city of noble, oklahoma...noble utilities authority - a public trust created pursuant to 60 o.s. ₰...
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City of Noble, Oklahoma Financial Statements
Year-End June 30, 2018
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CITY OF NOBLE, OKLAHOMAJune 30, 2018
TABLE OF CONTENTS
Page
Independent Auditor's Report A - 1
Other Information - Management's Discussion and Analysis A - 3
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements
Statement of Net Position - Modified Cash Basis B - 1
Statement of Activities - Modified Cash Basis B - 2
Governmental Fund Financial Statements
Balance Sheet - Modified Cash Basis B - 3
Statement of Revenues, Expenditures and Changes in Fund Balances
- Modified Cash Basis B - 4
Reconciliation of Governmental Fund and Government-Wide Financial Statements
- Modified Cash Basis B - 5
Proprietary Fund Financial Statements:
Statement of Net Position - Modified Cash Basis B - 6
Statement of Revenues, Expenses and Changes in Fund Net Position - Modified Cash Basis B - 7
Statement of Cash Flows - Modified Cash Basis B - 8
Notes to the Basic Financial Statements B - 9
Supplementary and Other Information
Budgetary Comparison Information
Budgetary Comparison Schedules-Modified Cash Basis C - 1
Footnotes to Budgetary Comparison Schedules C - 3
Combining Schedules of General Fund Accounts
Combining Balance Sheet - General Fund Accounts - Modified Cash Basis C - 4
Combining Statement of Revenues, Expenditures and Changes in Fund Balance C - 5
- Modified Cash Basis
Combining Non-Major Governmental Fund Statements
Combining Balance Sheet - Modified Cash Basis C - 6
Combining Statement of Revenues, Expenditures and Changes in Fund Balances C - 7
- Modified Cash Basis
Federal and State Awards Information
Schedule of Federal and State Awards - Modified Cash Basis D - 1
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 the Accompanying Financial
Statements Performed in Accordance With Government Auditing Standards E - 1
Schedule of Findings and Questioned Costs E - 3
Disposition of the Prior Year Schedule of Findings and Questioned Costs E - 4
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INDEPENDENT AUDITOR'S REPORT Members of the City Council City of Noble, Oklahoma Report on the Financial Statements We have audited the accompanying modified cash basis financial statements of the government activities, the business-type activities, each major fund, and aggregate remaining fund information of the City of Noble, Oklahoma as of and for the year ended June 30, 2018, and the related notes to the financial, 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 the modified cash basis of accounting described in Note 1.C.; this includes determining that the modified cash basis of accounting is an acceptable basis for preparation of the financial statements in the circumstances. Management is also responsible for 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 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 of 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 principles 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, the financial statements referred to above present fairly, in all material respects, the respective modified cash basis financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Noble, Oklahoma, as of June 30, 2018, and the respective changes in modified cash basis financial position, and where applicable, cash flows thereof for the year then ended in accordance with the modified cash basis of accounting described in Note 1.C.
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Basis of Accounting We draw attention to Note 1.C.of the financial statements, which describes the basis of accounting. The financial statements are prepared on a modified cash basis of accounting which is a basis of accounting other than accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to that matter. Other Matters Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Noble, Oklahoma basic financial statements. The Supplementary and Other Information, as listed in the table of contents, are presented for additional analysis and are not a required part of the basic financial statements. The combining statements of the general fund and the non-major fund financial statements, and the federal and state awards information are the responsibility of management, and were derived from and related 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 combining statements of the general fund and the non-major fund financial statements, and the federal and state awards information are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The Management’s Discussion and Analysis starting on page A-3 and the budgetary comparison information on pages C-1, C-2 and C-3 which are the responsibility of management, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Governmental Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 15, 2018, 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 the effectiveness of the City’s 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.
Chickasha, Oklahoma November 15, 2018
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CITY OF NOBLE Rose Rock Capital of the World
Management Discussion and Analysis of the Annual Financial Report
As of and for the Year ended June 30, 2018
The management of the City of Noble is pleased to provide this annual financial report to its citizens, taxpayers and other report users to demonstrate its accountability and communicate the City’s financial condition and activities as of and for the year ended June 30, 2018. Management of the City is responsible for the fair presentation of this annual report, for maintaining appropriate internal controls over financial reporting, and for complying with applicable laws, regulations and provisions on grants and contracts. The City reports its financial statements and schedules on a modified cash basis which is a comprehensive basis of accounting other than generally accepted accounting principles. All financial analyses in this report must be considered within the context of the limitations of the modified cash basis of accounting. FINANCIAL HIGHLIGHTS
As reported on a modified cash basis, the City’s total net position increased by $790,312 and the assets of the City exceed its liabilities at June 30, 2018, by $10,062,665 (net position). Of this amount, $1,515,388 (unrestricted net position) is available to meet the government’s ongoing needs.
For the fiscal year ended June 30, 2018 the City’s governmental funds reported combined ending fund balances on a modified cash basis of $556,382 compared to $687,828 in FY 2017 - a decrease of $131,446 or 19.11%.
At the year ended June 30, 2018, unassigned fund balance on a modified cash basis for the General Fund was $248,385 or 7.60% of General Fund revenues.
ABOUT THE CITY
The City of Noble is an incorporated municipality with a population of approximately 6,400 located in central Oklahoma. The City is a Council/Manager form of government and operates under a charter that provides for three branches of government:
Legislative – the City Council is a five-member governing body of which the council members are elected by wards and the mayor is elected by the citizens at large
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 provides typical municipal services such as public safety, health and welfare, streets and highways, parks and recreation, through its Utility Authority certain utility services including water, wastewater and sanitation and through the EMS District provides ambulance services.
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The City’s Financial Reporting Entity
This annual report includes all activities of which the City of Noble City Council is financially accountable. These activities, defined as the City’s financial reporting entity, are operated with separate legal entities that make up the primary government. The City’s financial reporting entity includes the following separate legal entities.
The City of Noble - an incorporated City that operates the public safety, streets, health and welfare, culture and recreation, and administrative activities of the City.
Noble Utilities Authority - A public trust created pursuant to 60 O.S. ₰ 176 to finance, develop, and operate the utility services and physical facilities (NUA).
Noble Economic Development Authority - The trust has as its purpose to stimulate economic growth and development of the beneficiary City (NEDA). The NEDA is financially inactive.
Noble EMS District - The Noble EMS District was formed under the provisions of the Oklahoma Constitution, Article 10, Section 9C for the purpose of providing ambulance service within a district comprised of the municipal limits of the City of Noble, Oklahoma.
In addition, as required by state law, all debt obligations incurred by the trusts must be approved by two-third vote of the City Council. This is considered sufficient imposition of will to demonstrate financial accountability and to include the trust within the City’s financial reporting entity. The public trust does not issue separate annual financial statements.
OVERVIEW OF THE FINANCIAL STATEMENTS The financial statements presented herein include all the activities of the City of Noble (the “City”) and the Noble Utilities Authority (the “NUA”) and the EMS District. Included in this report are government-wide statements for each of the two categories of activities – government and business type. The government-wide financial statements present the complete financial picture of the City using the modified cash basis of accounting. They present the governmental and business-type activities separately and combined. For governmental activities, these statements tell how these services were financed in the short term as well as what remains for future spending. Fund financial statements also report the City’s operations in more detail that the government-wide statements by providing information about the City’s most significant funds. These statements include all assets of the City (including infrastructure) as well as all liabilities (including long-term debt), within the context of the modified cash basis of accounting. Reporting the City as a Whole The Statement of Net Position and Statement of Activities
One of the most important questions to ask about the City’s finances is, “Has the City’s overall financial condition improved, declined or remained steady as a result of the year’s activities?” 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. You will need to consider other non-factors, however,
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such as changes in the City’s sales tax base, condition of the City’s roads, and quality of service to assess the overall health of the City. You will also need to keep in mind that these government-wide statements are prepared in accordance with the modified cash basis of accounting described above and include only those City assets and liabilities resulting from cash transactions. In the Statement of Net Position and Statement of Activities, we divide the City into two kinds of activities Governmental activities – Most of the City’s basic services are reported here, including the police, fire, administration, streets and ambulance services. Sales taxes, franchise fees, fines, ambulance fees and state and federal grants finance most of these activities; and Business-type activities – Activities where the City typically charges a fee to customers to help cover all or most of the costs of certain services it provides are reported here. The City’s water, wastewater, and sanitation are reported as business-type activities. Reporting the City’s Most Significant Funds – Fund Financial Statements Fund Financial Statements The fund financial statements provide detailed information about the City’s most significant (major) funds – not the City as a whole. Some funds are required to be established by State law and by debt covenants. However, the City Council may also establish certain other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using taxes, grants and other money. The City’s two kinds of funds – governmental and proprietary – use different accounting approaches. Governmental funds – All of the City’s basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end that are available for spending. Governmental funds report their activities on a modified cash 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 differences of results in the governmental fund financial statements to those in the government-wide financial statements are explained in a reconciliation following the governmental fund financial statement. Proprietary funds – The City operates two proprietary funds, the Noble Utility Authority (major fund) and the related meter deposit fund (non-major fund). When the City, through the Utility Authority, charges customers for the services it provides, these services are generally reported in the proprietary funds. Proprietary funds are reported on the modified cash basis of accounting and an economic resources measurement focus. For example, proprietary fund 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 are the Nobile Utility Authority that accounts for the operation of the water, wastewater and sanitation activities, and the related meter deposit fund accounts for customers’ utility deposits. Notes to the Financial Statements The notes provide additional information that is essential to gain an understanding of the data provided in the government-wide and fund financial statements. The Notes to the Financial Statements can be found on pages B-9 through B-26 of this report.
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Other Information In addition to the basic financial statements and accompanying notes, this report also presents a Budgetary Comparison Schedule for the General Fund and major governmental funds, combining and individual fund financial statements and schedules, a federal and state award schedule. THE CITY AS A WHOLE
For the year ended June 30, 2018, net position on a modified cash basis for the governmental and business-type activities increased $697,779.
Net Position (Modified Cash Basis)
June 30, 2018
Following is a summary of net position reported on a modified cash basis for the City of Noble.
