charges and fees thus removing the expenses from the tax rate. 

Entitlement Community: a federal designation that guarantees a municipality or county a portion of HUD appropriations within a specified formula based on census reporting. 

Expenditures:  the amount of money, cash or checks actually paid or obligated for payment from the treasury. 

Expenses:  charges incurred, whether paid or unpaid, for operation, maintenance, interest, and other charges presumed to benefit the current fiscal period. 

F

FOIA: Freedom of Information Act. 

Fiscal Year: a twelve (12) month period of time for which the budget applies (the City of Flint’s fiscal year is July 1 through June 30). 

Fixed Assets: are equipment and other capital items used in governmental fund type operations and are accounted for in the General fixed Assets Group of Accounts rather than in the government funds.  Such assets, which are recorded as expenditures at the time of purchase, do not include certain improvement such as roads, bridges, curbs and gutters, streets and sidewalks, and lighting systems.  No depreciation has been provided on general fixed assets. 

Fixed Charges: expenses that are generally recurring and constant. 

Force Account: construction or maintenance activities performed by a municipality’s own personnel, rather than by outside labor.

Full Time Equivalent (FTE): the amount of funding budgeted for a particular position; expressed in fractions of one year. 

Fund:  a set of interrelated accounts which record assets and liabilities related to a specific purpose.  Also, a sum of money available for specified purposes. 

Fund Balance: the excess of an entity’s assets over its liabilities. Typically, excess revenues over expenditures at year-end will increase a fund’s fund balance. 

G

GAAP: Generally Accepted Accounting Principles.  The guiding conventions, rules, and procedures that define accepted accounting practice at a particular time in the United States. 

General Fund: the major municipally owned fund which is created with city receipts and which is charged with expenditures from such revenues. 

Grant:  a contribution of assets by one governmental unit or other organization to another.  Typically, these contributions are made to local governments from the state and federal governments.  Grant moneys are usually dedicated for specific purposes. 

I

ICMA: International City/County Management Association. 

Inter-fund Transfers: payments from one administrative budget fund to another, which result in the recording of a receipt and expenditure. 

L

Liability:  debt or other legal obligation arising out of transactions in the past which must be liquidated, renewed or refunded at some future date. 

Longevity:  monetary payments to permanent full time employees who have been in the employ of the City for a minimum of five years. 

Line Item Budget: a detailed budget, classified by object, within each organizational unit, and including each account utilized. 

M

MML: Michigan Municipal League. 

Materials & Supplies: includes chemicals, office supplies, postage, repair parts, and inventory purchases. 

Modified Accrual: basis of accounting for all governmental funds and expendable trust and agency funds under which revenues are recorded when they become measurable and available.  Expenditures are recorded when the liability is incurred, except for interest on general long-term obligations which is recorded when due. 

N

Non-Personal Expenses: an expenditure group that includes services, materials and supplies, charges, equipment and other miscellaneous expenses. 

O

Operating Budget: authorized expenditures for on-going municipal services (e.g., police and fire protection, street maintenance, etc.) 

Ordinance:  a law set forth by a governmental authority; a municipal regulation. 

Other Charges: includes debt service, operating transfers between funds, insurance, and transfers to other entities. 

Other Services: includes consulting, utilities, maintenance, rents, travel, etc. 

P

Payroll Fringes: the cost of employee benefits including insurance, retirement, uniforms, etc. 

Per Capital Costs: cost expressed as an amount per city resident. 

Personal Services: expenditures that represent the cost of salaries and wages. 

Policy:  a definite course of action adopted after a review of information and directed at the realization of goals. 

Position:  a position is present if an employee is permanent and their duties have been authorized by the City Administrator or City Council. 

Priority:  a value that ranks goals and objectives in order of importance relative to one another. 

Procedure:  a method used in carrying out a policy or plan of action 

Program:  collection of work-related activities initiated to accomplish a desired end.  A designation within the account structure to distinguish separate functions within a department. 

Property, Plant and Equipment:  non-consumable materials and supplies with a value of less than $1,000. 

Purchase Order: an authorization and incurring of debt for the delivery of specific goods or services.

R

Recommended Budget: the proposed budget that has been prepared by the City Administrator and forwarded to the City Council for approval. 

Reimbursements:  fees received as payment for the provision of specific municipal services. 

Reserves:  an account used to indicate that portion of fund equity, which is legally restricted for a specific purpose or not available for appropriation and subsequent spending. 

Resolution:  a special order by the legislative body (City Council), authorizing an action to occur.  The City of Flint budget is adopted by City Council resolution. 

Revenue:  additions to the City’s financial assets (such as taxes and grants) which do not in themselves increase the City’s liabilities or cancel out a previous expenditure. 

Revenue Sharing: State distribution of monies raised through State Sales, Income and Single Business Taxes to local governments.

Special Assessment: a tax or levy imposed against specific parcel of real estate that will benefit from a proposed public improvement like a street or sewer. 

Special Revenue Fund: a fund to account for the proceeds of specific revenue sources (other than special assessment, expendable trusts, or the major capital projects) that are legally restricted to expenditures for specified purposes. 

Supplies: An expenditure object within an activity which includes all supplies that have a useful life of less than one year and/or a purchase price of less than $1.000. 

Surplus:  revenues that exceed expenses for a specific period of time. 

T

Target Based Budgeting: a system by which the City Administrator sets expenditure targets for General Fund departments based on estimated availability of revenue. 

Taxes:  Compulsory charges levied by a government for the purpose of financing services to all the citizens. 

Transfers IN/OUT: a legally authorized funding transfer between funds in which one fund is responsible for the initial receipt and the other fund is responsible for the actual disbursement. 

V

Vehicle Clearing: a group of accounts what are used to accumulate the cost of maintaining the City’s fleet of vehicles and related equipment. 

W

Water & Sewer Fund: This enterprise fund accounts for the operation of a combined water and sewer system.  The revenues consist of charges for services from City businesses and residence’s which is used to apply for all water and sewer related expenses.

Financial Budget Management


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City Receives Distinguished Budget Award


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© 9/16/2014