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HomeMy WebLinkAboutCity of Lansing Annual Comprehensive financial Report June 30, 2022 CITY OF LANSING, MICHIGAN ANNUAL COMPREHENSIVE FINANCIAL REPORT YEAR ENDED JUNE 30, 2022 � S j ti G Andy Schor, Mayor Prepared by: Department of Finance Chief Financial Officer/Finance Director Desiree A. Kirkland Controller Jeffery D. Scharnowske TABLE OF CONTENTS Pape INTRODUCTORY SECTION................................................................................................................................................................1 Electedand Appointed Officers.......................................................................................................................................................2 Letterof Transmittal.........................................................................................................................................................................3-7 Certificate of Achievement for Excellence in Financial Reporting...................................................................................8 Tableof Organization..........................................................................................................................................................................9 FINANCIALSECTION.........................................................................................................................................................................10 INDEPENDENT AUDITOR'S REPORT.......................................................................................................................................11-13 MANAGEMENT'S DISCUSSION AND ANALYSIS..................................................................................................................14-24 BASIC FINANCIAL STATEMENTS.................................................................................................................................................25 Government-wide Financial Statements Statementof Net Position.....................................................................................................................................................27-28 Statementof Activities..............................................................................................................................................................29 Fund Financial Statements Governmental Funds BalanceSheet............................................................................................................................................................................32 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position................33 Statement of Revenues,Expenditures,and Changes in Fund Balances..........................................................34 Reconciliation of the Statement of Revenues,Expenditures,and Changes in Fund Balances of Governmental Funds to the Statement of Activities..........................................................35 Proprietary Funds Statementof Net Position...................................................................................................................................................37 Statement of Revenues,Expenses,and Changes in Fund Net Position............................................................38 Statementof Cash Flows...................................................................................................................................................39-40 Fiduciary Funds Statement of Fiduciary Net Position...............................................................................................................................42 Statement of Changes in Fiduciary Net Position.......................................................................................................43 Discretely Presented Component Unit Financial Statements Combining Statement of Net Position............................................................................................................................46 Combining Statement of Activities..................................................................................................................................47 Notesto Financial Statements..............................................................................................................................................48-111 REQUIRED SUPPLEMENTARY INFORMATION.....................................................................................................................112 General Fund Schedule of Revenues, Expenditures,and Changes in Fund Balance-Budget and Actual...................113-114 State and Federal Grants Fund Schedule of Revenues, Expenditures,and Changes in Fund Balance-Budget and Actual........................115 CERA-MSHDA Fund Schedule of Revenues, Expenditures,and Changes in Fund Balance-Budget and Actual........................116 TABLE OF CONTENTS Page REQUIRED SUPPLEMENTARY INFORMATION (concluded) Employees'Retirement System Defined Benefit Pension Plan Schedule of Changes in Net Pension Liability and Related Ratios........................................................................117 Scheduleof Contributions......................................................................................................................................................118 Schedule of Investment Returns..........................................................................................................................................119 Police and Fire Retirement System Defined Benefit Pension Plan Schedule of Changes in Net Pension Liability and Related Ratios........................................................................120 Scheduleof Contributions......................................................................................................................................................121 Schedule of Investment Returns..........................................................................................................................................122 Employees'Retirement System OPEB Plan Schedule of Changes in Net OPEB Liability and Related Ratios.............................................................................123 Scheduleof Contributions......................................................................................................................................................124 Schedule of Investment Returns..........................................................................................................................................125 Police and Fire Retirement System OPEB Plan Schedule of Changes in Net OPEB Liability and Related Ratios.............................................................................126 Scheduleof Contributions......................................................................................................................................................127 Schedule of Investment Returns..........................................................................................................................................128 Note to Required Supplementary Information.................................................................................................................129 OTHER SUPPLEMENTARY INFORMATION............................................................................................................................130 Combining and Individual Fund Financial Statements and Schedules Nonmajor Governmental Funds Combining Balance Sheet- Nonmajor Governmental Funds..............................................................................131 Combining Statement of Revenues, Expenditures,and Changes in Fund Balances-Nonmajor Governmental Funds..............................................................................................................132 Combining Balance Sheet- Nonmajor Special Revenue Funds.....................................................................135-136 Combining Statement of Revenues, Expenditures,and Changes in Fund Balances-Nonmajor Special Revenue Funds.....................................................................................................137-138 Schedules of Revenues,Expenditures,and Changes in Fund Balance- Budgetand Actual-by Fund......................................................................................................................................139-147 Balance Sheet-Nonmajor Debt Service Fund...........................................................................................................149 Statement of Revenues,Expenditures,and Changes in Fund Balance-Nonmajor Debt Service Fund.....................................................................................................................150 Combining Balance Sheet- Nonmajor Capital Projects Funds...........................................................................152 Combining Statement of Revenues, Expenditures,and Changes in Fund Balances-Nonmajor Capital Projects Funds...........................................................................................................153 Combining Balance Sheet- Nonmajor Permanent Funds....................................................................................155 Combining Statement of Revenues, Expenditures,and Changes in Fund Balances-Nonmajor Permanent Funds....................................................................................................................156 Nonmajor Enterprise Fund Combining Statement of Net Position...........................................................................................................................158 Combining Statement of Revenues, Expenses,and Changes in Fund Net Position...................................159 Combining Statement of Cash Flows.............................................................................................................................160 TABLE OF CONTENTS Page OTHER SUPPLEMENTARY INFORMATION (concluded) Combining and Individual Fund Financial Statements and Schedules (concluded) Internal Service Funds Combining Statement of Net Position...........................................................................................................................162 Combining Statement of Revenues, Expenses,and Changes in Fund Net Position...................................163 Combining Statement of Cash Flows.............................................................................................................................164 Fiduciary Funds Pension and Other Postemployment Benefit Trust Funds Combining Statement of Fiduciary Net Position..................................................................................................166 Combining Statement of Changes in Fiduciary Net Position..........................................................................167 Custodial Funds Combining Statement of Fiduciary Net Position..................................................................................................168 Combining Statement of Changes in Fiduciary Net Position..........................................................................169 STATISTICAL SECTION (UNAUDITED)....................................................................................................................................170 Table 1 Net Position by Component...........................................................................................................................................172 2 Changes in Net Position.............................................................................................................................................173-174 3 Fund Balance,Governmental Funds..........................................................................................................................175 4 Changes in Fund Balances of Governmental Funds............................................................................................176 5 Assessed Value and Estimated Actual Value of Taxable Property................................................................177 6 Direct and Overlapping Property Tax Rates..........................................................................................................178 7 Principal Property Taxpayers......................................................................................................................................179 8 Property Tax Levies and Collections.........................................................................................................................180 9 Ratios of Outstanding Debt by Type..........................................................................................................................181 10 Ratios of General Bonded Debt Outstanding.........................................................................................................182 11 Direct and Overlapping Governmental Activities Debt.....................................................................................183 12 Legal Debt Margin Information...................................................................................................................................184 13 Pledged-Revenue Coverage...........................................................................................................................................185 14 Demographic and Economic Statistics.....................................................................................................................186 15 Principal Employers.........................................................................................................................................................187 16 Full-Time Equivalent City Governmental Employees by Function/Program..........................................188 17 Operating Indicators by Function/Program..........................................................................................................189 18 Capital Assets Statistics by Function/Program....................................................................................................190 INTRODUCTORY SECTION 1 CITY OF LANSING,MICHIGAN LANSING CITY GOVERNMENT Fiscal Year Ended June 30,2022 MAYOR Andy Schor CITY COUNCIL Adam Hussain,Council President, 3rd Ward Carol Wood, Council Vice President,At Large Peter Spadafore,At Large Jeffrey Brown,At Large Patricia Spitzley,At Large Brian M. Daniels, 1st Ward Jeremy A. Garza,2nd Ward Brian T.Jackson,4th Ward CLERK Chris Swope DISTRICT COURT JUDGES Stacia Buchanan,Chief Judge Kristen D.Simmons Cynthia M.Ward Tony Flores Laura Millmore OFFICERS Chief Information Officer..................................................................................................... Christopher Mumby Chief Strategy Officer............................................................................................................. Shelbi Frayer Chief Labor Negotiator.......................................................................................................... Elizabeth O'Leary CityAssessor.............................................................................................................................. Sharon Frischman CityAttorney.............................................................................................................................. Jim Smiertka Communications Director.................................................................................................... Scott Bean City Treasurer/Chief Financial Officer........................................................................... Desiree Kirkland CourtAdministrator............................................................................................................... Anethia Brewer Deputy Mayor/Chief of Staff.............................................................................................. Jane Bais DiSessa Executive Assistant................................................................................................................. Mark Lawrence Economic Development &Planning Director............................................................. Brian McGrain FireChief..................................................................................................................................... Brian Sturdivant Human Relations&Community Service Director..................................................... Kimberly Coleman Human Resources Director................................................................................................. Linda Sanchez-Gazella Neighborhoods&Citizen Engagement.......................................................................... DeLisa Fountain Parks&Recreation Director............................................................................................... Brett Kaschinske PoliceChief................................................................................................................................. Ellery Sosebee Public Service Director.......................................................................................................... Andrew Kilpatrick 2 y¢N Sj�C 2021 FINANCE DEPARTMENT 124 W. Michigan Ave., 811 Floor Lansing, Michigan 48933 �r � 517.483.4500 C1i 1G Andy Schor,Mayor December 20,2022 Council President Adam Hussain and Council Members 10th Floor City Hall Lansing,Michigan 48933-1694 Dear President Hussain and Council Members, The Finance Department is pleased to submit the comprehensive annual financial report for the City of Lansing,Michigan,for the fiscal year ended June 30, 2022. The City of Lansing assumes full responsibility for both the accuracy of the data and the completeness and fairness of the presentation,including all disclosures. To the best of our knowledge and belief,the enclosed data 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 2021/2022 financial statements have been audited by Maner Costerisan, an independent firm of licensed,certified public accountants located within the Capital Region. The goal of the independent audit is to provide reasonable assurance that the financial statements for the City for the fiscal year-end June 30,2022,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 Auditor 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 (MD&A) and should be read in conjunction with it. The Management Discussion and Analysis can be found immediately following the Independent Auditor Report. Profile of the City of Lansing Serving as Michigan's capital since 1848,the City of Lansing was incorporated in 1859 and operates under provisions of Public Act 279 of 1909,as amended (Home Rule City Act). The City incorporates 34.7 square miles and is located in Michigan's Lower Peninsula within the northwestern corner of Ingham County and the northeastern corner of Eaton County. The City operates under a mayor/council form of government, where the Mayor serves as the chief executive of the City and is elected on an at-large basis to serve a four- year term. Lansing is a mature core city with a population of 112,644 according to the 2020 census and offers a full range of services. During the fiscal year ended June 30, 2022, the City operated a police headquarters and precinct with 211 sworn police officers,six fire stations with a fire protection force of 170, over 365 miles of sanitary sewers,239 miles of storm sewers and 184 miles of combined sewers,over 413 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. 3 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&Public Facilities Authority,Tax increment Finance Authority,the Brownfield Redevelopment Authority,and the Saginaw Street and Michigan Avenue Corridor Improvement Authority are reported as discretely presented component units. Financial Management and Control Management of the City of Lansing is responsible for establishing and maintaining internal controls. 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 Title 2 U.S.Code of Federal Regulations Part 200,Uniform Administrative Requirements,Cost Principals, and Audit Requirements for Federal Awards(Uniform Guidance). The standards governing the single audits require the independent auditor to report not only on the fair presentation of the financial statements but also on the audited government's internal controls and compliance with legal requirements involving the administration of the federal awards. These reports are available in the City's separately issued Single Audit Report. Financial results and applicable policies affecting year-end results for the fiscal year ended June 30, 2022 are discussed in the Management Discussion and Analysis (MD&A), 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. Not later than the third Monday in May of each year,the City Council shall,by resolution, adopt a budget for the ensuing fiscal year. 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 City Council approval to be carried forward to the ensuing fiscal year for amounts greater than$5,000 or greater than eight months old. 4 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,Western Michigan University Thomas M 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 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 Logistics Center and a regional stamping plant,automotive suppliers throughout the region,production of particle accelerators,and vaccine research and production. Within the City,major taxpayers and employers include, but are not limited to, the health care sector - Sparrow Health Systems and McLaren Health Care Corporation,manufacturing-General Motors,research sector-Emergent BioSolutions,Neogen Corporation, and Niowave,Inc.,and financial services and insurance-Jackson National Life and AF Group. Lansing serves as the cultural center for the region. Recent major investments have continued to revitalize Lansing and power the local economy. These new projects range in size from large to small and will continue to make Lansing a great place that offers the benefits of a big city with the affordability and convenience of a small town. Some notable business expansion and real estate projects that are attributed to the success of the City's economic development include: • In 2022 the Mayor announced$175,000 in funding for the Facade Improvement Program which assists businesses and property owners with matching grants to improve storefronts throughout Lansing's commercial corridors. • The City s Arts grant program continues to support local arts and culture organizations including the Lansing Art Gallery, Impression 5,and the Lansing Symphony Orchestra. In addition,the City will be providing$167,500 of arts impact grants through the Fiscal Year 2021/2022 City of Lansing budget. • City View Apartments,Building#1:The first phase of the City View project at the site of the former Lake Trust Headquarters (500 S.Capitol Ave.)opened for leasing in November. This adaptive reuse project includes 55 new residential units in downtown Lansing. The rest of the 500 Block redevelopment is nearing completion. This will be a$32 million development project in downtown Lansing and includes the creation of 172 multifamily apartment units scheduled for completion in 2023. • Construction on the Temple Lofts project commenced in late 2020 and was completed in December 2022. This $10.5 million redevelopment of one of Old Town's most storied buildings includes the construction of 31 market-rate apartments,4,000 square feet of first-floor office and commercial space • 637 E.Michigan Ave. (former Clara's) Redevelopment:The$3,100,000 investment to restore an iconic Lansing train station includes nearly 6,000 SF of completely renovated commercial space. The building will be occupied by two new tenants,a recently opened Starbucks community store and Bobcat Bonnies, a Michigan-based restaurant scheduled to open in 2023. • Construction of McLaren Greater Lansing's new state of the art $600 million healthcare campus at Forest and Collins Rd.in Lansing was completed in March 2022. 5 Future development projects currently underway include: • $175 million Lansing public safety bond will pay for newly constructed public safety and courts campus. This new facility will house the headquarters of the Lansing Fire Department, the Lansing Police Department, a new fire station, temporary detention facility, and the 54-A District Court. The new, central location for public safety services will be on S. Washington Ave, next to the City's South Washington Office Complex. • The Ovation Music and Arts Center, which will be located downtown next to the former Lake Trust location will be a new,state of the art live performance venue. • Lansing Shuffleboard and Social Club: The Lansing Shuffle project includes a full renovation of the former Lansing City Market building and upgrades to the patio. The opening is scheduled for early 2023 and will offer a variety of food and drink options from local food entrepreneurs,full-sized shuffleboard courts, and community event space. This project will serve as a hub for delicious food and unique entertainment and continue the momentum of riverfront activation,adding to the flourishing lifestyle amenities in downtown Lansing. The total project investment is estimated at over$3,000,000. • Hall 224: The transformation of 224 S.Washington Sq. into a live music and event venue is nearing completion. The estimated$1.4 million development plans to open in 2023 and have a capacity of about 600 for general admission and 250 people for tabled events. • Grand River Pedway Improvements: The complete refurbishment of the city owned pedway that provides pedestrian access across the Grand River is well underway. The Lansing Brownfield Redevelopment Authority was able to leverage private development investment from its Brownfield Revolving Fund to help finance this important public improvement. The update pedway will promote stronger connections across downtown and improve access to several assets such as the river trail,the Lansing Center,and numerous local businesses. • Holmes Street School Redevelopment:The former Holmes Street School is currently being redeveloped into 47 new residential units with completion by spring 2023. The project will incorporate many of the original details of the building in the redevelopment such as high ceilings,large windows,and original terrazzo as well as using reclaimed wood floors. In 2022, the City of Lansing brought our economic development team back in-house, re-establishing the Lansing Economic Development Corporation. With five full-time staff,the Lansing EDC accomplishes this by attracting and growing businesses, redeveloping properties, and using public/private partnerships. We continue our regional partnership with the Lansing Economic Area Partnership (LEAP). For the year 2022,the City and our EDC was able to get 15 projects from the Prospect to the Approved stage. These projects represent nearly $3.3 billion in new investment in Lansing and are now ready to start construction or are already underway. • Notable Real Estate and Placemaking Projects Approved in 2022 0 2130 W.Holmes Redevelopment Project: Multi-Family Residential and Commercial 0 700 May St./The Cottages: Multi-Family Residential o Stadium North Lofts/Senior Lofts:Multi-Family Residential 6 • Notable Business Development Projects Approved in 2022 o Ultium Cells/General Motors: Business Retention and Expansion o Neogen Corporation: Business Retention and Expansion o Moneyball Sportswear: Business Retention and Expansion Commercial Corridor Improvement The City and Lansing EDC has also targeted four commercial corridors throughout the city to focus special redevelopment efforts. These Corridor Improvement Authorities are the Michigan Avenue Corridor Improvement Authority (MACIA), Saginaw Street Corridor Improvement Authority (SSCIA), South Martin Luther King Jr. Blvd. Corridor Improvement Authority (SMLKCIA) and the Lansing Gateway (North Grand River) Corridor Improvement Authority. Throughout the course of 2022 significant progress was made by the Corridor Improvement Authorities. As a part of the City of Lansing's American Rescue Plan Act(ARPA)allocation,Mayor Schor allocated$100,000 to each of the Corridor Improvement Authorities to provide resources to jumpstart project implementation along the targeted commercial corridors. The S.MLK CIA,with assistance from the Lansing EDC staff,made great strides by adopting its Development&Finance Plan in 2022 and will formally get further underway in 2023. The MACIA continued the implementation of their Development&Finance Plan to further efforts of corridor revitalization. The MACIA along with the City of Lansing, and the Capital Region Community Foundation are funding facade improvements of all the businesses on the entire north side of the 2000 block of E.Michigan Avenue to create a cohesive refresh. The revitalization of the Saginaw corridor has begun to generate momentum with the acquisition of key vacant properties. Moneyball Sportswear, a homegrown athletic apparel company, will consolidate their locations in neighboring municipalities and locate their headquarters at 923-927 W. Saginaw Street. The Park Furniture building along with the property at 1001 W.Saginaw Street(neighboring the new location of Moneyball Sportswear)was acquired and will be home to the operations of DRM International Learning Center, a workforce development company in the healthcare industry. The Lansing Gateway CIA took steps to begin formulation of its board and will work diligently to have their Development&Finance Plan approved in 2 02 3. The need and demand for equitable development has never been greater. By using key findings from the Mayor's Racial Justice Equity Alliance(MRJEA)report,the Lansing EDC has begun the development of critical programs that will push Lansing forward to a place of shared prosperity and economic resilience. These funds will be used to support BIPOC entrepreneurs to start and expand businesses in the City of Lansing, reduce ALICE households in city,workforce development,and provide the training and resources to enable community development. On July 25th,Lansing City Council approved the allocation of$2 million of ARPA funds to the Lansing Equitable Economic Development(LEED) Initiative. The initiative is planning to begin rolling out the programs in early 2023. Cordially, Dom., Desiree A.Kirkland,Chief Finance Officer 7 ovemment Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting rting Presented to Cite of Lansing I Jiehigan For its .4jmual Comprehensive Financial Deport For the Fiscal Year Ended June 30. D.21 Executive Director!C'EC 8 Table of Organization Citizens of Lansing Oty perk City Council Mayor r 54-A District Court Internal Audit--j City Attorneys r Office of Review Transactions Legal Advisor/Defender Public Education Grant Identify Efficiencies Prosecutor for City City Television Analyze Programs Police Fire r Economic Neighborhoods Public Parks& Patrol Suppression Planning/Zoning Neighborhood Resources Roads/Sidewalks Parks Design Crime Investigation Prevention Code Compliance Citizen Engagement Sewers/Treatment Recreation Programs Community Policing Emergency Mgmt. Building Safety Financial Empowerment Trash/Recycling Community Centers Social Work Rescue/Hazards Parking System Grounds Mai nt. Cemeteries Detention Economic Dev.Corp. Engineering Golf LEPFA Property Mgmt. Downtown Lansing.Inc Fleet Services Information Human I r Human Relations& Finance operations Treasury Assessing IT Helpdesk Recruiting Grant Writing Assistance Accounting/Budget Income Taxes Assessing Cybersecurity Training Human Services Grants Financial Reporting Property Taxes Property Tax Roll Software Mgmt. Payroll/Benefits Police Investigations Strategic Planning Retirement Neighborhood Ombudsman 9 FINANCIAL SECTION 10 2425 E.Grand River Ave., (00*M a n e r Suite 1,Lansing,MI 48912 n 517.323.7500 CosterisanED 517.323.6346 INDEPENDENT AUDITOR'S REPORT Honorable Mayor and Members of the City Council City of Lansing,Michigan Report on the Audit of the Financial Statements Opinions 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 30,2022,and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. 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, as of June 30,2022,and the respective changes in financial position,and,when applicable,cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions 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 GovernmentAuditing Standards,issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City of Lansing and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Responsibilities of Management of the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate,that raise substantial doubt about the City of Lansing's ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. 