ANNUAL FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORTS AS OF AND FOR THE FISCAL YEAR ENDED JUNE 30, 2020 THE CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORTS AS OF AND FOR THE FISCAL YEAR ENDED JUNE 30, 2020 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 THIS PAGE INTENTIONALLY LEFT BLANK 2 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 TABLE OF CONTENTS Page Independent Auditor’s Report on Financial Statements…………………………………… 5-6 Management’s Discussion and Analysis……………………………………………………… 7-17 The Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Position …………………………………………………………………… 19 Statement of Activities ……………………………………………………………………… 20 Governmental Funds Financial Statements: Balance Sheet …………………………………………………………………………… 22 Statement of Changes in Fund Balances……………………………………………………… 23 Reconciliation of Governmental Fund and Government-Wide Financial Statements……… 24-25 Proprietary Funds Financial Statements: Statement of Net Position……………………………………………………………………… 27 Statement of Changes in Net Position………………………………………………………… 28 Statement of Cash Flows……………………………………………………………………… 29 Discretely Presented Component Units Combining Financial Statements: Statement of Net Position……………………………………………………………………… 31 Statement of Changes in Net Position………………………………………………………… 32 Footnotes to the Basic Financial Statements ………………………………………………… 33-70 Required Supplementary Information: Budgetary Comparison Information Budgetary Comparison Schedule (Budgetary Basis) – General Fund………………………… 72 Footnotes to Budgetary Comparison Schedule………………………………………………… 73 Pension and OPEB Plan Information Schedules of Pension Information…………………………………………………………… 74-77 Schedule OPEB Information ………………………………………………………………… 78 3 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Supplementary Information: Combining Balance Sheet – General Fund Accounts…………………………………………… 80 Combining Schedule of Revenues, Expenditures and Changes in Fund Balance – General Fund Accounts ………………………………………………………………………………………… 81 Combining Balance Sheet - Non-Major Governmental Funds………………………………… 82-83 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Non-Major Governmental Funds…………………………………………………………………………… 84-85 Combining Schedule of Net Position – Miami Special Utilities Authority - Enterprise Fund Accounts……………………………………………………………………………………………86 Combining Schedule of Revenues, Expenses and Changes in Net Position– Miami Special Utilities Authority – Enterprise Fund Accounts ………………………………………………………… 87 Combining Schedule of Cash Flows – Miami Special Utilities Authority – Enterprise Fund Accounts………………………………………………………………………………………… 88 Combining Statement of Net Position – Internal Service Funds……………………………….… 89 Combining Statement of Revenues, Expenses and Changes in Net Position– Internal Service Funds…………………………………………………………………………………………….. 90 Combining Statement of Cash Flows – Internal Service Funds………………………………… 91 Combining Statement of Cash Flows – Discretely Presented Component Units ……………… 92 Schedule of Expenditures of Federal Awards………………………………………………… 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 Schedule of Findings………………………………………………………………………… 97 Schedule of Prior Year Findings……………………………………………………………… 98 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, 2020, 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 11 percent, 8 percent, and 22 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, 2020, and the respective changes in financial position, and, where applicable, cash flows thereof, for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, budgetary comparison information, and the pension plan and other post-employment benefits funding schedules, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The other supplemental information, as listed in the table of contents, is presented for purposes of additional analysis and is not a required part of the basic financial statements. The other supplementary information is the responsibility of management and was derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the other supplemental information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 28, 2020, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. December 28, 2020 6 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 MANAGEMENT DISCUSSION AND ANALYSIS 7 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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, 2020. Please read it in conjunction with the City’s financial statements, which follow this section. FINANCIAL HIGHLIGHTS  For the fiscal year ended June 30, 2020, the City’s total net position increased by $4,251,279 or 14.1% from the prior year.  During the year, the City’s expenses for governmental activities were $12.9 million and were funded by program revenues of $1.9 million and further funded with taxes and other general revenues that totaled $11.4 million.  In the City’s business-type activities, such as utilities, program revenues exceeded expenses by $7 million.  At June 30, 2020, the General Fund reported an unassigned fund balance of $689,498.  For budgetary reporting purposes, the General Fund reported revenues below estimates of $1,004,017 or 11.4%, while expenditures were under the final appropriations by $818,799 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. 8 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 The City’s financial reporting entity includes the City of Miami, two blended component units, and four active discretely presented component units. Primary Government: The City of Miami – incorporated municipality that operates the public safety, health and welfare, streets and highways, parks and recreation, and administrative activities as a home rule charter city Blended Component Units: Miami Special Utility Authority (MSUA) – public trust that operates the electric, water, wastewater, and solid waste/sanitation services of the City. Miami Development Authority (MDA) – public trust created to promote economic development in Miami. Discretely Presented Component Units (separate legal entities for which the City Council is fiscally responsible, but appoints a separate governing body): Miami 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. Miami Education Facilities Authority (MEFA) – public trust that promotes the development of educational facilities within the city. The trust is currently inactive. Using This Annual Report This annual report is presented in a format that substantially meets the presentation requirements of the Governmental Accounting Standards Board (GASB) in accordance with generally accepted accounting principles. The presentation includes financial statements that communicate the City’s financial position and changes therein at two distinct levels:  The City as a Whole (a government-wide presentation)  The City’s Funds (a presentation of the City’s major and aggregate non-major funds) 9 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 The City’s various government-wide and fund financial statements are presented throughout this annual report and are accompanied by:  Management’s Discussion and Analysis – that provides useful analysis that facilitates a better understanding of the City’s financial condition and changes therein.  Footnotes - that elaborate on the City’s accounting principles used in the preparation of the financial statements and further explain financial statement elements.  Supplemental Information – that provide additional information about specified elements of the financial statements, such as budgetary comparison information, and capital assets and long- term debt information. Reporting the City as a Whole The Statement of Net Position and the Statement of Activities One of the most frequently asked questions about the City’s finances is, “Has the City’s overall financial condition improved, declined or remained steady over the past year?” The Statement of Net Position and the Statement of Activities report information about the City as a whole and about its activities in a way that helps answer this question. These statements include all assets, deferred outflows, liabilities and deferred inflows using the accrual basis of accounting. All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid. These two government-wide statements report the City’s net position and changes in them from the prior year. You can think of the City’s net position – the difference between assets, deferred outflows, liabilities, and deferred inflows – as one way to measure the City’s financial condition, or position. Over time, increases or decreases in the City’s net position are one indicator of whether its financial health is improving, deteriorating, or remaining steady. However, you must consider other nonfinancial factors, such as changes in the City’s tax base, the condition of the City’s roads, and the quality of services to assess the overall health and performance of the City. As mentioned above, in the Statement of Net Position and the Statement of Activities, we divide the City into three kinds of activities:  Governmental activities -- Most of the City’s basic services are reported here, including the police, fire, general administration, streets, and parks. Sales taxes, franchise fees, fines, and state and federal grants finance most of these activities.  Business-type activities -- The City charges a fee to customers to help cover all or most of the cost of certain services it provides. The City’s water, wastewater, electric, airport, and sanitation activities are reported here.  Discretely-presented component units -- Accounts for various activities related to economic development, facility management, facility construction, and downtown development. 10 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Reporting the City’s Most Significant Funds Fund Financial Statements The fund financial statements provide detailed information about the most significant funds – not the City as a whole. Some funds are required to be established by State law and by bond covenants. However, the City Council establishes many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants and other money. Governmental funds -- Most of the City’s basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City’s general government operations and the basic service it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. The differences of results in the Governmental Fund financial statements to those in the Government-Wide financial statements are explained in a reconciliation following each Governmental und financial statement. Proprietary funds - When the City charges customers for the services it provides – whether to outside customers or to other units of the City – these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position, the Statement of Revenues, Expenses and Changes in Fund Net Position and Statement of Cash Flows. In fact, the City’s enterprise funds are essentially the same as the business-type activities we report in the government-wide statements but provide more detail and additional information, such as cash flows. A FINANCIAL ANALYSIS OF THE CITY AS A WHOLE Net Position As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the City, assets and deferred outflows exceeded liabilities and deferred inflows by $34,451,289 at the close of the most recent fiscal year. 11 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 TABLE 1 NET POSITION (In Thousands) Gove rnme ntal % Inc. Busine ss-Type % Inc. % Inc. Activitie s (De c.) Activitie s (De c.) Total (De c.) Restated, Restated, 2020 2019 2020 2019 2020 2019 Current assets $ 10,922 $ 12,936 -16% $ 18,766 $ 20,379 -8% $ 29,688 $ 33,315 -11% Capital assets, net 26,064 25,803 1% 24,603 19,910 24% 50,667 45,713 11% Total asse ts 36,986 38,739 -5% 43,369 40,289 8% 80,355 79,028 2% De fe rre d outflows 2,617 2,876 -9% 888 763 16% 3,505 3,639 -4% Current liabilities 2,701 3,856 -30% 4,507 4,169 8% 7,208 8,025 -10% Non-current liabilities 25,667 27,409 -6% 13,387 14,598 -8% 39,054 42,007 -7% Total liabilitie s 28,368 31,265 -9% 17,894 18,767 -5% 46,262 50,032 -8% De fe rre d inflows 2,050 1,478 39% 1,097 957 15% 3,147 2,435 29% Net position Net investment capital assets 17,156 16,545 4% 12,900 7,232 78% 30,056 23,777 26% Restricted 1,789 1,677 7% 304 817 -63% 2,093 2,494 -16% Unrestricted (deficit) (9,760) (9,350) -4% 12,062 13,279 -9% 2,302 3,929 -41% Total ne t position $ 9,185 $ 8,872 4% $ 25,266 $ 21,328 18% $ 34,451 $ 30,200 14% 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 2020, the net investment in capital assets amounted to $30,055,470. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. A major portion of the City’s net position, $2,092,573 also represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position is amounting to $2,303,246. Explanations of significant changes displayed in Table 1 are as follows: Governmental Activities: Deferred inflows – Increased $.6 million (39%) due to changes in pension and OPEB elements. Business-Type Activities: Capital asset net – Increased $4.7 million (24%) due to an increase in purchase of capital assets and expenses in construction in progress. Changes in Net Position For the year ended June 30, 2020, net position of the primary government changed as follows: 12 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 TABLE 2 CHANGES IN NET POSITION (In Thousands) Governmental % Inc. Business-Type % Inc. % Inc. Activities (Dec.) Activities (Dec.) Total (Dec.) Restated, Restated, 2020 2019 2020 2019 2020 2019 Revenues Charges for service $ 884 $ 1,070 -17% $ 26,455 $ 25,628 3% $ 27,339 $ 26,698 2% Operating grants and contributions 914 1,260 -27% - - - 914 1,260 -27% Capital grants and contributions 58 27 112% 64 550 -88% 122 577 -79% Taxes 7,885 7,520 5% - - - 7,885 7,520 5% Investment income 20 23 -13% 138 149 -7% 158 172 -8% M iscellaneous 284 198 43% 1 - 100% 285 198 44% Total revenues 10,045 10,098 -1% 26,658 26,327 1% 36,703 36,425 1% Expenses General government 1,846 1,837 - - - - 1,846 1,837 - Public safety 5,421 4,930 10% - - - 5,421 4,930 10% Streets 2,820 2,859 -1% - - - 2,820 2,859 -1% Culture and recreation 1,456 1,452 - - - - 1,456 1,452 - Economic development 544 610 -11% - - - 544 610 -11% Interest on debt 831 845 -2% - - - 831 845 -2% Water - - - 1,946 2,407 -19% 1,946 2,407 -19% Wastewater - - - 1,544 1,439 7% 1,544 1,439 7% Sanitation - - - 1,638 1,723 -5% 1,638 1,723 -5% Electric - - - 13,986 15,768 -11% 13,986 15,768 -11% Airport - - - 419 374 12% 419 374 12% Total expenses 12,918 12,533 3% 19,533 21,711 -10% 32,451 34,244 -5% Excess (deficiency) before transfers (2,873) (2,435) -18% 7,125 4,616 54% 4,252 2,181 95% Transfers 3,187 3,992 -20% (3,187) (3,992) -20% - - - Change in net position $ 314 $ 1,557 -80% $ 3,938 $ 624 531% $ 4,252 $ 2,181 95% Explanations of significant changes in Table 2 are as follows: Governmental Activities: Streets – Decrease of $.8 million (22%) due to an increase in purchase of equipment in the prior year. Operating grants and contributions – Decrease of $.4 million (27%) due to decrease in grants. Business-Type Activities: Capital grants and contributions – decrease of $.5 million (88%) due to a decrease in airport grants. 13 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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.) Restated, Restated, 2020 2019 2020 2019 General government $ 1,846 $ 1,837 1% $ (1,718) $ (1,552) 11% Public safety 5,421 4,931 10% (4,517) (4,033) 12% Streets 2,820 2,859 -1% (2,613) (2,642) -1% Culture, parks and recreation 1,456 1,452 - (1,101) (875) 26% Economic development 544 610 -11% (282) (326) -13% Interest on long-term debt 831 845 2% (831) (726) 14% Total $ 12,918 $ 12,534 3% ($11,062) $ (10,154) 9% For the year ended June 30, 2020 total expenses for governmental activities amounted to approximately $12.9 million which was a decrease from the prior year of 3%. 