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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, 2014 <br />NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS <br />Amounts reported for governmental activities in the statement of activities <br />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 depreciation expense exceeded capital outlays in the current period. <br />$ 533,536 <br />Capital outlay $ 2,2029494 <br />Depreciation expense (5,9603915) (31758,421) <br />2. The net effect of various miscellaneous transactions involving capital assets <br />including transfers and disposals, which decrease net position. <br />Donations 39105,000 <br />Transfers of capital assets (3135287) <br />Disposals (429,632) <br />Depreciation on disposals 414,398 2,7761479 <br />3. Revenues in the statement of activities that do not provide current financial <br />resources are not reported as revenues in the governmental funds. <br />Property taxes (131,020) <br />Special assessments (516,924) (647,944) <br />4. The issuance of long -term debt provides current financial resources to <br />governmental funds, while the repayment of the principal of long -term debt <br />consumes the current financial resources of governmental funds. Neither <br />transaction, however, has any effect on net position. Also, governmental <br />funds report the effect of premiums, discounts and similar items when debt <br />is first issued, whereas these amounts are deferred and amortized in the <br />statement of activities. The amounts below are the effects of these differences <br />in the treatment of long -term debt and related items. <br />Repayment of principal of long -term debt 15535,000 <br />Some expenses reported in the statement of activities do not require use of <br />current financial resources and, therefore, are not reported as expenditures <br />in governmental funds. <br />Accrued interest payable <br />14,899 <br />Amortization of issuance premium <br />51,072 <br />Amortization of deferred charge from refunding <br />(36,265) <br />Compensated absences <br />(61,690) <br />Net OPEB obligation <br />(69,992) (101,976) <br />CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES <br />$ 336,674 <br />The notes to the financial statements are an integral part of this statement. <br />25 <br />