FISCAL YEAR 2022-2023

Budget Glossary

The Annual Budget contains specialized and technical terminology that is unique to public finance and budgeting. To assist the reader of the Annual Budget document in understanding these terms, a budget glossary has been included in the document.

Account: Numbers used to classify how specific dollar amounts come into the City or how they are being spent.

Accrual: The accrual method of accounting recognizes the financial effect of transactions, events, and interfund activities when they occur, regardless of the timing of related cash flows.

Ad Valorem Tax: A tax levied on the assessed value of real property (also known as “property taxes”).

Appropriations: A legal authorization made by the City Council which permits City officials to incur obligations for a specific purpose.

Assessed Valuation: A value established by the Burnet County Appraisal District which approximates market value of real property. By state law one hundred percent (100%) of the property value is used for determining the basis for levying property taxes.

Assessed Value: A value set upon real estate or other property by the Burnet County Appraisal District as a basis for levying taxes.

Audit: A financial audit is a review of the accounting system and financial information to determine how government funds were spent and whether expenditures were in compliance with the legislative body’s appropriations.

Balance Sheet: Financial statement that gives the assets, liabilities, reserves and balances of a specific governmental fund.

Balanced Budget: A budget in which estimated revenues equal estimated expenditures. Undesignated Fund Balance monies may be used to balance the budget.

Basic Financial Statements: Minimum combination of financial statements and note disclosures required for fair presentation in conformity with GAAP.

Beginning Balance: The residual non-restricted funds brought forward from the previous fiscal year (ending balance).

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 type of bonds are general obligation (G.O.) and revenue (Water/Sewer) bonds. These are most frequently used for construction for large capital projects, such as buildings and streets.

Bonded Debt: The portion of indebtedness represented by outstanding bonds.

Budget: A financial plan for a specified period of time (fiscal year) that matches planned revenues and appropriations. The budget process in every Texas City must comply with the requirements of the Texas Uniform Budget Law. See description of Budget Process.

Budget Policies: General and specific guidelines approved by the City Council that govern various aspects of the budget process, including the formulation of the budget document, its implementation and reporting procedures utilized to monitor its progress during the fiscal year.

Budget Year: The City’s fiscal year, October 1st through September 30th.

Capital Assets: Land, improvements to land, easements, buildings, building improvements, vehicles, machinery, equipment, works of art and historical treasures, infrastructure, and all other tangible or intangible assets that are used in operations and that have initial useful lives extending beyond a single reporting period.

Capital Expenditure: An expense for major assets or improvements. The amount exceeds $5,000.00.

Capital Outlay: Expenditures for equipment, vehicles, and machinery that result in the acquisition of assets with a useful life of more than one year.

Capital Projects Fund: Fund type used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds and general fund).

Capitalization Threshold: Dollar value at which a government elects to capitalize tangible or intangible assets that are used in operations and that have initial useful lives extending beyond a single reporting period. Generally, capitalization thresholds are applied to individual items rather than groups of items.

Cash Basis: A basis of accounting that recognizes transactions when related cash amounts are received or disbursed.

Certificate of Achievement for Excellence in Financial Reporting Program: Program sponsored by the Government Finance Officers Association to encourage and assist state and local governments to prepare high-quality comprehensive annual financial reports. The program has been in continuous operation since 1946. The program originally was known as the Certificate of Conformance Program.

Comparative Data: Information from prior fiscal periods provided to enhance the analysis of financial data of the current fiscal period.

Contingency Account: The appropriation of reserve funds for future allocation in the event specific budget allotments have expired and additional funds are needed.

Debt Service: The City’s obligation to pay the principal and interest of general obligation and revenue bonds according to a predetermined payment schedule.

Debt Service Funds: Governmental fund type, used to account for the accumulation of resources for, and the payment of, general long-term debt principal and interest.

Delinquent Taxes: Real property taxes that remain unpaid on and after February 1st of each year upon which penalties and interest are assessed.

Department: A major administrative segment responsible for management of operating division which provides services within a functional area.

Depreciation: The prorating of the cost of a fixed asset over the estimated service life of the asset.

