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CITY OF ELK RIVER, MINNESOTA
<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, 2020
<br />Net Change in Fund Balances -Total Governmental Funds
<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
<br />is allocated over their estimated useful lives and reported as depreciation expense. In addition,
<br />governmental funds report proceeds received on capital asset disposal are other financing
<br />sources while on the statement of activities these amounts are applied to the net book value of
<br />the assets disposed of to determine a gain or loss on disposal. These are the amounts by which
<br />depreciation exceeded capital outlays in the current period and by which the net book value of
<br />disposals exceeded proceeds received.
<br />Capital Outlays $ 25,687,224
<br />Loss on Disposal of Capital Assets (1,719,092)
<br />Proceeds from the Sale of Capital Assets (432,271)
<br />Depreciation Expense (5,473,336)
<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
<br />funds when it is due. In the statement of activities, however, interest expense is recognized as it
<br />accrues, regardless of when it is due. The net effect of these differences in the treatment of
<br />general obligation bonds and related items is as follows:
<br />Repayment of Principal on Long -Term Debt
<br />1,900,000
<br />Proceeds from Issuance of Bonds
<br />(14,775,000)
<br />Premium on Bonds Issued
<br />(1,364,913)
<br />Amortization of Bond Premium
<br />167,481
<br />Amortization of Deferred Charge on Refunding
<br />(36,265)
<br />Change in Accrued Interest Payable
<br />243,690
<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
<br />for the current period's expenditures and, therefore, are reported as deferred inflows of
<br />resources and excluded from revenues in the governmental funds.
<br />Deferred Inflows of Resources - December 31, 2019 2,822,950
<br />Deferred Inflows of Resources - December 31, 2020 5,402,643
<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
<br />(essentially, the amounts actually paid).
<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
<br />net pension liability and the related deferred inflows and outflows of resources.
<br />Change in Net Position of Governmental Activities
<br />1,486,159
<br />18,062,525
<br />(13,865, 007)
<br />2,579,693
<br />(134,649)
<br />179,538
<br />$ 8,308,259
<br />See accompanying Notes to Basic Financial Statements.
<br />(27)
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