Glossary of Terms

Accrual Basis - A basis of accounting in which transactions are recognized at the time incurred, as opposed to when cash is received or spent. Agency Funds – These funds are custodial in nature (assets equal liabilities) and do not involve measurement of the results of operation. Appropriation - A legal authorization to incur obligations and to make expenditures for specific purposes. Arbitrage – The difference between the interest paid on tax-exempt securities and the interest earned by investing the security proceeds in higher-yielding taxable securities. IRS regulations govern arbitrage on the proceeds from issuance of municipal securities. Assessed Value - The value of real estate determined by the City Assessor as a basis for levying real estate taxes. Asset - Resources owned or held by the City that has monetary value. Assessment Ratio – the application of a percentage to the total assessed value of personal property as prescribed by the Code of Virginia. Authorized Positions - Employee positions authorized in the adopted budget to be filled during the year. Aviation Facilities Fund – This fund accounts for the revenues and expenditures related to the City’s airport. Balanced Budget – A budget in which current revenues equal current expenditures in accordance with the Code of Virginia. Bond Proceeds – The money paid to the City through the sale of bonds. Bond Rating – A measure of creditworthiness which indicates the City’s ability to meet its financial obligations. Budget - A plan of financial activity for a specified period of time (fiscal year or biennium) indicating all planned revenues and expenses for the budget period. Budgetary Basis - The basis of accounting used to estimate financing sources and uses in the budget. This generally takes one of three forms: GAAP, cash, or modified accrual. Budget Calendar – A timetable showing when particular tasks must be completed in order for the council to approve the spending plan before the beginning of the next fiscal year. Capital Cash Contribution – A payment toward the financing of a project with existing cash flow. Capital Budget - The appropriation of bonds or operating revenue for improvements to facilities and other infrastructure. Capital Improvements Plan - A plan for capital outlay to be incurred each year over a fixed number of years to meet capital needs arising from the City’s long-term needs. Capital Project - Major construction, acquisition, or renovation activities which add value to the City’s physical assets or significantly increase their useful life.

Capital Projects Fund – The fund used to account for financial resources to be used for the acquisition or construction of major capital facilities. Capitalized Interest – A portion of the proceeds of a bond issue set aside to pay interest on the same bond issue for a specific period of time. Interest is commonly capitalized for the construction period of the project. Cash Basis - A basis of accounting in which transactions are recognized only when cash is increased or decreased. Cash Match - The amount of local funding that is required to support an activity, project, program, or service that is funded in part by State or Federal aid or a private funding source. Categorical Aid – Funding support from State or Federal governments that is targeted for particular categories of the population, programs and services, or for special purposes. Compensation Study – A study commissioned by the City to review pay grades and position salaries and provide recommendations to address salary compression and bring individual position salaries commensurate with the market average. Comprehensive Annual Financial Report – A complete set of the City’s financial statements presented in conformity with accounting principles general accepted in the United States of America (GAAP) and audited in accordance with Government Auditing Standards by a firm of licensed certified public accountants.

Children’s Services Act – State legislation adopted in 1995 by the Virginia General Assembly to provide a collaborative system of services and funding for at-risk youth and their families. The City administers Comprehensive Services Act (CSA) funds through the Department of Social Services. Community Development Block Grant – A Federal grant which funds local community development activities such as affordable housing, blight removal, infrastructure development, and other public services (e.g. community health, homelessness, poverty) which aim to improve the lives of low income persons and families. Consolidated Grants Fund – The funds accounts for revenues and expenditures involving governmental grant programs. Contingency - A budgetary reserve set aside for emergencies or unforeseen expenditures not otherwise budgeted. Contractual Services - Services rendered to a government by private firms, individuals, or other governmental agencies. Examples include utilities, rent, maintenance agreements, and professional consulting services. Coronavirus – a type of virus that has spread across the world resulting in a global pandemic and economic impacts. Cost-of-Living Adjustment - An increase in salaries to offset the adverse effect of inflation on compensation. Cost Share – The allocation of expenses between two or more government entities. Debt Service - The cost of paying principal and interest on borrowed funds through instruments such as bonds.

