The URL can be used to link to this page

Home My WebLink About2007 City of Lansing Comprehensive Annual Financial Report CAFRCITY OF LANSING 2007 Comprehensive Annual Financial Report FOR FISCAL YEAR ENDED JUNE 30, 2007 VIRG BERNERO, Mayor Gerald Ambrose, Acting Director of Finance Prepared by: Department of Finance LANSING CITY GOVERNMENT 2007 MAYOR VIRG BERNERO CLERK CHRIS SWOPE DISTRICT COURT JUDGES PATRICK F. CHERRY CHARLES F. FILICE AMY KRAUSE FRANK J. DELUCA LOUISE ALDERSON AT LARGE CITY COUNCIL BY WARDS DERRICK QUINNEY HAROLD LEEMAN – 1st Ward KATHIE DUNBAR SANDRA ALLEN – 2nd Ward BRIAN JEFFRIES WILLIAM MATT – 3rd Ward CAROL WOOD TIM KALTENBACH – 4th Ward OFFICERS Acting City Assessor.................................................................................................... Diane Lee City Attorney .........................................................................................................Brigham Smith City Treasurer ........................................................................................................Antonia Kraus Executive Assistant to the Mayor........................................................................Gerald Ambrose Finance, Acting Director of .................................................................................Gerald Ambrose Fire Chief ............................................................................................................William Cochran Human Relations & Community Services, Director of ............................. Joan Jackson Johnson Internal Auditor..........................................................................................................Arnie Yerxa Parks & Recreation, Director of.....................................................................Murdock Jemerson Human Resources, Director of ............................................................................. Terri Singleton Planning & Neighborhood Development, Director of..........................................Robert Johnson Police Chief .................................................................................................................Mark Alley Public Service, Director of ......................................................................................Chad Gamble INTRODUCTORY SECTION -i- City of Lansing, Michigan Table of Contents Page INTRODUCTORY SECTION Table of Contents ..............................................................................................................................................i-ii Letter of Transmittal.......................................................................................................................................iii-ix Certificate of Achievement...................................................................................................................................x City Organizational Structure..............................................................................................................................xi FINANCIAL SECTION Independent Auditors’ Report.......................................................................................................................... 1-2 Management’s Discussion and Analysis........................................................................................................ 3-12 Basic Financial Statements Government-wide Financial Statements Statement of Net Assets..........................................................................................................................13 Statement of Activities..................................................................................................................... 14-15 Governmental Fund Financial Statements Balance Sheet .........................................................................................................................................16 Reconciliation of Fund Balances on the Balance Sheet for Governmental Funds to Net Assets of Governmental Activities on the Statement of Net Assets.............................................17 Statement of Revenues, Expenditures and Changes in Fund Balances..................................................18 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities........................................................19 Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual General Fund................................................................................................................................. 20-21 Proprietary Fund Financial Statements Statement of Net Assets......................................................................................................................22 Statement of Revenues, Expenses and Changes in Fund Net Assets .................................................23 Statement of Cash Flows....................................................................................................................24 Fiduciary Fund Financial Statements Statement of Fiduciary Net Assets .....................................................................................................25 Statement of Changes in Fiduciary Net Assets...................................................................................26 Component Unit Financial Statements Combining Statement of Net Assets...................................................................................................27 Combining Statement of Activities ....................................................................................................28 Index for Notes to Financial Statements .....................................................................................................29 Notes to Financial Statements............................................................................................................... 30-63 Required Supplementary Information Schedule of Funding Progress and Employer Contributions: Employees’ Retirement System..............................................................................................................64 Police and Fire Retirement System ........................................................................................................65 -ii- City of Lansing, Michigan Table of Contents (Continued) Page Combining and Individual Fund Statements and Schedules Nonmajor Governmental Funds Combining Balance Sheet ......................................................................................................................66 Combining Statement of Revenues, Expenditures and Changes in Fund Balances...............................67 Nonmajor Special Revenue Funds Combining Balance Sheet ................................................................................................................ 68-69 Combining Statement of Revenues, Expenditures and Changes in Fund Balances......................... 70-71 Schedules of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual....................................................................................................... 72-79 Nonmajor Debt Service Funds Combining Balance Sheet ................................................................................................................ 80-81 Combining Statement of Revenues, Expenditures and Changes in Fund Balances......................... 82-83 Nonmajor Capital Projects Funds Combining Balance Sheet ................................................................................................................ 84-85 Combining Statement of Revenues, Expenditures and Changes in Fund Balances........................ 86-87 Nonmajor Permanent Funds Combining Balance Sheet ......................................................................................................................88 Combining Statement of Revenues, Expenditures and Changes in Fund Balances...............................89 Nonmajor Enterprise Funds Combining Statement of Net Assets................................................................................................. 90-91 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets ........................... 92-93 Combining Statement of Cash Flows............................................................................................... 94-97 Internal Service Funds Combining Statement of Net Assets...................................................................................................... 98 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets ..................................99 Combining Statement of Cash Flows...................................................................................................100 Agency Funds Combining Statement of Fiduciary Assets and Liabilities ..................................................................101 Combining Statement of Changes in Fiduciary Assets and Liabilities ................................................102 STATISTICAL SECTION....................................................................................................................103 -iii- December 14, 2007 Council President Harold Leeman and Council Members 10th Floor City Hall Lansing, Michigan 48933-1694 Dear President Leeman and Council Members: We are pleased to submit the comprehensive annual financial report of the City of Lansing, Michigan for the fiscal year ended June 30, 2007. Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data are accurate in all material respects and are reported in a manner designed to present fairly the financial position and results of operations government wide and of the various funds of the City. This management assurance is supported by a comprehensive system of internal controls designed to reasonably ensure that assets of the City are protected from loss, theft or misuse and to ensure that adequate accounting data are compiled to allow for the preparation of these financial statements in conformity with generally accepted accounting principles. Such controls include appropriate policies and procedures, ongoing risk assessment, and monitoring and review processes which are communicated throughout City operations. Disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. This letter of transmittal is designed to complement the Management’s Discussion and Analysis and should be read in conjunction with it. The Management’s Discussion and Analysis can be found immediately following the Independent Auditors’ Report The financial reporting entity (the City) includes all of the funds and of the primary government (i.e., the City as legally defined), as well as its blended component units. Blended component units, although legally separate entities, are, in substance, part of the primary government’s operations and are included as part of the primary government. The Lansing Building Authority is a blended component unit. Discretely presented component units are reported in a separate column in the combined financial statements to emphasize that they are legally separate from the primary government and to differentiate their financial position, results of operations and cash flows from those of the primary government. The Lansing Entertainment & Public Facilities Authority, Tax Increment Finance Authority, and the Brownfield Redevelopment Authority are reported as discretely presented component units. -iv- The City of Lansing provides a full range of services, including police and fire protection; sanitation services; the construction and maintenance of highways, streets, sewers, and infrastructure; recreational activities and support for human services and cultural events. Serving as Michigan's capital since 1848, Lansing was incorporated in 1859 and operates under provisions of Public Act 279 of 1909, as amended (the "Home Rule City Act"). The City is located in the lower middle of Michigan's Lower Peninsula and operates under a strong Mayor form of government established by 1978 Charter revision. It is a mature core City with a population of 119,286 according to revised 2000 Census figures. ECONOMIC CONDITION AND OUTLOOK: City of Lansing Economic Overview. Though the state of Michigan continues to suffer through a one-state economic restructuring, averaging through the year a remarkable 7.2% unemployment rate, the highest in the nation, the city of Lansing has done very well. In fact, according to the U.S. Department of Labor, the Metropolitan Statistical Area (MSA Lansing/East Lansing) was the only MSA in the state of Michigan to experience a net job growth increase for the calendar year 2006. Not Grand Rapids, Ann Arbor, Birmingham or Royal Oak, but the city proper of Lansing. The city experienced an average unemployment rate of approximately 5.4% through FY 2007, with the nation in the mid to lower four percentile and, again, the state at the 7.2% rate or higher. In comparing calendar years 2005 to 2006, the city experienced a 324% increase in private investment and a 289% increase in job growth. This growth can be attributed to a number of factors: First, GM brought on line the new Lansing Delta auto assembly plant, located in the city, employing over 3500 people. A third shift was added in the spring of 2007 due to the leading sales of the Acadia, Outlook and Enclave SUVs. In addition, three new major auto suppliers, all located in the city, ramped up creating several thousand jobs. This is in addition to the five year old Lansing Cadillac car assembly plant, also located in the city, which continues to produce one of the best selling cars in the GM product line, the Cadillac CTS. All of these plants received significant incentive packages from the city of Lansing. Secondly, the Demmer Corporation morphed from an auto-related manufacturing operation to military-related production, landing a number of very large Pentagon contracts related to the depletion of equipment in the Iraq War. As the city of Lansing announced an incentive package to consolidate this new work in a Lansing facility, Demmer originally projected creation of 380 new manufacturing jobs. However, by June of 2007, Demmer had already hired more than 700 new employees and was well on its way to creating a total of over 1000 new manufacturing jobs. In addition, the city has been very aggressive with as many smaller manufacturing firms as possible, giving economic incentives and creating handfuls of new jobs at a time, resulting in a total of -v- hundreds of jobs. This all occurred, when there was no significant closures in our manufacturing sector, unlike almost all other regions of the state. Thirdly, a growing list of bio-tech firms and IT firms grew in the city. All due to a series of city incentives and city recruitment and retention efforts, Neogen, Niowave, Aquabiochip, IDV Solutions, Emergent Biosolutions, Spartan Internet and others experienced job growth. Fourthly, downtown Lansing and Old Town continue to blossom in economic growth terms in ways not seen in over 40 years. Many to nearly all once-empty buildings have been recently purchased and rehabilitated by a generation of young entrepreneurs who are fierce about placing, not only retail, but the right kind of retail, in the first floors while always utilizing higher floors with new loft, apartment and condo development. On Washington Square, the main street of downtown Lansing and in Old Town, retail vacancy rates are under a very healthy 10% while residential populations, in and around downtown, are exploding with hundreds of new units that sell out before construction is completed, creating a whole new attractive and a disposable income-related residential activity. Nearly all of these projects are heavily supported by the city’s economic development incentives. Finally, Mayor Bernero and the Lansing Economic Development Corporation (LEDC) have put in place new programs such as: 1) A greatly upgraded economic development office staff for the city. 2) The successful adoption of a joint Lansing/East Lansing TIF district in the newly created Lansing Regional SmartZone. 3) The adoption of a Tool and Die Recovery Zone. 4) The award of a federal grant to put in place a historic district downtown. 5) The formal announcement of the state’s first multi-jurisdictional Corridor Improvement District on the critical Michigan Avenue corridor, which directly connects downtown East Lansing and Michigan State University with the capitol building in downtown Lansing. 6) The Linking Lansing and “U” program, which is a multi-faceted approach to connecting the city with the creative class, in particular, graduates and students of Michigan State University, Cooley Law School and Lansing Community College through job shadowing, internships, mentoring, regular trolley service and new events such as “Blues on the Square”. 7) Beautification efforts in the downtown. 8) Mayor Bernero’s “Go Green” environmental initiative. These are all examples of Mayor Bernero’s and the LEDC’s attempts to institutionalize a successful and long term strategic economic development plan for the city. -vi- CHALLENGES: But all is not rosy and there was and will be challenges facing the city: 1) The city endures a 24% poverty rate. 2) Updated census figures show another residential decline in city population, dipping below the 115,000 level from near 120,000. 3) The Lansing School District saw further student enrollment declines. 4) The Tax Increment Finance Authority (TIFA) downtown was unable to make full debt service payments (the TIFA pays most of the city parking debt, Lansing Center debt and the Ingham County/City of Lansing consolidated building debt service). The TIFA fell $350,000 short which was covered by the full faith and credit of the city of Lansing. Revenue fell short in the TIFA due to unexpected and hefty tax reassessment victories by the private sector led by the significant hit of the Radisson hotel’s reassessment. Future projections for the TIFA are strong and FY 2008 projections show the TIFA in the black and paying the city back the $350,000. However, if the state were to pull another state building off the tax rolls and expected projects (State Trooper headquarters and another state department) do not come on line, the TIFA may again be in danger. 5) The south side of Lansing, where 60% of the city’s population lives and where most retail activity takes place, is experiencing a 20% plus retail vacancy rate. 6) As across the country, housing sales and values have decreased and Lansing is experiencing a high foreclosure rate (the state has the fifth highest foreclosure rate in the country). 7) While the downtown is strong in redevelopment activity, retail development is focused on restaurant development, not on true store growth. Also, while Class A office space vacancy is very low, Class B and C vacancy rates remain very high, sometimes above 40% averages. 8) The downtown is also too dependent on state government, a classic no-growth industry. While the state remains an obvious anchor to the downtown, efforts must be redoubled to retain and grow a dwindling private sector. This must include a strategic effort to retain and recruit state associations, corporate headquarters and IT firms to downtown. It is entirely unproductive for the region to grow (read: flatten out and disappear) with these types of firms spreading from the downtown to outlying areas. Utterly, the region will only succeed in the 21st century if there is a strong re-concentration of private development in downtown Lansing (and in East Lansing’s downtown for that matter), by a growing, skyline- changing, interesting cluster of buildings that makes the region visible, symbolically and in real terms, as a genuine cosmopolitan area, attractive to younger people and high growth industry. This is the only way to truly grow the entire region, especially the suburban areas. -vii- 9) The arts and cultural industry again has been struck hard by reduced state grant funding and private sector support. This critical piece to an economic development puzzle, especially when thoughts are of a continued strengthening of downtown Lansing as a source of growing young people and young businesses, needs to be reinforced with an infusion of public investment (the city needs to support the current arts community as well as to build a Performing Arts Center). For instance, the Boarshead Theater, Lansing Symphony and Lansing Art Gallery, both located in downtown, remain in precarious financial positions and the future of the Old Town Creole Gallery/Theater needs to be monitored and nurtured carefully. 10) The downtown and, in particular, attempts to retain and attract corporate headquarters and newer and bigger convention business to the Lansing Center, continues to be badly damaged by a Radisson/City of Lansing non-compete agreement that seemingly does not allow for any downtown development that includes incentives to support new downtown hotels. 11) The Majority restaurant closed in downtown and the LEDC agreed to a temporary suspension of $344,000 LEDC loan repayments until the fall of 2007. The Boys Training School (Eastside Village) has not paid their taxes, in 2007. While this particular residential development struggles, it puts in danger Lansing Brownfield Redevelopment Authority large bond payments that are due in calendar year 2008. The bonds are covered by the city’s full faith and credit and are also covered, at least in part, by letters of personal credit of the developers. BRIGHT OUTLOOK: Mayor Bernero and the LEDC have crafted many, aggressive strategic plans that focus on immediate project developments as well as long term solutions. Statistical evidence supports the success of this program already. Lansing is experiencing a market-driven re- birth, it is one of if not the strongest market in Michigan. Simply put, these announcements will fully reconfigure downtown Lansing, its riverfront and its skyline and radically shift its real estate, residential, retail and convention markets. These projects will reinforce the city’s efforts to diversify and strengthen the private sector in downtown and tech sector in the SmartZone, save Boarshead Theater from financial demise, lead the state in how to retain and recruit the creative class and university graduates from Michigan State University and help corridor neighborhood/commercial areas including South Lansing. If the city can avoid a perfect disaster of a UAW/GM strike and a prolonged state of Michigan government shutdown, expect Lansing to continue to experience typical urban problems, but shine as “Michigan’s Miracle” in economic development. -viii- OTHER INFORMATION: Budgeting Controls. The objective of the City's budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by City Council. The City also maintains an encumbrance accounting system, whereby purchase orders amounts are deducted from the available budget, as one technique of accomplishing budgetary control. Encumbered amounts lapse at year end and require Council approval to be carried forward to the ensuing fiscal year for amounts greater than $5,000 or greater than eight months old. The budget is adopted at the activity level within each department. Risk Management. The City carries all-risk coverage on all real and business personal property. The total coverage is $485 million with a $25,000 self insured retention. Workers Compensation is self insured with excess reinsurance coverage for claims exceeding $500,000 from the State Accident Fund. The City carries liability coverage in the amount of $16 million per occurrence. Independent Audit. State statutes require an annual audit by independent certified public accountants. The accounting firm of Rehmann Robson, was selected by the City's Audit Committee. In addition to meeting requirements set forth in State statutes, the audit also was designed to meet the requirements of the Federal Single Audit Act of 1984 and related OMB Circular A-133. The auditors’ report on the general-purpose financial statements and schedules is included in the financial section of this report. Awards. The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2006. This was the 29th consecutive year that the City has received this prestigious award. In order to be awarded a Certificate of Achievement, the City must publish an easily readable and efficiently organized comprehensive annual financial report. This report satisfied both generally accepted accounting principles and applicable legal requirements. The Certificate of Achievement is valid for a period of one year only. We believe that our current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. -ix- Acknowledgments. The preparation of this comprehensive annual financial report, on a timely basis, was made possible by the dedicated service of the entire staff of the Finance Department. Each member of the department has our sincere appreciation for their contributions made in the preparation of this report and in the financial management of the City. The 29th consecutive GFOA award, recognizing their efforts, is well deserved indeed. -x- Pa t r o l S u p p r e s s i o n P l a n ni n g E c o n o m i c D e v . C o r p . R o a d s / S i d e w a l k s P a r k s / F o r e s t r y G r a n t W r i t i n g A s s i s t . Cr i m e I n v e s t i g a t i o n P r e v e n t i o n Z o n i n g L E P F A S e w e r s / T r e a t m e n t R e c r e a t i o n P r o g a m s H u m a n S er v . G r a n t s Co m m u n i t y P o l i c i n g E m e r g e n c y M g m t C o d e C o m p l i a n c e P r i n ci p a l S h o p p i n g D i s t . T r a s h/ R e c y l i n g C o m m u n i t y C e n t e r s P o l i c e I n t e r n a l I n v . De t e n t i o n H o u s i n g / N e i g h b o r h o o d s T I F A Z o o B u i l d i n g S a f e t y C e m e t e r i e s P a r k i n g T r a n s p o r t a t i o n Ta x S e r v i c e s R e c r u i t m e n t A c c o u n t i n g / B u d g e t / P a y r o l l T r a i n i n g P u r c h a s i n g L a b o r R e l a t i o n s P r o p e r t y M a n a g e m e n t B e n e f i t s I n f o r m a t i o n T e c h n o l o g y E q u a l O p p o r t u n i t y Ma y o r Ci t y C o u n c i l Ci t y C l e r k 54 - A D i s t r i c t C o u r t In t e r n a l Au d i t Ci t y A t t o r n e y ’ s Of f i c e Po l i c e Fi r e Pl a n n i n g & Ne i g h b o r h o o d De v e l o p m e n t Ec o n o m i c De v e l o p m e n t Pu b l i c Se r v i c e s Pa r k s & Re c r e a t i o n Ci t i z e n s o f L a n s i n g Fi n a n c e Hu m a n R e s o u r c e s Hu m a n R e l a t i o n s an d C o m m u n i t y Se r v i c e s -xi- FINANCIAL SECTION 675 Robinson Road · P.O. Box 449 · Jackson, MI 49204 · Phone 517.787.6503 · Fax 517.788.8111 · www.rehmann.com -1- INDEPENDENT AUDITORS’ REPORT December 14, 2007 Honorable Mayor and Members of the City Council City of Lansing, Michigan We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund and the aggregate remaining fund information of the City of Lansing, Michigan, as of and for the year ended June 30, 2007, which collectively comprise the City’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City of Lansing’s management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Lansing, Michigan, as of June 30, 2007, and the respective changes in financial position and cash flows, where applicable, thereof and the budgetary comparisons for the General Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. -2- In accordance with Government Auditing Standards, we have also issued our report dated December 14, 2007, on our consideration of the City of Lansing, Michigan’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters, in a separately issued single audit report. