Budget Dictionary

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Ad Valorem Tax search for term

A tax based on value. Property taxes in the Municipality are an ad valorem tax. Taxpayers pay set rate per dollar of assessed value of taxable property.

Allocated Revenues search for term

Revenues received or earned by the Municipality which are not attributed to a particular department, program or service. Examples are state revenue sharing and interest earned on cash investments. These revenues are distributed to funds (for service areas) and not to specific programs. The method of allocation varies, depending on the type of revenue.

Allowed Budget search for term

Amount the total budget can be without exceeding the tax limitation. Calculated by adding the amount of taxes allowed under the tax limitation and other anticipated revenues (programs and allocated revenues and intra-governmental charges to non-tax-supported units such as grants and utilities).

Amendment search for term

A change to a budget that is made after the budget has been proposed.

Anchorage Charter search for term

The governing document that created the Municipality of Anchorage as a home rule government. The charter was adopted in 1975 and may be amended only by a majority of those voting on the approved amendment.

Appropriation search for term

An authorization by the Assembly to make expenditures. The Assembly makes appropriations in the operating budget for each department’s direct cost and each fund’s function cost. Appropriations lapse at the end of the fiscal year.

Approved Budget search for term

Budget approved by the Assembly in November/December of each year that goes into effect on January 1st. This version includes amendments approved by the Assembly to the budget that was originally proposed by the Mayor in October.

Areawide Services search for term

Services provided throughout the entire Municipality. Examples are education, planning and zoning, library, health and transit.

Assessed Valuation search for term

The value of real estate and other taxable property established by the Municipality as a basis for levying taxes. By State law, all taxable property must be assessed annually at 100% of market value.

Average Mill Rate search for term

The average tax rate (mill levy) computed by:

Total Property ÷ Total Areawide x 1,000 = Average
Tax Required Assessed Mill Rate

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Balanced Budget search for term

A budget in which sufficient revenues are available to fund anticipated expenditures.

Bond Rating search for term

An indicator of the credit worthiness of the Municipality (the same as credit ratings for individuals). Ratings are assigned by credit rating agencies such as Moody’s Standard & Poor’s (S&P), and Fitch Ratings at the time the Municipality will be issuing (selling) a bond. A high rating indicates a high quality bond, which means lower interest rates that the Municipality will have to pay. The Municipality has earned high ratings: AA Stable from S&P; AA+ Stable from Fitch.

Bonds search for term

A financial instrument, similar to a loan, by which the Municipality borrows money for a specified purpose that it then repays plus interest over time.

Budget search for term

A document that lays out a plan for financial operation for the Municipality based on estimates of proposed expenditures and revenue for the upcoming fiscal year. It also is a controlling document by setting the upper limit for the amount that can be spent by a department.

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CAFR search for term

The Comprehensive Annual Financial Report (CAFRi) is a set of government financial statements that comprise the financial report of the Municipality and its compliance with accounting requirements (Generally Accepted Accounting Principles, or GAAP). The information is compiled by municipal staff and audited by an external accountant.

Capital Improvement Budget (CIB) search for term

A plan for capital expenditures and the means to finance them. Capital projects are improvements to the Municipality’s assets—from buildings to parks to streets to drainage. The CIB is a one-year plan (compared to the six-year CIP). Funding for capital projects primarily comes from State of Alaska grants and voter-approved local. The CIB is submitted to the Assembly for its approval.

Capital Improvement Plan (CIP) search for term

A longer-range plan for capital improvement projects and proposed sources of funding for the next six years.

Charter search for term

The governing document that created the Municipality of Anchorage as a home rule government. The charter was adopted in 1975 and may be amended only by a majority of those voting on the approved amendment.

Code search for term

Local laws by which the Municipal Charter is interpreted and implemented. The code is approved by the Assembly and may also be revised by an ordinance. Passage of a code or code change requires approval by at least six (out of eleven members) of the Assembly.

Continuation Level search for term

Projection of what it would cost in the budget year to continue existing programs and services at the same level of activity.

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Debt Service search for term

Principal and interest payments on debt incurred (bonds sold) by the Municipality.

Direct Costs search for term

Salaries and other personnel expenses, supplies, contracts and other purchased services, debt service, machinery and other capital expenses (basically a department’s operating budget). The Assembly appropriates a department's direct costs for the fiscal year.

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Employee Benefits search for term

The cost for contribution to employee retirement, social security, health, and workers’ compensation programs.