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. 2020 2019 2020 2019 Water $ 1,946 $ 2,407 -19% $ 1,089 $ 297 267% Wastewater 1,544 1,439 7% 645 521 24% Sanitation 1,638 1,723 -5% 997 892 12% Electric 13,986 15,768 -11% 4,488 2,454 83% Airport 419 374 12% (234) 303 -177% Total $ 19,533 $ 21,711 -10% $ 6,985 $ 4,467 56% 14 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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 $6,985,506 for the year ended June 30, 2020. A FINANCIAL ANALYSIS OF THE CITY’S FUNDS As the City completed its 2020 fiscal year, the governmental funds reported a combined fund balance of $8.0 million or a 4.5% decrease of approximately $379,835. The enterprise funds reported combined net position of $24.3 million or an 18.5% increase from 2019. Fund Balance/Net Position Governmental Funds Proprietary Funds Restricted $ 1,833,938 Net investment in capital assets $ 12,899,597 Committed 999,284 Restricted for debt service and other 303,796 Assigned 3,813,568 Unrestricted 11,073,603 Unassigned 1,338,593 Total Fund Balance $ 7,985,383 Total Net Position $ 24,276,996 General Fund Budgetary Highlights For budgetary reporting purposes, the General Fund reported revenues below estimates of $1,004,017 or 11.4%, while expenditures were under the final appropriations by $818,799 or 8.3%. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets At the end of June 30, 2020, the City had $50.7 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 $4.9 million or 10.9% from the prior year. 15 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 TABLE 5 Capital Assets (In Thousands) (Net of accumulated depreciation) Governmental Business-Type Activities Activities Total Restated 2020 2019 2020 2019 2020 2019 Land $ 4,601 $ 4,601 $ 765 $ 755 5,366 $ 5,356 Buildings 6,725 6,557 8,250 8,739 14,975 15,296 M achinery, furniture and equipment 1,956 2,169 4,580 4,313 6,536 6,482 Infrastructure 11,873 11,241 7,647 4,367 19,520 15,608 Construction in progress 909 1,234 3,361 1,736 4,270 2,970 Totals $ 26,064 $ 25,802 $ 24,603 $ 19,910 $ 50,667 $ 45,712 This year’s more significant capital asset additions placed into service included: Substation 1 Rehab $1,480,013 Airport lighting project $1,295,816 W. Central Ave Phase water line and storm sewer replacement $457,724 Splash Pad $432,515 Electric System Improvement $398,626 2020 Freightliner M2-106 $285,663 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 $30.9 million in long-term debt outstanding which represents a $1.5 million decrease, or 4.7%, 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 2020 2019 2020 2019 2020 2019 Accrued absences $ 540 $ 525 $ 165 $ 126 $ 705 $ 651 Revenue Bonds 17,925 18,375 8,000 8,615 25,925 26,990 Bond Premium (Discount) 186 206 97 (3) 283 203 Notes Payable- Direct borrowing - - 3,138 3,483 3,138 3,483 Capital Leases 309 506 518 583 827 1,089 Totals $ 18,960 $ 19,612 $ 11,918 $ 12,804 $ 30,878 $ 32,416 See Note 8 to the financial statements for more detail information on the City’s long-term debt and changes therein. 16 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 The Upcoming Year The City will spend the upcoming year completing projects with an emphasis on expanding utility services; continuing to implement the approved comprehensive plan; and spending millions on street and utility improvements. The FY 2020-2021 budget is expected to remain level with the exception of the continued electric, water, and wastewater utility rate increases that will fund much needed electric, water, and wastewater system improvements to include substation upgrades, line replacement, and utility expansion for an economic development project. 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 and loan 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 (electric, water, and wastewater) revenues. Sales tax requires a vote of the people and cannot be adjusted without the people’s consent. The addition of online sales tax collections continues to have a positive impact on 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. The Covid-19 pandemic that hit our community in March of 2020 continues to affect decision making. Spending is cautious, but, fortunately our use and sales tax revenues have been affected positively. It is yet to be determined how the economy in Miami will be affected long term, but sales tax for FY 19/20 ended up .93% and use tax up 14.71% over the previous year. As of 10/31/2020, our sales tax is up 13.88% and use tax is up 35.7%. We do not expect this trend to continue. Contacting the City’s Financial Management This report is designed to provide our citizens, taxpayers, customers and creditors with an understanding of the City’s finances and to demonstrate the City’s accountability for the resources it receives. If you have questions about this report or need additional financial information, contact: City of Miami PO Box 1288 Miami, OK 74355-1288 17 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 BASIC FINANCIAL STATEMENTS – GOVERNMENT-WIDE 18 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Statement of Net Position– June 30, 2020 Discretely Presented Primary Government Component Units Governmental Business-type Activities Activities Total ASSETS Cash and equivalents $ 9,956,878 $ 11,124,532 $ 21,081,410 $ 627,707 Investments 166,933 1,648,104 1,815,037 - Interest receivable - 809 809 - Accounts receivable, net 217,354 3,697,028 3,914,382 - Due from other governments 1,111,566 - 1,111,566 - Other receivables 404,599 31,718 436,317 8,265 Internal balances (960,987) 960,987 - - Inventory - 1,302,534 1,302,534 - Net pension asset 25,191 - 25,191 - Capital Assets Land and construction in progress 5,510,544 4,126,273 9,636,817 350,792 Other capital assets, net of depreciation 20,553,754 20,477,067 41,030,821 8,774,906 Total assets 36,985,832 43,369,052 80,354,884 9,761,670 DEFERRED OUTFLOWS: Deferred amounts related to pensions 1,959,634 538,661 2,498,295 - Deferred amounts related to OPEB 287,667 238,463 526,130 - Deferred amount on refunding 369,858 - 369,858 - Deferred amount related to GRDA settlement - 111,119 111,119 - Total deferred outflows of resources 2,617,159 888,243 3,505,402 - LIABILITIES Accounts payable and accrued liabilities 1,239,217 2,608,550 3,847,767 9,136 Claims liability 624,826 - 624,826 - Accrued interest payable 45,161 130,327 175,488 - Long-term liabilities Due within one year 791,780 1,767,840 2,559,620 334,590 Due in more than one year 25,667,354 13,387,123 39,054,477 - Total liabilities 28,368,338 17,893,840 46,262,178 343,726 DEFERRED INFLOWS: Deferred amounts related to pensions 1,276,046 493,735 1,769,781 - Deferred amounts related to OPEB 773,761 603,277 1,377,038 - Total deferred inflows of resources 2,049,807 1,097,012 3,146,819 - NET POSITION: Net investment in capital assets 17,155,873 12,899,597 30,055,470 8,793,083 Restricted 1,788,777 303,796 2,092,573 - Unrestricted (deficit) (9,759,804) 12,063,050 2,303,246 624,861 Total net position $ 9,184,846 $ 25,266,443 $ 34,451,289 $ 9,417,944 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, 2020 Statement of Activities –Year Ended June 30, 2020 Net (Expense) Revenue and Changes in Net Position Program Revenue Primary Government Discretely Operating Capital Grants Presented Charges for Grants and and Governmental Business-type Component Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Units Primary government Governmental Activities General Government $ 1,846,254 $ 123,147 $ 5,203 $ - $ (1,717,904) $ - $ (1,717,904) $ - Public Safety 5,420,710 227,546 647,190 28,649 (4,517,325) - (4,517,325) - Public Works and Streets 2,819,904 85,995 120,438 - (2,613,471) - (2,613,471) - Culture and Recreation 1,455,890 205,698 120,141 29,414 (1,100,637) - (1,100,637) - Economic Development 544,216 241,370 20,884 - (281,962) - (281,962) - Interest on long-term Debt 831,105 - - - (831,105) - (831,105) - Total governmental activities 12,918,079 883,756 913,856 58,063 (11,062,404) - (11,062,404) - Business-type activities Water 1,946,369 3,035,444 - - - 1,089,075 1,089,075 - Wastewater 1,543,600 2,188,522 - - - 644,922 644,922 - Sanitation 1,638,259 2,635,464 - - - 997,205 997,205 - Electric 13,986,355 18,474,486 - - - 4,488,131 4,488,131 - Airport 418,976 121,103 - 64,046 - (233,827) (233,827) - Total business-type activities 19,533,559 26,455,019 - 64,046 - 6,985,506 6,985,506 - Total primary government $ 32,451,638 $ 27,338,775 $ 913,856 $ 122,109 (11,062,404) 6,985,506 (4,076,898) - Component Units Culture and Recreation $ 579,350 $ 182,936 $ 113,376 $ - (283,038) Economic Development 68,385 219,497 - - 151,112 Total component units $ 647,735 $ 402,433 $ 113,376 $ - (131,926) General revenues: Taxes: Sales and use taxes 7,396,525 - 7,396,525 - Property tax 16,489 - 16,489 - Franchise and public service taxes 314,266 - 314,266 - Hotel/motel taxes 157,633 - 157,633 - Investment income 19,536 138,385 157,921 138 Miscellaneous 283,955 1,388 285,343 - Transfers - internal activity 3,186,741 (3,186,741) - - Total general revenues and transfers 11,375,145 (3,046,968) 8,328,177 138 Change in net position 312,741 3,938,538 4,251,279 (131,788) Net position - beginning, restated 8,872,105 21,327,905 30,200,010 9,549,732 Net position - ending $ 9,184,846 $ 25,266,443 $ 34,451,289 $ 9,417,944 See accompanying notes to the basic financial statements. 20 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 BASIC FINANCIAL STATEMENTS - GOVERNMENTAL FUNDS 21 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Governmental Funds Balance Sheet - June 30, 2020 Street and Other Total Stadium Project Governmental Governmental General Fund Fund Funds Funds ASSETS Cash and cash equivalents $ 1,362,469 $ 692,743 $ 5,913,873 $ 7,969,085 Investments 1,996 - 34,235 36,231 Receivables: Accounts receivable 130,732 - 88,372 219,104 Due from other funds 87,808 - 45,061 132,869 Due from other governments and entities 871,836 169,605 70,125 1,111,566 Other receivables 7,500 - - 7,500 Total assets $ 2,462,341 $ 862,348 $ 6,151,666 $ 9,476,355 LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Liabilities: Accounts payable and accrued liabilities $ 121,814 $ 77,563 $ 687,862 $ 887,239 Wages payable 343,154 - 8,264 351,418 Due to other funds 66,005 - 38,404 104,409 Total liabilities 530,973 77,563 734,530 1,343,066 DEFERRED INFLOWS OF RESOURCES Deferred revenue 92,496 - 55,410 147,906 Fund balances: Restricted 23,213 784,785 1,025,940 1,833,938 Commited - - 999,284 999,284 Assigned 1,126,161 - 2,687,407 3,813,568 Unassigned (deficit) 689,498 - 649,095 1,338,593 Total fund balances 1,838,872 784,785 5,361,726 7,985,383 Total liabilities, deferred inflows and fund balances $ 2,462,341 $ 862,348 $ 6,151,666 $ 9,476,355 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, 2020 Governmental Funds Statement of Changes in Fund Balances – Year Ended June 30, 2020 Street and Other Total Stadium Governmental Governmental General Fund Project Fund Funds Funds REVENUES Taxes $ 5,908,875 $ 1,198,399 $ 602,442 $ 7,709,716 Intergovernmental 749,906 - 572,318 1,322,224 Charges for services 242,146 - 203,069 445,215 Fines and forfeitures 252,078 - - 252,078 Licenses and permits 74,674 - - 74,674 Investment income 15,527 3,292 717 19,536 Miscellaneous 463,168 3,790 64,417 531,375 Total revenues 7,706,374 1,205,481 1,442,963 10,354,818 EXPENDITURES Current: General government 1,617,309 - 29,878 1,647,187 Public Safety 5,237,687 - 110,419 5,348,106 Public works and streets 1,519,390 326,214 649,953 2,495,557 Culture and recreation 1,223,444 - 379,423 1,602,867 Economic development 562,164 - - 562,164 Capital Outlay - - 2,688,557 2,688,557 Debt Service: Principal 186,858 450,000 10,141 646,999 Interest and other charges 16,962 548,688 717 566,367 Total expenditures 10,363,814 1,324,902 3,869,088 15,557,804 Excess (deficiency) of revenues over expenditures (2,657,440) (119,421) (2,426,125) (5,202,986) OTHER FINANCING SOURCES (USES) Transfers in 8,430,022 1,173,711 2,311,201 11,914,934 Transfers out (5,728,690) (1,167,851) (195,242) (7,091,783) Total other financing sources and uses 2,701,332 5,860 2,115,959 4,823,151 Net change in fund balances 43,892 (113,561) (310,166) (379,835) Fund balances - beginning 1,794,980 898,346 5,671,892 8,365,218 Fund balances - ending $ 1,838,872 $ 784,785 $ 5,361,726 $ 7,985,383 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, 2020 Reconciliation of Governmental Funds and Government-Wide Financial Statements: Total fund balance, governmental funds $ 7,985,383 Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental activities are not current financial resources and therefore are not reported in this fund financial statement, but are reported in the governmental activities of the Statement of Net Position. 26,064,298 Certain long-term assets are not available to pay for current fund liabilities and, therefore, are deferred in the funds. 147,906 Certain other assets and 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. Net pension asset 25,191 Pension related deferred outflows 1,959,634 OPEB related deferred outflows 287,667 Deferred amounts on refunding 369,858 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 (309,168) Interest payable (45,161) Net pension liability (5,822,044) Pension related deferred inflows (1,276,046) Total OPEB liability (1,677,323) OPEB related deferred inflows (773,761) Accrued compensated absences (539,734) Unamortized debt premium (185,865) Revenue bond payable (17,925,000) 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 899,011 Net Position of Governmental Activities in the Statement of Net Position $ 9,184,846 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, 2020 Changes in Fund Balances – Changes in Net Position Reconciliation: Net change in fund balances - total governmental funds: $ (379,835) 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 1,869,499 Depreciation expense (1,607,547) 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. 126,579 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 (328,279) Bond proceeds provide current financial resources to governmental funds, but issuing debt increases 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 principal payments 196,999 Revenue bond principal payments 450,000 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 751 Change in accrued compensated absences (14,387) Change in total OPEB liability (41,535) Change in amortization of bond premium 20,278 Change in amortization of unamortized gain/loss (88,766) 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 108,984 Change in net position of governmental activities $ 312,741 See accompanying notes to the basic financial statements. 