HomeMy WebLinkAbout2010 City of Lansing Comprehensive Annual Financial Report CAFR CITY OF LANSING
2010 Comprehensive
Annual Financial Report
FOR
FISCAL YEAR ENDED JUNE 30, 2010
VIRG BERNERO, Mayor
Gerald Ambrose, Director of Finance
Prepared by:
Department of Finance
LANSING CITY GOVERNMENT
2010
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 ERIC HEWITT –1st Ward
KATHIE DUNBAR TINA HOUGHTON –2nd Ward
BRIAN JEFFRIES A’LYNNE ROBINSON –3rd Ward
CAROL WOOD JESSICA YORKO –4th Ward
OFFICERS
City Assessor ............................................................................................................... Maria Irish
City Attorney ......................................................................................................... Brigham Smith
City Treasurer ........................................................................................................ Antonia Kraus
Executive Assistant to the Mayor ........................................................................ Gerald Ambrose
Finance, 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 .................................................................................................... Teresa Szymnaski
Public Service, Director of ...................................................................................... Chad Gamble
-i-
CITY OF LANSING
-ii-
INTRODUCTORY SECTION
-iii-
City of Lansing, Michigan
Table of Contents
Page
INTRODUCTORY SECTION
Title Page ............................................................................................................................................................... i
Table of Contents ........................................................................................................................................... iv-vi
Letter of Transmittal .................................................................................................................................... vii-xiii
Certificate of Achievement ................................................................................................................................ xiv
City Organizational Structure ............................................................................................................................. xv
FINANCIAL SECTION
Independent Auditors’ Report .......................................................................................................................... 1-2
Management’s Discussion and Analysis ........................................................................................................ 3-15
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Assets .......................................................................................................................... 20
Statement of Activities ..................................................................................................................... 21-22
Governmental Fund Financial Statements
Balance Sheet ......................................................................................................................................... 26
Reconciliation of Fund Balances on the Balance Sheet for Governmental Funds to
Net Assets of Governmental Activities on the Statement of Net Assets ............................................. 27
Statement of Revenues, Expenditures and Changes in Fund Balances .................................................. 28
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund
Balances of Governmental Funds to the Statement of Activities ........................................................ 29
Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual
General Fund ................................................................................................................................. 30-31
Proprietary Fund Financial Statements
Statement of Net Assets ...................................................................................................................... 34
Statement of Revenues, Expenses and Changes in Fund Net Assets ................................................. 35
Statement of Cash Flows .............................................................................................................. 36-37
Fiduciary Fund Financial Statements
Statement of Fiduciary Net Assets ..................................................................................................... 40
Statement of Changes in Fiduciary Net Assets ................................................................................... 41
Component Unit Financial Statements
Combining Statement of Net Assets ................................................................................................... 46
Combining Statement of Activities .................................................................................................... 47
Index for Notes to Financial Statements ..................................................................................................... 50
Notes to Financial Statements ............................................................................................................... 51-85
Required Supplementary Information
Schedule of Funding Progress and Employer Contributions:
Employees’ Retirement System .............................................................................................................. 88
Police and Fire Retirement System ........................................................................................................ 89
Other Postemployment Benefits ............................................................................................................. 90
-iv-
City of Lansing, Michigan
Table of Contents
Page
Combining and Individual Fund Statements and Schedules
Nonmajor Governmental Funds
Combining Balance Sheet ...................................................................................................................... 92
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ............................... 93
Nonmajor Special Revenue Funds
Combining Balance Sheet ................................................................................................................ 96-98
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ..................... 100-102
Schedules of Revenues, Expenditures, and Changes in Fund
Balances – Budget and Actual ................................................................................................... 104-112
Nonmajor Debt Service Funds
Combining Balance Sheet .................................................................................................................... 114
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ............................. 115
Nonmajor Capital Projects Funds
Combining Balance Sheet ............................................................................................................ 118-119
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ..................... 120-121
Nonmajor Permanent Funds
Combining Balance Sheet .................................................................................................................... 124
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ............................. 125
Nonmajor Enterprise Funds
Combining Statement of Net Assets ............................................................................................. 128-129
Combining Statement of Revenues, Expenses and Changes in Fund Net Assets ........................ 130-131
Combining Statement of Cash Flows ........................................................................................... 132-135
Internal Service Funds
Combining Statement of Net Assets ..................................................................................................... 138
Combining Statement of Revenues, Expenses and Changes in Fund Net Assets ................................ 139
Combining Statement of Cash Flows ................................................................................................... 140
Agency Funds
Combining Statement of Fiduciary Assets and Liabilities .................................................................. 142
Combining Statement of Changes in Fiduciary Assets and Liabilities ................................................ 143
STATISTICAL SECTION ....................................................................................................................145
Financial Trends:
Net Assets by Component ................................................................................................................... 147
Changes in Net Assets – Governmental Activities ............................................................................. 148
Fund Balances – Governmental Funds ............................................................................................... 149
Changes in Fund Balances – Governmental Funds ............................................................................ 150
Revenue Capacity:
Assessed and Actual Value of Taxable Property ................................................................................ 151
Direct and Overlapping Property Tax Rate......................................................................................... 152
Principal Property Taxpayers ...................................................................................................... 153-154
Property Tax Levies and Collections .................................................................................................. 155
-v-
City of Lansing, Michigan
Table of Contents (Concluded)
Debt Capacity:
Ratios of Outstanding Debt by type .................................................................................................... 156
Ratios of General Bonded Debt Outstanding ...................................................................................... 157
Computation of Net Direct and Overlapping Debt ............................................................................. 158
Legal Debt Margin .............................................................................................................................. 159
Pledged Revenue Coverage ................................................................................................................ 160
Demographic and Economic Statistics:
Demographic and Economic Statistics ............................................................................................... 161
Principal Employers ............................................................................................................................ 162
Operating Information:
Full-Time Equivalent City Government Employees by Function/Program ....................................... 163
Operating Indicators by Function/Program ......................................................................................... 164
Capital Asset Statistics by Function/Program ..................................................................................... 165
-vi-
Council President A’Lynne Robinson December 27, 2010
and Council Members
10th Floor City Hall
Lansing, Michigan 48933-1694
Dear President Robinson and Council Members:
We are pleased to submit the comprehensive annual financial report of the City of
Lansing, Michigan for the fiscal year ended June 30, 2010.
The City assumes full responsibility for both the accuracy of the data and the
completeness and fairness of the presentation, including all disclosures. To the best of
our knowledge and belief, the enclosed data are accurate in all material respects and are
reported in a manner designed to present fairly the financial position and results of
operations government wide and of the various funds of the City.All disclosures
necessary to enable the reader to gain an understanding of the City's financial activities
have been included.
The City’s fiscal year 2009/2010 financial statements have been audited by Rehmann
Robson, an independent firm of licensed, certified public accountants. The goal of the
independent audit is to provide reasonable assurance that the financial statements for the
City of Lansing for the fiscal year-ended June 30, 2010, are free of material
misstatement. The independent audit involved examining, on a test basis, evidence
supporting the amounts and disclosures contained in the financial statements; assessing
the accounting principles used; and evaluating the overall financial statement
presentation. The independent audit concluded with the rendering of an unqualified
opinion on the statements, meaning the financial statements present, fairly and accurately
in all material respects, the financial position of the City in conformity with Generally
Accepted Accounting Principles (“GAAP”). The independent auditors report is
presented as the first component of the financial section of this report.
This letter of transmittal is designed to complement the Management Discussion and
Analysis (MD&A) and should be read in conjunction with it. The Management
Discussion and Analysis can be found immediately following the Independent Auditor
Report.
-vii-
Profile of the City of Lansing
Serving as Michigan’s capital since 1848, the City of Lansing was incorporated in 1859
and operates under provisions of Public Act 279 of 1909, as amended (the “Home Rule
City Act”). The City incorporates 34.7 square miles and is located in the lower middle of
Michigan’s Lower Peninsula and operates under a strong mayor form of government
established by 1978 Charter revision.
Lansing is a mature core city with a population of 119,286, according to the revised 2000
census, and offers a full range of services. The City operates police headquarters and two
precincts with over 300 sworn police officers; nine fire stations with a fire protection
force of over 200; over 300 miles of sanitary sewers, 217 miles of storm sewers, and 200
miles of combined sewers; over 400 miles of roads; 114 parks; a District Court; and
support for human services and cultural events. The City’s main sources of revenue are
property taxes, income taxes, State revenue sharing, Federal entitlement grants, and
charges for services, including utility billings.
Reporting Entity
The financial reporting entity (the City) includes all of the funds of the primary
government (i.e., the City as legally defined), as well as its blended component units.
Blended component units,although legally separate entities,are, in substance, part of the
primary government’s operations and are included as part of the primary government.
The Lansing Building Authority is a blended component unit. Discretely presented
component units are reported in a separate column in the combined financial statements
to emphasize that they are legally separate from the primary government and to
differentiate their financial position, results of operations and cash flows from those of
the primary government. The Lansing Entertainment & Public Facilities Authority, Tax
Increment Finance Authority, the Brownfield Redevelopment Authority, and the Smart
Zone are reported as discretely presented component units.
Financial Management and Control
Management of the City of Lansing is responsible for establishing and maintaining
internal controls designed to ensure that the assets of the government are protected from
loss, theft, or misuse and to assure that adequate accounting data is compiled to allow for
the accurate presentation of financial statements in conformity with generally accepted
accounting principles.
To provide a reasonable basis for making these presentations, management has
established a comprehensive system of internal controls designed to reasonably ensure
that assets of the City are protected from loss, theft or misuse and to ensure that adequate
accounting data are compiled to allow for the preparation of these financial statements in
conformity with generally accepted accounting principles. Such controls include
appropriate policies and procedures, ongoing risk assessment, and monitoring and review
processes which are communicated throughout City operations. Because the cost of
internal controls generally should not outweigh their benefits, the City’s framework of
internal controls has been designed to provide reasonable, rather than absolute, assurance
that these objectives are met.
-viii-
Because the City is a recipient of federal grant dollars, the independent audit of the
financial statements of the City of Lansing was part of a broader, federally-mandated
“single audit” in conformity with the provisions of the Single Audit Act of 1996 and the
U.S. Office of Management and Budget Circular A-133, Audits of States. Local
Governments, and Non-profit Organizations. The standards governing the single audits
require the independent auditor to report not only on the fair presentation of the financial
statements, but also on the audited government’s internal controls and compliance with
legal requirements involving the administration of the federal awards. These reports are
available in the City’s separately-issued Single Audit Report.
Budgeting Controls
The annual budget serves as the foundation for the City’s financial planning, policy-
making, and control. The City Charter requires that the Mayor submit to the City
Council a proposed budget by the fourth Monday in March. The City Council must, by
charter, adopt the budget for the ensuing fiscal year by third Monday in May. The budget
is adopted at the activity level within each department.
The City also maintains an encumbrance accounting system, whereby purchase orders
amounts are deducted from the available budget, as one technique of accomplishing
budgetary control. Encumbered amounts lapse at year end and require Council approval
to be carried forward to the ensuing fiscal year for amounts greater than $5,000 or greater
than eight months old. The budget is adopted at the activity level within each
department.
Risk Management
The City carries all-risk coverage on all real and business personal property. The total
coverage is $485 million with a $25,000 self-insured retention. Workers Compensation is
self insured with excess reinsurance coverage for claims exceeding $500,000 from the
State Accident Fund. The City carries liability coverage in the amount of $16 million per
occurrence.
Environmental Factors Affecting Financial Control
The City of Lansing benefits from a diverse economy, as well as a number of City and
regional assets:
Being the State’s capital, with billions of dollars of annual decision-making,
involving an entire industry of lobbyists, attorneys, and consulting firms captured
in our market
Home to strong and rapidly growing financial and insurance sectors, including
several national headquarters, some of the largest in the nation (JNL, Accident
Fund)
Home to two of General Motors’ most successful, newest, and technologically-
advanced automobile making plants
-ix-
The City is located within several miles of Michigan State University. Ranked #1
in the nation for Physics studies, MSU is also home to the world’s new leading
$500 million cyclotron (Facility for Rare Isotope Beam particles) and is also #1
for undergraduate study-abroad programs. MSU also presents the City and region
with year around, New York City-scale arts and sporting events.
Downtown Lansing is home to the nation’s largest and most diverse law school in
Cooley Law School
Downtown Lansing is home to the state’s fourth largest community college,
Lansing Community College
Lansing is still blessed with vibrant, large corporations in manufacturing, but also
is home to a blossoming entrepreneurial spirit creating new businesses in nano
technology (XG Sciences), cyclotron (Niowave) and software development
(Jadian Technologies).
ECONOMIC CONDITION AND OUTLOOK
ECONOMIC ANALYSIS OF THE CITY OF LANSING 2009/2010
Despite the continuation of the Great Recession, in particular the credit crisis that has yet
to abate in any real sense, the City has done remarkably well in its economic
development efforts. In fact, the City did so well, Lansing popped up on several national
charts this past year:
Included in Kiplinger’s Top Ten places in America for young professionals to live
and work, joining places like Austin, Chicago and Boston
Ranked seventh (7th) place in America for job growth in mid-sized city category
by Milken Institute
Named as the nation’s “Smart City” award winner by IBM and Next American
City’s magazine
Awarded an EB 5 Regional Center designation by the federal government, one of
only 93 centers in the entire country (This unique tool allows the City to invite
foreign investment into the City’s economic development projects, creating
American jobs, in return for green card access.)
-x-
Notable projects over the past year:
1) GM announced the addition of $190 million of new equipment to be
placed in the Lansing Grand River Assembly Plant (Cadillac) in 2011 to
build a new Cadillac model starting in 2012. This will result in an entire
second shift of 600 workers paying local income tax. Better yet, this
likely sets the table for even further investment and significant job
creation in the next 3 –5 years at this particular GM plant as GM has
identified Lansing as a pinnacle of its North American manufacturing
operations.
2) The Lansing GM Delta\plant also received an announcement that $37
million would be invested in 2011 in that plant which is expected to
result in the additional ramp up of the auto supplier base of the City in
2012. This plant now operates with three full shifts, including the
addition of the Chevy Traverse moved here from Tennessee along with
480 workers.
3) The new $1.6 million City Market, on the downtown riverfront, was
completed and opened. It is 100% sold out and vendors report a sales
increase of 300%.
4) The City approved the Market Place project, creating nearly 600
housing units on the riverfront next to the new downtown City Market
as part of a $24 million private investment. Project is to begin in 2011
per a development agreement.
5) The downtown Knapps department store building rehabilitation project,
announced in April, awaits final federal approval for federal Brownfield
financing. This currently-vacant building will house 22 large apartment
units, three floors of office, one floor of out-of-state retail and 10,000
square feet of incubation space for entrepreneurial development to be
leased by the Lansing Economic Development Corporation.
6) The new, three-story Troppo restaurant was completed and opened in
downtown Lansing, one of two new (vacant space) private buildings to
be built in downtown Lansing in nearly a decade.
7) Symmetry Medical announced a $14.8 million expansion plan of its
world medical device manufacturing plant, adding 159 new jobs to the
City.
8) The new Michigan State Police headquarters opened downtown
Lansing, bringing 510 State employees to the City.
-xi-
9) Jackson National Life moved 150 employees to Lansing from
Colorado. Thus, in 2009 and 2010, Jackson reports adding 600 new
employees to the City.
10) The publicly-owned utility Lansing Board of Water and Light
announced the 2011 construction of a $180 million natural gas, co-
generation plant in Lansing’s REO Town, while moving its corporate
headquarters and 180 employees with this new plant, sparking a whole
revitalization effort within this area of Lansing.
11) The City approved the Marshall Street Armory project, moving 45 new
jobs into the City with 100% of the rehabbed building sold out. Project
should be completed in 2011.
12) Blue Cross/Blue Shield announced that it will be moving its 260
corporate employees from its Delta Township location to the former
Accident Fund building in downtown Lansing location. Additionally,
some 130 employees from the Southfield office will be moving to the
downtown location. Thus, a total of 400 new employees will be in the
City in September, 2011. Accident Fund moves into its new, downtown
headquarters in April 2011.
13) Financing for the $31 million Accident Fund private parking ramp, to
support their new $182 million national headquarters downtown, was
completed. Construction on that structure is nearing completion as is
the national headquarters itself, which will create 500 new jobs starting
in 2011.
14)The City’s first river front restaurant opened up this summer, with both
inside and outdoor seating along the Grand River in downtown. This
business joined the City’s first ever, boating business that worked all
summer along the downtown riverfront.
15) The City will also be receiving over $5 million in federal monies to
help clean up the former GM Verlinden plant site and turn it back into a
viable property for green manufacturing.
Lansing is an environment of high-growth possibilities and a reasonably safe return on
investment. It is a great buy during a down market. Lansing is further poised to benefit
from the new generation of young people, entrepreneurs and new economy businesses
who are now demanding an urban environment for living and working. Indeed, the fifty-
year tide has turned back to urban life and work style. Although tough times remain, and
people and business are hurting, the City of Lansing is truly poised for a remarkable,
sustained and historic period of economic diversity and growth.
-xii-
Awards and Acknowlegements
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, 2009. This was the 32nd
consecutive year that the City has received this prestigious award. In order to be awarded
a Certificate of Achievement, the City must publish an easily readable and efficiently
organized comprehensive annual financial report. This report satisfied both generally
accepted accounting principles and applicable legal requirements.
The Certificate of Achievement is valid for a period of one year only. We believe that our
current Comprehensive Annual Financial Report continues to meet the Certificate of
Achievement Program's requirements and we are submitting it to the GFOA to determine
its eligibility for another certificate.
Preparation of this comprehensive annual financial report was made possible by the
dedicated service of the entire staff of the Finance Department. Each member of the
department has our sincere appreciation for their contributions made in the preparation of
this report and in the financial management of the City. The 32nd consecutive GFOA
award, recognizing their efforts, is well deserved indeed. Finally, acknowledgement goes
to the hard work and dedication of the City’s long-term Accounting Manager, Tom
Korkoske, who retired at the end of this fiscal year, and to Angela Bennett, Budget
Manager and Interim Accounting Manager, who ably and graciously took on the
additional responsibility of leading the preparation of this report.
-xiii-
-xiv-
Pa
t
r
o
l
S
u
p
p
r
e
s
s
i
o
n
P
l
a
n
n
i
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
c
i
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
C
e
m
e
t
e
r
i
e
s
B
u
i
l
d
i
n
g
S
a
f
e
t
y
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
&
F
l
e
e
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
C
o
m
m
u
n
i
t
y
M
e
d
i
a
C
e
n
t
e
r
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
Ci
t
y
TV
-xv-
CITY OF LANSING
-xvi-
FINANCIAL SECTION
CITY OF LANSING
Rehmann Robson
675 Robinson Rd.
Jackson, MI 49203
Ph: 517.787.6503
Fx: 517.788.8111
www.rehmann.com
INDEPENDENT AUDITORS’ REPORT
December 27, 2010
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, 2010, 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, 2010, 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.
-1-
In accordance with Government Auditing Standards, we have also issued our report dated
December 27, 2010, 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 read in conjunction with this
report in considering the results of our audit.
The Management’s Discussion and Analysis on pages 3-15 and the historical supplementary
information for the Employees’ and Police and Fire Retirement Systems and other postemployment
benefits listed in the table of contents are not a required part of the basic financial statements but are
supplementary information required by the Governmental Accounting Standards Board. We have
applied certain limited procedures, which consisted principally of inquiries of management regarding
the methods of measurement and presentation of the required supplementary information. However,
we did not audit this information and do not express an 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.
-2-
MANAGEMENT’S DISCUSSION and ANALYSIS
-3-
MANAGEMENT'S DISCUSSION AND ANALYSIS
The management of the City of Lansing, Michigan (“the City”) provides this narrative overview
and analysis of the financial activities of the City for the fiscal year ended June 30, 2010 for the
benefit of the readers of these financial statements. This management’s discussion and analysis
(“MD&A”) is intended to assist the reader in focusing on significant financial issues and provide
an overview of the City’s financial activity. The City encourages the readers to consider the
following information here in conjunction with the financial statements taken as a whole, which
follow this section.
HIGHLIGHTS
Total government-wide assets of the City exceeded its liabilities at the close of the fiscal
year by $438 million (reported as net assets), a decrease of $5.6 million from fiscal year
2008/2009. Component units of the City reported a deficit of net assets of $34.9 million, a
decrease in deficit of $1.1 million from the previous year. This component unit deficit is
planned to be covered by future tax revenue captures in the TIFA, Smart Zone, and
Brownfield Component Units.
As of the close of the 2009/2010 fiscal year, the City’s governmental funds reported
combined ending fund balances of $27.1 million. Of this, $25.8 million is reported as
unreserved fund balance. While reported as “unreserved” on the face of the Government-
Wide Governmental fund Balance Sheet, $4.3 million of the $25.8 million is designated for
use in FY 2010/2011 and $2.2 million is restricted in accordance with State laws, local
ordinances, and trust restrictions, leaving $19.3 million for general operating purposes.
At the end of the fiscal year, unreserved and undesignated fund balance for the General
Fund, combined with the Budget Stabilization Fund, was $5.8 million, a decrease of $3.5
million. General Fund expenditures came in $4.6 more than revenues.
Unreserved/undesignated fund balance decreased by $3.5 million, or 37.3%. Please see the
“General Fund and Budgetary Highlights” section of this Management Discussion and
Analysis (pages 3-15) for further detail.
The business-type activities reported net assets at year-end of $244.9 million, an increase of
$16.3 million during the year which is the result of the receipt of federal stimulus dollars for
the City’s Combined Sewer Overflow (CSO) and tertiary building projects.
The City’s total bonded and loaned debt was $280.6 million at June 30, 2010, an increase of
$12.3 million (or 4.5%), which represents the net difference between new issuances, and
payments and refunding of outstanding debt. During the year, the City issued debt of $30.9
million in limited tax general obligation bonds for its Combined Sewer Overflow (CSO)
abatement project and streets and $8.1 million to refund a Building Authority issue. More
detailed information regarding these activities and funds can be found in footnote 3-G, Long
Term Debt which begins on page 70.
OVERVIEW OF THE FINANCIAL STATEMENTS
This MD&A is an introduction to the City’s basic financial statements, which comprise three
components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes
to the financial statements. This report also contains other required supplementary information in
addition to the basic financial statements.
-4-
Government-wide Statements (Reporting the City as a Whole) These statements include all
non-fiduciary assets and liabilities, but exclude assets and liabilities related to pensions. The
Statement of Net Assets and the Statement of Activities are two financial statements that report
information about the City, as a whole, and about its activities, which provide measurements of
long term trends that should help answer this question: Is the City, as a whole, better off or worse
off as a result of this year’s activities? Unlike the governmental funds, the current year’s revenues
and expenses are taken into account regardless of when cash is received or paid, known as “full
accrual accounting”.
The Statement of Net Assets (page 20) 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 21 and 22) 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 four such discretely presented units; the Lansing Entertainment and Public Facilities
Authority, the Tax Increment Finance Authority, the Brownfield Redevelopment Authority,
and the Lansing Regional SmartZone.
These financial statements include two schedules (pages 27 and 29) 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.
-5-
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.
Capital outlay spending in excess of capitalization thresholds are recorded as capital assets
on the government-wide statements, but are reported as expenditures on the governmental
fund statements.
Bond and note proceeds result in liabilities on the government-wide statements, but are
recorded as other financing sources on the governmental fund statements.
Certain other outflows, such as debt service principal payments, represent decreases in
liabilities on the government-wide statements, but are reported as expenditures on the
governmental fund statements.
The Notes to the Basic Financial Statements provide additional information that is essential to a
full understanding of the data provided in the government-wide and fund financial statements.
The notes can be found beginning on page 49 of this report.
Fund Financial Statements (Reporting the City's Major Funds)
The City’s Major Funds are identified as its Sewage Disposal Fund, and its Parking System Fund,
along with its General Fund. The major fund financial statements begin on page 26. In addition to
major funds, individual fund data for the nonmajor funds begins on page 92. 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.
-6-
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 40. These
funds, which include pension and other employee benefit funds, are reported using full
accrual accounting. The government-wide statements exclude fiduciary fund activities and
balances because these assets are restricted in purpose and do not represent spendable assets
of the City to finance its operations.
Additional Required Supplementary Information
Following the basic financial statements is additional Required Supplementary Information that
further explains and supports the information in the financial statements. The Required
Supplementary Information includes required pension and other postemployment benefit
supplementary information.
Other Supplementary Information
Other supplementary information includes combining financial statements for nonmajor
governmental, proprietary, and fiduciary funds. These funds are added together, by fund type, and
presented in single columns in the basic financial statements, but are not reported individually, as
with major funds, on the governmental fund financial statements.
-7-
FINANCIAL ANALYSIS OF THE GOVERNMENT AS A WHOLE
The City’s combined net assets decreased $5.6 million over the course of this fiscal year’s
operations to a total of $438.2 million. Net assets of governmental activities decreased $22
million or 10.2%, and business-type activities increased $16.4 million or 7.2%.
Net Assets as of June 30,
(in millions of dollars)
Governmental Business-type Total Primary
Activities Activities Government
2010 2009 2010 2009 2010 2009
Assets
Current and other non-current assets 55.2$ 64.4$ 86.6$ 82.1$ 141.8$ 146.5$
Capital assets 223.6 221.4 400.8 383.8 624.4 605.2
Total assets 278.8$ 285.8$ 487.4$ 465.9$ 766.2$ 751.7$
Liabilities
Long-term liabilities 68.0 54.9$ 237.9$ 230.8$ 305.9$ 285.7$
Other liabilities 17.6 15.7 4.5 6.5 22.1 22.2
Total liabilities 85.6$ 70.6$ 242.4$ 237.3$ 328.0$ 307.9$
Net assets
Invested in capital assets, net of related debt 186.5 191.5 194.9 185.4 381.4 376.9
Restricted 14.3 17.1 19.9 19.5 34.2 36.6
Unrestricted (deficit) (7.6) 6.6 30.2 23.7 22.6 30.3
Total net assets 193.2$ 215.2$ 245.0$ 228.6$ 438.2$ 443.8$
The largest component (87.0%) 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 7.8%, 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.
-8-
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
2010 2009 2010 2009 2010 2009
Revenues
Program revenues
Charges for services 18.6$ 20.8$ 41.3$ 40.1$ 59.9$ 60.9$
Operating grants (restricted) 27.5 26.4 1.5 1.6 29.0 28.0
Capital grants 3.1 2.6 11.9 .1 15.0 2.7
General revenues
Taxes 66.4 68.5 - - 66.4 68.5
State shared revenue 14.2 16.0 - - 14.2 16.0
Unrestricted grants and contributions 11.6 11.3 - - 11.6 11.3
Unrestricted investment earnings .3 1.0 .1 .4 .4 1.4
Gain on sale of capital assets .1 - - - .1 -
Total revenues 141.8 146.6 54.8 42.2 196.6 188.8
Expenses
General government, administrative 30.3 26.4 - - 30.3 26.4
Public safety 84.6 71.2 - - 84.6 71.2
Public works 29.2 37.6 - - 29.2 37.6
Recreation and culture 7.3 7.3 - - 7.3 7.3
Community development 9.7 6.4 - - 9.7 6.4
Interest on long-term debt 2.2 1.8 - - 2.2 1.8
Sewage disposal system - - 24.9 26.3 24.9 26.3
Municipal parking system - - 8.3 8.4 8.3 8.4
Cemetery - - .6 .7 .6 .7
Golf - - .9 .9 .9 .9
Garbage and refuse collection - - 1.4 1.5 1.4 1.5
Recycling - - 2.8 3.0 2.8 3.0
Total expenses 163.3 150.7 38.9 40.8 202.2 191.5
Excess before transfers (21.5) (4.1) 15.9 1.4 (5.6) (2.7)
Transfers in (out) (.5) (.5) .5 .5 - -
Changes in net assets (22.0) (4.6) 16.4 1.9 (5.6) (2.7)
Beginning net assets 215.2 219.8 228.6 226.7 443.8 446.5
Ending net assets 193.2$ 215.2$ 245.0$ 228.6$ 438.2$ 443.8$
The increase in Public Safety and Community Development and decrease in Public Works
expenses were due to a change in classification of grant expenses for FY 2010. Previously,
several grants which were classified as Public Works activities; however, it was determined in FY
2010, that some are more fittingly classified as Public Safety and Community Development
activities.
-9-
Governmental Activities:
The following chart depicts revenues of the governmental activities for the fiscal year:
Revenues - Governmental Activities
Fiscal Year Ending June 30, 2010
Property tax and
special assessments
27.5%
Gain on Sale of Capital
Assets
0.1%
Unrestricted Investment
Earnings
0.2%
Unrestricted Grants
and Contributions
8.2%
State Shared Revenue
10.0%
Capital Grants and
Contributions
2.2%
Operating Grants and
Contributions
(restricted)
19.4%
Charges for Services
13.1%
Income Tax
19.3%
Property taxes comprised 27.5%, or $39 million, of Governmental Activity revenue, with
$650,008 representing debt service on voted unlimited tax general obligation debt. The City’s
operating millage is currently 15.44 mills. In accordance with Charter and State Constitutional
provisions, the City may levy up to 19.1692 mills for operations in FY 2010. 3.73 potential mills
remain unlevied, which equates to approximately $6.8 million in potential, but unlevied, property
tax revenue.
Income taxes comprised 19.3%, or $27.4 million, of Governmental Activity revenue which, the
full amount of which is revenue to the General Fund. Local income tax rates are prescribed by
State law, and limited in Lansing’s case to 1% of resident income and 0.5% of the income of
persons working in the City, but living outside of its corporate boundaries. Income tax revenue
decreased $1.9 million from FY 2008/2009 due to economic conditions, most notably shift
reductions and temporary shut-downs at the City’s two General Motors plants (please see
Economic Condition and Outlook contained at the end of this analysis for an update on those
plants).
-10-
Restricted Operating Grants and Contributions made up $27.5 million, or 19.4% of Governmental
Activity revenue. In this category, $17.8 million are recurring revenues from: State Gas &
Weight tax revenues restricted for streets; Community Development, HOME, and Emergency
Shelter entitlement grants; and drug forfeiture funds restricted for drug enforcement efforts. The
remaining $9.7 million is attributable to non-entitlement grants.
Unrestricted Grants and Contributions account for the next-largest category of Governmental
Activity Revenue, comprising 18.2%, or $25.8 million, of revenues. Just-more-than-half of this
category, $14.2 million, is attributed to State revenue sharing, an amount distributed to
municipalities by the State of Michigan by formula allocation of portions of the State sales tax
and motor fuel and weight taxes. Equity payments from the independently-managed-and-
operated Board of Water and Light account for $10.5 million of the category, with remaining $1.1
million coming from payments from the State of Michigan for a payment in lieu of tax for its fire
protection for its properties and reimbursement of liquor license enforcement costs.
The following chart depicts expenses of the governmental activities for the fiscal year:
Expenses - Governmental Activities
Fiscal Year Ending June 30, 2010
General Government
(administrative)
18.6%
Public Safety
51.8%
Public Works
17.9%
Recreation and Culture
4.5%
Community
Development
5.9%
Interest on Long-term
Debt
1.4%
Transfers
0.0%
Business-type Activities
Net assets of the business-type activities increased by $16.3 million during the fiscal year. The
main cause of this large increase was $11.9 million received in grant monies for its Combined
Sewer Overflow (CSO) sewer project and renovations to its tertiary building.
-11-
FINANCIAL ANALYSIS OF THE CITY’S FUND STATMENTS
As the City completed the fiscal year, its governmental funds (see pages 92-125) reported fund
balances of $27.1 million. Of this total amount, $21 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 $110,986 in the General Fund.
Further, of the total amount of $21 million, $9.3 million constitutes unreserved fund balances but
are restricted for the purposes for which of the funds were set up.