Debt Service Fund – The fund used to account for the accumulation of resources for, and the payment of, general long-term debt principle, interest, and related costs. Deficit - The excess of an entity’s liabilities over its assets or the excess of expenditures or expenses over revenues during a single accounting period. Derivative – A financial product whose value is derived from some underlying asset value. Department - The basic organizational unit of the City which is functionally unique in its delivery of services. Depreciation - Expiration in the service life of capital assets attributable to wear and tear, deterioration, action of the physical elements, inadequacy or obsolescence. Destination Marketing Organization – The City’s tourism division which promotes Suffolk as a travel destination. Downtown Business Overlay Taxing District Fund – The fund accounts for the revenues and expenditures related to services provided in the Downtown Business Overlay District. Revenues are derived from a specific percentage of annual real estate tax assessments in the Downtown Business Overlay District. Effective Rate Increase – The difference between the real estate tax rate proposed/adopted and the tax rate that would cause the rate of levy to produce no more than 101 percent of the previous year’s real property tax levies as defined by Section 58.1-3321 of the Code of Virginia. Employee (or Fringe) Benefits - Contributions that are made to meet commitments or obligations for employee fringe benefits. Included are the City’s share of costs for Social Security, the Virginia Retirement System, medical, and life insurance plans. Encumbrance - The commitment of appropriated funds to purchase an item or service. To encumber funds means to set aside or commit funds for a specified future expenditure. Enterprise Funds – These funds account for costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. The City of Suffolk has the following enterprise funds: Public Utilities Fund, Refuse Fund, and Stormwater Fund. Equivalent Residential Unit – A measure of the amount of service or impact to the water and sewer utility system that would be required from a typical residence. Expenditure - The payment of cash on the transfer of property or services for the purpose of acquiring an asset, or service or settling a loss. Expense - Charges incurred (whether paid immediately or unpaid) for operations, maintenance interest or other charges. Fee Schedule – The collection of all fees charged by the City for various services. Fiduciary Funds – Funds used to account for assets held by the City as an agent for individuals, private organizations, and other governments. Fiscal Policy – The City’s policies with respect to revenues, spending, and debt management as these relate to government services, programs, and capital investment. Fiscal policy provides an agreed-upon set of principles for the planning and programming of government budgets and their funding.

Fiscal Year - A twelve-month period designated as the operating year for accounting and budgeting purposes in an organization. The City’s fiscal year begins July 1, and ends the following June 30. Fixed Assets - Assets of long-term character that are intended to continue to be held or used, such as land, buildings, machinery, furniture, and other equipment. Fleet Management Fund – The fund accounts for the financing of vehicles and the related maintenance, repairs and fuel costs of the City and allocates operating costs to the various departments or agencies using the equipment. Full Faith and Credit - A pledge of a government’s taxing power to repay debt obligations. Full-time Equivalent Position – The number of hours per year that a full-time employee is expected to work, usually 2080 hours. If there are two workers, each of whom works half that number of hours per year, the two workers together equal one full-time equivalent. Fund - A fiscal entity with revenues and expenses which are segregated for the purpose of carrying out a specific purpose or activity. Fund Balance - The excess of the assets of a fund over its liabilities. Fund Transfer - The movement of money between funds of the same governmental entity. Generally Accepted Accounting Principles - Uniform minimum standards for financial accounting and recording, encompassing the conventions, rules, and procedures that define accepted accounting principles. General Fund – The primary operating fund of the City. This fund is used to account for all financial transactions and resources except those required to be accounted for in another fund. General Operating Budget – The primary operating fund of the City which accounts for most tax funded functions such as general government, police and fire protection, parks and recreation, planning and community development, etc. General Obligation Bond - A bond that is backed by the full faith and credit of the government to repay the debt. Governmental Accounting Standards Board - A non-governmental organization which serves as the source of generally accepted accounting principles used by state and local governments. Governmental Funds – Funds through which most governmental functions of the City are financed. The three major funds used are General Fund, Capital Projects Fund, and Debt Service Fund. Grants - A contribution by a government or other organization to support a particular function. Grants may be classified as either operational or capital, depending upon the grantor. Hampton Roads Transit – A regional transit service in the Hampton Roads area. HOME Investment Partnership Grant – A Federal grant designed to expand the supply of affordable and decent housing for low income persons and families. Information Technology Fund – The fund accounts for the City’s technology infrastructure and allocates costs to the various departments or agencies using the service. Infrastructure - The physical assets of the City (e.g., street, water, sewer, public buildings, and parks).

