HomeMy WebLinkAbout2018 - City of Lansing-FS Final CAFRCity of Lansing,
Michigan
Year Ended
June 30, 2018
Comprehensive
Annual Financial
Report
Prepared by: Department of Finance
Finance Director
Angela Bennett
Accounting Manager
Randy Endsley
CITY OF LANSING, MICHIGAN
Table of Contents
Page
INTRODUCTORY SECTION 1
Elected and Appointed Officers 2
Letter of Transmittal 3
Table of Organization 7
GFOA Certificate of Achievement 8
FINANCIAL SECTION 9
Independent Auditors’ Report 11
Management’s Discussion and Analysis 15
Basic Financial Statements
Government-wide Financial Statements:
Statement of Net Position 30
Statement of Activities 31
Fund Financial Statements:
Balance Sheet – Governmental Funds 36
Reconciliation of Fund Balances of Governmental Funds
to Net Position of Governmental Activities 37
Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds 38
Reconciliation of Net Changes in Fund Balances of Governmental Funds
to Change in Net Position of Governmental Activities 39
Statement of Revenues, Expenditures and Changes in
Fund Balance – Budget and Actual:
General Fund 40
Statement of Net Position – Proprietary Funds 44
Statement of Revenues, Expenses and Changes in Fund Net
Position – Proprietary Funds 45
Statement of Cash Flows – Proprietary Funds 46
Statement of Fiduciary Net Position - Fiduciary Funds 50
Statement of Changes in Fiduciary Net Position - Pension and
Other Postemployment Benefits Trust Funds 51
Combining Statement of Net Position – Discretely Presented Component Units 56
Combining Statement of Activities – Discretely Presented Component Units 57
Notes to Financial Statements 59
CITY OF LANSING, MICHIGAN
Table of Contents
Page
Required Supplementary Information 123
Employees' Retirement System Pension Plan:
Schedule of Changes in Net Pension Liability and Related Ratios 124
Schedule of the Net Pension Liability 125
Schedule of Contributions 126
Schedule of Investment Returns 127
Police and Fire Retirement System Pension Plan:
Schedule of Changes in Net Pension Liability and Related Ratios 128
Schedule of the Net Pension Liability 129
Schedule of Contributions 130
Schedule of Investment Returns 131
Employees' Retirement System OPEB Plan:
Schedule of Changes in Net OPEB Liability and Related Ratios 132
Schedule of the Net OPEB Liability 133
Schedule of Contributions 134
Schedule of Investment Returns 135
Police and Fire Retirement System OPEB Plan:
Schedule of Changes in Net OPEB Liability and Related Ratios 136
Schedule of the Net OPEB Liability 137
Schedule of Contributions 138
Schedule of Investment Returns 139
Combining and Individual Fund Financial Statements and Schedules 141
Nonmajor Governmental Funds:
Combining Balance Sheet – Nonmajor Governmental Funds 142
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances – Nonmajor Governmental Funds 143
Combining Balance Sheet – Nonmajor Special Revenue Funds 146
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances – Nonmajor Special Revenue Funds 148
Schedule of Revenues, Expenditures and Changes in Fund
Balances – Budget and Actual – Nonmajor Special Revenue Funds 150
Combining Balance Sheet – Nonmajor Debt Service Funds 158
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances – Nonmajor Debt Service Funds 159
Combining Balance Sheet – Nonmajor Capital Projects Funds 162
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances – Nonmajor Capital Projects Funds 163
Combining Balance Sheet – Nonmajor Permanent Funds 166
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances – Nonmajor Permanent Funds 167
CITY OF LANSING, MICHIGAN
Table of Contents
Page
Combining and Individual Fund Financial Statements and Schedules (concluded)
Nonmajor Enterprise Funds:
Combining Statement of Net Position – Nonmajor Enterprise Funds 170
Combining Statement of Revenues, Expenses and Changes in Fund Net
Position - Nonmajor Enterprise Funds 171
Combining Statement of Cash Flows - Nonmajor Enterprise Funds 172
Internal Service Funds:
Combining Statement of Net Position – Internal Service Funds 176
Combining Statement of Revenues, Expenses and Changes in Fund Net
Position - Internal Service Funds 177
Combining Statement of Cash Flows - Internal Service Funds 178
Agency Funds:
Combining Statement of Fiduciary Assets and Liabilities – Agency Funds 182
Combining Statement of Changes in Fiduciary Assets and Liabilities – Agency Funds 183
STATISTICAL SECTION (UNAUDITED)185
TABLE
1 Net Position by Component 189
2 Change in Net Position 190
3 Fund Balances, Governmental Funds 192
4 Changes in Fund Balances of Governmental Funds 193
5 Assessed and Estimated Actual Value of Taxable Property 194
6 Direct and Overlapping Property Tax Rates 195
7 Profile of Ten Largest Ad Valorem Taxpayers 196
8 Property Tax Levies and Collections 197
9 Ratios of Outstanding Debt by Type 198
10 Ratios of General Bonded Debt Outstanding 199
11 Direct and Overlapping Governmental Activities Debt 200
12 Legal Debt Margin Information 201
13 Pledged-Revenue Coverage 202
14 Demographic and Economic Statistics 203
15 Principal Employers 204
16 Full-Time Equivalent City Governmental Employees by Function/Program 206
17 Operating Indicators by Function/Program 210
18 Capital Asset Statistics by Function/Program 212
INTRODUCTORY SECTION
1
CITY OF LANSING, MICHIGAN
LANSING CITY GOVERNMENT
Samantha Harkins Executive Assistant/Chief of Staff
James D. Smiertka City Attorney
Angela Bennett Finance Director
Tammy Good City Treasurer
Sharon Frischman City Assessor
Michael Yankowski Police Chief
Randy Talifarro Fire Chief
Andrew Kilpatrick Public Service Director
Brian McGrain Economic Development & Planning Director
Andrea Crawford Neighborhood & Citizen Engagement Director
Brett Kaschinske Parks & Recreation Director
Anethia Brewer Court Administrator
Joan Jackson Johnson Human Relations & Community Services Director
Linda Sanchez-Gazella Human Resources Director
Eric Brewer Internal Auditor
Fiscal Year Ended June 30, 2018
Andy Schor
MAYOR
CLERK
Chris Swope
CITY COUNCIL
Carol Wood, Council President, At Large
Jody Washington, Council Vice President, 1st Ward
Kathie Dunbar, At Large
Patricia Spitzley, At Large
Peter Spadafore, At Large
Jeremy Garza, 2nd Ward
Adam Hussain, 3rd Ward
Brian T. Jackson, 4th Ward
OFFICERS
DISTRICT COURT JUDGES
Frank J. Deluca
Stacia Buchanan
Louise Alderson, Chief Judge
Hugh B. Clarke, Jr.
2
December 21, 2018
Council President Carol Wood
and Council Members
10th Floor City Hall
Lansing, Michigan 48933-1694
Dear President Wood and Council Members:
We are pleased to submit the comprehensive annual financial report of the City of Lansing, Michigan for the
fiscal year ended June 30, 2018.
The City assumes full responsibility for both the accuracy of the data and the completeness and fairness of
the presentation, including all disclosures. To the best of our knowledge and belief, the enclosed data are
accurate in all material respects and are reported in a manner designed to present fairly the financial
position and results of operations government wide and of the various funds of the City. All disclosures
necessary to enable the reader to gain an understanding of the City's financial activities have been included.
The City’s fiscal year 2017/2018 financial statements have been audited by Rehmann Robson, an independent
firm of licensed, certified public accountants. The goal of the independent audit is to provide reasonable
assurance that the financial statements for the City of Lansing for the fiscal year-ended June 30, 2018, are
free of material misstatement. The independent audit involved examining, on a test basis, evidence
supporting the amounts and disclosures contained in the financial statements; assessing the accounting
principles used; and evaluating the overall financial statement presentation. The independent audit
concluded with the rendering of an unmodified opinion on the statements, meaning the financial statements
present, fairly and accurately in all material respects, the financial position of the City in conformity with
Generally Accepted Accounting Principles (“GAAP”). The independent auditors repot is presented as the first
component of the financial section of this report.
This letter of transmittal is designed to complement the Management Discussion and Analysis (MD&A) and
should be read in conjunction with it. The Management Discussion and Analysis can be found immediately
following the Independent Auditor Report.
Profile of the City of Lansing
Serving as Michigan’s capital since 1848, the City of Lansing was incorporated in 1859 and operates under
provisions of Public Act 279 of 1909, as amended (the “Home Rule City Act”). The City incorporates 34.7
square miles and is located in the lower middle of Michigan’s Lower Peninsula and operates under a strong
mayor form of government established by 1978 Charter revision.
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Lansing is a mature core city with a population of 116,986, according to 2017 census estimates, and offers a
full range of services. During the fiscal year ended June 30, 2018, the City operated police headquarters and
a precinct with 202 sworn police officers; six fire stations with a fire protection force of 178; over 350 miles
of sanitary sewers, 230 miles of storm sewers, and 180 miles of combined sewers; over 400 miles of roads;
114 parks; a District Court; and support for human services and cultural events. The City’s main sources of
revenue are property taxes, income taxes, State revenue sharing, Federal entitlement grants, and charges
for services, including utility billings.
Reporting Entity
The financial reporting entity (the City) includes all of the funds and of the primary government (i.e., the
City as legally defined), as well as its blended component unit, the Lansing Building Authority. Blended
component units, although legally separate entities, are, in substance, part of the primary government’s
operations and are included as part of the primary government. Discretely presented component units are
reported in a separate column in the combined financial statements to emphasize that they are legally
separate from the primary government and to differentiate their financial position, results of operations and
cash flows from those of the primary government. The Lansing Entertainment & Public Facilities Authority,
Tax Increment Finance Authority, and Brownfield Redevelopment Authority are reported as discretely
presented component units.
Financial Management and Control
Management of the City of Lansing is responsible for establishing and maintaining internal controls designed
to ensure that the assets of the government are protected from loss, theft, or misuse and to assure that
adequate accounting data is compiled to allow for the accurate presentation of financial statements in
conformity with generally accepted accounting principles.
To provide a reasonable basis for making these presentations, management has established a comprehensive
system of internal controls designed to reasonably ensure that assets of the City are protected from loss,
theft or misuse and to ensure that adequate accounting data are compiled to allow for the preparation of
these financial statements in conformity with generally accepted accounting principles. Such controls
include appropriate policies and procedures, ongoing risk assessment, and monitoring and review processes
which are communicated throughout City operations. Because the cost of internal controls generally should
not outweigh their benefits, the City’s framework of internal controls has been designed to provide
reasonable, rather than absolute, assurance that these objectives are met.
Because the City is a recipient of federal grant dollars, the independent audit of the financial statements of
the City of Lansing was part of a broader, federally-mandated “single audit” in conformity with the
provisions of Title 2 U.S. Code of Federal Regulations Part 200,Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The standards governing the
single audits require the independent auditor to report not only on the fair presentation of the financial
statements, but also on the audited government’s internal controls and compliance with legal requirements
involving the administration of the federal awards. These reports are available in the City’s separately-
issued Single Audit Report.
Financial results and applicable policies affecting year-end results for the fiscal year-ended June 30, 2018
are discussed in the Management Discussion and Analysis (MD&A), located immediately following the
Independent Auditor Report.
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The City of Lansing is the seat of Michigan state government and the local economy is comprised of a
diversified mix of business and industries. With Michigan State University, Davenport University, Cooley Law
School and Lansing Community College, the region has a strong higher education presence. The metro
Lansing region is also home to several national insurance company headquarters, healthcare services with
two major hospitals in the City, and a wide variety of technology firms. Manufacturing also has a strong
presence, especially in the automotive and biotech engineering sectors, with two General Motors assembly
plants and related facilities located in the City with recent investments of over $277 million in plant
expansions and retooling, $40 million in a new Logistics Center, and $162 million in a new regional stamping
plant; automotive suppliers throughout the region; production of particle accelerators, and vaccine research
and production.
The annual budget serves as the foundation for the City’s financial planning, policy-making, and control. The
City Charter requires that the Mayor submit to the City Council a proposed budget by the fourth Monday in
March. Budgetary controls and limitations are noted in the Note Disclosure Section of the financial
statements.
The City also maintains an encumbrance accounting system, whereby purchase orders amounts are deducted
from the available budget, as one technique of accomplishing budgetary control. Encumbered amounts lapse
at year-end and require Council approval to be carried forward to the ensuing fiscal year for amounts greater
than $5,000 or greater than eight months old.
Budgeting Controls
Currently under construction and scheduled for completion in 2022, Michigan State University will be home to
the $174 million Facility for Rare Isotope Beams (FRIB), which will enable scientific discovery of rare isotope
properties, will employ top nuclear physicists, and is expected to create approximately 1,000 jobs. Even
before the plant is completed, Niowave, Inc. established its operations in Lansing as commercial spinoff from
Michigan State University’s nuclear cyclotron facility. MSU has been named #1 in Nuclear Physics, ahead of
MIT, by U.S. News & World Report for five consecutive years.
Lansing serves as the cultural and commercial center for the region, and recent major investments have
revitalized downtown Lansing into an entertainment and residential destination, with renovations to historic
buildings and brand new developments. The former Lansing Board of Water Light downtown plant was
transformed in 2011 into the corporate headquarters for Accident Fund Insurance Company of America (now
AF Group), followed by Blue Cross Blue Shield of Michigan moving into Accident Fund's former downtown
location. Recent renovations of the former downtown Knapp's department store into apartments and
commercial space have attracted technology firms. Highly successful, recently-completed new
developments, including Marketplace, Midtown, and Skyview residential developments have added significant
additional residential units near and within downtown. The Outfield Ballpark Lofts development, which
opened in 2017, was the first in the nation to feature apartments located right in the outfield of a Class-A
minor league baseball stadium and has received national and international awards.
Local Economy
5
Sincerely,
Andy Schor
Mayor
Angela Bennett
Finance Director
Preparation of this comprehensive annual financial report was made possible by the dedicated service of the
entire staff of the Finance Department, as well as support by other departments. All those who contributed
to this document, especially Accounting Manager Randy Endsley, have our sincere appreciation for their
contributions made in the preparation of this report and in the financial management of the City. The 40th
consecutive GFOA award, recognizing their efforts, is well deserved indeed.
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in
Financial Reporting to the City for its Comprehensive Annual Financial Report for the fiscal year ended June
30, 2017. This was the 40th consecutive year that the City has received this prestigious award. In order to be
awarded a Certificate of Achievement, the City must publish an easily readable and efficiently organized
comprehensive annual financial report. This report satisfied both generally accepted accounting principles
and applicable legal requirements.
Contributing to the revitalization of the City's REO Town district, the Lansing Board of Water and Light
opened a $182 million cogeneration plan and relocated its headquarters to the new facility in 2013, including
the rehabilitation of a vacant train depot. Continuing that synergy, the Board of Water and Light broke
ground this year on an attractive, $28 million central substation in a key REO Town gateway corridor.
In its commitment to regional partnerships, the City of Lansing has contracted with the Lansing Economic
Area Partnership (LEAP) since 2012. This arrangement allows for a cost-effective, regional-based approach
to economic development. As testament to its success, this past year, LEAP received the prestigious
Excellence in Economic Development Award by the International Economic Development Council (IEDC). Over
the past decade, LEAP and the Lansing Economic Development Corporation have attracted more than $2.3
billion in new private investment to the City.
Awards and Acknowledgements
The Certificate of Achievement is valid for a period of one year only. We believe that our current
Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program's
requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.
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Table of Organization7
CITY OF LANSING, MICHIGAN
GFOA Certificate of Achievement
8
FINANCIAL SECTION
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INDEPENDENT AUDITORS' REPORT
December 21, 2018
Honorable Mayor and
Members of the City Council
City of Lansing, Michigan
Report on the Financial Statements
Management's Responsibility for the Financial Statements
Independent Auditors' Responsibility
We have audited the accompanying financial statements of the governmental activities, the business-
type activities, the aggregate discretely presented component units, each major fund, and the
aggregate remaining fund information of the City of Lansing, Michigan (the “City”), as of and for the
year ended June 30, 2018, and the related notes to the financial statements, which collectively
comprise the City’s basic financial statements as listed in the table of contents.
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.
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards,issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditors' judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentation of
the financial statements.
Rehmann Robson
2330 East Paris Ave. SE
Grand Rapids, MI 49546
Ph: 616.975.4100
Fx: 616.975.4400
rehmann.com
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Implementation of GASB Statement No. 75
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, the aggregate
discretely presented component units, each major fund, and the aggregate remaining fund information
of the City of Lansing, Michigan, as of June 30, 2018, and the respective changes in financial position
and, where applicable, cash flows thereof and the budgetary comparison for the General Fund for the
year then ended in conformity with accounting principles generally accepted in the United States of
America.
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis and the schedules for the pension and other postemployment
benefits plans, as listed in the table of contents, be presented to supplement the basic financial
statements. Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board who considers it to be an essential part of financial reporting
for placing the basic financial statements in an appropriate operational, economic, or historical context.
We have applied certain limited procedures to the required supplementary information in accordance
with auditing standards generally accepted in the United States of America, which consisted of inquiries
of management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Opinions
Required Supplementary Information
As described in Note 20, the City implemented the provisions of GASB Statement No. 75,Accounting and
Financial Reporting for Postemployment Benefits Other than Pensions,in the current year. Accordingly,
beginning net position of governmental activities, business-type activities, the sewage disposal system
enterprise fund, the municipal parking system enterprise fund, and nonmajor enterprise funds was
restated. Our opinion is not modified with respect to this matter.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City’s basic financial statements. The combining and individual fund financial
statements and schedules, and the introductory section and statistical tables are presented for purposes
of additional analysis and are not a required part of the basic financial statements.
12
The introductory section and statistical tables have not been subjected to the auditing procedures
applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or
provide any assurance on them.
In accordance with Government Auditing Standards,we have also issued, under separate cover, our
report dated December 21, 2018, on our consideration of the City of Lansing, Michigan’s internal control
over financial reporting and our tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements and other matters. The purpose of that report is to describe the scope
of our testing of internal control over financial reporting and compliance and the results of that testing,
and not to provide an opinion on the internal control over financial reporting or on compliance. That
report is an integral part of an audit performed in accordance with Government Auditing Standards in
considering the City's internal control over financial reporting and compliance.
Other Reporting Required by Government Auditing Standards
The combining and individual fund financial statements and schedules are the responsibility of
management and were derived from and relate directly to the underlying accounting and other records
used to prepare the basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the basic financial statements or to the basic financial statements themselves,
and other additional procedures in accordance with auditing standards generally accepted in the United
States of America. In our opinion, the combining and individual fund financial statements and schedules
are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
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MANAGEMENT'S DISCUSSION AND ANALYSIS
15
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
Financial Highlights
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Overview of the Financial Statements
The management of the City of Lansing, Michigan (“the City”) provides this narrative overview and analysis of the
financial activities of the City for the fiscal year ended June 30, 2018 for the benefit of the readers of these financial
statements. This management’s discussion and analysis (“MD&A”) is intended to assist the reader in focusing on
significant financial issues and provide an overview of the City’s financial activity. The City encourages the readers to
consider the following information here in conjunction with the financial statements taken as a whole, which follow
this section.
The City’s total long-term debt was $203.2 million at June 30, 2018, a decrease of $13.1 million, which
represents the net difference between new issuances and payments. More detailed information regarding these
activities and funds can be found in Footnote 9, Long-Term Debt of the Notes to the Financial Statements section
of the Comprehensive Annual Financial Report ("CAFR").
Total government-wide liabilities and deferred inflows of resources of the City exceeded its assets and deferred
outflows of resources at the close of the fiscal year by $227.9 million (reported as net position), an increase of
$7.9 million in net position from fiscal year 2016/2017 (as restated to take into account implementation of
Governmental Accounting Standards Board Statement 75 Accounting and Financial Reporting for Postemployment
Benefits Other than Pensions ).
This MD&A is an introduction to the City’s basic financial statements, which comprise three components: 1)
government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This
report also contains other required supplementary information in addition to the basic financial statements.
Government-Wide Financial Statements.The government-wide financial statements are designed to provide readers
with a broad overview of the City’s finances, in a manner similar to a private-sector business. The Statement of Net
Position and the Statement of Activities are two financial statements that report information about the City, as a
whole, and about its activities, which provide measurements of long-term trends that should help answer this
question: Is the City, as a whole, better off or worse off as a result of this year’s activities? Unlike the governmental
funds, the current year’s revenues and expenses are taken into account regardless of when cash is received or paid,
known as “full accrual accounting”.
Business-type activities reported net position at year-end of $215.2 million, an increase of $5.0 million during the
year. The increase was mainly attributable to the increase in sewer fund net position for the fiscal year, which is
necessary to fund future debt needs associated with U.S. Environmental Projection Agency and Michigan
Department of Environmental Quality-mandated sewer separation projects.
As of the close of the 2017/2018 fiscal year, the City’s governmental funds reported combined ending fund
balances of $37.9 million, a $4.8 million increase from fiscal year 2016/2017. Of the $37.9 million fiscal year
2017/2018 combined ending fund balance, $2.9 million is unavailable to spend (i.e. amounts tied up in inventories
and endowments), $9.0 million is legally restricted, and $9.1 million is committed for designated projects, leaving
$16.9 million unassigned.
At the end of the fiscal year, unassigned fund balance for the General Fund (including the amount internally
identified as a Budget Stabilization Fund), was $17.0 million, an increase of $1.7 million from FY 2016/2017.
Please see the “General Fund and Budgetary Highlights” section of this Management Discussion and Analysis for
further detail.
16
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
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These financial statements include two schedules that reconcile the amounts reported on the governmental fund
financial statements (modified accrual accounting) with governmental activities (full accrual accounting) on the
appropriate government-wide statements. The following summarizes the impact of transitioning from modified accrual
to full accrual accounting:
Capital assets used in governmental activities are not reported on governmental fund statements.
Certain revenues that are earned, but not available for use within the reporting period, are reported as revenues
for governmental activities, but are reported as deferred inflows of resources on the governmental fund
statements.
Other long-term assets that are not available to pay for current period expenditures are deferred in governmental
fund statements, but not deferred on the government-wide statements.
Internal service funds are reported as governmental activities, but reported as proprietary funds in the fund
financial statements.
Bond discounts and premiums in the issuance of long-term debt are reported as expenditures in governmental
fund statements, but are capitalized and amortized in the government-wide statements.
Unless due and payable, long-term liabilities, such as capital lease obligations, compensated absences, and others
only appear as liabilities in the government-wide statements.
Governmental Activities.Most of the City’s basic services are reported under this category. Property taxes,
income taxes, and intergovernmental revenues generally fund these services. The Council (legislative branch), the
District Court (judicial branch), and general operations of the executive branch departments, such as police, fire,
parks, public works, and other general staff departments fall within the governmental activities.
Business-type Activities.The City charges fees to customers to help cover all or most of the costs of certain
services it provides. Sewage collection and treatment and commercial area parking are examples of business-type
activities.
Discretely Presented Component Units.Component units are legally separate organizations for which the elected
officials of the primary government are financially accountable. The City has various discretely presented units:
the Brownfield Redevelopment Authority, the Tax Increment Finance Authority, and the Lansing Entertainment
and Public Facilities Authority.
The Statement of Activities presents information showing how the City’s net position changed during the most recent
fiscal year. All changes in net position are reported as soon as the underlying events giving rise to the change occur,
regardless of the timing of related cash flows. Therefore, revenues and expenses are reported in these statements for
some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused
vacation leave).
The Statement of Net Position and the Statement of Activities report three activities, as follows:
The Statement of Net Position presents all of the City’s assets, deferred outflows of resources, liabilities and deferred
inflows of resources with the difference between the these categories reported as “net position”. Over time,
increases and decreases in net position are an indicator of whether the City’s long-term financial position is improving
or deteriorating, but can also change as a result of governmental accounting standards.
17
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
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Required Supplementary Information
Following the basic financial statements is additional Required Supplementary Information that further explains and
supports the information in the financial statements. The Required Supplementary Information includes required
pension and other postemployment benefit supplementary information.
Capital outlay spending in excess of capitalization thresholds are recorded as capital assets on the government-
wide statements, but are reported as expenditures on the governmental fund statements.
Bond and note proceeds result in liabilities on the government-wide statements, but are recorded as other
financing sources on the governmental fund statements.
Certain other outflows, such as debt service principal payments, represent decreases in liabilities on the
government-wide statements, but are reported as expenditures on the governmental fund statements.
The Notes to the Financial Statements provide additional information that is essential to a full understanding of the
data provided in the government-wide and fund financial statements.
Fund Financial Statements.The City’s major funds are identified as the General Fund, Sewage Disposal System Fund,
and Municipal Parking System Fund. Data for all other funds, termed "nonmajor funds", are combined into a single,
aggregated presentation. A fund is a fiscal and accounting entity with a self-balancing set of accounts that the City
uses to keep track of specific sources of funding and spending for a particular purpose.
Pension and other postemployment benefits liabilities and related deferrals relating to governmental funds are
only reported in the government-wide statements.
Governmental funds.Most of the City’s basic services are reported in the governmental funds, which focus on
how money flows into and out of those funds and the balances left at year-end that are available for future
spending. The governmental fund financial statements provide a detailed short-term view of the City’s general
government operations and the basic services it provides. Governmental fund information helps determine
whether there are greater or fewer financial resources that can be spent in the near future to finance the City’s
programs. These funds are reported using modified accrual accounting, which measures cash and all other
financial assets that can readily be converted to cash. Governmental funds include the General Fund and special
revenue, capital projects, debt service, and permanent funds.
Proprietary funds.When the City charges customers for the services it provides, whether to outside customers or
to other agencies within the City, these services are generally reported in proprietary funds. Proprietary funds
(enterprise and internal service) utilize full accrual accounting; the same method used by private sector
businesses. Enterprise funds report activities that provide supplies and services to the general public. Examples
are the Sewage Disposal Fund and the Municipal Parking Fund. Internal service funds are reported as governmental
activities on the government-wide statements.
Fiduciary Funds.The City acts as a trustee or fiduciary, for its employee pension and other postemployment
benefit plans. It is also responsible for other assets that, because of a trust arrangement, can be used only for the
trust beneficiaries. The City’s fiduciary activities are reported in separate Statements of Fiduciary Net Position
and Changes in Fiduciary Net Position. These funds, which include pension and other postemployment benefit
funds, are reported using full accrual accounting. The government-wide statements exclude fiduciary fund
activities and balances because these assets are restricted in purpose and do not represent spendable assets of
the City to finance its operations.
18
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
Net Position
Governmental Activities Business-type Activities Total
2018 2017 2018 2017 2018 2017
Current and other assets 60,223,657$ 55,942,975$ 84,766,314$ 81,676,247$ 144,989,971$ 137,619,222$
Capital assets, net 183,112,603 188,807,551 354,396,144 362,595,277 537,508,747 551,402,828
Total assets 243,336,260 244,750,526 439,162,458 444,271,524 682,498,718 689,022,050
Deferred outflows of
resources 36,024,546 48,237,654 6,400,785 4,877,793 42,425,331 53,115,447
Long-term debt outstanding 47,341,836 51,709,198 155,876,426 164,568,715 203,218,262 216,277,913
Other liabilities 638,249,867 332,505,634 72,354,918 30,502,474 710,604,785 363,008,108
Total liabilities 685,591,703 384,214,832 228,231,344 195,071,189 913,823,047 579,286,021
Deferred inflows of
resources 36,845,515 25,036,395 2,172,678 2,682,266 39,018,193 27,718,661
Net position
Net investment in
capital assets 148,263,240 149,533,948 227,127,434 224,161,744 375,390,674 373,695,692
Restricted 15,189,723 10,993,950 1,886,620 1,818,671 17,076,343 12,812,621
Unrestricted (deficit) (606,529,375) (276,790,945) (13,854,833) 25,415,447 (620,384,208) (251,375,498)
Total net position (443,076,412)$ (116,263,047)$ 215,159,221$ 251,395,862$ (227,917,191)$ 135,132,815$
The largest component of the City’s net position reflects its net investment in capital assets (e.g. land, buildings,
equipment, infrastructure, and others). Restricted net position is the next largest component, which represents
amounts subject to external restrictions such as bond covenants, City Charter, State legislation or Constitutional
provision. The remaining portion, unrestricted net position are resources that may be used at the City’s discretion, but
often have limitations based on policy action. The large decreases in net position in FY 2018 are due to the
implementation of Governmental Accounting Standards Board (GASB) Statement 75 Accounting and Financial
Reporting for Postemployment Benefits Other than Pensions.
The City’s combined net position increased $7.9 million over the course of this fiscal year’s operations, and came to a
total of $(227.9) million. Net position of governmental activities increased $2.9 million, and business-type activities
increased $5.0 million. Explanations for those changes are described below under the governmental activities and
business-type activities sections of this Management Discussion and Analysis.
Government-Wide Financial Analysis
Other Supplementary Information
Other supplementary information includes combining financial statements for nonmajor governmental, proprietary,
and fiduciary funds. These funds are added together, by fund type, and presented in single columns in the basic
financial statements, but are not reported individually, as with major funds, on the governmental fund financial
statements.
19
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
Governmental Activities Business-type Activities Total
2018 2017 2018 2017 2018 2017
Program revenues
Charges for services 12,727,522$ 13,293,904$ 48,926,712$ 47,889,559$ 61,654,234$ 61,183,463$
Operating grants 28,983,936 25,157,629 1,603,942 1,391,326 30,587,878 26,548,955
Capital grants 855,760 63,488 - 100,000 855,760 163,488
General revenues
Taxes 78,028,764 76,262,288 - - 78,028,764 76,262,288
State shared revenues 14,748,491 14,412,644 - - 14,748,491 14,412,644
Unrestricted grants
and contributions 24,671,167 23,695,900 - - 24,671,167 23,695,900
Unrestricted investment
earnings 216,239 125,539 - - 216,239 125,539
Gain on sale of
capital assets - 135,270 - - - 135,270
Total revenues 160,231,879 153,146,662 50,530,654 49,380,885 210,762,533 202,527,547
Expenses
General government 16,995,976 21,778,154 - - 16,995,976 21,778,154
Public safety 87,352,251 91,829,441 - - 87,352,251 91,829,441
Public works 26,485,877 28,983,891 - - 26,485,877 28,983,891
Recreation and culture 8,302,243 9,441,519 - - 8,302,243 9,441,519
Community development 16,150,417 12,349,663 - - 16,150,417 12,349,663
Interest on long-term debt 1,137,561 1,201,846 - - 1,137,561 1,201,846
Sewage disposal system - - 28,552,143 27,567,228 28,552,143 27,567,228
Municipal parking system - - 9,888,246 6,866,747 9,888,246 6,866,747
Cemetery - - 1,379,877 886,579 1,379,877 886,579
Golf - - (372,775) 802,564 (372,775) 802,564
Garbage and rubbish
collection - - 3,101,893 1,543,380 3,101,893 1,543,380
Recycling - - 3,859,496 3,667,899 3,859,496 3,667,899
Total expenses 156,424,325 165,584,514 46,408,880 41,334,397 202,833,205 206,918,911
Change in net position,
before transfers 3,807,554 (12,437,852) 4,121,774 8,046,488 7,929,328 (4,391,364)
Transfers (912,186) (746,209) 912,186 746,209 - -
Change in net position 2,895,368 (13,184,061) 5,033,960 8,792,697 7,929,328 (4,391,364)
Net position:
Beginning of year (116,263,047) (103,078,986) 251,395,862 242,603,165 135,132,815 139,524,179
Restatement for
implementation of
GASB 75 (329,708,733) - (41,270,601) - (370,979,334) -
End of year (443,076,412)$ (116,263,047)$ 215,159,221$ 251,395,862$ (227,917,191)$ 135,132,815$
The following condensed financial information was derived from the government-wide Statement of Activities and
reflects how the City’s net position changed during the fiscal year:
Change in Net Position
20
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
Governmental Activities. The following chart depicts revenues of the governmental activities for the fiscal year:
In total, governmental activity revenues increased $7.1 million from FY 2016/2017 to FY 2017/2018, with trends of the
major revenue categories as follows:
Charges for services are program-specific revenues generated for services provided. Governmental activity charges for
services decreased $0.6 million from FY 2016/2017 to FY 2017/2018.
Income taxes comprised 24.1%, or $38.5 million, of governmental activity revenue, the full amount of which is revenue
to the General Fund. This represents a $2.8 million, or 7.7%, increase from fiscal year 2016/2017. Local income tax
rates are prescribed by State law, and limited in Lansing’s case to 1% of resident income and 0.5% of the income of
persons working in the City, but living outside of its corporate boundaries.
Unrestricted grants and contributions (including state shared sales tax revenue) comprised 24.6%, or $39.4 million, of
revenues, a $1.3 million, or 3.4% increase from fiscal year 2016/2017, resulting from the above-referenced change in
classification for state reimbursement of state-wise personal property tax phase-out to intergovernmental revenue. A
little more than one-third of this category, $14.7 million, is attributed to State revenue sharing, an amount distributed
to municipalities by the State of Michigan by formula allocation of portions of the State sales tax.
Property taxes and special assessments comprised the largest portion of governmental activity revenue at 24.7%, or
$39.6 million, a $1.0 million, or 2.5% decrease from fiscal year 2016/2017, due to a change in classification for state
reimbursement for a state-wide personal property tax phase-out to intergovernmental revenue.
Restricted operating and capital grants and contributions made up $29.8 million, or 18.6% of governmental activity
revenue for fiscal year 2017/2018, a $4.6 million, or 18.3% increase from fiscal year 2016/2017. This increase was
largely attributable to an increase in State gas and weight tax revenue distributions.
Income tax
24.1%
Charges for services
7.9%
Operating grants
18.1%Capital grants
0.5%State shared revenues
9.2%
Unrestricted grants and
contributions
15.4%
Other revenues
0.1%
Property tax and special
assessments
24.7%
Revenues - Governmental Activities
Fiscal Year Ending June 30, 2018
21
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
Public works comprises the next largest component of governmental activity expenses, at 16.9%, or $26.5 million, a
8.6% ($2.5 million) decrease from FY 2016/2017, due to largely to a decrease in signalization and road projects from
FY 2016/2017 due some road project delays.
At $17.0 million, general government expenses, representing general and internal City services, comprised 10.9% of
governmental activities. This category increased by $1.9 million in operational costs, but experienced a $4.8 million,
or 22.0% overall decrease from FY 2016/2017, due to significant decreases in net pension and Other Post Employment
Benefits (retiree healthcare) expenses.
Community development represented 10.3% expenses. This category increased $3.8 million, or 30.8% from FY
2016/2017, due mainly to a change in Code Compliance operations from the Fire Department (public safety) to the
Economic Development and Planning Department (community development).
As the City completed the fiscal year, its governmental funds reported combined ending fund balances of $37.9
million, a $4.8 million increase from fiscal year 2016/2017. Of the $37.9 million fiscal year 2017/2018 combined
ending fund balance, $2.9 million is unavailable to spend (i.e. amounts tied up in inventories and endowments), $9.0
million is legally restricted, and $9.1 million is committed for designated projects, leaving $16.8 million unassigned.
Business-type Activities.Net position of the business-type activities increased by $5.0 million from FY 2016/2017 to
$215.2 million. The increase was mainly attributable to the increase in sewer fund net position for the fiscal year,
which is necessary to fund future debt needs associated with U.S. Environmental Projection Agency and Michigan
Department of Environmental Quality-mandated sewer separation projects.
Financial Analysis of the City’s Funds
The following chart depicts expenses of the governmental activities for the fiscal year:
The largest component of governmental activities was public safety, accounting for 55.9%, or $87.4 million, a 4.9%
($4.5 million) decrease from FY 2016/2017, resulting from a change in Code Compliance operations from the Fire
Department (public safety) to the Economic Development and Planning Department (community development) and a
reduction in public safety grants.
Total expenses for governmental activities decreased $9.2 million, 5.5%, from FY 2016/2017 to FY 2017/2018, with
trends of the major revenue categories as follows:
General government
10.9%
Public safety
55.9%
Public works
16.9%
Recreation and culture
5.3%
Community development
10.3%
Interest on long-term
debt
0.7%
Expenses - Governmental Activities
Fiscal Year Ending June 30, 2018
22
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
The unassigned fund balance for the General Fund, (including the amount internally identified as a Budget
Stabilization Fund) was $17.0 million, an increase of $1.7 million from FY 2016/2017, which is further described in the
General Fund Budgetary Highlights section.
The FY 2017/2018 General Fund budget was adopted as a balanced budget, based on projected revenues, with a
$500,000 addition to reserves (fund balance). The City budgeted a vacancy factor in its General Fund to account for
anticipated positions that would become vacant during the course of the year. Because vacancies that will occur
within each department cannot be projected, the vacancy factor is budgeted as a single line item of the General Fund
and allocated to various departments through a budget amendment during the year. During the course of the fiscal
year, the General Fund revenue budget was amended from $129.5 million to $130.3 million to recognize additional
income tax, licensing, and State Revenue Sharing revenues, as well as to appropriate additional funds for license
processing needs, playground equipment, vehicle needs, and a $500,000 supplementary pension contribution.
General Fund Budgetary Highlights
Sewage Disposal Fund
Capital Assets.At the end of the fiscal year 2018, the City had invested $537.5 million, net of accumulated
depreciation, in a broad range of capital assets (see the table below). Additional information regarding the City's
capital assets can be found in Footnote 6 of the of the Notes to the Financial Statements section of the CAFR.
