HomeMy WebLinkAbout2025 - BWL Audited Financial Statements Lansing Board of Water and Light
IN
P.O.Box 13007
1201 S.Washington Ave.
Hometown People. Hometown Power: Lansing,MI 48912
Electronic Delivery
November 21, 2025
Chris Swope, City Clerk
City of Lansing
124 W. Michigan Avenue, 91" Floor
Lansing, MI 48933
RE: Annual Audit for Fiscal Year Ending June 30, 2025
Dear Mr. Swope:
Attached please find the Board of Water and Light's electronic consolidated
Audited Financial Statements for the fiscal year ending June 30, 2025.
Respectfully submitted,
.Ca`UeUa.1.J add
Corporate Secretary
PDF Attachment
Electronic Copy:
Andy Schor, Mayor City of Lansing
Dick Peffley, General Manager
Heather Shawa,Assistant General Manager
LBWL Commissioners
Lansing City Council President, Ryan Kost,and Councilmembers
Charles Randall,City of Lansing Internal Auditor
REAF
Hometown People. Hometown Power.
Lansing Board of Water & Light - City of
Lansing, Michigan
Financial Report
With Additional Information
June 30, 2025 and 2024
Lansing Board of Water & Light - City of Lansing, Michigan
Table of Contents
June 30, 2025 and 2024
Page
Independent Auditors' Report 1
Required Supplementary Information (Unaudited)
Management's Discussion and Analysis 4
Basic Financial Statements
Statements of Net Position 7
Statements of Revenues, Expenses and Changes in Net Position 9
Statements of Cash Flows 10
Statements of Fiduciary Net Position - Pension and OPEB Trust Funds 12
Statements of Changes in Fiduciary Net Position - Pension and OPEB Trust Funds 13
Notes to Financial Statements 14
Required Supplementary Information (Unaudited)
Schedule of Changes in the BWL's Net Pension Asset and Related Ratios 51
Schedule of Employer Contributions to the Net Pension Asset 52
Schedule of Changes in BWL's Net OPEB Liability(Asset) and Related Ratios 53
Schedule of Employer Contributions to the Net OPEB Liability (Asset) 54
Notes to Required Supplementary Information 55
Supplementary Information
Income Available for Revenue Bond Debt Retirement 62
Detail of Statements of Revenues and Expenses 63
Detail of Statements of Changes in Net Position 64
Detail of Statements of Fiduciary Net Position - Pension and OPEB Trust Funds 65
Detail of Statement of Changes in Fiduciary Net Position - Pension Trust and OPEB Funds 66
`@9
bakertitty
Independent Auditors' Report
To the Honorable Mayor, Members of the City Council and Commissioners of
Lansing Board of Water and Light
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the business-type activities and fiduciary activities of the Lansing
Board of Water and Light (BWL), as of and for the years ended June 30, 2025 and 2024, and the related
notes to the financial statements, which collectively comprise the BWL's basic financial statements as listed in
the table of contents.
In our opinion, the accompanying financial statements referred to above present fairly, in all material respects,
the financial position of the business-type activities and fiduciary activities of the BWL as of June 30, 2025
and 2024, and the changes in financial position and, where applicable, cash flows for the years then ended in
accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audits in accordance with auditing standards generally accepted in the United States of
America (GAAS) and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States (Government Auditing Standards). Our
responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of
the Financial Statements section of our report. We are required to be independent of the BWL and to meet
our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions. The financial statements of the fiduciary activities were not audited in accordance with
Government Auditing Standards.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance
with accounting principles generally accepted in the United States of America; and for the design,
implementation and maintenance of internal control relevant to the preparation and fair presentation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or
events, considered in the aggregate, that raise substantial doubt about the BWL's ability to continue as a
going concern for twelve months beyond the financial statement date, including any currently known
information that may raise substantial doubt shortly thereafter.
Baker Tilly Advisory Group, LP and Baker Tilly US, LLP,trading as Baker Tilly,are members of the global network of Baker Tilly
International Ltd.,the members of which are separate and independent legal entities. Baker Tilly US, LLP is a licensed CPA firm that
provides assurance services to its clients. Baker Tilly Advisory Group, LP and its subsidiary entities provide tax and consulting services
to their clients and are not licensed CPA firms.
1
Auditors'Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our
opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is
not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will
always detect a material misstatement when it exists. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations or the override of internal control. Misstatements are considered
material if there is a substantial likelihood that, individually or in the aggregate, they would influence the
judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such procedures
include examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the BWL's internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that
raise substantial doubt about the BWL's ability to continue as a going concern for a reasonable
period of time.
We are required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit, significant audit findings and certain internal control-related matters
that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the required
supplementary information, as listed in the table of contents be presented to supplement the basic financial
statements. Such information is the responsibility of management and, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board who considers it to be an
essential part of financial reporting for placing the basic financial statements in an appropriate operational,
economic or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of America, which
consisted of inquiries of management about the methods of preparing the information and comparing the
information for consistency with management's responses to our inquiries, the basic financial statements, and
other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
2
Supplementary Information
Our audits were conducted for the purpose of forming opinions on the basic financial statements as a whole.
The supplementary information as listed in the table of contents is presented for purposes of additional
analysis and is not a required part of the basic financial statements. Such information is the responsibility of
management and was derived from and relates directly to the underlying accounting and other records used
to prepare the basic financial statements. The information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and certain additional procedures, including comparing
and reconciling such information directly to the underlying accounting and other records used to prepare the
basic financial statements or to the basic financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our opinion, the
supplementary information is fairly stated in all material respects, in relation to the basic financial statements
as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated October 3, 2025
on our consideration of the BWL's internal control over financial reporting and on our tests of its compliance
with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose
of that report is solely to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the BWL's
internal control over financial reporting or on compliance. That report is an integral part of an audit performed
in accordance with Government Auditing Standards in considering the BWL's internal control over financial
reporting and compliance.
gW4eA-
Madison, Wisconsin
October 3, 2025
3
Lansing Board of Water & Light - City of Lansing, Michigan
Management's Discussion and Analysis
June 30, 2025 and 2024
This section explains the general financial condition and results of operations for the Lansing Board of
Water& Light(BWL). The BWL includes the consolidated operations of the electric, water, steam and
chilled water utilities. The notes to financial statements following this section are essential reading for a
complete understanding of the financial and operational results for the years ended June 30, 2024 and
2025.
