Glossary, Acronyms, and Frequently Asked Questions

Fiscal Year 2022 Operating and Capital Budget

Acronyms

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Glossary

Accrual Basis of Accounting

The method of accounting method under which revenues are recorded when earned (regardless of when cash is received) and expenditures are recorded when liabilities are incurred (regardless of when payment is made). Also, see Modified Accrual Basis of Accounting.


Ad Valorem Tax

A tax levied on the assessed value of real and personal property. This tax is also known as property tax.


Adopted Budget

A financial plan presented, reviewed, and approved by a governing body for the upcoming or current fiscal year beginning October 1.


Annexation

The process by which an unincorporated area is brought into a city. Rules governing annexation are established by Florida Statute.


Appropriation

A specific amount of money authorized by city council for the purpose of providing or acquiring goods and services.


Arbitrage

Borrowing money under a jurisdiction’s tax exempt status and relending it at higher interest rates, then keeping the earnings for discretionary use.


Assessed Property Value

The value set upon real estate or other property by the County Property Appraiser and the State as a basis for levying taxes.


Assets

Property with monetary value owned by the City that can be converted to cash.


Balanced Budget

A budget in which planned funds available equal planned expenditures as required by Florida State Statute 166.241.


Bond

A certificate of debt issued by an entity, guaranteeing payment of the original investment plus interest, by a specified future date.


Budget

An annual financial plan that identifies revenues, specifies the type and level of services to be provided and establishes the amount of money which can be spent.


Budget Allocation

The distribution of a sum of money for a particular purpose according to a specific plan.


Budget Amendment

Legal means by which an adopted revenue or expenditure authorization limit is increased or decreased.


Capital Equipment

Equipment, costing more than $5,000, with an expected life of more than two years such as automobiles, computers and furniture.


Capital Improvement Program

A statement of the City of Tampa’s policy regarding long-range physical development and the principal planning tool designed to achieve urban growth and development for a five-year period.


Capital Improvement Project (CIP) Expenditure

Major construction, acquisition, or renovation activities which add value to the City’s physical assets or significantly increase their useful life.


Capital Improvement Project Budget

A financial plan for the construction of physical assets such as buildings, streets, sewers and recreation facilities. It comes from the first year of the Capital Improvement Project.


Capital Outlay

The purchase, acquisition, or construction of any item having a unit cost of $5,000 or more, or a useful life of two or more years. Typical capital outlay items include vehicles, construction equipment, photocopiers, computers, and office furniture.


Chief Financial Officer

Senior financial advisor to the Mayor. Supervises the Revenue and Finance Department which oversees the City’s centralized Accounting and Budget Offices.


City Charter

Document setting forth the principles, functions, and organization of a city’s government.


Communications Services Tax

A tax levied by the State on telecommunication and cable services.


Comprehensive Annual Financial Report (CAFR)

A complete set of financial statements published each year in accordance with state law. It is presented in conformity with accounting principles and audited by a certified public accounting firm. It contains information regarding all general purpose financial statements for revenue and expenditures, selected financial and demographic information, and amortization of long-term debt and selected investment portfolio data.


Conduit Debt

Debt payable by third parties for which the state or government is not providing credit or security.


Consumer Price Index (CPI)

A statistical description of price levels provided by the U.S. Department of Labor. The index is used as a measure of cost of living and economic inflation.


Contingency

An appropriation of funds to cover unanticipated expenditures that occur during the fiscal year.


Cost Allocation

A method used to charge enterprise, internal service, federal funds, and other governmental funds for their share of central administration costs.


Current Operations

The existing processes, functions, or procedures used by the City to carry out its vision, mission, and goals.


Debt Service

The payment of principal and interest on borrowed funds such as bonds, bank loans, and/or short-term commercial paper.


Department

An organizational unit responsible for carrying out a major governmental function, such as police, fire rescue, parks and recreation, water, solid waste, etc.


Depreciation

The decrease in value of physical assets due to use and the passage of time.


Employee (or Fringe) Benefits

Contributions made by the City to meet commitments or obligations for employees beyond base pay, such as the City’s share of costs for social security, worker’s compensation, and the various pension, medical, and life insurance plans.


Encumbrance

An amount of money committed for the payment of goods and services not yet paid for.


Enterprise Fund

A self-supporting fund designed to account for activities supported by user charges. Examples include wastewater, water, solid waste, and parking funds.


Entitlement

Payments guaranteed by Congress and/or state legislatures to eligible recipients for a certain period of time. These payments are provided outside of the discretionary part of the state or federal budget.