2018 2017 2018 2017 2017 2017
Current and other assets $ 559,563 $ 689,587 $ 1,683,919 $ 1,281,630 $ 2,243,482 $ 1,971,217
Capital assets 4,947,609 4,873,613 5,069,637 5,199,351 10,017,246 10,072,964
Total Assets 5,507,172 5,563,200 6,753,556 6,480,981 12,260,728 12,044,181
Current Liabilities 169,504 116,491 232,054 205,839 401,558 322,330
Long-term debt 982,053 1,148,608 814,452 1,300,889 1,796,505 2,449,497
Total Liabilitites 1,151,557 1,265,099 1,046,506 1,506,728 2,198,063 2,771,827
Net position:
Invested in capital assets
net of debt 3,799,232 3,610,273 4,211,216 3,866,433 8,010,448 7,476,706
Restricted 239,053 416,154 297,776 439,863 536,829 856,017
Unrestricted 317,330 271,674 1,198,058 667,957 1,515,388 939,631
Total Net Position $ 4,355,615 $ 4,298,101 $ 5,707,050 $ 4,974,253 $ 10,062,665 $ 9,272,354
NET POSITION
Governmental TotalBusiness-type
Activities Activities Government
The largest portion of the City’s net position reflects its investment in capital assets, less any related debt used to acquire those assets that is still outstanding. At year end, the net investment in capital assets amounted to $8,010,448. Although the City’s investment in its 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. Current assets of the governmental activities decreased approximately $130,024 or 19% due primarily to purchase of capital assets. Current assets of the business-type activities increased approximately $402,289 or 24% due primarily to increase of service revenues.
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Changes in Net Position (Modified Cash Basis)
Year Ended June 30, 2018
2018 2017 2018 2017 2018 2017
Revenues:
Program revenues:
Charges for services $ 874,042 $ 895,306 $ 2,295,052 $ 2,206,156 $ 3,169,094 $ 3,101,462
Operating grants & contributions 52,383 25,177 - - 52,383 25,177
Capital grants & contributions 103,067 29,161 - - 103,067 29,161
General revenues:
Taxes 2,099,504 1,932,323 - - 2,099,504 1,932,323
Intergovernmental 95,399 92,300 - - 95,399 92,300
Other general rev. 17,644 9,754 275,390 1,787 293,034 11,541
Total revenues 3,242,039 2,984,021 2,570,442 2,207,943 5,812,481 5,191,964
Program expenses:
Administration 349,971 340,166 - - 349,971 340,166
Public Safety 2,472,298 2,383,396 - - 2,472,298 2,383,396
General government 172,351 189,814 - - 172,351 189,814
Library 68,627 76,700 - - 68,627 76,700
Parks 29,560 31,862 - - 29,560 31,862
Streets 339,199 327,994 - - 339,199 327,994
Water - - 709,627 623,343 709,627 623,343
Sewer - - 502,992 511,219 502,992 511,219
Sanitation - - 347,684 339,951 347,684 339,951
Interest L-T debt 29,860 31,299 - - 29,860 31,299
Total expenses 3,461,866 3,381,231 1,560,303 1,474,513 5,022,169 4,855,744
Excess (deficiency)
before transfers (219,827) (397,210) 1,010,139 733,430 790,312 336,220
Transfers 277,342 76,982 (277,342) (76,982) - -
Increase (decrease)
in net position 57,515 (320,228) 732,797 656,448 790,312 336,220
CHANGES IN NET POSITION
Governmental Business-type Total
Activities Activities Government
Governmental Activities
Total Governmental Activity Revenues for 2018 showed an increase of $258,018 or 8.65% over the prior year. This is due mainly to increases in taxes and grants. Business-Type Activities
Total Business-type Activity Revenues for 2018 showed an increase of $362,499 or 16.4% over the prior year. This is due to an increase in utility services and a multi-year lease of $264,500.
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Net Revenue (Expense) of Governmental Activities
2018 2017 2018 2017
Administration $ 349,971 $ 340,166 $ (349,971) $ (340,166)
Public Safety 2,472,298 2,383,396 (1,596,206) (1,602,092)
Streets 339,199 327,994 (298,926) (288,557)
General Government 172,351 189,814 (85,744) (95,436)
Library 68,627 76,700 (68,627) (76,700)
Parks 29,560 31,862 (3,040) 2,663
Interest on Long-Term Debt 29,860 31,299 (29,860) (31,299)
Total Net Position $ 3,461,866 $ 3,381,231 $ (2,432,374) $ (2,431,587)
Total Expense Net Revenue
of Services (Expense) of Services
Net Revenue (Expense) of Business-Type Activities
2018 2017 2018 2017
Water $ 709,627 623,343 $ 290,868 $ 337,208
Sewer 502,992 511,219 117,970 85,739
Sanitation 347,684 339,951 325,911 308,696
Total Net Position $ 1,560,303 $ 1,474,513 $ 734,749 $ 731,643
Total Expense Net Revenue
of Services (Expense) of Services
A FINANCIAL ANALYSIS OF THE CITY’S FUNDS As the City completed its 2018 fiscal year, the governmental funds reported a combined fund balance of $556,382. For the year ended June 30, 2018, the General Fund’s total fund balance increased by $34,006. The proprietary funds reported a combined net position balance of $5,707,051. The net position of the Noble Utility Authority, increased by $732,798. Budgetary Highlights For the year ended June 30, 2018 the General Fund reported actual budgetary basis revenues over final estimates by $86,668 or a 2.16% positive variance. General Fund actual expenditures were under final appropriations by $606,218 or a 13.15% positive variance. Noble EMS Fund (major governmental fund) reported actual budgetary basis revenues under final estimates by $29,248 or a 3.75% negative variance and actual expenditures were under final appropriations by $93,390 or a 9.23% positive variance.
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CAPITAL ASSETS & DEBT ADMINISTRATION
Capital Assets
At the end of June 30, 2018, the City had approximately $10 million in capital assets (net of accumulated depreciation), as reported on a modified cash basis, including land, buildings, machinery and equipment, and park facilities. Below are details regarding the City’s capital assets as of June 30, 2018.
Capital Assets
(Net of accumulated depreciation)
2018 2017 2018 2017 2018 2017
Land $ 368,578 $ 368,578 $ 234,364 $ 234,364 $ 602,942 $ 602,942
Buildings 1,195,321 1,252,429 256,721 97,964 1,452,042 1,350,393
Utility Propery/Imprv &
Other Improvements 292,465 306,748 4,320,520 4,488,727 4,612,985 4,795,475
Vehicles & Equipment 1,139,021 893,769 258,035 259,091 1,397,056 1,152,860
Infrastructure 1,952,223 2,052,088 - - 1,952,223 2,052,088
Totals $ 4,947,608 $ 4,873,612 $ 5,069,640 $ 5,080,146 $ 10,017,248 $ 9,953,758
Governmental Business-Type
Activities Activities Total
This year’s more significant capital asset additions include the following:
Vehicles & Equipment $493,414
Buildings $162,501
Debt Administration At June 30, 2018 the City had $2,042,222 in debt outstanding reported on a modified cash basis, approximately a $592,186 decrease from prior year due to primarily to debt payments.
Long-Term Debt
2018 2017 2018 2017 2018 2017
Notes Payable $ - $ - $ 851,329 $ 1,300,889 $ 851,329 $ 1,300,889
Bonds Payable 1,095,000 1,165,000 - - 1,095,000 1,165,000
Capital Leases 47,883 90,302 42,516 70,179 90,399 160,481
State Obligation 5,494 8,038 - - 5,494 8,038
Totals $ 1,148,377 $ 1,263,340 $ 893,845 $ 1,371,068 $ 2,042,222 $ 2,634,408
Governmental Business-Type
Activities Activities Total
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ECONOMIC FACTORS AND NEXT YEAR’S ESTIMATE The following information outlines significant known factors that will affect subsequent year finances:
We expect Noble’s financial position to be a carbon copy of the last year. The regional economy remains strong and unemployment is still at historic lows. We anticipate small growth in sales tax revenues as well as service fees. Noble will continue to show a healthy growth in population driven mostly be new residential subdivisions. Commercial building vacancies are at an all-time low and new businesses are anticipated.
Noble’s cash reserves are healthy, so we will draw down reserves for a couple of large capital projects: A children’s playground, and a street overlay. Because we have paid off significant debt last year, we have the positive cash flow to finance a new digital water meter project and continue to lease purchase police and public works vehicles. We will continue conservative policies and make adjustments in spending if necessary.
Contacting the City’s Management
This financial report is intended to provide our citizens, taxpayers, customers and investors with a general overview of the City’s finances and to show the City’s accountability for the money it receives. If you have questions about this report or need additional information, we welcome you to contact the City Clerk’s office.
See disclaimer in independent auditor’s report.
