HomeMy WebLinkAbout2019 - City of Laning FS Final CAFR Comprehensive Annual financial Report City of
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Michigan
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Year Ended Comprehensive
June 30, 2019 V Annual Financial
Report
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Prepared by: Department of Finance
Chief Strategy Officer
Shelbi Frayer
Accounting Manager
Jeff Scharnowske
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 Change in Fund Balances -
Governmental Funds 38
Reconciliation of Net Change in Fund Balances of Governmental Funds
to Change in Net Position of Governmental Activities 39
Statement of Revenues, Expenditures and Change in
Fund Balance - Budget and Actual:
General Fund 40
Statement of Net Position - Proprietary Funds 44
Statement of Revenues, Expenses and Changes in Fund Net
Position - Proprietary Funds 45
Statement of Cash Flows - Proprietary Funds 46
Statement of Fiduciary Net Position - Fiduciary Funds 50
Statement of Changes in Fiduciary Net Position - Pension and
Other Postemployment Benefits Trust Funds 51
Combining Statement of Net Position - Discretely Presented Component Units 56
Combining Statement of Activities - Discretely Presented Component Units 57
Notes to Financial Statements 59
CITY OF LANSING, MICHIGAN
Table of Contents
Page
Required Supplementary Information 125
Employees' Retirement System Pension Plan:
Schedule of Changes in Net Pension Liability and Related Ratios 126
Schedule of the Net Pension Liability 127
Schedule of Contributions 128
Schedule of Investment Returns 129
Police and Fire Retirement System Pension Plan:
Schedule of Changes in Net Pension Liability and Related Ratios 130
Schedule of the Net Pension Liability 131
Schedule of Contributions 132
Schedule of Investment Returns 133
Employees' Retirement System OPEB Plan:
Schedule of Changes in Net OPEB Liability and Related Ratios 134
Schedule of the Net OPEB Liability 135
Schedule of Contributions 136
Schedule of Investment Returns 137
Police and Fire Retirement System OPEB Plan:
Schedule of Changes in Net OPEB Liability and Related Ratios 138
Schedule of the Net OPEB Liability 139
Schedule of Contributions 140
Schedule of Investment Returns 141
Combining and Individual Fund Financial Statements and Schedules 143
Nonmajor Governmental Funds:
Combining Balance Sheet - Nonmajor Governmental Funds 144
Combining Statement of Revenues, Expenditures and Change in Fund
Balances - Nonmajor Governmental Funds 145
Combining Balance Sheet - Nonmajor Special Revenue Funds 148
Combining Statement of Revenues, Expenditures and Change in Fund
Balances - Nonmajor Special Revenue Funds 150
Schedule of Revenues, Expenditures and Change in Fund
Balances - Budget and Actual - Nonmajor Special Revenue Funds 152
Combining Balance Sheet - Nonmajor Debt Service Funds 162
Combining Statement of Revenues, Expenditures and Change in Fund
Balances - Nonmajor Debt Service Funds 163
Combining Balance Sheet - Nonmajor Capital Projects Funds 166
Combining Statement of Revenues, Expenditures and Change in Fund
Balances - Nonmajor Capital Projects Funds 167
Combining Balance Sheet - Nonmajor Permanent Funds 170
Combining Statement of Revenues, Expenditures and Change in Fund
Balances - Nonmajor Permanent Funds 171
CITY OF LANSING, MICHIGAN
Table of Contents
Page
Combining and Individual Fund Financial Statements and Schedules (concluded)
Nonmajor Enterprise Funds:
Combining Statement of Net Position - Nonmajor Enterprise Funds 174
Combining Statement of Revenues, Expenses and Changes in Fund Net
Position - Nonmajor Enterprise Funds 175
Combining Statement of Cash Flows - Nonmajor Enterprise Funds 176
Internal Service Funds:
Combining Statement of Net Position - Internal Service Funds 180
Combining Statement of Revenues, Expenses and Changes in Fund Net
Position - Internal Service Funds 181
Combining Statement of Cash Flows - Internal Service Funds 182
Agency Funds:
Combining Statement of Fiduciary Assets and Liabilities - Agency Funds 186
Combining Statement of Changes in Fiduciary Assets and Liabilities - Agency Funds 187
STATISTICAL SECTION (UNAUDITED) 189
TABLE
1 Net Position by Component 193
2 Change in Net Position 194
3 Fund Balances, Governmental Funds 196
4 Changes in Fund Balances of Governmental Funds 197
5 Assessed and Estimated Actual Value of Taxable Property 198
6 Direct and Overlapping Property Tax Rates 199
7 Profile of Ten Largest Ad Valorem Taxpayers 200
8 Property Tax Levies and Collections 201
9 Ratios of Outstanding Debt by Type 202
10 Ratios of General Bonded Debt Outstanding 203
11 Direct and Overlapping Governmental Activities Debt 204
12 Legal Debt Margin Information 205
13 Pledged-Revenue Coverage 206
14 Demographic and Economic Statistics 207
15 Principal Employers 208
16 Full-Time Equivalent City Governmental Employees by Function/Program 210
17 Operating Indicators by Function/Program 214
18 Capital Asset Statistics by Function/Program 216
INTRODUCTORY SECTION
1
CITY OF LANSING, MICHIGAN
LANSING CITY GOVERNMENT
Fiscal Year Ended June 30, 2019
MAYOR
Andy Schor
CITY COUNCIL
Carol Wood, Council President, At Large
Jody Washington, Council Vice President, 1 st Ward
Kathy Dunbar, At Large
Patricia Spitzley, At Large
Peter Spadafore, At Large
Jeremy Garza, 2nd Ward
Adam Hussain, 3rd Ward
Brian T. Jackson, 4th Ward
CLERK
Chris Swope
DISTRICT COURT JUDGES
Louise Alderson, Chief Judge
Hugh B. Clarke, Jr.
Stacia Buchanan
Cynthia M. Ward
OFFICERS
Samantha Harkins Executive Assistant/Chief of Staff
James D. Smiertka City Attorney
Shelbi Frayer Chief Strategy Officer
Judy Kehler City Treasurer
Sharon Frishman City Assessor
Daryl Green Police Chief
Andrew Kilpatrick Public Service Director
Brian McGrain Economic Development & Planning Director
Andrea Crawford Neighborhood & Citizen Engagement Director
Brett Kaschinske Parks & Recreation Director
Anethia Brewer Court Administrator
Joan Jackson Johnson Human Relations & Community Services Director
Linda Sanchez-Gazella Human Resources Director
Eric Brewer Internal Auditor
2
FINANCE DEPARTMENT
124 W Michigan Ave., 811 Floor
9r, Lansing, Michigan 48933
rr i 517.483.4500
Andy Schor,Mayor
December 19, 2019
Council President Carol Wood and Council Members
loth Floor City Hall
Lansing, Michigan 48933-1694
Dear President Wood and Council Members,
We are pleased to submit the comprehensive annual financial report for the City of Lansing, Michigan for
the fiscal year ended June 30, 2019.
The City of Lansing assumes full responsibility for both the accuracy of the data, the completeness and
fairness of the presentation, including all disclosures. To the best of our knowledge and belief, the
enclosed data is accurate in all material respects and is reported in a manner designed to present fairly
the financial position and results of the government operations 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 2018/2019 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-end
June 30, 2019, 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 in conformity with the
Generally Accepted Accounting Principles (GAAP). The independent auditors report is presented as the
first component of the financial section of this report.
This letter of transmittal is designed to complement the Management Discussion and Analysis (MDEtA)
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 (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 the 1978 Charter revision. Lansing is a mature core city with a
population of 117,388 according to the 2018 census estimates and offers a full range of services. During
the fiscal year ended June 30, 2019 the City operated a police headquarters and precinct with 208 sworn
police officers, six fire stations with a fire protection force of 159, over 350 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.
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Reporting Entity
The financial reporting entity (the City) includes all of the funds of the primary government (i.e. the City
as legally defined) as well as its blended component unit the Lansing Building Authority. Blended
component units, although legally separate entities, are in substance part of the primary government's
operations and are included as part of the primary government. Discretely presented component units
are reported in a separate column in the combined financial statements to emphasize that they are
legally separate from the primary government and to differentiate their financial position, results of
operations and cash flows from those of the primary government. The Lansing Entertainment Ft Public
Facilities Authority, Tax increment Finance Authority, Brownfield Redevelopment Authority and Smart
Zone are reported as discretely presented component units.
Financial Management and Control
Management of the City of Lansing is responsible for establishing and maintaining internal controls.
These controls are 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. This allows for the accurate
presentation of 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,
2019 are discussed in the Management Discussion and Analysis (MDFtA), located immediately following
the Independent Auditor Reports.
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.
The City also maintains an encumbrance accounting system, whereby purchase order 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.
Local Economy
The City of Lansing is the seat of the Michigan state government. The local economy is comprised of a
diversified mix of business and industries. With Michigan State University, Davenport University, Cooley
Law School and Lansing Community College, the region has a strong higher education presence. The
metro Lansing region is also home to several national insurance company headquarters and healthcare
services with two major hospitals in the City and a wide variety of technology firms. Manufacturing also
4
has a strong presence especially in the automotive and biotech engineering sectors, with two General
Motors assembly plants and related facilities located in the City, including a $40 million Logistics Center
and a $162 million regional stamping plant, automotive suppliers throughout the region, production of
particle accelerators, and vaccine research and production.
Currently under construction and scheduled for completion in 2021, Michigan State University will be
home to a $76 million Nuclear Research facility which will include the Facility for Rare Isotope Beams
(FRIB). This will enable scientific discovery of rare isotope properties, employ top nuclear physicists and
is expected to create approximately 1,000 jobs. Even before the plant is completed Niowave, Inc.
established its operations in Lansing as a commercial spinoff from Michigan State University's nuclear
cyclotron facility. MSU has been named #1 in Nuclear Physics by U.S. News Et World Report. Surpassing
MIT for the top spot in 2010 and has held its position ever since.
Lansing serves as the cultural center for the region. Recent major investments have revitalized
downtown Lansing into an entertainment and residential destination with renovations to historic
buildings and brand new developments. The former Lansing Board of Water Light downtown plant was
transformed in 2011 into corporate headquarters for the AF Group followed by Blue Cross Blue Shield of
Michigan moving into the AF Groups former downtown location. Recent renovations of the former
downtown Knapp's department store into apartments and commercial space have attracted technology
firms. Highly successful, recently-completed new developments such as Marketplace, Midtown and
Skyview residential developments have added significant residential units near and within downtown.
The Outfield Ballpark Lofts development which opened in 2017 was the first in the nation to feature
apartments located right in the outfield of a Class-A minor league baseball stadium and has received
national and international awards.
2018 was another great year for the Lansing Economic Development Corporation (LEDC). The LEDC
continued to focus on economic development projects in the City of Lansing. For the entire 2018 calendar
year, the LEDC working with the Lansing Brownfield Redevelopment Authority, Mayor Andy Schor's office
and the Lansing City Council, gained approval of financing, development incentives or provided assistance
to make 28 development projects possible. These 28 projects represent $218 million in private
investment that will create 800 jobs and retain 65 jobs in Lansing.
This $218 million of private investment is split evenly between Business Expansion and Real Estate/Place
Based economic development projects. For jobs the numbers are 700 for Business Expansion projects and
165 for Real Estate/Place Based projects.
Some specific notable projects in 2018 were:
• The Capital City Market project located at 600 East Michigan which will provide a long-awaited
urban grocery store to downtown Lansing. This great $41.5 million mixed-use project will also
provide a second hotel downtown and additional apartment units.
• A 286-unit market rate multifamily apartment community to be built at 3600 Dunckle Road in
Lansing. The $52 million project will start with the remediation and demolition of the existing
vacant 102,000 square feet former hotel building. Then construction will begin, and it is
scheduled to be completed by June 30, 2021. The Developer has also agreed to fund $500,000 in
public improvements at the intersection of the Dunckle and Collins Roads.
• Redevelopment of the former EDS building at 930 W. Holmes Road. This project will repair and
redevelop a long vacant site in south Lansing. Included in the redevelopment plans are
streetscape improvements and more than $500,000 of private funds to be spent on public
infrastructure improvements and turning 2 acres of impervious asphalt surface parking into green
space.
In its commitment to regional partnerships, the City of Lansing has contracted with the Lansing Economic
Area Partnership (LEAP) since 2012. This arrangement allows for a cost-effective, regional based
approach to economic development. As testament to its success in 2017 LEAP received the prestigious
Excellence in Economic Development Award by the International Economic Development Council (IEDC).
5
Over the past decade LEAP and the Lansing Economic Development Corporation have attracted more
than $2.3 billion in new private investment to the City.
Awards and Acknowledgements
The 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, 2018. This was the 41 It 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 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 Jeff Scharnowske, have our sincere
appreciation for their contributions made in the preparation of this report and in the financial
management of the City. The 415t consecutive GFOA award recognizing their efforts is well deserved.
Cordially,
Shelbi Frayer
Chief Strategy Office and Finance Director
6
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Lansing
Michigan
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2018
04446. P
Executive Director/CEO
8
FINANCIAL SECTION
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Rebmann Robson
Rehmann
2330 East Paris Ave.SE
Grand Rapids,MI 49546
Ph: 616.975.4100
Fx: 616.975.4400
rehmann.com
INDEPENDENT AUDITORS' REPORT
December 19, 2019
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, 2019, 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.
11
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the 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, 2019, and the respective changes in financial position
and, where applicable, cash flows thereof and the budgetary comparison for the General Fund for the
year then ended in conformity with accounting principles generally accepted in the United States of
America.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis and the schedules for the pension and other postemployment
benefits plans, as listed in the table of contents, be presented to supplement the basic financial
statements. Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board who considers it to be an essential part of financial reporting
for placing the basic financial statements in an appropriate operational, economic, or historical context.
We have applied certain limited procedures to the required supplementary information in accordance
with auditing standards generally accepted in the United States of America, which consisted of inquiries
of management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City's basic financial statements. The combining and individual fund financial
statements and schedules, and the introductory section and statistical tables are presented for purposes
of additional analysis and are not a required part of the basic financial statements.
12
The 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.
Other Reporting Required by Government Auditing&andards
In accordance with Government Auditing Standards, we have also issued, under separate cover, our
report dated December 19, 2019, on our consideration of the City of Lansing, Michigan's internal control
over financial reporting and on our tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements and other matters. The purpose of that report is to describe the scope
of our testing of internal control over financial reporting and compliance and the results of that testing,
and not to provide an opinion on the 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.
.n�.- L LC
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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, 2019 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 net position $ (231,286,435)
Change in total net position (3,369,244)
Fund balances, governmental funds 39,054,736
Change in fund balances, governmental funds 1,194,217
Unassigned fund balance, general fund 9,992,885
Change in fund balance, general fund (7,295,022)
Long-term debt outstanding 178,948,144
Change in long-term debt (24,270,118)
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. The government-wide financial statements are designed to provide readers
with a broad overview of the City's finances, in a manner similar to a private-sector business. The Statement of Net
Position and the Statement of Activities are two financial statements that report information about the City, as a
whole, and about its activities, which provide measurements of long-term trends that should help answer this
question: Is the City, as a whole, better off or worse off as a result of this year's activities? Unlike the governmental
funds, the current year's revenues and expenses are taken into account regardless of when cash is received or paid,
known as "full accrual accounting".
The Statement of Net Position presents all of the City's assets, deferred outflows of resources, liabilities and deferred
inflows of resources with the difference between the these categories reported as "net position". Over time,
increases and decreases in net position are an indicator of whether the City's long-term financial position is improving
or deteriorating, but can also change as a result of governmental accounting standards.
The Statement of Activities presents information showing how the City's net position changed during the most recent
fiscal year. All changes in net position are reported as soon as the underlying events giving rise to the change occur,
regardless of the timing of related cash flows. Therefore, revenues and expenses are reported in these statements for
some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused
vacation leave).
The Statement of Net Position and the Statement of Activities report three activities, as follows:
Governmental Activities. Most of the City's basic services are reported under this category. Property taxes,
income taxes, and intergovernmental revenues generally fund these services. The Council (legislative branch), the
District Court (judicial branch), and general operations of the executive branch departments, such as police, fire,
parks, public works, and other general staff departments fall within the governmental activities.
16
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
Business-type Activities. The City charges fees to customers to help cover all or most of the costs of certain
services it provides. Sewage collection and treatment and commercial area parking are examples of business-type
activities.
Discretely Presented Component Units. Component units are legally separate organizations for which the elected
officials of the primary government are financially accountable. The City has various discretely presented units:
the Brownfield Redevelopment Authority, the Tax Increment Finance Authority, and the Lansing Entertainment
and Public Facilities Authority.
These financial statements include two schedules that reconcile the amounts reported on the governmental fund
financial statements (modified accrual accounting) with governmental activities (full accrual accounting) on the
appropriate government-wide statements. The following summarizes the impact of transitioning from modified accrual
to full accrual accounting:
Capital assets used in governmental activities are not reported on governmental fund statements.
Certain revenues that are earned, but not available for use within the reporting period, are reported as revenues
for governmental activities, but are reported as deferred inflows of resources on the governmental fund
statements.
Other long-term assets that are not available to pay for current period expenditures are deferred in governmental
fund statements, but not deferred on the government-wide statements.
Internal service funds are reported as governmental activities, but reported as proprietary funds in the fund
financial statements.
Bond discounts and premiums in connection with the issuance of long-term debt are reported as other financing
sources/uses in governmental fund statements, but are capitalized and amortized in the government-wide
statements.
Unless due and payable, long-term liabilities, such as capital lease obligations, compensated absences, and others
only appear as liabilities in the government-wide statements.
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.
Pension and other postemployment benefits liabilities and related deferrals relating to governmental funds are
only reported in the government-wide statements.
The Notes to the Financial Statements provide additional information that is essential to a full understanding of the
data provided in the government-wide and fund financial statements.
17
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
Fund Financial Statements. The City's major funds are identified as the General Fund, Sewage Disposal System Fund,
and Municipal Parking System Fund. Data for all other funds, termed "nonmajor funds", are combined into a single,
aggregated presentation. A fund is a fiscal and accounting entity with a self-balancing set of accounts that the City
uses to keep track of specific sources of funding and spending for a particular purpose.
Governmental funds. Most of the City's basic services are reported in the governmental funds, which focus on
how money flows into and out of those funds and the balances left at year-end that are available for future
spending. The governmental fund financial statements provide a detailed short-term view of the City's general
government operations and the basic services it provides. Governmental fund information helps determine
whether there are greater or fewer financial resources that can be spent in the near future to finance the City's
programs. These funds are reported using modified accrual accounting, which measures cash and all other
financial assets that can readily be converted to cash. Governmental funds include the General Fund and special
revenue, capital projects, debt service, and permanent funds.
Proprietary funds. When the City charges customers for the services it provides, whether to outside customers or
to other agencies within the City, these services are generally reported in proprietary funds. Proprietary funds
(enterprise and internal service) utilize full accrual accounting; the same method used by private sector
businesses. Enterprise funds report activities that provide supplies and services to the general public. Examples
are the Sewage Disposal Fund and the Municipal Parking Fund. Internal service funds are reported as governmental
activities on the government-wide statements.
Fiduciary Funds. The City acts as a trustee or fiduciary, for its employee pension and other postemployment
benefit plans. It is also responsible for other assets that, because of a trust arrangement, can be used only for the
trust beneficiaries. The City's fiduciary activities are reported in separate Statements of Fiduciary Net Position
and Changes in Fiduciary Net Position. These funds, which include pension and other postemployment benefit
funds, are reported using full accrual accounting. The government-wide statements exclude fiduciary fund
activities and balances because these assets are restricted in purpose and do not represent spendable assets of
the City to finance its operations.
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 and individual fund 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 $3.4 million over the course of this fiscal year's operations, and came to a
total of $(231.3) million. Net position of governmental activities decreased $(16.9) million, and business-type
activities increased $13.5 million. Explanations for those changes are described below under the governmental
activities and business-type activities sections of this Management Discussion and Analysis.
Net Position
Governmental Activities Business-type Activities Total
2019 2018 2019 2018 2019 2018
Current and other assets $ 70,031,080 $ 60,223,657 $ 91,700,607 $ 84,766,314 $ 161,731,687 $ 144,989,971
Capital assets, net 179,267,839 183,112,603 338,450,763 354,396,144 517,718,602 537,508,747
Total assets 249,298,919 243,336,260 430,151,370 439,162,458 679,450,289 682,498,718
Deferred outflows of
resources 43,806,456 36,024,546 6,075,602 6,400,785 49,882,058 42,425,331
Long-term debt outstanding 45,721,172 47,341,836 133,226,972 155,876,426 178,948,144 203,218,262
Other liabilities 688,526,465 638,249,867 73,982,282 72,354,918 762,508,747 710,604,785
Total liabilities 734,247,637 685,591,703 207,209,254 228,231,344 941,456,891 913,823,047
Deferred inflows of
resources 18,786,464 36,845,515 375,427 2,172,678 19,161,891 39,018,193
Net position
Net investment in
capital assets 146,153,309 148,263,240 233,988,263 227,127,434 380,141,572 375,390,674
Restricted 23,505,738 18,989,889 1,953,175 1,886,620 25,458,913 20,876,509
Unrestricted(deficit) (629,587,773) (610,329,541) (7,299,147) (13,854,833) (636,886,920) (624,184,374)
Total net position $ (459,928,726) $ (443,076,412) $ 228,642,291 $ 215,159,221 $ (231,286,435) $ (227,917,191)
The largest component of the City's net position reflects its net investment in capital assets (e.g. land, buildings,
equipment, infrastructure, and others). Restricted net position is the next largest component, which represents
amounts subject to external restrictions such as bond covenants, State legislation or Constitutional provision. The
remaining portion, unrestricted net position are resources that may be used at the City's discretion, but often have
limitations based on policy action. The large decrease in unrestricted net position of governmental activities was
primarily due to the increase in the net pension and net other postemployment benefits liabilities of $14.5 million and
$28.3 million, respectively. The increase in restricted net position for governmental activities was primarily due to
increases in the major and local street fund balances, as intergovernmental revenues exceeded current year projects.
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
2019 2018 2019 2018 2019 2018
Program revenues
Charges for services $ 15,573,751 $ 12,727,522 $ 50,916,057 $ 48,926,712 $ 66,489,808 $ 61,654,234
Operating grants 29,663,253 28,983,936 6,648,917 1,603,942 36,312,170 30,587,878
Capital grants 3,313,872 855,760 - - 3,313,872 855,760
General revenues
Taxes 78,714,366 78,028,764 78,714,366 78,028,764
State shared revenues 15,178,768 14,748,491 15,178,768 14,748,491
Unrestricted grants
and contributions 24,351,305 24,671,167 24,351,305 24,671,167
Unrestricted investment
earnings 463,685 216,239 463,685 216,239
Gain on sale of
capital assets 64,820 _ 64,820 -
Total revenues 167,323,820 160,231,879 57,564,974 50,530,654 224,888,794 210,762,533
Expenses
General government 26,679,840 16,995,976 - - 26,679,840 16,995,976
Public safety 97,391,612 87,352,251 97,391,612 87,352,251
Public works 29,644,398 26,485,877 29,644,398 26,485,877
Recreation and culture 7,650,889 8,302,243 7,650,889 8,302,243
Community development 21,046,090 16,150,417 21,046,090 16,150,417
Interest on long-term debt 1,182,488 1,137,561 1,182,488 1,137,561
Sewage disposal system - - 31,939,976 28,552,143 31,939,976 28,552,143
Municipal parking system 7,081,998 9,888,246 7,081,998 9,888,246
Cemetery 470,220 1,379,877 470,220 1,379,877
Golf 278,501 (372,775) 278,501 (372,775)
Garbage and rubbish
collection 1,035,262 3,101,893 1,035,262 3,101,893
Recycling - - 3,856,764 3,859,496 3,856,764 3,859,496
Total expenses 183,595,317 156,424,325 44,662,721 46,408,880 228,258,038 202,833,205
Change in net position,
before transfers (16,271,497) 3,807,554 12,902,253 4,121,774 (3,369,244) 7,929,328
Transfers (580,817) (912,186) 580,817 912,186 -
Change in net position (16,852,314) 2,895,368 13,483,070 5,033,960 (3,369,244) 7,929,328
Net position:
Beginning of year (443,076,412) (445,971,780) 215,159,221 210,125,261 (227,917,191) (235,846,519)
End of year $ (459,928,726) $ (443,076,412) $ 228,642,291 $ 215,159,221 $ (231,286,435) $ (227,917,191)
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, 2019
Property tax and special
assessments
24.9% Income tax
22.1%
Otherrevenues
0.3% Charges for services
9.3%
Unrestricted grants and
contributions
14.6% Operating grants
Capital grants 17.7%
State shared revenues 2.0%
9.1%
In total, governmental activity revenues increased $7.1 million from FY 2018 to FY 2019, with trends of the major
revenue categories as follows:
Property taxes comprised the largest portion of governmental activity revenue at 24.9%, or $41.7 million, a $2.1
million, or 5.4% increase from fiscal year 2018, due largely to rising property values and a decrease in taxroll
adjustments from the previous year.
Income taxes comprised 22.1%, or$37.0 million, of governmental activity revenue, the full amount of which is revenue
to the General Fund. This represents a $1.4 million, or 3.7%, decrease from fiscal year 2018. 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. Local income tax rates are also limited to 0.5% for
Lansing residents working subject to East Lansing's income tax as part of a reciprocal agreement.
Restricted operating and capital grants and contributions made up $33.0 million, or 19.7% of governmental activity
revenue for fiscal year 2019, a $3.1 million, or 10.5% increase from fiscal year 2018. This increase was largely
attributable to an increase in State gas and weight tax revenue distributions and an increase in federal grant revenue
from the Community Development Block Grant.
Unrestricted grants and contributions (including state shared sales tax revenue) comprised 23.7%, or $39.5 million, of
revenues, a $110.0 thousand, or 0.3% increase from fiscal year 2018. A little more than one-third of this category,
$15.2 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.
Charges for services are program-specific revenues generated for services provided. Governmental activity charges for
services increased $2.8 million from FY 2018 to FY 2019.
21
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
The following chart depicts expenses of the governmental activities for the fiscal year:
Expenses - Governmental Activities
Fiscal Year Ending June 30, 2019
Interest on long-term
Community development debt
11.5% 0.6% General government
14.5%
Recreation and culture
4.2%
Public works
16.1%
Public safety
53.1%
Total expenses for governmental activities increased $27.2 million, 17.4%, from FY 2018 to FY 2019, with trends of the
major expense categories as follows:
The largest component of governmental activities was public safety, accounting for 53.0%, or $97.4 million, a 11.5%
($10.0 million) increase from FY 2018, largely due to investment in supplies and repairs.
Public works comprises the next largest component of governmental activity expenses, at 16.1%, or $29.6 million, a
11.9% ($3.2 million) increase from FY 2018, due to significant increases in net pension and other postemployment
benefit (retiree healthcare) expenses.
At $26.7 million, general government expenses, representing general and internal City services, comprised 14.5% of
governmental activities. This category increased by $9.7 million in operational costs, a 60.0% overall increase from FY
2018, due to significant increases in net pension and other postemployment benefit (retiree healthcare) expenses.
Community development represented 11.5%, or $21.0 million, of total governmental activities expenses. This category
increased $4.9 million, or 30.3% from FY 2018, due mainly to a change in Code Compliance operations from the Fire
Department (public safety) to the Economic Development and Planning Department (community development).
Business-type Activities. Net position of the business-type activities increased by $13.5 million from FY 2018 to
$228.6 million. The increase was mainly attributable to the increase in sewer and municipal parking system funds net
position for the fiscal year. The increase in the sewer fund is necessary to fund future debt needs associated with
U.S. Environmental Projection Agency and Michigan Department of Environmental Quality-mandated sewer separation
projects. The increase in the municipal parking fund (operating grants and contributions) was due to the sale of the
Townsend parking ramp and payoff of the corresponding debt.
Financial Analysis of the City's Funds
As the City completed the fiscal year, its governmental funds reported combined ending fund balances of $39.1
million, a $1.2 million increase from fiscal year 2018. Of the $39.1 million fiscal year 2019 combined ending fund
balance, $3.0 million is unavailable to spend (i.e. amounts tied up in inventories, prepaids and endowments), $17.0
million is legally restricted, and $9.2 million is committed for designated projects, leaving $9.9 million unassigned.
22
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
The unassigned fund balance for the General Fund was $10.0 million, a decrease of$7.0 million from FY 2018, which is
further described in the General Fund Budgetary Highlights section.
Sewage Disposal System Fund
Net position increased $4.8 million to $227.5 million in FY 2019. Unrestricted net position decreased $2.0 million,
from $5.7 million to $3.7 million. The decrease in unrestricted net position was the result of significant increases in
net pension expenses.
Municipal Parking System Fund
Net position increased $7.0 million to $14.8 million. Unrestricted net position increased $6.7 million, from a deficit of
$2.0 million to $4.7 million. The increase in unrestricted net position was the result of the sale of the Townsend
parking ramp and payoff of the corresponding debt.
General Fund Budgetary Highlights
The FY 2019 General Fund budget was adopted as a balanced budget, based on projected revenues, with a $500,000
addition to reserves (fund balance). The City budgeted a vacancy factor in its General Fund to account for anticipated
positions that would become vacant during the course of the year. Because vacancies that will occur within each
department cannot be projected, the vacancy factor is budgeted as a single line item of the General Fund and
allocated to various departments through a budget amendment during the year. During the course of the fiscal year,
the General Fund revenue budget was amended from $134.9 million to $135.4 million.
General Fund reserves, combined with the Budget Stabilization Fund (combined for financial statement purposes)
decreased $7.3 million from FY 2018 to $10.0 million. Unassigned fund balance decreased $7.0 million, or 41.2% from
fiscal year 2018. The $7.3 million decrease in total General Fund reserves was mostly attributable to actual
expenditures exceeding budgeted expenditures by $2.3 million, largely due to IRS filing penalties and a litigation
settlement.
Capital Assets. At the end of the fiscal year 2019, the City had invested $517.7 million, net of accumulated
depreciation, in a broad range of capital assets (see the table below). Additional information regarding the City's
capital assets can be found in Footnote 6 of the of the Notes to the Financial Statements section of the CAFR.
Capital Assets (Net of Depreciation)
Governmental Activities Business-type Activities Total
2019 2018 2019 2018 2019 2018
Land $ 25,302,787 $ 25,302,787 $ 12,470,361 $ 13,292,491 $ 37,773,148 $ 38,595,278
Land improvements 14,069,991 11,799,044 14,255,651 14,265,778 28,325,642 26,064,822
Buildings and improvement 45,632,844 50,058,975 69,089,497 84,746,261 114,722,341 134,805,236
Equipment 7,236,992 7,559,948 967,786 1,187,130 8,204,778 8,747,078
Infrastructure 87,025,225 88,391,849 228,122,636 234,662,935 315,147,861 323,054,784
Construction in progress - - 13,544,832 6,241,549 13,544,832 6,241,549
Total capital assets, net $ 179,267,839 $ 183,112,603 $338,450,763 $ 354,396,144 $ 517,718,602 $537,508,747
The decrease in the above-noted capital asset amounts from the prior year is due to depreciation and the sale of the
Townsend parking ramp in FY 2019.
23
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
Debt Administration. The City, along with the Lansing Building Authority (LBA), a blended component unit of the City,
is empowered by law to authorize, issue, and sell debt obligations. Limited tax and unlimited tax general obligation
bonds are backed by the full faith and credit of the City. The City also issues revenue-dedicated bonded debt, whose
payment for principal and interest comes solely out of funds that receive legally-restricted revenues. The Sewage
Disposal fund has the City's only dedicated revenue bonds currently outstanding. LBA's bonds financed the
construction of parking structures, golf courses, and other related improvements. Revenues derived from user fees
from persons using parking and golf facilities fund the debt service requirements for related improvements, but they
are also backed by a limited tax pledge.
Outstanding Debt
2019 2018
Governmental activities
General obligation bonds $ 14,163,699 $ 15,330,000
Deferred amounts:
For issuance discounts (52,488) (59,321)
For issuance premiums 814,209 55,139
Installment purchase contracts 11,274,020 12,289,396
Loans 7,242,002 7,476,545
Compensated absences 9,968,748 9,957,856
Workers compensation 2,310,982 2,292,221
Total governmental activities 45,721,172 47,341,836
Business-type activities
General obligation bonds 115,616,143 137,182,606
Deferred amounts:
For issuance discounts (340,815) (490,338)
For issuance premiums 2,438,581 1,879,538
Revenue bonds 14,075,000 15,625,000
Installment purchase
agreements 582,920 808,500
Compensated absences 855,143 871,120
Total business-type activities 133,226,972 155,876,426
Total outstanding debt $178,948,144 $ 203,2187262
More detailed information regarding these activities and funds can be found in Footnote 9 of the of the Notes to the
Financial Statements section of the CAFR.
24
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
Economic Condition and Outlook
Employment levels and personal income in the City decreased slightly in FY 2019 resulting in decreased income tax
revenue. In addition, the East Lansing income tax took effect January 1, 2019, further impacting income tax revenue
for City of Lansing residents working in East Lansing. Property values increased; however growth in corresponding
property tax revenue is limited by State of Michigan Statute to the rate of inflation for property that does not change
hands. The 2018/2019 fiscal year resulted in a $7.3 million decrease to General Fund unassigned reserves, bringing
unassigned General Fund reserves down to $10.0 million, or 7.6% of General Fund expenditures, which is below the
City's 12%-15% fund balance policy. As a result, the City's General Fund Reserve Policy requires annual appropriations
of a minimum of $500,000 until the 12% target is reached. Significant challenges remain in the longer-term. Going
forward, State-imposed limitations on municipal revenues, most notably those on property tax growth, will continue
to constrain resources, which in context of projected increases in pension, healthcare, and infrastructure needs, will
present budgetary challenges. The East Lansing income tax will be in effect for the full duration of FY 2020, and
additional decreases in income tax may result from the General Motors strike from September to October 2019.
Strengthening the City's economic base, building back up General Fund reserves, and addressing long-term pension and
retiree healthcare obligations are top priorities. The City continues to work diligently with its employees and unions
to address the ongoing structural imbalance between projected revenues and long-term pension and retiree health
care costs and has been successful in achieving significant agreements over the past several years on a wide range of
cost-saving measures. The City, in conjunction with the Mayor-appointed Financial Health Team engaged a consultant
for studies of its long-term pension and retiree healthcare obligations, and those studies were completed in FY 2018.
