THE CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORTS AS OF AND FOR THE FISCAL YEAR ENDED JUNE 30, 2018  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 THIS PAGE INTENTIONALLY LEFT BLANK 2  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 TABLE OF CONTENTS Page Independent Auditor’s Report on Financial Statements…………………………………… 5-6 Management’s Discussion and Analysis……………………………………………………… 7-16 The Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Position …………………………………………………………………… 18 Statement of Activities ……………………………………………………………………… 19 Governmental Funds Financial Statements: Balance Sheet ………………………………………………………………………………… 21 Statement of Changes in Fund Balances……………………………………………………… 22 Reconciliation of Governmental Fund and Government-Wide Financial Statements……… 23-24 Proprietary Funds Financial Statements: Statement of Net Position……………………………………………………………………… 26 Statement of Changes in Net Position………………………………………………………… 27 Statement of Cash Flows……………………………………………………………………… 28 Discretely Presented Component Units Combining Financial Statements: Statement of Net Position……………………………………………………………………… 30 Statement of Changes in Net Position………………………………………………………… 31 Footnotes to the Basic Financial Statements ………………………………………………… 32-69 Required Supplementary Information: Budgetary Comparison Information Budgetary Comparison Schedule (Budgetary Basis) – General Fund………………………… 71 Footnotes to Budgetary Comparison Schedule………………………………………………… 72 Pension and OPEB Plan Information Schedules of Pension Information…………………………………………………………… 73-76 Schedule OPEB Information ………………………………………………………………… 77 3  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Supplementary Information: Combining Balance Sheet – General Fund Accounts…………………………………………… 79 Combining Schedule of Revenues, Expenditures and Changes in Fund Balance – General Fund Accounts ………………………………………………………………………………………… 80 Combining Balance Sheet - Non-Major Governmental Funds………………………………… 81-82 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Non-Major Governmental Funds…………………………………………………………………………… 83-84 Combining Schedule of Net Position – Miami Special Utilities Authority - Enterprise Fund Accounts……………………………………………………………………………………………85 Combining Schedule of Revenues, Expenses and Changes in Net Position– Miami Special Utilities Authority – Enterprise Fund Accounts ………………………………………………………… 86 Combining Schedule of Cash Flows – Miami Special Utilities Authority – Enterprise Fund Accounts………………………………………………………………………………………… 87 Combining Statement of Net Position – Internal Service Funds……………………………….… 88 Combining Statement of Revenues, Expenses and Changes in Net Position– Internal Service Funds…………………………………………………………………………………………….. 89 Combining Statement of Cash Flows – Internal Service Funds………………………………… 90 Combining Statement of Cash Flows – Discretely Presented Component Units ……………… 91 Schedule of Expenditures of Federal Awards………………………………………………… 92 Debt Service Coverage Schedule………………………………………………………………… 93 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……………………………………………………………95-96 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, 2018, 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 16 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 5 309 N. Bryant Ave. • Edmond, OK 73034 • 405.348.0615 • 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, 2018, 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 February 7, 2019, 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. February 7, 2019 6  CITY OF MIAMI, OKLAHOMA MANAGEMENT’S DISCUSSION AND ANALYSIS As of and for the Year Ended June 30, 2018 MANAGEMENT DISCUSSION AND ANALYSIS 7  CITY OF MIAMI, OKLAHOMA MANAGEMENT’S DISCUSSION AND ANALYSIS As of and for the Year Ended June 30, 2018 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, 2018. Please read it in conjunction with the City’s financial statements, which follow this section. FINANCIAL HIGHLIGHTS  For the fiscal year ended June 30, 2018, the City’s total net position increased by $1,214,387 or 4.6% from the prior year.  During the year, the City’s expenses for governmental activities were $13.6 million and were funded by program revenues of $1.9 million and further funded with taxes and other general revenues that totaled $13.3 million.  In the City’s business-type activities, such as utilities, program revenues exceeded expenses by $5.3 million.  At June 30, 2018, the General Fund reported an unassigned fund balance of $681,715.  For budgetary reporting purposes, the General Fund reported revenues above estimates of $273,853 or 3.7%, while expenditures were under the final appropriations by $813,227 or 8.3%. 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. The City’s financial reporting entity includes the City of Miami, two blended component units, and four active discretely presented component units. 8  CITY OF MIAMI, OKLAHOMA MANAGEMENT’S DISCUSSION AND ANALYSIS As of and for the Year Ended June 30, 2018 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, and can be obtained by contacting in the MIDA offices. 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) The City’s various government-wide and fund financial statements are presented throughout this annual report and are accompanied by: 9  CITY OF MIAMI, OKLAHOMA MANAGEMENT’S DISCUSSION AND ANALYSIS As of and for the Year Ended June 30, 2018  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. 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. 10  CITY OF MIAMI, OKLAHOMA MANAGEMENT’S DISCUSSION AND ANALYSIS As of and for the Year Ended June 30, 2018 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 $27,452,466 at the close of the most recent fiscal year. TABLE 1 NET POSITION (In Thousands) Governme ntal % Inc. Busine ss-Type % Inc. % Inc. Activitie s (De c.) Activitie s (De c.) Total (De c.) Restated, Restated, Restated, 2018 2017 2018 2017 2018 2017 Current assets $ 12,579 $ 11,832 6% $ 12,532 $ 13,756 -9% $ 25,111 $ 25,588 -2% Capital assets, net 27,332 26,718 2% 18,444 17,715 4% 45,776 44,433 3% Total asse ts 39,911 38,550 4% 30,976 31,471 -2% 70,887 70,021 1% De fe rred outflows 2,386 2,701 -12% 721 823 -12% 3,107 3,524 -12% Current liabilities 4,027 3,723 8% 3,663 2,905 26% 7,690 6,628 16% Non-current liabilities 28,738 30,227 -5% 8,728 9,916 -12% 37,466 40,143 -7% Total liabilitie s 32,765 33,950 -3% 12,391 12,821 -3% 45,156 46,771 -3% De fe rred inflows 931 414 125% 454 123 269% 1,385 537 158% Net position Net investment capital assets 17,737 16,909 5% 12,772 11,499 11% 30,509 28,408 7% Restricted 1,730 1,670 4% 801 776 3% 2,531 2,446 3% Unrestricted (deficit) (10,866) (11,692) 7% 5,278 7,075 -25% (5,588) (4,617) 21% Total ne t position $ 8,601 $ 6,887 25% $ 18,851 $ 19,350 -3% $ 27,452 $ 26,237 5% 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 2018, the net investment in capital assets amounted to $30,509,542. 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 11  CITY OF MIAMI, OKLAHOMA MANAGEMENT’S DISCUSSION AND ANALYSIS As of and for the Year Ended June 30, 2018 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, $2,531,118 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 $5,588,194. Explanations of significant changes displayed in Table 1 are as follows: Governmental Activities: Deferred inflows – Increase of $.5 million (125%) due to changes in pension and OPEB elements. Business-Type Activities: Deferred inflows – Increases due to changes in pension and OPEB elements. Changes in Net Position For the year ended June 30, 2018, 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.) 2018 2017 2018 2017 2018 2017 Revenues Charges for service $ 1,073 $ 686 56% $ 25,545 $ 24,045 6% $ 26,618 $ 24,731 8% Operating grants and contributions 874 813 8% 12 - 100% 886 813 9% Capital grants and contributions - - - 629 136 363% 629 136 363% Taxes 7,405 7,193 3% - - - 7,405 7,193 3% Investment income 17 25 -32% 36 18 100% 53 43 23% M iscellaneous 80 71 13% - 1 -100% 80 72 11% Total revenues 9,449 8,787 8% 26,222 24,200 8% 35,671 32,987 8% Expenses General government 2,170 1,728 26% - - - 2,170 1,728 26% Public safety 5,414 5,115 6% - - - 5,414 5,115 6% Streets 2,916 3,067 -5% - - - 2,916 3,067 -5% Culture and recreation 1,574 11,226 -86% - - - 1,574 11,226 -86% Economic development 705 572 23% - - - 705 572 23% Interest on debt 781 721 8% - - - 781 721 8% Water - - - 1,843 1,834 - 1,843 1,834 - Wastewater - - - 1,484 1,477 - 1,484 1,477 - Sanitation - - - 1,776 1,645 8% 1,776 1,645 8% Electric - - - 15,354 14,803 4% 15,354 14,803 4% Airport - - - 440 377 17% 440 377 17% Total expenses 13,560 22,429 -40% 20,897 20,136 4% 34,457 42,565 -19% Excess (deficiency) before transfers (4,111) (13,642) 70% 5,325 4,064 31% 1,214 (9,578) -113% Transfers 5,824 4,131 41% (5,824) (4,131) 41% - - - Change in net position $ 1,713 $ (9,511) 118% $ (499) $ (67) 645% $ 1,214 $ (9,578) 113% 12  CITY OF MIAMI, OKLAHOMA MANAGEMENT’S DISCUSSION AND ANALYSIS As of and for the Year Ended June 30, 2018 Explanations of significant changes in Table 2 are as follows: Governmental Activities: Charges for services – Increase of $.4 million (56%) due to an increase in revenues in cultural events and fines. Culture and recreation – Decrease of $9.7 million (86%) due to one-time funding to a discretely presented component unit for the payoff of a debt issue in fiscal year 2017. Transfers – Increase of $1.7 million (41%) due to increased operational funding from other funds. Business-Type Activities: Capital grants and contributions – Increase of $.5 million (363%) due to an increase in airport grants. Transfers – Increase of $1.7 million (41%) due to increased operational funding to other funds. 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.) 2018 2017 2018 2017 General government $ 2,170 $ 1,728 26% $ (1,882) $ (1,604) 17% Public safety 5,414 5,115 6% (4,534) (4,265) 6% Streets 2,916 3,067 -5% (2,690) (2,889) -7% Culture, parks and recreation 1,574 11,226 -86% (1,329) (10,952) -88% Economic development 705 572 23% (396) (499) -21% Interest on long-term debt 781 721 -8% (781) (721) 8% Total $ 13,560 $ 22,429 -40% ($11,612) $ (20,930) -45% 13  CITY OF MIAMI, OKLAHOMA MANAGEMENT’S DISCUSSION AND ANALYSIS As of and for the Year Ended June 30, 2018 For the year ended June 30, 2018 total expenses for governmental activities amounted to approximately $13.6 million which was a decrease from the prior year of 40%. 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. 2018 2017 2018 2017 Water $ 1,843 $ 1,834 - $ 677 $ 517 31% Wastewater 1,484 1,477 - 336 280 20% Sanitation 1,776 1,645 8% 824 746 10% Electric 15,354 14,803 4% 3,135 2,568 22% Airport 440 377 17% 317 (65) -588% Total $ 20,897 $ 20,136 4% $ 5,289 $ 4,046 31% The City’s business-type activities include utility services for water, electric, wastewater, sanitation and airport. In reviewing the business-type activities net (expense)/revenue, the following highlights should be noted:  Total business-type activities reported net revenues of $5,289,113 for the year ended June 30, 2018. A FINANCIAL ANALYSIS OF THE CITY’S FUNDS As the City completed its 2018 fiscal year, the governmental funds reported a combined fund balance of $8.0 million or a 7.4% increase of approximately $551,000 mainly due to transfers. The enterprise funds reported combined net position of $18.1 million or a 2.1% decrease from 2017. Fund Balance/Net Position Governmental Funds Proprietary Funds Restricted $ 1,776,595 Net investment in capital assets $ 12,772,088 Committed 2,616,098 Restricted for debt service and other 801,168 Assigned 2,925,100 Unrestricted 4,565,470 Unassigned 678,398 Total Fund Balance $ 7,996,191 Total Net Position $ 18,138,726 General Fund Budgetary Highlights For budgetary reporting purposes, the General Fund reported revenues above estimates of $273,853 or 3.7%, while expenditures were under the final appropriations by $813,227 or 8.3%. 