CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORTS AS OF AND FOR THE FISCAL YEAR ENDED JUNE 30, 2017 THE CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORTS AS OF AND FOR THE FISCAL YEAR ENDED JUNE 30, 2017  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 THIS PAGE INTENTIONALLY LEFT BLANK 2  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 TABLE OF CONTENTS Page Independent Auditor’s Report on Financial Statements…………………………………… 5-6 Management’s Discussion and Analysis……………………………………………………… 7-17 The Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Position …………………………………………………………………… 19 Statement of Activities ……………………………………………………………………… 20 Governmental Funds Financial Statements: Balance Sheet ………………………………………………………………………………… 22 Statement of Changes in Fund Balances……………………………………………………… 23 Reconciliation of Governmental Fund and Government-Wide Financial Statements……… 24-25 Proprietary Funds Financial Statements: Statement of Net Position……………………………………………………………………… 27 Statement of Changes in Net Position………………………………………………………… 28 Statement of Cash Flows……………………………………………………………………… 29 Discretely Presented Component Units Combining Financial Statements: Statement of Net Position……………………………………………………………………… 31 Statement of Changes in Net Position………………………………………………………… 32 Footnotes to the Basic Financial Statements ………………………………………………… 33-71 Required Supplementary Information: Budgetary Comparison Information Budgetary Comparison Schedule (Budgetary Basis) – General Fund………………………… 73 Footnotes to Budgetary Comparison Schedule………………………………………………… 74 Pension Plan Information Schedules of Pension Information…………………………………………………………… 75-78 Schedule of Funding Progress – OPEB……………………………………………………… 79 3  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Supplementary Information: Combining Balance Sheet – General Fund Accounts…………………………………………… 81 Combining Schedule of Revenues, Expenditures and Changes in Fund Balance – General Fund Accounts ………………………………………………………………………………………… 82 Combining Balance Sheet - Non-Major Governmental Funds………………………………… 83-86 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Non-Major Governmental Funds…………………………………………………………………………… 87-90 Combining Schedule of Net Position – Miami Special Utilities Authority - Enterprise Fund Account…………………………………………………………………………………………… 91 Combining Schedule of Revenues, Expenses and Changes in Net Position– Miami Special Utilities Authority – Enterprise Fund Accounts ………………………………………………………… 92 Combining Schedule of Cash Flows – Miami Special Utilities Authority – Enterprise Fund Accounts………………………………………………………………………………………… 93 Combining Statement of Net Position – Internal Service Funds……………………………….… 94 Combining Statement of Revenues, Expenses and Changes in Net Position– Internal Service Funds…………………………………………………………………………………………….. 95 Combining Statement of Cash Flows – Internal Service Funds………………………………… 96 Combining Statement of Cash Flows – Discretely Presented Component Units ……………… 97 Schedule of Expenditures of Federal Awards………………………………………………… 98 Debt Service Coverage Schedule………………………………………………………………… 99 Internal Control and Compliance Information Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards……………………………………………………………101-102 4  INDEPENDENT AUDITOR’S REPORT To the Honorable Mayor and Members of the City Council of the City of Miami, Oklahoma Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Miami, Oklahoma, (the “City”) as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Miami Industrial Development Authority (“MIDA”), which represents 10 percent, 6 percent, and 17 percent, respectively, of the assets, net position, and operating revenues of the aggregate discretely presented component units. Those statements were audited by other auditors, whose report has been furnished to us, and our opinions, insofar as it relates to the amounts included for MIDA, are based solely on the report of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, based on our audit and the report of the other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the 309 N. Bryant Ave. • Edmond, OK 73034 • 405.348.0615 5 • Fax 405.348.0931 • www.jmacpas.com Member of AICPA and OSCPA business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2017, and the respective changes in financial position, and, where applicable, cash flows thereof, for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, budgetary comparison information, and the pension plan and other post-employment benefits funding schedules, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The other supplemental information, as listed in the table of contents, is presented for purposes of additional analysis and is not a required part of the basic financial statements. The other supplementary information is the responsibility of management and was derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the other supplemental information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 5, 2017, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. December 5, 2017 6  CITY OF MIAMI, OKLAHOMA MANAGEMENT’S DISCUSSION AND ANALYSIS As of and for the Year Ended June 30, 2017 MANAGEMENT DISCUSSION AND ANALYSIS 7  CITY OF MIAMI, OKLAHOMA MANAGEMENT’S DISCUSSION AND ANALYSIS As of and for the Year Ended June 30, 2017 Our discussion and analysis of the City of Miami’s financial performance provides an overview of the City’s financial activities for the fiscal year ended June 30, 2017. Please read it in conjunction with the City’s financial statements, which follow this section. FINANCIAL HIGHLIGHTS  For the fiscal year ended June 30, 2017, the City’s total net position decreased by $9,578,183 or 25% from the prior year.  During the year, the City’s expenses for governmental activities were $22.4 million and were funded by program revenues of $1.5 million and further funded with taxes and other general revenues that totaled $11.4 million.  In the City’s business-type activities, such as utilities, program revenues exceeded expenses by $4 million.  At June 30, 2017, the General Fund reported an unassigned fund balance of $195.  For budgetary reporting purposes, the General Fund reported revenues above estimates of $96,579 or 1.3%, while expenditures were under the final appropriations by $895,618 or 9.0%.  The City issued $19,375,000 of the 2016 Sales Tax Refunding Revenue Bonds which were used to refinance the 2010 Sales Tax Revenue Bonds for street improvements and the 2013 Bond Anticipation Note for sports complex improvements. OVERVIEW OF THE FINANCIAL STATEMENTS The financial statements presented herein include all of the activities of the City of Miami (the “City”) and its component units using the integrated approach as prescribed by GASB Statements No. 14, 34, 39, and 61. Included in this report are governmental-wide statements for each of three categories of activities – governmental, business-type, and discretely presented component units. The government-wide financial statements present the complete financial picture of the City from the economic resources measurement focus using the accrual basis of accounting. They present governmental activities and business type activities separately and combined. These statements include all assets of the City (including infrastructure capital assets), and deferred outflows of resources, as well as all liabilities (including all long-term debt) and deferred inflows of resources. About the City The City of Miami is an incorporated municipality with a population of approximately 13,570 located in northeastern Oklahoma. The City operates under a council-manager form of government with a charter that provides for three branches of government.  Legislative – the governing body includes an elected five-member City Council and Mayor  Executive – the City Manager is the Chief Executive Officer and is appointed by the City Council  Judicial – the Municipal Judge is a practicing attorney appointed by the City Council The City’s Financial Reporting Entity This annual report includes all activities for which the City Council of the City of Miami is fiscally responsible. These activities are operated within several separate legal entities that are reported together to make up the City’s financial reporting entity. 8  CITY OF MIAMI, OKLAHOMA MANAGEMENT’S DISCUSSION AND ANALYSIS As of and for the Year Ended June 30, 2017 The City’s financial reporting entity includes the City of Miami, two blended component units, and four active discretely presented component units. Primary Government: The City of Miami – incorporated municipality that operates the public safety, health and welfare, streets and highways, parks and recreation, and administrative activities as a home rule charter city Blended Component Units: Miami Special Utility Authority (MSUA) – public trust that operates the electric, water, wastewater, and solid waste/sanitation services of the City. Miami Development Authority (MDA) – public trust created to promote economic development in Miami. Discretely Presented Component Units (separate legal entities for which the City Council is fiscally responsible, but appoints a separate governing body): Miami Education Facilities Authority (MEFA) – public trust that promotes the development of educational facilities within the city. The trust is currently inactive. Miami Downtown Redevelopment Authority (MDRA) – public trust created to promote the redevelopment of the downtown area. The Authority does not issue separate financial statements. Miami Industrial and Public Facilities Authority (MIPFA) – public trust that promotes the use of facilities in the City of Miami area. The Authority does not issue separate financial statements. Miami Community Facilities Authority (MCFA) – public trust that promotes the development of commerce, housing, recreation, education and public facilities within the city. The Authority does not issue separate financial statements. Miami Industrial Development Authority (MIDA) – public trust that promotes industry in and around the City of Miami. The Authority issues separate financial statements. Using This Annual Report This annual report is presented in a format that substantially meets the presentation requirements of the Governmental Accounting Standards Board (GASB) in accordance with generally accepted accounting principles. The presentation includes financial statements that communicate the City’s financial position and changes therein at two distinct levels:  The City as a Whole (a government-wide presentation)  The City’s Funds (a presentation of the City’s major and aggregate non-major funds) 9  CITY OF MIAMI, OKLAHOMA MANAGEMENT’S DISCUSSION AND ANALYSIS As of and for the Year Ended June 30, 2017 The City’s various government-wide and fund financial statements are presented throughout this annual report and are accompanied by:  Management’s Discussion and Analysis – that provides useful analysis that facilitates a better understanding of the City’s financial condition and changes therein.  Footnotes - that elaborate on the City’s accounting principles used in the preparation of the financial statements and further explain financial statement elements.  Supplemental Information – that provide additional information about specified elements of the financial statements, such as budgetary comparison information, and capital assets and long-term debt information. Reporting the City as a Whole The Statement of Net Position and the Statement of Activities One of the most frequently asked questions about the City’s finances is, “Has the City’s overall financial condition improved, declined or remained steady over the past year?” The Statement of Net Position and the Statement of Activities report information about the City as a whole and about its activities in a way that helps answer this question. These statements include all assets, deferred outflows, liabilities and deferred inflows using the accrual basis of accounting. All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid. These two government-wide statements report the City’s net position and changes in them from the prior year. You can think of the City’s net position – the difference between assets, deferred outflows, liabilities, and deferred inflows – as one way to measure the City’s financial condition, or position. Over time, increases or decreases in the City’s net position are one indicator of whether its financial health is improving, deteriorating, or remaining steady. However, you must consider other nonfinancial factors, such as changes in the City’s tax base, the condition of the City’s roads, and the quality of services to assess the overall health and performance of the City. As mentioned above, in the Statement of Net Position and the Statement of Activities, we divide the City into three kinds of activities:  Governmental activities -- Most of the City’s basic services are reported here, including the police, fire, general administration, streets, and parks. Sales taxes, franchise fees, fines, and state and federal grants finance most of these activities.  Business-type activities -- The City charges a fee to customers to help cover all or most of the cost of certain services it provides. The City’s water, wastewater, electric, airport, and sanitation activities are reported here.  Discretely-presented component units -- Accounts for various activities related to economic development, facility management, facility construction, and downtown development. 10  CITY OF MIAMI, OKLAHOMA MANAGEMENT’S DISCUSSION AND ANALYSIS As of and for the Year Ended June 30, 2017 Reporting the City’s Most Significant Funds Fund Financial Statements The fund financial statements provide detailed information about the most significant funds – not the City as a whole. Some funds are required to be established by State law and by bond covenants. However, the City Council establishes many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants and other money. Governmental funds -- Most of the City’s basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City’s general government operations and the basic service it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. The differences of results in the Governmental Fund financial statements to those in the Government-Wide financial statements are explained in a reconciliation following each Governmental und financial statement. Proprietary funds - When the City charges customers for the services it provides – whether to outside customers or to other units of the City – these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position, the Statement of Revenues, Expenses and Changes in Fund Net Position and Statement of Cash Flows. In fact, the City’s enterprise funds are essentially the same as the business-type activities we report in the government-wide statements but provide more detail and additional information, such as cash flows. A FINANCIAL ANALYSIS OF THE CITY AS A WHOLE Net Position As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the City, assets and deferred outflows exceeded liabilities and deferred inflows by $28,698,474 at the close of the most recent fiscal year. 11  CITY OF MIAMI, OKLAHOMA MANAGEMENT’S DISCUSSION AND ANALYSIS As of and for the Year Ended June 30, 2017 TABLE 1 NET POSITION (In Thousands) Gove rnme ntal % Inc. Busine ss-Type % Inc. % Inc. Activities (Dec.) Activities (Dec.) Total (Dec.) 2017 2016 2017 2016 2017 2016 Current assets $ 11,832 $ 10,381 14% $ 13,756 $ 13,616 1% $ 25,588 $ 23,997 7% Capital assets, net 26,718 27,338 -2% 17,715 18,491 -4% 44,433 45,829 -3% Total assets 38,550 37,719 2% 31,471 32,107 -2% 70,021 69,826 0% De ferre d outflows 2,656 1,404 89% 790 679 16% 3,446 2,083 65% Current liabilities 3,723 3,494 7% 2,905 2,748 6% 6,628 6,242 6% Non-current liabilities 28,809 16,521 74% 8,799 9,283 -5% 37,608 25,804 46% Total liabilities 32,532 20,015 63% 11,704 12,031 -3% 44,236 32,046 38% De ferre d inflows 414 1,337 -69% 123 254 100% 537 1,591 -66% Net position Net investment capital assets 16,909 17,689 -4% 11,499 11,463 0% 28,408 29,152 -3% Restricted 1,670 1,588 5% 776 771 1% 2,446 2,359 4% Unrestricted (deficit) (10,319) (1,506) -585% 8,159 8,267 -1% (2,160) 6,761 -132% Total net positin $ 8,260 $ 17,771 -54% $ 20,434 $ 20,501 0% $ 28,694 $ 38,272 -25% The largest portion of the City’s net position reflects its net investment capital assets (e.g., land, buildings, machinery, and equipment); less any related debt used to acquire those assets that are still outstanding. For 2017, the net investment in capital assets amounted to $28,408,405. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. A major portion of the City’s net position, $2,446,079 also represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position is a deficit position amounting to $2,160,777. Explanations of significant changes displayed in Table 1 are as follows: Governmental Activities: Deferred outflows – Increase of $1.3 million (89%) due to changes in pension elements. Non-current liabilities – Increases of $12.3 (74%) due to issuance of debt to refinance other outstanding debt and pay off debt of a discretely presented component unit. Deferred inflows – Decrease of $.9 million (69%) due to changes in pension elements. Net position unrestricted (deficit) – Increase in the deficit of $8.8 million (585%) due to an increase in expenditures over revenue. Business-Type Activities: Deferred inflows – Increases due to changes in pension elements. 12  CITY OF MIAMI, OKLAHOMA MANAGEMENT’S DISCUSSION AND ANALYSIS As of and for the Year Ended June 30, 2017 Changes in Net Position For the year ended June 30, 2017, net position of the primary government changed as follows: TABLE 2 CHANGES IN NET POSITION (In Thousands) Governmental % Inc. Business-Type % Inc. % Inc. Activities (Dec.) Activities (Dec.) Total (Dec.) 2017 2016 2017 2016 2017 2016 Revenues Charges for service $ 686 $ 709 -3% $ 24,045 $ 23,419 3% $ 24,731 $ 24,128 2% Operating grants and contributions 813 759 7% - 2 - 813 761 7% Capital grants and contributions - 64 100% 136 532 -74% 136 596 -77% Taxes 7,193 7,215 0% - - - 7,193 7,215 0% Investment income 25 15 67% 18 12 50% 43 27 59% M iscellaneous 71 185 -62% 1 1 0% 72 186 -61% Total revenues 8,787 8,947 -2% 24,200 23,966 1% 32,987 32,913 0% Expenses General government 1,728 2,411 -28% - - - 1,728 2,411 -28% Public safety 5,115 4,990 3% - - - 5,115 4,990 3% Streets 3,067 2,432 26% - - - 3,067 2,432 26% Culture and recreation 11,226 1,305 760% - - - 11,226 1,305 760% Economic development 572 507 13% - - - 572 507 13% Interest on debt 721 593 22% - - - 721 593 22% Water - - - 1,834 1,553 18% 1,834 1,553 18% Wastewater - - - 1,477 1,429 - 1,477 1,429 - Sanitation - - - 1,645 1,506 9% 1,645 1,506 9% Electric - - - 14,803 13,660 8% 14,803 13,660 8% Airport - - - 377 415 -9% 377 415 -9% Total expenses 22,429 12,238 83% 20,136 18,563 8% 42,565 30,801 -38% Excess (deficiency) before transfers (13,642) (3,291) -315% 4,064 5,403 -25% (9,578) 2,112 -553% Transfers 4,131 4,088 1% (4,131) (4,088) 1% - - - Change in net position $ (9,511) $ 797 -1293% $ (67) $ 1,315 -105% $ (9,578) $ 2,112 -553% Explanations of significant changes in Table 2 are as follows: Governmental Activities: General Government – Decrease of $.7 million (28%) due to a decrease in operational cost. Streets – Increase of $.6 million (26%) due to an increase in operational cost. Culture and recreation – Increase of $9.9 million (760%) due to one-time funding to a discretely presented component unit for the payoff of a debt issue. Business-Type Activities: Capital grants and contributions – Decrease of $.4 million (74%) due to a decrease in airport grants. 13  CITY OF MIAMI, OKLAHOMA MANAGEMENT’S DISCUSSION AND ANALYSIS As of and for the Year Ended June 30, 2017 Governmental Activities To aid in the understanding of the Statement of Activities some additional explanation is given. Of particular interest is the format that is significantly different than a typical Statement of Revenues, Expenses, and Changes in Fund Balance. You will notice that expenses are listed in the first column with revenues from that particular program reported to the right. The result is a Net (Expense)/Revenue. The reason for this kind of format is to highlight the relative financial burden of each of the functions on the City’s taxpayers. It also identifies how much each function draws from the general revenues or if it is self- financing through fees and grants or contributions. All other governmental revenues are reported as general. It is important to note all taxes are classified as general revenue even if restricted for a specific purpose. TABLE 3 Net Revenue (Expense) of Governmental Activities (In Thousands) Net Revenue Total Expense % Inc. (Expense) % Inc. of S ervices (Dec.) of S ervices (Dec.) 2017 2016 2017 2016 General government $ 1,728 $ 2,411 -28% $ (1,604) $ (2,328) -31% Public safety 5,115 4,990 2% (4,265) (4,127) 3% Streets 3,067 2,432 26% (2,889) (2,154) 34% Culture, parks and recreation 11,226 1,305 760% (10,952) (1,029) 964% Economic development 572 507 13% (499) (474) 5% Interest on long-term debt 721 593 -22% (721) (593) 22% Total $ 22,429 $ 12,238 83% ($20,930) $ (10,705) 96% For the year ended June 30, 2017 total expenses for governmental activities amounted to approximately $22.4 million which was an increase from the prior year of 83%. See Table 2 above for explanations of changes. Business-type Activities TABLE 4 Net Revenue (Expense) of Business-Type Activities (In Thousands) Net Revenue Total Expense % Inc. (Expense) % Inc. of S ervices Dec. of S ervices Dec. 2017 2016 2017 2016 Water $ 1,834 $ 1,553 18% $ 517 $ 965 -46% Wastewater 1,477 1,429 - 280 672 -58% Sanitation 1,645 1,507 9% 746 774 -4% Electric 14,803 13,659 8% 2,567 3,273 -22% Airport 377 415 -9% (65) (295) -78% Total $ 20,136 $ 18,563 8% $ 4,045 $ 5,389 -25% The City’s business-type activities include utility services for water, electric, wastewater, sanitation and airport. 