Enterprise Activities search for term

An enterprise charges external users for goods or services they receive. The Municipality has three enterprises: Merrill Field, the Port of Anchorage, and Solid Waste Services. Budgets for these organizations is not included in General Government’s operating budget; they are budgeted separately.

Expense search for term

General government expenses include salaries, wages, supplies, contracts, debt service, and purchases of machinery and equipment.

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Federal Revenue search for term

This is a category of revenue that helps pay for government services. The Municipality only gets about $1 million each year, which is about 0.2 percent of revenue. This amount does not include Federal funds received as a grant for a specific program or service.

Fees search for term

A charge to cover the cost of a service (i.e. building inspection fee, zoning fee, etc.).

First Quarter Budget Amendments search for term

A process in April of each year during which the current year spending and revenues are finalized. Based on these final numbers, mill levies are calculated upon which property tax bills are based.

Fiscal Year search for term

An accounting term for the budget year. The fiscal year of the Municipality is January through December 31.

Function Cost search for term

The appropriation level for funds (or service areas). Function cost is calculated as follows: Direct + Intragovernmental - Intragovernmental = Function Costi.  The function cost of a particular fund is the sum of the function costs of all budget units assigned to the fund. The Assembly appropriates a fund's function costs for the fiscal year.

Fund search for term

An accounting entity designed to separately track the expenses and revenues of a particular program or service. Funds are classified according to type: general, enterprise, debt service, etc. The expenses and revenues are accounted for according to generally accepted accounting principles. Each service area established in the Municipality is assigned a unique fund number and name.

Fund Balance search for term

The unused balance of governmental funds, which includes certain set asides of funds established for certain purposes (see Reserves)

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General Obligation Bonds search for term

A category of bonds in which the Municipality pledges that it will ensure the debt is repaid. Voter approval is required to incur this debt. General Obligation, bonds appear on a general election ballot and require approval by a majority of those voting in that service area. The debt is repaid over time by property tax payers in that service area.

Grant search for term

Cash given by the Federal or State government to the Municipality for a specified purpose and time period.

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Inflation search for term

A change in the general level of prices of goods and services in an economy over a period of time. When the general price level rises, each dollar buys fewer goods and services. As a result, inflation also reflects an erosion in purchasing power. A primary measure of inflation is the inflation rate, the annualized percentage change in the Consumer Price Index over time.

Infrastructure search for term

Long-lived assets such as highways, bridges, buildings, and public utilities.

Interest and Other Earnings search for term

A category of revenue that primarily includes interest earnings on investments [i.e. the Municipality’s Trust Fundi (created with the earnings from the sale of the Anchorage Telephone Utility); management of pools cash and other dividend income].

Intragovernmental Charge (IGC) search for term

The charge for a service that one budget unit (servicer) provides to another (requester). Charges to other budget units are counted as revenues; charges from others are counted as expenses.

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Mandated Increase search for term

Budget increase required to meet Federal, State, or Municipal legally mandated services or programs.

Mayor’s Veto search for term

The Charteri gives Anchorage’s Mayor the authority to stop an action approved by the Assembly. A mayor can stop (veto) an ordinance (code change) from being enacted. Anchorage’s Mayor also has “line-item” veto authority, which enables the Mayor to reduce the dollar amount approved in a budget. Eight (out of eleven) members of the Assembly then can override a mayor’s veto, thereby allowing the ordinance to become law.

MESA or MUSA search for term

Municipally-owned utilities (AWWU, ML&P) and enterprises (Port, Merrill Field, Solid Waste Services) do not pay property taxes. Municipal Enterprise Service Assessment (MESA) or Municipal Utility Service Assessment (MUSA) is a payment similar to a property tax that is assessed on these entities.

Mill Levy or Rate search for term

A rate of tax to be assessed on all taxable property. Rates are expressed in terms of $1 of tax per $1,000 of assessed value. Mill Levy is computed as follows: Property Taxi Total Assessed Required in a ÷ Value of Taxable x 1,000 = Mill Levy Service Areai Property in the Service Area.

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Net Program Cost search for term

The amount required to support a program that is not completely funded by revenues earned by the program. Net program cost must be funded by allocated revenues or property taxes. It is computed as follows: Direct + Intragovernmental -Intragovernmental – Program Cost Charges From Charges to Revenuesi = Net Program Costii

Non-Property Taxes search for term

A category of revenue that helps pay for city services. It consists of all taxes other than property taxes: automobile registration, aircraft registration, room, and motor vehicle rental.

