OUA Audit Report 9-30-2020OKEECHOBEE UTILITY AUTHORITY
FINANCIAL STATEMENTS WITH INDEPENDENT
AUDITOR'S REPORT THEREON
SEPTEMBER 30, 2020
OKEECHOBEE UTILITY AUTHORITY
SEPTEMBER 30, 2020
TABLE OF CONTENTS
Independent Auditor's Report
Management's Discussion and Analysis (required supplementary information)
Basic Financial Statements:
Statement of Net Position
Statement of Revenues, Expenses, and Changes in Net Position
Statement of Cash Flows
Statement of Fiduciary Net Position
Statement of Changes in Fiduciary Net Position
Notes to Financial Statements
REQUIRED SUPPLEMENTAL INFORMATION
Schedule of Changes in Total OPEB Liability
Schedule of Changes in Net Pension Liability and Related Ratios
Schedule of Employer Contributions and Investment Returns
Notes to the Schedule of Contributions
OTHER REPORTS
Independent Auditor's Report on Internal Control Over Financial Reporting and on
Compliance and on Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards
Independent Auditor's Report on Compliance for Each Major
State Project and on Internal Control Over Compliance
Required by Chapter 10.550, Rules of the Auditor General
Schedule of Expenditures of State Financial Assistance
Schedule of Findings and Questioned Costs
Management Letter in Accordance with the Rules of the Auditor General
of the State of Florida
Independent Accountant's Report on Compliance with
Section 218.415, Florida Statutes
P�
1-3
: •
10- 11
12
13-14
15
16
17-45
46
47
48
49
50-51
52-54
55
56-57
58-60
61
NOWLEN, HOLT & MINER, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
WEST PALM BEACH OFFICE
NORTHBRIDGECENTRE
515 N. FLAGLER DRIVE, SUITE U00
POST OFFICE BOX 347
WEST PALM BEACH, FLORIDA 33402-0347
TELEPHONE (561) 659-3060
FAX (561) 835-0628
W W W.NHMCPA.COM
INDEPENDENT AUDITOR'S REPORT
The Honorable Chairman and Members of the
Okeechobee Utility Authority Board
Okeechobee, Florida
Report on the Financial Statements
EVERETT B. NOWLEN (1930-1984), CPA
EDWARD T. HOLT, CPA
WILLIAM B. MINER, RETIRED
ROBERT W. HENDRIX, JR., CPA
JANET R. BARICEVICH, RETIRED, CPA
TERRYL.MORTON,JR.,CPA
N. RONALD BENNETT, CVA, ABV, CFF, CPA
ALEXIA G. VARGA, CFE, CPA
EDWARD T. HOLT, JR., PFS, CPA
BRIAN J. BRESCIA, CFP�", CPA
MARK J. BYMASTER, CFE, CPA
RVAN M. SHORE, CFP°", CPA
WEI PAN, CPA
WILLIAM C. KISKER, CPA
RICHARD E. BOTTS, CPA
BELLE GLADE OFFICE
333 S.E. 2nd STREET
POST OFFICE BOX 338
BELLE GLADE, FLORIDA 33430-0338
TELEPHONE (561) 996-5612
FAX (561) 996-6248
We have audited the accompanying financial statements of the proprietary fund and aggregate
remaining fund information of the Okeechobee Utility Authority as of and for the year ended
September 30, 2020, and the related notes to the financial statements, which collectively
comprise the Okeechobee Utility Authority's basic financial statements as listed in the table of
contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these iinancial 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 iinancial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity's preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the entity's internal control.
1
AMERICAN INSTITUTE flF CERTIFiE� PU6LIC ACCOUNTANTS • FLORIQA INSTITUTE OF CERTIFIEa PUBLIC ACCflUNTANTS • CPAMERiCA ENTERfVATI�NAL
Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the proprietary fund and the aggregate remaining fund
information of the Okeechobee Utility Authority as of September 30, 2020, and the respective
changes in financial position, and, where applicable, cash flows thereof for the year then ended
in accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementa�y Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis on pages 4 through 9, the schedule of changes in the total
OPEB liability on page 46, and the pension schedules on pages 47 through 49 be presented to
supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board, who
considers it to be an essential part of financial reporting for placing the basic financial statements
in an appropriate operational, economic, or historical context. We have applied certain limited
procedures to the required supplementary information in accordance with auditing standards
generally accepted in the United States of America, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency
with management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an
opinion or provide any assurance on the information because the limited procedures do not
provide us with sufficient evidence to express an opinion or provide any assurance.
Othe� Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Okeechobee Utility Autharity's basic financial statements. The
schedule of expenditures of state financial assistance on page 55 is presented for purposes of
additional analysis as required by Chapter 10.550, Rules of the Auditar General, and is not a
required part of the basic financial statements.
The schedule of expenditures of state iinancial assistance is the responsibility of management
and was derived from and relates 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
2
procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the 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 information is fairly
stated in all material respects in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
March 22, 2021, on our consideration of the Okeechobee Utility Authority's internal control over
financial reporting and on our tests of its compliance with certain provisions of laws, regulations,
contracts, 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 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 Okeechobee Utility Authority's internal control over
financial reporting and compliance.
West Palm Beach, Florida
March 22, 2021
`�a��; �2� 4 �'�u� , �A,
3
Okeechobee Utility Authority
Management's Discussion and Analysis
For the Fiscal Year Ended September 30, 2020
Management's Discussion and Analysis (MD&A) is intended to provide an objective analysis of the
Okeechobee Utility Authority (the "Authority") financial activities for fiscal year ended September 30,
2020. The analysis provides summary financial information for the Authority and should be read in
conjunction with the audited financial statements.
FINANCIAL HIGHLIGHTS
■ The Authority's assets exceeded its liabilities at September 30, 2020, by $52 million (Net Position).
Of this amount, approximately $5.2 million is its unrestricted net position (Table 1).
■ The Authority refunded the balance of its $16.390 million of Capital Improvement Revenue Notes
with a savings in interest expense of approximately $480,000 over the next 10 years.
■ The Authority's operating and miscellaneous revenues decreased $89,004 over FY2019 and
operating expenses increased by $280,434 or 2.87% from FY2019 (Table 2).
■ Operating expenses were $9.389 million, which was 8.6% less than budget.
■ Subsequent to the end of the fiscal year, the Authority received $13,250,000 in additional grants
from the Florida Department of Environmental Protection to help pay for the Septic to Sewer
project referred to as the Southwest Wastewater Service Area, expanding the wastewater collection
system for Pine Ridge Park and Okee-Tantie Wastewater Improvements.
■ The Authority's total capital assets, before accumulated depreciation, increased by approximately
$0.7 million from FY2019 (Table 3).
OVERVIEW OF THE FINANCIAL STATEMENTS
This management discussion and analysis (MD&A) is intended to serve as an introduction to the
Authority's financial statements. Since the Authority is a special district involved solely in the
provision of water and wastewater services within the service area of the utility system, its operations
are accounted for in a Proprietary Fund, specifically an Enterprise Fund. Enterprise Funds are used to
report business-type functions, which recover all or a significant portion of their costs through user fees
and charges. Over time, significant changes in the Authority's net position serve as a useful indicator
of whether its financial health is improving or deteriorating. To fully assess the financial health of any
entity, the reader must also consider other non-financial factors such as changes in economic
conditions, customer growth, and legislative mandates.
The Okeechobee Utility Authority Employees' Retirement System is a component unit of the Authority
as it is fiscally dependent on and imposes a specific financial burden. It is reported in the Authority's
iinancial statements as a Fiduciary Fund, the General Employee's Pension Trust Fund. Fiduciary Funds
are not included in the government-wide financial statements because the Authority cannot use these
assets to iinance its operations. Therefore, there are no government-wide financial statements, as they
would be redundant to the fund financial statements.
�
REQUIRED FINANCIAL STATEMENTS
The financial statements report information about the Authority using accounting methods similar to
those used by private business entities. The costs of providing goods or services are primarily
recaptured primarily through user charges for water and wastewater services. The full accrual basis of
accounting is used whereby revenues are recorded when earned and expenses are recorded when a
liability is incurred, regardless of the timing of related cash flows.
The Statement of Net Position includes the Authority's assets, deferred outflows of resources,
liabilities, and deferred inflows of resources. It provides information about the nature and amounts of
investments in resources (assets) and the obligations to creditors (liabilities). It also provides the basis
for evaluating the capital structure of the Authority and assessing the liquidity and financial flexibility
of the Authority. The current year's revenues and expenses are accounted for in the Statement of
Revenues, Expenses, and Changes in Net Position. This statement measures the results of the
Authority's operations over the past year and may be used to determine whether the Authority is
efficiently recovering all its costs through its user fees and other charges. These two statements help
the reader understand the Authority's profitability and credit worthiness.
The third required financial statement is the Statement of Cash Flows. The primary purpose of this
statement is to provide information about the Authority's cash receipts and cash payments during the
reporting period. This statement reports cash receipts, cash payments, and net changes in cash resulting
from operating, investing, and financing activities. Answers to questions regarding sources of cash,
uses of cash, and changes in cash balances during the reporting period may be found in the Statement
of Cash Flows.
The Notes to the Financial Statements provide additional information that is essential to a full
understanding of the financial statements.
FINANCIAL ANALYSIS OF THE AUTHORITY AS A WHOLE
The Statement of Net Position and the Statement of Revenues, Expenses, and Changes in Net Position
report information about the Authority's activities in a way that reflects whether the Autharity is
improving or deteriorating as a result of the fiscal year's activities. These two statements report the
net position of the Autharity and changes in the net position. Viewing the Authority's net position
helps one to evaluate the financial health and iinancial position of the Authority. Net position is the
difference between assets and deferred outflows of resources (what is owned) and liabilities and
deferred inflows of resources (what is owed).
5
The Authority's total net position increased $2,105,724. The condensed analysis below focuses on the
Authority's net position (Table 1) and changes in net position from fiscal year 2019 to fiscal year 2020.
Table 1
Net Position
FY2020 FY2019 Net Change
Net Capital Assets $ 62,839,322 $ 59,932,088 $ 2,907,234 4.85%
Restricted Assets 5,034,317 5,767,433 (733,116) (12.71%)
Current and Other Assets 7,034,423 8,455,640 (1,421,217) (16.81%)
Total assets $ 74,908,062 $ 74,155,161 $ 752,901 1.02%
Total deferred outflows $ 889,454 $ 1,216,010 $(326,556) (26.85%)
Noncurrent Liabilities
Liabilities Payable from
Restricted Assets
Current Liabilities
Total liabilities
Total deferred inflows
Net Investment in Capital Assets
Restricted for Capital Projects
Restricted for Debt Service
Restricted for Rate Stabilization
Restricted for Pension Benefits
Unrestricted Net Position
Total Net Position
$ 19,769,828 $ 21,463,413 $ (1,693,585) (7.89%)
590,071 586,370 3,701 0.63%
2,760,758 2,995,307 (234,549) ('7.83)%
$ 23,120,657 $ 25,045,090 $ (1,924,433) (7.68%)
$ 571,809 $ 326,755 $ 245,054 75.00%
$ 42,498,667
2,168,736
99,091
1,890,225
286,195
5,162,136
$ 52,105,050
0
$ 38,353,565 $ 4,145,102
2,152,317 16,419
627,806 (528,715)
2,400,940 (510,715)
- 286,195
6,464,698 (1,302,562)
$ 49,999,326 $ 2,105,724
10.81%
0.76%
(84.22%)
(21.27%)
(20.15%)
4.21 %
A comparison of the Authority's income (loss) is as follows (Table 2):
Revenue
Water System Revenue
Waste Water System Revenue
Miscellaneous Revenue
Non-Operating Revenue
Total Revenue
Expenses
Operating Expenses
Non-Operating Expenses
Total Expenses
Table 2
Revenues and Expenses
FY2020 FY2019 Net Change
$ 6,500,587 $ 6,325,675 $ 174,912 2.77%
3,856,063 3,821,544 34,519 0.90%
172,391 223,864 (51,473) (22.99%)
199,322 446,284 (246,962) (55.34%)
$ 10,728,363 $ 10,817,367 $ (89,004) �p,82��0�
$ 9,389,095 $ 9,044,398 $ 344,697 3.81%
668,593 732,856 (64,263) (8.77%)
$ 10,057,688 $ 9,777,254 $ 280,434 Z,g�o�o
Excess Revenue over Expenses
Before Capital Contributions $ 670,675 $ 1,040,113 $(369,438) (35.52%)
Capital Contributions 1,435,049 385,318 1,049,731 272.43%
Total change in net position $ 2,105,724 $ 1,425,431 $ 680,293 47.73%
Beginning Net Position 49,999,326 48,573,895 1,425,431 2.93%
Ending Net Position $ 52,105,050 $ 49,999,326 $ 2,105,724 4,21%
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At the end of fiscal year 2020, the Authority had $62,839,322 after accumulated depreciation invested
in a broad range of utility capital assets including land, ground water plant, surface water plant, water
main system, wastewater plant, lift stations, sanitary sewer system, force mains, equipment and
construction in process.