14  CITY OF MIAMI, OKLAHOMA MANAGEMENT’S DISCUSSION AND ANALYSIS As of and for the Year Ended June 30, 2018 CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets At the end of June 30, 2018, the City had $45.8 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 increase of $1.3 million or 3.0% from the prior year. TABLE 5 Capital Assets (In Thousands) (Net of accumulated depreciation) Governmental Business-Type Activities Activities Total 2018 2017 2018 2017 2018 2017 Land $ 5,487 $ 5,487 $ 751 $ 751 6,238 $ 6,238 Buildings 7,064 5,112 9,158 9,431 16,222 14,543 M achinery, furniture and equipment 2,250 2,372 2,695 2,757 4,945 5,129 Infrastructure 12,355 13,234 4,297 3,819 16,652 17,053 Construction in progress 176 513 1,542 958 1,718 1,471 Totals $ 27,332 $ 26,718 $ 18,443 $ 17,716 $ 45,775 $ 44,434 This year’s more significant capital asset additions placed into service included: City Hall Renovations $2,309,399 Vehicles $786,000 Southwest well project $586,032 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 $26.1 million in long-term debt outstanding which represents a $1.2 million decrease, or 4.5%, 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 2018 2017 2018 2017 2018 2017 Accrued absences $ 519 $ 577 $ 144 $ 180 $ 663 $ 757 Revenue Bonds 18,815 19,245 810 1,000 19,625 20,245 Bond Premium (Discount) 226 247 (5) (6) 221 241 Notes Payable - - 4,114 4,716 4,114 4,716 Capital Leases 697 823 753 506 1,450 1,329 Totals $ 20,257 $ 20,892 $ 5,816 $ 6,396 $ 26,073 $ 27,288 15  CITY OF MIAMI, OKLAHOMA MANAGEMENT’S DISCUSSION AND ANALYSIS As of and for the Year Ended June 30, 2018 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 expanding utility services; implementing the approved comprehensive plan; street and additional utility improvements; and installing a splash pad. The FY 2018-2019 budget will remain level with the exception of electric, water, and wastewater utility rate increases. The funds collected from the increase will fund much needed electric, water, and wastewater system improvements to include substation upgrades and line replacement. The City expects to continue to be impacted by a struggling economy but continues building financial capacity by expanding utility services thereby improving budget stabilization for the future. The City will also continue revenue bond projects on various utility improvements such as substation and water/wastewater line replacement. Utility funds will continue to repay the debts. The primary sources of revenue for the City of Miami are sales tax and utility (water/wastewater and electric) revenue. Sales tax requires a vote of the people and cannot be adjusted without the people’s consent. The addition of online sales tax collections has positively impacted our budget capacity to some degree. In addition, the City continues 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 16  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 BASIC FINANCIAL STATEMENTS – GOVERNMENT-WIDE 17  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Statement of Net Position– June 30, 2018 Discretely Presented Primary Government Component Units Governmental Business-type Activities Activities Total ASSETS Cash and equivalents $ 9,599,847 $ 5,470,531 $ 15,070,378 $ 423,675 Investments 649,501 1,590,865 2,240,366 - Interest receivable - 809 809 - Accounts receivable, net 246,003 3,681,140 3,927,143 - Due from other governments 1,046,336 36,815 1,083,151 - Other receivables 1,723,580 39,347 1,762,927 - Internal balances (686,489) 686,489 - - Inventory - 1,025,621 1,025,621 - Capital Assets Land and construction in progress 5,663,117 2,293,042 7,956,159 351,738 Other capital assets, net of depreciation 21,669,234 16,150,985 37,820,219 9,092,419 Total assets 39,911,129 30,975,644 70,886,773 9,867,832 DEFERRED OUTFLOWS: Deferred amounts related to pensions 1,779,240 677,677 2,456,917 - Deferred amounts related to OPEB 59,894 43,371 103,265 - Deferred amount on refunding 547,389 - 547,389 - Total deferred outflows of resources 2,386,523 721,048 3,107,571 - LIABILITIES Accounts payable and accrued liabilities 919,411 2,412,452 3,331,863 20,309 Claims liability 2,377,983 - 2,377,983 - Accrued interest payable 46,645 30,159 76,804 - Long-term liabilities Due within one year 683,113 1,219,916 1,903,029 53,435 Due in more than one year 28,738,009 8,728,232 37,466,241 384,804 Total liabilities 32,765,161 12,390,759 45,155,920 458,548 DEFERRED INFLOWS: Deferred amounts related to pensions 790,060 352,103 1,142,163 - Deferred amounts related to OPEB 141,401 102,394 243,795 - Total deferred inflows of resources 931,461 454,497 1,385,958 - NET POSITION: Net investment in capital assets 17,737,454 12,772,088 30,509,542 9,008,726 Restricted 1,729,950 801,168 2,531,118 - Unrestricted (deficit) (10,866,374) 5,278,180 (5,588,194) 400,558 Total net position $ 8,601,030 $ 18,851,436 $ 27,452,466 $ 9,409,284 See accompanying notes to the basic financial statements. 18  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Statement of Activities –Year Ended June 30, 2018 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 $ 2,169,739 $ 97,876 $ 189,710 $ - $ (1,882,153) $ - $ (1,882,153) $ - Public Safety 5,413,203 357,598 521,329 - (4,534,276) - (4,534,276) - Public Works and Streets 2,916,210 107,241 118,623 - (2,690,346) - (2,690,346) - Culture and Recreation 1,574,013 220,995 24,470 - (1,328,548) - (1,328,548) - Economic Development 705,289 289,054 20,000 - (396,235) - (396,235) - Interest on long-term Debt 781,261 - - - (781,261) - (781,261) - Total governmental activities 13,559,715 1,072,764 874,132 - (11,612,819) - (11,612,819) - Business-type activities Water 1,842,657 2,507,947 12,013 - - 677,303 677,303 - Wastewater 1,484,193 1,820,665 - - - 336,472 336,472 - Sanitation 1,775,794 2,599,786 - - - 823,992 823,992 - Electric 15,354,105 18,488,616 - - - 3,134,511 3,134,511 - Airport 440,587 128,202 - 629,220 - 316,835 316,835 - Total business-type activities 20,897,336 25,545,216 12,013 629,220 - 5,289,113 5,289,113 - Total primary government $ 34,457,051 $ 26,617,980 $ 886,145 $ 629,220 (11,612,819) 5,289,113 (6,323,706) - Component Units Culture and Recreation $ 618,034 $ 367,639 $ 227,630 $ - (22,765) Economic Development 76,269 123,004 - - 46,735 Total component units $ 694,303 $ 490,643 $ 227,630 $ - 23,970 General revenues: Taxes: Sales and use taxes 6,823,387 - 6,823,387 - Property tax 18,590 - 18,590 - Franchise and public service taxes 360,148 - 360,148 - Hotel/motel taxes 202,797 - 202,797 - Investment income 16,835 36,431 53,266 114 Miscellaneous 80,070 (165) 79,905 - Transfers - internal activity 5,824,412 (5,824,412) - - Total general revenues and transfers 13,326,239 (5,788,146) 7,538,093 114 Change in net position 1,713,420 (499,033) 1,214,387 24,084 Net position - beginning, restated 6,887,610 19,350,469 26,238,079 9,385,200 Net position - ending $ 8,601,030 $ 18,851,436 $ 27,452,466 $ 9,409,284 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, 2018 BASIC FINANCIAL STATEMENTS - GOVERNMENTAL FUNDS 20  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Governmental Funds Balance Sheet - June 30, 2018 Street and Other Total Stadium Project Governmental Governmental General Fund Fund Funds Funds ASSETS Cash and cash equivalents $ 743,262 $ 813,870 $ 6,203,347 $ 7,760,479 Investments 23,483 - - 23,483 Receivables: Accounts receivable 187,897 - 58,106 246,003 Due from other funds 87,808 - 113,650 201,458 Due from other governments and entities 828,366 147,911 70,059 1,046,336 Total assets $ 1,870,816 $ 961,781 $ 6,445,162 $ 9,277,759 LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Liabilities: Accounts payable and accrued liabilities $ 178,176 $ 23,460 $ 439,416 $ 641,052 Wages payable 265,982 - 12,307 278,289 Due to other funds 136,833 - 38,404 175,237 Total liabilities 580,991 23,460 490,127 1,094,578 DEFERRED INFLOWS OF RESOURCES Deferred revenue 126,959 - 60,031 186,990 Fund balances: Restricted 11,752 938,321 826,522 1,776,595 Commited - - 2,616,098 2,616,098 Assigned 469,399 - 2,455,701 2,925,100 Unassigned (deficit) 681,715 - (3,317) 678,398 Total fund balances 1,162,866 938,321 5,895,004 7,996,191 Total liabilities, deferred inflows and fund balances $ 1,870,816 $ 961,781 $ 6,445,162 $ 9,277,759 See accompanying notes to the basic financial statements. 21  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Governmental Funds Statement of Changes in Fund Balances – Year Ended June 30, 2018 Street and Other Total Stadium Governmental Governmental General Fund Project Fund Funds Funds REVENUES Taxes $ 5,673,743 $ 1,139,816 $ 441,473 $ 7,255,032 Intergovernmental 884,912 - 138,536 1,023,448 Charges for services 318,529 - 189,017 507,546 Fines and forfeitures 259,776 - - 259,776 Licenses and permits 64,488 - - 64,488 Investment income 14,657 1,849 329 16,835 Miscellaneous 378,620 - 17,071 395,691 Total revenues 7,594,725 1,141,665 786,426 9,522,816 EXPENDITURES Current: General government 1,655,914 - - 1,655,914 Public Safety 5,200,944 - 21,956 5,222,900 Public works and streets 1,342,404 21,211 520,171 1,883,786 Culture and recreation 1,198,139 - 183,252 1,381,391 Economic development 656,060 - - 656,060 Capital Outlay 102,111 - 3,165,162 3,267,273 Debt Service: Principal 176,945 430,000 51,983 658,928 Interest and other charges 30,946 569,536 2,810 603,292 Total expenditures 10,363,463 1,020,747 3,945,334 15,329,544 Excess (deficiency) of revenues over expenditures (2,768,738) 120,918 (3,158,908) (5,806,728) OTHER FINANCING SOURCES (USES) Debt proceeds 102,111 - - 102,111 Transfers in 7,897,053 1,138,890 3,609,178 12,645,121 Transfers out (5,230,461) (1,133,205) (25,003) (6,388,669) Total other financing sources and uses 2,768,703 5,685 3,584,175 6,358,563 Net change in fund balances (35) 126,603 425,267 551,835 Fund balances - beginning 1,162,901 811,718 5,469,737 7,444,356 Fund balances - ending $ 1,162,866 $ 938,321 $ 5,895,004 $ 7,996,191 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, 2018 Reconciliation of Governmental Funds and Government-Wide Financial Statements: Total fund balance, governmental funds $ 7,996,191 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. 27,332,351 Certain long-term assets are not available to pay for current fund liabilities and, therefore, are deferred in the funds. 186,990 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 1,779,240 Pension related deferred OPEB 59,894 Deferred amounts on refunding 547,389 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 (696,519) Interest payable (46,645) Net pension liability (7,258,615) Pension related deferred inflows (790,060) Total OPEB liability (1,905,825) OPEB related deferred inflows (141,401) Accrued compensated absences (518,746) Unamortized debt premium (226,417) Revenue bond payable (18,815,000) 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 1,098,203 Net Position of Governmental Activities in the Statement of Net Position $ 8,601,030 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, 2018 Changes in Fund Balances – Changes in Net Position Reconciliation: Net change in fund balances - total governmental funds: $ 551,835 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 2,452,501 Depreciation expense (1,783,641) Disposed capital assets (54,481) 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. 225,866 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 45,776 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 (102,111) Capital lease principal payments 228,926 Revenue bond principal payments 430,000 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 716 Change in accrued compensated absences 58,294 Change in total OPEB liability (106,947) Change in amortization of bond discount/premium (68,490) 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 (164,824) Change in net position of governmental activities $ 1,713,420 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, 2018 BASIC FINANCIAL STATEMENTS - PROPRIETARY FUNDS 25  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Proprietary Funds Statement of Net Position - June 30, 2018 Enterprise Funds Miami Special Utility Internal Authority Airport Fund Total Service Funds ASSETS Current assets: Cash and cash equivalents $ 4,588,450 $ 35 $ 4,588,485 $ 1,839,368 Cash and cash equivalents, restricted 446,524 - 446,524 - Investments 1,401,049 - 1,401,049 626,018 Accounts receivable, net 3,646,107 35,033 3,681,140 - Other receivable 8,065 68,097 76,162 1,723,580 Accrued interest receivable 809 - 809 - Inventory 997,886 27,735 1,025,621 - Due from other funds 257,631 30,128 287,759 - Total current assets 11,346,521 161,028 11,507,549 4,188,966 Non-current assets: Cash and cash equivalents, restricted 435,522 - 435,522 - Investments, restricted 189,816 - 189,816 - Capital assets: Land, construction in progress, and water rights 1,177,865 1,115,177 2,293,042 - Other capital assets, net of accumulated depreciation 12,918,298 3,232,687 16,150,985 - Total non-current assets 14,721,501 4,347,864 19,069,365 - Total assets 26,068,022 4,508,892 30,576,914 4,188,966 DEFERRED OUTFLOW OF RESOURCES Deferred amounts related to pensions 663,451 14,226 677,677 - Deferred amounts related to OPEB 43,371 - 43,371 - Total deferred outflow of resources 706,822 14,226 721,048 - LIABILITIES Current liabilities: Accounts payable and accrued liabilities 1,983,236 296,746 2,279,982 70 Claims liability - - - 2,377,983 Wages payable 131,651 819 132,470 - Due to other funds 86,495 227,485 313,980 - Accrued interest payable 30,159 - 30,159 - Accrued compensated absences 14,664 - 14,664 - Refundable deposits 39,729 - 39,729 - Capital lease payable 340,268 - 340,268 - Revenue bond payable 195,000 - 195,000 - Notes payable 630,255 - 630,255 - Total current liabilities 3,451,457 525,050 3,976,507 2,378,053 Non-current liabilities: Accrued compensated absences 129,176 - 129,176 - Net pension liability 2,354,986 - 2,354,986 - Total OPEB liability 1,380,091 - 1,380,091 - Refundable deposits 357,563 - 357,563 - Capital lease payable 413,095 - 413,095 - Revenue bond payable 609,956 - 609,956 - Notes payable, net 3,483,365 - 3,483,365 - Total non-current liabilities 8,728,232 - 8,728,232 - Total liabilities 12,179,689 525,050 12,704,739 2,378,053 DEFERRED INFLOW OF RESOURCES Deferred amounts related to pensions 318,677 33,426 352,103 - Deferred amounts related to OPEB 102,394 - 102,394 - Total deferred inflow of resources 421,071 33,426 454,497 - NET POSITION Net investment in capital assets 8,424,224 4,347,864 12,772,088 - Restricted for debt service 801,168 - 801,168 - Unrestricted (deficit) 4,948,692 (383,222) 4,565,470 1,810,913 Total net position $ 14,174,084 $ 3,964,642 18,138,726 $ 1,810,913 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 $ 712,710 reported as interfund balances Total net position per Government-Wide financial statements $ 18,851,436 See accompanying notes to the basic financial statements. 