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Vow <br />CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 1997 <br />F. CASH AND INVESTMENTS <br />Cash and investment balances from all funds are pooled and invested to the extent available in <br />authorized investments. Earnings from investments are allocated to individual funds on the basis of <br />the fund's equity m the cash and investment pool. <br />The City provides temporary advances to funds that have insufficient cash balances by means of an <br />advance from another fund shown as interfund receivables in the advancing fund, and an interfund <br />payable in the fund with the deficit, until adequate resources are received. <br />Investments are stated at cost (plus interest added, if any) except for assets of the Deferred <br />Compensation Plan which are reported at market value. Material purchase discounts and premiums <br />are amortized over the term of the investment. Interest earnings are accrued at the balance sheet date. <br />For purposes of the statement of cash flows the Proprietary Fund considers all highly liquid <br />investments with a maturity of three months or less when purchased to be cash equivalents. All of the <br />cash and investments allocated to the proprietary fund types have original maturities of 90 days or less. <br />Therefore the entire balance m such fund types is considered cash equivalents. <br />G. HOMESTEAD CREDIT AND AGRICULTURAL CREDIT AID (HACA) <br />Property taxes on homestead property (as defined by State Statutes) are partially reduced by HACA. <br />This credit is paid to the City by the State in lieu of taxes levied against homestead property. The State <br />remits this credit through installments each year. The credit is recognized as revenue by the City at the <br />time of collection. <br />H. LOCAL GOVERNMENT AID REVENUE RECOGNITION <br />Local government aid is provided to the City by the State as a shared tax based upon a statutory <br />formula and without restrictions. Payment from the State is generally received during each calendar <br />year for that calendar year. The City recognizes local government aid revenue when it becomes both <br />measurable and available to fmance current operations. In practice, local government aid is <br />recognized as revenue as it is received in cash. <br />I. PROPERTY TAX REVENUE RECOGNITION <br />The City Council annually adopts a tax levy and certifies it to the County in December <br />(levy /assessment date) of each year for collection in the following year. The County is responsible for <br />billing and collecting all property taxes for itself, the City, the local School District and other taxing <br />authorities. Such taxes become a lien on January 1 and are recorded as receivables by the City at that <br />date. Real property taxes are payable (by property owners) on May 15 and October 15 of each <br />calendar year. Personal property taxes are payable by taxpayers on February 28 and June 30 of each <br />year. These taxes are collected by the County and remitted to the City on or before July 15 and <br />December 15 of the same year. Delinquent collections for November and December are received the <br />following January. The City has no ability to enforce payment of property taxes by property owners. <br />The County possesses this authority. <br />35 <br />