7
The Authority's total capital assets increased after accumulated depreciation from last year by
approximately $2,900,000 as reflected in the following table (Table 3):
Table 3
Changes in Capital Assets
Land and Easements
Buildings
Equipment
Distribution & Collection System
Less: Accumulated Depreciation
Construction in Process
FY2020
$ 2,743,323
1,108,764
4,142,602
94,222,095
$102,216,784
(46,536,468)
$ 55,680,316
7,159,006
$ 62,839,322
FY2019
$ 2,497,428
993,404
4,15 8, 844
93,826,246
$ 101,475,922
$ (43,995,091)
$ 57,480,831
2,451,257
$ 59,932,088
Net Chan�e
$ 245,895
115,360
(16,242)
395,849
$ 740,862
$ (2,541,377)
$ (1,800,515)
4,707,749
$ 2,907,234
The Authority plans each year for capital improvement projects. Some projects are completed within
the fiscal year, and other projects take longer than a year to complete. The surface water treatment
plant's Storage Water Tank Project listed below is the construction of a three-million-gallon water
tank at a cost of approximately $5.7 million. The Storage Water Tank and the SE 8th Ave Water
Main Replacement projects will be completed during fiscal year September 30, 2021.
Table 4 below reflects the major additions and costs incurred as of September 30, 2020.
Table 4
Capital Improvement Projects
Lakeview Estates Wastewater Facility
Pine Ridge Park Wastewater expansion
SE 8th Ave Water Main Replacement
SW Wastewater Area Septic to Sewer
SWTP Storage Water Tank Project
Other Projects
Total Ongoing CIP Projects
$ 354,589
108,290
802,297
494,229
5,156,345
243,256
$ 7,159,006
See Notes to the Financial Statements (Note 6) for additional information related to capital assets.
Debt Mana�ement
On September 30, 2020, the Authority had State Revolving Loans and notes payable outstanding in the
amount of $21,023,842. The Autharity refunded its notes payable on April 1, 2020 in the amount of
$16,390,000 reducing future interest expense by approximately $480,000. The total principal repaid in
FY2020 was $1,287,391. See Notes to the Financial Statements (Note 7) for additional information
related to State Revolving Loans and notes payable.
:
ECONOMIC FACTORS AND ASSESSMENT OF GROWTH
The Authority began operations in 1995. Since 1995, the net increase in new customer accounts has
been modest on an annual basis. In the most recent fiscal year ended September 30, 2020, capital
connection charge revenues for 53 water and 16 wastewater residential connections were received.
Florida's rural central areas do not experience the same rate of growth as both the Atlantic and Gulf
coastal areas. Given current economic environment, a modest growth in the number of connections is
anticipated to be realized from new construction on vacant sites in the existing developed sections of
the Authority's service area rather than through planned new developments.
The City of Okeechobee is approximately forty-five minutes to one hour from the Atlantic coast. The
main east and west access highways to the Atlantic coastal area are State Road 70 and State Road 710.
As such, the Okeechobee Utility Authority's service area is within a commutable range of the Atlantic
coast and its life style.
The Authority's current water treatment plants with a total treatment capacity of six million gallons per
day (6mgd) can accommodate approximately twenty-four thousand (24,000) residential water
connections, which is greater than the existing customer base of approximately nine thousand five
hundred sixty-nine (9,569) residential connections. The Authority's current wastewater treatment plant
with three million gallons per day (3mgd) of total treatment capacity can accommodate approximately
twelve thousand (12,000) additional wastewater customers, which is greater than the existing customer
base of approximately four thousand four hundred fifty-three (4,453). In the near-term projection of
five years, this available capacity is more than adequate to accommodate the projected level of
customer growth.
This MD&A report is designed to provide a general overview of the Okeechobee Utility Authority's
financial health for those interested in the Autharity's financial condition. Questions concerning the
information provided in this report or requests for additional information should be addressed to
George Gall, Finance Director, 100 SW Sth Avenue, Okeechobee, Florida, 34974-4221. An audit of the
financial statements for the Authority may be obtained at the Main Office of the Authority.
0
OKEECHOBEE UTILITY AUTHORITY
Statement of Net Position - Proprietary Fund
September 30, 2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Investments
Interest receivable
Receivables:
Grants
Accounts receivable, less allowance for
uncollectible accounts of $194,810
Inventories
Prepaid expenses
Total current assets
NONCURRENT ASSETS
Restricted assets:
Cash and cash equivalents
Investments
Net pension asset
Capital assets:
Land
Utility plants
Less accumulated depreciation
Construction in progress
Total capital assets
Total noncurrent assets
TOTAL ASSETS
DEFERRED OUTFLOWS OF RESOURCES
Pension related items
Deferred loss on bond refunding, net
TOTAL DEFERRED OUTFLOWS OF RESOURCES
10
$ 3,344,885
1, ll 0,000
8,489
786,992
1,174,106
535,740
74,2ll
7,034,423
4,358,122
390,000
286,195
2,743,323
99,473,461
102,216,784
(46,536,468)
55,680,316
7,159,006
62,839,322
67,873,639
74,908,062
206,267
683,187
889,454
LIABILITIES
CURRENT LIABILITIES
Accounts payable
Accrued expenses
Due to other governments
Bonds payable (current)
Accrued compensated absences (current)
Payable from restricted assets:
Accrued interest
Customer deposits
Total current liabilities
NONCURRENT LIABILITIES
Long-term portion of bonds payable
Long-term portion of compensated absences
Accrued OPEB payable
Unearned revenues:
Connection fees
Developer fees
Total noncurrent liabilities
TOTAL LIABILITIES
DEFERRED INFLOWS OF RESOURCES
Pension related items
NET POSITION
Net investment in capital assets
Restricted for capital projects
Restricted for debt service
Restricted for rate stabilization
Restricted far pension benefits
Unrestricted
TOTAL NET POSITION
See notes to the financial statements.
11
$ 529,423
104,277
30,787
2,028,143
76,754
4,143
585,928
3,359,455
18,995,699
179,092
50,665
71,1 ll
464,635
19,761,202
23,120,657
571,809
42,498,667
2,168,736
99,091
1,890,225
286,195
5,162,136
$ 52,105,050
OKEECHOBEE UTILITY AUTHORITY
Statement of Revenues, Expenses, and Changes in Net Position -
Proprietary Fund
For the Fiscal Year Ended September 30, 2020
OPERATING REVENUE
Water system charges for services
Wastewater system charges for services
Penalties and late charges
Miscellaneous
Total operating revenues
OPERATING EXPENSES
Water services
Wastewater services
Maintenance
Meter reader
Administrative and general
Depreciation and amortization
Total operating expenses
OPERATING INCOME
NONOPERATING REVENUES (EXPENSES)
Interest revenue
Interest expense
Debt issuance costs
Operating grants
Total nonoperating revenues (expenses)
INCOME BEFORE CAPITAL CONTRIBUTIONS
CAPITAL CONTRIBUTIONS
Capital grants
Water capital connection fees
Wastewater capital connection fees
Developer contributions for capital projects
Total capital contributions
INCREASE IN NET POSITION
NET POSITION, BEGINNING OF PERIOD
NET POSITION, END OF PERIOD
See notes to the financial statements.
12
$ 6,500,587
3,856,063
82,542
89, 849
10,529,041
1,368,926
1,007,380
1,972,099
214,529
2,079,687
2,746,474
9,389,095
1,139,946
157,694
(613,093)
(55,500)
41,628
(469,271)
670,675
1,113,337
22,321
74,961
224,430
1,435,049
2,105,724
49,999,326
$ 52,105,050
OKEECHOBEE UTILITY AUTHORITY
Statement of Cash Flows - Proprietary Fund
For the Fiscal Year Ended September 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers
Payments to employees
Payments for employee beneiits
Net cash provided (used) by operating activities
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition and construction of capital assets
Note and loan principal payments
Note and loan interest paid
Note issuance costs and prepayment penalty on refunding
Note Proceeds
Capital connection fees received
Captial grants
Net cash (used) by capital and related financing activities
CASH FLOWS FROM 1NVESTING ACTIVITIES
Purchase of investments
Proceeds from investments
Interest on investments
Net cash provided by investing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
See notes to the financial statements.
13
$ 10,553,928
(3,694,656)
(2,527,539)
(941,133)
3,390,600
(5,318,609)
(17,677,391)
(482,065)
(137,450)
16,390,000
145,483
752,460
(6,327,572)
(1,500,000)
3,330,935
174,175
2,005,110
(931,862)
: • � :�•
$ 7,703,007
OKEECHOBEE UTILITY AUTHORITY
Statement of Cash Flows - Proprietary Fund (continued)
For the Fiscal Year Ended September 30, 2020
CASH AND CASH EQUIVALENTS CLASSIFIED AS:
Current assets
Restricted assets
Total
ADJUSTMENTS TO RECONCILE OPERATING INCOME
TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating Income
Adjustments to reconcile operating income to
net cash provided by operating activities:
Change in net pension liability and related deferred amount;
Operating grants
Depreciation and amortization
Change in assets and liabilities:
(Increase) decrease in accounts receivable
(Inoreaae) dacreaae in invantory
(Increase) decrease in prepaid expenses
Increase (decrease) in accounts payable
Increase (decrease) in accrued liabilities
Increase (decrease) in compensated absences
Increasa (deoreaee) in OPEB
Increase (decrease) in deposits
Increase (decrease) in due to other governments
Total adjustments
Net cash provided (used) by operating activities
Noncash investing, capital and financing activities
Developer contributions of lines and equipment
See notes to the financia] statements.
14
$ 3,344,885
4,358,122
$ 7,703,007
$ 1,139,946
(38,390)
757
2,746,474
19,983
�Z���
(64,978)
(394,791)
17,271
(16,668)
(20,694)
4,147
219
2,250,654
$ 3,390,600
$ 181,436
OKEECHOBEE UTILITY AUTHORITY
Statement of Fiduciary Net Position
Pension Trust Fund
September 30, 2020
ASSETS
Cash and cash equivalents
Contributions receivable
Employee
Employer
Investments: (at fair value)
Mutual funds- fixed income
Mutial funds - international equity
Mutial funds - domestic equity
Total investments
TOTAL ASSETS
LIABILITIES
Accounts payable
Due to brokers
TOTAL LIABILITIES
FIDUCIARY NET POSITION - RESTRICTED FOR PENSION BENEFIT�
See notes to the financial statements.
15
$ 173,684
10,045
23,774
3,458,015
923,851
5,594,002
9,975,868
10,183,371
7,137
33,819
40,956
$ 10,142,415
OKEECHOBEE UTILITY AUTHORITY
Statement of Changes in Fiduciary Net Position
Pension Trust Fund
For the Fiscal Year Ended September 30, 2020
ADDITIONS
Contributions
Employer
Plan members
Total contributions
Investment income
Net appreciation in fair value of investments
Interest and dividends
Less: investment expenses
Net investment income
TOTAL ADDITIONS
DEDUCTIONS
Benefits paid to participants
Refunds due on terminations
Administrative expenses
TOTAL DEDUCTIONS
NET 1NCREASE
$ 317,039
133,961
451,000
846,594
240,729
1,087,323
(20,250)
1,067,073
1,518,073
307,190
21,411
52,827
381,428
1,136,645
FIDUCIARY NET POSITION - RESTRICTED FOR PENSION BENEFITS
Beginning of year 9,005,770
End of year $ 10,142,415
See notes to the financial statements.
