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<br /> <br />CliftonLarsonAllen LL P <br />CLAconnect.com <br />Honorable Mayor and City Council <br />City of Elk River <br />Elk River, Minnesota <br /> <br />We have audited the financial statements of the governmental activities, the business-type activities, <br />the discretely presented component unit, each major fund, and the aggregate remaining fund <br />information of the City of Elk River as of and for the year ended December 31, 2017, and have issued <br />our report thereon dated May 30, 2018. We have previously communicated to you information about <br />our responsibilities under auditing standards generally accepted in the United States of America and <br />Government Auditing Standards, as well as certain information related to the planned scope and timing <br />of our audit. Professional standards also require that we communicate to you the following information <br />related to our audit. <br />Significant audit findings <br />Qualitative aspects of accounting practices <br />Accounting policies <br />Management is responsible for the selection and use of appropriate accounting policies. The significant <br />accounting policies used by City of Elk River are described in Note 1 to the financial statements. <br />No new accounting policies were adopted and the application of existing policies was not changed <br />during 2017. <br />We noted no transactions entered into by the entity during the year for which there is a lack of <br />authoritative guidance or consensus. All significant transactions have been recognized in the financial <br />statements in the 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 <br />about future events. Certain accounting estimates are particularly sensitive because of their <br />significance to the financial statements and because of the possibility that future events affecting them <br />may differ significantly from those expected. The most sensitive estimates affecting the financial <br />statements were: <br /> Management’s estimate of the valuation of investments is based on published market values as <br />of December 31, 2017. We evaluated the key factors and assumptions used to develop the <br />value of investments in determining that it is reasonable i n relation to the financial statements <br />taken as a whole. <br /> Management’s estimate of the depreciation expense on capital assets is based on <br />management’s estimated useful lives of those assets. We evaluated the key factors and <br />assumptions used to develop the allowance in determining that it is reasonable in relation to the <br />financial statements taken as a whole.