Overview of Business
The BWL owns and operates an electric system which generates, purchases and distributes electric
energy to approximately 99,600 retail customers in the greater Lansing area, and wholesale customers
through participation in the Midcontinent Independent System Operator, Inc. (MISO), which is BWL's
regional electric grid. The BWL generated 60% of its retail and wholesale sales from existing generation
assets. Additional electric generation was supplied through BWL's membership in the Michigan Public
Power Agency, which includes BWL's partial ownership of Detroit Edison's Belle River Plant, through
MISO, and renewable energy purchase power agreements. The BWL maintains a diversified generation
portfolio which includes wind and solar. The combination of current and planned renewable energy
generation puts BWL on a path to meet state legislative requirements of 50% renewable energy by 2030
as well as move towards its own internal goal of carbon neutrality by 2040.
The BWL owns and operates water wells, a raw water transmission system, water conditioning facilities
and an extensive water distribution system serving potable water to approximately 58,100 residential,
commercial and industrial customers in the greater Lansing area.
The BWL owns and operates steam generation boilers, a steam transmission and distribution system
serving 139 customers. The BWL's chilled water facility and distribution system serves 19 customers in
the City of Lansing.
Capital Expenditures
Capital expenditures are driven by the need to replace, expand, or maintain the generation, transmission,
and distribution systems of the BWL to meet customer utility needs and to maintain a high level of service
reliability. The BWL invests essentially all revenues not paid out for operations and maintenance
expense, nonoperating expenses, or debt service back into capital improvements for its water, electric,
steam and chilled water systems. Gross capital expenditures were $202.8 million in fiscal year 2025,
$191.3 million in fiscal year 2024 and $112.2 million in fiscal year 2023.
The BWL generally pays the cost of its capital improvements from internally generated funds; however,
revenue bonds are issued from time to time to support large projects or special needs, such as
construction of generation facilities.
Detailed financial information for the separate utilities of water, electric, steam and chilled water can be
found in the Supplemental Information section of this financial report.
4
Lansing Board of Water & Light - City of Lansing, Michigan
Management's Discussion and Analysis
June 30, 2025 and 2024
Condensed Financial Information (Dollars in Millions)
As of June 30 %Change %Change
2025 2024 2023 2024 to 2025 2023 to 2024
Assets
Utility plant $ 1,398.3 $ 1,273.9 $ 1,183.3 % 9.8 % 7.7
Current assets 373.5 340.3 306.2 9.8 11.1
Other assets 311.5 426.7 167.0 (27.0) 155.5
Total assets 2,083.3 2,040.9 1,656.5 2.1 23.2
Deferred outflow of resources 19.7 11.8 26.8 66.9 (56.0)
Liabilities
Long-term liabilities 1,187.2 1,167.3 824.4 1.7 41.6
Other liabilities 148.5 141.5 113.9 4.9 24.2
Total liabilities 1,335.7 1308.9 938.3 2.0 39.5
Deferred inflow of resources 16.9 21.0 32.1 (19.5) (34.6)
Net position
Net investment in capital assets 408.9 389.6 381.4 5.0 2.1
Restricted for debt service 70.1 80.0 48.1 (12.4) 66.3
Restricted for pension 8.7 6.5 5.0 32.3 30.0
Restricted for OPEB 80.3 85.0 74.6 (5.5) 13.9
Unrestricted 182.5 161.7 203.7 12.9 (20.6)
Net position $ 750.5 $ 722.8 $ 712.9 % 3.8 % 1.4
Capital expenditures in FY2025 exceeded depreciation, impairments and retirements thereby increasing
Utility plant assets by$124.4 million. Current Assets increased by$33.2 million primarily due to an
increase in cash and investments, Other Assets decreased by$115.2 million primarily due to drawdown
of 2024A revenue bonds fund. Deferred Outflows increased by$7.9 million primarily due to higher
projected healthcare costs for the OPEB retirement plan. Total liabilities increased by$26.8 million
primarily driven by a higher environmental remediation liability. Deferred Inflows decreased by$4.1 million
primarily due to changes of assumptions within the OPEB retirement plan.
Capital expenditures in FY2024 exceeded depreciation, impairments and retirements thereby increasing
Utility plant assets by$90.6 million. Current Assets increased by$34.1 million primarily due to funding of
2024A bonds capitalized interest and cash recovery associated with fuel and environmental remediation
costs. Other Assets increased by$259.7 million primarily due to issuance of 2024A bonds. Deferred
Outflows decreased by$15.0 million primarily due to higher investment returns on OPEB retirement plan.
Total liabilities increased by$370 million driven by the 2024A series bond issuance. Deferred Inflows
decreased by$11.1 million primarily due to amortization of prior changes within the OPEB retirement
plan.
For the Year Ended June 30 %Change %Change
2025 2024 2023 2024 to 2025 2023 to 2024
Result of operations
Operating revenue $ 468.4 $ 417.4 $ 448.9 % 12.2 % (7.0)
Operating expense 415.4 387.9 406.2 7.1 (4.5)
Nonoperating expense-net (25.4) (19.6) (26.6) 29.6 (26.3)
Changes in net position $ 27.6 $ 9.9 $ 16.1 % 178.8 % (38.5)
5
Lansing Board of Water & Light - City of Lansing, Michigan
Management's Discussion and Analysis
June 30, 2025 and 2024
The $51.0 million increase in FY2025 operating revenue is primarily driven by increases in electric
wholesale as a result of higher market prices and sales volume. The $27.5 million increase in FY2025
operating expense is attributable primarily to increased fuel costs of$23.3 million, increased
administrative and general costs of$4.9 million, and increased Return on Equity of$2.0 million, offset by
decreased operational and maintenance costs of$2.7 million.