The City continues to experience significant economic development and national recognition of its economic
development efforts and accomplishments. For more information, please see the "Local Economy" section of the
Transmittal Letter.
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. Copies of this
financial report, as well as other financial reports, are available on the City's website, www.lansingmi.gov. If you
have any questions about this report or need additional financial information, please feel free to contact the Finance
Department at (517) 483-4500.
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BASIC FINANCIAL STATEMENTS
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28
GOVERNMENT-WIDE FINANCIAL STATEMENTS
29
CITY OF LANSING, MICHIGAN
Statement of Net Position
June 30, 2019
Primary Government
Governmental Business-type Component
Activities Activities Totals Units
Assets
Cash and investments $ 45,129,421 $ 59,182,174 $ 104,311,595 $ 6,251,253
Receivables, net 23,611,894 28,751,368 52,363,262 1,050,927
Internal balances (773,950) 773,950 - -
Due from primary government - - - 145
Inventories, prepaids and other assets 2,063,715 415,706 2,479,421 154,302
Restricted cash and investments - 2,577,409 2,577,409 2,838,415
Capital assets not being depreciated 25,302,787 26,015,193 51,317,980 -
Capital assets being depreciated, net 153,965,052 312,435,570 466,400,622 23,352
Total assets 249,298,919 430,151,370 679,450,289 10,318,394
Deferred outflows of resources
Deferred charge on refunding 320,544 4,352,459 4,673,003 1,090,578
Deferred pension amounts 26,091,730 1,111,065 27,202,795 -
Deferred other postemployment benefit amounts 17,394,182 612,078 18,006,260 -
Total deferred outflows of resources 43,806,456 6,075,602 49,882,058 1,090,578
Liabilities
Accounts payable and
accrued liabilities 19,191,320 2,097,493 21,288,813 2,082,946
Accrued interest payable 333,492 3,066,968 3,400,460 214,705
Unearned revenue 1,097,724 160,119 1,257,843 501,429
Due to component units - 145 145 -
Long-term debt:
Due within one year 5,482,381 13,481,419 18,963,800 254,719
Due in more than one year 40,238,791 119,745,553 159,984,344 44,940,618
Net pension liability(due in more than one year) 274,907,636 30,391,923 305,299,559 -
Net other postemployment benefit liability(due in more
than one year) 392,996,293 38,265,634 431,261,927
Total liabilities 734,247,637 207,209,254 941,456,891 47,994,417
Deferred inflows of resources
Deferred pension amounts 6,158,087 375,427 6,533,514 -
Deferred other postemployment benefit amounts 12,628,377 - 12,628,377
Total deferred inflows of resources 18,786,464 375,427 19,161,891 -
Net position
Net investment in capital assets 146,153,309 233,988,263 380,141,572 23,352
Restricted for:
Public safety 1,588,549 - 1,588,549 -
Public works 16,029,533 16,029,533
Community development 3,442,457 3,442,457
Building department 531,033 531,033
Debt service - 1,800,929 1,800,929
Capital projects 152,246 152,246 -
Cooley Stadium - - - 80,000
Endowments(nonexpendable) 1,914,166 1,914,166 -
Unrestricted (deficit) (629,587,773) (7,299,147) (636,886,920) (36,688,797)
Total net position $(459,928,726) $ 228,642,291 $(231,286,435) $ (36,585,445)
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, 2019
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 $ 26,679,840 $ 7,567,720 $ 2,881,563 $ $ (16,230,557)
Public safety 97,391,612 3,935,250 4,060,020 (89,396,342)
Public works 29,644,398 2,978,549 16,810,972 3,313,872 (6,541,005)
Recreation and culture 7,650,889 1,092,232 102,709 - (6,455,948)
Community development 21,046,090 - 5,807,989 (15,238,101)
Interest on long-term debt 1,182,488 - - (1,182,488)
Total governmental activities 183,595,317 15,573,751 29,663,253 3,313,872 (135,044,441)
Business-type activities:
Sewage disposal system 31,939,976 35,752,812 943,555 - 4,756,391
Municipal parking system 7,081,998 8,422,161 5,654,396 6,994,559
Cemetery 470,220 415,757 - (54,463)
Golf 278,501 - 13,786 (264,715)
Garbage and rubbish collection 1,035,262 2,243,627 - 1,208,365
Recycling 3,856,764 4,081,700 37,180 262,116
Total business-type activities 44,662,721 50,916,057 6,648,917 - 12,902,253
Total primary government $ 228,258,038 $ 66,489,808 $ 36,312,170 $ 3,313,872 $ (122,142,188)
Component units
Brownfield redevelopment
authority $ 4,250,976 $ - $ 778,932 $ - $ (3,472,044)
Tax increment finance
authority 3,590,401 - - (3,590,401)
Lansing entertainment Et
public facilities authority 10,658,863 8,761,416 1,346,300 (551,147)
Total component units $ 18,500,240 $ 8,761,416 $ 2,125,232 $ $ (7,613,592)
continued...
31
CITY OF LANSING, MICHIGAN
Statement of Activities
For the Year Ended June 30, 2019
Primary Government
Governmental Business-type Component
Activities Activities Totals Units
Changes in net position
Net (expense) revenues $(135,044,441) $ 12,902,253 $(122,142,188) $ (7,613,592)
General revenues:
Property taxes 41,692,930 - 41,692,930 6,302,358
Income taxes 37,021,436 37,021,436 -
State shared revenues 15,178,768 15,178,768
Grants and contributions not
restricted to specific programs 24,351,305 24,351,305 -
Unrestricted investment earnings 463,685 463,685 148,925
Gain on sale of capital assets 64,820 64,820 -
Transfers -internal activities (580,817) 580,817 - -
Total general revenues and transfers 118,192,127 580,817 118,772,944 6,451,283
Change in net position (16,852,314) 13,483,070 (3,369,244) (1,162,309)
Net position, beginning of year (443,076,412) 215,159,221 (227,917,191) (35,423,136)
Net position, end of year $ (459,928,726) $ 228,642,291 $ (231,286,435) $ (36,585,445)
concluded
The accompanying notes are an integral part of the financial statements.
32
FUND FINANCIAL STATEMENTS
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34
CITY OF LANSING, MICHIGAN
Governmental Fund Financial Statements
Major Fund
General Fund - This is the general operating fund of the City. It is used to account for and report all
financial resources not accounted for and reported in another fund.
Nonmajor Funds
Nonmajor governmental funds are presented, by fund type, within the Combining and Individual Fund
Financial Statements and Schedules section of this report as noted in the table of contents.
35
CITY OF LANSING, MICHIGAN
Balance Sheet
Governmental Funds
June 30, 2019
Nonmajor
Governmental
General Funds Totals
Assets
Cash and cash equivalents $ 3,420,179 $ 171,739 $ 3,591,918
Equity in pooled cash and investments 10,033,485 26,955,975 36,989,460
Accounts receivable, net 8,805,431 120,891 8,926,322
Taxes receivable, net 635,163 - 635,163
Special assessments receivable - 191,201 191,201
Loans receivable 1,222,523 1,222,523
Accrued interest receivable - 2,172,446 2,172,446
Due from other funds 500 - 500
Due from other governments, net 2,761,330 7,691,569 10,452,899
Inventories 29,575 1,030,305 1,059,880
Prepaids 9,030 7,556 16,586
Total assets $ 25,694,693 $ 39,564,205 $ 65,258,898
Liabilities
Negative equity in pooled cash $ - $ 2,889,204 $ 2,889,204
Accounts payable 6,299,107 2,063,759 8,362,866
Deposits payable - 35,020 35,020
Accrued payroll 2,536,288 67,198 2,603,486
Indemnity bonds - 43,867 43,867
Due to other funds 2 624,145 624,147
Advances from other funds - 150,303 150,303
Due to other governments 3,273,824 587,250 3,861,074
Unearned revenue 568,924 528,800 1,097,724
Other liabilities 821,915 - 821,915
Total liabilities 13,500,060 6,989,546 20,489,606
Deferred inflows of resources
Unavailable revenues-fees 2,163,143 - 2,163,143
Unavailable revenues- loans and accrued interest receivable - 3,394,969 3,394,969
Unavailable revenues-special assessments - 156,444 156,444
Total deferred inflows of resources 2,163,143 3,551,413 5,714,556
Fund balances
Nonspendable 38,605 2,952,027 2,990,632
Restricted - 17,038,777 17,038,777
Committed - 9,147,988 9,147,988
Unassigned (deficit) 9,992,885 (115,546) 9,877,339
Total fund balances 10,031,490 29,023,246 39,054,736
Total liabilities, deferred inflows of
resources and fund balances $ 25,694,693 $ 39,564,205 $ 65,258,898
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, 2019
Fund balances-total governmental funds $ 39,054,736
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 25,302,787
Capital assets being depreciated, net 153,965,052
Capital assets accounted for in internal service funds, net (11,341,206)
Because the focus of governmental funds is on short-term financing, some assets will not be available to pay for
current expenditures. Those assets(i.e., receivables)are offset by deferred inflows of resources in the governmental
funds and, therefore, are not included in fund balance.
Deferred ambulance fees receivable 819,507
Deferred nuisance fees receivable 555,753
Deferred loans receivable 1,222,523
Deferred long-term interest receivable 2,172,446
Deferred long-term special assessments receivable 156,444
Deferred long-term taxes and tax settlement receivables 22,500
Deferred State of Michigan receivables 765,383
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. 12,777,701
Long-term liabilities and related deferred outflows are not due and payable in the current period and therefore are
not reported in the funds.
Bonds, loans and installment purchase agreements payable, and deferred discounts/premiums (30,769,406)
Deferred charge on refunding 320,544
Accrued interest on bonds, loans and leases payable (316,345)
Compensated absences and other long-term liabilities (11,432,664)
Certain pension and other postemployment benefit-related amounts, such as the net pension and other
postemployment benefit liabilities and deferred amounts are not due and payable in the current period or do not
represent current financial resources and therefore are not reported in the funds.
Net pension liability (274,907,636)
Deferred outflows related to the net pension liability 26,091,730
Deferred inflows related to the net pension liability (6,158,087)
Net other postemployment benefit liability (392,996,293)
Deferred outflows related to the net other postemployment benefit liability 17,394,182
Deferred inflows related to the net other postemployment benefit liability (12,628,377)
Net position of governmental activities $ (459,928,726)
The accompanying notes are an integral part of the financial statements.
37
CITY OF LANSING, MICHIGAN
Statement of Revenues, Expenditures and Change in Fund Balances
Governmental Funds
For the Year Ended June 30, 2019
Nonmajor
Governmental
General Funds Totals
Revenues
Property taxes and special assessments $ 40,594,678 $ 1,137,967 $ 41,732,645
Income taxes 37,021,436 - 37,021,436
Licenses and permits 1,399,881 - 1,399,881
Intergovernmental 18,402,995 27,183,157 45,586,152
Charges for services 9,024,331 6,211,325 15,235,656
Fines and forfeitures 2,050,717 256,273 2,306,990
Interest and rents 226,344 405,468 631,812
Contributions 21,255,032 12,500 21,267,532
Otherrevenues 387,451 736,495 1,123,946
Total revenues 130,362,865 35,943,185 166,306,050
Expenditures
Current expenditures:
General government 24,027,129 3,313,802 27,340,931
Public safety 76,775,769 1,883,913 78,659,682
Public works 11,615,556 17,339 11,632,895
Highways and streets - 11,984,896 11,984,896
Recreation and culture 8,138,369 - 8,138,369
Community development 9,175,051 10,260,226 19,435,277
Debt service:
Principal 1,859,052 1,324,543 3,183,595
Interest 448,745 551,562 1,000,307
Capital outlay - 4,798,070 4,798,070
Total expenditures 132,039,671 34,134,351 166,174,022
Revenues over(under)expenditures (1,676,806) 1,808,834 132,028
Other financing sources(uses)
Transfers in 100,000 8,649,296 8,749,296
Transfers out (5,718,216) (3,611,897) (9,330,113)
Issuance of long-term debt 1,665,000 1,665,000
Issuance of long-term refunding debt 6,938,699 6,938,699
Bond premium 780,670 780,670
Payment to refunding bond escrow agent (7,741,363) (7,741,363)
Total other financing sources(uses) (5,618,216) 6,680,405 1,062,189
Net change in fund balances (7,295,022) 8,489,239 1,194,217
Fund balances, beginning of year 17,326,512 20,534,007 37,860,519
Fund balances,end of year $ 10,031,490 $ 29,023,246 $ 39,054,736
The accompanying notes are an integral part of the financial statements.
38
CITY OF LANSING, MICHIGAN
Reconciliation
Net Change in Fund Balances of Governmental Funds
to Change in Net Position of Governmental Activities
For the Year Ended June 30, 2019
Net change in fund balances-total governmental funds $ 1,194,217
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 7,499,433
Depreciation expense (10,469,794)
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 (69,761)
Change in deferred nuisance fees receivable 239,729
Change in deferred loans receivable (1,937)
Change in deferred long-term interest receivable 59,250
Change in deferred special assessments receivable (39,714)
Change in deferred State of Michigan receivables 765,383
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 (200,473)
Gain on sale of capital assets from governmental internal service funds 64,820
Interest expense from governmental internal service funds (174,413)
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 (8,603,699)
Principal payments on long-term debt 3,183,595
Premium on bond issuances (780,670)
Payments to refunding bond escrow agent 7,741,363
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 (18,761)
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 debt 6,316
Amortization of issuance premiums and discounts, and deferred charge on refunding (14,084)
Change in the accrual for compensated absences (3,864)
Change in the net pension liability and related deferred amounts (18,319,605)
Change in the net other postemployment benefit liability and related deferred amounts 1,090,355
Change in net position of governmental activities $ (16,852,314)
The accompanying notes are an integral part of the financial statements.
39
CITY OF LANSING, MICHIGAN
Statement of Revenues, Expenditures and Change in Fund Balance
Budget and Actual - General Fund
For the Year Ended June 30, 2019
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Property taxes $ 40,315,000 $ 40,315,000 $ 40,594,678 $ 279,678
Income taxes 38,500,000 38,500,000 37,021,436 (1,478,564)
Licenses and permits 1,677,000 1,677,000 1,399,881 (277,119)
Intergovernmental 19,196,700 19,196,700 18,402,995 (793,705)
Charges for services 9,672,200 9,672,200 9,024,331 (647,869)
Fines and forfeitures 2,456,100 2,456,100 2,050,717 (405,383)
Interest and rents 205,000 205,000 226,344 21,344
Contributions 22,500,000 22,500,000 21,255,032 (1,244,968)
Otherrevenues 333,000 905,875 387,451 (518,424)
Total revenues 134,855,000 135,427,875 130,362,865 (5,065,010)
Expenditures
General government:
Attorney's office 2,168,300 2,168,300 3,181,864 1,013,564
City clerk 1,197,000 1,197,000 1,356,153 159,153
Council 714,000 714,000 695,984 (18,016)
Courts 6,605,500 6,605,500 6,275,406 (330,094)
Internal audit 194,900 194,900 192,655 (2,245)
Finance 5,471,600 5,471,600 8,373,425 2,901,825
Library rental 150,000 150,000 151,846 1,846
Human resources 2,118,000 2,118,000 2,121,102 3,102
Mayor 1,296,800 1,296,800 1,256,114 (40,686)
Office of community media 469,900 469,900 422,580 (47,320)
Budgetary savings from attrition (500,000) (500,000) - 500,000
Total general government 19,886,000 19,886,000 24,027,129 4,141,129
Public safety:
Police 43,193,300 43,312,596 42,832,580 (480,016)
Fire 34,129,900 34,129,900 33,943,189 (186,711)
Total public safety 77,323,200 77,442,496 76,775,769 (666,727)
Public works 11,572,500 11,572,500 11,615,556 43,056
Recreation and culture 8,301,000 8,301,000 8,138,369 (162,631)
continued...
40
CITY OF LANSING, MICHIGAN
Statement of Revenues, Expenditures and Change in Fund Balance
Budget and Actual - General Fund
For the Year Ended June 30, 2019
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Expenditures (concluded)
Community development:
Economic development and planning $ 5,021,300 $ 5,021,300 $ 4,918,772 $ (102,528)
Neighborhood and community engagement 863,500 863,500 815,172 (48,328)
Human relations / community services 1,598,300 2,343,538 1,493,554 (849,984)
Human services / community support 2,041,400 2,041,400 1,947,553 (93,847)
Total community development 9,524,500 10,269,738 9,175,051 (1,094,687)
Debt service:
Principal 1,859,100 1,859,100 1,859,052 (48)
Interest 451,900 451,900 448,745 (3,155)
Total debt service 2,311,000 2,311,000 2,307,797 (3,203)
Total expenditures 128,918,200 129,782,734 132,039,671 2,256,937
Revenues over (under) expenditures 5,936,800 5,645,141 (1,676,806) (7,321,947)
Other financing sources (uses)
Transfers in 100,000 100,000 100,000
Transfers out (6,036,800) (6,036,800) (5,718,216) (318,584)
Issuance of long-term debt 1,725,000 (1,725,000)
Total other financing sources (uses) (5,936,800) (4,211,800) (5,618,216) (1,406,416)
Net change in fund balance 1,433,341 (7,295,022) (8,728,363)
Fund balance, beginning of year 17,326,512 17,326,512 17,326,512
Fund balance, end of year $ 17,326,512 $ 18,759,853 $ 10,031,490 $ (8,728,363)
concluded
The accompanying notes are an integral part of the financial statements.
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42
CITY OF LANSING, MICHIGAN
Proprietary Fund Financial Statements
Major Funds
Sewage Disposal System Fund This fund accounts for the provision of sewage disposal services to the
residents of the City.
Municipal Parking System Fund This fund accounts for the operation of City-owned parking facilities.
Nonmajor Funds and Internal Service Funds
Nonmajor enterprise funds and internal service funds are presented, by fund type, within the Combining
and Individual Fund Financial Statements and Schedules section of this report as noted in the table of
contents.
43
CITY OF LANSING, MICHIGAN
Statement of Net Position
Proprietary Funds
June 30,2019
I 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 $ 787 $ 3,221,027 $ 23,568 $ 3,245,382 $ -
Equity in pooled cash and investments 39,270,669 14,771,634 1,894,489 55,936,792 7,437,247
Accounts receivable,net 4,828,795 66,092 170,328 5,065,215 11,340
Accrued interest receivable 35,551 93,732 - 129,283 -
Due from other funds 2,944 986,515 989,459
Lease receivable,current 657,988 - - 657,988 -
Inventories 238,858 - 52,493 291,351 352,259
Prepaids - 124,355 - 124,355 634,990
Total current assets 45,035,592 19,263,355 2,140, 778 66,439,825 8,435,836
Noncurrent assets:
Restricted cash and cash equivalents 2,425,163 152,246 - 2,577,409
Advances to other funds - 150,303 150,303
Lease receivable,net of current portion 6,087,138 16,811,744 - 22,898,882 -
Capital assets not being depreciated 13,965,581 11,545,371 504,241 26,015,193 92,892
Capital assets being depreciated,net 307,826,801 2,552,762 2,056,007 312,435,570 11,248,314
Total noncurrent assets 330,304,683 31,212,426 2,560,248 364,077,357 11,341,206
Total assets 375,340,275 50,475,781 4,701,126 430,517,182 19,777,042
Deferred outflows of resources
Deferred charge on refunding 1,183,607 3,168,852 - 4,352,459 -
Deferred pension amounts 606,035 202,012 303,018 1,111,065
Deferred other postemployment benefit amounts 358,721 104,375 148,982 612,078
Total deferred outflows of resources 2,148,363 3,475,239 452,000 6,075,602
Liabilities
Current liabilities:
Accounts payable 1,529,944 178,846 181,356 1,890,146 2,553,855
Deposits payable - 66,815 - 66,815 -
Accrued interest payable 624,234 2,439,877 2,857 3,066,968 17,147
Accrued payroll 90,426 48,261 1,845 140,532 159,237
Claims incurred but not reported - - - - 750,000
Due to other funds 362,870 2,942 365,812 -
Due to component units - 145 - 145
Unearned revenues - - 160,119 160,119 -
Bonds and notes payable,current portion 12,043,482 1,130,000 230,023 13,403,505 370,290
Compensated absences,current portion 62,571 2,022 13,321 77,914 83,804
Total current liabilities 14,713,527 3,868,908 589,521 19,171,956 3,934,333
Noncurrent liabilities:
Bonds and notes payable,net of current portion 95,590,057 23,025,370 352,897 118,968,324 2,301,746
Compensated absences,net of current portion 431,530 168,283 177,416 777,229 763,262
Net pension liability 16,577,409 5,525,803 8,288,711 30,391,923 -
Net other postemployment benefit liability 22,426,368 6,525,283 9,313,983 38,265,634
Total noncurrent liabilities 135,025,364 35,244,739 18,133,007 188,403,110 3,065,008
Total liabilities 149,738,891 39,113,647 18,722,528 207,575,066 6,999,341
Deferred inflows of resources
Deferred pension amounts 204,778 68,259 102,390 375,427 -
Net position
Net investment in capital assets 222,087,576 9,923,359 1,977,328 233,988,263 8,669,170
Restricted for debt retirement 1,800,929 - - 1,800,929 -
Restricted for capital projects - 152,246 152,246 -
Unrestricted(deficit) 3,656,464 4,693,509 (15,649,120) (7,299,147) 4,108,531
Total net position $ 227,544,969 $ 14,769,114 $ (13,671,792) $ 228,642,291 $ 12,777,701
The accompanying notes are an integral part of the financial statements.
44
CITY OF LANSING, MICHIGAN
Statement of Revenues, Expenses and Changes in Fund Net Position
Proprietary Funds
For the Year Ended June 30,2019
Governmental
Business-type Activities-Enterprise Funds Activities
Sewage Municipal Nonmajor
Disposal Parking Enterprise Internal
System System Funds Totals Service Funds
Operating revenues
Charges for services $ 35,752,812 $ 8,422,161 $ 6,741,084 $ 50,916,057 $ 85,397,512
Operating expenses
Personnel services 8,371,242 1,872,284 1,961,265 12,204,791 8,644,110
Purchase of goods and services 10,216,365 2,114,909 3,062,380 15,393,654 74,773,138
Depreciation 10,595,778 980,505 388,030 11,964,313 2,180,737
Total operating expenses 29,183,385 4,967,698 5,411,675 39,562,758 85,597,985
Operating income(loss) 6,569,427 3,454,463 1,329,409 11,353,299 (200,473)
Nonoperating revenues(expenses)
Interest revenue 943,555 1,451,501 50,966 2,446,022 -
Gain on sale of capital assets - 4,202,895 - 4,202,895 64,820
Interest expense and fees (2,756,591) (2,114,300) (14,586) (4,885,477) (174,413)
Capital contribution to others - (214,486) (214,486)
Total nonoperating revenue(expenses) (1,813,036) 3,540,096 (178,106) 1,548,954 (109,593)
Income(loss)before transfers 4,756,391 6,994,559 1,151,303 12,902,253 (310,066)
Transfers
Transfers in - - 613,593 613,593
Transfers out (32,776) (32,776)
Totaltransfers - - 580,817 580,817
Change in net position 4,756,391 6,994,559 1,732,120 13,483,070 (310,066)
Net position,beginning of year 222,788,578 7,774,555 (15,403,912) 215,159,221 13,087,767
Net position,end of year $ 227,544,969 $ 14,769,114 $ (13,671,792) $ 228,642,291 $ 12,777,701
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 30,2019
Governmental
Business-type Activities-Enterprise Funds I Activities
Sewage Municipal Nonmajor
Disposal Parking Enterprise Internal
LSystem j System Funds I min Service Funds
Cash flows from operating activities
Cash received from customers $ 35,756,653 $ 9,236,731 $ 6,684,983 $ 51,678,367 $ -
Cash received from interfund services - - - - 85,938,214
Cash payments for goods and services (9,358,735) (2,296,634) (2,999,286) (14,654,655) (74,132,136)
Cash payments to employees (7,265,840) (2,565,758) (3,433,958) (13,265,556) (8,777,275)
Net cash provided by operating activities 19,132,078 4,374,339 251,739 23,758,156 3,028,803
Cash flows from noncapital financing activities
Transfers in - - 613,593 613,593 -
Transfers out (32,776) (32,776)
Net cash provided by noncapital financing activities - 580,817 580,817 -
Cash flows from capital and related financing activities
Proceeds from sale of capital assets 17,980,870 - 17,980,870 77,416
Acquisition and construction of capital assets (8,047,242) (1,749,665) - (9,796,907) (1,318,930)
Capital contributions to others - - (214,486) (214,486)
Proceeds from issuance of long-term debt 9,785,317 6,210,000 15,995,317
Premium on issuance of long-term debt 795,207 325,232 1,120,439
Principal paid on long-term debt (11,886,780) (12,515,000) (225,580) (24,627,360) (361,324)
Interest paid on long-term debt (2,886,379) (1,525,898) (15,691) (4,427,968) (174,669)
Amount paid to refunding bond escrow agent (8,569,870) (6,556,333) (15,126,203)
Payments received on capital lease 644,653 - 644,653
Net cash provided by(used in)capital and related financing activities (20,165,094) 2,169,206 (455,757) (18,451,645) (1,777,507)
Cash flows from investing activities
Interest and dividends received 946,889 374,776 50,966 1,372,631
Payments received on loans made to others - 46,299 - 46,299
Net cash provided by investing activities 946,889 421,075 50,966 1,418,930 -
Net change in cash and cash equivalents (86,127) 6,964,620 427,765 7,306,258 1,251,296
Cash and cash equivalents,beginning of year 41,782,746 11,180,287 1,490,292 54,453,325 6,185,951
Cash and cash equivalents,end of year $ 41,696,619 $ 18,144,907 $ 1,918,057 $ 61,759,583 $ 7,437,247
Reconciliation to statement of net position
Cash and cash equivalents $ 787 $ 3,221,027 $ 23,568 $ 3,245,382 $ -
Equity in pooled cash and investments 39,270,669 14,771,634 1,894,489 55,936,792 7,437,247
Restricted cash and cash equivalents 2,425,163 152,246 - 2,577,409 -
$ 41,696,619 $ 18,144,907 $ 1,918,057 $ 61,759,583 $ 7,437,247
continued...
46
CITY OF LANSING, MICHIGAN
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30,2019
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) $ 6,569,427 $ 3,454,463 $ 1,329,409 $ 11,353,299 $ (200,473)
Adjustments to reconcile operating income(loss)to
net cash provided by operating activities:
Depreciation 10,595,778 980,505 388,030 11,964,313 2,180,737
Changein:
Accounts receivable 3,843 413,032 (44,965) 371,910 540,702
Inventories 105,313 - 105,313 (10,114)
Prepaids - (124,355) (124,355) (290,033)
Due from other funds (2) 401,538 401,536
Deferred outflows-pension 275,239 140,682 267,971 683,892
Deferred outflows-OPEB (358,721) (104,375) (148,982) (612,078) -
Accounts payable 752,317 (56,140) 63,094 759,271 941,149
Accrued payroll 3,913 1,023 22 4,958 9,807
Claims incurred but not reported - - - - (150,000)
Due to component units (1,230) (1,230)
Unearned revenues (11,136) (11,136) -
Compensated absences (17,198) (6,434) 7,655 (15,977) 7,028
Net pension liability 2,006,958 (140,095) (1,151,668) 715,195 -
Deferred inflows-pension (138,385) (65,184) (119,949) (323,518)
Net other postemployment benefit liability 189,140 (258,110) 29,466 (39,504)
Deferred inflows-OPEB (855,544) (260,981) (357,208) (1,473,733) -
Net cash provided by operating activities $ 19,132,078 $ 4,374,339 $ 251,739 $ 23,758,156 $ 3,028,803
concluded
The accompanying notes are an integral part of the financial statements.
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CITY OF LANSING, MICHIGAN
Fiduciary Fund Financial Statements
Pension and Other Postemployment Benefit Trust Funds - Employee pension and other postemployment
benefit trust funds accept payments made by the City, invest fund resources, calculate and pay pensions
to retirees (or beneficiaries), and account for postemployment healthcare coverage.
Combining schedules for fiduciary funds are presented in the notes to the financial statements.
Agency Funds - These funds account for resources held in a trustee or agent capacity for the 54-A
District Court.
Combining statements for agency funds are presented, by fund type, within the Combining and Individual
Fund Financial Statements and Schedules section of this report as noted in the table of contents.
49
CITY OF LANSING, MICHIGAN
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2019
Pension
and Other
Postemployment
Benefit Trust Agency
Funds Funds
Assets
Cash and cash equivalents $ 10,000,828 $
Equity in pooled cash and investments 4,402,694 76,818
Investments:
U.S. treasuries 19,401,838 -
U.S. agencies 32,829,852
Collateralized mortgage obligations 930,732
Mutualfunds 364,216,954
Domestic equities 110,842,048
International equities 1,955,119
Emerging market equities 11,692,856
Money market funds 9,141,606
Dividends and interest receivable 445,695 -
Total assets 565,860,222 $ 76,818
Liabilities
Accounts payable 437,701 $ -
Undistributed receipts 76,818
Total liabilities 437,701 $ 76,818
Net position restricted for
Pension benefits 462,739,731
Other postemployment benefits 102,682,790
Total net position $ 565,422,521
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 Benefits Trust Funds
For the Year Ended June 30, 2019
Additions
Investment income:
Net appreciation in fair value
of investments $ 30,539,239
Interest income 58,089
Dividend income 898,000
Investment expenses (1,753,200)
Net investment income 29,742,128
Contributions:
Employer 49,957,231
Plan members 4,869,154
Total contributions 54,826,385
Total additions 84,568,513
Deductions
Participant benefits 78,923,796
Administrative expense 1,272,294
Total deductions 80,196,090
Change in net position 4,372,423
Net position restricted for pension and other postemployment benefits
Beginning of year 561,050,098
End of year $ 565,422,521
The accompanying notes are an integral part of the financial statements.
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COMPONENT UNITS
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CITY OF LANSING, MICHIGAN
Discretely Presented Component Units
Discretely presented component units are entities that are legally separate from the City but for which
the City is financially accountable, or their relationship with the City is such that exclusion would cause
the City's financial statements to be misleading or incomplete. The City has three discretely presented
component units:
Brownfield Redevelopment Authority
Tax Increment Finance Authority
Lansing Entertainment and Public Facilities Authority
Complete financial statements for each of the individual component units may be obtained from the
entity's administrative offices.
55
CITY OF LANSING, MICHIGAN
Combining Statement of Net Position
Discretely Presented Component Units
June 30, 2019
Lansing
Tax Entertainment
Brownfield Increment Et Public
Redevelopment Finance Facilities
Authority Authority Authority Totals
Assets
Cash and cash equivalents $ 3,929,091 $ 1,158,738 $ 1,163,424 $ 6,251,253
Receivables, net 189,176 - 861,751 1,050,927
Due from primary government - 145 - 145
Inventories, prepaids and other assets - 154,302 154,302
Restricted cash and cash equivalents 2,758,415 80,000 2,838,415
Capital assets being depreciated, net - - 23,352 23,352
Total assets 4,118,267 3,917,298 2,282,829 10,318,394
Deferred outflows of resources
Deferred charge on refunding - 1,090,578 - 1,090,578
Liabilities
Accounts payable and
accrued liabilities 1,345,618 - 737,328 2,082,946
Accrued interest payable - 214,705 - 214,705
Unearned revenues - 501,429 501,429
Long-term debt:
Due within one year - 254,719 - 254,719
Due in more than one year 500,000 44,440,618 - 44,940,618
Total liabilities 1,845,618 44,910,042 1,238,757 47,994,417
Net position
Investment in capital assets - - 23,352 23,352
Restricted for Cooley Stadium - 80,000 80,000
Unrestricted (deficit) 2,272,649 (39,902,166) 940,720 (36,688,797)
Total net position $ 2,272,649 $ (39,902,166) $ 1,044,072 $ (36,585,445)
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, 2019
Lansing
Tax Entertainment
Brownfield Increment Et Public
Redevelopment Finance Facilities
Authority Authority Authority Totals
Expenses
Brownfield redevelopment $ 4,250,976 $ - $ $ 4,250,976
Community development - 3,590,401 3,590,401
Recreation and culture - - 10,658,863 10,658,863
Total expenses 4,250,976 3,590,401 10,658,863 18,500,240
Program revenues
Charges for services - - 8,761,416 8,761,416
Operating grants and contributions 778,932 1,346,300 2,125,232
Total program revenues 778,932 10,107,716 10,886,648
Net program (expense) revenue (3,472,044) (3,590,401) (551,147) (7,613,592)
General revenues
Property taxes 3,036,500 2,879,420 386,438 6,302,358
Unrestricted investment earnings 18,311 130,614 - 148,925
Total general revenues 3,054,811 3,010,034 386,438 6,451,283
Changes in net position (417,233) (580,367) (164,709) (1,162,309)
Net position, beginning of year 2,689,882 (39,321,799) 1,208,781 (35,423,136)
Net position, end of year $ 2,272,649 $ (39,902,166) $ 1,044,072 $ (36,585,445)
The accompanying notes are an integral part of the financial statements.
57
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58
NOTES TO FINANCIAL STATEMENTS
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60
CITY OF LANSING, MICHIGAN
Index - Notes to Financial Statements
Page
1. Summary of Significant Accounting Policies 62
Reporting Entity
Government-wide and Fund Financial Statements
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources, and Equity
2. Budgetary Information 71
3. Deficit Fund Equity 73
4. Deposits and Investments 74
5. Receivables 84
6. Capital Assets 85
7. Accounts Payable and Accrued Liabilities 87
8. Interfund Receivables, Payables and Transfers 87
9. Long-term Debt 89
10.Fund Balances - Governmental Funds 94
11.Net Investment in Capital Assets 95
12.Segment Information - Enterprise Funds 95
13.Risk Management 95
14.Property Taxes 96
15.Contingent Liabilities 97
16.Pension Plans 97
17.Other Postemployment Benefits 112
18.Tax Abatements 123
61
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Lansing (the "City") was incorporated in 1859. In 1909, the City came under the provisions of
Act 279, P.A. 1909, as amended ("Home Rule City Act"). The City operates under a strong Mayor form of
government in which the Mayor is responsible for implementation and administration of City policy as
established by City Council.