11 Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that,individually or in the aggregate,they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards,we: ➢ Exercise professional judgment and maintain professional skepticism throughout the audit. ➢ Identify and assess the risks of material misstatement of the financial statements,whether due to fraud or error,and design and perform audit procedures responsive to those risks. Such procedures include examining,on a test basis,evidence regarding the amounts and disclosures in the financial statements. ➢ Obtain an understanding of internal control relevant to the audit 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 City of Lansing's internal control. Accordingly,no such opinion is expressed. ➢ Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management,as well as evaluate the overall presentation of the financial statements. ➢ Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of Lansing's ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis,budgetary comparison schedules,and the pension and OPEB schedules,as identified 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. 12 Supplementary 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 accompanying other supplementary information, as identified in the table of contents,is presented for purpose of additional analysis and is not a require part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The 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 State of America. In our opinion,other supplementary information,as identified in the table contents, is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditor's report thereon. Our opinions on the basic financial statements do not cover the other information,and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements,our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work perform,we conclude that n uncorrected material misstatement of the other information exists,we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards,we have also issued our report dated December 20, 2022, on our consideration of the City'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 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. December 20,2022 13 MANAGEMENT'S DISCUSSION AND ANALYSIS 14 CITY OF LANSING 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, 2022 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 $ (135,367,984) Change in total net position 49,008,949 Fund balances,governmental funds 67675,364 Change in fund balances,governmental funds 10:837,661 Unassigned fund balance,general fund 21,907,213 Change in fund balance,general fund (6,320,951) Long-term obligations outstanding 189,406,080 Change in long-term debt 928,301 Overview of the Financial Statements This MD&A is an introduction to the City's basic financial statements, which comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other required supplementary information in addition to the basic financial statements. 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 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). 15 CITY OF LANSING MANAGEMENT'S DISCUSSION AND ANALYSIS The Statement of Net Position and the Statement of Activities report three activities,as follows: ➢ Governmental Activities. Most of the City's basic services are reported under this category. Property taxes, income taxes, and intergovernmental revenues generally fund these services. The Council (legislative branch),the District Court(judicial branch),and general operations of the executive branch departments,such as police,fire,parks,public works,and other general staff departments fall within the governmental activities. ➢ Business-type Activities. The City charges fees to customers to help cover all or most of the costs of certain services it provides. Sewage collection and treatment and commercial area parking are examples of business-type activities. ➢ Discretely Presented Component Units. Component units are legally separate organizations for which the elected officials of the primary government are financially accountable. The City has various discretely presented units: the Brownfield Redevelopment Authority, the Tax Increment Finance Authority, Saginaw Street Corridor Improvement Authority, Michigan Avenue Corridor Improvement 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 obligations 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. 16 CITY OF LANSING MANAGEMENT'S DISCUSSION AND ANALYSIS ➢ 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. Fund Financial Statements. The City's major funds are identified as the General Fund,State and Federal Grants Fund,CERA-MSHDA Grant 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 and for the 54-A District Court. 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, 54-A District Court Agency Fund, and Current Tax Collections Fund 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. 17 CITY OF LANSING MANAGEMENT'S DISCUSSION AND ANALYSIS 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. Government-wide Financial Analysis The City's combined net position increased $102.5 million over the course of this fiscal year's operations and came to a total of$(184.4)million. Net position of governmental activities increased$84.3 million,and business- type activities increased $18.1 million. Explanations for those changes are described below under the governmental activities and business-type activities sections of this Management Discussion and Analysis. Governmental Activities Business-type Activities Total 2021 2022 2021 2022 2021 2022 Current and other assets $ 131,028,770 $ 172,294,944 $ 87,638,273 $ 78,404,972 $ 218,667,043 $ 250,699,916 Capital assets,net 198,918,343 207,842,733 343,948,727 343,402,376 542,867,070 551,245,109 Total assets 329,947,113 380,137,677 431,587,000 421,807,348 761,534,113 801,945,025 Deferred outflows of resources 97,877,469 96,309,562 8,447,468 8,155,009 106,324,937 104,464,571 Current liabilities 47,972,442 70,574,273 22,021,840 21,217,472 69,994,282 91,791,745 Noncurrent liabilities 524,484,592 646,310,560 157,674,615 145,906,653 682,159,207 792,217,213 Total liabilities 572,457,034 716,884,833 179,696,455 167,124,125 752,153,489 884,008,958 Deferred inflows of resources 281,037,994 151,013,876 19,044,500 6,754,746 300,082,494 157,768,622 Net position Investment in capital assets 153,733,211 159,442,216 219,824,056 232,446,124 373,557,267 391,888,340 Restricted 24,518,910 28,101,348 2,437,390 2,441,780 26,956,300 30,543,128 Unrestricted (603,922,567) (578,995,034) 19,032,067 21,195,582 (584,890,500) (557,799,452) Total net position $ (425,670,446) $ (391,451,470) $ 241,293,513 $ 256,083,486 $ (184,376,933) $ (135,367,984) 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 increase in unrestricted net position of governmental activities was primarily due to the decrease in the net pension and net other postemployment benefits liabilities of$19.8 million and$114.0 million,respectively. 18 CITY OF LANSING 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: Governmental Activities Business-type Activities Total 2021 2022 2021 2022 2021 2022 Revenue Program revenue Charges for services $ 15,460,235 $ 16,188,665 $ 49,041,671 $ 49,273,285 $ 64,501,906 $ 65,461,950 Operating grants and contributions 61,065,241 90,177,926 - - 61,065,241 90,177,926 Capital grants and contributions 15,693,491 5,283,332 15,693,491 5,283,332 General revenue Taxes 82,695,459 84,708,200 82,695,459 84,708,200 State shared revenues-unrestricted 16,612,094 17,704,794 16,612,094 17,704,794 Other 30,256,354 29,982,652 1,189,678 698,662 31,446,032 30,681,314 Total revenue 221,782,874 244,045,569 50,231,349 49,971,947 272,014,223 294,017,516 Expenses General government 11,196,979 19,628,516 - - 11,196,979 19,628,516 Public safety 57,170,988 78,113,026 57,170,988 78,113,026 Public works 32,334,504 27,316,002 32,334,504 27,316,002 Recreation and culture 4,125,852 6,707,099 4,125,852 6,707,099 Community and economic development 34,764,843 75,618,986 34,764,843 75,618,986 Interest on long-term debt 1,072,610 1,845,964 1,072,610 1,845,964 Sewage disposal system - - 20,828,495 22,239,978 20,828,495 22,239,978 Municipal parking system 3,183,095 10,110,065 3,183,095 10,110,065 Cemetery 300,009 98,394 300,009 98,394 Golf 198,889 164,878 198,889 164,878 Garbage and rubbish collection 1,753,713 1,509,140 1,753,713 1,509,140 Recycling - - 2,613,739 1,656,519 2,613,739 1,656,519 Total expenses 140,665,776 209,229,593 28,877,940 35,778,974 169,543,716 245,008,567 Change in net position before transfers 81,117,098 34,815,976 21,353,409 14,192,973 102,470,507 49,008,949 Transfers(out)in 3,221,479 (597,000) (3,221,479) 597,000 - - Change in net position 84,338,577 34,218,976 18,131,930 14,789,973 102,470,507 49,008,949 Net position-beginning of year (510,009,023) (425,670,446) 223,161,583 241,293,513 (286,847,440) (184,376,933) Net position-end of year $ (425,670,146) $ (391,451,470) $ 241,293,513 $ 256,083,486 $ (184,376,933) $ (135,367,984) Governmental Activities. The following chart depicts revenues of the governmental activities for the fiscal year: Revenues - Governmental Activities Fiscal Year Ending June 30, 2022 Other Charges for services State shared revenues- 12% 7% unrestricted 7% Property taxes Operating grants and 20% contributions 37% Income taxes Capital grants and contributions 15% 2% 19 CITY OF LANSING MANAGEMENT'S DISCUSSION AND ANALYSIS In total, governmental activity revenues increased $22.3 million from FY 2021 to FY 2022, with trends of the major revenue categories as follows: Restricted operating and capital grants and contributions comprised the largest portion of governmental revenues of$90.2 million, or 37.0% of governmental activity revenue for fiscal year 2022,a$29.1 million, or 48% increase from fiscal year 2021. State Gas and Weight tax revenues restricted for streets, and Community Development, HOME, and Emergency Shelter entitlement grant revenues held constant with mild growth;increase in this category came largely from non-entitlement restricted grant revenues resulting from State and Federal Stimulus such as the CERA-MSHDA grant efforts. Property taxes revenue was 19.5%of governmental revenues,or$47.6 million,which is an increase of$2.0 million,or 4.2%increase from 2021. Income taxes comprised 15.2%,or$37.1 million,of governmental activity revenue,the full amount of which is revenue to the General Fund. This represents a$83,000, or 0.2%,increase from fiscal year 2021. 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. Unrestricted grants and contributions (including state shared sales tax revenue) comprised 20%,or$47.8 million,of revenues,a$1.3 million,or 2.8%increase from fiscal year 2021. More than half of this category, $17.7 million,is attributed to State revenue sharing,an amount distributed to municipalities by the State of Michigan by formula allocation of portions of the State sales tax. Charges for services are program-specific revenues generated for services provided. Governmental activity charges for services increased$728,000 from FY 2021 to FY 2022. Governmental Activities. The following chart depicts expenses of the governmental activities for the fiscal year: Expenses - Governmental Activities Fiscal Year Ending June 30, 2022 Recreation and culture 3% Community and economic Public works development 13% 36% Interest on long-term debt 1% Public safety _ 37% General government 10% 20 CITY OF LANSING MANAGEMENT'S DISCUSSION AND ANALYSIS Total expenses for governmental activities increased$68.8 million,48.7%,from FY 2021 to FY 2022,with trends of the major expense categories as follows: The largest component of governmental activities was public safety,accounting for 37%,or$78.1 million,a 36.6% ($20.9 million) increase from FY 2021, largely resulting from increase in postemployment and pension liabilities and the resulting impact to long-term liabilities. Community and economic development represented 36%,or$75.6 million,of total governmental activities expenses. This category increased $40.9 million, or 118% from FY 2021 due to increased grant programs as part of federal recovery efforts,such as the CERA grant projects. Public works comprises the third largest component of governmental activity expenses,at 13.0%,or$27.3 million,an 15.5% ($5.0 million) decrease from FY 2021,due to a decrease in expenses. Business-type Activities. Net position of the business-type activities increased by$14.8 million from FY 2021 to$256.1 million. This increase was largely attributable to less funding being transferred to fund governmental activities. Financial Analysis of the City's Funds As the City completed the fiscal year,its governmental funds reported combined ending fund balances of$67.7 million, a $10.8 million increase from fiscal year 2021. Of the $67.7 million fiscal year 2022 combined ending fund balance, $3.9 million is unavailable to spend (i.e., amounts tied up in inventories, prepaids, and endowments),$35.9 million is legally restricted,and$6.0 million is committed for designated projects,leaving $21.9 million unassigned. The unassigned fund balance for the General Fund was $21.9 million, an increase of approximately $700,000 from FY 2021,which is further described in the General Fund Budgetary Highlights section. Sewage Disposal System Fund Net position increased $13.9 million to $263.5 million in FY 2022. Unrestricted net position increased $2.5 million,from$21.5 million to$24.0 million. Municipal Parking System Fund Net position decreased $4.5 million to approximately $(540,000). Unrestricted net position decreased $5.7 million,from$11.9 million to$6.2 million. The system continues to experience significantly depressed revenues resulting from 1)many employers allowing their downtown employees to work a hybrid/remote work schedule and 2) downtown college students still allowed to take online classes rather than in-person classes. 21 CITY OF LANSING MANAGEMENT'S DISCUSSION AND ANALYSIS General Fund Budgetary Highlights The FY 2022 General Fund budget was adopted as a balanced budget with a usage of 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$152.4 million to$142.4 million. General Fund reserves combined with the Budget Stabilization Fund (combined for financial statement purposes) decreased $6.3 million from FY 2021 to $18.6 million. Unassigned fund balance increased approximately$700,000,or 3%from fiscal year 2021. The City also benefited from state and federal grants used to pay for public safety expenditures for eligible employees. The City's local economy is comprised of a diversified mix of businesses and industries including government, health care,manufacturing,insurance,banking,and education. Capital Assets. At the end of the fiscal year 2022, the City had invested $552 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 ACFR. Governmental Activities Business-type Activities Total 2021 2022 2021 2022 2021 2022 Land $ 25,435,297 $ 25,435,297 $ 12,369,507 $ 12,369,507 $ 37,804,804 $ 37,804,804 Land improvements 13,872,508 12,926,012 13,570,456 2,345,583 27,442,964 15,271,595 Buildings and improvements 36,667,578 34,191,717 68,564,717 69,837,354 105,232,295 104,029,071 Equipment 7,739,183 7,110,279 2,405,017 2,910,621 10,144,200 10,020,900 Flowage rights 20,032,880 19,365,117 - 20,032,880 19,365,117 Infrastructure 86,057,449 85,285,683 215,398,478 234,781,043 301,455,927 320,066,726 Construction in progress 9,113,448 23,528,628 31,640,552 21,158,268 40,754,000 44,686,896 Total $ 198,918,343 $ 207,842,733 $ 343,948,727 $ 343,402,376 $ 542,867,070 $ 551,245,109 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. 22 CITY OF LANSING MANAGEMENT'S DISCUSSION AND ANALYSIS 2021 2022 Governmental activities General obligation bonds $ 27,958,180 $ 29,629,300 Deferred amounts For issuance premiums 663,565 586,222 Installment purchase contracts 9,156,735 22,457,000 Loans 7,660,461 6,886,326 Compensated absences 11,032,557 10,962,758 Workers compensation 2,789,472 3,082,191 Total governmental activities 59,260,970 73,603,797 Business-type activities General obligation bonds 115,160,822 103,495,891 Deferred amounts For issuance discounts (210,232) (144,942) For issuance premiums 2,352,719 2,143,101 Revenue bonds 10,975,000 9,425,000 Installment purchase agreements 118,343 - Compensated absences 820,157 883,233 Total business-type activities 129,216,809 115,802,283 Total outstanding debt $ 188,477,779 $ 189,406,080 More detailed information regarding these activities and funds can be found in Note 9 of the Notes to the Financial Statements section of the ACFR. Economic Condition and Outlook The City has received substantial support from the federal stimulus American Rescue Plan Act (ARPA) and is reviewing potential support on infrastructure. These have empowered ARPA funds have allowed the City to maintain government services, increase community support-without sacrificing financial health. Many of the employers in the City continue to have staff work remotely or remote hybrid, resulting in reduced business activity downtown impacting income tax and parking revenues. The 2021/2022 fiscal year resulted in a $678,000 increase to General Fund unassigned reserves, bringing unassigned General Fund reserves up to$21.9 million,or 15.0%of General Fund revenues.,which is within the City's 12%-lS%fund balance policy Additional savings exceeding the City's 12%-15% fund balance policy are committed toward reducing unfunded liabilities for retirement pension or healthcare per the City's fund balance policy. 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. 23 CITY OF LANSING MANAGEMENT'S DISCUSSION AND ANALYSIS Strengthening the City's economic base,maintaining 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. The City's financial picture will continuously be evaluated to address any budget constraints for future fiscal years. 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-8th Floor, 124 W.Michigan Avenue,Lansing,Michigan. 24 BASIC FINANCIAL STATEMENTS 25 GOVERNMENT-WIDE FINANCIAL STATEMENTS 26 CITY OF LANSING STATEMENT OF NET POSITION JUNE 30,2022 Primary Government Governmental Business-type Component Activities Activities Total Units ASSETS Current assets Cash and cash equivalents $ 44,330,183 $ 3,188,457 $ 47,518,640 $ 18,909,171 Equity in pooled cash and investments 63,438,072 15,510,034 78,948,106 7,552,207 Cash and cash equivalents,restricted 2,992,454 2,441,780 5,434,234 5,097,644 Current portion of receivables,net 19,370,703 8,559,994 27,930,697 1,165,675 Due from other governmental units 22,567,378 26,101,046 48,668,424 114 Internal balances (4,268,394) 4,268,394 - - Inventories 1,879,085 467,401 2,346,486 72,221 Prepaids 2,267,302 - 2,267,302 62,598 Total current assets 152,576,783 60,537,106 213,113,889 32,859,630 Noncurrent assets Noncurrent portion of receivables,net 19,718,161 17,867,866 37,586,027 100,487 Investments-restricted - - - 14,827 Capital assets not being depreciated 48,963,925 33,527,775 82,491,700 - Capital assets,net of accumulated depreciation 158,878,808 309,874,601 468,753,409 86,948 Total noncurrent assets 227,560,894 361,270,242 588,831,136 202,262 TOTAL ASSETS 380,137,677 421,807,348 801,945,025 33,061,892 DEFERRED OUTFLOWS OF RESOURCES Deferred charges on refunding 228,881 3,962,798 4,191,679 Deferred outflows of resources related to pensions 51,094,001 2,455,787 53,549,788 Deferred outflows of resources related to OPEB 44,986,680 1,736,424 46,723,104 TOTAL DEFERRED OUTFLOWS OF RESOURCES 96,309,562 8,155,009 104,464,571 LIABILITIES Current liabilities Accounts payable 16,329,860 6,512,718 22,842,578 4,560,121 Accrued payroll 3,402,638 192,504 3,595,142 - Deposits payable - 81,782 81,782 - Due to other governmental units 1,770,692 - 1,770,692 8,041,034 Claims incurred but not reported 1,500,000 1,500,000 - Indemnity bonds 43,867 43,867 - Other accrued liabilities 2,041,114 - 2,041,114 403,742 Accrued interest payable 603,045 2,202,129 2,805,174 278,754 Unearned revenue 39,680,581 - 39,680,581 459,428 Current portion of compensated absences 1,146,442 68,559 1,215,001 - Current portion of long-term obligations 4,056,034 12,159,780 16,215,814 2,833,569 Total current liabilities 70,574,273 21,217,472 91,791,745 16,576,648 The accompanying notes are an integral part of the financial statements. CONTINUED 27 CITY OF LANSING STATEMENT OF NET POSITION (concluded) JUNE 30,2022 Primary Government Governmental Business-type Component Activities Activities Total Units LIABILITIES(concluded) Noncurrent liabilities Noncurrent portion of compensated absences $ 9,816,316 $ 814,674 $ 10,630,990 $ Noncurrent portion of long-term obligations 58,585,005 102,759,270 161,344,275 79,075,774 Accrued interest payable,net of current portion - - - 95,898 Net pension liability 344,666,086 27,293,809 371,959,895 - Net other post-employment benefits liability 233,243,153 15,038,900 248,282,053 Total noncurrent liabilities 646,310,560 145,906,653 792,217,213 79,171,672 TOTAL LIABILITIES 716,884,833 167,124,125 884,008,958 95,748,320 DEFERRED INFLOWS OF RESOURCES Deferred inflows of resources related to pensions 4,897,680 657,358 5,555,038 1,131,356 Deferred inflows of resources related to OPEB 146,116,196 6,097,388 152,213,584 TOTAL DEFERRED INFLOWS OF RESOURCES 151,013,876 6,754,746 157,768,622 1,131,356 NET POSITION(DEFICIT) Net investment in capital assets 159,442,216 232,446,124 391,888,340 25,864 Restricted Public safety 729,503 - 729,503 - Public works 20,769,263 20,769,263 Community development 401,620 401,620 Building department 4,366,574 - 4,366,574 Debt service 29,361 2,441,780 2,471,141 Revelopment projects - - - 5,017,644 Cooley stadium capital projects - - 80,000 Endowments(nonexpendable) 1,805,027 - 1,805,027 - Unrestricted (578,995,034) 21,195,582 (557,799,452) (68,941,292) TOTAL NET POSITION(DEFICIT) $ (391,451,470) $ 256,083,486 $ (135,367,984) $ (63,817,784) The accompanying notes are an integral part of the financial statements. 28 CITY OF LANSING STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30,2022 Net(Expense)Revenue and Changes in Net Position Program Revenues Primary Government Operating Capital Grants Charges for Grants and and Governmental Business-type Component Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Units Primary government Governmental activities General government $ 19,628,516 $ 9,406,822 $ 8,400,585 $ 1,322,060 $ (499,049) $ $ (499,049) $ Public safety 78,113,026 4,423,872 3,038,693 - (70,650,461) (70,650,461) Public works 27,316,002 1,165,080 19,252,127 3,961,272 (2,937,523) (2,937,523) Recreation and culture 6,707,099 1,192,891 364,571 - (5,149,637) (5,149,637) Community and economic development 75,618,986 - 59,121,950 (16,497,036) (16,497,036) Interest on long-term debt 1,845,964 (1,845,964) (1,845,964) Total governmental activities 209,229,593 16,188,665 90,177,926 5,283,332 (97,579,670) (97,579,670) Business-type activities Sewage disposal system 22,239,978 35,943,034 - - 13,703,056 13,703,056 Municipal parking system 10,110,065 5,101,852 (5,008,213) (5,008,213) Cemetery 98,394 526,299 427,905 427,905 Golf 164,878 - (164,878) (164,878) Garbage and rubbish collection 1,509,140 3,246,590 1,737,450 1,737,450 Recycling 1,656,519 4,455,510 2,798,991 2,798,991 Total business-type activities 35,778,974 49,273,285 13,494,311 13,494,311 Total primary government $ 245,008,567 $ 65,461,950 $ 90,177,926 $ 5,283,332 (97,579,670) 13,494,311 (84,085,359) Component units Brownfield Redevelopment Authority $ 17,427,056 $ - $ 194,444 $ - (17,232,612) Tax Increment Finance Authority (2,257,609) - 2,257,609 Saginaw Street Corridor Improvement Authority - Michigan Avenue Corridor Improvement Authority - - - - Lansing Entertainment&Public Facilities Authority 6,485,452 5,428,872 1,539,600 483,020 Total component units $ 21,654,899 $ 5,428,872 $ 1,734,044 $ (14,491,983) General revenues Property taxes 47,620,607 47,620,607 12,225,147 Income taxes 37,087,593 37,087,593 Unrestricted state shared revenues 17,704,794 17,704,794 Grants and contributions not restricted to specific programs 30,115,274 30,115,274 Investment earnings(loss) (94,154) 698,662 604,508 (1,840) Miscellaneous (38,468) - (38,468) 680,163 Transfers (597,000) 597,000 Total general revenues and transfers 131,798,646 1,295,662 133,094,308 12,903,470 Change in net position 34,218,976 14,789,973 49,008,949 (1,588,513) Net position(deficit),beginning of the year (425,670,446) 241,293,513 (184,376,933) (62,229,271) Net position(deficit),end of the year $ (391,451,470) $ 256,083,486 $ (135,367,984] $ (63,817,784) The accompanying notes are an integral part of the financial statements. 29 FUND FINANCIAL STATEMENTS 30 CITY OF LANSING 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. State and Federal Grants Fund - This Special Revenue fund accounts for all revenues received from intergovernmental grants and various contributions. These revenues are used for projects as detailed in individual grant applications. CERA-MSHDA Grant Fund - This fund accounts for all revenues received from the CERA grant through the Michigan State Housing Development Authority. These revenues are used for projects as detailed in individual grant applications. 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. 31 CITY OF LANSING BALANCESHEET GOVERNMENTAL FUNDS JUNE 30,2022 State and Federal Nonmajor Grants-Special Governmental General Revenue CERA-MSHDA Funds Total ASSETS Cash and cash equivalents $ 3,958,024 $ 24,941,930 $ 6,872,941 $ 8,557,288 $ 44,330,183 Cash and cash equivalents-restricted 2,992,454 - - - 2,992,454 Equity in pooled cash and investments 10,737,817 34,100,474 44,838,291 Receivables Accounts,net 16,299,119 5,330,320 21,629,439 Taxes receivable,net 986,572 - 986,572 Special assessments - 10,714,739 10,714,739 Contracts 1,322,060 - 1,322,060 Loans - 31,880 1,185,000 1,216,880 Accrued interest - - - 2,350,196 2,350,196 Due from other governmental units 5,728,497 11,371,436 1,886,840 3,580,605 22,567,378 Inventories - - - 1,348,300 1,348,300 Prepaids 759,490 - 250 759,740 TOTALASSETS $ 42,784,033 $ 36,345,246 $ 8,759,781 $ 67,167,172 $ 155,056,232 LIABILITIES Accounts payable $ 9,899,478 $ 1,443,755 $ 498,498 $ 3,015,275 $ 14,857,006 Accrued payroll 2,891,822 35,851 2,032 92,912 3,022,617 Due to other governmental units 1,433,211 27,005 - 310,476 1,770,692 Indemnitybonds - - 43,867 43,867 Other liabilities 2,026,514 - - 14,600 2,041,114 Due to other funds - 3,738,427 51,133 478,834 4,268,394 Unearned revenue 285,856 31,060,602 8,208,118 126,005 39,680,581 TOTAL LIABILITIES 16,536,881 36,305,640 8,759,781 4,081,969 65,684,271 DEFERRED INFLOWS OF RESOURCES Unavailable revenue-fees 1,473,290 - - - 1,473,290 Unavailable revenue-contracts 1,322,060 - - 1,322,060 Unavailable revenue-loans and accrued interest receivable - 39,606 8,567,480 8,607,086 Unavailable revenue-special assessments - - 10,294,161 10,294,161 TOTAL DEFERRED INFLOWS OF RESOURCES 2,795,350 39,606 18,861,641 21,696,597 FUND BALANCES Nonspendable 759,490 - 3,153,577 3,913,067 Restricted - 35,877,471 35,877,471 Committed 785,099 5,192,514 5,977,613 Unassigned 21,907,213 21,907,213 TOTAL FUND BALANCES 23,451,802 44,223,562 67,675,364 TOTAL LIABILITIES,DEFERRED INFLOWS OF RESOURCES,AND FUND BALANCES $ 42,784,033 $ 36,345,246 $ 8,759,781 $ 67,167,172 $ 155,056,232 The accompanying notes are an integral part of the financial statements. 32 CITY OF LANSING RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION JUNE 30,2022 Fund balances-total governmental funds $ 67,675,364 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 as assets in the governmental funds. The cost of capital assets is $ 600,015,832 Accumulated depreciation is (392,173,099) Capital assets accounted for in the internal service funds,net (9,323,211) Capital assets,net 198,519,522 Some assets are not current financial resources and therefore are not reported in the Governmental Funds Balance Sheet. Deferred ambulance fees receivable 769,473 Deferred nuisance fees receivable 703,817 Deferred loans receivable 6,256,890 Deferred long-term interest receivable 2,350,196 Deferred long-term special assessments receivable 10,294,161 Deferred contract receivable 1,322,060 Deferred outflows of resources related to pensions 51,094,001 Deferred outflows of resources related to OPEB 44,986,680 Deferred inflows of resources related to pensions (4,897,680) Deferred inflows of resources related to OPEB (146,116,196) (33,236,598) Internal service funds are used by management to charge the costs of certain activities to individual funds. The assets and liabilities of certain internal service funds are included in the governmental activities in the government-wide statement of net position. Net position of governmental activities accounted for in governmental activities internal service funds 25,354,248 Long-term liabilities are not due and payable in the current period and therefore are not reported in the governmental funds balance sheet.Long-term liabilities at year-end consist of: Bonds and loans payable (58,392,919) Deferred charges on refunding 228,881 Compensated absences (10,009,574) Workers compensation (3,082,191) Accrued interest payable (598,964) Net pension liability (344,666,086) Net other post-employment benefits liability (233,243,153) (649,764,006) Net position of governmental activities $ (391,451,470) The accompanying notes are an integral part of the financial statements. 33 CITY OF LANSING STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2022 State and Federal Nonmajor Grants-Special Governmental General Revenue CERA-MSHDA Funds Total REVENUES Property taxes and special assessments $ 46,226,914 $ $ $ 1,783,693 $ 48,010,607 Income taxes 37,087,593 - 37,087,593 Licenses and permits 1,932,281 - 1,932,281 Intergovernmental 22,818,693 13,381,019 51,092,362 25,791,952 113,084,026 Charges for services 10,925,736 639,413 - 4,009,421 15,574,570 Fines and forfeits 1,335,250 - 241,033 1,576,283 Interest and rents 268,225 27,262 (175,797) 119,690 Other 25,353,395 (28,091) - 435,458 25,760,762 TOTAL REVENUES 145,948,087 14,019,603 51,092,362 32,085,760 243,145,812 EXPENDITURES Current General government 21,883,495 - 59,047 3,530,734 25,473,276 Public safety 89,206,408 377,964 - 746,942 90,331,314 Public works 12,941,208 14,126 - 12,955,334 Highways and streets - - 11,450,485 11,450,485 Recreation and culture 9,134,233 - - 9,134,233 Community and economic development 10,632,345 13,863,374 50,898,386 1,390,328 76,784,433 Debt service Principal 2,018,747 - - 2,500,169 4,518,916 Interest and fiscal charges 469,743 134,929 1,399,005 2,003,677 Capital outlay - - - 18,396,917 18,396,917 TOTAL EXPENDITURES 146,286,179 14,255,464 51,092,362 39,414,580 251,048,585 EXCESS OF REVENUES OVER (UNDER)EXPENDITURES (338,092) (235,861) (7,328,820) (7,902,773) OTHER FINANCING SOURCES(USES) Proceeds from debt issuances 27,559,000 27,559,000 Payment to refunding bond escrow agent (8,621,566) (8,621,566) Proceeds from sale of capital assets 400,000 400,000 Transfers in 100,000 235,859 9,875,000 10,210,859 Transfers out (6,082,859) - (4,725,000) (10,807,859) TOTAL OTHER FINANCING SOURCES(USES) (5,982,859) 235,859 24,487,434 18,740,434 NET CHANGE IN FUND BALANCES (6,320,951) (2) 17,158,614 10,837,661 Fund balances,beginning of year 29,772,753 2 27,064,948 56,837,703 Fund balances,end of year $ 23,451,802 $ - $ $ 44,223,562 $ 67,675,364 The accompanying notes are an integral part of the financial statements. 34 CITY OF LANSING RECONCILIATION OF THE STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30,2022 Net change in fund balances-total governmental funds $ 10,837,661 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures.However,in the statement of activities,the cost of these assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation expense in the current period. Capital outlay $ 21,729,246 Depreciation expense (11,882,675) Loss on disposal of capital assets (50,755) Excess of capital outlay over depreciation expense 9,795,816 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. Change in deferred ambulance fees receivable (295,275) Change in deferred nuisance fees receivable 345,679 Change in deferred loans receivable (436,659) Change in deferred contract receivable 1,322,060 Change in deferred long-term interest receivable 59,250 Change in deferred special assessments receivable (454,176) 540,879 Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue of certain individual funds are included in the governmental activities. Change in net position of governmental activities internal service funds 6,102,511 Repayment of long-term debt and borrowing of long-term debt is reported as expenditures and other financing sources in governmental funds, but the repayment reduces long-term liabilities and the borrowings increase long-term liabilities in the statement of net position. In the current year, these amounts consist of: Premium on bond issuance 77,343 Deferred charges on refunding (24,928) Issuance of debt (27,559,000) Debt principal retirement 13,128,284 (14,378,301) Certain expenditures are reported in governmental funds that reduce long-term liabilities for purpose of the statement of net position. Change in estimated workers compensation (292,719) Some items reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. These activities consist of: (Increase)in net pension liability (78,078,180) (Increase)in net OPEB liability (28,895,280) Increase in deferred outflows of resources related to pensions 24,416,048 (Decrease)in deferred outflows of resources related to OPEB (25,959,027) Decrease in deferred inflows of resources related to pensions 35,537,855 Decrease in deferred inflows of resources related to OPEB 94,486,263 (Increase)in accrued interest payable (18,995) Decrease in compensated absences 124,445 21,613,129 Change in net position of governmental activities $ 34,218,976 The accompanying notes are an integral part of the financial statements. 