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CITY OF NOBLE, OKLAHOMA
Statement of Net Position - Modified Cash Basis
June 30, 2018
Governmental Business-Type
Activities Activities Total
Assets
Cash and Cash Equivalents $ 312,161 $ 1,197,637 $ 1,509,798
Restricted Cash and Cash Equivalents 247,402 330,857 578,259
Restricted Investments - 120,000 120,000
Capitalized Interest - 35,425 35,425
Capital Assets:
Land and Other Non-depreciable Assets 368,578 234,364 602,942
Other capital assets, net 4,579,031 4,835,273 9,414,304
Total Assets 5,507,172 6,753,556 12,260,728
Liabilities
Other Liabilities 3,018 100 3,118
Due to Other Funds 162 (162) -
Due to Depositors - 152,722 152,722
Capital Leases - Current Portion 23,780 - 23,780
Notes Payable - Current Portion 142,544 79,394 221,938
Capital Leases - Due in more than one year 24,103 - 24,103
Notes Payable - Due in more than one year 957,950 814,452 1,772,402
Total Liabilities 1,151,557 1,046,506 2,198,063
Net Position
Invested in Capital Assets, net
of related debt 3,799,232 4,211,216 8,010,448
Restricted for:
EMS 141,557 - 141,557
Capital Improvement - 277,887 277,887
Parks 43,054 43,054
Debt Service 54,442 19,889 74,331
Unrestricted 317,330 1,198,058 1,515,388
Total Net Position $ 4,355,615 $ 5,707,050 $ 10,062,665
See accompanying notes to basic financial statements
B - 1
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Program Revenues
Operating Capital
Charges for Grants and Grants and Governmental Business-Type
Functions/Programs Expenses Services Contributions Contributions Activities Activities Total
Primary Government:
Governmental Activities:
Administration $ 349,971 $ - $ - $ - $ (349,971) $ - $ (349,971)
Public Safety 2,472,298 744,687 28,338 103,067 (1,596,206) - (1,596,206)
Streets 339,199 40,273 - - (298,926) - (298,926)
General Government 172,351 86,607 - - (85,744) - (85,744)
Library 68,627 - - - (68,627) - (68,627)
Parks 29,560 2,475 24,045 (3,040) - (3,040)
Interest Expense 29,860 - - - (29,860) - (29,860)
Total Governmental Activities 3,461,866 874,042 52,383 103,067 (2,432,374) - (2,432,374)
Business-Type Activities:
Water 709,627 1,000,495 - - - 290,868 290,868
Sewer 502,992 620,962 - - - 117,970 117,970
Sanitation 347,684 673,595 - - - 325,911 325,911
Total Business-Type Activities 1,560,303 2,295,052 - - - 734,749 734,749
Total Primary Government 5,022,169 3,169,094 52,383 103,067 (2,432,374) 734,749 (1,697,625)
General Revenues:
Taxes:
Sales Tax 1,415,257 1,415,257
Use Tax 149,366 149,366
Property Tax 255,263 255,263
Franchise Tax 259,209 259,209
E-911 Tax 20,409 20,409
Intergovernmental Revenue 95,399 95,399
Investment Income 2,823 2,095 4,918
Miscellaneous 14,821 273,295 288,116
Transfers - Internal Activity 277,342 (277,342) -
Total General Revenues and Transfers 2,489,889 (1,952) 2,487,937
Change in Net Position 57,515 732,797 790,312
Net Position - Beginning 4,298,100 4,974,253 9,272,353
Net Position - Ending $ 4,355,615 $ 5,707,050 $ 10,062,665
Net (Expenses) Revenue and Changes in Net Position
CITY OF NOBLE, OKLAHOMA
Statement of Activities - Modified Cash Basis
For the Year Ending June 30, 2018
See accompanying notes to basic financial statements
B - 2
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Noble Non Major Total
General EMS Governmental Governmental
Fund Fund Funds Funds
Assets
Cash and Cash Equivalents $ 232,404 $ 63,697 $ - $ 296,101
Restricted Cash and Cash Equivalents 51,402 - 195,999 247,401
Deposits with Insurance Pool 16,060 - - 16,060
Due from Other Funds - - - -
Total Assets 299,866 63,697 195,999 559,562
Liabilities
Court Bonds & Other Payables 3,018 - - 3,018
Due to Other Funds 162 - - 162
Total Liabilities 3,180 - - 3,180
Fund Balances
Non Spendable - - - -
Restricted 43,054 - 195,999 239,053
Committed - - - -
Assigned 5,247 63,697 - 68,944
Unassigned 248,385 - - 248,385
Total Fund Balances 296,686 63,697 195,999 556,382
Total Liabilities and Fund Balances $ 299,866 $ 63,697 $ 195,999 $ 559,562
CITY OF NOBLE, OKLAHOMA
Balance Sheet
Governmental Funds - Modified Cash Basis
June 30, 2018
See accompanying notes to basis financial statements
B - 3
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Noble Non Major Total
General EMS Governmental Governmental
Fund Fund Funds Funds
Revenues
Taxes $ 1,844,242 $ - $ 255,263 $ 2,099,505
Intergovernmental 212,554 - - 212,554
Charges for Services 40,273 607,971 - 648,244
Fines and Forfeitures 136,715 - - 136,715
Licenses and Permits 86,607 - - 86,607
Investment Income 1,954 131 737 2,822
Miscellaneous 61,950 16,650 - 78,600
Total Revenues 2,384,295 624,752 256,000 3,265,047
Expenditures
Current:
Administration 349,972 - - 349,972
Police 1,076,604 - - 1,076,604
Animal Control 64,089 - - 64,089
Fire/EMS 490,311 749,519 - 1,239,830
General Government 156,695 - - 156,695
Library 28,458 - - 28,458
Parks 15,583 - - 15,583
Streets 232,549 - - 232,549
Capital Outlay 103,056 - 262,176 365,232
Debt Service:
Principal 44,963 - 70,000 114,963
Interest Expense 1,753 - 28,107 29,860
Total Expenditures 2,564,033 749,519 360,283 3,673,835
Excess (Deficiency) of Revenues Over
(Under) Expenditures (179,738) (124,767) (104,283) (408,788)
Other Financing Sources (Uses)
Transfers In 1,629,001 153,687 - 1,782,688
Transfers Out (1,415,257) - (90,089) (1,505,346)
Total Other Financing Sources (Uses) 213,744 153,687 (90,089) 277,342
Net Change in Fund Balances 34,006 28,920 (194,372) (131,446)
Fund Balances - Beginning 262,680 34,777 390,371 687,828
Fund Balances - Ending $ 296,686 $ 63,697 $ 195,999 $ 556,382
CITY OF NOBLE, OKLAHOMA
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds - Modified Cash Basis
For the Year Ending June 30, 2018
See accompanying notes to financial statements
B - 4
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Reconciliation to Statement of Net Assets:
Fund balances of governmental funds $ 556,382
Amounts reported for governmental activities in the Statement of Net Assets are different because:
Capital assets used in governmental activities are not financial resources and, therefore are not
reported in the funds:
Capital assets 8,717,799
Accumulated depreciation (3,770,189)
Some liabilities are not due and payable in the current period and, therefore are not reported
in the funds:
Capital lease obligation (47,883)
State obligation payable (5,494)
General obligation bonds payable (1,095,000)
Net assets of governmental activities $ 4,355,615
Reconciliation to Statement of Activities:
Net change in fund balances of governmental funds $ (131,446)
Amounts reported for governmental activities on 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 449,310
Depreciation expense (352,305)
Revenues in the Statements of Activities that do not provide current financial resources are not
reported as revenues in the funds:
Loss on Disposal of Assets
Repayment of debt principal is an expenditure in the governmental funds, but the repayment
reduces long-term liabilities in the Statement of Net Assets:
Capital lease proceeds (23,008)
Capital lease obligation payments 42,419
State obligation payable 2,545
General obligation bonds principal payments 70,000
Change in net assets of governmental activities $ 57,515
CITY OF NOBLE, OKLAHOMA
Reconciliation of Governmental Fund and Government-Wide Financial Statements
Governmental Funds - Modified Cash Basis
June 30, 2018
See accompanying notes to financial statements
B - 5
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Non-Major Total
Noble Utilities Enterprise Proprietary
Authority Fund Funds
Assets
Current Assets:
Cash and Cash Equivalents $ 1,195,637 $ 2,000 $ 1,197,637
Restricted Cash and Cash Equivalents 297,775 33,082 330,857
Due from Other Funds 522 - 522
Total Current Assets 1,493,934 35,082 1,529,016
Noncurrent Assets:
Restricted Investments - 120,000 120,000
Capitalized Interest 35,425 35,425
Land and Other Non-depreciable Assets 234,364 234,364
Other Capital Assets, net of depreciation 4,835,273 4,835,273
Total Noncurrent Assets 5,105,062 120,000 5,225,062
Total Assets 6,598,996 155,082 6,754,078
Liabilities
Current Liabilities:
Other Deposits 100 - 100
Due to Other Funds - 360 360
Due to Depositors - 152,722 152,722
Capital Lease Obligations - - -
Notes Payable 79,394 - 79,394
Total Current Liabilities 79,494 153,082 232,576
Noncurrent Liabilities:
Capital Lease Obligations - - -
Notes Payable 814,452 - 814,452
Total Noncurrent Liabilities 814,452 - 814,452
Total Liabilities 893,946 153,082 1,047,028
Net Position
Invested in Capital Assets, net of related debt 4,211,216 - 4,211,216
Restricted for Debt Service 19,889 - 19,889
Restricted for Capital Improvements 277,887 - 277,887
Unrestricted 1,196,058 2,000 1,198,058
Total Net Position $ 5,705,050 $ 2,000 $ 5,707,050
CITY OF NOBLE, OKLAHOMA
Statement of Net Position
Proprietary Funds - Modified Cash Basis
June 30, 2018
Enterprise Funds
See accompaning notes to basic financial statements
B - 6
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Statement of Revenues, Expenses and Changes in Fund Net Position
Proprietary Funds - Modified Cash Basis
For the Year Ending June 30, 2018
Non-Major Total
Noble Utilities Enterprise Proprietary
Authority Fund Funds
Operating Revenues
Charges for Services:
Pledged:
Water revenue $ 912,341 $ - $ 912,341
Sewer revenue 549,157 - 549,157
Penalties 42,177 - 42,177
Miscellaneous fees 117,782 - 117,782
Unpledged:
Sanitation revenue 673,595 - 673,595
Total Operating Revenues 2,295,052 - 2,295,052
Operating Expenses
Administration 154,704 - 154,704
General Government 268,632 - 268,632
Water operations 293,526 - 293,526
Sewer operations 232,317 - 232,317
Sanitation operations 347,684 - 347,684
Depreciation expense 224,542 - 224,542
Total Operating Expenses 1,521,405 - 1,521,405
Operating Income (Loss) 773,647 - 773,647
Nonoperating Revenues (Expenses)
Investment income 2,095 - 2,095
Interest expense (38,898) - (38,898)
Grant revenue - - -
Miscellaneous revenue 273,796 - 273,796
Trustee fees (500) - (500)
Total Nonoperating Revenues (Expenses) 236,493 - 236,493
Net Income (Loss) Before Contributions and Transfers 1,010,140 - 1,010,140
Pledged as security for revenue notes:
Transfer In - Sales Tax 1,415,257 - 1,415,257
Transfers In - -
Transfers Out (1,692,599) - (1,692,599)
Change in Net Position 732,798 - 732,798
Net Position - Beginning 4,972,253 2,000 4,974,253
Net Position - Ending $ 5,705,051 $ 2,000 $ 5,707,051
CITY OF NOBLE, OKLAHOMA
Enterprise Funds
See accompanying notes to basic financial statements
B - 7
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Statement of Cash Flows
Proprietary Funds - Modified Cash Basis
For the Year Ending June 30, 2018
Non-Major Total
Noble Utilities Enterprise Proprietary
Authority Fund Funds
Cash Flows From Operating Activities
Receipts from customers $ 2,295,052 $ $ 2,295,052
Employees Paid (509,634) (509,634)
Vendors and others paid (787,229) (787,229)
Customer meter deposits receipts/refunds 17,162 17,162
Interfund receipts/payments (360) 360 -
Net Cash Provided by Operating Activities 997,829 17,522 1,015,351
Cash Flows From Noncapital Financing Activities
Miscellanoues revenues 273,794 273,794
Transfers from other funds 1,415,257 1,415,257
Transfers to other funds (1,692,599) - (1,692,599)
Net Cash Provided by Noncapital
Financing Activities (3,548) - (3,548)
Cash Flows From Capital and Related
Financing Activities
Purchases of capital assets (94,828) (94,828)
Loss on Asset Disposal - -
Loan Proceeds - -
Principal paid on debt (477,222) (477,222)
Fiscal charges paid on debt (500) (500)
Interest paid on debt (36,173) (36,173)
Net Cash Provided by (used in) Capital
and Related Financing Activities (608,723) - (608,723)
Cash Flows From Investing Activities
Interest received 2,095 2,095
Increase in investments - -
Net Cash Provided by Investing Activities 2,095 - 2,095
Net Increase in Cash and Cash Equivalents 387,653 17,522 405,175
Balance - Beginning of the Year 1,105,759 17,560 1,123,319
Balance - End of the Year 1,493,412 35,082 1,528,494
Reconciliation to Statement of Net Position
Cash and cash equivalents 1,195,637 2,360 1,197,997
Restricted cash and cash equivalents 297,775 32,722 330,497
Total cash and cash equivalents, end of year 1,493,412 35,082 1,528,494
Reconciliation of Operating Income (Loss) to
Net Cash Provided by Operating Activities:
Operating income (loss) 773,647 - 773,647
Adjustments to reconcile operating income to net
cash provided (used) by operating activities:
Depreciation and amortization 224,542 224,542
Changes in assets and liabilities: (360) 360 -
Due to depositors 17,162 17,162
Net Cash Provided by Operating Activities $ 997,829 $ 17,522 $ 1,015,351
CITY OF NOBLE, OKLAHOMA
Enterprise Funds
See accompanying notes to basic financial statements
B - 8
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CITY OF NOBLE, OKLAHOMA Notes to the Basic Financial Statements
For the Year Ended June 30, 2018
B - 9
Note 1 - Summary of Significant Accounting Policies
1.A. Financial Reporting Entity The City’s financial reporting entity includes the primary government (City of Noble), and its blended component units. This report includes all activities for which the City of Noble’s City Council is fiscally responsible. In determining the financial reporting entity, the City complies with the provisions of Governmental Accounting Standards Board Statement No. 14, “The Financial Reporting Entity” as amended by Statement No. 61 “The Financial Reporting Entity: Omnibus” and includes all component units for which the City is financially accountable.
