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1998 - Internal Audit Interoffice Communication
CITY of LAN S IN G "' -'"I\I E Internal Audit t:`' =i.R 23 PIi 2: 25 Interoffice Communication LAB,}SING CITY CLERK TO: Council President Benavides,Mayor Hollister, & Council members FROM: Internal Audit Staff DATE: March 20, 1998 SUBJECT: Financial Condition of the City: Year Ending 6-30-97 Pursuant to Article 3-401.4 of the Lansing City Charter the Internal Audit Office hereby submits the analysis of the financial position of the city. This analysis is intended to provide not only the financial status, by fund, of the year most recently ended but also, where applicable, a comparison of various indicators to the prior two years allowing for the identification of trends. In addition, it is our intent that this report may also be utilized as a reference document by policy-makers and other interested parties when evaluating various financial initiatives and issues. By way of overview, the city maintains.thirty six separate funds as-well-as two account groups. The thirty six funds are categorized into seven distinct fund types, these being as follows (the#in parenthesis indicates the number of individual funds within the fund type): 1. General Fund (1) 2. Special Revenue Funds (11) 3. Debt Service Funds (7) 4. Capital Projects Fund (1) 5. Enterprise Funds (8) 6. Internal Service Fund (1) 7. Fiduciary Funds (7) In addition, the two "Account Groups", General Fixed Assets and General Long-Term Debt are included in the financial statements. Please note that analysis of these funds is somewhat awkward or incomplete in that a number of these separate funds can and do represent only a portion of a total program. For example, the seven-year road reconstruction program involves the interplay of seven different funds of the city, including four different account series in the Capital Projects Fund. Consequently, our review is generally restricted to an analysis of each fund serving to identify trends within the fund and, to a limited extent, identification of interaction of funds to the extent they are significant. The preparation of this report consumed far more time than originally envisioned, due to our desire to research and understand issues raised through preparation of the initial work papers. The time spent on such issues was well spent and, as a result, should minimize time spent in subsequent years. Finally, Internal Audit strives to make what can be somewhat complex or intricate financial issues simpler to understand (although they can not always be made simple). In this regard we seek feedback from all users of this report, in particular council members and general public, as to what was found useful, and equally important, what was found to be confusing or irrelevant. As always, IA staff are prepared to explain or respond to inquiries regarding this report upon request. Pursuant to the Lansing City Charter copies of this report were provided to the City Clerk and Mayor's Office. Greg Koessel Arn ld C. Yerxa Chie' f Internal Auditor Principal Au �top GENERAL FUND S I �G �tICHi � �� CITY of LANSING GENERAL FUND Revenues The first three pages in the General Fund section reflect first, a three-year history of revenues by type, and both dollar and percentage increases. The second page provides a comparison of actual revenues to original budget. The third page reflects the percentage of each revenue type to total revenues. In FY 97 General Fund (GF) revenues and other funding sources totaled $91,308,251, an increase of$4,157,766 or 4.77%. Property tax revenues (the dominant revenue stream-for now) grew less than 1%, and the three-year average rate of increase is 1.98% compared to the total General Fund (GF) three-year average increase of 4.95%. Income tax revenues increased by 3.94% with a three-year average of 3.86%. Within this category note that collection of delinquent taxes increased by 55.1%, from $822,821 in FY 96 to $1,275,886 in FY 97. Current taxes due and receipted increased by 2.1%, or $475,268 from FY 96 to FY 97. Combined, property and income taxes were$1,338,541, or 2.7%, less than projected. This loss was more than compensated for by Intergovernmental revenues receipted at$21,220,828, $1,920,828, or 10%, above original budget. Note, as reflected on the third revenue page, that in FY 93 property and income tax revenues comprised 56.8% of GF revenues. In FY 97 this percentage figure dipped to 53.8%, a subtle yet consistent decline. Within the same time frame Intra governmental revenues increased from 20.7% of GF revenues to 23.24% demonstrating an increasing reliance on external revenues. Overall, final GF revenues exceeded original projections by$1,326,085, or 1.5%. Expenses Pages 4 thru 6 present a three-year history of expenditures by department, debt service payable from the operating millage levy, and operating transfers out of the General Fund. In total, the three-year average rate increase is 4.97%. However, by factoring out the $6,857436 contribution initially funding the Budget Stabilization Fund we believe a more reasonable three-year average is 4.56% per year. The first section (2.5 pages) presents a three-year history of expenditures by department/function inclusive of personnel, operating, and capital costs. The percentage figure beneath each provides the increase (decrease) as compared to the year prior. As the city budget is substantially driven by personnel costs a percentage figure reflecting the rate of growth is provided for each department (left-center). Totals for the three categories are provided on the third page in the gray shaded area. Excluding debt service and operating transfers, general operating expenses increased by$4,580,322, or 6.1%, in FY 97 including a 6.6% increase in personnel costs. The three-year average growth rate for the general operations category is 3.77%. Debt service and operating transfers to other city funds are summarized in the mid lower half of page three. Operating transfers reflect amounts transferred to other non-general funds to support/subsidize specific functions, to appropriately classify funds by their intended use (Capital Projects Fund-principally park millage and road funds), or to reserve funds for future emergencies (Budget Stabilization , or"Rainy Day" Fund). Again factoring for the original "Rainy Day" Fund contribution operating transfers increased by$1,072,490, or 11.32% in FY 97. The three-year average increase is 13.47%. Analysis of Financial Condition The last page devoted to the General Fund provides a broad overview of all financial components in summary. As much of this material was explored earlier comments will be brief. First, the Current Ratio is 1.48, down slightly from 1.51 in FY 96. The liquidity position demonstrates, in the absence of a catastrophe, no cause for concern. Second, surplus of revenues & other financing sources over expenditures and other financing uses was $323 in FY 97, as compared $1,193,488 in FY 96. Note the FY 95 figure includes the original "Rainy Day" Fund contribution that,without even more restating, comprises comparability. Third,Undesignated Fund Balance, that portion of fund balance available for appropriation, increased by 9.8%. In FY 97 Undesignated Fund Balance comprised 15.04 days of GF expenditures/uses. In FY 96 this figure was 14.53 days. 01/29/98 City of Lansing General Fund Analysis of Receipts and Revenues FY 97 FY 96 FY 95 Property Tax Revenues $24,622,820 $24,387,005 $23,718,658 Dollar Amount Change beween FY's $235,815 $668,347 $499,587 Percentage Change between FY's 0.97% 2.82% 2.15% Income Tax Revenue $24,473,639 $23,545,306 $22,729,189 Dollar Amount Change beween FY's $928,333 $816,117 $882,297 Percentage Change between FY's 3.94% 3.59% 4.04% Licenses and Permits $1,302,672 $1,469,071 $1,339,812 Dollar Amount Change beween FY's ($166,399) $129,259 $193,989 Percentage Change between FY's -11.33% 9.65% 16.93% Intergovernmental $21,220,828 $18,429,686 $17,698,116 Dollar Amount Change beween FY's $2,791,142 $731,570 $1,463,472 Percentage Change between FY's 15.14% 4.13% 9.01% Charges for Services $7,946,618 $7,573,660 $7,589,851 Dollar Amount Change beween FY's $372,958 ($16,191) $1,289,611 Percentage Change between FY's 4.92% -0.21% 20.47% Fines and Forfeits $3,103,904 $2,812,087 $2,636,608 Dollar Amount Change beween FY's $291,817 $175,479 $10,529 Percentage Change between FY's 10.38% 6.66% 0.40% Interest and Rent $1,774,024 $1,564,004 $1,349,648 Dollar Amount Change beween FY's $210,020 $214,356 $713,945 Percentage Change between FY's 13.43% 15.88% 112.31% Contributions $6,187,762 $6,340,387 $5,946,271 Dollar Amount Change beween FY's ($152,625) $394,116 $176,976 Percentage Change between FY's -2.41% 6.63% 3.07% :. ocd:. fslatec.and;: ; tit:.;:::.:::.::;.::;:>; :;.;:::;>; .............. ::.::::::::. . .............. ::..::::::::: ::::: .:::::::..:.:. ....... ,,::::::.:. :::::.: dthEL1nt�Eb12tE.QS.::.: .. �,,......... �.. Miscellaneous $114,420 $331,939 $227,874 Dollar Amount Change beween FY's ($217,519) $104,065 $35,032 Percentage Change between FY's -65.53% 45.67% 18.17% Total General Fund Revenues $90,746,687 $86,453,145 $83,236,027 Dollar Amount Change beween FY's $4,293,542 $3,217,118 $5,265,438 Percentage Change between FY's 4.97% 3.87% 6.75% Other Financing Sources $561,564 $697,340 $554,045 Dollar Amount Change beween FY's ($135,776) $143,295 ($461,409) Percentage Change between FY's -19.47% 25.86% -45.44% Total General Fund Revenues and Other Financing Sources $91,308,251 $87 150,485_ $83 790,072 Dollar Amount Change beween FY's $4,157,766 $3,360,413 $4,804,029 Percentage Change between FY's 4.77% 4.01% 6.08% 01/29/98 City of Lansing General Fund Revenue Budget to Actual FY 97 OVER ORGINAL FINAL (UNDER) BUDGET REVENUE BUDGET Property Tax Revenues $25,210,000 $24,622,820 ($587,180) Income Tax Revenue $25,225,000 $24,473,639 ($751,361) Licenses and Permits $1,305,995 $1,302,672 ($3,323) Intergovernmental $19,300,000 $21,220,828 $1,920,828 Charges for Services $8,023,671 $7,946,618 ($77,053) Fines and Forfeits $2,709,500 $3,103,904 $394,404 Interest and Rent $1,490,000 $1,774,024 $284,024 Contributions $6,262,000 $6,187,762 ($74,238) Miscellaneous $140,000 $114,420 ($25,580) Other Financing Sources $316,000 $561,564 $245,564 $89,982,166 $91,308,251 $1,326,085 U', CDm o 10 8 o o f Di r o cam; r r- 0 0 0 N N N O iz (D Lo O N O 0 m N N (0 O O M m m N N (D V' N O aD m � v N m �l0y N CnD a00 N r-m Cl)M C') (DD } U N o 69 l!7 uN4 n LL Q 69 CN 69 69 O (D to LO m N O O v m O at (D q: (n m m m m N N O o N N r N r- M 0 I- 0 r O I� 0) N t m O CD V ul V O m aD (D CVN O h N a0 V O m 7 N 00 N cr) (O CO r m O m •a6NR 69 (D m � to � t�U- N — u4 ER O R N (0 M L O h (D O CO r O (O N (D O o N N r N m co r r 0 0 0 co ltD am0 N �_ N O I� r Iq r- CO 00 m (D CD N m O O a0 m ao m (D m m r v- O (Tl 7 I� � CO co lLO (m IT D cr) m N l(( � + fR VT UU. a N N V9 � m OD O fmD (mD N n N C07 OOR O N N r N m m r r� 0 0 00 a� O O h a0 0 0 (0 a~0 O co Cl)Cl) I O O m O (D (D O O m m m H N ru Obi m co^ v CCDD N N - � m a) LO 7 m I R v IQ CO (f) Cl) � � U a N N � � � � c caa 0 J 'O y I- O Cl) V' O O It (n m N O m CD V' N I-- 'IT m h 0 O O C? a CD (D r (7 a0 m -: 0 O O O VN N CV O V d Cy O m N a0 a0 IT v N O It (14 C co (mD CD co (D a)) O r- V (OD N G) V' 'a N m N O (D m ad (a N h O N a O a0 (D O B (D 'V' m N m v, � m Q l}L Q 69 � u9 69 7 � v a+ O w U) E O c ym) d ~ v R ' C C > c m (a CL E c rn rn H 0cu 0 CL 5 n c C) m 5 U E 0 01/30/98 Schedule 1-B Page 1 CITY OF LANSING GENERALFUND Analysis of Expenditures and Transfers % Change EXPENDITURES: FY 97-96 FY 97 FY 96 FY 95 CURRENT OPERATING: Council: Personnel Services 12.39% $456,323 $406,034 $356,256 Other $86,327 $127,758 $89,149 Land & Equipment $54,522 _ $44,768 $120,852 Department Total: $597,172 $578 560 $566,257 Percentage Change Between FY 3.22% 2.17% 22.400/o Courts: Personnel Services 11.01% $2,855,737 $2,572,497 $2,593,371 Other $724,087 $657,224 $622,798 Land & Equipment $44.753 _ $68,785 $34,639 Department Total: $3,624,576 $3,298,506 $3,250,808 Percentage Change Between FY 9.89% 1.47% 5.07% Mayor: Personnel Services 9.42% $358,953 $328,052 $297,256 Other $39,491 $31,795 $19,925 Land & Equipment $87,895 $75,225 $685 Department Total: $486,339 $435,072 $317, 666 Percentage Change Between FY 11.78% 36.87% 15.76% City Clerk: Personnel Services 23.86% $366,474 $295,875 $294,142 Other $151,245 $97,110 $106,216 Land & Equipment $44,867 $13,447 $7,782 Department Total: $562 587 $406,432 $408,140 Percentage Change Between FY 38.42% -0.42% 