The $31.5 million decrease in FY2024 operating revenue is primarily driven by decreases in electric
wholesale as a result of decreased market prices and sales volume. The $18.3 million decrease in
FY2024 operating expense is attributable primarily to the net result of decreased fuel costs of
$33.9 million, increased administrative and general costs of$9.7 million and increased transmission and
distribution costs of$5.9 million.
Budget
The BWL Commissioners approved a $338.5 million operating expense budget(excluding depreciation
and Return on Equity)for FY2025. Actual expenses (excluding depreciation and Return on Equity)were
$318.9 million. The capital expenditure budget, net of customer contributions in aid of construction, was
$187.6 million for FY2025, and actual net capital expenditures were $195.7 million.
Financing Activities
During 2023, the BWL was authorized to issue $32,220,000 of Drinking Water State Revolving Fund
(DWSRF) revenue bonds, of which the first$20,000,000 is eligible for principal forgiveness. As of
June 30, 2025, $28,590,875 has been drawn down. The total amount the BWL expects to be financed by
project completion or upon disbursement of the total authorized amount is $12,220,000. The total amount
to be repaid as of June 30, 2025 is $8,590,875.
In January of 2024, $364,625,000 of Utility System Revenue and Revenue Refunding Bonds, Series
2024A, were issued for the purposes of paying costs for system improvements, capitalized interest,
tendering a portion of 2019B bonds, and refunding a portion of 2013A bonds.
Contacting Management
The financial report is intended to provide a general overview of the BWL's finances and to demonstrate
accountability for the funds it administers. Questions about this report should be submitted to Lansing
Board of Water and Light, P.O. Box 13007, Lansing, Michigan 48901-3007.
6
Lansing Board of Water& Light-City of Lansing, Michigan
Statements of Net Position
June 30,2025 and 2024
2025 2024
Assets
Current Assets
Restricted cash and investments(Notes 2 and 3) $ 92,638,741 $ 101,353,712
Cash and investments(Notes 1 and 2) 90,782,942 50,954,526
Designated cash and investments(Notes 1 and 2) 94,430,067 89,256,997
Accounts receivable, net(Note 1) 49,175,782 50,807,763
Estimated unbilled accounts receivable(Note 1) 22,768,968 23,567,761
Inventories(Note 1) 20,102,028 18,423,558
Prepayments(Note 1) 3,654,910 5,963,382
Total current assets 373,553,438 340,327,699
Other Assets
Restricted assets:
Net pension asset(Note 8) 8,646,252 6,479,599
Net OPEB asset(Note 8) 80,308,338 84,992,538
Restricted cash and investments(Notes 2 and 3) 144,247,959 259,946,436
Recoverable environmental remediation(Note 6) 52,492,879 20,853,276
Recoverable energy asset(Note 6) 5,858,054 26,154,048
Special deposit(Note 1) 17,644,728 25,230,262
Other(Note 1) 2,274,002 3,080,515
Total other assets 311,472,212 426,736,674
Utility Plant(Notes 1 and 4)
Water 396,343,074 380,759,488
Electric 1,334,862,264 1,278,077,851
Steam 101,724,692 100,366,159
Chilled water 34,105,305 34,105,305
Common facilities 139,081,975 131,931,308
Total plant in service 2,006,117,310 1,925,240,111
Less accumulated depreciation 852,321,134 793,981,863
Net plant in service 1,153,796,176 1,131,258,248
Construction in progress 244,531,511 142,601,832
Total utility plant 1,398,327,687 1,273,860,080
Total assets 2,083,353,337 2,040,924,453
Deferred Outflows of Resources
Bond refunding loss being amortized(Note 1) 1,456,198 1,703,891
Pension deferred outflows(Note 8) - 204,912
OPEB deferred outflows(Note 8) 18,300,807 9,881,923
Total deferred outflows of resources 19,757,005 11,790,726
See notes to financial statements
7
Lansing Board of Water& Light-City of Lansing, Michigan
Statements of Net Position
June 30,2025 and 2024
2025 2024
Liabilities and Net Position
Current Liabilities
Accounts payable $ 96,242,700 $ 88,906,185
Accrued payroll and related taxes 5,171,456 6,514,032
Customer deposits 3,354,208 3,521,026
Accrued compensated absences(Note 1) 6,920,515 6,581,232
Accrued interest 58,984 57,774
Current portion of long-term debt(Note 5) 766,153 777,438
Current liabilities payable from restricted assets:
Current portion of long-term debt(Note 5) 13,495,000 13,890,000
Accrued interest 22,529,392 21,298,139
Total current liabilities 148,538,408 141,545,826
Compensated Absences, Net of Current Portion(Note 1) 7,018,163 7,730,937
Other Long-Term Liabilities
Workers'compensation(Note 12) 1,700,000 2,200,000
Environmental remediation liability(Note 9) 46,056,766 16,098,612
Arbitrage rebate requirement(Notes 4 and 12) 4,403,955 -
Other 6,417,042 9,320,770
Total other long-term liabilities 58,577,763 27,619,382
Long-Term Debt, Net,Less Current Portion(Note 5) 1,121,605,301 1,131,994,669
Total liabilities 1,335,739,635 1,308,890,814
Deferred Inflows of Resources
Revenue intended to cover future costs(Note 6) 4,398,098 6,343,647
Pension deferred inflows(Note 8) 744,696 -
OPEB deferred inflows(Note 8) 11,770,821 14,634,723
Total deferred inflows of resources 16,913,615 20,978,370
Net Position(Note 1)
Net investment in capital assets 408,931,543 389,625,738
Restricted for debt service 70,109,349 80,055,573
Restricted for pension 8,646,252 6,479,599
Restricted for OPEB 80,308,338 84,992,538
Unrestricted 182,461,610 161,692,547
Total net position $ 750,457,092 $ 722,845,995
See notes to financial statements
8
Lansing Board of Water & Light - City of Lansing, Michigan
Statements of Revenues, Expenses and Changes in Net Position
Years Ended June 30, 2025 and 2024
2025 2024
Operating Revenues (Note 1)
Water $ 61,455,925 $ 55,757,309
Electric 385,524,610 341,976,263
Steam 14,691,575 12,785,927
Chilled water 6,775,779 6,915,341
Total operating revenues 468,447,889 417,434,840
Operating Expenses
Production:
Fuel, purchased power and other operating expenses 162,042,369 138,777,452
Maintenance 21,288,260 22,732,499
Transmission and distribution:
Operating expenses 13,841,237 14,757,338
Maintenance 23,522,155 23,933,835
Administrative and general 98,253,370 93,398,015
Return on equity (Note 7) 28,057,140 26,028,591
Depreciation (Note 1) 68,414,785 68,302,725
