HomeMy WebLinkAbout2013 - Department of Finance - Comprehensive Annual Financial Report City of Lansing,
Michigan
cHI � �
Year Ended Comprehensive
June 30, 2013 K Annual Financial
Report
. •
Prepared by: Department of Finance
Interim Finance Director
Angela Bennett
Accounting Manager
Randy Endsley
CITY OF LANSING, MICHIGAN
Table of Contents
Page
INTRODUCTORY SECTION 1
Elected and Appointed Officers 2
Letter of Transmittal 3
Table of Organization 7
GFOA Certificate of Achievement 8
FINANCIAL SECTION 9
Independent Auditors' Report 11
Management's Discussion and Analysis 15
Basic Financial Statements
Government-wide Financial Statements:
Statement of Net Position 30
Statement of Activities 31
Fund Financial Statements:
Balance Sheet - Governmental Funds 36
Reconciliation of Fund Balances of Governmental Funds
to Net Position of Governmental Activities 37
Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds 38
Reconciliation of Net Changes in Fund Balances of Governmental Funds
to Change in Net Position of Governmental Activities 39
Statement of Revenues, Expenditures and Changes in
Fund Balances - Budget and Actual:
General Fund 40
State and Federal Programs Special Revenue Fund 42
Statement of Net Position - Proprietary Funds 44
Statement of Revenues, Expenses and Changes in Fund
Position - Proprietary Funds 45
Statement of Cash Flows - Proprietary Funds 46
Statement of Fiduciary Net Position - Fiduciary Funds 50
Statement of Changes in Fiduciary Net Position - Pension and
Other Postemployment Benefits Trust Funds 51
Combining Statement of Net Position - Discretely Presented Component Units 56
Combining Statement of Activities - Discretely Presented Component Units 57
Notes to Financial Statements 59
CITY OF LANSING, MICHIGAN
Table of Contents
Page
Required Supplementary Information
Schedule of Funding Progress - Employees' Retirement System 106
Schedule of Employer Contributions - Employees' Retirement System 106
Schedule of Funding Progress - Police and Fire Retirement System 107
Schedule of Employer Contributions - Police and Fire Retirement System 107
Schedule of Funding Progress - Other Postemployment Benefit Plans 108
Schedule of Employer Contributions - Other Postemployment Benefit Plans 108
Combining and Individual Fund Financial Statements and Schedules
Nonmajor Governmental Funds:
Combining Balance Sheet - Nonmajor Governmental Funds 110
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Governmental Funds 111
Combining Balance Sheet - Nonmajor Special Revenue Funds 114
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Special Revenue Funds 116
Schedule of Revenues, Expenditures and Changes in Fund
Balances - Budget and Actual - Nonmajor Special Revenue Funds 118
Combining Balance Sheet - Nonmajor Debt Service Funds 126
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Debt Service Funds 127
Combining Balance Sheet - Nonmajor Capital Projects Funds 130
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Capital Projects Funds 132
Combining Balance Sheet - Nonmajor Permanent Funds 136
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Permanent Funds 137
Nonmajor Enterprise Funds:
Combining Statement of Net Position - Nonmajor Enterprise Funds 140
Combining Statement of Revenues, Expenses and Changes in Fund
Position - Nonmajor Enterprise Funds 141
Combining Statement of Cash Flows - Nonmajor Enterprise Funds 142
Internal Service Funds:
Combining Statement of Net Position - Internal Service Funds 146
Combining Statement of Revenues, Expenses and Changes in Fund
Position - Internal Service Funds 147
Combining Statement of Cash Flows - Internal Service Funds 148
CITY OF LANSING, MICHIGAN
Table of Contents
Page
Agency Funds:
Combining Statement of Fiduciary Assets and Liabilities - Agency Funds 152
Combining Statement of Changes in Assets and Liabilities - Agency Funds 153
STATISTICAL SECTION (UNAUDITED) 155
TABLE
1 Net Assets / Net Position by Component 157
2 Change in Net Assets / Net Position 158
3 Fund Balances, Governmental Funds 160
4 Changes in Fund Balances of Governmental Funds 161
5 Assessed and Estimated Actual Value of Taxable Property 162
6 Direct and Overlapping Property Tax Rates 163
7 Profile of Ten Largest Ad Valorem Taxpayers 164
8 Property Tax Levies and Collections 165
9 Ratios of Outstanding Debt by Type 166
10 Ratios of General Bonded Debt Outstanding 167
11 Direct and Overlapping Governmental Activities Debt 168
12 Legal Debt Margin Information 169
13 Pledged-Revenue Coverage 170
14 Demographic and Economic Statistics 171
15 Principal Employers 172
16 Full-Time Equivalent City Governmental Employees by Function/Program 173
17 Operating Indicators by Function/Program 174
18 Capital Asset Statistics by Function/Program 175
INTRODUCTORY SECTION
1
CITY OF LANSING, MICHIGAN
ELECTED AND APPOINTED OFFICERS
For the Year Ended June 30, 2013
MAYOR
Virg Bernero
CLERK
Chris Swope
DISTRICT COURT JUDGES
Frank J. Deluca
Patrick F. Cherry
Charles F. Filice
Hugh B. Clarke, Jr.
Louise Alderson
CITY COUNCIL
AT LARGE BY WARDS
Brian Jeffries Jody Washington - 1st Ward
Kathie Dunbar Tina Houghton - 2nd Ward
Derrick Quinney A'Lynne Robinson - 3rd Ward
Carol Wood Jessica Yorko - 4th Ward
OFFICERS
William Fowler City Assessor
Janene McIntyre City Attorney
Antonia Kraus City Treasurer
Chad Gamble Chief Operating Officer
Angela Bennett Interim Finance Director
Randy Talifarro Fire Chief
Joan Jackson Johnson Human Relations Et Community Services,
Director of
Vacant Internal Auditor
Brett Kaschinske Parks Et Recreation, Director of
Terri Taylor Human Resources, Director of
Robert Johnson Planning Et Neighborhood Development,
Director of
Michael Yankowski Interim Police Chief
Chad Gamble Public Service, Director of
2
h
FINANCE DEPARTMENT
124 W. Michigan Ave., 0 'Floor
Lansing: Michigan 48933
(517)4834500
HI ®
December 20, 2013
Council President Carol Wood
and Council Members
10th Floor City Hall
Lansing, Michigan 48933-1694
Dear President Wood and Council Members:
We are pleased to submit the comprehensive annual financial report of the City of Lansing, Michigan for the
fiscal year ended June 30, 2013.
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 2012/2013 financial statements have been audited by Rehmann Robson, an independent
firm of licensed, certified public accountants. The goal of the independent audit is to provide reasonable
assurance that the financial statements for the City of Lansing for the fiscal year-ended June 30, 2013, are
free of material misstatement. The independent audit involved examining, on a test basis, evidence
supporting the amounts and disclosures contained in the financial statements; assessing the accounting
principles used; and evaluating the overall financial statement presentation. The independent audit
concluded with the rendering of an unmodified opinion on the statements, meaning the financial statements
present, fairly and accurately in all material respects, the financial position of the City in conformity with
Generally Accepted Accounting Principles ("GAAP"). The independent auditors repot is presented as the first
component of the financial section of this report.
This letter of transmittal is designed to complement the Management Discussion and Analysis (MDBA) and
should be read in conjunction with it. The Management Discussion and Analysis can be found immediately
following the Independent Auditor Report.
Profile of the City of Lansing
Serving as Michigan's capital since 1848, the City of Lansing was incorporated in 1859 and operates under
provisions of Public Act 279 of 1909, as amended (the "Home Rule City Act"). The City incorporates 34.7
square miles and is located in the lower middle of Michigan's Lower Peninsula and operates under a strong
mayor form of government established by 1978 Charter revision.
3
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, 2013, the City operated police headquarters and a
precinct with over 180 sworn police officers; six fire stations with a fire protection force of over 170; over
300 miles of sanitary sewers, 230 miles of storm sewers, and 180 miles of combined sewers; over 400 miles of
roads; 113 parks; a District Court; and support for human services and cultural events. The City's main
sources of revenue are property taxes, income taxes, State revenue sharing, Federal entitlement grants, and
charges for services, including utility billings.
Reporting Entity
The financial reporting entity (the City) includes all of the funds and of the primary government (i.e., the
City as legally defined), as well as its blended component 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 Et Public
Facilities Authority, Tax Increment Finance Authority, Brownfield Redevelopment Authority, and Smart Zone
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.
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.
Financial results and applicable policies affecting year-end results for the fiscal year-ended June 30, 2013
are discussed in the Management Discussion and Analysis (MDEtA), located immediately following the
Independent Auditor 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. Budgetary controls and limitations are noted in the Note Disclosure Section of the financial
statements.
4
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.
Economic Condition and Outlook
Acknowledging the need for comprehensive, integrated economic development efforts on a regional basis,
the City began contracting with the Lansing Economic Area Partnership (LEAP) this past year. It is expected
that this move will strengthen economic development efforts and opportunities, both for the City and the
region as a whole, while decreasing economic development costs to the City. Through this arrangement,
aggressive economic development activities have resulted in a number of economic projects that have
happened in 2013 and several more are slated to break ground in 2014:
Niowave has announced a 50,000-square-foot, $200 million medical isotope production facility in the City
of Lansing, resulting in the creation of 127 jobs with an average wage of$60,000. Construction is slated to
begin in the fall of 2014. This $3 billion cutting edge, pharmaceutical industry is produced primarily in
Europe and Canada, thus this facility is one of America's first. Niowave has now completed its Prototype
Development/Research and Development building, adding 25 jobs at average salary of $60,000 with over
$10 million in machinery and equipment.
Jackson National Life, a Fortune 500 company and the nation's #1 individual annuities company, has
announced that they will double the size of their national headquarters in the City, adding $114 million in
new structure as well as adding 1000 new, very high paying, white collar jobs. Construction should begin
in the spring of 2014.
General Motors announced the construction of a 400,000-square-foot, $40 million Logistics Center to be
built as part of their Grand River Lansing Car Assembly plant. 200 new jobs are expected to be created,
and the center is expected to be operational for 2015.
General Motors also announced the re-location of the Camaro production from Canada to the City of
Lansing's Grand River Car Assembly plant. This will move the plant from the current two, to three around-
the-clock, full shifts and more and is expected to result in the creation of 600 - 1,000 new jobs.
The downtown Knapps department store, a $36 million rehabilitation project that will create over 100
jobs as well as fully redeveloping an entire city block, is slated for full completion and opening in
February 2014. This building and block have been abandoned and unused for several decades. It will also
house the City's new Fashion Incubator, called the Runway, which is attracting interest from over 36
tenants across Michigan and has received its first sponsorship of $10,000.
The Market Place project's is currently under construction. This $10 million market rate, mixed
use/residential building is the City's first on its downtown riverfront. It will bring 80 units on line and is in
Phase I with two more phases to be completed in the next five years. It is slated to open in the late fall
of 2014.
The MidTown market rate, mixed use residential building's foundation is in place and will be completed
by early 2015. Located on Michigan Ave, at the border of Lansing, East Lansing and Michigan State
University, it is targeting the ever-growing Chinese population of Michigan State University, with nearly
100 units as well as a PNC bank branch on the first floor.
The "Red Cedar Renaissance" mixed use project was announced in 2013 and is set to begin in 2014. This
signature project was put together by one of North America's top developers, Continental Groups. The
$200 million, 1,000-j ob-and-resident project will develop the former City-owned Red Cedar Golf Course
and act as a catalyst for the entire Michigan Avenue corridor, which connects, Lansing, East Lansing, the
capitol building of Michigan and Michigan State University.
The publicly-owned utility Lansing Board of Water and Light completed and opened its $180 million co-
generation natural gas plant in Lansing's REO Town. It also moved its corporate headquarters and 180
employees to this new site, sparking a whole revitalization effort within the REO Town area of Lansing.
The plant recently received recognition by the Pew Institute as one of the "cleanest and most efficient"
energy facilities in the nation and "Best Project of the Year" by Engineering News-Record Midwest
magazine.
The Sabori project is rehabilitating and building a new, $3 million, mixed use development in Lansing's
Old Town.
5
The High Grade project will demolish a decades-old blighted building and silos in the City and construct a
new, efficient $2 million plant.
In partnership with the City, the Sault Ste. Marie Tribe of Chippewa Indians announced plans for a 125,000
squre-foot Kewadin tribal casino to be located next to the City's convention center. The casino is planned
to have 3,000 slot machines and 48 gambling tables and is projected to generate 1,500 jobs. Revenue
sharing from the operations of the casino are planned to fund four-year college scholarships for Lansing
School District graduates, modeled after the Kalamazoo Promise. The development has met some legal
challenges, but is progressing.
Lansing is an environment of high-growth and a good 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. Its economy is diverse. Its work force creative.
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, 2012. This was the 35th 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, as well as support by other departments. All those who contributed
to this document, especially Accounting Manager Randy Endsley, have our sincere appreciation for their
contributions made in the preparation of this report and in the financial management of the City. The 35th
consecutive GFOA award, recognizing their efforts, is well deserved indeed.
Sincerely,
Virg Bernero
Mayor
1
Angela Bennett
Interim Finance Director
6
CITY OF LANSING, MICHIGAN
Table of Organization
Citizens of Lansing
City Clerk City Council Mayor 54-A District Court
Interval City Attorneys Office of
Audit Office Comnvunity Media
Police Fire Pl & Eco c Public Parks& Humm Rdations
Nei bofhood Devel uxnt smice Recreation and conununity
Development Services
Patrol Suppre„ron Planning Eco--c Der-Corp- Road sidewalks Parks De,ApuW* ams Gtaw Writing srst-
Cnme lacxstrption Fre.,—uoa Zoning LEPFA $curets Treatment Recreation Progams Homan Sen•.Grants
Cou muntm Pohciug Emergency Mguv Code Compl-- Dower—L—u=g.luc. TmIrRecylmg Commu r Center Police Internal Im,
Deteanoa Howmg,Nerghbothoods TIFA Ground:Maintenance Ceroeterres
Buddmg Safety Engineering Golf
Parking Property bfaoff—t
Fleet
Finance L Human Resources
Treasury 1--Tax Recruitment
mg Tnining
Acc mung'Budget Payroll Labor Relations
Purcba:-g Paproll.menefits
Infotmatron Technology
Retirement Sere.
7
CITY OF LANSING, MICHIGAN
GFOA Certificate of Achievement
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Prescntcd to
City of Lansing
Michigan
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2012
Executive Director/CE0
8
FINANCIAL SECTION
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�a Re h m a n n 2330 East Paris Ave.,SE
PO Box 6547
Grand Rapids,MI 49516
Ph:616.975.4100
Fx:616.975.4400
www.rehmann.com
INDEPENDENT AUDITORS' REPORT
December 20, 2013
Honorable Mayor and
Members of the City Council
City of Lansing, Michigan
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-
type activities, the aggregate discretely presented component units, each major fund, and the
aggregate remaining fund information of the City of Lansing, Michigan (the "City"), as of and for the
year ended June 30, 2013, and the related notes to the financial statements, which collectively
comprise the City's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Independent Auditors'Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditors' judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentation
of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinions.
11
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, 2013, and the respective changes in financial position
and, where applicable, cash flows thereof and the respective budgetary comparison for the General
Fund and each major special revenue fund for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
Management's Discussion and Analysis and the Schedules of Funding Progress and Employer
Contributions for the pension and other postemployment benefit plans, as listed in the table of
contents, be presented to supplement the basic financial statements. Such information, although not a
part of the basic financial statements, is required by the Governmental Accounting Standards Board,
who considers it to be an essential part of financial reporting for placing the basic financial statements
in an appropriate operational, economic, or historical context. We have applied certain limited
procedures to the required supplementary information in accordance with auditing standards generally
accepted in the United States of America, which consisted of inquiries of management about the
methods of preparing the information and comparing the information for consistency with
management's responses to our inquiries, the basic financial statements, and other knowledge we
obtained during our audit of the basic financial statements. We do not express an opinion or provide
any assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City's basic financial statements. The combining and individual fund financial
statements and schedules 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 are the responsibility of
management and were derived from and relate directly to the underlying accounting and other records
used to prepare the basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the basic financial statements or to the basic financial statements themselves,
and other additional procedures in accordance with auditing standards generally accepted in the
United States of America. In our opinion, the combining and individual fund financial statements and
schedules are fairly stated, in all material respects, in relation to the basic financial statements as a
whole.
The introductory section and statistical tables have not been subjected to the auditing procedures
applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or
provide any assurance on them.
12
Other Reporting Required by Government Auditing&andards
In accordance with Government Auditing Standards, we have also issued, under separate cover, our
report dated December 20, 2013, on our consideration of the City of Lansing, Michigan's internal
control over financial reporting and our tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements and other matters. The purpose of that report is to
describe the scope of our testing of internal control over financial reporting and compliance and the
results of that testing, and not to provide an opinion on the internal control over financial reporting or
on compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering the City's internal control over financial reporting and compliance.
uc
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MANAGEMENT'S DISCUSSION AND ANALYSIS
15
CITY OF LANSING, MICHIGAN
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, 2013 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.
Financial Highlights
Total government-wide assets of the City exceeded its liabilities at the close of the fiscal year by $384.2 million
(reported as net position), a decrease of $13.8 million from fiscal year 2011/2012. Component units of the City
reported a deficit of net position of $34.3 million, a decrease of $763,181 from the previous year. This
component unit deficit is planned to be covered by future tax revenue captures in the TIFA component unit.
As of the close of the 2012/2013 fiscal year, the City's governmental funds reported combined ending fund
balances of$19.2 million. Of this, $7.1 million is legally restricted and/or unavailable to spend (i.e. amounts tied
up in inventories), and $7.0 million is committed for designated projects, leaving $5.0 million unassigned.
At the end of the fiscal year, unassigned fund balance for the General Fund, (including the amount internally
identified as a Budget Stabilization Fund), was $5.6 million, an increase of $435,496 from FY 2011/12. Please see
the "General Fund and Budgetary Highlights" section of this Management Discussion and Analysis for further
detail.
The business-type activities reported net position at year-end of$256.6 million, an increase of$2.5 million during
the year.
The City's total bonded and loaned debt was $247.8 million at June 30, 2013, a decrease of $9.9 million (or
3.8%), which represents the net difference between new issuances and payments. More detailed information
regarding these activities and funds can be found in footnote 10, Long-Term Debt.
Overview of the Financial Statements
This MDEtA is an introduction to the City's basic financial statements, which comprise three components: 1)
government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This
report also contains other required supplementary information in addition to the basic financial statements.
Government-Wide Financial Statements. These statements include all non-fiduciary assets and liabilities but
exclude assets and liabilities related to pensions. The Statement of Net Position and the Statement of Activities are
two financial statements that report information about the City, as a whole, and about its activities, which provide
measurements of long term trends that should help answer this question: Is the City, as a whole, better off or worse
off as a result of this year's activities? Unlike the governmental funds, the current year's revenues and expenses are
taken into account regardless of when cash is received or paid, known as "full accrual accounting".
The Statement of Net Position presents all of the City's assets and liabilities with the difference between the two
reported as "net position". Over time, increases and decreases in net position are an indicator of whether the City's
long term financial position is improving or deteriorating.
The Statement of Activities presents information showing how the City's net position changed during the most recent
fiscal year. All changes in net position are reported as soon as the underlying events giving rise to the change occur,
regardless of the timing of related cash flows. Therefore, revenues and expenses are reported in these statements for
some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused
vacation leave).
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CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
The Statement of Net Position 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 SmartZone.
These financial statements include two schedules that reconcile the amounts reported on the governmental fund
financial statements (modified accrual accounting) with governmental activities (full accrual accounting) on the
appropriate government-wide statements. The following summarizes the impact of transitioning from modified
accrual to full accrual accounting:
Capital assets used in governmental activities are not reported on governmental fund statements.
Certain revenues that are earned, but not available for use within the reporting period, are reported as revenues
for governmental activities, but are reported as deferred 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.
Bond discounts and premiums in the issuance of long term debt, are reported as expenditures in governmental
fund statements, but are capitalized and amortized in the government-wide statements.
Unless due and payable, long-term liabilities, such as capital lease obligations, compensated absences, 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.
Fund Financial Statements. The City's Major Funds are identified as its Sewage Disposal Fund, and it's Municipal
Parking System Fund, along with its General Fund and State and Federal Programs Fund. Data for the nonmajor funds
are combined into a single, aggregated presentation. A fund is a fiscal and accounting entity with a self-balancing set
of accounts that the City uses to keep track of specific sources of funding and spending for a particular purpose.
17
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
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 Municipal Parking Fund. Internal service funds are reported as
governmental activities on the government-wide statements.
Fiduciary Funds. The City acts as a trustee or fiduciary, for its employee pension plans. It is also responsible for
other assets that, because of a trust arrangement, can be used only for the trust beneficiaries. The City's
fiduciary activities are reported in separate Statements of Fiduciary Net Position and Changes in Fiduciary Net
Position. These funds, which include pension and other 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.
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.
18
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
Government-Wide Financial Analysis
The City's combined net position decreased $13.8 million over the course of this fiscal year's operations to a total of
$384.2 million. Net position of governmental activities decreased $16.3 million or 11.3%, and business-type activities
increased $2.5 million or 1.0%.
Net Position
Governmental Activities Business-type Activities Total
2013 2012 2013 2012 2013 2012
Current and other assets $ 45,903,914 $ 43,411,053 $ 68,710,568 $ 72,606,690 $114,614,482 $116,017,743
Capital assets, net 192,940,938 197,254,093 397,911,962 405,148,276 590,852,900 602,402,369
Total assets 238,844,852 240,665,146 466,622,530 477,754,966 705,467,382 718,420,112
Long-term liabilities 56,095,096 52,369,642 207,917,160 220,788,105 264,012,256 273,157,747
Other liabilities 55,132,372 44,419,526 2,077,592 2,803,746 57,209,964 47,223,272
Total liabilities 111,227,468 96,789,168 209,994,752 223,591,851 321,222,220 320,381,019
Net position
Net investment in
capital assets 154,372,604 163,723,249 212,682,278 209,584,457 367,054,882 373,307,706
Restricted 12,552,011 14,524,584 11,077,134 12,382,060 23,629,145 26,906,644
Unrestricted (39,307,231) (34,371,855) 32,868,366 32,196,598 (6,438,865) (2,175,257)
Total net position $127,617,384 $143,875,978 $256,627,778 $254,163,115 $384,245,162 $398,039,093
The largest component (95.5%) of the City's net position reflects its net investment in capital assets (e.g. land,
buildings, equipment, infrastructure, and others). Restricted net position is the next largest component, which
represents amounts subject to external restrictions such as bond covenants, City Charter, State legislation or
Constitutional provision. The remaining portion, unrestricted net position are resources that may be used at the City's
discretion, but often have limitations based on policy action.
19
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
The following condensed financial information was derived from the government-wide Statement of Activities and
reflects how the City's net position changed during the fiscal year:
Change in Net Position
Governmental Activities Business-type Activities Total
2013 2012 2013 2012 2013 2012
Program revenues
Charges for services $ 12,530,371 $ 18,376,030 $ 41,346,995 $ 41,682,398 $ 53,877,366 $ 60,058,428
Operating grants 29,322,435 31,928,983 1,193,571 1,331,737 30,516,006 33,260,720
Capital grants 3,124,288 260,656 - 2,683,657 3,124,288 2,944,313
General revenues
Taxes 68,519,592 61,449,930 - 68,519,592 61,449,930
State shared revenues 13,201,648 12,710,114 13,201,648 12,710,114
Unrestricted grants
and contributions 18,224,070 13,731,847 18,224,070 13,731,847
Unrestricted investment
earnings 58,588 69,265 356,467 271,067 415,055 340,332
Gain (loss)on sale of
capital assets - 123,066 - (1,300,561) - (1,177,495)
Total revenues 144,980,992 138,649,891 42,897,033 44,668,298 187,878,025 183,318,189
Expenses
General government 27,438,065 30,841,776 - - 27,438,065 30,841,776
Public safety 77,133,469 82,369,004 77,133,469 82,369,004
Public works 29,984,955 33,144,303 29,984,955 33,144,303
Recreation and culture 7,713,098 8,889,142 7,713,098 8,889,142
Community development 16,939,572 13,623,946 16,939,572 13,623,946
Interest on long-term debt 1,447,310 1,949,825 1,447,310 1,949,825
Sewage disposal system - - 26,159,576 26,836,597 26,159,576 26,836,597
Municipal parking system 8,126,036 9,491,376 8,126,036 9,491,376
Cemetery 633,050 639,000 633,050 639,000
Golf 888,825 810,372 888,825 810,372
Garbage and refuse - 1,558,024
collection 1,557,708 1,558,024 1,557,708 3,041,328
Recycling 3,650,292 3,041,328 3,650,292 3,041,328
Total expenses 160,656,469 170,817,996 41,015,487 42,376,697 201,671,956 213,194,693
Change in net position,
before transfers (15,675,477) (32,168,105) 1,881,546 2,291,601 (13,793,931) (29,876,504)
Transfers (583,117) (464,008) 583,117 464,008
Change in net position (16,258,594) (32,632,113) 2,464,663 2,755,609 (13,793,931) (29,876,504)
Net position:
Beginning of year 143,875,978 176,508,091 254,163,115 251,407,506 398,039,093 427,915,597
End of year $127,617,384 $143,875,978 $256,627,778 $254,163,115 $384,245,162 $398,039,093
20
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
Governmental Activities. The following chart depicts revenues of the governmental activities for the fiscal year:
Revenues - Governmental Activities
Fiscal Year Ending June 30, 2013
Property Tax and Special
Assessments Income Tax
26.7% 20.6%
Gain on Sale of Capital
Assets —- - -.
