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ADOPTED | BUDGET

DEBT SERVICE FUND: A fund established to account for the accumulation of resources for the
payment of principal and interest on long term debt, also called a Sinking Fund.

DEFICIT: The excess of the liabilities of a fund over its assets; or the excess of expenditures over
revenues during an accounting period; or, in the case of proprietary funds, the excess of expense
over income during an accounting period.

DELINQUENT TAXES: Taxes remaining unpaid on or after the date on which a penalty for non-
payment is attached.

DEPARTMENT: Administrative subsection of the City that indicates management responsibility for
an operation.

DEPRECIATION: That portion of the cost of a capital asset that is charged as an expense during a
particular period. This is a process of estimating and recording the lost usefulness, expired useful
life or diminution of service from a fixed asset that cannot or will not be restored by repair and will
be replaced. The cost of the loss of usefulness of a fixed asset is the depreciation or the cost to
reserve in order to replace the item at the end of its useful life.

DISTINGUISHED BUDGET PRESENTAT‐ION AWARD: A voluntary program administered by the
Government Finance Officers Association to encourage governments to publish well organized
and easily readable budget documents and to provide peer recognition and technical assistance to
the fiscal officers preparing them.

EFFECTIVE TAX RATE: A rate which generates the same amount of revenues from property which is
taxed in both years.

ENCUMBRANCES: Obligations in the form of purchase orders and contracts which are chargeable
to an appropriation and for which a part of the appropriation is reserved because the goods or
services have not been received. When paid, the encumbrance is liquidated.

ENTERPRISE FUND: A fund established to account for operations that are financed and operated in
a manner similar to private business enterprises--where the intent of the governing body is that the
costs of providing goods or services to the general public on a continuing basis be financed or
recovered primarily through user charges.

EQUIPMENT REPLACEMENT FUND: A Fund whereby monies provide solely for the replacement,
maintenance and upkeep of City owned equipment. Refer to Resolution No. 97-39, approved
September 8, 1997.

EXPENDITURE: This term refers to the outflow of funds paid or to be paid for an asset obtained or
goods and services obtained regardless of when the expense is actually paid. This term applies
to all funds.

EXPENSES: A decrease in net total assets. Expenses represent the total cost of operations during
a period regardless of the timing of related expenditures.

304 NRH | TEXAS