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6.1.D. - Page 54 <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 FISCAL YEAR ENDED JUNE 30, 2016 <br />The schedule below reconciles the Net Changes in Fund Balances reported on the Governmental Funds Statement of Revenues, Expenditures an <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 (2,253,056) <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 14,771,876 <br />Depreciation expense is deducted from the fund balance <br />(Depreciation expense is net of internal service fund depreciation of <br />$1,250,744 which has already been allocated to serviced funds.) (7,844,211) <br />Loss on sale of capital assets (780) <br />LONGTERM 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 666,814 <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 <br />(536,002) <br />Change in interest payable <br />9,970 <br />Interest receivable and intergovernmental revenue <br />(171,848) <br />Deferred pension contributions <br />11,442,790 <br />Pension expense <br />(8,034,417) <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 activitie! <br />Change in Net Position - All Internal Service Funds 1,387,585 <br />CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES 9,438,721 <br />See accompanying notes to financial statements <br />27 <br />