Page 342 - Watauga FY21 Budget

GLOSSARY OF TERMS

Accrual Accounting: A basis of accounting in which revenues are recognized in the accounting
period in which they are earned, and expenses are recognized in the period in which they are
incurred.

Ad Valorem Tax: A tax assessed against property (land, improvements, and personal property) for
the purpose of financing general operations of the City and debt service requirements.

Advanced Refunding: A transaction in which new debt is issued to provide monies to pay interest
on old, outstanding debt as it becomes due, and to pay the principal on the old debt either as it
matures or at an earlier call date.

Allocation: A part of a lump-sum appropriation, which is designed for expenditures by specific
organization units and/or for special purposes, activities, or objects.

Appraised Value: The market value of real and personal property located in the City as of January
1 each year, determined by the Tarrant Appraisal District (TAD).

Appropriation: The maximum level of spending for each fund and for each department as
authorized annually by the City Council.

Appropriation Ordinance: The official enactment by the legislative body by means of which
appropriations are given legal effect. It is the method by which the expenditure side of the annual
operating budget is enacted into law by the legislative body.

Assessed Valuation: A value that is established for real or personal property for use as a basis for
levying property taxes. The Tarrant Appraisal District establishes property values in Watauga.

Assessment Ratio: The ratio at which tax rate is applied to tax base. State Law currently sets the
assessment ratio at 100%.

Assets: Resources owned or held by the City, which have monetary value.

Balanced Budget: A budget where expenditures are equal to income or sometimes where
expenditures are less than income. A balanced budget can include a planned draw down of fund
balances within set guidelines.

Basis of Accounting: The timing of recognition, that is, when the effects of transactions or events
should be recognized for financial reporting purposes.

Bond: A written promise to pay a specified sum of money, called the face value or principal
amount, at a specified date in the future, call the maturity date, together with periodic interest at a
specified rate. The most common types of bonds are general obligation and revenue bonds. They
are most frequently used for construction of large capital projects, such as buildings, streets, and
bridges.

Budget: A plan of financial operation embodying an estimate of proposed expenditures for a given
period and the proposed means of financing them. Used without any modifier, the term usually
indicates a financial plan for a single fiscal year.

Budget Calendar: The schedule of key dates or milestones, which the City departments follow in
the preparation, adoption, and administration of the budget.

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