The City of Noble – that operates the public safety, health and welfare, streets and highways, parks and recreation, and administrative activities.
The City of Noble is an incorporated municipality with a population of approximately 6,400 located in central Oklahoma. The City is a Council/Manager form of government and operates under a charter that provides for three branches of government:
Legislative – the City Council is a five-member governing body of which the council members are elected by wards and the mayor is elected by the citizens at large
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
Noble Utilities Authority - The trust has as its purpose to finance, develop, and operate the utility services and physical facilities (NUA). Noble Economic Development Authority - The trust has as its purpose to stimulate economic growth and development of the beneficiary City (NEDA). The NEDA is financially inactive. The component unit is a Public Trust 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. 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. The NUA has the City Council as heir governing body (trustee) and the City is able to impose its will on the Authority through required approval of all debt obligations issued by these entities. As required by state law, all debt obligations incurred by the NUA must be approved by two-third vote of the City Council. This is considered sufficient imposition of will to demonstrate financial accountability and to include the trust within the City’s financial reporting entity. The public trust does not issue separate annual financial statements. Noble EMS District - The Noble EMS District was formed under the provisions of the Oklahoma Constitution, Article 10, Section 9C for the purpose of providing ambulance service within a district comprised of the municipal limits of the City of Noble, Oklahoma.
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CITY OF NOBLE, OKLAHOMA Notes to the Basic Financial Statements
For the Year Ended June 30, 2018
B - 10
The Noble EMS District and the City of Noble entered into an agreement in October 5, 2009 whereas the City agrees to account for ambulance revenues and expenses, to provide space for medical technicians, vehicles, equipment and supplies, to contract for lease purchase of ambulance vehicles and equipment, to provide training and uniforms for EMS technicians, to provide dispatcher service, and to provide office help. The District agrees to delegate to the City all hiring authority, to determine what level of ambulance service will be provided, to prepare the fiscal year budget and to issue bonds, if needed. All revenue from the district is given to the City’s EMS Fund and the City bills and makes all decisions related the ambulance operations.
1.B. Basis of Presentation
Government-Wide Financial Statements - The Statement of Net Position and Statement of Activities report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely, to a significant extent on fees and charges for support. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Fund Financial Statements - Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.
1.C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation Basis of accounting refers to when revenues and expenditures/expenses are recognized and reported in the financial statements. This relates to the timing of the revenues, expenditures/expenses regardless of the measurement focus applied. Measurement focus identifies which transactions and events should be recorded. In the governmental fund financial statements, a current financial resources measurement focus is applied. In the government-wide Statement of Net Position and the Statement of Activities, and the proprietary funds, an economic resources measurement focus is applied. Both governmental and business-type activities in the government-wide financial statements and the fund financial statements are presented using a modified cash basis of accounting. This modified cash basis of accounting is based on the recording of cash and cash equivalents and changes therein, and only recognizes revenues, expenses, assets and liabilities resulting from cash transactions adjusted for modifications that have substantial support in generally accepted accounting principles. These modifications include adjustments for the following balances arising from cash transactions:
capital assets and the depreciation of those assets, where applicable
long-term debt
cash-based interfund receivables and payables, if any
investments and other deposits
utility deposit liabilities
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CITY OF NOBLE, OKLAHOMA Notes to the Basic Financial Statements
For the Year Ended June 30, 2018
B - 11
This basis is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. As a result of the use of the modified cash basis of accounting, certain assets and their related revenues (such as accounts receivable and revenue for billed or provided services not yet collected, and accrued revenue and receivables) and certain liabilities and their related expenses (such as accounts payable and expenses for goods or services received but not yet paid, and accrued expenses and liabilities) are not recorded in these financial statements. If the City used the basis of accounting required by generally accepted accounting principles, the fund financial statements for governmental funds would use the modified accrual basis of accounting and the fund financial statements for proprietary fund types would use the accrual basis of accounting. All government-wide financial statements would be presented on the accrual basis of accounting. Under the modified accrual basis of accounting, revenues would be recognized when susceptible to accrual (i.e. both measurable and available) and expenditures would be recorded when the current liability is incurred. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred. Program revenues within the statement of activities are derived from each activity or from parties outside the City’s taxpayers. The City has the following program revenues in each activity:
Public Safety: EMS runs, police fines and grants
Streets: Gas excise, commercial vehicle taxes, street lights and operating and capital grants
General Government: license and permits and operating and capital grants
Parks: Rentals and operating and capital grants The City reports the following funds: Governmental Funds
Major Governmental Funds:
General Fund - is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund.
Special Revenue Funds
Noble EMS Fund - accounts for emergency medical service activities.
Aggregated Non-Major Governmental Funds:
Special Revenue Funds:
Noble EMS District - accounts for emergency medical service activities (blended component unit). The district receives voter approved ad valorem taxes for operations and has debt funded from voter approved ad valorem taxes. Its operations are handled by the City and it contracts with the City handle the EMS operations. Therefore, the operation ad valorem tax is transferred to the City EMS fund.
Debt Service Funds
Noble Sinking Fund – to account for ad valorem tax collections to liquidate 2012 bonds for street improvements
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CITY OF NOBLE, OKLAHOMA Notes to the Basic Financial Statements
For the Year Ended June 30, 2018
B - 12
Capital Project Fund:
2016 GO Bond EMS District Project Fund – to account for bond proceeds for EMS District capital assets.
Proprietary Funds
Enterprise funds: are used to account for business-like activities provided to the general public. These activities are financed primarily by user charges and measurement of financial activity focuses on net income measurement similar to the private sector. The reporting entity includes the Noble Utility Authority enterprise fund and the related meter deposit fund. This fund accounts for activities of the public trust in providing water, wastewater and sanitation services to the public.
Major Enterprise Funds:
Noble Utilities Authority – that operates the water, sewer, and sanitation services of the City (blended component unit).
Non-Major Enterprise Funds:
Meter Fund - accounts for refundable water meter deposits.
The City’s policy is to eliminate interfund transfers and balances in the statement of activities and net assets to avoid the grossing up of balances. Only the residual balances transferred between governmental and business-type activities are reported as internal transfers and internal balances and then offset in the total column in the government-wide statements. Interfund transfers and balances between funds are not eliminated in the fund financial statements.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s enterprise fund are charges to customers for sales and services. Operating expenses for the enterprise fund include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
All of the above funds are legally required to adopt annual budgets or appropriations. The public trust (or Authority) is not required to adopt legal annual appropriations. While each trust develops an annual budget, it is for financial management purposes and does not constitute legal appropriations.
1.D. Assets, Liabilities and Fund Equity Cash, Cash Equivalents and Investments - The City’s cash and cash equivalents are considered to be cash on hand, demand deposit accounts, interest bearing checking accounts and time deposit accounts including certificates of deposit with maturities of three months or less from the date of acquisition and open-end government mutual funds. Investments for the City, as well as for its component units, are reported at cost. Deposits with Insurance Pool - Typically past refunds or interest earnings left on deposit with the Workers Compensation Insurance Plan to be disbursed upon instruction by the City of Noble. This deposit is held in escrow by the insurance pool and is invested. It is included in the cash and cash equivalents.
