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Home My WebLink About2011 - Department of Finance - Comprehensive Annual Financial Report CITY OF LANSING 2011 Comprehensive Annual Financial Report FOR FISCAL YEAR ENDED JUNE 30, 2011 S " y H VIRG BERNERO, Mayor Gerald Ambrose, Director of Finance Prepared by: Department of Finance LANSING CITY GOVERNMENT 2011 MAYOR VIRG BERNERO CLERK CHRIS SWOPE DISTRICT COURT JUDGES PATRICK F. CHERRY CHARLES F. FILICE HUGH B. CLARKE, JR. FRANK J. DELUCA LOUISE ALDERSON AT LARGE CITY COUNCIL BY WARDS DERRICK QUINNEY ERIC HEWITT — 1St Ward KATHIE DUNBAR TINA HOUGHTON — 2nd Ward BRIAN JEFFRIES A'LYNNE ROBINSON — 3rd Ward CAROL WOOD JESSICA YORKO — 4" Ward OFFICERS CityAssessor............................................................................................................... Maria Irish CityAttorney......................................................................................................... Brigham Smith City Treasurer........................................................................................................ Antonia Kraus Executive Assistant to the Mayor........................................................................Gerald Ambrose Finance, Director of............................................................................................Gerald Ambrose FireChief............................................................................................................William Cochran Human Relations & Community Services, Director of ............................. Joan Jackson Johnson InternalAuditor..........................................................................................................Arnie Yerxa Parks & Recreation, Director of..................................................................... Murdock Jemerson Human Resources, Director of ............................................................................. Terri Singleton Planning & Neighborhood Development, Director of.......................................... Robert Johnson Police Chief .................................................................................................... Teresa Szymnaski Public Service, Director of ......................................................................................Chad Gamble -i- CITY OF LANSING -ii- INTRODUCTORY SECTION -iii- City of Lansing, Michigan Table of Contents Page INTRODUCTORY SECTION TitlePage...............................................................................................................................................................i Tableof Contents ...........................................................................................................................................iv-vi Letterof Transmittal......................................................................................................................................vii-xi Certificate of Achievement................................................................................................................................xii City Organizational Structure...........................................................................................................................xni FINANCIAL SECTION IndependentAuditors' Report.......................................................................................................................... 1-2 Management's Discussion and Analysis........................................................................................................ 3-13 Basic Financial Statements Government-wide Financial Statements Statementof Net Assets..........................................................................................................................18 Statement of Activities..................................................................................................................... 19-20 Governmental Fund Financial Statements BalanceSheet.........................................................................................................................................24 Reconciliation of Fund Balances on the Balance Sheet for Governmental Funds to Net Assets of Governmental Activities on the Statement of Net Assets.............................................25 Statement of Revenues,Expenditures and Changes in Fund Balances..................................................26 Reconciliation of the Statement of Revenues,Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities........................................................27 Statement of Revenues,Expenditures and Changes in Fund Balances—Budget and Actual GeneralFund.................................................................................................................................28-29 Proprietary Fund Financial Statements Statementof Net Assets......................................................................................................................32 Statement of Revenues, Expenses and Changes in Fund Net Assets.................................................33 Statementof Cash Flows.............................................................................................................. 34-35 Fiduciary Fund Financial Statements Statement of Fiduciary Net Assets.....................................................................................................38 Statement of Changes in Fiduciary Net Assets...................................................................................39 Component Units Financial Statements Combining Statement of Net Assets...................................................................................................44 Combining Statement of Activities....................................................................................................45 Index for Notes to Financial Statements .....................................................................................................48 Notes to Financial Statements...............................................................................................................49-88 Required Supplementary Information Schedules of Funding Progress and Employer Contributions: Employees' Retirement System..............................................................................................................90 Police and Fire Retirement System........................................................................................................91 Other Postemployment Benefit Trust Funds..........................................................................................92 -iv- City of Lansing, Michigan Table of Contents Page Combining and Individual Fund Statements and Schedules Nonmajor Governmental Funds CombiningBalance Sheet......................................................................................................................94 Combining Statement of Revenues,Expenditures and Changes in Fund Balances...............................95 Nonmajor Special Revenue Funds CombiningBalance Sheet................................................................................................................ 98-99 Combining Statement of Revenues,Expenditures and Changes in Fund Balances..................... 100-101 Schedules of Revenues, Expenditures, and Changes in Fund Balances—Budget and Actual................................................................................................... 102-109 Nonmajor Debt Service Funds CombiningBalance Sheet....................................................................................................................112 Combining Statement of Revenues,Expenditures and Changes in Fund Balances.............................113 Nonmajor Capital Projects Funds CombiningBalance Sheet............................................................................................................ 116-117 Combining Statement of Revenues, Expenditures and Changes in Fund Balances..................... 118-119 Nonmajor Permanent Funds CombiningBalance Sheet....................................................................................................................122 Combining Statement of Revenues, Expenditures and Changes in Fund Balances.............................123 Nonmajor Enterprise Funds Combining Statement of Net Assets............................................................................................. 126-127 Combining Statement of Revenues,Expenses and Changes in Fund Net Assets ........................ 128-129 Combining Statement of Cash Flows........................................................................................... 130-133 Internal Service Funds Combining Statement of Net Assets.....................................................................................................136 Combining Statement of Revenues,Expenses and Changes in Fund Net Assets................................137 Combining Statement of Cash Flows...................................................................................................138 Agency Funds Combining Statement of Fiduciary Assets and Liabilities ..................................................................140 Combining Statement of Changes in Fiduciary Assets and Liabilities ................................................141 STATISTICALSECTION..................................................................................................................................143 Financial Trends: NetAssets by Component...................................................................................................................145 Changes in Net Assets—Governmental Activities..................................................................... 146-147 Fund Balances—Governmental Funds...............................................................................................148 Changes in Fund Balances—Governmental Funds ............................................................................149 Revenue Capacity: Assessed and Actual Value of Taxable Property................................................................................150 Direct and Overlapping Property Tax Rate.........................................................................................151 Principal Property Taxpayers...................................................................................................... 152-153 Property Tax Levies and Collections..................................................................................................154 -v- City of Lansing, Michigan Table of Contents (Concluded) Debt Capacity: Ratiosof Outstanding Debt by type....................................................................................................155 Ratios of General Bonded Debt Outstanding......................................................................................156 Computation of Net Direct and Overlapping Debt.............................................................................157 LegalDebt Margin..............................................................................................................................158 Pledged Revenue Coverage................................................................................................................159 Demographic and Economic Statistics: Demographic and Economic Statistics ...............................................................................................160 PrincipalEmployers.................................................................................................................... 161-162 Operating Information: Full-Time Equivalent City Government Employees by Function/Program........................................163 Operating Indicators by Function/Program.........................................................................................164 Capital Asset Statistics by Function/Program.....................................................................................165 -vi- FINANCE DEPARTMENT 831 City Hall, 124 W.Michigan Ave. Lansing,Michigan 48933 (517)483-4500 �r.Cs H PC I Virg Bemero, Mayor Council President A'Lynne Robinson December 22, 2011 and Council Members loth Floor City Hall Lansing, Michigan 48933-1694 Dear President Robinson 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, 2011. 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 2010/2011 financial statements have been audited by Rebmann 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, 2011, 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 unqualified 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' report is presented as the first component of the financial section of this report. This letter of transmittal is designed to complement the Management's Discussion and Analysis (MD&A) and should be read in conjunction with it. The Management's Discussion and Analysis can be found immediately following the Independent Auditors' Report. -vii- "Equal Opportunity Employer" 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. Lansing is a mature core city with a population of 114,297, according to the 2010 census, and offers a full range of services. During the fiscal year ended June 30, 2011, the City operated police headquarters and two precincts with over 300 sworn police officers; eight fire stations with a fire protection force of over 200; over 300 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 were 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 units. 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. The Lansing Building Authority is a blended component unit. 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, the Smart Zone, and the Brownfield Redevelopment Authority are reported as a 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. -viii- 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 the Single Audit Act of 1996 and the U.S. Office of Management and Budget Circular A-133, Audits of States. Local Governments, and Non-profit Organizations. 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. Budgeting Controls 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. The City Council must, by charter, adopt the budget for the ensuing fiscal year by third Monday in May. The budget is adopted at the activity level within each department. 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. The budget is adopted at the activity level within each department. Risk Management The City carries all-risk coverage on all real and business personal property. The total coverage is $485 million with a $25,000 self-insured retention. Workers Compensation is self insured with excess reinsurance coverage for claims exceeding $500,000 from the State Accident Fund. The City carries liability coverage in the amount of$16 million per occurrence. ECONOMIC CONDITION AND OUTLOOK ECONOMIC ANALYSIS OF THE CITY OF LANSING 2010/2011 The Michigan economy is starting to show signs of rebounding from the "Second Great Recession", Lenders and businesses are cautiously starting to invest in what are considered safe investments. The City continues to move along and is poised to recover as the National and World economies do. Lansing's regional unemployment rate has dropped more than 2% and is one of the lowest rates in Michigan. Lansing also tops the state in terms of growth in Gross Domestic Product. General Motors, Lansing's largest private sector employer has been hiring and announced that there are no longer any GM employees laid-off in the Lansing area. Also the LEDC has been working on a surprising number of economic projects that have happened in 2011 and several more are slated to break ground in 2012. -ix- • The former Knapps Centre, a $36 million, historic 150,000 sf. former department store in downtown Lansing, will be renovated next year into a mixed use development. • Med Assurant, a medical service provider located in Lansing, created 250 jobs. • The former YMCA building in Lansing will be demolished and be replaced by a new four story, 228 unit, apartment building with 20,000 sf. of retail and commercial space. • There are several major projects in the planning stage that promise to accelerate the Lansing Economy. These include two long vacant parcels of land, the former Deluxe Inn site and the Ottawa Butler parcel. Mixed use developments on these two parcels could create hundreds of jobs and provide more living options in Lansing. • There are also exciting things about to happen along the river front in downtown Lansing. The former Lansing City market site will be redeveloped and other major develop projects will be announced very soon. These projects will carry on the momentum created the $182 million Accident Fund project and new Lansing City Market. • The Lansing Board of Water and Light has recently begun construction of a new $180 million co-generation plant that will use natural gas to produce clean and affordable electricity and steam for Lansing's residents and businesses. • Accident Fund Insurance Company of America had its grand opening of its new national headquarters. The campus rests on 7 acres of land and consists of a newly constructed parking ramp, the renovated Ottawa Street Power Station, and a new building addition. • Blue Cross and Blue Shield of Michigan began renovations on the old Accident fund headquarters. This is to accommodate moving 260 employees from their Delta Township office and 130 employees from their Southfield office to the Downtown location. Lansing is an environment of high-growth possibilities and a reasonably safe return on investment. Lansing is poised to benefit from the new generation of young people, entrepreneurs and new economy businesses who are now demanding an urban environment for living and working. Although tough times remain, and some people and businesses are hurting, the City of Lansing is still poised for a remarkable, sustained and historic period of economic diversity and growth. -x- Awards and Acknowledgements 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, 2010. This was the 33rd 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. 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. Preparation of this comprehensive annual financial report was made possible by the dedicated service of the entire staff of the Finance Department. Each member of the department has our sincere appreciation for their contributions made in the preparation of this report and in the financial management of the City. The 33rd consecutive GFOA award, recognizing their efforts, is well deserved indeed. Sincerely, 7f Virg Bemero Mayor Gerald Ambrose Director of Finance -xi- Certificate of Achievement for Excellence in Financial Reporting Presented to City of Lansing Michigan For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2010 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports(CAFRs)achieve the highest standards in government accounting and financial reporting. E 17fi,��, • + �•�• UM1FA STbTES u. WD CX%d° 3 President G4RP'ORATIdk Crriexc.� �� Executive Director -Xll- V] y ti Y o � x � vs C7xa 0 U v cd c. cn I' Cd u Q ry O Y L!±j Cd 4-4 '\Ccoo F cL W4 � O Q� 40 S"'•� a� W u o C Y .� � p waaF~ � � � �•� o on.cn � Q NUxCAa O p U W boo U maw CJ on �o o � � Y aUUQ —xiii— CITY OF LANSING -X1V- FINANCIAL SECTION CITY OF LANSING P\e h m a n n Rebmann Robson 675 Robinson Rd. Jackson,MI 49203 Ph:517.787.6503 Fx:517.788.8111 www.rehmann.com INDEPENDENT AUDITORS'REPORT December 22, 2011 Honorable Mayor and Members of the City Council City of Lansing, Michigan 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, as of and for the year ended June 30, 2011, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City of Lansing's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, 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, 2011, and the respective changes in financial position and cash flows, where applicable, thereof and the budgetary comparisons for the General Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. CPAs • Business ConsuLtants • FinanciaL Advisors UNRNMI LNTFKVN -1- In accordance with Government Auditing Standards, we have also separately issued our report dated December 22, 2011, 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 and should be read in conjunction with this report in considering the results of our audit. The Management's Discussion and Analysis on pages 3-13 and the historical supplementary information for the Employees' and Police and Fire Retirement Systems and other postemployment benefit trust funds listed in the table of contents are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit this information and express no opinion on it. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the City of Lansing's basic financial statements. The introductory section, combining and individual fund financial statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. 449 WZ4ri. -2- MANAGEMENT'S DISCUSSION and ANALYSIS -3- MANAGEMENT'S DISCUSSION AND ANALYSIS 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, 2011 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. HIGHLIGHTS • Total government-wide assets of the City exceeded its liabilities at the close of the fiscal year by $427.9 million(reported as net assets), a decrease of$10.2 million from fiscal year 2009/2010. Component units of the City reported a deficit of net assets of $34.2 million, an improvement of $700,000 from the previous year. This component unit deficit is planned to be covered by future tax revenue captures in the TIFA, Smart Zone, and Brownfield Component Units. • As of the close of the 2010/2011 fiscal year, the City's governmental funds reported combined ending fund balances of$20.3 million. Of this, $10.6 million is legally restricted and/or unavailable to spend (i.e. amounts tied up in inventories), and $5.1 million is committed for designated projects, leaving $4.6 million unrestricted/uncommitted. • 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 $4.9 million. The general fund in total experienced a fund balance decrease of$0.9 million from FY 2009/2010. Please see the "General Fund and Budgetary Highlights" section of this Management Discussion and Analysis (page 14) for further detail. • The business-type activities reported net assets at year-end of$251.4 million, an increase of$6.4 million during the year which is the result of the receipt of federal stimulus dollars for the City's Combined Sewer Overflow(CSO) and tertiary building projects, sewer fund operations needed to support the CSO- incurred debt long-term, and the conversion of a loan to a grant in the City's parking system. • The City's total bonded and loaned debt was $272.7 million at June 30, 2011, a decrease of$5.4 million (or 2.8%), which represents the net difference between new issuances, payments, refunding of outstanding debt, and conversion of a loan to a grant. During the year, the City issued debt of $3.2 million in limited tax general obligation bonds for the consolidation of its fleet/garage operations from two facilities to one and $5.1 million to refund sewer and fire station bond issues. $3 million of a $4.2 million loan from the State of Michigan was converted to a grant in the City's parking system. More detailed information regarding these activities and funds can be found in footnote 3-G, Long Term Debt which begins on page 70. OVERVIEW OF THE FINANCIAL STATEMENTS 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. -4- Government-wide Statements (Reporting the City as a Whole) These statements include all non-fiduciary assets and liabilities, but exclude assets and liabilities related to pensions. The Statement of Net Assets 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". The Statement of Net Assets (page 18) presents all of the City's assets and liabilities, with the difference between the two reported as "net assets". Over time, increases and decreases in net assets are an indicator of whether the City's long term financial position is improving or deteriorating. The Statement of Activities (pages 19 and 20) presents information showing how the City's net assets changed during the most recent fiscal year. All changes in net assets 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 Assets and the Statement of Activities report three activities, as follows: • 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 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 four such discretely presented units; the Lansing Entertainment and Public Facilities Authority, the Tax Increment Finance Authority,the Brownfield Redevelopment Authority, and the Lansing Regional SmartZone. These financial statements include two schedules (pages 25 and 27)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 revenue 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. -5- • Bond issuance costs, 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, litigation, and others only appear as liabilities in the government-wide statements. • 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 Basic Financial Statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes can be found beginning on page 49 of this report. Fund Financial Statements (Reporting the City's Major Funds) The City's Major Funds are identified as its Sewage Disposal Fund, and it's Parking System Fund, along with its General Fund. The major fund financial statements begin on page 24. In addition to major funds, individual fund data for the nonmajor funds begins on page 94. 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. • 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 project, 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 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 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 Assets and Changes in Fiduciary Net Assets beginning on page 38. These funds, which include pension and other employee 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. -6- Additional 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. 