Fiduciary Fund

A set of interrelated accounts to record revenues and expenditures associated with a specific purpose held by the government for other parties. In the case of the City of Tampa, an example is the General Employee’s Pension Fund.


Financial Statement

A written report of the financial condition of an organization which shows revenues, expenses, and income (the difference between revenues and expenses) of the organization over a period of time.


Fiscal Year (FY)

Any period of 12 consecutive months designated as the budget year. The City’s fiscal year begins October 1 and ends September 30, which is the same for Hillsborough County and the federal government. The State of Florida’s fiscal year runs from July 1 through June 30.


Franchise Fee

A fee assessed on a business, usually a public utility, in return for the right to operate inside the city limits. The City of Tampa has granted franchises for electric and natural gas services.


Full-Time Equivalent (FTE)

A position which works a 40-hour week on an ongoing basis and is specifically authorized for ongoing funding by classification in the annual budget. Two half-time positions equal one FTE.


Fund

A set of interrelated accounts to record revenues and expenditures associated with a specific purpose such as the General Fund or an enterprise fund.


Fund Balance

The balance remaining in a fund after expenditures have been subtracted from revenues.


General Fund

A fund supported by revenues, such as property taxes, not designated by law for a special purpose. Some of the departments funded by the General Fund typically include fire rescue, police, and parks and recreation.


General Obligation Bond

Bonds that finance public projects such as streets, municipal facilities, and park improvements. The repayment of these bonds is made from property taxes and is backed by the full faith and credit of the issuing government.


Generally Accepted Accounting Principles (GAAP)

The uniform set of authoritative standards and procedures adopted by the accounting profession.


Goals

Broad statements the organization works towards to accomplish identified strategies. Usually accomplished in 1-3 years.


Government Accounting Standards Board (GASB)

A seven-member board organized in 1984 to establish standards of financial accounting and reporting for state and local governmental entities. Government Finance Officers Association (GFOA) The professional association of state/provincial and local finance officers in the United States and Canada which has served the public finance profession since 1906. The GFOA administers the Distinguished Budget Presentation Awards Program, a voluntary awards program which encourages governments to prepare effective budget documents.


Governmental Funds

Funds generally used to account for tax-supported activities that rely mostly on current assets and current liabilities. There are four different types of governmental funds: general, special revenue, debt service, and capital projects.


Grants

Financial assistance in the form of money, property or technical assistance in lieu of money, awarded by a government agency or private organization to an eligible applicant to accomplish public purposes. Grants obligate the grantee to meet specified objectives and hold the grantee financially liable if funds are not spent in accordance with applicable laws, rules, and regulations of the funding agency.


Homestead Exemption

A deduction of up to $50,000 (The homestead exemption for school districts is $25,000) from the total assessed value of a primary residence for qualified property owners in the State of Florida. Other exemptions such as Senior Citizen, Blind Disability, etc. are available with varying amounts of deductions.


Impact Fees/Multi-Modal Fees

A charge for services which is assessed on new construction in order to support specific new demands on a given type of service such as transportation, schools, parks, libraries, wastewater and water supply systems, fire and police protection, and other government agencies and services. Local governments generally implement impact fees so existing residents and businesses do not have to pay for needs caused by new development.


Infrastructure

The basic facilities, services and installations needed for the functioning of a community or society, such as: public transportation, road repair and maintenance, communications systems, and water and sewer line repair and replacement.


Initiatives

Specific programs, activities, projects, or actions an organization will undertake in an effort to meet performance targets.


Interfund Transfers

Payments from one fund to another fund, primarily for work or services provided.


Intergovernmental Revenue

Funds received from federal, state and other local government sources in the form of grants, shared revenues, and payments in lieu of taxes for a specific purpose.


Internal Service Fund

A fund to account for activities associated with providing services to customers within the government on a cost-reimbursement basis. In the case of the City of Tampa, an example is the Fleet Maintenance Fund.


Local Option Gas Tax

The local option gas tax is a 30-year tax, renewed in 2013, to fund transportation related improvements.


Millage

The tax rate on real property, based on 1 mill, equals $1 per $1,000 of assessed property value. See Questions and Answers section for further explanation.


Mission

The mission statement clearly states the purpose of the organization. It is the reason the organization exists.


