CITY OF NOBLE, OKLAHOMA...The City of Noble - an incorporated City that operates the public safety,...

CITY OF NOBLE, OKLAHOMAJune 30, 2020

TABLE OF CONTENTS

Page

Independent Auditor's Report A - 1

Other Information - Management's Discussion and Analysis A - 3

BASIC FINANCIAL STATEMENTS

Government-Wide Financial Statements

Statement of Net Position - Modified Cash Basis B - 1

Statement of Activities - Modified Cash Basis B - 2

Governmental Fund Financial Statements

Balance Sheet - Modified Cash Basis B - 3

Statement of Revenues, Expenditures and Changes in Fund Balances

- Modified Cash Basis B - 4

Reconciliation of Governmental Fund and Government-Wide Financial Statements

- Modified Cash Basis B - 5

Proprietary Fund Financial Statements:

Statement of Net Position - Modified Cash Basis B - 6

Statement of Revenues, Expenses and Changes in Fund Net Position - Modified Cash Basis B - 7

Statement of Cash Flows - Modified Cash Basis B - 8

Notes to the Basic Financial Statements B - 9

Supplementary and Other Information

Budgetary Comparison Information

Budgetary Comparison Schedules-Modified Cash Basis C - 1

Footnotes to Budgetary Comparison Schedules C - 3

Combining Schedules of General Fund Accounts

Combining Balance Sheet - General Fund Accounts - Modified Cash Basis C - 4

Combining Statement of Revenues, Expenditures and Changes in Fund Balance C - 5

- Modified Cash Basis

Combining Non-Major Governmental Fund Statements

Combining Balance Sheet - Modified Cash Basis C - 6

Combining Statement of Revenues, Expenditures and Changes in Fund Balances C - 7

- Modified Cash Basis

Federal and State Awards Information

Schedule of Federal and State Awards - Modified Cash Basis D - 1

Internal Control and Compliance Information

Independent Auditor's Report on Internal Control Over Financial Reporting and on

Compliance and Other Matters Based on an Audit of the Accompanying Financial

Statements Performed in Accordance With Government Auditing Standards E - 1

Schedule of Findings and Recommendations E - 3

Disposition of the Prior Year Schedule of Findings E - 4

Management's Response to Findings E - 5

A - 1

INDEPENDENT AUDITOR'S REPORT

Members of the City Council

City of Noble, Oklahoma

Report on the Financial Statements

We have audited the accompanying modified cash basis financial statements of the government activities, the business-type

activities, each major fund, and aggregate remaining fund information of the City of Noble, Oklahoma as of and for the year

ended June 30, 2020, and the related notes to the financial, which collectively comprise the City’s basic financial statements as

listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with the

modified cash basis of accounting described in Note 1.C.; this includes determining that the modified cash basis of accounting

is an acceptable basis for preparation of the financial statements in the circumstances. Management is also responsible for

design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial

statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance

with auditing standards generally accepted in the United States of America and the standards applicable to financial audits

contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require

that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material

misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.

The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of

the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control

relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are

appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal

control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting

principles used and the reasonableness of significant accounting estimates made by management, as well as evaluating the

overall presentation of the financial statements.

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

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective modified cash

basis financial position of the governmental activities, the business-type activities, each major fund, and the aggregate

remaining fund information of the City of Noble, Oklahoma, as of June 30, 2020, and the respective changes in modified cash

basis financial position, and where applicable, cash flows thereof for the year then ended in accordance with the modified cash

basis of accounting described in Note 1.C.

A - 2

Basis of Accounting

We draw attention to Note 1.C.of the financial statements, which describes the basis of accounting. The financial statements

are prepared on a modified cash basis of accounting which is a basis of accounting other than accounting principles generally

accepted in the United States of America. Our opinion is not modified with respect to that matter.

Other Matters

Supplementary and Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of

Noble, Oklahoma basic financial statements. The budgetary comparison information, combining general fund statements,

combining non-major governmental fund statements, and the federal and state awards information are presented for additional

analysis and are not a required part of the basic financial statements. The budgetary comparison information, combining general

fund statements combining non-major governmental fund statements, and the federal and state awards information coverage

information are not a required part of the financial statements.

The combining general fund statements, combining non-major governmental fund financial statements, and the federal and

state awards information are the responsibility of management, and were derived from and related directly to the underlying

accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing

procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and

reconciling such information directly to the underlying accounting and other records used to prepare the basic financial

statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing

standards generally accepted in the United States of America. In our opinion the combining non-major governmental fund

financial statements, and the federal and state awards information are fairly stated, in all material respects, in relation to the

basic financial statements as a whole.

The Management’s Discussion and Analysis starting on page A-3 and the budgetary comparison information on pages C-1, C-

2 and C-3 which are the responsibility of management, are presented for purposes of additional analysis and are not a required

part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit

of the basic financial statements and accordingly, we do not express an opinion or provide any assurance on it.

Other Reporting Required by Governmental Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 16, 2020, on our

consideration of the City of Noble’s internal control over financial reporting and on our tests of its compliance with certain

provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the

scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide

an opinion on the effectiveness of the City of Noble’s internal control over financial reporting or on compliance. That report

is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Noble’s

internal control over financial reporting and compliance.

Chickasha, Oklahoma

December 16, 2020

A- 3

CITY OF NOBLE Rose Rock Capital of the World

Management Discussion and Analysis of the Annual Financial Report

As of and for the Year ended June 30, 2020

The management of the City of Noble is pleased to provide this annual financial report to its citizens, taxpayers and other report users to demonstrate its accountability and communicate the City’s financial condition and activities as of and for the year ended June 30, 2020. Management of the City is responsible for the fair presentation of this annual report, for maintaining appropriate internal controls over financial reporting, and for complying with applicable laws, regulations and provisions on grants and contracts. The City reports its financial statements and schedules on a modified cash basis which is a comprehensive basis of accounting other than generally accepted accounting principles. All financial analyses in this report must be considered within the context of the limitations of the modified cash basis of accounting. FINANCIAL HIGHLIGHTS

As reported on a modified cash basis, the City’s total net position increased by $657,129 and the assets of the City exceed its liabilities at June 30, 2020, by $11,149,479 (net position). Of this amount, $2,129,548 (unrestricted net position) is available to meet the government’s ongoing needs.

For the fiscal year ended June 30, 2020 the City’s governmental funds reported combined ending fund balances on a modified cash basis of $423,422 compared to $307,473 in FY 2019 - an increase of $115,949 or 37.71%.

At the year ended June 30, 2020, unassigned fund balance on a modified cash basis for the General Fund was $53,650 or 1.47% of General Fund revenues.

ABOUT THE CITY

The City of Noble is an incorporated municipality with a population of approximately 6,400 located in central Oklahoma. The City is a Council/Manager form of government and operates under a charter that provides for three branches of government:

Legislative – the City Council is a five-member governing body of which the council members are elected by wards and the mayor is elected by the citizens at large

Executive – the City Manager is the Chief Executive Officer and is appointed by the City Council

Judicial – the Municipal Judge is a practicing attorney appointed by the City Council The City provides typical municipal services such as public safety, health and welfare, streets and highways, parks and recreation, through its Utility Authority certain utility services including water, wastewater and sanitation and through the EMS District provides ambulance services.

A- 4

The City’s Financial Reporting Entity

This annual report includes all activities of which the City of Noble City Council is financially accountable. These activities, defined as the City’s financial reporting entity, are operated with separate legal entities that make up the primary government. The City’s financial reporting entity includes the following separate legal entities.

The City of Noble - an incorporated City that operates the public safety, streets, health and welfare, culture and recreation, and administrative activities of the City.

Noble Utilities Authority - A public trust created pursuant to 60 O.S. ₰ 176 to finance, develop, and operate the utility services and physical facilities (NUA).

Noble EMS District - The Noble EMS District was formed under the provisions of the Oklahoma Constitution, Article 10, Section 9C for the purpose of providing ambulance service within a district comprised of the municipal limits of the City of Noble, Oklahoma.

In addition, as required by state law, all debt obligations incurred by the trusts must be approved by two-third vote of the City Council. This is considered sufficient imposition of will to demonstrate financial accountability and to include the trust within the City’s financial reporting entity. The public trust does not issue separate annual financial statements.

OVERVIEW OF THE FINANCIAL STATEMENTS The financial statements presented herein include all the activities of the City of Noble (the “City”) and the Noble Utilities Authority (the “NUA”) and the EMS District. Included in this report are government-wide statements for each of the two categories of activities – government and business type. The government-wide financial statements present the complete financial picture of the City using the modified cash basis of accounting. They present the governmental and business-type activities separately and combined. For governmental activities, these statements tell how these services were financed in the short term as well as what remains for future spending. Fund financial statements also report the City’s operations in more detail that the government-wide statements by providing information about the City’s most significant funds. These statements include all assets of the City (including infrastructure) as well as all liabilities (including long-term debt), within the context of the modified cash basis of accounting. Reporting the City as a Whole The Statement of Net Position and Statement of Activities

One of the most important questions to ask about the City’s finances is, “Has the City’s overall financial condition improved, declined or remained steady as a result of the year’s activities?” The Statement of Net Position and the Statement of Activities report information about the City as a whole and about its activities in a way that helps answer this question. You will need to consider other non-factors, however, such as changes in the City’s sales tax base, condition of the City’s roads, and quality of service to assess the overall health of the City. You will also need to keep in mind that these government-wide statements are prepared in accordance with the modified cash basis of accounting described above and include only those City assets and liabilities resulting from cash transactions.

A- 5

In the Statement of Net Position and Statement of Activities, we divide the City into two kinds of activities Governmental activities – Most of the City’s basic services are reported here, including the police, fire, administration, streets and ambulance services. Sales taxes, franchise fees, fines, ambulance fees and state and federal grants finance most of these activities; and Business-type activities – Activities where the City typically charges a fee to customers to help cover all or most of the costs of certain services it provides are reported here. The City’s water, wastewater, and sanitation are reported as business-type activities. Reporting the City’s Most Significant Funds – Fund Financial Statements Fund Financial Statements The fund financial statements provide detailed information about the City’s most significant (major) funds – not the City as a whole. Some funds are required to be established by State law and by debt covenants. However, the City Council may also establish certain other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using taxes, grants and other money. The City’s two kinds of funds – governmental and proprietary – use different accounting approaches. Governmental funds – All of the City’s basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end that are available for spending. Governmental funds report their activities on a modified cash basis of accounting and current financial resources measurement focus that is different from other funds. For example, these funds report the acquisition of capital assets and payments for debt principal as expenditures and not as changes to asset and debt balances. The governmental fund statements provide a detailed short-term view of the City’s general government operations and the basic services it provides. Governmental fund information helps you determine (through a review of changes to fund balance) whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. The differences of results in the governmental fund financial statements to those in the government-wide financial statements are explained in a reconciliation following the governmental fund financial statement. Proprietary funds – The City operates two proprietary funds, the Noble Utility Authority (major fund) and the related meter deposit fund (non-major fund). When the City, through the Utility Authority, charges customers for the services it provides, these services are generally reported in the proprietary funds. Proprietary funds are reported on the modified cash basis of accounting and an economic resources measurement focus. For example, proprietary fund assets are capitalized and depreciated and principal payments on long-term debt are recorded as a reduction to the liability. The City’s proprietary funds are the Nobile Utility Authority that accounts for the operation of the water, wastewater and sanitation activities, and the related meter deposit fund accounts for customers’ utility deposits. Notes to the Financial Statements The notes provide additional information that is essential to gain an understanding of the data provided in the government-wide and fund financial statements. The Notes to the Financial Statements can be found on pages B-9 through B-26 of this report.