14  CITY OF MIAMI, OKLAHOMA MANAGEMENT’S DISCUSSION AND ANALYSIS As of and for the Year Ended June 30, 2017 In reviewing the business-type activities net (expense)/revenue, the following highlights should be noted:  Total business-type activities reported net revenues of $4,045,043 for the year ended June 30, 2017.  Airport operational cost exceeded revenues due the completion of capital grants for airport construction. A FINANCIAL ANALYSIS OF THE CITY’S FUNDS As the City completed its 2017 fiscal year, the governmental funds reported a combined fund balance of $7.4 million or a 8.2% increase of approximately $564,000 mainly due to debt proceeds. The enterprise funds reported combined net position of $19.6 million or a 1.1% decrease from 2016. Fund Balance/Net Position Governmental Funds Proprietary Funds Restricted $ 1,681,678 Net investment in capital assets $ 11,499,386 Committed 2,885,062 Restricted for debt service and other 775,962 Assigned 2,877,422 Unrestricted 7,340,862 Unassigned 195 Total Fund Balance $ 7,444,357 Total Net Position $ 19,616,210 General Fund Budgetary Highlights For budgetary reporting purposes, the General Fund reported revenues above estimates of $96,579 or 1.3%, while expenditures were under the final appropriations by $895,618 or 9.0%. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets At the end of June 30, 2017, the City had $44.4 million invested in capital assets, net of depreciation, including police and fire equipment, buildings, park facilities, electrical infrastructure, water lines and sewer lines. (See table below). This represents a net decrease of $1.4 million or 3.0% from the prior year. TABLE 5 Capital Assets (In Thousands) (Net of accumulated depreciation) Governmental Business-Type Activities Activities Total 2017 2016 2017 2016 2017 2016 Land $ 5,487 $ 5,487 $ 751 $ 751 6,238 $ 6,238 Buildings 5,112 4,597 9,431 9,850 14,543 14,447 M achinery, furniture and equipment 2,372 2,532 2,880 3,340 5,252 5,872 Infrastructure 13,234 13,714 3,695 4,004 16,929 17,718 Construction in progress 513 1,009 958 545 1,471 1,554 Totals $ 26,718 $ 27,339 $ 17,715 $ 18,490 $ 44,433 $ 45,829 15  CITY OF MIAMI, OKLAHOMA MANAGEMENT’S DISCUSSION AND ANALYSIS As of and for the Year Ended June 30, 2017 This year’s more significant capital asset additions placed into service included: Equipment $457,000 Street projects $417,000 Kennel Facility $409,274 See Note 6 to the financial statements for more detail information on the City’s capital assets and changes therein. Long- Term Debt At year-end, the City had $27.3 million in long-term debt outstanding which represents a $9.5 million increase, or 53.9%, from the prior year. The City’s changes in long-term debt by type of debt are as follows: TABLE 6 Long-Term Debt (In Thousands) Governmental Business-Type Activities Activities Total 2017 2016 2017 2016 2017 2016 Accrued absences $ 577 $ 585 $ 180 $ 183 $ 757 $ 768 Revenue Bonds 19,245 9,045 1,000 1,190 20,245 10,235 Bond Premium (Discount) 247 (58) (6) (8) 241 (66) Notes Payable - - 4,716 5,306 4,716 5,306 Capital Leases 823 947 506 539 1,329 1,486 Totals $ 20,892 $ 10,519 $ 6,396 $ 7,210 $ 27,288 $ 17,729 See Note 8 to the financial statements for more detail information on the City’s long-term debt and changes therein. The Upcoming Year The City will spend the upcoming year completing projects with an emphasis on facility’s rehabilitation, which includes a large civic center rehabilitation project; implementing the approved comprehensive plan; street and utility improvements; and installing a splash pad. The FY 2017-2018 budget will remain level with the exception of an electric utility rate increase. The funds collected from the increase will fund much needed electric system improvements to include substation upgrades. The City expects to continue to be impacted by a struggling economy but by building financial capacity via a reshaping of budget priorities the City will improve budget stabilization for the future. The City will also continue revenue bond projects on various utility improvements such as completing the well south of town and will start another utility improvement revenue bond project. Utility funds will continue to repay the debts. The primary sources of revenue for the City of Miami are Sales Tax and water and electric revenue. Sales tax requires a vote of the people and cannot be adjusted without the people’s consent. The City continues 16  CITY OF MIAMI, OKLAHOMA MANAGEMENT’S DISCUSSION AND ANALYSIS As of and for the Year Ended June 30, 2017 to look for ways to enhance our revenue base that will assist in the completion of major infrastructure and development projects. Contacting the City’s Financial Management This report is designed to provide our citizens, taxpayers, customers and creditors with an understanding of the City’s finances and to demonstrate the City’s accountability for the resources it receives. If you have questions about this report or need additional financial information, contact: City of Miami PO Box 1288 Miami, OK 74355-1288 17  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 BASIC FINANCIAL STATEMENTS – GOVERNMENT-WIDE 18  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Statement of Net Position– June 30, 2017 Discretely Presented Primary Government Component Units Governmental Business-type Activities Activities Total ASSETS Cash and equivalents $ 8,701,282 $ 6,143,513 $ 14,844,795 $ 546,935 Investments 631,281 2,856,074 3,487,355 - Interest receivable - 809 809 - Accounts receivable, net 163,710 3,049,810 3,213,520 - Due from other governments 905,853 - 905,853 - Other receivables 2,223,696 33,833 2,257,529 2,212 Internal balances (794,009) 794,009 - - Inventory - 877,819 877,819 - Capital Assets Land and construction in progress 5,999,947 1,708,686 7,708,633 247,946 Other capital assets, net of depreciation 20,718,025 16,006,424 36,724,449 9,366,330 Total assets 38,549,785 31,470,977 70,020,762 10,163,423 DEFERRED OUTFLOWS: Deferred amounts related to pensions 2,019,961 789,538 2,809,499 - Deferred amount on refunding 636,155 - 636,155 - Total deferred outflows of resources 2,656,116 789,538 3,445,654 - LIABILITIES Accounts payable and accrued liabilities 534,562 1,813,967 2,348,529 20,205 Claims liability 2,448,652 - 2,448,652 - Accrued interest payable 47,361 37,283 84,644 2,027 Long-term liabilities Due within one year 692,174 1,053,595 1,745,769 236,214 Due in more than one year 28,809,249 8,799,275 37,608,524 519,777 Total liabilities 32,531,998 11,704,120 44,236,118 778,223 DEFERRED INFLOWS: Deferred amounts related to pensions 413,959 122,552 536,511 - Total deferred inflows of resources 413,959 122,552 536,511 - NET POSITION: Net investment in capital assets 16,909,099 11,499,386 28,408,485 8,957,545 Restricted 1,670,117 775,962 2,446,079 - Unrestricted (deficit) (10,319,272) 8,158,495 (2,160,777) 427,655 Total net position $ 8,259,944 $ 20,433,843 $ 28,693,787 $ 9,385,200 See accompanying notes to the basic financial statements. 19  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Statement of Activities –Year Ended June 30, 2017 Net (Expense) Revenue and Changes in Net Position Program Revenue Primary Government Discretely Operating Capital Grants Presented Charges for Grants and and Governmental Business-type Component Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Units Primary government Governmental Activities General Government $ 1,727,787 $ 70,896 $ 52,805 $ - $ (1,604,086) $ - $ (1,604,086) $ - Public Safety 5,114,588 257,316 591,954 - (4,265,318) - (4,265,318) - Public Works and Streets 3,066,593 60,039 117,510 - (2,889,044) - (2,889,044) - Culture and Recreation 11,226,060 228,232 46,310 - (10,951,518) - (10,951,518) - Economic Development 572,299 69,272 4,000 - (499,027) - (499,027) - Interest on long-term Debt 721,243 - - - (721,243) - (721,243) - Total governmental activities 22,428,570 685,755 812,579 - (20,930,236) - (20,930,236) - Business-type activities Water 1,833,783 2,350,731 - - - 516,948 516,948 - Wastewater 1,476,694 1,756,578 - - - 279,884 279,884 - Sanitation 1,645,361 2,391,377 - - - 746,016 746,016 - Electric 14,803,159 17,370,727 - - - 2,567,568 2,567,568 - Airport 376,773 175,234 - 136,166 - (65,373) (65,373) - Total business-type activities 20,135,770 24,044,647 - 136,166 - 4,045,043 4,045,043 - Total primary government $ 42,564,340 $ 24,730,402 $ 812,579 $ 136,166 (20,930,236) 4,045,043 (16,885,193) - Component Units Culture and Recreation $ 1,107,136 $ 298,751 $ 9,979,402 $ - 9,171,017 Economic Development 71,790 113,744 - - 41,954 Total component units $ 1,178,926 $ 412,495 $ 9,979,402 $ - 9,212,971 General revenues: Taxes: Sales and use taxes 6,634,680 - 6,634,680 - Property tax 21,525 - 21,525 - Franchise and public service taxes 322,105 - 322,105 - Hotel/motel taxes 214,538 - 214,538 - Investment income 24,709 18,018 42,727 225 Miscellaneous 70,923 512 71,435 - Transfers - internal activity 4,131,188 (4,131,188) - - Total general revenues and transfers 11,419,668 (4,112,658) 7,307,010 225 Change in net position (9,510,568) (67,615) (9,578,183) 9,213,196 Net position - beginning 17,770,512 20,501,458 38,271,970 172,004 Net position - ending $ 8,259,944 $ 20,433,843 $ 28,693,787 $ 9,385,200 See accompanying notes to the basic financial statements. 20  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 BASIC FINANCIAL STATEMENTS - GOVERNMENTAL FUNDS 21  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Governmental Funds Balance Sheet - June 30, 2017 Street and Other Total Stadium Project Governmental Governmental General Fund Fund Funds Funds ASSETS Cash and cash equivalents $ 837,672 $ 673,668 $ 5,501,949 $ 7,013,289 Investments 13,154 - - 13,154 Receivables: Accounts receivable 116,549 - 47,161 163,710 Due from other funds 87,808 - 59,755 147,563 Due from other governments and entities 698,479 141,300 66,074 905,853 Total assets $ 1,753,662 $ 814,968 $ 5,674,939 $ 8,243,569 LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Liabilities: Accounts payable and accrued liabilities $ 162,555 $ 3,250 $ 98,110 $ 263,915 Wages payable 256,866 - 13,277 270,143 Due to other funds 85,535 - 38,404 123,939 Total liabilities 504,956 3,250 149,791 657,997 DEFERRED INFLOWS OF RESOURCES Deferred revenue 85,805 - 55,410 141,215 Fund balances: Restricted 17,900 811,718 852,060 1,681,678 Commited - - 2,885,062 2,885,062 Assigned 1,144,806 - 1,732,616 2,877,422 Unassigned 195 - - 195 Total fund balances 1,162,901 811,718 5,469,738 7,444,357 Total liabilities, deferred inflows and fund balances $ 1,753,662 $ 814,968 $ 5,674,939 $ 8,243,569 See accompanying notes to the basic financial statements. 22  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Governmental Funds Statement of Changes in Fund Balances – Year Ended June 30, 2017 Street and Other Total Stadium Governmental Governmental General Fund Project Fund Funds Funds REVENUES Taxes $ 5,568,610 $ 1,122,198 $ 354,633 $ 7,045,441 Intergovernmental 759,880 - 129,697 889,577 Charges for services 193,650 - 123,556 317,206 Fines and forfeitures 217,800 - - 217,800 Licenses and permits 53,725 - - 53,725 Investment income 13,344 11,115 250 24,709 Miscellaneous 184,256 - 44,683 228,939 Total revenues 6,991,265 1,133,313 652,819 8,777,397 EXPENDITURES Current: General government 1,686,814 - 7,847 1,694,661 Public Safety 4,983,288 - 3,633 4,986,921 Public works and streets 1,281,938 948,700 84,642 2,315,280 Culture and recreation 1,128,501 9,870,000 95,188 11,093,689 Economic development 514,171 - - 514,171 Capital Outlay - - 1,047,253 1,047,253 Debt Service: Principal 144,149 130,000 128,765 402,914 Interest and other charges 30,669 429,521 6,160 466,350 Total expenditures 9,769,530 11,378,221 1,373,488 22,521,239 Excess (deficiency) of revenues over expenditures (2,778,265) (10,244,908) (720,669) (13,743,842) OTHER FINANCING SOURCES (USES) Debt proceeds - 19,375,000 149,481 19,524,481 Premium on debt issuance - 263,590 - 263,590 Transfer to escrow agent - (9,663,231) - (9,663,231) Transfers in 7,575,644 1,123,098 1,841,516 10,540,258 Transfers out (5,157,611) (1,117,483) (82,261) (6,357,355) Total other financing sources and uses 2,418,033 9,980,974 1,908,736 14,307,743 Net change in fund balances (360,232) (263,934) 1,188,067 563,901 Fund balances - beginning 1,523,133 1,075,652 4,281,671 6,880,456 Fund balances - ending $ 1,162,901 $ 811,718 $ 5,469,738 $ 7,444,357 See accompanying notes to the basic financial statements. 23  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Reconciliation of Governmental Funds and Government-Wide Financial Statements: Fund Balance – Net Position Reconciliation: Total fund balance, governmental funds $ 7,444,357 Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental activities are not current financial resources and therefore are not reported in this fund financial statement, but are reported in the governmental activities of the Statement of Net Position. 26,717,972 Certain long-term assets are not available to pay for current fund liabilities and, therefore, are deferred in the funds. 141,215 Certain other long-term elements are not available to pay current period expenditures and are classified as deferred outflows and are not reported in this fund financial statement, but are reported in the governmental activities of the Statement of Net Position. Pension related deferred outflows 2,019,961 Deferred amounts on refunding 636,155 Some liabilities are not due and payable in the current period and they, along with deferred inflows, are not included in the fund financial statement, but are included in the governmental activities of the Statement of Net Position: Capital lease obligations (823,335) Interest payable (47,361) Net pension liability (8,101,303) Pension related deferred inflows (413,959) Net other post employment benefit obligation (508,052) Accrued compensated absences (577,040) Unamortized debt premium (246,693) Revenue bond payable (19,245,000) Internal service funds are used by management to charge costs of certain activities that benefit multiple funds, such as self-insurance, to individual funds. The net position of the internal service funds are reported in governmental activities: Internal service fund net position 1,263,027 Net Position of Governmental Activities in the Statement of Net Position $ 8,259,944 See accompanying notes to the basic financial statements. 24  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Changes in Fund Balances – Changes in Net Position Reconciliation: Net change in fund balances - total governmental funds: $ 563,901 Amounts reported for Governmental Activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures while governmental activities report depreciation expense to allocate those expenditures over the life of the assets: Capital asset purchases capitalized 1,085,475 Capital assets donated 29,634 Depreciation expense (1,724,326) Disposed capital assets (11,227) In the Statement of Activities, the net cost of pension benefits earned is calculated and reported as pension expense. The fund financial statements report pension contributions as expenditures. This amount represents the difference between pension contributions and calculated pension expense. 169,720 Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds: Change in deferred revenue (3,934) Bond proceeds provide current financial resources t governmental funds, but issuing debt increased long-term liabilities in the Statement of Net Position. Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position: Capital lease proceeds (149,481) Capital lease principal payments 272,914 Revenue bond principal payments 130,000 Payment to escrow 9,663,231 Bond premium (263,590) Note proceeds (19,375,000) Some expenses reported in the statement of activities do not require the use of current financial resources and these are not reported as expenditures in governmental funds: Change in accrued interest payable (20,234) Change in accrued compensated absences 8,144 Change in net other post employment benefits obligation (145,218) Change in amortization of bond discount/premium (58,106) Transfer of debt activity 34,662 Internal service fund activity is reported as a proprietary fund in fund financial statements, but certain net revenues are reported in governmental activities on the Statement of Activities: Total change in net position for internal service funds 282,867 Change in net position of governmental activities $ (9,510,568) See accompanying notes to the basic financial statements. 25  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 BASIC FINANCIAL STATEMENTS - PROPRIETARY FUNDS 26  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Proprietary Funds Statement of Net Position - June 30, 2017 Enterprise Funds Miami Special Utility Internal Authority Airport Fund Total Service Funds ASSETS Current assets: Cash and cash equivalents $ 5,279,514 $ 35 $ 5,279,549 $ 1,687,993 Cash and cash equivalents, restricted 428,442 - 428,442 - Investments 2,668,550 - 2,668,550 618,127 Accounts receivable, net 3,009,431 40,379 3,049,810 - Other receivable 436 33,397 33,833 2,223,696 Accrued interest receivable 809 - 809 - Inventory 844,430 33,389 877,819 - Due from other funds 93,586 30,128 123,714 - Total current assets 12,325,198 137,328 12,462,526 4,529,816 Non-current assets: Cash and cash equivalents, restricted 435,522 - 435,522 - Investments, restricted 187,524 - 187,524 - Capital assets: Land, construction in progress, and water rights 1,484,521 224,165 1,708,686 - Other capital assets, net of accumulated depreciation 12,716,275 3,290,149 16,006,424 - Total non-current assets 14,823,842 3,514,314 18,338,156 - Total assets 27,149,040 3,651,642 30,800,682 4,529,816 DEFERRED OUTFLOW OF RESOURCES Deferred amounts related to pensions 765,948 23,590 789,538 - LIABILITIES Current liabilities: Accounts payable and accrued liabilities 1,662,651 23,149 1,685,800 504 Claims liability - - - 2,448,652 Wages payable 127,477 690 128,167 - Due to other funds 86,495 60,843 147,338 - Accrued interest payable 37,283 - 37,283 - Accrued compensated absences 18,010 - 18,010 - Refundable deposits 41,623 - 41,623 - Capital lease payable 201,143 - 201,143 - Revenue bond payable 190,000 - 190,000 - Notes payable 602,819 - 602,819 - Total current liabilities 2,967,501 84,682 3,052,183 2,449,156 Non-current liabilities: Accrued compensated absences 162,088 - 162,088 - Net pension liability 2,741,140 21,397 2,762,537 - Net OPEB obligation 278,284 - 278,284 - Refundable deposits 374,604 - 374,604 - Capital lease payable 304,663 - 304,663 - Revenue bond payable 803,479 - 803,479 - Notes payable, net 4,113,620 - 4,113,620 - Total non-current liabilities 8,777,878 21,397 8,799,275 - Total liabilities 11,745,379 106,079 11,851,458 2,449,156 DEFERRED INFLOW OF RESOURCES Deferred amounts related to pensions 98,874 23,678 122,552 - NET POSITION Net investment in capital assets 7,985,072 3,514,314 11,499,386 - Restricted for debt service 775,962 - 775,962 - Unrestricted 7,309,701 31,161 7,340,862 2,080,660 Total net position $ 16,070,735 $ 3,545,475 19,616,210 $ 2,080,660 Some amounts reported for business-type activities in the Statement of Net Position are different because certain internal service fund balances are included with business-type activities and reported as interfund balances 817,633 Total net position per Government-Wide financial statements $ 20,433,843 See accompanying notes to the basic financial statements. 27  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Proprietary Funds Statement of Changes in Net Position - Year Ended June 30, 2017 Enterprise Funds Miami Special Utility Internal Service Authority Airport Fund Total Fund REVENUES Charges for services $ 22,901,978 $ 163,038 $ 23,065,016 $ 2,249,001 Fees, licenses and permits 135,086 - 135,086 - Miscellaneous 803,073 - 803,073 2,242,082 Total operating revenues 23,840,137 163,038 24,003,175 4,491,083 OPERATING EXPENSES Personal services 3,968,043 25,025 3,993,068 - Materials and supplies 11,529,186 87,451 11,616,637 - Other services and charges 2,937,566 46,368 2,983,934 336,665 Insurance claims and expense - - - 3,711,572 Depreciation expense 1,317,067 217,929 1,534,996 - Total operating expenses 19,751,862 376,773 20,128,635 4,048,237 Operating income (loss) 4,088,275 (213,735) 3,874,540 442,846 NON-OPERATING REVENUES (EXPENSES) Investment income 18,018 - 18,018 1,720 Miscellaneous 29,744 12,240 41,984 - Disposal of capital assets (29,634) - (29,634) - Interest expense and fiscal charges (168,834) - (168,834) - Total non-operating revenue (expenses) (150,706) 12,240 (138,466) 1,720 Income (loss) before contrbutions and transfers 3,937,569 (201,495) 3,736,074 444,566 Contributed capital revenue 81,349 136,166 217,515 - Transfers in 6,275,094 - 6,275,094 - Transfers out (10,457,997) - (10,457,997) - Change in net position (163,985) (65,329) (229,314) 444,566 Total net position - beginning 16,234,720 3,610,804 19,845,524 1,636,094 Total net position - ending $ 16,070,735 $ 3,545,475 $ 19,616,210 $ 2,080,660 Change in net position above (229,314) Some amounts reported for business-type activities in the Statement of Activities are difference because the net revenue of certain internal service funds is reported with business-type activities 161,699 Change in Business-Type Activities in Net Position per Government-Wide Financial Statements $ (67,615) See accompanying notes to the basic financial statements. 