0.0%
Unrestricted Investment
Earnings Charges for Services
0.0% 8.6%
Unrestricted Grants and
Contributions Operating Grants and
12.6% Capital Grants and Contributions(restricted)
p 20.2%
State Shared Revenue Contributions
9.1% 2.2%
In total, Governmental Activity revenue increased $6.5 million from FY 2011/2012 to FY 2012/2013. Trends of the
major revenue categories are described in the following pargraphs. Total expenses for Governmental Activities
decreased $10.2 million during that time. $3.4 million of that decrease occured in the Public Safety category largely
due to the transfer of 911 Dispatch Center operations to Ingham County in June, 2012; without that transfer, Public
Safety expenses would have increased by $2.2 million. Governmental Activity expenses decreased from FY 2011/2012
to FY 2012/2013 in all other categories, with the exception of Community development and Interest on Long-term
Debt, due to budgeted decreases in operational expenditures in response to the effects of the Great Recession. The
increase Community Development expenses resulted from a Section 108, grant-secured development loan issued
during the course of the year, and the decrease in interest expense resulted from scheduled bond maturities.
Income taxes comprised 20.6%, or $29.9 million, of Governmental Activity revenue, 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.
Unrestricted Grants and Contributions account for the next-largest category of Governmental Activity Revenue,
comprising 21.7%, or $31.4 million, of revenues. Just-less-than-half of this category, $13.2 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. Equity payments from the independently-managed-and-operated Board of Water and
Light account for $16.1 million of the category, with remaining $2.1 million coming from payments from the State of
Michigan for a payment in lieu of tax for its fire protection for its properties, bad driver revenues, and reimbursement
of liquor license enforcement costs. An increase in the equity payment from the Board of Water and Light, as well as
increase in State Bad Driver revenue receipts, amounted to a $5.0 million increase in unrestricted grants and
contributions from FY 2011/2012 to FY 2012/2013.
21
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
Restricted Operating Grants and Contributions made up $29.3 million, or 20.2% of Governmental Activity revenue. In
this category, $11.3 million are recurring revenues from: State Gas Et 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 $18.0 million is attributable to non-entitlement grants.
Charges for Services are program-specific revenues generated for services provided. Governmental activity charges
for services decreased $5.9 million from FY 2011/2012 to FY 2012/2013, due to the fact that 911 Dispatch operations
were transferred to Ingham County in June, 2012. This transfer of operations also resulted a $5.6 million decrease in
Public Safety expenses from FY 2011/2012 to FY 2012/2013, which was, in the chart "Change in Net Positions" above,
partilally offset by $2.2 million in total Public Safety (police and fire) operational increases and a $2.0 million
decrease in Public Safety grant funding.
The following chart depicts expenses of the governmental activities for the fiscal year:
Expenses - Governmental Activities
Fiscal Year Ending June 30, 2013
Interest on Long-term
Community Debt
Development 0.9%
10.5% General Government
(administrative)
Recreation and Culture 17.1%
4.8%
0
Public Safety
48.0%
Public Works
18.7%
Business-type Activities. Net position of the business-type activities increased by $2.5 million during the fiscal year
to $256.6 million. The increase was mainly attributable to sewer system operations during the fiscal year which are
necessary to fund the debt associated with the Combined Sewer Overflow (CSO) program in future years.
Financial Analysis of the City's Funds
As the City completed the fiscal year, its governmental funds reported combined ending fund balances of $19.2
million. Of this, $7.1 million is legally restricted and/or unavailable to spend (i.e. amounts tied up in inventories),
and $7.0 million is committed for designated projects, leaving $5.0 million unassigned.
22
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
General Fund Budgetary Highlights
The FY 2012/2013 budget was adopted as a balanced budget, based on projected revenues, without any use of
reserves. The City budgeted a vacancy factor in its General Fund to account for anticipated positions that would
become vacant during the course of the year. Because vacancies that will occur within each department can not be
projected, the vacancy factor is budgeted in a "non-departmental" section of the General Fund and allocated to
various departments through a budget amendment during the year. The majority of budgetary changes between the
original and final budget are due to the allocation of the vacancy factor. Another significant budget amendment
funded the replacement of two fire trucks.
General Fund Revenues, in total, ended the fiscal year approximately $518,000 less than budgeted, a 0.5% variance.
General Fund expenditures, in total, were $4.5 million less than budgeted, due largely to position vacancies.
Approximately $3.0 million of expenditure residuals are committed for future-year use.
General Fund reserves, combined with the Budget Stabilization Fund (combined for financial statement purposes)
increased $3.3 million from FY 2011/2012 from $5.4 million to $8.7 million. As previously noted, $3.0 million is
committed for future-year use, and $85,138 is restricted, leaving an unassigned fund balance of $5.6 million, a
$435,496increase from FY 2011/2012.
The FY 2013/2014 budget, adopted at levels commensurate with projected decreases in property values and other
revenue levels experienced in FY 2012/2013, does not include any use of reserves.
Sewage Disposal Fund
Net position increased $4.7 million to $235.4 million in FY 2013, with $2.5 million of the increase due to the addition
of sewer system assets which will be depreciated over time. Unrestricted net position increased $2.2 million, from
$21.7 million to $23.9 million, which was attritable to the refinancing of an outstanding bond issuance during fiscal
year 2013 and from operations during the fiscal year which are necessary to fund the debt associated with the
Combined Sewer Overflow (CSO) program in future years.
Municipal Parking Fund
The Municipal Parking Fund net position decreased $1.7 million, from $19.2 million to $17.5 million. Unrestricted net
position also decreased $1.7 million, from $9.5 mllion to $7.8 million.
23
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
Capital Assets. At the end of the fiscal year 2013, the City had invested $590.9 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 7.
Capital Assets (Net of Depreciation)
Governmental Activities Business-type Activities Total
2013 2012 2013 2012 2013 2012
Land $ 25,690,735 $ 25,084,983 $ 13,483,909 $ 13,503,321 $ 39,174,644 $ 38,588,304
Land improvements 8,565,261 8,976,263 12,179,183 12,754,115 20,744,444 21,730,378
Buildings and improvements 51,236,128 54,304,128 105,232,796 95,812,441 156,468,924 150,116,569
Equipment 5,460,316 6,399,147 286,281 473,899 5,746,597 6,873,046
Infrastructure 96,698,897 102,158,566 258,219,955 233,737,519 354,918,852 335,896,085
Construction in progress 5,289,601 331,006 8,509,838 48,866,981 13,799,439 49,197,987
Total capital assets, net $192,940,938 $197,254,093 $397,911,962 $405,148,276 $590,852,900 $602,402,369
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 footnote 10 (Long-Term Debt) to the financial statements.
24
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
Outstanding Debt
2013 2012
Governmental activities
General obligation bonds $ 29,932,000 $ 25,727,000
Installment purchase contracts 2,807,838 8,193,616
Loans 6,246,743 512,577
Deferred amounts (172,930) (4,524)
Compensated absences 10,138,900 10,601,091
Workers compensation 6,986,062 7,131,238
Tax settlement 156,483 208,644
Total governmental activities 56,095,096 52,369,642
Business-type activities
General obligation bonds 182,127,578 192,125,645
Revenue bonds 25,030,000 29,525,000
Loans 1,702,664 1,637,177
Deferred amounts (1,676,990) (3,321,270)
Compensated absences 733,908 821,553
Total business-type activities 207,917,160 220,788,105
Total outstanding debt $264,012,256 $273,157,747
During the year, the City issued $4.4 million in State revolving loan fund debt for the City's Wet Weather (formerly
Combined Sewer Overflow/Sanitary Sewer Overflow) environmental program in the sewer (proprietary) fund. Also
during the fiscal year, $21.7 million of sewer debt, $7.9 million of parking system debt, and $6.7 million in General
Fund and Golf Fund debt were refinanced. The refinancings result in long-term savings over the remaining life of the
bonds of $2.5 million for the sewer fund, $2.0 million for the parking fund, $15,000 for the Golf fund, and $524,000
for the General Fund. More detailed information regarding these activities and funds can be found in footnote 10,
Long-Term Debt.
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 retiree
pension and healthcare costs, continues to place budgetary and fiscal constraints on the City of Lansing.
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 with the City's unions to contain the rising cost of healthcare, pension, and other compensation
costs.
The Mayor remains committed to directing the City in a fiscally responsible manner -- living within the City's available
resources, and not relying on reserves to balance the budget. For this reason, last fall Mayor Bernero appointed a
Financial Health Team composed of area business and community leaders to assess the city's financial challenges,
identify potential partnerships, and to make recommendations, both in the near and long-term. The Financial Health
Team report, issued in March of 2013, is available on the City's website at www.lansingmi.gov.
25
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
Lansing is expected to see another year of declining property values (see Property Tax analysis in the Governmental
Activities section of this Management Discussion and Analysis); however those losses are significantly less than the
past several years -- revenues are showing signs of stabilizing. Due to state limitations on property tax growth,
revenues are projected to grow at a slow pace in the near future, and the City needs to make continued investments
in its long-term liabilities and infrastructure needs. This makes regional partnerships and new models of doing
business all the more important going forward.
In this historic economic downturn, including the credit crisis in the private sector, the City has seen significant
economic development announcements (see Economic Condition and Outlook in the Transmittal Letter) and has
received national recognition. The City is poised to experience continued, significant economic growth in the next
several years.
Requests for Information
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.
26
BASIC FINANCIAL STATEMENTS
27
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28
GOVERNMENT-WIDE FINANCIAL STATEMENTS
29
CITY OF LANSING, MICHIGAN
Statement of Net Position
June 30, 2013
Primary Government
Governmental Business-type Component
Activities Activities Totals Units
Assets
Cash and investments $ 22,931,891 $ 13,202,009 $ 36,133,900 $ 2,377,272
Receivables, net 32,682,953 27,299,611 59,982,564 1,611,254
Internal balances (14,781,494) 14,781,494 - -
Due from primary government - - - 794,288
Due from component units 723,308 - 723,308 -
Inventories, prepaids and other assets 2,454,718 1,379,823 3,834,541 235,182
Restricted assets:
Cash and investments 1,892,538 11,987,575 13,880,113 1,591,303
Receivables, net - 60,056 60,056 -
Capital assets not being depreciated 30,980,336 21,993,747 52,974,083 -
Capital assets being depreciated, net 161,960,602 375,918,215 537,878,817 30,695
Total assets 238,844,852 466,622,530 705,467,382 6,639,994
Liabilities
Accounts payable and
accrued liabilities 15,839,189 894,305 16,733,494 2,038,885
Accrued interest payable 204,262 1,118,623 1,322,885 16,724,644
Unearned revenue 243,238 64,664 307,902 381,470
Due to component units 794,288 - 794,288 -
Due to primary government - - - 723,308
Long-term liabilities:
Due within one year 6,288,365 19,525,617 25,813,982 1,939,007
Due in more than one year 49,806,731 188,391,543 238,198,274 19,153,537
Net pension obligation 243,128 - 243,128 -
Net other postemployment benefit obligation 37,808,267 - 37,808,267
Total liabilities 111,227,468 209,994,752 321,222,220 40,960,851
Net position
Net investment in capital assets 154,372,604 212,682,278 367,054,882 27,962
Restricted for:
Public safety 699,949 - 699,949 -
Public works 4,705,164 4,705,164
Community development 3,512,886 3,512,886
State mandated programs 28,951 28,951
Donations 9,400 - 9,400
Debt service 1,892,716 10,112,271 12,004,987
Capital projects - 964,863 964,863
Endowments (nonexpendable) 1,702,945 - 1,702,945
Unrestricted (deficit) (39,307,231) 32,868,366 (6,438,865) (34,348,819)
Total net position (deficit) $ 127,617,384 $ 256,627,778 $ 384,245,162 $ (34,320,857)
The accompanying notes are an integral part of the financial statements.
30
CITY OF LANSING, MICHIGAN
Statement of Activities
For the Year Ended June 30, 2013
Program Revenues
Operating Capital Net
Charges Grants and Grants and (Expense)
Functions/Programs Expenses for Services Contributions Contributions Revenues
Primary government
Governmental activities:
General government $ 27,438,065 $ 6,162,713 $ 2,556,645 $ 562,854 $ (18,155,853)
Public safety 77,133,469 4,083,222 9,867,925 - (63,182,322)
Public works 29,984,955 1,622,738 8,688,324 2,561,434 (17,112,459)
Recreation and culture 7,713,098 594,349 247,718 - (6,871,031)
Community development 16,939,572 67,349 7,961,823 (8,910,400)
Interest on long-term debt 1,447,310 - - - (1,447,310)
Total governmental activities 160,656,469 12,530,371 29,322,435 3,124,288 (115,679,375)
Business-type activities:
Sewage disposal system 26,159,576 30,825,174 - - 47665,598
Municipal parking system 8,126,036 5,267,627 17193,571 (17664,838)
Cemetery 633,050 314,913 - (318,137)
Golf 888,825 373,000 (515,825)
Garbage and rubbish collection 1,557,708 1,131,659 (426,049)
Recycling 3,650,292 3,434,622 - (215,670)
Total business-type activities 41,015,487 41,346,995 17193,571 - 17525,079
Total primary government $ 201,671,956 $ 53,877,366 $ 30,516,006 $ 3,124,288 $ (114,154,296)
Component units
Brownfield redevelopment $ 1,504,818 $ - $ 630,475 $ - $ (874,343)
Community development 4,068,610 - - (4,068,610)
Recreation and culture 6,500,806 5,344,083 17102,795 (53,928)
Total component units $ 12,074,234 $ 5,344,083 $ 1,733,270 $ $ (4,996,881)
continued...
31
CITY OF LANSING, MICHIGAN
Statement of Activities
For the Year Ended June 30, 2013
Primary Government
Governmental Business-type Component
Activities Activities Totals Units
Changes in net position
Net (expense) revenues $(115,679,375) $ 1,525,079 $(114,154,296) $ (4,996,881)
General revenues:
Property taxes 38,668,837 - 38,668,837 4,226,805
Income taxes 29,850,755 29,850,755 -
Grants and contributions not
restricted to specific programs 31,425,718 31,425,718 -
Unrestricted investment earnings 58,588 356,467 415,055 6,895
Transfers - internal activities (583,117) 583,117 - -
Total general revenues and transfers 99,420,781 939,584 100,360,365 4,233,700
Change in net position (16,258,594) 2,464,663 (13,793,931) (763,181)
Net position (deficit), beginning of year 143,875,978 254,163,115 398,039,093 (33,557,676)
Net position (deficit), end of year $ 127,617,384 $ 256,627,778 $ 384,245,162 $ (34,320,857)
concluded
The accompanying notes are an integral part of the financial statements.
32
FUND FINANCIAL STATEMENTS
33
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34
CITY OF LANSING, MICHIGAN
Governmental Fund Financial Statements
Major Funds
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.
The State and Federal Programs fund accounts for all revenues received from miscellaneous grants
and local contributions. These revenues are used for projects as detailed in individual grant
applications.
Nonmajor Funds
Nonmajor governmental funds are presented, by fund type, beginning on the pages listed below:
Special revenue funds, page 114.
Debt service funds, page 126.
Capital projects funds, page 130.
Permanent funds, page 136.
35
CITY OF LANSING, MICHIGAN
Balance Sheet
Governmental Funds
June 30, 2013
State and Nonmajor
Federal Governmental
General Programs Funds Totals
Assets
Cash and cash equivalents $ 921,040 $ - $ 650,496 $ 1,571,536
Equity in pooled cash 11,420,007 376,214 6,451,619 18,247,840
Investments - - 425,957 425,957
Accounts receivable, net 16,880,504 154,212 17,034,716
Taxes receivable 1,036,180 - 1,036,180
Special assessments receivable - - 607,881 607,881
Loans receivable 49,269 1,385,000 1,434,269
Accrued interest receivable - - 2,078,617 2,078,617
Due from other funds 8,490,554 4,307,416 12,797,970
Due from component units 723,308 - 723,308
Interfund receivable 6,309 - - 6,309
Due from other governments 2,737,274 5,503,511 1,812,543 10,053,328
Inventories 38,346 - 966,331 1,004,677
Prepaids 37,392 - 1,875 39,267
Total assets $ 42,290,914 $ 5,928,994 $ 18,841,947 $ 67,061,855
Liabilities
Accounts payable $ 3,381,914 $ 1,867,187 $ 1,208,954 $ 6,458,055
Deposits payable - - 87,134 87,134
Accrued payroll 1,584,233 7,884 34,446 1,626,563
Retainage payable 827,405 - - 827,405
Indemnity bonds - - 5,050 5,050
Due to other funds 20,952,814 3,170,000 2,437,567 26,560,381
Due to component units 794,288 - - 794,288
Interfund payable - 6,309 6,309
Advance from other funds - - 469,327 469,327
Due to other governments 2,707,896 576,925 346,316 3,631,137
Deferred revenue 2,863,748 292,507 3,805,987 6,962,242
Other 483,542 - - 483,542
Total liabilities 33,595,840 5,914,503 8,401,090 47,911,433
Fund balances
Nonspendable 75,738 - 2,671,151 2,746,889
Restricted 9,400 14,491 4,354,492 4,378,383
Committed 2,976,408 - 4,035,145 7,011,553
Unassigned (deficit) 5,633,528 - (619,931) 5,013,597
Total fund balances 8,695,074 14,491 10,440,857 19,150,422
Total liabilities and fund balances $ 42,290,914 $ 5,928,994 $ 18,841,947 $ 67,061,855
The accompanying notes are an integral part of the financial statements.
36
CITY OF LANSING, MICHIGAN
Reconciliation
Fund Balances of Governmental Funds
to Net Position of Governmental Activities
June 30, 2013
Fund balances-total governmental funds $ 19,150,422
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not financial resources and therefore are not reported in
the funds.
Capital assets not being depreciated 30,980,336
Capital assets being depreciated, net 161,960,602
Capital assets accounted for in internal service funds, net (10,202,512)
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 2,160,125
Deferred nuisance fees receivable 615,487
Deferred loans receivable 1,234,269
Deferred long-term interest receivable 2,078,617
Deferred long-term special assessments receivable 542,370
Deferred long-term taxes and tax settlement receivables 88,136
Internal service funds are used by management to charge the costs of certain equipment maintenance to
individual funds. The assets and liabilities of the internal service funds are included in governmental
activities in the statement of net position. 7,126,020
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 (33,429,775)
Unamortized deferred bond issuance costs 107,711
Accrued interest on bonds, loans and leases payable (167,154)
Net pension obligation (243,128)
Net other postemployment benefit obligation (37,808,267)
Compensated absences and other long-term liabilities (16,575,875)
Net position of governmental activities $ 127,617,384
The accompanying notes are an integral part of the financial statements.
37
CITY OF LANSING, MICHIGAN
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2013
State and Nonmajor
Federal Governmental
General Programs Funds Totals
Revenues
Taxes and special assessments $ 37,712,674 $ $ 1,004,878 $ 38,717,552
Income taxes 29,850,755 - 29,850,755
Licenses and permits 1,509,402 - 1,509,402
Intergovernmental 15,268,934 14,758,456 10,611,793 40,639,183
Charges for services 8,310,415 - 3,443,966 11,754,381
Fines and forfeits 2,452,124 - 1,242,227 3,694,351
Interest and rents 33,498 2,974 16,707 53,179
Contributions 16,237,403 - 10,000 16,247,403
Otherrevenues 86,769 - 423,746 510,515
Total revenues 111,461,974 14,761,430 16,753,317 142,976,721
Expenditures
Current expenditures:
General government 20,930,446 - 2,664,875 23,595,321
Public safety 61,999,850 1,943,232 63,943,082
Public works 8,908,673 - 8,908,673
Highways and streets - 9,937,423 9,937,423
Recreation and culture 6,629,218 - 235 6,629,453
Other functions 2,302,662 21,396,540 - 23,699,202
Debt service:
Principal 1,191,325 - 1,945,834 3,137,159
Interest 562,884 815,972 1,378,856
Issuance costs 42,744 - 42,744
Capital outlay - - 5,489,617 5,489,617
Total expenditures 102,567,802 21,396,540 22,797,188 146,761,530
Revenues over(under)expenditures 8,894,172 (6,635,110) (6,043,871) (3,784,809)
Other financing sources (uses)
Transfers in 365,000 280,407 6,411,525 7,056,932
Transfers out (5,827,825) (21,733) (2,042,891) (7,892,449)
Proceeds on sale of capital assets 21,640 476,193 - 497,833
Issuance of long-term debt 5,885,000 5,900,000 147,046 11,932,046
Payment to refunded bond escrow agent (6,015,112) - - (6,015,112)
Total other financing sources (uses) (5,571,297) 6,634,867 4,515,680 5,579,250
Net change in fund balances 3,322,875 (243) (1,528,191) 1,794,441
Fund balances, beginning of year 5,372,199 14,734 11,969,048 17,355,981
Fund balances, end of year $ 8,695,074 $ 14,491 $ 10,440,857 $ 19,150,422
The accompanying notes are an integral part of the financial statements.
38
CITY OF LANSING, MICHIGAN
Reconciliation
Net Changes in Fund Balances of Governmental Funds
to Change in Net Position of Governmental Activities
For the Year Ended June 30, 2013
Net change in fund balances-total governmental funds $ 1,794,441
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 5,731,688
Depreciation expense (13,831,595)
Gain on sale of capital assets 232,637
Proceeds on sale of capital assets (497,833)
Capital contributions 562,854
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 782,533
Change in deferred nuisance fees receivable (73,892)
Change in deferred loans receivable (1,901)
Change in deferred long-term interest receivable 69,250
Change in deferred special assessments receivable (73,287)
Change in deferred taxes and tax settlement receivables (26,001)
Internal service funds are used by management to charge the costs of certain equipment maintenance to individual
funds. The net increase(decrease)in the net position of the internal service funds is reported with governmental
activities.
Net operating loss from governmental activities in internal service funds (339,534)
Interest revenue from governmental internal service funds 5,409
Loss on sale of capital assets from governmental internal service funds (583,364)
Interest expense from governmental internal service funds (153,790)
Capital contributions from governmental internal service funds 854,188
Transfers in from governmental internal service funds 252,400
Debt proceeds provide current financial resources to governmental funds in the period issued, but issuing debt
increases long-term liabilities in the statement of net position. Repayment of debt principal is an expenditure in the
funds, but the repayment reduces long-term liabilities in the statement of net position.
Issuance of long-term debt (11,932,046)
Principal payments on long-term liabilities 3,137,159
Payments to refunded bond escrow agent 6,015,112
Certain expenditures are reported in governmental funds that reduce long-term liabilities for purposes of the
statement of net position.
Change in estimated liability for workers'compensation 145,176
Some expenses reported in the statement of activates do not require the use of current financial resources and
therefore are not reported as expenditures in the funds.
Change in accrued interest payable on long-term liabilities 100,742
Amortization of debt-related costs (15,406)
Issuance costs related to long-term debt 42,744
Change in net other postemployment benefit obligation (8,947,377)
Change in net pension obligation (4,573)
Change in the accrual for compensated absences 443,511
Change in the accrual for tax settlement agreement 52,161
Change in net position of governmental activities $ (16,258,594)
The accompanying notes are an integral part of the financial statements.
39
CITY OF LANSING, MICHIGAN
Statement of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - General Fund
For the Year Ended June 30, 2013
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Property taxes $ 38,023,752 $ 38,023,752 $ 37,712,674 $ (311,078)
Income taxes 29,050,000 29,050,000 29,850,755 800,755
Licenses and permits 1,503,190 1,503,190 1,509,402 6,212
Intergovernmental 13,882,048 13,882,048 15,268,934 1,386,886
Charges for services 9,716,390 9,716,390 8,310,415 (1,405,975)
Fines and forfeits 2,485,520 2,485,520 2,452,124 (33,396)
Interest and rents 108,000 108,000 33,498 (74,502)
Contributions 17,034,000 17,084,142 16,237,403 (846,739)
Otherrevenues 127,100 127,100 86,769 (40,331)
Total revenues 111,930,000 111,980,142 111,461,974 (518,168)
Expenditures
General government:
Attorney's office 1,422,589 1,312,589 1,280,480 (32,109)
City clerk 906,125 886,125 848,513 (37,612)
Council 592,050 536,050 481,827 (54,223)
Courts 5,639,759 5,459,759 5,350,942 (108,817)
Internal audit 161,692 167,692 161,524 (6,168)
Finance 7,294,841 6,964,841 6,769,201 (195,640)
Library rental 165,000 165,000 155,374 (9,626)
LEPFA support 1,102,795 1,102,795 1,136,634 33,839
Human resources 1,437,274 1,437,274 1,375,560 (61,714)
Mayor 713,433 713,433 713,202 (231)
Office of community media 300,858 300,858 303,067 2,209
Planning / neighborhood development 2,550,051 2,470,051 2,354,122 (115,929)
Budgetary savings from attrition (800,000) - -
Total general government 21,486,467 21,516,467 20,930,446 (586,021)
Public safety:
Police 34,025,030 34,051,369 32,574,119 (1,477,250)
Fire 31,063,390 31,064,274 29,425,731 (1,638,543)
Total public safety 65,088,420 65,115,643 61,999,850 (3,115,793)
Public works 9,195,779 9,195,779 8,908,673 (287,106)
continued...
