Cash: Currency, coin, checks, postal and express money orders and bankers’ drafts on hand or on deposit with an official or agent designated as custodian of cash and bank deposits.
Cash Basis of Accounting: A basis of accounting under which revenues are recognized when cash is received and expenditures incurred when cash is paid.
Cash Flow: The movement of money into or out of an organization, showing its liquidity and ability to meet financial obligations.
Cash Management: The process of monitoring the ebb and flow of money in an out of municipal accounts to ensure cash availability to pay bills and to facilitate decisions on the need for short- term borrowing and investment of idle cash.
Certificate of Deposit (CD): A bank deposit evidenced by a negotiable or non-negotiable instrument, which provides on its face that the amount of such deposit plus a specified interest payable to a bearer or to any specified person on a certain specified date, at the expiration of a certain specified time, or upon notice in writing.
Classification of Real Property: Assessors are required to classify all real property according to use into one of four classes: residential, open space, commercial, and industrial. Having classified its real properties, local officials are permitted to determine locally, within limitations established by statute and the Commissioner of Revenue, what percentage of the tax burden is to be borne by each class of real property and by personal property owners.
Collective Bargaining: The process of negotiating workers' wages, hours, benefits, working conditions, etc., between an employer and some or all of its employees, who are represented by a recognized labor union, regarding wages, hours and working conditions.
Compliance: Adherence to relevant laws, regulations, and internal policies governing financial reporting and operations.
Community Development Block Grant (CDBG): A federal grant that aims to develop viable urban communities by providing decent housing, a suitable living environment, and expanded opportunities for persons of low and moderate income. The City of Manteca receives an annual CDBG entitlement from the U.S. Department of Housing and Urban Development through San Joaquin County.
Consumer Price Index: The statistical measure of changes, if any, in the overall price level of consumer goods and services. The index is often called the "cost-of-living index."
Cost-Benefit Analysis: A decision-making tool that allows a comparison of options based on the level of benefit derived and the cost to achieve the benefit from different alternatives.
Debt Burden: The amount of debt carried by an issuer usually expressed as a measure of value (i.e., debt as a percentage of assessed value, debt per capita, etc.). Sometimes debt burden refers to debt service costs as a percentage of the total annual budget.
Debt Service: The repayment cost, usually stated in annual terms and based on an amortization schedule, of the principal and interest on any particular bond issue.
Debt Service Requirement: The amount of money required to pay the interest currently due on outstanding debit, and/or the principal portion due on debt maturing in the upcoming year. The City’s debt service requirement may also include required annual contributions to sinking funds set up to accumulate monies for the retirement of term bonds.
Encumbrance: Commitments related to unperformed contracts for goods or services. Encumbrances represent the estimated amount of expenditures ultimately to result if the unperformed contracts are completed. Encumbrances are used for budgetary purposes only and are not expenditures under generally accepted accounting principles (GAAP).
Enterprise Funds: Also known as Proprietary Funds, this fund type is used to account for operations that are: (1) financed and operated in a manner similar to private sector enterprises and intent that the costs (including depreciation) for providing goods or services to the general public be financed or recovered primarily through user charges, or, (b) the City, or an outside grantor agency, has determined that a periodic determination of revenues earned, expenses, and net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. The City’s enterprise funds are golf, water, sewer, and solid waste.
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Proposed Fiscal Year 2025-26 Budget Book | City of Manteca Page 928 Equalized Valuations (EQVs): The determination of the full and fair cash value of all property in the community that is subject to local taxation.
Equity: The residual interest in the assets of an organization after deducting liabilities, representing the owners' stake in the business.
Estimated Receipts: A term that typically refers to anticipated local revenues often based on the previous year's receipts and represent funding sources necessary to support a community's annual budget. (See Local Receipts) Exemptions: A discharge, established by statute, from the obligation to pay all or a portion of a property tax. The exemption is available to particular categories of property or persons upon the timely submission and approval of an application to the assessors. Properties exempt from taxation include hospitals, schools, houses of worship, and cultural institutions. Persons who may qualify for exemptions include disabled veterans, blind individuals, surviving spouses, and seniors.
Expenditure: A decrease in the City’s available financial resources due to the purchase of goods or services, the completion of a contract related to a prior encumbrance, or payments currently due on outstanding debt.
Fiduciary Funds: Used to report assets held in a trustee or agency capacity for others.
Financial Statements: Reports summarizing an organization's financial activities and position, including the balance sheet, income statement, and cash flow statement.
Fiscal Year: The twelve (12) month period to which the annual operating budget applies, and at the end of which the City determines its financial position and the results of its operations. The fiscal year for the City of Manteca is July 1 – June 30.