28  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Proprietary Funds Statement of Cash Flows - Year Ended June 30, 2017 Enterprise Funds Miami Special Utility Internal Service Authority Airport Fund Total Fund CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 24,321,103 $ 159,837 $ 24,480,940 $ 3,490,910 Payments to suppliers (14,261,317) (127,899) (14,389,216) (336,784) Payments to employees (3,874,198) (22,872) (3,897,070) - Receipts from other funds 78,993 59,138 138,131 (7,487) Payments to other funds (31,023) - (31,023) - Receipts of customer meter deposits 205,490 - 205,490 - Refunds of customer meter deposits (188,843) - (188,843) - Claims and judgments paid - - - (2,677,210) Net cash provided by operating activities 6,250,205 68,204 6,318,409 469,429 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds 6,275,094 - 6,275,094 - Transfers to other funds (10,457,997) - (10,457,997) - Interaccount transfers in 381,810 - 381,810 - Interaccount transfers out (419,010) - (419,010) - Net cash provided by (used in) noncapital financing activities (4,220,103) - (4,220,103) - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital assets purchased (344,414) (206,304) (550,718) - Transfer of capital assets to governmental activities (29,634) - (29,634) - Principal paid on debt (1,014,546) - (1,014,546) - Proceeds of capital grants - 136,166 136,166 - Interest and fiscal agent fees paid on debt (171,893) - (171,893) - Net cash provided by (used in) capital and related financing activities (1,560,487) (70,138) (1,630,625) - CASH FLOWS FROM INVESTING ACTIVITIES Sale (Purchase) of investments - - - (1,721) Interest and dividends 18,018 - 18,018 1,720 Net cash provided by (used in) investing activities 18,018 - 18,018 (1) Net increase (decrease) in cash and cash equivalents 487,633 (1,934) 485,699 469,428 Balances - beginning of year 5,655,845 1,969 5,657,814 1,218,565 Balances - end of year $ 6,143,478 $ 35 $ 6,143,513 $ 1,687,993 Reconciliation to Statement of Net Position: Cash and cash equivalents $ 5,279,514 $ 35 $ 5,279,549 $ 1,687,993 Restricted cash and cash equivalents - current 428,442 - 428,442 - Restricted cash and cash equivalents - noncurrent 435,522 - 435,522 - Total cash and cash equivalents, end of year $ 6,143,478 $ 35 $ 6,143,513 $ 1,687,993 Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss) $ 4,088,275 $ (213,735) $ 3,874,540 $ 442,846 Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation expense 1,317,067 217,929 1,534,996 - Other nonoperating revenue 29,744 12,240 41,984 - Change in assets and liabilities: Receivables, net 451,222 (4,017) 447,205 (1,000,173) Other receivable - (11,424) (11,424) - Due from other funds (31,023) - (31,023) - Inventory 83,359 (7,334) 76,025 - Deferred outflows related to pension (279,250) 8,732 (270,518) - Accounts payable 122,076 13,254 135,330 (119) Claims liability - - - 1,034,362 Due to other funds 78,993 59,138 138,131 (7,487) Due to employees (1,179) (225) (1,404) - Refundable deposits 16,647 - 16,647 - Net OPEB obligation 82,148 - 82,148 - Net pension liability 285,365 (25,292) 260,073 - Accrued compensated absences (2,794) - (2,794) - Deferred inflows related to pension 9,555 18,938 28,493 Net cash provided by operating activities $ 6,250,205 $ 68,204 $ 6,318,409 $ 469,429 Noncash activities: Asset acquired by capital lease $ 201,258 $ - $ 201,258 $ - Asset contributed by others 200,007 - 200,007 - $ 401,265 $ - $ 401,265 $ - See accompanying notes to the basic financial statements. 29  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 BASIC FINANCIAL STATEMENTS – DISCRETELY PRESENTED COMPONENT UNITS 30  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Discretely Presented Component Units Combining Statement of Net Position - June 30, 2017 MCFA MDRA MIDA MIPFA Total ASSETS Current assets: Cash and cash equivalents $ 186,405 $ 8,502 $ 184,887 $ 167,141 $ 546,935 Receivables: Other receivable 1,000 1,212 - - 2,212 Total current assets 187,405 9,714 184,887 167,141 549,147 Non-current assets: Capital assets: Land, construction in progress, and water rights - - 103,517 144,429 247,946 Other capital assets, net of accumulated depreciation 8,203,727 12,626 787,814 362,163 9,366,330 Total non-current assets 8,203,727 12,626 891,331 506,592 9,614,276 Total assets 8,391,132 22,340 1,076,218 673,733 10,163,423 LIABILITIES Current liabilities: Accounts payable and accrued liabilities 250 17,705 - 2,250 20,205 Interest payable 545 - 1,482 - 2,027 Accrued compensated absences - 2,808 - - 2,808 Notes payable 83,693 96,452 53,261 - 233,406 Total current liabilities 84,488 116,965 54,743 2,250 258,446 Non-current liabilities: Notes payable, net 79,849 - 439,928 - 519,777 Total non-current liabilities 79,849 - 439,928 - 519,777 Total liabilities 164,337 116,965 494,671 2,250 778,223 NET POSITION Net investment in capital assets 8,040,185 12,626 398,142 506,592 8,957,545 Unrestricted (deficit) 186,610 (107,251) 183,405 164,891 427,655 Total net position $ 8,226,795 $ (94,625) $ 581,547 $ 671,483 $ 9,385,200 See accompanying notes to the basic financial statements. 31  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Discretely Presented Component Units Combining Statement of Changes in Net Position - Year Ended June 30, 2017 MCFA MDRA MIDA MIPFA Total REVENUES Charges for services $ 146,143 $ 152,608 $ 71,774 $ 41,058 $ 411,583 Miscellaneous - - 912 - 912 Total operating revenues 146,143 152,608 72,686 41,058 412,495 OPERATING EXPENSES Personal services - 131,254 - - 131,254 Materials and supplies - 24,314 200 750 25,264 Other services and charges 53,014 156,498 1,500 9,578 220,590 Depreciation expense 218,879 2,526 20,727 20,771 262,903 Total operating expenses 271,893 314,592 22,427 31,099 640,011 Operating income (loss) (125,750) (161,984) 50,259 9,959 (227,516) NON-OPERATING REVENUES (EXPENSES) Investment income - - 1 224 225 Miscellaneous income 9,835,338 144,064 - - 9,979,402 Interest expense and fiscal charges (515,504) (5,147) (18,264) - (538,915) Total non-operating revenue (expenses) 9,319,834 138,917 (18,263) 224 9,440,712 Change in net position 9,194,084 (23,067) 31,996 10,183 9,213,196 Total net position - beginning (967,289) (71,558) 549,551 661,300 172,004 Total net position - ending $ 8,226,795 $ (94,625) $ 581,547 $ 671,483 $ 9,385,200 See accompanying notes to the basic financial statements. 32  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 FOOTNOTES TO BASIC FINANCIAL STATEMENTS 33  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Footnotes to the Basic Financial Statements: 1. Financial Reporting Entity In determining the financial reporting entity, the City uses the integrated approach as prescribed by Governmental Accounting Standards Board Statements No. 14 “The Financial Reporting Entity”, and Statement No. 61, “The Financial Reporting Entity: Omnibus”, and includes all component units for which the City is financially accountable/fiscally responsible. The City’s financial reporting entity primary government presentation includes the City of Miami and the certain component units as follows: The City of Miami – that operates the public safety, health and welfare, streets and highways, culture and recreation, and administrative activities. The City of Miami is an incorporated municipality with a population of approximately 13,570 located in northeastern Oklahoma. The City operates under a council-manager form of government with a charter that provides for three branches of government:  Legislative – the governing body includes an elected five-member City Council and Mayor  Executive – the City Manager is the Chief Executive Officer and is appointed by the City Council  Judicial – the Municipal Judge is a practicing attorney appointed by the City Council Blended Component Units (separate legal entities for which the City Council is fiscally responsible, and for which the City Council members serve as the trustees/governing body of the entity): Miami Special Utility Authority (MSUA) – public trust that operates the electric, water, wastewater, and solid waste/sanitation services of the City. Miami Development Authority (MDA) – public trust created to promote the development of housing in Miami. Discretely Presented Component Units (separate legal entities for which the City Council is fiscally responsible, but appoints a separate governing body): Miami Education Facilities Authority (MEFA) – public trust that promotes the development of educational facilities within the city. Complete financial statements of the MEFA component unit can be obtained from: Board of Trustees, Miami Educational Facilities Authority, 2 N. Main, Suite 404, Miami, OK 74354. The trust is currently inactive. Miami Downtown Redevelopment Authority (MDRA) – public trust created to promote the redevelopment of the downtown area. The Authority does not issue separate financial statements. Miami Industrial and Public Facilities Authority (MIPFA) – public trust that promotes the use of facilities in the City of Miami area. The Authority does not issue separate financial statements. Miami Community Facilities Authority (MCFA) – public trust that promotes the development of commerce, housing, recreation, education and public facilities within the city. The Authority does not issue separate financial statements. 34  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Miami Industrial Development Authority (MIDA) – public trust that promotes industry in and around the City of Miami. Complete financial statements can be obtained from the office of the City Clerk. MIDA’s fiscal year end is July 31. Each of these component units listed above are Public Trusts established pursuant to Title 60 of Oklahoma State law. Public Trusts (Authorities) have no taxing power. The Authorities are generally created to finance City services through issuance of revenue bonds or other non-general obligation debt and to enable the City Council to delegate certain functions to the governing body (Trustees) of the Authority. In accordance with state law, the City Council must approve, by two-thirds vote, all debt obligations of these public trusts prior to incurring the obligation. The Authorities generally retain title to assets which are acquired or constructed with Authority debt or other Authority generated resources. In addition, the City has leased certain existing assets at the creation for the Authorities to the Trustees on a long-term basis. The City, as beneficiary of the Public Trusts, receives title to any residual assets when a Public Trust is dissolved. 2. Basis of Presentation and Accounting This annual report is presented in a format that substantially meets the presentation requirements of the Governmental Accounting Standards Board (GASB) in accordance with generally accepted accounting principles. The presentation includes financial statements that communicate the City’s financial condition and changes therein at two distinct levels:  The City as a Whole (a government-wide presentation)  The City’s Funds (a presentation of the City’s major and aggregate non-major funds) Government-Wide Financial Statements: In the Statement of Net Position and the Statement of Activities, we divide the City into three kinds of activities: Governmental activities - Most of the City’s basic services are reported here, including the police, fire, general administration, streets, parks and recreation. Sales taxes, franchise fees, fines, and state and federal grants finance most of these activities. Business-type activities – Services where the City charges a fee to customers to help it cover all or most of the cost of these services it provides. The City’s airport, water, sewer, electric and sanitation systems activities are reported here. Discretely presented component units -- Accounts for various activities related to economic development, facility management, facility construction, and downtown development. 35  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 The Statements of Net Position and Activities are reported on the accrual basis of accounting and economic resources measurement focus. Under the accrual basis of accounting, revenues are recognized when earned and expenses (including depreciation and amortization) are recorded when the liability is incurred or economic asset used. Fund Financial Statements: Governmental Funds: Most of the City’s basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end that are available for spending. Governmental funds report their activities on the modified accrual basis of accounting and current financial resources measurement focus that is different from other funds. For example, these funds report the acquisition of capital assets and payments for debt principal as expenditures and not as changes to asset and debt balances. The governmental fund statements provide a detailed short-term view of the City’s general government operations and the basic services it provides. Governmental fund information helps you determine (through a review of changes to fund balance) whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. The City’s governmental funds include: Major Funds:  General Fund – accounts for all activities not accounted for in other special-purpose funds. For reporting purposes the General Fund includes the activities of the Municipal Court Account, Drug & Safety Account, Travel Center Account, and Demolition Account. The General Fund’s major funding source is a three cent sales tax, franchise fees, hotel/motel tax, and miscellaneous charges for services.  Street and Stadium Project Fund – is a capital project fund that accounts for a .65 cent sales tax restricted for streets and other capital projects. Aggregated Non-Major Funds (reported as Other Governmental Funds): Special Revenue Funds include the Fishing License Fund, Street and Alley, Drug Forfeiture Fund, Summer Recreation Program, Grant Fund, RFC 07-09 Grant, MDA Housing Construction, Coleman Project, Police Grant, and Cemetery Perpetual Care Interest. Debt Service Funds – accounts for ad-valorem taxes levied by the City for use in retiring court-assessed judgments, general obligation bonds, and their related interest expenses. Capital Project Funds:  Pool Improvements Fund accounts for recreation fees used to rehabilitate the municipal pool.  Parks Department Projects accounts for general obligation bond proceeds used to acquire, construct, and equip city park and recreation facilities.  Main Street Project accounts for projects related to the revitalization of Main Street.  Capital Improvement Fund accounts for use tax used for city capital projects for various departments.  Cemetery Perpetual Care Fund accounts for cemetery fees that are restricted for capital improvements. The governmental funds are reported on the modified accrual basis of accounting. On the modified accrual basis of accounting, revenues are recorded when earned and measurable and available to pay 36  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 current financial obligations, while expenditures are recorded when incurred and normally due and payable from current financial resources. The City defines revenue availability as collected within 60 days of period end. The reconciliation of the governmental funds financial statements to the governmental activities presentation in the government-wide financial statements is the result of the use of the accrual basis of accounting and economic resources measurement focus at the government-wide level. Proprietary Funds: When the City charges customers for the services it provides, these services are generally reported in proprietary funds. Proprietary funds include enterprise funds and internal service funds. Enterprise funds are used to account for business-like activities provided to the general public. Internal service funds are used to account for business-like activities provided to other funds or departments of the City. Proprietary funds are reported on the accrual basis of accounting and economic resources measurement focus. For example, proprietary fund capital assets are capitalized and depreciated and principal payments on long- term debt are recorded as a reduction to the liability. The City’s proprietary funds include the following: Enterprise Funds Major Funds:  Miami Special Utility Authority (MUSA) that accounts for the activities of the public trust in providing water, sewer, electric, and sanitation/solid waste services to the public.  Airport Fund accounts for activities of the municipal airport. Internal Service Funds (combined for reporting purposes)  Group Insurance Fund that accounts for the cost of providing various group health and life insurance services to other funds and departments of the City.  Workers Compensation Fund that accounts for the cost of providing workers compensation insurance to the other funds and departments of the City.  Unemployment Compensation Reimbursement that accounts for the cost of providing unemployment benefits. 37  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 3. Cash and Cash Equivalents, Deposits and Investments Cash and cash equivalents includes all demand and savings accounts, certificates of deposit or short-term investments with an original maturity of three months or less, and money market investments. Trust account investments in open-ended mutual fund shares are also considered cash equivalents. Investments consist of long-term certificates of deposits and government money market funds. Certificates of deposit are reported at cost. Deposits and Investments Risks The City of Miami primary government and component units are governed by the deposit and investment limitations of state law and trust indentures. The deposits and investments held at June 30, 2017 by these entities are as follows: Maturities in Years Fair Credit On Less T ype Value Rating Demand T han One Demand deposits $ 13,726,131 N/A $ 13,726,131 $ - Cash on hand 2,346 N/A 2,346 - T ime deposits 3,487,355 N/A - 3,487,355 Money Market Funds 1,116,318 Not rated - 1,116,318 Sub-T otal $ 18,332,150 $ 13,728,477 $ 4,603,673 Reconciliation to Financial Stateme nts: Cash and cash equivalents $ 14,844,795 Investments 3,487,355 $ 18,332,150 GASB Statement No. 72, Fair Value Measurement and Application, established a hierarchy based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The City has the following recurring fair value measurements as of June 30, 2017: • Money Market Mutual Funds of $1,116,318 were valued using quoted market prices (Level 1 inputs). Custodial Credit Risk – Exposure to custodial credit risk related to deposits exists when the City holds deposits that are uninsured and uncollateralized; collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the City’s name; or collateralized without a written or approved collateral agreement. Exposure to custodial credit risk related to investments exists when the City holds investments that are uninsured and unregistered, with securities held by the counterparty or by its trust department or agent but not in the City’s name. The City’s policy as it relates to custodial credit risk is to secure its uninsured deposits with collateral, valued at no more than market value, at least at a level of 102% of the uninsured deposits and accrued 38  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 interest thereon. The City’s policy limits acceptable collateral to U.S. Treasury securities, federally insured obligations, or direct debt obligations of municipalities, counties, and school districts in Oklahoma. Also, as required by Federal 12 U.S.C.A., Section 1823(e), all financial institutions pledging collateral to the City must have a written collateral agreement approved by the board of directors or loan committee. At June 30, 2017, the City was not exposed to custodial credit risk. Component Unit: The bank deposit of the MDRA component unit of $8,502 at June 30, 2017 was fully insured by the F.D.I.C. The bank deposits of the MCFA component unit of $186,405 at June 30, 2017 was fully insured by the F.D.I.C. The bank deposits of the MIPFA component unit of $167,141 at June 30, 2017 was fully insured by the F.D.I.C. The bank deposits of the MIDA component unit of $184,887 at June 30, 2017 was fully insured by the F.D.I.C. Investment Credit Risk – The City’s investment policy limits investments, excluding retirement trust fund investments, to the following: a. Obligations of the U. S. Government, its agencies and instrumentalities; b. Collateralized or insured non-negotiable certificates of deposit or other evidences of deposit that are either insured or secured with acceptable collateral with an in-state financial institution, and fully insured deposits in out-of-state institutions; c. Insured or fully collateralized negotiable certificates of deposit; d. Repurchase agreements that have underlying collateral consisting of those items specified in paragraph a above; and e. Money market funds regulated by the SEC and in which investments consist of the investments mentioned in the previous paragraph a. Investment credit risk is the risk that an issuer or other counterpart to an investment will not fulfill its obligations. The City has no formal policy limiting investments based on credit rating, but discloses any such credit risk associated with their investments by reporting the credit quality ratings of investments in debt securities as determined by nationally recognized statistical rating organizations—rating agencies—as of the year end. Unless there is information to the contrary, obligations of the U.S. government or obligations explicitly guaranteed by the U.S. government are not considered to have credit risk and do not require disclosure of credit quality. Investment Interest Rate Risk – Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The City discloses its exposure to interest rate risk by disclosing the maturity dates of its various investments by date range. As noted in the schedule of deposits and investments above, at June 30, 2017, the investments held by the City mature between 2017 through 2018. 