A- 6

Other Information In addition to the basic financial statements and accompanying notes, this report also presents a Budgetary Comparison Schedule for the General Fund and major governmental funds, combining and individual fund financial statements and schedules, a federal and state award schedule. THE CITY AS A WHOLE

For the year ended June 30, 2020, net position on a modified cash basis for the governmental and business-type activities increased $657,129.

Net Position (Modified Cash Basis)

June 30, 2020

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

2020 2019 2020 2019 2020 2019

Current and other assets $ 427,761 $ 328,320 $ 2,218,556 $ 2,026,874 $ 2,646,317 $ 2,355,194

Capi ta l ass ets 5,261,421 5,240,514 5,766,283 5,707,273 11,027,704 10,947,787

Tota l As sets 5,689,182 5,568,834 7,984,839 7,734,147 13,674,021 13,302,981

Current Liabi l i ties 201,241 224,813 311,774 281,288 513,015 506,101

Long-term debt 707,019 874,005 1,304,508 1,430,525 2,011,527 2,304,530

Tota l Liabi l i ti tes 908,260 1,098,818 1,616,282 1,711,813 2,524,542 2,810,631

Net pos i tion:

Invested in capi ta l ass ets

net of debt 4,357,500 4,162,543 4,365,763 4,178,177 8,723,263 8,340,720

Res tricted 207,806 201,284 88,862 33,400 296,668 234,684

Unrestricted 215,616 106,189 1,913,932 1,810,757 2,129,548 1,916,946

Tota l Net Pos ition $ 4,780,922 $ 4,470,016 $ 6,368,557 $ 6,022,334 $ 11,149,479 $ 10,492,350

NET POSITION

Governmental TotalBusiness-type

Activities Activities Government

The largest portion of the City’s net position reflects its investment in capital assets, less any related debt used to acquire those assets that is still outstanding. At year end, the net investment in capital assets amounted to $8,723,263. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Current assets of the governmental activities increase approximately $99,441 or 30% due primarily to an increase in taxes. Current assets of the business-type activities increased approximately $191,682 or 9% due primarily to increase of service revenues.

A- 7

Changes in Net Position (Modified Cash Basis)

Year Ended June 30, 2020

2020 2019 2020 2019 2020 2019

Revenues:

Program revenues:

Charges for services $ 965,274 $ 923,142 $ 2,634,494 $ 2,460,005 $ 3,599,768 $ 3,383,147

Operating grants & contributions 31,469 26,014 - - 31,469 26,014

Capital grants & contributions 7,568 4,051 - - 7,568 4,051

General revenues:

Taxes 2,449,761 2,205,808 - - 2,449,761 2,205,808

Intergovernmental 96,886 97,202 - - 96,886 97,202

Other general rev. 91,876 34,990 20,319 15,926 112,195 50,916

Total revenues 3,642,834 3,291,207 2,654,813 2,475,931 6,297,647 5,767,138

Program expenses:

Administration 371,207 357,587 - - 371,207 357,587

Public Safety 2,706,760 2,586,635 - - 2,706,760 2,586,635

General government 208,886 190,854 - - 208,886 190,854

Library 75,099 84,400 - - 75,099 84,400

Parks 52,173 29,446 - - 52,173 29,446

Streets 339,734 351,728 - - 339,734 351,728

Water - - 902,640 860,510 902,640 860,510

Sewer - - 591,891 516,502 591,891 516,502

Sanitation - - 365,753 331,337 365,753 331,337

Interest L-T debt 26,375 28,454 - - 26,375 28,454

Total expenses 3,780,234 3,629,104 1,860,284 1,708,349 5,640,518 5,337,453

Excess (deficiency)

before transfers (137,400) (337,897) 794,529 767,582 657,129 429,685

Transfers 448,306 452,299 (448,306) (452,299) - -

Increase (decrease)

in net position 310,906 114,402 346,223 315,283 657,129 429,685

CHANGES IN NET POSITION

Governmental Business-type Total

Activities Activities Government

Governmental Activities

Total Governmental Activity Revenues for 2020 showed an increase of $196,504 or 171% over the prior year. This is due mainly to increases in taxes. Business-Type Activities

Total Business-type Activity Revenues for 2020 showed a decrease of $30,940 or 9.81% over the prior year. This is due to an increase in utility services.

A- 8

Net Revenue (Expense) of Governmental Activities (Modified Cash Basis)

2020 2019 2020 2019

Administration $ 371,207 $ 357,587 $ (371,207) $ (357,587)

Public Safety 2,706,760 2,586,635 (1,887,925) (1,782,987)

Streets 339,734 351,728 (297,610) (310,688)

General Government 208,886 190,854 (96,434) (103,011)

Library 75,099 84,400 (75,099) (84,400)

Parks 52,173 29,446 (21,273) (8,770)

Interest on Long-Term Debt 26,375 28,454 (26,375) (28,454)

Total Net Position $ 3,780,234 $ 3,629,104 $ (2,775,923) $ (2,675,897)

Total Expense Net Revenue

of Services (Expense) of Services

Net Revenue (Expense) of Business-Type Activities (Modified Cash Basis)

2020 2019 2020 2019

Water $ 902,640 860,510 $ 248,975 $ 213,271

Sewer 591,891 516,502 137,778 148,915

Sanitation 365,753 331,337 387,457 389,470

Total Net Position $ 1,860,284 $ 1,708,349 $ 774,210 $ 751,656

Total Expense Net Revenue

of Services (Expense) of Services

A FINANCIAL ANALYSIS OF THE CITY’S FUNDS As the City completed its 2020 fiscal year, the governmental funds reported a combined fund balance of $423,422. For the year ended June 30, 2020, the General Fund’s total fund balance increased by $115,949. The proprietary funds reported a combined net position balance of $6,368,557. The net position of the Noble Utility Authority, increased by $346,223. Budgetary Highlights For the year ended June 30, 2020 the General Fund reported actual budgetary basis revenues under final estimates by $247,103 or a 5.11% negative variance. General Fund actual expenditures were under final appropriations by $279,666 or a 5.70% positive variance. Noble EMS Fund (major governmental fund) reported actual budgetary basis revenues over final estimates by $111,124 or a 14.71% positive variance and actual expenditures were under final appropriations by $1,164 or a .15% positive variance.

A- 9

CAPITAL ASSETS & DEBT ADMINISTRATION

Capital Assets

At the end of June 30, 2020, the City had approximately $10 million in capital assets (net of accumulated depreciation), as reported on a modified cash basis, including land, buildings, machinery and equipment, and park facilities. Below are details regarding the City’s capital assets as of June 30, 2020.

Capital Assets

(Net of accumulated depreciation)

2020 2019 2020 2019 2020 2019

Land $ 379,224 $ 379,224 $ 572,198 $ 294,341 $ 951,422 $ 673,565

Construction in Progress 115,368 43,314 - - 115,368 43,314

Buildings 1,118,555 1,140,589 242,780 249,750 1,361,335 1,390,339

Utility Propery/Imprv &

Other Improvements 428,924 277,228 4,012,486 4,181,436 4,441,410 4,458,664

Vehicles & Equipment 1,087,974 1,162,976 938,821 981,747 2,026,795 2,144,723

Infrastructure 2,131,376 2,237,183 - - 2,131,376 2,237,183

Totals $ 5,261,421 $ 5,240,514 $ 5,766,285 $ 5,707,274 $ 11,027,706 $ 10,947,788

This year’s more significant capital asset additions include the following:

Land $277,857

Vehicles & Equipment $212,504

Infrastructure $113,458

Debt Administration At June 30, 2020 the City had $2,334,417 in debt outstanding reported on a modified cash basis, approximately a $305,350 decrease from prior year due to primarily principal reductions.

Long-Term Debt

2020 2019 2020 2019 2020 2018

Notes Payable $ - $ - $ 747,361 $ 800,148 $ 747,361 $ 800,148

Bonds Payable 815,000 955,000 - - 815,000 955,000

Capital Leases 88,515 120,021 683,135 761,648 771,650 881,669

State Obligation 406 2,950 406 2,950

Totals $ 903,921 $ 1,077,971 $ 1,430,496 $ 1,561,796 $ 2,334,417 $ 2,639,767

Governmental Business-Type

Activities Activities Total

A- 10

ECONOMIC FACTORS AND NEXT YEAR’S ESTIMATE The following information outlines significant known factors that will affect subsequent year finances:

Noble is continuing to experience a significant increase in new housing starts. We have three new large residential subdivisions and other minor subdivisions that are very active. This has had a positive economic impact. Sales tax on building materials as well as the increase in building permits and the steady increase in the number of utility accounts have been a very positive factor on our revenues. This is in spite of the fact that Noble has not had a significant increase in the number of retail businesses. The outlook for continued housing construction is strong.

The economic effects of the COVID—19 Pandemic have been difficult to predict. The restrictions on businesses, the number of people experiencing job losses and several other factors will have effects on the 2021 revenues and expenses. We have chosen to be conservative in putting together the 2021 Budget and are aware that we may be vulnerable to considerable swings in the revenues of the General Fund and the Utility Authority.

Contacting the City’s Management

This financial report is intended to provide our citizens, taxpayers, customers and investors with a general overview of the City’s finances and to show the City’s accountability for the money it receives. If you have questions about this report or need additional information, we welcome you to contact the City Clerk’s office.

See disclaimer in independent auditor’s report.