Fixed Assets: Long-lived, assets such as buildings, equipment and land obtained or controlled as a result of past transactions or circumstances.
Fixed Costs: Costs that are legally or contractually mandated such as retirement, FICA/Social Security, insurance, debt service costs or interest on loans.
Float: The difference between the bank balance for a local government’s account and its book balance at the end of the day. The primary factor creating float is clearing time on checks and deposits. Delays in receiving deposit and withdrawal information also influence float.
Full Accrual Basis of Accounting: The method of accounting where revenues are recognized when earned, expenditures are recognized when incurred, and fixed assets are depreciated over their estimated useful life. All enterprise and internal service funds are accounted for using this method of accounting (See Modified Accrual Basis of Accounting).
Full Faith and Credit: A pledge of the general taxing powers for the payment of governmental obligations. Bonds carrying such pledges are usually referred to as general obligation or full faith and credit bonds.
Fund: A separate fiscal and accounting entity which is self-balancing and freestanding for the purpose of maintaining records for a series of financial resources which are segregated for a particular purpose. The set of accounts in a fund include cash and other financial resources, all related liabilities, and the residual equities, or balances, and changes therein.
Fund Accounting: Organizing financial records into multiple, segregated locations for money. A fund is a distinct entity within the municipal government in which financial resources and activity (assets, liabilities, fund balances, revenues, and expenditures) are accounted for independently in accordance with specific regulations, restrictions or limitations. Examples of funds include the general fund and enterprise funds. Communities whose accounting records are organized according to the Uniform Municipal Accounting System (UMAS) use multiple funds.
Fund Balance: For each separate fund, this is the excess of assets over liabilities. A negative fund balance is sometimes called a deficit.
Working capital is the spendable fund balance.
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GAAP: Generally Accepted Accounting Principles - Standard accounting principles, standards, and procedures that companies use to compile their financial statements.
GANN Appropriations Limit This term refers to Article XIIIB of the California State Constitution that places limits on the amount of proceeds from taxes that state and local governmental agencies can receive and spend each year.
Gas Tax: Administered by the State Board of Equalization (SBOE), this is a per gallon tax on fuel used to propel a motor vehicle or aircraft.
Use of the revenue is for research, planning, construction, improvement, maintenance, and operation of public streets, highways, or public mass transit.
GASB 34: A major pronouncement of the Governmental Accounting Standards Board that establishes new criteria on the form and content of governmental financial statements. GASB 34 requires a report on overall financial health, not just on individual funds. It requires more complete information on the cost of delivering value estimates on public infrastructure assets, such as bridges, road, sewers, etc. It also requires the presentation of a narrative statement the government's financial performance, trends and prospects for the future.
GASB 45: This is another Governmental Accounting Standards Board major pronouncement that each public entity account for and report other postemployment benefits in its accounting statements. Through actuarial analysis, municipalities must identify the true costs of the OPEB earned by employees over their estimated years of actual service.
General Fund: The fund used to account for all financial resources traditionally associated with government which are not required to be accounted for separately.
General Obligation Bonds: Bonds backed by the full faith and credit of a governmental unit. These bonds usually contain a pledge of the general taxing authority for their repayment.
Generally Accepted Accounting Principles (GAAP): GAAP encompasses the conventions, rules, and procedures necessary to define accepted accounting practices at a particular time. They govern the form and content of the basic financial statements of an entity by including not only broad guidelines of general applications, but also detailed practices and procedures. GAAP provides a standard by which to measure and compare financial presentations.
Governing Body: A board, committee, commission, or other executive or policymaking body of a municipality or school district.
Governmental Funds: Funds used to account for tax-supported activities.
Grant: Contribution, gift, cash, or other assets from another entity to be used or expended for a specific purpose, activity, or facility.
Indirect Cost: Costs of a service not reflected in the operating budget of the entity providing the service. An example of an indirect cost of providing water service would be the value of time spent by non-water department employees processing water bills. A determination of these costs is necessary to analyze the total cost of service delivery. The matter of indirect costs arises most often in the context of enterprise funds.
Inter-Fund Transfers: Monies moved from one fund to another. The money is transferred to finance the operations of another fund or to reimburse the fund for expenses.
Internal Controls: Policies and procedures implemented by an organization to ensure the reliability of financial reporting and compliance with laws and regulations, aiming to prevent fraud and errors.
Internal Service Fund: Funds established to account for the financing of goods or services that are provided by one City department to another. Cost allocations spread the costs incurred by the internal service fund to other funds.