Total operating expenses 415,419,316 387,930,455
Operating income 53,028,573 29,504,385
Nonoperating Income (Expenses)
Investment income 18,181,899 14,264,806
Other expense (2,323,228) (1,480,080)
Bonded debt interest expense (40,773,265) (32,361,141)
Other interest expense (502,882) (35,748)
Total nonoperating income (expenses), net (25,417,476) (19,612,163)
Net income (changes in net position) 27,611,097 9,892,222
Net Position, Beginning 722,845,995 712,953,773
Net Position, Ending $ 750,457,092 $ 722,845,995
See notes to financial statements
9
Lansing Board of Water & Light - City of Lansing, Michigan
Statements of Cash Flows
Years Ended June 30, 2025 and 2024
2025 2024
Cash Flows From Operating Activities
Cash received from customers $ 486,405,880 $ 413,044,418
Cash paid to suppliers (223,267,028) (206,579,720)
Cash paid to employees (92,865,169) (77,075,359)
Return on equity(Note 7) (28,057,140) (26,028,591)
Cash from customer deposits (166,818) (2,102,068)
Other interest expense (475,376) (35,748)
Net cash flows from operating activities 141,574,349 101,222,932
Cash Flows From Capital and Related Financing Activities
Planned, bonded, and annual construction (190,030,684) (142,913,213)
Principal payments on debt (14,667,438) (14,004,724)
Proceeds from new borrowings net of premium received 8,590,875 360,835,763
Principal payments on subscription-based IT arrangements (3,425,213) (3,538,950)
Interest on debt (44,012,199) (29,463,795)
Net cash flows from capital and related financing activities (243,544,659) 170,915,081
Cash Flows From Investing Activities
Proceeds from the sale and maturity of investments 171,911,917 99,919,225
Interest received 16,679,975 10,315,739
Purchase of investments (38,566,382) (270,547,587)
Net cash flows from investing activities 150,025,510 (160,312,623)
Net change in cash and cash equivalents 48,055,200 111,825,390
Cash and Cash Equivalents, Beginning 204,968,623 93,143,233
Cash and Cash Equivalents, Ending $ 253,023,823 $ 204,968,623
See notes to financial statements
10
Lansing Board of Water & Light - City of Lansing, Michigan
Statements of Cash Flows
Years Ended June 30, 2025 and 2024
2025 2024
Reconciliation of Cash and Cash Equivalents to
Statement of Net Position
Restricted cash and investments $ 92,638,741 $ 101,353,712
Cash and investments 90,782,942 50,954,526
Designated cash and investments 94,430,067 89,256,997
Noncurrent restricted cash and investments 144,247,959 259,946,436
Total cash and investments 422,099,709 501,511,671
Less noncash investments (169,075,886) (296,543,048)
Cash and cash equivalents, ending $ 253,023,823 $ 204,968,623
Reconciliation of Operating Income to Net Cash
From Operating Activities
Operating income $ 53,028,573 $ 29,504,385
Adjustments to reconcile operating income to net cash from
operating activities:
Other nonoperating (3,636,927) (2,813,134)
Depreciation 68,414,785 68,302,725
Sewerage collection fees 1,313,699 1,333,054
Other interest expenses (475,376) (35,748)
Decrease (increase) in assets:
Accounts receivable (Note 1) 1,631,981 (7,696,106)
Unbilled accounts receivable (Note 1) 798,793 (1,199,620)
Inventories (1,678,470) 1,301,532
Other postemployment benefits asset and deferrals (6,598,586) (11,793,398)
Special deposit 7,585,534 6,103,761
Net pension asset (2,166,653) (1,470,501)
Prepayments 2,301,378 (852,225)
Regulatory asset (31,639,603) (913,318)
(Decrease) increase in liabilities and deferred
outflows/inflows of resources:
Accounts payable and other accrued expenses 34,905,621 13,570,246
Customer deposits (166,818) (2,102,068)
Net pension asset deferrals 949,608 1,431,149
Deferred inflows, energy cost adjustments 18,350,445 5,985,384
Other (1,343,635) 2,566,814
Total adjustments 88,545,776 71,718,547
Net cash provided by operating activities $ 141,574,349 $ 101,222,932
Noncash Capital and Financing Activities
Increase (decrease) in noncash investment valuations $ 5,878,373 $ 3,949,067
Subscription-based IT arrangements $ 751,683 $ -
Amortization of bond premium $ 4,471,397 $ 3,757,493
Bond proceeds placed directly to escrow in refunding $ - $ 45,634,991
See notes to financial statements
11
Lansing Board of Water & Light - City of Lansing, Michigan
Statements of Fiduciary Net Position -
Pension and OPEB Trust Funds
June 30, 2025 and 2024
2025 2024
Assets
Receivable, investment interest receivable $ 815,712 $ 14,641
Participant notes receivable 3,422,732 3,532,182
Cash and cash equivalents 25,768,448 28,368,369
Investments at fair value:
Mutual funds, bonds 100,482,077 96,482,199
Mutual funds, equity 364,809,221 333,580,797
Real estate trust investment 40,244,890 42,233,893
Self-directed brokerage account:
Equity securities/stocks 18,377,421 12,507,716
Certificates of deposit(negotiable) - 100,039
Mutual funds, equity 827,483 598,099
Total assets 554,747,984 517,417,935
Liabilities
Trade payable, due to broker/other 812,171 317,309
Reimbursement for benefits paid by employer 5,011,279 2,448,357
Net position, held in trust for pension
and other employee benefits $ 548,924,534 $ 514,652,269
See notes to financial statements
12
Lansing Board of Water & Light - City of Lansing, Michigan
Statements of Changes in Fiduciary Net Position -
Pension and OPEB Trust Funds
Years Ended June 30, 2025 and 2024
2025 2024
Increases
Investment income:
Net appreciation in fair value of investments $ 45,644,769 $ 44,546,231
Interest and dividend income 10,024,968 9,769,087
Net investment income 55,669,737 54,315,318
Employer contributions 9,032,259 9,500,292
Interest from participant notes receivable 226,953 189,210
Other 480,908 269,948
Total increases 65,409,857 64,274,768
Decreases
Retiree benefits paid 30,021,653 27,701,902
Loan defaults 412,246 331,152
Participants' note and administrative fees 703,693 539,761
Total decreases 31,137,592 28,572,815
Change in net position held in trust 34,272,265 35,701,953
Net Position Held in Trust for Pension
and Other Employee Benefits
Beginning 514,652,269 478,950,316
Ending $ 548,924,534 $ 514,652,269
See notes to financial statements
13
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
1. Significant Accounting Policies
