2002-09-25 CC Packet - Laserfiche WebLink

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----- -I CITY OF CBNTERVILLE, MlNNESOT A NOTES TO FINANCIM. 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 flow of economic resources measurement focus and use the accrual basis of accounting. Under this metbod, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. In accordance witb the provisions of the Governmental Accounting Standards Board (GASB) Statement No. 20, Accounting and Financial Reponing for Proprietary Funds and other Governmental Entities that use Proorietary Fund Accountin~. the City applies all applicable GASB pronouncements plus all Financial Accounting Standards Board (F ASB) Statements and Inte'1'retations, Accounting Principles Board opinions, and Accounting Research Bulletins issued on or before November 30, 1989, except for tbose tbat conflict with or contradict GASB pronouncements. Tbe City bas elected not to apply FASB Statements and Inte'1'retations issued after November 3D, 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 wbere the Council bas decided that the determination of revenues'earned, costs incurred andlor net income is necessary for management accountability. Fiduciary funds account for assets beld by the government in a trustee capacity or as an agent on behalf of others. Agency funds are establisbed to account for cash or otber assets beld by the City as trustee or agent for individuals, private organizations, other governments and/or other funds. The fund is custodial in nature (assets equal liabilities) and does not involve measurement of results of operations. Account groups. The genera/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 Tbe City's casb and casb equivalents are considered to be casb on band, 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 lnvestment 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 montb-end casb and investment balances. Tbe Minnesota Municipal Money Market Fund investment pool operates in accordance with appropriate state laws and regulations. Tbe reported value of the pool is tbe same as tbe fair value of the pool sbare. Property Taxes The City Council annually adopts a tax levy in December and cenifies 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 tbe City on January I and are payable by the property owners in two installments. The taxes are collected by tbe County Auditor and tax settlements are made to the City dosing 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 eacb 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 witbin 60 days after year end. I