Municipal Parking Fund
The Municipal Parking Fund net position decreased $1.4 million to $7.8 million. Unrestricted net position decreased
$7.5 million, from $5.5 million to a deficit $2.0 million. The decrease in unrestricted net position was the result of
the implementation of Governmental Accounting Standards Board (GASB) Statement 75 Accounting and Financial
Reporting for Postemployment Benefits Other than Pensions in the current year.
General Fund reserves, combined with the Budget Stabilization Fund (combined for financial statement purposes)
increased $1.6 million from FY 2016/2017 from $15.7 million to $17.3 million. Unassigned fund balance increased $1.7
million, or 10.6% from fiscal year 2016/2017. The $1.7 million increase in total General Fund reserves was mostly
attributable to expenditures coming in under budget by $1.5 million, largely due to position vacancies that occurred
during the fiscal year.
Net position increased $7.1 million to $222.8 million in FY 2017/2018. Unrestricted net position decreased $21.3
million, from $27.0 million to $5.7 million. The decrease in unrestricted net position was the result of the
implementation of Governmental Accounting Standards Board (GASB) Statement 75 Accounting and Financial
Reporting for Postemployment Benefits Other than Pensions in the current year.
23
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
Capital Assets (Net of Depreciation)
Governmental Activities Business-type Activities Total
2018 2017 2018 2017 2018 2017
Land 25,302,787$ 25,880,189$ 13,292,491$ 13,292,491$ 38,595,278$ 39,172,680$
Land improvements 11,799,044 10,968,327 14,265,778 11,006,206 26,064,822 21,974,533
Buildings and improvements 50,058,975 54,462,360 84,746,261 88,022,794 134,805,236 142,485,154
Equipment 7,559,948 7,291,993 1,187,130 1,203,507 8,747,078 8,495,500
Infrastructure 88,391,849 90,204,682 234,662,935 240,205,647 323,054,784 330,410,329
Construction in progress - - 6,241,549 8,864,632 6,241,549 8,864,632
Total capital assets, net 183,112,603$ 188,807,551$ 354,396,144$ 362,595,277$ 537,508,747$ 551,402,828$
2018 2017
Governmental activities
General obligation bonds 15,330,000$ 18,065,000$
Installment purchase contracts 12,289,396 13,757,531
Loans 7,476,545 7,728,428
Compensated absences 9,957,856 9,725,419
Workers compensation 2,292,221 2,417,780
Deferred amounts:
For issuance discounts (59,321) (66,154)
For issuance premiums 55,139 81,194
Total governmental activities 47,341,836 51,709,198
Business-type activities
General obligation bonds 137,182,606 144,016,807
Revenue bonds 15,625,000 17,175,000
Installment purchase
agreements 808,500 1,029,723
Compensated absences 871,120 794,830
Deferred amounts:
For issuance discounts (490,338) (563,347)
For issuance premiums 1,879,538 2,115,702
Total business-type activities 155,876,426 164,568,715
Total outstanding debt 203,218,262$ 216,277,913$
The decrease in the above-noted capital asset amounts from the prior year is due to depreciation; no significant asset
sales or disposals occurred during FY 2018.
Outstanding Debt
Debt Administration.The City, along with the Lansing Building Authority (LBA), a blended component unit of the City,
is empowered by law to authorize, issue, and sell debt obligations. Limited tax and unlimited tax general obligation
bonds are backed by the full faith and credit of the City. The City also issues revenue-dedicated bonded debt, whose
payment for principal and interest comes solely out of funds that receive legally-restricted revenues. The Sewage
Disposal fund has the City’s only dedicated revenue bonds currently outstanding. LBA’s bonds financed the
construction of parking structures, golf courses, and other related improvements. Revenues derived from user fees
from persons using parking and golf facilities fund the debt service requirements for related improvements, but they
are also backed by a limited tax pledge.
24
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
Economic Condition and Outlook
Employment levels and personal income in the City continued to increase in FY 2016/2017, resulting in increased
income tax revenue. Property values increased; however growth in corresponding property tax revenue is limited by
State of Michigan Statute to the rate of inflation for property that does not change hands. Lansing's financial picture
as a whole has stabilized over the past few years and continues to improve. The 2017/2018 fiscal year resulted in a
$1.7 million addition to General Fund unassigned reserves, bringing unassigned General Fund reserves up to $17.0
million, or 13.2% of General Fund expenditures, within the City's 12%-15% fund balance policy. However, significant
challenges remain in the longer-term. Going forward, State-imposed limitations on municipal revenues, most notably
those on property tax growth, will continue to constrain resources, which in context of projected increases in pension,
healthcare, and infrastructure needs, will present budgetary challenges. Subsequent to the FY 2018 year-end, an
income tax was adopted by the City of East Lansing, which will begin January 1, 2019, and which impacts income tax
revenues for the City of Lansing for its residents that work in East Lansing. While that potential was anticipated for FY
2019 and is not expected to result in any budgetary adjustments for FY 2019, the East Lansing income tax is expected
to result in a reduction in Lansing's income tax revenues by about $800,000 annually.
Strengthening the City's economic base, building back up General Fund reserves, and addressing long-term pension and
retiree healthcare obligations are top priorities. The City continues to work diligently with its employees and unions
to address the ongoing structural imbalance between projected revenues and long-term pension and retiree health
care costs and has been successful in achieving significant agreements over the past several years on a wide range of
cost-saving measures. The City, in conjunction with the Mayor-appointed Financial Health Team engaged a consultant
for studies of its long-term pension and retiree healthcare obligations, and those studies were completed in FY 2018.
More detailed information regarding these activities and funds can be found in Footnote 9 of the of the Notes to the
Financial Statements section of the CAFR.
This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general
overview of the City’s finances and to demonstrate the City’s accountability for the money it receives. Copies of this
financial report, as well as other financial reports, are available on the City's website, www.lansingmi.gov. If you
have any questions about this report or need additional financial information, please feel free to contact the Finance
Department at (517) 483-4500.
Requests for Information
The City continues to experience significant economic development and national recognition of its economic
development efforts and accomplishments. For more information, please see the "Local Economy" section of the
Transmittal Letter.
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26
BASIC FINANCIAL STATEMENTS
27
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28
GOVERNMENT-WIDE FINANCIAL STATEMENTS
29
Statement of Net Position
June 30, 2018
Governmental Business-type Component
Activities Activities Totals Units
Assets
Cash and investments 36,432,307$ 51,884,752$ 88,317,059$ 5,181,761$
Receivables, net 23,281,611 28,694,540 51,976,151 1,233,225
Internal balances (1,221,785) 1,221,785 - -
Due from primary government - - - 1,375
Inventories, prepaids and other assets 1,731,524 396,664 2,128,188 143,243
Restricted cash and investments - 2,568,573 2,568,573 4,357,726
Capital assets not being depreciated 25,302,787 19,534,040 44,836,827 -
Capital assets being depreciated, net 157,809,816 334,862,104 492,671,920 1,008
Total assets 243,336,260 439,162,458 682,498,718 10,918,338
Deferred outflows of resources
Deferred charge on refunding 84,687 4,605,828 4,690,515 2,434,795
Deferred pension amounts 35,939,859 1,794,957 37,734,816 -
Total deferred outflows of resources 36,024,546 6,400,785 42,425,331 2,434,795
Liabilities
Accounts payable and
accrued liabilities 11,982,594 1,333,264 13,315,858 2,274,801
Accrued interest payable:
Due within one year 341,719 1,016,266 1,357,985 341,347
Due in more than one year - 1,850,892 1,850,892 3,677,929
Unearned revenue 855,979 171,255 1,027,234 382,017
Due to component units - 1,375 1,375 -
Long-term debt:
Due within one year 5,036,772 14,160,771 19,197,543 305,534
Due in more than one year 42,305,064 141,715,655 184,020,719 41,794,641
Net pension liability (due in more than one year)260,413,220 29,676,728 290,089,948 -
Net other postemployment benefit liability (due in more
than one year) 364,656,355 38,305,138 402,961,493 -
Total liabilities 685,591,703 228,231,344 913,823,047 48,776,269
Deferred inflows of resources
Deferred pension amounts 12,181,027 698,945 12,879,972 -
Deferred other postemployment benefit amounts 24,664,488 1,473,733 26,138,221 -
Total deferred inflows of resources 36,845,515 2,172,678 39,018,193 -
Net position
Net investment in capital assets 148,263,240 227,127,434 375,390,674 1,008
Restricted for:
Public safety 1,496,968 - 1,496,968 -
Public works 8,473,317 - 8,473,317 -
Community development 3,381,934 - 3,381,934 -
Debt service - 1,734,755 1,734,755 -
Capital projects - 151,865 151,865 -
Endowments (nonexpendable) 1,837,504 - 1,837,504 -
Unrestricted (deficit) (606,529,375) (13,854,833) (620,384,208) (35,424,144)
Total net position (443,076,412)$ 215,159,221$ (227,917,191)$ (35,423,136)$
The accompanying notes are an integral part of the financial statements.
CITY OF LANSING, MICHIGAN
Primary Government
30
Statement of Activities
For the Year Ended June 30, 2018
Operating Capital Net
Charges Grants and Grants and (Expense)
Functions / Programs Expenses for Services Contributions Contributions Revenues
Primary government
Governmental activities:
General government 16,995,976$ 7,038,702$ 2,741,608$ -$ (7,215,666)$
Public safety 87,352,251 4,140,682 3,751,209 - (79,460,360)
Public works 26,485,877 716,322 15,544,442 855,760 (9,369,353)
Recreation and culture 8,302,243 831,816 114,979 - (7,355,448)
Community development 16,150,417 - 6,831,698 - (9,318,719)
Interest on long-term debt 1,137,561 - - - (1,137,561)
Total governmental activities 156,424,325 12,727,522 28,983,936 855,760 (113,857,107)
Business-type activities:
Sewage disposal system 28,552,143 35,107,570 500,884 - 7,056,311
Municipal parking system 9,888,246 7,436,552 1,081,224 - (1,370,470)
Cemetery 1,379,877 351,204 - - (1,028,673)
Golf (372,775) 179,464 2,715 - 554,954
Garbage and rubbish collection 3,101,893 2,072,454 - - (1,029,439)
Recycling 3,859,496 3,779,468 19,119 - (60,909)
Total business-type activities 46,408,880 48,926,712 1,603,942 - 4,121,774
Total primary government 202,833,205$ 61,654,234$ 30,587,878$ 855,760$ (109,735,333)$
Component units
Brownfield redevelopment
authority 1,872,065$ -$ 76,012$ -$ (1,796,053)$
Tax increment finance
authority 2,433,526 - - - (2,433,526)
Lansing entertainment &
public facilities authority 10,811,604 9,586,265 1,411,050 - 185,711
Total component units 15,117,195$ 9,586,265$ 1,487,062$ -$ (4,043,868)$
continued…
CITY OF LANSING, MICHIGAN
Program Revenues
31
Statement of Activities
For the Year Ended June 30, 2018
Governmental Business-type Component
Activities Activities Totals Units
Changes in net position
Net (expense) revenues (113,857,107)$ 4,121,774$ (109,735,333)$ (4,043,868)$
General revenues:
Property taxes 39,573,468 - 39,573,468 5,733,352
Income taxes 38,455,296 - 38,455,296 -
State shared revenues 14,748,491 - 14,748,491 -
Grants and contributions not
restricted to specific programs 24,671,167 - 24,671,167 -
Unrestricted investment earnings 216,239 - 216,239 16,661
Transfers - internal activities (912,186) 912,186 - -
Total general revenues and transfers 116,752,475 912,186 117,664,661 5,750,013
Change in net position 2,895,368 5,033,960 7,929,328 1,706,145
Net position, beginning of year, as restated (445,971,780) 210,125,261 (235,846,519) (37,129,281)
Net position, end of year (443,076,412)$ 215,159,221$ (227,917,191)$ (35,423,136)$
concluded
The accompanying notes are an integral part of the financial statements.
CITY OF LANSING, MICHIGAN
Primary Government
32
FUND FINANCIAL STATEMENTS
33
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34
CITY OF LANSING, MICHIGAN
Governmental Fund Financial Statements
Major Fund
General Fund - This is the general operating fund of the City. It is used to account for and report
all financial resources not accounted for and reported in another fund.
Nonmajor Funds
Nonmajor governmental funds are presented, by fund type, within the Combining and Individual
Fund Financial Statements and Schedules section of this report as noted in the table of contents.
35
CITY OF LANSING, MICHIGAN
Balance Sheet
Governmental Funds
June 30, 2018
Nonmajor
Governmental
General Funds Totals
Assets
Cash and cash equivalents 2,480,337$ 181,739$ 2,662,076$
Equity in pooled cash and investments 9,381,498 18,202,782 27,584,280
Accounts receivable, net 8,663,232 308,638 8,971,870
Taxes receivable, net 166,977 - 166,977
Special assessments receivable - 237,499 237,499
Loans receivable - 1,224,460 1,224,460
Accrued interest receivable - 2,113,196 2,113,196
Due from other governments, net 5,051,411 4,964,156 10,015,567
Inventories 17,660 967,676 985,336
Prepaids 21,777 37,309 59,086
Total assets 25,782,892$ 28,237,455$ 54,020,347$
Liabilities
Accounts payable 3,375,118$ 1,630,069$ 5,005,187$
Deposits payable - 89,147 89,147
Accrued payroll 1,810,790 72,230 1,883,020
Indemnity bonds - 43,867 43,867
Due to other funds 272,825 752,358 1,025,183
Advances from other funds - 196,602 196,602
Due to other governments 996,663 571,506 1,568,169
Unearned revenue 42,124 813,855 855,979
Other 731,068 - 731,068
Total liabilities 7,228,588 4,169,634 11,398,222
Deferred inflows of resources
Unavailable revenues - fees 1,227,792 - 1,227,792
Unavailable revenues - loans and accrued interest receivable - 3,337,656 3,337,656
Unavailable revenues - special assessments - 196,158 196,158
Total deferred inflows of resources 1,227,792 3,533,814 4,761,606
Fund balances
Nonspendable 39,437 2,842,489 2,881,926
Restricted - 9,009,438 9,009,438
Committed 283,815 8,837,341 9,121,156
Unassigned (deficit) 17,003,260 (155,261) 16,847,999
Total fund balances 17,326,512 20,534,007 37,860,519
Total liabilities, deferred inflows of
resources and fund balances 25,782,892$ 28,237,455$ 54,020,347$
The accompanying notes are an integral part of the financial statements.
36
CITY OF LANSING, MICHIGAN
Reconciliation
Fund Balances of Governmental Funds
to Net Position of Governmental Activities
June 30, 2018
Fund balances - total governmental funds 37,860,519$
Capital assets not being depreciated 25,302,787
Capital assets being depreciated, net 157,809,816
Capital assets accounted for in internal service funds, net (12,215,609)
Deferred ambulance fees receivable 889,268
Deferred nuisance fees receivable 316,024
Deferred loans receivable 1,224,460
Deferred long-term interest receivable 2,113,196
Deferred long-term special assessments receivable 196,158
Deferred long-term taxes and tax settlement receivables 22,500
13,087,767
Bonds, loans and leases payable, and deferred discounts/premiums (32,060,054)
Deferred charge on refunding 84,687
Accrued interest on bonds, loans and leases payable (322,661)
Compensated absences and other long-term liabilities (11,410,039)
Net pension liability (260,413,220)
Deferred outflows related to the net pension liability 35,939,859
Deferred inflows related to the net pension liability (12,181,027)
Net other postemployment benefit liability (364,656,355)
Deferred inflows related to the net other postemployment benefit liability (24,664,488)
Net position of governmental activities (443,076,412)$
The accompanying notes are an integral part of the financial statements.
Certain pension and other postemployment benefit-related amounts, such as the net pension and other
postemployment benefit liabilities and deferred amounts are not due and payable in the current period or do
not represent current financial resources and therefore are not reported in the funds.
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not financial resources and therefore are not reported in
the funds.
Because the focus of governmental funds is on short-term financing, some assets will not be available to pay
for current expenditures. Those assets (i.e., receivables) are offset by deferred inflows of resources in the
governmental funds and, therefore, are not included in fund balance.
Internal service funds are used by management to charge the costs of certain equipment maintenance to
individual funds. The assets and liabilities of the internal service funds are included in governmental
activities in the statement of net position.
Long-term liabilities and related deferred outflows are not due and payable in the current period and
therefore are not reported in the funds.
37
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2018
Nonmajor
Governmental
General Funds Totals
Revenues
Property taxes and special assessments 38,485,677$ 1,143,628$ 39,629,305$
Income taxes 38,455,296 - 38,455,296
Licenses and permits 2,113,824 - 2,113,824
Intergovernmental 18,851,971 22,996,101 41,848,072
Charges for services 9,268,198 3,164,572 12,432,770
Fines and forfeits 2,134,860 466,203 2,601,063
Interest and rents 154,898 129,267 284,165
Contributions 20,688,205 10,000 20,698,205
Other revenues 209,605 1,194,107 1,403,712
Total revenues 130,362,534 29,103,878 159,466,412
Expenditures
Current expenditures:
General government 18,838,243 3,442,993 22,281,236
Public safety 74,307,165 1,551,900 75,859,065
Public works 11,087,884 - 11,087,884
Highways and streets - 10,104,034 10,104,034
Recreation and culture 8,236,872 - 8,236,872
Community development 8,302,397 7,645,107 15,947,504
Debt service:
Principal 1,725,169 1,896,884 3,622,053
Interest 494,028 455,290 949,318
Capital outlay - 5,146,742 5,146,742
Total expenditures 122,991,758 30,242,950 153,234,708
Revenues over (under) expenditures 7,370,776 (1,139,072) 6,231,704
Other financing sources (uses)
Transfers in 100,000 7,621,661 7,721,661
Transfers out (5,970,506) (3,313,341) (9,283,847)
Proceeds from sale of capital assets 128,976 - 128,976
Total other financing sources (uses)(5,741,530) 4,308,320 (1,433,210)
Net changes in fund balances 1,629,246 3,169,248 4,798,494
Fund balances, beginning of year 15,697,266 17,364,759 33,062,025
Fund balances, end of year 17,326,512$ 20,534,007$ 37,860,519$
The accompanying notes are an integral part of the financial statements.
CITY OF LANSING, MICHIGAN
38
Reconciliation
Net Changes in Fund Balances of Governmental Funds
to Change in Net Position of Governmental Activities
For the Year Ended June 30, 2018
Net changes in fund balances - total governmental funds 4,798,494$
Capital assets purchased/constructed 4,565,390
Donated capital assets 829,383
Depreciation expense (10,159,901)
Loss on sale of capital assets (513,324)
Proceeds from sale of capital assets (128,976)
Change in deferred ambulance fees receivable 443,691
Change in deferred nuisance fees receivable (216,865)
Change in deferred loans receivable (1,980)
Change in deferred long-term interest receivable (242,421)
Change in deferred special assessments receivable (46,341)
Net operating loss from governmental activities in internal service funds (106,412)
Gain on sale of capital assets from governmental internal service funds 47,550
Interest expense from governmental internal service funds (118,129)
Transfers in reported in governmental internal service funds 650,000
Principal payments on long-term liabilities 3,622,053
Change in estimated liability for workers' compensation 125,559
Change in accrued interest payable on long-term liabilities (59,271)
Amortization of issuance premiums and discounts, and deferred charge on refunding (10,843)
Change in the accrual for compensated absences (228,110)
Change in the net pension liability and related deferred amounts (7,423,999)
Change in the net other postemployment benefit liability and related deferred amounts 7,069,820
Change in net position of governmental activities 2,895,368$
The accompanying notes are an integral part of the financial statements.
Debt proceeds provide current financial resources to governmental funds in the period issued, but issuing
debt increases long-term liabilities in the statement of net position. Repayment of debt principal is an
expenditure in the funds, but the repayment reduces long-term liabilities in the statement of net position.
Certain expenditures are reported in governmental funds that reduce long-term liabilities for purposes of the
statement of net position.
Some expenses reported in the statement of activates do not require the use of current financial resources
and therefore are not reported as expenditures in the funds.
CITY OF LANSING, MICHIGAN
Amounts reported for governmental activities in the statement of activities are different because:
Governmental funds report capital outlay as expenditures. However, in the statement of activities, the cost
of those assets is allocated over their estimated useful lives as depreciation expense.
Revenues in the statement of activities that do not provide current financial resources are not reported as
revenues in the funds, but rather are deferred to subsequent fiscal years.
Internal service funds are used by management to charge the costs of certain equipment maintenance to
individual funds. The net increase (decrease) in the net position of the internal service funds is reported
with governmental activities.
39
CITY OF LANSING, MICHIGAN
Statement of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual - General Fund
For the Year Ended June 30, 2018
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Property taxes 40,505,000$ 39,405,000$ 38,485,677$ (919,323)$
Income taxes 35,600,000 36,400,000 38,455,296 2,055,296
Licenses and permits 1,906,500 1,969,500 2,113,824 144,324
Intergovernmental 15,764,500 16,889,500 18,851,971 1,962,471
Charges for services 10,077,900 10,099,900 9,268,198 (831,702)
Fines and forfeits 2,961,600 2,961,600 2,134,860 (826,740)
Interest and rents 38,500 38,500 154,898 116,398
Contributions 22,300,000 22,374,355 20,688,205 (1,686,150)
Other revenues 351,000 153,000 209,605 56,605
Total revenues 129,505,000 130,291,355 130,362,534 71,179
Expenditures
General government:
Attorney's office 2,026,500 1,956,500 1,869,415 (87,085)
City clerk 1,062,800 1,147,800 1,129,514 (18,286)
Council 698,000 709,828 677,783 (32,045)
Courts 6,579,900 6,579,900 6,187,312 (392,588)
Internal audit 180,700 183,700 181,964 (1,736)
Finance 5,806,300 5,101,500 5,033,567 (67,933)
Library rental 165,000 165,000 138,867 (26,133)
Human resources 2,254,000 2,194,000 2,159,045 (34,955)
Mayor 1,044,600 1,104,600 1,063,146 (41,454)
Office of community media 437,400 437,400 397,630 (39,770)
Budgetary savings from attrition (500,000) - - -
Total general government 19,755,200 19,580,228 18,838,243 (741,985)
Public safety:
Police 41,295,000 41,307,460 41,256,596 (50,864)
Fire 34,983,000 32,974,439 33,050,569 76,130
Total public safety 76,278,000 74,281,899 74,307,165 25,266
Public works 11,115,500 11,115,500 11,087,884 (27,616)
Recreation and culture 8,350,300 8,250,300 8,236,872 (13,428)
continued…
40
CITY OF LANSING, MICHIGAN
Statement of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual - General Fund
For the Year Ended June 30, 2018
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Expenditures (concluded)
Community development:
Economic development and planning 1,129,500$ 5,002,136$ 4,701,276$ (300,860)$
Neighborhood and community engagement 481,400 484,800 441,347 (43,453)
Human relations / community services 1,332,700 1,282,700 1,191,644 (91,056)
Human services / community support 1,600,000 2,249,692 1,968,130 (281,562)
Total community development 4,543,600 9,019,328 8,302,397 (716,931)
Debt service:
Principal 1,725,200 1,725,200 1,725,169 (31)
Interest 495,900 495,900 494,028 (1,872)
Total debt service 2,221,100 2,221,100 2,219,197 (1,903)
Total expenditures 122,263,700 124,468,355 122,991,758 (1,476,597)
Revenues over expenditures 7,241,300 5,823,000 7,370,776 1,547,776
Other financing sources (uses)
Transfers in 100,000 271,000 100,000 (171,000)
Transfers out (6,841,300) (6,152,800) (5,970,506) (182,294)
Proceeds from sale of capital assets - 125,000 128,976 3,976
Total other financing sources (uses)(6,741,300) (5,756,800) (5,741,530) 15,270
Net changes in fund balance 500,000 66,200 1,629,246 1,563,046
Fund balance, beginning of year 15,697,266 15,697,266 15,697,266 -
Fund balance, end of year 16,197,266$ 15,763,466$ 17,326,512$ 1,563,046$
concluded
The accompanying notes are an integral part of the financial statements.
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42
CITY OF LANSING, MICHIGAN
Proprietary Fund Financial Statements
Major Funds
Sewage Disposal System Fund - This fund accounts for the provision of sewage disposal services to the
residents of the City.
Municipal Parking System Fund - This fund accounts for the operation of City-owned parking facilities.
Nonmajor Funds and Internal Service Funds
Nonmajor enterprise funds and internal service funds are presented, by fund type, within the Combining
and Individual Fund Financial Statements and Schedules section of this report as noted in the table of
contents.
43
Statement of Net Position
Proprietary Funds
June 30, 2018
Governmental
Business-type Activities - Enterprise Funds Activities
Sewage Municipal Nonmajor
Disposal Parking Enterprise Internal
System System Funds Totals Service Funds
Assets
Current assets:
Cash and cash equivalents 785$ 3,951,350$ 17,556$ 3,969,691$ -$
Equity in pooled cash and investments 39,365,253 7,077,072 1,472,736 47,915,061 6,185,951
Accounts receivable, net 4,832,638 479,124 125,363 5,437,125 552,042
Accrued interest receivable 38,885 87,762 - 126,647 -
Lease receivable, current 644,654 -- 644,654 -
Inventories 344,171 - 52,493 396,664 342,145
Prepaids --- - 344,957
Due from other funds 2,942 1,388,053 - 1,390,995 -
Total current assets 45,229,328 12,983,361 1,668,148 59,880,837 7,425,095
Noncurrent assets:
Restricted cash and cash equivalents 2,416,708 151,865 - 2,568,573 -
Advances to other funds - 196,602 - 196,602 -
Lease receivable, net of current portion 6,745,125 15,740,989 - 22,486,114 -
Capital assets not being depreciated 6,662,298 12,367,501 504,241 19,534,040 92,892
Capital assets being depreciated, net 317,678,620 14,739,447 2,444,037 334,862,104 12,122,717
Total noncurrent assets 333,502,751 43,196,404 2,948,278 379,647,433 12,215,609
Total assets 378,732,079 56,179,765 4,616,426 439,528,270 19,640,704
Deferred outflows of resources
Deferred charge on refunding 988,820 3,617,008 - 4,605,828 -
Deferred pension amounts 881,274 342,694 570,989 1,794,957 -
Total deferred outflows of resources 1,870,094 3,959,702 570,989 6,400,785 -
Liabilities
Current liabilities:
Accounts payable 777,627 234,986 118,262 1,130,875 1,612,706
Deposits payable - 66,815 - 66,815 -
Accrued interest payable 681,953 330,351 3,962 1,016,266 19,058
Accrued payroll 86,513 47,238 1,823 135,574 149,430
Claims incurred but not reported - - - - 900,000
Due to other funds 362,870 2,942 - 365,812 -
Due to component units - 1,375 - 1,375 -
Unearned revenues - - 171,255 171,255 -
Bonds and notes payable, current portion 11,891,780 2,005,000 225,580 14,122,360 361,324
Compensated absences, current portion 17,094 1,416 19,901 38,411 38,785
Total current liabilities 13,817,837 2,690,123 540,783 17,048,743 3,081,303
Noncurrent liabilities:
Accrued interest payable, net of current portion - 1,850,892 - 1,850,892 -
Bonds and notes payable, net of current portion 105,495,167 34,804,859 582,920 140,882,946 2,670,381
Compensated absences, net of current portion 494,205 175,323 163,181 832,709 801,253
Net pension liability 14,570,451 5,665,898 9,440,379 29,676,728 -
Net other postemployment benefit liability 22,237,228 6,783,393 9,284,517 38,305,138 -
Total noncurrent liabilities 142,797,051 49,280,365 19,470,997 211,548,413 3,471,634
Total liabilities 156,614,888 51,970,488 20,011,780 228,597,156 6,552,937
Deferred inflows of resources
Deferred pension amounts 343,163 133,443 222,339 698,945 -
Deferred other postemployment benefit amounts 855,544 260,981 357,208 1,473,733
Total deferred inflows of resources 1,198,707 394,424 579,547 2,172,678 -
Net position
Net investment in capital assets 215,332,570 9,655,086 2,139,778 227,127,434 9,183,904
Restricted for debt retirement 1,734,755 - - 1,734,755 -
Restricted for capital projects - 151,865 - 151,865 -
Unrestricted (deficit) 5,721,253 (2,032,396) (17,543,690) (13,854,833) 3,903,863
Total net position 222,788,578$ 7,774,555$ (15,403,912)$ 215,159,221$ 13,087,767$
The accompanying notes are an integral part of the financial statements.
CITY OF LANSING, MICHIGAN
44
Statement of Revenues, Expenses and Changes in Fund Net Position
Proprietary Funds
For the Year Ended June 30, 2018
Governmental
Business-type Activities - Enterprise Funds Activities
Sewage Municipal Nonmajor
Disposal Parking Enterprise Internal
System System Funds Totals Service Funds
Operating revenues
Charges for services 35,107,570$ 7,436,552$ 6,382,590$ 48,926,712$ 84,040,270$
Operating expenses
Personal services 6,422,033 2,979,840 4,578,298 13,980,171 8,339,660
Purchase of goods and services 8,572,838 2,095,206 2,769,001 13,437,045 73,787,845
Depreciation 10,415,638 1,302,124 388,686 12,106,448 2,019,177
Total operating expenses 25,410,509 6,377,170 7,735,985 39,523,664 84,146,682
Operating income (loss) 9,697,061 1,059,382 (1,353,395) 9,403,048 (106,412)
Nonoperating revenues (expenses)
Interest revenue 500,884 1,081,224 21,834 1,603,942 -
Gain (loss) on sale of capital assets - (108,078) - (108,078) 47,550
Interest expense and fees (3,141,634) (3,402,998) (18,020) (6,562,652) (118,129)
Capital contribution to others - - (214,486) (214,486) -
Total nonoperating revenue (expenses)(2,640,750) (2,429,852) (210,672) (5,281,274) (70,579)
Income (loss) before transfers 7,056,311 (1,370,470) (1,564,067) 4,121,774 (176,991)
Transfers
Transfers in - - 941,290 941,290 650,000
Transfers out - - (29,104) (29,104) -
Total transfers - - 912,186 912,186 650,000
Change in net position 7,056,311 (1,370,470) (651,881) 5,033,960 473,009
Net position, beginning of year, as restated 215,732,267 9,145,025 (14,752,031) 210,125,261 12,614,758
Net position, end of year 222,788,578$ 7,774,555$ (15,403,912)$ 215,159,221$ 13,087,767$
The accompanying notes are an integral part of the financial statements.
CITY OF LANSING, MICHIGAN
45
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2018
Governmental
Business-type Activities - Enterprise Funds Activities
Sewage Municipal Nonmajor
Disposal Parking Enterprise Internal
System System Funds Totals Service Funds
Cash flows from operating activities
Cash received from customers 46,817,990$ 6,193,206$ 6,373,042$ 59,384,238$ -$
Cash received from interfund services - - - - 83,559,231
Cash payments for goods and services (9,378,285) (1,957,645) (2,758,107) (14,094,037) (72,859,244)
Cash payments to employees (6,634,295) (2,434,347) (4,411,431) (13,480,073) (8,334,038)
Net cash provided by (used in) operating activities 30,805,410 1,801,214 (796,496) 31,810,128 2,365,949
Cash flows from noncapital financing activities
Transfers in - - 941,290 941,290 650,000
Transfers out - - (29,104) (29,104) -
Net cash provided by noncapital financing activities - - 912,186 912,186 650,000
Cash flows from capital and related financing activities
Proceeds from sale of capital assets - - - - 47,550
Acquisition and construction of capital assets (3,558,264) (457,129) - (4,015,393) (1,731,657)
Capital contributions to others - - (214,486) (214,486) -
Proceeds from issuance of long-term debt - 10,805,000 - 10,805,000 -
Principal paid on long-term debt (11,825,000) (1,970,000) (221,223) (14,016,223) (832,965)
Interest paid on long-term debt (3,276,279) (1,203,359) (19,104) (4,498,742) (123,669)
Amount paid to refunding bond escrow agent - (7,786,593) - (7,786,593) -
Payments received on capital lease 765,572 - - 765,572 -
Net cash used in capital and related financing activities (17,893,971) (612,081) (454,813) (18,960,865) (2,640,741)
Cash flows from investing activities
Interest and dividends received 504,977 83,207 21,834 610,018 -
Payments received on loans made to others - 60,875 - 60,875 -
Net cash provided by investing activities 504,977 144,082 21,834 670,893 -
Net change in cash and cash equivalents 13,416,416 1,333,215 (317,289) 14,432,342 375,208
Cash and cash equivalents, beginning of year 28,366,330 9,847,072 1,807,581 40,020,983 5,810,743
Cash and cash equivalents, end of year 41,782,746$ 11,180,287$ 1,490,292$ 54,453,325$ 6,185,951$
Reconciliation to statement of net position
Cash and cash equivalents 785$ 3,951,350$ 17,556$ 3,969,691$ -$
Equity in pooled cash and investments 39,365,253 7,077,072 1,472,736 47,915,061 6,185,951
Restricted cash and cash equivalents 2,416,708 151,865 - 2,568,573 -
41,782,746$ 11,180,287$ 1,490,292$ 54,453,325$ 6,185,951$
continued…
CITY OF LANSING, MICHIGAN
46
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2018
Governmental
Business-type Activities - Enterprise Funds Activities
Sewage Municipal Nonmajor
Disposal Parking Enterprise Internal
System System Funds Totals Service Funds
CITY OF LANSING, MICHIGAN
Reconciliation of operating income (loss) to net cash
provided by (used in) operating activities
Operating income (loss) 9,697,061$ 1,059,382$ (1,353,395)$ 9,403,048$ (106,412)$
Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:
Depreciation 10,415,638 1,302,124 388,686 12,106,448 2,019,177
Change in:
Accounts receivable 10,113,362 (218,263) (51,931) 9,843,168 (481,039)
Inventories (21,994) - (1,169) (23,163) 139,369
Prepaids - 5,000 - 5,000 (45,342)
Due from other funds 1,597,058 (1,025,183) - 571,875 -
Due from component units 1,109,931 - - 1,109,931 -
Deferred outflows - pension 297,676 83,313 255,277 636,266 -
Accounts payable (487,961) 133,936 12,063 (341,962) 834,574
Deposits payable - 100 - 100 -
Accrued payroll (3,319) 4,590 (17,158) (15,887) (13,705)
Claims incurred but not reported - - - - 15,000
Due to other funds 2,942 - - 2,942 -
Due to component units (1,408,365) (1,375) - (1,409,740) -
Unearned revenues - - 42,383 42,383 -
Compensated absences 56,371 37,417 (17,498) 76,290 4,327
Net pension liability 1,351,330 1,024,358 902,792 3,278,480 -
Deferred inflows - pension (1,048,328) (340,017) (594,976) (1,983,321) -
Net other postemployment benefit liability (1,721,536) (525,149) (718,778) (2,965,463) -
Deferred inflows - OPEB 855,544 260,981 357,208 1,473,733 -
Net cash provided by (used in) operating activities 30,805,410$ 1,801,214$ (796,496)$ 31,810,128$ 2,365,949$
concluded
The accompanying notes are an integral part of the financial statements.
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CITY OF LANSING, MICHIGAN
Fiduciary Fund Financial Statements
Pension and Other Postemployment Benefit Trust Funds -Employee pension and other postemployment
benefit trust funds accept payments made by the City, invest fund resources, calculate and pay pensions
to retirees (or beneficiaries), and account for postemployment healthcare coverage.
Combining schedules for fiduciary funds are presented in the notes to the financial statements.
Agency Funds - These funds account for resources held in a trustee or agent capacity for the 54-A District
Court.
Combining statements for agency funds are presented, by fund type, within the Combining and Individual
Fund Financial Statements and Schedules section of this report as noted in the table of contents.
49
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2018
Pension
and Other
Postemployment
Benefits Trust Agency
Funds Funds
Assets
Cash and cash equivalents 10,026,859$ -$
Equity in pooled cash and investments - 84,608
Investments:
U.S. treasuries 19,177,602 -
U.S. agencies 29,780,815 -
Collateralized mortgage obligations 892,841 -
Mutual funds 356,633,559 -
Domestic equities 127,077,908 -
International equities 1,942,694 -
Emerging market equities 729,285 -
Money market funds 15,167,519 -
Contribution receivable 10,150
Dividends and interest receivable 416,878 -
Total assets 561,856,110 84,608$
Liabilities
Accounts payable 806,012 -$
Undistributed receipts - 84,608
Total liabilities 806,012 84,608$
Net position restricted for
Pension benefits 463,026,592
Other postemployment benefits 98,023,506
Total net position 561,050,098$
The accompanying notes are an integral part of the financial statements.
CITY OF LANSING, MICHIGAN
50
Statement of Changes in Fiduciary Net Position
Pension and Other Postemployment Benefits Trust Funds
For the Year Ended June 30, 2018
Additions
Investment income:
Net appreciation in fair value
of investments 21,857,420$
Interest income 206,779
Dividend income 17,313,295
Investment expenses (1,668,185)
Net investment income 37,709,309
Contributions:
Employer 48,256,071
Plan members 3,996,093
Total contributions 52,252,164
Total additions 89,961,473
Deductions
Participant benefits 77,286,373
Administrative expense 1,180,676
Total deductions 78,467,049
Change in net position 11,494,424
Net position restricted for pension and other postemployment benefits
Beginning of year 549,555,674
End of year 561,050,098$
The accompanying notes are an integral part of the financial statements.
CITY OF LANSING, MICHIGAN
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COMPONENT UNITS
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CITY OF LANSING, MICHIGAN
Discretely Presented Component Units
Discretely presented component units are entities that are legally separate from the City but for
which the City is financially accountable, or their relationship with the City is such that exclusion
would cause the City’s financial statements to be misleading or incomplete. The City has three
discretely presented component units:
Brownfield Redevelopment Authority
Tax Increment Finance Authority
Lansing Entertainment and Public Facilities Authority
Complete financial statements for each of the individual component units may be obtained from
the entity's administrative offices.