25 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 BASIC FINANCIAL STATEMENTS - PROPRIETARY FUNDS 26 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Proprietary Funds Statement of Net Position - June 30, 2020 Enterprise Funds Miami Special Utility Internal Authority Airport Fund Total Service Funds ASSETS Current assets: Cash and cash equivalents $ 3,369,018 $ 52,347 $ 3,421,365 $ 1,987,793 Cash and cash equivalents, restricted 7,701,972 - 7,701,972 - Investments 1,451,458 - 1,451,458 130,702 Accounts receivable, net 3,657,633 39,395 3,697,028 - Other receivable 436 31,282 31,718 395,349 Accrued interest receivable 809 - 809 - Inventory 1,277,240 25,294 1,302,534 - Due from other funds 29,755 30,128 59,883 208,585 Total current assets 17,488,321 178,446 17,666,767 2,722,429 Non-current assets: Cash and cash equivalents, restricted 1,195 - 1,195 - Investments, restricted 196,646 - 196,646 - Capital assets: Land, construction in progress, and water rights 4,113,412 12,861 4,126,273 - Other capital assets, net of accumulated depreciation 16,463,189 4,013,878 20,477,067 - Total non-current assets 20,774,442 4,026,739 24,801,181 - Total assets 38,262,763 4,205,185 42,467,948 2,722,429 DEFERRED OUTFLOW OF RESOURCES Deferred amounts related to pensions 541,454 (2,793) 538,661 - Deferred amounts related to OPEB 238,463 - 238,463 - Deferred amounts related to GRDA settlement 111,119 - 111,119 - Total deferred outflow of resources 891,036 (2,793) 888,243 - LIABILITIES Current liabilities: Accounts payable and accrued liabilities 2,434,207 4,477 2,438,684 560 Claims liability - - - 624,826 Wages payable 167,753 2,113 169,866 - Due to other funds 86,495 1,848 88,343 208,585 Accrued interest payable 130,327 - 130,327 - Accrued compensated absences 16,344 84 16,428 - Refundable deposits 38,195 - 38,195 - Capital lease payable 329,194 - 329,194 - Revenue bond payable 635,000 - 635,000 - Notes payable 749,023 - 749,023 - Total current liabilities 4,586,538 8,522 4,595,060 833,971 Non-current liabilities: Accrued compensated absences 148,151 751 148,902 - Net pension liability 1,763,490 - 1,763,490 - Total OPEB liability 1,092,568 - 1,092,568 - Refundable deposits 342,597 - 342,597 - Capital lease payable 189,261 - 189,261 - Revenue bond payable 7,362,908 - 7,362,908 - Notes payable, net 2,487,397 - 2,487,397 - Total non-current liabilities 13,386,372 751 13,387,123 - Total liabilities 17,972,910 9,273 17,982,183 833,971 DEFERRED INFLOW OF RESOURCES Deferred amounts related to pensions 479,613 14,122 493,735 - Deferred amounts related to OPEB 603,277 - 603,277 - Total deferred inflow of resources 1,082,890 14,122 1,097,012 - NET POSITION Net investment in capital assets 8,872,858 4,026,739 12,899,597 - Restricted for debt service 303,796 - 303,796 - Unrestricted 10,921,345 152,258 11,073,603 1,888,458 Total net position $ 20,097,999 $ 4,178,997 24,276,996 $ 1,888,458 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 $ 989,447 reported as interfund balances Total net position per Government-Wide financial statements $ 25,266,443 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, 2020 Proprietary Funds Statement of Changes in Net Position - Year Ended June 30, 2020 Enterprise Funds Miami Special Utility Internal Service Authority Airport Fund Total Fund REVENUES Charges for services $ 25,567,880 $ 120,414 $ 25,688,294 $ 1,907,802 Fees, licenses and permits 132,409 - 132,409 - Miscellaneous 537,704 - 537,704 88,477 Total operating revenues 26,237,993 120,414 26,358,407 1,996,279 OPERATING EXPENSES Personal services 3,804,795 45,704 3,850,499 - Materials and supplies 10,326,374 52,044 10,378,418 - Other services and charges 3,191,935 30,409 3,222,344 502,187 Insurance claims and expense - - - 1,056,460 Depreciation expense 1,597,398 290,819 1,888,217 - Total operating expenses 18,920,502 418,976 19,339,478 1,558,647 Operating income (loss) 7,317,491 (298,562) 7,018,929 437,632 NON-OPERATING REVENUES (EXPENSES) Investment income 138,385 - 138,385 2,872 Miscellaneous 109,006 689 109,695 - Interest expense and fiscal charges (359,843) - (359,843) - Total non-operating revenue (expenses) (112,452) 689 (111,763) 2,872 Income (loss) before contrbutions and transfers 7,205,039 (297,873) 6,907,166 440,504 Contributed capital - 64,046 64,046 - Contributed assets- governmental activities 1,458,957 - 1,458,957 - Transfers in 6,657,933 53,050 6,710,983 - Transfers out (11,356,681) - (11,356,681) (177,453) Change in net position 3,965,248 (180,777) 3,784,471 263,051 Total net position - beginning 16,132,751 4,359,774 20,492,525 1,625,407 Total net position - ending $ 20,097,999 $ 4,178,997 $ 24,276,996 $ 1,888,458 Change in net position above 3,784,471 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 154,067 Change in Business-Type Activities in Net Position per Government-Wide Financial Statements $ 3,938,538 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, 2020 Proprietary Funds Statement of Cash Flows - Year Ended June 30, 2020 Enterprise Funds Miami Special Utility Internal Service Authority Airport Fund Total Fund CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 26,098,628 $ 117,469 $ 26,216,097 $ 2,537,950 Payments to suppliers (13,661,826) (76,771) (13,738,597) (501,627) Payments to employees (3,821,699) (45,538) (3,867,237) - Receipts from other funds 55,426 (59,944) (4,518) 208,585 Payments to other funds (326,859) - (326,859) (208,585) Receipts of customer meter deposits 169,465 - 169,465 - Refunds of customer meter deposits (204,485) - (204,485) - Claims and judgments paid - - - (1,742,257) Net cash provided by (used in) operating activities 8,308,650 (64,784) 8,243,866 294,066 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds 6,657,933 53,050 6,710,983 - Transfers to other funds (11,356,681) - (11,356,681) (177,453) Net cash provided by (used in) noncapital financing activities (4,698,748) 53,050 (4,645,698) (177,453) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital assets purchased (4,837,265) - (4,837,265) - Principal paid on debt (3,222,085) - (3,222,085) - Proceeds of capital grants - 64,046 64,046 - Premium on debt issued 129,341 - 129,341 - Proceeds from debt 1,911,350 - 1,911,350 - Interest and fiscal agent fees paid on debt (398,844) - (398,844) - Net cash provided by (used in) capital and related financing activities (6,417,503) 64,046 (6,353,457) - CASH FLOWS FROM INVESTING ACTIVITIES Sale (Purchase) of investments (35,208) - (35,208) (2,872) Interest and dividends 138,385 - 138,385 2,872 Net cash provided by investing activities 103,177 - 103,177 - Net increase in cash and cash equivalents (2,704,424) 52,312 (2,652,112) 116,613 Balances - beginning of year 13,776,609 35 13,776,644 1,871,180 Balances - end of year $ 11,072,185 $ 52,347 $ 11,124,532 $ 1,987,793 Reconciliation to Statement of Net Position: Cash and cash equivalents $ 3,369,018 $ 52,347 $ 3,421,365 $ 1,987,793 Restricted cash and cash equivalents - current 7,701,972 - 7,701,972 - Restricted cash and cash equivalents - noncurrent 1,195 - 1,195 - Total cash and cash equivalents, end of year $ 11,072,185 $ 52,347 $ 11,124,532 $ 1,987,793 Reconciliation of operating income (loss) to net cash provided by (used in) operating activities: Operating income (loss) $ 7,317,491 $ (298,562) $ 7,018,929 $ 437,632 Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation expense 1,597,398 290,819 1,888,217 - Other nonoperating revenue 109,006 689 109,695 - Change in assets and liabilities: Receivables, net (248,371) (3,634) (252,005) 541,671 Other receivable - - - - Due from other funds (326,859) - (326,859) (208,585) Inventory (273,111) 6,946 (266,165) - Deferred outflows related to pension 46,536 9,652 56,188 - Deferred outflows related to OPEB (197,528) - (197,528) - Deferred outflows related to GRDA Settlement 15,893 15,893 - Accounts payable 113,701 (1,264) 112,437 560 Claims liability - - - (685,797) Due to other funds 55,426 (59,944) (4,518) 208,585 Due to employees 48,477 238 48,715 - Refundable deposits (35,020) - (35,020) - Total OPEB liability 53,007 - 53,007 - Net pension liability (156,131) - (156,131) - Accrued compensated absences 39,052 (72) 38,980 - Deferred inflows related to pension (3,969) (9,652) (13,621) - Deferred inflows related to OPEB 153,652 - 153,652 - Net cash provided by (used in) operating activities $ 8,308,650 $ (64,784) $ 8,243,866 $ 294,066 Noncash activities: Assets contributed by governmental activities $ 1,458,957 $ - $ 1,458,957 $ - Asset acquired by capital lease 285,663 - 285,663 - $ 1,744,620 $ - $ 1,744,620 $ - See accompanying notes to the basic financial statements. 29 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 BASIC FINANCIAL STATEMENTS – DISCRETELY PRESENTED COMPONENT UNITS 30 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Discretely Presented Component Units Combining Statement of Net Position - June 30, 2020 MCFA MDRA MIDA MIPFA Total ASSETS Current assets: Cash and cash equivalents $ 176,253 $ 19,353 $ 259,978 $ 172,123 $ 627,707 Other receivable 8,265 - - - 8,265 Total current assets 184,518 19,353 259,978 172,123 635,972 Non-current assets: Capital assets: Land, construction in progress, and water rights - - 102,571 248,221 350,792 Other capital assets, net of accumulated depreciation 7,737,067 5,049 725,632 307,158 8,774,906 Total non-current assets 7,737,067 5,049 828,203 555,379 9,125,698 Total assets 7,921,585 24,402 1,088,181 727,502 9,761,670 LIABILITIES Current liabilities: Accounts payable and accrued liabilities 4,043 1,701 1,600 1,792 9,136 Accrued interest on notes payable - - 1,975 - 1,975 Notes payable - - 332,615 - 332,615 Total liabilities 4,043 1,701 336,190 1,792 343,726 NET POSITION Net investment in capital assets 7,737,066 5,050 495,588 555,379 8,793,083 Unrestricted 180,476 17,651 256,403 170,331 624,861 Total net position $ 7,917,542 $ 22,701 $ 751,991 $ 725,710 $ 9,417,944 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, 2020 Discretely Presented Component Units Combining Statement of Changes in Net Position - Year Ended June 30, 2020 MCFA MDRA MIDA MIPFA Total REVENUES Charges for services $ 33,144 $ 139,792 $ 71,774 $ 63,964 $ 308,674 Miscellaneous - 10,000 1,356 - 11,356 Total operating revenues 33,144 149,792 73,130 63,964 320,030 OPERATING EXPENSES Personal services - 94,054 - - 94,054 Materials and supplies - 24,849 350 - 25,199 Other services and charges 66,466 139,759 2,560 3,348 212,133 Depreciation expense 251,697 2,525 20,727 28,713 303,662 Total operating expenses 318,163 261,187 23,637 32,061 635,048 Operating income (loss) (285,019) (111,395) 49,493 31,903 (315,018) NON-OPERATING REVENUES (EXPENSES) Investment income - - 1 137 138 Miscellaneous income 493 112,883 - - 113,376 Gain on sale of assets - - 82,403 - 82,403 Interest expense and fiscal charges - - (12,687) - (12,687) Total non-operating revenue (expenses) 493 112,883 69,717 137 183,230 Change in net position (284,526) 1,488 119,210 32,040 (131,788) Total net position - beginning 8,202,068 21,213 632,781 693,670 9,549,732 Total net position - ending $ 7,917,542 $ 22,701 $ 751,991 $ 725,710 $ 9,417,944 See accompanying notes to the basic financial statements. 32 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 FOOTNOTES TO BASIC FINANCIAL STATEMENTS 33 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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 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. Miami Education Facilities Authority (MEFA) – public trust that promotes the development of educational facilities within the city. The trust is currently inactive. 34 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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 35 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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, 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. 36 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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, 2020 by these entities are as follows: 37 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Maturities in Years Fair Credit On Less T ype Value Rating Demand T han One Demand deposits $ 13,112,661 N/A $ 13,112,661 $ - Cash on hand 3,345 N/A 3,345 - T ime deposits 1,815,037 N/A - 1,815,037 Money Market Funds 7,965,404 Not rated - 7,965,404 Sub-T otal $ 22,896,447 $ 13,116,006 $ 9,780,441 Reconciliation to Financial State me nts: Cash and cash equivalents $ 21,081,410 Investments 1,815,037 $ 22,896,447 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, 2020: • Money Market Mutual Funds of $7,965,404 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, 2020, the City was not exposed to custodial credit risk. Component Unit: The bank deposits of the MDRA component unit of $19,353 at June 30, 2020 were fully insured by the F.D.I.C. The bank deposits of the MCFA component unit of $176,253 at June 30, 2020 were fully insured by the F.D.I.C. The bank deposits of the MIPFA component unit of $172,123 at June 30, 2020 were fully insured by the F.D.I.C. The bank deposits of the MIDA component unit of $259,978 at June 30, 2020 were uninsured by $12,856. 38 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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, 2020, the investments held by the City mature between 2020 through 2021. 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, 2020. 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, 2020 are as follows: Cash and cash equivalents: Cash Restricted for Refundable deposits $ 49,524 Money Markets Restricted for Debt Service 7,652,448 $ 7,701,972 Cash and cash equivalents, noncurrent: Cash Restricted for Refundable deposits 1,195 $ 1,195 Investments: Refundable deposits $ 196,646 $ 196,646 39 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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 1,188,266 $ - $ 1,188,266 Court fines 557,375 (444,247) 113,128 Other 432,125 - 432,125 T otal Governmental Activities $ 2,177,766 $ (444,247) $ 1,733,519 Reconciliation to Statement of Net Position: Accounts receivable, net $ 217,354 Due from other governmental agencies 1,111,566 Other receivable 404,599 T otal $ 1,733,519 Business-T ype Activities: Utilities $ 5,725,286 $ (2,028,258) $ 3,697,028 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 40 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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 $10,000 or more. For the year ended June 30, 2020, capital assets balances changed as follows: Restated Balance at Transfers/ Balance at July 1, 2019 Additions Deductions June 30, 2020 PRIMARY GOVERNMENT: Governmental activities: Capital assets not being depreciated: Land $ 4,601,374 $ - $ - $ 4,601,374 Construction in progress 1,233,933 1,450,626 1,775,389 909,170 Total capital assets not being depreciated 5,835,307 1,450,626 1,775,389 5,510,544 Other capital assets: Buildings 22,666,999 513,503 - 23,180,502 Infrastructure 43,399,955 1,461,676 - 44,861,631 M achinery, furniture and equipment 11,347,703 219,083 - 11,566,786 Total other capital assets at historical cost 77,414,657 2,194,262 - 79,608,919 Less accumulated depreciation for: Buildings 16,109,963 345,890 - 16,455,853 Infrastructure 32,158,844 829,563 - 32,988,407 M achinery, furniture and equipment 9,178,811 432,094 - 9,610,905 Total accumulated depreciation 57,447,618 1,607,547 - 59,055,165 Other capital assets, net 19,967,039 586,715 - 20,553,754 Governmental activities capital assets, net $ 25,802,346 $ 2,037,341 $ 1,775,389 $ 26,064,298 Balance at Transfers/ Balance at July 1, 2019 Additions Deductions June 30, 2020 Business-type activities: Capital assets not being depreciated: Land $ 755,050 $ 10,000 $ - $ 765,050 Construction in progress 1,735,605 4,895,996 3,270,378 3,361,223 Total capital assets not being depreciated 2,490,655 4,905,996 3,270,378 4,126,273 Other capital assets: Buildings and utility infrastructure 21,098,912 - - 21,098,912 M achinery, furniture and equipment 17,672,645 1,114,209 18,786,854 Infrastructure 20,458,336 3,832,058 - 24,290,394 Total other capital assets at historical cost 59,229,893 4,946,267 - 64,176,160 Less accumulated depreciation for: Buildings and utility infrastructure 12,359,902 489,266 - 12,849,168 M achinery, furniture and equipment 13,359,675 846,761 14,206,436 Infrastructure 16,091,299 552,190 - 16,643,489 Total accumulated depreciation 41,810,876 1,888,217 - 43,699,093 Other capital assets, net 17,419,017 3,058,050 - 20,477,067 Business-type activities capital assets, net $ 19,909,672 $ 7,964,046 $ 3,270,378 $ 24,603,340 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 41 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020  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 $ 256,938 Public Safety 143,469 Streets 894,815 Culture and Recreation 312,175 Economic Development 150 Total $ 1,607,547 Business-Type Activities: Airport $ 290,819 Electric 535,098 Water 389,542 Wastewater 424,810 Sanitation 247,948 Total $ 1,888,217 Capital assets of the