11.99% Planning& Neighborhood Development: Personnel Services 7.27% $1,868,589 $1,742,005 $1,609,434 Other $152,237 $104,790 $175,108 Land & Equipment $193,565 $13,274 $63,373 Department Total: $2,214,392 $1,860,069 $1,847,915 Percentage Change Between FY 19.05% 0.66% 16.43% Finance: Personnel Services 8.10% $2,409,742 $2,229,079 $2,038,998 Other $475,632 $443,309 $484,237 Land & Equipment $28,132 $74,117 $25,336 Department Total: $2,913,507 _$2,746,506 _ $2,548 571 Percentage Change Between FY 6.08% 7.77% 7.04% Personnel Services: Personnel Services 14.05% $477,563 $418,739 $382,517 Other $78,228 $85,478 $83,405 Land & Equipment $0 $2,529 $724 Department Total: $555,791 $506,747 _ $466,646 Percentage Change Between FY 9.68% 8.59% 9.04% 01/30/98 Schedule 1-B Page 2 Law: Personnel Services 4.69% $581,028 $554,984 $530,101 Other $139,630 $197,005 $202,469 Land &Equipment $43,856 $529 _ $0 Department Total: $764 514 $752, 119 $732, 770 Percentage Change Between FY 1.59% 2.72% -5.98% Mayor's Extended Staff: Personnel Services 5.92% $1,420,840 $1,341,386 $1,300,490 Other $986,713 $866,571 $1,068,798 Land & Equipment $796,011 $943,020 $126,528 Department Total: $3 203,564 $3.150,977 $2 495,816 Percentage Change Between FY 1.67% 26.25% -9.62% General Administration: Personnel Services 7.81% $19,016,937 $17,640,069 $18,230,553 Other $5,538,274 $5,398,776 $5,643,890 Land & Equipment $0 $41,289 _ $7,450 Department Total: $24 555,211 $23 080,133 $23,881,893 Percentage Change Between FY 6.39% -3.36% -0.21% Police: Personnel Services 4.80% $15,209,995 $14,512,951 $13,676,067 Other $1,127,725 $969,892 $868,871 Land &Equipment $182,088 $183,642 $138,674 Department Total: $16,519,808 $15,666,485 $14,683,612 Percentage Change Between FY 5.45% 6.69% -0.77% Fire: Personnel Services 5.10% $11,407,785 $10,854,357 $10,487,222 Other $822,898 $781,376 $592,560 Land & Equipment $269,517 _ $164,172 $345,964 Department Total: $12 500,200 $11,799,906 $11,425,746 Percentage Change Between FY 5.93% 3.27% 2.55% Public Service: Personnel Services 6.93% $2,156,093 $2,016,291 $1,991,596 Other $1,454,508 $1,211,770 $1,241,763 Land & Equipment $73,184 $34,451 $11,197 Department Total: $3,683,786 $3,262,512 $3,244,556 Percentage Change Between FY 12.91% 0.55% 9.69% Human Relations& Community Services: Personnel Services 20.03% $473,807 $394,745 $326,189 Other $21,001 $21,035 $15,216 Land & Equipment $8,138 $6,996 $609 Department Total: $502,947 $422,776 $342,014 Percentage Change Between FY 18.96% 23.61% -1.26% Parks&Recreation: Personnel Services 4.25% $3,837,464 $3.681,158 $3,583,733 Other $1,081,409 $1,235,867 $1,174,307 Land & Equipment $430,306 $384,845 $147,460 Department Total: $5,349,179 $5,301,870 $4 905,500 Percentage Change Between FY 0.89% 8.08% 3.37% 01/30/98 Schedule 1-B Page 3 Human Services&Community Support: Personnel Services -47.65% $15,000 $28,653 $23,225 Other $1,593,244 $1,763,771 $1,433,866 Land & Equipment $0 _ $0 $10,399 Department Total: $1,60_8 244 __ $1_792,424 — $1,467,490 Percentage Change Between FY -10- 86% 22 14-6/—o 18.19% Subtotal Current Operating $79,641,815 $75,061,493 $72,585,400 GENERAL FUND DEPARTMENT TOTALS: lecsesrtnel' evices. �.::::.:.x.:............ On1i.r rno�nti��a.. Ad Chen a�er�er�ta h:arf ;: eat=Ys<::<::::::::::::::>;<::»::;»;:<:«:<:><>::<::»<::,;:>:<..;;;: 74 Do11ac.Amv[�nt�laan �.:bewe_.........................: ........:.........:.:::::.:.::.:::.::::::::.::.......:::::.;;;;;:.::;;;;;:;:::<::::.::::.;;;;;::.;:<::>:<::;::>::»::>:><::;:;:.;::::;:.:....:.:: Pere ... 75`4Ot :..:: .:.;... ::::.:.. .. .: . .. . Clan e;:beween Pereenta: e::.C13an a:.l etws.e....... :>::>:;:::»::>::>::>:<::>;>:>::>::>::>:>:«:::»>;;:;:;:;<.:<.;:;:.::,;;::.:::::.:::::::::::::::::::.::::::::::::.............................................. DEBT SERVICE.- Principal: $335,434 $547,001 $714,845 Interest $123,907 _ $127,591 $203,375 Department Total: $459,341 $674,592 $918 220 Dollar Amount Change beween FY's ($215,251) ($243,628) $149,461 Percentage Change Between FY -31.91% -26.53% 19.44% OPERATING TRANSFERS TO: Budget Stabilization $538,020 $785,000 $6,857,436 Cemetery $489,079 $452,573 $498,477 Capital Projects $7,468,323 $6,671,532 $6,215,355 Drug Enforcement $222,806 $12,697 $0 Recycling $0 $207,330 $0 State and Federal Programs $74,295 $185,317 $84,624 Exhibition Hall Authority/LEPFA $881,800 $550,800 $599,500 Potter Park Zoo $1,379,276 $1,395,340 $1,305,949 Principal Shopping District $32,500 _ $0 $0 Total Operating Transfers $11,086,099 $10,260,589 $15,561,341 Total Expenditures and Uses $91,187,255 $85,996.674 $89 064,961 Dollar Amount Change beween FY's $5,190,581 ( 3,068,287) $9,763,528 Percentage Change Between FY 6.04% -3.44% 12.31% TotaE Expenditures anti Uses Lass Fudge#3ffa $9ff�i4 ; 385,: '1't, 7 : 8 2{#7 Amt� ntange bets , , t , 1� xr�fegngeae#ure@n t"Y.:,,:; 03/20/98 City of Lansing General Fund Analysis of Financial Position %Change FY 97-96 FY 97 FY 96 FY 95 WORKING CAPITAL ANALYSIS: Cash Unrestricted -67.85% $1,909,563 $5,939,201 $2,948,619 WORKING CAPITAL: Total Current Assets $20,496,580 $19,510,833 $15,609,079 Total Current Liabilities ($13,889,039) ($12,903,615) ($10,195,349) Current Ratio(CA/CL) 1.48 1.51 1.53 Total Working Capital 0.00% $6,607,541 $6,607,218 $5,413,730 REVENUES AND EXPENDITURES ANALYSIS: Total Revenues 4.97% $90,747,010 $86,453,145 $83,236,027 Total Expenditures 5.98% ($80,222,152) ($75,696,408) ($73,442,218) Excess Revenues over Expenditures -2.16% $10,524,858 $10,756,737 $9,793,809 Other Financial Items-Netted 10.05% ($10,524,535) ($9,563,249) ($15,068,698) Surplus(Deficit)of Revenues and Other financing -99.97% $323 $1,193,4B8 ($5,274,889) Sources over Expenditures and Other Financing Uses Fund Balance at Beginning of Year $6,607,218 $5,413,730 $10,688,619 Fund Balance at End of Year $6,607,541 $6,607,218 $5,413,730 Percentage Change Between FY 0.00% 22.05% -49.35% Reserved::grAdvar*":::�Oft' Funs a.;::. ;: t7 5B8>;;. $7.�5#;�8�:: ::;::: >:::<;.$3eca:::::5: ....:.. .. .. . R6se.eE�#fii.. ttGt1 .....:.::::::::::.::::.::........:::..........:.:.:::.;:;::::.:..:....:..:..,:;:::::>::r:.>:::::::::..:.$ 0BB065:....... :::;;;.:$ ix.........C. ......#tlbi .cic:.................................................:.::...:.:.,:..::::::......::::::.::::......::::::::,.:::::.:............:..::.:............/.......,...................................:....:�.:.;;...:. sagr�a#ed:.#vr, ubse..uent::Yea:: .::::::::::::::::::::.::::::.::::::::::.:.:::::::::::::::::::::::::::::.::::::$f.,a................................::..:..:.::.: ..::.::::::::.:::::::::::.::.::•:::::::,.::::::::. 4 IJ t.................. d atiadPnt� �:Chaiiy'i3<B:eturr: >>»><»»>>:: >:::::>::>:>:<:«< ..... . $.DEBT ANALYSIS: Total Long Term Debt(principal&interest over life of bonds) $68,503,085 $109,089,441 $124,274,282 s}+.yaam.n ;..:.:...:...:..::...:: 3.2....>�.Bf..B..2...:<.:.: ::.:.F5..: :#+,4...'t`... ..:> :: :tA'.S .. b ... ..... .......... ./ .sencs ; : : wo f ,.:..:....:.:.IAcled :::::£:1 MP..... ........:::: .....�:::: 1t ......0.:.. :::..:. The totals on the Revenue and Expenditure recaps,(taken from the General Ledger)do not be directly to the the totals on this recap as taken from Audit report. As detailed below: ::::::::::::: :::::::::::::::::.::.:::.::.:::.::.::::::.::::.::::::.::::::.:::::::::::::.:::.:.:...::....:.�1..dot.F�. ....I�..................��e :�d..�::.�:::::::::: �......................... �:`: E >s'r< ....d...u..te . :::::::.::::::.::::::::::::::::::::::::::::.:..::.:::.:.::::........................... .. ...8 .8........,.....,::.:. .. . t ..............................................................................................:.:...:::.::::::::::::::::::::::::::.::::::::.::::::::::.::::::::.::::::...:..:.:::::.f.:.:....................................:.::..::,:::::.:::: r ::. u ..k Fa.. ... ....::......::.::::::::.::......:...:.:::.:....:::.:..................:...:.... 6 Gq'� #�:...:.:::..:...:..:.. 87 ........................................................................................:....:.......:..............................................................................................h.......�'......................... SPECIAL REVENUE FUNDS yPN 5 I ,yC �r 2 � � HIGa CITY of LANSING SPECIAL REVENUE FUNDS Special Revenue Funds are utilized to account for the proceeds of specific revenue streams (other than expendable trusts or major capital projects) that are legally restricted to expenditure for specified purposes. As noted in our cover letter the city maintains 11 such funds. To the extent feasible we have prepared a single page analysis highlighting results of operations and key indicators. 1. Act 51 Major Streets Gas and Weight Tax Funds are allocated to Major and Local Streets on a formula basis that factors in population and miles of major and local streets. From the amount allocated to Major Streets (excluding trunk line maintenance funds) the city may transfer up to 25% to Local Streets (35% for exceptional/unusual circumstances with MDOT approval). Total expenses and operating transfer to Act 51 Local Streets exceeded revenues by $318,680 in FY 97. Intra governmental revenue receipted from the state increased by 7%, with a three-year average rate of increase of 3.63%. Total revenues and financing sources increased by 8%, with a three-year average increase of 5.2%. Expenses increased in FY 97 by 28.2%, including a 2.3% increase in personnel costs and a 84% increase in construction costs. The three-year average increase before local streets operating transfer is 14.12%. Including the operating transfer to local streets the three-year average increase for expenses and uses of funds is 11.43%. Undesignated Fund Balance increased $30,203, or 5.5% in spite of the deficit. Undesignated Fund Balance equals 31.5 days of FY 97 expenses/uses compared to 37 days in FY 96. 2. Act 51 Local Streets Total expenses exceeded revenues and sources by$150,914. Intra governmental revenue receipted from the state decreased by$7,965, or.6%,with a three-year average rate of increase of .9%. Total revenues and financing sources increased by$53,917, or 1.8% with a three-year average increase of 2.9% Total expenses increased by$496,855, or 19% from the prior year. Personnel costs decreased by 8%, while construction costs increased by 78%. Undesignated Fund Balance increased by$63,620, or 18%. Undesignated Fund Balance equals 47.8 days of expenses compared to 48 days in FY 96. 3. Budget Stabilization Fund The Budget Stabilization Fund Ordinance, adopted in May, 1994 provided for an original appropriation equal to 7% of the FY 95 original General Fund (GF) appropriation. Thereafter, in any year in which actual GF revenues exceed expenses (including encumbrances and carry-forwards) at least 25% of the surplus shall be transferred to the stabilization fund until the fund equals 10% of the net current-year GF appropriation. Thereafter, additional appropriations may be made to the fund from one- time or intermittent revenues. This fund shall not exceed 15% of the most recent GF budget or 15% of the average of the five most recent GF budgets as amended,whichever is less. At FY 97 year-end the stabilization fund equaled 9.09% of FY 97 original appropriations. Also, at FY 97 year-end the Budget Stabilization balance combined with Undesignated General Fund Balance equals 47.6 days of FY 97 expenses excluding the contribution to the stabilization fund. In FY 96 this figure was 47 days. 4. Drug Law Enforcement Fund The Drug Law Enforcement Fund was established to receive the proceeds from the seizure of drug-related assets. Proceeds from this source are restricted for drug-law enforcement and education programs. These proceeds provide support for the Tri-County Metro Narcotics Unit in the form of operating expenses and funding for 1.5 clerical positions provided through a temporary help agency. Proceeds also assist the Regional Enforcement Against Crack Houses (REACH, a.k.a. Special Operations Unit of LPD) by funding a portion of REACH's operating Expenses. Forfeiture proceeds also are utilized to match the Asset Seizure Grant that provides one detective to handle the intricacies of forfeitures, and to match the Community Policing Strategy Grant that provides 4 community policing officers, a sergeant, a detective, an attorney, and a civilian landlord relations position. The CPS Grant focuses on drug-involved rental units. Recently, forfeiture revenues have experienced a significant decline. Compared to FY 95, revenues have declined $110,558, or 15%. In addition,FY 96 revenues, as compared to FY 95, decreased $297,134, or 40%. Expenditures and other uses reflect a three-year average increase of almost 13%. The General Fund subsidy increased from $0 in FY 95, to $12,697 in FY 96, to $222,806 in FY 97, a 1,655% increase from the prior year. Undesignated Fund Balance reflects 96 days of expenses and uses, compared to 54 days for the prior year. 5. State & Federal Programs This fund accounts for all state and federal grants not accounted for in a separate fund. Note that this fund is a composite of all grants through which the city has received money and have not yet been closed-out. In other words the accounting reflects expenditures incurred in the current year and acknowledges newly approved sources, but makes no distinction as to grants finished years ago awaiting final close-out by the originating agency versus grants currently active. Therefore there is no relationship between amount approved in total and amount received. We have simply included the amount expended by general classification. 