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<br />-20- <br />NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br /> <br />The City reports all investments at fair value. The City categorizes its fair value measurements within the <br />fair value hierarchy established by accounting principles generally accepted in the United States of <br />America. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. <br />Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other <br />observable inputs; and Level 3 inputs are significant unobservable inputs. <br /> <br />Debt securities classified in Level 2 of the fair value hierarchy are valued using a matrix pricing <br />technique. Matrix pricing is used to value securities based on the securities’ relationship to benchmark <br />quoted prices. <br /> <br />See Note 2 for the City’s recurring fair value measurements as of year-end. <br /> <br />F. Receivables <br /> <br />Utility and miscellaneous accounts receivable are reported at gross. Since the City is generally able to <br />certify delinquent amounts to the county for collection as special assessments, no allowance for <br />uncollectible accounts has been provided on current receivables. All receivables are expected to be <br />collected within one year with the exception of deferred special assessments. <br /> <br />G. Property Taxes <br /> <br />Property tax levies are set by the City Council by December of each year, and are certified to <br />Ramsey County for collection in the following year. In Minnesota, counties act as collection agents for all <br />property taxes. The county spreads all levies over taxable property. Such taxes become a lien on <br />January 1 and are recorded as receivables by the City on that date. Real property taxes may be paid by <br />taxpayers in two equal installments on May 15 and October 15. Personal property taxes are due in full on <br />May 15. The county provides tax settlements to cities and other taxing districts three times a year; in July, <br />December, and January. <br /> <br />Property taxes are recognized as revenue in the year levied in the government-wide financial statements. <br />In the governmental fund financial statements, taxes are recognized as revenue when received in cash or <br />within 60 days after year-end. Taxes which remain unpaid at December 31 are classified as delinquent <br />taxes receivable, and are offset by a deferred inflow of resources in the governmental fund financial <br />statements. <br /> <br />H. Special Assessments <br /> <br />Special assessments represent the financing for public improvements paid for by benefiting property <br />owners. Special assessments are recorded as receivables upon certification to the county. Special <br />assessments are recognized as revenue in the year levied in the government -wide financial statements. In <br />the governmental fund financial statements, special assessments are recognized as revenue when received <br />in cash or within 60 days after year-end. Governmental fund special assessments receivable, which <br />remain unpaid on December 31, are offset by a deferred inflow of resources in the governmental fund <br />financial statements. <br /> <br />I. Prepaid Items <br /> <br />Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as <br />prepaid items in both government-wide and fund financial statements. Prepaid items are reported using <br />the consumption method and recorded as expenditures/expenses at the time of consumption.