component units were: M IDA Balance at Balance at August 1, 2019 Additions Deductions July 31, 2020 MIDA - Discreetly Presented Component unit Capital assets not being depreciated: Land $ 103,517 $ - $ 946 $ 102,571 Total capital assets not being depreciated 103,517 - 946 102,571 Other capital assets: Buildings and utility infrastructure 1,036,353 - - 1,036,353 Less accumulated depreciation for: Buildings and utility infrastructure 289,993 20,728 - 310,721 Other capital assets, net 746,360 (20,728) - 725,632 M IDA capital assets, net $ 849,877 $ (20,728) $ 946 $ 828,203 42 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 M DRA Balance at Balance at July 1, 2019 Additions Deductions June 30, 2020 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 4,550 - - 4,550 M achinery, furniture and equipment 13,132 2,525 15,657 Total accumulated depreciation 17,682 2,525 - 20,207 Other capital assets, net 7,574 (2,525) - 5,049 M DRA capital assets, net $ 7,574 $ (2,525) $ - $ 5,049 M IPFA Restated Balance at Balance at July 1, 2019 Additions Deductions June 30, 2020 MIPFA - Discreetly Presented Component unit Capital assets not being depreciated: Land $ 248,221 $ - $ - $ 248,221 Total capital assets not being depreciated 248,221 - - 248,221 Other capital assets: Buildings 570,924 - - 570,924 M achinery, furniture and equipment 185,585 - - 185,585 Total other capital assets at historical cost 756,509 - - 756,509 Less accumulated depreciation for: Buildings 334,268 19,680 - 353,948 M achinery, furniture and equipment 86,371 9,032 - 95,403 Total accumulated depreciation 420,639 28,712 - 449,351 Other capital assets, net 335,870 (28,712) - 307,158 M IPFA capital assets, net $ 584,091 $ (28,712) $ - $ 555,379 M CFA Balance at Balance at July 1, 2019 Additions Deductions June 30, 2020 MCFA - Discreetly Presented Component unit Other capital assets: Buildings 8,851,209 - - 8,851,209 Less accumulated depreciation for: Buildings 862,445 251,697 - 1,114,142 Other capital assets, net 7,988,764 (251,697) - 7,737,067 M CFA capital assets, net $ 7,988,764 $ (251,697) $ - $ 7,737,067 43 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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 ce ivable Fund Payable Fund Amount Nature of Interfund 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 29,220 Posting correction MSUA * Airport Fund * 535 Expense reimbursement Airport Fund * General Fund * 30,128 Posting correction Workers Compensation Fund Health Insurance Fund 208,585 deposit to the wrong fund T otal $ 401,337 * Denotes major fund. Due From Due T o Net Internal Reconciliation to Fund Financial Statements: Other Funds Other Funds Balances Governmental Funds $ 132,869 $ (104,409) $ 28,460 Proprietary Funds 59,883 (88,343) (28,460) Internal Service Funds 208,585 (208,585) - T otal $ 401,337 $ (401,337) $ - Reconciliation to Statement of Net Position: Net Internal Balances $ (28,460) Internal Service Fund Activity reported in Business-type Activities 989,447 Net Internal Balance $ 960,987 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, 2020 were as follows: 44 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Transfer In Transfe r O ut Amount Nature of Inte rfund Transfe r * General Fund * MSUA $ 8,037,978 Operating subsidy/pledged sales tax * General Fund * MSUA 362,256 Operating subsidy * General Fund * Street Project 1,167,851 Pledged sales tax * Street Project * MSUA 1,173,711 Pledged sales tax Street and alley * MSUA 143,500 A Operating subsidy Pool Improvement Fund * General Fund 163,479 A Budgeted Capital Improvement Fund * General Fund 40,900 A Operating subsidy Capital Improvement Fund * MSUA 707,366 A Capital project * General Fund Street and Alley 29,788 B Operating subsidy Grant Fund * MSUA 931,870 A Budgeted Grant Fund Capital Improvement Fund 47,105 A.B Budgeted Grant Fund Cemetery Fund 17,254 A.B Grant matching Grant Fund Workers Compensation Fund 124,403 A Operating subsidy Grant Fund RFC 07-09 Grant Fund 1,095 A.B Fund closure Airport Workers Compensation Fund 53,050 Airport Capital Improvement Fund 100,000 B Budgeted Grant Fund * General Fund 134,229 A Budgeted MSUA * General Fund 5,390,082 Operating subsidy/pledged sales tax $ 18,625,917 * Denotes Major Fund Subtotal non-major Govermental Funds transfers in $ 2,311,201 A Subtotal non-major Govermental Funds transfers out $ 195,242 B T ransfers to T ransfers from Net Re conciliation to fund financial state ments: Other Funds Other Funds T ransfers Governmental Funds $ (7,091,783) $ 11,914,934 $ 4,823,151 Enterprise Funds (11,356,681) 6,710,983 (4,645,698) Internal Service Funds (177,453) - (177,453) T otals $ (18,625,917) $ 18,625,917 $ - Re conciliation to State me nt of Activitie s: Net T ransfers $ (4,645,698) T ransfer of assets from Governmental Activities to Business T ype Activities 1,458,957 T ransfers - Internal Activity $ (3,186,741) 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, 2020, the City’s long-term debt balances changed as follows: Primary Government: Balance Balance Due Within Type of Debt July 1, 2019 Additions Deductions June 30, 2020 One Year Governmental Activities: Revenue Bond Premium $ 206,143 $ - $ 20,278 $ 185,865 $ - Revenue Bonds 18,375,000 - 450,000 17,925,000 455,000 Capital Lease Obligations 506,167 - 196,999 309,168 282,806 Accrued Compensated Absences 525,345 14,389 - 539,734 53,974 Total Governmental Activities $ 19,612,655 $ 14,389 $ 667,277 18,959,767 791,780 Plus: Total OPEB liability 1,677,323 - Net pension liability 5,822,044 - $ 26,459,134 $ 791,780 Reconcilation to Statement of Net Position: Due within one year $ 791,780 Due in more than one year 25,667,354 $ 26,459,134 45 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Balance Balance Due Within Type of Debt July 1, 2019 Additions Deductions June 30, 2020 One Year Business-Type Activities: Notes Payable - Direct borrowings $ 3,483,365 $ 1,911,350 $ 2,256,594 $ 3,138,121 $ 749,023 Unamortized Bond Premium (Discount) (3,567) 129,341 29,567 96,207 - Revenue Bonds 8,615,000 - 615,000 8,000,000 635,000 Capital Lease Obligations 583,283 285,663 350,491 518,455 329,194 Accrued Compensated Absences 126,350 38,980 - 165,330 16,428 Total Business-Type Activities $ 12,804,431 $ 2,365,334 $ 3,251,652 11,918,113 1,729,645 Plus: Total OPEB liability 1,092,568 - Net pension liability 1,763,490 - Refundable deposits 380,792 38,195 $ 15,154,963 $ 1,767,840 Reconcilation to Statement of Net Position: Due within one year $ 1,767,840 Due in more than one year 13,387,123 $ 15,154,963 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 2046. Bonds are secured with net revenues of the Special Utility Authority and a pledged sales tax. $17,925,000 Current portion $455,000 Non-current portion 17,470,000 $17,925,000 Capital Lease Obligations: $90,154 capital lease obligation for the purchase of a crawler/dozer, matures September 2021 with a stated interest rate of 3.81%. $13,162 $993,730 capital lease obligation for the purchase of fire trucks, matures July 2020 with a stated interest rate of 5.00% 233,027 $102,111 capital lease obligation for the purchase of police cars, matures September 2020 with a stated interest rate of 2.66%. 8,224 $149,481 capital lease obligation for the purchase of fire rescue truck, matures March 21,2022 with a stated interest rate of 3.01%. 54,755 Total capital lease obligations $309,168 Current portion $282,806 Non-current portion 26,362 $309,168 46 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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% $2,049 $285,663 capital lease obligation for the purchase of a digger derrick truck, matures July 2021 with a stated interest rate of 1.95% 208,870 $69,950 capital lease obligation for the purchase of a mini excavator, matures July 2021 with a stated interest rate of 1.95%. 3,192 $95,994 capital lease obligation for the purchase of a truck for water, matures August 2022 with a stated interest rate of 2.99%. 44,837 $362,837 capital lease obligation for the purchase of a refuse truck, matures June 2021 with a stated interest rate of 3.62%. 125,092 $86,408 capital lease obligation for the purchase of a tractor, matures July 2021 with a stated interest rate of 1.95%. 22,398 $197,131 capital lease obligation for the purchase of a roll-off truck, matures February 2022 with a stated interest rate of 3.98%. 112,017 Total Capital Leases $518,455 Current portion $329,194 Non-current portion 189,261 $518,455 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. $415,000 2018 Utility System Revenue Bond for $8,000,000 with interest from 3.5% to 4.0% Debt service payments are due semi-annually through August 2033. Bonds are secured with net revenues of the Special Utility Authority and a pledged sales tax. $7,585,000 Total Capital Leases $8,000,000 Current portion $635,000 Non-current portion 7,365,000 $8,000,000 47 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Notes Payable – Oklahoma Water Resources Board – Direct Borrowings: 2003A Note payable to Oklahoma Water Resources Board, dated December 31, 2003, original amount $1,760,000 with an annual administration fee of 0.5% due in semi-annual installments, with final payment due December 31, 2023 secured by and payable from utility revenues for sanitation, water, and sewer. Proceeds used for capital improvements related to waste water. In the event of default on the OWRB loans, the lender may: 1) file suit for specific performance of covenants contained in the agreement; 2) accelerate maturity; 3) gain control of operations through temporary trustees; or 4) file suit to enforce or enjoin action in action of parties under provisions of the indenture, security agreement or lease agreement. $308,000 2004A Note payable to Oklahoma Water Resources Board, dated June 25, 2004, original amount $1,595,538 with an annual administration fee of 0.5% due in semi-annual installments, with final payment due June 25, 2024 secured by and payable from utility revenues for water, sewer, and garbage collection and disposal system. Proceeds used for capital improvements related to waste water. In the event of default on the OWRB loans, the lender may: 1) file suit for specific performance of covenants contained in the agreement; 2) accelerate maturity; 3) gain control of operations through temporary trustees; or 4) file suit to enforce or enjoin action in action of parties under provisions of the indenture, security agreement or lease agreement. 319,108 2004C Note payable to Oklahoma Water Resources Board, dated October 26, 2004, original amount $1,620,,000 with interest rate of 3.0% and 0.5% annual administrative fee due in semi-annual installments, with final payment due October 26, 2024 secured by and payable from utility revenues for water, sewer, and garbage collection and disposal system. Proceeds used for capital improvement related to water. In the event of default on the OWRB loans, the lender may: 1) file suit for specific performance of covenants contained in the agreement; 2) accelerate maturity; 3) gain control of operations through temporary trustees; or 4) file suit to enforce or enjoin action in action of parties under provisions of the indenture, security agreement or lease agreement. 501,047 2005 Note payable to Oklahoma Water Resources Board, dated September 15, 2005, original amount $563,000 with an annual administration fee of 0.5% due in semi-annual installments, with final payment due September 15, 2025 secured by and payable from utility revenues for water, sewer, and garbage collection and disposal system. Proceeds used for capital improvements related to waste water. In the event of default on the OWRB loans, the lender may: 1) file suit for specific performance of covenants contained in the agreement; 2) accelerate maturity; 3) gain control of operations through temporary trustees; or 4) file suit to enforce or enjoin action in action of parties under provisions of the indenture, security agreement or lease agreement. 168,616 2019 Note payable to Oklahoma Water Resources Board, dated July 15, 2019, original amount $1,830,000 with interest rate of 4.2% due in semi-annual installments, secured by and payable from utility revenues for water, sewer, and electric system, with final payment due September 15, 2023. This note is a current refunding of the outstanding portion of the Series 2003B note and the Series 2004B note, proceeds used for capital improvements related to water and sewer systems. In the event of default on the OWRB loans, the lender may: 1) file suit for specific performance of covenants contained in the agreement; 2) accelerate maturity; 3) gain control of operations through temporary trustees; or 4)file suit to enforce or enjoin action in action of parties under provisions of the indenture, security agreement or lease agreement. 1,760,000 48 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 CWSRF Note payable to Oklahoma Water Resources Board, dated September 1, 2019, original amount $4,450,000 with interest rate of 1.24% and 0.5% annual administrative fee due in semi-annual installments, secured by and payable from utility revenues for water, sewer, and garbage collection and disposal system, with final payment due March 15, 2041. Proceeds used for capital improvements related to improvements to the wastewater system. The MUSA has drawn $49,000 of the note as of June 30. In the event of default on the OWRB loans, the lender may: 1) file suit for specific performance of covenants contained in the agreement; 2) accelerate maturity; 3) gain control of operations through temporary trustees; or 4) file suit to enforce or enjoin action in action of parties under provisions of the indenture, security agreement or lease agreement. 49,000 DWSRF Note payable to Oklahoma Water Resources Board, dated May 1, 2020, original amount $2,785,000 with interest rate of 1.51% and 0.5% administrative fee due in semi-annual installments, secured by and payable from utility revenues for water, sewer, and garbage collection and disposal system, with final payment due March 15, 2042. Proceeds used for improvements for the drinking water treatment system drinking water project. The MUSA has drawn $32,350 of the note as of June 30. In the event of default on the OWRB loans, the lender may: 1) file suit for specific performance of covenants contained in the agreement; 2) accelerate maturity; 3) gain control of operations through temporary trustees; or 4) file suit to enforce or enjoin action in action of parties under provisions of the indenture, security agreement or lease agreement. 