User Guide & Glossary

The basis of accounting under which revenues are recorded when earned and expenditures (or expenses) are recorded as soon as they result in liabilities for benefits received, notwithstanding that the receipt of cash or the payment of cash may take place, in whole or in part, in another accounting period.

The actuarial accrued liability, commonly used in pension fund discussions, generally represents the present value of fully projected benefits attributable to service credit that has been earned (or accrued) as of the valuation date; it is computed differently under different funding methods but is always assessed by an actuary.

The County’s year-end actual dollars for expenditures and revenues for a fiscal year. Also, it represents the year-end actual measures or results for operational performance data for a fiscal year.

The County’s annual budget as formally adopted by the Board of Supervisors for a specific fiscal year.

The annual audited financial statement of the County.

A legal authorization to make expenditures and to incur obligations for specific purposes.

Spending limits for the County are governed by Proposition 4 which places limits on spending from tax proceeds each year equal to the prior year's spending with upward adjustments allowed for changes in population and the cost of living.

A budgetary provision representing that portion of the financing requirements set aside to meet unforeseen expenditure requirements or to offset revenue shortfalls.

The American Rescue Plan Act of 2021, also called the COVID-19 Stimulus Package or American Rescue Plan, is a $1.9 trillion economic stimulus bill passed by the 117th United States Congress and signed into law by President Joe Biden on March 11, 2021.

A valuation set upon real estate or other property by a government as a basis for levying taxes.

Any levy or charge by the County upon real property that is based upon the special benefit conferred upon the real property.

An item owned or a resource held that has monetary value.

The portion of fund balance that reflects an intended use of resources. For non-general funds, it is the amount in excess of nonspendable, restricted and committed fund balance.

Any permanent position in the classified service that is required to be filled through certification, or by provisional appointment. A position may either be funded or unfunded.

The financial statement disclosing the assets, liabilities and equity of an entity at a specified date in conformity with Generally Accepted Accounting Principles (GAAP).

A budget in which the planned expenditures and the means of financing them are equal. A balanced annual budget is required by the State of California per Government Code §29000, et seq.

The term used to describe the timing of recognition, that is, when the effects of transactions or events should be recognized. The County’s governmental funds are required to use the modified accrual basis of accounting in GAAP financial statements.

Refers to the conversions for recognition of costs and revenue in budget development and in establishing and reporting appropriations, that are the legal authority to spend or collect revenues. Governmental funds use the modified accrual basis of accounting.

A written promise to pay a specified sum of money, called the face value or principal amount, at a specified date or dates in the future, called the maturity date(s), together with periodic interest at a specified rate. Sometimes, however, all or a substantial portion of the interest is included in the face value of the bond. The sale of bonds is one mechanism used to obtain long-term financing.

A financial plan for a single fiscal year that includes expenditures and the means of financing them. The County’s annual budget is voted upon by the Board of Supervisors.

Tangible and intangible assets acquired for use in operations that will benefit more than a single fiscal year. Typical examples of tangible assets are land, improvements to land, easements, buildings, building improvements, infrastructure, equipment, vehicles and machinery.

The Coronavirus Aid, Relief, and Economic Security Act, 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.

The analysis of cash receipts (revenues) to required payments (expenditures) and reporting of net cash balance projections. The Auditor-Controller prepares cash flow reports that project the inflow, outflow and net balance of cash on a monthly, quarterly and annual basis.

Certificates issued for the financing of capital assets. A certificate is similar to a bond and represents an undivided interest in the payments made by the public agency pursuant to a financing lease. Even though they are not treated as indebtedness of the issuer by California state law, the federal tax law treats the lease obligation as if it were a debt.

A summary classification (or “roll-up” account) of expenditures and revenues based on type of goods or services (Salaries & Benefits, Services & Supplies, Other Charges, Fixed Assets, etc.) or by type of revenue (Fines & Assessments, Taxes, Intergovernmental Revenue, etc.).

Revenues received as a result of fees charged for certain services provided to residents and other public agencies. This group of revenue accounts includes revenues resulting from: collection of taxes and special assessments and accounting and banking services for other governmental agencies; special district audits; election services provided to governmental agencies under contract, including charges for consolidating elections and rental of voting booths; planning and engineering services such as subdivision fees, traffic surveys, sale of plans and specifications and blueprints, and plan or map check fees; park and recreational facilities usage including camping, parking and picnic area usage; document recording services, certified copies of vital statistics and fees for filing fictitious business names; animal services such as vaccination and impound fees; law enforcement services provided under contract to governmental agencies.