Encumbrances: Commitments related to unperformed contracts for goods or services. To encumber funds means to set aside or commit funds for future expenditures.

Enterprise Funds: A governmental accounting fund in which the services provided are financed and operated similarly to those of a private business. The rate schedules for these services are established to insure that revenues are adequate to meet all necessary expenditures. This fund type reports activity for which a fee is charged to external users for goods or services. The sole enterprise fund for the City of Marble Falls is the Water/Wastewater Fund. Also referred to as the Proprietary Fund.

Estimated Revenue: The amount of project revenue to be collected during the fiscal year.

Expenditure: Funds spent in accordance with budgeted appropriations on assets or goods and services obtained.

Fiscal Year: The time period designated by the City signifying the beginning and ending period for recording financial transactions. The City of Marble Falls has a fiscal year of October 1st through September 30th as established by the City Charter.

Fixed Assets: Assets of long-term character such as land, buildings, machinery, furniture and other equipment.

Franchise Fee: A fee paid by public service businesses for use of City streets, alleys and property in providing their services to the citizens of a community. Services requiring franchises include electricity, telephone, natural gas, cable television and refuse collection.

Fudiciary Fund: An account with funds from assets that the government holds as a trustee and that it cannot use to fund its own programs. Include pension and employee benefit trust funds, agency funds, external investment trust funds and private purpose trust funds.

Full Time Equivalent: A quantifiable unit of measure utilized to convert hours worked by part-time, seasonal or temporary employees into hours worked by full-time employees. A part-time employee working 1040 hours (one-half of a full-time employee) represents a .5 Full Time Equivalent.

Fund: An independent set of accounting records which are separated for the purpose of carrying on an activity in conformity with regulation of a “not for profit” business. In the budget process a formal Annual Budget is required for all City Funds.

Fund Balance: Difference between assets and liabilities reported in a governmental fund.

Fund Classifications: One of the three categories (governmental, proprietary and fiduciary) used to classify fund types.

Fund Type: One of 11 classifications into which all individual funds can be categorized. Governmental fund types include the general fund, special revenue funds, debt service funds, capital projects funds, and permanent funds. Proprietary fund types include enterprise funds and internal service funds.

General Fund: The largest fund within the City, the General Fund accounts for the majority of the financial resources of the government. General Fund revenue includes property taxes, sales taxes, licenses and permits, service charges and other types of revenue. This fund includes most of the basic operating functions such as fire and police protection, municipal court, finance, planning and inspection, public works, parks and recreation and general administration.

Governmental Funds: Those funds through which most governmental functions typically are financed. The acquisition, use, and financial resources and the related current liabilities are accounted for through governmental funds (General, Special Revenue, Capital Projects and Debt Service Funds).

Grant: A contribution of assets (usually cash) by one governmental unit or other organization to another. Typically, these contributions are made to local governments from state and federal governments. Grants are usually made for the specified purposes.

Infrastructure: Long-lived capital assets that normally are stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets. Examples of infrastructure assets include roads, bridges, drainage systems, water and sewer systems, dams, and lighting systems.

Interfund Transfers: All interfund transactions except loans and reimbursements.

Intergovernmental Revenue: Grants, entitlements, and cost reimbursements from another federal, state or local government.

Levy: The City Council has authority to impose or collect taxes, special assessments, or service charges as stated in the City Charter.

Line Item: A specific item or group of similar items defined by detail in a unique account in the financial records.

Maintenance: Cost of upkeep of property or equipment.

Maturities: The dates on which the principal or stated values of investments or debt obligations mature and may be reclaimed.

Modified Accrual: When this basis of accounting is used, the revenues are not recognized until they are measurable and available, and expenditures are recognized in the period in which governments in general normally liquidate the related liability rather than when that liability is first incurred (if earlier).

Occupancy Tax: A city tax on hotel/motel room rentals often called the “Bed Tax”.

Operating Reserves: Current cash and investments less current liabilities at the end of the most recent fiscal year.

Operating Transfers: Monies transferred between funds.