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CITY OF NOBLE, OKLAHOMA Notes to the Basic Financial Statements
For the Year Ended June 30, 2018
B - 13
Restricted Assets - Restricted assets include assets that are legally restricted as to their use. The primary restricted assets are related to customer utility deposits and trustee accounts restricted for debt service and capital improvements. Capital Assets – The accounting treatment of property, plant and equipment (capital assets) depends on whether they are reported in the government-wide or fund financial statements. In the government-wide statements and proprietary fund financial statements, capital assets are accounted for as capital assets, net of accumulated depreciation where applicable. In governmental fund financial statements, capital assets acquired are accounted for as capital outlay expenditures and not reported as capital assets. Capital assets consist of land, construction in progress, buildings, improvements, utility property/improvements, vehicles and equipment, surplus property and infrastructure. Recorded assets are reported at actual or estimated historical cost. A capitalization threshold of $2,000 is used to report capital assets. Donated capital assets are recorded at estimated fair market value at the date of donation. Estimated historical cost was used to value the majority of the assets, including infrastructure assets (such as roads, bridges, traffic systems) acquired prior to July 1, 2003. However, the infrastructure assets related to the current debt of the City and the Authority as of June 30, 2004 have been capitalized based upon the original bond issue cost or other debt. Infrastructure assets acquired since July 1, 2003 are recorded at cost. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. The depreciable capital assets are depreciated on a straight-line basis over the assets’ estimated useful lives. The range of estimated useful lives by type of asset is as follows:
Buildings 40 years
Improvements other than buildings 20 years
Vehicles and equipment 10 years
Utility property and improvements 40-50 years
General Infrastructure 15-50 years Due to Depositors - Represents the funds received from customers for their water utility deposits. These deposits are refunded or credited to the customer upon termination of the utility service and payment of all charges due and connected with the service. Effective August 2000, utility customers having a five-year history of good payment are eligible for a refund of their deposit. Police Bond Liability - Represents municipal court bonds held for individuals awaiting court dates. Long-Term Obligations – In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Long-term debt for governmental funds is not reported as liabilities in the fund financial statements. The debt proceeds are reported as other financing sources and payment of principal and interest reported as debt service expenditures.
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CITY OF NOBLE, OKLAHOMA Notes to the Basic Financial Statements
For the Year Ended June 30, 2018
B - 14
Compensated Absences – As a result of the use of the modified cash basis of accounting, accrued liabilities related to compensated absences (accumulated but unused vacation leave and compensatory time earned but unpaid at year-end), are not reflected in the financial statements. Expenditures/expenses related to compensated absences are recorded when paid. The amount of accrued compensated absences has been reported as a commitment in Note 4.C. Equity Classifications – In the government-wide and the proprietary fund financial statements, equity is classified as net position and displayed in three components:
a. Invested in capital assets, net of related debt – 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 attributed to the acquisition, construction, or improvements of those assets.
b. Restricted – 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 – All other net positions that do not meet the definition of “restricted” or “invested in
capital assets, net of related debt.”
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.
Fund Statements: Governmental fund equity is classified as fund balance. Fund balance is further classified as nonspendable, restricted, committed, assigned and unassigned. These classifications are defined as:
a. Nonspendable – includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact.
b. Restricted – consists of fund balance with constraints placed on the use of resources either by (1)
external groups such as creditors, grantors, contributors, or laws or regulations of other governments, or (2) laws through constitutional provisions or enabling legislation.
c. Committed – included amounts that can only be used for specific purposes pursuant to constrains
imposed by formal action of the Town’s highest level of decision-making authority. The Town’s highest level of decision-making authority is made by ordinance while the MMA’s highest level of decision-making authority is made by resolution.
d. Assigned – includes amounts that are constrained by the Town’s intent to be used for specific
purposes but are neither restricted nor committed. Assignments of fund balance may be made by Town council action or management decision when the Town council has delegated that authority. Assignments for transfers and interest income for 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.
It is the City’s policy to first use restricted fund balance prior to the use of unrestricted fund balance when an expense is incurred for purposes for which both restricted and unrestricted fund balances are available. The City’s policy for the use of unrestricted fund balance amounts require that committed amounts would be reduced first, followed by assigned amounts and then unassigned amounts when expenditures are incurred for
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CITY OF NOBLE, OKLAHOMA Notes to the Basic Financial Statements
For the Year Ended June 30, 2018
B - 15
purposes for which amounts in any of those unrestricted fund balance classifications could be used. The only exception to this policy is for assigned interest income in governmental funds other than the General Fund to be spent prior to restricted fund balance. In those funds, interest income is used first before other revenues.
1.E. Sales Tax Revenue
Sales Tax - The City presently levies a four-cent sales tax on taxable sales within the City. The sales tax is collected by the Oklahoma Tax Commission and remitted to the City in the month following receipt by the Tax Commission. The sales tax recorded is allocated one hundred percent to the General Fund. The City has pledged the four-cent sales tax to secure debt service payments in the Noble Utilities Authority. The sales tax is transferred to NUA each month. The Authority has the right to return to the City any part of the appropriated sales tax, if there is no event of default. For the year ended June 30, 2018, the City of Noble transferred sales tax of $1415,257 to NUA and NUA transferred $1,415,257 back to the General Fund of the City of Noble to be used by the City.
1.F. Property Tax Revenue
Property Tax - Under State law, municipalities are limited in their ability to levy a property tax. Such tax may only be levied to repay principal and interest on general obligation bonded debt approved by the voters. At present time the City levies a property tax to fund the annual debt service requirements of the 2012 Street Improvement General Obligation Bonds. During the current fiscal year the Noble EMS District paid in full the 2006 Noble Emergency Medical Service District General Obligation Bonds and enacted a 2016 Noble Emergency Medical Service District General Obligation Bonds. The District did not levy a property tax to fund the annual debt service requirements the General Obligation Bonds during the current fiscal year, however will levy a property tax in the coming fiscal year. The EMS District also levies 3.08 mills for the operation of the EMS services in the District. The property tax levy, as determined by the City and the Noble EMS District’s debt service needs, is submitted to the county excise board for approval. The county assessor, upon receipt of the certification of tax levies from the county excise board, extends the tax levies on the tax roll for submission to the county treasurer prior to October 1; the county treasurer must commence tax collection within fifteen days of receipt of the tax rolls. The first half of taxes is due prior to January 1. The second half is due prior to April 1. If the first payment is not made timely, the entire tax becomes due and payable on January 2. Second half taxes become delinquent on April 1 of the year following the year of assessment. If not paid by the following October 1, the property is offered for sale for the amount of taxes due. The owner has two years to redeem the property by paying the taxes and penalty owed. If at the end of two years the owner has not done so, the purchaser is issued a deed to the property.
1.G. Use of Estimates
In preparing the City of Noble’s financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Depreciation is an estimate of the allocation of the cost of assets over its estimated useful life.
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CITY OF NOBLE, OKLAHOMA Notes to the Basic Financial Statements
For the Year Ended June 30, 2018
B - 16
Note 2 – Stewardship, Compliance, and Accountability
2.A. Budgetary Information The city manager submits an annual budget to the City Council in accordance with the Oklahoma Municipal Budget Act. In June the City Council adopts annual fiscal year appropriated budgets for all city funds. The appropriated budget is prepared by fund, department and categories (personal services, materials and supplies, other services and charges, capital outlay, debt service and transfers). Transfers of appropriations between departments within a fund require the approval of the City Manager. Transfers of appropriations between funds and supplements to the budget require City Council approval. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is the department level. The Sinking Fund and Emergency Medical Service Board estimate of needs must be filed with the county excise board.
Note 3 – Detailed Notes on all Funds
3.A. Deposits and Investments Risk
At June 30, 2018, the reporting entity had the following deposits and investments:
Carrying
Types of Deposits and Investments Value
Deposits:
Demand deposits 2,052,107
OMAG Escrow 16,060
T ime Deposits 120,000
Total Deposits 2,188,167$
Credit
Investments: Maturities Rating
Open End Mutual Fund - (American Performance U.S. Treasury) N/A AAA 19,889$
Total Deposits and Investments 2,208,056$
Custodial Credit Risk - Deposits – Custodial credit risk is the risk that in the event of a bank failure, the City’s deposits may not be returned to it. The City does not have a written deposit policy for custodial credit risk, but Oklahoma Statutes requires collateral for all uninsured deposits of municipal funds in financial institutions. As of June 30, 2018, the City was exposed to custodial credit risk. The money market mutual funds are not insured or guaranteed by the FDIC or any other government agency. The other City accounts were fully collateralized at June 30, 2018.
Investment Credit Risk – The City does not have a written investment policy that limits its investment choices other than the limitations stated in the Oklahoma Statutes. Oklahoma Statutes allow the City to invest in: (1) full faith and credit, direct obligations of the U.S. Government, its agencies and instrumentalities, and the State of Oklahoma and certain mortgage insured federal debt; (2) certificates of deposits or savings accounts
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CITY OF NOBLE, OKLAHOMA Notes to the Basic Financial Statements
For the Year Ended June 30, 2018
B - 17
that are either insured or secured with acceptable collateral; (3) negotiable certificates of deposit, prime bankers acceptances, prime commercial paper and repurchase agreements with certain limitations; (4) county, municipal or school district tax supported debt obligations, bond or revenue anticipation notes, money judgments, or bond or revenue anticipation notes of public trusts whose beneficiary is a county, municipality, or school district; and government money market funds regulated by the SEC. Public trusts created under O.S. Title 60, are not subject to the above investment limitations and are primarily governed by any restrictions in their trust or note indenture. The City’s only marketable investments at June 30, 2018 consisted of $19,889 in open ended mutual funds invested in U.S. Treasury securities with a Standard & Poor’s credit rating of AAA. Investment Interest Rate Risk – The City does not have a formal investment policy that limits investments maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The City’s only investments are in open ended mutual funds with available on demand. All certificates of deposit have maturities no later than April 2018. Concentration of Credit Risk – The City places no limit on the amount it may invest in any one issuer.