General Fund and Budgetary Highlights
The FY 2009/2010 budget was adopted as a balanced budget, based on projected revenues,
without any use of reserves. Due to the effects of the State’s ongoing budgetary challenges,
compounded by what is now called the “Great Recession,” revenues came in much lower than
anticipated. Shortly after the beginning of the fiscal year, the State announced $2 million in cuts
to municipal revenue sharing. That fact, combined with declining income tax, interest earnings
revenues and bankruptcies affecting property taxes lead to a budget amendment to reduce
expenditures and revenue projections by $3 million during the year. During the year, revenue
projections were further downgraded as the impact of the declining economy and General
Motor’s looming bankruptcy, resulting in reduced shifts, shut-downs, and layoffs further
impacted income tax revenue receipts. This resulted in a second budget amendment to the
General Fund’s budget. Due to the timing of the revenue decline in the last half of the year,
expenditures could not be reduced by the amount of revenue loss, and the budget was amended to
include a $3.4 million use of reserves. In the last couple months of the fiscal year, the State
unexpectedly reduced the personal property tax multipliers used to assess the General Motors and
auto supply companies. This resulted in an additional $1.5 million reduction to General Fund
revenues.
In light of the significant loss of revenues, measures were enacted to reduce expenditures where
possible – by reducing capital spending and utilizing accumulated storm sewer revenues to
reimburse the General Fund for storm sewer activities. At year-end, General Fund expenditures
exceeded revenues by $4.6 million, resulting in a year-end unrestricted, undesignated fund
balance of $110,986. When combined with the Budget Stabilization Fund (contained in the
Special Revenue Fund section of these financial statements), total unrestricted, undesignated fund
balance was $5.8 million, or 5.3% of revenues.
The FY 2010/2011 budget, adopted at a level commensurate with the revenue levels experienced
in FY 2010, does not include any use of reserves. As of the printing of this report in the second
quarter of the new fiscal year, revenues are expected to come in at budget levels.
Sewage Disposal Fund
Net assets increased $15.6 million to $220.5 million in FY 2010. $11.9 million of that increase
resulted in the receipt of American Reinvestment and Recovery Act (ARRA) monies for its
Combined Sewer Overflow and tertiary building projects. The remaining $3.7 million of the
increase resulted from operations during the fiscal year of increased revenues and lower operating
costs.
Parking Fund
The Municipal Parking Fund net assets increased $704,978 as a result of operations.
-12-
Budget Stabilization Fund
Fund balance at June 30, 2010 remained at $5.7 million. The Fund is limited by Ordinance to
10% of year-end General Fund appropriations. No amounts were appropriated or spent from the
fund in FY 2009/2010, nor are any amounts appropriated for the FY 2010/2011 budget.
Capital Assets
Capital Assets: At the end of the fiscal year 2010, the City had invested $624.5 million, net of
accumulated depreciation, in a broad range of capital assets (see the table below). Additional
information regarding the City’s capital assets can be found in the notes to the basic financial
statements. For more detailed information, please refer to footnote 3-D.
Governmental Business-type Total Primary
Activities Activities Government
2010 2009 2010 2009 2010 2009
Land 24.7$ 24.7$ 13.6$ 13.6$ 38.3$ 38.3$
Land improvements 6.1 5.5 13.1 13.6 19.2 19.1
Buildings and improvements 55.9 56.9 100.4 103.1 156.3 160.0
Equipment 7.5 6.6 .9 .9 8.4 7.5
Infrastructure 120.3 120.5 178.5 184.9 298.8 305.4
Subtotal 214.5 214.2 306.5 316.1 521.0 530.3
Construction in progress 9.1 7.2 94.4 67.7 103.5 74.9
Total 223.6$ 221.4$ 400.9$ 383.8$ 624.5$ 605.2$
Capital Assets as of June 30,
(net of depreciation, in millions of dollars)
Debt Administration
The City, along with the Lansing Building Authority (LBA), a blended component unit of the
City, is empowered by law to authorize, issue, and sell debt obligations. Limited tax and
unlimited tax general obligation bonds are backed by the full faith and credit of the City. The City
also issues revenue-dedicated bonded debt, whose payment for principal and interest comes
solely out of funds that receive legally-restricted revenues. The Sewage Disposal fund has the
City’s only dedicated revenue bonds currently outstanding. LBA’s bonds financed the
construction of parking, golf course, and firing range improvements. Revenues derived from user
fees from persons using parking and golf facilities fund the debt service requirements for related
improvements, but they are also backed by a limited tax pledge. More detailed information
regarding the City’s long-term obligations is presented in Note 3-G (Long-Term Debt) to the
financial statements..
-13-
2010 2009
Governmental:
General obligation bonds (backed by the City) 26.15 17.64
Installment purchase contracts 10.93 12.39
Loans 1.04 1.29
Sub-total 38.12 31.32
Business Type:
General obligation bonds (backed by the City) 202.82 194.43
Revenue bonds and notes (backed by specific fee revenues) 35.44 38.29
Loans 4.18 4.18
Sub-total 242.44 236.90
Total $280.56 $268.22
Outstanding Debt as of June 30,
(in millions of dollars)
During the year, the City issued debt of $30.9 million in limited tax general obligation bonds for
its Combined Sewer Overflow (CSO) abatement project and streets and $8.1 million to refund a
Building Authority issue. More detailed information regarding these activities and funds can be
found in footnote 3-G, Long Term Debt which begins on page 70.
ECONOMIC CONDITION AND OUTLOOK
The State of Michigan’s economic challenges, including the national recession, American
automobile industry crisis, housing market and foreclosure impacts on property tax revenues,
combined with rising labor force and healthcare costs, continues to place budgetary and fiscal
constraints on the City of Lansing. A structural imbalance between revenue and expenditure
growth exists, as is the case for the majority of cities, especially those that are urban centers, in
Michigan.
To address these budgetary challenges, and to protect vital services to the public, since his
inauguration in January, 2006, Mayor Bernero has implemented a budgetary strategy of
maximizing revenues; reducing expenses; improving operational and technological efficiencies;
consolidating like functions; collaborating with neighboring municipalities, counties, and non-
profit entities to provide funding for City-owned assets that benefit the entire region, as
demonstrated by the transfer of Potter Park Zoo operations this fiscal year to Ingham County.
The Mayor also continues to work aggressively with the unions to contain the rising cost of
healthcare and other compensation issues.
-14-
In this historic economic downturn, including the credit crisis in the private sector, the City saw
significant economic development announcements and national recognition (see Economic
Condition and Outlook in the Transmittal Letter). The City is poised to experience continued,
significant economic growth in the next several years. As with other municipalities, especially in
Michigan, the City government will continue to face significant challenges in this climate of
declining property values and revenues in the face of rising compensation, healthcare, and energy
costs. The Mayor is committed to directing the City in a fiscally responsible manner -- living
within the City’s means and not relying on reserves to balance the budget.
CONTACTING THE CITY FINANCE DEPARTMENT
This financial report is designed to provide our citizens, taxpayers, customers, investors, and
creditors with a general overview of the City’s finances and to demonstrate the City’s
accountability for the money it receives. If you have any questions about this report or need
additional financial information, contact the Finance Department at (517) 483-4500.
-15-
CITY OF LANSING
-16-
BASIC FINANCIAL STATEMENTS
-17-
CITY OF LANSING
-18-
GOVERNMENT-WIDE FINANCIAL STATEMENTS
-19-
City of Lansing
Statement of Net Assets
June 30, 2010
Primary Government
Governmental Business-type Component
Activities Activities Totals Units
Assets
Cash and investments 41,214,515$ 1,376,419$ 42,590,934$ 1,965,611$
Receivables, net 37,238,900 33,762,054 71,000,954 2,924,787
Internal balances (28,385,416) 28,385,416 - -
Inventories, prepaids and other assets 2,809,697 2,017,806 4,827,503 296,287
Restricted assets:
Cash and investments - 20,775,852 20,775,852 2,501,439
Receivables, net - 228,684 228,684 -
Net other postemployment benefit asset 2,260,157 - 2,260,157 -
Net pension asset 18,968 - 18,968 -
Capital assets not being depreciated 33,798,886 107,990,894 141,789,780 -
Capital assets being depreciated, net 189,802,280 292,859,133 482,661,413 86,893
Total assets 278,757,987 487,396,258 766,154,245 7,775,017
Liabilities
Accounts payable and
accrued liabilities 15,591,345 3,135,179 18,726,524 2,870,333
Accrued interest payable 366,848 1,257,637 1,624,485 13,152,027
Unearned revenues 1,609,980 118,366 1,728,346 242,584
Long-term liabilities:
Due within one year 12,395,703 17,869,061 30,264,764 2,020,887
Due in more than one year 42,664,153 220,050,966 262,715,119 24,381,427
Net other postemployment benefit obligation 12,938,273 - 12,938,273 -
Total liabilities 85,566,302 242,431,209 327,997,511 42,667,258
Net assets
Invested in capital assets, net
of related debt 186,536,428 194,854,140 381,390,568 62,850
Restricted for:
Public safety 955,858 - 955,858 -
Public works 5,889,230 - 5,889,230 -
State mandated programs 554,000 - 554,000 -
Debt service - 18,218,134 18,218,134 -
Capital projects 5,256,051 1,699,207 6,955,258 -
Endowments (nonexpendable) 1,649,550 - 1,649,550 -
Unrestricted (deficit) (7,649,432)30,193,568 22,544,136 (34,955,091)
Total net assets (deficit)193,191,685$ 244,965,049$ 438,156,734$ (34,892,241)$
The accompanying notes are an integral part of the financial statements.
-20-
City of Lansing
Statement of Activities
For the Year Ended June 30, 2010
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 30,326,671$ 6,565,263$ 1,670,346$ -$ (22,091,062)$
Public safety 84,566,215 8,589,146 9,968,295 - (66,008,774)
Public works 29,252,516 2,788,112 11,078,288 3,109,410 (12,276,706)
Recreation and culture 7,312,480 587,906 243,818 - (6,480,756)
Community development 9,715,087 69,250 4,551,437 - (5,094,400)
Interest on long-term debt 2,229,288 - 3,708 - (2,225,580)
Total governmental activities 163,402,257 18,599,677 27,515,892 3,109,410 (114,177,278)
Business-type activities:
Sewage disposal system 24,931,075 28,907,772 842 11,887,299 15,864,838
Municipal parking system 8,305,095 7,396,219 1,535,065 - 626,189
Cemetery 659,584 226,973 - 40,809 (391,802)
Golf 869,003 438,315 - - (430,688)
Garbage and rubbish collection 1,451,059 1,677,428 - - 226,369
Recycling 2,804,047 2,651,309 - - (152,738)
Total business-type activities 39,019,863 41,298,016 1,535,907 11,928,108 15,742,168
Total primary government 202,422,120$ 59,897,693$ 29,051,799$ 15,037,518$ (98,435,110)$
Component units
Brownfield redevelopment 3,938,907$ -$ 2,950,785$ -$ (988,122)$
Community development 4,671,831 - - - (4,671,831)
Recreation and culture 5,861,807 4,805,894 1,098,027 - 42,114
Smart zone 13,041 - - - (13,041)
Total component units 14,485,586$ 4,805,894$ 4,048,812$ -$ (5,630,880)$
Continued…
-21-
City of Lansing
Statement of Activities (Concluded)
For the Year Ended June 30, 2010
Primary Government
Governmental Business-type Component
Activities Activities Totals Units
Changes in net assets
Net (expense) revenue (114,177,278)$ 15,742,168$ (98,435,110)$ (5,630,880)$
General revenues
Property taxes 39,010,960 - 39,010,960 6,751,556
Income taxes 27,408,443 - 27,408,443 -
Grants and contributions not
restricted to specific programs 25,847,423 - 25,847,423 -
Unrestricted investment earnings 246,495 141,899 388,394 11,068
Gain on sale of capital assets 75,094 - 75,094 -
Transfers - internal activities (464,807) 464,807 - -
Total general revenues and
transfers 92,123,608 606,706 92,730,314 6,762,624
Change in net assets (22,053,670) 16,348,874 (5,704,796) 1,131,744
Net assets (deficit), beginning of year 215,245,355 228,616,175 443,861,530 (36,023,985)
Net assets (deficit), end of year 193,191,685$ 244,965,049$ 438,156,734$ (34,892,241)$
The accompanying notes are an integral part of the financial statements.
-22-
GOVERNMENT-WIDE FINANCIAL STATEMENTS
-23-
CITY OF LANSING
-24-
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 96.
Debt Service funds, page 114.
Capital Projects funds, page 118.
Permanent funds, page 124.
-25-
City of Lansing
Balance Sheet - Governmental Funds
June 30, 2010
Other
Governmental
General Funds Totals
Assets
Cash and cash equivalents 2,458,894$ 890,697$ 3,349,591$
Equity in pooled cash 10,952,956 16,062,295 27,015,251
Investments - 6,370,745 6,370,745
Accounts receivable, net 15,690,593 1,584,988 17,275,581
Taxes receivable 1,029,824 - 1,029,824
Special assessments receivable - 913,800 913,800
Loans receivable - 1,439,990 1,439,990
Accrued interest receivable 282 1,871,796 1,872,078
Due from other funds 4,189,415 4,739,507 8,928,922
Interfund receivable - 1,250,411 1,250,411
Advances to other funds - 80,531 80,531
Due from other governments 4,993,162 7,451,967 12,445,129
Due from component units 1,589,214 - 1,589,214
Inventories 59,922 1,050,623 1,110,545
Prepaids 42,810 - 42,810
Total assets 41,007,072$ 43,707,350$ 84,714,422$
Liabilities and fund balances
Liabilities
Accounts payable 1,580,175$ 2,724,935$ 4,305,110$
Deposits payable - 49,575 49,575
Accrued payroll 1,618,040 217,643 1,835,683
Retainage payable 2,188,150 - 2,188,150
Indemnity bonds - 1,920 1,920
Due to other funds 31,200,962 7,552,453 38,753,415
Interfund payable - 28,107 28,107
Advance from other funds -271,454 271,454
Due to other governments 1,333,846 899,782 2,233,628
Deferred revenue 2,188,782 5,363,175 7,551,957
Other 405,324 - 405,324
Total liabilities 40,515,279 17,109,044 57,624,323
Fund balances
Reserved for advances - 80,531 80,531
Reserved for inventories 59,922 1,050,623 1,110,545
Reserved for prepaids 42,810 - 42,810
Reserved for encumbrances - 46,844 46,844
Unreserved, designated for
subsequent years' expenditures:
General fund 278,075 - 278,075
Special revenue funds - 4,037,312 4,037,312
Unreserved, undesignated reported in:
General fund 110,986 - 110,986
Special revenue funds - 7,992,368 7,992,368
Debt service funds -126,434 126,434
Capital projects funds - 11,614,644 11,614,644
Permanent funds - 1,649,550 1,649,550
Total fund balances 491,793 26,598,306 27,090,099
Total liabilities and fund balances 41,007,072$ 43,707,350$ 84,714,422$
The accompanying notes are an integral part of the financial statements.
-26-
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, 2010
Fund balances - total governmental funds 27,090,099$
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 473,877,760
Deduct - accumulated depreciation (256,951,060)
Because the focus of governmental funds is on short-term financing, some
assets will not be available to pay for current expenditures. Those assets
(i.e., receivables) are offset by deferred revenues in the governmental funds
and, therefore, are not included in fund balance.
Add - deferred ambulance fees 1,334,603
Add - deferred nuisance fees 854,179
Add - deferred loans receivable 1,185,000
Add - deferred long-term interest receivable 1,870,867
Add - deferred long-term special assessments 697,328
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.7,734,964
Prepaid costs related to other postemployment benefits are not available for current period
expenditures and, therefore, are not reported in the funds.
Add - other postemployment benefit plan asset 2,260,157
Add - net pension asset 18,968
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 (37,326,394)
Deduct - accrued interest on bonds, loans and leases payable (350,709)
Add - deferred bond issuance costs 50,124
Deduct - other postemployment benefit obligation (12,938,273)
Deduct - compensated absences and other long-term liabilities (16,215,928)
Net assets of governmental activities 193,191,685$
The accompanying notes are an integral part of the financial statements.
-27-
City of Lansing
Statement of Revenues, Expenditures
and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2010
Other
Governmental
General Funds Totals
Revenues
Taxes and special assessments 37,965,131$ 1,314,212$ 39,279,343$
Income taxes 27,408,443 - 27,408,443
Licenses and permits 1,414,906 - 1,414,906
Intergovernmental 15,352,251 23,784,966 39,137,217
Charges for services 9,900,096 8,423,062 18,323,158
Fines and forfeits 3,284,982 1,294,193 4,579,175
Interest and rents 179,162 71,041 250,203
Contributions 10,596,368 10,000 10,606,368
Donations from private sources - 9,000 9,000
Other revenues 212,248 260,875 473,123
Total revenues 106,313,587 35,167,349 141,480,936
Expenditures
Current expenditures:
General government 25,418,251 2,421,313 27,839,564
Public safety 63,442,190 7,377,994 70,820,184
Public works 5,748,672 - 5,748,672
Highways and streets - 8,758,310 8,758,310
Recreation and culture 8,030,917 96,783 8,127,700
Other functions 2,251,682 12,930,993 15,182,675
Debt service:
Principal 778,306 2,491,762 3,270,068
Interest 966,740 1,199,236 2,165,976
Capital outlay - 14,781,728 14,781,728
Total expenditures 106,636,758 50,058,119 156,694,877
Revenues under
expenditures (323,171) (14,890,770) (15,213,941)
Other financing sources (uses)
Transfers in 1,831,865 14,349,725 16,181,590
Transfers out (6,093,827) (10,552,570) (16,646,397)
Proceeds on sale of capital assets 689 - 689
Issuance of long-term debt - 10,197,000 10,197,000
Bond discount - (50,883) (50,883)
Total other financing sources (uses) (4,261,273) 13,943,272 9,681,999
Net change in fund balances (4,584,444) (947,498) (5,531,942)
Fund balances, beginning of year 5,076,237 27,545,804 32,622,041
Fund balances, end of year 491,793$ 26,598,306$ 27,090,099$
The accompanying notes are an integral part of the financial statements.
-28-
City of Lansing
Reconciliation of the Statement of Revenues, Expenditures
and Changes in Fund Balances of Governmental Funds
to the Statement of Activities
For the Year Ended June 30, 2010
Net change in fund balances - total governmental funds (5,531,942)$
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 16,262,497
Deduct - depreciation expense (12,880,797)
Deduct - loss on disposal of capital assets (2,332,938)
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 209,779
Deduct - change in nuisance fees (2,510)
Add - change in long-term interest receivable 69,250
Deduct - change in deferred special assessments (19,155)
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.
Deduct - net operating loss from governmental activities in internal service funds (2,995,122)
Add - gain on sale of capital assets from governmental internal service funds 75,094
Deduct - interest expense from governmental internal service funds (53,886)
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 (10,197,000)
Add - principal payments on long-term liabilities 3,270,068
Add - discount on bond issuances 50,883
Certain expenditures are reported in governmental funds that reduce long-term
liabilities for purposes of the statement of net assets.
Deduct - increase in liability for workers' compensation (374,821)
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 (27,796)
Add - amortization of debt-related costs 18,370
Deduct - decrease in other postemployment benefit obligation (7,803,528)
Deduct - decrease in net pension asset (798,115)
Add - decrease in the accrual for compensated absences 1,007,999
Change in net assets of governmental activities (22,053,670)$
The accompanying notes are an integral part of the financial statements.
-29-
City of Lansing
Statement of Revenues, Expenditures
and Changes in Fund Balances - Budget and Actual
General Fund
For the Year Ended June 30, 2010
Budget Variance with
Original Final Actual Final Budget
Revenues
Property taxes 38,678,220$ 38,478,220$ 37,965,131$ (513,089)$
Income taxes 30,300,000 29,100,000 27,408,443 (1,691,557)
Licenses and permits 1,588,200 1,588,200 1,414,906 (173,294)
Intergovernmental 17,643,793 15,543,793 15,352,251 (191,542)
Charges for services 11,134,458 11,106,758 9,900,096 (1,206,662)
Fines and forfeits 3,897,050 3,924,750 3,284,982 (639,768)
Interest and rents 928,900 299,800 179,162 (120,638)
Contributions 11,949,600 11,359,917 10,596,368 (763,549)
Other revenues 152,200 181,300 212,248 30,948
Total revenues 116,272,421 111,582,738 106,313,587 (5,269,151)
Expenditures
General government:
Attorney's office 1,351,000 1,339,000 1,338,553 447
City TV 195,805 191,705 190,440 1,265
City clerk 899,377 807,827 820,243 (12,416)
Council 624,274 612,174 569,925 42,249
Courts 5,356,780 5,275,030 5,231,094 43,936
Internal audit 150,720 147,020 140,606 6,414
Finance 10,483,840 10,199,669 10,113,457 86,212
Library rental 160,000 160,000 152,110 7,890
LEPFA support 1,098,027 1,098,027 1,098,027 -
Human resources 1,816,320 1,772,320 1,699,184 73,136
Mayor 725,144 713,944 692,250 21,694
Planning / neighborhood development 3,651,370 3,460,670 3,372,362 88,308
Budgetary savings from attrition (1,000,000) - - -
Total general government 25,512,657 25,777,386 25,418,251 359,135
Public safety:
Police 34,319,970 33,763,494 33,843,508 (80,014)
Fire 30,050,300 29,527,678 29,598,682 (71,004)
Total public safety 64,370,270 63,291,172 63,442,190 (151,018)
Public works:
Environmental 5,894,641 5,861,348 5,608,357 252,991
Sidewalks and alleys 197,449 195,742 140,315 55,427
Total public works 6,092,090 6,057,090 5,748,672 308,418
Parks and recreation 8,790,130 8,242,732 8,030,917 211,815
Other functions:
Human relations / community services 667,910 651,410 638,229 13,181
Human services / community support 1,740,650 1,891,528 1,613,453 278,075
Total other functions 2,408,560 2,542,938 2,251,682 291,256
Continued…
-30-
City of Lansing
Statement of Revenues, Expenditures
and Changes in Fund Balances - Budget and Actual (Concluded)
General Fund
For the Year Ended June 30, 2010
Budget Variance with
Original Final Actual Final Budget
Expenditures (concluded)
Debt service:
Principal 1,188,565$ 1,188,565$ 778,306$ 410,259$
Interest and fees 598,950 598,950 966,740 (367,790)
Total debt service 1,787,515 1,787,515 1,745,046 42,469
Total expenditures 108,961,222 107,698,833 106,636,758 1,062,075
Revenues over (under) expenditures 7,311,199 3,883,905 (323,171) (4,207,076)
Other financing sources (uses)
Transfers in 915,579 915,579 1,831,865 916,286
Transfers out (8,238,778) (8,463,098) (6,093,827) 2,369,271
Proceeds on sale of capital assets 12,000 12,000 689 (11,311)
Total other financing sources (uses)(7,311,199) (7,535,519) (4,261,273) 3,274,246
Net change in fund balance - (3,651,614) (4,584,444) (932,830)
Fund balance, beginning of year 5,076,237 5,076,237 5,076,237 -
Fund balance, end of year 5,076,237$ 1,424,623$ 491,793$ (932,830)$
The accompanying notes are an integral part of the financial statements.
-31-
CITY OF LANSING
-32-
Proprietary Fund Financial Statements
Major Funds
Sewage Disposal System Fund – This fund accounts for the provision of sewage disposal services to the
residents of the City.
Municipal Parking System Fund – This fund accounts for the operation of City-owned parking facilities.
Nonmajor Funds and Internal Service Funds
Nonmajor enterprise funds and internal service funds are presented, by fund type, beginning on the pages listed
below:
Enterprise funds, page 128.
Internal Service funds, page 138.
-33-
City of Lansing
Statement of Fund Net Assets
Proprietary Funds
June 30, 2010
Governmental
Business-type Activities - Enterprise Funds Activities -
Sewage Municipal Other
Disposal Parking Enterprise Internal
System System Funds Totals Service Funds
Assets
Current assets:
Cash and cash equivalents -$ 355,647$ 31,978$ 387,625$ -$
Equity in pooled cash 707,538 - 1,503,360 2,210,898 3,256,624
Receivables:
Accounts, net 3,479,536 85,450 596,063 4,161,049 673,284
Accrued interest - 122,441 - 122,441 -
Lease receivable, current 526,513 1,650,709 - 2,177,222 -
Inventories 85,529 - 106,739 192,268 824,893
Prepaids - - - - 777,620
Due from other funds 17,858,456 13,002,999 - 30,861,455 1,630,000
Advances to other funds - 271,454 - 271,454 -
Restricted assets:
Cash and cash equivalents 19,303,140 1,472,712 - 20,775,852 -
Accounts receivable -226,495 - 226,495 -
Accrued interest receivable 2,189 - - 2,189 -
Total current assets 41,962,901 17,187,907 2,238,140 61,388,948 7,162,421
Noncurrent assets:
Lease receivable 12,889,665 14,411,677 - 27,301,342 -
Bond issue costs 451,456 1,374,082 - 1,825,538 3,705
Capital assets not being depreciated 94,780,653 12,686,588 523,653 107,990,894 55,297
Capital assets being depreciated, net 262,945,165 26,486,390 3,427,578 292,859,133 6,619,169
Total non-current assets 371,066,939 54,958,737 3,951,231 429,976,907 6,678,171
Total assets 413,029,840 72,146,644 6,189,371 491,365,855 13,840,592
Liabilities
Current liabilities:
Accounts payable 2,508,303 172,490 79,743 2,760,536 977,065
Deposits payable - 44,815 - 44,815 -
Accrued interest payable 1,087,195 161,604 8,838 1,257,637 16,139
Accrued payroll 97,628 67,838 39,203 204,669 1,467,484
Retainage payable 70 - - 70 -
Claims incurred but not reported - - - - 2,127,406
Due to other funds 2,286,962 - 380,000 2,666,962 -
Interfund payable - 1,222,104 - 1,222,104 -
Advances from other funds - 80,531 - 80,531 -
Due to other governments 125,089 - - 125,089 -
Unearned revenues - - 118,366 118,366 -
Current portion of:
Long-term debt 12,520,000 4,901,866 75,000 17,496,866 145,000
Compensated absences 243,559 102,503 26,133 372,195 458,164
Total current liabilities 18,868,806 6,753,751 727,283 26,349,840 5,191,258
Noncurrent liabilities:
Long-term debt 173,653,605 45,719,036 552,923 219,925,564 760,000
Compensated absences 82,062 34,536 8,804 125,402 154,370
Total non-current liabilities 173,735,667 45,753,572 561,727 220,050,966 914,370
Total liabilities 192,604,473 52,507,323 1,289,010 246,400,806 6,105,628
Net assets
Invested in capital assets, net of related debt 185,419,847 6,110,985 3,323,308 194,854,140 5,769,466
Restricted for debt retirement 18,218,134 - - 18,218,134 -
Restricted for capital projects - 1,699,207 - 1,699,207 -
Unrestricted 16,787,386 11,829,129 1,577,053 30,193,568 1,965,498
Total net assets 220,425,367$ 19,639,321$ 4,900,361$ 244,965,049$ 7,734,964$
The accompanying notes are an integral part of the financial statements.
-34-
City of Lansing
Statement of Revenues, Expenses
and Changes in Fund Net Assets
Proprietary Funds
For the Year Ended June 30, 2010
Governmental
Business-type Activities - Enterprise Funds Activities -
Sewage Municipal Other
Disposal Parking Enterprise Internal
System System Funds Totals Service Funds
Operating revenues
Charges for services 28,907,772$ 7,396,219$ 4,994,025$ 41,298,016$ 60,045,701$
Operating expenses
Personal services 5,567,015 2,857,451 3,145,957 11,570,423 5,315,359
Purchase of goods and services 7,145,219 1,526,219 2,450,350 11,121,788 56,348,784
Depreciation 7,968,397 1,891,410 149,308 10,009,115 1,376,680
Total operating expenses 20,680,631 6,275,080 5,745,615 32,701,326 63,040,823
Operating income (loss) 8,227,141 1,121,139 (751,590)8,596,690 (2,995,122)
Nonoperating revenues (expenses)
Intergovernmental 11,887,299 - - 11,887,299 -
Interest revenue 58,152 78,789 4,958 141,899 -
Gain on sale of capital assets - - - - 75,094
Interest expense and fees (4,250,444)(2,024,015) (38,078)(6,312,537) (53,886)
Other revenue 842 1,535,065 - 1,535,907 -
Other expenses - (6,000) - (6,000) -
Total nonoperating revenues (expenses) 7,695,849 (416,161) (33,120) 7,246,568 21,208
Income (loss) before
contributions and transfers 15,922,990 704,978 (784,710)15,843,258 (2,973,914)
Capital contributions - - 40,809 40,809 -
Transfers in - - 784,259 784,259 -
Transfers out (300,000) - (19,452) (319,452) -
Change in net assets 15,622,990 704,978 20,906 16,348,874 (2,973,914)
Net assets, beginning of year 204,802,377 18,934,343 4,879,455 228,616,175 10,708,878
Net assets, end of year 220,425,367$ 19,639,321$ 4,900,361$ 244,965,049$ 7,734,964$
The accompanying notes are an integral part of the financial statements.
-35-
City of Lansing
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2010
Governmental
Business-type Activities - Enterprise Funds Activities -
Sewage Municipal Other
Disposal Parking Enterprise Internal
System System Funds Totals Service Funds
Cash flows from operating activities
Cash received from customers 30,418,090$ 7,556,329$ 4,835,607$ 42,810,026$ -$
Cash received from interfund services - - - - 62,639,065
Cash payments for goods and services (23,348,822) (13,653,436)(2,308,566) (39,310,824) (56,130,540)
Cash payments to employees (5,588,128) (2,869,553) (3,149,583) (11,607,264) (4,101,685)
Other receipts 842 1,529,065 - 1,529,907 -
Net cash provided by (used for)
operating activities 1,481,982 (7,437,595) (622,542) (6,578,155) 2,406,840
Cash flows from noncapital financing activities
Transfers in - - 784,259 784,259 -
Transfers out (300,000) - (19,452) (319,452) -
Net cash provided by (used for)
noncapital financing activities (300,000) - 764,807 464,807 -
Cash flows from capital and related financing activities
Proceeds from sale of capital assets - - - - 75,094
Acquisition and construction of capital assets (25,530,031) (1,518,856) - (27,048,887) (2,501,014)
Capital contributions received - - 40,809 40,809 -
Capital grants received 11,887,299 - - 11,887,299 -
Principal paid on revenue and general obligation bonds (11,135,000) (5,295,000) (70,000) (16,500,000) (135,000)
Interest paid on revenue and general obligation bonds (4,269,270) (1,294,160) (37,470) (5,600,900) (53,233)
Proceeds from issuance of long-term debt 20,781,706 1,266,691 - 22,048,397 -
Payments received on capital lease (1,098,600) 2,309,454 - 1,210,854 -
Net cash used for
capital and related financing activities (9,363,896) (4,531,871) (66,661) (13,962,428) (2,614,153)
Cash flows from investing activities
Interest and dividends 58,152 78,789 4,958 141,899 -
Net increase (decrease) in cash and cash equivalents (8,123,762) (11,890,677) 80,562 (19,933,877) (207,313)
Cash and cash equivalents, beginning of year 28,134,440 13,719,036 1,454,776 43,308,252 3,463,937
Cash and cash equivalents, end of year 20,010,678$ 1,828,359$ 1,535,338$ 23,374,375$ 3,256,624$
Continued…
-36-
City of Lansing
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2010
Governmental
Business-type Activities - Enterprise Funds Activities -
Sewage Municipal Other
Disposal Parking Enterprise Internal
System System Funds Totals Service Funds
Reconciliation of operating income (loss) to
net cash provided by (used for) operating activities
Operating income (loss) 8,227,141$ 1,121,139$ (751,590)$ 8,596,690$ (2,995,122)$
Adjustments to reconcile operating income (loss) to
net cash provided by (used for) operating activities
Depreciation expense 7,968,397 1,891,410 149,308 10,009,115 1,376,680
Other receipts 842 1,529,065 - 1,529,907 -
Change in:
Accounts receivable (527,686) 14,628 (158,418) (671,476) (398,579)
Accrued interest receivable 7,825 145,482 - 153,307 -
Inventories - - (34,564) (34,564) (5,892)
Prepaids - - - - (185,331)
Due from other funds (13,256,762)(13,002,999) - (26,259,761) (1,630,000)
Interfund receivable - - - - 4,621,943
Advances from other funds - (271,454) - (271,454) -
Accounts payable (1,978,215) (31,487) 7,211 (2,002,491) 85,203
Deposits payable - (3,095) - (3,095) -
Accrued interest payable 52,285 10,664 (927) 62,022 (2,408)
Accrued payroll (21,113) (12,102) (3,626) (36,841) 1,213,674
Claims incurred but not reported - - - - 263,990
Due to other funds 2,030,179 (1,028) 380,000 2,409,151 -
Interfund payable (979,992) 1,222,104 (174,264) 67,848 -
Unearned revenues - - (26,318) (26,318) -
Compensated absences (40,919) (49,922) (9,354) (100,195) 62,682
Total adjustments (6,745,159) (8,558,734) 129,048 (15,174,845) 5,401,962
Net cash provided by (used for) operating activities 1,481,982$ (7,437,595)$ (622,542)$ (6,578,155)$ 2,406,840$
The accompanying notes are an integral part of the financial statements.