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. FINANCIAL ANALYSIS OF THE GOVERNMENT AS A WHOLE The City's combined net assets decreased $10.2 million over the course of this fiscal year's operations to a total of$427.9 million. Net assets of governmental activities decreased $16.7 million or 8.6%, and business- type activities increased$6.5 million or 2.6%. Net Assets as of June 30, (in millions of dollars) Governmental Business-type Total Primary Activities Activities Government 2011 2010 2011 2010 2011 2010 Assets Current and other non-current assets $ 53.2 $ 55.2 $ 79.5 $ 86.5 $ 132.7 $ 141.7 Capital assets 216.2 223.6 407.6 400.9 623.8 624.5 Total assets $ 269.4 $ 278.8 $ 487.1 $ 487.4 $ 756.5 $ 766.2 Liabilities Long-term liabilities 75.7 68.0 $ 230.8 $ 237.9 $ 306.5 $ 305.9 Other liabilities 17.2 17.6 4.9 4.5 22.1 22.1 Total liabilities $ 92.9 $ 85.6 $ 235.7 $ 242.4 $ 328.6 $ 328.0 Net assets Invested in capital assets,net of related debt 180.5 186.5 204.1 194.9 384.6 381.4 Restricted 14.7 14.3 13.1 19.9 27.8 34.2 Unrestricted (18.8) (7.6) 34.2 30.2 15.4 22.6 Total net assets $ 176.4 $ 193.2 $ 251.4 $ 245.0 $ 427.8 $ 438.2 The largest component (89.9%) of the City's net assets reflects its investment in capital assets (e.g. land, buildings, equipment, infrastructure, and others), less any related debt outstanding that was needed to acquire or construct the assets. Restricted net assets are the next largest component, comprising 5.8%, is subject to external restrictions such as bond covenants, City Charter, State legislation or Constitutional provision. The remaining portion, unrestricted net assets are resources that may be used at the City's discretion, but often have limitations based on policy action. -7- The following condensed financial information was derived from the government-wide Statement of Activities and reflects how the City's net assets changed during the fiscal year: Change in Net Assets for the Fiscal Year Ended June 30, (in millions of dollars) Governmental Business-type Total Primary Activities Activities Government 2011 2010 2011 2010 2011 2010 Revenues Program revenues Charges for services $ 19.0 $ 18.6 $ 41.5 $ 41.3 $ 60.5 $ 59.9 Operating grants(restricted) 30.1 27.5 4.4 1.5 34.5 29.0 Capital grants .2 3.1 1.5 11.9 1.7 15.0 General revenues Taxes 65.9 66.4 - - 65.9 66.4 State shared revenue 14.2 14.2 - - 14.2 14.2 Unrestricted Grants and Contributions 13.0 11.6 - - 13.0 11.6 Unrestricted Investment Earnings 1 .3 .7 .1 .8 .4 Gain on Sale of Capital Assets 1 .1 - - .1 .1 Total revenues 142.6 141.8 48.1 54.8 190.7 196.6 Expenses General government,administrative 25.7 30.3 - - 25.7 30.3 Public Safety 83.5 84.6 - - 83.5 84.6 Public Works 26.4 29.3 - - 26.4 29.3 Recreation and Culture 8.2 7.3 - - 8.2 7.3 Community Development 12.8 9.7 - - 12.8 9.7 Interest on Long Term Debt 2.1 2.2 - - 2.1 2.2 Sewage Disposal System - - 26.4 24.9 26.4 24.9 Municipal Parking System - - 9.9 8.3 9.9 8.3 Cemetery - - .8 .6 .8 .6 Golf - - .8 .9 .8 .9 Garbage and Refuse Collection - - 1.5 1.4 1.5 1.4 Recycling - - 2.8 2.8 2.8 2.8 Total expenses 158.7 163.4 42.2 38.9 200.9 202.3 Excess before transfers (16.1) (21.6) 5.9 15.9 (10.2) (5.7) Transfers in(out) (.6) (A) .6 .5 - .1 Changes in net assets (16.7) (22.0) 6.4 16.4 (10.2) (5.6) Beginning net assets as restated 193.2 215.2 245.0 228.6 438.2 443.8 Ending net assets $ 176.5 $ 193.2 $ 251.4 $ 245.0 $ 428.0 $ 438.2 (1)In FY 2011,$3 million in functions formerly classified as Public Works was changed to Community Development -8- Governmental Activities: The following chart depicts revenues of the governmental activities for the fiscal year: Revenues - Governmental Activities Fiscal Year Ending June 30, 2011 Prop ertytax and Sp eci al Ass essm ents Income Tax 26.1% 20.1% Gain on Sale of Capital Assets 0.1% U n restricted I rre eshment Earnings hargesfor Services 0.1% 13.3% U n restricted G ra d Contributions 9.1% Ca italGrantsand Perontrib tiorantsand P Contributions State Shared Revenue Contributions (restricted) 10.0% 0.1% 21.1% Property taxes comprised 26.1%, or $37.2 million, of Governmental Activity revenue, with $606,598 representing debt service on voted unlimited tax general obligation debt. The City's operating millage is currently 15.44 mills. In accordance with Charter and State Constitutional provisions, the City may levy up to 19.1692 mills for operations in FY 2011. 3.73 potential mills remain unlevied, which equates to approximately$6.8 million in potential,but unlevied,property tax revenue. Income taxes comprised 20.1%, or$28.7 million, of Governmental Activity revenue which,the full amount of which is revenue to the General Fund. 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. Restricted Operating Grants and Contributions made up $30.2 million, or 21.1% of Governmental Activity revenue. In this category, $13.1 million are recurring revenues from: State Gas & Weight tax revenues restricted for streets; Community Development, HOME, and Emergency Shelter entitlement grants; and drug forfeiture funds restricted for drug enforcement efforts. The remaining $17.1 million is attributable to non- entitlement grants. -9- Unrestricted Grants and Contributions account for the next-largest category of Governmental Activity Revenue, comprising 19.1%, or$27.2 million, of revenues. Just-less-than-half of this category, $14.2 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 and motor fuel and weight taxes. Equity payments from the independently-managed-and-operated Board of Water and Light account for$11.7 million of the category, with remaining $1.3 million coming from payments from the State of Michigan for a payment in lieu of tax for its fire protection for its properties and reimbursement of liquor license enforcement costs. The following chart depicts expenses of the governmental activities for the fiscal year: Expenses - Governmental Activities Fiscal Year Ending June 30, 2011 Community Interest on Long-term Development Debt 8 ova 1.3/o 1 Transfers 0.0% General Government (administrative) Recreation and Culture 16.2% 5.2% Public Works Public Safety 16.6% 52.6% Business-type Activities Net assets of the business-type activities increased by $6.4 million during the fiscal year. The main cause of this increase was the result of the receipt of federal stimulus dollars for the City's Combined Sewer Overflow (CSO) and tertiary building projects, sewer fund operations needed to support the CSO-incurred debt long- term, and the conversion of a loan to a grant in the City's parking system. FINANCIAL ANALYSIS OF THE CITY'S FUND STATEMENTS As the City completed the fiscal year, its governmental funds (see pages 24-29) reported combined ending fund balances of$20.3 million. Of this, $10.6 million is legally restricted and/or unavailable to spend (i.e. amounts tied up in inventories), and $5.1 million is committed for designated projects, leaving $4.6 million unrestricted/uncommitted, which is the "unassigned" the amounts in the City's General Fund and Budget Stabilization Fund. -10- General Fund and Budgetary Highlights The FY 2010/2011 budget was adopted as a balanced budget,based on projected revenues,without any use of reserves. Due to the continued effects of the "Great Recession," income tax revenues and property tax revenues, affected by bankruptcies, came in lower than anticipated. At the same time, the City experienced higher-than anticipated healthcare and liability claims costs. During the fiscal year, revenue projections were downgraded and expenses adjusted accordingly, and the budget was amended to include a$1.2 million use of reserves, $911,972 of which was needed at year-end. The FY 2011/2012 budget, adopted a level commensurate with the revenue levels experienced in FY 2010/2011, does not include any use of reserves. Sewage Disposal Fund Net assets increased $4.5 million to $225.0 million in FY 2011. $1.4 million of that increase was due to the receipt of American Reinvestment and Recovery Act (ARRA) monies for its Combined Sewer Overflow (CSO) and tertiary building projects. The remaining $3.7 million of the increase resulted from operations during the fiscal year necessary to fund the long-term debt associated with the CSO program. Parking Fund The Municipal Parking Fund net assets increased $2.1 million, the main reason for the increase being a conversion of a loan from the State of Michigan to a grant. Operationally,the parking system had a$455,000 loss as a result of scheduled parking ramp maintenance. Capital Assets Capital Assets: At the end of the fiscal year 2011, the City had invested $623.8 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 the notes to the basic financial statements. For more detailed information,please refer to footnote 3-D. Capital Assets as of June 30, (net of depreciation,in millions of dollars) Governmental Business-type Total Primary Activities Activities Government 2011 2010 2011 2010 2011 2010 Land $ 24.8 $ 24.7 $ 13.7 $ 13.6 $ 38.5 $ 38.3 Land improvements 7.0 6.1 12.7 13.1 19.7 19.2 Buildings and improvements 52.9 55.9 100.2 100.4 153.1 156.3 Equipment 7.8 7.5 .6 .9 8.4 8.4 Infrastructure 114.9 120.3 239.4 178.5 354.3 298.8 Subtotal 207.4 214.5 366.6 306.5 574.0 521.0 Construction in progress 8.8 9.1 41.0 94.4 49.8 103.5 Total $ 216.2 $ 223.6 $ 407.6 $ 400.9 $ 623.8 $ 624.5 -11- 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, golf course, and firing range 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. More detailed information regarding the City's long-term obligations is presented in Note 3-G (Long-Term Debt) to the financial statements. Outstanding Debt as of June 30, (in millions of dollars) 2011 2010 Governmental: General obligation bonds(backed by the City) $ 27.7 $ 26.2 Installment purchase contracts 9.6 10.9 Loans 0.8 1.0 Sub-total 38.0 38.1 Business Type: General obligation bonds(backed by the City) 200.5 202.8 Revenue bonds and notes(backed by specific fee revenues) 32.6 35.4 Loans 1.6 4.2 Sub-total 234.7 242.4 Total $ 272.7 $ 280.6 During the year, the City issued debt of $3.2 million in limited tax general obligation bonds for the consolidation of its fleet/garage operations from two facilities to one and$5.1 million to refund sewer and fire station bond issues. More detailed information regarding these activities and funds can be found in footnote 3- G,Long Term Debt which begins on page 70. ECONOMIC CONDITION AND OUTLOOK The State of Michigan's economic challenges, including the national recession, American automobile industry crisis, housing market and foreclosure impacts on property tax revenues, combined with rising labor force and healthcare costs, continues to place budgetary and fiscal constraints on the City of Lansing. A structural imbalance between revenue and expenditure growth exists, as is the case for the majority of cities, especially those that are urban centers, in Michigan. To address these budgetary challenges, and to protect vital services to the public, since his inauguration in January, 2006, Mayor Bernero has implemented a budgetary strategy of maximizing revenues; reducing expenses; improving operational and technological efficiencies; consolidating like functions; collaborating with neighboring municipalities, counties, and non-profit entities to provide funding for City-owned assets that benefit the entire region. The Mayor also continues to work aggressively with the unions to contain the rising cost of healthcare and other compensation costs. -12- In this historic economic downturn, including the credit crisis in the private sector, the City saw significant economic development announcements and national recognition(see Economic Condition and Outlook in the Transmittal Letter). The City is poised to experience continued, significant economic growth in the next several years. As with other municipalities, especially in Michigan,the City government will continue to face significant challenges in this climate of declining property values and revenues in the face of rising compensation, healthcare, and energy costs. The Mayor is committed to directing the City in a fiscally responsible manner by living within the City's means and not relying on reserves to balance the budget. CONTACTING THE CITY FINANCE DEPARTMENT 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. If you have any questions about this report or need additional financial information, contact the Finance Department at(517)483-4500. -13- CITY OF LANSING -14- BASIC FINANCIAL STATEMENTS -15- CITY OF LANSING -16- GOVERNMENT-WIDE FINANCIAL STATEMENTS City of Lansing Statement of Net Assets June 30,2011 Primary Government Governmental Business-type Component Activities Activities Totals Units Assets Cash and investments $ 26,257,235 $ 13,048,068 $ 39,305,303 $ 1,649,458 Receivables,net 35,730,674 32,983,995 68,714,669 1,209,512 Internal balances (18,152,738) 18,152,738 - - Due from primary government - - - 1,640,445 Inventories,prepaids and other assets 2,968,494 1,077,504 4,045,998 271,290 Restricted assets: Cash and investments 3,118,494 13,983,705 17,102,199 2,043,545 Receivables,net - 173,213 173,213 - Net other postemployment benefit asset 3,214,740 - 3,214,740 - Net pension asset 19,409 - 19,409 - Capital assets not being depreciated 33,531,959 54,749,869 88,281,828 - Capital assets being depreciated,net 182,709,064 352,896,522 535,605,586 111,992 Total assets 269,397,331 487,065,614 756,462,945 6,926,242 Liabilities Accounts payable and accrued liabilities 14,015,845 3,482,054 17,497,899 1,460,938 Accrued interest payable 334,404 1,256,737 1,591,141 14,450,791 Due to component units 1,640,445 - 1,640,445 - Unearned revenues 1,240,867 124,863 1,365,730 360,178 Long-term liabilities: Due within one year 6,221,332 17,570,229 23,791,561 2,023,329 Due in more than one year 49,868,147 213,224,225 263,092,372 22,792,972 Net other postemployment benefit obligation 19,568,200 - 19,568,200 - Total liabilities 92,889,240 235,658,108 328,547,348 41,088,208 Net assets Invested in capital assets,net of related debt 180,571,237 204,149,751 384,720,988 100,948 Restricted for: Public safety 636,105 - 6365105 - Public works 6,084,490 - 6,084,490 - Community development 3,178,193 - 3,178,193 - State mandated programs 52,783 - 52,783 - Donations 41,129 - 41,129 - Debt service 3,118,494 11,628,536 14,747,030 - Capital projects - 1,451,766 1,451,766 - Endowments(nonexpendable) 1,666,377 - 1,666,377 - Unrestricted(deficit) (18,840,717) 34,177,453 15,336,736 (34,262,914) Total net assets(deficit) $ 176,508,091 $ 251,407,506 $ 427,915,597 $ (34,161,966) The accompanying notes are an integral part of the financial statements. -18- City of Lansing Statement of Activities For the Year Ended June 30,2011 Program Revenues Operating Capital Charges Grants and Grants and Net(Expense) Functions/Pro rams Expenses for Services Contributions Contributions Revenue Primary government Governmental activities: General government $ 25,665,269 $ 6,742,306 $ 2,069,748 $ $ (16,853,215) Public safety 83,546,997 8,975,173 9,860,844 (64,710,980) Public works 26,355,375 2,449,606 8,948,701 189,414 (14,767,654) Recreation and culture 8,245,451 685,120 112,987 - (7,447,344) Community development 12,825,028 122,326 9,157,998 (3,544,704) Interest on long-term debt 2,116,535 - 4,403 - (2,112,132) Total governmental activities 158,754,655 18,974,531 30,154,681 189,414 (109,436,029) Business-type activities: Sewage disposal system 26,444,741 29,205,945 - 1,439,044 4,200,248 Municipal parking system 9,896,498 7,539,179 4,456,708 - 2,099,389 Cemetery 755,766 225,947 - - (529,819) Golf 846,817 382,546 - (464,271) Garbage and rubbish collection 1,515,600 1,507,577 - (8,023) Recycling 2,809,353 2,609,423 - (199,930) Total business-type activities 42,268,775 41,470,617 4,456,708 1,439,044 5,097,594 Total primary government $ 201,023,430 $ 60,445,148 $ 34,611,389 $ 1,628,458 $ (104,338,435) Component units Brownfield redevelopment $ 1,035,573 $ - $ 188,777 $ - $ (846,796) Community development 4,534,643 - - - (4,534,643) Recreation and culture 5,950,812 4,781,914 1,087,467 - (81,431) Total component units $ 11,521,028 $ 4,781,914 $ 1,276,244 $ - $ (5,462,870) Continued... -19- City of Lansing Statement of Activities (Concluded) For the Year Ended June 30, 2011 Primary Government Governmental Business-type Component Activities Activities Totals Units Changes in net assets Net(expense)revenue $ (109,436,029) $ 5,097,594 $ (104,338,435) $ (5,462,870) General revenues Property taxes 37,233,590 - 37,233,590 6,183,921 Income taxes 28,699,749 - 28,699,749 - Grants and contributions not restricted to specific programs 27,254,574 - 27,254,574 - Unrestricted investment earnings 89,735 689,883 779,618 9,224 Gain on sale of capital assets 108,601 21,166 129,767 - Transfers-internal activities (633,814) 633,814 - - Total general revenues and transfers 92,752,435 1,344,863 94,097,298 6,193,145 Change in net assets (16,683,594) 6,442,457 (10,241,137) 730,275 Net assets(deficit),beginning of year 193,191,685 244,965,049 438,156,734 (34,892,241) Net assets(deficit),end of year $ 176,508,091 $ 251,407,506 $ 427,915,597 $ (34,161,966) The accompanying notes are an integral part of the financial statements. -20- FUND FINANCIAL STATEMENTS -21- CITY OF LANSING -22- Governmental Fund Financial Statements Major Funds General Fund—The general fund 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,beginning on the pages listed below: Special revenue funds,page 98. Debt service funds,page 112. Capital projects funds,page 116. Permanent funds,page 122. -23- City of Lansing Balance Sheet- Governmental Funds June 30,2011 Other Governmental General Funds Totals Assets Cash and cash equivalents $ 1,602,327 $ 1,464,668 $ 3,066,995 Equity in pooled cash 5,298,137 12,942,498 18,240,635 Investments - 1,395,598 1,395,598 Accounts receivable,net 14,332,819 1,563,402 15,896,221 Taxes receivable 323,633 - 323,633 Special assessments receivable 198 806,631 806,829 Loans receivable - 1,438,076 1,438,076 Accrued interest receivable - 1,940,117 1,940,117 Due from other funds 6,391,994 - 6,391,994 Advances to other funds - 80,531 80,531 Due from other governments 5,878,115 6,700,537 12,578,652 Inventories 123,910 1,059,599 1,183,509 Prepaids 47,676 - 47,676 Total assets $ 33,998,809 $ 29,391,657 $ 63,390,466 Liabilities and fund balances Liabilities Accounts payable $ 2,052,675 $ 2,688,456 $ 4,741,131 Deposits payable - 44,345 44,345 Accrued payroll 1,974,022 186,782 2,160,804 Retainage payable 1,458,156 - 1,458,156 Due to other funds 17,139,159 5,542,969 22,682,128 Due to component units 1,640,445 - 1,640,445 Advance from other funds - 243,379 243,379 Due to other governments 1,547,503 592,290 2,139,793 Deferred revenue 2,574,820 5,137,466 7,712,286 Other 281,542 - 281,542 Total liabilities 28,668,322 14,435,687 43,104,009 Fund balances(Note 3-H) Nonspendable 171,586 3,006,507 3,178,093 Restricted 41,129 7,412,008 7,453,137 Committed 178,081 4,908,740 5,086,821 Unassigned(deficit) 4,939,691 (371,285) 4,568,406 Total fund balances 5,330,487 14,955,970 20,286,457 Total liabilities and fund balances $ 33,998,809 $ 29,391,657 $ 63,390,466 The accompanying notes are an integral part of the financial statements. -24- City of Lansing Reconciliation of Fund Balances on the Balance Sheet for Governmental Funds to Net Assets of Governmental Activities on the Statement of Net Assets June 30, 2011 Fund balances-total governmental funds $ 20,286,457 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. Capital assets not being depreciated 33,476,662 Capital assets being depreciated,net 175,378,768 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 revenues in the governmental funds and,therefore,are not included in fund balance. Deferred ambulance fees receivable 1,682,163 Deferred nuisance fees receivable 752,520 Deferred loans receivable 1,238,076 Deferred long-term interest receivable 1,940,117 Deferred long-term special assessments receivable 718,406 Deferred long-term taxes and tax settlement receivables 140,137 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 assets. 8,895,732 Prepaid costs related to other postemployment benefits are not available for current period expenditures and,therefore,are not reported in the funds. Net other postemployment benefit plan asset 3,214,740 Net pension asset 19,409 Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds. Bonds,loans and leases payable (34,1115841) Accrued interest on bonds,loans and leases payable (302,697) Deferred bond issuance costs,net 905317 Net other postemployment benefit obligation (19,568,200) Compensated absences and other long-term liabilities (17,342,675) Net assets of governmental activities $ 176,508,091 The accompanying notes are an integral part of the financial statements. -25- City of Lansing Statement of Revenues,Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended June 30,2011 Other Governmental General Funds Totals Revenues Taxes and special assessments $ 36,352,257 $ 1,019,628 $ 37,371,885 Income taxes 28,699,749 - 28,699,749 Licenses and permits 1,598,804 - 1,598,804 Intergovernmental 15,483,316 24,821,469 40,304,785 Charges for services 10,450,542 8,155,762 18,606,304 Fines and forfeits 2,931,761 393,967 3,325,728 Interest and rents 47,105 41,411 88,516 Contributions 11,811,388 10,000 11,821,388 Other revenues 210,861 293,995 504,856 Total revenues 107,585,783 34,736,232 142,322,015 Expenditures Current expenditures: General government 23,846,234 2,550,282 26,396,516 Public safety 63,794,594 6,602,641 70,397,235 Public works 6,002,823 - 6,002,823 Highways and streets - 8,494,233 8,494,233 Recreation and culture 7,457,892 6,301 7,464,193 Other functions 2,063,394 13,611,609 15,675,003 Debt service: Principal 1,533,905 1,676,315 3,210,220 Interest 1,127,919 942,633 2,070,552 Issuance costs - 48,804 48,804 Capital outlay - 9,956,103 9,956,103 Total expenditures 105,826,761 43,888,921 149,715,682 Revenue over(under)expenditures 1,759,022 (9,152,689) (7,393,667) Other financing sources(uses) Transfers in 584,149 9,017,946 9,602,095 Transfers out (4,465,189) (5,770,720) (10,235,909) Proceeds on sale of capital assets 1,210,046 - 1,210,046 Issuance of long-term debt - 2,470,000 2,470,000 Payment to refunded bond escrow agent - (2,456,207) (2,456,207) Total other financing sources(uses) (2,670,994) 3,261,019 590,025 Net change in fund balances (911,972) (5,891,670) (6,803,642) Fund balances,beginning of year,as restated 6,242,459 20,847,640 27,090,099 Fund balances,end of year $ 5,330,487 $ 14,955,970 $ 20,286,457 The accompanying notes are an integral part of the financial statements. -26- City of Lansing Reconciliation of the Statement of Revenues,Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Year Ended June 30,2011 Net change in fund balances-total governmental funds $ (6,803,642) 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. Capital assets purchased/constructed 6,044,729 Depreciation expense (13,422,293) Loss on disposal of capital assets (693,706) 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. Change in deferred ambulance fees receivable 347,560 Change in deferred nuisance fees receivable (101,659) Change in deferred loans receivable 53,076 Change in long-term interest receivable 69,250 Change in deferred special assessments receivable 21,078 Change in deferred taxes and tax settlement receivables 140,137 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 assets of the internal service funds is reported with governmental activities. Net operating income from governmental activities in internal service funds 1,150,055 Interest revenue from governmental internal service funds 5,622 Gain on sale of capital assets from governmental internal service funds 108,601 Interest expense from governmental internal service funds (103,510) 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 assets. Repayment of debt principal is an expenditure in the funds,but the repayment reduces long-tern liabilities in the statement of net assets. Issuance of long-term debt (2,470,000) Principal payments on long-term liabilities 3,210,220 Payments to refunded bond escrow agent 2,456,207 Bond issuance costs 48,804 Certain expenditures are reported in governmental funds that reduce long-term liabilities for purposes of the statement of net assets. Change in estimated liability for workers'compensation (1,337,773) Some expenses reported in the statement of activites do not require the use of current financial resources and therefore are not reported as expenditures in the funds. Change in accrued interest payable on long-term liabilities 48,012 Amortization of debt-related costs 9,515 Change in net other postemployment benefit obligation (5,675,344) Change in net pension asset 441 Change in the accrual for compensated absences 71,831 Change in the accrual for tax settlement agreement (260,805) Change in the accrual for general liability claims 400,000 Change in net assets of governmental activities $ (16,683,594) The accompanying notes are an integral part of the financial statements. -27- City of Lansing Statement of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual General Fund For the Year Ended June 30, 2011 Budget Variance with Original Final Actual Final Budget Revenues Property taxes $ 35,824,072 $ 37,124,072 $ 36,352,257 $ (771,815) Income taxes 29,700,000 29,700,000 28,699,749 (1,000,251) Licenses and permits 1,592,240 1,592,240 1,598,804 6,564 Intergovernmental 15,114,127 15,464,127 15,483,316 19,189 Charges for services 10,439,661 10,789,661 10,450,542 (339,119) Fines and forfeits 3,764,100 2,864,100 2,931,761 67,661 Interest and rents 553,300 153,300 47,105 (106,195) Contributions 12,037,800 12,040,902 11,811,388 (229,514) Other revenues 181,500 181,500 210,861 29,361 Total revenues 109,206,800 109,909,902 107,585,783 (2,324,119) Expenditures General government: Attorney's office 1,268,920 1,206,220 1,244,943 (38,723) City clerk 819,812 879,562 877,169 2,393 Council 601,683 609,683 566,389 43,294 Courts 5,065,427 5,148,227 5,000,114 148,113 Internal audit 145,710 148,540 142,341 6,199 Finance 9,698,704 9,587,224 9,530,543 56,681 Library rental 160,000 160,000 154,598 5,402 LEPFA support 1,087,467 1,087,467 1,087,467 - Human resources 1,687,770 1,741,470 1,365,927 375,543 Mayor 705,042 718,642 708,009 10,633 Office of community media 187,406 241,306 202,032 39,274 Planning/neighborhood development 3,112,383 3,098,383 2,966,702 131,681 Budgetary savings from attrition (1,500,000) - - - Total general government 23,040,324 24,626,724 23,846,234 780,490 Public safety: Police 33,112,100 34,022,789 33,649,167 373,622 Fire 28,996,301 30,293,779 30,145,427 148,352 Total public safety 62,108,401 64,316,568 63,794,594 521,974 Public works: Environmental 6,044,068 5,995,868 5,828,945 166,923 Sidewalks and alleys 187,930 187,930 173,878 14,052 Total public works 6,231,998 6,183,798 6,002,823 180,975 Parks and recreation 7,704,146 7,505,846 7,457,892 47,954 Other functions: Human relations/community services 664,770 695,670 672,559 23,111 Human services/community support 1,483,400 1,568,916 1,390,835 178,081 Total other functions 2,148,170 2,264,586 2,063,394 201,192 Continued... -28- City of Lansing Statement of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual(Concluded) General Fund For the Year Ended June 30, 2011 Budget Variance with Original Final Actual Final Budget Expenditures(concluded) Debt service: Principal $ 2,014,537 $ 2,014,537 $ 1,533,905 $ 480,632 Interest 695,723 695,723 1,127,919 (432,196) Total debt