3.B. Restricted Assets The amounts reported as restricted assets consist of cash and investments held for the expenditure of bond proceeds and payment of bonds related to GO Bonds, amounts held by the trustee bank on behalf of the Noble Utilities Authority related to its required revenue bond accounts, capital improvement funds and amounts due to depositors related to utility deposits. The restricted assets as of June 30, 2018 were as follows:
Cash and Cash
Type of Restricted Assets Equivalents Investments
Water Project 2011 13,386$ -$
Capital Improvement 264,500
Court Funds 8,349
Park Fees 43,054
Customer Utility Deposits 33,082 120,000
Revenue Bonds Account - -
Trustee Accounts:
Note-OWRB 19,889 -
Sinking Fund 54,442 -
EMS Funds 141,556 -
Total Restricted Assets 578,258$ 120,000$
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CITY OF NOBLE, OKLAHOMA Notes to the Basic Financial Statements
For the Year Ended June 30, 2018
B - 18
3.C. Capital Assets Capital asset activity resulting from modified cash basis transactions for the fiscal year ended June 30, 2018 was as follows:
Balance Balance
6/30/2017 Additions Disposals 6/30/2018
Governmental Activities:
Capital Assets, not being depreciated:
Land 368,578$ -$ -$ 368,578$
Construction in progress - -
Total Capital Assets, not being depreciated 368,578 - - 368,578
Capital assets, being depreciated:
Buildings 2,321,998 - - 2,321,998
Other Improvements 459,820 3,880 - 463,700
Vehicles and equipment 2,333,917 441,881 (179,438) 2,596,360
Surplus property 2,250 - - 2,250
Infrastructure 2,961,361 3,550 - 2,964,911
Total Capital Assets, being depreciated 8,079,346 449,311 (179,438) 8,349,219
Less accumulated depreciation for:
Buildings 1,069,569 57,108 - 1,126,677
Other Improvements 153,072 18,163 - 171,235
Vehicles and equipment 1,440,148 173,620 (156,429) 1,457,339
Surplus property 2,250 - 2,250
Infrastructure 909,273 103,415 1,012,688
Total accumulated depreciation 3,574,312 352,306 (156,429) 3,770,189
Total capital assets, being depreciated, net 4,505,034 97,005 (23,009) 4,579,030
Governmental act ivities capital assets, net 4,873,612$ 97,005$ (23,009)$ 4,947,608$
Balance Balance
6/30/2017 Additions Disposals 6/30/2018
Business-Type Activities:
Capital Assets, not being depreciated:
Land 234,364$ -$ -$ 234,364$
Construction in progress 119,206 - (119,206) -
Total Capital Assets, not being depreciated 353,570 - (119,206) 234,364
Capital assets, being depreciated:
Buildings 132,292 162,501 - 294,793
Utility property/Improvements 6,865,799 - - 6,865,799
Vehicles and equipment 586,993 51,533 29,355 667,881
Surplus property - - - -
Total Capital Assets, being depreciated 7,585,084 214,034 29,355 7,828,473
Less accumulated depreciation for:
Buildings 34,328 3,745 - 38,073
Utility property/Improvements 2,377,071 168,208 - 2,545,279
Vehicles and equipment 327,902 52,589 29,355 409,846
Surplus property - - - -
Total accumulated depreciation 2,739,301 224,542 29,355 2,993,198
Total capital assets, being depreciated, net 4,845,783 (10,508) - 4,835,275
Business-type activities capital assets, net 5,199,353$ (10,508)$ (119,206)$ 5,069,639$
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CITY OF NOBLE, OKLAHOMA Notes to the Basic Financial Statements
For the Year Ended June 30, 2018
B - 19
Depreciation expense was charged to functions as follows in the Statement of Activities:
Governmental Activities:
Police 47,735$
Fire/EMS 130,507
General Government 15,656
Library 40,968
Parks 16,527
Streets 100,913
Total depreciation expense for governmental activities 352,306$
Business-Type Activities:
Water 112,935$
Sewer 111,607
Total depreciation expense for business-type activities 224,542$
3.D. Long-Term Debt Governmental Activities - State statutes prohibit the City from incurring any indebtedness or obligations that would require payment from resources beyond the current fiscal year revenue, without first obtaining voter approval. As of June 30, 2018, the long-term debt, arising from cash transactions, payable from governmental fund resources consisted of the following:
Capital Lease Obligations: $96,080 capital debt obligation with Oklahoma State Bank for police cars, payable in annual installments of $24,731 final payment due January 2020 at a rate of 1.98%. $ 47,883
Current portion 23,780 Non-current portion 24,103 Total Capital Lease Obligations $ 47,883
State Obligation: The City of Noble agreed on June 1, 1990 to repay at no interest with the Oklahoma Department of Transportation its share in utility relocation costs. The City and State have agreed to a 30-year payout in which the City remits monthly principal installments of $212, final payment due September 2020. $ 5,494
Current portion 2,544 Non-current portion 2,950 Total State Obligation $ 5,494
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CITY OF NOBLE, OKLAHOMA Notes to the Basic Financial Statements
For the Year Ended June 30, 2018
B - 20
General Obligation Bonds: $1,000,000 Series 2012 General Obligation Bonds due in annual installments of $70,000, final installment of $90,000 due June 01, 2027, interest payable semi-annually with interest rates from 2.0% to 3.19% for street improvements $ 650,000
Current portion 70,000
Non-current portion 580,000 Total Street GO Bonds $ 650,000
$445,000 Series 2016 Noble Emergency Medical Service District Bonds, due in semi-annual installments of interest only for the first two years and thereafter annual variable principal payments of $70,000, to $80,000, with semi-annually with interest rates from 1.75% to 2%, final installment of $81,600 due May 1, 2024 for the benefit of the EMS; $ 445,000
Current portion 70,000 Non-current portion 375,000 Total EMS General Obligation Bonds $ 445,000
Business-Type Activities – As of June 30, 2018, the long-term debt, arising from cash transactions, payable from proprietary fund resources consisted of the following: Capital Lease Obligations:
$83,818 capital debt obligation with Oklahoma State Bank for three vehicles, payable in monthly installments of $2,400 at 1.98%, final payment due December 15, 2019. $ 42,516
Current portion 28,213 Non-current portion 14,303 Total Capital Lease Obligations $ 42,516
Revenue Notes Payable: 2011 CWSRF Promissory Note to OWRB, original issue amount of $1,175,000 dated May, 2011as of the date of closing, issued by Noble Utilities Authority, secured by a pledge of revenues generated by the of the water and sewer system, along with a year-to-year pledge of certain sales tax revenue with an interest rate not to exceed 2.7% fixed interest rate plus a one-half percent (1/2%) administration fee, for a term of approximately twenty (20) years. $ 851,329
Current portion 51,181 Non-current portion 800,148 Total Revenue Notes Payable $ 851,329
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CITY OF NOBLE, OKLAHOMA Notes to the Basic Financial Statements
For the Year Ended June 30, 2018
B - 21
Utility Revenues Pledged
The City has pledged future water and sewer customer revenues, net of specified operating expenses, to repay $2.54 million in a promissory note to OWRB issued March 2006, which was paid in full in current year. Proceeds from the note provided financing for the refinancing of the 1997 bonds. Also, the OWRB $1.175 million promissory note issued May, 2011. The notes are payable from water and sewer customer net revenues and future sales tax revenue (discussed below) and are payable through 2018. Annual principal and interest payments on the note are expected to require less than 40 percent of net revenues. The total principal and interest remaining to be paid on the notes is $1,058,341. Principal and interest paid for the current year and total customer net revenues were $484,596 and $2,089,630 respectively.
Sales Tax Revenues Pledged
The City has pledged future sales tax revenues to repay $2.54 million in a promissory note to OWRB issued March 2006 which paid in full during the year, and the OWRB $1.175 million 2011 promissory note. Proceeds from the 2006 note provided financing for the refinancing of the 1997 bonds. The notes are payable from future sales tax revenue. The total principal and interest remaining to be paid on the notes are $1,058,341 payable through 2031. For the current year, principal and interest paid and total sales tax revenues were $484,596 and $1,415,257 respectively.
Property Tax Revenue Pledged
The City and the EMS District has pledged future property tax revenues to repay two remaining general obligation bonds. A $445,000 2016 Series EMS capital asset bond issued April 2016 and a $1,000,000 Series 2012 street improvement bond. These bonds are payable from future property tax revenue. The total remaining principal and interest to be paid on the bonds totals $1,225,245 payable through June, 2027. For the current year, principal and interest and total property tax revenues were $98,108 and $255,263 respectively. Long-term liability activity for the year ended June 30, 2018, was as follows:
Balance
6/30/17
Additions
Reductions
Balance
6/30/17
Amount Due
Within One Year
Governmental Activities:
Capital Lease Obligation $ 90,302 $ - $ (42,419) $ 47,883 $ 23,780
State Obligation 8,038 - (2,544) 5,494 2,544
Series 2012 GO Bond 720,000 - (70,000) 650,000 70,000
Series 2015 GO Bonds 445,000 - - 445,000 0
Total Governmental Activities $ 1,263,340 $ - $ (114,963) $ 1,148,377 $ 96,324
Business-Type Activities:
Capital Lease Obligations $ 70,179 - (27,662) 42,517 28,213
Revenue Notes Payable 1,300,889 - (449,560) 851,329 51,181
Total Business-Type Activities $ 1,371,068 $ - $ (477,222) $ 893,846 $ 79,394
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CITY OF NOBLE, OKLAHOMA Notes to the Basic Financial Statements
For the Year Ended June 30, 2018
B - 22
The annual debt service requirements to maturity are as follows: Governmental
Activities:
Year Ending
June 30, Principal Interest Principal Interest Principal Interest Principal Interest
2019 23,780 951 2,544 - 70,000 17,920 70,000 7,987
2020 24,334 480 2,544 - 70,000 16,520 70,000 6,762
2021 - - 406 - 70,000 15,120 75,000 5,538
2022 - - - - 70,000 13,545 75,000 4,225
2023-2027 - - - - 370,000 38,115 155,000 4,513
Total 48,114$ 1,431$ 5,494$ -$ 650,000$ 101,220$ 445,000$ 29,025$
Business-Type
Activities:
Year Ending
June 30, Principal Interest Principal Interest
2019 28,212 587 51,181 27,214
2020 14,306 94 52,787 25,609
2021 - - 54,582 23,814
2022 - - 56,367 22,028
2023-2027 - - 310,673 81,306
2028-2032 - - 325,739 27,041
Total 42,518$ 681$ 851,329$ 207,012$
GO Bonds-EMS District
Obligations
Capital Lease State Obligations GO Bonds-Streets
Capital Lease Revenue Notes Payable
Obligations
Interest expense was charged to functions as follows in the Statement of Activities: Business-Type Activities
Water $36,173
The capital assets acquired through capital leases are as follows: Accumulated
Date Capital Asset Amount Depreciation
Vehicles: 1/22/2013 Four Police Cars-Charges 123,572 66,935
12/20/2013 2013 F-150 Pickup 28,208 25,387 12/20/2013 2014 F-250 Pickup 32,439 29,195 12/20/2013 2013 F-150 Pickup 24,966 22,469
4/06/2015 2015 Ford Explorer 35,239 11,453 4/06/2015 2015 Ford Explorer 39,927 12,771
1/10/17 2016 Dodge Charger 32,027 6,863 1/10/17 2016 Dodge Charger 32,027 4,804 1/10/17 2016 Dodge Charger 32,027 4,804
12/15/16 2017 Police Interceptor 30,469 4,824 12/15/16 2017 Ford F 150 26,675 4,223 12/15/16 2017 Ford F 150 26,675 4,223
$ 463,621 $ 197,951
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CITY OF NOBLE, OKLAHOMA Notes to the Basic Financial Statements
For the Year Ended June 30, 2018
B - 23
Debt Service Coverage Requirement:
The OWRB debt agreement requires that Net Revenue Available for Debt Service must equal 125% of maximum annual debt service. Actual coverage was met as follows:
Amount
Net Revenue Available for Debt Service:
Operating revenues 2,295,052
Less: Sanitation revenues (673,595)
Investment income 2,095
Sales tax transfer 1,415,257
Total Gross Revenues Available 3,038,809
Operating expenses 1,521,405
Less: Sanitation expenses (347,684)
Less: Depreciation and Amortization (224,542)
Total Operating Expenses 949,179
Net Revenues Available for Debt Service 2,089,630$
Debt Service Requirement:
Maximum annual debt service 484,596$
Coverage 431%
Coverage Requirement 125%
3.E. Interfund Receivables, Payables, and Transfers The composition of interfund balances as of June 30, 2018 was as follows: Interfund Transfers:
Transfer Out Transfer In Amount Purpose of Transfer
General Fund NUA 1,415,257$ To transfer sales tax for debt purposes
General Fund NUA 211,200 Operating subsidy
NUA Noble EMS Fund 63,598 Operating subsidy
NUA General Fund 2,544 Debt service
EMS District Noble EMS Fund 90,000 To transfer property tax
Noble EMS Fund EMS Project Fund 89 Capital Outlay
NUA General Fund 1,415,257 Return of unused sales tax
3,197,945$
Reconciliation to Fund Financial Statements:
Transfers In Transfers Out
Net
Transfers
Governmental Funds 1,692,598$ (1,415,257)$ 277,341$
Enterprise Funds 1,415,257 (1,692,598) (277,341)
Total 3,107,855$ (3,107,855)$ -$
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CITY OF NOBLE, OKLAHOMA Notes to the Basic Financial Statements
For the Year Ended June 30, 2018
B - 24
3.A. Fund Equity
The following table shows the fund balance classifications as shown in the Governmental Funds’ Balance
Sheet in accordance with GASB Statement 54 and Proprietary Fund Statement of Net Position:
General Fund GO Sinking Noble EMS EMS District Total
Fund Balance:
Restricted For:
Parks 43,054$ -$ -$ -$ 43,054$
EMS Sinking - - - 116,539 116,539
EMS Operations - - - 25,017 25,017
EMS Project - - - - -
G.O. Sinking - 54,442 - - 54,442
Sub-total Restricted 43,054 54,442 - 141,556 239,052
Assigned to:
EMS Income - - 63,697 - 63,697
Juvenile Court 5,247 - - - 5,247
5,247 - 63,697 - 68,944
Unassigned 248,386 - - - 248,386
Total Fund Balance 296,687$ 54,442$ 63,697$ 141,556$ 556,382$
Proprietary Funds Restricted:
Capital Improvements 277,877$
Debt Service 19,889
Total Proprietary Fund 297,766$
Note 4 - Other Notes
4.A. 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, Fleet Coverage, and Physical Property – Covered through participation in Oklahoma Municipal Assurance Group risk entity pool.