35 CITY OF LANSING PROPRIETARY FUND FINANCIAL STATEMENTS Major Funds Sewage Disposal System Fund-This fund accounts for the activities 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 Enterprise 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. 36 CITY OF LANSING STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30,2022 Governmental Business-type Activities-Enterprise Funds Activities Sewage Municipal Nonmajor Internal Disposal Parking Enterprise Service System System Funds Total Fund ASSETS Current assets Cash and cash equivalents $ - $ 3,188,257 $ 200 $ 3,188,457 $ Cash and cash equivalents-restricted 2,441,780 - - 2,441,780 - Equity in pooled cash and investments 10,039,225 - 5,470,809 15,510,034 18,599,781 Receivables,net Customers 7,310,590 70,417 47,474 7,428,481 868,978 Interest 28,686 140,204 - 168,890 - Contracts 682,232 280,391 962,623 Due from other funds 6,135,551 - 6,135,551 Due from other governmental units 26,101,046 26,101,046 - Inventories 414,880 52,521 467,401 530,785 Prepaids - - - - 1,507,562 Total current assets 53,153,990 3,679,269 5,571,004 62,404,263 21,507,106 Noncurrent assets Contract receivable,net of current portion 4,062,094 13,805,772 - 17,867,866 - Capital assets not being depreciated 21,579,017 11,545,371 403,387 33,527,775 92,892 Capital assets,net of accumulated depreciation 299,039,021 9,170,031 1,665,549 309,874,601 9,230,319 Total noncurrent assets 324,680,132 34,521,174 2,068,936 361,270,242 9,323,211 TOTAL ASSETS 377,834,122 38,200,443 7,639,940 423,674,505 30,830,317 DEFERRED OUTFLOWS OF RESOURCES Deferred amounts on refunding 829,129 3,133,669 - 3,962,798 - Deferred outflows of resources related to pensions 1,288,429 403,000 764,358 2,455,787 Deferred outflows of resources related to OPEB 911,015 284,950 540,459 1,736,424 TOTAL DEFERRED OUTFLOWS OF RESOURCES 3,028,573 3,821,619 1,304,817 8,155,009 - LIABILITIES Current liabilities Accounts payable 6,153,736 101,647 257,335 6,512,718 1,472,854 Accrued payroll 129,895 53,061 9,548 192,504 380,021 Deposit payable - 81,782 - 81,782 - Claims incurred but not reported - - - 1,500,000 Accrued interest payable 467,648 1,734,481 2,202,129 4,081 Due to other funds - 1,867,157 1,867,157 - Current portion of compensated absences 4,873 58,749 4,937 68,559 23,958 Current portion of long-term obligations 10,783,700 1,376,080 - 12,159,780 129,642 Total current liabilities 17,539,852 5,272,957 271,820 23,084,629 3,510,556 Noncurrent liabilities Compensated absences,net of current portion 494,265 68,668 251,741 814,674 929,226 Bonds and notes payable,net of current portion 73,590,940 29,168,330 - 102,759,270 1,036,287 Net pension liability 14,319,700 4,478,968 8,495,141 27,293,809 - Net other post-employment benefits liability 7,890,161 2,467,913 4,680,826 15,038,900 Total noncurrent liabilities 96,295,066 36,183,879 13,427,708 145,906,653 1,965,513 TOTAL LIABILITIES 113,834,918 41,456,836 13,699,528 168,991,282 5,476,069 DEFERRED INFLOWS OF RESOURCES Deferred inflows of resources related to pensions 344,882 107,875 204,601 657,358 - Deferred inflows of resources related to OPEB 3,198,995 1,000,593 1,897,800 6,097,388 TOTAL DEFERRED INFLOWS OF RESOURCES 3,543,877 1,108,468 2,102,401 6,754,746 - NET POSITION(DEFICIT) Net investment in capital assets 237,072,527 (6,695,339) 2,068,936 232,446,124 8,157,282 Restricted for bond reserves 2,441,780 - - 2,441,780 - Unrestricted 23,969,593 6,152,097 (8,926,108) 21,195,582 17,196,966 TOTAL NET POSITION(DEFICIT) $ 263,483,900 $ (543,242) $ (6,857,172) $ 256,083,486 $ 25,354,248 The accompanying notes are an integral part of the financial statements. 37 CITY OF LANSING STATEMENT OF REVENUES,EXPENSES,AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS YEAR ENDED JUNE 30,2022 Governmental Business-type Activities-Enterprise Funds Activities Sewage Municipal Nonmajor Internal Disposal Parking Enterprise Service System System Funds Total Funds OPERATING REVENUES Charges for services $ 35,943,034 $ 5,101,852 $ 8,228,399 $ 49,273,285 $ 95,907,146 Other - - - - 58,951 TOTAL OPERATING REVENUES 35,943,034 5,101,852 8,228,399 49,273,285 95,966,097 OPERATING EXPENSES Personnel services (796,916) 714,574 337,212 254,870 9,023,759 Purchase of goods and services 10,842,620 1,945,852 3,002,681 15,791,153 78,846,327 Other services and charges 24,005 4,650 - 28,655 - Depreciation 9,898,880 2,067,069 87,874 12,053,823 2,109,769 TOTAL OPERATING EXPENSES 19,968,589 4,732,145 3,427,767 28,128,501 89,979,855 OPERATING INCOME 15,974,445 369,707 4,800,632 21,144,784 5,986,242 NONOPERATING REVENUE(EXPENSES) Interest income(loss) 199,619 493,047 5,996 698,662 - Gain on sale of capital assets - - - - 134,526 Interest expense and fees (2,271,389) (5,377,920) (1,164) (7,650,473) (18,257) TOTAL NONOPERATING REVENUES(EXPENSES) (2,071,770) (4,884,873) 4,832 (6,951,811) 116,269 NET INCOME(LOSS) BEFORE TRANSFERS 13,902,675 (4,515,166) 4,805,464 14,192,973 6,102,511 TRANSFERS IN - 625,000 625,000 - TRANSFERS OUT (28,000) (28,000) TOTAL TRANSFERS 597,000 597,000 - CHANGE IN NET POSITION 13,902,675 (4,515,166) 5,402,464 14,789,973 6,102,511 Net position(deficit),beginning of year 249,581,225 3,971,924 (12,259,636) 241,293,513 19,251,737 Net position(deficit),end of year $ 263,483,900 $ (543,242) $ (6,857,172) $ 256,083,486 $ 25,354,248 The accompanying notes are an integral part of the financial statements. 38 CITY OF LANSING STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30,2022 Governmental Business-type Activities-Enterprise Funds Activities Sewage Municipal Nonmajor Internal Disposal Parking Enterprise Service System System Funds Total Funds CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 35,694,501 $ 5,073,220 $ 7,920,320 $ 48,688,041 $ Cash received from interfund services provided - - - - 96,437,134 Cash received for intergovernmental services 1,867,157 - 1,867,157 - Cash payments for goods and services (40,762,997) (2,409,008) (2,799,158) (45,971,163) (78,250,045) Cash payments to employees (6,797,337) (2,072,967) (3,747,273) (12,617,577) (9,865,288) NET CASH PROVIDED(USED)BY OPERATING ACTIVITIES (11,865,833) 2,458,402 1,373,889 (8,033,542) 8,321,801 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers in - 625,000 625,000 - Transfers out (28,000) (28,000) NET CASH PROVIDED(USED)BY NONCAPITAL FINANCING ACTIVITIES 597,000 597,000 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchases of capital assets (10,742,917) (764,555) - (11,507,472) (1,238,343) Proceeds from sale of capital assets 134,526 Principal paid on long-term obligations (11,257,046) (2,593,907) (118,343) (13,969,296) (233,466) Interest and costs paid on long-term obligations (2,273,838) (888,185) (1,744) (3,163,767) (19,222) Proceeds from bond issuance 636,023 636,023 Payments received on contract receivable 676,276 676,276 NET CASH USED BY CAPITAL AND RELATED FINANCING ACTIVITIES (22,961,502) (4,246,647) (120,087) (27,328,236) (1,356,505) CASH FLOWS FROM INVESTING ACTIVITIES Interest received(loss) 199,619 570,133 5,996 775,748 - NET INCREASE(DECREASE)IN CASH AND CASH EQUIVALENTS (34,627,716) (1,218,112) 1,856,798 (33,989,030) 6,965,296 Cash and cash equivalents,beginning of year 47,108,721 4,406,369 3,614,211 55,129,301 11,634,485 Cash and cash equivalents,end of year $ 12,481,005 $ 3,188,257 $ 5,471,009 $ 21,140,271 $ 18,599,781 The accompanying notes are an integral part of the financial statements. CONTINUED 39 CITY OF LANSING STATEMENT OF CASH FLOWS (concluded) PROPRIETARY FUNDS YEAR ENDED JUNE 30,2022 Governmental Business-type Activities-Enterprise Funds Activities Sewage Municipal Nonmajor Internal Disposal Parking Enterprise Service System System Funds Total Funds Reconciliation of operating income to net cash provided(used)by operating activities Operating income $ 15,974,445 $ 369,707 $ 4,800,632 $ 21,144,784 $ 5,986,242 Adjustments to reconcile operating income to net cash provided(used)by operating activities Depreciation 9,898,880 2,067,069 87,874 12,053,823 2,109,769 (Increase)decrease in: Accounts receivable (248,533) (28,632) 16,834 (260,331) (465,036) Due from other funds (6,135,551) (6,135,551) Due from other governmental units (26,101,046) (26,101,046) Inventories (100,223) (7,442) (107,665) (71,853) Prepaids 136,484 136,484 461,705 Deferred outflows of resources related to pensions (469,042) (173,722) (307,305) (950,069) - Deferred outflows of resources related to OPEB 541,830 121,580 269,935 933,345 - Increase(decrease)in: Accounts payable 2,440,448 (470,988) 74,481 2,043,941 206,510 Accrued liabilities 11,861 6,396 7,573 25,830 174,818 Due to other funds - 1,867,157 - 1,867,157 - Unearned revenue - (324,913) (324,913) Deposits payable - 12,482 - 12,482 - Compensated absences 46,819 109 16,148 63,076 54,646 Claims incurred but not reported - - (135,000) Net pension liability (744,158) 263,852 92,549 (387,757) Net other post-employment benefits liability (161,733) 214,860 189,495 242,622 Deferred inflows of resources related to pensions (1,105,804) (298,051) (604,589) (2,008,444) Deferred inflows of resources related to OPEB (5,714,026) (1,493,417) (3,073,867) (10,281,310) - NET CASH PROVIDED(USED)BY OPERATING ACTIVITIES $ (11,865,833) $ 2,458,402 $ 1,373,889 $ (8,033,542) $ 8,321,801 40 CITY OF LANSING 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. Custodial Funds 54-A District Court accounts for resources held in a trustee or agent capacity. Current tax collections fund accounts for collections of property taxes and remittances of them to the appropriate authorities. 41 CITY OF LANSING FIDUCIARY FUNDS STATEMENT OF FIDUCIARY NET POSITION JUNE 30,2022 Pension and Other Post- Employment Benefits Trust Funds Custodial Funds ASSETS Cash and cash equivalents $ 19,016,071 $ - Equity in pooled cash and investments - 19,834 Investments Mutual funds 412,206,036 - Domestic equities 111,504,339 - International equities 2,482,097 - Emerging market equities 23,967,273 - Money market funds 8,379,585 - Receivables Interest and dividends 103,075 - Prepaids 1,725 - TOTAL ASSETS 577,660,201 19,834 LIABILITIES Accounts payable 490,838 - Due to other governmental units 17,741,013 - Due to individuals and agencies - 19,834 TOTAL LIABILITIES 18,231,851 19,834 NET POSITION RESTRICTED FOR: Pension benefits 447,622,594 - Other postemployment benefits 111,805,756 - TOTAL NET POSITION $ 559,428,350 $ - The accompanying notes are an integral part of the financial statements. 42 CITY OF LANSING FIDUCIARY FUNDS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION YEAR ENDED JUNE 30,2022 Pension and Other Post- Employment Benefits Trust Funds Custodial Funds ADDITIONS TO NET POSITION Collections from or on behalf of individuals $ - $ 383,590 Collections of taxes for other governments - 126,026,215 Miscellaneous 10,942 - Investment income Change in fair value of investments (65,419,880) - Interest income (loss) (693,809) - Investment expense (778,859) - Net investment income (66,881,606) 126,409,805 Contributions Employer 54,083,628 - Plan members 4,368,664 - Total contributions 58,452,292 -- TOTAL ADDITIONS (8,429,314) 126,409,805 DEDUCTIONS FROM NET POSITION Payments to or on behalf of individuals - 383,590 Payment of taxes collected for other governments - 126,026,215 Participant benefits 76,836,730 - Administrative expenses 1,871,780 - TOTAL DEDUCTIONS 78,708,510 126,409,805 CHANGE IN NET POSITION (87,137,824) - Net position,beginning of year 646,566,174 - Net position,end of year $ 559,428,350 $ - The accompanying notes are an integral part of the financial statements. 43 COMPONENT UNITS 44 CITY OF LANSING 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 five discretely presented component units: Brownfield Redevelopment Authority Tax Increment Finance Authority Saginaw Street Corridor Improvement Authority Michigan Avenue Corridor Improvement Authority Lansing Entertainment and Public Facilities Authority 45 CITY OF LANSING COMBINING STATEMENT OF NET POSITION DISCRETELY PRESENTED COMPONENT UNITS JUNE 30,2022 Lansing Saginaw Street Michigan Avenue Entertainment Brownfield Tax Increment Corridor Corridor and Public Redevelopment Finance Improvement Improvement Facilities Authority Authority Authority Authority Authority Total ASSETS Current assets Cash and cash equivalents $ 17,029,019 $ - $ 13,930 $ 77,610 $ 1,788,612 $ 18,909,171 Equity in pooled cash and investments - 7,462,041 16,586 73,580 - 7,552,207 Cash and cash equivalents-restricted 3,791,897 1,225,747 - - 80,000 5,097,644 Receivables,net 45,410 - - - 1,120,265 1,165,675 Due from other governmental units 114 - - - - 114 Inventories - 72,221 72,221 Prepaids 62,598 62,598 Total current assets 20,866,440 8,687,788 30,516 151,190 3,123,696 32,859,630 Noncurrent assets Investments-restricted - 14,827 - 14,827 Noncurrent portion of receivable,net 100,487 - - - - 100,487 Capital assets,net of accumulated depreciation 86,948 86,948 Total noncurrent assets 100,487 14,827 86,948 202,262 TOTALASSETS 20,966,927 8,702,615 30,516 151,190 3,210,644 33,061,892 LIABILITIES Current liabilities Accounts payable 3,754,884 229,460 - - 575,777 4,560,121 Accrued liabilities - - 403,742 403,742 Current portion of accrued interest payable 269,576 9,178 - 278,754 Due to other governmental units 8,041,034 - - - - 8,041,034 Unearned revenue - - 459,428 459,428 Current portion of long-term obligations 673,913 2,119,137 40,519 2,833,569 Total current liabilities 12,739,407 2,357,775 1,479,466 16,576,648 Noncurrent liabilities Noncurrent portion of long-term obligations 38,783,885 40,271,324 - - 20,565 79,075,774 Accrued interest payable,net of current portion 95,898 95,898 Total noncurrent liabilities 38,783,885 40,367,222 20,565 79,171,672 TOTAL LIABILITIES 51,523,292 42,724,997 1,500,031 95,748,320 DEFERRED INFLOW OF RESOURCES Deferred gain on refunding 1,131,356 1,131,356 NET POSITION(DEFICIT) Net investment in capital assets - - - - 25,864 25,864 Restricted for capital projects - - - - 80,000 80,000 Restricted for redevelopment projects 3,791,897 1,225,747 - 5,017,644 Unrestricted (34,348,262) (36,379,485) 30,516 151,190 1,604,749 (68,941,292) TOTAL NET POSITION(DEFICIT) $ (30,556,365) $ (35,153,738) $ 30,516 $ 151,190 $ 1,710,613 $ (63,817,784) The accompanying notes are an integral part of the financial statements. 46 CITY OF LANSING COMBINING STATEMENT OF ACTIVITIES DISCRETELY PRESENTED COMPONENT UNITS YEAR ENDED JUNE 30,2022 Lansing Saginaw Street Michigan Avenue Entertainment Brownfield Tax Increment Corridor Corridor and Public Redevelopment Finance Improvement Improvement Facilities Authority Authority Authority Authority Authority Total EXPENSES Brownfield redevelopment authority $ 17,427,056 $ - $ - $ $ $ 17,427,056 Community development - (2,257,609) - (2,257,609) Recreation and culture - 6,485,452 6,485,452 TOTAL EXPENSES 17,427,056 (2,257,609) - 6,485,452 21,654,899 PROGRAM REVENUES Charges for services - - 5,428,872 5,428,872 Operating grants and contributions 194,444 1,539,600 1,734,044 TOTAL PROGRAM REVENUES 194,444 - - 6,968,472 7,162,916 NET PROGRAM(EXPENSE)REVENUE (17,232,612) 2,257,609 - 483,020 (14,491,983) GENERAL REVENUES Property taxes 7,585,284 4,570,190 7,673 62,000 - 12,225,147 Unrestricted investment earnings(loss) 7,926 (9,766) - - - (1,840) Other - - - - 680,163 680,163 TOTAL GENERAL REVENUES 7,593,210 4,560,424 7,673 62,000 680,163 12,903,470 CHANGE IN NET POSITION (9,639,402) 6,818,033 7,673 62,000 1,163,183 (1,588,513) Net position(deficit),beginning of year (20,916,963) (41,971,771) 22,843 89,190 547,430 (62,229,271) Net position(deficit),end of year $ (30,556,365) $ (35,153,738) $ 30,516 $ 151,190 $ 1,710,613 $ (63,817,784) The accompanying notes are an integral part of the financial statements. 47 NOTES TO FINANCIAL STATEMENTS 48 CITY OF LANSING INDEX- NOTES TO FINANCIAL STATEMENTS Page Note 1 - Summary of Significant Accounting Policies..................................................................................................50 Note2 - Budgetary Information...............................................................................................................................................60 Note3 -Deficit Fund Equity........................................................................................................................................................61 Note4-Deposits and Investments.........................................................................................................................................62 Note5 - Receivables........................................................................................................................................................................70 Note6 - Capital Assets....................................................................................................................................................................71 Note 7 -Accounts Payable and Accrued Liabilities.......................................................................................................73 Note 8 -Interfund Receivables,Payables,and Transfers..........................................................................................73 Note9 -Long-term Obligations.................................................................................................................................................74 Note 10-Fund Balances- Governmental Funds.............................................................................................................80 Note 11-Net Investment in Capital Assets........................................................................................................................80 Note 12 -Segment Information-Enterprise Funds......................................................................................................81 Note13 -Risk Management........................................................................................................................................................81 Note14-Property Taxes..............................................................................................................................................................82 Note15- Contingent Liabilities................................................................................................................................................82 Note16-Pension Plans.................................................................................................................................................................82 Note 17- Other Postemployment Benefits........................................................................................................................96 Note18-Tax Abatements...........................................................................................................................................................108 Note 19-Assets Held by Foundation....................................................................................................................................109 Note 20- Change in Accounting Principles...........................................................................................................109 Note 21-Upcoming Accounting Pronouncements.......................................................................................................110 Note22 -Subsequent Event.......................................................................................................................................................111 49 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 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: The Lansing Brownfield RedevelopmentAuthority("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. 50 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued) Discretely Presented Component Units (continued). 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 Saginaw Street Corridor Improvement Authority ("SSCIA") was created in 2009 with the goals to correct and prevent deterioration in the business district,redevelop the city's commercial corridors and promote economic growth. The Authority followed several key principles that were used in the creation of the plan and are supported by the city's master plan to transform the visually unappealing character of the corridor,to encourage pedestrians and to market the quality of the adjacent neighborhoods. In 2019, the development and tax increment financing plans were approved and allow the Authority to begin its first steps in executing the vision set forth by the corridor's residents, businesses, and other stakeholders. The Authority's governing body is appointed by the Mayor with the advice and consent of the City Council. The Authority relies on tax increment revenues as available, along with grants and other revenues. If there are bond issuances to fund the above activities,they are approved by the City Council and the legal liability for the debt remains with the City. The Michigan Avenue Corridor Improvement Authority("MACIA") was created in 2009 with the goals to correct and prevent deterioration in the business district,redevelop the city's commercial corridors and promote economic growth. The Development and Tax Increment Financing plans arrange projects into three categories: public infrastructure, current and prevent deterioration, and promote neighborhood aligned economic growth. In 2019, the development and tax increment finance plans were approved and allow the Authority to begin its first steps in executing the vision set forth by the corridor's residents, businesses,and other stakeholders. The Authority's governing body is appointed by the Mayor with the advice and consent of the City Council. The Authority relies on tax increment revenues as available, along with grants and other revenues. If there are bond issuances to fund the above activities,they 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,Center Park Productions, Grosbeck Golf Course,and the Jackson Field. 51 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued) Discretely Presented Component Units (concluded). 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 following individual component units may be obtained from each entity's administrative offices. Because separately issued financial statements are readily available for these component units, detailed notes applicable to each Component Unit are not duplicated here in accordance with GASB 61. City of Lansing Building Authority 8th Floor 124 West Michigan Avenue Lansing,Michigan 48933 Brownfield Redevelopment Authority/Tax Increment Finance Authority 1000 S.Washington Avenue,Suite 201 Lansing,Michigan 48910 Lansing Entertainment and Public Facilities Authority 333 East Michigan Avenue Lansing,Michigan 48933 For the SSCIA and the MACIA,these discretely presented component units financial statements are included in the City's audited financial statements and are not audited separately. Fiduciary Component Unit The Pension and Other Postemployment Benefits Trust Funds were established to account for the assets set aside to fund the City's pension and OPEB plans. The primary purpose of the Trusts are to provide the necessary funding for pension payments and retiree healthcare coverage provided to eligible City employees during retirement. The Trusts were established with a Board of Trustees made from individuals from the City, Council, retirement plans, and the public for each of the Employees' Retirement System and Police Officers'and Fire Fighters' Retirement System. The assets of the Trusts are for the exclusive benefit of the participants and their beneficiaries, and the assets shall not be diverted to any other activity prior to the satisfaction of all liabilities. The assets are protected from any of the City's creditors. The respective Boards of Trustees have the ability to exercise responsibility,specifically in the area of designation of management. 52 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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 IBA 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 IBA 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. 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. 53 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued) Measurement Focus.Basis of Accounting.and Financial Statement Presentation(continued). 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 funds: 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. State and Federal Grant Fund. This Special Revenue fund accounts for all revenues from intergovernmental grants and various contributions. These revenues are used for projects as detailed in individual grant applications. CERA-MSHDA Grant Fund-This fund accounts for all revenues received from the CERA grant through the Michigan State Housing Development Authority. These revenues are used for projects as detailed in individual grant applications. The City reports the following major enterprise funds: Sewage Disposal System Fund. This fund accounts for the activities of the 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. 54 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued) Measurement Focus.Basis of Accounting.and Financial Statement Presentation (concluded). 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,engineering,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 postemployment benefit distributions. The Custodial Funds accounts for resources held in a fiduciary capacity for the 54-A District Court,and property taxes collected and distributed to other governments. 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. Also, current internal balances between governmental activities and fiduciary activities have not been eliminated. 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 amounts 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. 55 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued) Assets.Deferred Outflows of Resources.Liabilities,Deferred Inflows of Resources.and Equity Deposits and Investments Restricted cash consists of amounts required to be maintained separately in accordance with bond covenants or other restrictions limiting usage of amounts in certain accounts. 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. 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. Receivables/Payabl es All receivables are reported at their gross value and, where appropriate, are reduced by the estimated portion that is expected to be uncollectible. Amounts due from other governments include amounts due from grantors for specific programs and capital projects and for capture property tax revenues not received by applicable component units as of year-end. 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. 56 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued) Assets.Deferred Outflows of Resources.Liabilities,Deferred Inflows of Resources.and Equity(continued Receivables/Payables(concluded) 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. 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. Contract 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, flowage rights, 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. 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. 57 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued) Assets.Deferred Outflows of Resources.Liabilities,Deferred Inflows of Resources.and Equity(continued Capital Assets(concluded) 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. 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 Flowage rights 30 Infrastructure 10-75 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 assets 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 The City permits 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. 58 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued) Assets.Deferred Outflows of Resources.Liabilities,Deferred Inflows of Resources.and Equity(continued 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 assets 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 when applicable. 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 applicable. 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. 59 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(concluded) Assets.Deferred Outflows of Resources. Liabilities,Deferred Inflows of Resources,and Equity(concluded 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 to 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. NOTE 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. 60 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 2 -BUDGETARY INFORMATION (concluded) ➢ 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 or on the City's website at www.lansingmi.gov. ➢ 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"). ➢ Appropriations lapse at year-end for all annual budgets. Appropriations are automatically carried forward for project-type budgets. NOTE 3 -DEFICIT FUND EQUITY The Cemetery,Garbage and Rubbish Collection,and Recycling Enterprise Funds reported deficits in unrestricted net position of$1,380,849,$2,006,521,and$5,657,833,respectively,primarily as a result of the recognition of net pension and net other postemployment benefit liabilities in these funds. The Tax Increment Finance Authority and the Brownfield Redevelopment Authority component units reported deficits in unrestricted net position of$36,379,485 and$34,348,262,respectively at June 30,2022. The deficits are a result of full-accrual accounting for long-term obligations,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). 61 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 4-DEPOSITS AND INVESTMENTS Following is a reconciliation of deposit and investment balances for the primary government and component units(including both pooled cash and investments as well as pension and other postemployment benefit(OPEB) trust fund balances) as of June 30,2022: Primary Component Fiduciary Reporting Government Units Funds Entity Cash and cash equivalents $ 47,518,640 $ 18,909,171 $ 19,016,071 $ 85,443,882 Equity in pooled cash and investments 78,948,106 7,552,207 19,834 86,520,147 Cash and cash equivalents-restricted 5,434,234 5,097,644 - 10,531,878 Investments - 14,827 558,539,330 558,554,157 $ 131,900,980 $ 31,573,849 $ 577,575,235 $ 741,050,064 Deposits and investments Bank deposits Checking/savings accounts-Pension&OPEB related-nonpooled $ 19,016,071 Checking/savings accounts-City-wide accounts-all other 141,491,380 Investment in securities and mutual funds Pooled investments 20,984,559 Employees'retirement system investments 187,317,505 Police and fire retirement system investments 331,499,331 Employees'money purchase pension plan investments 4,549,579 Retiree health care VEBA investments 35,172,914 Tax increment finance authority investments-pooled investments 860,565 Total investment in securities and mutual funds 740,891,904 Cash on hand 158,159 Total $ 741,050,063 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, $160,017,893 of the City's bank balance of$162,812,593 was exposed to custodial credit risk because it was uninsured and uncollateralized. The book balance of all deposits (other than pension & OPEB related) was $160,507,451. 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. 62 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 4-DEPOSITS AND INVESTMENTS(continued) 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. Disclosure related to the TIFA pooled investment are described in their separately issued, readily available financial statements so they are not presented here in accordance with GASB 61. Credit Risk State law limits investments to specific government securities, certificates of deposit and bank accounts with qualified financial institutions, commercial paper with specific maximum maturities and ratings when purchased,bankers acceptances of specific financial institutions, qualified mutual funds and qualified external investment pools as identified in the list of authorized investments in the summary of significant accounting policies. The City's investment policy does not have specific limits in excess of state law on investment credit risk. Credit risk ratings,where applicable,are summarized as follows: S&P AAAm $ 5,013,204 A 3,250,611 BBB 11,617,629 Not rated 850,722 Assets not subject to credit risk 252,393 $ 20,984,559 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 $ 20,304,264 1-5 years 429,212 No maturity 251,083 $ 20,984,559 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. 