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CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2017 <br /> <br /> <br /> <br /> <br />Permanently restricted cash and investments represents the principal and earnings portion of resources <br />received that must be retained in a permanent fund. Only earnings from these funds may be used for <br />purposes that support environmental maintenance and improvements. <br /> <br /> <br />G. PROPERTY TAX REVENUE RECOGNITION <br /> <br /> The City Council annually adopts a tax levy and certifies it to the County in December (levy/assessment <br />date) of each year for collection in the following year. The County is responsible for billing and <br />collecting all property taxes for itself, the City, the local School District and other taxing authorities. <br />Such taxes become a lien on January 1 and are recorded as receivables by the City at that date. Real <br />property taxes are payable (by property owners) on May 15 and October 15 of each calendar year. <br />Personal property taxes are payable by taxpayers on February 28 and June 30 of each year. These taxes <br />are collected by the County and remitted to the City on or before July 15 and December 15 of the same <br />year. Delinquent collections for November and December are received the following January. The <br />City has no ability to enforce payment of property taxes by property owners. The County possesses this <br />authority. <br /> <br /> Within the government-wide financial statements, the City recognizes property tax revenue in the <br />period for which taxes were levied. Uncollectible property taxes are not material and have not been <br />reported. <br /> <br /> Within the governmental fund financial statements, the City recognizes property tax revenue when it <br />becomes both measurable and available to finance expenditures of the current period. In practice, <br />current and delinquent taxes and received by the City in July, December, and the following January are <br />recognized as revenue for the current year. Taxes collected by the county by December 31 (remitted to <br />the City the following January) are classified as due from county. Taxes not collected by the county by <br />December 31 are classified as delinquent taxes receivable. Delinquent taxes receivable are fully offset <br />by deferred inflows of resources because they are not available to finance current expenditures. <br /> <br />The City's property tax revenue includes payments from the Metropolitan Revenue Distribution (Fiscal <br />Disparities Formula) per State Statute 473F. This statute provides a means of spreading a portion of the <br />taxable valuation of commercial/industrial real property to various taxing authorities within the defined <br />metropolitan area. The valuation "shared" is a portion of commercial/industrial property valuation <br />growth since 1971. <br /> <br /> <br />H. SPECIAL ASSESSMENT REVENUE RECOGNITION <br /> <br /> Special assessments are levied against benefited properties for the cost or a portion of the cost of special <br />assessment improvement projects in accordance with State Statutes. These assessments are collectible <br />by the City over a term of years usually consistent with the term of the related bond issue. Collection of <br />annual installments (including interest) is handled by the County Auditor in the same manner as <br />property 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 upon that <br />property until full payment is made or the amount is determined to be excessive by the City Council or <br />court action. If special assessments are allowed to go delinquent, the property is subject to tax forfeit <br />sale and the first proceeds of that sale (after costs, penalties and expenses of sale) are remitted to the <br />49