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<br /> 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 /> YEAR ENDED DECEMBER 31, 2007 <br />' NET CHANGE IN FUND BALANCES -TOTAL GOVERNMENTAL FUNDS $ 4,876,969 <br /> Amounts reported for governmental activities in the statement of activities are different because: <br /> ]. Govemmental funds report capital outlays as expenditures. However, in the <br /> statement of activities [he cost of those assets is allocated over their estimated <br /> useful lives and reported as depreciation expense. This is the amount by <br /> which depreciation exceeded capital outlays in the current period. <br /> Capita] outlay 513,393,095 <br /> Depreciation expense (4,703,450) 8,689,645 <br /> 2. The net effect of various miscellaneous transactions involving capital asset's <br /> including donations and disposals, which increase net assets. <br />r i <br /> D <br />sposals (794,645) <br /> Depreciation on disposals 332,001 (462,644) <br />' 3. 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 67,830 <br /> Special assessments 651,171 <br /> Notes receivable (8,872) 710,129 <br />' 4. The issuance of loner term debt provides current financial resources to governmental <br /> lunds, while the repayment of the principal of long-term debt consumes the current <br /> financial resom~ces of governmental funds. Neither transaction, however, has any <br />' effect on net assets. This amount is the net effect of these differences in the <br /> treatment of tong-term debt and related items. <br /> Issuance oflong-term debt (13,715,500) <br /> Repayment of principal of long-term debt 1,767,617 (11,947,883) <br /> 5. Some expenses reported in the statement of activities do not require use of current <br /> financial resources and, therefore, are not reported as expenditures in governmental funds. <br /> Accrued interest payable (156,635) <br /> Compensated absences (50,184) (206,819) <br /> CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES $ 1,659,397 <br /> <br />u <br />' The notes to the financial statements are an integral pan of this statement. <br />27 <br />