Intergovernmental Revenue - Funds received from Federal, State and other local government sources in the form of grants, shared revenues, or payments in lieu of taxes. Internal Control - The control or management of a government in accordance with the approved budget for the purpose of keeping expenditures within the limitation of available appropriations and resources. Internal Service Funds – These funds account for the financing of goods or services provided by one department to other departments or agencies of the City on a cost-reimbursement basis. The Internal Service funds for the City include Information Technology, Fleet Management, and Risk Management. Law Library Fund – The fund accounts for revenues and expenditures involving governmental grant programs. Levy - Imposition of taxes for the support of City activities. Line-item Budget - A budget prepared along departmental lines that focuses on what is to be bought. Line of Duty Act – The Virginia Retirement System Line of Duty Act (LODA) provides benefits to public safety first responders and their survivors who lose their life or become disabled in the line of duty. Long-term Debt - Debt with a maturity of more than one year after the date of issuance. Modified Accrual Basis - A basis of accounting where revenue is recorded when measurable and available, and expenditures are recorded when made. Non-Categorical Aid - Revenue from the State or Federal government that may be spent at the local government’s discretion. Objective - Something to be accomplished in specific, well-defined, and measurable terms and that is achievable within a specific time frame. Obligations - Amounts which the City legally may be required to meet out of its resources. They include not only actual liabilities, but also encumbrances not yet paid. Operating Expenses - The cost for personnel, materials, and equipment required for a department to function. Operating Revenue - Funds that the City 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. Other Post Employment Benefits – An accounting and financial reporting provision of the Governmental Accounting Standards Board (GASB) requiring government employers to measure and report the liabilities associated with other (than pension) postemployment benefits (or OPEB) such as post-retirement medical, pharmacy, dental, vision, life, long-term disability and long-term care benefits that are not associated with a pension plan. Outsource - The practice of contracting out a service to a private entity. Pay-as-you-go Basis - A term used to describe a financial policy by which capital outlays are financed from current revenues rather than through borrowing. Performance Measure - Indicators that show the amount of work that is accomplished, the efficiency with which tasks were completed, and the effectiveness of a program.

Program - A group of related activities performed by one or more organizational units for the purpose of accomplishing a function for which the government is responsible. Proprietary Funds – Funds used to account for all assets, liabilities, equities, revenues, expenses, and transfer relating to the primary government’s business activities. The City maintains two different types of proprietary funds including 1) enterprise funds (public utilities, refuse, and stormwater) and 2) internal service funds (fleet, information technology, and risk management). Public Safety Answering Point – The emergency communications center that receives and processes 911 calls for the City. Rating Agency – An agency which assesses the creditworthiness of bond issuers, such as the City of Suffolk, which issues bonds to assist in financing capital improvement projects. There are three primary rating agencies including Moody’s, Standard & Poor’s, and Fitch. Reassessment Impact - The effective change of the real estate tax burden as a result of the newly assessed value of real property. Refuse Fund – The fund accounts for the provision of solid waste disposal and recycling services to City residents, as well as landfill post closure requirements. Reserve - An account used either to set aside budgeted revenues that are not required for expenditure in the current budget year or to earmark revenues for a specific future purpose. Restricted Fund Balance – cash reserves that can only be spent for specific purposes as stipulated by granting agencies, constitutional provisions, or legislation. Revenue - Sources of income that finances the operations of city government. Revenue Anticipation Notes – A short-term loan that is repaid from a named revenue source. Risk Management Fund – The fund accounts for the funding and payment of auto, personal liability, general liability, health insurance, and worker’s compensation claims against the City exclusive of the School Board employees. Charges to other funds are based on estimated claims for the year. Risk Stabilization Reserve – Funding set aside in a special fund by the City for the payment of expenses associated with general liability, health insurance, and worker’s compensation. The City has established a financial policy to maintain a rate stabilization reserve in an amount equal to 20% of the anticipated annual premium costs. Road Maintenance Fund – This fund accounts for revenues and expenditures related to maintaining roads city wide. Revenues are derived from state and sale of service to other funds. Route 17 Taxing District Fund – The fund accounts for revenues and expenditures related to enhanced economic development related services provided in the Route 17 Taxing District. Most revenues are derived from a specific percentage of the annual real estate tax assessments in the Route 17 Taxing District. School Funds – These funds are used to account for the activities of the City of Suffolk Public School System. The funds include the School Operating Fund, the School Service Fund, and the School Grant Fund. Shortfall – The difference between the amount of funding required and the amount available. Special Revenue Funds – The funds that account for revenue derived from specific sources that are restricted by legal and regulatory provisions to finance specific activities. The special revenue funds used