-37-
CITY OF LANSING
-38-
Fiduciary Fund Financial Statements
Pension and Other Post Employment Benefit Trust Funds –Employee Pension and Other 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 142.
-39-
City of Lansing
Statement of Fiduciary Net Assets
Fiduciary Funds
June 30, 2010
Pension and Other
Postemployment Benefit Agency
Trust Funds Funds
Assets
Cash and cash equivalents 10,356,231$ -$
Equity in pooled cash - 116,080
Investments:
U. S. Government obligations 78,766,936 -
Corporate bonds 90,590,658 -
Common stocks 110,095,139 -
Mutual funds 132,593,856 -
Contribution receivable 3,262 -
Dividends and interest receivable 464,185 -
Total assets 422,870,267 116,080$
Liabilities
Accounts payable 6,060,285 -$
Undistributed receipts - 116,080
Total liabilities 6,060,285 116,080$
Net assets held in trust for
Pension benefits 374,293,417
Other postemployment benefits 42,516,565
Total net assets 416,809,982$
The accompanying notes are an integral part of the financial statements.
-40-
City of Lansing
Statement of Changes in Fiduciary Net Assets
Pension and Other Postemployment Benefit Trust Funds
For the Year Ended June 30, 2010
Additions
Investment income:
Net appreciation in fair value
of investments 34,951,120$
Interest income 18,654,596
Dividend income 325,465
Less investment expenses (1,428,822)
Net investment loss 52,502,359
Contributions:
Employer 32,220,882
Plan members 4,152,462
Total contributions 36,373,344
Total additions (net of investment loss) 88,875,703
Deductions
Participant benefits 57,843,783
Administrative expense 48,438
Total deductions 57,892,221
Net deductions to net assets held in trust 30,983,482
Net assets held in trust for pension and other postemployment benefits
Beginning of year 385,826,500
End of year 416,809,982$
The accompanying notes are an integral part of the financial statements.
-41-
CITY OF LANSING
-42-
COMPONENT UNITS
FINANCIAL STATEMENTS
-43-
CITY OF LANSING
-44-
Discretely Presented Component Units
Discretely presented component units are entities that are legally separate from the City but for which the City is
financially accountable, or their relationship with the City is such that exclusion would cause the City’s financial
statements to be misleading or incomplete. The City has four discretely presented component units:
Brownfield Redevelopment Authority
Tax Increment Finance Authority
Lansing Entertainment and Public Facilities Authority
Smart Zone
Complete financial statements for each of the individual component units may be obtained from the entity's
administrative offices.
-45-
City of Lansing
Combining Statement of Net Assets
Component Units
June 30, 2010
Lansing
Tax Entertainment
Brownfield Increment & Public
Redevelopment Finance Facilities Smart
Authority Authority Authority Zone Totals
Assets
Cash and cash equivalents 509,527$ 1,069,919$ 386,165$ -$ 1,965,611$
Receivables, net 2,461,024 198,975 262,176 2,612 2,924,787
Inventories, prepaids and other assets 30,568 173,678 92,041 - 296,287
Restricted cash and cash equivalents - 1,973,114 528,325 - 2,501,439
Capital assets being depreciated, net - - 86,893 - 86,893
Total assets 3,001,119 3,415,686 1,355,600 2,612 7,775,017
Liabilities
Accounts payable and accrued liabilities 2,420,290 - 450,043 - 2,870,333
Accrued interest payable 19,897 13,132,130 - - 13,152,027
Unearned revenues - - 242,584 - 242,584
Long-term debt:
Due within one year 450,000 1,560,073 10,814 - 2,020,887
Due in more than one year 820,000 23,548,198 13,229 - 24,381,427
Total liabilities 3,710,187 38,240,401 716,670 - 42,667,258
Net assets
Invested in capital assets, net of
related debt - - 62,850 - 62,850
Unrestricted (deficit) (709,068) (34,824,715) 576,080 2,612 (34,955,091)
Total net assets (deficit)(709,068)$ (34,824,715)$ 638,930$ 2,612$ (34,892,241)$
The accompanying notes are an integral part of the financial statements.
-46-
City of Lansing
Combining Statement of Activities
Component Units
For the Year Ended June 30, 2010
Lansing
Tax Entertainment
Brownfield Increment & Public
Redevelopment Finance Facilities Smart
Authority Authority Authority Zone Totals
Expenses
Brownfield redevelopment 3,938,907$ -$ -$ -$ 3,938,907$
Community development - 4,671,831 - 13,041 4,684,872
Recreation and culture - - 5,861,807 - 5,861,807
Total expenses 3,938,907 4,671,831 5,861,807 13,041 14,485,586
Program revenues
Charges for services - - 4,805,894 - 4,805,894
Operating grants and contributions 2,950,785 - 1,098,027 - 4,048,812
Total program revenues 2,950,785 - 5,903,921 - 8,854,706
Net program revenue (expense) (988,122) (4,671,831) 42,114 (13,041) (5,630,880)
General revenues
Property taxes 1,308,465 5,452,216 - (9,125) 6,751,556
Unrestricted investment earnings 424 10,187 457 - 11,068
Total general revenues 1,308,889 5,462,403 457 (9,125) 6,762,624
Change in net assets 320,767 790,572 42,571 (22,166) 1,131,744
Net assets (deficit), beginning of year (1,029,835) (35,615,287) 596,359 24,778 (36,023,985)
Net assets (deficit), end of year (709,068)$ (34,824,715)$ 638,930$ 2,612$ (34,892,241)$
The accompanying notes are an integral part of the financial statements.
-47-
CITY OF LANSING
-48-
NOTES to the FINANCIAL STATEMENTS
-49-
City of Lansing, Michigan
Index
Notes to the Financial Statements
Page
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity .................................................................................................... 51
B. Basis of Presentation ............................................................................................. 53
C. Measurement Focus / Basis of Accounting .......................................................... 55
D. Assets, Liabilities and Equity ............................................................................... 56
2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgetary Information .......................................................................................... 59
B. Deficit Fund Balance/Net Assets .......................................................................... 60
3. DETAILED NOTES ON ALL FUNDS
A. Deposits and Investments ..................................................................................... 60
B. Deposits, Investments and Securities Lending –Pension Trust Fund .................. 62
C. Receivables ........................................................................................................... 65
D. Capital Assets ....................................................................................................... 66
E. Payables ................................................................................................................ 68
F. Interfund Receivables, Payables and Transfers .................................................... 68
G. Long-term Debt..................................................................................................... 70
H. Segment Information –Enterprise Funds ............................................................ 73
I. Endowments ......................................................................................................... 73
4. OTHER INFORMATION
A. Risk Management ................................................................................................. 74
B. Property Taxes ...................................................................................................... 74
C. Contingent Liabilities .......................................................................................... 75
D. Defined Benefit Pension Plans ............................................................................. 75
E. Postemployment Benefits ..................................................................................... 82
-50-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
NOTE 1 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1-A. Reporting Entity
The City of Lansing (the “City”) was incorporated in 1859. In 1909, the City came under the
provisions of Act 279, P.A. 1909, as amended (“Home Rule City Act”). The City operates
under a strong Mayor form of government in which the Mayor is responsible for
implementation and administration of City policy as established by City Council.
The accounting and reporting policies of the City conform in all material respects to generally
accepted accounting principles (GAAP) as applicable to governments. The Governmental
Accounting Standards Board (GASB) is the standard setting body for establishing
governmental accounting and financial reporting principles, which are primarily set forth in
the GASB’s Codification of Governmental Accounting and Financial Reporting Standards
(GASB Codification). Following is a summary of the significant policies:
As required by generally accepted accounting principles, these financial statements present the
City and its component units, entities for which the City is considered to be financially
accountable. The financial data of the component units are included in the City’s reporting
entity because of the significance of their operational or financial relationships with the City.
(1) Blended Component Units:A blended component unit is a legally separate entity from
the City but is so intertwined with the City that it is, in substance, the same as the City.
It is reported as part of the City and its financial data is combined with data of the
appropriate funds. The City has one blended component unit, the Building Authority
with a fiscal June 30 year-end. This component unit provides services primarily to
benefit the City. The blended unit is described as follows:
(a) Building Authority (the “Authority”):The Authority was established by the City
under Act 31, Michigan Public Acts of 1948. The Mayor, with the advice and
consent of City Council, appoints the Authority's governing body and designates
management. The Authority uses the proceeds of its tax-exempt bonds to finance
the construction or acquisition of capital assets for the City only. The bonds are
secured by lease agreements with the City and will be retired through lease
payments from the City. The financial activity, assets, liabilities and equity of the
Authority are incorporated within the City’s Municipal Parking System and Golf
enterprise funds, and the 1998 Building Authority Debt Service Fund.
(2)Discretely Presented Component Units:Discretely presented component units are
entities that are legally separate from the City but for which the City is financially
accountable, or their relationship with the City is such that exclusion would cause the
City’s financial statements to be misleading or incomplete. The City has four discretely
presented component units, the Brownfield Redevelopment Authority, the Tax
Increment Financing Authority, the Lansing Entertainment and Public Facilities
Authority, and the Smart Zone, each with a fiscal June 30 year-end. The discretely
presented component units are as follows:
-51-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
(a)Brownfield Redevelopment Authority:The Brownfield Redevelopment
Authority was established by the City on August 17, 1997, under the authority
contained in Act 381, Michigan Public Acts of 1996 (the “Act”). The Act authorizes
the City to establish and to designate the boundaries of a Brownfield redevelopment
zone. The Brownfield Redevelopment Authority is appointed by City Council to
preside over such a zone, and it is authorized to promote the revitalization of
environmentally distressed areas within the City of Lansing. The Act allows the
Brownfield Redevelopment Authority to participate in a broad range of
improvement activities intended to encourage the reuse of industrial and
commercial property by offering economic incentives for redevelopment to prevent
property value deterioration. Tax increment financing plans must be approved by
the City.
Tax increment financing permits the Brownfield Redevelopment Authority to
capture tax revenues which are attributable to increases in the value of real and
personal property located within an approved project area. Current activities of the
Brownfield Redevelopment Authority include collections of property tax revenues
on project areas for the Rite Aid Pharmacy and the former Motor Wheel Site Plant.
(b)Tax Increment Finance Authority (“TIFA”):The TIFA was established by the
City under the authority contained in Act 450, Michigan Public Acts of 1981 (“Act
450”). Act 450 authorizes the City to designate specific districts within its
corporate limits as TIFA districts. The TIFA presides over such districts,
formulating plans for public improvements, economic development, neighborhood
revitalization, and historic preservation within the districts. Act 450 allows the
TIFA to participate in a broad range of improvement activities intended to
contribute to economic growth and prevent property value deterioration. The
TIFA’s governing body is appointed by the Mayor with the advice and consent of
the City Council. Bond issuances, to fund the above activities, are approved by the
City Council and the legal liability for the debt remains with the City.
(c)Lansing Entertainment and Public Facilities Authority (“LEPFA”):LEPFA
was established under the charter of the City of Lansing in February 1996, replacing
the former Greater Lansing Convention/Exhibition Authority, which had been
responsible for operating and managing the Lansing Center and the Lansing Civic
Arena (the latter through the fiscal year ended June 30, 1995). LEPFA was
established to oversee the management and operations of the Lansing Center, the
City Market and the Cooley Law School stadium.
LEPFA is chartered as a building authority under the provisions of Act 31, Public
Acts of Michigan, 1948. In the event of dissolution or termination of LEPFA, all
assets and rights of the Authority shall revert to the City. LEPFA's Board of
Commissioners consists of thirteen members appointed by the Mayor of the City of
Lansing and approved by the City Council.
-52-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
(d)Lansing Regional SmartZone (“Smart Zone”): The Smart Zone was established
by the City of Lansing and the City of East Lansing under the authority contained in
Act 281, Public Act of Michigan of 1986 (“Act 281”). Act 281 authorizes the Cities
to create a multi-jurisdictional local development finance authority. The Smart
Zone shall be known and exercise its powers under title of the Local Development
Finance Authority of the Cities of Lansing and East Lansing. The Smart Zone was
created in order to eliminate the conditions of unemployment, underemployment
and joblessness, and to promote economic growth in the City. The Smart Zone's
Board of Commissioners consists of seven members, three of which are appointed
by the City of Lansing, three are appointed by the City of East Lansing, and one is
appointed by the Ingham County Board of Commissioners.
Component Unit Financial Statements: Complete financial statements for 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.
-53-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
Fund Financial Statements. The fund financial statements provide information about the City’s
funds, including its fiduciary funds and blended component unit. Separate statements for each fund
category –governmental, proprietary and fiduciary – are presented. The emphasis of fund financial
statements is on major governmental and enterprise funds, each displayed in a separate column. All
remaining governmental and enterprise funds are aggregated and reported as nonmajor funds.
The City reports the following major governmental fund:
General fund.This fund is the City’s primary operating fund. It accounts 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 and other postemployment benefit trust funds. These funds account for the
accumulation of resources to be used for retirement annuity payments to eligible full-time
employees of the City, certain healthcare costs, and other retirement distributions.
-54-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
Agency Funds. These funds account for resources held in a trustee or agent capacity for the 54-
A District Court.
1-C. Measurement Focus / Basis of Accounting
Government-wide, Proprietary and Fiduciary Fund Financial Statements. The government-wide,
proprietary and fiduciary fund financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, except for agency funds, which do not have
a measurement focus. Revenues are recorded when earned and expenses are recorded at the time
liabilities are incurred, regardless of when the related cash flows take place.
Proprietary fund operating revenues, such as charges for services, result from exchange transactions
associated with the principal activity of the fund. Exchange transactions are those in which each
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.
-55-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
All governmental and business-type activities and enterprise funds of the City follow private-sector
standards of accounting and financial reporting 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.
As a general rule the effect of interfund activity has been eliminated from the government-wide
financial statements. Exceptions to this general rule are payments in lieu of taxes and various other
functions of the government. Elimination of these charges would distort the direct costs and
program revenues reported for the various functions concerned.
1-D. Assets, Liabilities and Equity
Deposits and Investments
The City maintains an investment pool for all City funds. Each fund’s portion of the investment
pool is displayed on the statement of net assets/balance sheet as “equity in pooled cash.” The City’s
cash and cash equivalents are considered to be cash on hand, demand deposits and short-term
investments with original maturities of three months or less from the date of acquisition.
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.
-56-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
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
-57-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
Compensated Absences
It is the government’s policy to permit employees to accumulate earned but unused vacation and
compensatory time benefits, subject to certain limitations. Certain bargaining unit employees are
also permitted to accumulate earned but unused sick leave. All vacation and compensatory time pay
and 50 percent of sick leave are accrued when incurred in the government-wide and proprietary
fund financial statements. A liability for these amounts is reported in governmental funds only if
they have matured, for example, as a result of employee resignations or retirements.
Long-term Obligations
In the government-wide financial statements, and proprietary fund types in the fund financial
statements, long-term debt and other long-term obligations are reported as liabilities in the
applicable governmental activities, business-type activities, or proprietary fund type statement of
net 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.
-58-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
NOTE 2 –STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
2-A. Budgetary Information
The City follows these procedures in establishing the budgetary data reflected in the financial
statements:
On or before the fourth Monday in March, the Mayor submits to the City Council a proposed
operating budget for the fiscal year commencing the following July 1. The operating budget
includes proposed expenditures and the means of financing them.
A public hearing on the proposed use of funds is held by the Mayor, and a public hearing on the
annual appropriations as proposed by the City Council is held no later than one week prior to
adoption of the annual appropriation measure.
Not later than the third Monday in May, the Council adopts a budget for the ensuing fiscal year,
makes an appropriation of the money needed therefore, and sets the property tax rate necessary
to support the appropriations measure.
The appropriated budget is prepared by fund, department and the mandatory expenditure
accounts as established by the State of Michigan’s Uniform Chart of Accounts. 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.
-59-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
2-B. Deficit Fund Balance/Net Assets
Governmental activities has a deficit in unrestricted net assets in the amount of $7,649,432 at
June 30, 2010. Total net assets amounted to a positive $193,191,685.
The Special Assessments capital projects fund has a deficit fund balance of $149,673. The fund
received a long-term advance from the general fund that was used to provide the working capital for
the fund in prior years. The deficit is the result of deferred special assessments receivable. As
special assessments are collected, this deficit will be eliminated, and the advance repaid.
The Golf enterprise fund has a deficit in unrestricted net assets in the amount of $136,937 at
June 30, 2010. Total net assets amounted to a positive $2,166,061.
The Fringe benefits internal service fund has a deficit net asset balance of $2,146,007.
NOTE 3 –DETAILED NOTES ON ALL FUNDS
3-A. Deposits and Investments
Following is a reconciliation of deposit and investment balances for the primary government
(including both pooled cash and investments as well as pension trust fund balances; see Note 3-B)
as of June 30, 2010:
Statement of Net Assets
Cash and investments $ 42,590,934
Restricted cash and investments 20,775,852
Statement of Fiduciary Net Assets
Pension trust funds:
Cash and cash equivalents 10,356,231
Investments 412,046,589
Agency fund -
Equity in pooled cash 116,080
Total $ 485,885,686
-60-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
Deposits and Investments:
Bank deposits:
Checking/savings accounts $ 8,977,752
Certificates of deposit (due within one year) 2,020,061
Investments in securities and mutual funds:
Pooled investments 52,339,516
Pension investments 422,402,820
Cash on hand 145,537
Total $ 485,885,686
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)$ 52,339,516 -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.
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, $12,504,962 of the City’s bank balance of
$13,344,356 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.
-61-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
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.
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.
-62-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
The investments of each pension trust fund are held in a bank administered trust fund. Following is
a summary of pension investments as of June 30, 2010:
Employees'
Police Money
Employees' and Fire Purchase Retiree
Retirement Retirement Pension Health Care
System System Plan VEBA Totals
Investments at fair value, as determined
by quoted market price:
U.S. treasuries:
Not on securities loan 3,353,749$ 5,177,154$ -$ -$ 8,530,903$
On securities loan 3,022,662 4,153,612 - - 7,176,274
U.S. agencies:
Not on securities loan 24,469,666 34,175,078 - - 58,644,744
On securities loan 2,416,687 1,998,328 - - 4,415,015
Domestic corporate securities:
Not on securities loan 39,217,697 51,372,961 - - 90,590,658
Domestic equities:
Not on securities loan 36,500,454 51,320,106 - - 87,820,560
On securities loan 9,964,870 12,309,709 - - 22,274,579
Real estate investment funds 6,630,000 9,099,000 - - 15,729,000
International equity mutual funds 17,435,000 22,302,000 - - 39,737,000
Domestic equity mutual funds 23,451,000 41,205,000 1,602,159 5,305,848 71,564,007
Domestic debt securities mutual funds - - - 5,563,847 5,563,847
Money market funds 4,963,096 5,393,135 - 2 10,356,233
Total investments 171,424,881$ 238,506,083$ 1,602,159$ 10,869,697$ 422,402,820$
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 32,502,089$ 44,971,075$ -$ -$ 77,473,164$
Not rated 39,978,375 51,906,063 - 5,563,847 97,448,285
Assets not subject
to credit risk 98,944,417 141,628,945 1,602,159 5,305,850 247,481,371
171,424,881$ 238,506,083$ 1,602,159$ 10,869,697$ 422,402,820$
-63-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
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.
Concentration of Credit Risk. At June 30, 2010, the pension investment portfolio was concentrated
as follows:
Police
Employees' and Fire
Retirement Retirement
Investment Type Issuer System System
U.S. Agencies FNMA 6.0% 8.0%
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, 2010, 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 4,931$ 976,994$ 1,549,901$ 3,844,587$ 6,376,413$
U.S. agencies 2,317 2,158,228 9,992,398 14,733,411 26,886,354
Domestic corporate securities 39,217,697 - - - 39,217,697
39,224,945$ 3,135,222$ 11,542,299$ 18,577,998$ 72,480,464$
Police and Fire Retirement System:
U.S. treasuries 5,937$ 1,138,168$ 3,346,072$ 4,840,590$ 9,330,767$
U.S. agencies 12,321 3,074,747 13,800,898 19,285,444 36,173,410
Domestic corporate securities 51,183,225 189,736 - - 51,372,961
51,201,483$ 4,402,651$ 17,146,970$ 24,126,034$ 96,877,138$
-64-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
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%.
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 $100,000 less than
the market value of the loaned security. There are no restrictions on the amount of securities that
can be loaned. Securities on loan at year-end are classified in the preceding schedule of custodial
credit risk according to the category for the collateral received on the securities lent. At year-end,
the pension trust funds have no credit risk exposure to borrowers because the amounts the City
owes the borrowers exceed the amounts the borrowers owe the City. The contract with the pension
trust fund custodians require them to indemnify the City if the borrowers fail to return the securities
(and if the collateral is inadequate to replace the securities lent) or fail to pay the City for income
distributions by the securities’ issuers while the securities are on loan.
3-C. Receivables
Receivables are comprised of the following:
Business-
Governmental type
Activities Activities
Accounts receivable, net 17,948,865$ 4,161,049$
Taxes receivable 1,029,824 -
Special assessments receivable 913,800 -
Loans receivable 1,439,990 -
Accrued interest receivable 1,872,078 122,441
Due from other governments 12,445,129 -
Due from other component units 1,589,214 -
Lease receivable - 29,478,564
37,238,900$ 33,762,054$
Amount not expected to be
collected within one year 4,129,780$ 25,348,784$
-65-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
3-D. Capital Assets
Capital assets activity for the year ended June 30, 2010, was as follows:
Primary government
Beginning Ending
Balance Increases Decreases Balance
Governmental activities
Capital assets, not being depreciated:
Land 24,747,436$ -$ -$ 24,747,436$
Construction in progress 7,140,656 5,469,713 (3,558,919) 9,051,450
Total capital assets not being depreciated 31,888,092 5,469,713 (3,558,919) 33,798,886
Capital assets, being depreciated:
Land improvements 10,990,102 1,019,963 - 12,010,065
Equipment and vehicles 41,250,700 3,038,069 (965,903) 43,322,866
Buildings 111,805,981 2,185,625 (610,910) 113,380,696
Infrastructure 308,654,778 10,609,061 (15,555,227) 303,708,612
Total capital assets being depreciated 472,701,561 16,852,718 (17,132,040) 472,422,239
Less accumulated depreciation for:
Land improvements (5,456,914) (457,318) - (5,914,232)
Equipment and vehicles (34,613,677) (2,138,091) 965,903 (35,785,865)
Buildings (54,935,703) (3,234,197) 610,910 (57,558,990)
Infrastructure (188,155,290) (8,427,871) 13,222,289 (183,360,872)
Total accumulated depreciation (283,161,584) (14,257,477) 14,799,102 (282,619,959)
Total capital assets, being depreciated, net 189,539,977 2,595,241 (2,332,938) 189,802,280
Governmental activities capital assets, net 221,428,069$ 8,064,954$ (5,891,857)$ 223,601,166$
-66-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
Beginning Ending
Balance Increases Decreases Balance
Business-type activities
Capital assets, not being depreciated:
Land 13,598,708$ -$ -$ 13,598,708$
Construction in progress 67,677,221 27,273,539 (558,574) 94,392,186
Total capital assets not being depreciated 81,275,929 27,273,539 (558,574) 107,990,894
Capital assets, being depreciated:
Land improvements 23,389,871 - - 23,389,871
Equipment and vehicles 5,625,743 179,146 (26,610) 5,778,279
Buildings 195,010,154 1,566,723 - 196,576,877
Sewers 236,228,703 435,668 (1,847,615) 234,816,756
Total capital assets being depreciated 460,254,471 2,181,537 (1,874,225) 460,561,783
Less accumulated depreciation for:
Land improvements (9,786,991) (560,184) - (10,347,175)
Equipment and vehicles (4,688,552) (266,730) 26,610 (4,928,672)
Buildings (91,910,216) (4,250,242) - (96,160,458)
Sewers (51,334,386) (4,931,959) - (56,266,345)
Total accumulated depreciation (157,720,145) (10,009,115) 26,610 (167,702,650)
Total capital assets, being depreciated, net 302,534,326 (7,827,578) (1,847,615) 292,859,133
Business-type activities capital assets, net 383,810,255$ 19,445,961$ (2,406,189)$ 400,850,027$
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General government 659,256$
Public safety 599,988
Public works 8,442,367
Recreation and culture 1,563,732
Community development 1,615,454
Internal service 1,376,680
Total depreciation expense - governmental activities 14,257,477$
Business-type activities:
Sewage disposal system 7,968,397$
Municipal parking system 1,891,410
Golf 107,143
Other 42,165
Total depreciation expense - business-type activities 10,009,115$
-67-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
3-E. Payables
Accounts payable and accrued liabilities are comprised of the following:
Business-
Governmental type
Activities Activities
Accounts payable 5,282,175$ 2,760,536$
Deposits payable 49,575 44,815
Accrued payroll 3,303,167 204,669
Contract retainage payable 2,188,150 70
Indemnity bonds 1,920 -
Due to other governments 2,233,628 125,089
Other 2,532,730 -
15,591,345$ 3,135,179$
3-F. Interfund Receivables, Payables and Transfers
At June 30, 2010, amounts due to/due from other funds were as follows:
Due From
Nonmajor Sewage Nonmajor
General Governmental Disposal Enterprise
Fund Funds System Funds Total
Due to:
General Fund -$ 1,902,453$ 2,286,962$ -$ 4,189,415$
Nonmajor governmental funds 339,507 4,100,000 - 300,000 4,739,507
Sewage Disposal System 17,858,456 - - - 17,858,456
Municipal Parking System 13,002,999 - - - 13,002,999
Internal service funds - 1,550,000 - 80,000 1,630,000
31,200,962$ 7,552,453$ 2,286,962$ 380,000$ 41,420,377$
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.
-68-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
At June 30, 2010, advances to/due from other funds were as follows:
Advances To Advances From
Other Funds Other Funds
Nonmajor governmental funds 80,531$ 271,454$
Municipal Parking System 271,454 80,531
351,985$ 351,985$
In addition, at June 30, 2010, the following interfund receivables/payables were reported for funds
with negative equity in pooled cash and investments:
Interfund Interfund
Receivable Payable
Nonmajor governmental funds 1,250,211$ 28,107$
Municipal parking system - 1,222,104
1,250,211$ 1,250,211$
For the year ended June 30, 2010, interfund transfers consisted of the following:
Transfers In
Nonmajor Nonmajor
General Governmental Enterprise
Fund Funds Funds Total
Transfers Out:
General Fund -$ 5,575,265$ 518,562$ 6,093,827$
Nonmajor governmental funds 1,531,865 8,755,008 265,697 10,552,570
Sewage Disposal System 300,000 - - 300,000
Nonmajor enterprise funds - 19,452 - 19,452
1,831,865$ 14,349,725$ 784,259$ 16,965,849$
Transfers are used to: (1) move revenues from the fund that is required to collect them to the fund
that is required or allowed to expend them; (2) move receipts restricted to or allowed for debt
service from the funds collecting the receipts to the debt service fund as debt service payments
become due; and (3) use unrestricted revenues collected in the general fund to finance various
programs accounted for in other funds in accordance with budgetary authorizations.
-69-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
3-G. Long-term Debt
General obligation bonds. The government issues general obligation bonds to provide funds for the
acquisition and construction of major capital facilities. General obligation bonds are direct
obligations and pledge the full faith and credit of the government. These bonds are issued as 10 to
30-year serial bonds with varying amounts of principal maturing each year. General obligation
bonds currently outstanding are as follows:
Interest Original
Rate Amount Amount
General obligation bonds
Governmental activities
2001 Fire Station Unlimited Tax Bond 4.00%-5.00% 4,000,000$ 2,700,000$
2006 Lansing Center Limited Tax Bonds 3.50%-4.30% 4,000,000 3,235,000
2006 Michigan Transportation Fund Limited Tax Bonds 3.50%-3.60% 1,600,000 350,000
2005 Building Authority Refunding Bonds 3.50%-5.00% 1,470,000 1,130,000
2007 Michigan Transportation Fund Limited Tax Bonds 3.625%-5.00% 1,137,600 844,800
2007 Michigan Transportation Fund Limited Tax Bonds 3.625%-5.00% 3,602,400 2,675,200
2007 Fire Station Refunding Bonds 3.625%-5.00% 1,780,000 1,755,000
2008 Michigan Transportation Fund Limited Tax Bonds 3.00%-4.00% 3,500,000 3,265,000
2009 Capital Improvement Bonds - Limited Tax General Obligation 3.15-6.85% 10,197,000 10,197,000
31,287,000$ 26,152,000$
Business-type activities
1990 Building Authority Municipal Parking System Limited Tax Bond 0.00% 64,635,000$ 13,960,000$
2003 Building Authority A Municipal Parking System Limited Tax Bond 3.00%-4.35% 10,340,000 1,680,000
2003 Building Authority B Municipal Parking System Taxable Bond 3.85%-6.25% 8,660,000 7,580,000
2005 Building Authority Refunding Bonds 3.50-5.00% 15,975,000 12,280,000
2007 Building Authority Refunding Bonds 3.625%-5.00% 7,965,000 7,895,000
1996 Building Authority Golf Course Limited Tax Bond 3.80%-5.70% 1,300,000 630,000
1992 Limited Tax Sewer Bond - 5005-01 2.50% 7,128,800 1,655,000
1993 Limited Tax Sewer Bond - 5005-02 2.50% 8,150,050 2,260,000
1994 Limited Tax Sewer Bond - 5005-03 2.50% 3,234,722 1,065,000
1994 Limited Tax Sewer Bond - 5005-04 2.00% 3,727,138 987,138
1994 Limited Tax Sewer Bond - 5005-05 2.25% 515,969 105,000
1994 Limited Tax Sewer Bond - 5005-06 2.25% 7,595,611 2,100,000
1996 Limited Tax Sewer Bond - 5005-07 2.25% 3,365,073 1,325,073
1996 Limited Tax Sewer Bond - 5005-08 2.25% 3,995,000 1,815,000
1997 Limited Tax Sewer Bond - 5005-09 2.25% 4,746,780 2,351,780
1998 Limited Tax Sewer Bond - 5005-10 2.25% 10,539,950 5,759,950
1999 Limited Tax Sewer Bond - 5005-11 2.50% 10,120,000 5,690,000
2000 Limited Tax Sewer Bond - 5005-12 2.50% 9,447,830 5,687,830
2001 Limited Tax Sewer Bond - 5005-13 2.50% 10,573,046 6,903,046
2002 Limited Tax Sewer Bond - 5005-14 2.50% 12,381,131 9,111,131
2003 Limited Tax Sewer Bond - 5005-15 2.50% 10,259,826 8,030,688
2004 Limited Tax Sewer Bond - 5005-16 2.13% 3,070,277 3,137,649
2005 Limited Tax Sewer Bond - 5005-17 2.13% 4,739,023 6,473,778
2005 Limited Tax Sewer Bond - 5005-18 1.63% 13,389,371 11,489,371
2006 Limited Tax Sewer Bond - 5005-19 1.63% 18,216,346 16,591,346
2007 Limited Tax Sewer Bond - 5005-20 1.63% 23,475,662 22,365,662
2008 Limited Tax Sewer Bond - 5005-21 2.50% 24,314,304 24,314,304
2009 Limited Tax Sewer Bond - 5005-22 2.50% 1,609,661 1,609,661
2009 Capital Improvement Bonds 4.10% - 7.05% 9,803,000 9,803,000
2009 Building Authority Refunding Bonds 6.014% - 6.584%8,161,691 8,161,691
321,435,261$ 202,818,098$
-70-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
At year end, defeased bonds outstanding consisted of $7,485,000 of the 2003 Building Authority A
Municipal Parking System Limited Tax Bonds, which are scheduled to be paid by the escrow agent
on June 1, 2013.