CITY OF NOBLE, OKLAHOMA

Statement of Net Position - Modified Cash Basis

June 30, 2020

Governmental Business-Type

Activities Activities Total

Assets

Cash and Cash Equivalents $ 309,355 $ 1,894,271 $ 2,203,626

Restricted Cash and Cash Equivalents 138,167 109,549 247,716

Restricted Investments - 165,000 165,000

Internal Balances (19,761) 19,761 -

Capitalized Interest - 29,975 29,975

Capital Assets:

Land and Other Non-depreciable Assets 494,592 572,198 1,066,790

Other capital assets, net 4,766,829 5,194,085 9,960,914

Total Assets 5,689,182 7,984,839 13,674,021

Liabilities

Other Liabilities 4,339 100 4,439

Due to Depositors - 185,687 185,687

Capital Leases - Current Portion 51,497 71,405 122,902

Notes Payable - Current Portion 145,405 54,582 199,987

Capital Leases - Due in more than one year 37,019 611,729 648,748

Notes Payable - Due in more than one year 670,000 692,779 1,362,779

Total Liabilities 908,260 1,616,282 2,524,542

Net Position

Invested in Capital Assets, net

of related debt 4,357,500 4,365,763 8,723,263

Restricted for:

Capital Improvement 45,129 61,473 106,602

Debt Service 159,677 27,389 187,066

Other Purposes 3,000 - 3,000

Unrestricted 215,616 1,913,932 2,129,548

Total Net Position $ 4,780,922 $ 6,368,557 $ 11,149,479

See accompanying notes to basic financial statements

B - 1

Program Revenues

Operating Capital

Charges for Grants and Grants and Governmental Business-Type

Functions/Programs Expenses Services Contributions Contributions Activities Activities Total

Primary Government:

Governmental Activities:

Administration $ 371,207 $ - $ - $ - $ (371,207) $ - $ (371,207)

Public Safety 2,706,760 795,798 21,469 1,568 (1,887,925) - (1,887,925)

Streets 339,734 42,124 - - (297,610) - (297,610)

General Government 208,886 102,452 10,000 - (96,434) - (96,434)

Library 75,099 - - - (75,099) - (75,099)

Parks 52,173 24,900 - 6,000 (21,273) - (21,273)

Interest Expense 26,375 - - - (26,375) - (26,375)

Total Governmental Activities 3,780,234 965,274 31,469 7,568 (2,775,923) - (2,775,923)

Business-Type Activities:

Water 902,640 1,151,615 - - - 248,975 248,975

Sewer 591,891 729,669 - - - 137,778 137,778

Sanitation 365,753 753,210 - - - 387,457 387,457

Total Business-Type Activities 1,860,284 2,634,494 - - - 774,210 774,210

Total Primary Government 5,640,518 3,599,768 31,469 7,568 (2,775,923) 774,210 (2,001,713)

General Revenues:

Taxes:

Sales Tax 1,526,471 1,526,471

Use Tax 386,527 386,527

Property Tax 258,625 258,625

Franchise Tax 261,823 261,823

E-911 Tax 16,315 16,315

Intergovernmental Revenue 96,886 96,886

Investment Income 1,276 6,407 7,683

Miscellaneous 90,600 13,912 104,512

Transfers - Internal Activity 448,306 (448,306) -

Total General Revenues and Transfers 3,086,829 (427,987) 2,658,842

Change in Net Position 310,906 346,223 657,129

Net Position - Beginning 4,470,016 6,022,334 10,492,350

Net Position - Ending $ 4,780,922 $ 6,368,557 $ 11,149,479

Net (Expenses) Revenue and Changes in Net Position


Statement of Activities - Modified Cash Basis

For the Year Ending June 30, 2020


B - 2

Noble Non Major Total

General EMS Governmental Governmental

Fund Fund Funds Funds

Assets

Cash and Cash Equivalents $ 128,111 $ 118,673 $ 21,510 $ 268,294

Restricted Cash and Cash Equivalents - - 138,167 138,167

Deposits with Insurance Pool 41,061 - - 41,061

Due from Other Funds - - - -

Total Assets 169,172 118,673 159,677 447,522

Liabilities

Court Bonds & Other Payables 4,339 - - 4,339

Due to Other Funds - 19,761 - 19,761

Total Liabilities 4,339 19,761 - 24,100

Fund Balances

Non Spendable - - - -

Restricted 48,129 - 159,677 207,806

Committed - - - -

Assigned 63,054 98,912 - 161,966

Unassigned 53,650 - - 53,650

Total Fund Balances 164,833 98,912 159,677 423,422

Total Liabilities and Fund Balances $ 169,172 $ 118,673 $ 159,677 $ 447,522


Balance Sheet

Governmental Funds - Modified Cash Basis

June 30, 2020

See accompanying notes to basis financial statements

B - 3

Noble Non Major Total

General EMS Governmental Governmental

Fund Fund Funds Funds

Revenues

Taxes $ 2,191,136 $ - $ 258,625 $ 2,449,761

Intergovernmental 118,667 10,132 - 128,799

Charges for Services 42,125 648,468 - 690,593

Fines and Forfeitures 129,867 - - 129,867

Licenses and Permits 142,715 - - 142,715

Investment Income 83 45 1,148 1,276

Miscellaneous 97,169 2,654 - 99,823

Total Revenues 2,721,762 661,299 259,773 3,642,834

Expenditures

Current:

Administration 364,882 - 6,325 371,207

Police 1,292,265 - - 1,292,265

Animal Control 76,994 - - 76,994

Fire/EMS 409,802 787,827 - 1,197,629

General Government 190,987 - - 190,987

Library 35,535 - - 35,535

Parks 18,339 - - 18,339

Streets 211,212 - - 211,212

Capital Outlay 380,598 380,598

Debt Service:

Principal 64,929 - 140,000 204,929

Interest Expense 2,291 - 24,083 26,374

Total Expenditures 3,047,834 787,827 170,408 4,006,069

Excess (Deficiency) of Revenues Over

(Under) Expenditures (326,072) (126,528) 89,365 (363,235)

Other Financing Sources (Uses)

Loan Proceeds 30,878 - - 30,878

Transfers In 1,871,758 204,799 - 2,076,557

Transfers Out (1,521,851) - (106,400) (1,628,251)

Total Other Financing Sources (Uses) 380,785 204,799 (106,400) 479,184

Net Change in Fund Balances 54,713 78,271 (17,035) 115,949

Fund Balances - Beginning 110,120 20,641 176,712 307,473

Fund Balances - Ending $ 164,833 $ 98,912 $ 159,677 $ 423,422


Statement of Revenues, Expenditures and Changes in Fund Balances



See accompanying notes to financial statements

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Reconciliation to Statement of Net Position:

Fund balances of governmental funds $ 423,422

Amounts reported for governmental activities in the Statement of Net Position are different because:

Capital assets used in governmental activities are not financial resources and, therefore are not

reported in the funds:

Net Capital Assets 5,261,421

Some liabilities are not due and payable in the current period and, therefore are not reported

in the funds:

Capital lease obligation (88,516)

Notes Payable (815,405)

Net Position of Governmental Activities in the Statement of Net Position $ 4,780,922

Reconciliation to Statement of Activities:

Net change in fund balances of governmental funds $ 115,949

Amounts reported for governmental activities on the Statement of Activities are different because:

Governmental funds report capital outlays as expenditures while governmental activities report

depreciation expense to allocate those expenditures over the life of the assets:

Capital asset purchases capitalized 384,726

Depreciation expense (363,819)

Revenues in the Statements of Activities that do not provide current financial resources are not

reported as revenues in the funds:

Transfer of Capital Debt

Repayment of debt principal is an expenditure in the governmental funds, but the repayment

reduces long-term liabilities in the Statement of Net Position:

Capital lease proceeds (30,878)

Capital lease obligation payments 62,384

Notes Payable principal payments 142,544

Change in net position of governmental activities $ 310,906


Reconciliation of Governmental Fund and Government-Wide Financial Statements


June 30, 2020

See accompanying notes to financial statements

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Non-Major Total

Noble Utilities Enterprise Proprietary

Authority Fund Funds

Assets

Current Assets:

Cash and Cash Equivalents $ 1,892,271 $ 2,000 $ 1,894,271


Due from Other Funds 19,761 - 19,761

Total Current Assets 2,000,894 22,687 2,023,581

Noncurrent Assets:

Restricted Investments - 165,000 165,000

Capitalized Interest 29,975 - 29,975

Land and Other Non-depreciable Assets 572,198 - 572,198

Other Capital Assets, net of depreciation 5,194,085 - 5,194,085

Total Noncurrent Assets 5,796,258 165,000 5,961,258

Total Assets 7,797,152 187,687 7,984,839

Liabilities

Current Liabilities:

Other Deposits 100 - 100

Due to Depositors - 185,687 185,687

Capital Lease Obligations 71,405 - 71,405

Notes Payable 54,582 - 54,582

Total Current Liabilities 126,087 185,687 311,774

Noncurrent Liabilities:

Capital Lease Obligations 611,729 - 611,729

Notes Payable 692,779 - 692,779

Total Noncurrent Liabilities 1,304,508 - 1,304,508

Total Liabilities 1,430,595 185,687 1,616,282

Net Position

Invested in Capital Assets, net of related debt 4,365,763 - 4,365,763

Restricted for Debt Service 27,389 - 27,389

Restricted for Capital Improvements 61,473 - 61,473

Unrestricted 1,911,932 2,000 1,913,932

Total Net Position $ 6,366,557 $ 2,000 $ 6,368,557


Statement of Net Position

Proprietary Funds - Modified Cash Basis

June 30, 2020

Enterprise Funds

See accompaning notes to basic financial statements

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Statement of Revenues, Expenses and Changes in Fund Net Position



Non-Major Total



Operating Revenues

Charges for Services:

Pledged:

Water revenue $ 994,938 $ - $ 994,938

Sewer revenue 614,964 - 614,964

Penalties 42,168 - 42,168

Miscellaneous fees 229,214 - 229,214

Unpledged:

Sanitation revenue 753,210 - 753,210

Total Operating Revenues 2,634,494 - 2,634,494

Operating Expenses

Administration 184,093 - 184,093

General Government 279,518 - 279,518

Water operations 417,448 - 417,448

Sewer operations 298,586 - 298,586

Sanitation operations 365,753 - 365,753

Depreciation expense 256,308 - 256,308

Total Operating Expenses 1,801,706 - 1,801,706

Operating Income (Loss) 832,788 - 832,788

Nonoperating Revenues (Expenses)

Investment income 6,407 - 6,407

Interest expense & fees (58,578) - (58,578)

Miscellaneous revenue 13,912 - 13,912

Total Nonoperating Revenues (Expenses) (38,259) - (38,259)

Net Income (Loss) Before Contributions and Transfers 794,529 - 794,529

Pledged as security for revenue notes:

Transfer In - Sales Tax 1,521,851 - 1,521,851

Transfers In - -

Transfers Out (1,970,157) - (1,970,157)

Change in Net Position 346,223 - 346,223

Net Position - Beginning 6,020,334 2,000 6,022,334

Net Position - Ending $ 6,366,557 $ 2,000 $ 6,368,557


Enterprise Funds


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Statement of Cash Flows



Non-Major Total



Cash Flows From Operating Activities

Receipts from customers $ 2,634,494 $ - $ 2,634,494

Employees Paid (838,160) - (838,160)

Vendors and others paid (707,238) - (707,238)

Customer meter deposits receipts/refunds 16,009 16,009

Net Cash Provided by Operating Activities 1,089,096 16,009 1,105,105

Cash Flows From Noncapital Financing Activities

Grants 13,912 - 13,912

Interfund receipts/payments (106) 106 -

Transfers from other funds 1,521,851 1,521,851

Transfers to other funds (1,970,157) - (1,970,157)

Net Cash Provided by Noncapital

Financing Activities (434,500) 106 (434,394)

Cash Flows From Capital and Related

Financing Activities

Purchases of capital assets (315,318) - (315,318)

Loss on Asset Disposal - -

Loan Proceeds - -

Principal paid on debt (131,301) - (131,301)

Interest paid on debt (55,853) - (55,853)

Net Cash Provided by (used in) Capital

and Related Financing Activities (502,472) - (502,472)

Cash Flows From Investing Activities

Interest received 6,407 - 6,407

Increase in investments - -

Net Cash Provided by Investing Activities 6,407 - 6,407

Net Increase in Cash and Cash Equivalents 158,531 16,115 174,646

Balance - Beginning of the Year 1,822,602 6,572 1,829,174

Balance - End of the Year 1,981,133 22,687 2,003,820

Reconciliation to Statement of Net Position

Cash and cash equivalents 1,892,271 2,000 1,894,271

Restricted cash and cash equivalents 88,862 20,687 109,549

Total cash and cash equivalents, end of year 1,981,133 22,687 2,003,820

Reconciliation of Operating Income (Loss) to

Net Cash Provided by Operating Activities:

Operating income (loss) 832,788 - 832,788

Adjustments to reconcile operating income to net

cash provided (used) by operating activities:

Depreciation and amortization 256,308 - 256,308

Changes in assets and liabilities: -

Due to depositors 16,009 16,009

Net Cash Provided by Operating Activities $ 1,089,096 $ 16,009 $ 1,105,105


Enterprise Funds


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CITY OF NOBLE, OKLAHOMA Notes to the Basic Financial Statements

For the Year Ended June 30, 2020

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Note 1 - Summary of Significant Accounting Policies

1.A. Financial Reporting Entity The City’s financial reporting entity includes the primary government (City of Noble), and its blended component units. This report includes all activities for which the City of Noble’s City Council is fiscally responsible. In determining the financial reporting entity, the City complies with the provisions of Governmental Accounting Standards Board Statement No. 14, “The Financial Reporting Entity” as amended by Statement No. 61 “The Financial Reporting Entity: Omnibus” and includes all component units for which the City is financially accountable.

The City of Noble – that operates the public safety, health and welfare, streets and highways, parks and recreation, and administrative activities.

The City of Noble is an incorporated municipality with a population of approximately 6,400 located in central Oklahoma. The City is a Council/Manager form of government and operates under a charter that provides for three branches of government:

Legislative – the City Council is a five-member governing body of which the council members are elected by wards and the mayor is elected by the citizens at large

Executive – the City Manager is the Chief Executive Officer and is appointed by the City Council

Judicial – the Municipal Judge is a practicing attorney appointed by the City Council

Blended Component Units

Noble Utilities Authority - The trust has as its purpose to finance, develop, and operate the utility services and physical facilities (NUA). The component unit is a Public Trust established pursuant to Title 60 of Oklahoma State law. Public Trusts (Authorities) have no taxing power. The Authorities are generally created to finance City services through issuance of revenue bonds or other non-general obligation debt and to enable the City Council to delegate certain functions to the governing body (Trustees) of the Authority. The Authorities generally retain title to assets, which are acquired or constructed with Authority debt, or other Authority generated resources. In addition, the City has leased certain existing assets at the creation for the Authorities to the Trustees on a long-term basis. The City, as beneficiary of the Public Trusts, receives title to any residual assets when a Public Trust is dissolved. The NUA has the City Council as heir governing body (trustee) and the City is able to impose its will on the Authority through required approval of all debt obligations issued by these entities. As required by state law, all debt obligations incurred by the NUA must be approved by two-third vote of the City Council. This is considered sufficient imposition of will to demonstrate financial accountability and to include the trust within the City’s financial reporting entity. The public trust does not issue separate annual financial statements. Noble EMS District - The Noble EMS District was formed under the provisions of the Oklahoma Constitution, Article 10, Section 9C for the purpose of providing ambulance service within a district comprised of the municipal limits of the City of Noble, Oklahoma. The Noble EMS District and the City of Noble entered into an agreement in October 5, 2009 whereas the City agrees to account for ambulance revenues and expenses, to provide space for medical technicians, vehicles, equipment and supplies, to contract for lease purchase of ambulance vehicles and



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equipment, to provide training and uniforms for EMS technicians, to provide dispatcher service, and to provide office help. The District agrees to delegate to the City all hiring authority, to determine what level of ambulance service will be provided, to prepare the fiscal year budget and to issue bonds, if needed. All revenue from the district is given to the City’s EMS Fund and the City bills and makes all decisions related the ambulance operations.

Related Organization

Noble Economic Development Authority - The trust authority has as its purpose to stimulate economic growth and development of the beneficiary City (NEDA). The board of the NEDA consists of the member of the City Council. However, the only activity in the NEDA has had is the financing of school bonds. It provides no services and serves no function for the benefit of the municipal government of the City of Noble. Therefore, the Authority is not considered to be a component unit. Also, the entity has been dormant for several years.

1.B. Basis of Presentation

Government-Wide Financial Statements - The Statement of Net Position and Statement of Activities report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely, to a significant extent on fees and charges for support. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Fund Financial Statements - Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.

1.C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation Basis of accounting refers to when revenues and expenditures/expenses are recognized and reported in the financial statements. This relates to the timing of the revenues, expenditures/expenses regardless of the measurement focus applied. Measurement focus identifies which transactions and events should be recorded. In the governmental fund financial statements, a current financial resources measurement focus is applied. In the government-wide Statement of Net Position and the Statement of Activities, and the proprietary funds, an economic resources measurement focus is applied. Both governmental and business-type activities in the government-wide financial statements and the fund financial statements are presented using a modified cash basis of accounting. This modified cash basis of accounting is based on the recording of cash and cash equivalents and changes therein, and only recognizes revenues, expenses, assets and liabilities resulting from cash transactions adjusted for modifications that have substantial support in generally accepted accounting principles. These modifications include adjustments for the following balances arising from cash transactions:



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capital assets and the depreciation of those assets, where applicable

long-term debt and capitalized interest

cash-based interfund receivables and payables, if any

court bonds and rent deposits

investments and other deposits

utility deposit liabilities This basis is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. As a result of the use of the modified cash basis of accounting, certain assets and their related revenues (such as accounts receivable and revenue for billed or provided services not yet collected, and accrued revenue and receivables) and certain liabilities and their related expenses (such as accounts payable and expenses for goods or services received but not yet paid, and accrued expenses and liabilities) are not recorded in these financial statements. If the City used the basis of accounting required by generally accepted accounting principles, the fund financial statements for governmental funds would use the modified accrual basis of accounting and the fund financial statements for proprietary fund types would use the accrual basis of accounting. All government-wide financial statements would be presented on the accrual basis of accounting. Under the modified accrual basis of accounting, revenues would be recognized when susceptible to accrual (i.e. both measurable and available) and expenditures would be recorded when the current liability is incurred. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred. Program revenues within the statement of activities are derived from each activity or from parties outside the City’s taxpayers. The City has the following program revenues in each activity:

Public Safety: EMS runs, police fines and grants

Streets: Gas excise, commercial vehicle taxes, street lights and operating and capital grants

General Government: license and permits and operating and capital grants

Parks: Rentals and operating and capital grants The City reports the following funds: Governmental Funds

Major Governmental Funds:

General Fund - is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund.

Special Revenue Funds

Noble EMS Fund - accounts for emergency medical service activities.

Aggregated Non-Major Governmental Funds:

Special Revenue Funds:

Noble EMS District - accounts for emergency medical service activities (blended component unit). The district receives voter approved ad valorem taxes for operations and has debt funded from voter approved ad valorem taxes. Its operations are handled by the City and it contracts with the City handle the EMS operations. Therefore, the operation ad valorem tax is transferred to the City EMS fund.



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Debt Service Funds

Noble Sinking Fund – to account for ad valorem tax collections to liquidate 2012 bonds for street improvements

Proprietary Funds

Enterprise funds: are used to account for business-like activities provided to the general public. These activities are financed primarily by user charges and measurement of financial activity focuses on net income measurement similar to the private sector. The reporting entity includes the Noble Utility Authority enterprise fund and the related meter deposit fund. This fund accounts for activities of the public trust in providing water, wastewater and sanitation services to the public.

Major Enterprise Funds:

Noble Utilities Authority – that operates the water, sewer, and sanitation services of the City (blended component unit).

Non-Major Enterprise Funds:

Meter Fund - accounts for refundable water meter deposits.

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

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s enterprise fund are charges to customers for sales and services. Operating expenses for the enterprise fund include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

All of the above funds are legally required to adopt annual budgets or appropriations. The public trust (or Authority) is not required to adopt legal annual appropriations. While each trust develops an annual budget, it is for financial management purposes and does not constitute legal appropriations.

1.D. Assets, Liabilities and Fund Equity Cash, Cash Equivalents and Investments - The City’s cash and cash equivalents are considered to be cash on hand, demand deposit accounts, interest bearing checking accounts and time deposit accounts including certificates of deposit with maturities of three months or less from the date of acquisition and open-end government mutual funds. Investments for the City, as well as for its component units, are reported at cost. Deposits with Insurance Pool - Typically past refunds or interest earnings left on deposit with the Workers Compensation Insurance Plan to be disbursed upon instruction by the City of Noble. This deposit is held in escrow by the insurance pool and is invested. It is included in the cash and cash equivalents.