55
Combining Statement of Net Position
Discretely Presented Component Units
June 30, 2018
Lansing
Tax Entertainment
Brownfield Increment & Public
Redevelopment Finance Facilities
Authority Authority Authority Totals
Assets
Cash and cash equivalents 3,777,577$ 947,034$ 457,150$ 5,181,761$
Receivables, net 230,129 - 1,003,096 1,233,225
Due from primary government - 1,375 - 1,375
Inventories, prepaids and other assets - - 143,243 143,243
Restricted cash and cash equivalents - 3,436,754 920,972 4,357,726
Capital assets being depreciated, net - - 1,008 1,008
Total assets 4,007,706 4,385,163 2,525,469 10,918,338
Deferred outflows of resources
Deferred charge on refunding - 2,434,795 - 2,434,795
Liabilities
Accounts payable and
accrued liabilities 1,317,824 22,306 934,671 2,274,801
Accrued interest payable:
Due within one year - 341,347 - 341,347
Due in more than one year - 3,677,929 - 3,677,929
Unearned revenues - - 382,017 382,017
Long-term debt:
Due within one year - 305,534 - 305,534
Due in more than one year - 41,794,641 - 41,794,641
Total liabilities 1,317,824 46,141,757 1,316,688 48,776,269
Net position
Investment in capital assets - - 1,008 1,008
Unrestricted (deficit) 2,689,882 (39,321,799) 1,207,773 (35,424,144)
Total net position 2,689,882$ (39,321,799)$ 1,208,781$ (35,423,136)$
The accompanying notes are an integral part of the financial statements.
CITY OF LANSING, MICHIGAN
56
Combining Statement of Activities
Discretely Presented Component Units
For the Year Ended June 30, 2018
Lansing
Tax Entertainment
Brownfield Increment & Public
Redevelopment Finance Facilities
Authority Authority Authority Totals
Expenses
Brownfield redevelopment 1,872,065$ -$ -$ 1,872,065$
Community development - 2,433,526 - 2,433,526
Recreation and culture - - 10,811,604 10,811,604
Total expenses 1,872,065 2,433,526 10,811,604 15,117,195
Program revenues
Charges for services - - 9,586,265 9,586,265
Operating grants and contributions 76,012 - 1,411,050 1,487,062
Total program revenues 76,012 - 10,997,315 11,073,327
Net program expense (revenue) (1,796,053) (2,433,526) 185,711 (4,043,868)
General revenues
Property taxes 2,393,997 2,950,103 389,252 5,733,352
Unrestricted investment earnings 2,593 14,068 - 16,661
Total general revenues 2,396,590 2,964,171 389,252 5,750,013
Changes in net position 600,537 530,645 574,963 1,706,145
Net position, beginning of year, as restated 2,089,345 (39,852,444) 633,818 (37,129,281)
Net position, end of year 2,689,882$ (39,321,799)$ 1,208,781$ (35,423,136)$
The accompanying notes are an integral part of the financial statements.
CITY OF LANSING, MICHIGAN
57
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58
NOTES TO FINANCIAL STATEMENTS
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60
CITY OF LANSING, MICHIGAN
Index - Notes to Financial Statements
Page
1. Summary of Significant Accounting Policies 62
Reporting Entity
Government-wide and Fund Financial Statements
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources, and Equity
2. Budgetary Information 71
3. Deficit Fund Equity 72
4. Deposits and Investments 73
5. Receivables 82
6. Capital Assets 83
7.Accounts Payable and Accrued Liabilities 85
8. Interfund Receivables, Payables and Transfers 85
9. Long-Term Debt 87
10.Fund Balances - Governmental Funds 92
11.Net Investment in Capital Assets 93
12.Segment Information - Enterprise Funds 93
13.Risk Management 93
14.Property Taxes 94
15.Contingent Liabilities 95
16.Pension Plans 95
17.Other Postemployment Benefits 110
18.Operating Leases 121
19.Tax Abatements 121
20.Restatements 122
21.Subsequent Event 122
61
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Lansing (the “City”) was incorporated in 1859. In 1909, the City came under the provisions of
Act 279, P.A. 1909, as amended (“Home Rule City Act”). The City operates under a strong Mayor form of
government in which the Mayor is responsible for implementation and administration of City policy as
established by City Council.
The accounting and reporting policies of the City conform in all material respects to generally accepted
accounting principles (GAAP) as applicable to governments. The Governmental Accounting Standards Board
(GASB) is the standard setting body for establishing governmental accounting and financial reporting
principles, which are primarily set forth in the GASB’s Codification of Governmental Accounting and
Financial Reporting Standards (GASB Codification). Following is a summary of the significant policies:
Reporting Entity
As required by generally accepted accounting principles, these financial statements present the City and its
component units, entities for which the City is considered to be financially accountable. The financial data
of the component units are included in the City’s reporting entity because of the significance of their
operational or financial relationships with the City.
Blended Component Unit
A blended component unit is a legally separate entity from the City but is so intertwined with the City that
it is, in substance, the same as the City. It is reported as part of the City and its financial data is combined
with data of the appropriate funds. The City has one blended component unit, the Building Authority with a
fiscal June 30 year-end. This component unit provides services primarily to benefit the City. The blended
unit is described as follows:
The Building Authority (the “Authority”) was established by the City under Act 31, Michigan Public Acts of
1948. The Mayor, with the advice and consent of City Council, appoints the Authority's governing body and
designates management. The Authority uses the proceeds of its tax-exempt bonds to finance the
construction or acquisition of capital assets for the City only. The bonds are secured by lease agreements
with the City and will be retired through lease payments from the City. The financial activity, assets,
liabilities and equity of the Authority are incorporated within the City’s Municipal Parking System enterprise
fund and the 2015 Refunding Debt Service Fund.
Discretely Presented Component Units
Discretely presented component units are entities that are legally separate from the City but for which the
City is financially accountable, or their relationship with the City is such that exclusion would cause the
City’s financial statements to be misleading or incomplete. The discretely presented component units are
as follows:
62
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
8th Floor
124 West Michigan Avenue
Lansing, Michigan 48933
1000 S Washington Avenue, Suite 201
Lansing, Michigan 48910
Component Unit Financial Statements
City of Lansing Building Authority
Tax increment financing permits the LBRA to capture tax revenues which are attributable to increases in
the value of real and personal property located within an approved project area. Current activities of the
LBRA include collections of property tax revenues on project areas for the Rite Aid Pharmacy and the
former Motor Wheel Site Plant.
The Tax Increment Finance Authority (“TIFA”) was established by the City under the authority contained
in Act 450, Michigan Public Acts of 1981 (“Act 450”). Act 450 authorizes the City to designate specific
districts within its corporate limits as TIFA districts. The TIFA presides over such districts, formulating plans
for public improvements, economic development, neighborhood revitalization, and historic preservation
within the districts. Act 450 allows the TIFA to participate in a broad range of improvement activities
intended to contribute to economic growth and prevent property value deterioration. The TIFA’s governing
body is appointed by the Mayor with the advice and consent of the City Council. Bond issuances, to fund the
above activities, are approved by the City Council and the legal liability for the debt remains with the City.
The Lansing Entertainment and Public Facilities Authority (“LEPFA”) was established under the charter of
the City of Lansing, Michigan in February 1996, replacing the former Greater Lansing Convention/Exhibition
Authority, which had been responsible for operating and managing the Lansing Center and the Lansing Civic
Arena (the latter through the fiscal year ended June 30, 1995). LEPFA was established to oversee the
management and operations of the Lansing Center, the City Market and the Cooley Law School Stadium.
Complete financial statements for the individual component units may be obtained from each entity’s
administrative offices.
Brownfield Redevelopment Authority / Tax Increment Finance Authority
LEPFA is chartered as a building authority under the provisions of Act 31, Public Acts of Michigan, 1948. In
the event of dissolution or termination of LEPFA, all assets and rights of the Authority shall revert to the
City. LEPFA’s Board of Commissioners consists of thirteen members appointed by the Mayor of the City of
Lansing and approved by the City Council.
The Lansing Brownfield Redevelopment Authority ("LBRA") was established by the City on August 17, 1997,
under the authority contained in Act 381, Michigan Public Acts of 1996 (the “Act”). The Act authorizes the
City to establish and to designate the boundaries of a Brownfield redevelopment zone. The Brownfield
Redevelopment Authority is appointed by City Council to preside over such a zone, and it is authorized to
promote the revitalization of environmentally distressed areas within the City of Lansing. The Act allows
the LBRA to participate in a broad range of improvement activities intended to encourage the reuse of
industrial and commercial property by offering economic incentives for redevelopment to prevent property
value deterioration. Tax increment financing plans must be approved by the City.
63
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Government-wide and Fund Financial Statements
333 East Michigan Avenue
Lansing, Michigan 48933
Joint Venture
In 1998, the City entered into an agreement with Ingham County (the "County") to form the City of Lansing
and County of Ingham Joint Building Authority (JBA) for the purpose of constructing and managing a building
in downtown Lansing that houses the courts, prosecuting attorney and other related departments. The JBA
is governed by a three-member board composed of one member each appointed by the City and the County
and one appointed jointly by the two units. Both the County and the City contribute cash and/or property
to the JBA. Bonds were issued in 1999 by the JBA to provide the funding necessary to construct the
building. Because the joint venture agreement does not provide an explicit contractual formula outlining
the City's claim to the JBA's assets, it is considered to be a "joint venture with no equity interest" and
accordingly, no amounts are reported in the accompanying financial statements for an equity interest.
Financial information for the JBA may be obtained by writing the Ingham County Financial Services Division,
P.O. Box 319, Mason, Michigan 48854.
Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds,
even though the latter are excluded from the government-wide financial statements. Major individual
governmental funds and major individual enterprise funds are reported as separate columns in the fund
financial statements.
The government-wide financial statements (i.e., the statement of net position and the statement of
activities) report information on all of the nonfiduciary activities of the primary government and its
component units. Governmental activities, which normally are supported by taxes and intergovernmental
revenues, are reported separately from business-type activities, which rely to a significant extent on fees
and charges for support. Likewise, the primary government is reported separately from certain component
units for which the primary government is financially accountable.
The statement of activities demonstrates the degree to which the direct expenses of a given function or
segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a
specific function or segment. Program revenues include (1) charges to customers or applicants who
purchase, use, or directly benefit from goods, services, or privileges provided by a given function or
segment and (2) grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function or segment. Taxes and other items not properly included among
program revenues are reported instead as general revenues.
Lansing Entertainment and Public Facilities Authority
64
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The City reports the following major enterprise funds:
Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that
are restricted or committed to expenditure for specified purposes other than debt service or capital
projects that comprise, or are expected to comprise a substantial portion of the fund's total reported
inflows.
Sewage Disposal System Fund.This fund accounts for the provision of sewage disposal services to the
residents of the City.
Municipal Parking System Fund. This fund accounts for the operation of City-owned parking facilities.
Additionally, the City reports the following fund types:
Debt Service Funds are used to account for and report financial resources that are restricted,
committed, or assigned to expenditure for principal, interest and related costs.
The government-wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements.
Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of
the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are
levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by
the provider have been met. Agency funds, a type of fiduciary fund, are unlike all other types of funds,
reporting only assets and liabilities. Therefore, agency funds cannot be said to have a measurement focus.
They do, however, use the accrual basis of accounting to recognize receivables and payables.
Governmental funds are reported using the current financial resources measurement focus and the modified
accrual basis of accounting. Under this method, revenues are recognized when measurable and available.
Revenues are considered to be available when they are collectible within the current period or soon enough
thereafter to pay liabilities of the current period. The City considers all revenues reported in the
governmental funds to be available if they are collected within three months after year-end, except for
income taxes that use a 45-day collection period, property taxes that use a 60-day collection period, and
reimbursement-based grants that use one year. Expenditures generally are recorded when a liability is
incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related
to compensated absences and claims and judgments, are recorded only when payment is due.
The City reports the following major governmental fund:
General Fund.This fund is the City’s primary operating fund. It accounts for all the financial resources
of the primary government, except those accounted for and reported in another fund.
Property taxes, intergovernmental revenue, licenses, and interest associated with the current fiscal period
are all considered to be susceptible to accrual and as such have been recognized as revenues of the current
fiscal period. Only the portion of special assessments receivable due within the current fiscal period is
considered to be susceptible to accrual as revenue of the current period. All other revenue items are
considered to be measurable and available only when cash is received by the City.
65
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Capital Projects Funds are used to account for and report financial resources that are restricted,
committed, or assigned to expenditure for capital outlays, including the acquisition or construction of
capital facilities and other capital assets.
Restricted net position are assets that are subject to restrictions beyond the government’s control. The
restrictions may be externally imposed or imposed by law. When both restricted and unrestricted resources
are available for use, it is the government’s policy to use restricted resources first, then unrestricted
resources as they are needed.
Enterprise Funds account for those operations that are financed and operated in a manner similar to
private business or where the City has decided that the determination of revenues earned, costs incurred
and/or net income is necessary for management accountability.
Permanent Funds account for resources that are legally restricted to the extent that only earnings, and
not principal, may be used for purposes that support the government’s programs.
Pension and Other Postemployment Benefit Trust Funds account for the accumulation of resources to be
used for retirement annuity payments to eligible full-time employees of the City, certain healthcare
costs, and other retirement distributions.
As a general rule the effect of interfund activity has been eliminated from the government-wide financial
statements. Exceptions to this general rule are payments in lieu of taxes and various other functions of the
government. Elimination of these charges would distort the direct costs and program revenues reported for
the various functions concerned.
The Agency Fund account for resources held in a fiduciary capacity for the 54-A District Court.
Internal Service Funds account for operations that provide services to other departments or agencies of
the City, or to other governments, on a cost-reimbursement basis. This includes operating a maintenance
facility for trucks and equipment used by the Public Service Department, health care and self-insurance
services, and information technology.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the
City’s enterprise and internal service funds are charges to customers for sales and services. Operating
expenses for enterprise funds and internal service funds include the cost of sales and services,
administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this
definition are reported as nonoperating revenues and expenses.
Nonexchange transactions, in which the City gives (or receives) value without directly receiving (or giving)
equal value in exchange, include property taxes, grants, entitlements and donations. On an accrual basis,
revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from
grants, entitlements and donations is recognized in the fiscal year in which all eligibility requirements have
been satisfied.
66
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources, and Equity
Deposits and Investments
Bankers’ acceptances of United States banks.
External investment pools as authorized by Public Act 20 as amended through December 31, 1997.
Obligations of the State of Michigan and its political subdivisions, that, at the time of purchase are rated
as investment grade by at least one standard rating service.
Certificates of deposit, savings accounts, deposit accounts or depository receipts of a qualified financial
institution.
Commercial paper rated at the time of purchase within the two highest classifications established by not
less than two standard rating services and that matures not more than 270 days after the date of
purchase.
Bonds, securities, other obligations and repurchase agreements of the United States, or an agency or
instrumentality of the United States.
State statutes authorize the City to invest in:
Investments are stated at fair value. Short-term investments are reported at cost, which approximates fair
value.
Unrealized appreciation or depreciation on pension and other postemployment benefit trust fund
investments due to changes in fair value are recognized each year.
The City maintains an investment pool for all City funds. Each fund’s portion of the investment pool is
displayed on the statement of net position/balance sheet as “equity in pooled cash.” The City’s cash and
cash equivalents are considered to be cash on hand, demand deposits and short-term investments with
original maturities of three months or less from the date of acquisition.
Mutual funds registered under the Investment Company Act of 1940 with the authority to purchase only
investment vehicles that are legal for direct investment by a public corporation.
Restricted cash consists of amounts required to be maintained separately in accordance with bond
covenants.
67
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Receivables
Inventories and Prepaids
Capital Assets
Transactions between funds that are representative of lending/borrowing arrangements outstanding at the
end of the fiscal year are referred to as either due to/from other funds (i.e., the current portion of
interfund loans) or advances to/from other funds (i.e., the non-current portion of interfund loans). All other
outstanding balances between funds are reported as due to/from other funds. Any residual balances
outstanding between the governmental activities and business-type activities are reported in the
government-wide financial statements as internal balances.
Amounts due from other governments include amounts due from grantors for specific programs and capital
projects. Program grants and capital grants for capital assets are recorded as receivables and revenues at
the time reimbursable project costs are incurred. Amounts received in advance of project costs being
incurred are reported as unearned revenue.
All receivables are reported at their gross value and, where appropriate, are reduced by the estimated
portion that is expected to be uncollectible.
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges,
sidewalks, and similar items acquired or constructed since June 30, 1980), are reported in the applicable
governmental or business-type activities columns in the government-wide financial statements. Capital
assets are defined by the City as assets having a useful life in excess of three years and whose costs exceed
$5,000 ($100,000 for buildings). Capital assets are stated at historical cost or estimated historical cost
where actual cost information is not available. Donated capital assets are recorded at their estimated
acquisition cost as of the donation date.
Certain receivables in governmental funds consist of rehabilitation and redevelopment loans that are
generally not expected or scheduled to be collected in the subsequent year.
Leases receivable consist of amounts collectible from local municipalities for which the City has irrevocably
pledged its full faith and credit as collateral for certain construction and improvement bonds. In accordance
with contractual agreements, these entities will provide all future amounts due for bond principal and
accrued interest payable. The receivable has been reported as current based on the amounts to be
collected next year to satisfy obligations.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid items in both government-wide and fund financial statements. In governmental funds, prepaid
items are charged to expenditures using the consumption method.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend
asset lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects
are constructed. Interest incurred during the construction phase of capital assets of business-type activities,
if any, is included as part of the capitalized value of the asset constructed.
All inventories are valued at cost using the first-in/first-out method. Inventories of governmental funds are
recorded as expenditures when consumed.
68
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Years
Buildings 20-50
Improvements 8-50
Equipment 3-15
Sanitary sewers 50
Infrastructure 10-75
Deferred Outflows of Resources
Payables
Compensated Absences
In addition to assets, the statement of financial position will sometimes report a separate section for
deferred outflows of resources. This separate financial statement element, deferred outflows of resources,
represents a consumption of net position that applies to a future period(s) and so will not be recognized as
an outflow of resources (expense/expenditure) until then. The City reports a deferred charge on advance
bond refunding for the difference in the carrying value of refunded debt and its reacquisition price. This
amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The City
also reports deferred outflows of resources for changes in expected and actual investments returns,
assumptions, and benefits provided, related to the net pension and other postemployment benefit
liabilities.
In addition to land and construction in progress, the amount presented as capital assets not being
depreciated includes intangible assets consisting of land development rights acquired for the purpose of
farmland and ranch preservation. Land development rights are deemed to have an indefinite useful life,
and therefore are not being amortized.
The City reviews long-lived assets for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset exceeds its fair value. If it is determined that an impairment loss has
occurred the asset is written down to its net realizable value and a current charge to income is recognized.
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end
of the fiscal year are referred to as either interfund receivables/payables (i.e., the current portion of
interfund loans) or advances to/from other funds (i.e., the non-current portion of interfund loans). All other
outstanding balances between funds are reported as due to/from other funds. Any residual balances
outstanding between the governmental and business-type activities are reported in the government-wide
financial statements as internal balances.
Capital assets are depreciated using the straight-line method over the following estimated useful lives:
It is the City’s policy to permit employees to accumulate earned but unused vacation and compensatory
time benefits, subject to certain limitations. Certain bargaining unit employees are also permitted to
accumulate earned but unused sick leave. All vacation and compensatory time pay and 50% of sick leave are
accrued when incurred in the government-wide and proprietary fund financial statements. A liability for
these amounts is reported in governmental funds only if they have matured, for example, as a result of
employee resignations or retirements.
69
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Unearned Revenue
Long-term Obligations
Deferred Inflows of Resources
Fund Balances
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well
as bond issuance costs, during the current period. The face amount of debt issued is reported as other
financing sources. Premiums received on debt issuances are reported as other financing sources while
discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld
from the actual debt proceeds received, are reported as debt service expenditures.
In the government-wide financial statements, and proprietary fund types in the fund financial statements,
long-term debt and other long-term obligations are reported as liabilities in the applicable governmental
activities, business-type activities, or proprietary fund statement of net position. Bond premiums and
discounts are deferred and amortized over the life of the bonds using the straight-line basis. Bonds payable
are reported net of the applicable bond premium or discount. Bond issuance costs are reported as expenses
when incurred.
Unearned revenue consists of amounts received prior to the delivery of goods/service or expenditure on
allowable costs.
When the City incurs an expenditure for purposes for which various fund balance classifications can be used,
it is the City’s policy to use restricted fund balance first, then committed, assigned, and finally unassigned.
In addition to liabilities, the statement of financial position will sometimes report a separate section for
deferred inflows of resources. This separate financial statement element, deferred inflows of resources,
represents an acquisition of net position that applies to one or more future periods and so will not be
recognized as an inflow of resources (revenue) until that time. The governmental funds report unavailable
revenues, which arise only under a modified accrual basis of accounting that are reported as deferred
inflows of resources. These amounts are deferred and recognized as an inflow of resources in the period
that the amounts become available. The City also reports deferred inflows of resources for changes in
expected and actual investments returns, assumptions, and benefits provided, related to the net pension
and other postemployment benefit liabilities.
Governmental funds report nonspendable fund balance for amounts that cannot be spent because they are
either (a) not in spendable form or (b) legally or contractually required to be maintained intact.Restricted
fund balance is reported when externally imposed constraints are placed on the use of resources by
grantors, contributors, or laws or regulations of other governments.Committed fund balance is reported
for amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of
the government’s highest level of decision-making authority, the City Council. A formal resolution of the
City Council is required to establish, modify, or rescind a fund balance commitment. The City reports
assigned fund balance for amounts that are constrained by the government’s intent to be used for specific
purposes, but are neither restricted nor committed. The City Council has not delegated the authority to
assign fund balance. Unassigned fund balance is the residual classification for the General Fund. In other
funds, the unassigned classification is used to report a deficit balance resulting from overspending for
specific purposes for which amounts had been restricted, committed, or assigned.
70
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Interfund Transactions
Pension and Other Postemployment Benefits Plans
Use of Estimates
2. BUDGETARY INFORMATION
·
·
·
During the course of normal operations, the City has numerous transactions between funds, including
expenditures and transfers of resources to provide services, construct assets, and service debt. The
accompanying financial statements generally reflect such transactions as transfers. Operating subsidies are
also recorded as transfers. The amounts recorded as subsidies or advances are determined by the City.
Balances outstanding at year-end are reported as due to/from other funds. Transfers between governmental
or proprietary funds are netted as part of the reconciliation to the government-wide financial statements.
Internal service funds are used to record charges for services to all City departments and funds as transfers
or operating revenue. All City funds record these payments to the internal service funds as transfers or
operating expenditures/expenses.
The City follows these procedures in establishing the budgetary data reflected in the financial statements:
For purposes of measuring the net pension and other postemployment benefit liabilities, deferred outflows
of resources and deferred inflows of resources related pensions and other postemployment benefits, and
pension and other postemployment benefit expense, information about the fiduciary net position of the
Plan and additions to/deductions from the Plan fiduciary net position have been determined on the same
basis as they are reported by the Plan. For this purpose, benefit payments (including refunds of employee
contributions) are recognized when due and payable in accordance with the benefit terms. Investments are
reported at fair value.
The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
The City utilizes various investment instruments which are exposed to various risks, such as interest rate,
credit and overall market volatility. Due to the level of risk associated with certain investment securities, it
is reasonably possible that changes in the values of investment securities will occur in the near-term and
that such changes could materially affect the amounts reported in the financial statements.
Not later than the third Monday in May, the Council adopts a budget through passage of a resolution.
On or before the fourth Monday in March, the Mayor submits to the City Council a proposed operating
budget for the fiscal year commencing the following July 1.
Public hearings are conducted to obtain taxpayer comments.
71
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
·
·
·
·
Total
Appropriations
Amount of
Expenditures
Budget
Variance
General fund:
Public safety:
Fire 32,974,439$ 33,050,569$ 76,130$
Nonmajor governmental funds:
Major streets fund:
Principal 457,900 487,084 29,184
State and federal grants fund:
Transfers out - 22,051 22,051
3. DEFICIT FUND EQUITY
The City formally adopts operating budgets for the General Fund and all special revenue funds.
The appropriated budget is prepared by fund, department and the mandatory expenditure accounts as
established by the State of Michigan’s Uniform Chart of Accounts. Within the General Fund, the legal level
of budgetary control is the mandatory expenditure accounts (personal services, supplies and operating
expenses, capital outlay, debt service, transfers, and contingency) within each department. Within other
funds, the legal level of budgetary control is the mandatory expenditure accounts (personal services,
supplies and operating expenses, capital outlay, debt service, transfers, and contingency) within that fund.
Transfers between appropriations (mandatory accounts) require City Council approval. An exception to City
Council approval is allowed by City Charter for transfers between appropriations (mandatory accounts) for
amounts less than five thousand dollars, but not in excess of 15% of the appropriation in cases where five
thousand dollars exceeds 15% of the appropriation.
Copies of the City's separately issued budget report may be obtained from the Finance Department, 124 West
Michigan Avenue, Lansing, Michigan 48933.
The above budgeted amounts are presented at the activity level, which is the required minimum level of
control per the Michigan Uniform Budget Manual.
Budgetary integration is employed as a management control device during the year for all budgeted funds.
Except for the General Fund, these budgets are adopted on a basis consistent with generally accepted
accounting principles ("GAAP"). In the General Fund, capital lease payments / installment payments are
budgeted, but capital lease acquisitions are not. There were no capital lease acquisitions during the year
ended June 30, 2018.
The Special Assessments Capital Projects Fund reported a deficit fund balance of $155,261. The fund
received a long-term advance from the general fund that was used to provide the working capital for the
fund in prior years. The deficit is the result of deferred special assessments receivable. As special
assessments are collected, this deficit will be eliminated, and the advance repaid.
P.A. 621 of 1978, as amended, provides that a local unit shall not incur expenditures in excess of the amount
appropriated. During the year ended June 30, 2018, the City incurred expenditures in certain budgetary funds
which were in excess of the amounts appropriated, as follows:
Appropriations lapse at year-end for all annual budgets. Appropriations are automatically carried forward
for project-type budgets.
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CITY OF LANSING , MICHIGAN
Notes to Financial Statements
4. DEPOSITS AND INVESTMENTS
Primary
Government
Component
Units Totals
Statement of net position
Cash and investments 88,317,059$ 5,181,761$ 93,498,820$
Restricted cash and investments 2,568,573 4,357,726 6,926,299
Statement of fiduciary net position
Pension and OPEB trust funds:
Cash and cash equivalents 10,026,859 - 10,026,859
Investments 551,402,223 - 551,402,223
Agency funds:
Equity in pooled cash and investments 84,608 - 84,608
Total 652,399,322$ 9,539,487$ 661,938,809$
Deposits and investments
Bank deposits:
Checking/savings accounts 81,315,398$
Investment in securities and mutual funds:
Pooled investments 28,649,198
Employees' retirement system investments 195,917,479
Police and fire retirement system investments 324,770,215
Employees' money purchase pension plan investments 2,583,165
Retiree health care VEBA investments 28,131,364
Total investment in securities and mutual funds 580,051,421
Cash on hand 571,990
Total 661,938,809$
The Municipal Parking System, Cemetery, Garbage and Rubbish Collection, and Recycling Enterprise Funds
reported deficits in unrestricted fund net position of $2,032,396, $2,694,184, $5,864,791, and $9,059,282,
respectively, as a result of the net pension and net other postemployment benefit liabilities. Excluding the
net pension and net other postemployment benefit liabilities, unrestricted net positions would be
$10,416,895, $54,628, $68,874, and $983,137, respectively. Total fund net position amounted to deficits of
$2,539,393, $5,864,791, and $9,416,263 for the Cemetery, Garbage and Rubbish Collection, and Recycling
funds, respectively.
The Tax Increment Finance Authority component unit reported a deficit in unrestricted net position of
$39,321,799 at June 30, 2018. The deficit is a result of full-accrual accounting for long-term debt, without
reflecting a corresponding receivable for tax captures to be received in future periods (which cannot be
accrued in accordance with generally accepted accounting principles).
Following is a reconciliation of deposit and investment balances for the primary government (including both
pooled cash and investments as well as pension and other postemployment benefit (OPEB) trust fund
balances) as of June 30, 2018:
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CITY OF LANSING , MICHIGAN
Notes to Financial Statements
S&P AAAm 20,283,544$
S&P AA+ 1,944,594
S&P A1 2,986,300
Unrated 826,504
Assets not subject to credit risk 2,608,256
Total 28,649,198$
Due within 1 year 23,649,716$
1-5 years 1,972,548
6-10 years 418,678
No maturity 2,608,256
Total 28,649,198$
Credit Risk.State law limits investments to specific government securities, certificates of deposit and
bank accounts with qualified financial institutions, commercial paper with specific maximum maturities and
ratings when purchased, bankers acceptances of specific financial institutions, qualified mutual funds and
qualified external investment pools as identified in the list of authorized investments in the summary of
significant accounting policies. The City’s investment policy does not have specific limits in excess of state
law on investment credit risk. Credit risk ratings, where applicable, are summarized as follows:
The City’s investment policy does not specifically address this risk, although the City believes that due to
the dollar amounts of cash deposits and the limits of FDIC insurance, it is impractical to insure all bank
deposits. As a result, the City evaluates each financial institution with which it deposits City funds and
assesses the level of risk of each institution; only those institutions with an acceptable estimated risk level
are used as depositories.
Custodial Credit Risk – Investments.For an investment, custodial credit risk is the risk that, in the event of
the failure of the counterparty, the City will not be able to recover the value of its investments or collateral
securities that are in the possession of an outside party. State law does not require and the City does not
have a policy for investment custodial credit risk. On the investments listed above, there is no custodial
credit risk, as these investments are uncategorized as to credit risk.
Custodial Credit Risk - Deposits.Custodial credit risk is the risk that in the event of a bank failure, the
City’s deposits may not be returned. State law does not require and the City does not have a policy for
deposit custodial credit risk. As of year-end,$80,109,050 of the City’s bank balance of $83,446,529 was
exposed to custodial credit risk because it was uninsured and uncollateralized.
Interest Rate Risk.State law limits the allowable investments and the maturities of some of the allowable
investments as identified in the summary of significant accounting policies. The City’s investment policy
does not have specific limits in excess of state law on investment maturities as a means of managing its
exposure to fair value losses arising from increasing interest rates. For investments held at year-end
maturities are as follows:
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CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Level 1 Level 2 Level 3 Total
U.S. treasuries -$ 2,771,098$ -$ 2,771,098$
Commercial paper 2,986,300 - - 2,986,300
Michigan Cooperative Liquid Assets
Securities System - 20,283,544 20,283,544
Money market funds 2,175,656 432,600 - 2,608,256
5,161,956$ 23,487,242$ -$ 28,649,198$
Concentration of Credit Risk.Concentration of credit risk is the risk of loss attributed to the magnitude of
the City’s investment in a single issuer. State law limits allowable investments but does not limit
concentration of credit risk as identified in the list of authorized investments in the summary of significant
accounting policies. The City’s investment policy does not have specific limits in excess of state law on
concentration of credit risk. All investments held at year-end are reported above.
Deposits
Pension and Other Postemployment Benefit Trust Funds
The deposits and investments of the City’s pension and other postemployment benefit trust funds are
maintained separately from the City’s pooled cash and investments, and are subject to separate investment
policies and State statutes. Accordingly, the required disclosures for the pension and OPEB deposits and
investments are presented separately.
The pension and OPEB trust funds do not maintain any checking or other demand/time deposit accounts.
Amounts reported as cash and cash equivalents in the statement of plan net position are composed entirely
of short-term investments in money market accounts.
The City categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair
value of the asset, as determined by the City's investment advisors. Level 1 inputs are quoted prices in
active markets for identical assets; level 2 inputs are significant other observable inputs; level 3 inputs are
significant unobservable inputs.
Fair Value Measurement
Securities traded on a national or international exchange are valued at the last reported sales price at
current exchange rates. Debt securities are valued by the City's investment custodian using independent
pricing services based on the type of asset. The pricing services may use valuation models or matrix pricing,
which consider: (a) benchmark yields, (b) reported trades, (c) broker/dealer quotes, (d) benchmark
securities, (e) bids or offers, and (f) reference data. The City's level 2 investments as noted in the table
below are valued using significant other observable inputs of the underlying securities.
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CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Employees' Police and Fire Employees' Retiree
Retirement Retirement Money Purchase Health Care
System System Pension Plan VEBA Totals
Investments
U.S. treasuries:
Not on securities loan 7,059,478$ 7,891,968$ -$ -$ 14,951,446$
On securities loan 1,740,462 2,485,694 - - 4,226,156
U.S. agencies:
Not on securities loan 13,211,059 16,569,756 - - 29,780,815
Collateralized mortgage
obligations 247,486 645,355 - - 892,841
Domestic corporate securities
mutual funds:
Not on securities loan 23,053,916 30,817,918 - - 53,871,834
Real estate investment
funds 19,433,461 24,374,542 - - 43,808,003
International equity
mutual funds 64,984,717 93,229,189 99,427 2,990,430 161,303,763
Domestic equity
mutual funds 16,077,013 38,451,229 2,192,550 11,235,502 67,956,294
Domestic debt securities
mutual funds - - 291,188 12,415,991 12,707,179
International debt securities
mutual funds - 16,986,486 - - 16,986,486
Domestic equities:
Not on securities loan 30,494,950 68,258,894 - - 98,753,844
On securities loan 11,240,585 17,083,479 - - 28,324,064
International equities:
Not on securities loan 612,972 1,329,722 - - 1,942,694
Emerging markets equities - - - 729,285 729,285
Money market funds 7,761,380 6,645,983 - 760,156 15,167,519
Total investments $ 195,917,479 $ 324,770,215 $ 2,583,165 $ 28,131,364 $ 551,402,223
Investments
The Michigan Public Employees Retirement Systems’ Investment Act, Public Act 314 of 1965, as amended,
authorizes the pension trust funds to invest in stocks, government and corporate securities, mortgages, real
estate, and various other investment instruments, subject to certain limitations. The retirement boards
have the responsibility and authority to oversee the investment portfolio. Various professional investment
managers are contracted to assist in managing the pension trust funds’ assets. All investment decisions are
subject to Michigan law and the investment policy established by the retirement boards.
The investments of each pension trust fund are held in a bank administered trust fund. Following is a
summary of pension and other postemployment benefits investments as of June 30, 2018:
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CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Employees' Police and Fire Employees' Retiree
Retirement Retirement Money Purchase Health Care
System System Pension Plan VEBA Totals
AAA 140,313$ 172,659$ -$ -$ 312,972$
AA - - 214,784 - 214,784
A - - - 4,153,126 4,153,126
BBB - - - 8,262,865 8,262,865
BB - - 76,404 - 76,404
US government
guaranteed 21,884,097 26,768,676 - - 48,652,773
Not rated 31,049,371 38,115,339 - - 69,164,710
Assets not subject
to credit risk 142,843,698 259,713,541 2,291,977 15,715,373 420,564,589
$ 195,917,479 $ 324,770,215 $ 2,583,165 $ 28,131,364 $ 551,402,223
Employees' Police and Fire
Retirement Retirement
System System
Corporate bonds 11.8% 9.5%
Common stock 8.4% 11.9%
U.S. government securities 6.0% 4.3%
Northern Trust Bank, N.A.
Western Asset Funds, Inc.
Investment Type Issuer
United State of America
Concentration of Credit Risk.At June 30, 2018, the pension and other postemployment benefits investment
portfolio was concentrated as follows:
The City’s pension and other postemployment benefits investment policies require diversification of fixed
income securities; however, they do not specify percentages of dollar amounts by industry or issuer.
Custodial Credit Risk.For investments, custodial credit risk is the risk that, in the event of the failure of
the counterparty, the City will not be able to recover the value of its investments or collateral securities
that are in the possession of an outside party. The City’s pension investment policies require that
investment securities be held in trust by a third-party institution in the name of the pension trust fund. As
such, although uninsured and unregistered, the City’s pension investments are not exposed to custodial
credit risk since the securities are held by the counterparty’s trust department in the name of the pension
trust fund. Short-term investments in money market funds and open-end mutual funds are not exposed to
custodial credit risk because their existence is not evidenced by securities that exist in physical or book
form.
