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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, 2018 <br />NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $ 1,664,366 <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 $ 1,829,054 <br />Capital contributions 142,936 <br />Proceeds from the sale of capital assets (86,586) <br />Loss on disposal of capital assets (41,362) <br />Depreciation expense (5,289,626) (3,445,584) <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 (21,791) <br />Special assessments (366,412) <br />Other revenue 1,094,704 706,501 <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 1,575,000 <br />Amortization of issuance premium 40,296 <br />Amortization of deferred charge from refunding (36,265) <br />Accrued interest payable 17,000 1,596,031 <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 (24,930) <br />Net OPEB obligation (67,147) (92,077) <br />5. Long-term pension activity is not reported in governmental funds. 920,187 <br />CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $ 1,349,424 <br />The notes to the financial statements are an integral part of this statement. <br />40i <br />