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CITY OF LITTLE CANADA, MINNESOTA <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2015 <br /> <br /> <br /> <br />(44) <br /> <br />NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />I. Property Taxes (Continued) <br />In the governmental fund financial statements the City recognizes current and delinquent <br />taxes received by the City in July, December, and January as revenue for the current <br />year. Taxes collected by the County by December 31 (remitted to the City the following <br />January) are classified as taxes due from the County. The portion of taxes not received <br />by the City by January is classified as delinquent and is fully offset by deferred inflows of <br />resources. <br /> <br />J. Special Assessments <br />Special assessments are levied against the benefited properties for the cost or a portion <br />of the cost of special assessment improvement projects in accordance with state <br />statutes. These assessments are collectible by the City over a term of years usually <br />consistent with the term of the related bond issue. Collection of annual installments <br />(including interest) is handled by the County auditor in the same manner as property <br />taxes. Property owners are allowed to (and often do) prepay future installments without <br />interest or prepayment penalties. <br /> <br />Once a special assessment roll is adopted, the amount attributed to each parcel is a lien <br />upon that property until full payment is made or the amount is determined to be <br />excessive by the City Council or court action. If special assessments are allowed to go <br />delinquent, the property is subject to tax forfeit sale. Proceeds of sales from tax forfeit <br />properties are remitted to the City in payment of delinquent special assessments. <br />Pursuant to State Statutes, a property shall be subject to a tax forfeit sale after three <br />years unless it is homesteaded, agricultural or seasons recreational land in which event <br />the property is subject to such sale after five years. <br /> <br />In the governmental-wide financial statements the City recognizes special assessment <br />revenue in the period that the assessment roll was adopted by the City Council. In the <br />fund financial statements current and delinquent special assessments received by the <br />City are recognized as revenue for the current year. All remaining delinquent and <br />deferred special assessments receivable are offset by deferred inflows of resources in <br />the governmental funds. <br /> <br />K. Inventories <br />The original cost of materials and supplies has been recorded as expenditures at the <br />time of purchase. The City does not maintain material amounts of inventories of goods <br />and supplies. <br /> <br />L. Prepaid Items <br />Certain payments to vendors reflect costs applicable to future accounting periods and <br />are recorded as prepaid items in both government-wide and fund financial statements. <br />Prepaid items are reported using the consumption method and recorded as <br />expenditures/expenses at the time of consumption.