Credit Risk.The City’s pension investment policies provide that at least 90% of its investments in fixed
income securities be rated BBB- or better by a nationally recognized statistical rating organization and the
remaining 10% be rated at least B- or better. The City’s pension and other postemployment benefits
investments were rated by Standard & Poor’s as follows:
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CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Employees' Police and Fire Employees' Retiree
Retirement Retirement Money Purchase Health Care
System System Pension Plan VEBA Totals
International equities:
Canada 379,842$ 795,157$ -$ -$ 1,174,999$
Peru 13,077 28,778 - - 41,855
The Netherlands 30,814 79,002 - - 109,816
United Kingdom 52,778 134,618 - - 187,396
France 46,389 119,182 - - 165,571
Israel 90,072 172,985 - - 263,057
International mutual funds 64,984,717 110,215,675 99,427 2,990,430 178,290,249
Total 65,597,689$ 111,545,397$ 99,427$ 2,990,430$ 180,232,943$
Less than More than
1 year 1-5 years 6-10 years 10 years Total
Employees' Retirement System
U.S. government bonds 70,000$ 3,026,128$ 4,831,986$ 871,826$ 8,799,940$
U.S. agencies - 808,320 - - 808,320
U.S. government mortgage
backed securities - 256,235 963,663 9,656,014 10,875,912
U.S. government issued
commercial mortgage
backed securities - 746,080 365,453 415,294 1,526,827
Commercial mortgage
backed securities - 55,757 - 191,729 247,486
Total 70,000$ 4,892,520$ 6,161,102$ 11,134,863$ 22,258,485
Fixed income investments with no maturity:
Domestic corporate securities mutual funds 23,053,916
Money market funds 7,761,380
Total investments 53,073,781$
Investment
Foreign Currency Risk.Foreign currency risk is the risk that changes in exchange rates will adversely affect
the fair value of an investment or deposit. The pension and other postemployment benefits trusts’ exposure
to foreign currency risk is as follows:
Investment Maturities (Fair Value)
(currency in U.S. dollar)
Interest Rate Risk.Interest rate risk is the risk that changes in interest rates will adversely affect the fair
market value of an investment. The City’s pension investment policies provide that the average duration of
fixed income securities shall not deviate from the Lehman Brothers Aggregate Index duration by +/-20%. As
of June 30, 2018, maturities of the City’s pension and other postemployment benefits trust debt securities,
money market funds and collateralized mortgage obligations were as follows:
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CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Less than More than
1 year 1-5 years 6-10 years 10 years Total
Police and Fire Retirement System
U.S. government bonds 90,000$ 3,753,548$ 5,492,925$ 1,041,189$ 10,377,662$
U.S. agencies - 1,068,167 - - 1,068,167
U.S. government mortgage
backed securities 4,633 310,628 1,704,502 11,341,238 13,361,001
U.S. government issued
commercial mortgage
backed securities - 1,209,782 449,773 481,033 2,140,588
Commercial mortgage
backed securities - 71,688 - 573,667 645,355
Total 94,633$ 6,413,813$ 7,647,200$ 13,437,127$ 27,592,773
Fixed income investments with no maturity:
Domestic corporate securities mutual funds 30,817,918
Money market funds 6,645,983
Total investments 65,056,674$
1-5 years Not available Total
Employees' Money Purchase Pension Pan
Domestic debt securities 270,610$ 20,578$ 291,188$
Investment
Maturities (Fair
Value)
1-5 years
Retiree Health Care VEBA
Domestic debt securities 12,415,991$
Investment Maturities (Fair Value)
Securities Lending.Under contracts approved by the City, the pension and other postemployment benefits
trust funds are permitted to lend their securities to broker-dealers and banks (borrowers) for collateral that
will be returned for the same securities in the future. The pension trust and other postemployment benefits
funds’ custodial banks manage the securities lending programs and receive cash as collateral. Collateral
cash is initially pledged at 100% of the fair value of the securities lent, and may not fall below 95% of the
market value of the loaned security during the term of the loan. At all times, collateral cannot be more
than $100,000 less than the market value of the loaned security. There are no restrictions on the amount of
securities that can be loaned.
Investment Maturities (Fair Value)
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CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Level 1 Level 2 Level 3 Total
Employees' Retirement System
U.S. treasuries -$ 8,799,940$ -$ 8,799,940$
U.S. agencies - 13,211,059 - 13,211,059
Collateralized mortgage obligations 247,486 - - 247,486
Mutual funds 104,115,646 19,433,461 - 123,549,107
Domestic equities 41,735,535 - - 41,735,535
International equities 612,972 - - 612,972
Money market funds 7,761,380 - - 7,761,380
154,473,019$ 41,444,460$ -$ 195,917,479$
Fair Value Measurement
Securities on loan at year-end are classified in the preceding schedule of custodial credit risk according to
the category for the collateral received on the securities lent. At year-end, the pension trust funds have no
credit risk exposure to borrowers because the collateral held by the custodians exceeds the market value of
the related securities lent. At June 30, 2018, the fair value of securities on loan by the Employees’
Retirement System and the Police and Fire Retirement System were $12,981,047 and $19,569,173,
respectively, for which the Plans’ received cash collateral of $13,299,880 and $20,051,605, respectively.
The contract with the pension and other postemployment benefits trust fund custodians require them to
indemnify the City if the borrowers fail to return the securities (and if the collateral is inadequate to
replace the securities lent) or fail to pay the City for income distributions by the securities’ issuers while
the securities are on loan.
The City categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair
value of the asset, as determined by the City's investment advisors. Level 1 inputs are quoted prices in
active markets for identical assets; level 2 inputs are significant other observable inputs; level 3 inputs are
significant unobservable inputs.
Securities traded on a national or international exchange are valued at the last reported sales price at
current exchange rates. Debt securities are valued by the Plans' investment custodian using independent
pricing services based on the type of asset. The pricing services may use valuation models or matrix pricing,
which consider: (a) benchmark yields, (b) reported trades, (c) broker/dealer quotes, (d) benchmark
securities, (e) bids or offers, and (f) reference data. Asset-backed and mortgage-backed securities funds are
valued based on the future cash flows of the principal and interest payments of the underlying collateral of
mortgages on various assets. The Plans' level 2 investments as noted in the tables below are valued using
significant other observable inputs of the underlying securities.
The City has the following recurring fair value measurements as of June 30, 2018:
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CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Level 1 Level 2 Level 3 Total
Police and Fire Retirement System
U.S. treasuries -$ 10,377,662$ -$ 10,377,662$
U.S. agencies - 16,569,756 - 16,569,756
Collateralized mortgage obligations 645,355 - - 645,355
Mutual funds 157,318,078 21,911,504 - 179,229,582
Domestic equities 85,342,373 - - 85,342,373
International equities 1,329,722 - - 1,329,722
Money market funds 6,645,983 - - 6,645,983
251,281,511$ 48,858,922$ -$ 300,140,433
Investments carried at net asset value:
Real estate investment trusts 2,463,038
International equity mutual funds 22,166,744
Total investments 324,770,215$
Level 1 Level 2 Level 3 Total
Employees' Money Purchase Pension Plan
Mutual funds 2,583,165$ -$ -$ 2,583,165$
Level 1 Level 2 Level 3 Total
Retiree Health Care VEBA
Emerging market equities 729,285$ -$ -$ 729,285$
Mutual funds 26,641,923 - - 26,641,923
Money market funds 760,156 - - 760,156
28,131,364$ -$ -$ 28,131,364$
Net Asset Value Investments.Certain investments noted above are carried at net asset value as these are
not actively traded. The fair value is estimated based on the dollar value per share as of June 30, 2018.
These investments are able to be liquidated as needed, to the extent there is a willing buyer in the market.
There are not any restrictions related to the sale of these investments. At June 30, 2018, the City had
$2,473,290 outstanding on initial commitments of $8,600,000 with the Invesco Mortgage Recovery Fund (the
"Fund"). The Fund has a seven year life, and the intent is to sell all of the investments prior to the Fund's
maturity. The other investments at net asset value do not contain required redemption periods.
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CITY OF LANSING , MICHIGAN
Notes to Financial Statements
5. RECEIVABLES
Governmental Business-type Component
Activities Activities Units
Accounts receivable 9,855,678$ 5,870,952$ 1,003,096$
Taxes receivable 264,614 - -
Special assessments receivable 237,499 - -
Loans receivable 1,224,460 - 216,964
Accrued interest receivable 2,113,196 126,647 -
Due from other governments 10,199,933 - 13,165
Lease receivable - 23,130,768 -
Allowance for uncollectible accounts (613,769) (433,827) -
23,281,611$ 28,694,540$ 1,233,225$
Amount not expected to be
collected within one year 3,591,933$ 22,486,114$ 212,464$
Receivables are comprised of the following:
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CITY OF LANSING , MICHIGAN
Notes to Financial Statements
6. CAPITAL ASSETS
Beginning Ending
Balance Additions Disposals Transfers Balance
Governmental activities
Capital assets, not being depreciated:
Land 25,880,189$ 60,727$ (638,129)$ -$ 25,302,787$
Capital assets, being depreciated:
Land improvements 21,458,598 1,740,238 - - 23,198,836
Equipment and vehicles 37,923,418 2,528,621 (479,577) - 39,972,462
Buildings 136,275,787 - - - 136,275,787
Infrastructure 302,537,699 2,796,844 (2,790,954) - 302,543,589
498,195,502 7,065,703 (3,270,531) - 501,990,674
Less accumulated depreciation for:
Land improvements (10,490,271) (909,521) - - (11,399,792)
Equipment and vehicles (30,631,425) (2,260,666) 479,577 - (32,412,514)
Buildings (81,813,427) (4,403,385) - - (86,216,812)
Infrastructure (212,333,017) (4,605,506) 2,786,783 - (214,151,740)
(335,268,140) (12,179,078) 3,266,360 - (344,180,858)
Total capital assets
being depreciated, net 162,927,362 (5,113,375) (4,171) - 157,809,816
Governmental activities
capital assets, net 188,807,551$ (5,052,648)$ (642,300)$ -$ 183,112,603$
At June 30, 2018, the City’s governmental activities had outstanding commitments through construction
contracts of approximately $3,389,000.
Capital asset activity for the year ended June 30, 2018 was as follows:
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CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Beginning Ending
Balance Additions Disposals Transfers Balance
Business-type activities
Capital assets, not being depreciated:
Land 13,292,491$ -$ -$ -$ 13,292,491$
Construction in progress 8,864,632 2,009,129 - (4,632,212) 6,241,549
22,157,123 2,009,129 - (4,632,212) 19,534,040
Capital assets, being depreciated:
Land improvements 25,336,226 124,473 (37,622) 3,631,244 29,054,321
Equipment and vehicles 7,333,063 181,458 - 256,695 7,771,216
Buildings 217,321,022 332,657 (7,596,755) 744,273 210,801,197
Sewers 342,332,577 1,367,676 - - 343,700,253
592,322,888 2,006,264 (7,634,377) 4,632,212 591,326,987
Less accumulated depreciation for:
Land improvements (14,330,020) (496,145) 37,622 - (14,788,543)
Equipment and vehicles (6,129,556) (454,530) - - (6,584,086)
Buildings (129,298,228) (4,245,385) 7,488,677 - (126,054,936)
Sewers (102,126,930) (6,910,388) - - (109,037,318)
(251,884,734) (12,106,448) 7,526,299 - (256,464,883)
Total capital assets
being depreciated, net 340,438,154 (10,100,184) (108,078) 4,632,212 334,862,104
Business-type activities
capital assets, net 362,595,277$ (8,091,055)$ (108,078)$ -$ 354,396,144$
Depreciation of governmental activities by function
General government 397,373$
Public safety 587,208
Public works 4,611,632
Recreation and culture 2,751,336
Community development 1,812,352
Internal service funds 2,019,177
Total depreciation expense - governmental activities 12,179,078$
Depreciation of business-type activities by function
Sewage disposal system 10,415,638$
Municipal parking system 1,302,124
Cemetery 9,827
Golf 77,847
Recycling 301,012
Total depreciation expense - business-type activities 12,106,448$
Depreciation expense was charged to functions/programs of the primary government as follows:
At June 30, 2018, the City’s business-type activities had outstanding commitments through construction
contracts of approximately $9,447,000.
84
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Governmental Business-type Component
Activities Activities Units
Accounts payable 6,300,519$ 1,098,459$ 2,101,029$
Deposits payable 89,147 66,815 -
Accrued payroll 2,032,450 135,574 173,772
Contract retainage payable 317,374 32,416 -
Due to other governments 1,568,169 - -
Claims incurred but not reported 900,000 - -
Other 774,935 - -
$ 11,982,594 $ 1,333,264 $ 2,274,801
8. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
Due from
Other Funds
Due to Other
Funds
General fund -$ 272,825$
Nonmajor governmental funds - 752,358
Sewage disposal system 2,942 362,870
Municipal parking system 1,388,053 2,942
Total 1,390,995$ 1,390,995$
Advances to Advances from
Other Funds Other Funds
Nonmajor governmental funds -$ 196,602$
Municipal parking system 196,602 -
Total $ 196,602 $ 196,602
Accounts payable and accrued liabilities are comprised of the following:
The composition of interfund balances as of June 30, 2018, was as follows:
The above balances generally resulted from a time lag between the dates that interfund goods and services
are provided or reimbursable expenditures occur, transactions are recorded in the accounting system, and
payments between funds are made.
Due to and from primary government funds
Advances to and from primary government funds
Advances are made to the Special Assessments Fund to prevent a negative equity in pooled cash.
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CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Due from
primary
government
Due to
component
unit
Municipal parking system -$ 1,375$
Tax increment finance authority 1,375 -
Total 1,375$ 1,375$
Nonmajor Nonmajor Internal
governmental enterprise service
General fund funds funds funds Total
General fund -$ 5,320,506$ -$ 650,000$ 5,970,506$
Nonmajor governmental funds 100,000 2,272,051 941,290 - 3,313,341
Nonmajor enterprise funds - 29,104 - - 29,104
Total 100,000$ 7,621,661$ 941,290$ 650,000$ 9,312,951$
Transfers In
Transfers are used to: (1) move revenues from the fund that is required to collect them to the fund that is
required or allowed to expend them; (2) move receipts restricted to or allowed for debt service from the
funds collecting the receipts to the debt service fund as debt service payments become due; and (3) use
unrestricted revenues collected in the General Fund to finance various programs accounted for in other
funds in accordance with budgetary authorizations.
Due to and from component units
For the year ended June 30, 2018, interfund transfers consisted of the following:
Transfers Out
86
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
9. LONG-TERM DEBT
Interest Original
General obligation bonds Rate
Amount Amount
Governmental activities:
2007 Fire Station Refunding Bonds - Unlimited Tax 3.625-5.00%1,780,000$ 195,000$
2009 Capital Improvement Bonds - Limited Tax 3.15-6.85%10,197,000 8,065,000
2010 Fire Station Refunding Bonds - Unlimited Tax 2.60-2.65%2,470,000 305,000
2013 Energy Efficiently Refunding Bonds - Limited Tax 2.40%5,645,000 3,230,000
2010 Recovery Zone Economic Development Bonds 3.40-7.25%3,200,000 2,330,000
2015 Lansing Center Refunding Bonds - Limited Tax 2.00-3.00%1,770,000 1,205,000
25,062,000$ 15,330,000$
Business-type activities:
2009 Building Authority Refunding Bonds - Limited Tax 6.014-6.584% 8,161,691$ 2,767,490$
2012 Building Authority Refunding Bonds - Limited Tax 0.55-3.70%7,200,000 5,190,000
2007 Building Authority Refunding Bonds - Limited Tax 3.625-5.00%7,965,000 6,435,000
2014 Building Authority Refunding Bonds - Limited Tax 4.75%7,245,000 7,245,000
1997 Limited Tax Sewer Bond - 5005-09 2.25%4,746,780 281,780
1998 Limited Tax Sewer Bond - 5005-10 2.25%10,539,950 1,254,950
1999 Limited Tax Sewer Bond - 5005-11 2.50%10,120,000 1,255,000
2000 Limited Tax Sewer Bond - 5005-12 2.50%9,447,830 1,702,830
2001 Limited Tax Sewer Bond - 5005-13 2.50%10,573,046 2,528,046
2002 Limited Tax Sewer Bond - 5005-14 2.50%12,381,131 4,291,131
2003 Limited Tax Sewer Bond - 5005-15 2.50%10,145,688 4,110,688
2004 Limited Tax Sewer Bond - 5005-16 2.13%3,842,649 1,697,649
2005 Limited Tax Sewer Bond - 5005-17 2.13%8,003,778 3,503,778
2005 Limited Tax Sewer Bond - 5005-18 1.63%13,389,371 6,109,371
2006 Limited Tax Sewer Bond - 5005-19 1.63%18,216,346 9,601,346
2007 Limited Tax Sewer Bond - 5005-20 1.63%24,244,726 13,759,726
2008 Limited Tax Sewer Bond - 5005-21 2.50%27,494,933 18,010,453
2008 Limited Tax Sewer Bond - 5005-22 2.50%14,455,604 10,770,604
2009 Capital Improvement Bonds 4.10-7.05%9,803,000 8,595,000
2010 Limited Tax Sewer Bond - 5411-01 2.50%8,548,000 6,718,000
2015 Limited Tax Sewer Bond - 5211-01 2.50%3,372,405 2,962,405
General Obligation Bonds.The government issues general obligation bonds to provide funds for the
acquisition and construction of major capital facilities. General obligation bonds are direct obligations and
pledge the full faith and credit of the government. These bonds are issued as 10 to 30-year serial bonds
with varying amounts of principal maturing each year. General obligation bonds currently outstanding are as
follows:
87
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Interest Original
General obligation bonds (concluded) Rate
Amount Amount
Business-type activities (concluded):
2015 Limited Tax Sewer Bond - 5211-02 2.50%1,977,487$ 1,697,487$
2016 Limited Tax Sewer Bond - 5581-01 2.50%1,309,872 1,309,872
2014 Building Authority Refunding Bonds - Limited Tax 2.00-3.00%6,765,000 4,580,000
2017 Building Authority Refunding - Limited Tax 3.31-4.08%10,805,000 10,805,000
250,754,287$ 137,182,606$
Interest Original
Rate Amount Amount
Revenue bonds - business type activities
2013 Sewer Revenue and Refunding Bond 2.40%
21,765,000$ 15,625,000$
Pledged Revenues.The City has pledged future sewer customer revenues, net of specified operating
expenses, to repay $21,765,000 in sewer revenue and refunding bonds issued in 2013. Proceeds from the
bonds provided financing for the construction for various sewer infrastructure projects. The bonds are
payable solely from sewer customer net revenues and are payable through 2028. Annual principal and
interest payments on the bonds are expected to require less than 14% of net revenues. The total principal
and interest paid for the current year and total customer net revenues were $2,287,188 and $20,613,583
respectively.
Advance Refunding.In December 2017, the City issued $10,805,000 of General Obligation Limited Tax
Refunding Bonds to partially advance refund $5,394,201 of the City’s 2009 Building Authority Refunding
Bonds reported in its and business-type activities. The proceeds of the bonds were used to purchase U.S.
government securities that were placed in an escrow fund for the purpose of generating resources for all
future debt service payments on the refunded debt. As a result, the bonds are considered defeased and the
liability has been removed from the statement of net position. The bonds are to be called on May 1, 2021
through 2024. Accordingly, $5,394,200 of defeased debt remains outstanding at year-end. The refunding
resulted in a cash loss of $6,490,894 and an economic loss of $771,240.
Revenue Bonds.The City also issues bonds where the income derived from the acquired or constructed
assets is pledged to pay debt service. Revenue bonds outstanding at year-end are as follows:
88
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Interest Original
Rate Amount Amount
Installment purchase agreements
Governmental activities:
2014 Lease Purchase Agreement - Recycling Trucks 1.96%1,550,855$ 721,567$
2015 Ballpark Improvements Installment Purchase 3.00%13,500,000 11,567,829
$ 15,050,855 $ 12,289,396
Business-type activities:
2014 Lease Purchase Agreement - Recycling Carts 1.96%
1,737,000$ 808,500$
Interest Original
Rate Amount Amount
Loans payable
Governmental activities:
HUD Section 108 Loan 1.52%5,900,000$ 5,900,000$
2014 SIB Loan 3.00%1,828,428 1,576,545
$ 7,728,428 $ 7,476,545
Installment Purchase Agreements.The government enters into installment purchase agreements for
equipment and related capital assets. Installment purchase agreements outstanding at year-end are as
follows:
Loans payable.The government has entered into loan agreements with the certain State agencies for
program purposes. Loans payable at year-end are as follows:
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CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental activities
General obligation bonds 18,065,000$ -$ 2,735,000$ 15,330,000$ 2,295,000$
Installment purchase
agreements 13,757,531 - 1,468,135 12,289,396 1,015,376
Loans payable 7,728,428 - 251,883 7,476,545 234,543
Total installment debt 39,550,959 - 4,455,018 35,095,941 3,544,919
Deferred amounts:
For issuance discounts (66,154) - (6,833) (59,321) -
For issuance premiums 81,194 - 26,055 55,139 -
Compensated absences 9,725,419 1,194,026 961,589 9,957,856 961,589
Accrued workers
compensation 2,417,780 1,031,123 1,156,682 2,292,221 530,264
$ 51,709,198 $ 2,225,149 $ 6,592,511 $ 47,341,836 $ 5,036,772
Business-type activities
General obligation bonds 144,016,807$ 10,805,000$ 17,639,201$ 137,182,606$ 12,346,780$
Revenue bonds 17,175,000 - 1,550,000 15,625,000 1,550,000
Installment purchase
agreements 1,029,723 - 221,223 808,500 225,580
Total installment debt 162,221,530 10,805,000 19,410,424 153,616,106 14,122,360
Deferred amounts:
For issuance discounts (563,347) - (73,009) (490,338) -
For issuance premiums 2,115,702 - 236,164 1,879,538 -
Compensated absences 794,830 114,701 38,411 871,120 38,411
164,568,715$ 10,919,701$ 19,611,990$ 155,876,426$ 14,160,771$
Changes in Long-term Debt. Long-term liability activity for the year ended June 30, 2018, was as follows:
90
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Principal Interest Total Principal Interest Total
3,544,919$ 1,204,862$ 4,749,781$ 14,122,360$ 8,355,934$ 22,478,294$
3,245,527 1,097,291 4,342,818 14,129,973 7,774,848 21,904,821
3,762,075 995,597 4,757,672 13,934,233 8,103,844 22,038,077
3,452,029 881,508 4,333,537 13,360,297 7,451,294 20,811,591
2,456,002 772,177 3,228,179 11,576,080 5,610,736 17,186,816
12,504,431 2,506,496 15,010,927 51,494,488 15,587,159 67,081,647
6,130,958 404,855 6,535,813 20,761,270 5,740,393 26,501,663
- - - 10,847,405 1,481,109 12,328,514
- - - 3,390,000 54,425 3,444,425
35,095,941$ 7,862,786$ 42,958,727$ 153,616,106$ 60,159,742$ 213,775,848$
Subsequent borrowings
In September 2018, the City issued $6,210,000 in general obligation limited tax refunding bonds and
$1,665,000 in Michigan transportation fund bonds.
2024-2028
2022
Governmental Activities Business-type Activities
2021
2034-2038
For the governmental activities, compensated absences and other long-term debt are generally liquidated
by the General Fund.
Debt service requirements to maturity for all installment debt of the City are as follows:
Year
Ending
2023
Long-term debt disclosures, as applicable, for the City's component units are available in the separately
issued financial statements.
2020
2019
2029-2033
June 30
2039-2042
91
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
10. FUND BALANCES - GOVERNMENTAL FUNDS
Nonmajor
General Governmental
Fund Funds Totals
Nonspendable
Inventories 17,660$ 967,676$ 985,336$
Prepaids 21,777 37,309 59,086
Corpus of permanent fund - 1,837,504 1,837,504
39,437 2,842,489 2,881,926
Restricted
Major and local streets - 7,309,483 7,309,483
Drug law and narcotics
enforcement - 1,496,968 1,496,968
Downtown Lansing - 44,278 44,278
Debt service - 1,000 1,000
Capital improvements (unexpended
bond proceeds) - 157,709 157,709
- 9,009,438 9,009,438
Committed
Police and fire services 265 - 265
By ordinance (budget carryforwards) 283,550 3,800,166 4,083,716
Shopping district events and maintenance - - -
City parks - 475,702 475,702
Capital improvements - 4,561,473 4,561,473
283,815 8,837,341 9,121,156
Unassigned (deficit)17,003,260 (155,261) 16,847,999
Total fund balances -
governmental funds 17,326,512$ 20,534,007$ 37,860,519$
In accordance with GASB Statement No. 54,Fund Balance Reporting and Governmental Fund Type
Definitions,the City classifies fund balances based primarily on the extent to which it is bound to observe
constraints imposed upon the use of the resources reported in governmental funds. Detailed information on
fund balances of governmental funds is as follows:
92
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
11. NET INVESTMENT IN CAPITAL ASSETS
Governmental Business-type Component
Activities Activities Units
Capital assets:
Capital assets not being depreciated 25,302,787$ 19,534,040$ -$
Capital assets being depreciated, net 157,809,816 334,862,104 1,008
Total capital assets 183,112,603 354,396,144 1,008
Related debt:
General obligation bonds 15,330,000 137,182,606 -
Revenue bonds - 15,625,000 -
Installment purchase agreements 12,289,396 808,500 -
Loans payable 7,476,545 - -
Unamortized bond discounts (59,321) (490,338) -
Unamortized bond premiums 55,139 1,879,538 -
Deferred charge on bond refunding (84,687) (4,605,828) -
Amounts under leases receivable - (23,130,768) -
Unexpended bond proceeds (157,709) - -
Total related debt 34,849,363 127,268,710 -
Net investment in capital assets 148,263,240$ 227,127,434$ 1,008$
12. SEGMENT INFORMATION - ENTERPRISE FUNDS
13. RISK MANAGEMENT
The composition of net investment in capital assets as of June 30, 2018, was as follows:
The City of Lansing, Michigan is exposed to various risks of loss related to property loss, torts, errors and
omissions and employee injuries.
The government issued revenue bonds to finance certain improvements to its sewage disposal system.
Because the Sewage Disposal System, an individual fund that accounts entirely for the government’s sewage
activities, is a segment and is reported as a major fund in the fund financial statements, separate segment
disclosures herein are not required.
The City carries commercial insurance for claims relating to general liability, property, electronic data
processing, boiler and machinery, police professional and errors and omissions. The City has not
experienced settlements in excess of insurance coverage during the past three years. The City is uninsured
for acts of nature and environmental clean-up costs.
93
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
2018 2017
Estimated liability, beginning of year 885,000$ 656,064$
Estimated claims incurred,
including changes in estimates 9,664,043 9,903,853
Claim payments (9,649,043) (9,674,917)
Estimated liability, end of year 900,000$ 885,000$
2018 2017
Estimated liability, beginning of year 2,417,780$ 2,297,914$
Estimated claims incurred,
including changes in estimates 1,031,123 952,439
Claim payments (1,156,682) (832,573)
Estimated liability, end of year 2,292,221$ 2,417,780$
14. PROPERTY TAXES
Property taxes attach as an enforceable lien on property as of the date they are levied. City, community
college, and 50% of school taxes are levied and due July 1 and become delinquent after August 31. County
taxes and the balance of school taxes are levied and due December 1 and become delinquent after February
14. In March, taxes on real property still delinquent are purchased by the County's tax revolving funds.
Collections of community college, school, and county taxes and remittances are accounted for in the
general fund. City property tax revenues are recognized in the fiscal year for which the taxes are levied to
the extent that they result in current receivables (i.e., are collected within 60 days after fiscal year-end).
The City is permitted by charter and state law to levy taxes up to $20.00 per $1,000 of assessed valuation
for general operations other than the payment of principal and interest on long-term debt. The tax rate to
finance general governmental services other than the payment of principal and interest on long-term debt
for the year ended June 30, 2018 was $19.44 per $1,000 of taxable value.
Fiscal Year Ended June 30,
Fiscal Year Ended June 30,
The City is self-funded for Blue Cross Blue Shield healthcare coverage for employees and retirees. The City
maintains stop/loss coverage that limits its per-case exposure to $250,000. The City estimates healthcare
claims that are incurred but not reported as of year-end, which is accounted for in the City's Fringe Benefits
Internal Service Fund. Changes in the estimated liability were as follows:
The City is self-insured for workers’ compensation costs. The City estimates the liability for workers’
compensation claims that have been incurred through the end of the fiscal year, including those claims that
have been reported as well as those that have not yet been reported to the City. The current liability is
accounted for in the General Fund, with long-term liabilities accounted for in the Statement of Net
Position. The City has liability insurance coverage up to a maximum amount of $16,000,000 per occurrence
with a $350,000 deductible. Changes in the estimated long-term liability as well as the total estimated cost
of claims for the past two fiscal years were as follows:
94
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
15. CONTINGENT LIABILITIES
16. PENSION PLANS
Employees' Retirement System
Risk Management.The government is a defendant in various lawsuits. Although the outcome of these
lawsuits is not presently determinable, it is the opinion of the government’s counsel that resolution of these
matters will not have a material adverse effect on the financial condition of the government.
Plan Description.The City sponsors and administers the Employees’ Retirement System (the “Plan”), a
single-employer, defined benefit pension plan that covers general full-time employees of the City of
Lansing, Michigan and employees of the 54-A District Court. It does not include elected officials, who are
members of the Employees’ Money Purchase Pension Plan, nor does it include police officers and
firefighters, who are members of a separate City defined benefit pension plan. The Plan was established
and may be amended by the City Council and is administered by a nine member Board of Trustees. The
Board is comprised of the Mayor of the City, one member of the City Council appointed by the City Council,
the City Treasurer, the City Human Resources Director, three members of the retirement system to be
elected by the members of the system under rules adopted by the board, two residents of the State of
Michigan appointed by the Mayor, by and with the consent of the City Council, one of which is a retiree of
the retirement system. It is accounted for as a separate pension trust fund. Separate financial statements
are not issued for the Plan.
Federal Grant Programs.Amounts received or receivable from grantor agencies are subject to audit and
potential adjustment by grantor agencies, principally the federal government. Any disallowed claims,
including amounts already collected, may constitute a liability of the applicable funds. The amount, if any,
of expenditures which may be disallowed by the grantor cannot be determined at this time although the
government expects such amounts, if any, to be immaterial.
Summary of Significant Accounting Policies.The financial statements of the Plan are prepared using the
accrual basis of accounting. Plan member contributions are recognized in the period which the contributions
are due. The City’s contributions are recognized when due and a formal commitment to provide the
contribution has been made. Benefits and refunds are recognized when due and payable in accordance with
the terms of the Plan. Administration of the Plan is funded through the Plan’s investment earnings.
Method Used to Value Investments.Plan investments are reported at fair value. Short-term investments are
reported at cost, which approximates fair value. Securities traded on a national or international exchange
are valued at the last reported sales price at current exchange rates. Investments for which market
quotations are not readily available are valued at their fair values as determined by the custodian under the
direction of the Plan Board of Trustees, with the assistance of a valuation service.
All members may retire at age 50 with 25 or more years of credited service, or age 58 with 8 or more years
of credited service. Members are vested after completing 8 years of credited service. Retirement options
that provide for survivor benefits are available to members. The plan also provides death and disability
benefits. If a member leaves employment or dies before vesting, accumulated member contributions plus
interest are refunded to the member or designated beneficiary. Members who are vested and terminate
their employment prior to retirement will receive their benefit as a life annuity beginning at age 58.
95
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Retirees and beneficiaries currently receiving benefits 902
Terminated employees entitled to but not yet receiving benefits 75
Vested and non-vested active participants 394
Total membership 1,371
Multiplier
Percentage
United Auto Workers (UAW):
Hired after January 9, 2017 1.50%
Hired after October 18, 2013 1.70%
All others 2.75%
Teamsters Local 214:
Hired after September 2012 1.25%
All others 1.80%
Teamsters Local 580:
Hired after May 19, 2014 1.25%
All others 1.80%
Non-bargaining and all others
Hired after April 1, 2014 1.25%
All others 1.60%
District court exempt
Hired after June 1, 2014 1.25%
All others 1.60%
Contributions.The contribution requirements of Plan members are established and may be amended by the
City Council in accordance with City policies, union contracts, and Plan provisions. Employees are required
to make contributions to the Plan in rates from 3.00 to 6.50% depending on bargaining unit and hire date.
The City is required to contribute at actuarially determined rates expressed as a percentage of covered
payroll. The City’s contribution rate for the plan for the year ended June 30, 2018 was 47.8% of projected
valuation payroll.
Plan Membership. At December 31, 2017, plan membership consisted of the following:
Benefits Provided.Employees who retire with minimum age and years of service requirements are entitled
to annual retirement benefits, payable in monthly installments for life, in an amount equal to a percentage
of their final average compensation times years of credited service. Final average compensation is defined
as the average of the highest annual compensation paid over 2 consecutive years of credited service within
the last 10 years of credited service immediately preceding a member's termination of employment. The
benefit payments are calculated using the following rates for the various groups of general employees:
Bargaining Unit/Employee
Group
96
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Contribution
Percentage
United Auto Workers (UAW) 3.00%
Teamsters Local 214:
Hired after September 2012 5.00%
All others 6.50%
Teamsters Local 580:
Hired after May 9, 2014 5.00%
All others 6.35%
District court Teamsters:
Hired after April 2014 5.00%
All others 5.50%
District court exempt 5.50%
All others 6.50%
Balance
Employee savings fund 14,403,826$
Retirement reserve fund 109,230,841
Pension accumulation fund 28,184,102
Members benefit fund 16,740,047
Health insurance fund 31,583,522
Rate of Return.For the year ended June 30, 2018, the annual money-weighted rate of return on pension
plan investments, net of pension plan investment expense, was 5.87%. The money-weighted rate of return
expresses investment performance, net of investment expense, adjusted for the changing amounts actually
invested.
Investment Policy.The plan's policy in regard to the allocation of invested assets is established and may be
amended by the Board of Trustees. The investment policy has been formulated based on consideration of a
wide range of policies and describes the prudent investment process that the Board deems appropriate. The
Plan's asset allocation policy is shown on the following pages.
Bargaining Unit/Employee
Group
Concentrations.At June 30, 2018, the Plan held certain investments (other than those issued or explicitly
guaranteed by the U.S. government, mutual funds, external investment pools, or other pooled investments)
in certain organizations that represent 5% or more of the Plan's fiduciary net position. Please see Footnote
4 for the details of these concentrations.
Reserves.In accordance with the Plan policy, the City establishes reserves for various purposes. The
reserves are adjusted annually based on recommendations from the City's actuaries. The policy for creating
and adjusting reserves was established and can be amended by the Plan Board of Trustees. A summary of
the Plan reserves at June 30, 2018 is as follows:
Reserve/Group
97
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Total pension liability 305,528,755$
Plan fiduciary net position 168,558,816
Net pension liability 136,969,939$
Plan fiduciary net position as
percentage of total pension
liability 55.2%
Inflation
Salary increases
Investment rate of return
Changes in Actuarial Assumptions.There was one change in actuarial assumptions during fiscal year 2018, a
decrease in the assumed rates of inflation and investment return. These changes, along with updated
projections of fund solvency, also resulted in changes to the discount rates.
7.25%, net of investment expense and including
inflation (previous year: 7.40%)
Mortality is based on the RP-2000 tables for males and females. For Disabled members, the disabled
versions of these tables are used. Each of these tables is projected to 2026 using Scale BB and a 50% factor
is applied for pre-retirement deaths.
2.75% (previous year: 2.925%)
2.75%, plus service based increases (previous year:
2.925%)
The actuarial assumptions used in the December 31, 2017 valuation were based on the results of actuarial
experience analysis conducted in December 2016. Current year changes reflect changes made to actuarial
assumptions, assumed return of 7.25%, with 2.75% underlying inflation.
Actuarial Assumptions.The total pension liability was determined by an actuarial valuation as of December
31, 2017, rolled forward to June 30, 2018, using the following actuarial assumptions, applied to all periods
included in the measurement:
Net Pension Liability.The components of the net pension liability for the employees' retirement system at
June 30, 2018 were as follows:
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CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Target
Allocation
Long-term
Expected Real
Rate of Return
Money-
Weighted Rate
of Return
Domestic equity 27.00% 5.75% 1.53%
International equity - developed 12.00% 5.85% 0.70%
International equity - emerging 4.00% 6.25% 0.25%
Fixed income 25.00% 2.65% 0.66%
Real estate 10.00% 4.75% 0.48%
Global opportunistic fixed income 6.00% 4.10% 0.25%
Global equity long/short 10.00% 4.50% 0.45%
Absolute return 6.00% 4.25% 0.27%
100.00% 4.59%
Inflation 2.75%
Risk adjustments -0.09%
Investment rate of return 7.25%
Discount Rate.The discount rate used to measure the total pension liability was 7.25% (down from 7.37% in
2017). 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 City contributions will be made at rates
equal to the difference between actuarially determined contribution rates and the member rate. Based on
those assumptions, each plan’s fiduciary net position was projected to be available to make all projected
future benefit payments of current plan members. Therefore, the long-term expected rates of return on
pension plan investments was applied to all periods of projected benefit payments to determine the total
pension liability.
