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The notes to the financial statements are an integral part of this statement. <br />25 <br />NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS (9,221,717)$ <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 /> Capital outlay 5,216,676$ <br /> Capital contributions 221,720 <br /> Depreciation expense (5,329,081) 109,315 <br />2.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 2,550 <br /> Special assessments (204,885) <br /> Other revenue (167,092) (369,427) <br />3.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 10,675,000 <br /> Amortization of issuance premium 51,072 <br /> Amortization of deferred charge from refunding (36,265) <br /> Accrued interest payable 175,650 10,865,457 <br />4.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 /> Compensated absences (60,608) <br /> Net OPEB obligation (41,399) (102,007) <br />5.Long-term pension activity is not reported in governmental funds.(70,433) <br />CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES 1,211,188$ <br />FOR THE YEAR ENDED DECEMBER 31, 2017 <br />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