40
CITY OF LANSING, MICHIGAN
Statement of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - General Fund
For the Year Ended June 30, 2013
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Expenditures (concluded)
Recreation and culture $ 6,673,801 $ 6,673,801 $ 6,629,218 $ (44,583)
Other functions:
Human relations / community services 799,648 769,648 752,481 (17,167)
Human services / community support 1,731,400 1,672,319 1,550,181 (122,138)
Total other functions 2,531,048 2,441,967 2,302,662 (139,305)
Debt service:
Principal 1,259,545 1,259,545 1,191,325 (68,220)
Interest 782,119 782,119 562,884 (219,235)
Issuance costs - 42,744 42,744
Total debt service 2,041,664 2,084,408 1,796,953 (287,455)
Total expenditures 107,017,179 107,028,065 102,567,802 (4,460,263)
Revenues over expenditures 4,912,821 4,952,077 8,894,172 3,942,095
Other financing sources (uses)
Transfers in 365,000 365,000 365,000 -
Transfers out (5,287,821) (5,590,687) (5,827,825) (237,138)
Proceeds on sale of capital assets 10,000 10,000 21,640 11,640
Issuance of long-term debt - 5,885,000 5,885,000 -
Payment to refunded bond escrow agent (5,842,256) (6,015,112) (172,856)
Total other financing sources (uses) (4,912,821) (5,172,943) (5,571,297) (398,354)
Net change in fund balance - (220,866) 3,322,875 3,543,741
Fund balance, beginning of year 5,372,199 5,372,199 5,372,199 -
Fund balance, end of year $ 5,372,199 $ 5,151,333 $ 8,695,074 $ 3,543,741
concluded
The accompanying notes are an integral part of the financial statements.
41
CITY OF LANSING, MICHIGAN
Statement of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - State and Federal Programs
For the Year Ended June 30, 2013
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Intergovernmental $ $ 27,503,103 $ 14,758,456 $ (12,744,647)
Interest and rents - 2,974 2,974
Total revenues 27,503,103 14,761,430 (12,741,673)
Expenditures
Other functions 22,225,693 21,396,540 (829,153)
Revenues over (under) expenditures 5,277,410 (6,635,110) (11,912,520)
Other financing sources (uses)
Transfers in 554,756 280,407 (274,349)
Transfers out - (21,733) (21,733)
Proceeds on sale of capital assets 476,193 476,193
Issuance of long-term debt - 5,900,000 5,900,000
Total other financing sources (uses) 554,756 6,634,867 6,080,111
Net change in fund balance 5,832,166 (243) (5,832,409)
Fund balance, beginning of year 14,734 14,734 14,734
Fund balance, end of year $ 14,734 $ 5,846,900 $ 14,491 $ (5,832,409)
Note: This fund accounts for a variety of individual grant programs that are adopted as awarded. As the fund
expenditures are adopted upon grant award during the fiscal year, there is no original budget required for this
fund.
The accompanying notes are an integral part of the financial statements.
42
CITY OF LANSING, MICHIGAN
Proprietary Fund Financial Statements
Major Funds
The Sewage Disposal System Fund accounts for the provision of sewage disposal services to the
residents of the City.
The Municipal Parking System 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 140.
Internal service funds, page 146.
43
CITY OF LANSING, MICHIGAN
Statement of Net Position
Proprietary Funds
June 30, 2013
Governmental
Business-type Activities-Enterprise Funds Activities
Sewage Municipal Nonmajor
Disposal Parking Enterprise Internal
System System Funds Totals Service Funds
Assets
Current assets:
Cash and cash equivalents $ - $ 659,732 $ 500 $ 660,232 $ -
Equity in pooled cash 6,096,590 4,357,617 2,087,570 12,541,777 2,686,558
Accounts receivable, net 4,007,674 408,755 43,383 4,459,812 437,962
Accrued interest receivable 54,694 84,079 - 138,773 -
Lease receivable,current 611,593 1,731,051 2,342,644
Loans receivable, current - 283,453 283,453 -
Inventories 361,939 - 87,176 449,115 843,718
Prepaids - 5,923 - 5,923 406,615
Due from other funds 20,396,248 1,026,461 21,422,709 950,244
Restricted accounts receivable - 60,056 60,056 -
Totalcurrent assets 31,528,738 8,617,127 2,218,629 42,364,494 5,325,097
Noncurrent assets:
Restricted cash and cash equivalents 11,0827768 904,807 - 11,9877575 1,892,538
Advances to other funds - 469,327 469,327 -
Lease receivable, net of current portion 10,1737312 9,298,839 19,4727151
Loans receivable - 602,778 602,778 -
Bond issue costs, net 524,852 396,641 3,292 924,785 52,730
Capital assets not being depreciated 8,591,698 12,897,808 504,241 21,993,747 4,778,135
Capital assets being depreciated, net 351,0417287 22,515,336 2,361,592 375,9187215 5,4247377
Total non-current assets 381,413,917 47,085,536 2,869,125 431,368,578 12,147,780
Total assets 412,942,655 55,702,663 5,087,754 473,733,072 17,472,877
Liabilities
Current liabilities:
Accounts payable 493,186 158,133 122,828 774,147 1,841,727
Deposits payable - 39,500 4,410 43,910 -
Accrued interest payable 970,497 147,316 810 1,118,623 37,108
Accrued payroll 43,806 18,051 14,391 76,248 64,562
Claims incurred but not reported - - - - 814,014
Due to other funds 6,535,271 575,271 7,1107542 1,500,000
Unearned revenues - - 64,664 64,664 -
Bonds and notes payable,current portion 14,199,930 5,149,372 100,000 19,449,302 668,702
Compensated absences,current portion 70,614 5,701 - 76,315 69,568
Total current liabilities 22,313,304 5,5187073 882,374 28,7137751 4,995,681
Noncurrent liabilities:
Bonds and notes payable, net of current portion 154,849,441 32,589,297 295,212 187,733,950 4,715,174
Compensated absences, net of current portion 353,006 78,341 226,246 657,593 636,002
Total noncurrent liabilities 155,202,447 32,667,638 521,458 188,391,543 5,351,176
Total liabilities 177,515,751 38,185,711 1,403,832 217,105,294 10,346,857
Net position
Net investment in capital assets 201,423,213 8,7887444 2,4707621 212,6827278 4,8187636
Restricted for debt retirement 10,112,271 - - 10,112,271 1,892,538
Restricted for capital projects - 964,863 - 964,863 -
Unrestricted 23,891,420 7,763,645 1,213,301 32,868,366 414,846
Total net position $ 235,426,904 $ 17,516,952 $ 3,683,922 $ 256,6277778 $ 7,126,020
The accompanying notes are an integral part of the financial statements.
44
CITY OF LANSING, MICHIGAN
Statement of Revenues, Expenses and Changes in Fund Position
Proprietary Funds
For the Year Ended June 30, 2013
Governmental
Business-type Activities-Enterprise Funds Activities
Sewage Municipal Nonmajor
Disposal Parking Enterprise Internal
System System Funds Totals Service Funds
Operating revenues
Charges for services $ 30,825,174 $ 5,267,627 $ 5,254,194 $ 41,346,995 $ 67,502,769
Operating expenses
Personal services 5,858,748 1,962,017 3,374,433 11,195,198 5,864,616
Purchase of goods and services 6,254,246 1,197,589 2,512,662 9,964,497 60,595,877
Depreciation 9,807,439 2,325,653 108,281 12,241,373 1,381,810
Total operating expenses 21,920,433 5,485,259 5,995,376 33,401,068 67,842,303
Operating income(loss) 8,904,741 (217,632) (741,182) 7,945,927 (339,534)
Nonoperating revenues(expenses)
Interest revenue 344,254 12,213 356,467 5,409
Loss on sale of capital assets - - - (583,364)
Capital transfer out (707,145) (707,145)
Interest expense and fees (4,239,143) (2,640,777) (27,354) (6,907,274) (153,790)
Otherrevenue 1,193,571 1,193,571
Total nonoperating expenses (3,894,889) (1,447,206) (722,286) (6,064,381) (731,745)
Income(loss)before contributions and transfers 5,009,852 (1,664,838) (1,463,468) 1,881,546 (1,071,279)
Capital contributions - - - 854,188
Transfers in 1,152,769 1,152,769 252,400
Transfers out (300,000) (269,652) (569,652) -
Change in net position 4,709,852 (1,664,838) (580,351) 2,464,663 35,309
Net position, beginning of year 230,717,052 19,181,790 4,264,273 254,163,115 7,090,711
Net position,end of year $ 235,426,904 $ 17,516,952 $ 3,683,922 $ 256,627,778 $ 7,126,020
The accompanying notes are an integral part of the financial statements.
45
CITY OF LANSING, MICHIGAN
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2013
Governmental
Business-type Activities-Enterprise Funds Activities
Sewage Municipal Nonmajor
Disposal Parking Enterprise Internal
System System Funds Totals Service Funds
Cash flows from operating activities
Cash received from customers $ 31,147,597 $ 9,851,753 $ 5,753,649 $ 46,752,999 $ -
Cash received from interfund services - - - - 68,309,237
Cash payments for goods and services (8,654,519) (1,171,690) (2,221,698) (12,047,907) (59,503,380)
Cash payments to employees (5,859,831) (1,965,954) (3,374,095) (11,199,880) (5,865,022)
Net cash provided by operating activities 16,633,247 6,714,109 157,856 23,505,212 2,940,835
Cash flows from noncapital financing activities
Transfers in - - 1,152,769 1,152,769 252,400
Transfers out (300,000) (269,652) (569,652) -
Net cash provided by(used in)
noncapital financing activities (300,000) 883,117 583,117 252,400
Cash flows from capital and related financing activities
Proceeds from sale of capital assets - - 185,659
Acquisition and construction of capital assets (4,445,606) (1,266,598) (5,712,204) (4,785,739)
Cash received for finance charges 1,193,571 1,193,571
Principal paid on revenue and general obligation bonds (13,489,038) (4,355,000) (85,000) (17,929,038) (295,000)
Interest paid on revenue and general obligation bonds (2,032,049) (1,558,462) (28,330) (3,618,841) (149,281)
Proceeds from issuance of long-term debt 26,140,971 8,000,487 405,000 34,546,458 465,000
Loan proceeds - - - - 1,892,332
Amount paid to refunding bond escrow agent (24,639,277) (7,773,856) (401,037) (32,814,170) (462,038)
Payments received on capital lease 785,779 1,705,082 - 2,490,861
Net cash used in capital and related
financing activities (17,679,220) (4,054,776) (109,367) (21,843,363) (3,149,067)
Cash flows from investing activities
Interest and dividends received 344,254 12,213 356,467 5,409
Loans made to others - (192,079) - (192,079) -
Net cash provided by(used in)
investing activities 344,254 (192,079) 12,213 164,388 5,409
Net change in cash and cash equivalents (1,001,719) 2,467,254 943,819 2,409,354 49,577
Cash and cash equivalents, beginning of year 18,181,077 3,454,902 1,144,251 22,780,230 4,529,519
Cash and cash equivalents,end of year $ 17,179,358 $ 5,922,156 $ 2,088,070 $ 25,189,584 $ 4,579,096
Reconciliation to statement of net position
Cash and cash equivalents $ - $ 659,732 $ 500 $ 660,232 $ -
Equity in pooled cash 6,096,590 4,357,617 2,087,570 12,541,777 2,686,558
Restricted cash and cash equivalents 11,082,768 904,807 - 11,987,575 1,892,538
$ 17,179,358 $ 5,922,156 $ 2,088,070 $ 25,189,584 $ 4,579,096
continued...
46
CITY OF LANSING, MICHIGAN
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2013
Governmental
Business-type Activities-Enterprise Funds Activities
Sewage Municipal Nonmajor
Disposal Parking Enterprise Internal
System System Funds Totals Service Funds
Reconciliation of operating income(loss)to net cash
provided by operating activities
Operating income(loss) $ 8,904,741 $ (217,632) $ (741,182) $ 7,945,927 $ (339,534)
Adjustments to reconcile operating income(loss)to
net cash provided by(used in)operating activities:
Depreciation expense 9,807,439 2,325,653 108,281 12,241,373 1,381,810
Change in assets and liabilities:
Accounts receivable 774,062 488,169 499,455 1,761,686 1,756,712
Accrued interest receivable (54,694) 12,998 - (41,696) -
Inventories (276,410) - 41,044 (235,366) 60,353
Prepaids (5,890) - (5,890) 97,601
Due from other funds (1,366,796) 4,082,959 2,716,163 (950,244)
Advances to other funds 58,488 58,488 -
Accounts payable (626,658) 27,447 29,845 (569,366) 128,179
Deposits payable (2,115) 4,410 2,295 -
Accrued interest payable (69,943) (23,622) (5,915) (99,480) 8,076
Accrued payroll (1,083) (3,937) 338 (4,682) (174)
Retainage payable (200) - (200) -
Claims incurred but not reported - - - (83,509)
Due to other funds (396,945) 275,271 (121,674) 900,244
Unearned revenues (54,721) (54,721) -
Compensated absences (60,466) (28,209) 1,030 (87,645) (18,679)
Net cash provided by operating activities $ 16,633,247 $ 6,714,109 $ 157,856 $ 23,505,212 $ 2,940,835
concluded
Non-cash transactions
The nonmajor enterprise funds made a non-cash capital contribution out of$707,145 for the year ended June 30,2013.
The internal service funds received non-cash capital contributions of$854,188 for the year ended June 30,2013.
The accompanying notes are an integral part of the financial statements.
47
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48
CITY OF LANSING, MICHIGAN
Fiduciary Fund Financial Statement
Pension and Other Postemployment Benefit Trust Funds - Employee pension and other
postemployment benefit trust funds accept payments made by the City, invest fund resources,
calculate and pay pensions to retirees (or beneficiaries), and account for postemployment
healthcare coverage.
Combining schedules for fiduciary funds are presented in the notes to the financial statements.
Agency Funds - These funds account for resources held in a trustee or agent capacity for the 54-A
District Court.
Combining statements for agency funds are presented, by fund type, beginning on page 152.
49
CITY OF LANSING, MICHIGAN
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2013
Pension
and Other
Postemployment
Trust Agency
Funds Funds
Assets
Cash and cash equivalents $ 30,141,634 $
Equity in pooled cash - 94,526
Investments:
Money market funds 15,892,340
Government obligations 58,275,140 -
Corporate bonds 601216,542
Common stocks 125,304,202
Mutualfunds 23212697512
Contribution receivable 1,017
Dividends and interest receivable 627,948
Total assets 522,728,335 $ 94,526
Liabilities
Accounts payable 7,621,564 $ -
Undistributed receipts - 94,526
Total liabilities 7,621,564 $ 94,526
Net position held in trust for
Pension benefits 458,303,048
Other postemployment benefits 56,803,723
Total net position $ 515,106,771
The accompanying notes are an integral part of the financial statements.
50
CITY OF LANSING, MICHIGAN
Statement of Changes in Fiduciary Net Position
Pension and Other Postemployment Benefit Trust Funds
For the Year Ended June 30, 2013
Additions
Investment income:
Net appreciation in fair value
of investments $ 62,375,634
Interest income 9,840,431
Dividend income 2,443,218
Investment expenses (7,112)
Net investment income 74,652,171
Contributions:
Employer 40,755,207
Plan members 3,626,639
Total contributions 44,381,846
Total additions 119,034,017
Deductions
Participant benefits 67,372,587
Administrative expense 1,831,720
Total deductions 69,204,307
Net change in net position held in trust 49,829,710
Net position held in trust for pension and other postemployment benefits
Beginning of year 465,277,061
End of year $ 515,106,771
The accompanying notes are an integral part of the financial statements.
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52
COMPONENT UNITS
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54
CITY OF LANSING, MICHIGAN
Discretely Presented Component Units
Discretely presented component units are entities that are legally separate from the City but for
which the City is financially accountable, or their relationship with the City is such that exclusion
would cause the City's financial statements to be misleading or incomplete. The City has 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.
55
CITY OF LANSING, MICHIGAN
Combining Statement of Net Position
Discretely Presented Component Units
June 30, 2013
Lansing
Tax Entertainment
Brownfield Increment £t Public
Redevelopment Finance Facilities Smart
Authority Authority Authority Zone Totals
Assets
Cash and cash equivalents $ 950,877 $ 1,155,963 $ 270,432 $ $ 2,377,272
Receivables, net 969,379 - 641,875 1,611,254
Due from primary government 791,676 - - 2,612 794,288
Inventories, prepaids and other assets - 143,468 91,714 - 235,182
Restricted cash and cash equivalents 1,173,791 417,512 1,591,303
Capital assets being depreciated, net - - 30,695 - 30,695
Total assets 2,711,932 2,473,222 1,452,228 2,612 6,639,994
Liabilities
Accounts payable and
accrued liabilities 1,501,941 - 536,944 - 2,038,885
Accrued interest payable 53,174 16,671,470 - 16,724,644
Unearned revenues - - 381,470 381,470
Due to primary government - 723,308 - 723,308
Long-term debt:
Due within one year 230,279 1,705,995 2,733 1,939,007
Due in more than one year 588,079 18,565,458 - 19,153,537
Total liabilities 2,373,473 37,666,231 921,147 40,960,851
Net position
Net investment in capital assets - - 27,962 27,962
Unrestricted (deficit) 338,459 (35,193,009) 503,119 2,612 (34,348,819)
Total net position (deficit) $ 338,459 $ (35,193,009) $ 531,081 $ 2,612 $ (34,320,857)
The accompanying notes are an integral part of the financial statements.
56
CITY OF LANSING, MICHIGAN
Combining Statement of Activities
Discretely Presented Component Units
For the Year Ended June 30, 2013
Lansing
Tax Entertainment
Brownfield Increment Ft Public
Redevelopment Finance Facilities Smart
Authority Authority Authority Zone Totals
Expenses
Brownfield redevelopment $ 1,504,818 $ - $ $ $ 1,504,818
Community development - 4,068,610 4,068,610
Recreation and culture - - 6,500,806 6,500,806
Total expenses 1,504,818 4,068,610 6,500,806 12,074,234
Program revenues
Charges for services - - 5,344,083 5,344,083
Operating grants and contributions 630,475 1,102,795 1,733,270
Total program revenues 630,475 6,446,878 7,077,353
Net program expense (874,343) (4,068,610) (53,928) (4,996,881)
General revenues
Property taxes 1,287,423 2,939,382 - 4,226,805
Unrestricted investment earnings 1,897 4,958 40 6,895
Total general revenues 1,289,320 2,944,340 40 4,233,700
Changes in net position 414,977 (1,124,270) (53,888) - (763,181)
Net position (deficit), beginning of year (76,518) (34,068,739) 584,969 2,612 (33,557,676)
Net position (deficit), end of year $ 338,459 $ (35,193,009) $ 531,081 $ 2,612 $ (34,320,857)
The accompanying notes are an integral part of the financial statements.
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58
NOTES TO FINANCIAL STATEMENTS
59
CITY OF LANSING, MICHIGAN
Index - Notes to Financial Statements
Pape
1. Summary of Significant Accounting Policies 61
Reporting entity
Government-wide and fund financial statements
Measurement focus, basis of accounting, and financial statement presentation
Assets, deferred outflows of resources, liabilities, deferred inflows of resources, and equity
2. Budgetary Information 69
3. Deficit Fund Equity 70
4. Deposits and Investments 71
5. Receivables 77
6. Deferred Revenue 77
7. Capital Assets 78
8. Accounts Payable and Accrued Liabilities 80
9. Interfund Receivables, Payables and Transfers 80
10.Long-Term Debt 83
11.Fund Balances - Governmental Funds 87
12.Net Investment in Capital Assets 88
13.Segment Information - Enterprise Funds 88
14.Risk Management 89
15.Property Taxes 90
16.Contingent Liabilities 90
17.Pension Plans 90
18.Other Postemployment Benefits 99
19.Adoption of New Accounting Pronouncement 104
20.Subsequent Event 104
60
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Lansing (the "City") was incorporated in 1859. In 1909, the City came under the provisions of
Act 279, P.A. 1909, as amended ("Home Rule City Act"). The City operates under a strong Mayor form of
government in which the Mayor is responsible for implementation and administration of City policy as
established by City Council.
The accounting and reporting policies of the City conform in all material respects to generally accepted
accounting principles (GAAP) as applicable to governments. The Governmental Accounting Standards
Board (GASB) is the standard setting body for establishing governmental accounting and financial
reporting principles, which are primarily set forth in the GASB's Codification of Governmental Accounting
and Financial Reporting Standards (GASB Codification). Following is a summary of the significant policies:
Reporting Entity
As required by generally accepted accounting principles, these financial statements present the City and
its component units, entities for which the City is considered to be financially accountable. The financial
data of the component units are included in the City's reporting entity because of the significance of
their operational or financial relationships with the City.
Blended Component Unit
A blended component unit is a legally separate entity from the City but is so intertwined with the City
that it is, in substance, the same as the City. It is reported as part of the City and its financial data is
combined with data of the appropriate funds. The City has one blended component unit, the Building
Authority with a fiscal June 30 year-end. This component unit provides services primarily to benefit the
City. The blended unit is described as follows:
The Building Authority (the "Authority") was established by the City under Act 31, Michigan Public Acts of
1948. The Mayor, with the advice and consent of City Council, appoints the Authority's governing body and
designates management. The Authority uses the proceeds of its tax-exempt bonds to finance the
construction or acquisition of capital assets for the City only. The bonds are secured by lease agreements
with the City and will be retired through lease payments from the City. The financial activity, assets,
liabilities and equity of the Authority are incorporated within the City's Municipal Parking System and
Golf enterprise funds, and the 1998 Building Authority Debt Service Fund.
Discretely Presented Component Units
Discretely presented component units are entities that are legally separate from the City but for which
the City is financially accountable, or their relationship with the City is such that exclusion would cause
the City's financial statements to be misleading or incomplete. The 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:
61
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
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.
The Tax Increment Finance Authority ("TIFA") was established by the City under the authority contained
in Act 450, Michigan Public Acts of 1981 ("Act 450"). Act 450 authorizes the City to designate specific
districts within its corporate limits as TIFA districts. The TIFA presides over such districts, formulating
plans for public improvements, economic development, neighborhood revitalization, and historic
preservation within the districts. Act 450 allows the TIFA to participate in a broad range of improvement
activities intended to contribute to economic growth and prevent property value deterioration. The
TIFA's governing body is appointed by the Mayor with the advice and consent of the City Council. Bond
issuances, to fund the above activities, are approved by the City Council and the legal liability for the
debt remains with the City.
The Lansing Entertainment and Public Facilities Authority ("LEPFA") was established under the charter of
the City of Lansing 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.
The Lansing Regional SmartZone ("SmartZone") 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 SmartZone
shall be known and exercise its powers under title of the Local Development Finance Authority of the
Cities of Lansing and East Lansing. The SmartZone is fiscally dependent on the City of Lansing; the City
approves the annual budget and is responsible for managing the SmartZone. The SmartZone was created
in order to eliminate the conditions of unemployment, underemployment and joblessness, and to promote
economic growth in the City. The SmartZone'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.
62
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
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 / Tax Increment Finance Authority
1000 S Washington Avenue, Suite 201
Lansing, Michigan 48910
Lansing Entertainment and Public Facilities Authority
333 East Michigan Avenue
Lansing, Michigan 48933
Government-Wide and Fund Financial Statements
The statements of net position 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.
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.
Measurement Focus Basis of Accounting, and Financial Statement Presentation
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.
63
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
The City reports the following major governmental funds:
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.
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.
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 are used to account for and report the proceeds of specific revenue sources
that are restricted or committed to expenditure for specified purposes other than debt service or
capital projects that comprise, or are expected to comprise a substantial portion of the fund's total
reported inflows.
Debt service funds are used to account for and report financial resources that are restricted,
committed, or assigned to expenditure for principal, interest and related costs.
Capital projects funds are used to account for and report financial resources that are restricted,
committed, or assigned to expenditure for capital outlays, including the acquisition or construction of
capital facilities and other capital assets.
Permanent funds account for resources that are legally restricted to the extent that only earnings,
and not principal, may be used for purposes that support the government's programs.
Enterprise funds account for those operations that are financed and operated in a manner similar to
private business or where the City has decided that the determination of revenues earned, costs
incurred and/or net income is necessary for management accountability.
Internal service funds account for operations that provide services to other departments or agencies
of the City, or to other governments, on a cost-reimbursement basis. This includes operating a
maintenance facility for trucks and equipment used by the Public Service Department, and health care
self-insurance services.
Pension and other postemployment benefit trust funds account for the accumulation of resources to
be used for retirement annuity payments to eligible full-time employees of the City, certain
healthcare costs, and other retirement distributions.
The agency fund account for resources held in a trustee or agent capacity for the 54-A District Court.
64
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
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. Agency funds, a type of fiduciary fund, are
unlike all other types of funds, reporting only assets and liabilities. Therefore, agency funds cannot be
said to have a measurement focus. They do, however, use the accrual basis of accounting to recognize
receivables and payables. Revenues are recorded when earned and expenses are recorded at the time
liabilities are incurred, regardless of when the related cash flows take place.
Property taxes are recognized as revenues in the year for which they are levied. After March 1, any
delinquent taxes on real property are paid by the county which is responsible for collecting any
outstanding taxes on real property as of that date. Grants and similar items are recognized as revenue as
soon as all eligibility requirements imposed by the provider have been met.
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 party
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.
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. Revenues are considered to be available when they are
collectible within the current period or soon enough thereafter to pay liabilities of the current period.
