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CITY OF ROSEVILLE, MINNESOTA NOTES TO THE PINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1952 Note 1- Summary of Significant AccountinQ Policies (Continued) C. Basis of Accounting (Continued) Expenditures are generally recognized under the modified accrual basis of accounting when the related fund Liability is incurred, except for principal and interest on general long-term debt which is recognized when due. Proprietary funds are accounted for using the accrual basis of accounting. Revenues are recogaized when they are earned, and expenses are recognized when they are incurred. Unbilled utility service receivables are recorded at year end. D. Budgets and Budgetary Accounting The City adopts an annual budget for the General and special revenue funds which are prepared on the modified accrual basis of accounting. The adopted budget indicates the amount that can be expended by each department and each fund based on detailed budget estimates for individual expenditure accounts. Al1 budget revisions must be authorized by the City Council at the request of the City Manager. All supplemental appropriations for 1982 were financed by transfers from the Contingency Section of the General Fund All budget amounts lapse at the end of the year to the extent they have not been expended or encumbered. E. Assets, Liabilities and Fund Equity Investments - Investments are carried at cost, which approximates market Property Taxes - Property taxes are set by the City Council with the levy certified to the County, which acts as collection agent, in October prior to the year collectible. Such taxes constitute a lien on the property on January 1 of the year collectible. Cities in Minnesota operate under a levy limitation law which generally permits an eight percent increase in taxes levied per capita each year along with certain permitted special levies as set forth in Mianesota Statutes. Levies for bonded indebtedness are not Limited by this law. Allowances have been provided for all taxes receivable which were not remitted to the City within 60 days of year end. Special Assessments - Special assessments are recognized when they become both measurable and available to finance bonded debt. In practice special assessment principal is recognized as revenue in the year-when assessment rolls are adopted by the City Council, and when it is available to fia�nce the bond issue principal. Special assessment interest is recognized as revenue in the year due. Inventories - Inventories held by the Enterprise funds are stated at the lower of cost or market, using the first-in, first-out method. The only - other items of inventory would be a sma11 quantity of supplies which are ; expensed when purchased. -� - 34-