63 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 4- DEPOSITS AND INVESTMENTS (continued) 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. INVESTMENT TYPE Level 1 Level 2 Level 3 Total U.S.treasuries $ - $ 850,722 $ - $ 850,722 Commercial paper - 14,868,240 - 14,868,240 Money market funds 252,393 - - 252,393 $ 252,393 $ 15,718,962 $ - 15,971,355 Investments carried at net asset value Michigan CLASS government investment pool 5,013,204 $ 20,984,559 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. It has a rating of AAAm from Standard and Poor's with a weighted average maturity of 36 days. At year end,the net asset value of the City's investment in Michigan CLASS was$5,013,204. 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. 64 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 4- DEPOSITS AND INVESTMENTS(continued) Pension and Other Postemployment Benefit Trust Funds The deposits and investments of the City's pension and other postemployment benefit trust funds are maintained separately from the City's pooled cash and investments and are subject to separate investment policies and State statutes. Accordingly, the required disclosures for the pension and OPEB deposits and investments are presented separately. Deposits The pension and OPEB trust funds maintain demand deposit accounts and equity in pooled cash to handle operational transactions. The book balance of such deposits totaled$19,016,071 at year end. Investments The Michigan Public Employees Retirement Systems' Investment Act, Public Act 314 of 1965, as amended, authorizes the pension trust funds to invest in stocks, government and corporate securities, mortgages, real estate,and various other investment instruments,subject to certain limitations. The retirement boards have the responsibility and authority to oversee the investment portfolio. Various professional investment managers are contracted to assist in managing the pension trust funds'assets. All investment decisions are subject to Michigan law and the investment policy established by the retirement boards. The investments of each pension trust fund are held in a bank administered trust fund. Following is a summary of pension and other postemployment benefits investments as of June 30, 2022: Employees' Police and Fire Employees' Retiree Retirement Retirement Money Purchase Health Care System System Pension Plan VEBA Totals Domestic corporate security mutual funds $ 13,552,775 $ 28,565,101 $ $ $ 42,117,876 Domestic equities Not on securities loan 28,621,067 56,336,367 84,957,434 On securities loan 10,018,259 16,528,646 26,546,905 International equities Not on securities loan 461,659 916,956 1,378,615 On securities loan 421,278 682,204 1,103,482 Emerging markets equities 8,323,496 14,668,603 975,174 23,967,273 Real estate investment mutual funds 23,302,794 31,408,488 - 54,711,282 International equity mutual funds 77,957,940 136,832,026 206,392 3,788,033 218,784,391 Domestic equity mutual funds 20,421,271 41,676,467 3,664,310 14,306,474 80,068,522 Domestic debt securities mutual funds - - 678,877 15,845,088 16,523,965 Money market funds 4,236,966 3,884,473 - 258,146 8,379,585 $ 187,317,505 $ 331,499,331 $ 4,549,579 $ 35,172,915 $ 558,539,330 65 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 4-DEPOSITS AND INVESTMENTS (continued) Credit Risk The City's pension investment policies provide that at least 90%of its investments in fixed income securities be rated BBB- or better by a nationally recognized statistical rating organization and the remaining 10%be rated at least B-or better. The City's pension and other postemployment benefits investments were rated by Standard &Poor's as follows: Employees' Police and Fire Employees' Retiree Retirement Retirement Money Purchase Health Care System System Pension Plan VEBA Totals AAA $ $ - $ 622,856 $ 9,208,123 $ 9,830,979 S&P AAAm - - 258,147 258,147 AA - 663 679,193 679,856 A - - 1,358,252 1,358,252 BBB - 55,358 3,112,564 3,167,922 BB - - 772,990 772,990 B - 198,687 198,687 Not rated 17,789,741 32,449,574 - 515,279 50,754,594 Assets not subject to credit risk 169,527,764 299,049,757 3,870,702 19,069,680 491,517,903 $ 187,317,505 $ 331,499,331 $ 4,549,579 $ 35,172,915 $ 558,539,330 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 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. 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. 66 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 4- DEPOSITS AND INVESTMENTS (continued) 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 Retirement Retirement Money Purchase Health Care System System Pension Plan VEBA Totals International equities Canada $ 531,823 $ 933,790 $ $ - $ 1,465,613 Italy 14,495 29,357 - 43,852 United Kingdom 87,014 176,473 - 263,487 France 122,397 243,034 - 365,431 Israel 127,208 216,506 - 343,714 International mutual funds 77,957,940 136,832,026 206,392 3,788,033 218,784,391 $ 78,840,877 $ 138,431,186 $ 206,392 $ 3,788,033 $ 221,266,488 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 30,2022,maturities of the City's pension and other postemployment benefits trust debt securities, money market funds, and collateralized mortgage obligations were as follows: Employee Retirement System Fixed income investments with no maturity Domestic corporate securities mutual funds $ 13,552,775 Money market funds 4,236,966 $ 17,789,741 Police and Fire Retirement System Fixed income investments with no maturity Domestic corporate securities mutual funds $ 28,565,101 Money market funds 3,884,473 $ 32,449,574 67 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 4-DEPOSITS AND INVESTMENTS (continued) Interest Rate Risk(concluded) Employees'Money Purchase Pension Plan Investment Maturities(fair value by years) Less than 1 1-5 6-10 More than 10 Total Domestic debt securities mutual funds $ $ 483,225 $ 195,652 $ - $ 678,877 Retiree Healthcare VEBA Investment Maturities(fair value by years) Less than 1 1-5 6-10 More than 10 Total Domestic debt securities mutual funds $ $ 10,531,989 $ 5,313,099 $ - $ 15,845,088 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. 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, 2022,the fair value of securities on loan by the Employees' Retirement System and the Police and Fire Retirement System were $10,439,537 and $17,210,850, respectively, for which the Plans' received cash collateral of$10,797,687 and$17,757,478,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. 68 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 4-DEPOSITS AND INVESTMENTS (continued) Fair Value Measurement(continued) The City has the following recurring fair value measurements as of June 30, 2022: Employee Retirement System INVESTMENT TYPE Level 1 Level 2 Level 3 Total Domestic equities $ 38,639,326 $ - $ - $ 38,639,326 International equities 882,937 - - 882,937 Emerging market equities 8,323,496 - - 8,323,496 Mutual funds 111,931,986 11,319,855 - 123,251,841 Money market funds 4,236,966 - - 4,236,966 $ 164,014,711 $ 11,319,855 $ - 175,334,566 Investments carried at net asset value Real estate investment trusts 11,982,939 $ 187,317,505 Police and Fire Retirement System INVESTMENT TYPE Level 1 Level 2 Level 3 Total Domestic equities $ 72,865,013 $ - $ - $ 72,865,013 International equities 1,599,160 - - 1,599,160 Emerging market equities 14,668,603 - - 14,668,603 Mutual funds 186,254,666 16,298,214 - 202,552,880 Money market funds 3,884,473 - - 3,884,473 $ 279,271,915 $ 16,298,214 $ - 295,570,129 Investments carried at net asset value Real estate investment trusts 15,110,275 International equity mutual funds 20,818,927 $ 331,499,331 69 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 4-DEPOSITS AND INVESTMENTS (concluded) Fair Value Measurement(concluded). 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, 2022. 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, 2022, the City has $1,226,639 outstanding on initial commitments of$4,300,000 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. Employees'Money Purchase Pension Plan INVESTMENT TYPE Level 1 Level 2 Level 3 Total Mutual funds $ 4,549,579 $ $ $ 4,549,579 Retiree Healthcare VEBA INVESTMENT TYPE Level 1 Level 2 Level 3 Total Emerging market equities $ 975,174 $ $ $ 975,174 Mutual funds 33,939,594 33,939,594 Money market funds 258,146 258,146 $ 35,172,914 $ $ $ 35,172,914 NOTE 5 -RECEIVABLES Receivables are comprised of the following: Governmental Business-type Component Activities Activities Units Accounts receivable $ 22,797,917 $ 7,438,481 $ 1,145,545 Taxes receivable 1,086,572 - - Special assessments receivable 10,714,739 - - Loans receivable 1,216,880 - 145,897 Contracts receivable 1,322,060 - - Accrued interest receivable 2,350,196 168,890 - Due from other governments 22,567,378 26,101,046 114 Contract receivable - 18,830,489 - Allowance for uncollectable accounts (399,500) (10,000) (25,280) $ 61,656,242 $ 52,528,906 $ 1,266,276 Amount not expected to be collected within one year $ 19,718,161 $ 17,867,866 $ 100,487 70 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 6- CAPITAL ASSETS Capital asset activity for the year ended June 30,2022,was as follows: Balance Additions/ Deletions/ Balance July 1,2021 Reclassifications Reclassifications June 30,2022 Governmental Activities Capital assets not being depreciated Land $ 25,435,297 $ - $ - $ 25,435,297 Construction in process 9,113,448 15,071,940 (656,760) 23,528,628 Subtotal 34,548,745 15,071,940 (656,760) 48,963,925 Capital assets being depreciated Land improvements 28,722,283 231,611 - 28,953,894 Equipment and vehicles 43,995,848 1,855,453 (1,434,444) 44,416,857 Buildings 136,413,057 1,923,384 - 138,336,441 Flowage rights 20,032,880 - - 20,032,880 Infrastructure 314,769,874 4,541,961 319,311,835 Subtotal 543,933,942 8,552,409 (1,434,444) 551,051,907 Less accumulated depreciation for: Land improvements (14,849,775) (1,178,107) - (16,027,882) Equipment and vehicles (36,256,665) (2,433,602) 1,383,689 (37,306,578) Buildings (99,745,479) (4,399,2451 - (104,144,724) Flowage rights (667,7631 - (667,7631 Infrastructure (228,712,425) (5,313,727) - (234,026,152) Subtotal (379,564,344) (13,992,444) 1,383,689 (392,173,099) Net capital assets being depreciated 164,369,598 (5,440,035) (50,755) 158,878,808 Capital assets,net $ 198,918,343 $ 9,631,905 $ (707,515) $ 207,842,733 At June 30, 2022, the City's governmental activities had outstanding commitments through construction contracts of approximately$44,101,000. Depreciation expense was charged to the following governmental activities: Depreciation of governmental activities by function General government $ 1,043,526 Public safety 753,597 Public works 5,409,502 Recreation and culture 3,074,404 Community and economic development 1,601,646 Internal service fund 2,109,769 Total depreciation expense-governmental activities $ 13,992,444 71 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 6- CAPITAL ASSETS (concluded) Balance Additions/ Deletions/ Balance July 1,2021 Reclassifications Reclassifications June 30,2022 Business-Type Activities Capital assets not being depreciated Land $ 12,369,507 $ - $ - $ 12,369,507 Construction in progress 31,640,552 10,403,508 (20,885,792) 21,158,268 Subtotal 44,010,059 10,403,508 (20,885,792) 33,527,775 Capital assets being depreciated Land improvements 30,077,106 - 30,077,106 Equipment and vehicles 10,299,319 577,259 10,876,578 Buildings 193,558,507 1,330,617 194,889,124 Sewers 344,735,339 20,081,880 364,817,219 Subtotal 578,670,271 21,989,756 600,660,027 Less accumulated depreciation for: Land improvements (27,157,621) (573,902) (27,731,523) Equipment and vehicles (7,532,817) (433,140) (7,965,957) Buildings (121,006,399) (4,045,371) (125,051,770) Sewers (123,034,766) (7,001,410) (130,036,176) Subtotal (278,731,603) (12,053,823) (290,785,426) Net capital assets being depreciated 299,938,668 9,935,933 309,874,601 Capital assets,net $ 343,948,727 $ 20,339,441 $ (20,885,792) $ 343,402,376 At June 30, 2022, the City's business-type activities had outstanding commitments through construction contracts of approximately$1,679,000. Depreciation expense was charged to the following business-type activities: Depreciation of business-type activities by function Sewage disposal system $ 9,898,880 Municipal parking system 2,067,069 Cemetery 9,827 Golf 72,681 Recycling 5,366 Total depreciation expense-business-type activities $ 12,053,823 72 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 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 $ 16,329,860 $ 6,512,718 $ 4,560,121 Accrued payroll 3,402,638 192,504 - Deposits payable - 81,782 - Due to other governments 1,770,692 - 8,041,034 Claims incurred but not reported 1,500,000 - - Other 2,084,981 - 403,742 $ 25,088,171 $ 6,787,004 $ 13,004,897 NOTE 8-INTERFUND RECEIVABLES,PAYABLES,AND TRANSFERS The composition of interfund balances of the primary government as of June 30, 2022,was as follows: Due to and from primary government funds Due to Sewer Disposal System Fund Municipal Parking System fund $ 1,867,157 State&Federal Grant fund 3,738,427 CERA-MSHDA fund 51,133 Nonmajor governmental funds 478,834 $ 6,135,551 The above balance generally resulted from a time lag between the dates that interfund goods and services were provided or reimbursable expenditures occur, transactions were recorded in the accounting system, and payments between funds were made. For the year ended June 30,2022,interfund transfers consisted of the following: Transfers to General Fund from: Nonmajor governmental funds (1) $ 100,000 Transfers to State and Federal Grants Fund from: General fund (3) $ 235,859 73 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 8-INTERFUND RECEIVABLES,PAYABLES,AND TRANSFERS (concluded) Transfers to nonmajor governmental funds from: General fund (3) $ 5,847,000 Nonmajor enterprise funds (2) 28,000 Nonmajor governmental funds (1)(2) 4,000,000 $ 9,875,000 Transfers to nonmajor enterprise funds from: Nonmajor governmental funds (2) $ 625,000 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 to assist in covering specific outlays or general operational costs as applicable; (2) move receipts restricted to or allowed for debt service or capital projects from the funds collecting the receipts to the respective fund as debt service payments become due or capital outlay is constructed; and (3) use unrestricted revenues collected in the General Fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. NOTE 9-LONG-TERM OBLIGATIONS 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: Amounts Issuance Interest Original Balance Additions/ Balance Due Within Date Rates Amount July 1,2021 (Deletions) June 30,2022 One Year Governmental Activities 2013 Energy Efficiency Refunding Bonds-Limited Tax 1/15/2013 2.40% $ 5,645,000 $ 655,000 $ (655,000) $ - $ - 2010 Recovery Zone Economic Development Bonds 12/13/2010 3.40%-7.25% 3,200,000 - - - - 2015 Lansing Center Refunding Bonds-Limited Tax 12/17/2015 2.00%-3.00% 1,770,000 310,000 (310,000) - - 2018 Michigan Transportation Fund Bonds 9/12/2018 3.50% 1,665,000 570,000 (570,000) - - 2019 General Obligation Refunding-Limited Taxi' 4/10/2019 3.00%-4.00% 6,938,699 6,390,300 (561,000) 5,829,300 576,300 2021 Capital Improvement Bonds,Series 2021(LTGO) 12/21/2021 2.15% 4,490,000 - 4,185,000 4,185,000 260,000 Montgomery Drain District-Series 2020A G.O.Bonds 9/8/2020 3.00% 20,032,880 20,032,880 (417,880) 19,615,000 370,000 Total Governmental Activities 43,741,579 27,958,180 1,671,120 29,629,300 1,206,300 74 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 9-LONG-TERM OBLIGATIONS(continued) General Obligation Bonds (concluded) Amounts Issuance Interest Original Balance Additions/ Balance Due Within Date Rates Amount July 1,2021 (Deletions) June 30,2022 One Year Business-type Activities 2009 Building Authority Refunding Bonds-Limited Tax 11/9/2009 6.25%-6.85% 8,161,691 1,905,641 (763,908) 1,141,733 711,080 2014 Building Authority Refunding Bonds-Limited Tax 3/21/2014 4.75% 7,245,000 - - - - 2015 Building Authority Refunding Bonds-Limited Tax 12/17/2015 2.00%-3.00% 6,765,000 1,185,000 (1,185,000) - - 2017 Building Authority Refunding Bonds-Limited Tax 12/11/2017 3.305%-4.075% 10,805,000 10,805,000 - 10,805,000 - 2020 Building Authority Refunding Bonds-Limited Tax 8/13/2020 0.621%-2.793% 8,735,000 8,635,000 (100,000) 8,535,000 100,000 2000 Limited Tax Sewer Bond-5005-12 3/30/2000 2.50% 9,447,830 - - - - 2001 Limited Tax Sewer Bond-5005-13 3/29/2001 2.50% 10,573,046 648,046 (648,046) - - 2002 Limited Tax Sewer Bond-5005-14 3/28/2002 2.50% 12,381,131 2,226,131 (725,000) 1,501,131 740,000 2003 Limited Tax Sewer Bond-5005-15 3/27/2003 2.50% 10,145,688 2,420,688 (585,000) 1,835,688 605,000 2004 Limited Tax Sewer Bond-5005-16 3/25/2004 2.125% 3,842,649 1,092,649 (210,000) 882,649 215,000 2005 Limited Tax Sewer Bond-5005-17 3/25/2004 2.125% 8,003,778 2,248,778 (435,000) 1,813,778 445,000 2005 Limited Tax Sewer Bond-5005-18 3/34/200S 1.62S% 13,389,371 4,069,371 (680,000) 3,389,371 680,000 2006 Limited Tax Sewer Bond-5005-19 3/30/2006 1.625% 18,216,346 6,811,346 (950,000) 5,861,346 960,000 2007 Limited Tax Sewer Bond-5005-20 3/29/2007 1.625% 24,244,726 10,109,726 (1,225,000) 8,884,726 1,250,000 2008 Limited Tax Sewer Bond-5005-21 4/1/2008 2.50% 27,494,933 13,995,453 (1,405,000) 12,590,453 1,440,000 2008 Limited Tax Sewer Bond-5005-22 4/17/2009 2.50% 14,455,604 8,765,604 (700,000) 8,065,604 720,000 2010 Limited Tax Sewer Bond-5411-01 1/22/2010 2.50% 8,548,000 5,538,000 (415,000) 5,123,000 420,000 2015 Limited Tax Sewer Bond-5211-01 4/9/2014 2.50% 3,372,405 2,527,405 (155,000) 2,372,405 155,000 2015 Limited Tax Sewer Bond-5211-02 7/9/2014 2.50% 1,977,487 1,620,065 (100,000) 1,520,065 100,000 2016 Limited Tax Sewer Bond-5581-01 4/11/2016 2.50% 1,309,872 2,811,310 (135,000) 2,676,310 140,000 2019 Limited Tax Sewer Bond-5005-23(4) 4/10/2018 2.00% 9,395,000 7,856,804 241,023 8,097,827 400,000 2019 Limited Tax Sewer Bond-5672-01(') 6/7/2019 2.00% 56,280 4,514,105 (405,000) 4,109,105 410,000 2019 General Obligation Refunding-Limited Tax-Sewer 4/10/2019 3.00%-4.00% 7,681,301 6,139,700 (539,000) 5,600,700 553,700 2020 CIB&Refunding Bonds-Municipal Parking 8/13/2020 3.00%-5.00% 9,405,000 9,235,000 (545,000) 8,690,000 565,000 Total Business-type Activities 235,652,138 115,160,822 (11,664,931) 103,495,891 10,609,780 Total General Obligation Bonds $ 279,393,717 $ 143,119,002 $ (9,993,811) $ 133,125,191 $ 11,816,080 (1)These debt issues are split between governmental and business-type activities (2)This debt issue was originally issued in 2019 but proceeds are drawn as the project progresses (3)This debt is funded by general assessments and drain code tax (4)Bonds are not fully drawn down-current draw$636,023 The purpose of each of the General Obligation bonds issued in the Governmental activities was for an energy conservation project,economic development projects,facility improvements,various street improvements,and drainage projects. The purpose of each of the General Obligation(G.O.)bonds issued in the Business-type activities for the Building Authority were for municipal parking system projects. The G.O. sewer bonds issued were for various sewer capital improvement projects throughout the City. 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: Amounts Issuance Interest Original Balance Balance Due Within Date Rates Amount July 1,2021 Deletions June 30,2022 One Year Business-type Activities 2013 Sewer Revenue Refunding Bonds 12/27/2012 2.40% $ 21,765,000 $ 10,975,000 $ (1,550,000) $ 9,425,000 $ 1,550,000 The purpose of these noted bonds were for sewer capital improvement projects. 75 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 9-LONG-TERM OBLIGATIONS (continued) Pledged Revenues The City has pledged future sewer customer revenues,net of specified operating expenses,to repay$9,425,000 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$2,008,188 and$26,372,944,respectively. Installment Purchase Agreements The government has entered into installment purchase agreements for equipment and related capital assets. Installment purchase agreements outstanding at year-end are as follows: Amounts Issuance Interest Original Balance Additions/ Balance Due Within Date Rate Amount July 1,2021 (Deletions) June 30,2022 One Year Governmental Activities 2014 Lease Purchase Agreement-Recycling Trucks 9/12/2013 1.96% $ 1,550,855 $ 105,620 $ (105,620) $ - $ 2015 Ballpark Improvements Installment Purchase 2/13/2015 3.00% 13,500,000 9,051,11S (9,051,115) - - 2021 Installment Purchase Agreement(LTGO) 8/18/2021 2.14% $ 10,569,000 - 10,300,000 10,300,000 639,000 2021 Installment Purchase Agreement(LTGO) 9/1/2021 1.81% 12,500,000 12,157,000 12,157,000 770,000 $ 38,119,855 $ 9,156,735 $ 13,300,265 $ 22,457,000 $ 1,409,000 Business-type Activities 2014 Contract Purchase Agreement-Recycling Carts 9/12/2013 1.96% $ 1,737,000 $ 118,343 $ (118,343) $ - $ The purpose of the lease purchase agreements were for vehicle acquisitions as noted and the installment purchase agreements were for various facility improvements. 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: Amounts Issuance Interest Original Balance Additions/ Balance Due Within Date Rate Amount July 1,2021 (Deletions) June 30,2022 One Year Governmental Activities HUD Section 108 Loan 5/28/2015 1.52% $ S,900,000 $ S,51S,000 $ (390,000) $ 5,12S,000 $ 400,000 2020 IPA Fire Truck 10/28/2020 1.40% 1,390,000 1,293,775 (127,846) 1,165,929 129,642 2014 SIB Loan 3/27/2014 3.00% 1,828,428 851,686 (256,289) 595,397 263,978 $ 9,118,428 $ 7,660,461 $ (774,135) $ 6,886,326 $ 793,620 The purpose of the HUD loan was for applicable capital improvements within the City. The IPA was for the acquisition of a new fire truck for public safety purposes. The purpose of the SIB loan was for various street improvements. 76 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 9-LONG-TERM OBLIGATIONS(continued) Current Year Defeasances of Debt On August 18,2021,the City defeased the 2015 Ballpark Improvements Installment Purchase,which were due and payable through 2030. This was accomplished by establishing irrevocable trust with an escrow agent composed of U.S. Government Securities sufficient to meet the applicable principal and interest payments. The City issued 2021 Installment Purchase Agreement in the amount of$10,569,000. Accordingly,the trust account assets and liabilities for the defeased bonds are not included in the City's financial statements. As a result of the advance refunding, the City decreased its total debt service requirements by $468,598, which resulted in an economic gain (difference between the present value of the debt service payments on the old and new debt) of $325,899. Prior Year Defeased Debt As of June 30, 2022, defeased bonds related to the prior year refunding of the 2009 Building Authority Capital Appreciation Bonds were still outstanding in the amount of$1,009,386. The defeased bonds are scheduled to be paid by the escrow agent in installments on June 1 of years 2023 through 2024. As of June 30,2022,defeased bonds related to the prior year refunding of the 2018 Building Authority Refunding Bonds were still outstanding in the amount of$4,205,000. The defeased bonds are scheduled to be paid by the escrow agent in installments through 2027. As of June 30, 2022, defeased bonds related to the prior year refunding of the 2014 TIFA and BA Refunding Bonds were still outstanding in the amount of$10,965,000. The defeased bonds are scheduled to be paid by the escrow agent in June 2024. The following is a summary of changes in long-term debt (including current portion) of the City for the year ended June 30,2022. As restated Amounts Balance Balance Due Within July 1,2021 Additions Deletions June 30,2022 One Year Governmental Activities General obligation bonds $ 27,958,180 $ 4,490,000 $ (2,818,880) $ 29,629,300 $ 1,206,300 Notes from direct borrowings and direct placements Installment purchase agreements 9,156,735 23,069,000 (9,768,735) 22,457,000 1,409,000 Loans payable 7,660,461 - (774,135) 6,886,326 793,620 44,775,376 27,559,000 (13,361,750) 58,972,626 3,408,920 Deferred amounts for issuance premiums 663,565 - (77,343) 586,222 - Compensated absences 11,032,557 1,076,643 (1,146,442) 10,962,758 1,146,442 Accrued workers compensation 2,789,472 1,758,032 (1,465,313) 3,082,191 647,114 $ 59,260,970 $ 30,393,675 $ (16,050,848) $ 73,603,797 $ 5,202,476 77 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 9-LONG-TERM OBLIGATIONS (continued) As restated Amounts Balance Balance Due Within July 1,2021 Additions Deletions June 30,2022 One Year Business-type Activities General obligation bonds $ 115,160,822 $ 636,023 $ (12,300,954) $ 103,495,891 $ 10,609,780 Revenue bonds 10,975,000 - (1,550,000) 9,425,000 1,550,000 Notes from direct borrowings and direct placements Installment purchase agreements 118,343 - (118,343) - - 126,254,165 636,023 (13,969,297) 112,920,891 12,159,780 Deferred amounts For issuance discounts (210,232) - 65,290 (144,942) - For issuance premiums 2,352,719 - (209,618) 2,143,101 - Compensated absences 820,157 131,635 (68,559) 883,233 68,559 $ 129,216,809 $ 767,658 $ (14,182,184) $ 115,802,283 $ 12,228,339 Component Units Brownfield Redevelopment Authority Revenue bonds $ 28,390,000 $ 11,330,000 $ $ 39,720,000 $ 625,000 Direct borrowings and direct placements Loan payable 476,820 - 476,820 48,913 28,866,820 11,330,000 40,196,820 673,913 Less unamortized discount on general obligation bonds (547,203) (214,385) 22,566 (739,022) - 28,319,617 11,115,615 22,566 39,457,798 673,913 Tax Increment Financing Authority General obligation bonds 28,315,000 - (50,000) 28,265,000 50,000 Direct borrowings and direct placements Contract payable 11,029,889 (1,020,309) 10,009,580 - 39,344,889 (1,070,309) 38,274,580 50,000 Add accreted interest on contract payable 8,255,052 (4,139,171) 4,115,881 2,069,137 Less unamortized discount on general obligation bonds (60,384) 60,384 - - 47,539,557 (5,149,096) 42,390,461 2,119,137 Lansing Entertainment and Public Facilities Authority Direct borrowings and direct placements Lease payable 101,308 (40,224) 61,084 40,519 Total component units $ 75,960,482 $ 11,115,615 $ (5,166,754) $ 81,909,343 $ 2,833,569 Details applicable to the Component Units long-term obligations are readily available in their separate issued financial statements and are not duplicated here in accordance with GASB 61. 78 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 9-LONG-TERM OBLIGATIONS(concluded) 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 General Obligation Bonds Revenue Bonds Ending Governmental Activities Business-Type Activities Business-Type Activities June 30, Principal Interest Principal Interest Principal Interest 2023 $ 1,206,300 $ 788,326 $ 10,609,780 $ 3,630,665 $ 1,550,000 $ 380,688 2024 1,254,250 712,338 10,547,534 3,072,899 1,575,000 303,188 2025 1,304,750 674,612 9,525,938 2,113,795 1,575,000 224,438 2026 1,355,250 635,515 9,546,177 1,918,388 1,575,000 145,688 2027 1,410,750 594,875 8,878,621 1,687,072 1,575,000 98,438 2028-2032 6,260,050 2,261,668 30,506,184 5,568,026 1,575,000 49,218 2033-2037 4,647,950 1,520,224 17,062,520 2,331,632 - - 2038-2042 3,615,000 1,105,199 6,819,137 295,077 2043-2047 4,395,000 688,290 - - 2048-2051 4,180,000 181,731 - - - $ 29,629,300 $ 9,162,778 $ 103,495,891 $ 20,617,554 $ 9,425,000 $ 1,201,658 Debt service requirements to maturity for the notes from direct borrowings and direct placements of the City are as follows: Year Direct Borrowings and Direct Placements Ending Governmental Activities June 30, Principal Interest 2023 $ 2,202,620 $ 262,514 2024 2,249,446 272,949 2025 2,077,747 242,299 2026 2,064,183 216,891 2027 2,110,082 192,381 2028-2032 11,042,248 669,791 2033-2034 7,597,000 119,330 $ 29,343,326 $ 1,976,155 79 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 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: State and Nonmajor General Federal CERA- Governmental Fund Grants MSHDA Funds Total Fund Balances Nonspendable Inventory $ - $ $ $ 1,348,300 $ 1,348,300 Prepaids 759,490 250 759,740 Corpus of permanent funds - 1,805,027 1,805,027 Restricted Major and local streets-public works 17,335,275 17,335,275 Drug law and narcotics enforcement-public safety 729,503 729,503 Downtown Lansing-community development-public safety 401,619 401,619 Debt service 29,361 29,361 Building department 4,366,574 4,366,574 Community development 1 1 Capital projects-public works - 13,015,138 13,015,138 Committed Pension/OPEB 785,099 - 785,099 City parks - 491,589 491,589 Capital improvements - 4,700,925 4,700,925 Unassigned 21,907,213 21,907,213 TOTAL FUND BALANCES $ 23,451,802 $ $ $ 44,223,562 $ 67,675,364 NOTE 11 - NET INVESTMENT IN CAPITAL ASSETS The composition of net investment in capital assets as of June 30,2022,was as follows: Govermmntal Business-type Component Activities Activities Units Capital assets Capital assets not being depreciated $ 48,963,925 $ 33,527,775 $ Capital assets being depreciated,net 158,878,808 309,874,601 86,948 Total capital assets 207,842,733 343,402,376 86,948 Related debt General obligation bonds 29,629,300 103,495,891 Direct borrowing and direct placements - 61,084 Revenue bonds 9,425,000 Installment purchase agreements(IPA) 22,457,000 Loans payable 6,886,326 Unamortized bond discounts (144,942) Unamortized bond premiums 586,222 2,143,101 Deferred charge on bond refunding (228,881) (3,962,798) Unspent IPA proceeds (10,929,450) Total related debt 48,400,517 110,956,252 61,084 Net investment in capital assets $ 159,442,216 $ 232,446,124 $ 25,864 80 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 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. NOTE 13 - RISK MANAGEMENT The City of Lansing is exposed to various risks of loss that are covered by the City's policies, including losses related to issues of cyber security, liability, errors and omissions, flood, boiler and machinery, property, employee bonding, auto, crime, ERISA considerations, and employee injuries. The City carries commercial insurance to cover these risks. Settled claims related to the commercial insurance have not exceeded the amount of insurance coverage during the past three years. 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, 2022 2021 Estimated liability,beginning of year $ 1,635,000 $ 400,000 Estimated claims incurred, including changes in estimates 11,139,554 12,302,617 Claim payments (11,274,554) (11,067,617) Estimated liability,end of year $ 1,500,000 $ 1,635,000 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. When appliable,the current portion of this 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, 2022 2021 Estimated liability,beginning of year $ 2,789,472 $ 2,557,317 Estimated claims incurred, including changes in estimates 1,758,032 1,224,781 Claim payments (1,465,313) (992,626) Estimated liability,end of year $ 3,082,191 $ 2,789,472 81 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 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 2021 taxable value for all properties within the City is$2,443,038,364. 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 30,2022 was$19.44 per$1,000 of taxable value. NOTE 15 -CONTINGENT LIABILITIES The City and its component units participate in a number of Federal and State assisted programs that are subject to compliance audits. The audit of the Federal programs and the periodic program compliance audits of many of the State programs have not yet been conducted, completed, or resolved. Accordingly, the City's and its component units' compliance with applicable grant requirements will be established at some future date. The amount,if any,of expenditures which may be disallowed by the granting agencies cannot be determined at this time although the City and its component units expect such amounts,if any,to be immaterial. There are various other legal actions pending against the City and its component units. Due to the inconclusive nature of many of the actions, it is not possible for the City's Counsel to determine the probable outcome or a reasonable estimate of the potential liability, if any. These actions, for which a reasonable estimate can be determined of the potential liability,if any,are considered by the City and/or component unit management and legal counsel to not have a material effect on the financial condition of the City. NOTE 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. 82 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 16-PENSION PLANS(continued) EMPLOYEES'RETIREMENT SYSTEM (continued) Plan Description (concluded). 