26  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Proprietary Funds Statement of Changes in Net Position - Year Ended June 30, 2018 Enterprise Funds Miami Special Utility Internal Service Authority Airport Fund Total Fund REVENUES Charges for services $ 24,628,761 $ 128,202 $ 24,756,963 $ 1,974,894 Fees, licenses and permits 134,997 - 134,997 - Miscellaneous 620,581 - 620,581 351,372 Total operating revenues 25,384,339 128,202 25,512,541 2,326,266 OPERATING EXPENSES Personal services 3,837,538 34,257 3,871,795 - Materials and supplies 11,738,278 67,469 11,805,747 - Other services and charges 3,367,287 117,894 3,485,181 525,240 Insurance claims and expense - - - 2,078,664 Depreciation expense 1,279,813 220,967 1,500,780 - Total operating expenses 20,222,916 440,587 20,663,503 2,603,904 Operating income (loss) 5,161,423 (312,385) 4,849,038 (277,638) NON-OPERATING REVENUES (EXPENSES) Investment income 36,431 - 36,431 7,891 Miscellaneous 58,717 - 58,717 - Interest expense and fiscal charges (143,104) - (143,104) - Total non-operating revenue (expenses) (47,956) - (47,956) 7,891 Income (loss) before contrbutions and transfers 5,113,467 (312,385) 4,801,082 (269,747) Contributed capital revenue 414,855 646,405 1,061,260 - Transfers in 6,374,669 85,147 6,459,816 - Transfers out (12,716,268) - (12,716,268) - Change in net position (813,277) 419,167 (394,110) (269,747) Total net position - beginning 14,987,361 3,545,475 18,532,836 2,080,660 Total net position - ending $ 14,174,084 $ 3,964,642 $ 18,138,726 $ 1,810,913 Change in net position above (394,110) 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 (104,923) Change in Business-Type Activities in Net Position per Government-Wide Financial Statements $ (499,033) 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, 2018 Proprietary Funds Statement of Cash Flows - Year Ended June 30, 2018 Enterprise Funds Miami Special Utility Internal Service Authority Airport Fund Total Fund CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 24,798,751 $ 98,848 $ 24,897,599 $ 2,826,382 Payments to suppliers (14,938,436) 93,888 (14,844,548) (525,674) Payments to employees (3,856,020) (36,413) (3,892,433) - Receipts from other funds 12,538 166,642 179,180 - Payments to other funds (176,583) - (176,583) - Receipts of customer meter deposits 169,175 - 169,175 - Refunds of customer meter deposits (188,110) - (188,110) - Claims and judgments paid - - - (2,149,333) Net cash provided by operating activities 5,821,315 322,965 6,144,280 151,375 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds 6,374,669 85,147 6,459,816 - Transfers to other funds (12,716,268) - (12,716,268) - Interaccount transfers in 587,090 - 587,090 - Interaccount transfers out (587,090) - (587,090) - Net cash provided by (used in) noncapital financing activities (6,341,599) 85,147 (6,256,452) - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital assets purchased (301,492) (1,000,517) (1,302,009) - Principal paid on debt (1,004,095) - (1,004,095) - Proceeds of capital grants - 592,405 592,405 - Interest and fiscal agent fees paid on debt (148,751) - (148,751) - Net cash provided by (used in) capital and related financing activities (1,454,338) (408,112) (1,862,450) - CASH FLOWS FROM INVESTING ACTIVITIES Sale (Purchase) of investments 1,265,209 - 1,265,209 (7,891) Interest and dividends 36,431 - 36,431 7,891 Net cash provided by investing activities 1,301,640 - 1,301,640 - Net increase (decrease) in cash and cash equivalents (672,982) - (672,982) 151,375 Balances - beginning of year 6,143,478 35 6,143,513 1,687,993 Balances - end of year $ 5,470,496 $ 35 $ 5,470,531 $ 1,839,368 Reconciliation to Statement of Net Position: Cash and cash equivalents $ 4,588,450 $ 35 $ 4,588,485 $ 1,839,368 Restricted cash and cash equivalents - current 446,524 - 446,524 - Restricted cash and cash equivalents - noncurrent 435,522 - 435,522 - Total cash and cash equivalents, end of year $ 5,470,496 $ 35 $ 5,470,531 $ 1,839,368 Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss) $ 5,161,423 $ (312,385) $ 4,849,038 $ (277,638) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation expense 1,279,813 220,967 1,500,780 - Other nonoperating revenue 58,717 - 58,717 - Change in assets and liabilities: Receivables, net (636,676) 5,346 (631,330) 500,116 Other receivable (7,629) (34,700) (42,329) - Due from other funds (176,583) - (176,583) - Inventory (153,456) 5,654 (147,802) - Deferred outflows related to pension 102,497 9,364 111,861 - Deferred outflows related to OPEB (10,561) - (10,561) Accounts payable 320,585 273,597 594,182 (434) Claims liability - - - (70,669) Due to other funds 12,538 166,642 179,180 - Due to employees 4,174 129 4,303 - Refundable deposits (18,935) - (18,935) - Total OPEB liability (14,377) - (14,377) - Net pension liability (386,154) (21,397) (407,551) - Accrued compensated absences (36,258) - (36,258) - Deferred inflows related to pension 219,803 9,748 229,551 Deferred inflows related to OPEB 102,394 - 102,394 Net cash provided by operating activities $ 5,821,315 $ 322,965 $ 6,144,280 $ 151,375 Noncash activities: Asset acquired by capital lease $ 458,831 $ - $ 458,831 $ - Asset contributed by others 414,855 17,185 432,040 - $ 873,686 $ 17,185 $ 890,871 $ - 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, 2018 BASIC FINANCIAL STATEMENTS – DISCRETELY PRESENTED COMPONENT UNITS 29  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Discretely Presented Component Units Combining Statement of Net Position - June 30, 2018 MCFA MDRA MIDA MIPFA Total ASSETS Current assets: Cash and cash equivalents $ 125,976 $ 17,835 $ 177,809 $ 102,055 $ 423,675 Total current assets 125,976 17,835 177,809 102,055 423,675 Non-current assets: Capital assets: Land, construction in progress, and water rights - - 103,517 248,221 351,738 Other capital assets, net of accumulated depreciation 7,977,111 10,100 767,087 338,121 9,092,419 Total non-current assets 7,977,111 10,100 870,604 586,342 9,444,157 Total assets 8,103,087 27,935 1,048,413 688,397 9,867,832 LIABILITIES Current liabilities: Accounts payable and accrued liabilities - 18,809 - 1,500 20,309 Accrued compensated absences - 2,808 - - 2,808 Notes payable - - 50,627 - 50,627 Total current liabilities - 21,617 50,627 1,500 73,744 Non-current liabilities: Notes payable, net - - 384,804 - 384,804 Total non-current liabilities - - 384,804 - 384,804 Total liabilities - 21,617 435,431 1,500 458,548 NET POSITION Net investment in capital assets 7,977,111 10,100 435,173 586,342 9,008,726 Unrestricted (deficit) 125,976 (3,782) 177,809 100,555 400,558 Total net position $ 8,103,087 $ 6,318 $ 612,982 $ 686,897 $ 9,409,284 See accompanying notes to the basic financial statements. 30  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Discretely Presented Component Units Combining Statement of Changes in Net Position - Year Ended June 30, 2018 MCFA MDRA MIDA MIPFA Total REVENUES Charges for services $ 172,418 $ 192,940 $ 77,755 $ 44,819 $ 487,932 Miscellaneous - 2,281 430 - 2,711 Total operating revenues 172,418 195,221 78,185 44,819 490,643 OPERATING EXPENSES Personal services 99 118,069 - - 118,168 Materials and supplies 8,044 24,804 3,050 - 35,898 Other services and charges 61,879 170,421 6,500 5,475 244,275 Depreciation expense 226,616 2,526 20,727 24,043 273,912 Total operating expenses 296,638 315,820 30,277 29,518 672,253 Operating income (loss) (124,220) (120,599) 47,908 15,301 (181,610) NON-OPERATING REVENUES (EXPENSES) Investment income - - 1 113 114 Miscellaneous income 1,490 226,140 - - 227,630 Interest expense and fiscal charges (978) (4,598) (16,474) - (22,050) Total non-operating revenue (expenses) 512 221,542 (16,473) 113 205,694 Change in net position (123,708) 100,943 31,435 15,414 24,084 Total net position - beginning 8,226,795 (94,625) 581,547 671,483 9,385,200 Total net position - ending $ 8,103,087 $ 6,318 $ 612,982 $ 686,897 $ 9,409,284 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, 2018 FOOTNOTES TO BASIC FINANCIAL STATEMENTS 32  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 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. 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. Complete financial statements can be obtained from the office of the City Clerk. MIDA’s fiscal year end is July 31. 33  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 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. 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 34  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 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, MCVB & Tourism 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, and Police Grant. 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 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. 35  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 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. 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, 2018 by these entities are as follows: 36  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Maturities in Years Fair Credit On Less T ype Value Rating Demand T han One Demand deposits $ 13,930,514 N/A $ 13,930,514 $ - Cash on hand 3,345 N/A 3,345 - T ime deposits 2,240,366 N/A - 2,240,366 Money Market Funds 1,136,519 Not rated - 1,136,519 Sub-T otal $ 17,310,744 $ 13,933,859 $ 3,376,885 Re conciliation to Financial State me nts: Cash and cash equivalents $ 15,070,378 Investments 2,240,366 $ 17,310,744 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, 2018: • Money Market Mutual Funds of $1,136,519 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 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, 2018, the City was not exposed to custodial credit risk. Component Unit: The bank deposit of the MDRA component unit of $17,835 at June 30, 2018 was fully insured by the F.D.I.C. The bank deposits of the MCFA component unit of $125,976 at June 30, 2018 was fully insured by the F.D.I.C. The bank deposits of the MIPFA component unit of $102,055 at June 30, 2018 was fully insured by the F.D.I.C. 37  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 The bank deposits of the MIDA component unit of $177,809 at June 30, 2018 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, 2018, the investments held by the City mature between 2018 through 2019. 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). No concentration of credit risk existed as of June 30, 2018. 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, 2018 are as follows: 38  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Cash and cash equivalents: Cash Restircted for Refundable deposits $ 49,518 Money Markets Restricted for Debt Service 397,006 $ 446,524 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 $ 189,816 $ 189,816 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. Less: Allowance Net Accounts for Uncollectible Accounts Receivable Accounts Receivable Governmental Activities: T axes $ 1,062,959 $ - $ 1,062,959 Due from other governments 68,483 - 68,483 Court fines 433,780 (287,511) 146,269 Other 1,738,208 - 1,738,208 T otal Governmental Activities $ 3,303,430 $ (287,511) $ 3,015,919 Reconciliation to Statement of Net Position: Accounts receivable, net $ 246,003 Due from other governmental agencies 1,046,336 Other receivable 1,723,580 T otal $ 3,015,919 Business-T ype Activities: Utilities $ 5,484,665 $ (1,803,525) $ 3,681,140 39  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 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, 2018, capital assets balances changed as follows: Balance at Transfers/ Balance at July 1, 2017 Additions Deductions June 30, 2018 PRIMARY GOVERNMENT: Governmental activities: Capital assets not being depreciated: Land $ 5,487,269 $ - $ - $ 5,487,269 Construction in progress 512,678 2,309,824 2,646,654 175,848 Total capital assets not being depreciated 5,999,947 2,309,824 2,646,654 5,663,117 Other capital assets: Buildings 20,765,679 2,344,310 - 23,109,989 Infrastructure 45,283,268 24,691 - 45,307,959 M achinery, furniture and equipment 11,446,637 420,330 130,658 11,736,309 Total other capital assets at historical cost 77,495,584 2,789,331 130,658 80,154,257 Less accumulated depreciation for: Buildings 15,653,985 392,019 - 16,046,004 Infrastructure 32,048,995 903,652 - 32,952,647 M achinery, furniture and equipment 9,074,579 487,970 76,177 9,486,372 Total accumulated depreciation 56,777,559 1,783,641 76,177 58,485,023 Other capital assets, net 20,718,025 1,005,690 54,481 21,669,234 Governmental activities capital assets, net $ 26,717,972 $ 3,315,514 $ 2,701,135 $ 27,332,351 40  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Balance at Transfers/ Balance at July 1, 2017 Additions Deductions June 30, 2018 Business-type activities: Capital assets not being depreciated: Land $ 750,530 $ - $ - $ 750,530 Construction in progress 958,156 1,382,917 798,561 1,542,512 Total capital assets not being depreciated 1,708,686 1,382,917 798,561 2,293,042 Other capital assets: Buildings and utility infrastructure 20,429,426 211,904 - 20,641,330 M achinery, furniture and equipment 13,989,575 569,822 41,280 14,600,677 Infrastructure 16,872,256 860,468 - 17,732,724 Total other capital assets at historical cost 51,291,257 1,642,194 41,280 52,974,731 Less accumulated depreciation for: Buildings and utility