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CITY OF LITTLE CANADA, MINNESOTA
<br />RECONCILIATION OF THE STATEMENT OF REVENUES,
<br />EXPENDITURES, AND CHANGES IN FUND BALANCES OF
<br />GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
<br />For The Year Ended December 31, 2019
<br />With Comparative Data for the Year Ended December 31, 2018
<br />2019 2018
<br />Net changes in fund balances - total governmental funds 202,665$ (1,637,229)$
<br />Governmental funds report capital outlays as expenditures. However, in the
<br />statement of activities the cost of those assets is allocated over their estimated useful lives
<br />and reported as depreciation expense. This is the amount by which capital outlays
<br />exceeded depreciation in the current period.
<br />Capital outlays-improvement costs 1,136,606$
<br />Gain on disposal of capital assets 20,481
<br />Proceeds from the sale of capital assets (34,500)
<br />Depreciation expense (1,720,880)(598,293) (5,162,966)
<br />The governmental funds report bond proceeds as financing sources, while repayment
<br />of bond principal is reported as an expenditure. In the statement of net position
<br />however, issuing debt increases long-term liabilities and does not affect the
<br />statement of activities and repayment of principal reduces the liability. Interest
<br />is recognized as an expenditure in the governmental funds when it is due. In
<br />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
<br />treatment of general obligation bonds and related items is as follows:
<br />Amortization of bond premium 10,358
<br />Repayment of notes payable 33,077
<br />Repayment of bond principal 1,235,000
<br />Change in accrued interest expense 8,229 1,286,664 1,878,789
<br />Delinquent and certain other property taxes and special assessment receivable will
<br />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
<br />inflows of resources and excluded from revenues in the governmental funds.
<br />Deferred inflows of resources - December 31, 2019 3,428,021
<br />Deferred inflows of resources - December 31, 2018 3,940,127 (512,106) 173,031
<br />Pension expenditures in the governmental funds are measured by current year
<br />employee contributions. Pension expenses on the statement of activities are
<br />measured by the change in net pension liability and the related deferred inflows
<br />and outflows of resources.(25,753) 58,280
<br />In the statement of activities, compensated absences and other postemployment
<br />benefits are measured by the amounts earned during the year. In the governmental
<br />funds, however, expenditures for these items are measured by the amount of
<br />financial resources used (essentially, the amounts actually paid). During the
<br />current fiscal year, compensated absence payable and other post employment
<br />benefits payable changed.(13,795) 4,496
<br />Change in net position of governmental activities 339,382$ (4,685,599)$
<br />The accompanying notes are an integral part of these financial statements.
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