6. Community Development Block Grant This fund accounts for funds received from the Federal Department of Housing and Urban Development in "Block Grant" form. While there is some discretion at the local level, CDBG Regulations limit administrative costs to no more than 20% of the allocation, public services such as recreation programs, neighborhood clean-ups, or community police officers to no more than 15% of the allocation,with the balance dedicated to housing, public improvements, and economic development. As is the case with the majority of federal funding, funds are received on a "drawdown" basis. Consequently the financial statements reflect that the amount expended is the amount received, and do not reflect the amount of residual funds still available for expenditure. Our review determined that$988,889 of unexpended funds from FY 97 and FY 96 are still available as delineated on the CDBG schedule. 7 Capital Commons Phase II.- Tax Increment Finance Authority The city operates two Tax Increment Finance Authority Districts. The Capital Commons TIFA fund accounts for those revenues incrementally generated within the district, and scheduled for re-payment to those sources originally advancing funds for land acquisitions, demolition and relocation, and sewer and other public improvements which, at the time, included General Fund, Sewage Disposal Fund, Community Development Block Grant funds, and a Section 108 Loan. During FY 97 the authority reimbursed CDBG (the last of the funding sources to be reimbursed) $560,000,leaving non-interest bearing unreimbursed project costs of$761,731 due. In FY 97 tax receipts were$588,073 which, combined with interest earnings of $10,637 created total revenues of$598,710. In addition to the$560,000 transferred to CDBG, Capital Commons TIFA expensed $31,005 to the Economic Development Corporation for administrative, legal, and accounting services. Fund Balance increased by $7,705, from $32,777 to $40,482. 8 Convention/Exhibition Hall. Tax Increment Finance Authority The Convention/Exhibition TIFA accounts for those funds incrementally generated in the downtown district. This fund is responsible for the long-term debt issued to expand the Lansing Center in 1992 and later to finance the 1995 Waterfront Development, described by the external auditors as follows: "On December 17, 1994, the Authority issued $25,108,133 in general obligation tax increment bonds with an average interest rate of 6.55%, to provide funds for additional work on the Convention/Exhibition Center waterfront project and to advance refund $23,625,000 in outstanding 1992 Tax Increment Bonds with an average interest rate of 5.1%. . . . As a result, the 1992 bonds are considered to be defeased , and the liability for those bonds has been removed from the general long- term debt account group. The refunding results in an economic loss to the Authority of approximately$220,000 and cash flow requirements of$26,171,910 in excess of that required to retire the defeased debt." Between FY 98 and concluding in FY 20, the total principal remaining due on this issue is $24,983,133 and, including interest, total payments are $55,996,270. In addition, on December 20, 1994, the Authority entered into a 20 year lease contract to assist in financing various automobile parking structures and lots. The total payable between 4-15-95 and 4-15-15 is $49,660,000. The balance due is $46,110,000 from FY 98 thru FY 2015. This amount includes $6,000,000 to be paid from FY 98 thru FY 05 at $750,000 per year. An additional$40,110,000 is to be paid from FY 06 thru FY 15 at $4,140,000 per year thru FY 14. The FY 15 payment currently is $2,840,000 in recognition of the advance payments already receipted. Pursuant to the contract, in any given year the Authority has funds greater than that needed to pay debt service, operating costs, and cash rentals then the Authority may use excess funds to advance pay cash rentals in inverse order of maturity. In FY 95 advance the advance payment was $310,000 receipted to the Capital Projects Fund. In FY 96 and 97 advance payments were$750,000 and $240,000 respectively, receipted to the Stadium Fund. Total advance payments are$1,300,000 which,when applied to the 2015 payment of$4,140,000 reduces that payment to $2,840,000 as delineated above. In FY 97 tax receipts were$2,851,407 which,when combined with interest earnings of$70,433, created total revenues of$2,921,840. Expenses included $1,261,527 for bonded debt, $750,000 for the normally scheduled cash rental and an additional $240,000 advance cash rental (both paid to the Stadium Fund), $196,848 expensed for Capital Improvements, and $154,979 paid to the Economic Development Corporation for administrative, legal, and accounting services. Total expenses and uses equaled $2,603,355 resulting in a surplus of $318,485. Fund Balance advanced from $264,672 in FY 96 to $583,157 at FY 97 year-end. 9. Stormwater Utility This fund accounts for revenue generated thru the stormwater fee. As this fee was implemented halfway thru FY 96, there exists 1.5 full fiscal years of fund history, and the accompanying analysis is skimpy. These revenues fund 50% of the capital costs (including 50% of State Revolving Loan Fund debt retirement), as-well-as stormwater administration and engineering, and street sweeping and catch-basin cleaning. Although a 30% credit was authorized for the FY 97 bill, overall revenues decreased by 3.5% ($182,030) as compared to FY 96. While there is some ambiguity regarding the utility of various general ledger revenue accounts established for FY 97, our review of these accounts with appropriate administrative staff combined with general common sense leads us to a conclusion we believe to be materially accurate. FY 97 revenues including fees paid late (but excluding late charges) relating to the December 96 billing totaled $3,765,777 compared to $5,168,268 in FY 96 resulting from the December 95 billing, a reduction of 37%. FY 96 fees paid in FY 97 are recorded at$1,177,670. Late charges (not the actual fee but the additional charge incurred for paying after 3-15) increased from $15,331 in FY 96 to $20,548 in FY 97 although we cannot determine if late charges received in FY 97 are exclusively for FY 97, or also include late charges relating to FY 96 bills. Also noteworthy is that the working capital position is $4,957,932, exceeding FY 97 total expenses by$2,712,885, or 121%. Undesignated fund balance equals over two years and two months of total FY 97 expenses. 10. Stadium Fund In FY 97 the Stadium Fund concluded its first full year,thereby limiting comparability to prior years. Total revenue and other funding sources decreased by 5.7%, ($134,718) a total of$2,246,991 compared to the prior year. This is attributable to a $510,000 decrease in "Advance Cash Rentals" (discussed in the Convention/Exhibition Hall TIFA section above). In FY 97 advance payments receipted were$240,000, in FY 96 advance payments were$750,000. Charges for services increased by 43% ($361,895) compared to the prior year. Expenses and other financing uses increased by 156% ($1,334,600) to a total of $2,191,548 as compared to $856,948 in FY 96. This increase is attributable to a full year of debt service which increased by$1,304,223, and the$350,009 transfer to LEPFA. The LEPFA transfer included $180,000 for stadium operations, $53,330 to establish an "Event Development Fund", $30,879 for the ice skating program, and a variety of smaller items. The year ended with a $55,443 surplus, while undesignated fund balance decreased by 9% (92,925) to a year-end total of$924,274. In FY 96 undesignated fund balance comprised 427 days of expenses and uses,while in FY 97 this figure was 152 days. 11 Principal Shopping District This fund was established in FY 97 to account for the proceeds primarily generated by a special assessment on downtown and old town properties to advertise, market, and support special events in these two areas. This fund also supports maintenance programs in the two areas. In FY 97 total revenues and sources, including a $32,500 General Fund contribution, totaled $422,806 against$411,138 of expenses. 01/30/98 City of Lansing Act 51 Major Streets Analysis of Financial Position %Change FY 97-96 FY 97 FY 96 FY 95 WORKING CAPITAL ANALYSIS: Cash -26.69% $1,324,161 $1,806,287 $1,275,238 Total Current Assets $2,796,990 $3,132,764 $2,886,814 Total Current Liabilities ($310,561) ($327,655) ($574,142) Current Ratio(CA/CL) 9.01 9.56 5.03 Net Working Capital -11.36% $2,486,429 $2,805,109 $2,312,672 REVENUES AND EXPENDITURES ANALYSIS: Total Revenues $6,274,920 $5,784,719 $5,931,513 Dollar Amount Change beween FY's $490,201 ($146,794) $290,917 Percentage Change Between FY 8.47% -2.47% 5.16% lrtergovemniantal 7 Q29ry $ , 2 ,155S46t81i : >`. ; Other .'.. Total Expenses $5,339,989 $4,166,544 $4,540,919 Dollar Amount Change beween FY's $1,173,445 ($374,375) $832,271 Percentage Change Between FY 28.16% -8.24% 22.44% p ......:.............:::.:::::::::::::.::._::::::::::::::::::::::::::::::.....:................::::::::::::::::.::::...:...... . debtSernoe.;:.;:.;::.;:.;:.;;;:.;;:.;:.;;:.;;:.;:::..:::::::::::::::::. .:::::::::::::.:..:::::::::.:�:::'�:...................................:....�.......... Excess Revenues over Expenditures $934,931 $1,618,175 $1,390,594 Dollar Amount Change beween FY's ($683,244) $227,581 ($541,354) Percentage Change Between FY -42.22% 16.37% -28.02% OTHER FINANCING SOURCES(USES): Operating Transfers to Local Streets ($1,268,750) ($1,167,500) ($1,180,000) Other $15,139 $41,762 $31,847 Surplus(Deficit) ($318,680) $492,437 $242,441 Percentage Change Between FY -164.71% 103.12% -54.81% Fund Balance Beginning of Year 21.29% $2,805,109 $2,312,672 $2,070,231 Fund Balance End of Year $2,486,429 $2,805,109 $2,312,672 Percentage Change Between FY -11.36% 21.29% 11.71% .:fund::�aianee:a�as�rv.d.fnr�n�umbranc�s.:::.::...:..::...::...............:....::.::.::.::::.::::...:..�..�....:..�...::..:....:...............::.:,::.:::::::::::::::.::::::..:.::::::..:.:.:........_....:.. f3as1 nat i..fpr.S..c s.:.u nt Ye r:s:;) �ntiftu...........::..........:::.....:.::.::::::::::::::::::::.:.:::,�.:::............ :...:..:. g :. .::.......::. ..........:.:.:::.:..:::: P:::::::::::,:.:.::::.:.::::::::..:::.:.,.........::.:.:.:::::.::::::.:.........::...:...:::::::::.:..........:.::.. . 5t >.: :.:.::..::.,::;::.:,::::: .::::,::,::,.:. :. .:.:::::::::. lindestgr�afdPercentagehange:BeivveeRFY DEBT ANALYSIS: Total Debt $332,126 $491,461 $650,808 Dollar Amount Change beween FY's ($159,335) ($159,347) Percentage Change Between FY -32.42% -24.48% trincil29G ::: $ :73J lntrest . : $ 9F ?;. ,...:.: :..:. s ,6zi::. .. $E7�t]75. (see long term debt for more detail) 03/20/98 City of Lansing Act 51 Local Streets Analysis of Financial Position %Change FY 97-96 FY 97 FY 96 FY 95 WORKING CAPITAL ANALYSIS: Cash -10.69% $1,261,285 $1,412,249 $856,297 Total Current Assets $1,508,391 $1,647,750 $1,103,936 Total Current Liabilities ($254,879) ($243,324) ($99,368) Current Ratio(CA/CL) 5.92 6.77 11.11 Working Capital -10.75% $1,253,512 $1,404,426 $1,004,568 REVENUES AND EXPENDITURES ANALYSIS: Total Revenues $1,706,916 $1,862,083 $1,625,315 Dollar Amount Change beween FY's ($155,167) $236,768 $59,256 Percentage Change Between FY -8.33% 14.57% 3.78% :. "1 "27 60 i:::::::::::::::.:::::::::::::::::::::::::..:.;:.:::.:::.::. ..........:......:::::::::.::::::.::.::...:::.:::.:::.::.::::.:::::.:,.:: 2 «::.:20kn ..::. . anther;::..:.::>;:.. ;:: .> <;:. _ ;::. : . 34>����9/e ;: ,::� ..,, . ,, ,.....,.. ,...:.:.,..<..... .. ......