Annual_Report_1995_001 - Laserfiche WebLink

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. :. .. • .•. „ . � � : .. L�Io�eL- Summary of-SiBnifi�an[_Acc��g pol;cies�ontinued "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafrer to be used to pay liabilities of the current period. The city considers property taxes as available if they aze collected within 60 days after year end. Ezpenditures ue recorded when the related fund liability is incurred. Principal and in[erest on general long-term debt are rewrded as fund liabilities when due or when amounts have been accumulated in the debt service fund for paymen[s to be made early in the following yeaz. Those revenues susceptible ro accrual aze property taxes, special assessments, licenses, interest revenue and chazges for services. State aids held by the state at year-end on behalf of the govemment also aze recognized as revenue. Fines and permits aze not susceptible to accrual because generally they aze not measurable until received in cash. The government repons deferred revenue on its combined balance sheet. Deferred revenues arise when a poten[ial revenue dces not meet both the "measurable" and "available" criteria for recognition in the current period. Deferred revenues also azise when resources are received by the government before it has a legal daim to them as when grant monies are received prior ro the incurrence of qualifying expendinues. In subsequent periods when both revenue recognition criteria aze met or when the government has a legal claim to the resources the liabiliry for deferred revenue is removed from [he combined balance sheet and revenue is recognized. Expenditures are generally recognia,ed under the modified accrual basis of accounting when the related fund liabiliry is incurred ezcept for principal and interest on general long-term debt which is recogni2ed when due and accumulated unpaid vacation and compensatory [ime off which are recognized when paid. The accrual basis of accounting is utilized by proprietary fund types. Under this method, revenues aze recorded when earned and expenses are recorded at the time liabilities aze incurred. Unbilled utility service receivables aze recorded at year end. E. 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 ezpended by each fund based on detailed budget estimates for individual expendinue accounts. Management may make budget modifications within the fund levei. All budget revisions at the fund level must be authorized by the Ciry Council at the request of the City Manager. The Council under Minnesota State Starutes Section 412.731 can modify or amend the budget if unappropriated funds aze available. Budget modification at the fund level was necessary in 1995 for the Communiry Development Fund and the License Center Fund. The amendments included increases of $125,000 and �100,000 respectively. All supplemental appropriations are financed either by transfers from the Contingency Section of the Genecal Fund budget or by revenues received in excess of the budgeted amounts. All budget amounts lapse at the end of the year to the extent they have not been expended. The level which expenditures may not legally exceed appropriations is at the fund level. F. Assets, Liabili[ies and Fund Equity InYestments - Ciry investments are carried at cost, which appro�mates mazket. ( See note 3 for disclosures relating ro cash management and investments.) Investments reported in the deferred compensation plan are reported by the plan's [rustees at market value. Properry_Taxes - Properry tax levies ue set by the City Council in December each year and are cenified to the Counry for collection the following year. In Minnesota, counties act as collection agents for all property ta�ces. The Counry spreads the levies over all taxable propetty in the Ciry. Such ta:ces become receivables of the City as of January I. Property taxes are payable in equal installments by propeny owners to the County as follows: Personal property - February 28 and June 30 Real property - May 15 and October 15 31