Annual Financial Report 12/31/1990

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Page 8 of 23 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1990 NOTE 2 DETAIL NOTES ON ALL FUND AND ACCOUNT GROUPS (Continued) SPECIAL ASSESSMENT REVENUE RECOGNITION Special assessments are levied against benefiting properties for the cost or a portion of the cost of special assessment improvement projects in accordance with State Statutes. Usually, the City adopts the assessment roll when the individual project is completed or substantially completed. The City certifies the adopted assessment roll to the County for collection. Collection of annual installments including interest is handled by the County in the same manner as for property taxes. Assessments are collectible over a term of years, generally consistent with the term of years of the related bond issue. Property owners are allowed to and often do prepay future installments without interest or prepayment penalty. Revenue from special assessments is recognized by the City when it becomes measurable and available to finance expenditures of the current fiscal period. In practice, current and delinquent special assessments received by the City are recognized as revenue for the current year. Special assessments are collected by the County and remitted by December 31 (remitted to the City the following January) and are also recognized as revenue for the current year. All remaining delinquent, deferred and special deferred assessments receivable in governmental funding are completely offset by deferred revenues. Once a special assessment roll is adopted, the amount attributed to each parcel becomes a lien upon that property until full payment is made or the amount is determined to be excessive by the City Council or court action. If special assessments become delinquent, the property is subject to tax forfeit sale. The first proceeds 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. Pursuant to State Statutes, a property shall be subject to 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. PARK DEDICATION FEE REVENUE RECOGNITION The City receives park dedication fees from developers. The amount due the City is payable when land is platted The City has granted a delay in collection from several developers pending actual development of the platted property. The amount not collected is recorded as an account receivable, offset by deferred revenue. The amount of uncollected fees totaled $5,060 at December 31, 1990 and 1989. SHARE IN GAS FRANCHISE PROFITS The City receives a share of the gross billings for natural gas sales by a neighboring city which provides service within the City of Lino Lakes. The amount earned for 1990 totaled $14,910. This amount was received in March of 1991 and will be recorded as revenue (available criteria) in 1991.