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CITY OF PARIS, TEXAS <br />Notes to Financial Statements (Continued) <br />September 30, 2020 <br />Il. Reconciliation of Government -Wide and Fund Financial Statements (Continued) <br />B. Explanation of Certain Differences Between the Governmental Fund Statement of Revenues, Expenditures, <br />and Changes in Fund Balances and the Government -Wide Statement of Activities (Continued) <br />Capital Outlay $ 5,456,682 <br />Depreciation Expense (2,793,231) <br />Net Adjustment to Increase Net Changes in Fund Balances - <br />Total Governmental Funds to Arrive at Changes in Net Position <br />Of Governmental Activities $ 2.663.451 <br />Another element of that reconciliation states that "the net effect of various miscellaneous transactions involving <br />capital assets (i.e., sales and donations) is to increase net position." The details of this $8,164 difference are as <br />follows: <br />In the statement of activites, only the gain on the sale of assets is <br />reported. However, in the governmental funds, the proceeds from <br />the sale increase financial resources. Thus, the change in net <br />position differs from the change in fund balance by the cost of the <br />capital assets sold. $ (14,467) <br />Donations of capital assets increase net position in the statement <br />of activities, but do not appear in the governmental fund because <br />they are not financial resources. 22,631 <br />Total Governmental Funds to Arrive at Changes in Net Position <br />of Governmental Activities $ 8,164 <br />Another element of that reconciliation states that "the issuance of long-term debt (e.g. bonds, leases) provides <br />current financial resources to governmental funds, while the repayment of the principal of long-term debt <br />consumes the current financial resources of governmental funds. Neither transaction, however, has any effect <br />on net position. Also, governmental funds report the premiums, discounts, and similar items when debt is first <br />issued, whereas these amounts are deferred and amortized in the statement of activities." The details of <br />this $33,379 difference are as follows: <br />Issuance of Debt $ (1,500,000) <br />Amortization of Premium 14,815 <br />Principal Repayments 1,518,564 <br />Net Adjustment to Increase Net Changes in Fund Balances - <br />Total Governmental Funds to Arrive at Changes in Net Position <br />of Governmental Activities $ 33,379 <br />III. Stewardship, Compliance, and Accountability <br />Violations of Legal or Contractual Provisions <br />Note I.F.2, on the Excess of Expenditures Over Appropriations, describes budgetary violations that occurred for <br />the year ended September 30, 2020. <br />36 <br />