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CITY OF ELK RIVER, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />DECEMBER 31, 2006 <br />Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED <br />Interfund transfers: <br />Governmental funds:Transfer InTransfer Out <br />Major funds - <br />General$432,686$688,518 <br />Park dedication390,000- <br />Improvement bonds434,8331,385,507 <br />Capital projects1,385,507847,493 <br />Nonmajor funds3,280,4482,093,130 <br />Total governmental funds5,923,4745,014,648 <br />Proprietary funds: <br />Municipal liquor 233,300- <br />Garbage47,667- <br />Sewer 272,175- <br />Water-31,018 <br />Electric 420,000- <br />Total proprietary funds47,667956,493 <br />Total$5,971,141$5,971,141 <br />Interfund transfers are used to 1) allocate resources to the funds that received benefit from services provided by another <br />fund, 2) move revenues from the fund with collection authorization to debt service funds as principal and interest <br />payments come due, and 3) close completed bond and project funds. <br />E.Leases <br />The City has entered into several lease agreements as lessee for financing the acquisition of a golf course and golf course <br />equipment with a down payment of $328,969 and also for the acquisition of park property with a down payment of <br />$19,000. The lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded at <br />the present value of their future minimum lease payments as of the inception date <br />The assets acquired through capital leases are as follows: <br />Governmental <br />Asset:Activities <br />Land$ 2,180,000 <br />Equipment 152,694 <br />Less: Accumulated depreciation (15,269) <br /> Total$ 2,317,425 <br /> <br />48 <br /> <br />