Self-imposed limitations set on funds prior to the end of an accounting period. These limitations are imposed by the highest level of decision-making (i.e. the Board of Supervisors), and require formal action at that same level to remove.

Authorizes local governments to create CFDs for the purpose of financing facilities and certain services and issuing bonds to fund public improvements. Property owners within a CFD pay a 'special tax' to repay the bonds.

Appropriations set aside to meet unforeseen economic and operational circumstances.

The transfer of costs for services performed by one budget unit for the benefit of another budget unit within the same fund.

An assessment district comprised of property owners in the unincorporated area who pay for special services, such as road or park maintenance, fire suppression and paramedic services, through special assessments on their property tax bills.

A rating determined by a credit rating agency that indicates the agency's opinion of the likelihood that a borrower such as the County will be able to repay its debt. The three major municipal credit rating agencies include Standard & Poor's, Fitch and Moody's.

Assets which are available or can be made readily available to finance current operations or to pay current liabilities. Those assets that will be used up or converted into cash within one year (i.e. temporary investments and taxes receivable that will be collected within one year).

Liabilities that are payable within one year. Liabilities are obligations to transfer assets (i.e. cash) or provide services to other entities in the future as a result of past transactions or events.

Annual principal and interest payments that a local government owes on borrowed money.

A fund established to account for the accumulation of resources, for the payment of principal and interest on long-term debt.

Measurable revenue that has been earned but not yet collected until beyond 180 days from the end of the fiscal year.

The basic organizational unit of government which is functionally unique in its delivery of services.

A specific departmental output, action, that works towards strategic plan goals and countywide strategies. Objectives are Specific, Measurable, Attainable, Relevant and Time-bound (SMART).

The decrease in the service life or estimated value of capital assets attributable to wear and tear, deterioration and the passage of time.

Resources that are not legally restricted for certain uses and can be allocated based on Board priorities. This generally includes discretionary revenue (like property and sales taxes) and the General Fund's available fund balance.

Revenue from property tax, vehicle license fees, sales tax and certain other sources that is not legally restricted for particular uses. This is revenue that the Board of Supervisors can allocate as it wishes to fund local priorities. Discretionary revenue is accounted for in the County Financing area within the General County Revenues budge unit.

The portion of an employee compensation package that is in addition to wages. Included are the employer's share of costs for Social Security and various pension, medical and life insurance plans.

A commitment within the County to use funds for a specific purpose.

A fund established to account for operations that are financed and operated in a manner similar to private business enterprises (e.g. water, gas and electric utilities; airports; parking garages; or transit systems). The governing body intends that the costs of providing these goods and services to the general public on a continuing basis be financed or recovered primarily through user charges.

A program in which funding is allocated according to eligibility criteria; all persons or governments that meet the criteria specified by federal or State laws may receive the benefit.

A decrease in net financial resources. Expenditures include current operating expenses that require the present or future use of net current assets, debt service and capital outlays, intergovernmental grants, entitlements and shared revenues.

A fund containing assets held in a trustee capacity or as an agent for others which cannot be used to support the County's own programs. For example, the County maintains fiduciary funds for the assets of the Investment Trust Fund. This trust fund holds the investments on behalf of external entities in either the County investment pool or specific investments.

A group of revenue accounts that includes vehicle code fines, other court fines, forfeitures and penalties, and penalties and costs on delinquent taxes.

A 12-month period to which the annual operating budget applies and at the end of which a government determines its financial position and the results of its operations. The County of Santa Cruz’s fiscal year is July 1 through June 30.

Assets with a useful life extending beyond one year, that are purchased for long-term use and are not likely to be converted quickly into cash, such as land, buildings, and equipment. An item costing $5,000 or more is budgeted in the appropriate fixed asset account and capitalized.

FTE equals the number of total hours worked divided by the maximum number of compensable hours in a work year as defined by law. An FTE equates to 2,080 hours of employment, where 1.0 FTE means that the position is equivalent to a full-time worker, while an FTE of 0.5 signals that the position is half-time.

A fiscal and accounting entity with a self-balancing set of accounts in which cash and other financial resources, all related liabilities and equities or balances, and changes therein, are recorded and segregated to carry on specific activities or attain certain objectives in accordance with special regulations, restrictions or limitations.

The difference between fund assets and fund liabilities of governmental funds. Fund Balance may be used in the budget by a department for the upcoming fiscal year as a funding source for one-time projects/services.

The classifications that segregate fund balance by constraints on purposes for which amounts can be spent. There are five classifications: Nonspendable Fund Balance, Restricted Fund Balance, Committed Fund Balance, Assigned Fund Balance and Unassigned Fund Balance.