Modified Accrual Basis of Accounting

Revenues are being recognized in the period when they become available and measurable (known). The term “available” means collectible within the current period or soon enough thereafter to be used to pay the liabilities of the current period. Expenditures, if measurable, are recognized in the accounting period in which the liabilities are incurred, regardless of when the receipt or payment of cash takes place. Also, see Accrual Basis of Accounting.


Non-Recurring Expense

Non-recurring expenses comprise those that exist only for a limited period or whose amounts vary considerably from one year to the next. Examples of non-recurring expenses include grants to private organizations or other governments, and one-time expenses for special projects.


Non-Recurring Revenue

Non-recurring revenues are sources that exist only for a limited period of time or amounts which vary considerably from one year to the next. Examples of non-recurring revenue include proceeds from grants and the sale of land.


Objectives

Specific concrete and measurable statements of what will be done to make progress toward a specific goal. Generally, they are attainable within 6-12 months out and have associated performance measures.


Operating Budget

A budget for general expenditures such as salaries, utilities, and supplies.


Operating Expenses

The cost for personnel, materials, and equipment required for a department to function. They are expenses directly related to service activities.


Ordinance

A formal legislative enactment by the legislative body which, if not in conflict with any higher form of law, has the full force and effect of law within the boundaries of the municipality to which it applies. An ordinance requires more legal formality and has a higher legal status than a resolution. Revenue raising measures, such as the imposition of taxes, special assessments, and service charges, universally require ordinances.


Payment in Lieu of Franchise Fees (PILOF)

Payments by enterprise departments for use and maintenance of city rights-of-way similar to payments made by private sector entities.


Payment in Lieu of Taxes (PILOT)

Payments by enterprise departments for compensation of tax supported services similar to payments made by private sector entities.


Performance Measures

Indicators of the work performed, and the results achieved in an activity, process, or organizational unit. Performance measures may be financial or non-financial.


Personnel Expenses

Salaries, wages, and fringe benefit costs such as pensions and insurance.


Property Tax

A tax levied on the assessed value of real property. This tax is also known as ad valorem tax.


Proprietary Funds

One of the three classifications of funds in governmental accounting. Proprietary funds consist of enterprise funds and internal service funds and are used to account for business type activities.


Reclaimed Water

Treated wastewater that is used for irrigation.


Recommended Annual Budget

Presented to City Council in August to be adopted by the end of the current fiscal year (September 30). The Mayor shall prepare an annual budget for the operation of the municipality, which budget shall be presented to the City Council not less than forty-five (45) days before the expiration of each fiscal year.


Recurring Expense

Expenses which continue from year to year, where a similar amount can be expected annually. Examples include personnel expenses and charges for utilities.


Recurring Revenue

Revenue sources which continue from year to year, where a similar amount can be expected annually. Examples include property taxes, utility taxes, and license fees.


Reserve

An unappropriated source of funding not required for expenditures in the current budget year that is set aside to meet unexpected budgetary needs such as emergencies or unforeseen requirements.


Reserve for Vacancies

Anticipated savings resulting from authorized positions being temporarily vacant. Estimated vacancies are subtracted from the amount budgeted for salaries.


Resolution

A special or temporary order of a legislative body that requires less legal formality and has a lower legal status than an ordinance or statute.


Revenue

Increases in the net current assets of a government fund type from sources other than expenditure refunds, operating transfers, and other financial sources.


Sales Tax

A 6% tax levied by the State of Florida on most goods and services. The City of Tampa currently receives a percentage of the state sales tax collected in Hillsborough County. Hillsborough County also has a 1/2 cent local option sales tax for indigent healthcare, a 1/2 cent sales tax for school capital outlay, and a 1/2 cent community investment tax.


Self Insurance

A city program that administers workers’ compensation, benefit and claims programs, general liability, property damage, health coverage and long-term disability insurance, life and accidental death and dismemberment insurance programs.


Special Revenue Fund

A fund that is used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes.


Tax Increment Financing (TIF)

TIF is a mechanism for using property taxes to stimulate investment in economically depressed areas. Property taxes generated as a result of new construction are reinvested in projects designed to further enhance the area’s economic vitality.


Tax Operating Fund

A tax operating fund receives its money from the City’s general revenues, such as property taxes. Police and fire protection are examples of services provided through a tax operating fund.


Tax Year

The calendar year in which tax bills are sent to property owners. The 2020 tax bills are reflected as revenue receipts to the City in FY21.


Taxing Authority

A government body, such as a city, county, or school board, with authority to levy property taxes.


Trust and Agency Funds

Funds used to account for resources received and held by the government in the capacity of trustee, custodian, or agent. As the name implies, these funds include both resources to be held over a long period (trust funds) and those resources that can be used currently (agency funds).