The City considers all revenues reported in the governmental funds to be available if they are collected
within three months after year-end, except for income taxes that use a 45-day collection period, property
taxes that use a 60-day collection period, and reimbursement-based grants that use one year. Property
taxes, income taxes, franchise taxes, licenses and interest are considered to be susceptible to accrual. All
other revenue items are considered to be measurable and available only when cash is received by the
City.
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.
65
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
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 position 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.
Assets, deferred outflows of resources, liabilities, deferred inflows of resources, 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 position/balance sheet as "equity in pooled cash." The City's cash and
cash equivalents are considered to be cash on hand, demand deposits and short-term investments with
original maturities of three months or less from the date of acquisition.
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.
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.
66
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
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, prepaids 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.
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 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 position.
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:
Years
Buildings 20-50
Improvements 8-50
Equipment 3-15
Sanitary sewers 50
Infrastructure 10-75
67
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Deferred outflows of resources
In addition to assets, the statement of financial position will sometimes report a separate section for
deferred outflows of resources. This separate financial statement element, deferred outflows of
resources, represents a consumption of net position that applies to one or more future periods and so will
not be recognized as an outflow of resources (expense/ expenditure) until then. The City currently has no
items that qualify for reporting in this category.
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.
Long-term obligations
In the government-wide financial statements, and proprietary fund types in the fund financial
statements, long term debt and other long term obligations are reported as liabilities in the applicable
governmental activities, business-type activities, or proprietary fund type statement of net position. Bond
premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds
using the straight-line basis. Bonds payable are reported net of the applicable bond premium or discount.
Bond issuance costs are reported as 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.
Deferred inflows of resources
In addition to liabilities, the statement of financial position will sometimes report a separate section for
deferred inflows of resources. This separate financial statement element, deferred inflows of resources,
represents an acquisition of net position that applies to one or more future periods and so will not be
recognized as an inflow of resources (revenue) until that time. The City currently has no items that
qualify for reporting in this category.
68
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 City 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.
2. 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 account 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, whichever is
less.
69
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Copies of the City's separately issued Budget 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. There were no capital lease acquisitions
during the year ended June 30, 2013.
Appropriations lapse at year-end for all annual budgets. Appropriations are automatically carried forward
for project-type budgets.
P.A. 621 of 1978, as amended, provides that a local unit shall not incur expenditures in excess of the amount
appropriated. During the year ended June 30, 2013, the City incurred expenditures in certain budgetary funds
which were in excess of the amounts appropriated, as follows:
Total Amount of Budget
Appropriations Expenditures Variance
General fund:
General government:
LEPFA support $ 1,102,795 $ 1,136,634 $ 33,839
Office of community media 300,858 303,067 2,209
Transfers out 5,590,687 5,827,825 237,138
State and federal programs - transfers out - 21,733 21,733
Major streets - interest expense 165,569 169,309 3,740
Localstreets - interest expense 475,608 483,857 8,249
Drug law enforcement - public safety 838,201 918,655 80,454
Tri-County metro - public safety 780,214 1,024,577 244,363
3. DEFICIT FUND EQUITY
Governmental activities reported a deficit in unrestricted net position in the amount of $39,307,231 at
June 30, 2013. Total net position amounted to a positive $127,617,384.
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 restricted related to a
long-term advance), was $0.
The special assessments capital projects fund reported a deficit fund balance of $419,931. 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 Tax Increment Finance Authority reported a deficit in unrestricted net position of $35,193,009 at
June 30, 2013. The deficit is a result of full-accrual accounting for long-term debt, without reflecting a
corresponding receivable for tax captures to be received in future periods (which cannot be accrued in
accordance with generally accepted accounting principles).
70
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
4. 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) as of June 30, 2013:
Primary Component
Government Units Totals
Statement of net position
Cash and investments $ 36,133,900 $ 2,377,272 $ 38,511,172
Restricted cash and investments 13,880,113 1,591,303 15,471,416
Statement of fiduciary net position
Pension and OPEB trust funds:
Cash and cash equivalents 30,141,634 - 30,141,634
Investments 491,957,736 491,957,736
Agency funds:
Equity in pooled cash 94,526 94,526
Total $ 572,207,909 $ 3,968,575 $ 576,176,484
Deposits and investments
Bank deposits:
Checking/savings accounts $ 82,574,690
Investments - money markets 335,698
Investment in securities and mutual funds:
Pooled investments 1,168,859
Pension and OPEB investments 491,957,736
Cash on hand 139,501
Total $ 576,176,484
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, $77,717,563 of the City's bank balance of $79,227,399 was
exposed to custodial credit risk because it was uninsured and uncollateralized.
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. As of June 30, 2013, the City's pooled investments consisted entirely
of mutual funds and money makrkets totaling $335,698 and $1,168,859 respectively.
71
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
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:
SEtP AAAm $ 251,283
U n rated 917,576
Total $ 1,168,859
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 $ 917,576
No maturity 251,283
Total $ 1,168,859
Concentration of Credit Risk. Concentration of credit risk is the risk of loss attributed to the magnitude
of the City's investment in a single issuer. State law limits allowable investments but does not limit
concentration of credit risk as identified in the list of authorized investments in the summary of
significant accounting policies. The City's investment policy does not have specific limits in excess of
state law on concentration of credit risk. All investments held at year end are reported above.
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 position are composed
entirely of short-term investments in money market accounts.
72
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Investments
The Michigan Public Employees Retirement Systems' Investment Act, Public Act 314 of 1965, as amended,
authorizes the pension trust funds to invest in stocks, government and corporate securities, mortgages,
real estate, and various other investment instruments, subject to certain limitations. The retirement
boards have the responsibility and authority to oversee the investment portfolio. Various professional
investment managers are contracted to assist in managing the pension trust funds' assets. All investment
decisions are subject to Michigan law and the investment policy established by the retirement boards.
The investments of each pension trust fund are held in a bank administered trust fund. Following is a
summary of pension and other postemployment benefits investments as of June 30, 2013:
Employees' Police and Fire Employees' Retiree
Retirement Retirement Money Purchase Health Care
System System Pension Plan VEBA Totals
Investments at fair value,
as determined by quoted
market price
U.S. treasuries:
Not on securities loan $ 655,863 $ 2,441,691 $ $ $ 3,097,554
On securities loan 3,169,756 2,842,048 6,011,804
U.S. agencies:
Not on securities loan 22,128,656 26,558,737 48,687,393
On securities loan 14 - 14
Foreign government
bonds:
Not on securities
loan 151,948 325,602 477,550
Domestic corporate
securities:
Not on securities
loan 25,984,632 34,231,910 60,216,542
Domestic equities:
Not on securities loan 29,541,901 48,769,232 78,311,133
On securities loan 16,291,818 20,565,251 36,857,069
International equities:
Not on securities loan 497,570 736,401 1,233,971
Emerging markets
equities 3,540,580 5,361,449 8,902,029
Collateralized mortgage
obligations 539,887 665,144 1,205,031
Real estate investment
funds 7,703,150 9,601,737 17,304,887
73
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Employees' Police and Fire Employees' Retiree
Retirement Retirement Money Purchase Health Care
System System Pension Plan VEBA Totals
Equity mutual funds $ - $ 7,514,911 $ $ - $ 7,514,911
International equity
mutual funds 40,891,480 61,904,978 486,230 103,282,688
Domestic equity
mutual funds 34,035,983 52,051,018 1,701,330 7,965,836 95,754,167
Domestic debt securities
mutual funds - - - 7,617,357 7,617,357
Venture capital and
partnerships 17,331 - - 17,331
Money market funds 3,192,607 12,273,698 - - 15,466,305
Total investments $ 188,343,176 $ 285,843,807 $ 1,701,330 $ 16,069,423 $ 491,957,736
Credit Risk. The City's pension investment policies provide that at least 90% of its investments in fixed
income securities be rated BBB- or better by a nationally recognized statistical rating organization and
the remaining 10% be rated at least B- or better. The City's pension and other postemployment benefits
investments were rated by Standard Et Poor's as follows:
Employees' Police and Fire Employees' Retiree
Retirement Retirement Money Purchase Health Care
System System Pension Plan VEBA Totals
AA $ 4,159,438 $ 4,609,796 $ $ $ 8,769,234
US government
guaranteed 21,864,806 27,766,708 49,631,514
Not rated 29,738,641 46,812,070 76,550,711
Assets not subject
to credit risk 132,580,291 206,655,233 1,701,330 16,069,423 357,006,277
$ 188,343,176 $ 285,843,807 $ 1,701,330 $ 16,069,423 $ 491,957,736
Custodial Credit Risk. For investments, custodial credit risk is the risk that, in the event of the failure of
the counterparty, the City will not be able to recover the value of its investments or collateral securities
that are in the possession of an outside party. The City's pension investment policies require that
investment securities be held in trust by a third-party institution in the name of the pension trust fund.
As such, although uninsured and unregistered, the City's pension investments are not exposed to custodial
credit risk since the securities are held by the counterparty's trust department in the name of the
pension trust fund. Short-term investments in money market funds and open-end mutual funds are not
exposed to custodial credit risk because their existence is not evidenced by securities that exist in
physical or book form.
74
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Concentration of Credit Risk. At June 30, 2013, the pension and other postemployment benefits
investment portfolio was concentrated as follows:
Employees' Police and Fire
Retirement Retirement
Investment Type Issuer System System
Common stock Northern Trust Back, N.A. 15.0% 15.6%
Corporate bonds Western Asset Funds, Inc. 13.8% 11.9%
U.S. agencies Federal Home Loan Mortgage Corporation 5.5% -
The City's pension and other postemployment benefits investment policies require diversification of fixed
income securities; however, they do not specify percentages of dollar amounts by industry or issuer.
Foreign Currency Risk. Foreign currency risk is the risk that changes in exchange rates will adversely
affect the fair value of an investment or deposit. The pension and other postemployment benefits trusts'
exposure to foreign currency risk is as follows:
Employees' Police and Fire Employees' Retiree
Investment Retirement Retirement Money Purchase Health Care
(currency in U.S. dollar) System System Pension Plan VEBA Totals
International equities:
Canada $ 328,935 $ 488,645 $ $ $ 817,580
Israel 74,520 109,296 183,816
India 94,115 138,460 232,575
Foreign government bonds:
Egypt 151,948 325,602 477,550
International equity
mutual funds 44,432,060 67,266,427 110,976 486,230 112,295,693
Total $ 45,081,578 $ 68,328,430 $ 110,976 $ 486,230 $ 114,007,214
75
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
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, 2013, maturities of the City's pension and other postemployment benefits trust
debt securities were as follows:
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 $ $ - $ 423,908 $ 3,401,711 $ 3,825,619
U.S. agencies 2,872,018 1,948,706 3,416,004 13,891,942 22,128,670
International government
bonds - 151,948 - - 151,948
Domestic corporate
securities 25,984,632 - - - 25,984,632
Collateralized mortgage
obligations - - 128,462 411,425 539,887
Total $ 28,856,650 $ 2,100,654 $ 3,968,374 $ 17,705,078 $ 52,630,756
Police and Fire Retirement
System
U.S. treasuries $ $ - $ 1,115,153 $ 4,168,586 $ 5,283,739
U.S. agencies 2,182,188 2,880,328 4,717,321 16,778,900 26,558,737
International government
bonds - 325,602 - - 325,602
Domestic corporate
securities 34,009,133 222,777 - - 34,231,910
Collateralized mortgage
obligations - - 165,166 499,978 665,144
Total $ 36,191,321 $ 3,428,707 $ 5,997,640 $ 21,447,464 $ 67,065,132
Securities Lending. Under contracts approved by the City, the pension and other postemployment
benefits trust funds are permitted to lend their securities to broker-dealers and banks (borrowers) for
collateral that will be returned for the same securities in the future. The pension trust and other
postemployment benefits funds' custodial banks manage the securities lending programs and receive cash
as collateral. Collateral cash is initially pledged at 100 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.
76
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Securities on loan at year-end are classified in the preceding schedule of custodial credit risk according to
the category for the collateral received on the securities lent. At year-end, the pension trust funds have
no credit risk exposure to borrowers because the collateral held by the custodians exceeds the market
value of the related securities lent. At June 30, 2013, the fair value of securities on loan by the
Employees' Retirement System and the Police and Fire Retirement System were $19,461,588 and
$23,407,299, respectively, for which the Plans' received cash collateral of $19,925,318 and $23,983,701,
respectively. The contract with the pension and other postem ployment benefits trust fund custodians
require them to indemnify the City if the borrowers fail to return the securities (and if the collateral is
inadequate to replace the securities lent) or fail to pay the City for income distributions by the securities'
issuers while the securities are on loan.
5. RECEIVABLES
Receivables are comprised of the following:
Governmental Business-type Component
Activities Activities Units
Accounts receivable $ 18,112,268 $ 4,820,545 $ 643,635
Taxes receivable 1,036,180 - -
Special assessments receivable 607,881 - -
Loansreceivable 1,434,269 886,231 403,481
Accrued interest receivable 2,078,617 138,773 -
Due from other governments 10,053,328 - 564,138
Lease receivable - 21,814,795 -
Allowance for uncollectible accounts (639,590) (360,733) -
$ 32,682,953 $ 27,299,611 $ 1,611,254
Amount not expected to be
collected within one year $ 4,053,375 $ 20,074,929 $ 403,481
6. DEFERRED REVENUE
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 $ 2,160,125 $ $ 2,160,125
Nuisance fees receivable 615,487 615,487
Loans receivable 1,234,269 1,234,269
Interest on loans receivable 2,078,617 2,078,617
Special assessments receivable 542,370 542,370
Tax settlement receivable 88,136 88,136
Grant funds received in advance - 243,238 243,238
Total $ 6,719,004 $ 243,238 $ 6,962,242
77
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
7. CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2013 was as follows:
Beginning Ending
Balance Additions Disposals Transfers Balance
Governmental activities
Capital assets, not being depreciated:
Land $ 25,084,983 $ 586,340 $ - $ 19,412 $ 25,690,735
Construction in progress 331,006 5,051,158 (92,563) - 5,289,601
25,415,989 5,637,498 (92,563) 19,412 30,980,336
Capital assets, being depreciated:
Land improvements 15,850,979 199,766 - 16,050,745
Equipment and vehicles 42,811,011 952,993 (3,389,977) - 40,374,027
Buildings 118,401,636 598,426 (1,358,664) 1,127,425 118,768,823
Infrastructure 300,314,490 3,838,641 (2,603,951) - 301,549,180
477,378,116 5,589,826 (7,352,592) 1,127,425 476,742,775
Less accumulated depreciation for:
Land improvements (6,874,716) (610,768) - - (7,485,484)
Equipment and vehicles (36,411,864) (1,891,824) 3,389,977 (34,913,711)
Buildings (64,097,508) (3,677,700) 682,205 (439,692) (67,532,695)
Infrastructure (198,155,924) (9,033,113) 2,338,754 - (204,850,283)
(305,540,012) (15,213,405) 6,410,936 (439,692) (314,782,173)
Total capital assets
being depreciated, net 171,838,104 (9,623,579) (941,656) 687,733 161,960,602
Governmental activities
capital assets, net $ 197,254,093 $ (3,986,081) $ (1,034,219) $ 707,145 $ 192,940,938
At June 30, 2013, the City's governmental activities had outstanding commitments through construction
contracts of approximately $2,435,000.
78
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Beginning Ending
Balance Additions Disposals Transfers Balance
Business-type activities
Capital assets, not being depreciated:
Land $ 13,503,321 $ - $ $ (19,412) $ 13,483,909
Construction in progress 48,866,981 4,314,505 (44,671,648) 8,509,838
62,370,302 4,314,505 (44,691,060) 21,993,747
Capital assets, being depreciated:
Land improvements 24,219,932 26,309 24,246,241
Equipment and vehicles 5,673,556 - - 5,673,556
Buildings 200,951,539 901,401 12,989,025 214,841,965
Sewers 301,782,096 469,989 30,555,198 332,807,283
532,627,123 1,397,699 43,544,223 577,569,045
Less accumulated depreciation for:
Land improvements (11,465,817) (601,241) - (12,067,058)
Equipment and vehicles (5,199,657) (187,618) - (5,387,275)
Buildings (105,139,098) (4,909,763) 439,692 (109,609,169)
Sewers (68,044,577) (6,542,751) (74,587,328)
(189,849,149) (12,241,373) 439,692 (201,650,830)
Total capital assets
being depreciated, net 342,777,974 (10,843,674) 43,983,915 375,918,215
Business-type activities
capital assets, net $ 405,148,276 $ (6,529,169) $ $ (707,145) $ 397,911,962
At June 30, 2013, the City's business-type activities had outstanding commitments through construction
contracts of approximately $1,088,000.
Depreciation expense was charged to functions/programs of the primary government as follows:
Depreciation of governmental activities by function
General government $ 612,775
Public safety 566,448
Public works 9,033,113
Recreation and culture 1,806,907
Community development 1,812,352
Internal service funds 1,381,810
Total depreciation expense - governmental activities $ 15,213,405
79
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Depreciation of business-type activities by function
Sewage disposal system $ 9,807,439
Municipal parking system 2,325,653
Golf 92,092
Other 16,189
Total depreciation expense - business-type activities $ 12,241,373
8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities are comprised of the following:
Governmental Business-type Component
Activities Activities Units
Accounts payable $ 8,299,782 $ 774,147 $ 2,038,885
Deposits payable 87,134 43,910 -
Accrued payroll 1,691,125 76,248
Contract retainage payable 827,405 -
Due to other governments 3,631,137
Other 1,302,606 - -
$ 15,839,189 $ 894,305 $ 2,038,885
9. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
The composition of interfund balances as of June 30, 2013, was as follows:
Due to and from primary government funds
Due from Due to Other
Other Funds Funds
General fund $ 8,490,554 $ 20,952,814
State and federal programs - 3,170,000
Nonmajor governmental funds 4,307,416 2,437,567
Sewage disposal system 20,396,248 6,535,271
Municipal parking system 1,026,461 -
Nonmajor enterprise funds - 575,271
Internal service funds 950,244 1,500,000
Total $ 35,170,923 $ 35,170,923
The above balances generally resulted from a time lag between the dates that interfund goods and
services are provided or reimbursable expenditures occur, transactions are recorded in the accounting
system, and payments between funds are made.
80
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Advances to and from primary government funds
Advances to Advances from
Other Funds Other Funds
Nonmajor governmental funds $ - $ 469,327
Municipal parking system 469,327 -
Total $ 469,327 $ 469,327
Due to and from component units
Due from Due to Due to Due from
primary primary component component
government government unit unit
General fund $ - $ $ 794,288 $ 723,308
Brownfield Redevelopment Authority 791,676 - -
Tax Increment Finance Authority - 723,308
Smart Zone 2,612 - - -
Total $ 794,288 $ 723,308 $ 794,288 $ 723,308
In addition, at June 30, 2013, the following interfund receivables/payables were reported for funds with
negative equity in pooled cash and investments:
Interfund Interfund
Receivable Payable
General fund $ 6,309 $ -
Nonmajor governmental funds - 6,309
Total $ 6,309 $ 6,309
81
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
For the year ended June 30, 2013, interfund transfers consisted of the following:
Transfers In
State and Nonmajor Nonmajor
federal governmental enterprise
Transfers Out General fund programs funds funds
General fund $ $ 270,110 $ 5,180,722 $ 376,993
State and federal programs - 21,733 -
Nonmajor governmental funds 65,000 10,297 1,189,418 775,776
Sewage disposal system 300,000 - - -
Nonmajor enterprise funds - - 19,652 -
Total $ 365,000 $ 280,407 $ 6,411,525 $ 1,152,769
Transfers In
Internal
service
Transfers Out funds Total
General fund $ $ 5,827,825
State and federal programs 21,733
Nonmajor governmental funds 2,400 2,042,891
Sewage disposal system - 300,000
Nonmajor enterprise funds 250,000 269,652
$ 252,400 $ 8,462,101
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.
82
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
10. 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 $ 2,570,000
2005 Building Authority Refunding Bonds 3.50-5.00% 1,470,000 750,000
2007 Michigan Transportation Fund Limited Tax Bonds 3.625-5.00% 1,137,600 516,000
2007 Michigan Transportation Fund Limited Tax Bonds 3.625-5.00% 3,602,400 1,634,000
2007 Fire Station Refunding Bonds 3.625-5.00% 1,780,000 1,205,000
2008 Michigan Transportation Fund Limited Tax Bonds 3.00-4.00% 3,500,000 2,340,000
2009 Capital Improvement Bonds - Limited Tax General 3.15-6.85% 10,197,000 9,652,000
2010 Recovery Zone Economic Development Bonds 3.40-7.25% 3,200,000 3,065,000
2010 Refunding Bonds - Limited Tax General Obligation 2.60-2.65% 2,470,000 1,850,000
2013 Refunding Bonds - Limited Tax General Obligation
Energy Efficiency Refunding Bonds 2.40% 5,645,000 5,645,000
2013 Refunding Bonds - Limited Tax General Obligation
Phone System Refunding Bonds 2.40% 240,000 240,000
2013 Operations and Maintenance Limited Tax Refunding 2.40% 465,000 465,000
$ 37,707,000 $ 29,932,000
Business-type activities:
1990 Building Authority Municipal Parking System
Limited Taxable Bond 0.00% $ 64,635,000 $ 4,975,000
2005 Building Authority Refunding Bonds 3.50-5.00% 15,975,000 9,795,000
2007 Building Authority Refunding Bonds 3.625-5.00% 7,965,000 7,805,000
1992 Limited Tax Sewer Bond - 5005-01 2.50% 7,128,800 425,000
1993 Limited Tax Sewer Bond - 5005-02 2.50% 8,150,050 930,000
1994 Limited Tax Sewer Bond - 5005-03 2.50% 3,234,722 550,000
1994 Limited Tax Sewer Bond - 5005-04 2.00% 3,727,138 358,100
1994 Limited Tax Sewer Bond - 5005-06 2.25% 7,595,611 1,000,000
1996 Limited Tax Sewer Bond - 5005-07 2.25% 3,365,073 780,073
1996 Limited Tax Sewer Bond - 5005-08 2.25% 3,995,000 1,175,000
1997 Limited Tax Sewer Bond - 5005-09 2.25% 4,746,780 1,616,780
1998 Limited Tax Sewer Bond - 5005-10 2.25% 10,539,950 4,159,950
1999 Limited Tax Sewer Bond - 5005-11 2.50% 10,120,000 4,130,000
2000 Limited Tax Sewer Bond - 5005-12 2.50% 9,447,830 4,287,830
2001 Limited Tax Sewer Bond - 5005-13 2.50% 10,573,046 5,358,046
2002 Limited Tax Sewer Bond - 5005-14 2.50% 12,381,131 7,416,131
2003 Limited Tax Sewer Bond - 5005-15 2.50% 10,259,826 6,655,688
2004 Limited Tax Sewer Bond - 5005-16 2.13% 3,070,277 2,627,649
83
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Interest Original
Rate Amount Amount
General obligation bonds
Business-type activities (concluded):
2005 Limited Tax Sewer Bond - 5005-17 2.13% $ 4,739,023 $ 5,413,778
2005 Limited Tax Sewer Bond - 5005-18 1.63% 13,389,371 9,494,371
2006 Limited Tax Sewer Bond - 5005-19 1.63% 18,216,346 14,056,346
2007 Limited Tax Sewer Bond - 5005-20 1.63% 24,244,726 19,699,726
2008 Limited Tax Sewer Bond - 5005-21 2.50% 27,500,453 24,075,453
2009 Limited Tax Sewer Bond - 5005-22 2.50% 15,615,000 12,566,528
2010 Limited Tax Sewer Bond - 5411-01 2.50% 2,095,468 6,471,438
2009 Capital Improvement Bonds 4.10-7.05% 9,803,000 9,803,000
2009 Building Authority Refunding Bonds 6.014-6.584% 8,161,691 8,161,691
2012 Building Authority Refunding Bonds 0.55-3.70% 7,200,000 7,200,000
2013 Building Authority Refunding Bonds 2.40% 735,000 735,000
2013 Building Authority Golf Course Refunding Bonds 2.40% 405,000 405,000
$ 329,015,312 $ 182,127,578
At year end, defeased bonds outstanding consisted of $3,305,000 of 1990 Building Authority Bonds,
scheduled to be paid by the escrow agent in installments on June 1 of years 2014 through 2015;
$23,100,000 of 2003 Sewer Revenue and Refunding Bonds scheduled to be paid by the escrow agent in one
payment on May 1 of 2014; and $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.
During fiscal year 2013, the City advance refunded $5,625,892 of 2006 lease purchase agreement - energy
efficiencies bonds, $227,939 of 2007 lease purchase agreement - phone system bonds, $450,000 of 2001
lease purchase agreement - oEtm facility bonds, $715,000 of 2003 building authority municipal parking
system limited tax bonds and $390,000 of 1996 building authority golf course limited tax 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 $7,408,831 of refunded debt. As a result, the
bonds are considered defeased and the liability has been removed from the statement of net position.
The reacquisition price of the refunding bonds exceeded the carrying amount of the refunded debt by
$199,514 and, accordingly, is being amortized of the remaining years of the refunded debt. The refunding
resulted in a savings of $547,885 and an economic gain of$504,344.
During fiscal year 2013, the City advance refunded $6,840,000 of 2003 building authority municipal
parking system taxable 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
$6,840,000 of refunded debt. As a result, the bonds are considered defeased and the liability has been
removed from the statement of net position. The reacquisition price of the refunding bonds exceeded the
carrying amount of the refunded debt by $203,698 and, accordingly, is being amortized of the remaining
years of the refunded debt. The refunding resulted in a savings of $1,957,476 and an economic gain of
$1,567,505.
