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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 />Year Ended December 31, 2013 <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 statement of activities, <br />assets are capitalized and the cost is allocated over their estimated useful lives and reported as <br />depreciation expense. <br />Capital outlays <br />Loss 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 of bond <br />principal is reported as an expenditure. In the statement of net position, however, issuing debt <br />increases long-term liabilities and does not affect the statement of activities and repayment of <br />principal reduces the liability. Also, governmental funds report the effect of premiums and <br />discounts 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 funds when it <br />is due. In the statement of activities, however, interest expense is recognized as it accrues, <br />regardless of when it is due. The net effect of these differences in the treatment of general <br />obligation bonds and related items is as follows: <br />Issuance of bonds <br />Issuance of equipment certificates <br />Bond premium <br />Repayment of bond principal <br />Change in accrued interest expense for general obligation bonds <br />Write-off of bond issuance costs <br />Amortization of bond premium <br />Amortization of bond discount <br />Delinquent and noncurrent property taxes and special assessments receivable will be collected <br />subsequent to year-end, but are not available soon enough to pay for the current period's <br />expenditures and, therefore, are not available in the governmental funds. <br />Unavailable resources - December 31, 2012 <br />Unavailable resources - December 31, 2013 <br />In the statement of activities, compensated absences and other post employment benefits are <br />measured by the amounts earned during the year. In the governmental funds, however, <br />expenditures for these items are measured by the amount of financial resources used (essentially, <br />the amounts actually paid). During fiscal year 2013, compensated absence payable and other post <br />employment benefits payable decreased. <br />Change in Net Position of Governmental Activities <br />The accompanying notes are an integral part of these basic.fnancial statements. <br />IV -15 <br />$ 1,306,334 <br />(159,650) <br />(16,727) <br />(2,909,547) <br />(615,000) <br />(193,000) <br />(6,558) <br />2,649,000 <br />38,046 <br />(219,206) <br />23,096 <br />(2,469) <br />12,232,276 <br />10,961,595 <br />$ 53,472 <br />(1,779,590) <br />1,673,909 <br />(1,270,681) <br />13,888 <br />$ (1,309,002) <br />