Annual Financial Report 12/31/1982

Home Search

CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1982 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued SPECIAL ASSESSMENT REVENUE RECOGNITION - Continued Once a special assessment roll is adopted, the amount attributed to each parcel — is a lien upon that property until full payment is made or the amount is deter- mined to be excessive by the City Council or court action. If special assessments are allowed to go delinquent, after a State statute determined number of years, the property is subject to tax - forfeit sale and the first pro- ceeds of that sale (after costs, penalties and expenses of sale) are remitted to the City in payment of delinquent special assessments. Generally, the City will collect the full amount of its special assessments not adjusted by City Council or court action. Accordingly, no allowance for potentially uncollec- tible assessments has been provided. ESTIMATED UNCOLLECTIBLE ASSESSMENTS The bonds of the 1974 Improvement Special Assessment Fund were retired in 1981 and the remaining assets were transferred to the General Fund. These assets included $27,938 of delinquent assessments receivable. None of the delinquent assessments were collected in 1981. Because of the uncertainty of the timing of collection, these assessments do not meet the revenue recognition criteria of being both measurable and available. As a result, an allowance for uncollectible assessments of $27,938 was established at the time of transfer to the General Fund. During 1982, $18,142 of these assessments were collected and — the allowance was reduced to $9,796 at December 31, 1982. PROPERTY, PLANT, AND EQUIPMENT General Fixed Assets. Roads, bridges, curbs and gutters, streets and sidewalks, and drainage systems are not capitalized. The fixed assets are valued at cost or estimated replacement value as of December 31, 1975. Additions since 1975 are stated at cost. The policy of stating such assets at other than cost is at variance with generally accepted accounting principles. These assets are not accounted for in detailed inventory records. MEMO Proprietary Fund Assets. Fixed assets related to the proprietary fund are accounted for in that fund. They are valued at actual or estimated original • cost. Depreciation of all exhaustible fixed assets of this fund is charged as an expense against operations. Accumulated depreciation is reported on that fund's balance sheet. Depreciation is based upon the estimated useful lives of the assets using the straight -line method. Depreciation on contributed assets charged to operations is closed to the contributed equity account. The esti- mated useful lives are as follows: Well 20 Years Buildings 25 Years Equipment 5 - 10 Years Water and sewer system 50 Years