Revenue bonds. The City also issues bonds where the income derived from the acquired or
constructed assets is pledged to pay debt service. Revenue bonds outstanding at year-end are as
follows:
Interest Original
Rate Amount Amount
Revenue bonds
Business-type activities
1998 Sewer Revenue & Refunding Bond 2.50% 26,415,000$ 3,515,000$
2003 Sewer Revenue & Refunding Bond 2.50% 39,880,000 31,930,000
66,295,000$ 35,445,000$
Installment purchase agreements.The government enters into installment purchase agreements for
equipment and related capital assets. Installment purchase agreements outstanding at year-end are
as follows:
Interest Original
Rate Amount Amount
Installment purchase agreements
Governmental activities
2004 Lease Purchase Agreement - Roof and Fire Suppression 2.77% 570,000 154,469
1999 Lease Purchase Agreement - Stadium 5.20%-6.05% 11,000,000 -
2005 Lease Purchase Agreement - LEPFA Extractor and Wall 4.51% 392,046 117,936
2005 Lease Purchase Agreement - LEPFA Carpet 4.51% 126,418 70,554
2005 Lease Purchase Agreement - Income Tax Software 3.76% 430,000 46,710
2005 Lease Purchase Agreement - LEPFA Equipment 4.24% 81,500 49,090
2001 Lease Purchase Agreement - O&M Facility 5.35% 1,925,000 905,000
2006 Lease Purchase Agreement - Ambulances 4.23% 474,000 201,454
2006 Lease Purchase Agreement - Energy Efficiencies 4.20% 6,217,227 6,004,682
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
2007 Lease Purchase Agreement - Phone System 4.22% 518,000 375,794
24,734,191$ 10,925,689$
-71-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
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$ 829,896$
2006 State Infrastructure Bank Loan 3.00% 500,000 208,908
1,766,000$ 1,038,804$
Business-type activities
2003 MEDC Loan 3.93% 4,180,000$ 4,180,000$
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
2011 3,355,222$ 1,643,330$ 4,998,552$ 17,496,866$ 6,781,350$ 24,278,216$
2012 3,588,080 1,496,289 5,084,369 17,276,314 6,353,375 23,629,689
2013 3,355,379 1,343,233 4,698,612 18,073,942 5,913,989 23,987,931
2014 3,485,354 1,188,604 4,673,958 18,388,566 5,462,294 23,850,860
2015 2,875,852 1,025,305 3,901,157 15,976,541 4,999,795 20,976,336
2016-2020 12,020,461 3,406,349 15,426,810 64,489,902 19,443,489 83,933,391
2021-2025 6,061,145 1,338,648 7,399,793 60,638,242 9,988,001 70,626,243
2026-2030 3,375,000 382,220 3,757,220 25,929,594 2,837,042 28,766,636
2031-2035 - - - 3,942,720 511,950 4,454,670
2036-2040 - - - 230,411 9,059 239,470
38,116,493$ 11,823,978$ 49,940,471$ 242,443,098$ 62,300,344$ 304,743,442$
-72-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
Changes in Long-Term Debt. Long-term liability activity for the year ended June 30, 2010, was as
follows:
Beginning Ending Due Within
Balance Additions Reductions Refunded Balance One Year
Governmental activities
General obligation bonds 17,640,000$ 10,197,000$ 1,685,000$ -$ 26,152,000$ 1,735,000$
Installment purchase agreements 12,394,082 - 1,468,393 - 10,925,689 1,360,997
Loans payable 1,290,479 - 251,675 - 1,038,804 259,225
Subtotal 31,324,561 10,197,000 3,405,068 - 38,116,493 3,355,222
Compensated absences 11,850,275 10,904,958 11,850,275 - 10,904,958 8,156,720
Accrued workers compensation 5,148,683 1,436,072 1,061,251 - 5,523,504 883,761
Accrued general liability claims 400,000 - - - 400,000 -
Add (deduct) deferred amounts:
For issuance discounts (33,460) (50,883) (2,980) - (81,363) -
For issuance premiums 292,663 - 34,143 - 258,520 -
On refunding (69,309) - (7,053) - (62,256) -
48,913,413$ 22,487,147$ 16,340,704$ -$ 55,059,856$ 12,395,703$
Business-type activities
General obligation bonds 194,429,701$ 28,943,397$ 13,660,000$ 6,895,000$ 202,818,098$ 14,160,000$
Revenue bonds 38,285,000 - 2,840,000 - 35,445,000 2,925,000
Loans payable 4,180,000 - - - 4,180,000 411,866
Subtotal 236,894,701 28,943,397 16,500,000 6,895,000 242,443,098 17,496,866
Compensated absences 597,792 497,597 597,792 - 497,597 372,195
Add (deduct) deferred amounts:
For issuance discounts (5,256,328) (48,917) (1,474,485) - (3,830,760) -
For issuance premiums 797,396 - 43,103 - 754,293 -
On refunding (2,261,641) - (317,440) - (1,944,201) -
230,771,920$ 29,392,077$ 15,348,970$ 6,895,000$ 237,920,027$ 17,869,061$
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, 2010, the net appreciation on investments available for restricted
endowments was $1,256. 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.
-73-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
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,
2010 2009
Estimated liability, beginning of year $ 5,148,683 $ 8,042,838
Estimated claims incurred, including changes in estimates 1,436,072 (1,742,337)
Claims payments (1,061,251) (1,151,818)
Estimated liability, end of year $ 5,523,504 $ 5,148,683
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).
-74-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
The City is permitted by charter and state law to levy taxes up to $19.198 per $1,000 of assessed
valuation for general operations other than the payment of principal and interest on long-term debt.
The tax rate to finance general governmental services other than the payment of principal and
interest on long-term debt for the year ended June 30, 2010 was $15.44 per $1,000 of taxable value.
4-C. Contingent Liabilities
Amounts received or receivable from grantor agencies are subject to audit and potential adjustment
by grantor agencies, principally the federal government. Any disallowed claims, including amounts
already collected, may constitute a liability of the applicable funds. The amount, if any, of
expenditures which may be disallowed by the grantor cannot be determined at this time although the
government expects such amounts, if any, to be immaterial.
The government is a defendant in various lawsuits. Although the outcome of these lawsuits is not
presently determinable, it is the opinion of the government’s counsel that resolution of these matters
will not have a material adverse effect on the financial condition of the government.
4-D. 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, 2009, was $30,601,855; the City’s total payroll was
$61,044,500. Administration of the plan is funded through the General Fund.
As of December 31, 2009, employee membership data was as follows:
Retirees and beneficiaries currently receiving
benefits and terminated employees entitled
to benefits but not yet receiving them 861
Active members:
Vested 292
Nonvested 278
570
-75-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
Approximately 13% of the active membership may retire with a combination of age plus service
equal to 65. All other members may retire at age 50 with 25 or more years of credited service or
age 58 with 8 or more years of credited service. Members are vested after completing 8 years of
credited service. For all members, annual regular retirement allowances are determined by
multiplying total credited service times 1.6% to 2.8% times final average compensation. Final
average compensation is the member's highest wages for two consecutive years during the last 10
years. Retirement options that provide for survivor benefits are available to members. The plan also
provides death and disability benefits. If a member leaves employment or dies before vesting,
accumulated member contributions plus interest are refunded to the member or designated
beneficiary. Members who are vested and terminate their employment have the option of deferring
retirement benefits until age 58 or withdrawing their contribution, thereby forfeiting any future
benefits.
Active members contribute between 1.7% and 7.25% of wages as determined by individual labor
agreements. Chapter 292 of the City of Lansing's Code of Ordinances establishes benefit provisions
and requires that the annuity and pension reserves (which are determined annually by the City’s
actuary) not financed by member contributions shall be financed by annual appropriations.
The City’s funding policy provides for periodic employer contributions at actuarially determined
rates that expressed as percentages of annual covered payroll, are designed to accumulate sufficient
assets to pay benefits when due. The normal cost and amortization payment for the year ended
June 30, 2010, 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, 2010, total contributions of $7,414,032 were made in accordance
with actuarially determined requirements computed through an actuarial valuation performed as of
December 31, 2008. The City contributed $6,043,861 (19.32% of projected valuation payroll),
excluding contributions for health insurance; employees contributed $1,423,375 (4.55% of
projected valuation payroll). The City’s contribution consisted of (a) $3,175,978 normal cost
(10.15% of projected valuation payroll) and (b) $2,867,883 amortization of the unfunded actuarial
accrued liability (9.17% of projected valuation payroll).
-76-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
At December 31, 2009, the unfunded actuarial accrued liability was determined as follows:
Actuarial accrued liability for:
Active participants (292 vested and 278 non-vested) $ 65,089,689
Retired participants and beneficiaries currently
receiving benefits (799 recipients) 176,133,432
Vested terminated participants not yet receiving benefits (62) 4,491,470
Member benefit reserve 16,583,768
Total actuarial accrued liability 262,298,359
Actuarial value of assets (smoothed market value) * 193,324,228
Unfunded actuarial accrued liability $ 68,974,131
* Excluding reserve for health insurance
For the fiscal year ending June 30, 2010, the annual required contribution (“ARC”) ($6,472,349)
exceeded the City contribution ($6,043,861) reducing the net pension asset to $9,947.
Annual required contribution 6,472,349$
Interest on net pension obligation (34,278)
Adjustment to annual required contribution 24,323
Annual net pension cost 6,462,394
Contributions made (6,043,861)
Change in net pension asset 418,533
Net pension asset, beginning of year (428,480)
Net pension asset, end of year (9,947)$
The schedules of funding progress, presented as required supplementary information (RSI)
following the notes to the financial statements, present multiyear trend information about whether
the actuarial values of plan assets are increasing or decreasing over time relative to the AALs for
benefits.
Three-Year Trend Information
(amounts in thousands)
Annual
Years Ended Pension Percentage Net Pension
June 30, Cost (APC) Contributed Asset
2008 $ 6,022 100% $ -
2009 6,048 107 428
2010 6,462 94 10
-77-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
Police and Fire Retirement System
The City sponsors and administers the Police and Fire Retirement System (the “Plan”), a single-
employer defined-benefit pension plan. It is accounted for as a separate pension trust fund. No
stand-alone financial reports are issued. It covers all police officers and firefighters who are full-
time employees of the City. The City’s payroll for employees covered by the plan for the year
ended December 31, 2009, was $30,442,645, the City’s total payroll was $61,044,500.
Administration of the plan is funded through the General Fund.
As of December 31, 2009, employee membership data related to the plan was as follows:
Retirees and beneficiaries currently receiving
benefits and terminated employees entitled
to benefits but not yet receiving them 650
Active members:
Vested 297
Nonvested 161
458
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.
-78-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
The City’s funding policy provides for periodic employer contributions at actuarially determined
rates that, expressed as percentages of annual covered payroll, are designed to accumulate sufficient
assets to pay benefits when due. The normal cost and amortization payment for the year ended
June 30, 2010, was determined using an entry age actuarial funding method. Unfunded actuarial
accrued liabilities are being amortized as a level percent of payroll over an open period of 30 years.
Plan valuation assets are equal to the reported market value of assets except that only 20% of the
difference between the mark-to-market rate of return and the 8% actuarial rate of return is
recognized each year. This five year smoothing method reduces the fluctuation in the City’s
computed contribution rate which might otherwise be caused by market value fluctuations. The
entry-age actuarial cost method is used to determine plan liabilities. Significant actuarial
assumptions used in determining the entry-age actuarial accrued liability include (a) a rate of return
on investments of 8% per year compounded annually (b) projected salary increases of 4%
attributable to inflation and .51 to 11.5% per year depending on age attributable to seniority/merit
(c) assumption that benefits generally will increase $525 annually after retirement.
During the year ended June 30, 2010, total contributions of $9,374,919 were made in accordance
with actuarially determined requirements computed through an actuarial valuation performed as of
December 31, 2008. The City contributed $6,790,757 (21.37% of projected valuation payroll),
excluding contributions for health insurance; employees contributed $2,729,087 (8.59% of
projected valuation payroll). The City’s contribution consisted of (a) $4,919,721 normal cost
(15.48% of projected valuation payroll) and (b) $1,871,036 amortization of the unfunded actuarial
accrued liability (5.89% of projected valuation payroll).
At December 31, 2009, the actuarial accrued liability in excess of assets was determined as follows:
Active participants (297 vested and 161 non-vested) $ 120,691,304
Retired participants and beneficiaries currently
receiving benefits (635 recipients) 214,535,784
Vested terminated participants not yet receiving benefits (15) 2,087,748
Total actuarial accrued liability 337,314,836
Actuarial value of assets (smoothed market value) * 280,341,913
Unfunded Actuarial accrued liability $ 56,972,923
* Excluding reserve for health insurance
For the fiscal year ending June 30, 2010 the annual required contribution (“ARC”)($7,179,360)
exceeded the City contribution ($6,790,757) reducing the net pension asset to $9,021.
-79-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
Annual required contribution 7,179,360$
Interest on net pension obligation (31,088)
Adjustment to annual required contribution 22,067
Annual net pension cost 7,170,339
Contributions made (6,790,757)
Change in net pension asset 379,582
Net pension asset, beginning of year (388,603)
Net pension asset, end of year (9,021)$
Significant actuarial assumptions used to compute contribution requirements were the same as those
used to compute the standardized measure of the actuarial accrual liability.
The schedules of funding progress, presented as required supplementary information (RSI)
following the notes to the financial statements, present multiyear trend information about whether
the actuarial values of plan assets are increasing or decreasing over time relative to the AALs for
benefits.
Three-Year Trend Information
(amounts in thousands)
Annual
Years Ended Pension Percentage Net Pension
June 30, Cost (APC) Contributed Asset
2008 $ 6,521 100% $ -
2009 6,094 106 389
2010 7,170 95 9
-80-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
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, 2010, there were 8 active members in this plan. Contributions made by employees vest
immediately, and contributions made by the City vest after three years of full-time employment.
When employees terminate employment, they are entitled to their contributions and the City’s
contributions if vesting requirements are satisfied. Employees may contribute up to 8% of their
wages in 1% increments. The City contributes an amount equal to 6.0% of the employees’ wages
for retirement benefits.
During the year, the City’s required and actual contributions amounted to $18,034, which was
approximately 6% of covered payroll of $298,000. There were no employee contributions.
No pension provision changes occurred during the year that affected the required contributions to be
made by the City. In addition, the plan does not issue stand-alone financial statements.
-81-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
Financial statements for individual pension and employee benefit plans:
Pension Net Assets
Employees' Employees' Police Police Employees'
Retirement Retirement and Fire and Fire Money Retiree
System System Retirement Retirement Purchase Health Care
Pension OPEB System System OPEB Pension Plan VEBA Totals
Assets
Cash and cash equivalents 4,555,408$ 407,688$ 4,997,263$ 395,872$ -$ -$ 10,356,231$
Investments:
U. S. Government obligations 30,530,434 2,732,330 42,164,031 3,340,141 - - 78,766,936
Corporate bonds 35,996,206 3,221,491 47,602,034 3,770,927 - - 90,590,658
Common stocks 42,648,485 3,816,839 58,959,198 4,670,617 - - 110,095,139
Mutual funds 43,612,854 3,903,146 67,276,505 5,329,495 1,602,159 10,869,697 132,593,856
Contribution receivable 2,401 - - - 861 - 3,262
Dividends and interest receivable 169,017 15,126 225,099 17,832 11,747 25,364 464,185
Total assets 157,514,805 14,096,620 221,224,130 17,524,884 1,614,767 10,895,061 422,870,267
Liabilities
Accounts payable 5,530,020 - 530,265 - - - 6,060,285
Net assets held in trust for:
Pension benefits 151,984,785 - 220,693,865 - 1,614,767 - 374,293,417
Other postemployment benefits - 14,096,620 - 17,524,884 - 10,895,061 42,516,565
Total net assets 151,984,785$ 14,096,620$ 220,693,865$ 17,524,884$ 1,614,767$ 10,895,061$ 416,809,982$
Changes in Pension Net Assets
Additions
Investment income:
Net appreciation in fair value
of investments 15,299,812$ -$ 18,933,921$ -$ -$ 717,387$ 34,951,120$
Interest income 5,665,033 936,840 10,978,159 583,683 112,751 378,130 18,654,596
Dividend income 126,180 - 199,285 - - - 325,465
Less investment expenses (682,095) - (729,561) - (17,166) - (1,428,822)
Net investment income 20,408,930 936,840 29,381,804 583,683 95,585 1,095,517 52,502,359
Contributions:
Employer 6,043,861 9,084,210 6,790,757 9,585,692 18,034 698,328 32,220,882
Plan members 1,423,375 - 2,729,087 - - - 4,152,462
Total contributions 7,467,236 9,084,210 9,519,844 9,585,692 18,034 698,328 36,373,344
Total additions 27,876,166 10,021,050 38,901,648 10,169,375 113,619 1,793,845 88,875,703
Deductions
Participant benefits 18,110,858 8,749,789 22,110,282 8,813,015 59,839 - 57,843,783
Administrative expense 20,598 - 27,840 - - - 48,438
Total deductions 18,131,456 8,749,789 22,138,122 8,813,015 59,839 - 57,892,221
Net additions (deductions) to
net assets held in trust 9,744,710 1,271,261 16,763,526 1,356,360 53,780 1,793,845 30,983,482
Net assets held in trust for pension benefits:
Beginning of year 142,240,075 12,825,359 203,930,339 16,168,524 1,560,987 9,101,216 385,826,500
End of year 151,984,785$ 14,096,620$ 220,693,865$ 17,524,884$ 1,614,767$ 10,895,061$ 416,809,982$
-82-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
4-E. Other Postemployment Benefits
The City of Lansing contributes to the Employees’ Retirement System, the Police and Fire
Retirement System, and the Voluntary Employees Beneficiary Association amounts to pre-fund
postemployment healthcare. In the Employees’ Retirement System and the Police and Fire
Retirement System, these other postemployment benefits (OPEB) are set up as reserves in the
pension plans, and their investments are commingled with the investments of the pension. Portfolio
makeup is reported as a percentage of total pension plan assets. Earnings are calculated based on a
seven year smoothed rate of return of the retirement systems. Eligible participants include any
retirees who receive pension benefits under the respective pension plans. OPEB plan provisions are
established and may be amended by the City Council, subject to the City’s various collective
bargaining agreements. Separate financial statements are not prepared for the plans.
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 $698,328 to the Plan.
Employees’ Retirement System. The City provides postemployment health care benefits, in
accordance with labor agreements, to full-time employees of the City and employees of the 54-A
District Court (not including police officers and firefighters who are members of the Police and Fire
Retirement System). Members eligible for pension benefits under the Employees’ Retirement
System are also eligible to receive health care benefits. The City provides the full cost of health
benefits to retirees, payable to health care vendors, and also reimburses retirees eligible for
Medicare benefits of $96.40 per month for each covered retiree and dependent(s). The payments
are charged to the Fringe Benefit Internal Service Fund of the City and are recognized as expenses
as payments are made. During the year, payments for health care benefits were approximately
$8,749,789 and the City contributed $9,084,210 (direct benefit payments of $8,749,789 and City
contributions of $334,421)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 postemployment health care benefits,
in accordance with labor agreements, to members who are eligible to receive pension benefits under
the Police and Fire Retirement System. The City provides the full cost of health benefits to retirees,
payable to health care vendors, and also reimburses retirees eligible for Medicare benefits of $96.40
per month for each covered retiree and dependent(s). The payments are charged to the Fringe
Benefit Internal Service Fund of the City and are recognized as expenses as payments are made.
During the year, payments for health care benefits were approximately $8,813,015 and the City
contributed $9,585,692 (direct benefit payments of $8,813,015 and City contributions of $772,677)
to the Police and Fire Retirement System to fund retiree healthcare.
-83-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
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. 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 9% to 4%.
At December 31, 2009 (the date of the most recent actuarial valuation), the assets in excess of the
actuarial accrued liability were determined as follows:
Employees’ Police
Retirement & Fire
System Retirement
& VEBA * System
Actuarial accrued liability for:
Active participants $ 50,451,884 $ 71,722,095
Retired participants and beneficiaries currently
receiving benefits 143,653,012 141,504,732
Vested terminated participants not yet receiving benefits 9,294,737 1,672,531
Total actuarial accrued liability 203,399,633 214,899,358
Actuarial value of asset 24,363,831 17,477,208
Unfunded actuarial accrued liability $ 179,035,802 $ 197,422,150
Funded ratio 12.0% 8.1%
Covered payroll $ 30,601,855 $ 30,442,645
UAAL as a % of covered payroll 585.0% 648.5%
*- The Employees’ Retirement System and VEBA were combined on the actuarial valuation.
Annual OPEB Cost and Net OPEB Obligation. The City’s annual other postemployment benefits
cost or expense is calculated based on the annual required contribution (ARC) of the employer, an
amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The
ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal
cost each year and amortize any unfunded actuarial liabilities (or funding excess) over an open
period not to exceed 30 years.
-84-
CITY OF LANSING, MICHIGAN
Notes To Financial Statements
The following tables show the components of the City’s annual OPEB cost for the year, the
amounts actually contributed to the plans, and changes in the net OPEB obligation (asset):
Employees' Police
Retirement & Fire
System and Retirement
VEBA System
Annual required contributions 10,290,433$ 17,177,407$
Interest on net OPEB obligation (asset) (246,872) 476,839
Adjustment to annual required contribution 564,720 (1,090,769)
Annual OPEB cost 10,608,281 16,563,477
Contributions made (9,782,538) (9,585,692)
Change in net OPEB obligation (asset) 825,743 6,977,785
Net OPEB obligation (asset):
Beginning of year (3,085,900) 5,960,488
End of year (2,260,157)$ 12,938,273$
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. Examples include
assumptions about future employment, mortality, and the healthcare cost trend. Amounts
determined regarding the funded status of the plan and the annual required contributions of the
employer are subject to continual revision as actual results are compared with past expectations and
new estimates are made about the future. The schedule of funding progress, presented as required
supplementary information following the notes to the financial statements, presents multiyear trend
information that shows whether the actuarial value of plan assets is increasing or decreasing over
time relative to the actuarial accrued liabilities for benefits.
* * * * * *
-85-
CITY OF LANSING
-86-
REQUIRED SUPPLEMENTARY INFORMATION
-87-
City of Lansing
Employees' Retirement System
Required Supplementary Information
(amounts in thousands)
Schedule of Funding Progress
Actuarial Actuarial UAAL as a
Actuarial Value of Accrued Underfunded Funded Covered % of Covered
Valuation Assets Liability AAL (UAAL) Ratio Payroll Payroll
Date (A) (B) (B-A) (A/B) (C) ((B-A)/C)
12/31/2004 206,200$ 231,389$ 25,189$ 89.1% 32,383$ 77.8%
12/31/2005 207,881 245,242 37,361 84.8% 30,851 121.1%
12/31/2006 208,765 251,427 42,662 83.0% 31,944 133.6%
12/31/2007 208,572 254,356 45,784 82.0% 31,797 144.0%
12/31/2008 200,600 258,331 57,731 77.7% 29,688 194.5%
12/31/2009 193,324 262,298 68,974 73.7% 30,602 225.4%
Schedule of Employer Contributions
Year Ended Annual Required Percentage
June 30 Contributions Contributed
2005 4,675$ 100.0%
2006 4,900 100.0%
2007 5,231 100.0%
2008 6,022 100.0%
2009 6,048 105.0%
2010 6,472 93.4%
The City contributed in excess of its fiscal year 2009 ARC. The City's fiscal
year 2010 contribution was reduced by the dollar amount of the fiscal year
2009 overpayment
-88-
City of Lansing
Police and Fire Retirement System
Required Supplementary Information
(amounts in thousands)
Schedule of Funding Progress
Actuarial Actuarial UAAL as a
Actuarial Value of Accrued Underfunded Funded Covered % of Covered
Valuation Assets Liability AAL (UAAL) Ratio Payroll Payroll
Date (A) (B) (B-A) (A/B) (C) ((B-A)/C)
12/31/2004 275,807$ 279,873$ 4,066$ 98.5% 27,754$ 14.7%
12/31/2005 273,421 290,299 16,878 94.2% 27,855 60.6%
12/31/2006 278,839 308,193 29,354 90.5% 29,582 99.2%
12/31/2007 293,571 315,635 22,064 93.0% 29,600 74.5%
12/31/2008 287,394 326,673 39,279 88.0% 30,161 130.2%
12/31/2009 280,342 337,315 56,973 83.1% 30,443 187.1%
Schedule of Employer Contributions
Year Ended Annual Required Percentage
June 30 Contributions Contributed
2005 3,334$ 100.3%
2006 4,659 100.0%
2007 5,386 100.0%
2008 6,521 100.0%
2009 6,094 106.0%
2010 7,179 94.6%
The City contributed in excess of its fiscal year 2009 ARC. The City's fiscal
year 2010 contribution was reduced by the dollar amount of the fiscal year
2009 overpayment
-89-
City of Lansing
Other Postemployment Benefit Plans
Required Supplementary Information
(amounts in thousands)
Employees' Retirement System and VEBA - Schedule of Funding Progress
Actuarial Actuarial UAAL as a
Actuarial Value of Accrued Underfunded Funded Covered % of Covered
Valuation Assets Liability AAL (UAAL) Ratio Payroll Payroll
Date (A) (B) (B-A) (A/B) (C) ((B-A)/C)
12/31/2006 14,337$ 147,388$ 133,051$ 9.7% 31,944$ 416.5%
12/31/2009 24,364 203,400 179,036 12.0% 30,602 585.0%
Police and Fire Retirement System - Schedule of Funding Progress
Actuarial Actuarial Underfunded UAAL as a
Actuarial Value of Accrued (Overfunded) Funded Covered % of Covered
Valuation Assets Liability AAL (UAAL) Ratio Payroll Payroll
Date (A) (B) (B-A) (A/B) (C) ((B-A)/C)
12/31/2006 13,064$ 155,559$ 142,495$ 8.4% 29,582$ 481.7%
12/31/2009 17,477 214,899 197,422$ 8.1%30,443 648.5%
Fiscal Percentage of Net
Year Annual Annual OPEB OPEB
Ended OPEB Cost Cost Contributed Asset
06/30/2008 9,026,892$ 113.9% (1,252,152)$
06/30/2009 9,021,963 120.3% (3,085,900)
06/30/2010 10,608,281 92.2% (2,260,157)
Fiscal Percentage of Net
Year Annual Annual OPEB OPEB
Ended OPEB Cost Cost Contributed Obligation
06/30/2010 12,005,858$ 71.9% 3,376,295$
06/30/2009 12,258,018 78.9% 5,960,488
06/30/2010 16,563,477 57.9% 12,938,273
Employees' Retirement System and VEBA
Police and Fire Retirement System
-90-
COMBINING and INDIVIDUAL FUND
STATEMENTS and SCHEDULES
-91-
City of Lansing
Combining Balance Sheet - Nonmajor Governmental Funds
June 30, 2010
Special Debt Capital
Revenue Service Projects Permanent Totals
Assets
Cash and cash equivalents 63,584$ -$ 827,113$ -$ 890,697$
Equity in pooled cash 12,328,139 126,434 1,958,172 1,649,550 16,062,295
Investments - - 6,370,745 - 6,370,745
Accounts receivable, net 1,584,988 - - - 1,584,988
Special assessments receivable - -913,800 - 913,800
Loans receivable 1,439,990 - - - 1,439,990
Accrued interest receivable 1,870,867 - 929 - 1,871,796
Due from other funds - - 4,739,507 - 4,739,507
Interfund receivable 1,250,411 - - - 1,250,411
Advances to other funds - - 80,531 - 80,531
Due from other governments 7,450,897 - 1,070 - 7,451,967
Inventory 1,050,623 - - - 1,050,623
Total assets 27,039,499$ 126,434$ 14,891,867$ 1,649,550$ 43,707,350$
Liabilities and fund balances
Liabilities
Accounts payable 2,407,374$ -$ 317,561$ -$ 2,724,935$
Deposits payable 49,575 - - - 49,575
Accrued payroll 209,747 - 7,896 - 217,643
Indemnity bonds 1,920 - - - 1,920
Due to other funds 5,650,000 - 1,902,453 - 7,552,453
Interfund payable 28,107 - - - 28,107
Advances from other funds - - 271,454 - 271,454
Due to other governments 899,782 - - - 899,782
Deferred revenue 4,665,847 - 697,328 - 5,363,175
Total liabilities 13,912,352 - 3,196,692 - 17,109,044
Fund balances
Reserved for advances - - 80,531 - 80,531
Reserved for inventories 1,050,623 - - - 1,050,623
Reserved for encumbrances 46,844 - - - 46,844
Unreserved:
Designated for subsequent
years' expenditures 4,037,312 - - - 4,037,312
Undesignated 7,992,368 126,434 11,614,644 1,649,550 21,382,996
Total fund balances 13,127,147 126,434 11,695,175 1,649,550 26,598,306
Total liabilities and fund balances 27,039,499$ 126,434$ 14,891,867$ 1,649,550$ 43,707,350$
-92-
City of Lansing
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances - Nonmajor Governmental Funds
For the Year Ended June 30, 2010
Special Debt Capital
Revenue Service Projects Permanent Totals
Revenues
Taxes and special assessments 395,821$ 650,008$ 268,383$ -$ 1,314,212$
Intergovernmental 23,784,966 - - - 23,784,966
Charges for services 8,000,651 - 422,411 - 8,423,062
Fines and forfeits 1,294,193 - - - 1,294,193
Interest 28,821 3,708 28,809 9,703 71,041
Contributions 10,000 - - - 10,000
Donations from private sources - - 9,000 - 9,000
Other revenues 260,875 - - - 260,875
Total revenues 33,775,327 653,716 728,603 9,703 35,167,349
Expenditures
Current expenditures:
General government 2,421,313 - - - 2,421,313
Public safety 7,377,994 - - - 7,377,994
Highways and streets 8,758,310 - - - 8,758,310
Recreation and culture 96,783 - - - 96,783
Other functions 12,930,993 - - - 12,930,993
Debt service:
Principal 1,891,762 600,000 - - 2,491,762
Interest 913,591 285,645 - - 1,199,236
Capital outlay 9,681,963 - 5,099,765 - 14,781,728
Total expenditures 44,072,709 885,645 5,099,765 - 50,058,119
Revenues over (under)
expenditures (10,297,382) (231,929) (4,371,162) 9,703 (14,890,770)
Other financing sources (uses)
Transfers in 11,701,209 257,668 2,371,396 19,452 14,349,725
Transfers out (1,915,000) (85,941) (8,541,926) (9,703) (10,552,570)
Issuance of long-term debt - - 10,197,000 - 10,197,000
Bond discount - - (50,883) - (50,883)
Total other financing sources 9,786,209 171,727 3,975,587 9,749 13,943,272
Net change in fund balances (511,173) (60,202) (395,575) 19,452 (947,498)
Fund balances, beginning of year 13,638,320 186,636 12,090,750 1,630,098 27,545,804
Fund balances, end of year 13,127,147$ 126,434$ 11,695,175$ 1,649,550$ 26,598,306$
-93-
CITY OF LANSING
-94-
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.
Tri-County Metro –This fund accounts for the operations of the Tri-County Metro Narcotics Squad.
