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CITY OF ELK RIVER,MINNESOTA <br /> RECONCILIATION OF THE STATEMENT OF REVENUES,EXPENDITURES, <br /> AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS <br /> TO THE STATEMENT OF ACTIVITIES <br /> FOR THE YEAR ENDED DECEMBER 31,2012 <br /> NET CHANGE IN FUND BALANCES-TOTAL GOVERNMENTAL FUNDS $ 519,336 <br /> Amounts reported for governmental activities in the statement of activities are different because: <br /> 1. Governmental funds report capital outlays as expenditures. However,in the <br /> statement of activities,the cost of these assets is allocated over their estimated <br /> useful lives and reported as depreciation expense. This is the amount by <br /> which capital outlays exceeded depreciation expense in the current period. <br /> Capital outlay $10,047,515 <br /> Depreciation expense (5,522,913) 4,524,602 <br /> 2. The net effect of various miscellaneous transactions involving capital assets <br /> including transfers and disposals,which increase net position. <br /> Transfers of capital assets 69,800 <br /> Disposals (585,873) <br /> Depreciation on disposals 583,580 67,507 <br /> 3. Revenues in the statement of activities that do not provide current financial <br /> resources are not reported as revenues in the governmental finds. <br /> Property taxes (35,866) <br /> Special assessments (704,866) <br /> Notes (22,849) (763,581) <br /> 4. The issuance of long-term debt provides current financial resources to govermuental <br /> funds,while the repayment of the principal of long-term debt consumes the current <br /> financial resources of governmental funds. Neither transaction,however,has any <br /> effect on net position. Also,governmental fiords report the effect of premiums, <br /> discounts and similar items when debt is first issued,whereas these amounts are <br /> deferred and amortized in the statement of activities. The amounts below are the <br /> effects of these differences in the treatment of long-term debt and related items. <br /> Issuance of long-term debt (8,500,000) <br /> Repayment of principal of long-term debt 2,127,000 <br /> Bond premium (115,164) (6,488,164) <br /> 5. Some expenses reported in the statement of activities do not require use of current <br /> financial resources and,therefore,are not reported as expenditures in governmental fields. <br /> Accrued interest payable (92,864) <br /> Amortization of issuance premium 31,131 <br /> Amortization of deferred charge from refunding (36,265) <br /> Compensated absences (116,455) <br /> Net OPEB obligation (52,163) (266,616) <br /> CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $(2,406,916) <br /> The notes to the financial statements are an integral part of this statement. <br /> 25 <br />