city of wewoka, oklahoma

ANNUAL FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORTS

AS OF AND FOR THE FISCAL YEAR ENDED JUNE 30, 2019

CITY OF

WEWOKA, OKLAHOMA

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THE CITY OF WEWOKA, OKLAHOMA

ANNUAL FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORTS

AS OF AND FOR THE FISCAL YEAR ENDED JUNE 30, 2019

CITY OF WEWOKA, OKLAHOMA

ANNUAL FINANCIAL REPORT As of and for the Year Ended June 30, 2019

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TABLE OF CONTENTS Independent Auditor’s Report on Financial Statements………..…………………………………. 5-6 Management’s Discussion and Analysis - Other Information……………………………… 7-13 The Basic Financial Statements:

Government-Wide Financial Statements: Statement of Net Position (Modified Cash Basis)………………………………………… 15 Statement of Activities (Modified Cash Basis)…………………………………………..… 16

Governmental Funds Financial Statements: Balance Sheet (Modified Cash Basis)……………………………………………………… 18 Statement of Revenues, Expenditures and Changes in Fund Balances (Modified Cash Basis)……… ……………………………………………………………………………… 19

Proprietary Funds Financial Statements:

Statement of Net Position (Modified Cash Basis) ………………………………………… 21 Statement of Revenues, Expenses and Changes in Net Position (Modified Cash Basis)…… 22 Statement of Cash Flows (Modified Cash Basis)……………………………………………. 23

Footnotes to the Basic Financial Statements …………………………………………………..25-42

Supplementary and Other Information:

Budgetary Comparison Information

Budgetary Comparison Schedule (Modified Cash Basis)– General Fund……………………… 44 Budgetary Comparison Schedules (Modified Cash Basis) – TIF Revenue Fund ……………… 45 Footnotes to Budgetary Comparison Schedules……………………………………………….. 45

Combining General Fund Account Schedules

Combining Balance Sheet – General Fund Accounts (Modified Cash Basis)……..…………… 46 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances – General Fund Accounts (Modified Cash Basis)…………………………………………………………….… 46

Combining Non-Major Governmental Fund Statements

Combining Balance Sheet (Modified Cash Basis)……………………………………..……….. 47 Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Modified Cash Basis)………………………………………………………………………………………….. 48



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Federal and State Awards Information

Schedule of Expenditures of Federal and State Awards (Modified Cash Basis)……………… 49

Internal Control and Compliance over Financial Reporting Independent Auditor’s Report on Internal Control and Compliance……………………………51

309 N. Bryant Ave. • Edmond, OK 73034 • 405.348.0615 • Fax 405.348.0931 • www.jmacpas.com Member of AICPA and OSCPA

INDEPENDENT AUDITOR’S REPORT

To the Honorable Mayor and Members of the City Council City of Wewoka, Oklahoma

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Wewoka, Oklahoma (the “City”), as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of June 30, 2019, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

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Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, budgetary comparison information, pension exhibits, and other post-employment benefits funding schedule, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The introductory section, other supplementary information, and statistical section, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The other supplementary information, as listed in the table of contents, are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the other information is fairly stated in all material respects in relation to the basic financial statements as a whole.

The introductory and statistical sections have 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 them.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated April 17, 2020, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

April 17, 2020

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CITY OF WEWOKA, OKLAHOMA Management’s Discussion and Analysis

As of and for the Year Ended June 30, 2019

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The management of the City of Wewoka 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, 2019. 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 of 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 of the 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 $414,003, and the

assets of the City exceed its liabilities at June 30, 2019, by $2,149,850 (net position). Of this amount, $979,294 (unrestricted net position) is available to meet the government’s ongoing needs.

▪ At June 30, 2019, the City’s governmental funds reported combined ending fund balances on a

modified cash basis of $1,710,474. ABOUT THE CITY The City of Wewoka is an incorporated municipality with a population of approximately 3,430

located in Seminole County in eastern Oklahoma. The City is a charter city form of government. The City is governed by a five-member Council and operates under state law and City ordinances through the three branches of democratic government:

Legislative – the City Council is a five-member governing body elected by the citizens at

large Executive – the City Manager is the Chief Executive Officer and is hired 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, street and alley maintenance, parks and recreation, economic development and, through its public trusts, certain other services such as utility services including water, wastewater, and sanitation. The City’s Financial Reporting Entity This annual report includes all activities for which the City of Wewoka City Council is financially accountable. These activities, defined as the City’s financial reporting entity, are operated within separate legal entities that make up the primary government.



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The City’s financial reporting entity includes the following separate legal entities:

The City of Wewoka – an incorporated City that operates the public safety, streets, culture and recreation, economic development and administrative activities of the City – reported as the primary government

The Wewoka Public Works Authority (WPWA) – public trust created to operate the

water, wastewater, and sanitation services of the City, with the City Council members serving as the trustees – considered part of the primary government for reporting purposes

The Wewoka Industrial Authority (WIA) – public trust created to finance, develop and

promote industrial development activities of the City, with the City Council members appointing the trustees – considered part of the primary government for reporting purposes

The Citizens Improvement League of Wewoka (CILOW) – public trust created to

finance, develop and promote improvements in the City, with the City Council members appointing the trustees – reported as a discretely-presented component unit

In addition, as required by state law, all debt obligations incurred by the trusts must be approved by two-thirds 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 trusts do not issue separate annual financial statements. OVERVIEW OF THE FINANCIAL STATEMENTS The financial statements presented herein include all of the activities of the City of Wewoka (the “City”), the Wewoka Public Works Authority (the “Public Works Authority”), the Wewoka Industrial Authority (the “Industrial Authority”) and the Citizens Improvement League of Wewoka. Included in this report are government-wide statements for each of the three categories of activities – governmental, business-type, and the discretely-presented component unit. The government-wide financial statements present the complete financial picture of the City as applicable to the modified cash basis of accounting. They present 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 than the government-wide statements by providing information about the City’s most significant funds.



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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-financial factors, however, such as changes in the City’s sales tax base, the 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 and include only those City assets and liabilities resulting from cash transactions. In the Statement of Net Position and the 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, and streets. Sales taxes, franchise fees, fines, and state and federal grants finance most of these activities; and Business-type activities – Activities where the City charges a fee to customers to help cover all or most of the cost of certain services it provides are reported here. The City’s water, sewer, and sanitation utilities are reported as business-type activities. A third type of activity, that of a discretely-presented component unit, is also presented here. 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 certain taxes, grants, and other money. The City has two kinds of funds – governmental and proprietary. 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. 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. Proprietary funds - When the City, through the Public Works Authority, charges customers for the services it provides, these services are generally reported in proprietary funds. Proprietary funds are also reported on the modified cash basis of accounting. The City’s proprietary funds are the Wewoka Public Works Authority that accounts for the operation of the water, sewer, and sanitation activities and the Wewoka Industrial Authority that accounts for the operation of the industrial development activities of the City.



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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 25-42 of this report. Other Information In addition to the basic financial statements and accompanying notes, this report also presents Budgetary Comparison Schedules for the General Fund and TIF Revenue Fund, combining and individual fund financial statements and schedules, and a schedule of expenditures of federal and state grant awards. THE CITY AS A WHOLE For the year ended June 30, 2019, net position on a modified cash basis for the governmental and business-type activities increased $414,003.

Net Position (Modified Cash Basis)

June 30, 2019

Governmental Activities

Business-typeActivities Total

Beginning net position 1,242,137$ 493,710$ 1,735,847$ Increase (decrease) 468,337 (54,334) 414,003 Ending net position 1,710,474$ 439,376$ 2,149,850$

Following is a summary of net position reported on a modified cash basis for the City of Wewoka.

Total Percentage

Change

2019 2018 2019 2018 2019 2018

Assets 1,710,577$ 1,814,457$ 533,076$ 572,214$ 2,243,653$ 2,386,671$ -6% Total assets 1,710,577 1,814,457 533,076 572,214 2,243,653 2,386,671 -6%

Liabilities 103 106 93,700 78,504 93,803 78,610 19% Total liabilities 103 106 93,700 78,504 93,803 78,610 19%Net position:Restricted 1,020,907 857,990 149,649 147,936 1,170,556 1,005,926 16%Unrestricted 689,567 384,147 289,727 345,774 979,294 729,921 34% Total net position 1,710,474$ 1,242,137$ 439,376$ 493,710$ 2,149,850$ 1,735,847$ 24%

Governmental ActivitiesBusiness-type

Activities Total

A portion of the City’s net position, $1,170,556, represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position, $979,294, may be used to meet the government’s ongoing needs.



