Glossary of Terms

Fiscal year 2023/24 - 2024/25

Accrual Basis of Accounting - The basis of accounting by which revenues are recorded when earned and expenditures are recorded as soon as they result in liabilities for benefits received.

Annual Comprehensive Financial Report - Financial report organized by fund, which provides a balance sheet that compares assets with liabilities and fund balance. The ACFR is also an operating statement that compares revenues with expenditures.

Appropriation - A specific amount of money authorized by the City Council for an approved work program or individual project.

Assessed Valuation - A dollar value placed on real estate or other property by the County of Orange as a basis for levying property taxes.

Balanced Budget - A budget in which planned expenditures do not exceed planned funds available.

Basis of Budgeting - Budgets are adopted on a basis consistent with accounting principles general accepted in the United States of America. Annual appropriated budgets are adopted for all departments within the general, special revenue and capital projects funds.

Beginning/Ending Fund Balance - Unencumbered resources available in a fund from the prior/current year after payment of the prior/current year expenses.

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, types and levels of services to be provided, and the amount of funds that can be spent. The City of Yorba Linda’s Two-Year Budget encompasses budgets for two fiscal years.

Budget Calendar - The schedule of key dates or milestones, which the city follows in the preparation and adoption of the budget.

Budget Message - A general discussion of the preliminary/adopted budget presented in writing as part of, or supplement to, the budget document. Explains principal budget issues against the background of financial experience in recent years and presents recommendations made by the City Manager.

CalPERS - The California Public Employees Retirement System, which is the agency providing pension benefits to all City employees.

Capital Expenditures - Typically, these are expenditures related to major construction projects such as roads, buildings, and parks. These expenditures are typically capitalized and depreciated over time.

Capital Improvement Program - A multi-year financial plan containing proposed construction of physical assets, such as park, street, sewerage, cultural, and recreation facilities. This program has identified all projects, which are the responsibility of the City between the present to build out.

Capital Projects - Projects that purchase or construct capital assets. Typically, a capital project encompasses a purchase of land and/or the construction of a building or facility.

Capital Outlay - Equipment (fixed assets) with a value of $5,000 or more (or $1,000 for electronic equipment) and an estimated useful life of more than one year, such as automobiles and office furniture, which appear in the Operating Budget.

Community Development Block Grants (CDBG) - Funds established to account for revenues from the federal government and expenditures as prescribed under the Community Development Block Grant program.

Contingency - An appropriation of funds to cover unforeseen events that occur during the fiscal year, such as federal mandates, shortfalls in revenue, and similar eventualities.

Council-Manager Form of Government - An organizational structure in which the Mayor and City Council appoint an independent City Manager to be the chief operating officer of a local government. In practice, a City Council sets policy and the City Manager is responsible for implementing those policies effectively and efficiently.

Continuing Appropriations, or Carryovers - Funding approved in the current budget but not expended during a particular fiscal year. These appropriations are carried forward into the next fiscal year for their original intended purpose.

Cost Allocation - A method used to charge General Fund overhead costs to other funds, such as enterprise funds.

Debt Service - The payment of principal and interest on borrowed funds, such as bonds.

Department - An organizational unit comprised of programs or divisions. Examples include the Public Works Department and Parks & Recreation Department.

Encumbrance - A legal obligation to expend funds for an expenditure that has not yet occurred.

Enterprise Fund - A fund type established to account for the total costs of selected governmental facilities and services that are operated similar to private enterprises.

Equipment Outlay - A category of expenditures that captures purchases of capital equipment, such as furniture, vehicles, large machinery, and other items.

Estimate - Represents the most recent estimate for current year revenue and expenditures. Estimates are based upon several months of actual expenditure and revenue experience and consider the impact of unanticipated price or other economic factors.

Expenditures - The actual spending of funds set aside by appropriation for identified goods and services.

Fee - A general term used for any charge levied by government for providing a service or performing an activity.

Fines, Forfeitures, and Penalties - Revenues resulting from violations of various City and state laws, and from damage to City property.

Fiscal Year - A twelve-month period of time designated as the budget year. The City of Yorba Linda’s fiscal year is July 1 to June 30.

Full-Time Equivalent (FTE) - A position converted to the decimal equivalent of a full-time position based on 2,080 hours per year. For example, a part-time Office Assistant working 20 hours per week would be equivalent to one-half of a full-time position, or 0.50 FTE.

Fund - A set of inter-related accounts to record revenues and expenditures associated with a specific purpose.

