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CITY OF LA PORTE, TEXAS <br /> Reconciliation of the Statement of Revenues, Expenditures and <br /> Changes in Fund Balances of Governmental Funds to the <br /> Statement of Activities <br /> For The Year Ended September 30, 2010 <br /> Amounts reported for governmental activities in the statement of activities are <br /> different because: <br /> Net change in fund balances —total governmental funds: $ 2,727,737 <br /> Governmental funds report outlays for capital assets as expenditures because <br /> such outlays use current financial resources. In contrast, the statement of <br /> activities reports only a portion of the outlay as expense. The outlay is allocated <br /> over the assets' estimated useful lives as depreciation expense for the period. <br /> This is the amount by which governmental activity capital outlays $10,661,990 <br /> exceeded depreciation $3,713,973 and losses of $104 from the disposition <br /> of capital assets in the current period. 6,947,913 <br /> Governmental funds report expenditures for costs of assets under construction <br /> that will be contributed to another entity. However, in the statement <br /> of activities, the cost of those assets will be expensed when the completed <br /> asset is transferred. (371,718) <br /> Governmental funds report capital outlay expenditures for costs of assets <br /> constructed that will be contributed to a proprietary fund. However, in <br /> the statement of activities, the cost of those assets were reclassified as a <br /> transfer to business -type activities. (1,939,704) <br /> Governmental funds do not present revenues that are not available to pay <br /> current obligations. In contrast, such revenues are reported in the statement <br /> of activities when earned. (194,443) <br /> Governmental funds report bond proceeds as current financial resources. In <br /> contrast, the statement of activities treats such issuance of debt as a liability. <br /> Governmental funds report repayment of bond principal as an expenditure. In <br /> contrast, the statement of activities treats such repayments as a reduction in <br /> long -term liabilities. This is the amount by which proceeds exceeded repayments. (4,454,007) <br /> Some expenses reported in the statement of activities do not require the use of <br /> current financial resources and these are not reported as expenditures in <br /> governmental funds: <br /> Accrued interest not reflected in governmental funds (23,064) <br /> Additional compensated absences not reflected in governmental funds (242,190) <br /> Amortization of bond issuance costs (158,748) <br /> Amortization of premium on bonds 47,400 <br /> Net OPEB obligation (1,661,275) <br /> Net pension obligation (752,431) <br /> Retainage payable 102,447 <br /> Internal service funds are used by management to charge the costs of certain <br /> activities, such as fleet maintenance and information technology, to individual <br /> funds. The net revenue (expense) of the internal service funds is reported with <br /> governmental activities. 1,503,909 <br /> Change in net assets of governmental activities $ 1,531,826 <br /> See accompanying notes to basic financial statements. <br /> 37 <br />