16
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Okeechobee Utility Authority (the "Authority") have been
prepared in conformity with U.S. generally accepted accounting principles (GAAP) as applied to
governmental units. The Governmental Accounting Standards Board (GASB) is the accepted
standard setting body for establishing governmental accounting and financial reporting
principles. The Autharity's significant accounting policies are described below.
Reporting Entity
The Okeechobee Utility Authority is an independent special district created pursuant to an
Interlocal Agreement (the "Agreement"), dated November 10, 1994, between the City of
Okeechobee (the "City") and the County of Okeechobee (the "County") in accordance with the
provisions of Chapters 163 and 189, Florida Statutes.
As required by generally accepted accounting principles, these financial statements include the
Authority (the primary government) and its component units. Component units are legally
separate entities for which the Authority is financially accountable. The Authority is financially
accountable i£
a) the Authority appoints a voting majority of the organization's governing board and
(1) the Authority is able to impose its will on the organization or (2) there is a potential
for the organization to provide specific financial benefits to or impose specific financial
burdens on the Authority, or
b) the organization is fiscally dependent on the Authority and (1) there is a potential for the
organization to provide specific financial benefits to the Authority or (2) impose specific
financial burdens on the Authority.
Organizations for which the Authority is not financially accountable are also included when
doing so is necessary in order to prevent the Authority's financial statements from being
misleading.
Based upon application of the above criteria, the Authority has determined that there is one
legally separate entity to consider as a component unit. The Okeechobee Utility Authority
Employees' Retirement System is a component unit as it is fiscally dependent on and imposes a
specific financial burden on the Authority. It is reported in the Authority's iinancial statements
as a Fiduciary Fund, the Employees' Pension Trust Fund.
17
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Reporting Entity (Continued)
The Authority was created in order to regionalize the water and wastewater services being
provided to the residents and customers within the service area of the utility system and to assist
in addressing environmental issues concerning the quality and supply of water for Lake
Okeechobee and South Florida. The Authority has broad powers with respect to the operation
and maintenance of the utility system.
The Authority services both residential and commercial customers and its service area includes
the City and County of Okeechobee and extends into part of the unincorporated section of
Glades County.
The Autharity began operations on September 28, 1995 and is governed by a Board of Directors
comprised of five (5) members and three (3) alternates. The Board of Directors has financial
accountability and control over all activities relating to the operations of the Authority.
Basis of Presentation
The Authority is accounted for as a proprietary type enterprise fund. Enterprise funds are used to
account for activities that are financed and operated in a manner similar to private business
enterprises. Enterprise funds are used in the following situations: 1) the activity is financed with
debt that is secured solely by a pledge of the net revenues from fees and charges of the activity;
2) laws or regulations require that all costs of providing services, including capital costs, be
recovered from fees and charges; or 3) fees and charges are designed to recover the costs of the
activity, including capital costs.
Measurement Focus and Basis of Accountin�
These financial statements are prepared using the economic resources measurement focus and
the accrual basis of accounting in accordance with U.S. generally accepted accounting principles.
Under the accrual basis of accounting, revenues are recognized when earned; expenses are
recognized when incurred. The assets, deferred outflows, liabilities, deferred inflows, and net
position of the Authority are reported in a self-balancing set of accounts, which include restricted
and unrestricted resources, representing funds available for support of the Authority's operations.
The Employees' Pension Trust Funds also uses the accrual basis of accounting and the economic
resources measurement focus.
:
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Operating Revenues and Expenses
Proprietary funds distinguish operating revenues and expenses from non-operating items. The
Authority's operating revenues and expenses consist of revenues earned and expenses incurred
relating to the operation and maintenance of its system, including administrative expenses and
depreciation of capital assets. All other revenues and expenses not meeting the definition above
are reported as non-operating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the Authority's policy
to use restricted resources first, then unrestricted resources as they are needed.
Bud�et Process
Pursuant to the interlocal agreement, the Authority is required to adopt a budget and provide a
copy to the City of Okeechobee and the Okeechobee County Board of County Commissioners.
The Authority adopted its final budget relating to the fiscal year ended September 30, 2020 on
September 9, 2019.
Deposits and Investments
Cash and cash equivalents include amounts on deposit in demand accounts, money market
accounts, and money market mutual funds. For the purposes of the statement of cash flows, the
Authority considers all highly liquid investments and certificates of deposit with an original
maturity of three months or less when purchased to be cash equivalents.
Investments are reported at fair value as required by generally accepted accounting principles.
The fair value of an investment is the amount that the Authority could reasonably expect to
receive for it in a current sale between a willing buyer and a willing seller, other than in a forced
or liquidation sale. The Autharity categorizes its investments according to the fair value
hierarchy established by GASB Statement No. 72. The hierarchy is based on observable and
unobservable inputs used in establishing the fair value of a financial asset or liability. Purchases
and sales of investments are recorded on the trade date.
19
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Accounts Receivable
Accounts receivable consist of both billed and unbilled receivables. Unbilled receivables
represent the estimated amount of accounts receivable for services that have not been billed as of
the statement of financial position date. The amounts are a result of a timing difference between
the Authority's fiscal year end and the date the various utility cycles are subsequently billed.
Inventories
Inventories are recorded at cost using the first-in, first-out method.
Utilitv Plant
Property, plant, and equipment are stated at cost for items constructed or purchased. Donated
capital assets, donated works of art and similar items, and capital assets received in a service
concession arrangement are recorded at acquisition value.
Depreciation of exhaustible utility �xed assets, including those acquired through
intergovernmental grants externally restricted to capital acquisition, is charged as an expense
against operations. Depreciation of the various assets is computed over the assets' estimated
useful lives using the straight-line method. The estimated useful lives range as follows:
Distribution and collection plants
Buildings
Equipment
Unearned Revenues
10-60 years
15-25 years
3-10 years
Unearned revenues primarily represent water and wastewater capital connection and inspection
fees and service payments that are paid in advance by customers. These fees will be recognized
as income in subsequent years as the services are performed.
20
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Deferred Outflow of Resources
In addition to assets, the Statement of Net Position reports a separate section for Deferred
Outflows of Resources. Deferred Outflows of Resources represent the usage of net position
applicable to future periods and will not be recognized as an eXpense until the future period to
which it applies. The Authority has two items that qualify for reporting in this category. The first
is the deferred amount on bond refunding. The deferred loss on current and advance refunding of
bonds is being charged to operations through the year 2030 based on the effective interest
method. The second is deferred pension items in connection with its pension plan. These
deferred pension charges are either (a) recognized in the subsequent period as a reduction of the
net pension liability or (b) amortized in a systematic and rational method as pension expense in
future periods.
Deferred Inflows of Resources
In addition to liabilities, the Statement of Net Position reports a separate section for Deferred
Inflows of Resources. Deferred Inflows of Resources represent the acquisition of net position
applicable to future periods and will not be recognized as revenue until the future period to
which it applies. The Authority currently reports deferred pension items in connection with its
pension plan. These deferred pension charges are either (a) recognized in the subsequent period
as a reduction of the net pension liability or (b) amortized in a systematic and rational method as
pension expense in future periods.
Compensated Absences
The Authority's policy is to allow each employee eligible for vacation leave to accumulate up to
thirty (30) days. Employees are paid unused vacation leave at current hourly rates upon
retirement or at termination. Employees of the Authority, with ten (10) years or more of
continuous service, receive payment for unused sick leave at a rate of fifty percent (50%) of
current hourly rates upon retirement or at termination. This also applies to employees at normal
retirement, regardless of length of service.
Accrued liabilities, based on hourly salary rates at September 30, 2020, are reflected in the
accounts of the Authority for vested (not contingent on an employee's future services) vacation
and sick leave benefits.
21
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Net Position
Net position is the result of assets and deferred outflows of resources less liabilities and deferred
inflows of resources. Net position is classified in three components:
Net investment in capital assets
This category consists of the Authority's capital assets net of accumulated depreciation and
reduced by the outstanding balances of any bonds or notes that are attributable to the acquisition,
construction, or improvements of those assets.
Restricted
This category of the net position consists of constraints placed on the net position by external
constraints imposed by creditors (such as through debt covenants), grantors, contributors or laws
or regulations of other governments or constraints imposed by law through constitutional
provisions or enabling legislation.
Un�estricted
This category represents all other Authority net position that do not meet the definition of net
investment in capital assets, restricted for capital projects, or restricted for debt service as defined
earlier.
se of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting
principles requires management to make estimates and assumptions. This will affect the reported
amounts of assets, deferred inflows and outflows, and liabilities, disclosure of contingent assets
and liabilities at the date of the iinancial statements, and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these estimates.
22
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 2— DEPOSITS AND INVESTMENTS
Authority Deposits
As of September 30, 2020, the carrying amount of the Authority's book balance for deposits in
"Qualified Public Depositories" was $8,088,505 and the bank balance was $7,700,257. The
Authority also had $2,750 in petty cash for a total carrying amount of $7,703,007.
In addition to insurance provided by the Federal Depository Insurance Corporation, deposits are
held in banking institutions approved by the State Treasurer of the State of Florida to hold public
funds. Under Florida Statutes Chapter 280, Florida Security for Public Deposits Act, the State
Treasurer requires all Florida qualified public depositories to deposit with the Treasurer or
banking institution eligible collateral. In the event of failure of a qualified public depository, the
remaining public depositories would be responsible for covering any resulting losses. The
Authority's deposits at year end are considered insured for custodial credit risk purposes.
Authority Investments
The Authority categorizes its investments according to the fair value hierarchy established
GASB Statement No. 72, Fai� Value Measu�ement and Application. The hierarchy is based on
valuation inputs used to measure the fair value of the asset as follows: Level 1 inputs are quoted
prices in active markets for identical assets; Level 2 inputs are significant other observable inputs
to include quoted prices for similar assets in active and non-active markets; Level 3 inputs are
significant unobservable inputs.
The Authority's investment policy authorizes investments in money market and savings
accounts, certificates of deposits, money market funds, bonds, notes, bills or other obligations of
the U.S. Government, repurchase agreements, securities issued or guaranteed by certain federal
agencies and instrumentalities, Local Government Surplus Trust Fund or any intergovernmental
investment fund authorized pursuant to the Florida Interlocal Cooperation Act, commercial
paper, securities issued by the Authority, any guaranteed investment contract within the
limitations established by Florida Statutes, and any other investment vehicle authorized by
Florida law and determined by the investment officer and the Board of Directors to be a prudent
investment.
23
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 2— DEPOSITS AND INVESTMENTS (Continued)
Authoritv Investments (Continued)
The Authority had the following investments as of September 30, 2020:
S&P
Maturity (Da� Ratin� Fair Value
US Treasury Notes 15 AA+ $ 500,000
US Treasury Notes 76 AA+ 1,000,000
The U.S. Treasury Notes are categorized as Level 1 of the fair value hierarchy.
Credit Risk
Credit risk is the risk that an issuer or other counter party to an investment will not fulfill its
obligations. The Autharity's investment policies limit its investments to high quality investments
to control credit risk.
Interest Rate Risk
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an
investment. The Authority does not have a formal investment policy that limits investment
maturities as a means of managing exposure to fair value losses arising from increasing interest
rates.
