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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 ACTIVITY
<br />December 31, 2003
<br />Statement 6
<br />Net Change in Fund Balances -Total Governmental Funds $ 1,603,747
<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 3,090,934
<br />Loss on Disposal of Capital Assets (8,019)
<br />Proceeds from sales of capital assets (23,140)
<br />Depreciation Expense (2,726,550) 333,225
<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 />General Obligation Bond Proceeds (2,670,000)
<br />Bond premium (3,566)
<br />Bond issuance costs 33,760
<br />Repayment of Bond Principal 1,684,450
<br />Interest Expense for General Obligation Bonds 16,177
<br />Amortization of bond issuance costs (207)
<br />Amortization of bond premium 20 (939,366)
<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, 2002 3,915,020
<br />Deferred revenue - December 31, 2003 4,089,200 174,180
<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 2003, compensated
<br />absence payable increased.
<br />Change in Net Assets of Governmental Activities
<br />The accompanying notes are an integral part of these basic financial statements.
<br />27
<br />(39,725)
<br />$ 1,132,061
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