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<br />CITY OF CENTERVILLE, MINNESOTA <br />RECONCILIATION OF THE STATEMENT OF <br />REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE <br />TO THE STATEMENT OF ACTIVITIES <br />GOVERNMENTAL FUNDS <br />YEAR ENDED DECEMBER 31,2003 <br /> <br />Total net change in fund balances - governmental funds <br /> <br />Amounts reported for governmental activities in the statement <br />of activities are different because: <br /> <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 <br />expense. <br />Capital outlays <br />Depreciation expense <br /> <br />The issuance oflong-term debt provides current financial resources to governmental funds, while <br />the repayment of principal of long-term debt consumes the current financial resources of governmental <br />funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report <br />the effect of issuance costs, premiums, discounts and similar items when debt is ftrst issued, <br />whereas these amounts are deferred and amortized in the statement of activities. <br />Interest earned on bond issuance <br />Principal repayments <br />Debt issued or incurred <br /> <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 ftnancial resources. In the statement of activities, however <br />interest expense is recognized as the interest accrues, regardless of when it is due. <br /> <br />Governmental fund report debt issuance premiums and discounts as an other ftnancing <br />source or use at the time of issuance. Premiums and discounts are reported as an <br />unamortized asset or liability in the district-wide fInancial statements. <br /> <br />Certain revenues are recognized as soon as it is earned. Under the modifIed accrual <br />basis of accounting certain revenues cannot be recognized until they are available <br />to liquidate liabilities of the current period. <br />Special assessments <br />Property taxes <br />Some expenses reported in the statement of activities do not require the use of current <br />fInancial resources and, therefore, are not reported as expenditures in governmental funds. <br /> <br />Change in net assets - governmental activities <br /> <br />See Notes to Financial Statements. <br /> <br />-10- <br /> <br />$ 1,150,353 <br /> <br />279,308 <br />(194,051) <br /> <br />672 <br />377,237 <br />(726,748) <br /> <br />8,693 <br /> <br />(2,322) <br /> <br />342,433 <br />25,982 <br /> <br />4,870 <br /> <br />$ 1,266,427 <br />