6.3. SR 06-15-2020 - Laserfiche WebLink

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Honorable Mayor and City Council City of Elk River Page 2 • Management's estimate of the valuation of land held for resale is based on the lower of the cost of the land or the current market value. We evaluated the key factors and assumptions used to develop the allowance in determining that it is reasonable in relation to the financial statements taken as a whole. • Management's estimate of City's liability for other postemployment benefits is based on an actuarial determined liability which is based on various assumptions, including investment rates of return, health care trend rates, mortality rates, etc. We evaluated the key factors and assumptions used to develop the liability in determining that it is reasonable in relation to the financial statements taken as a whole. • Management's estimate of the City's liability for compensated absences is based on employee wage information and the City's policies of earning vacation and sick pay. We evaluated the key factors and assumptions used to develop the liability in determining that it is reasonable in relation to the financial statements taken as a whole. • Management's estimate of the City's proportionate share of PERA's GERF, and PEPFF net pension liabilities as well as the related deferred inflows and outflows is based on guidance from GASB Statement No. 68 and the plans' allocation tables. The plans' allocation tables allocate a portion of the plans' net pension liabilities based on the City's contributions during the plans' fiscal years as a percentage of total contributions received for the related fiscal year by the plans. We evaluated the key factors and assumptions used to develop the liability in determining that it is reasonable in relation to the financial statements taken as a whole. Management's estimate of the City's net pension asset and related deferred inflows and outflows related to the City's Fire Relief Association are based on an actuarially determined liability. This liability is based on various assumptions including the investments rate of return, projected salary increases, and mortality rates. We evaluated the key factors and assumptions used to develop the liability in determining that it is reasonable in relation to the financial statements taken as a whole. Financial statement disclosures Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosure affecting the City's financial statements was: • The disclosures surrounding GASB 68 pension accounting for the City's participation in the Minnesota Public Employees Retirement Plan and the Fire Relief Association. The financial statement disclosures are neutral, consistent, and clear. Difficulties encountered in performing the audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Uncorrected misstatements Professional standards require us to accumulate all misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has determined that the effect of uncorrected misstatement is immaterial, both individually and in the aggregate, to the financial statements taken as a whole.