Any authorized position that the total cost is legally appropriated in the adopted budget before it can be filled.

Governmental Accounting Standards Board (GASB) Statement Number 54 which establishes a fund balance classification hierarchy based on constraints that govern how the funds can be used.

The County's primary operating fund, which is used to account for all financial resources, except those required to be accounted for in another fund.

Bonds backed by the full faith and credit of a governmental entity.

Revenue derived from sources not specific to any program or service delivery that may be used for any purpose that is a legal expenditure of County funds. Examples of General Purpose Revenue include property taxes, some sales taxes, property tax in lieu of vehicle license fees, court fines, real property transfer tax and miscellaneous other sources.

The total amount of General Fund Discretionary Revenue that is available to finance County operations, capital investments or reserves. This is generally used to subsidize County operations whose direct resources are insufficient to finance their total operating costs.

The uniform minimum standards and guidelines for financial accounting and reporting that govern the form and content of the financial statements of an entity. GAAP is a combination of authoritative standards set by policy boards such as the Governmental Accounting Standards Board (GASB), and the commonly accepted ways of recording and reporting accounting information.

A distinct reporting category in a ledger used for budgeting or accounting purposes. All budgetary transactions, whether revenue- or expenditure-related, are recorded in GL Keys.

The independent authoritative accounting and financial reporting standard- setting body for local government entities.

An organization comprised of government accounting and finance professionals throughout the United States and Canada, whose goals include but are not limited to improving financial management practices and encouraging excellence in financial reporting and budgeting by state and local governments.

The funds that are generally used to account for tax-supported activities; it accounts for the majority of funds, except for those categorized as proprietary or fiduciary funds.

Authorizes cities, counties and public districts which use other assessment acts to issue bonds.

The transfer of resources between funds of the same government reporting entity.

Revenue received from other government entities in the form of grants, entitlements, shared revenues and payments in lieu of taxes. Examples of State revenue include Health and Social Services Realignment, Proposition 172 Public Safety Sales Tax, highway user tax, in-lieu taxes, public assistance administration, health administration and Homeowner’s Property Tax Relief. Major federal revenue includes public assistance programs, health administration, disaster relief, and Payments In-lieu of Taxes for federal lands.

A proprietary-type fund used to account for the financing of goods or services provided by one department to other departments of the County, or to other governmental units, on a cost-reimbursement basis.

The transfer of resources between budget units, within the same fund (such as the General Fund), which show as an expenditure offset or reduction in the charging department’s budget.

A contractual agreement between a city, county and/or special district in which services are agreed to be performed, or the County agrees to cooperate with or lend its powers to another entity.

A contract granting use or occupation of property during a specified time for a specified payment.

A liability is a legal obligation of an entity to transfer assets or provide services to another entity in the future as a result of past transactions or events.

Revenue accounts that include revenue from animal licenses, business licenses, permits and franchises.

A fund in which one element (total assets, liabilities, revenues, or expenditures/expenses) is at least 10 percent of the corresponding element total for all funds of that category or type, and at least 5 percent of the corresponding element for all governmental and enterprise funds combined, as set forth in GASB Statement Number 34, Basic Financial Statements-and Management’s Discussion and Analysis-for State and Local Governments. By its nature, the General Fund of a government entity is always a major fund.

In 1982 Senator Henry Mello and Assemblyman Mike Roos affected the passage of the Community Facilities District Act of 1982.

A group of revenue accounts that includes other sales, tobacco settlement and other monetary donations from private agencies, persons or other sources.

The basis of accounting under which revenues are recognized when they become available and measurable and, with a few exceptions, expenditures are recognized when liabilities are incurred. A modified accrual accounting system can also divide available funds into separate entities within the organization to ensure the money is spent where it was intended.

Lets cities, counties and special districts levy benefit assessments for the construction and maintenance of public facilities including streets, sidewalks, sewer systems, drains, lighting, etc.

The amount of General Purpose Revenue that is budgeted to fund a department's services after all other funding sources for those services are taken into account; it is also referred to as "General Fund Contribution".

The portion of net resources that cannot be spent either because of its form or due to requirements that it must be maintained intact.

See Department Objective.

A plan of current expenditures and the recommended means of financing them. The annual operating budget is the primary means by which most of the financing, acquisition, spending and service delivery activities of a government are controlled.

Operating transfers result when one fund provides a service on behalf of another fund. The providing fund budgets the amount required by the other fund in the “Operating Transfer Out” expenditure account. The receiving fund budgets the amount in one of the “Operating Transfer In” revenue accounts.

