Laserfiche WebLink
CITY OF GEM LAKE, MINNESOTA <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2014 <br /> <br /> <br /> <br />(20) <br /> <br />NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />H. Property Tax Revenue Recognition (Continued) <br /> <br />Within the governmental fund financial statements, the City recognizes property tax <br />revenue when it becomes both measurable and available to finance expenditures of the <br />current period. In practice, current and delinquent taxes and State credits received by <br />the City in July, December and the following January are recognized as revenue for the <br />current year. Taxes and credits not received at the year-end are classified as delinquent <br />and due from County taxes receivable. The portion of delinquent taxes not collected by <br />the City in January is fully offset by deferred inflows of resources because it is not <br />available to finance current expenditures. Deferred inflows of resources in governmental <br />activities is susceptible to full accrual on the government-wide statements. <br /> <br />The City’s property tax revenue includes payments from the Metropolitan Revenue <br />Distribution (Fiscal Disparities Formula) per Minnesota Statute 473F. This statute <br />provides a means of spreading a portion of the taxable valuation of commercial/industrial <br />real property to various taxing authorities within the defined metropolitan area. The <br />valuation "shared" is a portion of commercial/industrial property valuation growth since <br />1971. Property taxes paid to the City through this formula for 2014 totaled $3,411. <br />Receipt of property taxes from this "fiscal disparities pool" does not increase or decrease <br />total tax revenue. <br /> <br />I. Special Assessment Revenue Recognition <br /> <br />Special assessments are levied against benefited properties for the cost or a portion of <br />the cost of special assessment improvement projects in accordance with state statutes. <br />These assessments are collectible by the City over a term of years usually consistent <br />with the term of the related bond issue. Collection of annual installments (including <br />interest) is handled by the County Auditor in the same manner as property taxes. <br />Property owners are allowed to (and often do) prepay future installments without interest <br />or prepayment penalties. <br /> <br />Within the fund financial statements, the revenue from special assessments is <br />recognized by the City when it becomes measurable and available to finance <br />expenditures of the current fiscal period. In practice, current and delinquent special <br />assessments received by the City are recognized as revenue for the current year. <br />Special assessments are collected by the County and remitted by December 31 <br />(remitted to the City the following January) and are also recognized as revenue for the <br />current year. All remaining delinquent, deferred and special deferred assessments <br />receivable in governmental funding are completely offset by deferred inflows of <br />resources. Deferred inflows of resources in governmental activities is susceptible to full <br />accrual on the government-wide statements.