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The Management’s Discussion and Analysis on pages 3-12 and the historical pension supplementary information for the Employees’ and Police and Fire Retirement Systems listed in the table of contents are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplementary information. However, we did not audit this information and do not express opinion on it. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the City of Lansing’s basic financial statements. The introductory section, combining and individual fund financial statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. MANAGEMENT’S DISCUSSION and ANALYSIS -3- MANAGEMENT'S DISCUSSION AND ANALYSIS The management of the City of Lansing, Michigan (“the City”) provides this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2007 for the benefit of the readers of these financial statements. This management’s discussion and analysis (“MD&A”) is intended to assist the reader in focusing on significant financial issues and provide an overview of the City’s financial activity. The City encourages the readers to consider the following information here in conjunction with the financial statements taken as a whole, which follow this section. HIGHLIGHTS Government-wide: • The assets of the City exceeded its liabilities at the close of the fiscal year by $455.6 million (reported as net assets), an increase of $2.6 million from the previous year. Component units of the City reported a deficit of net assets of $41.3 million, a decrease of $1.4 million from the previous year. Fund Level: • As of the close of the fiscal year, the City’s governmental funds reported combined ending fund balances of $44.7 million. Of this, $40.3 million is reported as unreserved fund balance, inclusive of $5.7 million in the City’s Budget Stabilization Fund and $7.0 million designated for capital projects for subsequent year expenditure. The remaining fund balance of $4.4 million is reserved for specific purposes, such as long-term advances to other funds and encumbrances. At the end of the fiscal year, unreserved, undesignated fund balance for the General Fund was $4.4 million, an increase of $1.7 million. • The business-type activities reported net assets at year-end of $231.0 million, an increase of $5.5 million during the year. Debt: • The City’s total debt was $265.3 million at June 30, 2007, an increase of $18.4 million (or 1.4%), which represents the net difference between new issuances, and payments and refunding of outstanding debt. During the year, the City issued debt of $46.4 million, including $21.7 million in limited tax general obligation bonds for its Combined Sewer Overflow (CSO) abatement project, and refunded $9.2 million of limited tax general obligation bonds. More detailed information regarding these activities and funds can be found in footnote 3-G, Long Term Debt which begins on page 49. 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 Statements (Reporting the City as a Whole) These statements include all non- fiduciary assets and liabilities, but exclude assets and liabilities related to pensions. The Statement of Net Assets and the Statement of Activities are two financial statements that report information about the City, as a whole, and about its activities, which provide measurements of long term trends that should help answer this question: Is the City, as a whole, better off or worse off as a result of this year’s activities? Unlike the governmental funds, the current year’s revenues and expenses are taken into account regardless of when cash is received or paid, known as “full accrual accounting”. -4- The Statement of Net Assets (page 13) presents all of the City’s assets and liabilities, with the difference between the two reported as “net assets”. Over time, increases and decreases in net assets are an indicator of whether the City’s long term financial position is improving or deteriorating. The Statement of Activities (pages 14 and 15) presents information showing how the City’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying events giving rise to the change occur, regardless of the timing of related cash flows. Therefore, revenues and expenses are reported in these statements for some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused vacation leave). The Statement of Net Assets and the Statement of Activities report three activities, as follows: • Governmental Activities – Most of the City’s basic services are reported under this category. Property taxes, income taxes, and intergovernmental revenues generally fund these services. The Council (legislative branch), the District Court (judicial branch), and general operations of the executive branch departments, such as police, fire, parks, public works, and staff departments fall within the governmental activities. • Business-type Activities – The City charges fees to customers to help cover all or most of the cost 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 three such discretely presented units; the Lansing Entertainment and Public Facilities Authority, the Tax Increment Finance Authority, and the Brownfield Redevelopment. These financial statements include two schedules (pages 17 and 19) that reconcile the amounts reported on the governmental fund financial statements (modified accrual accounting) with governmental activities (full accrual accounting) on the appropriate government-wide statements. The following summarizes the impact of transitioning from modified accrual to full accrual accounting: • Capital assets used in governmental activities are not reported on governmental fund statements. • Certain revenues that are earned, but not available for use within the reporting period, are reported as revenues for governmental activities, but are reported as deferred revenue on the governmental fund statements. • Other long-term assets that are not available to pay for current period expenditures are deferred in governmental fund statements, but not deferred on the government-wide statements. • Internal service funds are reported as governmental activities, but reported as proprietary funds in the fund financial statements. • Bond issuance costs, discounts and premiums in the issuance of long term debt, are reported as expenditures in governmental fund statements, but are capitalized and amortized in the government- wide statements. • Unless due and payable, long-term liabilities, such as capital lease obligations, compensated absences, litigation, and others only appear as liabilities in the government-wide statements. -5- • Capital outlay spending in excess of capitalization thresholds are recorded as capital assets on the government-wide statements, but are reported as expenditures on the governmental fund statements. • Bond and note proceeds result in liabilities on the government-wide statements, but are recorded as other financing sources on the governmental fund statements. • Certain other outflows, such as debt service principal payments, represent decreases in liabilities on the government-wide statements, but are reported as expenditures on the governmental fund statements. The Notes to the Basic Financial Statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes can be found beginning on page 30 of this report. Fund Financial Statements (Reporting the City's Major Funds) The City’s Major Funds are identified as its Sewage Disposal Fund, and it’s Parking System Fund, along with its General Fund. The major fund financial statements begin on page 16. In addition to major funds, individual fund data for the nonmajor funds begins on page 66. A fund is a fiscal and accounting entity with a self-balancing set of accounts that the City uses to keep track of specific sources of funding and spending for a particular purpose. • Governmental funds -- Most of the City's basic services are reported in the governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end that are available for future spending. The governmental fund financial statements provide a detailed short-term view of the City's general government operations and the basic services it provides. Governmental fund information helps determine whether there are greater or fewer financial resources that can be spent in the near future to finance the City's programs. These funds are reported using modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. Governmental funds include the General Fund and special revenue, capital project, debt service, and permanent funds. • Proprietary funds -- When the City charges customers for the services it provides, whether to outside customers or to other agencies within the City, these services are generally reported in proprietary funds. Proprietary funds (enterprise and internal service) utilize full accrual accounting; the same method used by private sector businesses. Enterprise funds report activities that provide supplies and services to the general public. Examples are the Sewage Disposal Fund and the Parking Fund. Internal service funds are reported as governmental activities on the government-wide statements. • Fiduciary Funds -- The City acts as a trustee or fiduciary for its employee pension plans. It is also responsible for other assets that, because of a trust arrangement, can be used only for the trust beneficiaries. The City's fiduciary activities are reported in separate Statements of Fiduciary Net Assets and Changes in Fiduciary Net Assets beginning on page 25. These funds, which include pension and other employee benefit funds, are reported using full accrual accounting. The government-wide statements exclude fiduciary fund activities and balances because these assets are restricted in purpose and do not represent spendable assets of the City to finance its operations. -6- Additional Required Supplementary Information Following the basic financial statements is additional Required Supplementary Information that further explains and supports the information in the financial statements. The Required Supplementary Information includes required pension supplementary information. Other Supplementary Information Other supplementary information includes combining financial statements for nonmajor governmental and proprietary funds, internal service funds, and fiduciary funds. These funds are added together, by fund type, and presented in single columns in the basic financial statements, but are not reported individually, as with major funds, on the governmental fund financial statements. FINANCIAL ANALYSIS OF THE GOVERNMENT AS A WHOLE The City’s combined net assets increased $2.6 million over the course of this fiscal year’s operations to a total of $455.6 million. The net assets of the governmental activities decreased $2.9 million or 1.3% and business-type activities increased $5.5 million or 2.5%. Net Assets as of June 30, (in millions of dollars) Governmental Business-type Total Primary Activities Activities Government 2007 2006 2007 2006 2007 2006 Assets Current and other non-current assets 73.3$ 67.6$ 99.8$ 97.2$ 173.1$ 164.8$ Capital assets 221.4 216.3 359.1 342.5 580.5 558.8 Total assets 294.7$ 283.9$ 458.9$ 439.7$ 753.6$ 723.6$ Liabilities Liabilities Long-term liabilities 52.3$ 41.8$ 218.7$ 209.5$ 271.0$ 251.3$ Other liabilities 17.8 14.6 9.2 4.7 27.0 19.3 Total liabilities 70.1$ 56.4$ 227.9$ 214.2$ 298.0$ 270.6$ Net assets Invested in capital assets, net of related debt 184.1 190.3 166.3 161.3 350.4 351.6 Restricted 37.7 36.7 35.8 36.4 73.5 73.1 Unrestricted 2.8 .5 28.9 27.8 31.7 28.3 Total net assets 224.6$ 227.5$ 231.0$ 225.5$ 455.6$ 453.0$ The largest component (76.9%) of the City’s net assets reflects its investment in capital assets (e.g. land, buildings, equipment, infrastructure, and others), less any related debt outstanding that was needed to acquire or construct the assets. Restricted net assets are the next largest component, comprising 16.1 %, and are subject to external restrictions such as bond covenants, City Charter, State legislation or Constitutional provision. The remaining portion, unrestricted net assets, are resources that may be used at the City’s discretion, but often have limitations based on policy action. -7- The following condensed financial information was derived from the government-wide Statement of Activities and reflects how the City’s net assets changed during the fiscal year: Change in Net Assets for the Fiscal Year Ended June 30, (in millions of dollars) Governmental Business-type Total Primary Activities Activities Government 2007 2006 2007 2006 2007 2006 Revenues Program revenues Charges for services 24.4$ 24.9$ 43.6$ 42.9$ 68.0$ 67.8$ Operating grants 16.5 16.1 - - 16.5 16.1 Capital grants 2.2 3.6 .2 1.4 2.4 5.0 General revenues Taxes 66.6 64.5 - - 66.6 64.5 State shared revenue 16.4 16.9 - - 16.4 16.9 Unrestricted Grants and Contributions 10.9 9.9 - - 10.9 9.9 Unrestricted Investment - - Earnings 2.5 1.7 2.8 1.5 5.3 3.2 Other - .8 - - - .8 Total revenues 139.5 138.4 46.6 45.8 186.1 184.2 Expens es General government, administrative 22.1 34.4 - - 22.1 34.4 Public Safety 62.6 60.0 - - 62.6 60.0 Public Works 40.5 31.8 - - 40.5 31.8 Recreation and Culture 6.2 7.9 - - 6.2 7.9 Community Development 6.2 7.1 - - 6.2 7.1 Interest on Long Term Debt 1.7 1.2 - - 1.7 1.2 Sewage Disposal System - - 24.7 21.7 24.7 21.7 Municipal Parking System - - 10.2 18.4 10.2 18.4 Cemetery - - .7 .8 .7 .8 Golf - - 1.4 1.4 1.4 1.4 Garbage and Refuse Collection - - 1.4 1.4 1.4 1.4 Recycling - - 2.8 3.0 2.8 3.0 Potter Park Zoo - - 3.0 2.7 3.0 2.7 Total expenses 139.3 142.4 44.2 49.4 183.5 191.8 Excess before transfers .2 (4.0) 2.4 (3.6) 2.6 (7.6) Transfers in (out) (3.1) (3.1) 3.1 3.1 - - Changes in net assets (2.9) (7.1) 5.5 (.5) 2.6 (7.6) Beginning net assets as restated 227.5 234.6 225.5 226.0 453.0 460.6 Ending net assets 224.6$ 227.5$ 231.0$ 225.5$ 455.6$ 453.0$ -8- Governmental Activities: The following chart depicts revenues of the governmental activities for the fiscal year: Revenues - Governmental Activities Fiscal Year Ending June 30, 2007 Property tax and special assessments 27.5% Income tax 20.2% Unrestricted investment earnings 1.8% Unrestricted grants and contributions 7.8% State shared revenue 11.7% Capital grants and contributions 1.6% Operating grants and contributions 11.9% Charges for services 17.5% Property taxes comprised 27.5% of Governmental Activities revenue, with $2,273,042 representing debt service on voted unlimited tax- general obligation debt. The City’s operating millage is currently 14.95 mills. In accordance with Charter and State Constitutional provisions, the City may levy up to 19.1692 mills for operations in FY 2008. Income taxes comprised 20.2% of Governmental Activities revenue which fully appears within the General Fund. Local income tax rates are prescribed by State law, and limited in Lansing’s case to 1% of resident income and 0.5% of the income of persons working in the City, but living outside of its corporate boundaries. State shared revenue is collected by the State of Michigan and distributed to local governments by formula allocation of portions of the State sales tax and motor fuel and weight taxes. FY 2007 receipts from the State of Michigan trended downward, due to declining sales tax collections and discretionary reductions in revenue sharing payments. -9- The following chart depicts expenses of the governmental activities for the fiscal year: Expenses - Governmental Activities Fiscal Year Ending June 30, 2007 Transfers 2.2% Interest on long-term debt 1.2%General government, administrative 15.5%Public safety 44.0% Public works 28.5% Recreation and culture 4.4% Community development 4.4% Business-type Activities Net assets of the business-type activities increased by $5.5 million during the fiscal year. The Sewage Disposal System Fund net assets increased by $4.5 million. This is primarily a result of funding for capital costs of the combined sewer separation project. Sewage system revenues are expected to increase by 4% per year over the next five years to continue this 30 year project. Within nonmajor funds, Cemeteries, Golf, and Potter Park Zoo remain subsidized by the General Fund. The City of Lansing is continuing its five year plan to eliminate the unrestricted net asset deficit in the Golf Fund. -10- FINANCIAL ANALYSIS OF THE CITY’S FUNDS As the City completed the fiscal year, its governmental funds reported fund balances of $44.7 million. Of this total amount, $10.1 million, constitutes unreserved unrestricted fund balance, which is available for appropriation for the general purposes of the City. This includes $5.7 million in the City’s Budget Stabilization Fund and $4.4 million in the General Fund. Further of the total amount of $44.7 million, $29.5 million constitutes unreserved fund balances but are restricted for the purposes of the funds they were set up for. The remainder of fund balance is reserved and is not available for new spending because it has already been reserved for specific purposes, including special assessments and encumbrances. General Fund The General Fund is the chief operating fund of the City. At the end of fiscal year 2007, the General Fund fund balance was $6.9 million, including an unreserved fund balance of $5.0 million and a reserved fund balance of $1.9 million. The General Fund’s total fund balance decreased $194,035. Unreserved fund balance increased by $401,168. General Fund Budgetary Highlights: Due to the combination of a partial hiring freeze and the following highlights, the FY 2007 budgeted use of reserves of $1.6 million was not required. Expenditures came in $1.8 million less than originally budgeted spread over all departments. Interest and rents revenue came in $545,220 higher than originally budgeted due to a healthy investment market. Sewage Disposal Fund Net assets increased $4.5 million to $200.8 million in FY2007. This was attributable to an increase in capital assets, net of related debt increasing $6.7 million for the City’s continuing combined sewer overflow project. Parking Fund The Municipal Parking Fund had a decrease in capital assets net of related debt of $1.2 million, mainly from depreciation of assets. Unrestricted net assets increased $2.4 million, through lower operating costs, and increased revenues. Total net assets increased $1.1 million from this transaction. Budget Stabilization Fund Fund balance at June 30, 2007 remained at $5.7 million. The Fund is limited by Ordinance to 10% of year end General Fund appropriations. -11- Capital Assets Capital Assets: At the end of the fiscal year 2007, the City had invested $580.5 million, net of accumulated depreciation, in a broad range of capital assets (see the table below). Total depreciation charges for the fiscal year were $24.7 million. Additional information regarding the City’s capital assets can be found in the notes to the basic financial statements. Capital Assets as of June 30, (net of depreciation, in millions of dollars) Governmental Business-type Total Primary Activities Activities Government 2007 2006 2007 2006 2007 2006 Land 24.6$ 24.6$ 13.9$ 13.9$ 38.5$ 38.5$ Land improvements 4.2 4.5 14.5 13.3 18.7 17.8 Buildings and improvements 48.1 47.1 103.9 107.4 152.0 154.5 Equipment 8.2 7.2 .9 1.0 9.1 8.2 Sewers - - 183.7 141.8 183.7 141.8 Infrastructure 121.1 123.4 - 121.1 123.4 Subtotal 206.2 206.8 316.9 277.4 523.1 484.2 Construction in progress 15.2 9.5 42.2 65.1 57.4 74.6 Total 221.4$ 216.3$ 359.1$ 342.5$ 580.5$ 558.8$ Infrastructure capital assets in governmental activity funds of $13,179,571 were removed from service during the year. More detailed information regarding the City’s capital assets is presented in Note 3-D (Capital Assets) to the financial statements.. Debt Administration The City, along with the Lansing Building Authority (LBA), a blended component unit of the City, are 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 only dedicated revenue bonds which are currently outstanding. LBA’s bonds financed the construction of parking, golf course, and firing range improvements. Revenues derived from user fees from persons using parking and golf facilities fund the debt service requirements for related improvements, but they are also backed by a limited tax pledge. The General Fund pays for firing range related debt service. More detailed information regarding the City’s long-term obligations is presented in Note 3-G (Long-Term Debt) to the financial statements.. -12- 2007 2006 Governmental: Special assessment bonds $0.01 $0.03 General obligation bonds (backed by the City) 19.85 17.24 Installment purchase contracts 15.40 7.35 Loans 1.77 1.41 Sub-total 37.03 26.03 Business Type: General obligation bonds (backed by the City) 180.18 168.82 Revenue bonds and notes (backed by specific fee revenues) 43.95 47.91 Loans 4.18 4.18 Sub-total 228.31 220.91 Total $265.34 $246.94 . Outstanding Debt as of June 30, (in millions of dollars) ECONOMIC CONDITION AND OUTLOOK The State of Michigan’s slow economic recovery, combined with rising labor force and healthcare costs, continues to place budgetary and fiscal constraints on the City of Lansing. A pick-up in income tax growth (net of a one-time adjustment), along with stable property tax growth, is tentatively positive sign; however, a structural imbalance between revenue and expenditure growth exists, as is the case for the majority of cities, especially those that are urban centers, in Michigan. To address these budgetary challenges, since his inauguration in January, 2006, Mayor Bernero has implemented a budgetary strategy of maximizing revenues, reducing expenses, improving operational efficiencies, and investing in productivity-gaining measures and technologies, with an emphasis on protecting vital services to the public. The Mayor continues to work with Council and the unions to slow the rising cost of healthcare and other compensation issues. The FY 2008 budget does not require the use of reserves, and the Mayor has pledged to continue working with Council to eliminate any use of General Fund reserves for the FY 2009 budget. CONTACTING THE CITY FINANCE DEPARTMENT This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the money it receives. If you have any questions about this report or need additional financial information, contact the Finance Department at (517) 483-4500. BASIC FINANCIAL STATEMENTS GOVERNMENT-WIDE FINANCIAL STATEMENTS City of Lansing Statement of Net AssetsJune 30, 2007 Primary Government Governmental Business-type Component Activities Activities Totals Units Assets Cash and investments 29,354,948$ 28,946,336$ 58,301,284$ 1,649,471$ Receivables, net 30,614,169 43,539,035 74,153,204 643,113 Internal balances 10,795,274 (10,795,274) - - Inventories, prepaids and other assets 2,522,683 1,279,143 3,801,826 231,717 Restricted assets: Cash and investments - 36,343,662 36,343,662 578,250 Receivables, net - 492,332 492,332 - Capital assets not being depreciated 39,749,950 56,061,238 95,811,188 - Capital assets being depreciated, net 181,626,414 303,037,072 484,663,486 91,940 Total assets 294,663,438 458,903,544 753,566,982 3,194,491 Liabilities Accounts payable and accrued liabilities 15,695,482 7,990,619 23,686,101 1,314,208 Accrued interest payable 565,717 1,069,783 1,635,500 9,767,467 Unearned revenues 1,513,238 104,818 1,618,056 709,298 Long-term liabilities: Due within one year 12,910,638 15,404,534 28,315,172 2,757,617 Due in more than one year 39,409,134 203,305,990 242,715,124 29,941,838 Total liabilities 70,094,209 227,875,744 297,969,953 44,490,428 Net assets Invested in capital assets, net of related debt 184,150,439 166,320,408 350,470,847 24,661 Restricted for: Public safety 700,507 - 700,507 - Public works 9,709,722 - 9,709,722 - State mandated programs 6,464,817 - 6,464,817 - Debt service - 35,403,555 35,403,555 - Capital projects 19,170,799 374,160 19,544,959 - Endowments (non-expendable) 1,596,939 - 1,596,939 - Unrestricted (deficit) 2,776,006 28,929,677 31,705,683 (41,320,598) Total net assets (deficit)224,569,229$ 231,027,800$ 455,597,029$ (41,295,937)$ The accompanying notes are an integral part of the financial statements. -13- City of Lansing Statement of Activities For the Year Ended June 30, 2007 Program Revenues Operating Capital Charges Grants and Grants and Net (Expense) Functions/Programs Expenses for Services Contributions Contributions Revenue Primary government Governmental activities: General government 22,043,283$ 6,251,032$ 17,323$ -$ (15,774,928)$ Public safety 62,570,888 13,014,934 176,022 - (49,379,932) Public works 40,517,063 3,805,739 16,201,031 179,294 (20,330,999) Recreation and culture 6,198,462 1,259,373 36,055 101,249 (4,801,785) Community development 6,232,406 66,161 - 1,899,327 (4,266,918) Interest on long-term debt 1,658,708 - 93,747 - (1,564,961) Total governmental activities 139,220,810 24,397,239 16,524,178 2,179,870 (96,119,523) Business-type activities: Sewage disposal system 24,725,229 26,926,202 - 120,107 2,321,080 Municipal parking system 10,275,379 10,838,270 - - 562,891 Cemetery 692,510 264,255 - - (428,255) Golf 1,358,008 754,995 - 4,075 (598,938) Garbage and rubbish collection 1,372,266 1,378,562 - - 6,296 Recycling 2,777,068 2,903,092 - - 126,024 Potter Park Zoo 2,968,236 553,999 - 58,830 (2,355,407) Total business-type activities 44,168,696 43,619,375 - 183,012 (366,309) Total primary government 183,389,506$ 68,016,614$ 16,524,178$ 2,362,882$ (96,485,832)$ Component units Brownfield redevelopment 918,465$ -$ 218,858$ -$ (699,607)$ Community development 3,710,315 - - - (3,710,315) Recreation and culture 5,850,479 4,878,651 1,188,445 - 216,617 Total component units 10,479,259$ 4,878,651$ 1,407,303$ -$ (4,193,305)$ Continued… -14- City of Lansing Statement of Activities (concluded) For the Year Ended June 30, 2007 Primary Government Governmental Business-type Component Activities Activities Totals Units Changes in net assets Net (expense) revenue (96,119,523)$ (366,309)$ (96,485,832)$ (4,193,305)$ General revenues Property taxes 38,371,105 - 38,371,105 5,501,733 Income taxes 28,209,913 - 28,209,913 - Grants and contributions not restricted to specific programs 27,258,536 - 27,258,536 - Unrestricted investment earnings 2,483,162 2,815,480 5,298,642 136,475 Gain on sale of capital assets - 2,160 2,160 800 Transfers - internal activities (3,098,357) 3,098,357 - - Total general revenues and transfers 93,224,359 5,915,997 99,140,356 5,639,008 Change in net assets (2,895,164) 5,549,688 2,654,524 1,445,703 Net assets (deficit), beginning of year 227,464,393 225,478,112 452,942,505 (42,741,640) Net assets (deficit), end of year 224,569,229$ 231,027,800$ 455,597,029$ (41,295,937)$ The accompanying notes are an integral part of the financial statements. -15- FUND FINANCIAL STATEMENTS Governmental Fund Financial Statements Major Funds General Fund – The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Nonmajor Funds Non-major governmental funds are presented, by fund type, beginning on the pages listed below: Special Revenue funds, page 68. Debt Service funds, page 80. Capital Projects funds, page 84. Permanent funds, page 88. City of Lansing Balance Sheet - Governmental Funds June 30, 2007 Other Governmental General Funds Totals Assets Assets Cash and cash equivalents 2,415,442$ 6,414,263$ 8,829,705$ Equity in pooled cash - 17,228,135 17,228,135 Investments - 1,540,000 1,540,000 Accounts receivable, net 9,883,441 2,788,774 12,672,215 Taxes receivable 3,970,867 - 3,970,867 Special assessments receivable - 1,070,189 1,070,189 Loans receivable - 1,407,060 1,407,060 Accrued interest receivable - 1,761,353 1,761,353 Due from other funds 15,611,659 212,212 15,823,871 Interfund receivable - 13,255,411 13,255,411 Advances to other