GLOSSARY OF TERMS
VILLAGE OF LISLE | FISCAL YEAR 2023/2024 BUDGET
The annual budget document contains specialized and technical terminology that is unique to public finance and budgeting. To assist the reader of the budget document in understanding these terms, a glossary has been included.
Abatement - A partial or complete cancellation of a tax levy imposed by the Village.
Account - A term used to identify an individual asset, liability, expenditure, revenue, or fund balance.
Accounting System - The total structure of records and procedures which discover, record, classify, summarize and report information on the financial position, and results of operations, of a government or any of its funds, fund types, balanced account groups, or organizational components.
Accrual Basis - A basis of accounting in which revenues are recognized in the period in which they are earned and become measurable; expenses are recognized in the period incurred, if measurable.
Appropriation - An authorization granted by a legislative body to make expenditures and to incur obligations for specific purposes. An appropriation is limited to the time it may be expended.
Assessed Valuation - A percent of appraisal value assigned to real estate and certain personal property for use as a basis for levying property taxes.
Assets - Property owned by a government which has a monetary value.
Audit - A formal examination of the financial statements to determine if the statements are presented fairly.
Balance Sheet - A financial statement that discloses the assets, liabilities, reserves and balances of a specific governmental fund as of a specific date.
Balanced Budget - The budget is balanced when the sum of estimated revenues and appropriated fund balances is equal to or greater than expenditures.
Board of Trustees - The governing body responsible for the oversight of the municipality.
Bond - A written promise to pay a sum of money on a specific date at a specified interest rate. The interest payments and the repayment of the principal are detailed in a bond ordinance. The most common types of bonds are general obligation and revenue bonds.
Bonded Refinancing - The payoff and re‐issuance of bonds, to obtain better interest rates and/or bond conditions.
Budget - A plan of financial operation embodying an estimate of proposed revenue and expenditures for a specific period of time.
Budget Adjustment - A legal procedure utilized by the Village staff and the Village Board to revise the budget.
Budget Document - The instrument used by the budget‐making authority to present a comprehensive financial plan of operations of the Village Board.
Budget Message - The opening section of the budget which provides the Village Board and the public with a general summary of the most important aspects of the budget, changes from the current and previous years, and the views and recommendations of the Village Manager and Deputy Village Manager/CFO.
Budgetary Control - The control of management of a government or enterprise in accordance with an approved budget, for the purpose of keeping expenditures within the limitations of available appropriations and available revenues.
Capital Assets - Assets of a long‐term character which are intended to continue to be held or used, such as land, buildings, improvements other than buildings, machinery and equipment. The Village has established a level of $20,000 for an item to be considered an asset; below $20,000, the item is considered to be an operating expense.
Capital Expenditures/Outlay - Expenditures which result in the acquisition of or addition to capital assets.
Capital Improvement Plan - A plan for capital outlay to be incurred each year over a fixed number of years to meet the long‐term capital needs of the Village.
CARES Act - The Coronavirus Aid, Relief, and Economic Security (CARES) Act was a $2 trillion stimulus billed passed in March 2020 by U.S. lawmakers to reduce the impact of an economic downturn set in motion by the global coronavirus pandemic.
Cash Basis - A basis of accounting in which transactions are recognized only when cash is increased or decreased.
Certificate of Excellence in Financial Reporting - An award presented to Governmental units and public employee retirement systems whose comprehensive annual financial reports are judged by the Government Finance Officer Association of the United States and Canada to substantially conform to certain program standards.
Chart of Accounts - The classification system used by the Village to organize the accounting for various funds.
Contingency - A budgetary reserve set aside for emergencies or unforeseen expenditures not otherwise budgeted for.
COVID‐19 - A highly contagious respiratory disease caused by the SARS‐CoV‐2 virus.
Debt Service - The expenditure for principal and interest payments on loans, notes, and bonds.
