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r <br />CITY OF ORONO, MINNESOTA <br />Notes to Financial Statements (continued) <br />December 31, 1996 <br />S'- <br />i' \ <br />NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />The county spreads all levies over taxable property. Such taxes become a lien on January 1 and are <br />recorded as receivables by the City on that date. Revenue is accrued and recognized in the year collectible. <br />Taxes which remain unpaid at December 31 are classified as delinquent taxes receivable. Revenue from <br />property taxes which is not collected within 60 days of year-end is deferred since it is not available to meet <br />obligations of the current year. <br />Property taxes may be paid by taxpayers in two equal installments on May 15 and October 15. The county <br />provides tax settlements to cities and other taxing districts several times throughout the year. <br />G. Special Assessments <br />Special assessments represent the financing for public improvements paid for by benefitting property <br />owners. These assessments are recorded as receivables upon certification to the county. The <br />corresponding revenue from the delinquent (unremitted) and deferred (certified but not yet levied) special <br />assessments receivable is deferred until the year in which it becomes available (collected within 60 days <br />of year-end>. <br />H. Inventories <br />Inventories are stated at the lower of cost or market on the first-in, first-out basis and are accounted for <br />using the consumption method. Inventory in the Golf Course Operating Fund consists of resale items. <br />I. Property, Plant, and Equipment <br />Fixed assets are stated at cost, estimated historical cost, or in the case of contributions, at fair market value <br />at the time received. <br />1. General Fixed Assets Account Group - No depreciation has been provided on general fixed <br />assets. The costs of property, plant, and equipment are accounted for as current expendinires of <br />the governmental Kind types in the year purchased. The City has elected not to record <br />infrastructure fixed assets in its accounting records. Interest incurred during construction of <br />general fixed assets is not capitalized. <br />2. Proprietary Fund Type - Fixed assets of the Proprietary Funds are depreciated using the straight- <br />line method over the estimated useful lives of the assets, as follows; <br />Buildings and improvements <br />Equipment <br />Distribution/collection system <br />25-50 years <br />3-20 years <br />10-75 years <br />Depreciation on contributed assets charged to operations is closed to the contributed equity <br />account. <br />-31-