Fund Balance - The amount of financial resources in a given fund that are not restricted to fund existing commitments and are therefore available for any use permitted for the fund.

GANN Limit (Proposition 4) - Under this article of the California Constitution, the City must compute an annual appropriation limit that states a ceiling on the total amount of tax revenues the City can appropriate annually.

Generally Accepted Accounting Principles (GAAP) - Uniform minimum standards used by state and local governments for financial recording and reporting that have been established by the accounting profession through the Governmental Accounting Standards Board (GASB).

General Fund (101) - The primary fund used by the City for which revenues and expenditures are not legally restricted for use.

Governmental Accounting Standards Board (GASB) - The Governmental Accounting Standards Board (GASB) was organized in 1984 by the Financial Accounting Foundation (FAF) to establish standards of financial accounting and reporting for state and local governmental entities. Its standards guide the preparation of external financial reports of those entities.

Grant - Contributions of cash or other assets from another governmental agency or other organization to be used or expended for a specific purpose, activity or facility.

HUD - The United States Department of Housing and Urban Development.

Infrastructure - Facilities that support the daily operations of the City, such as roads, bridges, and storm drains.

Interfund Transfers - A transfer of funds between funds for specific purposes as approved by the appropriate authority.

Levy - To impose taxes, special assessments, or charges for the support of city activities.

Licenses and Permits - Revenues generated from recovering costs associated with regulating business activity.

LMAD - The City’s Landscape Maintenance Assessment District, which collects revenue via assessments levied on property within the City and utilizes those funds for maintaining landscaping, lighting, and other facilities throughout the City.

Mission Statement / Statement of Purpose - A broad statement that describes the reason for existence of an organization or organizational unit, such as a department.

Non-Personnel Costs - Expenditures related to professional services and supplies.

NPDES - The National Pollution Discharge Elimination System, which is a permitting process with which the City is required to comply to ensure that storm water runoff is not contaminated.

Objective - Describes an outcome to be accomplished in specific well defined and measurable terms and is achievable within a specific timeframe. Generally, departmental programs have objectives.

Ordinance - A formal legislative enactment by the governing board (City Council) of a municipality. If it is not in conflict with any higher form of law, an Ordinance has the full force and effect of law within the boundaries of the municipality to which it applies.

Operating Budget - The annual appropriation of funds for on-going program costs, which include salaries, benefits, maintenance, operation, and capital outlay items.

Performance Measures - Statistical measures, which are collected to show the impact of dollars spent on city services.

CalPERS - The California Public Employees Retirement System, which is the agency providing pension benefits to all City employees.

Personnel Costs - An expenditure category that captures costs related to employee compensation, such as salaries and benefits. Personnel expenses include salaries, pensions, special pay, and insurance costs for full-time and part-time employees of the City.

Preliminary Budget - A balanced budget presented to the City Council by the City Manager. Any City Council changes to the preliminary Budget are incorporated into the final adopted budget.

Program - Represents major areas or support functions; defined as a service provided to citizens, other departments, or other agencies.

Request for Proposals (RFP) - A written solicitation issued by the City, which generally describes the goods or services sought to be procured by the City, sets forth minimum standards and criteria for evaluating proposals submitted in response to it, generally describes the format and content of proposals to be submitted, provides for negotiation of terms and conditions of the contract, and may place emphasis on described factors other than price to be used in evaluating proposals.

Revenues - Funds received from the collection of taxes, fees, permits, licenses, interest, and grants during the fiscal year.

Routine Fund Balance Change - A routine fund balance change is one that occurs year-to-year due to the nature of the fund. For example, certain capital projects funds routinely have fluctuations in available fund balance as a result of the cyclical nature of project construction. For those funds where changes greater than 10% are frequent, the specific reasons for the change are not discussed in detail.

Schedule - A summary of expenditures, revenues, positions, or other data that reflects funding sources and spending plans of the budget and capital improvement programs.

SERAF - References the Supplemental Education Revenue Augmentation Fund, to which the City was required by the State to contribute various funds to assist in balancing the State budget. Certain Low and Moderate Income Housing Funds were loaned to make the payment, which will be repaid over several years.

Special Revenue Fund - Funds utilized to hold revenues that have specific, restricted purposes for which they are earmarked.

Transfers - Authorized exchanges of money or other resources between organizational units or funds.

Transient Occupancy Tax (TOT) - A tax that is levied on occupants of hotel rooms in the City.

VLF - Vehicle license fees, which are collected by the State of California when vehicles are registered with the California Department of Motor Vehicles and distributed to various public agencies, including the City.