Cash and cash equivalents and investments were comprised of the following as of September 30,
2020:
Cash on hand
Deposits held by public depositories
US Treasury Notes
Total cash and cash equivalents and investments
24
$ 2,750
7,700,257
1,500,000
9.203.007
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 2— DEPOSITS AND INVESTMENTS (Continued)
Authoritv Investments (Continued)
Cash and cash equivalents and investments are presented in the balance sheet as of September
30, 2020, as follows:
Current cash and cash equivalents
Current investments
Restricted cash and cash equivalents
Restricted investments
Total cash and cash equivalents and investments
General Employees' Pension Trust Fund
$ 3,344,885
1,110,000
4,358,122
390,000
9.203.007
Salem Trust Company periodically holds uninvested cash in its capacity as custodian for the
Plan. These funds exist temporarily as cash in the process of collection from the sale of securities
and for the payments of benefits and expenses. The pension plan's policy for the allocation of
invested assets is established by the Plan's Board of Trustees which pursues an investment
strategy that reduces risk through a prudent diversification of the portfolio across a selection of
distinct asset classes. The policy discourages the use of cash equivalents, except for liquidity
purposes and refrains from shifting asset class allocations over short time spans. Investment
management fees are calculated quarterly as a percentage of the fair market value of the Plan's
assets managed, where applicable. The plan uses mutual funds as the investment vehicle for
fixed income, international equity and additional domestic equity investments for further
diversification. These investments are recommended and monitored by the investment monitor.
The plan follows the investment guidelines as established within the ordinance and Florida
Statute 112.661. The Pension Trust Fund is authorized to invest in the local government surplus
funds trust fund, obligations of the U.S. Government or agencies thereof, banking institution
within the state and other such institutions within the guidelines of the state statutes which are
insured by the Federal Deposit Insurance Corporation, investment agreements, direct and general
long-term obligations of any state with proper credit rating and full faith and credit pledge,
municipal obligations with proper credit rating, annuity and life insurance contracts, bonds
issued by the State of Israel, foreign stocks or bonds, and stocks, bonds, and commingled funds
administered by National or State banks or evidences that the corporation is listed on a nationally
recognized exchange and holds proper credit ratings as set forth by a major credit rating service.
These equity investments are not to exceed 60% of the assets of the fund on a cost basis or 70%
of the market value of plan assets. Foreign investments are not to exceed 25% of the market
value of the assets. Temporary investment funds held by the custodian in a money market fund
are classified as cash equivalents within the investment account.
25
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 2— DEPOSITS AND INVESTMENTS (Continued)
General Emplovees' Pension Trust Fund (Continued)
The Plan carried no particular security investment that individually represented 5% or more of
the Plan's net assets available for benefits as of September 30, 2020.
Investments not evidenced by securities that exist in physical ar book-entry form include
investments in mutual funds, domestic investment funds or a commingled pooled trust fund.
The Plan's independently managed investments are segregated into a separate account. The
investment manager is monitored by the Board of Trustees and an investment performance
monitor.
The Plan has no instrument that, in whole or in part, is accounted for as a derivative instrument
under GASB statement No. 53, Accounting and Financial Reporting for Derivative Instruments
during the current year.
The Plan invests in mortgage-backed securities representing interests in pools of mortgage loans
as part of its interest rate risk management strategy. The mortgage-backed securities are not used
to leverage investments in fixed income portfolios. The mortgage-backed securities held by the
Plan are guaranteed by federally sponsored agencies such as the Government National Mortgage
Association. These investments are inside of the fixed income open-end mutual fund that the
plan holds.
The Plan invests in a variety of investment vehicles. Investments in general are exposed to
various risks, such as interest rate, credit, and overall volatility risk. Due to the level of risk
associated with certain investments, it is reasonably possible that changes in the values of
investments will occur in the near term and such changes could materially affect the amounts
reported in the statement of fiduciary net position.
For a more detailed and comprehensive list of available investments, the Investment Policy
Statement, as approved by the Board of Trustees, should be referenced. The gain or loss on
financial instruments is recognized in the changes in net position as part of investment income.
26
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 2— DEPOSITS AND INVESTMENTS (Continued)
General Emulovees' Pension Trust Fund (Continued)
The following is a list of the Plan's investments by categories of risk as of September 30, 2020:
2020
Historical
Cost
Money Market Mutual Funds $ 173,684
Mutual Funds — Domestic Equity 3,263,501
Mutual Funds — International Equity 770,082
Mutual Funds - Fixed Income 3.706.647
Fair
Value
$ 173,684
3,458,015
923,851
5.594.002
$ 7,913,914 $ 10,149,552
The money market mutual funds consist of investments with financial institutions in open end,
institutional, money market funds complying with Securities and Exchange Commission (SEC)
Rule 2a7. Rule 2a7 allows SEC registered mutual funds to use amortized cost rather than fair
value to report net assets used to compute share prices if certain conditions are met. Those
conditions include restrictions on the types of investments held, restrictions on the term-to-
maturity of individual investments and the dollar-weighted average of the portfolio, requirements
for portfolio diversification, and requirements for divestiture considerations in the event of
security downgrades and defaults, and required actions if the fair value of the portfolio deviates
from amortized cost by a specified amount. Money market mutual funds are exempt from the
GASB 72 fair value hierarchy disclosures and are recorded as cash and cash equivalents on the
Statement of Fiduciary Net Position.
Investment Measurement at Fair T�alue
The Plan categorizes its investments according to the fair value hierarchy established GASB
Statement No. 72, Fair I�alue Measurement and Application. The hierarchy is based on valuation
inputs used to measure the fair value of the asset as follows: Level 1 inputs are quoted prices in
active markets for identical assets; Level 2 inputs are significant other observable inputs to
include quoted prices for similar assets in active and non-active markets; Level 3 inputs are
significant unobservable inputs.
27
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 2— DEPOSITS AND INVESTMENTS (Continued)
Emplovees' Pension Trust Fund (Continued)
Investment Measurement at Fai� T�alue (Continued)
Net asset value (NAV) is a common measurement of fair value for Level 1, Level 2, and Level 3
investments. A fund's NAV is simply its assets less its liabilities and is often reported as a per
share amount for fair value measurement purposes. Level 1 investment in funds such as mutual
funds report at a daily NAV per share and are actively traded. NAV is also used to value Level 2
and 3 investments. As a matter of convenience (or referred to in accounting literature as a"practical
expedient"), a Plan can use the NAV per share for investments in a nongovernmental entity that
does not have a readily determined fair value, such as an alternative investment. Investments
measured at NAV as a practical expedient would be excluded from the fair value hierarchy
because the valuation is not based on actual market inputs but rather is quantified using the
fund's reported NAV as a matter of convenience.
The Plan categorizes its fair value measurement within the fair value hierarchy established by
generally accepted accounting principles. The Plan has the following fair value measurements as
of September 30, 2020:
Investments by fair value level
Mutual Funds — Domestic Equity
Mutual Funds — International Equity
Mutual Funds - Fixed Income
Fair Value Measurement
Balance Levell Leve12 Leve13
$ 5,594,002 $ 5,594,002 $
923,851 923,851
3,458,015 3,458,015
$ 9,975,868 $ 6,517,853 $ 3,458,015
W
i�
Mutual funds - The rationale for inclusion in Level 1 or Leve12 points to the unobservable inputs
involved in mutual fund pricing. Mutual funds do not trade using bid and ask, as with ETF's or
common stock. Instead, the prices are determined by the net asset value of the underlying
investments at the close of business for the next day's open. The underlying assets themselves
may include a variety of Level 1 and Level 2 securities and some may be valued using matrix
pricing which interpolates the price of a security based on the price of similar securities.
:
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 2— DEPOSITS AND INVESTMENTS (Continued)
Emplovees' Pension Trust Fund (Continued)
Investment Measurement at Fair T�alue (Continued)
Credit risk — Credit risk is the risk that an issuer or other counter party to an investment will not
fulfill its obligations. Credit risk does not apply to the Plan's investments at this time.
Interest rate risk — Interest rate risk is the risk that changes in interest rates will adversely affect
the fair value of an investment. Generally, the longer the time to maturity, the greater the
exposure to interest rate risks.
At September 30, 2020, the fixed income mutual fund was invested in high quality bonds and other
fixed income securities including U.S. Government obligations, mortgage and asset-backed
securities, corporate and municipal bonds, collateralized mortgage obligations, short-term
instruments, and the other investments A rated by Standard & Poor's, Moody's Investor Services or
Fitch. To a lesser extent the fund may also invest in fixed income securities rated Baa or lower.
This fund had an effective duration of 4.8 years of September 30, 2020.
Concentrations of credit risk — Concentration of credit risk is defined as the risk of loss attributed
to the magnitude of an investment in a single user. Not more than five (5) percent of the Plan's
assets shall be invested in the common stock or capital stock of any one issuing company.
Investing in Foreign Markets — Investing in foreign markets may involve special risks and
considerations not typically associated with investing in companies in the United States of
America. These risks include revaluation of currencies, high rates of inflation, repatriation
restrictions on income and capital, and future adverse political, social, and economic
developments. Moreover, securities of foreign governments may be less liquid, subject to
delayed settlements, taxation on realized ar unrealized gains, and their prices are more volatile
than those of comparable securities in U.S. companies.
NOTE 3 — INVENTORY
Inventary was comprised of the following at September 30, 2020:
Chemicals
Parts and supplies
Total inventory
29
$ 17,380
518,360
$ 535,740
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 4 — RESTRICTED ASSETS
Restricted assets consist of the following accounts as of September 30, 2020:
Renewal, replacement & improvement
Capital connection water
Capital connection wastewater and treatment plant
Fire hydrant
Total restricted for capital projects
Debt service
Rate stabilization
Customer deposits
Total restricted assets
NOTE 5— UNRESTRICTED NET POSITION
$ 521,440
480,424
960,353
206,519
2,168,736
103,233
1,890,225
585,928
4.748.122
Unrestricted net position consists of the following as of September 30, 2020:
Designated:
Capital improvement project
Operating reserve
Emergency funding
Total designated
Undesignated
Total unrestricted net position
30
$ 383,677
1,899,567
631,300
2,914,544
2,247,592
5.162,136
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 6 — CAPITAL ASSETS
Capital assets are summarized as follows.
Ca�ital assets, not
being depreciated
Land
Construction in progress
Total capital assets
not being depreciated
Ca�ital assets being de�reciated
Buildings
Equipment
Distribution and
collection plant
Total capital assets
being depreciated
Less accumulated
depreciation for
Buildings
Equipment
Distribution and
collection Plant
Total accumulated
depreciation
Total capital assets being
depreciated, net
Total capital assets, net
Beginning Ending
Balance Additions Deletions Balance
$ 2,497,428 $ 252,195 $ (6,300) $ 2,743,323
2,451,257 5,003,565 (295,816) 7,159,006
4,948,685 5,255,760 (302,116) 9,902,329
993,404 115,360
4,158,844 35,191
93,826,246 395,849
1,108,764
(51,433) 4,142,602
94,222,095
98,978,494 546,400 (51,433� 99,473,461
(s�9,o22� �36,6s2�
�s,24s,�o7� ��gs,6n�
(40,167,368) �2,372,487�
51,433
(615,674)
(3,3 80,939)
(42,539,855)
�43,995,091) (2,592,810) 51,433 �46,536,468)
54,983,403 (2,046,410�
52,936,993
59,932,088 $ 3,209.350 (302,1161 62,839,322
31
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 7 — LONG-TERM LIABILITIES
Loans Payable from Direct Borrowings and Direct Placements
Pled�ed Revenues
All rates, fees, charges, or other income, received by the Authority excluding (1) Pledged Capital
Connection Charges, (2) Unpledged Capital Connection Charges, (3) Special Assessments, (4)
capital contributions, and (5) earnings and investment income derived from moneys described in
clauses (1) through (3) are pledged for the payment of the Capital Improvement Refunding
Revenue Notes, Series 2020 and the Loan Agreement WW615100.
Current Refundin�
The Utility System Capital Improvement Refunding Revenue Note, Series 2020A was issued to
current refund the Capital Improvement Refunding Revenue Note, Series 2017A. The
reacquisition price exceeded the net carrying amount of the old debt by $213,617. This amount is
reported as a deferred outflow of resources in the statement of net position and amortized over
the remaining life of the refunded debt, which is equal to the life of the new debt issued. The
debt service requirements on the new debt are $35,509 less than the debt service requirements on
the retired debt. The economic gain on the current refunding transaction was $60,157. The
Series 2017A bonds were called and paid in full April 1, 2020.
