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TOWN FINANCE TERMINOLOGY <br />The following terms are frequently used in the annual town report and at the town <br />meeting. In order to provide everyone with a better understanding of the meaning, the <br />following definitions are provided. <br />APPROPRIATION <br />An authorization granted by the Town Meeting to make expenditures and to incur <br />obligations for specific purposes. Appropriations for any expenditures are limited in <br />dollar amount and time. <br />AVAILABLE FUNDS -"FREE CASH" <br />The amount certified annually by the Bureau of Accounts, Department of Revenue. The <br />certified amount is the Unreserved Fund Balance less all outstanding taxes. This fund <br />may be used by a vote of the town meeting as available funds for appropriation. <br />AVAILABLE FUNDS - OTHER <br />Usually refers to balances in special funds or to balances remaining in specific articles <br />previously appropriated. These balances become available for re- appropriation by Town <br />Meeting (or are returned to the town's general fund balance). <br />"CHERRY SHEET" <br />A financial statement issued by the State on cherry- colored paper that itemizes state aid <br />due to the town, and charges payable by the town to the state and county. The assessors <br />need the Cherry Sheet to set a tax rate. <br />ENTERPRISE FUND <br />A self- supporting account for a specific service or program that the town operates as a <br />separate "business." Enterprise funds do not depend on taxes for operating revenue. For <br />example, water operations are funded through the water enterprise fund, which receives <br />funds from a consumption based fee system. Ideally, enterprise resources and <br />expenditures should balance over time. Funds in enterprise accounts do not revert to <br />the general fund at the end of the fiscal year. <br />OVERLAY <br />The overlay is the amount raised by the Assessors in excess of appropriations and other <br />charges for the purpose of creating a fund to cover abatements granted by the Board of <br />Assessors. <br />RESERVE FUND <br />This appropriation is voted at the annual town meeting in an amount not to exceed 5% <br />of the tax levy of the preceding year. Transfers from the reserve fund are approved by <br />the Appropriation Committee and may only be used for "extraordinary or unforeseen <br />expenditures." <br />