2016 AnnualBudget20162017Adoptedbyth

• (City Council of Cambridge, 2016b) ⇒ City Council of Cambridge, MA. (2016). “Annual Budget 2016-2017 Adopted by the City Council, Cambridge, Massachusetts."

Subject Headings: City of Cambridge, MA Budget, Adopted Municipal Budget.

Notes

• It was preceded by (City Council of Cambridge, 2015b)

Cited By

• http://cambridgema.gov/budget

Quotes

Introduction

To the Honorable, the City Council, and the residents and taxpayers of Cambridge:

I am pleased to present the adopted Operating and Capital Budgets for the City of Cambridge for FY17 as well as the proposed FY18-21 Operating and Capital Plans. This Operating Budget of $574,562,125 represents an increase of $26,338,821, or 4.8%, over the FY16 Adjusted Budget. The proposed Capital Budget is $83,863,070.

The FY17 Budget sets a bold agenda for the City that closely links with the priorities established by the City Council. Cambridge is a place where families should thrive – through creating and preserving affordable housing, offering diverse learning opportunities, and advancing sustainability efforts to ensure that our community remains equitable, vibrant, and resilient for generations to come. The City will continue to advance affordable housing by directly offering affordable rental and ownership opportunities to residents, working with affordable housing providers to advance plans for new affordable housing, and planning for the preservation of affordable housing at-risk. A key component of the FY17 workplan will be to advance recommendations for changes to the City’s inclusionary housing provisions. Through FY16, the City has appropriated a total of $124.4 million in Community Preservation Act funds for affordable housing initiatives. Since FY05, the City has created 1,176 units of affordable housing and preserved an additional 1,130 affordable units throughout Cambridge (...)

Glossary

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | S | T | U | V | W | Y | X | Z |

A

• ABATEMENT. A complete or partial cancellation of a tax levy imposed by a governmental unit. Administered by the local board of assessors.
• ACCOUNTING SYSTEM. A system of financial recordkeeping which records, classifies, and reports information on the financial status and operation of an organization.
• ACCRUAL BASIS. The basis of accounting under which transactions are recognized when they occur, regardless of the timing of related cash flows.
• ADOPTED BUDGET. The resulting budget that has been approved by the City Council.
• AGENCY FUND. A type of fiduciary fund used to account for resources held in purely a custodial capacity for other governments, private organizations, or individuals.
• ALLOCATION. The distribution of available monies, personnel, buildings, and equipment among various City departments, divisions, or cost centers.
• AMORTIZATION. The gradual elimination of a liability in regular payments over a specified period of time. Such payments must be sufficient to cover both principal and interest. Also includes the writing off of an intangible asset over its projected life.
• ANNUAL BUDGET. An estimate of expenditures for specific purposes during the fiscal year (July 1 - June 30) and the proposed means (estimated revenues) for financing those activities.
• APPROPRIATION. An authorization by the City Council to make obligations and payments from the treasury for a specific purpose.
• ARBITRAGE. The reinvestment of proceeds of tax - exempt securities in materially higher yielding taxable securities.
• ASSESSED VALUATION. A valuation set upon real or personal property by the City’s Board of Assessors as a basis for levying taxes.
• AUDIT. A study of the City’s accounting system to ensure that financial records are accurate and in compliance with all legal requirements for handling of public funds, including state law and city charter.

B

• BALANCED BUDGET. A budget in which receipts are greater than (or equal to) expenditures. A requirement for all Massachusetts cities and towns. A balanced budget is a basic budgetary constraint intended to ensure that a government does not spend beyond its means and its use of resources for operating purposes over a defined budget period.
• BASIS OF ACCOUNTING. Timing of when revenues and expenditures will be recorded for financial reporting purposes – when the transaction is recognized in the financial statements.
• BASIS OF BUDGETING. Method used to determine when revenues and expenditures are recognized for budgetary purposes.
• BOND. A written promise to pay a specified sum of money, called the face value (par value) or principal amount, at a specified date or dates in the future, called maturity date(s), together with periodic interest at a specified rate. The difference between a note and a bond is that the latter runs for a longer period of time.
• BONDS AUTHORIZED AND UNISSUED. Bonds that a government has been authorized to sell but has not sold. Issuance at this point is only contingent upon action by the treasurer.
• BOND COUNSEL. An attorney or law firm engaged to review and submit an opinion on the legal aspects of a municipal bond or note issue.
• BOND ISSUE. Generally, the sale of a certain number of bonds at one time by a governmental unit.
• BUDGET (OPERATING). A plan of financial operation embodying an estimate of proposed expenditures for a given period and the proposed means of financing them.
• BUDGET CALENDAR. The schedule of key dates or milestones which a government follows in the preparation and adoption of the budget.
• BUDGET MESSAGE. A general discussion of the submitted budget presented in writing by the City Manager as part of the budget document.