infrastructure 10,998,435 484,515 - 11,482,950 M achinery, furniture and equipment 11,232,955 634,326 38,132 11,905,413 Infrastructure 13,053,444 381,939 - 13,435,383 Total accumulated depreciation 35,284,834 1,500,780 38,132 36,823,746 Other capital assets, net 16,006,423 141,414 3,148 16,150,985 Business-type activities capital assets, net $ 17,715,109 $ 1,524,331 $ (795,413) $ 18,444,027 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: Governmental Activities: General Government $ 124,306 Public Safety 195,868 Streets 980,580 Culture and Recreation 423,944 Economic Development 58,943 Total $ 1,783,641 Business-Type Activities: Airport $ 220,967 Electric 366,835 Water 281,764 Wastewater 424,904 Sanitation 206,310 Total $ 1,500,780 41  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Capital assets of the component units were: M IDA Balance at Balance at August 1, 2017 Additions Deductions July 31, 2018 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 248,539 20,727 - 269,266 Other capital assets, net 787,814 (20,727) - 767,087 M IDA capital assets, net $ 891,331 $ (20,727) $ - $ 870,604 M DRA Balance at Balance at July 1, 2017 Additions Deductions June 30, 2018 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 3,250 650 - 3,900 M achinery, furniture and equipment 9,380 1,876 11,256 Total accumulated depreciation 12,630 2,526 - 15,156 Other capital assets, net 12,626 (2,526) - 10,100 M DRA capital assets, net $ 12,626 $ (2,526) $ - $ 10,100 M IPFA Balance at Balance at July 1, 2017 Additions Deductions June 30, 2018 MIPFA - Discreetly Presented Component unit Capital assets not being depreciated: Land $ 144,429 $ 103,792 $ - $ 248,221 Total capital assets not being depreciated 144,429 103,792 - 248,221 Other capital assets: Buildings 574,724 - - 574,724 M achinery, furniture and equipment 162,235 - - 162,235 Total other capital assets at historical cost 736,959 - - 736,959 Less accumulated depreciation for: Buildings 298,706 19,681 - 318,387 M achinery, furniture and equipment 76,089 4,362 - 80,451 Total accumulated depreciation 374,795 24,043 - 398,838 Other capital assets, net 362,164 (24,043) - 338,121 M IPFA capital assets, net $ 506,593 $ 79,749 $ - $ 586,342 42  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 M CFA Balance at Balance at July 1, 2017 Additions Deductions June 30, 2018 MCFA - Discreetly Presented Component unit Construction in progress $ - $ - $ - $ - Total capital assets not being depreciated - - - - Other capital assets: Buildings 8,600,399 - - 8,600,399 Less accumulated depreciation for: Buildings 396,672 226,616 - 623,288 Other capital assets, net 8,203,727 (226,616) - 7,977,111 M CFA capital assets, net $ 8,203,727 $ (226,616) $ - $ 7,977,111 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. Re ceivable 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 68,589 Expense reimbursement MSUA Airport Fund 455 Expense reimbursement MSUA * General Fund * 31,459 Expense reimbursement Airport Fund General Fund * 30,128 Posting correction MSUA * Airport Fund 225,717 T o cover negative balance in pooled cash T otal $ 489,217 * Denotes major fund. Due From Due T o Net Internal Reconciliation to Fund Financial Statements: Other Funds Other Funds Balances Governmental Funds $ 201,458 $ (175,237) $ 26,221 Proprietary Funds 287,759 (313,980) (26,221) T otal $ 489,217 $ (489,217) $ - Reconciliation to Statement of Net Position: Net Internal Balances $ (26,221) Internal Service Fund Activity reported in Business-type Activities 712,710 Net Internal Balance $ 686,489 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, 2018 were as follows: 43  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Transfe r In Transfe r O ut Amount Nature of Inte rfund Transfe r * General Fund * MSUA $ 7,883,053 Operating subsidy/pledged sales tax * General Fund Street and Alley 14,000 B Operating subsidy * General Fund * Street Project 1,133,205 Pledged sales tax * Street Project * MSUA 1,138,890 Pledged sales tax Street and alley * MSUA 500,000 A Operating subsidy Grant Fund * MSUA 65,481 A Operating subsidy Capital Improvement Fund * MSUA 11,649 A Debt Service payments Capital Improvement Fund * MSUA 2,232,048 A Operating subsidy Capital Improvement Fund * MSUA 800,000 A Capital project * MSUA Coleman Project 11,003 B T o close fund Airport * MSUA 85,147 Capital project * MSUA * General Fund 5,230,461 Operating subsidy/pledged sales tax $ 19,104,937 * Denotes Major Fund Subtotal non-major Govermental Funds transfers in $ 3,609,178 A Subtotal non-major Govermental Funds transfers out $ 25,003 B T ransfers to T ransfers from Net Re conciliation to fund financial state me nts: Other Funds Other Funds T ransfers Governmental Funds $ (6,388,669) $ 12,645,121 $ 6,256,452 Enterprise Funds (12,716,268) 6,459,816 (6,256,452) T otals $ (19,104,937) $ 19,104,937 $ - Re conciliation to State me nt of Activitie s: Net T ransfers (6,256,452) T ransfer of assets from Governmental Activities to Business T ype Activities 432,040 T ransfers - Internal Activity $ (5,824,412) 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, 2018, the City’s long-term debt balances changed as follows: Primary Government: Balance Balance Due Within Type of Debt July 1, 2017 Additions Deductions June 30, 2018 One Year Governmental Activities: Revenue Bond Premium $ 246,693 $ - $ 20,276 $ 226,417 $ - Revenue Bonds 19,245,000 - 430,000 18,815,000 440,000 Capital Lease Obligations 823,334 102,111 228,926 696,519 191,238 Accrued Compensated Absences 577,040 - 58,294 518,746 51,875 Total Governmental Activities $ 20,892,067 $ 102,111 $ 737,496 $ 20,256,682 $ 683,113 Plus: Total OPEB liability 1,905,825 - Net pension liability 7,258,615 - $ 29,421,122 $ 683,113 Reconcilation to Statement of Net Position: Due within one year $ 683,113 Due in more than one year 28,738,009 $ 29,421,122 44  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Balance Balance Due Within Type of Debt July 1, 2017 Additions Deductions June 30, 2018 One Year Business-Type Activities: Notes Payable $ 4,716,438 $ - $ 602,818 $ 4,113,620 $ 630,255 Unamortized Bond Discount (6,521) - (1,476) (5,045) - Revenue Bonds 1,000,000 - 190,000 810,000 195,000 Capital Lease Obligations 505,807 458,831 211,274 753,364 340,268 Accrued Compensated Absences 180,098 - 36,258 143,840 14,664 Total Business-Type Activities $ 6,395,822 $ 458,831 $ 1,038,874 $ 5,815,779 $ 1,180,187 Plus: Total OPEB liability 1,380,091 - Net pension obligation 2,354,986 - Refundable deposits 397,292 39,729 $ 9,948,148 $ 1,219,916 Reconcilation to Statement of Net Position: Due within one year $ 1,219,916 Due in more than one year 8,728,232 $ 9,948,148 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. $18,815,000 Current portion $440,000 Non-current portion 18,375,000 $18,815,000 Capital Lease Obligations: $86,689 capital lease obligation for the purchase of a boom mower, matures August 2018 with a stated interest rate of 3.77%. $2,225 $90,154 capital lease obligation for the purchase of a crowler/dozer, matures September 2021 with a stated interest rate of 3.81%. 32,272 $993,730 capital lease obligation for the purchase of fire trucks, matures July 2020 with a stated interest rate of 5.00% 424,033 $102,111 capital lease obligation for the purchase of police cars, matures September 2020 with a stated interest rate of 2.66%. 77,339 $149,481 capital lease obligation for the purchase of fire rescue truck, matures March 21,2022 with a stated interest rate of 3.01%. 113,958 $113,194 capital lease obligation for the purchase of two Torro mowers, matures July 2020 with a stated interest rate of 2.15% 46,692 Total capital lease obligations $696,519 Current portion $191,238 Non-current portion 505,281 $696,519 45  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 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% $28,264 $209,365 capital lease obligation for the purchase of a bucket truck, matures October 2019 with a stated interest rate of 2.300% 50,569 $503,720 capital lease obligation for the purchase of a trash truck, matures July 2019 with a stated interest rate of 1.97% 113,880 $82,210 capital lease obligation for the purchase of a work truck, matures July 2019 with a stated interest rate of 2.13% 18,625 $69,950 capital lease obligation for the purchase of a mini excavator, matures July 2021 with a stated interest rate of 1.95%. 43,938 $95,994 capital lease obligation for the purchase of a truck for water, matures August 2022 with a stated interest rate of 2.99%. 80,975 $362,837 capital lease obligation for the purchase of a refuse truck, matures June 2021 with a stated interest rate of 3.62%. 362,837 $86,408 capital lease obligation for the purchase of a tractor, matures July 2021 with a stated interest rate of 1.95%. 54,276 Total Capital Leases $753,364 Current portion $340,268 Non-current portion 413,096 $753,364 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. $810,000 Current portion $195,000 Non-current portion 615,000 $810,000 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. $484,000 46  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 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. 1,165,160 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. 478,661 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. 1,069,840 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. 680,273 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. 235,686 Total Notes Payable – Oklahoma Water Resources Board $4,113,620 Current portion $630,255 Non-current portion 3,483,365 $4,113,620 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 2019 $ 440,000 $ 555,338 $ 191,238 $ 25,674 2020 450,000 546,438 197,001 17,617 2021 455,000 537,388 280,465 2,549 2022 465,000 528,188 27,815 563 2023 475,000 518,788 - - 2024-2028 2,525,000 2,445,544 - - 2029-2033 1,085,000 2,213,863 - - 2034-2038 4,435,000 1,922,150 - - 2039-2043 3,925,000 1,124,625 - - 2044-2047 4,560,000 498,750 - - Total $ 18,815,000 $ 10,891,072 $ 696,519 $ 46,403 Business-Type Activities Notes Payable Revenue Bonds Payable Capital Leases Payable Year Ending June 30, Principal Interest Principal Interest Principal Interest 2019 $ 630,255 $ 96,893 $ 195,000 $ 18,473 $ 340,268 $ 17,764 2020 641,594 82,226 200,000 14,025 199,027 10,116 2021 658,024 66,114 205,000 8,858 186,792 3,976 2022 669,477 48,626 210,000 3,045 23,840 393 2023 691,702 29,264 - - 3,437 13 2024-2026 822,568 9,989 - - - - Total $ 4,113,620 $ 333,112 $ 810,000 $ 44,401 $ 753,364 $ 32,262 47  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 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. At June 30, 2018, $7,490,000 of the 2010 bonds remain outstanding to be paid with the escrow account. MDRA Debt: Balance Balance Due Within Type of Debt July 1, 2017 Additions Deductions June 30, 2018 One Year Component Unit: MDRA notes payable $ 96,452 $ - $ 96,452 $ - $ - Accrued Compensated Absences 2,808 - - 2,808 2,808 Total MDRA $ 99,260 $ - $ 96,452 $ 2,808 $ 2,808 MCFA: Balance Balance Due Within Type of Debt July 1, 2018 Additions Deductions June 30, 2018 One Year Component Unit: Note payable $ 163,542 $ 163,542 $ - $ - $ 163,542 $ - $ 163,542 $ - $ - 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 $234,628 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 155,988 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 44,815 Total debt outstanding – MIDA $435,431 Balance Balance Due Within Type of Debt August 1, 2017 Additions Deductions July 31, 2018 One Year Component Unit: MIDA Note payable $ 493,189 $ - $ 57,758 $ 435,431 $ 50,627 48  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Component Unit - MIDA Notes Payable Year Ending June 30, Principal Interest 2018 $ 50,627 $ 13,439 2020 384,804 7,794 Total $ 435,431 $ 21,233 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 $4,446,732. Net utility revenues received in the current year were $5,347,858. Debt service payments of $723,159 for the current fiscal year were 13.5% 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 $30,560,473. Pledged sales taxes received in the current year were $5,230,461. Net revenues and sales tax pledged during the year was $10,578,319. Debt service payments of $1,212,768 for the current fiscal year were 11.5% 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. 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, 2018 net position restricted by enabling legislation totaled $202,674. 49  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 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: Major Capital Project Fund Other General Street and Stadium Governmental Fund Project Fund Fund Total Fund Balance: Restricted For: Police operations - grants $ - $ - $ 18,934 $ 18,934 General obligation debt service - 305,157 126,302 431,459 Capital improvements - - 318,710 318,710 Street improvements - 633,164 - 633,164 Culture and rec programs 11,752 - 264,466 276,218 Economic development - - 97,179 97,179 Police - drug programs - - 931 931 Sub-total restricted 11,752 938,321 826,522 1,776,595 Committed for: Street operations - - 2,616,098 2,616,098 Assigned for: Capital improvements - - 2,455,701 2,455,701 Demolition 119,865 - - 119,865 Culture and rec programs 13,772 - - 13,772 Supplement next year's budget 335,762 - - 335,762 Sub-total assigned 469,399 - 2,455,701 2,925,100 Unassigned (deficit): 681,715 - (3,317) 678,398 TOTAL FUND BALANCE $ 1,162,866 $ 938,321 $ 5,895,004 $ 7,996,191 50  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Beginning net positions was restated due to the implementatin of GASB 75, OPEB. Restatements were as follows: Governmental Activities: Business-type Activities: Government-wide Fund Level Government-wide Statement of Activities: Beginning net position as previously reported $8,259,944 $16,070,735 $20,433,843 Implementation of GASB OPEB Statement 75, recognition of beginning toal OPEB liability and deferred outflows (1,372,334) (1,083,374) (1,083,374) Beginning net position, restated $6,887,610 $14,987,361 $19,350,469 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. 