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Restricted Assets - Restricted assets include assets that are legally restricted as to their use. The primary restricted assets are related to customer utility deposits and trustee accounts restricted for debt service and capital improvements. Capital Assets – The accounting treatment of property, plant and equipment (capital assets) depends on whether they are reported in the government-wide or fund financial statements. In the government-wide statements and proprietary fund financial statements, capital assets are accounted for as capital assets, net of accumulated depreciation where applicable. In governmental fund financial statements, capital assets acquired are accounted for as capital outlay expenditures and not reported as capital assets. Capital assets consist of land, construction in progress, buildings, improvements, utility property/improvements, vehicles and equipment, surplus property and infrastructure. Recorded assets are reported at actual or estimated historical cost. A capitalization threshold of $2,000 is used to report capital assets. Donated capital assets are recorded at estimated fair market value at the date of donation. Estimated historical cost was used to value the majority of the assets, including infrastructure assets (such as roads, bridges, traffic systems) acquired prior to July 1, 2003. However, the infrastructure assets related to the current debt of the City and the Authority as of June 30, 2004 have been capitalized based upon the original bond issue cost or other debt. Infrastructure assets acquired since July 1, 2003 are recorded at cost. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. The depreciable capital assets are depreciated on a straight-line basis over the assets’ estimated useful lives. The range of estimated useful lives by type of asset is as follows:

Buildings 40 years

Improvements other than buildings 20 years

Vehicles and equipment 10 years

Utility property and improvements 40-50 years

General Infrastructure 15-50 years Due to Depositors - Represents the funds received from customers for their water utility deposits. These deposits are refunded or credited to the customer upon termination of the utility service and payment of all charges due and connected with the service. Effective August 2000, utility customers having a five-year history of good payment are eligible for a refund of their deposit. Police Bond Liability - Represents municipal court bonds held for individuals awaiting court dates. Long-Term Obligations – In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Long-term debt for governmental funds is not reported as liabilities in the fund financial statements. The debt proceeds are reported as other financing sources and payment of principal and interest reported as debt service expenditures.



B - 14

Compensated Absences – As a result of the use of the modified cash basis of accounting, accrued liabilities related to compensated absences (accumulated but unused vacation leave and compensatory time earned but unpaid at year-end), are not reflected in the financial statements. Expenditures/expenses related to compensated absences are recorded when paid. The amount of accrued compensated absences has been reported as a commitment in Note 4.C. Equity Classifications – In the government-wide and the proprietary fund financial statements, equity is classified as net position and displayed in three components:

a. Invested in capital assets, net of related debt – Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributed to the acquisition, construction, or improvements of those assets.

b. Restricted – Consists of net position with constraints placed on the use either by 1) external groups

such as creditors, grantors, contributors, or laws and regulations of other governments, or 2) law through constitutional provisions or enabling legislation.

c. Unrestricted – All other net positions that do not meet the definition of “restricted” or “invested in

capital assets, net of related debt.”

It is the City’s policy to first use restricted net position prior to the use of unrestricted net position when an expense is incurred for purposes for which both restricted and unrestricted net position are available.

Fund Statements: Governmental fund equity is classified as fund balance. Fund balance is further classified as nonspendable, restricted, committed, assigned and unassigned. These classifications are defined as:

a. Nonspendable – includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact.

b. Restricted – consists of fund balance with constraints placed on the use of resources either by (1)

external groups such as creditors, grantors, contributors, or laws or regulations of other governments, or (2) laws through constitutional provisions or enabling legislation.

c. Committed – included amounts that can only be used for specific purposes pursuant to constrains

imposed by formal action of the City’s highest level of decision-making authority. The City’s highest level of decision-making authority is made by ordinance while the NUA’s highest level of decision-making authority is made by resolution.

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 budgetary process.

e. Unassigned – represents fund balance that has not been assigned to other funds and has not been

restricted, committed, or assigned to specific purposes within the general fund.

It is the City’s policy to first use restricted fund balance prior to the use of unrestricted fund balance when an expense is incurred for purposes for which both restricted and unrestricted fund balances are available. The City’s policy for the use of unrestricted fund balance amounts require that committed amounts would be reduced first, followed by assigned amounts and then unassigned amounts when expenditures are incurred for



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purposes for which amounts in any of those unrestricted fund balance classifications could be used. The only exception to this policy is for assigned interest income in governmental funds other than the General Fund to be spent prior to restricted fund balance. In those funds, interest income is used first before other revenues.

1.E. Sales Tax Revenue

Sales Tax - The City presently levies a four-cent sales tax on taxable sales within the City. The sales tax is collected by the Oklahoma Tax Commission and remitted to the City in the month following receipt by the Tax Commission. The sales tax recorded is allocated one hundred percent to the General Fund. The City has pledged the four-cent sales tax to secure debt service payments in the Noble Utilities Authority. The sales tax is transferred to NUA each month. The Authority has the right to return to the City any part of the appropriated sales tax, if there is no event of default. For the year ended June 30, 2020, the City of Noble transferred sales tax of $1,521,851 to NUA and NUA transferred $1,521,851 back to the General Fund of the City of Noble to be used by the City.

1.F. Property Tax Revenue

Property Tax - Under State law, municipalities are limited in their ability to levy a property tax. Such tax may only be levied to repay principal and interest on general obligation bonded debt approved by the voters. At present time the City levies a property tax to fund the annual debt service requirements of the 2012 Street Improvement General Obligation Bonds. During the current fiscal year the Noble EMS District paid in full the 2006 Noble Emergency Medical Service District General Obligation Bonds and enacted a 2016 Noble Emergency Medical Service District General Obligation Bonds. The District did not levy a property tax to fund the annual debt service requirements the General Obligation Bonds during the current fiscal year, however will levy a property tax in the coming fiscal year. The EMS District also levies 3.08 mills for the operation of the EMS services in the District. The property tax levy, as determined by the City and the Noble EMS District’s debt service needs, is submitted to the county excise board for approval. The county assessor, upon receipt of the certification of tax levies from the county excise board, extends the tax levies on the tax roll for submission to the county treasurer prior to October 1; the county treasurer must commence tax collection within fifteen days of receipt of the tax rolls. The first half of taxes is due prior to January 1. The second half is due prior to April 1. If the first payment is not made timely, the entire tax becomes due and payable on January 2. Second half taxes become delinquent on April 1 of the year following the year of assessment. If not paid by the following October 1, the property is offered for sale for the amount of taxes due. The owner has two years to redeem the property by paying the taxes and penalty owed. If at the end of two years the owner has not done so, the purchaser is issued a deed to the property.

1.G. Use of Estimates

In preparing the City of Noble’s financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Depreciation is an estimate of the allocation of the cost of assets over its estimated useful life.



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Note 2 – Stewardship, Compliance, and Accountability

2.A. Budgetary Information The city manager submits an annual budget to the City Council in accordance with the Oklahoma Municipal Budget Act. In June the City Council adopts annual fiscal year appropriated budgets for all city funds. The appropriated budget is prepared by fund, department and categories (personal services, materials and supplies, other services and charges, capital outlay, debt service and transfers). Transfers of appropriations between departments within a fund require the approval of the City Manager. Transfers of appropriations between funds and supplements to the budget require City Council approval. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is the department level. The Sinking Fund and Emergency Medical Service Board estimate of needs must be filed with the county excise board.

Note 3 – Detailed Notes on all Funds

3.A. Deposits and Investments Risk

At June 30, 2020, the reporting entity had the following deposits and investments:

Carrying

Types of Deposits and Investments Value

Deposits:

Petty Cash 1,153

Demand deposits 2,381,741

OMAG Escrow 41,061

T ime Deposits 165,000

Total Deposits 2,588,955$

Credit

Investments: Maturities Rating

Open End Mutual Fund - (American Performance U.S. Treasury) N/A AAA 27,389$

Total Deposits and Investments 2,616,344$

Custodial Credit Risk - Deposits – Custodial credit risk is the risk that in the event of a bank failure, the City’s deposits may not be returned to it. The City does not have a written deposit policy for custodial credit risk, but Oklahoma Statutes requires collateral for all uninsured deposits of municipal funds in financial institutions. As of June 30, 2020, the City was not exposed to custodial credit risk. The money market mutual funds are not insured or guaranteed by the FDIC or any other government agency. The other City accounts were fully collateralized at June 30, 2020.

Investment Credit Risk – The City does not have a written investment policy that limits its investment choices other than the limitations stated in the Oklahoma Statutes. Oklahoma Statutes allow the City to invest in: (1) full faith and credit, direct obligations of the U.S. Government, its agencies and instrumentalities, and the State of Oklahoma and certain mortgage insured federal debt; (2) certificates of deposits or savings accounts 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,



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municipal or school district tax supported debt obligations, bond or revenue anticipation notes, money judgments, or bond or revenue anticipation notes of public trusts whose beneficiary is a county, municipality, or school district; and government money market funds regulated by the SEC. Public trusts created under O.S. Title 60, are not subject to the above investment limitations and are primarily governed by any restrictions in their trust or note indenture. The City’s only marketable investments at June 30, 2020 consisted of $27,389 in open ended mutual funds invested in U.S. Treasury securities with a Standard & Poor’s credit rating of AAA. Investment Interest Rate Risk – The City does not have a formal investment policy that limits investments maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The City’s only investments are in open ended mutual funds with available on demand. All certificates of deposit have maturities no later than April 2020. Concentration of Credit Risk – The City places no limit on the amount it may invest in any one issuer.

