Glossary of Town Governmental
Often-Used Phrases and Words

Appropriation - An authorization by the Town Meeting to make expenditures and incur liabilities for specific purposes. An appropriation is usually limited in amont and as to the time when it may be expended.

Assessed Valuation - A valuation set upon real estate or other property by the assessors as a basis for levying taxes.

Bond - A written promise to pay a specified sum of money by a fixed date, and carrying with it interest payments at a fixed rate, paid periodically. A Note is similar, but issued for a shorter period of time.

Capital Expenditure - A Town appropriation or bond issue for items over $100,000 or with a life of over 3 years.

Cherry Sheet - A State form which shows an estimate of all of the State and County charges and reimbursements to the Town.

Debt and Interest - The amount of money necessary annually to pay the interest and the principal on the Town's outstanding debt. Also known as "Debt Service."

Fiscal Year - The budget period used by the Town running from July 1 of one year to June 30 of the next year. At the end of this period, the Town closes its books in order to determine its financial condition and the results of its operations.

Free Cash - The amount of money from unspent budgets and surplus revenue after all prior year's uncollected taxes have been deducted . This amount may be used as available funds by vote of the Towen Meeting. Basically, receipts exceeding estimates and unspent budgets.

Levy - The tax levied on real estate and personal property in each fiscal year.

Local Receipts - The cash which is actually received by the Town.

Maintenance Expenditure - Traditionally part of the department budgets, maintenance has been moved into the capital article in recent years.

Overlay - The amount, up to 5% of the tax levy, raised by the assessors in excess of appropriations and other charges to cover abatements and avoid fractions.

Overlay Reserve - Unused amount of the overlay for previous years, which the Town may transfer for extraordinary purposes or vote into the reserve fund, or towards its unfunded pension liability.

Proposition 2 1/2 - A law limiting the extent to which the property tax can increase, determining how the tax levy should be calculated, how override itself, and how new growth affects these calculations. Basically allows for the automatic increase of the property tax in communities by 2 1/2% of the previous year's levy.

Proposition 2 1/2 Debt Exclusion Override - A bond issue that temporarily raises the tax levy. Requires a plurality at a general election.

Proposition 2 1/2 General Override - A permanent increase in the tax levy upon which the 2 1/2% allowable increase is calculated each year. Requires a plurality at a general election.

Reserve Fund - A fund voted by the Annual Town Meeting and controlled by the Finance Committee for extraordinary and unforeseen expenditures incurred by Town departments during the year.

Schedule 19 - An Ed Reform document filled out bv all towns & cities to fully record all funds contributed to education.

Stabilization Fund - Special Reserve Fund created for Capital expenditures. Can be used for certain purposes by a 2/3 vote of Town Meeting. Currently zeroed out.

Surplus Revenue - The amount by which cash, accounts receivable, and other assets exceed the liabilities and reserves. Used in calculating Free Cash.

Transfer - The movement of funds from one account to another. Transfers between accounts (other than the Reserve Fund) can only by made by vote of Town Meeting.

Unexpended Balance - That portion of an appropriation or account not yet expended. Any such balances left at the end of the fiscal year are used as Surplus Revenue in calculating Free Cash.

Warrant Article - With the simple mechanism of ten registered voter signatures, anyone may put a item on the agenda of Town Meeting. There are deadlines, for citizens usually the first week in February, that must be followed.

20 Things Every Marbleheader Should Know