Asset Class
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which best-estimates of expected future real rates of return (expected returns, net of pension
plan investment expense and inflation) are developed for each 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. This is then modified through a Monte-
Carlo simulation process, by which a (downward) risk adjustment is applied to the baseline expected
return. Best estimates of arithmetic real rates of return for each major asset class included in the pension
plan’s target asset allocation as of June 30, 2018, and the final investment return assumption, are
summarized in the following table:
99
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Total Pension
Liability
(a)
Plan Fiduciary
Net Position
(b)
Net Pension
Liability
(a) - (b)
Balances at June 30, 2017 307,450,034$ 169,965,440$ 137,484,594$
Changes for the year:
Service cost 2,538,487 - 2,538,487
Interest 21,994,837 - 21,994,837
Differences between expected and
actual experience (6,451,827) - (6,451,827)
Changes in assumptions 3,099,448 - 3,099,448
Employer contributions - 10,843,000 (10,843,000)
Employee contributions - 1,230,857 (1,230,857)
Net investment income - 9,679,565 (9,679,565)
Benefit payments, including refunds of
employee contributions (23,102,224) (23,102,224) -
Administrative expense - (57,822) 57,822
Net changes (1,921,279) (1,406,624) (514,655)
Balances at June 30, 2018 305,528,755$ 168,558,816$ 136,969,939$
One Percent
Decrease
(6.25%)
Current
Discount Rate
(7.25%)
One Percent
Increase
(8.25%)
Net pension liability $ 163,649,909 $ 136,969,939 $ 114,074,452
Sensitivity of the Net Pension Liability to Changes in the Discount Rate.The following presents the net
pension liability of the City, calculated using the discount rate of 7.25%, as well as what the City’s net
pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower
(6.25%) or 1-percentage-point higher (8.25%) than the current rate:
Changes in the Net Pension Liability.The components of the change in the net pension liability are
summarized as follows:
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CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Net Deferred
Outflows
(Inflows) of
Resources
Difference between expected and actual experience -$ 3,225,913$ (3,225,913)$
Changes in assumptions 1,549,724 - 1,549,724
Net difference between projected and actual earnings
on pension plan investments 6,734,713 - 6,734,713
Total 8,284,437$ 3,225,913$ 5,058,524$
Year Ended
June 30, Amount
2019 2,732,052$
2020 2,537,306
2021 (666,089)
2022 455,255
Total 5,058,524$
Police and Fire Retirement System
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to
Pensions.For the year ended June 30, 2018, the City recognized pension expense of $5,277,438. At June
30, 2018, the City reported deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
Plan Description.The City sponsors and administers the Police and Fire Retirement System (the “Plan”), a
single-employer, defined benefit pension plan that covers all police officers and fire fighters who are full-
time employees of the City. The Plan was established and may be amended by the City Council and is
administered by an eight member Board of Trustees. The Board is comprised of the Mayor of the City, one
member of the City Council appointed by the City Council, the City Treasurer, a resident of the City who
shall be appointed by the Mayor, by and with the consent of Council, two members each of the police and
fire departments, to be elected by all the members of their respective departments. It is accounted for as
a separate pension trust fund. Separate financial statements are not issued for the Plan.
Payable to the Pension Plan.At June 30, 2018, the City did not have any outstanding amount of
contributions to the pension plan required for the year ended June 30, 2018.
Amounts reported as deferred outflows of resources and deferred inflows of resources related to pension
will be recognized in pension expense as follows:
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CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Retirees and beneficiaries currently receiving benefits 740
Terminated employees entitled to but not yet receiving benefits 20
Vested and non-vested active participants 365
Total membership 1,125
Method Used to Value Investments.Plan investments are reported at fair value. Short-term investments are
reported at cost, which approximates fair value. Securities traded on a national or international exchange
are valued at the last reported sales price at current exchange rates. Investments for which market
quotations are not readily available are valued at their fair values as determined by the custodian under the
direction of the Plan Board of Trustees, with the assistance of a valuation service.
Plan Membership. At December 31, 2017, plan membership consisted of the following:
Investment Policy.The plan's policy in regard to the allocation of invested assets is established and may be
amended by the Board of Trustees. The investment policy has been formulated based on consideration of a
wide range of policies and describes the prudent investment process that the Board deems appropriate. The
Plan's asset allocation policy is shown on the following pages.
Contributions.The contribution requirements of Plan members are established and may be amended by the
City Council in accordance with City policies, union contracts, and Plan provisions. Fire members are
required to contribute 10.0% of their annual wages to the plan. Police supervisors are required to
contribute 9.52% and police non-supervisors, 9.0%. Chapter 294 of the City of Lansing's Ordinance
establishes benefit provisions and requires that the portion of the annuity and pension reserves (which are
determined annually by the City’s actuary) not financed by member contributions shall be financed by
annual appropriations. The City’s contribution rate for the plan for the year ended June 30, 2018 was
44.6% of projected valuation payroll.
Benefits Provided.Annual retirement allowances are determined by multiplying final average compensation
by 3.2% for the first 25 years of credited service. The maximum allowance is 80% of final average
compensation. Final average compensation is the member's highest wages for 2 consecutive years.
Summary of Significant Accounting Policies.The financial statements of the Plan are prepared using the
accrual basis of accounting. Plan member contributions are recognized in the period which the contributions
are due. The City’s contributions are recognized when due and a formal commitment to provide the
contribution has been made. Benefits and refunds are recognized when due and payable in accordance with
the terms of the Plan. Administration of the Plan is funded through the Plan’s investment earnings.
Members may retire at age 55, or at any age with 25 or more years of credited service. Members are vested
after completing 10 years of credited service. Members are required to retire at age 60 (Police) or 70
(Fire). When an employee who had retired subsequent to August 31, 1966, dies, the plan provides for an
automatic pension to the retiree's spouse. This automatic pension is equal to 50% of the regular retirement
benefit the employee had been receiving at time of death. Effective July 30, 1990, members may elect a
reduced benefit, either 93% or 86% of the regular benefit, thereby increasing the spouse pension to 75% or
86% of the regular benefit, respectively. Alternately, members may elect a non-spousal beneficiary option.
The plan provides death and disability benefits. If a member leaves employment or dies before vesting,
accumulated member contributions plus interest are refunded to the member or designated beneficiary.
Members who are vested and terminate their employment have the option of deferred retirement benefits
until age 55 or withdrawing their contribution, thereby forfeiting any future benefits.
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CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Balance
Retirement reserve fund 291,879,983$
Health insurance fund 38,308,203
Total pension liability 444,999,992$
Plan fiduciary net position 291,879,983
Net pension liability 153,120,009$
Plan fiduciary net position as
percentage of total pension
liability 65.6%
Inflation
Salary increases
Investment rate of return
Actuarial Assumptions.The total pension liability was determined by an actuarial valuation as of December
31, 2017, rolled forward to June 30, 2018, using the following actuarial assumptions, applied to all periods
included in the measurement:
Net Pension Liability.The components of the net pension liability for the police and fire retirement system
at June 30, 2018, were as follows:
7.25%, net of investment expense and including
inflation (previous year: 7.35%)
Mortality is based on the RP-2000 tables (with Blue Collar adjustments for Police and Fire) for males and
females. For Disabled members, the disabled versions of these tables are used. Each of these tables is
projected to 2026 using Scale BB and a 50% factor is applied for pre-retirement deaths.
2.75% (previous year: 2.85%)
2.75%, plus service based increases (previous year:
2.85%)
Rate of Return.For the year ended June 30, 2018, the annual money-weighted rate of return on pension
plan investments, net of pension plan investment expense, was 7.10%. The money-weighted rate of return
expresses investment performance, net of investment expense, adjusted for the changing amounts actually
invested.
Concentrations.At June 30, 2018, the Plan held certain investments (other than those issued or explicitly
guaranteed by the U.S. government, mutual funds, external investment pools, or other pooled investments)
in certain organizations that represent 5% or more of the Plan's fiduciary net position. Please see Footnote
4 for the details of these concentrations.
Reserves.In accordance with the Plan policy, the City establishes reserves for various purposes. The
reserves are adjusted annually based on recommendations from the City's actuaries. The policy for creating
and adjusting reserves was established and can be amended by the Plan Board of Trustees. A summary of
the Plan reserves at June 30, 2018 is as follows:
Reserve/Group
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CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Target
Allocation
Long-term
Expected Real
Rate of Return
Money-
Weighted Rate
of Return
Domestic equity 32.00% 5.75% 1.83%
International equity - developed 12.00% 5.85% 0.70%
International equity - emerging 4.00% 6.25% 0.25%
Fixed income 22.00% 2.65% 0.58%
Real estate 10.00% 4.75% 0.48%
Global opportunistic fixed income 5.00% 4.10% 0.21%
Global equity long/short 10.00% 4.50% 0.45%
Absolute return 5.00% 4.25% 0.22%
100.00% 4.72%
Inflation 2.75%
Risk adjustments -0.22%
Investment rate of return 7.25%
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which best-estimates of expected future real rates of return (expected returns, net of pension
plan investment expense and inflation) are developed for each 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. This is then modified through a Monte-
Carlo simulation process, by which a (downward) risk adjustment is applied to the baseline expected
return. Best estimates of arithmetic real rates of return for each major asset class included in the pension
plan’s target asset allocation as of June 30, 2018, and the final investment return assumption, are
summarized in the following table:
Asset Class
Discount Rate.The discount rate used to measure the total pension liability was 7.25% (down from 7.29% in
2017). 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 City contributions will be made at rates
equal to the difference between actuarially determined contribution rates and the member rate. Based on
those assumptions, each plan’s fiduciary net position was projected to be available to make all projected
future benefit payments of current plan members. Therefore, the long-term expected rates of return on
pension plan investments was applied to all periods of projected benefit payments to determine the total
pension liability.
The actuarial assumptions used in the December 31, 2017 valuation were based on the results of actuarial
experience analysis conducted in December 2016. Current year changes reflect changes made to actuarial
assumptions, assumed return of 7.25%, with 2.75% underlying inflation.
Changes in Actuarial assumptions.There was one change in actuarial assumptions during fiscal year 2018, a
decrease in the assumed rates of inflation and investment return. These changes, along with updated
projections of fund solvency, also resulted in changes to the discount rates.
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CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Total Pension
Liability
(a)
Plan Fiduciary
Net Position
(b)
Net Pension
Liability
(a) - (b)
Balances at June 30, 2017 429,670,098$ 288,441,203$ 141,228,895$
Changes for the year:
Service cost 6,533,877 - 6,533,877
Interest 30,641,722 - 30,641,722
Changes in benefit terms 779 - 779
Differences between expected and
actual experience 8,263,623 - 8,263,623
Changes in assumptions 1,647,044 - 1,647,044
Employer contributions - 12,686,000 (12,686,000)
Employee contributions - 2,650,019 (2,650,019)
Net investment income - 19,937,149 (19,937,149)
Benefit payments, including refunds of
employee contributions (31,757,151) (31,757,151) -
Administrative expense - (77,237) 77,237
Net changes 15,329,894 3,438,780 11,891,114
Balances at June 30, 2018 444,999,992$ 291,879,983$ 153,120,009$
One Percent
Decrease
(6.25%)
Current
Discount Rate
(7.25%)
One Percent
Increase
(8.25%)
Net pension liability $ 197,368,900 $ 153,120,009 $ 111,892,938
Changes in the Net Pension Liability.The components of the change in the net pension liability are
summarized as follows:
Sensitivity of the Net Pension Liability to Changes in the Discount Rate.The following presents the net
pension liability of the City, calculated using the discount rate of 7.25%, as well as what the City’s net
pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower
(6.25%) or 1-percentage-point higher (8.25%) than the current rate:
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CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Net Deferred
Outflows
(Inflows) of
Resources
Difference between expected and actual experience 8,168,758$ 9,654,059$ (1,485,301)$
Changes in assumptions 14,594,915 - 14,594,915
Net difference between projected and actual earnings
on pension plan investments 6,686,706 - 6,686,706
Total 29,450,379$ 9,654,059$ 19,796,320$
Year Ended
June 30, Amount
2019 12,570,020$
2020 7,090,490
2021 51,914
2022 83,896
Total 19,796,320$
Summary Pension Information
Employees'
Retirement
System
Police & Fire
Retirement
System Total
Net pension liability 136,969,939$ 153,120,009$ 290,089,948$
Deferred outflows - pension 8,284,437 29,450,379 37,734,816
Deferred inflows - pension 3,225,913 9,654,059 12,879,972
The table below summarizes the net pension liability and related deferrals for the Employees' Retirement
System and the Police and Fire Retirement System as presented in the Statement of Net Position.
Payable to the Pension Plan.At June 30, 2018, the City did not have any outstanding amount of
contributions to the pension plan required for the year ended June 30, 2018.
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to
Pensions.For the year ended June 30, 2018, the City recognized pension expense of $27,606,986. At June
30, 2018, the City reported deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
Amounts reported as deferred outflows of resources and deferred inflows of resources related to pension
will be recognized in pension expense as follows:
For governmental activities, pension liabilities are expected to be liquidated by the general fund.
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CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Employees' Money Purchase Pension Plan
Newly hired employees are eligible to participate in the City's defined contribution plan. Eligible employees
include those normally scheduled to work at least 1,000 hours during a plan year. To receive benefits under
the plan, the participant must have met the age and service requirements outline in his or her applicable
bargaining unit agreement. Distributions are calculated based on the employee's vesting percentage and the
individual's allocation of investment funds. In accordance with the Plan agreement, the City contributes 4%
of employees' base pay to the plan. The defined contribution plan is administered by the Board of Trustees
as designed in the City of Lansing Defined Contribution Plan which stipulates that the trustees have such
authority. All amendments to the plan, including funding requirements, must be approved by the City
Council subject to the terms of collective bargaining agreements. City contributions for the year ended
June 30, 2018 were $127,648 for plan members. Employee contributions for the year ended June 30, 2018
were $115,217. All amendments to the Plan, including funding requirements, must be approved by the City
Council. The assets of the plan are held in trust for the exclusive benefit of participants and their
beneficiaries.
107
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Employees' Employees' Police Police Employees'
Retirement Retirement and Fire and Fire Money Retiree
System System Retirement Retirement Purchase Healthcare
Pension OPEB System System OPEB Pension Plan VEBA Totals
Assets
Cash and cash equivalents 4,316,042$ -$ 5,710,817$ -$ -$ -$ 10,026,859$
Investments:
U.S. treasuries 7,381,317 1,418,623 9,153,567 1,224,095 - - 19,177,602
U.S. agencies 11,081,327 2,129,732 14,615,274 1,954,482 - - 29,780,815
Collateralized mortgage
obligations 207,589 39,897 569,232 76,123 - - 892,841
Mutual funds 103,631,966 19,917,141 179,813,176 24,046,188 2,583,165 26,641,923 356,633,559
Domestic equities 35,007,421 6,728,114 75,275,831 10,066,542 - - 127,077,908
International equities 514,156 98,816 1,172,875 156,847 - - 1,942,694
Emerging market equities - - - - 729,285 729,285
Money market funds 6,510,181 1,251,199 5,862,057 783,926 - 760,156 15,167,519
Contribution receivable 1,854 - 3,668 - 4,628 - 10,150
Dividends and interest receivable 179,835 - 236,626 - - 417 416,878
Total assets 168,831,688 31,583,522 292,413,123 38,308,203 2,587,793 28,131,781 561,856,110
Liabilities
Accounts payable 272,872 - 533,140 - - - 806,012
Net position restricted for
Pension benefits 168,558,816 - 291,879,983 - 2,587,793 - 463,026,592
Other postemployment benefits - 31,583,522 - 38,308,203 - 28,131,781 98,023,506
Total net position 168,558,816$ 31,583,522$ 291,879,983$ 38,308,203$ 2,587,793$ 28,131,781$ 561,050,098$
Pension and Other Postemployment Benefits Net Position
Financial statements for individual pension and employee benefit plans:
108
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Employees' Employees' Police Police Employees'
Retirement Retirement and Fire and Fire Money Retiree
System System Retirement Retirement Purchase Healthcare
Pension OPEB System System OPEB Pension Plan VEBA Totals
Additions
Investment income:
Net appreciation in fair value
of investments 7,532,983$ 2,630,990$ 6,421,895$ 3,572,965$ -$ 1,698,587$ 21,857,420$
Interest income - - 8,326 - 198,453 - 206,779
Dividend income 2,771,355 - 14,541,940 - - - 17,313,295
Investment expenses (624,773) - (1,035,012) - (8,400) - (1,668,185)
Net investment income 9,679,565 2,630,990 19,937,149 3,572,965 190,053 1,698,587 37,709,309
Contributions:
Employer 10,843,000 10,921,222 12,686,000 13,163,201 127,648 515,000 48,256,071
Plan members 1,230,857 - 2,650,019 - 115,217 - 3,996,093
Total contributions 12,073,857 10,921,222 15,336,019 13,163,201 242,865 515,000 52,252,164
Total additions 21,753,422 13,552,212 35,273,168 16,736,166 432,918 2,213,587 89,961,473
Deductions
Participant benefits 23,102,224 10,286,249 31,757,151 11,960,557 180,192 - 77,286,373
Administrative expense 57,822 444,973 77,237 600,644 - - 1,180,676
Total deductions 23,160,046 10,731,222 31,834,388 12,561,201 180,192 - 78,467,049
Change in net position (1,406,624) 2,820,990 3,438,780 4,174,965 252,726 2,213,587 11,494,424
Net position restricted
for pension and other
postemployment benefits:
Beginning of year 169,965,440 28,762,532 288,441,203 34,133,238 2,335,067 25,918,194 549,555,674
End of year 168,558,816$ 31,583,522$ 291,879,983$ 38,308,203$ 2,587,793$ 28,131,781$ 561,050,098$
Changes in Pension and Other Postemployment Benefits Net Position
109
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
17. OTHER POSTEMPLOYMENT BENEFITS
Voluntary Employees Beneficiary Association (VEBA)
Employees' Retirement System
Primary Government
Plan Description.The City of Lansing contributes to the Employees’ Retirement System, the Police and
Fire Retirement System, and the Voluntary Employees Beneficiary Association amounts to pre-fund
postemployment healthcare. In the Employees’ Retirement System and the Police and Fire Retirement
System, these other postemployment benefits (OPEB) are set up as reserves in the pension plans, and their
investments are commingled with the investments of the pension plan. Portfolio makeup is reported as a
percentage of total pension plan assets. Earnings are calculated based on a seven year smoothed rate of
return of the retirement systems. Eligible participants include any retirees who receive pension benefits
under their respective pension plans, with the exception of Teamster 580 employees hired after May 2014.
OPEB plan provisions are established and may be amended by the City Council, subject to the City’s
various collective bargaining agreements. Separate financial statements are not prepared for the plans.
The City of Lansing Voluntary Employees Beneficiary Association (the “Plan”) is a single-employer defined
benefit postemployment healthcare plan established by the City to provide medical and healthcare
benefits for retirees and their beneficiaries. Eligible participants include any retirees who receive pension
benefits under one of the City’s pension plans. The Plan is funded by a trust agreement established
pursuant to Section 501(c)(9) of the Internal Revenue Code that allows for the formation of a VEBA. During
the year, the City contributed $515,000 to the Plan. It is accounted for as a separate OPEB trust fund.
Method Used to Value Investments.Plan investments are reported at fair value. Securities traded on a
national or international exchange are valued at the last reported sales price at current exchange rates.
Investments for which market quotations are not readily available are valued at their fair values as
determined by the custodian under the direction of each plans’ board of trustees, with the assistance of a
valuation service.
Plan Description.The City provides postemployment health care benefits, in accordance with labor
agreements, to full-time employees of the City and employees of the 54-A District Court (not including
police officers and firefighters who are members of the Police and Fire Retirement System). Members
eligible for pension benefits under the Employees’ Retirement System are also eligible to receive health
care benefits, with the exception of Teamster 580 employees hired after May, 2014. The Plan was
established and may be amended by the City Council and is administered by a nine member Board of
Trustees. The Board is comprised of the Mayor of the City, one member of the City Council appointed by
the City Council, the City Treasurer, the City Human Resources Director, three members of the retirement
system to be elected by the members of the system under rules adopted by the board, two residents of the
State of Michigan appointed by the Mayor, by and with the consent of the City Council, one of which is a
retiree of the retirement system. It is accounted for as a separate OPEB trust fund.
110
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Retirees and beneficiaries receiving benefits 848
Terminated plan members entitled to but
not yet receiving benefits 77
Active plan members 404
Total 1,329
Total OPEB liability 223,906,447$
Plan fiduciary net position 59,715,303
City's net OPEB liability 164,191,144$
Plan fiduciary net position as
percentage of total OPEB
liability 26.7%
Membership of the Plan consisted of the following at January 1, 2018, the date of the most recent
actuarial valuation:
Benefits Provided.The City provides the full cost of health benefits to retirees, payable to health care
vendors, and also reimburses retirees eligible for Medicare benefits of $134.00 per month for each covered
retiree and eligible dependent(s) eligible for retiree healthcare. The payments are charged to the fringe
benefit internal service fund of the City and are recognized as expenses as payments are made.
Contributions.The contribution requirements of the Plan members and the City are established and may
be amended by the City Council, in accordance with City policies, union contracts, and Plan provisions.
Retirees and their beneficiaries are eligible for postemployment healthcare benefits if they qualify under
the various contracts. The required contribution is based on projected pay-as-you-go financing
requirements, with an additional amount to prefund benefits as determined through the bi-annual
actuarial valuation. For the year ended June 30, 2018, the City contributed $11,436,222 (direct benefit
payments of $10,731,222 and City contributions of $705,000) to the Plan.
Rate of Return.For the year ended June 30, 2018, the annual money-weighted rate of return on
investments, net of investment expense, was 7.10%. The money-weighted rate of return expresses
investment performance, net of investment expense, adjusted for the changing amounts actually invested.
Net OPEB Liability of the City.The components of the net OPEB liability of the City at June 30, 2018,
were as follows:
111
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Inflation 2.75%
Investment rate of return
Retirement age
type of eligibility condition
Healthcare cost trend rate
Year Beginning
July 1, Pre-Medicare Medicare
2018 6.00% 4.50%
2019 5.50% 4.50%
2020 5.00% 4.25%
2021 4.50% 4.00%
2022+ 4.50% 4.00%
Pre-retirement: 50% of base rates
Post-disablement: RP2000 disabled tables with Scale BB
The actuarial assumptions used in the January 1, 2018 valuation were based on the results of an actuarial
experience study conducted in 2016.
Investment Policy.The Plan's policy in regard to the allocation of invested assets is established and may
be amended by the Board of Trustees. The investment policy has been formulated based on consideration
of a wide range of policies and describes the prudent investment process that the Board deems
appropriate. The Plan's asset allocation policy as of June 30, 2018 is summarized in the table on the
following page.
7.25%, net of OPEB plan investment expense,
including inflation
Age-based table of rates that are specific to the
Mortality rates are assumed to be in accordance with the Retired Pensioners (RP) 2000 Combined Healthy
tables, with Blue Collar adjustments projected Scale BB, to account for anticipated future improvements
in life expectancy. Adjustments to these rates are as follows:
Changes in Actuarial assumptions.There were no changes in actuarial assumptions, except the change in
discount rate.
Actuarial Assumptions.The total OPEB liability was determined by an actuarial valuation as of January 1,
2018, rolled forward to June 30, 2018, using the following actuarial assumptions, applied to all periods
included in the measurement:
112
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Target
Allocation
Long-term
Expected Real
Rate of Return
Money-
Weighted Rate
of Return
Domestic equity 27.00% 5.75% 1.54%
International equity - developed 12.00% 5.85% 0.70%
International equity - emerging 4.00% 6.25% 0.25%
Fixed income - U.S. 25.00% 2.65% 0.66%
Real assets 10.00% 4.75% 0.48%
Global opportunistic fixed income 6.00% 4.10% 0.25%
Global equity long/short 10.00% 4.50% 0.45%
Absolute return 6.00% 4.25% 0.26%
100.00% 4.59%
Inflation 2.75%
Risk adjustment -0.09%
Investment rate of return 7.25%
The long-term expected rate of return on OPEB plan investments was determined using a building-block
method in which best-estimates of expected future real rates of return (expected returns, net of OPEB
plan investment expense and inflation) are developed for each 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. This is then modified through a
Monte-Carlo simulation process, by which a (downward) risk adjustment is applied to the baseline
expected return. Best estimates of arithmetic real rates of return for each major asset class included in
the OPEB plan’s target asset allocation as of June 30, 2018 are summarized in the following table:
Asset Class
Discount Rate.The discount rate used to measure the total OPEB liability was 5.90% (up from 5.80% in
2017). The City’s funding expectations/policy is to contribute a percentage of payroll each year to their
OPEB trust, in addition to paying the annual benefits directly. The City has also assumed that benefits will
begin being paid from trust assets once the funding ratio exceeds 40%. Based on this information, the City
projects that benefits will be paid from the trust from 2028 through 2054. This is done on a closed group
basis. Therefore, the expected trust return of 7.25% (between 2028 and 2054) is blended with the 20-year
Aa bond rate of 3.62% (before 2028 and after 2054).
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CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Total OPEB
Liability
(a)
Plan Fiduciary
Net Position
(b)
Net OPEB
Liability
(a) - (b)
Balances at June 30, 2017 231,583,031$ 54,680,726$ 176,902,305$
Changes for the year:
Service cost 1,438,197 - 1,438,197
Interest on total OPEB liability 13,221,134 - 13,221,134
Differences between expected and
actual experience (9,321,837) - (9,321,837)
Changes in assumptions (2,727,829) - (2,727,829)
Employer contributions - 11,436,222 (11,436,222)
Net investment income - 4,329,577 (4,329,577)
Benefit payments (10,286,249) (10,286,249) -
Administrative expense - (444,973) 444,973
Net changes (7,676,584) 5,034,577 (12,711,161)
Balances at June 30, 2018 223,906,447$ 59,715,303$ 164,191,144$
1% Decrease
(4.90%)
Current
Discount Rate
(5.90%)
1% Increase
(6.90%)
City's net OPEB liability 193,014,545$ 164,191,144$ 138,655,002$
1% Decrease
(3.5% / 3.0%)
Healthcare
Ultimate Cost
Trend Rates
(4.5% / 4.0%)
1% Increase
(5.5% / 3.0%)
City's net OPEB liability 139,753,010$ 164,191,144$ 193,620,218$
Changes in the Net OPEB Liability.The components of the change in the net OPEB liability are summarized
as follows:
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate.The following presents the net OPEB
liability of the City, calculated using the discount rate of 5.90%, as well as what the City’s net OPEB
liability would be if it were calculated using a discount rate that is 1% lower (4.90%) or 1% higher (6.90%)
than the current rate:
Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rate Assumption.The
following presents the net OPEB liability of the City, calculated using the healthcare cost trend rate of
6.0% pre-Medicare / 4.5% Medicare, trending to an ultimate rate of 4.5% pre-Medicare / 4.0% Medicare, as
well as what the City’s net OPEB liability would be if it were calculated using healthcare cost trend rates
that are 1% lower (5.0% pre-Medicare / 3.5% Medicare, trending to an ultimate rate of 3.5% pre-Medicare /
3.0% Medicare) or 1% higher (7.0% pre-Medicare / 5.5% Medicare, trending to an ultimate rate of 5.5% pre-
Medicare / 5.0% Medicare) than the current healthcare cost trend rates:
114
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Net Deferred
Outflows
(Inflows) of
Resources
Difference between expected and actual experience -$ 4,660,918$ (4,660,918)$
Changes in assumptions - 1,363,914 (1,363,914)
Net difference between projected and actual earnings
on OPEB plan investments - 292,179 (292,179)
Total -$ 6,317,011$ (6,317,011)$
Year Ended
June 30, Amount
2019 (6,097,877)$
2020 (73,045)
2021 (73,045)
2022 (73,044)
Total (6,317,011)$
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB.
For the year ended June 30, 2018, the City recognized OPEB expense of $5,042,072. At June 30, 2018, the
City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the
following sources:
Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will
be recognized in OPEB expense as follows:
Plan Description.The City also provides postemployment health care benefits, in accordance with labor
agreements, to members who are eligible to receive pension benefits under the Police and Fire Retirement
System. The Plan was established and may be amended by the City Council and is administered by an eight
member Board of Trustees. The Board is comprised of the Mayor of the City, one member of the City
Council appointed by the City Council, the City Treasurer, a resident of the City who shall be appointed by
the Mayor, by and with the consent of Council, two members each of the police and fire departments, to
be elected by all the members of their respective departments.
Police and Fire Retirement System
OPEB Plan Fiduciary Net Position.Detailed information about the OPEB plan’s fiduciary net position is
available in the combining statements for the pension and other postemployment benefit trust funds
preceding this footnote.
Payable to the OPEB Plan. At June 30, 2018, the City reported had no amount payable to the OPEB plan.
115
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Retirees and beneficiaries receiving benefits 652
Terminated plan members entitled to but
not yet receiving benefits 20
Active plan members 365
Total 1,037
Total OPEB liability 277,078,552$
Plan fiduciary net position 38,308,203
City's net OPEB liability 238,770,349$
Plan fiduciary net position as
percentage of total OPEB
liability 13.8%
Rate of Return.For the year ended June 30, 2018, the annual money-weighted rate of return on
investments, net of investment expense, was 8.71%. The money-weighted rate of return expresses
investment performance, net of investment expense, adjusted for the changing amounts actually invested.
Net OPEB Liability of the City.The components of the net OPEB liability of the City at June 30, 2018,
were as follows:
Benefits Provided.The City provides the full cost of health benefits to retirees, payable to health care
vendors, and also reimburses retirees eligible for Medicare benefits of $121.90 per month for each covered
retiree and dependent(s). The payments are charged to the fringe benefit internal service fund of the City
and are recognized as expenses as payments are made.
Membership of the Plan consisted of the following at January 1, 2018, the date of the most recent
actuarial valuation:
Contributions.The contribution requirements of the Plan members and the City are established and may
be amended by the City Council, in accordance with City policies, union contracts, and Plan provisions.
Retirees and their beneficiaries are eligible for postemployment healthcare benefits if they qualify under
the various contracts. The required contribution is based on projected pay-as-you-go financing
requirements, with an additional amount to prefund benefits as determined through the bi-annual
actuarial valuation. For the year ended June 30, 2018, the City contributed $13,163,201 (direct benefit
payments of $12,561,201 and City contributions of $602,000) to the Plan.
116
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Inflation 2.75%
Investment rate of return
Retirement age
type of eligibility condition
Healthcare cost trend rate
Year Beginning
July 1, Pre-Medicare Medicare
2018 6.00% 4.50%
2019 5.50% 4.50%
2020 5.00% 4.25%
2021 4.50% 4.00%
2022 4.50% 4.00%
2023+ 4.50% 4.00%
Pre-retirement: 50% of base rates
Post-disablement: RP2000 disabled tables with Scale BB
including inflation
Age-based table of rates that are specific to the
Investment Policy.The Plan's policy in regard to the allocation of invested assets is established and may
be amended by the Board of Trustees. The investment policy has been formulated based on consideration
of a wide range of policies and describes the prudent investment process that the Board deems
appropriate. The Plan's asset allocation policy as of June 30, 2018 is summarized in the table below.
Mortality rates are assumed to be in accordance with the Retired Pensioners (RP) 2000 Combined Healthy
tables, with Blue Collar adjustments projected Scale BB, to account for anticipated future improvements
in life expectancy. Adjustments to these rates are as follows:
The actuarial assumptions used in the January 1, 2018 valuation were based on the results of an actuarial
experience study conducted in 2016.
Actuarial Assumptions.The total OPEB liability was determined by an actuarial valuation as of January 1,
2018, rolled forward to June 30, 2018, using the following actuarial assumptions, applied to all periods
included in the measurement:
7.25%, net of OPEB plan investment expense,
Changes in Actuarial assumptions.There were no changes in actuarial assumptions, except the change in
discount rate.
117
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Target
Allocation
Long-term
Expected Real
Rate of Return
Money-
Weighted Rate
of Return
Domestic equity 32.00% 5.75% 1.84%
International equity - developed 12.00% 5.85% 0.70%
International equity - emerging 4.00% 6.25% 0.25%
Fixed income - U.S. 22.00% 2.65% 0.58%
Real assets 10.00% 4.75% 0.48%
Global opportunistic fixed income 5.00% 4.10% 0.21%
Global equity long/short 10.00% 4.50% 0.45%
Absolute return 5.00% 4.25% 0.21%
100.00% 4.72%
Inflation 2.75%
Risk adjustment -0.22%
Investment rate of return 7.25%
Discount Rate.The discount rate used to measure the total OPEB liability was 5.67% (up from 5.47% in
2017). The City’s funding expectations/policy is to contribute a percentage of payroll each year to their
OPEB trust, in addition to paying the annual benefits directly. The City has assumed that benefits will be
paid from trust assets once the funding ratio exceeds 30%, and until the fund is depleted. Based on this
information, the City projects that benefits will be paid from the trust from 2031 to 2060. This is done on a
closed group basis. Therefore, the expected trust return of 7.25% (after 2037) is blended with the 20-year
Aa bond rate of 3.62% (before 2037).
The long-term expected rate of return on OPEB plan investments was determined using a building-block
method in which best-estimates of expected future real rates of return (expected returns, net of OPEB
plan investment expense and inflation) are developed for each 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. This is then modified through a
Monte-Carlo simulation process, by which a (downward) risk adjustment is applied to the baseline
expected return. Best estimates of arithmetic real rates of return for each major asset class included in
the OPEB plan’s target asset allocation as of June 30, 2018 are summarized in the following table:
Asset Class
118
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Total OPEB
Liability
(a)
Plan Fiduciary
Net Position
(b)
Net OPEB
Liability
(a) - (b)
Balances at June 30, 2017 294,892,197$ 34,133,238$ 260,758,959$
Changes for the year:
Service cost 3,409,339 - 3,409,339
Interest on total OPEB liability 15,994,328 - 15,994,328
Differences between expected and
actual experience (17,811,401) - (17,811,401)
Changes in assumptions (7,445,354) - (7,445,354)
Employer contributions - 13,163,201 (13,163,201)
Net investment income - 3,572,965 (3,572,965)
Benefit payments (11,960,557) (11,960,557) -
Administrative expense - (600,644) 600,644
Net changes (17,813,645) 4,174,965 (21,988,610)
Balances at June 30, 2018 277,078,552$ 38,308,203$ 238,770,349$
1% Decrease
(4.67%)
Current
Discount Rate
(5.67%)
1% Increase
(6.67%)
City's net OPEB liability 278,052,239$ 238,770,349$ 204,366,019$
1% Decrease
(3.5% / 3.0%)
Healthcare
Ultimate Cost
Trend Rates
(4.5% / 4.0%)
1% Increase
(5.5% / 3.0%)
City's net OPEB liability 207,365,842$ 238,770,349$ 277,135,365$
Changes in the Net OPEB Liability.The components of the change in the net OPEB liability are summarized
as follows:
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate.The following presents the net OPEB
liability of the City, calculated using the discount rate of 5.67%, as well as what the City’s net OPEB
liability would be if it were calculated using a discount rate that is 1% lower (4.67%) or 1% higher (6.67%)
than the current rate:
Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rate Assumption.The
following presents the net OPEB liability of the City, calculated using the healthcare cost trend rate of
6.0% pre-Medicare / 4.5% Medicare, trending to an ultimate rate of 4.5% pre-Medicare / 4.0% Medicare, as
well as what the City’s net OPEB liability would be if it were calculated using healthcare cost trend rates
that are 1% lower (5.0% pre-Medicare / 3.5% Medicare, trending to an ultimate rate of 3.5% pre-Medicare /
3.0% Medicare) or 1% higher (7.0% pre-Medicare / 5.5% Medicare, trending to an ultimate rate of 5.5% pre-
Medicare / 5.0% Medicare) than the current healthcare cost trend rates:
119
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Net Deferred
Outflows
(Inflows) of
Resources
Difference between expected and actual experience -$ 13,358,551$ (13,358,551)$
Changes in assumptions - 5,584,015 (5,584,015)
Net difference between projected and actual earnings
on OPEB plan investments - 878,644 (878,644)
Total -$ 19,821,210$ (19,821,210)$
Year Ended
June 30, Amount
2019 (6,533,850)$
2020 (6,533,850)
2021 (6,533,849)
2022 (219,661)
Total (19,821,210)$
Payable to the OPEB Plan. At June 30, 2018, the City reported had no amount payable to the OPEB plan.
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB.
For the year ended June 30, 2018, the City recognized OPEB expense of $10,995,801. At June 30, 2018, the
City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the
following sources:
Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will
be recognized in OPEB expense as follows:
OPEB Plan Fiduciary Net Position.Detailed information about the OPEB plan’s fiduciary net position is
available in the combining statements for the pension and other postemployment benefit trust funds
preceding this footnote.
For governmental activities, other postemployment benefit liabilities are expected to be liquidated by the
general fund.
120
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
Summary OPEB Information
Employees'
Retirement
System
Police & Fire
Retirement
System Total
Net OPEB liability 164,191,144$ 238,770,349$ 402,961,493$
Deferred inflows - OPEB 6,317,011 19,821,210 26,138,221
18. OPERATING LEASES
19. TAX ABATEMENTS
·
·
During fiscal year 2014, the City entered into an operating lease with the Lansing School District (the
"District"), for approximately 86,900 square feet of the Hill Center for Academics and Technology for the
purpose of operating a police precinct. The term of the lease runs through June 30, 2018 and is currently
being negotiated. The City is required to make approximately $800,000 worth of improvements to the
leased space, the cost of which will be capitalized by the District. Rent payments were made to the
District by the City in monthly installments of $10,417 ($125,000 annually) for the year ended June 30,
2018.
Because Lansing is an older city, vacant land, or “green space” for new buildings is scarce, the City offers
tax abatements to make redevelopment and rehabilitation of existing buildings economically viable for
developers, who must consider the cost of rehabilitating existing, often older, buildings which may involve
environmental remediation, against the generally lesser cost of building on vacant land outside the City.
These tax abatements are designed to level the “playing field” for urban communities to encourage
redevelopment of vacant buildings, and to attract and retain private investment and jobs within the City.
The City of Lansing provides tax abatements under several different programs:
Industrial property tax abatements are granted in the State of Michigan under Public Act 198 to
promote economic development, creation of jobs, and new or improved facilities. The Industrial
Facilities Tax (IFT) Exemption must be approved by both the City (after a public hearing is held) and
the State of Michigan. IFT exemptions can cover real and/or personal property. By State law, the
exemption must be applied for no later than six months after commencement of the project and must
be accompanied by a written agreement between the taxpayer and the local unit. An exemption allows
for taxation on IFT property at 50% of the local property tax millage rate for up to 12 years. A
certificate may be revoked and taxes recaptured for noncompliance with the terms of the agreement.
Property taxes abated by the City under this program for fiscal year 2018 amounted to $511,765.
The State of Michigan allows for Commercial Rehabilitation Exemption under Public Act 210 if making
substantial improvements to a business or multi-family residential facility. The City had no Commercial
Rehabilitation Exemptions for fiscal year 2018.