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. Plan Membership At December 31,2021,plan membership consisted of the following: Inactive employees or beneficiaries receiving benefits 935 Inactive employees entitled to but not yet receiving benefits 181 Vested and non-vested active participants 397 Total employees covered by the Plan 1,513 83 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 16-PENSION PLANS (continued) EMPLOYEES'RETIREMENT SYSTEM (continued) 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 two consecutive years of credited service within the last 10 years of credited service immediately preceding a member's termination of employment. The benefit payments for the current plan are calculated using the following rates for the various groups of general employees: Multiplier Bargaining Unit/Employee Group Percentage United Auto Workers (UAW) Hired after January 9, 2017 1.50% Hired after October 21, 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% 84 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 16-PENSION PLANS(continued) EMPLOYEES'RETIREMENT SYSTEM (continued) 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 current plan for the year ended June 30,2022 was 55.10%of projected valuation payroll. Contribution Bargaining Unit/Employee 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, 2022,the annual money-weighted rate of return on pension plan investments,net of pension plan investment expense, was (8.82)%. The money-weighted rate of return expresses investment performance,net of investment expense,adjusted for the changing amounts actually invested. Concentrations At June 30, 2022,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 Note 4 for the details of these concentrations. 85 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 16-PENSION PLANS (continued) EMPLOYEES'RETIREMENT SYSTEM (continued) 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. The market value change from December 31, 2021 to June 30, 2022 has been included in the Pension accumulation fund amount as it has not been allocated to the other funds as of year-end. A summary of the Plan reserves at June 30,2022 is as follows: Reserve/Group Balance Employee savings fund $ 11,119,478 Retirement reserve fund 159,901,309 Pension accumulation fund (31,268,725) Members benefit fund 14,233,291 Health insurance fund 34,702,753 Net Pension Liability The components of the net pension liability for the employees' retirement system at June 30, 2022 were as follows: Total Pension Liability $ 312,157,774 Plan Fiduciary Net Position 153,666,353 Net Pension Liability $ 158,491,421 Plan fiduciary net position as percentage of total Pension Liability 49.23% Actuarial Assumptions The total pension liability was determined by an actuarial valuation as of December 31,2021,rolled forward to June 30, 2022,using the following actuarial assumptions,applied to all periods included in the measurement: Inflation: 2.50% Salary increases: Inflation,plus service based increases. Investment rate of return: 7.00%,net of investment expense,including inflation. Mortality is based on the Pub2010S tables (below median), 50% for pre-retirement deaths. For Disabled members, the disabled versions of these tables are used. Each of these tables is projected generationally with Scale SSA(2020). 86 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 16-PENSION PLANS(continued) EMPLOYEES'RETIREMENT SYSTEM (continued) Actuarial Assumptions (concluded) The actuarial assumptions used in the December 31, 2021 valuation were based on the 2015-2019 experience study. Assumption changes-there were several changes in actuarial assumptions during fiscal year 2022,based on an experience study completed in 2021, covering experience from 2015 through 2019. More details regarding actuarial assumptions can be found in the December 31,2021 valuation reports for each system. 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 December 31,2021,and the final investment return assumption,are summarized in the following table: Expected Real Money-Weighted Asset Class Target Allocation Rate of Return Rate of Return Domestic Equity 27.00% 5.95% 1.61% International Equity-Developed 12.00% 6.10% 0.73% International Equity- Emerging 4.00% 6.95% 0.28% Fixed Income-U.S. 25.00% 2.00% 0.50% Real Estate 10.00% 4.95% 0.50% Global Opportunistic Fixed Income 6.00% 4.25% 0.26% Global Equity Long/Short 10.00% 5.00% 0.50% Absolute Return 6.00% 5.00% 0.30% 100.00% 4.67% Inflation 2.50% Risk adjustment -0.17% Investment rate of return 7.00% 87 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 16-PENSION PLANS (continued) EMPLOYEES'RETIREMENT SYSTEM (continued) Discount Rate The discount rate used to measure the total pension liability was 7.00%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that City contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, each plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore,the long-term expected rates of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. The components of the change in the net pension liability are summarized as follows: Increase(Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability Changes in Net Pension Liability (a) (b) (a)-(b) Balances at June 30,2021 $ 316,621,592 $ 178,421,063 $ 138,200,529 Changes for the Year Service cost 2,827,879 - 2,827,879 Interest on total pension liability 21,523,899 21,523,899 Difference between expected and actual experience (4,473,505) - (4,473,505) Employer contributions - 13,494,287 (13,494,287) Employee contributions - 1,289,306 (1,289,306) Net investment income(loss) - (15,129,738) 15,129,738 Benefit payments,including employee refunds (24,342,091) (24,342,091) - Administrative expense - (66,474) 66,474 Net changes (4,463,818) (24,754,710) 20,290,892 Balances as of June 30,2022 $ 312,157,774 $ 153,666,353 $ 158,491,421 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 7.00%, 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(6.00%) or 1-percentage-point higher(8.00%) than the current rate: 1%Decrease Current Rate 1%Increase 6.00% 7.00% 8.00% Net pension liability $ 186,131,735 $ 158,491,421 $ 135,059,448 88 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 16-PENSION PLANS (continued) EMPLOYEES'RETIREMENT SYSTEM (concluded) Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the year ended June 30, 2022,the City recognized ERS pension expense of$17,550,196. At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual experience $ - $ 3,817,180 Changes in assumptions 2,555,430 - Net difference between projected and actual earnings on pension plan investments 11,704,992 - Total $ 14,260,422 $ 3,817,180 Amounts reported as deferred outflows of resources and deferred inflows of resources related to pension will be recognized in pension expense as follows: Year Ending Pension June 30, Expense 2023 $ 3,576,073 2024 1,174,530 2025 263,388 2026 5,429,251 $ 10,443,242 At June 30, 2022,the City did not have any outstanding contributions to the pension plan required for the year ended June 30, 2022. 89 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 16-PENSION PLANS (continued) POLICE 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. 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. 90 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 16-PENSION PLANS (continued) POLICE AND FIRE RETIREMENT SYSTEM (continued) Plan Membership At December 31,2021,plan membership consisted of the following: Inactive employees or beneficiaries receiving benefits 766 Inactive employees entitled to but not yet receiving benefits 67 Vested and non-vested active participants 355 Total employees covered by the Plan 1,188 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. Pension benefit is capped at 110% of base wage for IAFF and CCLP-NS and 115% for CCLP-Supervisors. Benefit multiplier is changed to 2.5%and pension benefit is capped at 100%of base wage for hires on or after May 19,2014 for IAFF and August 1,2014 for CCLP-NS. 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, 2022 was 58.25%of projected valuation payroll. 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, 2022,the annual money-weighted rate of return on pension plan investments,net of pension plan investment expense,was (9.86)%. The money-weighted rate of return expresses investment performance,net of investment expense,adjusted for the changing amounts actually invested. 91 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 16-PENSION PLANS (continued) POLICE AND FIRE RETIREMENT SYSTEM (continued) Concentrations At June 30,2022,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, 2022 is as follows: Reserve/Group Balance Retirement reserve fund $ 289,411,315 Health insurance fund 41,918,165 Net Pension Liability The components of the net pension liability for the police and fire retirement system at June 30, 2022,were as follows: Total Pension Liability $ 502,879,789 Plan Fiduciary Net Position 289,411,315 Net Pension Liability $ 213,468,474 Plan fiduciary net position as percentage of total Pension Liability 57.55% Actuarial Assumptions The total pension liability was determined by an actuarial valuation as of December 31, 2021,rolled forward to June 30, 2022,using the following actuarial assumptions,applied to all periods included in the measurement: Inflation: 2.50% Salary increases: Inflation,plus service based increases. Investment rate of return: 7.00%,net of investment expense,including inflation. 92 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 16-PENSION PLANS (continued) POLICE AND FIRE RETIREMENT SYSTEM (continued) Actuarial Assumptions (concluded) Mortality is based on the Pub2010S(below median),50%for pre-retirement deaths. For Disabled members, the disabled version of these tables is used. Each of these tables is projected generationally with Scale SSA (2020). The actuarial assumptions used in the December 31, 2021 valuation were based on the 2015-2019 experience study. Assumption changes-there were several changes in actuarial assumptions during fiscal year 2022,based on an experience study completed in 2021, covering experience from 2015 through 2019. More details regarding actuarial assumptions can be found in the December 31,2021 valuation reports for each system. 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 December 31,2020,and the final investment return assumption,are summarized in the following table: Long-Term Expected Real Money-Weighted Asset Class Target Allocation Rate of Return Rate of Return Domestic Equity 27.00% 5.95% 1.61% International Equity-Developed 12.00% 6.10% 0.73% International Equity-Emerging 4.00% 6.95% 0.28% Fixed Income-U.S. 25.00% 2.00% 0.50% Real Estate 10.00% 4.95% 0.50% Global Opportunistic Fixed Income 6.00% 4.25% 0.26% Global Equity Long/Short 10.00% 5.00% 0.50% Absolute Return 6.00% 5.00% 0.30% 100.00% 4.67% Inflation 2.50% Risk adjustment -0.17% Investment rate of return 7.00% 93 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 16-PENSION PLANS (continued) POLICE AND FIRE RETIREMENT SYSTEM (continued) Discount Rate The discount rate used to measure the total pension liability was 7.00%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that City contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, each plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore,the long-term expected rates of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. The components of the change in the net pension liability are summarized as follows: Increase(Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability Changes in Net Pension Liability (a) (b) (a)-(b) Balances at June 30,2021 $ 491,508,579 $ 335,439,636 $ 156,068,943 Changes for the Year Service cost 7,269,988 - 7,269,988 Interest on total pension liability 33,647,916 - 33,647,916 Difference between expected and actual experience 6,641,422 - 6,641,422 Employer contributions - 19,609,552 (19,609,552) Employee contributions - 2,722,350 (2,722,350) Net investment income(loss) - (32,083,115) 32,083,115 Benefit payments,including employee refunds (36,188,116) (36,188,116) - Administrative expense - (88,992) 88,992 Net changes 11,371,210 (46,028,321) 57,399,531 Balances as of June 30,2022 $ 502,879,789 $ 289,411,315 $ 213,468,474 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 7.00%,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(6.00%) or 1-percentage-point higher(8.00%)than the current rate: 1%Decrease Current Rate 1%Increase 6.00% 7.00% 8.00% Net pension liability $ 268,157,705 $ 213,468,474 $ 163,990,136 94 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 16-PENSION PLANS (continued) POLICE AND FIRE RETIREMENT SYSTEM (concluded) Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the year ended June 30, 2022, the City recognized Police and Fire Retirement System pension expense of $47,881,846. At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual experience $ 4,981,066 $ 1,737,858 Changes in assumptions 12,012,570 - Net difference between projected and actual earnings on pension plan investments 22,295,730 - Total $ 39,289,366 $ 1,737,858 Amounts reported as deferred outflows of resources and deferred inflows of resources related to pension will be recognized in pension expense as follows: Year Ending Pension June 30, Expense 2023 $ 12,104,661 2024 11,831,132 2025 2,641,300 2026 10,974,415 $ 37,551,508 At June 30,2022,the City did not have any outstanding amount of contributions to the pension plan required for the year ended June 30,2022. For governmental activities,pension liabilities are expected to be liquidated by the general fund. Detailed information about the pension plan's fiduciary net position is available in the combining statements for the pension and other postemployment benefit trust funds presented in the other supplementary information section of this report and at the end of Note 17. 95 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 16- PENSION PLANS (concluded) 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 and Fire Retirement Retirement System System Total Net pension liability $ 158,491,421 $ 213,468,474 $ 371,959,895 Deferred outflows-pension 14,260,422 39,289,366 53,549,788 Deferred inflows-pension 3,817,180 1,737,858 5,555,038 Pension expense 17,550,196 47,881,846 65,432,042 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, 2022 were$361,330 for plan members. Employee contributions for the year ended June 30, 2022 were$357,008. 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. NOTE 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. 96 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 17-OTHER POSTEMPLOYMENT BENEFITS (continued) PRIMARY GOVERNMENT (concluded) 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. 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. Membership of the Plan consisted of the following at January 1, 2021, the date of the most recent actuarial valuation: Retirees and beneficiaries receiving benefits 961 Terminated plan members entitled to but not yet receiving benefits 41 Active plan member 429 Total 1,431 97 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 17-OTHER POSTEMPLOYMENT BENEFITS (continued) EMPLOYEES'RETIREMENT SYSTEM (continued) 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, 2022, the City contributed $10,343,555 (direct benefit payments of$9,599,555 and City contributions of $744,000)to the Plan. Rate of Return For the year ended June 30, 2022,the annual money-weighted rate of return on investments,net of investment expense, was (15.16)%. 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, 2022,were as follows: Total OPEB Liability $ 157,216,430 Plan Fiduciary Net Position 69,887,591 Net OPEB Liability $ 87,328,839 Plan fiduciary net position as percentage of total OPEB liability 44.45% Actuarial Assumptions The total OPEB liability was determined by an actuarial valuation as of January 1, 2021,rolled forward to June 30,2022,using the following actuarial assumptions,applied to all periods included in the measurement: Inflation: 2.50% Investment rate of return: 7.00%,net of OPEB plan investment expense,including inflation. Retirement age: Age-based table of rates that are specific to the type of eligibility condition. 98 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 17-OTHER POSTEMPLOYMENT BENEFITS(continued) EMPLOYEES'RETIREMENT SYSTEM (continued) Actuarial Assumptions (concluded) Mortality rates are assumed to be in accordance with the Pub2010G tables,with below median and headcount weighted,projected generationally using MP-2020. The actuarial assumptions used in the January 1,2021 valuation were based on the 2015-2019 experience study. Assumption changes-there were no changes of assumptions in 2022. 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 30,2022 is summarized in the table on the following page. 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, 2022 are summarized in the following table: Long-Term Expected Money-Weighted Asset Class Target Allocation Real Rate of Return Rate of Return Domestic Equity 27.00% 5.95% 1.61% International Equity-Developed 12.00% 6.10% 0.73% International Equity-Emerging 4.00% 6.95% 0.28% Fixed Income-U.S. 25.00% 2.00% 0.50% Real Assets 10.00% 4.95% 0.50% Global Opportunistic Fixed Income 6.00% 4.25% 0.26% Global Equity Long/Short 10.00% 5.00% 0.50% Absolute Return 6.00% 5.00% 0.30% 100.00% 4.67% Inflation 2.50% Risk adjustment -0.17% Investment rate of return 7.00% 99 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 17-OTHER POSTEMPLOYMENT BENEFITS (continued) EMPLOYEES'RETIREMENT SYSTEM (continued) Discount Rate The discount rate used to measure the total OPEB liability was 7.00%. 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 90%. Based on this information, the City projects that benefits will be available to make all projected future benefit payments of current plan members. The components of the change in the net OPEB liability are summarized as follows: Calculating the Net OPEB Liability Increase (Decrease) Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability (a) (b) (a)-(b) Balances at June 30,2021 $ 153,400,498 $ 79,529,913 $ 73,870,585 Changes for the year Service cost 1,603,045 - 1,603,045 Interest on total OPEB liability 10,562,939 - 10,562,939 Employer contributions - 10,643,555 (10,643,555) Net investment income - (11,324,122) 11,324,122 Benefit payments (8,350,052) (8,350,052) - Administrative expense - (611,703) 611,703 Net changes 3,815,932 (9,642,322) 13,458,254 Balances as of June 30,2022 $ 157,216,430 $ 69,887,591 $ 87,328,839 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 7.00%,as well as what the City's net OPEB liability would be if it were calculated using a discount rate that is 1%lower(6.00%) or 1%higher (8.00%)than the current rate: 1%Decrease Current 1% Increase 6.00% Discount Rate 8.00% Net OPEB liability $ 106,212,238 $ 87,328,839 $ 71,724,223 100 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 17-OTHER POSTEMPLOYMENT BENEFITS (continued) EMPLOYEES'RETIREMENT SYSTEM (continued) 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 4.5% 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(3.5%) or 1%higher(5.5%)than the current healthcare cost trend rates: Healthcare 1% Decrease Ultimate Cost 1% Increase 3.50% Trend Rate 5.50% Net OPEB liability $ 71,133,079 $ 87,328,839 $ 106,787,456 OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended June 30, 2022,the City recognized OPEB benefit of$19,016,642. At June 30, 2022,the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Changes in assumptions $ - $ 22,238,814 Differences between expected and actual experience - 13,167,887 Net difference between projected and actual earnings on plan investments 10,083,172 - Total $ 10,083,172 $ 35,406,701 Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year Ending OPEB June 30, Expense 2023 $ (32,983,561) 2024 2,148,617 2025 2,133,171 2026 3,378,244 $ (25,323,529) 101 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 17-OTHER POSTEMPLOYMENT BENEFITS (continued) EMPLOYEES'RETIREMENT SYSTEM (concluded) 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 presented in the other supplementary information section of this report and at the end of this note disclosure. At June 30, 2022,the City reported 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. Membership of the Plan consisted of the following at January 1, 2021, the date of the most recent actuarial valuation: Retirees and beneficiaries receiving benefits 699 Terminated plan members entitled to but not yet receiving benefits 12 Active plan member 344 Total 1,055 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, 2022, the City contributed $9,974,904 (direct benefit payments of $8,674,904 and City contributions of $1,300,000)to the Plan. 102 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 17-OTHER POSTEMPLOYMENT BENEFITS (continued) POLICE AND FIRE RETIREMENT SYSTEM (continued) Rate of Return For the year ended June 30, 2022,the annual money-weighted rate of return on investments,net of investment expense, was (16.96)%. The money-weighted rate of return expresses investment performance, net of investment expense,adjusted for the changing amounts actually invested. The components of the net OPEB liability of the City at June 30, 2022,were as follows: Total OPEB Liability $ 202,871,379 Plan Fiduciary Net Position 41,918,165 Net OPEB Liability $ 160,953,214 Plan fiduciary net position as percentage of total OPEB liability 20.66% Actuarial Assumptions The total OPEB liability was determined by an actuarial valuation as of January 1, 2021, rolled forward to June 30, 2022,using the following actuarial assumptions,applied to all periods included in the measurement: Inflation: 2.50% Investment rate of return: 7.00%,net of OPEB plan investment expense,including inflation. Retirement age: Age-based table of rates that are specific to the type of eligibility condition. Mortality rates are assumed to be in accordance with the Pub2010G tables, with below median and headcount weighted,projected generationally using MP-2020. The actuarial assumptions used in the January 1,2021 valuation were based on the 2015-2019 experience study. Assumption changes-there were no changes of assumptions in 2022. 103 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 17-OTHER POSTEMPLOYMENT BENEFITS (continued) POLICE AND FIRE RETIREMENT SYSTEM (continued) 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 30,2022 is summarized in the table below. 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, 2022 are summarized in the following table: Long-Term Expected Money-Weighted Asset Class Target Allocation Real Rate of Return Rate of Return Domestic Equity 27.00% 5.95% 1.61% International Equity-Developed 12.00% 6.10% 0.73% International Equity-Emerging 4.00% 6.95% 0.28% Fixed Income-U.S. 25.00% 2.00% 0.50% Real Assets 10.00% 4.95% 0.50% Global Opportunistic Fixed Income 6.00% 4.25% 0.26% Global Equity Long/Short 10.00% 5.00% 0.50% Absolute Return 6.00% 5.00% 0.30% 100.00% 4.67% Inflation 2.50% Risk adjustment -0.17% Investment rate of return 7.00% Discount Rate The discount rate used to measure the total OPEB liability was 7.00%. 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 90%, and until the fund is depleted. Based on this information,the City projects that benefits will be available to make all projected future benefit payments of current plan members. 104 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 17-OTHER POSTEMPLOYMENT BENEFITS (continued) POLICE AND FIRE RETIREMENT SYSTEM (continued) The components of the change in the net OPEB liability are summarized as follows: Calculating the Net OPEB Liability Increase (Decrease) Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability (a) (b) (a)-(b) Balances at June 30,2021 $ 193,491,109 $ 48,217,543 $ 145,273,566 Changes for the year Service cost 3,800,121 - 3,800,121 Interest on total OPEB liability 13,536,620 - 13,536,620 Employer contributions - 9,974,904 (9,974,904) Net investment income - (7,645,295) 7,645,295 Benefit payments (7,956,471) (7,956,471) - Administrative expense - (672,516) 672,516 Net changes 9,380,270 (6,299,378) 15,679,648 Balances as of June 30,2022 $ 202,871,379 $ 41,918,165 $ 160,953,214 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 7.00%,as well as what the City's net OPEB liability would be if it were calculated using a discount rate that is 1% lower(6.00%) or 1%higher(8.00%)than the current rate: 1%Decrease Current 1%Increase 6.00% Discount Rate 8.00% Net OPEB liability $ 187,647,083 $ 160,953,214 $ 139,304,997 105 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 17-OTHER POSTEMPLOYMENT BENEFITS (continued) POLICE AND FIRE RETIREMENT SYSTEM (continued) 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 4.5% 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(3.5%) or 1%higher(5.5)than the current healthcare cost trend rates: Healthcare 1%Decrease Ultimate Cost 1%Increase 3.50% Trend Rate 5.50% Net OPEB liability $ 138,335,276 $ 160,953,214 $ 188,715,116 OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended June 30, 2022, the City recognized OPEB benefit of$9,102,198. At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Changes in assumptions $ 22,999,488 $ 81,199,887 Differences between expected and actual experience 4,646,140 35,606,996 Net difference between projected and actual earnings on plan investments 8,994,304 - Contributions subsequent to the measurement date - - Total $ 36,639,932 $ 116,806,883 Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year Ending OPEB June 30, Expense 2023 $ (28,179,773) 2024 (56,322,761) 2025 2,131,480 2026 2,204,103 $ (80,166,951) 106 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 17-OTHER POSTEMPLOYMENT BENEFITS (continued) POLICE AND FIRE RETIREMENT SYSTEM (concluded) 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 presented in the other supplementary information section of this report and at the end of this note disclosure. At June 30, 2022,the City reported no amount payable to the OPEB plan. For governmental activities, other postemployment benefit liabilities are expected to be liquidated by the general fund. 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 and Fire Retirement Retirement System System Total Net OPEB liability $ 87,328,839 $ 160,953,214 $ 248,282,053 Deferred outflows-OPEB 10,083,172 36,639,932 46,723,104 Deferred inflows-OPEB 35,406,701 116,806,883 152,213,584 OPEB expense(benefit) (19,016,642) (9,102,198) (28,118,840) Financial statements for individual pension and employee benefit plans: Pension and Other Postemployment Benefits Trust Funds 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 $ 6,090,397 $ 1,390,936 $ 10,075,420 $ 1,459,318 $ - $ - $ 19,016,071 Investments Mutual funds 110,091,809 25,142,971 208,310,511 30,171,571 4,549,579 33,939,595 412,206,036 Domestic equities 31,455,468 7,183,858 63,646,492 9,218,521 - - 111,504,339 International equities 718,781 164,156 1,396,842 202,318 - 2,482,097 Emerging market equities 6,775,984 1,547,512 12,812,804 1,855,799 975,174 23,967,273 Money market funds 3,449,22S 787,741 3,393,029 491,444 258,146 8,379,585 Prepaids 852 195 592 86 - 1,725 Dividends and interest receivable 26,685 6,094 50,988 7,385 11,923 103,075 Total assets 158,609,201 36,223,463 299,686,678 43,406,442 4,549,579 35,184,838 577,660,201 Liabilities Accounts payable 150,924 34,470 266,801 38,643 - - 490,838 Due to other governmental units 4,791,924 1,167,240 10,008,562 1,449,634 4,653 319,000 17,741,013 Total liabilities 4,942,848 1,201,710 10,275,363 1,488,277 4,653 319,000 18,231,851 Net position restricted for: Pension benefits 153,666,353 - 289,411,315 - 4,544,926 - 447,622,594 Other postemployment benefits 35,021,753 41,918,165 34,865,838 111,805,756 Total net position $ 153,666,353 $ 35,021,753 $ 289,411,315 $ 41,918,165 $ 4,544,926 $ 34,865,838 $ 559,428,350 107 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 17- OTHER POSTEMPLOYMENT BENEFITS (concluded) 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(decrease)in fair value of investments $ (14,356,406) $ (5,833,105) $ (32,083,115) $ (7,656,237) $ - $ (5,491,017) $ (65,419,880) Interest income(loss) 5,527 - (699,336) (693,809) Miscellaneous - 10,942 10,942 Investment expenses (778,859) (778,859) Net investment income (15,129,738) (5,833,105) (32,083,115) (7,645,295) (699,336) (5,491,017) (66,881,606) Contributions Employer 13,494,287 10,343,555 19,609,552 9,974,904 361,330 300,000 54,083,628 Plan members 1,289,306 2,722,350 357,008 4,368,664 Total contributions 14,783,593 10,343,555 22,331,902 9,974,904 718,338 300,000 58,452,292 Deductions Participant benefits 24,342,091 8,350,052 36,188,116 7,956,471 - - 76,836,730 Administrative expense 66,474 492,274 88,992 672,516 432,095 119,429 1,871,780 Total deductions 24,408,565 8,842,326 36,277,108 8,628,987 432,095 119,429 78,708,510 Change in net position (24,754,710) (4,331,876) (46,028,321) (6,299,378) (413,093) (5,310,446) (87,137,824) Net position restricted for pension and other postemployment benefits Beginning ofyear 178,421,063 39,353,629 335,439,636 48,217,543 4,958,019 40,176,284 646,566,174 End of year $ 153,666,353 $ 35,021,753 $ 289,411,315 $ 41,918,165 $ 4,544,926 $ 34,865,838 $ 559,428,350 NOTE 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 2022 amounted to$116,162. ➢ 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 2022. 108 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 18-TAX ABATEMENTS(concluded) ➢ 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 Council 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 2022 amounted to$3,695,861. ➢ 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 2022, through direct reimbursement to developers from current tax captures, amounted to$811,116. 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 2022 amounted to$222,211. NOTE 19-ASSETS HELD BY FOUNDATION During 2020 the City contributed $1,296,395 from the sale of Waverly Park to the City of Lansing Parks and Recreation Endowment Fund,which is held by the Capital Region Community Foundation (CRCF) on behalf of the City, from which only a certain component is spendable. During 2022 the City contributed $29,835. The expenditure related to the contribution is recorded within a nonmajor capital project fund. The CRCF has explicit variance power and therefore these amounts are not shown in the financial statements of the City. This variance power allows CRCF to modify any restrictions or considerations on the distributions of the funds. Distributions will be made to the City annually as requested, according to the spending guidelines. The City elected not to receive any distributions this year. At June 30,2022,the fund has a value of$1,440,294 NOTE 20- CHANGE IN ACCOUNTING PRINCIPLES For the year ended June 30,2022,the City implemented the following new pronouncement: GASB Statement No. 87,Leases. Summary: Governmental Accounting Standards Board(GASB)Statement No.87,Leases,was issued by the GASB in June 2017. The objective of this Statement is to increase the usefulness of governments' financial statements by requiring recognition of certain lease asset and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financing of the right to use the underlying asset. Under this Statement,a lessee is required to recognize a lease liability and an intangible right-to-use lease asset,and a lessor is required to recognize a lease receivable and a deferred inflow of resources,thereby enhancing the relevance and consistency of information about governments'leasing activities. There was no material impact on the City's financial statements after the adoption of GASB Statement No.87. 109 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 20-CHANGE IN ACCOUNTING PRINCIPLES (concluded) While not material to the City as a whole,there was a material impact on the Lansing Entertainment& Public Facilities Authority, component unit, after the adoption of GASB Statement 87 and that has been reflected in their separately issued financial statements. In accordance with GASB 61, since this information is readily available in their separately issued financial statements,it is not duplicated here. NOTE 21 -UPCOMING ACCOUNTING PRONOUNCEMENTS In May 2019,the GASB issued Statement No.91,Conduit Debt Obligations. This Statement will improve financial reporting by eliminating the existing option for issuers to report conduit debt obligations as their own liabilities, thereby ending significant diversity in practice. The clarified definition will resolve stakeholders'uncertainty as to whether a given financing is, in fact, a conduit debt obligation. Requiring issuers to recognize liabilities associated with additional commitments extended by issuers and to recognize assets and deferred inflows of resources related to certain arrangements associated with conduit debt obligations also will eliminate diversity, thereby improving comparability in reporting by issuers. Revised disclosure requirements will provide financial statement users with better information regarding the commitments issuers extend and the likelihood that they will fulfill those commitments. That information will inform users of the potential impact of such commitments on the financial resources of issuers and help users assess issuers'roles in conduit debt obligations. The City is currently evaluating the impact this standard will have on the financial statements when adopted during the 2022-2023 fiscal year. In May 2020,the GASB issued Statement No.96,Subscription-based Information Technology Arrangements. This Statement provides guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users (governments). This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use subscription asset - an intangible asset - and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments,including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. To the extent relevant,the standards for SBITAs are based on the standards established in Statement No.87,Leases, as amended. The City is currently evaluating the impact this standard will have on the financial statements when adopted during the 2022-2023 fiscal year. In June 2022,the GASB issued Statement No. 100,Accounting Changes and Error Corrections- an amendment of GASB Statement No. 62. This Statement prescribes the accounting and financial reporting for (1) each type of accounting change and (2) error corrections. This Statement requires that(a) changes in accounting principles and error corrections be reported retroactively by restating prior periods,(b) changes to or within the financial reporting entity be reported by adjusting beginning balances of the current period,and(c)changes in accounting estimates be reported prospectively by recognizing the change in the current period. The City is currently evaluating the impact this standard will have on the financial statements when adopted during the 2023-2024 fiscal year. In June 2022,the GASB issued Statement No.101,Compensated Absences. This Statement requires that liabilities for compensated absences be recognized for (1) leave that has not been used and (2) leave that has been used but not yet paid in cash or settled through noncash means. A liability should be recognized for leave that has not been used if(a)the leave is attributable to services already rendered, (b)the leave accumulates,and (c)the leave is more likely than not to be used for time off or otherwise paid in cash or settled through noncash means. This Statement also establishes guidance for measuring a liability for leave that has not been used, generally using an employee's pay rate as of the date of the financial statements. The City is currently evaluating the impact this standard will have on the financial statements when adopted during the 2024-2025 fiscal year. 110 CITY OF LANSING NOTES TO FINANCIAL STATEMENTS NOTE 22-SUBSEQUENT EVENT Subsequent to year end,the State of Michigan approved two draws for the City of Lansing from the State Clean Water Revolving Fund Loan program. The draws were on July 14,2022,in the amount of$4,528,834 and August 11,2022,in the amount of$3,533,600. 