A regulation, an authoritative rule, a statute.

A group of expenditure accounts that includes support and care of other persons (such as assistance payments), bond redemptions, interest on bonds, other long-term debt and notes and warrants, judgments and damages, rights-of-way, taxes and assessments, depreciation, bad debts, income allocation, contributions to non-county governmental agencies and inter fund expenditures.

An increase in current financial resources that is reported separately from revenues to avoid distorting revenue trends. Examples include sale of capital assets, operating transfers in and long-term debt proceeds.

A two-year policy plan consisting of strategies , objectives, and key steps.

PCI is a numerical index between 0 and 100 which is used to indicate the general condition of a pavement. Usually a PCI between 65-80 is considered adequate for local roads.

A quantitative indicator that programs or services are directly contributing to the achievement of a strategic plan. This includes indicators of inputs, output, outcomes, productivity, timeliness, and/or quality.

List of full-time equivalent (FTE) permanent positions by department. Details include classification (type of position) and range (hourly rate for the classification at entry level).

A set of activities directed to attaining specific purposes or objectives.

Revenue generated by programs and/or dedicated to offset a program's costs.

The budget document developed by the CAO and formally approved by the Board of Supervisors to serve as the basis for public hearings and deliberations prior to the determination of the adopted budget. May also be referred to as the Recommended Budget.

In a two-year budget, the Projected Budget is the second year projected estimates based on status quo operation and any know changes.

The classification used to account for a government's ongoing organizations and activities that are similar to those often found in the private sector (i.e., enterprise and internal service funds).

To include funds for a project or services budgeted in the previous fiscal year but not spent within that year nor meeting the criteria for an encumbrance at fiscal year-end.

See Proposed Budget.

The portion of fund balance subject to externally enforceable limitations on its use imposed by law, constitutional provision, or other regulation.

Revenue accounts that include investment income, rents and concessions and royalties.

A group of expenditure accounts that includes expenses related to compensation of County employees.

Operational units within a department aimed at accomplishing a major governmental purpose or supporting the Operational Plan.

A separate local government that delivers a limited number of services to a geographically limited area, such as water, electricity, or mosquito abatement. A special district might be composed of cities, townships, or counties, or any part or combination of these.

A fund used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes.

Requires approval by two-thirds of the qualified voters in the district and provides for a landowner election if less than 12 registered voters in the district.

A long-term vision that sets a course of action through overarching focus areas and specific goals and objectives. The County's Strategic Plan is called "Vision Santa Cruz County"

Defines the County’s approach to achieving its goals.

The agency responsible for managing the dissolution of a redevelopment agency as laid out in Assembly Bill x1 26 (2011), Community Redevelopment Dissolution. In most cases, the city or county that created the redevelopment agency has been designated as the successor agency. The County of Santa Cruz is the Successor Agency for the County of Santa Cruz Redevelopment Agency.

A short-term, interest bearing note used as a cash management tool. Public agencies often receive revenues on an uneven basis throughout a fiscal year. The borrowed funds allow the agency to meet cash requirements during periods of low revenue receipts and repay the funds when the revenues are greater, generally within the same year the funds were issued.

A group of revenue accounts that includes the property tax amount for the current year based on the assessed value of the property as established each year on January 1st by the Office of the Assessor-Recorder.

A group of revenue accounts that includes unsecured property taxes. The term “unsecured” refers to property that is not “secured” real estate, that is a house or parcel of land which is currently owned. In general, unsecured property tax is either for business personal property (e.g. office equipment, owned or leased), boats, berths, or possessory interest for use of a space. It can, however, also be based upon supplemental assessments based on prior ownership of secured property.

A tax levied by the County on rental receipts for temporary lodging in a hotel, vacation rental, or other similar facility doing business in the unincorporated area.

A fund used to account for assets held by a government unit in a trustee capacity or as an agent for others and which, therefore, cannot be used to support the government's own programs. The County is sometimes required to segregate revenues it receives from certain sources into a trust fund, but these funds are accounted for in the financial statements as County assets.

Residual net resources. Total fund balance in the general fund in excess of nonspendable, restricted, committed and assigned fund balance.

The present value of benefits earned to date that are not covered by plan assets; commonly used in pension fund discussions. The excess, if any, of the actuarial accrued liability over the actuarial value of assets. See also Actuarial Accrued Liability.

Any authorized position that is not filled until the total cost is legally appropriated in the adopted budget.

The amount of fund balance used as a funding source for one-time projects/services.

The value of the taxable or assessed property, including the public improvements proposed to be financed, relative to the amount of the assessment or special tax debt.