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Changes in Net Position (Modified Cash Basis) Year Ended June 30, 2019

Total Percentage

Change

2019 2018 2019 2018 2019 2018

Revenues:

Program revenues:

Charges for Services 501,808$ 484,180$ 1,740,900$ 1,892,491$ 2,242,708$ 2,376,671$ -6%

Grants & Contributions 96,848 90,379 - - 96,848 90,379 7%

Capital Grants, Debt Proceeds & Contributions 70,110 377,895 106,268 509,267 176,378 887,162 -80%

General Revenues:

Sales and Use Tax 973,566 935,612 - - 973,566 935,612 4%

Other Taxes 457,562 438,556 - - 457,562 438,556 4%

Other General Revenues 217,868 140,790 50,098 201,721 267,966 342,511 -22%

Total Revenues 2,317,762 2,467,412 1,897,266 2,603,479 4,215,028 5,070,891 -17%

Program Expenses:

General Government 497,272$ 548,655$ - - 497,272 548,655 -9%

Public Safety 1,035,336 988,413 - - 1,035,336 988,413 5%

Highways and Streets 139,226 157,883 - - 139,226 157,883 -12%

Culture and Recreation 349,456 327,341 - - 349,456 327,341 7%

Economic Development 49,146 163,624 - - 49,146 163,624 -70%

Interest on Long-Term Debt 7,915 5,189 - - 7,915 5,189 53%

Water - - 634,193 640,805 634,193 640,805 -1%

Sewer - - 604,214 591,602 604,214 591,602 2%

Sanitation - - 325,934 334,907 325,934 334,907 -3%

Industrial Development - - 158,333 392,953 158,333 392,953 -60%

Total Expenses 2,078,351 2,191,105 1,722,674 1,960,267 3,801,025 4,151,372 -8%

Excess 239,411 276,307 174,592 643,212 414,003 919,519 -55%

Net Transfers In (Out) 228,926 204,488 (228,926) (204,488) - - 0%

Increase/(Decrease) in Net Position 468,337$ 480,795$ (54,334)$ 438,724$ 414,003$ 919,519$ -55%

Beginning Net Position 1,242,137 761,342 493,710 54,986 1,735,847 816,328 113%

Ending Net Position 1,710,474$ 1,242,137$ 439,376$ 493,710$ 2,149,850$ 1,735,847$ 24%

TotalGovernmental

ActivitiesBusiness-type

Activities

Governmental Activities The City’s governmental activities had an overall increase in net position of $468,337. This increase is primarily due to the transfer to the governmental activities from the business-type activities in the amount of $228,926 and a decrease in economic development expenses in the amount of $114,478.



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Net Revenue (Expense) of Governmental Activities

% Inc. % Inc.(Dec.) (Dec.)

2019 2018 2019 2018

General government 497,272$ 548,655$ -9% (350,595)$ (408,016)$ -14%Public safety 1,035,336 988,413 5% (631,334) (550,321) 15%Highways and streets 155,749 157,883 -1% (122,664) 128,849 -195%Culture and recreation 332,933 327,341 2% (247,931) (240,950) 3%Economic development 49,146 163,624 -70% (49,146) (163,024) -70%Interest on long-term debt 7,915 5,189 53% (7,915) (5,189) 53%

Total 2,078,351$ 2,191,105$ -5% (1,409,585)$ (1,238,651)$ 14%

Total Expenseof Services

Net Revenue(Expense)of Services

Business-type Activities The business-type activities had a decrease in net position of $54,334. This decrease is due in part to debt proceeds of $55,000 in the Industrial Authority and also capital grants in the amount of $454,267 in the Public Works Authority that were received in the prior year that were not in the current year.

Net Revenue (Expense) of Business-Type Activities

% Inc. % Inc.Dec. Dec.

2019 2018 2019 2018

Water 634,193$ 640,805$ -1% 256,822$ 105,327$ 144%Sewer 604,214 591,602 2% (132,632) 331,299 -140%Sanitation 325,934 334,907 -3% 115,910 110,342 5%Industrial Development 158,333 392,953 -60% (115,606) (105,477) 10%

Total 1,722,674$ 1,960,267$ -12% 124,494$ 441,491$ -72%

of Services

Net Revenue(Expense)of Services

Total Expense

A FINANCIAL ANALYSIS OF THE CITY’S FUNDS

As the City completed its 2019 fiscal year, the governmental funds reported a combined fund balance of $1,710,474. For the year ended June 30, 2019, the General Fund’s total fund balance increased by $298,869.



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Budgetary Highlights

For the year ended June 30, 2019, the General Fund reported actual budgetary basis revenues over final estimates by $169,991 or a 5.7% positive variance. General Fund actual expenditures were under final appropriations by $372,392 or an 11.6% positive variance. ECONOMIC FACTORS AND NEXT YEAR’S ESTIMATES The following information outlines significant known factors that will affect subsequent year finances:

The FY 2020 budget has been prepared using projected revenues based on collections during the FY 2019 and remains relatively consistent with the prior year’s budget.

Contacting the City’s Financial Management This report is designed to provide our citizens, taxpayers, customers and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the money it receives. If you have questions about this report or need additional financial information, please contact Mark Mosley, City Manager, or Theresa Barkhimer, City Clerk, at 123 S. Mekusukey, Wewoka, Oklahoma 74884 or telephone at 405-257-2413.

CITY OF WEWOKA, OKLAHOMA ANNUAL FINANCIAL REPORT


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BASIC FINANCIAL STATEMENTS – STATEMENTS OF NET POSITION AND ACTIVITIES



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Statement of Net Position (Modified Cash Basis) – June 30, 2019

Component Unit

ASSETSGovernmental

ActivitiesBusiness-type

Activities Total

(CILOW) Citizens Improvement

League of WewokaCash and cash equivalents 1,754,183$ 394,372$ 2,148,555$ 5,092$ Investments - 91,987 91,987 - Internal balances (46,717) 46,717 - - Deposits with insurance pool 2,579 - 2,579 Due from employees 532 - 532

Total Assets 1,710,577 533,076 2,243,653 5,092

LIABILITIESDue to other governments 103 - 103 - Long-term liabilities:

Due within one year - utility deposits - 18,740 18,740 - Due in more than one year - utility deposits - 74,960 74,960 -

Total Liabilities 103 93,700 93,803 -

NET POSITIONRestricted for:

Street purposes 10,166 - 10,166 - Cemetery 24,173 - 24,173 - Public safety 5,492 - 5,492 - Street purposes 161,941 - 161,941 - Capital projects 319,992 149,649 469,641 - Museum Arts Council operations 31,144 - 31,144 - Debt service 109,105 - 109,105 - Library operations 12,701 - 12,701 - Library prize 261 - 261 - TIF projects 245,297 - 245,297 - Economic development 100,635 - 100,635 10,357

Unrestricted (deficit) 689,567 289,727 979,294 (5,265) Total net position 1,710,474$ 439,376$ 2,149,850$ 5,092$

Primary Government

See accompanying notes to the basic financial statements.



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Statement of Activities (Modified Cash Basis) – Year Ended June 30, 2019

Program Revenue Component Unit

Functions/Programs ExpensesCharges for

Services

Operating Grants and

Contributions

Capital Grants, Debt

Proceeds and Contributions

Governmental Activities

Business-type Activities Total

(CILOW) Citizens Improvement

League of WewokaPrimary government

Governmental ActivitiesGeneral Government 497,272$ 129,677$ -$ 17,000$ (350,595)$ -$ (350,595)$ -$ Public Safety 1,035,336 295,636 55,256 53,110 (631,334) - (631,334) - Highways and Streets 139,226 5,878 27,207 - (106,141) - (106,141) - Culture and Recreation 349,456 70,617 14,385 - (264,454) - (264,454) - Economic Development 49,146 - - - (49,146) - (49,146) - Interest on Long-term debt 7,915 - - - (7,915) - (7,915) -

Total governmental activities 2,078,351 501,808 96,848 70,110 (1,409,585) - (1,409,585) -

Business-type activities:Water 634,193 784,747 - 106,268 - 256,822 256,822 - Wastewater 604,214 471,582 - - - (132,632) (132,632) - Sanitation 325,934 441,844 - - - 115,910 115,910 - Industrial Development 158,333 42,727 - - - (115,606) (115,606) -

Total business-type activities 1,722,674 1,740,900 - 106,268 - 124,494 124,494 -

Total primary government 3,801,025$ 2,242,708$ 96,848$ 176,378$ (1,409,585) 124,494 (1,285,091) -

Component UnitPark and Recreation (CILOW) 3,227$ -$ -$ 2,646$ (581)

General revenues:Taxes:

Sales and use tax 973,566 - 973,566 - Property taxes 117,623 - 117,623 - Franchise and public service taxes 146,175 - 146,175 - Hotel/motel tax 86,455 - 86,455 - Tax increment financing 107,309 - 107,309 -

Intergovernmental revenue not restricted to specific programs 43,400 - 43,400 - Investment income 4,402 1,585 5,987 - Miscellaneous 170,066 48,513 218,579 - Transfers - Internal activity 228,926 (228,926) - -

Total general revenues and transfers 1,877,922 (178,828) 1,699,094 - Change in net position 468,337 (54,334) 414,003 (581)

Net position - beginning 1,242,137 493,710 1,735,847 5,673 Net position - ending 1,710,474$ 439,376$ 2,149,850$ 5,092$

