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CITY OF LINO LAKES, MINNESOTA Statement 6 <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, 2007 <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 <br />Contributed capital assets <br />Capital contributions to business -type funds <br />Gain on disposal of capital assets <br />Proceeds from sales of capital assets <br />Depreciation expense <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 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 />Wow 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 <br />Issuance of equipment certificates <br />Bond discount <br />Bond issuance costs <br />Repayment of bond principal <br />NNW <br />Interest expense for general obligation bonds <br />Amortization of bond issuance costs <br />Amortization of bond premium <br />Amortization of bond discount <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, 2006 <br />Deferred revenue - December 31, 2007 <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 2007, compensated absence payable <br />increased. <br />Change in Net Assets of Governmental Activities <br />The accompanying notes are an integral part of these basic financial statements. <br />$ 3,034,602 <br />1,978,457 <br />145,450 <br />(776,712) <br />17,424 <br />(54,037) <br />(2,783,309) (1,472,727) <br />(4,215,000) <br />(160,000) <br />25,798 <br />39,917 <br />1,973,000 <br />(80,119) <br />(19,845) <br />19,120 <br />(2,027) $ (2,419,156) <br />$ 10,014,771 <br />9,606,192 $ (408,579) <br />(51,140) <br />$ (1,317,000) <br />