Item 3C: Resolution on FY11 CAFR

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CITY OF EUGENE, OREGON Notes to Basic Financial Statements (1) Summary of Significant Accounting Policies, continued (O) Indirect Expenses Allocation In the fund financial statements, the City allocates certain indirect costs incurred by the central services function of the General Fund to non-general funds in order to recover expenditures made on behalf of those other City funds. This allocation has been removed from the direct expenses column in the government-wide Statement of Activities and a separate column titled indirect expenses allocation has been presented. Indirect costs allocated to business-type activities are equal to the amount actually paid by the function. The remaining indirect costs are allocated to governmental activities based on personnel service costs. The remaining net expense in the central services function represents direct program activity of that function including its share of allocated indirect costs. (2) Reconciliation of Government-wide and Fund Financial Statements (A) Explanation of Differences Between the Government-wide Statement of Net Assets and the Governmental Fund Balance Sheet The Balance Sheet for governmental funds (Exhibit 3) includes a reconciliation between total fund balances and total net assets of governmental activities in the Statement of Net Assets (Exhibit 1). The following are selected elements of that reconciliation. The Statement of Net Assets reports receivables at their net realizable value. However, receivables not available to pay for current-period expenditures are deferred in governmental funds. The details of this $34,157,957 difference are as follows: Receivables: Interest$1,184,469 Taxes5,908,242 Systems development charges1,691,370 Municipal court1,199,691 Assessments1,277,576 Loans and notes24,033,934 Subtotal35,295,282 Allowance for uncollectibles(1,137,325) Net adjustment$34,157,957 Capital assets are not financial resources in governmental funds, but reported in the Statement of Net Assets at their net depreciable value. The details of this $392,731,764 difference are as follows: Capital assets (net of accumulated depreciation) reported in the Statement of Net Assets - governmental activities column: Land and construction in progress$91,927,647 Other capital assets (net of accumulated depreciation)321,753,306 Capital assets (net of accumulated depreciation) reported in internal service funds included in the Statement of Net Assets - governmental activities column(20,949,189) Net adjustment$392,731,764 continued 45