3.B. Restricted Assets The amounts reported as restricted assets consist of cash and investments held for the expenditure of bond proceeds and payment of bonds related to GO Bonds, amounts held by the trustee bank on behalf of the Noble Utilities Authority related to its required revenue bond accounts, capital improvement funds and amounts due to depositors related to utility deposits. The restricted assets as of June 30, 2020 were as follows:

Cash and Cash

Type of Restricted Assets Equivalents Investments

Water Project 2011 7,268$ -$

Customer Utility Deposits 22,687 165,000

Trustee Accounts:

Note-OWRB 27,389 -

Sinking Fund 51,784 -

EMS Funds 86,383 -

Total Restricted Assets 195,511$ 165,000$



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C. Capital Assets

Capital asset activity resulting from modified cash basis transactions for the fiscal year ended June 30, 2020 was as follows:

Balance Balance

6/30/2019 Additions Disposals 6/30/2020


Capital Assets, not being depreciated:

Land 379,224$ -$ -$ 379,224$

Construction in progress 43,314 72,054 115,368

Total Capital Assets, not being depreciated 422,538 72,054 - 494,592

Capital assets, being depreciated:

Buildings 2,321,998 30,450 - 2,352,448

Other Improvements 467,315 174,533 - 641,848

Vehicles and equipment 2,776,197 100,039 - 2,876,236

Surplus property 2,250 - - 2,250

Infrastructure 3,360,767 7,650 - 3,368,417

Total Capital Assets, being depreciated 8,928,527 312,672 - 9,241,199

Less accumulated depreciation for:

Buildings 1,181,409 52,484 - 1,233,893

Other Improvements 190,087 22,835 - 212,922


Surplus property 2,250 - - 2,250

Infrastructure 1,123,584 113,458 - 1,237,042

Total accumulated depreciation 4,110,551 363,819 - 4,474,370

Total capital assets, being depreciated, net 4,817,976 (51,147) - 4,766,829

Governmental activities capital assets, net 5,240,514$ 20,907$ -$ 5,261,421$

Balance Balance

6/30/2019 Additions Disposals 6/30/2020


Capital Assets, not being depreciated:

Land 294,341$ 277,857$ -$ 572,198$

Construction in progress - - - -

Total Capital Assets, not being depreciated 294,341 277,857 - 572,198

Capital assets, being depreciated:

Buildings 294,793 - - 294,793

Utility property/Improvements 6,895,479 - - 6,895,479


Surplus property - - - -

Total Capital Assets, being depreciated 8,640,426 37,462 - 8,677,888

Less accumulated depreciation for:

Buildings 45,043 6,970 - 52,013

Utility property/Improvements 2,714,043 168,950 - 2,882,993

Vehicles and equipment 468,407 80,388 - 548,795

Surplus property - - - -

Total accumulated depreciation 3,227,493 256,308 - 3,483,801

Total capital assets, being depreciated, net 5,412,933 (218,846) - 5,194,087

Business-type activities capital assets, net 5,707,274$ 59,011$ -$ 5,766,285$



B - 19

Depreciation expense was charged to functions as follows in the Statement of Activities:


Police 53,498$

Fire/EMS 119,118

General Government 17,899

Library 43,713

Parks 19,643

Streets 109,948

Total depreciation expense for governmental activities 363,819$


Water 140,097$

Sewer 116,211

Total depreciation expense for business-type activities 256,308$

3.D. Long-Term Debt

Long-term liability activity for the year ended June 30, 2020, was as follows:

Balance

6/30/19

Additions

Reductions

Balance

6/30/20

Amount Due

Within One Year


Capital Lease Obligation $ 120,021 $ 30,878 $ (62,384) $ 88,515 $ 51,497

State Obligation 2,950 - (2,544) 406 406

Series 2012 GO Bond 580,000 - (70,000) 510,000 70,000

Series 2016 GO Bonds 375,000 - (70,000) 305,000 75,000

Total Governmental Activities $ 1,077,971 $ 30,878 $ (204,928) $ 903,921 $ 196,903


Capital Lease Obligations $ 761,648 - (78,513) 683,135 71,405

Notes Payable-direct borrowing 800,148 - (52,787) 747,361 54,582

Total Business-Type Activities $ 1,561,796 $ - $ (131,300) $ 1,430,496 $ 125,987

Governmental Activities - State statutes prohibit the City from incurring any indebtedness or obligations that would require payment from resources beyond the current fiscal year revenue, without first obtaining voter approval. As of June 30, 2020, the long-term debt, arising from cash transactions, payable from governmental fund resources consisted of the following:



B - 20

Capital Lease Obligations:

$63,576 capital debt obligation with Oklahoma State Bank for 2 police cars, payable in annual installments of $16,587.22 final payment due November 2021 at a rate of 2.92%. $ 31,758

Current portion 15,657 Non-current portion 16,101 Total Capital Lease Obligations $ 31,758

$36,839 capital debt obligation with Oklahoma State Bank for a police car, payable in annual installments of $9,728 final payment due July 2022 at a rate of 3.33%. $ 17,592

Current portion 17,592 Non-current portion - Total Capital Lease Obligations $ 17,592

$32,461 capital debt obligation with Oklahoma State Bank for an animal control car, payable in annual installments of $8,571 final payment due June 2021 at a rate of 2.92%. $ 8,287

Current portion 8,287 Non-current portion - Total Capital Lease Obligations $ 8,287

$30,878 capital debt obligation with Oklahoma State Bank for a police car payable in annual installments of $10,976 at 3.28%, final payment due July 12, 2022.

$ 30,878


State Obligation:

The City of Noble agreed on June 1, 1990 to repay at no interest with the Oklahoma Department of Transportation its share in utility relocation costs. The City and State have agreed to a 30-year payout in which the City remits monthly principal installments of $212, final payment due September 2020. $ 406

Current portion 406 Non-current portion - Total State Obligation $ 406



B - 21

General Obligation Bonds:

$1,000,000 Series 2012 General Obligation Bonds due in annual installments of $70,000, final installment of $90,000 due June 01, 2027, interest payable semi-annual with interest rates from 2.0% to 3.19% for street improvements. The debt is secured by ad valorem or property taxes levied annually without limitation as to rate or amount to pay principal of and interest on 2012 Bonds. $ 510,000

Current portion 70,000

Non-current portion 440,000 Total Street GO Bonds $ 510,000

$445,000 Series 2016 Noble Emergency Medical Service District Bonds, due in semi-annual installments of interest only for the first two years and thereafter annual variable principal payments of $70,000, to $80,000, with semi-annually with interest rates from 1.75% to 2%, final installment of $81,600 due May 1, 2024 for the benefit of the EMS; $ 305,000

Current portion 75,000 Non-current portion 230,000 Total EMS General Obligation Bonds $ 305,000

Business-Type Activities – As of June 30, 2020, the long-term debt, arising from cash transactions, payable from proprietary fund resources consisted of the following: Capital Lease Obligations:

$27,545 capital debt obligation with Oklahoma State Bank for a vehicle, payable in annual installments of $9,690 at 3.28%, final payment due January 2022. $ 18,436


$725,000 capital debt obligation with Government Capital Corporation for, an automated meter reading system payable in annual installments of $90,173 at 4.19%, final payment due September 2028. $ 664,698




B - 22

Direct Borrowings – Long-term commitments payable from net revenues generated by the utility resources or other resources pledged to the City’s business-type activities at June 30, 2020 includes the following:

Revenue Notes Payable-Direct Borrowing:

2011 CWSRF Promissory Note to OWRB, original issue amount of $1,175,000 dated May, 2011as of the date of closing, issued by Noble Utilities Authority payable in semi-annual installments, interest rate not to exceed 2.7% fixed interest rate plus a one-half percent (1/2%) administration fee, for a term of approximately twenty (20) years. The collateral for the note is a pledge of revenues generated by the of the water and sewer system, along with a year-to-year pledge of certain sales tax revenue. In the event of default, the lender has all rights and remedies as allowed by law or pursuant to the provisions of the loan agreement, including but not limited to: 1) suit for specific performance of any or all of the covenants of the borrower contained in the loan agreement or in the note; 2) acceleration of the payment of principal and interest on the note; 3) appointment of temporary trustees to takeover, operated and maintain the System on a profitable basis and ensure the payment of the principal and of interest and administrative fees on the note and any other borrower indebtedness; 4) suit at law or equity to enforce or enjoin the action or inaction of parties under the provisions of the loan agreement.

$ 747,361

Current portion 54,582 Non-current portion 692,779 Total Revenue Notes Payable $ 747,361

Utility Revenues Pledged

The City has pledged future water and sewer customer revenues, net of specified operating expenses, to repay $1.175 million in a promissory note to OWRB issued May 2011. The notes are payable from water and sewer customer net revenues and future sales tax revenue (discussed below). and are payable through 2031. Annual principal and interest payments on the note are expected to require less than 40 percent of net revenues. The total principal and interest remaining to be paid on the notes is $901,550. Principal and interest paid for the current year and total customer net revenues were $77,631and $708,045 respectively.

Sales Tax Revenues Pledged

The City has pledged future sales tax revenues to repay the OWRB $1.175 million 2011 promissory note. The notes are payable from future sales tax revenue. The total principal and interest remaining to be paid on the notes are $901,550 payable through 2031. For the current year, principal and interest paid and total sales tax revenues were $77,631 and $1,521,851 respectively.

Property Tax Revenue Pledged

The City and the EMS District has pledged future property tax revenues to repay two remaining general obligation bonds. A $445,000 2016 Series EMS capital asset bond issued April 2016 and a $1,000,000 Series 2012 street improvement bond. These bonds are payable from future property tax revenue. The total remaining principal and interest to be paid on the bonds totals $896,055 payable through June, 2027. For the current year, principal and interest and total property tax revenues were $164,083 and $258,625 respectively.



B - 23

The long-term debt service requirements to maturity are as follows: Governmental

Activities:

Year Ending

June 30, Principal Interest Principal Interest Principal Interest Principal Interest

2021 43,015 2,806 406 - 70,000 15,120 75,000 5,538

2022 34,872 1,470 - - 70,000 13,545 75,000 4,225

2023 10,628 349 - - 70,000 11,795 75,000 2,912

2024 - - - - 70,000 9,870 80,000 1,600

2025 - - - - 70,000 7,770 - -

2026-2028 - - - - 160,000 8,680 - -

Total 88,515$ 4,625$ 406$ -$ 510,000$ 66,780$ 305,000$ 14,275$

Business-Type

Activities:

Year Ending

June 30, Principal Interest Principal Interest

2021 71,405 28,458 54,582 23,814

2022 74,286 25,547 56,367 22,028

2023 67,654 22,519 58,211 20,185

2024 70,489 19,684 60,066 18,330

2025 73,442 16,731 62,079 16,316

2026-2030 325,858 34,834 342,187 49,791

2031-2032 - - 113,869 3,725

Total 683,134$ 147,773$ 747,361$ 154,189$

GO Bonds-EMS District

Obligations

Capital Lease State Obligations GO Bonds-Streets

Capital Lease Direct Borrowings

Obligations

Revenue Notes Payable

Interest expense was charged to functions as follows in the Statement of Activities: Business-Type Activities

Water $58,578

The capital assets acquired through capital leases are as follows: Accumulated

Date Capital Asset Amount Depreciation

Vehicles: 1/10/17 2016 Dodge Charger 32,027 16,013 1/10/17 2016 Dodge Charger 32,027 11,209 1/10/17 2016 Dodge Charger 32,027 11,209

12/15/16 2017 Ford F 150 26,675 9,558 12/15/16 2017 Ford F 150 26,675 9,558 12/15/16 2017 Police Interceptor 30,469 10,918 1/23/18 2019 Dodge Charger 31,788 5,033

11/23/18 2019 Dodge Charger 31,788 5,033 4/24/19 2019 Dodge Durango 36,384 4,298

8/7/18 2018 Ford F 150 32,461 6,222 4/29/19 2019 Ford Explorer 27,545 3,214 7/12/19 2019 Ford F 150 30,878 3,087

$ 370,744 $ 95,352



B - 24

Debt Service Coverage Requirement:

The OWRB debt agreement requires that Net Revenue Available for Debt Service must equal 125% of maximum annual debt service. Actual coverage was met as follows:

Amount

Net Revenue Available for Debt Service:

Operating revenues 2,634,494

Less: Sanitation revenues (753,210)

Investment income 6,407

Sales tax transfer 1,521,851

Total Gross Revenues Available 3,409,542

Operating expenses 1,801,707

Less: Sanitation expenses (365,753)

Less: Depreciation and Amortization (256,308)

Total Operating Expenses 1,179,646

Net Revenues Available for Debt Service 2,229,896$

Debt Service Requirement:

Maximum annual debt service 77,631$

Coverage 2872%

Coverage Requirement 125%

3.E. Interfund Receivables, Payables, and Transfers The Town’s policy is to eliminate interfund receivables and payables between funds in the Statement of Net Position to avoid the grossing up of balances. Only the residual balances due between governmental and business-type activities are reported as internal balances and then offset in the total column.

