FY 2425 2526 Recommended Operating Budget

Glossary (continued)

Bond Debt (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 Document The official document prepared by the Finance and supporting staff which presents the proposed budget to the City Council. Budget (Operating) A plan of financial operation listing an estimate of proposed expenditures (appropriations) for a two - year period and the proposed means of financing them (revenue estimates). 1. Under ‘ modified accrual ” amounts are recognized as revenue when earned, only so long as they are collectible within the period or soon enough afterwards to be used to pay liabilities of the current period. 2. Encumbrances outstanding at year - end are reappropriated in the next year and reported as reservations of fund balance. Budget Calendar The schedule of key dates or milestones which the City follows in the preparation and adoption of the budget. Budget Transmittal/Message A discussion of the proposed budget presented by the City Manager in writing as a part of, or supplement to, the budget document. The budget message, also referred to as the Transmittal Letter, explains principal budget issues against the background of financial experience in recent years and presents recommendations made. CAL FIRE The City of Morgan Hill contracts with the California Department of Forestry and Fire Protection (CAL FIRE) to provide the following services: emergency medical services and fire prevention and suppression. Budgetary Basis of Accounting Morgan Hill budgets using the modified accrual basis plus encumbrances.

GENERAL INFORMATION 65