Page 84 - CityofForestHillFY25AdoptedBudget

Cash Basis Accounting: A basis of accounting in which transactions are recorded when cash is either 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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