Annual Financial Report 12/31/1988

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Page 6 of 19 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1988 NOTE 2 DETAIL NOTES ON ALL FUND AND ACCOUNT GROUPS (Continued) CASH AND INVESTMENTS (continued) Credit Risk Cateaory Carrying Market Investment Type 1 2 3 Amount Value U.S. Government of its Agencies $0 $0 Investment Company Shares 264.505 264.505 Totals $264,505 $264,505 GRANT REVENUE RECOGNITION The City receives various Federal, State and other grants, the purpose of which is to fund specific City expenditures. These revenues are recognized at the time of the specific expenditures. MUNICIPAL STATE AID Municipal State Aid (MSA) is recognized as revenue in the period the funds are designated for specific construction projects. LOCAL GOVERNMENT AID Local government aid is provided by the State. This aid is provided as a shared tax based upon a statutory formula and without restrictions. Payment from the State is generally received during each calendar year. The City recognizes local government aid revenue when it becomes both measurable and available to finance current operations. In practice, local government aid is recognized as revenue as it is received in cash. PROPERTY TAX REVENUE RECOGNITION Property tax levies are set by the Council in October each year, and are certified to Anoka County for collection in the following year. The County spreads all levies over assessable property. Such taxes become a lien on January 1 and are recorded as receivable by the City at that date. The County is responsible for billing and collecting all property taxes for itself, the City, the local School District and other taxing authorities. These taxes are payable by May 15 and October 15 of each calendar year by the property owners. These taxes are collected by the County and remitted to the City by approximately July 15 and December 15. Additionally, delinquent collections (November through December) are remitted to the City each January. The City has no ability to enforce payment of property taxes by property owners. The County possesses this authority. Pursuant to State Statutes, a property shall be subject to a tax forfeit sale after 3 years unless it is homesteaded, agricultural, or seasonal recreational land (as defined in state statutes) in which event the property is subject to such sale after 5 years.