GLOSSARY

ASSESSED VALUATION: A value established for real property for use as a basis for levying property taxes.

BALANCED BUDGET: Occurs when planned expenditures equal anticipated revenues. In North Carolina, it is a requirement that the budget submitted to the Town Council be balanced.

BOND: A written promise to pay a designated sum of money (the principal) at a specific date in the future, along with periodic interest at a specified rate. The payment on bonds are identified as Debt Service. Bonds are generally used to obtain long-term financing for capital improvements.

BOND FUNDS: Resources derived from issuance of bonds for specific purposes and related Federal project grants used to finance capital expenditures.

BUDGET: A comprehensive financial plan of operation for a specified period of time that matches all planned revenues and expenditures with various municipal services.

BUDGET ORDINANCE: The schedule of revenues and expenditures for the upcoming fiscal year by fund which is adopted by the Town Council each year.

CAPITAL IMPROVEMENTS: Major construction, repair of or addition to buildings, parks, streets, bridges and other Town facilities. Capital Improvements projects cost $25,000 or more, and have a useful life of more than three years.

CAPITAL IMPROVEMENTS BUDGET: The schedule of project expenditures for the acquisition and construction of capital assets for the current fiscal year.

CAPITAL IMPROVEMENTS PLAN: The annually updated plan or schedule of project expenditures for public facilities and infrastructure (buildings, roads, etc.), with estimated project costs, sources of funding, and timing of work over a five-year period.

CAPITAL PROJECTS FUNDS: These funds are budgeted in the Capital Improvements Budget, and are 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). The Town's six Capital Project Funds are Water and Sewer (Utility), and Streets, Fire, Parks & Recreation, and General Government (General).

CAPITAL RESERVE FUND: A special fund used as a clearing house for monies being transferred from other funds into capital project accounts.

CONTINGENCY ACCOUNT: Account in which funds are set aside for unforeseen expenditures which may become necessary during the year and which have not been provided for in the context of the annual operating budget.

DEBT SERVICE: Payment of long term debt principal, interest, and related costs. Debt service is budgeted and accounted for in the fund in which it is incurred.

ENTERPRISE FUND: A grouping of activities whose expenditures are wholly or partially offset by revenues collected from consumers in form of fees or charges.

EXPENDITURE: The outlay of or obligation to pay cash; a decrease in net financial resources.

FISCAL YEAR: The time period beginning on July 1 of a calendar year and ending on June 30 of the following calendar year. Budgeting is carried out on a fiscal year schedule.

FUND BALANCE: Amounts shown as fund balance represent monies which remain unspent after all budgeted expenditures have been made. North Carolina statutes dictate that a portion of fund balance is not available for appropriation in the following fiscal year.

FUND: A fund is a fiscal and accounting entity with a self-balancing set of accounts.

GENERAL FUND: The general operating fund of the Town used to account for all the financial resources except those required to be accounted for in another fund.

GOAL: A statement of broad direction, purpose or intent based on the needs of the community. A goal is general and timeless; that is, it is not concerned with a specific achievement in a given time period.

INTERNAL SERVICE FUNDS (ISF): Those funds used to account for the financing of goods or services provided by one Town department to others on a cost reimbursement basis. The Town has one Internal Service Fund, the Public Works/Utilities Fleet Management Fund.

INVESTMENT REVENUE: Revenue earned on investments with a third party. The Town uses a pooled cash system. The Town pools all funds' cash and invests it in total. The interest earned is then allocated back to the individual funds by the average cash balance in that fund.

OPERATING BUDGET: The Town's financial plan which outlines proposed expenditures for the coming fiscal year and estimates the revenues which will be used to finance them.

POLICE SEPARATION FUND: The Police Separation Allowance Trust Fund is used to account for the annual appropriations made for this purpose. Retired police officers are entitled, under certain conditions, to receive payments from this fund.

POWELL BILL FUNDS: These revenues are based on gasoline sales in the state and the number of miles of streets within the Town. State law restricts the use of these funds to streets projects.

PROPERTY TAXES (AD VALOREM TAXES): Taxes paid by those owning property in the Town. These taxes are based on assessed value and go into the Town's General Fund.

REVENUE: Income received from various sources used to finance government services. For example, sales tax revenue.

TAX BASE: The total assessed valuation of real property within the Town.

TAX LEVY: The total amount to be raised by general property taxes for purposes specified in the Tax Levy Ordinance.

TRANSFER: An appropriation to or from another fund. A transfer is the movement of money from one fund to another to wholly or partially support the functions of the receiving fund.

USER CHARGES: The payment of a fee for direct receipt of a public service by the party benefiting from the service. For example, solid waste fees, recreation fees, and development fees.