__.. ....__ Total Expenses $3.126,580 $2,629,725 $2,830,851 Dollar Amount Change beween FY's $496,855 ($201,126) $686,597 Percentage Change Between FY 18.89% -7.10% 32.02% <:.. :. #:>1flf3 s6s :<:::>::::>::::>::<:: 94t3+�26:: :; '.:::::i� :>:'�:>� � ::i:::::::::::::::: ::::: :::::::::::::: :::: ::::::::::::::::: ::i::::::: UK I:1:>:� Excess Revenues over Expenditures ($1,419,664) ($767,642) ($1,205,536) Dollar Amount Change beween FY's ($652,022) $437,894 ($627,341) Percentage Change Between FY -84.94% -36.32% 108.50% OTHER FINANCING SOURCES(USES): Operating Transfers from Major Streets $1,268,750 $1,167,500 $1,180,000 Other $0 $0 $58,936 Surplus(Deficit) ($150,914) $399,858 $33,400 Percentage Change Between FY -137.74% 1097,18% -93.48% Fund Balance Beginning of Year 39.80% $1,404,426 $1,004,568 $971,168 Fund Balance End of Year $1,253,512 $1,404,426 $1,004,568 Percentage Change Between FY -10.75% 39.80% 3.44% tan . M. etance:fiesetveci:fnr: tumor.�....... MEN ..::..:.::::::,:::::::::::::_:::::.:::r1 �''�►.;:.;;.;:.;: ..: ::::. : .: ::::::::F:...::.:....:::::::::::::::::C� +j::::....... :. : ::::::: ::::: :::.: .::::.`.Ff i.................:::::::::Cveats; :.::<.:;; :'�.� :.::.:..:...:.............................................. DEBT ANALYSIS: Total Debt $734,934 $1,029,433 $1,323,177 Dollar Amount Change beween FY's ($294,499) ($293,744) Percentage Change Between FY -28.61% -22.20% .... .. 1.F1 221 '�z2 `:: (see long term debt for more detail) 01/30/98 City of Lansing Budget Stabilization Fund Analysis of Financial Position FY 97 FY 96 FY 95 OTHER FINANCING SOURCES. Transfers from General Fund $538,020 $785,000 $6,857,436 Fund Balance, Beginning of Year $7,642,436 $6,857,436 $0 Fund Balance, End of Year $8,180 456 $7,642,436 _ $6,857,436 Dollar Amount Change beween FY's $538,020 $785,000 $6,857,436 Percentage Change Between FY 7.04% 11.45% Orginal General Fund Appropriation $89,982,166 $85,868,968 $80,913,118 Budget Stablization Fund balance as% of General Fund Appropriation 9.09% 8.90% 8.48% 03/20/98 City of Lansing Drug Law Enforcement Fund Analysis of Financial Position %Change FY 97-96 FY 97 FY 96 FY 95 WORKING CAPITAL ANALYSIS: Total Assets(Cash) $448,447 $384,840 $680,227 Total Liabilities ($222,158) ($177,603) ($149,019) Current Ratio(CA/CL) 2.02 2,17 4.56 Working Capital 9,19% $226,289 $207,237 $531,208 REVENUES: Forfeitures-Act 251 $629,918 $443,342 $740,476 Dollar Amount Change beween FY's $186,576 ($297,134) $195,157 Percentage Change Between FY 42.08% -40.13% 35.79% EXPENDITURES: Tri-County Metro $319,876 $315,587 $247,611 Dollar Amount Change beween FY's $4,289 $67,976 $169,313 Percentage Change Between FY 1.36% 27.45% 216.24% Ptsann�t:5brvicas j..D.42 `>:;::s. . ::.$$+,385 $31.f73 ? ' :: ':::'' $3a;71+ 4�fief . :. ::.:.: ; :>:< %':: :: .... . $ 85,491 .... .$2t8897: LPD-Reach $60,464 $61,281 $65,122 Dollar Amount Change beween FY's ($817) ($3,841) ($134,651) Percentage Change Between FY -1.33% -5.90% -67,40% ;:::::::>:.:::;::: ::>:::>.>.::.r::::.>> ersonr�eG:Sery es: :<; $...........:::.. $ . .. .. P rc .; . . ....... ... Excess Revenues over Expenditures $249,578 $66,474 $427,743 Dollar Amount Change beween FY's $183,104 ($361,269) $160,495 Percentage Change Between FY 275.45% -84.46% 60.05% OTHER FINANCING SOURCES(USES): From General Fund $222,806 $12,697 * $0 From State and Federal Programs Fund $17,940 $17,472 * $20,870 To State and Federal Programs Fund ($471,272) ($420,614) ($417,190) Surplus(Deficit) $19,052 ($323,971) $31,423 Percentage Change Between FY 105.88% -1131.01% 201.44% Fund Balance Beginning of Year $207,237 $531,208 $499,785 Fund Balance at the End of Year $226,289 $207,237 $531,208 Percentage Change Between FY 9.19% -60.99% 6.29% :D si nate..:i b Sins"' ui t Y is endit ..................... 4 $6 ,486; ....... UtdesFgrtaftf:;::; :;. f 89. 1 6 2 $E 2D 307 $�} 7 2. >€J In eslgrlaf' d Perce tage Change Betw,., ,,FY 88 Qt3�ib 7 2$°l4`. *Per the General ledger and the audit report for the general Fund$12,697 was transfered to Drug Law. Per the General Ledger and the audit report for State and Federal Programs$17,472 was transfered to Drug Law. This is a total of$30,169 and according to the audit report for Drug this all came from State and Fereral Programs. Totals used above reflect the two sources as opposed to one source which is belived to be correct. 01/30/98 City of Lansing State and Federal Programs Fund Analysis of Financial Position FY 97 FY 96 FY 95 REVENUES: Approved $16,728,009 $20,843,060 $21,539,400 Received: State Share $1,011,081 $413,785 $1,628,564 Federal Share $4,192,825 $6,664,322 $3,222,323 Other $55,688 $46,090 $0 Total Revenue $5,259,594 $7,124,198 $4,850,887 EXPENDITURES: Central Government $986,034:::: $1,344,244 $1,310,163.::: ....... t r crna C lei i ns : 1 72f $7 t4 5:.. 44......... ...::::::.. Public Safety $1,866 794 $1,876,868 $1,595,760 .. :. .._ . . Per arxnei;Services Highways, Streets, and Sanitation $4,027 $40,777 $0 Recreation and Culture $24,050 $91,688 $265,813 Capital Improvement $2,981,954 $4,507,981 $2,592,048 Total Expenditures $5,862,859 $7,861,558 $5,763,784 Excess Revenues over Expenditures ($603,265) ($737,360) ($912,897) OTHER FINANCING SOURCES (USES):Net $480,164 $662,851 $652,721 Excess(Deficiency) Revenues over Expenditures ($123,101) ($74,509) ($260,176) Fund Balance Beginning of Year $755,654 $830,163 $1,090,339 Fund Balance at the End of Year $632,553 $755,654 $830,163 710 Reserved for FEestf�cte Putpo _ _ .;. 59 ; 34 _ T14 Included in the FY 96 federal revenue total is$3,894,717.70 for the expenses of the Shiawassee St. bridge. 03/16/98 City of Lansing Community Development Block Grant Program Fund Analysis of Financial Position FY 97 FY 96 FY 95 REVENUES.- Federal Share $2,038,093 $2,045,280 $3,005,780 Interest $15,119 $15,714 $14,640 Other $123,561 $204,028 $167,514 Total Revenue $2,176,773 $2,265,022 $3,187,934 EXPENDITURES: Total Expenditures $2,702,773 $3,035,022 $3,252,934 .. ..... 1r5QnnIeC�l1@;; ._:; $83 924 7 : "` 0., Excess Revenues over Expenditures ($526,000) ($770,000) ($65,000) OTHER FINANCING SOURCES (USES) To State and Federal Program Fund ($34,000) ($70,000) ($35,000) From TIFA Capital Commons Phase II $560,000 $840,000 $100,000 Excess(Deficiency) Revenues over Expenditures $0 $0 $0 PRIOR YEAR'S UNEXPENDED BALANCE FROM FY 96 AND FY 97 AS OF 6/30/97 FY 96 FY 97 TOTAL Balance Balance Balance Activity. Rehabilitation (1) $0 $616,258 $616,258 Acquisition (2) $45,115 $0 $45,115 Other (3) $71,311 $256,205 $327,516 TOTALS $116,426 $872,463 $988,889 (1) This category includes Multiple Family, Single Family, Small Business,Weatherization, and LISC & HRC line-item accounts (2) This category includes Acquisition, Relocation, &Clearance Funds budgeted. (3) This category includes Personnel Cost, Public Service Programs, Contingency, and CDBG Operational accounts, etc. 01/30/98 City of Lansing TIFA Capital Commons Phase II Analysis of Financial Position %Change FY 97-96 FY 97 FY 96 FY 95 WORKING CAPITAL ANALYSIS: Total Assets(Cash) $42,082 $34,277 $379,335 Total Liabilities ($1,600) ($1,500) ($1,300) Current Ratio(CA/CL) 26.30 22.85 291.80 Working Capital 33.27% $43,682 $32,777 $378,035 REVENUES: Taxes $588,073 $591,208 $598,285 Interest $10,637 $14,692 $5,002 Total Revenues $598,710 $605,900 $603,287 Dollar Amount Change beween FY's ($7,190) $2,613 ($153,858) Percentage Change Between FY -1,19% 0.43% -20.32% EXPENDITURES: General Government $31,005 $31,158 $29,920 (Legal,Accounting, &Administrative) Dollar Amount Change beween FY's ($153) $1,238 $11,480 Percentage Change Between FY -0.49% 4.14% 62.26% Excess Revenues over Expenditures $567,705 $574,742 $573,367 OTHER FINANCING SOURCES(USES): To Community Development Block Grant ($560,000) ($920,000) ($100,000) To State and Federal Programs Fund $0 $0 ($140,000) Surplus(Deficit) $7,705 ($345,258) $333,367 Percentage Change Between FY 102.23% -203.57% 3051.46% Fund Balance Beginning of Year $32,777 $378,035 $44,668 Fund Balance at the End of Year $40,482 $32,777 $378,035 Percentage Change Between FY 23.51% -91.33% 746.32 01/30/98 City of Lansing TIFA Convention/Exhibltion Hall Analysis of Financial Position %Change FY 97-96 FY 97 FY 96 FY 95 WORKING CAPITAL ANALYSIS: Total Assets(Cash) $603,268 $478,548 $571,077 Total Liabilities ($109,572) ($324,703) ($226,336) Current Ratio(CA/CL) 5.51 1.47 2.52 Working Capital 220.90% $493,696 $153,845 $344,741 REVENUES: Taxes $2,851,407 $2,500,430 $2,731,581 Interest $70,433 $42,349 $157,004 Total Revenues $2,921,840 $2,542,779 $2,888,585 Dollar Amount Change beween FY's $379,061 ($345,806) ($493,223) Percentage Change Between FY 14.91% -11.97% -14.58% EXPENDITURES: General Government $154,979 $128,609 $164,744 (Legal,Accounting, &Administrative) Capital Improvements $196,848 $661,165 $2,417,311 Total Expenditures $351,827 $789,774 $2,582,055 Dollar Amount Change beween FY's ($437,947) ($1,792,281) $2,384,441 Percentage Change Between FY -55.45% -69.41% 1206.62% Excess Revenues over Expenditures $2,570,013 $1,753,005 $306,530 OTHER FINANCING SOURCES(USES): From TIFA Capital Projects Fund $0 $0 $2,335 To TIFA Debt Service Fund ($2,251,528) ($1,886,542) ($3,586,675) Total Other Financing ($2,251,528) ($1,886,542) ($3,584,340) Suplus(Deficit) $318,485 ($133,537) ($3,277,810) Percentage Change Between FY -338.50% -95.93% -421.22% Fund Balance Beginning of Year $264,672 $398,209 $3,676,019 Fund Balance at the End of Year $583,157 $264,672 $398,209 Percentage Change Between FY 120.33% -33.53% -89.17% 03/04/98 Tax Increment Finance Authority - Convention Exhibition Hall Schedule of Remaining Principal and Interest Payments on Existing Debt General TOTAL Obligation Cash Bonds and Fiscal YR Bonds Rents(a) Leases 1998 $1,990,028 $750,000 $2,740,028 1999 $2,848,587 $750,000 $3,598,587 2000 $2,944,748 $750,000 $3,694,748 2001 $3,047,047 $750,000 $3,797,047 2002 $3,149,810 $750,000 $3,899,810 2003 $3,251,460 $750,000 $4,001,460 2004 $3,354,210 $750,000 $4,104,210 2005 $3,465,380 $750,000 $4,215,380 2006 $0 $4,145,000 $4,145,000 2007 $95,000 $4,140,000 $4,235,000 2008 $205,000 $4,140,000 $4,345,000 2009 $320,000 $4,140,000 $4,460,000 2010 $440,000 $4,140,000 $4,580,000 2011 $555,000 $4,145,000 $4,700,000 2012 $685,000 $4,140,000 $4,825,000 2013 $810,000 $4,140,000 $4,950,000 2014 $935,000 $4,140,000 $5,075,000 2015 $1,065,000 $2,840,000 $3,905,000 2016 $5,335,000 $0 $5,335,000 2017 $5,375,000 $0 $5,375,000 2018 $5,375,000 $0 $5,375,000 2019 $5,375,000 $0 $5,375,000 2020 $5,375,000 $0 $5,375,000 $55,996,270 $46,110,000 $102,106,270 (a) On 12/20/94 the Authority entered into a 20 (21-?) year lease contract to assist in financing various parking facilities. In FY 98 thru FY 05 $750,000 per year is to be paid to the Stadium Fund. From FY 06 thru FY 15 cash rentals equal the amount due on FY 90 Parking System debt. While, technically, the parking system is responsible for payment, the underlying premise of this lease is to provide funds for this portion of the Parking System's debt. Also, in FY 15 the amount of FY 90 Debt stands at $4,140,000, by virtue of advance cash rental payments TIFA's obligation is reduced to $2,840,000. 02/03/98 City of Lansing Stormwater Fund Analysis of Financial Position %Change FY 97-96 FY 97 FY 96 FY 95 WORKING CAPITAL ANALYSIS: Cash 199.13% $4,925,268 $1,646,509 $0 Total Current Assets $6,340,529 $3,333,809 $0 Total Current Liabilities ($1,382,597) ($1,619.301) $0 Current Ratio(CA/CL) 4.59 2.06 0.00 Working Capital 189.18% $4,957,932 $1,714,508 $0 REVENUES AND EXPENDITURES ANALYSIS: Total Revenues $5,047,984 $5,230,014 $0 Dollar Amount Change beween FY's ($182,030) Percentage Change Between FY -3.48% ........ ... ... . ... :.:.. ........ .. .:..... : $5 �5€... X.. $46�A 5` Total Expenses $2,245,047 $1,329,756 $0 Dollar Amount Change beween FY's $915,291 Percentage Change Between FY 68.83% �rsont3ef.5erult :::::::.::::::::. as ::.:::::::::::....... ..........................::..:::::::::::::::::.:::::::::::::::.......... . "f'�� .`� R (3::: P...::::..: .:;::::::.:. : :::::::::::: .:..:. ......................:...::::.:.:::::.:::::::::.:::::::::::::.:............: 4Q!l::.:i:::.::.:::i::.::.::::ii:.i:.:ii:.::.::.:::.::.::.i:.iii::::i:.::.::.::.:::ii:.ii::..:'.::.::.:ii:.:ry:.::.i................ •:.�:::::::::•:::::::. ... ::.....:•::::::::.:::::.iiiiiiiii:.::..:...:...::......:iii::ii:::�.:•:::i:::::.::.::.::.: ��''��`i1 !:. �i i :::::�:::::i::::i:::::i: : i: :::'•::':::.,�".:::.::�•..'