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<br />NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br /> <br />F. Receivables <br /> <br />All miscellaneous accounts receivable are presented net of an allowance for doubtful accounts. Since the <br />City is generally able to certify delinquent amounts to the county for collection as special assessments, no <br />allowance for uncollectible accounts has been provided on these receivables. The only receivables not <br />expected to be fully collected within one year are property taxes and special assessments receivable. <br /> <br />G. Property Taxes <br /> <br />Property tax levies are set by the City Council by December of each year and are certified to the County <br />Auditor for collection in the following year. In Minnesota, counties act as collection agents for all <br />property taxes. <br /> <br />A portion of the property taxes levied is paid by the state of Minnesota through various tax credits, which <br />is included in intergovernmental revenue in the financial statements. <br /> <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. Real property taxes may be paid by taxpayers in two <br />equal installments on May 15 and October 15. Personal property taxes are due in full on May 15. The <br />county provides tax settlements to cities and other taxing districts several times a year. Taxes which <br />remain unpaid at December 31 are classifie.d as delinquent taxes receivable. <br /> <br />H. Special Assessments <br /> <br />Special assessments represent the financing for public improvements paid for by the benefiting property <br />owners. These assessments are recorded as delinquent (levied but unremitted) or deferred (certified but <br />not yet levied) special assessments receivable. <br /> <br />I. Inventories and prepaid items <br /> <br />The Water Utility Proprietary Fund inventory consists of water meters. All inventory is accounted for at <br />cost on a specific identification basis. <br /> <br />Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as <br />prepaid items in both government-wide and fund financial statements. <br /> <br />J. Interfund Receivables and Payables <br /> <br />Activity between funds that is representative of lending or borrowing arrangements is reported as either <br />"due to/from other funds" (current portion) or "advances to/from other funds." All other outstanding <br />balances between funds are reported as "due to/from other funds." Any residual balances outstanding <br />between the governmental activities and business-type activities are reported in the governm~nt-wide <br />financial statements as "internal balances." <br /> <br />. K. Capital Assets <br /> <br />Capital assets, which include property, buildings, improvements, equipment, and infrastructure assets are <br />reported in the applicable governmental or business-type activities columns in the government-wide <br />financial statements. Such assets are capitalized at historical cost, or estimated historical cost for assets <br />where actual historical cost is not available. Donated assets are recorded as capital assets at their <br />estimated fair market value at the date of donation. The City defines capital assets as those with an initial, <br /> <br />-32- <br />