Due From Due To Amount Nature of Balance

NUA Noble EMS $ 19,761 To cover overdraft

Reconciliation to Fund Financial Statements:

Due from Other

Funds Due to Other

Funds Net Activity/

Internal Balances

Governmental Funds $ 19,761 $ -0- $ 19,761 Proprietary Funds -0- (19,761) ( 19,761)

Total $ 19,761 $ (19,761) $ -



B - 25

The composition of interfund balances as of June 30, 2020 was as follows: Interfund Transfers:

Transfer Out Transfer In Amount Purpose of Transfer

General Fund NUA 1,521,851$ To transfer sales tax for debt purposes

NUA General Fund 342,136 Operating subsidy

NUA General Fund 7,771 Debt service

EMS District Noble EMS Fund 106,400 To transfer property tax

NUA General Fund 1,521,851 Return of unused sales tax

NUA Noble EMS Fund 98,398 Operating subsidy

3,598,407$

Reconciliation to Fund Financial Statements:

Transfers In Transfers Out

Net

Transfers

Governmental Funds 2,076,557$ (1,628,251)$ 448,306$

Enterprise Funds 1,521,851 (1,970,157) (448,306)

Total 3,598,408$ (3,598,408)$ -$

Reconciliation to Statement of Activities:

Net transfers-governmental activities $448,306 Net transfers-business type -448,306 Transfers – internal activity $ -0-



B - 26

3.A. Fund Equity

The following table shows the fund balance classifications as shown in the Governmental Funds’ Balance

Sheet in accordance with GASB Statement 54 and Proprietary Fund Statement of Net Position:

General Fund GO Sinking Noble EMS EMS District Total

Fund Balance:

Restricted For:

Parks 43,512$ -$ -$ -$ 43,512$

EMS Sinking - - - 86,383 86,383

EMS Operations - - - 21,510 21,510

Animal Shelter 1,617 - - - 1,617

Police 3,000 - - - 3,000

G.O. Sinking - 51,784 - - 51,784

Sub-total Restricted 48,129 51,784 - 107,893 207,806

Assigned to:

Public Safety 57,236 - - - 57,236

EMS Income - - 98,912 - 98,912

Juvenile Court 5,818 - - - 5,818

63,054 - 98,912 - 161,966

Unassigned 53,650 - - - 53,650

Total Fund Balance 164,833$ 51,784$ 98,912$ 107,893$ 423,422$

Proprietary Funds Restricted:

Capital Improvements 61,473$

Debt Service 27,389

Total Proprietary Fund 88,862$

Note 4 - Other Notes

4.A. Risk Management

The City is exposed to various risks of loss related to torts; theft of, damage to, or destruction of assets; errors and omissions; injuries to employees; employee health and life; and natural disasters. The City manages these various risks of loss as follows:

General Liability, Fleet Coverage, and Physical Property – Covered through participation in Oklahoma Municipal Assurance Group risk entity pool.

Fire Department Vehicles – Covered through participation in the Risk Management Division of the Department of Central Services, State of Oklahoma self-insurance pool.

Workers’ Compensation – Workers’ compensation is covered through participation in the Oklahoma Municipal Assurance Group risk entity pool.

Employee’s Group Medical – Covered through purchase of commercial insurance.



B - 27

The City’s risk is transferred to the risk entity pool except for claim deductible amounts. The risk pool maintains deposits for claim reserves and other purposes for the benefit of the city. Management believes the insurance coverage listed above is sufficient to preclude any significant uninsured losses to the City, and such claims have not exceeded the coverage over the past three years.

4.B. Contingencies

Federal and State Award Programs - The City of Noble participates in various federal and state grant/loan programs from year to year. Amounts received or receivable from grantor agencies are often subject to audit and adjustment by the grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable fund. The amount, if any, of expenditures which may be disallowed by the grantor agency cannot be determined at this time, although the City expects such amounts, if any, to be immaterial.

Litigation - The City is a party to various legal proceedings that normally occur in the course of governmental operations. The financial statements do not include accrual or provision for loss contingencies that may result from these proceedings. State statutes provide for the levy of an ad valorem tax over a three-year period by a City Sinking Fund for the payment of any court-assessed judgment rendered against the City. This provision is not applicable to authorities or public trusts. While the outcome of the above noted proceedings cannot be predicted, due to the insurance coverage maintained by the City and the State statute relating to judgments, the City feels that any settlement or judgment not covered by insurance would not have a material adverse effect on the financial condition of the City.

4.C. Commitments

Compensated Absences – As a result of the City’s use of the modified cash basis of accounting, accrued liabilities related to compensated absences (accumulated but unused vacation leave, compensatory time earned but unpaid at year-end, and banked holiday) are not reflected in the financial statements. The City is not tracking the accrued benefit and so the liability amount has not been determined.

4.D. Subsequent Events

Management has evaluated subsequent events through the date of the audit report, which is the date the financial statements were available to be issued and has determined that no additional information needs to be added to the financial statements.

4.E. Employee Pension Plans

The City of Noble participates in four pension or retirement plans:

1. Oklahoma Firefighter’s Pension and Retirement System (OFPRS) – a statewide cost-sharing plan 2. Oklahoma Police Pension and Retirement System (OPPRS) – a statewide cost-sharing plan 3. Oklahoma Municipal Retirement Fund (OMRF) – a cost sharing multiple-employer defined benefit

plan 4. Nationwide Retirement – IRC 457(b) Plan – an employee contributions only deferred compensation

plan

Firefighters’ Retirement Plan – Pursuant to the requirements of Title 11, section 22-102, the City of Noble participates in the statewide cost-sharing multi-employer defined benefit plan administered by the Oklahoma Firefighter’s Pension and Retirement System (OFPRS) on behalf of both paid and volunteer firefighters. The City has no responsibility or authority for the operation and administration of the pension program nor has it any related liability, except for the current contribution requirements.



B - 28

The contribution rates for the City and its employees are established by Statute. The City is required to contribute 14% for year ended June 30, 2020. Participating members are required to contribute 9%. The plan is funded by contributions from participants, employers, insurance premium taxes, and state appropriations, as necessary. Contributions for the last three years were as follows:

Fiscal Year

Required

Contribution

Amount

Contributed

2018 87,585$ 87,585$

2019 88,879$ 88,879$

2020 82,152$ 82,152$

The OFPRS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained on the website at www.ok.gov/fprs or by writing to OFPRS, 4545 North Lincoln Blvd., Suite 265, Oklahoma City, OK 73105-3414.

Policemen’s Retirement Plan - The City of Noble participates in the statewide cost-sharing multi-employer defined benefit plan administered by the Oklahoma Police Pension and Retirement System (OPPRS) on behalf of paid officers. The City has no responsibility or authority for the operation and administration of the pension program nor has it any related liability, except for the current contribution requirements.

The contribution rates for the City and its employees are established by Statute. The City is required to contribute 13% for the year ended June 30, 2020. Participating members are required to contribute 8%. The plan is funded by contributions from participants, employers, insurance premium taxes, and state appropriations, as necessary. Contributions for the last three years were as follows:

Fiscal Year

Required

Contribution

Amount

Contributed

2018 48,137$ 48,137$

2019 55,736$ 55,736$

2020 62,985$ 62,985$

The OPPRS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained on the website at www.ok.gov/opprs or by writing by writing to OPPRS, 1001 NW 63rd Street, Suite 605, Oklahoma City, OK 73116-7335.

Defined Benefit Plan – Oklahoma Municipal Retirement Fund

The City and its employees participate in an agent multiple employer defined pension plan through the Oklahoma Municipal Retirement Fund (OMRF). All regular full time employees, except those covered under another retirement system, are eligible. Employees are vested at 5 years. The City’s OMRF defined benefit pension plan provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries.



B - 29

The OMRF System issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained on the website at www.okmrf.org/reports or by writing to OMRF, P.O. Box 25848, Oklahoma City, OK 73125 or by calling 1-888-394-6673. Funding Policy - The contribution requirements of City of Noble and employees are established and may be amended by the OMRF board. Employees are required to contribute 4.25% of their annual covered salary. City of Noble is required to contribute at an actuarially determined rate; the rate is 13% of covered payroll. The required contribution was determined as part of the March 2015 actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included (a) 7.5% investment rate of return, and (b) projected salary increases due to inflation of 3% compounded annually (higher for younger employees), and projected salary increases due to age/seniority, compounded annually. Funding requirements may increase in the future as benefits accrue.

Annual Pension Cost – The City of Noble’s annual pension cost for 2020, 2019, and 2018 were $124,546, $123,275, and $118,718, respectively. Governmental Deferred Compensation 457 Plan – The City of Noble has an IRS Code Section 457 deferred compensation plan through Nationwide Retirement Solutions. The plan is an employee contribution only and the City does not make contributions on behalf of the employees.

