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CITY OF GEM LAKE, MINNESG.TA NOTES TO BASIC FINANCIAL. STATEMENTS DECEMBER 31, 2015 NOTE:1 SUMMARY CP 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 ahnual 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 fixture 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 available to finance expenditures of the current fiscal period. In practice, current and delinquent special assessments received by the City are recognized as revenue for the current year. Special assessments are. collected by the, County and remitted by December 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 of resources in;.governmentai activities is susceptible to full accrual on the government wide. stateinsi ts: once a special assessment roll is adopted; the amount attributed to each parcel is a lien upon that. property until jdll;;payment is made or the amount is determined to be excessive by the City's,City Council:ar 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' aInd 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. praperty:;sha11 be 5 bjest to a tax forfeit sale after three years unless it is homesteaded, agricultu' ral. or seasonal recreational land in Which event the .property is subject to such sale after five years.. (18)