Net (Expense) Revenue and Changes in Net Position




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BASIC FINANCIAL STATEMENTS – GOVERNMENTAL FUNDS



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Governmental Funds Balance Sheet (Modified Cash Basis) – June 30, 2019

General FundTIF Revenue

Fund

Capital Improvement

Fund

2014 GO Bond Capital Project

FundDebt Service

Fund

Other Governmental

Funds

Total Governmental

FundsASSETSCash and cash equivalents 793,599$ 191,668$ 225,670$ 191,697$ 110,121$ 241,428$ 1,754,183$ Due from other funds 26,157 53,629 69,750 - - 15,066 164,602 Deposits with insurance pool 2,579 - - - - - 2,579 Due from employee 532 - - - - - 532

Total assets 822,867 245,297 295,420 191,697 110,121 256,494 1,921,896

LIABILITIES AND FUND BALANCESLiabilities:

Due to other funds 189,263 - 939 - - 21,117 211,319 Due to other governments - - - - - 103 103

Total liabilities 189,263 - 939 - - 21,220 211,422

Fund balances:Restricted - 245,297 290,236 191,697 109,105 184,572 1,020,907 Assigned 20,054 - 4,245 - 1,016 52,106 77,421

Unassigned (deficit) 613,550 - - - - (1,404) 612,146 Total fund balances 633,604 245,297 294,481 191,697 110,121 235,274 1,710,474

Total liabilities and fund balances 822,867$ 245,297$ 295,420$ 191,697$ 110,121$ 256,494$ 1,921,896$




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Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances (Modified Cash Basis) – Year Ended June 30, 2019


Fund

Capital Improvement

Fund

2014 GO Bond

Capital Project Fund

Debt Service Fund

Other Governmental

Funds

Total Governmental

Funds REVENUESTaxes 884,690$ 107,309$ 235,051$ -$ 117,623$ 86,455$ 1,431,128$ Intergovernmental 43,400 - - - - 53,085 96,485 Charges for services 363,932 - - - - 5,276 369,208 Fines and forfeitures 110,095 - - - - - 110,095 Licenses and permits 22,505 - - - - - 22,505 Investment income 1,462 - 596 579 319 1,446 4,402 Miscellaneous 225,514 - - - - 6,175 231,689 Total revenues 1,651,598 107,309 235,647 579 117,942 152,437 2,265,512

EXPENDITURESCurrent:

General government 398,337 - - - - - 398,337 Public safety 952,549 - - - - - 952,549 Higways and streets 103,239 - - - - 21,512 124,751 Culture and recreation 328,019 - - - - 6,560 334,579

Capital outlay 81,608 7,691 88,788 14,940 - 78,427 271,454 Debt service:

Principal retirement 8,049 - 23,190 - 100,000 - 131,239 Interest expenditures 1,629 - 5,668 - 18,900 - 26,197

Total Expenditures 1,873,430 7,691 117,646 14,940 118,900 106,499 2,239,106 Excess (deficiency) of revenues over expenditures (221,832) 99,618 118,001 (14,361) (958) 45,938 26,406

OTHER FINANCING SOURCES (USES) Proceeds from capital lease financing 52,250 - - - - - 52,250 Transfers in 529,764 - 8,829 - - - 538,593 Transfers out (61,313) (56,319) (31,280) - - - (148,912) Total other financing sources (uses) 520,701 (56,319) (22,451) - - - 441,931

Net change in fund balances 298,869 43,299 95,550 (14,361) (958) 45,938 468,337 Fund balances - beginning 334,735 201,998 198,931 206,058 111,079 189,336 1,242,137 Fund balances - ending 633,604$ 245,297$ 294,481$ 191,697$ 110,121$ 235,274$ 1,710,474$




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BASIC FINANCIAL STATEMENTS – PROPRIETARY FUNDS



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Proprietary Funds Statement of Net Position (Modified Cash Basis) – June 30, 2019

Wewoka Public Works

Authority

Wewoka Industrial Authority Total

ASSETSCurrent assets:Cash and cash equivalents 143,060$ 101,663$ 244,723$ Restricted: Cash and cash equivalents 149,571 78 149,649 Investments 91,987 - 91,987 Due from other funds 3,981 68,556 72,537

Total assets 388,599 170,297 558,896

LIABILITIESCurrent Liabilities:

Due to other funds 22,426 3,394 25,820 Deposits subject to refund 18,740 - 18,740

Total current liabilities 41,166 3,394 44,560 Non-current liabilities:

Deposits subject to refund 74,960 - 74,960 Total non-current liabilities 74,960 - 74,960

Total liabilities 116,126 3,394 119,520

NET POSITIONRestricted for capital projects 149,571 78 149,649 Unrestricted 122,902 166,825 289,727

Total net position 272,473$ 166,903$ 439,376$




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Proprietary Funds Statement of Revenues, Expenses and Changes in Net Position (Modified Cash Basis) – Year Ended June 30, 2019

Wewoka

Public Works Authority


REVENUESWater 756,320$ -$ 756,320$ Sewer 471,582 - 471,582 Sanitation 441,844 - 441,844 Auto meter surcharge 28,427 - 28,427 Rental fees - 42,727 42,727 Total operating revenues 1,698,173 42,727 1,740,900

OPERATING EXPENSESAdministration 171,193 - 171,193 Water plant 228,592 - 228,592 Sanitation 195,021 - 195,021 Disposal plant 99,131 - 99,131 Distribution 323,533 - 323,533 Industrial development - 24,648 24,648

Total Operating Expenses 1,017,470 24,648 1,042,118 Operating income 680,703 18,079 698,782

NON-OPERATING REVENUES (EXPENSES)Interest and investment revenue 1,297 288 1,585 Lease payments income: Return of principal 18,334 26,998 45,332 Interest - 3,181 3,181 Capital outlay (121,598) (3,220) (124,818) Capital grant received 106,268 - 106,268 Debt service: Principal retirement (114,079) (110,787) (224,866) Interest expense (134,944) (35,173) (170,117)

Total non-operating revenue (expenses) (244,722) (118,713) (363,435) Income (loss) before transfers 435,981 (100,634) 335,347

Transfers in 24,122 137,078 161,200 Transfers out (543,258) (7,623) (550,881)

Change in net position (83,155) 28,821 (54,334) Total net position - beginning 355,628 138,082 493,710 Total net position - ending 272,473$ 166,903$ 439,376$




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Proprietary Funds Statement of Cash Flows (Modified Cash Basis) – Year Ended June 30, 2019

Wewoka Public Works

Authority


CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers 1,698,173$ 28,506$ 1,726,679$ Payments to suppliers (514,262) (22,974) (537,236) Payments to employees (503,208) - (503,208) Receipts of customer meter deposits 27,082 - 27,082 Refunds of customer meter deposits (11,886) - (11,886) Other receipts 29,596 30,179 59,775

Net cash provided by operating activities 725,495 35,711 761,206

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIESTransfers from other funds 24,122 137,078 161,200 Transfers to other funds (543,258) (7,623) (550,881)

Net cash provided by (used in) noncapital financing activities (519,136) 129,455 (389,681)

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESPurchases of capital assets (121,598) (3,220) (124,818) Proceeds from capital grant 106,268 - 106,268 Principal paid on debt (114,079) (110,787) (224,866) Interest paid on debt (134,944) (35,173) (170,117)

Net cash provided by (used in) capital and related financing activities (264,353) (149,180) (413,533)

CASH FLOWS FROM INVESTING ACTIVITIESInterest and dividends 1,297 288 1,585 Sale (Purchase) of investments (367) - (367)

Net cash provided by investing activities 930 288 1,218

Net increase (decrease) in cash and cash equivalents (57,064) 16,274 (40,790)

Balances - beginning of year 349,695 85,467 435,162

Balances - end of year 292,631$ 101,741$ 394,372$

Reconciliation to Statement of Net Position:Cash and cash equivalents 143,060$ 101,663$ 244,723$ Restricted cash and cash equivalents - current 149,571 78 149,649

Total cash and cash equivalents, end of year 292,631$ 101,741$ 394,372$

Reconciliation of operating income to net cash provided by operating activities:

Operating income 680,703$ 18,079$ 698,782$ Adjustments to reconcile operating income to net cash provided by operating activities:

Lease payments income 18,334 30,179 48,513 Change in assets and liabilities:

Due from other funds 13,123 (14,221) (1,098) Due to other funds (1,861) 1,674 (187) Meter deposit liability 15,196 - 15,196

Net cash provided by operating activities 725,495$ 35,711$ 761,206$




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FOOTNOTES TO THE BASIC FINANCIAL STATEMENTS



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1. Summary of Significant Accounting Policies A. Financial Reporting Entity

The City’s financial reporting entity includes the primary government (City of Wewoka), two blended component units and one discretely-presented component unit as follows:

The City of Wewoka – an incorporated City that operates the public safety, streets, culture

and recreation, economic development and administrative activities of the City – reported as the primary government

The Wewoka Public Works Authority (WPWA) – public trust created to operate the

water, wastewater, and sanitation services of the City, with the City Council members serving as the trustees, a blended component unit, considered part of the primary government

The Wewoka Industrial Authority (WIA) – public trust created pursuant to finance,

develop and promote industrial development activities of the City, with the City Council members serving as the trustees, a blended component unit, considered part of the primary government

The Citizens Improvement League of Wewoka (CILOW) – public trust created to

finance, develop and promote improvements in the City, with the City Council members appointing the trustees – reported as a discretely-presented component unit

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 61. The component units are Public Trusts established pursuant to Title 60 of Oklahoma State law. A Public Trust (Authority) has 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 Authorities. 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 of 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 the Public Trusts are dissolved. As required by state law, all debt obligations incurred by the above trusts must be approved by two-thirds vote of the City Council. This is considered sufficient imposition of will to demonstrate financial accountability and to include the trusts within the City’s financial reporting entity. The public trusts do not issue separate annual financial statements.



