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CITY OF GEM LAKE, MINNESOTA. NOTES TO BASIC. FINANCIAL STATEMENTS DECEMBER 31, 2016 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) G. Property Tax Credits. Property taxes on homestead property (as defined by state. statutes) are partially reduced by.property tax credits. These credits are paid to the City. by the state in lieu of taxes levied against homestead property. The.. state. remits these credits through installments each year. These credits are recognized as revenue by the City at the time of collection. 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 collb..ctian in the following year. The County is responsible for billing and collecting all property taxes for itself, the City, the local School District and other taxing authorities. S.uchlaxes 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 5, of; each calendar year. Personal property taxes are payable by taxpayers on February'28 acid June 30 of each year. These taxes are collected by the County , and remitted to ;,the City. on or before July 15 and December 15 of the same year; delinquent collections for November antl December are received the following January'The' City> has no ability;, to enforce payment of property taxes by.propertyowners. The County possesses.this`authority. Within the govern: enfal fund financial statements; the City recognizes property tax revenue when< t.becomes both rrmeasurable.and available to finance:expenditures of the current period:' In practice;, .current aril defir;quent taxes and State credits. received by the City in Jbly, December and the following January are recognized as revenue for the currentyear'Taxes and-credits:not.:re.ce.ived at the year-end are classified as.delinquent and due from Caunty'taxes r6c ::- a> le. The portion of delinquent taxes not collected by %the_City; in January is fully offset by deferred inflows of resources because it is not available to`:frnancEi current experiditures. Deferred inflows of resources in governmental activities is susceptible toJull accrual on the government -wide statements. The City's proper#y tax revenue includes payments from the Metropolitan Revenue Pi5tribution (Fiscal Disparities Formula) per Minnesota Statute 473F. This statute. provides a means.of spreading a portion of the taxable valuation of corn mercia Vindustrial real" property.%.to various taxing authorities within the defined metropolitan area. The valuation` "shared" is a portion of commercial/industrial. property valuation growth since. 1971.. Property taxes .paid to the City through this formula for 2616 totaled $5,100. Receipt of property taxes frorn this "fiscal disparities pool" does not increase or decrease total tax revenue_ (17)