The table below summarizes the net OPEB liability and related deferrals for the Employees' Retirement
System and the Police and Fire Retirement System as presented in the Statement of Net Position.
121
CITY OF LANSING , MICHIGAN
Notes to Financial Statements
·
·
20.RESTATEMENTS
21.SUBSEQUENT EVENT
The Brownfield Redevelopment Authority encourages environmental cleanup and economic
development through its Brownfield Redevelopment Plan under Public Act 318. A developer performs
redevelopment and cleanup activities at a site that is obsolete or blighted. The increased tax revenues
resulting from the increase in taxable value are captured by the City and used to repay the developer
for qualifying expenses. There is no provision for recovery of abated taxes because the developer is
only paid for eligible expenses on a reimbursement-basis. Property taxes abated by the Authority under
this program for fiscal year 2018, through direct reimbursement to developers from current tax
captures, amounted to $219,490. In addition, there are reserve liabilities reported in the financial
statements that represent tax captures set aside for future developer reimbursements. Property taxes
abated by the Authority under this program for fiscal year 2018 amounted to $265,468.
The City adopted the provisions of GASB Statement No. 75, Accounting and Financial Reporting for
Postemployment Benefits Other than Pensions,in the current year. As a result of this change, beginning
net position of governmental activities, business-type activities, the sewage disposal system enterprise
fund, the municipal parking system enterprise fund, and nonmajor enterprise funds was decreased by
$329,708,733, $41,270,601, $23,958,764, $7,308,542, and 10,003,295, respectively.
Subsequent to the fiscal year-end, an income tax was adopted by the City of East Lansing, which will begin
January 1, 2019, and which impacts income tax revenues for the City of Lansing for its residents that work
in East Lansing. While that potential was anticipated for fiscal year 2019 and is not expected to result in
any budgetary adjustments for fiscal year 2019, the East Lansing income tax is expected to result in a
reduction in Lansing's income tax revenues by about $800,000 annually.
The Lansing Entertainment and Public Facilities Authority, a component unit of the City, adopted the
provisions of GASB Statement No. 80,Blending Requirements for Certain Component Units,in the current
year. As a result of this change, beginning net position was decreased by $587,397.
To incentivize new or expanded businesses, Public Act 328 allows for Personal Property Tax Exemptions
for qualified businesses located within eligible distressed communities. The exemption must be
approved by the City Commission and the State Treasurer. Once approved, the taxpayer is exempt from
personal property tax on new investments after the date of the exemption. The City can recapture the
taxes if the business defaults on the terms of the written agreement. Property taxes abated by the City
under this program for fiscal year 2018 amounted to $6,529,341.
122
REQUIRED SUPPLEMENTARY INFORMATION
123
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Pension Plan
Employees' Retirement System
2018 2017 2016 2015 2014
Total pension liability
Service cost 2,538,487$ 2,711,461$ 2,977,084$ 2,857,948$ 2,982,624$
Interest on total pension liability 21,994,837 22,403,009 22,268,516 22,671,909 22,722,630
Difference between expected and
actual experience (6,451,827) (23,183,264) (4,937,823) (6,422,330) -
Assumption changes 3,099,448 3,706,512 7,575,775 - -
Benefit payments, including refunds (23,102,224) (22,913,214) (22,860,449) (22,462,587) (22,790,522)
Net change in total pension liability (1,921,279) (17,275,496) 5,023,103 (3,355,060) 2,914,732
Total pension liability, beginning of year 307,450,034 324,725,530 319,702,427 323,057,487 320,142,755
Total pension liability, end of year 305,528,755 307,450,034 324,725,530 319,702,427 323,057,487
Plan fiduciary net position
Employer contributions 10,843,000 10,246,872 10,181,620 10,547,556 9,361,009
Employee contributions 1,230,857 1,216,519 1,088,943 1,128,120 1,290,678
Pension plan net investment income (loss) 9,679,565 17,412,568 (2,790,190) 4,399,543 17,887,635
Benefit payments (including refunds)(23,102,224) (22,913,214) (22,860,449) (22,462,587) (22,957,379)
Pension plan administrative expense (57,822) (47,217) (126,486) (174,818) (741,037)
Net change in plan fiduciary net position (1,406,624) 5,915,528 (14,506,562) (6,562,186) 4,840,906
Plan fiduciary net position, beginning of year 169,965,440 164,049,912 178,556,474 185,118,660 180,277,754
Plan fiduciary net position, end of year 168,558,816 169,965,440 164,049,912 178,556,474 185,118,660
Net pension liability 136,969,939$ 137,484,594$ 160,675,618$ 141,145,953$ 137,938,827$
Plan fiduciary net position as a percentage
of total pension liability 55.2% 55.3% 50.5% 55.9% 57.3%
Covered payroll 22,672,891$ 20,901,389$ 23,085,894$ 19,769,460$ 20,874,143$
Net pension liability as a percentage
of covered payroll 604.1% 657.8% 696.0% 714.0% 660.8%
There were no changes in actuarial assumptions during fiscal year 2016, except for the change in discount rate due to a lower b ond rate.
Schedules of Changes in Net Pension Liability and Related Ratios
Note: GASB 67 was implemented in fiscal year 2014. This schedule is being built prospectively. Ultimately, 10 years of data will be
presented.
Fiscal Year Ending June 30,
Assumption changes:There was one change in actuarial assumptions during fiscal year 2018, a decrease in the assumed rates of inflation
and investment return. These changes, along with updated projections of fund solvency, also resulted in changes to the discount rates.
There were changes in actuarial assumptions during fiscal year 2017 based on the experience study completed in December 2016. There
was a change in the discount rate due to a higher bond rate.
124
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Pension Plan
Employees' Retirement System
Schedule of the Net Pension Liability
Fiscal Year
Ending
June 30,
Total Pension
Liability
Plan Net
Position
Net Pension
Liability
Plan Net
Position as
Percentage of
Total Pension
Liability
Covered
Payroll
Net Pension
Liability as
Percentage of
Covered
Payroll
2014 323,057,487$ 185,118,660$ 137,938,827$ 57.3% 20,874,143$ 660.8%
2015 319,702,427 178,556,474 141,145,953 55.9% 19,769,460 714.0%
2016 324,725,530 164,049,912 160,675,618 50.5% 23,085,894 696.0%
2017 307,450,034 169,965,440 137,484,594 55.3% 20,901,389 657.8%
2018 305,528,755 168,558,816 136,969,939 55.2% 22,672,891 604.1%
Note: GASB 67 was implemented in fiscal year 2014. This schedule is being built prospectively. Ultimately, 10 years of data
will be presented.
125
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Pension Plan
Employees' Retirement System
Fiscal Year
Ending
June 30,
Actuarially
Determined
Contribution*
Actual
Contribution
Contribution
Deficiency
(Excess)*
Covered
Payroll
Actual
Contribution as
Percentage of
Covered
Payroll
2009 6,048,000$ 6,477,000$ (429,000)$ 30,602,000$ 21.2%
2010 6,472,349 6,043,861 428,488 27,766,628 21.8%
2011 7,297,083 7,297,083 - 26,068,735 28.0%
2012 7,596,879 7,523,534 73,345 22,838,598 32.9%
2013 8,586,536 8,586,536 - 20,874,143 41.1%
2014 9,361,009 9,361,009 - 21,521,242 43.5%
2015 10,547,556 10,547,556 - 19,769,460 53.4%
2016 10,181,620 10,181,620 - 23,085,894 44.1%
2017 10,246,872 10,246,872 - 20,901,389 49.0%
2018 10,185,060 10,843,000 (657,940) 22,672,891 47.8%
*
Notes to Schedule of Contributions
Valuation Date December 31, 2016
Notes
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry-age normal
Amortization method Level percent of payroll, closed
Remaining amortization
period 25 years
Asset valuation method Closed; 5-year smooth market
Inflation 2.925% (previous year: 3.10%)
Salary increases 2.925% (previous year: 3.10%)
Investment rate of return 7.40%, net of investment expense and including inflation (previous year: 7.60%)
Retirement age
Mortality Mortality is based on the RP-2000 tables for males and females. For Disabled members,
the disabled versions of these tables are used. Each of these tables is projected to 2026
using Scale BB and a 50% factor is applied for pre-retirement deaths.
The City contributed in excess of its FY 2009 Actuarially Determined Contribution (ADC). The City's FY 2010 contribution
was reduced by the dollar amount of the FY 2009 overpayment. The FY 2012 City contribution was reduced by $73,345 in
recognition of additional contributions by United Auto Workers (UAW) employees, which were negotiated and contributed
after the establishment of the June 30, 2012 ADC from the December 31, 2010 valuation.
The actuarially determined contribution was based on projected covered payroll. Employer contributions were made in full
based on actual covered payroll. Accordingly, the actuarially determined contribution has been expressed above as a
percentage of actual payroll.
Actuarially determined contribution rates are calculated as of the December 31 that is
6 months prior to the beginning of the fiscal year in which contributions are reported.
Age-based table of rates that are specific to the type of eligibility condition.
Schedule of Contributions
126
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Pension Plan
Employees' Retirement System
Fiscal Year
Ending
June 30,
Annual
Return
2014 13.67%
2015 2.43%
2016 -1.60%
2017 10.91%
2018 5.87%
(1)Annual money-weighted rate of return, net of investment expenses
Note: GASB 67 was implemented in fiscal year 2014. This schedule is being built prospectively. Ultimately, 10 years of data
will be presented.
Schedule of Investment Returns
(1)
127
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Pension Plan
Police and Fire Retirement System
2018 2017 2016 2015 2014
Total pension liability
Service cost 6,533,877$ 6,133,683$ 6,371,845$ 6,350,378$ 6,614,784$
Interest on total pension liability 30,641,722 30,519,676 30,197,513 29,159,382 27,896,927
Benefit changes 779 - - - -
Difference between expected and actual experience 8,263,623 (19,308,117) 7,884,167 3,159,996 -
Assumption changes 1,647,044 25,078,592 3,281,341 - -
Benefit payments, including refunds (31,757,151) (31,102,186) (29,503,964) (27,969,021) (26,270,724)
Net change in total pension liability 15,329,894 11,321,648 18,230,902 10,700,735 8,240,987
Total pension liability, beginning of year 429,670,098 418,348,450 400,117,548 389,416,813 381,175,826
Total pension liability, end of year 444,999,992 429,670,098 418,348,450 400,117,548 389,416,813
Plan fiduciary net position
Employer contributions 12,686,000 11,521,768 10,884,312 11,050,091 11,248,857
Employee contributions 2,650,019 2,840,914 2,608,214 2,950,832 2,911,896
Pension plan net investment income (loss) 19,937,149 32,116,305 (6,040,910) 8,965,080 34,016,621
Benefit payments (including refunds)(31,757,151) (31,102,186) (29,503,964) (27,969,021) (26,852,038)
Pension plan administrative expense (77,237) (50,996) (128,903) (173,849) (1,141,506)
Net change in plan fiduciary net position 3,438,780 15,325,805 (22,181,251) (5,176,867) 20,183,830
Plan fiduciary net position, beginning of year 288,441,203 273,115,398 295,296,649 300,473,516 280,289,686
Plan fiduciary net position, end of year 291,879,983 288,441,203 273,115,398 295,296,649 300,473,516
Net pension liability 153,120,009$ 141,228,895$ 145,233,052$ 104,820,899$ 88,943,297$
Plan fiduciary net position as a percentage
of total pension liability 65.6% 67.1% 65.3% 73.8% 77.2%
Covered payroll 28,435,952$ 27,585,521$ 27,078,405$ 24,407,740$ 25,611,974$
Net pension liability as a percentage
of covered payroll 538.5% 512.0% 536.3% 429.5% 347.3%
There were no changes in actuarial assumptions during fiscal year 2016, except for the change in discount rate due to a lower b ond rate.
Note: GASB 67 was implemented in fiscal year 2014. This schedule is being built prospectively. Ultimately, 10 years of data will be
presented.
Schedules of Changes in Net Pension Liability and Related Ratios
Fiscal Year Ending June 30,
Assumption changes:There was one change in actuarial assumptions during fiscal year 2018, a decrease in the assumed rates of inflation
and investment return. These changes, along with updated projections of fund solvency, also resulted in changes to the discount rates.
There were changes in actuarial assumptions during fiscal year 2017 based on the experience study completed in December 2016. There was
a change in the discount rate due to a higher bond rate.
128
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Pension Plan
Police and Fire Retirement System
Schedule of the Net Pension Liability
Fiscal Year
Ending
June 30,
Total Pension
Liability
Plan Net
Position
Net Pension
Liability
Plan Net
Position as
Percentage of
Total Pension
Liability
Covered
Payroll
Net Pension
Liability as
Percentage of
Covered
Payroll
2014 389,416,813$ 300,473,516$ 88,943,297$ 77.2% 25,611,974$ 347.3%
2015 400,117,548 295,296,649 104,820,899 73.8% 24,407,740 429.5%
2016 418,348,450 273,115,398 145,233,052 65.3% 27,078,405 536.3%
2017 429,670,098 288,441,203 141,228,895 67.1% 27,585,521 512.0%
2018 444,999,992 291,879,983 153,120,009 65.6% 28,435,952 538.5%
Note: GASB 67 was implemented in fiscal year 2014. This schedule is being built prospectively. Ultimately, 10 years of data
will be presented.
129
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Pension Plan
Police and Fire Retirement System
Fiscal Year
Ending
June 30,
Actuarially
Determined
Contribution*
Actual
Contribution
Contribution
Deficiency
(Excess)*
Covered
Payroll
Actual
Contribution as
Percentage of
Covered
Payroll
2009 6,094,397$ 6,483,000$ (388,603)$ 30,443,000$ 21.3%
2010 7,179,360 6,790,757 388,603 28,536,056 23.8%
2011 8,240,688 8,240,688 - 25,128,835 32.8%
2012 9,242,173 9,057,080 185,093 26,121,411 34.7%
2013 10,133,599 10,133,599 - 25,636,626 39.5%
2014 11,248,857 11,248,857 - 26,405,725 42.6%
2015 11,050,091 11,050,091 - 24,407,740 45.3%
2016 10,884,312 10,884,312 - 27,078,405 40.2%
2017 11,521,768 11,521,768 - 27,585,521 41.8%
2018 12,562,547 12,686,000 (123,453) 28,435,952 44.6%
*
Notes to Schedule of Contributions
Valuation Date December 31, 2016
Notes
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry-age normal
Amortization method Level percent of payroll, closed
Remaining amortization
period 25 years
Asset valuation method Closed; 5-year smooth market
Inflation 2.85% (previous year: 3.10%)
Salary increases 2.85% (previous year: 3.10%)
Investment rate of return 7.35%, net of investment expense and including inflation (previous year: 7.60%)
Retirement age
Mortality Mortality is based on the RP-2000 tables (with Blue Collar adjustments for Police and
Fire) for males and females. For Disabled members, the disabled versions of these
tables are used. Each of these tables is projected to 2026 using Scale BB and a 50%
factor is applied for pre-retirement deaths.
The City contributed in excess of its FY 2009 Actuarially Determined Contribution (ADC). The City's FY 2010 contribution
was reduced by the dollar amount of the FY 2009 overpayment. The FY 2012 City contribution was reduced by $185,093 in
recognition of additional contributions by International Association of Firefighters (IAFF) employees, which were
negotiated and contributed after the establishment of the June 30 , 2012 ADC from the December 31, 2010 valuation.
The actuarially determined contribution was based on projected covered payroll. Employer contributions were made in full
based on actual covered payroll. Accordingly, the actuarially-determined contribution has been expressed above as a
percentage of actual payroll.
Actuarially determined contribution rates are calculated as of the December 31 that is
6 months prior to the beginning of the fiscal year in which contributions are reported.
Age-based table of rates that are specific to the type of eligibility condition.
Schedule of Contributions
130
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Pension Plan
Police and Fire Retirement System
Fiscal Year
Ending
June 30,
Annual
Return
2014 17.28%
2015 3.04%
2016 -2.09%
2017 12.06%
2018 7.10%
(1)Annual money-weighted rate of return, net of investment expenses
Note: GASB 67 was implemented in fiscal year 2014. This schedule is being built prospectively. Ultimately, 10 years of data
will be presented.
Schedule of Investment Returns
(1)
131
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Other Postemployment Benefits Plan
Employees' Retirement System
Schedule of Changes in Net OPEB Liability and Related Ratios
Fiscal Year Ending June 30,
2018 2017
Total OPEB liability
Service cost 1,438,197$ 1,550,428$
Interest on total OPEB liability 13,221,134 12,976,683
Difference between expected and actual experience (9,321,837) -
Changes in assumptions (2,727,829) -
Benefit payments (10,286,249) (10,116,593)
Net change in total OPEB liability (7,676,584) 4,410,518
Total OPEB liability, beginning of year 231,583,031 227,172,513
Total OPEB liability, end of year 223,906,447 231,583,031
Plan fiduciary net position
Employer contributions 11,436,222 11,305,756
OPEB plan net investment income 4,329,577 5,209,669
Benefit payments (10,286,249) (10,116,593)
Administrative expense (444,973) (389,163)
Net change in plan fiduciary net position 5,034,577 6,009,669
Plan fiduciary net position, beginning of year 54,680,726 48,671,057
Plan fiduciary net position, end of year 59,715,303 54,680,726
Net OPEB liability 164,191,144$ 176,902,305$
Plan fiduciary net position as a percentage
of total OPEB liability 26.7% 23.6%
Covered payroll 21,251,418$ 20,901,389$
Net OPEB liability as a percentage
of covered payroll 772.6% 846.4%
Note: GASB 74 was implemented in fiscal year 2017. This schedule is being built prospectively. Ultimately, 10 years of data
will be presented.
Assumption changes:There were no changes in actuarial assumptions during fiscal year 2018, except the change in
discount rate.
132
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Other Postemployment Benefits Plan
Employees' Retirement System
Schedule of the Net OPEB Liability
Fiscal Year
Ending
June 30,
Total OPEB
Liability
Plan Net
Position
Net OPEB
Liability
Plan Net
Position as
Percentage of
Total OPEB
Liability
Covered
Payroll
Net OPEB
Liability as
Percentage of
Covered
Payroll
2017 231,583,031$ 54,680,726$ 176,902,305$ 23.6% 20,901,389$ 846.4%
2018 223,906,447 59,715,303 164,191,144 26.7% 21,251,418 772.6%
Note: GASB 74 was implemented in fiscal year 2017. This schedule is being built prospectively. Ultimately, 10 years of data
will be presented.
133
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Other Postemployment Benefits Plan
Employees' Retirement System
Fiscal Year
Ending
June 30,
Actuarially
Determined
Contribution
Actual
Contribution
Contribution
Deficiency
(Excess)
Covered
Payroll
Actual
Contribution as
Percentage of
Covered
Payroll
2009 9,021,963$ 10,855,711$ (1,833,748)$ 30,602,000$ 35.5%
2010 10,608,281 9,782,538 825,743 27,766,628 35.2%
2011 8,819,018 9,773,601 (954,583) 26,068,735 37.5%
2012 14,915,958 10,363,847 4,552,111 22,838,598 45.4%
2013 12,775,667 10,147,780 2,627,887 20,874,143 48.6%
2014 14,057,619 11,048,992 3,008,627 21,521,242 51.3%
2015 13,270,701 9,212,322 4,058,379 19,769,460 46.6%
2016 11,447,334 8,814,471 2,632,863 23,085,894 38.2%
2017 10,582,235 11,305,756 (723,521) 20,901,389 54.1%
2018 10,910,284 11,436,222 (525,938) 21,251,418 53.8%
Notes to Schedule of Contributions
Valuation Date January 1, 2016
Notes
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry-age normal
Amortization method Level percentage of pay
Remaining amortization period 24 years
Asset valuation method Market value
Inflation
Investment rate of return
Retirement age
Mortality
Health care trend rates Year Beginning
July 1, Pre-Medicare Medicare
2018 6.00% 4.50%
2019 5.50% 4.50%
2020 5.00% 4.25%
2021 4.50% 4.00%
2022+ 4.50% 4.00%
Mortality rates are assumed to be in accordance with the Retired Pensioners (RP) 2000
Combined Healthy tables, with Blue Collar adjustments projected Scale BB, to account
for anticipated future improvements in life expectancy. Adjustments to these rates are
as follows:Pre-retirement:50% of base rates;Post-disablement:RP2000 disabled
tables with Scale BB
Actuarially determined contribution rates are calculated as of the January 1 that is 18
months prior to the beginning of the fiscal year in which contributions are reported.
2.75% (previously 2.85%)
7.25% (previously 7.40%)
Age-based table of rates that are specific to the type of eligibility condition.
Schedule of Contributions
134
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Other Postemployment Benefits Plan
Employees' Retirement System
Fiscal Year
Ending
June 30,
Annual
Return (1)
2017 9.90%
2018 7.10%
(1)Annual money-weighted rate of return, net of investment expenses
Note: GASB 74 was implemented in fiscal year 2017. This schedule is being built prospectively. Ultimately, 10 years of data
will be presented.
Schedule of Investment Returns
135
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Other Postemployment Benefits Plan
Police and Fire Retirement System
Schedule of Changes in Net OPEB Liability and Related Ratios
Fiscal Year Ending June 30,
2018 2017
Total OPEB liability
Service cost 3,409,339$ 3,749,359$
Interest on total OPEB liability 15,994,328 15,584,783
Difference between expected and actual experience (17,811,401) -
Changes in assumptions (7,445,354)
Benefit payments (11,960,557) (11,065,440)
Net change in total OPEB liability (17,813,645) 8,268,702
Total OPEB liability, beginning of year 294,892,197 286,623,495
Total OPEB liability, end of year 277,078,552 294,892,197
Plan fiduciary net position
Employer contributions 13,163,201 12,290,749
OPEB plan net investment income 3,572,965 3,487,200
Benefit payments (11,960,557) (11,065,440)
Administrative expense (600,644) (525,309)
Net change in plan fiduciary net position 4,174,965 4,187,200
Plan fiduciary net position, beginning of year 34,133,238 29,946,038
Plan fiduciary net position, end of year 38,308,203 34,133,238
Net OPEB liability 238,770,349$ 260,758,959$
Plan fiduciary net position as a percentage
of total OPEB liability 13.8% 11.6%
Covered payroll 20,667,007$ 27,585,521$
Net OPEB liability as a percentage
of covered payroll 1155.3% 945.3%
Note: GASB 74 was implemented in fiscal year 2017. This schedule is being built prospectively. Ultimately, 10 years of data
will be presented.
Assumption changes:There were no changes in actuarial assumptions during fiscal year 2018, except the change in
discount rate.
136
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Other Postemployment Benefits Plan
Police and Fire Retirement System
Schedule of the Net OPEB Liability
Fiscal Year
Ending
June 30,
Total OPEB
Liability
Plan Net
Position
Net OPEB
Liability
Plan Net
Position as
Percentage of
Total OPEB
Liability
Covered
Payroll
Net OPEB
Liability as
Percentage of
Covered
Payroll
2017 294,892,197$ 34,133,238$ 260,758,959$ 11.6% 27,585,521$ 945.3%
2018 277,078,552 38,308,203 238,770,349 13.8% 20,667,007 1155.3%
Note: GASB 74 was implemented in fiscal year 2017. This schedule is being built prospectively. Ultimately, 10 years of data
will be presented.
137
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Other Postemployment Benefits Plan
Police and Fire Retirement System
Fiscal Year
Ending
June 30,
Actuarially
Determined
Contribution
Actual
Contribution
Contribution
Deficiency
(Excess)
Covered
Payroll
Actual
Contribution as
Percentage of
Covered
Payroll
2009 12,258,018$ 9,673,825$ 2,584,193$ 30,443,000$ 31.8%
2010 16,563,477 9,585,692 6,977,785 28,536,056 33.6%
2011 16,474,153 9,844,226 6,629,927 25,128,835 39.2%
2012 17,844,155 9,888,796 7,955,359 26,121,411 37.9%
2013 17,489,692 11,170,202 6,319,490 25,636,626 43.6%
2014 16,945,536 11,198,663 5,746,873 26,405,725 42.4%
2015 17,923,366 11,561,406 6,361,960 24,407,740 47.4%
2016 17,276,901 12,879,016 4,397,885 27,078,405 47.6%
2017 19,759,521 12,290,749 7,468,772 27,585,521 44.6%
2018 15,968,029 13,163,201 2,804,828 20,667,007 63.7%
Notes to Schedule of Contributions
Valuation Date January 1, 2016
Notes
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry-age normal
Amortization method Level percentage of pay
Remaining amortization period 24 years
Asset valuation method Market value
Inflation
Investment rate of return
Retirement age
Mortality
Health care trend rates Year Beginning
July 1, Pre-Medicare Medicare
2018 6.00% 4.50%
2019 5.50% 4.50%
2020 5.00% 4.25%
2021 4.50% 4.00%
2022 4.50% 4.00%
2023+ 4.50% 4.00%
Mortality rates are assumed to be in accordance with the Retired Pensioners (RP) 2000
Combined Healthy tables, with Blue Collar adjustments projected Scale BB, to account
for anticipated future improvements in life expectancy. Adjustments to these rates are
as follows:Pre-retirement:50% of base rates;Post-disablement:RP2000 disabled
tables with Scale BB
Actuarially determined contribution rates are calculated as of the January 1 that is 18
months prior to the beginning of the fiscal year in which contributions are reported.
2.75% (previously 2.85%)
7.25% (previously 7.35%)
Age-based table of rates that are specific to the type of eligibility condition.
Schedule of Contributions
138
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Other Postemployment Benefits Plan
Police and Fire Retirement System
Fiscal Year
Ending
June 30,
Annual
Return (1)
2017 9.89%
2018 8.71%
(1)Annual money-weighted rate of return, net of investment expenses
Note: GASB 74 was implemented in fiscal year 2017. This schedule is being built prospectively. Ultimately, 10 years of data
will be presented.
Schedule of Investment Returns
139
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140
COMBINING AND INDIVIDUAL FUND FINANCIAL
STATEMENTS AND SCHEDULES
141
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2018
Special Debt Capital
Revenue Service Projects Permanent Totals
Assets
Cash and cash equivalents 92,029$ -$ 89,710$ -$ 181,739$
Equity in pooled cash and investments 11,775,911 1,000 4,588,367 1,837,504 18,202,782
Accounts receivable, net 96,627 - 212,011 - 308,638
Special assessments receivable - - 237,499 - 237,499
Loans receivable 1,224,460 - - - 1,224,460
Accrued interest receivable 2,113,196 - - - 2,113,196
Due from other governments, net 4,964,156 - - - 4,964,156
Inventories 967,676 - - - 967,676
Prepaids - - 37,309 - 37,309
Total assets 21,234,055$ 1,000$ 5,164,896$ 1,837,504$ 28,237,455$
Liabilities
Accounts payable 1,459,163$ -$ 170,906$ -$ 1,630,069$
Deposits payable 89,147 - - - 89,147
Accrued payroll 72,230 - - - 72,230
Indemnity bonds 43,867 - - - 43,867
Due to other funds 752,358 - - - 752,358
Advances from other funds - - 196,602 - 196,602
Due to other governments 571,506 - - - 571,506
Unearned revenue 813,855 - - - 813,855
Total liabilities 3,802,126 - 367,508 - 4,169,634
Deferred inflows of resources
Unavailable revenues - loans and
accrued interest receivable 3,337,656 - - - 3,337,656
Unavailable revenues - special
assessments - - 196,158 - 196,158
Total deferred inflows of resources 3,337,656 - 196,158 - 3,533,814
Fund balances
Nonspendable 967,676 - 37,309 1,837,504 2,842,489
Restricted 8,850,729 1,000 157,709 - 9,009,438
Committed 4,275,868 - 4,561,473 - 8,837,341
Unassigned (deficit) - - (155,261) - (155,261)
Total fund balances 14,094,273 1,000 4,601,230 1,837,504 20,534,007
Total liabilities, deferred inflows of
resources and fund balances 21,234,055$ 1,000$ 5,164,896$ 1,837,504$ 28,237,455$
CITY OF LANSING, MICHIGAN
142
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
Special Debt Capital
Revenue Service Projects Permanent Totals
Revenues
Property taxes and special assessments 552,751$ 535,040$ 55,837$ -$ 1,143,628$
Intergovernmental 22,996,101 - - - 22,996,101
Charges for services 2,607,004 - 557,568 - 3,164,572
Fines and forfeits 466,203 - - - 466,203
Interest and rents 92,566 - 12,961 23,740 129,267
Contributions 10,000 - - - 10,000
Other revenues 1,194,107 - - - 1,194,107
Total revenues 27,918,732 535,040 626,366 23,740 29,103,878
Expenditures
Current expenditures:
General government 3,442,993 - - - 3,442,993
Public safety 1,551,900 - - - 1,551,900
Highways and streets 10,104,034 - - - 10,104,034
Community development 7,645,107 - - - 7,645,107
Debt service:
Principal 1,231,884 665,000 - - 1,896,884
Interest 420,125 35,165 - - 455,290
Capital outlay 2,260,912 - 2,885,830 - 5,146,742
Total expenditures 26,656,955 700,165 2,885,830 - 30,242,950
Revenues over (under) expenditures 1,261,777 (165,125) (2,259,464) 23,740 (1,139,072)
Other financing sources (uses)
Transfers in 4,644,432 165,125 2,783,000 29,104 7,621,661
Transfers out (2,272,051) - (1,017,559) (23,731) (3,313,341)
Total other financing sources (uses)2,372,381 165,125 1,765,441 5,373 4,308,320
Net change in fund balances 3,634,158 - (494,023) 29,113 3,169,248
Fund balances, beginning of year 10,460,115 1,000 5,095,253 1,808,391 17,364,759
Fund balances, end of year 14,094,273$ 1,000$ 4,601,230$ 1,837,504$ 20,534,007$
CITY OF LANSING, MICHIGAN
143
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144
CITY OF LANSING, MICHIGAN
Nonmajor Special Revenue Funds
Major Streets Fund – This fund accounts for revenues received from the State of Michigan for the
City's share of state gasoline and weight taxes, which is used for maintenance of major streets.
Local Streets Fund – This fund accounts for revenues received from the State of Michigan for the
City's share of state gasoline and weight taxes, which is used for maintenance of local streets.
Drug Law Enforcement Federal Fund – This fund accounts for federal revenues, from the
Departmens of Justice and Treasury, set aside for drug law enforcement under the provisions of
Federal Grant Agreements.
Drug Law Enforcement State and Local Fund – This fund accounts for state and local revenues,
from the Departmens of Justice and Treasury, set aside for drug law enforcement under the
provisions of State of Michigan Public Act 135 of 1985, as amended.
Community Development Block Grant Program Fund – This fund accounts for revenues received
from the Department of Housing and Urban Development. These revenues are restricted to
accomplishing the various objectives of Community Development Block Grant Programs, within
specific target areas.
Downtown Lansing, Inc. Fund – This fund accounts for assessments received from businesses
located in the district. The revenues are used for special events and maintenance of the district.
Building Department Fund – This fund accounts for revenues and expenditures resulting from the
enforcement of the State Construction Code Act of 1999 (PA 245 of 1999).
Parks Department Fund – This fund accounts for contributions and transfers which are restricted
for park expenditures.
State and Federal Grants Fund - This fund accounts for all revenues received from miscellaneous
grants and contributions. These revenues are used for projects as detailed in individual grant
applications.
Tri-County Metro Fund – This fund accounts for the operations of the Tri-County Metro Narcotics
Squad.
145
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2018
Drug Law Community
Drug Law Enforcement Development
Major Local Enforcement State and Block Grant
Streets Streets Federal Local Program
Assets
Cash and cash equivalents -$ -$ -$ 23,000$ -$
Equity in pooled cash and investments 7,624,031 1,459,744 297,514 750,807 -
Accounts receivable, net 21,520 68,148 - - -
Loans receivable - - - - 1,185,000
Accrued interest receivable - - - - 2,113,196
Due from other governments, net 2,081,810 483,336 - - 856,590
Inventories 967,676 - - - -
Total assets 10,695,037$ 2,011,228$ 297,514$ 773,807$ 4,154,786$
Liabilities
Accounts payable 193,624$ 391,449$ -$ 34,518$ 131,282$
Deposits payable - - - - -
Accrued payroll - - - - 15,924
Indemnity bonds 43,867 - - - -
Due to other funds - - - - 709,384
Due to other governments - - - - -
Unearned revenue - - - - -
Total liabilities 237,491 391,449 - 34,518 856,590
Deferred inflows of resources
Unavailable revenues - loans and
accrued interest receivable - - - - 3,298,196
Fund balances
Nonspendable 967,676 - - - -
Restricted 6,949,670 359,813 297,514 739,289 -
Committed 2,540,200 1,259,966 - - -
Total fund balances 10,457,546 1,619,779 297,514 739,289 -
Total liabilities, deferred inflows of
resources and fund balances 10,695,037$ 2,011,228$ 297,514$ 773,807$ 4,154,786$
CITY OF LANSING, MICHIGAN
146
State and
Downtown Building Parks Federal Tri-County
Lansing, Inc. Department Department Grants Metro Totals
-$ -$ -$ -$ 69,029$ 92,029$
84,855 29,541 475,702 208,164 845,553 11,775,911
- 6,959 - - - 96,627
- - - 39,460 - 1,224,460
- - - - - 2,113,196
- - - 1,496,879 45,541 4,964,156
- - - - - 967,676
84,855$ 36,500$ 475,702$ 1,744,503$ 960,123$ 21,234,055$
34,484$ 483$ -$ 603,647$ 69,676$ 1,459,163$
- - - - 89,147 89,147
6,093 33,102 - 16,166 945 72,230
- - - - - 43,867
- - - 42,974 - 752,358
- - - 231,316 340,190 571,506
- 2,915 - 810,940 - 813,855
40,577 36,500 - 1,705,043 499,958 3,802,126
- - - 39,460 - 3,337,656
- - - - - 967,676
44,278 - - - 460,165 8,850,729
- - 475,702 - - 4,275,868
44,278 - 475,702 - 460,165 14,094,273
84,855$ 36,500$ 475,702$ 1,744,503$ 960,123$ 21,234,055$
147
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Special Revenue Funds
For the Year Ended June 30, 2018
Drug Law Community
Drug Law Enforcement Development
Major Local Enforcement State and Block Grant
Streets Streets Federal Local Program
Revenues
Property axes and special assessments 141,983$ -$ -$ -$ -$
Intergovernmental 11,907,199 2,826,068 - - 1,490,748
Charges for services 208,333 207,196 - - -
Fines and forfeits - - - 427,602 -
Interest and rents 40,669 28,151 2,679 7,003 -
Contributions - - - - -
Other revenues 536,957 - 3,052 - 563,008
Total revenues 12,835,141 3,061,415 5,731 434,605 2,053,756
Expenditures
Current expenditures:
General government - - - - -
Public safety - - 57,867 159,284 -
Highways and streets 5,037,731 5,066,303 - - -
Community development - - - - 2,054,406
Debt service:
Principal 487,084 744,800 - - -
Interest 123,765 296,360 - - -
Capital outlay 1,250,740 1,010,172 - - -
Total expenditures 6,899,320 7,117,635 57,867 159,284 2,054,406
Revenues over (under) expenditures 5,935,821 (4,056,220) (52,136) 275,321 (650)
Other financing sources (uses)
Transfers in - 4,151,000 - - 650
Transfers out (2,250,000) - - - -
Total other financing sources (uses)(2,250,000) 4,151,000 - - 650
Net changes in fund balances 3,685,821 94,780 (52,136) 275,321 -
Fund balances, beginning of year 6,771,725 1,524,999 349,650 463,968 -
Fund balances, end of year 10,457,546$ 1,619,779$ 297,514$ 739,289$ -$
CITY OF LANSING, MICHIGAN
148
State and
Downtown Building Parks Federal Tri-County
Lansing, Inc. Department Department Grants Metro Totals
410,768$ -$ -$ -$ -$ 552,751$
- - - 6,370,689 401,397 22,996,101
4,650 2,012,707 - 174,118 - 2,607,004
- - - - 38,601 466,203
1,989 - 4,134 - 7,941 92,566
10,000 - - - - 10,000
367,454 - - (276,364) - 1,194,107
794,861 2,012,707 4,134 6,268,443 447,939 27,918,732
1,005,907 2,437,086 - - - 3,442,993
- - - 700,801 633,948 1,551,900
- - - - - 10,104,034
- - - 5,590,701 - 7,645,107
- - - - - 1,231,884
- - - - - 420,125
- - - - - 2,260,912
1,005,907 2,437,086 - 6,291,502 633,948 26,656,955
(211,046) (424,379) 4,134 (23,059) (186,009) 1,261,777
221,000 226,672 - 45,110 - 4,644,432
- - - (22,051) - (2,272,051)
221,000 226,672 - 23,059 - 2,372,381
9,954 (197,707) 4,134 - (186,009) 3,634,158
34,324 197,707 471,568 - 646,174 10,460,115
44,278$ -$ 475,702$ -$ 460,165$ 14,094,273$
149
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Nonmajor Special Revenue Funds
For the Year Ended June 30, 2018
Actual Over
Final (Under) Final
Budget Actual Budget
Revenues
Property taxes and special assessments 115,000$ 141,983$ 26,983$
Intergovernmental 9,919,700 11,907,199 1,987,499
Charges for services 600,000 208,333 (391,667)
Fines and forfeits - - -
Interest and rents - 40,669 40,669
Contributions - - -
Other revenues 94,900 536,957 442,057
Total revenues 10,729,600 12,835,141 2,105,541
Expenditures
Current expenditures:
General government - - -
Public safety - - -
Highways and streets 7,217,367 5,037,731 (2,179,636)
Recreation and culture - - -
Community development - - -
Debt service:
Principal 457,900 487,084 29,184
Interest 162,000 123,765 (38,235)
Capital outlay 5,477,326 1,250,740 (4,226,586)
Total expenditures 13,314,593 6,899,320 (6,415,273)
Revenues over (under) expenditures (2,584,993) 5,935,821 8,520,814
Other financing sources (uses)
Transfers in - - -
Transfers out (2,250,000) (2,250,000) -
Total other financing sources (uses)(2,250,000) (2,250,000) -
Net change in fund balances (4,834,993) 3,685,821 8,520,814
Fund balances, beginning of year 6,771,725 6,771,725 -
Fund balances, end of year 1,936,732$ 10,457,546$ 8,520,814$
CITY OF LANSING, MICHIGAN
Major Streets
150
Actual Over Actual Over
Final (Under) Final Final (Under) Final
Budget Actual Budget Budget Actual Budget
-$ -$ -$ -$ -$ -$
2,966,700 2,826,068 (140,632) - - -
600,000 207,196 (392,804) - - -
- - - - - -
- 28,151 28,151 - 2,679 2,679
- - - - - -
- - - - 3,052 3,052
3,566,700 3,061,415 (505,285) - 5,731 5,731
- - - - - -
- - - 58,500 57,867 (633)
5,467,900 5,066,303 (401,597) - - -
- - - - - -
- - - - - -
744,800 744,800 - - - -
308,300 296,360 (11,940) - - -
2,309,099 1,010,172 (1,298,927) - - -
8,830,099 7,117,635 (1,712,464) 58,500 57,867 (633)
(5,263,399) (4,056,220) 1,207,179 (58,500) (52,136) 6,364
4,151,000 4,151,000 - - - -
- - - - - -
4,151,000 4,151,000 ----
(1,112,399) 94,780 1,207,179 (58,500) (52,136) 6,364
1,524,999 1,524,999 - 349,650 349,650 -
412,600$ 1,619,779$ 1,207,179$ 291,150$ 297,514$ 6,364$
continued…
Drug Law Enforcement FederalLocal Streets
151
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Nonmajor Special Revenue Funds
For the Year Ended June 30, 2018
Actual Over
Final (Under) Final
Budget Actual Budget
Revenues
Property taxes and special assessments -$ -$ -$
Intergovernmental - - -
Charges for services - - -
Fines and forfeits - 427,602 427,602
Interest and rents - 7,003 7,003
Contributions - - -
Other revenues - - -
Total revenues - 434,605 434,605
Expenditures
Current expenditures:
General government - - -
Public safety 196,500 159,284 (37,216)
Highways and streets - - -
Recreation and culture - - -
Community development - - -
Debt service:
Principal - - -
Interest - - -
Capital outlay - - -
Total expenditures 196,500 159,284 (37,216)
Revenues over (under) expenditures (196,500) 275,321 471,821
Other financing sources (uses)
Transfers in - - -
Transfers out - - -
Total other financing sources (uses)---
Net change in fund balances (196,500) 275,321 471,821
Fund balances, beginning of year 463,968 463,968 -
Fund balances, end of year 267,468$ 739,289$ 471,821$
CITY OF LANSING, MICHIGAN
Drug Law Enforcement State and Local
152
Actual Over Actual Over
Final (Under) Final Final (Under) Final
Budget Actual Budget Budget Actual Budget
-$ -$ -$ 407,000$ 410,768$ 3,768$
1,852,300 1,490,748 (361,552) - - -
- - - 5,250 4,650 (600)
- - - - - -
- - - - 1,989 1,989
- - - 10,000 10,000 -
501,700 563,008 61,308 384,250 367,454 (16,796)
2,354,000 2,053,756 (300,244) 806,500 794,861 (11,639)
- - - 1,027,500 1,005,907 (21,593)
- - - - - -
- - - - - -
- - - - - -
2,509,000 2,054,406 (454,594) - - -
- - - - - -
- - - - - -
- - - - - -
2,509,000 2,054,406 (454,594) 1,027,500 1,005,907 (21,593)
(155,000) (650) 154,350 (221,000) (211,046) 9,954
155,000 650 (154,350) 221,000 221,000 -
- - - - - -
155,000 650 (154,350) 221,000 221,000 -
----9,9549,954
-- - 34,324 34,324 -
-$ -$ -$ 34,324$ 44,278$ 9,954$
continued…
Community Development Block Grant Program Downtown Lansing, Inc.