Truth in Millage (TRIM) Notice

A notice sent annually to property taxpayers which explains any changes in the millage rate of each taxing authority from the prior year. The notice also shows changes in a property’s value and includes the time and place of public hearings on proposed millage rates.


User Charges

The payment of a fee for direct receipt of a public service by the party benefiting from the service. Examples are wastewater and water services.


Utilities Services Tax

A tax levied by cities on the consumers of various utilities such as electricity, water, or natural gas.


Vision

A statement that provides an inspiring picture of a preferred future state, “the dream” of an organization.

Frequently Asked Questions (FAQs)

Q: What is the purpose of the City budget?

A: The budget is an annual financial plan for the City of Tampa. It specifies the level of municipal services to be provided in the coming year. It reflects the policies and priorities set by the Mayor and City Council.


Q: How and when is the budget prepared?

A: The City of Tampa’s annual budget process routinely begins in November with the preparation of initial revenue and expense estimates which are reviewed with the Mayor. In January, departments consider strategic and citywide goals and develop service delivery objectives for use in building the budget for the coming year. Target budgets for each department are then determined. Targets are based on current budget levels, levels of service desired by the administration, and estimates of available revenues. Each department then prepares its budget for the upcoming fiscal year within the target amount. The resulting budgets are reviewed and requests for additional funding are considered. The Recommended Annual Operating and Capital Budget is presented to City Council by August 15. Finally, budget hearings are held and the budget is adopted by the end of the current fiscal year (September 30).


Q: Where does the City obtain its revenues?

A: From local, state, and federal taxes, fees, licenses, and payments for municipal services such as water, wastewater, and solid waste collection.


Q: How is the money used?

A: It is used to pay for salaries, operating expenses, equipment, supplies, capital improvements, and debt service needed to provide fire and police protection, cultural and recreational activities, economic development, neighborhood services, water, wastewater, solid waste collection, and other municipal services specified in the City budget.


Q: What is a mill of tax?

A: One mill is equal to $1.00 for each $1,000 of assessed property value. City property taxes on a $209,776 home, with a $50,000 homestead exemption and millage rate of 6.2076 (example only), would be $992.


Assessed Value (FY2022) $ 209,776.00

Less homestead exemption 50,000.00

Net taxable value $ 159,776.00

÷ 1,000.00

$ 159.78

x 6.2076 Millage

= $ 992.00 Property Tax


Q: What is property tax?

A: When the City adopts its annual budget, it determines the tax rate that must be applied on property to generate the necessary general fund revenue. The estimated tax rate (millage) in the City of Tampa’s recommended FY2021 budget is 6.2076 mills or $6.2076 per $1,000 of taxable value. The Hillsborough County Property Appraiser establishes the taxable value of all property within the City. For FY2021, the average home assessed value provided by the Hillsborough County Property Appraiser is $209,776, which after a $50,000 homestead exemption, results in a taxable amount of $159,776. In this example, your taxes paid to the City would be $992 ($159,776/1,000 x 6.2076 mills).


Q: How much of the total millage on property in Tampa was paid to the City?

A: In FY2020, only 6.2076 mills of the 20.0302 mills levied for tax year 2019 was paid to the City.


Q: What is the difference between ad valorem tax and property tax

A: There is no difference between ad valorem tax and property tax. They are different names for the same tax.


Q: Why is the City collecting more property taxes if the millage rate is constant?

A: On each parcel of real estate or tangible personal property, a taxable valuation is established by the Hillsborough County Property Appraiser as a basis for levying taxes. This valuation is determined by subtracting all exemptions from the assessed value of a property which is determined by comparing a home to similar homes that have sold recently. Property taxes increase even though the millage rate remains constant, when taxable property values within the City increase.


Q: What is an operating budget?

A: An operating budget is an annual financial plan for recurring expenditures such as salaries, utilities, and supplies.


Q: What is a capital improvement budget?

A: A capital improvement budget is a long-range plan for the construction of physical assets such as buildings, streets, parks, and sewers.


Q: How is the Capital Improvement Program funded?

A: There are three primary means to fund and/or finance the City’s capital projects: 1) current revenues (pay as you go), 2) grants, and/or 3) debt.


Current Revenues (Cash Basis) – The City primarily funds its capital improvement program on a cash basis. There are various revenues sources used for this purpose. Some revenues are restricted, such as transportation impact fees, local option fuel taxes, and community investment taxes.


