2022 Pay Plan Adoption Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .In Final Version Mill Levy Ordinance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .In Final Version 2022 Appropriating Funds Fiscal Year Ordinance . . . . . . . . . . . . . . . . . . . . . . . . . . .In Final Version Glossary of Terms

The City of Arvada Operating and Capital Budget is structured to be easily understood and meaningful to both the general public and the organization . This glossary is provided to assist those unfamiliar with budgeting terms and a few terms specific to the Arvada financial planning process .

98-101 Funding – Since the electors of Arvada adopted a sales tax in 1969, the City Code has required that 60% of the first cent of sales tax revenue must be appropriated annually for capital projects or debt service. Codified as 98-101 in the Arvada Code of Ordinances, this funding is referred to as 98-101 funding .

Accrual Basis: A basis of accounting in which transactions are recognized at the time they are incurred, as opposed to when cash is received or spent .

Advance Refunding: The payoff and re-issuance of bonds to obtain better interest rates and/or bond conditions .

Appropriation: Appropriation is a formal action by the City Council which approves the spending limits for the fiscal year for each fund .

Arvada Economic Development Association (AEDA): Arvada Economic Development Association provides start-up, existing or expanding businesses with the latest demographic, financial, business, and consumer research necessary to succeed in the City of Arvada .

Assessed Valuation: Assessed valuation is a valuation set upon real estate or other property by the County Assessor as a basis for levying taxes .

Asset: Resources owned or held that have monetary value .

Assigned Fund Balance: These are amounts that a government intends to use for a specific purpose . Intent can be expressed by the governing body or by an official or body to which the governing body delegates authority .

Attrition: A method of achieving a reduction in personnel by not refilling the positions vacated through resignation, reassignment, transfer, retirement or means other than layoffs .

AURA: AURA stands for Arvada Urban Renewal Authority . AURA acquires and assembles property in order to redevelop blighted property located in the urban renewal district . The district in Arvada includes five active areas that are located throughout the City .

Authorized Positions: Employee positions, which are authorized in the adopted budget, to be filled during the year .

Bond: A long-term I .O .U . or promise to pay . Often bonds are issued to finance the construction of long term capital projects . It is a promise to repay a specified amount of money (the face amount of the bond) on a particular date (maturity date) . Bonds come in two types: general obligation bonds are backed by the full faith, credit and taxing authority of the government and revenue bonds are backed only by a specific revenue stream, such as water user fees or sales tax .

Budget: A plan of financial activity for a specified period of time (two years) indicating all planned revenues and expenditures for the budget period .

Budgetary Basis: This refers to the basis of accounting used to estimate financing sources and uses in the budget . This generally takes one of three forms: Generally Accepted Accounting Principles (GAAP), cash, or modified accrual .

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 . Capital Equipment: Assets of value greater than $5,000 and having a useful life greater than 36 months . Capital equipment is also called fixed assets .

Capital Improvements Plan (CIP): The appropriation and spending plan for improvements to city facilities including buildings, streets, water , stormwater and sewer projects, drainage improvements, parks and trails .

Capital Outlay: Classification of expenditures related to the purchase of capital equipment .

Capital Project: Major construction, acquisition or renovation activities which add value to a government’s physical assets of significantly increase their useful life .

Cash basis: A basis of accounting in which transactions are recognized only when cash is increased or decreased .

CCIPC: The Citizens Capital Improvement Plan Committee, a 21-member group of citizens appointed by City Council to report recommendations for capital improvement project prioritizations and funding .

Certificate of Participation (COP): A certificate of participation is a lease financing agreement used by a government to improve or purchase infrastructure .

CDBG: CDBG stands for Community Development Block Grant, which is money given to cities from the federal government to improve blighted conditions and to assist low and moderate income persons .

City Council Strategic Plan (CCSP): The City Council Strategic Plan is the guiding document that lays the foundation for meeting current and future community needs, integrates the Biennial Operating and Capital Improvement Budgets, and subsequently drives daily operations within the City of Arvada .

Committed Fund Balance: These are amounts constrained to specific purposes by a government itself, using its highest level of decision making authority . To be reported as committed, amounts cannot be used for any other purpose unless the government takes the same highest-level action to remove or change the restraint .

Consumer Price Index (CPI): A statistical description of price levels provided by the U .S . Department of Labor . The index is used to measure the increase in the cost of living (economic inflation) .

Coronavirus Aid, Relief, and Economic Security Act (CARES): Also known as the CARES Act is a $2 .2 trillion economic stimulus bill passed by the 116th U .S . Congress and signed into law by President Donald Trump on March 27, 2020, in response to the economic fallout of the COVID-19 pandemic in the United States .

Debt Service: Debt Service is the principal and interest payments on outstanding bonds .

Depreciation: Expiration in the service life of capital equipment attributable to wear and tear, deterioration, action of the physical elements, inadequacy or obsolescence .

Emergency Reserve: The Emergency Reserve is a term used in TABOR .TABOR requires Arvada to maintain 3% of total fiscal year spending as an emergency reserve .

Encumbrance: An encumbrance is the formal accounting recognition of commitments to expend resources in the future .

Enterprise Fund: An enterprise fund is a separate set of financial records used for operations which are financed and operated in a manner similar to a private business enterprise . City enterprise funds are set up in order to pay ongoing costs of a program using ongoing revenues and fees generated by the program such as Arvada’s utility service .

Fiscal Year: A fiscal year is the one year period designated by the city for the beginning and ending of financial transactions . This is the period covered by the budget and the financial report . The city’s fiscal year begins January 1 and ends December 31 .

FOCUS: This is the name given to the City of Arvada’s system of performance based budgeting and the practice of developing budgets based on the relationship between program funding levels and expected outcomes from that program .