The accounting and reporting policies of the City conform in all material respects to generally accepted
accounting principles (GAAP) as applicable to governments. The Governmental Accounting Standards Board
(GASB) is the standard setting body for establishing governmental accounting and financial reporting
principles, which are primarily set forth in the GASB's Codification of Governmental Accounting and
Financial Reporting Standards (GASB Codification). Following is a summary of the significant policies:
Reporting Entity
As required by generally accepted accounting principles, these financial statements present the City and its
component units, entities for which the City is considered to be financially accountable. The financial data
of the component units are included in the City's reporting entity because of the significance of their
operational or financial relationships with the City.
Blended Component Unit
A blended component unit is a legally separate entity from the City but is so intertwined with the City that
it is, in substance, the same as the City. It is reported as part of the City and its financial data is combined
with data of the appropriate funds. The City has one blended component unit, the Building Authority with a
fiscal June 30 year-end. This component unit provides services primarily to benefit the City. The blended
unit is described as follows:
The City of Lansing Building Authority (the "Authority") was established by the City under Act 31, Michigan
Public Acts of 1948. The Mayor, with the advice and consent of City Council, appoints the Authority's
governing body and designates management. The Authority uses the proceeds of its tax-exempt bonds to
finance the construction or acquisition of capital assets for the City only. The bonds are secured by lease
agreements with the City and will be retired through lease payments from the City. The financial activity,
assets, liabilities and equity of the Authority are incorporated within the City's Municipal Parking System
enterprise fund.
Discretely Presented Component Units
Discretely presented component units are entities that are legally separate from the City but for which the
City is financially accountable, or their relationship with the City is such that exclusion would cause the
City's financial statements to be misleading or incomplete. The discretely presented component units are
as follows:
62
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
The Lansing Brownfield Redevelopment Authority ("LBRA") was established by the City on August 17, 1997,
under the authority contained in Act 381, Michigan Public Acts of 1996 (the "Act"). The Act authorizes the
City to establish and to designate the boundaries of a Brownfield redevelopment zone. The Brownfield
Redevelopment Authority is appointed by City Council to preside over such a zone, and it is authorized to
promote the revitalization of environmentally distressed areas within the City of Lansing. The Act allows
the LBRA to participate in a broad range of improvement activities intended to encourage the reuse of
industrial and commercial property by offering economic incentives for redevelopment to prevent property
value deterioration. Tax increment financing plans must be approved by the City.
Tax increment financing permits the LBRA to capture tax revenues which are attributable to increases in
the value of real and personal property located within an approved project area. Current activities of the
LBRA include collections of property tax revenues on project areas for the Rite Aid Pharmacy and the
former Motor Wheel Site Plant.
The Tax Increment Finance Authority ("TIFA") was established by the City under the authority contained
in Act 450, Michigan Public Acts of 1981 ("Act 450"). Act 450 authorizes the City to designate specific
districts within its corporate limits as TIFA districts. The TIFA presides over such districts, formulating plans
for public improvements, economic development, neighborhood revitalization, and historic preservation
within the districts. Act 450 allows the TIFA to participate in a broad range of improvement activities
intended to contribute to economic growth and prevent property value deterioration. The TIFA's governing
body is appointed by the Mayor with the advice and consent of the City Council. Bond issuances, to fund the
above activities, are approved by the City Council and the legal liability for the debt remains with the City.
The Lansing Entertainment and Public Facilities Authority ("LEPFA") was established under the charter of
the City of Lansing, Michigan in February 1996, replacing the former Greater Lansing Convention/Exhibition
Authority, which had been responsible for operating and managing the Lansing Center and the Lansing Civic
Arena (the latter through the fiscal year ended June 30, 1995). LEPFA was established to oversee the
management and operations of the Lansing Center, the City Market and the Cooley Law School Stadium.
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.
Component Unit Financial Statements
Complete financial statements for the individual component units may be obtained from each entity's
administrative offices.
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
63
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Lansing Entertainment and Public Facilities Authority
333 East Michigan Avenue
Lansing, Michigan 48933
Joint Venture
In 1998, the City entered into an agreement with Ingham County (the "County") to form the City of Lansing
and County of Ingham Joint Building Authority (JBA) for the purpose of constructing and managing a building
in downtown Lansing that houses the courts, prosecuting attorney and other related departments. The JBA
is governed by a three-member board composed of one member each appointed by the City and the County
and one appointed jointly by the two units. Both the County and the City contribute cash and/or property
to the JBA. Bonds were issued in 1999 by the JBA to provide the funding necessary to construct the
building. Because the joint venture agreement does not provide an explicit contractual formula outlining
the City's claim to the JBA's assets, it is considered to be a "joint venture with no equity interest" and
accordingly, no amounts are reported in the accompanying financial statements for an equity interest.
Financial information for the JBA may be obtained by writing the Ingham County Financial Services Division,
P.O. Box 319, Mason, Michigan 48854.
Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of
activities) report information on all of the nonfiduciary activities of the primary government and its
component units. Governmental activities, which normally are supported by taxes and intergovernmental
revenues, are reported separately from business-type activities, which rely to a significant extent on fees
and charges for support. Likewise, the primary government is reported separately from certain component
units for which the primary government is financially accountable.
The statement of activities demonstrates the degree to which the direct expenses of a given function or
segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a
specific function or segment. Program revenues include (1) charges to customers or applicants who
purchase, use, or directly benefit from goods, services, or privileges provided by a given function or
segment and (2) grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function or segment. Taxes and other items not properly included among
program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds,
even though the latter are excluded from the government-wide financial statements. Major individual
governmental funds and major individual enterprise funds are reported as separate columns in the fund
financial statements.
64
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements.
Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of
the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are
levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by
the provider have been met. Agency funds, a type of fiduciary fund, are unlike all other types of funds,
reporting only assets and liabilities. Therefore, agency funds cannot be said to have a measurement focus.
They do, however, use the accrual basis of accounting to recognize receivables and payables.
Governmental funds are reported using the current financial resources measurement focus and the modified
accrual basis of accounting. Under this method, revenues are recognized when measurable and available.
Revenues are considered to be available when they are collectible within the current period or soon enough
thereafter to pay liabilities of the current period. The City considers all revenues reported in the
governmental funds to be available if they are collected within three months after year-end, except for
income taxes that use a 45-day collection period, property taxes that use a 60-day collection period, and
reimbursement-based grants that use one year. Expenditures generally are recorded when a liability is
incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related
to compensated absences and claims and judgments, are recorded only when payment is due.
Property taxes, intergovernmental revenue, licenses, and interest associated with the current fiscal period
are all considered to be susceptible to accrual and as such have been recognized as revenues of the current
fiscal period. Only the portion of special assessments receivable due within the current fiscal period is
considered to be susceptible to accrual as revenue of the current period. All other revenue items are
considered to be measurable and available only when cash is received by the City.
The City reports the following major governmental fund:
General Fund. This fund is the City's primary operating fund. It accounts for all the financial resources
of the primary government, except those accounted for and reported in another fund.
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.
65
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Capital Projects Funds are used to account for and report financial resources that are restricted,
committed, or assigned to expenditure for capital outlays, including the acquisition or construction of
capital facilities and other capital assets.
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, health care and self-insurance
services, and information technology.
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 fiduciary capacity for the 54-A District Court.
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.
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.
Restricted net position are assets that are subject to restrictions beyond the government's control. The
restrictions may be externally imposed or imposed by law. When both restricted and unrestricted resources
are available for use, it is the government's policy to use restricted resources first, then unrestricted
resources as they are needed.
66
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
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
State statutes authorize the City to invest in:
Bonds, securities, other obligations and repurchase agreements of the United States, or an agency or
instrumentality of the United States.
Certificates of deposit, savings accounts, deposit accounts or depository receipts of a qualified financial
institution.
Commercial paper rated at the time of purchase within the two highest classifications established by not
less than two standard rating services and that matures not more than 270 days after the date of
purchase.
Bankers' acceptances of United States banks.
Obligations of the State of Michigan and its political subdivisions, that, at the time of purchase are rated
as investment grade by at least one standard rating service.
Mutual funds registered under the Investment Company Act of 1940 with the authority to purchase only
investment vehicles that are legal for direct investment by a public corporation.
External investment pools as authorized by Public Act 20 as amended through December 31, 1997.
Investments are stated at fair value. Short-term investments are reported at cost, which approximates fair
value.
Unrealized appreciation or depreciation on pension and other postemployment benefit trust fund
investments due to changes in fair value are recognized each year.
67
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Recei vables/Pa yables
All receivables are reported at their gross value and, where appropriate, are reduced by the estimated
portion that is expected to be uncollectible.
Transactions between funds that are representative of lending/borrowing arrangements outstanding at the
end of the fiscal year are referred to as either due to/from other funds (i.e., the current portion of
interfund loans) or advances to/from other funds (i.e., the non-current portion of interfund loans). All other
outstanding balances between funds are reported as due to/from other funds. Any residual balances
outstanding between the governmental activities and business-type activities are reported in the
government-wide financial statements as internal balances.
Amounts due from other governments include amounts due from grantors for specific programs and capital
projects. Program grants and capital grants for capital assets are recorded as receivables and revenues at
the time reimbursable project costs are incurred. Amounts received in advance of project costs being
incurred are reported as unearned revenue.
Certain receivables in governmental funds consist of rehabilitation and redevelopment loans that are
generally not expected or scheduled to be collected in the subsequent year.
Leases receivable consist of amounts collectible from local municipalities for which the City has irrevocably
pledged its full faith and credit as collateral for certain construction and improvement bonds. In accordance
with contractual agreements, these entities will provide all future amounts due for bond principal and
accrued interest payable. The receivable has been reported as current based on the amounts to be
collected next year to satisfy obligations.
Inventories and Prepaids
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. In governmental funds, prepaid
items are charged to expenditures using the consumption method.
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 are defined by the City as assets having a useful life in excess of three years and whose costs exceed
$5,000 ($100,000 for buildings). Capital assets are stated at historical cost or estimated historical cost
where actual cost information is not available. Donated capital assets are recorded at their estimated
acquisition cost as of the donation date.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend
asset lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects
are constructed. Interest incurred during the construction phase of capital assets of business-type activities,
if any, is included as part of the capitalized value of the asset constructed.
68
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Capital assets 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
In addition to land and construction in progress, the amount presented as capital assets not being
depreciated includes intangible assets consisting of land development rights acquired for the purpose of
farmland and ranch preservation. Land development rights are deemed to have an indefinite useful life,
and therefore are not being amortized.
The City reviews long-lived assets for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset exceeds its fair value. If it is determined that an impairment loss has
occurred the asset is written down to its net realizable value and a current charge to income is recognized.
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 a future period(s) and so will not be recognized as
an outflow of resources (expense/expenditure) until then. The City reports a deferred charge on advance
bond refunding for the difference in the carrying value of refunded debt and its reacquisition price. This
amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The City
also reports deferred outflows of resources for changes in expected and actual investments returns,
assumptions, and benefits provided, related to the net pension and other postemployment benefit
liabilities.
Compensated Absences
It is the City's policy to permit employees to accumulate earned but unused vacation and compensatory
time benefits, subject to certain limitations. Certain bargaining unit employees are also permitted to
accumulate earned but unused sick leave. All vacation and compensatory time pay and 50% of sick leave are
accrued when incurred in the government-wide and proprietary fund financial statements. A liability for
these amounts is reported in governmental funds only if they have matured, for example, as a result of
employee resignations or retirements.
Unearned Revenue
Unearned revenue consists of amounts received prior to the delivery of goods/service or expenditure on
allowable costs.
69
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
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 statement of net position. Bond premiums and
discounts are deferred and amortized over the life of the bonds using the straight-line basis. Bonds payable
are reported net of the applicable bond premium or discount. Bond issuance costs are reported as expenses
when incurred.
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 governmental funds report unavailable
revenues, which arise only under a modified accrual basis of accounting that are reported as deferred
inflows of resources. These amounts are deferred and recognized as an inflow of resources in the period
that the amounts become available. The City also reports deferred inflows of resources for changes in
expected and actual investments returns, assumptions, and benefits provided, related to the net pension
and other postemployment benefit liabilities.
Fund Balances
Governmental funds report nonspendable fund balance for amounts that cannot be spent because they are
either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Restricted
fund balance is reported when externally imposed constraints are placed on the use of resources by
grantors, contributors, or laws or regulations of other governments. Committed fund balance is reported
for amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of
the government's highest level of decision-making authority, the City Council. A formal resolution of the
City Council is required to establish, modify, or rescind a fund balance commitment. The City reports
assigned fund balance for amounts that are constrained by the government's intent to be used for specific
purposes, but are neither restricted nor committed. The City Council has not delegated the authority to
assign fund balance. Unassigned fund balance is the residual classification for the General Fund. In other
funds, the unassigned classification is used to report a deficit balance resulting from overspending for
specific purposes for which amounts had been restricted, committed, or assigned.
When the City incurs an expenditure for purposes for which various fund balance classifications can be used,
it is the City's policy to use restricted fund balance first, then committed, assigned, and finally unassigned.
70
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Interfund Transactions
During the course of normal operations, the City has numerous transactions between funds, including
expenditures and transfers of resources to provide services, construct assets, and service debt. The
accompanying financial statements generally reflect such transactions as transfers. Operating subsidies are
also recorded as transfers. The amounts recorded as subsidies or advances are determined by the City.
Balances outstanding at year-end are reported as due to/from other funds. Transfers between governmental
or proprietary funds are netted as part of the reconciliation to the government-wide financial statements.
Internal service funds are used to record charges for services to all City departments and funds as transfers
or operating revenue. All City funds record these payments to the internal service funds as transfers or
operating expenditures/expenses.
Pension and Other Postemployment Benefit Plans
For purposes of measuring the net pension and other postemployment benefit liabilities, deferred outflows
of resources and deferred inflows of resources related pensions and other postemployment benefits, and
pension and other postemployment benefit expense, information about the fiduciary net position of the
plans and additions to/deductions from the plan fiduciary net position have been determined on the same
basis as they are reported by the plans. For this purpose, benefit payments (including refunds of employee
contributions) are recognized when due and payable in accordance with the benefit terms. Investments are
reported at fair value.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
The City utilizes various investment instruments which are exposed to various risks, such as interest rate,
credit and overall market volatility. Due to the level of risk associated with certain investment securities, it
is reasonably possible that changes in the values of investment securities will occur in the near-term and
that such changes could materially affect the amounts reported in the financial statements.
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.
Public hearings are conducted to obtain taxpayer comments.
Not later than the third Monday in May, the Council adopts a budget through passage of a resolution.
71
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
The appropriated budget is prepared by fund, department and the mandatory expenditure accounts as
established by the State of Michigan's Uniform Chart of Accounts. Within the General Fund, the legal level
of budgetary control is the mandatory expenditure accounts (personal services, supplies and operating
expenses, capital outlay, debt service, transfers, and contingency) within each department. Within other
funds, the legal level of budgetary control is the mandatory expenditure accounts (personal services,
supplies and operating expenses, capital outlay, debt service, transfers, and contingency) within that fund.
Transfers between appropriations (mandatory accounts) require City Council approval. An exception to City
Council approval is allowed by City Charter for transfers between appropriations (mandatory accounts) for
amounts less than five thousand dollars, but not in excess of 15% of the appropriation in cases where five
thousand dollars exceeds 15%of the appropriation.
Copies of the City's separately issued budget report may be obtained from the Finance Department, 124 West
Michigan Avenue, Lansing, Michigan 48933.
The 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, 2019.
Appropriations lapse at year-end for all annual budgets. Appropriations are automatically carried forward
for project-type budgets.
72
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
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, 2019, 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:
Attorney's office $ 2,168,300 $ 3,181,864 $ 1,013,564
City clerk 1,197,000 1,356,153 159,153
Finance 5,471,600 8,373,425 2,901,825
Library rental 150,000 151,846 1,846
Human resources 2,118,000 2,121,102 3,102
Public works 11,572,500 11,615,556 43,056
Nonmajor governmental funds:
Major streets fund:
Current expenditures:
Principal 376,200 471,930 95,730
Interest 150,000 175,055 25,055
Other financing uses:
Payment to refunding bond escrow agent - 1,995,908 1,995,908
Local streets fund:
Current expenditures:
Highways and streets 5,413,600 5,679,276 265,676
Interest 279,000 359,124 80,124
Other financing uses:
Payment to refunding bond escrow agent - 5,745,455 5,745,455
State and federal grants fund:
Public works 17,339 17,339
The above budgeted amounts are presented at the activity level, which is the required minimum level of
control per the Michigan Uniform Budget Manual.
The budget variance in the attorney's office was due to the settlement of lawsuits of $1,306,000. The
variance in finance was due primarily to IRS penalties of $2,500,000 and bad debt write-offs of $287,281.
3. DEFICIT FUND EQUITY
The Special Assessments Capital Projects Fund reported a deficit fund balance of $115,546. 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 Cemetery, Garbage and Rubbish Collection, and Recycling Enterprise Funds reported deficits in
unrestricted fund net position of $2,284,746, $4,642,640, and $8,721,734, respectively, as a result of the
net pension and net other postemployment benefit liabilities.
73
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
The Tax Increment Finance Authority component unit reported a deficit in unrestricted net position of
$39,902,166 at June 30, 2019. 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).
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, 2019:
Primary Component
Government Units Totals
Statement of net position
Cash and investments $ 104,311,595 $ 6,251,253 $ 110,562,848
Restricted cash and investments 2,577,409 2,838,415 5,415,824
Statement of fiduciary net position
Pension and OPEB trust funds:
Cash and cash equivalents 10,000,828 - 10,000,828
Equity in pooled cash and investments 4,402,694 4,402,694
Investments 551,011,005 551,011,005
Agency funds:
Equity in pooled cash and investments 76,818 76,818
Total $ 672,380,349 $ 9,089,668 $ 681,470,017
Deposits and investments
Bank deposits:
Checking/savings accounts $ 96,412,183
Investment in securities and mutual funds:
Pooled investments 31,138,994
Employees' retirement system investments 192,414,946
Police and fire retirement system investments 325,108,126
Employees' money purchase pension plan investments 2,952,671
Retiree health care VEBA investments 30,535,262
Tax increment finance authority investments 2,758,415
Total investment in securities and mutual funds 584,908,414
Cash on hand 149,420
Total $ 681,470,017
74
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
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, $99,363,674 of the City's bank balance of $102,118,122 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. 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 $ 26,351,987
SEW AA+ 1,599,170
Unrated 867,005
Assets not subject to credit risk 2,320,832
Total $ 31,138,994
Interest Rate Risk. State law limits the allowable investments and the maturities of some of the allowable
investments as identified in the summary of significant accounting policies. The City's investment policy
does not have specific limits in excess of state law on investment maturities as a means of managing its
exposure to fair value losses arising from increasing interest rates. For investments held at year-end
maturities are as follows:
Due within 1 year $ 26,940,233
1-5 years 1,877,929
No maturity 2,320,832
Total $ 31,138,994
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.
75
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Fair Value Measurement
The City categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair
value of the asset, as determined by the City's investment advisors. Level 1 inputs are quoted prices in
active markets for identical assets; level 2 inputs are significant other observable inputs; level 3 inputs are
significant unobservable inputs.
Securities traded on a national or international exchange are valued at the last reported sales price at
current exchange rates. Debt securities are valued by the City's investment custodian using independent
pricing services based on the type of asset. The pricing services may use valuation models or matrix pricing,
which consider: (a) benchmark yields, (b) reported trades, (c) broker/dealer quotes, (d) benchmark
securities, (e) bids or offers, and (f) reference data. The City's level 2 investments as noted in the table
below are valued using significant other observable inputs of the underlying securities.
Level Level Level Total
U.S. treasuries $ - $ 2,466,175 $ $ 2,466,175
Money market funds 2,221,977 - 2,221,977
$ 2,221,977 $ 2,466,175 $ $ 4,688,152
Investments carried at net asset value:
Michigan CLASS government investment pool 26,450,842
Total investments $ 31,138,994
Investments in Entities that Calculate Net Asset Value per Share. The City holds shares in Michigan
CLASS whereby the fair value of the investment is measured on a recurring basis using net asset value per
share (or its equivalent) of the investment pool as a practical expedient.
At year end, the net asset value of the City's investment in Michigan CLASS was $26,450,842. The
investment pool had no unfunded commitments, specific redemption frequency or redemption notice period
required. The Michigan CLASS investment pool invests in U.S. treasury obligations, federal agency
obligations of the U.S. government, high-grade commercial paper (rated `A-1' or better) collateralized bank
deposits, repurchase agreements (collateralized at 102% by Treasuries and agencies), and approved money-
market funds. The program seeks to provide safety, liquidity, convenience, and competitive rates of return,
and is designed to meet the needs of Michigan public sector investors. It purchases securities that are
legally permissible under state statutes and are available for investment by Michigan counties, cities,
townships, school districts, authorities and other public agencies.
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.
76
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
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.
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.
77
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
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, 2019:
Employees' Police and Fire Employees' Retiree
Retirement Retirement Money Purchase Health Care
System System Pension Plan VEBA Totals
Investments
U.S. treasuries:
Not on securities loan $ 5,304,420 $ 7,329,275 $ $ $ 12,633,695
On securities loan 3,353,474 3,414,669 6,768,143
U.S. agencies:
Not on securities loan 14,959,810 17,870,042 32,829,852
On securities loan - - -
Collateralized mortgage
obligations 187,346 743,386 930,732
Domestic corporate securities
mutual funds:
Not on securities loan 21,587,284 33,836,262 55,423,546
Real estate investment
funds 19,320,190 24,877,312 44,197,502
Equity mutual funds - - -
International equity
mutual funds 66,559,683 92,886,663 163,248 3,346,741 162,956,335
Domestic equity
mutual funds 17,329,443 37,967,428 2,525,357 12,340,479 70,162,707
Domestic debt securities
mutual funds - - 264,066 13,251,852 13,515,918
International debt securities
mutual funds 17,960,946 - - 17,960,946
Private equity partnerships - -
Domestic equities:
Not on securities loan 28,681,369 59,932,481 88,613,850
On securities loan 8,765,797 13,462,401 22,228,198
International equities:
Not on securities loan 679,519 1,275,600 - 1,955,119
Emerging markets equities 3,580,659 7,283,009 829,188 11,692,856
Money market funds 2,105,952 6,268,652 767,002 9,141,606
Total investments $ 192,414,946 $ 325,108,126 $ 2,952,671 $ 30,535,262 $ 551,011,005
78
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
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
AAA $ 123,687 $ 152,200 $ 23,325 $ $ 299,212
AA - - 173,252 173,252
A - 4,405,262 4,405,262
BBB - 8,846,590 8,846,590
BB - - 67,489 - 67,489
US government
guaranteed 18,651,049 23,683,255 - 42,334,304
Not rated 28,723,550 45,626,831 - 74,350,381
Assets not subject
to credit risk 144,916,660 255,645,840 2,688,605 17,283,410 420,534,515
$ 192,414,946 $ 325,108,126 $ 2,952,671 $ 30,535,262 $ 551,011,005
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.
Concentration of Credit Risk. At June 30, 2019, the pension and other postemployment benefits investment
portfolio was concentrated as follows:
Employees' Police and Fire
Retirement Retirement
Investment Type Issuer System System
Corporate bonds Western Asset Funds, Inc. 11.2% 10.4%
Common stock Northern Trust Bank, N.A. 8.3% 11.7%
U.S. government securities United State of America 6.2% 4.3%
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.
79
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
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 $ 384,714 $ 697,551 $ $ $ 1,082,265
Italy 44,713 109,281 153,994
Netherlands 21,669 53,393 75,062
United Kingdom 15,762 38,823 54,585
France 42,233 103,100 145,333
Israel 170,428 273,452 443,880
International mutual funds 66,559,683 110,847,609 163,248 3,346,741 180,917,281
Total $ 67,239,202 $ 112,123,209 $ 163,248 $ 3,346,741 $ 182,872,400
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, 2019, maturities of the City's pension and other postemployment benefits trust debt securities,
money market funds and collateralized mortgage obligations 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. government bonds $ - $ 3,430,542 $ 3,978,355 $ 1,248,997 $ 8,657,894
U.S. agencies 325,448 444,959 - - 770,407
U.S. government mortgage
backed securities - 248,805 742,005 12,172,320 13,163,130
U.S. government issued
commercial mortgage
backed securities 416,974 123,687 485,612 1,026,273
Commercial mortgage
backed securities - 41,939 - 145,407 187,346
Total $ 325,448 $ 4,583,219 $ 4,844,047 $ 14,052,336 23,805,050
Fixed income investments with no maturity:
Domestic corporate securities mutual funds 21,587,284
Money market funds 2,105,952
Total investments $ 47,498,286
80
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Investment Maturities (Fair Value)
Less than More than
1 year 1-5 years 6-10 years 10 years Total
Police and Fire Retirement System
U.S. government bonds $ - $ 5,440,390 $ 4,067,987 $ 1,235,567 $ 10,743,944
U.S. agencies 401,725 616,509 - - 1,018,234
U.S. government mortgage
backed securities - 208,664 1,465,184 13,753,013 15,426,861
U.S. government issued
commercial mortgage
backed securities 756,084 152,200 516,663 1,424,947
Commercial mortgage
backed securities - 53,922 - 689,464 743,386
Total $ 401,725 $ 7,075,569 $ 5,685,371 $ 16,194,707 29,357,372
Fixed income investments with no maturity:
Domestic corporate securities mutual funds 33,836,262
Money market funds 6,268,652
Total investments $ 69,462,286
Investment Maturities (Fair Value)
1-5 years 6-10 years Total
Employees'Money Purchase Pension Pan
Domestic debt securities $ 173,252 $ 90,814 $ 264,066
Investment
Maturities (Fair
Value)
1-5 years
Retiree Health Care VEBA
Domestic debt securities $ 13,251,852
Securities Lending. Under contracts approved by the City, the pension and other postemployment benefits
trust funds are permitted to lend their securities to broker-dealers and banks (borrowers) for collateral that
will be returned for the same securities in the future. The pension trust and other postemployment benefits
funds' custodial banks manage the securities lending programs and receive cash as collateral. Collateral
cash is initially pledged at 100% of the fair value of the securities lent, and may not fall below 95% of the
market value of the loaned security during the term of the loan. At all times, collateral cannot be more
than $100,000 less than the market value of the loaned security. There are no restrictions on the amount of
securities that can be loaned.
81
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, 2019, the fair value of securities on loan by the Employees'
Retirement System and the Police and Fire Retirement System were $12,119,271 and $16,877,070,
respectively, for which the Plans' received cash collateral of $12,324,587 and $17,147,852, respectively.
The contract with the pension and other postemployment benefits trust fund custodians require them to
indemnify the City if the borrowers fail to return the securities (and if the collateral is inadequate to
replace the securities lent) or fail to pay the City for income distributions by the securities' issuers while
the securities are on loan.
Fair Value Measurement
The City categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair
value of the asset, as determined by the City's investment advisors. Level 1 inputs are quoted prices in
active markets for identical assets; level 2 inputs are significant other observable inputs; level 3 inputs are
significant unobservable inputs.
Securities traded on a national or international exchange are valued at the last reported sales price at
current exchange rates. Debt securities are valued by the Plans' investment custodian using independent
pricing services based on the type of asset. The pricing services may use valuation models or matrix pricing,
which consider: (a) benchmark yields, (b) reported trades, (c) broker/dealer quotes, (d) benchmark
securities, (e) bids or offers, and (f) reference data. Asset-backed and mortgage-backed securities funds are
valued based on the future cash flows of the principal and interest payments of the underlying collateral of
mortgages on various assets. The Plans' level 2 investments as noted in the tables below are valued using
significant other observable inputs of the underlying securities.
The City has the following recurring fair value measurements as of June 30, 2019:
Level Level Level Total
Employees' Retirement System
U.S. treasuries $ $ 8,657,894 $ $ 8,657,894
U.S. agencies 14,959,810 14,959,810
Collateralized mortgage obligations 187,346 - 187,346
Mutualfunds 105,476,410 19,320,190 124,796,600
Domestic equities 37,447,166 - 37,447,166
International equities 679,519 679,519
Emerging market equities 3,580,659 3,580,659
Money market funds 2,105,952 - 2,105,952
$ 149,477,052 $ 42,937,894 $ $ 192,414,946
82
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Level Level Level Total
Police and Fire Retirement System
U.S. treasuries $ $ 10,743,944 $ $ 10,743,944
U.S. agencies 17,870,042 17,870,042
Collateralized mortgage obligations 743,386 - 743,386
Mutualfunds 161,618,567 22,882,772 184,501,339
Domestic equities 73,394,882 - 73,394,882
International equities 1,275,600 1,275,600
Emerging market equities 7,283,009 7,283,009
Money market funds 6,268,652 - 6,268,652
$ 250,584,096 $ 51,496,758 $ 302,080,854
Investments carried at net asset value:
Real estate investment trusts 1,994,540
International equity mutual funds 21,032,732
Total investments $ 325,108,126
Net Asset Value Investments. Certain investments noted above are carried at net asset value as these are
not actively traded. The fair value is estimated based on the dollar value per share as of June 30, 2019.
These investments are able to be liquidated as needed, to the extent there is a willing buyer in the market.
There are not any restrictions related to the sale of these investments. At June 30, 2019, the City had
$2,087,085 outstanding on initial commitments of $8,600,000 with the Invesco Mortgage Recovery Fund (the
"Fund"). The Fund has a seven year life, and the intent is to sell all of the investments prior to the Fund's
maturity. The other investments at net asset value do not contain required redemption periods.
Level Level Level Total
Employees'Money Purchase Pension Plan
Mutualfunds $ 2,952,671 $ $ $ 2,952,671
Level1 Level2 Level3 Total
Retiree Health Care VEBA
Emerging market equities $ 829,188 $ $ $ 829,188
Mutualfunds 28,939,072 28,939,072
Money market funds 767,002 767,002
$ 30,535,262 $ $ $ 30,535,262
83
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
5. RECEIVABLES
Receivables are comprised of the following:
Governmental Business-type Component
Activities Activities Units
Accounts receivable $ 9,427,662 $ 5,555,246 $ 861,751
Taxes receivable 845,163 - -
Special assessments receivable 191,201 -
Loansreceivable 1,222,523 - 189,176
Accrued interest receivable 2,172,446 129,283 -
Due from other governments 10,488,669 -
Lease receivable - 23,556,870
Allowance for uncollectible accounts (735,770) (490,031) -
$ 23,611,894 $ 28,751,368 $ 1,050,927
Amount not expected to be
collected within one year $ 3,549,532 $ 22,898,882 $ 160,744
84
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
6. CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2019 was as follows:
Beginning Ending
Balance Additions Disposals Transfers Balance
Governmental activities
Capital assets, not being depreciated:
Land $ 25,302,787 $ - $ $ $ 25,302,787
Capital assets, being depreciated:
Land improvements 23,198,836 3,390,050 26,588,886
Equipment and vehicles 39,972,462 2,233,901 (1,075,181) 41,131,182
Buildings 136,275,787 136,275,787
Infrastructure 302,543,589 3,194,412 305,738,001
501,990,674 8,818,363 (1,075,181) 509,733,856
Less accumulated depreciation for:
Land improvements (11,399,792) (1,119,103) - (12,518,895)
Equipment and vehicles (32,412,514) (2,544,261) 1,062,585 (33,894,190)
Buildings (86,216,812) (4,426,131) - (90,642,943)
Infrastructure (214,151,740) (4,561,036) (218,712,776)
(344,180,858) (12,650,531) 1,062,585 (355,768,804)
Total capital assets
being depreciated, net 157,809,816 (3,832,168) (12,596) 153,965,052
Governmental activities
capital assets, net $ 183,112,603 $ (3,832,168) $ (12,596) $ $ 179,267,839
At June 30, 2019, the City's governmental activities had outstanding commitments through construction
contracts of approximately $5,543,000.
85
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Beginning Ending
Balance Additions Disposals Transfers Balance
Business-type activities
Capital assets, not being depreciated:
Land $ 13,292,491 $ - $ (822,130) $ - $ 12,470,361
Construction in progress 6,241,549 7,426,147 (122,864) 13,544,832
19,534,040 7,426,147 (822,130) (122,864) 26,015,193
Capital assets, being depreciated:
Land improvements 29,054,321 413,038 122,864 29,590,223
Equipment and vehicles 7,771,216 288,414 (68,548) - 7,991,082
Buildings 210,801,197 1,220,493 (25,255,312) 186,766,378
Sewers 343,700,253 448,815 344,149,068
591,326,987 2,370,760 (25,323,860) 122,864 568,496,751
Less accumulated depreciation for:
Land improvements (14,788,543) (546,029) - - (15,334,572)
Equipment and vehicles (6,584,086) (507,758) 68,548 (7,023,296)
Buildings (126,054,936) (3,921,412) 12,299,467 (117,676,881)
Sewers (109,037,318) (6,989,114) - (116,026,432)
(256,464,883) (11,964,313) 12,368,015 (256,061,181)
Total capital assets
being depreciated, net 334,862,104 (9,593,553) (12,955,845) 122,864 312,435,570
Business-type activities
capital assets, net $ 354,396,144 $ (2,167,406) $ (13,777,975) $ - $ 338,450,763
At June 30, 2019, the City's business-type activities had outstanding commitments through construction
contracts of approximately $5,169,000.
Depreciation expense was charged to functions/programs of the primary government as follows:
Depreciation of governmental activities by function
General government $ 434,908
Public safety 673,040
Public works 4,577,035
Recreation and culture 2,972,459
Community development 1,812,352
Internal service funds 2,180,737
Total depreciation expense - governmental activities $ 12,650,531
Depreciation of business-type activities by function
Sewage disposal system $ 10,595,778
Municipal parking system 980,505
Cemetery 9,827
Golf 77,191
Recycling 301,012
Total depreciation expense - business-type activities $ 11,964,313
86
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities are comprised of the following:
Governmental Business-type Component
Activities Activities Units
Accounts payable $ 9,778,564 $ 1,890,146 $ 1,707,790
Deposits payable 35,020 66,815 -
Accrued payroll 2,762,723 140,532 375,156
Contract retainage payable 1,138,157 - -
Due to other governments 3,861,074
Claims incurred but not reported 750,000
Other 865,782 - -
$ 19,191,320 $ 2,097,493 $ 2,082,946
8. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
The composition of interfund balances as of June 30, 2019, was as follows:
Due to and from primary government funds
Due from Due to Other
Other Funds Funds
General fund $ 500 $ 2
Nonmajor governmental funds - 624,145
Sewage disposal system 2,944 362,870
Municipal parking system 986,515 2,942
Total $ 989,959 $ 989,959
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.