C

• CAPITAL ASSETS. Land, improvements to land, easements, buildings, building improvements, vehicles, machinery, equipment, infrastructure, and all other tangible or intangible assets that are used in operations and that have initial useful lives extending beyond a single reporting period.
• CAPITAL BUDGET. A plan of proposed outlays for acquiring long-term assets and the means of financing those acquisitions during the current fiscal period.
• CAPITAL EXPENDITURES. Expenditures which result in the acquisition of, or addition to, fixed assets.
• CAPITAL FUND. Fund type used to account for financial resources to be used for the acquisition or construction ofmajor capital facilities.
• CAPITAL IMPROVEMENTS PROGRAM. A comprehensive schedule for planning a community’s capital expenditures. It coordinates community planning, fiscal capacity, and physical development. While all of a community’s needs should be identified in the program, there should also be a set of criteria that prioritizes expenditures. A capital program is a plan for capital expenditures that extends four years beyond the capital budget and is updated yearly.
• CASH BASIS OF ACCOUNTING. Revenues are recorded when cash is received and expenses are recognized when cash is paid out.
• CHARGES FOR SERVICES. (Also called User Charges or Fees) The charges levied on the users of particular goods or services provided by local government, requiring individuals to pay for the private benefits they receive. Such charges reduce the reliance on property tax funding.
• COMMUNITY PRESERVATION ACT. On November 7, 2001, residents of the City accepted the Community Preservation Act (CPA) which allows the City to impose a surcharge of 3% on real estate taxes. Property exempt from this tax includes the first $100,000 of residential property as well as certain low-income properties. By enacting the CPA, the City will receive the maximum available matching funds from the state. Proceeds from both the amount raised by the City and the amount matched by the State will be used to fund renovations to, and the construction of affordable housing, open space acquisition, and historic preservation.
• COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR). Financial report that contains at a minimum, three sections: 1) introductory, 2) financial, 3) statistical and whose financial section provides information on each individual fund and component unit.
• COST CENTER. The lowest hierarchical level of allocating monies. Often referred to as a program, project, or operation.

D

• DEBT AUTHORIZATION. Formal approval to incur debt by municipal officials, in accordance with procedures stated in M.G.L. Ch. 44, specifically sections 2, 3, 4 and 6-15.
• DEBT BURDEN. The level of debt of an issuer, usually as compared to a measure of value (debt as a percentage of assessed value, debt per capita, etc.) . Sometimes debt burden is used in referring to debt service costs as a percentage of the annual budget.
• DEBT LIMIT. The general debt limit of a city consists of the normal debt limit, which is 5% of the valuation of taxable property and a double debt limit, which is 10% of that valuation. Cities and towns may authorize debt up to the normal limit without state approval, while debt up to the double debt limit requires state approval. Certain categories of debt are exempt from these limits.
• DEBT SERVICE. Payment of interest and principal to holders of a government’s debt instruments.
• DEFICIT. The excess of budget expenditures over receipts. The City charter requires a balanced budget.
• DEPARTMENT. A principal, functional, and administrative entity created by statute and/or the City Manager to carry out specified public services.
• DEPRECIATION. A method of allocating the cost of a tangible asset over its useful life. This is done for accounting purposes.
• DIRECT DEBT. Debt of the government preparing statistical information, in contrast to debt of other, overlapping governments.