Interest: Compensation paid or to be paid for the use of money, including amounts payable at periodic intervals or discounted at the time a loan is made. In the case of municipal bonds, interest payments accrue on a day-to-day basis, but are paid every six months.
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Proposed Fiscal Year 2025-26 Budget Book | City of Manteca Page 930 Interest Rate: The interest payable, expressed as a percentage of the principal available for use during a specified period of time. It is always expressed in annual terms.
Investments: Securities and real estate held for the production of income in the form of interest, dividends, rentals or lease payments. The term does not include fixed assets used in governmental operations.
Liabilities: Debts or obligations owed by an organization, including loans, accounts payable, and accrued expenses.
Line Item Budget: A budget that separates spending into categories, or greater detail, such as supplies, equipment, maintenance, or salaries, as opposed to a program budget.
Local Aid: Revenue allocated by the state or counties to municipalities and school districts.
Maturity Date: The date that the principal of a bond becomes due and payable in full.
Modified Accrual Basis Of Accounting: The method of accounting where revenues are recognized when they become both “measurable” and “available” to finance expenditures for the current period. Measurable means the amount of the transaction can be determined and available means the amount is collectible within the current period or soon enough thereafter (generally sixty days) to be used to pay liabilities of the current period. All governmental funds are accounted for using this method of accounting (See Full Accrual Basis of Accounting).
Municipal(s): (As used in the bond trade) "Municipal" refers to any state or subordinate governmental unit. "Municipals" (i.e., municipal bonds) include not only the bonds of all political subdivisions, such as cities, towns, school districts, special districts, counties but also bonds of the state and agencies of the state.
Net Income: The difference between an organization's revenues and expenses, representing its profit or loss for a specific period.
Note: A short-term loan, typically with a maturity date of a year or less.
Objects of Expenditures: A classification of expenditures that is used for coding any department disbursement, such as “personal services,” “expenses,” or “capital outlay.”
Official Statement: A document prepared for potential investors that contains information about a prospective bond or note issue and the issuer. The official statement is typically published with the notice of sale. It is sometimes called an offering circular or prospectus.
Operating Budget: Annual appropriation of funds for ongoing program costs, including salaries and benefits, services and supplies, debt service, and capital outlay.
Operating Expenses: Expenditures for materials, supplies, and services which are ordinarily consumed within a fiscal year and which are not included in program inventories.
Operating Transfers: legally authorized transfers from a fund receiving revenue to the fund through which the resources are to be expended. An example would be the transfer of funds from the general fund, or an enterprise fund, to an internal service fund to finance the services provided by the internal service fund (See the Fiscal Overview section of this document for further definitions of the types of funds).
Ordinance: A formal legislative enactment by the governing board of a municipality (the City Council). If it is not in conflict with any higher form of law, such as a State statute, Federal law, or constitutional provision, it has the full force and effect of law within the boundaries of municipality to which it applies. The difference between an ordinance and a resolution is that the latter requires less legal formality and has a lower legal status. Ordinarily, the City’s statues or charter will specify or imply those legislative actions which must be by ordinance and those which may be by resolution.
Overlapping Debt: A community's proportionate share of the debt incurred by an overlapping government entity, such as a regional school district, regional transit authority, etc.
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Performance Budget: A budget that stresses output both in terms of economy and efficiency.
Performance Measures: Performance measures are an important component of decision making, and at a minimum, they should be based on program goals and objectives, measure program results or accomplishments, provide for comparisons over time, measure efficiency and effectiveness, and be reliable, verifiable, and understandable.
Preliminary Budget: The budget in its initial preparation stage prior to being reviewed and formulated by the budget-making authority (the City Manager). In the preliminary stage, a budget consists of various estimates forecasting current costs into the future and new or modified spending proposals for the future.
Principal: The face amount of a bond, exclusive of accrued interest.
Program: A combination of activities to accomplish an end.
Program Budget: A budget that relates expenditures to the programs they fund. The emphasis of a program budget is on output.
Property Tax: Property tax is imposed on real property (land and permanently attached improvements such as a building) and tangible personal property located within the City.
Proposed Budget: The budget as formulated and proposed by the budget-making authority (the City Manager). It is submitted to the legislative body (the City Council) for review and approval.
Proprietary Funds: Funds used to record the financial transactions of governmental entities when they engage in activities that are intended to recover the cost of providing goods or services to the general public on a user-fee basis.
Purchased Services: The cost of services that are provided by a vendor.
Refunding of Debt: Transaction where one bond issue is redeemed and replaced by a new bond issue under conditions generally more favorable to the issuer.
