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These fees ensure that growth-related infrastructure costs are shared by those creating the need for the improvements.

Indirec t Cost: Costs of a ser vice not re|ected in the operating budget of the entity providing the ser vice. An example of an
indirect cost of providing water ser vice would be the value of time spent by non-water depar tment employees processing
water bills. A determination of these costs is necessary to analyze the total cost of ser vice delivery. The matter of indirect
costs arises most often in the context of enterprise funds.

Internal Controls: Policies and procedures implemented by an organization to ensure the reliability of {nancial repor ting
and compliance with laws and regulations, aiming to prevent fraud and errors.

Interest: Compensation paid or to be paid for the use of money, including amounts payable at periodic inter vals 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.

Interest Rate: The interest payable, expressed as a percentage of the principal available for use during a speci{ed 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 {xed assets used in governmental operations.
Liabilities: Debts or obligations owed by an organization, including loans, accounts payable, and accrued expenses.

Maturity Date: The date that the principal of a bond becomes due and payable in full.

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 pro{t or loss for a speci{c
period.

Operating Budget: A plan of proposed expenditures for personnel, supplies, and other expenses for the coming {scal
year.

Principal: The face amount of a bond, exclusive of accrued interest .

Proprietary Funds: Funds used to record the {nancial transactions of governmental entities when they engage in
activities that are intended to recover the cost of providing goods or ser vices to the public on a user-fee basis.

Revaluation: The assessors of each community are responsible for developing a reasonable and realistic program to
achieve the fair cash valuation of proper ty 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
proper ty record information.

Revenues: In|ows of resources or other enhancements of assets of an organization, usually from sales of goods or
ser vices.

Stabilization Fund: A fund designed to accumulate amounts for capital and other future spending purposes, although it
may be appropriated for any lawful purpose.

Surplus Revenue: The amount by which cash, accounts receivable, and other assets exceed liabilities and reser ves.

FY 2025-2026 Annual Budget | Colleyville Page 192