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6.G. - PaRedwoocT$i7 <br />City <br />Notes to the Basic Financial Statements <br />For the fiscal year ended June 30, 2018 <br />NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />H. Property Taxes <br />Property taxes attach as an enforceable lien on property as of January 1, and are collected for a 12 <br />month period effective July 1 by the San Mateo County tax collector. Taxes are billed once a year in late <br />October and are payable in two equal installments due by December 10 and April 10 of the following <br />year. The taxes not paid by those dates are subject to a penalty of 10%. <br />In September of 1993, the County of San Mateo Board of Supervisors adopted the "Teeter Plan" for <br />secured property taxes. Under the Teeter Plan, the state law allows the county to advance to the cities <br />all property taxes billed, regardless of whether the taxes have been paid. The county then is entitled to <br />keep all penalties and interest accruing on delinquent taxes. Property taxes on unsecured taxable <br />property are not affected by this change. <br />Under Proposition 13, adopted by the voters in a statewide ballot in 1978, assessed value is increased by <br />the cost of living index, not to exceed 2% as of January 1 each year except for those properties that have <br />changed ownership during the 12 -month period since the lien date. City property tax revenues are <br />recognized when levied to the extent that they result in current receivables. <br />1. Unbilled Service Receivables <br />In the water and sewer utilities, residential customers are billed bi-monthly and all commercial and <br />industrial customers monthly. Revenue is recorded as billed to customers on a cyclical basis. No accrual <br />is made for unbilled services. There were no unbilled services in Port, parking, Docktown Marina, or <br />internal service funds as of June 30, 2018. <br />There is no accrual for unbilled water services as of June 30, 2018; revenues cannot be recognized since <br />water meters are not read at such date. Management believes that the revenue from unbilled services <br />does not have a material effect on total revenue. <br />J. Capital Assets <br />All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not <br />available. Donated capital assets, donated works of art and similar items, and capital assets received in <br />a service concession arrangement are valued at acquisition value on the date donated. <br />The City's policy is to capitalize all assets with costs exceeding certain minimum thresholds, $5,000 for <br />machinery and equipment, $100,000 for buildings, improvements, and infrastructure, and with useful <br />lives exceeding two years. <br />With the implementation of GASB Statement No. 34, the City recorded all of its public domain <br />(infrastructure) capital assets placed in service after June 30, 1980, which include roads, bridges, curbs <br />and gutters, streets and sidewalks, drainage systems, and lighting systems using the basic approach. <br />43 249 <br />