The Utility System Capital Improvement Refunding Revenue Note, Series 2020B was issued to
current refund the Capital Improvement Refunding Revenue Note, Series 20170B. The
reacquisition price exceeded the net carrying amount of the old debt by $539,267. This amount is
reported as a deferred outflow of resources in the statement of net position and amortized over
the remaining life of the refunded debt, which is equal to the life of the new debt issued. The
debt service requirements on the new debt are $449,185 less than the debt service requirements
on the retired debt. The economic gain on the current refunding transaction was $420,558. The
Series 2017B bonds were called and paid in full April 1, 2020.
Capital Improvement Refunding Revenue Notes, Series 2020
On April 1, 2020, the Authority issued $16,390,000 Capital Improvement Refunding Revenue
Notes, Series 2020 with Truist Bank (the Seniar Debt). The notes were issued to provide funds
to refund the Capital Improvement Refunding Revenue Note, Series 2017.
32
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 7 — LONG-TERM LIABILITIES (Continued)
Loans Payable from Direct Borrowings and Direct Placements (Continued)
Capital Improvement Refunding Revenue Notes, Series 2020 (Continued)
The Series 2020 Notes are comprised of $7,340,000 Series 2020A and $9,050,000 Series 2020B
as follows:
Original Face
Series Amount
2020A $7,340,000
2020B 9,050,000
Interest Rate
1.79%
2.05%
Mandatory
Redemption
Be _i� nning October 1
2020
2020
Maturity
October 1, 2025
October 1, 2030
Principal and interest is to be paid semiannually on each April 1 and October 1, through October
1, 2030. As of September 30, 2020, the balance due on Series 2020A and 2020B is $6,703,000
and $8,975,000, respectively.
The Authority is to maintain a Debt Service Account that is funded monthly to fund semi-annual
Debt Service Payments, and maintain a Renewal Replacement and Improvement Account of 5%
of Gross Revenues of the preceding fiscal year. In the event of default in the payment of interest
or principal of any of the bonds or any other event of default and such default shall continue far a
period of sixty days, any Holder shall be entitled to the appointment of a receiver to manage the
System in an appropriate judicial proceeding.
Loan A�reement WW615100
The Autharity was approved for a construction loan of $10,000,000, with an interest rate of
1.86%, by the Florida Department of Environmental Protection (the Department) under the State
Revolving Fund Loan Program (The Junior Debt). The amount outstanding as of September 30,
2020, was $5,345,842. According to the loan agreement, 40 semi-annual payments of principal
and interest commence on September 15, 2009, in the amount of $341,431. This loan is junior,
inferior, and subordinate in all regards in right of payment and security to the Capital
Improvement Refunding Revenue Note, Series 2020A and Capital Improvement Refunding
Revenue Note, Series 2020B.
The Authority is to 1) establish rates and collect fees to provide Net Revenues of at least 1.15
times the Annual Debt Service Requirement for the Notes, 2) maintain a Debt Service Account
that is funded monthly to fund semi-annual Debt Service Payments, and 3) satisfy the debt
service coverage requirements of the Senior Debt. Any amount due and not paid when due shall
bear interest rate at a default rate equal to 3.86%.
33
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 7 — LONG-TERM LIABILITIES (Continued)
Loans Payable from Direct Borrowings and Direct Placements (Continued)
Upon any event of default and subject to the rights of others having prior liens on the Pledged
Revenues the Department may (1) apply to a court of competent jurisdiction, cause to appoint a
receiver to manage the System, or (2) may accelerating the repayment schedule or increase the
interest rate on the unpaid principal of the loan.
Debt service requirements to amortize long term debt at September 30, 2020 are as follows:
Year Ended
2021
2022
2023
2024
2025
2025-2030
Principal Interest Total
$ 2,028,143 $ 394,168 $ 2,422,311
2,073,096 356,854 2,429,950
2,113,253 318,753 2,432,006
2,153,619 279,859 2,433,478
2,212,198 240,170 2,452,368
10,443,533 554,654 10,998,187
$ 21,023,842 $ 2,144,458 $ 23,168,300
Chan�es in Lon�-Term Liabilities
A summary of changes in long-term liabilities is as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One year
Notes payable $22,311,233 $ 16,390,000 $ (17,677,391) $21,023,842 $ 2,028,143
Compensated absences 272,513 145,804 (162,472) 255,845 76,754
Net pension liability (1) 274,282 (274,282)
OPEB liability 71,359 (20,694) 50,665
Total long-term
liabilities $22,929,387 $ 16,535,804 $ (18,134,839) $21,330,352 $ 2,104,897
(1) At September 30, 2020, the Authoriry had a net pension asset of $286,195.
Interest Ex�ense
Interest expense for the year ended September 30, 2020 was $613,093, which consisted of
$131,474 amortization of deferred costs from the issuance of bonds in prior years and interest costs
incurred of $481,619. Total interest paid during the year was $482,065.
34
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 8— EMPLOYEE RETIREMENT SYSTEM
General Information
The Employees' Retirement System of the Okeechobee Utility Authority (the System) is a
single-employer, defined benefit contributory pension trust established by the Authority in
Resolution 2016-03 for the benefit of the Authority employees. The System is under the
supervision of a five-member local independent board of trustees, two of whom shall be a legal
resident within the Authority's jurisdictional boundaries, who shall be appointed by the
Okeechobee Utility Authority Board; two of whom shall be Employee Members employed by
the Authority and elected by Member employees; and one of whom shall be the Executive
Director of the Authority or his designee. Any changes to the plan requires approval by the
Board of the Authority.
The System issues a publicly available financial report that includes financial statements, ten-
year historical trend information, and other required supplementary information. That report
may be obtained by writing to the attention of Janet McKinley, Okeechobee Utility Authority,
100 SW. Sth Avenue, Okeechobee, FL 34974-4221.
Basis of Accountin�
The retirement system is reported on the accrual basis of accounting. Plan members
contributions are recognized as revenues in the period that the contributions are due. Employer
contributions are recognized when due and the employer has made a formal commitment to
provide the contributions. Beneiits and refunds are recognized when due and payable in
accordance with the terms the plan. The plan's fiduciary net position has been determined on the
same basis used by the pension plan. Investments are reported at fair value
Plan Description
The pension plan provides retirement, death and disability benefits for its participants. Each
person employed by the Authority as a full-time employee becomes a member of the Plan as a
condition of their employment except that the Executive Director of the Utility Authority, may
opt out of the Plan within 60 days of employment. All employees are eligible to participate on
the date of employment following attainment of age 18. Participation is mandatory. Normal
retirement is provided for at age 65 and 5 years of service, or at 30 years of service regardless of
age. The benefit is calculated at 2.1% of average monthly earnings times years of continuous
service with the employer. Benefits are payable by monthly annuity for 10 years certain and life
thereafter with other options available. Early retirement is provided for at age 55 and 10 years of
participation. Death and disability benefits are also available through the plans. The early
retirement reduction factor is 2% per year.
35
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 8— EMPLOYEE RETIREMENT SYSTEM (Continued)
Plan Description (Continued)
Upon termination of employment, with less than 5 years of service, the plan refunds accumulated
employee contributions. After 5 years of service, the pension benefit is accrued to date of
termination and payable at normal retirement age if employee contributions are left in the fund.
The Plan contains a deferred retirement option plan (DROP) whereupon the employee could
retire from the pension plan but continue employment with the Utility Authority for an additional
maximum period of up to five years. The retirement beneiit is immediately calculated and the
monthly beneiit is allocated to the DROP account. An election is made to either earn interest at
the rate of 6.5% per annum or credited or debited with an investment return or loss
approximating the other assets in the fund. Once a participant elects this option, he is no longer
eligible far disability or pre-retirement benefits. The Plan's guidelines for the DROP are
designed to adhere to IRS regulations. Additional information about the DROP can be obtained
from the ordinance.
The Plan is administered by its Board of Trustees. Any changes to benefit provisions requires
approval by the Board of the Authority.
Members of the plan consisted of the following at September 30, 2020:
Retired Plan Members or Beneficiaries
currently receiving benefits 21
Inactive Plan Members entitled to but
not yet receiving benefits 4
Drop Participants -
Active Plan Members 50
Total 75
Contributions
Contributions are made in accordance with applicable Florida Statutes and meeting the
actuarially determined contribution requirements as based on the benefit structure established
within the Plan as approved by the plan sponsor. The employer is required to contribute an
amount equal to the difference between the normal cost, as calculated for the plan year from the
applicable actuarial valuation, less the member contributions for the current year. The Authority
is required to fund the plan according to any contribution deficit as determined by actuarial
valuation for the plan beyond the contributions by employees and the regular employer
contributions by the Okeechobee Utility Authority. After applying the allocable prepaid
contribution from the beginning of the year, the employer contribution was sufficient to meet the
required annual contribution, prepaid employer contributions.
36
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 8— EMPLOYEE RETIREMENT SYSTEM (Continued)
Contributions (Continued)
The Utility Authority was to fund the pension plan at the rate of 14.20% of covered payroll for
plan participants based on the 2018 actuarial valuation. Employee contributions are at the rate of
6% of payroll.
The significant actuarial assumptions used to compute the actuarially determined contribution
requirement are the same as those used to compute the pension benefit obligation. The funding
policy for the Plan is to make an actuarially determined pension contribution in an amount, such
that when combined with the participants' contributions, all participants' benefits will be fully
provided for by the time they attain retirement age.
Investments Concentrations. The plan did not hold investments in any one organization that
represents 5 percent or more of the Pension Plan's fiduciary net position.
Actuarial Assumptions
The total pension liability was determined by an actuarial valuation as of October 1, 2019
updated to September 30, 2020 using the following actuarial assumptions.
Inflation 2.5 %
Salary increases 6.00%, average, including inflation
Investment rate of return 7.00%, net of pension plan investment expense, including
inflation
Retirement Age 100% when first eligible for normal retirement or DROP entry
Mortality RP 2000 Combined Healthy Participant Mortality Table (for pre-
retirement mortality) and the RP-2000 Mortality Table for Annuitants
(for post-retirement mortality), with mortality improvements
projected to all future years using Scale BB. For males, the base
mortality rates include a 50% blue collar adjustment and a 50% white
collar adjustment. For females, the base mortality rates include a
100% white collar adjustment.
The long-term expected rate of return on pension plan investments was determined using a
building-block method in which best-estimate ranges of expected future real rates of return
(expected returns, net of pension plan investment expenses and inflation) are developed for each
major asset class. These ranges are combined to produce the long-term expected rate of return by
weighting the expected future real rates of return by the target asset allocation percentage and by
adding expected inflation.
37
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 8— EMPLOYEE RETIREMENT SYSTEM (Continued)
Best estimates of arithmetic real rates of return for each major asset class included the pension
plan's target asset allocation as of September 30, 2020, are summarized in the following table:
Asset Class
Domestic Equity
International Equity
Fixed Income
Cash Equivalents
Total
Target
Allocation
50%
10%
40%
0%
100%
*Net of long-term inflation assumption of 2.5%
Rate of Return.
Long-Term
Real Rate of
Return*
7.5%
8.5%
2.5%
0.0%
For the year ended September 30, 2020, the annual money-weighted rate of return on Pension
Plan investments, net of pension plan investment expense, was 6.24 percent The money-
weighted rate of return expresses investment performance, net of investment expense, adjusted
for the changing amounts actually invested.
Discount Rate
The discount rate used to measure the total pension liability was 7.0%. The projection of cash
flows used to determine the discount rate assumed that plan member contributions will be made
at the current contribution rate and that sponsor contributions will be made at rates equal to the
difference between actuarially determined contribution rates and the member rate. Based on
those assumptions, the pension plans' fiduciary net position was projected to be available to
make all projected future benefit payments of current plan members. Therefare, the long-term
expected rate of return on pension plan investments was applied to all periods of projected
benefit payments to determine the total pension liability.