-95-
City of Lansing
Combining Balance Sheet - Nonmajor Special Revenue Funds
June 30, 2010
Major Local Budget Drug Law
Streets Streets Stabilization Enforcement
Assets
Cash and cash equivalents -$ -$ -$ 15,000$
Equity in pooled cash 2,510,282 1,558,785 4,477,648 668,406
Accounts receivable - - - -
Loans receivable - - - -
Accrued interest receivable - - - -
Interfund receivable - - 1,250,411 -
Due from other governments 1,509,213 287,249 - -
Inventory 1,050,623 - - -
Total assets 5,070,118$ 1,846,034$ 5,728,059$ 683,406$
Liabilities and fund balances
Liabilities
Accounts payable 540,026$ 466,638$ -$ 199,204$
Deposits payable - - - -
Accrued payroll 12,489 5,849 - 4,995
Indemnity bonds 1,920 - - -
Due to other funds - - - -
Interfund payable - - - -
Due to other governments - - - -
Deferred revenue - - - -
Total liabilities 554,435 472,487 - 204,199
Fund balances
Reserved for inventories 1,050,623 - - -
Reserved for encumbrances 38,242 7,682 - -
Unreserved:
Designated for subsequent
years' expenditures 3,151,519 885,793 - -
Undesignated 275,299 480,072 5,728,059 479,207
Total fund balances 4,515,683 1,373,547 5,728,059 479,207
Total liabilities and fund balances 5,070,118$ 1,846,034$ 5,728,059$ 683,406$
-96-
Community
State and Development Principal 911
Federal Block Grant Shopping Communications Building Parks
Programs Program Stadium District Center Department Department
-$ -$ -$ -$ -$ -$ -$
906,338 92,747 87,440 96,176 - 36,980 473,358
5,131 - 156,700 - 1,415,870 7,287 -
54,990 1,385,000 - - - - -
- 1,870,867 - - - - -
-------
5,028,203 540,706 - - - - -
-------
5,994,662$ 3,889,320$ 244,140$ 96,176$ 1,415,870$ 44,267$ 473,358$
905,604$ 108,156$ 21,533$ 35,404$ 5,444$ 2,042$ -$
-------
25,124 25,297 - 6,692 80,974 42,224 -
-------
3,450,000 700,000 200,000 - 1,300,000 - -
- - - - 28,107 - -
-------
1,609,980 3,055,867 - - - - -
5,990,708 3,889,320 221,533 42,096 1,414,525 44,266 -
-------
-------
-------
3,954 - 22,607 54,080 1,345 1 473,358
3,954 - 22,607 54,080 1,345 1 473,358
5,994,662$ 3,889,320$ 244,140$ 96,176$ 1,415,870$ 44,267$ 473,358$
Continued…
-97-
Tri-County
Metro Totals
Assets
Cash and cash equivalents 48,584$ 63,584$
Equity in pooled cash 1,419,979 12,328,139
Accounts receivable - 1,584,988
Loans receivable - 1,439,990
Accrued interest receivable - 1,870,867
Interfund receivable - 1,250,411
Due from other governments 85,526 7,450,897
Inventory - 1,050,623
Total assets 1,554,089$ 27,039,499$
Liabilities and fund balances
Liabilities
Accounts payable 123,323$ 2,407,374$
Deposits payable 49,575 49,575
Accrued payroll 6,103 209,747
Indemnity bonds - 1,920
Due to other funds - 5,650,000
Interfund payable - 28,107
Due to other governments 899,782 899,782
Deferred revenue - 4,665,847
Total liabilities 1,078,783 13,912,352
Fund balances
Reserved for inventories - 1,050,623
Reserved for encumbrances 920 46,844
Unreserved:
Designated for subsequent
years' expenditures - 4,037,312
Undesignated 474,386 7,992,368
Total fund balances 475,306 13,127,147
Total liabilities and fund balances 1,554,089$ 27,039,499$
City of Lansing
Combining Balance Sheet - Nonmajor Special Revenue Funds (Concluded)
June 30, 2010
-98-
CITY OF LANSING
-99-
City of Lansing
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances - Nonmajor Special Revenue Funds
For the Year Ended June 30, 2010
Major Local Budget Drug Law
Streets Streets Stabilization Enforcement
Revenues
Taxes and special assessments -$ -$ -$ -$
Intergovernmental 6,762,384 1,753,823 - -
Charges for services 577,942 591,372 - -
Fines and forfeits - - - 565,534
Interest 17,314 739 - 3,078
Contributions - - - -
Other 121,616 64,092 - -
Total revenues 7,479,256 2,410,026 - 568,612
Expenditures
Current expenditures:
General government - - - -
Public safety - - - 444,752
Highways and streets 4,824,124 3,934,186 - -
Recreation and culture - - - -
Other functions - - - -
Debt service:
Principal 362,962 668,800 - -
Interest 182,416 484,395 - -
Capital outlay 4,405,456 3,419,770 - -
Total expenditures 9,774,958 8,507,151 - 444,752
Revenues over (under)
expenditures (2,295,702) (6,097,125) - 123,860
Other financing sources (uses)
Transfers in 3,552,179 6,257,436 - -
Transfers out (1,900,000) - - -
Total other financing
sources 1,652,179 6,257,436 - -
Net change in fund balances (643,523) 160,311 - 123,860
Fund balances, beginning of year 5,159,206 1,213,236 5,728,059 355,347
Fund balances, end of year 4,515,683$ 1,373,547$ 5,728,059$ 479,207$
-100-
Community
State and Development Principal 911
Federal Block Grant Shopping Communications Building Parks
Programs Program Stadium District Center Department Department
-$ -$ -$ 395,821$ -$ -$ -$
12,641,479 1,798,300 - - - - -
870 - 385,353 4,575 5,230,130 1,210,409 -
-------
- - (299) 501 - - 2,189
- - - 10,000 - - -
- 58,437 - 16,722 - 8 -
12,642,349 1,856,737 385,054 427,619 5,230,130 1,210,417 2,189
- - - 466,775 - 1,954,538 -
- - - - 5,330,822 - -
-------
- - 79,277 - - - 17,506
12,930,993 - - - - - -
- - 860,000 - - - -
- - 246,780 - - - -
- 1,856,737 - - - - -
12,930,993 1,856,737 1,186,057 466,775 5,330,822 1,954,538 17,506
(288,644) - (801,003) (39,156)(100,692) (744,121) (15,317)
255,313 - 800,000 32,975 - 744,122 6
-------
255,313 - 800,000 32,975 - 744,122 6
(33,331) - (1,003) (6,181) (100,692) 1 (15,311)
37,285 - 23,610 60,261 102,037 - 488,669
3,954$ -$ 22,607$ 54,080$ 1,345$ 1$ 473,358$
Continued…
-101-
Tri-County
Metro Totals
Revenues
Taxes and special assessments -$ 395,821$
Intergovernmental 828,980 23,784,966
Charges for services - 8,000,651
Fines and forfeits 728,659 1,294,193
Interest 5,299 28,821
Contributions - 10,000
Other - 260,875
Total revenues 1,562,938 33,775,327
Expenditures
Current expenditures:
General government - 2,421,313
Public safety 1,602,420 7,377,994
Highways and streets - 8,758,310
Recreation and culture - 96,783
Other functions - 12,930,993
Debt service:
Principal - 1,891,762
Interest - 913,591
Capital outlay - 9,681,963
Total expenditures 1,602,420 44,072,709
Revenues over (under)
expenditures (39,482) (10,297,382)
Other financing sources (uses)
Transfers in 59,178 11,701,209
Transfers out (15,000) (1,915,000)
Total other financing
sources (uses)44,178 9,786,209
Net change in fund balances 4,696 (511,173)
Fund balances, beginning of year 470,610 13,638,320
Fund balances, end of year 475,306$ 13,127,147$
City of Lansing
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances - Nonmajor Special Revenue Funds (Concluded)
For the Year Ended June 30, 2010
-102-
CITY OF LANSING
-103-
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, 2010
Major Streets
Final Variance with
Budget Actual Budget
Revenues
Taxes and special assessments -$ -$ -$
Intergovernmental 7,349,227 6,762,384 586,843
Charges for services 658,729 577,942 80,787
Fines and forfeits - - -
Interest 150,000 17,314 132,686
Contributions - - -
Other 51,200 121,616 (70,416)
Total revenues 8,209,156 7,479,256 729,900
Expenditures
Current expenditures:
General government - - -
Public safety - - -
Highways and streets 6,544,383 4,824,124 1,720,259
Recreation and culture - - -
Other functions - - -
Debt service:
Principal 446,962 362,962 84,000
Interest 132,634 182,416 (49,782)
Capital outlay 10,865,985 4,405,456 6,460,529
Total expenditures 17,989,964 9,774,958 8,215,006
Revenues over (under)
expenditures (9,780,808) (2,295,702) (7,485,106)
Other financing sources (uses)
Transfers in 6,690,471 3,552,179 3,138,292
Transfers out (1,900,000) (1,900,000) -
Total other financing
sources (uses) 4,790,471 1,652,179 3,138,292
Net change in fund balances (4,990,337) (643,523) (4,346,814)
Fund balances, beginning of year 5,159,206 5,159,206 -
Fund balances (deficit), end of year 168,869$ 4,515,683$ (4,346,814)$
-104-
Local Streets Budget Stabilization
Final Variance with Final Variance with
Budget Actual Budget Budget Actual Budget
-$ -$ -$ -$ -$ -$
2,260,474 1,753,823 506,651 - - -
735,000 591,372 143,628 - - -
------
10,000 739 9,261 - - -
------
- 64,092 (64,092) - - -
3,005,474 2,410,026 595,448 - - -
------
------
4,531,481 3,934,186 597,295 - - -
------
------
934,800 668,800 266,000 - - -
326,751 484,395 (157,644) - - -
6,131,241 3,419,770 2,711,471 - - -
11,924,274 8,507,151 3,417,123 - - -
(8,918,800) (6,097,125) (2,821,675) - - -
8,374,752 6,257,436 2,117,316 - - -
------
8,374,752 6,257,436 2,117,316 - - -
(544,048) 160,311 (704,359) - - -
1,213,236 1,213,236 - 5,728,059 5,728,059 -
669,188$ 1,373,547$ (704,359)$ 5,728,059$ 5,728,059$ -$
-105-
City of Lansing
Schedule of Revenues, Expenditures and Changes in
Fund Balances - Budget and Actual - Nonmajor Special Revenue Funds (Continued)
For the Year Ended June 30, 2010
Drug Law Enforcement
Final Variance with
Budget Actual Budget
Revenues
Taxes and special assessments -$ -$ -$
Intergovernmental - - -
Charges for services - - -
Fines and forfeits 680,000 565,534 114,466
Interest 13,000 3,078 9,922
Contributions - - -
Other - - -
Total revenues 693,000 568,612 124,388
Expenditures
Current expenditures:
General government - - -
Public safety 391,108 444,752 (53,644)
Highways and streets - - -
Recreation and culture - - -
Other functions - - -
Debt service:
Principal - - -
Interest - - -
Capital outlay - - -
Total expenditures 391,108 444,752 (53,644)
Revenues over (under)
expenditures 301,892 123,860 178,032
Other financing sources (uses)
Transfers in - - -
Transfers out - - -
Total other financing
sources (uses) - - -
Net change in fund balances 301,892 123,860 178,032
Fund balances, beginning of year 355,347 355,347 -
Fund balances, end of year 657,239$ 479,207$ 178,032$
-106-
Community Development
State and Federal Programs Block Grant Program
Final Variance with Final Variance with
Budget Actual Budget Budget Actual Budget
-$ -$ -$ -$ -$ -$
32,213,666 12,641,479 19,572,187 3,150,566 1,798,300 1,352,266
9,120 870 8,250 - - -
------
------
------
- - - 480,328 58,437 421,891
32,222,786 12,642,349 19,580,437 3,630,894 1,856,737 1,774,157
------
------
------
------
29,477,263 12,930,993 16,546,270 - - -
------
------
- - - 3,630,894 1,856,737 1,774,157
29,477,263 12,930,993 16,546,270 3,630,894 1,856,737 1,774,157
2,745,523 (288,644) 3,034,167 - - -
235,471 255,313 (19,842) - - -
------
235,471 255,313 (19,842) - - -
2,980,994 (33,331) 3,014,325 - - -
37,285 37,285 - - - -
3,018,279$ 3,954$ 3,014,325$ -$ -$ -$
-107-
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, 2010
Stadium
Final Variance with
Budget Actual Budget
Revenues
Taxes and special assessments -$ -$ -$
Intergovernmental - - -
Charges for services 380,500 385,353 (4,853)
Fines and forfeits - - -
Interest - (299) 299
Contributions - - -
Other - - -
Total revenues 380,500 385,054 (4,554)
Expenditures
Current expenditures:
General government - - -
Public safety - - -
Highways and streets - - -
Recreation and culture 57,744 79,277 (21,533)
Other functions - - -
Debt service:
Principal 860,000 860,000 -
Interest 246,781 246,780 1
Capital outlay - - -
Total expenditures 1,164,525 1,186,057 (21,532)
Revenues over (under)
expenditures (784,025) (801,003) 16,978
Other financing sources (uses)
Transfers in 800,000 800,000 -
Transfers out - - -
Total other financing
sources (uses) 800,000 800,000 -
Net change in fund balances 15,975 (1,003) 16,978
Fund balances, beginning of year 23,610 23,610 -
Fund balances, end of year 39,585$ 22,607$ 16,978$
-108-
Principal Shopping District 911 Communications Center
Final Variance with Final Variance with
Budget Actual Budget Budget Actual Budget
416,760$ 395,821$ 20,939$ -$ -$ -$
------
2,500 4,575 (2,075) 5,230,120 5,230,130 (10)
------
200 501 (301) - - -
10,000 10,000 - - - -
13,000 16,722 (3,722) - - -
442,460 427,619 14,841 5,230,120 5,230,130 (10)
475,435 466,775 8,660 - - -
- - - 5,505,400 5,330,822 174,578
------
------
------
------
------
------
475,435 466,775 8,660 5,505,400 5,330,822 174,578
(32,975) (39,156) 6,181 (275,280) (100,692) (174,588)
32,975 32,975 - - - -
- - - 190,280 - 190,280
32,975 32,975 - 190,280 - 190,280
- (6,181) 6,181 (85,000) (100,692) 15,692
60,261 60,261 - 102,037 102,037 -
60,261$ 54,080$ 6,181$ 17,037$ 1,345$ 15,692$
-109-
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, 2010
Building Department
Final Variance with
Budget Actual Budget
Revenues
Taxes and special assessments -$ -$ -$
Intergovernmental - - -
Charges for services 1,141,600 1,210,409 (68,809)
Fines and forfeits - - -
Interest - - -
Contributions - - -
Other - 8 (8)
Total revenues 1,141,600 1,210,417 (68,817)
Expenditures
Current expenditures:
General government 2,016,500 1,954,538 61,962
Public safety - - -
Highways and streets - - -
Recreation and culture - - -
Other functions - - -
Debt service:
Principal - - -
Interest - - -
Capital outlay - - -
Total expenditures 2,016,500 1,954,538 61,962
Revenues over (under)
expenditures (874,900) (744,121) (130,779)
Other financing sources (uses)
Transfers in 874,900 744,122 130,778
Transfers out - - -
Total other financing
sources (uses) 874,900 744,122 130,778
Net change in fund balances - 1 (1)
Fund balances, beginning of year - - -
Fund balances (deficit), end of year -$ 1$ (1)$
-110-
Parks Department Tri-County Metro
Final Variance with Final Variance with
Budget Actual Budget Budget Actual Budget
-$ -$ -$ -$ -$ -$
- - - 757,897 828,980 (71,083)
------
- - - 150,000 728,659 (578,659)
- 2,189 (2,189) 30,000 5,299 24,701
------
------
- 2,189 (2,189) 937,897 1,562,938 (625,041)
------
- - - 977,075 1,602,420 (625,345)
------
65,470 17,506 47,964 - - -
------
------
------
------
65,470 17,506 47,964 977,075 1,602,420 (625,345)
(65,470) (15,317) (50,153) (39,178) (39,482) 304
- 6 (6) 59,178 59,178 -
- - - (15,000) (15,000) -
- 6 (6) 44,178 44,178 -
(65,470) (15,311) (50,159) 5,000 4,696 304
488,669 488,669 - 470,610 470,610 -
423,199$ 473,358$ (50,159)$ 475,610$ 475,306$ 304$
-111-
Totals
Final Variance with
Budget Actual Budget
Revenues
Taxes and special assessments 416,760$ 395,821$ 20,939$
Intergovernmental 45,731,830 23,784,966 21,946,864
Charges for services 8,157,569 8,000,651 156,918
Fines and forfeits 830,000 1,294,193 (464,193)
Interest 203,200 28,821 174,379
Contributions 10,000 10,000 -
Other 544,528 260,875 283,653
Total revenues 55,893,887 33,775,327 22,118,560
Expenditures
Current expenditures:
General government 2,491,935 2,421,313 70,622
Public safety 6,873,583 7,377,994 (504,411)
Highways and streets 11,075,864 8,758,310 2,317,554
Recreation and culture 123,214 96,783 26,431
Other functions 29,477,263 12,930,993 16,546,270
Debt service:
Principal 2,241,762 1,891,762 350,000
Interest 706,166 913,591 (207,425)
Capital outlay 20,628,121 9,681,963 10,946,158
Total expenditures 73,617,908 44,072,709 29,545,199
Revenues over (under)
expenditures (17,724,021) (10,297,382) 7,426,639
Other financing sources (uses)
Transfers in 17,067,747 11,701,209 5,366,538
Transfers out (1,724,720) (1,915,000) 190,280
Total other financing
sources (uses) 15,343,027 9,786,209 5,556,818
Net change in fund balances (2,380,993) (511,173) 1,869,820
Fund balances, beginning of year 13,638,320 13,638,320 -
Fund balances, end of year 11,257,327$ 13,127,147$ 1,869,820$
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, 2010
-112-
Nonmajor Debt Service Funds
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
$4,000,000 Unlimited Tax General Obligation Bonds.
-113-
City of Lansing
Combining Balance Sheet - Nonmajor Debt Service Funds
June 30, 2010
1996 1998 1999 2001
Refunding Building Fire Fire
Bonds Authority Station Station Totals
Assets
Equity in pooled cash -$ -$ 44,338$ 82,096$ 126,434$
Fund balances
Unreserved, undesignated -$ -$ 44,338$ 82,096$ 126,434$
-114-
1996 1998 1999 2001
Refunding Building Fire Fire
Bonds Authority Station Station Totals
Revenues
Taxes and special assessments -$ -$ 262,794$ 387,214$ 650,008$
Interest 330 - 1,382 1,996 3,708
Total revenues 330 - 264,176 389,210 653,716
Expenditures
Debt service:
Principal payments - 115,000 185,000 300,000 600,000
Interest - 57,163 87,494 140,988 285,645
Total expenditures - 172,163 272,494 440,988 885,645
Revenues over (under)
expenditures 330 (172,163) (8,318) (51,778) (231,929)
Other financing sources
Transfers in - 171,727 - 85,941 257,668
Transfers out (85,941) - - - (85,941)
Total other financing sources (uses) (85,941) 171,727 - 85,941 171,727
Net change in fund balances (85,611) (436) (8,318) 34,163 (60,202)
Fund balances, beginning of year 85,611 436 52,656 47,933 186,636
Fund balances, end of year -$ -$ 44,338$ 82,096$ 126,434$
City of Lansing
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances - Nonmajor Debt Service Funds
For the Year Ended June 30, 2010
-115-
CITY OF LANSING
-116-
Nonmajor Capital Projects Funds
1990 Environmental I Fund –This fund accounts for the proceeds of the 1990 $7,000,000 Environmental bonds.
1990 Environmental II Fund – This fund accounts for the proceeds of the 1990 $6,300,000 Environmental
bonds.
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.
Lansing Center Improvements Fund – This fund accounts for the proceeds of the 2006 $4,000,000 Lansing
Center Limited Tax Bonds.
MTF Bonds Fund – This fund accounts for the proceeds of the $1,600,000 Michigan Transportation Fund
Limited Tax Bonds.
2009 Build America Construction – This fund accounts for the proceeds of the 2009 $10,197,000 Capital
improvement limited tax general obligation bonds.
Other Capital Projects Fund – This fund accounts for miscellaneous capital projects.
-117-
City of Lansing
Combining Balance Sheet - Nonmajor Capital Projects Funds
June 30, 2010
1990 1990 Combined Special
Environ- Environ- Sewer Assess-
mental I mental II Overflow ments
Assets
Cash and cash equivalents -$ -$ -$ -$
Equity in pooled cash 86,366 184,235 - -
Investments - - - -
Special assessments receivable:
Current - - - 216,472
Deferred - - - 697,328
Accrued interest receivable - - - -
Due from other funds - - - -
Advances to other funds - - - -
Due from other governments - - - 1,070
Total assets 86,366$ 184,235$ -$ 914,870$
Liabilities and fund balances
Liabilities
Accounts payable -$ -$ -$ 95,761$
Accrued payroll - - - -
Due to other funds - - - -
Advances from other funds - - - 271,454
Deferred revenue - - - 697,328
Total liabilities - - - 1,064,543
Fund balances
Reserved for advances - - - -
Unreserved, undesignated (deficit) 86,366 184,235 - (149,673)
Total fund balances (deficit) 86,366 184,235 - (149,673)
Total liabilities and fund balances 86,366$ 184,235$ -$ 914,870$
-118-
Lansing
Center MTF
Improvements Bonds Other Totals
-$ 827,113$ -$ -$ 827,113$
665,938 - - 1,021,633 1,958,172
- - 6,370,745 - 6,370,745
- - - - 216,472
- - - - 697,328
- 36 893 - 929
- 339,507 - 4,400,000 4,739,507
- - - 80,531 80,531
- - - - 1,070
665,938$ 1,166,656$ 6,371,638$ 5,502,164$ 14,891,867$
-$ -$ -$ 221,800$ 317,561$
- - - 7,896 7,896
- - 1,902,453 - 1,902,453
- - - - 271,454
- - - - 697,328
- - 1,902,453 229,696 3,196,692
- - - 80,531 80,531
665,938 1,166,656 4,469,185 5,191,937 11,614,644
665,938 1,166,656 4,469,185 5,272,468 11,695,175
665,938$ 1,166,656$ 6,371,638$ 5,502,164$ 14,891,867$
2009 Build
America
Construction
-119-
City of Lansing
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances - Nonmajor Capital Projects Funds
For the Year Ended June 30, 2010
1990 1990 Combined Special
Environ- Environ- Sewer Assess-
mental I mental II Overflow ments
Revenues
Special assessments -$ -$ -$ 268,383$
Charges for services - - - -
Interest 395 935 - -
Donations from private sources - - - -
Total revenues 395 935 - 268,383
Expenditures
Capital outlay - 32,949 - 248,856
Revenues over (under) expenditures 395 (32,014) - 19,527
Other financing sources (uses)
Transfers in - - - -
Transfers out - - (1,049,865) -
Issuance of long-term debt - - - -
Bond discount - - - -
Total other financing sources (uses) - - (1,049,865) -
Net change in fund balances 395 (32,014) (1,049,865) 19,527
Fund balance (deficit), beginning of year 85,971 216,249 1,049,865 (169,200)
Fund balance (deficit), end of year 86,366$ 184,235$ -$ (149,673)$
-120-
Lansing 2009
Center MTF Build America
Improvements Bonds Construction Other Totals
-$ -$ -$ -$ 268,383$
- - - 422,411 422,411
3,144 2,516 11,190 10,629 28,809
- - - 9,000 9,000
3,144 2,516 11,190 442,040 728,603
24,993 - 49,351 4,743,616 5,099,765
(21,849) 2,516 (38,161) (4,301,576) (4,371,162)
- 116,594 - 2,254,802 2,371,396
- (569,503) (5,638,771) (1,283,787) (8,541,926)
- - 10,197,000 - 10,197,000
- - (50,883) - (50,883)
- (452,909) 4,507,346 971,015 3,975,587
(21,849) (450,393) 4,469,185 (3,330,561) (395,575)
687,787 1,617,049 - 8,603,029 12,090,750
665,938$ 1,166,656$ 4,469,185$ 5,272,468$ 11,695,175$
-121-
CITY OF LANSING
-122-
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.
-123-
City of Lansing
Combining Balance Sheet - Nonmajor Permanent Funds
June 30, 2010
Cemetery
Perpetual Parks
Care Trust Totals
Assets
Equity in pooled cash 1,648,300$ 1,250$ 1,649,550$
Fund balances
Unreserved, undesignated 1,648,300$ 1,250$ 1,649,550$
-124-
City of Lansing
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances - Nonmajor Permanent Funds
For the Year Ended June 30, 2010
Cemetery
Perpetual Parks
Care Trust Totals
Revenues
Interest 9,697$ 6$ 9,703$
Other financing sources (uses)
Transfers in 19,452 - 19,452
Transfers out (9,697) (6) (9,703)
Total other financing uses 9,755 (6) 9,749
Net change in fund balances 19,452 - 19,452
Fund balances, beginning of year 1,628,848 1,250 1,630,098
Fund balances, end of year 1,648,300$ 1,250$ 1,649,550$
-125-
CITY OF LANSING
-126-
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.
-127-
City of Lansing
Combining Statement of Net Assets - Nonmajor Enterprise Funds
June 30, 2010
Garbage and
Rubbish
Cemetery Golf Collection
Assets
Current assets:
Cash and cash equivalents 200$ 16,428$ 15,350$
Equity in pooled cash 124,656 17,164 144,978
Accounts receivable, net - - 594,557
Inventories 87,619 4,199 14,921
Total current assets 212,475 37,791 769,806
Noncurrent assets :
Capital assets not being depreciated 57,740 446,501 -
Capital assets being depreciated, net 210,329 2,484,420 -
Total noncurrent assets 268,069 2,930,921 -
Total assets 480,544 2,968,712 769,806
Liabilities
Current liabilities:
Accounts payable 6,475 13,896 32,340
Accrued interest payable - 8,838 -
Accrued payroll 20,527 18,676 -
Due to other funds - 80,000 300,000
Unearned revenues - 30,450 87,916
Current portion of:
Long-term debt - 75,000 -
Compensated absences 3,820 17,105 -
Total current liabilities 30,822 243,965 420,256
Noncurrent liabilities:
Long-term debt, net of current portion - 552,923 -
Compensated absences 1,286 5,763 -
Total noncurrent liabilities 1,286 558,686 -
Total liabilities 32,108 802,651 420,256
Net Assets
Invested in capital assets, net
of related debt 268,069 2,302,998 -
Unrestricted (deficit)180,367 (136,937) 349,550
Total net assets 448,436$ 2,166,061$ 349,550$
-128-
Recycling Totals
-$ 31,978$
1,216,562 1,503,360
1,506 596,063
- 106,739
1,218,068 2,238,140
19,412 523,653
732,829 3,427,578
752,241 3,951,231
1,970,309 6,189,371
27,032 79,743
- 8,838
- 39,203
- 380,000
- 118,366
- 75,000
5,208 26,133
32,240 727,283
- 552,923
1,755 8,804
1,755 561,727
33,995 1,289,010
752,241 3,323,308
1,184,073 1,577,053
1,936,314$ 4,900,361$
-129-
City of Lansing
Combining Statement of Revenues, Expenses and
Changes in Fund Net Assets - Nonmajor Enterprise Funds
For the Year Ended June 30, 2010
Garbage and
Rubbish
Cemetery Golf Collection
Operating revenues
Charges for services 226,973$ 438,315$ 1,677,428$
Operating expenses
Personal services 393,422 413,047 695,510
Contractual and materials 246,545 311,627 754,657
Depreciation 19,617 107,143 -
Total operating expenses 659,584 831,817 1,450,167
Operating income (loss) (432,611) (393,502) 227,261
Nonoperating revenues (expenses)
Interest revenue - - -
Interest expense and fees - (37,186) (892)
Total nonoperating revenues
(expenses) - (37,186) (892)
Gain (loss) before contributions
and transfers (432,611) (430,688) 226,369
Capital contributions 40,809 - -
Transfers in 472,877 311,382 -
Transfers out (19,452) - -
Change in net assets 61,623 (119,306) 226,369
Net assets, beginning of year 386,813 2,285,367 123,181
Net assets, end of year 448,436$ 2,166,061$ 349,550$
-130-
Recycling Totals
2,651,309$ 4,994,025$
1,643,978 3,145,957
1,137,521 2,450,350
22,548 149,308
2,804,047 5,745,615
(152,738) (751,590)
4,958 4,958
- (38,078)
4,958 (33,120)
(147,780) (784,710)
- 40,809
- 784,259
- (19,452)
(147,780) 20,906
2,084,094 4,879,455
1,936,314$ 4,900,361$
-131-
City of Lansing
Combining Statement of Cash Flows
Nonmajor Enterprise Funds
For the Year Ended June 30, 2010
Garbage and
Rubbish
Cemetery Golf Collection
Cash flows from operating activities
Cash received from customers 226,973$ 438,315$ 1,519,032$
Cash payments for goods and services (290,623) (219,037) (667,152)
Cash payments to employees (394,359) (415,736) (695,510)
Net cash provided by (used for)
operating activities (458,009) (196,458) 156,370
Cash flows from noncapital
financing activities
Transfers in 472,877 311,382 -
Transfers out (19,452) - -
Net cash provided by noncapital
financing activities 453,425 311,382 -
Cash flows from capital and related
financing activities
Capital contributions received 40,809 - -
Principal paid on bonds - (70,000) -
Interest paid on bonds - (36,578) (892)
Net cash provided by (used for)
capital and related financing activities 40,809 (106,578) (892)
Cash flows from investing activities
Interest and dividends - - -
Net increase (decrease) in cash and
cash equivalents 36,225 8,346 155,478
Cash and cash equivalents:
Beginning of year 88,631 25,246 4,850
End of year 124,856$ 33,592$ 160,328$
-132-
Recycling Totals
2,651,287$ 4,835,607$
(1,131,754) (2,308,566)
(1,643,978) (3,149,583)
(124,445) (622,542)
- 784,259
- (19,452)
- 764,807
- 40,809
- (70,000)
- (37,470)
- (66,661)
4,958 4,958
(119,487) 80,562
1,336,049 1,454,776
1,216,562$ 1,535,338$
continued…
-133-
City of Lansing
Combining Statement of Cash Flows (Concluded)
Nonmajor Enterprise Funds
For the Year Ended June 30, 2010
Garbage and
Rubbish
Cemetery Golf Collection
Reconciliation of operating loss
to net cash provided by (used for)
operating activities
Operating loss (432,611)$ (393,502)$ 227,261$
Adjustments to reconcile operating
loss to net cash from
operating activities:
Depreciation expense 19,617 107,143 -
Changes in assets and liabilities:
Accounts receivable - - (158,396)
Inventories (37,970) 10,825 (7,419)
Accounts payable 4,824 7,713 (4,130)
Accrued interest payable - (927) -
Accrued payroll (937) (2,689) -
Due to other funds - 80,000 300,000
Interfund payable - - (174,264)
Unearned revenues - 364 (26,682)
Compensated absences (10,932) (5,385) -
Net cash provided by (used for)
operating activities (458,009)$ (196,458)$ 156,370$
-134-
Recycling Totals
(152,738)$ (751,590)$
22,548 149,308
(22) (158,418)
- (34,564)
(1,196) 7,211
- (927)
- (3,626)
- 380,000
- (174,264)
- (26,318)
6,963 (9,354)
(124,445)$ (622,542)$
-135-
CITY OF LANSING
-136-
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.