service 2,710,260 2,710,260 2,661,824 48,436 Total expenditures 103,943,299 107,607,782 105,826,761 1,781,021 Revenue over(under)expenditures 5,263,501 2,302,120 1,759,022 (543,098) Other financing sources(uses) Transfers in 1,209,200 648,000 584,149 (63,851) Transfers out (6,482,701) (5,417,787) (4,465,189) 952,598 Proceeds on sale of capital assets 10,000 1,235,000 1,210,046 (24,954) Total other financing sources(uses) (5,263,501) (3,534,787) (2,670,994) 863,793 Net change in fund balance - (1,232,667) (911,972) 320,695 Fund balance,beginning of year,as restated 6,242,459 6,242,459 6,242,459 - Fund balance,end of year $ 6,242,459 $ 5,009,792 $ 5,330,487 $ 320,695 The accompanying notes are an integral part of the financial statements. -29- CITY OF LANSING -30- 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,beginning on the pages listed below: Enterprise funds,page 126. Internal service funds,page 136. -31- City of Lansing Statement of Fund Net Assets Proprietary Funds June 30,2011 Governmental Business-type Activities-Enterprise Funds Activities- Sewage Municipal Other Disposal Parking Enterprise Internal System System Funds Totals Service Funds Assets Current assets: Cash and cash equivalents $ - $ 371,307 $ 14,420 $ 385,727 $ Equity in pooled cash 7,113,195 4,306,190 1,242,956 12,662,341 3,554,007 Receivables: Accounts,net 4,266,821 1,099,031 571,541 5,937,393 2,747,146 Accrued interest - 109,858 - 109,858 - Lease receivable,current 517,323 1,676,706 2,194,029 Loans receivable - 437,059 - 437,059 - Inventories 85,529 - 94,203 179,732 830,241 Prepaids - - - - 759,373 Due from other funds 18,595,344 5,043,571 23,638,915 - Advances to other funds - 243,379 243,379 Restricted assets: Accounts receivable - 173,213 173,213 - Total current assets 30,578,212 13,460,314 1,923,120 45,961,646 7,890,767 Noncurrent assets: Restricted assets: Cash and cash equivalents 12,705,152 1,278,553 - 13,983,705 3,118,494 Lease receivable 11,570,684 12,734,972 24,305,656 - Bond issue costs,net 444,639 453,133 - 897,772 57,378 Capital assets not being depreciated 41,440,109 12,786,107 523,653 54,749,869 55,297 Capital assets being depreciated,net 323,986,640 25,620,244 3,289,638 352,896,522 7,330,296 Total non-current assets 390,147,224 52,873,009 3,813,291 446,833,524 10,561,465 Total assets 420,725,436 66,333,323 5,736,411 492,795,170 18,452,232 Liabilities Current liabilities: Accounts payable 2,998,254 103,237 69,759 3,171,250 972,194 Deposits payable - 25,531 - 25,531 - Accrued interest payable 1,076,616 172,296 7,825 1,256,737 31,707 Accrued payroll 94,378 40,609 24,997 159,984 815,120 Retainage payable - 200 - 200 - Claims incurred but not reported - - - - 1,402,760 Due to other funds 5,459,025 - 190,000 5,649,025 1,699,756 Advances from other funds - 80,531 - 80,531 - Due to other governments 125,089 - - 125,089 Unearned revenues - - 124,863 124,863 - Current portion of: Bonds and notes payable 12,690,000 4,737,738 80,000 17,507,738 150,000 Compensated absences 25,135 37,356 - 62,491 79,423 Total current liabilities 22,468,497 5,197,498 497,444 28,163,439 5,150,960 Noncurrent liabilities: Bonds and notes payable,net of current portion 172,887,496 39,237,485 473,464 212,598,445 3,778,552 Compensated absences,net of current portion 377,962 123,311 124,507 625,780 626,988 Total non-current liabilities 173,265,458 39,360,796 597,971 213,224,225 4,405,540 Total liabilities 195,733,955 44,558,294 1,095,415 241,387,664 9,556,500 Net assets Invested in capital assets,net of related debt 191,937,260 8,952,664 3,259,827 204,149,751 3,457,041 Restricted for debt retirement 11,628,536 - - 11,628,536 3,118,494 Restricted for capital projects - 1,451,766 - 1,451,766 - Unrestricted 21,425,685 11,370,599 1,381,169 34,177,453 2,320,197 Total net assets $ 224,991,481 $ 21,775,029 $ 4,640,996 $ 251,407,506 $ 8,895,732 The accompanying notes are an integral part of the financial statements. -32- City of Lansing Statement of Revenues,Expenses and Changes in Fund Net Assets Proprietary Funds For the Year Ended June 30,2011 Governmental Business-type Activities-Enterprise Funds Activities- Sewage Municipal Other Disposal Parking Enterprise Internal System System Funds Totals Service Funds Operating revenues Charges for services $ 29,205,945 $ 7,539,179 $ 4,725,493 $ 41,470,617 $ 63,935,240 Intergovernmental - - - - 1,416,366 Total operating revenues 29,205,945 7,539,179 4,725,493 41,470,617 65,351,606 Operating expenses Personal services 5,807,275 2,599,162 3,256,842 11,663,279 5,381,800 Purchase of goods and services 6,808,825 1,863,889 2,499,453 11,172,167 57,288,091 Depreciation 8,681,296 2,051,339 137,940 10,870,575 1,531,660 Total operating expenses 21,297,396 6,514,390 5,894,235 33,706,021 64,201,551 Operating income(loss) 7,908,549 1,024,789 (1,168,742) 7,764,596 1,150,055 Nonoperating revenues(expenses) Intergovernmental - 3,000,000 - 3,000,000 - Interest revenue 659,703 29,264 916 689,883 5,622 Gain on sale of capital assets 6,163 7,055 7,948 21,166 108,601 Interest expense and fees (5,147,345) (3,382,108) (33,301) (8,562,754) (103,510) Other revenue - 1,456,708 - 1,456,708 - Total nonoperating revenues(expenses) (4,481,479) 1,110,919 (24,437) (3,394,997) 10,713 Income(loss)before contributions and transfers 3,427,070 2,135,708 (1,193,179) 4,369,599 1,160,768 Capital contributions-ARRA 1,439,044 - - 1,439,044 - Transfers in - 950,640 950,640 Transfers out (300,000) - (16,826) (316,826) - Change in net assets 4,566,114 2,135,708 (259,365) 6,442,457 1,160,768 Net assets,beginning of year 220,425,367 19,639,321 4,900,361 244,965,049 7,734,964 Net assets,end of year $ 224,991,481 $ 21,775,029 $ 4,640,996 $ 251,407,506 $ 8,895,732 The accompanying notes are an integral part of the financial statements. -33- City of Lansing Statement of Cash Flows Proprietary Funds For the Year Ended June 30,2011 Governmental Business-type Activities-Enterprise Funds Activities- Sewage Municipal Other Disposal Parking Enterprise Internal System System Funds Totals Service Funds Cash flows from operating activities Cash received from customers $ 31,592,912 $ 14,550,891 $ 4,750,015 $ 50,893,818 $ - Cash received from interfund services - - - - 64,907,744 Cash payments for goods and services (6,988,865) (3,112,135) (2,591,847) (12,692,847) (56,867,782) Cash payments to employees (5,810,525) (2,626,391) (3,271,048) (11,707,964) (5,361,890) Net cash provided by(used for) operating activities 18,793,522 8,812,365 (1,112,880) 26,493,007 2,678,072 Cash flows from noncapital financing activities Transfers in - - 950,640 950,640 - Transfers out (300,000) (16,826) (316,826) Net cash provided by(used for) noncapital financing activities (300,000) - 933,814 633,814 Cash flows from capital and related financing activities Proceeds from sale of capital assets 6,163 7,055 7,948 21,166 108,601 Acquisition and construction of capital assets (16,382,227) (1,284,712) - (17,666,939) (2,242,787) Capital grants received 1,439,044 - 1,439,044 Cash received for finance charges - 1,456,708 1,456,708 Principal paid on revenue and general obligation bonds (12,520,000) (4,490,000) (75,000) (17,085,000) (145,000) Interest paid on revenue and general obligation bonds (5,036,794) (2,053,697) (32,760) (7,123,251) (133,351) Proceeds from issuance of long-term debt 14,566,536 14,566,536 3,200,000 Cash paid for bond issuance costs (45,522) (45,522) (55,280) Amount paid to refunding bond escrow agent (2,700,927) - (2,700,927) Payments received on capital lease 1,328,171 1,650,708 2,978,879 - Net cash provided by(used for) capital and related financing activities (19,345,556) (4,713,938) (99,812) (24,159,306) 732,183 Cash flows from investing activities Interest and dividends received 659,703 29,264 916 689,883 5,622 Net increase(decrease)in cash and cash equivalents (192,331) 4,127,691 (277,962) 3,657,398 3,415,877 Cash and cash equivalents,beginning of year 20,010,678 1,828,359 1,535,338 23,374,375 3,256,624 Cash and cash equivalents,end of year $ 19,818,347 $ 5,956,050 $ 1,257,376 $ 27,031,773 $ 6,672,501 Reconciliation to statement of net assets Cash and cash equivalents $ - $ 371,307 $ 14,420 $ 385,727 $ 3,554,007 Equity in pooled cash 7,113,195 4,306,190 1,242,956 12,662,341 3,118,494 Restricted cash and cash equivalents 12,705,152 1,278,553 - 13,983,705 - $ 19,818,347 $ 5,956,050 $ 1,257,376 $ 27,031,773 $ 6,672,501 Continued... -34- City of Lansing Statement of Cash Flows(Concluded) Proprietary Funds For the Year Ended June 30,2011 Governmental Business-type Activities-Enterprise Funds Activities- Sewage Municipal Other Disposal Parking Enterprise Internal System System Funds Totals Service Funds Reconciliation of operating income(loss)to net cash provided by(used for)operating activities Operating income(loss) $ 7,908,549 $ 1,024,789 $ (1,168,742) $ 7,764,596 $ 1,150,055 Adjustments to reconcile operating income(loss)to net cash provided by(used for)operating activities Depreciation expense 8,681,296 2,051,339 137,940 10,870,575 1,531,660 Change in: Accounts receivable (787,285) (960,299) 24,522 (1,723,062) (2,073,862) Accrued interest receivable 2,189 12,583 - 14,772 Inventories - - 12,536 12,536 (5,348) Prepaids - - - 18,247 Due from other funds (736,888) 7,959,428 7,222,540 1,630,000 Advances from other funds - 28,075 28,075 - Accounts payable 489,951 (69,253) (9,984) 410,714 (4,871) Deposits payable - (19,284) (19,284) - Accrued interest payable (10,579) 10,692 (1,013) (900) 15,568 Accrued payroll (3,250) (27,229) (14,206) (44,685) (652,364) Claims incurred but not reported - - (724,646) Due to other funds 3,172,063 (190,000) 2,982,063 Interfund payable - (1,222,104) (1,222,104) - Due to other governments - 1,699,756 Unearned revenues - - 6,497 6,497 - Compensated absences 77,476 23,628 89,570 190,674 93,877 Total adjustments 10,884,973 7,787,576 55,862 18,728,411 1,528,017 Net cash provided by(used for)operating activities $ 18,793,522 $ 8,812,365 $ (1,112,880) $ 26,493,007 $ 2,678,072 Non-cash transactions During the year ended June 30,2011,the Michigan Economic Development Corporation converted$3,000,000 of a loan payable to the muncipal parking system fund to a grant and added imputed interest from the inception of the loan to the date the$3,000,000 was forgiven to the remaining principal balance. Of the total amount,$2,605,791 was applied toward principal and the remainder was applied toward interest expense,per the terms of the agreement. The accompanying notes are an integral part of the financial statements. -35- CITY OF LANSING -36- 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 post-employment 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,beginning on page 140. -37- City of Lansing Statement of Fiduciary Net Assets Fiduciary Funds June 30, 2011 Pension and Other Postemployment Trust Agency Funds Funds Assets Cash and cash equivalents $ 11,063,886 $ - Equity in pooled cash - 72,681 Investments: Money market funds 4,388,031 Government obligations 77,510,733 - Corporate bonds 83,569,767 - Common stocks 210,501,377 - Mutual funds 90,556,092 - Contribution receivable 3,364 - Dividends and interest receivable 631,213 - Total assets 478,224,463 $ 72,681 Liabilities Accounts payable 4,391,383 $ - Undistributed receipts - 72,681 Total liabilities 4,391,383 $ 72,681 Net assets held in trust for Pension benefits 427,355,384 Other postemployment benefits 46,477,696 Total net assets $ 473,833,080 The accompanying notes are an integral part of the financial statements. -38- City of Lansing Statement of Changes in Fiduciary Net Assets Pension and Other Postemployment Benefit Trust Funds For the Year Ended June 30, 2011 Additions Investment income: Net appreciation in fair value of investments $ 69,584,793 Interest income 10,896,465 Dividend income 2,384,445 Less investment expenses (489,734) Net investment income 82,375,969 Contributions: Employer 35,173,231 Plan members 4,449,280 Total contributions 39,622,511 Total additions 121,998,480 Deductions Participant benefits 63,534,335 Administrative expense 1,441,047 Total deductions 64,975,382 Net change in net assets held in trust 57,023,098 Net assets held in trust for pension and other postemployment benefits Beginning of year 416,809,982 End of year $ 473,833,080 The accompanying notes are an integral part of the financial statements. -39- CITY OF LANSING -40- COMPONENT UNITS FINANCIAL STATEMENTS -41- CITY OF LANSING -42- 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 four discretely presented component units: Brownfield Redevelopment Authority Tax Increment Finance Authority Lansing Entertainment and Public Facilities Authority Smart Zone Complete financial statements for each of the individual component units, excluding Smart Zone, may be obtained from the entity's administrative offices. Separately-issued financial statements are not prepared for the Smart Zone. -43- City of Lansing Combining Statement of Net Assets Component Units June 30,2011 Lansing Tax Entertainment Brownfield Increment &Public Redevelopment Finance Facilities Smart Authority Authority Authority Zone Totals Assets Cash and cash equivalents $ 946,887 $ 405,081 $ 297,490 $ - $ 1,649,458 Receivables,net 548,601 - 660,911 - 1,209,512 Due from primary government 267,841 1,369,992 - 2,612 1,640,445 Inventories,prepaids and other assets 20,378 163,608 87,304 - 271,290 Restricted cash and cash equivalents - 1,709,708 333,837 - 2,043,545 Capital assets being depreciated,net - - 111,992 - 111,992 Total assets 1,783,707 3,648,389 1,491,534 2,612 6,926,242 Liabilities Accounts payable and accrued liabilities 898,387 - 562,551 - 1,460,938 Accrued interest payable 6,423 14,444,368 - - 14,450,791 Unearned revenues - - 360,178 - 360,178 Long-term debt: Due within one year 405,000 1,612,968 5,361 - 2,023,329 Due in more than one year 852,059 21,935,230 5,683 - 22,792,972 Total liabilities 2,161,869 37,992,566 933,773 - 41,088,208 Net assets Invested in capital assets,net of related debt - - 100,948 - 100,948 Unrestricted(deficit) (378,162) (34,344,177) 456,813 2,612 (34,262,914) Total net assets(deficit) $ (378,162) $ (34,344,177) $ 557,761 $ 2,612 $ (34,161,966) The accompanying notes are an integral part of the financial statements. -44- City of Lansing Combining Statement of Activities Component Units For the Year Ended June 30, 2011 Lansing Tax Entertainment Brownfield Increment &Public Redevelopment Finance Facilities Smart Authority Authority Authority Zone Totals Expenses Brownfield redevelopment $ 1,035,573 $ - $ - $ - $ 1,035,573 Community development - 4,534,643 - - 4,534,643 Recreation and culture - - 5,950,812 - 5,950,812 Total expenses 1,035,573 4,534,643 5,950,812 - 11,521,028 Program revenues Charges for services - - 4,781,914 - 4,781,914 Operating grants and contributions 188,777 - 1,087,467 - 1,276,244 Total program revenues 188,777 - 5,869,381 - 6,058,158 Net program expense (846,796) (4,534,643) (81,431) - (5,462,870) General revenues Property taxes 1,177,400 5,006,521 - - 6,183,921 Unrestricted investment earnings 302 8,660 262 - 9,224 Total general revenues 1,177,702 5,015,181 262 - 6,193,145 Change in net assets 330,906 480,538 (81,169) - 730,275 Net assets(deficit),beginning of year (709,068) (34,824,715) 638,930 2,612 (34,892,241) Net assets(deficit),end of year $ (378,162) $ (34,344,177) $ 557,761 $ 2,612 $ (34,161,966) The accompanying notes are an integral part of the financial statements. -45- CITY OF LANSING -46- NOTES to the FINANCIAL STATEMENTS -47- City of Lansing, Michigan Index Notes to Financial Statements Page 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity.................................................................................................... 49 B. Basis of Presentation............................................................................................. 51 C. Measurement Focus/Basis of Accounting ............................................................ 53 D. Assets,Liabilities and Equity............................................................................... 54 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary Information.......................................................................................... 57 B. Deficit Fund Balance/Net Assets.......................................................................... 58 3. DETAILED NOTES ON ALL FUNDS A. Deposits and Investments..................................................................................... 59 B. Deposits, Investments and Securities Lending—Pension and Other Postemployment Benefit Trust Funds................................................................... 61 C. Receivables........................................................................................................... 65 D. Capital Assets ....................................................................................................... 66 E. Payables................................................................................................................ 68 F. Interfund Receivables, Payables and Transfers.................................................... 68 G. Long-term Debt..................................................................................................... 70 H. Fund Balances—Governmental Funds................................................................. 74 I. Net Assets Invested in Capital Assets,Net of Related Debt................................. 75 J. Segment Information—Enterprise Funds............................................................. 75 4. OTHER INFORMATION A. Risk Management................................................................................................. 75 B. Property Taxes...................................................................................................... 76 C. Contingent Liabilities .......................................................................................... 77 D. Pension Plans........................................................................................................ 77 E. Other Postemployment Benefits........................................................................... 84 F. Restatement........................................................................................................... 88 -48- CITY OF LANSING, MICHIGAN Notes to Financial Statements NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1-A. Reporting Entity 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: 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. (1) Blended Component Units: 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: (a) Building Authority (the "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 and Golf enterprise funds, and the 1998 Building Authority Debt Service Fund. (2) 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 four discretely presented component units, the Brownfield Redevelopment Authority, the Tax Increment Financing Authority, the Lansing Entertainment and Public Facilities Authority, and the Smart Zone, each with a fiscal June 30 year-end. The discretely presented component units are as follows: -49- CITY OF LANSING, MICHIGAN Notes to Financial Statements (a) Brownfield Redevelopment Authority: The Brownfield Redevelopment Authority 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 Brownfield Redevelopment Authority 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. Tax increment financing permits the Brownfield Redevelopment Authority 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 Brownfield Redevelopment Authority include collections of property tax revenues on project areas for the Rite Aid Pharmacy and the former Motor Wheel Site Plant. (b) Tax Increment Finance Authority ("TIFA"): The 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. (c) Lansing Entertainment and Public Facilities Authority ("LEPFA"): LEPFA was established under the charter of the City of Lansing 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. 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. -50- CITY OF LANSING, MICHIGAN Notes to Financial Statements (d) Lansing Regional SmartZone ("Smart Zone"): The Smart Zone was established by the City of Lansing and the City of East Lansing under the authority contained in Act 281, Public Act of Michigan of 1986 ("Act 281"). Act 281 authorizes the Cities to create a multi jurisdictional local development finance authority. The Smart Zone shall be known and exercise its powers under title of the Local Development Finance Authority of the Cities of Lansing and East Lansing. The Smart Zone is fiscally dependent on the City of Lansing; the City approves the annual budget and is responsible for managing the Smart Zone. The Smart Zone was created in order to eliminate the conditions of unemployment, underemployment and joblessness, and to promote economic growth in the City. The Smart Zone's Board of Commissioners consists of seven members, three of which are appointed by the City of Lansing, three are appointed by the City of East Lansing, and one is appointed by the Ingham County Board of Commissioners. Component Unit Financial Statements: Complete financial statements for the individual component units may be obtained from each entity's administrative offices. Separate financial statements are not prepared for the Smart Zone. City of Lansing Building Authority 8th Floor 124 West Michigan Avenue Lansing, Michigan 48933 Brownfield Redevelopment Authority 401 S. Washington Square, Suite 100 Lansing, Michigan 48933 Tax Increment Finance Authority 401 S. Washington Square, Suite 100 Lansing, Michigan 48933 Lansing Entertainment and Public Facility Authority 333 East Michigan Avenue Lansing, Michigan 48933 1-B. Basis of Presentation Government-wide Financial Statements. The statements of net assets and activities display information about the primary government (the City) and its component units. These statements include the financial activities of the overall government, except for fiduciary activities. Eliminations have been made to minimize the double-counting of internal activities. These statements distinguish between the City's governmental and business-type activities. Governmental activities generally are financed through taxes, intergovernmental revenues and other nonexchange transactions. Business-type activities are financed in whole or in part by fees charged to external parties. -51- CITY OF LANSING, MICHIGAN Notes to Financial Statements The statement of activities presents a comparison between direct expenses and program revenues for the different business-type activities of the City and for each function of the City's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expense allocations that have been made in the funds have been reversed for the statement of activities. Program revenues include (a) fees, fines and charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. Fund Financial Statements. The fund financial statements provide information about the City's funds, including its fiduciary funds and blended component unit. Separate statements for each fund category—governmental,proprietary and fiduciary— are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. The City reports the following major governmental fund: General fund. This fund is the City's primary operating fund. It accounts and reports all financial resources not accounted for and reported in another fund. The City reports the following major enterprise 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. Additionally, the City reports the following fund types: Special revenue funds. These funds 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. Debt service funds. These funds account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest on long-term general obligation debt of governmental funds. Capital projects funds. These funds 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. Permanent funds. These 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. -52- CITY OF LANSING, MICHIGAN Notes to Financial Statements Enterprise funds. These 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. Internal service funds. These 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, and health care self-insurance services. Pension and other postemployment benefit trust funds. These 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. Agency funds. These funds account for resources held in a trustee or agent capacity for the 54-A District Court. 1-C. Measurement Focus/Basis of Accounting Government-wide, proprietary and fiduciary fund financial statements. The government-wide, proprietary and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, except for agency funds, which do not have a measurement focus. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each parry receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or ancillary activities. 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. -53- CITY OF LANSING, MICHIGAN Notes to Financial Statements Governmental fund financial statements. 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. 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. Property taxes, income taxes, franchise taxes, licenses and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, compensated absences, and claims and judgments, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases, if any, are reported as other financing sources. Under the terms of grant agreements, the City funds certain programs by a combination of specific cost-reimbursement grants, categorical block grants, and general revenues. Thus, when program expenses are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the City's policy to first apply cost-reimbursement grant resources to such programs, followed by categorical block grants, and then by general revenues, subject to satisfying any grant program matching provisions. 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. 1-D. Assets, Liabilities and Equity Deposits and Investments 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 assets/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. Restricted cash consists of amounts required to be maintained separately in accordance with bond covenants. State statutes authorize the government to deposit in the accounts of federally insured banks, credit unions, and savings and loan associations, and to invest in obligations of the U.S. Treasury, certain commercial paper, repurchase agreements, bankers' acceptances, and mutual funds composed of otherwise legal investments. -54- CITY OF LANSING, MICHIGAN Notes to Financial Statements Investments are stated 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. Mortgages are valued on the basis of future principal and interest payments, and are discounted at prevailing interest rates for similar instruments. Investments that do not have established market values are reported at estimated fair value. Cash deposits are reported at carrying amounts, which reasonably 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. Receivables and Payables All trade and delinquent property tax receivables are shown net of an allowance for uncollectibles, as applicable. Certain notes receivable in governmental funds consist of rehabilitation and redevelopment loans that are generally not expected or scheduled to be collected in the subsequent year. Certain restricted receivables in business type funds are for an external agreement related to the effective sale of land. 