153
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Nonmajor Special Revenue Funds
For the Year Ended June 30, 2018
Actual Over
Final (Under) Final
Budget Actual Budget
Revenues
Property taxes and special assessments -$ -$ -$
Intergovernmental - - -
Charges for services 2,539,600 2,012,707 (526,893)
Fines and forfeits - - -
Interest and rents - - -
Contributions - - -
Other revenues - - -
Total revenues 2,539,600 2,012,707 (526,893)
Expenditures
Current expenditures:
General government 2,557,000 2,437,086 (119,914)
Public safety - - -
Highways and streets - - -
Recreation and culture - - -
Community development - - -
Debt service:
Principal - - -
Interest - - -
Capital outlay - - -
Total expenditures 2,557,000 2,437,086 (119,914)
Revenues over (under) expenditures (17,400) (424,379) (406,979)
Other financing sources (uses)
Transfers in - 226,672 226,672
Transfers out - - -
Total other financing sources (uses)- 226,672 226,672
Net change in fund balances (17,400) (197,707) (180,307)
Fund balances, beginning of year 197,707 197,707 -
Fund balances, end of year 180,307$ -$ (180,307)$
CITY OF LANSING, MICHIGAN
Building Department
154
Actual Over Actual Over
Final (Under) Final Final (Under) Final
Budget Actual Budget Budget Actual Budget
-$ -$ -$ -$ -$ -$
- - - 12,024,882 6,370,689 (5,654,193)
- - - - 174,118 174,118
- - - - - -
- 4,134 4,134 - - -
- - - - - -
- - - - (276,364) (276,364)
-4,134 4,134 12,024,882 6,268,443 (5,756,439)
- - - - - -
- - - 1,011,338 700,801 (310,537)
- - - - - -
41,175 - (41,175) - - -
- - - 10,979,717 5,590,701 (5,389,016)
- - - - - -
- - - - - -
- - - - - -
41,175 - (41,175) 11,991,055 6,291,502 (5,699,553)
(41,175) 4,134 45,309 33,827 (23,059) (56,886)
- - - 70,000 45,110 (24,890)
- - - - (22,051) 22,051
- - - 70,000 23,059 (46,941)
(41,175) 4,134 45,309 103,827 - (103,827)
471,568 471,568 - - - -
430,393$ 475,702$ 45,309$ 103,827$ -$ (103,827)
continued…
Parks Department State and Federal Grants
155
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Nonmajor Special Revenue Funds
For the Year Ended June 30, 2018
Actual Over
Final (Under) Final
Budget Actual Budget
Revenues
Property taxes and special assessments -$ -$ -$
Intergovernmental 415,000 401,397 (13,603)
Charges for services - - -
Fines and forfeits 415,000 38,601 (376,399)
Interest and rents - 7,941 7,941
Contributions - - -
Other revenues - - -
Total revenues 830,000 447,939 (382,061)
Expenditures
Current expenditures:
General government - - -
Public safety 830,000 633,948 (196,052)
Highways and streets - - -
Recreation and culture - - -
Community development - - -
Debt service:
Principal - - -
Interest - - -
Capital outlay - - -
Total expenditures 830,000 633,948 (196,052)
Revenues over (under) expenditures - (186,009) (186,009)
Other financing sources (uses)
Transfers in - - -
Transfers out - - -
Total other financing sources (uses)---
Net change in fund balances - (186,009) (186,009)
Fund balances, beginning of year 646,174 646,174 -
Fund balances, end of year 646,174$ 460,165$ (186,009)$
concluded
CITY OF LANSING, MICHIGAN
Tri-County Metro
156
CITY OF LANSING, MICHIGAN
Nonmajor Debt Service Funds
2015 Refunding Debt Service Fund – This fund accounts for the accumulation of resources for
payment of the 2015 $320,000 Refunding Building Authority Bonds.
1999 Fire Station Fund – This fund accounts for the accumulation of resources for payment of the
1999 $3,000,000 Unlimited Tax General Obligation Bonds (which was refunding in 2007 in the amont
of $1,780,000).
2001 Fire Station Fund – This fund accounts for the accumulation of resources for the payment of
the 2001 $4,000,000 Unlimited Tax General Obligation Bonds (which was refunding in 2010 in the
amont of $2,470,000).
157
Combining Balance Sheet
Nonmajor Debt Service Funds
June 30, 2018
2015
Refunding 1999 2001
Debt Fire Fire
Service Station Station Totals
Assets
Equity in pooled cash and investments -$ -$ 1,000$ 1,000$
Fund balances
Restricted -$ -$ 1,000$ 1,000$
CITY OF LANSING, MICHIGAN
158
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Debt Service Funds
For the Year Ended June 30, 2018
2015
Refunding 1999 2001
Debt Fire Fire
Service Station Station Totals
Revenues
Taxes and special assessments -$ 215,800$ 319,240$ 535,040$
Expenditures
Debt service:
Principal 160,000 200,000 305,000 665,000
Interest 3,200 15,800 16,165 35,165
Total expenditures 163,200 215,800 321,165 700,165
Revenues under expenditures (163,200) - (1,925) (165,125)
Other financing source
Transfers in 163,200 - 1,925 165,125
Net changes in fund balances - - - -
Fund balances, beginning of year - - 1,000 1,000
Fund balances, end of year -$ -$ 1,000$ 1,000$
CITY OF LANSING, MICHIGAN
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160
CITY OF LANSING, MICHIGAN
Nonmajor Capital Projects Funds
1990 Environmental II Fund – This fund accounts for the proceeds of the 1990 $6,300,000
environmental bonds.
Special Assessments Fund – This fund is used to account for the financing of public improvements
deemed to benefit the properties against which special assessments are levied.
Other Capital Projects Fund – This fund accounts for accounts for miscellaneous capital projects.
161
Combining Balance Sheet
Nonmajor Capital Projects Funds
June 30, 2018
1990 Other
Environ- Special Capital
mental II Assessments Projects Totals
Assets
Cash and cash equivalents -$ -$ 89,710$ 89,710$
Equity in pooled cash and
investments - - 4,588,367 4,588,367
Accounts receivable, net - - 212,011 212,011
Special assessments receivable:
Current - 41,341 - 41,341
Deferred - 196,158 - 196,158
Prepaids - - 37,309 37,309
Total assets -$ 237,499$ 4,927,397$ 5,164,896$
Liabilities
Accounts payable -$ -$ 170,906$ 170,906$
Advance from other funds - 196,602 - 196,602
Total liabilities - 196,602 170,906 367,508
Deferred inflows of resources
Unavailable revenues -
special assessments - 196,158 - 196,158
Fund balances
Nonspendable - - 37,309 37,309
Restricted - - 157,709 157,709
Committed - - 4,561,473 4,561,473
Unassigned (deficit) - (155,261) - (155,261)
Total fund balances (deficit)- (155,261) 4,756,491 4,601,230
Total liabilities, deferred inflows of
resources and fund balances -$ 237,499$ 4,927,397$ 5,164,896$
CITY OF LANSING, MICHIGAN
162
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Capital Projects Funds
For the Year Ended June 30, 2018
1990 Other
Environ- Special Capital
mental II Assessments Projects Totals
Revenues
Special assessments -$ 55,837$ -$ 55,837$
Charges for services - - 557,568 557,568
Interest and rents - - 12,961 12,961
Total revenues - 55,837 570,529 626,366
Expenditures
Capital outlay 688 - 2,885,142 2,885,830
Revenues over (under) expenditures (688) 55,837 (2,314,613) (2,259,464)
Other financing sources (uses)
Transfers in - - 2,783,000 2,783,000
Transfers out - - (1,017,559) (1,017,559)
Total other financing sources (uses)- - 1,765,441 1,765,441
Net changes in fund balances (688) 55,837 (549,172) (494,023)
Fund balances (deficit),
beginning of year 688 (211,098) 5,305,663 5,095,253
Fund balances (deficit),
end of year -$ (155,261)$ 4,756,491$ 4,601,230$
CITY OF LANSING, MICHIGAN
163
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164
CITY OF LANSING, MICHIGAN
Nonmajor Permanent Funds
Cemetery Perpetual Care Fund – This fund accounts for transfers from the Cemetery Fund,
representing 15% of lot sales. These funds are invested, and all investment earnings are transferred
to the Cemetery Fund for lot maintenance.
Parks Trust Fund – This fund accounts for contributions made for City parks, the principal of which
must be preserved in accordance with the trust indentures. Income derived from these
contributions is transferred to the Parks Department special revenue fund.
165
Combining Balance Sheet
Nonmajor Permanent Funds
June 30, 2018
Cemetery
Perpetual Parks
Care Trust Totals
Assets
Equity in pooled cash and investments 1,836,236$ 1,268$ 1,837,504$
Fund balances
Nonspendable 1,836,236$ 1,268$ 1,837,504$
CITY OF LANSING, MICHIGAN
166
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Permanent Funds
For the Year Ended June 30, 2018
Cemetery
Perpetual Parks
Care Trust Totals
Revenues
Interest and rents 23,731$ 9$ 23,740$
Other financing sources (uses)
Transfers in 29,104 - 29,104
Transfers out (23,731) - (23,731)
Total other financing sources (uses)5,373 - 5,373
Net change in fund balances 29,104 9 29,113
Fund balances, beginning of year 1,807,132 1,259 1,808,391
Fund balances, end of year 1,836,236$ 1,268$ 1,837,504$
CITY OF LANSING, MICHIGAN
167
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168
CITY OF LANSING, MICHIGAN
Nonmajor Enterprise Funds
Cemetery Fund – This fund accounts for the operation of City-owned cemeteries.
Golf Fund – This fund accounts for the operation of the City-owned golf courses.
Garbage and Rubbish Collection Fund – This fund accounts for the provision of household solid waste
disposal services to participating residents of the City.
Recycling Fund – This fund accounts for the provision of recycling services to participating residents of
the City.
169
Combining Statement of Net Position
Nonmajor Enterprise Funds
June 30, 2018
Garbage and
Rubbish
Cemetery Golf Collection Recycling Totals
Assets
Current assets:
Cash and cash equivalents 200$ -$ 17,356$ -$ 17,556$
Equity in pooled cash and investments 62,143 74,567 140,298 1,195,728 1,472,736
Accounts receivable, net - - 116,500 8,863 125,363
Inventories 52,493 - - - 52,493
Total current assets 114,836 74,567 274,154 1,204,591 1,668,148
Noncurrent assets:
Capital assets not being depreciated 57,740 446,501 - - 504,241
Capital assets being depreciated, net 97,051 1,895,467 - 451,519 2,444,037
Total noncurrent assets 154,791 2,341,968 - 451,519 2,948,278
Total assets 269,627 2,416,535 274,154 1,656,110 4,616,426
Deferred outflows of resources
Deferred pension amounts 96,415 - 211,883 262,691 570,989
Liabilities
Current liabilities:
Accounts payable 50,059 - 21,964 46,239 118,262
Accrued interest payable - - - 3,962 3,962
Accrued payroll 1,823 - - - 1,823
Unearned revenues - - 171,255 - 171,255
Current portion of:
Bonds and notes payable - - - 225,580 225,580
Compensated absences 2,475 - 5,210 12,216 19,901
Total current liabilities 54,357 - 198,429 287,997 540,783
Noncurrent liabilities:
Bonds and notes payable, net
of current portion - - - 582,920 582,920
Compensated absences, net
of current portion 20,296 - 42,717 100,168 163,181
Net pension liability 1,594,056 - 3,503,143 4,343,180 9,440,379
Net other postemployment benefit liability 1,154,756 - 2,430,522 5,699,239 9,284,517
Total noncurrent liabilities 2,769,108 - 5,976,382 10,725,507 19,470,997
Total liabilities 2,823,465 - 6,174,811 11,013,504 20,011,780
Deferred inflows of resources
Deferred pension amounts 37,543 - 82,506 102,290 222,339
Deferred other postemployment
benefit amounts 44,427 - 93,511 219,270 357,208
Total deferred inflows of resources 81,970 - 176,017 321,560 579,547
Net position
Net investment in capital assets 154,791 2,341,968 - (356,981) 2,139,778
Unrestricted (deficit) (2,694,184) 74,567 (5,864,791) (9,059,282) (17,543,690)
Total net position (2,539,393)$ 2,416,535$ (5,864,791)$ (9,416,263)$ (15,403,912)$
CITY OF LANSING, MICHIGAN
170
Combining Statement of Revenues, Expenses and Changes in Fund Net Position
Nonmajor Enterprise Funds
For the Year Ended June 30, 2018
Garbage and
Rubbish
Cemetery Golf Collection Recycling Totals
Operating revenues
Charges for services 351,204$ 179,464$ 2,072,454$ 3,779,468$ 6,382,590$
Operating expenses
Personal services 1,124,541 (798,266) 2,356,509 1,895,514 4,578,298
Purchase of goods and services 245,509 347,644 745,384 1,430,464 2,769,001
Depreciation 9,827 77,847 - 301,012 388,686
Total operating expenses 1,379,877 (372,775) 3,101,893 3,626,990 7,735,985
Operating income (loss) (1,028,673) 552,239 (1,029,439) 152,478 (1,353,395)
Nonoperating revenues (expenses)
Interest revenue - - 2,715 19,119 21,834
Interest expense and fees - - - (18,020) (18,020)
Capital contribution to others - - - (214,486) (214,486)
Total nonoperating revenues (expenses)- - 2,715 (213,387) (210,672)
Income (loss) before transfers (1,028,673) 552,239 (1,026,724) (60,909) (1,564,067)
Transfers
Transfers in 487,731 453,559 - - 941,290
Transfers out (29,104) - - - (29,104)
Total transfers 458,627 453,559 - - 912,186
Change in net position (570,046) 1,005,798 (1,026,724) (60,909) (651,881)
Net position, beginning of year, as restated (1,969,347) 1,410,737 (4,838,067) (9,355,354) (14,752,031)
Net position, end of year (2,539,393)$ 2,416,535$ (5,864,791)$ (9,416,263)$ (15,403,912)$
CITY OF LANSING, MICHIGAN
171
Combining Statement of Cash Flows
Nonmajor Enterprise Funds
For the Year Ended June 30, 2018
Garbage and
Rubbish
Cemetery Golf Collection Recycling Totals
Cash flows from operating activities
Cash received from customers 351,204$ 159,064$ 2,084,003$ 3,778,771$ 6,373,042$
Cash payments for goods and services (264,106) (348,414) (728,452) (1,417,135) (2,758,107)
Cash payments to employees (638,364) (316,993) (1,547,333) (1,908,741) (4,411,431)
Net cash provided by
(used in) operating activities (551,266) (506,343) (191,782) 452,895 (796,496)
Cash flows from noncapital
financing activities
Transfers in 487,731 453,559 - - 941,290
Transfers out (29,104) - - - (29,104)
Net cash provided by
noncapital financing activities 458,627 453,559 - - 912,186
Cash flows from capital and related
financing activities
Capital contributions to others - - - (214,486) (214,486)
Principal paid on long-term debt - - - (221,223) (221,223)
Interest paid on long-term debt - - - (19,104) (19,104)
Net cash used in capital and related
financing activities - - - (454,813) (454,813)
Cash flows from investing activities
Interest and dividends received - - 2,715 19,119 21,834
Net change in cash and cash equivalents (92,639) (52,784) (189,067) 17,201 (317,289)
Cash and cash equivalents,
beginning of year 154,982 127,351 346,721 1,178,527 1,807,581
Cash and cash equivalents,
end of year 62,343$ 74,567$ 157,654$ 1,195,728$ 1,490,292$
Reconciliation to statement of net position
Cash and cash equivalents 200$ -$ 17,356$ -$ 17,556$
Equity in pooled cash and investments 62,143 74,567 140,298 1,195,728 1,472,736
62,343$ 74,567$ 157,654$ 1,195,728$ 1,490,292$
continued…
CITY OF LANSING, MICHIGAN
172
Combining Statement of Cash Flows
Nonmajor Enterprise Funds
For the Year Ended June 30, 2018
Garbage and
Rubbish
Cemetery Golf Collection Recycling Totals
CITY OF LANSING, MICHIGAN
Reconciliation of operating income (loss)
to net cash provided by (used in)
operating activities
Operating income (loss) (1,028,673)$ 552,239$ (1,029,439)$ 152,478$ (1,353,395)$
Adjustments to reconcile operating
income (loss) to net cash provided by
(used in) operating activities:
Depreciation 9,827 77,847 - 301,012 388,686
Changes in:
Accounts receivable - - (51,234) (697) (51,931)
Inventories (3,631) 2,462 - - (1,169)
Deferred outflows - pension 5,990 104,962 62,594 81,731 255,277
Accounts payable (14,966) (3,232) 16,932 13,329 12,063
Accrued payroll 215 (17,373) - - (17,158)
Unearned revenues - (20,400) 62,783 - 42,383
Compensated absences 8,017 (31,253) 1,716 4,022 (17,498)
Net pension liability 572,694 (1,070,764) 964,014 436,848 902,792
Deferred inflows - pension (55,768) (100,831) (124,496) (313,881) (594,976)
Net other postemployment
benefit liability (89,398) - (188,163) (441,217) (718,778)
Deferred inflows - OPEB 44,427 - 93,511 219,270 357,208
Net cash provided by
(used in) operating activities (551,266)$ (506,343)$ (191,782)$ 452,895$ (796,496)$
concluded
173
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174
CITY OF LANSING, MICHIGAN
Internal Service Funds
Fleet Maintenance Fund – This fund accounts for the costs of maintaining the City’s fleet of
vehicles and heavy equipment.
Fringe Benefits Fund – This fund accounts for the costs of the City’s fringe benefits.
Engineering Fund – This fund accounts for the operations of the City’s engineering department.
Information Technology Fund – This fund accounts for the operations of the City’s information
technology department.
175
Combining Statement of Net Position
Internal Service Funds
June 30, 2018
Fleet Fringe Information
Maintenance Benefits Engineering Technology Totals
Assets
Current assets:
Equity in pooled cash and investments 2,075,198$ 1,734,185$ 676,132$ 1,700,436$ 6,185,951$
Accounts receivable, net 35,521 516,521 - - 552,042
Inventories 342,145 - - - 342,145
Prepaids - 344,957 - - 344,957
Total current assets 2,452,864 2,595,663 676,132 1,700,436 7,425,095
Noncurrent assets:
Capital assets not being
depreciated 92,892 - - - 92,892
Capital assets being depreciated,
net 10,601,838 - 1,520,879 - 12,122,717
Total noncurrent assets 10,694,730 - 1,520,879 - 12,215,609
Total assets 13,147,594 2,595,663 2,197,011 1,700,436 19,640,704
Liabilities
Current liabilities:
Accounts payable 106,441 638,277 105 867,883 1,612,706
Accrued interest payable 19,058 - - - 19,058
Accrued payroll 57,353 9,139 54,453 28,485 149,430
Claims incurred but not reported - 900,000 - - 900,000
Current portion of:
Bonds and notes payable 361,324 - - - 361,324
Compensated absences 35,696 - 2,922 167 38,785
Total current liabilities 579,872 1,547,416 57,480 896,535 3,081,303
Noncurrent liabilities:
Bonds and notes payable,
net of current portion 2,670,381 - - - 2,670,381
Compensated absences,
net of current portion 131,656 57,366 436,322 175,909 801,253
Total noncurrent liabilities 2,802,037 57,366 436,322 175,909 3,471,634
Total liabilities 3,381,909 1,604,782 493,802 1,072,444 6,552,937
Net position
Net investment in capital assets 7,663,025 - 1,520,879 - 9,183,904
Unrestricted 2,102,660 990,881 182,330 627,992 3,903,863
Total net position 9,765,685$ 990,881$ 1,703,209$ 627,992$ 13,087,767$
CITY OF LANSING, MICHIGAN
176
Combining Statement of Revenues, Expenses and Changes in Fund Net Position
Internal Service Funds
For the Year Ended June 30, 2018
Fleet Fringe Information
Maintenance Benefits Engineering Technology Totals
Operating revenues
Charges for services 9,214,250$ 64,804,417$ 4,302,603$ 5,719,000$ 84,040,270$
Operating expenses
Personal services 3,342,923 295,981 3,098,324 1,602,432 8,339,660
Purchase of goods and services 4,025,458 64,790,803 1,130,785 3,840,799 73,787,845
Depreciation 1,973,256 - 45,921 - 2,019,177
Total operating expenses 9,341,637 65,086,784 4,275,030 5,443,231 84,146,682
Operating income (loss) (127,387) (282,367) 27,573 275,769 (106,412)
Nonoperating revenues (expenses)
Gain on sale of capital assets 47,550 - - - 47,550
Interest expense and fees (118,129) - - - (118,129)
Total nonoperating revenues
(expenses)(70,579) - - - (70,579)
Income (loss) before transfers (197,966) (282,367) 27,573 275,769 (176,991)
Transfers in 150,000 500,000 - - 650,000
Change in net position (47,966) 217,633 27,573 275,769 473,009
Net position, beginning of year 9,813,651 773,248 1,675,636 352,223 12,614,758
Net position, end of year 9,765,685$ 990,881$ 1,703,209$ 627,992$ 13,087,767$
CITY OF LANSING, MICHIGAN
177
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2018
Fleet Fringe Information
Maintenance Benefits Engineering Technology Totals
Cash flows from operating activities
Cash received from interfund
services 9,186,807$ 64,350,821$ 4,302,603$ 5,719,000$ 83,559,231$
Cash payments for goods
and services (3,858,843) (64,657,182) (1,129,945) (3,213,274) (72,859,244)
Cash payments to employees (3,357,607) (284,534) (3,122,589) (1,569,308) (8,334,038)
Net cash provided by (used in)
operating activities 1,970,357 (590,895) 50,069 936,418 2,365,949
Cash flows from noncapital
financing activities
Transfers in 150,000 500,000 - - 650,000
Cash flows from capital and related
financing activities
Proceeds from sale of capital assets 47,550 - - - 47,550
Acquisition and construction of
capital assets (1,725,762) - (5,895) - (1,731,657)
Principal paid on long-term debt (832,965) - - - (832,965)
Interest paid on long-term debt (123,669) - - - (123,669)
Net cash used in capital and related
financing activities (2,634,846) - (5,895) - (2,640,741)
Net change in cash and cash equivalents (514,489) (90,895) 44,174 936,418 375,208
Cash and cash equivalents,
beginning of year 2,589,687 1,825,080 631,958 764,018 5,810,743
Cash and cash equivalents,
end of year 2,075,198$ 1,734,185$ 676,132$ 1,700,436$ 6,185,951$
continued…
CITY OF LANSING, MICHIGAN
178
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2018
Fleet Fringe Information
Maintenance Benefits Engineering Technology Totals
CITY OF LANSING, MICHIGAN
Reconciliation of operating income (loss)
to net cash provided by (used in)
operating activities
Operating income (loss) (127,387)$ (282,367)$ 27,573$ 275,769$ (106,412)$
Adjustments to reconcile operating
income (loss) to net cash provided
by (used in) operating activities:
Depreciation 1,973,256 - 45,921 - 2,019,177
Change in:
Accounts receivable (27,443) (453,596) - - (481,039)
Inventories 139,369 - - - 139,369
Prepaids 625 (47,217) 1,250 - (45,342)
Accounts payable 26,621 180,838 (410) 627,525 834,574
Accrued payroll (3,518) (8,795) (4,491) 3,099 (13,705)
Claims incurred but not reported
reported - 15,000 - - 15,000
Compensated absences (11,166) 5,242 (19,774) 30,025 4,327
Net cash provided by (used in)
operating activities 1,970,357$ (590,895)$ 50,069$ 936,418$ 2,365,949$
concluded
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CITY OF LANSING, MICHIGAN
Agency Funds
Bail Bonds Fund – This fund is used to hold cash received by the District Court for bail bonds.
Garnishment, Indemnity Bond and Restitution Fund – This fund is used to hold cash received by the
District Court for garnishment payments until claimed, and to hold indemnity bonds deposited
relating to civil disputes until the Court rules on the case.
181
Combining Statement of Fiduciary Assets and Liabilities
Agency Funds
June 30, 2018
Garnishment,
Bail Indemnity Bond
Bonds and Restitution Totals
Assets
Equity in pooled cash and investments 75,812$ 8,796$ 84,608$
Liabilities
Undistributed receipts 75,812$ 8,796$ 84,608$
CITY OF LANSING, MICHIGAN
54-A District Court
182
Combining Statement of Changes in Fiduciary Assets and Liabilities
Agency Funds
For the Year Ended June 30, 2018
Beginning Ending
Balance Additions Deletions Balance
54-A District Court - Bail Bonds
Assets
Equity in pooled cash and investments 65,651$ 438,257$ 428,096$ 75,812$
Liabilities
Undistributed receipts 65,651$ 438,257$ 428,096$ 75,812$
54-A District Court - Garnishment,
Indemnity Bond and Restitution
Assets
Equity in pooled cash and investments 4,240$ 146,730$ 142,174$ 8,796$
Liabilities
Undistributed receipts 4,240$ 146,730$ 142,174$ 8,796$
Total - all agency funds
Assets
Equity in pooled cash and investments 69,891$ 584,987$ 570,270$ 84,608$
Liabilities
Undistributed receipts 69,891$ 584,987$ 570,270$ 84,608$
CITY OF LANSING, MICHIGAN
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STATISTICAL SECTION
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CITY OF LANSING, MICHIGAN
Statistical Section Table of Contents
Page
Financial Trends
(Tables 1-4)
These schedules contain trend information to help the reader
understand how the City’s financial performance and well-being
have changed over time.189
Revenue Capacity
(Tables 5-8)
These schedules contain information to help the reader assess
the factors affecting the City’s ability to generate its property
taxes.194
Debt Capacity
(Tables 9-13)
These schedules present information to help the reader assess
the affordability of the City’s current levels of outstanding debt
and the City’s ability to issue additional debt in the future.198
Demographic and
Economic Information
(Tables 14-15)
These schedules offer demographic and economic indicators to
help the reader understand the environment within which the
City’s financial activities take place and to help make
comparisons over time and with other governments.203
Operating Information
(Tables 16-18)
These schedules contain information about the City’s operations
and resources to help the reader understand how the City’s
financial information relates to the services the City provides and
the activities it performs.206
This part of the City of Lansing, Michigan’s (the "City") comprehensive annual financial report presents
detailed information as a context for understanding what the information in the financial statements,
note disclosures, and required supplementary information says about the City’s overall financial health.
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive
annual financial reports for the relevant year.
