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CITY OF ROSEVILLE, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTIN�ED) DECEMBER 31, 1987 Note 1- Summary ot Significant Accounting PoLicies (Continued) Proprietary Funds are accounted for using the accrual basis of accounting. Revenues are recognized when they are earned, and expenses are recoqnized when they are incurred. �nhiLLed utitity service receivables are recorded at year end. D. Budgets and Budgetary Accounting The City adopts an annual 6udget for the GeneraL and Special Revenue tunds which are prepared on the modified accruaL 6asis ofi accounting. The adopted 6udget indicates the amount that can be expended 6y each fund based on detailed 6udget estimates for individual expenditure a<counts. Atl budget revisions must he authorized hy the City Councit at the request of the City Manager. The Council, under Minnesota S[ate Statutes Section 412.737 can modify or amend the budget if unappropriated funds are avaitable. Budget modification was necessary in�1987 and att suppLemental appropriations for were financed 6y transfers from the Contingency Section of the Generat Fund hudget. All budget amounts Lapse at the end of the year to the exient they have not 6een expended. The Levet which expenditures may not LegaLLy exceed appropriations is at the fund leveL. E. Assets, LiabiLities and iu�d Equity Investments - Investments are carried at cost, which approximates market. (See note 5 for discLosures retating to cash management and investments.) Property Taxes - Property tax tevies are set hy the City Council in October each year and are certified to the County for coLLection the foltowing year. In Minnesota, counties act as colLection agents for alt property [axes. The County spreads the Levies over alL taxabLe property in the City. Such taxes bemme receiva6Les of the City as ot January 1. Property faxes are payabte in equaL instatlments by property owners to the Couniy as foLtows: Personat property - February 28 and June 30 ReaL property - May 15 and October 15 The County remits the col�ections to the City and other taxin9 districts four times a year, on or before January 20, April 79, Juty 5, and �ecember 4. Property iax revenue is recorded when it hecomes measurabLe and avaita6te. Taxes due from ftamsey County on December 31, 1987, are inctuded in 1987 revenue. Unpaid taxes at December 31 hecome Liens on the respective property and are cLassified in the financiaL statemeMs as delinquent taxes receivable. The receivabLe is futLy offset by deferred revenue as it is not avaiLable to finance current expenditures. Cities in Minnesota operate under a levy Limitation law which alLows an increase in the tax Levy each year equat to the ImpLi<it Price Deftator increase or 5%, whichever is greater, further indezed by the -31-