32,350 Total Notes Payable – Oklahoma Water Resources Board $3,138,121 Current portion $749,023 Non-current portion 2,389,098 $3,138,121 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 2021 455,000 537,388 282,806 2,524 2022 465,000 528,188 26,362 469 2023 475,000 518,788 - - 2024 485,000 509,188 - - 2025 495,000 499,388 - - 2025-2029 2,630,000 2,337,881 - - 2030-2034 - 2,188,250 - - 2035-2039 4,435,000 1,567,350 - - 2040-2044 3,925,000 889,125 - - 2045-2047 4,560,000 213,750 - - Total $ 17,925,000 $ 9,789,296 $ 309,168 $ 2,993 49 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Business-Type Activities Notes Payable-Direct Borrowings Revenue Bonds Payable Capital Leases Payable Year Ending June 30, Principal Interest Principal Interest Principal Interest 2021 749,023 224,023 635,000 265,383 329,194 12,200 2022 805,477 171,673 660,000 242,370 167,797 3,171 2023 964,952 148,582 465,000 221,325 21,464 75 2024 1,229,897 124,340 485,000 202,725 - - 2025 1,021,086 102,480 500,000 188,175 - - 2026-2030 1,577,336 396,231 2,730,000 706,875 - - 2031-2035 1,626,250 266,293 2,525,000 224,700 - - 2036-2040 1,726,249 127,388 - - - - 2041-2042 591,500 12,054 - - - - Amount to be drawn (7,153,649) - - - - - Total $ 3,138,121 $ 1,573,064 $ 8,000,000 $ 2,051,553 $ 518,455 $ 15,446 MDRA Debt: Balance Balance Due Within Type of Debt July 1, 2019 Additions Deductions June 30, 2020 One Year Component Unit: Accrued Compensated Absences 156 - 156 - - Total MDRA $ 156 $ - $ 156 $ - $ - MIDA Debt (direct borrowings): 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 $181,267 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 116,935 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 34,413 Total debt outstanding – MIDA $332,615 Balance Balance Due Within Type of Debt August 1, 2019 Additions Deductions July 31, 2020 One Year Component Unit: MIDA Note payable (direct borrowings) $ 389,487 $ - $ 56,872 $ 332,615 $ 332,615 Component Unit - MIDA Notes Payable - direct borrowing Year Ending June 30, Principal Interest 2021 332,615 8,936 Total $ 332,615 $ 8,936 50 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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 A, 2004 A, 2004C, 2005, and 2019 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 $3,222,028. The 2019 note refinanced the 2003B and 2004 B notes. Net utility revenues received in the current year were $7,996,033. Debt service payments of $2,346,758 for the current fiscal year were 29.3% 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, $19,375,000 of the Series 2016 Sales Tax Revenue Refunding Bonds, and 8,000,000 of the Series 2018 Revenue 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 and stadium 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, 2046 and 2033, respectively. The total principal and interest payable for the remainder of the life of these bonds is $37,765,849. Pledged sales taxes received in the current year were $5,390,082. Net revenues and sales tax pledged during the year was $13,386,115. Debt service payments of $1,895,288 for the current fiscal year were 14.2% 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, 2020 net position restricted by enabling legislation totaled $268,385. 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: 51 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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 $ - $ - $ 28,023 $ 28,023 General obligation debt service - 312,902 158,823 471,725 Capital improvements - - 393,528 393,528 Street improvements - 471,883 - 471,883 Culture and rec programs 23,213 - 340,177 363,390 Economic development - - 91,716 91,716 Police - drug programs - - 13,673 13,673 Sub-total restricted 23,213 784,785 1,025,940 1,833,938 Committed for: Street operations - - 999,284 999,284 Assigned for: Capital improvements - - 2,687,407 2,687,407 Demolition 192,644 - - 192,644 Culture and rec programs 13,772 - - 13,772 Supplement next year's budget 919,745 - - 919,745 Sub-total assigned 1,126,161 - 2,687,407 3,813,568 Unassigned: 689,498 - 649,095 1,338,593 TOTAL FUND BALANCE $ 1,838,872 $ 784,785 $ 5,361,726 $ 7,985,383 Beginning net positions was restated due to a an error in the calculation of construction in progess. Restatements were as follows: Governmental Activities: Government-wide Statement of Activities: Beginning net position as previously reported $8,112,890 Adjustment for understatement of construction in progress 759,215 Beginning net position, restated $8,872,105 52 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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, 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, 2020, the City did not assess a property tax. 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. 53 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020  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, 2018 $ 2,085,719 $ 292,264 $ - $ 2,377,983 Claims and changes in estimates 729,866 1,263,145 12,680 2,005,691 Claims payments (1,598,529) (1,461,842) (12,680) (3,073,051) Claim liability, June 30, 2019 1,217,056 93,567 - 1,310,623 Claims and changes in estimates (33,382) 1,071,708 20,676 1,059,002 Claims payments (680,431) (1,057,578) (6,790) (1,744,799) Claim liability, June 30, 2020 $ 503,243 $ 107,697 $ 13,886 $ 624,826 13. Retirement Plan Participation The following is a summary of the deferred outflows, deferred inflows and net pension liability by the various plans as of June 30, 2020: Governmental Business Type Total Deferred Outflows: Police Pension $ 491,310 $ - $ 491,310 Fire Pension 927,097 - 927,097 OkMRF 541,227 538,661 1,079,888 Total $ 1,959,634 $ 538,661 $ 2,498,295 Deferred Inflows: Police Pension $ 140,547 $ - $ 140,547 Fire Pension 729,699 - 729,699 OkMRF 405,800 493,735 899,535 Total $ 1,276,046 $ 493,735 $ 1,769,781 Net Pension Liability: Fire Pension 4,171,963 - 4,171,963 OkMRF 1,650,081 1,763,490 3,413,571 Total $ 5,822,044 $ 1,763,490 $ 7,585,534 Net Pension Asset: Police Pension $ 25,191 $ - $ 25,191 Total $ 25,191 $ - $ 25,191 54 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Summary of Significant Accounting Policies For purposes of measuring the net pension asset, 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 (OFPRS), Oklahoma Police Pension & Retirement System (OPPRS) and Oklahoma Municipal Retirement Fund (OkMRF) and additions to/deductions from OFPRS, OPPRS and OkMRF’s fiduciary net position have been determined on the same basis as they are reported by OFPRS, OPPRS and OkMRF. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments held by these funds are reported at fair value. For purposes of measuring the total OPEB liability, deferred outflows of resources, and deferred inflows and OPEB expense for the single employer other postemployment benefit plan the measurement has been prepared in accordance with GASB Statement No. 75. 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. Eligibility Factors and Benefit Provisions As of 07/01/19 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 7 years of credited service beginning September 1, 2019 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 55 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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. C. Employees Covered by Benefit Terms Active Employees 117 Deferred Vested Former Employees 12 Retirees or Retiree Beneficiaries 84 Total 213 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 10.49% of covered payroll as of July 1, 2019. For the year ended June 30, 2020, the City recognized $655,182 of employer contributions to the plan which is in excess of the actuarially determined amount by $136,866 based on covered payroll of $4,941,046. Employees contribute 3.75% to the plan in accordance with the plan provisions adopted by the City Council. Employee contributions for fiscal 2020 were $185,262. Actuarial Assumptions Date of Last Actuarial Valuation July 1, 2019 a. Actuarial cost method Entry age normal b. Rate of Return on Investments and Discount Rate 7.50% 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% 56 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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: 225 Year 2: 140 Year 3: 100 Year 4: 70 Year 5: 40 j. Date of last experience study September 2012 for fiscal years 2007 thru 2011 D. Discount Rate – The discount rate used to value benefits was the long-term expected rate of return on plan investments of 7.50% since the plan’s net fiduciary position is projected to be sufficient to make projected benefit payments. The City has adopted a funding method that is designed to fund all benefits payable to participants over the course of their working careers. Any differences between actual and expected experience are funded over a fixed period to ensure all funds necessary to pay benefits have been contributed to the trust before those benefits are payable. Thus, the sufficiency of pension plan assets was made without a separate projection of cash flows. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation (2.75%). 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, 2019 are summarized in the following table: 57 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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 2.75% Long-term expected return 7.50% E. Changes in Net Pension Liability – The total pension liability was determined based on an actuarial valuation performed as of July 1, 2019 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, 2019 and the City’s report ending date of June 30, 2020, that would have had a significant impact on the net pension liability. The following table reports the components of changes in net pension liability: Increase (Decrease) Total Pension Plan Net Net Pension Liability Position Liability (a) (b) (a) - (b) Balances Beginning of Year $ 14,410,533 $ 10,816,305 $ 3,594,228 Changes for the Year: Service cost 346,075 - 346,075 Interest expense 1,044,256 - 1,044,256 Experience losses (gains) - (272,005) - (272,005) (amortized over avg remain svc period of actives & inactive) Changes of assumptions 208,546 - 208,546 Contributions--City - 646,533 (646,533) Contributions--members - 182,834 (182,834) Net investment income - 735,845 (735,845) Benefits paid (992,188) (992,188) - Plan administrative expenses - (22,670) 22,670 Benefit changes due to plan amendments 35,013 - 35,013 Change in deferred contributions made subsequent to the measurement date - - - Net Changes 369,697 550,354 (180,657) Balances End of Year $ 14,780,230 $ 11,366,659 $ 3,413,571 58 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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 7.50 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 (6.50 percent) or 1-percentage-point higher (8.50 percent) than the current rate: 1% Current 1% Decrease Discount Increase (6.50%) Rate (7.50%) (8.50%) Net Pension Liability $ 5,199,742 $ 3,413,571 $ 1,944,689 The City reported $398,443 in pension expense for the year ended June 30, 2020. At June 30, 2020, 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 $ 7,395 $ 759,158 Net difference between projected and actual earnings 15,229 - Changes in assumptions 269,889 - Changes in proportion and differences between City contributions and proportionate share of contributions 115,128 115,125 City contributions during measurement date 17,065 25,252 City contributions subsequent to the measurement date 655,182 - Total $ 1,079,888 $ 899,535 The $655,182 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, 2021. Any 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: 2021 $ (156,724) 2022 (245,267) 2023 (76,368) 2024 3,530 2025 - $ (474,829) 59 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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 Benefits provided - FPRS provides defined retirement benefits based on members’ final average compensation, age, and term of service. In addition, the retirement program provides for benefits upon disability and to survivors upon death of eligible members. The Plan’s benefits are established and amended by Oklahoma statute. Retirement provisions are as follows: Normal Retirement:  Hired Prior to November 1, 2013 Normal retirement is attained upon completing 20 years of service. The normal retirement benefit is equal to 50% of the member’s final average compensation. Final average compensation is defined as the monthly average of the highest 30 consecutive months of the last 60 months of participating service. For volunteer firefighters, the monthly pension benefit for normal retirement is $150.60 per month.  Hired After November 1, 2013 Normal retirement is attained upon completing 22 years of service. The normal retirement benefit is equal to 55% of the member’s final average compensation. Final average compensation is defined as the monthly average of the highest 30 consecutive months of the last 60 months of participating service. Also participants must be age 50 to begin receiving benefits. For volunteer firefighters, the monthly pension benefit for normal retirement is $165.66 per month. 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 30 months. For volunteer firefighters, the not-in-the-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-the-line-of-duty pension is $150.60 with less than 20 years of service or $7.53 per year of service, with a maximum of 30 years. A $5,000 lump sum death benefit is payable to the qualified spouse or designated recipient upon the participant’s death. The $5,000 death benefit does not apply to members electing the vested benefit. Contributions - The contributions requirements of the Plan are at an established rate determined by Oklahoma Statute and are not based on actuarial calculations. Employees are required to contribute 9% percent of their annual pay. Participating cities are required to contribute 14% of the employees’ annual pay. Contributions to the pension plan from the City were $168,865. The State of Oklahoma also made on- 60 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 behalf contributions to FPRS in the amount of $414,829 during the calendar year and this is reported as both expense and revenue 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 $401,535. 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, 2020, the City reported a liability of $4,171,963 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2019, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2019. 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, 2019. Based upon this information, the City’s proportion was .3948%. For the year ended June 30, 2020, the City recognized pension expense of $620,054. At June 30, 2020, 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 $ 698,594 $ 84,859 Changes of assumptions - 107,175 Net difference between projected and actual earnings on pension plan investments - 302,002 Changes in proportion 59,638 229,872 Contributions during the measurement date - 5,791 Contributions subsequent to the measurement date 168,865 - Total $ 927,097 $ 729,699 In the year ending June 30, 2021, $168,865 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 subsequent year. 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: 2021 $ 81,590 2022 (55,397) 2023 44,929 2024 (11,829) 2025 (30,760) Total $ 28,533 61 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Actuarial Assumptions- The total pension liability was determined by an actuarial valuation as of July 1, 2019, using the following actuarial assumptions, applied to all prior periods included in the measurement: Inflation: 2.75% Salary increases: 2.75% to 10.5% average, including inflation Investment rate of return: 7 .5% net of pension plan investment expense Mortality rates were based on the Pub-2010 Public Safety Table, with adjustments for generational mortality improvement using scale MP-2018 for healthy lives and no mortality improvement for disabled lives. The actuarial assumptions used in the July 1, 2019, valuation were based on the results of an actuarial experience study for the period July 1, 2013, to 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. 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, 2019, are summarized in the following table: Target Long-Term Expected Asset Class Allocation Real Rate of Return Fixed income 20% 4.90% Domestic equity 47% 7.09% International equity 15% 9.19% Real estate 10% 7.99% Other assets 8% 5.57% 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. 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 $ 5,387,179 $ 4,171,963 $ 2,837,539 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. 