Capital Glossary of Terms

Glossary of Terms
ADOPTED BUDGET	The budget plan for the next fiscal year which has been formally approved by a majority vote of the County Board of Legislators.
ALLOCATION	A control process which draws funds from the project appropriation to the specific sub-account(s) where expenditures will be incurred (i.e. engineering, construction, etc.).
APPROPRIATION	An authorization granted by the Board of Legislators to make expenditures and to incur obligations for a specific project. Appropriations are limited in amount.
BANS (BOND ANTICIPATION NOTES)	Short term notes issued by a governmental unit, usually for capital projects, which are paid off prior to the issuance of long term bonds.
BOND ISSUE	A general term referring to borrowings of local governmental subdivisions such as village, county etc. Written evidence of the obligation to repay a specified principal at a certain date with interest.
BOND REFERENDUM	A process whereby the voters of Westchester are given the opportunity to approve or disapprove a proposed issue of municipal securities. County Charter requires a public referendum when the amount of the proposed bonding for a project is in excess of $10 million.
BOND COUNSEL	An attorney-specialist that provides legal advice to insure that the County is authorized to issue proposed bonds, and has met all legal and financial requirements.
CAPITAL BUDGET	The annual spending plan for major physical improvements and construction projects, generally having a useful life of 5 years or more. It provides project details, project priority ratings, costs and funding source(s). The Capital Budget is a portion of the total County Budget for the coming fiscal year. It represents the first year implementation of projects in the five-year Capital Program. It is paid for by County bonds, cash to capital, and non-County or non-District Shares (federal or state aid, or private shares).
CAPITAL PROGRAM	The five-year program for major physical improvements and construction projects. The Program is determined by criteria evaluating the need, scope and fiscal impacts of the proposed projects. The first year of a Capital Program becomes the proposed Capital Budget for the next fiscal year.
CAPITAL PROJECT	Major projects requiring the expenditure of public funds, over and above annual operating expenses, for the purchase, construction, or replacement of physical facilities or other fixed assets of the community. Capital projects are normally large-size, costly, have a long useful life (i.e. 5-40 years), are bondable, and are fixed in one specific location. As a general rule, equipment is not capitalized except where, as incidental to a new building, for example, original furnishings are provided. In certain instances, however, where individual items of equipment are over $100,000 they may be capitalized as is the case with heavy motor equipment and high tech lab equipment.
CASH TO CAPITAL	An appropriation in the operating budget that partially supports the Capital Budget. Where projects have been bonded and final costs exceed original total bond authorizations, these overruns are generally "cashed up" as well. Together with debt service these payments are funded by the operating budget.
COUNTY OR DISTRICT SHARE	The amount of funding required from general County resources (i.e., property or sales taxes), after all revenue sources attributed to operations of a department or division are subtracted from total appropriations or expenditures. The County share is funded by cash to capital and/or the issuance of bonds.
NON COUNTY OR DISTRICT SHARES	Funding for the Capital Budget provided from other than Countyresources: State or Federal Aid or grants e.g., for sewer and water districts, airport projects; municipal contributions, eg., road projects; or private shares, e.g., parking projects. For airport appropriations, the term used is "Non-Airport Special Revenue Shares". For district appropriations, the term used is "Non District Shares".
DEBT LIMIT	The New York State Local Finance Law limits the amount of indebtedness that a county can contract for any purpose or in any manner, including existing indebtedness, to 7% of the full real estate valuation (Average last five years). The full real estate valuation is established by the State.
DEBT SERVICE	The principal and interest payments for obligations incurred by borrowings to finance capital projects. These payments are similar to mortgage payments on a home. Funding for these payments is included in the operating budget.
EARNINGS ON INVESTMENTS	This represents the interest earned on the investment of funds borrowed for capital projects. Such borrowed funds are invested until they are needed to pay project costs. The income from the temporary investment of funds is a function of both prevailing interest rates and the amount of cash available for investment. Interest use is restricted to debt retirement, and interest earnings are regulated by the Internal Revenue Service.
ENCUMBRANCE	An obligation in the form of a purchase order, contract or other commitment which is chargeable to an appropriation subaccount and for which a part of that appropriation is reserved prior to incurring the liability and prior to the actual expenditure of funds.
ENVIRONMENTAL REVIEW	The generic term for environmental procedures and review required under State law before any agency of local government carries out, funds or approves an "action." Actions include physical activities such as construction; planning and policy making which commit the agency to a definitive course of future actions; and, acts such as adoption of rules, regulations, local laws, codes, ordinances, executive orders and resolutions that may affect the environment.
EXPENDITURE	An actual cash outlay for the acquisition or betterment of a capital asset.
RESERVE FOR BONDED DEBT, "CAPITAL RESERVES"	When funds borrowed for a capital project exceed the final project cost, the balance must be applied to retirement of debt on the project. If there is no remaining project debt, the balance can be applied to the County's annual operating cost with legislative approval. This revenue varies considerably from year to year depending on the number of capital projects completed and the balances remaining in the projects closed out.