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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 />Ycar Ended December 3I, 2006
<br />Net Change in Fund Balances -Total Governmental Funds
<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
<br />statement of activities, assets are capitalized and the cost is allocated over their
<br />estimated useful lives and reported as depreciation expense.
<br />Capital outlays 6,900,199
<br />Contributed capital assets 1,511,826
<br />Gain on disposal of capital assets 33,217
<br />Proceeds from sales of capital assets (43,856)
<br />Dcprcciation expense (2,692,742) 5,708,644
<br />The govemmental funds report bond proceeds as financing sources, while repayment
<br />of bond principal is reported as an expenditure. In the statement of net assets,
<br />however, issuing debt increases long -term liabilities and does not affect the statement
<br />of activities and repayment of principal reduces the liability. Also, governmental
<br />funds report the effect of issuance costs, premiums and discounts when debt is first
<br />issued, whereas these amounts are deferred and amortized in the statement of
<br />activities. Interest is recognized as an expenditure in the governmental funds when it
<br />is due. In 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 />Issuance of general obligation bonds (6,020,000)
<br />Issuance of equipment certificates (307,000)
<br />Payment to refunded bond escrow agent 7,225,000
<br />Bond premium (450)
<br />Bond discount 13,635
<br />Bond issuance costs 85,852
<br />Repayment of bond principal 2,155,000
<br />Interest expense for general obligation bonds (5,527)
<br />Amortization of bond issuance costs (13,569)
<br />Amortization of bond premium 19,086
<br />Amortization of bond discount (706) $ 3,151,321
<br />$ (5,147,604)
<br />Delinquent and deferred property taxes and special assessments receivable will be
<br />collected subsequent to year -end, but are not available soon enough to pay for the
<br />current period's expenditures, and therefore are deferred in the governmental funds.
<br />Deferred revenue - December 31, 2005
<br />Deferred revenue - December 31, 2006
<br />$ 9,974,886
<br />10,014,771 $ 39,885
<br />In the statement of activities, compensated absences are measured by the amounts
<br />earned during the year. In the governmental funds, however, expenditures for these
<br />items are measured by the amount of financial resources used (essentially, the
<br />amounts actually paid). During fiscal year 2006, compensated absence payable
<br />increased. (70,181)
<br />Change in Net Assets of Governmental Activities S 3,682,065
<br />The accompanying notes are an integral part of these basic financial statements.
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