The following is a summary of the significant accounting policies used by the Lansing Board of Water&
Light(BWL):
Reporting Entity
The BWL, a related organization of the City of Lansing, Michigan (City), is an administrative board
established by the City Charter. The City Charter grants the BWL full and exclusive management of
the electric, water, steam and chilled water services of the City. The commissioners of the governing
board are appointed by the mayor with approval of the City Council. The BWL provides water, steam,
chilled water and electric services to the City and surrounding townships. The governing board (Board
of Commissioners) has the exclusive authority to set rates for the services provided. The financial
statements include the financial activities of the electric, water, steam and chilled water operations of
the BWL. The financial statements also include the financial activities of the BWL Pension and OPEB
Trust Funds. The BWL is exempt from taxes on income because it is a municipal entity.
Fund Accounting
The BWL accounts for its activities in two different fund types. In order to demonstrate accountability
for how it has spent certain resources, separate funds allow the BWL to show the particular
expenditures that specific revenues were used for. The funds are aggregated into two fund types:
Enterprise funds provide goods or services to users in exchange for charges or fees.
Fiduciary funds:
1. The Lansing Board of Water and Light Defined Contribution Plan and Trust 1 and Lansing
Board of Water and Light Defined Benefit Plan and Trust for Employees' Pensions, which
accumulate resources for benefit payments to participants.
2. The Postretirement Benefit Plan and Trust for Eligible Employees of Lansing Board of Water
and Light, a Voluntary Employees' Beneficiary Association (VEBA), which accumulates funds
for future payment of retiree benefits.
Basis of Accounting
Enterprise funds and fiduciary funds use the economic resources measurement focus and the full
accrual basis of accounting. Revenue is recorded when earned and expenses are recorded when a
liability is incurred, regardless of the timing of related cash flows. In addition, the utilities meet the
criteria and, accordingly, on July 1, 2012, the BWL adopted the accounting and reporting
requirements of GASB 62, paragraphs 476-500.
The BWL continues to follow the accounting and reporting requirements of GASB 62, paragraphs
476-500, which require that the effects of the ratemaking process be recorded in the financial
statements. Such effects primarily concern the time at which various items enter into the
determination of net income in order to follow the principle of matching costs and revenues.
Accordingly, the BWL records various regulatory assets and deferred inflows and outflows of
resources to reflect the regulator's actions (see Note 6). Management believes that the BWL meets
the criteria for continued application of GASB 62 paragraphs 476-500 but will continue to evaluate its
applicability based on changes in the regulatory and competitive environment.
14
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
System of Accounts
The BWL's accounts are maintained substantially in accordance with the Uniform Systems of
Accounts of the Federal Energy Regulatory Commission for its electric and steam systems and in
accordance with the Uniform Systems of Accounts of the National Association of Regulatory Utility
Commissioners for the water and chilled water systems. The chart of accounts dictates how the BWL
classifies revenue and expense items in the statement of revenues, expenses and changes in net
position as operating and nonoperating.
Rate Matters
Rates charged to customers are established solely by the governing board. The BWL has agreed to
set rates sufficient to meet certain requirements of the bond resolutions for the outstanding revenue
bonds.
Operating Classification
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with the principal ongoing operations. The principal operating
revenues are charges to customers for sales and services. Operating expenses include the cost of
sales and services, administrative expenses, return on equity and depreciation on capital assets. All
revenues and expenses not meeting this definition are reported as nonoperating revenues and
expenses.
Report Presentation
This report includes the fund-based statements of the BWL. In accordance with government
accounting principles, a government-wide presentation with program and general revenues is not
applicable to special purpose governments engaged only in business-type activities.
In June 2022, the GASB issued Statement No. 101, Compensated Absences. This Statement
requires that liabilities for compensated absences be recognized in financial statements prepared
using the economic resources measurement focus for(1) leave that has not been used and (2) leave
that has been used but not yet paid in cash or settled through noncash means. A liability should be
recognized for leave that has not been used if(a)the leave is attributable to services already
rendered, (b)the leave accumulates and (c)the leave is more likely than not to be used for time off or
otherwise paid in cash or settled through noncash means. This standard was implemented July 1,
2024. The prior year impact of the standard was not considered material to the financial statements,
therefore the prior year balances were not adjusted for the change.
Specific Balances and Transactions
Cash and Cash Equivalents
The BWL considers demand deposits and current restricted funds, which consist of cash and
highly liquid investments with an original maturity of 90 days or less, as cash and cash
equivalents for financial statement purposes.
Investments are stated at fair value, which is the amount at which an investment could be
exchanged in a current transaction between two willing parties. Fair values are based on methods
and inputs as discussed in Note 2. Adjustments necessary to record investments at fair value are
recorded in the operating statement as increases or decreases in investment income. Fair values
may have changed significantly after year end.
