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CITY OF CENTERVILLE, MINNESOTA <br /> NOTES TO THE FINANCIAL STATEMENTS <br /> DECEMBER 31, 2012 <br /> Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED <br /> Property taxes <br /> The City Council annually adopts a tax levy in December and certifies it to the County for collection in the following <br /> year. The County is responsible for collecting all property taxes for the City. These taxes attach an enforceable lien on <br /> taxable property within the City on January 1 and are payable by the property owners in two installments. The taxes are <br /> collected by the County Auditor and tax settlements are made to the City during January, July and December each year. <br /> Delinquent taxes receivable include the past six years' uncollected taxes. Delinquent taxes have been offset by a deferred <br /> inflow of resources liability for delinquent taxes not received within 60 days after year end in the fund financial <br /> statements. <br /> Special assessments <br /> Special assessments represent the financing for public improvements paid for by benefiting property owners. These <br /> assessments are recorded as receivables upon certification to the County. Special assessments are recognized as revenue <br /> when they are received in cash or within 60 days after year end. All governmental fund special assessments receivable <br /> are offset by a deferred inflow of resources liability in the fund financial statements. <br /> Inventories and prepaid items <br /> All inventories are valued at cost using the first -in /first -out (FIFO) method. Inventories of governmental funds are <br /> recorded as expenditures when consumed rather than when purchased. <br /> Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in <br /> both government -wide and fund financial statements. <br /> -55- <br /> 75 <br />