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, 2018, the City did not assess a property tax. Ad valorem collections related to delinquent taxes collected in the current year. 51  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 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. Worker's Health Unemployment Compensation Care Fund Total 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 Claims and changes in estimates 431,497 1,641,563 5,604 2,078,664 Claims payments (707,835) (1,435,894) (5,604) (2,149,333) Claim liability, June 30, 2018 $ 2,085,719 $ 292,264 $ - $ 2,377,983 13. Retirement Plan Participation The following is a summary of the deferred outflows, deferred inflows and net pension liability by plan as of June 30, 2018: 52  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Governmental Business Type Total Deferred Outflows: Police Pension $ 402,909 $ - $ 402,909 Fire Pension 928,811 - 928,811 OkMRF 447,520 677,677 1,125,197 Total $ 1,779,240 $ 677,677 $ 2,456,917 Deferred Inflows: Police Pension $ 228,250 $ - $ 228,250 Fire Pension 184,459 - 184,459 OkMRF 377,351 352,103 729,454 Total $ 790,060 $ 352,103 $ 1,142,163 Net Pension Liability: Police Pension $ 29,715 $ - $ 29,715 Fire Pension 5,243,677 - 5,243,677 OkMRF 1,985,223 2,354,986 4,340,209 Total $ 7,258,615 $ 2,354,986 $ 9,613,601 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. 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 07/01/17 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 53  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 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 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 122 Deferred Vested Former Employees 10 Retirees or Retiree Beneficiaries 81 Total 213 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 12.33% of covered payroll as of July 1, 2017. For the year ended June 30, 2018, the City recognized $635,553 of employer contributions to the plan which is in excess of the actuarially determined amount by $44,586 based on covered payroll of $4,792,921. Employees contribute 3.75% to the plan in accordance with the plan provisions adopted by the City Council. Employee contributions for fiscal 2018 were $179,737. 54  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 F. Actuarial Assumptions Date of Last Actuarial Valuation July 1, 2017 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: 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. 55  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 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, 2017 are summarized in the following table: Target Real Weighted Allocation Return Return Large cap stocks 25% 5.80% 1.45% S&P 500 Small/mid cap stocks 10% 6.40% 0.64% Russell 2500 Long/short equity 10% 5.00% 0.50% MSCI ACWI International stocks 20% 6.20% 1.24% MSCI EAFE Fixed income bonds 30% 2.30% 0.69% Barclay's Capital Aggregate Real estate 5% 4.60% 0.23% 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, 2017 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, 2017 and the City’s report ending date of June 30, 2018, that would have had a significant impact on the net pension liability. The following table reports the components of changes in net pension liability: 56  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Increase (Decrease) Total Pension Plan Net Net Pension Liability Position Liability (a) (b) (a) - (b) Balances Beginning of Year $ 14,571,195 $ 9,470,500 $ 5,100,695 Changes for the Year: Service cost 330,866 - 330,866 Interest expense 1,087,717 - 1,087,717 Experience losses (gains) - (535,480) - (535,480) (amortized over avg remain svc period of actives & inactive) Changes of assumptions 321,010 - 321,010 Contributions--City - 650,799 (650,799) Contributions--members - 183,989 (183,989) Net investment income - 1,149,965 (1,149,965) Benefits paid (1,092,673) (1,092,673) - Plan administrative expenses - (20,154) 20,154 Net Changes 111,440 871,926 (760,486) Balances End of Year $ 14,682,635 $ 10,342,426 $ 4,340,209 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 $ 6,158,585 $ 4,340,209 $ 2,858,110 The City reported $567,699 in pension expense for the year ended June 30, 2018. At June 30, 2018, 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 $ 45,320 $ 546,332 Changes of assumptions - - Net difference between projected and actual earnings 28,884 - Changes in assumptions 251,827 - Changes in proportion and differences between City contributions and proportionate share of contributions 151,713 151,622 City contributions during measurement date 11,900 31,500 City contributions subsequent to the measurement date 635,553 - Total $ 1,125,197 $ 729,454 The $635,553 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, 2019. Any other amounts reported as deferred 57  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended June 30: 2019 $ (114,269) 2020 47,182 2021 (42,092) 2022 (130,631) 2023 - $ (239,810) 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 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. 58  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 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 $169,204. The State of Oklahoma also made on- behalf contributions to FPRS in the amount of $379,501 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 $367,445. 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, 2018, the City reported a liability of $5,243,677 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2017, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2017. 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, 2017. Based upon this information, the City’s proportion was .4169%. For the year ended June 30, 2018, the City recognized pension expense of $585,756. At June 30, 2018, 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 $ 700,464 $ - Net difference between projected and actual earnings on pension plan investments - 146,123 Changes in proportion and differences between City contributions and proportionate share of contributions 59,143 35,063 City contributions during the measurement date - 3,273 City contributions subsequent to the measurement date 169,204 - Total $ 928,811 $ 184,459 The $169,204 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, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: 59  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Year ended June 30: 2019 $ 47,057 2020 209,305 2021 158,102 2022 13,842 2023 119,619 Thereafter 27,223 Total $ 575,148 Actuarial Assumptions-The total pension liability was determined by an actuarial valuation as of July 1, 2017, 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, 2017, 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, 2017, are summarized in the following table: Target Long-Term Expected Asset Class Allocation Real Rate of Return Fixed income 20% 4.38% Domestic equity 47% 7.72% International equity 15% 9.70% Real estate 10% 6.96% Other assets 8% 5.75% 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. 60  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 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 $ 6,878,942 $ 5,243,677 $ 3,857,835 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, 61  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 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 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 $162,102. The State of Oklahoma also made on- behalf contributions to OPPRS in the amount of $159,542 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 $132,440. 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, 2018, the City reported a liability of $29,715 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2017, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2017. 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, 2017. Based upon this information, the City’s proportion was .3863%. For the year ended June 30, 2018, the City recognized pension expense of $171,896. At June 30, 2018, 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 $ 1,492 $ 179,651 Net difference between projected and actual earnings on pension plan investments 221,328 - Changes in proportion and differences between City contributions and proportionate share of contributions 16,446 34,413 City contributions during measurement date 1,541 14,186 City contributions subsequent to the measurement date 162,102 - Total $ 402,909 $ 228,250 62  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 The $162,102 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, 2019. 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: 2019 $ (16,699) 2020 99,649 2021 42,925 2022 (91,091) 2023 (22,227) Total $ 12,557 Actuarial Assumptions-The total pension liability was determined by an actuarial valuation as of July 1, 2017, 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, 2017, 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, 2017, are summarized in the following table: 63  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Long-Term Expected Asset Class Real Rate of Return Fixed income 4.51% Domestic equity 6.62% International equity 9.70% Real estate 6.96% Private Equity 9.86% Commodities 5.18% 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) $ 1,004,300 $ 29,715 $ (793,468) 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. 64  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Funding Policy – DC Plan participants may contribute up to $15,000 of eligible compensation per year. During the year ended June 30, 2018, employees contributed $117,334 and the employer contributed $0 to the DC Plan. 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, 2018, 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. A substantive plan is one in which the plan terms are understood by the employer and the plan members. This understanding is based on communication between the employer and the plan member and historical pattern of practice with regard to the sharing of benefit costs. 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. Benefits provided - The Plan covers all current retirees of the City who elected postretirement medical coverage through the City Health Plan and future retired employees of the City fully self-insured health plan. In accordance with administrative policy, the benefit levels are the same as those afforded to active employees; this creates an implicit rate subsidy. The benefits offered by the City to retirees include health and prescription drug benefits. The retiree retains coverage with the City, by making an election within 30 days of termination of service and have 10+ years of creditable service in with the City and are at least 55 years old at the time of termination. The amount of benefit payments during fiscal year June 30, 2018 were $78,120. Employees Covered by Benefit Terms Active Employees 180 Inactive or beneficiaries receiving benefits 11 Total 191 Total OPEB Liability – The total OPEB liability was determined based on an alternative measurement method valuation performed as of June 30, 2017 which is also the measurement date. Actuarial Assumptions- The total OPEB liability in the June 30, 2017 valuation, was determined using the following actuarial assumptions:  Actuarial Cost Method - Entry Age 65  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018  Discount Rate – 3.87% based on the 20 year municipal bond yield  Retirement Age – Civilians - 55 with 10 years of service, Police and Fire 20 years of service  Medical Trend Rates: 2018 6.05% 2019 6.02% 2020 5.99% 2025 5.86% 2030 5.99% 2035 5.87% 2040 5.33% 2045 5.15% 2050 5.03% 2060 4.87% Changes in Total OPEB Liability - Total OPEB Liability Balance s at Be ginning of Ye ar $ 3,320,163 Change s for the Ye ar: Service cost 233,167 Interest expense 91,272 Change in assumptions (280,566) Difference between expected and actual experience - Benefits paid (78,120) Ne t Change s (34,247) Balance s End of Ye ar $ 3,285,916 OPEB Liabilities, OPEB Expense, and Deferred Outflows or Resources and Deferred Inflows of Resources Related to OPEB - For the year ended June 30, 2018, the City recognized OPEB expense of $166,841. At June 30, 2018, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual experience $ - $ - Changes of assumptions - 243,795 Net difference between projected and actual earnings on OPEB plan investments - - City Contributions subsequent to the measurement date 103,265 - Total $ 103,265 $ 243,795 Amounts reported as deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: 66  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Ye ar Ended June 30: 2019 $ (36,771) 2020 (36,771) 2021 (36,771) 2022 (36,771) 2023 (36,771) Thereafter (59,940) $ (243,795) Sensitivity of the City’s total OPEB liability to changes in the discount rate- The following presents the City’s total OPEB liability, as well as what the City’s proportionate share of the total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2.58 percent) or 1- percentage- point higher (4.58 percent) than the current discount rate: Current Discount Rate 1% Decrease ( 2.58%) (3.58%) 1% Increae ( 4.58%) Employers' total OPEB liability $ 3,998,651 $ 3,285,916 $ 2,729,310 Sensitivity of the City’s total OPEB liability to changes in the healthcare cost trend rates - The following presents the City’s total OPEB liability, as well as what the City’s total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower (5.90 percent decreasing to 3.87 percent) or 1- percentage point higher (7.09 percent decreasing to 5.87 percent) than the current healthcare cost trend rates: Current Discount Rate 1% Decrease (5.90% (6.90% decreasing to 1% Increae (7.09% decreasing to 3.87%) 4.87%) decreasing to 5.87%) Employers' total OPEB liability $ 2,746,707 $ 3,285,916 $ 3,957,823 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 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. 