Debt Service Fund - A fund established to account for the accumulation of resources for, and the payment of, long‐term debt principal and interest.
Delinquent Taxes - Taxes that remain unpaid on and after the date on which a penalty for non‐payment is attached.
Department - A major administrative division of the Village which indicates overall management responsibility for an operation or a group of related operations within a functional area.
Depreciation - (1) Expiration in the service life of capital assets attributable to wear and tear through use and lapse of time, obsolescence, inadequacy, or other physical or functional cause. (2) The portion of the cost of a capital asset charged as an expense during a particular period. NOTE: The cost of such assets prorated over the estimated service life of such asset and each period is charged with part of such cost so that ultimately the entire cost of the asset is charged off as an expense.
Disbursement - Payments for goods and services in cash or by check.
EAV - The value of property resulting from the multiplication of the assessed value by an equalization factor to make all property in Illinois equal to one third of its market value.
Encumbrance - The commitment of appropriated funds to purchase an item or service. To encumber funds means to set aside or commit funds for a specified future expenditure.
Enterprise Fund - A governmental accounting fund in which services provided are financed and operated similar to those of a private business, where the intent is that the costs (expenses, including depreciation or debt service payments) of providing goods and services be financed or recovered through user fees.
Estimated Revenue - The amount of projected revenue to be collected during the fiscal year.
Expenditure - Decrease in net total assets. Expenses represent the total cost of operations during a period of time regardless of the timing of the related expenditures. Note: An encumbrance is not an expenditure but a reserve of funds to be expended.
FEMA - The Federal Emergency Management Agency (FEMA) is a federal agency that coordinates the response to disasters in the U.S.
Fiduciary Funds - Funds that are used when a government holds or manages financial resources in an agent or fiduciary capacity.
Financial Plan - A multi‐year, long‐range approach to assessing the Village’s revenue and expenditure needs which becomes the basis for formulating the annual budget which by law must be adopted. The plan is developed by utilizing existing policies, objectives, assumptions, and accepted benchmarks and activity measures.
Fiscal Year - The time period designated by the Village signifying the beginning and ending period for recording financial transactions. The Village of Lisle has specified May 1 to April 30 as its fiscal year.
Full Faith and Credit - A pledge of the general taxing power of government to repay debt obligations (typically used in reference to general obligation bonds).
Fund - An accounting entity that has a set of self‐balancing accounts and that records all financial transactions for specific activities or functions.
Fund Balance - The excess of assets over liabilities; also known as surplus funds.
Fund Type - In governmental accounting, all funds are classified into seven generic fund types: General, Special Revenue, Debt Service, Capital Projects, Enterprise, Internal Service, and Trust and Agency.
GAAP - Generally Accepted Accounting Principles. Uniform minimum standards for financial accounting and recording; encompassing the conventions,rules, and procedures that define accepted accounting principles.
GASB - Governmental Accounting Standards Board. An independent organization which has ultimate authority over the establishment of Generally Accepted Accounting Principles (GAAP) for state and local government. GASB members are appointed by the Financial Accounting Foundation (FAF); however the GASB enjoys complete autonomy fromthe FAF in all technical and standard‐setting activities.
General Fund - The fund used to account for all financial resources except those required to be accounted for in another fund.
General Obligation Bonds - Bonds that finance a variety of public projects such as streets, buildings, and improvements. These bonds are backed by the full faith and credit of the issuing government.
GFOA - Government Finance Officers Association. An organization representing municipal finance officers and other individuals and organizations associated with public finance.
Governmental Fund - A fund used to account for the governmental activities, including the acquisition or construction of governmental capital assets and the servicing of general long term debt. Typically, governmental funds derive some or all of their revenue from taxes.
Grant - A contribution by one government unit to another. The contribution is usually made to aid in the support of a specified function, but it is sometimes used for general purposes.
IPBC - The Intergovernmental Personnel Benefit Cooperative (IPBC) is an intergovernmental agency created under Illinois statutes, which allows units of local government to band together for the purposes of insurance.
