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CITY OF GEM LAKE, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31.;'2008 NOTE 1 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 foritself, the City, the focal School District 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 properly 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 year. These taxes are collected by th6 County and remitted to the City on. or -before .July -15 and December 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*ouvriers: The.County possesses. this authority. With i'rr 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 anal the following January are. recognized as revenueJor 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 loot collected by the City ih January is fully offset by, .deferred revenue because it fs not available. to -- finance current expenditures. Deferred revenue, in governmental activities is susceptible to full adcrual on the government -wide statements: The. CiWs .property 'tax revenue includes payments from the. Metropolitan Revenue Distribution (Fiscal Disparities Formula) per Minnesota Statute 473F. This statute providbs -a means of spreading a portion of the taxable valuation of commerciaYindustrial :veal 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 2008 totaled $10,7'��1. Receipt of property taxes from this "fiscal disparities pool" does not increase or decrease total tax revenue. 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 same manner as property taken. Property .owners.are allowed to (and often do) prepay future installments vothout. interest or prepayment penalties.