Page 91 - Forest Hill FY20 Annual Budget

CITY OF FOREST HILL

received or expended for goods and services.

Cash Balance: The amount of cash on hand and cash equivalents at any point in time, net of inflows and
outflows.

Cash Management: The management of the cash that is necessary to pay for government services while
investing temporary cash excesses in order to earn interest revenue. Cash management refers to the
activities of forecasting the inflows and outflows of cash, mobilizing cash to improve its availability for
investment, establishing and maintaining banking relationships, and investing funds in order to achieve the
highest interest and return available for temporary cash balances.

Character: A basis for distinguishing types of expenditures; the five major characters used by the City of
Forest Hill are: personnel services, supplies, contractual services, capital outlays, and debt service.

•The Personnel Services category includes all salary, benefit and supplement costs associated with
employees compensations.
•The Supplies category includes expenditures for items costing less than $5,000 per unit, or for items
costing more than $5,000 with a useful life of less than two years. Examples of supplies include basic office
supplies, books and magazines; materials used in city operations including paving material, streetlights,
signals, and library books; postage, uniforms, and vehicle related costs including parts, supplies and fuel.
In addition, minor equipment is budgeted as a supply cost. Minor equipment is distinguished from capital
outlays by the $5,000 cost per unit threshold and includes items like minor audio/video equipment, water
meters, scanners, fax machines, and minor appliances.

•Expenditures in the Contractual category represent activities performed under expressed or implied
agreements involving the use of equipment or commodities; and for professional, specialized or trade
services rendered. In addition to external contracts for goods and services, this category includes services
provided to City departments through Internal Service Funds including Information Technology services,
labor charges for Equipment Services, and copy and graphic services provided through the Office Services
Fund. Contractual services also include payment of utilities for electricity, gas, water, wastewater, and storm
water. Finally, transfers among Funds are captured as contractual costs. These include transfers for
insurance, healthcare, and administrative services.

•The Capital Outlays category reflect all outlays that result in the acquisition of, or additions to, the City’s
fixed assets (assets of a long-term nature which are intended to be held or used beyond the current fiscal
year and which may be eligible for depreciation), including real and tangible assets. Capital Outlays must
cost at least $5,000 and must have an expected life of two or more years. Primarily four types of fixed
assets (Capital Outlays) are used: 1) Land; 2) Improvements other than buildings; 3) Buildings; and 4)
Equipment.

•The Debt Service category includes money paid on loans and bonds by the City, as a borrower, of the
principal and interest.

Commitment: The pledge of appropriated funds to purchase an item or service. Funds are committed
when a requisition is issued through the Finance Division of the City.

Current Taxes: Taxes that are levied and due within one year.

Debt Service: The City's obligation to pay the principal and interest of all bonds and other debt instruments
according to a pre-determined payment schedule.

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