..::::: ::?::::�:::::. ::i:::::::':'::::::ii:::::::::::�':::C: :::'::'�':: ii:::i :: '':::� ii:i: ::.i:�":�i::i'•:::: ;;:::>;;>;:.;>;: �. :.::r:. :::.::i i::ii:::.:i::i::i::i:i: :i:... .. .I................................................... Excess Revenues over Expenditures $2,802,937 $3,900,258 $0 Dollar Amount Change beween FY's ($1,097,321) Percentage Change Between FY -28.13% OTHER FINANCING SOURCES(USES): Operating Transfer from(to)Combined Sewer Overflow $440,487 ($2,185,750) $0 Surplus(Deficit) $3,243,424 $1,714,508 $0 Percentage Change Between FY 89.18% Fund Balance Beginning of Year $1,714,508 $0 $0 Fund Balance End of Year $4,957,932 $1,714,508 $0 Percentage Change Between FY 189.18% 1. . i > rteumbc�c�.:::.:::.::::...::..................::.:::::::::::.::::::::.:::::::::..$.....�.....:...::.::::::::::.:::::::::::::::�::,:.::::: ::_:::::::::::::::::::.::::::. des ated.Pencenta ::C.Erarr ::: ::>>::> ::::<:::»>:_>: ::::>:»:::::<:::<:<:>............................................ DEBT ANALYSIS: Total Debt $18,098,009 $18,413,070 $0 Dollar Amount Change beween FY's ($315,062) Percentage Change Between FY -1.71% ,: :.:.:>.: :.ffi 15,35t'k. . 1 1 6#fix..;::::`°:: .........:..:. (see long term debt for more detail) 03/04/98 Stormwater Fund Schedule of Remaining Principal and Interest Payments on Existing Debt TOTAL General Obligation Fiscal YR Bonds a 1998 $1,089,481 1999 $1,167,954 2000 $1,273,398 2001 $1,219,909 2002 $1,170,514 2003 $1,112,973 2004 $1,075,267 2005 $1,082,162 2006 $1,078,312 2007 $1,079,100 2008 $1,079,525 2009 $1,074,500 2010 $1,079,143 2011 $1,021,765 2012 $980,784 2013 $916,123 2014 $597,100 2015 $0 2016 $0 2017 $0 2018 $0 2019 $0 2020 $0 $18,098,010 (a) Reflects only Stormwater Fund share of SRL funds. The other half(50%) to be paid from the Sewage Fund. 03/20/98 City of Lansing Stadium Fund Analysis of Financial Position %Change FY 97-96 FY 97 FY 96 FY 95 WORKING CAPITAL ANALYSIS: Cash -8.95% $1,559,778 $1,713,061 $0 Total Current Assets $1,679,068 $1,860,841 $0 Total Current Liabilities ($98,866) ($336,082) $0 Current Ratio(CA/CL) 16.98 5.54 0.00 Working Capital 3.64% $1,580,202 $1,524,759 $0 REVENUES AND EXPENDITURES ANALYSIS: Total Revenues $1,256,991 $881,707 $0 Dollar Amount Change beween FY's $375,284 Percentage Change Between FY 42.56% n ar .s:#vf:Seryrces:::::: .........:...........:...:_.................:..4. ..; o.::::::::::.::.:::::: ,,.1. , 7 .::.::::.:::::.:.........$...........:.:.::::.::: : ::::::::.:::::::::::: E�e.::::::::::::::::::: :::::.::..:::::::::.....:::::::.::::::::.........11:.::::::.....5........:.........................:........:.::,::.::..:::::::::::.:::::::::::::::.:....:.:.::...:......................................... . Interest.: . 4'10:::::.::.; .::;:. $71 6. �';>:> »::::.. $....r... .<::::;:.; ..::::. 2.. ..Total Expenses $1,841,539 $856,948 $0 Dollar Amount Change beween FY's $984,591 Percentage Change Between FY 114.90% 0 57.+1a..... II<:: O....:$ :.::::.::::::::................................. ::::::::::::::::::::::.::::.::.::::: #.E.................................:::$.:::.::::::::::::::.:::::::::::::::::::.:.::.,,:::::::::.:::::::::,.:.:......................:::: ::.�a. . . ....I...............:::::::.:::.::.::...:..,.:....:............:.:...::.:t5.. 8.1a:.;:;:.;:.;;:.;:_;;:.;:.;:.;:.;:.;;:$ 54 E4$.::.::::::................$..QQ�li 4:::::.:::::::::::::::::::.........$.::. ... tstrua6o�..........................::::::::::::::::::....::::::::::.:::::::::::.:.:.:...:.........................................:.:::.::::.:::::::::::::.:::::::::::::::::::::::::.:::.:.................................................:. 4 >:>::<:::<:::»»::>::::>::::: 0'; .... :SOP— ce.............................................................................::.:...II ..73°c::»:.;:<:>;::<::;:::>::>::>:.>:. :; 2� :::::;>::>::;::»::<:<::<::<:>:::<:<$495..:: ,2............:: :.......... .3e........ r�!.............I. ......:::::::.:::::::::::::::.:::::::::::::::::.:.:......::...........:.................................................. ............................. . .. Excess Revenues over Expenditures ($584,548) $24,759 $0 Dollar Amount Change beween FY's ($609,307) Percentage Change Between FY -2460.95% OTHER FINANCING SOURCES(USES): Operating Transfer from TIFA $990,000 $1,500,000 $0 Operating Transfer to LEPFA ($350,009) $0 $0 Surplus (Deficit) $55,443 $1,524,759 $0 Percentage Change Between FY -96.36% Fund Balance Beginning of Year $1,524,759 $0 $0 Fund Balance End of Year $1,580,202 $1,524,759 $0 Percentage Change Between FY 3.64% ............... :�::: ..........::.:::.:::....:.:::... ..::.:::;.......................... ::>::>::::>i::> i> >::<»:::> > :<»::;:::::»»>::»:: 3al..... ese�ved.:for:. rt ur. .....�css.:..:::::::::::::.:::::::::::::::::::;::::::::.:::::.:.......................... .:...:.::.::.:..: :.::.........................:.:. t�51:;::::..:.:::::::::: ...:::>;::::::: . tt8ted:fars6L117sA tl9t1t::..A9t5;; @t3dftUtAS>:.;:.;;::,;:;::>;:>::.>::<::.>s :: ::>:::>;;>::::::>;:::::::::::::::: ....._....................................::.....:..:::::.:::::::::::::::::::::::::::::::: :::::::::. a:::..:.:.Y.:::: .::. .::: ::::::.:::::.:......................................::.::::::.:.:::::.:::::::::::::::::::::::::::.:::::.:.............................:::::.::::::::::::..:. .:..:.....:..:.:.:.....::....:...............:...................:::::::::::::.::::::: ...::::::::::::::::.::::::::::::::::. . :::>::>::::>t3::: es ....:...$8 ...,2.::::::.::::::::::::::::: ;f.s:: �4 :::::::.:....:.........: .::::::: ...... . ::: :: ..... f.40$ at�d Pergentage:Change;Qe veers F'Y ... .: ::.::::::::. .::. ..:.:.:.:9.t lib. ..... DEBT ANALYSIS: Total Debt $19,753,476 $15,951,617 $0 Dollar Amount Change beween FY's $3,801,859 Percentage Change Between FY 23.83% ...:..::..:.:.::::::::::.::.... ... .::,::.t.....: :. .:::. :.:. .:. . :::::::..::::::::...:..................................:::.:.::.:::::::.::.:..:::::::::::::::::::::::::::::::.:::::::::::.:::::::::::::::::.:....:..:.................:::::.:::::...:.. '92 F...: ... :.:.:. (see long term debt for more detail) 03/04/98 Stadium Fund Schedule of Remaining Principal and Interest Payments on Existing Debt TOTAL Stadium Lease/Pur Fiscal YR Agreement 1998 $1,529,646 1999 $1,529,646 2000 $1,529,646 2001 $1,529,646 2002 $1,529,646 2003 $1,529,646 2004 $1,529,646 2005 $1,529,646 2006 $1,529,646 2007 $1,529,646 2008 $1,529,646 2009 $1,529,646 2010 $1,397,726 2011 $0 2012 $0 2013 $0 2014 $0 2015 $0 2016 $0 2017 $0 2018 $0 2019 $0 2020 $0 $19,753,476 01/30/98 City of Lansing Principal Shopping District Fund Analysis of Financial Position FY 97 FY 96 WORKING CAPITAL ANALYSIS: $36,469 $0 Cash Total Current Assets $36,469 $0 Total Current Liabilities ($25,521) $0 Current Ratio (CA/CL) 1.43 Working Capital $10,948 $0 REVENUES AND EXPENDITURES ANALYSIS: Total Revenues $389,586 $0 Total Expenses $411,138 $0 ».... O . ..a 5............................:...:..::.:::::::::::::::.:::.::::::::::..:.:..................::::::::::.:::::::::::....:::::.:::xf : : : :::::::::::.: l� r::#an: ::::::::::::::.::.:.............::.::.::::::::::::::.::::::::::::::::::::::........:..:::::::::::::::::::::::::::.:::: .:...:..;:.:::::::::::..:::: ......:::::::::::.............:.::::::::::::::..:: t:> WIMP M: Excess Revenues over Expenditures ($21,552) $0 OTHER FINANCING SOURCES(USES): Operating Transfer from General Fund $32,500 $0 Surplus (Deficit) $10,948 $0 Fund Balance Beginning of Year $0 $0 Fund Balance End of Year $10,948 $0 Fut3d.lalance Rerveti: .r..:).num........... .... ............:::::.:::::::: . ..........: .. ........::::::::::::::::::::.:.:.::: ::::::::::::.:.:: 4:< a�e �:rated::far ubse went:.ear :>e a;nit................. . ........ ........ :.::.:::.::.:.:..................:............:.:.::::::::::::::::::::::::::: :. .:::::: .:::::::::::::: :..............:.. ::.:: . ::"s...:::..:..........:... ::: . ..::..:.:.............:.:..:::::::::::::: ::::::::: ..:::. .:::::::::::: ...:. ......... :.. :::::::::::::.:::::::: .::.:::::::::: . ...... :..::............ ndes�gn�t�ci ;; .::.::::::::::::: : .:::..::,::::::.:::::::::::::::::::::._:.::............. ...... Account 101-0-494000 (PSD Aciivity Permit) is showing a balance of $2,080.00 1 believe this should have been reclassified to the proper account in the 298 Fund. INTERNAL SERVICE FUND Y } ttiG CITY of LANSING PUBLIC SERVICE GARAGE FUND The public service garage fund accounts for the revenues and costs related to acquiring and maintaining trucks and equipment utilized by the Public Service Department on a cost reimbursement basis. This operation rents equipment to other Public Service funds including Act 51,Recycling, Refuse, Stormwater, etc. in an amount sufficient to maintain the equipment and in an amount sufficient to generate cash for replacement upon expiration of the useful life. Note that equipment rented to Act 51 are governed by state mandated rental rates. In FY 97 operating revenues increased by 30.3% ($726,466), from $2,396,771 in FY 96 to $3,123,237 in FY 97. This increase is attributable increased rental rates and to a correction in billings. Operating expenses increased 9.7% ($274,743), from$2,840,680 in FY 96 to $3,115,423 in FY.97, primarily attributable to a 29.7% ($243,173) increase in personnel costs. Net income was $10,447, compared to losses of$288,447 and$76,786 in FY 96 and 95 respectively. Retained earnings increased 7.1% ($233,630), to $3,544,198. Working capital increased by 296% ($1,077,059) to $1,440,699. While such indicators are heartening it is difficult to conclude that this fund is healthy without reviewing anticipated future equipment replacement needs within projected revenues and expenses. 03/19/98 City of Lansing Public Service Garage Fund Analysis of Financial Position %Change FY 97-96 FY 97 FY 96 FY 95 WORKING CAPITAL ANALYSIS: Total Cash 558.59% $1,404,108 $213,198 $993,878 WORKING CAPITAL: Total Current Assets $1,734,245 $440,107 $1,202,574 Total Current Liabilities ($293,546) ($76,467) ($66,460) Working Capital 296.19% $1,440,699 $363,640 $1,136,114 REVENUES AND EXPENDITURES ANALYSIS: Operating Revenues 30.31% $3,123,237 $2,396,771 $2,493,706 Operating Expenses 9.67% $3,115,423 $2,840,680 $2,773,154 ... ....::.;.::: ......... . Re .nne[;Services . 296710 $l�tl8?817.'..;::':::.:: $899;f44::> ::::`#: $947* 9 p arm so.cif., vial►s and� ces.. ..:'.:'`;::::`:::':,:.'..`:':,:.;::. ...... f�`�: $7�j�4�`::: >`<.,:. . :: $8 7 .::.::>`:;::..::::.....:..��'F��a P :.. .. ilipriatlon:.. ........... : 1� }t#; 1� ,Elat3, �p........ . .....:..: ::5.69 9/0 .... ..:$3:.267, 6�a _ - Operating Income(Loss) 101.76% $7,814 ($443,909) ($279,448) OTHER FINANCIAL: Disposition of Equipment $2,633 $155,462 $202,662 Transfer from State and Federal Programs $0 $0 $0 Net Income(Loss) 103.62% $10.447 ($288,447) ($76,786) Retained Earnings 7.06% $3,544,198 .