Advances to and from primary government funds
Advances to Advances from
Other Funds Other Funds
Nonmajor governmental funds $ - $ 150,303
Municipal parking system 150,303 -
Total $ 150,303 $ 150,303
Advances are made to the Special Assessments Fund to prevent a negative equity in pooled cash.
87
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Due to and from component units
Due from Due to
primary component
government unit
Municipal parking system $ - $ 145
Tax increment finance authority 145 -
Total $ 145 $ 145
For the year ended June 30, 2019, interfund transfers consisted of the following:
Transfers In
Nonmajor Nonmajor
governmental enterprise
Transfers Out General fund funds funds Total
General fund $ - $ 5,716,520 $ 1,696 $ 5,718,216
Nonmajor governmental funds 100,000 2,900,000 611,897 3,611,897
Nonmajor enterprise funds - 32,776 - 32,776
Total $ 100,000 $ 8,649,296 $ 613,593 $ 9,362,889
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.
88
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
9. 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
General obligation bonds Rate Amount Amount
Governmental activities:
2013 Energy Efficiently Refunding Bonds - Limited Tax 2.40% $ 5,645,000 $ 2,475,000
2010 Recovery Zone Economic Development Bonds 3.40-7.25% 3,200,000 2,170,000
2015 Lansing Center Refunding Bonds - Limited Tax 2.00-3.00% 1,770,000 915,000
2018 Michigan Transportation Fund Bonds 3.50% 1,665,000 1,665,000
2019 General Obligation Refunding - Limited Tax 2.00-4.00% 6,938,699 6,938,699
$ 19,218,699 $ 14,163,699
Business-type activities:
2009 Building Authority Refunding Bonds - Limited Tax 6.014-6.584% $ 8,161,691 $ 2,767,490
2014 Building Authority Refunding Bonds - Limited Tax 4.75% 7,245,000 7,245,000
1998 Limited Tax Sewer Bond - 5005-10 2.25% 10,539,950 634,950
1999 Limited Tax Sewer Bond - 5005-11 2.50% 10,120,000 635,000
2000 Limited Tax Sewer Bond - 5005-12 2.50% 9,447,830 1,147,830
2001 Limited Tax Sewer Bond - 5005-13 2.50% 10,573,046 1,918,046
2002 Limited Tax Sewer Bond - 5005-14 2.50% 12,381,131 3,621,131
2003 Limited Tax Sewer Bond - 5005-15 2.50% 10,145,688 3,560,688
2004 Limited Tax Sewer Bond - 5005-16 2.13% 3,842,649 1,497,649
2005 Limited Tax Sewer Bond - 5005-17 2.13% 8,003,778 3,093,778
2005 Limited Tax Sewer Bond - 5005-18 1.63% 13,389,371 5,429,371
2006 Limited Tax Sewer Bond - 5005-19 1.63% 18,216,346 8,681,346
2007 Limited Tax Sewer Bond - 5005-20 1.63% 24,244,726 12,559,726
2008 Limited Tax Sewer Bond - 5005-21 2.50% 27,494,933 16,705,453
2008 Limited Tax Sewer Bond - 5005-22 2.50% 14,455,604 10,120,604
2010 Limited Tax Sewer Bond - 5411-01 2.50% 8,548,000 6,333,000
2015 Limited Tax Sewer Bond - 5211-01 2.50% 3,372,405 2,822,405
89
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Interest Original
General obligation bonds (concluded) Rate Amount Amount
Business-type activities (concluded):
2015 Limited Tax Sewer Bond - 5211-02 2.50% $ 1,977,487 $ 1,810,065
2016 Limited Tax Sewer Bond - 5581-01 2.50% 1,309,872 3,081,310
2014 Building Authority Refunding Bonds - Limited Tax 2.00-3.00% 6,765,000 3,465,000
2017 Building Authority Refunding - Limited Tax 3.31-4.08% 10,805,000 10,805,000
2019 General Obligation Refunding - Limited Tax 2.00-4.00% 7,681,301 7,681,301
$ 228,720,808 $ 115,616,143
Advance Refundings
In September 2018, the City issued $6,210,000 of General Obligation Limited Tax Refunding Bonds to
advance refund $6,435,000 of the 2007 Building Authority Refunding Bonds. The proceeds of the bonds were
used to purchase U.S. government securities that were placed in an escrow fund for the purpose of
generating resources for all future debt service payments on the refunded debt. The 2007 bonds were all
callable during the fiscal year ended June 30, 2019, so no defeasance of prior debt resulted from this
transaction. The refunding resulted in a cash gain of$491,430 and an economic gain of$425,017.
In April 2019, the City issued $14,620,000 of General Obligation Limited Tax Refunding Bonds to advance
refund $15,750,000 (of which $7,475,000 was allocated to governmental activities and $8,275,000 to the
Sewage Disposal System enterprise fund) of the Authority's 2009 Capital Improvement Bonds. The proceeds
of the bonds were used to purchase U.S. government securities that were placed in an escrow fund for the
purpose of generating resources for all future debt service payments on the refunded debt. The 2009 bonds
were all callable during the fiscal year ended June 30, 2019, so no defeasance of prior debt resulted from
this transaction. The refunding resulted in a cash gain of$2,470,450 and an economic gain of$2,015,106.
In-substance Defeasance. During the year ended June 30, 2019, the City sold one of its parking structures.
The construction of this structure was initially financed by bonds issued by the City. The proceeds from this
sale were used to defease the remaining principal of the Authority's 2012 and 2018 Building Authority
Refunding Bonds in the amounts of $4,775,000 and $5,750,000, respectively. The proceeds of the sale were
used to purchase U.S. government securities that were placed in an escrow fund for the purpose of
generating resources for all future debt service payments on the refunded debt. As a result, the bonds are
considered defeased and the liability has been removed from the statement of net position. The defeased
bonds mature on May 1, 2020 through 2027. Accordingly, $10,525,000 of defeased debt remains outstanding
at year-end related to this transaction.
Prior Year Defeased Debt
As of June 30, 2019, defeased bonds related to the prior year refunding of the 2005 Building Authority
Refunding Bonds were still outstanding in the amount of $3,745,000. The defeased bonds are scheduled to
be paid by the escrow agent in installments on June 1 of years 2020 through 2022.
As of June 30, 2019, defeased bonds related to the prior year refunding of the 2009 Building Authority
Capital Appreciation Bonds were still outstanding in the amount of $1,949,200. The defeased bonds are
scheduled to be paid by the escrow agent in installments on June 1 of years 2021 through 2024.
90
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
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
2013 Sewer Revenue and Refunding Bond 2.40% $ 21,765,000 $ 14,075,000
Pledged Revenues. The City has pledged future sewer customer revenues, net of specified operating
expenses, to repay $21,765,000 in sewer revenue and refunding bonds issued in 2013. Proceeds from the
bonds provided financing for the construction for various sewer infrastructure projects. The bonds are
payable solely from sewer customer net revenues and are payable through 2028. Annual principal and
interest payments on the bonds are expected to require less than 14% of net revenues. The total principal
and interest paid for the current year and total customer net revenues were $2,240,688 and $18,108,760
respectively.
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:
2014 Lease Purchase Agreement - Recycling Trucks 1.96% $ 1,550,855 $ 520,243
2015 Ballpark Improvements Installment Purchase 3.00% 13,500,000 10,753,777
$ 15,050,855 $ 11,274,020
Business-type activities:
2014 Lease Purchase Agreement - Recycling Carts 1.96% $ 1,737,000 $ 582,920
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:
HUD Section 108 Loan 1.52% $ 5,900,000 $ 5,900,000
2014 SIB Loan 3.00% 1,828,428 1,342,002
$ 7,728,428 $ 7,242,002
91
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Changes in Long-term Debt. Long-term liability activity for the year ended June 30, 2019, was as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental activities
General obligation bonds $ 15,330,000 $ 8,603,699 $ 9,770,000 $ 14,163,699 $ 2,371,468
Notes from direct borrowings
and direct placements:
Installment purchase
agreements 12,289,396 1,015,376 11,274,020 1,043,947
Loans payable 7,476,545 - 234,543 7,242,002 241,580
35,095,941 8,603,699 11,019,919 32,679,721 3,656,995
Deferred amounts:
For issuance discounts (59,321) - (6,833) (52,488) -
For issuance premiums 55,139 780,670 21,600 814,209 -
Compensated absences 9,957,856 1,287,949 1,277,057 9,968,748 1,277,057
Accrued workers
compensation 2,292,221 978,209 959,448 2,310,982 548,329
$ 47,341,836 $ 11,650,527 $ 13,271,191 $ 45,721,172 $ 5,482,381
Business-type activities
General obligation bonds $ 137,182,606 $ 15,995,317 $ 37,561,780 $ 115,616,143 $ 11,623,482
Revenue bonds 15,625,000 - 1,550,000 14,075,000 1,550,000
Notes from direct borrowings
and direct placements:
Installment purchase
agreements 808,500 - 225,580 582,920 230,023
153,616,106 15,995,317 39,337,360 130,274,063 13,403,505
Deferred amounts:
For issuance discounts (490,338) - (149,523) (340,815) -
For issuance premiums 1,879,538 1,120,439 561,396 2,438,581 -
Compensated absences 871,120 61,937 77,914 855,143 77,914
$ 155,876,426 $ 17,177,693 $ 39,827,147 $ 133,226,972 $ 13,481,419
92
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
For the governmental activities, compensated absences and other long-term debt are generally liquidated
by the General Fund.
Debt service requirements to maturity for the general obligation and revenue bonds of the City are as
follows:
Year Governmental Activities Business-type Activities
Ending
June 30, Principal Interest Total Principal Interest Total
2020 $ 2,371,468 $ 538,524 $ 2,909,992 $ 13,173,482 $ 3,510,701 $ 16,684,183
2021 2,475,452 467,133 2,942,585 12,934,227 4,083,141 17,017,368
2022 2,232,063 389,186 2,621,249 12,444,891 3,797,527 16,242,418
2023 716,302 324,172 1,040,474 10,724,778 3,553,267 14,278,045
2024 747,659 290,503 1,038,162 10,634,125 2,961,420 13,595,545
2025-2029 4,206,365 879,681 5,086,046 41,756,193 7,627,041 49,383,234
2030-2034 1,414,390 138,202 1,552,592 15,639,667 3,965,334 19,605,001
2035-2039 - - - 11,183,780 1,547,701 12,731,481
2040-2041 - - - 1,200,000 24,450 1,224,450
$ 14,163,699 $ 3,027,401 $ 17,191,100 $ 129,691,143 $ 31,070,582 $ 160,761,725
Debt service requirements to maturity for the notes from direct borrowings and direct placements of the
City are as follows:
Year Governmental Activities Business-type Activities
Ending
June 30, Principal Interest Total Principal Interest Total
2020 $ 1,285,527 $ 545,467 $ 1,830,994 $ 230,023 $ 10,304 $ 240,327
2021 1,707,075 505,109 2,212,184 234,554 5,773 240,327
2022 1,642,029 459,450 2,101,479 118,343 1,743 120,086
2023 1,581,002 413,819 1,994,821 - - -
2024 1,626,724 367,543 1,994,267
2025-2029 7,474,117 1,150,879 8,624,996
2030-2034 3,199,548 175,545 3,375,093 - - -
$ 18,516,022 $ 3,617,812 $ 22,133,834 $ 582,920 $ 17,820 $ 600,740
93
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
10. 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:
Nonmajor
General Governmental
Fund Funds Totals
Nonspendable
Inventories $ 29,575 $ 1,030,305 $ 1,059,880
Prepaids 9,030 7,556 16,586
Corpus of permanent fund - 1,914,166 1,914,166
38,605 2,952,027 2,990,632
Restricted
Major and local streets - 14,840,386 14,840,386
Drug law and narcotics
enforcement 1,583,641 1,583,641
Downtown Lansing 47,238 47,238
Debt service 30,111 30,111
Building department 531,033 531,033
Capital improvements (unexpended
bond proceeds) 6,368 6,368
17,038,777 17,038,777
Committed
City parks 484,669 484,669
Capital improvements 8,663,319 8,663,319
- 9,147,988 9,147,988
Unassigned (deficit) 9,992,885 (115,546) 9,877,339
Total fund balances -
governmental funds $ 10,031,490 $ 29,023,246 $ 39,054,736
94
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
11. NET INVESTMENT IN CAPITAL ASSETS
The composition of net investment in capital assets as of June 30, 2019, was as follows:
Governmental Business-type Component
Activities Activities Units
Capital assets:
Capital assets not being depreciated $ 25,302,787 $ 26,015,193 $
Capital assets being depreciated, net 153,965,052 312,435,570 23,352
Total capital assets 179,267,839 338,450,763 23,352
Related debt:
General obligation bonds 14,163,699 115,616,143 -
Revenue bonds - 14,075,000
Installment purchase agreements 11,274,020 582,920
Loans payable 7,242,002 -
Unamortized bond discounts (52,488) (340,815)
Unamortized bond premiums 814,209 2,438,581
Deferred charge on bond refunding (320,544) (4,352,459)
Amounts under leases receivable - (23,556,870)
Unexpended bond proceeds (6,368) -
Totalrelated debt 33,114,530 104,462,500 -
Net investment in capital assets $ 146,153,309 $ 233,988,263 $ 23,352
12. 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.
13. RISK MANAGEMENT
The City of Lansing, Michigan 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.
95
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
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,
2019 2018
Estimated liability, beginning of year $ 900,000 $ 885,000
Estimated claims incurred,
including changes in estimates 9,849,331 9,664,043
Claim payments (9,999,331) (9,649,043)
Estimated liability, end of year $ 750,000 $ 900,000
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,
2019 2018
Estimated liability, beginning of year $ 2,292,221 $ 2,417,780
Estimated claims incurred,
including changes in estimates 978,209 1,031,123
Claim payments (959,448) (1,156,682)
Estimated liability, end of year $ 2,310,982 $ 2,292,221
14. PROPERTY TAXES
Property taxes attach as an enforceable lien on property as of the date they are levied. City, community
college, and 50% of school taxes are levied and due July 1 and become delinquent after August 31. County
taxes and the balance of school taxes are levied and due December 1 and become delinquent after February
14. In March, taxes on real property still delinquent are purchased by the County's tax revolving funds.
Collections of community college, school, and county taxes and remittances are accounted for in the
general fund. City property tax revenues are recognized in the fiscal year for which the taxes are levied to
the extent that they result in current receivables (i.e., are collected within 60 days after fiscal year-end).
The City is permitted by charter and state law to levy taxes up to $20.00 per $1,000 of assessed valuation
for general operations other than the payment of principal and interest on long-term debt. The tax rate to
finance general governmental services other than the payment of principal and interest on long-term debt
for the year ended June 30, 2019 was $19.44 per $1,000 of taxable value.
96
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
15. CONTINGENT LIABILITIES
Federal Grant Programs. Amounts received or receivable from grantor agencies are subject to audit and
potential adjustment by grantor agencies, principally the federal government. Any disallowed claims,
including amounts already collected, may constitute a liability of the applicable funds. The amount, if any,
of expenditures which may be disallowed by the grantor cannot be determined at this time although the
government expects such amounts, if any, to be immaterial.
Risk Management. The government is a defendant in various lawsuits. Although the outcome of these
lawsuits is not presently determinable, it is the opinion of the government's counsel that resolution of these
matters will not have a material adverse effect on the financial condition of the government.
16. PENSION PLANS
Employees'Retirement System
Plan Description. The City sponsors and administers the Employees' Retirement System (the "Plan"), a
single-employer, defined benefit pension plan that covers general full-time employees of the City of
Lansing, Michigan and employees of the 54-A District Court. It does not include elected officials, who are
members of the Employees' Money Purchase Pension Plan, nor does it include police officers and
firefighters, who are members of a separate City defined benefit pension plan. The Plan was established
and may be amended by the City Council and is administered by a nine member Board of Trustees. The
Board is comprised of the Mayor of the City, one member of the City Council appointed by the City Council,
the City Treasurer, the City Human Resources Director, three members of the retirement system to be
elected by the members of the system under rules adopted by the board, two residents of the State of
Michigan appointed by the Mayor, by and with the consent of the City Council, one of which is a retiree of
the retirement system. It is accounted for as a separate pension trust fund. Separate financial statements
are not issued for the Plan.
All members may retire at age 50 with 25 or more years of credited service, or age 58 with 8 or more years
of credited service. Members are vested after completing 8 years of credited service. Retirement options
that provide for survivor benefits are available to members. The plan also provides death and disability
benefits. If a member leaves employment or dies before vesting, accumulated member contributions plus
interest are refunded to the member or designated beneficiary. Members who are vested and terminate
their employment prior to retirement will receive their benefit as a life annuity beginning at age 58.
Summary of Significant Accounting Policies. The financial statements of the Plan are prepared using the
accrual basis of accounting. Plan member contributions are recognized in the period which the contributions
are due. The City's contributions are recognized when due and a formal commitment to provide the
contribution has been made. Benefits and refunds are recognized when due and payable in accordance with
the terms of the Plan. Administration of the Plan is funded through the Plan's investment earnings.
Method Used to Value Investments. Plan investments are reported at fair value. Short-term investments are
reported at cost, which approximates fair value. Securities traded on a national or international exchange
are valued at the last reported sales price at current exchange rates. Investments for which market
quotations are not readily available are valued at their fair values as determined by the custodian under the
direction of the Plan Board of Trustees, with the assistance of a valuation service.
97
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Plan Membership. At December 31, 2018, plan membership consisted of the following:
Retirees and beneficiaries currently receiving benefits 916
Terminated employees entitled to but not yet receiving benefits 133
Vested and non-vested active participants 405
Total membership 1,454
Benefits Provided. Employees who retire with minimum age and years of service requirements are entitled
to annual retirement benefits, payable in monthly installments for life, in an amount equal to a percentage
of their final average compensation times years of credited service. Final average compensation is defined
as the average of the highest annual compensation paid over 2 consecutive years of credited service within
the last 10 years of credited service immediately preceding a member's termination of employment. The
benefit payments are calculated using the following rates for the various groups of general employees:
Bargaining Unit/Employee Multiplier
Group Percentage
United Auto Workers (UAW):
Hired after January 9, 2017 1.50%
Hired after October 18, 2013 1.70%
All others 2.75%
Teamsters Local 214:
Hired after September 2012 1.25%
All others 1.80%
Teamsters Local 580:
Hired after May 19, 2014 1.25%
All others 1.80%
Non-bargaining and all others
Hired after April 1, 2014 1.25%
All others 1.60%
District court exempt
Hired after June 1, 2014 1.25%
All others 1.60%
Contributions. The contribution requirements of Plan members are established and may be amended by the
City Council in accordance with City policies, union contracts, and Plan provisions. Employees are required
to make contributions to the Plan in rates from 3.00 to 6.50% depending on bargaining unit and hire date.
The City is required to contribute at actuarially determined rates expressed as a percentage of covered
payroll. The City's contribution rate for the plan for the year ended June 30, 2019 was 46.8% of projected
valuation payroll.
98
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Bargaining Unit/Employee Contribution
Group Percentage
United Auto Workers (UAW) 3.00%
Teamsters Local 214:
Hired after September 2012 5.00%
All others 6.50%
Teamsters Local 580:
Hired after May 9, 2014 5.00%
All others 6.35%
District court Teamsters:
Hired after April 2014 5.00%
All others 5.50%
District court exempt 5.50%
All others 6.50%
Investment Policy. The plan's policy in regard to the allocation of invested assets is established and may be
amended by the Board of Trustees. The investment policy has been formulated based on consideration of a
wide range of policies and describes the prudent investment process that the Board deems appropriate. The
Plan's asset allocation policy is shown on the following pages.
Rate of Return. For the year ended June 30, 2019, the annual money-weighted rate of return on pension
plan investments, net of pension plan investment expense, was 5.17%. The money-weighted rate of return
expresses investment performance, net of investment expense, adjusted for the changing amounts actually
invested.
Concentrations. At June 30, 2019, the Plan held certain investments (other than those issued or explicitly
guaranteed by the U.S. government, mutual funds, external investment pools, or other pooled investments)
in certain organizations that represent 5% or more of the Plan's fiduciary net position. Please see Footnote
4 for the details of these concentrations.
Reserves. In accordance with the Plan policy, the City establishes reserves for various purposes. The
reserves are adjusted annually based on recommendations from the City's actuaries. The policy for creating
and adjusting reserves was established and can be amended by the Plan Board of Trustees. A summary of
the Plan reserves at June 30, 2019 is as follows:
Reserve/Group Balance
Employee savings fund $ 12,745,315
Retirement reserve fund 132,084,679
Pension accumulation fund 5,628,058
Members benefit fund 15,127,517
Health insurance fund 32,946,254
99
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Net Pension Liability. The components of the net pension liability for the employees' retirement system at
June 30, 2019 were as follows:
Total pension liability $ 303,730,647
Plan fiduciary net position 165,585,569
Net pension liability $ 138,145,078
Plan fiduciary net position as
percentage of total pension
liability 54.5%
Actuarial Assumptions. The total pension liability was determined by an actuarial valuation as of December
31, 2018, rolled forward to June 30, 2019, using the following actuarial assumptions, applied to all periods
included in the measurement:
Inflation 2.75%
Salary increases 2.75%, plus service based increases
Investment rate of return 7.25%, net of investment expense and including
inflation
Mortality is based on the RP-2000 tables for males and females. For Disabled members, the disabled
versions of these tables are used. Each of these tables is projected to 2026 using Scale BB and a 50% factor
is applied for pre-retirement deaths.
The actuarial assumptions used in the December 31, 2018 valuation were based on the results of actuarial
experience analysis conducted in December 2016.
Changes in Actuarial Assumptions. There were no changes in actuarial assumptions during fiscal year 2019.
100
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which best-estimates of expected future real rates of return (expected returns, net of pension
plan investment expense and inflation) are developed for each asset class. These ranges are combined to
produce the long-term expected rate of return by weighting the expected future real rates of return by the
target asset allocation percentage and by adding expected inflation. This is then modified through a Monte-
Carlo simulation process, by which a (downward) risk adjustment is applied to the baseline expected
return. Best estimates of arithmetic real rates of return for each major asset class included in the pension
plan's target asset allocation as of June 30, 2019, and the final investment return assumption, are
summarized in the following table:
Long-term Money-
Target Expected Real Weighted Rate
Asset Class Allocation Rate of Return of Return
Domestic equity 27.00% 5.75% 1.53%
International equity - developed 12.00% 5.85% 0.70%
International equity - emerging 4.00% 6.25% 0.25%
Fixed income 25.00% 2.65% 0.66%
Real estate 10.00% 4.75% 0.48%
Global opportunistic fixed income 6.00% 4.10% 0.25%
Global equity long/short 10.00% 4.50% 0.45%
Absolute return 6.00% 4.25% 0.27%
100.00% 4.59%
Inflation 2.75%
Risk adjustments -0.09%
Investment rate of return 7.25%
Discount Rate. The discount rate used to measure the total pension liability was 7.25%. The projection of
cash flows used to determine the discount rate assumed that plan member contributions will be made at
the current contribution rate and that City contributions will be made at rates equal to the difference
between actuarially determined contribution rates and the member rate. Based on those assumptions, each
plan's fiduciary net position was projected to be available to make all projected future benefit payments of
current plan members. Therefore, the long-term expected rates of return on pension plan investments was
applied to all periods of projected benefit payments to determine the total pension liability.
101
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Changes in the Net Pension Liability. The components of the change in the net pension liability are
summarized as follows:
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
(a) (b) (a) - (b)
Balances at June 30, 2018 $ 305,528,755 $ 168,558,816 $ 136,969,939
Changes for the year:
Service cost 2,719,559 - 2,719,559
Interest 21,512,099 21,512,099
Differences between expected and
actual experience (2,559,726) (2,559,726)
Employer contributions 10,880,932 (10,880,932)
Employee contributions 1,220,657 (1,220,657)
Net investment income 8,437,568 (8,437,568)
Benefit payments, including refunds of
employee contributions (23,470,040) (23,470,040) -
Administrative expense (42,364) 42,364
Net changes (1,798,108) (2,973,247) 1,175,139
Balances at June 30, 2019 $ 303,730,647 $ 165,585,569 $ 138,145,078
Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The following presents the net
pension liability of the City, calculated using the discount rate of 7.25%, as well as what the City's net
pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower
(6.25%) or 1-percentage-point higher (8.25%) than the current rate:
One Percent Current One Percent
Decrease Discount Rate Increase
(6.25%) (7.25%) (8.25%)
Net pension liability $ 164,697,183 $ 138,145,078 $ 115,359,996
102
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to
Pensions. For the year ended June 30, 2019, the City recognized pension expense of $13,770,789. At June
30, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
Net Deferred
Deferred Deferred Outflows
Outflows of Inflows of (Inflows) of
Resources Resources Resources
Difference between expected and actual experience $ - $ 1,706,484 $ (1,706,484)
Net difference between projected and actual earnings
on pension plan investments 5,050,290 - 5,050,290
Total $ 5,050,290 $ 1,706,484 $ 3,343,806
Amounts reported as deferred outflows of resources and deferred inflows of resources related to pension
will be recognized in pension expense as follows:
Year Ended
June 30, Amount
2020 $ 2,365,018
2021 (838,377)
2022 1,136,209
2023 680,956
Total $ 3,343,806
Payable to the Pension Plan. At June 30, 2019, the City did not have any outstanding amount of
contributions to the pension plan required for the year ended June 30, 2019.
Poiice and Fire Retirement System
Plan Description. The City sponsors and administers the Police and Fire Retirement System (the "Plan"), a
single-employer, defined benefit pension plan that covers all police officers and fire fighters who are full-
time employees of the City. The Plan was established and may be amended by the City Council and is
administered by an eight member Board of Trustees. The Board is comprised of the Mayor of the City, one
member of the City Council appointed by the City Council, the City Treasurer, a resident of the City who
shall be appointed by the Mayor, by and with the consent of Council, two members each of the police and
fire departments, to be elected by all the members of their respective departments. It is accounted for as
a separate pension trust fund. Separate financial statements are not issued for the Plan.
103
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Members may retire at age 55, or at any age with 25 or more years of credited service. Members are vested
after completing 10 years of credited service. Members are required to retire at age 60 (Police) or 70
(Fire). When an employee who had retired subsequent to August 31, 1966, dies, the plan provides for an
automatic pension to the retiree's spouse. This automatic pension is equal to 50% of the regular retirement
benefit the employee had been receiving at time of death. Effective July 30, 1990, members may elect a
reduced benefit, either 93% or 86% of the regular benefit, thereby increasing the spouse pension to 75% or
86% of the regular benefit, respectively. Alternately, members may elect a non-spousal beneficiary option.
The plan provides death and disability benefits. If a member leaves employment or dies before vesting,
accumulated member contributions plus interest are refunded to the member or designated beneficiary.
Members who are vested and terminate their employment have the option of deferred retirement benefits
until age 55 or withdrawing their contribution, thereby forfeiting any future benefits.
Summary of Significant Accounting Policies. The financial statements of the Plan are prepared using the
accrual basis of accounting. Plan member contributions are recognized in the period which the contributions
are due. The City's contributions are recognized when due and a formal commitment to provide the
contribution has been made. Benefits and refunds are recognized when due and payable in accordance with
the terms of the Plan. Administration of the Plan is funded through the Plan's investment earnings.
Method Used to Value Investments. Plan investments are reported at fair value. Short-term investments are
reported at cost, which approximates fair value. Securities traded on a national or international exchange
are valued at the last reported sales price at current exchange rates. Investments for which market
quotations are not readily available are valued at their fair values as determined by the custodian under the
direction of the Plan Board of Trustees, with the assistance of a valuation service.
Plan Membership. At December 31, 2018, plan membership consisted of the following:
Retirees and beneficiaries currently receiving benefits 750
Terminated employees entitled to but not yet receiving benefits 49
Vested and non-vested active participants 372
Total membership 1,171
Benefits Provided. Annual retirement allowances are determined by multiplying final average compensation
by 3.2% for the first 25 years of credited service. The maximum allowance is 80% of final average
compensation. Final average compensation is the member's highest wages for 2 consecutive years.
Contributions. The contribution requirements of Plan members are established and may be amended by the
City Council in accordance with City policies, union contracts, and Plan provisions. Fire members are
required to contribute 10.0% of their annual wages to the plan, fire members hired after May 19, 2014 are
required to contribute 7.00%. Police supervisors are required to contribute 9.52%, police non-supervisors
are required to contribute 9.0%, and police non supervisors hired after August 1, 2014 are required to
contribute 7.00%. Chapter 294 of the City of Lansing's Ordinance establishes benefit provisions and requires
that the portion of the annuity and pension reserves (which are determined annually by the City's actuary)
not financed by member contributions shall be financed by annual appropriations. The City's contribution
rate for the plan for the year ended June 30, 2019 was 45.7% of projected valuation payroll.
104
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Investment Policy. The plan's policy in regard to the allocation of invested assets is established and may be
amended by the Board of Trustees. The investment policy has been formulated based on consideration of a
wide range of policies and describes the prudent investment process that the Board deems appropriate. The
Plan's asset allocation policy is shown on the following pages.
Rate of Return. For the year ended June 30, 2019, the annual money-weighted rate of return on pension
plan investments, net of pension plan investment expense, was 6.30%. The money-weighted rate of return
expresses investment performance, net of investment expense, adjusted for the changing amounts actually
invested.
Concentrations. At June 30, 2019, the Plan held certain investments (other than those issued or explicitly
guaranteed by the U.S. government, mutual funds, external investment pools, or other pooled investments)
in certain organizations that represent 5% or more of the Plan's fiduciary net position. Please see Footnote
4 for the details of these concentrations.
Reserves. In accordance with the Plan policy, the City establishes reserves for various purposes. The
reserves are adjusted annually based on recommendations from the City's actuaries. The policy for creating
and adjusting reserves was established and can be amended by the Plan Board of Trustees. A summary of
the Plan reserves at June 30, 2019 is as follows:
Reserve/Group Balance
Retirement reserve fund $ 294,201,491
Health insurance fund 39,200,746
Net Pension Liability. The components of the net pension liability for the police and fire retirement system
at June 30, 2019, were as follows:
Total pension liability $ 461,355,972
Plan fiduciary net position 294,201,491
Net pension liability $ 167,154,481
Plan fiduciary net position as
percentage of total pension
liability 63.8%
Actuarial Assumptions. The total pension liability was determined by an actuarial valuation as of December
31, 2018, rolled forward to June 30, 2019, using the following actuarial assumptions, applied to all periods
included in the measurement:
Inflation 2.75%
Salary increases 2.75%, plus service-based increases
Investment rate of return 7.25%, net of investment expense and including
inflation
105
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Mortality is based on the RP-2000 tables (with Blue Collar adjustments for Police and Fire) for males and
females. For Disabled members, the disabled versions of these tables are used. Each of these tables is
projected to 2026 using Scale BB and a 50%factor is applied for pre-retirement deaths.
The actuarial assumptions used in the December 31, 2018 valuation were based on the results of actuarial
experience analysis conducted in December 2016.
Changes in Actuarial Assumptions. There were no changes in actuarial assumptions during fiscal year 2019.
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which best-estimates of expected future real rates of return (expected returns, net of pension
plan investment expense and inflation) are developed for each asset class. These ranges are combined to
produce the long-term expected rate of return by weighting the expected future real rates of return by the
target asset allocation percentage and by adding expected inflation. This is then modified through a Monte-
Carlo simulation process, by which a (downward) risk adjustment is applied to the baseline expected
return. Best estimates of arithmetic real rates of return for each major asset class included in the pension
plan's target asset allocation as of June 30, 2019, and the final investment return assumption, are
summarized in the following table:
Long-term Money-
Target Expected Real Weighted Rate
Asset Class Allocation Rate of Return of Return
Domestic equity 32.00% 5.80% 1.85%
International equity - developed 12.00% 6.10% 0.73%
International equity - emerging 4.00% 7.25% 0.29%
Fixed income 22.00% 2.25% 0.50%
Real estate 10.00% 4.80% 0.48%
Global opportunistic fixed income 5.00% 3.25% 0.16%
Global equity long/short 10.00% 5.00% 0.50%
Absolute return 5.00% 4.50% 0.24%
100.00% 4.75%
Inflation 2.75%
Risk adjustments -0.25%
Investment rate of return 7.25%
Discount Rate. The discount rate used to measure the total pension liability was 7.25%. The projection of
cash flows used to determine the discount rate assumed that plan member contributions will be made at
the current contribution rate and that City contributions will be made at rates equal to the difference
between actuarially determined contribution rates and the member rate. Based on those assumptions, each
plan's fiduciary net position was projected to be available to make all projected future benefit payments of
current plan members. Therefore, the long-term expected rates of return on pension plan investments was
applied to all periods of projected benefit payments to determine the total pension liability.