187
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188
Table 1 - UnauditedNet Position by ComponentLast Ten Fiscal Years2018(2)2017 2016 2015 2014 2013 2012 2011 2010 2009Governmental activitiesNet investment in capital assets148,263,240$ 149,533,948$ 149,676,860$ 151,785,916$ 150,976,010$ 154,372,604$ 163,723,249$ 180,571,237$ 186,536,428$ 191,516,475$ Restricted 15,189,723 10,993,950 12,922,525 12,311,541 13,133,137 12,552,011 14,524,584 14,777,571 14,304,689 17,139,090 Unrestricted (deficit) (606,529,375) (276,790,945) (265,678,371) (251,453,207) (46,344,555) (39,467,672) (34,371,855) (18,840,717) (7,649,432) 6,589,790 Total governmental activities net position(443,076,412)$ (116,263,047)$ (103,078,986)$ (87,355,750)$ 117,764,592$ 127,456,943$ 143,875,978$ 176,508,091$ 193,191,685$ 215,245,355$ Business-type activitiesNet investment in capital assets227,127,434$ 224,161,744$ 220,436,882$ 218,813,478$ 214,458,841$ 212,682,278$ 209,584,457$ 204,149,751$ 194,854,140$ 185,430,669$ Restricted 1,886,620 1,818,671 2,764,963 2,889,096 8,746,096 11,077,134 12,382,060 13,080,302 19,917,341 19,454,812 Unrestricted (13,854,833) 25,415,447 19,401,320 17,242,167 37,891,053 31,943,581 32,196,598 34,177,453 30,193,568 23,730,694 Total business-type activities net position215,159,221$ 251,395,862$ 242,603,165$ 238,944,741$ 261,095,990$ 255,702,993$ 254,163,115$ 251,407,506$ 244,965,049$ 228,616,175$ Primary governmentNet investment in capital assets375,390,674$ 373,695,692$ 370,113,742$ 370,599,394$ 365,434,851$ 367,054,882$ 373,307,706$ 384,720,988$ 381,390,568$ 376,947,144$ Restricted 17,076,343 12,812,621 15,687,488 15,200,637 21,879,233 23,629,145 26,906,644 27,857,873 34,222,030 36,593,902 Unrestricted (deficit) (620,384,208) (251,375,498) (246,277,051) (234,211,040) (8,453,502) (7,524,091) (2,175,257) 15,336,736 22,544,136 30,320,484 Total primary government net position(227,917,191)$ 135,132,815$ 139,524,179$ 151,588,991$ 378,860,582$ 383,159,936$ 398,039,093$ 427,915,597$ 438,156,734$ 443,861,530$ Note: No discretely presented component units shown(1) GASB Statement No. 68 was implemented for the fiscal year ended June 30, 2015. This resulted in presentation of the City's net pension liability on the statement of net position. Prior years were not restated.(2) GASB Statement No. 75 was implemented for the fiscal year ended June 30, 2018. This resulted in presentation of the City's net OPEB liability on the statement of net position. Prior years were not restated.CITY OF LANSING, MICHIGAN (1)189
Table 2 - UnauditedChange in Net Position Last Ten Fiscal Years2018 2017 2016 2015 2014 2013 2012 2011 2010 2009ExpensesGovernmental activities:General government 16,995,976$ 21,778,154$ 27,993,414$ 25,225,893$ 24,771,054$ 27,438,065$ 30,841,776$ 25,665,269$ 30,326,671$ 26,426,242$ Public safety87,352,251 91,829,441 85,739,408 81,827,437 78,142,897 77,133,469 82,369,004 83,546,997 84,566,215 71,236,947 Public works 26,485,877 28,983,891 28,212,049 27,815,970 37,243,516 29,984,955 33,144,303 26,355,375 29,252,516 37,588,680 Recreation and culture8,302,243 9,441,519 10,336,168 6,515,590 8,670,918 7,713,098 8,889,142 8,245,451 7,312,480 7,298,385 Community development 16,150,417 12,349,663 10,642,102 10,270,404 7,602,229 16,939,572 13,623,946 12,825,028 9,715,087 6,378,286 Interest on long-term debt1,137,561 1,201,846 1,424,215 1,291,846 1,340,818 1,475,051 1,949,825 2,116,535 2,229,288 1,803,125 Total governmental activities expenses156,424,325 165,584,514 164,347,356 152,947,140 157,771,432 160,684,210 170,817,996 158,754,655 163,402,257 150,731,665 Business-type activities:Sewage disposal system 28,552,143 27,567,228 28,487,957 27,506,843 28,682,809 26,298,964 26,836,597 26,444,741 24,931,075 26,247,188 Municipal parking system 9,888,246 6,866,747 7,651,077 7,605,461 7,851,702 8,108,373 9,491,376 9,896,498 8,305,095 8,353,063 Cemetery1,379,877 886,579 708,545 632,485 722,270 633,050 639,000 755,766 659,584 689,979 Golf (372,775) 802,564 845,575 852,634 935,671 892,117 810,372 846,817 869,003 927,200 Garbage and rubbish collection 3,101,893 1,543,380 2,085,728 1,712,671 1,722,843 1,557,708 1,558,024 1,515,600 1,451,059 1,547,372 Recycling 3,859,496 3,667,899 4,092,278 3,623,276 3,263,553 3,650,292 3,041,328 2,809,353 2,804,047 3,008,750 Total business-type activities expenses46,408,880 41,334,397 43,871,160 41,933,370 43,178,848 41,140,504 42,376,697 42,268,775 39,019,863 40,773,552 Total primary government expenses202,833,205 206,918,911 208,218,516 194,880,510 200,950,280 201,824,714 213,194,693 201,023,430 202,422,120 191,505,217 Program revenuesGovernmental activities:Charges for services:General government 7,038,702 7,295,556 7,279,427 6,815,975 6,820,261 6,162,713 6,428,110 6,742,306 6,565,263 5,188,510 Public safety4,140,682 3,476,966 2,909,054 3,344,183 2,122,023 4,083,222 8,525,524 8,975,173 8,589,146 9,817,421 Public works 716,322 1,836,466 3,011,894 1,923,303 2,129,126 1,622,738 2,797,443 2,449,606 2,788,112 4,565,013 Recreation and culture831,816 617,604 673,840 619,834 800,293 594,349 557,609 685,120 587,906 1,217,445 Community development - 67,312 67,272 67,264 67,323 67,349 67,344 122,326 69,250 50,132 Operating grants and contributions28,983,936 25,157,629 24,561,960 24,658,955 28,234,803 29,322,435 31,928,983 30,154,681 27,515,892 26,462,211 Capital grants and contributions855,760 63,488 904,298 2,910,660 3,365,682 3,124,288 260,656 189,414 3,109,410 2,571,741 Total governmental activities program revenues42,567,218 38,515,021 39,407,745 40,340,174 43,539,511 44,977,094 50,565,669 49,318,626 49,224,979 49,872,473 Business-type activities:Charges for services:Sewage disposal system 35,107,570 34,755,896 32,368,491 31,730,416 31,759,698 30,825,174 29,915,799 29,205,945 28,907,772 27,446,304 Municipal parking system 7,436,552 6,906,091 7,090,335 6,988,879 7,453,476 5,267,627 6,858,606 7,539,179 7,396,219 7,539,611 Cemetery351,204 403,663 312,929 335,379 289,565 314,913 240,394 225,947 226,973 248,314 Golf 179,464 256,218 313,164 363,559 366,567 373,000 390,134 382,546 438,315 448,067 Garbage and rubbish collection 2,072,454 1,952,897 1,871,665 1,744,999 1,664,201 1,131,659 1,459,101 1,507,577 1,677,428 1,486,531 Recycling 3,779,468 3,614,794 3,627,070 3,624,671 3,508,536 3,434,622 2,818,364 2,609,423 2,651,309 2,945,061 Operating grants and contributions1,603,942 1,391,326 1,312,362 1,143,085 2,574,949 1,193,571 1,331,737 4,456,708 1,535,907 1,541,913 Capital grants and contributions- 100,000 - - - - 2,683,657 1,439,044 11,928,108 60,318 Total business-type activities program revenues50,530,654 49,380,885 46,896,016 45,930,988 47,616,992 42,540,566 45,697,792 47,366,369 54,762,031 41,716,119 Total primary government program revenues93,097,872 87,895,906 86,303,761 86,271,162 91,156,503 87,517,660 96,263,461 96,684,995 103,987,010 91,588,592 Net (expenses) revenuesGovernmental activities(113,857,107) (127,069,493) (124,939,611) (112,606,966) (114,231,921) (115,707,116) (120,252,327) (109,436,029) (114,177,278) (100,859,192) Business-type activities4,121,774 8,046,488 3,024,856 3,997,618 4,438,144 1,400,062 3,321,095 5,097,594 15,742,168 942,567 Total primary government net expense(109,735,333) (119,023,005) (121,914,755) (108,609,348) (109,793,777) (114,307,054) (116,931,232) (104,338,435) (98,435,110) (99,916,625) CITY OF LANSING, MICHIGAN 190
Change in Net Position Last Ten Fiscal Years2018 2017 2016 2015 2014 2013 2012 2011 2010 2009General revenues and other changes in net positionGovernmental activities:Taxes:Property taxes39,573,468$ 40,568,278$ 38,578,548$ 39,657,382$ 38,079,548$ 38,668,837$ 33,506,860$ 37,233,590$ 39,010,960$ 39,141,928$ Income taxes 38,455,296 35,694,010 34,573,130 31,660,923 31,450,913 29,850,755 27,943,070 28,699,749 27,408,443 29,312,762 Unrestricted grants and contributions39,419,658 38,108,544 36,532,275 36,330,976 35,677,910 31,425,718 26,441,961 27,254,574 25,847,423 27,318,313 Investment earnings 216,239 125,539 99,058 26,353 36,836 58,588 69,265 89,735 246,495 978,034 Miscellaneous - 135,270 63,079 280,280 - - 123,066 108,601 75,094 32,310 Transfers (912,186) (746,209) (629,715) (644,485) (705,637) (583,117) (464,008) (633,814) (464,807) (509,728) Total governmental activities116,752,475 113,885,432 109,216,375 107,311,429 104,539,570 99,420,781 87,620,214 92,752,435 92,123,608 96,273,619 Business-type activities:Investment earnings - - - 17,874 246,616 356,467 271,067 689,883 141,899 413,850 Miscellaneous - - 3,853 - 2,600 - (1,300,561) 21,166 - 725 Transfers 912,186 746,209 629,715 644,485 705,637 583,117 464,008 633,814 464,807 509,728 Total business-type activities912,186 746,209 633,568 662,359 954,853 939,584 (565,486) 1,344,863 606,706 924,303 Total primary government117,664,661 114,631,641 109,849,943 107,973,788 105,494,423 100,360,365 87,054,728 94,097,298 92,730,314 97,197,922 Changes in net positionGovernmental activities2,895,368 (13,184,061) (15,723,236) (5,295,537) (9,692,351) (16,286,335) (32,632,113) (16,683,594) (22,053,670) (4,585,573) Business-type activities5,033,960 8,792,697 3,658,424 4,659,977 5,392,997 2,339,646 2,755,609 6,442,457 16,348,874 1,866,870 Total primary government7,929,328$ (4,391,364)$ (12,064,812)$ (635,560)$ (4,299,354)$ (13,946,689)$ (29,876,504)$ (10,241,137)$ (5,704,796)$ (2,718,703)$ CITY OF LANSING, MICHIGAN 191
CITY OF LANSING, MICHIGAN Table 3 - UnauditedFund Balances, Governmental FundsLast Ten Fiscal Years2018 2017 2016 2015 2014 2013 2012 2011 2010 2009General fundNonspendable 39,437$ 28,342$ 492,549$ 35,424$ 75,738$ 75,738$ 92,538$ 171,586$ -$ -$ Restricted - - - 10,044 9,400 9,400 16,256 41,129 Committed 283,815 385,067 428,106 837,761 2,976,408 2,976,408 65,373 178,081 Unassigned 17,003,260 15,283,857 12,407,748 9,783,911 5,633,528 5,633,528 5,198,032 4,939,691 - - Reserved - - - - - - - - 102,732 1,320,375 Unreserved - - - - - - - - 389,061 3,755,862 Total general fund17,326,512 15,697,266 13,328,403 10,667,140 8,695,074 8,695,074 5,372,199 5,330,487 491,793 5,076,237 All other governmental fundsNonspendable 2,842,489 2,618,884 2,578,331 2,619,065 2,671,151 2,671,151 2,852,004 3,006,507 - - Restricted 9,009,438 4,730,012 6,934,665 6,865,580 4,368,983 4,368,983 5,566,421 7,412,008 - - Committed 8,837,341 10,426,961 8,427,253 7,110,485 4,035,145 4,035,145 4,109,131 4,908,740 - - Unassigned (deficit) (155,261) (411,098) (410,252) (528,144) (619,931) (619,931) (543,774) (371,285) - - Reserved - - - - - - - - 1,177,998 324,366 Unreserved, reported in:Special revenue funds - - - - - - - - 12,029,680 13,394,485 Capital projects funds- - - - - - - - 11,614,644 12,010,219 Debt service funds - - - - - - - - 126,434 186,636 Permanent funds - - - - - - - - 1,649,550 1,630,098 Total all other governmental funds20,534,007 17,364,759 17,529,997 16,066,986 10,455,348 10,455,348 11,983,782 14,955,970 26,598,306 27,545,804 Total all governmental funds37,860,519$ 33,062,025$ 30,858,400$ 26,734,126$ 19,150,422$ 19,150,422$ 17,355,981$ 20,286,457$ 27,090,099$ 32,622,041$ (1) The City implemented GASB 54 for the Fiscal Year Ended June 30, 2011. Prior years were not restated retroactively.(1)192
Table 4 - UnauditedChanges in Fund Balances of Governmental FundsLast Ten Fiscal Years2018 2017 2016 2015 2014 2013 2012 2011 2010 2009RevenuesTaxes and special assessments39,629,305$ 40,691,325$ 38,782,759$ 39,470,249$ 38,717,552$ 38,717,552$ 33,583,448$ 37,371,885$ 39,279,343$ 39,258,893$ Income taxes 38,455,296 35,694,010 34,573,130 31,660,923 29,850,755 29,850,755 27,943,070 28,699,749 27,408,443 29,312,762 Licenses and permits 2,113,824 1,494,298 1,559,638 1,551,125 1,509,402 1,509,402 1,538,325 1,598,804 1,414,906 1,325,119 Intergovernmental 41,848,072 36,391,761 34,175,112 36,042,377 40,639,183 40,639,183 41,431,793 40,304,785 39,137,217 38,998,039 Charges for services 12,432,770 13,230,822 14,102,447 12,900,490 11,754,381 11,754,381 18,676,398 18,606,304 18,323,158 20,355,642 Fines and forfeits 2,601,063 2,510,945 3,455,541 3,075,427 3,694,351 3,694,351 2,884,328 3,325,728 4,579,175 4,143,000 Interest and rents 284,165 201,367 145,011 87,035 53,179 53,179 63,571 88,516 249,464 1,196,559 Contributions 20,698,205 21,983,270 21,663,690 21,561,449 16,247,403 16,247,403 12,369,733 11,821,388 10,606,368 10,372,056 Donations from private sources - - - - - - 5,000 - 9,000 44,000 Other revenue 1,403,712 969,317 1,190,624 1,601,497 510,515 510,515 400,074 504,856 473,123 1,054,209 Total revenues159,466,412 153,167,115 149,647,952 147,950,572 142,976,721 142,976,721 138,895,740 142,322,015 141,480,197 146,060,279 ExpendituresGeneral government 22,281,236 23,948,368 23,386,445 21,720,206 23,595,321 23,595,321 25,038,589 26,396,516 27,839,564 28,951,805 Public safety75,859,065 73,683,246 72,264,468 75,510,743 63,943,082 63,943,082 66,161,872 70,397,235 70,820,184 70,082,462 Public works 11,087,884 11,201,515 11,715,510 13,273,332 8,908,673 8,908,673 6,225,177 6,002,823 Highways and streets 10,104,034 10,969,516 10,838,473 10,357,488 9,937,423 9,937,423 8,589,298 8,494,233 14,506,982 14,723,311 Recreation and culture 8,236,872 7,749,245 7,719,906 7,583,085 6,629,453 6,629,453 6,996,562 7,464,193 8,127,700 8,452,768 Community development 15,947,504 4,142,612 3,442,110 3,910,924 - - - - - - Other functions - 2,710,979 2,927,391 2,704,982 23,699,202 23,699,202 17,999,264 15,675,003 15,182,675 12,599,072 Debt service:Interest 949,318 1,120,518 1,275,957 931,079 1,378,856 1,378,856 1,836,218 3,210,220 3,270,068 1,801,394 Principal 3,622,053 4,596,159 3,892,862 3,616,297 3,137,159 3,137,159 3,448,080 2,070,552 2,165,237 4,743,146 Issuance costs - - - - 42,744 42,744 - 48,804 - - Capital outlay5,146,742 9,328,278 7,221,346 21,016,808 5,489,617 5,489,617 6,466,084 9,956,103 14,781,728 14,855,863 Total expenditures153,234,708 149,450,436 144,684,468 160,624,944 146,761,530 146,761,530 142,761,144 149,715,682 156,694,138 156,209,821 Excess of revenues over (under) expenditures 6,231,704 3,716,679 4,963,484 (12,674,372) (3,784,809) (3,784,809) (3,865,404) (7,393,667) (15,213,941) (10,149,542) Other financing sources (uses)Proceeds from borrowing - - 2,090,000 16,761,300 11,932,046 11,932,046 - 2,470,000 10,146,117 - Proceeds from sale of capital assets128,976 97,255 268 110,533 497,833 497,833 1,398,936 1,210,046 689 1,587,216 Payment to escrow agent - - (2,162,163) - (6,015,112) (6,015,112) - (2,456,207) - - Insurance proceeds - - - - - - - - - 120,960 Transfers in 7,721,661 9,887,627 9,207,856 9,734,572 7,056,932 7,056,932 7,893,879 9,602,095 16,181,590 11,601,871 Transfers out (9,283,847) (11,497,936) (10,055,346) (10,002,772) (1,892,449) (1,892,449) (8,357,887) (10,235,909) (16,646,397) (12,579,599) Bond premium - - 80,175 40,945 - - - - - - Total other financing sources (uses)(1,433,210) (1,513,054) (839,210) 16,644,578 11,579,250 11,579,250 934,928 590,025 9,681,999 730,448 Net change in fund balance4,798,494$ 2,203,625$ 4,124,274$ 3,970,206$ 7,794,441$ 7,794,441$ (2,930,476)$ (6,803,642)$ (5,531,942)$ (9,419,094)$ Debt service as a percentage ofnoncapital expenditures 3.1% 3.9% 3.7% 3.2% 3.2% 3.2% 3.8% 3.7% 3.9% 4.5%CITY OF LANSING, MICHIGAN 193
Table 5 - UnauditedAssessed and Estimated Actual Value of Taxable PropertyLast Ten Fiscal Years(rate per $1,000 of assessed value)Total AssessedPersonal Total Taxable Direct Estimated Value as a Residential Commercial Industrial Agricultural Developmental PropertyAssessed TaxActual Percentage ofPropertyPropertyPropertyPropertyPropertyValuation Valuation Rate Value Actual Value2009 1,479,089,611$ 719,463,319$ 254,539,254$ -$ -$ 205,034,000$ 2,658,126,184$ 15.83 5,316,252,368$ 50.0%2010 1,480,467,389 713,807,797 248,288,931 - - 220,228,175 2,662,792,292 15.70 5,325,584,584 50.0%2011 1,407,920,589 624,406,132 215,099,428 - - 199,543,400 2,446,969,549 15.70 4,595,182,662 53.3%2012 1,387,390,250 639,535,400 87,432,000 - - 183,233,681 2,297,591,331 15.70 4,177,384,562 55.0%2013 1,232,109,181 587,002,900 86,884,400 151,900 - 182,543,900 2,088,692,281 19.70 4,177,384,562 50.0%2014 1,152,931,800 580,539,700 85,938,200 151,900 2,900 182,024,000 2,001,588,500 19.70 4,002,817,000 50.0%2015 1,144,848,592 602,472,030 155,934,800 158,100 2,900 183,420,400 2,086,836,822 19.70 4,173,673,644 50.0%2016 1,162,708,909 643,816,600 162,544,200 175,600 2,900 196,143,891 2,165,392,100 19.70 4,330,784,200 50.0%2017 1,212,816,985 691,032,435 175,090,600 172,500 2,900 157,759,500 2,236,874,920 19.70 4,473,749,840 50.0%2018 1,297,946,576 710,853,825 179,884,100 172,500 - 147,207,000 2,336,064,001 19.70 4,672,128,002 50.0%Source: Lansing City AssessorCITY OF LANSING, MICHIGAN Fiscal YearEndedJune 30,194
Table 6 - UnauditedDirect and Overlapping Property Tax RatesLast Ten Fiscal Years(rate per $1,000 of assessed value)TaxOperating Service CityCountySchool State College OtherYear Millage Millage Millage Millage Millage Education Millage Millage Total2008 15.01 .82 15.83 8.87 20.15 6.00 3.81 9.04 63.702009 15.44 .26 15.70 8.85 19.95 6.00 3.81 9.93 64.242010 15.44 .26 15.70 8.84 19.95 6.00 3.81 9.93 64.232011 15.44 .26 15.70 8.85 21.44 6.00 3.81 9.96 65.762012 19.44 .26 19.70 9.49 21.73 6.00 3.81 9.96 70.682013 19.44 .26 19.70 9.50 21.91 6.00 3.81 9.96 70.882014 19.44 .26 19.70 10.20 21.77 6.00 3.81 9.96 71.442015 19.44 .26 19.70 9.83 21.83 6.00 3.81 9.96 71.122016 19.44 .26 19.70 10.06 22.57 6.00 3.81 9.96 72.102017 19.44 .26 19.70 10.07 22.60 6.00 3.81 11.25 73.43(1) rates for Lansing School District only, using non-principal residency rates(2) includes Intermediate School, Airport Authority, Capital Area Transit Authority and Capital Area District Library.Source: Lansing City Treasurer2018June 30,CITY OF LANSING, MICHIGAN Fiscal City Direct Rates2011201220132014201520162017Overlapping RatesYearEnded20092010(1)(2)195
Table 7 - Unaudited
Profile of Ten Largest Ad Valorem Taxpayers
Current Year and Nine Years Ago
Percentage Percentage
Taxable of Total Total of Total
Assessed Assessed Assessed Assessed
Taxpayer Valuation Rank Valuation Valuation Rank Valuation
General Motors Corp. 63,769,268$ 1 2.73% 130,243,563$ 1 4.90%
Jackson National Life Insurance Company 45,936,293 2 1.97% 38,430,144 2 1.45%
Consumers Energy 32,123,801 3 1.38% 22,249,503 3 0.84%
Phoenix Development Part I LLC 25,458,523 4 1.09%
Emergent Biodefense Operations 12,999,054 5 0.56%
Lansing Retail Center LLC 11,423,364 6 0.49% 14,032,728 6 0.53%
Lansing Properties LLC 9,944,400 7 0.43%
Eyde Knapp Development LLC 8,035,645 8 0.34%
Demmer Corporation 7,840,602 9 0.34% 13,829,400 7 0.52%
Edward Rose Realty, Inc. 6,998,978 10 0.30%
Delta Township Utilities 19,875,800 4 0.75%
Accident Fund Company 14,178,118 5 0.53%
Trappers Cove LTD Partners 12,952,449 8 0.49%
Heart of the City LLC 10,341,600 9 0.39%
Sprint Spectrum L.P.8,974,000 10 0.34%
Data furnished from City of Lansing Assessor
2009
CITY OF LANSING, MICHIGAN
2018
196
Table 8 - Unaudited
Property Tax Levies and Collections
Last Ten Fiscal Years
Taxes Levied Current Percent of Delinquent Total Collections
for the Tax Levy Tax Tax as a Percent
Fiscal Year Collection Collected Collection Collection of Levy
2009 45,567,556$ 45,468,639$ 99.78% 72,779$ 45,541,418$ 99.94%
2010 44,997,919 44,844,495 99.66% 33,012 44,877,507 99.73%
2011 41,460,916 41,375,354 99.79% 24,416 41,399,770 99.85%
2012 39,948,762 39,863,393 99.79% 19,647 39,883,040 99.84%
2013 40,450,767 39,716,932 98.19% 55,532 39,772,464 98.32%
2014 39,336,952 39,238,902 99.75% 20,866 39,259,768 99.80%
2015 38,329,032 38,258,272 99.82% 49,590 39,259,768 102.43%
2016 38,538,226 38,461,152 99.80% 52,758 38,307,862 99.40%
2017 38,431,072 38,370,929 99.84% 50,344 38,421,273 99.97%
2018 39,234,692 39,232,925 99.99% 67,348 39,300,273 100.17%
Note: Amounts are net of chargebacks from the County Tax Revolving Funds for taxes still delinquent after three years.
Note: Delinquent Tax Collection represents amounts received in the indicated fiscal year.
Source: City of Lansing Treasurer
June 30,
CITY OF LANSING, MICHIGAN
Collected within the
Fiscal Year of the Levy Total Collections to Date
Fiscal Year
Ended
197
Table 9 - UnauditedRatios of Outstanding Debt by TypeLast Ten Fiscal YearsGeneral Special Installment General TotalObligation Assessment Purchase Obligation Revenue Lease Primary PerBonds Debt Agreements Loans Bonds Bonds Purchases Loans Government Capita Population2009 17,899,203$ -$ 12,394,082$ 1,290,479$ 189,210,199$ 39,045,570$ -$ 4,180,000$ 264,019,533$ 12.41%(2)2,217$ 119,1002010 26,329,157 - 10,925,689 1,038,804 199,063,758 36,122,872 - 4,180,000 277,660,280 13.05%(2)2,331 119,1002011 27,804,224 - 9,564,693 779,580 197,000,901 33,209,092 - 1,574,209 269,932,699 12.17%(2)2,362 114,2972012 25,816,914 - 8,193,615 512,577 189,536,530 30,135,311 - 1,637,177 255,832,124 11.32%(3)2,238 114,2972013 29,994,604 - 2,807,838 6,246,743 180,359,931 27,528,327 - 1,702,664 248,640,107 11.01%(3)2,175 114,2982014 27,180,294 - 3,100,563 7,062,234 174,471,861 24,055,438 1,668,081 - 237,538,471 10.69%(3)2,078 114,2982015 27,790,281 - 16,387,327 7,872,600 167,787,460 19,445,482 1,459,431 - 240,742,581 10.83%(3)2,106 114,2972016 21,968,330 - 15,268,317 7,872,600 154,303,563 20,671,135 1,246,673 - 221,330,618 9.88%(3)1,924 115,0562017 18,080,040 - 13,757,531 7,728,428 143,761,916 18,982,246 1,029,723 - 203,339,884 8.63%(3)1,753 116,0202018 15,325,818 - 12,289,396 7,476,545 136,938,668 17,258,138 808,500 - 190,097,065 7.61%(3)1,625 116,986(1) population per decennial census by the U.S. Census Bureau(2) personal income data comes from U.S. Census Bureau, American Community Survey 2005 (3) personal income data comes from U.S. Census Bureau, American Community Survey 2009 IncomeCITY OF LANSING, MICHIGAN Governmental Activities Business-Type ActivitiesPercentageFiscalof PersonalYear(1)198
CITY OF LANSING, MICHIGAN Table 10 - UnauditedRatios of General Bonded Debt OutstandingLast Ten Fiscal YearsRatio ofDebt Net Bonded NetTaxable Service Debt Payable Debt to BondedAssessed Gross Bonded Monies From Restricted Net Bonded Taxable Debt perPopulation(1)Value(3)Debt(2)Available Revenues Debt Value Capita2009 119,100 2,658,126,184$ 207,109,402$ 186,636$ 197,225,199$ 9,697,567$ 0.0036 81$ 2010 119,100 2,662,792,292 225,392,915 126,434 206,198,758 19,067,723 0.0072 160 2011 114,297 2,446,969,549 224,805,125 46,029 203,225,901 21,533,195 0.0088 188 2012 114,297 2,297,591,331 215,353,444 - 194,911,530 20,441,914 0.0089 179 2013 114,298 2,088,692,281 210,354,535 178 184,849,931 25,504,427 0.0122 223 2014 114,298 2,001,588,500 201,652,155 - 178,031,861 23,620,294 0.0118 207 2015 114,297 2,086,836,822 195,577,741 1,000 170,372,460 25,204,281 0.0121 221 2016 115,056 2,165,392,100 176,271,893 1,000 155,873,563 20,397,330 0.0094 177 2017 116,020 2,236,874,920 161,841,956 1,000 144,271,916 17,569,040 0.0079 151 2018 116,986 2,336,064,001 152,264,486 1,000 136,938,668 15,324,818 0.0066 131 (1) Source: 2000 and 2010 Census by the U.S. Census Bureau(2) includes all general obligation debt and special assessment debt with governmental obligation(3) the tax assessment day is December 31 prior to beginning of fiscal yearFiscalYearEndedJune 30,199
CITY OF LANSING, MICHIGAN Table 11 - Unaudited
Direct and Overlapping Governmental Activities Debt
As of June 30, 2018
Net General
Obligation Amount
Debt % Applicable Applicable
Outstanding to City to City
Net direct - City 35,091,759$ 100.00% 35,091,759$
Share of County-issued bonds
Joint Building Authority 1,098,540 100.00% 1,098,540
Drain Commission 1,141,503 100.00% 1,141,503
Other overlapping debt
Eaton Intermediate School District 3,480,000 0.78% 27,144
Ingham Intermediate School District 1,336,000 21.89% 292,450
Waverly School District 22,605,000 0.24% 54,252
Lansing School District 72,140,000 80.01% 57,719,214
East Lansing School District 88,618,377 4.60% 4,076,445
Holt School District 52,887,706 2.36% 1,248,150
Ingham County 50,711,697 25.42% 12,890,913
Eaton County 22,485,617 1.79% 402,493
Clinton County 555,400 0.28% 1,555
Lansing Community College 68,565,000 18.15% 12,444,548
Okemos School District 12,068,561 3.44% 415,158
Mason School District 40,500,000 2.85% 1,154,250
Grand Ledge School District 39,855,000 1.59% 634,172
Total overlapping debt 93,600,787
Total direct and overlapping debt 128,692,546$
Source: Municipal Advisory Council of Michigan
Note: Overlapping debt percentages are apportioned based upon relative assessed values.
Name of
Governmental Unit
200
Table 12 - UnauditedLegal Debt Margin InformationLast Ten Fiscal YearsLegal Debt Margin Calculation for Fiscal Year 2018Assessed value, real and personal property 2,336,064,001$ Legal debt margin Debt limitation - 10 percent of total valuation 233,606,400 Debt applicable to limitTotal City Bonded Debt168,137,606 City Share: Drain Commission-County Issued 1,141,503 Joint Building Authority-County Issued 1,098,540 TIF Supported Bonds 26,348,459 Lansing Board of Water and Light 312,175,000 508,901,108 Less: Lansing Board of Water and Light (312,175,000)$ Sewage Disposal Revenue Bonds (15,625,000) Pollution Abatement (CSO Project) Bonds (91,565,116) Share of County-issued bonds (2,240,043) (421,605,159) Total net debt applicable to limit87,295,949 Legal debt margin146,310,451$ 2018 2017 2016 2015 2014 2013 20122011 2010 2009Debt limit233,606,400$ 223,687,492$ 216,539,210$ 208,683,682$ 205,138,999$ 208,869,228$ 233,669,637$ 268,975,768$ 298,052,683$ 298,581,799$ Total net debt applicable to limit87,295,949 81,398,300 86,432,459 91,352,614 93,062,835 91,833,157 92,357,575 100,923,863 98,368,804 79,513,756Legal debt margin146,310,451$ 142,289,192$ 130,106,751$ 117,331,068$ 112,076,164$ 117,036,071$ 141,312,062$ 168,051,905$ 199,683,880$ 219,068,043$ Total net debt applicable to the limit as a percentage of debt limit37.37% 36.39% 39.92% 43.78% 45.37% 43.97% 39.52% 37.52% 33.00% 26.63%CITY OF LANSING, MICHIGAN 201
Table 13 - Unaudited
Pledged-Revenue Coverage
Last Ten Fiscal Years
Direct Net Revenue
Gross Operating Available for
Revenue Expenses(1)Debt Service Principal Interest Total Coverage(2)
2009 27,759,684$ 14,206,961$ 13,552,723$ 2,840,000$ 1,900,000$ 4,740,000$ 2.86
2010 28,613,004 12,358,472 16,254,532 2,840,000 1,803,425 4,643,425 3.50
2011 29,865,648 12,616,100 17,249,548 2,925,000 1,621,221 4,546,221 3.79
2012 30,178,511 12,562,663 17,615,848 3,040,000 1,448,856 4,488,856 3.92
2013 31,169,428 12,112,994 19,056,434 3,160,000 1,111,390 4,271,390 4.46
2014 31,996,794 13,424,901 18,571,893 3,265,000 1,054,878 4,319,878 4.30
2015 31,945,082 13,295,574 18,649,508 1,490,000 920,788 2,410,788 7.74
2016 32,676,182 14,066,527 18,609,655 1,550,000 861,188 2,411,188 7.72
2017 35,053,701 13,843,649 21,210,052 1,550,000 799,188 2,349,188 9.03
2018 35,608,454 14,994,871 20,613,583 1,550,000 737,188 2,287,188 9.01
(1) Operating expenses less depreciation
(2) Coverage is defined as net revenue available for debt service divided by
debt service requirements
CITY OF LANSING, MICHIGAN
Sewage Disposal Bonds
Debt Service Requirements
202
Table 14 - Unaudited
Demographic and Economic Statistics
Last Ten Fiscal Years
Per capita Lansing School
Personal Personal Median District Unemployment Labor
Population(1)Income Income(1)Age(1)Enrollment(2)% Rate(3)Force(3)
2009 119,100 2,128,321,923$ 17,870$ 32.84 14,482 16.2% 66,822
2010 119,100 2,127,607,561 17,864 32.92 14,098 15.0% 64,074
2011 114,297 2,218,276,176 19,408 30.40 13,465 13.1% 63,130
2012 114,297 2,259,194,502 19,766 32.40 13,236 11.3% 63,374
2013 114,298 2,259,214,268 19,766 32.20 12,544 11.9% 63,181
2014 114,298 2,221,953,120 19,440 32.00 12,088 9.1% 63,102
2015 114,297 2,221,933,680 19,440 32.10 11,587 7.4% 57,432
2016 115,056 2,240,255,376 19,471 32.10 11,112 6.0% 57,633
2017 116,020 2,356,830,280 20,314 32.00 10,962 6.5% 56,668
2018 116,986 2,498,236,030 21,355 32.30 10,813 5.8% 59,396
(1) Source: U.S. Census Bureau
(2) Source: Lansing School District
(3) Source: Michigan Bureau of Labor Market Information and Strategic Initiatives
CITY OF LANSING, MICHIGAN
Year
203
Table 15 - Unaudited
Principal Employers
Current Year and Nine Years Ago
Percentage Percentage
of Total City of Total City
Employees (1)Rank Employment (2)Employees (1)Rank Employment
State of Michigan 13,700 1 5.73% 14,355 1 6.72%
Michigan State University 10,725 2 4.49% 10,500 2 4.91%
Liberty National Life Insurance 10,000 3 4.18%
Sparrow Health System 6,000 4 2.51% 5,500 3 2.57%
General Motors 5,027 5 2.10% 5,000 4 2.34%
Auto Owners Insurance 3,400 6 1.42% 1,400 10 0.66%
Meijer 3,000 7 1.26% 1,800 8 0.84%
McClaren Greater Lansing 2,500 8 1.05% 2,500 6 1.17%
Lansing Community College 2,143 9 0.90% 3,180 5 1.49%
John Henry Company 2,100 10 0.88%
Peckham, Inc.1,540 9 0.72%
Lansing School District 2,106 7 0.99%
Greater Lansing metropolitan area employment 239,003
(1) Data is representative of the Greater Lansing Region
(2) Source: Michigan Department of Career Development: Employment Service Agency - Labor Market Information
2009
Employer
CITY OF LANSING, MICHIGAN
2018
204
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205
CITY OF LANSING, MICHIGAN
Full-time Equivalent City Governmental Employees by Function/Program
Last Ten Fiscal Years
General government
City council 10 10 10 10 10 10
Mayor's office 7 (9)6 6 5 5 5
City clerk 5 5 5 5 5 5
54-A district court 45 45 45 46 43 43
City attorney's office 11 11 11 11 10 10
City TV 2 2 2 2 2 2
Internal auditor 1 1 1 1 1 1
Human resources 11 12 12 10 10 9
Information technology 16 11 11 11 11 10
Finance
Accounting/budget/purchasing 8 8 8 (7)9 10 10
Treasury/income tax 11 11 10 9 9 20
Assessing 11 11 11 11 11
Property management - - - - - - (4)
Fleet management - - - - - - (4)
30 30 29 29 30 30
Planning & neighborhood development
Administration 2 2 2 2 2 2
Code compliance 14 - - - - (6)15
Building safety 13 13 13 13 13 12
Planning 3 (9)4 4 4 4 4
Development 9 9 10 10 11 9
Parking & transportation 14 14 14 14 15 20
55 42 43 43 45 62
1HLJKERUKRRG &LWL]HQ(QJDJHPHQW 1 (9)- - - - -
Police 241 240 239 239 234 (6)229 (5)
Fire 181 181 181 181 188 180
Code compliance - 14 14 14 14 (6)
181 195 195 195 202 180
Public services
Administration & engineering 20 20 20 19 19 19
Operations & maintenance 118 117 117 117 117 (6)120
Service garage - - - - - -
Wastewater 42 41 41 41 41 41
Property Management 16 16 18 18 18 18 (4)
Fleet Management 30 30 26 27 27 27 (4)
226 224 222 222 222 225
Human relations & community services 9 8 7 7 6 5
2015 2014 2013Function/Program 201620172018
206
Table 16 - Unaudited
10 11 11 11
5 5 5 5
5 6 7 7
48 50 53 53
10 11 12 12
2 2 2 2
1 1 1 1
9 11 12 13
10 14 15 17
13 14 16 17
10 11 12 13
11 11 12 12
18 20 21 23
27 29 30 31
79 85 91 96
2 2 2 2
15 16 16 16
13 15 15 15
4 5 5 4
9 9 9 10
20 20 40 41
63 66 87 88
- - - -
260 327 344 342
179 207 218 219
179 207 218 219
21 21 17 18
121 135 110 113
- - - -
41 41 44 50
- - - -
- - - -
183 197 171 181
5 5 5 6
2012 2011 2010 2009
207
CITY OF LANSING, MICHIGAN
Full-time Equivalent City Governmental Employees by Function/Program
Last Ten Fiscal Years
Parks & recreation
Administration & design 6 6 6 6 6 5
Grounds & forestry - - - - - -
Leisure & special recreation 6 6 6 6 6 8
Cemeteries 1 1 1 1 1 1
Golf/ice arena 3 3 3 3 3 3
16 16 16 16 16 17
867 858 854 852 852 843
Source: The City of Lansing, Michigan
The following restructuring of departments have occurred:
(1) A payroll position was transferred from Finance to Human Resources
(2) Four custodial positions were transferred from Parks & Recreation to Finance
(4) Fleet and Property Management were moved from the Finance Department to the Public Service Department
(5) On June 27, 2012, 911 Dispatch employees were transferred from the City to Ingham County.
(7) Purchasing operations were transferred to the Lansing Board of Water and Light for FY 2016.
(8) Code Compliance was transferred from Fire to ED&P.
(3) Grounds Maintenance positions were moved from Parks & Recreation and Planning & Neighborhood Development and
consolidated with Public Service staff.
(6) Code Compliance (14 positions) were transferred from ED&P to Fire; four (4) positions to Police, and one (1) position to
Public Service for FY 2014.
(9) One (1) position was transferred from Human Resources to Mayor's Office and one (1) position was transferred from ED&P
to N&CE in FY 2018.
2018Function/Program 2017 2016 201320142015
208
5 5 7 7
- - 27 31
10 12 15 19
1 1 3 4
3 4 4 4
19 22 56 65
888 1,020 1,090 1,118
2012 200920102011
209
CITY OF LANSING, MICHIGAN Table 17 - Unaudited
Operating Indicators by Function/Program
Last Ten Fiscal Years
2018 2017 2016 2015 2014 2013 2012 2011
Public safety
Fire department responses 22,768 21,902 21,115 20,170 19,427 18,444 17,093 16,974 16,659 15,852
EMS related 19,264 18,827 18,275 17,376 16,235 15,918 14,851 14,628 14,398 13,447
Fire related 3,063 3,075 2,840 2,794 3,012 2,526 2,242 2,346 2,261 2,405
Police department responses 107,379 82,722 71,468 79,331 76,855 73,087 74,058 78,112 87,724 89,958
Arrests 4,507 5,710 3,880 4,510 5,656 7,196 8,043 8,858 11,644 11,559
Traffic violations 6,496 9,385 7,334 10,781 7,756 14,905 8,829 15,585 18,297 20,122
Public works
Potholes filled 54,773 53,332 53,488 53,281 55,193 33,155 30,116 32,918 24,945 43,601
Streets resurfaced (miles) 6.0 8.7 8.8 4.0 4.6 6.0 5.0 9.0 20.7 16.2
Recreation
Recreation participation 120,245 98,978 101,335 122,639 50,859 55,122 66,836 66,254 70,529 (1)39,060
Pavilion rentals 202 180 242 206 185 199 198 161 288 315
Sewage disposal
Average amount processed
daily (gal) 14.45 million 16.32 million 15.46 million 13.28 million 14.49 million 14.75 million 12.82 million 12.83 million 15.01 million 18.15 million
Parking system
Average number of monthly permit 3,310 2,581 3,218 3,077 2,891 2,718 2,735 3,122 3,480 3,783
Parking tickets issued 32,857 33,492 32,990 30,888 34,373 38,127 41,829 45,176 63,610 66,183
Cemetery
Lots sold 88 162 115 138 93 113 115 143 142 119
Garbage and rubbish
Yards sent to landfill 20,492 20,007 20,115 19,667 18,829 17,985 18,705 20,334 21,805 29,322
Recycling
Recycled goods sold (tons) 5,593 5,834 5,940 5,691 5,075 3,562 3,149 2,446 2,163 2,591
Yards composted 20,031 24,223 24,413 21,685 25,260 21,832 20,413 15,725 21,819 21,871
Source: The City of Lansing, Michigan
(1) The addition of the Southside Community Center, with a pool, resulted in a large increase in recreation participation in FY 2010
Function/Program 20092010
210
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211
CITY OF LANSING, MICHIGAN
Capital Assets Statistics by Function/Program
Last Ten Fiscal Years
2018 2017 2016 2015 2014 2013
Public safety
Police stations 2 2 2 2 2 2
Police patrol units 60 60 60 60 61 60
Fire stations 6 6 6 6 6 6
Public works
Streets (miles) 414.00 414.00 414.00 414.00 411.00 411.00
Traffic signals 200 200 200 200 200 204
Recreation
Park acreage 2,017.56 2,134.26 2,134.26 2,363.45 2,364.85 2,364.85
Playgrounds 747474727275
Baseball/softball fields 25 25 25 47 61 61
Soccer/football fields 15 15 14 6 6 6
Community centers 444444
Sewage disposal
Sanitary sewers (miles) 363 361 361 361 359 359
Storm sewers (miles) 237 235 235 235 234 234
Combined sewers (miles) 187 188 188 188 188 188
Parking system
Ramps 444444
Lots 16 16 16 17 17 18
Meters 2,166 2,166 2,166 2,166 2,452 2,452
Cemetery
Number of cemeteries 333333
Golf
Number of courses 111111
Acreage 115 115 115 115 115 115
Garbage and rubbish
Refuse collection trucks 16 14 14 17 17 17
Recycling
Recycling trucks 755777
Source: The City of Lansing, Michigan
Function/Program
212
Table 18 - Unaudited
2012 2011 2010 2009
2 3 3 3
60 58 61 61
6 8 9 9
407.80 410.80 410.63 410.15
204 208 203 196
2,434.88 2,422.63 2,422.63 2,422.63
73 71 71 82
61 61 61 61
6666
4444
359 359 357 354
234 234 233 230
188 188 191 192
4444
15 15 16 16
2,452 2,452 2,493 2,493
3333
1111
115 115 115 115
19 22 18 16
7 9 10 10
213