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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, 2023
<br />Amounts reported for governmental activities in the statement of activities are different because
<br />Total Net Change in Fund Balances - Governmental Funds (9,559,225)$
<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 16,312,780
<br />Depreciation expense (1,157,766)
<br />Revenues in the statement of activities that do not provide current financial resources are not
<br />reported as revenue in the funds.
<br />Capital assets contributed to other funds (70,525)
<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.(11,399)
<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 1,095,000
<br />Current year amortization of deferred charges 38,205
<br />Finance purchase arrangement issued (484,900)
<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. 12,834
<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.(1,434)
<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 28,000
<br />Property taxes 8,276
<br />Intergovernmental 396,129
<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 (61,730)
<br />Other postemployment benefits 61,511
<br />Long-term pension activity is not reported in governmental funds.
<br />Pension expense (603,725)
<br />Pension revenue from State contributions 10,729
<br />Change in Net Position - Governmental Activities 6,012,760$
<br />The notes to the financial statements are an integral part of this statement.
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<br />the effect of premiums, discounts and similar items when debt is first issued, whereas these amounts the effect of premiums, discounts and similar items when debt is first issued, whereas these amounts
<br />are amortized in the statement of activities.are amortized in the statement of activities.
<br />Principal repaymentsPrincipal repayments 1,095,000
<br />Current year amortization of deferred chargesCurrent year amortization of deferred charges
<br />Finance purchase arrangement issuedFinance purchase arrangement issued (484,900)
<br />Interest on long-term debt in the statement of activities differs from the amount reported in theInterest 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,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,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.interest expense is recognized as the interest accrues, regardless of when it is due.
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