by the City are Aviation Facilities Fund, Downtown Business Overlay District Fund, Road Maintenance Fund, Consolidated Grants Fund, Law Library Fund, Route 17 Taxing District Fund, and Transit System Fund. Special Taxing District – A specifically designated geographic area of the City, adopted by ordinance of the City Council, whereby an additional real estate tax is levied on real property owners, above the standard rate, for the provision of additional, more complete, or timely City services. The types of services that can be provided in a special taxing district are outlined in Section 15.2-2403 of the Code of Virginia and include, but are not limited to, beautification and landscaping, garbage disposal, and promotion of business and retail development services. Southeastern Public Service Authority - The organization that operates the regional landfill in southside Hampton Roads located in the City of Suffolk. Stormwater Utility Fund – The fund accounts for the maintenance and improvements to the City’s stormwater infrastructure. Tax Levy - The resultant product when the tax rate is multiplied by the tax base. Taxes - Charges levied by the City 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. Transit System Fund – The fund accounts for revenues and expenditures of the City’s transit system which includes six bus routes and ADA service. Revenues are derived from far collections, State and Federal grants, and transfer of funding support from the General Fund. Unassigned Fund Balance – The City’s “rainy day” fund or reserves which have accumulated via surplus General Fund revenues or unspent General Fund dollars from prior years. Unrestricted Fund Balance – The available cash reserves of an enterprise or internal service fund. User Charges - The payment of a fee for direct receipt of a public service by the party who benefits from the service. Utility Fund – The fund accounts for the provision of water and sewer services to City residents Virginia Regional Transit Authority – a nonprofit organization that the City contracts with to operate the Suffolk Transit bus service. Virginia Retirement System – The Commonwealth of Virginia’s retirement program for public employees.

ABBREVIATIONS

ADA – Americans with Disabilities Act ASE – Automotive Service Excellence BAN – Bond Anticipation Notes CAFR – Comprehensive Annual Financial Report CALEA – Commission on Accreditation for Law Enforcement CDBG – Community Development Block Grant CIP – Capital Improvements Program and Plan CIT – Crisis Intervention Team COLA – Cost-of-Living Adjustment COVID-19 – Coronavirus CSA – Children’s Services Act DBOD – Downtown Business Overlay Taxing District DMO – Destination Marketing Organization DMV – Department of Motor Vehicles EMS – Emergency Medical Service ERU – Equivalent Residential Unit FLSA – Fair Labor Standards Act FOIA – Freedom of Information Act FTE – Full-Time Equivalent FY – Fiscal Year GAAP – Generally Accepted Accounting Principles GASB – Governmental Accounting Standards Board GF – General Fund GFOA – Government Finance Officers Association GO – General Obligation HDHP – High Deductible Health Plan HOME – HOME Investment Partnerships Program HRPDC – Hampton Roads Planning District Commission HRSD – Hampton Roads Sanitation District HRT – Hampton Roads Transit HRTPO – Hampton Roads Transportation Planning Organization IFB – Invitation for Bid LOC – Letter of Credit LODA – Line of Duty Act MSRB – Municipal Securities Rulemaking Board OPEB – Other Post-Employment Benefits

OSHA – Occupational Safety and Health Administration PAY-GO – Pay-as-you-Go PPE – Personal Protective Equipment PSAP – Public Safety Answering Point PW – Public Works PU – Public Utilities RAN – Revenue Anticipation Notes RFP – Request for Proposal RFQ – Request for Qualifications RM – Road Maintenance RT 17 – Route 17 SPSA – Southeastern Public Service Authority SRHA – Suffolk Redevelopment and Housing Authority SW – Storm Water SWAM – Small, Women, and Minority Owned TANF – Temporary Assistance for Needy Families VDOT – Virginia Department of Transportation VEC – Virginia Employment Commission VRS – Virginia Retirement System VRT – Virginia Regional Transit VRPT – Virginia Department of Rail and Public Transportation WTCSB – Western Tidewater Community Services Board WTRJ – Western Tidewater Regional Jail

CITY of SUFFOLK

Department of Finance - Division of Budget & Strategic Planning 442 W. Washington St. Suffolk, Virginia 23434 (757) 514-4006 www.suffolkva.us