Agenda - Council - 06/11/2019 - Laserfiche WebLink

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SIGNIFICANT ACCOUNTING POLICIES Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 of the notes to basic financial statements. No new accounting policies were adopted and the application of existing policies was not changed during the year ended December 31, 2018; however, the City implemented the following governmental accounting standards during the fiscal year: • GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, which established new accounting and financial reporting requirements for governments whose employees are provided with other post -employment benefits (OPEB). • GASB Statement No. 85, Omnibus 2017, which addressed issues that have been identified during implementation and application of certain GASB statements. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. ACCOUNTING ESTIMATES AND MANAGEMENT JUDGMENTS Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were: • Value of Land Held for Resale — Management's estimates of these assets are based on net realizable value (lower of cost or acquisition value). • Depreciation — Management's estimates of depreciation expense are based on the estimated useful lives of the assets. • Compensated Absences — Management's estimate is based on current rates of pay and unused compensated absence balances. • Total Other Post -Employment Benefit (OPEB) and Net Pension Liabilities — The City has recorded liabilities and activity for OPEB and pension benefits. These obligations are calculated using actuarial methodologies described in the GASB Statement Nos. 68 and 75. These actuarial calculations include significant assumptions, including projected changes, healthcare insurance costs, investment returns, retirement ages, proportionate share, and employee turnover. We evaluated the key factors and assumptions used by management to develop these estimates in determining that they are reasonable in relation to the basic financial statements taken as a whole. The financial statement disclosures are neutral, consistent, and clear. -2-