E

• E-GOV. The City’s IT Governance Model. The model is to ensure that IT spending decisions reflect the goals of the City through a set of principles and criteria.
• ENCUMBRANCE. Obligations in the form of purchase orders and contracts which are chargeable to an appropriation and are reserved.
• ENTERPRISE FUND. A proprietary fund type used to report an activity for which a fee is charged to external users for goods and services.
• EQUALIZED VALUATIONS (EQVS). The determination of the full and fair cash value of all property in the Commonwealth that is subject to local taxation. EQVs have historically been used as variables in distributing certain state aid accounts, and for determining county assessments and certain other costs.
• EXCESS LEVY CAPACITY. The difference between the levy limit and the amount of real and personal property taxes actually levied in a given year. Annually, the council must be informed of excess levying capacity and evidence of their acknowledgement must be submitted to the state Department of Revenue when setting the tax rate.
• EXPENDITURES. The amount of money, cash, or checks actually paid or obligated for payment from the treasury. Expenditures are categorized in accordance with Massachusetts General Laws and the Uniform Massachusetts Accounting System (UMAS). Categories are Salary and Wages, Other Ordinary Maintenance, Travel and Training, and Extraordinary Expenditures.

F

• FIDUCIARY FUND. Funds used to report assets held in a trustee or agency capacity for others and which cannot be used to support the government’s own programs. Categories include pension, investment, and agency funds.
• FINES & FORFEITS. Fines and any associated penalties levied for violations of the municipal code.
• FISCAL YEAR. The twelve-month financial period used by all Massachusetts municipalities, which begins July 1 and ends June 30 of the following calendar year. The fiscal year is identified by the year in which it ends. Example: July 1 to June 30.
• FREE CASH. Funds remaining from the operations of the previous fiscal year that are certified by the state Department of Revenue’s Director of Accounts as available for appropriation. Remaining funds include unexpended free cash from the previous year, receipts in excess of estimates shown on the tax recapitulation sheet, and unspent amounts in budget line items. Unpaid property taxes and certain deficits reduce the amount of remaining funds which can be certified as free cash.
• FULL AND FAIR MARKET VALUATION. The requirement by State law that all real and personal property be assessed at 100% of market value for taxation purposes. “Proposition 2½” laws set the City’s tax levy limit at 2.5% of the full market (assessed) value of all taxable property.
• FUND. A set of interrelated accounts which record assets and liabilities related to a specific purpose.
• FUND ACCOUNTING. Governmental accounting systems should be organized and operated on a fund basis. A fund is defined as a fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations.
• FUND BALANCE. The excess of assets of a fund over its liabilities and reserves. Fund balance is classified as non-spendable, restricted, committed, assigned, and unassigned based on the relative strength of constraints that control how specific amounts can be spent.

G

• GASB 34. A major pronouncement of the Governmental Accounting Standards Board that requires a report on overall financial health, including trends, prospects for the future, the cost of delivering services and value estimates on public infrastructure assets.
• GASB 54. A major pronouncement of the Governmental Accounting Standards Board that requires the classification of fund balances based primarily on the extent to which the government is bound to follow constraints on the use of governmental fund resources.
• GENERAL FUND. The fund serves as the chief operating fund of a government. The general fund is used to account for all financial resources except those required to be accounted for in another fund.
• GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP). Conventions, rules, and procedures that serve as the norm for the fair presentation of financial statements.
• GENERAL OBLIGATION BONDS. Bonds issued by a municipality which are backed by the full faith and credit of its taxing authority.
• GEOGRAPHICAL INFORMATION SYSTEM (GIS). Computerized mapping system and analytical tool that allows a community to raise and sort information on a parcel, area, or community wide basis.
• GOVERNMENTAL FUNDS. Funds generally used to account for tax-supported activities. There are five different types of governmental funds: the general fund, special revenue funds, debt service funds, capital projects funds, and permanent funds.
• GRANT. A contribution of assets by one governmental unit or other organization to another. Typically, these contributions are made to local governments from the state and federal government. Grants are usually made for specific purposes.

H

• HOTEL/MOTEL EXCISE. Allows a community to assess a tax on short-term room occupancy at hotels, motels, and lodging houses, as well as convention centers in selected cities.

I

• INTEREST. Compensation paid or to be paid for the use of money, including interest payable at periodic intervals or as a discount at the time a loan is made.
• INTERFUND TRANSACTIONS. Payments from one administrative budget fund to another or from one trust fund to another, which results in the recording of a receipt and an expenditure.
• INTERGOVERNMENTAL REVENUE. Includes federal and state grants, other governmental revenue and State Aid revenue. Examples include Cherry Sheet revenue, Community Development Block Grant, and Unrestricted General Government Aid.
• INTERNAL SERVICE FUNDS. Proprietary fund type that may be used to report any activity that provides goods or services to other funds, departments, or agencies of the primary government on a cost - reimbursement basis.