84
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
During fiscal year 2013, the City advance refunded $23,100,000 of 2003 sewage revenue and refunding
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 $23,100,000 of refunded
debt. As a result, the bonds are considered defeased and the liability has been removed from the
statement of net position. The reacquisition price of the refunding bonds exceeded the carrying amount
of the refunded debt by $1,539,278 and, accordingly, is being amortized of the remaining years of the
refunded debt. The refunding resulted in a savings of$2,490,664 and an economic gain of$2,049,034.
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 and Refunding Bond 2.50% $ 39,880,000 $ 2,365,000
2010 Sewage Disposal System Refunding Bond 1.76% 2,685,000 900,000
2013 Sewer Revenue and Refunding Bond 2.40% 21,765,000 21,765,000
$ 64,330,000 $ 25,030,000
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:
2005 Lease Purchase Agreement - LEPFA Carpet 4.51% $ 126,418 $ 30,213
2005 Lease Purchase Agreement - LEPFA Equipment 4.24% 81,500 23,750
2006 Lease Purchase Agreement - Oldsmobile Park 6.86% 2,000,000 500,000
2007 Lease Purchase Agreement - Oldsmobile Park 5.72% 1,000,000 250,000
2012 Lease Purchase Agreement - Snowmobile 2.40% 147,046 111,543
2013 Lease Purchase Agreement - Garage 2.40% 1,892,332 1,892,332
$ 5,247,296 $ 2,807,838
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 $ 346,743
HUD Section 108 Loan 2.40% 5,900,000 5,900,000
$ 7,166,000 $ 6,246,743
Business-type activities
2003 MEDC loan 3.93% $ 4,180,000 $ 1,702,664
85
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Changes in long-term debt. Long-term liability activity for the year ended June 30, 2013, was as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental activities
General obligation bonds $ 25,727,000 $ 6,350,000 $ 2,145,000 $ 29,932,000 $ 2,787,000
Installment purchase
agreements 8,193,616 2,039,378 7,425,156 2,807,838 1,195,997
Loans payable 512,577 5,900,000 165,834 6,246,743 170,809
Total installment debt 34,433,193 14,289,378 9,735,990 38,986,581 4,153,806
Compensated absences 10,601,091 10,138,900 10,601,091 10,138,900 1,123,684
Accrued workers
compensation 7,131,238 1,118,901 1,264,077 6,986,062 958,714
Accrued tax settlement 208,644 - 52,161 156,483 52,161
Deferred amounts:
For issuance discounts (100,320) (6,833) (93,487) -
For issuance premiums 190,234 34,143 156,091
On refunding (94,438) (173,319) (32,223) (235,534)
$ 52,369,642 $ 25,373,860 $ 21,648,406 $ 56,095,096 $ 6,288,365
Business-type activities
General obligation bonds $ 192,125,645 $ 12,715,971 $ 22,714,038 $ 182,127,578 $ 15,459,930
Revenue bonds 29,525,000 21,765,000 26,260,000 25,030,000 3,265,000
Loans payable 1,637,177 65,487 - 1,702,664 724,372
Total installment debt 223,287,822 34,546,458 48,974,038 208,860,242 19,449,302
Compensated absences 821,553 733,908 821,553 733,908 76,315
Deferred amounts:
For issuance discounts (2,874,620) - (853,745) (2,020,875) -
For issuance premiums 895,816 2,677,789 822,050 2,751,555
On refunding (1,342,466) (1,769,171) (703,967) (2,407,670) -
$ 220,788,105 $ 36,188,984 $ 49,059,929 $ 207,917,160 $ 19,525,617
For the governmental activities, compensated absences and other long-term debt are generally liquidated
by the general fund.
86
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Debt service requirements to maturity for all installment debt of the City are as follows:
Year Governmental Activities Business-type Activities
Ending
June 30 Principal Interest Total Principal Interest Total
2014 $ 4,153,806 $ 1,273,128 $ 5,426,934 $ 19,449,302 $ 5,871,091 $ 25,320,393
2015 3,528,783 1,122,984 4,651,767 16,521,855 5,414,741 21,936,596
2016 3,436,549 1,005,427 4,441,976 14,145,193 4,689,029 18,834,222
2017 3,445,262 881,115 4,326,377 13,814,597 4,314,318 18,128,915
2018 3,137,180 753,035 3,890,215 13,815,905 3,939,925 17,755,830
2019-2023 10,225,000 2,500,623 12,725,623 69,744,645 13,950,704 83,695,349
2024-2028 7,155,000 1,126,923 8,281,923 50,905,325 5,291,345 56,196,670
2029-2033 3,905,001 90,460 3,995,461 9,678,420 781,598 10,460,018
2034 - - - 785,000 35,973 820,973
$ 38,986,581 $ 8,753,695 $ 47,740,276 $ 208,860,242 $ 44,288,724 $ 253,148,966
11. FUND BALANCES - GOVERNMENTAL FUNDS
In accordance with GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type
Definitions, the City classifies fund balances based primarily on the extent to which it is bound to
observe constraints imposed upon the use of the resources reported in governmental funds. Detailed
information on fund balances of governmental funds is as follows:
State and Nonmajor
General Federal Governmental
Fund Programs Funds Totals
Nonspendable
Inventories $ 38,346 $ $ 966,331 $ 1,004,677
Prepaids 37,392 1,875 39,267
Corpus of permanent fund - 1,702,945 1,702,945
75,738 2,671,151 2,746,889
Restricted
Donations 9,400 - 9,400
Major and local streets - 3,196,463 3,196,463
Drug law and narcotics
enforcement 699,949 699,949
Various state and federal grants 14,491 200,000 214,491
Shopping district events
and maintenance - 12,585 12,585
Debt service 178 178
Capital improvements (unexpended
bond proceeds) - - 245,317 245,317
9,400 14,491 4,354,492 4,378,383
87
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
State and Nonmajor
General Federal Governmental
Fund Programs Funds Totals
Committed
Unspent human services ordinance $ 119,663 $ $ - $ 119,663
Unspent police millage 1,219,082 1,219,082
Unspent fire millage 1,637,663 - 1,637,663
City parks - 466,888 466,888
Capital improvements - 3,568,257 3,568,257
2,976,408 4,035,145 7,011,553
Unassigned (deficit) 5,633,528 (619,931) 5,013,597
Total fund balances -
governmental funds $ 8,695,074 $ 14,491 $ 10,440,857 $ 19,150,422
12. NET INVESTMENT IN CAPITAL ASSETS
The composition of net investment in capital assets as of June 30, 2013, was as follows:
Governmental Business-type Component
Activities Activities Units
Capital assets:
Capital assets not being depreciated $ 30,980,336 $ 21,993,747 $ -
Capital assets being depreciated, net 161,960,602 375,918,215 30,695
Total capital assets 192,940,938 397,911,962 30,695
Related debt:
General obligation bonds 29,932,000 182,127,578 -
Revenue bonds - 25,030,000 14,218,165
Installment purchase agreements 2,807,838 - 11,032,622
Loans payable 6,246,743 1,702,664 818,358
Unamortized bond discounts (93,487) (2,020,875) (108,696)
Unamortized bond premiums 156,091 2,751,555
Deferred loss on bond refunding (235,534) (2,407,670) (4,867,905)
Amounts under leases receivable (21,814,795)
Amounts under leases receivable - accrued interest (138,773)
Amounts related to non-capital debt (21,089,811)
Unexpended bond proceeds (245,317) - -
Totalrelated debt 38,568,334 185,229,684 2,733
Net investment in capital assets $ 154,372,604 $ 212,682,278 $ 27,962
13. 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.
88
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
14. 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.
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
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,
2013 2012
Estimated liability, beginning of year $ 897,523 $ 1,402,760
Estimated claims incurred,
including changes in estimates 11,130,338 12,051,055
Claim payments (11,213,847) (12,556,292)
Estimated liability, end of year $ 814,014 $ 897,523
The City is self-insured for workers' compensation costs. The City estimates the liability for workers'
compensation claims that have been incurred through the end of the fiscal year, including those claims
that have been reported as well as those that have not yet been reported to the City. The current
liability is accounted for in the general fund, with long term liabilities accounted for in the Statement of
Net Position. The City has liability insurance coverage up to a maximum amount of $16,000,000 per
occurrence with a $350,000 deductible. Changes in the estimated long-term liability as well as the total
estimated cost of claims for the past two fiscal years were as follows:
Fiscal Year Ended June 30,
2013 2012
Estimated liability, beginning of year $ 7,131,238 $ 6,861,277
Estimated claims incurred,
including changes in estimates 1,118,901 1,454,736
Claim payments (1,264,077) (1,184,775)
Estimated liability, end of year $ 6,986,062 $ 7,131,238
89
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
15. PROPERTY TAXES
Property taxes attach as an enforceable lien on property as of the date they are levied. City, community
college, and 50% of school taxes are levied and due July 1 and become delinquent after August 31.
County taxes and the balance of school taxes are levied and due December 1 and become delinquent
after February 14. In March, taxes on real property still delinquent are purchased by the County's tax
revolving funds. Collections of community college, school, and county taxes and remittances are
accounted for in the general fund. City property tax revenues are recognized in the fiscal year for which
the taxes are levied to the extent that they result in current receivables (i.e., are collected within 60
days after fiscal year-end).
The City is permitted by charter and state law to levy taxes up to $20.000 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, 2013 was $19.44 per $1,000 of taxable value.
16. 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.
17. 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, 2011, was $26,068,735; the City's total payroll was $51,197,570. Administration of the plan is funded
through the general fund.
90
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
As of December 31, 2011, employee membership data was as follows:
Retirees and beneficiaries currently receiving
benefits and terminated employees entitled
to benefits but not yet receiving them 844
Active members:
Vested 361
Nonvested 120
481
All members may retire at age 50 with 25 or more years of credited service, or age 58 with 8 or more
years of credited service. Members are vested after completing 8 years of credited service. For all
members, annual regular retirement allowances are determined by multiplying total credited service
times 1.8% to 2.75% 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 5.5% and 6.5% 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, 2013,
was determined using an entry age actuarial funding method. Unfunded actuarial accrued liabilities are
being amortized as a level percent of payroll over a closed 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 7.8% 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 7.8% per year compounded
annually (b) projected salary increases of 3.56% to 5.37% per year (including 3.3% attributable to
inflation) depending on age attributable to seniority/merit and (c) assumption that benefits generally will
not increase after retirement.
91
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
During the year ended June 30, 2013, total contributions of $9,833,898 were made in accordance with
actuarially determined requirements computed through an actuarial valuation performed as of December
31, 2011. The City contributed $8,586,536 (32.94% of projected valuation payroll), excluding contributions
for health insurance; employees contributed $1,247,364 (4.78% of projected valuation payroll). The City's
contribution consisted of (a) $1,955,155 normal cost (7.5% of projected valuation payroll) and (b)
$6,631,379 amortization of the unfunded actuarial accrued liability (25.44% of projected valuation
payroll).
At December 31, 2011, the unfunded actuarial accrued liability was determined as follows:
Actuarial accrued liability for:
Active participants (361 vested and 120 non-vested) $ 58,111,273
Retired participants and beneficiaries currently
receiving benefits (844 recipients) 207,928,773
Vested terminated participants not yet receiving benefits (67) 5,507,600
Member benefit reserve 15,759,061
Total actuarial accrued liability 287,306,707
Actuarial value of assets (smoothed market value) 177,100,863
Unfunded actuarial accrued liability $ 110,205,844
Covered payroll $ 26,068,735
Unfunded actuarial accrued liability as a
percentage of covered payroll 423%
* Excluding reserve for health insurance
Annual required contribution $ 8,586,536
Interest on net pension obligtion 4,907
Adjustment to annual required contribution (3,701)
Annual net pension cost 8,587,742
Contributions made (8,586,536)
Change in net pension obligation 1,206
Net pension obligation, beginning of year 62,909
Net pension obligation, end of year $ 64,115
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.
92
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Three-Year Trend Information (amounts in thousands)
Annual Net Pension
Years Ended Pension Cost Percentage (Asset)
June 30, (APC) Contributed Obligation
2011 $ 7,297 100% (10)
2012 7,597 99% 63
2013 8,588 100% 64
(1) The FY 2012 City contribution was reduced by $73,345 in recognition of additional contributions by
International United Auto Workers (UAW) employees, which were negotiated and contributed after the
establishment of the June 30, 2012 ARC from the December 31, 2010 valuation.
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, 2011,
was $25,128,835, the City's total payroll was $51,197,570. Administration of the plan is funded through
the general fund.
As of December 31, 2011, 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 671
Active members:
Vested 280
Nonvested 82
362
Members may retire at age 55, or at any age with 25 or more years of credited service. Members are
vested after completing 10 years of credited service. Members are required to retire at age 60 (Police) or
70 (Fire). 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.
93
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
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 9.08% 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.
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, 2013,
was determined using an entry age actuarial funding method. Unfunded actuarial accrued liabilities are
being amortized as a level percent of payroll over a closed 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 7.8% 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 7.8% per year compounded
annually (b) projected salary increases of 4.1% to 10.5% (including 3.3% attributable to inflation)
depending on age attributable to seniority/merit and (c) assumption that benefits generally will not
increase after retirement.
During the year ended June 30, 2013, total contributions of $12,512,874 were made in accordance with
actuarially determined requirements computed through an actuarial valuation performed as of December
31, 2011. The City contributed $10,133,599 (40.33% of projected valuation payroll), excluding
contributions for health insurance; employees contributed $2,379,275 (9.47% of projected valuation
payroll). The City's contribution consisted of (a) $3,585,885 normal cost (14.27% of projected valuation
payroll) and (b) $6,547,714 amortization of the unfunded actuarial accrued liability (26.06% of projected
valuation payroll).
94
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
At December 31, 2011, the actuarial accrued liability in excess of assets was determined as follows:
Actuarial accrued liability for:
Active participants (280 vested and 82 non-vested) $ 116,327,833
Retired participants and beneficiaries currently
receiving benefits (671 recipients) 253,223,779
Vested terminated participants not yet receiving benefits (16) 2,995,898
Total actuarial accrued liability 372,547,510
Actuarial value of assets (smoothed market value) * 264,492,738
Unfunded actuarial accrued liability $ 108,054,772
Covered payroll $ 25,128,835
Unfunded actuarial accrued liability as a
percentage of covered payroll 430%
Excluding reserve for health insurance
Annual required contribution $ 10,133,599
Interest on net pension obligation 13,700
Adjustment to annual required contribution (10,333)
Annual net pension cost 10,136,966
Contributions made (10,133,599)
Change in net pension obligation 3,367
Net pension obligation, beginning of year 175,646
Net pension obligation, end of year $ 179,013
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.
95
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Three-Year Trend Information (amounts in thousands)
Annual Net Pension
Years Ended Pension Cost Percentage (Asset)
June 30, (APC) Contributed Obligation
2011 $ 8,240 100% (9)
2012 9,242 98% 176
2013 10,137 100% 179
(1) The FY 2012 City contribution was reduced by $185,093 in recognition of additional contributions by
International Association of Firefighters (IAFF) employees, which were negotiated and contributed after
the establishment of the June 30, 2012 ARC from the December 31, 2010 valuation.
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 20, 1990 and prior to July 1, 2009. The City contributes an
amount equal to 6.0% of the employees' wages for retirement benefits. Contributions made by
employees vest immediately, and contributions made by the City vest after three years of full-time
employment.
During the year, the City's required and actual contributions amounted to $16,692, which was
approximately 6% of covered payroll of$278,197. There were no employee contributions.
Also included are members of Teamsters local 214 hired subsequent to September 16, 2012. Employees
are required to contribute 3% of their wages and the City contributes 3% of their wages for retirement
benefits. Contributions made by employees vest immediately, and contributions made by the City vest
after seven years of full-time employment.
During the year, the City's required and actual contributions amounted to $398, which was approximately
3% of covered payroll of$13,279.
The plan does not issue stand-alone financial statements.
96
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Financial statements for individual pension and employee benefit plans:
Pension and Other Postemployment Benefits Net Position
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 $ 13,145,701 $ $ 16,995,933 $ $ - $ $ 30,141,634
Investments:
Money market funds 2,915,096 276,686 11,228,858 1,044,840 426,860 15,892,340
Government obligations 23,852,097 2,254,964 29,429,663 2,738,416 - 58,275,140
Corporate bonds 23,740,242 2,244,390 31,317,803 2,914,107 60,216,542
Common stocks 45,564,250 4,307,619 69,010,901 6,421,432 - 125,304,202
Mutualfunds 76,002,588 7,185,243 120,523,164 11,214,624 1,274,470 16,069,423 232,269,512
Contribution receivable - - - - 1,017 - 1,017
Dividends and interest receivable 215,055 - 280,914 - - 131,979 627,948
Total assets 185,435,029 16,268,902 278,787,236 24,333,419 1,702,347 16,201,402 522,728,335
Liabilities
Accounts payable 4,233,253 - 3,388,311 - - - 7,621,564
Net position held in trust for
Pension benefits 181,201,776 - 275,398,925 - 1,702,347 - 458,303,048
Other postem ployment benefits - 16,268,902 - 24,333,419 - 16,201,402 56,803,723
Total net position $ 181,201,776 $ 16,268,902 $ 275,398,925 $ 24,333,419 $ 1,702,347 $ 16,201,402 $ 515,106,771
97
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Changes in Pension and Other Postemployment Benefits Net Position
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
Additions
Investment income:
Net appreciation
in fair value of investments $ 23,086,826 $ 860,170 $ 32,951,031 $ 5,477,607 $ - $ - $ 62,375,634
Interest income 3,882,842 - 4,304,204 - 202,506 1,450,879 9,840,431
Dividend income 961,807 1,481,411 - - 2,443,218
Investment expenses - - - (7,112) - (7,112)
Net investment income 27,931,475 860,170 38,736,646 5,477,607 195,394 1,450,879 74,652,171
Contributions:
Employer 8,586,536 10,147,780 10,133,599 11,170,202 17,090 700,000 40,755,207
Plan members 1,247,364 - 2,379,275 - - - 3,626,639
Total contributions 9,833,900 10,147,780 12,512,874 11,170,202 17,090 700,000 44,381,846
Total additions 37,765,375 11,007,950 51,249,520 16,647,809 212,484 2,150,879 119,034,017
Deductions
Participant benefits 21,128,444 9,847,780 25,736,483 10,470,202 189,678 - 67,372,587
Administrative expense 755,916 - 1,075,804 - - 1,831,720
Total deductions 21,884,360 9,847,780 26,812,287 10,470,202 189,678 69,204,307
Net change in net position
held in trust 15,881,015 1,160,170 24,437,233 6,177,607 22,806 2,150,879 49,829,710
Net position held in trust
for pension and other
postemployment benefits:
Beginning of year 165,320,761 15,108,732 250,961,692 18,155,812 1,679,541 14,050,523 465,277,061
End of year $181,201,776 $ 16,268,902 $275,398,925 $ 24,333,419 $ 1,702,347 $ 16,201,402 $515,106,771
98
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
18. OTHER POSTEMPLOYMENT BENEFITS
Primary Government
Plan Description. The City of Lansing contributes to the Employees' Retirement System, the Police and
Fire Retirement System, and the Voluntary Employees Beneficiary Association amounts to pre-fund
postemployment healthcare. In the Employees' Retirement System and the Police and Fire Retirement
System, these other postemployment benefits (OPEB) are set up as reserves in the pension plans, and
their investments are commingled with the investments of the pension plan. Portfolio makeup is reported
as a percentage of total pension plan assets. Earnings are calculated based on a seven year smoothed rate
of return of the retirement systems. Eligible participants include any retirees who receive pension
benefits under 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 Employment 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 contributed $700,000 to the Plan.
99
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Employees'Retirement &1stem
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.
Membership of the Plan consisted of the following at December 31, 2011, the date of the most recent
actuarial valuation:
Retirees and beneficiaries receiving benefits 675
Terminated plan members entitled to but
not yet receiving benefits 65
Active plan members 481
Total 1,221
During the year, the City contributed $10,147,780 (direct benefit payments of $9,147,780 and City
contributions of$1,000,000) to the Plan.
Annual required contribution $ 12,769,739
Interest on net OPEB obligation 57,507
Adjustment to annual required contribution (51,579)
Net OPEB cost (expense) 12,775,667
Contributions made (10,147,780)
Increase in net OPEB obligation 2,627,887
Net OPEB obligation, beginning of year 1,337,371
Net OPEB obligation, end of year $ 3,965,258
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
of Annual Net OPEB
Annual OPEB OPEB Cost (Asset)
Year Ended Cost Contributed Obligation
2011 $ 8,819,018 110.8% $ (3,214,740)
2012 14,915,958 69.5% 1,337,371
2013 12,775,667 79.4% 3,965,258
100
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
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.
Funded Status and Funding Progress. As of December 31, 2011, the most recent actuarial valuation date,
the Plan was 12.6 percent funded. The actuarial accrued liability for benefits was $226,915,143, and the
actuarial value of assets was $28,680,151, resulting in an unfunded actuarial accrued liability (UAAL) of
$198,234,992. The covered payroll (annual payroll of active employees covered by the Plan) was
$24,813,423, and the ratio of the UAAL to the covered payroll was 798.9 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, 2011 actuarial valuation, the entry age actuarial cost method was used. The
actuarial assumptions included a 4.3 percent investment rate of return (net of administrative expenses),
which includes a 3.3 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, 2011, was thirty years.
101
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Police and Fire Retirement &1stem
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 $104.90 per month for each covered retiree and
dependent(s). The payments are charged to the fringe benefit internal service fund of the City and are
recognized as expenses as payments are made.
Membership of the Plan consisted of the following at December 31, 2011, the date of the most recent
actuarial valuation:
Retirees and beneficiaries receiving benefits 478
Terminated plan members entitled to but
not yet receiving benefits 16
Active plan members 362
Total 856
During the year, the City contributed $11,170,202 (direct benefit payments of $10,470,202 and City
contributions of$700,000) to the Plan.
Annual required contribution $ 17413,968
Interest on net OPEB obligation 1:183,511
Adjustment to annual required contribution (1,107,787)
Net OPEB cost (expense) 17,489,692
Contributions made (11,170,202)
Increase in net OPEB obligation 6,319,490
Net OPEB obligation, beginning of year 27,523,519
Net OPEB obligation, end of year $ 33,843,009
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
of Annual
Annual OPEB OPEB Cost Net OPEB
Year Ended Cost Contributed Obligation
2011 $ 16,474,153 59.8% $ 27,523,519
2012 17,844,115 55.4% 27,523,519
2013 17,489,692 63.9% 33,843,009
102
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
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.
Funded Status and Funding Progress. As of December 31, 2011, the most recent actuarial valuation date,
the Plan was 7.4 percent funded. The actuarial accrued liability for benefits was $252,220,445, and the
actuarial value of assets was $18,678,699, resulting in an unfunded actuarial accrued liability (UAAL) of
$233,541,746. The covered payroll (annual payroll of active employees covered by the Plan) was
$25,128,835, and the ratio of the UAAL to the covered payroll was 929.4 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, 2011 actuarial valuation, the entry age actuarial cost method was used. The
actuarial assumptions included a 4.3 percent investment rate of return (net of administrative expenses),
which includes a 3.0 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, 2011, was thirty years.
103
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
19. ADOPTION OF NEW ACCOUNTING PRONOUCEMENT
The City adopted the provisions of GASB Statement No. 63, Financial Reporting of Deferred Outflows of
Resources, Deferred Inflows of Resources, and Net Position in the current year. Implementation
established new account classifications, however the implementation of this standard had no effect on
total equity.
20. SUBSEQUENT EVENT
On September 12, 2013, the City signed an installment purchase agreement for the purchase of recycling
trucks and carts for a total of $3,288,555. Payments are to be made semi-annually over a 9 year period,
beginning on April 1, 2014. The agreement includes interest at a rate of 1.96 percent.
■ ■ ■ ■ ■
104
REQUIRED SUPPLEMENTARY INFORMATION
105
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Employees' Retirement System
(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)
12/31/2006 $ 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%
12/31/2010 187,441 269,462 82,021 69.6% 27,767 295.4%
12/31/2011 177,101 287,307 110,206 61.6% 26,069 422.7%
Schedule of Employer Contributions
Annual
Required
Year Ended Contribution Percentage
June 30, (ARC) Contributed
2008 $ 6,022 100.0%
2009 6,048 105.0%
2010 6,472 93.4% "
2011 7,297 100.0%
2012 7,597 99.0% (2)
2013 8,587 100.0%
(1) 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.
(2) The FY 2012 City contribution was reduced by $73,345 in recognition of additional
contributions by International United Auto Workers (UAW) employees, which were
negotiated and contributed after the establishment of the June 30, 2012 ARC from the
December 31, 2010 valuation.
106
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Police and Fire Retirement System
(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)
12/31/2006 $ 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%
12/31/2010 276,377 359,293 82,916 76.9% 28,536 290.6%
12/31/2011 264,493 372,548 108,055 71.0% 25,129 430.0%
Schedule of Employer Contributions
Annual
Required
Year Ended Contribution Percentage
June 30, (ARC) Contributed
2008 $ 6,521 100.0%
2009 6,094 106.0%
2010 7,179 94.6%
2011 8,241 100.0%
2012 9,242 98.0% '2)
2013 10,134 100.0%
(1) 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.
(2) The FY 2012 City contribution was reduced by $185,093 in recognition of additional
contributions by International Association of Firefighters (IAFF) employees, which were
negotiated and contributed after the establishment of the June 30, 2012 ARC from the
December 31, 2010 valuation.
