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City of Orono, Minnesota
<br />Reconciliation of the Statement of Revenues, Expenditures and
<br />Changes in Fund Balances to the Statement of Activities
<br />Governmental Funds
<br />For the Year Ended December 31, 2021
<br />Amounts reported for governmental activities in the statement of activities are different because
<br />Total Net Change in Fund Balances - Governmental Funds 14,867,795$
<br />Capital outlays are reported in governmental funds as expenditures. However, in the statement of
<br />activities, the cost of those assets is allocated over the estimated useful lives as depreciation expense.
<br />Capital outlays 2,578,953
<br />Depreciation expense (1,066,114)
<br />Governmental funds report a gain (loss) on sale of capital assets to the extent of cash exchanged, whereas the
<br />disposition of the assets book value is included in the total gain (loss) in the statement of activities.17,000
<br />The issuance of long-term debt provides current financial resources to governmental funds, while the
<br />repayment of principal of long-term debt consumes the current financial resources of governmental
<br />funds. Neither transaction, however, has any effect on net position. Also, governmental funds report
<br />the effect of premiums, discounts and similar items when debt is first issued, whereas these amounts
<br />are amortized in the statement of activities.
<br />Principal repayments 2,150,000
<br />Bonds issued (15,350,000)
<br />Current year amortization of deferred charges 25,950
<br />Premium on bonds issued (653,923)
<br />Interest on long-term debt in the statement of activities differs from the amount reported in the
<br />governmental fund because interest is recognized as an expenditure in the funds when it is due,
<br />and thus requires the use of current financial resources. In the statement of activities, however,
<br />interest expense is recognized as the interest accrues, regardless of when it is due.27,457
<br />Internal service funds are used by the City to charge the cost of compensated absences, liability,
<br />property, and workers compensation insurance, vehicles and equipment, centralized purchase
<br />of consumable office supplies, maintaining facilities, and maintenance of computer systems.
<br />These balances are reported with governmental activities in the statement of activities.(31,062)
<br />Certain revenues are recognized as soon as they are earned. Under the modified accrual basis of accounting,
<br />certain revenues cannot be recognized until they are available to liquidate liabilities of the current period.
<br />Special assessments (12,816)
<br />Property taxes 5,926
<br />Intergovernmental (251,196)
<br />Some expenses reported in the statement of activities do not require the use of current financial resources
<br />and therefore are not reported as expenditures in governmental funds.
<br />Compensated absences (22,147)
<br />Other postemployment benefits (24,336)
<br />Long-term pension activity is not reported in governmental funds.
<br />Pension expense 656,595
<br />Pension revenue from State contributions 34,858
<br />Change in Net Position - Governmental Activities 2,952,940$
<br />The notes to the financial statements are an integral part of this statement.
<br />DRAFT
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