-137-
City of Lansing
Combining Statement of Net Assets
Internal Service Funds
June 30, 2010
Fleet Fringe
Maintenance Benefits Engineering Totals
Assets
Current assets:
Equity in pooled cash 1,969,419$ 688,395$ 598,810$ 3,256,624$
Receivables:
Accounts receivable, net 49,200 624,084 - 673,284
Inventories 824,893 - - 824,893
Prepaids - 777,620 - 777,620
Due from other funds 1,630,000 - - 1,630,000
Total current assets 4,473,512 2,090,099 598,810 7,162,421
Noncurrent assets:
Issuance costs - - 3,705 3,705
Capital assets not being depreciated 55,297 - - 55,297
Capital assets being depreciated, net 4,753,219 - 1,865,950 6,619,169
Total non-current assets 4,808,516 - 1,869,655 6,678,171
Total assets 9,282,028 2,090,099 2,468,465 13,840,592
Liabilities
Current liabilities:
Accounts payable 154,729 763,058 59,278 977,065
Accrued interest payable - - 16,139 16,139
Accrued payroll 59,463 1,345,642 62,379 1,467,484
Claims incurred but not reported - 2,127,406 - 2,127,406
Current portion of:
Long-term debt - - 145,000 145,000
Compensated absences 157,081 - 301,083 458,164
Total current liabilities 371,273 4,236,106 583,879 5,191,258
Noncurrent liabilities:
Long-term debt, net of current portions - - 760,000 760,000
Compensated absences 52,926 - 101,444 154,370
Total non-current liabilities 52,926 - 861,444 914,370
Total liabilities 424,199 4,236,106 1,445,323 6,105,628
Net assets
Invested in capital assets, net of related debt 4,808,516 - 960,950 5,769,466
Unrestricted (deficit) 4,049,313 (2,146,007) 62,192 1,965,498
Total net assets (deficit) 8,857,829$ (2,146,007)$ 1,023,142$ 7,734,964$
-138-
City of Lansing
Combining Statement of Revenues, Expenses
and Changes in Fund Net Assets
Internal Service Funds
For the Year Ended June 30, 2010
Fleet Fringe
Maintenance Benefits Engineering Totals
Operating revenues
Charges for services 6,758,707$ 50,914,740$ 2,372,254$ 60,045,701$
Operating expenses
Personal services 2,977,062 325,718 2,012,579 5,315,359
Purchase of goods and services 2,650,982 53,331,475 366,327 56,348,784
Depreciation 1,332,775 - 43,905 1,376,680
Total operating expenses 6,960,819 53,657,193 2,422,811 63,040,823
Operating loss (202,112) (2,742,453) (50,557) (2,995,122)
Nonoperating revenues (expenses)
Gain on sale of capital assets 75,094 - - 75,094
Interest expense and fees - - (53,886) (53,886)
Total nonoperating revenues (expenses) 75,094 - (53,886) 21,208
Change in net assets (127,018) (2,742,453) (104,443) (2,973,914)
Net assets, beginning of year 8,984,847 596,446 1,127,585 10,708,878
Net assets (deficit), end of year 8,857,829$ (2,146,007)$ 1,023,142$ 7,734,964$
-139-
City of Lansing
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2010
Fleet Fringe
Maintenance Benefits Engineering Totals
Cash flows from operating activities
Cash received from interfund services 9,701,450$ 50,565,361$ 2,372,254$ 62,639,065$
Cash payments for goods and services (2,733,559) (53,191,003) (205,978) (56,130,540)
Cash payments to employees (3,005,290) 901,319 (1,997,714) (4,101,685)
Net cash provided by (used for)
operating activities 3,962,601 (1,724,323) 168,562 2,406,840
Cash flows from capital and related financing activities
Proceeds from sale of capital assets 75,094 - - 75,094
Acquisition and construction of capital assets (2,501,014) - - (2,501,014)
Principal paid on revenue and general obligation bonds - - (135,000) (135,000)
Interest paid on revenue and general obligation bonds - - (53,233) (53,233)
Net cash used for capital and related
financing activities (2,425,920) - (188,233)(2,614,153)
Net increase (decrease) in cash and cash equivalents 1,536,681 (1,724,323) (19,671) (207,313)
Cash and cash equivalents, beginning of year 432,738 2,412,718 618,481 3,463,937
Cash and cash equivalents, end of year 1,969,419$ 688,395$ 598,810$ 3,256,624$
Reconciliation of operating income (loss) to
net cash provided by (used for) operating activities
Operating loss (202,112)$ (2,742,453)$ (50,557)$ (2,995,122)$
Adjustments to reconcile operating loss to
net cash provided by (used for) operating activities
Depreciation expense 1,332,775 - 43,905 1,376,680
Change in:
Accounts receivable (49,200) (349,379) - (398,579)
Inventories (5,892) - - (5,892)
Prepaids - (185,331) - (185,331)
Due from other funds (1,630,000) - - (1,630,000)
Interfund receivable 4,621,943 - - 4,621,943
Accounts payable (28,838) 61,813 52,228 85,203
Accrued interest payable - - (2,408) (2,408)
Accrued payroll (28,228) 1,227,037 14,865 1,213,674
Other - 263,990 - 263,990
Compensated absences (47,847) - 110,529 62,682
Total adjustments 4,164,713 1,018,130 219,119 5,401,962
Net cash provided by (used for) operating activities 3,962,601$ (1,724,323)$ 168,562$ 2,406,840$
-140-
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.
-141-
City of Lansing
Combining Statement of Fiduciary Assets and Liabilities
Agency Funds
June 30, 2010
54-A District Court
Garnishment,
Bail Indemnity Bond
Bonds and Restitution Totals
Assets
Equity in pooled cash 103,577$ 12,503$ 116,080$
Liabilities
Undistributed receipts 103,577$ 12,503$ 116,080$
-142-
City of Lansing
Combining Statement of Changes in Fiduciary Assets and Liabilities
Agency Funds
For the Year Ended June 30, 2010
Beginning Ending
Balance Additions Deletions Balance
54-A District Court - Bail Bonds
Assets
Equity in pooled cash 106,512$ 591,781$ 594,716$ 103,577$
Liabilities
Undistributed receipts 106,512$ 591,781$ 594,716$ 103,577$
54-A District Court - Garnishment, Indemnity Bond and Restitution
Assets
Equity in pooled cash 12,269$ 107,143$ 106,909$ 12,503$
Liabilities
Undistributed receipts 12,269$ 107,143$ 106,909$ 12,503$
Total - All Agency Funds
Assets
Equity in pooled cash 118,781$ 698,924$ 701,625$ 116,080$
Liabilities
Undistributed receipts 118,781$ 698,924$ 701,625$ 116,080$
-143-
CITY OF LANSING
-144-
STATISTICAL SECTION
-145-
STATISTICAL SECTION
This part of the City of Lansing’s comprehensive annual financial report presents detailed
information as a context for understanding what the information in the financial
statements, note disclosures, and required supplementary information says about the
City’s overall financial health.
Contents Pages
Financial Trends 147-150
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 151-155
These schedules contain information to help the reader assess
the factors affecting the City’s ability to generate its property
taxes.
Debt Capacity 156-160
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 161-162
These schedules offer demographic and economic indicators to
help the reader understand the environment within which the
City’s financial activities take place and to help make
comparisons over time and with other governments.
Operating Information 163-165
These schedules contain information about the City’s operations
and resources to help the reader understand how the City’s
financial information relates to the services the City provides and
the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial
reports for the relevant year. The City implemented Statement 34 in 2002; schedules presenting government-wide
information include information beginning in that year.
-146-
Schedule 1
City of Lansing
Net Assets by Component
Last Nine Fiscal Years
(accrual basis of accounting)Fiscal Year
2010 2009 2008 2007 2006 2005 2004 2003 2002
(2)
Governmental activities
Invested in capital assets, net of related debt 186,536,428$ $191,516,475 $187,054,852 $184,150,439 $190,243,447 $198,338,788 $197,530,605 $193,545,003 $176,742,875
Restricted 14,304,689 17,139,090 34,554,539 37,642,784 36,706,345 33,900,657 6,370 172,111
Unrestricted (7,649,432) 6,589,790 (3,124,027) 2,776,006 514,601 1,632,040 15,331,622 20,363,235 39,491,342
Total governmental activities net assets 193,191,685 215,245,355 218,485,364 224,569,229 227,464,393 233,871,485 212,862,227 213,914,608 216,406,328
Business-type activities
Invested in capital assets, net of related debt 194,854,140 185,430,669 178,526,049 166,320,408 161,324,071 163,834,290 138,830,169 163,715,373 154,922,603
Restricted 19,917,341 19,454,812 30,892,739 35,777,715 35,945,848 39,493,526 718,828 1,039,093 2,105,762
Unrestricted 30,193,568 23,730,694 16,330,517 28,929,677 28,208,193 22,701,430 64,268,351 35,649,876 36,078,930
Total business-type activities net assets 244,965,049 228,616,175 225,749,305 231,027,800 225,478,112 226,029,246 203,817,348 200,404,342 193,107,295
Primary government
Invested in capital assets, net of related debt 381,390,568 376,947,144 365,580,901 350,470,847 351,567,518 362,173,078 336,360,774 357,260,376 331,665,478
Restricted 34,222,030 36,593,902 65,447,278 73,420,499 72,652,193 73,394,183 718,828 1,045,463 2,277,873
Unrestricted 22,544,136 30,320,484 13,206,490 31,705,683 28,722,794 24,333,470 79,599,973 56,013,111 75,570,272
Total primary government net assets $438,156,734 $443,861,530 $444,234,669 $455,597,029 $452,942,505 $459,900,731 $416,679,575 $414,318,950 $409,513,623
(1) no discretely presented component units shown
(2) in 2005 the City's definition of "restricted net assets" was changed to include assets in funds set up to account for
activities outside of the General Fund, for Governmental Activities, and to include restricted cash for debt retirement
for Business Type Activities.
(3) nine years are reported back to the date of GASB 34 implementation
-147-
Schedule 2
City of Lansing
Changes in Net Assets
Last Nine Fiscal Years
(accrual basis of accounting)Fiscal Year
2010 2009 2008 2007 2006 2005 2004 2003 2002
Expenses
Governmental activities:
General government 30,326,671$ $26,426,242 $28,901,548 $22,043,283 $34,375,762 $53,533,838 $53,353,559 $54,386,814 $48,907,951
Public safety 84,566,215 71,236,947 76,211,756 62,570,888 60,047,271 38,668,349 41,292,750 36,998,022 37,442,294
Public works 29,252,516 37,588,680 40,032,746 40,517,063 31,790,944 30,670,483 22,118,173 23,740,767 22,332,626
Recreation and culture 7,312,480 7,298,385 7,677,083 6,198,462 7,881,212 5,464,143 7,979,953 8,055,078 6,790,347
Community development 9,715,087 6,378,286 6,382,336 6,232,406 7,124,491 6,996,000 8,387,559 9,647,696 8,960,204
Interest on long-term debt 2,229,288 1,803,125 1,481,658 1,658,708 1,197,851 1,033,078 2,041,758 2,333,691 2,705,290
Total governmental activities expenses 163,402,257 150,731,665 160,687,127 139,220,810 142,417,531 136,365,891 135,173,752 135,162,068 127,138,712
Business-type activities
Sewage disposal system 24,931,075 26,247,188 27,382,736 24,725,229 21,706,537 20,631,611 20,864,079 19,350,186 17,218,878
Municipal parking system 8,305,095 8,353,063 10,188,065 10,275,379 18,403,163 10,151,018 9,196,910 8,840,334 8,322,193
Cemetery 659,584 689,979 675,672 692,510 753,151 802,949 828,073 688,571 570,291
Golf 869,003 927,200 1,072,505 1,358,008 1,398,963 1,446,615 1,620,669 1,583,711 1,222,525
Garbage and rubbish collection 1,451,059 1,547,372 1,436,642 1,372,266 1,412,620 1,421,617 1,321,760 1,288,178 1,229,951
Recycling 2,804,047 3,008,750 2,940,366 2,777,068 2,981,730 2,862,003 2,768,307 2,642,541 2,437,371
Potter Park Zoo - 0 (156,270) 2,968,236 2,718,759 2,690,943 2,542,065 2,228,724 1,778,059
Total business-type activities expenses 39,019,863 40,773,552 43,539,716 44,168,696 49,374,923 40,006,756 39,141,863 36,622,245 32,779,268
Total primary government expenses 202,422,120 191,505,217 204,226,843 183,389,506 $191,792,454 $176,372,647 $174,315,615 $171,784,313 $159,917,980
Program Revenues
Governmental activities:
Charges for services:
General government 6,565,263 5,188,510 5,938,911 6,251,032 6,416,850 6,264,142 4,686,901 4,611,471 1,908,603
Public safety 8,589,146 9,817,421 12,705,181 13,014,934 13,087,372 12,400,853 11,682,187 11,031,998 10,393,731
Public works 2,788,112 4,565,013 4,364,525 3,805,739 3,891,646 2,646,007 2,713,258 2,627,959 2,345,220
Recreation and culture 587,906 1,217,445 1,556,260 1,259,373 1,405,584 1,598,968 1,581,607 1,472,203 1,509,159
Community development 69,250 50,132 66,308 66,161 66,486 66,788 0 0 0
Operating grants and contributions 27,515,892 26,462,211 20,356,292 16,524,178 16,158,496 16,673,481 15,746,181 15,968,081 17,980,993
Capital grants and contributions 3,109,410 2,571,741 2,531,974 2,179,870 3,659,169 3,479,536 3,033,891 1,734,008 2,822,477
Total governmental activities program revenues 49,224,979 49,872,473 47,519,451 43,101,287 44,685,603 43,129,775 39,444,025 37,445,720 36,960,183
Business-type activities:
Charges for services:
Sewage disposal system 28,907,772 27,446,304 28,023,322 26,926,202 26,867,610 26,890,756 26,529,842 26,045,574 25,414,112
Municipal parking system 7,396,219 7,539,611 10,090,566 10,838,270 10,289,830 9,628,690 7,510,354 7,642,684 7,763,065
Cemetery 226,973 248,314 218,688 264,255 237,564 230,716 226,631 199,760 231,304
Golf 438,315 448,067 607,922 754,995 890,190 929,266 951,923 997,177 1,014,675
Garbage and rubbish collection 1,677,428 1,486,531 1,617,717 1,378,562 1,295,053 1,322,111 1,315,413 1,189,489 801,418
Recycling 2,651,309 2,945,061 3,039,089 2,903,092 2,816,277 2,636,002 2,115,917 2,138,308 1,928,476
Potter Park Zoo 0 0 (115) 553,999 471,703 558,654 505,666 436,199 426,434
Operating grants and contributions 1,535,907 1,541,913 0 0 0 0 0 0 0
Capital grants and contributions 11,928,108 60,318 196,317 183,012 1,368,773 731,575 93,207 914,570 0
Total business-type activities program revenues 54,762,031 41,716,119 43,793,506 43,802,387 44,237,000 42,927,770 39,248,953 39,563,761 37,579,484
Total primary government program revenues $103,987,010 $91,588,592 $91,312,957 $86,903,674 $88,922,603 $86,057,545 $78,692,978 $77,009,481 $74,539,667
Net(Expenses)/Revenues
Governmental activities ($114,177,278) ($100,859,192) ($113,167,676) ($96,119,523) ($97,731,928) ($93,236,116) ($95,729,727) ($97,716,348) ($90,178,529)
Business-type activities 15,742,168 942,567 253,790 (366,309) (5,137,923) 2,921,014 107,090 2,941,516 4,800,216
Total primary government net expense ($98,435,110) ($99,916,625) ($112,913,886) ($96,485,832) ($102,869,851) ($90,315,102) ($95,622,637) ($94,774,832) ($85,378,313)
General Revenues and Other Changes in Net Assets
Governmental activities:
Taxes
Property Taxes 39,010,960 39,141,928 38,607,761 38,371,105 37,506,017 36,181,408 40,354,088 39,571,155 39,158,867
Income taxes 27,408,443 29,312,762 31,168,012 28,209,913 27,032,176 27,435,047 27,437,494 29,099,955 27,596,270
Unrestricted grants and contributions 25,847,423 27,318,313 28,180,799 27,258,536 26,817,633 26,355,710 26,338,413 28,198,831 28,618,275
Investment earnings 246,495 978,034 1,706,572 2,483,162 1,634,608 715,608 312,069 725,936 972,802
Miscellaneous 75,094 32,310 774,822 104,563 2,903,792 1,838,895 1,946,818
Transfers (464,807) (509,728) 7,420,667 (3,098,357) (3,132,465) (2,123,435) (2,668,510) (4,130,144) (1,925,790)
Total governmental activities 92,123,608 96,273,619 107,083,811 93,224,359 90,632,791 88,668,901 94,677,346 95,304,628 96,367,242
Business-type activities:
Investment earnings 141,899 413,850 1,883,034 2,815,480 1,453,076 1,298,407 249,855 294,425 628,797
Miscellaneous 0 725 5,348 2,160 1,248 23,736 387,551 343,174 1,438,488
Transfers 464,807 509,728 (7,420,667) 3,098,357 3,132,465 2,123,435 2,668,510 3,717,932 1,486,240
Total business-type activities 606,706 924,303 (5,532,285) 5,915,997 4,586,789 3,445,578 3,305,916 4,355,531 3,553,525
Total primary government $92,730,314 $97,197,922 $101,551,526 $99,140,356 $95,219,580 $92,114,479 $97,983,262 $99,660,159 $99,920,767
Changes in Net Assets
Governmental activities ($22,053,670) ($4,585,573) ($6,083,865) ($2,895,164) ($7,099,137) ($4,567,215) ($1,052,381) ($2,411,720) $6,188,713
Business-type activities 16,348,874 1,866,870 (5,278,495) 5,549,688 (551,134) 6,366,592 3,413,006 7,297,047 8,353,741
Total primary government ($5,704,796) ($2,718,703) ($11,362,360) $2,654,524 ($7,650,271) $1,799,377 $2,360,625 $4,885,327 $14,542,454
(1) No discretely presented component units shown
(2) Nine years are reported back to the date of GASB 34 implementation
(3) The increase in Public Safety and Community Development and decrease in Public Works expenses were due to a change in classification of grant expenses for FY 2010.
Previously, several grants which were classified as Public Works activities; however, it was determined in FY 2010, that some are more fittingly classified as Public Safety and
Community Development activities.
-148-
Schedule 3
City of Lansing
Fund Balances, Governmental Funds
Last Nine Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2010 2009 2008 2007 2006 2005 2004 2003 2002
General Fund
Reserved 102,732$ 1,320,375$ 1,765,288$ 1,848,021$ 2,443,224$ 2,482,589$ 1,324,109$ 945,386$ 1,145,896$
Unreserved 389,061 3,755,862 5,465,164 5,036,129 4,634,961 4,709,909 5,606,958 5,985,681 5,785,171
Total General Fund 491,793$ 5,076,237$ 7,230,452$ 6,884,150$ 7,078,185$ 7,192,498$ 6,931,067$ 6,931,067$ 6,931,067$
All Other Governmental Funds
Reserved 1,177,998$ 324,366$ 365,351$ 2,544,339$ 613,533$ 2,139,438$ 3,688,795$ 4,541,303$ 4,898,039$
Unreserved, reported in:
Special revenue funds 12,029,680 13,394,485 14,716,755 14,523,146 18,798,291 17,635,170 17,950,570 17,933,354 19,123,737
Capital projects funds 11,614,644 12,010,219 17,862,441 18,978,360 15,717,371 12,563,759 15,293,862 16,967,327 19,447,491
Debt service funds 126,434 186,636 256,144 144,518 88,826 4,400 0 0 0
Permanent funds 1,649,550 1,630,098 1,609,992 1,596,939 1,577,150 1,557,890 0 0 0
Total all other governmental funds 26,598,306$ 27,545,804$ 34,810,683$ 37,787,302$ 36,795,171$ 33,900,657$ 36,933,227$ 39,441,984$ 43,469,267$
Total All Governmental Funds 27,090,099$ 32,622,041$ 42,041,135$ 44,671,452$ 43,873,356$ 41,093,155$ 43,864,294$ 46,373,051$ 50,400,334$
(1) In 2005 the City's definition for Permanent Funds fund balance changed to "Unreserved" due to the nature of the funds
being set up as a reserved fund
(2) Nine years are reported back to the date of GASB 34 implementation
-149-
Schedule 4
City of Lansing
Changes in Fund Balance, Governmental Funds
Last Nine Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2010 2009 2008 2007 2006 2005 2004 2003 2002
Revenues
Property taxes 39,279,343$ 39,258,893$ 38,775,722$ 38,681,928$ 37,957,773$ 36,527,417$ 40,354,088$ 39,426,786$ 39,303,237$
Income taxes 27,408,443 29,312,762 31,168,012 28,209,913 27,032,176 27,497,542 27,413,270 29,159,482 27,577,803
Licenses and permits 1,414,906 1,325,119 1,429,075 1,101,550 860,647 791,655 814,989 925,455 976,332
Intergovernmental 39,137,217 38,998,039 38,556,616 34,699,908 34,964,225 35,624,372 36,312,111 36,183,631 41,155,183
Charges for services 18,323,158 20,355,642 19,116,593 18,415,612 19,436,267 17,931,572 16,745,202 15,522,204 15,057,729
Fines and forfeits 4,579,175 4,143,000 4,090,397 4,349,642 4,515,951 4,351,977 4,870,577 5,645,029 4,383,678
Interest and rents 250,203 1,196,559 1,836,485 2,607,388 1,710,674 720,707 357,382 823,308 1,096,086
Contributions 10,606,368 10,372,056 10,894,573 9,980,854 9,385,831 8,966,289 8,744,295 9,255,742 8,069,915
Donations from private sources 9,000 44,000 326,768 114,954 549,055 126,182 22,031 376,793 85,307
Other revenue 473,123 1,054,209 331,248 1,019,476 1,082,283 1,320,064 1,285,903 779,115 703,332
Total revenues 141,480,936$ 146,060,279$ 146,525,489$ 139,181,225$ 137,494,882$ 133,857,777$ 136,919,848$ 138,097,545$ 138,408,602$
Expenditures
General government 27,839,564 28,951,805 29,209,458 28,905,058 34,956,037 55,746,807 54,420,735 53,381,289 49,156,129
Public safety 70,820,184 70,082,462 67,715,160 65,218,515 59,143,629 38,121,596 40,145,137 39,321,853 39,290,562
Highways and streets 14,506,982 14,723,311 14,860,390 13,501,747 10,879,004 10,467,860 9,216,004 9,776,628 9,110,517
Recreation and culture 8,127,700 8,452,768 8,038,290 7,676,600 7,509,183 5,517,980 6,229,014 6,555,043 6,219,773
Other functions 15,182,675 12,599,072 11,805,843 9,847,925 8,259,415 8,520,848 6,971,380 5,725,184 8,255,056
Capital outlay 14,781,728 14,855,863 16,228,127 20,001,659 13,306,810 12,614,723 11,917,608 15,241,548 14,195,769
Debt service
Interest 3,270,068 1,801,394 1,607,703 1,285,436 1,145,588 1,187,673 2,331,276 2,625,499 2,951,352
Principal 2,165,976 4,743,146 4,721,581 3,875,909 3,244,879 3,592,766 6,874,234 6,298,264 7,886,020
Total expenditures 156,694,877$ 156,209,821$ 154,186,552$ 150,312,849$ 138,444,545$ 135,770,253$ 138,105,388$ 138,925,308$ 137,065,178$
Excess of revenues over (under) expenditures (15,213,941) (10,149,542) (7,661,063) (11,131,624) (949,663) (1,912,476) (1,185,540) (827,763) 1,343,424
Other Financing Sources (Uses)
Proceeds from borrowing 10,146,117$ -$ 4,052,979.0$ 15,190,077.0$ 6,087,507.0$ 1,784,465.0$ 570,000.0$ 1,500,000.0$ 3,914,787.0$
Proceeds from sale of capital assets 689 1,587,216 774,822 74,565 799,497 99,434 896,818
Insurance proceeds 0 120,960
Transfers in 16,181,590 11,601,871 13,507,521 6,908,259 8,170,998 8,274,929 13,628,444 14,083,970 16,789,516
Transfers out (16,646,397) (12,579,599) (12,529,754) (10,168,616) (11,303,463) (10,398,364) (16,321,156) (18,802,923) (18,715,306)
Total other financing sources (uses) 9,681,999$ 730,448$ 5,030,746$ 11,929,720$ 3,729,864$ (264,405)$ (1,323,215)$ (3,119,519)$ 2,885,815$
Net change in fund balance (5,531,942)$ (9,419,094)$ (2,630,317)$ 798,096$ 2,780,201$ (2,176,881)$ (2,508,755)$ (3,947,282)$ 4,229,239$
Debt service as a percentage of
noncapital expenditures 3.9% 4.6% 4.6% 4.0% 3.5% 3.9% 7.3% 7.2% 8.8%
-150-
Schedule 5
City of Lansing
Assessed Value and Estimated Actual Value of Taxable Property
Last Nine 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%
2008 1,437,051,392 765,233,437 192,915,386 223,995,750 2,619,195,965 15.83 5,238,391,930 50.0%
2009 1,479,089,611 719,463,319 254,539,254 205,034,000 2,658,126,184 15.83 5,316,252,368 50.0%
2010 1,480,467,389 713,807,797 248,288,931 220,228,175 2,662,792,292 15.70 5,325,584,584 50.0%
(1) tax rates are per $1,000 of assessed value
-151-
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
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
2008 2007 14.95 .88 15.83 9.41 20.18 6.00 3.81 8.15 63.38
2009 2008 15.01 .82 15.83 10.83 20.15 6.00 3.81 9.04 65.66
2010 2009 15.44 .26 15.70 8.84 19.95 6.00 3.81 9.93 64.23
(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)
-152-
Schedule 7
City of Lansing
Principal Property Tax Payers
Last Ten Fiscal Years
2010 2009 2008 2007 2006
Percentage Percentage Percentage Percentage Percentage
Taxable of Total Taxable of Total Taxable of Total Taxable of Total Taxable of Total
Assessed Assessed Assessed Assessed Assessed Assessed Assessed Assessed Assessed Assessed
Taxpayer Valuation Rank Valuation Valuation Rank Valuation Valuation Rank Valuation Valuation Rank Valuation Valuation Rank Valuation
General Motors Corp. $97,245,402 1 4.15% $130,243,563 1 4.90% $134,702,101 1 5.14% $133,897,648 1 5.11% $161,917,774 1 6.85%
Jackson National Life Insurance Company 33,598,974 2 1.43% 38,430,144 2 1.45% 36,738,583 2 1.40% 33,130,261 2 1.26% 32,393,347 2 1.37%
Consumers Energy 22,660,900 3 0.97% 22,249,503 3 0.84%22,168,948 4 0.85% 21,628,281 4 0.83% 21,227,570 3 0.90%
Delta Township Utilities 20,259,900 4 0.86% 19,875,800 4 0.75% 22,415,570 3 0.86% 25,381,733 3 0.97% 12,999,700 5 0.55%
General Motors LLC 20,222,572 5 0.86%
Demmer Corporation 17,254,600 6 0.74% 13,829,400 7 0.52%
Lansing Retail Center LLC 12,000,900 7 0.51% 14,032,728 6 0.53% 13,441,453 7 0.51% 13,139,375 8 0.50% 12,670,707 7 0.54%
Trappers Cove LTD Partners 11,129,000 8 0.47% 12,952,449 8 0.49% 12,854,463 8 0.49% 12,565,459 9 0.48% 12,117,127 8 0.51%
River Street Triangle LLC 10,950,800 9 0.47%
Blue Cross Blue Shield of Michigan 9,787,000 10 0.42%
Accident Fund Company 14,178,118 5 0.53% 14,467,925 6 0.55% 13,202,404 7 0.50% 11,921,155 9 0.50%
Heart of the City Assoc 10,341,600 9 0.39% 10,527,474 10 0.40% 10,290,786 10 0.39% 9,923,613 10 0.42%
Sprint Spectrum L.P. 8,974,000 10 0.34% 10,693,700 9 0.41% 14,526,841 6 0.55% 12,932,365 6 0.55%
Michigan Strategic Fund (1)19,115,577 5 0.73% 18,764,936 5 0.72% 18,095,407 4 0.77%
525 Redevco Inc -
Cricket Communications
Victor IV Partnership
State of Michigan
Data furnished from City of Lansing Assessor
(1) formerly Capital Outlook LLC
continued
-153-
Schedule 7
City of Lansing
Principal Property Tax Payers
Last Ten Fiscal Years
2005 2004 2003 2002 2001
Percentage Percentage Percentage Percentage Percentage
Taxable of Total Total of Total Total of Total Total of Total Total of Total
Assessed Assessed Assessed Assessed Assessed Assessed Assessed Assessed Assessed Assessed
Taxpayer Valuation Rank Valuation Valuation Rank Valuation Valuation Rank Valuation Valuation Rank Valuation Valuation Rank Valuation
General Motors Corp. 205,316,035$ 1 8.69% 223,100,800$ 1 9.75% 228,595,000$ 1 10.34% 216,957,400$ 1 10.35% 210,124,000$ 1 10.91%
Jackson National Life Insurance Company 31,901,307 2 1.35% 31,786,400 2 1.39% 27,653,500 2 1.25% 33,398,500 2 1.59% 41,238,000 2 2.14%
Consumers Energy 21,840,336 5 0.92% 22,043,400 5 0.96%21,326,600 5 0.96% 28,554,300 3 1.36% 20,779,800 3 1.08%
Delta Township Utilities
General Motors LLC
Demmer Corporation
Lansing Retail Center LLC 12,266,173 6 0.52% 15,544,200 6 0.68% 14,750,900 6 0.67% 14,584,800 6 0.70% 13,311,200 6 0.69%
Trappers Cove LTD Partners 11,730,037 9 0.50% 13,198,200 10 0.58% 12,881,700 8 0.58% 12,364,300 8 0.59% 12,364,300 7 0.64%
River Street Triangle LLC
Blue Cross Blue Shield of Michigan
Accident Fund Company 11,061,457 7 0.47% 13,724,200 7 0.60%13,108,100 7 0.59% 12,815,200 7 0.61% 11,181,300 8 0.58%
Heart of the City Assoc 9,606,596 10 0.41% 11,438,900 10 0.52% 11,593,000 9 0.55% 10,461,800 9 0.54%
Sprint Spectrum L.P. 14,089,100 8 0.60% 13,454,600 8 0.59% 11,877,000 9 0.54%
Michigan Strategic Fund (1)17,517,336 4 0.74% 23,029,300 4 1.01% 23,811,500 4 1.08% 20,900,100 5 1.00% 18,805,600 4 0.98%
525 Redevco Inc 26,573,652 3 1.12% 25,976,200 3 1.14% 26,854,700 3 1.21% 24,586,400 4 1.17% 10,000,000 10 0.52%
Cricket Communications 13,391,600 9 0.59%
Victor IV Partnership 9,408,300 10 0.45%
State of Michigan 16488900 5 0.86%
Data furnished from City of Lansing Assessor
(1) formerly Capital Outlook LLC
concluded
-154-
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
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%
2008 44,286,657 44,125,517 99.64% 62,274 44,187,791 99.78%
2009 45,567,556 45,468,639 99.78% 70,347 45,538,986 99.94%
2010 44,997,919 44,844,495 99.66% 203,755 45,048,250 100.11%
Note: Amounts are net of chargebacks from the County Tax Revolving Funds for taxes still delinquent after three years.