106
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Changes in the Net Pension Liability. The components of the change in the net pension liability are
summarized as follows:
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
(a) (b) (a) - (b)
Balances at June 30, 2018 $ 444,999,992 $ 291,879,983 $ 153,120,009
Changes for the year:
Service cost 6,801,669 - 6,801,669
Interest 31,573,535 31,573,535
Differences between expected and
actual experience 10,590,030 - 10,590,030
Employer contributions - 13,554,239 (13,554,239)
Employee contributions 3,485,891 (3,485,891)
Net investment income 17,943,950 (17,943,950)
Benefit payments, including refunds of
employee contributions (32,609,254) (32,609,254) -
Administrative expense - (53,318) 53,318
Net changes 16,355,980 2,321,508 14,034,472
Balances at June 30, 2019 $ 461,355,972 $ 294,201,491 $ 167,154,481
Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The following presents the net
pension liability of the City, calculated using the discount rate of 7.25%, as well as what the City's net
pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower
(6.25%) or 1-percentage-point higher (8.25%) than the current rate:
One Percent Current One Percent
Decrease Discount Rate Increase
(6.25%) (7.25%) (8.25%)
Net pension liability $ 213,013,207 $ 167,154,481 $ 124,427,822
107
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to
Pensions. For the year ended June 30, 2019, the City recognized pension expense of $30,059,557. At June
30, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
Net Deferred
Deferred Deferred Outflows
Outflows of Inflows of (Inflows) of
Resources Resources Resources
Difference between expected and actual experience $ 12,074,334 $ 4,827,030 $ 7,247,304
Changes in assumptions 7,093,170 - 7,093,170
Net difference between projected and actual earnings
on pension plan investments 2,985,001 - 2,985,001
Total $ 22,152,505 $ 4,827,030 $ 17,325,475
Amounts reported as deferred outflows of resources and deferred inflows of resources related to pension
will be recognized in pension expense as follows:
Year Ended
June 30, Amount
2020 $ 10,277,161
2021 3,238,585
2022 3,270,565
2023 539,164
Total $ 17,325,475
Payable to the Pension Plan. At June 30, 2019, the City did not have any outstanding amount of
contributions to the pension plan required for the year ended June 30, 2019.
For governmental activities, pension liabilities are expected to be liquidated by the general fund.
Summary Pension Information
The table below summarizes the net pension liability and related deferrals for the Employees' Retirement
System and the Police and Fire Retirement System as presented in the Statement of Net Position.
Employees' Police Et Fire
Retirement Retirement
System System Total
Net pension liability $ 138,145,078 $ 167,154,481 $ 305,299,559
Deferred outflows - pension 5,050,290 22,152,505 27,202,795
Deferred inflows - pension 1,706,484 4,827,030 6,533,514
108
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Employees'Money Purchase Pension Plan
Newly hired employees are eligible to participate in the City's defined contribution plan. Eligible employees
include those normally scheduled to work at least 1,000 hours during a plan year. To receive benefits under
the plan, the participant must have met the age and service requirements outline in his or her applicable
bargaining unit agreement. Distributions are calculated based on the employee's vesting percentage and the
individual's allocation of investment funds. In accordance with the Plan agreement, the City contributes 4%
of employees' base pay to the plan. The defined contribution plan is administered by the Board of Trustees
as designed in the City of Lansing Defined Contribution Plan which stipulates that the trustees have such
authority. All amendments to the plan, including funding requirements, must be approved by the City
Council subject to the terms of collective bargaining agreements. City contributions for the year ended
June 30, 2019 were $172,888 for plan members. Employee contributions for the year ended June 30, 2019
were $162,606. All amendments to the Plan, including funding requirements, must be approved by the City
Council. The assets of the plan are held in trust for the exclusive benefit of participants and their
beneficiaries.
109
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 Healthcare
Pension OPEB System System OPEB Pension Plan VEBA Totals
Assets
Cash and cash equivalents $ 5,299,765 $ 1,054,484 $ 3,217,822 $ 428,757 $ $ $ 10,000,828
Equity in pooled cash and
investments (215,276) (42,833) 4,112,795 548,008 4,402,694
Investments:
U.S. treasuries 7,221,121 1,436,773 9,480,693 1,263,251 19,401,838
U.S. agencies 12,477,237 2,482,573 15,768,919 2,101,123 32,829,852
Collateralized mortgage
obligations 156,256 31,090 655,980 87,406 930,732
Mutualfunds 104,086,669 20,709,931 183,127,827 24,400,784 2,952,671 28,939,072 364,216,954
Domestic equities 31,232,828 6,214,338 64,765,263 8,629,619 - - 110,842,048
International equities 566,753 112,766 1,125,618 149,982 - 1,955,119
Emerging market equities 2,986,450 594,209 6,426,688 856,321 829,188 11,692,856
Money market funds 1,756,470 349,482 5,531,597 737,055 767,002 9,141,606
Dividends and interest receivable 163,558 32,543 219,781 29,285 - 528 445,695
Total assets 165,731,831 32,975,356 294,432,983 39,231,591 2,952,671 30,535,790 565,860,222
Liabilities
Accounts payable 146,262 29,102 231,492 30,845 - - 437,701
Net position restricted for
Pension benefits 165,585,569 - 294,201,491 - 2,952,671 - 462,739,731
Other postemployment benefits - 32,946,254 - 39,200,746 - 30,535,790 102,682,790
Total net position $ 165,585,569 $ 32,946,254 $ 294,201,491 $ 39,200,746 $ 2,952,671 $ 30,535,790 $ 565,422,521
110
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 Healthcare
Pension OPEB System System OPEB Pension Plan VEBA Totals
Additions
Investment income:
Net appreciation in fair value
of investments $ 8,996,245 $ 1,172,732 $ 18,211,768 $ 290,543 $ - $ 1,867,951 $ 30,539,239
Interest income 16,265 - 12,440 - 29,384 - 58,089
Dividend income 190,000 708,000 - 898,000
Investment expenses (764,942) - (988,258) - - (1,753,200)
Net investment income 8,437,568 1,172,732 17,943,950 290,543 29,384 1,867,951 29,742,128
Contributions:
Employer 10,880,932 11,228,485 13,554,239 13,500,687 172,888 620,000 49,957,231
Plan members 1,220,657 - 3,485,891 - 162,606 - 4,869,154
Total contributions 12,101,589 11,228,485 17,040,130 13,500,687 335,494 620,000 54,826,385
Total additions 20,539,157 12,401,217 34,984,080 13,791,230 364,878 2,487,951 84,568,513
Deductions
Participant benefits 23,470,040 10,573,488 32,609,254 12,271,014 - - 78,923,796
Administrative expense 42,364 464,997 53,318 627,673 83,942 1,272,294
Total deductions 23,512,404 11,038,485 32,662,572 12,898,687 - 83,942 80,196,090
Change in net position (2,973,247) 1,362,732 2,321,508 892,543 364,878 2,404,009 4,372,423
Net position restricted
for pension and other
postemployment benefits:
Beginning of year 168,558,816 31,583,522 291,879,983 38,308,203 2,587,793 28,131,781 561,050,098
End of year $165,585,569 $ 32,946,254 $294,201,491 $ 39,200,746 $ 2,952,671 $ 30,535,790 $565,422,521
111
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
17. 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 their respective pension plans, with the exception of Teamster 580 employees hired after May 2014.
OPEB plan provisions are established and may be amended by the City Council, subject to the City's
various collective bargaining agreements. Separate financial statements are not prepared for the plans.
Method Used to Value Investments. Plan investments are reported at fair value. Securities traded on a
national or international exchange are valued at the last reported sales price at current exchange rates.
Investments for which market quotations are not readily available are valued at their fair values as
determined by the custodian under the direction of each plans' board of trustees, with the assistance of a
valuation service.
Voluntary Employees Beneficiary Association(VEBA)
The City of Lansing Voluntary Employees Beneficiary Association (the "Plan") is a single-employer defined
benefit postemployment healthcare plan established by the City to provide medical and healthcare
benefits for retirees and their beneficiaries. Eligible participants include any retirees who receive pension
benefits under one of the City's pension plans. The Plan is funded by a trust agreement established
pursuant to Section 501(c)(9) of the Internal Revenue Code that allows for the formation of a VEBA. During
the year, the City contributed $620,000 to the Plan. It is accounted for as a separate OPEB trust fund.
Employees'Retirement System
Plan Description. The City provides postemployment health care benefits, in accordance with labor
agreements, to full-time employees of the City and employees of the 54-A District Court (not including
police officers and firefighters who are members of the Police and Fire Retirement System). Members
eligible for pension benefits under the Employees' Retirement System are also eligible to receive health
care benefits, with the exception of Teamster 580 employees hired after May, 2014. The Plan was
established and may be amended by the City Council and is administered by a nine member Board of
Trustees. The Board is comprised of the Mayor of the City, one member of the City Council appointed by
the City Council, the City Treasurer, the City Human Resources Director, three members of the retirement
system to be elected by the members of the system under rules adopted by the board, two residents of the
State of Michigan appointed by the Mayor, by and with the consent of the City Council, one of which is a
retiree of the retirement system. It is accounted for as a separate OPEB trust fund.
112
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Membership of the Plan consisted of the following at January 1, 2018, the date of the most recent
actuarial valuation:
Retirees and beneficiaries receiving benefits 848
Terminated plan members entitled to but
not yet receiving benefits 77
Active plan members 404
Total 1,329
Benefits Provided. The City provides the full cost of health benefits to retirees, payable to health care
vendors, and also reimburses retirees eligible for Medicare benefits of $134.00 per month for each covered
retiree and eligible dependent(s) eligible for retiree healthcare. The payments are charged to the fringe
benefit internal service fund of the City and are recognized as expenses as payments are made.
Contributions. The contribution requirements of the Plan members and the City are established and may
be amended by the City Council, in accordance with City policies, union contracts, and Plan provisions.
Retirees and their beneficiaries are eligible for postemployment healthcare benefits if they qualify under
the various contracts. The required contribution is based on projected pay-as-you-go financing
requirements, with an additional amount to prefund benefits as determined through the bi-annual
actuarial valuation. For the year ended June 30, 2019, the City contributed $11,848,485 (direct benefit
payments of$11,038,485 and City contributions of$810,000) to the Plan.
Rate of Return. For the year ended June 30, 2019, the annual money-weighted rate of return on
investments, net of investment expense, was 4.17%. The money-weighted rate of return expresses
investment performance, net of investment expense, adjusted for the changing amounts actually invested.
Net OPEB Liability of the City. The components of the net OPEB liability of the City at June 30, 2019,
were as follows:
Total OPEB liability $ 231,415,357
Plan fiduciary net position 63,482,044
City's net OPEB liability $ 167,933,313
Plan fiduciary net position as
percentage of total OPEB
liability 27.4%
113
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Actuarial Assumptions. The total OPEB liability was determined by an actuarial valuation as of January 1,
2018, rolled forward to June 30, 2019, using the following actuarial assumptions, applied to all periods
included in the measurement:
Inflation 2.75%
Investment rate of return 7.25%, net of OPEB plan investment expense,
including inflation
Retirement age Age-based table of rates that are specific to the
type of eligibility condition
Healthcare cost trend rate
Year Beginning
July 1, Pre-Medicare Medicare
2018 6.00% 4.50%
2019 5.50% 4.50%
2020 5.00% 4.25%
2021 4.50% 4.00%
2022+ 4.50% 4.00%
Mortality rates are assumed to be in accordance with the Retired Pensioners (RP) 2000 Combined Healthy
tables, with Blue Collar adjustments projected Scale BB, to account for anticipated future improvements
in life expectancy. Adjustments to these rates are as follows:
Pre-retirement: 50%of base rates
Post-disablement: RP2000 disabled tables with Scale BB
The actuarial assumptions used in the January 1, 2018 valuation were based on the results of an actuarial
experience study conducted in 2016.
Changes in Actuarial assumptions. There were no changes in actuarial assumptions, except the change in
discount rate.
Investment Policy. The Plan's policy in regard to the allocation of invested assets is established and may
be amended by the Board of Trustees. The investment policy has been formulated based on consideration
of a wide range of policies and describes the prudent investment process that the Board deems
appropriate. The Plan's asset allocation policy as of June 30, 2019 is summarized in the table on the
following page.
114
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
The long-term expected rate of return on OPEB plan investments was determined using a building-block
method in which best-estimates of expected future real rates of return (expected returns, net of OPEB
plan investment expense and inflation) are developed for each asset class. These ranges are combined to
produce the long-term expected rate of return by weighting the expected future real rates of return by
the target asset allocation percentage and by adding expected inflation. This is then modified through a
Monte-Carlo simulation process, by which a (downward) risk adjustment is applied to the baseline
expected return. Best estimates of arithmetic real rates of return for each major asset class included in
the OPEB plan's target asset allocation as of June 30, 2019 are summarized in the following table:
Long-term Money-
Target Expected Real Weighted Rate
Asset Class Allocation Rate of Return of Return
Domestic equity 27.00% 5.80% 1.56%
International equity - developed 12.00% 6.10% 0.73%
International equity - emerging 4.00% 7.25% 0.29%
Fixed income - U.S. 25.00% 2.25% 0.56%
Real assets 10.00% 4.80% 0.48%
Global opportunistic fixed income 6.00% 3.25% 0.20%
Global equity long/short 10.00% 5.00% 0.50%
Absolute return 6.00% 4.50% 0.27%
100.00% 4.59%
Inflation 2.75%
Risk adjustment -0.09%
Investment rate of return 7.25%
Discount Rate. The discount rate used to measure the total OPEB liability was 5.77% (down from 5.90% in
2018). The City's funding expectations/policy is to contribute a percentage of payroll each year to their
OPEB trust, in addition to paying the annual benefits directly. The City has also assumed that benefits will
begin being paid from trust assets once the funding ratio exceeds 50%. Based on this information, the City
projects that benefits will be paid from the trust from 2034 through 2068. This is done on a closed group
basis. Therefore, the expected trust return of 7.25% (between 2034 and 2068) is blended with the 20-year
Aa bond rate of 3.13% (before 2034 and after 2068).
115
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Changes in the Net OPEB Liability. The components of the change in the net OPEB liability are summarized
as follows:
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability
(a) (b) (a) - (b)
Balances at June 30, 2018 $ 223,906,447 $ 59,715,303 $ 164,191,144
Changes for the year:
Service cost 1,477,747 - 1,477,747
Interest on total OPEB liability 12,990,219 12,990,219
Changes in assumptions 3,614,432 - 3,614,432
Employer contributions - 11,848,485 (11,848,485)
Net investment income 3,040,683 (3,040,683)
Benefit payments (10,573,488) (10,573,488) -
Administrative expense - (548,939) 548,939
Net changes 7,508,910 3,766,741 3,742,169
Balances at June 30, 2019 $ 231,415,357 $ 63,482,044 $ 167,933,313
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate. The following presents the net OPEB
liability of the City, calculated using the discount rate of 5.77%, as well as what the City's net OPEB
liability would be if it were calculated using a discount rate that is 1% lower (4.77%) or 1% higher (6.77%)
than the current rate:
Current
1% Decrease Discount Rate 1% Increase
(4.77%) (5.77%) (6.77%)
City's net OPEB liability $ 197,723,334 $ 167,933,313 $ 141,540,793
Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rate Assumption. The
following presents the net OPEB liability of the City, calculated using the healthcare cost trend rate of
6.0% pre-Medicare / 4.5% Medicare, trending to an ultimate rate of 4.5% pre-Medicare / 4.0% Medicare, as
well as what the City's net OPEB liability would be if it were calculated using healthcare cost trend rates
that are 1% lower (5.0% pre-Medicare / 3.5%Medicare, trending to an ultimate rate of 3.5% pre-Medicare /
3.0% Medicare) or 1% higher (7.0% pre-Medicare / 5.5%Medicare, trending to an ultimate rate of 5.5% pre-
Medicare / 5.0%Medicare) than the current healthcare cost trend rates:
Healthcare
Ultimate Cost
1% Decrease Trend Rates 1% Increase
(3.5%/ 3.0%) (4.5%/4.0%) (5.5%/ 5.0%)
City's net OPEB liability $ 142,675,624 $ 167,933,313 $ 198,349,318
116
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB.
For the year ended June 30, 2019, the City recognized OPEB expense of $6,587,467. At June 30, 2019, the
City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the
following sources:
Net Deferred
Deferred Deferred Outflows
Outflows of Inflows of (Inflows) of
Resources Resources Resources
Net difference between projected and actual earnings
on OPEB plan investments $ 878,960 $ $ 878,960
Changes in assumptions 1,807,216 1,807,216
Total $ 2,686,176 $ $ 2,686,176
Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will
be recognized in OPEB expense as follows:
Year Ended
June 30, Amount
2020 $ 2,008,695
2021 201,479
2022 201,480
2023 274,522
Total $ 2,686,176
OPEB Plan Fiduciary Net Position. Detailed information about the OPEB plan's fiduciary net position is
available in the combining statements for the pension and other postemployment benefit trust funds
preceding this footnote.
Payable to the OPEB Plan. At June 30, 2019, the City reported had no amount payable to the OPEB plan.
Police and Fire Retirement System
Plan Description. The City also provides postemployment health care benefits, in accordance with labor
agreements, to members who are eligible to receive pension benefits under the Police and Fire Retirement
System. The Plan was established and may be amended by the City Council and is administered by an eight
member Board of Trustees. The Board is comprised of the Mayor of the City, one member of the City
Council appointed by the City Council, the City Treasurer, a resident of the City who shall be appointed by
the Mayor, by and with the consent of Council, two members each of the police and fire departments, to
be elected by all the members of their respective departments.
117
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Membership of the Plan consisted of the following at January 1, 2018, the date of the most recent
actuarial valuation:
Retirees and beneficiaries receiving benefits 652
Terminated plan members entitled to but
not yet receiving benefits 20
Active plan members 365
Total 1,037
Benefits Provided. The City provides the full cost of health benefits to retirees, payable to health care
vendors, and also reimburses retirees eligible for Medicare benefits of $121.90 per month for each covered
retiree and dependent(s). The payments are charged to the fringe benefit internal service fund of the City
and are recognized as expenses as payments are made.
Contributions. The contribution requirements of the Plan members and the City are established and may
be amended by the City Council, in accordance with City policies, union contracts, and Plan provisions.
Retirees and their beneficiaries are eligible for postemployment healthcare benefits if they qualify under
the various contracts. The required contribution is based on projected pay-as-you-go financing
requirements, with an additional amount to prefund benefits as determined through the bi-annual
actuarial valuation. For the year ended June 30, 2019, the City contributed $13,500,687 (direct benefit
payments of $12,898,687 and City contributions of$602,000) to the Plan.
Rate of Return. For the year ended June 30, 2019, the annual money-weighted rate of return on
investments, net of investment expense, was -0.88%. The money-weighted rate of return expresses
investment performance, net of investment expense, adjusted for the changing amounts actually invested.
Net OPEB Liability of the City. The components of the net OPEB liability of the City at June 30, 2019,
were as follows:
Total OPEB liability $ 302,529,360
Plan fiduciary net position 39,200,746
City's net OPEB liability $ 263,328,614
Plan fiduciary net position as
percentage of total OPEB
liability 13.0%
118
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Actuarial Assumptions. The total OPEB liability was determined by an actuarial valuation as of January 1,
2018, rolled forward to June 30, 2019, using the following actuarial assumptions, applied to all periods
included in the measurement:
Inflation 2.75%
Investment rate of return 7.25%, net of OPEB plan investment expense,
including inflation
Retirement age Age-based table of rates that are specific to the
type of eligibility condition
Healthcare cost trend rate
Year Beginning
July 1, Pre-Medicare Medicare
2018 6.00% 4.50%
2019 5.50% 4.50%
2020 5.00% 4.25%
2021 4.50% 4.00%
2022 4.50% 4.00%
2023+ 4.50% 4.00%
Mortality rates are assumed to be in accordance with the Retired Pensioners (RP) 2000 Combined Healthy
tables, with Blue Collar adjustments projected Scale BB, to account for anticipated future improvements
in life expectancy. Adjustments to these rates are as follows:
Pre-retirement: 50%of base rates
Post-disablement: RP2000 disabled tables with Scale BB
The actuarial assumptions used in the January 1, 2018 valuation were based on the results of an actuarial
experience study conducted in 2016.
Changes in Actuarial assumptions. There were no changes in actuarial assumptions, except the change in
discount rate.
Investment Policy. The Plan's policy in regard to the allocation of invested assets is established and may
be amended by the Board of Trustees. The investment policy has been formulated based on consideration
of a wide range of policies and describes the prudent investment process that the Board deems
appropriate. The Plan's asset allocation policy as of June 30, 2019 is summarized in the table on the
following page.
119
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
The long-term expected rate of return on OPEB plan investments was determined using a building-block
method in which best-estimates of expected future real rates of return (expected returns, net of OPEB
plan investment expense and inflation) are developed for each asset class. These ranges are combined to
produce the long-term expected rate of return by weighting the expected future real rates of return by
the target asset allocation percentage and by adding expected inflation. This is then modified through a
Monte-Carlo simulation process, by which a (downward) risk adjustment is applied to the baseline
expected return. Best estimates of arithmetic real rates of return for each major asset class included in
the OPEB plan's target asset allocation as of June 30, 2019 are summarized in the following table:
Long-term Money-
Target Expected Real Weighted Rate
Asset Class Allocation Rate of Return of Return
Domestic equity 32.00% 5.80% 1.86%
International equity - developed 12.00% 6.10% 0.73%
International equity - emerging 4.00% 7.25% 0.29%
Fixed income - U.S. 22.00% 2.25% 0.50%
Real assets 10.00% 4.80% 0.48%
Global opportunistic fixed income 5.00% 3.25% 0.16%
Global equity long/short 10.00% 5.00% 0.50%
Absolute return 5.00% 4.50% 0.23%
100.00% 4.75%
Inflation 2.75%
Risk adjustment -0.25%
Investment rate of return 7.25%
Discount Rate. The discount rate used to measure the total OPEB liability was 5.19% (down from 5.67% in
2018). The City's funding expectations/policy is to contribute a percentage of payroll each year to their
OPEB trust, in addition to paying the annual benefits directly. The City has assumed that benefits will be
paid from trust assets once the funding ratio exceeds 50%, and until the fund is depleted. Based on this
information, the City projects that benefits will be paid from the trust beginning in 2040. This is done on a
closed group basis. Therefore, the expected trust return of 7.25% (after 2040) is blended with the 20-year
Aa bond rate of 3.13% (before 2040).
120
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Changes in the Net OPEB Liability. The components of the change in the net OPEB liability are summarized
as follows:
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability
(a) (b) (a) - (b)
Balances at June 30, 2018 $ 277,078,552 $ 38,308,203 $ 238,770,349
Changes for the year:
Service cost 3503,096 - 3,503,096
Interest on total OPEB liability 15,565,892 15,565,892
Changes in assumptions 18,652,834 - 18,652,834
Employer contributions - 13,500,687 (13,500,687)
Net investment income 290,543 (290,543)
Benefit payments (12,271,014) (12,271,014) -
Administrative expense - (627,673) 627,673
Net changes 25,450,808 892,543 24,558,265
Balances at June 30, 2019 $ 302,529,360 $ 39,200,746 $ 263,328,614
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate. The following presents the net OPEB
liability of the City, calculated using the discount rate of 5.19%, as well as what the City's net OPEB
liability would be if it were calculated using a discount rate that is 1% lower (4.19%) or 1% higher (6.19%)
than the current rate:
Current
1% Decrease Discount Rate 1% Increase
(4.19%) (5.19%) (6.19%)
City's net OPEB liability $ 306,218,707 $ 263,328,614 $ 225,764,105
Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rate Assumption. The
following presents the net OPEB liability of the City, calculated using the healthcare cost trend rate of
6.0% pre-Medicare / 4.5% Medicare, trending to an ultimate rate of 4.5% pre-Medicare / 4.0% Medicare, as
well as what the City's net OPEB liability would be if it were calculated using healthcare cost trend rates
that are 1% lower (5.0% pre-Medicare / 3.5%Medicare, trending to an ultimate rate of 3.5% pre-Medicare /
3.0% Medicare) or 1% higher (7.0% pre-Medicare / 5.5%Medicare, trending to an ultimate rate of 5.5% pre-
Medicare / 5.0%Medicare) than the current healthcare cost trend rates:
Healthcare
Ultimate Cost
1% Decrease Trend Rates 1% Increase
(3.5%/ 3.0%) (4.5%/4.0%) (5.5%/ 5.0%)
City's net OPEB liability $ 229,039,473 $ 263,328,614 $ 305,217,615
121
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB.
For the year ended June 30, 2019, the City recognized OPEB expense of $15,546,035. At June 30, 2019, the
City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the
following sources:
Net Deferred
Deferred Deferred Outflows
Outflows of Inflows of (Inflows) of
Resources Resources Resources
Difference between expected and actual experience $ - $ 8,905,701 $ (8,905,701)
Changes in assumptions 13,989,625 3,722,676 10,266,949
Net difference between projected and actual earnings
on OPEB plan investments 1,330,459 - 1,330,459
Total $ 15,320,084 $ 12,628,377 $ 2,691,707
Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will
be recognized in OPEB expense as follows:
Year Ended
June 30, Amount
2020 $ (1,373,281)
2021 (1,373,280)
2022 4,940,906
2023 497,362
Total $ 2,691,707
OPEB Plan Fiduciary Net Position. Detailed information about the OPEB plan's fiduciary net position is
available in the combining statements for the pension and other postemployment benefit trust funds
preceding this footnote.
Payable to the OPEB Plan. At June 30, 2019, the City reported had no amount payable to the OPEB plan.
For governmental activities, other postemployment benefit liabilities are expected to be liquidated by the
generalfund.
122
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Summary OPEB Information
The table below summarizes the net OPEB liability and related deferrals for the Employees' Retirement
System and the Police and Fire Retirement System as presented in the Statement of Net Position.
Employees' Police £t Fire
Retirement Retirement
System System Total
Net OPEB liability $ 167,933,313 $ 263,328,614 $ 431,261,927
Deferred outflows - OPEB 2,686,176 15,320,084 18,006,260
Deferred inflows - OPEB - 12,628,377 12,628,377
18. TAX ABATEMENTS
Because Lansing is an older city, vacant land, or "green space" for new buildings is scarce, the City offers
tax abatements to make redevelopment and rehabilitation of existing buildings economically viable for
developers, who must consider the cost of rehabilitating existing, often older, buildings which may involve
environmental remediation, against the generally lesser cost of building on vacant land outside the City.
These tax abatements are designed to level the "playing field" for urban communities to encourage
redevelopment of vacant buildings, and to attract and retain private investment and jobs within the City.
The City of Lansing provides tax abatements under several different programs:
Industrial property tax abatements are granted in the State of Michigan under Public Act 198 to
promote economic development, creation of jobs, and new or improved facilities. The Industrial
Facilities Tax (IFT) Exemption must be approved by both the City (after a public hearing is held) and
the State of Michigan. IFT exemptions can cover real and/or personal property. By State law, the
exemption must be applied for no later than six months after commencement of the project and must
be accompanied by a written agreement between the taxpayer and the local unit. An exemption allows
for taxation on IFT property at 50% of the local property tax millage rate for up to 12 years. A
certificate may be revoked and taxes recaptured for noncompliance with the terms of the agreement.
Property taxes abated by the City under this program for fiscal year 2019 amounted to $450,495.
The State of Michigan allows for Commercial Rehabilitation Exemption under Public Act 210 if making
substantial improvements to a business or multi-family residential facility. The City had no Commercial
Rehabilitation Exemptions for fiscal year 2019.
To incentivize new or expanded businesses, Public Act 328 allows for Personal Property Tax Exemptions
for qualified businesses located within eligible distressed communities. The exemption must be
approved by the City Commission and the State Treasurer. Once approved, the taxpayer is exempt from
personal property tax on new investments after the date of the exemption. The City can recapture the
taxes if the business defaults on the terms of the written agreement. Property taxes abated by the City
under this program for fiscal year 2019 amounted to $4,623,383.
123
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
The Brownfield Redevelopment Authority encourages environmental cleanup and economic
development through its Brownfield Redevelopment Plan under Public Act 318. A developer performs
redevelopment and cleanup activities at a site that is obsolete or blighted. The increased tax revenues
resulting from the increase in taxable value are captured by the City and used to repay the developer
for qualifying expenses. There is no provision for recovery of abated taxes because the developer is
only paid for eligible expenses on a reimbursement-basis. Property taxes abated by the Authority under
this program for fiscal year 2019, through direct reimbursement to developers from current tax
captures, amounted to $529,215. In addition, there are reserve liabilities reported in the financial
statements that represent tax captures set aside for future developer reimbursements. Property taxes
abated by the Authority under this program for fiscal year 2019 amounted to $150,221.
■ ■ ■ ■ ■
124
REQUIRED SUPPLEMENTARY INFORMATION
125
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Pension Plan
Employees'Retirement System
Schedules of Changes in Net Pension Liability and Related Ratios
Fiscal Year Ending June 30,
1 2016 2014
Total pension liability
Service cost $ 2,719,559 $ 2,538,487 $ 2,711,461 $ 2,977,084 $ 2,857,948 $ 2,982,624
Interest on total pension liability 21,512,099 21,994,837 22,403,009 22,268,516 22,671,909 22,722,630
Difference between expected and
actual experience (2,559,726) (6,451,827) (23,183,264) (4,937,823) (6,422,330) -
Assumption changes - 3,099,448 3,706,512 7,575,775
Benefit payments,including refunds (23,470,040) (23,102,224) (22,913,214) (22,860,449) (22,462,587) (22,790,522)
Net change in total pension liability (1,798,108) (1,921,279) (17,275,496) 5,023,103 (3,355,060) 2,914,732
Total pension liability,beginning of year 305,528,755 307,450,034 324,725,530 319,702,427 323,057,487 320,142,755
Total pension liability,end of year 303,730,647 305,528,755 307,450,034 324,725,530 319,702,427 323,057,487
Plan fiduciary net position
Employer contributions 10,880,932 10,843,000 10,246,872 10,181,620 10,547,556 9,361,009
Employee contributions 1,220,657 1,230,857 1,216,519 1,088,943 1,128,120 1,290,678
Pension plan net investment income(loss) 8,437,568 9,679,565 17,412,568 (2,790,190) 4,399,543 17,887,635
Benefit payments(including refunds) (23,470,040) (23,102,224) (22,913,214) (22,860,449) (22,462,587) (22,957,379)
Pension plan administrative expense (42,364) (57,822) (47,217) (126,486) (174,818) (741,037)
Net change in plan fiduciary net position (2,973,247) (1,406,624) 5,915,528 (14,506,562) (6,562,186) 4,840,906
Plan fiduciary net position,beginning of year 168,558,816 169,965,440 164,049,912 178,556,474 185,118,660 180,277,754
Plan fiduciary net position,end of year 165,585,569 168,558,816 169,965,440 164,049,912 178,556,474 185,118,660
Net pension liability $138,145,078 $136,969,939 $137,484,594 $160,675,618 $141,145,953 $137,938,827
Plan fiduciary net position as a percentage
of total pension liability 54.5% 55.2% 55.3% 50.5% 55.9% 57.3%
Covered payroll $ 23,265,437 $ 22,672,891 $ 20,901,389 $ 23,085,894 $ 19,769,460 $ 20,874,143
Net pension liability as a percentage
of covered payroll 593.8% 604.1% 657.8% 696.0% 714.0% 660.8%
Note:GASB 67 was implemented in fiscal year 2014.This schedule is being built prospectively.Ultimately,10 years of data will be presented.
Assumption changes: There were changes in actuarial assumptions during fiscal year 2018,a decrease in the assumed rates of inflation and investment
return.These changes,along with updated projections of fund solvency,also resulted in changes to the discount rates.
There were changes in actuarial assumptions during fiscal year 2017 based on the experience study completed in December 2016.There was a change in
the discount rate due to a higher bond rate.
There were no changes in actuarial assumptions during fiscal year 2016,except for the change in discount rate due to a lower bond rate.
126
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Pension Plan
Employees' Retirement System
Schedule of the Net Pension Liability
Plan Net Net Pension
Position as Liability as
Fiscal Year Percentage of Percentage of
Ending Total Pension Plan Net Net Pension Total Pension Covered Covered
June 30, Liability Position Liability Liability Payroll Payroll
2014 $ 323,057,487 $ 185,118,660 $ 137,938,827 57.3% $ 20,874,143 660.8%
2015 319,702,427 178,556,474 141,145,953 55.9% 19,769,460 714.0%
2016 324,725,530 164,049,912 160,675,618 50.5% 23,085,894 696.0%
2017 307,450,034 169,965,440 137,484,594 55.3% 20,901,389 657.8%
2018 305,528,755 168,558,816 136,969,939 55.2% 22,672,891 604.1%
2019 303,730,647 165,585,569 138,145,078 54.5% 23,265,437 593.8%
Note: GASB 67 was implemented in fiscal year 2014. This schedule is being built prospectively. Ultimately, 10 years of data
will be presented.
127
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Pension Plan
Employees' Retirement System
Schedule of Contributions
Actual
Contribution as
Fiscal Year Actuarially Contribution Percentage of
Ending Determined Actual Deficiency Covered Covered
June 30, Contribution* Contribution (Excess)* Payroll Payroll
2010 $ 6,472,349 $ 6,043,861 $ 428,488 $ 27,766,628 21.8%
2011 7,297,083 7,297,083 - 26,068,735 28.0%
2012 7,596,879 7,523,534 73,345 22,838,598 32.9%
2013 8,586,536 8,586,536 - 20,874,143 41.1%
2014 9,361,009 9,361,009 21,521,242 43.5%
2015 10,547,556 10,547,556 19,769,460 53.4%
2016 10,181,620 10,181,620 23,085,894 44.1%
2017 10,246,872 10,246,872 20,901,389 49.0%
2018 10,185,060 10,843,000 (657,940) 22,672,891 47.8%
2019 10,880,932 10,880,932 - 23,265,437 46.8%
* The City's FY 2010 contribution was reduced by the dollar amount of the FY 2009 overpayment. The FY 2012 City
contribution was reduced by $73,345 in recognition of additional contributions by United Auto Workers (UAW) employees,
which were negotiated and contributed after the establishment of the June 30, 2012 ADC from the December 31, 2010
valuation.
The actuarially determined contribution was based on projected covered payroll. Employer contributions were made in full
based on actual covered payroll. Accordingly, the actuarially determined contribution has been expressed above as a
percentage of actual payroll.
Notes to Schedule of Contributions
Valuation Date December 31, 2018
Notes Actuarially determined contribution rates are calculated as of the December 31 that is
6 months prior to the beginning of the fiscal year in which contributions are reported.
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry-age normal
Amortization method Level percent of payroll, closed
Remaining amortization
period 23 years
Asset valuation method Closed; 5-year smooth market
Inflation 2.75%
Salary increases Increases in salary are assumed to increase with inflation annually, plus an additional
amount that varies based on the service of the member as shown below:
Years of
Service UAW All Others
0-8 2.35% 1.85%
9-10 2.35% 0.60%
11+ 1.35% 0.60%
Investment rate of return 7.25%, net of investment expense and including inflation
Retirement age Age-based table of rates that are specific to the type of eligibility condition.