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Operating Budget search for term

The funding allotted to departments to pay for the day-to-day operations of municipal services. This does not include funding for capital projects.

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Program Revenue or Program-Generated Revenue search for term

Revenues earned by a program, including fees for service, license and permit fees, and fines.

Property Tax search for term

Total amount of revenue to be raised by levying taxes on real and personal property. Property tax is computed as follows: Net Program Costs Allocated Revenuesiii Property Taxiii for all Budgeti - Assigned to the = Required for Units in a Fundi and Fund the Fund to Particular Fund Balancei Meet the Budget.

Proposed Budget search for term

The budget for the upcoming year submitted by the mayor to the Assembly for its consideration, amendment, and approval. The Assembly conducts two public hearings on the proposed budget at which the public can testify. The Mayor is required to submit the proposed budget by October 1 of each year for the fiscal year that starts on January 1.

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Reserves search for term

Amounts of revenue set aside for a specific purpose. One major reserve protects the Municipality’s high bond rating. About $26 million (8.25% of revenue) is set aside to assure those that purchase a bond will get re-paid. This assurance results in the Municipality paying a lower interest rate. Another $6 to $9 million (1 to 3% of revenue) is set aside in a second reserve for emergencies.

Resources search for term

The personnel and financial requirements of each program. Personnel resources are stated in terms of full time, part-time and temporary positions. Financial resources are stated in terms of five major expense categories (personal services, supplies, other services, debt services and capital outlay).

Revenues search for term

Various sources of money that pay for expenditures approved in the budget. Major categories of revenue are: federal; state; property and non-property taxes; interest earnings; and program-generated revenues (fees and fines).

Revised Budget search for term

The budget approved in April by the Assembly after first quarter budget amendments.

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Service Area search for term

A legal entity that funds particular governmental services. Service areas are created, altered or abolished only with the approval of a majority of those voting on the question within the affected area. Services in a specific service area are paid for from taxes on property within that area (after all other available revenue is put toward the cost of that service). Areawide services (i.e. education, emergency services) are provided to, and paid for by, taxpayers throughout the Municipality. Other services are limited to smaller geographic areas. Examples of service areas are: Chugiak Fire Service Areai (SA), Anchorage Metropolitan Police Service Area, Anchorage Roads and Drainage Service Area (ARDSA), Girdwood Valley Service Area and Glen Alps Limited Road Service Area (LRSA).

Spending Limitation search for term

Anchorage Municipal Code Section 6.10.037 established a spending limitation on general government tax-supported services. It generally limits per capita expenditure increases to the amount of inflation (as measures by the Anchorage consumer price index) and expenditures required to provide voter and legally mandated services.

State Revenue search for term

A category of revenue that comes from the State of Alaska that helps pay for the operating budget. The primary program is a form of revenue sharing that provide general assistance to support municipal programs (it doesn’t have a specified purpose). The Municipality also receives grants from the state that are for specified programs.

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Tax Limitation or Tax Cap search for term

A charter amendment passed by the voters of Anchorage in October 1983 that sets an upper limit on the amount of taxes the Municipality amount levied in the previous year, increased by the five year average rate of inflation and population growth. Exceptions to the limit are taxes allowed for payment of debt service , voter approved services, and judgments against the Municipality.

Tax Requirement search for term

The amount of property tax allowed and necessary to fund the budget.

Tax-supported search for term

A term used to indicate programs or funds that require as a source of revenue. Programs or funds that are not tax-supported earn sufficient program revenues, allocated revenues and/or intragovernmental charge revenues in order to balance their budgets.

Taxes search for term

Cumpulsory charges levied by a government for the purpose of financing services performed for the common benefit. Taxesi levied in Anchorage are approved by the Assembly.

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Utilities search for term

The municipality owns two utilities: Anchorage Water and Wastewater Utility (AWWU) and Municipal Light and Power (ML&P). Each entity submits its own budget which is separate and distinct from general government.

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Vacancy Savings search for term

A percentage or dollar amount of salaries which can be expected to be unspent during the fiscal year due to vacancies and employees receiving less than the top-step pay of a position’s classification.

Veto search for term

The Charteri gives Anchorage’s Mayor the authority to stop an action approved by the Assembly. A mayor can stop (veto) an ordinance (code change) from being enacted. Anchorage’s Mayor also has “line-item” veto authority, which enables the Mayor to reduce the dollar amount approved in a budget. Eight (out of eleven) members of the Assembly then can override a mayor’s veto, thereby allowing the ordinance to become law.

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