67  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Grant Programs The City of Miami participates in various federal or state grant/loan programs from year to year. In 2018, 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. Pensacola Dam Licensing The City has experienced flooding at various degrees for many years which the City asserts has been aggravated by operational changes at a nearby lake. The City contends that the instances of flooding have increased because the quasi-governmental agency that operates the Pensacola Dam that forms Grand Lake (and it’s hydroelectric operations), the Grand River Dam Authority (GRDA), has been granted permission to raise lake levels by the Federal Energy Regulatory Commission (FERC), which licenses GRDA to operate the dam. FERC has notified the City that the appropriate time to address these problems is at the time the operational license for the dam is renewed in 2022. That process started in 2018 and could potentially take over five years to complete. The City has engaged legal counsel to represent its interest during the relicensing process and to require GRDA to modify its lake operations to reduce instances of flooding and to purchase flood easements. During fiscal 2018, the City incurred approximately $496,000 of costs related to this matter in the form of legal, technical, and other supporting activities, and an additional $630,000 of costs for the period July 1, 2018 through January 2019. The ultimate disposition of this matter is not known, but management does not expect these costs to materially impact the City’s operations or financial condition. No provisions or reserves have been established in the accompanying financial statements regarding this matter. 16. Future Accounting Pronouncements 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. 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 68  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 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 84 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 June 30, 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. GASB Statement 88, Certain Disclosures Related to Debt - GASB No. 88 was issued April 2018, the primary objective of this Statement is to improve the information that is disclosed in the notes to government financial statements related to debt, including direct borrowings and direct placements. It also clarifies which liabilities governments should include when disclosing information related to debt. It defines debt for purposes of disclosure in the notes to financial statements as a liability that arises from a contractual obligation to pay cash (or other assets that may be used in lieu of cash) in one or more payments to settle an amount that is fixed at the date of the contractual obligation is established. This Statement requires that additional essential information related to debt be disclosed in notes to financial statements, including unused lines of credit; assets pledged as collateral for the debt; and terms specified in debt agreements related to significant events of default with finance-related consequences, significant termination events with finance-related consequences, and significant subjective acceleration clauses. This Statement also requires that existing and additional information be provided for direct borrowings and direct placements of debt separately from other debt. The City has not yet determined the impact that implementation of GASB 88 will have on its net position. GASB Statement 90, Majority Equity Interests (An amendment of GASB Statement 14 and 61) –issued August 2018, will be effective for the City beginning with its fiscal year ending June 30, 2020. The primary objectives of this Statement are to improve the consistency and comparability of reporting a government’s majority equity interest in a legally separate organization and to improve the relevance of financial statement information for certain component units. It defines a majority equity interest and specifies that a majority equity interest in a legally separate organization should be reported as an investment if a government’s holding of the equity interest meets the definition of an investment. A majority equity interest that meets the definition of an investment should be measured using the equity method, unless it is held by a special-purpose government engaged only in fiduciary activities, a fiduciary fund, or an endowment (including permanent and term endowments) or permanent fund. Those governments and funds should measure the majority equity interest at fair value. The City has not yet determined the impact that implementation of GASB 90 will have on its net position. 69  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 REQUIRED SUPPLEMENTARY INFORMATION 70  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Budgetary Comparison Schedules (Budgetary Basis) – Year Ended June 30, 2018 GENERAL FUND Actual Variance with Budgeted Amounts Amounts Final Budget Original Final (Budget basis) Positive (Negative) Beginning Budgetary Fund Balance: $ 1,411,026 $ 1,441,026 $ 962,168 $ (478,858) Resources (Inflows): Taxes and assessments 6,562,000 6,563,200 6,697,121 133,921 Fees, licenses and permits 44,350 44,350 50,007 5,657 Charges for services 190,000 192,000 218,008 26,008 Fines and forfeitures 212,900 212,900 215,329 2,429 Interest earned 12,000 12,000 14,329 2,329 M iscellaneous - 164,959 172,389 7,430 Intergovernmental 76,699 92,891 188,970 96,079 Total Resources (Inflows) 7,097,949 7,282,300 7,556,153 273,853 Amounts available for appropriation 8,508,975 8,723,326 8,518,321 (205,005) Charges to Appropriations (Outflows): General Government M uncipal Court 176,024 181,989 169,102 12,887 General Government 1,332,751 1,287,943 1,018,621 269,322 Human Resources 408,879 322,327 273,092 49,235 Legal 119,879 119,879 104,936 14,943 Public Safety Police 2,565,543 2,185,954 2,130,709 55,245 Fire 2,022,020 2,089,113 2,052,350 36,763 Emergency M anagement 44,746 122,287 112,497 9,790 Police Communications - 376,836 355,436 21,400 Code Enforecement 114,148 114,148 106,734 7,414 Risk M anagement - 88,083 79,621 8,462 Public Works and Streets Streets 728,202 727,374 652,287 75,087 Cemetery 298,020 305,257 297,752 7,505 Facilities 309,645 311,645 270,502 41,143 Animal Control 123,010 126,354 120,520 5,834 Culture and Recreation Parks 644,870 685,833 548,106 137,727 Swimming Pool 191,621 191,621 154,794 36,827 Library 518,382 556,915 533,272 23,643 Total Charges to Appropriations 9,597,740 9,793,558 8,980,331 813,227 Other financing sources (uses) Transfers from other funds 7,740,263 7,754,263 7,842,053 87,790 Transfers to other funds (6,354,650) 6,363,482 (6,485,980) (12,849,462) Total other financing sources (uses) 1,385,613 14,117,745 1,356,073 (12,761,672) Ending Budgetary Fund Balance $ 296,848 $ 13,047,513 $ 894,063 $ (12,153,450) See accompanying notes to this schedule. 71  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 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, 2017 Fund Balance June 30, 2018 Budget to GAAP Reconciliation: Fund Balance - GAAP Basis $1,162,901 ($35) $1,162,866 Increases (Decreases): Revenues: Receivable from other governments and entities (698,479) (105,217) (803,696) Accounts receivable (116,549) (69,098) (185,647) State on behalf pension payments (545,939) 6,896 (539,043) Combining accounts (99,186) 56,566 (42,620) Expenditures: Accrued payroll 256,866 38,244 295,110 Other expenditures 456,615 11,435 468,050 State on behalf pension payments 545,939 (6,896) 539,043 Fund Balance - Budgetary Basis $962,168 ($68,105) $894,063 72  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 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* 2015 2016 2017 2018 City's proportion of the net pension liability 0.413176% 0.418954% 0.4143524% 0.4169184% City's proportionate share of the net pension liability $ 4,887,039 $ 4,446,809 $ 5,062,191 $ 5,243,677 City's covered-employee payroll $ 1,089,326 $ 1,144,680 $ 1,159,023 $ 1,185,003 City's proprotionate share of the net pension liability as a percentage of its covered-employee payroll 449% 388% 437% 443% Plan fiduciary net position as a percentage of the total pension liability 68.12% 68.27% 64.87% 66.61% *The amounts present for each fiscal year were determined as of 6/30 Notes to Schedule: Only the previous four fiscal years are presented because 10-year data is not yet available. SCHEDULE OF CITY CONTRIBUTIONS OKLAHOMA FIREFIGHTERS PENSION & RETIREMENT SYSTEM Last 10 Fiscal Ye ars 2015 2016 2017 2018 Statutorially required contribution $ 160,255 $ 162,264 $ 165,905 $ 169,204 Contributions in relation to the statutorially required contribution 160,255 162,264 165,905 169,204 Contribution deficiency (excess) $ - $ - $ - $ - City's covered-employee payroll $ 1,144,680 $ 1,159,023 $ 1,185,033 $ 1,208,603 Contributions as a percentage of covered-employee payroll 14.00% 14.00% 14.00% 14.00% Note s to Sche dule : Only the previous four fiscal years are presented because 10-year data is not yet available. 73  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 SCHEDULE OF THE CITY OF MIAMI PORTIONATE SHARE OF THE NET PENSION LIABILITY (ASSET) OKLAHOMA POLICE PENSION & RETIREMENT SYSTEM Last 10 Fiscal Ye ars* 2015 2016 2017 2018 City's proportion of the net pension liability (asset) 0.4416% 0.3977% 0.4577% 0.3683% City's proportionate share of the net pension liability (asset) $ (148,685) $ 16,217 $ 700,954 $ 29,715 City's covered-employee payroll $ 1,184,882 $ 1,131,472 $ 1,201,369 $ 1,169,953 City's proprotionate share of the net pension liability (asset) as a percentage of its covered-employee payroll 12.55% 1.43% 58.35% 2.54% Plan fiduciary net position as a percentage of the total pension liability (asset) 101.53% 99.82% 93.50% 99.68% *The amounts present for each fiscal year were determined as of 6/30 Note s to Sche dule : Only the previous four fiscal years are presented because 10-year data is not yet available. SCHEDULE OF CITY CONTRIBUTIONS OKLAHOMA POLICE PENSION & RETIREMENT SYSTEM Last 10 Fiscal Ye ars 2015 2016 2017 2018 Statutorially required contribution $ 145,903 $ 156,178 $ 152,094 $ 162,102 Contributions in relation to the statutorially required contribution 145,903 156,178 152,094 162,102 Contribution deficiency (excess) $ - $ - $ - $ - City's covered-employee payroll $ 1,131,472 $ 1,201,369 $ 1,169,953 $ 1,246,941 Contributions as a percentage of covered-employee payroll 12.89% 13.00% 13.00% 13.00% Note s to Sche dule : Only the previous four fiscal years are presented because 10-year data is not yet available. 74  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Required Supplementary Information Oklahoma Municipal Retirement Fund Schedule of Changes in Net Pension Liability and Related Ratios Last Fiscal Year 2015 2016 2017 2018 Total pension liability Service cost $ 276,403 $ 308,701 $ 344,545 $ 330,866 Interest 1,034,763 1,037,326 1,073,154 1,087,717 Changes of benefit terms - - - - Differences between expected and actual experience - 102,207 (202,315) (535,480) Changes of assumptions - - - 321,010 Benefit payments, including refunds of member contributions (997,138) (1,006,438) (964,663) (1,092,673) Net change in total pension liability 314,028 441,796 250,721 111,440 Total pension liability - beginning 13,564,650 13,878,678 14,320,474 14,571,195 Total pension liability - ending (a) $ 13,878,678 $ 14,320,474 $ 14,571,195 $ 14,682,635 Plan fiduciary net position Contributions - employer $ 569,542 $ 618,748 $ 640,172 $ 650,799 Contributions - member 166,578 175,420 181,046 183,989 Net investment income 1,363,071 261,920 83,267 1,149,965 Benefit payments, including refunds of member contributions (997,138) (1,006,438) (964,663) (1,092,673) Administrative expense (20,151) (19,533) (18,698) (20,154) Other - - - - Net change in plan fiduciary net position 1,081,902 30,117 (78,876) 871,926 Plan fiduciary net position - beginning 8,437,357 9,519,259 9,549,376 9,470,500 Plan fiduciary net position - ending (b) $ 9,519,259 $ 9,549,376 $ 9,470,500 $ 10,342,426 Net pension liability - ending (a) - (b) $ 4,359,419 $ 4,771,098 $ 5,100,695 $ 4,340,209 Plan fiduciary net position as a percentage of the total pension liability 68.59% 66.68% 64.99% 70.44% Covered employee payroll $ 4,356,987 $ 4,742,831 $ 4,657,554 $ 4,735,571 Net pension liability as a percentage of covered- 100.06% 100.60% 109.51% 91.65% employee payroll *The amounts present for each fiscal year were determined as of 6/30 Notes to Schedule: Only the previous four 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, 2018 Required Supplementary Information Oklahoma Municipal Retirement Fund Schedule of Employer Contributions Last Fiscal Year 2015 2016 2017 2018 Actuarially determined contribution $ 616,160 $ 643,059 $ 592,589 $ 590,967 Contributions in relation to the actuarially 616,160 643,059 623,633 635,553 determined contribution Contribution deficiency (excess) $ - $ - $ (31,044) $ (44,586) Covered employee payroll $ 4,661,027 $ 4,849,681 $ 4,703,091 $ 4,792,921 Contributions as a percentage of covered-employee payroll 13.22% 13.26% 13.26% 13.26% Notes to Schedule: 1. Only the previous four fiscal years are presented because 10-year data is not yet available. 