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B. Basis of Presentation and Accounting

Government-Wide Financial Statements: The statements of net position and activities are reported on a modified cash basis of accounting. The 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 only the adjustments for the following balances arising from cash transactions: cash-based interfund receivables and payables other cash-based receivables/payables investments utility deposit liabilities

As a result of the use of this 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.

Program revenues within the statement of activities are derived directly from each activity or from parties outside the City’s taxpayers. The City has the following program revenues in each activity:

General government: License and permits, rents, and operating grants Public safety: Fine revenue, ambulance fees, fire runs, operating grants and capital grants Streets and highways: Gas excise and commercial vehicle taxes, street light surcharge Culture and recreation: Recreation fees, operating grants and capital grants Economic development: Donations for golf course improvements Cemetery: Lot sales and interments

Business-type activities are also reported on a modified cash basis.

Fund Financial Statements: The funds of the financial reporting entity are described below. Governmental Funds:

The City’s governmental funds are comprised of the following:

Major Funds: General Fund – accounts for all activities not accounted for in other special-purpose funds TIF Revenue Fund – accounts for the tax increments collected and paid to the tax

increment district to facilitate the financing of eligible project costs as outlined in Economic Development Project Plan



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Capital Improvement Fund – a capital project fund that accounts for funds received and

expended for major capital projects

2014 G.O. Bond Capital Project Fund – a capital project fund that accounts for funds received and expended for general obligation bond activity

Debt Service Fund (Sinking Fund) - accounts for ad-valorem taxes levied by the City for use in retiring General Obligation debt Non-Major Funds (Reported as Other Governmental Funds): Special Revenue Funds: Street and Alley Fund – accounts for revenues from gasoline and vehicle taxes used for

street maintenance

Library Grant Fund – accounts for library grant revenues and expenditures

Fire Department Grant Fund – accounts for fire department grant revenues and expenditures

Library Prize Fund – accounts for library donation revenues and expenditures

DSSC Fund – accounts for revenues and expenses related to Arts Council and OAC local

government grants, along with green fee sales tax receipts and disbursements

Senior Citizen Fund – accounts for revenues and expenditures related to CENA grants Economic Development Fund – a special revenue fund that accounts for activities

specifically related to development of new and existing business activities that further economic development of the community

Police-DA Seizure Fund – accounts for the county shared seizure and related grant monies

and expenditures Capital Project Fund:

Cemetery Fund – accounts for cemetery revenues restricted for capital and maintenance

REAP Grant Fund – accounts for the revenues and expenditures related to REAP grants

CDBG Fund – a capital project fund that accounts for revenues and expenditures related to

CDBG grants



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The governmental funds are reported on a modified cash basis of accounting. Only current financial assets and liabilities resulting from cash transactions are included on the fund balance sheets. The operating statements present sources and uses of available spendable financial resources during a given period. These fund financial statements use fund balance as their measure of available spendable financial resources at the end of the period: Proprietary Funds:

The City’s proprietary funds include the following:

Wewoka Public Works Authority (WPWA) – accounts for the operation of the water,

wastewater, and sanitation activities Wewoka Industrial Authority (WIA) – accounts for operations to finance, develop and

promote industrial development activities

The proprietary funds are also reported on the modified cash basis, as defined above. For purposes of the statement of revenues, expenses and changes in fund net position, operating revenues and expenses are considered those whose cash flows are related to operating activities, while revenues and expenses related to financing, capital and investing activities are reported as non-operating or transfers and contributions.

All of the above noted governmental funds are legally required to adopt annual budgets or appropriations. The public trusts (or Authorities) are 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.

C. Cash, Cash Equivalents, and Investments

Cash and cash equivalents includes all demand and savings accounts, certificates of deposit, and any short-term investments with an original maturity of three months or less. Investments consist of long-term certificates of deposits and are reported at cost.

D. Capital Assets and Depreciation

Due to the use of the modified cash basis of accounting as described in Note 1B, capital assets and related depreciation are not reported in the financial statements, and are reported as expenditures or expenses when purchased.

E. Long-Term Debt

Due to the use of the modified cash basis of accounting as described in Note 1B, long-term debt obligations are not reported in the financial statements. However, the amount of long-term debt issued and outstanding at the end of the fiscal year is reported as a commitment in Note 11.



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F. Compensated Absences

As a result of the use of the modified cash basis of accounting, as described in Note 1B, liabilities related to accrued compensated absences are not recorded in the financial statements. Expenditures/expenses related to compensated absences are recorded when paid. The amount of accrued compensated absences for accumulated, unpaid compensatory time that would be due employees upon termination is reported as a commitment in Note 11.

G. Fund Balances and Net Position

Net Position: Net position is displayed in two components:

a. Restricted net position - Consists of net position with constraints placed on the use either

by 1) external groups such as creditors, grantors, contributors, or laws and regulations of other governments, or 2) law through constitutional provisions or enabling legislation. b. Unrestricted net position - All other net position that does not meet the definition of “restricted”.

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 Balance: Governmental fund equity is classified as fund balance. Fund balance is further classified as nonspendable, restricted, committed, assigned, and unassigned. These classifications are defined as: a. Nonspendable – includes amounts that cannot be spent because they are either (1) not in

spendable form or (2) 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 – includes amounts that can only be used for specific purposes pursuant to

constraints imposed by formal action of the City’s highest level of decision-making authority. The City’s highest level of decision-making authority is made by ordinance. Currently, the City has no committed fund balance.

d. Assigned – includes amounts that are constrained by the City’s intent to be used for specific purposes but are neither restricted nor committed. Assignments of fund balance may be made by City Council action or management decision when the City Council has delegated that authority. Assignments for transfers and interest income for governmental funds are made through the budgetary process.



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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 the unrestricted fund balance when an expense is incurred for purposes for which both restricted and unrestricted fund balance 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 purposes for which amounts in any of those unrestricted fund balance classifications could be used.

H. Internal and Interfund Balances and Transfers

The City’s policy is to eliminate interfund transfers and balances in the statement of activities and net position 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 then offset in the total column in the government-wide statements. Internal transfers and balances between funds are not eliminated in the fund financial statements.

2. Deposits and Investments

For the year ended June 30, 2019, the City recognized $5,987 of investment income. Due to the minimal rates of return on allowable investments in the current environment, most of the City’s deposits are in demand and short-term time deposits. At June 30, 2019, the primary government held the following deposits and investments:

Carrying

Primary Government ValueDeposits: Demand deposits 2,148,555$ Time deposits - certificates of deposit 91,987 Total Deposits and Investments 2,240,542$

Reconciliation to Statement of Net Position: Cash and cash equivalents 2,148,555$ Investments 91,987

2,240,542$

Component Unit

Citizens Improvement League of Wewoka: Demand deposits 5,092$

Custody Credit Risk - Custodial credit risk is the risk that in the event of a bank failure, the government deposits may not be returned to it. The City is governed by the State Public Deposit Act which requires that the City obtain and hold collateral whose fair value exceeds the amount of uninsured deposits. Investment securities are exposed to custody credit risk if the securities are uninsured, are not registered in the name of the government, and if held by either a counterparty or a counterparty’s trust, department or agent, but not in the government’s name.



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Custodial Credit Risk – Custodial credit risk is the risk that in the event of a bank failure, the government deposits may not be returned to it. The city is governed by the State Public Deposit Act which requires that the city obtain and hold collateral whose fair value exceeds the amount of uninsured deposits. Investment securities are exposed to custody credit risk if the securities are uninsured, are not registered in the name of the government, and if held by either a counterparty or a counterparty’s trust, department or agent, but not in the government’s name. As of June 30, 2019, the City was under-collateralized at Security State Bank by $379,350. Investment Interest Rate Risk – Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The City has no investment policy that limits investments based on maturity. The City discloses its exposure to interest rate risk by disclosing the maturity dates of its various investments, where applicable. Investment Credit Risk - The City has no investment policy that limits its investment choices other than the limitations of state law that generally authorize investments 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 deposit or savings accounts 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 (5) government money market funds regulated by the SEC. These investment limitations do not apply to the City’s public trusts.

