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7.1.G. - Page 55 <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, 2013 <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 4,510,917 <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. 10,502,338 <br /> Depreciation expense is deducted from the fund balance. <br /> (Depreciation expense is net of internal service fund depreciation of <br /> $1,176,190 which has already been allocated to serviced funds.) (7,788,456) <br /> Loss on retirements of capital assets (528) <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. 5,880,000 <br /> Refunding Lease (3,360,000) <br /> Deferral of costs of issuance 67,252 <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 212,367 <br /> Change in interest payable 12,037 <br /> Amortization of bond premium 1,999 <br /> Amortization of issuance costs (150,878) <br /> Interest receivable and intergovernmental revenue 71,203 <br /> Change in net OPEB obligation (80,972) <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 (604,205) <br /> CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES 9,273,074 <br /> See accompanying notes to financial statements <br /> 27 <br />