Accounting System: The total set of records and procedures, which are used to record, classify, and report information on the financial status and operations of an entity.
Ad Valorem Taxes: A tax levied on the assessed value of real property.
Agency Fund: A fund used to account for assets held by a government as an agent for individuals, private organizations, other governments, and/or other funds.
Appropriation: Legislation by the City Council that approves budgets for individual funds. Appropriations can only be adjusted by passage of a subsequent ordinance of the City Council upon recommendation by the Mayor.
Assessed Valuation: The estimated value placed upon real and personal property by the Pierce County Assessor as the basis for levying property taxes.
BARS: The Washington State Auditor prescribed Budgeting, Accounting, Reporting System Manual required for all governmental entities in the State of Washington.
Bond (Debt Instrument): A written promise to pay (debt) a specified sum of money (called principal or face value) at a specified future date (called the maturity date) along with periodic interest paid at a specified percentage of the principal (interest rate). Bonds are typically used for long-term debt to pay for specific capital expenditures.
Budget: Budget adopted by Sumner’s City Council that goes into effect on January 1st, including amendments through December 31st, of the current year.
Budget (Operating): A plan of financial operation embodying an estimate of proposed expenditures for a given period (typically a fiscal year) and the proposed means of financing them (revenue estimates). The term is also used to denote the officially approved expenditure ceilings under which the City and its departments operate.
Budget Adjustment: A procedure to revise a budget appropriation either by City Council approval through the adoption of a supplemental appropriation ordinance.
Budgets and Budgetary Accounting: The City of Sumner budgets its funds in accordance with the Revised Code of Washington (RCW) 35A.33. In compliance with the Code, annual appropriated budgets are adopted for the General, Special Revenue, Debt Service, Capital Projects Funds and any unexpended appropriations lapse at the end of the fiscal year. For Governmental Funds, there is no substantial difference between budgetary basis and generally accepted accounting principles. Annual appropriated budgets are adopted at the fund level.
Budget Calendar: The schedule of key dates or milestones that the City follows in the preparation and adoption of the budget.
Budget Document: The official written statement prepared by the Finance Department and supporting staff, which presents the proposed budget to the City Council.
Budgetary Control: The control or management of a government in accordance with the approved budget for the purpose of keeping expenditures within the limitations of available appropriations and resources.
CDBG: Community Development Block Grant is funding for the purpose of carrying out eligible community development and housing activities.
Capital Assets: Assets of significant value, which assets have a useful life of several years. Capital assets are also called fixed assets.
Cash Basis: A basis of accounting in which transactions are recognized only when cash is received or disbursed. The City of Sumner operates on a cash basis.
Comprehensive Plan: A general plan that outlines growth and land use for residential, commercial, industrial, and open space areas.
Councilmanic Bonds: Councilmanic bonds refer to bonds issued with the approval of the Council, as opposed to voted bonds, which must be approved by vote of the public. Councilmanic bonds must not exceed .75 percent of the assessed valuation and voted bonds 1.75 percent.
Debt Service: Payment of interest and repayment of principal to holders of the City’s debt instruments.
Debt Service Fund: A fund established to account for the accumulation of resources for, and the payment of, general long-term debt principal and interest.
Deficit: (1) The excess of an entity’s liabilities over its assets (see Fund Balance). (2) Expenses exceeding revenue during a single accounting period.
Department: Basic organizational unit of City government responsible for carrying out a specific function.
Depreciation: (1) Expiration in the service life of capital assets attributable to wear and tear, deterioration, action of the physical elements, inadequacy of obsolescence. (2) That portion of the cost of a capital asset that is charged as an expense during a particular period.
Enterprise ERP: Enterprise ERP, formerly known as Munis, is the software program developed by Tyler Technologies, Inc. that is used by the City for financial, permitting (2020), and utility billing (2021) activities.
Expenditures: Where accounts are kept on the accrual or modified accrual basis of accounting, the cost of goods received or services rendered whether cash payments have been made or not. Where accounts are kept on a cash basis, expenditures are recognized only when the cash payments for the above purposes are made.
FICA: Federal Insurance Contribution Act is an employment tax levied against both an employee and employer for Social Security and Medicare taxes.
FEMA: The Federal Emergency Management Act is a Federal initiative designed to provide financial assistance in the event of an emergency.
Fund: An independent fiscal and accounting entity with a self-balancing set of accounts recording cash and/or other resources together with all related liabilities, obligations, reserves, and equities which are segregated for the purpose of carrying on specific activities or attaining certain objectives.