:
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 8— EMPLOYEE RETIREMENT SYSTEM (Continued)
The components of the net pension liability at September 30, 2020, were as follows:
Total Fiduciary Net
Pension Net Pension
Liability Position Liability
Description (a) (b) (a)-(b)
Balances at September 30, 2019
Changes due to:
Service cost
Interest
Differences between expected
and actual experience
Change of Assumptions
Employer contributions
Employee contributions
Benefit payments and refunds
Net investment income
Administrative expenses
Total changes
Balances at September 30, 2020
$ 9,280,052
285,901
655,548
(36,680)
�328,601)
576,168
$ 9,856,220
$ 9,005,770
317,039
133,961
(328,601)
1,067,073
(52,827)
1,136,645
$ 10,142,415
$ 274,282
285,901
655,548
(36,680)
(317,039)
(133,961)
(1,067,073)
52,827
(560,477)
$ (286,195)
The Plan fiduciary net position was 102.90% of the total pension liability as of
September 30, 2020.
Sensitivitv of the Net Position Liability to Chan�es in the Discount Rate
The following represents the Authority's net pension liability calculated using the discount rate
of 7.0%, as well as what the Authority's net pension liability would be if it were calculated using
a discount rate that is one percentage point lower (6.0%) ar one percentage point higher (8.0%)
than the current rate:
Net pension liability
1 % Decrease
6%
1.025.006
39
Current Rate
7%
(286.1951
1 % Increase
8%
(1375.5931
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 8— EMPLOYEE RETIREMENT SYSTEM (Continued)
Pension expense and deferred outflows and inflows of resources
For the fiscal year ended September 30, 2020, the Authority recognized pension expense of
$278,649. In addition, the Authority reported deferred outflows of resources and deferred
inflows of resources related to the Plan from the following sources:
Description
Difference between expected and actual
experience
Change of assumptions
Net difference between projected and actual
earnings on plan investments
Total
Deferred Deferred
Outflows Inflows
of Resources of Resources
$ 110,397 $ 301,916
95,870
269,893
$ 206,267 $ 571,809
The amounts reported as deferred outflows of resources and deferred inflows of resources related
to the plan will be recognized in pension expense as follows:
Year ended September 30:
2020
2021
2022
2023
2024
Thereafter
Pavables to the Pension Plan
E�
Amount
(82,341)
(56,123)
(45,767)
(125,401)
(50,226)
(5.6841
$ (365,542)
At September 30, 2020, the Authority did not have a payable for outstanding contributions to the
Pension Plan for the fiscal year ended September 30, 2020.
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 9— OTHER POSTEMPLOYMENT BENEFITS (OPEB)
General Information about the OPEB Plan
Effective October 1, 2017, the Authority implemented Governmental Accounting Standards
Board Statement 75 (GASB 75), Accounting and Financial Reporting for Postemployment
Benefits Other Than Pensions. Retirees of the Authority pay an amount equal to the actual
premium for health insurance charged by the carrier. The premium charged includes an implied
subsidy, as the amount charged for all participants (active employee or retiree) is the same,
regardless of age. Under GASB 75, an implied subsidy is considered other post-employment
benefits (OPEB).
The following describes the Authority's OPEB Provisions:
Plan Description
The Authority provides a single employer defined benefit health care plan to all of its employees
and the plan is administered by the Authority. The plan has no assets and does not issue a
separate financial report.
Benefits Provided
The plan allows its employees and their beneficiaries, to continue to obtain health and dental
benefits upon retirement. Normal retirement is provided for at age 65 and 5 years of service, or
at 30 years of service regardless of age. The benefits of the plan are in accordance with Florida
Statutes, which are the legal authority for the plan. The plan has no assets and does not issue a
separate financial report.
Emplovees Covered bv Benefit Terms
At September 30, 2020, the following employees were covered by benefit terms:
Participants
Active employees 51
Inactive employees currently receiving benefits 3
Inactive employees entitled to but not receiving benefits -
Total 54
Contribution Requirements: The Authority does not make direct contributions to the plan on
behalf of retirees. Retirees and their beneficiaries pay the same group health rates as active
employees. However, the Authority's actuaries, in their actuarial valuation, calculate an offset to
the cost of these benefits as an employer contribution, based upon an implicit rate subsidy. This
offset equals the total annual age-adjusted costs paid by the Authority, or its active employees,
for coverage of the retirees and their dependents net of the retiree's own payments for the year.
41
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 9— OTHER POSTEMPLOYMENT BENEFITS (OPEB) (Continued)
Total OPEB Liabilitv
The Authority's total OPEB liability of $50,665 was measured as of September 30, 2020 and
was determined by the actuarial valuation as of that date.
Actuarial Assum�tions and Methods
The total OPEB liability was determined using the following actuarial assumptions and other
methods:
Valuation Date:
Discount Rate:
Average Retirement Age
Age adjustment factor
September 30, 2020
2.37% per annum
63
2.375431
Health Care Trend Rate: Medical — 4.60% initially trending to 4.70% in 10 years
Pharmacy — 7.60% initially trending to 4.70% in 10 years
Dental — 3.50% initially trending to 3.00% in 10 years
Vision — 3.00%
Actuarial Cost Method: Entry Age Normal
Plan Participation Percentage
Mortality Rates:
Discount Rate
13%
RP2000 Mortality Table for Males and Females
Projected 18 years
The Authority does not have a dedicated Trust to pay retiree healthcare benefits. Per GASB 75,
the discount rate is a yield or index rate for 20-year, tax-exempt municipal bonds. As a result, the
calculation used a rate of 2.37%.
Chan�es in the Total OPEB Liabilitv
Balance at September 30, 2019
Changes for the Year:
Service Cost
Interest Cost
Changes of Assumptions and Other Inputs
Differences Between Expected and
Actual Experience
Benefit Payments
Net Change in Total OPEB Liability
Balance at September 30, 2020
42
Total OPEB
Liability
$ 71,359
4,304
2,436
4,176
(31,610)
(20,694)
$ 50,665
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 9— OTHERPOST EMPLOYMENT BENEFITS (OPEB) (Continued)
Chan�es in Assumptions
The discount rate was 3.22% at 10/1/19 and 2.37% at 9/30/20.
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate
The following presents the total OPEB liability of the Authority, as well as what the Authority's
total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-
point lower or 1-percentage-point higher then the current discount rate:
1.0% Decrease Discount Rate 1.0% Increase
(1.37%1 (2.37%1 (3.37%1
Total OPEB Liability $ 56,860 $ 50,665 $ 45,835
Sensitivitv of the Total OPEB Liability to Chan�es in the Healthcare Trend Rates
The following presents the total OPEB liability of the Authority, as well as what the Authority's
total OPEB liability would be if it were calculated using healthcare cost trends that are 1-
percentage-point lower or 1-percentage-point higher (then the current healthcare cost trend rates:
Healthcare cost
1.0% Decrease Trend Rates
Total OPEB Liability $ 45,169 $ 50,665
1.0% Increase
$ 57,803
OPEB Expense and Deferred Outflows and In ows of Resources Related to OPEB
For the year ended September 30, 2020, the Authority recognized OPEB credit of $20,694
NOTE 10 — CONTINGENCIES
The Authority is involved in various litigations and claims arising in the course of operations. It
is the opinion of legal counsel that the likelihood of unfavorable outcomes and the amounts of
potential losses cannot be reasonably determined at this time. Accordingly, no provision for any
liability that may result has been made in the accompanying financial statements.
In the opinion of management, no present claims exist that would, in the event of an adverse
resolution, result in liabilities in excess of the Authority's insurance coverage.
43
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 11 — COMMITMENTS
As of September 30, 2020, the Authority had commitments on outstanding engineering and
construction contracts for improvements to the system of approximately $2,294,544.
NOTE 12 — RISK MANAGEMENT
The Okeechobee Utility Authority is exposed to various risks of loss related to torts; theft of,
damage to, and destruction of assets; errors and omissions; injuries to employees; and natural
disasters. During the 2020 fiscal year, coverage was maintained via membership renewal with
Preferred Governmental Insurance Trust ("PGIT"), a public entity risk pool. The Okeechobee
Utility Authority pays an annual premium to PGIT for the following coverage: property and
inland marine, general liability, automobile, crime, public ofiicial's liability, employment
practices liability, and worker's compensation. The PGIT purchases excess of loss insurance
policies. The excess of loss insurance policies attaches at $100,000 per occurrence except for
property insurance which is $25,000 per occurrence. Since the PGIT purchases excess of loss
insurance, the pool has not billed and does not plan to bill members for additional assessments.
As of September 30, 2020, the Authority's management is of the opinion that the PGIT is able to
pay claims incurred to date and that the Authority will not be liable to pay any submitted claims.
The Okeechobee Utility Authority continues to carry commercial insurance for the following
risks: pollution liability, health, life, and disability. Settled claims resulting from these risks
have not exceeded commercial insurance coverage in any of the past three fiscal years.
Florida Statutes limit the Authority's maximum loss for most liability claims to $200,000 per
person and $300,000 per occurrence under the Doctrine of Sovereign Immunity. However, under
certain circumstances, a plaintiff can seek to recover damages in excess of statutory limits by
introducing a claims bill to the Florida Legislature. The limits addressed in Florida Statutes do
not apply to claims iiled in Federal courts.
NOTE 13 — CORONAVIRUS
In December 2019, a novel strain of coronavirus surfaced in Wuhan, China, and has spread
around the world, with resulting business and social disruption. The coronavirus was declared
Public Health Emergency of International Concern by the World Health Organization on January
30, 2020. The operations and business results of the Authority could be significantly adversely
affected. The extent to which the coronavirus may impact business activity or investment results
will depend on future developments, which are highly uncertain and cannot be predicted,
including new information which may emerge concerning the severity of the coronavirus and the
actions required to contain the coronavirus or treat its impact, among others.
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2020
NOTE 14— NEW ACCOUNTING STANDARDS
Below is a brief description and effective date of new accounting standards that could have a
significant impact on the Authority's financial statements. Management is currently evaluating
the impact of the adoption of this statement on the Authority's financial statements.
GASB Statement No. 87, Leases. This Statement will increase the usefulness of governments'
financial statements by requiring recognition of certain lease assets and liabilities for leases that
previously were classified as operating leases and recognized as inflows of resources or outflows
of resources based on the payment provisions of the contract. It establishes a single model for
lease accounting that is based on the foundational principle that leases are financings of the right
to use an underlying asset. This Statement is effective for the fiscal year ending September 30,
2022.
45
OKEECHOBEE UTILITY AUTHORITY
Required Supplemental Information
Schedule of Changes in the Total OPEB Liability
Last Ten Fiscal Years
Service cost
Interest on total OPEB liability
Effect of economic/demographic
gains or losses
Effect of assumption changes
Net change in total OPEB Liability
Total OPEB liability - beginning
Total OPEB liability - ending
2018 2019 2020
$ 2,113 $ 3,493 $ 4,304
1,636 3,107 2,436
a6,z�6 �za,iss� �3i,6io�
(ll,009) 4,796 4,176
19,016 (10,742) (20,694)
63,085 82,101 71,359
$ 82,101 $ 71,359 $ 50,665
Change of Assumptions
Discount rate 3.63% 3.22% 237%
At 10/1/17 the discount rate was 2.51%
This schedule is intended to show information for 10 years. However, until a full 10-year trend is compiled,
information will be presented far those years for which information is available.