107
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Other Postemployment Benefit Plans
(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%
12/31/2011 28,680 226,915 198,235 12.6% 24,813 798.9%
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%
12/31/2011 18,679 252,220 233,541 7.4% 25,129 929.4%
Employees' Retirement System and VEBA- Schedule of Employer Contributions
Annual
Required Percentage
Year Ended Contribution of ARC
June 30, (ARC) Contributed
2011 $ 8,867 110.2%
2012 14,981 69.2%
2013 12,770 79.5%
Police and Fire Retirement System - Schedule of Employer Contributions
Annual
Required Percentage
Year Ended Contribution of ARC
June 30, (ARC) Contributed
2011 $ 16,202 60.8%
2012 17,450 56.7%
2013 17,414 64.1
108
COMBINING AND INDIVIDUAL FUND FINANCIAL
STATEMENTS AND SCHEDULES
109
CITY OF LANSING, MICHIGAN
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2013
Special Debt Capital
Revenue Service Projects Permanent Totals
Assets
Cash and cash equivalents $ 62,577 $ - $ 587,919 $ - $ 650,496
Equity in pooled cash 3,664,645 178 1,083,851 1,702,945 6,451,619
Investments - - 425,957 - 425,957
Accounts receivable, net 14,775 139,437 154,212
Special assessments receivable - 607,881 607,881
Loans receivable 1,385,000 - 1,385,000
Accrued interest receivable 2,078,617 - 2,078,617
Due from other funds 1,500,000 2,807,416 4,307,416
Due from other governments 1,811,473 1,070 1,812,543
Inventories 966,331 - 966,331
Prepaids 1,875 - - 1,875
Total assets $ 11,485,293 $ 178 $ 5,653,531 $ 1,702,945 $ 18,841,947
Liabilities
Accounts payable $ 974,639 $ - $ 234,315 $ - $ 1,208,954
Deposits payable 87,134 - 87,134
Accrued payroll 34,446 34,446
Indemnity bonds 5,050 - 5,050
Due to other funds 1,430,000 1,007,567 2,437,567
Interfund payable - 6,309 6,309
Advances from other funds - 469,327 469,327
Due to other governments 346,316 - 346,316
Deferred revenue 3,263,617 542,370 3,805,987
Total liabilities 6,141,202 2,259,888 - 8,401,090
Fund balances
Nonspendable 968,206 - - 1,702,945 2,671,151
Restricted 4,108,997 178 245,317 - 4,354,492
Committed 466,888 - 3,568,257 4,035,145
Unassigned (deficit) (200,000) (419,931) - (619,931)
Total fund balances 5,344,091 178 3,393,643 1,702,945 10,440,857
Total liabilities and fund balances $ 11,485,293 $ 178 $ 5,653,531 $ 1,702,945 $ 18,841,947
110
CITY OF LANSING, MICHIGAN
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2013
Special Debt Capital
Revenue Service Projects Permanent Totals
Revenues
Taxes and special assessments $ 407,264 $ 522,739 $ 74,875 $ $ 1,004,878
Intergovernmental 10,611,793 - - 10,611,793
Charges for services 2,879,021 564,945 3,443,966
Fines and forfeits 1,242,227 - 1,242,227
Interest - 11,496 5,211 16,707
Contributions 10,000 - - 10,000
Otherrevenues 423,746 - - 423,746
Total revenues 15,574,051 522,739 651,316 5,211 16,753,317
Expenditures
Current expenditures:
General government 2,664,875 - - - 2,664,875
Public safety 1,943,232 1,943,232
Highways and streets 9,937,423 9,937,423
Recreation and culture 235 - 235
Debt service:
Principal 1,325,834 620,000 1,945,834
Interest 653,166 162,806 - 815,972
Capital outlay 3,149,263 - 2,340,354 5,489,617
Total expenditures 19,674,028 782,806 2,340,354 - 22,797,188
Revenues over (under)
expenditures (4,099,977) (260,067) (1,689,038) 5,211 (6,043,871)
Other financing sources (uses)
Transfers in 3,842,454 260,245 2,289,174 19,652 6,411,525
Transfers out (613,336) - (1,424,344) (5,211) (2,042,891)
Issuance of long-term debt - - 147,046 - 147,046
Total other financing sources (uses) 3,229,118 260,245 1,011,876 14,441 4,515,680
Net change in fund balances (870,859) 178 (677,162) 19,652 (1,528,191)
Fund balances, beginning of year 6,214,950 - 4,070,805 1,683,293 11,969,048
Fund balances, end of year $ 5,344,091 $ 178 $ 3,393,643 $ 1,702,945 $ 10,440,857
111
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112
CITY OF LANSING, MICHIGAN
Nonmajor Special Revenue Funds
Major Streets Fund - This fund accounts for revenues received from the State of Michigan for the
City's share of state gasoline and weight taxes, which is used for maintenance of major streets.
Local Streets Fund - This fund accounts for revenues received from the State of Michigan for the
City's share of state gasoline and weight taxes, which is used for maintenance of local streets.
Drug Law Enforcement 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.
Community Development Block Grant Program Fund - This fund accounts for revenues received
from the Department of Housing and Urban Development. These revenues are restricted to
accomplishing the various objectives of Community Development Block Grant Programs, within
specific target areas.
Downtown Lansing, Inc. Fund - This fund accounts for assessments received from businesses
located in the district. The revenues are used for special events and maintenance of the district.
Building Department Fund - This fund accounts for revenues and expenditures resulting from the
enforcement of the State Construction Code Act of 1999 (PA 245 of 1999).
Parks Department Fund - This fund accounts for contributions and transfers which are restricted
for park expenditures.
Tri-County Metro Fund - This fund accounts for the operations of the Tri-County Metro Narcotics
Squad.
113
CITY OF LANSING, MICHIGAN
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2013
Community
Development
Major Local Drug Law Block Grant Downtown
Streets Streets Enforcement Program Lansing, Inc.
Assets
Cash and cash equivalents $ - $ - $ 20,000 $ - $
Equity in pooled cash 974,248 647,413 58,597 143,886 21,490
Accounts receivable, net - - 7,210 - -
Loans receivable - 1,385,000
Accrued interest receivable - 2,078,617
Due from other funds 1,500,000 - -
Due from other governments 1,119,952 305,076 342,950
Inventories 966,331 - - -
Prepaids - - - - 1,275
Total assets $ 4,560,531 $ 952,489 $ 85,807 $ 3,950,453 $ 22,765
Liabilities
Accounts payable $ 646,298 $ 68,878 $ 71,489 $ 81,663 $ 6,006
Deposits payable - - - - -
Accrued payroll - 14,318 5,173 2,899
Indemnity bonds 5,050 - - - -
Due to other funds - 630,000 600,000
Due to other governments - -
Deferred revenue - - - 3,263,617 -
Total liabilities 651,348 698,878 85,807 3,950,453 8,905
Fund balances
Nonspendable 966,331 - - - 1,275
Restricted 2,942,852 253,611 200,000 12,585
Committed - - - -
Unassigned (deficit) - - (200,000) -
Total fund balances 3,909,183 253,611 - - 13,860
Total liabilities and fund balances $ 4,560,531 $ 952,489 $ 85,807 $ 3,950,453 $ 22,765
114
Building Parks Tri-County
Department Department Metro Totals
$ - $ - $ 42,577 $ 62,577
205,984 466,888 1,146,139 3,664,645
7,565 - - 14,775
- 1,385,000
2,078,617
- 1,500,000
43,495 1,811,473
- - 966,331
600 - - 1,875
$ 214,149 $ 466,888 $ 1,232,211 $ 11,485,293
$ 1,816 $ - $ 98,489 $ 974,639
- 87,134 87,134
11,733 323 34,446
- - 5,050
200,000 - 1,430,000
- 346,316 346,316
- - 3,263,617
213,549 532,262 6,141,202
600 - 968,206
- - 699,949 4,108,997
466,888 - 466,888
- - - (200,000)
600 466,888 699,949 5,344,091
$ 214,149 $ 466,888 $ 1,232,211 $ 11,485,293
115
CITY OF LANSING, MICHIGAN
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Special Revenue Funds
For the Year Ended June 30, 2013
Community
Development
Major Local Drug Law Block Grant Downtown
Streets Streets Enforcement Program Lansing, Inc.
Revenues
Taxes and special assessments $ - $ - $ $ - $ 407,264
Intergovernmental 7,322,425 1,842,536 679,929 -
Charges for services 579,627 565,654 - 5,120
Fines and forfeits - - 1,019,089 -
Contributions - - - - 10,000
Otherrevenues 172,117 68 - 69,870 181,691
Total revenues 8,074,169 2,408,258 1,019,089 749,799 604,075
Expenditures
Current expenditures:
General government - - - - 650,661
Public safety - - 918,655 -
Highways and streets 5,839,266 4,098,157 -
Recreation and culture - -
Debt service:
Principal 444,234 881,600
Interest 169,309 483,857 -
Capitaloutlay 1,988,165 411,299 - 749,799 -
Total expenditures 8,440,974 5,874,913 918,655 749,799 650,661
Revenues over (under)
expenditures (366,805) (3,466,655) 100,434 - (46,586)
Other financing sources (uses)
Transfers in 266,951 3,224,441 - 39,180
Transfers out (587,648) - (25,688) -
Total other financing
sources (uses) (320,697) 3,224,441 (25,688) 39,180
Net change in fund balances (687,502) (242,214) 74,746 (7,406)
Fund balances (deficit), beginning of year 4,596,685 495,825 (74,746) 21,266
Fund balances, end of year $ 3,909,183 $ 253,611 $ - $ $ 13,860
116
Building Parks Tri-County
Department Department Metro Totals
$ $ $ - $ 407,264
766,903 10,611,793
1,728,620 - 2,879,021
- 223,138 1,242,227
- 10,000
- - 423,746
1,728,620 990,041 15,574,051
2,014,214 - 2,664,875
- 1,024,577 1,943,232
- 9,937,423
235 235
- 1,325,834
653,166
- - - 3,149,263
2,014,214 235 1,024,577 19,674,028
(285,594) (235) (34,536) (4,099,977)
286,194 - 25,688 3,842,454
- - (613,336)
286,194 - 25,688 3,229,118
600 (235) (8,848) (870,859)
- 467,123 708,797 6,214,950
$ 600 $ 466,888 $ 699,949 $ 5,344,091
117
CITY OF LANSING, MICHIGAN
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Nonmajor Special Revenue Funds
For the Year Ended June 30, 2013
Major Streets
Actual Over
Final (Under) Final
Budget Actual Budget
Revenues
Taxes and special assessments $ $ $ -
Intergovernmental 7,299,600 7,322,425 22,825
Charges for services 390,600 579,627 189,027
Fines and forfeits - - -
Contributions - - -
Otherrevenues 90,000 172,117 82,117
Total revenues 7,780,200 8,074,169 293,969
Expenditures
Current expenditures:
General government - - -
Public safety - -
Highways and streets 5,888,160 5,839,266 (48,894)
Recreation and culture - -
Debt service:
Principal 444,234 444,234 -
Interest 165,569 169,309 3,740
Capital outlay 3,826,977 1,988,165 (1,838,812)
Total expenditures 10,324,940 8,440,974 (1,883,966)
Revenues over (under) expenditures (2,544,740) (366,805) 2,177,935
Other financing sources (uses)
Transfers in 360,642 266,951 (93,691)
Transfers out (637,648) (587,648) 50,000
Total other financing sources (uses) (277,006) (320,697) (43,691)
Net change in fund balances (2,821,745) (687,502) 2,134,243
Fund balances (deficit), beginning of year 4,596,685 4,596,685 -
Fund balances, end of year $ 1,774,940 $ 3,909,183 $ 2,134,243
118
Local Streets Drug Law Enforcement
Actual Over Actual Over
Final (Under) Final Final (Under) Final
Budget Actual Budget Budget Actual Budget
2,832,809 1,842,536 (990,273)
346,054 565,654 219,600 - -
- - - 1,149,500 1,019,089 (130,411)
2,000 68 (1,932) - -
3,180,863 2,408,258 (772,605) 1,149,500 1,019,089 (130,411)
- - 838,201 918,655 80,454
4,579,070 4,098,157 (480,913) - - -
881,600 881,600 -
475,608 483,857 8,249
716,113 411,299 (304,814) - - -
6,652,391 5,874,913 (777,478) 838,201 918,655 80,454
(3,471,528) (3,466,655) 4,873 311,299 100,434 (210,865)
3,275,713 3,224,441 (51,272) - -
- - (25,688) (25,688)
3,275,713 3,224,441 (51,272) (25,688) (25,688)
(195,815) (242,214) (46,399) 285,611 74,746 (210,865)
495,825 495,825 (74,746) (74,746)
$ 300,010 $ 253,611 $ (46,399) $ 210,865 $ $ (210,865)
continued...
119
CITY OF LANSING, MICHIGAN
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Nonmajor Special Revenue Funds
For the Year Ended June 30, 2013
Community Development Block Grant Program
Actual Over
Final (Under) Final
Budget Actual Budget
Revenues
Taxes and special assessments $ $ $
Intergovernmental 4,283,985 679,929 (3,604,056)
Charges for services - -
Fines and forfeits
Contributions - -
Otherrevenues (250,370) 69,870 320,240
Total revenues 4,033,615 749,799 (3,283,816)
Expenditures
Current expenditures:
General government - -
Public safety
Highways and streets
Recreation and culture
Debt service:
Principal
Interest - -
Capital outlay 4,033,615 749,799 (3,283,816)
Total expenditures 4,033,615 749,799 (3,283,816)
Revenues over (under) expenditures - -
Other financing sources (uses)
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fui Fund balances (deficit), beginning of year
Fu Fund balances, end of year $ $ $
120
Downtown Lansing, Inc. Building Department
Actual Over Actual Over
Final (Under) Final Final (Under) Final
Budget Actual Budget Budget Actual Budget
$ 395,000 $ 407,264 $ 12,264 $ $ $
4,800 5,120 320 1,921,343 1,728,620 (192,723)
10,000 10,000
197,955 181,691 (16,264) -
607,755 604,075 (3,680) 1,921,343 1,728,620 (192,723)
668,118 650,661 (17,457) 2,114,500 2,014,214 (100,286)
668,118 650,661 (17,457) 2,114,500 2,014,214 (100,286)
(60,363) (46,586) 13,777 (193,157) (285,594) (92,437)
39,180 39,180 - 193,157 286,194 93,037
39,180 39,180 193,157 286,194 93,037
(21,183) (7,406) 13,777 600 600
21,266 21,266 - - -
$ 83 $ 13,860 $ 13,777 $ $ 600 $ 600
continued...
121
CITY OF LANSING, MICHIGAN
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Nonmajor Special Revenue Funds
For the Year Ended June 30, 2013
Parks Department _
Actual Over
Final (Under) Final
Budget Actual Budget
Revenues
Taxes and special assessments $ $ $
Intergovernmental
Charges for services
Fines and forfeits
Contributions
Otherrevenues
Total revenues
Expenditures
Current expenditures:
General government
Public safety
Highways and streets
Recreation and culture 41,175 235 (40,940)
Debt service:
Principal - -
Interest
Capital outlay - -
Total expenditures 41,175 235 (40,940)
Revenues over (under) expenditures (41,175) (235) 40,940
Other financing sources (uses)
Transfers in - -
Transfers out
Total other financing sources (uses) - -
Net change in fund balances (41,175) (235) 40,940
Fund balances (deficit), beginning of year 467,123 467,123 -
Fund balances, end of year $ 425,948 $ 466,888 $ 40,940
122
Tri-County Metro Totals
Actual Over Actual Over
Final (Under) Final Final (Under) Final
Budget Actual Budget Budget Actual Budget
$ - $ - $ $ 395,000 $ 407,264 $ 12,264
584,927 766,903 181,976 15,001,321 10,611,793 (4,389,528)
- - - 2,662,797 2,879,021 216,224
200,000 223,138 23,138 1,349,500 1,242,227 (107,273)
- - - 10,000 10,000 -
- - 39,585 423,746 384,161
784,927 990,041 205,114 19,458,202 15,574,051 (3,884,151)
- - - 2,782,618 2,664,875 (117,743)
780,214 1,024,577 244,363 1,618,415 1,943,232 324,817
- - - 10,467,230 9,937,423 (529,807)
41,175 235 (40,940)
1,325,834 1,325,834 -
641,177 653,166 11,989
- - - 8,576,704 3,149,263 (5,427,441)
780,214 1,024,577 244,363 25,453,153 19,674,028 (5,779,125)
4,713 (34,536) (39,249) (5,994,951) (4,099,977) 1,894,974
25,688 25,688 3,894,380 3,842,454 (51,926)
- - (663,336) (613,336) 50,000
25,688 25,688 37231,044 3,229,118 (1,926)
30,401 (8,848) (39,249) (2,763,906) (870,859) 1,893,047
708,797 708,797 6,214,950 6,214,950 -
$ 739,198 $ 699,949 $ (39,249) $ 3,451,044 $ 5,344,091 $ 1,893,047
concluded
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124
CITY OF LANSING, MICHIGAN
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.
125
CITY OF LANSING, MICHIGAN
Combining Balance Sheet
Nonmajor Debt Service Funds
June 30, 2013
1998 1999 2001
Building Fire Fire
Authority Station Station Totals
Assets
Equity in pooled cash $ $ 178 $ $ 178
Fund balances
Restricted $ $ 178 $ $ 178
126
CITY OF LANSING, MICHIGAN
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Debt Service Funds
For the Year Ended June 30, 2013
1998 1999 2001
Building Fire Fire
Authority Station Station Totals
Revenues
Taxes and special assessments $ - $ 244,042 $ 278,697 $ 522,739
Expenditures
Debt service:
Principal 130,000 180,000 310,000 620,000
Interest 41,300 63,864 57,642 162,806
Total expenditures 171,300 243,864 367,642 782,806
Revenues over (under)
expenditures (171,300) 178 (88,945) (260,067)
Other financing sources
Transfers in 171,300 - 88,945 260,245
Net change in fund balances - 178 - 178
Fund balances, beginning of year - -
Fund balances, end of year $ $ 178 $ $ 178
127
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128
CITY OF LANSING, MICHIGAN
Nonmajor Capital Projects Funds
1990 Environmental 1 Fund - This fund accounts for the proceeds of the 1990 $7,000,000
environmental bonds.
1990 Environmental 11 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.
129
CITY OF LANSING, MICHIGAN
Combining Balance Sheet
Nonmajor Capital Projects Funds
June 30, 2013
1990 1990 Lansing
Environ- Environ- Special Center
mental mentalll Assessments Improvements
Assets
Cash and cash equivalents $ - $ - $ $ -
Equity in pooled cash 382 175,406 141,144
Investments - - -
Accounts receivable, net
Special assessments receivable:
Current 65,511
Deferred 542,370
Due from other funds -
Due from other governments - - 1,070 -
Total assets $ 382 $ 175,406 $ 608,951 $ 141,144
Liabilities
Accounts payable $ $ 4,714 $ 17,185 $ 66,901
Due to other funds - - -
Interfund payables -
Advance from other funds 469,327
Deferred revenue - 542,370 -
Total liabilities 4,714 1,028,882 66,901
Fund balances
Restricted 382 170,692 - 74,243
Committed - - -
Unassigned (deficit) - - (419,931) -
Total fund balances (deficit) 382 170,692 (419,931) 74,243
Total liabilities and fund balances $ 382 $ 175,406 $ 608,951 $ 141,144
130
2009 Build
MTF America
Bonds Construction Other Totals
$ 587,919 $ $ - $ 587,919
- 766,919 1,083,851
425,957 - 425,957
- 139,437 139,437
- 65,511
- 542,370
2,807,416 2,807,416
- - - 1,070
$ 587,919 $ 425,957 $ 3,713,772 $ 5,653,531
$ $ - $ 145,515 $ 234,315
587,919 419,648 - 1,007,567
- 6,309 6,309
- 469,327
- - - 542,370
587,919 425,957 145,515 2,259,888
- - - 245,317
3,568,257 3,568,257
- (419,931)
- - 3,568,257 3,393,643
$ 587,919 $ 425,957 $ 3,713,772 $ 5,653,531
131
CITY OF LANSING, MICHIGAN
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Capital Projects Funds
For the Year Ended June 30, 2013
1990 1990 Lansing
Environ- Environ- Special Center
mental mental11 Assessments Improvements
Revenues
Special assessments $ $ $ 74,875 $
Charges for services -
Interest -
Total revenues 74,875 -
Expenditures
Capital outlay 764 5,643 25,778 71,780
Revenues over (under) expenditures (764) (5,643) 49,097 (71,780)
Other financing sources (uses)
Transfers in - -
Transfers out
Issuance of long-term debt
Total other financing sources (uses) - -
Net change in fund balances (764) (5,643) 49,097 (71,780)
Fund balances (deficit), beginning of year 1,146 176,335 (469,028) 146,023
Fund balances (deficit), end of year $ 382 $ 170,692 $ (419,931) $ 74,243
132
2009
MTF Build America
Bonds Construction Other Totals
$ $ $ - $ 74,875
564,945 564,945
893 850 9,753 11,496
893 850 574,698 651,316
- - 2,236,389 2,340,354
893 850 (1,661,691) (1,689,038)
18 - 2,289,156 2,289,174
(265,679) (310,403) (848,262) (1,424,344)
147,046 147,046
(265,661) (310,403) 1,587,940 1,011,876
(264,768) (309,553) (73,751) (677,162)
264,768 309,553 3,642,008 4,070,805
$ $ - $ 3,568,257 $ 3,393,643
133
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134
CITY OF LANSING, MICHIGAN
Nonmajor Permanent Funds
Cemetery Perpetual Care Fund - This fund accounts for transfers from the Cemetery Fund,
representing 15% of lot sales. These funds are invested, and all investment earnings are transferred
to the Cemetery Fund for lot maintenance.
Parks Trust Fund - This fund accounts for contributions made for City parks, the principal of which
must be preserved in accordance with the trust indentures. Income derived from these
contributions is transferred to the Parks Department special revenue fund.
135
CITY OF LANSING, MICHIGAN
Combining Balance Sheet
Nonmajor Permanent Funds
June 30, 2013
Cemetery
Perpetual Parks
Care Trust Totals
Assets
Equity in pooled cash $ 1,701,694 $ 1,251 $ 1,702,945
Fund balances
Nonspendable $ 1,701,694 $ 1,251 $ 1,702,945
136
CITY OF LANSING, MICHIGAN
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Permanent Funds
For the Year Ended June 30, 2013
Cemetery
Perpetual Parks
Care Trust Totals
Revenues
Interest $ 5,211 $ $ 5,211
Other financing sources (uses)
Transfers in 19,652 19,652
Transfers out (5,211) (5,211)
Total other financing sources (uses) 14,441 14,441
Net change in fund balances 19,652 19,652
Fund balances, beginning of year 1,682,042 1,251 1,683,293
Fund balances, end of year $ 1,701,694 $ 1,251 $ 1,702,945
137
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138
CITY OF LANSING, MICHIGAN
Nonmajor Enterprise Funds
Cemetery Fund - This fund accounts for the operation of City-owned cemeteries.
Golf Fund - This fund accounts for the operation of the City-owned golf courses.
Garbage and Rubbish Collection Fund - This fund accounts for the provision of household solid
waste disposal services to participating residents of the City.
Recycling Fund - This fund accounts for the provision of recycling services to participating residents
of the City.
