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CITY OF ORONO
<br />RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND
<br />CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
<br />GOVERNMENTAL ACTIVITIES
<br />YEAR ENDED DECEMBER 31, 2015
<br />
<br />
<br />
<br />See accompanying Notes to Basic Financial Statements.
<br />(24)
<br />
<br />Net Change in Fund Balances-Total Governmental Funds (543,159)$
<br />Capital Outlays - Improvement Costs (Net of Proceeds) 1,937,277$
<br />Gain (Loss) on Disposal of Capital Assets 6,466
<br />Proceeds from the Sale of Capital Assets (17,610)
<br />Depreciation Expense (702,589) 1,223,544
<br />Principal Payments for Capital Leases 5,562 5,562
<br />Amortization of Bond Premium 14,234
<br />Repayment of Bond Principal 1,010,000
<br />Change in Accrued Interest Expense 21,837 1,046,071
<br />Deferred Inflows of Resources - December 31, 2014 130,945
<br />Deferred Inflows of Resources - December 31, 2015 53,768 (77,177)
<br />(60,597)
<br />(91,798)
<br />(24,595)
<br />Change in Net Position of Governmental Activities 1,477,851$
<br />In the statement of activities, compensated absences and other postemployment benefits are
<br />measured by the amounts earned during the year. In the governmental funds, however,
<br />expenditures for these items are measured by the amount of financial resources used (essentially,
<br />the amounts actually paid). During fiscal year 2015, compensated absence payable and other post
<br />employment benefits payable changed.
<br />Internal service funds are used by the City to charge the costs of insurance to individual funds. The
<br />net revenue of the Internal Service Funds is reported with governmental activities.
<br />Some capital asset additions are financed through capital leases. In governmental funds, a capital
<br />lease arrangement is considered a source of financing, but in the statement of net position, the
<br />lease obligation is reported as a liability.
<br />Amounts reported for governmental activities in the statement of activities are different because:
<br />Governmental funds report capital outlays as expenditures and proceeds from sale of capital
<br />assets as revenues. However, in the statement of activities, assets are capitalized and the cost is
<br />allocated over their estimated useful lives and reported as depreciation expense. This is the
<br />amount by which depreciation exceeded capital outlays in the current period.
<br />The governmental funds report bond proceeds as financing sources, while repayment of bond
<br />principal is reported as an expenditure. In the statement of net position, however, issuing debt
<br />increases long-term liabilities and does not affect the statement of activities and repayment of
<br />principal reduces the liability. Interest is recognized as an expenditure in the governmental funds
<br />when it is due. In the statement of activities, however, interest expense is recognized as it
<br />accrues, regardless of when it is due. The net effect of these differences in the treatment of
<br />general obligation bonds and related items is as follows:
<br />Delinquent and certain other property taxes and special assessments receivable will be collected
<br />subsequent to year-end, but are not available soon enough to pay for the current period’s
<br />expenditures and, therefore, are reported as deferred inflows of resources and excluded from
<br />revenues in the governmental funds.
<br />Pension expenses in the governmental funds are measured by current year employee
<br />contributions. Pension expenses on the Statement of Activities are measured by the change in net
<br />pension liability and the related deferred inflows and outflows of resources.
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