-155-
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
2001 17,310,000$ 115,000$ 12,135,000$ 650,000$ 55,069,000$ 97,845,000$ -$ -$ 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 - - 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 - - 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 - 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 - 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 - 4,180,000 246,939,974 11.59% 2,073 119,100
2007 19,845,000 10,000 15,721,844 1,772,049 165,173,386 43,955,000 - 4,180,000 250,657,280 11.77% 2,105 119,100
2008 20,624,100 - 14,037,885 1,534,822 182,419,608 41,125,000 - 4,180,000 263,921,415 12.40% 2,216 119,100
2009 17,640,000 - 12,394,082 1,290,479 194,429,701 38,285,000 - 4,180,000 268,219,262 12.60% 2,252 119,100
2010 26,152,000 - 10,925,689 1,038,804 202,818,098 35,445,000 - 4,180,000 280,559,591 13.18% 2,356 119,100
(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
-156-
Schedule 10
City of Lansing
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
Debt
Payable
From Ratio of
Fiscal Debt Enterprise Net Bonded Net
Year Service Revenues Debt to Bonded
Ended Taxable Gross Bonded Monies & Special Net Bonded Taxable Debt per
30-Jun Population(1)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 2,500,894,289 185,028,386 309,363 165,183,386 19,535,637 0.0078 164
2008 119,128 2,619,195,965 203,043,708 256,144 182,419,608 20,367,956 0.0078 171
2009 119,128 2,658,126,184 212,069,701 186,636 194,429,701 17,453,364 0.0066 147
2010 119,128 2,662,792,292 207,464,914 126,434 191,509,914 15,828,566 0.0059 133
(1) Source:2000 Census by the U.S. Census Bureau
(2) includes all general obligation debt and special assessment debt with governmental obligation
(3) the tax assessment day is December 31 prior to beginning of fiscal year
-157-
Schedule 11
City of Lansing
Direct and Overlapping Governmental Activities Debt
As of June 30, 2010
Net General
Obligation Bonded Amount
Name of Debt % Applicable Applicable
Governmental Unit Outstanding to City to City
Net Direct - City 89,384,956.80$ (1)100.00% 89,384,957$
Share of County-Issued Bonds
Joint Building Authority 4,313,387$ 100.00% 4,313,387$
Drain Commission 215,460 100.00% 215,460
Overlapping Debt
Eaton Intermediate School District 1,410,000 1.37% 19,317$
Waverly School District 35,585,000 0.26% 92,521
Lansing School District 59,295,000 82.32% 48,811,644
East Lansing School District 66,793,651 3.67% 2,451,327
Holt School District 94,802,464 2.79% 2,644,989
Ingham County 34,094,064 29.75% 10,142,984 ,,
Eaton County 36,314,300 2.45% 889,700
Lansing Community College 59,355,000 21.50% 12,761,325
Okemos School District 27,762,000 3.19% 885,608
Mason School District 22,950,000 0.10% 22,950
Grand Ledge School District 73,955,000 2.82% 2,085,531
Total Overlapping Debt 80,807,896
Total Direct and Overlapping Debt 174,721,700$
(1) Excludes Michigan Transportation Fund Bonds, Unlimited Tax Bonds, Pollution Abatement Bonds, and Revenue Bonds
-158-
Schedule 12 Legal Debt Margin Calculation for Fiscal Year 2010
City of Lansing
Legal Debt Margin Information Assessed value, real and personal property $2,821,052,583
Last Ten Fiscal Years Assessed value equivalents 159,474,251
Total valuation 2,980,526,834
Legal debt margin
Debt limitation - 10 percent of total valuation 298,052,683
Debt applicable to limit
Total City Bonded Debt 264,415,098
Add City Share:
Drain Commission-County Issued 215,460
Joint Building Authority-County Issued 4,313,387
Brownfield Redevelopment Authority 1,270,000
TIF Supported Bonds 11,563,266
281,777,211
Less:
Special Assessment Bonds -
Michigan Transportation (MTF) Bonds (7,135,000)
Sewage Disposal Revenue Bonds (35,445,000)
Pollution Abatement (CSO Project) Bonds (140,828,407) (183,408,407)
Total net debt applicable to limit 98,368,804
Legal debt margin $199,683,880
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Debt limit 237,216,205$ 256,314,667$ 273,340,110$ 289,486,027$ 302,811,105$ 314,307,611$ 324,987,531$ 318,810,868$ 298,581,799$ 298,052,683$
Total net debt applicable to limit 81,504,924 73,872,709 70,893,614 87,171,139 75,882,359 103,095,986 84,276,312 87,966,365 79,513,756 98,368,804
Legal debt margin 155,711,281$ 182,441,958$ 202,446,496$ 202,314,888$ 226,928,746$ 211,211,625$ 240,711,219$ 230,844,503$ 219,068,043$ 199,683,880$
Total net debt applicable to the limit
as a percentage of debt limit 34.36% 28.82% 25.94% 30.11% 25.06% 32.80% 25.93% 27.59% 26.63% 33.00%
Fiscal Year
-159-
Schedule 13
City of Lansing
Pledged-Revenue Coverage
Last Ten Fiscal Years
Sewage Disposal Bonds
Direct Net Revenue
Gross Operating Available for Debt Service Requirements
Revenue Expenses(1)Debt Service Principal Interest Total Coverage(2)
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 29,292,698 13,494,658 15,798,040 3,950,000 2,152,990 6,102,990 2.59
2008 29,356,299 15,997,449 13,358,850 2,830,000 2,002,400 4,832,400 2.76
2009 27,759,684 14,206,961 13,552,723 2,840,000 1,900,000 4,740,000 2.86
2010 28,613,004 12,358,472 16,254,532 2,840,000 1,803,425 4,643,425 3.50
(1) Operating expenses less depreciation
(2) Coverage is defined as net revenue available for debt service divided by
debt service requirements
-160-
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(2)Age(3)Enrollment(4)% Rate(5)Force(5)
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
2008 119,100 2,129,040,730 17,876 32.68 14,475 10.2 65,833
2009 119,100 2,128,331,049 17,870 32.84 14,482 16.2 66,822
2010 119,100 2,127,621,606 17,864 32.92 14,098 15.0 66,602
(1) Source: U.S. Census Bureau
(2) Source: personal income for 2000 and 2005 from the U.S.Census Bureau; other years were extrapolated
from 2000 and 2005
(3) Source: 2000 data from U.S. Census Bureau. Data for other years estimated by City of Lansing Finance Department
(4) Source: Lansing School District
(5) Source: Michigan Department of Career Development: Employment Service Agency - Labor Market Information
-161-
Schedule 15
City of Lansing
Principal Employers,
June 30,
2010 2009 2008 2007 2006
Percentage Percentage Percentage Percentage Percentage
of Total City of Total City of Total City of Total City of Total City
Employer Employees (1)Rank Employment (2)Employees (1)Rank Employment Employees (1)Rank Employment Employees (1)Rank Employment Employees (1)Rank Employment
State of Michigan 14,355 1 6.55% 14,355 1 6.72% 14,355 1 6.52% 14,355 1 6.24% 14,355 1 6.09%
Michigan State University 11,218 2 5.12% 10,500 2 4.91% 10,500 2 4.77% 10,500 2 4.56% 10,500 2 4.45%
Sparrow Health System 7,400 3 3.38% 5,500 3 2.57% 6,000 4 2.72% 6,000 4 2.61% 6,000 4 2.54%
General Motors 3,688 4 1.68% 5,000 4 2.34% 6,300 3 2.86% 6,300 3 2.74% 6,300 3 2.67%
Lansing Community College 3,180 5 1.45% 3,180 5 1.49% 3,180 5 1.44% 3,180 5 1.38% 3,180 5 1.35%
Ingham Regional Medical Center 2,500 6 1.14% 2,500 6 1.17% 2,500 6 1.13% 2,500 6 1.09% 2,500 6 1.06%
Lansing School District 2,106 7 0.96% 2,106 7 0.99% 2,106 7 0.96% 2,106 7 0.92% 2,106 7 0.89%
Meijer 2,000 8 0.91% 1,800 8 0.84% 2,000 8 0.91% 2,000 8 0.87% 2,000 8 0.85%
Auto Owners Insurance 1,500 9 0.68% 1,400 10 0.66% 1,500 9 0.68% 1,500 9 0.65% 1,500 9 0.64%
Peckham, Inc. 1,400 10 0.64% 1,540 9 0.72% 1,400 10 0.64% 1,400 10 0.61% 1,400 10 0.59%
Greater Lansing Metropolitan Area Employment 219,147 213,650 220,300 230,075 235,844
(1) Data is representative of the Greater Lansing Region(2) Source: Michigan Department of Career Development: Employment Service Agency - Labor Market Information
Data available back five years only
-162-
Schedule 16
City of Lansing
Full-time Equivalent City Governmental Employees by Function/Program
June 30,
Function/Program 2010 2009 2008 2007 2006
General Government
City Council 11 11 11 11 11
Mayor's Office 5 5 5 5 7
City Clerk 7 7 7 7 7
54-A District Court 53 53 53 55 55
City Attorney's Office 12 12 12 12 11
City TV 2 2 2 2 2
Internal Auditor 1 1 1 1 2
Human Resources 12 13 14 14
(1)12
Finance
Accounting/Budget/Purchasing 16 17 16 18
(1)21
Tax Services 24 25 26 29 30
Information Technology 15 17 18 18 18
Property Management 21 23 24 26
(3)28
Fleet Management 30 31 33 37
(2)20
106 113 117 128 117
Planning & Neighborhood Development
Administration 2 2 2 2 2
Code Compliance 16 16 17 19 15
Building Safety 15 15 15 16 17
Planning 5 4 5 7 7
Development 9 10 10 10 11
Parking & Transportation 40 41 41 43 49
87 88 90 97 101
Police 344 342 341 338 339
Fire 218 219 219 219 220
Public Services
Administration & Engineering 17 18 18 18 19
Operations & Maintenance 110 113 113 119 122
Service Garage - - -
(2)17
Wastewater 44 50 50 51 61
171 181 181 188 219
Human Relations & Community Services 5 6 8 9 9
Parks & Recreation
Administration & Design 7 7 8 8 9
Grounds & Forestry 27 31 32 32
(2)32
Leisure & Special Recreation 15 19 17 19
(3)20
Cemeteries 3 4 4 5 5
Golf/Ice Arena 4 4 4 4 6
Zoo (4)-- - 1819
56 65 65 86 91
1,090 1,118 1,126 1,172 1,203
In FY 2007, the following restructuring of departments occurred:
(1) A payroll position was transferred from Finance to Human Resources
(2) Operations of the City's three fleet garages was consolidated in Finance
(3) Four custodial positions were transferred from Parks & Recreation to Finance
(4) On July 1, 2007, Potter Park Zoo employees were transferred to Ingham County
Data available back four years only
-163-
Schedule 17
City of Lansing
Operating Indicators by Function/Program
Fiscal Year ended June 30,
Function/Program 2010 2009 2008 2007 2006
Public Safety
Fire Department responses 16,659 15,852 15,780 15,267 14,869
EMS related 14,398 13,447 13,151 12,779 12,152
Fire related 2,261 2,405 2,629 2,488 2,117
Police Department responses 87,724 89,958 87,634 97,466 87,551
Arrests 11,644 11,559 12,810 13,260 7,479
Traffic violations 18,297 20,122 25,398 29,047 30,948
Public Works
Potholes filled 24,945 43,601 40,790 28,122 36,522
Streets resurfaced (miles) 20.70 16.20 20.92 22.11 27.16
Recreation
Recreation participation 70,529 39,060 37,783
(1)41,069 38,878
Pavillion rentals 288 315 341 254 255
Sewage Disposal
Average amount processed daily (gal) 15.01 million 18.15 million 16.73 million 16.00 million 15.00 million
Parking System
Average number of monthly permits 3,480 3,783 4,059 3,905 4,073
Parking tickets issued 63,610 66,183 57,153 75,637 82,221
Cemetery
Lots sold 142 119 98 114 104
Golf
Annual rounds played 30,936 41,588 43,605
(2)59,244 57,256
Garbage and Rubbish
Yards sent to landfill 21,805 29,322 29,869 30,402 30,517
Recycling
Recycled goods sold (tons) 2,163 2,591 2,818 2,269 2,441
Yards composted 21,819 21,871 21,928 17,189 21,304
Data available back five years only
(1) The addition of the Southside Community Center, with a pool, resulted in a large increase in recreation participation in FY 2010
(2) Two golf course were closed in FY 2008 with one of those being converted to a driving range
-164-
Schedule 18
City of Lansing
Capital Asset Statistics by Function/Program
June 30,
Function/Program 2010 2009 2008 2007 2006
Public Safety
Police Stations 3 3 3 3 3
Police Patrol Units 61 61 58 55 55
Fire Stations 9 9 9 9 9
Public Works
Streets (miles) 410.63 410.15 410.15 410.15 409.89
Traffic signals 203 196 203 188 194
Recreation
Park acreage 2,422.63 2,422.63 2,422.63 2,219.63 2,219.63
Playgrounds 71 82 82 80 76
Baseball/softball fields 61 61 61 61 61
Soccer/football fields 6 6 6 6 6
Community centers 4 4 4 4 4
Sewage Disposal
Sanitary sewers (miles) 357.2 353.5 347.4 341.0 338.0
Storm sewers (miles) 232.6 229.9 225.1 220.0 217.0
Combined sewers (miles) 190.5 191.8 197.4 203.0 208.0
Parking System
Ramps 4 4 6 6 5
Lots 16 16 15 15 15
Meters 2,493 2,493 2,489 2489 2,489
Cemetery
Number of cemeteries 3 3 3 3 3
Golf
Number of courses 1 1 1 b 3 3
Acreage 115 115 115 b 318 318
Garbage and Rubbish
Refuse collection trucks 18 16 21 21 20
Recycling
Recycling trucks 10 10 10 10 10
Potter Park Zoo
Number of animals N/A N/A N/A a 398 403
Data available back five years only
a. Zoo operations were trasferred to Ingham County in FY2008
b. Two municipal golf courses were non-operational beginning in 2008
-165-
CITY OF LANSING
-166-
-1-
CITY OF LANSING,
MICHIGAN
SINGLE AUDIT ACT COMPLIANCE
For the Year Ended June 30, 2010
CITY OF LANSING, MICHIGAN
Single Audit Act Compliance
Table of Contents
For the Year Ended June 30, 2010
PAGE
Independent Auditors’ Report on the Schedule of
Expenditures of Federal Awards ..................................................................................... 1
Schedule of Expenditures of Federal Awards ................................................................... 2-5
Notes to Schedule of Expenditures of Federal Awards .................................................... 6
Independent Auditors’ Report on Internal Control over Financial
Reporting and on Compliance and Other Matters Based
on an Audit of Financial Statements Performed in Accordance
with Government Auditing Standards ............................................................................ 7-8
Independent Auditors’ Report on Compliance With
Requirements That Could Have a Direct and Material
Effect on Each Major Program and on Internal
Control Over Compliance in Accordance With
OMB Circular A-133 ...................................................................................................... 9-11
Schedule of Findings and Questioned Costs ..................................................................... 12-25
* * * * *
Rehmann Robson
675 Robinson Rd.
Jackson, MI 49203
Ph: 517.787.6503
Fx: 517.788.8111
www.rehmann.com
-1-
INDEPENDENT AUDITORS’ REPORT ON THE
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
December 27, 2010
Honorable Mayor and Members
of the City Council
City of Lansing, Michigan
We have audited the 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, 2010, and
have issued our report thereon dated December 27, 2010. Our audit was performed for the purpose
of forming opinions on the financial statements that collectively comprise the City’s basic financial
statements. The accompanying schedule of expenditures of federal awards is presented for purposes
of additional analysis as required by OMB Circular A-133, Audits of States, Local Governments, and
Nonprofit Organizations and is not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic
financial statements taken as a whole.
City of Lansing
Schedule of Expenditures of Federal Awards
For the June 30, 2010 Audit
Federal/
Pass-through
Federal/Pass-through Grantor CFDA Grantor Federal
Program Title Number Number Expenditures
U.S. Department of Housing and Urban Development
Direct programs:
Community Development Block Grant:
2007 Entitlement 14.218 B-07-MC-26-0025 245,369$
2008 Entitlement 14.218 B-08-MC-26-0025 237,857
2009 Entitlement 14.218 B-09-MC-26-0025 1,315,074
Neighborhood Stabilization Program 14.218 B-08-MN-26-0007 1,148,382
ARRA - CDBG-R 14.253 B-09-MY-26-0025 135,500
Total Community Development Block Grant 3,082,182
Emergency Shelter:
2008 Grant 14.231 S-08-MC-26-0025 14,904
2009 Grant 14.231 S-09-MC-26-0025 96,357
Total Emergency Shelter Grant 111,261
Supportive Housing Program:
Advent House Ministries 14.235 MI0190B5F080801 168,783
Gateway Community Services 14.235 MI0188B5FD80801 58,888
Haven House 14.235 MI28B70-8004 35,562
Haven House 14.235 MI0199B5FD80802 6,544
Capital Area Community Services, Inc. (C.A.C.S.)14.235 MI0191B5F080801 90,288
Capital Area Community Services, Inc. (C.A.C.S.)14.235 MI0189B5F080801 276,095
Greater Lansing Housing Coalition 14.235 MI28B70-8005 86,511
Greater Lansing Housing Coalition 14.235 MI0200BF5080802 15,441
National Council Alcoholism 14.235 MI0198B5F080801 146,428
St. Vincent Catholic Charities (Permanent Supportive Housing II)14.235 MI28B70-8002 142,249
St. Vincent Catholic Charities (Permanent Supportive Housing II)14.235 MI0196B5F080801 169,128
St. Vincent Catholic Charities (Permanent Supportive Housing III)14.235 MI28B70-8006 108,775
St. Vincent Catholic Charities (Permanent Supportive Housing III)14.235 MI0197B5F080801 132,208
St. Vincent Catholic Charities (Supportive Services Only)14.235 MI0192B5F080801 61,347
Homelessness Management Information Systems (H.M.I.S.)14.235 MI28B70-8007 38,748
Homelessness Management Information Systems (H.M.I.S.)14.235 MI0194B5F080801 31,733
Homelessness Management Information Systems (H.M.I.S.) II 14.235 MI0193B5F080801 30,521
ARRA - C.A.C.S. Homelessness Prevention 14.257 S09-MY-26-0025 51,865
ARRA - C.A.C.S. Rapid Rehousing Program 14.257 S09-MY-26-0025 32,302
ARRA - Legal Services Homelessness Prevention and
Rapid Re-housing Program (HPRP)14.257 S09-MY-26-0025 19,088
Total Supportive Housing Program 1,702,504
continued…
-2-
City of Lansing
Schedule of Expenditures of Federal Awards
For the June 30, 2010 Audit
Federal/
Pass-through
Federal/Pass-through Grantor CFDA Grantor Federal
Program Title Number Number Expenditures
U.S. Department of Housing and Urban Development (Concluded)
Home Investment Partnerships Program:
2003 Grant Year 14.239 M-03-MC-26-0208 15,828$
2004 Grant Year 14.239 M-04-MC-26-0208 8,825
2005 Grant Year 14.239 M-05-MC-26-0208 169,443
2006 Grant Year 14.239 M-06-MC-26-0208 70,993
2007 Grant Year 14.239 M-07-MC-26-0208 245,627
2008 Grant Year 14.239 M-08-MC-26-0208 231,485
2009 Grant Year 14.239 M-09-MC-26-0208 278,670
Total Home Investment Partnerships Program 1,020,871
Lead Hazard Reduction Demonstration Grant Program 14.905 MILHD 0162-06 692,692
Total U.S. Department of Housing and Urban Development 6,609,510
U.S. Department of Justice
Direct programs:
Local Law Enforcement Block Grant:
2005 Grant Year 16.592 2005-DJ-BX-0303 9,620
2006 Grant Year 16.592 2006-DJ-BX-0655 5,641
2007 Grant Year 16.592 2007-DJ-BX-0851 68,394
2008 Grant Year 16.592 2008-F6133-MI-DJ 47,603
2009 Grant Year 16.592 2009-DJ-BX-1223 58,823
Total Local Law Enforcement Block Grant 190,081
Alcohol, Tobacco, and Firearms Training Assistance Grant 16.012 10-DET-064-AFF 12,910
Bulletproof Vest 16.607 2009-BO-BX-09049239 12,110
ARRA - COPS Hiring Recovery Program (CHRP)16.710 2009-RK-WX-0440 270,592
Gang Resistance Education and Training 16.737 2008-JV-FX-0044 76,470
Protecting Safe Neighborhoods 16.744 2007-PG-BX-0009 35,995
Justice Assistance Grant - Smart Policing 16.751 2009-DG-BX-0215 7,077
ARRA - Metro 16.803 2009-SU-B9-4017 33,438
ARRA - Byrne Justice Assistance - Increased Technology for
Ingham County System of Justice 16.804 2009-SB-B9-1742 254,015
continued…
-3-
City of Lansing
Schedule of Expenditures of Federal Awards
For the June 30, 2010 Audit
Federal/
Pass-through
Federal/Pass-through Grantor CFDA Grantor Federal
Program Title Number Number Expenditures
U.S. Department of Justice (Concluded)
Passed through the State of Michigan Department of Community Health:
Capital Area Response Effort - Year Thirteen 16.575 20457-12V07 44,890$
Capital Area Response Effort - Year Fourteen 16.575 20457-13V09 79,893
Metro Conspiracy Investigations 16.579 70901-9-09-B 223,904
Community-defined Solutions to Violence Against Women 16.590 -n/a-27,658
Passed through the State of Michigan Court Administrative Office:
ARRA - 2009 Domestic Violence 16.803 -n/a-4,471
Total U.S. Department of Justice 1,273,504
U.S. Department of Transportation
Passed through the State of Michigan Department of Transportation:
IPACE (MDOT 77195)20.205 -n/a-4,276
Southwest Signal (MDOT 06-5570)20.205 CMG 0633(026)11,750
Penn. / Mich. Signal (MDOT 06-5571)20.205 CMG 0633(034)10,085
Downtown Signal (MDOT 06-5572)20.205 CMG 0633(033)3,665
Washington Avenue Streetscape (MDOT 07-5213)20.205 STP 0733(028)186,655
Passed through the State of Michigan Office of Highway Safety Planning:
Sobriety Court 20.601 SCAO-2010-059 18,090
Sobriety Court 20.601 SCAO-2009-078 6,227
Total U.S. Department of Transportation 240,748
Environmental Protection Agency
Direct programs:
Brownfield Clean-up Revolving Loan Fund 66.818 BL97566201 262,364
Passed through the State of Michigan Department of Environmental Quality:
ARRA - State Revolving Fund 66.458 5005-22 10,410,000
ARRA - Safe Drinking Water State Revolving Fund 66.468 5411-01 1,477,299
Total Environmental Protection Agency 12,149,663
continued…
-4-
City of Lansing
Schedule of Expenditures of Federal Awards
For the June 30, 2010 Audit
Federal/
Pass-through
Federal/Pass-through Grantor CFDA Grantor Federal
Program Title Number Number Expenditures
U.S. Department of Energy
Direct programs:
ARRA - Energy Efficiency Block Grant 81.128 DE-SC0002806 75,000$
U.S. Department of Homeland Security
Direct programs:
Firefighter Assistance Grant 97.044 -n/a-52,724
Pre-disaster Mitigation 97.047 -n/a-318,598
Passed through the State of Michigan Department of State Police:
FEMA - Hurricane Katrina 97.036 3225 EM 2,398
Emergency Management Performance Grant 97.042 -n/a-45,934
Interoperable Emergency Communications 97.055 -n/a-24,628
Buffer Zone Protection Program 2006 97.078 -n/a-383,162
2006 State Homeland Security Program 97.067 -n/a-79,522
2006 Law Enforcement Terrorism Prevention Program 97.067 -n/a-30,323
2007 State Homeland Security Program 97.067 2007-GE-T7-0029 1,380,691
2007 Law Enforcement Terrorism Prevention Program 97.067 2007-GE-T7-0029 989,940
2008 State Homeland Security Program 97.067 2008-GE-T8-0052 322,771
Total U.S. Department of Homeland Security 3,630,691
Total Expenditures of Federal Awards 23,979,116$
See notes to schedule of expenditures of federal awards.
-5-
-6-
CITY OF LANSING, MICHIGAN
Notes to Schedule of Expenditures of Federal Awards
1. GENERAL
The accompanying Schedule of Expenditures of Federal Awards presents the activity of all
federal awards programs of the City of Lansing, Michigan (the “City”). Federal awards
received directly from federal agencies, as well as federal awards passed through other
government agencies, are included on this schedule.
The information in this schedule is presented in accordance with the requirements of OMB
Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations.
Therefore, some amounts presented in this schedule may differ from amounts presented in,
or used in the preparation of, the basic financial statements.
The City of Lansing reporting entity is defined in Note I of the City’s basic financial
statements.
2. SUBRECIPIENTS
The City administers certain federal awards programs through subrecipients. Those
subrecipients are not considered part of the City of Lansing reporting entity. Of the federal
expenditures presented in the schedule, the City of Lansing provided federal awards to
subrecipients as follows:
CFDA Amount Provided
Program Title Number to Subrecipients
Community Development Block Grant 14.218 $ 336,205
Neighborhood Stabilization Program 14.218 1,109,041
Emergency Shelter 14.231 111,261
Supportive Housing Program 14.235 1,601,502
Home Investment Partnerships Program 14.239 44,999
Metro Conspiracy Investigations 16.579 169,421
Interoperable Emergency Communications 97.055 24,628
2006 State Homeland Security Program 97.067 79,522
2006 Law Enforcement Terrorism Prevention 97.067 30,323
2007 State Homeland Security Program 97.067 1,221,471
2007 Law Enforcement Terrorism Prevention 97.067 882,285
2008 State Homeland Security Program 97.067 321,775
Total $ 5,932,433
* * * * *
Rehmann Robson
675 Robinson Rd.
Jackson, MI 49203
Ph: 517.787.6503
Fx: 517.788.8111
www.rehmann.com
-7-
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE
AND OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
December 27, 2010
Honorable Mayor and Members
of the City Council
City of Lansing, Michigan
We have audited the 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, 2010,
which collectively comprise the City’s basic financial statements as listed in the table of contents,
and have issued our report thereon dated December 27, 2010. 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.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City of Lansing, Michigan’s internal
control over financial reporting as a basis for designing our auditing procedures for the purpose of
expressing our opinions on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of the City of Lansing, Michigan’s internal control over financial
reporting. Accordingly, we do not express an opinion on the effectiveness of the City of Lansing,
Michigan’s internal control over financial reporting.
Our consideration of internal control over financial reporting was for the limited purpose described
in the preceding paragraph and was not designed to identify all deficiencies in internal control over
financial reporting that might be significant deficiencies or material weaknesses and therefore, there
can be no assurance that all deficiencies, significant deficiencies, or material weaknesses have been
identified. However, as described in the accompanying schedule of findings and questioned costs,
we identified a certain deficiency in internal control over financial reporting that we consider to be a
material weakness, and another deficiency that we consider to be a significant deficiency.
-8-
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the entity's financial statements will not be prevented, or detected and
corrected on a timely basis. We consider the deficiency described in the accompanying schedule of
findings and questioned costs as item 2010-1 to be a material weakness.
A significant deficiency is a deficiency or a combination of deficiencies in internal control that is
less severe than a material weakness, yet important enough to merit attention by those charged with
governance. We consider the deficiency described in the accompanying schedule of findings and
questioned costs as item 2010-2 to be a significant deficiency.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Lansing, Michigan’s financial
statements are free of material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could
have a direct and material effect on the determination of financial statement amounts. However,
providing an opinion on compliance with those provisions was not an objective of our audit, and
accordingly, we do not express such an opinion. The results of our tests disclosed no instances of
noncompliance or other matters that are required to be reported under Government Auditing
Standards.
We noted certain matters that we reported to management of the City of Lansing, Michigan, in a
separate letter dated December 27, 2010.
The City of Lansing, Michigan’s responses to the findings identified in our audit are described in
the accompanying schedule of findings and questioned costs. We did not audit the City of Lansing,
Michigan’s responses and, accordingly, we express no opinion on them.
This report is intended solely for the information and use of the audit committee, the governing
board, management, others within the organization, and federal awarding agencies and pass-through
entities, and is not intended to be and should not be used by anyone other than these specified
parties.
Rehmann Robson
675 Robinson Rd.
Jackson, MI 49203
Ph: 517.787.6503
Fx: 517.788.8111
www.rehmann.com
-9-
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE WITH
REQUIREMENTS THAT COULD HAVE A DIRECT AND
MATERIAL EFFECT ON EACH MAJOR PROGRAM
AND ON INTERNAL CONTROL OVER COMPLIANCE
IN ACCORDANCE WITH OMB CIRCULAR A-133
March 31, 2011
Honorable Mayor and Members
of the City Council
City of Lansing, Michigan
Compliance
We have audited the City of Lansing, Michigan’s compliance with the types of compliance
requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct
and material effect on each of the City of Lansing, Michigan’s major federal programs for the year
ended June 30, 2010. The City of Lansing, Michigan’s major federal programs are identified in the
summary of auditors’ results section of the accompanying schedule of findings and questioned costs.
Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its
major federal programs is the responsibility of the City of Lansing, Michigan’s management. Our
responsibility is to express an opinion on the City of Lansing, Michigan’s compliance based on our
audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America; the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133,
Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB
Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about
whether noncompliance with the types of compliance requirements referred to above that could have a
direct and material effect on a major federal program occurred. An audit includes examining, on a test
basis, evidence about the City of Lansing, Michigan’s compliance with those requirements and
performing such other procedures as we considered necessary in the circumstances. We believe that
our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination
of the City of Lansing, Michigan’s compliance with those requirements.
-10-
As described in items 2010-7 and 2010-12, respectively, in the accompanying schedule of findings and
questioned costs, the City of Lansing, Michigan did not comply with requirements regarding
subrecipient monitoring that are applicable to its Supportive Housing Program and with requirements
regarding allowable costs/cost principles that are applicable to its Community Development Block
Grant and Home Investment Partnership programs. Compliance with such requirements is necessary, in
our opinion, for the City of Lansing, Michigan to comply with the requirements applicable to those
programs.
In our opinion, except for the noncompliance described in the preceding paragraph, the City of
Lansing, Michigan complied, in all material respects, with the compliance requirements referred to
above that could have a direct and material effect on each of its major federal program for the year
ended June 30, 2010. The results of our auditing procedures also disclosed other instances of
noncompliance with those requirements, which are required to be reported in accordance with OMB
Circular A-133 and which are described in the accompanying schedule of findings and questioned
costs as items 2010-3, 2010-4, 2010-5, 2010-6, 2010-8, 2010-9, 2010-10, and 2010-11.
Internal Control Over Compliance
Management of the City of Lansing, Michigan is responsible for establishing and maintaining effective
internal control over compliance with the requirements of laws, regulations, contracts, and grants
applicable to federal programs. In planning and performing our audit, we considered the City of
Lansing, Michigan’s internal control over compliance with the requirements that could have a direct
and material effect on a major federal program in order to determine our auditing procedures for the
purpose of expressing our opinion on compliance, but not for the purpose of expressing an opinion on
the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the
effectiveness of the City of Lansing, Michigan’s internal control over compliance.
Our consideration of internal control over compliance was for the limited purpose described in the
preceding paragraph and was not designed to identify all deficiencies in internal control over
compliance that might be significant deficiencies or material weaknesses and therefore, there can be no
assurance that all deficiencies, significant deficiencies, or material weaknesses have been identified.
However, as discussed below, we identified certain deficiencies in internal control over compliance
that we consider to be material weaknesses and other deficiencies that we consider to be significant
deficiencies.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their
assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance
requirement of a federal program on a timely basis. A material weakness in internal control over
compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such
that there is reasonable possibility that material noncompliance with a type of compliance requirement
of a federal program will not be prevented, or detected and corrected, on a timely basis. We consider
the deficiencies in internal control over compliance described in the accompanying schedule of
findings and questioned costs as items 2010-7 and 2010-12 to be material weaknesses.
-11-
A significant deficiency in internal control over compliance is a deficiency, or a combination of
deficiencies, in internal control over compliance with a type of compliance requirement of a federal
program that is less severe than a material weakness in internal control over compliance, yet important
enough to merit attention by those charged with governance. We consider the deficiencies in internal
control over compliance described in the accompanying schedule of findings and questioned costs as
items 2010-3, 2010-4, 2010-5, 2010-6, 2010-8, 2010-9, and 2010-10 to be significant deficiencies.
The City of Lansing, Michigan’s responses to the findings identified in our audit are described in the
accompanying schedule of findings and questioned costs. We did not audit the City of Lansing,
Michigan’s responses and, accordingly, we express no opinion on them.
This report is intended solely for the information and use of the audit committee, management, others
within the organization, the City Council, and federal awarding agencies and pass-through entities and
is not intended to be and should not be used by anyone other than these specified parties.
