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CITY OF GEM LAKE, MINNESOTA <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2017 <br /> <br /> <br /> <br />(18) <br /> <br />NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />I. Special Assessment Revenue Recognition (Continued) <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. <br /> <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 the City’s City Council or court action. If 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 sale after three years unless it is <br />homesteaded, agricultural, or seasonal recreational land in which event the property is <br />subject to such sale after five years. <br /> <br />J. Capital Assets <br /> <br />Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., <br />roads, sidewalks, street lights, and similar items) are reported in the applicable <br />governmental or business-type activities columns in the government-wide financial <br />statements. Capital assets are recorded at historical cost or estimated historical cost if <br />purchased or constructed. The cost of normal maintenance and repairs that do not add <br />to the value of the asset or materially extend asset lives are not capitalized. Major <br />outlays for capital assets and improvements are capitalized as projects are constructed. <br /> <br />The government reports infrastructure assets on a network and subsystem basis. In the <br />case of the initial capitalization of general infrastructure assets (i.e., those reported by <br />governmental activities) the City chose to include all such items regardless of their <br />acquisition date or amount.