07-26-1999 Council Packet - Laserfiche WebLink

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CITY OF ORONO, MINNESOTA Notes to Financial Statements (continued) December 31, 1998 NOTE I - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Proprietary Funds are accounted for using the accrual basis of accounting. Under this method, revenues are recognized when earned and expenses are recognized when they are incurred. The City applies only those applicable pronouncements of the Financial Accounting Standards Board issued on or before November 30, 1989 in accounting and reporting for its proprietary operations. E. Cash and Investments Cash and temporary investments include balances from all funds that are combined and invested to the extent available in various securities authorized by state law. Earnings on pooled investments are allocated to the respective funds on the basis of applicable cash balance participation by each fund. Cash and in\ cstments held by trustee includes Debt Service Funds held in a trust account as required by the 1991 Public Facilities Revenue Bonds debt issue and the 1998 Public Facilities Revenue Refunding Bonds debt issue. Short-term highly liquid debt instruments (including commercial paper, bankers’ acceptances, and U.S. Treasury and agency obligations) purchased with a remaining maturity of one year or less are repoied at amortized cost. Other investments are reported at fair value. Securities traded on national exchanges are valued at the last reported sales price. Investments that do not have an established market are reported at estimated fair value. F. Property Taxes Property tax levies are determined by the City Council in October of each year, and are certified to Hennepin County for collection in the following year. In Minnesota, counties act as collection agents for all property taxes. A portion of the property taxes levied is paid by the State of Minnesota through Homestead and Agricultural Credit Aid (HACA), which is included in intergovernmental revenue in the financial statements. The county spreads all levies over taxable property. Such taxes become a lien on January I and are recorded as receivables by the City on that date. Revenue is accrued and recognized in the year collectible. Taxes which remain unpaid at December 31 are classified as delinquent taxes receivable. Revenue from property taxes which is not collected within 60 days of year-end is deferred since it is not available to meet obligations of the current year. Property taxes may be paid by taxpayers in two equal installments on May 15 and October 15. The county provides tax settlements to ciiies and other taxing districts several times throughout the year. G. Special Assessments Special assessments represent the financing for public improvements paid for by benefitting property owners. These assessments are recorded as receivables upon certification to the county. The corresponding revenue from the delinquent (unremitted) and defeired (certified but not yet levied) special assessments receivable is deferred until the year in which it becomes available (collected within 60 days of year-end). -29- I I I I 1 I J