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CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2023 <br /> <br /> <br /> <br /> <br />7. A capital improvement program is reviewed annually by the City Council for the Capital Project Funds. However, <br />appropriations for major projects are not adopted until the actual bid award of the improvement. The appropriations <br />are not reflected in the financial statements. <br /> <br />8. Expenditures may not legally exceed budgeted appropriations at the department level unless approved by the City <br />Council. Therefore, the legal level of budgetary control is at the department level (i.e. administration, community <br />development, public safety, public services, and other). <br /> <br />9. The City Council may authorize transfers of budgeted amounts between City funds. <br /> <br /> <br />F. CASH AND INVESTMENTS <br /> <br />Cash and investment balances from all funds are pooled and invested to the extent available in authorized investments. <br />Investment income is allocated to individual funds on the basis of the fund's equity in the cash and investment pool. <br /> <br />Investments are stated at fair value, except for investments in external investment pools that meet GASB 79 requirements, <br />which are stated at amortized cost. Interest earnings are accrued at year-end. <br /> <br />For purposes of the Statement of Cash Flows, the proprietary funds consider all highly liquid investments with a maturity of <br />three months or less when purchased to be cash equivalents. All of the cash and investments allocated to the proprietary fund <br />types have original maturities of 90 days or less. Therefore, the entire balance in such fund types is considered cash <br />equivalents. <br /> <br />Permanently restricted cash and investments represents the principal and earnings portion of resources received that must be <br />retained in a permanent fund. Only earnings from these funds may be used for purposes that support environmental <br />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 date) of each year <br />for collection in the following year. The County is responsible for billing and collecting all property taxes for itself, the City, <br />the local School District and other taxing authorities. Such taxes become a lien on January 1 and are recorded as receivables <br />by the City at that date. Real property taxes are payable (by property owners) on May 15 and October 15 of each calendar <br />year. Personal property taxes are payable by taxpayers on February 28 and June 30 of each year. These taxes are collected <br />by the County and remitted to the City on or before July 15 and December 15 of the same year. Delinquent collections for <br />November and December are received the following January. The City has no ability to enforce payment of property taxes <br />by property owners. The County possesses this authority. <br /> <br /> Within the government-wide financial statements, the City recognizes property tax revenue in the period for which taxes <br />were levied. Uncollectible property taxes are not material and have not been reported. <br /> <br /> Within the governmental fund financial statements, the City recognizes property tax revenue when it becomes both <br />measurable and available to finance expenditures of the current period. In practice, current and delinquent taxes received by <br />the City in July, December, and the following January are recognized as revenue for the current year. Taxes collected by the <br />county by December 31 (remitted to the City the following January) are classified as due from county. Taxes not collected <br />by the county by December 31 are classified as delinquent taxes receivable. Delinquent taxes receivable are fully offset by <br />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 Disparities Formula) <br />per State Statute 473F. This statute provides a means of spreading a portion of the taxable valuation of commercial/industrial <br />real property to various taxing authorities within the defined metropolitan area. The valuation "shared" is a portion of <br />commercial/industrial property valuation growth since 1971. <br /> <br />50 <br />57