L

• LICENSE AND PERMIT FEES. The charges related to regulatory activities and privileges granted by government in connection with regulations.
• LEVY LIMIT. The maximum amount of tax a community can levy in a given year. The limit can grow each year by 2.5 percent of the prior year’s levy limit (M.G.L. Ch. 59, s. 21C (f, g, k)), plus new growth and any overrides. The levy limit can exceed the levy ceiling only if the community passes a capital expenditure exclusion, debt exclusion, or special exclusion.
• LINE-ITEM BUDGET. A format of budgeting which organizes costs by type of expenditure such as supplies, equipment, maintenance, or salaries.

M

• MAJOR FUND. A fund whose revenues, expenditures, assets, or liabilities (excluding extraordinary items) are at least 10% of corresponding totals for all governmental or enterprise funds and at least 5% of the aggregate amount for all governmental and enterprise funds.
• MASSACHUSETTS CLEAN WATER TRUST (MCWT). The MCWT improves the water quality in the Commonwealth through the provision of low cost capital financing to cities, towns, and other eligible entities, and maintains stewardship of public funds with prudence, professionalism, and integrity.
• MASSACHUSETTS WATER RESOURCE AUTHORITY (MWRA). The MWRA is a public authority that provides wholesale water and sewer services to metropolitan Boston area communities.
• MEALS EXCISE. Local excise option, allowing communities to assess a sales tax on sales of restaurant meals originating in the city by a vendor.
• MODIFIED ACCRUAL BASIS. The accrual basis of accounting adapted to the governmental fund type, wherein only current assets and current liabilities are generally reported on fund balance sheets and the fund operating statements present financial flow information (revenues and expenditures). Revenues are recognized when they become both measurable and available to finance expenditures in the current period. Expenditures are recognized when the related fund liability is incurred, except for a few specific exceptions. All governmental funds and expendable trust funds are accounted for using the modified accrual basis of accounting.

N

• N/A. The information is not available or not applicable.
• NET ASSETS. The difference between the assets and liabilities of proprietary funds. Classifications include unrestricted, invested in capital, net of related debt, and restricted assets.
• NET ZERO. A building with zero net energy consumption. The total amount of energy used by the building on an annual basis is approximately equal to the amount of renewable energy created on the site.
• NON-TAX REVENUE. All revenue coming from non - tax sources including licenses and permits, intergovernmental revenue, charges for services, fines and forfeits, and various other miscellaneous revenue.

O

• OFFICIAL STATEMENT. A document prepared for potential investors that contains information about a prospective bond or note issue and the issuer.
• OTHER POST-EMPLOYMENT BENEFITS (OPEB). Benefits received by an employee when he or she begins retirement, including health care and life insurance premiums, in accordance with state statute and City ordinance.
• OVERLAY. The amount raised by the assessors in excess of appropriations and other charges for the purpose of creating a fund to cover abatements and exemptions.

P

• PARTICIPATORY BUDGETING. A democratic process in which residents directly decide how to spend part of a public budget.
• PAY-AS-YOU-GO FUNDS. The appropriation of current revenues, including Property Taxes and Free Cash, to fund capital improvements, as opposed to incurring debt to cover the costs.
• PERFORMANCE BUDGET. A budget that bases expenditures primarily upon measurable performance of activities and work programs. A performance budget may also incorporate other bases of expenditure classifications, such as character and object class, but these are secondary to activity performance.
• PERFORMANCE MEASURE. An instrument for determining the degree to which a department or division executes an action or task. The degree of goal fulfillment achieved by programs. The Budget includes FY15 Actual, FY16 Projected, and FY17 Target performance measures.
• POLICY. A definite course of action adopted after a review of information, and directed at the realization of goals.
• PROCEDURE. A method used in carrying out a policy or plan of action.
• PROGRAM. Group activities, operations, or organizational units directed to attaining specific purposes and objectives.
• PROGRAM BUDGET. A budget format which organizes expenditures and revenues around the type of activity or service provided and specifies the extent or scope of service to be provided, stated whenever possible in precise units of measure.
• PROPOSITION 2½. A statewide tax limitation initiative petition limiting the property tax levy in cities and towns in the Commonwealth to 2½ percent of the full and fair cash valuation of the taxable real and personal property in that city or town. The statute also places an annual growth cap of 2½ percent on the increase in the property tax levy.
• PROPRIETARY FUNDS. Funds that focus on the determination of operating income, changes in net assets, financial position, and cash flows. There are two different types of proprietary funds: enterprise funds and internal service funds.
• PURCHASE ORDER. A document issued to authorize a vendor to deliver specified merchandise or render a specified service for a stated or estimated price. Outstanding purchase orders are called encumbrances.