CITY OF LANSING, MICHIGAN
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2010
-12-
SECTION I - SUMMARY OF AUDITORS’ RESULTS
Financial Statements
Type of auditors’ report issued: Unqualified
Internal control over financial reporting:
Material weakness(es) identified? X yes no
Significant deficiency(s) identified? X yes none reported
Noncompliance material to financial statements
noted? yes X no
Federal Awards
Internal Control over major programs:
Material weakness(es) identified? X yes no
Significant deficiency(s) identified? X yes none reported
Type of auditors’ report issued on compliance
for major programs:
Community Development Block Grant Cluster Qualified
Supportive Housing Program Qualified
Home Investment Partnerships Program Qualified
State Revolving Funds Unqualified
Drinking Water Revolving Funds Unqualified
State Homeland Security Program Unqualified
Any audit findings disclosed that are required
to be reported in accordance with
Circular A-133, Section 510(a)? X yes no
CITY OF LANSING, MICHIGAN
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2010
-13-
SECTION I - SUMMARY OF AUDITORS’ RESULTS (CONCLUDED)
Identification of major programs:
CFDA Number(s) Name of Federal Program or Cluster
14.218/14.253 Community Development Block Grant
Cluster
14.235 Supportive Housing Program
14.239 Home Investment Partnerships Program
66.458 State Revolving Funds
66.468 Drinking Water State Revolving Funds
97.067 State Homeland Security Program
93.959 Dollar threshold used to distinguish
between Type A and Type B programs: $719,373
Auditee qualified as low-risk auditee? yes X no
SECTION II – FINANCIAL STATEMENT FINDINGS
Finding 2010-1 – Material Audit Adjustment
Material Weakness in Internal Control over Financial Reporting
Criteria: The City is responsible for the reconciliation of all general ledger accounts to their proper
underlying balances for the purpose of creating a reasonably adjusted trial balance, from which the
basic financial statements are derived.
Condition: Our auditing procedures identified the need for a material audit adjustment relative to
the proper recording of two bond refundings made during the year. These adjustments were
unrelated to the City's administration of federal awards
Cause: Internal controls did not detect all necessary adjustments to properly record year-end
balances.
Effect: As a result of this condition, the City's internal books and records were initially misstated by
an amount that was material to the financial statements.
CITY OF LANSING, MICHIGAN
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2010
-14-
SECTION II – FINANCIAL STATEMENT FINDINGS (CONTINUED)
Finding 2010-1 – Material Audit Adjustment (Concluded)
Recommendation: Management has already reviewed and approved the necessary adjustment, and
its effect is included in the City's financial statements. Accordingly, no further corrective action is
required.
View of Responsible Officials: The entry referenced in this finding was the result of a complicated
bond refunding. Management acknowledges its responsibility for the fair presentation of the City’s
financial statements, and will continue to carefully review all account balances in the future.
2010-2 – Segregation of Incompatible Duties
Significant Deficiency in Internal Control over Financial Reporting
Criteria: Management is responsible for establishing effective internal controls to safeguard the
City’s assets and to prevent or detect misstatements to the financial statements. In establishing
appropriate internal controls, careful consideration must be given to the cost of a particular control
and the related benefits to be received. Accordingly, management must make the difficult decision
of what degree of risk it is willing to accept, given the government’s unique circumstances.
Condition: No single individual should ever be able to authorize a transaction, record the
transaction in the accounting records, and maintain custody of the assets resulting from the
transaction. During the year under audit, we noted the following situations:
The responsibilities for initiating, evaluating, and approving investment transactions are
not separate from detail accounting and general ledger functions;
Journal entries and other manual transactions were not consistently subjected to a
documented, independent review and approval.
Cause: This condition is primarily the result of the consolidation of positions in the accounting
department.
Effect: As a result of this condition, the City is exposed to an increased risk that misstatements or
misappropriation might occur and not be detected by management in a timely manner.
CITY OF LANSING, MICHIGAN
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2010
-15-
SECTION II – FINANCIAL STATEMENT FINDINGS (CONCLUDED)
2010-2 – Segregation of Incompatible Duties (Concluded)
Recommendation: While there are no easy answers to the challenge of balancing the costs and
benefits of internal control and segregation of duties, we would nevertheless encourage management
to actively seek ways to further strengthen its internal control structure by requiring as much
independent review, reconciliation and approval of accounting functions by qualified members of
management as possible.
View of Responsible Officials: The conditions of this finding were the result of transfers of duties
and retirements that occurred in the fiscal year. These problems have since been corrected.
SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
Finding 2010-3 – Incomplete Reports in Accordance with Section 1512 of the American
Recovery and Reinvestment Act of 2009 (ARRA) (Reporting)
Immaterial Noncompliance / Significant Deficiency in Internal Control over Compliance
CFDA #66.458 – State Revolving Funds
Criteria: Direct recipients of federal funding under the American Recovery and Reinvestment Act
of 2009 (ARRA) are required to submit quarterly reports to a federal website called
FederalReporting.gov. Reported information includes (among other things) program narratives, jobs
created/retained data, and individual payments made to vendors of $25,000 or more. Recipients
should establish internal controls to ensure data quality, completeness, accuracy, and timely
reporting.
Condition: The City contracted with a certain vendor under this federal grant for which payments
of over $25,000 were made in each quarter and over $3 million were made over the fiscal year. This
vendor was excluded from the Section 1512 reports.
Cause: This condition was the result of an oversight by program management in including
engineering and construction oversight costs in addition to actual infrastructure costs.
Effect: As a result of this condition, the City submitted reports under Section 1512 of ARRA that
contained omissions and did not fully comply with the grant requirements.
Questioned Costs: No costs are being questioned as a result of this condition, inasmuch as no actual
unallowable expenditures were noted in our testing.
CITY OF LANSING, MICHIGAN
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2010
-16-
SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
(CONTINUED)
Finding 2010-3 – Incomplete Reports in Accordance with Section 1512 of the American
Recovery and Reinvestment Act of 2009 (ARRA) (Reporting) (Concluded)
Recommendation: We recommend that the City review its procedures for compiling financial and
programmatic data for Section 1512 reporting. In addition, such reports should be subject to review
and approval by an independent employee or administrator prior to submission.
View of Responsible Officials: This finding resulted from a misunderstanding of the treatment of
design/engineering service costs. Management contracted the State of Michigan Department of
Environmental Quality (DEQ) immediately upon becoming aware of the situation. The DEQ
consulted with the ARRA reporting coordinator in the Governor’s Office, who suggested a method
for including the omitted data in the next quarterly report. That information will be included in the
next quarterly report and will be reviewed/approved by a separate employee prior to submission.
Finding 2010-4 – Documentation of Payroll Expenditures in Accordance with Federal Cost
Principles (Allowable Costs / Cost Principles)
Immaterial Noncompliance / Significant Deficiency in Internal Control over Compliance
CFDA #97.067 – State Homeland Security Grant
Criteria: Office of Management and Budget Circular No. A-87, Cost Principles for State, Local,
and Indian Tribal Governments, requires charges to federal programs to be supported by personnel
activity reports, or in the case of staff who spend 100% of their time on a single federal cost
principle, semi-annual certifications.
Condition: The only personnel costs charged to this grant were for the program administrator who
spent 100% of his time on a single federal cost objective. This individual completed only one time
certification for the period under audit. In addition, the certification was signed prior to the specified
end date of the certification.
Cause: This condition was caused by an oversight in obtaining necessary documentation throughout
various personnel changes.
Effect: As a result of this condition, the City charged certain personnel costs to this program without
sufficient documentation as required by OMB Circular A-87.
Questioned Costs: The total amount of personnel costs (salaries and employee benefits) charged to
this program without sufficient documentation in accordance with OMB Circular A-87 was $83,641.
CITY OF LANSING, MICHIGAN
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2010
-17-
SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
(CONTINUED)
Finding 2010-4 – Documentation of Payroll Expenditures in Accordance with Federal Cost
Principles (Allowable Costs / Cost Principles) (Concluded)
Recommendation: We recommend that management review the guidance on allowable
documentation for personnel costs and ensure that appropriate communication and training is
provided to department managers and individuals working on federal grant programs.
View of Responsible Officials: Proper certification will be submitted going forward.
Finding 2010-5 – Cash Draws in Advance of Disbursement to Subrecipients (Cash
Management)
Immaterial Noncompliance / Significant Deficiency in Internal Control over Compliance
CFDA #97.067 – State Homeland Security Program
Criteria: OMB Circular A-102, Paragraph 2(a) requires that recipients of federal awards minimize
the time elapsing between the transfer to recipients of grants and cooperative agreements and the
recipients’ need for the funds.
Condition: We noted certain instances in which the City requested and received reimbursement for
expenditures incurred by a subrecipient. The City then held these funds for a considerable time
before making reimbursement to the subrecipient.
Cause: The condition appears to have been caused by a departmental oversight in initiating the
check disbursement process after the funds were requested and received from the grantor agency.
Effect: As a result of this condition, the City was, at times, in possession of cash in excess of its
immediate needs.
Questioned costs: No costs are being questioned as a result of this condition, inasmuch as no actual
unallowable expenditures were noted in our testing and the advance cash draws were eventually
disbursed for program expenditures.
Recommendation: As a general rule, cash requests under reimbursement-based grants should be
made after the disbursement has already been made. If the City determines that this is unfeasible due
to cash flow issues, the potential for disallowed costs by the grantor agency, or other reasons, the
disbursement process should be initiated immediately after the funds are received.
View of Responsible Officials: Future payment requests will be submitted after the disbursement
has been made going forward.
CITY OF LANSING, MICHIGAN
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2010
-18-
SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
(CONTINUED)
Finding 2010-6 – Incomplete Monitoring of Subrecipients (Subrecipient Monitoring)
Immaterial Noncompliance / Significant Deficiency in Internal Control over Compliance
CFDA #97.067 – State Homeland Security Grant
Criteria: Recipients of federal awards that subgrant funds to other entities are responsible for
compliance with requirements related to subrecipient monitoring, as detailed in the OMB Circular
A-133 Compliance Supplement. Such requirements include: (1) identifying to the subrecipient the
CFDA number, federal awarding agency, and award name and number; (2) monitoring the
subrecipient’s use of federal awards to provide reasonable assurance that the program is being
administered in compliance with laws, regulations, and the provisions of contracts or grant
agreements, and that performance goals are achieved; and (3) ensuring that subrecipients expending
$500,000 or more in federal awards have met the audit requirements of OMB Circular A-133 and
issuing a management decision on audit findings (if applicable).
Condition: Subrecipient monitoring for this program was not performed during the year or in the
subsequent months.
Cause: This condition was primarily caused by staffing turnover and consolidation.
Effect: As a result of this condition, the City did not fully comply with certain compliance
requirements of this grant and was subject to the risk that grant funds passed-through and
administered by other entities did not comply with federal cost principles or the provisions of OMB
Circular A-133. This risk is somewhat mitigated by the fact that subrecipients are required to submit
copies of invoices along with their reimbursement requests.
Questioned Costs: No costs are being questioned as a result of this condition, as we did not become
aware of any unallowable costs or noncompliance at the subrecipient level.
Recommendation: We recommend that the City consider developing a centralized subrecipient
monitoring policy to incorporate the various provisions of OMB Circular A-133. The timing and
frequency of on-site procedures can be flexible, but should occur at least annually.
View of Responsible Officials: Subrecipient monitoring will be completed timely going forward.
Procedures are being revised to ensure subrecipient monitoring is performed for all applicable
grants.
CITY OF LANSING, MICHIGAN
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2010
-19-
SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
(CONTINUED)
Finding 2010-7 – Incomplete Monitoring of Subrecipients (Subrecipient Monitoring)
Material Noncompliance / Material Weakness in Internal Control over Compliance
CFDA #14.235 – Supportive Housing Program
Criteria: Recipients of federal awards that subgrant funds to other entities are responsible for
compliance with requirements related to subrecipient monitoring, as detailed in the OMB Circular
A-133 Compliance Supplement. Such requirements include: (1) identifying to the subrecipient the
CFDA number, federal awarding agency, and award name and number; (2) monitoring the
subrecipient’s use of federal awards to provide reasonable assurance that the program is being
administered in compliance with laws, regulations, and the provisions of contracts or grant
agreements, and that performance goals are achieved; and (3) ensuring that subrecipients expending
$500,000 or more in federal awards have met the audit requirements of OMB Circular A-133 and
issuing a management decision on audit findings (if applicable).
Condition: Of the City's eight subrecipients for this program, only one was monitored during the
year. Six were monitored in the following year, and one refused to allow the City to conduct on-site
monitoring. In addition, single audit reports (as applicable) were not obtained from the subrecipients
and therefore were not reconciled to the City’s internal records.
Cause: This condition was primarily caused by an oversight by program management in
understanding the extent of the requirements for subrecipient monitoring in accordance with OMB
Circular A-133.
Effect: As a result of this condition, the City did not fully comply with certain compliance
requirements of this grant and was subject to the risk that grant funds passed-through and
administered by other entities did not comply with federal cost principles or the provisions of OMB
Circular A-133.
Questioned Costs: No costs are being questioned as a result of this condition, as we did not become
aware of any unallowable costs or noncompliance at the subrecipient level.
Recommendation: We recommend that the City consider developing a centralized subrecipient
monitoring policy to incorporate the various provisions of OMB Circular A-133. The timing and
frequency of on-site procedures can be flexible, but should occur at least annually.
View of Responsible Officials: Subrecipient monitoring will be completed timely going forward.
Procedures are being revised to ensure subrecipient monitoring is performed for all applicable
grants.
CITY OF LANSING, MICHIGAN
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2010
-20-
SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
(CONTINUED)
Finding 2010-8 – Variances in Financial Reports (Reporting)
Immaterial Noncompliance / Significant Deficiency in Internal Control over Compliance
CFDA #14.218/14.253 – Community Development Block Grant
CFDA #14.235 – Supportive Housing Program
Criteria: Recipients of federal awards are required to report periodically on financial information,
as specified by the OMB Circular A-133 Compliance Supplement or grant agreement. Reported
information should be supported by the entity’s accounting records.
Condition: The City is required to submit a comprehensive annual performance and evaluation
report (CAPER) under its Community Development Block Grant. We noted that the amount
reported for the ARRA award was equal to the cash draws through year-end, instead of the actual
expenditures. For the Supportive Housing Program, the City submits annual progress reports for
each award. In the nine reports reviewed as part of our audit, six disagreed with the accounting
records for the indicated time period.
Cause: For the CDBG grant, this condition was caused by an error in reporting cash draws instead
of actual expenditures. No errors were noted for the non-ARRA award, which comprised the
majority of the program expenditures. For the Supportive Housing Program, this condition appears
to be caused by errors in accruing year-end payments to subrecipients (and recording a related
receivable from the federal government).
Effect: As a result of this condition, the City did not comply fully with the reporting requirements
under certain federal awards.
Questioned Costs: No costs were questioned as a result of this finding, inasmuch as no unallowable
expenditures were noted and the reports did not serve as a mechanism for reimbursement.
Recommendation: We recommend that the City review its procedures for compiling financial data
for external reporting purposes. In addition, such reports should be subject to review and approval
by an independent employee or administrator prior to submission.
View of Responsible Officials: Procedures are being put into place to ensure that accruals are
reported properly and consistently in both the City’s accounting system and the CAPER.
CITY OF LANSING, MICHIGAN
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2010
-21-
SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
(CONTINUED)
Finding 2010-9 – Internal Controls over Activities with Suspended or Debarred Parties
(Procurement, Suspension and Debarment)
Immaterial Noncompliance / Significant Deficiency in Internal Control over Compliance
CFDA #14.218/14.253 – Community Development Block Grant
Criteria: A recipient of federal awards is required to determine that vendors being paid with federal
funds are not suspended or debarred from doing business with the government. Such procedures are
required whenever the amount disbursed to a single vendor in a given fiscal year is expected to be at
least $25,000.
Condition: The City appears to have adequate internals over determining whether a vendor selected
through the bidding process is suspended or debarred. However, the written agreements between the
City and its subrecipients did not consistently include language regarding suspension and
debarment, nor were any alternate procedures performed.
Cause: This condition was caused by a management oversight in drafting the subrecipient
agreements, which were intended to include language regarding suspension and debarment.
Appropriate language was included in only one of the five subrecipient agreements that we
reviewed.
Effect: As a result of this condition, the City was exposed to an increased risk that disbursements of
federal awards could be made to vendors suspended or debarred by the federal government.
Questioned Costs: No costs are required to be questioned as a result of this finding as none of the
subrecipients involved were actually suspended or debarred.
Recommendation: We recommend that the City execute revised agreements, when necessary, with
its subrecipients to include appropriate language regarding suspension and debarment.
View of Responsible Officials: As indicated in the cause, an oversight resulted in an old
subrecipient agreement being used. This has been corrected going forwarded – the agreements will
all contain appropriate suspension/debarment language going forward.
CITY OF LANSING, MICHIGAN
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2010
-22-
SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
(CONTINUED)
Finding 2010-10 – Completion of Environmental Reviews (Special Tests and Provisions)
Immaterial Noncompliance / Significant Deficiency in Internal Control over Compliance
CFDA #14.218/14.253 – Community Development Block Grant
Criteria: In accordance with the OMB Circular A-133 Compliance Supplement, funds cannot be
obligated or expended before receipt of HUD’s approval of a Request for Release of Funds and
environmental certification, except for certain exempt activities and categorically excluded
activities.
Condition: The City did not submit the required paperwork for this compliance requirement for the
grant year ended June 30, 2010 until October 26, 2010.
Cause: This condition was caused by staffing turnover and the consolidation of assignments in the
program department.
Effect: As a result of this condition, the City failed to submit all required paperwork until after the
end of the grant period.
Questioned Costs: No costs are required to be questioned as a result of this finding as the
environmental clearance was ultimately accepted by the U.S. Department of Housing and Urban
Development.
Recommendation: The City appears to be current with environmental-related paperwork for the
subsequent period and the grantor agency has been informed of the situation. No further corrective
action is deemed necessary at this time.
View of Responsible Officials: This conditions of this finding resulted from a transfer of job
duties. Upon learning of this deficiency, management corrected it through training.
Finding 2010-11 – Identification of CFDA Number to Subrecipients (Subrecipient Monitoring)
Immaterial Noncompliance
CFDA# 14.218/14.253 – Community Development Block Grant
CFDA# 14.239 – Home Investment Partnerships Program
Criteria: Recipients of federal awards that subgrant funds to other entities are responsible for
compliance with requirements related to subrecipient monitoring, as detailed in the OMB Circular
A-133 Compliance Supplement. Such requirements include, among other things, identifying to the
subrecipient the CFDA number, federal awarding agency, and award name and number.
CITY OF LANSING, MICHIGAN
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2010
-23-
SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
(CONTINUED)
Finding 2010-11 – Identification of CFDA Number to Subrecipients (Subrecipient Monitoring)
(Concluded)
Condition: In contracting with its subrecipients for these programs, the City did not specify the
CFDA number or the award number of the funds being provided.
Cause: This condition was caused by a management oversight in preparing the subrecipient
contracts.
Effect: As a result of this condition, the City failed to communicate all required information to its
subrecipients and was exposed to the risk that a subrecipient could report the funding in its schedule
of expenditures of federal awards (if applicable) under an incorrect CFDA number, or could exclude
the program in its entirety.
Questioned costs: No costs have been questioned as a result of this finding inasmuch as no
disallowed costs were identified.
Recommendation: We recommend that the City revise its subrecipient grant agreements to include
all necessary communications, and monitor the reporting of its subrecipients to ensure compliance.
View of Responsible Officials: This conditions of this finding resulted from a transfer of job duties.
Upon learning of this deficiency, management corrected it through training.
Finding 2010-12 – Documentation of Payroll Expenditures in Accordance with Federal Cost
Principles (Allowable Costs / Cost Principles)
Material Noncompliance / Material Weakness in Internal Control over Compliance
CFDA #14.218/14.253 – Community Development Block Grant and Neighborhood
Stabilization Program
CFDA #14.239 – Home Investment Partnerships Program
Criteria: Office of Management and Budget Circular No. A-87, Cost Principles for State, Local,
and Indian Tribal Governments, requires charges to federal programs to be supported by personnel
activity reports, or in the case of staff who spend 100% of their time on a single federal cost
principle, semi-annual certifications.
Condition: All employees charged to these awards were done on a budgetary basis and no after-the-
fact review took place. Timesheets for hourly personnel are only prepared on an exception basis and
do not reflect the program or general ledger account being charged.
CITY OF LANSING, MICHIGAN
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2010
-24-
SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
(CONCLUDED)
Finding 2010-12 – Documentation of Payroll Expenditures in Accordance with Federal Cost
Principles (Allowable Costs / Cost Principles) (Concluded)
Cause: The City began preparing monthly personnel activity reports for non-supervisory positions
in April 2010. However, these reports were not compared to the actual charges (based on budget)
and adjusted as needed.
Effect: As a result of this condition, the City charged certain personnel costs to this program without
sufficient documentation as required by OMB Circular A-87.
Questioned Costs: The total amount of personnel costs (salaries and employee benefits) charged to
this program without sufficient documentation in accordance with OMB Circular A-87 was $25,409
and $775,161 for the Neighborhood Stabilization Program and Community Development Block
Grant, respectively (CFDA #14.218) and $68,970 for the Home Investment Partnerships Program
(CFDA #14.239).
Recommendation: We recommend that management review the guidance on allowable
documentation for personnel costs and ensure that appropriate communication and training is
provided to department managers and individuals working on federal grant programs.
View of Responsible Officials: Procedures are being put into place to ensure that charging of time
reflects the information from personnel activity reports.
SECTION IV – PRIOR YEAR FINDINGS
Findings 2009-1 – Material Audit Adjustments
The audit process identified the need for a material adjustment and management identified the need
for a prior period restatement to beginning equity. The specific issues from 2009 were not repeated.
However, a similar finding was reported for an unrelated adjustment.
Finding 2009-2 – Incomplete Monitoring of Subrecipients (Subrecipient Monitoring)
CFDA #97.067 – State Homeland Security Grant
The City did not fully comply with the requirements for monitoring of subrecipients. Corrective
action was not sufficient. Refer to finding 2010-6. A similar finding was reported for a different
federal program at 2010-7.
CITY OF LANSING, MICHIGAN
Schedule of Findings and Questioned Costs (Concluded)
For the Year Ended June 30, 2010
-25-
SECTION IV – PRIOR YEAR FINDINGS (CONCLUDED)
Finding 2009-3 – Documentation of Payroll Costs in Accordance with Federal Cost Principles
(Allowable Costs / Cost Principles)
CFDA #97.036 – FEMA
This program was not required to be tested as major in the current year and as such was not tested.
However, our procedures related to other programs identified related issues. Refer to findings 2010-
4 and 2010-12.
* * * * *
Rehmann Robson
675 Robinson Rd.
Jackson, MI 49203
Ph: 517.787.6503
Fx: 517.788.8111
www.rehmann.com
December 27, 2010
To the City Council of the
City of Lansing
Lansing, Michigan
We have audited the 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 (the “City”)for the year ended
June 30, 2010, and have issued our report thereon dated December 27, 2010. Professional
standards require that we provide you with the following information related to our audit.
Our Responsibility Under Auditing Standards Generally Accepted in the United States of
America and OMB Circular A-133
As stated in our engagement letter dated August 3, 2010, our responsibility, as described by
professional standards, is to express opinions about whether the financial statements prepared by
management with your oversight are fairly presented, in all material respects, in conformity with
accounting principles generally accepted in the United States of America. Our audit of the
financial statements does not relieve you or management of your responsibilities.
In planning and performing our audit, we considered the City’s internal control over financial
reporting in order to determine our auditing procedures for the purpose of expressing our
opinions on the financial statements and not to provide assurance on the internal control over
financial reporting. We also considered internal control over compliance with requirements that
could have a direct and material effect on a major federal program in order to determine our
auditing procedures for the purpose of expressing our opinion on compliance and to test and
report on internal control over compliance in accordance with OMB Circular A-133.
As part of obtaining reasonable assurance about whether the City’s financial statements are free
of material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts and grants, noncompliance with which could have a direct and material
effect on the determination of financial statement amounts. However, providing an opinion on
compliance with those provisions was not an objective of our audit. Also, in accordance with
OMB Circular A-133, we examined, on a test basis, evidence about the City’s compliance with
the types of compliance requirements described in the U.S. Office of Management and Budget
(OMB) Circular A-133 Compliance Supplement applicable to each of its major federal programs
for the purpose of expressing an opinion on the City’s compliance with those requirements.
While our audit provides a reasonable basis for our opinion, it does not provide a legal
determination on the City’s compliance with those requirements.
Page 2
Planned Scope and Timing of the Audit
We performed the audit according to the planned scope and timing previously communicated to
you in our engagement letter and our meeting about planning matters on October 26, 2010.
Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. In
accordance with the terms of our engagement letter, we will advise management about the
appropriateness of accounting policies and their application. The significant accounting policies
used by the City are described in Note 1 to the financial statements. No new accounting policies
were adopted and the application of existing policies was not changed during the year. We noted
no transactions entered into by the City during the year for which there is a lack of authoritative
guidance or consensus. There are no significant transactions that have been recognized in the
financial statements in a different period than when the transaction occurred.
Accounting estimates are an integral part of the financial statements prepared by management
and are based on management’s knowledge and experience about past and current events and
assumptions about future events. Certain accounting estimates are particularly sensitive because
of their significance to the financial statements and because of the possibility that future events
affecting them may differ significantly from those expected. The most sensitive estimates
affecting the financial statements were:
Management’s estimate of the useful lives of depreciable capital assets is based on
the length of time it is believed that those assets will provide some economic benefit
in the future.
Management’s estimate of the accrued compensated absences is based on current
hourly rates and policies regarding payment of sick and vacation banks.
Management’s estimate of their leases receivable balances is based on past
experience and future estimate of leases receivable.
Management’s estimate of the allowance for uncollectible receivable balances is
based on past experience and future expectation for collection of various account
balances.
Management’s estimate of the insurance claims incurred but not reported is based on
information provided by the entity’s third party administrators and subsequent claims
activity.
The assumptions used in the actuarial valuations of the City's pension and other
postemployment benefit plans are based on historical trends and industry standards.
Page 3
We evaluated the key factors and assumptions used to develop these estimates in determining
that they are reasonable in relation to the financial statements taken as a whole.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and
completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified
during the audit, other than those that are trivial, and communicate them to the appropriate level
of management. There was one passed adjustment for a proposed change in deferred revenue and
current verses long term receivable. The amount was not considered material to the financial
statements. As described in finding 2010-1 of the City’s single audit, we proposed (and
management approved) material audit adjustments to the City’s financial statements. In our
opinion, the adjustments had a material effect on the City’s financial reporting process.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a
financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction,
that could be significant to the financial statements or the auditor’s report. We are pleased to
report that no such disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in the attached
management representation letter dated December 27, 2010.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and
accounting matters, similar to obtaining a “second opinion” on certain situations. If a
consultation involves application of an accounting principle to the entity’s financial statements or
a determination of the type of auditor’s opinion that may be expressed on those statements, our
professional standards require the consulting accountant to check with us to determine that the
consultant has all the relevant facts. To our knowledge, there were no such consultations with
other accountants.
Page 4
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and
auditing standards, with management each year prior to retention as the governmental unit’s
auditors. However, these discussions occurred in the normal course of our professional
relationship and our responses were not a condition to our retention.
This information is intended solely for the use of the governing body and management of the
City of Lansing and is not intended to be and should not be used by anyone other than these
specified parties.
Very truly yours,
City of Lansing
Attachment A - Consideration of Internal Control Over Financial Reporting
For the Year Ended June 30, 2010
A-1
In planning and performing our audit of the financial statements of the City of Lansing (the “City”)
as of and for the year ended June 30, 2010, in accordance with auditing standards generally
accepted in the United States of America, we considered the City’s internal control over financial
reporting (internal control) as a basis for designing our auditing procedures for the purpose of
expressing our opinions on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an
opinion on the effectiveness of the City’s internal control.
Our consideration of internal control was for the limited purpose described in the preceding
paragraph and was not designed to identify all deficiencies in internal control that might be
significant deficiencies or material weaknesses and, therefore, there can be no assurance that all
such deficiencies have been identified.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or
combination of deficiencies in internal control, such that there is a reasonable possibility that a
material misstatement of the entity’s financial statements will not be prevented, or detected and
corrected on a timely basis. The deficiencies we noted that we consider to be material weaknesses
are described in the Schedule of Findings and Questioned Costs in the City’s Single Audit report.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is
less severe than a material weakness, yet important enough to merit attention by those charged with
governance. The deficiencies we noted that we consider to be significant deficiencies are described
in the Schedule of Findings and Questioned Costs in the City’s Single Audit report.
Other Matters
Bank Reconciliations (Repeat Comment)
As part of our audit, we examined the bank reconciliations of the City's various accounts throughout
the fiscal year. We noted that while most bank reconciliations showed evidence of a formal review
and approval process (as required by City policy), several did not. We recommend that the City
carefully adhere to its policy that each bank reconciliation be reviewed and approved by an
individual other than the preparer, and that such review be evidenced by initialing and dating the
reconciliation. We understand that the City has already made changes to these procedures for FY
2011, which should serve to satisfy this recommendation.
City of Lansing
Attachment A - Consideration of Internal Control Over Financial Reporting
For the Year Ended June 30, 2010
A-2
Stale Checks (Repeat Comment)
During our testing of the City’s cash and bank reconciliations, it came to our attention that there is a
significant number of checks that have been outstanding for more than one year. Michigan
Compiled Law (MCL) 567.234 states: “Property held for the owner by a court, state, or other
government, governmental subdivision or agency, public corporation, or public authority that
remains unclaimed by the owner for more than 1 year after becoming payable or distributable is
presumed abandoned.” The law requires the person holding unclaimed property presumed
abandoned and subject to the State’s custody, to send written notification (“due diligence letter”) to
the owner at their last known address informing them that the property is subject to be turned over
to the State of Michigan. The notice must be sent not less than 60 days before filing the report to the
State of Michigan. MCL 567.238 requires the letter to the owner along with the unclaimed property
to be filed with the State Treasurer on or before November 1 of each year for the twelve month
period ending on the immediately preceding June 30. We recommend that the City examine old
outstanding checks and follow the procedures detailed above.
Fraud Monitoring Program
The City has implemented a process to allow employees and others within the organization to report
suspected fraud or abuse directly to senior management. However, based on our interactions with
various City employees, it would appear that knowledge of this system is not widespread. We
recommend that the City undertake to make all employees aware of this system, and consider
adding mention of it to the City's employee handbook. Finally, the current system does not appear
to support anonymous reporting of matters. We recommend that feature be added as an option for
sensitive matters that may not otherwise be reported without appropriate whistle-blower protections
in place.
Actuarial Data Preparation
The City obtains actuarial valuations for its various pension and other postemployment benefit plans
each year. Ideally, these valuations should be obtained far enough in advance to be used in
determining the annual required contribution for the fiscal year, and to be included in the audited
financial statements. In recent years, the City has not provided its actuaries with the information
necessary to complete these valuations until well after the end of the fiscal year, which significantly
delays the availability of the actuarial information. We recommend that the City seek to accelerate
its timeline for submitting data to its actuaries in future periods.
City of Lansing
Attachment A - Consideration of Internal Control Over Financial Reporting
For the Year Ended June 30, 2010
A-3
Pension Report Review
The City outsources the administration of certain functions for its pension plans, including investing
activities, to a third-party administrator. As part of exercising appropriate oversight over this
function, the City should annually obtain a SAS 70 report on the third-party administrator's internal
controls. While such a report was available for the most recent period, the City did not review it to
ensure that no deficiencies requiring corrective action were noted. We recommend that a
knowledgeable official review this report annually and follow-up on any areas of concern with the
custodian of the City’s pension assets or its auditors.
Multiple Vendor Identification Numbers
As part of our audit, we reviewed the City's vendor information file. We noted various instances in
which a single vendor was listed multiple times and assigned multiple identification numbers. This
appears to be a result of individual City departments requesting a new identification number to be
assigned to a vendor without first checking with Purchasing to ensure the vendor hadn't already
been setup. In order to facilitate more accurate reporting of the City's purchasing activities, we
recommend that a procedure be put in place to check for existing vendor information before
approving a new vendor identification number.
* * * * *