$3,310,568 $3,375,832 Contributed Capital-City $1,213,302 $1,213,302 $1,213,302 Contributed Capital-State Government $118,043 $341,225 $564,408 Contributed Capital $0 $0 $0 Total Contributed Capital $1,331,345 $1,554,527 $1,777,710 Total Fund Equity 0.21% $4,875,543 $4,865,095 $5,153,542 ASSET AND LIABILITY ANALYSIS: Fixed Assets Property, Plant and Equipment $3,520,147 $4,516,719 $4,117,428 Long Term Liabilities Accrued Compensated Absences 458.85% $85,303 $15,264 $100,000 FIDUCIARY FUNDS YPNSI NG �t a� CITY of LANSING TRUST and AGENCY FUNDS This category of funds accounts for funds held by the city in a trustee capacity, or as an agent for individuals, private organizations, other governments, and/or other funds. The city manages seven such funds. The first two funds presented are the Employees Retirement System and the Police & Fire Retirement System. Both systems are defined benefit plans. Both funds are managed by boards comprised of a combination of employees elected to the board to represent members, and designated city officials and outside representatives. Both funds are monitored by an actuarial consultant who evaluates fund performance on an annual basis. We have included individual analytical pages for review by interested parties. However, as these funds are evaluated annually we leave the assessment to the city actuary who concluded, on page A-9 of the Fifty-Sixth Annual Actuarial Valuation of the Employees' Retirement System, and on page A-8 of the Fifty-Third Annual Actuarial Valuation of the Police & Fire Retirement system, that: "Based upon the results of the valuation and the principles of level percent-of-payroll financing, we conclude that the retirement system is in very good actuarial condition, contingent upon continued receipt of recommended contributions." The third fund in this category is the Employees Money Purchase Pension Plan, the "defined-contribution retirement plan" that covers all elected, exempt, city and district court teamsters hired on or after approximately September 1, 1990 (actual dates vary by membership category), and FOP 911 members hired after May 31, 1993. Beyond noting that the city contributes 5% of individual employees gross earnings to retirement and an additional 1% to retirement health care there is little to report on this fund. The fourth fund accounts for deferred compensation contributions made by employees. Nothing to report. The fifth fund is the Cemetery Perpetual Care Fund. This fund receives 15% of lot sales for investment. Interest earnings are transferred to the Cemetery Fund to provide maintenance. In FY 97 revenue from investments fell 33% ($26,771), from $80,993 in FY 96 to $54,222 in FY 97. As a reference point the cost of grounds maintenance at the cemeteries was $156,311 in FY 97. The sixth fund is Parks Nonexpendable Trust Fund. Total assets are$81,250 including land and building valued $80,000. In our review we were informed that much of this land and the building was taken by the Lansing Building Authority as part of the 1990 parking expansion program and is now a parking lot directly across from the stadium. While the parking system leases this land we are told, but have not confirmed, that the property was taken without compensation. Income on rent and investments is transferred to the Parks Expendable Trust Fund. In FY 97 this was $8,740, restricted for use in accordance with the original trust. The seventh fund is the Parks Expendable Trust Fund. By our count this fund includes 12 different trusts, and again funds are restricted to use in accordance with the original trust. Total income in this fund was $41,656 in FY 97, including the transfer from Parks Nonexpendable Trust, all interest earnings. The assets of this fund totaled $689,956 at FY 97 year-end, all equity in pooled cash. No expenditures were made from this fund in the FY 96 or 97. 03/19/98 City of Lansing Retirement System Funds Analysis of Financial Position Employee's Retirement System %Change FY97-96 FY97 FY96 FY 95 ASSET ANALYSIS: Total Assets Pre-Fair Market Value Reporting $112,001,756 $102,787,285 $92,498,623 Percentage Change Between FY 8.96% 11.12% 0.30% Net appreciation in investments reported at FMV 1) $29,604,801 $0 $0 Total Assets Fair Market Value 37.77% $141,606,557 $102,787,285 $92,498,623 Pension Payments as a Percentage of Assets 5.62% 7.52% 8.16% REVENUES AND EXPENSES ANALYSIS: Operating Revenue before FMV apprec. -4.87% $17,839,856 $18,754,043 $8,350,478 Operating Revenue $47,444,657 ..y�........................n.::.....:::::::::.:.:::..,..............................................................................$ a�. .......................... 4 t77 ::::>::::<:::>::::>::>::>::::>:::<::<::: 34€ .. :::......:....................................................:.:..:.::.:::::::::::::::::::::::::::::::::::::::::::::::::::.�::::::::.: ::.::::.I:::.::::::.:...:::.....:...................T.................................. .......,......... .•. ..:.:::.:..::::.:.::::::•::•::.:.....::: ::iiiiii ...:.,........:....:: �. .. .. .� .:... ....................... i ................................................................................................................ i " ........................................ :::::::....:::::::::::......:.....:::::::::>::::>: »:Iftt8leSt' ttfl `1t <::': : : >: : :: :' : t: ::z::: :;:.:...::::.;:::::; .. >..:..',: ":;>' `'? ?,: .;:.;..;.:.:.;..;: ........::.;:.::.;:.:.;.;:.;<.;:::::::::::::::::.:.:::::::...............:.:.::�a98+s3�1......:::::.:.. $�.r, 8� !i :..:.:..::.:::..:... 4�3 :::..::.:..::.................. :::::::::::::....:..:.::.:::. . .:.::.::..::::::::.......::..:.,:::::..:.::::::.:.:::::...............................4{. ..................................:: :.:.::::::::::::::::::::::.�:::::::::::.:::::::::::::::::::::::::::::::::::::::::::::::::::v...:v....::.:.:...4.::::.:::::.::...�.......:.:.-.:::.................}................................. .................t. 6 .. 9t �atiDn•,.,.::.::.:::.:,::::tit F ;:;:::::'::::<.<::::<::::<::::::::::::::::::::::::::::::::::....::::::::>`:::::: ' .::::::>::: :: r:::::>::>>:::;:;:;:::>�:::;:? ��';:3::>::>:::::>:':>:::?: �::> ;�:::<: ':>: f.......................................................................................................... Operating Expenses 5.46% $8,656,329 $8,208,193 $8,371,146 ........ ..... thv2str, ent Mari etiAetit.i 9es :::>::.>::::>::::>:::>::....'43.1; %<::;:..._.....:....:.: B58 7�J;:..::::`;:<...:'..:..:.. 4t 32A4..::::'::: ::,...:...: . 788 860.< .::::::.:::::::::::::::.:::::..::::...::...................................................................... ......................................... .......,................................. .................. :.....::.:.:::::::::::.::::......:::.:::::::::::::.:::::::::::.:.:.::::::::::::.:::::::+:::::::::::::::::::::::::::.::::::.:.:::.::::::::::..:::::::::::::::::::::::::::::::::::::::::.. ...........:...:PAY!?!e[11s ::::.::.:::::.,::...::::::::::::::.:::::::::::::: ..:.:::.: $::� 64 :::$.::� +J�r.34 .::::::::.::...:::.:: �t.:::: , ::.: Net Operating Income(Loss) $38,788,328 $10,545,850 ($20,668) Fund BalancQ Beginning of Year $102,565,568 $92,019,718 $92,040,386 Fund Balance at the End of Year 37.82% $141,353,896 $102,565,568 $92,019,718 :: 4..........:.......�C IS 7".i"i�'�'J................:............................ ...... .... ry a( ccumul De�c>i;. ...::.:.:.:::;;::.:::.:..::.::.;:.;;;:.::.::.;::.;;:.;:.;:;::<. $ss:.:..:.:.....:..: f ,? i� :X....::.::.::.::.:;:{ 5 ,tr �. 1) This is the first year the Governmental Accounting Standards Board(GASB)required compliance with Statement#25, which requires all defined benefit pensions to be reported at Fair Market Value of Assets, not at historical cost. The external audit report only reported the current year with no comparision to prior years. For us to restate prior years would require an extreme amount of time and technical assistance. 03/19/98 City of Lansing Retirement System Funds Analysis of Financial Position Police and Fire Retirement System Fund %Change FY97-96 FY97 FY96 FY 95 ASSET ANALYSIS: Total Assets $169,045,647 $154,274,746 $138,040,725 Percentage Change Between FY 9.57% 11.76% 1.44% Net appreciation in investments reported at FMV 1) $46,389,547 $0 $0 Total Assets Fair Market Value 39.64% $215,435,194 $154,274,746 $138,040,725 Pension Payments as a Percentage of Assets 6.45% 6.51% 6.60% REVENUES AND EXPENSES ANALYSIS: Operating Revenue before FMV apprec. -2.50% $26,663,451 $27,346,856 $11,822,498 Operating Revenue $73,052,998 : rt7pk?yee:GORfTIExa#ron$ C''':: `.':: .:'. ::..': Y+jTi it:. fi,4N't;'cJ4!R . �RFJ +JW. �Y4 .. ......... .:.....::......... .. y�� � y �r ,/� :'..,`'`:::::::::i3>::::::.`:::::i:::::::;:::: '''V47CY 7.: ::':: +IYGI ,W:.:::..:....... �Yi.7�V,CV .: , ;... ... .....r.:..:.:::.::..:::.::.:... .. i%i. Gbr�trrbuGcn .:.;; ::a::%:`':::Ga::iir>:;:a. :.":. . B5t aid-ESlult S.. ::>.. 7 E18�935::.. 7 '. 62. ..... ::>::::::::::::::::::::::::::::::::.....::::::>::::::::>i:i::i ......:........... (us${vR'Sale of Ertxe$t *:: ;<: .... .$E84+371.::::>::::::::>::>::>:;::::;$ .Q380::<:<::>:>:.<:: ::>'::.':}$3 ,$1.�' . ... T. .... ........ ..... ..............................................:.......... ......... ....., i........................ [ ..�. :.: :: ::.::::.::::::.... .....::..................................................................::::.�::::::::::::::.f.::.::..::............::....................................:..............v..::::::::.:::::::::::: :.�:::. -. anon..n.[nvaafingrtts::at::;'+if1l «<<;:>:>:<:»:>:«::»<:>»:»:»:::>:<::»>:> $4i3 `::7si [<[ :`<':<......:>:>:>:> >>» Operating Expenses 8.97% $11,896,858 $10,917,933 $10.113,567 ........ 1 ve tmertt Man�ge:rner�t Few::>: .:,..:. ` >:>' $?�%:::., '. $44, $ 31: :.`:: .. .:. $ ,815 .......::... " �noirt iaj?ntens :<::::;:>::::<:::. 47°hi fO�89 , ... ii;Q44,#1 $�3 :9. , . Net Operating Income(Loss) $61,156,140 $16,428,923 $1,708,931 Fund Balance Beginning of Year $153,947,386 $137,518,463 $135,809,532 Fund Balance at the End of Year 39.73% $215,103,526 $153,947,386 $137,518,463 Retdd.:':>:'>:::`: ,,:::;::::>::::>::::>::>s:>::>::»::?::::>?;::>::>:...,.: ..... :. :. ¢F �y `. 16 7Z337; ...>:.::'.>:::. ....:::.:�:.:�::::::::::.�n :. :: ................................ ... 3ntfutd.iGtlttllllAf�d:©eficli >< : '; 2 f 1 Z441' $27;206 87+4 ......... .....f...........:.................... .::..:.:.:.:.:......................:. ............:::.—...:::...... . ........ ..:.......::::::.::.:::.: .:..F:.:.::. ....:..�:. i....:..................1 1) This is the first year the Governmental Accounting Standards Board(GASB)required compliance with Statement#25, which requires all defined benefit pensions to be reported at Fair Market Value of Assets, not at historical cost. The external audit report only reported the current year with no comparision to prior years. For us to restate prior years would require an extreme amount of time and technical assistance. o3/09/98 City of Lansing Retirement System Funds Analysis cf Financial Position Employee's Money Purchase Pension Plan Fund %Change FY97-96 FY97 FY96 pY 95 AaaETAN4LYom: Total Assets 26.49% $4.190.465 $3.312.998 u2.e45.732 Pension Payments asa Percentage ofAssets 2.83% 2.11% 3.01% REVENUES AND EXPENSES ANALYSIS: Operating Revenue 34.01v* $1.010.493 $754.019 $652.491 Operating Expenses 53.34% $133.026 $86.758 $93.e16 Net Operating Income(Loss) $877.487 $667.266 $558.675 Fund Balance Beginning ufYear $3.312.988 $2.645.732 $2.087.057 Fund Balance at the End ofYear 26,4ev6 $4.190.465 $3.312.998 u2.645.732 03/20/98 City of Lansing Cemetery Perpetual Care Fund Analysis of Financial Position FY97 FY96 FY 95 ASSET ANALYSIS: Assets Cash and Investments $1,424,616 $1,396,427 $1,383,829 Receivables $8,513 $20,022 $21,471 Total Assets. $1,433,129 $1,416,449 $1,405,300 REVENUES AND INVESTMENTS: Revenue from Investments $54,222 $80,993 $72,689 Transfer from Cemetery Fund(15%Lot Sales) $16,680 $11,149 $9,280 Transfer to Cemetery Fund(Investment earnings) ($54,222) ($80,993) ($72,689) Increase in assets $16,680 $11,149 $9,280 Fund Balance,beginning of year $1,416,449 $1,405,300 $1,396,020 Fund Balance,end of year $1,433,129 $1,416,449 $1,405,300 City of Lansing Parks Expendable Trust Fund Analysis of Financial Position FY97 FY96 FY 95 ASSET ANALYSIS: Assets Cash $68,956 $648,300 $598,964 Total Assets. $68,956 $648,300 $598,964 REVENUES AND INVESTMENTS: Revenue from Investments $33,186 $40,660 $28,668 Transfer from Parks Nonexpendable Trust Fund $8,470 $8,676 $8,625 Increase in assets $41,656 $49,336 $37,293 Fund Balance,beginning of year $648,300 $598,964 $561,671 Fund Balance,end of year $689,956 $648,300 $598,964 SUPPLEMENTAL INFORIVIATION Sl c H , P CITY OF LANSING INTERNAL AUDIT TO: Council President Beal, and Councilmembers FROM: Arnold C. Yerxa, Principal Auditor C9/1K DATE: November 26, 1997 SUBJECT: LEPFA Financial Statements FY ending June 30, 1997 At the direction of City Council I have reviewed the financial statements of the Lansing Entertainment and Public Facilities Authority (LEPFA) for the fiscal year ending 6/30/97. This report is intended to highlight items of historical interest to councilmembers and other interested parties. Internal Audit is available to review this report and respond to questions as requested. In accordance with the City Charter a copy of this report has been filed with the Mayor and City Clerk's office. I. REVENUES The Authority's internally generated revenues (exclusive of city subsidy) increased by$1,053,903 (30.4%) in FY 97. The following table shows the breakdown of increases or(decreases) by fiscal year. Fiscal Total Amount Year Revenues Inc (Dec) Percent 1997 $4,517,971 $1,053,903 30.4 1996 3,464,068 (17,879) 0.5 1995 3,481,947 1,943,593 126.3 1994 1,538,354 (94,830) 5.8 The dominant increases came from Building Rentals posting an increase of$185,053 (17.6%), Food Services posting an increase of$398,817 (19.3%),Equipment Rental posting an increase of $121,955 (77.9%) Box Office and Labor/Service posting increases of$211,336 and $101,621 respectively, and Trade Show Utilities posting an increase of$16,952 (15.4%). II. EXPENSES The Authority's expenses increased by$826,590 (19.1%) in FY 97. The following table shows the breakdown of increases and (decreases) by fiscal year. Fiscal Total Amount Year Expenses Inc (Dec) Percent 1997 $5,165,933 $ 826,590 19.1 1996 4,339,343 305,478 7.6 1995 4,033,865 1,637,532 