111 REQUIRED SUPPLEMENTARY INFORMATION 112 CITY OF LANSING GENERALFUND SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL YEAR ENDED JUNE 30,2022 Variances with Final Final Budget Original Amended Positive Budget Budget Actual (Negative) REVENUES Property taxes $ 46,075,000 $ 46,075,000 $ 46,226,914 $ 151,914 Income taxes 29,380,800 37,241,000 37,087,593 (153,407) Licenses and permits 1,715,600 1,720,100 1,932,281 212,181 Intergovernmental 20,168,000 20,718,000 22,818,693 2,100,693 Charges for services 8,941,350 9,086,850 10,925,736 1,838,886 Fines and forfeits 1,777,600 1,777,600 1,335,250 (442,350) Interest and rents 210,000 210,000 268,225 58,225 Other Donations and contributions 25,065,000 25,378,614 25,213,665 (164,949) Miscellaneous 19,048,000 173,000 139,730 (33,270) TOTAL REVENUES 152,381,350 142,380,164 145,948,087 3,567,923 EXPENDITURES Current General government Attorney's office 2,450,461 3,964,001 2,311,544 1,652,457 City clerk 1,485,525 1,485,525 1,589,380 (103,855) Council 664,446 664,446 630,820 33,626 Courts 6,614,859 6,614,859 6,320,992 293,867 Internal audit 194,724 194,724 178,413 16,311 Finance 6,384,489 6,384,489 5,928,898 455,591 Library rental (1,265,000) (1,265,000) 519,080 (1,784,080) Human resources 2,572,681 2,572,681 2,195,657 377,024 Mayor 1,618,281 1,618,281 1,650,918 (32,637) Office of community media 583,262 583,262 557,793 25,469 Contingency 300,000 - - - Total general government 21,603,728 22,817,268 21,883,495 933,773 Public safety Police 49,911,211 50,004,825 49,770,377 234,448 Fire 38,811,479 38,811,479 39,436,031 (624,552) Total public safety 88,722,690 88,816,304 89,206,408 (390,104) Public works 12,677,987 12,677,987 12,941,208 (263,221) 113 CITY OF LANSING GENERALFUND SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (concluded) YEAR ENDED JUNE 30,2022 Variances with Final Final Budget Original Amended Positive Budget Budget Actual (Negative) EXPENDITURES(concluded) Current(concluded) Recreation and culture $ 9,017,392 $ 9,017,392 $ 9,134,233 $ (116,841) Community and economic development Economic development&planning 6,083,740 6,268,740 5,971,011 297,729 Neighborhood&community engagement 1,232,199 1,332,199 1,288,676 43,523 Human relations/community services 1,934,094 1,934,094 1,700,434 233,660 Human services/community support 2,252,500 2,002,500 1,672,224 330,276 Total community and economic development 11,502,533 11,537,533 10,632,345 905,188 Debt service Principal 1,860,400 1,860,400 2,018,747 (158,347) Interest and fiscal charges 541,620 541,620 469,743 71,877 Total debt service 2,402,020 2,402,020 2,488,490 (86,470) TOTAL EXPENDITURES 145,926,350 147,268,504 146,286,179 982,325 EXCESS OF REVENUES OVER (UNDER)EXPENDITURES 6,455,000 (4,888,340) (338,092) 4,550,248 OTHER FINANCING SOURCES(USES) Proceeds from sale of capital assets 102,000 102,000 - (102,000) Transfers in 100,000 100,000 100,000 - Transfers out (5,957,000) (6,507,000) (6,082,859) 424,141 TOTAL OTHER FINANCING SOURCES(USES) (5,755,000) (6,305,000) (5,982,859) 322,141 NET CHANGE IN FUND BALANCE 700,000 (11,193,340) (6,320,951) 4,872,389 Fund balance,beginning of year 29,772,753 29,772,753 29,772,753 - Fund balance,end of year $ 30,472,753 $ 18,579,413 $ 23,451,802 $ 4,872,389 114 CITY OF LANSING STATE AND FEDERAL GRANTS FUND SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL YEAR ENDED JUNE 30,2022 Variances with Final Final Budget Original Amended Positive Budget Budget Actual (Negative) REVENUES Intergovernmental $ 962,800 $ 962,800 $ 13,381,019 $ 12,418,219 Charges for services - - 639,413 639,413 Interest and rents - - 27,262 27,262 Other revenues 50,000 50,000 (28,091) (78,091) TOTAL REVENUES 1,012,800 1,012,800 14,019,603 13,006,803 EXPENDITURES Current Public safety - - 377,964 (377,964) Public works - - 14,126 (14,126) Community and economic development 1,012,800 1,012,800 13,863,374 (12,850,574) TOTAL EXPENDITURES 1,012,800 1,012,800 14,255,464 (13,242,664) EXCESS OF REVENUES (UNDER)EXPENDITURES - - (235,861) (235,861) OTHER FINANCING SOURCES Transfers in - 235,859 235,859 NET CHANGE IN FUND BALANCE - - (2) (2) Fund balance,beginning of year 2 2 2 - Fund balance,end of year $ 2 $ 2 $ - $ (2) 115 CITY OF LANSING CERA-MSHDA FUND SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL YEAR ENDED JUNE 30,2022 Variances with Final Final Budget Original Amended Positive Budget Budget Actual (Negative) REVENUES Intergovernmental $ $ $ 51,092,362 $ 51,092,362 EXPENDITURES Current General government 59,047 (59,047) Community and economic development 50,898,386 (50,898,386) Debt service Interest 134,929 (134,929) TOTAL EXPENDITURES 51,092,362 (51,092,362) NET CHANGE IN FUND BALANCE - Fund balance,beginning Fund balance,ending $ $ $ $ 116 CITY OF LANSING DEFINED BENEFIT PENSION PLAN -EMPLOYEES'RETIREMENT SYSTEM SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS LAST NINE FISCAL YEARS (ULTIMATELY TEN YEARS WILL BE DISPLAYED) 2022 2021 2020 2019 2018 2017 2016 201S 2014 CHANGE IN TOTAL PENSION LIABILITY Service cost $ 2,827,879 $ 2,943,847 $ 2,738,099 $ 2,719,559 $ 2,538,487 $ 2,711,461 $ 2,977,084 $ 2,857,948 $ 2,982,624 Interest 21,523,899 21,890,652 21,360,398 21,512,099 21,994,837 22,403,009 22,268,516 22,671,909 22,722,630 Difference between expected and actual experience (4,473,505) (2,504,529) 7,219,344 (2,559,726) (6,451,827) (23,183,264) (4,937,823) (6,422,330) - Changes of assumptions 7,666,292 - 3,099,448 3,706,512 7,575,775 Benefit payments,including employee refunds (24,342,091) (24,316,255) (24,106,903) (23,470,040) (23,102,224) (22,913,214) (22,860,449) (22,462,587) (22,790,522) Net Change in Total Pension Liability (4,463,818) 5,680,007 7,210,938 (1,798,108) (1,921,279) (17,275,496) 5,023,103 (3,355,060) 2,914,732 Total Pension Liability,beginning 316,621,592 310,941,585 303,730,647 305,528,755 307,450,034 324,725,530 319,702,427 323,057,487 320,142,755 Total Pension Liability,ending $ 312,157,774 $ 316,621,592 $ 310,941,585 $ 303,730,647 $ 305,528,755 $ 307,450,034 $ 324,725,530 $ 319,702,427 $ 323,057,487 CHANGE IN PLAN FIDUCIARY NET POSITION Contributions-employer $ 13,494,287 $ 12,649,529 $ 10,698,401 $ 10,880,932 $ 10,843,000 $ 10,246,872 $ 10,181,620 $ 10,547,556 $ 9,361,009 Contributions-employee 1,289,306 1,172,409 1,286,273 1,220,657 1,230,857 1,216,519 1,088,943 1,128,120 1,290,678 Net investment income(loss) (15,129,738) 36,047,284 (540,861) 8,437,568 9,679,565 17,412,568 (2,790,190) 4,399,543 17,887,635 Benefit payments,including employee refunds (24,342,091) (24,316,255) (24,106,903) (23,470,040) (23,102,224) (22,913,214) (22,860,449) (22,462,587) (22,957,379) Administrative expenses (66,474) (20,367) (34,016) (42,364) (57,822) (47,217) (126,486) (174,818) (741,037) Net Change in Plan Fiduciary Net Position (24,754,710) 25,532,600 (12,697,106) (2,973,247) (1,406,624) 5,915,528 (14,S06,562) (6,562,186) 4,840,906 Plan Fiduciary Net Position,beginning 178,421,063 152,888,463 165,585,569 168,558,816 169,965,440 164,049,912 178,556,474 185,118,660 180,277,754 Plan Fiduciary Net Position,ending $ 153,666,353 $ 178,421,063 $ 152,888,463 $ 165,585,569 $ 168,558,816 $ 169,965,440 $ 164,049,912 $ 178,556,474 $ 185,118,660 City's Net Pension Liability $ 158,491,421 $ 138,200,529 $ 158,053,122 $ 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 the total pension liability 49.23% 56.35% 49.17% 54.52% 55.17% 55.28% 50.52% 55.85% 57.30% Covered payroll $ 24,509,599 $ 26,001,896 $ 24,304,971 $ 23,265,437 $ 22,672,891 $ 20,901,389 $ 23,085,894 $ 19,769,460 $ 21,521,242 City's net pension liability as a percentage of covered payroll 646.7% 531.5% 650.3% 593.8% 604.1% 657.8% 696.0% 714.0% 640.9% Note: GASB 67 was implemented in fiscal year 2014. This schedule is being built prospectively. Ultimately,ten years of data will be presented. Assumption changes -there were several changes in actuarial assumptions during fiscal year 2022, based on an experience study completed in 2021, covering experience from 201S through 2019. More details regarding actuarial assumptions can be found in the December 31,2021 valuation reports for each system. 117 CITY OF LANSING DEFINED BENEFIT PENSION PLAN -EMPLOYEES'RETIREMENT SYSTEM SCHEDULE OF CONTRIBUTIONS LAST TEN FISCAL YEARS 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 Actuarially determined contributions $ 12,737,487 $ 12,349,529 $ 10,698,401 $ 10,880,932 $ 10,185,060 $ 10,246,872 $ 10,181,620 $ 10,547,556 $ 9,361,009 $ 8,586,536 Contributions in relation to the actuarially determined contribution 12,737,487 12,349,529 10,698,401 10,880,932 10,843,000 10,246,872 10,181,620 10,547,556 9,361,009 8,586,536 Contribution deficiency(excess) $ - $ - $ - $ - $ (657,940) $ - $ - $ - $ - $ - Covered payroll $ 24,509,899 $ 26,001,896 $ 24,304,971 $ 23,265,437 $ 22,672,891 $ 20,901,389 $ 23,085,894 $ 19,769,460 $ 21,521,242 $ 20,874,143 Contributions as a percentage of covered payroll 51.97% 47.49% 44.02% 46.77% 47.82% 49.02% 44.10% 53.35% 43.50% 41.13% 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. Actuarial valuation information relative to the determination of contributions: Valuation date: December 31,2021 Notes: Actuarially determined contribution amounts are calculated as of January 1 every year. Methods and assumptions used to determine contribution rates: Actuarial cost method Entry age normal Amortization method Level percent of payroll over a closed period Remaining amortization period 19 years Asset valuation method 5 years smoothed market Inflation 2.50% Projected 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 Years of Service UAW Service All Others 0-9 3.25% 0-5 7.50% 10-18 1.00% 6-15 1.00% 19+ 0.50% 16+ 0.00% Investment rate of return 7.00%,net of investment expense and including inflation Retirement age Age-based table of rates that are specific to the type of eligibility condition. Mortality rates Mortality is based on the Pub2010S tables(below median),50%for pre-retirement deaths.For disabled members,the disabled versions of these tables are used.Each of these tables is projected generationally with Scale SSA(2020). 118 CITY OF LANSING DEFINED BENEFIT PENSION PLAN-EMPLOYEES'RETIREMENT SYSTEM SCHEDULE OF INVESTMENT RETURNS LAST NINE FISCAL YEARS (ULTIMATELY TEN YEARS WILL BE DISPLAYED) 2022 2021 2020 2019 2018 2017 2016 2015 2014 Annual money-weighted rate of return, net of investment expense -8.82% 24.71% -0.34% 5.17% 5.87% 10.91% -1.60% 2.43% 13.67% Note: GASB 67 was implemented in fiscal year 2014. This schedule is being built prospectively. Ultimately,ten years of data will be presented. 119 CITY OF LANSING DEFINED BENEFIT PENSION PLAN -POLICE AND FIRE RETIREMENT SYSTEM SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS LAST NINE FISCAL YEARS (ULTIMATELY TEN YEARS WILL BE DISPLAYED) 2022 2021 2020 2019 2018 2017 2016 2015 2014 CHANGE IN TOTAL PENSION LIABILITY Service cost $ 7,269,988 $ 6,961,705 $ 6,526,273 $ 6,801,669 $ 6,533,877 $ 6,133,683 $ 6,371,845 $ 6,350,378 $ 6,614,784 Interest 33,647,916 32,984,834 32,689,419 31,573,535 30,641,722 30,519,676 30,197,513 29,159,382 27,896,927 Changes of benefit terms - - - - 779 - - - - Difference between expected and actual experience 6,641,422 (2,944,445) (1,062,537) 10,590,030 8,263,623 (19,308,117) 7,884,167 3,159,996 Changes of assumptions - 24,025,142 - 1,647,044 25,078,592 3,281,341 - Benefit payments,including employee refunds (36,188,116) (35,040,363) (33,987,421) (32,609,254) (31,757,151) (31,102,186) (29,503,964) (27,969,021) (26,270,724) Net Change in Total Pension Liability 11,371,210 25,986,873 4,165,734 16,355,980 15,329,894 11,321,648 18,230,902 10,700,735 8,240,987 Total Pension Liability,beginning 491,508,579 465,521,706 461,355,972 444,999,992 429,670,098 418,348,450 400,117,548 389,416,813 381,175,826 Total Pension Liability,ending $ 502,879,789 $ 491,508,579 $ 465,521,706 $ 461,355,972 $ 444,999,992 $ 429,670,098 $ 418,348,450 $ 400,117,548 $ 389,416,813 CHANGE IN PLAN FIDUCIARY NET POSITION Contributions-employer $ 19,609,552 $ 18,250,155 $ 15,457,647 $ 13,554,239 $ 12,686,000 $ 11,521,768 $ 10,884,312 $ 11,050,091 $ 11,248,857 Contributions-employee 2,722,350 3,207,122 3,459,452 3,485,891 2,650,019 2,840,914 2,608,214 2,950,832 2,911,896 Net investment income(loss) (32,083,115) 68,910,089 1,047,240 17,943,950 19,937,149 32,116,305 (6,040,910) 8,965,080 34,016,621 Benefit payments,including employee refunds (36,188,116) (35,040,363) (33,987,421) (32,609,254) (31,757,151) (31,102,186) (29,503,964) (27,969,021) (26,852,038) Administrative expenses (88,992) (24,177) (41,599) (53,318) (77,237) (50,996) (128,903) (173,849) (1,141,506) Net Change in Plan Fiduciary Net Position (46,028,321) 55,302,826 (14,064,681) 2,321,508 3,438,780 15,325,805 (22,181,251) (5,176,867) 20,183,830 Plan Fiduciary Net Position,beginning 335,439,636 280,136,810 294,201,491 291,879,983 288,441,203 273,115,398 295,296,649 300,473,516 280,289,686 Plan Fiduciary Net Position,ending $ 289,411,315 $ 335,439,636 $ 280,136,810 $ 294,201,491 $ 291,879,983 $ 288,441,203 $ 273,115,398 $ 295,296,649 $ 300,473,516 City's Net Pension Liability $ 213,468,474 $ 156,068,943 $ 185,384,896 $ 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 the total pension liability 57.55% 68.25% 60.18% 63.77% 65.59% 67.13% 65.28% 73.80% 77.16% Covered payroll $ 31,354,796 $ 29,636,017 $ 28,977,408 $ 29,638,532 $ 28,435,952 $ 27,585,521 $ 27,078,405 $ 24,407,740 $ 25,611,974 City's net pension asset as a percentage of covered payroll 680.8% 526.6% 639.8% 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,ten years of data will be presented. Assumption changes -there were several changes in actuarial assumptions during fiscal year 2022, based on an experience study completed in 2021, covering experience from 2015 through 2019. More details regarding actuarial assumptions can be found in the December 31, 2021 valuation reports for each system. 120 CITY OF LANSING DEFINED BENEFIT PENSION PLAN -POLICE AND FIRE RETIREMENT SYSTEM SCHEDULE OF CONTRIBUTIONS LAST TEN FISCAL YEARS 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 Actuarially determined contributions $ 18,263,635 $ 16,950,155 $ 15,457,647 $ 13,554,239 $ 12,562,547 $ 11,521,768 $ 10,884,312 $ 11,050,091 $ 11,248,857 $ 10,133,599 Contributions in relation to the actuarially determined contribution 18,263,635 16,950,155 15,457,647 13,554,239 12,686,000 11,521,768 10,884,312 11,050,091 11,248,857 10,133,599 Contribution deficiency(excess) $ - $ - $ - $ - $ (123,453) $ - $ - $ - $ - $ - Covered payroll $ 31,354,796 $ 29,636,017 $ 28,977,408 $ 29,638,532 $ 28,435,952 $ 27,585,521 $ 27,078,405 $ 24,407,740 $ 26,405,725 $ 25,636,626 Contributions as a percentage of covered payroll 58.25% 57.19% 53.34% 45.73% 44.61% 41.77% 40.20% 45.27% 42.60% 39.53% 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. Actuarial valuation information relative to the determination of contributions: Valuation date: December 31,2021 Notes: Actuarially determined contribution amounts are calculated as of January 1 every year. Methods and assumptions used to determine contribution rates: Actuarial cost method Entry age normal Amortization method Level percent of payroll over a closed period Remaining amortization period 19 years Asset valuation method 5 years smoothed market Inflation 2.50% Projected 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 7.00%,net of investment expense and including inflation. Retirement age Age-based table of rates that are specific to the type of eligibility condition. Mortality rates Mortality is based on the Pub2010S(below median),50%for pre-retirement deaths.For disabled members,the disabled versions of these tables are assumed.Each of these tables is projected generationally with scale SSA(2020). 121 CITY OF LANSING DEFINED BENEFIT PENSION PLAN-POLICE AND FIRE RETIREMENT SYSTEM SCHEDULE OF INVESTMENT RETURNS LAST NINE FISCAL YEARS (ULTIMATELY TEN YEARS WILL BE DISPLAYED) 2022 2021 2020 2019 2018 2017 2016 2015 2014 Annual money-weighted rate of return, net of investment expense -9.86% 25.50% 0.37% 6.30% 7.10% 12.06% -2.09% 3.04% 17.28% Note: GASB 67 was implemented in fiscal year 2014. This schedule is being built prospectively. Ultimately,ten years of data will be presented. 122 CITY OF LANSING OTHER POSTEMPLOYMENT BENEFITS PLAN-EMPLOYEES'RETIREMENT SYSTEM SCHEDULE OF CHANGES IN NET OPEB LIABILITY AND RELATED RATIOS LAST SIX MEASUREMENT DATES(ULTIMATELY TEN YEARS WILL BE DISPLAYED) 2022 2021 2020 2019 2018 2017 CHANGE IN TOTAL OPEB LIABILITY Service cost $ 1,603,045 $ 1,560,141 $ 1,518,385 $ 1,477,747 $ 1,438,197 $ 1,550,428 Interest 10,562,939 11,335,921 13,143,168 12,990,219 13,221,134 12,976,683 Difference between expected and actual experience - (39,503,661) (19,498,451) - (9,321,837) - Changes of assumptions - (66,716,444) 39,986,554 3,614,432 (2,727,829) Benefit payments,including refunds of member contributions (8,350,052) (9,395,594) (10,444,878) (10,573,488) (10,286,249) (10,116,593) Net Change in Total OPEB Liability 3,815,932 (102,719,637) 24,704,778 7,508,910 (7,676,584) 4,410,518 Total OPEB Liability,beginning 153,400,498 256,120,135 231,415,357 223,906,447 231,583,031 227,172,513 Total OPEB Liability,ending $ 157,216,430 $ 153,400,498 $ 256,120,135 $ 231,415,357 $ 223,906,447 $ 231,583,031 CHANGE IN PLAN FIDUCIARY NET POSITION Employer contributions $ 10,643,555 $ 10,424,468 $ 11,461,488 $ 11,848,485 $ 11,436,222 $ 11,305,756 OPEB plan net investment income (11,324,122) 11,001,355 4,366,514 3,040,683 4,329,577 5,209,669 Benefit payments,including refunds of member contributions (8,350,052) (9,395,594) (10,444,878) (10,573,488) (10,286,249) (10,116,593) Administrative expenses (611,703) (728,874) (636,610) (548,939) (444,973) (389,163) Net Change in Plan Fiduciary Net Position (9,642,322) 11,301,355 4,746,514 3,766,741 5,034,577 6,009,669 Plan Fiduciary Net Position,beginning 79,529,913 68,228,558 63,482,044 59,715,303 54,680,726 48,671,057 Plan Fiduciary Net Position,ending $ 69,887,591 $ 79,529,913 $ 68,228,558 $ 63,482,044 $ 59,715,303 $ 54,680,726 Plan's Net OPEB Liability $ 87,328,839 $ 73,870,585 $ 187,891,577 $ 167,933,313 $ 164,191,144 $ 176,902,305 Plan fiduciary net position as a percentage of the total OPEB liability 44.45% 51.84% 26.64% 27.43% 26.67% 23.61% Covered payroll $ 26,747,483 $ 24,292,037 $ 25,453,989 $ 23,720,424 $ 21,251,418 $ 20,901,289 Plan's net OPEB liability as a percentage of covered payroll 326.49% 304.09% 738.16% 707.97% 772.61% 846.37% Note: GASB 74 was implemented in fiscal year 2017. This schedule is being built prospectively. Ultimately,ten years of data will be presented. Assumption changes-there were no changes of assumptions in 2022. 123 CITY OF LANSING OTHER POSTEMPLOYMENT BENEFITS PLAN- EMPLOYEES'RETIREMENT SYSTEM SCHEDULE OF CONTRIBUTIONS LAST TEN FISCAL YEARS 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 Actuarially determined contributions $ 7,100,834 $ 7,100,834 $ 10,504,140 $ 10,198,194 $ 10,910,284 $ 10,582,235 $ 11,447,334 $ 13,270,701 $ 14,057,619 $ 12,775,667 Contributions in relation to the actuarially determined contribution 10,643,555 10,424,468 11,461,488 11,848,485 11,436,222 11,305,756 8,814,471 9,212,322 11,048,992 10,147,780 Contribution deficiency(excess) $ (3,542,721) $ (3,323,634) $ (957,348) $ (1,650,291) $ (525,938) $ (723,521) $ 2,632,863 $ 4,058,379 $ 3,008,627 $ 2,627,887 Covered payroll $ 26,747,483 $ 24,292,037 $ 25,435,989 $ 23,720,424 $ 21,251,418 $ 20,901,389 $ 23,085,894 $ 19,769,460 $ 21,521,242 $ 20,874,143 Contributions as a percentage of covered payroll 39.8% 42.9% 45.1% 50.0% 53.8% 54.1% 38.2% 46.6% 51.3% 48.6% Actuarial valuation information relative to the determination of contributions: Valuation date: January 1,2021 [Votes: Actuarially determined contribution amounts are calculated as of January 1 every year. Methods and assumptions used to determine contribution rates: Actuarial cost method Entry age normal Amortization method Level percentage of payroll,closed Remaining amortization period 20 years Asset valuation method 5 years smoothed market Inflation 2.50% Investment rate of return 7.0%,net of OPEB plan investment expense and including inflation. Retirement age Age-based table of rates that are specific to the type of eligibility condition. Mortality rates Pub2010G tables,below median and headcount weighted,projected generationally using MP-2020. Health care trend rates Pre-Medicare 7.50%for the first year,gradually decreasing by.25%to 4.50%in year 13 and thereafter. Medicare 5.75%for the first year,gradually decreasing by.25%to 4.50%in year 6 and thereafter. 124 CITY OF LANSING OTHER POSTEMPLOYMENT BENEFITS PLAN-EMPLOYEES'RETIREMENT SYSTEM SCHEDULE OF INVESTMENT RETURNS LAST SIX MEASUREMENT DATES (ULTIMATELY TEN YEARS WILL BE DISPLAYED) 2022 2021 2020 2019 2018 2017 Annual money-weighted rate of return, net of investment expense -15.16% 14.89% 6.63% 4.17% 7.10% 9.90% Note: GASB 74 was implemented in fiscal year 2017. This schedule is being built prospectively. Ultimately,ten years of data will be presented. 125 CITY OF LANSING OTHER POSTEMPLOYMENT BENEFITS PLAN-POLICE AND FIRE RETIREMENT SYSTEM SCHEDULE OF CHANGES IN NET OPEB LIABILITY AND RELATED RATIOS LAST SIX MEASUREMENT DATES(ULTIMATELY TEN YEARS WILL BE DISPLAYED) 2022 2021 2020 2019 2018 2017 CHANGE IN TOTAL OPEB LIABILITY Service cost $ 3,800,121 $ 3,698,415 $ 3,599,431 $ 3,503,096 $ 3,409,339 $ 3,749,359 Interest 13,536,620 15,112,018 15,551,609 15,565,892 15,994,328 15,584,783 Difference between expected and actual experience - (71,213,994) 18,584,560 - (17,811,401) - Changes of assumptions - (162,399,773) 91,997,958 18,652,834 (7,445,354) Benefit payments,including refunds of member contributions (7,956,471) (10,836,077) (13,132,398) (12,271,014) (11,960,557) (11,065,440) Net Change in Total OPEB Liability 9,380,270 (225,639,411) 116,601,160 25,450,808 (17,813,645) 8,268,702 Total OPEB Liability,beginning 193,491,109 419,130,520 302,529,360 277,078,552 294,892,197 286,623,495 Total OPEB Liability,ending $ 202,871,379 $ 193,491,109 $ 419,130,520 $ 302,529,360 $ 277,078,552 $ 294,892,197 CHANGE IN PLAN FIDUCIARY NET POSITION Employer contributions $ 9,974,904 $ 12,951,908 $ 14,971,737 $ 13,500,687 $ 13,163,201 $ 12,290,749 OPEB plan net investment income (7,645,295) 3,408,741 2,998,056 290,543 3,572,965 3,487,200 Benefit payments,including refunds of member contributions (7,956,471) (10,836,077) (13,132,398) (12,271,014) (11,960,557) (11,065,440) Administrative expenses (672,516) (815,831) (529,339) (627,673) (600,644) (525,309) Net Change in Plan Fiduciary Net Position (6,299,378) 4,708,741 4,308,056 892,543 4,174,965 4,187,200 Plan Fiduciary Net Position,beginning 48,217,543 43,508,802 39,200,746 38,308,203 34,133,238 29,946,038 Plan Fiduciary Net Position,ending $ 41,918,165 $ 48,217,543 $ 43,508,802 $ 39,200,746 $ 38,308,203 $ 34,133,238 Plan's Net OPEB Liability $ 160,953,214 $ 145,273,566 $ 375,621,718 $ 263,328,614 $ 238,770,349 $ 260,758,959 Plan fiduciary net position as a percentage of the total OPEB liability 20.66% 24.92% 10.38% 12.96% 13.83% 11.57% Covered payroll $ 27,116,594 $ 29,636,017 $ 29,774,287 $ 28,435,953 $ 20,667,007 $ 27,585,521 Plan's net OPEB liability as a percentage of covered payroll 593.56% 490.19% 1261.56% 926.04% 1155.32% 945.27% Note: GASB 74 was implemented in fiscal year 2017. This schedule is being built prospectively. Ultimately,ten years of data will be presented. Assumption changes-there were no changes of assumptions in 2022. 126 CITY OF LANSING OTHER POSTEMPLOYMENT BENEFITS PLAN -POLICE AND FIRE RETIREMENT SERVICES SCHEDULE OF CONTRIBUTIONS LAST TEN FISCAL YEARS 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 Actuarially determined contributions $ 13,178,502 $ 13,178,502 $ 15,674,604 $ 15,218,062 $ 15,968,029 $ 19,759,521 $ 17,276,901 $ 17,923,366 $ 16,945,536 $ 17,489,692 Contributions in relation to the actuarially determined contribution 9,974,904 12,951,908 14,971,737 13,500,687 13,163,201 12,290,749 12,879,016 11,561,406 11,198,663 11,170,202 Contribution deficiency(excess) $ 3,203,598 $ 226,594 $ 702,867 $ 1,717,375 $ 2,804,828 $ 7,468,772 $ 4,397,885 $ 6,361,960 $ 5,746,873 $ 6,319,490 Covered payroll $ 27,116,594 $ 29,636,017 $ 29,774,287 $ 28,435,953 $ 20,667,007 $ 27,585,521 $ 27,078,405 $ 24,407,740 $ 26,405,725 $ 25,636,626 Contributions as a percentage of covered payroll 36.8% 43.7% 50.3% 47.5% 63.7% 44.6% 47.6% 47.4% 42.4% 43.6% Actuarial valuation information relative to the determination of contributions: Valuation date: January 1,2021 Notes: Actuarially determined contribution amounts are calculated as of January 1 every year. Methods and assumptions used to determine contribution rates: Actuarial cost method Entry age normal Amortization method Level percentage of payroll,closed Remaining amortization period 20 years Asset valuation method 5 years smoothed market Inflation 2.50% Investment rate of return 7.0%,net of OPEB plan investment expense and including inflation. Retirement age Age-based table of rates that are specific to the type of eligibility condition. Mortality rates Pub2010G tables,below median and headcount weighted,projected generationally using MP-2020. Health care trend rates Pre-Medicare 7.50%for the first year,gradually decreasing by.25%to 4.50%in year 13 and thereafter. Medicare 5.75%for the first year,gradually decreasing by.25%to 4.50%in year 6 and thereafter. 127 CITY OF LANSING OTHER POSTEMPLOYMENT BENEFITS PLAN-POLICE AND FIRE RETIREMENT SYSTEM SCHEDULE OF INVESTMENT RETURNS LAST SIX MEASUREMENT DATES (ULTIMATELY TEN YEARS WILL BE DISPLAYED) 2022 2021 2020 2019 2018 2017 Annual money-weighted rate of return, net of investment expense -16.96% 7.43% 7.25% -0.88% 8.71% 9.89% Note: GASB 74 was implemented in fiscal year 2017. This schedule is being built prospectively. Ultimately,ten years of data will be presented. 128 CITY OF LANSING NOTE TO REQUIRED SUPPLEMENTARY INFORMATION NOTE 1-EXCESS OF EXPENDITURES OVER APPROPRIATIONS State statutes provide that a local government unit not incur expenditures in excess of the amounts appropriated. The City's budgeted expenditures for the General Fund have been shown at the activity level. 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) required 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. During the year ended June 30, 2022, the City incurred expenditures in the General Fund and certain Special Revenue Funds as noted in excess of the amounts appropriated as follows: Amounts Amounts Appropriated Expended Variance General Fund Current General government City clerk $ 1,485,525 $ 1,589,380 $ (103,855) Library rental (1,265,000) 519,080 (1,784,080) Mayor 1,618,281 1,650,918 (32,637) Public safety Fire 38,811,479 39,436,031 (624,552) Recreation and culture 9,017,392 9,134,233 (116,841) Debt service 2,402,020 2,488,490 (86,470) State and Federal Grants Fund Current Public safety - 377,964 (377,964) Public works - 14,126 (14,126) Community development 1,012,800 13,863,374 (12,850,574) CERA-MSHDA Current General government - 59,047 (59,047) Community and economic development - 50,898,386 (50,898,386) Debt service - 134,929 (134,929) Major Streets Capital outlay 4,980,000 8,473,067 (3,493,067) Tri-County Metro Current Public safety 552,000 644,879 (92,879) 129 OTHER SUPPLEMENTARY INFORMATION 130 COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES 131 CITY OF LANSING NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET JUNE 30,2022 Special Debt Capital Revenue Service Projects Permanent Funds Fund Funds Funds Total ASSETS Cash and cash equivalents $ 48,000 $ - $ 8,509,288 $ $ 8,557,288 Equity in pooled cash and investments 21,952,714 29,361 10,313,372 1,805,027 34,100,474 Receivables Accounts,net 21,615 - 5,308,705 - 5,330,320 Loans 1,185,000 - 1,185,000 Accrued interest 2,350,196 - 2,350,196 Special assessments Current - 420,578 420,578 Noncurrent - 10,294,161 10,294,161 Due from other governmental units 3,580,605 - 3,580,605 Inventories 1,348,300 1,348,300 Prepaids 250 250 TOTAL ASSETS $ 30,486,680 $ 29,361 $ 34,846,104 $ 1,805,027 $ 67,167,172 LIABILITIES Accounts payable $ 1,384,395 $ - $ 1,630,880 $ - $ 3,015,275 Accrued liabilities 92,912 - 92,912 Indemnity bonds 43,867 43,867 Due to other funds 478,834 478,834 Due to other governmental units 310,476 310,476 Undistributed forfeitures 14,600 - 14,600 Unearned revenue 46,005 80,000 126,005 TOTAL LIABILITIES 2,371,089 1,710,880 4,081,969 DEFERRED INFLOWS OF RESOURCES Unavailable revenue-loans and accrued interest receivable 3,442,480 5,125,000 8,567,480 Unavailable revenue-special assessments - 10,294,161 10,294,161 TOTAL DEFERRED INFLOWS OF RESOURCES 3,442,480 15,419,161 18,861,641 FUND BALANCES Nonspendable 1,348,550 - 1,805,027 3,153,577 Restricted 22,832,972 29,361 13,015,138 - 35,877,471 Committed 491,589 - 4,700,925 - 5,192,514 TOTAL FUND BALANCES 24,673,111 29,361 17,716,063 1,805,027 44,223,562 TOTAL LIABILITIES,DEFERRED INFLOWS OF RESOURCES,AND FUND BALANCES $ 30,486,680 $ 29,361 $ 34,846,104 $ 1,805,027 $ 67,167,172 132 CITY OF LANSING NONMAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES,EXPENDITURES, AND CHANGES IN FUND BALANCES YEAR ENDED JUNE 30,2022 Special Debt Capital Revenue Service Projects Permanent Funds Fund Funds Funds Total REVENUES Property taxes and special assessments $ 424,886 $ $ 1,358,807 $ $ 1,783,693 Intergovernmental 25,791,952 - 25,791,952 Charges for services 3,553,653 455,768 4,009,421 Fines and forfeits 241,033 - 241,033 Interest income(loss)and rents 38,139 (213,936) (175,797) Other 435,458 - 435,458 TOTAL REVENUES 30,485,121 1,814,575 (213,936) 32,085,760 EXPENDITURES Current General government 3,530,734 3,530,734 Public safety 746,942 746,942 Highways and streets 11,450,485 11,450,485 Community and economic development 1,390,328 1,390,328 Debt service Principal 1,387,289 1,112,880 2,500,169 Interest and fiscal charges 295,724 1,103,281 1,399,005 Capital outlay 10,941,270 7,455,647 18,396,917 TOTAL EXPENDITURES 29,742,772 9,671,808 39,414,580 EXCESS OF REVENUES OVER (UNDER)EXPENDITURES 742,349 (7,857,233) (213,936) (7,328,820) OTHER FINANCING SOURCES(USES) Proceeds from debt issuances - 27,559,000 27,559,000 Payment to refunding bond escrow agent (8,621,566) (8,621,566) Proceeds from sale of capital assets - 400,000 400,000 Transfers in 6,435,000 3,412,000 28,000 9,875,000 Transfers out (4,000,000) (725,000) - (4,725,000) TOTAL OTHER FINANCING SOURCES(USES) 2,435,000 22,024,434 28,000 24,487,434 NET CHANGE IN FUND BALANCES 3,177,349 14,167,201 (185,936) 17,158,614 Fund balances,beginning of year 21,495,762 29,361 3,548,862 1,990,963 27,064,948 Fund balances,end of year $ 24,673,111 $ 29,361 $ 17,716,063 $ 1,805,027 $ 44,223,562 133 CITY OF LANSING 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 restricted 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 restricted 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. Tri-County Metro Fund This fund accounts for the operations of the Tri-County Metro Narcotics Squad. 