04-22-2019 Council Packet - Laserfiche WebLink

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CITY OF ORONO RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES GOVERNMENTAL ACTIVITIES YEAR ENDED DECEMBER 31, 2017 See accompanying Notes to Basic Financial Statements. (24) Net Change in Fund Balances-Total Governmental Funds (2,977,842)$ Governmental funds report capital outlays as expenditures and proceeds from sale of capital assets as revenues. However, in the statement of activities, assets are capitalized and the cost is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which depreciation exceeded capital outlays in the current period. Capital Outlays - Improvement Costs (Net of Proceeds) 2,262,432$ Gain (Loss) on Disposal of Capital Assets 38,738 Proceeds from the Sale of Capital Assets (38,738) Depreciation Expense (861,556) 1,400,876 Principal Payments for Capital Leases 6,024 6,024 Amortization of Bond Premium 25,950 Repayment of Bond Principal 3,550,000 Change in Accrued Interest Expense 31,760 3,607,710 Deferred Inflows of Resources - December 31, 2016 9,700 Deferred Inflows of Resources - December 31, 2017 18,391 8,691 (41,047) (310,628) 6,461 Change in Net Position of Governmental Activities 1,700,245$ In the statement of activities, compensated absences and other postemployment benefits are measured by the amounts earned during the year. In the governmental funds, however, expenditures for these items are measured by the amount of financial resources used (essentially, the amounts actually paid). During fiscal year 2017 compensated absence payable and other post employment benefits payable changed. Internal service funds are used by the City to charge the costs of insurance to individual funds. The net revenue of the Internal Service Funds is reported with governmental activities. Some capital asset additions are financed through capital leases. In governmental funds, a capital lease arrangement is considered a source of financing, but in the statement of net position, the lease obligation is reported as a liability. Amounts reported for governmental activities in the statement of activities are different because: The governmental funds report bond proceeds as financing sources, while repayment of bond principal is reported as an expenditure. In the statement of net position, however, issuing debt increases long-term liabilities and does not affect the statement of activities and repayment of principal reduces the liability. Interest is recognized as an expenditure in the governmental funds when it is due. In the statement of activities, however, interest expense is recognized as it accrues, regardless of when it is due. The net effect of these differences in the treatment of general obligation bonds and related items is as follows: Pension expenditures in the governmental funds are measured by current year employee contributions. Pension expenses on the statement of activities are measured by the change in net pension liability and the related deferred inflows and outflows of resources.