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CITY OF ELK RIVER
<br /> RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND
<br /> CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
<br /> GOVERNMENTAL ACTIVITIES
<br /> YEAR ENDED DECEMBER 31, 2016
<br /> Net Change in Fund Balances-Total Governmental Funds $ (2,777,389)
<br /> Amounts reported for governmental activities in the statement of activities are different because:
<br /> Governmental funds report capital outlays as expenditures and proceeds from the sale of capital
<br /> assets as revenues. However, in the statement of activities,assets are capitalized and the cost is
<br /> allocated over their estimated useful lives and reported as depreciation expense.This is the amount
<br /> by which depreciation exceeded capital outlays in the current period.
<br /> Capital Outlays-Improvement Costs(Net of Proceeds) $ 2,270,879
<br /> Gain on Disposal of Capital Assets 29,695
<br /> Proceeds from the Sale of Capital Assets (80,587)
<br /> Capital Contributions 663,516
<br /> Depreciation Expense (5,184,403) (2,300,900)
<br /> The governmental funds report bond proceeds as financing sources,while repayment of bond
<br /> principal is reported as an expenditure. In the statement of net position,however,issuing debt
<br /> increases long-term liabilities and does not affect the statement of activities and repayment of
<br /> principal reduces the liability. Interest is recognized as an expenditure in the governmental funds
<br /> when it is due. In the statement of activities, however,interest expense is recognized as it accrues,
<br /> regardless of when it is due.The net effect of these differences in the treatment of general
<br /> obligation bonds and related items is as follows:
<br /> Repayment of Principal on Long-Term Debt 5,100,000
<br /> Amortization of Bond Premium 51,072
<br /> Amortization of Deferred Charge on Refunding (36,265)
<br /> Change in Accrued Interest Payable 136,795 5,251,602
<br /> Delinquent and certain other property taxes and special assessments receivable will be collected
<br /> subsequent to year-end,but are not available soon enough to pay for the current period's
<br /> expenditures and,therefore,are reported as deferred inflows of resources and excluded from
<br /> revenues in the governmental funds.
<br /> Deferred Inflows of Resources-December 31,2015 1,812,940
<br /> Deferred Inflows of Resources-December 31,2016 1,354,889 (458,051)
<br /> In the statement of activities,compensated absences and other postemployment benefits are
<br /> measured by the amounts earned during the year. In the governmental funds,however,
<br /> expenditures for these items are measured by the amount of financial resources used(essentially,
<br /> the amounts actually paid). During fiscal year 2016,compensated absence payable and other post
<br /> employment benefits payable changed. (77,967)
<br /> Pension expenses in the governmental funds are measured by current year employee contributions.
<br /> Pension expenses on the statement of activities are measured by the change in net pension liability
<br /> and the related deferred inflows and outflows of resources. (1,819,567)
<br /> Change in Net Position of Governmental Activities $ (2,182,272)
<br /> See accompanying Notes to Basic Financial Statements.
<br /> (26)
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