As of June 30, 2019, the City was not exposed to investment credit risk as defined above. Concentration of Investment Credit Risk - Exposure to concentration of credit risk is considered to exist when investments in any one issuer represent a significant percent of total investments of the City (any over 5% are disclosed). Investments issued or explicitly guaranteed by the U.S. government and investments in mutual funds, external investment pools, and other pooled investments are excluded from this consideration. The City has no investment policy regarding concentration of credit risk. At June 30, 2019, the City had no concentration of credit risk as defined above. Restricted Cash and Investments – The amounts reported as restricted assets on the statement of net position are comprised of amounts restricted for utility deposits and capital project accounts. The restricted assets as of June 30, 2019 are as follows:

Cash and Cash

Type of Restricted Assets Equivalents Investments Total

Utility Deposits -$ 91,987$ 91,987$ Capital Project Accounts 149,649 - 149,649 Total Restricted Assets 149,649$ 91,987$ 241,636$



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3. Lease/Note Receivable Expanded Solutions, LLC The City of Wewoka, Oklahoma, acting through its Public Works and Industrial Authorities, has

entered into various agreements with Expanded Solutions, LLC, Wewoka, Oklahoma. Under terms of these agreements, the Industrial Authority has purchased real property and improvements from Expanded Solutions, LLC. The proceeds from this purchase, along with other funds, were used by Expanded Solutions, LLC to make substantial upgrades and improvements to the property. The Industrial Authority has also agreed to sell back the same property to Expanded Solutions, LLC under terms of a twenty year capital lease. Lease payments of $1,667 commenced July 1, 2008, and are due the first day of each month thereafter with final payment due June 1, 2026. Funds for these transactions were provided by a contract with the Oklahoma Department of Commerce contract number 10992 ED 87. The balance outstanding on this lease at June 30, 2019 was $141,649.

Royal Fabrication (USA Tank) The City of Wewoka, Oklahoma, acting through its Public Works and Industrial Authorities, has

entered into various agreements with USA Tank, Wewoka, Oklahoma. Lease payments of $8,201 commenced February 15, 2014, and are due quarterly thereafter with final payment due October 15, 2020. Funds for these transactions were provided by a loan with The Central OK Development Trust. The balance outstanding on this lease at June 30, 2019 was $46,961.

Since the City reports on a modified cash basis of accounting, lease receivables are not reported in

the financial statements. 4. Sales Tax Revenue

Sales tax revenue represents a four cent tax on each dollar of taxable sales within the City. Ord. 266 – 1 cent levied for general operations Ord. 315 – 1 cent levied for general operations Ord. 346 – 1 cent levied for various purposes as follows: 10% for economic development,

20% for general operations, 20% for capital outlay/equipment, 25% for capital improvements to the water and sewer systems, and 25% for capital improvements to the street system.

Ord. 451 – 1 cent levied for various purposes as follows: 50% for general operations, 20% for capital improvements to the water and sewer systems, 20% for capital outlay/equipment, and 10% for economic development.

Therefore, 2.9 cents are recorded in the General Fund of which 2.7 cents is retained and .2 cents are

transferred to the Industrial Authority for economic development, and 1.1 cents recorded in the Capital Improvement Fund (.40 cent for equipment, .45 cent for water and sewer, and .25 cent for streets).



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5. Property Tax Levy

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 voters and any court-assessed judgments. At the present time the City levies a property tax to fund the annual debt service requirements of general obligation bonds outstanding. The property tax levy, as determined by the City’s debt service needs, is submitted to the County Excise Board for approval. County assessors determine the taxable value of real estate and personal property in the County. A State Board of Equalization hears complaints on real estate values with the power to equalize assessments. Under present State law, the ratio of assessed value to true value cannot be less than 11 percent nor more than 13½ percent.

Property taxes levied by the City are billed and collected by the County Treasurer’s Office and remitted to the City in the month following collection. Property taxes are levied normally in October and are due in equal installments on December 31 and March 31. Property taxes unpaid for the fiscal year are attached by an enforceable lien on property in the following October. Property taxes levied, but not collected during the year or within 60 days of year-end are reported as deferred revenue. For the year ended June 30, 2019, the City’s net assessed valuation of taxable property was $8,173,186. The taxes levied by the City per $1,000 of net assessed valuation for the year ended June 30, 2019 was $14.52.

6. Customer Deposits

Refundable customer deposits reported as a liability within the Statement of Net Position are comprised of utility deposits payable.

Current $18,740 Noncurrent 74,960 $93,700 7. Schedule of Transfers Between Funds and Legal Entities

Internal balances between funds and legal entities are comprised of the following:



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Due From Due To Amount Nature of Balance

General Fund Library Grant Fund 343$ Reclassification to fundGeneral Fund Capital Improvement Fund 873 Sales tax revenue portionGeneral Fund Street and Alley Fund 1,201 Reclassification to fundGeneral Fund WIA Fund 122 Sales tax revenue portionGeneral Fund WIA Fund 48,713 Loan agreementGeneral Fund Economic Development Fund 4,796 Expenses to be reimbursedGeneral Fund TIF Fund 53,629 Deposited to wrong fundGeneral Fund Capital Improvement Fund 58,902 Sales tax revenue not yet transferredGeneral Fund WIA 10,709 Sales tax revenue not yet transferredPolice Dept Special Account Capital Improvement Fund 9,975 Expenses to be reimbursedCapital Improvement Fund REAP Grant Fund 808 Reclassification to fundFire Department Grant Fund General Fund 9,459 Expenses to be reimbursedCDBG Fund General Fund 2,000 Reclassification to fundWPWA Fund General Fund 14,646 To cover negative cashSenior Citizens Fund General Fund 52 Expenses to be reimbursedCIP Fund Cemetery Care Fund 131 Deposited to wrong fundCemetery Care Fund Meter Deposit 150 Deposited to wrong fundDSSC Fund WPWA Fund 444 Expenses to be reimbursedDSSC Fund WIA Fund 213 Expenses to be reimbursedEconomic Development WIA Fund 8,799 Expenses to be reimbursedWPWA Fund DSSC Fund 7,780 Expenses to be reimbursedWIA Fund WPWA Fund 1,720 Reclassification to fundWIA Fund WPWA Fund 1,667 WIA Fund Library Grant Fund 7

Total 237,139$

Reconciliation to Fund Financial Statements:Due From Due To Net Internal Balances

Governmental Funds 164,602$ (211,319)$ (46,717)$ Proprietary Funds 72,537 (25,820) 46,717

Total 237,139$ (237,139)$ -$

Transfers between legal entities are comprised of the following:

Transfer From Transfer To Amount Nature of Transfer

General Fund WIA 42,736$ Sales tax transferGeneral Fund WIA 15,495 Debt paymentsGeneral Fund Capital Improvement Fund 3,082 Debt paymentsTIFF Revenue Fund WIA 56,319 Debt paymentsCapital Improvement Fund WPWA 22,246 Debt paymentsWPWA General Fund 524,925 Operating subsidyWPWA WIA 18,333 Debt paymentsWIA WPWA 1,876 Debt paymentsCapital Improvement Fund WIA 4,195 Debt paymentsWIA Capital Improvement Fund 5,747 Debt paymentsCapital Improvement Fund General Fund 4,839 Expenditure in wrong fund

699,793$

Reconciliation:Transfers In Transfers Out Net Transfers

Governmental Funds 538,593$ (148,912)$ 389,681$ Proprietary Funds 161,200 (550,881) (389,681) Total 699,793$ (699,793)$ -$

Reconciliation to Statement of Activities:Net Transfers

Net Transfers (389,681)$ Business-type activities from governmental funds 160,755 Total Transfers - Internal Activity (228,926)$



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8. Fund Equity and Net Position

The following tables show the fund balance classifications as shown in the Governmental Funds

Balance Sheet:


Fund

Capital Improvement

Fund

2014 GO Bond Capital Project

FundDebt Service

Fund

Other Governmental

Funds Total

Fund Balance:Restricted For:

Street Capital Projects -$ -$ 161,941$ -$ -$ -$ 161,941$ Water/Sewer Capital Projects - - 107,031 - - - 107,031 Capital Projects - - 21,264 191,697 - - 212,961 Economic Development - - - - - 100,635 100,635 Street and Alley - - - - - 10,166 10,166 Fire Department - - - - - 5,360 5,360 Police Department - - - - - 132 132 Seminole Nation Museum - - - - - 31,144 31,144 Library - - - - - 12,962 12,962 Cemetery Capital Outlay - - - - - 24,173 24,173 TIF District - 245,297 - - - - 245,297 Debt Service - - - - 109,105 - 109,105

Sub-total Restricted - 245,297 290,236 191,697 109,105 184,572 1,020,907

Assigned to:Insurance Loss 20,054 - - - - - 20,054 Capital Projects - - 4,245 - - - 4,245 Economic Development - - - - - 38,094 38,094 Street and Alley - - - - - 180 180 Seminole Nation Museum - - - - - 2,961 2,961 Cemetery Capital Outlay - - - - - 10,871 10,871 Debt Service - - - - 1,016 - 1,016

Sub-total Assigned 20,054 - 4,245 - 1,016 52,106 77,421

Unassigned (deficit) 613,550 - - - - (1,404) 612,146

Total Fund Balance 633,604$ 245,297$ 294,481$ 191,697$ 110,121$ 235,274$ 1,710,474$

9. 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 by securing commercial insurance for all risks, except for participation in the Oklahoma Municipal Assurance Group risk entity pool for certain coverage. Management believes such insurance coverage is sufficient to preclude any significant uninsured losses to the City. Settled claims have not exceeded this insurance coverage in any of the past three fiscal years.