39  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Concentration of Investment Credit Risk - Exposure to concentration of credit risk is considered to exist when investments in any one issuer represent a significant percent of total investments of the City (any over 5% are disclosed). Restricted Cash and Investments The amounts reported as restricted assets of the Enterprise Funds on the Statement of Net Position are comprised of amounts held by the MSUA Enterprise Fund in accounts for the Oklahoma Water Resources Board promissory notes, 2001 Utility Revenue Bond and other accounts with restricted uses. The restricted assets as of June 30, 2017 are as follows: Cash and cash equivalents: Cash Restircted for Refundable deposits $ 49,524 Restricted for Construction - Money Markets Restricted for Debt Service 378,918 $ 428,442 Cash and cash equivalents, noncurrent: Money Markets Restricted for Debt Service $ 434,327 Cash Restircted for Refundable deposits 1,195 $ 435,522 Investments: Refundable deposits $ 187,524 $ 187,524 4. Receivables Material receivables in the governmental fund types and the governmental activities include revenue accruals such as court fines and economic development loans. These are reported as Due From Other Governments. Non-exchange transactions collectible but not available are deferred in the fund financial statements. Allowances for uncollectible accounts receivable are based upon historical trends and the periodic aging of accounts receivable. Business-type activities and the proprietary type fund consist of revenues earned at year-end and not yet received. Billed and unbilled utility accounts receivable comprise the majority of these receivables. Allowances for uncollectible accounts receivable are based upon historical trends and the periodic aging of accounts receivable. 40  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Less: Allowance Net Accounts for Uncollectible Accounts Receivable Accounts Receivable Governmental Activities: T axes $ 951,705 $ - $ 951,705 Due from other governments 1,309 - 1,309 Court fines 330,752 (229,810) 100,942 Other 2,239,303 - 2,239,303 T otal Governmental Activities $ 3,523,069 $ (229,810) $ 3,293,259 Reconciliation to Statement of Net Position: Accounts receivable, net $ 163,710 Due from other governmental agencies 905,853 Other receivable 2,223,696 T otal $ 3,293,259 Business-T ype Activities: Utilities $ 4,893,335 $ (1,843,525) $ 3,049,810 5. Inventories Inventories are valued at average cost. Inventories in the proprietary funds relate to fuel at the airport and material and supplies for the water, wastewater and electric systems. The cost of proprietary funds inventories are recorded as expenses when consumed rather than when purchased. 6. Capital Assets and Depreciation Capital Assets: For the primary government and component units, capital assets are reported at actual or estimated historical cost, net of accumulated depreciation where applicable. Donated capital assets are reported at their fair value at date of donation. Estimated historical cost was used to value the majority of the capital assets acquired prior to June 30, 1992. The capitalization threshold is capital assets with a cost of $5,000 or more. For the year ended June 30, 2017, capital assets balances changed as follows: 41  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Balance at Balance at July 1, 2016 Additions Deductions June 30, 2017 PRIMARY GOVERNMENT: Governmental activities: Capital assets not being depreciated: Land $ 5,487,269 $ - $ - $ 5,487,269 Construction in progress 1,008,519 743,104 1,238,945 512,678 Total capital assets not being depreciated 6,495,788 743,104 1,238,945 5,999,947 Other capital assets: Buildings 19,899,989 865,690 - 20,765,679 Infrastructure 44,865,954 417,314 - 45,283,268 M achinery, furniture and equipment 11,231,199 327,945 112,507 11,446,637 Total other capital assets at historical cost 75,997,142 1,610,949 112,507 77,495,584 Less accumulated depreciation for: Buildings 15,302,829 351,156 - 15,653,985 Infrastructure 31,152,258 896,737 - 32,048,995 M achinery, furniture and equipment 8,699,427 476,432 101,280 9,074,579 Total accumulated depreciation 55,154,514 1,724,325 101,280 56,777,559 Other capital assets, net 20,842,628 (113,376) 11,227 20,718,025 Governmental activities capital assets, net $ 27,338,416 $ 629,728 $ 1,250,172 $ 26,717,972 Balance at Balance at July 1, 2016 Additions Deductions June 30, 2017 Business-type activities: Capital assets not being depreciated: Land $ 750,530 $ - $ - $ 750,530 Construction in progress 545,050 420,035 6,929 958,156 Total capital assets not being depreciated 1,295,580 420,035 6,929 1,708,686 Other capital assets: Buildings and utility infrastructure 20,353,862 75,564 - 20,429,426 M achinery, furniture and equipment 13,883,725 233,652 4,200 14,113,177 Infrastructure 16,711,414 37,200 - 16,748,614 Total other capital assets at historical cost 50,949,001 346,416 4,200 51,291,217 Less accumulated depreciation for: Buildings and utility infrastructure 10,502,953 495,480 - 10,998,433 M achinery, furniture and equipment 10,544,075 693,080 4,200 11,232,955 Infrastructure 12,706,969 346,436 - 13,053,405 Total accumulated depreciation 33,753,997 1,534,996 4,200 35,284,793 Other capital assets, net 17,195,004 (1,188,580) - 16,006,424 Business-type activities capital assets, net $ 18,490,584 $ (768,545) $ 6,929 $ 17,715,110 Depreciation: Depreciable capital assets are depreciated on a straight-line basis over their useful lives. The range of estimated lives by type of assets is as follows:  Buildings 25-50 years  Improvements other than buildings 20-50 years  Utility property and improvements 15-50 years  Infrastructure 15-50 years  Machinery, furniture, and equipment 3–10 years Depreciation of capital assets is included in total expenses and is charged or allocated to the activities primarily benefiting from the use of the specific asset. Depreciation expense has been allocated as follows: 42  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Governmental Activities: General Government $ 66,644 Public Safety 182,546 Streets 979,818 Culture and Recreation 436,374 Economic Development 58,943 Total $ 1,724,325 Business-Type Activities: Airport $ 217,929 Electric 386,461 Water 259,101 Wastewater 453,410 Sanitation 218,095 Total $ 1,534,996 Capital assets of the component units were: M IDA Balance at Balance at July 1, 2016 Additions Deductions June 30, 2017 MIDA - Discreetly Presented Component unit Capital assets not being depreciated: Land $ 103,517 $ - $ - $ 103,517 Total capital assets not being depreciated 103,517 - - 103,517 Other capital assets: Buildings and utility infrastructure 1,036,353 - - 1,036,353 Less accumulated depreciation for: Buildings and utility infrastructure 227,812 20,727 - 248,539 Other capital assets, net 808,541 (20,727) - 787,814 M IDA capital assets, net $ 912,058 $ (20,727) $ - $ 891,331 Balance at Balance at July 1, 2016 Additions Deductions June 30, 2017 MDRA - Discreetly Presented Component unit Other capital assets: Buildings 6,500 - - 6,500 M achinery, furniture and equipment 18,756 - - 18,756 Total other capital assets at historical cost 25,256 - - 25,256 Less accumulated depreciation for: Buildings 2,600 650 - 3,250 M achinery, furniture and equipment 7,504 1,876 9,380 Total accumulated depreciation 10,104 2,526 - 12,630 Other capital assets, net 15,152 (2,526) - 12,626 M DRA capital assets, net $ 15,152 $ (2,526) $ - $ 12,626 43  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Balance at Balance at July 1, 2016 Additions Deductions June 30, 2017 MIPFA - Discreetly Presented Component unit Capital assets not being depreciated: Land $ 144,429 $ - $ - $ 144,429 Total capital assets not being depreciated 144,429 - - 144,429 Other capital assets: Buildings 574,724 - - 574,724 M achinery, furniture and equipment 75,000 87,235 - 162,235 Total other capital assets at historical cost 649,724 87,235 - 736,959 Less accumulated depreciation for: Buildings 279,025 19,681 - 298,706 M achinery, furniture and equipment 75,000 1,090 - 76,090 Total accumulated depreciation 354,025 20,771 - 374,796 Other capital assets, net 295,699 66,464 - 362,163 M IPFA capital assets, net $ 440,128 $ 66,464 $ - $ 506,592 Balance at Balance at July 1, 2016 Additions Deductions June 30, 2017 MCFA - Discreetly Presented Component unit Construction in progress $ - $ - $ - $ - Total capital assets not being depreciated - - - - Other capital assets: Buildings 8,534,080 66,319 - 8,600,399 Less accumulated depreciation for: Buildings 177,793 218,879 - 396,672 Other capital assets, net 8,356,287 (152,560) - 8,203,727 M CFA capital assets, net $ 8,356,287 $ (152,560) $ - $ 8,203,727 7. Internal and Interfund Balances and Transfers Internal and Interfund Balances: The City’s policy is to eliminate interfund receivable and payables between funds in the Statement of Net Position to avoid the grossing up of balances. Only the residual balances due between governmental and business-type activities are reported as internal balances and then offset in the total column. 44  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Re ce ivable Fund Payable Fund Amount Nature of Inte rfund Balance General Fund * Airport Fund * $ 1,313 Payroll reimbursement General Fund * MSUA * 86,495 Payroll reimbursement Street and Alley Capital Improvement Fund 38,404 Expense reimbursement Capital Improvement Fund General Fund * 6,657 Reclassification Street and Alley T ravel center 14,694 Expense reimbursement MSUA Airport Fund 535 Expense reimbursement MSUA * General Fund * 34,056 Expense reimbursement Airport Fund General Fund * 30,128 Posting correction MSUA * Airport Fund 58,995 T o cover negative balance in pooled cash T otal $ 271,277 * Denotes major fund. Due From Due T o Net Internal Reconciliation to Fund Financial Statements: Other Funds Other Funds Balances Governmental Funds $ 147,563 $ (123,939) $ 23,624 Proprietary Funds 123,714 (147,338) (23,624) T otal $ 271,277 $ (271,277) $ - Reconciliation to Statement of Net Position: Net Internal Balances $ (23,624) Internal Service Fund Activity reported in Business-type Activities 817,633 Net Internal Balance $ 794,009 Internal and Interfund Transfers: The City’s policy is to eliminate interfund transfers between funds in the Statement of Activities to avoid the grossing up of balances. Only the residual balances transferred between governmental and business- type activities are reported as internal transfers and then offset in the total column. Internal activities between funds and activities for the year ended June 30, 2017 were as follows: Transfer In Transfe r O ut Amount Nature of Interfund Transfe r General Fund * MSUA $ 7,493,383 Operating subsidy/pledged sales tax General Fund CIP 82,261 B Operating subsidy Street Project * MSUA 1,123,098 Pledged sales tax Street and alley * MSUA 500,000 A Operating subsidy Capital Improvement Fund * MSUA 41,516 A Debt Service payments Capital Improvement Fund * MSUA 1,300,000 A Capital project MSUA * General Fund 6,275,094 Operating subsidy/pledged sales tax $ 16,815,352 Denotes Major Fund Subtotal non-major Govermental Funds transfers in $ 1,841,516 A Subtotal non-major Govermental Funds transfers out $ 82,261 B T ransfers to T ransfers from Net Reconciliation to fund financial statements: Other Funds Other Funds T ransfers Governmental Funds $ (6,357,355) $ 10,540,258 $ 4,182,903 Enterprise Funds (10,457,997) 6,275,094 (4,182,903) T otals $ (16,815,352) $ 16,815,352 $ - Reconciliation to State ment of Activitie s: Net T ransfers T ransfer of capital assets (4,182,903) T ransfer of assets from Governmental Activities to Business T ype Activities 81,349 T ransfer of assets from Business-type activites to Governmental activiteis (29,634) T ransfers - Internal Activity $ (4,131,188) 45  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 8. Long-Term Debt The City’s long term debt consists of revenue bonds and notes, capital lease obligations, accrued compensated absences and long-term deposits subject to refund. For the year ended June 30, 2017, the City’s long-term debt balances changed as follows: Primary Government: Balance Balance Due Within Type of Debt July 1, 2016 Additions Deductions June 30, 2017 One Year Governmental Activities: Revenue Bond Discount $ (58,266) $ - $ (58,266) $ - $ - Revenue Bond Premium - 263,590 16,897 246,693 - Revenue Bonds 9,045,000 19,375,000 9,175,000 19,245,000 430,000 Capital Lease Obligations 946,768 149,481 272,915 823,334 204,470 Accrued Compensated Absences 585,185 - 8,145 577,040 57,704 Total Governmental Activities $ 10,518,687 $ 19,788,071 $ 9,414,691 $ 20,892,067 $ 692,174 Plus: Net OPEB obligation 508,052 - Net pension liability 8,101,304 - $ 29,501,423 $ 692,174 Reconcilation to Statement of Net Position: Due within one year $ 692,174 Due in more than one year 28,809,249 $ 29,501,423 Balance Balance Due Within Type of Debt July 1, 2016 Additions Deductions June 30, 2017 One Year Business-Type Activities: Notes Payable $ 5,306,066 $ - $ 589,628 $ 4,716,438 $ 602,819 Unamortized Bond Discount (7,999) - (1,478) (6,521) - Revenue Bonds 1,190,000 - 190,000 1,000,000 190,000 Capital Lease Obligations 539,487 201,258 234,938 505,807 201,143 Accrued Compensated Absences 182,891 - 2,793 180,098 18,010 Total Business-Type Activities $ 7,210,445 $ 201,258 $ 1,015,881 $ 6,395,822 $ 1,011,972 Plus: OPEB obligation 278,284 - Net pension obligation 2,762,537 - Refundable deposits 416,227 41,623 $ 9,852,870 $ 1,053,595 Reconcilation to Statement of Net Position: Due within one year $ 1,053,595 Due in more than one year 8,799,275 $ 9,852,870 Governmental activities long-term debt payable from property tax levies or other governmental revenues includes the following: Revenue Bond Payable – 2016 Sales Tax Revenue Bond for $19,375,000 with interest from .45% to 2.375% Debt service payments are due semi-annually through December 2029. Bonds are Secured with net revenues of the Special Utility Authority and a pledged sales tax. $19,245,000 46  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Current portion $430,000 Non-current portion 18.815,000 $19,245,000 Capital Lease Obligations: $109,380 capital lease obligation for the purchase of a 2013 loader, matures January 2018 with a stated interest rate of 2.79%. $11,547 $86,689 capital lease obligation for the purchase of a boom mower, matures August 2018 with a stated interest rate of 3.77%. 14,837 $90,154 capital lease obligation for the purchase of a crowler/dozer, matures September 2021 with a stated interest rate of 3.81%. 42,480 $993,730 capital lease obligation for the purchase of fire trucks, matures July 2020 with a stated interest rate of 5.00% 512,622 $158,325 capital lease obligation for the purchase of street sweeper, matures May 29, 2018 with a stated interest rate of 1.94%. 30,227 $149,481 capital lease obligation for the purchase of fire rescue truck, matures March 21,2022 with a stated interest rate of 3.01%. 142,295 $113,194 capital lease obligation for the purchase of two Torro mowers, matures July 2020 with a stated interest rate of 2.15% 69,326 Total capital lease obligations $823,334 Current portion $204,470 Non-current portion 618,864 $823,334 Business-type activities long-term debt payable from net revenues generated by and taxes pledged to the City’s business-type activities include the following: Capital Lease Obligation: $44,900 capital lease obligation for the purchase of a mini excavator, matures July 2021 with a stated interest rate of 1.95% $37,054 $209,365 capital lease obligation for the purchase of a bucket truck, matures October 2019 with a stated interest rate of 2.300% 96,753 $503,720 capital lease obligation for the purchase of a trash truck, matures July 2019 with a stated interest rate of 1.97% 207,796 $82,210 capital lease obligation for the purchase of a work truck, matures July 2019 with a stated interest rate of 2.13% 35,383 $69,950 capital lease obligation for the purchase of a mini excavator, matures July 2021 with a stated interest rate of 1.95%. 57,631 47  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 $86,408 capital lease obligation for the purchase of a tractor, matures July 2021 with a stated interest rate of 1.95%. 71,190 Total Capital Leases $505,807 Current portion $201,143 Non-current portion 304,664 $505,807 Revenue Bond Payable – 2011 SUA Revenue Bond for $1,915,000 with interest from 1.45% to 2.90% Debt service payments are due semi-annually through December 2021. Bonds are secured with net revenues of the Special Utility Authority. $1,000,000 Current portion $190,000 Non-current portion 810,000 $1,000,000 Notes Payable – Oklahoma Water Resources Board: Series 2003A for $1,760,000 with no interest charged; however, there is a .5% annual administrative fee. Debt service payments are due semi-annually through March, 2023. Notes are secured by the revenues of the Miami Special Utility Authority’s (the “Authority”), sanitary and pledged revenue of the Utility Fund for water and sewer. $572,000 Series 2003B for $3,020,000 with interest rate of 1.78% and .5% annual administrative fee. Debt service payments are due semi-annually through December 2023. Secured by revenues of the water, sewer, and garbage collection and disposal systems. 1,331,940 Series 2004A for $1,595,538 with no interest rate and .5% annual administrative fee. Debt service payments are due semi-annually through June 2024. Secured by revenues of the water, sewer, and garbage collection and disposal systems. 558,438 Series 2004B for $2,740,000 with interest rate of 1.78% and .5% annual administrative fee. Debt service payments are due semi-annually through June 2025. Secured by revenues of the water, sewer, and garbage collection and disposal systems. 1,223,060 Series 2004C for $1,620,000 with interest rate of 3.0% and .5% annual administrative fee. Debt service payments are due semi-annually through October 2024. Secured by revenues of the water, sewer, and garbage collection and disposal systems. 763,234 Series 2005 for $563,000 with no interest and .5% annual administrative fee. Debt service payments are due semi-annually through September 2025. Secured by revenues of the water, sewer, and garbage collection and disposal systems. 267,766 Total Notes Payable – Oklahoma Water Resources Board $4,716,438 Current portion $602,819 Non-current portion 4,113,619 $4,716,438 48  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Long-term debt service requirements to maturity are as follows: Governmental-Type Activities Revenue Bonds Payable Capital Leases Year Ending June 30, Principal Interest Principal Interest 2018 $ 430,000 $ 564,038 $ 204,470 $ 31,059 2019 440,000 555,338 156,309 24,021 2020 450,000 546,438 161,692 17,475 2021 455,000 537,388 274,581 2,524 2022 465,000 528,187 26,282 563 2023-2027 2,475,000 2,495,938 - - 2028-2032 1,610,000 2,244,606 - - 2033-2037 4,435,000 2,099,550 - - 2038-2042 3,925,000 1,242,375 - - 2023-2047 4,560,000 641,250 - - Total $ 19,245,000 $ 11,455,108 $ 823,334 $ 75,642 Business-Type Activities Notes Payable Revenue Bonds Payable Capital Leases Payable Year Ending June 30, Principal Interest Principal Interest Principal Interest 2018 $ 602,819 $ 120,341 $ 190,000 $ 22,230 $ 201,143 $ 6,391 2019 630,255 100,182 195,000 18,473 205,147 3,117 2020 641,593 85,068 200,000 14,025 54,200 1,381 2021 658,024 68,507 205,000 8,858 41,767 511 2022 669,477 50,567 210,000 3,045 3,550 5 2025-2026 1,514,270 42,464 - - - - Total $ 4,716,438 $ 467,129 $ 1,000,000 $ 66,631 $ 505,807 $ 11,405 Advanced Refunding: On August 19, 2016, the City issued $19,375,000 Miami Special Utility Authority, Series 2016 Sales Tax Revenue Refunding Bonds, with annual interest rate of .450% to 4.0% to refund $9,045,000 of the 2010 Sales Tax Revenue Note and $9,870,000 of the 2013 Bond Anticipation Note. The net proceeds of $18,965,620 (after payment of $672,401 in cost of issuance) along with available debt service funds form the 2010 issue of $567,611 were used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the 2010 and 2013 Series. As a result, the 2010 and 2013 Series bonds are considered to be paid in full and the liability for those bonds has been removed from the Statement of Net Position. The advance refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $710,127. This difference, reported in the accompanying financial statements as a deferred outflow at the government wide level is being charged to operations through the year 2026 using the straight-line method. The advance refunding increased the City’s total debt service payments over the next twenty nine years by $9,451,082 and resulted in an economic loss (difference between the present values of the old and new debt service payments) of $416,445. 