funds 474,997 192,439 667,436 Due from other governments 5,148,771 4,350,792 9,499,563 Due from component units 232,478 - 232,478 Prepaids 119,844 - 119,844 Inventories 1,092,229 - 1,092,229 Total assets 38,949,728$ 50,220,628$ 89,170,356$ Liabilities and Fund Balances Liabilities Accounts payable 5,477,113$ 2,696,983$ 8,174,096$ Deposits payable - 205,339 205,339 Accrued payroll 1,649,411 302,772 1,952,183 Retainage payable 2,364,336 - 2,364,336 Indemnity bonds - 10,890 10,890 Due to other funds 5,018,021 213,015 5,231,036 Interfund payable 14,681,304 3,107,156 17,788,460 Advance from other funds - 474,997 474,997 Due to other governments 1,367,679 321,621 1,689,300 Deferred revenue 1,068,948 5,100,553 6,169,501 Other 438,766 - 438,766 Total liabilities 32,065,578 12,433,326 44,498,904 Fund balances Reserved for advances 474,997 192,439 667,436 Reserved for prepaids 119,844 - 119,844 Reserved for inventories 1,092,229 - 1,092,229 Reserved for encumbrances 160,951 2,284,094 2,445,045 Reserved for long-term receivables - 67,806 67,806 Unreserved, designated for subsequent years' expenditures: General fund 614,993 - 614,993 Special revenue funds - 6,976,602 6,976,602 Unreserved, reported in: General fund 4,421,136 - 4,421,136 Special revenue funds - 7,546,544 7,546,544 Debt service funds - 144,518 144,518 Capital projects funds - 18,978,360 18,978,360 Permanent funds - 1,596,939 1,596,939 Total fund balances 6,884,150 37,787,302 44,671,452 Total liabilities and fund balances 38,949,728$ 50,220,628$ 89,170,356$ The accompanying notes are an integral part of the financial statements. -16- City of Lansing Reconciliation of Fund Balances on the Balance Sheet for Governmental Funds to Net Assets of Governmental Activities on the Statement of Net Assets June 30, 2007 Fund balances - total governmental funds 44,671,452$ Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. Add - capital assets 462,536,608 Deduct - accumulated depreciation (248,700,455) Because the focus of governmental funds is on short-term financing, some assets will not be available to pay for current expenditures. Those assets (i.e., receivables) are offset by deferred revenues in the governmental funds and, therefore, not included in fund balance. Add - deferred ambulance fees 611,512 Add - deferred nuisance fees 457,436 Add - deferred loans receivable 1,207,060 Add - deferred long-term interest receivable 1,663,117 Add - deferred long-term special assessments 717,138 Internal service funds are used by management to charge the costs of certain equipment maintenance to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net assets.12,600,622 Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds. Deduct - bonds, loans and leases payable (35,930,925) Deduct - accrued interest on bonds, loans and leases payable (542,623) Add - deferred bond issuance costs 67,344 Deduct - compensated absences and other long-term liabilities (14,789,057) Net assets of governmental activities 224,569,229$ The accompanying notes are an integral part of the financial statements. -17- City of Lansing Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2007 Other Governmental General Funds Totals Revenues Taxes and special assessments 35,844,777$ 2,837,151$ 38,681,928$ Income taxes 28,209,913 - 28,209,913 Licenses and permits 1,101,550 - 1,101,550 Intergovernmental 17,343,737 17,356,171 34,699,908 Charges for services 10,353,610 8,062,002 18,415,612 Fines and forfeits 3,912,695 436,947 4,349,642 Interest and rents 1,409,411 1,197,977 2,607,388 Contributions 9,966,354 14,500 9,980,854 Donations from private sources - 114,954 114,954 Other revenues 220,817 798,659 1,019,476 Total revenues 108,362,864 30,818,361 139,181,225 Expenditures Current expenditures: General government 26,313,988 2,591,071 28,905,059 Public safety 59,513,582 5,704,933 65,218,515 Highways and streets 5,022,833 8,478,914 13,501,747 Recreation and culture 7,610,688 65,912 7,676,600 Other functions 2,618,481 7,229,444 9,847,925 Debt service: Principal 748,115 3,127,794 3,875,909 Interest 219,737 1,015,227 1,234,964 Issuance costs - 50,471 50,471 Capital outlay - 20,001,659 20,001,659 Total expenditures 102,047,424 48,265,425 150,312,849 Revenues over (under) expenditures 6,315,440 (17,447,064) (11,131,624) Other financing sources (uses) Transfers in 618,000 6,290,259 6,908,259 Transfers out (7,127,475) (3,041,141) (10,168,616) Issuance of long-term debt - 16,711,227 16,711,227 Bond premium - 273,905 273,905 Payment to escrow agent - (1,795,055) (1,795,055) Total other sources (uses) (6,509,475) 18,439,195 11,929,720 Net change in fund balances (194,035) 992,131 798,096 Fund balances, beginning of year 7,078,185 36,795,171 43,873,356 Fund balances, end of year 6,884,150$ 37,787,302$ 44,671,452$ The accompanying notes are an integral part of the financial statements. -18- City of Lansing Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Fundsto the Statement of ActivitiesFor the Year Ended June 30, 2007 Net change in fund balances - total governmental funds 798,096$ Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlay as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. Add - capital outlay 20,687,180 Deduct - depreciation expense (12,775,918) Deduct - loss on disposal of capital assets (3,700,189) Deduct - capital assets transferred to internal service funds (1,861,442) Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds, but rather are deferred to subsequent fiscal years. Add - change in ambulance fees 331,308 Deduct - change in deferred special assessments (131,529) Internal service funds are used by management to charge the costs of certain equipment maintenance to individual funds. The net increase (decrease) in the net assets of the internal service funds is reported with governmental activities. Add - net operating income from governmental activities in internal service funds 1,178,106 Add - gain on sale of capital assets from governmental internal service funds 88,605 Deduct - interest expense from governmental internal service funds (74,038) Add - capital contributions from governmental internal service funds 3,175,958 Add - transfers in governmental internal service funds 162,000 Debt proceeds provide current financial resources to governmental funds in the period issued, but issuing debt increases long-term liabilities in the statement of net assets. Repayment of debt principal is an expenditure in the funds, but the repayment reduces long-term liabilities in the statement of net assets. Deduct - issuance of long-term debt (16,711,227) Add - principal payments on long-term liabilities 3,875,909 Deduct - premium on bond issuances (273,905) Add - payments to bond escrow agent 1,795,055 Add - bond issuance costs 50,471 Certain expenditures are reported in govenmental funds that reduce long-term liabilities for purposes of the statement of net assets. Add - decrease in liability for workers' compensation 362,147 Some expenses reported in the statement of activites do not require the use of current financial resources and therefore are not reported as expenditures in the funds. Deduct - increase in accrued interest payable on long-term liabilities (348,392) Deduct - amortization of debt-related costs (1,314) Add - decrease in the accrual for compensated absences 477,955 Change in net assets of governmental activities (2,895,164)$ The accompanying notes are an integral part of the financial statements. -19- City of Lansing Statement of Revenues, Expendituresand Changes in Fund Balances - Budget and Actual General FundFor the Year Ended June 30, 2007 Budget Variance with Original Final Actual Final Budget Revenues Property taxes 36,114,000$ 36,274,000$ 35,844,777$ (429,223)$ Income taxes 29,651,800 28,051,800 28,209,913 158,113 Licenses and permits 1,073,020 1,049,910 1,101,550 51,640 Intergovernmental 17,750,823 17,412,823 17,343,737 (69,086) Charges for services 10,115,771 9,995,381 10,353,610 358,229 Fines and forfeits 3,827,395 3,827,395 3,912,695 85,300 Interest and rents 864,191 1,464,191 1,409,411 (54,780) Contributions 9,794,100 10,221,064 9,966,354 (254,710) Other revenues 83,050 83,050 220,817 137,767 Total revenues 109,274,150 108,379,614 108,362,864 (16,750) Expenditures General government: City clerk 918,991 960,205 959,492 713 Council 1,138,537 1,042,420 926,500 115,920 Courts 5,025,749 4,841,891 4,731,459 110,432 Finance 11,661,944 5,092,253 4,963,434 128,819 General administration (837,562) 1,314,803 1,314,394 409 Law 1,361,550 1,330,175 1,298,292 31,883 Management services - 6,067,289 5,946,719 120,570 Mayor 795,793 788,793 771,685 17,108 Personnel services 2,017,220 1,937,026 1,881,759 55,267 Planning / neighborhood development 4,003,646 3,761,229 3,520,254 240,975 Total general government 26,085,868 27,136,084 26,313,988 822,096 Public safety: Police 31,609,780 31,338,231 31,289,680 48,551 Fire 28,101,516 28,279,628 28,223,902 55,726 Total public safety 59,711,296 59,617,859 59,513,582 104,277 Highways and streets: Public service 5,724,804 5,497,409 5,022,833 474,576 Parks and recreation 8,309,249 8,018,239 7,610,688 407,551 Other functions: Human relations / community services 995,965 949,160 947,515 1,645 Human services / community support 1,684,600 1,760,750 1,670,966 89,784 Total other functions 2,680,565 2,709,910 2,618,481 91,429 Continued… -20- City of Lansing Statement of Revenues, Expendituresand Changes in Fund Balances - Budget and Actual (Concluded) General FundFor the Year Ended June 30, 2007 Budget Variance with Original Final Actual Final Budget Expenditures (concluded) Debt service: Principal 1,179,605$ 813,664$ 748,115$ 65,549$ Interest and fees 197,345 234,840 219,737 15,103 Total debt service 1,376,950 1,048,504 967,852 80,652 Total expenditures 103,888,732 104,028,005 102,047,424 1,980,581 Revenues over expenditures 5,385,418 4,351,609 6,315,440 1,963,831 Other financing sources (uses) Transfers in 1,956,918 2,256,918 618,000 (1,638,918) Transfers out (7,412,936) (7,180,690) (7,127,475) 53,215 Proceeds on sale of capital assets 70,600 70,600 - (70,600) Total other financing sources (uses) (5,385,418) (4,853,172) (6,509,475) (1,656,303) Net change in fund balance - (501,563) (194,035) 307,528 Fund balance, beginning of year 7,078,185 7,078,185 7,078,185 - Fund balance, end of year 7,078,185$ 6,576,622$ 6,884,150$ 307,528$ The accompanying notes are an integral part of the financial statements. -21- Proprietary Fund Financial Statements Major Funds Sewage Disposal System Fund – This fund accounts for the provision of sewage disposal services to the residents of the City. Municipal Parking System Fund – This fund accounts for the operation of City-owned parking facilities. Non-Major Funds and Internal Service Funds Non-major enterprise funds and internal service funds are presented, by fund type, beginning on the pages listed below: Enterprise funds, page 90. Internal Service funds, page 98. City of Lansing Statement of Net AssetsProprietary Funds June 30, 2007 Business-type Activities - Enterprise Funds Governmental Sewage Municipal Other Activities - Disposal Parking Enterprise Internal System System Funds Totals Service Funds Assets Current assets: Cash and cash equivalents 15,107,749$ 2,644,698$ 55,197$ 17,807,644$ -$ Equity in pooled cash 100,636 9,660,241 1,744,950 11,505,827 1,213,736 Receivables: Accounts, net 17,896,566 1,489,020 219,112 19,604,698 444 Accrued interest 50,130 352,335 - 402,465 - Lease receivable, current - 2,492,769 - 2,492,769 - Inventories 239,506 - 86,098 325,604 672,179 Prepaids - 4,241 - 4,241 565,420 Due from other funds 5,008,018 - - 5,008,018 10,000 Interfund receivable --- - 4,900,184 Restricted assets: Cash and cash equivalents 36,072,779 270,883 - 36,343,662 - Accounts receivable - 374,160 - 374,160 - Accrued interest receivable 117,125 1,047 - 118,172 - Total current assets 74,592,509 17,289,394 2,105,357 93,987,260 7,361,963 Noncurrent assets: Lease receivable - 21,039,103 - 21,039,103 - Bond issue costs 477,499 471,799 - 949,298 5,667 Capital assets, net 307,250,882 41,775,976 10,071,452 359,098,310 7,540,211 Total non-current assets 307,728,381 63,286,878 10,071,452 381,086,711 7,545,878 Total assets 382,320,890 80,576,272 12,176,809 475,073,971 14,907,841 Liabilities Current liabilities: Accounts payable 7,168,335 115,781 92,966 7,377,082 106,834 Deposits payable - 47,795 - 47,795 - Accrued interest payable 889,970 168,309 11,504 1,069,783 23,094 Accrued payroll 172,004 67,835 200,814 440,653 121,575 Other --- - 582,312 Due to other funds 15,610,204 649 - 15,610,853 - Interfund payable - - 367,135 367,135 - Advances from other funds - 192,439 - 192,439 - Due to other governments 125,089 - - 125,089 - Unearned revenues - - 104,818 104,818 - Current portion of: Long-term debt 9,110,000 5,559,472 65,000 14,734,472 125,000 Compensated absences 321,360 93,086 255,616 670,062 114,340 Total current liabilities 33,396,962 6,245,366 1,097,853 40,740,181 1,073,155 Noncurrent liabilities: Long-term debt 147,901,601 54,209,417 765,917 202,876,935 1,170,000 Compensated absences 245,100 56,773 127,182 429,055 64,064 Total non-current liabilities 148,146,701 54,266,190 893,099 203,305,990 1,234,064 Total liabilities 181,543,663 60,511,556 1,990,952 244,046,171 2,307,219 Net assets Invested in capital assets, net of related debt 150,716,780 6,363,093 9,240,535 166,320,408 6,245,211 Restricted for debt retirement 35,299,934 103,621 - 35,403,555 - Restricted for capital projects - 374,160 - 374,160 - Unrestricted 14,760,513 13,223,842 945,322 28,929,677 6,355,411 Total net assets 200,777,227$ 20,064,716$ 10,185,857$ 231,027,800$ 12,600,622$ The accompanying notes are an integral part of the financial statements. -22- City of Lansing Statement of Revenues, Expenses and Changes in Fund Net Assets Proprietary Funds For the Year Ended June 30, 2007 Business-type Activities - Enterprise Funds Governmental Sewage Municipal Other Activities - Disposal Parking Enterprise Internal System System Funds Totals Service Funds Operating revenues Charges for services 26,890,119$ 9,061,935$ 5,854,903$ 41,806,957$ 58,068,589$ Operating expenses Personal services 6,268,300 2,433,498 4,872,403 13,574,201 5,106,348 Purchase of goods and services 7,233,988 1,641,896 3,680,257 12,556,141 50,145,818 Depreciation 7,441,441 2,315,526 567,580 10,324,547 1,638,317 Total operating expenses 20,943,729 6,390,920 9,120,240 36,454,889 56,890,483 Operating income (loss) 5,946,390 2,671,015 (3,265,337) 5,352,068 1,178,106 Nonoperating revenues (expenses) Interest revenue 2,234,643 547,723 33,114 2,815,480 - Gain on sale of capital assets - 2,160 - 2,160 88,605 Interest expense and fees (3,781,500) (3,884,459) (47,848) (7,713,807) (74,038) Other revenue 36,083 1,776,335 - 1,812,418 - Total nonoperating expenses (1,510,774) (1,558,241) (14,734) (3,083,749) 14,567 Income (loss) before contributions and transfers 4,435,616 1,112,774 (3,280,071) 2,268,319 1,192,673 Capital contributions 120,107 - 62,905 183,012 3,175,958 Transfers in 248,117 - 3,170,029 3,418,146 162,000 Transfers out (300,000) - (19,789) (319,789) - Change in net assets 4,503,840 1,112,774 (66,926) 5,549,688 4,530,631 Net assets, beginning of year 196,273,387 18,951,942 10,252,783 225,478,112 8,069,991 Net assets, end of year 200,777,227$ 20,064,716$ 10,185,857$ 231,027,800$ 12,600,622$ The accompanying notes are an integral part of the financial statements. -23- City of Lansing Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2007 Business-type Activities - Enterprise Funds Governmental Sewage Municipal Other Activities - Disposal Parking Enterprise Internal System System Funds Totals Service Funds Cash flows from operating activities Cash received from customers 23,820,913$ 8,239,381$ 5,856,468$ 37,916,762$ -$ Cash received from interfund services - - - - 52,341,292 Cash payments for goods and services (3,532,866) (1,549,919) (3,767,536) (8,850,321) (49,629,481) Cash payments to employees (6,252,991) (2,434,269) (4,821,742) (13,509,002) (3,133,747) Other receipts 36,083 1,776,335 - 1,812,418 - Net cash provided by (used for) operating activities 14,071,139 6,031,528 (2,732,810) 17,369,857 (421,936) Cash flows from noncapital financing activities Transfers in 248,117 - 3,170,029 3,418,146 162,000 Transfers out (300,000) - (19,789) (319,789) - Net cash provided by (used for) noncapital financing activities (51,883) - 3,150,240 3,098,357 162,000 Cash flows from capital and related financing activitiesProceeds from sale of capital assets - 2,160 - 2,160 95,052 Acquisition and construction of capital assets (26,418,562) (388,290) (75,367) (26,882,219) (4,382,249) Capital contributions received 120,107 - 62,905 183,012 3,175,958 Principal paid on revenue and general obligation bonds (9,510,000) (12,725,000) (60,000) (22,295,000) (115,000) Interest paid on revenue and general obligation bonds (3,708,217) (2,155,665) (47,065) (5,910,947) (73,384) Proceeds from issuance of long-term debt 21,733,410 7,965,000 - 29,698,410 - Payments received on capital lease - 2,329,691 - 2,329,691 - Net cash provided used for capital and related financing activities (17,783,262) (4,972,104) (119,527) (22,874,893) (1,299,623) Cash flows from investing activities Interest and dividends 2,234,643 547,723 33,114 2,815,480 - Net increase (decrease) in cash and cash equivalents (1,529,363) 1,607,147 331,017 408,801 (1,559,559) Cash and cash equivalents, beginning of year 52,810,527 10,968,675 1,469,130 65,248,332 2,773,295 Cash and cash equivalents, end of year 51,281,164$ 12,575,822$ 1,800,147$ 65,657,133$ 1,213,736$ Reconciliation of operating income (loss) to net cash provided by (used for) operating activities Operating income (loss)5,946,390$ 2,671,015$ (3,265,337)$ 5,352,068$ 1,178,106$ Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities Depreciation expense 7,441,441 2,315,526 567,580 10,324,547 1,638,317 Other receipts 36,083 1,776,335 - 1,812,418 - Change in: Accounts receivable (14,927,421) (847,827) 1,565 (15,773,683) 700,631 Accrued interest receivable 104,534 25,273 - 129,807 - Inventories 2,743 - 10,225 12,968 (400,383) Prepaids - (4,241) - (4,241) (16,185) Due from other funds (613,800) - - (613,800) - Interfund receivable - - - - (3,621,875) Accounts payable 4,391,475 41,492 (42,173) 4,390,794 71,282 Deposits payable - 13,040 - 13,040 - Accrued interest payable (15,108) 31,363 (750) 15,505 (2,051) Accrued payroll 15,309 (771) 50,661 65,199 84,623 Other - - - - (114,438) Due to other funds 11,753,681 174 - 11,753,855 - Interfund payable - - (59,444) (59,444) - Advances from other funds - - - - - Unearned revenues - - 4,302 4,302 - Compensated absences (64,188) 10,149 561 (53,478) 60,037 Total adjustments 8,124,749 3,360,513 532,527 12,017,789 (1,600,042) Net cash provided by (used for) operating activities 14,071,139$ 6,031,528$ (2,732,810)$ 17,369,857$ (421,936)$ The accompanying notes are an integral part of the financial statements. -24- Fiduciary Fund Financial Statements Pension (and Other Post Employment Benefits) Trust Funds – Employee Pension Trust funds accept payments made by the City, invest fund resources, and calculate and pay pensions to beneficiaries. Combining schedules for fiduciary funds are presented in the notes to the financial statements. Agency Funds – These funds account for resources held in a trustee or agent capacity for the 54-A District Court. Combining statements for agency funds are presented, by fund type, beginning on page 102. City of Lansing Statement of Fiduciary Net AssetsFiduciary Funds June 30, 2007 Pension Agency Trust Funds Funds Assets Cash and cash equivalents 7,332,979$ -$ Equity in pooled cash - 176,549 Investments: U. S. Government obligations 91,363,065 - Corporate bonds 1,335,615 - Common stocks 51,652,641 - Mutual funds 382,134,763 - Contribution receivable 2,336,354 - Dividends and interest receivable 703,875 - Total assets 536,859,292 176,549$ Liabilities Accounts payable 2,020,015 -$ Undistributed receipts - 176,549 Total liabilities 2,020,015 176,549$ Net assets held in trust for: Pension benefits 505,324,954 Other postemployment benefits 29,514,323 Total net assets 534,839,277$ The accompanying notes are an integral part of the financial statements. -25- City of Lansing Statement of Changes in Fiduciary Net AssetsPension Trust Funds For the Year Ended June 30, 2007 Additions Investment income: Net appreciation in fair value of investments 44,956,587$ Interest income 27,779,660 Dividend income 654,021 Less investment expenses (1,664,444) Net investment income 71,725,824 Contributions: Employer 13,906,772 Plan members 4,105,162 Total contributions 18,011,934 Total additions 89,737,758 Deductions Participant benefits 37,600,636 Administrative expense 49,891 Total deductions 37,650,527 Net additions to net assets held in trust 52,087,231 Net assets held in trust for pension benefits: Beginning of year 482,752,046 End of year 534,839,277$ The accompanying notes are an integral part of the financial statements. -26- COMPONENT UNITS FINANCIAL STATEMENTS Discretely Presented Component Units Discretely presented component units are entities that are legally separate from the City but for which the City is financially accountable, or their relationship with the City is such that exclusion would cause the City’s financial statements to be misleading or incomplete. The City has three discretely presented component units: Brownfield Redevelopment Authority Tax Increment Finance Authority Lansing Entertainment and Public Facilities Authority Complete financial statements for each of the individual component units may be obtained from the entity's administrative offices. City of Lansing Combining Statement of Net Assets Component Units June 30, 2007 Lansing Tax Entertainment Brownfield Increment & Public Redevelopment Finance Facilities Authority Authority Authority Totals Assets Cash and cash equivalents 556,479$ 541,903$ 551,089$ 1,649,471$ Receivables, net 36,000 - 607,113 643,113 Inventories, prepaids and other assets 61,138 41,088 129,491 231,717 Restricted assets: Cash and cash equivalents - - 578,250 578,250 Capital assets being depreciated, net - - 91,940 91,940 Total assets 653,617 582,991 1,957,883 3,194,491 Liabilities Accounts payable and accrued liabilities 160,794 507,233 646,181 1,314,208 Accrued interest payable 34,858 9,732,609 - 9,767,467 Unearned revenues 469 - 708,829 709,298 Long-term liabilities: Due within one year 165,000 2,578,305 14,312 2,757,617 Due in more than one year 2,060,000 27,828,871 52,967 29,941,838 Total liabilities 2,421,121 40,647,018 1,422,289 44,490,428 Net assets Invested in capital assets, net of related debt - - 24,661 24,661 Unrestricted (deficit) (1,767,504) (40,064,027) 510,933 (41,320,598) Total net assets (deficit)(1,767,504)$ (40,064,027)$ 535,594$ (41,295,937)$ The accompanying notes are an integral part of the financial statements. -27- City of Lansing Combining Statement of Activities Component Units For the Year Ended June 30, 2007 Lansing Tax Entertainment Brownfield Increment & Public Redevelopment Finance Facilities Authority Authority Authority Totals Expenses Brownfield redevelopment 918,465$ -$ -$ 918,465$ Community development - 3,710,315 - 3,710,315 Recreation and culture - - 5,850,479 5,850,479 Total expenses 918,465 3,710,315 5,850,479 10,479,259 Program revenues Charges for services - - 4,878,651 4,878,651 Operating grants and contributions 218,858 - 1,188,445 1,407,303 Total program revenues 218,858 - 6,067,096 6,285,954 Net program expense (699,607) (3,710,315) 216,617 (4,193,305) General revenues Property taxes 781,192 4,720,541 - 5,501,733 Unrestricted investment earnings 17,889 101,671 16,915 136,475 Gain on sale of capital assets - - 800 800 Total general revenues 799,081 4,822,212 17,715 5,639,008 Change in net assets 99,474 1,111,897 234,332 1,445,703 Net assets (deficit), beginning of year (1,866,978) (41,175,924) 301,262 (42,741,640) Net assets (deficit), end of year (1,767,504)$ (40,064,027)$ 535,594$ (41,295,937)$ The accompanying notes are an integral part of the financial statements. -28- NOTES to the FINANCIAL STATEMENTS -29- City of Lansing, Michigan Index Notes to the Financial Statements Page 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity.................................................................................................... 30 B. Basis of Presentation............................................................................................. 32 C. Measurement Focus / Basis of Accounting .......................................................... 34 D. Assets, Liabilities and Equity ............................................................................... 35 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary Information.......................................................................................... 37 B. Excess of Expenditures Over Appropriations....................................................... 38 C. Deficit Fund Balance/Net Assets.......................................................................... 38 3. DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS A. Deposits and Investments ..................................................................................... 39 B. Deposits, Investments and Securities Lending – Pension Trust Fund.................. 40 C. Receivables........................................................................................................... 44 D. Capital Assets ....................................................................................................... 45 E. Payables................................................................................................................ 47 F. Interfund Receivables, Payables and Transfers.................................................... 47 G. Long-term Debt..................................................................................................... 49 H. Segment Information – Enterprise Funds ............................................................ 53 I. Endowments ......................................................................................................... 53 4. OTHER INFORMATION A. Risk Management................................................................................................. 54 B. Property Taxes...................................................................................................... 54 C. Contingent Liabilities .......................................................................................... 55 D. Defined Benefit Pension Plans ............................................................................. 55 E. Postemployment Benefits..................................................................................... 62 F. Subsequent Events................................................................................................ 