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10. Employee Retirement Plan Participation

The City participates in three employee 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 Public Employees Retirement System (OPERS) – a statewide cost-sharing plan

OFPRS:

Plan Summary Information: The City of Wewoka, as the employer, participates in the Firefighters Pension & retirement—a cost-sharing multiple-employer defined benefit pension plan administered by the Oklahoma Firefighters Pension & Retirement System (OFPRS). The OFPRS provides defined retirement benefits based on members’ final average compensation, age, and term of service. In addition, the retirement program provides for benefits upon disability and to survivors upon death of eligible members. Pursuant to the requirements of Title 11, section 22-102, the City must participate in the plan if they employ full-time or volunteer firefighters. The City has no responsibility or authority for the operation or administration of the pension program, nor has it any related liability, except for the current contribution requirements.

The OFPRS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to: OFPRS 4545 N. Lincoln Blvd., Suite 265 Oklahoma City, OK 73105-3414

Funding Policy: The City is required by state law to contribute 14% of covered payroll per year for each fulltime firefighter. The City, pays 3% of the employee portion while the employees contribute 6% for a total of 9% of covered payroll. For volunteer firefighters, the City is required to contribute $60 per year per volunteer, while there is no required contribution by the volunteer. The plan is funded by contributions from participants, employers, insurance premium taxes, and state appropriations, as necessary. The amount contributed for volunteer firefighters totaled $600 for the current fiscal year. Schedule of Retirement Plan Contributions OFPRS Cost-Sharing Plan

Required Amount Fiscal Year Contribution Contributed 2017 $39,539 $39,539 2018 $36,157 $36,157 2019 $36,786 $36,786



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OPPRS:

Plan Summary Information: The City of Wewoka, as the employer, participates in the Oklahoma Police Pension and Retirement Plan—a cost-sharing multiple-employer defined benefit pension plan administered by the Oklahoma Police Pension and Retirement System (OPPRS). The OPPRS defined benefit pension plan provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Pursuant to the requirements of Title 11, section 22-102, the City must participate in the plan if they employ a certain number of fulltime police officers. The City has no responsibility or authority for the operation or administration of the pension program, nor has it any related liability, except for the current contribution requirements. The OPPRS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to: OPPRS 1001 N.W. 63rd St., Suite 305 Oklahoma City, OK 73116-7335 Funding Policy: The City is required by state law to contribute 13% of covered payroll per year for each police officer. The City pays 3% of the employee portion while the employees contribute 5%, for a total of 8% of covered payroll. The plan is funded by contributions from participants, employers, insurance premium taxes, and state appropriations, as necessary. The OPPRS contributions are as follows: Schedule of Retirement Plan Contributions OPPRS Cost-Sharing Plan

Required Amount Fiscal Year Contribution Contributed

2017 $22,843 $22,843 2018 $22,153 $22,153 2019 $24,249 $24,249

OPERS:

Plan Summary Information: The City has provided a defined benefit plan for all of its full-time employees with the exception of the fire and police department, through Oklahoma Public Employees Retirement System (OPERS). The City, as employer, contributes 16.5% of the employee’s gross wages while the employees’ contribute 3.5%. The plan is funded by contributions from participants, employers, insurance premium taxes, and state appropriations, as necessary. For the year ended June 30, 2019, the City contributed $96,272 to the plan, while the employee contributions totaled $20,422.

A copy of the OPERS financial statements can be obtained from Oklahoma Public Employees Retirement System, 2101 N. Lincoln Blvd., Room 580, Oklahoma City, OK 73105.



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The OPERS contributions are as follows:

Required Amount Fiscal Year Contribution Contributed 2017 $105,324 $105,324 2018 $95,235 $95,235 2019 $96,272 $96,272

11. Commitments and Contingencies

Long-Term Debt and Debt Service Requirements

For the year ended June 30, 2019, the reporting entity’s long-term debt changed as follows:

Balance Due Balance Due Amount Due Type of Debt July 1, 2018 Additions Deductions June 30, 2019 Within One Year

Governmental Activities:

General obligation debt 600,000$ -$ 100,000$ 500,000$ 100,000$ Capital lease obligation 95,442 52,250 31,239 116,453 35,139

Total Governmental Activities 695,442$ 52,250$ 131,239$ 616,453$ 135,139$

Business-Type Activities:

Notes Payable (direct borrowings) 5,246,229 - 224,867 5,021,362 254,905

Total Business-Type Activities 5,246,229$ -$ 224,867$ 5,021,362$ 254,905$

Governmental Activities: At June 30, 2019, the governmental long-term debt of the financial reporting entity consisted of the following:

General Obligation Debt:

2014 General obligation bonds through Bank of Oklahoma, interest payable semi-annually, principal installments of $100,000 due annually each March 1, interest ranging from 3.0% to 3.4%, final payment due March 1, 2024. $ 500,000

Current portion $100,000 Noncurrent portion 400,000 Total General Obligation Debt $ 500,000



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Capital Lease Obligations: Capital lease obligation to NEC Financial, payable in monthly installments of $1,520, including principal and interest at 7.88%, final payment due November 7, 2022. $55,607 Capital lease obligation to NEC Financial, payable in monthly installments of $152, including principal and interest at 7.88%, final payment due November 7, 2022. 5,563 Capital lease obligation to Security State Bank of Wewoka in the amount of $16,330, payable in monthly installments of $479, including principal and interest at 3.5%, final payment due June 14, 2021. 11,082

Capital lease obligation to Security State Bank of Wewoka in the amount of $52,500, payable in monthly installments of $1,205, including principal and interest at 5%, final payment due October 11, 2022. 44,201

$ 116,453 Current portion $ 35,139 Noncurrent portion 81,314 Total General Obligation Debt $ 116,453

Business-Type Activities: At June 30, 2019, the business-type activities long-term debt of the financial reporting entity consisted of the following:

Notes Payable: Direct Borrowings

Note payable to Security Bank of Wewoka dated August 20, 2015 original amount of $80,000, due in monthly installments of $1,409, with an annual interest rate of 2.15%, final payment due August 20, 2020. Proceeds will be used to repair Wewoka swimming pool. In the event of default, the lender may: 1) exercise any and all rights and remedies possessed by lender; 2) accelerate the payment of principal and interest accrued on the note; 3) make a claim for any and all insurance benefits or refunds that may be available; and 4) set-off any amount due and payable under the terms of the note. $ 20,856

Note payable to First National Bank of Wewoka dated February 18, 2014 original amount of $267,000, due in monthly installments of $1,876, with an annual interest rate of 3.25%, final payment due February 18, 2029. Proceeds will be used for completion of the OFM building. In the event of default, the lender may: 1) declare due and payable all liabilities and obligations of borrower to lender and 2) exercise any and all rights and remedies possessed by lender. 189,801

Note payable to First National Bank of Wewoka dated November 18, 2013 original amount of $195,125, secured and payable from 1% pledge sales tax



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revenue, due in monthly installments of $1,854, with an annual interest rate of 2.625%, final payment due November 19, 2023. Proceeds will be used for the improvement of the water system. In the event of default, the lender may: 1) declare due and payable all liabilities and obligations of borrower to lender; 2) cease extending credit to borrower; 3) exercise any and all rights and remedies possessed by lender. 88,991

Note payable to The Central OK Development Trust, dated October 30, 2013 original amount of $200,000, secured and payable from 20% pledge sales tax revenue, due in quarterly installments of $8,201, with an annual interest rate of 4.0%, final payment due October 30, 2020. Proceeds will be used for the completion of the interior office and the overhead crane system. In the event of default, the lender may: 1) declare due and payable all liabilities and obligations of borrower to lender and 2) exercise any and all rights and remedies possessed by lender. 46,961

Note payable to Rural Development dated September 30, 2013 original amount of $3,197,000, secured and payable from utility revenues, due in monthly installments of $12,405, with an annual interest rate of 3.5%, final payment due September 28, 2053. Proceeds will be used for the improvement of the sanitary sewer system. In the event of default, the lender may: 1) declare the entire amount unpaid immediately due and payable; 2) for the account of Borrower incur and pay reasonable expenses for repair or maintenance of and take possession of, operate or rent the property; 3) have a receiver appointed for the property; and 4) exercise any and all rights and remedies possessed by lender. 2,890,938

