Notes to Financial Statements

Depreciation is calculated using of the straight-line method over the estimated useful lives of the related assets. The ranges of the useful lives are as follows:

Deferred Outflows / Inflows of Resources

Deferred outflows of resources represent a consumption of net assets that applies to future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The deferred outflows of resources reported represent deferred charges on debt refunding, and various items impacting the pension and other post retirement benefits obligations in the City’s government-wide statement of net position and the proprietary funds’ statement of net position. A deferred charge on debt refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. A deferred charge on pension and other post employment benefits results from differences between expected and actual experience, changes in assumptions or other inputs, changes in employer’s proportion and differences between the employer’s contributions and the City’s proportionate contributions and City’s contributions subsequent to the measurement date. These amounts will be recognized as increases in benefits expense in future years.

Deferred inflows of resources represent an acquisition of net assets that applies to future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City’s unavailable revenues from property taxes, lease revenues and various items impacting pension and other post retirement benefits obligations are reported as deferred inflows of resources on the governmental funds balance sheet and government-wide statement of net position, respectively. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. A deferred charge on pension and other post employment benefits results from differences between expected and actual experience, net difference between projected and actual earnings on pension plan investments, and changes in the proportion and differences between the City’s proportionate contributions. These amounts will be recognized as reductions in benefit expenses in future years. The second item is deferred inflows related to lease where the City is the lessor and is reported in the governmental fund balance sheet and statement of net position. The deferred inflows of resources related to lease are recognized as an inflow of resources related (revenue), on the straight-line amortization basis over the term of the lease.

Finance Purchase Obligations

For Finance Purchase obligations in the governmental funds, expenditure for the asset and the offsetting other financing source is reflected in the fund financial statements in the year of inception.

Lease Obligations

A lease is defined as a contractual agreement that conveys control of the right to use another entity’s nonfinancial asset, for a minimum contractual period of greater than one year, in an exchange or exchangelike transaction. The City leases and subleases a significant amount of nonfinancial assets such as land, building and equipment. The related obligations are presented in the amounts equal to the present value of lease payments, payable during the remaining lease terms. As a lessee, a lease liability and the associated lease