62 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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 Benefits provided - OPPRS provides retirement, disability, and death benefits to members of the plan. The normal retirement date under the Plan is the date upon which the participant completes 20 years of credited service, regardless of age. Participants become vested upon completing 10 years of credited service as a contributing participant of the Plan. No vesting occurs prior to completing 10 years of credited service. Participants’ contributions are refundable, without interest, upon termination prior to normal retirement. Participants who have completed 10 years of credited service may elect a vested benefit in lieu of having their accumulated contributions refunded. If the vested benefit is elected, the participant is entitled to a monthly retirement benefit commencing on the date the participant reaches 50 years of age or the date the participant would have had 20 years of credited service had employment continued uninterrupted, whichever is later. Monthly retirement benefits are calculated at 2.5% of the final average salary (defined as the average paid base salary of the officer over the highest 30 consecutive months of the last 60 months of credited service) multiplied by the years of credited service, with a maximum of 30 years of credited service considered. Monthly benefits for participants due to permanent disability incurred in the line of duty are 2.5% of the participants’ final average salary multiplied by 20 years. This disability benefit is reduced by stated percentages for partial disability based on the percentage of impairment. After 10 years of credited service, participants who retire due to disability incurred from any cause are eligible for a monthly benefit based on 2.5% of their final average salary multiplied by the years of service. This disability benefit is also reduced 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 $167,131. The State of Oklahoma also made on- behalf contributions to OPPRS in the amount of $154,677 during the calendar year and this is reported as both expense and revenue 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 $156,097. These on-behalf payments did not meet the criteria of a special funding situation. Pension Liabilities (Asset), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions - At June 30, 2020, the City reported an asset of $25,191 for its proportionate share of the net pension asset. The net pension asset was measured as of June 30, 2019, and the total pension liability used to calculate the net pension asset was determined by an actuarial valuation as of July 1, 2019. The City’s proportion of the net pension asset was based on the City’s contributions 63 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 received by the pension plan relative to the total contributions received by pension plan for all participating employers as of June 30, 2019. Based upon this information, the City’s proportion was .3946%. For the year ended June 30, 2020, the City recognized pension expense of $290,663. At June 30, 2020, 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 $ 15,118 $ 118,937 Changes of assumptions 64,322 - Net difference between projected and actual earnings on pension plan investments 230,196 - Changes in proportion 13,262 14,063 Contributions during measurement date 1,281 7,547 Contributions subsequent to the measurement date 167,131 - Total $ 491,310 $ 140,547 In the year ending June 30, 2021, $167,131 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 or an addition to the net pension liability (asset) in the subsequent year. 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: 2021 $ 102,342 2022 (34,672) 2023 35,666 2024 76,729 2025 3,567 Total $ 183,632 Actuarial Assumptions-The total pension liability was determined by an actuarial valuation as of July 1, 2019, using the following actuarial assumptions, applied to all prior periods included in the measurement: Inflation: 2.75% Salary increases: 3.5% to 12% average, including inflation Investment rate of return: 7.5% net of pension plan investment expense Cost-of-living adjustments: Police officers eligible to receive increased benefits according to repealed Section 50-120 of Title 11 of the Oklahoma Statutes pursuant to a court order receive an adjustment of 1/3 to 1/2 of the increase or decrease of any 64 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 adjustment to the base salary of a regular police officer, based on an increase in base salary of 3.5% (wage inflation). 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. The actuarial assumptions used in the July 1, 2019, valuation were based on the results of an actuarial experience study for the period July 1, 2012, to June 30, 2017. 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, 2019, are summarized in the following table: Long-Term Expected Asset Class Real Rate of Return Fixed income 4.79% Domestic equity 5.74% International equity 9.19% Real estate 7.99% Private Equity 10.20% Commodities 3.50% 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. 65 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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(Asset) to Changes in the Discount Rate- The following presents the net pension liability (asset) of the employers calculated using the discount rate of 7.5%, as well as what the Plan's net pension liability (asset) 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) $ 1,073,120 $ (25,191) $ (1,122,973) Pension plan fiduciary net position - Detailed information about the pension plan’s fiduciary net position is available in the separately issued financial report of the OPPRS; which can be located at www.ok.gov/OPPRS . City of Miami 457 Deferred Compensation Plan (DC Plan) Plan Description – The City of Miami makes available to all full-time employees two Section 457 deferred compensation plans. The DC Plan was created in accordance with Section 457 of the Internal Revenue Code, and permits the employees to defer a portion of their salary until future years. The deferred compensation is not available to the employee until retirement, termination, death, or unforeseeable emergency. Employees may choose investments offered by International City/County Management Association (ICMA) or the DC Plan. Separate audited financial statements are not available. Funding Policy – DC Plan participants may contribute up to $15,000 of eligible compensation per year. During the year ended June 30, 2020, employees contributed $126,190 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. There were no contributions to the plan for the fiscal year ended June 30, 2020. Separate audited financial statements are not available. 66 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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, 2020 were $99,477. Employees Covered by Benefit Terms Active Employees 172 Inactive or beneficiaries receiving benefits 8 Total 180 Total OPEB Liability – The total OPEB liability was determined based on an alternative measurement method valuation performed as of June 30, 2019 which is also the measurement date. Actuarial Assumptions- The total OPEB liability in the June 30, 2019 valuation, was determined using the following actuarial assumptions:  Actuarial Cost Method - Entry Age  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: 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% 67 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Changes in Total OPEB Liability - Total OPEB Liability Balances at Beginning of Year $ 3,118,684 Changes for the Year: Service cost 180,562 Interest expense 120,692 Change in assumptions (162,177) Difference between expected and actual experience (388,393) Benefits paid (99,477) Net Changes (348,793) Balances End of Year $ 2,769,891 OPEB Liabilities, OPEB Expense, and Deferred Outflows or Resources and Deferred Inflows of Resources Related to OPEB - For the year ended June 30, 2020, the City recognized OPEB expense of $142,994. At June 30, 2020, 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 $ - $ 351,477 Changes of assumptions - 592,261 Net difference between projected and actual earnings on OPEB plan investments - - Changes in proportion 422,400 421,363 City Contributions during measurement date 11,906 11,937 Benefits paid subsequent to the measurement date 91,824 - Total $ 526,130 $ 1,377,038 In the year ending June 30, 2021, $91,824 reported as deferred outflows of resources related to pensions resulting from City benefits paid subsequent to the measurement date will be recognized as a reduction of or an addition to the total OPEB liability in the subsequent year. Amounts reported as deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year Ended June 30: 2021 $ (158,261) 2022 $ (158,261) 2023 $ (158,261) 2024 $ (158,261) 2025 $ (144,656) Thereafter (165,032) $ (942,732) 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 (2.50 percent) or 1- percentage- point higher (4.50 percent) than the current discount rate: 68 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Current Discount Rate 1% Decrease ( 2.50%) (3.50%) 1% Increase ( 4.50%) Employers' total OPEB liability $ 3,392,110 $ 2,769,891 $ 2,288,536 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 (5.02 percent decreasing to 3.87 percent) or 1- percentage point higher (7.02 percent decreasing to 5.87 percent) than the current healthcare cost trend rates: Current Discount Rate 1% Decrease (5.02% (6.02% decreasing to 1% Increase (7.02% decreasing to 3.87%) 4.87%) decreasing to 5.87%) Employers' total OPEB liability $ 2,302,668 $ 2,769,891 $ 3,357,640 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. Grant Programs The City of Miami participates in various federal or state grant/loan programs from year to year. In 2020, the City’s involvement in federal and state award programs was relatively immaterial. 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. 69 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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. New leadership as of 7/1/2020, City manager and mayor, may change our direction on this important matter, but is yet to be determined. Asset Retirement Obligation The City has incurred certain asset retirement obligations related to the operation of its wastewater utility system. The estimated liability of the legally required closure costs for the wastewater utility system cannot be reasonably estimated as of June 30, 2020, since the specific legally required costs of retirement have not yet been identified. The City anticipates identifying those specific legally required costs and obtaining an estimate of those costs in the subsequent fiscal year. 70 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 REQUIRED SUPPLEMENTARY INFORMATION 71 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Budgetary Comparison Schedules (Budgetary Basis) – Year Ended June 30, 2020 GENERAL FUND Actual Variance with Budgeted Amounts Amounts Final Budget Original Final (Budget basis) Positive (Negative) Beginning Budgetary Fund Balance: $ 1,314,640 $ 1,314,640 $ 1,711,861 $ 397,221 Resources (Inflows): Taxes and assessments 6,793,000 6,793,000 6,968,315 175,315 Fees, licenses and permits 41,800 41,200 56,956 15,756 Charges for services 177,250 179,330 167,864 (11,466) Fines and forfeitures 228,000 228,000 215,340 (12,660) Interest earned 13,500 13,500 15,470 1,970 M iscellaneous - 1,430,160 277,822 (1,152,338) Intergovernmental 84,000 86,600 66,006 (20,594) Total Resources (Inflows) 7,337,550 8,771,790 7,767,773 (1,004,017) Amounts available for appropriation 8,652,190 10,086,430 9,479,634 (606,796) Charges to Appropriations (Outflows): General Government M uncipal Court 135,992 147,522 142,207 5,315 General Government 1,271,273 1,291,010 1,074,948 216,062 Human Resources 283,377 284,622 226,458 58,164 Legal 127,480 128,505 98,683 29,822 Public Safety Police 2,267,961 2,256,967 2,191,281 65,686 Fire 2,062,167 2,049,950 1,979,965 69,985 Emergency M anagement 48,761 84,103 57,560 26,543 Police Communications 423,704 438,332 394,234 44,098 Code Enforecement 117,658 118,558 113,333 5,225 Risk M anagement 92,417 92,892 86,717 6,175 Public Works and Streets Streets 731,930 785,905 749,193 36,712 Cemetery 337,639 341,064 314,844 26,220 Facilities 270,356 276,812 256,908 19,904 Animal Control 205,987 207,086 184,885 22,201 Culture and Recreation Parks 657,032 661,224 578,586 82,638 Swimming Pool 200,397 200,397 134,494 65,903 Library 543,580 548,541 510,395 38,146 Total Charges to Appropriations 9,777,711 9,913,490 9,094,691 818,799 Other financing sources (uses) Transfers from other funds 7,947,726 7,984,914 7,010,525 (974,389) Transfers to other funds (6,742,830) (6,979,658) (5,837,158) 1,142,500 Total other financing sources (uses) 1,204,896 1,005,256 1,173,367 168,111 Ending Budgetary Fund Balance $ 79,375 $ 1,178,196 $ 1,558,310 $ 380,114 See accompanying notes to this schedule. 72 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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 June 30, 2019 Fund Balance June 30, 2020 Budget to GAAP Reconciliation: Fund Balance - GAAP Basis $1,794,980 $43,892 $1,838,872 Increases (Decreases): Revenues: Receivable from other governments and entities (700,757) (147,672) (848,429) Accounts receivable (197,470) 68,313 (129,157) State on behalf pension payments (590,126) 20,620 (569,506) Combining accounts 26,738 (237,302) (210,564) Expenditures: Accrued payroll 274,515 59,267 333,782 Other expenditures 513,855 59,951 573,806 State on behalf pension payments 590,126 (20,620) 569,506 Fund Balance - Budgetary Basis $1,711,861 ($153,551) $1,558,310 73 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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 2019 2020 City's proportion of the net pension liability 0.413176% 0.418954% 0.4143524% 0.4169184% 0.421250% 0.394823% City's proportionate share of the net pension liability $ 4,887,039 $ 4,446,809 $ 5,062,191 $ 5,243,677 $ 4,741,794 $ 4,171,963 City's covered-employee payroll $ 1,089,326 $ 1,144,680 $ 1,159,023 $ 1,185,003 $ 1,208,603 $ 1,220,957 City's proprotionate share of the net pension liability as a percentage of its covered-employee payroll 449% 388% 437% 443% 392% 342% Plan fiduciary net position as a percentage of the total pension liability 68.12% 68.27% 64.87% 66.61% 70.73% 72.85% *The amounts present for each fiscal year were determined as of 6/30 Notes to Schedule: Only the previous six fiscal years are presented because 10-year data is not yet available. SCHEDULE OF CITY CONTRIBUTIONS OKLAHOMA FIREFIGHTERS PENSION & RETIREMENT SYSTEM Last 10 Fiscal Years 2015 2016 2017 2018 2019 2020 Statutorially required contribution $ 160,255 $ 162,264 $ 165,905 $ 169,204 $ 170,934 $ 168,865 Contributions in relation to the statutorially required contribution 160,255 162,264 165,905 169,204 170,934 168,865 Contribution deficiency (excess) $ - $ - $ - $ - $ - $ - City's covered-employee payroll $ 1,144,680 $ 1,159,023 $ 1,185,033 $ 1,208,603 $ 1,220,957 $ 1,206,179 Contributions as a percentage of covered-employee payroll 14.00% 14.00% 14.00% 14.00% 14.00% 14.00% Notes to Schedule: Only the previous six 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, 2020 Schedules of Required Supplementary Information SCHEDULE OF THE CITY OF MIAMI PORTIONATE SHARE OF THE NET PENSION LIABILITY (ASSET) OKLAHOMA POLICE PENSION & RETIREMENT SYSTEM Last 10 Fiscal Years* 2015 2016 2017 2018 2019 2020 City's proportion of the net pension liability (asset) 0.4416% 0.3977% 0.4577% 0.3683% 0.4088% 0.3946% City's proportionate share of the net pension liability (asset) $ (148,685) $ 16,217 $ 700,954 $ 29,715 $ (194,728) $ (25,191) City's covered-employee payroll $ 1,184,882 $ 1,131,472 $ 1,201,369 $ 1,169,953 $ 1,246,941 $ 1,283,171 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% 15.62% 1.96% Plan fiduciary net position as a percentage of the total pension liability 101.53% 99.82% 93.50% 99.68% 101.89% 100.24% *The amounts present for each fiscal year were determined as of 6/30 Notes to Schedule: Only the previous six fiscal years are presented because 10-year data is not yet available. SCHEDULE OF CITY CONTRIBUTIONS OKLAHOMA POLICE PENSION & RETIREMENT SYSTEM Last 10 Fiscal Years 2015 2016 2017 2018 2019 2020 Statutorially required contribution $ 145,903 $ 156,178 $ 152,094 $ 162,102 $ 166,813 $ 167,131 Contributions in relation to the statutorially required contribution 145,903 156,178 152,094 162,102 166,813 167,131 Contribution deficiency (excess) $ - $ - $ - $ - $ - $ - City's covered-employee payroll $ 1,131,472 $ 1,201,369 $ 1,169,953 $ 1,246,941 $ 1,283,171 $ 1,285,623 Contributions as a percentage of covered-employee payroll 12.89% 13.00% 13.00% 13.00% 13.00% 13.00% Notes to Schedule: Only the previous six 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, 2020 Required Supplementary Information Oklahoma Municipal Retirement Fund Schedule of Changes in Net Pension Liability and Related Ratios 2015 2016 2017 2018 2019 2020 Total pension liability Service cost $ 276,403 $ 308,701 $ 344,545 $ 330,866 $ 283,926 $ 346,075 Interest 1,034,763 1,037,326 1,073,154 1,087,717 1,061,577 1,044,256 Changes of benefit terms - - - - Differences between expected and actual experience - 102,207 (202,315) (535,480) (541,596) (272,005) Changes of assumptions - - - 321,010 - 208,546 Benefit payments, including refunds of member contributions (997,138) (1,006,438) (964,663) (1,092,673) (1,076,009) (992,188) Benefit changes due to plan amendments 35,013 Net change in total pension liability 314,028 441,796 250,721 111,440 (272,102) 369,697 Total pension liability - beginning 13,564,650 13,878,678 14,320,474 14,571,195 14,682,635 14,410,533 Total pension liability - ending (a) $ 13,878,678 $ 14,320,474 $ 14,571,195 $ 14,682,635 $ 14,410,533 $ 14,780,230 Plan fiduciary net position Contributions - employer $ 569,542 $ 618,748 $ 640,172 $ 650,799 $ 635,453 $ 646,533 Contributions - member 166,578 175,420 181,046 183,989 179,680 182,834 Net investment income 1,363,071 261,920 83,267 1,149,965 755,918 735,845 Benefit payments, including refunds of member contributions (997,138) (1,006,438) (964,663) (1,092,673) (1,076,009) (992,188) Administrative expense (20,151) (19,533) (18,698) (20,154) (21,162) (22,670) Other - - - - Net change in plan fiduciary net position 1,081,902 30,117 (78,876) 871,926 473,880 550,354 Plan fiduciary net position - beginning 8,437,357 9,519,259 9,549,376 9,470,500 10,342,425 10,816,305 Plan fiduciary net position - ending (b) $ 9,519,259 $ 9,549,376 $ 9,470,500 $ 10,342,426 $ 10,816,305 $ 11,366,659 Net pension liability - ending (a) - (b) $ 4,359,419 $ 4,771,098 $ 5,100,695 $ 4,340,209 $ 3,594,228 $ 3,413,571 Plan fiduciary net position as a percentage of the total pension liability 68.59% 66.68% 64.99% 70.44% 75.06% 76.90% Covered employee payroll $ 4,356,987 $ 4,742,831 $ 4,657,554 $ 4,735,571 $ 4,920,014 $ 4,576,812 Net pension liability as a percentage of covered- 100.06% 100.60% 109.51% 91.65% 73.05% 74.58% employee payroll *The amounts present for each fiscal year were determined as of 6/30 Notes to Schedule: Only the previous six fiscal years are presented because 10-year data is not yet available. 76 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Required Supplementary Information Oklahoma Municipal Retirement Fund Schedule of Employer Contributions 2015 2016 2017 2018 2019 2020 Actuarially determined contribution $ 616,160 $ 643,059 $ 592,589 $ 590,967 $ 512,617 $ 518,316 Contributions in relation to the actuarially 616,160 643,059 623,633 635,553 647,362 655,182 determined contribution Contribution deficiency (excess) $ - $ - $ (31,044) $ (44,586) $ (134,745) $ (136,866) Covered employee payroll $ 4,661,027 $ 4,849,681 $ 4,703,091 $ 4,792,921 $ 4,882,062 $ 4,941,046 Contributions as a percentage of covered-employee payroll 13.22% 13.26% 13.26% 13.26% 13.26% 13.26% Notes to Schedule: 1. Only the previous six fiscal years are presented because 10-year data is not yet available. 2. Latest Valuation Date: July 1, 2019 3. Actuarially determined contribution rate is calculated as of July 1, 2019 July 2019 through June 2020 contributions were at a rate of 10.49%. 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% 77 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Required Supplementary Information – OPEB Schedule of Changes in Total OPEB Liability and Related Ratios Postemployment Health Insurance Implcit Rate Subsidy Plan 2018 2019 2020 Total OPEB Liability Service cost $ 233,167 $ 206,592 $ 180,562 Interest 91,262 125,031 120,692 Changes in assumptions (280,566) (378,465) (162,177) Differences between expected and actual experience (17,115) (388,393) Benefit payments (78,120) (103,265) (99,477) Net change in total OPEB liability (34,257) (167,222) (348,793) Balances at Beginning of Year 3,320,163 3,285,906 3,118,684 Balances End of Year $ 3,285,906 $ 3,118,684 $ 2,769,891 Covered employee payroll $ 7,400,000 $ 7,310,000 $ 7,011,000 Total OPEB liability as a percentage of covered- employee payroll 44.40% 42.66% 39.51% Notes to Schedule: Only three fiscal years are presented because 10-year data is not yet available 78 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 OTHER SUPPLEMENTARY INFORMATION 79 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Combining Balance Sheet – General Fund Accounts - June 30, 2020 Municipal Court Travel Information MCVB &Tourism General Fund Account Center Account Account Demolition Account Total General Fund ASSETS Cash and cash equivalents $ 1,141,203 $ 20,267 $ (1,500) $ 16,328 $ 186,171 $ 1,362,469 Investments 1,996 - - - - 1,996 Receivables: Accounts receivable 129,157 - - 1,575 - 130,732 Due from other funds 87,808 - - - - 87,808 Due from other accounts 10,218 - - - - 10,218 Receivable from other governments 848,429 - - 13,819 9,588 871,836 Other receivables - - 7,500 - - 7,500 Total assets $ 2,218,811 $ 20,267 $ 6,000 $ 31,722 $ 195,759 $ 2,472,559 LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Liabilities: Accounts payable and accrued liabilities $ 98,220 $ 9,854 $ 6,357 $ 4,268 $ 3,115 $ 121,814 Wages payable 333,782 - - 9,372 - 343,154 Due to other funds 66,005 - - - - 66,005 Due to other accounts - 10,218 - - - 10,218 Total liabilities 498,007 20,072 6,357 13,640 3,115 541,191 DEFERRED INFLOWS OF RESOURCES Deferred revenue 92,496 - - - - 92,496 Fund balances: Restricted 23,213 - - - - 23,213 Assigned 933,517 - - - 192,644 1,126,161 Unassigned (deficit) 671,578 195 (357) 18,082 - 689,498 Total fund balances 1,628,308 195 (357) 18,082 192,644 1,838,872 Total liabilities, deferred inflows and fund balances $ 2,218,811 $ 20,267 $ 6,000 $ 31,722 $ 195,759 $ 2,472,559 80 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Combining Schedule of Revenues, Expenditures, and Changes in Fund Balance – General Fund Accounts – Year Ended June 30, 2020 Travel MCVB & Municipal Information Tourism Demolition Total General General Fund Court Account Center Account Account Account Fund REVENUES Taxes $ 5,751,242 $ - $ - $ 157,633 $ - $ 5,908,875 Intergovernmental 749,906 - - - - 749,906 Charges for services 177,781 - - 64,365 - 242,146 Fines and forfeitures 206,364 - - - 45,714 252,078 Licenses and permits 74,674 - - - - 74,674 Investment income 15,527 - - - - 15,527 Miscellaneous 328,653 - 133,520 995 - 463,168 Total revenues 7,304,147 - 133,520 222,993 45,714 7,706,374 EXPENDITURES Current: General government 1,543,824 - - - 73,485 1,617,309 Public safety 5,237,687 - - - - 5,237,687 Public works and streets 1,519,390 - - - - 1,519,390 Culture and recreation 1,223,444 - - - - 1,223,444 Economic development - - 201,114 361,050 - 562,164 Debt Service: Principal 186,858 - - - - 186,858 Interest and fiscal charges 16,962 - - - - 16,962 Total expenditures 9,728,165 - 201,114 361,050 73,485 10,363,814 Excess (deficiency) of revenues over expenditures (2,424,018) - (67,594) (138,057) (27,771) (2,657,440) OTHER FINANCING SOURCES (USES) Transfers in - interaccount - - - 108,468 - 108,468 Transfers out - interaccount (108,468) - - - - (108,468) Transfers in 8,067,766 - 199,110 113,146 50,000 8,430,022 Transfers out (5,728,690) - - - - (5,728,690) Total other financing sources and uses 2,230,608 - 199,110 221,614 50,000 2,701,332 Net change in fund balances (193,410) - 131,516 83,557 22,229 43,892 Fund balances - beginning 1,821,718 195 (131,873) (65,475) 170,415 1,794,980 Fund balances - ending $ 1,628,308 $ 195 $ (357) $ 18,082 $ 192,644 $ 1,838,872 81 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Combining Balance Sheet - Non-Major Governmental Funds - June 30, 2020 SPECIAL REVENUE FUNDS FISHING STREET AND DRUG FORFEITURE SUMMER RECREATION RFC 07-09 MDA-HOUSING POLICE LICENSE FUND ALLEY FUND PROGRAM GRANT FUND GRANT FUND CONSTRUCTION FUND GRANTS ASSETS Cash and cash equivalents $ 71,792 $ 1,068,581 $ 7,806 $ 293,973 $ 733,852 $ - $ 91,716 $ 28,682 Investments - - - - 34,235 - - - Accounts receivable - - - - 1,750 - - - Due from other governments - 8,848 5,867 - - - - - Due from other funds - 38,404 - - - - - - Total assets $ 71,792 $ 1,115,833 $ 13,673 $ 293,973 $ 769,837 $ - $ 91,716 $ 28,682 LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Liabilities: Accounts payable and accrued liabilities $ - $ 116,549 $ - $ 17,324 $ 120,742 $ - $ - $ 659 Wages payable - - - 8,264 - - - - Due to other funds - - - - - - - - Total liabilities - 116,549 - 25,588 120,742 - - 659 Deferred Inflows: Deferred revenue - - - - - - - - Fund balances: Restricted 71,792 - 13,673 268,385 - - 91,716 28,023 Commited - 999,284 - - - - - - Assigned - - - - - - - - Unassigned - - - - 649,095 - - - Total fund balances 71,792 999,284 13,673 268,385 649,095 - 91,716 28,023 Total liabilities, deferred inflows and fund balances $ 71,792 $ 1,115,833 $ 13,673 $ 293,973 $ 769,837 $ - $ 91,716 $ 28,682 (continued) 82 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Combining Balance Sheet - Non-Major Governmental Funds - June 30, 2020, 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 $ 158,823 $ 93,088 $ 67,776 $ 3,065,120 $ 190,623 $ 42,041 $ 5,913,873 Investments - - - - - - 34,235 Accounts receivable - - - 86,622 - - 88,372 Due from other governments 55,410 - - - - - 70,125 Due from other funds - - - 6,657 - - 45,061 Total assets $ 214,233 $ 93,088 $ 67,776 $ 3,158,399 $ 190,623 $ 42,041 $ 6,151,666 LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Liabilities: Accounts payable and accrued liabilities $ - $ - $ - $ 432,588 $ - $ - $ 687,862 Wages payable - - - - - - 8,264 Due to other funds - - - 38,404 - - 38,404 Total liabilities - - - 470,992 - - 734,530 Deferred Inflows: Deferred revenue 55,410 - - - - - 55,410 Fund balances: Restricted 158,823 93,088 67,776 - 190,623 42,041 1,025,940 Commited - - - - - - 999,284 Assigned - - - 2,687,407 - - 2,687,407 Unassigned - - - - - - 649,095 Total fund balances 158,823 93,088 67,776 2,687,407 190,623 42,041 5,361,726 Total liabilities, deferred inflows and fund balances $ 214,233 $ 93,088 $ 67,776 $ 3,158,399 $ 190,623 $ 42,041 $ 6,151,666 83 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance – Nonmajor Governmental Funds – Year Ended June 30, 2020 SPECIAL REVENUE FUNDS SUMMER MDA-HOUSING FISHING STREET AND DRUG FORFEITURE RECREATION RFC 07-09 CONSTRUCTION POLICE LICENSE FUND ALLEY FUND PROGRAM GRANT FUND GRANT FUND FUND GRANTS REVENUES Taxes $ - $ - $ - $ - $ - $ - $ - $ - Intergovernmental 5,000 114,367 34,376 - 408,575 - - 10,000 Charges for services - - - 194,775 - - - - Investment income - - - - - - - - Miscellaneous - 4,009 - - 48,188 - - 12,220 Total revenues 5,000 118,376 34,376 194,775 456,763 - - 22,220 EXPENDITURES Current: General government - - - - 29,878 - - - Public safety - - 769 - 99,905 - - 9,745 Public works - 230,941 - - 419,012 - - - Culture and recreation - - - 163,681 215,741 - - - Capital Outlay - 1,035,764 22,389 - - - - - Debt Service Principal retirement - 10,141 - - - - - - Interest and fiscal charges - 717 - - - - - - Total Expenditures - 1,277,563 23,158 163,681 764,536 - - 9,745 Revenues over (under) expenditures 5,000 (1,159,187) 11,218 31,094 (307,773) - - 12,475 OTHER FINANCING SOURCES (USES) Transfers in - 143,500 - - 1,255,956 - - - Transfers out - (29,788) - - - (1,095) - - Total other financing sources (uses) - 113,712 - - 1,255,956 (1,095) - - Net change in fund balances 5,000 (1,045,475) 11,218 31,094 948,183 (1,095) - 12,475 Fund balances - beginning 66,792 2,044,759 2,455 237,291 (299,088) 1,095 91,716 15,548 Fund balances - ending $ 71,792 $ 999,284 $ 13,673 $ 268,385 $ 649,095 $ - $ 91,716 $ 28,023 (continued) 84 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance – Nonmajor Governmental Funds – Year Ended June 30, 2020, 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 $ 16,489 $ - $ - $ 585,953 $ - $ - $ 602,442 Intergovernmental - - - - - - 572,318 Charges for services - 8,294 - - - - 203,069 Investment earnings - - - 717 - - 717 Miscellaneous - - - - - - 64,417 Total revenues 16,489 8,294 - 586,670 - - 1,442,963 EXPENDITURES Current: General government - - - - - - 29,878 Public safety - - - - - - 110,419 Public works - - - - - - 649,953 Culture and recreation - - - - 1 - 379,423 Capital Outlay - 4,876 - 1,625,528 - - 2,688,557 Debt Service Principal retirement - - - - - - 10,141 Interest and fiscal charges - - - - - - 717 Total Expenditures - 4,876 - 1,625,528 1 - 3,869,088 Excess (deficiency) of revenues over expenditures 16,489 3,418 - (1,038,858) (1) - (2,426,125) OTHER FINANCING SOURCES (USES) Transfers in - - - 748,266 163,479 - 2,311,201 Transfers out - (17,254) - (147,105) - - (195,242) Total other financing sources and uses - (17,254) - 601,161 163,479 - 2,115,959 Net change in fund balances 16,489 (13,836) - (437,697) 163,478 - (310,166) Fund balances - beginning 142,334 106,924 67,776 3,125,104 27,145 42,041 5,671,892 Fund balances - ending $ 158,823 $ 93,088 $ 67,776 $ 2,687,407 $ 190,623 $ 42,041 $ 5,361,726 85 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Combining Schedule of Net Position – Special Utility Authority Accounts – June 30, 2020 Miami Special Utility Authority Accounts Utility Improvement Stormwater Rainy Day Public Utilities Account Account Account Total ASSETS Current assets: Cash and cash equivalents $ 3,113,905 $ (2,828,757) $ 391,971 $ 2,691,899 $ 3,369,018 Cash and cash equivalents, restricted 625,432 7,076,540 - - 7,701,972 Investments - - - 1,451,458 1,451,458 Accounts receivable, net 3,657,633 - - - 3,657,633 Other receivable 436 - - - 436 Accrued interest receivable 809 - - - 809 Inventory 1,277,240 - - - 1,277,240 Due from other accounts 196,674 - - - 196,674 Due from other funds 29,755 - - - 29,755 Total current assets 8,901,884 4,247,783 391,971 4,143,357 17,684,995 Non-current assets: Cash and cash equivalents, restricted 1,195 - - - 1,195 Investments, restricted 196,646 - - - 196,646 Capital assets: Land, construction in progress, and water rights 4,113,412 - - - 4,113,412 Other capital assets, net of accumulated depreciation 16,463,189 - - - 16,463,189 Total non-current assets 20,774,442 - - - 20,774,442 Total assets 29,676,326 4,247,783 391,971 4,143,357 38,459,437 DEFERRED OUTFLOW OF RESOURCES Deferred amounts related to pension 541,454 - - - 541,454 Deferred amounts related to OPEB 238,463 - - - 238,463 Deferred amounts related to GRDA settlement 111,119 - - - 111,119 Total deferred outflow of resources 891,036 - - - 891,036 LIABILITIES Current liabilities: Accounts payable and accrued liabilities 1,873,921 560,286 - - 2,434,207 Wages payable 167,753 - - - 167,753 Due to other accounts - - 196,674 - 196,674 Due to other funds 86,495 - - - 86,495 Accrued interest payable 23,442 106,885 - - 130,327 Accrued compensated absences 15,959 - 385 - 16,344 Refundable deposits 38,195 - - - 38,195 Capital lease payable 329,194 - - - 329,194 Revenue bond payable - 635,000 - - 635,000 Notes payable 749,023 - - - 749,023 Total current liabilities 3,283,982 1,302,171 197,059 - 4,783,212 Non-current liabilities: Accrued compensated absences 144,682 - 3,469 - 148,151 Net pension liability 1,763,490 - - - 1,763,490 Total OPEB liability 1,092,568 - - - 1,092,568 Refundable deposits 342,597 - - - 342,597 Capital lease payable 