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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 />December 31, 2004
<br />Statement 6
<br />Net Change in Fund Balances -Total Governmental Funds $ 23,013
<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,
<br />assets are capitalized and the cost is allocated over their estimated useful lives and reported as
<br />depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current
<br />period.
<br />Capital Outlays 3,688,412
<br />Loss on Disposal of Capital Assets (20,334)
<br />Proceeds from sales of capital assets (99,151)
<br />Depreciation Expense (2,761,056) 807,871
<br />The governmental funds report bond proceeds as financing sources, while repayment of bond principal
<br />is reported as an expenditure. In the statement of net assets, however, issuing debt increases long -term
<br />liabilities and does not affect the statement of activities and repayment of principal reduces the liability.
<br />Also, governmental 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 activities. Interest is
<br />recognized as an expenditure in the governmental funds when it is due. In the statement of activities,
<br />however, interest expense is recognized as it accrues, regardless of when it is due. The net effect of
<br />these differences in the treatment of general obligation bonds and related items is as follows:
<br />Issuance of general obligation bonds (1,330,000)
<br />Issuance of equipment certificates (274,000)
<br />Payment to Refunded Bond Escrow Agent 1,170,000
<br />Bond discount 6,057
<br />Bond issuance costs 21,787
<br />Repayment of bond principal 1,960,000
<br />Interest expense for general obligation bonds 30,342
<br />Amortization of bond issuance costs (2,725)
<br />Amortization of bond premium 235
<br />Amortization of bond discount (66) 1,581,630
<br />Delinquent and deferred property taxes and special assessments receivable will be collected subsequent
<br />to year-end, but are not available soon enough to pay for the current period's expenditures, and
<br />therefore are deferred in the governmental funds.
<br />Deferred revenue - December 31, 2003 4,089,200
<br />Deferred revenue - December 31, 2004 4,595,455 506,255
<br />In the statement of activities, compensated absences are measured by the amounts earned during the
<br />year. In the governmental funds, however, expenditures for these items are measured by the amount of
<br />financial resources used (essentially, the amounts actually paid). During fiscal year 2004, compensated
<br />absence payable increased.
<br />(47,600)
<br />Change in Net Assets of Governmental Activities $ 2,871,169
<br />The accompanying notes are an integral part of these basic financial statements.
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