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CITY OF GEM LAKE, MINNESOTA <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />DECEMBER 31,.201.6 <br />NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING.POLICIES (CONTINUED) <br />Special Assessment Revenue Recognition <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 terrii. of the related bond issue. Collection of annual installments (ineludirig <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 />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. <br />Once.a special assessment roll is adopted, the amount attributed to each parcel is a lien <br />upon that property until full payment is. made or the amount is determined to be <br />excessive by City's City Council o.r court action..lf special assessments are allowed. <br />to go delinquent, the property is subject to tax forfeit sale and the first.. proceeds. of that <br />sale (after costs, penalties, and expenses of sale) are remitted to the City in payment of <br />delinquent special assessments, Generally, the City will collect the full amount of its <br />special assessments not adjusted by the City's City Council or court action. Pursuant to <br />State Statutes, a property shall be subject to a tax forfeit safe after three years unless it <br />is homesteaded, agricultural, or seasonal recreational land in which event the property is. <br />subject to such sale after five. years. <br />(t 8) <br />