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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 /> <br />Property taxes <br /> <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 /> <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 /> <br />Special assessments <br /> <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 /> <br />Inventories and prepaid items <br /> <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 /> <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 /> <br />-55- <br /> <br />