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CITY OF LAKE ELMO, MINNESOTA <br />RECONCILIATION OF CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS <br />TO THE STATEMENT OF ACTIVITIES <br />FOR THE YEAR ENDED DECEMBER 31, 2023 <br /> <br /> <br />See accompanying notes. 33 <br /> <br />Net Change in Fund Balances - Total Governmental Funds (3,750,158)$ <br /> Amounts reported for governmental activities in the Statement of Activities are <br />different due to the following: <br />Capital outlays are reported in the governmental funds as expenditures. However, <br />in the Statement of Activities, the cost of those assets is allocated over the <br />estimated useful lives as depreciation expense: <br />Capital Outlay Capitalized - Capital Assets 11,630,302$ <br />Depreciation Expense (3,388,205) <br />Capital Assets Acquired via Donation 8,314,179 <br />Capital Assets Transferred to Proprietary Funds (420,482) <br />Loss on Disposal of Assets (281,802) <br />15,853,992 <br />The issuance of long-term debt provides current financial resources to <br />governmental funds while the repayment of principal of long-term debt <br />consumes the current financial resources of governmental funds. Neither <br />transaction, however, has any effect on net position. Also, governmental <br />funds report the effect of premiums and discounts when debt is first issued, <br />whereas these amounts are deferred and amortized in the Statement of <br />Activities. The amounts below detail the effects of these differences in the <br />treatment of long-term debt and related items: <br />Bond Principal Repayments 2,480,000 <br />Bond Issuance (3,410,000) <br />Premium on Bond Issuance (317,037) <br />Amortization of Bond Premium 105,751 <br />(1,141,286) <br />Interest on long-term debt in the Statement of Activities differs from the amounts <br />reported in the governmental funds because interest is recognized as an <br />expenditure in the funds only when it is due. In the Statement of Activities, <br />however, interest expense is recognized as the interest accrues, regardless <br />of when it is due: (58,606) <br />Under the modified accrual basis of accounting, certain revenues cannot be <br />recognized until they are available to liquidate liabilities of the current period: <br />Property Taxes 2,359 <br />Special Assessments 672,697 <br />675,056 <br />Some expenses reported in the Statement of Activities do not require the use <br />of current financial resources and, therefore, are not reported as expenditures <br />in the governmental funds: <br />Compensated Absences (17,006) <br />Certain liabilities do not represent the impending use of current resources. <br />Therefore, the change in such liabilities and related deferrals are not <br />reported in the governmental funds: <br />Net OPEB Liability and Deferred Outflows/Inflows of Resources 5,736 <br />Net Pension Asset/Liability and Deferred Outflows/Inflows of Resources (28,498) <br />(22,762) <br />CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES 11,539,230$