Mortality Mortality is based on the RP-2000 tables for males and females. For Disabled members,
the disabled versions of these tables are used. Each of these tables is projected to 2026
using Scale BB and a 50%factor is applied for pre-retirement deaths.
128
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Pension Plan
Employees' Retirement System
Schedule of Investment Returns
Fiscal Year
Ending Annual
June 30, Returp
2014 13.67%
2015 2.43%
2016 -1.60%
2017 10.91%
2018 5.87%
2019 5.17%
Annual money-weighted rate of return, net of investment expenses
Note: GASB 67 was implemented in fiscal year 2014. This schedule is being built prospectively. Ultimately, 10 years of data
will be presented.
129
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Pension Plan
Police and Fire Retirement System
Schedules of Changes in Net Pension Liability and Related Ratios
Fiscal Year Ending nommormMmm
2019 2018 2017 2014-
Total pension liability
Service cost $ 6,801,669 $ 6,533,877 $ 6,133,683 $ 6,371,845 $ 6,350,378 $ 6,614,784
Interest on total pension liability 31,573,535 30,641,722 30,519,676 30,197,513 29,159,382 27,896,927
Benefit changes - 779 - - - -
Difference between expected and actual experience 10,590,030 8,263,623 (19,308,117) 7,884,167 3,159,996
Assumption changes - 1,647,044 25,078,592 3,281,341 -
Benefit payments,including refunds (32,609,254) (31,757,151) (31,102,186) (29,503,964) (27,969,021) (26,270,724)
Net change in total pension liability 16,355,980 15,329,894 11,321,648 18,230,902 10,700,735 8,240,987
Total pension liability,beginning of year 444,999,992 429,670,098 418,348,450 400,117,548 389,416,813 381,175,826
Total pension liability,end of year 461,355,972 444,999,992 429,670,098 418,348,450 400,117,548 389,416,813
Plan fiduciary net position
Employer contributions 13,554,239 12,686,000 11,521,768 10,884,312 11,050,091 11,248,857
Employee contributions 3,485,891 2,650,019 2,840,914 2,608,214 2,950,832 2,911,896
Pension plan net investment income(loss) 17,943,950 19,937,149 32,116,305 (6,040,910) 8,965,080 34,016,621
Benefit payments(including refunds) (32,609,254) (31,757,151) (31,102,186) (29,503,964) (27,969,021) (26,852,038)
Pension plan administrative expense (53,318) (77,237) (50,996) (128,903) (173,849) (1,141,506)
Net change in plan fiduciary net position 2,321,508 3,438,780 15,325,805 (22,181,251) (5,176,867) 20,183,830
Plan fiduciary net position,beginning of year 291,879,983 288,441,203 273,115,398 295,296,649 300,473,516 280,289,686
Plan fiduciary net position,end of year 294,201,491 291,879,983 288,441,203 273,115,398 295,296,649 300,473,516
Net pension liability $167,154,481 $153,120,009 $141,228,895 $145,233,052 $104,820,899 $ 88,943,297
Plan fiduciary net position as a percentage
of total pension liability 63.8% 65.6% 67.1% 65.3% 73.8% 77.2%
Covered payroll $ 29,638,532 $ 28,435,952 $ 27,585,521 $ 27,078,405 $ 24,407,740 $ 25,611,974
Net pension liability as a percentage
of covered payroll 564.0% 538.5% 512.0% 536.3% 429.5% 347.3%
Note:GASB 67 was implemented in fiscal year 2014.This schedule is being built prospectively. Ultimately, 10 years of data will be presented.
Assumption changes: There were changes in actuarial assumptions during fiscal year 2018, a decrease in the assumed rates of inflation and investment
return.These changes,along with updated projections of fund solvency,also resulted in changes to the discount rates.
There were changes in actuarial assumptions during fiscal year 2017 based on the experience study completed in December 2016.There was a change in
the discount rate due to a higher bond rate.
There were no changes in actuarial assumptions during fiscal year 2016,except for the change in discount rate due to a lower bond rate.
130
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Pension Plan
Police and Fire Retirement System
Schedule of the Net Pension Liability
Plan Net Net Pension
Position as Liability as
Fiscal Year Percentage of Percentage of
Ending Total Pension Plan Net Net Pension Total Pension Covered Covered
June 30, Liability Position Liability Liability Payroll Payroll
2014 $ 389,416,813 $ 300,473,516 $ 88,943,297 77.2% $ 25,611,974 347.3%
2015 400,117,548 295,296,649 104,820,899 73.8% 24,407,740 429.5%
2016 418,348,450 273,115,398 145,233,052 65.3% 27,078,405 536.3%
2017 429,670,098 288,441,203 141,228,895 67.1% 27,585,521 512.0%
2018 444,999,992 291,879,983 153,120,009 65.6% 28,435,952 538.5%
2019 461,355,972 294,201,491 167,154,481 63.8% 29,638,532 564.0%
Note: GASB 67 was implemented in fiscal year 2014. This schedule is being built prospectively. Ultimately, 10 years of data
will be presented.
131
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Pension Plan
Police and Fire Retirement System
Schedule of Contributions
Actual
Contribution as
Fiscal Year Actuarially Contribution Percentage of
Ending Determined Actual Deficiency Covered Covered
June 30, Contribution* Contribution (Excess)* Payroll Payroll
2010 $ 7,179,360 $ 6,790,757 $ 388,603 $ 28,536,056 23.8%
2011 8,240,688 8,240,688 - 25,128,835 32.8%
2012 9,242,173 9,057,080 185,093 26,121,411 34.7%
2013 10,133,599 10,133,599 - 25,636,626 39.5%
2014 11,248,857 11,248,857 25,611,974 43.9%
2015 11,050,091 11,050,091 24,407,740 45.3%
2016 10,884,312 10,884,312 27,078,405 40.2%
2017 11,521,768 11,521,768 27,585,521 41.8%
2018 12,562,547 12,686,000 (123,453) 28,435,952 44.6%
2019 13,554,239 13,554,239 - 29,638,532 45.7%
* The City's FY 2010 contribution was reduced by the dollar amount of the FY 2009 overpayment. The FY 2012 City
contribution was reduced by$185,093 in recognition of additional contributions by International Association of Firefighters
(IAFF) employees, which were negotiated and contributed after the establishment of the June 30, 2012 ADC from the
December 31, 2010 valuation.
The actuarially determined contribution was based on projected covered payroll. Employer contributions were made in full
based on actual covered payroll. Accordingly, the actuarially-determined contribution has been expressed above as a
percentage of actual payroll.
Notes to Schedule of Contributions
Valuation Date December 31, 2018
Notes Actuarially determined contribution rates are calculated as of the December 31 that is
6 months prior to the beginning of the fiscal year in which contributions are reported.
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry-age normal
Amortization method Level percent of payroll, closed
Remaining amortization
period 23 years
Asset valuation method Closed; 5-year smooth market
Inflation 2.75%
Salary increases Increases in salary are assumed to be equal to inflation, plus 7.25% for those with less
than 5 years of service or 1.00%for all others
Investment rate of return 7.25%, net of investment expense and including inflation
Retirement age Age-based table of rates that are specific to the type of eligibility condition.
Mortality Mortality is based on the RP-2000 tables (with Blue Collar adjustments for Police and
Fire) for males and females. For Disabled members, the disabled versions of these
tables are used. Each of these tables is projected to 2026 using Scale BB and a 50%
factor is applied for pre-retirement deaths.
132
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Pension Plan
Police and Fire Retirement System
Schedule of Investment Returns
Fiscal Year
Ending Annual
June 30, Return(')
2014 17.28%
2015 3.04%
2016 -2.09%
2017 12.06%
2018 7.10%
2019 6.30%
Annual money-weighted rate of return, net of investment expenses
Note: GASB 67 was implemented in fiscal year 2014. This schedule is being built prospectively. Ultimately, 10 years of data
will be presented.
133
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Other Postemployment Benefits Plan
Employees' Retirement System
Schedule of Changes in Net OPEB Liability and Related Ratios
Fiscal Year Ending June 30,
2019 2018 2017
Total OPEB liability
Service cost $ 1,477,747 $ 1,438,197 $ 1,550,428
Interest on total OPEB liability 12,990,219 13,221,134 12,976,683
Difference between expected and actual experience - (9,321,837) -
Changes in assumptions 3,614,432 (2,727,829)
Benefit payments (10,573,488) (10,286,249) (10,116,593)
Net change in total OPEB liability 7,508,910 (7,676,584) 4,410,518
Total OPEB liability, beginning of year 223,906,447 231,583,031 227,172,513
Total OPEB liability, end of year 231,415,357 223,906,447 231,583,031
Plan fiduciary net position
Employer contributions 11,848,485 11,436,222 11,305,756
OPEB plan net investment income 3,040,683 4,329,577 5,209,669
Benefit payments (10,573,488) (10,286,249) (10,116,593)
Administrative expense (548,939) (444,973) (389,163)
Net change in plan fiduciary net position 3,766,741 5,034,577 6,009,669
Plan fiduciary net position, beginning of year 59,715,303 54,680,726 48,671,057
Plan fiduciary net position, end of year 63,482,044 59,715,303 54,680,726
Net OPEB liability $ 167,933,313 $ 164,191,144 $ 176,902,305
Plan fiduciary net position as a percentage
of total OPEB liability 27.4% 26.7% 23.6%
Covered payroll $ 23,720,424 $ 21,251,418 $ 20,901,389
Net OPEB liability as a percentage
of covered payroll 708.0% 772.6% 846.4%
Note: GASB 74 was implemented in fiscal year 2017. This schedule is being built prospectively. Ultimately, 10 years of data
will be presented.
Assumption changes: There were no changes in actuarial assumptions during fiscal year 2019 and 2018, except the change
in discount rate.
134
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Other Postemployment Benefits Plan
Employees' Retirement System
Schedule of the Net OPEB Liability
Plan Net Net OPEB
Position as Liability as
Fiscal Year Percentage of Percentage of
Ending Total OPEB Plan Net Net OPEB Total OPEB Covered Covered
June 30, Liability Position Liability Liability Payroll Payroll
2017 $ 231,583,031 $ 54,680,726 $ 176,902,305 23.6% $ 20,901,389 846.4%
2018 223,906,447 59,715,303 164,191,144 26.7% 21,251,418 772.6%
2019 231,415,357 63,482,044 167,933,313 27.4% 23,720,424 708.0%
Note: GASB 74 was implemented in fiscal year 2017. This schedule is being built prospectively. Ultimately, 10 years of data
will be presented.
135
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Other Postemployment Benefits Plan
Employees' Retirement System
Schedule of Contributions
Actual
Contribution as
Fiscal Year Actuarially Contribution Percentage of
Ending Determined Actual Deficiency Covered Covered
June 30, Contribution Contribution (Excess) Payroll Payroll
2010 $ 10,608,281 $ 9,782,538 $ 825,743 $ 27,766,628 35.2%
2011 8,819,018 9,773,601 (954,583) 26,068,735 37.5%
2012 14,915,958 10,363,847 4,552,111 22,838,598 45.4%
2013 12,775,667 10,147,780 2,627,887 20,874,143 48.6%
2014 14,057,619 11,048,992 3,008,627 21,521,242 51.3%
2015 13,270,701 9,212,322 4,058,379 19,769,460 46.6%
2016 11,447,334 8,814,471 2,632,863 23,085,894 38.2%
2017 10,582,235 11,305,756 (723,521) 20,901,389 54.1%
2018 10,910,284 11,436,222 (525,938) 21,251,418 53.8%
2019 10,198,194 11,848,485 (1,650,291) 23,720,424 50.0%
Notes to Schedule of Contributions
Valuation Date January 1, 2018
Notes Actuarially determined contribution rates are calculated as of the January 1 that is 18
months prior to the beginning of the fiscal year in which contributions are reported.
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry-age normal
Amortization method Level percentage of pay
Remaining amortization period 24 years
Asset valuation method Market value
Inflation 2.75%
Investment rate of return 7.25%
Retirement age Age-based table of rates that are specific to the type of eligibility condition.
Mortality Mortality rates are assumed to be in accordance with the Retired Pensioners (RP) 2000
Combined Healthy tables, with Blue Collar adjustments projected Scale BB, to account
for anticipated future improvements in life expectancy. Adjustments to these rates are
as follows: Pre-retirement: 50% of base rates; Post-disablement: RP2000 disabled
tables with Scale BB
Health care trend rates Year Beginning
July 1, Pre-Medicare Medicare
2018 6.00% 4.50%
2019 5.50% 4.50%
2020 5.00% 4.25%
2021 4.50% 4.00%
2022+ 4.50% 4.00%
136
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Other Postemployment Benefits Plan
Employees' Retirement System
Schedule of Investment Returns
Fiscal Year
Ending Annual
June 30, Return
2017 9.90%
2018 7.10%
2019 4.17%
Annual money-weighted rate of return, net of investment expenses
Note: GASB 74 was implemented in fiscal year 2017. This schedule is being built prospectively. Ultimately, 10 years of data
will be presented.
137
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Other Postemployment Benefits Plan
Police and Fire Retirement System
Schedule of Changes in Net OPEB Liability and Related Ratios
Fiscal Year Ending June 30,
2019 2018 2017
Total OPEB liability
Service cost $ 3,503,096 $ 3,409,339 $ 3,749,359
Interest on total OPEB liability 15,565,892 15,994,328 15,584,783
Difference between expected and actual experience - (17,811,401) -
Changes in assumptions 18,652,834 (7,445,354)
Benefit payments (12,271,014) (11,960,557) (11,065,440)
Net change in total OPEB liability 25,450,808 (17,813,645) 8,268,702
Total OPEB liability, beginning of year 277,078,552 294,892,197 286,623,495
Total OPEB liability, end of year 302,529,360 277,078,552 294,892,197
Plan fiduciary net position
Employer contributions 13,500,687 13,163,201 12,290,749
OPEB plan net investment income 290,543 3,572,965 3,487,200
Benefit payments (12,271,014) (11,960,557) (11,065,440)
Administrative expense (627,673) (600,644) (525,309)
Net change in plan fiduciary net position 892,543 4,174,965 4,187,200
Plan fiduciary net position, beginning of year 38,308,203 34,133,238 29,946,038
Plan fiduciary net position, end of year 39,200,746 38,308,203 34,133,238
Net OPEB liability $ 263,328,614 $ 238,770,349 $ 260,758,959
Plan fiduciary net position as a percentage
of total OPEB liability 13.0% 13.8% 11.6%
Covered payroll $ 28,435,953 $ 20,667,007 $ 27,585,521
Net OPEB liability as a percentage
of covered payroll 926.0% 1155.3% 945.3%
Note: GASB 74 was implemented in fiscal year 2017. This schedule is being built prospectively. Ultimately, 10 years of data
will be presented.
Assumption changes: There were no changes in actuarial assumptions during fiscal year 2019 and 2018, except the change
in discount rate.
138
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Other Postemployment Benefits Plan
Police and Fire Retirement System
Schedule of the Net OPEB Liability
Plan Net Net OPEB
Position as Liability as
Fiscal Year Percentage of Percentage of
Ending Total OPEB Plan Net Net OPEB Total OPEB Covered Covered
June 30, Liability Position Liability Liability Payroll Payroll
2017 $ 294,892,197 $ 34,133,238 $ 260,758,959 11.6% $ 27,585,521 945.3%
2018 277,078,552 38,308,203 238,770,349 13.8% 20,667,007 1155.3%
2019 302,529,360 39,200,746 263,328,614 13.0% 28,435,953 926.0%
Note: GASB 74 was implemented in fiscal year 2017. This schedule is being built prospectively. Ultimately, 10 years of data
will be presented.
139
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Other Postemployment Benefits Plan
Police and Fire Retirement System
Schedule of Contributions
Actual
Contribution as
Fiscal Year Actuarially Contribution Percentage of
Ending Determined Actual Deficiency Covered Covered
June 30, Contribution Contribution (Excess) Payroll Payroll
2010 $ 16,563,477 $ 9,585,692 $ 6,977,785 $ 28,536,056 33.6%
2011 16,474,153 9,844,226 6,629,927 25,128,835 39.2%
2012 17,844,155 9,888,796 7,955,359 26,121,411 37.9%
2013 17,489,692 11,170,202 6,319,490 25,636,626 43.6%
2014 16,945,536 11,198,663 5,746,873 26,405,725 42.4%
2015 17,923,366 11,561,406 6,361,960 24,407,740 47.4%
2016 17,276,901 12,879,016 4,397,885 27,078,405 47.6%
2017 19,759,521 12,290,749 7,468,772 27,585,521 44.6%
2018 15,968,029 13,163,201 2,804,828 28,435,953 46.3%
2019 15,218,062 13,500,687 1,717,375 28,435,953 47.5%
Notes to Schedule of Contributions
Valuation Date January 1, 2018
Notes Actuarially determined contribution rates are calculated as of the January 1 that is 18
months prior to the beginning of the fiscal year in which contributions are reported.
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry-age normal
Amortization method Level percentage of pay
Remaining amortization period 24 years
Asset valuation method Market value
Inflation 2.75%
Investment rate of return 7.25%
Retirement age Age-based table of rates that are specific to the type of eligibility condition.
Mortality Mortality rates are assumed to be in accordance with the Retired Pensioners (RP) 2000
Combined Healthy tables, with Blue Collar adjustments projected Scale BB, to account
for anticipated future improvements in life expectancy. Adjustments to these rates are
as follows: Pre-retirement:50% of base rates; Post-disablement: RP2000 disabled
tables with Scale BB
Health care trend rates Year Beginning
July 1, Pre-Medicare Medicare
2018 6.00% 4.50%
2019 5.50% 4.50%
2020 5.00% 4.25%
2021 4.50% 4.00%
2022 4.50% 4.00%
2023+ 4.50% 4.00%
140
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Other Postemployment Benefits Plan
Police and Fire Retirement System
Schedule of Investment Returns
Fiscal Year
Ending Annual
June 30, Return
2017 9.89%
2018 8.71%
2019 -0.88%
Annual money-weighted rate of return, net of investment expenses
Note: GASB 74 was implemented in fiscal year 2017. This schedule is being built prospectively. Ultimately, 10 years of data
will be presented.
141
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142
COMBINING AND INDIVIDUAL FUND FINANCIAL
STATEMENTS AND SCHEDULES
143
CITY OF LANSING, MICHIGAN
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2019
Special Debt Capital
Revenue Service Projects Permanent Totals
Assets
Cash and cash equivalents $ 82,029 $ - $ 89,710 $ - $ 171,739
Equity in pooled cash and investments 16,347,557 30,111 8,664,141 1,914,166 26,955,975
Accounts receivable, net 4,859 - 116,032 - 120,891
Special assessments receivable - 191,201 191,201
Loans receivable 1,222,523 - 1,222,523
Accrued interest receivable 2,172,446 2,172,446
Due from other governments, net 7,691,569 7,691,569
Inventories 1,030,305 1,030,305
Prepaids 7,556 - - - 7,556
Total assets $ 28,558,844 $ 30,111 $ 9,061,084 $ 1,914,166 $ 39,564,205
Liabilities
Negative equity in pooled cash $ 2,889,204 $ - $ - $ - $ 2,889,204
Accounts payable 1,863,563 200,196 2,063,759
Deposits payable 35,020 - 35,020
Accrued payroll 67,198 67,198
Indemnity bonds 43,867 43,867
Due to other funds 624,145 - 624,145
Advances from other funds - 150,303 150,303
Due to other governments 587,250 - 587,250
Unearned revenue 528,800 - 528,800
Total liabilities 6,639,047 350,499 6,989,546
Deferred inflows of resources
Unavailable revenues - loans and
accrued interest receivable 3,394,969 - 3,394,969
Unavailable revenues - special
assessments - 156,444 156,444
Total deferred inflows of resources 3,394,969 156,444 - 3,551,413
Fund balances
Nonspendable 1,037,861 - - 1,914,166 2,952,027
Restricted 17,002,298 30,111 6,368 - 17,038,777
Committed 484,669 - 8,663,319 9,147,988
Unassigned (deficit) - - (115,546) - (115,546)
Total fund balances 18,524,828 30,111 8,554,141 1,914,166 29,023,246
Total liabilities, deferred inflows of
resources and fund balances $ 28,558,844 $ 30,111 $ 9,061,084 $ 1,914,166 $ 39,564,205
144
CITY OF LANSING, MICHIGAN
Combining Statement of Revenues, Expenditures and Change in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2019
Special Debt Capital
Revenue Service Projects Permanent Totals
Revenues
Property taxes and special assessments $ 552,508 $ 545,744 $ 39,715 $ $ 1,137,967
Intergovernmental 27,183,157 - - 27,183,157
Charges for services 3,541,837 2,669,488 6,211,325
Fines and forfeitures 256,273 - 256,273
Interest and rents 318,202 43,380 43,886 405,468
Contributions 12,500 - - 12,500
Otherrevenues 736,495 - - - 736,495
Total revenues 32,600,972 545,744 2,752,583 43,886 35,943,185
Expenditures
Current expenditures:
General government 3,313,802 - - - 3,313,802
Public safety 1,883,913 1,883,913
Public works 17,339 17,339
Highways and streets 11,984,896 11,984,896
Community development 10,260,226 - 10,260,226
Debt service:
Principal 824,543 500,000 1,324,543
Interest 534,179 17,383 - 551,562
Capital outlay 3,279,045 - 1,519,025 4,798,070
Total expenditures 32,097,943 517,383 1,519,025 - 34,134,351
Revenues over expenditures 503,029 28,361 1,233,558 43,886 1,808,834
Other financing sources (uses)
Transfers in 5,184,520 750 3,431,250 32,776 8,649,296
Transfers out (2,900,000) - (711,897) - (3,611,897)
Issuance of long-term debt 1,665,000 1,665,000
Issuance of long-term refunding debt 6,938,699 6,938,699
Bond premium 780,670 780,670
Payment to refunding bond escrow agent (7,741,363) - - - (7,741,363)
Total other financing sources (uses) 3,927,526 750 2,719,353 32,776 6,680,405
Net change in fund balances 4,430,555 29,111 3,952,911 76,662 8,489,239
Fund balances, beginning of year 14,094,273 1,000 4,601,230 1,837,504 20,534,007
Fund balances, end of year $ 18,524,828 $ 30,111 $ 8,554,141 $ 1,914,166 $ 29,023,246
145
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146
CITY OF LANSING, MICHIGAN
Nonmajor Special Revenue Funds
Major Streets Fund - This fund accounts for revenues received from the State of Michigan for the
City's share of state gasoline and weight taxes, which is used for maintenance of major streets.
Local Streets Fund - This fund accounts for revenues received from the State of Michigan for the
City's share of state gasoline and weight taxes, which is used for maintenance of local streets.
Drug Law Enforcement Federal Fund - This fund accounts for federal revenues, from the
Departments of Justice and Treasury, set aside for drug law enforcement under the provisions of
Federal Grant Agreements.
Drug Law Enforcement State and Local Fund - This fund accounts for state and local revenues,
from the Departments of Justice and Treasury, set aside for drug law enforcement under the
provisions of State of Michigan Public Act 135 of 1985, as amended.
Community Development Block Grant Program Fund - This fund accounts for revenues received
from the Department of Housing and Urban Development. These revenues are restricted to
accomplishing the various objectives of Community Development Block Grant Programs, within
specific target areas.
Downtown Lansing, Inc. Fund - This fund accounts for assessments received from businesses
located in the district. The revenues are used for special events and maintenance of the district.
Building Department Fund - This fund accounts for revenues and expenditures resulting from the
enforcement of the State Construction Code Act of 1999 (PA 245 of 1999).
Parks Department Fund - This fund accounts for contributions and transfers which are restricted
for park expenditures.
State and Federal Grants Fund - This fund accounts for all revenues received from miscellaneous
grants and contributions. These revenues are used for projects as detailed in individual grant
applications.
Tri-County Metro Fund - This fund accounts for the operations of the Tri-County Metro Narcotics
Squad.
147
CITY OF LANSING, MICHIGAN
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2019
Drug Law Community
Drug Law Enforcement Development
Major Local Enforcement State and Block Grant
Streets Streets Federal Local Program
Assets
Cash and cash equivalents $ - $ - $ - $ 33,000 $
Equity in pooled cash and investments 10,793,690 2,356,585 475,646 730,110
Accounts receivable, net - - - - -
Loans receivable 1,185,000
Accrued interest receivable - - 2,172,446
Due from other governments, net 2,194,338 524,644 764,393
Inventories 1,030,305 - - -
Prepaids 2,398 - 4,908 -
Total assets $ 14,020,731 $ 2,881,229 $ 475,646 $ 768,018 $ 4,121,839
Liabilities
Negative equity in pooled cash $ - $ - $ - $ - $ 10,000
Accounts payable 444,324 489,289 11,343 113,370
Deposits payable - - - -
Accrued payroll - 16,878
Indemnity bonds 43,867 -
Due to other funds - 624,145
Due to other governments - - -
Unearned revenue 39,733 11,658 - -
Total liabilities 527,924 500y947 11,343 764,393
Deferred inflows of resources
Unavailable revenues - loans and
accrued interest receivable - - 3,357,446
Fund balances
Nonspendable 1,032,703 - 41908 -
Restricted 12,460,104 2,380,282 475,646 751,767
Committed - -
Total fund balances 13,492,807 2,380,282 475,646 756,675 -
Total liabilities, deferred inflows of
resources and fund balances $ 14,020,731 $ 2,881,229 $ 475,646 $ 768,018 $ 4,121,839
148
State and
Downtown Building Parks Federal Tri-County
Lansing, Inc. Department Department Grants Metro Totals
$ - $ - $ - $ $ 49,029 $ 82,029
54,400 562,090 484,669 890,367 16,347,557
- 4,859 - - 4,859
- 37,523 1,222,523
- - - 2,172,446
1,000 4,165,779 41,415 7,691,569
- - - 1,030,305
250 - - - - 7,556
$ 55,650 $ 566,949 $ 484,669 $ 4,203,302 $ 980,811 $ 28,558,844
$ - $ - $ - $ 2,879,204 $ - $ 2,889,204
6,179 518 707,190 91,350 1,863,563
- - - 35,020 35,020
1,983 32,483 14,471 1,383 67,198
- - - - 43,867
- - 624,145
- 90,420 496,830 587,250
- 2,915 474,494 - 528,800
8,162 35,916 4,165,779 624,583 6,639,047
- - 37,523 - 3,394,969
250 - - - 1,037,861
47,238 531,033 - 356,228 17,002,298
- - 484,669 - 484,669
47,488 531,033 484,669 - 356,228 18,524,828
$ 55,650 $ 566,949 $ 484,669 $ 4,203,302 $ 980,811 $ 28,558,844
149
CITY OF LANSING, MICHIGAN
Combining Statement of Revenues, Expenditures and Change in Fund Balances
Nonmajor Special Revenue Funds
For the Year Ended June 30, 2019
Drug Law Community
Drug Law Enforcement Development
Major Local Enforcement State and Block Grant
Streets Streets Federal Local Program
Revenues
Property taxes and special assessments $ 122,854 $ - $ - $ $ -
Intergovernmental 12,886,951 3,165,250 269,883 2,236,213
Charges for services 41,667 41,669 - -
Fines and forfeitures - - - 114,832
Interest and rents 161,359 106,663 6,964 14,180
Contributions - - - - -
Otherrevenues 179,008 - - 173,880
Total revenues 13,391,839 3,313,582 276,847 129,012 2,410,093
Expenditures
Current expenditures:
General government - - - - -
Public safety 98,715 111,626
Public works - - - -
Highways and streets 6,305,620 5,679,276 -
Community development - - 2,410,093
Debt service:
Principal 471,930 352,613 -
Interest 175,055 359,124
Capital outlay 11432,267 1,846,778 - - -
Total expenditures 81384,872 8,237,791 98,715 111,626 2,410,093
Revenues over (under) expenditures 5,006,967 (4,924,209) 178,132 17,386 -
Other financing sources (uses)
Transfers in - 4,970,000 - -
Transfers out (2,900,000) -
Issuance of long-term debt 915,750 749,250
Issuance of long-term refunding debt 1,788,962 5,149,737
Bond premium 219,490 561,180
Payment to refunding bond escrow agent (1,995,908) (5,745,455)
Total other financing sources (uses) (1,971,706) 5,684,712 - -
Net change in fund balances 3,035,261 760,503 178,132 17,386
Fund balances, beginning of year 10,457,546 1,619,779 297,514 739,289
Fund balances, end of year $ 13,492,807 $ 2,380,282 $ 475,646 $ 756,675 $
150
State and
Downtown Building Parks Federal Tri-County
Lansing, Inc. Department Department Grants Metro Totals
$ 429,654 $ $ $ - $ - $ 552,508
- 7,966,087 658,773 27,183,157
4,050 3,010,114 444,337 - 3,541,837
- - - 141,441 256,273
2,971 8,967 17,098 318,202
12,500 - - - 12,500
232,456 - - 151,151 736,495
681,631 3,010,114 8,967 8,561,575 817,312 32,600,972
834,721 2,479,081 - - - 3,313,802
- - 752,323 921,249 1,883,913
17,339 - 17,339
- 11,984,896
7,850,133 10,260,226
- 824,543
534,179
- - - - 3,279,045
834,721 2,479,081 - 8,619,795 921,249 32,097,943
(153,090) 531,033 8,967 (58,220) (103,937) 503,029
156,300 - - 58,220 5,184,520
- - (2,900,000)
1,665,000
6,938,699
780,670
- - (7,741,363)
156,300 - - 58,220 3,927,526
3,210 531,033 8,967 - (103,937) 4,430,555
44,278 - 475,702 460,165 14,094,273
$ 47,488 $ 531,033 $ 484,669 $ $ 356,228 $ 18,524,828
151
CITY OF LANSING, MICHIGAN
Schedule of Revenues, Expenditures and Change in Fund Balances
Budget and Actual - Nonmajor Special Revenue Funds
For the Year Ended June 30, 2019
Major Streets
Actual Over
Final (Under) Final
Budget Actual Budget
Revenues
Property taxes and special assessments $ - $ 122,854 $ 122,854
Intergovernmental 11,600,385 12,886,951 1,286,566
Charges for services 959,000 41,667 (917,333)
Fines and forfeitures - - -
Interest and rents 161,359 161,359
Contributions - - -
Otherrevenues 45,000 179,008 134,008
Total revenues 12,604,385 13,391,839 787,454
Expenditures
Current expenditures:
General government - - -
Public safety
Public works - -
Highways and streets 8,389,385 6,305,620 (2,083,765)
Community development - - -
Debt service:
Principal 376,200 471,930 95,730
Interest 150,000 175,055 25,055
Capital outlay 2,700,000 1,432,267 (1,267,733)
Total expenditures 11,615,585 8,384,872 (3,230,713)
Revenues over (under) expenditures 988,800 5,006,967 4,018,167
Other financing sources (uses)
Transfers in 100,000 - (100,000)
Transfers out (2,900,000) (2,900,000) -
Issuance of long-term debt 2,704,712 2,704,712
Bond premium 219,490 219,490
Payment to refunding bond escrow agent (1,995,908) 1,995,908
Total other financing sources (uses) (2,800,000) (1,971,706) 828,294
Net change in fund balances (1,811,200) 3,035,261 4,846,461
Fund balances, beginning of year 10,457,546 10,457,546 -
Fund balances, end of year $ 8,646,346 $ 13,492,807 $ 4,846,461
152
Local Streets Drug Law Enforcement Federal
Actual Over Actual Over
Final (Under) Final Final (Under) Final
Budget Actual Budget Budget Actual Budget
3,196,200 3,165,250 (30,950) 269,883 269,883
200,000 41,669 (158,331) - -
120,000 106,663 (13,337) 6,964 6,964
3,516,200 3,313,582 (202,618) 276,847 276,847
108,000 98,715 (9,285)
5,413,600 5,679,276 265,676
448,400 352,613 (95,787)
279,000 359,124 80,124
2,520,000 1,846,778 (673,222) -
8,661,000 8,237,791 (423,209) 108,000 98,715 (9,285)
(5,144,800) (4,924,209) 220,591 (108,000) 178,132 286,132
5,270,000 4,970,000 (300,000) - -
5,898,987 5,898,987
561,180 561,180
- (5,745,455) 5,745,455
5,270,000 5,684,712 414,712 - -
125,200 760,503 635,303 (108,000) 178,132 286,132
1,619,779 1,619,779 - 297,514 297,514 -
$ 1,744,979 $ 2,380,282 $ 635,303 $ 189,514 $ 475,646 $ 286,132
continued...
153
CITY OF LANSING, MICHIGAN
Schedule of Revenues, Expenditures and Change in Fund Balances
Budget and Actual - Nonmajor Special Revenue Funds
For the Year Ended June 30, 2019
Drug Law Enforcement State and Local
Actual Over
Final (Under) Final
Budget Actual Budget
Revenues
Property taxes and special assessments $ $ $
Intergovernmental
Charges for services -
Fines and forfeitures 114,832 114,832
Interest and rents 14,180 14,180
Contributions - -
Otherrevenues - -
Total revenues 129,012 129,012
Expenditures
Current expenditures:
General government - -
Public safety 523,600 111,626 (411,974)
Public works - -
Highways and streets
Community development
Debt service:
Principal
Interest
Capital outlay - -
Total expenditures 523,600 111,626 (411,974)
Revenues over (under) expenditures (523,600) 17,386 540,986
Other financing sources (uses)
Transfers in - -
Transfers out
Issuance of long-term debt
Bond premium
Payment to refunding bond escrow agent
Total other financing sources (uses) - -
Net change in fund balances (523,600) 17,386 540,986
Fund balances, beginning of year 739,289 739,289 -
Fund balances, end of year $ 215,689 $ 756,675 $ 540,986
154
Community Development Block Grant Program Downtown Lansing, Inc.
Actual Over Actual Over
Final (Under) Final Final (Under) Final
Budget Actual Budget Budget Actual Budget
$ $ $ $ 420,400 $ 429,654 $ 9,254
2,850,968 2,236,213 (614,755) - - -
- - 5,250 4,050 (1,200)
- 2,971 2,971
- - 10,000 12,500 2,500
- 173,880 173,880 285,025 232,456 (52,569)
2,850,968 2,410,093 (440,875) 720,675 681,631 (39,044)
- - 891,500 834,721 (56,779)
3,003,498 2,410,093 (593,405)
3,003,498 2,410,093 (593,405) 891,500 834,721 (56,779)
(152,530) - 152,530 (170,825) (153,090) 17,735
152,530 (152,530) 156,300 156,300 -
152,530 (152,530) 156,300 156,300 -
- (14,525) 3,210 17,735
44,278 44,278 -
$ $ $ $ 29,753 $ 47,488 $ 17,735
continued...