Fire Department Vehicles – Covered through participation in the Risk Management Division of the Department of Central Services, State of Oklahoma self-insurance pool.
Workers’ Compensation – Workers’ compensation is covered through participation in the Oklahoma Municipal Assurance Group risk entity pool.
Employee’s Group Medical – Covered through purchase of commercial insurance. The City’s risk is transferred to the risk entity pool except for claim deductible amounts. The risk pool maintains deposits for claim reserves and other purposes for the benefit of the city. Management believes the insurance coverage listed above is sufficient to preclude any significant uninsured losses to the City, and such claims have not exceeded the coverage over the past three years.
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CITY OF NOBLE, OKLAHOMA Notes to the Basic Financial Statements
For the Year Ended June 30, 2018
B - 25
4.B. Contingencies
Federal and State Award Programs - The City of Noble participates in various federal and state grant/loan programs from year to year. Amounts received or receivable from grantor agencies are often subject to audit and adjustment by the grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable fund. The amount, if any, of expenditures which may be disallowed by the grantor agency cannot be determined at this time, although the City expects such amounts, if any, to be immaterial.
Litigation - The City is a party to various legal proceedings that normally occur in the course of governmental operations. The financial statements do not include accrual or provision 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. This provision is not applicable to authorities or public trusts. 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.
4.C. Commitments
Compensated Absences – As a result of the City’s use of the modified cash basis of accounting, accrued liabilities related to compensated absences (accumulated but unused vacation leave, compensatory time earned but unpaid at year-end, and banked holiday also fire and police sick leave) are not reflected in the financial statements. Governmental funds obligation for accrued compensated absences is $492,631 while the General Fund unassigned fund balance is $248,386 at June 30, 2018. Proprietary funds obligation for accrued compensated absences is $32,333, while the NUA unrestricted fund balance is $1,198,058 at June 30, 2018. Equipment Purchase – At June 30, 2018, the City has a contract to purchase an auto water meter system, contract amount is $681,092.
4.D. Employee Pension Plans
The City of Noble participates in four pension or retirement plans:
1. Oklahoma Firefighter’s Pension and Retirement System (OFPRS) – a statewide cost-sharing plan 2. Oklahoma Police Pension and Retirement System (OPPRS) – a statewide cost-sharing plan 3. Oklahoma Municipal Retirement Fund (OMRF) – a cost sharing multiple-employer defined benefit
plan 4. Nationwide Retirement – IRC 457(b) Plan – an employee contributions only deferred compensation
plan
Firefighters’ Retirement Plan – Pursuant to the requirements of Title 11, section 22-102, the City of Noble participates in the statewide cost-sharing multi-employer defined benefit plan administered by the Oklahoma Firefighter’s Pension and Retirement System (OFPRS) on behalf of both paid and volunteer firefighters. The City has no responsibility or authority for the operation and administration of the pension program nor has it any related liability, except for the current contribution requirements. The contribution rates for the City and its employees are established by Statute. The City is required to contribute 14% for year ended June 30, 2018. Participating members are required to contribute 9%. The plan is funded by contributions from participants, employers, insurance premium taxes, and state appropriations, as necessary.
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CITY OF NOBLE, OKLAHOMA Notes to the Basic Financial Statements
For the Year Ended June 30, 2018
B - 26
Contributions for the last three years were as follows:
Fiscal Year
Required
Contribution
Amount
Contributed
2016 81,485$ 81,485$
2017 83,690$ 83,690$
2018 87,585$ 87,585$
The OFPRS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained on the website at www.ok.gov/fprs or by writing to OFPRS, 4545 North Lincoln Blvd., Suite 265, Oklahoma City, OK 73105-3414.
Policemen’s Retirement Plan - The City of Noble participates in the statewide cost-sharing multi-employer defined benefit plan administered by the Oklahoma Police Pension and Retirement System (OPPRS) on behalf of paid officers. The City has no responsibility or authority for the operation and administration of the pension program nor has it any related liability, except for the current contribution requirements.
The contribution rates for the City and its employees are established by Statute. The City is required to contribute 13% for the year ended June 30, 2018. Participating members are required to contribute 8%. The plan is funded by contributions from participants, employers, insurance premium taxes, and state appropriations, as necessary. Contributions for the last three years were as follows:
Fiscal Year
Required
Contribution
Amount
Contributed
2016 46,474$ 46,474$
2017 48,655$ 48,655$
2018 48,137$ 48,137$
The OPPRS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained on the website at www.ok.gov/opprs or by writing by writing to OPPRS, 1001 NW 63rd Street, Suite 605, Oklahoma City, OK 73116-7335.
Defined Benefit Plan – Oklahoma Municipal Retirement Fund
The City and its employees participate in an agent multiple employer defined pension plan through the Oklahoma Municipal Retirement Fund (OMRF). All regular full time employees, except those covered under another retirement system, are eligible. Employees are vested at 5 years. The City’s OMRF defined benefit pension plan provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. The OMRF System issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained on the website at www.okmrf.org/reports or by writing to OMRF, P.O. Box 25848, Oklahoma City, OK 73125 or by calling 1-888-394-6673.
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CITY OF NOBLE, OKLAHOMA Notes to the Basic Financial Statements
For the Year Ended June 30, 2018
B - 27
Funding Policy - The contribution requirements of City of Noble and employees are established and may be amended by the OMRF board. Employees are required to contribute 4.25% of their annual covered salary. City of Noble is required to contribute at an actuarially determined rate; the rate is 13% of covered payroll. The required contribution was determined as part of the March 2015 actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included (a) 7.5% investment rate of return, and (b) projected salary increases due to inflation of 3% compounded annually (higher for younger employees), and projected salary increases due to age/seniority, compounded annually. Funding requirements may increase in the future as benefits accrue.
Annual Pension Cost – The City of Noble’s annual pension cost for 2018, 2017, and 2016 were $118,718, $109,694, and $107,522, respectively. Governmental Deferred Compensation 457 Plan – The City of Noble has an IRS Code Section 457 deferred compensation plan through Nationwide Retirement Solutions. The plan is an employee contribution only and the City does not make contributions on behalf of the employees.