Ordinance: A formal legislative enactment by the governing body of a municipality. If it is not in conflict with any higher form of law, such as state statute or constitutional provision, it has the full force and effect of law within the boundaries of the municipality to which it applies.

Personal Services: Cost related to compensating employees, including salaries, wages, insurance, payroll taxes and retirement contributions.

Property Tax: Taxes levied on all real, personal property according to the property’s valuation and the tax rate, in compliance with State Property Tax Code.

Proprietary Funds: See Enterprise Fund.

Reimbursements: Interfund transactions that constitute reimbursements to a fund for expenditures or expenses initially made from it, but that apply to another fund.

Retained Earnings: An equity account reflecting the accumulated earnings of a proprietary fund.

Revenue: Funds received by the government as income, including tax payment, fees for specific services, receipts from other governments, fines and forfeitures, grants and interest income.

Revenue Bonds: Legal debt instruments which finance public projects for such services as water or sewer. Revenues from the public project are pledged to pay principal and interest of the bonds. In Texas Revenue Bonds may or may not be authorized by public referendum.

Services: Professional or technical expertise purchased from external sources.

Special Revenue Fund: A governmental fund type used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditure for specified purposes.

Statistical Section: The third of three essential components of any comprehensive annual financial report. The statistical section provides a broad range of trend data covering key financial indicators from the past 10 fiscal years. It also contains demographic and miscellaneous data useful in assessing a government’s financial condition. The contents of the statistical section normally fall outside the scope of the independent audit of the financial statements.

Supplies: Cost of goods consumed by the City in the course of its operations.

Tax Levy: The total amount to be raised by general property taxes.

Tax Rate: The amount of tax levied for each $100 of assessed value for real property. The rate is set by October 1st of each year by the City Council of the City of Marble Falls.

Taxes: Compulsory charges levied by a government for the purpose of financing services performed for the common benefit.

Transmittal Letter: A general discussion of the proposed budget presented in writing as part of the budget document. This letter explains principal budget issues against the background of financial experience in recent years and presents recommendations made by the City Manager to the City Council.

Unreserved Fund Balance: Undesignated monies available for appropriations.

Working Capital: Current assets less current liabilities.

Budget Acronyms

The Annual Budget contains specialized and technical terminology that is unique to public finance and budgeting. To assist the reader of the Annual Budget document in understanding these terms, a list of budget acronyms has been included in the document.

Capital Improvement Plan (CIP): A comprehensive plan which projects the capital needs of a community. The plan for capital expenditures is to be incurred each year over a fixed period of several future years setting forth each capital project, the amount to be expended in each year and the method of financing those expenditures.

Comprehensive Annual Financial Report (CAFR): A financial report that encompasses all funds and component units of the government. The CAFR should contain (a) the basic financial statements and required supplementary information, (b) combining statements to support columns in the basic financial statements that aggregate information from more than one fund or component unit, and (c) individual fund statements as needed. The CAFR is the governmental unit’s official annual report and also should contain introductory information, schedules necessary to demonstrate compliance with finance-related legal and contractual provisions, and statistical data.

ESRI: International supplier of Geographic Information System (GIS) software, web GIS and geodatabase management applications.

ETJ (Extra Territorial Jurisdiction): The unincorporated area that is contiguous to the corporate boundaries of a City. The ETJ area for the City of Marble Falls extends one mile from the City’s boundaries.

GASB: Government Accounting Standards Board. The authoritative accounting and financial standard setting body of government agencies.

General Obligation Bonds (G.O.): Legal debt instruments which furnish 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 and are financed through property tax revenues. In Texas, G.O. bonds must be authorized by public referendum.

Generally Accepted Accounting Principles (GAAP): The conventions, rules and procedures that serve as the norm for the fair presentation of financial statements.

GFOA: Government Finance Officers Association.

GFOAT: Government Finance Officers Association of Texas. Insurance Services Office (ISO): ISO helps establish appropriate fire insurance premiums for residential and commercial properties. Insurance companies need reliable, up-to-date information about a community’s fire-protection services.

MFAEMS: Marble Falls Area Emergency Medical Services

MFFR: Marble Falls Fire Rescue

SCBA: Self-contained breathing apparatus