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CITY OF GEM LAKE, MI.NNESOTA. NOTES TO BASIC FINANCIAL. STATEMENTS DECEMBER $1, 2016 NOTE 'I SUMMARY CF.SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 1. 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 samemanner as property taxes.. Property owners are allowed to.(and often do) prepay future installments without interest or prepayment. penalties. Within the fund financial statements, the revenue from.. special assessments is recognized by the City when it becomes,. 'measurable and availableto finance expenditures of the current fiscal period: lrpractice, current and'>delinquent special assessments received by the City are recognized .as revenue f&"''the current year. Special assessments are collected by; the County` and remitted by Decemiaer 31 {remitted to the City the following January) 'and are also recognized as revenue for the current year. All remaining delinquent; deferred and special deferred assessments receivable in governmental, funding are completely offset by deferred inflows of resources. Deferred inflows 'af resources in governmental activities is susceptible to full. accrual on the .government -wide statements. Once a special assessment roll 'is., adopted, the aWunt attributed to each parcel is a lien upon that property 6 til full paymei t is made or the amount is determined to be excessive by tfe'City's`City Council or court action. If special assessments are allowed to go. delinquent, the property is subject to tax forfeit sale and the first proceeds of that sale (after'costs, penalties and expenses of sale) are remitted to the City in payment of delinquent' special assessments, <Generally, the City will collect the full amount of its special assessments not adjusted `by the City's City Council or court action. Pursuant to State; Statutes, a `property shall be subject to a tax forfeit sale after three years unless it ..is' homesteaded, agr oltural or seasonal recreational lard in which event the property is subject to such;sale aft r five years. (18)