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. Inventories,Prepaid Items and Other Assets All inventories are valued at cost using the first-in/first-out method. Inventories of governmental funds are recorded as expenditures when consumed. 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. Costs related to the issuance of long-term debt are amortized over the term of the related debt on a straight-line basis. The net unamortized costs at year-end is reported as "bond issue costs" in proprietary fund financial statements and as a component of"other assets" in the government-wide financial statements. Capital Assets 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 that are used for governmental activities are only reported in the -55- CITY OF LANSING, MICHIGAN Notes to Financial Statements government-wide statements. Infrastructure ("public domain") assets, including roads, bridges, sanitary sewers, drains, curbs, and gutters are capitalized. With this measurement focus, all assets and liabilities (whether current or noncurrent) associated with the operations of these funds are included on the government-wide statement of net assets. All land and non-depreciable land improvements are capitalized, regardless of cost. Equipment and vehicles are capitalized when the cost of individual items exceed $5,000. The road and sewer networks are all capitalized regardless of cost. Buildings are capitalized over $100,000, and the recreational facilities' thresholds range from$25,000 to $50,000. Capital assets of the primary government are depreciated using the straight-line method over the following estimated useful lives: Assets Years Buildings 20-50 Improvements 8-50 Equipment 3-15 Sanitary sewers 50 Infrastructure 10-75 Compensated Absences It is the government'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 percent 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. Lonz-term Obli,-ations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. 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. -56- CITY OF LANSING, MICHIGAN Notes to Financial Statements Fund Equity 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 currently has no assigned fund balance, as the City Council has not yet given the authority for the making of such assignments. Unassigned fund balance is the residual classification for the general fund. When the government incurs an expenditure for purposes for which various fund balance classifications can be used, it is the government's policy to use restricted fund balance first, then committed fund balance, assigned fund balance, and finally unassigned fund balance. NOTE 2—STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY 2-A. Budgetary Information The City follows these procedures in establishing the budgetary data reflected in the financial statements: ■ 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. The operating budget includes proposed expenditures and the means of financing them. ■ A public hearing on the proposed use of funds is held by the Mayor, and a public hearing on the annual appropriations as proposed by the City Council is held no later than one week prior to adoption of the annual appropriation measure. ■ Not later than the third Monday in May, the Council adopts a budget for the ensuing fiscal year, makes an appropriation of the money needed therefore, and sets the property tax rate necessary to support the appropriations measure. ■ 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 except for the state and federal programs special revenue fund which is adopted on a project basis. The legal level of budgetary control is the mandatory expenditure accounts level. The mandatory accounts are personal services, supplies and operating expense, capital outlay, debt service, transfers and contingency. Transfers of appropriations between the mandatory accounts require the approval of the City Council. However, the Mayor may authorize budget transfers between mandatory accounts in a department, but the additional amount may not exceed fifteen (15%) of the Council's appropriation being added to, or five thousand dollars ($5,000),whichever is less. -57- CITY OF LANSING, MICHIGAN Notes to Financial Statements Budget-to-actual schedules that demonstrate compliance at the legal level of budgetary control are not included herein as it would be impractical due to the high level of detail that would be needed. Such schedules are included in the City's separately issued Budget Report. Copies of the report may be obtained from the Finance Department, 124 West Michigan Avenue, Lansing, Michigan 48933. ■ The City formally adopts operating budgets for the general fund and all special revenue funds. ■ 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. ■ Appropriations lapse at year-end for all annual budgets. Appropriations are automatically carried forward for project-type budgets. 2-B. Deficit Fund Balance/Net Assets Governmental activities reported a deficit in unrestricted net assets in the amount of$18,799,588 at June 30, 2011. Total net assets amounted to a positive $176,508,091. The community development block grant program special revenue fund reported a deficit unassigned fund balance of $200,000. Total fund balance (which included $200,000 classified as nonspendable related to a long-term advance), was $0. The special assessments capital projects fund reported a deficit fund balance of$171,285. 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. The fringe benefits internal service fund has a deficit net asset balance of$473,392. This deficit will be eliminated in future periods through adjustments to the internal charges to other funds. The Brownfield Redevelopment Authority reported a deficit in unrestricted net assets in the amount of$378,162 and the Tax Increment Finance Authority reported a deficit in unrestricted net assets in the amount of$34,344,177 at June 30, 2011. These deficits are a result of full-accrual accounting for long-term debt, without reflect a corresponding receivable for tax captures to be received in future periods (which cannot be accrued in accordance with generally accepted accounting principles). -58- CITY OF LANSING, MICHIGAN Notes to Financial Statements NOTE 3 —DETAILED NOTES ON ALL FUNDS 3-A. Deposits and Investments 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; see Note 3-13) as of June 30, 2011: Primary Component Government Units Totals Statement of Net Assets Cash and investments $ 39,305,303 $ 1,649,458 $ 40,954,761 Restricted cash and investments 17,102,199 2,043,545 19,145,744 Statement of Fiduciary Net Assets Pension and OPEB trust funds: Cash and cash equivalents 11,063,886 - 11,063,886 Investments 466,526,000 - 466,526,000 Agency fund- Equity in pooled cash 72,681 - 72,681 Total $534,070,069 $ 3,693,003 $ 537,763,072 Deposits and Investments Bank deposits: Checking/savings accounts $ 67,382,366 Investments in securities and mutual funds: Pooled investments 3,753,500 Pension and OPEB investments 466,526,000 Cash on hand 101,206 Total $ 537,763,072 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, $34,243,594 of the City's bank balance of $35,031,701 was exposed to custodial credit risk because it was uninsured and uncollateralized. -59- CITY OF LANSING, MICHIGAN Notes to Financial Statements 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. Following is a summary of the City's pooled investments as of June 30, 2011: Government agencies $ 1,999,577 Mutual funds 1,753,923 Total $ 3,753,500 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. 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: S&P AAA/AAAm $ 2,108,790 Unrated 1,644,710 Total $ 3,753,500 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. Maturity dates for investments held at year-end are summarized as follows: Due in 1 to 5 years $ 1,999,577 No maturity 1,753,923 Total $ 3,753,500 -60- CITY OF LANSING, MICHIGAN Notes to Financial Statements Concentration of Credit Risk. 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. 3-B. Deposits, Investments and Securities Lending — 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. Deposits - 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 assets are composed entirely of short-term investments in money market accounts. 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 OPEB investments as of June 30, 2011: Employees' Police Money Employees' And Fire Purchase Retiree Retirement Retirement Pension Health Care System System Plan VEBA Totals Investments at fair value,as determined by quoted market price: U.S.treasuries: Not on securities loan $ 3,402,353 $ 4,200,918 $ - $ - $ 7,603,271 On securities loan 4,127,042 4,621,824 - - 8,748,866 U.S. agencies: Not on securities loan 26,586,208 32,851,020 - - 59,437,228 On securities loan 802,391 430,203 - - 1,232,594 Foreign government bonds: Not on securities loan 155,519 333,255 - - 488,774 Domestic corporate securities: Not on securities loan 37,725,289 45,844,478 - - 83,569,767 -61- CITY OF LANSING, MICHIGAN Notes to Financial Statements Employees' Police Money Employees' And Fire Purchase Retiree Retirement Retirement Pension Health Care System System Plan VEBA Totals Domestic equities: Not on securities loan $ 66,470,521 $ 110,067,695 $ - $ - $ 176,538,216 On securities loan 14,133,448 17,707,102 - - 31,840,550 International equities: Not on securities loan 857,451 1,265,160 - - 2,122,611 Real estate investment funds 9,546,947 10,853,190 - - 20,400,137 Equity mutual funds 6,511,839 - - 6,511,839 International equity mutual funds 19,973,959 29,218,680 - 392,181 49,584,820 Domestic equity mutual funds - - 1,801,304 6,402,241 8,203,545 Domestic debt securities mutual funds - - - 5,855,751 5,855,751 Money market funds 2,092,328 2,295,703 - - 4,388,031 Total investments $ 185,873,456 $ 266,201,067 $ 1,801,304 $ 12,650,173 $ 466,526,000 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 OPEB investments were rated by Standard& Poor's as follows: Employees' Police Money Employees' and Fire Purchase Retiree Retirement Retirement Pension Health Care System System Plan VEBA Totals AAA $ 3,293,179 $ 4,003,380 $ - $ - $ 7,296,559 Not rated 40,697,516 48,962,102 - - 89,659,618 Assets not subject to credit risk 141,882,761 213,235,585 1,801,304 12,650,173 369,569,823 $ 185,873,456 $ 266,201,067 $ 1,801,304 $ 12,650,173 $ 466,526,000 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-parry 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. -62- CITY OF LANSING, MICHIGAN Notes to Financial Statements Short-term investments in money market funds are not subject to custodial credit risk. Concentration of Credit Risk. At June 30, 2011, the pension and OPEB investment portfolio was concentrated as follows: Police Employees' and Fire Retirement Retirement Investment Type Issuer System System Corporate bonds Western Asset Funds,Inc. 20.3% 17.1% Common stock Northern Trust Bank,N.A. 17.3% 19.1% U.S. agencies Federal National Mortgage Association 7.0% 5.6% U.S.treasuries Government of the United States 5.6% 4.4% U.S. agencies Federal Home Loan Mortgage Corporation 5.6% 5.4% The City's pension and OPEB investment policies require diversification of fixed income securities; however, they do not specify percentages of dollar amounts by industry or issuer. 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 OPEB trusts' exposure to foreign currency risk is as follows: Police Employees' and Fire Retiree Investment Retirement Retirement Health Care (currency in U.S.dollar) System System VEBA Total International equities $ 857,451 $ 1,265,160 $ - $ 2,122,611 Foreign government bonds 155,519 333,255 - 488,774 International equity mutual funds 19,973,959 29,218,680 392,181 49,584,820 Total $ 20,986,929 $ 30,817,095 $ 392,181 $52,196,205 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, 2011, maturities of the City's pension and OPEB trust debt securities were as follows: -63- CITY OF LANSING, MICHIGAN Notes to Financial Statements Investment Maturities(Fair Value) Less than More than 1 year 1-5 years 6-10 years 10 years Total Employees'Retirement System U.S.treasuries $ - $ 2,371,592 $ 2,896,163 $ 2,261,640 $ 7,529,395 U.S.agencies 15,741 3,304,567 9,731,335 14,336,956 27,388,599 International government bonds - 155,519 - - 155,519 Domestic corporate securities 37,725,289 - - - 37,725,289 Total $ 37,741,030 $ 5,831,678 $ 12,627,498 $ 16,598,596 $ 72,798,802 Police and Fire Retirement System U.S.treasuries $ - $ 2,160,222 $ 3,495,012 $ 3,167,508 $ 8,822,742 U.S.agencies 33,768 4,244,682 13,763,946 15,238,827 33,281,223 International government bonds - 333,255 - - 333,255 Domestic corporate securities 45,632,352 212,126 - - 45,844,478 Total $ 45,666,120 $ 6,950,285 $ 17,258,958 $ 18,406,335 $ 88,281,698 Securities Lending. Under contracts approved by the City, the pension and OPEB 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 OPEB funds' custodial banks manage the securities lending programs and receive cash as collateral. The collateral securities cannot be pledged or sold by the City unless the borrower defaults. Collateral cash is initially pledged at 100 percent of the fair value of the securities lent, and may not fall below 95 percent 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. 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 amounts the City owes the borrowers exceed the amounts the borrowers owe the City. At June 30, 2011, the fair value of securities on loan by the Employees' Retirement System and the Police and Fire Retirement System were $19,062,882 and $22,758,391, respectively, for which the Plans' received cash collateral of $19,355,677 and $23,155,846, respectively. The contract with the pension and OPEB 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. -64- CITY OF LANSING, MICHIGAN Notes to Financial Statements 3-C. Receivables Receivables are comprised of the following: Business- Governmental type Activities Activities Accounts receivable $ 21,700,940 $ 6,255,522 Taxes receivable 323,633 - Special assessments receivable 806,829 - Loans receivable 1,438,076 437,059 Accrued interest receivable 1,940,117 109,858 Due from other governments 12,763,018 - Lease receivable - 26,499,685 Allowance for uncollectible accounts (3,241,939) (318,129) $ 35,730,674 $ 32,983,995 Amount not expected to be collected within one year $ 3,843,523 $ 24,305,656 Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. All governmental activities defer revenue recognition in connection with resources that have been received, but not earned. At the end of the current fiscal year, the various components of deferred revenue reported in governmental funds were as follows: Unavailable Unearned Total Governmental funds Ambulance fees receivable $ 1,682,163 $ - $ 1,682,163 Nuisance fees receivable 752,520 - 752,520 Loans receivable 1,238,076 - 1,238,076 Interest on loans receivable 1,940,117 - 1,940,117 Special assessments receivable 718,406 - 718,406 Tax settlement receivable 130,002 - 130,002 Payment of lieu of taxes receivable 10,135 - 10,135 Grant funds received in advance - 1,240,867 1,240,867 Total $6,471,419 $ 11240,867 $ 7,712,286 -65- CITY OF LANSING, MICHIGAN Notes to Financial Statements 3-D. Capital Assets Capital assets activity for the year ended June 30, 2011, was as follows: Primary government Beginning Ending Balance Increases Decreases Balance Governmental activities Capital assets,not being depreciated: Land $ 24,747,436 $ 41,200 $ (12,530) $ 24,776,106 Construction in progress 9,051,450 1,513,551 (1,809,148) 8,755,853 Total capital assets not being depreciated 33,798,886 1,554,751 (1,821,678) 33,531,959 Capital assets,being depreciated: Land improvements 12,010,065 1,437,886 - 13,447,951 Equipment and vehicles 43,322,866 2,398,509 (1,657,603) 44,063,772 Buildings 113,380,696 473,308 (130,800) 113,723,204 Infrastructure 303,708,612 4,232,210 (5,503,760) 302,437,062 Total capital assets being depreciated 472,422,239 8,541,913 (7,292,163) 473,671,989 Less accumulated depreciation for: Land improvements (5,914,232) (455,012) - (6,369,244) Equipment and vehicles (35,785,865) (2,118,842) 1,657,603 (36,247,104) Buildings (57,558,990) (3,222,944) - (60,781,934) Infrastructure (183,360,872) (9,157,155) 4,953,384 (187,564,643) Total accumulated depreciation (282,619,959) (14,953,953) 6,610,987 (290,962,925) Total capital assets,being depreciated,net 189,802,280 (6,412,040) (681,176) 182,709,064 Governmental activities capital assets,net $ 223,601,166 $ (4,857,289) $ (2,502,854) $ 216,241,023 At June 30, 2011, the City's governmental activities had outstanding commitments through construction contracts of approximately $2,030,000. -66- CITY OF LANSING, MICHIGAN Notes to Financial Statements Beginning Ending Balance Increases Decreases Balance Business-type activities Capital assets,not being depreciated: Land $ 13,598,708 $ 131,800 $ - $ 13,730,508 Construction in progress 94,392,186 13,543,155 (66,915,980) 41,019,361 Total capital assets not being depreciated 107,990,894 13,674,955 (66,915,980) 54,749,869 Capital assets,being depreciated: Land improvements 23,389,871 205,201 - 23,595,072 Equipment and vehicles 5,778,279 - (120,769) 5,657,510 Buildings 196,576,877 4,217,556 - 200,794,433 Sewers 234,816,756 66,485,207 - 301,301,963 Total capital assets being depreciated 460,561,783 70,907,964 (120,769) 531,348,978 Less accumulated depreciation for: Land improvements (10,347,175) (564,497) - (10,911,672) Equipment and vehicles (4,928,672) (249,032) 120,769 (5,056,935) Buildings (96,160,458) (4,448,512) - (100,608,970) Sewers (56,266,345) (5,608,534) - (61,874,879) Total accumulated depreciation (167,702,650) (10,870,575) 120,769 (178,452,456) Total capital assets,being depreciated,net 292,859,133 60,037,389 - 352,896,522 Business-type activities capital assets,net $ 400,850,027 $ 73,712,344 $ (66,915,980) $ 407,6469391 At June 30, 2011, the City's governmental activities had outstanding commitments through construction contracts of approximately $14,400,000. Depreciation expense was charged to functions/programs of the primary government as follows: Governmental activities: General government $ 484,428 Public safety 600,219 Public works 9,171,654 Recreation and culture 1,550,538 Community development 1,615,454 Internal service funds 1,531,660 Total depreciation expense-governmental activities $ 14,953,953 Business-type activities: Sewage disposal system $ 8,681,296 Municipal parking system 2,051,339 Golf 98,336 Other 39,604 Total depreciation expense-business-type activities $ 10,870,575 -67- CITY OF LANSING, MICHIGAN Notes to Financial Statements 3-E. Payables Accounts payable and accrued liabilities are comprised of the following: Business- Governmental type Activities Activities Accounts payable $ 5,713,325 $ 3,171,450 Deposits payable 44,345 25,531 Accrued payroll 2,975,924 159,984 Contract retainage payable 1,458,156 - Due to other governments 2,139,793 125,089 Other 1,684,302 - $ 14,015,845 $ 3,482,054 3-F. Interfund Receivables, Payables and Transfers At June 30, 2011, amounts due to/due from other funds were as follows: Due From Sewage Municipal General Disposal Parking Fund System System Total Due to General fund $ - $ 12,113,588 $ 5,043,571 $ 17,139,159 Nonmajor governmental funds 932,969 4,592,000 - 5,542,969 Sewage disposal system 5,459,025 - - 5,459,025 Nonmajor enterprise funds - 190,000 - 190,000 Internal service funds - 1,699,756 - 1,699,756 $ 6,391,994 $ 18,595,344 $ 5,043,571 $ 30,030,909 The above balances generally resulted from a time lag between the dates that interf ind goods and services are provided or reimbursable expenditures occur, transactions are recorded in the accounting system, and payments between funds are made. -68- CITY OF LANSING, MICHIGAN Notes to Financial Statements At June 30, 2011, advances to/due from other funds were as follows: Advances To Advances From Other Funds Other Funds Nonmajor governmental funds $ 80,531 $ 243,379 Municipal Parking System 243,379 80,531 $ 323,910 $ 323,910 For the year ended June 30, 2011, interfund transfers consisted of the following: Transfers In Nonmajor Nonmajor General Governmental Enterprise Fund Funds Funds Total Transfers Out: General Fund $ - $ 4,088,319 $ 376,870 $ 4,465,189 Nonmajor governmental funds 284,149 4,912,801 573,770 5,770,720 Sewage Disposal System 300,000 - - 300,000 Nonmajor enterprise funds - 16,826 - 16,826 $ 584,149 $ 9,017,946 $ 950,640 $ 10,552,735 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. -69- CITY OF LANSING, MICHIGAN Notes to Financial Statements 3-G. Long-term Debt 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: Interest Original Rate Amount Amount General obligation bonds Governmental activities 2006 Lansing Center Limited Tax Bonds 3.50%-4.30% $ 4,000,000 $ 3,020,000 2005 Building Authority Refunding Bonds 3.50%-5.00% 1,470,000 1,005,000 2007 Michigan Transportation Fund Limited Tax Bonds 3.625%-5.00% 1,137,600 739,200 2007 Michigan Transportation Fund Limited Tax Bonds 3.625%-5.00% 3,602,400 2,340,800 2007 Fire Station Refunding Bonds 3.625%-5.00% 1,780,000 1,570,000 2008 Michigan Transportation Fund Limited Tax Bonds 3.00%-4.00% 3,500,000 3,145,000 2009 Capital Improvement Bonds-Limited Tax General Obligation 3.15-6.85% 10,197,000 10,197,000 2010 Recovery Zone Economic Development Bonds 3.40-7.25% 3,200,000 3,200,000 2010 Refunding Bonds-Limited Tax General Obligation 2.60%-2.65% 2,470,000 2,470,000 $ 31,357,000 $ 27,687,000 Business-type activities 1990 Building Authority Municipal Parking System Limited Tax Bond 0.00% $ 64,635,000 $ 10,840,000 2003 Building Authority A Municipal Parking System Limited Tax Bond 3.00%-4.35% 10,340,000 1,370,000 2003 Building Authority B Municipal Parking System Taxable Bond 3.85%-6.25% 8,660,000 7,345,000 2005 Building Authority Refunding Bonds 3.50-5.00% 15,975,000 11,485,000 2007 Building Authority Refunding Bonds 3.625%-5.00% 7,965,000 7,865,000 1996 Building Authority Golf Course Limited Tax Bond 3.80%-5.70% 1,300,000 555,000 1992 Limited Tax Sewer Bond-5005-01 2.50% 7,128,800 1,255,000 1993 Limited Tax Sewer Bond-5005-02 2.50% 8,150,050 1,825,000 1994 Limited Tax Sewer Bond-5005-03 2.50% 3,234,722 895,000 1994 Limited Tax Sewer Bond-5005-04 2.00% 3,727,138 762,138 1994 Limited Tax Sewer Bond-5005-05 2.25% 515,969 70,000 1994 Limited Tax Sewer Bond-5005-06 2.25% 7,595,611 1,635,000 1996 Limited Tax Sewer Bond-5005-07 2.25% 3,365,073 1,145,073 1996 Limited Tax Sewer Bond-5005-08 2.25% 3,995,000 1,605,000 1997 Limited Tax Sewer Bond-5005-09 2.25% 4,746,780 2,111,780 1998 Limited Tax Sewer Bond-5005-10 2.25% 10,539,950 5,239,950 1999 Limited Tax Sewer Bond-5005-11 2.50% 10,120,000 5,185,000 2000 Limited Tax Sewer Bond-5005-12 2.50% 9,447,830 5,232,830 2001 Limited Tax Sewer Bond-5005-13 2.50% 10,573,046 6,398,046 2002 Limited Tax Sewer Bond-5005-14 2.50% 12,381,131 8,561,131 2003 Limited Tax Sewer Bond-5005-15 2.50% 10,259,826 7,585,688 2004 Limited Tax Sewer Bond-5005-16 2.13% 3,070,277 2,972,649 2005 Limited Tax Sewer Bond-5005-17 2.13% 4,739,023 6,128,778 2005 Limited Tax Sewer Bond-5005-18 1.63% 13,389,371 10,834,371 2006 Limited Tax Sewer Bond-5005-19 1.63% 18,216,346 15,761,346 2007 Limited Tax Sewer Bond-5005-20 1.63% 24,244,726 22,009,726 2008 Limited Tax Sewer Bond-5005-21 2.50% 27,071,906 25,936,906 2009 Limited Tax Sewer Bond-5005-22 2.50% 1,609,661 9,964,531 2009 Capital Improvement Bonds 4.10%-7.05% 9,803,000 9,803,000 2009 Building Authority Refunding Bonds 6.014%-6.5840/c 8,161,691 8,161,691 $ 324,961,927 $ 200 539,634 -70- CITY OF LANSING, MICHIGAN Notes to Financial Statements During fiscal year 2011, the City advance refunded $2,400,000 of 2001 unlimited tax, general obligation bonds to provide resources 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 $2,400,000 of refunded debt. As a result, the bonds are considered defeased and the liability has been removed from the statement of net assets. The defeased bonds were then called prior to year- end. The refunding resulted in a savings of$196,859 and an economic gain of$146,993. During fiscal year 2011, the City advance refunded $2,640,000 of 1998 sewage disposal revenue bonds to provide resources 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 $2,640,000 of refunded debt. As a result, the bonds are considered defeased and the liability has been removed from the statement of net assets. The defeased bonds were then called prior to year-end. The refunding resulted in a savings of$153,398 and an economic gain of$88,524. At year end, defeased bonds outstanding consisted of. $7,485,000 of the 2003 Building Authority Municipal Parking System Limited Tax Bonds, scheduled to be paid by the escrow agent on June 1, 2013; $5,720,000 of 1990 Building Authority Bonds, scheduled to be paid by the escrow agent in installments on June 1 of years 2012 through 2015; $10,415,000 of 1990 Tax Increment Finance Authority Bonds, scheduled to be paid by the escrow agent in installments on May 1 of years 2016 through 2020. 