68.3 1994 2,396,333 130,290 5.7 This increase is attributable to Personnel Services $372,154 (26.8% ), Concessions and Catering $145,870 (9.8%), Professional Services $110,772 (68.9%) Marketing $133,746 (298.4%) Repairs and Maintenance $80,296 and Supplies and Materials $96,159 (106.4%) as the dominant sources. III. LIQUIDITY and SOLVENCY The Authority's Retained Earnings increased by $586,229 (584.3%) in FY 97. The following table shows the breakdown of increases or(decreases) by fiscal year. Total Days of Fiscal Retained Amount Operating Year Earnings Inc (Dec) Percent Expenses 1997 $ 686,604 $ 586,229 584.3 48.5 1996 100,375 (314,949) 75.8- 8.8 1995 415,324 61,692 17.4 37.6 1994 353,632 (196,739) 36.0 53.9 Retained Earnings as of 7-1-97, $686,604, constitute 13.3% of FY 97 expenditures and reflect an operating reserve of about 48.5 days. During FY 96 the $100,000 Capital Reserve account was depleted to assist in funding expenses incurred in the transition process. Under the terms of the Authority's operating agreement , $50,000 is to be restricted each year for capital improvements and/or replacement. All funds so designated in FY 97 were expended, leaving a zero balance as of June 30, 1997. Under an amendment to the operating agreement an Event Development Fund was established, to provide a source of monies from which to finance events at Oldsmobile Park. The initial contribution from the City of Lansing was $53,330 and as of June 30, 1997 the balance was $17,830. As a benchmark, Internal Audit has compared the Authority's financial position at 6-30-97 to a position of a $100,000 capital reserve (capital equipment replacement) account plus 30 days of operating cash. While the exact reserves preferred are debatable, the fact is that the Authority's reserves are $162,104 (30.9%) more than the benchmark. The Current Ratio, a measure of the ability of the entity to meet financial obligations(ie. Current Assets divided by Current Liabilities), is reflected in the following table. Fiscal Current Current Current Year Ratio Assets Liabilities 1997 1.29 $1,254,903 $ 972,572 1996 .75 521,945 691,597 1995 1.22 572,301 467,323 1994 1.29 414,754 321,187 IV. FINANCIAL INDICATORS The Authority's coverage of expenses with internally-generated revenues increased to 87.5% in FY 97. The following table shows the breakdown by fiscal year. Fiscal Total Percent Year Expenses Covered 1997 $5,165,933 87.5 1996 $4,339,343 79.8 1995 $4,033,865 86.3 1994 $2,396,333 64.1 City subsidy as a percent of total revenue increased to 19.0% in FY 97. The following table shows the breakdown by fiscal year. Fiscal City Percentage Year Subsidy Total Revenue 1997 $1,092,679 19.0 1996 550,800 13.7 1995 599,500 14.7 1994 650,000 29.7 This is the result of an increase in intemally-generated revenues of$1,053,903.offset by a increase of$541,879 in subsidy. In F Y 96 the subsidy of$550,800 was for the operation of the Lansing Center. In F Y 97 the subsidy is $756,800 for the Lansing Center, $210,879 for Oldsmobile Park, ($180,000 for Stadium Operations and $30,879 for Ice Skating Program), and $125,000 for the City Market, totaling $1,092,679. Additional City subsidies totaling $139,130 are detailed in an attached Schedule at the end of this report. V. AUDIT COMMENTS From the Management letter memorandum is the following statement, "During our audit, we noted that the portion of the monthly Lugnuts lease payments which are due to the Authority ... are not recorded until payment is received. In keeping with accrual accounting practices, the portion of the payment due to the Authority at the end of the reporting period should be recorded as income in the current period with a corresponding receivable". This will not affect the opinion of the Audit report but will be reviewed during the next audit engagement. c.c. Mayor,City Clerk, Peter C. Sullivan,President&CEO LEPFA LANSING ENTERTAINMENT AND PUBLIC FACILITY AUTHORITY STATEMENTS OF FINANCIAL POSITION FOR PERIODS ENDING JUNE 30, 1997 AND JUNE 30 1996 CHANGE % CHANGE 1997 ]996 INC (DEC) INC(DEC OPERATING REVENUES: BUILDING RENTAL $1,239,392 $1,054,339 $185,053 17.55% FOOD SERVICES 2,468,364 2,069,547 398,817 19.279/o EQUIPMENT RENTAL 278,361 156,406 121,955 77.97% BOX OFFICE 211,336 0 LABOR/SERVICE 101,621 0 TRADE SHOW UTILITIES 127,064 110,112 16,952 15.40% OTHER 91,833 73,664 18,169 24.66% TOTAL OPERATING REVENUE $4,517,971 $3,464,068 $1,053,903 30.42% OPERATING EXPENSES: PERSONNEL SERVICES $1,758,855 $1,386,701 $372,154 26.84% CONCESSIONS/CATERING 1,627,967 1,482,097 145,870 9.84% COMMUNICATIONS 36,931 28,120 8,811 31.33% RENTS AND LEASES 49,400 36,435 12,965 35.58% PROFESSIONAL SERVICES 271,490 160,718 110,772 68.92% UTILITIES 610,956 591,452 19,504 3.30% MARKETING 178,562 44,816 133,746 298.43% REPAIRS AND MAINTENANCE 117,154 80,296 36,858 45.90% SUPPLIES AND MATERIALS 186,567 90,408 96,159 106.36% INSURANCE 115,264 98,879 16,385 16.57% DEPRECIATION 133,365 109,032 24,333 22.32% OTHER EXPENSES 68,032 55,212 12,820 23.22% BAD DEBT EXPENSE 11390 0 MANAGEMENT TRANSITION 0 175,177 (175,177) TOTAL OPERATING EXPENSES $5,165,933 $4,339,343 $826,590 19.05% OPERATING LOSS ($647,962) ($875,275) $227,313 25.97% NONOPERATING REVENUES (EXPENSES): INTEREST INCOME $16,753 $10,633 $6,120 57.56% LOSS ON DISPOSAL OF EQUIPMENT (8,414) (1,107) (7,307) 0.66% GRAND OPENING EXPENSES (7,559) 0 ($7,559) OTHER NONOPERATING REVENUE 1,602 0 1,602 NONOPERATING REVENUES-NET $2,382 $9,526 ($7,144) NET LOSS BEFORE OPERATING TRANSFERS ($645,580) ($865,749) $220,169 25.43% OPERATING TRANSFERS: ANNUAL OPERATING SUBSIDY $1,092,679 $550,800 $541,879 98.38% EVENT DEVELOPMENT FUND $53,330 $0 $53,330 GRAND OPENING $5,400 $0 $5,400 OTHER TRANSFERS $80,400 $0 $80,400 TOTAL TRANSFERS $1,231,809 $550,800 $681,009 123.64% NET INCOME(LOSS) $586,229 ($314,949) $901,178 286.13% RETAINED EARNINGS, BEGINNING OF YEAR $100,375 $415,324 ($314,949) 'ETAINED EARNINGS, END OF YEAR $686,604 $100,375 $586,229 1 LEPFA SUPPLEMENTAL SUBSIDIES AS OF JUNE 30, 1997 Vend. Item Amount LEPFA event fund Event Development $53,330 LEPFA Grand Opening Expenses $5,400 Diamond Classic/All Star Event expenses $10,868 LEPFA Trophy Cases $5,100 Colorado Silver Bullets Contract Guarantee $5,000 Park Inn International Lodging Silver Bullets $1,054 Covermaster Turf Cover $21,863 Wolohan Lumber Plywood cover for Infield $9,116 Rogers Turf Mgt Contract 4/15-6/15/97 $3,000 Metal Frames, Inc. 36 Padlocks $888 MSU Scott Breckner Ticket Sales Spec events $9,500 Harc Mercantile Electrical Equipment $2,759 Board Water & Light Utilities City Share $6,375 KPMG Peat Marwick Extra Audit Work $3,600 Ameritech Stadium Phone Charges $1,277 TOTALS $139,130 A- !EFERRED TO THE COMMfTTEE CITY of LANSING Internal Audit Interoffice Communication TO: Council President Beal, Councilmembers, & Mayor Hollister FROM: Greg Koessel, Internal Auditor DATE: October 20, 1997 SUBJECT: Seven Year Road Rehabilitation Program In accordance with Article 3, Chapter 402 of the Lansing City Charter Internal Audit submits their audit of the above-captioned subject. It is our opinion that the attached reconciliations accurately portray the status of this program as of September 16, 1997. The figures provided below are cumulative commencing on July 1, 1996. TOTAL AUTHORIZED $21,848,725 TOTAL APPROPRIATED $19,355,269 TOTAL EXPENDED $9,649,782 TOTAL ENCUMBERED $4,562,756 BALANCE AVAILABLE $7,636,187 In conducting this audit we included a review of adopted budgets for FY 96, 97, and 98, supplemental appropriations occuring in mid-year as they relate to this program, a review of purchase orders issued against appropriate line-items, and a sample of payments made against the purchase orders issued. In addition we relied upon the expertise of the City Engineer to explain and clarify items of confusion, and we thank him for his time and effort. Attached to this summary are four worksheets. The first worksheet delineates totals approved and expended by fiscal year. The sole difference between the top and bottom tables is in the expenditure column. The top table reflects expenditures in the year they were actually incurred,while the bottom table identifies how much of each years appropriations have been expended. The second, third, and fourth attachments provide a detailed analysis by each fiscal year of this program, those being FY 96,97, & 98 respectively. These worksheets detail the same information as the first attachment, except that all columns detail activity by funding source such as Act 51, CDBG, etc. When reviewing these worksheets please be advised that the City of Lansing has little influence and no ultimate authority over the amount of funds received in the 273 and 593/414 funds. Any difference in those two funding sources between amount approved and amount received simply reflects the difference between what was originally estimated and the amount ultimately allocated to the city. In regard to the Fiscal Year 1998 funding allocations we note the following items of interest and clarification. First, as of 9-16-97,$2,300,000 has yet to be appropriated. This amount includes $1,700,000 from FY 97 residual General Fund dollars. Also, federal Surface Transportation Project funds have yet to be allocated to individual jurisdictions. Again, as described in the preceeding paragraph, the actual amount received is likely to be at least somewhat different than estimated. Second, note that in the FY 98 budget policies and priorities the original stated goal was $7,420,000 for road rehabilitation. As of 9-16-97 the cumulative amount approved by city council is $7,221,375, a difference of$198,625. Whether this difference is a significant concern we leave to the consideration of the policy makers (please note that in the last week, some time after our cutoff date, the cumulative amount approved by city council for FY 98 increased to $7,309,507, a difference of$110,493 under the original stated goal). Third, included in the FY 98 authorized amount is $500,000 to be derived from anticipated land sales. This source is considered to be a somewhat"soft", or less certain figure and will require revisiting throughout the fiscal year. Fourth, council resolutions pertaining to reconstruction of Cavanaugh and Mt. Hope Roads require the identification of$178,013.49 to fund costs that might otherwise be paid through special assessments. This matter is under the purview of the Council Committee on Ways and Means. In accordance with the City Charter a copy of this report has been filed with the City Clerk and the Mayor's Office. Working papers supporting these conclusions are retained in the Internal Audit Office. Internal Audit is available to review this report and respond to questions as requested. 1 ui14iV t CITY OF LANSING Seven Million for Seven Years Road Reconstruction Funding Cumulative Totals AS OF09/16/97 By Actual Fiscal Year of Expenditure AMOUNT APPROPRIATED PERIOD APPROVED /RECEIVED EXPENDED ENCUMBERED FY 96 7,604,958 7,398,310 1,624,736 N/A FY 97 7,022,392 7,035,584 5,922,778 N/A FY 98 71221,375 4,921,375 1,899,764 4,562,756 Totals As At 06/30/97 As Of 09/16/97 21,848,725 19,355,269 9,447,278 4,562,756 AS OF09/16/97 By Fiscal Year as Appropriated AMOUNT APPROPRIATED PERIOD APPROVED /RECEIVED EXPENDED ENCUMBERED FY 96 7,604,958 7,398,310 6,734,964 N/A FY 97 7,022,392 7,035,584 2,712,314 N/A FY 98 7,221,375 4,921,375 0 4,562,756 Totals As of 09/16/97 21,848,725 19,355,269 9,447,278 4,562,756 CITY OF LANSING Seven Million for Seven Years Road Reconstruction Fundin FY 1996 FYE JUNE 30, 199 FUND AMOUNT APPROPRIATED NUMBER NAME APPROVED /RECEIVED DIFFERENCE EXPENDED 2021203 Act 51 2,072,133 2.071.054 (1,079) 481,918 252 CDBG 100,000 100,000 0 48,074 273 St&Fed 986,500 0 (986,500) 0 403 Trans Bond - 0 0 0 0 404 Spec Assessment 22,653 22,653 0 ' 0 410 Capital Projects 3,162,530 3,162,530 0 1,094.744 593/414 CSOProject 1,261,142 688,000 (573,142) 0 Totals 7,604,958 6,044,237 (1,560.721) 1,624,736 FYE JUNE 30 1997 202/203 Act 51 N/A 0 (1,079) 1,589,136 252 CDBG N/A 0 0 4,924 273 St&Fed DIF ABOVE 908,802 (77,698) 738,382 403 Trans Bond N/A 0 0 0 404 Spec Assessment N/A 0 0 22,000 410 Capital Projects N/A 0 0 1,827.838 593/414 CSOProject DIF ABOVE 445,271 (127,871) 688,000 Totals 0 1,354.073 (206,648) 4,870,280 FYE JUNE 30, 1998 202/203 Act 51 N/A 0 0 0 252 CDBG N/A 0 0 0 273 St&Fed N/A 0 0 0 403 Trans Bond N/A 0 0 0 404 Spec Assessment N/A 0 0 0 410 Capital Projects N/A 0 0 239,948 5931414 CSOProject N/A 0 0 0 Totals 0 0 0 239,948 Cumulative Totals FY 1996 202/203 Act 51 2,072,133 2,071,054 (1,079) 2.071,054 252 CDBG 100,000 100,000 0 52,998 273 St&Fed 986,500 908,802 (77,698) 7.38,382 403 Trans Bond 0 0 0 0 404 Spec Assessment 22,653 22,653 0 22,000 410 Capital Projects 3,162,530 3,162,530 0 3,162,530 593/414 CSOProject 1,261.142 1,133,271 (127,871) 688,000 Totals 7,604,958 7,398,310 (206,648) 6.734,964 CITY OF LANSING Seven Million for Seven Years Road Reconstruction Funding FY 1997 FYE JUNE 30, 1997 FUND AMOUNT APPROPRIATED UMBER NAME APPROVED /RECEIVED DIFFERENCE EXPENDED 2021203 Act 51 2,464,392 2,447.508 (16,884) 1,014,980 252 CDBG 100,000 100,000 0 37,518 273 St&Fed 600,000 734,800 134,800 0 403 Trans Bond - 0 0 0 0 404 Spec Assessment 0 52,576 52,576 0 410 Capital Projects 3,258,000 3,258.000 0 0 593/414 CSOProject 600,000 442,700 (157.300) 0 Totals 7,022,392 7,035,584 13,192 1,052.498 FYE JUNE 30, 1998 202/203 Act 51 N/A 0 (16.884) 599,539 252 CDBG N/A 0 0 0 273 St Ued DIF ABOVE 0 134,800 0 403 Trans Bond N/A 0 0 0 404 Spec Assessment N/A 0 52,576 30,675 110 Capital Projects N/A 0 0 1,029,602 :i93/414 CSOProject DIF ABOVE 0 (157,300) 0 Totals 0 0 13,192 1,659,816 Cumulative Totals FY 1997 202/203 Act 51 2,464,392 2,447,508 (16,884) 1,614.519 252 CDBG 100,000 100,000 0 37,518 273 St BFed 600,000 734,800 134,800 0 403 Trans Bond 0 0 0 0 404 Spec Assessment 0 52,576 52,576 30,675 410 Capital Projects 3,258,000 3.258,000 0 1,029,602 593/414 CSOProject 600.000 442,700 (157,300) 0 Totals 7,022,392 7,035,584 13,192 2,712,314 CITY OF LANSING Seven Million for Seven Years Road Reconstruction Funding FY 1998 FYE JUNE 30, 199 FUND AMOUNT APPROPRIATED NUMBER NAME APPROVED /RECEIVED DIFFERENCE EXPENDED 202/203 Act 51 2.040,000 2,040,000 0 0 252 CDBG 100,000 100,000 0 0 273 St &Fed 600,000 0 (600,000) 0 403 Trans Bond 70,500 70,500 0 0 404 Spec Assessment 0 0 .0 0 410 Capital Projects 4,410,875 2,710,875 (1,700,000). 