Reserve: An account used to earmark a portion of the fund balance. This may be done for various reasons. The most common is to indicate that this portion of the fund balance is not available for general expenditures, or the amount has been legally segregated for specific future use.
Reserve Fund: An amount set aside annually within the budget of a town to provide a funding source for extraordinary or unforeseen expenditures.
Resolution: A special or temporary order of a legislative body (the City Council). This action requires less legal formality than an ordinance (See Ordinance).
Revaluation: The assessors of each community are responsible for developing a reasonable and realistic program to achieve the fair cash valuation of property in accordance with constitutional and statutory requirements. The nature and extent of that program will depend on the assessors’ analysis and consideration of many factors, including, but not limited to, the status of the existing valuation system, the results of an in-depth sales ratio study, and the accuracy of existing property record information.
Revenue: Amounts received or receivable from taxes, fees, permits, licenses, interest, and intergovernmental sources during the fiscal year.
Revenue Anticipation Note (RAN): A short-term loan issued to be paid off by revenues, such as tax collections and state aid. RANs are full faith and credit obligations.
Revenue Bond: A bond payable from and secured solely by specific revenues and thereby not a full faith and credit obligation.
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Proposed Fiscal Year 2025-26 Budget Book | City of Manteca Page 932 Revolving Fund: Allows a community to raise revenues from a specific service and use those revenues without appropriation to support the service.
Sale of Real Estate Fund: A fund established to account for the proceeds of the sale of municipal real estate other than proceeds acquired through tax title foreclosure.
Sinking Fund: A group of accounts established to account for the accumulation of resources for, and the payment of, long-term bond principal and interest. Bonds issued in such a fund contain an agreement requiring the governmental unit to periodically set aside a sum which, when compounded with interest, will be sufficient to redeem the debt at the stated maturity date. Bonds of this type are commonly known as term bonds.
Special Revenue Fund: A fund used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes.
Stabilization Fund: A fund designed to accumulate amounts for capital and other future spending purposes, although it may be appropriated for any lawful purpose.
Supplemental Appropriation: An additional appropriation made by the legislative body (the City Council) after the budget year has begun.
Support Services: The expenditure class for charges paid by one City department or agency to another for services rendered or materials supplied.
Surplus Revenue: The amount by which cash, accounts receivable, and other assets exceed liabilities and reserves.
Taxes: 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 persons or property for current or permanent benefits, such as special assessment districts. Neither does the term include charges for services rendered only to those paying such charges, such as sewer service charges.
Tax Rate: The amount of property tax stated in terms of a unit of the municipal tax base; for example, $14.80 per $1,000 of assessed valuation of taxable real and personal property.
Tax Title Foreclosure: The procedure initiated by a municipality to obtain legal title to real property already in tax title and on which property taxes are overdue.
Transient Occupancy Tax (TOT): A tax imposed on travelers who stay in temporary lodging facilities within the City. Also referred to as a Hotel/Motel Tax.
Trust Fund: In general, a fund for money donated or transferred to a municipality with specific instructions on its use. As custodian of trust funds, the treasurer invests and expends such funds as stipulated by trust agreements, as directed by the commissioners of trust funds or by the community's legislative body. Both principal and interest may be used if the trust is established as an expendable trust. For nonexpendable trust funds, only interest (not principal) may be expended as directed.
Uncollected Funds: Recently deposited checks included in an account’s balance but drawn on other banks and not yet credited by the Federal Reserve Bank or local clearinghouse to the bank cashing the checks. (These funds may not be loaned or used as part of the bank’s reserves and they are not available for disbursement.) Undesignated Fund Balance: Monies in the various government funds as of the end of the fiscal year that are neither encumbered nor reserved, and are therefore available for expenditure once certified as part of free cash.
Unreserved Fund Balance (Surplus Revenue Account): The amount by which cash, accounts receivable, and other assets exceed liabilities and restricted reserves. It is akin to a "stockholders’ equity" account on a corporate balance sheet. It is not, however, available for appropriation in full because a portion of the assets listed as "accounts receivable" may be taxes receivable and uncollected. (See Free Cash)
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User Charges: The payment of a fee for direct receipt of a public service by the party benefiting from the service (e.g., fees paid for periodic refuse pick-up).
Valuation (100 Percent): The legal requirement that a community’s assessed value on property must reflect its market, or full and fair cash value.
Working Capital: Broadly defined as the excess of current assets over current liabilities. A practical definition for governmental units would be the excess of cash, investments, and accounts receivable over accounts payable. Amount of fund balance that is available to spend.
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Proposed Fiscal Year 2025-26 Budget Book | City of Manteca Page 934