139
CITY OF LANSING, MICHIGAN
Combining Statement of Net Position
Nonmajor Enterprise Funds
June 30, 2013
Garbage and
Rubbish
Cemetery Golf Collection Recycling Totals
Assets
Current assets:
Cash and cash equivalents $ 200 $ 300 $ - $ - $ 500
Equity in pooled cash 120,348 167,500 615,624 1,184,098 2,087,570
Accounts receivable, net - 2,070 41,313 - 43,383
Inventories 63,216 7,087 16,873 - 87,176
Total current assets 183,764 176,957 673,810 1,184,098 2,218,629
Noncurrent assets:
Bond issue costs, net - 3,292 - - 3,292
Capital assets not being depreciated 57,740 446,501 504,241
Capital assets being depreciated, net 160,894 2,200,698 2,361,592
Total noncurrent assets 218,634 2,650,491 - - 2,869,125
Total assets 402,398 2,827,448 673,810 1,184,098 5,087,754
Liabilities
Current liabilities:
Accounts payable 54,888 8,903 21,550 37,487 122,828
Deposits payable - - 4,410 - 4,410
Accrued interest payable - 810 - 810
Accrued payroll 727 13,664 - 14,391
Due to other funds - 75,271 500,000 575,271
Unearned revenues 30,110 34,554 64,664
Current portion of:
Bonds and notes payable - 100,000 - - 100,000
Total current liabilities 55,615 228,758 560,514 37,487 882,374
Noncurrent liabilities:
Bonds and notes payable, net
of current portion - 295,212 - - 295,212
Compensated absences, net
of current portion 30,069 512491 46,741 97,945 226,246
Total noncurrent liabilities 30,069 346,703 46,741 97,945 521,458
Total liabilities 85,684 575,461 607,255 135,432 1,403,832
Net position
Net investment in capital assets 218,634 2,251,987 - - 2,470,621
Unrestricted 98,080 - 66,555 1,048,666 1,213,301
Total net position $ 316,714 $ 2,251,987 $ 66,555 $ 1,048,666 $ 3,683,922
140
CITY OF LANSING, MICHIGAN
Combining Statement of Revenues, Expenses and Changes in Fund Position
Nonmajor Enterprise Funds
For the Year Ended June 30, 2013
Garbage and
Rubbish
Cemetery Golf Collection Recycling Totals
Operating revenues
Charges for services $ 314,913 $ 373,000 $ 1,131,659 $ 3,434,622 $ 5,254,194
Operating expenses
Personal services 413,405 444,536 830,219 1,686,273 3,374,433
Contractual and materials 203,456 325,892 727,471 1,255,843 2,512,662
Depreciation 16,189 92,092 - - 108,281
Total operating expenses 633,050 862,520 1,557,690 2,942,116 5,995,376
Operating income (loss) (318,137) (489,520) (426,031) 492,506 (741,182)
Nonoperating expenses
Interest revenue 12,213 - 12,213
Capital transfer out - - (707,145) (707,145)
Interest expense and fees (26,305) (18) (1,031) (27,354)
Total nonoperating revenues
(expenses) (14,092) (18) (708,176) (722,286)
Income (loss) before transfers (318,137) (503,612) (426,049) (215,670) (1,463,468)
Transfers in 419,680 483,089 250,000 1,152,769
Transfers out (19,652) - - (250,000) (269,652)
Change in net position 81,891 (20,523) (176,049) (465,670) (580,351)
Net position, beginning of year 234,823 2,272,510 242,604 1,514,336 4,264,273
Net position, end of year $ 316,714 $ 2,251,987 $ 66,555 $ 1,048,666 $ 3,683,922
141
CITY OF LANSING, MICHIGAN
Combining Statement of Cash Flows
Nonmajor Enterprise Funds
For the Year Ended June 30, 2013
Garbage and
Rubbish
Cemetery Golf Collection Recycling Totals
Cash flows from operating activities
Cash received from customers $ 314,913 $ 370,930 $ 1,607,871 $ 3,459,935 $ 5,753,649
Cash payments for goods and services (238,593) (247,082) (451,440) (1,284,583) (2,221,698)
Cash payments to employees (413,561) (444,042) (830,219) (1,686,273) (3,374,095)
Net cash provided by (used in)
operating activities (337,241) (320,194) 326,212 489,079 157,856
Cash flows from noncapital
financing activities
Transfers in 419,680 483,089 250,000 - 1,152,769
Transfers out (19,652) - - (250,000) (269,652)
Net cash provided by (used in)
noncapital financing activities 400,028 483,089 250,000 (250,000) 883,117
Cash flows from capital and related
financing activities
Amount paid to refunding bond escrow
agent (401,037) (401,037)
Bond proceeds 405,000 405,000
Principal paid on bonds (85,000) - (85,000)
Interest paid on bonds (27,281) (18) (1,031) (28,330)
Net cash used in capital and related
financing activities (108,318) (18) (1,031) (109,367)
Cash flows from investing activities
Interest and dividends received - 12,213 - - 12,213
Net change in cash and cash equivalents 62,787 66,790 576,194 238,048 943,819
Cash and cash equivalents:
Beginning of year 57,761 101,010 39,430 946,050 1,144,251
End of year $ 120,548 $ 167,800 $ 615,624 $ 1,184,098 $ 2,088,070
Reconciliation to statement of net position
Cash and cash equivalents $ 200 $ 300 $ - $ - $ 500
Equity in pooled cash 120,348 167,500 615,624 1,184,098 2,087,570
$ 120,548 $ 167,800 $ 615,624 $ 1,184,098 $ 2,088,070
continued...
142
CITY OF LANSING, MICHIGAN
Combining Statement of Cash Flows
Nonmajor Enterprise Funds
For the Year Ended June 30, 2013
Garbage and
Rubbish
Cemetery Golf Collection Recycling Totals
Reconciliation of operating income (loss)
to net cash provided by (used in)
operating activities
Operating income (loss) $ (318,137) $ (489,520) $ (426,031) $ 492,506 $ (741,182)
Adjustments to reconcile operating
income (loss) to net cash provided by
(used in) operating activities:
Depreciation expense 16,189 92,092 - - 108,281
Changes in assets and liabilities:
Accounts receivable - (2,070) 476,212 25,313 499,455
Inventories 12,101 (4,238) 33,181 - 41,044
Accounts payable 53,308 6,772 (3,273) (26,962) 29,845
Deposits payable - - 4,410 4,410
Accrued interest payable - (5,915) - (5,915)
Accrued payroll (156) 494 - 338
Due to other funds (100,000) 75,271 300,000 275,271
Unearned revenues - 2,717 (57,438) (54,721)
Compensated absences (546) 4,203 (849) (1,778) 1,030
Net cash provided by (used in)
operating activities $ (337,241) $ (320,194) $ 326,212 $ 489,079 $ 157,856
concluded
Non-cash transactions
The Recycling fund made a non-cash capital contribution out of$707,145 for the year ended June 30, 2013.
143
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144
CITY OF LANSING, MICHIGAN
Internal Service Funds
Fleet Maintenance Fund - This fund accounts for the costs of maintaining the City's fleet of
vehicles and heavy equipment.
Fringe Benefits Fund - This fund accounts for the costs of the City's fringe benefits.
Engineering Fund - This fund accounts for the operations of the City's engineering department.
145
CITY OF LANSING, MICHIGAN
Combining Statement of Net Position
Internal Service Funds
June 30, 2013
Fleet Fringe
Maintenance Benefits Engineering Totals
Assets
Current assets:
Equity in pooled cash $ 1,760,762 $ 47,239 $ 878,557 $ 2,686,558
Accounts receivable, net - 437,962 - 437,962
Due from other funds - 950,244 950,244
Inventories 843,718 - 843,718
Prepaids - 406,615 - 406,615
Total current assets 2,604,480 1,842,060 878,557 5,325,097
Noncurrent assets:
Restricted cash and cash equivalents 1,892,538 - - 1,892,538
Bond issuance costs, net 48,608 4,122 52,730
Capital assets not being depreciated 4,778,135 - 4,778,135
Capital assets being depreciated, net 3,681,750 1,742,627 5,424,377
Total noncurrent assets 10,401,031 1,746,749 12,147,780
Total assets 13,005,511 1,842,060 2,625,306 17,472,877
Liabilities
Current liabilities:
Accounts payable 892,773 948,668 286 1,841,727
Accrued interest payable 18,154 - 18,954 37,108
Accrued payroll 37,779 3,461 23,322 64,562
Claims incurred but not reported - 814,014 - 814,014
Due to other funds 1,500,000 - - 1,500,000
Current portion of:
Bonds and notes payable 513,702 155,000 668,702
Compensated absences 69,568 - - 69,568
Total current liabilities 3,031,976 1,766,143 197,562 4,995,681
Noncurrent liabilities:
Bonds and notes payable, net of current portion 4,415,492 - 299,682 4,715,174
Compensated absences, net of current portion 120,182 48,114 467,706 636,002
Total noncurrent liabilities 4,535,674 48,114 767,388 5,351,176
Total liabilities 7,567,650 1,814,257 964,950 10,346,857
Net position
Net investment in capital assets 3,530,691 - 1,287,945 4,818,636
Restricted for debt retirement 1,892,538 - - 1,892,538
Unrestricted 14,632 27,803 372,411 414,846
Total net position $ 5,437,861 $ 27,803 $ 1,660,356 $ 7,126,020
146
CITY OF LANSING, MICHIGAN
Combining Statement of Revenues, Expenses and Changes in Fund Position
Internal Service Funds
For the Year Ended June 30, 2013
Fleet Fringe
Maintenance Benefits Engineering Totals
Operating revenues
Charges for services $ 6,427,619 $ 57,466,812 $ 3,608,338 $ 67,502,769
Operating expenses
Personal services 2,926,873 263,956 2,673,787 5,864,616
Purchase of goods and services 3,058,815 57,175,053 362,009 60,595,877
Depreciation 1,337,143 - 44,667 1,381,810
Total operating expenses 7,322,831 57,439,009 3,080,463 67,842,303
Operating income (loss) (895,212) 27,803 527,875 (339,534)
Nonoperating revenues (expenses)
Interest revenue 5,409 - - 5,409
Loss on sale of capital assets (583,364) (583,364)
Interest expense and fees (118,131) (35,659) (153,790)
Total nonoperating revenues (expenses) (696,086) - (35,659) (731,745)
Income (loss) before
contributions and transfers (1,591,298) 27,803 492,216 (1,071,279)
Capital contributions 854,188 - - 854,188
Transfers in 252,400 - - 252,400
Change in net position (484,710) 27,803 492,216 35,309
Net position, beginning of year 5,922,571 - 1,168,140 7,090,711
Net position, end of year $ 5,437,861 $ 27,803 $ 1,660,356 $ 7,126,020
147
CITY OF LANSING, MICHIGAN
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2013
Fleet Fringe
Maintenance Benefits Engineering Totals
Cash flows from operating activities
Cash received from interfund services $ 6,427,619 $ 58,273,280 $ 3,608,338 $ 68,309,237
Cash payments for goods and services (1,157,069) (58,005,811) (340,500) (59,503,380)
Cash payments to employees (2,926,026) (263,956) (2,675,040) (5,865,022)
Net cash provided by operating activities 2,344,524 3,513 592,798 2,940,835
Cash flows from noncapital financing activities
Transfers in 252,400 - - 252,400
Cash flows from capital and related
financing activities
Proceeds on sale of capital assets 185,659 185,659
Acquisition and construction of capital assets (4,776,585) (9,154) (4,785,739)
Amount paid to refunding bond escrow agent (462,038) (462,038)
Principal paid (135,000) (160,000) (295,000)
Interest paid (113,617) (35,664) (149,281)
Loan proceeds 1,892,332 - 1,892,332
Bond proceeds - 465,000 465,000
Net cash used in capital and related
financing activities (2,947,211) (201,856) (3,149,067)
Cash flows from investing activities
Interest and dividends received 5,409 - - 5,409
Net change in cash and cash equivalents (344,878) 3,513 390,942 49,577
Cash and cash equivalents, beginning of year 3,998,178 43,726 487,615 4,529,519
Cash and cash equivalents, end of year $ 3,653,300 $ 47,239 $ 878,557 $ 4,579,096
Reconciliation to statement of net position
Equity in pooled cash $ 1,760,762 $ 47,239 $ 878,557 $ 2,686,558
Restricted cash and cash equivalents 1,892,538 - - 1,892,538
$ 3,653,300 $ 47,239 $ 878,557 $ 4,579,096
continued...
148
CITY OF LANSING, MICHIGAN
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2013
Fleet Fringe
Maintenance Benefits Engineering Totals
Reconciliation of operating income (loss) to net
cash provided by operating activities
Operating income (loss) $ (895,212) $ 27,803 $ 527,875 $ (339,534)
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities:
Depreciation expense 1,337,143 - 44,667 1,381,810
Change in assets and liabilities:
Accounts receivable - 1,756,712 - 1,756,712
Due from other funds - (950,244) (950,244)
Inventories 60,353 - 60,353
Prepaids - 97,601 - 97,601
Accounts payable 403,503 (275,280) (44) 128,179
Accrued interest payable - - 8,076 8,076
Accrued payroll 847 232 (1,253) (174)
Claims incurred but not reported - (83,509) (83,509)
Due to other funds 1,500,000 (599,756) - 900,244
Compensated absences (62,110) 29,954 13,477 (18,679)
Net cash provided by operating activities $ 2,344,524 $ 3,513 $ 592,798 $ 2,940,835
concluded
Non-cash transactions
The Fleet Maintenance fund received non-cash capital contributions of $854,188 for the year ended June 30, 2013,
including $707,145 from business-type activities and $147,043 from other governmental funds.
149
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150
CITY OF LANSING, MICHIGAN
Agency Funds
Bail Bonds Fund - This fund is used to hold cash received by the District Court for bail bonds.
Garnishment, Indemnity Bond and Restitution Fund - This fund is used to hold cash received by the
District Court for garnishment payments until claimed, and to hold indemnity bonds deposited
relating to civil disputes until the Court rules on the case.
151
CITY OF LANSING, MICHIGAN
Combining Statement of Fiduciary Assets and Liabilities
Agency Funds
June 30, 2013
54-A District Court
Garnishment,
Bail Indemnity Bond
Bonds and Restitution Totals
Assets
Equity in pooled cash $ 63,131 $ 31,395 $ 94,526
Liabilities
Undistributed receipts $ 63,131 $ 31,395 $ 94,526
152
CITY OF LANSING, MICHIGAN
Combining Statement of Changes in Fiduciary Assets and Liabilities
Agency Funds
For the Year Ended June 30, 2013
Beginning Ending
Balance Additions Deletions Balance
54-A District Court - Bail Bonds
Assets
Equity in pooled cash $ 46,676 $ 290,970 $ 274,515 $ 63,131
Liabilities
Undistributed receipts $ 46,676 $ 290,970 $ 274,515 $ 63,131
54-A District Court - Garnishment,
Indemnity Bond and Restitution
Assets
Equity in pooled cash $ 12,487 $ 184,587 $ 165,679 $ 31,395
Liabilities
Undistributed receipts $ 12,487 $ 184,587 $ 165,679 $ 31,395
Total - all agency funds
Assets
Equity in pooled cash $ 59,163 $ 475,557 $ 440,194 $ 94,526
Liabilities
Undistributed receipts $ 59,163 $ 475,557 $ 440,194 $ 94,526
153
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154
STATISTICAL SECTION
155
CITY OF LANSING, MICHIGAN
Statistical Section Table of Contents
This part of the City of Lansing, Michigan's (the "City") comprehensive annual financial report presents
detailed information as a context for understanding what the information in the financial statements,
note disclosures, and required supplementary information says about the City's overall financial health.
Page
Financial Trends These schedules contain trend information to help the reader
understand how the City's financial performance and well-being
have changed over time. 157
Revenue Capacity These schedules contain information to help the reader assess
the factors affecting the City's ability to generate its property
taxes. 162
Debt Capacity 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. 166
Demographic and These schedules offer demographic and economic indicators to
Economic Information 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. 171
Operating Information 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. 173
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive
annual financial reports for the relevant year.
156
CITY OF LANSING, MICHIGAN Table 1 -Unaudited
Net Assets/Net Position by Component
Last Ten Fiscal Years
1 2013" 2012 2007 1
(2)
Governmental activities
Net investment in capital assets $ 154,372,604 $ 163,723,249 $ 180,571,237 $ 186,536,428 $ 191,516,475 $ 187,054,852 $ 184,150,439 $ 190,243,447 $ 198,338,788 $ 197,530,605
Restricted 12,552,011 14,524,584 14,777,571 14,304,689 17,139,090 34,554,539 37,642,784 36,706,345 33,900,657 -
Unrestricted (39,307,231) (34,371,855) (18,840,717) (7,649,432) 6,589,790 (3,124,027) 2,776,006 514,601 1,632,040 15,331,622
Total governmental activities net assets/
net position $ 127,617,384 $ 143,875,978 $ 176,508,091 $ 193,191,685 $ 215,245,355 $ 218,485,364 $ 224,569,229 $ 227,464,393 $ 233,871,485 $ 212,862,227
Business-type activities
Net investment in capital assets $ 212,682,278 $ 209,584,457 $ 204,149,751 $ 194,854,140 $ 185,430,669 $ 178,526,049 $ 166,320,408 $ 161,324,071 $ 163,834,290 $ 138,830,169
Restricted 11,077,134 12,382,060 13,080,302 19,917,341 19,454,812 30,892,739 35,777,715 35,945,848 39,493,526 718,828
Unrestricted 32,868,366 32,196,598 34,177,453 30,193,568 23,730,694 16,330,517 28,929,677 28,208,193 22,701,430 64,268,351
Total business-type activities net assets/
net position $ 256,627,778 $ 254,163,115 $ 251,407,506 $ 244,965,049 $ 228,616,175 $ 225,749,305 $ 231,027,800 $ 225,478,112 $ 226,029,246 $ 203,817,348
Primary government
Net investment in capital assets $ 367,054,882 $ 373,307,706 $ 384,720,988 $ 381,390,568 $ 376,947,144 $ 365,580,901 $ 350,470,847 $ 351,567,518 $ 362,173,078 $ 336,360,774
Restricted 23,629,145 26,906,644 27,857,873 34,222,030 36,593,902 65,447,278 73,420,499 72,652,193 73,394,183 718,828
Unrestricted (6,438,865) (2,175,257) 15,336,736 22,544,136 30,320,484 13,206,490 31,705,683 28,722,794 24,333,470 79,599,973
Total primary government net assets/
net position $ 384,245,162 $ 398,039,093 $ 427,915,597 $ 438,156,734 $ 443,861,530 $ 444,234,669 $ 455,597,029 $ 452,942,505 $ 459,900,731 $ 416,679,575
(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.
157
CITY OF LANSING, MICHIGAN Table 2-Unaudited
Change in Net Assets/Net Position
Last Ten Fiscal Years
----------
Expenses
Governmental activities:
General government $ 27,438,065 $ 30,841,776 $ 25,665,269 $ 30,326,671 $ 26,426,242 $ 28,901,548 $ 22,043,283 $ 34,375,762 $ 53,533,838 $ 53,353,559
Public safety 77,133,469 82,369,004 83,546,997 84,566,215 71,236,947 76,211,756 62,570,888 60,047,271 38,668,349 41,292,750
Public works 29,984,955 33,144,303 26,355,375 29,252,516 37,588,680 40,032,746 40,517,063 31,790,944 30,670,483 22,118,173
Recreation and culture 7,713,098 8,889,142 8,245,451 7,312,480 7,298,385 7,677,083 6,198,462 7,881,212 5,464,143 7,979,953
Community development 16,939,572 13,623,946 12,825,028 9,715,087 6,378,286 6,382,336 6,232,406 7,124,491 6,996,000 8,387,559
Interest on long-term debt 1,447,310 1,949,825 2,116,535 2,229,288 1,803,125 1,481,658 1,658,708 1,197,851 1,033,078 2,041,758
Total governmental activities expenses 160,656,469 170,817,996 158,754,655 163,402,257 150,731,665 160,687,127 139,220,810 142,417,531 136,365,891 135,173,752
Business-type activities:
Sewage disposal system 26,159,576 26,836,597 26,444,741 24,931,075 26,247,188 27,382,736 24,725,229 21,706,537 20,631,611 20,864,079
Municipal parking system 8,126,036 9,491,376 9,896,498 8,305,095 8,353,063 10,188,065 10,275,379 18,403,163 10,151,018 9,196,910
Cemetery 633,050 639,000 755,766 659,584 689,979 675,672 692,510 753,151 802,949 828,073
Golf 888,825 810,372 846,817 869,003 927,200 1,072,505 1,358,008 1,398,963 1,446,615 1,620,669
Garbage and rubbish collection 1,557,708 1,558,024 1,515,600 1,451,059 1,547,372 1,436,642 1,372,266 1,412,620 1,421,617 1,321,760
Recycling 3,650,292 3,041,328 2,809,353 2,804,047 3,008,750 2,940,366 2,777,068 2,981,730 2,862,003 2,768,307
Potter Park Zoo - - - - - (156,270) 2,968,236 2,718,759 2,690,943 2,542,065
Total business-type activities expenses 41,015,487 42,376,697 42,268,775 39,019,863 40,773,552 43,539,716 44,168,696 49,374,923 40,006,756 39,141,863
Total primary government expenses $ 201,671,956 $ 213,194,693 $ 201,023,430 $ 202,422,120 $ 191,505,217 $ 204,226,843 $ 183,389,506 $ 191,792,454 $ 176,372,647 $ 174,315,615
Program revenues
Governmental activities:
Charges for services:
General government $ 6,162,713 $ 6,428,110 $ 6,742,306 $ 6,565,263 $ 5,188,510 $ 5,938,911 $ 6,251,032 $ 6,416,850 $ 6,264,142 $ 4,686,901
Public safety 4,083,222 8,525,524 8,975,173 8,589,146 9,817,421 12,705,181 13,014,934 13,087,372 12,400,853 11,682,187
Public works 1,622,738 2,797,443 2,449,606 2,788,112 4,565,013 4,364,525 3,805,739 3,891,646 2,646,007 2,713,258
Recreation and culture 594,349 557,609 685,120 587,906 1,217,445 1,556,260 1,259,373 1,405,584 1,598,968 1,581,607
Community development 67,349 67,344 122,326 69,250 50,132 66,308 66,161 66,486 66,788 -
Operating grants and contributions 29,322,435 31,928,983 30,154,681 27,515,892 26,462,211 20,356,292 16,524,178 16,158,496 16,673,481 15,746,181
Capital grants and contributions 3,124,288 260,656 189,414 3,109,410 2,571,741 2,531,974 2,179,870 3,659,169 3,479,536 3,033,891
Total governmental activities program revenues 44,977,094 50,565,669 49,318,626 49,224,979 49,872,473 47,519,451 43,101,287 44,685,603 43,129,775 39,444,025
Business-type activities:
Charges for services:
Sewage disposal system 30,825,174 29,915,799 29,205,945 28,907,772 27,446,304 28,023,322 26,926,202 26,867,610 26,890,756 26,529,842
Municipal parking system 5,267,627 6,858,606 7,539,179 7,396,219 7,539,611 10,090,566 10,838,270 10,289,830 9,628,690 7,510,354
Cemetery 314,913 240,394 225,947 226,973 248,314 218,688 264,255 237,564 230,716 226,631
Golf 373,000 390,134 382,546 438,315 448,067 607,922 754,995 890,190 929,266 951,923
Garbage and rubbish collection 1,131,659 1,459,101 1,507,577 1,677,428 1,486,531 1,617,717 1,378,562 1,295,053 1,322,111 1,315,413
Recycling 3,434,622 2,818,364 2,609,423 2,651,309 2,945,061 3,039,089 2,903,092 2,816,277 2,636,002 2,115,917
Potter Park Zoo - - - - - (115) 553,999 471,703 558,654 505,666
Operating grants and contributions 1,193,571 1,331,737 4,456,708 1,535,907 1,541,913 - - - - -
Capital grants and contributions - 2,683,657 1,439,044 11,928,108 60,318 196,317 183,012 1,368,773 731,575 93,207
Total business-type activities program revenues 42,540,566 45,697,792 47,366,369 54,762,031 41,716,119 43,793,506 43,802,387 44,237,000 42,927,770 39,248,953
Total primary government program revenues $ 87,517,660 $ 96,263,461 $ 96,684,995 $ 103,987,010 $ 91,588,592 $ 91,312,957 $ 86,903,674 $ 88,922,603 $ 86,057,545 $ 78,692,978
Net(expenses)revenues
Governmental activities $(115,679,375) $(120,252,327) $(109,436,029) $(114,177,278) $(100,859,192) $(113,167,676) $ (96,119,523) $ (97,731,928) $ (93,236,116) $ (95,729,727)
Business-type activities 1,525,079 3,321,095 5,097,594 15,742,168 942,567 253,790 (366,309) (5,137,923) 2,921,014 107,090
Total primary government net expense $(114,154,296) $(116,931,232) $(104,338,435) $ (98,435,110) $ (99,916,625) $(112,913,886) $ (96,485,832) $(102,869,851) $ (90,315,102) $ (95,622,637)
continued...
158
CITY OF LANSING, MICHIGAN
Change in Net Assets/Net Position
Last Ten Fiscal Years
----------
General revenues and other changes in net assets/net position
Governmental activities:
Taxes:
Property taxes $ 38,668,837 $ 33,506,860 $ 37,233,590 $ 39,010,960 $ 39,141,928 $ 38,607,761 $ 38,371,105 $ 37,506,017 $ 36,181,408 $ 40,354,088
Income taxes 29,850,755 27,943,070 28,699,749 27,408,443 29,312,762 31,168,012 28,209,913 27,032,176 27,435,047 27,437,494
Unrestricted grants and contributions 31,425,718 26,441,961 27,254,574 25,847,423 27,318,313 28,180,799 27,258,536 26,817,633 26,355,710 26,338,413
Investment earnings 58,588 69,265 89,735 246,495 978,034 1,706,572 2,483,162 1,634,608 715,608 312,069
Miscellaneous - 123,066 108,601 75,094 32,310 - - 774,822 104,563 2,903,792
Transfers (583,117) (464,008) (633,814) (464,807) (509,728) 7,420,667 (3,098,357) (3,132,465) (2,123,435) (2,668,510)
Total governmental activities 99,420,781 87,620,214 92,752,435 92,123,608 96,273,619 107,083,811 93,224,359 90,632,791 88,668,901 94,677,346
Business-type activities:
Investment earnings 356,467 271,067 689,883 141,899 413,850 1,883,034 2,815,480 1,453,076 1,298,407 249,855
Miscellaneous - (1,300,561) 21,166 - 725 5,348 2,160 1,248 23,736 387,551
Transfers 583,117 464,008 633,814 464,807 509,728 (7,420,667) 3,098,357 3,132,465 2,123,435 2,668,510
Total business-type activities 939,584 (565,486) 1,344,863 606,706 924,303 (5,532,285) 5,915,997 4,586,789 3,445,578 3,305,916
Total primary government $ 100,360,365 $ 87,054,728 $ 94,097,298 $ 92,730,314 $ 97,197,922 $ 101,551,526 $ 99,140,356 $ 95,219,580 $ 92,114,479 $ 97,983,262
Changes in net assets/net position
Governmental activities $ (16,258,594) $ (32,632,113) $ (16,683,594) $ (22,053,670) $ (4,585,573) $ (6,083,865) $ (2,895,164) $ (7,099,137) $ (4,567,215) $ (1,052,381)
Business-type activities 2,464,663 2,755,609 6,442,457 16,348,874 1,866,870 (5,278,495) 5,549,688 (551,134) 6,366,592 3,413,006
Total primary government $ (13,793,931) $ (29,876,504) $ (10,241,137) $ (5,704,796) $ (2,718,703) $ (11,362,360) $ 2,654,524 $ (7,650,271) $ 1,799,377 $ 2,360,625
concluded
(1)No discretely presented component units shown
159
CITY OF LANSING, MICHIGAN Table 3-Unaudited
Fund Balances, Governmental Funds
Last Ten Fiscal Years
2013 2012 2011 2010 2009 2008 2007 2006 2005 2004
(2) (1)
General fund
Nonspendable $ 75,738 $ 92,538 $ 171,586 $ $ $ $ $ $ $
Restricted 9,400 16,256 41,129
Committed 2,976,408 65,373 178,081
Unassigned 5,633,528 5,198,032 4,939,691 -
Reserved - - - 102,732 1,320,375 1,765,288 1,848,021 2,443,224 2,482,589 1,324,109
Unreserved - - - 389,061 3,755,862 5,465,164 5,036,129 4,634,961 4,709,909 5,606,958
Total general fund 8,695,074 5,372,199 5,330,487 491,793 5,076,237 7,230,452 6,884,150 7,078,185 7,192,498 6,931,067
All other governmental funds
Nonspendable $ 2,671,151 $ 2,852,004 $ 3,006,507 $ - $ - $ - $ - $ - $ - $ -
Restricted 4,368,983 5,566,421 7,412,008
Committed 4,035,145 4,109,131 4,908,740
Unassigned(deficit) (619,931) (543,774) (371,285) - - - - - - -
Reserved 1,177,998 324,366 365,351 2,544,339 613,533 2,139,438 3,688,795
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
Capital projects funds 11,614,644 12,010,219 17,862,441 18,978,360 15,717,371 12,563,759 15,293,862
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 10,455,348 11,983,782 14,955,970 26,598,306 27,545,804 34,810,683 37,787,302 36,795,171 33,900,657 36,933,227
Total all governmental funds $ 19,150,422 $ 17,355,981 $ 20,286,457 $ 27,090,099 $ 32,622,041 $ 42,041,135 $ 44,671,452 $ 43,873,356 $ 41,093,155 $ 43,864,294
(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.