49  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 MDRA Debt: The MDRA issued the 2010 note payable to First National Bank of Miami, payable in one annual installment, with interest of 4.75%, maturity date of December 2014 $96,452 Balance Balance Due Within Type of Debt July 1, 2016 Additions Deductions June 30, 2017 One Year Component Unit: MDRA notes payable $ 103,000 $ - $ 6,548 $ 96,452 $ 96,452 MCFA: The MCFA issued a note payable for $403,000 in October 2014 for the purchase of a scoreboard at the football facility. The note matures in June 2019. Balance Balance Due Within Type of Debt July 1, 2017 Additions Deductions June 30, 2017 One Year Component Unit: MCFA Bond Anticipation Note $ 9,367,972 $ 502,028 $ 9,870,000 $ - $ - MCFA Bond Anticipation Note Discount (38,661) - 38,661 - - Note payable 244,319 80,777 163,542 83,693 $ 9,573,630 $ 502,028 $ 9,912,116 $ 163,542 $ 83,693 Component Unit - MCFA Note Payable Year Ending June 30, Principal Interest 2018 $ 83,693 $ 6,541 2019 79,849 3,182 Total $ 163,542 $ 9,723 MIDA Debt: The MIDA issued the 2005 note payable to the Miami Area Economic Development Services, Inc, payable in monthly Installments of $3,300 with interest at 5.00% maturity date of February 1, 2020 $263,932 The MIDA issued the 2005 note payable to the Miami Area Economic Development Services, Inc, payable in monthly Installments of $1,918, with interest of 1.25%, maturity date of February 1, 2020 178,646 The MIDA issued the 2005 note payable to the Miami Area Economic Development Services, Inc,, payable in monthly Installments of $607, with interest of 4.00%, maturity date of February 1, 2020 50,611 Total debt outstanding – MIDA $493,189 50  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Balance Balance Due Within Type of Debt July 1, 2016 Additions Deductions June 30, 2017 One Year Component Unit: MIDA Note payable $ 544,666 $ - $ 51,477 $ 493,189 $ 53,261 Component Unit - MIDA Notes Payable Year Ending June 30, Principal Interest 2018 $ 53,261 $ 16,629 2019 55,123 14,766 2020 384,805 7,794 Total $ 493,189 $ 39,189 Pledge of Future Revenues Utility Net Revenues Pledge - The City and Special Utility Authority have pledged net utility revenues of the water, electric and wastewater systems to repay the OWRB Series 2003 B, 2003 A, 2004 A, 2004 B, 2004C, and 2005 promissory notes payable. Proceeds from the notes provided financing for capital assets. The notes are payable from net utility revenues and are payable through 2025. The total principal and interest payable for the remainder of the life of these notes is $5,813,567. Net utility revenues received in the current year were $4,579,551. Debt service payments of $717,910 for the current fiscal year were 15.7% of pledged net utility revenues. Pledged Sales Tax – The City has pledged 3.65 cents (or 100%) of future sales tax revenues to repay $1,915,000 of the Series 2011 Revenue Bonds and $19,375,000 of the Series 2016 Sales Tax Revenue Refunding Bonds. Three cents of the sales tax was voted by the citizens for general operations and .65 cent is legally restricted by a vote of the citizens for street purposes. The 2011 Revenue bonds are for water improvements. The 2016 bonds refinanced the 2010 bonds that were originally for street purposes and the 2013 bond anticipation note for the stadium construction. The .65 sales tax is used to pay the debt service on the 2016 bonds and the three cents is sent back to the general fund if not needed for debt service. The bonds are payable from pledged sales tax and net utility revenues and are payable through 2021 and 2029, respectively. The total principal and interest payable for the remainder of the life of these bonds is $31,766,739. Pledged sales taxes received in the current year were $6,301,572. Net revenues and sales tax pledged during the year was $10,875,344. Debt service payments of $771,859 for the current fiscal year were 7.1% of the pledged revenue. 9. Net Position and Fund Balances Government-wide net position is displayed in three components: a. Net investment in capital assets - Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvements of those assets. 51  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 b. Restricted net position - Consists of net position with constraints placed on the use either by 1) external groups such as creditors, grantors, contributors, or laws and regulations of other governments, or 2) law through constitutional provisions or enabling legislation. c. Unrestricted net position - All other net position that does not meet the definition of “restricted” or “net investment in capital assets.” It is the City’s policy to first use restricted net position prior to the use of unrestricted net position when an expense is incurred for purposes for which both restricted and unrestricted net position are available. At June 30, 2017 net position restricted by enabling legislation totaled $168,890. Fund Balance: Governmental fund equity is classified as fund balance. Fund balance is further classified as nonspendable, restricted, committed, assigned and unassigned. These classifications are defined as: a. Nonspendable – includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. b. Restricted – consists of fund balance with constraints placed on the use of resources either by (1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments, or (2) laws through constitutional provisions or enabling legislation. c. Committed – included amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the city’s highest level of decision-making authority. The City’s highest level of decision-making authority is made by ordinance. d. Assigned – includes amounts that are constrained by the city’s intent to be used for specific purposes but are neither restricted nor committed. Assignments of fund balance may be made by city council action or management decision (city manager) when the city council has delegated that authority. Assignments for revenues in other governmental funds are made through budgetary process. e. Unassigned – represents fund balance that has not been assigned to other funds and has not been restricted, committed, or assigned to specific purposes within the General Fund. The City’s policy for the use of fund balance amounts require that committed amounts would be reduced first followed by assigned amounts and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used. The following table shows the fund balance classifications as shown on the Governmental Funds Balance Sheet: 52  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Major Capital Project Fund Other General 2010 Street Governmental Fund Bond Project Fund Total Fund Balance: Restricted For: Police operations - grants $ - $ - $ 28,385 $ 28,385 General obligation debt service - 303,073 108,613 411,686 Capital improvements - - 295,196 295,196 Street improvements - 508,645 67,776 576,421 Culture and rec programs 17,900 - 252,698 270,598 Economic development - - 97,179 97,179 Police - drug programs - - 2,213 2,213 Sub-total restricted 17,900 811,718 852,060 1,681,678 Committed for: Street operations - - 2,885,062 2,885,062 Assigned for: Capital improvements - - 1,732,616 1,732,616 Demolition 16,857 - - 16,857 Culture and rec programs 13,772 - - 13,772 Supplement next year's budget 1,114,177 - - 1,114,177 Sub-total assigned 1,144,806 - 1,732,616 2,877,422 Unassigned: 195 - - 195 TOTAL FUND BALANCE $ 1,162,901 $ 811,718 $ 5,469,738 $ 7,444,357 11. Revenues Program Revenues: Program revenues within the statement of activities that are derived directly from each activity or from parties outside of the City’s taxpayers are reported as program revenues. The City has the following program revenues in each activity:  Public Safety – Fire, Police, Emergency Management, Court, Civil Defense, fire run charges, officer’s training charges for services, police sentinel charges for services, restricted operating grants, 911 revenue, court and restricted capital grants  Streets – Commercial vehicle and gasoline excise tax shared by the State  Culture and recreation –pool fees, library fees, fishing permits, softball fees, recreation fees operating and capital grants  General Government – license and permits, fines and forfeitures, cemetery revenue, impact fees, and operating grants  Economic Development – rents, operating grants All other governmental revenues are reported as general. All taxes are classified as general revenue even if restricted for a specific purpose. 53  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Sales Tax Revenue: Sales tax revenue represents a 3.65 cents tax on each dollar of taxable sales of which is collected by the Oklahoma Tax Commission and remitted to the City. The sales tax is deposited 3 cents in the general fund and .65 cents in the Street and Stadium Bond Project Fund. The entire sales tax initially reported in the General Fund is then transferred to the MSUA per the bond indenture pledge then transferred back to the appropriate funds. The .65 cents is legally restricted for street and stadium purposes by a vote of the citizens. Property Tax Revenue: In accordance with state law, a municipality may only levy a property tax to retire general obligation debt approved by the voters and to pay judgments rendered against the City. The City’s property taxes are billed and collected by the County and remitted to the City. Property taxes levied by the City are billed and collected by the County Treasurer's Office and remitted to the City in the month following collection. Property taxes are levied normally in October and are due in equal installments on December 31 and March 31. Property taxes unpaid for the fiscal year are attached by an enforceable lien on property in the following October. For the year ended June 30, 2017, the City did not assess a property tax. Ad valorem collections related to delinquent taxes collected in the current year. 12. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to, or destruction of assets; errors and omissions; injuries to employees; employee health and life; and natural disasters. The City manages these various risks of loss as follows:  General Liability – Covered through purchased insurance  Physical Property – Covered through purchased insurance with a $35,000 deductible.  Workers’ Compensation – Workers’ compensation is covered through self-insurance using a third party processor to process claims. The City also has a stop-loss policy which covers individual claims in excess $400,000 for electric, police and firefighters and $350,000 for all other classes of employees per occurrence.  Employee’s Group Medical –Covered through self-insurance using a third party processor to process medical claims. The City uses the third party processor’s estimates to record group insurance claims payable. The City also has a stop-loss policy which covers individual claims in excess of $70,000.  Unemployment – the City is self-insured. Management believes the insurance coverage listed above is sufficient to preclude any significant uninsured losses to the City. Settled claims have not exceeded this insurance coverage in any of the past two fiscal years. 54  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Worker's Health Unemployment Compensation Care Fund Total Claim liability, June 30, 2015 $ 963,125 $ 206,440 $ 5,654 $ 1,175,219 Claims and changes in estimates 578,902 2,086,774 7,466 2,673,142 Claims payments (175,687) (2,245,573) (12,811) (2,434,071) Claim liability, June 30, 2016 1,366,340 47,641 309 1,414,290 Claims and changes in estimates 1,627,874 2,063,081 20,617 3,711,572 Claims payments (632,157) (2,024,127) (20,926) (2,677,210) Claim liability, June 30, 2017 $ 2,362,057 $ 86,595 $ - $ 2,448,652 13. Retirement Plan Participation Deferred Outflows, Inflows and Net Pension Liability by plan: Governmental Business Type Total Deferred Outflows: Police Pension $ 848,755 $ - $ 848,755 Fire Pension 657,099 - 657,099 OMRF 514,107 789,538 1,303,645 Total $ 2,019,961 $ 789,538 $ 2,809,499 Deferred Inflows: Police Pension $ 125,503 $ - $ 125,503 Fire Pension 45,126 - 45,126 OMRF 243,330 122,552 365,882 Total $ 413,959 $ 122,552 $ 536,511 Net Pension Liability: Police Pension $ 700,954 $ - $ 700,954 Fire Pension 5,062,191 - 5,062,191 OMRF 2,338,158 2,762,537 5,100,695 Total $ 8,101,303 $ 2,762,537 $ 10,863,840 Oklahoma Municipal Retirement Plan (OkMRF) – Defined Benefit Plan A. Plan Description The City contributes to the OkMRF for all eligible employees except for those covered by the Police and Firefighter Pension Systems. The plan is an agent multiple employer - defined benefit plan administered by OkMRF. The OkMRF plan issues a separate financial report and can be obtained from OkMRF or from their website: www.okmrf.org/reports.html. Benefits are established or amended by the City Council in accordance with O.S. Title 11, Section 48-101-102. 55  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 B. Summary of Significant Accounting Policies For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s plan and additions to/deductions from the City’s fiduciary net position have been determined on the same basis as they are reported by OkMRF. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value based on published market prices. Detailed information about the OkMRF plans’ fiduciary net position is available in the separately issued OkMRF financial report. C. Eligibility Factors and Benefit Provisions As of 07/01/15 Provision OkMRF Plan a. Eligible to participate Full-time employees except police, firefighters and other employees who are covered under an approved system. b. Period Required to Vest 10 years of credited service c. Eligibility for Distribution -Normal retirement at age 65 with 10 years of service -Early retirement at age 55 with 10 years of service -Disability retirement upon disability with 10 years of service -Death benefit with 10 years of service for married employees d. Benefit Determination Base Final average salary - the average of the five highest consecutive annual salaries out of the last 10 calendar years of service e. Benefit Determination Methods: Normal Retirement -1.875% of final average salary multiplied by credited years of service Early Retirement -Actuarially reduced benefit based upon age, final average salary, and years of service at termination Disability Retirement -Same as normal retirement Death Benefit -50% of employees accrued benefit, but terminates upon spouse re-marriage Prior to 10 Years Service -No benefits f. Benefit Authorization -Benefits are established and amended by City Council adoption of an ordinance in accordance with O.S. Title, 11, Section 48-101-102 56  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 g. Form of Benefit Payments Normal form is a 60 months certain and life thereafter basis. Employee may elect, with City consent, option form based on actuarial equivalent. D. Employees Covered by Benefit Terms Active Employees 121 Deferred Vested Former Employees 5 Retirees or Retiree Beneficiaries 81 Total 207 E. Contribution Requirements The City Council has the authority to set and amend contribution rates by ordinance for the OkMRF defined benefit plan in accordance with O.S. Title 11, Section 48-102. The contribution rates for the current fiscal year have been made in accordance with an actuarially determined rate. The actuarially determined rate is 12.60% of covered payroll as of July 1, 2016. For the year ended June 30, 2017, the City recognized $623,633 of employer contributions to the plan which is in excess of the actuarially determined amount by $31,042 based on covered payroll of $4,703,090. Employees contribute 3.75% to the plan in accordance with the plan provisions adopted by the City Council. Employee contributions for fiscal 2017 were $176,367. F. Actuarial Assumptions Date of Last Actuarial Valuation July 1, 2016 a. Actuarial cost method Entry age normal b. Rate of Return on Investments and Discount Rate 7.75% c. Projected Salary Increase Varies between 7.42% and 4% based on age d. Post Retirement cost-of-Living Increase None e. Inflation Rate 3% f. Mortality Table UP 1994, with projected mortality improvement g. Percent of married employees 100% h. Spouse age difference 3 years (female spouses younger) i. Turnover Select and ultimate rates Ultimate rates are age-related as shown Additional rates per thousand are added during the first 5 years: 57  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Year 1: 215 Year 2: 140 Year 3: 95 Year 4: 65 Year 5: 40 j. Date of last experience study September 2012 for fiscal years 2007 thru 2011 G. Discount Rate – The discount rate used to value benefits was the long-term expected rate of return on plan investments of 7.75% since the plan’s net fiduciary position is projected to be sufficient to make projected benefit payments. The City has adopted a funding method that is designed to fund all benefits payable to participants over the course of their working careers. Any differences between actual and expected experience are funded over a fixed period to ensure all funds necessary to pay benefits have been contributed to the trust before those benefits are payable. Thus, the sufficiency of pension plan assets was made without a separate projection of cash flows. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation (3.0%). Best estimates of arithmetic real rates of return for each major asset class included in the pension plan’s target asset allocation as of July 1, 2016 are summarized in the following table: 58  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Target Real Weighted Allocation Return Return Large cap stocks 25% 5.40% 1.35% S&P 500 Small/mid cap stocks 10% 7.50% 0.75% Russell 2500 Long/short equity 10% 6.10% 0.61% MSCI ACWI International stocks 20% 5.10% 1.02% MSCI EAFE Fixed income bonds 30% 2.60% 0.78% Barclay's Capital Aggregate Real estate 5% 4.80% 0.24% NCREIF Cash equivalents 0% 0.00% 0.00% 3 month Treasury TOTAL 100% Average Real Return 4.75% Inflation 3.00% Long-term expected return 7.75% H. Changes in Net Pension Liability – The total pension liability was determined based on an actuarial valuation performed as of July 1, 2016 which is also the measurement date. There were no changes in assumptions or changes in benefit terms that affected measurement of the total pension liability. There were also no changes between the measurement date of July 1, 2016 and the City’s report ending date of June 30, 2017, that would have had a significant impact on the net pension liability. The following table reports the components of changes in net pension liability: 59  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Increase (Decrease) Total Pension Plan Net Net Pension Liability Position Liability (a) (b) (a) - (b) Balances Beginning of Year $ 14,320,474 $ 9,549,376 $ 4,771,098 Changes for the Year: Service cost 344,545 - 344,545 Interest expense 1,073,154 - 1,073,154 Experience losses (gains) - (202,315) - (202,315) (amortized over avg remain svc period of actives & inactive) Contributions--City - 640,172 (640,172) Contributions--members - 181,046 (181,046) Net investment income - 83,267 (83,267) Benefits paid (964,663) (964,663) - Plan administrative expenses - (18,698) 18,698 Net Changes 250,721 (78,876) 329,597 Balances End of Year $ 14,571,195 $ 9,470,500 $ 5,100,695 Sensitivity of the net pension liability to changes in the discount rate. The following presents the net pension liability of the City, calculated using the discount rate of 7.75 percent, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.75 percent) or 1-percentage-point higher (8.75 percent) than the current rate: 1% Current 1% Decrease Discount Increase (6.75%) Rate (7.75%) (8.75%) Net Pension Liability $ 6,823,372 $ 5,100,695 $ 3,680,815 The City reported $567,699 in pension expense for the year ended June 30, 2017. At June 30, 2017, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual experience $ 64,283 $ 164,286 Net difference between projected and actual earnings on pension plan investments 411,789 - Changes in proportion and differences between City contributions and proportionate share of contributions 191,009 191,009 City contributions during measurement date 12,931 10,587 City contributions subsequent to the measurement date 623,633 - Total $ 1,303,645 $ 365,882 The $623,633 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2018. Any other amounts reported as deferred 60  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended June 30: 2018 $ 23,121 2019 23,123 2020 184,577 2021 95,303 2022 (11,994) $ 314,130 Oklahoma Firefighter’s Pension – Statewide Cost Sharing Plan Plan description - The City of Miami, as the employer, participates in the Firefighters Pension & Retirement—a cost-sharing multiple-employer defined benefit pension plan administered by the Oklahoma Firefighters Pension & Retirement System (FPRS). Title 11 of the Oklahoma State Statutes grants the authority to establish and amend the benefit terms to the FPRS. FPRS issues a publicly available financial report that can be obtained at www.ok.gov/fprs Summary Significant Accounting Policies - For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Oklahoma Firefighters Pension & Retirement System (FPRS) and additions to/deductions from FPRS’s fiduciary net position have been determined on the same basis as they are reported by FPRS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Benefits provided - FPRS provides retirement, disability, and death benefits to members of the plan. Benefits for members hired prior to November 1, 2013 are determined as 2.5 percent of the employee’s final average compensation times the employee’s years of service and have reached the age of 50 or have complete 20 years of service, whichever is later. For volunteer firefighters, the monthly pension benefit for normal retirement is $150.60 per month. Benefits vest with 10 years or more of service. Benefits for members hired after November 1, 2013 are determined as 2.5 percent of the employee’s final average compensation times the employee’s years of service and have reached the age of 50 or have complete 22 years of service, whichever is later. For volunteer firefighters, the monthly pension benefit for normal retirement is $165.66 per month. Benefits vest with 11 years or more of service. All firefighters are eligible for immediate disability benefits. For paid firefighters, the disability in-the-line- of-duty benefit for firefighters with less than 20 years of service is equal to 50% of final average monthly compensation, based on the most recent 30 months of service. For firefighters with over 20 years of service, a disability in-the-line-of-duty is calculated based on 2.5% of final average monthly compensation, based on the most recent 30 months, per year of service, with a maximum of 30 years of service. For disabilities not-in-the-line-of-duty, the benefit is limited to only those with less than 20 years of service and is 50% of final average monthly compensation, based on the most recent 60-month salary as opposed to 3 0 months. For volunteer firefighters, the not-in-line-of-duty disability is also limited to only those with less than 20 61  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 years of service and is $7.53 per year of service. For volunteer firefighters, the in-line-of-duty pension is $150.60 with less than 20 years of service, or $7.53 per year of service, with a maximum of 30 years. A $5,000 lump sum death benefit is payable to the qualified spouse or designated recipient upon the participant's death. The $5,000 death benefit does not apply to members electing the vested benefit. Contributions - The contributions requirements of the Plan are at an established rate determined by Oklahoma Statute and are not based on actuarial calculations. Employees are required to contribute 9% percent of their annual pay. Participating cities are required to contribute 14% of the employees’ annual pay. Contributions to the pension plan from the City were $165,905. The State of Oklahoma also made on- behalf contributions to FPRS in the amount of $408,837 this is reported as both a revenue and an expenditure in the General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance. In the government-wide Statement of Activities, revenue is recognized for the state’s on-behalf contributions on an accrual basis of $382,573. These on-behalf payments did not meet the criteria of a special funding situation. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions - At June 30, 2017, the City reported a liability of $5,062,191 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2016. The City’s proportion of the net pension liability was based on the City’s contributions received by the pension plan relative to the total contributions received by pension plan for all participating employers as of June 30, 2016. Based upon this information, the City’s proportion was .4144%. For the year ended June 30, 2017, the City recognized pension expense of $524,705. At June 30, 2017, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Deferred Inflows of Resources Resources Differences between expected and actual experience $ 135,704 $ - Net difference between projected and actual earnings on pension plan investments 309,729 - Changes in proportion and differences between City contributions and proportionate share of contributions 45,761 43,294 City contributions during the measurement date - 1,832 City contributions subsequent to the measurement date 165,905 - Total $ 657,099 $ 45,126 The $165,905 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: 62  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Year ended June 30: 2016 $ 41,254 2017 41,254 2018 202,503 2019 151,615 2020 8,200 Thereafter 1,242 Total $ 446,068 Actuarial Assumptions-The total pension liability was determined by an actuarial valuation as of July 1, 2015, using the following actuarial assumptions, applied to all prior periods included in the measurement: Inflation: 3% Salary increases: 3.5% to 9.0% average, including inflation Investment rate of return: 7 .5% net of pension plan investment expense Mortality rates were based on the RP2000 combined healthy with blue collar adjustment as appropriate, with adjustments for generational mortality improvement using scale AA for healthy lives and no mortality improvement for disabled lives. The actuarial assumptions used in the July 1, 2016, valuation were based on the results of an actuarial experience study for the period July 1, 2007, to June 30, 2012. The long-term expected rate of return on pension plan investments was determined using a building block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense, and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of June 30, 2016, are summarized in the following table: Target Long-Term Expected Asset Class Allocation Real Rate of Return Fixed income 20% 5.18% Domestic equity 47% 8.70% International equity 15% 10.87% Real estate 10% 7.23% Other assets 8% 6.24% Discount Rate-The discount rate used to measure the total pension liability was 7 .5%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current contribution rate and that contributions from employers will be made at contractually required rates, determined by State statutes. Projected cash flows also assume the State of Oklahoma will continue contributing 36% of the insurance premium, as established by statute. Based on these assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 63  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Sensitivity of the Net Pension Liability to Changes in the Discount Rate-The following presents the net pension liability of the employers calculated using the discount rate of 7 .5%, as well as what the Plan's net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (6.5%) or 1-percentage-point higher (8.5%) than the current rate: 1% Decrease Current Discount 1% Increase (6.5%) Rate (7.5%) (8.5%) Employers' net pension liability $ 6,408,330 $ 5,062,191 $ 3,933,594 Pension plan fiduciary net position - Detailed information about the pension plan’s fiduciary net position is available in the separately issued financial report of the FPRS; which can be located at www.ok.gov/fprs . Oklahoma Police Pension – Statewide Cost Sharing Plan Plan description - The City of Miami, as the employer, participates in the Oklahoma Police Pension and Retirement Plan—a cost-sharing multiple-employer defined benefit pension plan administered by the Oklahoma Police Pension and Retirement System (OPPRS). Title 11 of the Oklahoma State Statutes, through the Oklahoma Legislature, grants the authority to establish and amend the benefit terms to the OPPRS. OPPRS issues a publicly available financial report that can be obtained at www.ok.gov/OPPRS Summary of significant accounting polices - For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Oklahoma Firefighters Pension & Retirement System (OPPRS) and additions to/deductions from OPPRS’s fiduciary net position have been determined on the same basis as they are reported by OPPRS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Benefits provided - OPPRS provides retirement, disability, and death benefits to members of the plan. The normal retirement date under the Plan is the date upon which the participant completes 20 years of credited service, regardless of age. Participants become vested upon completing 10 years of credited service as a contributing participant of the Plan. No vesting occurs prior to completing 10 years of credited service. Participants’ contributions are refundable, without interest, upon termination prior to normal retirement. Participants who have completed 10 years of credited service may elect a vested benefit in lieu of having their accumulated contributions refunded. If the vested benefit is elected, the participant is entitled to a monthly retirement benefit commencing on the date the participant reaches 50 years of age or the date the participant would have had 20 years of credited service had employment continued uninterrupted, whichever is later. Monthly retirement benefits are calculated at 2.5% of the final average salary (defined as the average paid base salary of the officer over the highest 30 consecutive months of the last 60 months of credited service) multiplied by the years of credited service, with a maximum of 30 years of credited service considered. Monthly benefits for participants due to permanent disability incurred in the line of duty are 2.5% of the participants’ final average salary multiplied by 20 years. This disability benefit is reduced by stated percentages for partial disability based on the percentage of impairment. After 10 years of credited service, participants who retire due to disability incurred from any cause are eligible for a monthly benefit based on 2.5% of their final average salary multiplied by the years of service. This disability benefit is also reduced 64  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 by stated percentages for partial disability based on the percentage of impairment. Effective July 1, 1998, once a disability benefit is granted to a participant, that participant is no longer allowed to apply for an increase in the dollar amount of the benefit at a subsequent date. Survivor’s benefits are payable in full to the participant’s beneficiary upon the death of a retired participant. The beneficiary of any active participant killed in the line of duty is entitled to a pension benefit. Contributions - The contributions requirements of the Plan are at an established rate determine by Oklahoma Statute and are not based on actuarial calculations. Employees are required to contribute 8% percent of their annual pay. Participating cities are required to contribute 13% of the employees’ annual pay. Contributions to the pension plan from the City were $152,094. The State of Oklahoma also made on- behalf contributions to OPPRS in the amount of $137,102 this is reported as both a revenue and an expenditure in the General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance. In the government-wide Statement of Activities, revenue is recognized for the state’s on-behalf contributions on an accrual basis of $164,386. These on-behalf payments did not meet the criteria of a special funding situation. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions - At June 30, 2017, the City reported a liability of $700,954 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2016. The City’s proportion of the net pension liability was based on the City’s contributions received by the pension plan relative to the total contributions received by pension plan for all participating employers as of June 30, 2016. Based upon this information, the City’s proportion was .4577%. For the year ended June 30, 2017, the City recognized pension expense of $243,972. At June 30, 2017, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Deferred Inflows of Resources Resources Differences between expected and actual experience $ 2,249 $ 78,738 Net difference between projected and actual earnings on pension plan investments 673,497 - Changes in proportion and differences between City contributions and proportionate share of contributions 20,915 28,626 City contributions during measurement date 18,139 City contributions subsequent to the measurement date 152,094 - Total $ 848,755 $ 125,503 The $152,094 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension 65  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 liability in the year ended June 30, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended June 30: 2018 $ 90,513 2019 90,513 2020 228,364 2021 160,818 2022 950 Total $ 571,158 Actuarial Assumptions-The total pension liability was determined by an actuarial valuation as of July 1, 2016, using the following actuarial assumptions, applied to all prior periods included in the measurement: Inflation: 3% Salary increases: 4.5% to 17% average, including inflation Investment rate of return: 7 .5% net of pension plan investment expense Mortality rates: Active employees (pre-retirement) RP-2000 Blue Collar Healthy Combined table with age set back 4 years with fully generational improvement using Scale AA. Active employees (post-retirement) and nondisabled pensioners: RP- 2000 Blue Collar Healthy Combined table with fully generational improvement using scale AA. Disabled pensioners: RP-2000 Blue Collar Healthy Combined table with age set forward 4 years with fully generational improvement using Scale AA. The actuarial assumptions used in the July 1, 2016, valuation were based on the results of an actuarial experience study for the period July 1, 2007, to June 30, 2012. The long-term expected rate of return on pension plan investments was determined using a building block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense, and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of June 30, 2016, are summarized in the following table: 66  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Long-Term Expected Asset Class Real Rate of Return Fixed income 3.27% Domestic equity 5.16% International equity 8.61% Real estate 4.97% Private Equity 8.32% Commodities 2.42% The current allocation policy is that approximately 60% of assets in equity instruments, including public equity, long-short hedge, venture capital, and private equity strategies; approximately 25% of assets in fixed income to include investment grade bonds, high yield and non-dollar denominated bonds, convertible bonds, and low volatility hedge fund strategies; and 15% of assets in real assets to include real estate, commodities, and other strategies. Discount Rate-The discount rate used to measure the total pension liability was 7 .5%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current contribution rate and that contributions from employers will be made at contractually required rates, determined by State statutes. Projected cash flows also assume the State of Oklahoma will continue contributing 14% of the insurance premium, as established by statute. Based on these assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Net Pension Liability to Changes in the Discount Rate-The following presents the net pension liability of the employers calculated using the discount rate of 7 .5%, as well as what the Plan's net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (6.5%) or 1-percentage-point higher (8.5%) than the current rate: 1% Decrease Current Discount 1% Increase (-6.5%) Rate (7.5%) (-8.5%) Employers' net pension liability (asset) $ 1,839,075 $ 700,954 $ (260,015) Pension plan fiduciary net position - Detailed information about the pension plan’s fiduciary net position is available in the separately issued financial report of the OPPRS; which can be located at www.ok.gov/OPPRS . City of Miami 457 Deferred Compensation Plan (DC Plan) Plan Description – The City of Miami makes available to all full-time employees two Section 457 deferred compensation plans. The DC Plan was created in accordance with Section 457 of the Internal Revenue Code, and permits the employees to defer a portion of their salary until future years. The deferred compensation is not available to the employee until retirement, termination, death, or unforeseeable emergency. Employees may choose investments offered by International City/County Management Association (ICMA) or the DC Plan. Separate audited financial statements are not available. Funding Policy – DC Plan participants may contribute up to $15,000 of eligible compensation per year. During the year ended June 30, 2017, employees contributed $112,534 and the employer contributed $0 to the DC Plan. 67  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 ICMA Retirement Deferred Compensation Plan In addition to the above plans, the City of Miami offers a retirement plan through ICMA which is funded 18% by the employer and zero percent by employee contributions. Employee and employer contributions to the plan for the year ended June 30, 2017, there were no contributions to the plan. Separate audited financial statements are not available. 14. Postemployment Healthcare Plan Plan Description. The City sponsors Medical, Rx, and Dental insurance to qualifying retirees and their dependents. Coverage is provided through fully-insured arrangements that collectively operate as a substantive single-employer defined benefit plan. Qualifying retirees are those employees who are eligible for immediate disability or retirement benefits under the Oklahoma Police Pension and Retirement System, Oklahoma Firefighter’s Pension and Retirement System, or the City of Miami Retirement Plan. Retirees may continue coverage with the City by paying the carrier premium rate. Coverage is available for each of the lifetimes of retirees and their spouses. Authority to establish and amend benefit provisions rest with the City Council. Retirees may continue coverage with the City by paying the premium rate. Benefits are paid from general operating assets of the City. Funding Policy. The contribution requirements of plan members and the City are established by the City Council. Annual health insurance premium amounts are established by the city council. The required contribution is based on projected pay-as-you-go financing requirements. For fiscal year 2017, the actuarially expected City contribution in the form of net age adjustment was $206,267 to the Plan. Plan members receiving benefits contributed zero of the total premiums, through their payment of the full determined premium in FY 2017. Annual OPEB Cost and Net OPEB Obligation. The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period of thirty years. The following table shows the components of the City's annual OPEB cost the amount actually contributed to the plan, and changes in the City's net OPEB obligation to for the year ended June 30, 2016: Normal Cost $ 459,130 Interest on ARC 12,601 Amortization of Actuarial Accrued Liablity (AAL) (38,098) Annual OPEB cost (expense) 433,633 Employer Contributions (206,267) Increase in net OPEB obligation 227,366 Net OPEB obligation - beginning of year 558,970 Net OPEB obligation - end of year $ 786,336 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for were as follows: 68  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Percentage of Annual OPEB Cost Fiscal Year Annual OPEB Cost Contributed Net OPEB Obligation 6/30/09 $105,076 37% $66,123 6/30/10 108,217 36% 135,639 6/30/11 84,160 30% 194,323 6/30/12 90,722 24% 262,933 6/30/13 90,722 26% 329,965 6/30/14 195,104 100% 330,783 6/30/15 195,104 100% 331,601 6/30/16 433,636 47.5% 558,970 6/30/17 433,633 47.5% 786,336 Funded Status and Funding Progress. As of July 1, 2015, the most recent actuarial valuation date, the Plan was not funded. The actuarial accrued liability (AAL) for benefits was $2,718,703, and the actuarial value of assets was zero, resulting in an unfunded actuarial accrued liability (UAAL) of $2,718,703. The covered payroll (annual payroll of active employees covered by the plan) was $7.2 million, and the ratio of the UAAL to the covered payroll was 38 percent. Because the plan is a substantive plan there are no plan assets. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the July 1, 2015, actuarial valuation, the Projected Unit Credit actuarial cost method was used. The actuarial assumptions included a 4.75 percent investment rate of return (net of administrative expenses), which is a blended rate of the expected long-term investment returns on plan assets and on the employer's own investments calculated based on the funded level of the Plan at the valuation date, and an annual healthcare cost trend rate of 7 percent initially, reduced by decrements to an ultimate rate of 5 percent in 2015. The UAAL is being amortized over 30 years based on a level percent-of-pay open-period basis. The remaining amortization period at July 1, 2015, was twenty-six years. As of the date of this valuation, there are no plan assets. Retiree premiums are paid as they come due from general operating assets of the City. 15. Commitments and Contingencies Litigation The City is a party to various legal proceedings which normally occur in the course of governmental operations. The financial statements do not include accruals or provisions for loss contingencies that may 69  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 result from these proceedings. State statutes provide for the levy of an ad valorem tax over a three-year period by a City Sinking Fund for the payment of any court assessed judgment rendered against the City. While the outcome of the above noted proceedings cannot be predicted, due to the insurance coverage maintained by the City and the State statute relating to judgments, the City feels that any settlement or judgment not covered by insurance would not have a material adverse effect on the financial condition of the City. Grant Programs The City of Miami participates in various federal or state grant/loan programs from year to year. In 2017, the City’s involvement in federal and state award programs is relatively material. The grant/loan programs are often subject to additional audits by agents of the granting or loaning agency, the purpose of which is to ensure compliance with the specific conditions of the grant or loan. The City has not been notified of any noncompliance with federal or state award requirements. Any liability for reimbursement which may arise as a result of these audits cannot be reasonably determined at this time, although it is believed the amount, if any, would not be material. 