R

• RATING AGENCIES. This term usually refers to Moody’s Investors Service, Standard and Poor’s Corporation, and Fitch Ratings. These are the three major agencies that issue credit ratings on the City’s municipal bonds.
• REFUNDING. Issuance of new debt whose proceeds are used to repay previously issued debt. When interest rates fall, issuers can exercise the call feature of a bond and replace it with another debt instrument paying a lower interest rate.
• REGISTERED BONDS. Bonds registered on the books of the issuer as to ownership; the transfer of ownership must also be recorded on the books of the issuer. Changes in federal tax laws mandate that all municipal bonds be registered if their tax exempt status is to be retained.
• RESERVED FUND BALANCE. Portion of a governmental fund’s net assets that is not available for appropriation.
• RESTRICTED ASSETS. Assets whose use is subject to constraints that are either externally imposed by creditors, grantors, or contributors; or imposed by law.
• REVENUE. Additions to the City’s financial assets (such as taxes and grants) which do not in themselves increase the City’s liabilities or cancel out a previous expenditure. Revenue may also be created by cancelling liabilities, provided there is no corresponding decrease in assets or increase in other liabilities.
• REVOLVING FUND. A fund established to finance a continuing cycle of operations in which receipts are available for expenditure without further action by the City Council.

S

• SERVICE LEVEL. The extent or scope of the City’s service to be provided in a given budget year. Whenever possible, service levels should be stated in precise units of measure.
• SERVICE PROGRAM. A planned agenda for providing benefits to citizens.
• SPECIAL REVENUE FUND. Governmental fund type used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specific purposes.
• SUBMITTED BUDGET. The proposed budget that has been approved by the City Manager and forwarded to the City Council for their approval. The Council must act upon the submitted budget within prescribed guidelines and limitations according to statute and the City charter.
• SUPPLEMENTAL APPROPRIATIONS. Appropriations made by the City Council, after an initial appropriation, to cover expenditures beyond original estimates.

T

• TAX ANTICIPATION NOTES. Short-term interest - bearing note issued by a government in anticipation of tax revenues to be received at a later date. The note is retired from the tax revenues to which it is related.
• TAX RATE. The amount of tax levy stated per $1,000 in value of the tax base. There are three classes of taxable property: 1) residential real property, 2) open space land, and 3) all other commercial, industrial, and personal) property, each of which may be taxed at a different rate. Within limits, cities and towns are given the option of determining the share of the levy to be borne by the different classes of property. The share borne by residential real property must be at least 65% of the full rate. The share of commercial, industrial, and personal property must not exceed 175% of the full rate. Property may not be classified until the state department of revenue has certified that all property has been assessed at its full value.
• TRUE INTEREST COST (TIC). The actual cost of issuing a bond. The TIC is the yearly cost for obtaining debt financing, expressed as a proportion of the total debt amount. All charges related to the bond are included, for example all ancillary fees and costs such as discount points and prepaid interest, as well as factors related to the time value of money.

U

• UNASSIGNED FUND BALANCE. The residual classification for the government’s general fund and includes all spendable amounts not contained in the other classifications, which normally are restricted or committed.
• UNIT COST. The cost required to produce a specific product or unit of service. For example, the cost of providing 100 cubic feet of water or the cost to sweep one mile of street.
• UNRESTRICTED GENERAL GOVERNMENT AID (UGGA). The components of local aid including additional assistance and lottery aid, which were combined into this one category, UGGA, in FY10.

V

• VALUATION (100%). Requirement that the assessed valuation must be the same as the market value for all properties.

References

	Author	volume	Date Value	title	type	journal	titleUrl	doi	note	year
2016 AnnualBudget20162017Adoptedbyth	City Council of Cambridge, MA			Annual Budget 2016-2017 Adopted by the City Council, Cambridge, Massachusetts						2016