63 CITY OF LANSING, MICHIGAN Notes To Financial Statements -30- NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1-A. Reporting Entity The City of Lansing (the “City”) was incorporated in 1859. In 1909, the City came under the provisions of Act 279, P.A. 1909, as amended (“Home Rule City Act”). The City operates under a strong Mayor form of government in which the Mayor is responsible for implementation and administration of City policy as established by City Council. The accounting and reporting policies of the City conform in all material respects to generally accepted accounting principles (GAAP) as applicable to governments. The Governmental Accounting Standards Board (GASB) is the standard setting body for establishing governmental accounting and financial reporting principles, which are primarily set forth in the GASB’s Codification of Governmental Accounting and Financial Reporting Standards (GASB Codification). Following is a summary of the significant policies: As required by generally accepted accounting principles, these financial statements present the City and its component units, entities for which the City is considered to be financially accountable. The financial data of the component units are included in the City’s reporting entity because of the significance of their operational or financial relationships with the City. (1) Blended Component Units: A blended component unit is a legally separate entity from the City but is so intertwined with the City that it is, in substance, the same as the City. It is reported as part of the City and its financial data is combined with data of the appropriate funds. The City has one blended component unit, the Building Authority with a fiscal June 30 year-end. This component unit provides services primarily to benefit the City. The blended unit is described as follows: (a) Building Authority (the “Authority”): The Authority was established by the City under Act 31, Michigan Public Acts of 1948. The Mayor, with the advice and consent of City Council, appoints the Authority's governing body and designates management. The Authority uses the proceeds of its tax-exempt bonds to finance the construction or acquisition of capital assets for the City only. The bonds are secured by lease agreements with the City and will be retired through lease payments from the City. The financial activity, assets, liabilities and equity of the Authority are incorporated within the City’s Municipal Parking System and Golf enterprise funds, and the 1998 Building Authority Debt Service Fund. (2) Discretely Presented Component Units: Discretely presented component units are entities that are legally separate from the City but for which the City is financially accountable, or their relationship with the City is such that exclusion would cause the City’s financial statements to be misleading or incomplete. The City has three discretely presented component units, the Brownfield Redevelopment Authority, the Tax Increment Financing Authority and the Lansing Entertainment and Public Facilities Authority, each with a fiscal June 30 year-end. The discretely presented component units are as follows: CITY OF LANSING, MICHIGAN Notes To Financial Statements -31- (a) Brownfield Redevelopment Authority: The Authority was established by the City on August 17, 1997, under the authority contained in Act 381, Michigan Public Acts of 1996 (the Act). The Act authorizes the City to establish and to designate the boundaries of a Brownfield redevelopment zone. The 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 Authority to participate in a broad range of improvement activities intended to encourage the reuse of industrial and commercial property by offering economic incentives for redevelopment to prevent property value deterioration. Tax increment financing plans must be approved by the City. Tax increment financing permits the Authority to capture tax revenues which are attributable to increases in the value of real and personal property located within an approved project area. Current activities of the Authority include collections of property tax revenues on project areas for the Rite Aid Pharmacy and the former Motor Wheel Site Plant. (b) Tax Increment Finance Authority (“TIFA”): The TIFA was established by the City under the authority contained in Act 450, Michigan Public Acts of 1981. The Act 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. The Act allows the TIFA to participate in a broad range of improvement activities intended to contribute to economic growth and prevent property value deterioration. The TIFA’s governing body is appointed by the Mayor with the advice and consent of the City Council. Bond issuances, to fund the above activities, are approved by the City Council and the legal liability for the debt remains with the City. (c) Lansing Entertainment and Public Facilities Authority (“LEPFA”): LEPFA was established under the charter of the City of Lansing in February 1996, replacing the former Greater Lansing Convention/Exhibition Authority, which had been responsible for operating and managing the Lansing Center and the Lansing Civic Arena (the latter through the fiscal year ended June 30, 1995). LEPFA was established to oversee the management and operations of the Lansing Center, the City Market and the Oldsmobile Park stadium. The Authority 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 the Authority, all assets and rights of the Authority shall revert to the City. The Authority's Board of Commissioners consists of thirteen members appointed by the Mayor of the City of Lansing and approved by the City Council. CITY OF LANSING, MICHIGAN Notes To Financial Statements -32- Component Unit Financial Statements: Complete financial statements for each of the individual component units may be obtained from the entity's administrative offices. City of Lansing Building Authority 8th Floor 124 West Michigan Avenue Lansing, Michigan 48933 Brownfield Redevelopment Authority 401 S. Washington Square, Suite 100 Lansing, Michigan 48933 Tax Increment Finance Authority 401 S. Washington Square, Suite 100 Lansing, Michigan 48933 Lansing Entertainment and Public Facility Authority 333 East Michigan Avenue Lansing, Michigan 48933 1-B. Basis of Presentation Government-wide Financial Statements. The statements of net assets and activities display information about the primary government (the City) and its component units. These statements include the financial activities of the overall government, except for fiduciary activities. Eliminations have been made to minimize the double-counting of internal activities. These statements distinguish between the City’s governmental and business-type activities. Governmental activities generally are financed through taxes, intergovernmental revenues and other nonexchange transactions. Business-type activities are financed in whole or in part by fees charged to external parties. The statement of activities presents a comparison between direct expenses and program revenues for the different business-type activities of the City and for each function of the City’s governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expense allocations that have been made in the funds have been reversed for the statement of activities. Program revenues include (a) fees, fines and charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. Fund Financial Statements. The fund financial statements provide information about the City’s funds, including its fiduciary funds and blended component unit. Separate statements for each fund category – governmental, proprietary and fiduciary – are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. CITY OF LANSING, MICHIGAN Notes To Financial Statements -33- The City reports the following major governmental fund: General fund. This fund is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The City reports the following major enterprise funds: Sewage Disposal System Fund. This fund accounts for the provision of sewage disposal services to the residents of the City. Municipal Parking System Fund. This fund accounts for the operating of City-owned parking facilities. Additionally, the City reports the following fund types: Special revenue funds. These funds account for revenue sources that are legally restricted to expenditures for specific purposes not including major capital projects. Debt service funds. These funds account for the resources accumulated and payments made for principal and interest on long-term general obligation debt of governmental funds. Capital projects funds. These funds account for the acquisition of capital assets or construction of major capital projects not being financed by proprietary funds. Permanent funds. These funds account for resources that are legally restricted to the extent that only earnings, and not principal, may be used for purposes that support the government’s programs. Enterprise funds. These funds account for those operations that are financed and operated in a manner similar to private business or where the City has decided that the determination of revenues earned, costs incurred and/or net income is necessary for management accountability. Internal service funds. These funds account for operations that provide services to other departments or agencies of the City, or to other governments, on a cost-reimbursement basis. This includes operating a maintenance facility for trucks and equipment used by the Public Service Department, and health care self-insurance services. Pension Trust Funds – These funds account for the accumulation of resources to be used for retirement annuity payments to eligible full-time employees of the City, certain healthcare costs, and other retirement distributions. Agency Funds – These funds account for resources held in a trustee or agent capacity for the 54-A District Court. CITY OF LANSING, MICHIGAN Notes To Financial Statements -34- 1-C. Measurement Focus / Basis of Accounting Government-wide, Proprietary and Fiduciary Fund Financial Statements. The government-wide, proprietary and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, except for agency funds, which do not have a measurement focus. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or ancillary activities. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s enterprise and internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. Nonexchange transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, grants, entitlements and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Governmental Fund Financial Statements. Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The City considers all revenues reported in the governmental funds to be available if they are collected within three months after year-end, except for income taxes that use a 45-day collection period, property taxes that use a 60-day collection period, and reimbursement-based grants that use one year. Property taxes, income taxes, franchise taxes, licenses and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, compensated absences, and claims and judgments, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases, if any, are reported as other financing sources. Under the terms of grant agreements, the City funds certain programs by a combination of specific cost-reimbursement grants, categorical block grants, and general revenues. Thus, when program expenses are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the City’s policy to first apply cost-reimbursement grant resources to such programs, followed by categorical block grants, and then by general revenues, subject to satisfying any grant program matching provisions. CITY OF LANSING, MICHIGAN Notes To Financial Statements -35- All governmental and business-type activities and enterprise funds of the City follow private-sector standards of accounting and financial reported issued prior to December 1, 1989, unless those standards conflict with guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The City has elected not to follow subsequent private-sector guidance. 1-D. Assets, Liabilities and Equity Deposits and Investments The City maintains an investment pool for all City funds. Each fund’s portion of the investment pool is displayed on the statement of net assets/balance sheet as “equity in pooled cash.” The City’s cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. State statutes authorize the government to deposit in the accounts of federally insured banks, credit unions, and savings and loan associations, and to invest in obligations of the U.S. Treasury, certain commercial paper, repurchase agreements, bankers acceptances, and mutual funds composed of otherwise legal investments. Investments are stated at fair value. Short-term investments are reported at cost, which approximates fair value. Securities traded on a national or international exchange are valued at the last reported sales price at current exchange rates. Mortgages are valued on the basis of future principal and interest payments, and are discounted at prevailing interest rates for similar instruments. Investments that do not have established market values are reported at estimated fair value. Cash deposits are reported at carrying amounts, which reasonably approximates fair value. Unrealized appreciation or depreciation on pension trust fund investments due to changes in fair value are recognized each year. Receivables and Payables All trade and delinquent property tax receivables are shown net of an allowance for uncollectibles, as applicable. Certain notes receivable in governmental funds consist of rehabilitation and redevelopment loans that are generally not expected or scheduled to be collected in the subsequent year. Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either interfund receivables/payables (i.e., the current portion of interfund loans) or advances to/from other funds (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as due to/from other funds. Any residual balances outstanding between the governmental and business-type activities are reported in the government-wide financial statements as internal balances. CITY OF LANSING, MICHIGAN Notes To Financial Statements -36- Inventories, Prepaid Items and Other Assets All inventories are valued at cost using the first-in/first-out method. Inventories of governmental funds are recorded as expenditures when consumed. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items acquired or constructed since June 30, 1980), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets that are used for governmental activities are only reported in the government-wide statements. Infrastructure (“public domain”) assets, including roads, bridges, sanitary sewers, drains, curbs, and gutters are capitalized. With this measurement focus, all assets and liabilities (whether current or noncurrent) associated with the operations of these funds are included on the government-wide statement of net assets. All land and non-depreciable land improvements are capitalized, regardless of cost. Equipment and vehicles are capitalized when the cost of individual items exceed $5,000. The road and sewer networks are all capitalized regardless of cost. Buildings are capitalized over $100,000, and the recreational facilities’ thresholds range from $25,000 to $50,000. Capital assets of the primary government are depreciated using the straight-line method over the following estimated useful lives: Assets Years Buildings 20-50 Improvements 8-50 Equipment 3-15 Sanitary sewers 50 Infrastructure 10-75 Compensated Absences It is the government’s policy to permit employees to accumulate earned but unused vacation and compensatory time benefits, subject to certain limitations. Certain bargaining unit employees are also permitted to accumulate earned but unused sick leave. All vacation and compensatory time pay and 50 percent of sick leave are accrued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations or retirements. CITY OF LANSING, MICHIGAN Notes To Financial Statements -37- Long-term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Fund Equity In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for a specific purpose. Fund balance designations represent tentative management plans that are subject to change. NOTE 2 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY 2-A. Budgetary Information The City follows these procedures in establishing the budgetary data reflected in the financial statements: On or before the fourth Monday in March, the Mayor submits to the City Council a proposed operating budget for the fiscal year commencing the following July 1. The operating budget includes proposed expenditures and the means of financing them. A public hearing on the proposed use of funds is held by the Mayor, and a public hearing on the annual appropriations as proposed by the City Council is held no later than one week prior to adoption of the annual appropriation measure. Not later than the third Monday in May, the Council adopts a budget for the ensuing fiscal year, makes an appropriation of the money needed therefore, and sets the property tax rate necessary to support the appropriations measure. CITY OF LANSING, MICHIGAN Notes To Financial Statements -38- 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. The legal level of budgetary control is the mandatory expenditure accounts level. The mandatory accounts are personal services, supplies and operating expense, capital outlay, debt service, transfers and contingency. Transfers of appropriations between the mandatory accounts require the approval of the City Council. However, the Mayor may authorize budget transfers between mandatory accounts in a department, but the additional amount may not exceed fifteen (15%) of the Council's appropriation being added to, or five thousand dollars ($5,000), whichever is less. Budget-to-actual schedules that demonstrate compliance at the legal level of budgetary control are not included herein as it would be impractical due to the high level of detail that would be needed. Such schedules are included in the City's separately issued Budget Report. Copies of the report may be obtained from the Finance Department, 124 West Michigan Avenue, Lansing, Michigan 48933. The City formally adopts operating budgets for the General Fund and all Special Revenue Funds. Budgetary integration is employed as a management control device during the year for all budgeted funds. Except for the General Fund, these budgets are adopted on a basis consistent with generally accepted accounting principles ("GAAP"). In the General Fund, capital lease payments / installment payments are budgeted, but capital lease acquisitions are not. Appropriations lapse at year-end for all annual budgets. Appropriations are automatically carried forward for project-type budgets. Encumbrance accounting is employed in governmental funds. Encumbrances (e.g., purchase orders or contracts) outstanding at year end are reported as reservations of fund balances and do not constitute expenditures or liabilities because the commitments will be reappropriated and honored during the subsequent year. 2-B. Deficit Fund Balance/Net Assets The Special Assessments capital projects funds has a deficit fund balance of $139,463. This deficit is the result of a long-term advance from the general fund that was used to provide the working capital for the fund in prior years. As special assessments are collected, this deficit will be eliminated, and the advance repaid. The Golf Enterprise Fund has a deficit in its unrestricted net assets of $431,171. Total net assets amount to $2,023,771. CITY OF LANSING, MICHIGAN Notes To Financial Statements -39- NOTE 3 – DETAILED NOTES ON ALL FUNDS 3-A. Deposits and Investments Following is a reconciliation of deposit and investment balances (including both pooled cash and investments as well as pension trust fund balances; see Note 3-B) as of June 30, 2007: Statement of Net Assets Cash and investments $ 58,301,284 Restricted cash and investments 36,343,662 Statement of Fiduciary Net Assets Pension trust funds: Cash and cash equivalents 7,332,979 Investments 526,486,084 Agency fund: Equity in pooled cash 176,549 Total $ 628,640,558 Deposits and Investments: Bank deposits: Checking/savings accounts $ 7,735,988 Certificates of deposit (due within one year) 35,609,776 Investments in securities and mutual funds: Pooled investments 51,311,563 Pension investments 533,819,063 Cash on hand 164,168 Total $ 628,640,558 The City chooses to disclose its pooled investments by specifically identifying each. As of year end, the City had the following pooled investments. Carrying Amount (Fair Value) Credit Rating Mutual and cash management funds (uncategorized as to risk) $ 51,311,563 -n/a- 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. CITY OF LANSING, MICHIGAN Notes To Financial Statements -40- 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, have been identified above for the City’s investments. 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, $35,833,653 of the City’s bank balance of $36,763,126 was exposed to custodial credit risk because it was uninsured and uncollateralized. The City’s investment policy does not specifically address this risk, although the City believes that due to the dollar amounts of cash deposits and the limits of FDIC insurance, it is impractical to insure all bank deposits. As a result, the City evaluates each financial institution with which it deposits City funds and assesses the level of risk of each institution; only those institutions with an acceptable estimated risk level are used as depositories. Custodial Credit Risk – Investments. For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. State law does not require and the City does not have a policy for investment custodial credit risk. On the investments listed above, there is no custodial credit risk, as these investments are uncategorized as to credit risk. Concentration of Credit Risk. State law limits allowable investments but does not limit concentration of credit risk as identified in the list of authorized investments in the summary of significant accounting policies. The City’s investment policy does not have specific limits in excess of state law on concentration of credit risk. All investments held at year end are reported above. 3-B. Deposits, Investments and Securities Lending – Pension Trust Funds The deposits and investments of the City’s pension 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 deposits and investments are presented separately. Deposits - The pension trust funds do not maintain any checking or other demand/time deposit accounts. Amounts reported as cash and cash equivalents in the statement of plan net assets are composed entirely of short-term investments in money market accounts. CITY OF LANSING, MICHIGAN Notes To Financial Statements -41- 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 investments as of June 30, 2007: Employees' Police Money Employees' and Fire Purchase Retiree Retirement Retirement Pension Health Care System System Plan VEBA Totals Investments at fair value, as determined by quoted market price: U.S. treasuries: Not on securities loan 396,356$ 804,465$ -$ -$ 1,200,821$ On securities loan 7,108,602 9,729,655 - - 16,838,257 U.S. agencies: Not on securities loan 30,926,855 39,050,744 - - 69,977,599 On securities loan 1,315,967 1,146,818 - - 2,462,785 Domestic corporate securities: Not on securities loan - 1,335,615 - - 1,335,615 Collateralized mortgage obligations 377,917 505,686 - - 883,603 Domestic equities: Not on securities loan 7,385,139 13,563,123 - - 20,948,262 On securities loan 12,462,832 18,241,547 - - 30,704,379 Real estate investment funds 12,171,000 16,896,000 - - 29,067,000 International equity mutual funds 22,939,000 32,740,000 - - 55,679,000 Domestic equity mutual funds 80,349,210 121,253,788 2,380,117 3,098,993 207,082,108 Domestic debt securities mutual funds 40,815,556 46,381,878 - 3,109,221 90,306,655 Money market funds 3,348,877 3,984,102 - - 7,332,979 Total investments 219,597,311$ 305,633,421$ 2,380,117$ 6,208,214$ 533,819,063$ CITY OF LANSING, MICHIGAN Notes To Financial Statements -42- 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 investments were rated by Standard & Poor’s as follows: Employees' Police Money Employees' and Fire Purchase Retiree Retirement Retirement Pension Health Care System System Plan VEBA Totals AAA 10,851,066$ 14,373,617$ -$ -$ 25,224,683$ AA- 40,815,556 46,381,878 - - 87,197,434 Not rated 30,599,752 39,319,837 - 1,796,495 71,716,084 Assets not subject to credit risk 137,330,937 205,558,089 2,380,117 4,411,719 349,680,862 219,597,311$ 305,633,421$ 2,380,117$ 6,208,214$ 533,819,063$ 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 are not subject to custodial credit risk. CITY OF LANSING, MICHIGAN Notes To Financial Statements -43- Concentration of Credit Risk. At June 30, 2007, the pension investment portfolio was concentrated as follows: Police Employees' and Fire Retirement Retirement Investment Type Issuer System System U.S. Agencies FHLMC 7.5% 6.4% U.S. Agencies FNMA 6.1% 6.0% The City’s pension investment policies require diversification of fixed income securities; however, they do not specify percentages of dollar amounts by industry or issuer. Interest Rate Risk. As of June 30, 2007, maturities of the City’s pension debt securities were as follows: Investment Maturities (Fair Value) Less than More than 1 year 1 - 5 years 6 - 10 years 10 years Total Employees' Retirement System: U.S. treasuries 789,445$ 328,994$ 3,843,016$ 2,543,503$ 7,504,958$ U.S. agencies 475,811 2,536,060 9,376,906 19,854,045 32,242,822 Collateralized mortgage obligations - - - 377,917 377,917 1,265,256$ 2,865,054$ 13,219,922$ 22,775,465$ 40,125,697$ Police and Fire Retirement System: U.S. treasuries 869,388$ 508,446$ 6,182,442$ 2,973,844$ 10,534,120$ U.S. agencies 13,551 4,247,270 12,326,558 23,610,183 40,197,562 Domestic corporate securities - 1,184,300 151,315 - 1,335,615 Collateralized mortgage obligations - - - 505,686 505,686 882,939$ 5,940,016$ 18,660,315$ 27,089,713$ 52,572,983$ 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%. CITY OF LANSING, MICHIGAN Notes To Financial Statements -44- Securities Lending. Under contracts approved by the City, the pension 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 funds’ custodial banks manage the securities lending programs and receive cash as collateral. The collateral securities cannot be pledged or sold by the City unless the borrower defaults. Collateral cash is initially pledged at 100 percent of the fair value of the securities lent, and may not fall below 95 percent of the market value of the loaned security during the term of the loan. At all times, collateral cannot be more than $100,000 less than the market value of the loaned security. There are no restrictions on the amount of securities that can be loaned. Securities on loan at year-end are classified in the preceding schedule of custodial credit risk according to the category for the collateral received on the securities lent. At year-end, the pension trust funds have no credit risk exposure to borrowers because the amounts the City owes the borrowers exceed the amounts the borrowers owe the City. The contract with the pension 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. 