03-26-12 Fiscal Affairs Committee

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CITY OF LA PORTE RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the Year Ended September 30, 2011 Net change in fund balances - total governmental funds:1,972,271$ Amounts reported for Governmental Activities in the Statement of Activities are different because: Governmental funds report outlays for capital assets as expenditures because such outlays use current financial resources. In contrast, the Statement of Activities reports only a portion of the outlay as expense. The outlay is allocated over the assets' estimated useful lives as depreciation expense for the period. This is the amount by which capital outlays $7,086,106 exceeded depreciation $4,107,807 in the current period. 2,978,299 During the current year, the golf course enterprise fund was changed to a governmental fund. Current assets and liabilities were transferred to the general fund, but capital assets and long-term liabilities are only reported at the government-wide level in governmental activities. The net affect of the change is a transfer to the governmental activities.2,586,119 Current year disposal of assets are reported in the government-wide financial statement and not in the fund statement. The book value of assets disposals reduces net assets in the government-wide statement.(2,526,834) Governmental funds do not present revenues that are not available to pay current obligations. In contrast, such revenues are reported in the Statement of Activities when earned. 749,588 Governmental funds report bond proceeds as current financial resources. In contrast, the Statement of Activities treats such issuance of debt as a liability. Governmental funds report repayment of bond principal as an expenditure, In contrast, the Statement of Activities treats such repayments as a reduction in long-term liabilities. This is the amount by which repayments exceeded proceeds. 1,740,000 Governmental funds report bond issuance costs as expenditures. In contrast, the government wide financial statements amortized such a cost over the life of the bonds.(46,587) Some expenses reported in the statement of activities do not require the use of current financial resources and these are not reported as expenditures in governmental funds: Change in accrued interest payable10,936 Change in NPO and OPEB Obligation(2,053,616) Amortization of bond discounts and premiums35,591 Change in Compensated Absences(68,121) Internal service funds are used by management to charge the costs of certain activities, such as fleet maintenance and information technology, to individual funds. The net revenue (expense) of certain internal service funds is reported with governmental activities.(341,751) Change in net assets of governmental activities $ 5,035,895 See Notes to Financial Statements. 21