15
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
Designated Cash and Investments
The BWL has established special purpose funds designated to meet anticipated operating
requirements. In addition, BWL management has established a future construction fund
designated to meet future construction requirements. These funds consist principally of securities
issued or backed by the government of the United States or its agencies, including but not limited
to treasury notes and bonds, and are segregated as follows:
Carrying Value
2025 2024
Designated purpose:
Litigation, environmental and uninsured losses $ 22,091,779 $ 20,876,509
Future water facilities 4,459,209 4,211,679
Subtotal 26,550,988 25,088,188
Special purpose, future construction 67,879,079 64,168,809
Total $ 94,430,067 $ 89,256,997
Accounts Receivable
Accounts receivable are stated at net invoice amounts. A general valuation allowance is
established based on an analysis of the aged receivables and historical loss experience. All
amounts deemed to be uncollectible are charged to expense in the period that determination is
made. Accounts receivables are not deemed uncollectible until they are approximately 425 days
past due and have remained completely unpaid throughout the BWL's collection policy. The
components of accounts receivable for 2025 and 2024 are as follows:
2025 2024
Customer receivables $ 32,060,580 $ 29,571,916
Sewerage collections 2,805,555 2,728,219
Wholesale sales receivables 4,174,924 4,613,189
Grant receivables 4,999,576 6,197,388
Refundable deposit - 6,103,762
Miscellaneous 7,635,147 4,593,289
Less allowance for doubtful accounts (2,500,000) (3,000,000)
Net $ 49,175,782 $ 50,807,763
Unbilled Accounts Receivable and Revenue
Unbilled accounts receivable at June 30, 2025 and 2024 represent the estimated amount of
accounts receivable for services that have not been billed as of the statement of net position date.
The amounts are a result of a timing difference between the end of the financial statement cycle
(month end)and the billing cycle (various dates within the month for each billing period).
Accordingly, the current year revenue from customers whose billing period ends after June 30 for
services rendered prior to July 1 will be recognized in the current period.
16
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
Special Deposit
In 2018, the BWL contracted with Consumer's Energy to install a new gas pipeline. Under the
terms of the contract, the BWL was expected to make installment payments totaling up to
$52,000,000 throughout the construction period. Based on usage of the new pipeline, the BWL is
eligible to recover all but$10,000 of the installment payments. The BWL has made installment
payments totaling $46,280,000. During 2025 and 2024, the BWL recovered $7,585,534 and
$6,103,762, respectively, back due to pipeline usage. The BWL estimates it will recover the
remaining installment payments based on expected usage. The long-term other asset for the
Consumer's Energy deposit recorded was $17,603,563 in 2025 and $25,189,097 in 2024. The
BWL has $41,165 of miscellaneous other deposits as of June 30, 2025 and 2024.
Inventories
Inventories are stated at weighted average cost and consist of the following at June 30:
2025 2024
Gas $ 2,168,849 $ 1,225,790
Materials and supplies 17,933,179 17,197,768
Total $ 20,102,028 $ 18,423,558
Prepayments
Prepayments relate to advanced payments on goods or services that will be consumed in future
periods.
Utility Plant
The utility plant is stated on the basis of cost, which includes expenditures for new facilities and
those which extend the useful lives of existing facilities and equipment. Expenditures for normal
repairs and maintenance are charged to maintenance expense as incurred. Capital assets are
generally defined as assets with an initial, individual cost of more than $5,000 and an estimated
life in excess of one year.
Depreciation
Depreciation of the utility plant is computed using the straight-line method based on estimated
useful lives. The resulting provisions for depreciation in 2025 and 2024, expressed as a
percentage of the average depreciable cost of the related assets, are as follows:
Average Rate (Percent)
Life
(Years) 2025 2024
Classification of utility plant:
Water 4-100 2.0 2.0
Electric 4-50 3.5 3.6
Steam 5-50 2.9 2.8
Chilled water 5-50 2.2 3.4
Common facilities 2-50 5.3 6.9
17
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
When units of property are retired, their costs are removed from the utility plant and charged to
accumulated depreciation.
Accrued Compensated Absences
The BWL records liabilities that are attributable to services already rendered and that are not
contingent on a specific event that is outside the control of the BWL and its employees, such as
FMLA, Bereavement, or Jury Duty. This liability is accrued as employees earn the rights to such
benefits. A portion of the current liability is included in accrued payroll for earned and used but
unpaid vacation and sick time. The BWL estimates the total current and noncurrent portions of
the accrued compensated absence liability to be $13,938,678 and $14,312,169 as of June 30,
2025 and 2024, respectively.
Capital Contributions
Capital contributions represent nonrefundable amounts received for the purpose of construction
for the utility plant. These contributions are from third parties, including amounts from customers,
grant programs and insurance proceeds from damage. Electric, water, steam and chilled water
contributions are credited against the related assets or recorded as a separate regulatory
deferred inflow of resources and will offset the depreciation of the related assets over the
estimated useful lives. This treatment is consistent with the BWL's ratemaking policy and is thus
permitted under GASB 62 paragraphs 476-500.
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position reports a separate section for deferred
outflows of resources. This separate financial statement element, deferred outflows of resources,
represents a consumption of net position that applies to a future period and so will not be
recognized as an outflow of resources (expense/expenditure) until then. The BWL has three
items that qualify for reporting in this category. The deferred outflows of resources relate to
deferred losses on refunding, pension related deferrals under GASB 68, OPEB related deferrals
under GASB 75.
In addition to liabilities, the statement of net position reports a separate section for deferred
inflows of resources. This separate financial statement element, deferred inflows of resources,
represents an acquisition of net position that applies to a future period and so will not be
recognized as an inflow of resources (revenue) until that time. The BWL has the following items
that qualify for reporting in this category: the deferred inflows of resources related to costs that
have been recovered from customers and will be applied to customers in the future related to the
renewable energy plan and energy optimization, chiller plant and Wise Road items described in
Note 6, pension related deferrals under GASB 68 and OPEB related deferrals under GASB 75.
Net Position
Equity is classified as net position and displayed in four components:
• Net Investment in Capital Assets - Consists of capital assets, net of accumulated
depreciation and reduced by the outstanding balances of any bonds that are attributable
to the acquisition, construction or improvement of those assets.