155
CITY OF LANSING, MICHIGAN
Schedule of Revenues, Expenditures and Change in Fund Balances
Budget and Actual - Nonmajor Special Revenue Funds
For the Year Ended June 30, 2019
Building Department
Actual Over
Final (Under) Final
Budget Actual Budget
Revenues
Property taxes and special assessments $ $ $
Intergovernmental
Charges for services 2,595,000 3,010,114 415,114
Fines and forfeitures - - -
Interest and rents
Contributions
Otherrevenues - - -
Total revenues 2,595,000 3,010,114 415,114
Expenditures
Current expenditures:
General government 2,570,000 2,479,081 (90,919)
Public safety - -
Public works
Highways and streets
Community development
Debt service:
Principal
Interest
Capital outlay - -
Total expenditures 2,570,000 2,479,081 (90,919)
Revenues over (under) expenditures 25,000 531,033 506,033
Other financing sources (uses)
Transfers in - - -
Transfers out
Issuance of long-term debt
Bond premium
Payment to refunding bond escrow agent
Total other financing sources (uses) - - -
Net change in fund balances 25,000 531,033 506,033
Fund balances, beginning of year - - -
Fund balances, end of year $ 25,000 $ 531,033 $ 506,033
156
Parks Department State and Federal Grants
Actual Over Actual Over
Final (Under) Final Final (Under) Final
Budget Actual Budget Budget Actual Budget
11,076,098 7,966,087 (3,110,011)
- 444,337 444,337
8,967 8,967
- - 854,613 151,151 (703,462)
8,967 8,967 11,930,711 8,561,575 (3,369,136)
779,849 752,323 (27,526)
- 17,339 17,339
10,890,957 7,850,133 (3,040,824)
- - 11,670,805 8,619,795 (3,051,010)
8,967 8,967 259,905 (58,220) (318,125)
- - 84,940 58,220 (26,720)
- - 84,940 58,220 (26,720)
- 8,967 8,967 344,845 - (344,845)
475,702 475,702 - -
$ 475,702 $ 484,669 $ 8,967 $ 344,845 $ (344,845)
continued...
157
CITY OF LANSING, MICHIGAN
Schedule of Revenues, Expenditures and Change in Fund Balances
Budget and Actual - Nonmajor Special Revenue Funds
For the Year Ended June 30, 2019
Tri-County Metro
Actual Over
Final (Under) Final
Budget Actual Budget
Revenues
Property taxes and special assessments $ - $ - $
Intergovernmental 560,220 658,773 98,553
Charges for services - - -
Fines and forfeitures 428,220 141,441 (286,779)
Interest and rents - 17,098 17,098
Contributions - -
Otherrevenues - -
Total revenues 988,440 817,312 (171,128)
Expenditures
Current expenditures:
General government - -
Public safety 988,440 921,249 (67,191)
Public works - -
Highways and streets
Community development
Debt service:
Principal
Interest
Capital outlay - -
Total expenditures 988,440 921,249 (67,191)
Revenues over (under) expenditures - (103,937) (103,937)
Other financing sources (uses)
Transfers in
Transfers out
Issuance of long-term debt
Bond premium
Payment to refunding bond escrow agent
Total other financing sources (uses)
Net change in fund balances - (103,937) (103,937)
Fund balances, beginning of year 460,165 460,165
Fund balances, end of year $ 460,165 $ 356,228 $ (103,937)
158
Totals
Actual Over
Final (Under) Final
Budget Actual Budget
$ 420,400 $ 552,508 $ 132,108
29,283,871 27,183,157 (2,100,714)
3,759,250 3,541,837 (217,413)
428,220 256,273 (171,947)
120,000 318,202 198,202
10,000 12,500 2,500
1,184,638 736,495 (448,143)
35,206,379 32,600,972 (2,605,407)
3,461,500 3,313,802 (147,698)
2,399,889 1,883,913 (515,976)
- 17,339 17,339
13,802,985 11,984,896 (1,818,089)
13,894,455 10,260,226 (3,634,229)
824,600 824,543 (57)
429,000 534,179 105,179
5,220,000 3,279,045 (1,940,955)
40,032,428 32,097,943 (7,934,485)
(4,826,050) 503,029 5,329,079
5,763,770 5,184,520 (579,250)
(2,900,000) (2,900,000) -
8,603,699 8,603,699
780,670 780,670
(7,741,363) (7,741,363)
2,863,770 3,927,526 1,063,756
(1,962,280) 4,430,555 6,392,835
14,094,273 14,094,273 -
$ 12,131,993 $ 18,524,828 $ 6,392,835
concluded
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160
CITY OF LANSING, MICHIGAN
Nonmajor Debt Service Funds
1999 Fire Station Fund - This fund accounts for the accumulation of resources for payment of the
1999 $3,000,000 Unlimited Tax General Obligation Bonds (which was refunding in 2007 in the
amount of $1,780,000).
2001 Fire Station Fund - This fund accounts for the accumulation of resources for the payment of
the 2001 $4,000,000 Unlimited Tax General Obligation Bonds (which was refunding in 2010 in the
amount of $2,470,000).
161
CITY OF LANSING, MICHIGAN
Combining Balance Sheet
Nonmajor Debt Service Funds
June 30, 2019
1999 2001
Fire Fire
Station Station Totals
Assets
Equity in pooled cash and investments $ 30,111 $ $ 30,111
Fund balances
Restricted $ 30,111 $ $ 30,111
162
CITY OF LANSING, MICHIGAN
Combining Statement of Revenues, Expenditures and Change in Fund Balances
Nonmajor Debt Service Funds
For the Year Ended June 30, 2019
1999 2001
Fire Fire
Station Station Totals
Revenues
Taxes and special assessments $ 232,911 $ 312,833 $ 545,744
Expenditures
Debt service:
Principal 195,000 305,000 500,000
Interest 7,800 9,583 17,383
Total expenditures 202,800 314,583 517,383
Revenues over (under) expenditures 30,111 (1,750) 28,361
Other financing sources
Transfers in - 750 750
Net change in fund balances 30,111 (1,000) 29,111
Fund balances, beginning of year - 1,000 1,000
Fund balances, end of year $ 30,111 $ - $ 30,111
163
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164
CITY OF LANSING, MICHIGAN
Nonmajor Capital Projects Funds
Special Assessments Fund - This fund is used to account for the financing of public improvements
deemed to benefit the properties against which special assessments are levied.
Other Capital Projects Fund - This fund accounts for accounts for miscellaneous capital projects.
165
CITY OF LANSING, MICHIGAN
Combining Balance Sheet
Nonmajor Capital Projects Funds
June 30, 2019
Other
Special Capital
Assessments Projects Totals
Assets
Cash and cash equivalents $ $ 89,710 $ 89,710
Equity in pooled cash and
investments 8,664,141 8,664,141
Accounts receivable, net 116,032 116,032
Special assessments receivable:
Current 34,757 - 34,757
Deferred 156,444 - 156,444
Total assets $ 191,201 $ 8,869,883 $ 9,061,084
Liabilities
Accounts payable $ - $ 200,196 $ 200,196
Advance from other funds 150,303 - 150,303
Total liabilities 150,303 200,196 350,499
Deferred inflows of resources
Unavailable revenues -
special assessments 156,444 - 156,444
Fund balances
Restricted - 6,368 6,368
Committed 8,663,319 8,663,319
Unassigned (deficit) (115,546) - (115,546)
Total fund balances (115,546) 8,669,687 8,554,141
Total liabilities, deferred inflows of
resources and fund balances $ 191,201 $ 8,869,883 $ 9,061,084
166
CITY OF LANSING, MICHIGAN
Combining Statement of Revenues, Expenditures and Change in Fund Balances
Nonmajor Capital Projects Funds
For the Year Ended June 30, 2019
Other
Special Capital
Assessments Projects Totals
Revenues
Special assessments $ 39,715 $ - $ 39,715
Charges for services - 2,669,488 2,669,488
Interest and rents - 43,380 43,380
Total revenues 39,715 2,712,868 2,752,583
Expenditures
Capital outlay - 1,519,025 1,519,025
Revenues over expenditures 39,715 1,193,843 1,233,558
Other financing sources (uses)
Transfers in - 3,431,250 3,431,250
Transfers out (711,897) (711,897)
Total other financing sources (uses) - 2,719,353 2,719,353
Net change in fund balances 39,715 3,913,196 3,952,911
Fund balances (deficit), beginning of year (155,261) 4,756,491 4,601,230
Fund balances (deficit), end of year $ (115,546) $ 8,669,687 $ 8,554,141
167
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168
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.
169
CITY OF LANSING, MICHIGAN
Combining Balance Sheet
Nonmajor Permanent Funds
June 30, 2019
Cemetery
Perpetual Parks
Care Trust Totals
Assets
Equity in pooled cash and investments $ 1,912,874 $ 1,292 $ 1,914,166
Fund balances
Nonspendable $ 1,912,874 $ 1,292 $ 1,914,166
170
CITY OF LANSING, MICHIGAN
Combining Statement of Revenues, Expenditures and Change in Fund Balances
Nonmajor Permanent Funds
For the Year Ended June 30, 2019
Cemetery
Perpetual Parks
Care Trust Totals
Revenues
Interest and rents $ 43,862 $ 24 $ 43,886
Other financing sources
Transfers in 32,776 - 32,776
Net change in fund balances 76,638 24 76,662
Fund balances, beginning of year 1,836,236 1,268 1,837,504
Fund balances, end of year $ 1,912,874 $ 1,292 $ 1,914,166
171
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172
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.
173
CITY OF LANSING, MICHIGAN
Combining Statement of Net Position
Nonmajor Enterprise Funds
June 30, 2019
Garbage and
Rubbish
Cemetery Golf Collection Recycling Totals
Assets
Current assets:
Cash and cash equivalents $ 200 $ $ 23,368 $ - $ 23,568
Equity in pooled cash and investments 197,685 531,795 1,165,009 1,894,489
Accounts receivable, net - 163,954 6,374 170,328
Inventories 52,493 - - 52,493
Total current assets 250,378 719,117 1,171,383 2,140,878
Noncurrent assets:
Capital assets not being depreciated 57,740 446,501 - - 504,241
Capital assets being depreciated, net 87,224 1,818,276 150,507 2,056,007
Total noncurrent assets 144,964 2,264,777 - 150,507 2,560,248
Total assets 395,342 2,264,777 719,117 1,321,890 4,701,126
Deferred outflows of resources
Deferred pension amounts 50,503 - 101,006 151,509 303,018
Deferred other postemployment
benefit amounts 18,513 39,003 91,466 148,982
Total deferred outflows of resources 69,016 140,009 242,975 452,000
Liabilities
Current liabilities:
Accounts payable 22,671 56,289 102,396 181,356
Accrued interest payable - - 2,857 2,857
Accrued payroll 1,845 - - 1,845
Unearned revenues - 160,119 - 160,119
Current portion of:
Bonds and notes payable - - 230,023 230,023
Compensated absences 1,657 3,487 8,177 13,321
Total current liabilities 26,173 219,895 343,453 589,521
Noncurrent liabilities:
Bonds and notes payable, net
of current portion - - 352,897 352,897
Compensated absences, net
of current portion 22,066 46,444 108,906 177,416
Net pension liability 1,381,457 2,762,902 4,144,352 8,288,711
Net other postemployment benefit liability 1,157,379 2,438,395 5,718,209 9,313,983
Total noncurrent liabilities 2,560,902 5,247,741 10,324,364 18,133,007
Total liabilities 2,587,075 5,467,636 10,667,817 18,722,528
Deferred inflows of resources
Deferred pension amounts 17,065 34,130 51,195 102,390
Net position
Net investment in capital assets 144,964 2,264,777 - (432,413) 1,977,328
Unrestricted(deficit) (2,284,746) - (4,642,640) (8,721,734) (15,649,120)
Total net position $ (2,139,782) $ 2,264,777 $ (4,642,640) $ (9,154,147) $ (13,671,792)
174
CITY OF LANSING, MICHIGAN
Combining Statement of Revenues, Expenses and Changes in Fund Net Position
Nonmajor Enterprise Funds
For the Year Ended June 30, 2019
Garbage and
Rubbish
Cemetery Golf Collection Recycling Totals
Operating revenues
Charges for services $ 415,757 $ - $ 2,243,627 $ 4,081,700 $ 6,741,084
Operating expenses
Personnel services 176,128 8,081 168,869 1,608,187 1,961,265
Purchase of goods and services 284,265 193,229 866,393 1,718,493 3,062,380
Depreciation 9,827 77,191 - 301,012 388,030
Total operating expenses 470,220 278,501 1,035,262 3,627,692 5,411,675
Operating income(loss) (54,463) (278,501) 1,208,365 454,008 1,329,409
Nonoperating revenues(expenses)
Interest revenue 13,786 37,180 50,966
Interest expense and fees - (14,586) (14,586)
Capital contribution to others - (214,486) (214,486)
Total nonoperating revenues(expenses) 13,786 (191,892) (178,106)
Income(loss)before transfers (54,463) (278,501) 1,222,151 262,116 1,151,303
Transfers
Transfers in 486,850 126,743 - - 613,593
Transfers out (32,776) - (32,776)
Total transfers 454,074 126,743 - - 580,817
Change in net position 399,611 (151,758) 1,222,151 262,116 1,732,120
Net position, beginning of year (2,539,393) 2,416,535 (5,864,791) (9,416,263) (15,403,912)
Net position,end of year $ (2,139,782) $ 2,264,777 $ (4,642,640) $ (9,154,147) $ (13,671,792)
175
CITY OF LANSING, MICHIGAN
Combining Statement of Cash Flows
Nonmajor Enterprise Funds
For the Year Ended June 30, 2019
Garbage and
Rubbish
Cemetery Golf Collection Recycling Totals
Cash flows from operating activities
Cash received from customers $ 415,757 $ - $ 2,185,037 $ 4,084,189 $ 6,684,983
Cash payments for goods and services (311,653) (193,229) (832,068) (1,662,336) (2,999,286)
Cash payments to employees (422,636) (8,081) (969,246) (2,033,995) (3,433,958)
Net cash provided by(used in)operating activities (318,532) (201,310) 383,723 387,858 251,739
Cash flows from noncapital
financing activities
Transfers in 486,850 126,743 - - 613,593
Transfers out (32,776) - (32,776)
Net cash provided by noncapital financing activities 454,074 126,743 580,817
Cash flows from capital and related
financing activities
Capital contributions to others - - (214,486) (214,486)
Principal paid on long-term debt (225,580) (225,580)
Interest paid on long-term debt (15,691) (15,691)
Net cash used in capital and related financing activities - (455,757) (455,757)
Cash flows from investing activities
Interest and dividends received - 13,786 37,180 50,966
Net change in cash and cash equivalents 135,542 (74,567) 397,509 (30,719) 427,765
Cash and cash equivalents, beginning of year 62,343 74,567 157,654 1,195,728 1,490,292
Cash and cash equivalents,end of year $ 197,885 $ - $ 555,163 $ 1,165,009 $ 1,918,057
Reconciliation to statement of net position
Cash and cash equivalents $ 200 $ $ 23,368 $ - $ 23,568
Equity in pooled cash and investments 197,685 531,795 1,165,009 1,894,489
$ 197,885 $ $ 555,163 $ 1,165,009 $ 1,918,057
continued...
176
CITY OF LANSING, MICHIGAN
Combining Statement of Cash Flows
Nonmajor Enterprise Funds
For the Year Ended June 30, 2019
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) $ (54,463) $ (278,501) $ 1,208,365 $ 454,008 $ 1,329,409
Adjustments to reconcile operating
income(loss)to net cash provided by
(used in)operating activities:
Depreciation 9,827 77,191 301,012 388,030
Changesin:
Accounts receivable - - (47,454) 2,489 (44,965)
Deferred outflows-pension 45,912 110,877 111,182 267,971
Deferred outflows-OPEB (18,513) (39,003) (91,466) (148,982)
Accounts payable (27,388) 34,325 56,157 63,094
Accrued payroll 22 - - 22
Unearned revenues - (11,136) - (11,136)
Compensated absences 952 2,004 4,699 7,655
Net pension liability (212,599) (740,241) (198,828) (1,151,668)
Deferred inflows-pension (20,478) (48,376) (51,095) (119,949)
Net other postemployment
benefit liability 2,623 7,873 18,970 29,466
Deferred inflows-OPEB (44,427) (93,511) (219,270) (357,208)
Net cash provided by(used in)operating activities $ (318,532) $ (201,310) $ 383,723 $ 387,858 $ 251,739
concluded
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178
CITY OF LANSING, MICHIGAN
Internal Service Funds
Fleet Maintenance Fund - This fund accounts for the costs of maintaining the City's fleet of
vehicles and heavy equipment.
Fringe Benefits Fund - This fund accounts for the costs of the City's fringe benefits.
Engineering Fund - This fund accounts for the operations of the City's engineering department.
Information Technology Fund - This fund accounts for the operations of the City's information
technology department.
179
CITY OF LANSING, MICHIGAN
Combining Statement of Net Position
Internal Service Funds
June 30, 2019
Fleet Fringe Information
Maintenance Benefits Engineering Technology Totals
Assets
Current assets:
Equity in pooled cash and investments $ 1,614,969 $ 2,971,528 $ 974,132 $ 1,876,618 $ 7,437,247
Accounts receivable, net 3,075 8,265 - - 11,340
Inventories 352,259 - - 352,259
Prepaids 36,675 399,276 - 199,039 634,990
Total current assets 2,006,978 3,379,069 974,132 2,075,657 8,435,836
Noncurrent assets:
Capital assets not being
depreciated 92,892 - - - 92,892
Capital assets being depreciated,
net 9,773,085 1,475,229 11,248,314
Total noncurrent assets 9,865,977 - 1,475,229 - 11,341,206
Total assets 11,872,955 3,379,069 2,449,361 2,075,657 19,777,042
Liabilities
Current liabilities:
Accounts payable 113,088 1,585,286 18,261 837,220 2,553,855
Accrued interest payable 17,147 - - - 17,147
Accrued payroll 56,384 14,673 61,903 26,277 159,237
Claims incurred but not reported - 750,000 - - 750,000
Current portion of:
Bonds and notes payable 370,290 - - - 370,290
Compensated absences 27,449 - 15,680 40,675 83,804
Total current liabilities 584,358 2,349,959 95,844 904,172 3,934,333
Noncurrent liabilities:
Bonds and notes payable,
net of current portion 2,301,746 - - - 2,301,746
Compensated absences,
net of current portion 158,903 56,368 434,620 113,371 763,262
Total noncurrent liabilities 2,460,649 56,368 434,620 113,371 3,065,008
Total liabilities 3,045,007 2,406,327 530,464 1,017,543 6,999,341
Net position
Net investment in capital assets 7,193,941 - 1,475,229 - 8,669,170
Unrestricted 1,634,007 972,742 443,668 1,058,114 4,108,531
Total net position $ 8,827,948 $ 972,742 $ 1,918,897 $ 1,058,114 $ 12,777,701
180
CITY OF LANSING, MICHIGAN
Combining Statement of Revenues, Expenses and Changes in Fund Net Position
Internal Service Funds
For the Year Ended June 30, 2019
Fleet Fringe Information
Maintenance Benefits Engineering Technology Totals
Operating revenues
Charges for services $ 9,535,609 $ 65,446,303 $ 4,415,600 $ 6,000,000 $ 85,397,512
Operating expenses
Personnel services 3,468,526 301,305 3,107,992 1,766,287 8,644,110
Purchase of goods and services 4,760,140 65,163,137 1,046,270 3,803,591 74,773,138
Depreciation 2,135,087 - 45,650 - 2,180,737
Total operating expenses 10,363,753 65,464,442 4,199,912 5,569,878 85,597,985
Operating income (loss) (828,144) (18,139) 215,688 430,122 (200,473)
Nonoperating revenues (expenses)
Gain on sale of capital assets 64,820 - - 64,820
Interest expense and fees (174,413) (174,413)
Total nonoperating revenues
(expenses) (109,593) - - (109,593)
Change in net position (937,737) (18,139) 215,688 430,122 (310,066)
Net position, beginning of year 9,765,685 990,881 1,703,209 627,992 13,087,767
Net position, end of year $ 8,827,948 $ 972,742 $ 1,918,897 $ 1,058,114 $ 12,777,701
181
CITY OF LANSING, MICHIGAN
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2019
Fleet Fringe Information
Maintenance Benefits Engineering Technology Totals
Cash flows from operating activities
Cash received from interfund
services $ 9,568,055 $ 65,954,559 $ 4,415,600 $ 6,000,000 $ 85,938,214
Cash payments for goods
and services (4,800,282) (64,270,447) (1,028,114) (4,033,293) (74,132,136)
Cash payments to employees (3,450,495) (446,769) (3,089,486) (1,790,525) (8,777,275)
Net cash provided by operating activities 1,317,278 1,237,343 298,000 176,182 3,028,803
Cash flows from capital and related
financing activities
Proceeds from sale of capital assets 77,416 - - - 77,416
Acquisition and construction of
capital assets (1,318,930) (1,318,930)
Principal paid on long-term debt (361,324) (361,324)
Interest paid on long-term debt (174,669) (174,669)
Net cash used in capital and related
financing activities (1,777,507) - - - (1,777,507)
Net change in cash and cash equivalents (460,229) 1,237,343 298,000 176,182 1,251,296
Cash and cash equivalents,
beginning of year 2,075,198 1,734,185 676,132 1,700,436 6,185,951
Cash and cash equivalents,
end of year $ 1,614,969 $ 2,971,528 $ 974,132 $ 1,876,618 $ 7,437,247
continued...
182
CITY OF LANSING, MICHIGAN
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2019
Fleet Fringe Information
Maintenance Benefits Engineering Technology Totals
Reconciliation of operating income (loss)
to net cash provided by
operating activities
Operating income (loss) $ (828,144) $ (18,139) $ 215,688 $ 430,122 $ (200,473)
Adjustments to reconcile operating
income (loss) to net cash provided
by operating activities:
Depreciation 2,135,087 - 45,650 2,180,737
Change in:
Accounts receivable 32,446 508,256 - 540,702
Inventories (10,114) - (10,114)
Prepaids (36,675) (54,319) - (199,039) (290,033)
Accounts payable 6,647 947,009 18,156 (30,663) 941,149
Accrued payroll (969) 5,534 7,450 (2,208) 9,807
Claims incurred but not reported
reported - (150,000) - (150,000)
Compensated absences 19,000 (998) 11,056 (22,030) 7,028
Net cash provided by operating activities $ 1,317,278 $ 1,237,343 $ 298,000 $ 176,182 $ 3,028,803
concluded
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184
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.
185
CITY OF LANSING, MICHIGAN
Combining Statement of Fiduciary Assets and Liabilities
Agency Funds
June 30, 2019
54-A District Court
Garnishment,
Bail Indemnity Bond
Bonds and Restitution Totals
Assets
Equity in pooled cash and investments $ 71,204 $ 5,614 $ 76,818
Liabilities
Undistributed receipts $ 71,204 $ 5,614 $ 76,818
186
CITY OF LANSING, MICHIGAN
Combining Statement of Changes in Fiduciary Assets and Liabilities
Agency Funds
For the Year Ended June 30, 2019
Beginning Ending
Balance Additions Deletions Balance
54-A District Court - Bail Bonds
Assets
Equity in pooled cash and investments $ 75,812 $ 596,314 $ 600,922 $ 71,204
Liabilities
Undistributed receipts $ 75,812 $ 596,314 $ 600,922 $ 71,204
54-A District Court - Garnishment,
Indemnity Bond and Restitution
Assets
Equity in pooled cash and investments $ 8,796 $ 148,727 $ 151,909 $ 5,614
Liabilities
Undistributed receipts $ 8,796 $ 148,727 $ 151,909 $ 5,614
Total - all agency funds
Assets
Equity in pooled cash and investments $ 84,608 $ 745,041 $ 752,831 $ 76,818
Liabilities
Undistributed receipts $ 84,608 $ 745,041 $ 752,831 $ 76,818
187
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188
STATISTICAL SECTION
189
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190
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
(Tables 1-4) understand how the City's financial performance and well-being
have changed over time. 193
Revenue Capacity These schedules contain information to help the reader assess
(Tables 5-8) the factors affecting the City's ability to generate its property
taxes. 198
Debt Capacity These schedules present information to help the reader assess
(Tables 9-13) the affordability of the City's current levels of outstanding debt
and the City's ability to issue additional debt in the future. 202
Demographic and These schedules offer demographic and economic indicators to
Economic Information help the reader understand the environment within which the
(Tables 14-15) City's financial activities take place and to help make
comparisons over time and with other governments. 207
Operating Information These schedules contain information about the City's operations
(Tables 16-18) 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. 210
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive
annual financial reports for the relevant year.
191
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192
CITY OF LANSING, MICHIGAN Table 1 -Unaudited
Net Position by Component
Last Ten Fiscal Years
-L 20�IL 201M - 20150) E E 201M W 2013 M-IL 201M-
Governmental activities
Net investment in capital assets $ 146,153,309 $ 148,263,240 $ 149,533,948 $ 149,676,860 $ 151,785,916 $ 150,976,010 $ 154,372,604 $ 163,723,249 $ 180,571,237 $ 186,536,428
Restricted 23,505,738 15,189,723 10,993,950 12,922,525 12,311,541 13,133,137 12,552,011 14,524,584 14,777,571 14,304,689
Unrestricted(deficit) (629,587,773) (606,529,375) (276,790,945) (265,678,371) (251,453,207) (46,344,555) (39,467,672) (34,371,855) (18,840,717) (7,649,432)
Total governmental activities net position $(459,928,726) $(443,076,412) $(116,263,047) $(103,078,986) $ (87,355,750) $ 117,764,592 $ 127,456,943 $ 143,875,978 $ 176,508,091 $ 193,191,685
Business-type activities
Net investment in capital assets $ 233,988,263 $ 227,127,434 $ 224,161,744 $ 220,436,882 $ 218,813,478 $ 214,458,841 $ 212,682,278 $ 209,584,457 $ 204,149,751 $ 194,854,140
Restricted 1,953,175 1,886,620 1,818,671 2,764,963 2,889,096 8,746,096 11,077,134 12,382,060 13,080,302 19,917,341
Unrestricted(deficit) (7,299,147) (13,854,833) 25,415,447 19,401,320 17,242,167 37,891,053 31,943,581 32,196,598 34,177,453 30,193,568
Total business-type activities net position $ 228,642,291 $ 215,159,221 $ 251,395,862 $ 242,603,165 $ 238,944,741 $ 261,095,990 $ 255,702,993 $ 254,163,115 $ 251,407,506 $ 244,965,049
Primary government
Net investment in capital assets $ 380,141,572 $ 375,390,674 $ 373,695,692 $ 370,113,742 $ 370,599,394 $ 365,434,851 $ 367,054,882 $ 373,307,706 $ 384,720,988 $ 381,390,568
Restricted 25,458,913 17,076,343 12,812,621 15,687,488 15,200,637 21,879,233 23,629,145 26,906,644 27,857,873 34,222,030
Unrestricted(deficit) (636,886,920) (620,384,208) (251,375,498) (246,277,051) (234,211,040) (8,453,502) (7,524,091) (2,175,257) 15,336,736 22,544,136
Total primary government net position $(231,286,435) $(227,917,191) $ 135,132,815 $ 139,524,179 $ 151,588,991 $ 378,860,582 $ 383,159,936 $ 398,039,093 $ 427,915,597 $ 438,156,734
Note:No discretely presented component units shown
(1)GASB Statement No.68 was implemented for the fiscal year ended June 30,2015.This resulted in presentation of the City's net pension liability on the statement of net position.Prior years were not restated.
(2)GASB Statement No.75 was implemented for the fiscal year ended June 30,2018.This resulted in presentation of the City's net OPEB liability on the statement of net position.Prior years were not restated.
193
CITY OF LANSING, MICHIGAN Table 2-Unaudited
Change in Net Position
Last Ten Fiscal Years
-` 2018 i--- 2013 ---
Expenses
Governmental activities:
General government $ 26,679,840 $ 16,995,976 $ 21,778,154 $ 27,993,414 $ 25,225,893 $ 24,771,054 $ 27,438,065 $ 30,841,776 $ 25,665,269 $ 30,326,671
Public safety 97,391,612 87,352,251 91,829,441 85,739,408 81,827,437 78,142,897 77,133,469 82,369,004 83,546,997 84,566,215
Public works 29,644,398 26,485,877 28,983,891 28,212,049 27,815,970 37,243,516 29,984,955 33,144,303 26,355,375 29,252,516
Recreation and culture 7,650,889 8,302,243 9,441,519 10,336,168 6,515,590 8,670,918 7,713,098 8,889,142 8,245,451 7,312,480
Community development 21,046,090 16,150,417 12,349,663 10,642,102 10,270,404 7,602,229 16,939,572 13,623,946 12,825,028 9,715,087
Interest on long-term debt 1,182,488 1,137,561 1,201,846 1,424,215 1,291,846 1,340,818 1,475,051 1,949,825 2,116,535 2,229,288
Total governmental activities expenses 183,595,317 156,424,325 165,584,514 164,347,356 152,947,140 157,771,432 160,684,210 170,817,996 158,754,655 163,402,257
Business-type activities:
Sewage disposal system 31,939,976 28,552,143 27,567,228 28,487,957 27,506,843 28,682,809 26,298,964 26,836,597 26,444,741 24,931,075
Municipal parking system 7,081,998 9,888,246 6,866,747 7,651,077 7,605,461 7,851,702 8,108,373 9,491,376 9,896,498 8,305,095
Cemetery 470,220 1,379,877 886,579 708,545 632,485 722,270 633,050 639,000 755,766 659,584
Golf 278,501 (372,775) 802,564 845,575 852,634 935,671 892,117 810,372 846,817 869,003
Garbage and rubbish collection 1,035,262 3,101,893 1,543,380 2,085,728 1,712,671 1,722,843 1,557,708 1,558,024 1,515,600 1,451,059
Recycling 3,856,764 3,859,496 3,667,899 4,092,278 3,623,276 3,263,553 3,650,292 3,041,328 2,809,353 2,804,047
Total business-type activities expenses 44,662,721 46,408,880 41,334,397 43,871,160 41,933,370 43,178,848 41,140,504 42,376,697 42,268,775 39,019,863
Total primary government expenses 228,258,038 202,833,205 206,918,911 208,218,516 194,880,510 200,950,280 201,824,714 213,194,693 201,023,430 202,422,120
Program revenues
Governmental activities:
Charges for services:
General government 7,567,720 7,038,702 7,295,556 7,279,427 6,815,975 6,820,261 6,162,713 6,428,110 6,742,306 6,565,263
Public safety 3,935,250 4,140,682 3,476,966 2,909,054 3,344,183 2,122,023 4,083,222 8,525,524 8,975,173 8,589,146
Public works 2,978,549 716,322 1,836,466 3,011,894 1,923,303 2,129,126 1,622,738 2,797,443 2,449,606 2,788,112
Recreation and culture 1,092,232 831,816 617,604 673,840 619,834 800,293 594,349 557,609 685,120 587,906
Community development - - 67,312 67,272 67,264 67,323 67,349 67,344 122,326 69,250
Operating grants and contributions 29,663,253 28,983,936 25,157,629 24,561,960 24,658,955 28,234,803 29,322,435 31,928,983 30,154,681 27,515,892
Capital grants and contributions 3,313,872 855,760 63,488 904,298 2,910,660 3,365,682 3,124,288 260,656 189,414 3,109,410
Total governmental activities program revenues 48,550,876 42,567,218 38,515,021 39,407,745 40,340,174 43,539,511 44,977,094 50,565,669 49,318,626 49,224,979
Business-type activities:
Charges for services:
Sewage disposal system 35,752,812 35,107,570 34,755,896 32,368,491 31,730,416 31,759,698 30,825,174 29,915,799 29,205,945 28,907,772
Municipal parking system 8,422,161 7,436,552 6,906,091 7,090,335 6,988,879 7,453,476 5,267,627 6,858,606 7,539,179 7,396,219
Cemetery 415,757 351,204 403,663 312,929 335,379 289,565 314,913 240,394 225,947 226,973
Golf - 179,464 256,218 313,164 363,559 366,567 373,000 390,134 382,546 438,315
Garbage and rubbish collection 2,243,627 2,072,454 1,952,897 1,871,665 1,744,999 1,664,201 1,131,659 1,459,101 1,507,577 1,677,428
Recycling 4,081,700 3,779,468 3,614,794 3,627,070 3,624,671 3,508,536 3,434,622 2,818,364 2,609,423 2,651,309
Operating grants and contributions 6,648,917 1,603,942 1,391,326 1,312,362 1,143,085 2,574,949 1,193,571 1,331,737 4,456,708 1,535,907
Capital grants and contributions - - 100,000 - - - - 2,683,657 1,439,044 11,928,108
Total business-type activities program revenues 57,564,974 50,530,654 49,380,885 46,896,016 45,930,988 47,616,992 42,540,566 45,697,792 47,366,369 54,762,031
Total primary government program revenues 106,115,850 93,097,872 87,895,906 86,303,761 86,271,162 91,156,503 87,517,660 96,263,461 96,684,995 103,987,010
Net(expenses)revenues
Governmental activities (135,044,441) (113,857,107) (127,069,493) (124,939,611) (112,606,966) (114,231,921) (115,707,116) (120,252,327) (109,436,029) (114,177,278)
Business-type activities 12,902,253 4,121,774 8,046,488 3,024,856 3,997,618 4,438,144 1,400,062 3,321,095 5,097,594 15,742,168
Total primary government net expense (122,142,188) (109,735,333) (119,023,005) (121,914,755) (108,609,348) (109,793,777) (114,307,054) (116,931,232) (104,338,435) (98,435,110)
continued...
