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Unusual Transactions, Controversial or Emerging Areas <br />We noted no transactions entered into by the City during the year for which there is a lack of authoritative <br />guidance or consensus. All significant transactions have been recognized in the financial statements in the <br />proper period. <br />Accounting Estimates <br />Accounting estimates are an integral part of the 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 accounting estimates are particularly sensitive because of their significance to the <br />financial statements and because of the possibility that future events affecting them may differ <br />significantly from those expected. The most sensitive estimate(s) affecting the 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 13 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 the key <br />factors and assumptions used to develop the estimate and determined that it is reasonable in <br />relation to the basic financial statements taken as a whole. <br />Estimated Fair Value of Investments: As of June 30, 2017, the City’s cash and investments were <br />measured by fair value as disclosed in Note 2 to the financial statements. Fair value is essentially <br />market pricing in effect as of June 30, 2017. These fair values are not required to be adjusted for <br />changes in general market conditions occurring subsequent to June 30, 2017. <br />Estimate of Depreciation: Management’s estimate of the depreciation is based on useful lives <br />determined by management. These lives have been determined by management based on the <br />expected useful life of assets as disclosed in Note 1.H. to the financial statements. We evaluated <br />the key factors and assumptions used to develop the depreciation estimate and determined that it <br />is reasonable in relation to the basic financial statements taken as a whole. <br />Disclosures <br />The financial statement disclosures are neutral, consistent, and clear. <br />Difficulties Encountered in Performing the Audit <br />We encountered no significant difficulties in dealing with management in performing and completing our <br />audit. <br />711