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: Interest Original Rate Amount Amount Revenue bonds Business-type activities 2003 Sewer Revenue&Refunding Bond 2.50% $ 39,880,000 $ 29,880,000 2010 Sewage Disposal System Refunding Bond 1.76% 2,685,000 2,685,000 $ 42,565,000 $ 32,565,000 -71- CITY OF LANSING, MICHIGAN Notes to Financial Statements 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: Interest Original Rate Amount Amount Installment purchase agreements Governmental activities 2004 Lease Purchase Agreement-Roof and Fire Suppression 2.77% $ 570,000 $ 78,297 2005 Lease Purchase Agreement-LEPFA Extractor and Wall 4.51% 392,046 60,306 2005 Lease Purchase Agreement-LEPFA Carpet 4.51% 126,418 57,727 2005 Lease Purchase Agreement-LEPFA Equipment 4.24% 81,500 41,001 2001 Lease Purchase Agreement-O&M Facility 5.35% 1,925,000 760,000 2006 Lease Purchase Agreement-Ambulances 4.23% 474,000 102,813 2006 Lease Purchase Agreement-Energy Efficiencies 4.20% 6,217,227 5,886,017 2006 Lease Purchase Agreement-Oldsmobile Park 6.86% 2,000,000 1,500,000 2007 Lease Purchase Agreement-Oldsmobile Park 5.72% 1,000,000 750,000 2007 Lease Purchase Agreement-Phone System 4.22% 518,000 328,532 $ 13,304,191 $ 9,564,693 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: Interest Original Rate Amount Amount Loans payable Governmental activities 2004 Michigan Department of Transportation Loan 3.00% $ 1,266,000 $ 673,581 2006 State Infrastructure Bank Loan 3.00% 500,000 105,999 $ 1,766,000 $ 779,580 Business-type activities 2003 MEDC Loan 3.93% $ 4,180,000 $ 1,574,209 -72- CITY OF LANSING, MICHIGAN Notes to Financial Statements Changes in long-term debt. Long-term liability activity for the year ended June 30, 2011, was as follows: Beginning Ending Due Within Balance Additions Reductions Refunded Balance One Year Governmental activities General obligation bonds $ 26,152,000 $ 5,670,000 $ 1,735,000 $ 2,400,000 $ 27,687,000 $ 1,960,000 Installment purchase agreements 10,925,689 - 1,360,996 - 9,564,693 1,371,077 Loans payable 1,038,804 - 259,224 - 779,580 267,003 Subtotal 38,116,493 5,670,000 3,355,220 2,400,000 38,031,273 3,598,080 Compensated absences 10,904,958 10,927,004 10,904,958 - 10,927,004 1,237,510 Accrued workers compensation 5,523,504 2,656,055 1,318,282 - 6,861,277 1,318,282 Accrued general liability claims 400,000 - 400,000 - - - Accrued tax settlement - 260,805 - - 260,805 52,161 Add(deduct)deferred amounts: For issuance discounts (81,363) (32,000) (6,210) - (107,153) (5,178) For issuance premiums 258,520 34,143 - 224,377 34,143 On refunding (62,256) (56,207) (10,359) (108,104) (13,666) $ 55,059,856 $ 19,425,657 $ 15,996,034 $ 2,400,000 $ 56,089,479 $ 6,221,332 Business-type activities General obligation bonds $ 202,818,098 $ 11,881,536 $ 14,160,000 $ - $ 200,539,634 $ 14,150,000 Revenue bonds 35,445,000 2,685,000 2,925,000 2,640,000 32,565,000 3,040,000 Loans payable 4,180,000 - 2,605,791 - 1,574,209 317,738 Subtotal 242,443,098 14,566,536 19,690,791 2,640,000 234,678,843 17,507,738 Compensated absences 497,597 688,271 497,597 - 688,271 62,491 Add(deduct)deferred amounts: For issuance discounts (4,985,872) - (1,129,357) - (3,856,515) - For issuance premiums 1,027,931 66,057 - 961,874 On refunding (1,944,201) (60,316) (326,498) (1,678,019) - $ 237,038,553 $ 15,194,491 $ 18,7989590 $ 2,640,000 $ 23097949454 $ 179570,229 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 Ended Governmental Activities Business-Type Activities June 30 Principal Interest Total Principal Interest Total 2012 $ 3,598,080 $ 1,645,034 $ 5,243,114 $ 17,507,738 $ 6,521,476 $ 24,029,214 2013 3,500,379 1,497,263 4,997,642 18,135,400 6,097,875 24,233,275 2014 3,635,354 1,343,629 4,978,983 18,451,746 5,669,536 24,121,282 2015 3,030,852 1,181,105 4,211,957 16,286,855 5,219,862 21,506,717 2016 2,976,841 1,066,776 4,043,617 13,865,193 4,828,275 18,693,468 2017-2021 12,246,043 3,654,270 15,900,313 68,924,989 18,374,086 87,299,075 2022-2026 5,568,723 1,610,548 7,179,271 58,744,572 8,725,170 67,469,742 2027-2031 3,475,001 397,210 3,872,211 20,522,349 1,866,125 22,388,474 2032-2036 - - - 2,240,001 208,733 2,448,734 $ 38,031,273 $ 12,395,835 $ 50,427,108 $ 23496789843 $ 57,511,138 $ 292,189,981 -73- CITY OF LANSING, MICHIGAN Notes to Financial Statements 3-11. Fund Balances—Governmental Funds The City adopted the provisions of GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, in the current year. GASB 54 establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government 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: Nonmajor General Governmental Fund Funds Totals Nonspendable: Inventories $ 123,910 $ 1,059,599 $ 1,183,509 Prepaids 47,676 - 47,676 Long-term advances - 80,531 80,531 Long-term loans receivable - 200,000 200,000 Corpus of permanent fund - 1,666,377 1,666,377 Total nonspendable 171,586 3,006,507 3,178,093 Restricted for: Donations 41,129 - 41,129 Major and local streets - 4,306,485 4,306,485 Drug law and narcotics enforcement - 636,105 636,105 Various State and Federal grants - 3,616 3,616 Shopping District events and maintenance - 49,167 49,167 Debt service - 46,028 46,028 Capital improvements (unexpended bond proceeds) - 2,370,607 2,370,607 Total restricted 41,129 7,412,008 7,453,137 Committed for: Ordinance 178,081 - 178,081 City parks - 467,581 467,581 Capital improvements - 4,441,159 4,441,159 Total committed 178,081 4,908,740 5,086,821 Unassigned(deficit) 4,939,691 (371,285) 4,568,406 Total fund balances—governmental funds $ 5,330,487 $ 14,955,970 $20,286,457 -74- CITY OF LANSING, MICHIGAN Notes to Financial Statements 3-I. Net Assets Invested in Capital Assets,Net of Related Debt The composition of net assets invested in capital assets, net of related debt as of June 30, 2011, was as follows: Governmental Business-type Component Activities Activities Units Capital assets: Capital assets not being depreciated $ 33,531,959 $ 54,749,869 $ - Capital assets being depreciated, net 182,709,064 352,896,522 111,992 Total capital assets 216,241,023 407,646,391 111,992 Related debt: General obligation bonds 27,687,000 200,539,634 820,000 Revenue bonds - 32,565,000 14,666,079 Installment purchase agreements 9,564,693 - 14,422,720 Loans payable 779,580 1,574,209 437,059 Unamortized bond discounts (107,153) (3,856,515) (120,774) Unamortized bond premiums 224,377 961,874 - Deferred loss on bond refunding (108,104) (1,678,019) (5,408,783) Amounts under leases receivable - (26,499,685) - Amounts under leases receivable - (109,858) - Amounts related to non-capital debt - - (24,805,257) Unexpended bond proceeds (2,370,607) - - 35,669,786 203,496,640 11,044 Net assets invested in capital assets, net of related debt $ 180,571,237 $ 204,149,751 $ 100,948 3-J. Segment Information—Enterprise Funds 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. NOTE 4—OTHER INFORMATION 4-A. Risk Management The City of Lansing is exposed to various risks of loss related to property loss, torts, errors and omissions and employee injuries. 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. -75- CITY OF LANSING, MICHIGAN Notes to Financial Statements The City is uninsured for acts of nature and environmental clean-up costs. 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 amounts 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: Fiscal Year Ended June 30, 2011 2010 Estimated liability,beginning of year $ 2,127,406 $ 5,148,683 Estimated claims incurred, including changes in estimates 18,550,824 22,353,526 Claims payments (19,275,470) (22,089,536) Estimated liability, end of year S 1,402,760 S 2.127.406 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 Assets. 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: Fiscal Year Ended June 30, 2011 2010 Estimated liability,beginning of year $ 5,523,504 $ 5,148,683 Estimated claims incurred, including changes in estimates 2,656,055 1,436,072 Claims payments (1,318,282) (1,061,251) Estimated liability, end of year 6,861,277 5.523.504 4-13. 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). -76- CITY OF LANSING, MICHIGAN Notes to Financial Statements The City is permitted by charter and state law to levy taxes up to $19.198 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, 2011 was $15.44 per $1,000 of taxable value. 4-C. Contingent Liabilities 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. 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. 4-D. Pension Plans Employees' Retirement System The City sponsors and administers the Employees' Retirement System (the "Plan"), a single- employer, defined-benefit pension plan. It is accounted for as a separate pension trust fund. No stand-alone financial reports are issued. It covers general full-time employees of the City of Lansing 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 pension plan. The payroll for employees covered by the plan for the year ended December 31, 2009, was $30,601,855; the City's total payroll was $61,044,500. Administration of the plan is funded through the general fund. As of December 31, 2009, employee membership data was as follows: Retirees and beneficiaries currently receiving benefits and terminated employees entitled to benefits but not yet receiving them $6_1 Active members: Vested 292 Nonvested 278 570 -77- CITY OF LANSING, MICHIGAN Notes to Financial Statements Approximately 13% of the active membership may retire with a combination of age plus service equal to 65. All other 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. For all members, annual regular retirement allowances are determined by multiplying total credited service times 1.6% to 2.8% times final average compensation. Final average compensation is the member's highest wages for two consecutive years during the last 10 years. 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 have the option of deferring retirement benefits until age 58 or withdrawing their contribution, thereby forfeiting any future benefits. Active members contribute between 1.7% and 7.25% of wages as determined by individual labor agreements. Chapter 292 of the City of Lansing's Code of Ordinances establishes benefit provisions and requires that 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 funding policy provides for periodic employer contributions at actuarially determined rates that expressed as percentages of annual covered payroll, are designed to accumulate sufficient assets to pay benefits when due. The normal cost and amortization payment for the year ended June 30, 2011, was determined using an entry age actuarial funding method. Unfunded actuarial accrued liabilities are being amortized as a level percent of payroll over an open period of 30 years. Contributions are recognized when due pursuant to formal commitments, as well as statutory or contractual requirements. The fund is accounted for in essentially the same manner as the proprietary funds and uses the full accrual method of accounting. Plan valuation assets are equal to the reported market value of assets except that only 20% of the difference between the mark-to-market rate of return and the 8% actuarial rate of return is recognized each year. This five year smoothing method reduces the fluctuation in the City's computed contribution rate which might otherwise be caused by market value fluctuations. The entry-age actuarial cost method is used to determine plan liabilities. Significant actuarial assumptions used in determining the entry-age actuarial accrued liability include (a) a rate of return on investments of 8% per year compounded annually (b) projected salary increases of 4% attributable to inflation and 0% to 3.5% per year depending on age attributable to seniority/merit (c) assumption that benefits generally will not increase after retirement. During the year ended June 30, 2011, total contributions of$8,867,238 were made in accordance with actuarially determined requirements computed through an actuarial valuation performed as of December 31, 2009. The City contributed $7,297,083 (22.63% of projected valuation payroll), excluding contributions for health insurance; employees contributed $1,570,155 (4.33% of projected valuation payroll). The City's contribution consisted of (a) $3,327,702 normal cost (10.32% of projected valuation payroll) and (b) $3,969,381 amortization of the unfunded actuarial accrued liability (12.31% of projected valuation payroll). -78- CITY OF LANSING, MICHIGAN Notes to Financial Statements At December 31, 2009, the unfunded actuarial accrued liability was determined as follows: Actuarial accrued liability for: Active participants (292 vested and 278 non-vested) $ 65,089,689 Retired participants and beneficiaries currently receiving benefits (799 recipients) 176,133,432 Vested terminated participants not yet receiving benefits (62) 4,491,470 Member benefit reserve 16,583,768 Total actuarial accrued liability 262,298,359 Actuarial value of assets (smoothed market value) * 193,324,228 Unfunded actuarial accrued liability S 68,974,131 * Excluding reserve for health insurance For the fiscal year ending June 30, 2011, the annual required contribution ($7,297,083) equaled the actual City contribution, increasing the net pension asset to $10,178. Annual required contribution $ 7,297,083 Interest on net pension obligation (796) Adjustment to annual required contribution 565 Annual net pension cost 7,296,852 Contributions made (7,297,083) Change in net pension asset (231) Net pension asset,beginning of year (9,947) Net pension asset, end of year $ (10,178) The schedules of funding progress, presented as required supplementary information (RSI) following the notes to the financial statements, present multiyear trend information about whether the actuarial values of plan assets are increasing or decreasing over time relative to the AALs for benefits. Three-Year Trend Information (amounts in thousands) Annual Years Ended Pension Percentage Net Pension June 30, Cost (APQ Contributed Asset 2009 $ 6,048 107% $ 428 2010 6,462 94% 10 2011 7,297 100% 10 -79- CITY OF LANSING, MICHIGAN Notes to Financial Statements Police and Fire Retirement System The City sponsors and administers the Police and Fire Retirement System (the "Plan"), a single- employer defined-benefit pension plan. It is accounted for as a separate pension trust fund. No stand-alone financial reports are issued. It covers all police officers and firefighters who are full- time employees of the City. The City's payroll for employees covered by the plan for the year ended December 31, 2009, was $30,442,645, the City's total payroll was $61,044,500. Administration of the plan is funded through the general fund. As of December 31, 2009, employee membership data related to the plan was as follows: Retirees and beneficiaries currently receiving benefits and terminated employees entitled to benefits but not yet receiving them bm Active members: Vested 297 Nonvested 161 Members may retire at any age with 25 or more years of credited service, or age 55 with 10 or more years of credited service. Members are vested after completing 10 years of credited service. Members are required to retire at age 70. 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. 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. Fire members are required to contribute 7.58% of their annual wages to the plan. Police supervisors are required to contribute 9.52% and police non-supervisors, 8.50%. 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. In addition to the payments under this plan, the City made payments from the general fund to provide benefits for the beneficiaries of a prior pension plan. This prior plan was superseded by the present plan as of January 1, 1944. There were no payments made to beneficiaries under that plan. -80- CITY OF LANSING, MICHIGAN Notes to Financial Statements The City's funding policy provides for periodic employer contributions at actuarially determined rates that, expressed as percentages of annual covered payroll, are designed to accumulate sufficient assets to pay benefits when due. The normal cost and amortization payment for the year ended June 30, 2011, was determined using an entry age actuarial funding method. Unfunded actuarial accrued liabilities are being amortized as a level percent of payroll over an open period of 30 years. Plan valuation assets are equal to the reported market value of assets except that only 20% of the difference between the mark-to-market rate of return and the 8% actuarial rate of return is recognized each year. This five year smoothing method reduces the fluctuation in the City's computed contribution rate which might otherwise be caused by market value fluctuations. The entry-age actuarial cost method is used to determine plan liabilities. Significant actuarial assumptions used in determining the entry-age actuarial accrued liability include (a) a rate of return on investments of 8% per year compounded annually (b) projected salary increases of 4% attributable to inflation and .51 to 11.5% per year depending on age attributable to seniority/merit (c) assumption that benefits generally will increase $525 annually after retirement. During the year ended June 30, 2011, total contributions of$11,119,813 were made in accordance with actuarially determined requirements computed through an actuarial valuation performed as of December 31, 2009. The City contributed $8,240,688 (25.69% of projected valuation payroll), excluding contributions for health insurance; employees contributed $2,879,125 (8.20% of projected valuation payroll). The City's contribution consisted of (a) $4,962,376 normal cost (15.47% of projected valuation payroll) and (b) $3,278,312 amortization of the unfunded actuarial accrued liability(10.22% of projected valuation payroll). At December 31, 2009, the actuarial accrued liability in excess of assets was determined as follows: Active participants (297 vested and 161 non-vested) $ 120,691,304 Retired participants and beneficiaries currently receiving benefits (635 recipients) 214,535,784 Vested terminated participants not yet receiving benefits (15) 2,087,748 Total actuarial accrued liability 337,314,836 Actuarial value of assets (smoothed market value) * 280,341,913 Unfunded Actuarial accrued liability S 56,972,923 * Excluding reserve for health insurance For the fiscal year ending June 30, 2011, the annual required contribution ($8,240,688) equaled the actual City contribution, increasing the net pension asset to $9,231. Annual required contribution $ 8,240,688 Interest on net pension obligation (722) Adjustment to annual required contribution 512 Annual net pension cost 8,240,478 Contributions made (8,240,688) Change in net pension asset (210) Net pension asset,beginning of year (9,021) Net pension asset, end of year (9,231) -81- CITY OF LANSING, MICHIGAN Notes to Financial Statements Significant actuarial assumptions used to compute contribution requirements were the same as those used to compute the standardized measure of the actuarial accrual liability. The schedules of funding progress, presented as required supplementary information (RSI) following the notes to the financial statements, present multiyear trend information about whether the actuarial values of plan assets are increasing or decreasing over time relative to the AALs for benefits. Three-Year Trend Information (amounts in thousands) Annual Years Ended Pension Percentage Net Pension June 30, Cost (APQ Contributed Asset 2009 $ 6,094 106% $ 389 2010 7,170 95% 9 2011 8,240 100% 9 Employees' Money Purchase Pension Plan The City of Lansing sponsors and contributes to the Employees' Money Purchase Pension Plan (the "Plan"), which is a single-employer defined - contribution pension plan. Administration of the plan is funded by the general fund. A defined contribution pension plan provides pension benefits in return for services rendered, provides an individual account for each participant, and specifies how contributions to the individual's account are to be determined instead of specifying the amount of benefits the individual is to receive. Under a defined contribution pension plan, the benefits a participant will receive depend solely on the amount contributed to the participant's account and the returns earned on investments of those contributions. As established by Chapter 292.30 of the City of Lansing's Code of Ordinances, this plan includes all elected officials hired subsequent to September 30, 1990. As of June 30, 2011, there were 8 active members in this plan. Contributions made by employees vest immediately, and contributions made by the City vest after three years of full-time employment. When employees terminate employment, they are entitled to their contributions and the City's contributions if vesting requirements are satisfied. Employees may contribute up to 8% of their wages in 1% increments. The City contributes an amount equal to 6.0% of the employees' wages for retirement benefits. During the year, the City's required and actual contributions amounted to $17,633, which was approximately 6% of covered payroll of$298,155. There were no employee contributions. No pension provision changes occurred during the year that affected the required contributions to be made by the City. In addition, the plan does not issue stand-alone financial statements. -82- CITY OF LANSING, MICHIGAN Notes to Financial Statements Financial statements for individual pension and employee benefit plans: Pension Net Assets Employees' Employees' Police Police Employees' Retirement Retirement and Fire and Fire Money Retiree System System Retirement Retirement Purchase Health Care Pension OPEB System System OPEB Pension Plan VEBA Totals Assets Cash and cash equivalents $ 3,253,843 $ - $ 7,810,043 $ - $ $ $ 11,063,886 Investments: Money market funds 1,919,953 172,375 2,137,503 158,200 4,388,031 Government obligations 32,184,007 2,889,506 39,512,810 2,924,410 77,510,733 Corporate bonds 34,617,318 3,107,971 42,685,268 3,159,210 83,569,767 Common stocks 74,750,280 6,711,140 120,147,626 8,892,331 210,501,377 Mutual funds 27,088,848 2,432,058 43,373,558 3,210,151 1,801,304 12,650,173 90,556,092 Contribution receivable 2,401 - - - 963 - 3,364 Dividends and interest receivable 197,736 17,753 263,306 19,488 132,930 631,213 Total assets 174,014,386 15,330,803 255,930,114 18,363,790 1,802,267 12,783,103 478,224,463 Liabilities Accounts payable 2,642,401 1,748,982 4,391,383 Net assets held in trust for: Pension benefits 171,371,985 - 254,181,132 - 1,802,267 - 427,355,384 Other postemployment benefits 15,330,803 18,363,790 12,783,103 46,477,696 Total net assets $ 171,371,985 $ 15,330,803 $ 254,181,132 $ 18,363,790 $ 1,802,267 $ 12,783,103 $ 473,833,080 Changes in Pension Net Assets Additions Investment income: Net appreciation in fair value of investments $ 24,421,434 $ - $ 44,028,009 $ - $ - $ 1,135,350 $ 69,584,793 Interest income 6,289,336 1,234,183 2,263,208 838,906 270,832 - 10,896,465 Dividend income 608,477 - 1,023,274 - - 752,694 2,384,445 Less investment expenses (214,369) (269,161) (6,204) (489,734) Net investment income 31,104,878 1,234,183 47,045,330 838,906 264,628 1,888,044 82,375,969 Contributions: Employer 7,297,083 9,773,601 8,240,688 9,844,226 17,633 - 35,173,231 Plan members 1,570,155 2,879,125 4,449,280 Total contributions 8,867,238 9,773,601 11,119,813 9,844,226 17,633 39,622,511 Total additions 39,972,116 11,007,784 58,165,143 10,683,132 282,261 1,888,044 121,998,480 Deductions Participant benefits 19,962,124 9,773,601 23,859,622 9,844,226 94,762 - 63,534,335 Administrative expense 622,792 818,255 1,441,047 Total deductions 20,584,916 9,773,601 24,677,877 9,844,226 94,762 64,975,382 Net change in net assets held in trust 19,387,200 1,234,183 33,487,266 838,906 187,499 1,888,044 57,023,098 Net assets held in trust for pension benefits: Beginning of year 151,984,785 14,096,620 220,693,866 17,524,884 1,614,768 10,895,059 416,809,982 End ofyear $171,371,985 $15,330,803 $254,181,132 $ 18,363,790 $ 1,802,267 $12,783,103 $473,833,080 -83- CITY OF LANSING, MICHIGAN Notes to Financial Statements 4-E. Other Postemployment Benefit Plans Plan Descriptions. 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. 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 the respective pension plans. 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. Basis of Accounting. The Plans' financial statements are prepared using the accrual basis of accounting. Plan member contributions are recognized in the period in which the contributions are due. Employer contributions are recognized when due and the employer has made a formal commitment to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of the plans. 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. Voluntary Employees Beneficiary Association (VEBA) The City of Lansing Voluntary Employees Beneficiary Association (the "Plan") is a single- employer defined benefit post employment 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 made no contributions to the Plan. Employees' Retirement System 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. 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 $96.40 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. During the year, the City contributed $9,773,601 to the Plan, all which was to fund current retiree premiums. -84- CITY OF LANSING, MICHIGAN Notes to Financial Statements Membership of the Plan consisted of the following at December 31, 2009, the date of the most recent actuarial valuation: Retirees and beneficiaries receiving benefits 717 Terminated employees eligible to receive, but not yet receiving benefits 48 Active plan members 570 Total 1,335 Annual required contributions $ 8,866,588 Interest on net OPEB obligation(asset) (180,813) Adjustment to annual required contribution 133,243 Net OPEB cost(expense) 8,819,018 Contributions made (9,773,601) Change in net OPEB obligation(asset) (954,583) Net OPEB obligation(asset): Beginning of year (2,260,157) End of year S (3,214,740) The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net OPEB obligation for the current year and the two preceding years were as follows: Three-Year Trend Information Percentage Net Fiscal Net of Annual OPEB Year OPEB OPEB Cost Obligation Ended Cost Contributed (Asset) 06/30/2009 $ 9,021,963 120.3% $ (3,085,900) 06/30/2010 9,782,538 95.1% (2,260,157) 06/30/2011 8,819,018 110.8% (3,214,740) The schedule of employer contributions, presented as required supplementary information (RSI) following the notes to the financial statements, presents trend information about the amounts contributed to the plan by employers in comparison to the ARC, an amount that is actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost for each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. -85- CITY OF LANSING, MICHIGAN Notes to Financial Statements Funded Status and Funding Progress. As of December 31, 2009, the most recent actuarial valuation date, the Plan was 12.0 percent funded. The actuarial accrued liability for benefits was $203,399,633, and the actuarial value of assets was $24,363,831, resulting in an unfunded actuarial accrued liability(UAAL) of$179,035,802. The covered payroll (annual payroll of active employees covered by the Plan) was $30,601,855, and the ratio of the UAAL to the covered payroll was 585.0 percent. The Employees' Retirement System and VEBA were combined in the actuarial valuation. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short- term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the December 31, 2009 actuarial valuation, the entry age actuarial cost method was used. The actuarial assumptions included a 8.0 percent investment rate of return (net of administrative expenses), which is a blended rate of the expected long-term investment returns on plan assets and on the employer's own investments calculated based on the funded level of the plan at the valuation date, and an annual healthcare cost trend rate of 9.0 percent initially, reduced by decrements to an ultimate rate of 4.0 percent after ten years and a flat rate of 4.0 percent for Medicare Part B. Both rates included a 4.0 percent inflation assumption. The actuarial value of assets was determined using techniques that spread the effects of short-term volatility in the market value of investments over a five-year period. The UAAL is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at December 31, 2009, was thirty years. Police and Fire Retirement System 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 City provides the full cost of health benefits to retirees, payable to health care vendors, and also reimburses retirees eligible for Medicare benefits of$96.40 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. During the year, the City contributed$9,844,226 to the Plan, all which was to fund current retiree premiums. -86- CITY OF LANSING, MICHIGAN Notes to Financial Statements Membership of the Plan consisted of the following at December 31, 2009, the date of the most recent actuarial valuation: Retirees and beneficiaries receiving benefits 604 Terminated employees eligible to receive, but not yet receiving benefits 7 Active plan members 458 Total 1,069 Annual required contributions $ 16,201,842 Interest on net OPEB obligation(asset) 1,035,062 Adjustment to annual required contribution (762,751) Net OPEB cost(expense) 16,474,153 Contributions made (9,844,226) Change in net OPEB obligation(asset) 6,629,927 Net OPEB obligation(asset): Beginning of year 12,938,273 End of year $ 19,568,200 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net OPEB obligation for the current year and the two preceding years were as follows: Three-Year Trend Information Percentage Net Fiscal Net of Annual OPEB Year OPEB OPEB Cost Obligation Ended Cost Contributed (Asset) 06/30/2009 $ 12,258,018 78.9% $ 5,960,488 06/30/2010 16,563,477 57.9% 12,938,273 06/30/2011 16,474,153 59.8% 19,568,200 The schedule of employer contributions, presented as required supplementary information (RSI) following the notes to the financial statements, presents trend information about the amounts contributed to the plan by employers in comparison to the ARC, an amount that is actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost for each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. -87- CITY OF LANSING, MICHIGAN Notes to Financial Statements Funded Status and Funding Progress. As of December 31, 2009, the most recent actuarial valuation date, the Plan was 8.1 percent funded. The actuarial accrued liability for benefits was $214,899,358, and the actuarial value of assets was $17,477,208, resulting in an unfunded actuarial accrued liability (UAAL) of$197,422,150. The covered payroll (annual payroll of active employees covered by the Plan) was $30,442,645, and the ratio of the UAAL to the covered payroll was 648.5 percent. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short- term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the December 31, 2009 actuarial valuation, the entry age actuarial cost method was used. The actuarial assumptions included a 8.0 percent investment rate of return (net of administrative expenses), which is a blended rate of the expected long-term investment returns on plan assets and on the employer's own investments calculated based on the funded level of the plan at the valuation date, and an annual healthcare cost trend rate of 9.0 percent initially, reduced by decrements to an ultimate rate of 4.0 percent after ten years and a flat rate of 4.0 percent for Medicare Part B. Both rates included a 4.0 percent inflation assumption. The actuarial value of assets was determined using techniques that spread the effects of short-term volatility in the market value of investments over a five-year period. The UAAL is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at December 31, 2009, was thirty years. 4-F. Restatement Beginning fund balance of the general fund was increased by $5,750,666 in order to include the balances for the stadium special and budget stabilization special revenue funds of $22,607 and $5,728,059, respectively, previously reported as nonmajor governmental funds. This change is a result of implementation of GASB Statement No. 54 Fund Balance Reporting and Governmental Fund Type Definitions. While these funds will continue to be accounted for separately for internal purposes, the stadium and budget stabilization funds will no longer be separately presented for external financial reporting. -88- REQUIRED SUPPLEMENTARY INFORMATION -89- City of Lansing Employees' Retirement System Required Supplementary Information (amounts in thousands) Schedule of Funding Progress Actuarial Actuarial UAAL as a Actuarial Value of Accrued Underfunded Funded Covered % of Covered Valuation Assets Liability AAL(UAAL) Ratio Payroll Payroll Date (A) (B) (B-A) (A/B) (C) ((B-A)/C) 12/31/2004 $ 206,200 $ 231,389 $ 25,189 89.1% $ 32,383 77.8% 12/31/2005 207,881 245,242 37,361 84.8% 30,851 121.1% 12/31/2006 208,765 251,427 42,662 83.0% 31,944 133.6% 12/31/2007 208,572 254,356 45,784 82.0% 31,797 144.0% 12/31/2008 200,600 258,331 57,731 77.7% 29,688 194.5% 12/31/2009 193,324 262,298 68,974 73.7% 30,602 225.4% Schedule of Employer Contributions Annual Required Year Ended Contribution Percentage June 30 (ARC) Contributed 2006 $ 4,900 100.0% 2007 5,231 100.0% 2008 6,022 100.0% 2009 6,048 105.0% x 2010 6,472 93.4% x 2011 7,297 100.0% x The City contributed in excess of its fiscal year 2009 ARC. The City's fiscal year 2010 contribution was reduced by the dollar amount of the fiscal year 2009 overpayment -90- City of Lansing Police and Fire Retirement System Required Supplementary Information (amounts in thousands) Schedule of Funding Progress Actuarial Actuarial UAAL as a Actuarial Value of Accrued Underfunded Funded Covered % of Covered Valuation Assets Liability AAL(UAAL) Ratio Payroll Payroll Date (A) (B) (B-A) (AB) (C) ((B-A)/C) 12/31/2004 $ 275,807 $ 279,873 $ 4,066 98.5% $ 27,754 14.7% 12/31/2005 273,421 290,299 16,878 94.2% 27,855 60.6% 12/31/2006 278,839 308,193 29,354 90.5% 29,582 99.2% 12/31/2007 293,571 315,635 22,064 93.0% 29,600 74.5% 12/31/2008 287,394 326,673 39,279 88.0% 30,161 130.2% 12/31/2009 280,342 337,315 56,973 83.1% 30,443 187.1% Schedule of Employer Contributions Annual Required Year Ended Contribution Percentage June 30 (ARC) Contributed 2006 $ 4,659 100.0% 2007 5,386 100.0% 2008 6,521 100.0% 2009 6,094 106.0% x 2010 7,179 94.6% x 2011 8,241 100.0% x The City contributed in excess of its fiscal year 2009 ARC. The City's fiscal year 2010 contribution was reduced by the dollar amount of the fiscal year 2009 overpayment -91- City of Lansing Other Postemployment Benefit Plans Required Supplementary Information (amounts in thousands) Employees' Retirement System and VEBA- Schedule of Funding Progress Actuarial Actuarial UAAL as a Actuarial Value of Accrued Underfunded Funded Covered % of Covered Valuation Assets Liability AAL(UAAL) Ratio Payroll Payroll Date (A) (B) (B-A) (A/B) (C) ((B-A)/C) 12/31/2006 $ 14,337 $ 147,388 $ 133,051 9.7% $ 31,944 416.5% 12/31/2009 24,364 203,400 179,036 12.0% 30,602 585.0% Police and Fire Retirement System- Schedule of Funding Progress Actuarial Actuarial Underfunded UAAL as a Actuarial Value of Accrued (Overfunded) Funded Covered % of Covered Valuation Assets Liability AAL(UAAL) Ratio Payroll Payroll Date (A) (B) (B-A) (A/B) (C) ((B-A)/C) 12/31/2006 $ 13,064 $ 155,559 $ 142,495 8.4% $ 29,582 481.7% 12/31/2009 17,477 214,899 197,422 8.1% 30,443 648.5% Employees' Retirement System and VEBA- Schedule of Employer Contributions Annual Fiscal Required Percentage Year Contribution of ARC Ended (ARC) Contributed 06/30/2008 $ 9,027 113.9% 06/30/2009 8,902 101.4% 06/30/2010 10,290 95.1% 06/30/2011 8,867 110.2% Police and Fire Retirement System - Schedule of Employer Contributions Annual Fiscal Required Percentage Year Contribution of ARC Ended (ARC) Contributed 06/30/2008 $ 12,006 71.9% 06/30/2009 12,583 76.9% 06/30/2010 17,177 38.3% 06/30/2011 16,202 60.8% -92- COMBINING and INDIVIDUAL FUND STATEMENTS and SCHEDULES -93- City of Lansing Combining Balance Sheet-Nonmajor Governmental Funds June 30,2011 Special Debt Capital Revenue Service Projects Permanent Totals Assets Cash and cash equivalents $ 43,501 $ - $ 1,421,167 $ - $ 1,464,668 Equity in pooled cash 6,095,791 46,028 5,134,302 1,666,377 12,942,498 Investments - - 1,395,598 - 1,395,598 Accounts receivable,net 1,422,635 - 140,767 - 1,563,402 Special assessments receivable - - 806,631 - 806,631 Loans receivable 1,438,076 - - - 1,438,076 Accrued interest receivable 1,940,117 - - - 1,940,117 Advances to other funds - - 80,531 - 80,531 Due from other governments 6,699,467 - 1,070 - 6,700,537 Inventory 1,059,599 - - - 1,059,599 Total assets $ 18,699,186 $ 46,028 $ 8,980,066 $ 1,666,377 $ 29,391,657 Liabilities and fund balances Liabilities Accounts payable $ 2,324,156 $ - $ 364,300 $ - $ 2,688,456 Deposits payable 44,345 - - - 44,345 Accrued payroll 186,782 - - - 186,782 Due to other funds 4,610,000 - 932,969 - 5,542,969 Advances from other funds - - 243,379 - 243,379 Due to other governments 592,290 - - - 592,290 Deferred revenue 4,419,060 - 718,406 - 5,137,466 Total liabilities 12,176,633 - 2,259,054 - 14,435,687 Fund balances Nonspendable 1,259,599 - 80,531 1,666,377 3,006,507 Restricted 4,995,373 46,028 2,370,607 - 7,412,008 Committed 467,581 - 4,441,159 - 4,908,740 Unassigned(deficit) (200,000) - (171,285) - (371,285) Total fund balances 6,522,553 46,028 6,721,012 1,666,377 14,955,970 Total liabilities and fund balances $ 18,699,186 $ 46,028 $ 8,980,066 $ 1,666,377 $ 29,391,657 -94- City of Lansing Combining Statement of Revenues,Expenditures and Changes in Fund Balances-Nonmajor Governmental Funds For the Year Ended June 30,2011 Special Debt Capital Revenue Service Projects Permanent Totals Revenues Taxes and special assessments $ 395,403 $ 606,598 $ 17,627 $ - $ 1,019,628 Intergovernmental 24,821,469 - - - 24,821,469 Charges for services 7,292,233 - 863,529 - 8,155,762 Fines and forfeits 393,967 - - - 393,967 Interest 7,163 4,403 18,011 11,834 41,411 Contributions 10,000 - - - 10,000 Otherrevenues 293,995 - - - 293,995 Total revenues 33,214,230 611,001 899,167 11,834 34,736,232 Expenditures Current expenditures: General government 2,550,282 - - - 2,550,282 Public safety 6,602,641 - 6,602,641 Highways and streets 8,494,233 - - 8,494,233 Recreation and culture 6,301 - - 6,301 Other functions 13,611,609 - - - 13,611,609 Debt service: Principal 1,066,315 610,000 - - 1,676,315 Interest 719,937 222,696 - - 942,633 Issuance costs - 48,804 - - 48,804 Capital outlay 6,579,690 - 3,376,413 - 9,956,103 Total expenditures 39,631,008 881,500 3,376,413 - 43,888,921 Revenues over(under) expenditures (6,416,778) (270,499) (2,477,246) 11,834 (9,152,689) Other financing sources(uses) Transfers in 6,709,320 176,300 2,115,500 16,826 9,017,946 Transfers out (1,146,470) - (4,612,417) (11,833) (5,770,720) Issuance of long-term debt - 2,470,000 - - 2,470,000 Payment to refunded bond escrow agent - (2,456,207) - - (2,456,207) Total other financing sources(uses) 5,562,850 190,093 (2,496,917) 4,993 3,261,019 Net change in fund balances (853,928) (80,406) (4,974,163) 16,827 (5,891,670) Fund balances,beginning of year,as restated 7,376,481 126,434 11,695,175 1,649,550 20,847,640 Fund balances,end of year $ 6,522,553 $ 46,028 $ 6,721,012 $ 1,666,377 $ 14,955,970 -95- CITY OF LANSING -96- 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 Fund — This fund accounts for revenues set aside for drug law enforcement under the provisions of State of Michigan Public Act 135 of 1985, as amended. State and Federal Programs Fund—This fund accounts for all revenues received from miscellaneous grants and local contributions. These revenues are used for projects as detailed in individual grant applications. 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. Principal Shopping District 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. 911 Communications Center Fund — This fund accounts for the operations of the county-wide 911 communications center. Revenues received are from the County for actual expenditures incurred. 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. Tri-County Metro Fund—This fund accounts for the operations of the Tri-County Metro Narcotics Squad. -97- City of Lansing Combining Balance Sheet-Nonmajor Special Revenue Funds June 30, 2011 State and Major Local Drug Law Federal Streets Streets Enforcement Programs Assets Cash and cash equivalents $ - $ - $ 15,000 $ - Equity in pooled cash 3,351,464 270,699 288,472 242,401 Accounts receivable - - - 5,131 Loans receivable - - - 53,076 Accrued interest receivable - - - - Due from other governments 1,068,895 287,387 - 5,012,205 Inventory 1,059,599 - - - Total assets $ 5,479,958 $ 558,086 $ 303,472 $ 5,312,813 Liabilities and fund balances Liabilities Accounts payable $ 430,403 $ 211,047 $ 103,055 $ 1,314,245 Deposits payable - - - - Accrued payroll 510 - 7,231 21,009 Due to other funds - 30,000 - 2,680,000 Due to other governments - - - - Deferred revenue - - - 1,293,943 Total liabilities 430,913 241,047 110,286 5,309,197 Fund balances Nonspendable 1,059,599 - - - Restricted 3,989,446 317,039 193,186 3,616 Committed - - - - Unassigned(deficit) - - - - Total fund balances 5,049,045 317,039 193,186 3,616 Total liabilities and fund balances $ 5,479,958 $ 558,086 $ 303,472 $ 5,312,813 -98- Community Development Principal 911 Block Grant Shopping Communications Building Parks Tri-County Program District Center Department Department Metro Totals $ - $ 3,500 $ - $ - $ - $ 25,001 $ 43,501 44,943 60,480 193,466 25,044 467,581 1,151,241 6,095,791 - - 1,405,391 12,113 - - 1,422,635 11385,000 - - - - - 1,438,076 1,940,117 - - - - - 1,940,117 299,931 - - - - 31,049 6,699,467 - - - - - - 1,059,599 $ 3,669,991 $ 63,980 $ 1,598,857 $ 37,157 $ 467,581 $ 1,207,291 $ 18,699,186 $ 125,557 $ 9,892 $ 2,826 $ 1,530 $ - $ 125,601 $ 2,324,156 - - - - - 44,345 44,345 19,317 4,921 96,031 35,627 - 2,136 186,782 400,000 - 1,500,000 - - - 4,610,000 - - - - - 592,290 592,290 3,125,117 - - - - - 4,419,060 3,669,991 14,813 1,598,857 37,157 - 764,372 12,176,633 200,000 - - - - - 1,259,599 - 49,167 - - - 442,919 4,995,373 - - - 467,581 - 467,581 (200,000) - - - - - (200,000) - 49,167 - - 467,581 442,919 6,522,553 $ 3,669,991 $ 63,980 $ 1,598,857 $ 37,157 $ 467,581 $ 1,207,291 $ 18,699,186 -99- City of Lansing Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Special Revenue Funds For the Year Ended June 30, 2011 State and Major Local Drug Law Federal Streets Streets Enforcement Programs Revenues Taxes and special assessments $ - $ - $ - $ - Intergovernmental 7,081,325 1,781,173 - 13,440,593 Charges for services 249,301 511,643 - - Fines and forfeits - - 310,001 - Interest 2,469 1,065 759 743 Contributions - - - - Other 92,418 2,089 - - Total revenues 7,425,513 2,295,970 310,760 13,441,336 Expenditures Current expenditures: General government - - - - Public safety - - 555,311 - Highways and streets 4,699,493 3,794,740 - - Recreation and culture - - - - Other functions - - - 13,611,609 Debt service: Principal 374,715 691,600 - - Interest 191,792 528,145 - - Capital outlay 2,840,165 1,609,970 - - Total expenditures 8,106,165 6,624,455 555,311 13,611,609 Revenues under expenditures (680,652) (4,328,485) (244,551) (170,273) Other financing sources(uses) Transfers in 2,304,014 3,271,977 - 169,935 Transfers out (1,090,000) - (41,470) - Total other financing sources(uses) 1,214,014 3,271,977 (41,470) 169,935 Net change in fund balances 533,362 (1,056,508) (286,021) (338) Fund balances,beginning of year,as restated 4,515,683 1,373,547 479,207 3,954 Fund balances,end of year $ 5,049,045 $ 317,039 $ 193,186 $ 3,616 -100- Community Development Principal 911 Block Grant Shopping Communications Building Parks Tri-County Program District Center Department Department Metro Totals $ - $ 395,403 $ - $ - $ - $ - $ 395,403 2,072,088 - - - - 446,290 24,821,469 - 5,330 5,172,408 1,353,551 - - 7,292,233 - - - - 83,966 393,967 98 - - 524 1,505 7,163 - 10,000 - - - - 10,000 57,467 142,021 - - - - 293,995 2,129,555 552,852 5,172,408 1,353,551 524 531,761 33,214,230 - 596,945 - 1,953,337 - - 2,550,282 - 5,441,712 - - 605,618 6,602,641 - - - - 8,494,233 - 6,301 - 6,301 - - - - - - 13,611,609 - - - 1,066,315 - - - - - - 719,937 2,129,555 - - - - - 6,579,690 2,129,555 596,945 5,441,712 1,953,337 6,301 605,618 39,631,008 - (44,093) (269,304) (599,786) (5,777) (73,857) (6,416,778) 39,180 267,959 599,785 - 56,470 6,709,320 - - - - (15,000) (1,146,470) 39,180 267,959 599,785 - 41,470 5,562,850 - (4,913) (1,345) (1) (5,777) (32,387) (853,928) 54,080 1,345 1 473,358 475,306 7,376,481 $ - $ 49,167 $ - $ - $ 467,581 $ 442,919 $ 6,522,553 -101- City of Lansing Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual -Nonmajor Special Revenue Funds For the Year Ended June 30, 2011 Major Streets Final Variance with Budget Actual Budget Revenues Taxes and special assessments $ - $ - $ - Intergovernmental 7,050,900 7,081,325 (30,425) Charges for services 514,431 249,301 265,130 Fines and forfeits - - - Interest 25,000 2,469 22,531 Contributions - - - Other 87,067 92,418 (5,351) Total revenues 7,677,398 7,425,513 251,885 Expenditures Current expenditures: General government - - - Public safety - - - Highways and streets 6,288,621 4,699,493 1,589,128 Recreation and culture - - - Other functions - - - Debt service: Principal 374,715 374,715 - Interest 192,153 191,792 361 Capital outlay 6,537,688 2,840,165 3,697,523 Total expenditures 13,393,178 8,106,165 5,287,013 Revenues over(under)expenditures (5,715,779) (680,652) (5,035,127) Other financing sources(uses) Transfers in 3,345,854 2,304,014 1,041,840 Transfers out (1,090,000) (1,090,000) - Total other financing sources(uses) 2,255,854 1,214,014 1,041,840 Net change in fund balances (3,459,925) 533,362 (3,993,287) Fund balances,beginning of year,as restated 4,515,683 4,515,683 - Fund balances(deficit),end of year $ 1,055,758 $ 5,049,045 $ (3,993,287) -102- Local Streets Drug Law Enforcement Final Variance with Final Variance with Budget Actual Budget Budget Actual Budget 2,123,201 1,781,173 342,028 - - - 712,837 511,643 201,194 - - - - - - 900,000 310,001 589,999 22,000 1,065 20,935 4,000 759 3,241 - 2,089 (2,089) - - - 2,858,038 2,295,970 562,068 904,000 310,760 593,240 - - - 601,658 555,311 46,347 4,138,411 3,794,740 343,671 - - - 691,600 691,600 - - - - 528,560 528,145 415 - - - 2,258,895 1,609,970 648,925 - - - 7,617,466 6,624,455 993,011 601,658 555,311 46,347 (4,759,428) (4,328,485) (430,943) 302,342 (244,551) 546,893 3,995,478 3,271,977 723,501 - - - - - - (72,712) (41,470) (31,242) 3,995,478 3,271,977 723,501 (72,712) (41,470) (31,242) (763,950) (1,056,508) 292,558 229,630 (286,021) 515,651 1,373,547 1,373,547 - 479,207 479,207 - $ 609,597 $ 317,039 $ 292,558 $ 708,837 $ 193,186 $ 515,651 -103- City of Lansing Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual -Nonmajor Special Revenue Funds (Continued) For the Year Ended June 30, 2011 State and Federal Programs Final Variance with Budget Actual Budget Revenues Taxes and special assessments $ - $ - $ - Intergovernmental 33,566,645 13,440,593 20,126,052 Charges for services 8,250 - 8,250 Fines and forfeits - - - Interest 5,592 743 4,849 Contributions - - - Other - - - Total revenues 33,580,486 13,441,336 20,139,150 Expenditures Current expenditures: General government - - - Public safety - - - Highways and streets - - - Recreation and culture - - - Other functions 30,983,287 13,611,609 17,371,678 Debt service: Principal - - - Interest - - - Capital outlay - - - Total expenditures 30,983,287 13,611,609 17,371,678 Revenues over(under)expenditures 2,597,200 (170,273) 2,767,473 Other financing sources(uses) Transfers in 293,870 169,935 123,935 Transfers out - - - Total other financing sources(uses) 293,870 169,935 123,935 Net change in fund balances 2,891,070 (338) 2,891,408 Fund balances,beginning of year,as restated 3,954 3,954 - Fund balances(deficit),end of year $ 2,895,024 $ 3,616 $ 2,891,408 -104- Community Development Block Grant Program Principal Shopping District Final Variance with Final Variance with Budget Actual Budget Budget Actual Budget $ - $ - $ - $ 403,000 $ 395,403 $ 7,597 4,155,190 2,072,088 2,083,102 - - - - - - 4,000 5,330 (1,330) - - - 200 98 102 - - - 10,000 10,000 - (83,089) 57,467 (140,556) 132,610 142,021 (9,411) 4,072,100 2,129,555 1,942,545 549,810 552,852 (3,042) - - - 588,990 596,945 (7,955) 4,072,100 2,129,555 1,942,545 - - - 4,072,100 2,129,555 1,942,545 588,990 596,945 (7,955) - - - (39,180) (44,093) 4,913 39,180 39,180 - 39,180 39,180 - - (4,913) 4,913 54,080 54,080 - 54,080 $ 49,167 $ 4,913 -105- City of Lansing Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual -Nonmajor Special Revenue Funds (Continued) For the Year Ended June 30, 2011 911 Communications Center Final Variance with Budget Actual Budget Revenues Taxes and special assessments $ - $ - $ - Intergovernmental - - - Charges for services 5,183,218 5,172,408 10,810 Fines and forfeits - - - Interest - - - Contributions - - - Other - - - Total revenues 5,183,218 5,172,408 10,810 Expenditures Current expenditures: General government - - - Public safety 5,447,343 5,441,712 5,631 Highways and streets - - - Recreation and culture - - - Other functions - - - Debt service: Principal - - - Interest - - - Capital outlay - - - Total expenditures 5,447,343 5,441,712 5,631 Revenues over(under)expenditures (264,125) (269,304) 5,179 Other financing sources(uses) Transfers in 261,422 267,959 (6,537) Transfers out - - - Total other financing sources(uses) 261,422 267,959 (6,537) Net change in fund balances (2,703) (1,345) (1,358) Fund balances,beginning of year,as restated 1,345 1,345 - Fund balances(deficit),end of year $ (1,358) $ - $ (1,358) -106- Building Department Parks Department Final Variance with Final Variance with Budget Actual Budget Budget Actual Budget 1,357,400 1,353,551 3,849 - - - - - - - 524 (524) 1,357,400 1,353,551 3,849 - 524 (524) 1,956,400 1,953,337 3,063 - - - 47,964 6,301 41,663 1,956,400 1,953,337 3,063 47,964 6,301 41,663 (599,000) (599,786) 786 (47,964) (5,777) (42,187) 599,000 599,785 (785) - - - 599,000 599,785 (785) - - - - (1) 1 (47,964) (5,777) (42,187) 1 1 - 473,358 473,358 - $ 1 $ - $ 1 $ 425,394 $ 467,581 $ (42,187) -107- City of Lansing Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual -Nonmajor Special Revenue Funds (Concluded) For the Year Ended June 30, 2011 Tri-County Metro Final Variance with Budget Actual Budget Revenues Taxes and special assessments $ - $ - $ - Intergovernmental 1,036,160 446,290 589,870 Charges for services - - - Fines and forfeits 335,000 83,966 251,034 Interest 2,805 1,505 1,300 Contributions - - - Other - - - Total revenues 1,373,965 531,761 842,204 Expenditures Current expenditures: General government - - - Public safety 1,422,838 605,618 817,220 Highways and streets - - - Recreation and culture - - - Other functions - - - Debt service: Principal - - - Interest - - - Capital outlay - - - Total expenditures 1,422,838 605,618 817,220 Revenues over(under)expenditures (48,873) (73,857) 24,984 Other financing sources(uses) Transfers in 59,178 56,470 2,708 Transfers out (15,000) (15,000) - Total other financing sources(uses) 44,178 41,470 2,708 Net change in fund balances (4,695) (32,387) 27,692 Fund balances,beginning of year,as restated 475,306 475,306 - Fund balances,end of year $ 470,611 $ 442,919 $ 27,692 -108- Totals Final Variance with Budget Actual Budget $ 403,000 $ 395,403 $ 7,597 47,932,095 24,821,469 23,110,626 7,780,136 7,292,233 487,903 1,235,000 393,967 841,033 59,597 7,163 52,434 10,000 10,000 - 136,588 293,995 (157,407) 57,556,416 33,214,230 24,342,186 2,545,390 2,550,282 (4,892) 7,471,839 6,602,641 869,198 10,427,032 8,494,233 1,932,799 47,964 6,301 41,663 30,983,287 13,611,609 17,371,678 1,066,315 1,066,315 - 720,713 719,937 776 12,868,684 6,579,690 6,288,994 66,131,224 39,631,008 26,500,216 (8,574,808) (6,416,778) 2,158,030 8,593,983 6,709,320 1,884,663 (1,177,712) (1,146,470) (31,242) 7,416,271 5,562,850 1,853,421 (1,158,537) (853,928) 304,609 7,376,481 7,376,481 - $ 6,217,944 $ 6,522,553 $ 304,609 -109- CITY OF LANSING -110- Nonmajor Debt Service Funds 1998 Building Authority Fund—This fund accounts for the accumulation of resources for payment of the 1998 $2,175,000 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. 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. -111- City of Lansing Combining Balance Sheet-Nonmajor Debt Service Funds June 30, 2011 1998 1999 2001 Building Fire Fire Authority Station Station Totals Assets Equity in pooled cash $ - $ 46,028 $ - $ 46,028 Fund balances Restricted $ - $ 46,028 $ - $ 46,028 -112- City of Lansing Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Debt Service Funds For the Year Ended June 30, 2011 1998 1999 2001 Building Fire Fire Authority Station Station Totals Revenues Taxes and special assessments $ - $ 263,016 $ 343,582 $ 606,598 Interest - 1,843 2,560 4,403 Total revenues - 264,859 346,142 611,001 Expenditures Debt service: Principal payments 125,000 185,000 300,000 610,000 Interest 51,300 78,169 93,227 222,696 Issuance costs - - 48,804 48,804 Total expenditures 176,300 263,169 442,031 881,500 Revenues over(under) expenditures (176,300) 1,690 (95,889) (270,499) Other financing sources(uses) Transfers in 176,300 - - 176,300 Issuance of long-term debt - - 2,470,000 2,470,000 Payment to refunded bond escrow agent - - (2,456,207) (2,456,207) Total other financing sources 176,300 - 13,793 190,093 Net change in fund balances - 1,690 (82,096) (80,406) Fund balances,beginning of year - 44,338 82,096 126,434 Fund balances,end of year $ - $ 46,028 $ - $ 46,028 -113- CITY OF LANSING -114- Nonmajor Capital Projects Funds 1990 Environmental I Fund—This fund accounts for the proceeds of the 1990 $7,000,000 environmental bonds. 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. Lansing Center Improvements Fund — This fund accounts for the proceeds of the 2006 $4,000,000 Lansing Center limited tax bonds. MTF Bonds Fund — This fund accounts for the proceeds of the $1,600,000 Michigan Transportation Fund limited tax bonds. 