134 CITY OF LANSING NONMAJOR SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET JUNE 30,2022 Drug Law Drug Law Enforcement Enforcement State and Major Streets Local Streets Federal Local ASSETS Cash and cash equivalents $ - $ - $ - $ 23,000 Equity in pooled cash and investments 11,216,741 4,404,041 204,095 367,218 Receivables Accounts,net - - - - Loans -Accrued interest - - - Due from other governmental units 2,395,272 559,937 - Inventories 1,348,300 - - Prepaids - - - TOTAL ASSETS $ 14,960,313 $ 4,963,978 $ 204,095 $ 390,218 LIABILITIES Accounts payable $ 935,603 $ 215,220 $ 7,235 $ 94,761 Accrued payroll and related - 4,084 - - Indemnity bonds 43,867 - - Due to other funds - Due to other governmental units - Undistributed forfeitures - Unearned revenue 41,942 - - - TOTAL LIABILITIES 1,021,412 219,304 7,235 94,761 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - - - - FUND BALANCES Nonspendable 1,348,300 - - - Restricted 12,590,601 4,744,674 196,860 295,457 Committed - - - - TOTAL FUND BALANCES 13,938,901 4,744,674 196,860 295,457 TOTAL LIABILITIES,DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES $ 14,960,313 $ 4,963,978 $ 204,095 $ 390,218 135 Community Development Block Grant Downtown Building Parks Tri-County Program Lansing,Inc. Department Department Metro Total $ - $ - $ - $ - $ 25,000 $ 48,000 440,207 4,413,125 491,589 415,698 21,952,714 - 21,615 - - 21,615 1,185,000 - - - 1,185,000 2,350,196 - - 2,350,196 483,695 - 141,701 3,580,605 - - - - 1,348,300 - 250 - - - 250 $ 4,018,891 $ 440,457 $ 4,434,740 $ 491,589 $ 582,399 $ 30,486,680 $ 72,935 $ 27,956 $ 13,118 $ - $ 17,567 $ 1,384,395 24,641 10,632 50,985 2,570 92,912 - - - - 43,867 478,834 - 478,834 - 310,476 310,476 - 14,600 14,600 - - 4,063 - 46,005 576,410 38,588 68,166 345,213 2,371,089 3,442,480 - - - 3,442,480 - 250 - - 1,348,550 1 401,619 4,366,574 - 237,186 22,832,972 - - - 491,589 - 491,589 1 401,869 4,366,574 491,589 237,186 24,673,111 $ 4,018,891 $ 440,457 $ 4,434,740 $ 491,589 $ 582,399 $ 30,486,680 136 CITY OF LANSING NONMAJOR SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES,EXPENDITURES, AND CHANGES IN FUND BALANCES YEAR ENDED JUNE 30,2022 Drug Law Drug Law Enforcement Enforcement State and Major Streets Local Streets Federal Local REVENUES Property taxes and special assessments $ 19,444 $ - $ - $ Intergovernmental 19,982,090 3,636,970 - Charges for services - 2,175 - - Fines and forfeits - - - 159,650 Interest and rents 19,586 15,019 431 542 Other revenues 75,886 - - - TOTAL REVENUES 20,097,006 3,654,164 431 160,192 EXPENDITURES Current General government - - - - Public safety - - 93,882 8,181 Highways and streets 5,911,960 5,538,525 - - Community development - - - Debt service Principal 701,830 685,459 - Interest 95,527 200,197 - Capital outlay 8,473,067 2,468,203 - - TOTAL EXPENDITURES 15,182,384 8,892,384 93,882 8,181 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 4,914,622 (5,238,220) (93,451) 152,011 OTHER FINANCING SOURCES (USES) Transfers in - 6,350,000 - - Transfers out (4,000,000) - - TOTAL OTHER FINANCING SOURCES (USES) (4,000,000) 6,350,000 - - NET CHANGE IN FUND BALANCES 914,622 1,111,780 (93,451) 152,011 Fund balances,beginning of year 13,024,279 3,632,894 290,311 143,446 Fund balances,end of year $ 13,938,901 $ 4,744,674 $ 196,860 $ 295,457 137 Community Development Block Grant Downtown Building Parks Tri-County Program Lansing,Inc. Department Department Metro Total $ - $ 405,442 $ $ $ - $ 424,886 1,268,648 302,250 601,994 25,791,952 - - 3,551,478 - 3,553,653 - - 81,383 241,033 - 725 1,049 787 38,139 121,680 237,892 - - 435,458 1,390,328 946,309 3,551,478 1,049 684,164 30,485,121 - 804,816 2,725,918 - - 3,530,734 - - 644,879 746,942 - - - 11,450,485 1,390,328 - - 1,390,328 - - - 1,387,289 - - 295,724 - - - 10,941,270 1,390,328 804,816 2,725,918 - 644,879 29,742,772 - 141,493 825,560 1,049 39,285 742,349 85,000 - - - 6,435,000 - - (4,000,000) 85,000 - - - 2,435,000 - 226,493 825,560 1,049 39,285 3,177,349 1 175,376 3,541,014 490,540 197,901 21,495,762 $ 1 $ 401,869 $ 4,366,574 $ 491,589 $ 237,186 $ 24,673,111 138 CITY OF LANSING NONMAJOR SPECIAL REVENUE FUNDS SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL YEAR ENDED JUNE 30,2022 Major Streets Fund Variances with Final Final Budget Original Amended Positive Budget Budget Actual (Negative) REVENUES Property taxes and special assessments $ 150,000 $ 150,000 $ 19,444 $ (130,556) Intergovernmental 11,827,258 11,827,258 19,982,090 8,154,832 Interest and rents - - 19,586 19,586 Other revenues 72,000 72,000 75,886 3,886 TOTAL REVENUES 12,049,258 12,049,258 20,097,006 8,047,748 EXPENDITURES Current Highways and streets 7,237,818 7,237,818 5,911,960 1,325,858 Debt service Principal 702,289 702,289 701,830 459 Interest 95,568 95,568 95,527 41 Capital outlay 4,980,000 4,980,000 8,473,067 (3,493,067) TOTAL EXPENDITURES 13,015,675 13,015,675 15,182,384 (2,166,709) EXCESS OF REVENUES OVER (UNDER)EXPENDITURES (966,417) (966,417) 4,914,622 5,881,039 OTHER FINANCING USES Transfers out (4,000,000) (4,000,000) (4,000,000) - NET CHANGE IN FUND BALANCE (4,966,417) (4,966,417) 914,622 5,881,039 Fund balance,beginning of year 13,024,279 13,024,279 13,024,279 - Fund balance,end of year $ 8,057,862 $ 8,057,862 $ 13,938,901 $ 5,881,039 139 CITY OF LANSING NONMAJOR SPECIAL REVENUE FUNDS SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL YEAR ENDED JUNE 30,2022 Local Streets Fund Variances with Final Final Budget Original Amended Positive Budget Budget Actual (Negative) REVENUES Property taxes and special assessments $ 150,000 $ 150,000 $ $ (150,000) Intergovernmental 3,575,753 3,575,753 3,636,970 61,217 Miscellaneous revenue - - 2,175 2,175 Interest and rents - - 15,019 15,019 TOTAL REVENUES 3,725,753 3,725,753 3,654,164 (71,589) EXPENDITURES Current Highways and streets 6,668,479 6,668,479 5,538,525 1,129,954 Debt service Principal 685,459 685,459 685,459 - Interest 200,197 200,197 200,197 - Capital outlay 3,856,000 3,856,000 2,468,203 1,387,797 TOTAL EXPENDITURES 11,410,135 11,410,135 8,892,384 2,517,751 EXCESS OF REVENUES UNDER EXPENDITURES (7,684,382) (7,684,382) (5,238,220) 2,446,162 OTHER FINANCING SOURCES(USES) Transfers in 6,350,000 6,350,000 6,350,000 - NET CHANGE IN FUND BALANCE (1,334,382) (1,334,382) 1,111,780 2,446,162 Fund balance,beginning of year 3,632,894 3,632,894 3,632,894 - Fund balance,end of year $ 2,298,512 $ 2,298,512 $ 4,744,674 $ 2,446,162 140 CITY OF LANSING NONMAJOR SPECIAL REVENUE FUNDS SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL YEAR ENDED JUNE 30,2022 Drug Law Enforcement Federal Fund Variances with Final Final Budget Original Amended Positive Budget Budget Actual (Negative) REVENUES Interest and rents $ 4,000 $ 4,000 $ 431 $ (3,569) EXPENDITURES Current Public safety 204,000 204,000 93,882 110,118 NET CHANGE IN FUND BALANCE (200,000) (200,000) (93,451) 106,549 Fund balance,beginning of year 290,311 290,311 290,311 - Fund balance,end of year $ 90,311 $ 90,311 $ 196,860 $ 106,549 141 CITY OF LANSING NONMAJOR SPECIAL REVENUE FUNDS SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL YEAR ENDED JUNE 30,2022 Drug Law Enforcement State and Local Fund Variances with Final Final Budget Original Amended Positive Budget Budget Actual (Negative) REVENUES Fines and forfeitures $ - $ 100,000 $ 159,650 $ 59,650 Interest and rents 7,500 7,500 542 (6,958) TOTAL REVENUES 7,500 107,500 160,192 52,692 EXPENDITURES Current Public safety - 10,000 8,181 1,819 NET CHANGE IN FUND BALANCE 7,500 97,500 152,011 54,511 Fund balance,beginning of year 143,446 143,446 143,446 - Fund balance,end of year $ 150,946 $ 240,946 $ 295,457 $ 54,511 142 CITY OF LANSING NONMAJOR SPECIAL REVENUE FUNDS SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL YEAR ENDED JUNE 30,2022 CDBG Program Fund Variances with Final Final Budget Original Amended Positive Budget Budget Actual (Negative) REVENUES Intergovernmental $ 2,124,580 $ 2,124,580 $ 1,268,648 $ (855,932) Other revenues 115,000 115,000 121,680 6,680 TOTAL REVENUES 2,239,580 2,239,580 1,390,328 (849,252) EXPENDITURES Current Community development 2,489,580 2,489,580 1,390,328 1,099,252 TOTAL EXPENDITURES 2,489,580 2,489,580 1,390,328 1,099,252 EXCESS OF REVENUES UNDER EXPENDITURES (250,000) (250,000) - 250,000 OTHER FINANCING SOURCES Transfers in 250,000 250,000 (250,000) NET CHANGE IN FUND BALANCE - - - Fund balance,beginning of year 1 1 1 Fund balance,end of year $ 1 $ 1 $ 1 $ 143 CITY OF LANSING NONMAJOR SPECIAL REVENUE FUNDS SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL YEAR ENDED JUNE 30,2022 Downtown Lansing,Inc.Fund Variances with Final Final Budget Original Amended Positive Budget Budget Actual (Negative) REVENUES Property taxes and special assessments $ 424,000 $ 424,000 $ 405,442 $ (18,558) Intergovernmental 20,000 320,000 302,250 (17,750) Interest and rents - - 725 725 Other revenues 42,300 222,000 237,892 15,892 TOTAL REVENUES 486,300 966,000 946,309 (19,691) EXPENDITURES Current General government 571,300 831,003 804,816 26,187 EXCESS OF REVENUES OVER (UNDER)EXPENDITURES (85,000) 134,997 141,493 6,496 OTHER FINANCING SOURCES Transfers in 85,000 85,000 85,000 NET CHANGE IN FUND BALANCE - 219,997 226,493 6,496 Fund balance,beginning of year 175,376 175,376 175,376 - Fund balance,end of year $ 175,376 $ 395,373 $ 401,869 $ 6,496 144 CITY OF LANSING NONMAJOR SPECIAL REVENUE FUNDS SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL YEAR ENDED JUNE 30,2022 Building Department Fund Variances with Final Final Budget Original Amended Positive Budget Budget Actual (Negative) REVENUES Charges for services $ 2,932,000 $ 2,932,000 $ 3,551,478 $ 619,478 EXPENDITURES Current General government 2,882,000 2,882,000 2,725,918 156,082 NET CHANGE IN FUND BALANCE 50,000 50,000 825,560 775,560 Fund balance,beginning of year 3,541,014 3,541,014 3,541,014 - Fund balance,end of year $ 3,591,014 $ 3,591,014 $ 4,366,574 $ 775,560 145 CITY OF LANSING NONMAJOR SPECIAL REVENUE FUNDS SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL YEAR ENDED JUNE 30,2022 Parks Department Fund Variances with Final Final Budget Original Amended Positive Budget Budget Actual (Negative) REVENUES Interest and rents $ $ $ 1,049 $ 1,049 NET CHANGE IN FUND BALANCE 1,049 1,049 Fund balance,beginning of year 490,540 490,540 490,540 - Fund balance,end of year $ 490,540 $ 490,540 $ 491,589 $ 1,049 146 CITY OF LANSING NONMAJOR SPECIAL REVENUE FUNDS SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL YEAR ENDED JUNE 30,2022 Tri County Metro Fund Variances with Final Final Budget Original Amended Positive Budget Budget Actual (Negative) REVENUES Intergovernmental $ $ 425,000 $ 601,994 $ 176,994 Fines and forfeitures 120,000 81,383 (38,617) Interest and rents 8,000 8,000 787 (7,213) TOTAL REVENUES 8,000 553,000 684,164 131,164 EXPENDITURES Current Public safety - 552,000 644,879 (92,879) NET CHANGE IN FUND BALANCE 8,000 1,000 39,285 38,285 Fund balance,beginning of year 197,901 197,901 197,901 - Fund balance,end of year $ 205,901 $ 198,901 $ 237,186 $ 38,285 147 CITY OF LANSING NONMAJOR DEBT SERVICE FUND 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). 148 CITY OF LANSING NONMAJOR DEBT SERVICE FUND BALANCESHEET JUNE 30,2022 1999 Fire Station ASSETS Equity in pooled cash and investments $ 29,361 FUND BALANCES Restricted $ 29,361 149 CITY OF LANSING NONMAJOR DEBT SERVICE FUND STATEMENT OF REVENUES,EXPENDITURES, AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30,2022 1999 Fire Station EXPENDITURES Current Interest and fiscal charges $ - EXCESS OF REVENUES OVER (UNDER) EXPENDITURES - OTHER FINANCING SOURCES (USES) Transfers in - Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES Fund balances,beginning of year 29,361 Fund balances,end of year $ 29,361 150 CITY OF LANSING 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. Montgomery Drain Fund This fund is used to account for the financing of public improvements deemed to benefit the properties against which special assessments are levied,specifically for the Montgomery Drain. Other Capital Projects Fund This fund accounts for accounts for miscellaneous capital projects. 151 CITY OF LANSING NONMAJOR CAPITAL PROJECTS FUNDS COMBINING BALANCE SHEET JUNE 30,2022 Special Montgomery Other Capital Assessments Drain Projects Total ASSETS Cash and cash equivalents $ - $ - $ 8,509,288 $ 8,509,288 Equity in pooled cash and investments 25,273 1,639,837 8,648,262 10,313,372 Receivables Accounts and loan receivable - - 5,308,705 5,308,705 Special assessments Current 21,179 399,399 - 420,578 Noncurrent 72,731 10,221,430 - 10,294,161 TOTAL ASSETS $ 119,183 $ 12,260,666 $ 22,466,255 $ 34,846,104 LIABILITIES Accounts payable $ - $ - $ 1,630,880 $ 1,630,880 Unearned revenue 80,000 80,000 TOTAL LIABILITIES 1,710,880 1,710,880 DEFERRED INFLOWS OF RESOURCES Unavailable revenue-loans and accrued interest receivable - - 5,125,000 5,125,000 Unavailable revenue-special assessments 72,731 10,221,430 - 10,294,161 TOTAL DEFERRED INFLOWS OF RESOURCES 72,731 10,221,430 5,125,000 15,419,161 FUND BALANCES Restricted 46,452 2,039,236 10,929,450 13,015,138 Committed - 4,700,925 4,700,925 TOTAL FUND BALANCES 46,452 2,039,236 15,630,375 17,716,063 TOTAL LIABILITIES,DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES $ 119,183 $ 12,260,666 $ 22,466,255 $ 34,846,104 152 CITY OF LANSING NONMAJOR CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES,EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30,2022 Special Montgomery Other Capital Assessments Drain Projects Total REVENUES Property taxes and special assessments $ 46,452 $ 1,312,355 $ - $ 1,358,807 Charges for services - - 455,768 455,768 TOTAL REVENUES 46,452 1,312,355 455,768 1,814,575 EXPENDITURES Debt service Principal - 417,880 695,000 1,112,880 Interest and fiscal charges 348,601 754,680 1,103,281 Capital outlay - 7,455,647 7,455,647 TOTAL EXPENDITURES - 766,481 8,905,327 9,671,808 EXCESS OF REVENUES OVER (UNDER)EXPENDITURES 46,452 545,874 (8,449,559) (7,857,233) OTHER FINANCING SOURCES(USES) Proceeds from debt issuances - - 27,559,000 27,559,000 Proceeds from sale of capital assets 400,000 400,000 Payment to refunding bond escrow agent (8,621,566) (8,621,566) Transfers in 3,412,000 3,412,000 Transfers out (725,000) (725,000) TOTAL OTHER FINANCING SOURCES(USES) - - 22,024,434 22,024,434 NET CHANGE IN FUND BALANCES 46,452 545,874 13,574,875 14,167,201 Fund balances,beginning of year - 1,493,362 2,055,500 3,548,862 Fund balances,end of year $ 46,452 $ 2,039,236 $ 15,630,375 $ 17,716,063 153 CITY OF LANSING 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. 154 CITY OF LANSING NONMAJOR PERMANENT FUNDS COMBINING BALANCE SHEET JUNE 30,2022 Cemetery Perpetual Care Parks Trust Total ASSETS Equity in pooled cash and investments $ 1,803,719 $ 1,308 $ 1,805,027 FUND BALANCES Nonspendable $ 1,803,719 $ 1,308 $ 1,805,027 155 CITY OF LANSING NONMAJOR PERMANENT FUNDS COMBINING STATEMENT OF REVENUES,EXPENDITURES, AND CHANGES IN FUND BALANCES YEAR ENDED JUNE 30,2022 Cemetery Perpetual Care Parks Trust Total REVENUES Interest income (loss) and rents $ (213,938) $ 2 $ (213,936) OTHER FINANCING SOURCES Transfers in 28,000 - 28,000 NET CHANGE IN FUND BALANCES (185,938) 2 (185,936) Fund balances,beginning of year 1,989,657 1,306 1,990,963 Fund balances,end of year $ 1,803,719 $ 1,308 $ 1,805,027 156 CITY OF LANSING 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. 157 CITY OF LANSING NONMAJOR ENTERPRISE FUNDS COMBINING STATEMENT OF NET POSITION JUNE 30,2022 Garbage and Rubbish Cemetery Golf Collection Recycling Total ASSETS Current assets Cash and cash equivalents $ 200 $ - $ - $ - $ 200 Equity in pooled cash and investments 932,085 119,095 2,119,768 2,299,861 5,470,809 Accounts receivable,net - - - 47,474 47,474 Inventories 52,521 - - 52,521 Total current assets 984,806 119,095 2,119,768 2,347,335 5,571,004 Noncurrent assets Capital assets not being depreciated 57,740 345,647 - - 403,387 Capital assets being depreciated,net 57,742 1,591,708 16,099 1,665,549 Total noncurrent assets 115,482 1,937,355 16,099 2,068,936 TOTAL ASSETS 1,100,288 2,056,450 2,119,768 2,363,434 7,639,940 DEFERRED OUTFLOW OF RESOURCES Deferred outflows of resources related to pension 125,492 - 218,184 420,682 764,358 Deferred outflows of resources related to OPEB 88,732 154,273 297,454 540,459 TOTAL DEFERRED OUTFLOWS OF RESOURCES 214,224 372,457 718,136 1,304,817 LIABILITIES Current liabilities Accounts payable 22,732 69,207 165,396 257,335 Accrued payroll 2,338 3,605 3,605 9,548 Current portion of compensated absences 818 1,269 2,850 4,937 Total current liabilities 25,888 74,081 171,851 271,820 Noncurrent liabilities Compensated absences,net of current portion 45,602 63,489 142,650 251,741 Net pension liability 1,394,725 2,424,919 4,675,497 8,495,141 Net other postemployment benefit liability 768,494 1,336,131 2,576,201 4,680,826 Total noncurrent liabilities 2,208,821 3,824,539 7,394,348 13,427,708 TOTAL LIABILITIES 2,234,709 3,898,620 7,566,199 13,699,528 DEFERRED INFLOW OF RESOURCES Deferred inflows of resources related to pension 33,591 58,403 112,607 204,601 Deferred inflows of resources related to OPEB 311,579 541,723 1,044,498 1,897,800 TOTAL DEFERRED INFLOWS OF RESOURCES 345,170 600,126 1,157,105 2,102,401 NET POSITION(DEFICIT) Net investment in capital assets 115,482 1,937,355 - 16,099 2,068,936 Unrestricted (1,380,849) 119,095 (2,006,521) (5,657,833) (8,926,108) TOTAL NET POSITION(DEFICIT) $ (1,265,367) $ 2,056,450 $ (2,006,521) $ (5,641,734) $ (6,857,172) 158 CITY OF LANSING NONMAJOR ENTERPRISE FUNDS COMBINING STATEMENT OF REVENUES,EXPENSES, AND CHANGES IN FUND NET POSITION FOR THE YEAR ENDED JUNE 30,2022 Garbage and Rubbish Cemetery Golf Collection Recycling Total OPERATING REVENUES Charges for services $ 526,299 $ $ 3,246,590 $ 4,455,510 $ 8,228,399 OPERATING EXPENSES Personnel services (222,766) 253,444 306,534 337,212 Purchase of goods and services 311,333 92,197 1,255,696 1,343,455 3,002,681 Depreciation 9,827 72,681 - 5,366 87,874 TOTAL OPERATING EXPENSES 98,394 164,878 1,509,140 1,655,355 3,427,767 OPERATING INCOME(LOSS) 427,905 (164,878) 1,737,450 2,800,155 4,800,632 NONOPERATING REVENUES(EXPENSES) Interest revenue - - 5,996 5,996 Interest expense and fees (1,164) (1,164) TOTAL NONOPERATING REVENUES(EXPENSES) - - 4,832 4,832 NET INCOME(LOSS)BEFORE TRANSFERS 427,905 (164,878) 1,737,450 2,804,987 4,805,464 TRANSFERS Transfers in 540,000 85,000 - - 625,000 Transfers out (28,000) - (28,000) TOTAL TRANSFERS 512,000 85,000 - - 597,000 CHANGE IN NET POSITION 939,905 (79,878) 1,737,450 2,804,987 5,402,464 Net position(deficit),beginning of year (2,205,272) 2,136,328 (3,743,971) (8,446,721) (12,259,636) Net position(deficit),end of year $ (1,265,367) $ 2,056,450 $ (2,006,521) $ (5,641,734) $ (6,857,172) 159 CITY OF LANSING NONMAJOR ENTERPRISE FUNDS COMBINING STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30,2022 Garbage and Rubbish Cemetery Golf Collection Recycling Total CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 526,299 $ - $ 2,921,780 $ 4,472,241 $ 7,920,320 Cash payments for good and services (332,589) (92,252) (1,237,378) (1,136,939) (2,799,158) Cash payments to employees (484,145) - (1,067,534) (2,195,594) (3,747,273) NET CASH PROVIDED(USED)BY OPERATING ACTIVITIES (290,435) (92,252) 616,868 1,139,708 1,373,889 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers in 540,000 85,000 - - 625,000 Transfers out (28,000) (28,000) NET CASH PROVIDED(USED)BY NONCAPITAL FINANCING ACTIVITIES 512,000 85,000 597,000 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal paid on long-term obligations (118,343) (118,343) Interest paid on long-term obligations (1,744) (1,744) NET CASH USED BY CAPITAL AND RELATED FINANCING ACTIVITIES (120,087) (120,087) CASH FLOWS FROM INVESTING ACTIVITIES Interest and dividends received - - 5,996 5,996 NET CHANGE IN CASH AND CASH EQUIVALENTS 221,565 (7,252) 616,868 1,025,617 1,856,798 Cash and cash equivalents,beginning ofyear 710,720 126,347 1,502,900 1,274,244 3,614,211 Cash and cash equivalents,end of year $ 932,285 $ 119,095 $ 2,119,768 $ 2,299,861 $ 5,471,009 Reconciliation of operating income(loss)to net cash provided(used)by operating activities Operating income(loss) $ 427,905 $ (164,878) $ 1,737,450 $ 2,800,155 $ 4,800,632 Adjustments to reconcile operating income(loss)to net cash provided(used)by operating activities Depreciation 9,827 72,681 5,366 87,874 Changes in: Accounts receivable - 103 16,731 16,834 Inventory (7,442) (7,442) Prepaids 136,484 136,484 Deferred outflows pension (46,560) (91,893) (168,852) (307,305) Deferred outflows-OPEB 51,220 69,652 149,063 269,935 Accounts payable (13,814) (55) 18,318 70,032 74,481 Accrued payroll 363 - 3,605 3,605 7,573 Unearned revenue (324,913) (324,913) Compensated absences 4,761 3,507 7,880 16,148 Net pension liability (56,380) 103,150 45,779 92,549 Deferred inflows-pension (106,154) (165,189) (333,246) (604,589) Net other postemployment benefit liability (7,146) 95,105 101,536 189,495 Deferred inflows-OPEB (547,015) (832,027) (1,694,825) (3,073,867) NET CASH PROVIDED(USED)BY OPERATING ACTIVITIES $ (290,435) $ (92,252) $ 616,868 $ 1,139,708 $ 1,373,889 160 CITY OF LANSING 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. 161 CITY OF LANSING INTERNAL SERVICE FUNDS COMBINING STATEMENT OF NET POSITION JUNE 30,2022 Fleet Fringe Information Maintenance Benefits Engineering Technology Total ASSETS Current assets Equity in pooled cash and investments $ 5,577,661 $ 8,124,929 $ 2,125,318 $ 2,771,873 $ 18,599,781 Accounts receivable,net 8,084 860,814 - 80 868,978 Inventories 530,785 - - 530,785 Prepaids - 1,507,562 1,507,562 Total current assets 6,116,530 10,493,305 2,125,318 2,771,953 21,507,106 Noncurrent assets Capital assets not being depreciated 92,892 - - - 92,892 Capital assets being depreciated,net 7,889,751 1,340,568 9,230,319 Total noncurrent assets 7,982,643 1,340,568 9,323,211 TOTAL ASSETS 14,099,173 10,493,305 3,465,886 2,771,953 30,830,317 LIABILITIES Current liabilities Accounts payable 204,234 1,120,310 6,644 141,666 1,472,854 Accrued payroll 91,695 137,417 89,105 61,804 380,021 Accrued interest payable 4,081 - - - 4,081 Claims incurred but not reported - 1,500,000 1,500,000 Current portion of: Bonds and notes payable 129,642 - - - 129,642 Compensated absences 1,981 1,763 20,214 23,958 Total current liabilities 431,633 2,757,727 97,512 223,684 3,510,556 Noncurrent liabilities Bonds and notes payable,net of current portion 1,036,287 - - - 1,036,287 Compensated absences,net of current portion 211,630 62,837 417,678 237,081 929,226 Total noncurrent liabilities 1,247,917 62,837 417,678 237,081 1,965,513 TOTAL LIABILITIES 1,679,550 2,820,564 515,190 460,765 5,476,069 NET POSITION Net investment in capital assets 6,816,714 - 1,340,568 - 8,157,282 Unrestricted 5,602,909 7,672,741 1,610,128 2,311,188 17,196,966 TOTAL NET POSITION $ 12,419,623 $ 7,672,741 $ 2,950,696 $ 2,311,188 $ 25,354,248 162 CITY OF LANSING INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES,EXPENSES, AND CHANGES IN FUND NET POSITION YEAR ENDED JUNE 30,2022 Fleet Information Maintenance Fringe Benefits Engineering Technology Total OPERATING REVENUES Charges for services $ 9,716,059 $ 73,321,381 $ 5,267,198 $ 7,602,508 $ 95,907,146 Miscellaneous 56,961 1,990 - 58,951 TOTAL OPERATING REVENUES 9,716,059 73,378,342 5,269,188 7,602,508 95,966,097 OPERATING EXPENSES Personnel services 3,426,588 332,326 3,099,424 2,165,421 9,023,759 Purchase of goods and services 3,935,244 68,613,292 1,714,808 4,582,983 78,846,327 Depreciation 2,064,883 - 44,886 - 2,109,769 TOTAL OPERATING EXPENSES 9,426,715 68,945,618 4,859,118 6,748,404 89,979,855 OPERATING INCOME 289,344 4,432,724 410,070 854,104 5,986,242 NONOPERATING REVENUES(EXPENSES) Gain on sale of capital assets 134,526 - - - 134,526 Interest expense and fees (18,257) (18,257) TOTAL NONOPERATING REVENUES(EXPENSES) 116,269 - - - 116,269 CHANGE IN NET POSITION 405,613 4,432,724 410,070 854,104 6,102,511 Net position,beginning of year 12,014,010 3,240,017 2,540,626 1,457,084 19,251,737 Net position,end of year $ 12,419,623 $ 7,672,741 $ 2,950,696 $ 2,311,188 $ 25,354,248 163 CITY OF LANSING INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30,2022 Fleet Information Maintenance Fringe Benefits Engineering Technology Total CASH FLOWS FROM OPERATING ACTIVITIES Cash received from interfund services $ 9,761,160 $ 73,804,278 $ 5,269,188 $ 7,602,508 $ 96,437,134 Cash payments for goods and services (3,989,360) (68,000,622) (1,708,321) (4,551,742) (78,250,045) Cash payments to employees (3,413,244) (1,275,006) (3,028,117) (2,148,921) (9,865,288) NET CASH PROVIDED BY OPERATING ACTIVITIES 2,358,556 4,528,650 532,750 901,845 8,321,801 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from sale of capital assets 134,526 - - - 134,526 Purchase of capital assets (1,238,343) (1,238,343) Principal paid on long-term obligations (233,466) (233,466) Interest paid on long-term obligations (19,222) (19,222) NET CASH(USED)CAPITAL AND BY RELATED FINANCING ACTIVITIES (1,356,505) (1,356,505) NET INCREASE IN CASH AND CASH EQUIVALENTS 1,002,051 4,528,650 532,750 901,845 6,965,296 Cash and cash equivalents,beginning of year 4,575,610 3,596,279 1,592,568 1,870,028 11,634,485 Cash and cash equivalents,end of year $ 5,577,661 $ 8,124,929 $ 2,125,318 $ 2,771,873 $ 18,599,781 Reconciliation of operating income to net cash provided by operating activities Operating income $ 289,344 $ 4,432,724 $ 410,070 $ 854,104 $ 5,986,242 Adjustments to reconcile operating income to net cash provided by operating activities Depreciation 2,064,883 - 44,886 - 2,109,769 Changein: Accounts receivable 45,101 (510,057) - (80) (465,036) Prepaids - 461,705 - 461,705 Inventories (71,853) - - - (71,853) Accounts payable 17,737 150,965 6,487 31,321 206,510 Accrued payroll 14,108 124,918 26,948 8,844 174,818 Claims incurred but not reported - (135,000) - - (135,000) Compensated absences (764) 3,395 44,359 7,656 54,646 NET CASH PROVIDED BY OPERATING ACTIVITIES $ 2,358,556 $ 4,528,650 $ 532,750 $ 901,845 $ 8,321,801 164 CITY OF LANSING FIDUCIARY FUNDS Fiduciary Funds are funds set up to account for assets held by the City in a fiduciary capacity, for individuals, organizations, other units of government or other funds. The City's fiduciary funds include pension and other postemployment benefits trust funds and custodial funds. PENSION AND OTHER POSTEMPLOYMENT BENEFITS TRUST FUNDS Employees'Retirement System Pension This fund accounts for all eligible employees (non-police and fire) activity including investing fund resources and calculating and paying pension benefits to applicable retirees (or beneficiaries). Employees'Retirement System OPEB This fund accounts for all eligible employees (non-police and fire) activities related to postemployment healthcare coverage for applicable individuals. Police and Fire Retirement System Pension This fund accounts for all eligible employees' activity including investing fund resources and calculating and paying pension benefits to applicable retirees (or beneficiaries). Police and Fire Retirement System OPEB This fund accounts for all eligible employees' activities related to postemployment healthcare coverage for applicable individuals. Employees'Money Purchase Pension Plan This fund accounts for all newly hired eligible employees who participate in the City's defined contribution plan to account for paying pension benefits to eligible retirees (or beneficiaries). Retiree Healthcare VEBA This fund accounts for all eligible employee's activity related to the defined benefit of postemployment healthcare to provide medical and healthcare benefits for retirees and their beneficiaries. CUSTODIAL FUNDS Custodial funds account for resources received and held by the City, in a custodial capacity, for individuals, organizations and other governments. 54-A District Court Fund This fund is used to hold cash received by the District Court for bail bonds, for garnishment payments until claimed,and to hold indemnity bonds deposited relating to civil disputes until the Court rules on the case. Current Tax Collection Fund This fund is used to account for property taxes collected and distributed to other governments. 165 CITY OF LANSING FIDUCIARY FUNDS COMBINING STATEMENT OF FIDUCIARY NET POSITION JUNE 30,2022 Pension and Other Postemployment Benefits Trust Funds 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 $ 6,090,397 $ 1,390,936 $ 10,075,420 $ 1,459,318 $ - $ - $ 19,016,071 Investments Mutual funds 110,091,809 25,142,971 208,310,511 30,171,571 4,549,579 33,939,595 412,206,036 Domestic equities 31,455,468 7,183,858 63,646,492 9,218,521 - - 111,504,339 International equities 718,781 164,156 1,396,842 202,318 - 2,482,097 Emerging market equities 6,775,984 1,547,512 12,812,804 1,855,799 975,174 23,967,273 Money market funds 3,449,225 787,741 3,393,029 491,444 258,146 8,379,585 Prepaids 852 195 592 86 - 1,725 Dividends and interest receivable 26,685 6,094 50,988 7,385 11,923 103,075 Total assets 158,609,201 36,223,463 299,686,678 43,406,442 4,549,579 35,184,838 577,660,201 Liabilities Accounts payable 150,924 34,470 266,801 38,643 - - 490,838 Due to other governmental units 4,791,924 1,167,240 10,008,562 1,449,634 4,653 319,000 17,741,013 Total liabilities 4,942,848 1,201,710 10,275,363 1,488,277 4,653 319,000 18,231,851 Net position restricted for: Pension benefits 153,666,353 - 289,411,315 - 4,544,926 - 447,622,594 Other postemployment benefits - 35,021,753 - 41,918,165 - 34,865,838 111,805,756 Total net position $ 153,666,353 $ 35,021,753 $ 289,411,315 $ 41,918,165 $ 4,544,926 $ 34,865,838 $ 559,428,350 166 CITY OF LANSING FIDUCIARY FUNDS COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEAR ENDED JUNE 30,2022 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(decrease)in fair value of investments $ (14,356,406) $ (5,833,105) $ (32,083,115) $ (7,656,237) $ - $ (5,491,017) $ (65,419,880) Interest income(loss) 5,527 - (699,336) (693,809) Miscellaneous - 10,942 10,942 Investment expenses (778,859) - (778,859) Net investment income (15,129,738) (5,833,105) (32,083,115) (7,645,295) (699,336) (5,491,017) (66,881,606) Contributions Employer 13,494,287 10,343,555 19,609,552 9,974,904 361,330 300,000 54,083,628 Plan members 1,289,306 - 2,722,350 357,008 - 4,368,664 Total contributions 14,783,593 10,343,555 22,331,902 9,974,904 718,338 300,000 58,452,292 Deductions Participant benefits 24,342,091 8,350,052 36,188,116 7,956,471 - - 76,836,730 Administrative expense 66,474 492,274 88,992 672,516 432,095 119,429 1,871,780 Total deductions 24,408,565 8,842,326 36,277,108 8,628,987 432,095 119,429 78,708,510 Change in net position (24,754,710) (4,331,876) (46,028,321) (6,299,378) (413,093) (5,310,446) (87,137,824) Net position restricted for pension and other postemployment benefits Beginning of year 178,421,063 39,353,629 335,439,636 48,217,543 4,958,019 40,176,284 646,566,174 End of year $ 153,666,353 $ 35,021,753 $ 289,411,315 $ 41,918,165 $ 4,544,926 $ 34,865,838 $ 559,428,350 167 CITY OF LANSING CUSTODIAL FUNDS COMBINING STATEMENT OF FIDUCIARY NET POSITION JUNE 30,2022 54-A District Current Tax Court Collection Total ASSETS Equity in pooled cash and investments $ 19,834 $ - $ 19,834 LIABILITIES Due to individuals and agencies 19,834 - 19,834 NET POSITION Restricted for individuals and agencies $ - $ - $ - 168 CITY OF LANSING CUSTODIAL FUNDS COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION YEAR ENDED JUNE 30,2022 54-A District Current Tax Court Collections Total ADDITIONS TO NET POSITION Collections from or on behalf of individuals $ 383,590 $ - $ 383,590 Collections of taxes for other governments - 126,026,215 126,026,215 TOTAL ADDITIONS 383,590 126,026,215 126,409,805 DEDUCTIONS FROM NET POSITION Payments to or on behalf of individuals 383,590 - 383,590 Payment of taxes collected for other governments - 126,026,215 126,026,215 TOTAL DEDUCTIONS 383,590 126,026,215 126,409,805 NET CHANGE IN NET POSITION - - - Net position,beginning of year - Net position,end of year $ $ - $ 169 STATISTICAL SECTION 170 STATISTICAL SECTION This part of the City of Lansing, Michigan's (the "City") annual comprehensive 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. Paae 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. 172 Revenue Capacity These schedules contain information to help the reader assess the (Tables 5-8) factors affecting the City's ability to generate its property taxes. 177 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. 181 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. 186 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. 