2011 Financial Reports - Laserfiche WebLink

Home

CITY OF GEM LAKE, MINNESOTA NOTES TO BASiG FINANCIAL STATEMENTS. DECEMBER 31, 2011 NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) H. Property Tax Revenue Recognition The City Council annually adopts a. tax levy and certifies it to the County in December (levy/assessment date) of each year for collection in the following year. The County is responsible for billing and. collecting all property taxes for itself, the City, the local School ❑istrict and other taxing authorities. Such taxes become a lien on January 1 and are recorded as receivables by. the City at that date: Real property taxes are payable (by property owners) on May 15 and October 1.5 of each calendar year. Personal property taxes are payable by taxpaYers on February 28 and. June 30 of each yea.r.. These taxes. are collected. by the County and remitted to the City on or before July 15 and Decerber 15 of the same year. Delinquent collections for November and December are received the following January. The City has no ability to enforce payment of property taxes by property owners. The, County possesses this authority. Within the governmental fund financial statements.; the City recognizes property tax. revenue .when it becomes both measurable and available to finance expenditures of the current period: In practice, current and delinquent. taxes and. State credits received by the City in July,. December and the. following January are recognized as revenue for the current year. Taxes and credits not received at the year-end. are classified as delinquent and due from County taxes receivable. The portion of delinquent taxes not collected by the City in January. is fully offset by deferred revenue because it. is not available to finance. current expenditures. Deferred revenue in governmental activities is susceptible to full accrual on the government -wide state ments. The City's. property tax revenue includes payments from the Metropolitan Revenue Distribution (Fiscal Disparities Formula) per Minnesota Statute 473F. This statute provides a means of spreading a. portion of the taxable valuation of commercial/industrial real property to various taxing authorities within the defined metropolitan area: The valuation "shared" is a portion of commerciallindustrial property valuation growth since 1.971. Property taxes paid to the City through this formula for 2911 totaled $3,199. Receipt of property taxes from this "fiscal. disparities pooi" does not increase or decrease total tax revenue.. I. Special Assessment Revenue Recognition Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment improvement projects. in accordance with state statutes. These assessments are collectible by the City over a term of years usually consistent with the term of the related bond issue. Collection of annual installments (including .interest) is handled by the County Auditor in the same manner as property taxes. Property owners are allowed to (and often do) prepay future installments without interest or prepayment penalties. (18)