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CITY OF LINO LAKES, MINNESOTA
<br />RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND
<br />CHANGES IN FUND BALANCE TO THE STATEMENT OF ACTIVITIES
<br />Year Ended December 31, 2010
<br />Statement 6
<br />Net Change in Fund Balances -Total Governmental Funds $ 93,914
<br />Amounts reported for governmental activities in the statement of activities are different because:
<br />Governmental funds report capital outlays as expenditures. However, in the statement of activities, assets are
<br />capitalized and the cost is allocated over their estimated useful lives and reported as depreciation expense.
<br />Capital outlays $ 580,075
<br />Capital contributions to business -type funds (75,200)
<br />Loss on disposal of capital assets (21,332)
<br />Proceeds from sales of capital assets (20,600)
<br />Depreciation expense (2,953,780)
<br />The governmental funds report bond proceeds as financing sources, while repayment of bond principal is reported
<br />as an expenditure. In the statement of net assets, however, issuing debt increases long -term liabilities and does not
<br />affect the statement of activities and repayment of principal reduces the liability. Also, governmental funds report
<br />the effect of issuance costs, premiums and discounts when debt is first issued, whereas these amounts are deferred
<br />and amortized in the statement of activities. Interest is recognized as an expenditure in the governmental funds
<br />when it is due. In the statement of activities, however, interest expense is recognized as it accrues, regardless of
<br />when it is due. The net effect of these differences in the treatment of general obligation bonds and related items is
<br />as follows:
<br />Issuance of note payable (1,000,000)
<br />Issuance of equipment certificates (170,000)
<br />Bond premium (10,980)
<br />Bond issuance costs 26,265
<br />Repayment of bond principal 2,831,000
<br />Change in accrued interest expense for general obligation bonds (22,067)
<br />Amortization of bond issuance costs (39,083)
<br />Amortization of bond premium 20,065
<br />Amortization of bond discount (6,469)
<br />Delinquent and deferred property taxes and special assessments receivable will be collected subsequent to year-
<br />end, but are not available soon enough to pay for the current period's expenditures and, therefore, are deferred in
<br />the governmental funds.
<br />Deferred revenue - December 31, 2009 9,358,924
<br />Deferred revenue - December 31, 2010
<br />In the statement of activities, compensated absences and other post employment benefits are measured by the
<br />amounts earned during the year. In the governmental funds, however, expenditures for these items are measured
<br />by the amount of financial resources used (essentially, the amounts actually paid). During fiscal year 2010,
<br />compensated absence payable and other post employment benefits payable increased.
<br />Change in Net Assets of Governmental Activities
<br />The accompanying notes are an integral part of these basic financial statements.
<br />29
<br />(2,490,837)
<br />1,628,731
<br />9,130,784 (228,140)
<br />(15,790)
<br />$ (1,012,122)
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