Infrastructure - The physical assets of the Village (streets, water, sewer, and public buildings).
Interfund Transfer - Amounts transferred from one fund to another fund.
Internal Service Funds - A fund used to account for the financing of goods or services provided by one department to another department on a cost reimbursement basis.
IRMA - The Intergovernmental Risk Management Agency (IRMA) is a member‐owned, self‐governed public risk pool.
Levy - To impose taxes for the support of Village activities.
Liability - Debt or other legal obligations arising out of transactions in the past which must be liquidated, renewed, or refunded at some future date.
Long Term Debt - Debt with a maturity of more than one year after the date of issuance.
Major Fund - A business or governmental fund that is reported as a separate column in the basic fund financial statements and which receives a separate opinion in the independent auditor’s report. Typically, major funds are designated as such due to their size relative to other funds. However, qualitative factors can also be used to designate funds as major.
Modified Accrual Basis - A basis of accounting in which revenues are recognized in the period they become available and measurable; expenditures are recognized in the period in which fund liability is incurred, if measurable.
Obligations - Amounts which a government may be legally required to meet out of its resources. They include not only liabilities, but also encumbrances not yet paid.
OPEB (Other Post‐Employment Benefits) - Benefits payable to retired employees and their eligible dependents, which include medical, dental and vision insurance benefits.
Operating Budget - The portion of the budget that pertains to daily operations that provides the basic government services.
Ordinance - A formal legislative enactment by the governing board of a municipality.
Personnel Services - Costs related to compensating Village employees, including salaries, wages and benefits.
Property Tax - Property taxes are levied on real property according to the property’s valuation and the tax rate.
Proprietary Fund - A fund which reports on operating income, changes in net position, financial position, and cash flows. The Village’s proprietary funds can be classified as either enterprise funds or internal service funds.
Rebuild Illinois Grant - The Illinois Department of Transportation (IDOT) has been authorized to implement a $1.5 billion grant program using proceeds from general obligation bonds authorized in the REBUILD Illinois capital program to provide Local Public Agencies (LPAs) with the funds for capital projects. IDOT is authorized to use these funds to make grants “for planning, engineering, acquisition, construction, reconstruction, development, improvement, extension, and all construction‐related expenses of the public infrastructure and other transportation improvement projects.” Thus, the grants may be used by LPAs only for those purposes.
RFP (Request for Proposal) - Request for proposal is an invitation for providers of a product or service to bid on the right to supply that product or service to the entity that issued the proposal.
Reserve - An account used to indicate that a portion of a fund balance is restricted for a specific purpose.
Revenue - Funds that the Village receives as income.
Revenue Bonds - This type of bond is backed only by revenues from a specific enterprise or project.
Special Revenue Fund - A fund used to account for the proceeds of specific revenue sources that are legally restricted to expenditure for specified purposes.
STP – Surface Transportation Program - A Federal grant funding source, where the local share is 30% of construction cost of a road project. This funds programs in the Motor Fuel Tax Fund.
Taxes - Compulsory charges levied by a government for the purpose of financing services performed for the common benefit. This term does not include specific charges made against particular persons or property for current or permanent benefits such as special assessments.
Tax Levy - The total amount to be raised by general property taxes for operating and debt services purposes specified in the Tax Levy Ordinance.
Tax Levy Ordinance - An ordinance by means of which taxes are levied.
TIF - Tax Increment Financing or the act of capturing the amount of property taxes levied by a taxing unit for the year on the appraised value of real property located within a defined investment zone. The tax increments are paid into the TIF fund and used to pay project costs within the zone, including debt service obligations.
Transfer In/Out - Amounts transferred from one fund to another to assist in financing the services for the recipient fund.
Water & Sewer Fund - A fund established to account for operations of the water and sewer system. It is operated in a manner similar to private business enterprises, where the intent is cost recovery.