Page 512 - 2020-21 Budget Summary

GLOSSARY

Debt Service: The cost of paying principal and interest on borrowed money according to a predetermined payment
schedule.

Department: A major administrative division of the City that indicates overall management responsibility for an
operation or a group of related operations within a functional area. A department often has more than one
budgetary program and may have more than one source of funds.

Department of Airports: The Department that, under its Board of Commissioners, is responsible for management,
supervision, and control of all airports and airport facilities under the jurisdiction of the City of Los Angeles. It
plans, constructs, and maintains its own buildings and controls its own funds in accordance with the City Charter.
The budget is independent of the City’s General Budget and it is included in Section 4 for information purposes
only. The budget and supporting data are available from the Department.

Department of Water and Power: The Department that, under its Board of Commissioners, is responsible for
supplying the City and its inhabitants with water and electric energy by constructing, operating, and maintaining
works for importing water and electric energy throughout the City and in Mono and Inyo Counties and by
importing electric energy from other western states. The Department fixes rates for water and electric service
subject to approval of the City Council by ordinance. It controls its own funds and maintains an independent
retirement, disability, and death benefit insurance plan. The budget is independent of the City’s General Budget
and it is included in Section 4 for information purposes only. The budget and supporting data are available from
the Department.

Detail of Department Programs: Supplement to the budget book that identifies by department and program the
incremental changes from one fiscal year to another fiscal year (also referred to as the Blue Book). The Blue
Book also contains related departmental schedules including the Detail of Positions and Salaries and Contractual
Services.

Direct Cost: The cost of salaries, expense, and equipment for authorized positions to perform specific work
assignments. The annual budget of each department provides funding for this cost.

Economically Sensitive Revenues: Revenues that can rise or fall from year to year and usually correspond to
general economic conditions.

Encumbrance: An unpaid obligation incurred for current or future services such as for professional service,
materials, equipment, and capital improvements.

Expenditure: A payment made for cost of services rendered, materials, equipment, or capital improvements.

Fee: A charge to the party who benefits directly from the City’s service, such as individual building permit fees.
Financial Policies: The formal policies that the City adopted to govern several areas of its financial management.
The adopted financial policies include the following: Fiscal Policies, Capital and Technology Improvement Policy,
Pension and Retirement Funding Policy, General Fund Reserves Policy, General Fund Encumbrance Policy, and
Debt Management Policy.

Fire and Police Pensions: The Department that administers the provisions of the City Charter relative to service,
disability, and dependents’ pensions for members of the Fire and Police Departments and certain Harbor and
Airports Police members. The budget is independent of the City’s General Budget and it is included in Section 4
for information purposes only. The budget and supporting data are available from the Department.

Fiscal Year: The time period for the City budget, which begins on July 1 and ends on June 30 of the following year.

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