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CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2023 <br /> <br /> <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 assessment <br />improvement projects in accordance with state statutes. These assessments are collectible by the City over a term of years <br />usually consistent with the term of the related bond issue. Collection of annual installments (including interest) is handled by <br />the County Auditor in the same manner as property taxes. Property owners are allowed to (and often do) prepay future <br />installments without interest or prepayment penalties. <br /> <br />Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full payment <br />is made or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed <br />to go delinquent, the property is subject to tax forfeit sale and the first proceeds of that sale (after costs, penalties and <br />expenses of sale) are remitted to the City in payment of delinquent special assessments. Generally, the City will collect the <br />full amount of its special assessments not adjusted by City Council or court action. Pursuant to state statutes, a property shall <br />be subject to a tax forfeit sale after three years unless it is homesteaded, agricultural or seasonal recreational land in which <br />event the property is subject to such sale after five years. <br /> <br />Within the government-wide financial statements, the City recognizes special assessment revenue in the period that the <br />assessment roll was adopted by the City Council. Uncollectible special assessments are not material and have not been <br />reported. <br /> <br />Within the fund financial statements, the revenue from special assessments is recognized by the City when it becomes <br />measurable and available to finance expenditures of the current fiscal period. In practice, current and delinquent special <br />assessments received by the City are recognized as revenue for the current year. Special assessments are collected by the <br />County and remitted by December 31 (remitted to the City the following January) and are also recognized as revenue for the <br />current year. All remaining delinquent, deferred and special deferred assessments receivable in governmental funds are <br />completely offset by deferred inflows of resources. <br /> <br /> <br />I. INVENTORY <br /> <br /> For governmental funds, the original cost of materials and supplies are recorded as expenditures at the time of purchase. <br />These funds do not maintain material amounts of inventories. <br /> <br />Inventories of the proprietary funds are stated at cost, which approximates market, using the first-in, first-out (FIFO) method. <br /> <br /> <br />J. PREPAID ITEMS <br /> <br />Certain prepayments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both <br />government-wide and fund financial statements. Prepaid items are reported using the consumption method and recorded as <br />expenditures/expenses at the time of consumption. <br /> <br /> <br />K. LEASES RECEIVABLE <br /> <br />Leases receivable are measured at the present value of lease payments expected to be received during the lease terms. <br /> <br />A deferred inflow of resources is recorded for the lease at the commencement of the lease in an amount equal to the initial <br />recording of the lease receivable and is recognized as revenue over the lease term. <br /> <br /> <br />51 <br />58