  • Community Investment Tax (CIT) – The Community Investment Tax was approved by voters in 1996 and can only be used to fund certain capital improvement projects and/or debt service for qualified capital projects.
  • Stormwater Improvement Assessment – Stormwater Improvement Assessment pay for capital improvements associated with the stormwater system construction within the Central and Lower Basin Improvement Area.
  • All For Transportation– The All For Transportation sales surtax was approved by voters in 2018. The tax provides funding for various citywide transportation projects relating to intersection improvements, road and bridge improvements, traffic congestion mitigation, and bicycle and pedestrian safety improvements.
  • Transportation Impact Fees – Impact Fees were assessed on land development in six impact fee districts to support the added demands on the transportation network due to expanded or new construction. Transportation impact fees are restricted to projects that provide for increased roadway (vehicle) capacity improvements, address right-of-way and construction, and can only be spent within the transportation impact fee district in which they were collected. Effective August 1, 2015, Tampa ceased collection of transportation impact fees and instead collects multi-modal fees.
  • Transportation Multi-Modal Fees – Transportation Multi-Modal Fees are assessed on land development to support the added demands on the transportation network due to expanded or new construction. The new multi-modal fee provides flexibility to expand capital facilities for bicycle, pedestrian, and transit modes in addition to funding automobile capacity along the classified roadway network. Multi-modal fees can only be spent within the transportation impact fee district in which they were collected.
  • Local Option Fuel Tax (Fuel Tax) – Fuel Tax usage is restricted for various transportation capital improvement projects including resurfacing, complete streets such as multi-median sidewalks, bike lanes, medians, and traffic signals. Local governments may assess up to 11 cents per gallon. Hillsborough County currently assesses 6 cents per gallon of fuel purchased within County boundaries for transportation capital funding.
  • Utilities Services Taxes – Utilities Services Taxes are levied by the City on taxable sales for communications and utilities. The tax is assessed on the following services: communications, water, electricity, and gas. Utilities taxes may be used to fund general governmental operations, to purchase capital equipment, for capital improvement projects, and/or to pay the debt associated with capital projects.
  • Enterprise Revenues – Enterprise revenues are collected within the Parking, Water, Wastewater, and Solid Waste departments for the delivery of their respective services. These revenues are restricted to funding the operations, capital projects, and/or debt within the respective departments (e.g., wastewater rate revenue cannot be used to fund a solid waste capital project).

Grants – The City receives both operating and capital grants from several sources. These grants are for specific purposes and often require a local match. The granting agencies usually impose specific requirements to qualify for the grant.


Debt – The City issues debt to either refund an existing debt issuance or to obtain new funds to acquire and/or construct major improvements to the City’s infrastructure. The City uses a combination of fixed-rate and variable rate, long and short-term debt based on the lowest possible cost and risk to the City to fund its capital needs. The financing methodology for each transaction is determined based on funding priorities and available debt capacity. For each debt issuance, the City will comply with all prudent financial policies, the City charter, and all legal, Internal Revenue Service, Securities and Exchange Commission, and Municipal Securities Rulemaking Board rules and regulations.


Q: What is a revenue or enterprise fund?

A: A revenue or enterprise fund earns its own revenues by charging patrons for municipal services. The Water operating fund is an example of an enterprise fund. It generates revenues by billing its customers for the water they use.


Q: What is a budget appropriation?

A: A budget appropriation is a specific amount of money that has been approved for use in a particular manner by City Council.


Q: Why doesn’t the City add an income tax to generate additional revenue?

A: The laws of the State of Florida prohibit the levying of such taxes by cities.


Q: What is the difference between recurring and non-recurring revenues?

A: Recurring revenue is income from sources which continue from year to year, where a similar amount can be expected annually. Property taxes and franchise fees are examples of recurring revenue. Nonrecurring revenues are those that exist only for a limited period of time, or whose amounts vary considerably from one year to the next. Examples of non-recurring revenues include surplus land sales or one-time grants.


Q: What are the purposes of bond/state loans?

A: The purpose of bond/state loans is to lend money to the government so that they can cover their capital construction costs.


Q: How does the City prepare/pay for unforeseen emergencies such as hurricanes, terrorist threats, etc.?

A: In the tax operating funds, the City’s policy is to budget property taxes at 95% and other major revenues at approximately 98% of expected collections as a reserve for contingencies and potential revenue shortfalls. These measures, along with reserving a portion of existing fund balance ($7.6 million), help the City prepare for future emergencies.