160
CITY OF LANSING, MICHIGAN Table 4-Unaudited
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
2013-- ---� ---
Revenues
Property taxes $ 38,717,552 $ 33,583,448 $ 37,371,885 $ 39,279,343 $ 39,258,893 $ 38,775,722 $ 38,681,928 $ 37,957,773 $ 36,527,417 $ 40,354,088
Income taxes 29,850,755 27,943,070 28,699,749 27,408,443 29,312,762 31,168,012 28,209,913 27,032,176 27,497,542 27,413,270
Licenses and permits 1,509,402 1,538,325 1,598,804 1,414,906 1,325,119 1,429,075 1,101,550 860,647 791,655 814,989
Intergovernmental 40,639,183 41,431,793 40,304,785 39,137,217 38,998,039 38,556,616 34,699,908 34,964,225 35,624,372 36,312,111
Charges for services 11,754,381 18,676,398 18,606,304 18,323,158 20,355,642 19,116,593 18,415,612 19,436,267 17,931,572 16,745,202
Fines and forfeits 3,694,351 2,884,328 3,325,728 4,579,175 4,143,000 4,090,397 4,349,642 4,515,951 4,351,977 4,870,577
Interest and rents 53,179 63,571 88,516 249,464 1,196,559 1,836,485 2,607,388 1,710,674 720,707 357,382
Contributions 16,247,403 12,369,733 11,821,388 10,606,368 10,372,056 10,894,573 9,980,854 9,385,831 8,966,289 8,744,295
Donations from private sources - 5,000 - 9,000 44,000 326,768 114,954 549,055 126,182 22,031
Otherrevenue 510,515 400,074 504,856 473,123 1,054,209 331,248 1,019,476 1,082,283 1,320,064 1,285,903
Total revenues 142,976,721 138,895,740 142,322,015 141,480,197 146,060,279 146,525,489 139,181,225 137,494,882 133,857,777 136,919,848
Expenditures
General government 23,595,321 25,038,589 26,396,516 27,839,564 28,951,805 29,209,458 28,905,058 34,956,037 55,746,807 54,420,735
Public safety 63,943,082 66,161,872 70,397,235 70,820,184 70,082,462 67,715,160 65,218,515 59,143,629 38,121,596 40,145,137
Public works 8,908,673 6,225,177 6,002,823
Highways and streets 9,937,423 8,589,298 8,494,233 14,506,982 14,723,311 14,860,390 13,501,747 10,879,004 10,467,860 9,216,004
Recreation and culture 6,629,453 6,996,562 7,464,193 8,127,700 8,452,768 8,038,290 7,676,600 7,509,183 5,517,980 6,229,014
Other functions 23,699,202 17,999,264 15,675,003 15,182,675 12,599,072 11,805,843 9,847,925 8,259,415 8,520,848 6,971,380
Capital outlay 5,489,617 6,466,084 9,956,103 14,781,728 14,855,863 16,228,127 20,001,659 13,306,810 12,614,723 11,917,608
Debt service:
Interest 1,378,856 1,836,218 3,210,220 3,270,068 1,801,394 1,607,703 1,285,436 1,145,588 1,187,673 2,331,276
Principal 3,137,159 3,448,080 2,070,552 2,165,237 4,743,146 4,721,581 3,875,909 3,244,879 3,592,766 6,874,234
Issuance costs 42,744 - 48,804 - - - - - - -
Total expenditures 146,761,530 142,761,144 149,715,682 156,694,138 156,209,821 154,186,552 150,312,849 138,444,545 135,770,253 138,105,388
Excess of revenues over under expenditures (3,784,809) (3,865,404) (7,393,667) (15,213,941) (10,149,542) (7,661,063) (11,131,624) (949,663) (1,912,476) (1,185,540)
Other financing sources(uses)
Proceeds from borrowing 11,932,046 - 2,470,000 10,146,117 - 4,052,979 15,190,077 6,087,507 1,784,465 570,000
Proceeds from sale of capital assets 497,833 1,398,936 1,210,046 689 1,587,216 - - 774,822 74,565 799,497
Payment to escrow agent (6,015,112) - (2,456,207) - - - - -
Insurance proceeds - - - - 120,960 - - - - -
Transfers in 7,056,932 7,893,879 9,602,095 16,181,590 11,601,871 13,507,521 6,908,259 8,170,998 8,274,929 13,628,444
Transfers out (7,892,449) (8,357,887) (10,235,909) (16,646,397) (12,579,599) (12,529,754) (10,168,616) (11,303,463) (10,398,364) (16,321,156)
Total other financing sources(uses) 5,579,250 934,928 590,025 9,681,999 730,448 5,030,746 11,929,720 3,729,864 (264,405) (1,323,215)
Net change in fund balance $ 1,794,441 $ (2,930,476) $ (6,803,642) $ (5,531,942) $ (9,419,094) $ (2,630,317) $ 798,096 $ 2,780,201 $ (2,176,881) $ (2,508,755)
Debt service as a percentage of
noncapital expenditures 3.2% 3.8% 3.7% 3.9% 4.5% 4.6% 4.0% 3.4% 3.8% 7.1%
161
CITY OF LANSING, MICHIGAN Table 5
Assessed 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 Agricultural Property Assessed Tax Actual Percentage of
June 30, Property Property Property Property Valuation Valuation Rate Value Actual Value
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%
2012 1,387,390,250 639,535,400 87,432,000 183,233,681 2,297,591,331 15.70 4,595,182,662 50.0%
2013 1,232,109,181 587,002,900 86,884,400 151,900 182,543,900 2,088,692,281 19.70 4,177,384,562 50.0%
(1) tax rates are per$1,000 of assessed value
Source: Lansing City Assessor
162
CITY OF LANSING, MICHIGAN Table 6
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
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
2012 2011 15.44 .26 15.70 8.84 21.44 6.00 3.81 9.96 65.75
2013 2012 19.44 .26 19.70 9.08 21.73 6.00 3.81 10.37 70.68
(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)
Source: Lansing City Treasurer
163
CITY OF LANSING, MICHIGAN Table 7
Profile of Ten Largest Ad Valorem Taxpayers
Current Year and Nine Years Ago
2013 2004
Percentage Percentage
Taxable of Total Total of Total
Assessed Assessed Assessed Assessed
Taxpayer Valuation Rank Valuation Valuation Rank Valuation
General Motors Corp. $81,468,000 1 4.01% $ 223,100,800 1 7.71%
Jackson National Life Insurance Company 32,771,500 2 1.61% 31,786,400 2 1.10%
Consumers Energy 22,283,300 3 1.10% 22,043,400 5 0.76%
Demmer Corporation 14,898,600 4 0.73%
Comcast of Michigan LLC 11,644,000 5 0.57%
Lansing Retail Center LLC 10,661,000 6 0.52% 15,544,200 6 0.54%
Heart of the City Assoc 7,271,400 7 0.36%
Sprint Spectrum L.P. 9,496,000 8 0.47% 13,454,600 8 0.46%
Emergent Biodefense Operations 6,881,400 9 0.34%
Quality Dairy Co#17 6,759,700 10 0.33%
Accident Fund Company 13,724,200 7 0.47%
525 Redevco Inc 25,976,200 3 0.90%
Capital Outlook LLC 23,029,300 4 0.80%
Cricket Communications 13,391,600 9 0.46%
Trappers Cove LTD Partners 13,198,200 10 0.46%
Data furnished from City of Lansing Assessor
formerly Capital Outlook LLC
164
CITY OF LANSING, MICHIGAN Table 8
Property Tax Levies and Collections
Last Ten Fiscal Years
Collected within the
Fiscal Year of the Levy Total Collections to Date
Fiscal Year Taxes Levied Current Percent of Delinquent Total Collections
Ended for the Tax Levy Tax Tax as Percent
June 30, Fiscal Year Collection Collected Collection Collection of Levy
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% 144,587 44,270,104 99.96%
2009 45,567,556 45,468,639 99.78% 72,779 45,541,418 99.94%
2010 44,997,919 44,844,495 99.66% 33,012 44,877,507 99.73%
2011 41,460,916 41,375,354 99.79% 24,416 41,399,770 99.85%
2012 39,948,762 39,863,393 99.79% 19,647 39,883,040 99.84%
2013 40,450,767 39,716,932 98.19% 55,532 39,772,464 98.32%
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
165
CITY OF LANSING, MICHIGAN Table 9
Ratios of Outstanding Debt by Type -
Last Ten Fiscal Years
Governmental Activities Business-Type Activities
General Special Installment General Total Percentage
Fiscal Obligation Assessment Purchase Obligation Revenue Primary of Personal Pe
>; g Y
Year Bonds Debt Agreements E j Loans 1 Bonds E Bonds E j Loans 1 Government Income Population(1)
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%1�� $ 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%1" 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%�') 2,073 119,100
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%1" 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%�') 2,216 119,100
2009 17,640,000 12,394,082 1,290,479 194,429,701 38,285,000 4,180,000 268,219,262 12.60%1" 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% `� 2,356 119,100
2011 27,687,000 9,564,693 779,580 200,539,634 32,565,000 1,574,209 272,710,116 12.29% ' 2,386 114,297
2012 25,727,000 8,193,615 512,577 192,125,645 29,525,000 1,637,177 257,721,014 11.41% 2,255 114,297
2013 29,932,000 2,807,838 6,246,743 182,127,578 25,030,000 1,702,664 247,846,823 10.97% ' 2,168 114,298
(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
166
CITY OF LANSING, MICHIGAN Table 10
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
Ratio of
Fiscal Debt Net Bonded Net
Year Service Debt Payable Debt to Bonded
Ended Taxable Gross Bonded Monies From Restricted Net Bonded Taxable Debt per
June 30, Population(') Value(3) Debt(') Available Revenues Debt Value Capita
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 46,029 200,539,634 30,081,123 0.0123 263
2012 114,297 2,297,591,331 217,852,645 - 192,125,645 25,727,000 0.0112 225
2013 114,297 2,088,692,281 212,059,578 178 186,617,578 25,441,822 0.0122 223
Source:2000 and 2010 Census by the U.S. Census Bureau
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
167
CITY OF LANSING, MICHIGAN Table 11
Direct and Overlapping Governmental Activities Debt
As of June 30, 2013
Net General
Obligation
Bonded Amount
Name of Debt %Applicable Applicable
Governmental Unit Outstanding to City to City
Net direct - City $ 25,441,822 (1) 100.00% $ 25,441,822
Share of County-issued bonds
Joint Building Authority $ 3,484,097 100.00% $ 3,484,097
Drain Commission 164,850 100.00% 164,850
$ 3,648,947
Overlapping debt
Eaton Intermediate School District 985,000 0.55% $ 5,418
Ingham Intermediate School District 2,168,000 23.31% 505,361
Waverly School District 28,530,000 0.23% 65,619
Lansing School District 47,175,000 81.35% 38,376,863
East Lansing School District 58,821,784 3.73% 2,194,053
Holt School District 80,626,025 2.46% 1,983,400
Ingham County 40,836,062 27.08% 11,058,406
Eaton County 39,643,830 1.67% 662,052
Clinton County 6,559,156 0.29% 19,022
Lansing Community College 82,565,000 19.27% 15,910,276
Okemos School District 15,239,000 2.32% 353,545
Mason School District 10,305,000 0.10% 10,305
Grand Ledge School District 62,320,000 1.18% 735,376
Total overlapping debt 71,879,696
Total direct and overlapping debt $ 100,970,465
(') Excludes Michigan Transportation Fund Bonds, Unlimited Tax Bonds, Pollution Abatement Bonds,
and Revenue Bonds
Note: Overlapping debt percentages are apportioned based upon relative assessed values.
Source: Municipal Advisory Council of Michigan
168
CITY OF LANSING, MICHIGAN Table 12
Legal Debt Margin Information
Last Ten Fiscal Years
Legal Debt Margin Calculation for Fiscal Year 2012
Assessed value,real and personal property $2,043,510,601
Assessed value equivalents 45,181,680
Total valuation 2,088,692,281
Legal debt margin
Debt limitation- 10 percent of total valuation 208,869,228
Debt applicable to limit
Total City Bonded Debt 237,089,578
City Share:
Drain Commission-County Issued 164,850
Joint Building Authority-County Issued 3,484,097
TIF Supported Bonds 14,218,164
254,956,689
Less:
Michigan Transportation(MTF)Bonds (4,490,000)
Sewage Disposal Revenue Bonds (25,030,000)
Pollution Abatement(CSO Project)Bonds (133,247,887) (162,767,887)
Total net debt applicable to limit 92,188,802
Legal debt margin $ 116,680,426
-� 2005 -�7 -----
Debt limit $ 289,486,027 $ 302,811,105 $ 314,307,611 $ 324,987,531 $ 318,810,868 $ 298,581,799 $ 298,052,683 $ 268,975,768 $ 233,669,637 $ 207,362,623
Total net debt applicable to limit 87,171,139 75,882,359 103,095,986 84,276,312 87,966,365 79,513,756 98,368,804 100,923,863 92,357,575 92,188,802
Legal debt margin $ 202,314,888 $ 226,928,746 $ 211,211,625 $ 240,711,219 $ 230,844,503 $ 219,068,043 $ 199,683,880 $ 168,051,905 $ 141,312,062 $ 115,173,821
Total net debt applicable to the limit
as a percentage of debt limit 30.11% 25.06% 32.80% 25.93% 27.59% 26.63% 33.00% 37.52% 39.52% 44.46%
169
CITY OF LANSING, MICHIGAN Table 13
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)
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
2012 30,178,511 12,562,663 17,615,848 3,160,000 1,448,856 4,608,856 3.82
2013 31,169,428 12,112,994 19,056,434 3,265,000 1,111,390 4,271,390 4.46
Operating expenses less depreciation
Coverage is defined as net revenue available for debt service divided by
debt service requirements
170
CITY OF LANSING, MICHIGAN Table 14
Demographic and Economic Statistics
Last Ten Fiscal Years
Per capita Lansing School
Personal Personal Median District Unemployment Labor
Year Population(') Income Income(z) Age(3) Enrollment(4) %Rate(5) Force(5)
2004 119,100 $ 2,131,893,732 $ 17,900 32 16,927 7 63,750
2005 119,100 2,131,183,101 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 33 15,178 9 66,224
2008 119,100 2,129,040,730 17,876 33 14,475 10.2 65,833
2009 119,100 2,128,331,049 17,870 33 14,482 16.2 66,822
2010 119,100 2,127,621,606 17,864 33 14,098 15.0 64,074
2011 114,297 2,218,237,360 19,408 30 13,465 13.1 63,130
2012 114,297 2,259,194,502 19,766 32 13,236 11.3 63,374
2013 114,297 2,259,194,502 19,766 32 12,544 11.9 63,181
(')Source: U.S. Census Bureau
�L Source: personal income for 2000 and 2005 from the U.S. Census Bureau; other years were extrapolated
from 2000 and 2005
Source: 2000 data from U.S. Census Bureau. Data for other years estimated by City of Lansing Finance Department
(4)Source: Lansing School District
(')Source: Michigan Department of Career Development: Employment Service Agency- Labor Market Information
171
CITY OF LANSING, MICHIGAN Table 15
Principal Employers
Current Year and Seven Years Ago
2013 2006
Percentage Percentage
of Total City of Total City
Employer Employees(') Rank Employment(2) Employees(') Rank Employment
State of Michigan 13,700 1 6.23% 13,000 1 6.09%
Michigan State University 10,725 2 4.88% 10,500 2 4.45%
Sparrow Health System 5,735 3 2.61% 6,000 4 2.54%
Liberty National Life Insurance 5,000 4 2.28%
General Motors 5,522 5 2.51% 6,300 3 2.67%
Lansing Community College 2,990 6 1.36% 3,800 5 1.35%
McClaren Greater Lansing 2,400 7 1.09% 2,500 7 1.06%
Meijer 1,880 8 0.86% 2,000 8 0.85%
Lansing School District 1,613 9 0.73% 3,000 6 0.89%
Southern-Owners Insurance 1,500 10 0.68% 1,500 9 0.64%
Ingham County 1,200 10 0.52%
Greater Lansing metropolitan area employment 219,761
Data is representative of the Greater Lansing Region
Z Source: Michigan Department of Career Development: Employment Service Agency- Labor Market Information
Data prior to 2006 is unavailable
172
CITY OF LANSING, MICHIGAN Table 16
Full-time Equivalent City Governmental Employees by Function/Program
Last Eight Fiscal Years
- Function/Program 2013 2012 2011 2010 2009 2008 2007
General government
City council 10 10 11 11 11 11 11 11
Mayors office 5 5 5 5 5 5 5 7
City clerk 5 5 6 7 7 7 7 7
54-A district court 43 48 50 53 53 53 55 55
City attorneys office 10 10 11 12 12 12 12 11
City TV 2 2 2 2 2 2 2 2
Internal auditor 1 1 1 1 1 1 1 2
Human resources 9 9 11 12 13 14 14 (1) 12
Finance
Accounting/Budget/Purchasing 10 13 14 16 17 16 18 (1) 21
Tax services 20 21 22 24 25 26 29 30
Information technology 10 10 14 15 17 18 18 18
Property management (6) 18 20 21 23 24 26 (3) 28
Fleet management °) 27 29 30 31 33 37 (L) 20
40 89 99 106 113 117 128 117
Planning Et neighborhood development
Administration 2 2 2 2 2 2 2 2
Code compliance 15 15 16 16 16 17 19 15
Building safety 12 13 15 15 15 15 16 17
Planning 4 4 5 5 4 5 7 7
Development 9 9 9 9 10 10 10 11
Parking&transportation 20 20 20 (5) 40 41 41 43 49
62 63 66 87 88 90 97 101
Police 229 260 327 344 342 341 338 339
Fire 180 179 207 218 219 219 219 220
Public services
Administration 8 engineering 19 21 21 17 18 18 18 19
Operations Et maintenance 120 121 135 (') 110 113 113 119 122
Service garage - - - - - - 17
Wastewater 41 41 41 44 50 50 51 61
Property Management 18 (6)
Fleet Management 27 (b)
225 183 197 171 181 181 188 219
Human relations 8 community services 5 5 5 5 6 8 9 9
Parks&recreation
Administration 8 design 5 5 5 7 7 8 8 9
Grounds&forestry °) 27 31 32 32 (L) 32
Leisure 13 special recreation 8 10 12 15 19 17 19 (3) 20
Cemeteries 1 1 1 3 4 4 5 5
Golf/ice arena 3 3 4 4 4 4 4 6
Zoo(4) - - - - 18 19
17 19 22 56 65 65 86 91
843 888 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
v)operations of the Litys three fleet garages was consolidated in Finance
(3)Four CUStodial positions were transferred from Parks&Recreation to Finance
(4)un JULY 1,LUU1,Potter Park LOO employees were transferred to Ingham LOunty
In FY 2011,the following restructuring of departments occurred:
(5)Grounds Maintenance positions were moved from Parks a Recreation and Planning Ft Neighborhood Development and consolidated with Public Service staff
In FY 2013,the following restructuring g of departments occurred:
(6)Fleet and Property Management were moved from the Finance Department to the Public service Department
(7)On June 27,2012,911 Dispatch employees were transferred from the City to Ingham County
173
CITY OF LANSING, MICHIGAN Table 17
Operating Indicators by Function/Program
Last Eight Fiscal Years
Function/Program 2013 , 2012.---ft 2008 E, 2007--
Public safety
Fire department responses 18,444 17,093 16,974 16,659 15,852 15,780 15,267 14,869
EMS related 15,918 14,851 14,628 14,398 13,447 13,151 12,779 12,152
Fire related 2,526 2,242 2,346 2,261 2,405 2,629 2,488 2,117
Police department responses 73,087 74,058 78,112 87,724 89,958 87,634 97,466 87,551
Arrests 7,196 8,043 8,858 11,644 11,559 12,810 13,260 7,479
Traffic violations 14,905 8,829 15,585 18,297 20,122 25,398 29,047 30,948
Public works
Potholes filled 33,155 30,116 32,918 24,945 43,601 40,790 28,122 36,522
Streets resurfaced(miles) 6.00 5.01 8.99 20.70 16.20 20.92 22.11 27.16
Recreation
Recreation participation 55,122 66,836 66,254 70,529 39,060 37,783 ' 41,069 38,878
Pavilion rentals 199 198 161 288 315 341 254 255
Sewage disposal
Average amount processed daily(gal) 14.75 million 12.82 million 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 2,718 2,735 3,122 3,480 3,783 4,059 3,905 4,073
Parking tickets issued 38,127 41,829 45,176 63,610 66,183 57,153 75,637 82,221
Cemetery
Lots sold 113 115 143 142 119 98 114 104
Golf
Annual rounds played 25,554 28,560 26,084 30,936 41,588 43,605 "1 59,244 57,256
Garbage and rubbish
Yards sent to landfill 17,985 18,705 20,334 21,805 29,322 29,869 30,402 30,517
Recycling
Recycled goods sold(tons) 3,562 3,149 2,446 2,163 2,591 2,818 2,269 2,441
Yards composted 21,832 20,413 15,725 21,819 21,871 21,928 17,189 21,304
Source: The City of Lansing
Data available back eight years only
" The addition of the Southside Community Center,with a pool,resulted in a large increase in recreation participation in FY 2010
" Two golf course were closed in FY 2008 with one of those being converted to a driving range
Source: City of Lansing
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CITY OF LANSING, MICHIGAN Table 18
Capital Assets Statistics by Function/Program
Last Eight Fiscal Years
Function/Program 2013 2012 2011 2010 2009 2008 2007 2006
Public safety
Police stations 2 2 3 3 3 3 3 3
Police patrol units 60 60 58 61 61 58 55 55
Fire stations 6 6 8 9 9 9 9 9
Public works
Streets(miles) 411.00 407.80 410.80 410.63 410.15 410.15 410 409.89
Traffic signals 204 204 208 203 196 203 188 194
Recreation
Park acreage 2,364.85 2,434.88 2,422.63 2,422.63 2,422.63 2,422.63 2,219.63 2,219.63
Playgrounds 75 73 71 71 82 82 80 76
Baseball/softball fields 61 61 61 61 61 61 61 61
Soccer/football fields 6 6 6 6 6 6 6 6
Community centers 4 4 4 4 4 4 4 4
Sewage disposal
Sanitary sewers(miles) 359 359 359 357 354 347.4 341.0 338.0
Storm sewers(miles) 234 234 234 233 230 225.1 220.0 217.0
Combined sewers(miles) 188 188 188 191 192 197.4 203.0 208.0
Parking system
Ramps 4 4 4 4 4 6 6 5
Lots 18 15 15 16 16 15 15 15
Meters 2,452 2,452 2,452 2,493 2,493 2,489 2,489 2,489
Cemetery
Number of cemeteries 3 3 3 3 3 3 3 3
Golf
Number of courses 1 1 1 1 1 1 b 3 3
Acreage 115 115 115 115 115 115 b 318 318
Garbage and rubbish
Refuse collection trucks 17 19 22 18 16 21 21 20
Recycling
Recycling trucks 7 7 9 10 10 10 10 10
Potter park zoo
Number of animals N/A N/A N/A N/A N/A N/A a 398 403
Source: The City of Lansing
Data available back eight years only
a. Zoo operations were transferred to Ingham County in FY2008
b.Two municipal golf courses were non-operational beginning in 2008
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