0 593/414 CSOProject 0 0 0 0 Totals 7,221,375 4,921,375 (2,300,000) 0 Cumulative Totals FY 1998 202/203 Act 51 2,040,000 2,040,000 0 0 252 CDBG 100,000 100,000 0 0 273 St&Fed 600,000 0 (600,000) 0 403 Trans Bond 70,500 70,500 0 0 404 Spec Assessment 0 0 0 0 410 Capital Projects 4,410,875 2,710,875 (1,700,000) 0 593/414 CSOProject 0 0 0 0 Totals 7,221.375 4,921,375 (2,300,000) 0 CITY of LANSING Internal Audit Interoffice Communication TO: Councilmember President Beal, & Councilmembers FROM: Greg Koessel,Internal Auditor DATE: December 1, 1997 SUBJECT: BWL FY 97 Audited Financial Statements At the direction of City Council I have reviewed the financial statements of the Board of Water&Light for the fiscal year ending 6-30-97. This report is intended to highlight items of historical interest to councilmembers and other interested parties. A more detailed technical review is best, and most appropriately, directed to BWL Staff. Also, please note that this year BWL financial staff computed and provided us with an analysis of six different financial indicators (attached),including ratio analysis of liquidity, efficiency, and profitability. In prior years this material was prepared by Internal Audit. We thank them for their assistance and cooperation. In summary, the BWL had, from a financial perspective, a respectable year. This assessment is, however, made in the absence of comparing year-end results to any financial goals for the year, and/or to the financial position preferrable at year-end to achieve expressed goals in subsequent years. INCOME The following tables reflects both dollar and percent change in both operating income and net income on an annual basis for the past two years. Figures presented in paranthesis reflect a reduction compared to the prior year. Operating income is income generated by operating assets excluding non-operational items such as interest income and bonded debt expense. Net income is THE bottom line, all sources of income net of all expenses. Fiscal Year 1997 1996 1995 Operating Income $12,569,802 $21,199,401 $8,643,900 $ Change (8,629,599) 12,555,501 3,400,562 % Change (41%) 145% 65% Net Income $15,884,542 $24,748,606 $11,788,295 $ Change (8,864,064) 12,960,311 4,867,579 % Change (36%) 110% 70% CASH BALANCES The analysis from the BWL provides a list of cash balances maintained by the Board at 6-30-97. These are described below in the order listed in the analysis. 1. Investments: This category, reflecting a balance of$16,567,093, includes $9,901,294 for use as Workers Compensation Self Insurance reserve, uninsured losses in environmental liability, and property damage self insurance; $3,628,170 for the purpose of overstocking coal to prevent shortages in the event of a coal or freight strike; and $3,007,629 for future water system expansion. 2. Current Restricted: This category, reflecting a balance of$24,119,074, includes $21,440,440 required by bond resolution to have on deposit, at months end,the operating and normal non-bond capital expenditures for the following month, and $2,678,634 required by bond resolution for payment of the current portion of bond principal and interest. 3. Capital Project Funds: This category reserves funds for the following year's anticipated capital projects. At 6-30-97 this reserve totalled $22,066,562. The anticipated capital needs as forecast in the BWL six-year capital program are$29,307,000. 4. Non-Current Restricted-Bond: This category reserves funds in the amount of $9,679,641 to pay bond principal and interest when due, and to reserve any unspent bond proceeds for their original purpose. Included in this category is $5,270,384 restricted for payment of costs of the 1994 bonded projects and costs of issuance of the 1994 revenue bonds; $4,388,801 to cover"the maximum annual principal &interest requirement for the outstanding 1994 & 1989 revenue bonds"; and$20,456 to enable the BWL to rebate arbitrage investment earnings to the federal government. ANALYSIS of KEY INDICATORS Within the analysis provided by the BWL are indicators pertaining to measures of liquidity, efficiency, and profitability. Liquidity measures the ability of the firm to meet future obligations, primarily those due in the up-coming year,without having to compromise the firm's financial position. Efficiency measures how effectively the firm manages its assets for the purpose of generating revenue. Profitability measures the firm's ability to generate profits. By computing these measures the results may be compared to prior year's results to identify trends, and may be compared to industry-wide measures for the purpose of ascertaining the firm's financial position relative to the industry as a whole. Based on the analysis provided the liquidity position of the BWL is strong and has increased from the prior year reflective of the increase in cash achieved in FY 97. In the absence of a catastrophic event the Board should experience no difficulty in meeting current obligations. WATER&LIGHT HOMETOWN PEOPLE. HOMETOWN POWER. P.O. Box 13007 123 W. Ottawa Street Lansing, MI 48901-3007 517-371.6000 October 21, 1997 TO: Board Commissioners FROM: Dana W. Tousley, Treasurer/Controller SUBJECT: Fiscal 1997 Board of Water and Light Audit Report Summary Net Income decreased $8.9 million(-35.8%) in fiscal 1997 compared to fiscal 1996. Revenues were down$2.3 million(-1.4%) and expenses increased $6.3 million(4.3%) in the same period. Operating Expenses Fuel and purchased power expenses at $79.4 million, increased 1.9% due to higher sales. Operating expenses, excluding fuel and purchased power, at $56.6 million increased 4.7%. Total operating expense and depreciation was $154.0 million, up 4.3% from last year. Net Income and Cash Flow Revenue and other income of $171.8 million and operating and other expense of$155.9 million yield a net income of$15.9 million, a 35.8% decrease compared to FY 96. Cash inflows (on cash basis) of $37.2 million less capital expenditures of$31.5 million, debt service of$1.3 million and payment to the City of Lansing of$6.1 million resulted in a negative cash flow of$1.7 million. This cash was available from cash reserves. Balance Sheet Total assets fell 4.1%to $416 million. Debt service coverage remains high at 13.4 times. The debt to asset ratio is a modest 8.5%. Debt to equity is also very low at 9.3%. The BWL paid the City of Lansing $6.1 million as a return on equity in June 1997. This is down 2.4% from last fiscal year. This amount is also 9.2% greater than projected in 1992 when the current agreement was signed. This is a short summary of the highlights for fiscal 1997. This year Kellie Willson and I are working with the City's Internal Auditor to assist in his review of the BWL audit for Council Members. LANSING BOARD OF WATER AND LIGHT Analysis of Financial Statements Fiscal Years Ended June 30 1997, 1996, 1995 INC/(DEC) FY 1997 FY 1996 FY 1995 FY97-FY96 REVENUE&EXPENSE Operating Revenue 166,549,235 168,890,674 169.317,552 (2,341,439 Operating Expense 153,979,433 147,691,273 150,673,652 6,288,160 Operating Income 12,569,802 21,199,401 8,643,900 (8,629,599 Net Other Income/Expense 3,314,740 3,549,205 3,144,395 234.465 Net Income 15,884,542 24.748,606 11,788.295 8,864.064 CASH FLOW Cash from Operations 25,544,533 33,267,979 17,517,357 (7,723,446 Cash from Capital and/or Financing (31,439.184) (28,312,696) (32,287,241) (3,126,488 Cash from Non-Capital Financing 46,917 (237,468) 22,870 284,385 Cash from Investing Activities 8,341.001 (927,941) 9,540,028 9,268,942 Increase/ Decrease in Cash 2,493 267 3,789,874 5,206.986 1,296,607 CASH BALANCES Investments-Coal, Environmental` 16,567,093 15,762,050 12,020,029 805,043 Current Restricted-O&M 24,119,074 21,625,810 17,835,936 2.493,264 Capital Projects• 22,066,562 25,945,695 22,269,031 (3,879,133 Non-Current Restricted-Bond 9,679,641 10,837,946 12.876,648 1,158,305 Total Cash Balances 72,432,370 74,171,501 65,001,644 (1,739,131 *Only these investments can be considered cash reserves. The restricted funds are required by bond resolUtic n. .tUIDITY Current Ratio (times) 4.3 3.9 3.6 0.4 Quick Ratio (times) 3.4 2.9 2.6 0.5 Net Working Capital $53,290,030 $49,703.229 $43,484,475 $3,586,801 Current Liab./Inventory (times) 1.4 1.1 1.2 0.3 Equity/Current Liab. (times) 22.3 20.2 19.5 2.1 E u' /Total Liabilities times 6.5 4.1 4.0 2.4 EFFICIENCY Average Collection Period (days) 29.5 28.2 28.1 1.3 Assets/Revenue$ $2.50 $2.57 $2.52 ($0.07 Revenue / Working Capital$ $3.13 $3.40 $3.66 ($0.27 Accounts Payable/Revenue$ $0.06 $0.06 $0.06 $0.00 PROFITABILITY(based on net Income) Income/Revenue (Margin%) 9.5% 14.7% 7.4% -5.2 Income/Assets (ROA%) 3.8% 5.7% 2.9% -1.9 Income/Equity ROE% 4.4% 7.1% 3.7% -2.7 DWT 10/20/97 CITYFY97.WK4 The measures of efficiency and profitability are, overall, only marginally changed from last year. In the absence of comparable industry standards or goals adopted by the BWL I cannot offer any great insight. In a general sense my conclusion is that the indicators offer no cause for concern, and that the figures presented,while marginally down from FY 96, are still better than those presented for FY 95 DEBT Long-term debt(amounts required to be paid more than one year into the future) decreased from $34,605,394 in FY 96 to $33,369,206 in FY 97, a decrease of$1,236,188 (3.6%). Official debt remains low constituting 8% of total assets and 9.3% of total equity. In FY 96 the percentage figures were 8% of total assets and 9.9 % of equity. However, debt reported in the financial statements excludes the Belle River contract. From 1998 thru 2019 the debt service payment required adds an additional $234,107,383 to the BWL debt load, bringing total debt to $267,476,589. By including the Belle River contract the debt-to-assets and debt-to-equity ratios rise to 64.3% and 74.2% respectively. BELLE RIVER CONTRACT In FY 97 the BWL recognized expenses of$41,832,002 to purchase power under the terms of the contract. This figure includes debt service, fixed operating costs, and costs for fuel, other operating costs, and transmission costs related to the amount of power actually purchased. In FY 97 this expense constituted 31% of all operating expenses excluding depreciation. From 1998 to 2019 it is estimated that the BWL will pay$534,370,961 for fixed operating costs and debt service relating to this contract, not including those costs identified above relating to the amount of power actually purchased in a given year (estimated to be 156 megawatts annually). TRANSACTIONS WITH THE CITY In FY 97 the BWL paid to the City$6,160,220; $6,069,006 as Return On Equity and $91,214 for sewerage charges. Accordingly, the City paid the BWL $6,383,815; $5,357,668 for water, electric, and steam services and $1,026,147 for sewerage bill collection fees.