• Restricted for Debt Service - Consists of net position with constraints placed on their
use by revenue bond resolution.
• Restricted for Pension and OPEB - Consists of net position with constraints placed on
their use as this balance must be used to fund employee benefits.
18
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
• Unrestricted -All other net position that does not meet the definition of"restricted" or
"net investment in capital assets."
Net Position Flow Assumption
Sometimes the BWL will fund outlays for a particular purpose from both restricted (e.g., restricted
bond)and unrestricted resources. In order to calculate the amounts to report as restricted net
position and unrestricted net position in the enterprise fund financial statements, a flow
assumption must be made about the order in which the resources are considered to be applied. It
is the BWL's policy to consider restricted net position to have been depleted before unrestricted
net position is applied.
Net Pension Asset
A net pension asset is recorded in accordance with GASB Statement No. 68. The asset is the
difference between the actuarial total pension liability and the Plan's fiduciary net position as of
the measurement date. See Note 8 for additional information.
Other Assets
Other assets consists of the Net Pension Asset, Net OPEB Asset, Restricted Cash and
Investments and a deposit held with the Michigan Public Power Agency(MPPA) related to the
Belle River project.
Long-Term Obligations
Long-term debt and other obligations are reported as liabilities. Bond premiums and discounts are
amortized over the life of the bonds using the straight-line method. Gains or losses on prior
refundings are amortized over the remaining life of the old debt or the life of the new debt,
whichever is shorter. The balance at year end for premiums and discounts is shown as an
increase or decrease in the liability section of the statement of net position. The balance at year
end for the loss on refunding is shown as a deferred outflow on the statements of net position.
Postemployment Benefits Other Than Pensions (OPEB)
For purposes of measuring the net OPEB asset, deferred outflows of resources and deferred
inflows of resources related to OPEB and OPEB expense, information about the fiduciary net
position of the Postretirement Benefit Plan and Trust for Eligible Employees of Lansing Board of
Water and Light (Plan), a fiduciary fund of the BWL, and additions to/deductions from the Plan
fiduciary net position have been determined on the same basis as they are reported by the Plan.
For this purpose, the Plan recognizes benefit payments when due and payable in accordance
with the benefit terms. Investments are reported at fair value, except for money market
investments and participating interest-earning investment contracts that have a maturity at the
time of purchase of one year or less, which are reported at cost.
Inter-Utility Transactions
The water, electric, steam and chilled water operations of the BWL bill each other for services
provided and these services are reported as revenue to the generating operation and expense to
the consuming operation. Such internal billings aggregated $7,083,455 and $6,281,268 in 2025
and 2024, respectively, and are not eliminated in the statement of revenues, expenses and
changes in net position.
19
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could differ from those estimates.
Reclassifications
Certain amounts presented in the prior year data may have been reclassified in order to be
consistent with the current year's presentation.
2. Cash, Investments and Fair Value Disclosure
Michigan Compiled Laws Section 129.91 (Public Act 20 of 1943, as amended)authorizes local
governmental units to make deposits and invest in the accounts of federally insured banks, credit unions
and savings and loan associations that have offices in Michigan. A local unit is allowed to invest in bonds,
securities and other direct obligations of the United States or any agency or instrumentality of the United
States; certificates of deposit, savings accounts, deposit accounts or depository receipts of an eligible
financial institution; repurchase agreements; bankers' acceptances of United States banks; commercial
paper rated within the two highest classifications, which matures not more than 270 days after the date of
purchase; obligations of the State of Michigan or its political subdivisions, which are rated as investment
grade; and mutual funds composed of investment vehicles that are legal for direct investment by local
units of government in Michigan.
The operating cash investment policy adopted by the BWL in accordance with Public Act 20, as
amended, and the Lansing City Charter has authorized investment in bonds and securities of the United
States government, certificates of deposit, time deposits and bankers' acceptances of qualified financial
institutions, commercial paper rated Al by Standard & Poor's and P1 by Moody's, repurchase
agreements using bonds, securities and other obligations of the United States or an agency or
instrumentality of the United States and liquid asset accounts managed by a qualified financial institution
using any of these securities. The BWL's deposits and investment policies are in accordance with
statutory authority.
Michigan Cooperative Liquid Assets Securities System (MI CLASS) reports the fair value of its underlying
assets annually. Participants in the MI CLASS have the right to withdraw their funds in total on one day's
notice. At June 30, 2025 and 2024, the fair value of the MI CLASS' assets were substantially equal to the
BWL's share. MI CLASS is rated AAAm by Standard and Poor's. The BWL also has cash and
investments with Governments of Michigan Investing Cooperatively (GovMIC). The GovMIC cash and
investments are recorded at amortized cost which approximates fair value.
The BWL's cash and investments are subject to several types of risk, which are examined in more detail
below:
The BWL's Cash and Investments (Exclusive of Fiduciary Funds)
Custodial Credit Risk of Bank Deposits
Custodial credit risk is the risk that in the event of a bank failure, the BWL's deposits may not be
returned to it. The BWL requires that financial institutions must meet minimum criteria to offer
adequate safety to the BWL. At June 30, 2025 and 2024, the BWL had $19,286,941 and
$20,225,479, respectively, of bank deposits that were uninsured and uncollateralized. The BWL
evaluates each financial institution with which it deposits funds and only those institutions meeting
minimum established criteria are used as depositories.
20
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
Custodial Credit Risk of Investments
Custodial credit risk is the risk that, in the event of the failure of the counterparty, the BWL will not
be able to recover the value of its investments or collateral securities that are in the possession of
an outside party. All the investments and securities under custodial care are owned by the BWL
and only held by independent, third-party custodians for safekeeping. The BWL's investment
policy has addressed custodial credit risk by owning all investments and registering each in the
name of the government.
