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GASB Statement No. 71 -Pension Transition (or Contributions Made Subsequent to the <br />Me asurement Date, an Amendment of GASB Statement No. 68 <br />The objective of tbis Statement is to address an issue regarding application of tbe transition <br />provisions of Statement No. 68, Accounting and Financial Reporting for Pensions. The issue <br />relates to amoun ts associated witb contributions, if any, made by a state or local govermnent <br />employer or non-employer contributing entity to a defined benefit pension plan after tbe <br />measurement date of the govermnent's beginning net pension liability. <br />Un usual Transactions, Controversial or Emerging Areas <br />We noted no transactions entered into by tbe City during tbe year for wbich tbere is a lack of authoritative <br />guidance or consensus. All significant transactions have been recognized in tbe financial statements in tbe <br />proper period. <br />Estimates <br />Accounting estimates are an integral part of tbe financial statements prepared by management and are <br />based on management's knowledge and experience about past and current events and assumptions about <br />future events. Certain accouoting estimates are particularly sensitive because of tbeir significance to tbe <br />financial statements and because of tbe possibility tbat future events affecting tbem may differ <br />significantly from those expected. The most sensitive estimate(s) affecting tbe City's financial statements <br />were: <br />• Estimated Net Pension Liabilities and Pension-Related Deferred Outflows and Inflows of <br />Resources: Management's estimate of the net pension liabilities and deferred outflows/inflows of <br />resources are disclosed in Note 14 to the financial statements and are based on actuarial studies <br />determined by a consultant, which are based on the experience of the City. We evaluated tbe key <br />factors and assumptions used to develop tbe estimate and determined that it is reasonable in <br />relation to the basic financial statements taken as a whole. <br />• Management's estimate of tbe depreciation: is based on useful lives determined by management. <br />These Jives have been determined by management based on the expected useful life of assets as <br />disclosed in Note 6 to the fmancial statements. We evaluated the key factors and assumptions <br />used to develop tbe depr eciation estimate and determined that it is reasonable in relation to the <br />basic financial statemeots taken as a whole. <br />• Estimated Fair Value of Investments: As of Juoe 30, 2015, cash and investments were measured <br />by fair value. Fair value is essentially market pricing in effect as of June 30, 2015. These fair <br />values are not required to be adjusted for changes in general market conditions occurring <br />subsequent to June 30, 2015. <br />Disclosures <br />The financial statement disclosures are neutral, consistent, and clear. <br />Difficulties Encountered in Pe rforming the Audit <br />We encountered no significant difficulties in dealing with management in performing and completing our <br />audit. <br />8