Variance with

Actual Final Budget

Original Final Amounts Positive (Negative)

Beginning Budgetary Fund Balance $ 68,827 $ 68,827 $ 110,120 $ 41,293

Resources (Inflows):

Taxes 1,976,000 1,976,000 2,191,136 215,136

Intergovernmental 87,000 87,000 96,885 9,885

Charges for Services 14,500 14,500 - (14,500)

Fines and Forfeitures 171,100 171,100 129,867 (41,233)

Licenses and Permits 95,000 95,000 142,715 47,715

Investment Income 500 500 83 (417)

Grant Revenue 59,000 59,000 21,782 (37,218)

Street Lighting 41,000 41,000 42,125 1,125

Miscellaneous 41,000 41,000 97,169 56,169

Transfers In 2,347,752 2,347,752 1,863,987 (483,765)

Total Resources (Inflows) 4,832,852 4,832,852 4,585,749 (247,103)

Amounts available for appropriations 4,901,679 4,901,679 4,695,869 (205,810)

Charges to Appropriations (Outflows):

City Manager 93,022 75,022 70,109 4,913

Office & Managerial 312,578 312,578 294,773 17,805

Court/Attorney 107,819 107,819 104,061 3,758

Police 1,101,434 1,119,434 1,054,470 64,964

Dispatch 213,482 217,332 217,145 187

Animal Control 122,550 118,700 85,565 33,135

Fire 473,333 473,333 446,147 27,186

General Government 199,700 199,700 190,987 8,713

Library 69,277 69,277 52,848 16,429

Parks 244,000 300,780 300,091 689

Streets 514,484 385,844 283,966 101,878

Transfer Out 1,450,000 1,521,860 1,521,851 9

Total Charges to Appropriations 4,901,679 4,901,679 4,622,013 279,666

Ending Budgetary Fund Balance $ - - 73,856 73,856

Reconciliation to Statement of Revenues, Expenditures, and Changes in

Fund Balance:

General Fund Fund Balance $ 164,833

Encumbrances (90,977)

Ending Budgetary Fund Balance $ 73,856

Budgeted Amounts


Budgetary Comparison Schedule

General Fund - Modified Cash Basis


See disclaimer in Independent Auditor's Report

C - 1

Variance with

Actual Final Budget

Original Final Amounts Positive (Negative)

Beginning Budgetary Fund Balance $ 33,649 $ 33,649 $ 20,641 $ (13,008)

Resources (Inflows):

Charges for Services 620,000 620,000 648,468 28,468

Investment Income 100 100 45 (55)

Grant Revenue - - 10,132 10,132

Miscellaneous Income 1,000 9,786 2,654 (7,132)

Transfers In 125,088 125,088 204,799 79,711

Total Resources (Inflows) 746,188 754,974 866,098 111,124

Amounts available for appropriations 779,837 788,623 886,739 98,116

Charges to Appropriations (Outflows):

Administration 32,069 32,069 31,191 878

EMS 747,768 756,554 756,268 286

Transfer Out - - - -

Total Charges to Appropriations 779,837 788,623 787,459 1,164

Ending Budgetary Fund Balance $ - $ - $ 99,280 $ 99,280

Reconciliation to Statement of Revenues, Expenditures, and Changes in

Fund Balance:

EMS Fund - Fund Balance $ 98,912

Encumbrances 368

Total Funds Accounted in EMS Fund Balance $ 99,280

Budgeted Amounts


Budgetary Comparison Schedule

Noble EMS Fund - Modified Cash Basis


See disclaimer in Independent Auditor's Report

C - 2

CITY OF NOBLE, OKLAHOMA Footnotes to Budgetary Comparison Schedules


C - 3

1. The budgetary comparison schedules are reported on the same modified cash basis as

governmental funds within the basic financial statements. For budgetary comparison

purposes, the City considers all encumbrances as expenditures at yearend. However, the

City financial statements are reported on the modified cash basis and so expenditure are only

recorded when they are paid.

2. The legal level of appropriation control is the department level within a fund. Transfers of

appropriation within a fund require City Manager’s approval, while supplemental

appropriations require City Council approval.


Combining Balance Sheet

General Fund Accounts - Modified Cash Basis

June 30, 2020

General Court Total

Fund Fund General

Account Account Fund

Assets

Cash and cash equivalents $ 123,772 $ 4,339 $ 128,111

Deposits with Insurance Pool 41,061 - 41,061

Total Assets 164,833 4,339 169,172

Liabilities

Court Bonds & Other Payables - 4,339 4,339

Total Liabilities - 4,339 4,339

Fund Balances

Nonspendable - - -

Restricted 48,129 - 48,129

Committed - - -

Assigned 63,054 - 63,054

Unassigned 53,650 53,650

Total Fund Balances 164,833 - 164,833

Total Liabilities and Fund Balances $ 164,833 $ 4,339 $ 169,172

C - 4


Combining Statement of Revenues, Expenditures, and Changes in Fund Balances

General Fund Accounts - Modified Cash Basis


General Court Total

Fund Fund General

Account Account Fund

Revenues

Taxes $ 2,191,136 $ - $ 2,191,136

Intergovernmental 118,667 - 118,667

Charges for services 42,125 - 42,125

Fines and forfeitures 129,867 - 129,867

Licenses and permits 142,715 - 142,715

Investment income 83 - 83

Miscellaneous 97,169 - 97,169

Total Revenues 2,721,762 - 2,721,762

Expenditures

Current:


Police 1,292,265 - 1,292,265

Animal control 76,994 - 76,994

Fire/EMS 409,802 - 409,802

General government 190,987 - 190,987

Library 35,535 - 35,535

Parks 18,339 - 18,339

Streets 211,212 - 211,212

Capital outlay 380,598 - 380,598

Debt service:

Principal 64,929 - 64,929

Interest 2,291 - 2,291

Total Expenditures 3,047,834 - 3,047,834

Excess (Deficiency) of Revenues over

Expenditures (326,072) - (326,072)


Loan Proceeds 30,878 - 30,878

Transfers in 1,871,758 - 1,871,758

Transfers out (1,521,851) - (1,521,851)

Total Other Financing Sources (Uses) 380,785 - 380,785

Net Change in Fund Balances 54,713 - 54,713

Fund Balances - beginning 110,120 - 110,120

Fund Balances - ending $ 164,833 $ - $ 164,833

C - 5

Special Debt Total

Revenue Fund Service Fund Nonmajor

Noble Noble

EMS Sinking Governmental

District Fund Funds

Assets

Cash and Cash Equivalents $ 21,510 $ - $ 21,510


Total Assets 107,893 51,784 159,677

Liabilities

Due to Other Funds - - -

Total Liabilities - - -

Fund Balances

Non Spendable - - -

Restricted 107,893 51,784 159,677

Committed - - -

Assigned - - -

Unassigned - - -

Total Fund Balances 107,893 51,784 $ 159,677

Total Liabilities and Fund Balances $ 107,893 $ 51,784 159,677


Combining Balance Sheet

Nonmajor Governmental Funds - Modified Cash Basis

June 30, 2020

C - 6

Special Debt Total

Revenue Fund Service Fund Nonmajor

Noble Noble

EMS Sinking Governmental

District Fund Funds

Revenues

Taxes $ 171,164 $ 87,461 $ 258,625

Investment Income 1,078 70 1,148

Total Revenues 172,242 87,531 259,773

Expenditures


Debt Service:

Principal 70,000 70,000 140,000

Interest 7,063 17,020 24,083

Total Expenditures 83,388 87,020 170,408

Excess (Deficiency) of Revenues Over

(Under) Expenditures 88,854 511 89,365


Transfers In - - -

Transfers Out (106,400) - (106,400)

Total Other Financing Sources (Uses) (106,400) - (106,400)

Net Change in Fund Balances (17,546) 511 (17,035)

Fund Balances - Beginning 125,439 51,273 176,712

Fund Balances - Ending 107,893 51,784 $ 159,677


Combining Statement of Revenues, Expenditures, and Changes in Fund Balances

Nonmajor Governmental Funds - Modified Cash Basis


C - 7

Award Current Year Current Year

Grantor/Program Title Amount Revenues Expenditures

Federal Awards:

Department of Justice - Bulletproof Vest $ 1,140 1,140 1,140

FEMA-SLA EMPG 18 10,000 2,500 2,500

FEMA-SLA EMPG 19 10,000 7,500 7,500

Oklahoma Department of Tourism & Recreation 49,717 6,000 16,656

Federal Cares Act-Stimulus HHS 10,132 10,132 10,132

17525`CBDG 19 224,999 - -

Total Federal Awards $ 305,988 $ 27,272 $ 37,928

State Awards:

Department of Agriculture - Fire 4,642 4,642 4,642

Total State Awards $ 4,642 $ 4,642 $ 4,642

Note A. Basis of Presentation

Note B. Summary of Significant Accounting Policies

Note C. Indirect Cost Rate

Note D. Prior Year Expenditures

On the prior year grant schedule the Oklahoma Department of Tourism grant expenditures were overstated. The

expenditures were reported as $43,406. This amount included local match expenditures. The actual prior year

expenditures were $33,061.

The accompanying schedule of federal and state awards (the "Schedule") includes the federal and state award

activity of the City of Noble under programs of the federal government of the year ended June 30, 2019. The

information in this Schedule is presented in accordance with the requirements of the Title 2 U.S. Code of Federal

Regulations Part 200, Uniform Administration Requirements, cost Principles, and Audit Requirements for

Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of

the City of Noble, it is not intended to and does not present the financial positions, changes in net position, or cash

Expenditures reported on the Schedule are reported on the modified cash basis of accounting. Such expenditures

are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of

expenditures are not allowed or are limited as to reimbursements. Negative amounts shown on the Schedule

represents adjustments or credits made in the normal course of business to amounts reported as expenditures in

The City of Noble has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform

Guidance.


Schedule of Federal and State Awards

Modified Cash Basis


Notes to Schedule of Federal and State Awards for the Year Ended June 30, 2019

D - 1

E - 1

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF THE ACCOMPANYING FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS Members of the City Council City of Noble, Oklahoma We have audited audit, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the accompanying modified cash basis financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Noble, Oklahoma, as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements and have issued our report thereon dated December 16, 2020. The report was a special report on the City’s use of a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) to determine the audit procedure that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that have not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We did identify certain deficiencies in internal control described in the accompanying Schedule of Findings and Recommendations that we consider to be significant deficiencies: 20-001.

City of Noble, Oklahoma Page 2

E - 2

Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. 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 instances of noncompliance or other matters that are to be reported under Government Auditing Standards and which are described in the accompanying Schedule of Findings and Recommendations as item 20-001. Purpose of This Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Chickasha, Oklahoma December 16, 2020


SCHEDULE OF FINDINGS AND RECOMMENDATIONS


E – 3

Deficiencies of Internal Control, Compliance and Other Matters

20-001. Criteria – Utility rates are established by the Council to be implemented by the City’s

administration.

Condition – The 2nd tier of water usage rate was incorrectly input into the billing system.

Cause and Effect – When the new rates established by the Council were input into the billing system there was an inadvertent error on the 2nd tier of water usage rates causing each residential customer using over 1,000 gallons to be undercharged monthly $.66. Estimated under collection of water revenues, for the year, is approximately $15,000. Recommendation – When new utility rates are changed in the billing system, the City should manually calculate and test each rate to verify the system is billing each customer correctly.

Management response – See E-5 for responses.


DISPOSITION OF PRIOR YEAR FINDINGS


E - 4

Deficiencies of Internal Control, Compliance and Other Matters:

No findings noted in current year.

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