16. Future Accounting Pronouncements Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions – GASB No., 75 was issued in June 2015, and addresses accounting and financial reporting for OPEB that is provided to the employees of state and local governmental employers. This Statement establishes standards for recognizing and measuring liabilities, deferred outflows of resources, deferred inflows of resources, and expense/expenditures. For a defined benefit OPEB, this Statement identifies the methods and assumptions that are required to be used to project benefit payments, discount projected benefit payments to their actuarial present value, and attribute that present value to periods of employee service. Note disclosure and required supplementary information requirements about defined benefit OPEB also are addressed. This Statement is effective for fiscal years beginning after June 15, 2017. The City has not yet determined the impact that implementation of GASB 75 will have on its net position, although it may be material. GASB Statement No. 81, Irrevocable Split-Interest Agreements – GASB 81 was issued in March 2016, to improve accounting and financial reporting for irrevocable split-interest agreements by providing recognition and measurement guidance for situations in which a government is a beneficiary of the agreement. At this time, the impact to the city is unknown. GASB Statement No. 83, Certain Asset Retirement Obligations, issued December 2016, will be effective for the City beginning with its fiscal year ending June 30, 2019. Under Statement No. 83, a government that has legal obligations to perform future asset retirement activities related to its tangible capital assets is required to recognize a liability and a corresponding deferred outflow of resources. The Statement identifies the circumstances that trigger the recognition of these transactions. The Statement also requires the measurement of an asset retirement obligation to be based on the best estimate of the current value of outlays expected to be incurred while the deferred outflow of resources associated with the asset retirement obligation will be measured at the amount of the corresponding liability upon initial measurement and generally recognized as an expense during the reporting periods that the asset provides service. The Statement requires disclosures including a general description of the asset retirement obligation and associated tangible capital assets; the source of the obligation to retire the assets; the methods and assumptions used to measure the liability; and other relevant information. The City has not yet determined the impact implementation will have on its net position. 70  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 GASB Statement 84, Fiduciary Activities, issued January 2017, will be effective for the City for the City beginning with its fiscal year ending June 30, 2019. This Statement establishes criteria for identifying fiduciary activities of all state and local governments. The focus of the criteria generally is on (1) whether a government is controlling the assets of the fiduciary activity and (2) the beneficiaries with whom a fiduciary relationship exists. Separate criteria are included to identify fiduciary component units and postemployment benefit arrangements that are fiduciary activities. The City has not yet determined the impact that implementation of GASB 80 will have on its net position. GASB Statement 85, Omnibus 2017, issued March 2017, will be effective for the City beginning with its fiscal year ending December 31, 2018. This Statement address a variety of topics including issues related to blending component units, goodwill, fair value measurement and application, and postemployment benefits. The City has not yet determined the impact that implementation of GASB 85 will have on its net position. GASB Statement 86, Certain Debt Extinguishment Issues, issued May 2017, will be effective for the City beginning with its fiscal year ending December 31, 2018. The primary objective of this Statement is to improve the consistency in accounting and financial reporting for in-substance defeasance of debt by providing guidance for transactions in which cash and other monetary assets acquired with only existing resources – resources other than the proceeds of refunding debt – are placed in an irrevocable trust for the sole purpose of extinguishing debt. This Statement also improves accounting and financial reporting for prepaid insurance on debt that is extinguished and notes to financial statements for debt that is defeased in substance. The City has not yet determined the impact that implementation of GASB 86 will have on its net position. GASB Statement 87, Leases, issued June 2017, will be effective for the City beginning with its fiscal year ending December 31, 2020. The primary objective of this Statement is to increases the usefulness of governments’ financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings the right to use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments’ leasing activities. The City has not yet determined the impact that implementation of GASB 87 will have on its net position. 71  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 REQUIRED SUPPLEMENTARY INFORMATION 72  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Budgetary Comparison Schedules (Budgetary Basis) – Year Ended June 30, 2017 GENERAL FUND Actual Variance with Budgeted Amounts Amounts Final Budget Original Final (Budget basis) Positive (Negative) Beginning Budgetary Fund Balance: $ 1,321,541 $ 1,321,541 $ 1,303,264 $ (18,277) Resources (Inflows): Taxes and assessments 6,753,800 6,753,800 6,814,641 60,841 Fees, licenses and permits 51,100 51,100 48,812 (2,288) Charges for services 162,200 164,200 150,525 (13,675) Fines and forfeitures 213,900 213,900 201,969 (11,931) Interest earned 12,500 12,500 13,438 938 M iscellaneous 20,000 33,390 85,023 51,633 Intergovernmental 93,700 132,542 143,603 11,061 Total Resources (Inflows) 7,307,200 7,361,432 7,458,011 96,579 Amounts available for appropriation 8,628,741 8,682,973 8,761,275 78,302 Charges to Appropriations (Outflows): General Government M uncipal Court 174,814 174,814 163,313 11,501 General Government 1,267,081 1,262,694 1,058,247 204,447 M CVB 396,872 404,977 413,239 (8,262) Human Resources 270,209 272,616 276,905 (4,289) Legal 148,835 148,835 114,338 34,497 Economic Development - Public Safety Police 2,175,454 2,212,589 2,056,636 155,953 Fire 1,883,842 1,929,831 1,906,295 23,536 Emergency M anagement 74,253 74,253 57,389 16,864 Police Communications 386,252 386,252 369,999 16,253 Code Enforecement 101,547 101,547 96,831 4,716 Risk M anagement 86,588 87,972 87,484 488 Public Works and Streets Streets 748,831 753,256 653,572 99,684 Cemetery 297,781 303,212 293,353 9,859 Facilities 312,878 312,878 250,383 62,495 Animal Control 140,323 144,683 91,643 53,040 Culture and Recreation Parks 636,333 637,168 512,065 125,103 Swimming Pool 193,164 193,164 146,832 46,332 Library 504,557 537,035 493,634 43,401 Total Charges to Appropriations 9,799,614 9,937,776 9,042,158 895,618 Other financing sources (uses) Transfers from other funds 7,420,873 7,503,134 7,518,145 15,011 Transfers to other funds (6,250,000) (6,250,000) (6,275,094) (25,094) Total other financing sources (uses) 1,170,873 1,253,134 1,243,051 (10,083) Ending Budgetary Fund Balance $ - $ (1,669) $ 962,168 $ 963,837 73  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Schedule Footnotes to Budgetary Comparison: 1. The budgetary comparison schedules and budgetary fund balance amounts are reported on a non- GAAP basis that report revenues on a cash basis, and expenditures in the period the invoice is received, except for payroll expenditures that are recorded when paid. In addition, obligations that are required to be funded from ending budgetary fund balances are subtracted from total ending budgetary fund balances to arrive at the unassigned budgetary fund balance. This presentation of unassigned fund balances on a budgetary basis is used to demonstrate compliance with Article 10, § 26 of the Oklahoma State Constitution. 2. The legal level of appropriation control is the department level within a fund. Transfers of appropriation within a fund require the approval of the City Manager. All supplemental appropriations require the approval of the City Council. Supplemental appropriations must be filed with the Office of the State Auditor and Inspector. 3. The budgetary basis differs from the modified accrual (GAAP) basis as shown in the schedule below: Fund Balance Net Change in Fund Balance July 1, 2016 Fund Balance June 30, 2017 Budget to GAAP Reconciliation: Fund Balance - GAAP Basis $1,523,133 ($360,232) $1,162,901 Increases (Decreases): Revenues: Receivable from other governments and entities (798,417) 99,938 (698,479) Accounts receivable (117,627) 1,078 (116,549) State on behalf pension payments (555,847) 9,908 (545,939) Combining accounts (137,083) 37,897 (99,186) Expenditures: Accrued payroll 223,764 33,102 256,866 Other expenditures 609,494 (152,879) 456,615 State on behalf pension payments 555,847 (9,908) 545,939 Fund Balance - Budgetary Basis $1,303,264 ($341,096) $962,168 74  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Pension Information Schedules of Required Supplementary Information SCHEDULE OF THE CITY OF MIAMI'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY OKLAHOMA FIREFIGHTERS PENSION & RETIREMENT SYSTEM Last 10 Fiscal Years* 2014 2015 2016 City's proportion of the net pension liability 0.413176% 0.418954% 0.4143524% City's proportionate share of the net pension liability $ 4,887,039 $ 4,446,809 $ 5,062,191 City's covered-employee payroll $ 1,089,326 $ 1,144,680 $ 1,159,023 City's proprotionate share of the net pension liability as a percentage of its covered-employee payroll 449% 388% 437% Plan fiduciary net position as a percentage of the total pension liability 68.12% 68.27% 64.87% *The amounts present for each fiscal year were determined as of 6/30 Notes to Schedule: Only the previous three fiscal years are presented because 10-year data is not yet available. SCHEDULE OF CITY CONTRIBUTIONS OKLAHOMA FIREFIGHTERS PENSION & RETIREMENT SYSTEM Last 10 Fiscal Years 2015 2016 2017 Statutorially required contribution $ 160,255 $ 162,264 $ 165,905 Contributions in relation to the statutorially required contribution 160,255 162,264 165,905 Contribution deficiency (excess) $ - $ - $ - City's covered-employee payroll $ 1,144,680 $ 1,159,023 $ 1,185,033 Contributions as a percentage of covered-employee payroll 14.00% 14.00% 14.00% Notes to Schedule: Only the previous three fiscal years are presented because 10-year data is not yet available. 75  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Schedules of Required Supplementary Information SCHEDULE OF THE CITY OF MIAMI PORTIONATE SHARE OF THE NET PENSION LIABILITY (ASSET OKLAHOMA POLICE PENSION & RETIREMENT SYSTEM Last 10 Fiscal Years* 2014 2015 2016 City's proportion of the net pension liability (asset) 0.4416% 0.3977% 0.4577% City's proportionate share of the net pension liability (asset) $ (148,685) $ 16,217 $ 700,954 City's covered-employee payroll $ 1,184,882 $ 1,131,472 $ 1,201,369 City's proprotionate share of the net pension liability (asset) as a percentage of its covered-employee payroll 12.55% 1.43% 58.35% Plan fiduciary net position as a percentage of the total pension liability (asset) 101.53% 99.82% 93.50% *The amounts present for each fiscal year were determined as of 6/30 Notes to Schedule: Only the previous three fiscal years are presented because 10-year data is not yet available. SCHEDULE OF CITY CONTRIBUTIONS OKLAHOMA POLICE PENSION & RETIREMENT SYSTEM Last 10 Fiscal Years 2015 2016 2017 Statutorially required contribution $ 145,903 $ 156,178 $ 152,094 Contributions in relation to the statutorially required contribution 145,903 156,178 152,094 Contribution deficiency (excess) $ - $ - $ - City's covered-employee payroll $ 1,131,472 $ 1,201,369 $ 1,169,953 Contributions as a percentage of covered-employee payroll 12.89% 13.00% 13.00% Notes to Schedule: Only the previous three fiscal years are presented because 10-year data is not yet available. 76  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Required Supplementary Information Oklahoma Municipal Retirement Fund Schedule of Changes in Net Pension Liability and Related Ratios Last Fiscal Year 2014 2015 2016 Total pension liability Service cost $ 276,403 $ 308,701 $ 344,545 Interest 1,034,763 1,037,326 1,073,154 Changes of benefit terms - - - Differences between expected and actual experience - 102,207 (202,315) Changes of assumptions - - - Benefit payments, including refunds of member contributions (997,138) (1,006,438) (964,663) Net change in total pension liability 314,028 441,796 250,721 Total pension liability - beginning 13,564,650 13,878,678 14,320,474 Total pension liability - ending (a) $ 13,878,678 $ 14,320,474 $ 14,571,195 Plan fiduciary net position Contributions - employer $ 569,542 $ 618,748 $ 640,172 Contributions - member 166,578 175,420 181,046 Net investment income 1,363,071 261,920 83,267 Benefit payments, including refunds of member contributions (997,138) (1,006,438) (964,663) Administrative expense (20,151) (19,533) (18,698) Other - - - Net change in plan fiduciary net position 1,081,902 30,117 (78,876) Plan fiduciary net position - beginning 8,437,357 9,519,259 9,549,376 Plan fiduciary net position - ending (b) $ 9,519,259 $ 9,549,376 $ 9,470,500 Net pension liability - ending (a) - (b) $ 4,359,419 $ 4,771,098 $ 5,100,695 Plan fiduciary net position as a percentage of the total pension liability 68.59% 66.68% 64.99% Covered employee payroll $ 4,461,027 $ 4,742,831 $ 4,703,091 Net pension liability as a percentage of covered- 97.72% 100.60% 108.45% employee payroll *The amounts present for each fiscal year were determined as of 6/30 Notes to Schedule: Only the previous three fiscal years are presented because 10-year data is not yet available. 77  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Required Supplementary Information Oklahoma Municipal Retirement Fund Schedule of Employer Contributions Last Fiscal Year 2015 2016 2017 Actuarially determined contribution $ 616,160 $ 643,059 $ 592,589 Contributions in relation to the actuarially 616,160 643,059 623,633 determined contribution Contribution deficiency (excess) $ - $ - $ (31,044) Covered employee payroll $ 4,661,027 $ 4,849,681 $ 4,703,091 Contributions as a percentage of covered-employee payroll 13.22% 13.26% 13.26% Notes to Schedule: 1. Only the previous three fiscal years are presented because 10-year data is not yet available. 2. Latest Valuation Date: July 1, 2016 3. Actuarially determined contribution rate is calculated as of July 1, 2016 July 2016 through June 2017 contributions were at a rate of 12.60%. 4. Methods and assumptions used to determine contribution rates: Actuarial cost method - Entry age normal Amortization method - Level percent of payroll, closed Remaining amortization period - 29 years Asset valuation method - Actuarial: Smoothing period - 4 years Recognition method - Non-asymptotic Corridor - 70% - 130% Salary increases - 4.00% to 7.42% (varies by attained age) Investment rate of return - 7.50% 78  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Required Supplementary Information – OPEB The funded status and funding progress of the City’s defined benefit OPEB plan for the most recent actuarial valuations is as follows: July 1, 2009 July 1, 2010 July 1, 2012 July 1, 2014 July 1, 2015 Actuarial accrued liability - AAL (a) $ 785,142 $ 723,628 $ 782,605 $ 1,632,033 $ 2,718,703 Actuarial value of plan assets (b) - - - - - Unfunded actuarial accrued liability - UAAL (funding excess) (a) - (b) $ 785,142 $ 723,628 $ 782,605 $ 1,632,033 $ 2,718,703 Funded ratio (b)/(a) 0% 0% 0% 0% 0% Covered payroll (c) $ 6,900,000 $ 6,446,000 $ 7,134,999 $ 6,741,735 $ 7,200,000 UAAL (funding excess) as a % of covered payroll [UAAL/ (c)] 12% 11% 11% 24% 38% 79  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 OTHER SUPPLEMENTARY INFORMATION 80  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Combining Balance Sheet – General Fund Accounts - June 30, 2017 Municipal Court Travel Information General Fund Account Center Account Demolition Account Total General Fund ASSETS Cash and cash equivalents $ 687,343 $ 21,173 $ - $ 129,156 $ 837,672 Investments 13,154 - - - 13,154 Receivables: Accounts receivable 116,549 - - - 116,549 Due from other funds 87,808 - - - 87,808 Due from other accounts 11,351 - - - 11,351 Receivable from other governments 697,609 - - 870 698,479 Total assets $ 1,613,814 $ 21,173 $ - $ 130,026 $ 1,765,013 LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Liabilities: Accounts payable and accrued liabilities $ 136,587 $ 9,627 $ 16,264 $ 77 $ 162,555 Wages payable 256,866 - - - 256,866 Due to other funds 70,841 - 14,694 - 85,535 Due to other accounts - 11,351 - - 11,351 Total liabilities 464,294 20,978 30,958 77 516,307 DEFERRED INFLOWS OF RESOURCES Deferred revenue 85,805 - - - 85,805 Fund balances: Restricted 17,900 - - - 17,900 Assigned 1,045,815 - (30,958) 129,949 1,144,806 Unassigned - 195 - - 195 Total fund balances 1,063,715 195 (30,958) 129,949 1,162,901 Total liabilities, deferred inflows and fund balances $ 1,613,814 $ 21,173 $ - $ 130,026 $ 1,765,013 Note: For Governmental Fund reporting, the negative unassigned fund balance has been eliminated by reducing the assigned fund balance element. 81  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Combining Schedule of Revenues, Expenditures, and Changes in Fund Balance – General Fund Accounts – Year Ended June 30, 2017 Travel Municipal Information Demolition Total General General Fund Court Account Center Account Account Fund REVENUES Taxes $ 5,568,610 $ - $ - $ - $ 5,568,610 Intergovernmental 759,880 - - - 759,880 Charges for services 193,650 - - - 193,650 Fines and forfeitures 203,079 - - 14,721 217,800 Licenses and permits 53,725 - - - 53,725 Investment income 13,344 - - - 13,344 Miscellaneous 122,827 - 61,429 - 184,256 Total revenues 6,915,115 - 61,429 14,721 6,991,265 EXPENDITURES Current: General government 1,615,154 - - 71,660 1,686,814 Public safety 4,983,288 - - - 4,983,288 Public works and streets 1,281,938 - - - 1,281,938 Culture and recreation 1,128,501 - - - 1,128,501 Economic development 414,284 - 99,887 - 514,171 Debt Service: Principal 144,149 - - - 144,149 Interest and fiscal charges 30,669 - - - 30,669 Total expenditures 9,597,983 - 99,887 71,660 9,769,530 Excess (deficiency) of revenues over expenditures (2,682,868) - (38,458) (56,939) (2,778,265) OTHER FINANCING SOURCES (USES) Transfers in 7,518,144 - 7,500 50,000 7,575,644 Transfers out (5,157,611) - - - (5,157,611) Total other financing sources and uses 2,360,533 - 7,500 50,000 2,418,033 Net change in fund balances (322,335) - (30,958) (6,939) (360,232) Fund balances - beginning 1,386,050 195 - 136,888 1,523,133 Fund balances - ending $ 1,063,715 $ 195 $ (30,958) $ 129,949 $ 1,162,901 82  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Combining Balance Sheet - Non-Major Governmental Funds - June 30, 2017 SPECIAL REVENUE FUNDS FISHING STREET AND DRUG FORFEITURE SUMMER RECREATION LICENSE FUND ALLEY FUND PROGRAM GRANT FUND ASSETS Cash and cash equivalents $ 56,792 $ 2,827,052 $ 2,213 $ 190,479 $ 19,795 Accounts receivable - - - - - Due from other governments - 10,664 - - - Due from other funds - 53,098 - - - Total assets $ 56,792 $ 2,890,814 $ 2,213 $ 190,479 $ 19,795 LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Liabilities: Accounts payable and accrued liabilities $ - $ 5,752 $ - $ 8,312 $ 3,782 Wages payable - - - 13,277 - Due to other funds - - - - - Total liabilities - 5,752 - 21,589 3,782 Deferred Inflows: Deferred revenue - - - - - Fund balances: Restricted 56,792 - 2,213 168,890 16,013 Commited - 2,885,062 - - - Assigned - - - - - Total fund balances 56,792 2,885,062 2,213 168,890 16,013 Total liabilities, deferred inflows and fund balances $ 56,792 $ 2,890,814 $ 2,213 $ 190,479 $ 19,795 (continued) 83  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Combining Balance Sheet - Non-Major Governmental Funds - June 30, 2017, Continued SPECIAL REVENUE FUNDS RFC 07-09 MDA-HOUSING COLEMAN POLICE GRANT FUND CONSTRUCTION FUND PROJECT GRANTS ASSETS Cash and cash equivalents $ 5,463 $ 91,716 $ 18,850 $ 28,385 Accounts receivable - - - - Due from other governments - - - - Due from other funds - - - - Total assets $ 5,463 $ 91,716 $ 18,850 $ 28,385 LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Liabilities: Accounts payable and accrued liabilities $ - $ - $ 7,847 $ - Wages payable - - - - Due to other funds - - - - Total liabilities - - 7,847 - Deferred Inflows: Deferred revenue - - - - Fund balances: Restricted 5,463 91,716 11,003 28,385 Commited - - - - Assigned - - - - Total fund balances 5,463 91,716 11,003 28,385 Total liabilities, deferred inflows and fund balances $ 5,463 $ 91,716 $ 18,850 $ 28,385 84  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Combining Balance Sheet - Non-Major Governmental Funds - June 30, 2017, Continued SPECIAL REVENUE DEBT SERVICE FUNDS FUND CAPITAL PROJECT FUNDS CEMETERY CEMETERY PERPETUAL CARE G.O. BOND PERPETUAL MAIN STREET CAPITAL INTEREST SINKING FUND CARE PROJECT IMPROVEMENT FUND ASSETS Cash and cash equivalents $ - $ 108,613 $ 149,460 $ 67,776 $ 1,789,619 Accounts receivable - - - - 47,161 Due from other governments - 55,410 - - - Due from other funds - - - - 6,657 Total assets $ - $ 164,023 $ 149,460 $ 67,776 $ 1,843,437 LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Liabilities: Accounts payable and accrued liabilities $ - $ - $ - $ - $ 72,417 Wages payable - - - - - Due to other funds - - - - 38,404 Total liabilities - - - - 110,821 Deferred Inflows: Deferred revenue - 55,410 - - - Fund balances: Restricted - 108,613 149,460 67,776 - Commited - - - - - Assigned - - - - 1,732,616 Total fund balances - 108,613 149,460 67,776 1,732,616 Total liabilities, deferred inflows and fund balances $ - $ 164,023 $ 149,460 $ 67,776 $ 1,843,437 85  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Combining Balance Sheet - Non-Major Governmental Funds - June 30, 2017, Continued CAPITAL PROJECT FUNDS PARK POOL DEPARTMENT IMPROVEMENT FUND PROJECTS TOTALS ASSETS Cash and cash equivalents $ 103,695 $ 42,041 $ 5,501,949 Accounts receivable - - 47,161 Due from other governments - - 66,074 Due from other funds - - 59,755 Total assets $ 103,695 $ 42,041 $ 5,674,939 LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Liabilities: Accounts