Note payable to Rural Development dated September 30, 2013 original amount of $983,000, secured and payable from utility revenues, due in monthly installments of $3,048, with an annual interest rate of 2.125%, final payment due September 28, 2053. Proceeds will be used for the improvement of the sanitary sewer system. In the event of default, the lender may: 1) declare the entire amount unpaid immediately due and payable; 2) for the account of Borrower incur and pay reasonable expenses for repair or maintenance of and take possession of, operate or rent the property; 3) have a receiver appointed for the property; and 4) exercise any and all rights and remedies possessed by lender. 862,978

Note payable to First National Bank of Wewoka dated October 28, 2016 original amount of $601,057, due in annual installments of $56,219, with an annual interest rate of 4.5%, final payment due May 30, 2029. Proceeds will be used to build new road and road improvements. In the event of default, the lender may: 1) exercise any and all rights and remedies possessed by lender; 2) accelerate the payment of principal and interest accrued on the note; 3) make a claim for any and all insurance benefits or refunds that may be available; and 4) set-off any amount due and payable under the terms of the note. 444,562



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Note payable to First National Bank of Wewoka dated March 2, 2017 original amount of $270,020, due in monthly installments of $2,742, with an annual interest rate of 4.0%, final payment due March 2, 2027. Proceeds will be used for the purchase of automated meters for the city of Wewoka. In the event of default, the lender may: 1) exercise any and all rights and remedies possessed by lender; 2) accelerate the payment of principal and interest accrued on the note; and 3) assemble and sell the collateral. 218,563

Note payable to Communities Unlimited dated December 15, 2016 original amount of $70,000, due in monthly installments of $179, with an annual interest rate of 3.0%, final payment due December 15, 2028. Proceeds will be used for improvement of the water system. In the event of default, the lender may: 1) exercise any and all rights and remedies possessed by lender and 2) declare the entire amount unpaid immediately due and payable. 65,700

Note payable to Security State Bank of Wewoka, dated May 9, 2018 original amount of $55,000, due in monthly installments of $585, with an annual interest rate of 5.08%, final payment due May 9, 2028. Proceeds will be used to purchase commercial real estate. In the event of default, the lender may: 1) exercise any and all rights and remedies possessed by lender; 2) accelerate the payment of principal and interest accrued on the note; 3) make a claim for any and all insurance benefits or refunds that may be available; and 4) set-off any amount due and payable under the terms of the note. 50,362

Note payable to Oklahoma Department of Commerce, dated July 1, 2008 original amount of $400,000, due in monthly installments of $1,667, final payment due June 1, 2026. Proceeds will be used for plant expansion and renovation. In the event of default, the lender may: 1) exercise any and all rights and remedies possessed by lender and 2) declare the entire amount unpaid immediately due and payable. 141,649

$ 5,021,362 Current portion $254,905

Noncurrent portion 4,766,457 Total Notes Payable $ 5,021,362



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Payment Requirements to Maturity:

Year Ended G.O. Bond Obligations Capital Lease Obligations Notes Payable (Direct borrowings)June 30, Principal Interest Principal Interest Principal Interest

2020 100,000$ 15,094 35,141 6,800$ 254,905$ 162,339$ 2021 100,000 12,075 36,015 4,248 221,896 154,2522022 100,000 9,056 32,461 2,061 214,673 147,1342023 100,000 6,038 12,835 211 221,806 140,0042024 100,000 3,019 - - 207,047 132,814

2025-2029 - - 920,002 564,2092030-2034 - - - - 487,775 439,4052035-2039 - - - - 571,528 355,652 2040-2044 - - - - 670,226 256,954 2045-2049 - - - - 786,598 140,582 2050-2052 - - - - 464,906 20,293

Total 500,000$ 45,282$ 116,452$ 13,320$ 5,021,362$ 2,513,638$

Business-Type ActivitiesGovernmental Activities

Compensated Absences: As a result of the City’s use of the modified cash basis of accounting, accrued liabilities related to compensated absences (vacation and comp leave) earned but unpaid at year-end are not reflected in the basic financial statements. The compensated absence commitment at June 30, 2019 is $55,168 for governmental activities and $26,059 for business-type activities.

Litigation: The City and its public trusts are parties to various legal proceedings or have threatened litigation which normally occurs in the course of municipal governmental operations. The financial statements do not include accruals or provisions for loss contingencies that may result from these proceedings. State Constitution and statutes provide for the levy of an ad valorem tax over a three-year period by a Sinking Fund for the payment of any court assessed judgment rendered against the City. (This provision is not available to public trusts.) While the outcome of the above noted proceedings or threatened litigation 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. Federal and State Award Programs: The City of Wewoka participates in various federal or state grant/loan programs from year to year. The grant/loan programs are often subject to additional audits by agents of the granting or loaning agency, the purpose of which is to ensure compliance with the specific conditions of the grant or loan. The City has not been notified of any noncompliance with federal or state award requirements.



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SUPPLEMENTAL AND OTHER INFORMATION



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Budgetary Comparison Schedules (Modified Cash Basis) – Year Ended June 30, 2019

GENERAL FUNDBudgeted Amounts Actual Final Budget

Original Final Amounts Positive (Negative)

Beginning Budgetary Fund Balance: 250,000$ 250,000$ 318,892$ 68,892$

Resources (Inflows):Taxes 756,084 756,084 841,954 85,870 Intergovernmental 37,300 37,300 43,400 6,100 Charges for services 381,744 381,744 363,932 (17,812) Fines and Forfeitures 98,000 98,000 110,095 12,095 Licenses and Permits 4,936 4,936 22,505 17,569 Investment Income 500 500 1,462 962 Miscellaneous 146,460 147,460 213,816 66,356 Other Financing Sources - Transfers In 1,544,926 1,544,926 1,543,777 (1,149)

Total Resources 2,969,950 2,970,950 3,140,941 169,991

Amounts available for appropriation 3,219,950 3,220,950 3,459,833 238,883

Charges to Appropriations (Outflows):General government: Managerial 114,366 114,366 107,845 6,521 City Clerk 164,673 164,673 155,787 8,886 General Government 329,178 339,213 303,426 35,787 Public safety: Police 465,480 470,480 459,788 10,692 Fire 570,814 574,314 515,178 59,136 Parks, Library and Recreation: Public lands 180,218 170,568 153,723 16,845 Golf 164,106 161,606 129,438 32,168 Library 77,168 77,168 64,540 12,628 Highways & Streets: Streets 136,712 141,712 106,805 34,907 Public Works: Sanitation 212,000 212,000 195,021 16,979 Water plant 280,023 271,023 230,568 40,455 Disposal Plant 133,928 125,618 99,631 25,987 Distribution 391,284 395,934 324,533 71,401

Total Charges to Appropriations 3,219,950 3,218,675 2,846,283 372,392

Ending Budgetary Fund Balance -$ 2,275$ 613,550$ 611,275$



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Budgetary Comparison Schedules (Modified Cash Basis) – Year Ended June 30, 2019 (Cont.)

TIF REVENUE FUNDBudgeted Amounts Actual Final Budget

Original Final Amounts Positive (Negative)

Beginning Budgetary Fund Balance 100,000$ 100,000$ 201,998$ 101,998$

Resources (Inflows):Taxes 75,000 75,000 107,309 32,309 Investment income 50 50 - (50) Miscellaneous - 250,000 - (250,000)

Total Resources 75,050 325,050 107,309 (217,741)

Amounts available for appropriation 175,050 425,050 309,307 (115,743)

Charges to appropriations (outflows): Economic Development 175,050 301,331 7,691 293,640 Transfers out - 56,319 56,319 -

Total Charges to Appropriations 175,050 357,650 64,010 293,640

Ending Budgetary Fund Balance -$ 67,400$ 245,297$ 177,897$

Footnotes to Budgetary Comparison Schedules: 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 to lapse at year-end, therefore encumbrances are not considered expenditures for budgetary comparison purposes. However, the City will re-appropriate these lapsed encumbrances in the subsequent year budget. In addition, capital leases and debt proceeds are not budgeted for revenues and any related capital expenditures not directly received by the City. The differences are summarized below: General Fund

Actual revenues and transfers per Statement of Revenues, Expenditures and Changes in Fund Balance $2,233,612 Add: Reclass of public works activity to the PWA (transfer in) 1,014,013 Less: Insurance Loss Account revenues (11,698) Transfer of sales tax to WIA (42,736) Proceeds from capital lease financing (52,250) Total budgetary amounts resources available for appropriation $3,140,941 Actual expenditures and transfers per Statement of Revenues, Expenditures and Changes in Fund Balance $1,934,743 Add: Reclass of public works activity to the PWA 1,014,013 Less: Insurance Loss expenditures and transfers (7,487) Transfer of sales tax to WIA (42,736) Proceeds from capital lease financing (52,250) Total budgetary charges to appropriations $2,846,283

2. The legal level of appropriation control is the department level within a fund. Transfer appropriations require the Mayor’s approval and supplemental appropriations require City Council’s approval.



