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City of Elk River <br />Reconciliation of the Statement of Revenues, <br />Expenditures, and Changes in Fund Balances to the <br />Statement of Activities - Governmental Funds <br />Year Ended December 31, 2021 <br />Total change in fund balances - governmental funds $ (13,337,173) <br />Amounts reported for governmental activities in the Statement of Activities are different because: <br />Capital outlays are reported in governmental funds as expenditures. However, in the Statement <br />of Activities, the cost of those assets is allocated over the estimated useful lives as depreciation <br />expense. <br />Capital outlays 25,052,551 <br />Depreciation expense (6,151,592) <br />Loss on disposal of capital assets (2,157,020) <br />Some expenses are recognized as paid in the governmental funds but recognized as the expense is <br />incurred in the Statement of Activities. <br />Compensated absences payable (134,148) <br />Total other post employment benefits (OPEB) liability (2,475) <br />Principal payments on long-term debt are recognized as expenditures in the governmental funds <br />but as an increase in the net position in the Statement of Activities. <br />Bond principal payments 2,195,000 <br />Governmental funds report the effects of bond premiums and discounts when debt is first issued, <br />whereas these amounts are deferred and amortized in the Statement of Activities. (192,754) <br />Interest on long-term debt in the Statement of Activities differs from the amount reported in the <br />governmental funds because interest is recognized as an expenditure in the funds when it is due <br />and thus requires use of current financial resources. In the Statement of Activities, however, <br />interest expense is recognized as the interest accrues, regardless of when it is due. (185,090) <br />Proceeds from long-term debt are recognized as another financing source in the governmental <br />funds but have no impact on the changes in net position in the Statement of Activities. (4,805,000) <br />Governmental funds recognize pension contributions as expenditures at the time of payment <br />whereas the Statement of Activities factors in items related to pensions on a full accrual <br />perspective. <br />Pension expense 1,593,312 <br />Revenues in the Statement of Activities that do not provide current financial resources are not <br />reported as revenues in the funds. <br />State shared taxes (3,381,714) <br />Certain revenues are recognized as soon as they are earned. Under the modified accrual basis of <br />accounting certain revenues cannot be recognized until they are available to liquidate liabilities <br />of the current period. <br />Property taxes 3,769 <br />Special assessments (120,881) <br />Change in net position - governmental activities $ 4,001,785 <br />See notes to basic financial statements. 44 <br />