Agenda Packet 12-10-18 Meeting - REVISED

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November 30, 2018 To the City Council City of Eugene, Oregon We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Eugene for the year ended June 30, 2018, and have issued our report thereon dated November 30, 2018. Professional standards require that we provide you with the following information related to our audit. Our Responsibility under U.S. Generally Accepted Auditing Standards As stated in our engagement letter dated July 13, 2018, our responsibility, as described by professional standards, is to express opinions about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with the accounting principles generally accepted in the United States. Our audit of the financial statements does not relieve you or management of your responsibilities. Planned Scope and Timing of the Audit We performed the audit according to the planned scope and timing previously communicated to you in our engagement letter. Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City of Eugene are described in the footnotes to the financial statements. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. The financial statements include: •significant pension (OPERS) disclosures – see footnote (5)(C). •tax abatements (GASB 77), see footnote (5)(I). •other post employment benefit obligations (GASB 75) - see footnotes (5)(E) and (5)(F). 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. The most significant estimates affecting the financial statements are the determination of depreciation on capital assets, the net pension liability estimate and the net other post employment benefit obligation (OPEB) estimates. The accounting policies relating to capital assets and depreciation are described in the footnotes to the comprehensive annual financial report. The PERS footnote (5)(C) includes assumptions used to value the pension obligation and interest rate sensitivity analysis. Estimate relating to the OPEB obligations are set forth in footnote (5)(E) and (5)(F) to the financial statements. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. December 10, 2018, Meeting - Item 2D