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Variance with
Actual Final Budget
Original Final Amounts Positive (Negative)
Beginning Budgetary Fund Balance $ 686,919 $ 686,919 $ 262,680 $ (424,239)
Resources (Inflows):
Taxes 1,724,000 1,724,000 1,844,242 120,242
Intergovernmental 82,000 82,000 95,400 13,400
Charges for Services 2,000 2,000 - (2,000)
Fines and Forfeitures 162,000 162,000 136,715 (25,285)
Licenses and Permits 82,000 82,000 86,607 4,607
Investment Income 600 600 1,955 1,355
Grant Revenue 45,000 172,112 117,154 (54,958)
Street Lighting 40,000 40,000 40,273 273
Miscellaneous 46,000 327,372 61,949 (265,423)
Transfers In 1,332,000 1,332,000 1,626,457 294,457
Total Resources (Inflows) 3,515,600 3,924,084 4,010,752 86,668
Amounts available for appropriations 4,202,519 4,611,003 4,273,432 (337,571)
Charges to Appropriations (Outflows):
City Manager 93,759 93,759 67,490 26,269
Office & Managerial 303,305 303,305 281,085 22,220
Court/Attorney 109,896 109,896 97,537 12,359
Police 896,467 900,589 811,009 89,580
Dispatch 171,386 172,131 171,627 504
Animal Control 66,829 66,829 64,089 2,740
Fire 408,264 525,381 490,311 35,070
General Government 183,200 183,200 156,050 27,150
Library 31,748 31,748 28,360 3,388
Parks 10,000 14,845 14,843 2
Streets 240,527 251,702 237,073 14,629
Capital Outlay 310,638 497,858 125,881 371,977
Debit Service 44,500 44,500 44,172 328
Transfer Out 1,332,000 1,415,260 1,415,257 3
Total Charges to Appropriations 4,202,519 4,611,003 4,004,785 606,218
Ending Budgetary Fund Balance $ - - 268,647 268,647
Reconciliation to Statement of Revenues, Expenditures, and Changes in
Fund Balance:
General Fund Fund Balance $ 296,686
Encumbrances (28,039)
Ending Budgetary Fund Balance $ 268,647
Budgeted Amounts
CITY OF NOBLE, OKLAHOMA
Budgetary Comparison Schedule
General Fund - Modified Cash Basis
For the Year Ending June 30, 2018
See disclaimer in Independent Auditor's Report
C - 1
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Variance with
Actual Final Budget
Original Final Amounts Positive (Negative)
Beginning Budgetary Fund Balance $ 302,885 $ 297,419 $ 296,974 $ (445)
Resources (Inflows):
Charges for Services 630,000 630,000 607,971 (22,029)
Investment Income 200 200 199 (1)
Miscellaneous Income 1,000 1,000 16,650 15,650
Transfers In 171,000 176,466 153,598 (22,868)
Total Resources (Inflows) 802,200 807,666 778,418 (29,248)
Amounts available for appropriations 1,105,085 1,105,085 1,075,392 (29,693)
Charges to Appropriations (Outflows):
Administration 32,556 32,556 28,906 3,650
EMS 765,433 765,433 720,613 44,820
Capital Outlay 307,096 307,096 262,176 44,920
Transfer Out - - - -
Total Charges to Appropriations 1,105,085 1,105,085 1,011,695 93,390
Ending Budgetary Fund Balance $ - $ - $ 63,697 $ 63,697
Reconciliation to Statement of Revenues, Expenditures, and Changes in
Fund Balance:
EMS Fund - Fund Balance $ 63,697
Project Fund - Fund Balance -
Encumbrances -
Total Funds Accounted in EMS Fund Balance $ 63,697
Budgeted Amounts
CITY OF NOBLE, OKLAHOMA
Budgetary Comparison Schedule
Noble EMS Fund - Modified Cash Basis
For the Year Ending June 30, 2018
See disclaimer in Independent Auditor's Report
C - 2
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CITY OF NOBLE, OKLAHOMA Footnotes to Budgetary Comparison Schedules
For the Year Ended June 30, 2018
C - 3
1. The budgetary comparison schedules are reported on the same modified cash basis as
governmental funds within the basic financial statements. For budgetary comparison
purposes, the City considers all encumbrances as expenditures at yearend. However, the
City financial statements are reported on the modified cash basis and so expenditure are only
recorded when they are paid.
2. The legal level of appropriation control is the department level within a fund. Transfers of
appropriation within a fund require City Manager’s approval, while supplemental
appropriations require City Council approval.
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CITY OF NOBLE, OKLAHOMA
Combining Balance Sheet
General Fund Accounts - Modified Cash Basis
June 30, 2018
General Court Total
Fund Fund General
Account Account Fund
Assets
Cash and cash equivalents $ 232,404 $ - $ 232,404
Restricted cash and cash equivalents 48,300 3,102 51,402
Due from other funds 84 - 84
Deposits with Insurance Pool 16,060 - 16,060
Total Assets 296,848 3,102 299,950
Liabilities
Court Bonds & Other Payablex - 3,018 3,018
Due to other funds 162 84 246
Total Liabilities 162 3,102 3,264
Fund Balances
Nonspendable - - -
Restricted 43,054 - 43,054
Committed - - -
Assigned 5,247 - 5,247
Unassigned 248,385 248,385
Total Fund Balances 296,686 - 296,686
Total Liabilities and Fund Balances $ 296,848 $ 3,102 $ 299,950
C - 4
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CITY OF NOBLE, OKLAHOMA
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
General Fund Accounts - Modified Cash Basis
For the Year Ended June 30, 2018
General Court Total
Fund Fund General
Account Account Fund
Revenues
Taxes $ 1,844,242 $ - $ 1,844,242
Intergovernmental 212,554 - 212,554
Charges for services 40,273 - 40,273
Fines and forfeitures 136,715 - 136,715
Licenses and permits 86,607 - 86,607
Investment income 1,954 - 1,954
Miscellaneous 61,950 - 61,950
Total Revenues 2,384,295 - 2,384,295
Expenditures
Current:
Administration 349,972 - 349,972
Police 1,076,604 - 1,076,604
Animal control 64,089 - 64,089
Fire/EMS 490,311 - 490,311
General government 156,695 - 156,695
Library 28,458 - 28,458
Parks 15,583 - 15,583
Streets 232,549 - 232,549
Capital outlay 103,056 - 103,056
Debt service:
Principal 44,963 - 44,963
Interest 1,753 - 1,753
Total Expenditures 2,564,033 - 2,564,033
Excess (Deficiency) of Revenues over
Expenditures (179,738) - (179,738)
Other Financing Sources (Uses)
Transfers in 1,629,001 - 1,629,001
Transfers out (1,415,257) - (1,415,257)
Total Other Financing Sources (Uses) 213,744 - 213,744
Net Change in Fund Balances 34,006 - 34,006
Fund Balances - beginning 262,680 - 262,680
Fund Balances - ending $ 296,686 $ - $ 296,686
C - 5
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Special Debt Capital Total
Revenue Fund Service Fund Improvement Fund Nonmajor
Noble Noble EMS District
EMS Sinking Project Governmental
District Fund Fund Funds
Assets
Cash and Cash Equivalents $ - $ - $ - $ -
Restricted Cash and Cash Equivalents 141,557 54,442 - 195,999
Total Assets 141,557 54,442 - 195,999
Liabilities
Due to Other Funds - - - -
Total Liabilities - - - -
Fund Balances
Non Spendable - - - -
Restricted 141,557 54,442 - 195,999
Committed - - - -
Assigned - - - -
Unassigned - - - -
Total Fund Balances 141,557 54,442 - $ 195,999
Total Liabilities and Fund Balances $ 141,557 $ 54,442 $ - 195,999
CITY OF NOBLE, OKLAHOMA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2018
C - 6
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Special Debt Capital Total
Revenue Fund Service Fund Improvement Fund Nonmajor
Noble Noble EMS District
EMS Sinking Project Governmental
District Fund Fund Funds
Revenues
Taxes $ 169,379 $ 85,884 $ - $ 255,263
Investment Income 585 84 68 737
Miscellaneous - - - -
Total Revenues 169,964 85,968 68 256,000
Expenditures
Other Service Charges - - - -
Capital Outlay - - 262,176 262,176
Debt Service:
Principal - 70,000 - 70,000
Interest 8,287 19,820 - 28,107
Total Expenditures 8,287 89,820 262,176 360,283
Excess (Deficiency) of Revenues Over
(Under) Expenditures 161,677 (3,852) (262,108) (104,283)
Other Financing Sources (Uses)
Transfers In - - - -
Transfers Out (90,000) - (89) (90,089)
Total Other Financing Sources (Uses) (90,000) - (89) (90,089)
Net Change in Fund Balances 71,677 (3,852) (262,197) (194,372)
Fund Balances - Beginning 69,880 58,294 262,197 390,371
Fund Balances - Ending 141,557 54,442 - $ 195,999
CITY OF NOBLE, OKLAHOMA
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
C - 7
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Award Current Year Current Year
Grantor/Program Title Amount Revenues Expenditures
Federal Awards:
Department of Justice - Bulletproof Vest $ 344 344 344
FEMA-SBCA 103,067 103,067 103,067
FEMA-SLA 10,000 10,000 10,000
Total Federal Awards $ 113,411 $ 113,411 $ 113,411
State Awards:
Department of Agriculture - Fire 3,744 3,744 3,744
Department of Forestry 100,000 100,000 100,000
Total State Awards $ 103,744 $ 103,744 $ 103,744
CITY OF NOBLE, OKLAHOMA
Schedule of Federal and State Awards
Modified Cash Basis
For the Year Ending June 30, 2018
D - 1
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E - 1
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF THE ACCOMPANYING FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Members of the City Council City of Noble, Oklahoma We have audited 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, the accompanying modified cash basis financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Noble, Oklahoma, as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements and have issued our report thereon dated November 15, 2018. The report was a special report on the City’s use of a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. 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 procedure 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 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 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.
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City of Noble, Oklahoma Page 2
E - 2
Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free of 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 entity’s internal control or compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Chickasha, Oklahoma November 15, 2018
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CITY OF NOBLE, OKLAHOMA
SCHEDULE OF FINDINGS AND RESPONSES
Year Ended June 30, 2018
E - 3
Deficiencies of Internal Control, Compliance and Other Matters:
No findings noted in current year.
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CITY OF NOBLE, OKLAHOMA
DISPOSITION OF PRIOR YEAR FINDINGS
Year Ended June 30, 2018
E -4
Deficiencies of Internal Control, Compliance and Other Matters:
17-001. Criteria – In order to assure good internal control over revenues received the City should maintain
documentation for all income received. This is especially important for revenues that are not part
of an on-going billing system.
Condition – The receipt documentation book generally retains remittance advices to document
receipts for income that is not part of a normal billing process such as oil and gas permits.
However, for the first half of the 2016-17 year there were some receipts that did not retain the
documentation that had been received with the income.
Disposition – This was not a finding in the 2017-2018 year.
17-002. Criteria – Oklahoma Statues Title 11, Section 17:211A states “No expenditure may be authorized
or made by any officer or employee which exceeds the appropriation of any fund”.
Condition – Expenditures exceeded total appropriations in the Noble EMS Fund by $273,552.
Disposition – This was not a finding in the 2017-2018 year.
17-003. Criteria – Bond proceeds and uses should be tracked in a fund with the entity’s name which issued
the bond.
Condition – The Noble EMS District, a component unit, has issued a bond in the 2015-16 year.
These funds were transferred to the City. The City setup a separate City bank account and most of
the proceeds from this bond were spent in the 2016-17 year. The City used the Noble EMS fund to
account for the EMS District’s bond.
Disposition – This was not a finding in the 2017-2018 year.