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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, 2005
<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 814,226
<br />Contributed capital assets 1,581,610
<br />Loss on disposal of capital assets (9,236)
<br />Proceeds from sales of capital assets (280,269)
<br />Depreciation expense (2,751,516)
<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
<br />statement of activities and repayment of principal reduces the liability. Also,
<br />governmental funds report the effect of issuance costs, premiums and discounts
<br />when debt is first issued, whereas these amounts are deferred and amortized in the
<br />statement of activities. Interest is recognized as an expenditure in the governmental
<br />funds when it is due. In the statement of activities, however, interest expense is
<br />recognized as it accrues, regardless of when it is due. The net effect of these
<br />differences in the treatment of general obligation bonds and related items is as
<br />follows:
<br />$ 5,825,395
<br />(645,185)
<br />Issuance of general obligation bonds (9,305,000)
<br />Issuance of equipment certificates (107,000)
<br />Bond premium (176,231)
<br />Bond issuance costs 96,101
<br />Repayment of bond principal 2,016,000
<br />Interest expense for general obligation bonds (52,226)
<br />Amortization of bond issuance costs (5,244)
<br />Amortization of bond premium 3,376
<br />Amortization of bond discount (398) (7,530,622)
<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, 2004
<br />Deferred revenue - December 31, 2005
<br />4,595,455
<br />9,974,886 5,379,431
<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 2005, compensated absence payable
<br />increased. (42,791)
<br />Change in Net Assets of Governmental Activities $ 2,986,228
<br />The accompanying notes are an integral part of these basic financial statements.
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