2. Latest Valuation Date: July 1, 2017 3. Actuarially determined contribution rate is calculated as of July 1, 2017 July 2017 through June 2018 contributions were at a rate of 12.33%. 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% 76  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Required Supplementary Information – OPEB Schedule of Changes in Total OPEB Liability and Related Ratios Postemployment Health Insurance Implcit Rate Subsidy Plan 2018 Total OPEB Liability Service cost $ 233,167 Interest 91,272 Changes in assumptions (280,566) Benefit payments (78,120) Net change in total OPEB liability (34,247) Balances at Beginning of Year 3,320,163 Balances End of Year $ 3,285,916 Covered employee payroll $ 7,400,000 Total OPEB liability as a percentage of covered- employee payroll 44.40% Notes to Schedule: Only the current fiscal year is 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, 2018 OTHER SUPPLEMENTARY INFORMATION 78  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Combining Balance Sheet – General Fund Accounts - June 30, 2018 Municipal Court Travel Information MCVB &Tourism General Fund Account Center Account Account Demolition Account Total General Fund ASSETS Cash and cash equivalents $ 591,058 $ 31,359 $ - $ 7,548 $ 113,297 $ 743,262 Investments 23,483 - - - - 23,483 Receivables: Accounts receivable 185,647 - - 2,250 - 187,897 Due from other funds 87,808 - - - - 87,808 Due from other accounts 17,984 - - - - 17,984 Receivable from other governments 803,696 - - 18,102 6,568 828,366 Total assets $ 1,709,676 $ 31,359 $ - $ 27,900 $ 119,865 $ 1,888,800 LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Liabilities: Accounts payable and accrued liabilities $ 135,117 $ 13,180 $ 11,799 $ 18,080 $ - $ 178,176 Wages payable 259,110 - - 6,872 - 265,982 Due to other funds 68,244 - 68,589 - - 136,833 Due to other accounts - 17,984 - - - 17,984 Total liabilities 462,471 31,164 80,388 24,952 - 598,975 DEFERRED INFLOWS OF RESOURCES Deferred revenue 126,959 - - - - 126,959 Fund balances: Restricted 11,752 - - - - 11,752 Assigned 349,534 - - - 119,865 469,399 Unassigned (deficit) 758,960 195 (80,388) 2,948 - 681,715 Total fund balances 1,120,246 195 (80,388) 2,948 119,865 1,162,866 Total liabilities, deferred inflows and fund balances $ 1,709,676 $ 31,359 $ - $ 27,900 $ 119,865 $ 1,888,800 79  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Combining Schedule of Revenues, Expenditures, and Changes in Fund Balance – General Fund Accounts – Year Ended June 30, 2018 Travel MCVB & Municipal Information Tourism Demolition Total General General Fund Court Account Center Account Account Account Fund REVENUES Taxes $ 5,470,946 $ - $ - $ 202,797 $ - $ 5,673,743 Intergovernmental 884,912 - - - - 884,912 Charges for services 231,313 - - 87,216 - 318,529 Fines and forfeitures 226,526 - - - 33,250 259,776 Licenses and permits 64,488 - - - - 64,488 Investment income 14,657 - - - - 14,657 Miscellaneous 209,048 - 169,572 - - 378,620 Total revenues 7,101,890 - 169,572 290,013 33,250 7,594,725 EXPENDITURES Current: General government 1,562,580 - - - 93,334 1,655,914 Public safety 5,200,944 - - - - 5,200,944 Public works and streets 1,342,404 - - - - 1,342,404 Culture and recreation 1,198,139 - - - - 1,198,139 Economic development - - 224,002 432,058 - 656,060 Capital Outlay 102,111 - - - - 102,111 Debt Service: Principal 176,945 - - - - 176,945 Interest and fiscal charges 30,946 - - - - 30,946 Total expenditures 9,614,069 - 224,002 432,058 93,334 10,363,463 Excess (deficiency) of revenues over expenditures (2,512,179) - (54,430) (142,045) (60,084) (2,768,738) OTHER FINANCING SOURCES (USES) Proceeds from long-term debt 102,111 - - - - 102,111 Proceeds from capital leases - - - - - - Transfers in - interaccount - - - 144,993 - 144,993 Transfers in 7,842,053 - 5,000 - 50,000 7,897,053 Transfers out (5,230,461) - - - - (5,230,461) Transfers out - component unit (144,993) - - - - (144,993) Total other financing sources and uses 2,568,710 - 5,000 144,993 50,000 2,768,703 Net change in fund balances 56,531 - (49,430) 2,948 (10,084) (35) Fund balances - beginning 1,063,715 195 (30,958) - 129,949 1,162,901 Fund balances - ending $ 1,120,246 $ 195 $ (80,388) $ 2,948 $ 119,865 $ 1,162,866 80  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Combining Balance Sheet - Non-Major Governmental Funds - June 30, 2018 SPECIAL REVENUE FUNDS FISHING STREET AND DRUG FORFEITURE SUMMER RECREATION RFC 07-09 MDA-HOUSING COLEMAN POLICE LICENSE FUND ALLEY FUND PROGRAM GRANT FUND GRANT FUND CONSTRUCTION FUND PROJECT GRANTS ASSETS Cash and cash equivalents $ 61,792 $ 2,626,466 $ 931 $ 225,039 $ 21,749 $ 5,463 $ 91,716 $ - $ 19,158 Accounts receivable - - - - - - - - - Due from other governments - 10,028 - - 4,621 - - - - Due from other funds - 106,993 - - - - - - - Total assets $ 61,792 $ 2,743,487 $ 931 $ 225,039 $ 26,370 $ 5,463 $ 91,716 $ - $ 19,158 LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Liabilities: Accounts payable and accrued liabilities $ - $ 127,389 $ - $ 10,058 $ 25,066 $ - $ - $ - $ 224 Wages payable - - - 12,307 - - - - - Due to other funds - - - - - - - - - Total liabilities - 127,389 - 22,365 25,066 - - - 224 Deferred Inflows: Deferred revenue - - - - 4,621 - - - - Fund balances: Restricted 61,792 - 931 202,674 - 5,463 91,716 - 18,934 Commited - 2,616,098 - - - - - - - Assigned - - - - - - - - - Unassigned (deficit) - - - - (3,317) - - - - Total fund balances 61,792 2,616,098 931 202,674 (3,317) 5,463 91,716 - 18,934 Total liabilities, deferred inflows and fund balances $ 61,792 $ 2,743,487 $ 931 $ 225,039 $ 26,370 $ 5,463 $ 91,716 $ - $ 19,158 (continued) 81  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Combining Balance Sheet - Non-Major Governmental Funds - June 30, 2018, Continued DEBT SERVICE FUND CAPITAL PROJECT FUNDS CEMETERY PARK G.O. BOND PERPETUAL MAIN STREET CAPITAL POOL DEPARTMENT SINKING FUND CARE PROJECT IMPROVEMENT FUND IMPROVEMENT FUND PROJECTS TOTALS ASSETS Cash and cash equivalents $ 126,302 $ 125,898 $ 67,776 $ 2,706,021 $ 82,995 $ 42,041 $ 6,203,347 Accounts receivable - - - 58,106 - - 58,106 Due from other governments 55,410 - - - - - 70,059 Due from other funds - - - 6,657 - - 113,650 Total assets $ 181,712 $ 125,898 $ 67,776 $ 2,770,784 $ 82,995 $ 42,041 $ 6,445,162 LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Liabilities: Accounts payable and accrued liabilities $ - $ - $ - $ 276,679 $ - $ - $ 439,416 Wages payable - - - - - - 12,307 Due to other funds - - - 38,404 - - 38,404 Total liabilities - - - 315,083 - - 490,127 Deferred Inflows: Deferred revenue 55,410 - - - - - 60,031 Fund balances: Restricted 126,302 125,898 67,776 - 82,995 42,041 826,522 Commited - - - - - - 2,616,098 Assigned - - - 2,455,701 - - 2,455,701 Unassigned (deficit) - - - - - - (3,317) Total fund balances 126,302 125,898 67,776 2,455,701 82,995 42,041 5,895,004 Total liabilities, deferred inflows and fund balances $ 181,712 $ 125,898 $ 67,776 $ 2,770,784 $ 82,995 $ 42,041 $ 6,445,162 82  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance – Nonmajor Governmental Funds – Year Ended June 30, 2018 SPECIAL REVENUE FUNDS SUMMER MDA-HOUSING FISHING STREET AND DRUG FORFEITURE RECREATION RFC 07-09 CONSTRUCTION COLEMAN POLICE LICENSE FUND ALLEY FUND PROGRAM GRANT FUND GRANT FUND FUND PROJECT GRANTS REVENUES Taxes $ - $ - $ - $ - $ - $ - $ - $ - $ - Intergovernmental 5,000 118,623 - - 9,750 - - - 5,163 Charges for services - - - 177,504 - - - - - Investment income - - - - - - - - - Miscellaneous - 11,949 65 1,062 - - - - 3,995 Total revenues 5,000 130,572 65 178,566 9,750 - - - 9,158 EXPENDITURES Current: General government - - - - - - - - - Public safety - - 1,347 - 2,000 - - - 18,609 Public works - 466,081 - - 54,090 - - - - Culture and recreation - - - 144,782 38,470 - - - - Capital Outlay - 377,212 - - - - - - - Debt Service Principal retirement - 40,436 - - - - - - - Interest and fiscal charges - 1,807 - - - - - - - Total Expenditures - 885,536 1,347 144,782 94,560 - - - 18,609 Revenues over (under) expenditures 5,000 (754,964) (1,282) 33,784 (84,810) - - - (9,451) OTHER FINANCING SOURCES (USES) Transfers in - 500,000 - - 65,481 - - - - Transfers out - (14,000) - - - - - (11,003) - Total other financing sources (uses) - 486,000 - - 65,481 - - (11,003) - Net change in fund balances 5,000 (268,964) (1,282) 33,784 (19,329) - - (11,003) (9,451) Fund balances - beginning 56,792 2,885,062 2,213 168,890 16,012 5,463 91,716 11,003 28,385 Fund balances - ending $ 61,792 $ 2,616,098 $ 931 $ 202,674 $ (3,317) $ 5,463 $ 91,716 $ - $ 18,934 (continued) 83  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance – Nonmajor Governmental Funds – Year Ended June 30, 2018, Continued DEBT SERVICE FUND CAPITAL PROJECT FUNDS CEMETERY CAPITAL POOL PARK G.O. BOND PERPETUAL MAIN STREET IMPROVEMENT IMPROVEMENT DEPARTMENT SINKING FUND CARE PROJECT FUND FUND PROJECTS TOTALS REVENUES Taxes $ 18,590 $ - $ - $ 422,883 $ - $ - $ 441,473 Intergovernmental - - - - - - 138,536 Charges for services - 11,513 - - - - 189,017 Investment earnings - - - 329 - - 329 Miscellaneous - - - - - - 17,071 Total revenues 18,590 11,513 - 423,212 - - 786,426 EXPENDITURES Current: General government - - - - - - - Public safety - - - - - - 21,956 Public works - - - - - - 520,171 Culture and recreation - - - - - - 183,252 Capital Outlay - 35,075 - 2,732,175 20,700 - 3,165,162 Debt Service Principal retirement - - - 11,547 - - 51,983 Interest and fiscal charges 901 - - 102 - - 2,810 Total Expenditures 901 35,075 - 2,743,824 20,700 - 3,945,334 Excess (deficiency) of revenues over expenditures 17,689 (23,562) - (2,320,612) (20,700) - (3,158,908) OTHER FINANCING SOURCES (USES) Transfers in - - - 3,043,697 - - 3,609,178 Transfers out - - - - - - (25,003) Total other financing sources and uses - - - 3,043,697 - - 3,584,175 Net change in fund balances 17,689 (23,562) - 723,085 (20,700) - 425,267 Fund balances - beginning 108,613 149,460 67,776 1,732,616 103,695 42,041 5,469,737 Fund balances - ending $ 126,302 $ 125,898 $ 67,776 $ 2,455,701 $ 82,995 $ 42,041 $ 5,895,004 84  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Combining Schedule of Net Position – Special Utility Authority Accounts – June 30, 2018 Miami Special Utility Authority Accounts Utility Improvement Stormwater Rainy Day Public Utilities Account Account Account Total ASSETS Current assets: Cash and cash equivalents $ 1,160,476 $ (16,043) $ 265,765 $ 3,178,252 $ 4,588,450 Cash and cash equivalents, restricted 330,574 115,950 - - 446,524 Investments - - - 1,401,049 1,401,049 Accounts receivable, net 3,646,107 - - - 3,646,107 Other receivable 8,065 - - - 8,065 Accrued interest receivable 809 - - - 809 Inventory 997,886 - - - 997,886 Due from other accounts 123,523 - - - 123,523 Due from other funds 257,631 - - - 257,631 Total current assets 6,525,071 99,907 265,765 4,579,301 11,470,044 Non-current assets: Cash and cash equivalents, restricted 435,522 - - - 435,522 Investments, restricted 189,816 - - - 189,816 Capital assets: Land, construction in progress, and water rights 1,177,865 - - - 1,177,865 Other capital assets, net of accumulated depreciation 12,918,298 - - - 12,918,298 Total non-current assets 14,721,501 - - - 14,721,501 Total assets 21,246,572 99,907 265,765 4,579,301 26,191,545 DEFERRED OUTFLOW OF RESOURCES Deferred amounts related to pension 663,451 - - - 663,451 Deferred amounts related to OPEB 43,371 - - - 43,371 Total deferred outflow of resources 706,822 - - - 706,822 LIABILITIES Current liabilities: Accounts payable and accrued liabilities 1,970,406 12,830 - - 1,983,236 Wages payable 131,651 - - - 131,651 Due to other accounts - - 123,523 - 123,523 Due to other funds 86,495 - - - 86,495 Accrued interest payable 30,159 - - - 30,159 Accrued compensated absences 14,664 - - - 14,664 Refundable deposits 39,729 - - - 39,729 Capital lease payable 340,268 - - - 340,268 Revenue bond payable - 195,000 - - 195,000 Notes payable 630,255 - - - 630,255 Total current liabilities 3,243,627 207,830 123,523 - 3,574,980 Non-current liabilities: Accrued compensated absences 129,176 - - - 129,176 Net pension liability 2,354,986 - - - 2,354,986 Total OPEB liability 1,380,091 - - - 1,380,091 Refundable deposits 357,563 - - - 357,563 Capital lease payable 413,095 - - - 413,095 Revenue bond payable - 609,956 - - 609,956 Notes payable, net 3,483,365 - - - 3,483,365 Total non-current liabilities 8,118,276 609,956 - - 8,728,232 Total liabilities 11,361,903 817,786 123,523 - 12,303,212 DEFERRED INFLOW OF RESOURCES Deferred amounts related to pensions 318,677 - - - 318,677 Deferred amounts related to OPEB 102,394 - - - 102,394 Total deferred inflow of resources 421,071 - - - 421,071 NET POSITION Net investment in capital assets 9,229,180 (804,956) - - 8,424,224 Restricted for debt service 685,218 115,950 - - 801,168 Unrestricted 256,022 (28,873) 142,242 4,579,301 4,948,692 Total net position $ 10,170,420 $ (717,879) $ 142,242 $ 4,579,301 $ 14,174,084 85  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Combining Schedule of Revenues, Expenses and Changes in Net Position – Special Utility Authority Accounts - Year Ended June 30, 2018 Miami Special Utility Authority Accounts Utility Improvement Stormwater Rainy Day Public Utilities Account Account Account Total REVENUES Charges for services $ 24,628,761 $ - $ - $ - $ 24,628,761 Fees, licenses and permits - - 134,997 - 134,997 Miscellaneous 620,581 - - - 620,581 Total operating revenues 25,249,342 - 134,997 - 25,384,339 OPERATING EXPENSES Personal services 3,767,776 - 69,762 - 3,837,538 Materials and supplies 11,731,396 - 6,882 - 11,738,278 Other services and charges 3,265,166 - 5,721 96,400 3,367,287 Depreciation expense 1,279,813 - - - 1,279,813 Total operating expenses 20,044,151 - 82,365 96,400 20,222,916 Operating income (loss) 5,205,191 - 52,632 (96,400) 5,161,423 NON-OPERATING REVENUES (EXPENSES) Investment income 3,448 483 - 32,500 36,431 Miscellaneous 44,523 - - 14,194 58,717 Interest expense and fiscal charges (117,397) (25,707) - - (143,104) Total non-operating revenue (expenses) (69,426) (25,224) - 46,694 (47,956) Income (loss) before contrbutions and transfers 5,135,765 (25,224) 52,632 (49,706) 5,113,467 Transfers in, interaccount 226,150 214,858 - 372,232 813,240 Transfers out, interaccount (587,090) (226,150) - - (813,240) Captial contributions from governmental activities 414,855 - - - 414,855 Transfers in 6,374,669 - - - 6,374,669 Transfers out (10,484,220) - - (2,232,048) (12,716,268) Change in net position 1,080,129 (36,516) 52,632 (1,909,522) (813,277) Total net position - beginning, restated 9,090,291 (681,363) 89,610 6,488,823 14,987,361 Total net position - ending $ 10,170,420 $ (717,879) $ 142,242 $ 4,579,301 $ 14,174,084 86  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Combining Schedule of Cash Flows – Special Utility Authority Accounts - Year Ended June 30, 2018 Miami Special Utility Authority Accounts Utility Improvement Stormwater Rainy Day Public Utilities Account Account Account Total CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 24,649,560 $ - $ 134,997 $ 14,194 $ 24,798,751 Payments to suppliers (14,841,263) 11,830 (12,603) (96,400) (14,938,436) Payments to employees (3,786,258) - (69,762) - (3,856,020) Receipts from other funds - - 12,538 - 12,538 Payments to other funds (176,583) - - - (176,583) Receipts of customer meter deposits 169,175 - - - 169,175 Refunds of customer meter deposits (188,110) - - - (188,110) Net cash provided by (used in) operating activities 5,826,521 11,830 65,170 (82,206) 5,821,315 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds 6,374,669 - - - 6,374,669 Transfers to other funds (10,484,220) - - (2,232,048) (12,716,268) Interaccount transfer in - 214,858 - 372,232 587,090 Interaccount transfer out (587,090) - - - (587,090) Net cash provided by (used in) noncapital financing activities (4,696,641) 214,858 - (1,859,816) (6,341,599) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital assets purchased (75,342) (226,150) - - (301,492) Principal paid on debt (814,095) (190,000) - - (1,004,095) Interest and fiscal agent fees paid on debt (124,521) (24,230) - - (148,751) Net cash provided by (used in) capital and related financing activities (1,013,958) (440,380) - - (1,454,338) CASH FLOWS FROM INVESTING ACTIVITIES Sale (Purchase) of investments (2,292) - - 1,267,501 1,265,209 Interest and dividends 3,448 483 - 32,500 36,431 Net cash provided by investing activities 1,156 483 - 1,300,001 1,301,640 Net increase (decrease) in cash and cash equivalents 117,078 (213,209) 65,170 (642,021) (672,982) Balances - beginning of year 1,809,494 313,116 200,595 3,820,273 6,143,478 Balances - end of year $ 1,926,572 $ 99,907 $ 265,765 $ 3,178,252 $ 5,470,496 Reconciliation to Statement of Net Position: Cash and cash equivalents $ 1,160,476 $ (16,043) $ 265,765 $ 3,178,252 $ 4,588,450 Restricted cash and cash equivalents - current 330,574 115,950 - - 446,524 Restricted cash and cash equivalents - noncurrent 435,522 - - - 435,522 Total cash and cash equivalents, end of year $ 1,926,572 $ 99,907 $ 265,765 $ 3,178,252 $ 5,470,496 Reconciliation of operating income to net cash provided by (used in) operating activities: Operating income (loss) $ 5,205,191 $ - $ 52,632 $ (96,400) $ 5,161,423 Adjustments to reconcile operating income to net cash provided by (used in) operating activities: Depreciation expense 1,279,813 - - - 1,279,813 Other nonoperating revenue 44,523 - - 14,194 58,717 Change in assets and liabilities: Receivables, net (636,676) - - - (636,676) Other receivable (7,629) - - - (7,629) Due from other funds (176,583) - - - (176,583) Inventory (153,456) - - - (153,456) Deferred outflows related to pension 102,497 - - - 102,497 Deferred outflows related to OPEB (10,561) - - - (10,561) Accounts payable 308,755 11,830 - - 320,585 Due to other funds - - 12,538 - 12,538 Due to employees 4,174 - - - 4,174 Refundable deposits (18,935) - - - (18,935) Total OPEB liability (14,377) - - - (14,377) Net pension obligation (386,154) - - - (386,154) Accrued compensated absences (36,258) - - - (36,258) Deferred inflows related to OPEB 102,394 - - - 102,394 Deferred inflows related to pension 219,803 - - - 219,803 Net cash provided by (used in) operating activities $ 5,826,521 $ 11,830 $ 65,170 $ (82,206) $ 5,821,315 Noncash activities: Asset acquired by capital lease $ 458,831 $ - $ - $ - $ 458,831 Asset contributed by others 414,855 - - - 414,855 $ 873,686 $ - $ - $ - $ 873,686 87  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Combining Statement of Net Position – Internal Service Funds – June 30, 2018 Internal Service Funds Worker's Health Compensation Unemployment Insurance Fund Fund Fund Total ASSETS Current assets: Cash and cash equivalents $ 1,372,696 $ 168,006 $ 298,666 $ 1,839,368 Investments 626,018 - - 626,018 Other receivable 1,553,215 - 170,365 1,723,580 Total current assets 3,551,929 168,006 469,031 4,188,966 Total assets 3,551,929 168,006 469,031 4,188,966 LIABILITIES Current liabilities: Accounts payable and accrued liabilities - - 70 70 Claims liability 2,085,719 - 292,264 2,377,983 Total liabilities 2,085,719 - 292,334 2,378,053 NET POSITION Unrestricted 1,466,210 168,006 176,697 1,810,913 Total net position $ 1,466,210 $ 168,006 $ 176,697 $ 1,810,913 88  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Combining Statement of Revenues, Expenses and Changes in Net Position – Internal Service Funds - Year Ended June 30, 2018 Internal Service Funds Worker's Compensation Unemployment Health Insurance Fund Fund Fund Total REVENUES Charges for services $ 327,263 $ 24,634 $ 1,622,997 $ 1,974,894 Miscellaneous 23,238 - 328,134 351,372 Total operating revenues 350,501 24,634 1,951,131 2,326,266 OPERATING EXPENSES Other services and charges 189,680 - 335,560 525,240 Insurance claims and expense 431,497 5,604 1,641,563 2,078,664 Total operating expenses 621,177 5,604 1,977,123 2,603,904 Operating income (270,676) 19,030 (25,992) (277,638) NON-OPERATING REVENUES Investment income 7,891 - - 7,891 Total non-operating revenue 7,891 - - 7,891 Change in net position (262,785) 19,030 (25,992) (269,747) Total net position - beginning 1,728,995 148,976 202,689 2,080,660 Total net position - ending $ 1,466,210 $ 168,006 $ 176,697 $ 1,810,913 89  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Combining Statement of Cash Flows – Internal Service Funds - Year Ended June 30, 2018 WORKER'S HEALTH COMPENSATION UNEMPLOYMENT INSURANCE FUND FUND FUND TOTALS CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 957,787 $ 24,634 $ 1,843,961 $ 2,826,382 Payments to suppliers (189,680) - (335,994) (525,674) Payments to other funds - - - - Claims and benefits paid (707,835) (5,604) (1,435,894) (2,149,333) Net Cash Provided by Operating Activities 60,272 19,030 72,073 151,375 CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends 7,891 - - 7,891 Sale (Purchase) of investments (7,891) - - (7,891) Net Cash Provided by (used in) Investing Activities - - - - Net Increase in Cash and Cash Equivalents 60,272 19,030 72,073 151,375 Balances - beginning of the year 1,312,424 148,976 226,593 1,687,993 Balances - end of the year $ 1,372,696 $ 168,006 $ 298,666 $ 1,839,368 Reconciliation to Statement of Net Position: Cash and cash equivalents $ 1,372,696 $ 168,006 $ 298,666 $ 1,839,368 Total cash and cash equivalents $ 1,372,696 $ 168,006 $ 298,666 $ 1,839,368 Reconciliation of operating income to net cash provided by operating activities: Operating income (loss) $ (270,676) $ 19,030 $ (25,992) $ (277,638) Change in assets and liabilities: Receivables, net 607,286 - (107,170) 500,116 Accounts payable - - (434) (434) Claims liability (276,338) - 205,669 (70,669) Net Cash Provided by Operating Activities $ 60,272 $ 19,030 $ 72,073 $ 151,375 90  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Combining Schedule of Cash Flows – Discretely Presented Component Units - Year Ended June 30, 2018 MCFA MDRA MIPFA Total CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 174,908 $ 422,573 $ 44,819 $ 642,300 Payments to suppliers (70,173) (194,121) (6,225) (270,519) Payments to employees (99) (118,069) - (118,168) Net Cash Provided by Operating Activities 104,636 110,383 38,594 253,613 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital assets purchased - - (103,793) (103,793) Principal paid on capital debt (163,542) (96,452) - (259,994) Interest and fiscal charges paid on capital debt (1,523) (4,598) - (6,121) Net Cash Provided by (Used in) Capital and Related Financing Activities (165,065) (101,050) (103,793) (369,908) CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends - - 113 113 Net Cash Provided by Investing Activities - - 113 113 Net Increase (Decrease) in Cash and Cash Equivalents (60,429) 9,333 (65,086) (116,182) Balances - beginning of the year 186,405 8,502 167,141 362,048 Balances - end of the year $ 125,976 $ 17,835 $ 102,055 $ 245,866 Reconciliation to Statement of Net Position: Cash and cash equivalents $ 125,976 $ 17,835 $ 102,055 245,866 Total cash and cash equivalents $ 125,976 $ 17,835 $ 102,055 $ 245,866 Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss) (124,220) (120,599) 15,301 ($229,518) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation expense 226,616 2,526 24,043 253,185 Other nonoperating revenue 1,490 226,140 - 227,630 Change in assets and liabilities: Other receivable 1,000 1,212 - 2,212 Accounts payables (250) 1,104 (750) 104 Net Cash Provided by Operating Activities $ 104,636 $ 110,383 $ 38,594 $ 253,613 91  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 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-18-169 $ 609 $ 586 Grants to States 45.310 F-18-048 9,000 9,000 Subtotal Grants to States 45.310 9,609 9,586 Pass through Oklahoma Humanities Council Promotion of the Humanities 45.168 Y 18.003 1,000 1,000 Total Institute of Museum and Library Sciences Total Institute of Museum and Library Services 10,609 10,586 Department of the Interior Pass through Oklahoma Department of Interior Outdoor Recreation Acquistion, Development and Planning 15.916 40-01231 291,825 4,621 Department of Homeland Security . Pass through Oklahoma Emergency Management Disaster Grants - Public Assistance 97.036 FEMA 4315 11,264 11,264 Disaster Grants - Public Assistance 97.036 FEMA 4256 6,042 6,042 Subtotal Disaster Grants 97.036 17,306 17,306 Emergency Management Performance Grant 97.042 EMPG 17 26,699 26,699 Hazaard Mitigation Grant 97.039 HMPG 4256 192,000 137,766 Total Department of Homeland Security 236,005 181,771 US Department of Transportation Airport Improvement Program 20.106 3-40-0059-019-0217 426,120 184,443 426,120 184,443 Total Federal Awards $ 964,559 $ 381,421 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. 92  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 Debt Service Coverage Schedule - Year Ended June 30, 2018 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) $22,817,228 $22,817,228 Investment income 36,431 36,431 Pledged sales tax - 5,230,461 Total Gross Revenue Available 22,853,659 28,084,120 OPERATING EXPENSES: Total Operating Expenses (excludes depreciation and amortization) 17,505,801 17,505,801 Net Revenue Available for Debt Service $5,347,858 $10,578,319 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 680% 523% Coverage Requirement 125% 125% 93  CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2018 INTERNAL CONTROL AND COMPLIANCE INFORMATION 94  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, 2018, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated February 7, 2019. 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. 95 309 N. Bryant Ave. • Edmond, OK 73034 • 405.348.0615 • 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. February 7, 2019 96