2009 Build America Construction Fund—This fund accounts for the proceeds of the 2009 $10,197,000 capital improvement limited tax general obligation bonds. Other Capital Projects Fund—This fund accounts for miscellaneous capital projects. -115- City of Lansing Combining Balance Sheet-Nonmajor Capital Projects Funds June 30, 2011 1990 1990 Special Lansing Environ- Environ- Assess- Center mental mental II ments Improvements Assets Cash and cash equivalents $ - $ - $ - $ - Equity in pooled cash 59,999 184,440 - 364,305 Investments - - - - Accounts receivable - - - - Special assessments receivable: Current - - 88,225 - Deferred - - 718,406 - Advances to other funds - - - - Due from other governments - - 1,070 - Total assets $ 59,999 $ 184,440 $ 807,701 $ 364,305 Liabilities and fund balances Liabilities Accounts payable $ 16,780 $ - $ 17,201 $ 105,153 Due to other funds - - - - Advance from other funds - - 243,379 - Deferred revenue - - 718,406 - Total liabilities 16,780 - 978,986 105,153 Fund balances Nonspendable - - - - Restricted 43,219 184,440 - 259,152 Committed - - - - Unassigned(deficit) - - (171,285) - Total fund balances(deficit) 43,219 184,440 (171,285) 259,152 Total liabilities and fund balances $ 59,999 $ 184,440 $ 807,701 $ 364,305 -116- 2009 Build MTF America Bonds Construction Other Totals $ 1,421,167 $ - $ - $ 1,421,167 - - 4,525,558 5,134,302 1,395,598 - 1,395,598 - 140,767 140,767 - 88,225 - 718,406 80,531 80,531 - - - 1,070 $ 1,421,167 $ 1,395,598 $ 4,746,856 $ 8,980,066 $ - $ - $ 225,166 $ 364,300 390,237 542,732 - 932,969 - - - 243,379 - - - 718,406 390,237 542,732 225,166 2,259,054 - - 80,531 80,531 1,030,930 852,866 - 2,370,607 - - 4,441,159 4,441,159 - - - (171,285) 1,030,930 852,866 4,521,690 6,721,012 $ 1,421,167 $ 1,395,598 $ 4,746,856 $ 8,980,066 -117- City of Lansing Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Capital Projects Funds For the Year Ended June 30, 2011 1990 1990 Special Lansing Environ- Environ- Assess- Center mental mental II ments Improvements Revenues Special assessments $ - $ - $ 17,627 $ - Charges for services - - - - Interest 96 205 - 729 Total revenues 96 205 17,627 729 Expenditures Capital outlay 43,243 - 39,239 407,515 Revenues over(under)expenditures (43,147) 205 (21,612) (406,786) Other financing sources(uses) Transfers in - - - - Transfers out - - - - Total other financing sources(uses) - - - - Net change in fund balances (43,147) 205 (21,612) (406,786) Fund balance(deficit),beginning of year 86,366 184,235 (149,673) 665,938 Fund balance(deficit),end of year $ 43,219 $ 184,440 $ (171,285) $ 259,152 -118- 2009 MTF Build America Bonds Construction Other Totals $ - $ - $ - $ 17,627 - - 863,529 863,529 14,637 2,344 18,011 14,637 865,873 899,167 351 - 2,886,065 3,376,413 (351) 14,637 (2,020,192) (2,477,246) - - 2,115,500 2,115,500 (135,375) (3,630,956) (846,086) (4,612,417) (135,375) (3,630,956) 1,269,414 (2,496,917) (135,726) (3,616,319) (750,778) (4,974,163) 1,166,656 4,469,185 5,272,468 11,695,175 $ 1,030,930 $ 852,866 $ 4,521,690 $ 6,721,012 -119- CITY OF LANSING -120- 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. -121- City of Lansing Combining Balance Sheet-Nonmajor Permanent Funds June 30, 2011 Cemetery Perpetual Parks Care Trust Totals Assets Equity in pooled cash $ 1,665,126 $ 1,251 $ 1,666,377 Fund balances Nonspendable $ 1,665,126 $ 1,251 $ 1,666,377 -122- City of Lansing Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Permanent Funds For the Year Ended June 30, 2011 Cemetery Perpetual Parks Care Trust Totals Revenues Interest $ 11,833 $ 1 $ 11,834 Other financing sources(uses) Transfers in 16,826 - 16,826 Transfers out (11,833) - (11,833) Total other financing sources 4,993 - 4,993 Net change in fund balances 16,826 1 16,827 Fund balances,beginning of year 1,648,300 1,250 1,649,550 Fund balances,end of year $ 1,665,126 $ 1,251 $ 1,666,377 -123- CITY OF LANSING -124- 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. -125- City of Lansing Combining Statement of Net Assets -Nonmajor Enterprise Funds June 30, 2011 Garbage and Rubbish Cemetery Golf Collection Assets Current assets: Cash and cash equivalents $ 200 $ 4,532 $ 9,688 Equity in pooled cash 4,695 115,073 44,028 Accounts receivable,net - - 568,037 Inventories 81,517 2,151 10,535 Total current assets 86,412 121,756 632,288 Noncurrent assets: Capital assets not being depreciated 57,740 446,501 - Capital assets being depreciated,net 193,273 2,386,084 - Total noncurrent assets 251,013 2,832,585 - Total assets 337,425 2,954,341 632,288 Liabilities Current liabilities: Accounts payable 7,365 5,020 26,868 Accrued interest payable - 7,825 - Accrued payroll 1,870 21,635 - Due to other funds 40,000 - 150,000 Unearned revenues - 31,519 93,344 Current portion of bonds and notes - 80,000 - Total current liabilities 49,235 145,999 270,212 Noncurrent liabilities: Bonds and notes payable,net of current portion - 473,464 - Compensated absences 18,769 42,130 20,549 Total noncurrent liabilities 18,769 515,594 20,549 Total liabilities 68,004 661,593 290,761 Net assets Invested in capital assets,net of related debt 251,013 2,279,121 - Unrestricted 18,408 135627 341,527 Total net assets $ 269,421 $ 2,292,748 $ 341,527 -126- Recycling Totals $ - $ 14,420 1,079,160 1,242,956 3,504 571,541 - 94,203 1,082,664 1,923,120 19,412 523,653 710,281 3,289,638 729,693 3,813,291 1,812,357 5,736,411 30,506 69,759 - 7,825 1,492 24,997 - 190,000 124,863 - 80,000 31,998 497,444 - 473,464 43,059 124,507 43,059 597,971 75,057 1,095,415 729,693 3,259,827 1,007,607 1,381,169 $ 1,737,300 $ 4,640,996 -127- City of Lansing Combining Statement of Revenues, Expenses and Changes in Fund Net Assets -Nonmajor Enterprise Funds For the Year Ended June 30, 2011 Garbage and Rubbish Cemetery Golf Collection Operating revenues Charges for services $ 225,947 $ 382,546 $ 1,507,577 Operating expenses Personal services 473,799 429,150 742,935 Contractual and materials 264,911 286,178 772,517 Depreciation 17,056 98,336 - Total operating expenses 755,766 813,664 1,515,452 Operating loss (529,819) (431,118) (7,875) Nonoperating revenues(expenses) Interest revenue - - - Gain on sale of capital assets 4,463 3,485 - Interest expense and fees - (33,153) (148) Total nonoperating revenues (expenses) 4,463 (29,668) (148) Loss before contributions and transfers (525,356) (460,786) (8,023) Transfers in 363,167 587,473 - Transfers out (16,826) - - Change in net assets (179,015) 126,687 (8,023) Net assets,beginning of year 448,436 2,166,061 349,550 Net assets,end of year $ 269,421 $ 2,292,748 $ 341,527 -128- Recycling Totals $ 2,609,423 $ 4,725,493 1,610,958 3,256,842 1,175,847 2,499,453 22,548 137,940 2,809,353 5,894,235 (199,930) (1,168,742) 916 916 - 7,948 - (33,301) 916 (24,437) (199,014) (1,193,179) 950,640 (16,826) (199,014) (259,365) 1,936,314 4,900,361 $ 1,737,300 $ 4,640,996 -129- City of Lansing Combining Statement of Cash Flows Nonmajor Enterprise Funds For the Year Ended June 30, 2011 Garbage and Rubbish Cemetery Golf Collection Cash flows from operating activities Cash received from customers $ 225,947 $ 382,546 $ 1,534,097 Cash payments for goods and services (204,256) (353,688) (897,626) Cash payments to employees (492,456) (426,191) (742,935) Net cash used for operating activities (470,765) (397,333) (106,464) Cash flows from noncapital financing activities Transfers in 363,167 587,473 - Transfers out (16,826) - - Net cash provided by noncapital financing activities 346,341 587,473 - Cash flows from capital and related financing activities Proceeds from sale of capital assets 4,463 3,485 - Principal paid on bonds - (75,000) - Interest paid on bonds - (32,612) (148) Net cash provided by(used for) capital and related financing activities 4,463 (104,127) (148) Cash flows from investing activities Interest and dividends received - - - Net increase(decrease)in cash and cash equivalents (119,961) 86,013 (106,612) Cash and cash equivalents: Beginning of year 124,856 33,592 160,328 End of year $ 4,895 $ 119,605 $ 53,716 Reconciliation to statement of net assets Cash and cash equivalents $ 200 $ 4,532 $ 9,688 Equity in pooled cash 4,695 115,073 44,028 $ 4,895 $ 119,605 $ 53,716 -130- Recycling Totals $ 2,607,425 $ 4,750,015 (1,136,277) (2,591,847) (1,609,466) (3,271,048) (138,318) (1,112,880) - 950,640 - (16,826) - 933,814 - 7,948 - (75,000) - (32,760) - (99,812) 916 916 (137,402) (277,962) 1,216,562 1,535,338 $ 1,079,160 $ 1,257,376 $ - $ 14,420 1,079,160 1,242,956 $ 1,079,160 $ 1,257,376 continued... -131- City of Lansing Combining Statement of Cash Flows (Concluded) Nonmajor Enterprise Funds For the Year Ended June 30, 2011 Garbage and Rubbish Cemetery Golf Collection Reconciliation of operating loss to net cash used for operating activities Operating loss $ (529,819) $ (431,118) $ (7,875) Adjustments to reconcile operating loss to net cash from operating activities: Depreciation expense 17,056 98,336 - Changes in assets and liabilities: Accounts receivable - - 26,520 Inventories 6,102 2,048 4,386 Accounts payable 890 (8,876) (5,472) Accrued interest payable - (1,013) - Accrued payroll (18,657) 2,959 - Due to other funds 40,000 (80,000) (150,000) Unearned revenues - 1,069 5,428 Compensated absences 13,663 19,262 20,549 Net cash used for operating activities $ (470,765) $ (397,333) $ (106,464) -132- Recycling Totals $ (199,930) $ (1,168,742) 22,548 137,940 (1,998) 24,522 - 12,536 3,474 (9,984) - (1,013) 1,492 (14,206) - (190,000) - 6,497 36,096 89,570 $ (138,318) $ (1,112,880) -133- CITY OF LANSING -134- 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. -135- City of Lansing Combining Statement of Net Assets Internal Service Funds June 30,2011 Fleet Fringe Maintenance Benefits Engineering Totals Assets Current assets: Equity in pooled cash $ 2,334,345 $ 677,598 $ 542,064 $ 3,554,007 Accounts receivable,net - 2,747,146 - 2,747,146 Inventories 830,241 - 830,241 Prepaids - 759,373 - 759,373 Total current assets 3,164,586 4,184,117 542,064 7,890,767 Noncurrent assets: Restricted assets: Cash and cash equivalents 3,118,494 - - 3,118,494 Bond issuance costs,net 54,327 3,051 57,378 Capital assets not being depreciated 55,297 - 55,297 Capital assets being depreciated,net 5,508,251 1,822,045 7,330,296 Total non-current assets 8,736,369 - 1,825,096 10,561,465 Total assets 11,900,955 4,184,117 2,367,160 18,452,232 Liabilities Current liabilities: Accounts payable 105,350 866,293 551 972,194 Accrued interest payable 18,154 - 13,553 31,707 Accrued payroll 80,236 673,368 61,516 815,120 Claims incurred but not reported - 1,402,760 - 1,402,760 Due to other funds - 1,699,756 - 1,699,756 Current portion of: Bonds and notes payable - - 150,000 150,000 Compensated absences 79,423 - - 79,423 Total current liabilities 283,163 4,642,177 225,620 5,150,960 Noncurrent liabilities: Bonds and notes payable,net of current portions 3,168,552 - 610,000 3,778,552 Compensated absences,net of current portion 142,161 15,332 469,495 626,988 Total non-current liabilities 3,310,713 15,332 1,079,495 4,405,540 Total liabilities 3,593,876 4,657,509 1,305,115 9,556,500 Net assets Invested in capital assets,net of related debt 2,394,996 - 1,062,045 3,457,041 Restricted for debt retirement 3,118,494 - 3,118,494 Unrestricted(deficit) 2,793,589 (473,392) - 2,320,197 Total net assets(deficit) $ 8,307,079 $ (473,392) $ 1,062,045 $ 8,895,732 -136- City of Lansing Combining Statement of Revenues, Expenses and Changes in Fund Net Assets Internal Service Funds For the Year Ended June 30, 2011 Fleet Fringe Maintenance Benefits Engineering Totals Operating revenues Charges for services $ 6,505,621 $ 54,349,699 $ 3,079,920 $ 63,935,240 Intergovernmental - 1,416,366 - 1,416,366 Total operating revenues 6,505,621 55,766,065 3,079,920 65,351,606 Operating expenses Personal services 2,717,177 266,030 2,398,593 5,381,800 Purchase of goods and services 2,908,638 53,827,420 552,033 57,288,091 Depreciation 1,487,755 - 43,905 1,531,660 Total operating expenses 7,113,570 54,093,450 2,994,531 64,201,551 Operating income(loss) (607,949) 1,672,615 85,389 1,150,055 Nonoperating revenues(expenses) Interest revenue 5,622 - - 5,622 Gain on sale of capital assets 108,601 - - 108,601 Interest expense and fees (57,024) - (46,486) (103,510) Total nonoperating revenues(expenses) 57,199 - (46,486) 10,713 Change in net assets (550,750) 1,672,615 38,903 1,160,768 Net assets(deficit),beginning of year 8,857,829 (2,146,007) 1,023,142 7,734,964 Net assets(deficit),end of year $ 8,307,079 $ (473,392) $ 1,062,045 $ 8,895,732 -137- City of Lansing Combining Statement of Cash Flows Internal Service Funds For the Year Ended June 30,2011 Fleet Fringe Maintenance Benefits Engineering Totals Cash flows from operating activities Cash received from interfund services $ 8,184,821 $ 53,643,003 $ 3,079,920 $ 64,907,744 Cash payments for goods and services (2,933,634) (53,387,770) (546,378) (56,867,782) Cash payments to employees (2,696,404) (266,030) (2,399,456) (5,361,890) Net cash provided by(used for) operating activities 2,554,783 (10,797) 134,086 2,678,072 Cash flows from capital and related financing activities Proceeds from sale of capital assets 108,601 - 108,601 Acquisition and construction of capital assets (2,242,787) - (2,242,787) Principal paid on revenue and general obligation bonds - (145,000) (145,000) Interest paid on revenue and general obligation bonds (87,519) (45,832) (133,351) Bond proceeds 3,200,000 - 3,200,000 Cash paid for bond issuance costs (55,280) - (55,280) Net cash provided by(used for)capital and related financing activities 923,015 (190,832) 732,183 Cash flows from investing activities Interest and dividends received 5,622 - 5,622 Net increase(decrease)in cash and cash equivalents 3,483,420 (10,797) (56,746) 3,415,877 Cash and cash equivalents,beginning of year 1,969,419 688,395 598,810 3,256,624 Cash and cash equivalents,end of year $ 5,452,839 $ 677,598 $ 542,064 $ 6,672,501 Reconciliation to statement of net assets Equity in pooled cash $ 2,334,345 $ 677,598 $ 542,064 $ 3,554,007 Restricted cash and cash equivalents 3,118,494 - - 3,118,494 $ 5,452,839 $ 677,598 $ 542,064 $ 6,672,501 Reconciliation of operating income(loss)to net cash provided by(used for)operating activities Operating income(loss) $ (607,949) $ 1,672,615 $ 85,389 $ 1,150,055 Adjustments to reconcile operating loss to net cash provided by(used for)operating activities Depreciation expense 1,487,755 - 43,905 1,531,660 Change in: Accounts receivable 49,200 (2,123,062) - (2,073,862) Inventories (5,348) - - (5,348) Prepaids - 18,247 - 18,247 Due from other funds 1,630,000 - - 1,630,000 Accounts payable (49,379) 103,235 (58,727) (4,871) Accrued interest payable 18,154 - (2,586) 15,568 Accrued payroll 20,773 (672,274) (863) (652,364) Other - (724,646) - (724,646) Due to other funds - 1,699,756 - 1,699,756 Compensated absences 11,577 15,332 66,968 93,877 Total adjustments 3,162,732 (1,683,412) 48,697 1,528,017 Net cash provided by(used for)operating activities $ 2,554,783 $ (10,797) $ 134,086 $ 2,678,072 -138- 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. -139- City of Lansing Combining Statement of Fiduciary Assets and Liabilities Agency Funds June 30, 2011 54-A District Court Garnishment, Bail Indemnity Bond Bonds and Restitution Totals Assets Equity in pooled cash $ 61,374 $ 11,307 $ 72,681 Liabilities Undistributed receipts $ 61,374 $ 11,307 $ 72,681 -140- City of Lansing Combining Statement of Changes in Fiduciary Assets and Liabilities Agency Funds For the Year Ended June 30, 2011 Beginning Ending Balance Additions Deletions Balance 54-A District Court-Bail Bonds Assets Equity in pooled cash $ 103,577 $ 311,267 $ 353,470 $ 61,374 Liabilities Undistributed receipts $ 103,577 $ 311,267 $ 353,470 $ 61,374 54-A District Court-Garnishment,Indemnity Bond and Restitution Assets Equity in pooled cash $ 12,503 $ 124,595 $ 125,791 $ 11,307 Liabilities Undistributed receipts $ 12,503 $ 124,595 $ 125,791 $ 11,307 Total-All Agency Funds Assets Equity in pooled cash $ 116,080 $ 435,862 $ 479,261 $ 72,681 Liabilities Undistributed receipts $ 116,080 $ 435,862 $ 479,261 $ 72,681 -141- CITY OF LANSING -142- STATISTICAL SECTION -143- STATISTICAL SECTION This part of the City of Lansing's 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. Contents Pages Financial Trends 145-149 These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. Revenue Capacity 150-154 These schedules contain information to help the reader assess the factors affecting the City's ability to generate its property taxes. Debt Capacity 155-159 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. Demographic and Economic Information 160-162 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. Operating Information 163-165 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. Sources: Unless otherwise noted,the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The City implemented Statement 34 in 2002; schedules presenting government-wide information include information beginning in that year. -144- Schedule 1 City of Lansing Net Assets by Component (accrual basis of accounting) Fiscal Year 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 (2) Governmental activities Invested in capital assets,net of related debt $ 180,571,237 $ 186,536,428 $ 191,516,475 $ 187,054,852 $ 184,150,439 $ 190,243,447 $ 198,338,788 $ 197,530,605 $ 193,545,003 $ 176,742,875 Restricted 14,777,571 14,304,689 17,139,090 34,554,539 37,642,784 36,706,345 33,900,657 6,370 172,111 Unrestricted (18,840,717) (7,649,432) 6,589,790 (3,124,027) 2,776,006 514,601 1,632,040 15,331,622 20,363,235 39,491,342 Total governmental activities net assets 176,508,091 193,191,685 215,245,355 218,485,364 224,569,229 227,464,393 233,871,485 212,862,227 213,914,608 216,406,328 Business-type activities Invested in capital assets,net of related debt 204,149,751 194,854,140 185,430,669 178,526,049 166,320,408 161,324,071 163,834,290 138,830,169 163,715,373 154,922,603 Restricted 13,080,302 19,917,341 19,454,812 30,892,739 35,777,715 35,945,848 39,493,526 718,828 1,039,093 2,105,762 Unrestricted 34,177,453 30,193,568 23,730,694 16,330,517 28,929,677 28,208,193 22,701,430 64,268,351 35,649,876 36,078,930 Total business-type activities net assets 251,407,506 244,965,049 228,616,175 225,749,305 231,027,800 225,478,112 226,029,246 203,817,348 200,404,342 193,107,295 Primary government Invested in capital assets,net of related debt 384,720,988 381,390,568 376,947,144 365,580,901 350,470,847 351,567,518 362,173,078 336,360,774 357,260,376 331,665,478 Restricted 27,857,873 34,222,030 36,593,902 65,447,278 73,420,499 72,652,193 73,394,183 718,828 1,045,463 2,277,873 Unrestricted 15,336,736 22,544,136 30,320,484 13,206,490 31,705,683 28,722,794 24,333,470 79,599,973 56,013,111 75,570,272 Total primary government net assets $ 427,915,597 $ 438,156,734 $ 443,861,530 $ 444,234,669 $ 455,597,029 $ 452,942,505 $ 459,900,731 $ 416,679,575 $ 414,318,950 $ 409,513,623 (1)no discretely presented component units shown (2)in 2005 the City's definition of"restricted net assets"was changed to include assets in funds set up to account for activities outside of the General Fund,for Governmental Activities,and to include restricted cash for debt retirement for Business-type Activities. -145- Schedule 2 City of Lansing Changes in Net Assets (accrual basis of accounting) Fiscal Year 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 Expenses Governmental activities: General government $ 25,665,269 $ 30,326,671 $ 26,426,242 $ 28,901,548 $ 22,043,283 $ 34,375,762 $ 53,533,838 $ 53,353,559 $ 54,386,814 $ 48,907,951 Public safety 83,546,997 84,566,215 71,236,947 76,211,756 62,570,888 60,047,271 38,668,349 41,292,750 36,998,022 37,442,294 Public works 26,355,375 29,252,516 37,588,680 40,032,746 40,517,063 31,790,944 30,670,483 22,118,173 23,740,767 22,332,626 Recreation and culture 8,245,451 7,312,480 7,298,385 7,677,083 6,198,462 7,881,212 5,464,143 7,979,953 8,055,078 6,790,347 Community development 12,825,028 9,715,087 6,378,286 6,382,336 6,232,406 7,124,491 6,996,000 8,387,559 9,647,696 8,960,204 Interest on long-term debt 2,116,535 2,229,288 1,803,125 1,481,658 1,658,708 1,197,851 1,033,078 2,041,758 2,333,691 2,705,290 Total governmental activities expenses 158,754,655 163,402,257 150,731,665 160,687,127 139,220,810 142,417,531 136,365,891 135,173,752 135,162,068 127,138,712 Business-type activities Sewage disposal system 26,444,741 24,931,075 26,247,188 27,382,736 24,725,229 21,706,537 20,631,611 20,864,079 19,350,186 17,218,878 Municipal parking system 9,896,498 8,305,095 8,353,063 10,188,065 10,275,379 18,403,163 10,151,018 9,196,910 8,840,334 8,322,193 Cemetery 755,766 659,584 689,979 675,672 692,510 753,151 802,949 828,073 688,571 570,291 Golf 846,817 869,003 927,200 1,072,505 1,358,008 1,398,963 1,446,615 1,620,669 1,583,711 1,222,525 Garbage and rubbish collection 1,515,600 1,451,059 1,547,372 1,436,642 1,372,266 1,412,620 1,421,617 1,321,760 1,288,178 1,229,951 Recycling 2,809,353 2,804,047 3,008,750 2,940,366 2,777,068 2,981,730 2,862,003 2,768,307 2,642,541 2,437,371 Potter Park Zoo - - - (156,270) 2,968,236 2,718,759 2,690,943 2,542,065 2,228,724 1,778,059 Total business-type activities expenses 42,268,775 39,019,863 40,773,552 43,539,716 44,168,696 49,374,923 40,006,756 39,141,863 36,622,245 32,779,268 Total primary government expenses $ 201,023,430 $ 202,422,120 $ 191,505,217 $ 204,226,843 $ 183,389,506 $ 191,792,454 $ 176,372,647 $ 174,315,615 $ 171,784,313 $ 159,917,980 Program Revenues Governmental activities: Charges for services: General government $ 6,742,306 $ 6,565,263 $ 5,188,510 $ 5,938,911 $ 6,251,032 $ 6,416,850 $ 6,264,142 $ 4,686,901 $ 4,611,471 $ 1,908,603 Public safety 8,975,173 8,589,146 9,817,421 12,705,181 13,014,934 13,087,372 12,400,853 11,682,187 11,031,998 10,393,731 Public works 2,449,606 2,788,112 4,565,013 4,364,525 3,805,739 3,891,646 2,646,007 2,713,258 2,627,959 2,345,220 Recreation and culture 685,120 587,906 1,217,445 1,556,260 1,259,373 1,405,584 1,598,968 1,581,607 1,472,203 1,509,159 Community development 122,326 69,250 50,132 66,308 66,161 66,486 66,788 - - - Operating grants and contributions 30,154,681 27,515,892 26,462,211 20,356,292 16,524,178 16,158,496 16,673,481 15,746,181 15,968,081 17,980,993 Capital grants and contributions 189,414 3,109,410 2,571,741 2,531,974 2,179,870 3,659,169 3,479,536 3,033,891 1,734,008 2,822,477 Total governmental activities program revenues 49,318,626 49,224,979 49,872,473 47,519,451 43,101,287 44,685,603 43,129,775 39,444,025 37,445,720 36,960,183 Business-type activities: Charges for services: Sewage disposal system 29,205,945 28,907,772 27,446,304 28,023,322 26,926,202 26,867,610 26,890,756 26,529,842 26,045,574 25,414,112 Municipal parking system 7,539,179 7,396,219 7,539,611 10,090,566 10,838,270 10,289,830 9,628,690 7,510,354 7,642,684 7,763,065 Cemetery 225,947 226,973 248,314 218,688 264,255 237,564 230,716 226,631 199,760 231,304 Golf 382,546 438,315 448,067 607,922 754,995 890,190 929,266 951,923 997,177 1,014,675 Garbage and rubbish collection 1,507,577 1,677,428 1,486,531 1,617,717 1,378,562 1,295,053 1,322,111 1,315,413 1,189,489 801,418 Recycling 2,609,423 2,651,309 2,945,061 3,039,089 2,903,092 2,816,277 2,636,002 2,115,917 2,138,308 1,928,476 Potter Park Zoo - - - (115) 553,999 471,703 558,654 505,666 436,199 426,434 Operating grants and contributions 4,456,708 1,535,907 1,541,913 - - - - - - - Capital grants and contributions 1,439,044 11,928,108 60,318 196,317 183,012 1,368,773 731,575 93,207 914,570 - Total business-type activities program revenues 47,366,369 54,762,031 41,716,119 43,793,506 43,802,387 44,237,000 42,927,770 39,248,953 39,563,761 37,579,484 Total primary government program revenues $ 96,684,995 $ 103,987,010 $ 91,588,592 $ 91,312,957 $ 86,903,674 $ 88,922,603 $ 86,057,545 $ 78,692,978 $ 77,009,481 $ 74,539,667 Net(Expe n ses)/Revenues Governmental activities $ (109,436,029) $ (114,177,278) $ (100,859,192) $ (113,167,676) $ (96,119,523) $ (97,731,928) $ (93,236,116) $ (95,729,727) $ (97,716,348) $ (90,178,529) Business-type activities 5,097,594 15,742,168 942,567 253,790 (366,309) (5,137,923) 2,921,014 107,090 2,941,516 4,800,216 Total primary government net expense $ (104,338,435) $ (98,435,110) $ (99,916,625) $ (112,913,886) $ (96,485,832) $ (102,869,851) $ (90,315,102) $ (95,622,637) $ (94,774,832) ($85,378,313) continued -146- Schedule 2 City of Lansing Changes in Net Assets(Concluded) (accrual basis of accounting) Fiscal Year 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 General Revenues and Other Changes in Net Assets Governmental activities: Taxes Property Taxes $ 37,233,590 $ 39,010,960 $ 39,141,928 $ 38,607,761 $ 38,371,105 $ 37,506,017 $ 36,181,408 $ 40,354,088 $ 39,571,155 $ 39,158,867 Income taxes 28,699,749 27,408,443 29,312,762 31,168,012 28,209,913 27,032,176 27,435,047 27,437,494 29,099,955 27,596,270 Unrestricted grants and contributions 27,254,574 25,847,423 27,318,313 28,180,799 27,258,536 26,817,633 26,355,710 26,338,413 28,198,831 28,618,275 Investment earnings 89,735 246,495 978,034 1,706,572 2,483,162 1,634,608 715,608 312,069 725,936 972,802 Miscellaneous 108,601 75,094 32,310 - - 774,822 104,563 2,903,792 1,838,895 1,946,818 Transfers (633,814) (464,807) (509,728) 7,420,667 (3,098,357) (3,132,465) (2,123,435) (2,668,510) (4,130,144) (1,925,790) Total governmental activities 92,752,435 92,123,608 96,273,619 107,083,811 93,224,359 90,632,791 88,668,901 94,677,346 95,304,628 96,367,242 Business-type activities: Investment earnings 689,883 141,899 413,850 1,883,034 2,815,480 1,453,076 1,298,407 249,855 294,425 628,797 Miscellaneous 21,166 - 725 5,348 2,160 1,248 23,736 387,551 343,174 1,438,488 Transfers 633,814 464,807 509,728 (7,420,667) 3,098,357 3,132,465 2,123,435 2,668,510 3,717,932 1,486,240 Total business-type activities 1,344,863 606,706 924,303 (5,532,285) 5,915,997 4,586,789 3,445,578 3,305,916 4,355,531 3,553,525 Total primary government $ 94,097,298 $ 92,730,314 $ 97,197,922 $ 101,551,526 $ 99,140,356 $ 95,219,580 $ 92,114,479 $ 97,983,262 $ 99,660,159 $ 99,920,767 Changes in Net Assets Governmental activities $ (16,683,594) $ (22,053,670) $ (4,585,573) $ (6,083,865) $ (2,895,164) $ (7,099,137) $ (4,567,215) $ (1,052,381) $ (2,411,720) $ 6,188,713 Business-type activities 6,442,457 16,348,874 1,866,870 (5,278,495) 5,549,688 (551,134) 6,366,592 3,413,006 7,297,047 8,353,741 Total primary government $ (10,241,137) $ (5,704,796) $ (2,718,703) $ (11,362,360) $ 2,654,524 $ (7,650,271) $ 1,799,377 $ 2,360,625 $ 4,885,327 $ 14,542,454 (1)No discretely presented component units shown -147- Schedule 3 City of Lansing Fund Balances,Governmental Funds (modified accrual basis of accounting) Fiscal Year 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 (2) (1) General Fund Nonspendable $ 171,586 $ $ - $ $ - $ $ - $ $ - $ Restricted 41,129 Committed 178,081 Unassigned 4,939,691 - - - - Reserved - 102,732 1,320,375 1,765,288 1,848,021 2,443,224 2,482,589 1,324,109 945,386 1,145,896 Unreserved - 389,061 3,755,862 5,465,164 5,036,129 4,634,961 4,709,909 5,606,958 5,985,681 5,785,171 Total General Fund 5,330,487 491,793 5,076,237 7,230,452 6,884,150 7,078,185 7,192,498 6,931,067 6,931,067 6,931,067 All Other Governmental Funds Nonspendable $ 3,006,507 $ - $ - $ - $ - $ - $ - $ - $ - $ - Restricted 7,412,008 Committed 4,908,740 Unassigned(deficit) (371,285) - - - - - - - - - Reserved 1,177,998 324,366 365,351 2,544,339 613,533 2,139,438 3,688,795 4,541,303 4,898,039 Unreserved,reported in: Special revenue funds 12,029,680 13,394,485 14,716,755 14,523,146 18,798,291 17,635,170 17,950,570 17,933,354 19,123,737 Capital projects funds 11,614,644 12,010,219 17,862,441 18,978,360 15,717,371 12,563,759 15,293,862 16,967,327 19,447,491 Debt service funds 126,434 186,636 256,144 144,518 88,826 4,400 - - - Permanent funds 1,649,550 1,630,098 1,609,992 1,596,939 1,577,150 1,557,890 - - - Total all other governmental funds 14,955,970 26,598,306 27,545,804 34,810,683 37,787,302 36,795,171 33,900,657 36,933,227 39,441,984 43,469,267 Total All Governmental Funds $ 20,286,457 $ 27,090,099 $ 32,622,041 $ 42,041,135 $ 44,671,452 $ 43,873,356 $ 41,093,155 $ 43,864,294 $ 46,373,051 $ 50,400,334 (1)In 2005 the City's definition for Permanent Funds fund balance changed to"unreserved"due to the nature of the funds being set up as a reserved fund (2)The City implemented GASB 54 for the Fiscal Year Ended June 30,2011. Prior years were not restated retroactively. -148- Schedule 4 City of Lansing Changes in Fund Balance,Governmental Funds (modified accrual basis of accounting) Fiscal Year 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 Revenues Property taxes $ 37,371,885 $ 39,279,343 $ 39,258,893 $ 38,775,722 $ 38,681,928 $ 37,957,773 $ 36,527,417 $ 40,354,088 $ 39,426,786 $ 39,303,237 Income taxes 28,699,749 27,408,443 29,312,762 31,168,012 28,209,913 27,032,176 27,497,542 27,413,270 29,159,482 27,577,803 Licenses and permits 1,598,804 1,414,906 1,325,119 1,429,075 1,101,550 860,647 791,655 814,989 925,455 976,332 Intergovernmental 40,304,785 39,137,217 38,998,039 38,556,616 34,699,908 34,964,225 35,624,372 36,312,111 36,183,631 41,155,183 Charges for services 18,606,304 18,323,158 20,355,642 19,116,593 18,415,612 19,436,267 17,931,572 16,745,202 15,522,204 15,057,729 Fines and forfeits 3,325,728 4,579,175 4,143,000 4,090,397 4,349,642 4,515,951 4,351,977 4,870,577 5,645,029 4,383,678 Interest and rents 88,516 249,464 1,196,559 1,836,485 2,607,388 1,710,674 720,707 357,382 823,308 1,096,086 Contributions 11,821,388 10,606,368 10,372,056 10,894,573 9,980,854 9,385,831 8,966,289 8,744,295 9,255,742 8,069,915 Donations from private sources - 9,000 44,000 326,768 114,954 549,055 126,182 22,031 376,793 85,307 Other revenue 504,856 473,123 1,054,209 331,248 1,019,476 1,082,283 1,320,064 1,285,903 779,115 703,332 Total revenues $ 142,322,015 $ 141,480,197 $ 146,060,279 $ 146,525,489 $ 139,181,225 $ 137,494,882 $ 133,857,777 $ 136,919,848 $ 138,097,545 $ 138,408,602 Expenditures General government 26,396,516 27,839,564 28,951,805 29,209,458 28,905,058 34,956,037 55,746,807 54,420,735 53,381,289 49,156,129 Public safety 70,397,235 70,820,184 70,082,462 67,715,160 65,218,515 59,143,629 38,121,596 40,145,137 39,321,853 39,290,562 Public works 6,002,823 Highways and streets 8,494,233 14,506,982 14,723,311 14,860,390 13,501,747 10,879,004 10,467,860 9,216,004 9,776,628 9,110,517 Recreation and culture 7,464,193 8,127,700 8,452,768 8,038,290 7,676,600 7,509,183 5,517,980 6,229,014 6,555,043 6,219,773 Other functions 15,675,003 15,182,675 12,599,072 11,805,843 9,847,925 8,259,415 8,520,848 6,971,380 5,725,184 8,255,056 Capital outlay 9,956,103 14,781,728 14,855,863 16,228,127 20,001,659 13,306,810 12,614,723 11,917,608 15,241,548 14,195,769 Debt service Interest 3,210,220 3,270,068 1,801,394 1,607,703 1,285,436 1,145,588 1,187,673 2,331,276 2,625,499 2,951,352 Principal 2,070,552 2,165,237 4,743,146 4,721,581 3,875,909 3,244,879 3,592,766 6,874,234 6,298,264 7,886,020 Issuance costs 48,804 - - - - - - - - - Total expenditures $ 149,715,682 $ 156,694,138 $ 156,209,821 $ 154,186,552 $ 150,312,849 $ 138,444,545 $ 135,770,253 $ 138,105,388 $ 138,925,308 $ 137,065,178 Excess of revenues over(under)expenditures (7,393,667) (15,213,941) (10,149,542) (7,661,063) (11,131,624) (949,663) (1,912,476) (1,185,540) (827,763) 1,343,424 Other Financing Sources(Uses) Proceeds from borrowing $ 2,470,000 $ 10,146,117 $ - $ 4,052,979 $ 15,190,077 $ 6,087,507 $ 1,784,465 $ 570,000 $ 1,500,000 $ 3,914,787 Proceeds from sale of capital assets 1,210,046 689 1,587,216 - - 774,822 74,565 799,497 99,434 896,818 Payment to escrow agent (2,456,207) - - - - - - - Insurance proceeds - - 120,960 - - - - - - - Transfers in 9,602,095 16,181,590 11,601,871 13,507,521 6,908,259 8,170,998 8,274,929 13,628,444 14,083,970 16,789,516 Transfers out (10,235,909) (16,646,397) (12,579,599) (12,529,754) (10,168,616) (11,303,463) (10,398,364) (16,321,156) (18,802,923) (18,715,306) Total other financing sources(uses) $ 590,025 $ 9,681,999 $ 730,448 $ 5,030,746 $ 11,929,720 $ 3,729,864 $ (264,405) $ (1,323,215) $ (3,119,519) $ 2,885,815 Net change in fund balance $ (6,803,642) $ (5,531,942) $ (9,419,094) $ (2,630,317) $ 798,096 $ 2,780,201 $ (2,176,881) $ (2,508,755) $ (3,947,282) $ 4,229,239 Debt service as a percentage of noncapital expenditures 3.7% 3.9% 4.5% 4.6% 4.0% 3.4% 3.8% 7.1% 6.9% 8.7% -149- Schedule 5 City of Lansing Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Fiscal Total Assessed Year Personal Total Taxable Direct Estimated Value as a Ended Residential Commercial Industrial Property Assessed Tax Actual Percentage of June 30, Property Property Property Valuation Valuation Rate Value Actual Value 2002 $ 1,036,176,015 $ 632,166,043 $138,185,676 $ 289,408,415 $ 2,095,936,149 $16.46 $ 4,191,872,298 50.0% 2003 1,088,980,029 661,752,030 157,367,277 303,247,208 2,211,346,544 15.93 4,422,693,088 50.0% 2004 1,135,019,090 686,609,099 178,744,095 287,439,600 2,287,811,884 15.93 4,575,623,768 50.0% 2005 1,196,695,728 702,969,958 175,906,035 288,421,700 2,363,993,421 15.88 4,727,986,842 50.0% 2006 1,266,935,505 730,413,466 180,564,805 251,293,200 2,429,206,976 15.88 4,858,413,952 50.0% 2007 1,354,989,247 728,343,561 195,703,073 221,858,408 2,500,894,289 15.88 5,001,788,578 50.0% 2008 1,437,051,392 765,233,437 192,915,386 223,995,750 2,619,195,965 15.83 5,238,391,930 50.0% 2009 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 4,893,939,098 50.0% (1)tax rates are per$1,000 of assessed value -150- Schedule 6 City of Lansing Direct and Overlapping Property tax Rates Last Ten Fiscal Years (rate per$1,000 of assessed value) Fiscal City Direct Rates Overlapping Rates Year Ended Tax Operating Service City County School State College Other June 30, Year Millage Millage Millage Millage Millage Education Millage Millage Total 2002 2001 14.40 2.06 16.46 7.61 19.10 6.00 3.89 7.59 60.65 2003 2002 14.90 1.03 15.93 8.11 19.01 6.00 3.87 8.34 61.26 2004 2003 14.90 1.03 15.93 8.11 19.06 5.00 3.85 8.89 60.84 2005 2004 14.90 .98 15.88 8.10 20.65 6.00 3.84 8.83 63.30 2006 2005 14.90 .98 15.88 8.18 20.40 6.00 3.81 8.78 63.04 2007 2006 14.95 .93 15.88 8.72 20.32 6.00 3.81 9.15 63.88 2008 2007 14.95 .88 15.83 9.41 20.18 6.00 3.81 8.15 63.38 2009 2008 15.01 .82 15.83 10.83 20.15 6.00 3.81 9.04 65.66 2010 2009 15.44 .26 15.70 8.84 19.95 6.00 3.81 9.93 64.23 2011 2010 15.44 .26 15.70 8.84 19.95 6.00 3.81 9.93 64.23 (1) rates for Ingham County and Lansing School District only (2)since 1995 this is the Non-homestead rate (3) includes Intermediate School, Airport Authority, Capital Area Transit Authority and Capital Area District Library(began in FY 98) -151- Schedule 7 City of Lansing Principal Property Tax Payers Last Ten Fiscal Years 2011 2010 2009 2008 2007 Percentage Percentage Percentage Percentage Percentage Taxable of Total Taxable of Total Taxable of Total Taxable of Total Taxable of Total Assessed Assessed Assessed Assessed Assessed Assessed Assessed Assessed Assessed Assessed Taxpayer Valuation Rank Valuation Valuation Rank Valuation Valuation Rank Valuation Valuation Rank Valuation Valuation Rank Valuation General Motors LLC $81,853,800 1 3.49% $20,222,572 5 0.76% Jackson National Life Insurance Company 33,218,050 2 1.42% 33,598,974 2 1.26% $38,430,144 2 1.45% $36,738,583 2 1.40% $33,130,261 2 1.26% Consumers Energy 23,091,635 3 0.98% 22,660,900 3 0.85% 22,249,503 3 0.84% 22,168,948 4 0.85% 21,628,281 4 0.83% Demmer Corporation 15,900,500 4 0.68% 17,254,600 6 0.65% 13,829,400 7 0.52% ComCast of Michigan L L C 12,210,500 5 0.52 Lansing Retail Center LLC 11,231,500 6 0.48% 12,000,900 7 0.45% 14,032,728 6 0.53% 13,441,453 7 0.51% 13,139,375 8 0.50% State of Michigan 10,044,300 7 0.43 Blue Cross Blue Shield of Michigan 8,988,200 8 0.38% 9,787,000 10 0.37 Heart of the City Assoc 7,921,400 9 0.34% 10,341,600 9 0.39% 10,527,474 10 0.40% 10,290,786 10 0.39% Sprint Spectrum L.P. 7,150,200 10 0.30% 8,974,000 10 0.34% 10,693,700 9 0.41% 14,526,841 6 0.55% General Motors Corp. 97,245,402 1 3.66% 130,243,563 1 4.90% 134,702,101 1 5.14% 133,897,648 1 5.11 Delta Township Utilities 20,259,900 4 0.76% 19,875,800 4 0.75% 22,415,570 3 0.86% 25,381,733 3 0.97% Trappers Cove LTD Partners 11,129,000 8 0.42% 12,952,449 8 0.49% 12,854,463 8 0.49% 12,565,459 9 0.48% River Street Triangle LLC 10,950,800 9 0.41 Accident Fund Company 14,178,118 5 0.53% 14,467,925 6 0.55% 13,202,404 7 0.50% Michigan Strategic Fund ' 19,115,577 5 0.73% 18,764,936 5 0.72% 525 Redevco Inc Cricket Communications Victor IV Partnership Data furnished from City of Lansing Assessor formerly Capital Outlook LLC continued -152- Schedule 7 City of Lansing Principal Property Tax Payers(Concluded) Last Ten Fiscal Years 2006 2005 2004 2003 2002 Percentage Percentage Percentage Percentage Percentage Taxable of Total Taxable of Total Total of Total Total of Total Total of Total Assessed Assessed Assessed Assessed Assessed Assessed Assessed Assessed Assessed Assessed Taxpayer Valuation Rank Valuation Valuation Rank Valuation Valuation Rank Valuation Valuation Rank Valuation Valuation Rank Valuation General Motors LLC Jackson National Life Insurance Company $32,393,347 2 1.37% $ 31,901,307 2 1.35% $ 31,786,400 2 1.39% $ 27,653,500 2 1.25% $ 33,398,500 2 1.59% Consumers Energy 21,227,570 3 0.90% 21,840,336 5 0.92% 22,043,400 5 0.96% 21,326,600 5 0.96% 28,554,300 3 1.36% Demmer Corporation ComCast of Michigan L L C Lansing Retail Center LLC 12,670,707 7 0.54% 12,266,173 6 0.52% 15,544,200 6 0.68% 14,750,900 6 0.67% 14,584,800 6 0.70% State of Michigan Blue Cross Blue Shield of Michigan Heart of the City Assoc 9,923,613 10 0.42% 9,606,596 10 0.41% 11,438,900 10 0.52% 11,593,000 9 0.55% Sprint Spectrum L.P. 12,932,365 6 0.55% 14,089,100 8 0.60% 13,454,600 8 0.59% 11,877,000 9 0.54% General Motors Corp. 161,917,774 1 6.85% 205,316,035 1 8.69% 223,100,800 1 9.75% 228,595,000 1 10.34% 216,957,400 1 10.35% Delta Township Utilities 12,999,700 5 0.55% Trappers Cove LTD Partners 12,117,127 8 0.51% 11,730,037 9 0.50% 13,198,200 10 0.58% 12,881,700 8 0.58% 12,364,300 8 0.59% River Street Triangle LLC Accident Fund Company 11,921,155 9 0.50% 11,061,457 7 0.47% 13,724,200 7 0.60% 13,108,100 7 0.59% 12,815,200 7 0.61 Michigan Strategic Fund ' 18,095,407 4 0.77% 17,517,336 4 0.74% 23,029,300 4 1.01% 23,811,500 4 1.08% 20,900,100 5 1.00% 525 Redevco Inc - 26,573,652 3 1.12% 25,976,200 3 1.14% 26,854,700 3 1.21% 24,586,400 4 1.17% Cricket Communications 13,391,600 9 0.59% Victor IV Partnership 9,408,300 10 0.45% Data furnished from City of Lansing Assessor formerly Capital Outlook LLC -153- Schedule 8 City of Lansing Property Tax Levies and Collections Last Ten Fiscal Years Collected within the Fiscal Year of the Levy Total Collections to Date Taxes Levied Current Percent of Delinquent Total Collections forthe Tax Levy Tax Tax as a Percent 30-Jun Fiscal Year Collection Collected Collection Collection of Levy 2002 $ 36,357,748 $ 36,208,985 99.59% $ 61,333 $ 36,270,318 99.76% 2003 37,310,656 37,041,662 99.28% 101,223 37,142,885 99.55% 2004 38,267,514 37,826,436 98.85% 59,200 37,885,636 99.00% 2005 40,051,303 39,429,093 98.45% 140,123 39,569,216 98.80% 2006 41,261,397 41,022,735 99.42% 83,419 41,106,154 99.62% 2007 42,627,042 42,516,696 99.74% 107,322 42,624,018 99.99% 2008 44,286,657 44,125,517 99.64% 143,782 44,269,299 99.96% 2009 45,567,556 45,468,639 99.78% 70,347 45,538,986 99.94% 2010 44,997,919 44,844,495 99.66% 27,923 44,872,418 99.72% 2011 41,460,916 41,375,354 99.79% - 41,375,354 99.79% 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 -154- Schedule 9 City of Lansing Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities Business-Type Activities General Special General Total Percentage Fiscal Obligation Assessment Lease Obligation Revenue Lease Primary of Personal Per Year Bonds Debt Purchases Loans Bonds Bonds Purchases Loans Government Income Capita Population 2002 $ 33,668,000 $ 90,000 $ 11,266,000 $ 650,000 $ 123,022,000 $ 32,705,000 $ $ $201,401,000 9.44%(2) $ 1,691 119,100 2003 29,553,133 65,000 11,043,847 534,329 129,302,048 29,230,000 199,728,357 9.37%(2) 1,677 119,100 2004 25,078,133 45,000 9,858,752 408,283 158,303,225 55,375,000 4,179,649 253,248,042 11.88%(2) 2,126 119,100 2005 13,320,000 35,000 8,396,154 1,543,195 165,029,785 51,710,000 4,180,000 244,214,134 11.46%(2) 2,050 119,100 2006 17,245,000 25,000 7,351,126 1,409,844 168,824,004 47,905,000 4,180,000 246,939,974 11.59%(2) 2,073 119,100 2007 19,845,000 10,000 15,721,844 1,772,049 165,173,386 43,955,000 4,180,000 250,657,280 11.77%(2) 2,105 119,100 2008 20,624,100 - 14,037,885 1,534,822 182,419,608 41,125,000 4,180,000 263,921,415 12.40%(2) 2,216 119,100 2009 17,640,000 12,394,082 1,290,479 194,429,701 38,285,000 4,180,000 268,219,262 12.60%(2) 2,252 119,100 2010 26,152,000 10,925,689 1,038,804 202,818,098 35,445,000 4,180,000 280,559,591 13.18%(2) 2,356 119,100 2011 27,687,000 9,564,693 779,580 200,539,634 32,565,000 1,574,209 272,710,116 12.29%(3> 2,386 114,297 (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 -155- Schedule 10 City of Lansing Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years Debt Payable From Ratio of Fiscal Debt Enterprise Net Bonded Net Year Service Revenues Debt to Bonded Ended Taxable Gross Bonded Monies &Special Net Bonded Taxable Debt per 30-Jun Population(1)(5) Value(3) Debt(2)(4) Available Assessments Debt Value Capita 2002 119,128 $ 2,095,936,149 $ 135,999,133 $ 28,496 $ 102,232,751 $33,737,886 0.0161 $ 283 2003 119,128 2,211,346,544 140,043,000 7,524 110,419,899 29,615,577 0.0134 249 2004 119,128 2,287,811,884 166,581,000 42,852 145,505,724 21,032,424 0.0092 177 2005 119,128 2,363,993,421 178,349,785 4,400 165,029,785 13,315,600 0.0056 112 2006 119,128 2,429,206,976 186,094,004 88,826 168,849,004 17,156,174 0.0071 144 2007 119,128 2,500,894,289 185,028,386 309,363 165,183,386 19,535,637 0.0078 164 2008 119,128 2,619,195,965 203,043,708 256,144 182,419,608 20,367,956 0.0078 171 2009 119,128 2,658,126,184 212,069,701 186,636 194,429,701 17,453,364 0.0066 147 2010 119,128 2,662,792,292 228,970,098 126,434 202,818,098 26,025,566 0.0098 218 2011 114,297 2,446,969,549 230,666,786 46,029 202,979,786 27,640,971 0.0113 242 (1) Source:2000 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 year (4) the amount reported in 2010 has been changed for 2011 presentation (5) Source 2010 Census by the U.S. Census Bureau; used in 2011 -156- Schedule 11 City of Lansing Direct and Overlapping Governmental Activities Debt As of June 30, 2011 Net General Obligation Bonded Amount Name of Debt %Applicable Applicable Governmental Unit Outstanding to City to City Net Direct- City $ 27,640,971 100.00% $ 27,640,971 Share of County-Issued Bonds Joint Building Authority $ 3,906,820 100.00% $ 3,906,820 Drain Commission 204,120 100.00% 204,120 Overlapping Debt Eaton Intermediate School District 1,275,000 0.60% $ 7,650 Ingham Intermediate School District 2,500,000 24.93% 623,250 Waverly School District 33,040,000 0.24% 79,296 Lansing School District 58,895,000 82.11% 48,358,685 East Lansing School District 62,474,059 3.67% 2,292,798 Holt School District 90,345,177 2.65% 2,394,147 Ingham County 40,249,634 28.91% 11,636,169 Eaton County 35,357,095 1.80% 636,428 Lansing Community College 54,705,000 20.75% 11,351,288 Okemos School District 20,607,000 2.76% 568,753 Mason School District 21,175,000 0.10% 21,175 Grand Ledge School District 69,805,000 1.26% 879,543 Total Overlapping Debt 78,849,181 Total Direct and Overlapping Debt $ 110,601,092 Excludes Michigan Transportation Fund Bonds, Unlimited Tax Bonds, Pollution Abatement Bonds, and Revenue Bonds (2) Overlapping debt is the portion of other public debt for which a City taxpayer is liable in addition to the Direct Debt of the City -157- Schedule 12 Legal Debt Margin Calculation for Fiscal Year 2011 City of Lansing Legal Debt Margin Information Assessed value,real and personal property $2,536,356,800 Last Ten Fiscal Years Assessed value equivalents 153,400,878 Total valuation 2,689,757,678 Legal debt margin Debt limitation-10 percent of total valuation 268,975,768 Debt applicable to limit Total City Bonded Debt 263,231,786 Add City Share: Drain Commission-County Issued 204,120 Joint Building Authority-County Issued 3,906,820 Brownfield Redevelopment Authority 820,000 TIF Supported Bonds 14,666,080 282,828,806 Less: Special Assessment Bonds Michigan Transportation(MTF)Bonds (6,225,000) Sewage Disposal Revenue Bonds (32,565,000) Pollution Abatement(CSO Project)Bonds (143,114,943) (181,904,943) Total net debt applicable to limit 100,923,863 Legal debt margin $ 168,051,905 Fiscal Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Debt limit $256,314,667 $273,340,110 $289,486,027 $ 302,811,105 $314,307,611 $324,987,531 $318,810,868 $ 298,581,799 $298,052,683 $268,975,768 Total net debt applicable to limit 73,872,709 70,893,614 87,171,139 75,882,359 103,095,986 84,276,312 87,966,365 79,513,756 98,368,804 100,923,863 Legal debt margin $182,441,958 $202,446,496 $202,314,888 $ 226,928,746 $211,211,625 $240,711,219 $230,844,503 $ 219,068,043 $199,683,880 $168,051,905 Total net debt applicable to the limit as a percentage of debt limit 28.82% 25.94% 30.11% 25.06% 32.80% 25.93% 27.59% 26.63% 33.00% 37.52% -158- Schedule 13 City of Lansing Pledged-Revenue Coverage Last Ten Fiscal Years Sewage Disposal Bonds Direct Net Revenue Gross Operating Available for Debt Service Requirements Revenue Expenses(') Debt Service Principal Interest Total Coverage(2) 2002 $25,841,763 $ 10,592,681 $ 15,249,082 $ 3,190,000 $ 1,854,090 $ 5,044,090 3.02 2003 26,963,775 11,209,711 15,754,064 3,320,000 1,723,253 5,043,253 3.12 2004 26,196,518 11,543,509 14,653,009 3,475,000 1,723,253 5,198,253 2.82 2005 26,601,646 12,775,001 13,826,645 3,715,000 1,786,328 5,501,328 2.51 2006 27,932,464 12,867,761 15,064,703 3,805,000 2,036,736 5,841,736 2.58 2007 29,292,698 13,494,658 15,798,040 3,950,000 2,152,990 6,102,990 2.59 2008 29,356,299 15,997,449 13,358,850 2,830,000 2,002,400 4,832,400 2.76 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 Operating expenses less depreciation (2) Coverage is defined as net revenue available for debt service divided by debt service requirements -159- Schedule 14 City of Lansing Demographic and Economic Statistics Last Ten Fiscal Years Per capita Personal Personal Median School Unemployment Labor Year Population(') Income Income(2) Age(') Enrollment(4) % Rate(5) Force(5) 2002 119,100 $ 2,133,325,472 $ 17,912 31.72 17,490 5.6 67,700 2003 119,100 2,132,614,363 17,906 31.88 17,600 6.7 65,325 2004 119,100 2,131,903,492 17,900 32.04 16,927 7.0 63,750 2005 119,100 2,131,192,857 17,894 32.20 16,201 9.0 68,041 2006 119,100 2,130,460,800 17,888 32.36 16,014 8.4 67,023 2007 119,100 2,129,750,646 17,882 32.52 15,178 8.9 66,224 2008 119,100 2,129,040,730 17,876 32.68 14,475 10.2 65,833 2009 119,100 2,128,331,049 17,870 32.84 14,482 16.2 66,822 2010 119,100 2,127,621,606 17,864 32.92 14,098 15.0 66,602 2011 114,297 2,218,237,360 19,408 30.4 13,465 13.1 65,708 (') Source: U.S. Census Bureau (2) Source: personal income for 2000 and 2005 from the U.S.Census Bureau; other years were extrapolated from 2000 and 2005 (3) Source: 2000 data from U.S. Census Bureau. Data for other years estimated by City of Lansing Finance Department (4) Source: Lansing School District (5)Source: Michigan Department of Career Development: Employment Service Agency- Labor Market Information -160- Schedule 15 City of Lansing Principal Employers, June 30,2011 2011 2010 2009 2008 Percentage Percentage Percentage Percentage of Total City of Total City of Total City of Total City Employer Employees 11l Rank Employment 12) Employees 11i Rank Employment 12) Employees ill Rank Employment Employees ill Rank Employment State of Michigan 14,355 1 6.50% 14,355 1 6.55% 14,355 1 6.72% 14,355 1 6.52% Michigan State University 11,218 2 5.08% 11,218 2 5.12% 10,500 2 4.91% 10,500 2 4.77% Sparrow Health System 7,400 3 3.35% 7,400 3 3.38% 5,500 3 2.57% 6,000 4 2.72% General Motors 3,688 4 1.67% 3,688 4 1.68% 5,000 4 2.34% 6,300 3 2.86% Lansing Community College 3,180 5 1.44% 3,180 5 1.45% 3,180 5 1.49% 3,180 5 1.44% Ingham Regional Medical Center 2,500 6 1.13% 2,500 6 1.14% 2,500 6 1.17% 2,500 6 1.13% Lansing School District 2,106 7 0.95% 2,106 7 0.96% 2,106 7 0.99% 2,106 7 0.96% Meijer 2,000 8 0.91% 2,000 8 0.91% 1,800 8 0.84% 2,000 8 0.91% Auto Owners Insurance 1,500 9 0.68% 1,500 9 0.68% 1,400 10 0.66% 1,500 9 0.68% Peckham,Inc. 1,400 10 0.63% 1,400 10 0.64% 1,540 9 0.72% 1,400 10 0.64% Greater Lansing Metropolitan Area Employment 220,759 219,147 213,650 220,300 continued Data is representative of the Greater Lansing Region (2)Source:Michigan Department of Career Development: Employment Service Agency-Labor Market Information Data available back six years only -161- Schedule 15 City of Lansing Principal Employers,(Concluded) June 30,2011 2007 2006 Percentage Percentage of Total City of Total City Employees ill Rank Employment Employees(' Rank Employment 14,355 1 6.24% 14,355 1 6.09% 10,500 2 4.56% 10,500 2 4.45% 6,000 4 2.61% 6,000 4 2.54% 6,300 3 2.74% 6,300 3 2.67% 3,180 5 1.38% 3,180 5 1.35% 2,500 6 1.09% 2,500 6 1.06% 2,106 7 0.92% 2,106 7 0.89% 2,000 8 0.87% 2,000 8 0.85% 1,500 9 0.65% 1,500 9 0.64% 1,400 10 0.61% 1,400 10 0.59% 230,075 235,844 -162- Schedule 16 City of Lansing Full-time Equivalent City Governmental Employees by Function/Program June 30,2011 Function/Program 2011 2010 2009 2008 2007 2006 General Government City Council 11 11 11 11 11 11 Mayor's Office 5 5 5 5 5 7 City Clerk 6 7 7 7 7 7 54-A District Court 50 53 53 53 55 55 City Attorney's Office 11 12 12 12 12 11 City TV 2 2 2 2 2 2 Internal Auditor 1 1 1 1 1 2 Human Resources 11 12 13 14 14 (1) 12 Finance Accounting/Budget/Purchasing 14 16 17 16 18 (1) 21 Tax Services 22 24 25 26 29 30 Information Technology 14 15 17 18 18 18 Property Management 20 21 23 24 26 (3) 28 Fleet Management 29 30 31 33 37 (2) 20 99 106 113 117 128 117 Planning&Neighborhood Development Administration 2 2 2 2 2 2 Code Compliance 16 16 16 17 19 15 Building Safety 15 15 15 15 16 17 Planning 5 5 4 5 7 7 Development 9 9 10 10 10 11 Parking&Transportation 20 (5) 40 41 41 43 49 66 87 88 90 97 101 Police 327 344 342 341 338 339 Fire 207 218 219 219 219 220 Public Services Administration&Engineering 21 17 18 18 18 19 Operations&Maintenance 135 (5) 110 113 113 119 122 Service Garage - - - - (2) 17 Wastewater 41 44 50 50 51 61 197 171 181 181 188 219 Human Relations&Community Services 5 5 6 8 9 9 Parks&Recreation Administration&Design 5 7 7 8 8 9 Grounds&Forestry (5) 27 31 32 32 (2) 32 Leisure&Special Recreation 12 15 19 17 19 (3) 20 Cemeteries 1 3 4 4 5 5 Golf/Ice Arena 4 4 4 4 4 6 Zoo(4) - 18 19 22 56 65 65 86 91 1,020 1,090 1,118 1,126 1,172 1,203 Source: The City of Lansing In FY 2007,the following restructuring of departments occurred: (1)A payroll position was transferred from Finance to Human Resources (2)Operations of the City's three fleet garages was consolidated in Finance (3)Four custodial positions were transferred from Parks&Recreation to Finance (4)On July 1,2007,Potter Park Zoo employees were transferred to Ingham County (5)Grounds Maintenance positions were moved from Parks&Recreation and Planning&Neighborhood Development and consolidated with Public Service staff. -163- Schedule 17 City of Lansing Operating Indicators by Function/Program Fiscal Year ended June 30,2011 Function/Program 2011 2010 2009 2008 2007 2006 Public Safety Fire Department responses 16,974 16,659 15,852 15,780 15,267 14,869 EMS related 14,628 14,398 13,447 13,151 12,779 12,152 Fire related 2,346 2,261 2,405 2,629 2,488 2,117 Police Department responses 78,112 87,724 89,958 87,634 97,466 87,551 Arrests 8,858 11,644 11,559 12,810 13,260 7,479 Traffic violations 15,585 18,297 20,122 25,398 29,047 30,948 Public Works Potholes filled 32,918 24,945 43,601 40,790 28,122 36,522 Streets resurfaced(miles) 8.99 20.70 16.20 20.92 22.11 27.16 Recreation Recreation participation 66,254 70,529 39,060 37,783(') 41,069 38,878 Pavilion rentals 161 288 315 341 254 255 Sewage Disposal Average amount processed daily(gal) 12.83 million 15.01 million 18.15 million 16.73 million 16.00 million 15.00 million Parking System Average number of monthly permits 3,122 3,480 3,783 4,059 3,905 4,073 Parking tickets issued 45,176 63,610 66,183 57,153 75,637 82,221 Cemetery Lots sold 143 142 119 98 114 104 Golf Annual rounds played 26,084 30,936 41,588 43,605 2 59,244 57,256 Garbage and Rubbish Yards sent to landfill 20,334 21,805 29,322 29,869 30,402 30,517 Recycling Recycled goods sold(tons) 2,446 2,163 2,591 2,818 2,269 2,441 Yards composted 15,725 21,819 21,871 21,928 17,189 21,304 Source: The City of Lansing Data available back six years only (') The addition of the Southside Community Center,with a pool,resulted in a large increase in recreation participation in FY 2010 (2) Two golf course were closed in FY 2008 with one of those being converted to a driving range (3) Source: City of Lansing -164- Schedule 18 City of Lansing Capital Asset Statistics by Function/Program June 30,2011 Function/Program 2011 2010 2009 2008 2007 2006 Public Safety Police Stations 3 3 3 3 3 3 Police Patrol Units 58 61 61 58 55 55 Fire Stations 8 9 9 9 9 9 Public Works Streets(miles) 410.80 410.63 410.15 410.15 410.15 409.89 Traffic signals 208 203 196 203 188 194 Recreation Park acreage 2,422.63 2,422.63 2,422.63 2,422.63 2,219.63 2,219.63 Playgrounds 71 71 82 82 80 76 Baseball/softball fields 61 61 61 61 61 61 Soccer/football fields 6 6 6 6 6 6 Community centers 4 4 4 4 4 4 Sewage Disposal Sanitary sewers(miles) 359 357.2 353.5 347.4 341.0 338.0 Storm sewers (miles) 234 232.6 229.9 225.1 220.0 217.0 Combined sewers(miles) 187.6 190.5 191.8 197.4 203.0 208.0 Parking System Ramps 4 4 4 6 6 5 Lots 15 16 16 15 15 15 Meters 2,452 2,493 2,493 2,489 2489 2,489 Cemetery Number of cemeteries 3 3 3 3 3 3 Golf Number of courses 1 1 1 1 b 3 3 Acreage 115 115 115 115 b 318 318 Garbage and Rubbish Refuse collection trucks 22 18 16 21 21 20 Recycling Recycling trucks 9 10 10 10 10 10 Potter Park Zoo Number of animals N/A N/A N/A N/A a 398 403 Source: The City of Lansing Data available back six years only a.Zoo operations were transferred to Ingham County in FY2008 b.Two municipal golf courses were non-operational beginning in 2008 -165- CITY OF LANSING -166-