189,261 - - - 189,261 Revenue bond payable - 7,362,908 - - 7,362,908 Notes payable, net 2,487,397 - - - 2,487,397 Total non-current liabilities 6,019,995 7,362,908 3,469 - 13,386,372 Total liabilities 9,303,977 8,665,079 200,528 - 18,169,584 DEFERRED INFLOW OF RESOURCES Deferred amounts related to pensions 479,613 - - - 479,613 Deferred amounts related to OPEB 603,277 - - - 603,277 Total deferred inflow of resources 1,082,890 - - - 1,082,890 NET POSITION Net investment in capital assets 16,870,766 (7,997,908) - - 8,872,858 Restricted for debt service 182,575 121,221 - - 303,796 Unrestricted 3,127,154 3,459,391 191,443 4,143,357 10,921,345 Total net position $ 20,180,495 $ (4,417,296) $ 191,443 $ 4,143,357 $ 20,097,999 86 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Combining Schedule of Revenues, Expenses and Changes in Net Position – Special Utility Authority Accounts - Year Ended June 30, 2020 Miami Special Utility Authority Accounts Utility Improvement Stormwater Rainy Day Public Utilities Account Account Account Total REVENUES Charges for services $ 25,567,880 $ - $ - $ - $ 25,567,880 Fees, licenses and permits - - 132,409 - 132,409 Miscellaneous 537,704 - - - 537,704 Total operating revenues 26,105,584 - 132,409 - 26,237,993 OPERATING EXPENSES Personal services 3,728,494 - 76,301 - 3,804,795 Materials and supplies 10,287,553 (443) 39,264 - 10,326,374 Other services and charges 3,138,548 37,227 16,160 - 3,191,935 Depreciation expense 1,597,398 - - - 1,597,398 Total operating expenses 18,751,993 36,784 131,725 - 18,920,502 Operating income (loss) 7,353,591 (36,784) 684 - 7,317,491 NON-OPERATING REVENUES (EXPENSES) Investment income 4,698 102,680 - 31,007 138,385 Miscellaneous 95,911 1,400 - 11,695 109,006 Interest expense and fiscal charges (83,241) (276,602) - - (359,843) Total non-operating revenue (expenses) 17,368 (172,522) - 42,702 (112,452) Income (loss) before contrbutions and transfers 7,370,959 (209,306) 684 42,702 7,205,039 Contributed assets- governmental activities 1,458,957 - - - 1,458,957 Transfers in, interaccount 4,033,506 907,000 1,354 372,232 5,314,092 Transfers out, interaccount (1,280,586) (4,033,506) - - (5,314,092) Transfers in 6,657,933 - - - 6,657,933 Transfers out (10,844,425) - - (512,256) (11,356,681) Change in net position 7,396,344 (3,335,812) 2,038 (97,322) 3,965,248 Total net position - beginning 12,784,151 (1,081,484) 189,405 4,240,679 16,132,751 Total net position - ending $ 20,180,495 $ (4,417,296) $ 191,443 $ 4,143,357 $ 20,097,999 87 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Combining Schedule of Cash Flows – Special Utility Authority Accounts - Year Ended June 30, 2020 Miami Special Utility Authority Accounts Utility Improvement Stormwater Rainy Day Public Utilities Account Account Account Total CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 25,953,124 $ 1,400 $ 132,409 $ 11,695 $ 26,098,628 Payments to suppliers (14,128,904) 522,502 (55,424) - (13,661,826) Payments to employees (3,749,252) - (72,447) - (3,821,699) Receipts from other funds - - 55,426 - 55,426 Payments to other funds (56,895) (269,964) - - (326,859) Receipts of customer meter deposits 169,465 - - - 169,465 Refunds of customer meter deposits (204,485) - - - (204,485) Net cash provided by operating activities 7,983,053 253,938 59,964 11,695 8,308,650 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds 6,657,933 - - - 6,657,933 Transfers to other funds (10,844,425) - - (512,256) (11,356,681) Interaccount transfer in - 907,000 1,354 372,232 1,280,586 Interaccount transfer out (1,280,586) - - - (1,280,586) Net cash provided by (used in) noncapital financing activities (5,467,078) 907,000 1,354 (140,024) (4,698,748) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital assets purchased (803,759) (4,033,506) - - (4,837,265) Principal paid on debt (2,607,085) (615,000) - - (3,222,085) Premium on debt issued 129,341 - - - 129,341 Note proceeds 1,911,350 - - - 1,911,350 Interest and fiscal agent fees paid on debt (116,800) (282,044) - - (398,844) Net cash provided by (used in) capital and related financing activities (1,486,953) (4,930,550) - - (6,417,503) CASH FLOWS FROM INVESTING ACTIVITIES Sale (Purchase) of investments (4,201) - - (31,007) (35,208) Interest and dividends 4,698 102,680 - 31,007 138,385 Net cash provided by investing activities 497 102,680 - - 103,177 Net increase (decrease) in cash and cash equivalents 1,029,519 (3,666,932) 61,318 (128,329) (2,704,424) Balances - beginning of year 2,711,013 7,914,715 330,653 2,820,228 13,776,609 Balances - end of year $ 3,740,532 $ 4,247,783 $ 391,971 $ 2,691,899 $ 11,072,185 Reconciliation to Statement of Net Position: Cash and cash equivalents $ 3,113,905 $ (2,828,757) $ 391,971 $ 2,691,899 $ 3,369,018 Restricted cash and cash equivalents - current 625,432 7,076,540 - - 7,701,972 Restricted cash and cash equivalents - noncurrent 1,195 - - - 1,195 Total cash and cash equivalents, end of year $ 3,740,532 $ 4,247,783 $ 391,971 $ 2,691,899 $ 11,072,185 Reconciliation of operating income (loss) to net cash provided by (used in) operating activities: Operating income (loss) $ 7,353,591 $ (36,784) $ 684 $ - $ 7,317,491 Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation expense 1,597,398 - - - 1,597,398 Other nonoperating revenue 95,911 1,400 - 11,695 109,006 Change in assets and liabilities: Receivables, net (248,371) - - - (248,371) Due from other funds (56,895) (269,964) - - (326,859) Inventory (273,111) - - - (273,111) Deferred outflows related to pension 46,536 - - - 46,536 Deferred outflows related to OPEB (197,528) - - - (197,528) Deferred outflows related to GRDA Settlement 15,893 15,893 Accounts payable (445,585) 559,286 - - 113,701 Due to other funds - - 55,426 - 55,426 Due to employees 48,477 - - - 48,477 Refundable deposits (35,020) - - - (35,020) Total OPEB liability 53,007 - - - 53,007 Net pension obligation (156,131) - - - (156,131) Accrued compensated absences 35,198 - 3,854 - 39,052 Deferred inflows related to OPEB 153,652 - - - 153,652 Deferred inflows related to pension (3,969) - - - (3,969) Net cash provided by operating activities $ 7,983,053 $ 253,938 $ 59,964 $ 11,695 $ 8,308,650 Noncash activities: Assets contributed by governmental activities $ 1,458,957 $ - $ - $ - $ 1,458,957 Asset acquired by capital lease $ 285,663 $ - $ - $ - $ 285,663 $ 1,744,620 $ - $ - $ - $ 1,744,620 88 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Combining Statement of Net Position – Internal Service Funds – June 30, 2020 Internal Service Funds Worker's Health Compensation Unemployment Insurance Fund Fund Fund Total ASSETS Current assets: Cash and cash equivalents $ 1,341,987 $ 196,731 $ 449,075 $ 1,987,793 Investments 130,702 - - 130,702 Other receivable 395,349 - - 395,349 Due from other funds 208,585 - - 208,585 Total current assets 2,076,623 196,731 449,075 2,722,429 Total assets 2,076,623 196,731 449,075 2,722,429 LIABILITIES Current liabilities: Accounts payable and accrued liabilities - - 560 560 Claims liability 503,243 13,886 107,697 624,826 Due to other funds - - 208,585 208,585 Total current liabilities 503,243 13,886 316,842 833,971 Total liabilities 503,243 13,886 316,842 833,971 NET POSITION Unrestricted 1,573,380 182,845 132,233 1,888,458 Total net position $ 1,573,380 $ 182,845 $ 132,233 $ 1,888,458 89 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Combining Statement of Revenues, Expenses and Changes in Net Position – Internal Service Funds - Year Ended June 30, 2020 Internal Service Funds Worker's Compensation Unemployment Health Insurance Fund Fund Fund Total REVENUES Charges for services $ 331,714 $ 23,324 $ 1,552,764 $ 1,907,802 Miscellaneous 94,452 - (5,975) 88,477 Total operating revenues 426,166 23,324 1,546,789 1,996,279 OPERATING EXPENSES Other services and charges 131,707 - 370,480 502,187 Insurance claims and expense (35,924) 20,676 1,071,708 1,056,460 Total operating expenses 95,783 20,676 1,442,188 1,558,647 Operating income 330,383 2,648 104,601 437,632 NON-OPERATING REVENUES Investment income 2,872 - - 2,872 Total non-operating revenue 2,872 - - 2,872 Income before transfers 333,255 2,648 104,601 440,504 Transfers out (177,453) - - (177,453) Change in net position 155,802 2,648 104,601 263,051 Total net position - beginning 1,417,578 180,197 27,632 1,625,407 Total net position - ending $ 1,573,380 $ 182,845 $ 132,233 $ 1,888,458 90 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Combining Statement of Cash Flows – Internal Service Funds - Year Ended June 30, 2020 WORKER'S HEALTH COMPENSATION UNEMPLOYMENT INSURANCE FUND FUND FUND TOTALS CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 929,340 $ 23,324 $ 1,585,286 $ 2,537,950 Payments to suppliers (131,707) - (369,920) (501,627) Payments to other funds - - 208,585 208,585 Payments from other funds (208,585) - - (208,585) Claims and benefits paid (677,889) (6,790) (1,057,578) (1,742,257) Net Cash Provided by (used in) Operating Activities (88,841) 16,534 366,373 294,066 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers to other funds (177,453) - - (177,453) Net Cash Provided by (Used in) Non-Capital Financing Activities (177,453) - - (177,453) CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends 2,872 - - 2,872 Sale (purchase) of investments (2,872) - - (2,872) Net Cash Provided by Investing Activities - - - - Net Increase (decrease) in Cash and Cash Equivalents (266,294) 16,534 366,373 116,613 Balances - beginning of the year 1,608,281 180,197 82,702 1,871,180 Balances - end of the year $ 1,341,987 $ 196,731 $ 449,075 $ 1,987,793 Reconciliation to Statement of Net Position: Cash and cash equivalents $ 1,341,987 $ 196,731 $ 449,075 $ 1,987,793 Total cash and cash equivalents $ 1,341,987 $ 196,731 $ 449,075 $ 1,987,793 Reconciliation of operating income to net cash provided by (used in) operating activities: Operating income $ 330,383 $ 2,648 $ 104,601 $ 437,632 Change in assets and liabilities: Receivables, net 503,174 - 38,497 541,671 Due from other fund (208,585) (208,585) Accounts payable - 560 560 Due to other funds - - 208,585 208,585 Claims liability (713,813) 13,886 14,130 (685,797) Net Cash Provided by (used in) Operating Activities $ (88,841) $ 16,534 $ 366,373 $ 294,066 91 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Combining Schedule of Cash Flows – Discretely Presented Component Units - Year Ended June 30, 2020 MCFA MDRA MIPFA Total CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 100,105 $ 262,675 $ 63,964 $ 426,744 Payments to suppliers (91,246) (177,691) (3,336) (272,273) Payments to employees - (94,210) - (94,210) Net Cash Provided by (used in) Operating Activities 8,859 (9,226) 60,628 60,261 CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends - - 137 137 Net Cash Provided by Investing Activities - - 137 137 Net Increase (decrease) in Cash and Cash Equivalents 8,859 (9,226) 60,765 60,398 Balances - beginning of the year 167,394 28,579 111,358 307,331 Balances - end of the year $ 176,253 $ 19,353 $ 172,123 $ 367,729 Reconciliation to Statement of Net Position: Cash and cash equivalents $ 176,253 $ 19,353 $ 172,123 367,729 Total cash and cash equivalents $ 176,253 $ 19,353 $ 172,123 $ 367,729 Reconciliation of operating income (loss) to net cash provided by (used in) operating activities: Operating income (loss) $ (285,019) $ (111,395) $ 31,903 $ (364,511) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation expense 251,697 2,525 28,713 282,935 Other nonoperating revenue 493 112,883 - 113,376 Change in assets and liabilities: Other receivable 66,468 - - 66,468 Accounts payables (24,780) (13,083) 12 (37,851) Accrued compensated absences - (156) - (156) Net Cash Provided by (used in) Operating Activities $ 8,859 $ (9,226) $ 60,628 $ 60,261 92 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 Schedule of Federal Awards City of Miami, Oklahoma SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended June 30, 2020 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 English Language Instruction 45.310 F-19-122 $ 5,000 $ 3,951 Health literacy 45.310 F-19-037 9,000 5,084 Subtotal Grants to States 45.310 14,000 9,035 Pass through Oklahoma Humanities Council Promotion of the Humanities 45.129 Y20.011 978 891 Promotion of the Humanities 45.129 Y19.057 1,000 1,000 Total Oklahoma Humanities Council 1,978 1,891 Total Institute of Museum and Library Services 15,978 10,926 Department of the Interior Pass through Oklahoma Department of Interior Outdoor Recreation Acquistion, Development and Planning 15.916 40-01231 291,825 17,885 Department of Homeland Security . Assistance to Firefighters grant 97.044 EMW-2017-FO-03596 8,200 392 Pass through Oklahoma Emergency Management Saferoom 97.039 FEMA 4256 192,000 16,000 Total Department of Homeland Security 200,200 16,392 Department of Agriculture Community Facilities Loans and grants 10.766 USDA 50,000 50,000 Department of Justice State and Local HIDTA Task Force Grant 16.809 HIDTA Treas 303 18,344 15,352 JAG 16.017 LLE-2019_MIAMIK CI-0056 10,000 10,000 Total Department of Justice 28,344 25,352 US Department of the Treasury Coronavirus Relief Fund 21.019 N/A 4,055 4,055 Total Federal Awards $ 590,402 $ 124,610 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 the Uniform Guidance. 93 CITY OF MIAMI, OKLAHOMA ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2020 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 The Honorable Mayor and Members of the City Council 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, 2020, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated December 28, 2020. Other auditors audited the financial statements of the Miami Industrial Authority (“MIDA”), as described in our report on the City’s financial statements. This report does not include the results of the other auditor’s testing of internal controls over financial reporting or compliance and other matters that are reported 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. 95 309 N. Bryant Ave. • Edmond, OK 73034 • 405.348.0615 • Fax 405.348.0931 • www.jmacpas.com Member of AICPA and OSCPA 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. 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 City’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 City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. December 28, 2020 96 CITY OF MIAMI, OKLAHOMA SCHEDULE OF FINDINGS AND RESPONSES Year Ended June 30, 2020 None in the current year. 97 CITY OF MIAMI, OKLAHOMA SCHEDULE OF PRIOR YEAR FINDINGS AND RESPONSES Year Ended June 30, 2020 Finding 2019-001 Negative Fund Balances Criteria: State law does not permit the City to incur deficit fund balances. Condition: At June 30, 2019, the Grant Fund reported a deficit fund balance of $299,088. Cause: Allowable expenditures incurred by the City had not been reimbursed by the granting agency which resulted in a deficit fund balance at year-end. Effect: Delays in requesting or receiving grant reimbursements can cause negative fund balances until those funds are received by the City from the granting agency. Recommendation: We recommend that the City ensure policies are in place to monitor its fund balance when large unreimbursed grant funds exist. City’s Response: The Route 66 splash pad project is a reimbursable grant. The project period was from September 2017 through December 2019. The work for the splash pad was performed throughout FY 18- 19 and both completion and reimbursement were expected that fiscal year. However, due to various construction errors/issues the project continued. Reimbursement is expected in the 3rd quarter of FY 19- 20. The grant fund is a participant in pooled cash, which allows use of pooled cash reserves until reimbursement occurs. In the future we will be more cautious in reconciling regarding transfers of matching funds. Current Year Status: This finding has been corrected in the current period. 98