3-C. Receivables Receivables are comprised of the following: Business- Governmental Type Activities Activities Accounts receivable, net $ 12,672,659 $ 19,604,698 Taxes receivable 3,970,867 - Special assessments receivable 1,070,189 - Loans receivable 1,407,060 - Accrued interest receivable 1,761,353 402,465 Due from other governments 9,499,563 - Due from component units 232,478 Lease receivable - 23,531,872 $ 30,614,169 $ 43,539,035 Amount not expected to be collected within one year $ 3,787,315 $ 21,039,103 CITY OF LANSING, MICHIGAN Notes To Financial Statements -45- 3-D. Capital Assets Capital assets activity for the year ended June 30, 2007, was as follows: Primary government Beginning Ending Balance Increases Decreases Balance Governmental activities Capital assets, not being depreciated: Land 24,590,068$ -$ -$ 24,590,068$ Construction in progress 9,540,812 12,946,946 (7,327,876) 15,159,882 Total capital assets not being depreciated 34,130,880 12,946,946 (7,327,876) 39,749,950 Capital assets, being depreciated: Land improvements 8,822,132 171,437 - 8,993,569 Equipment and vehicles 37,160,323 3,445,491 (815,989) 39,789,825 Buildings 88,870,733 3,785,900 (36,359) 92,620,274 Infrastructure 315,832,245 10,186,089 (13,179,571) 312,838,763 Total capital assets being depreciated 450,685,433 17,588,917 (14,031,919) 454,242,431 Less accumulated depreciation for: Land improvements (4,338,361) (444,359) - (4,782,720) Equipment and vehicles (29,916,363) (2,473,174) 809,542 (31,579,995) Buildings (41,809,361) (2,762,281) 26,997 (44,544,645) Infrastructure (192,462,980) (8,734,421) 9,488,744 (191,708,657) Total accumulated depreciation (268,527,065) (14,414,235) 10,325,283 (272,616,017) Total capital assets, being depreciated, net 182,158,368 3,174,682 (3,706,636) 181,626,414 Governmental activities capital assets, net 216,289,248$ 16,121,628$ (11,034,512)$ 221,376,364$ CITY OF LANSING, MICHIGAN Notes To Financial Statements -46- Beginning Ending Balance Increases Decreases Balance Business-type activities Capital assets, not being depreciated: Land 13,889,542$ -$ -$ 13,889,542$ Construction in progress 65,101,601 26,441,063 (49,370,968) 42,171,696 Total capital assets not being depreciated 78,991,143 26,441,063 (49,370,968) 56,061,238 Capital assets, being depreciated: Land improvements 21,461,837 1,743,986 - 23,205,823 Equipmnet and vehicles 5,367,503 198,630 (16,700) 5,549,433 Buildings 193,907,450 1,348,466 - 195,255,916 Sewers 178,492,204 46,521,042 - 225,013,246 Total capital assets being depreciated 399,228,994 49,812,124 (16,700) 449,024,418 Less accumulated depreciation for: Land improvements (8,159,716) (523,868) - (8,683,584) Equipment and vehicles (4,358,316) (317,195) 16,700 (4,658,811) Buildings (86,508,850) (4,846,376) - (91,355,226) Sewers (36,652,617) (4,637,108) - (41,289,725) Total accumulated depreciation (135,679,499) (10,324,547) 16,700 (145,987,346) Total capital assets, being depreciated, net 263,549,495 39,487,577 - 303,037,072 Business-type activities capital assets, net 342,540,638$ 65,928,640$ (49,370,968)$ 359,098,310$ Depreciation expense was charged to functions/programs of the primary government as follows: Governmental activities: General government 837,136$ Public safety 692,080 Public works 8,750,583 Recreation 1,191,527 Community development 1,304,592 Internal service 1,638,317 Total depreciation expense - governmental activities 14,414,235$ Business-type activities: Sewage disposal system 7,441,441$ Potter Park Zoo 397,796 Golf 122,545 Municipal parking system 2,315,526 Other 47,239 Total depreciation expense - business-type activities 10,324,547$ CITY OF LANSING, MICHIGAN Notes To Financial Statements -47- 3-E. Payables Accounts payable and accrued liabilities are comprised of the following: Business- Governmental Type Activities Activities Accounts payable $ 8,292,585 $ 7,377,082 Deposits payable 205,339 47,795 Accrued payroll 2,111,954 440,653 Contract retainage payable 2,364,336 - Indemnity bonds 10,890 - Due to other governments 1,689,300 125,089 Other 1,021,078 - $ 15,695,482 $ 7,990,619 3-F. Interfund Receivables, Payables and Transfers At June 30, 2007, amounts due to/due from other funds were as follows: Due From Nonmajor Sewage Municipal General Governmental Disposal Parking Fund Funds System System Total Due to: General Fund -$ 806$ 15,610,204$ 649$ 15,611,659$ Nonmajor governmental funds 3 212,209 - - 212,212 Sewage Disposal System 5,008,018 - - - 5,008,018 Internal service funds 10,000 - - - 10,000 5,018,021$ 213,015$ 15,610,204$ 649$ 20,841,889$ The above balances generally resulted from a time lag between the dates that interfund goods and services are provided or reimbursable expenditures occur, transactions are recorded in the accounting system, and payments between funds are made. CITY OF LANSING, MICHIGAN Notes To Financial Statements -48- At June 30, 2007, advances to/due from other funds were as follows: Advances To Advances From Other Funds Other Funds General Fund 474,997$ -$ Municipal Parking System - 192,439 Nonmajor governmental funds 192,439 474,997 667,436$ 667,436$ In addition, at June 30, 2007, the following interfund receivables/payables were reported for funds with negative equity in pooled cash and investments: Interfund Interfund Receivable Payable General Fund -$ 14,681,304$ Nonmajor governmental funds 13,255,411 3,107,156 Nonmajor enterprise funds - 367,135 Internal service funds 4,900,184 - 18,155,595$ 18,155,595$ For the year then ended, interfund transfers consisted of the following: Transfer To Nonmajor Sewage Nonmajor Internal General Governmental Disposal Enterprise Service Fund Funds System Funds Funds Total Transfer From General Fund -$ 3,886,901$ 248,117$ 2,830,457$ 162,000$ 7,127,475$ Nonmajor governmental funds 318,000 2,383,569 - 339,572 - 3,041,141 Sewage Disposal System 300,000 - - - - 300,000 Nonmajor enterprise funds - 19,789 - - - 19,789 - 618,000$ 6,290,259$ 248,117$ 3,170,029$ 162,000$ 10,488,405$ Transfers are used to: (1) move revenues from the fund that is required to collect them to the fund that is required or allowed to expend them; (2) move receipts restricted to or allowed for debt service from the funds collecting the receipts to the debt service fund as debt service payments become due; and (3) use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. CITY OF LANSING, MICHIGAN Notes To Financial Statements -49- 3-G. Long-term Debt General obligation bonds. The government issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds are direct obligations and pledge the full faith and credit of the government. These bonds are issued as 10 to 30-year serial bonds with varying amounts of principal maturing each year. General obligation bonds currently outstanding are as follows: Interest Original Rate Amount Amount General obligation bonds Governmental activities 1996 Unlimited Tax Refunding Bond 5.00% 10,800,000$ 2,880,000$ 1999 Fire Station Unlimited Tax Bond 5.00%-5.70% 3,000,000 510,000 2001 Fire Station Unlimited Tax Bond 4.00%-5.00% 4,000,000 3,325,000 2006 Lansing Center Limited Tax Bonds 3.50%-4.30% 4,000,000 3,820,000 2006 Michigan Transportation Fund Limited Tax Bonds 3.50%-3.60% 1,600,000 1,320,000 2005 Building Authority Refunding Bonds 3.50%-5.00% 1,470,000 1,470,000 2007 Michigan Transportation Fund Limited Tax Bonds 3.625%-5.00% 1,137,600 1,137,600 2007 Michigan Transportation Fund Limited Tax Bonds 3.625%-5.00% 3,602,400 3,602,400 2007 Fire Station Refunding Bonds 3.625%-5.00% 1,780,000 1,780,000 31,390,000$ 19,845,000$ Business-type activities 1990 Building Authority Municipal Parking System Limited Tax Bond 0.00% 64,635,000$ 33,125,000$ 2003 Building Authority A Municipal Parking System Limited Tax Bond 3.00%-4.35% 10,340,000 2,485,000 2003 Building Authority B Municipal Parking System Taxable Bond 3.85%-6.25% 8,660,000 8,230,000 2005 Building Authority Refunding Bonds 3.50-5.00% 15,975,000 14,485,000 2007 Building Authority Refunding Bonds 3.625%-5.00% 7,965,000 7,965,000 1996 Building Authority Golf Course Limited Tax Bond 3.80%-5.70% 1,300,000 835,000 1992 Limited Tax Sewer Bond - 5005-01 2.50% 7,128,800 2,815,000 1993 Limited Tax Sewer Bond - 5005-02 2.50% 8,150,050 3,520,000 1994 Limited Tax Sewer Bond - 5005-03 2.50% 3,234,722 1,550,000 1994 Limited Tax Sewer Bond - 5005-04 2.00% 3,727,138 1,642,138 1994 Limited Tax Sewer Bond - 5005-05 2.25% 515,969 200,000 1994 Limited Tax Sewer Bond - 5005-06 2.25% 7,595,611 3,425,000 1996 Limited Tax Sewer Bond - 5005-07 2.25% 3,365,073 1,845,073 1996 Limited Tax Sewer Bond - 5005-08 2.25% 3,995,000 2,415,000 1997 Limited Tax Sewer Bond - 5005-09 2.25% 4,746,780 3,026,780 1998 Limited Tax Sewer Bond - 5005-10 2.25% 10,539,950 7,249,950 1999 Limited Tax Sewer Bond - 5005-11 2.50% 10,120,000 7,135,000 2000 Limited Tax Sewer Bond - 5005-12 2.50% 9,447,830 6,992,830 2001 Limited Tax Sewer Bond - 5005-13 2.50% 10,573,046 8,338,046 2002 Limited Tax Sewer Bond - 5005-14 2.50% 13,416,816 11,781,816 2003 Limited Tax Sewer Bond - 5005-15 2.50% 10,259,826 9,439,826 2004 Limited Tax Sewer Bond - 5005-16 2.13% 3,070,277 2,880,277 2005 Limited Tax Sewer Bond - 5005-17 2.13% 4,739,023 7,676,646 2005 Limited Tax Sewer Bond - 5005-18 1.63% 10,600,905 10,600,905 2006 Limited Tax Sewer Bond - 5005-19 1.63% 15,127,072 15,127,072 2007 Limited Tax Sewer Bond - 5005-20 1.63% 5,391,055 5,391,055 254,619,943$ 180,177,414$ CITY OF LANSING, MICHIGAN Notes To Financial Statements -50- During the year ended June 30, 2007, the City issued $1,780,000 of general obligation bonds to provide resources to refund $1,725,000 of the 1999 Fire Station Unlimited Tax Bonds. The proceeds of the refunding were placed in an irrevocable trust to make future debt payments on the refunded bonds. As a result, the refunded bonds are considered to be defeased and the liability has been removed from the statement of net assets. The refunding was undertaken to reduce future debt service payments by $88,531 and resulted in an economic gain of $69,670. During the year ended June 30, 2007, the Building Authority issued $7,965,000 of general obligation bonds to provide resources to refund $7,485,000 of the 2003 Building Authority A Municipal Parking System Limited Tax Bonds. The proceeds of the refunding were placed in an irrevocable trust to make future debt payments on the refunded bonds. As a result, the refunded bonds are considered to be defeased and the liability has been removed from the statement of net assets. The refunding was undertaken to reduce future debt service payments by $397,334 and resulted in an economic gain of $220,947. At year end, defeased bonds outstanding consisted of $1,725,000 of the 1999 Fire Station Unlimited Tax Bonds, which are scheduled to be repaid by the escrow agent on May 1, 2010, and $7,485,000 of the 2003 Building Authority A Municipal Parking System Limited Tax Bonds, which are scheduled to be paid by the escrow agent on June 1, 2013. Special assessment bonds. The City also issues bonds to finance certain public improvements that benefit specific districts. These districts are special assessed, at least in part, for the cost of the improvements. Under Michigan law, the City is secondarily liable for repayment of these bonds. Special assessment bonds outstanding at year-end are as follows: Interest Original Rate Amount Amount Special assessment bonds Governmental activities 1990 Limited Tax Special Assessment Bond 5.00% 800,000$ 10,000$ Revenue bonds. The City also issues bonds where the income derived from the acquired or constructed assets is pledged to pay debt service. Revenue bonds outstanding at year-end are as follows: Interest Original Rate Amount Amount Revenue bonds Business-type activities 1998 Sewer Revenue & Refunding Bond 2.50% 26,415,000$ 6,140,000$ 2003 Sewer Revenue & Refunding Bond 2.50% 39,880,000 37,815,000 66,295,000$ 43,955,000$ CITY OF LANSING, MICHIGAN Notes To Financial Statements -51- Installment purchase agreements. The government enters into installment purchase agreements for equipment and related capital assets. Installment purchase agreements outstanding at year-end are as follows: Interest Original Rate Amount Amount Installment purchase agreements Governmental activities 2002 Lease Purchase Agreement - Computer Software 3.20% 1,500,000$ 320,000$ 2004 Lease Purchase Agreement - Roof and Fire Suppression 2.77% 570,000 370,805 1999 Lease Purchase Agreement - Stadium 5.20%-6.05% 11,000,000 2,960,000 2005 Lease Purchase Agreement - LEPFA Extractor and Wall 4.51% 392,046 275,875 2005 Lease Purchase Agreement - LEPFA Carpet 4.51% 126,418 105,618 2005 Lease Purchase Agreement - Income Tax Software 3.76% 430,000 309,338 2005 Lease Purchase Agreement - LEPFA Equipment 4.24% 81,500 71,376 2001 Lease Purchase Agreement - O&M Facility 5.35% 1,925,000 1,295,000 2006 Lease Purchase Agreement - Ambulances 4.23% 474,000 474,000 2006 Lease Purchase Agreement - Energy Efficiencies 4.20% 6,217,227 6,217,227 2006 Lease Purchase Agreement - Oldsmobile Park 6.86% 2,000,000 2,000,000 2007 Lease Purchase Agreement - Oldsmobile Park 5.72% 1,000,000 1,000,000 25,716,191$ 15,399,239$ Loans payable. The government has entered into loan agreements with the certain State agencies for program purposes. Loans payable at year-end are as follows: Interest Original Rate Amount Amount Loans payable Governmental activities 2004 Michigan Department of Transportation Loan 3.00% 1,266,000$ 1,272,049$ 2006 State Infrastructure Bank Loan 3.00% 500,000 500,000 1,766,000$ 1,772,049$ Business-type activities 2003 MEDC Loan 4.00% 4,180,000$ 4,180,000$ CITY OF LANSING, MICHIGAN Notes To Financial Statements -52- Debt service requirements to maturity for all installment debt of the City are as follows: Year Ended Governmental Activities Business-Type Activities June 30 Principal Interest Total Principal Interest Total 2008 4,793,236$ 1,704,677$ 6,497,913$ 14,734,472$ 5,915,859$ 20,650,331$ 2009 4,714,633 1,478,931 6,193,564 15,577,544 5,852,086 21,429,630 2010 3,239,720 1,255,017 4,494,737 16,915,731 5,537,532 22,453,263 2011 3,187,958 1,106,719 4,294,677 17,259,048 5,154,573 22,413,621 2012 2,873,824 965,572 3,839,396 17,452,502 4,765,644 22,218,146 2013-2017 11,458,465 2,953,982 14,412,447 71,377,759 17,998,392 89,376,151 2018-2022 6,758,452 815,092 7,573,544 47,727,677 9,856,434 57,584,111 2023-2027 - - - 21,210,964 3,718,812 24,929,776 2028-2032 - - - 5,189,694 576,352 5,766,046 2033-2037 - - - 867,023 90,864 957,887 37,026,288$ 10,279,990$ 47,306,278$ 228,312,414$ 59,466,548$ 287,778,962$ CITY OF LANSING, MICHIGAN Notes To Financial Statements -53- Changes in Long-Term Debt. Long-term liability activity for the year ended June 30, 2007, was as follows: Beginning Ending Due Within Balance Additions Reductions Balance One Year Governmental activities General obligation bonds 17,245,000$ 6,520,000$ 3,920,000$ 19,845,000$ 2,720,000$ Special assessment bonds 25,000 - 15,000 10,000 10,000 Installment purchase agreements 7,351,126 9,691,227 1,643,114 15,399,239 1,826,009 Loans payable 1,409,844 500,000 137,795 1,772,049 237,227 Subtotal 26,030,970 16,711,227 5,715,909 37,026,288 4,793,236 Compensated absences 10,349,272 6,541,849 6,833,381 10,057,740 6,926,279 Accrued workers compensation 4,998,254 922,020 1,284,167 4,636,107 1,191,123 Accrued general liability claims 400,000 - - 400,000 - Add (deduct) deferred amounts: For issuance discounts (42,400) - (2,980) (39,420) - For issuance premiums 52,982 273,905 4,415 322,472 - On refunding (14,575) (70,055) (1,215) (83,415) - 41,774,503$ 24,378,946$ 13,833,677$ 52,319,772$ 12,910,638$ Business-type activities General obligation bonds 168,824,004$ 29,698,410$ 18,345,000$ 180,177,414$ 11,665,000$ Revenue bonds 47,905,000 - 3,950,000 43,955,000 2,830,000 Loans payable 4,180,000 - - 4,180,000 239,472 Subtotal 220,909,004 29,698,410 22,295,000 228,312,414 14,734,472 Compensated absences 1,152,595 630,758 684,236 1,099,117 670,062 Add (deduct) deferred amounts: For issuance discounts (10,562,698) (90,758) (1,965,372) (8,688,084) - For issuance premiums 926,703 - 43,103 883,600 - On refunding (2,893,518) (308,321) (305,316) (2,896,523) - 209,532,086$ 29,930,089$ 20,751,651$ 218,710,524$ 15,404,534$ For the governmental activities, compensated absences and other long-term debt are generally liquidated by the general fund. 3-H. 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. 3-I. Endowments For the year ended June 30, 2007, the net appreciation on investments available for of restricted endowments was $93,850. Under the terms of the endowments, and consistent with State statutes, the City is authorized to spend the net appreciation for the benefit of the cemetery and parks. The expendable portion of earnings has been transferred to other funds. The remaining non-expendable portion of the endowment is reported in restricted net assets. CITY OF LANSING, MICHIGAN Notes To Financial Statements -54- NOTE 4 – OTHER INFORMATION 4-A. Risk Management The City of Lansing is exposed to various risks of loss related to property loss, torts, errors and omissions and employee injuries. The City carries commercial insurance for claims relating to general liability, property, electronic data processing, boiler and machinery, police professional and errors and omissions. The City has not experienced settlements in excess of insurance coverage during the past three years. The City is uninsured for acts of nature and environmental clean-up costs. The City is self-insured for workers’ compensation costs. The City estimates the liability for workers’ compensation claims that have been incurred through the end of the fiscal year, including those claims that have been reported as well as those that have not yet been reported to the City. The current liability is accounted for in the General Fund, with long term liabilities accounted for in the Statement of Net Assets. The City has liability insurance coverage up to a maximum amount of $16,000,000 per occurrence with a $350,000 deductible. Changes in the estimated long-term liability as well as the total estimated cost of claims for the past two fiscal years were as follows: Fiscal Year Ended June 30, 2007 2006 Estimated liability, beginning of year $ 4,998,254 $ 3,619,376 Estimated claims incurred, including changes in estimates 922,020 2,722,794 Claims payments (1,284,167) (1,343,916) Estimated liability, end of year $ 4,636,107 $ 4,998,254 4-B. 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). CITY OF LANSING, MICHIGAN Notes To Financial Statements -55- The City is permitted by charter and state law to levy taxes up to $19.198 per $1,000 of assessed valuation for general operations other than the payment of principal and interest on long-term debt. The tax rate to finance general governmental services other than the payment of principal and interest on long-term debt for the year ended June 30, 2007 was $14.95 per $1,000 of taxable value. 4-C. Contingent Liabilities Amounts received or receivable from grantor agencies are subject to audit and potential adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although the government expects such amounts, if any, to be immaterial. The government is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the government’s counsel that resolution of these matters will not have a material adverse effect on the financial condition of the government. 4-D. Defined Benefit Pension Plans Employees’ Retirement System The City sponsors and administers the Employees’ Retirement System (the “Plan”), a single- employer, defined-benefit pension plan. It is accounted for as a separate pension trust fund. No stand-alone financial reports are issued. It covers general full-time employees of the City of Lansing and employees of the 54-A District Court. It does not include elected officials, who are members of the Employees’ Money Purchase Pension Plan, nor does it include police officers and firefighters, who are members of a separate City pension plan. The payroll for employees covered by the plan for the year ended December 31, 2006, was $31,943,723; the City’s total payroll was $58,915,953. Administration of the plan is funded through the General Fund. As of December 31, 2006, employee membership data was as follows: Retirees and beneficiaries currently receiving benefits and terminated employees entitled to benefits but not yet receiving them 831 Active members: Vested 265 Nonvested 380 645 CITY OF LANSING, MICHIGAN Notes To Financial Statements -56- Approximately 22.5% of the active membership may retire with a combination of age plus service equal to 65. All other members may retire at age 50 with 25 or more years of credited service or age 58 with 8 or more years of credited service. Members are vested after completing 8 years of credited service. For all members, annual regular retirement allowances are determined by multiplying total credited service times 1.6% to 2.8% times final average compensation. Final average compensation is the member's highest wages for two consecutive years during the last 10 years. Retirement options that provide for survivor benefits are available to members. The plan also provides death and disability benefits. If a member leaves employment or dies before vesting, accumulated member contributions plus interest are refunded to the member or designated beneficiary. Members who are vested and terminate their employment have the option of deferring retirement benefits until age 58 or withdrawing their contribution, thereby forfeiting any future benefits. Active members contribute between 1.7% and 7.25% of wages as determined by individual labor agreements. Chapter 292 of the City of Lansing's Code of Ordinances establishes benefit provisions and requires that the annuity and pension reserves (which are determined annually by the City’s actuary) not financed by member contributions shall be financed by annual appropriations. The City’s funding policy provides for periodic employer contributions at actuarially determined rates that expressed as percentages of annual covered payroll, are designed to accumulate sufficient assets to pay benefits when due. The normal cost and amortization payment for the year ended June 30, 2007, was determined using an entry age actuarial funding method. Unfunded actuarial accrued liabilities are being amortized as a level percent of payroll over an open period of 30 years. Contributions are recognized when due pursuant to formal commitments, as well as statutory or contractual requirements. The fund is accounted for in essentially the same manner as the Proprietary Funds and uses the full accrual method of accounting. Plan valuation assets are equal to the reported market value of assets except that only 20% of the difference between the mark-to-market rate of return and the 8% actuarial rate of return is recognized each year. This five year smoothing method reduces the fluctuation in the City’s computed contribution rate which might otherwise be caused by market value fluctuations. The entry-age actuarial cost method is used to determine plan liabilities. Significant actuarial assumptions used in determining the entry-age actuarial accrued liability include (a) a rate of return on investments of 8% per year compounded annually (b) projected salary increases of 4% attributable to inflation and 0% to 7% per year depending on age attributable to seniority/merit (c) assumption that benefits generally will increase $200 annually after age 60. During the year ended June 30, 2007, total contributions of $6,616,185 were made in accordance with actuarially determined requirements computed through an actuarial valuation performed as of December 31, 2005. The City contributed $5,230,666 (16.09% of projected valuation payroll), excluding contributions for health insurance; employees contributed $1,385,519 (4.78% of projected valuation payroll). The City’s contribution consisted of (a) $3,283,602 normal cost (10.10% of projected valuation payroll) and (b) $1,947,066 amortization of the unfunded actuarial accrued liability (5.99% of projected valuation payroll). CITY OF LANSING, MICHIGAN Notes To Financial Statements -57- At December 31, 2006, the unfunded actuarial accrued liability was determined as follows: Actuarial accrued liability for: Active participants (265 vested and 380 non-vested) $ 62,283,321 Retired participants and beneficiaries currently receiving benefits (783 recipients) 170,198,697 Vested terminated participants not yet receiving benefits (48) 2,300,543 Member benefit reserve 16,644,110 Total actuarial accrued liability 251,426,671 Actuarial value of assets (smoothed market value) * 208,765,182 Unfunded actuarial accrued liability $ 42,661,489 * Excluding reserve for health insurance The City had initially contributed the annual required contributions (“ARC”), and thus, has never actually had, or had need to report, a net pension obligation (“NPO”), as required under GASB Statement No. 27. Three-Year Trend Information (amounts in thousands) Annual Years Ended Pension Percentage Net Pension June 30, Cost (APC) Contributed Obligation 2005 $ 4,675 100% $ - 2006 4,900 100 - 2007 5,231 100 - Police and Fire Retirement System The City sponsors and administers the Police and Fire Retirement System (the “Plan”), a single- employer defined-benefit pension plan. It is accounted for as a separate pension trust fund. No stand-alone financial reports are issued. It covers all police officers and firefighters who are full- time employees of the City. The City’s payroll for employees covered by the plan for the year ended December 31, 2005, was $29,582,427, the City’s total payroll was $58,915,953. Administration of the plan is funded through the General Fund. CITY OF LANSING, MICHIGAN Notes To Financial Statements -58- As of December 31, 2006, employee membership data related to the plan was as follows: Retirees and beneficiaries currently receiving benefits and terminated employees entitled to benefits but not yet receiving them 641 Active members: Vested 256 Nonvested 198 454 Members may retire at any age with 25 or more years of credited service, or age 55 with 10 or more years of credited service. Members are vested after completing 10 years of credited service. Members are required to retire at age 70. Annual retirement allowances are determined by multiplying final average compensation by 3.2% for the first 25 years of credited service. The maximum allowance is 80% of final average compensation. Final average compensation is the member's highest wages for 2 consecutive years. When an employee who had retired subsequent to August 31, 1966, dies, the plan provides for an automatic pension to the retiree's spouse. This automatic pension is equal to 50% of the regular retirement benefit the employee had been receiving at time of death. Effective July 30, 1990, members may elect a reduced benefit, either 93% or 86% of the regular benefit, thereby increasing the spouse pension to 75% or 86% of the regular benefit, respectively. Alternately, members may elect a non-spousal beneficiary option. The plan provides death and disability benefits. If a member leaves employment or dies before vesting, accumulated member contributions plus interest are refunded to the member or designated beneficiary. Members who are vested and terminate their employment have the option of deferred retirement benefits until age 55 or withdrawing their contribution, thereby forfeiting any future benefits. Fire members are required to contribute 7.58% of their annual wages to the plan. Police supervisors are required to contribute 9.52% and police non-supervisors, 8.50%. Chapter 294 of the City of Lansing's Ordinance establishes benefit provisions and requires that the portion of the annuity and pension reserves (which are determined annually by the City’s actuary) not financed by member contributions shall be financed by annual appropriations. In addition to the payments under this plan, the City made payments from the General Fund to provide benefits for the beneficiaries of a prior pension plan. This prior plan was superseded by the present plan as of January 1, 1944. There were no payments made to beneficiaries under that plan. The City’s funding policy provides for periodic employer contributions at actuarially determined rates that, expressed as percentages of annual covered payroll, are designed to accumulate sufficient assets to pay benefits when due. The normal cost and amortization payment for the year ended June 30, 2007, was determined using an entry age actuarial funding method. Unfunded actuarial accrued liabilities are being amortized as a level percent of payroll over an open period of 30 years. CITY OF LANSING, MICHIGAN Notes To Financial Statements -59- Plan valuation assets are equal to the reported