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i <br /> Indian River County, Florida <br /> Notes To Financial Statements <br /> Year Ended September 30, 2012 <br /> NOTE 2 -RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL <br /> STATEMENTS - Continued <br /> ( B. Explanation of Differences Between Governmental Fund Operating Statements and the <br /> 1 Statement of Activities <br /> ( The "net change in fund balances" for governmental funds, ($13,182,985), differs from the "change in <br /> J net position" for governmental activities, $4,303,294 reported in the statement of activities. The <br /> differences arise primarily from the long-term economic focus of the statement of activities versus the <br /> current financial resources focus of the governmental funds. The effect of the differences is illustrated <br /> below. <br /> Capital related items <br /> When capital assets that are to be used in governmental activities are purchased or constructed, the <br /> resources expended for those assets are reported as expenditures in governmental funds. However, in <br /> the statement of activities, the costs of those assets are allocated over their estimated useful lives and <br /> reported as depreciation expense. As a result, fund balances decrease by the amount of financial <br /> resources expended, whereas net position decreases by the amount of depreciation expense charged for <br /> the year. <br /> Capital outlay $ 27,751,553 <br /> 1 Depreciation expense (20,004,763) <br /> 1 Transfers to business-type activities (40,489) <br /> Capital contributions 1,918,753 <br /> Loss on assets (948,213) <br /> Difference $ 8,676,841 <br /> Long-term debt transactions <br /> Payments of bond principal, bond premium, and pollution remediation costs are reported as an <br /> expenditure in the governmental funds and, thus, have the effect of reducing fund balance because <br /> current financial resources have been used. However, the payments reduce the liabilities in the <br /> statement of net position and do not result in an expense in the statement of activities. <br /> Bond principal payments made $ 8,060,000 <br /> Bond premium payments made 93,225 <br /> Medicaid settlement costs (790,434) <br /> Pollution remediation costs 83,300 <br /> Total $ 7,446,091 <br /> I <br /> Governmental funds report interest and OPEB expenditures based on when they are paid. The statement <br /> of activities reports interest expense as it is incurred. This is the net number of the previous year accrual <br /> and the current year accrual. <br /> Net accrued OPEB expense $ 132,097 <br /> Net accrued bond interest payable 75,842 <br /> Total $ 207,939 <br /> 57 <br />