OKEECHOBEE UTILITY AUTHORITY
Required Supplemental Information
Employees' Retirement System
Schedule of Changes in Net Pension Liability and Related Ratios
Last Ten Fiscal Years
Total pension liability:
Service cost
Interest
Differences between expected and
actualexperience
Change of assumptions
Benefit payments, including
refunds of employee contribution�
Net change in total pension liability
Total pension liability - beginning
Total pension liability - ending (a)
Plan fiduciary net position
Contributions - employer
Contributions - employee�
Net investment income
Benefit payments, including
refunds of employee contribution�
Administrative expense�
Net change in plan fiduciary net position
Plan fiduciary net position - beginning
Plan fiduciary net position - ending (b)
Net pension liability (a) - (b)
Plan fiduciary net position as a percentage
of the total pension liability
Covered payroll
Net pension liability as a percentage of
covered payroll
2017 2018 2019 2020
$ 285,610 $ 282,926 $ 269,093 $ 285,901
723,860 595,025 616,927 655,548
181,813 (383,010) (36,680)
109,828
(206,413) (319,132) (300,238) (328,601)
912,885 740,632 202,772 576,168
7,423,763 8,336,648 9,077,280 9,280,052
$ 8,336,648 $ 9,077,280 $ 9,280,052 $ 9,856,220
$ 287,362 $ 325,097 $ 336,605 $ 317,039
130,765 129,178 128,067 133,961
831,485 703,480 327,727 1,067,073
(206,413) (319,132) (300,238) (328,601)
(52,151) (72,819) (59,018) (52,827)
991,048 765,804 433,143 1,136,645
6,815,775 7,806,823 8,572,627 9,005,770
$ 7,806,823 $ 8,572,627 $ 9,005,770 $ 10,142,415
$ 529,825 $ 504,653 $ 274,282 $ (286,195)
93.64% 94.44% 97.04% 102.90%
$ 2,179,417 $ 2,152,963 $ 2,134,469 $ 2,232,670
24.31% 23.44% 12.85% (12.82)%
NOTE: Prior to October 1, 2016, the Authority participated in the City of Okeechobee and Okeechobee Utility Authorit
Employees' Retirement System, a cost-sharing multiple-employer defined benefit plan. Effective October 1, 2016, the Authorit
withdrew from that plan and started the Okeechobee Utility Authority Employees' Retirement System, a single-employe
defined benefit plan with the same contribution and benefit provisions as the prior plan.
This schedule is intended to sbow information for 10 years. However, until a full 10-year trend is compiled, information will be
presented for those years for which information is available
Change of Assumptions
For the year ending September 30, 2017, the assumed rates of mortality were changed
47
OKEECHOBEE UTILITY AUTHORITY
Required Supplemental Information
Last Ten Fiscal Years
Schedule of Employer Contributions
Fiscal Year Actuarially
Ended Determined
September 30 Contribution
2017 303,157
2018 302,922
2019 335,965
2020 317,039
Actual
Contribution
287,362 *
325,097
336,605
317,039
Contribution Authoriry's Actual Contribution
Excess Covered as a Percentage of
(Deficiency) Payroll Covered Payroll
(15,795) * 2,179,417 13.19%
22,175 2,152,963 15.10%
640 2,134,469 15.77%
- 2,232,670 1420%
* Excess contributions from previous years totaling $15,795 were applied to satisfy the full contribution requirement.
Schedule of Annual Money-Weighted Rate of Return, Net of Investment Expense
Fiscal Year
Ending
September 30
2017 10.83%
2018 8.11%
2019 3.21%
2020 6.24%
NOTE: Prior to October 1, 2016, the Authority participated in the City of Okeechobee and Okeechobee Utility Authority'
Employees' Retirement System, a cost-sharing multiple-employer defined benefit plan. Effective October 1, 2016, the Authority
withdrew from that plan and started the Okeechobee Utility Authority Employees' Retirement System, a single-employex
defined benefit plan with the same contribution and benefit provisions as the prior plan.
This schedule is intended to show information for 10 years. However, until a full 10-year trend is
compiled, information will be presented for those years for which information is available.
.•
OKEECHOBEE UTILITY AUTHORITY
Notes to the Schedule of Contributions
September 30, 2020
The actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal yea�
in which contributions are reported.
Valuation Date October 1, 2018
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial Cost Method Aggregate
Amortizarion Method N/A
Remaining Amortization Period N/A
Asset Valuarion Method 4-year smoothed market
Inflation 2.50%
Salary Increases 6.00%
Cost of Living Adjustments None
Investment Rate of Return 7.00°/o
Retirement age 100% when first eligible for normal
retirement or DROP entry
Mortality RP-2000 Combined Healthy
Participant Mortality Table with
mortality improvement projected
to all future years using Scale
BB
NOWLEN, HOLT & MINER, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
WEST PALM BEACH OFFICE
NORTHBRIDGECENTRE
515 N. FLAGLER DRIVE, SUITE U00
POST OFFICE BOX 347
WEST PALM BEACH, FLORIDA 33402-0347
TELEPHONE (561) 659-3060
FAX (561) 835-0628
W W W.NHMCPA.COM
EVERETT B. NOWLEN (1930-1984), CPA
EDWARD T. HOLT, CPA
WILLIAM B. MINER, RETIRED
ROBERT W. HENDRIX, JR., CPA
JANET R. BARICEVICH, RETIRED, CPA
TERRYL.MORTON,JR.,CPA
N. RONALD BENNETT, CVA, ABV, CFF, CPA
ALEXIA G. VARGA, CFE, CPA
EDWARD T. HOLT, JR., PFS, CPA
BRIAN J. BRESCIA, CFP�", CPA
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
MARK J. BYMASTER, CFE, CPA
RVAN M. SHORE, CFP°", CPA
WEI PAN, CPA
WILLIAM C. KISKER, CPA
RICHARD E. BOTTS, CPA
STATEMENTS PERFORMED IN ACCORDANCE WITH 8333 S EL2Dd O REET
GOVERNMENT A UDITING STANDARDS BELLE GLADEOFLORID 333 0 0338
TELEPHONE (561) 996-5612
FAX (561) 996-6248
The Honorable Chairman and Members of the
Okeechobee Utility Authority Board
Okeechobee, Florida
We have audited, in accordance with the auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States, the financial statements of the
Okeechobee Utility Authority as of and for the year ended September 30, 2020, and the related
notes to the financial statements, and have issued our report thereon dated March 22, 2021.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Okeechobee
Utility Authority's internal control over financial reporting (internal control) as a basis for
designing audit procedures that are appropriate in the circumstances for the purpose of expressing
our opinion on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the Okeechobee Utility Authority's internal control. Accordingly, we do not
express an opinion on the effectiveness of the Okeechobee Utility Authority's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control such that there is a reasonable
possibility that a material misstatement of the entity's financial statements will not be prevented,
or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet
important enough to merit attention by those charged with governance.
50
AMERICAN INSTITUTE flF CERTIFiE� PU6LIC ACCOUN�ANTS • FLORIaA INSTITUTE OF CERTIFIEQ PUBLIC ACCflUfVTAN�S • CPAMERECA ENTERfVATIpNAL
Our consideration of internal control was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control that might be
material weaknesses or significant deficiencies. Given these limitations, during our audit we did
not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Okeechobee Utility Authority's
financial statements are free from material misstatement, we performed tests of its compliance with
certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which
could have a direct and material effect on the 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 no instances of noncompliance or other
matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity's internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity's internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
West Palm Beach, Florida
March 22, 2021
�,�; �2� 4 �u� , �A,
51
NOWLEN, HOLT & MINER, P.A.
�y:�:� r i� i�.� a�r3 � cn:[K�I�1�1 `►Y ��►Y Ky
WEST PALM BEACH OFFICE
NORTH6RIDGCCENTRE
515 N. FLAGLER DRIVE, SUITE 1700
POST OFFICE BOX 347
WEST PALM BEACH, FLORIDA 33402-0347
TELEPHONE (561) 659-3060
FAX (561) 835-0628
W W W.NHMCPA.COM
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE
FOR EACH MAJOR STATE PROJECT
EVERETT B. NOWLEN (1930-1984), CPA
EDWARD T. HOLT, CPA
WILLIAM B. MINER, RETIRED
ROBERT W. HENDRIX, JR., CPA
JANET R. BARICEVICH, RETIRED, CPA
TERRY L. MORTON, JR., CPA
N. RONALD BENNETT, CVA, ABV, CFF, CPA
ALEXIA G. VARGA, CFE, CPA
EDWARD T. HOLT, JR., PFS, CPA
BRIAN J. BRESCIA, CFP"`, CPA
MARK J. BYMASTER, CFE, CPA
RYAN M. SHORE, CFP"°, CPA
WEI PAN, CPA
WILLIAM G KISKER, CPA
RICHARD E. BOTTS, CPA
AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE BELLE GLADE OFFICE
REQUIRED BY CHAPTER 10.550,
RULES OF THE AUDITOR GENERAL
The Honorable Chairman and Members of the
Okeechobee Utility Authority Board
Okeechobee, Florida
Report on Compliance for Each Major State Project
333 S.E. 2nd STREET
POST OFFICE BOX 338
BELLE GLADE, FLORIDA 33430-0338
TELEPHONE (561) 996-5612
FAX (561) 996-6248
We have audited the Okeechobee Utility Authority's compliance with the types of compliance
requirements described in the Department of Financial Services' State Projects Compliance
Supplement that could have a direct and material effect on the Okeechobee Utility Autharity's
major State project for the year ended September 30, 2020. The Okeechobee Utility Authority's
major State project is identified in the summary of auditor's results section of the accompanying
Schedule of Findings and Questioned Costs.
Management's Responsibility
Management is responsible for compliance with State statutes, regulations, and the terms and
conditions of its State projects applicable to its State project.
Auditor's Responsibility
Our responsibility is to eXpress an opinion on compliance for the Okeechobee Utility Autharity's
major State project based on our audit of the types of compliance requirements referred to above.
We conducted our audit of compliance in accordance with auditing standards generally accepted
in the United States of America; the standards applicable to iinancial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States; and
Chapter 10.550, Rules of the Auditor General. Those standards and Chapter 10.550, Rules of the
Auditor General require that we plan and perform the audit to obtain reasonable assurance about
whether noncompliance with the types of compliance requirements referred to above that could
have a direct and material effect on a major State project occurred. An audit includes examining,
on a test basis, evidence about the Okeechobee Utility Authority's compliance with those
requirements and performing such other procedures as we considered necessary in the
circumstances.
52
AM ERICA, l I N STITUTE �F C EFki IFI EQ PU BL9C ACCOUFJTr4N TS • FL4RIOP. IN9TITU T� 4F CE RTI F IEU PU� LIC ACCOLIN�ANTS •� PAhi EFiICA INTE RNATI4HAL
We believe that our audit provides a reasonable basis for our opinion on compliance of the major
State project. However, our audit does not provide a legal determination of the Okeechobee
Utility Authority's compliance.
Opinion on Each Major State Project
In our opinion, the Okeechobee Utility Authority complied, in all material respects, with the
types of compliance requirements referred to above that could have a direct and material effect
on its major State project for the year ended September 30, 2020.
Report on Internal Control over Compliance
Management of the Okeechobee Utility Authority is responsible for establishing and maintaining
effective internal control over compliance with the types of compliance requirements referred to
above. In planning and performing our audit of compliance, we considered the Okeechobee
Utility Authority's internal control over compliance with the types of requirements that could
have a direct and material effect on the major State project as basis for designing auditing
procedures that are appropriate in the circumstances for the purpose of expressing an opinion on
compliance for each major State project and to test and report on internal control over
compliance in accordance with Chapter 10.550, Rules of the Auditor General, but not for the
purpose of expressing an opinion on the effectiveness of internal control over compliance.
Accordingly, we do not express an opinion on the effectiveness of the Okeechobee Utility
Authority's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control
over compliance does not allow management or employees, in the normal course of performing
their assigned functions, to prevent, or detect and correct, noncompliance with a type of
compliance requirement of a State project on a timely basis. A material weakness in internal
cont�ol over compliance is a deficiency, or combination of deficiencies, in internal control over
compliance, such that there is a reasonable possibility that material noncompliance with a type of
compliance requirement of a State project will not be prevented, or detected and corrected, on a
timely basis. A signifzcant defzciency in internal contNol over compliance is a deficiency, or a
combination of deficiencies, in internal control over compliance with a type of compliance
requirement of a State project that is less severe than a material weakness in internal control over
compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in
the first paragraph of this section and was not designed to identify all deficiencies in internal
control over compliance that might be material weaknesses or significant deficiencies. We did
not identify any deficiencies in internal control over compliance that we consider material
weaknesses. However, material weaknesses may exist that have not been identified.
53
The purpose of this report on internal control over compliance is solely to describe the scope of
our testing of internal control over compliance and the results of that testing based on the
requirements of Chapter 10.550, Rules of the Auditor General. Accordingly, this report is not
suitable for any other purpose.
