2002-08-12 CC Worksession - Laserfiche WebLink

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CITY OF CENTERVllLE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. CONTINUED The capital projects funds account for the acquisition of fixed assets or construction of major capital projects not being financed by proprietary funds. Proprietary funds are accounted for on the tlow of economic resources measurement focus and use the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. In accordance with the provisions of the Governmental Accounting Standards Board (GASB) Statement No. 20, Accounting and Financial Reoorting for Proprietary Funds and other Governmental Entities that use Proorietarv Fund Accounting. the City applies all applicable GASB pronouncements plus all Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principles Board opinions, and Accounting Research Bulletins issued on or before November 30, 1989, except for those that contlict with or contradict GASB pronouncements. The City has elected not to apply FASB Statements and Interpretations issued after November 30,1989. Proprietary funds include the following fund type: Enterprise funds are used to account for those operations that are financed and operated in a manner similar to private business or where the Council has decided that the determination of revenues earned, costs incurred and/or net income is necessary for management accountability. Fiduciary funds account for assets held by the government in a trustee capacity or as an agent on behalf of others. Agency funds are established to account for cash or other assets held by the City as trustee or agent for individuals, private organizations, other governments andlor other funds. The fund is custodial in nature (assets equal liabilities) and does not involve measurement of results of operations, Account groups. The general fixed assets account group (unaudited) is used to account for fixed assets not accounted for in proprietary funds. The general long-term debt account group is used to account for general long-term debt and certain other liabilities that are not specific liabilities of proprietary funds, C. Assets, Liabilities and Equity Deposits and Investments The City's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition, State statutes authorize the City to invest in obligations of the U.S, Treasury, commercial paper, corporate bonds, repurchase agreements and shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are obligations guaranteed by the United States or its agencies. Investments for the City are reported at fair value. Earnings on investments are allocated to the individual funds based upon the average of month-end cash and investment balances, The Minnesota Municipal Money Market Fund investment pool operates in accordance with appropriate state laws and regulations. The reported value of the pool is the same as the fair value of the pool share, Property Taxes Tbe City Council annually adopts a tax levy in December and certifies it to the County for collection in the following year. The County is responsible for collecting all property taxes for the City. These taxes attach an enforceable lien on taxable property within the City on January 1 and are payable by the property owners in two installments. The taxes are collected by the County Auditor and tax settlements are made to the City during January. July, and December each year, Taxes payable on homestead property, as defined by State statutes, are partially reduced by a homestead and agricultural credit aid. The credit is paid to the City by the State of Minnesota in lieu of taxes levied against homestead property, The State remits this credit in two equal installments in July and December each year, This aid was eliminated with legislation passed during the 2001 Minnesota legislative session, Delinquent taxes receivable include the past six years' uncollected taxes, Delinquent taxes have been offset by a deferred revenue liability for delinquent taxes not received within 60 days after year end. -11-