Full Time Equivalent Position (FTE): A position converted to the decimal equivalent of a full-time position based on 2,080 hours per year . For example, a part-time typist working for 20 hours per week would be equivalent to .5 of a full-time equivalent .

Full Faith and Credit: A pledge of the government’s taxing power to repay debt obligations .

Fund: A fund is a fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources, related liabilities and residual balances .

Fund Balance: A fund balance is the difference between total assets and total liabilities for a fund .

GASB: GASB is the Governmental Accounting Standards Board, which is the source of generally accepted accounting principles for public-sector entities like the City of Arvada .

General Obligation (G.O.) Bond: This type of bond is backed by the full faith, credit and taxing power of the city .

General Fund: A general purpose fund supported by taxes, fees and other revenues which may be used for any lawful purpose . This fund accounts for all financial resources except those required to be accounted for in another fund .

Goal: A goal is a statement of broad direction, purpose or intention based on the needs of the community . A goal is general and timeless; that is, it is not concerned with a specific achievement in a given time period .

Government Finance Officers Association (GFOA): An organization founded in 1906 that represents public finance officials throughout the United States and Canada .

Infrastructure: Infrastructures are facilities on which the continuance and growth of a community depend such as a road, water lines, sewer lines, public buildings, and parks . Infrastructure assets are immovable and of value only to the government .

Internal Service Fund: This fund accounts for the financing of goods or services provided by one department or agency to other departments or agencies of the governmental unit . An example is the insurance fund .

Liability: An obligation to pay an amount in money, goods, or services to another party .

Line of Business: A grouping of Programs with similar common purposes .Local Growth: Local growth is a term defined by TABOR . Local growth is the net percentage change in actual value of all real property .

Maintenance and Operation Costs: The day to day operation and maintenance costs of a municipality include such things as gas and electric utility bills, telephone expense, reproduction costs, postage and vehicle maintenance .

Milestone: A significant event or important achievement that indicates change or progress toward a strategic result . Milestones signal anchors and serve as visible indicators of progress toward achievement of a strategic result .

Mill: Property tax rates that are based on the valuation of property are measured in units called mills . A tax rate of one mill produces one dollar of taxes on each $1,000 of assessed property valuation .

Modified Accrual: Modified accrual is a basis of accounting where revenues are recognized in the accounting period in which they become available and measurable, and expenditures are recognized in the accounting period when the liability is incurred, if measurable .

Non-spendable Fund Balance: These are amounts that are not in a spendable form (such as inventory) or are required to be maintained intact (such as the corpus of an endowment fund) .

Operating Budget: An operating budget contains the day-to-day costs of delivering city services . The operating budget is the spending plan for the entity .

Operating Revenue: Funds that the government receives as income to pay for ongoing operations . It includes such items as taxes, fees from specific services, interest earnings and grant revenues . Operating revenues are used to pay for day-to-day services .

Operating Expenditures: The cost for personnel, materials and equipment required for a department to function .

Performance Measure: Using smart goal framework, performance measures are specific, measurable, achiveable, realistic and timely . Performance measures help focus efforts and ability to achieve targets . All strategic performance measures are directly aligned with a strategic result and all operational performance measures align with one or more principles .

Personnel Expenditures: Expenditures for salaries, wages and fringe benefits for employees .

Principle: Principles are high-level business strategies that form our business model and serve as pillars of excellence . They are broad in scope and apply to all areas within the City organization and provide standards for how we do business in order to successfully support City Council priorities . They promote working collaboratively in a deliberate strategic direction

Program: A subdivision within a department within which revenues and expenditures are organized around benefits experienced by consumers of the program’s services .

Reserve: A reserve is a portion of the fund balance that is not available for appropriation or expenditure .

Resolution: A resolution is a formal statement of a decision or expression of opinion put before or adopted by the city council .

Restricted Fund Balance: These are amounts constrained to specific purposes by their providers (such as grantors, bondholders, and higher levels of government), through constitutional provisions or enabling legislation .

Revenue Bond: This is a type of bond that is backed only by a particular source of revenue, such as water sales, road tolls, and sales taxes .

Strategic Result: A specific and measurable objective directed by City Council providing guidance in supporting priorites and organizational transformation . Strategic resutls are a statement of a desired end-state and are measurable and explicity defined using outcome language . They provide guidance to organizational transformation .

STRAT OP: A strategic planning framework and process emphasizing perspective first helps us close the gap between City Council’s vision and our day to day work .

Supplemental Appropriation: An additional appropriation made by the governing body after the budget year has started .

TABOR: TABOR (Taxpayer Bill of Rights, Article X, and Section 20 of the Colorado Constitution) is an amendment to Colorado’s State Constitution passed by election in 1992 that imposes revenue limitations for governments .

TABOR Caps: TABOR caps are the limits placed each year on how much money cities can receive . The caps are calculated on a yearly basis and are dependent upon local growth plus inflation .

Taking Lasting Care (TLC): Taking Lasting Care is one of the key components of the City’s Capital Improvement Plan and focuses on reinvestment of resources to existing infrastructure .

Taxes: Taxes are compulsory charges levied by a government for the purpose of financing services performed for the common benefit of the people . This term does not include specific charges made against particular persons or property for current or permanent benefit, such as special assessments .

Tax Levy: A tax levy is the total amount to be raised by general property taxes as measured by mills . A mill equals $1,000 of assessed valuation .

Transfer: A transfer is expenditure from one fund for the benefit of a receiving fund .

User Charges: The payment of a fee for direct receipt of a public service by the party benefiting from the service is a user charge .

Working Capital: The difference between the current assets and current liabilities in a fund . In other words, working capital is the amount of money available to pay for current operations .