payable and accrued liabilities $ - $ - $ 98,110 Wages payable - - 13,277 Due to other funds - - 38,404 Total liabilities - - 149,791 Deferred Inflows: Deferred revenue - - 55,410 Fund balances: Restricted 103,695 42,041 852,060 Commited - - 2,885,062 Assigned - - 1,732,616 Total fund balances 103,695 42,041 5,469,738 Total liabilities, deferred inflows and fund balances $ 103,695 $ 42,041 $ 5,674,939 86  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance – Nonmajor Governmental Funds – Year Ended June 30, 2017 SPECIAL REVENUE FUNDS SUMMER FISHING STREET AND DRUG FORFEITURE RECREATION LICENSE FUND ALLEY FUND PROGRAM GRANT FUND REVENUES Taxes $ - $ - $ - $ - $ - Intergovernmental 5,000 117,447 - - 7,250 Charges for services - - - 108,959 - Investment income - - - - - Miscellaneous - 2,246 - 3,685 13,689 Total revenues 5,000 119,693 - 112,644 20,939 EXPENDITURES Current: General government - - - - - Public safety - - 2,901 - - Public works - 84,642 - - - Culture and recreation - - - 80,760 14,428 Capital Outlay - 396,170 - - - Debt Service Principal retirement - 80,964 - - - Interest and fiscal charges - 3,482 - - - Total Expenditures - 565,258 2,901 80,760 14,428 Revenues over (under) expenditures 5,000 (445,565) (2,901) 31,884 6,511 OTHER FINANCING SOURCES (USES) Debt proceeds - - - - - Transfers in - 500,000 - - - Transfers out - - - - - Total other financing sources (uses) - 500,000 - - - Net change in fund balances 5,000 54,435 (2,901) 31,884 6,511 Fund balances - beginning 51,792 2,830,627 5,114 137,006 9,502 Fund balances - ending $ 56,792 $ 2,885,062 $ 2,213 $ 168,890 $ 16,013 (continued) 87  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance – Nonmajor Governmental Funds – Year Ended June 30, 2017, Continued SPECIAL REVENUE FUNDS MDA-HOUSING RFC 07-09 CONSTRUCTION COLEMAN POLICE GRANT FUND FUND PROJECT GRANTS REVENUES Taxes $ - $ - $ - $ - Intergovernmental - - - - Charges for services - - - - Investment earnings - - - - Miscellaneous - - - 25,000 Total revenues - - - 25,000 EXPENDITURES Current: General government - - 7,847 - Public safety 732 - - - Public works - - - - Culture and recreation - - - - Capital Outlay - - - - Debt Service Principal retirement - - - - Interest and fiscal charges - - - - Total Expenditures 732 - 7,847 - Excess (deficiency) of revenues over expenditures (732) - (7,847) 25,000 OTHER FINANCING SOURCES (USES) Proceeds from long-term debt - - - - Transfers in - - - - Transfers out - - - - Total other financing sources and uses - - - - Net change in fund balances (732) - (7,847) 25,000 Fund balances - beginning 6,195 91,716 18,850 3,385 Fund balances - ending $ 5,463 $ 91,716 $ 11,003 $ 28,385 (continued) 88  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance – Nonmajor Governmental Funds – Year Ended June 30, 2017, Continued SPECIAL DEBT SERVICE REVENUE FUNDS FUND CAPITAL PROJECT FUNDS CEMETERY CEMETERY CAPITAL PERPETUAL G.O. BOND PERPETUAL MAIN STREET IMPROVEMENT CARE INTEREST SINKING FUND CARE PROJECT FUND REVENUES Taxes $ - $ 21,525 $ - $ - $ 333,108 Intergovernmental - - - - - Charges for services - - 4,175 - - Investment earnings - - - - 250 Miscellaneous - - - - 63 Total revenues - 21,525 4,175 - 333,421 EXPENDITURES Current: General government - - - - - Public safety - - - - - Public works - - - - - Culture and recreation - - - - - Capital Outlay - - - - 651,083 Debt Service Principal retirement - - - - 47,801 Interest and fiscal charges - 900 - - 1,778 Total Expenditures - 900 - - 700,662 Excess (deficiency) of revenues over expenditures - 20,625 4,175 - (367,241) OTHER FINANCING SOURCES (USES) Proceeds from long-term debt - - - - 149,481 Transfers in - - - - 1,341,516 Transfers out - - - - (82,261) Total other financing sources and uses - - - - 1,408,736 Net change in fund balances - 20,625 4,175 - 1,041,495 Fund balances - beginning - 87,988 145,285 67,776 691,121 Fund balances - ending $ - $ 108,613 $ 149,460 $ 67,776 $ 1,732,616 (continued) 89  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance – Nonmajor Governmental Funds – Year Ended June 30, 2017, Continued CAPITAL PROJECT FUNDS POOL PARK IMPROVEMENT DEPARTMENT FUND PROJECTS TOTALS REVENUES Taxes $ - $ - $ 354,633 Intergovernmental - - 129,697 Charges for services 10,422 - 123,556 Investment earnings - - 250 Miscellaneous - - 44,683 Total revenues 10,422 - 652,819 EXPENDITURES Current: General government - - 7,847 Public safety - - 3,633 Public works - - 84,642 Culture and recreation - - 95,188 Capital Outlay - - 1,047,253 Debt Service Principal retirement - - 128,765 Interest and fiscal charges - - 6,160 Total Expenditures - - 1,373,488 Excess (deficiency) of revenues over expenditures 10,422 - (720,669) OTHER FINANCING SOURCES (USES) Proceeds from long-term debt - - 149,481 Transfers in - - 1,841,516 Transfers out - - (82,261) Total other financing sources and uses - - 1,908,736 Net change in fund balances 10,422 - 1,188,067 Fund balances - beginning 93,273 42,041 4,281,671 Fund balances - ending $ 103,695 $ 42,041 $ 5,469,738 90  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Combining Schedule of Net Position – Special Utility Authority Accounts – June 30, 2017 Miami Special Utility Authority Accounts Utility Improvement Stormwater Rainy Day Public Utilities Account Account Account Total ASSETS Current assets: Cash and cash equivalents $ 1,058,369 $ 200,277 $ 200,595 $ 3,820,273 $ 5,279,514 Cash and cash equivalents, restricted 315,603 112,839 - - 428,442 Investments - - - 2,668,550 2,668,550 Accounts receivable, net 3,009,431 - - - 3,009,431 Other receivable 436 - - - 436 Accrued interest receivable 809 - - - 809 Inventory 844,430 - - - 844,430 Due from other accounts 110,985 - - - 110,985 Due from other funds 93,586 - - - 93,586 Total current assets 5,433,649 313,116 200,595 6,488,823 12,436,183 Non-current assets: Cash and cash equivalents, restricted 435,522 - - - 435,522 Investments, restricted 187,524 - - - 187,524 Capital assets: Land, construction in progress, and water rights 1,484,521 - - - 1,484,521 Other capital assets, net of accumulated depreciation 12,716,275 - - - 12,716,275 Total non-current assets 14,823,842 - - - 14,823,842 Total assets 20,257,491 313,116 200,595 6,488,823 27,260,025 DEFERRED OUTFLOW OF RESOURCES Deferred amounts related to pension 765,948 - - - 765,948 LIABILITIES Current liabilities: Accounts payable and accrued liabilities 1,661,651 1,000 - - 1,662,651 Wages payable 127,477 - - - 127,477 Due to other accounts - - 110,985 - 110,985 Due to other funds 86,495 - - - 86,495 Accrued interest payable 37,283 - - - 37,283 Accrued compensated absences 18,010 - - - 18,010 Refundable deposits 41,623 - - - 41,623 Capital lease payable 201,143 - - - 201,143 Revenue bond payable - 190,000 - - 190,000 Notes payable 602,819 - - - 602,819 Total current liabilities 2,776,501 191,000 110,985 - 3,078,486 Non-current liabilities: Accrued compensated absences 162,088 - - - 162,088 Net pension liability 2,741,140 - - - 2,741,140 Net OPEB obligation 278,284 - - - 278,284 Refundable deposits 374,604 - - - 374,604 Capital lease payable 304,663 - - - 304,663 Revenue bond payable - 803,479 - - 803,479 Notes payable, net 4,113,620 - - - 4,113,620 Total non-current liabilities 7,974,399 803,479 - - 8,777,878 Total liabilities 10,750,900 994,479 110,985 - 11,856,364 DEFERRED INFLOW OF RESOURCES Deferred amounts related to pensions 98,874 - - - 98,874 NET POSITION Net investment in capital assets 8,978,551 (993,479) - - 7,985,072 Restricted for debt service 663,123 112,839 - - 775,962 Unrestricted 531,991 199,277 89,610 6,488,823 7,309,701 Total net position $ 10,173,665 $ (681,363) $ 89,610 $ 6,488,823 $ 16,070,735 91  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Combining Schedule of Revenues, Expenses and Changes in Net Position – Special Utility Authority Accounts - Year Ended June 30, 2017 Miami Special Utility Authority Accounts Utility Improvement Stormwater Rainy Day Public Utilities Account Account Account Total REVENUES Charges for services $ 22,901,978 $ - $ - $ - $ 22,901,978 Fees, licenses and permits - - 135,086 - 135,086 Miscellaneous 803,073 - - - 803,073 Total operating revenues 23,705,051 - 135,086 - 23,840,137 OPERATING EXPENSES Personal services 3,937,705 - 30,338 - 3,968,043 Materials and supplies 11,507,604 - 21,582 - 11,529,186 Other services and charges 2,917,356 - 20,210 - 2,937,566 Depreciation expense 1,317,067 - - - 1,317,067 Total operating expenses 19,679,732 - 72,130 - 19,751,862 Operating income 4,025,319 - 62,956 - 4,088,275 NON-OPERATING REVENUES (EXPENSES) Investment income 61 13 - 17,944 18,018 Miscellaneous 29,744 - - - 29,744 Disposal of capital assets (29,634) - - - (29,634) Interest expense and fiscal charges (139,897) (28,937) - - (168,834) Total non-operating revenue (expenses) (139,726) (28,924) - 17,944 (150,706) Income (loss) before contrbutions and transfers 3,885,593 (28,924) 62,956 17,944 3,937,569 Transfers in, interaccount 118,658 215,200 - 166,610 500,468 Transfers out, interaccount (381,810) (81,458) (37,200) - (500,468) Captial contributions from governmental activities 81,349 - - - 81,349 Transfers in 6,275,094 - - - 6,275,094 Transfers out (10,457,997) - - - (10,457,997) Change in net position (479,113) 104,818 25,756 184,554 (163,985) Total net position - beginning 10,652,778 (786,181) 63,854 6,304,269 16,234,720 Total net position - ending $ 10,173,665 $ (681,363) $ 89,610 $ 6,488,823 $ 16,070,735 92  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Combining Schedule of Cash Flows – Special Utility Authority Accounts - Year Ended June 30, 2017 Miami Special Utility Authority Accounts Utility Improvement Stormwater Rainy Day Public Utilities Account Account Account Total CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 24,186,017 $ - $ 135,086 $ - $ 24,321,103 Payments to suppliers (14,169,128) (50,397) (41,792) - (14,261,317) Payments to employees (3,843,860) - (30,338) - (3,874,198) Receipts from other funds - - 78,993 - 78,993 Payments to other funds (31,023) - - (31,023) Receipts of customer meter deposits 205,490 - - - 205,490 Refunds of customer meter deposits (188,843) - - - (188,843) Net cash provided by (used in) operating activities 6,158,653 (50,397) 141,949 - 6,250,205 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds 6,275,094 - - - 6,275,094 Transfers to other funds (10,457,997) - - - (10,457,997) Interaccount transfer in - 215,200 - 166,610 381,810 Interaccount transfer out (381,810) - (37,200) - (419,010) Net cash provided by (used in) noncapital financing activities (4,564,713) 215,200 (37,200) 166,610 (4,220,103) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital assets purchased (262,956) (81,458) - - (344,414) Transfer of capital assets to governmental activities (29,634) - - - (29,634) Principal paid on debt (824,546) (190,000) - - (1,014,546) Interest and fiscal agent fees paid on debt (144,432) (27,461) - - (171,893) Net cash provided by (used in) capital and related financing activities (1,261,568) (298,919) - - (1,560,487) CASH FLOWS FROM INVESTING ACTIVITIES Sale (Purchase) of investments (56) - - 56 - Interest and dividends 61 13 - 17,944 18,018 Net cash provided by investing activities 5 13 - 18,000 18,018 Net increase (decrease) in cash and cash equivalents 332,377 (134,103) 104,749 184,610 487,633 Balances - beginning of year 1,477,117 447,219 95,846 3,635,663 5,655,845 Balances - end of year $ 1,809,494 $ 313,116 $ 200,595 $ 3,820,273 $ 6,143,478 Reconciliation to Statement of Net Position: Cash and cash equivalents $ 1,058,369 $ 200,277 $ 200,595 $ 3,820,273 $ 5,279,514 Restricted cash and cash equivalents - current 315,603 112,839 - - 428,442 Restricted cash and cash equivalents - noncurrent 435,522 - - - 435,522 Total cash and cash equivalents, end of year $ 1,809,494 $ 313,116 $ 200,595 $ 3,820,273 $ 6,143,478 Reconciliation of operating income to net cash provided by (used in) operating activities: Operating income $ 4,025,319 $ - $ 62,956 $ - $ 4,088,275 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation expense 1,317,067 - - - 1,317,067 Other nonoperating revenue 29,744 - - - 29,744 Change in assets and liabilities: Receivables, net 451,222 - - - 451,222 Other receivable - - - - - Due from other funds (31,023) - - - (31,023) Inventory 83,359 - - - 83,359 Deferred outflows related to pension (279,250) - - - (279,250) Accounts payable 172,473 (50,397) - - 122,076 Due to other funds - - 78,993 - 78,993 Due to employees (1,179) - - - (1,179) Refundable deposits 16,647 - - - 16,647 Net OPEB obligation 82,148 - - - 82,148 Net pension obligation 285,365 - - - 285,365 Accrued compensated absences (2,794) - - - (2,794) Deferred inflows related to pension 9,555 - - - 9,555 Net cash provided by (used in) operating activities $ 6,158,653 $ (50,397) $ 141,949 $ - $ 6,250,205 Noncash activities: Asset acquired by capital lease $ 201,258 $ - $ - $ - $ 201,258 Asset contributed by others 200,007 - - - 200,007 $ 401,265 $ - $ - $ - $ 401,265 93  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Combining Statement of Net Position – Internal Service Funds – June 30, 2017 Internal Service Funds Worker's Health Compensation Unemployment Insurance Fund Fund Fund Total ASSETS Current assets: Cash and cash equivalents $ 1,312,424 $ 148,976 $ 226,593 $ 1,687,993 Investments 618,127 - - 618,127 Other receivable 2,160,501 - 63,195 2,223,696 Total current assets 4,091,052 148,976 289,788 4,529,816 Total assets 4,091,052 148,976 289,788 4,529,816 LIABILITIES Current liabilities: Accounts payable and accrued liabilities - - 504 504 Claims liability 2,362,057 - 86,595 2,448,652 Due to other funds - - - - Total liabilities 2,362,057 - 87,099 2,449,156 NET POSITION Unrestricted 1,728,995 148,976 202,689 2,080,660 Total net position $ 1,728,995 $ 148,976 $ 202,689 $ 2,080,660 94  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Combining Statement of Revenues, Expenses and Changes in Net Position – Internal Service Funds - Year Ended June 30, 2017 Internal Service Funds Worker's Compensation Unemployment Health Insurance Fund Fund Fund Total REVENUES Charges for services $ 326,178 $ 24,039 $ 1,898,784 $ 2,249,001 Miscellaneous 1,511,333 - 730,749 2,242,082 Total operating revenues 1,837,511 24,039 2,629,533 4,491,083 OPERATING EXPENSES Other services and charges 21,610 - 315,055 336,665 Insurance claims and expense 1,627,874 20,617 2,063,081 3,711,572 Total operating expenses 1,649,484 20,617 2,378,136 4,048,237 Operating income 188,027 3,422 251,397 442,846 NON-OPERATING REVENUES Investment income 1,720 - - 1,720 Total non-operating revenue 1,720 - - 1,720 Income before transfers 189,747 3,422 251,397 444,566 Transfers in - - - - Transfers out - - - - Change in net position 189,747 3,422 251,397 444,566 Total net position - beginning 1,539,248 145,554 (48,708) 1,636,094 Total net position - ending $ 1,728,995 $ 148,976 $ 202,689 $ 2,080,660 95  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Combining Statement of Cash Flows – Internal Service Funds - Year Ended June 30, 2017 WORKER'S HEALTH COMPENSATION UNEMPLOYMENT INSURANCE FUND FUND FUND TOTALS CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 900,533 $ 24,039 $ 2,566,338 $ 3,490,910 Payments to suppliers (21,610) - (315,174) (336,784) Payments to other funds - - (7,487) (7,487) Claims and benefits paid (632,157) (20,926) (2,024,127) (2,677,210) Net Cash Provided by Operating Activities 246,766 3,113 219,550 469,429 CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends 1,720 - - 1,720 Sale (Purchase) of investments (1,721) - - (1,721) Net Cash Provided by (used in) Investing Activities (1) - - (1) Net Increase in Cash and Cash Equivalents 246,765 3,113 219,550 469,428 Balances - beginning of the year 1,065,659 145,863 7,043 1,218,565 Balances - end of the year $ 1,312,424 $ 148,976 $ 226,593 $ 1,687,993 Reconciliation to Statement of Net Position: Cash and cash equivalents $ 1,312,424 $ 148,976 $ 226,593 $ 1,687,993 Total cash and cash equivalents $ 1,312,424 $ 148,976 $ 226,593 $ 1,687,993 Reconciliation of operating income to net cash provided by operating activities: Operating income $ 188,027 $ 3,422 $ 251,397 $ 442,846 Change in assets and liabilities: Receivables, net (936,978) - (63,195) (1,000,173) Accounts payable - - (119) (119) Due to other funds - - (7,487) (7,487) Claims liability 995,717 (309) 38,954 1,034,362 Net Cash Provided by Operating Activities $ 246,766 $ 3,113 $ 219,550 $ 469,429 96  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Combining Schedule of Cash Flows – Discretely Presented Component Units - Year Ended June 30, 2017 MCFA MDRA MIPFA Total CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 145,843 $ 295,460 $ 41,058 $ 482,361 Payments to suppliers (54,135) (174,780) (11,078) (239,993) Payments to employees - (130,663) - (130,663) Net Cash Provided by (used in) Operating Activities 91,708 (9,983) 29,980 111,705 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital assets purchased (66,320) - (87,235) (153,555) Principal paid on capital debt (80,777) (6,548) - (87,325) Interest and fiscal charges paid on capital debt (9,745) (5,147) - (14,892) Net Cash Provided by (Used in) Capital and Related Financing Activities (156,842) (11,695) (87,235) (255,772) CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends - - 224 224 Net Cash Provided by Investing Activities - - 224 224 Net Increase (Decrease) in Cash and Cash Equivalents (65,134) (21,678) (57,031) (143,843) Balances - beginning of the year 251,539 30,180 224,172 505,891 Balances - end of the year $ 186,405 $ 8,502 $ 167,141 $ 362,048 Reconciliation to Statement of Net Position: Cash and cash equivalents $ 186,405 $ 8,502 $ 167,141 362,048 Restricted cash and cash equivalents - - - - Total cash and cash equivalents $ 186,405 $ 8,502 $ 167,141 $ 362,048 Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss) (125,750) (161,984) 9,959 ($277,775) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation expense 218,879 2,526 20,771 242,176 Other nonoperating revenue - 144,064 - 144,064 Change in assets and liabilities: Other receivable (300) (1,212) - (1,512) Accounts payables (1,121) 6,032 (750) 4,161 Accrued compensated absences - 591 - 591 Net Cash Provided by (used in) Operating Activities $ 91,708 $ (9,983) $ 29,980 $ 111,705 97  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Schedule of Federal Awards: Federal Grantor/ Pass-through Federal C.F.D.A. Grantor/Program Title Number Grant I.D. Number Award Amount Expenditures Institute of Museum and Library Services Pass through Oklahoma Department of Libraries Grants to States 45.310 F-17-216 $ 453 $ 453 Grants to States 45.310 F-17-072 7,000 7,000 Grants to States 45.310 F-17-020 6,160 6,160 Grants to States 45.310 F-17-48 13,503 13,503 Grants to States 45.310 F-17-230 1,100 1,100 Grants to States 45.310 F-17-102 267 267 Grants to States 45.310 F-17-138 178 178 Grants to States 45.310 F-17-179 90 90 Grants to States 45.310 F-16-219 130 130 Grants to States 45.310 F-17-1390 79 79 Subtotal Grants to States 45.310 28,960 28,960 Pass through Oklahoma Humanities Council Promotion of the Humanities 45.168 Y17.009 1,000 1,000 Total Institute of Museum and Library Services 29,960 29,960 Department of Homeland Security . Pass through Oklahoma Emergency Management Emergency Management Performance Grant 97.042 EMPG 17 26,699 26,699 Emergency Management Performance Grant 97.042 EMPG 16 26,699 26,699 Total Department of Homeland Security 53,398 53,398 Total Federal Awards $ 83,358 $ 83,358 Notes to Schedule of Expenditures of Federal Awards Note A - Significant Accounting Policies - The accompanying schedule of expenditures of federal awards is prepared on the basis of accounting consistent with the definition of federal awards expended in Uniform Guidance. 98  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 Debt Service Coverage Schedule - Year Ended June 30, 2017 DEBT SERVICE COVERAGE: OWRB Series 2001A, 2003A, 2004A, 2011 Sales Tax 2005 & 2006A and 2016 Promissory Notes Revenue Bonds GROSS REVENUE AVAILABLE: Charges for services (water, electric and wastewater) $21,478,036 $21,478,036 Investment income 18,018 18,018 Pledged sales tax - 6,275,094 Total Gross Revenue Available 21,496,054 27,771,148 OPERATING EXPENSES: Total Operating Expenses (excludes depreciation and amortization) 16,916,503 16,916,503 Net Revenue Available for Debt Service $4,579,551 $10,854,645 Maximum Annual Debt Service on all OWRB Obligations Payable From Revenues of the System $786,377 $786,377 Average Annual Debt Service on 2016 Sales Tax Revenue Bonds - 1,023,337 Average Annual Debt Service on 2011 Sales Tax Revenue Bonds - 214,080 $786,377 $2,023,794 Computed Coverage 582% 536% Coverage Requirement 125% 125% 99  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2017 INTERNAL CONTROL AND COMPLIANCE INFORMATION 100  INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and Members of the City Council of the City of Miami, Oklahoma We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business- type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Miami, Oklahoma (the “City”), as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated December 5, 2017. Other auditors audited the financial statements of the Miami Industrial Development Authority (“MIDA”), as described in our report on the City’s financial statements. This report does not include the results of the other auditors’ testing of internal controls over financial reporting or compliance and other matters that are reported on separately by those auditors. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. 309 N. Bryant Ave. • Edmond, OK 73034 • 405.348.0615 101 • Fax 405.348.0931 • www.jmacpas.com Member of AICPA and OSCPA Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. December 5, 2017 102