188 Sources: Unless otherwise noted, the information in these schedules is derived from the annual comprehensive financial reports for the relevant year. 171 CITY OF LANSING Table 1 NET POSITION BY COMPONENT 2013-2022 (UNAUDITED) (ACCRUAL BASIS OF ACCOUNTING) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Governmental activities Net investment in capital assets $ 154,372,604 $ 150,976,010 $ 151,785,916 $ 149,676,860 $ 149,533,948 $ 148,263,240 $ 146,153,309 $ 143,583,186 $ 153,733,211 $ 159,442,216 Restricted 12,552,011 13,133,137 12,311,541 12,922,525 10,993,950 15,189,723 23,505,738 20,495,617 24,518,910 28,101,348 Unrestricted (39,467,672) (46,344,555) (251,453,207) (265,678,371) (276,790,945) (606,529,375) (629,587,773) (674,087,826) (603,922,567) (578,995,034) Total governmental activities net position $ 127,456,943 $ 117,764,592 $ (87,355,750) $ (103,078,986) $ (116,263,047) $ (443,076,412) $ (459,928,726) $ (510,009,023) $ (425,670,446) $ (391,451,470) Business-type activities Net investment in capital assets $ 212,682,278 $ 214,458,841 $ 218,813,478 $ 220,436,882 $ 224,161,744 $ 227,127,434 $ 233,988,263 $ 234,126,397 $ 219,824,056 $ 232,446,124 Restricted 11,077,134 8,746,096 2,889,096 2,764,963 1,818,671 1,886,620 1,953,175 2,432,963 2,437,390 2,441,780 Unrestricted 31,943,581 37,891,053 17,242,167 19,401,320 25,415,447 (13,854,833) (7,299,147) (13,397,777) 19,032,067 21,195,582 Total business-type activities net position $ 255,702,993 $ 261,095,990 $ 238,944,741 $ 242,603,165 $ 251,395,862 $ 215,159,221 $ 228,642,291 $ 223,161,583 $ 241,293,513 $ 256,083,486 Primary government Net investment in capital assets $ 367,054,882 $ 365,434,851 $ 370,599,394 $ 370,113,742 $ 373,695,692 $ 375,390,674 $ 380,141,572 $ 377,709,583 $ 373,557,267 $ 391,888,340 Restricted 23,629,145 21,879,233 15,200,637 15,687,488 12,812,621 17,076,343 25,458,913 22,928,580 26,956,300 30,543,128 Unrestricted (7,524,091) (8,453,502) (234,211,040) (246,277,051) (251,375,498) (620,384,208) (636,886,920) (687,485,603) (584,890,500) (557,799,452) Total primary government net position $ 383,159,936 $ 378,860,582 $ 151,588,991 $ 139,524,179 $ 135,132,815 $ (227,917,191) $ (231,286,43S $ (286,847,440) $ (184,376,933) $ (135,367,984) Note: No discretely presented component units shown - 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. - 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. 172 CITY OF LANSING Table 2 CHANGES IN NET POSITION 2013-2022 (UNAUDITED) (ACCRUAL BASIS OF ACCOUNTING) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Expenses Governmental activities General government $ 27,438,065 $ 24,771,054 $ 25,225,893 $ 27,993,414 $ 21,778,154 $ 16,995,976 $ 26,679,840 $30,400,643 $ 11,196,979 $ 19,628,516 Public safety 77,133,469 78,142,897 81,827,437 85,739,408 91,829,441 87,352,251 97,391,612 121,102,641 57,170,988 78,113,026 Public works 29,984,955 37,243,516 27,81S,970 28,212,049 28,983,891 26,485,877 29,644,398 35,288,2S4 32,334,504 27,316,002 Recreation and culture 7,713,098 8,670,918 6,515,590 10,336,168 9,441,519 8,302,243 7,650,889 11,238,934 4,125,852 6,707,099 Community and economic development 16,939,572 7,602,229 10,270,404 10,642,102 12,349,663 16,150,417 21,046,090 20,731,730 34,764,843 75,618,986 Interest on long-term debt 1,475,051 1,340,818 1,291,846 1,424,215 1,201,846 1,137,561 1,182,488 733,925 1,072,610 1,84S,964 Total governmental activities expenses 160,684,210 1S7,771,432 152,947,140 164,347,3S6 16S,584,514 156,424,32E 183,S95,317 219,496,127 140,665,776 209,229,593 Business-type activities Sewage disposal system 26,298,964 28,682,809 27,S06,843 28,487,9S7 27,567,228 28,552,143 31,939,976 32,605,664 20,828,495 22,239,978 Municipal parking system 8,108,373 7,851,702 7,60S,461 7,651,077 6,866,747 9,888,246 7,081,998 12,716,606 3,183,095 10,110,065 Cemetery 633,050 722,270 632,485 708,545 886,579 1,379,877 470,220 1,652,2S5 300,009 98,394 Golf 892,117 935,671 852,634 845,575 802,564 (372,775) 278,501 229,467 198,889 164,878 Garbage and rubbish collection 1,557,708 1,722,843 1,712,671 2,085,728 1,543,380 3,101,893 1,035,262 2,431,066 1,753,713 1,509,140 Recycling 3,650,292 3,263,553 3,623,276 4,092,278 3,667,899 3,859,496 3,856,764 5,576,963 2,613,739 1,656,519 Total business-type activities expenses 41,140,504 43,178,848 41,933,370 43,871,160 41,334,397 46,408,880 44,662,721 55,212,021 28,877,940 35,778,974 Total primary government expenses $ 201,824,714 $ 200,950,280 $ 194,880,510 $ 208,218,516 $ 206,918,911 $ 202,833,205 $ 228,258,038 $ 274,708,148 $ 169,543,716 $ 245,008,567 Program Revenues Governmental activities Charges for services General government $ 6,162,713 $ 6,820,261 $ 6,815,975 $ 7,279,427 $ 7,295,556 $ 7,038,702 $ 7,567,720 $7,616,658 $ 10,158,500 $ 9,406,822 Public safety 4,083,222 2,122,023 3,344,183 2,909,0S4 3,476,966 4,140,682 3,935,250 4,770,026 3,553,105 4,423,872 Public works 1,622,738 2,129,126 1,923,303 3,011,894 1,836,466 716,322 2,978,549 536,961 560,343 1,165,080 Recreation and culture 594,349 800,293 619,834 673,840 617,604 831,816 1,092,232 1,038,740 1,188,287 1,192,891 Community and economic development 67,349 67,323 67,264 67,272 67,312 - - - - - Operating grants and contributions 29,322,435 28,234,803 24,658,955 24,561,960 25,157,629 28,983,936 29,663,253 28,534,469 61,065,241 90,177,926 Capital grants and contributions 3,124,286 3,365,682 2,910,660 904,298 63,488 855,760 3,313,872 285,075 15,693,491 5,283,332 Total governmental activities program revenues 44,977,094 43,539,511 40,340,174 39,407,745 38,515,021 42,567,218 48,550,876 42,781,929 92,218,967 111,649,923 Business-type activities Charges for services Sewage disposal system 30,825,174 31,759,698 31,730,416 32,368,491 34,755,896 35,107,S70 35,752,812 34,968,585 38,471,972 35,943,034 Municipal parking system 5,267,627 7,453,476 6,988,879 7,090,335 6,906,091 7,436,552 8,422,161 6,211,685 2,710,377 5,101,852 Cemetery 314,913 289,565 335,379 312,929 403,663 351,204 415,757 403,030 558,744 526,299 Golf 373,000 366,567 363,559 313,164 256,218 179,464 - 3,091 - - Garbage and rubbish collection 1,131,659 1,664,201 1,744,999 1,871,665 1,952,897 2,072,454 2,243,627 2,278,024 2,796,524 3,246,590 Recycling 3,434,622 3,508,536 3,624,671 3,627,070 3,614,794 3,779,468 4,081,700 4,376,310 4,504,054 4,455,510 Operating grants and contributions 1,193,571 2,574,949 1,143,085 1,312,362 1,391,326 1,603,942 6,648,917 2,000,000 - - Capital grants and contributions 100,000 Total business-type activities program revenues 42,540,566 47,616,992 45,930,988 46,896,016 49,380,885 50,530,654 57,564,974 50,240,725 49,041,671 49,273,285 Total primary government program revenues $ 87,517,660 $ 91,156,503 $ 86,271,162 $ 86,303,761 $ 87,895,906 $ 93,097,872 $ 106,115,850 $93,022,654 $ 141,260,638 $ 160,923,208 Net(Expense)Revenue Governmental activities $ (115,707,116) $ (114,231,921) $ (112,606,966) $ (124,939,611) $ (127,069,493) $ (113,857,107) $ (135,044,441) $ (176,714,198) $ (48,446,809) $ (97,579,670) Business-type activities 1,400,062 4,438,144 3,997,618 3,024,BS6 8,046,488 4,121,774 12,902,253 (4,971,296) 20,163,731 13,494,311 Total primary government net expense $ (114,307,054) $ (109,793,777) $ a1 609,348) $ (121,914,755) $ (119,023,005) $ (109,735,333] $ (122,142,188) $ (181,685,494) $ (28,283,078) $ (84,085,359) 173 CITY OF LANSING Table 2 CHANGES IN NET POSITION (concluded) 2013-2022 (UNAUDITED) (ACCRUAL BASIS OF ACCOUNTING) 2013 2014 2015 2016 2017 2018 2019 2020 2022 2022 General Revenues and Other Changes in Net Position Governmental activities General revenues Property taxes $ 38,668,837 $ 38,079,548 $ 39,657,382 $ 38,578,548 $ 40,568,278 $ 39,573,468 $ 41,692,930 $41,675,711 $ 45,690,419 $ 47,620,607 Income taxes 29,850,755 31,450,913 31,660,923 34,573,130 35,694,010 38,455,296 37,021,436 37,438,724 37,005,040 37,087,593 Unrestricted grants contributions 31,425,718 35,677,910 36,330,976 36,532,275 38,108,544 39,419,658 39,530,073 42,029,100 46,503,607 47,820,068 Unrestricted investment earnings 58,588 36,836 26,353 99,058 125,539 216,239 463,685 707,383 187,320 (94,154) Miscellaneous - - 280,280 63,079 135,270 - 64,820 91,088 177,521 (38,468) Transfers-internal activities (5831117) (705,637) (644,485) (629,715) (746,209) (912,186) (580,817) 4,691,895 3,221,479 (597,000) Total governmental activities 99,420,781 104,539,570 107,311,429 109,216,375 113,885,432 116,752,475 118,192,127 126,633,901 132,785,386 131,798,646 Business-type activities Unrestricted investment earnings 356,467 246,616 17,874 - - - - 2,061,667 1,189,678 698,662 Miscellaneous - 2,600 - 3,853 - - - - - - Transfers-internal activities 583,117 705,637 644,485 629,715 746,209 912,186 580,817 (4,691,895) (3,221,479) 597,000 Gain on sale of assets 2,120,816 Total business-type activities 939,584 954,853 662,359 633,568 746,209 912,186 580,817 (509,412) (2,031,801) 1,295,662 Total primary government $ 100,360,365 $ 105,494,423 $ 107,973,788 $ 109,849,943 $ 114,631,641 $ 117,664,661 $ 118,772,944 $ 126,124,489 $ 130,753,585 $ 133,094,308 Change in Net Position Governmental activities $ (16,286,335) $ (9,692,351) $ (5,295,537) $ (15,723,236) $ (13,184,061) $ 2,895,368 $ (16,852,314) $ (50,080,297) $ 84,338,577 $ 34,218,976 Business-type activities 2,339,646 5,392,997 4,659,977 3,658,424 8,792,697 5,033,960 13,483,070 (5,480,708) 18,131,930 14,789,973 Total primary government $ (13,946,689) $ (4,299,354) $ (635,560) $ (12,064,812) $ (4,391,364) $ 7,929,328 $ (3,369,244) $ (55,561,005) $ 102,470,507 $ 49,008,949 174 CITY OF LANSING Table 3 FUND BALANCE GOVERNMENTAL FUNDS 2013-2022 (UNAUDITED) (MODIFIED ACCRUAL BASIS OF ACCOUNTING) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 General fund Nonspendable $ 75,738 $ 79,770 $ 35,424 $ 492,549 $ 28,342 $ 39,437 $ 38,605 $ 185,369 $ 570,654 $ 759,490 Restricted 9,400 36,854 10,044 - - - - - - - Committed 2,976,408 2,038,608 837,761 428,106 385,067 283,815 - - 7,972,836 785,099 Unassigned 5,633,528 7,052,830 9,783,911 12,407,748 15,283,857 17,003,260 9,992,885 9,935,641 21,229,263 21,907,213 Total general fund 8,695,074 9,208,062 10,667,140 13,328,403 15,697,266 17,326,512 10,031,490 10,121,010 29,772,753 23,451,802 All other governmental funds Nonspendable 2,671,151 2,551,975 2,619,065 2,578,331 2,618,884 2,842,489 2,952,027 3,169,987 3,283,816 3,153,577 Restricted 4,368,983 6,902,928 6,865,580 6,934,665 4,730,012 9,009,438 17,038,777 18,550,655 21,235,094 35,877,471 Committed 4,035,145 4,623,112 7,110,485 8,427,253 10,426,961 8,837,341 9,147,988 10,637,417 2,546,040 5,192,514 Unassigned(deficit) (619,931) (522,157) (528,144) (410,252) (411,098) (155,261) (115,546) (82,237) Total all other governmental funds 10,455,348 13,555,858 16,066,986 17,529,997 17,364,759 20,534,007 29,023,246 32,275,822 27,064,950 44,223,562 Total all governmental funds $ 19,150,422 $ 22,763,920 $ 26,734,126 $ 30,858,400 $ 33,062,025 $ 37,860,519 $ 39,054,736 $ 42,396,832 $ 56,837,703 $ 67,675,364 Note: GASB Statement No.54,Fund Balance Reporting and Governmental Fund Type Definitions,was implemented in 2011. Further information on the fund balances are found in the footnotes to the financial statements. 175 CITY OF LANSING Table 4 CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS 2013-2022 (UNAUDITED) (MODIFIED ACCRUAL BASIS OF ACCOUNTING) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Revenues Property taxes and special assessments $ 38,717,552 $ 38,151,162 $ 39,470,249 $ 38,782,759 $ 40,691,325 $ 39,629,305 $ 41,732,645 $ 41,709,020 $ 45,712,919 $ 48,010,607 Income taxes 29,850,755 31,450,913 31,660,923 34,573,130 35,694,010 38,455,296 37,021,436 37,438,724 37,005,040 37,087,593 Licenses and permits 1,509,402 1,508,133 1,551,125 1,559,638 1,494,298 2,113,824 1,399,881 2,427,866 1,930,169 1,932,281 Intergovernmental revenue 40,639,183 41,658,435 36,042,377 34,175,112 36,391,761 41,848,072 45,586,152 44,166,490 77,368,957 113,084,026 Charges for services 11,754,381 13,037,014 12,900,490 14,102,447 13,230,822 12,432,770 15,235,656 13,048,934 15,525,892 15,574,570 Fines and forfeits 3,694,351 2,738,392 3,07S,427 3,455,541 2,510,94S 2,601,063 2,306,990 1,589,733 1,491,641 1,576,283 Interest and rents 53,179 56,550 87,035 145,011 201,367 284,165 631,812 911,454 402,443 119,690 Other 16,757,918 21,379,388 23,162,946 22,854,314 22,952,587 22,101,917 22,391,478 23,371,306 26,397,782 25,760,762 Total revenues 142,976,721 149,979,987 147,950,572 149,647,952 153,167,115 159,466,412 166,306,050 164,663,527 205,834,843 243,145,812 Expenditures Current Expenditures General government 23,595,321 21,063,589 21,720,206 23,386,445 23,948,368 22,281,236 27,340,931 23,111,276 19,864,962 25,473,276 Public safety 63,943,082 72,068,298 75,510,743 72,264,468 73,683,246 75,859,065 78,659,682 80,863,159 76,213,091 90,331,314 Public works 8,908,673 13,456,773 13,273,332 11,715,510 11,201,515 11,087,884 11,632,895 12,368,707 11,010,619 12,955,334 Highway and streets 9,937,423 10,496,880 10,357,488 10,838,473 10,969,516 10,104,034 11,984,896 10,711,027 10,857,448 11,450,485 Recreation and culture 6,629,453 8,457,444 7,583,085 7,719,906 7,749,245 8,236,872 8,138,369 7,420,052 6,497,239 9,134,233 Community and economic development - 3,646,035 3,910,924 3,442,110 4,142,612 15,947,504 19,435,277 18,699,058 43,174,711 76,784,433 Other 23,699,202 2,620,316 2,704,982 2,927,391 2,710,979 - - - - - Debt service Principal 3,137,159 1,185,257 3,616,297 3,892,862 4,596,159 3,622,053 3,183,595 3,286,705 3,359,672 4,518,916 Interest and fiscal charges 1,421,600 3,48S,104 931,079 1,275,957 1,120,518 949,318 1,000,307 823,907 798,387 2,003,677 Capital outlay 5,489,617 8,715,193 21,016,808 7,221,346 9,328,278 5,146,742 4,798,070 7,891,788 21,325,057 18,396,917 Total expenditures 146,761,530 145,194,889 160,624,944 144,684,468 149,450,436 153,234,708 166,174,022 165,175,679 193,101,186 251,048,585 Excess(deficiency)of revenues over expenditures (3,784,809) 4,785,098 (12,674,372) 4,963,484 3,716,679 6,231,704 132,028 (512,152) 12,733,657 (7,902,773) Other financing sources(uses) Transfers in 7,056,932 10,522,162 9,734,572 9,207,856 9,887,627 7,721,661 8,749,296 16,980,511 8,542,188 10,210,859 Transfers out (7,892,449) (12,847,799) (10,002,772) (10,055,346) (11,497,936) (9,283,847) (9,330,113) (13,218,616) (7,325,709) (10,807,859) Proceeds from borrowing 11,932,046 986,300 16,761,300 2,090,000 - - 8,603,699 - - 27,559,000 Proceeds from the sale of capital assets 497,833 167,737 110,533 268 97,255 128,976 - 92,353 490,735 400,000 Payments to advance refunding escrow agent (6,015,112) - - (2,162,163) - - (7,741,363) - - (8,621,566) Bond premium(discount) 40,945 80,175 780,670 Total other financing sources(uses) S,579,250 (1,171,600) 16,644,578 (839,210) (1,513,054) (1,433,210) 1,062,189 3,854,248 1,707,214 18,740,434 Net change in fund balances $ 1,794,441 $ 3,613,498 $ 3,970,206 $ 4,124,274 $ 2,203,625 $ 4,798,494 $ 1,194,217 $ 3,342,096 $ 14,440,871 $ 10,837,661 Debt service as a percentage of noncapital expenditures 3.2% 3.4% 2.8% 3.6% 3.8% 3.0% 2.5% 2.5% 2.7% 2.8% 176 CITY OF LANSING Table 5 ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS (UNAUDITED) Taxable Assessed Value Ratio of Total Industrial and Assessed Commercial Total Taxable to Total Subject to Assessed Total Direct Estimated Estimated Year Real Personal Act 198 Agricultural Developmental Value Tax Rate Actual Value Actual Value 2013 $ 1,232,109,181 $ 182,543,900 $ 673,887,300 $ 151,900 $ - $ 2,088,692,281 19.70 $ 4,177,384,562 50.0% 2014 1,152,931,800 182,024,000 666,477,900 151,900 2,900 2,001,588,500 19.70 4,002,817,000 50.0% 2015 1,144,848,592 183,420,400 758,406,830 158,100 2,900 2,086,836,822 19.70 4,173,673,644 50.0% 2016 1,162,708,909 196,143,891 806,360,800 175,600 2,900 2,165,392,100 19.70 4,330,784,200 50.0% 2017 1,285,584,500 144,076,700 837,758,400 172,500 - 2,267,592,100 19.70 4,535,184,200 50.0% 2018 1,325,754,900 131,924,900 892,135,800 180,000 2,349,995,600 19.70 4,699,991,200 50.0% 2019 1,422,412,200 143,567,100 1,000,797,500 185,300 2,566,962,100 19.70 5,133,924,200 50.0% 2020 1,537,030,826 157,132,900 1,143,059,850 211,800 2,837,435,376 19.70 5,674,870,752 50.0% 2021 1,638,136,900 171,927,400 1,247,559,700 192,100 1 3,057,816,101 19.70 6,115,632,202 50.0% 2022 1,766,415,343 172,959,000 1,285,295,000 206,900 - 3,224,876,243 19.70 6,449,752,486 50.0% Source: Lansing City Assessor 177 CITY OF LANSING Table 6 DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (UNAUDITED) (RATE PER$1,000 OF ASSESSED VALUE) City of Lansing Overlapping Rates Totals Total State Year Ended Operating Service City Schools County Education Other(2) December 31, Tax Year Millage Millage Millage Millage(1) Millage Tax College Millage Millage Total 2013 2012 19.44 .26 19.70 21.73 9.49 6.00 3.81 9.96 70.69 2014 2013 19.44 .26 19.70 21.91 9.50 6.00 3.81 9.96 70.88 2015 2014 19.44 .26 19.70 21.77 10.20 6.00 3.81 9.96 71.44 2016 2015 19.44 .26 19.70 21.83 9.83 6.00 3.81 9.96 71.13 2017 2016 19.44 .26 19.70 22.57 10.06 6.00 3.81 9.96 72.10 2018 2017 19.44 .26 19.70 22.60 10.07 6.00 3.81 11.25 73.43 2019 2018 19.44 .26 19.70 22.50 11.34 6.00 3.81 11.26 74.61 2020 2019 19.44 .26 19.70 25.38 11.34 6.00 3.81 9.97 76.20 2021 2020 19.44 .26 19.70 25.10 11.91 6.00 3.77 10.20 76.68 2022 2021 19.44 .26 19.70 24.51 11.98 6.00 3.77 10.18 76.14 (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 178 CITY OF LANSING Table 7 PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO (UNAUDITED) 2022 2013 Taxable Taxable Assessed Percent Assessed Percent Taxpayer Valuation Rank of Total Valuation Rank of Total General Motors LLC $ 60,598,657 1 1.88% $ 81,468,000 1 3.55% Consumers Energy 58,369,140 2 1.81% 22,283,300 3 0.97% Jackson National Life Insurance Company 38,753,265 3 1.20% 32,771,500 2 1.43% Accident Fund 25,824,100 4 0.80% Lansing Properties LLC 25,083,048 5 0.78% Red Cedar Housing 20,756,700 6 0.64% Lansing MI MultiFamily Dst 13,964,100 7 0.43% Lansing Retail Center 13,017,794 8 0.40% 10,661,000 6 0.46% Emergent BioSolutions 12,289,461 9 0.38% Hunter Towne Properties 10,623,577 10 0.33% Demmer Corporation 14,898,600 4 0.65% Comcast of Michigan LLC 11,644,000 5 0.51% Sprint Spectrum L.P. 9,496,000 7 0.41% Heart of the City Assoc 7,271,400 8 0.32% Emergent BioSolutions 6,881,400 9 0.30% Quality Dairy Co.#17 6,759,700 10 0.29% $ 279,279,842 8.66% $ 204,134,900 8.88% Source: Lansing City Assessor 179 CITY OF LANSING Table 8 PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (UNAUDITED) Collection Percent (B) (A) of Current of Levy Collection Percent Total Year's Taxes Collected Subsequent of Total Tax Fiscal Adjusted During During to the Year of Total Collections Year Year Tax Levy Year Levied Year Levied Tax Levy Collections to Tax Levy 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 38,307,862 99.94% 2015 2016 38,538,226 38,461,152 99.80% 52,758 38,513,910 99.94% 2016 2017 38,431,072 38,370,929 99.84% 50,344 38,421,273 99.97% 2017 2018 39,234,692 39,232,925 100.00% 67,348 39,300,273 100.17% 2018 2019 40,231,255 40,203,313 99.93% 42,639 40,245,952 100.04% 2019 2020 42,128,760 42,123,931 99.99% 17,175 42,141,106 100.03% 2020 2021 43,098,838 43,051,670 99.89% 132,556 43,184,226 100.20% 2021 2022 47,200,360 47,196,707 99.99% 85,532 47,282,239 100.17% Note:Amounts are net of chargebacks from the County Tax Revolving Funds for taxes still delinquent after three years. Note: Delinquent Tax Collection represents amounts received in the indicated fiscal year. Source: City of Lansing Treasurer 180 CITY OF LANSING Table 9 RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS (UNAUDITED) Governmental Activities Business-Type Activities General Installment Net Unamortized General Installment Net Unamortized Percentage Obligation Purchase Premiums/ Obligation Revenue Purchase Premiums/ Total Primary of Personal Per Year Bonds Contracts Discounts Loans Bonds Bonds Agreements/Loans Discounts Government Income Capita Population(1) 2013 $ 25,816,914 $ 8,193,615 $ 62,604 $ 512,577 $ 189,536,530 $ 30,135,311 $ 1,637,177 $ 2,548,679 $ 258,443,407 13.10% 2 $ 2,277 114,738 2014 27,180,294 3,100,563 35,294 7,062,234 174,471,861 24,055,438 1,668,081 1,729,013 239,302,778 11.08% 2 2,097 114,113 2015 27,790,281 16,387,327 35,281 7,872,600 167,787,460 19,445,482 1,459,431 1,604,958 242,382,820 10.27% 2 2,133 113,659 2016 21,968,330 15,268,317 68,330 7,872,600 154,303,563 20,671,135 1,246,673 1,715,511 223,114,459 9.42% 2 1,955 114,110 2017 18,080,040 13,757,531 15,040 7,728,428 143,761,916 18,982,246 1,029,723 1,552,355 204,907,279 8.04% 2 1,745 117,400 2018 15,325,818 12,289,396 19,222 7,476,545 136,938,668 17,258,138 808,500 1,389,200 191,505,487 7.18% 2 1,637 116,986 2019 14,925,420 11,274,020 761,721 7,242,002 117,713,909 14,075,000 582,920 2,097,766 168,672,758 6.41% 2 1,437 117,388 2020 11,792,231 10,230,073 748,067 7,000,422 112,290,745 12,525,000 352,897 1,890,331 156,829,766 5.96% 2 1,327 118,210 2021 27,958,180 9,156,735 663,565 7,660,461 115,160,822 10,975,000 118,343 2,142,487 173,835,593 6.85% 2 1,543 112,664 2022 29,629,300 22,457,000 586,222 6,886,326 103,495,891 9,425,000 - 1,998,159 174,477,898 6.52% 2 1,548 112,684 (1)population per decennial census by the U.S.Census Bureau (2)personal income data comes from U.S.Census Bureau,American Community Survey 2009 181 CITY OF LANSING Table 10 RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS (UNAUDITED) Ratio of Fiscal Debt Debt Net Bonded Net Year Taxable Service Payable From Debt to Bonded Ended Assessed Gross Bonded Monies Restricted Net Bonded Taxable Debt per June 30, Population(1) Value(3) Debt(2) Available Revenues Debt Value Capita 2013 113,488 $ 2,297,591,331 $ 217,964,727 $ - $ 192,085,209 $ 20,441,914 0.0089 $ 178 2014 114,113 2,001,588,500 203,416,462 - 176,200,874 23,620,294 0.0118 207 2015 113,659 2,086,836,822 197,217,980 1,000 169,392,418 25,204,281 0.0121 222 2016 114,110 2,165,392,100 178,055,734 1,000 156,019,074 20,397,330 0.0094 179 2017 117,400 2,267,592,100 163,409,357 1,000 145,314,271 17,569,040 0.0077 150 2018 116,986 2,349,995,600 153,772,908 1,000 138,327,868 15,324,818 0.0065 131 2019 117,388 2,566,962,100 135,498,816 30,111 119,811,675 14,895,309 0.0058 127 2020 118,210 2,837,435,376 126,721,374 29,361 114,181,076 11,762,870 0.0041 100 2021 112,664 3,057,816,101 145,925,054 29,361 117,303,309 28,592,384 0.0094 254 2022 112,684 3,224,876,243 135,709,572 29,361 105,494,050 30,186,161 0.0094 268 (1) Source: 2000 and 2010 Census by the U.S.Census Bureau(www.census.gov/quickfacts/lansingcitymichigan) (2) includes all general obligation debt and special assessment debt with governmental obligation (3) the tax assessment day is December 31 prior to beginning of fiscal year 182 CITY OF LANSING Table 11 DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF JUNE 30,2022 (UNAUDITED) Overlapping Estimated Estimated Share of Debt Percentage Overlapping Outstanding Applicable Debt Net direct-City $ 30,215,522 100.00% $ 30,215,522 Share of County-issued bonds Drain Commission 24,445,465 100.00% 24,445,465 Other Overlapping Debt Eaton Intermediate School District 2,910,000 1.19% 34,629 Ingham Intermediate School District 14,358,000 24.83% 3,565,091 Waverly School District 58,910,000 0.30% 176,730 Lansing School District 142,310,000 82.23% 117,021,513 East Lansing School District 94,568,377 2.83% 2,676,285 Holt School District 53,908,286 2.34% 1,261,454 Ingham County 75,681,363 5.64% 4,270,909 Eaton County 20,619,119 2.40% 494,859 Clinton County 26,093,098 0.28% 73,061 Lansing Community College 89,380,000 20.47% 18,296,086 Okemos School District 23,096,460 4.92% 1,136,346 Mason School District 48,110,000 1.28% 615,808 Grand Ledge School District 105,610,000 2.88% 3,041,568 Total Overlapping $ 177,109,804 Total Direct and Overlapping $ 207,325,326 Sources: Municipal Advisory Council Note: Overlapping debt percentages are apportioned based upon relative assessed values. 183 CITY OF LANSING Table 12 LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS (UNAUDITED) Legal Debt Margin Calculation for Fiscal Year 2022 Assessed value,real and personal property $ 3,224,876,243 Legal debt margin Debt limitation-10 percent of total valuation 322,487,624 Debt applicable to limit Total City Bonded Debt 135,709,572 City Share: Drain Commission-County Issued 24,445,465 TIF Supported Bonds 26,955,000 187,110,037 Less: Brownfield Redevelopment Authority Bonds $ (39,720,000) Sewage Disposal Revenue Bonds (9,425,000) Pollution Abatement(CSO Project)Bonds (64,715,151) Share of County-issued bonds (24,445,465) (138,305,616) Total net debt applicable to limit 48,804,421 Legal debt margin $ 273,683,203 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 Debt limit $ 322,487,624 $ 283,743,538 $ 256,696,210 $ 207,850,642 $ 233,606,400 $ 223,687,492 $ 216,539,210 $ 208,683,682 $ 205,138,999 $ 208,869,228 Total net debt applicable to limit 48,804,421 81,956,344 81,532,491 72,669,623 87,295,949 81,398,300 86,432,459 91,352,614 93,062,835 91,833,157 Legal debt margin $ 273,683,203 $ 201,787,194 $ 175,163,719 $ 135,181,019 $ 146,310,451 $ 142,289,192 $ 130,106,751 $ 117,331,068 $ 112,076,164 $ 117,036,071 Total net debt applicable to the limit as a percentage of debt limit 15.13% 28.88% 31.76% 34.96% 37.37% 36.39% 39.92% 43.78% 45.37% 43.97% 184 CITY OF LANSING Table 13 PLEDGED-REVENUE COVERAGE LAST TEN FISCAL YEARS (UNAUDITED) Sewage Disposal Bonds Direct Net Revenue Gross Operating Available for Debt Service Requirements Revenue Expenses(l) Debt Service Principal Interest Total Coverage (2) 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 2020 34,968,585 19,568,461 15,400,124 1,550,000 613,188 2,163,188 7.12 2021 38,635,421 28,902,815 9,732,606 1,550,000 535,688 2,085,688 4.67 2022 36,142,653 10,866,625 25,276,028 1,550,000 458,188 2,008,188 12.59 (1) Operating expenses less depreciation (2) Coverage is defined as net revenue available for debt service divided by debt service requirements 185 CITY OF LANSING Table 14 DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS (UNAUDITED) Lansing Personal Per Capita Median School District Unemployment Labor Year Population (1) Income Income (1) Age 1 Enrollment(2) Rate (3) Force 3 2013 113,488 $ 1,973,149,386 $ 17,197 32.40 12,754 11.3% 58,087 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 2020 118,210 2,536,936,212 22,196 31.90 10,661 16.0% 63,541 2021 112,664 2,616,734,064 23,226 35.50 10,031 5.5% 59,058 2022 112,684 2,674,442,056 23,734 34.50 10,173 4.7% 57,447 (1) Source: U.S. Census Bureau (2) Source: Lansing School District (3) Source: Michigan Bureau of Labor Market Information and Strategic Initiatives 186 CITY OF LANSING Table 15 PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS PRIOR (UNAUDITED) 2022 2013 Percentage of Percentage of Company Employees (1) Rank Employment(2) Employees (1) Rank Employment(2) STATE OF MICHIGAN 13,880 1 5.68% 13,700 1 6.23% MICHIGAN STATE UNIVERSITY 10,253 2 4.20% 10,725 2 4.88% SPARROW HEALTH SYSTEM 9,000 3 3.68% 5,735 3 2.61% GENERAL MOTORS 4,274 4 1.75% 5,522 4 2.51% MCLAREN HEALTH(3) 3,000 5 1.23% 2,400 7 1.09% AUTO OWNERS INSURANCE GROUP 2,720 6 1.11% JACKSON NATIONAL LIFE INS CO 2,439 7 1.00% PECKHAM 2,200 8 0.90% DART CONTAINER CORP 2,000 9 0.82% LANSING COMMUNITY COLLEGE 1,957 10 0.80% 2,990 6 1.36% LIBERTY NATIONAL LIFE INSURANCE 5,000 5 2.28% MEIJER 1,880 8 0.86% LANSING SCHOOL DISTRICT 1,613 9 0.73% SOUTHERN-OWNERS INSURANCE 1,500 10 0.68% Greater Lansing metropolitan area employment 244,326 219,761 (1) Data is representative of the Greater Lansing Region (2) Source:www.purelansing.com/Workforce&Data>Top Employers for 2021 data (3) Formerly Ingham Regional Medical Center 187 CITY OF LANSING Table 16 FULL-TIME EQUIVALENT CITY GOVERNMENTAL EMPLOYEES BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS (UNAUDITED) Full-time Equivalent Employees 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Function/Program General government City council 10 10 10 10 10 10 10 10 10 10 Mayor's office 5 5 5 6 6 7 (G) 7 11 12 12 City clerk 5 5 5 5 5 5 6 6 6 6 54-A district court 43 43 46 45 45 45 45 45 45 45 City attorney's office 10 10 11 11 11 11 12 it 12 13 City TV 2 2 2 2 2 2 2 3 2 2 Internal auditor 1 1 1 1 1 1 1 1 1 1 Human resources 9 10 10 12 12 11 11 11 11 11 Information technology 10 11 11 11 11 16 16 15 15 14 Finance Accounting/budget/purchasing 10 10 9 8 (E) 8 8 8 7 8 14 Treasury/income tax 20 9 9 10 11 11 13 16 14 12 Assessing 11 11 11 11 11 11 11 11 11 Property management - (B) - - - - - - - - - Fleet management - (B) 125 127 130 132 133 138 142 147 147 151 Planning&neighborhood development Administration 2 2 2 2 2 2 2 3 3 3 Code compliance 15 - (D) - - - 14 (F) 15 19 19 19 Building safety 12 13 13 13 13 13 13 15 14 14 Planning 4 4 4 4 4 3 (G) 4 4 3 3 Development 9 11 10 10 9 9 9 7 8 8 Parking&transportation (C) 20 15 14 14 14 14 14 19 19 19 62 45 43 43 42 55 57 67 66 66 Neighborhood&Citizen Engagement 1 (G) 5 5 5 5 Police 229 (C) 234 (D) 239 239 240 241 243 239 240 251 Fire 180 188 181 181 181 181 182 186 183 184 Code Compliance 14 (D) 14 14 14 - (F) 180 202 195 195 195 181 182 186 183 184 Public services Administration&engineering 19 19 19 20 20 20 21 22 23 23 Operations&maintenance (C) 120 117 (D) 117 117 117 118 118 113 116 116 Service garage - - - - - - - 1 1 1 Wastewater 41 41 41 41 41 42 42 42 42 42 Property Management 18 (B) 18 18 18 16 16 16 19 18 18 Fleet Management 27 (B) 27 27 26 30 30 30 29 29 29 225 222 222 222 224 226 227 226 229 229 Human relations&community services 5 6 7 7 8 9 10 11 10 10 Parks&recreation Administration&design 5 6 6 6 6 6 6 6 6 6 Leisure&special recreation 8 6 6 6 6 6 6 10 6 6 Cemeteries 1 1 1 1 1 1 1 1 1 1 Golf/ice arena 3 3 3 3 3 3 17 16 16 16 16 16 13 17 13 13 Total 843 852 852 854 858 867 879 898 893 909 Source:The City of Lansing The following restructuring of departments have occurred: (B)Fleet and Property Management were moved from the Finance Department to the Public Service Department. (C)On June 27,2012,911 Dispatch employees were transferred from the City to Ingham County. (D)Code Compliance(14 positions)were transferred from ED&P to Fire;four(4)positions to Police,and one(1)position to Public Service for FY 2014. (E)Purchasing operations were transferred to the Lansing Board of Water and Light for FY 2016. (F)Code Compliance was transferred from Fire to ED&P. (G)One(1)position was transferred from Human Resources to Mayor's Office and one(1)position was transferred from ED&P to N&CE in FY 2018. 188 CITY OF LANSING Table 17 OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS (UNAUDITED) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Public safety Fire department responses 18,444 19,427 20,170 21,115 21,902 22,768 22,389 21,904 21,650 25,994 EMS related 15,918 16,235 17,376 18,275 18,827 19,264 19,655 18,975 18,381 21,511 Fire related 2,526 3,012 2,794 2,840 3,075 3,063 2,734 2,929 3,269 4,483 Police department responses 73,087 76,855 79,331 71,468 82,722 107,379 84,869 80,449 77,399 78,500 Arrests 7,196 5,656 4,510 3,880 5,710 4,507 4,418 3,524 2,446 2,601 Traffic violations 14,905 7,756 10,781 7,334 9,385 6,496 6,963 5,054 4,287 6,801 Public works Potholes filled 33,155 55,193 53,281 53,488 53,332 54,773 2,589 1,042 698 4,997 Streets resurfaced(miles) 6.0 4.6 4.0 8.8 8.7 6.0 4.6 11.0 13.6 1.9 Recreation Recreation participation 55,122 50,859 122,639 101,335 98,978 120,245 93,264 29,313 58,284 109,582 Pavilion rentals 199 185 206 242 180 202 222 78 140 142 Sewage disposal Average amount processed daily(gal) 14.75 million 14.49 million 13.28 million 15.46 million 16.32 million 14.45 million 16.60 million 14.18 million 10.61 million 12.1 million Parking system Average number of monthly permits 2,718 2,891 3,077 3,218 2,581 3,310 2,500 869 1,203 1,200 Parking tickets issued 38,127 34,373 30,888 32,990 33,492 32,587 37,105 16,481 19,876 30,306 Cemetery Lots sold 113 93 138 115 162 88 103 121 119 85 Golf Annual rounds played 25,554 22,786 22,998 13,325 14508 20,492 - - - - Garbage and rubbish Yards sent to landfill 17,985 18,829 19,667 20,115 20,007 20,492 20,957 22,825 27,865 26,885 Recycling Recycled goods sold(tons) 3,562 5,075 5,691 5,940 5,834 5,593 5,407 5,322 6,258 6,310 Yards composted 21,832 25,260 21,685 24,413 24,223 20,031 21,198 14,262 19,888 13,864 Source: The City of Lansing,Michigan 189 CITY OF LANSING Table 18 CAPITAL ASSETS STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS (UNAUDITED) Function/Program 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Public safety Police stations 2 2 2 2 2 2 2 2 2 2 Police patrol units 60 61 60 60 60 60 58 58 60 57 Fire stations 6 6 6 6 6 6 8 8 8 8 Emergency Vehicles 0 0 0 0 0 0 55 27 31 44 Public works Streets(miles) 411.00 411.00 414.00 414.00 414.00 414.00 413.00 413.23 413.23 412.00 Traffic signals 200 200 200 200 200 200 184 206 206 206 Recreation Park acreage 2,364.85 2,364.85 2,363.45 2,134.26 2,134.26 2,017.56 2,174 1,659 1,659 1,641 Playgrounds 75 72 72 74 74 74 76 77 76 76 Baseball/softball fields 61 61 47 25 25 25 22 22 22 22 Soccer/football fields 6 6 6 14 15 15 15 16 16 16 Community centers 4 4 4 4 4 4 4 4 4 4 Sewage disposal Sanitary sewers(miles) 359 359 361 361 361 363 364 365 365 367 Storm sewers(miles) 234 234 235 235 235 237 238 239 239 241 Combined sewers(miles) 188 188 188 188 188 187 185 185 184 183 Parking system Ramps 4 4 4 4 4 4 3 3 3 3 Lots 18 17 17 16 16 16 16 16 17 14 Meters 2,452 2,452 2,166 2,166 2,166 2,166 2166 500 200 200 On-street Pay Stations 134 128 128 Cemetery Number of cemeteries 3 3 3 3 3 3 3 3 3 3 Golf Number of courses 1 1 1 1 1 1 1 1 1 1 Acreage 115 115 115 115 115 115 115 115 115 115 Garbage and rubbish Refuse collection trucks 17 17 17 14 14 16 8 7 7 7 Recycling Recycling trucks 7 7 7 5 5 7 8 8 8 8 Compost trucks 0 0 0 0 0 0 8 7 7 7 Sources:The City of Lansing,Michigan 190