West Palm Beach, Florida
March 22, 2021
rbdtiu�,�.r�; �� 4' �tilYul/L � �Q•
54
OKEECHOBEE UTILITY AUTHORITY
Schedule of Expenditures of State Financial Assistance
For the Fiscal Year Ended September 30, 2020
CSFA
State Grantor/Program Title Number
Plorida Denartment ofEnvironmental Protection
Statewide Water Quality Restoration Projects 37.039
Total State Financial Assistance
NOTE 1- BASIS OF PRESENTATION
Contract State
Number Expenditures
LP47o12 $ 361,639
LP47021 56,784
�P4000s 586,624
LPQ0017 108,290
1,113,337
$ 1,113,337
The above schedule of expenditures of state fnancial assistance includes State grant activity of the
Okeechobee Utility Authority and is presented in accordance with the requirements of the Florida Single
Audit Act. Therefore, some amounts presented in the schedule may differ from amounts presented in, or
used in the preparation of the basic financial statements. Because the Schedule presents only a portion of
the operations of the Okeechobee Utility Authority it is not intended to and does not present the financial
position, changes in financial position, or cash flows of the Okeechobee Utility Authority.
NOTE 2- SIGNIFICANT ACCOUNTING POLICIES
Expenditures are recognized on the accrual basis of accounting. Such expenditures are recognized following
the cost principles contained in the Florida Department of Financial Services' State Projects Compliance
Supplement, wherein certain types of expenditures are not allowed or are limited as to reimbursement. The
Okeechobee Utility Authority did not have any loan programs.
NOTE 3 - CONTINGENCIES
Amounts received or receivable from grantor agencies are subject to audit and adjustment by those
agencies. Any disallowed claims, including amounts already received, might constitute a liability of the
Okeechobee Utility Authority for the return of those funds. In the opinion of management, all grant
expenditures were in compliance with the terms of the grant agreements and applicable State laws and
regulations.
55
OKEECHOBEE UTILITY AUTHORITY
Schedule of Findings and Questioned Costs
September 30, 2020
SECTION I—SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of auditor's report issued on whether the financial
statements audited were prepared in accordance with GAAP:
Internal control over financial reporting:
• Material weakness identified?
• Reportable condition identified that is not considered
to be a material weakness?
Noncompliance material to financial statements noted?
State Financial Assistance
Internal control over major projects:
• Material weakness identified?
• Reportable condition identified that is not considered
to be a material weakness?
Type of auditor's report issued on compliance for major
proj ect:
Any audit findings disclosed that are required to be reported in
accordance with Chapter 10.550, Rules of the Auditor
General?
Identification of Major State Proiect
CSFA Number Name of State Project
Unmodi�ed Opinion
No
No
No
No
None reported
Unmodified
No
Florida Department of Environmental Protection
37.039 . Statewide Water Quality Restoration Projects
Dollar threshold used to distinguish between 300,000
type A and type B programs:
56
OKEECHOBEE UTILITY AUTHORITY
Schedule of Findings and Questioned Costs
September 30, 2020
SECTION II— FINANCIAL STATEMENT FINDINGS
None
SECTION III— STATE PROJECTS FINDINGS AND QUESTIONED COSTS
Maior State Proiect
Florida Department of Environmental Protection
Statewide Water Quality Restoration Projects — CSFA 37.069
None
SECTION IV— SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
None
57
��i � �
�� ��
NOWLEN, HOLT & MINER, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
WEST PALM BEACH OFFICE
NORTHBRIDGECENTRE
515 N. FLAGLER DRIVE, SUITE U00
POST OFFICE BOX 347
WEST PALM BEACH, FLORIDA 33402-0347
TELEPHONE (561) 659-3060
FAX (561) 835-0628
W W W.NHMCPA.COM
EVERETT B. NOWLEN (1930-1984), CPA
EDWARD T. HOLT, CPA
WILLIAM B. MINER, RETIRED
ROBERT W. HENDRIX, JR., CPA
JANET R. BARICEVICH, RETIRED, CPA
TERRYL.MORTON,JR.,CPA
N. RONALD BENNETT, CVA, ABV, CFF, CPA
ALEXIA G. VARGA, CFE, CPA
EDWARD T. HOLT, JR., PFS, CPA
BRIAN J. BRESCIA, CFP�", CPA
MARK J. BYMASTER, CFE, CPA
RVAN M. SHORE, CFP°", CPA
WEI PAN, CPA
WILLIAM C. KISKER, CPA
RICHARD E. BOTTS, CPA
MANAGEMENT LETTER IN ACCORDANCE WITH 8333 S EL2Dd O REET
THE RULES OF THE AUDITOR GENERAL BELLE GLADEO LORID 333 0 0338
OF THE STATE OF FLORIDA TELEPHONE (567) 996-5612
FAX (561) 996-6248
The Honorable Chairman and Members of the
Okeechobee Utility Authority Board
Okeechobee, Florida
Report on the Financial Statements
We have audited the financial statements of the Okeechobee Utility Authority, as of and for the
fiscal year ended September 30, 2020, and have issued our report thereon dated March 22, 2021.
Auditor's Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America; the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States; and Chapter 10.550, Rules of
the Auditor General.
Other Reporting Requirements
We have issued our Independent Auditor's Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in
Accordance with Government Auditing Standards; Independent Auditor's Report on Compliance
for Each Major State Project and Report on Internal Control over Compliance; Schedule of
Findings and Questioned Costs; and Independent Accountant's Report on an examination
conducted in accordance with AICPA Professional Standards, AT-C Section 315, regarding
compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General.
Disclosures in those reports and schedule, which are dated March 22, 2021, should be considered
in conjunction with this Management Letter.
:
AMERICAN INSTITUTE flF CERTIFiE� PU6LIG ACCOUNTANTS • FLORIQA INSTITUTE OF CERTIFIEQ PUBLIC ACCfltJNTANTS • GPAMERICA iNTERfVATIpNAL
Prior Audit Findings
Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not
corrective actions have been taken to address findings and recommendations made in the preceding
financial audit report. There were no findings or recommendations in the prior year that required
corrective actions.
Official Title and Legal Authority
Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and
legal authority for the primary government and each component unit of the reporting entity be
disclosed in this management letter, unless disclosed in the notes to the financial statements. This
information is disclosed in Note 1 to the financial statements.
Financial Condition and Management
Sections 10.554(1)(i)S.a. and 10.556(7), Rules of the Auditor General, require us to apply
appropriate procedures and communicate the results of our determination as to whether or not the
Okeechobee Utility Authority has met one or more of the conditions described in Section
218.503(1), Florida Statutes, and to identify the specific condition(s) met. In connection with our
audit, we determined that the Okeechobee Utility Authority did not meet any of the conditions
described in Section 218.503(1), Florida Statutes, during the fiscal year ended September 30, 2020.
Pursuant to Sections 10.554(1)(i)S.b. and 10.556(8), Rules of the Auditor General, we applied
financial condition assessment procedures for the Authority. It is management's responsibility to
monitor the Okeechobee Utility Authority's financial condition, and our financial condition
assessment was based in part on representations made by management and review of financial
information provided by same. Our assessment was done as of the fiscal year end. The results of
our procedures did not disclose any matters that are required to be reported.
Section 10.554(1)(i)2., Rules of the Auditor General, requires that we communicate any
recommendations to improve financial management. In connection with our audit, we did not have
any such recommendations.
Special District Component Units
Section 10.554(1)(i)S.c, Rules of the Auditor General, requires, if appropriate, that we
communicate the failure of a special district that is a component unit of a county, municipality, or
special district, to provide the financial information necessary for proper reporting of the
component unit, within the audited financial statements of the county, municipality, or special
district in accordance with Section 218.39(3)(b), Florida Statutes.
Based on the application of criteria in publications cited in Section 10.553, Rules of the Auditor
General, there are no special district component units of the Okeechobee Utility Authority.
59
Additional Matters
Section 10.554(1)(i)3., Rules of the Auditor General, requires us to communicate noncompliance
with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have
occurred, that have an effect on the financial statements that is less than material but warrants the
attention of those charged with governance. In connection with our audit, we did not note any such
findings.
Single Audits
The Okeechobee Utility Authority expended less than $750,000 of federal awards and more than
$750,000 of state financial assistance for the iiscal year ended September 30, 2020, and was
required to have a state single audit.
Purpose of this Letter
Our management letter is intended solely for the information and use of the Legislative Auditing
Committee, members of the Florida Senate and the Florida House of Representatives, the Florida
Auditor General, Federal and other granting agencies, and applicable management, and is not
intended to be and should not be used by anyone other than these specified parties.
�;�4�,�a.
West Palm Beach, Florida
March 22, 2021
�'� r �
��.
NOWLEN, HOLT & MINER, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
WEST PALM BEACH OFFICE
NORTHBRIDGECENTRE
515 N. FLAGLER DRIVE, SUITE U00
POST OFFICE BOX 347
WEST PALM BEACH, FLORIDA 33402-0347
TELEPHONE (561) 659-3060
FAX (561) 835-0628
W W W.NHMCPA.COM
INDEPENDENT ACCOUNTANT'S REPORT
ON COMPLIANCE WITH SECTION 218.415,
FLORIDA STATUTES
The Honorable Chairman and Members of the
Okeechobee Utility Authority Board
Okeechobee, Florida
EVERETT B. NOWLEN (1930-1984), CPA
EDWARD T. HOLT, CPA
WILLIAM B. MINER, RETIRED
ROBERT W. HENDRIX, JR., CPA
JANET R. BARICEVICH, RETIRED, CPA
TERRYL.MORTON,JR.,CPA
N. RONALD BENNETT, CVA, ABV, CFF, CPA
ALEXIA G. VARGA, CFE, CPA
EDWARD T. HOLT, JR., PFS, CPA
BRIAN J. BRESCIA, CFP�", CPA
MARK J. BYMASTER, CFE, CPA
RVAN M. SHORE, CFP°", CPA
WEI PAN, CPA
WILLIAM C. KISKER, CPA
RICHARD E. BOTTS, CPA
BELLE GLADE OFFICE
333 S.E. 2nd STREET
POST OFFICE BOX 338
BELLE GLADE, FLORIDA 33430-0338
TELEPHONE (567) 996-5612
FAX (567 ) 996-6248
We have examined the Okeechobee Utility Authority's compliance with Section 218.415, Florida
Statutes during the year ended September 30, 2020. Management of the Okeechobee Utility Authority is
responsible for Okeechobee Utility Authority's compliance with the specified requirements. Our
responsibility is to express an opinion on the Okeechobee Utility Authority's compliance with the
specified requirements based on our examination.
Our examination was conducted in accordance with attestation standards established by the American
Institute of Certified Public Accountants. Those standards require that we plan and perform the
examination to obtain reasonable assurance about whether the Okeechobee Utility Authority complied,
in all material respects, with the specified requirements referenced above. An examination involves
performing procedures to obtain evidence about whether the Okeechobee Utility Authority complied
with the specified requirements. The nature, timing, and eXtent of the procedures selected depend on our
judgement, including an assessment of the risk of material noncompliance, whether due to fraud or error.
We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for
our opinion.
Our examination does not provide a legal determination on the Okeechobee Utility Authority's
compliance with the specified requirements.
In our opinion, the Okeechobee Utility Autharity complied, in all material respects, with Section
218.415, Florida Statutes for the year ended September 30, 2020.
This report is intended solely for the information and use of the Legislative Auditing Committee,
members of the Florida Senate and Flarida House of Representatives, the Flarida Auditar General,
applicable management, and the Okeechobee Utility Authority Board, and is not intended to be and
should not be used by anyone other than these specified parties.
West Palm Beach, Florida
March 22, 2021
r}2a-��; l�� 9' �ul� � �Q-
61
AMERICAN INSTITUTE OF CEFiTIFIE� PUBLIC ACCdUNTANTS • FLORIaA INSTITLITE OF CERTIFIEQ PUBLIC ACCflUhiTAI�TS • CPAMERECA €NTERfVATIQNAL