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Combining Balance Sheet – General Fund Accounts (Modified Cash Basis) – June 30, 2019

General Fund

Insurance Loss

AccountCourt

Account

Police Dept Special Account Total

ASSETSCash and cash equivalents 748,561$ 20,054$ 15,009$ 9,975$ 793,599$ Deposits with insurance pool 2,579 - - - 2,579 Due from employee 532 - - - 532 Due from (to) Court Account 15,009 - (15,009) - - Due from other funds 26,157 - - - 26,157

Total assets 792,838$ 20,054$ -$ 9,975$ 822,867$


Due to other funds 179,288$ -$ -$ 9,975$ 189,263$ Total liabilities 179,288 - - 9,975 189,263

Fund balances:Assigned - 20,054 - - 20,054 Unassigned 613,550 - - - 613,550

Total fund balances 613,550 20,054 - - 633,604 Total liabilities and fund balances 792,838$ 20,054$ -$ 9,975$ 822,867$

Combining Schedule of Revenues, Expenditures and Changes in Fund Balance – General Fund Accounts (Modified Cash Basis) – Year Ended June 30, 2019

General Fund

Insurance Loss

AccountCourt

Account

Police Dept Special Account Total

REVENUESTaxes 884,690$ -$ -$ -$ 884,690$ Intergovernmental 43,400 - - - 43,400 Charges for services 363,932 - - - 363,932 Fines and forfeitures 110,095 - - - 110,095 Licenses and permits 22,505 - - - 22,505 Investment income 1,462 - - - 1,462 Miscellaneous 213,816 11,698 - - 225,514 Total revenues 1,639,900 11,698 - - 1,651,598

EXPENDITURESCurrent:

General Government 390,850 7,487 - - 398,337 Public Safety 952,549 - - - 952,549 Highways and Streets 103,239 - - - 103,239

Culture and recreation 328,019 - - - 328,019 Capital Outlay 81,608 - - - 81,608 Debt Service: Principal 8,049 - - - 8,049 Interest and other charges 1,629 - - - 1,629 Total Expenditures 1,865,943 7,487 - - 1,873,430 Excess (deficiency) of revenues over expenditures (226,043) 4,211 - - (221,832)

OTHER FINANCING SOURCES (USES)Proceeds from capital leases 52,250 - - - 52,250 Transfers in 529,764 - - - 529,764 Transfers out (61,313) - - - (61,313) Total other financing sources (uses) 520,701 - - - 520,701

Net change in fund balances 294,658 4,211 - - 298,869 Fund balances - beginning 318,892 15,843 - - 334,735 Fund balances - ending 613,550$ 20,054$ -$ -$ 633,604$



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Combining Balance Sheet – Non-major Governmental Funds (Modified Cash Basis) – June 30, 2019

Street and Alley Fund

Library Grant Fund

Fire Department Grant Fund

Library Prize Fund DSSC Fund

Senior Citizens Fund

ASSETSCash and cash equivalents 9,145$ 12,351$ 14,819$ 261$ 27,085$ (1,314)$ Due from other funds 1,201 350 - - 7,780 -

Total assets 10,346$ 12,701$ 14,819$ 261$ 34,865$ (1,314)$


Due to other governments -$ -$ -$ -$ 103$ -$ Due to other funds - - 9,459 - 657 52

Total liabilities - - 9,459 - 760 52

Fund balances: Restricted 10,166 12,701 5,360 261 31,144 - Assigned 180 - - - 2,961 - Unassigned (deficit) - - - - - (1,366)

Total fund balances 10,346 12,701 5,360 261 34,105 (1,366) Total liabilities and fund balances 10,346$ 12,701$ 14,819$ 261$ 34,865$ (1,314)$

Special Revenue Funds

Economic Development

FundPolice-DA

Seizure Fund Cemetery Fund REAP Grant CDBG Fund

Total Other Governmental

FundsASSETSCash and cash equivalents 142,732$ 132$ 35,063$ (846)$ 2,000$ 241,428$ Due from other funds 4,796 - 131 808 - 15,066

Total assets 147,528$ 132$ 35,194$ (38)$ 2,000$ 256,494$


Due to other governments -$ -$ -$ -$ -$ 103$ Due to other funds 8,799 - 150 - 2,000 21,117

Total liabilities 8,799 - 150 - 2,000 21,220

Fund balances: Restricted 100,635 132 24,173 - - 184,572 Assigned 38,094 - 10,871 - - 52,106 Unassigned (deficit) - - - (38) - (1,404)

Total fund balances 138,729 132 35,044 (38) - 235,274 Total liabilities and fund balances 147,528$ 132$ 35,194$ (38)$ 2,000$ 256,494$

Capital Project FundSpecial Revenue Funds



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Combining Statement of Revenues, Expenditures and Changes in Fund Balance – Non-major Governmental Funds (Modified Cash Basis) – Year Ended June 30, 2019

Street and Alley Fund

Library Grant Fund

Fire Department Grant Fund

Library Prize Fund DSSC Fund

Senior Citizens Fund

REVENUESTaxes -$ -$ -$ -$ -$ -$ Intergovernmental 27,207 3,426 4,000 - - 1,452 Charges for services - - - - - - Investment income 41 - - 1 845 - Miscellaneous - 1,844 860 313 - - Total revenues 27,248 5,270 4,860 314 845 1,452

EXPENDITURESCurrent: Highways and streets 21,512 - - - - - Culture and recreation - 3,741 - 400 - 2,419 Capital outlay - - - - - - Total Expenditures 21,512 3,741 - 400 - 2,419

Net change in fund balances 5,736 1,529 4,860 (86) 845 (967) Fund balances - beginning 4,610 11,172 500 347 33,260 (399) Fund balances - ending 10,346$ 12,701$ 5,360$ 261$ 34,105$ (1,366)$

Special Revenue Funds

Economic Development

FundPolice-DA

Seizure FundCemetery

Fund REAP Grant CDBG Fund

Total-Other Governmental

FundsREVENUESTaxes 86,455$ -$ -$ -$ -$ 86,455$ Intergovernmental - - - 17,000 - 53,085 Charges for services - - 5,276 - - 5,276 Investment income 363 - 196 - - 1,446 Miscellaneous 3,158 - - - - 6,175 Total revenues 89,976 - 5,472 17,000 - 152,437

EXPENDITURESCurrent: Highways and streets - - - - - 21,512 Culture and recreation - - - - - 6,560 Capital outlay 49,146 - 14,281 15,000 - 78,427 Total Expenditures 49,146 - 14,281 15,000 - 106,499

Net change in fund balances 40,830 - (8,809) 2,000 - 45,938 Fund balances - beginning 97,899 132 43,853 (2,038) - 189,336 Fund balances - ending 138,729$ 132$ 35,044$ (38)$ -$ 235,274$

Capital Project FundSpecial Revenue Funds



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Schedule of Expenditures of Federal and State Awards (Modified Cash Basis) – For year ended June 30, 2019

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFOR THE FISCAL YEAR ENDED JUNE 30, 2019

Federal Agency or Program orFederal/State Grantor/Pass through agency CFDA Pass Thru Award ContractGrantor/Program Title Number Number Amount Expenditures

FEDERAL AWARDS:

U.S. DEPARTMENT OF AGRICULTURE:

Water & Waste Disposal Systems for Rural Communities-Grant 10.760 RUS # 00-05 939,400$ -$

Total U.S. Department of Agriculture 939,400 -

U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES:

Indian Health Service - Sanitation Facilities Construction Grant 93.455 OK14-T90 424,500 106,268

Total U.S. Department of Justice 424,500 106,268

TOTAL FEDERAL AWARDS 1,363,900$ 106,268$

SCHEDULE OF EXPENDITURES OF STATE AWARDS

FOR THE FISCAL YEAR ENDED JUNE 30, 2019

Agency or Program or

Federal/State Grantor/Pass through agency Pass Thru Award Contract

Grantor/Program Title Number Amount Expenditures

STATE AWARDS:

OKLAHOMA DEPARTMENT OF AGRICULTURE: Operational Fire Grant 18-19 N/A 4,000 -

COEDD: CENA Grant 2018-2019 Fund 820 N/A 4,314 2,419

2017-2018 REAP FUND 31 N/A 40,000 14,962

OKLAHOMA DEPARTMENT OF LIBRARIES:

State Aid Grant-2018 N/A 3,426 3,426

TOTAL STATE AWARDS 51,740$ 20,807$



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INTERNAL CONTROL AND COMPLIANCE

309 N. Bryant Ave. • Edmond, OK 73034 • 405.348.0615 • Fax 405.348.0931 • www.jmacpas.com Member of AICPA and OSCPA

INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To the Honorable Mayor and Members of the City Council City of Wewoka, Oklahoma

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Wewoka, Oklahoma (the “City”), as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated April 17, 2020.

Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

April 17, 2020

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