194
CITY OF LANSING, MICHIGAN
Change in Net Position -
Last Ten Fiscal Years
2018 2013
General revenues and other changes in net position
Governmental activities:
Taxes:
Property taxes $ 41,692,930 $ 39,573,468 $ 40,568,278 $ 38,578,548 $ 39,657,382 $ 38,079,548 $ 38,668,837 $ 33,506,860 $ 37,233,590 $ 39,010,960
Income taxes 37,021,436 38,455,296 35,694,010 34,573,130 31,660,923 31,450,913 29,850,755 27,943,070 28,699,749 27,408,443
Unrestricted grants and contributions 39,530,073 39,419,658 38,108,544 36,532,275 36,330,976 35,677,910 31,425,718 26,441,961 27,254,574 25,847,423
Investment earnings 463,685 216,239 125,539 99,058 26,353 36,836 58,588 69,265 89,735 246,495
Miscellaneous 64,820 - 135,270 63,079 280,280 - - 123,066 108,601 75,094
Transfers (580,817) (912,186) (746,209) (629,715) (644,485) (705,637) (583,117) (464,008) (633,814) (464,807)
Total governmental activities 118,192,127 116,752,475 113,885,432 109,216,375 107,311,429 104,539,570 99,420,781 87,620,214 92,752,435 92,123,608
Business-type activities:
Investment earnings - - - - 17,874 246,616 356,467 271,067 689,883 141,899
Miscellaneous - - - 3,853 - 2,600 - (1,300,561) 21,166 -
Transfers 580,817 912,186 746,209 629,715 644,485 705,637 583,117 464,008 633,814 464,807
Total business-type activities 580,817 912,186 746,209 633,568 662,359 954,853 939,584 (565,486) 1,344,863 606,706
Total primary government 118,772,944 117,664,661 114,631,641 109,849,943 107,973,788 105,494,423 100,360,365 87,054,728 94,097,298 92,730,314
Changes in net position
Governmental activities (16,852,314) 2,895,368 (13,184,061) (15,723,236) (5,295,537) (9,692,351) (16,286,335) (32,632,113) (16,683,594) (22,053,670)
Business-type activities 13,483,070 5,033,960 8,792,697 3,658,424 4,659,977 5,392,997 2,339,646 2,755,609 6,442,457 16,348,874
Total primary government $ (3,369,244) $ 7,929,328 $ (4,391,364) $ (12,064,812) $ (635,560) $ (4,299,354) $ (13,946,689) $ (29,876,504) $ (10,241,137) $ (5,704,796)
concluded
195
CITY OF LANSING, MICHIGAN Table 3-Unaudited
Fund Balances,governmental Funds -
Last Ten Fiscal Years
--E 2016 - ---L 20�it 2011 (1) 1
General fund
Nonspendable $ 38,605 $ 39,437 $ 28,342 $ 492,549 $ 35,424 $ 75,738 $ 75,738 $ 92,538 $ 171,586 $
Restricted - - - - 10,044 9,400 9,400 16,256 41,129
Committed - 283,815 385,067 428,106 837,761 2,976,408 2,976,408 65,373 178,081
Unassigned 9,992,885 17,003,260 15,283,857 12,407,748 9,783,911 5,633,528 5,633,528 5,198,032 4,939,691
Reserved - - - - - - - - - 102,732
Unreserved - - - - - - 389,061
Total general fund 10,031,490 17,326,512 15,697,266 13,328,403 10,667,140 8,695,074 8,695,074 5,372,199 5,330,487 491,793
All other governmental funds
Nonspendable 2,952,027 2,842,489 2,618,884 2,578,331 2,619,065 2,671,151 2,671,151 2,852,004 3,006,507 -
Restricted 17,038,777 9,009,438 4,730,012 6,934,665 6,865,580 4,368,983 4,368,983 5,566,421 7,412,008
Committed 9,147,988 8,837,341 10,426,961 8,427,253 7,110,485 4,035,145 4,035,145 4,109,131 4,908,740
Unassigned(deficit) (115,546) (155,261) (411,098) (410,252) (528,144) (619,931) (619,931) (543,774) (371,285) -
Reserved 1,177,998
Unreserved,reported in:
Special revenue funds 12,029,680
Capital projects funds 11,614,644
Debt service funds 126,434
Permanent funds 1,649,550
Total all other governmental funds 29,023,246 20,534,007 17,364,759 17,529,997 16,066,986 10,455,348 10,455,348 11,983,782 14,955,970 26,598,306
Total all governmental funds $ 39,054,736 $ 37,860,519 $ 33,062,025 $ 30,858,400 $ 26,734,126 $ 19,150,422 $ 19,150,422 $ 17,355,981 $ 20,286,457 $ 27,090,099
(1)The City implemented GASB 54 for the Fiscal Year Ended June 30,2011. Prior years were not restated retroactively.
196
CITY OF LANSING, MICHIGAN Table 4-Unaudited
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
2019 ---- ��-----
Revenues
Taxes and special assessments $ 41,732,645 $ 39,629,305 $ 40,691,325 $ 38,782,759 $ 39,470,249 $ 38,717,552 $ 38,717,552 $ 33,583,448 $ 37,371,885 $ 39,279,343
Income taxes 37,021,436 38,455,296 35,694,010 34,573,130 31,660,923 29,850,755 29,850,755 27,943,070 28,699,749 27,408,443
Licenses and permits 1,399,881 2,113,824 1,494,298 1,559,638 1,551,125 1,509,402 1,509,402 1,538,325 1,598,804 1,414,906
Intergovernmental 45,586,152 41,848,072 36,391,761 34,175,112 36,042,377 40,639,183 40,639,183 41,431,793 40,304,785 39,137,217
Charges for services 15,235,656 12,432,770 13,230,822 14,102,447 12,900,490 11,754,381 11,754,381 18,676,398 18,606,304 18,323,158
Fines and forfeits 2,306,990 2,601,063 2,510,945 3,455,541 3,075,427 3,694,351 3,694,351 2,884,328 3,325,728 4,579,175
Interest and rents 631,812 284,165 201,367 145,011 87,035 53,179 53,179 63,571 88,516 249,464
Contributions 21,267,532 20,698,205 21,983,270 21,663,690 21,561,449 16,247,403 16,247,403 12,369,733 11,821,388 10,606,368
Donations from private sources - - - - - - - 5,000 - 9,000
Otherrevenue 1,123,946 1,403,712 969,317 1,190,624 1,601,497 510,515 510,515 400,074 504,856 473,123
Total revenues 166,306,050 159,466,412 153,167,115 149,647,952 147,950,572 142,976,721 142,976,721 138,895,740 142,322,015 141,480,197
Expenditures
General government 27,340,931 22,281,236 23,948,368 23,386,445 21,720,206 23,595,321 23,595,321 25,038,589 26,396,516 27,839,564
Public safety 78,659,682 75,859,065 73,683,246 72,264,468 75,510,743 63,943,082 63,943,082 66,161,872 70,397,235 70,820,184
Public works 11,632,895 11,087,884 11,201,515 11,715,510 13,273,332 8,908,673 8,908,673 6,225,177 6,002,823
Highways and streets 11,984,896 10,104,034 10,969,516 10,838,473 10,357,488 9,937,423 9,937,423 8,589,298 8,494,233 14,506,982
Recreation and culture 8,138,369 8,236,872 7,749,245 7,719,906 7,583,085 6,629,453 6,629,453 6,996,562 7,464,193 8,127,700
Community development 19,435,277 15,947,504 4,142,612 3,442,110 3,910,924 - - - - -
Other functions - - 2,710,979 2,927,391 2,704,982 23,699,202 23,699,202 17,999,264 15,675,003 15,182,675
Debt service:
Principal 3,183,595 3,622,053 4,596,159 3,892,862 3,616,297 3,137,159 3,137,159 3,448,080 2,070,552 2,165,237
Interest 1,000,307 949,318 1,120,518 1,275,957 931,079 1,378,856 1,378,856 1,836,218 3,210,220 3,270,068
Issuance costs - - - - - 42,744 42,744 - 48,804 -
Capital outlay 4,798,070 5,146,742 9,328,278 7,221,346 21,016,808 5,489,617 5,489,617 6,466,084 9,956,103 14,781,728
Total expenditures 166,174,022 153,234,708 149,450,436 144,684,468 160,624,944 146,761,530 146,761,530 142,761,144 149,715,682 156,694,138
Excess of revenues over(under)expenditures 132,028 6,231,704 3,716,679 4,963,484 (12,674,372) (3,784,809) (3,784,809) (3,865,404) (7,393,667) (15,213,941)
Other financing sources(uses)
Proceeds from borrowing 8,603,699 - - 2,090,000 16,761,300 11,932,046 11,932,046 - 2,470,000 10,146,117
Proceeds from sale of capital assets - 128,976 97,255 268 110,533 497,833 497,833 1,398,936 1,210,046 689
Payment to refunding bond escrow agent (7,741,363) - - (2,162,163) - (6,015,112) (6,015,112) - (2,456,207) -
Insurance proceeds - - - - - - - - -
Transfers in 8,749,296 7,721,661 9,887,627 9,207,856 9,734,572 7,056,932 7,056,932 7,893,879 9,602,095 16,181,590
Transfers out (9,330,113) (9,283,847) (11,497,936) (10,055,346) (10,002,772) (1,892,449) (1,892,449) (8,357,887) (10,235,909) (16,646,397)
Bond premium 780,670 80,175 40,945 - - - - -
Total other financing sources(uses) 1,062,189 (1,433,210) (1,513,054) (839,210) 16,644,578 11,579,250 11,579,250 934,928 590,025 9,681,999
Net change in fund balance $ 1,194,217 $ 4,798,494 $ 2,203,625 $ 4,124,274 $ 3,970,206 $ 7,794,441 $ 7,794,441 $ (2,930,476) $ (6,803,642) $ (5,531,942)
Debt service as a percentage of
noncapital expenditures 2.6% 3.1% 3.9% 3.7% 3.2% 3.2% 3.2% 3.8% 3.7% 3.9%
197
CITY OF LANSING, MICHIGAN Table 5 - Unaudited
Assessed and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
(rate per$1,000 of assessed value)
Fiscal Total Assessed
Year Personal Total Taxable Direct Estimated Value as a
Ended Residential Commercial Industrial Agricultural Developmental Property Assessed Tax Actual Percentage of
June 30, Property Property Property Property Property Valuation Valuation Rate Value Actual Value
2010 $ 1,480,467,389 $713,807,797 $ 248,288,931 $ $ $ 220,228,175 $ 2,662,792,292 15.70 $5,325,584,584 50.0%
2011 1,407,920,589 624,406,132 215,099,428 199,543,400 2,446,969,549 15.70 4,595,182,662 53.3%
2012 1,387,390,250 639,535,400 87,432,000 183,233,681 2,297,591,331 15.70 4,177,384,562 55.0%
2013 1,232,109,181 587,002,900 86,884,400 151,900 - 182,543,900 2,088,692,281 19.70 4,177,384,562 50.0%
2014 1,152,931,800 580,539,700 85,938,200 151,900 2,900 182,024,000 2,001,588,500 19.70 4,002,817,000 50.0%
2015 1,144,848,592 602,472,030 155,934,800 158,100 2,900 183,420,400 2,086,836,822 19.70 4,173,673,644 50.0%
2016 1,162,708,909 643,816,600 162,544,200 175,600 2,900 196,143,891 2,165,392,100 19.70 4,330,784,200 50.0%
2017 1,212,816,985 691,032,435 175,090,600 172,500 2,900 157,759,500 2,236,874,920 19.70 4,473,749,840 50.0%
2018 1,297,946,576 710,853,825 179,884,100 172,500 - 147,207,000 2,336,064,001 19.70 4,672,128,002 50.0%
2019 1,196,609,516 632,348,896 117,461,087 162,016 - 131,924,900 2,078,506,415 19.70 4,157,012,830 50.0%
Source: Lansing City Assessor
198
CITY OF LANSING, MICHIGAN Table 6 - Unaudited
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(l) Education Millage Millage(2) Total
2010 2009 15.44 .26 15.70 8.85 19.95 6.00 3.81 9.93 64.24
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 8.85 21.44 6.00 3.81 9.96 65.76
2013 2012 19.44 .26 19.70 9.49 21.73 6.00 3.81 9.96 70.68
2014 2013 19.44 .26 19.70 9.50 21.91 6.00 3.81 9.96 70.88
2015 2014 19.44 .26 19.70 10.20 21.77 6.00 3.81 9.96 71.44
2016 2015 19.44 .26 19.70 9.83 21.83 6.00 3.81 9.96 71.12
2017 2016 19.44 .26 19.70 10.06 22.57 6.00 3.81 9.96 72.10
2018 2017 19.44 .26 19.70 10.07 22.60 6.00 3.81 11.25 73.43
2019 2018 19.44 .26 19.70 11.34 22.50 6.00 3.81 11.26 74.61
(1) rates for Lansing School District only, using non-principal residency rates
(2) includes Intermediate School, Airport Authority, Capital
Area Transit Authority and Capital Area District Library.
Source: Lansing City Treasurer
199
CITY OF LANSING, MICHIGAN Table 7- Unaudited
Profile of Ten Largest Ad Valorem Taxpayers
Current Year and Nine Years Ago
2019 2010
Percentage Percentage
Taxable of Total Total of Total
Assessed Assessed Assessed Assessed
Taxpayer Valuation Rank Valuation Valuation Rank Valuation
General Motors Corp. $ 72,564,575 1 3.49% $ 97,245,402 1 4.15%
Jackson National Life Insurance Company 36,691,005 2 1.77% 33,598,874 2 1.43%
Consumers Energy 36,418,475 3 1.75% 22,660,900 3 0.97%
Lansing Properties LLC 24,132,150 4 1.16%
Phoenix Development Partners LLC 18,011,594 5 0.87%
Emergent Biodefense Operations 12,656,971 6 0.61%
Lansing Retail Center LLC 11,943,147 7 0.57% 12,000,900 7 0.51%
Phoenix Development Partners II LLC 8,605,391 8 0.41%
Eyde Knapp Development LLC 8,401,298 9 0.40%
Edward Rose Realty, Inc. 7,317,457 10 0.35%
Delta Township Utilities 20,259,900 4 0.86%
General Motors LLC 20,222,572 5 0.86%
Demmer Corporation 17,254,600 6 0.74%
Trappers Cove LTD Partners 11,129,000 8 0.47%
River Street Triangle LLC 10,950,800 9 0.47%
Blue Cross Blue Shield of Michigan 9,787,000 10 0.42%
Data furnished from City of Lansing Assessor
200
CITY OF LANSING, MICHIGAN Table 8 - Unaudited
Property Tax Levies and Collections
Last Ten Fiscal Years
Collected within the
Fiscal Year of the Levy Total Collections to Date
Taxes Levied Current Percent of Delinquent Total Collections
for the Tax Levy Tax Tax as a Percent
Tax Year Fiscal Year Fiscal Year Collection Collected Collection Collection of Levy
2009 2010 $ 44,997,919 $ 44,844,495 99.66% $ 33,012 $ 44,877,507 99.73%
2010 2011 41,460,916 41,375,354 99.79% 24,416 41,399,770 99.85%
2011 2012 39,948,762 39,863,393 99.79% 19,647 39,883,040 99.84%
2012 2013 40,450,767 39,716,932 98.19% 55,532 39,772,464 98.32%
2013 2014 39,336,952 39,238,902 99.75% 20,866 39,259,768 99.80%
2014 2015 38,329,032 38,258,272 99.82% 49,590 39,259,768 102.43%
2015 2016 38,538,226 38,461,152 99.80% 52,758 38,307,862 99.40%
2016 2017 38,431,072 38,370,929 99.84% 50,344 38,421,273 99.97%
2017 2018 39,234,692 39,232,925 99.99% 67,348 39,300,273 100.17%
2018 2019 40,231,255 40,203,313 99.93% 42,639 40,245,952 100.04%
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
201
CITY OF LANSING, MICHIGAN Table 9-Unaudited
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Governmental Activities Business-Type Activities
General e Special Installment General Installment Total Percentage
g
Fiscal Obligation Assessment Purchase Obligation Revenue Purchase Primary of Personal Per
Year Bonds I Debt06,mml Bonds Bonds Agreements Loans Government Income
2010 $ 26,329,157 $ $ 10,925,689 $ 1,038,804 $ 199,063,758 $ 36,122,872 $ $ 4,180,000 $ 277,660,280 13.58%i2i $ 2,426 114,448
2011 27,804,224 9,564,693 779,580 197,000,901 33,209,092 1,574,209 269,932,699 12.86%i2i 2,367 114,017
2012 25,816,914 8,193,615 512,577 189,536,530 30,135,311 1,637,177 255,832,124 12.97%i3i 2,230 114,738
2013 29,994,604 2,807,838 6,246,743 180,359,931 27,528,327 1,702,664 248,640,107 11.96%i3i 2,191 113,488
2014 27,180,294 3,100,563 7,062,234 174,471,861 24,055,438 1,668,081 - 237,538,471 11.00%i3i 2,082 114,113
2015 27,790,281 16,387,327 7,872,600 167,787,460 19,445,482 1,459,431 240,742,581 10.20%i3i 2,118 113,659
2016 21,968,330 15,268,317 7,872,600 154,303,563 20,671,135 1,246,673 221,330,618 9.34%isi 1,940 114,110
2017 18,080,040 13,757,531 7,728,428 143,761,916 18,982,246 1,029,723 203,339,884 7.98%i;i 1,753 117,400
2018 15,325,818 12,289,396 7,476,545 136,938,668 17,258,138 808,500 190,097,065 7.61%i3i 1,625 115,451
2019 14,925,420 11,274,020 7,242,002 117,713,909 14,075,000 582,920 165,813,271 6.31%(3) 1,413 117,388
(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
202
CITY OF LANSING, MICHIGAN Table 10 - Unaudited
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
Ratio of
Fiscal Debt Net Bonded Net
Year Taxable Service Debt Payable Debt to Bonded
Ended Assessed Gross Bonded Monies From Restricted Net Bonded Taxable Debt per
June 30, Population(') Value(3) Debt"' Available Revenues Debt Value Capita
2010 114,448 $2,662,792,292 $ 225,392,915 $ 126,434 $ 206,198,758 $ 19,067,723 0.0072 $ 167
2011 114,017 2,446,969,549 224,805,125 46,029 203,225,901 21,533,195 0.0088 189
2012 114,738 2,297,591,331 215,353,444 - 194,911,530 20,441,914 0.0089 178
2013 113,488 2,088,692,281 210,354,535 178 184,849,931 25,504,427 0.0122 225
2014 114,113 2,001,588,500 201,652,155 - 178,031,861 23,620,294 0.0118 207
2015 113,659 2,086,836,822 195,577,741 1,000 170,372,460 25,204,281 0.0121 222
2016 114,110 2,165,392,100 176,271,893 1,000 155,873,563 20,397,330 0.0094 179
2017 117,400 2,236,874,920 161,841,956 1,000 144,271,916 17,569,040 0.0079 150
2018 116,986 2,336,064,001 1521264,486 1,000 136,938,668 15,324,818 0.0066 131
2019 117,388 2,078,506,415 132,639,329 30,111 117,713,909 14,895,309 0.0072 127
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
203
CITY OF LANSING, MICHIGAN Table 11 - Unaudited
Direct and Overlapping Governmental Activities Debt
As of June 30, 2019
Net General
Obligation Amount
Name of Debt % Applicable Applicable
Governmental Unit Outstanding to City to City
Net direct - City $ 33,441,442 100.00% $ 33,441,442
Share of County-issued bonds
Drain Commission 1,013,220 100.00% 1,013,220
Other overlapping debt
Eaton Intermediate School District 3,300,000 0.88% 29,040
Ingham Intermediate School District 1,169,000 21.87% 255,660
Waverly School District 20,150,000 0.26% 52,390
Lansing School District 110,660,000 79.34% 87,797,644
East Lansing School District 85,048,377 5.34% 4,541,583
Holt School District 16,570,968 0.98% 162,395
Ingham County 49,154,416 25.35% 12,460,644
Eaton County 21,713,864 1.92% 416,906
Clinton County 437,140 0.28% 1,224
Lansing Community College 64,445,000 17.92% 11,548,544
Okemos School District 34,170,183 4.39% 1,500,071
Mason School District 38,325,000 1.34% 513,555
Grand Ledge School District 88,535,000 1.73% 1,531,656
Total overlapping debt 121,824,532
Total direct and overlapping debt $ 155,265,974
Note: Overlapping debt percentages are apportioned based upon relative assessed values.
Source: Municipal Advisory Council of Michigan
204
CITY OF LANSING, MICHIGAN Table 12-Unaudited
Legal Debt Margin Information
Last Ten Fiscal Years
Legal Debt Margin Calculation for Fiscal Year 2019
Assessed value,real and personal property $2,078,506,415
Legal debt margin
Debt limitation-10 percent of total valuation 207,850,642
Debt applicable to limit
Total City Bonded Debt 143,854,842
City Share:
Drain Commission-County Issued 1,013,220
TIF Supported Bonds 27,860,758
Lansing Board of Water and Light 615,255,000
787,983,820
Less:
Michigan Transportation(MTF)Bonds $ (1,665,000)
Lansing Board of Water and Light (615,255,000)
Sewage Disposal Revenue Bonds (14,075,000)
Pollution Abatement(CSO Project)Bonds (83,305,977)
Share of County-issued bonds (1,013,220) (715,314,197)
Total net debt applicable to limit 72,669,623
Legal debt margin $ 135,181,019
----I 201_-----
Debt limit
$ 207,850,642 $ 233,606,400 $ 223,687,492 $ 216,539,210 $ 208,683,682 $ 205,138,999 $ 208,869,228 $ 233,669,637 $ 268,975,768 $ 298,052,683
Total net debt applicable to limit
72,669,623 87,295,949 81,398,300 86,432,459 91,352,614 93,062,835 91,833,157 92,357,575 100,923,863 98,368,804
Legal debt margin
$ 135,181,019 $ 146,310,451 $ 142,289,192 $ 130,106,751 $ 117,331,068 $ 112,076,164 $ 117,036,071 $ 141,312,062 $ 168,051,905 $ 199,683,880
Total net debt applicable to the limit
as a percentage of debt limit
34.96% 37.37% 36.39% 39.92% 43.78% 45.37% 43.97% 39.52% 37.52% 33.00%
205
CITY OF LANSING, MICHIGAN Table 13 - Unaudited
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)
2010 $ 28,613,004 $ 12,358,472 $ 16,254,532 $ 2,840,000 $ 1,803,425 $ 4,643,425 3.50
2011 29,865,648 12,616,100 17,249,548 2,925,000 1,621,221 4,546,221 3.79
2012 30,178,511 12,562,663 17,615,848 3,040,000 1,448,856 4,488,856 3.92
2013 31,169,428 12,112,994 19,056,434 3,160,000 1,111,390 4,271,390 4.46
2014 31,996,794 13,424,901 18,571,893 3,265,000 1,054,878 4,319,878 4.30
2015 31,945,082 13,295,574 18,649,508 1,490,000 920,788 2,410,788 7.74
2016 32,676,182 14,066,527 18,609,655 1,550,000 861,188 2,411,188 7.72
2017 35,053,701 13,843,649 21,210,052 1,550,000 799,188 2,349,188 9.03
2018 35,608,454 14,994,871 20,613,583 1,550,000 737,188 2,287,188 9.01
2019 36,696,367 18,587,607 18,108,760 1,550,000 690,688 2,240,688 8.08
Operating expenses less depreciation
Coverage is defined as net revenue available for debt service divided by
debt service requirements
206
CITY OF LANSING, MICHIGAN Table 14- Unaudited
Demographic and Economic Statistics
Last Ten Fiscal Years
Per capita Lansing School
Personal Personal Median District Unemployment Labor
Year Population(') Income Income(') Age(') Enrollment(z) %Rate(3) Force(3)
2010 114,448 $ 2,044,504,031 $ 17,864 32.92 13,586 15.0% 64,168
2011 114,017 2,099,395,021 18,413 30.40 12,987 13.1% 59,616
2012 114,738 1,973,149,386 17,197 32.40 12,754 11.3% 58,087
2013 113,488 2,078,873,184 18,318 32.20 12,180 11.9% 57,714
2014 114,113 2,159,930,864 18,928 32.00 11,936 9.1% 57,809
2015 113,659 2,359,106,204 20,756 32.10 11,525 7.4% 57,807
2016 114,110 2,368,467,160 20,756 32.10 11,014 6.0% 58,009
2017 117,400 2,548,754,000 21,710 32.00 10,873 6.5% 59,321
2018 116,986 2,666,695,870 22,795 32.30 10,641 5.8% 59,537
2019 117,388 2,629,725,976 22,402 32.70 10,462 5.0% 59,251
(1) Source: U.S. Census Bureau
(2) Source: Lansing School District
(3) Source: Michigan Bureau of Labor Market Information and Strategic Initiatives
207
CITY OF LANSING, MICHIGAN Table 15-Unaudited
Principal Employers
Current Year and Nine Years Ago
2019 2010
Percentage Percentage
of Total City of Total City
Employer Employees(') Rank Employment(2) Employees(') Rank Employment
State of Michigan 14,390 1 5.97% 14,355 1 6.55%
Michigan State University 10,253 2 4.25% 11,218 2 5.12%
Sparrow Health System 7,600 3 3.15% 7,400 3 3.38%
General Motors 4,549 4 1.89% 3,688 4 1.68%
Lansing Community College 3,144 5 1.30% 3,180 5 1.45%
McClaren Greater Lansing 3,000 6 1.24%
Auto Owners Insurance 2,578 7 1.07% 1,500 9 0.68%
Peckham, Inc. 2,510 8 1.04% 1,400 10 0.64%
Jackson National Life 2,500 9 1.04%
Dart Container Corp 2,000 10 0.83%
Ingham Regional Medical Center 2,500 6 1.14%
Lansing School District 2,106 7 0.96%
Meijer 2,000 8 0.91%
Greater Lansing metropolitan area employment 241,100
(1) Data is representative of the Greater Lansing Region
(2)Source: Michigan Department of Career Development: Employment Service Agency- Labor Market Information
208
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209
CITY OF LANSING, MICHIGAN
Full-time Equivalent City Governmental Employees by Function/Program
Last Ten Fiscal Years
Function/Program 2019 2018 2017 2016 2015 2014
General government
City council 10 10 10 10 10 10
Mayor's office 7 7 (7) 6 6 5 5
City clerk 6 5 5 5 5 5
54-A district court 45 45 45 45 46 43
City attorney's office 12 11 11 11 11 10
City TV 2 2 2 2 2 2
Internal auditor 1 1 1 1 1 1
Human resources 11 11 12 12 10 10
Information technology 16 16 11 11 11 11
Finance
Accounting/budget/purchasing 8 8 8 8 (5) 9 10
Treasury/income tax 13 11 11 10 9 9
Assessing 11 11 11 11 11 11
Property management - - - - - -
Fleet management - - - - - -
32 30 30 29 29 30
Planning 8 neighborhood development
Administration 2 2 2 2 2 2
Code compliance 15 14 (6) - (4)
Building safety 13 13 13 13 13 13
Planning 4 3 (7) 4 4 4 4
Development 9 9 9 10 10 11
Parking if transportation 14 14 14 14 14 15
57 55 42 43 43 45
Neighborhood &Citizen Engagement 5 1 (7) - - - -
Police 243 241 240 239 239 234 (4)
Fire 182 181 181 181 181 188
Code compliance - - (6) 14 14 14 14 (4)
182 181 195 195 195 202
Public services
Administration Is engineering 21 20 20 20 19 19
Operations Et maintenance 118 118 117 117 117 117 (4)
Service garage - - - - - -
Wastewater 42 42 41 41 41 41
Property Management 16 16 16 18 18 18
Fleet Management 30 30 30 26 27 27
227 226 224 222 222 222
Human relations E. community services 10 9 8 7 7 6
210
Table 16 - Unaudited
2013 2012 2011 2010
10 10 11 11
5 5 5 5
5 5 6 7
43 48 50 53
10 10 11 12
2 2 2 2
1 1 1 1
9 9 11 12
10 10 14 15
10 13 14 16
20 10 11 12
11 11 12
18 20 21
27 29 30
30 79 85 91
2 2 2 2
15 15 16 16
12 13 15 15
4 4 5 5
9 9 9 9
20 20 20 (3) 40
62 63 66 87
229 260 327 344
180 179 207 218
180 179 207 218
19 21 21 17
120 121 135 (3) 110
41 41 41 44
18 (7) - - -
27 - - -
225 183 197 171
5 5 5 5
continued...
211
CITY OF LANSING, MICHIGAN
Full-time Equivalent City Governmental Employees by Function/Program
Last Ten Fiscal Years
Function/Program 2019 2018 2017 2016 2015 2014
Parks Et recreation
Administration Et design 6 6 6 6 6 6
Grounds Et forestry - - - - - -
Leisure Et special recreation 6 6 6 6 6 6
Cemeteries 1 1 1 1 1 1
Golf/ice arena - 3 3 3 3 3
13 16 16 16 16 16
879 867 858 854 852 852
Source: The City of Lansing, Michigan
The following restructuring of departments have occurred:
(1) Grounds Maintenance positions were moved from Parks Et Recreation and Planning Et Neighborhood Development and
consolidated with Public Service staff.
(2) Fleet and Property Management were moved from the Finance Department to the Public Service Department
(3) On June 27, 2012, 911 Dispatch employees were transferred from the City to Ingham County.
(4) Code Compliance (14 positions) were transferred from EDEtP to Fire; four (4) positions to Police, and one (1) position
to Public Service for FY 2014.
(5) Purchasing operations were transferred to the Lansing Board of Water and Light for FY 2016.
(6) Code Compliance was transferred from Fire to EDEtP.
(7) One (1) position was transferred from Human Resources to Mayor's Office and one (1) position was transferred from
EDEtP to NEtCE in FY 2018.
212
2013 2012 2011 2010
5 5 5 7
- - - 27
8 10 12 15
1 1 1 3
3 3 4 4
17 19 22 56
843 888 1,020 1,090
concluded
213
CITY OF LANSING, MICHIGAN Table 17-Unaudited
Operating Indicators by Function/Program
Last Ten Fiscal Years
�unction/Program 2019M- ` 2016 _W�`2014 .----
Public safety
Fire department responses 22,389 22,768 21,902 21,115 20,170 19,427 18,444 17,093 16,974 16,659
EMS related 19,655 19,264 18,827 18,275 17,376 16,235 15,918 14,851 14,628 14,398
Fire related 2,734 3,063 3,075 2,840 2,794 3,012 2,526 2,242 2,346 2,261
Police department responses 84,869 107,379 82,722 71,468 79,331 76,855 73,087 74,058 78,112 87,724
Arrests 4,418 4,507 5,710 3,880 4,510 5,656 7,196 8,043 8,858 11,644
Traffic violations 6,963 6,496 9,385 7,334 10,781 7,756 14,905 8,829 15,585 18,297
Public works
Potholes filled 2,589 54,773 53,332 53,488 53,281 55,193 33,155 30,116 32,918 24,945
Streets resurfaced(miles) 4.6 6.0 8.7 8.8 4.0 4.6 6.0 5.0 9.0 20.7
Recreation
Recreation participation 93,264 120,245 98,978 101,335 122,639 50,859 55,122 66,836 66,254 70,529 '
Pavilion rentals 222 202 180 242 206 185 199 198 161 288
Sewage disposal
Average amount processed
daily(gal) 16.60 million 14.45 million 16.32 million 15.46 million 13.28 million 14.49 million 14.75 million 12.82 million 12.83 million 15.01 million
Parking system
Average number of monthly permit 2,500 3,310 2,581 3,218 3,077 2,891 2,718 2,735 3,122 3,480
Parking tickets issued 37,105 32,857 33,492 32,990 30,888 34,373 38,127 41,829 45,176 63,610
Cemetery
Lots sold 103 88 162 115 138 93 113 115 143 142
Garbage and rubbish
Yards sent to landfill 20,957 20,492 20,007 20,115 19,667 18,829 17,985 18,705 20,334 21,805
Recycling
Recycled goods sold(tons) 5,407 5,593 5,834 5,940 5,691 5,075 3,562 3,149 2,446 2,163
Yards composted 21,198 20,031 24,223 24,413 21,685 25,260 21,832 20,413 15,725 21,819
Source: The City of Lansing,Michigan
The addition of the Southside Community Center,with a pool,resulted in a large increase in recreation participation in FY 2010
214
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215
CITY OF LANSING, MICHIGAN
Capital Assets Statistics by Function/Program
Last Ten Fiscal Years
Function/Program 2019 2018 2017 2016 2015 2014
Public safety
Police stations 2 2 2 2 2 2
Police patrol units 58 60 60 60 60 61
Fire stations 8 6 6 6 6 6
Emergency Vehicles 55 - - - - -
Public works
Streets (miles) 413.00 414.00 414.00 414.00 414.00 411.00
Traffic signals 184 200 200 200 200 200
Recreation
Park acreage 2,174.13 2,017.56 2,134.26 2,134.26 2,363.45 2,364.85
Playgrounds 76 74 74 74 72 72
Baseball/softball fields 22 25 25 25 47 61
Soccer/football fields 15 15 15 14 6 6
Community centers 4 4 4 4 4 4
Sewage disposal
Sanitary sewers (miles) 364 363 361 361 361 359
Storm sewers (miles) 238 237 235 235 235 234
Combined sewers (miles) 185 187 188 188 188 188
Parking system
Ramps 3 4 4 4 4 4
Lots 16 16 16 16 17 17
Meters 2,166 2,166 2,166 2,166 2,166 2,452
Cemetery
Number of cemeteries 3 3 3 3 3 3
Golf
Number of courses 1 1 1 1 1 1
Acreage 115 115 115 115 115 115
Garbage and rubbish
Refuse collection trucks 8 16 14 14 17 17
Recycling
Recycling trucks 8 7 5 5 7 7
Compost trucks 8 - - - - -
Source: The City of Lansing, Michigan
216
Table 18 - Unaudited
2013 2012 2011 2010
2 2 3 3
60 60 58 61
6 6 8 9
411.00 407.80 410.80 410.63
204 204 208 203
2,364.85 2,434.88 2,422.63 2,422.63
75 73 71 71
61 61 61 61
6 6 6 6
4 4 4 4
359 359 359 357
234 234 234 233
188 188 188 191
4 4 4 4
18 15 15 16
2,452 2,452 2,452 2,493
3 3 3 3
1 1 1 1
115 115 115 115
17 19 22 18
7 7 9 10
217