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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, 2019
<br />Net Change in Fund Balances -Total Governmental Funds $ 26,240,907
<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 $ 16,510,773
<br />Gain on Disposal of Capital Assets 41,698
<br />Proceeds from the Sale of Capital Assets (127,190)
<br />Depreciation Expense (5,164,691) 11,260,590
<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
<br />1,315,000
<br />Proceeds from Issuance of Bonds
<br />(32,715,000)
<br />Premium on Bonds Issued
<br />(3,234,515)
<br />Amortization of Bond Premium
<br />75,418
<br />Amortization of Deferred Charge on Refunding
<br />(36,265)
<br />Change in Accrued Interest Payable
<br />(305,885) (34,901,247)
<br />Delinquent and certain other property taxes, special assessments, and intergovernmental
<br />receivables will be collected subsequent to year-end, but are not available soon enough to pay for
<br />the current period's expenditures and, therefore, are reported as deferred inflows of resources and
<br />excluded from revenues in the governmental funds.
<br />Deferred Inflows of Resources - December 31, 2018 1,691,963
<br />Deferred Inflows of Resources - December 31, 2019 2,822,950 1,130,987
<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). (32,817)
<br />Pension expenditures in the governmental funds are measured by current year employee
<br />contributions. Pension expenses on the statement of activities are measured by the change in net
<br />pension liability and the related deferred inflows and outflows of resources. (858,166)
<br />Change in Net Position of Governmental Activities $ 2,840,254
<br />See accompanying Notes to Basic Financial Statements.
<br />(27)
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