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6.1.E. - Page 56 <br /> CITY OF REDWOOD CITY,CALIFORNIA <br /> RECONCILIATION OF THE <br /> NET CHANGE IN FUND BALANCES-TOTAL GOVERNMENTAL FUNDS <br /> WITH THE STATEMENT OF ACTIVITIES <br /> FOR THE YEAR ENDED JUNE 30, 2015 <br /> The schedule below reconciles the Net Changes in Fund Balances reported on the Governmental Funds Statement of Revenues,Expenditures and <br /> Changes in Fund Balance,which measures only changes in current assets and current liabilities on the modified accrual basis,with the Change <br /> in Net Position of Governmental Activities reported in the Statement of Activities,which is prepared on the full accrual basis. <br /> NET CHANGE IN FUND BALANCES-TOTAL GOVERNMENTAL FUNDS 16,157,837 <br /> Amounts reported for governmental activities in the Statement of Activities are different because of the following: <br /> CAPITAL ASSETS TRANSACTIONS <br /> Governmental Funds report capital outlays as expenditures.However,in the Statement of Activities the cost of those assets <br /> is capitalized and allocated over their estimated useful lives and reported as depreciation expense. <br /> The capital outlay expenditures are therefore added back to fund balance. 6,162,302 <br /> Depreciation expense is deducted from the fund balance. <br /> (Depreciation expense is net of internal service fund depreciation of <br /> $1,224,560 which has already been allocated to serviced funds.) (7,734,213) <br /> Gain on sale of capital assets (477,710) <br /> Contribution of capital assets 1,445,514 <br /> LONG TERM DEBT PROCEEDS AND PAYMENTS <br /> Bond proceeds provide current financial resources to governmental funds,but issuing debt increases long-term liabilities in the <br /> Statement of Net Position. Repayment of bond principal is an expenditure in the governmental funds,but in the <br /> Statement of Net Position the repayment reduces long-term liabilities. <br /> Repayment of debt principal is added back to fund balance. 656,858 <br /> ACCRUAL OF NON-CURRENT ITEMS <br /> The amounts below included in the Statement of Activities do not provide or(require)the use of current financial resources and <br /> therefore are not reported as revenue or expenditures in governmental funds(net change): <br /> Change in compensated absences (462,595) <br /> Change in interest payable 4,586 <br /> Interest receivable and intergovernmental revenue 341,956 <br /> Pension contributions 13,706,671 <br /> Pension expense (11,703,748) <br /> ALLOCATION OF INTERNAL SERVICE FUND ACTIVITY <br /> Internal Service Funds are used by management to charge the costs of certain activities,such as equipment acquisition,maintenance, <br /> and insurance to individual funds.The portion of the net revenue(expense)of these Internal Service Funds arising out <br /> of their transactions with governmental funds is reported with governmental activities,because they service those activities. <br /> Change in Net Position-All Internal Service Funds 943,942 <br /> CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES 19,041,400 <br /> See accompanying notes to financial statements <br /> 27 <br />