market value of assets except that only 20% of the difference between the mark-to-market rate of return and the 8% actuarial rate of return is recognized each year. This five year smoothing method reduces the fluctuation in the City’s computed contribution rate which might otherwise be caused by market value fluctuations. The entry-age actuarial cost method is used to determine plan liabilities. Significant actuarial assumptions used in determining the entry-age actuarial accrued liability include (a) a rate of return on investments of 8% per year compounded annually (b) projected salary increases of 4% attributable to inflation and .51 to 11.5% per year depending on age attributable to seniority/merit (c) assumption that benefits generally will increase $525 annually after retirement. During the year ended June 30, 2007, total contributions of $8,105,603 were made in accordance with actuarially determined requirements computed through an actuarial valuation performed as of December 31, 2005. The City contributed $5,385,960 (18.35% of projected valuation payroll), excluding contributions for health insurance; employees contributed $2,719,643 (9.47% of projected valuation payroll). The City’s contribution consisted of (a) $4,414,432 normal cost (15.04% of projected valuation payroll) and (b) $971,528 amortization of the unfunded actuarial accrued liability (3.31% of projected valuation payroll). At December 31, 2006, the assets in excess of actuarial accrued liability were determined as follows: Active participants (256 vested and 198 non-vested) $ 106,950,223 Retired participants and beneficiaries currently receiving benefits (623 recipients) 198,762,996 Vested terminated participants not yet receiving benefits (18) 2,479,428 Total actuarial accrued liability 308,192,647 Actuarial value of assets (smoothed market value) * 278,838,611 Unfunded Actuarial accrued liability $ 29,354,036 * Excluding reserve for health insurance The City had initially contributed the annual required contributions (“ARC”), and thus, has never actually had, or had a need to report, a net pension obligation (“NPO”), as required under GASB Statement No. 27. Significant actuarial assumptions used to compute contribution requirements were the same as those used to compute the standardized measure of the actuarial accrual liability. CITY OF LANSING, MICHIGAN Notes To Financial Statements -60- Three-Year Trend Information (amounts in thousands) Annual Years Ended Pension Percentage Net Pension June 30, Cost (APC) Contributed Obligation 2005 $ 3,334 100% $ - 2006 4,659 100 - 2007 5,386 100 - Employees’ Money Purchase Pension Plan The City of Lansing sponsors and contributes to the Employees’ Money Purchase Pension Plan (the “Plan”), which is a single-employer defined - contribution pension plan. Administration of the plan is funded by the General Fund. A defined contribution pension plan provides pension benefits in return for services rendered, provides an individual account for each participant, and specifies how contributions to the individual's account are to be determined instead of specifying the amount of benefits the individual is to receive. Under a defined contribution pension plan, the benefits a participant will receive depend solely on the amount contributed to the participant's account and the returns earned on investments of those contributions. As established by Chapter 292.30 of the City of Lansing's Code of Ordinances, this plan includes all elected officials hired subsequent to September 30, 1990. As of June 30, 2007, there were 10 active members in this plan. Contributions made by employees vest immediately, and contributions made by the City vest after three years of full-time employment. When employees terminate employment, they are entitled to their contributions and the City’s contributions if vesting requirements are satisfied. Employees may contribute up to 8% of their wages in 1% increments. The City contributes an amount equal to 6.0% of the employees’ wages for retirement benefits. During the year, the City’s required and actual contributions amounted to $20,146, which was approximately 6% of covered payroll of $335,752. There were no employee contributions. No pension provision changes occurred during the year that affected the required contributions to be made by the City. In addition, the plan does not issue stand-alone financial statements. CITY OF LANSING, MICHIGAN Notes To Financial Statements -61- Financial statements for individual pension plans Pension Net Assets Police Employees' Employees' and Fire Money Retiree Retirement Retirement Purchase Health Care System System Pension Plan VEBA Totals Assets Cash and cash equivalents 3,348,877$ 3,984,102$ -$ -$ 7,332,979$ Investments: U. S. Government obligations 40,125,697 51,237,368 - - 91,363,065 Corporate bonds - 1,335,615 - - 1,335,615 Common stocks 19,847,971 31,804,670 - - 51,652,641 Mutual funds 156,274,766 217,271,666 2,380,117 6,208,214 382,134,763 Contribution receivable - 2,333,258 3,096 - 2,336,354 Dividends and interest receivable 280,856 363,495 35,495 24,029 703,875 Total assets 219,878,167 308,330,174 2,418,708 6,232,243 536,859,292 Liabilities Accounts payable 1,727,231 292,784 - - 2,020,015 Net assets held in trust for: Pension benefits 207,932,757 294,973,489 2,418,708 - 505,324,954 Other postemployment benefits 10,218,179 13,063,901 - 6,232,243 29,514,323 Total net assets 218,150,936$ 308,037,390$ 2,418,708$ 6,232,243$ 534,839,277$ Changes in Pension Net Assets Additions Investment income: Net appreciation in fair value of investments 5,163,206$ 39,432,063$ -$ 361,318$ 44,956,587$ Interest income 24,158,966 3,225,836 394,297 561 27,779,660 Dividend income 150,406 265,047 - 238,568 654,021 Less investment expenses (749,937) (910,873) (3,634) - (1,664,444) Net investment income 28,722,641 42,012,073 390,663 600,447 71,725,824 Contributions: Employer 5,930,666 5,955,960 20,146 2,000,000 13,906,772 Plan members 1,385,519 2,719,643 - - 4,105,162 Total contributions 7,316,185 8,675,603 20,146 2,000,000 18,011,934 Total additions 36,038,826 50,687,676 410,809 2,600,447 89,737,758 Deductions Participant benefits 16,827,230 19,989,865 783,541 - 37,600,636 Administrative expense 30,287 19,604 - - 49,891 Total deductions 16,857,517 20,009,469 783,541 - 37,650,527 Net additions (deductions) to net assets held in trust 19,181,309 30,678,207 (372,732) 2,600,447 52,087,231 Net assets held in trust for pension benefits: Beginning of year 198,969,627 277,359,183 2,791,440 3,631,796 482,752,046 End of year 218,150,936$ 308,037,390$ 2,418,708$ 6,232,243$ 534,839,277$ CITY OF LANSING, MICHIGAN Notes To Financial Statements -62- 4-E. Postemployment Benefits The City of Lansing contributes to the Employees’ Retirement System, the Police and Fire Retirement System, and the Voluntary Beneficiary Association (VEBA), amounts to pre-fund post employment healthcare. In the Employees’ Retirement System and the Police and Fire Retirement System, these other postemployment benefits (OPEB) are set up as reserves in the pension plans, and their investments are commingled with the investments of the pension. Portfolio makeup is reported as a percentage of total pension plan assets. Earnings are calculated based on a seven year smoothed rate of return of the retirement systems. Eligible participants include any retirees who receive pension benefits under the respective pension plans. OPEB plan provisions are established and may be amended by the City Council, subject to the City’s various collective bargaining agreements. Voluntary Employees Beneficiary Association (VEBA). The City of Lansing Voluntary Employees Beneficiary Association (the “Plan”) is a single-employer defined benefit post employment healthcare plan established by the City to provide medical and healthcare benefits for retirees and their beneficiaries. Eligible participants include any retirees who receive pension benefits under one of the City’s pension plans. The Plan is funded by a trust agreement established pursuant to Section 501(c)(9) of the Internal Revenue Code that allows for the formation of a VEBA. During the year, the City contributed $2,000,000 to the plan. Employees’ Retirement System. The City provides postretirement 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). Depending on date hired, members are eligible to receive health care benefits with a minimum of 8 to 15 years of service and an age requirement ranging from none to age 58. 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 $88.50 per month for each covered retiree and dependent(s). The payments are charged to the Fringe Benefit Internal Service Fund of the City and are recognized as expenses as payments are made. During the year, payments for health care benefits were approximately $8,038,064 and the City contributed $700,000 to the Employees’ Retirement System. There were no significant changes in health benefits over the previous year. Police and Fire Retirement System. The City also provides postretirement health care benefits, in accordance with labor agreements, to full-time police officers and firefighters with a minimum of 15 years of service and an age requirement of 55 years. If service is 25 years or more, there is no age requirement. 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 $88.50 per month for each covered retiree and dependent(s). The payments are charged to the Fringe Benefit Internal Service Fund of the City and are recognized as expenses as payments are made. During the year, payments for health care benefits were approximately $7,808,111 and the City contributed $570,000 to the Police and Fire Retirement System to fund retiree healthcare. CITY OF LANSING, MICHIGAN Notes To Financial Statements -63- There were no significant changes in health benefits over the previous year. Plan valuation assets for the OPEB plans are equal to the reported market value of assets except that only 20% of the difference between the mark-to-market rate of return and the 8% actuarial rate of return is recognized each year. The entry-age actuarial cost method, with a 30 year amortization of unfunded accrued liabilities was used to determine the liabilities. The entry-age method is a stable method that is consistent with a level percentage of payroll financing. The actuarial accrued liability assumes a healthcare cost trend rate of 12% to 4%. At December 31, 2003 (the date of the most recent actuarial valuation), the assets in excess of actuarial accrued liability were determined as follows: Employees’ Police Retirement & Fire System Retirement & VEBA * System Actuarial accrued liability for: Active participants $ 53,263,192 $ 46,306,050 Retired participants and beneficiaries currently receiving benefits 106,953,713 116,047,597 Vested terminated participants not yet receiving benefits 7,745,460 1,585,311 Total actuarial accrued liability 167,962,365 163,938,958 Actuarial value of assets (smoothed market value) 8,098,496 9,793,954 Unfunded actuarial accrued liability $ 159,863,869 $ 154,145,004 Funded ratio 4.8% 6.0% Covered payroll $ 33,074,504 $ 28,645,339 UAAL as a % of covered payroll 483.3% 538.1% * - The Employees’ Retirement System and VEBA were combined on the actuarial valuation. 4-F. Subsequent Events On July 1, 2007 the City of Lansing entered into a lease agreement with Ingham County where the County took over operations of Potter Park Zoo. The City retained ownership of all real property, while the personal property was turned over to the County for use in the operations of the Zoo. On September 20, 2007 the City of Lansing entered into a $518,000 installment purchase contract for the installation of a new telephone system in City Hall and other City facilities. * * * * * * REQUIRED SUPPLEMENTARY INFORMATION City of Lansing Employees' Retirement System Required Supplementary Information (amounts in thousands) Schedule of Funding Progress Actuarial Actuarial UAAL as a Actuarial Value of Accrued Underfunded Funded Covered % of Covered Valuation Assets Liability AAL (UAAL) Ratio Payroll Payroll Date (A) (B) (B-A) (A/B) (C) ((B-A)/C) 12/31/1997 127,444$ 161,792$ 34,348$ 78.8% 18,332$ 187.4% 12/31/1998 143,268 170,775 27,507 83.9% 17,820 154.4% 12/31/1999 161,958 187,150 25,192 86.5% 19,312 130.4% 12/31/2000 177,855 198,396 20,541 89.6% 19,521 105.2% 12/31/2001 191,311 213,648 22,337 89.5% 20,282 110.1% 12/31/2002 192,920 215,405 22,485 89.6% 19,098 117.7% 12/31/2003 199,329 221,088 21,759 90.2% 30,579 71.2% 12/31/2004 206,200 231,389 25,189 89.1% 32,383 77.8% 12/31/2005 207,881 245,242 37,361 84.8% 30,851 121.1% 12/31/2006 208,765 251,427 42,662 83.0% 31,944 133.6% Schedule of Employer Contributions Year Ended Annual Required Percentage June 30 Contributions Contributed 1998 4,086$ 99.2% 1999 3,334 100.0% 2000 3,138 100.0% 2001 3,215 100.0% 2002 3,105 100.0% 2003 3,567 98.1% 2004 3,466 100.0% 2005 4,675 100.0% 2006 4,900 100.0% 2007 5,231 100.0% -64- City of Lansing Police and Fire Retirement System Required Supplementary Information (amounts in thousands) Schedule of Funding Progress Actuarial Actuarial Underfunded UAAL as a Actuarial Value of Accrued (Overfunded) Funded Covered % of Covered Valuation Assets Liability AAL (UAAL) Ratio Payroll Payroll Date (A) (B) (B-A) (A/B) (C) ((B-A)/C) 12/31/1996 172,830$ 191,074$ 18,244$ 90.5% 20,392$ 89.5% 12/31/1997 193,162 206,191 13,029 93.7% 22,419 58.1% 12/31/1998 217,011 218,533 1,522 99.3% 22,792 6.7% 12/31/1999 245,197 233,332 (11,865) 105.1% 24,352 -48.7% 12/31/2000 267,020 239,615 (27,405) 111.4% 24,830 -110.4% 12/31/2001 280,518 249,204 (31,314) 112.6% 25,751 -121.6% 12/31/2002 280,686 259,282 (21,404) 108.3% 26,152 -81.8% 12/31/2003 277,947 267,786 (10,161) 103.8% 26,484 -38.4% 12/31/2004 275,807 279,873 4,066 98.5% 27,754 14.7% 12/31/2005 273,421 290,299 16,878 94.2% 27,855 60.6% 12/31/2006 278,839 308,193 29,354 90.5% 29,582 99.2% Schedule of Employer Contributions Year Ended Annual Required Percentage June 30 Contributions Contributed 1998 4,252$ 99.0% 1999 4,380 99.4% 2000 4,063 100.0% 2001 3,561 100.0% 2002 2,665 100.0% 2003 2,637 100.0% 2004 3,287 99.6% 2005 3,334 100.3% 2006 4,659 100.0% 2007 5,386 100.0% -65- COMBINING and INDIVIDUAL FUND STATEMENTS and SCHEDULES City of Lansing Combining Balance Sheet - Nonmajor Governmental FundsJune 30, 2007 Special Debt Capital Revenue Service Projects Permanent Totals Assets Assets Cash and cash equivalents 59,383$ 26,716$ 6,328,164$ -$ 6,414,263$ Equity in pooled cash 3,181,800 121,568 13,923,517 1,250 17,228,135 Investments - - - 1,540,000 1,540,000 Accounts receivable, net 2,788,774 - - - 2,788,774 Special assessments receivable - 1,369 1,068,820 - 1,070,189 Loans receivable 1,407,060 - - - 1,407,060 Accrued interest receivable 1,663,117 - 19,368 78,868 1,761,353 Due from other funds 212,209 3 - - 212,212 Interfund receivable 13,255,411 - - - 13,255,411 Advances to other funds - - 192,439 - 192,439 Due from other governments 4,349,722 - 1,070 - 4,350,792 Total assets 26,917,476$ 149,656$ 21,533,378$ 1,620,118$ 50,220,628$ Liabilities and Fund Balances Liabilities Accounts payable 1,740,088$ -$ 956,895$ -$ 2,696,983$ Deposits payable 205,339 - - - 205,339 Accrued payroll 300,869 - 1,903 - 302,772 Indemnity bonds 10,890 - - - 10,890 Due to other funds - - 213,015 - 213,015 Interfund payable 3,080,208 3,769 - 23,179 3,107,156 Advances from other funds - - 474,997 - 474,997 Due to other governments 321,621 - - - 321,621 Deferred revenue 4,383,415 1,369 715,769 - 5,100,553 Total liabilities 10,042,430 5,138 2,362,579 23,179 12,433,326 Fund balances Reserved for advances - - 192,439 - 192,439 Reserved for encumbrances 2,284,094 - - - 2,284,094 Reserved for long-term receivables 67,806 - - - 67,806 Unreserved: Designated for subsequent years' expenditures 6,976,602 - - - 6,976,602 Undesignated 7,546,544 144,518 18,978,360 1,596,939 28,266,361 Total fund balances 16,875,046 144,518 19,170,799 1,596,939 37,787,302 Total liabilities and fund balances 26,917,476$ 149,656$ 21,533,378$ 1,620,118$ 50,220,628$ -66- City of Lansing Combining Statement of Revenues, Expenditures andChanges in Fund Balances - Nonmajor Governmental FundsFor the Year Ended June 30, 2007 Special Debt Capital Revenue Service Projects Permanent Totals Revenues Taxes and special assessments 417,080$ 2,109,248$ 310,823$ -$ 2,837,151$ Intergovernmental 17,356,171 - - - 17,356,171 Charges for services 8,023,165 - 38,837 - 8,062,002 Fines and forfeits 436,947 - - - 436,947 Interest 520,132 93,747 490,248 93,850 1,197,977 Contributions 14,500 - - - 14,500 Donations from private sources - - 114,954 - 114,954 Other revenues 798,659 - - - 798,659 Total revenues 27,566,654 2,202,995 954,862 93,850 30,818,361 Expenditures Current expenditures: General government 2,591,071 - - - 2,591,071 Public safety 5,704,933 - - - 5,704,933 Highways and streets 8,478,914 - - - 8,478,914 Recreation and culture 65,912 - - - 65,912 Other functions 7,229,444 - - - 7,229,444 Debt service: Principal 1,377,794 1,750,000 - - 3,127,794 Interest 427,317 587,910 - - 1,015,227 Issuance costs - 50,471 - - 50,471 Capital outlay 6,723,191 - 13,278,468 - 20,001,659 Total expenditures 32,598,576 2,388,381 13,278,468 - 48,265,425 Revenues over (under) expenditures (5,031,922) (185,386) (12,323,606) 93,850 (17,447,064) Other financing sources (uses) Transfers in 3,988,321 186,465 2,095,684 19,789 6,290,259 Transfers out (1,493,177) - (1,454,114) (93,850) (3,041,141) Issuance of long-term debt - 1,780,000 14,931,227 - 16,711,227 Bond premium - 69,668 204,237 - 273,905 Payment to escrow agent - (1,795,055) - - (1,795,055) Total other financing sources (uses) 2,495,144 241,078 15,777,034 (74,061) 18,439,195 Net change in fund balances (2,536,778) 55,692 3,453,428 19,789 992,131 Fund balances, beginning of year 19,411,824 88,826 15,717,371 1,577,150 36,795,171 Fund balances, end of year 16,875,046$ 144,518$ 19,170,799$ 1,596,939$ 37,787,302$ -67- Nonmajor Special Revenue Funds Major Streets Fund – This fund accounts for revenues received from the State of Michigan for the City's share of state gasoline and weight taxes, which is used for maintenance of major streets. Local Streets Fund – This fund accounts for revenues received from the State of Michigan for the City's share of state gasoline and weight taxes, which is used for maintenance of local streets. Budget Stabilization Fund – This fund is used to account for funds set aside under the provisions of Public Act 30 of 1978. Funds set aside are to be determined by the City Council on an annual basis in any year where actual General Fund revenues exceed actual expenditures. Drug Law Enforcement Fund – This fund accounts for revenues set aside for drug law enforcement under the provisions of State of Michigan Public Act 135 of 1985, as amended. State and Federal Programs Fund – This fund accounts for all revenues received from miscellaneous grants and local contributions. These revenues are used for projects as detailed in individual grant applications. Community Development Block Grant Program Fund – This fund accounts for revenues received from the Department of Housing and Urban Development. These revenues are restricted to accomplishing the various objectives of Community Development Block Grant Programs, within specific target areas. Stadium Fund – This fund accounts for the City's share of revenues received from events held at Oldsmobile Park, the City's baseball stadium. The revenues are used for stadium expenditures. Principal Shopping District Fund – This fund accounts for assessments received from businesses located in the district. The revenues are used for special events and maintenance of the district. 911 Communications Center Fund – This fund accounts for the operations of the county-wide 911 communications center. Revenues received are from the County for actual expenditures incurred. Building Department Fund – This fund accounts for revenues and expenditures resulting from the enforcement of the State Construction Code Act of 1999 (PA 245 of 1999). Parks Department Fund – This fund accounts for contributions and transfers which are restricted for park expenditures. City of Lansing Combining Balance Sheet - Nonmajor Special Revenue Funds June 30, 2007 State and Major Local Budget Drug Law Federal Streets Streets Stabilization Enforcement Programs Assets Assets Cash and cash equivalents -$ -$ -$ 53,920$ -$ Equity in pooled cash - 1,321,304 - 1,062,702 174,369 Accounts receivable - - - - 5,131 Loans receivable - - - - - Accrued interest receivable - - - - - Due from other funds 83,092 129,117 - - - Interfund receivable 7,527,352 - 5,728,059 - - Due from other governments 1,176,266 376,748 - - 2,226,882 Total assets 8,786,710$ 1,827,169$ 5,728,059$ 1,116,622$ 2,406,382$ Liabilities and Fund Balances Liabilities Accounts payable 320,129$ 422,840$ -$ 53,188$ 814,018$ Deposits payable - - - 198,289 - Accrued payroll 69,816 80,482 - 2,719 16,249 Indemnity bonds 8,740 2,150 - - - Interfund payable - - - - - Due to other governments - - - 321,621 - Deferred revenue - - - - 1,513,238 Total liabilities 398,685 505,472 - 575,817 2,343,505 Fund balances Reserved for encumbrances 2,241,299 33,515 - 9,280 - Reserved for long-term receivables - 67,806 - - - Unreserved: Designated for subsequent years' expenditures 6,146,726 652,575 - 4,500 - Undesignated - 567,801 5,728,059 527,025 62,877 Total fund balances 8,388,025 1,321,697 5,728,059 540,805 62,877 Total liabilities and fund balances 8,786,710$ 1,827,169$ 5,728,059$ 1,116,622$ 2,406,382$ -68- Community Development Principal 911 Block Grant Shopping Communications Building Parks Program Stadium District Center Department Department Totals -$ -$ -$ -$ 5,463$ -$ 59,383$ - - 43,205 - 37,995 542,225 3,181,800 - 121,077 - 2,658,573 3,993 - 2,788,774 1,407,060 - - - - - 1,407,060 1,663,117 - - - - - 1,663,117 - - - - - - 212,209 - - - - - - 13,255,411 569,826 - - - - - 4,349,722 3,640,003$ 121,077$ 43,205$ 2,658,573$ 47,451$ 542,225$ 26,917,476$ 97,552$ -$ 16,616$ 6,466$ 3,735$ 5,544$ 1,740,088$ - - - - 7,050 - 205,339 25,863 - 4,964 67,209 33,567 - 300,869 - - - - - - 10,890 646,411 8,601 - 2,425,196 - - 3,080,208 - - - - - - 321,621 2,870,177 - - - - - 4,383,415 3,640,003 8,601 21,580 2,498,871 44,352 5,544 10,042,430 - - - - - - 2,284,094 - - - - - - 67,806 - - 10,000 159,702 3,099 - 6,976,602 - 112,476 11,625 - - 536,681 7,546,544 - 112,476 21,625 159,702 3,099 536,681 16,875,046 3,640,003$ 121,077$ 43,205$ 2,658,573$ 47,451$ 542,225$ 26,917,476$ -69- City of Lansing Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Special Revenue Funds For the Year Ended June 30, 2007 State and Major Local Budget Drug Law Federal Streets Streets Stabilization Enforcement Programs Revenues Taxes and special assessments -$ -$ -$ -$ -$ Intergovernmental 7,017,363 1,881,464 - (265,425) 6,823,442 Charges for services 372,883 578,453 - - 2,280 Fines and forfeits - - - 436,947 - Interest 330,286 75,360 - 52,235 6,744 Contributions - - - 4,500 - Other 433,070 - - - - Total revenues 8,153,602 2,535,277 - 228,257 6,832,466 Expenditures Current expenditures: General government - - - - - Public safety - - - 689,885 - Highways and streets 4,989,642 3,489,272 - - - Recreation and culture - - - - - Other functions - - - - 7,229,444 Debt service: Principal 417,794 - - - - Interest 100,954 - - - - Capital outlay 2,431,320 2,005,016 - - - Total expenditures 7,939,710 5,494,288 - 689,885 7,229,444 Revenues over (under) expenditures 213,892 (2,959,011) - (461,628) (396,978) Other financing sources (uses) Transfers in 844,005 1,857,512 - - 459,855 Transfers out (1,473,177) - - (20,000) - Total other financing sources (uses) (629,172) 1,857,512 - (20,000) 459,855 Net change in fund balances (415,280) (1,101,499) - (481,628) 62,877 Fund balances, beginning of year 8,803,305 2,423,196 5,728,059 1,022,433 - Fund balances, end of year 8,388,025$ 1,321,697$ 5,728,059$ 540,805$ 62,877$ -70- Community Development Principal 911 Block Grant Shopping Communications Building Parks Program Stadium District Center Department Department Totals -$ -$ 417,080$ -$ -$ -$ 417,080$ 1,899,327 - - - - - 17,356,171 - 654,156 1,200 4,996,598 1,417,595 - 8,023,165 - - - - - - 436,947 23,762 5,775 4,144 - - 21,826 520,132 - - 10,000 - - - 14,500 363,766 - 1,823 - - - 798,659 2,286,855 659,931 434,247 4,996,598 1,417,595 21,826 27,566,654 - - 503,231 - 2,087,840 - 2,591,071 - - - 5,015,048 - - 5,704,933 - - - - - - 8,478,914 - 57,744 - - - 8,168 65,912 - - - - - - 7,229,444 - 960,000 - - - - 1,377,794 - 326,363 - - - - 427,317 2,286,855 - - - - - 6,723,191 2,286,855 1,344,107 503,231 5,015,048 2,087,840 8,168 32,598,576 - (684,176) (68,984) (18,450) (670,245) 13,658 (5,031,922) - 641,000 42,075 22,800 121,022 52 3,988,321 - - - - - - (1,493,177) - 641,000 42,075 22,800 121,022 52 2,495,144 - (43,176) (26,909) 4,350 (549,223) 13,710 (2,536,778) - 155,652 48,534 155,352 552,322 522,971 19,411,824 -$ 112,476$ 21,625$ 159,702$ 3,099$ 536,681$ 16,875,046$ -71- City of Lansing Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - Nonmajor Special Revenue Funds For the Year Ended June 30, 2007 Major Streets Variance with Budget Actual Budget Revenues Taxes and special assessments -$ -$ -$ Intergovernmental 7,031,343 7,017,363 13,980 Charges for services 300,000 372,883 (72,883) Fines and forfeits - - - Interest 30,000 330,286 (300,286) Contributions - - - Other 398,000 433,070 (35,070) Total revenues 7,759,343 8,153,602 (394,259) Expenditures Current expenditures: General government - - - Public safety - - - Highways and streets 7,547,321 4,989,642 2,557,679 Recreation and culture - - - Other functions - - - Debt service: Principal 417,795 417,794 1 Interest 101,704 100,954 750 Capital outlay 7,910,569 2,431,320 5,479,249 Total expenditures 15,977,389 7,939,710 8,037,679 Revenues over (under) expenditures (8,218,046) 213,892 (8,431,938) Other financing sources (uses) Transfers in 1,663,091 844,005 819,086 Transfers out (1,473,177) (1,473,177) - Total other financing sources (uses) 189,914 (629,172) 819,086 Net change in fund balances (8,028,132) (415,280) (7,612,852) Fund balances, beginning of year 8,803,305 8,803,305 - Fund balances, end of year 775,173$ 8,388,025$ (7,612,852)$ -72- Local Streets Budget Stabilization Variance with Variance with Budget Actual Budget Budget Actual Budget -$ -$ -$ -$ -$ -$ 1,857,056 1,881,464 (24,408) - - - 300,000 578,453 (278,453) - - - - - - - - - 10,000 75,360 (65,360) - - - - - - - - - - - - - - - 2,167,056 2,535,277 (368,221) - - - - - - - - - - - - - - - 3,977,659 3,489,272 488,387 - - - - - - - - - - - - - - - - - - - - - - - - - - - 4,269,541 2,005,016 2,264,525 - - - 8,247,200 5,494,288 2,752,912 - - - (6,080,144) (2,959,011) (3,121,133) - - - 4,216,887 1,857,512 2,359,375 - - - - - - (1,638,918) - (1,638,918) 4,216,887 1,857,512 2,359,375 (1,638,918) - (1,638,918) (1,863,257) (1,101,499) (761,758) (1,638,918) - (1,638,918) 2,423,196 2,423,196 - 5,728,059 5,728,059 - 559,939$ 1,321,697$ (761,758)$ 4,089,141$ 5,728,059$ (1,638,918)$ -73- City of Lansing Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - Nonmajor Special Revenue Funds (Continued) For the Year Ended June 30, 2007 Drug Law Enforcement Variance with Budget Actual Budget Revenues Taxes and special assessments -$ -$ -$ Intergovernmental - (265,425) 265,425 Charges for services - - - Fines and forfeits 445,000 436,947 8,053 Interest 25,000 52,235 (27,235) Contributions - 4,500 (4,500) Other - - - Total revenues 470,000 228,257 241,743 Expenditures Current expenditures: General government - - - Public safety 781,980 689,885 92,095 Highways and streets - - - Recreation and culture - - - Other functions - - - Debt service: Principal - - - Interest - - - Capital outlay - - - Total expenditures 781,980 689,885 92,095 Revenues over (under) expenditures (311,980) (461,628) 149,648 Other financing sources (uses) Transfers in - - - Transfers out (20,000) (20,000) - Total other financing sources (uses) (20,000) (20,000) - Net change in fund balances (331,980) (481,628) 149,648 Fund balances, beginning of year 1,022,433 1,022,433 - Fund balances, end of year 690,453$ 540,805$ 149,648$ -74- Community Development State and Federal Programs Block Grant Program Variance with Variance with Budget Actual Budget Budget Actual Budget -$ -$ -$ -$ -$ -$ 21,486,170 6,823,442 14,662,728 2,904,391 1,899,327 1,005,064 6,000 2,280 3,720 - - - - - - - - - - 6,744 (6,744) - 23,762 (23,762) - - - - - - - - - 802,158 363,766 438,392 21,492,170 6,832,466 14,659,704 3,706,550 2,286,855 1,419,695 - - - - - - - - - - - - - - - - - - - - - - - - 27,028,798 7,229,444 19,799,354 - - - - - - - - - - - - - - - - - - 3,706,550 2,286,855 1,419,695 27,028,798 7,229,444 19,799,354 3,706,550 2,286,855 1,419,695 (5,536,627) (396,978) (5,139,649) - - - 647,686 459,855 187,831 - - - - - - - - - 647,686 459,855 187,831 - - - (4,888,942) 62,877 (4,951,819) - - - -- - - - - (4,888,942)$ 62,877$ (4,951,819)$ -$ -$ -$ -75- City of Lansing Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - Nonmajor Special Revenue Funds (Continued) For the Year Ended June 30, 2007 Stadium Variance with Budget Actual Budget Revenues Taxes and special assessments -$ -$ -$ Intergovernmental - - - Charges for services 613,250 654,156 (40,906) Fines and forfeits - - - Interest 4,000 5,775 (1,775) Contributions - - - Other - - - Total revenues 617,250 659,931 (42,681) Expenditures Current expenditures: General government - - - Public safety - - - Highways and streets - - - Recreation and culture 57,744 57,744 - Other functions - - - Debt service: Principal 960,000 960,000 - Interest 326,690 326,363 327 Capital outlay - - - Total expenditures 1,344,434 1,344,107 327 Revenues over (under) expenditures (727,184) (684,176) (43,008) Other financing sources (uses) Transfers in 641,000 641,000 - Transfers out - - - Total other financing sources (uses) 641,000 641,000 - Net change in fund balances (86,184) (43,176) (43,008) Fund balances, beginning of year 155,652 155,652 - Fund balances, end of year 69,468$ 112,476$ (43,008)$ -76- Principal Shopping District 911 Communications Center Variance with Variance with Budget Actual Budget Budget Actual Budget 418,229$ 417,080$ 1,149$ -$ -$ -$ - - - - - - 1,000 1,200 (200) 5,074,900 4,996,598 78,302 - - - - - - 500 4,144 (3,644) - - - 10,000 10,000 - - - - 4,000 1,823 2,177 24,500 - 24,500 433,729 434,247 (518) 5,099,400 4,996,598 102,802 515,326 503,231 12,095 - - - - - - 5,278,250 5,015,048 263,202 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 515,326 503,231 12,095 5,278,250 5,015,048 263,202 (81,597) (68,984) (12,613) (178,850) (18,450) (160,400) 42,075 42,075 - 22,800 22,800 - - - - - - - 42,075 42,075 - 22,800 22,800 - (39,522) (26,909) (12,613) (156,050) 4,350 (160,400) 48,534 48,534 - 155,352 155,352 - 9,012$ 21,625$ (12,613)$ (698)$ 159,702$ (160,400)$ -77- City of Lansing Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - Nonmajor Special Revenue Funds (Concluded) For the Year Ended June 30, 2007 Building Department Variance with Budget Actual Budget Revenues Taxes and special assessments -$ -$ -$ Intergovernmental - - - Charges for services 1,730,178 1,417,595 312,583 Fines and forfeits - - - Interest - - - Contributions - - - Other - - - Total revenues 1,730,178 1,417,595 312,583 Expenditures Current expenditures: General government 2,268,363 2,087,840 180,523 Public safety - - - Highways and streets - - - Recreation and culture - - - Other functions - - - Debt service: Principal - - - Interest - - - Capital outlay - - - Total expenditures 2,268,363 2,087,840 180,523 Revenues over (under) expenditures (538,185) (670,245) 132,060 Other financing sources (uses) Transfers in 121,022 121,022 - Transfers out - - - Total other financing sources (uses) 121,022 121,022 - Net change in fund balances (417,163) (549,223) 132,060 Fund balances, beginning of year 552,322 552,322 - Fund balances, end of year 135,159$ 3,099$ 132,060$ -78- Parks Department Totals Variance with Variance with Budget Actual Budget Budget Actual Budget -$ -$ -$ 418,229$ 417,080$ 1,149$ - - - 33,278,961 17,356,171 15,922,790 - - - 8,025,328 8,023,165 2,163 - - - 445,000 436,947 8,053 - 21,826 (21,826) 69,500 520,132 (450,632) - - - 10,000 14,500 (4,500) - - - 1,228,658 798,659 429,999 - 21,826 (21,826) 43,475,676 27,566,654 (15,909,022) - - - 2,783,689 2,591,071 192,618 - - - 6,060,230 5,704,933 355,297 - - - 11,524,980 8,478,914 3,046,066 88,691 8,168 80,523 146,435 65,912 80,523 - - - 27,028,798 7,229,444 19,799,354 - - - 1,377,795 1,377,794 1 - - - 428,394 427,317 1,077 - - - 15,886,660 6,723,191 9,163,469 88,691 8,168 80,523 65,236,980 32,598,576 32,638,404 (88,691) 13,658 (102,349) (21,761,304) (5,031,922) 16,729,382 - 52 (52) 7,354,561 3,988,321 3,366,240 - - - (3,132,095) (1,493,177) (1,638,918) - 52 (52) 4,222,466 2,495,144 1,727,322 (88,691) 13,710 (102,401) (17,538,838) (2,536,778) 15,002,060 522,971 522,971 - 19,411,824 19,411,824 - 434,280$ 536,681$ (102,401)$ 1,872,986$ 16,875,046$ 15,002,060$ -79- Nonmajor Debt Service Funds 1990 Special Assessments Fund – This fund accounts for the accumulation of resources for payment of the 1990 $800,000 Special Assessment Bonds. 1996 Refunding Bonds Fund – This fund accounts for the accumulation of resources for payment of the 1996 $10,800,000 Refunding Bonds. 1998 Building Authority Fund – This fund accounts for the accumulation of resources for payment of the 1998 $2,175,000 Building Authority Bonds. 1999 Fire Station Fund – This fund accounts for the accumulation of resources for payment of the 1999 $3,000,000 Unlimited Tax General Obligation Bonds. 2001 Fire Station Fund – This fund accounts for the accumulation of resources for the payment of the 2001 $4,000,000 Unlimited Tax General Obligation Bonds. City of Lansing Combining Balance Sheet - Nonmajor Debt Service Funds June 30, 2007 1990 1996 1998 1999 Special Refunding Building Fire Assessments Bonds Authority Station Assets Assets Cash and cash equivalents 5,564$ 4,049$ -$ 11,360$ Equity in pooled cash - 88,089 - 12,879 Special assessments receivable 1,369 - - - Due from other funds - - 3 - Total assets 6,933$ 92,138$ 3$ 24,239$ Liabilities and Fund Balances Liabilities Interfund payables 3,769$ -$ -$ -$ Deferred revenues 1,369 - - - Total liabilities 5,138 - - - Fund balances Unreserved, undesignated 1,795 92,138 3 24,239 Total liabilities and fund balances 6,933$ 92,138$ 3$ 24,239$ -80- 2001 Fire Station Totals 5,743$ 26,716$ 20,600 121,568 - 1,369 - 3 26,343$ 149,656$ -$ 3,769$ - 1,369 - 5,138 26,343 144,518 26,343$ 149,656$ -81- City of Lansing Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Debt Service Funds For the Year Ended June 30, 2007 1990 1996 1998 1999 Special Refunding Building Fire Assessments Bonds Authority Station Revenues Taxes and special assessments 1,052$ 1,518,581$ -$ 284,050$ Interest 98 67,335 - 12,715 Total revenues 1,150 1,585,916 - 296,765 Expenditures Debt service: Principal payments 15,000 1,335,000 100,000 155,000 Interest 1,625 222,991 69,837 132,892 Issuance costs - - - 50,471 Total expenditures 16,625 1,557,991 169,837 338,363 Revenues over (under) expenditures (15,475) 27,925 (169,837) (41,598) Other financing sources (uses) Transfers in 16,625 - 169,840 - Issuance of long-term debt - - - 1,780,000 Bond premium - - - 69,668 Payment to escrow agent - - - (1,795,055) Total other financing sources (uses) 16,625 - 169,840 54,613 Net change in fund balances 1,150 27,925 3 13,015 Fund balances, beginning of year 645 64,213 - 11,224 Fund balances, end of year 1,795$ 92,138$ 3$ 24,239$ -82- 2001 Fire Station Totals 305,565$ 2,109,248$ 13,599 93,747 319,164 2,202,995 145,000 1,750,000 160,565 587,910 - 50,471 305,565 2,388,381 13,599 (185,386) - 186,465 - 1,780,000 - 69,668 - (1,795,055) - 241,078 13,599 55,692 12,744 88,826 26,343$ 144,518$ -83- Nonmajor Capital Projects Funds 1987 Street Improvements Fund – This fund accounts for the proceeds of the 1987 $22,000,000 Unlimited Tax bonds. 1990 Environmental I Fund – This fund accounts for the proceeds of the 1990 $7,000,000 Environmental bonds. 1990 Environmental II Fund – This fund accounts for the proceeds of the 1990 $6,300,000 Environmental bonds. Combined Sewer Overflow Fund – This fund accounts for the storm sewer portion of the combined sewer overflow bonds. Special Assessments Fund – This fund is used to account for the financing of public improvements deemed to benefit the properties against which special assessments are levied. 1999 Fire Station Fund – This fund accounts for the proceeds of the 1999 $3,000,000 Unlimited Tax General Obligation Bonds. 2001 Fire Station Fund – This fund accounts for the proceeds of the 2001 $4,000,000 Unlimited Tax General Obligation Bonds. Lansing Center Improvements Fund – This fund accounts for the proceeds of the 2006 $4,000,000 Lansing Center Limited Tax Bonds. 2006 MTF Bonds Fund – This fund accounts for the proceeds of the 2006 $1,600,000 Michigan Transportation Fund Limited Tax Bonds. Other Capital Projects Fund – This fund accounts for miscellaneous capital projects. City of Lansing Combining Balance Sheet - Nonmajor Capital Projects FundsJune 30, 2007 1987 Street 1990 1990 Combined Improve- Environ- Environ- Sewer ments mental I mental II Overflow Assets Assets Cash and cash equivalents -$ -$ -$ -$ Equity in pooled cash - 81,495 349,635 1,184,432 Special assessments receivable: Current - - - - Deferred - - - - Accrued interest receivable - - - - Advances to other funds - - - - Due from other governments - - - - Total assets -$ 81,495$ 349,635$ 1,184,432$ Liabilities and Fund Balances Liabilities Accounts payable -$ -$ -$ -$ Accrued payroll - - - - Due to other funds - - - - Advances from other funds - - - - Deferred revenue - - - - Total liabilities - - - - Fund balances Reserved for advances - - - - Unreserved, undesignated (deficit) - 81,495 349,635 1,184,432 Total fund balances (deficit) - 81,495 349,635 1,184,432 Total liabilities and fund balances -$ 81,495$ 349,635$ 1,184,432$ -84- Special 1999 2001 Lansing 2006 Assess- Fire Fire Center MTF ments Station Station Improvements Bonds Other Totals -$ -$ -$ -$ 5,764,033$ 564,131$ 6,328,164$ - - - 2,370,666 - 9,937,289 13,923,517 353,051 - - - - - 353,051 715,769 - - - - - 715,769 - - 769 - 18,599 - 19,368 - - - - - 192,439 192,439 1,070 - - - - - 1,070 1,069,890$ -$ 769$ 2,370,666$ 5,782,632$ 10,693,859$ 21,533,378$ 18,587$ -$ -$ 62,315$ -$ 875,993$ 956,895$ - - - - - 1,903 1,903 - - 769 - 212,246 - 213,015 474,997 - - - - - 474,997 715,769 - - - - - 715,769 1,209,353 - 769 62,315 212,246 877,896 2,362,579 - - - - - 192,439 192,439 (139,463) - - 2,308,351 5,570,386 9,623,524 18,978,360 (139,463) - - 2,308,351 5,570,386 9,815,963 19,170,799 1,069,890$ -$ 769$ 2,370,666$ 5,782,632$ 10,693,859$ 21,533,378$ -85- City of Lansing Combining Statement of Revenues, Expenditures andChanges in Fund Balances - Nonmajor Capital Projects Funds For the Year Ended June 30, 2007 1987 Street 1990 1990 Combined Improve- Environ- Environ- Sewer ments mental I mental II Overflow Revenues Special assessments -$ -$ -$ -$ Charges for services - - - - Interest 4,270 3,277 14,622 - Donations from private sources - - - - Total revenues 4,270 3,277 14,622 - Expenditures Capital outlay - - 20,735 220,149 Revenues over (under) expenditures 4,270 3,277 (6,113) (220,149) Other financing sources (uses) Transfers in - - - - Transfers out (106,216) - - - Issuance of long-term debt - - - - Bond premium - - - - Total other financing sources (106,216) - - - Net change in fund balances (101,946) 3,277 (6,113) (220,149) Fund balance (deficit), beginning of year 101,946 78,218 355,748 1,404,581 Fund balance (deficit), end of year -$ 81,495$ 349,635$ 1,184,432$ -86- Special 1999 2001 Lansing 2006 Assess- Fire Fire Center MTF ments Station Station Improvements Bonds Other Totals 310,823$ -$ -$ -$ -$ -$ 310,823$ - - - - - 38,837 38,837 - 157 13,355 124,442 102,758 227,367 490,248 - - - - - 114,954 114,954 310,823 157 13,355 124,442 102,758 381,158 954,862 116,373 157 15,658 1,038,277 99,694 11,767,425 13,278,468 194,450 - (2,303) (913,835) 3,064 (11,386,267) (12,323,606) - - - - - 2,095,684 2,095,684 - - - - (784,124) (563,774) (1,454,114) - - - - 4,740,000 10,191,227 14,931,227 - - - - 204,237 - 204,237 - - - - 4,160,113 11,723,137 15,777,034 194,450 - (2,303) (913,835) 4,163,177 336,870 3,453,428 (333,913) - 2,303 3,222,186 1,407,209 9,479,093 15,717,371 (139,463)$ -$ -$ 2,308,351$ 5,570,386$ 9,815,963$ 19,170,799$ -87- 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. City of Lansing Combining Balance Sheet - Nonmajor Permanent FundsJune 30, 2007 Cemetery Perpetual Parks Care Trust Totals Assets Assets Equity in pooled cash -$ 1,250$ 1,250$ Investments 1,540,000 - 1,540,000 Accrued interest receivable 78,868 - 78,868 Total assets 1,618,868$ 1,250$ 1,620,118$ Liabilities and Fund Balances Liabilities Interfund payables 23,179$ -$ 23,179$ Fund balances Unreserved, undesignated 1,595,689 1,250 1,596,939 Total liabilities and fund balances 1,618,868$ 1,250$ 1,620,118$ -88- City of Lansing Combining Statement of Revenues, Expenditures andChanges in Fund Balances - Nonmajor Permanent Funds For the Year Ended June 30, 2007 Cemetery Perpetual Parks Care Trust Totals Revenues Interest 93,798$ 52$ 93,850$ Other financing sources (uses) Transfers in 19,789 - 19,789 Transfers out (93,798) (52) (93,850) Total other financing sources (uses) (74,009) (52) (74,061) Net change in fund balances 19,789 - 19,789 Fund balances, beginning of year 1,575,900 1,250 1,577,150 Fund balances, end of year 1,595,689$ 1,250$ 1,596,939$ -89- 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. Potter Park Zoo Fund – This fund accounts for the operations of the Potter Park Zoo. City of Lansing Combining Statement of Net Assets - Nonmajor Enterprise FundsJune 30, 2007 Garbage and Rubbish Cemetery Golf Collection Recycling Assets Assets Current assets: Cash and cash equivalents -$ 17,845$ 20,777$ -$ Equity in pooled cash 195,135 - - 1,312,676 Accounts receivable, net - 98 210,522 8,492 Inventories 53,511 31,219 1,368 - Total current assets 248,646 49,162 232,667 1,321,168 Noncurrent assets - Capital assets, net 134,986 3,285,859 - 819,885 Total assets 383,632 3,335,021 232,667 2,141,053 Liabilities Current liabilities: Accounts payable 3,659 25,911 29,970 16,522 Accrued interest payable - 11,504 - - Accrued payroll 21,143 33,969 22,648 75,466 Interfund payable - 324,269 42,866 - Unearned revenues - 30,228 74,590 - Current portion of: Long-term debt - 65,000 - - Compensated absences 10,620 37,074 30,597 33,747 Total current liabilities 35,422 527,955 200,671 125,735 Noncurrent liabilities: Long-term debt, net of current portion - 765,917 - - Compensated absences 21,009 17,378 27,333 15,818 Total noncurrent liabilities 21,009 783,295 27,333 15,818 Total liabilities 56,431 1,311,250 228,004 141,553 Net Assets Invested in capital assets, net of related debt 134,986 2,454,942 - 819,885 Unrestricted (deficit) 192,215 (431,171) 4,663 1,179,615 Total net assets 327,201$ 2,023,771$ 4,663$ 1,999,500$ -90- Potter Park Zoo Totals 16,575$ 55,197$ 237,139 1,744,950 - 219,112 - 86,098 253,714 2,105,357 5,830,722 10,071,452 6,084,436 12,176,809 16,904 92,966 - 11,504 47,588 200,814 - 367,135 - 104,818 - 65,000 143,578 255,616 208,070 1,097,853 - 765,917 45,644 127,182 45,644 893,099 253,714 1,990,952 5,830,722 9,240,535 - 945,322 5,830,722$ 10,185,857$ -91- City of Lansing Combining Statement of Revenues, Expenses andChanges in Fund Net Assets - Nonmajor Enterprise Funds For the Year Ended June 30, 2007 Garbage and Rubbish Cemetery Golf Collection Recycling Operating revenues Charges for services 264,255$ 754,995$ 1,378,562$ 2,903,092$ Operating expenses Personal services 420,832 570,051 612,590 1,640,717 Contractual and materials 246,987 617,564 759,676 1,113,803 Depreciation 24,691 122,545 - 22,548 Total operating expenses 692,510 1,310,160 1,372,266 2,777,068 Operating income (loss) (428,255) (555,165) 6,296 126,024 Nonoperating revenues (expenses) Interest revenue - - (1,634) 34,748 Interest expense and fees - (47,848) - - Total nonoperating revenues (expenses) - (47,848) (1,634) 34,748 Income (loss) before contributions and transfers (428,255) (603,013) 4,662 160,772 Capital contributions - 4,075 - - Transfers in 458,979 551,112 90,770 52,727 Transfers out (19,789) - - - Change in net assets 10,935 (47,826) 95,432 213,499 Net assets, beginning of year 316,266 2,071,597 (90,769) 1,786,001 Net assets, end of year 327,201$ 2,023,771$ 4,663$ 1,999,500$ -92- Potter Park Zoo Totals 553,999$ 5,854,903$ 1,628,213 4,872,403 942,227 3,680,257 397,796 567,580 2,968,236 9,120,240 (2,414,237) (3,265,337) - 33,114 - (47,848) - (14,734) (2,414,237) (3,280,071) 58,830 62,905 2,016,441 3,170,029 - (19,789) (338,966) (66,926) 6,169,688 10,252,783 5,830,722$ 10,185,857$ -93- City of Lansing Combining Statement of Cash FlowsNonmajor Enterprise Funds For the Year Ended June 30, 2007 Garbage and Rubbish Cemetery Golf Collection Recycling Cash flows from operating activities Cash received from customers 264,255$ 760,545$ 1,373,189$ 2,904,480$ Cash payments for goods and services (247,135) (620,010) (836,480) (1,161,055) Cash payments to employees (416,466) (565,643) (605,068) (1,607,695) Net cash provided (used) by operating activities (399,346) (425,108) (68,359) 135,730 Cash flows from noncapital financing activities Transfers in 458,979 551,112 90,770 52,727 Transfers out (19,789) - - - Net cash provided by noncapital financing activities 439,190 551,112 90,770 52,727 Cash flows from capital and related financing activities Acquisition of capital assets - (16,537) - - Capital contributions received - 4,075 - - Principal paid on bonds - (60,000) - - Interest paid on bonds - (47,065) - - Net cash used for capital and related financing activities - (119,527) - - Cash flows from investing activities Interest and dividends - - (1,634) 34,748 Net increase in cash and cash equivalents 39,844 6,477 20,777 223,205 Cash and cash equivalents: Beginning of year 155,291 11,368 - 1,089,471 End of year 195,135$ 17,845$ 20,777$ 1,312,676$ -94- Potter Park Zoo Totals 553,999$ 5,856,468$ (902,856) (3,767,536) (1,626,870) (4,821,742) (1,975,727) (2,732,810) 2,016,441 3,170,029 - (19,789) 2,016,441 3,150,240 (58,830) (75,367) 58,830 62,905 - (60,000) - (47,065) - (119,527) - 33,114 40,714 331,017 213,000 1,469,130 253,714$ 1,800,147$ continued… -95- City of Lansing Combining Statement of Cash Flows (concluded)Nonmajor Enterprise Funds For the Year Ended June 30, 2007 Garbage and Rubbish Cemetery Golf Collection Recycling Reconciliation of operating income (loss) to net cash provided (used) by operating activities Operating income (loss) (428,255)$ (555,165)$ 6,296$ 126,024$ Adjustments to reconcile operating income (loss) to net cash from operating activities: Depreciation expense 24,691 122,545 - 22,548 Changes in assets and liabilities: Accounts receivable - 5,550 (5,373) 1,388 Inventories 2,896 6,758 571 - Accounts payable 1,274 19,935 (48,166) (5,703) Accrued interest payable - (750) - - Accrued payroll 4,366 4,408 7,522 33,022 Interfund payable - (36,822) (22,622) - Unearned revenues - (7,459) 11,761 - Compensated absences (4,318) 15,892 (18,348) (41,549) Net cash provided (used) by operating activities (399,346)$ (425,108)$ (68,359)$ 135,730$ -96- Potter Park Zoo Totals (2,414,237)$ (3,265,337)$ 397,796 567,580 - 1,565 - 10,225 (9,513) (42,173) - (750) 1,343 50,661 - (59,444) - 4,302 48,884 561 (1,975,727)$ (2,732,810)$ -97- 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. City of Lansing Combining Statement of Net AssetsInternal Service Funds June 30, 2007 Fleet Fringe Maintenance Benefits Engineering Totals Assets Current assets: Equity in pooled cash 1,213,736$ -$ 176,237$ 1,213,736$ Receivables: Accounts, net 444 - - 444 Inventories 672,179 - - 672,179 Prepaids - 565,420 - 565,420 Due from other funds - 10,000 - 10,000 Interfund receivable 2,440,582 2,459,602 - 4,900,184 Total current assets 4,326,941 3,035,022 176,237 7,361,963 Noncurrent assets: Issuance costs 5,667 - - 5,667 Capital assets, net 7,540,211 - - 7,540,211 Total non-current assets 7,545,878 - - 7,545,878 Total assets 11,872,819 3,035,022 176,237 14,907,841 Liabilities Current liabilities: Accounts payable 92,659 14,175 11,655 106,834 Accrued interest payable 23,094 - - 23,094 Accrued payroll 84,382 37,193 38,196 121,575 Other - 582,312 - 582,312 Current portion of: Long-term debt 125,000 - - 125,000 Compensated absences 114,340 - 86,052 114,340 Total current liabilities 439,475 633,680 135,903 1,073,155 Noncurrent liabilities: Long-term debt, net of current portions 1,170,000 - - 1,170,000 Compensated absences 64,064 - 40,334 64,064 Total non-current liabilities 1,234,064 - 40,334 1,234,064 Total liabilities 1,673,539 633,680 176,237 2,307,219 Net assets Invested in capital assets, net of related debt 6,245,211 - - 6,245,211 Unrestricted 3,954,069 2,401,342 - 6,355,411 Total net assets 10,199,280$ 2,401,342$ -$ 12,600,622$ -98- City of Lansing Combining Statement of Revenues, Expensesand Changes in Fund Net Assets Internal Service FundsFor the Year Ended June 30, 2007 Fleet Fringe Maintenance Benefits Engineering Totals Operating revenues Charges for services 6,346,257$ 48,916,279$ 2,806,053$ 58,068,589$ Operating expenses Personal services 3,170,062 48,308 1,887,978 5,106,348 Purchase of goods and services 2,197,554 47,030,189 918,075 50,145,818 Depreciation 1,638,317 - - 1,638,317 Total operating expenses 7,005,933 47,078,497 2,806,053 56,890,483 Operating income (loss) (659,676) 1,837,782 - 1,178,106 Nonoperating revenues (expenses) Gain on sale of capital assets 88,605 - - 88,605 Interest expense and fees (74,038) - - (74,038) Total nonoperating expenses 14,567 - - 14,567 Income (loss) before contributions and transfers (645,109) 1,837,782 - 1,192,673 Capital contributions 3,175,958 - - 3,175,958 Transfers in 162,000 - - 162,000 Change in net assets 2,692,849 1,837,782 - 4,530,631 Net assets, beginning of year 7,506,431 563,560 - 8,069,991 Net assets, end of year 10,199,280$ 2,401,342$ -$ 12,600,622$ -99- City of Lansing Combining Statement of Cash Flows Internal Service Funds For the Year Ended June 30, 2007 Fleet Fringe Maintenance Benefits Engineering Totals Cash flows from operating activities Cash received from interfund services 5,183,540$ 47,157,752$ 2,806,053$ 52,341,292$ Cash payments for goods and services (2,482,844) (47,146,637) (780,034) (49,629,481) Cash payments to employees (3,122,632) (11,115) (1,849,782) (3,133,747) Net cash provided (used) by operating activities (421,936) - 176,237 (421,936) Cash flows from noncapital financing activities Transfers in 162,000 - - 162,000 Cash flows from capital and related financing activities Proceeds from sale of capital assets 95,052 - - 95,052 Acquisition and construction of capital assets (4,382,249) - - (4,382,249) Capital contributions received 3,175,958 - - 3,175,958 Principal paid on revenue and general obligation bonds (115,000) - - (115,000) Interest paid on revenue and general obligation bonds (73,384) - - (73,384) Net cash used for capital and related financing activities (1,299,623) - - (1,299,623) Net increase (decrease) in cash and cash equivalents (1,559,559) - 176,237 (1,559,559) Cash and cash equivalents, beginning of year 2,773,295 - - 2,773,295 Cash and cash equivalents, end of year 1,213,736$ -$ 176,237$ 1,213,736$ Reconciliation of operating income (loss) to net cash provided by (used for) operating activities Operating income (loss)(659,676)$ 1,837,782$ -$ 1,178,106$ Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities Depreciation expense 1,638,317 - - 1,638,317 Change in: Accounts receivable (444) 701,075 - 700,631 Inventories (400,383) - - (400,383) Prepaids - (16,185) - (16,185) Interfund receivable (1,162,273) (2,459,602) - (3,621,875) Accounts payable 57,107 14,175 11,655 71,282 Accrued interest payable (2,051) - - (2,051) Accrued payroll 47,430 37,193 38,196 84,623 Other - (114,438) - (114,438) Compensated absences 60,037 - 126,386 60,037 Total adjustments 237,740 (1,837,782)176,237 (1,600,042) Net cash provided by (used for) operating activities (421,936)$ -$ 176,237$ (421,936)$ -100- Agency Funds Bail Bonds Fund – This fund is used to hold cash received by the District Court for bail bonds. Garnishment, Indemnity Bond and Restitution Fund – This fund is used to hold cash received by the District Court for garnishment payments until claimed, and to hold indemnity bonds deposited relating to civil disputes until the Court rules on the case. City of Lansing Combining Statement of Fiduciary Assets and Liabilities Agency Funds June 30, 2007 54-A District Court Garnishment, Bail Indemnity Bond Bonds and Restitution Totals Assets Cash and cash equivalents -$ -$ -$ Equity in pooled cash 167,496 9,053 176,549 Total assets 167,496$ 9,053$ 176,549$ Liabilities Undistributed receipts 167,496$ 9,053$ 176,549$ -101- City of Lansing Combining Statement of Changes in Fiduciary Assets and Liabilities Agency Funds For the Year Ended June 30, 2007 Beginning Ending Balance Additions Deletions Balance 54-A District Court - Bail Bonds Assets Cash and cash equivalents 102,124$ -$ 102,124$ -$ Equity in pooled cash 134,004 550,352 516,860 167,496 Total assets 236,128$ 550,352$ 618,984$ 167,496$ Liabilities Undistributed receipts 236,128$ 550,352$ 618,984$ 167,496$ 54-A District Court - Garnishment, Indemnity Bond and Restitution Assets Cash and cash equivalents 16,573$ -$ 16,573$ -$ Equity in pooled cash 5,678 126,320 122,945 9,053 Total assets 22,251$ 126,320$ 139,518$ 9,053$ Liabilities Undistributed receipts 22,251$ 126,320$ 139,518$ 9,053$ Total - All Agency Funds Assets Cash and cash equivalents 118,697$ -$ 118,697$ -$ Equity in pooled cash 139,682 676,672 639,805 176,549 Total assets 258,379$ 676,672$ 758,502$ 176,549$ Liabilities Undistributed receipts 258,379$ 676,672$ 758,502$ 176,549$ -102- STATISTICAL SECTION -103- STATISTICAL SECTION This part of the City of Lansing’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and requires supplementary information says about the city’s overall financial health Contents Pages Financial Trends 104-107 These schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time. Revenue Capacity 108-112 These schedules contain information to help the reader assess the factors affecting the City’s ability to generate its property taxes. Debt Capacity 113-117 These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the city’s ability to issue additional debt in the future. Demographic and Economic Information 118-119 These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place and to help make comparisons over time and with other governments. Operating Information 120-122 These schedules contain information about the City’s operations and resources to help the reader understand how the City’s financial information relates to the services the City provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The city implemented Statement 34 in 2002; schedules presenting government-wide information include information beginning in that year. -104- Schedule 1 City of Lansing Net Assets by Component Last Six Fiscal Years (accrual basis of accounting)Fiscal Year 2007 2006 2005 2004 2003 2002 (2) Governmental activities Invested in capital assets, net of related debt $184,133,012 $190,243,447 $198,338,788 $197,530,605 $193,545,003 $176,742,875 Restricted 37,642,784 36,706,345 33,900,657 6,370 172,111 Unrestricted 2,793,433 514,601 1,632,040 15,331,622 20,363,235 39,491,342 Total governmental activities net assets 224,569,229 227,464,393 233,871,485 212,862,227 213,914,608 216,406,328 Business-type activities Invested in capital assets, net of related debt 166,320,408 161,324,071 163,834,290 138,830,169 163,715,373 154,922,603 Restricted 35,777,715 35,945,848 39,493,526 718,828 1,039,093 2,105,762 Unrestricted 28,929,677 28,208,193 22,701,430 64,268,351 35,649,876 36,078,930 Total business-type activities net assets 231,027,800 225,478,112 226,029,246 203,817,348 200,404,342 193,107,295 Primary government Invested in capital assets, net of related debt 350,453,420 351,567,518 362,173,078 336,360,774 357,260,376 331,665,478 Restricted 73,420,499 72,652,193 73,394,183 718,828 1,045,463 2,277,873 Unrestricted 31,723,110 28,722,794 24,333,470 79,599,973 56,013,111 75,570,272 Total primary government net assets $455,597,029 $452,942,505 $459,900,731 $416,679,575 $414,318,950 $409,513,623 (1) no discretely presented component units shown (2) in 2005 the City's definition of "restricted net assets" was changed to include assets in funds set up to account for activities outside of the General Fund, for Governmental Activities, and to include restricted cash for debt retirement for Business Type Activities. (3) six years are reported back to the date of GASB 34 implementation -105- Schedule 2 City of Lansing Changes in Net Assets Last Six Fiscal Years (accrual basis of accounting)Fiscal Year 2007 2006 2005 2004 2003 2002 Expenses Governmental activities: General government $22,043,282 $34,375,762 $53,533,838 $53,353,559 $54,386,814 $48,907,951 Public safety 62,570,888 60,047,271 38,668,349 41,292,750 36,998,022 37,442,294 Public works 40,517,063 31,790,944 30,670,483 22,118,173 23,740,767 22,332,626 Recreation and culture 6,198,462 7,881,212 5,464,143 7,979,953 8,055,078 6,790,347 Community development 6,232,406 7,124,491 6,996,000 8,387,559 9,647,696 8,960,204 Interest on long-term debt 1,658,709 1,197,851 1,033,078 2,041,758 2,333,691 2,705,290 Total governmental activities expenses 139,220,810 142,417,531 136,365,891 135,173,752 135,162,068 127,138,712 Business-type activities Sewage disposal system 24,725,229 21,706,537 20,631,611 20,864,079 19,350,186 17,218,878 Municipal parking system 10,275,379 18,403,163 10,151,018 9,196,910 8,840,334 8,322,193 Cemetery 692,510 753,151 802,949 828,073 688,571 570,291 Golf 1,358,008 1,398,963 1,446,615 1,620,669 1,583,711 1,222,525 Garbage and rubbish collection 1,372,266 1,412,620 1,421,617 1,321,760 1,288,178 1,229,951 Recycling 2,777,068 2,981,730 2,862,003 2,768,307 2,642,541 2,437,371 Potter Park Zoo 2,968,236 2,718,759 2,690,943 2,542,065 2,228,724 1,778,059 Total business-type activities expenses 44,168,696 49,374,923 40,006,756 39,141,863 36,622,245 32,779,268 Total primary government expenses 183,389,506 $191,792,454 $176,372,647 $174,315,615 $171,784,313 $159,917,980 Program Revenues Governmental activities: Charges for services: General government 6,251,032 6,416,850 6,264,142 4,686,901 4,611,471 1,908,603 Public safety 13,014,934 13,087,372 12,400,853 11,682,187 11,031,998 10,393,731 Public works 3,805,739 3,891,646 2,646,007 2,713,258 2,627,959 2,345,220 Recreation and culture 1,259,373 1,405,584 1,598,968 1,581,607 1,472,203 1,509,159 Community development 66,161 66,486 66,788 Operating grants and contributions 16,524,178 16,158,496 16,673,481 15,746,181 15,968,081 17,980,993 Capital grants and contributions 2,179,870 3,659,169 3,479,536 3,033,891 1,734,008 2,822,477 Total governmental activities program revenues 43,101,287 44,685,603 43,129,775 39,444,025 37,445,720 36,960,183 Business-type activities: Charges for services: Sewage disposal system 26,926,202 26,867,610 26,890,756 26,529,842 26,045,574 25,414,112 Municipal parking system 10,838,270 10,289,830 9,628,690 7,510,354 7,642,684 7,763,065 Cemetery 264,255 237,564 230,716 226,631 199,760 231,304 Golf 754,995 890,190 929,266 951,923 997,177 1,014,675 Garbage and rubbish collection 1,378,562 1,295,053 1,322,111 1,315,413 1,189,489 801,418 Recycling 2,903,092 2,816,277 2,636,002 2,115,917 2,138,308 1,928,476 Potter Park Zoo 553,999 471,703 558,654 505,666 436,199 426,434 Capital grants and contributions 183,012 1,368,773 731,575 93,207 914,570 0 Total business-type activities program revenues 43,802,387 44,237,000 42,927,770 39,248,953 39,563,761 37,579,484 Total primary government program revenues $86,903,674 $88,922,603 $86,057,545 $78,692,978 $77,009,481 $74,539,667 Net(Expenses)/Revenues Governmental activities ($96,119,523) ($97,731,928) ($93,236,116) ($95,729,727) ($97,716,348) ($90,178,529) Business-type activities (366,309) (5,137,923) 2,921,014 107,090 2,941,516 4,800,216 Total primary government net expense ($96,485,832) ($102,869,851) ($90,315,102) ($95,622,637) ($94,774,832) ($85,378,313) General Revenues and Other Changes in Net Assets Governmental activities: Taxes Property Taxes 38,371,105 37,506,017 36,181,408 40,354,088 39,571,155 39,158,867 Income taxes 28,209,913 27,032,176 27,435,047 27,437,494 29,099,955 27,596,270 Unrestricted grants and contributions 27,258,536 26,817,633 26,355,710 26,338,413 28,198,831 28,618,275 Investment earnings 2,483,162 1,634,608 715,608 312,069 725,936 972,802 Miscellaneous 774,822 104,563 2,903,792 1,838,895 1,946,818 Transfers (3,098,357) (3,132,465) (2,123,435) (2,668,510) (4,130,144) (1,925,790) Total governmental activities 93,224,359 90,632,791 88,668,901 94,677,346 95,304,628 96,367,242 Business-type activities: Investment earnings 2,815,480 1,453,076 1,298,407 249,855 294,425 628,797 Miscellaneous 2,160 1,248 23,736 387,551 343,174 1,438,488 Transfers 3,098,357 3,132,465 2,123,435 2,668,510 3,717,932 1,486,240 Total business-type activities 5,915,997 4,586,789 3,445,578 3,305,916 4,355,531 3,553,525 Total primary government $99,140,356 $95,219,580 $92,114,479 $97,983,262 $99,660,159 $99,920,767 Changes in Net Assets Governmental activities ($2,895,164) ($7,099,137) ($4,567,215) ($1,052,381) ($2,411,720) $6,188,713 Business-type activities 5,549,688 (551,134) 6,366,592 3,413,006 7,297,047 8,353,741 Total primary government $2,654,524 ($7,650,271) $1,799,377 $2,360,625 $4,885,327 $14,542,454 (1) no discretely presented component units shown (2) six years are reported back to the date of GASB 34 implementation -106- Schedule 3 City of Lansing Fund Balances, Governmental Funds Last Six Fiscal Years (modified accrual basis of accounting) Fiscal Year 2007 2006 2005 2004 2003 2002 General Fund Reserved $1,848,021 $2,443,224 $2,482,589 $1,324,109 $945,386 $1,145,896 Unreserved 5,036,129 4,634,961 4,709,909 5,606,958 5,985,681 5,785,171 Total General Fund 6,884,150 $7,078,185 $7,192,498 $6,931,067 $6,931,067 $6,931,067 All Other Governmental Funds Reserved 2,544,339 613,533 2,139,438 3,688,795 4,541,303 4,898,039 Unreserved, reported in: Special revenue funds 14,523,146 18,798,291 17,635,170 17,950,570 17,933,354 19,123,737 Capital projects funds 18,978,360 15,717,371 12,563,759 15,293,862 16,967,327 19,447,491 Debt service funds 144,518 88,826 4,400 0 0 0 Permanent funds 1,596,939 1,577,150 1,557,890 0 0 0 Total all other governmental funds 37,787,302 $36,795,171 $33,900,657 $36,933,227 $39,441,984 $43,469,267 Total all governmental funds $44,671,452 $43,873,356 $41,093,155 $43,864,294 $46,373,051 $50,400,334 (1) in 2005 the City's definition for Permanent Funds fund balance changed to "Unreserved" due to the nature of the funds being set up as a reserved fund (2) six years are reported back to the date of GASB 34 implementation -107- Schedule 4 City of Lansing Changes in Fund Balance, Governmental Funds Last Six Fiscal Years (modified accrual basis of accounting) Fiscal Year 2007 2006 2005 2004 2003 2002 Revenues Property taxes $38,681,928 $37,957,773 $36,527,417 $40,354,088 $39,426,786 $39,303,237 Income taxes 28,209,913 27,032,176 27,497,542 27,413,270 29,159,482 27,577,803 Licenses and permits 1,101,550 860,647 791,655 814,989 925,455 976,332 Intergovernmental 34,699,908 34,964,225 35,624,372 36,312,111 36,183,631 41,155,183 Charges for services 18,415,612 19,436,267 17,931,572 16,745,202 15,522,204 15,057,729 Fines and forfeits 4,349,642 4,515,951 4,351,977 4,870,577 5,645,029 4,383,678 Interest and rents 2,607,388 1,710,674 720,707 357,382 823,308 1,096,086 Contributions 9,980,854 9,385,831 8,966,289 8,744,295 9,255,742 8,069,915 Donations from private sources 114,954 549,055 126,182 22,031 376,793 85,307 Other revenue 1,019,476 1,082,283 1,320,064 1,285,903 779,115 703,332 Total revenues 139,181,225 137,494,882 133,857,777 136,919,848 138,097,545 138,408,602 Expenditures General government 28,905,058 34,956,037 55,746,807 54,420,735 53,381,289 49,156,129 Public safety 65,218,515 59,143,629 38,121,596 40,145,137 39,321,853 39,290,562 Highways and streets 13,501,747 10,879,004 10,467,860 9,216,004 9,776,628 9,110,517 Recreation and culture 7,676,600 7,509,183 5,517,980 6,229,014 6,555,043 6,219,773 Other functions 9,847,925 8,259,415 8,520,848 6,971,380 5,725,184 8,255,056 Capital outlay 20,001,659 13,306,810 12,614,723 11,917,608 15,241,548 14,195,769 Debt service Interest 1,285,436 1,145,588 1,187,673 2,331,276 2,625,499 2,951,352 Principal 3,875,909 3,244,879 3,592,766 6,874,234 6,298,264 7,886,020 Total expenditures 150,312,849 138,444,545 135,770,253 138,105,388 138,925,308 137,065,178 Excess of revenues over (under) expenditures (11,131,624) (949,663) (1,912,476) (1,185,540) (827,763) 1,343,424 Other Financing Sources (Uses) Issuance of long-term debt 16,711,227 6,087,507 1,784,465 570,000 1,500,000 3,914,787 Bond premium 273,905 00000 Payment to escrow agent (1,795,055)00000 Proceeds from sale of capital assets 0 774,822 74,565 799,497 99,434 896,818 Transfers in 6,908,259 8,170,998 8,274,929 13,628,444 14,083,970 16,789,516 Transfers out (10,168,616) (11,303,463) (10,398,364) (16,321,156) (18,802,923) (18,715,306) Total other financing sources (uses) 11,929,720 3,729,864 (264,405) (1,323,215) (3,119,519) 2,885,815 Net change in fund balance 798,096 2,780,201 (2,176,881) (2,508,755) (3,947,282) 4,229,239 Debt service as a percentage of noncapital expenditures 4.0% 3.4% 3.9% 7.3% 7.2% 8.8% (1) six years are reported back to the date of GASB 34 implementation -108- Schedule 5 City of Lansing Assessed Value and estimated Actual Value of Taxable Property Last Seven Fiscal Years Fiscal Total Assessed Year Personal Total Taxable Direct Estimated Value as a Ended Residential Commercial Industrial Property Assessed Tax Actual Percentage of June 30, Property Property Property Valuation Valuation Rate Value Actual Value 2001 $988,356,656 $560,554,545 $72,068,138 $305,623,290 $1,926,602,629 $16.96 $3,853,205,258 50.0% 2002 1,036,176,015 632,166,043 138,185,676 289,408,415 2,095,936,149 16.46 4,191,872,298 50.0% 2003 1,088,980,029 661,752,030 157,367,277 303,247,208 2,211,346,544 15.93 4,422,693,088 50.0% 2004 1,135,019,090 686,609,099 178,744,095 287,439,600 2,287,811,884 15.93 4,575,623,768 50.0% 2005 1,196,695,728 702,969,958 175,906,035 288,421,700 2,363,993,421 15.88 4,727,986,842 50.0% 2006 1,266,935,505 730,413,466 180,564,805 251,293,200 2,429,206,976 15.88 4,858,413,952 50.0% 2007 1,354,989,247 728,343,561 195,703,073 221,858,408 2,500,894,289 15.88 5,001,788,578 50.0% (1) tax rates are per $1,000 of assessed value (2) data available back seven years -109- Schedule 6 City of Lansing Direct and Overlapping Property tax Rates Last Ten Fiscal Years (rate per $1,000 of assessed value) Fiscal City Direct Rates Overlapping Rates Year Ended Tax Operating Service City County School State College Other June 30, Year Millage Millage Millage Millage Millage Education Millage Millage Total 1998 1997 15.04 2.06 17.10 7.61 18.88 6.00 2.94 7.43 59.96 1999 1998 15.04 2.06 17.10 7.61 18.94 6.00 2.94 7.41 60.00 2000 1999 14.90 2.06 16.96 7.61 19.52 6.00 2.92 7.36 60.37 2001 2000 14.90 2.06 16.96 7.61 19.04 6.00 2.92 7.62 60.15 2002 2001 14.40 2.06 16.46 7.61 19.10 6.00 3.89 7.59 60.65 2003 2002 14.90 1.03 15.93 8.11 19.01 6.00 3.87 8.34 61.26 2004 2003 14.90 1.03 15.93 8.11 19.06 5.00 3.85 8.89 60.84 2005 2004 14.90 .98 15.88 8.10 20.65 6.00 3.84 8.83 63.30 2006 2005 14.90 .98 15.88 8.18 20.40 6.00 3.81 8.78 63.04 2007 2006 14.95 .93 15.88 8.72 20.32 6.00 3.81 9.15 63.88 (1) rates for Ingham County and Lansing School District only (2) since 1995 this is the Non-homestead rate (3) includes Intermediate School, Airport Authority, Capital Area Transit Authority and Capital Area District Library (began in FY 98) -1 1 0 - Schedule 7 City of Lansing Principal Property Tax Payers Last Seven Fiscal Years 2007 2006 2005 2004 Percentage Percentage Percentage Percentage Taxable of Total Taxable of Total Taxable of Total Total of Total Assessed Assessed Assessed Assessed Assessed Assessed Assessed Assessed Taxpayer Valuation Rank Valuation Valuation Rank Valuation Valuation Rank Valuation Valuation Rank Valuation General Motors $133,897,648 1 5.11% $161,917,774 1 6.85% 205,316,035$ 1 8.69% 223,100,800$ 1 9.75% Jackson National Life Insurance Company 33,130,261 2 1.26% 32,393,347 2 1.37% 31,901,307 2 1.35% 31,786,400 2 1.39% Delta Township Utilities 25,381,733 3 0.97% 12,999,700 5 0.55% Consumers Energy 21,628,281 4 0.83% 21,227,570 3 0.90% 21,840,336 5 0.92% 22,043,400 5 0.96% Capitol Outlook LLC 18,764,936 5 0.72% 18,095,407 4 0.77% 17,517,336 4 0.74% 23,029,300 4 1.01% Sprint Spectrum L.P. 14,526,841 6 0.55% 12,932,365 6 0.55% 14,089,100 8 0.60% 13,454,600 8 0.59% Accident Fund Company 13,202,404 7 0.50% 11,921,155 9 0.50% 11,061,457 7 0.47% 13,724,200 7 0.60% Lansing Retail Center LLC 13,139,375 8 0.50% 12,670,707 7 0.54% 12,266,173 6 0.52% 15,544,200 6 0.68% Trappers Cove LTD Partners 12,565,459 9 0.48% 12,117,127 8 0.51% 11,730,037 9 0.50% 13,198,200 10 0.58% Heart of the City Assoc 10,290,786 10 0.39% 9,923,613 10 0.42% 9,606,596 10 0.41% 525 Redevco Inc - 26,573,652 3 1.12% 25,976,200 3 1.14% Cricket Communications 13,391,600 9 0.59% Victor IV Partnership State of Michigan (1) data furnished from City of Lansing Assessor (2) data available back seven years -1 1 1 - Schedule 7 City of Lansing Principal Property Tax Payers Last Seven Fiscal Years Taxpayer General Motors Jackson National Life Insurance Company Delta Township Utilities Consumers Energy Capitol Outlook LLC Sprint Spectrum L.P. Accident Fund Company Lansing Retail Center LLC Trappers Cove LTD Partners Heart of the City Assoc 525 Redevco Inc Cricket Communications Victor IV Partnership State of Michigan (1) data furnished from City of Lansing Assessor (2) data available back seven years 2003 2002 2001 Percentage Percentage Percentage Total of Total Total of Total Total of Total Assessed Assessed Assessed Assessed Assessed Assessed Valuation Rank Valuation Valuation Rank Valuation Valuation Rank Valuation $228,595,000 1 10.34% $216,957,400 1 10.35% 210,124,000$ 1 10.91% 27,653,500 2 1.25% 33,398,500 2 1.59% 41,238,000 2 2.14% 21,326,600 5 0.96% 28,554,300 3 1.36% 20,779,800 3 1.08% 23,811,500 4 1.08% 20,900,100 5 1.00% 18,805,600 4 0.98% 11,877,000 9 0.54% 13,108,100 7 0.59% 12,815,200 7 0.61% 11,181,300 8 0.58% 14,750,900 6 0.67% 14,584,800 6 0.70% 13,311,200 6 0.69% 12,881,700 8 0.58% 12,364,300 8 0.59% 12,364,300 7 0.64% 11,438,900 10 0.52% 11,593,000 9 0.55% 10,461,800 9 0.54% 26,854,700 3 1.21% 24,586,400 4 1.17% 10,000,000 10 0.52% 9,408,300 10 0.45% 16,488,900 5 0.86% -112- Schedule 8 City of Lansing Property Tax Levies and Collections Last Ten Fiscal Years Collected within the Fiscal Year of the Levy Total Collections to Date Taxes Levied Current Percent of Delinquent Total Collections for the Tax Levy Tax Tax as a Percent 30-Jun Fiscal Year Collection Collected Collection Collection of Levy 1998 33,360,681$ 33,269,198$ 99.73% (402)$ 33,268,796$ 99.72% 1999 34,984,481 34,887,287 99.72% 70,749 34,958,036 99.92% 2000 35,027,907 34,886,808 99.60% 48,074 34,934,882 99.73% 2001 35,547,497 35,330,288 99.39% 18,522 35,348,810 99.44% 2002 36,357,748 36,208,985 99.59% 59,625 36,268,610 99.75% 2003 37,310,656 37,041,662 99.28% (97,842) 36,943,820 99.02% 2004 38,267,514 37,826,436 98.85% 58,255 37,884,691 99.00% 2005 40,051,303 39,429,093 98.45% 137,727 39,566,820 98.79% 2006 41,261,397 41,022,735 99.42% 77,747 41,100,483 99.61% 2007 42,627,042 42,516,696 99.74% 91,605 42,608,301 99.96% (1) net of chargebacks from the County Tax Revolving Funds for taxes still delinquent after three years -1 1 3 - Schedule 9 City of Lansing Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities Business-Type Activities General Special General Total Percentage Fiscal Obligation Assessment Lease Obligation Revenue Lease Primary of Personal Per Year Bonds Debt Purchases Loans Bonds Bonds Purchases Loans Government Income Capita Population 1998 $66,473,000 $306,000 $12,767,000 $549,000 $18,215,000 $103,960,000 $65,000 $0 $202,335,000 8.85% $1,588 127,400 1999 43,643,000 170,000 12,733,000 151,000 41,411,000 105,595,000 18,000 0 203,721,000 8.92% 1,599 127,400 2000 21,090,000 140,000 11,501,000 0 49,330,000 101,800,000 0 0 183,861,000 8.61% 1,544 119,100 2001 17,310,000 115,000 12,135,000 650,000 55,069,000 97,845,000 0 0 183,124,000 8.58% 1,538 119,100 2002 33,668,000 90,000 11,266,000 650,000 123,022,000 32,705,000 0 0 201,401,000 9.44% 1,691 119,100 2003 29,553,133 65,000 11,043,847 534,329 129,302,048 29,230,000 0 0 199,728,357 9.37% 1,677 119,100 2004 25,078,133 45,000 9,858,752 408,283 158,303,225 55,375,000 0 4,179,649 253,248,042 11.88% 2,126 119,100 2005 13,320,000 35,000 8,396,154 1,543,195 165,029,785 51,710,000 0 4,180,000 244,214,134 11.46% 2,050 119,100 2006 17,245,000 25,000 7,351,126 1,409,844 168,824,004 47,905,000 0 4,180,000 246,939,974 11.59% 2,073 119,100 2007 19,845,000 10,000 15,399,239 1,772,049 180,177,414 43,955,000 0 4,180,000 265,338,702 12.45% 2,228 119,100 (1) population per decennial census by the U.S. Census Bureau (2) personal income data comes from U.S. Census Bureau, American Community Survey 2005 -114- Schedule 10 City of Lansing Ratios of General Bonded Debt Outstanding Last Seven Fiscal Years Debt Payable From Ratio of Fiscal Debt Enterprise Net Bonded Net Year Service Revenues Debt to Bonded Ended Taxable Gross Bonded Monies & Special Net Bonded Taxable Debt per 30-Jun Population(1)Value(3) Debt(2)Available Assessments Debt Value Capita 2001 119,128 $1,926,602,629 $128,819,227 $266,393 $93,171,094 $35,381,740 0.0184 $297 2002 119,128 2,095,936,149 135,999,133 28,496 102,232,751 33,737,886 0.0161 283 2003 119,128 2,211,346,544 140,043,000 7,524 110,419,899 29,615,577 0.0134 249 2004 119,128 2,287,811,884 166,581,000 42,852 145,505,724 21,032,424 0.0092 177 2005 119,128 2,363,993,421 178,349,785 4,400 165,029,785 13,315,600 0.0056 112 2006 119,128 2,429,206,976 186,094,004 88,826 168,849,004 17,156,174 0.0071 144 2007 119,128 2,500,894,289 200,032,414 144,518 180,187,414 19,700,482 0.0079 165 (1) population per decennial census by the U.S. Census Bureau (2) includes all general obligation debt and special assessment debt with governmental obligation (3) the tax assessment day is December 31 prior to beginning of fiscal year (4) data available back seven years -115- Schedule 11 City of Lansing Direct and Overlapping Governmental Activities Debt As of June 30, 2007 Net General Obligation Bonded Amount Name of Debt % Applicable Applicable Governmental Unit Outstanding to City to City Direct - City 26,575,787$ (1) 100.00% 26,575,787$ Overlapping Eaton Intermediate School District 1,745,000 1.47% 25,652$ Waverly School District 42,035,000 0.25% 105,088 Lansing School District 69,395,000 84.67% 58,756,747 East Lansing School District 80,039,938 4.22% 3,377,685 Holt School District 104,981,746 2.87% 3,012,976 Ingham Intermediate School District - 26.43% - Ingham County 33,002,909 30.47% 10,055,986 Eaton County 26,189,563 2.59% 678,310 Lansing Community College 71,985,000 22.31% 16,059,854 Okemos School District 46,132,000 2.84% 1,310,149 Grand Ledge 50,915,000 2.96% 1,507,084 Total Overlapping Debt 94,889,529 Total Direct and Overlapping Debt 121,465,316$ (1) excluding general obligation bonds reported in the enterprise funds, special assessment debt with government commitment and amount available for repayment in the debt service fund and including tax increment bonds -1 1 6 - Schedule 12 Legal Debt Margin Calculation for Fiscal Year 2007 City of Lansing Legal Debt Margin Information Assessed value, real and personal property $3,087,266,510 Last Ten Fiscal Years Assessed value equivalents 162,608,800 Total valuation 3,249,875,310 Legal debt margin Debt limitation - 10 percent of total valuation 324,987,531 Debt applicable to limit Total City Bonded Debt 243,987,414 Add City Share: Drain Commission-County Issued 193,620 Joint Building Authority-County Issued 5,777,692 Brownfield Redevelopment Authority 2,225,000 TIF Supported Bonds 6,875,305 259,059,032 Less: Special Assessment Bonds (10,000) Michigan Transportation (MTF) Bonds (6,060,000) Sewage Disposal Revenue Bonds (43,955,000) Pollution Abatement (CSO Project) Bonds (113,052,414) (163,077,414) Total net debt applicable to limit 95,981,618 Legal debt margin $229,005,913 Fiscal Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Debt limit $192,592,070 $205,063,128 $212,623,130 $237,216,205 $256,314,667 $273,340,110 $289,486,027 $302,811,105 $314,307,611 $324,987,531 Total net debt applicable to limit 86,274,817 100,429,777 85,744,355 81,504,924 73,872,709 70,893,614 87,171,139 75,882,359 103,095,986 95,981,618 Legal debt margin $106,317,253 $104,633,351 $126,878,775 $155,711,281 $182,441,958 $202,446,496 $202,314,888 $226,928,746 $211,211,625 $229,005,913 Total net debt applicable to the limit as a percentage of debt limit 44.80% 48.98% 40.33% 34.36% 28.82% 25.94% 30.11% 25.06% 32.80% 29.53% -117- Schedule 13 City of Lansing Pledged-Revenue Coverage Last Ten Fiscal Years Sewage Disposal Bonds Fiscal Year Direct Net Revenue Ended Gross Operating Available for Debt Service Requirements 30-Jun Revenue Expenses(2) Debt Service Principal Interest Total Coverage(1) 1998 20,867,394$ 10,004,525$ 10,862,869$ 2,235,000$ 2,624,340$ 4,859,340$ 2.24 1999 21,107,381 9,996,022 11,111,359 2,370,000 2,492,280 4,862,280 2.29 2000 21,623,804 10,528,286 11,095,518 2,180,000 1,656,475 3,836,475 2.89 2001 24,193,795 10,574,104 13,619,691 3,065,000 1,976,600 5,041,600 2.70 2002 25,841,763 10,592,681 15,249,082 3,190,000 1,854,090 5,044,090 3.02 2003 26,963,775 11,209,711 15,754,064 3,320,000 1,723,253 5,043,253 3.12 2004 26,196,518 11,543,509 14,653,009 3,475,000 1,723,253 5,198,253 2.82 2005 26,601,646 12,775,001 13,826,645 3,715,000 1,786,328 5,501,328 2.51 2006 27,932,464 12,867,761 15,064,703 3,805,000 2,036,736 5,841,736 2.58 2007 29,160,845 13,494,658 15,666,187 3,950,000 2,152,990 6,102,990 2.57 (1) coverage is defined as net revenue available for debt service divided by debt service requirements (2) operating expenses less depreciation -118- Schedule 14 City of Lansing Demographic and Economic Statistics Last Ten Fiscal Years Per capita Personal Personal Median School Unemployment Labor Year Population(1) Income Income(5)Age(2) Enrollment(3) % Rate(4) Force(4) 1997 127,400 $2,285,810,800 $17,942 31.40 20,013 2.9 66,275 1998 127,400 2,285,046,400 17,936 31.64 19,049 4.1 66,425 1999 127,400 2,284,282,000 17,930 31.88 18,443 4.2 66,550 2000 119,100 2,134,748,400 17,924 31.40 17,836 4.7 68,300 2001 119,100 2,134,036,817 17,918 31.56 17,586 4.5 67,725 2002 119,100 2,133,325,472 17,912 31.72 17,490 5.6 67,700 2003 119,100 2,132,614,363 17,906 31.88 17,600 6.7 65,325 2004 119,100 2,131,903,492 17,900 32.04 16,927 7.0 63,750 2005 119,100 2,131,192,857 17,894 32.20 16,201 9.0 68,041 2006 119,100 2,130,460,800 17,888 32.36 16,014 8.4 67,023 2007 119,100 2,129,750,646 17,882 32.52 15,178 8.9 66,224 (1) population per decennial census by the U.S. Census Bureau (2) 2000 data from U.S. Census Bureau. Data for other years estimated by City of Lansing Finance Department (3) annual school census from the Lansing School District (4) Michigan Department of Career Development: Employment Service Agency - Labor Market Information (5) personal income for 2000 and 2005 from the U.S.Census Bureau. The other years were extrapolated from 2000 and 2005 -119- Schedule 15 City of Lansing Principal Employers, June 30, 2007 2006 Percentage Percentage of Total City of Total City Employer Employees Rank Employment Employees Rank Employment (1) (2) State of Michigan 13,000 1 5.65% 14,355 1 6.09% Michigan State University 10,500 2 4.56% 10,500 2 4.45% General Motors 6,000 3 2.61% 6,300 3 2.67% Sparrow Health System 6,000 4 2.61% 6,000 4 2.54% Lansing Community College 3,800 5 1.65% 3,180 5 1.35% Lansing School District 3,000 6 1.30% 2,106 7 0.89% Ingham Regional Medical Center 2,500 7 1.09% 2,500 6 1.06% Meijer 2,000 8 0.87% 2,000 8 0.85% U.S. Post Office 1,300 9 0.57% Ingham County 1,200 10 0.52% Auto Owners Insurance 1,500 9 0.64% Peckham, Inc. 1,400 10 0.59% (1) data is representative of the Greater Lansing Region (2) based on a Greater Lansing Region employment of 230,075 (3) data available back two years only -120- Schedule 16 City of Lansing Full-time Equivalent City Governmental Employees by Function/Program June 30, Function/Program 2007 2006 General Government City Clerk 7 7 City Council 14 15 District Court 55 55 Finance 128 51 Human Relations and Community Services 9 9 Law 12 11 Mayor's Office 5 6 Management Services 0 66 Personnel Services 14 13 Transportation 9 9 Planning and Neighborhood Development 54 52 Public Safety Police officers 243 241 Police civilians 95 98 Firefighters and officers 213 214 Fire civilians 6 6 Public Works O&M Public Works 94 94 Service Garage 0 17 Engineering 18 19 Recreation 59 61 Sewage Disposal 51 61 Parking System 34 40 Cemetery 5 5 Golf 4 6 Garbage and Recycling 25 28 Potter Park Zoo 18 19 1172 1203 data available back two years only -121- Schedule 17 City of Lansing Operating Indicators by Function/Program Fiscal Year ended June 30, Function/Program 2007 2006 Public Safety Fire Department responses 15,267 14,869 EMS related 12,779 12,152 Fire related 2,488 2,117 Police Department responses 97,466 87,551 Arrests 13,260 7,479 Traffic violations 29,047 30,948 Public Works Potholes filled 750 494 Streets resurfaced (miles) 22.11 27.16 Recreation Recreation participation 41,069 38,878 Pavillion rentals 587 602 Sewage Disposal Average amount processed daily (gal) 16 million 15 million Parking System Average number of monthly permits 3,905 4,073 Parking tickets issued 75,637 82,221 Cemetery Lots sold 114 104 Golf Annual rounds played 59,244 57,256 Garbage and Rubbish Yards sent to landfill 30,402 30,517 Recycling Recycled goods sold (tons) 11,454 9,386 Yards composted 17,189 21,304 Potter Park Zoo Annual attendance 99,364 96,659 data available back two years only -122- Schedule 17 City of Lansing Capital Asset Statistics by Function/Program June 30, Function/Program 2007 2006 Public Safety Police Stations 3 3 Police Patrol Units 55 55 Fire Stations 9 9 Public Works Streets (miles) 410.15 409.89 Traffic signals 188 194 Recreation Park acreage 2,219.63 2,219.63 Playgrounds 80 76 Baseball/softball fields 61 61 Soccer/football fields 6 6 Community centers 4 4 Sewage Disposal Sanitary sewers (miles) 341 338 Storm sewers (miles) 220 217 Combined sewers (miles) 203 208 Parking System Ramps 6 5 Lots 15 15 Meters 2,489 2,489 Cemetery Number of cemeteries 3 3 Golf Number of courses 3 3 Acreage 318 318 Garbage and Rubbish Refuse collection trucks 21 20 Recycling Recycling trucks 10 10 Potter Park Zoo Number of animals 398 403 data available back two years only