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1 <br />I. Property Taxes <br />1 <br />1 <br />1 <br />1 <br />1 2. ACCOUNTING CHANGES <br />A. Change in Accounting for Compensated Absences <br />In 1982, the City changed its accounting policy for <br />compensated absences to conform with the provisions of <br />Statement No. 4 issued by the National Council on <br />Governmental Accounting. The effect of this change is to <br />recognize the non - current portion of the estimated liability <br />for compensated absences in the General Long -Term Debt <br />Account Group, rather than only as a footnote to the <br />financial statements. <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />Property tax levies are set by the City Council with the <br />levy certified to the County, which acts as collection <br />agent, in October prior to the year collectible. Such <br />taxes constitute a lien on the property on January 1 of the <br />year collectible. Cities in Minnesota operate under a levy <br />limitation law which generally permits an eight percent <br />increase in taxes levied per capita each year along with <br />certain permitted special levies as set forth in Minnesota <br />Statutes. The levy limitation law applied to the City of <br />Ramsey beginning in 1981. Levies for bonded indebtedness <br />are not limited by this law. <br />This change in accounting has been applied retroactively, <br />and accordingly, a liability for compensated absences as of <br />January 1, 1981 of $13,279 has been recorded in the General <br />Long -Term Debt Account Group. The effect of this change on <br />fund operations for 1981 and 1982 was not material. <br />B. Reclassification of Funds <br />The City finances many of its street improvements with <br />general obligation improvement bonds which are backed by the <br />full faith and credit of the City. Varying portions of the <br />improvements so financed are generally assessed against <br />benefited property owners. In the past, this improvement <br />activity was accounted for in special assessment funds which <br />included the capital project construction, debt service and <br />outstanding bonds. Because the bonds are backed by the <br />full faith and credit of the City, it has been determined <br />that it would be preferable to report the permanent <br />improvement activity in the capital project and debt service <br />fund types, and the outstanding general obligation <br />improvement bonds in the general long -term debt account <br />group. <br />-15- <br />