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CITY OF ST. ANTHONY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 2. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES AND THE GOVERNMENT -WIDE STATEMENT OF ACTIVITIES The governmental fund statement of revenues, expenditures and changes in fund balances includes a reconciliation between net changes in fund balances — total governmental funds and changes in net assets ofgovernmental activities as reported in the government -wide statement of activities. One element of that reconciliation explains that "governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense." The details of this $2,723,228 difference is as follows: Capital outlay $318,668 Capitalized current expenditures 182,989 Construction/acquisition costs 3,419,607 Depreciation expense (1,183,944) Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities. $2,737,320 Another element of that reconciliation states that "revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds." The details of this ($185,873) difference is as follows: General property taxes deferred revenue: At December 31, 2007 ($63,593) At December 31, 2008 84,465 Tax increment taxes deferred revenue: At December 31, 2007 (8,397) At December 31, 2008 79,407 Loan receivable deferred revenue: At December 31, 2007 (2,500,000) At December 31, 2008 2,500,000 Special assessments deferred revenue: At December 31, 2007 (2,015,731) At December 31, 2008 1,737,976 Net adjustments to decrease net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities. ($185,873) 51