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CITY OF GEM LAKE, MINNESOTA RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE TO THE STATEMENT OF ACTIVITIES GOVERNMENTAL ACTIVITIES YEAR ENDED DECEMBER 31, 2019 See accompanying Notes to Basic Financial Statements. (9) NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS 170,236$ 66,883$ (74,069) Transfer of Capital Asset (151,229) (158,415) Unavailable Resources - December 31, 2018 991,780 Unavailable Resources - December 31, 2019 933,848 (57,932) Repayment of Bond Principal 65,000 Change in Accrued Interest Payable 1,590 Amortization of Bond Premium 1,282 67,872 CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES 21,761$ Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, assets are capitalized and the cost is allocated over their estimated useful lives and reported as depreciation expense. 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. Also, governmental funds report the effect of premiums and discounts when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. 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 is as follows: Capital Outlays Depreciation Expense Delinquent and deferred property taxes and special assessments receivable will be collected subsequent to year-end, but are not available soon enough to pay for the current period's expenditures and, therefore, are unavailable resources in the governmental funds.