Full-Time Equivalent Position (FTE): FTE is a measure of a position by its budgeted hours. For example, 1 FTE equals 2,080 hours and .75 FTE equals 1,566 hours.
Fund Balance: Difference between fund assets and fund liabilities (the equity) in governmental funds. Fund balances will be classified as reserved or undesignated.
- Nonspendable funds: Amounts of cash and investments that are required by law or contracts to remain intact (e.g. permanent endowments such as Cemetery perpetual care);
- Restricted funds: Amount of cash and investments that are subject to external legally enforcement restrictions;
- Committed funds: Amount of cash and investments that are constrained by the highest level of local government decision authority (e.g. City of Sumner Ordinance);
- Assigned funds: Amount of cash and investments that reflects a government’s intended use of resources;
- Unassigned funds: Amount of cash and investments that are remaining after other classifications.
In addition, many of the special funds are themselves restricted as to use, depending on the legal restrictions governing the levy of the funds they contain. Examples are Debt Service Fund and Capital Improvement Funds.
GASB: Government Accounting Standards Board established in 1985 to regulate the rules and standards for all governmental units.
General Obligation Bonds: Bonds for which the full faith and credit of the insuring government are pledged for payment.
Indebtedness: The state of owing financial resources to other financial institutions and investors.
Interfund Payments: Expenditures made to other funds for services rendered. This category includes interfund repairs and maintenance.
Intergovernmental Services: Intergovernmental purchases of those specialized services typically performed by local governments.
LEOFF: Law Enforcement Officers and Firefighters Retirement System provided in the State of Washington.
LID: Local Improvement District or Special Assessments made against certain properties to defray part or all of the cost of a specific improvement or service deemed to primarily benefit those properties.
LTGO: Limited Tax General Obligation bonds are non-voter approved bonds for which the full faith and credit of the insuring government are pledged for payment.
Long Term Debt: Debt with a maturity of more than one year after the date of issuance.
Mitigation Fees: Fees paid by developers toward the cost of future improvements to City infrastructure, which improvements are required due to the additional demands generated by new development.
Object: As used in expenditure classification, this term applies to the type of item purchased or the service obtained (as distinguished from the results obtained from expenditures). Examples are personnel services, contractual services, and materials and supplies.
PERS: Public Employees Retirement System provided for, other than Police and Fire, by the State of Washington.
PWTF: See Public Works Trust Fund.
Personnel Benefits: Those benefits paid by the City as part of the conditions of employment. Examples include insurance and retirement benefits.
Program: A group of related services or activities that are provided or administered by a department or division and accounted for in its budget.
Public Works Trust Fund Loans: A State revolving loan fund that provides low-interest loans to help local governments maintain or improve essential public works systems.
Reserve: See fund balance.
Resources: Total dollars available for appropriations including estimated revenue, fund transfers, and beginning fund balances.
Retained Earnings: An equity account reflecting the accumulated earnings of the City.
Revenue: Income received by the City in support of a program of services to the community. It includes such items as property taxes, fees, user charges, grants, fines and forfeits, interest income and miscellaneous revenue.
Revenue Bonds: Bond issued pledging future revenue (usually water, sewer, or drainage charges) to cover debt payments in addition to operating costs.
Revenue Estimate: A formal estimate of how much revenue will be earned from a specific revenue source for some future period, typically, a future fiscal year.
Salaries and Wages: Amounts paid for personal services rendered by employees in accordance with rates, hours, terms and conditions authorized by law or stated in employment contracts. This category also includes overtime and temporary help.
Supplies: A basic classification of expenditures for articles and commodities purchased for consumption or resale. Examples include office and operating supplies, fuel, power, water, gas, inventory or resale items, and small tools and equipment.
TIB: Transportation Improvement Board distributes grant funding, which comes from the revenue generated by three cents of the statewide gas tax, to cities and counties for funding transportation projects.
TIP: Transportation Improvement Program is a comprehensive program used to identify specific transportation projects for improvement to enhance local, regional, State, and Federal transportation systems.
Trust Fund: Funds used to account for assets held by a government in a trustee capacity for individuals, private organizations, other governments, and/or other funds.
UTGO: Unlimited Tax General Obligation bonds are voter approved and retired by a tax levy commonly referred to as an excess levy.
Use of Prior Year Revenue: Fund balance from prior year revenue to be used to offset current year expenditures.