At June 30, 2025, the following investment securities were uninsured but registered in BWL's
name, with securities held by the counterparty or by its trust department or agent:
Type of Investment Fair Value How Held
U.S. agency bond or notes $ 39,189,690 Counterparty
U.S. treasury bonds 168,161,274 Counterparty
At June 30, 2024, the following investment securities were uninsured but registered in BWL's
name, with securities held by the counterparty or by its trust department or agent:
Type of Investment Fair Value How Held
U.S. agency bond or notes $ 45,719,291 Counterparty
U.S. treasury bonds 277,330,789 Counterparty
State and local bonds 553,117 Counterparty
Interest Rate Risk
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of
investments. The BWL's investment policy restricts investments to a maximum weighted average
life of five years unless matched to a specific cash flow.
At June 30, 2025, the average maturities of investments are as follows:
Less Than
Investment Fair Value 1 Year 1-5 Years 6+Years
Pooled investment funds $ 62,014,516 $ 62,014,516 $ - $ -
U.S. treasury bonds 168,161,274 100,021,806 68,139,468 -
U.S. agency bonds/notes 39,189,690 1,297,303 31,512,732 6,379,655
Total $ 269,365,480 $ 163,333,625 $ 99,652,200 $ 6,379,655
At June 30, 2024, the average maturities of investments are as follows:
Less Than
Investment Fair Value 1 Year 1-5 Years 6+Years
Pooled investment funds $ 108,854,651 $ 108,854,651 $ - $ -
U.S. treasury bonds 277,330,789 129,439,631 147,891,158 -
State and local bonds 553,117 553,117 - -
U.S. agency bonds/notes 45,719,291 6,030,413 31,421,906 8,266,972
Supra national agency bonds 247,122 247,122 - -
Mutual funds, bonds 51,134,416 - 51,134,416 -
Total $ 483,839,386 $ 245,124,934 $ 230,447,480 $ 8,266,972
21
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
Credit Risk
State law limits investments in commercial paper to the top two ratings issued by nationally
recognized statistical rating organizations.
As of June 30, 2025, the credit quality ratings of debt securities are as follows:
Rating
Investment Fair Value Rating Organization
Pooled investment funds $ 62,014,516 AAAm S&P
U.S. treasury bonds 168,161,274 AA+ (Aa1) S&P (Moody's)
U.S. agency bonds/notes 39,189,690 AA+ (Aa1) S&P (Moody's)
As of June 30, 2024, the credit quality ratings of debt securities are as follows:
Rating
Investment Fair Value Rating Organization
Pooled investment funds $ 108,854,651 AAAm S&P
U.S. treasury bonds 277,330,789 AA+ (Aaa) S&P (Moody's)
U.S. agency bonds/notes 45,719,291 AA+ (Aaa) S&P (Moody's)
Supra national agency bonds 247,122 AAA+ (Aaa) S&P (Moody's)
State and local bonds 553,117 AA/AA1 S&P (Moody's)
Mutual funds, bonds 51,134,416 AAAm S&P
Concentration of Credit Risk
Concentration of credit risk is the risk of loss attributable to the magnitude of a government's
investment in a single issuer. The Board's policy limits the amount of investments with an
individual issuer, with the exception of the U.S. government. As of June 30, 2025 and 2024, the
BWL's investment portfolio was concentrated as follows:
Investment 2025 2024
Freddie Mac 12 % 7 %
Fair Value
The BWL categorizes its fair value measurements within the fair value hierarchy established by
generally accepted accounting principles. The hierarchy is based on the valuation inputs used to
measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for
identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are
significant unobservable inputs.
22
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
The following investments are recorded at fair value using the Matrix Pricing Technique.
June 30, 2025
Level Level Level Total
U.S. treasury bonds $ - $ 168,161,274 $ - $ 168,161,274
Federal agency mortgage-
backed security - 28,633,584 - 28,633,584
Federal agency collateralized
mortgage obligation - 2,106,033 - 2,106,033
Federal agency bond/note - 8,450,073 - 8,450,073
Total investments at
fair value level $ - $ 207,350,964 $ - $ 207,350,964
June 30, 2024
Level Level Level Total
U.S. treasury bonds $ - $ 277,330,789 $ - $ 277,330,789
Supra national agency bonds - 247,122 - 247,122
Federal agency mortgage-
backed security - 30,142,641 - 30,142,641
Federal agency collateralized
mortgage obligation - 2,302,719 - 2,302,719
State and local bonds - 553,117 - 553,117
Federal agency bond/note - 13,273,931 - 13,273,931
Mutual funds, bonds - 51,134,416 - 51,134,416
Total investments at
fair value level $ - $ 374,984,735 $ - $ 374,984,735
Fiduciary Fund Investments
Custodial Credit Risk of Bank Deposits
Custodial credit risk is the risk that in the event of a bank failure, the Plans' deposits may not be
returned to them. The Plans require that financial institutions must meet minimum criteria to offer
adequate safety to the Plans. At June 30, 2025 and 2024, the BWL had $1,043,398 and
$2,245,772, respectively, of bank deposits that were uninsured and uncol lateral ized. The Plans
evaluate each financial institution with which they deposit funds and only those institutions
meeting minimum established criteria are used as depositories.
Custodial Credit Risk of Investments
Custodial credit risk is the risk that, in the event of the failure of the counterparty, the Plans will
not be able to recover the value of their investments or collateral securities that are in the
possession of an outside party. The Plans' investment policies addresses this risk by requiring
the Plans to hold all investments subject to custodial credit risk in their name.
Interest Rate Risk - Pension and OPEB Trust Funds
Interest rate risk is the risk that the value of investments will decrease as a result of a rise in
interest rates. The Plans investment policy does not restrict investment maturities.
23
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
At June 30, 2025, the average maturities of investments subject to interest rate risk are as
follows:
Weighted
Average
Maturity
Investment Fair Value (in Years)
Mutual fund, bonds $ 100,482,077 8.9
At June 30, 2024, the average maturities of investments subject to interest rate risk are as
follows:
Weighted
Average
Maturity
Investment Fair Value (in Years)
Mutual fund, bonds $ 96,482,199 8.8
Certificates of deposit(negotiable) 100,039 0.6
Credit Risk-Pension and OPEB Trust Funds
State law limits investments in commercial paper to the top two ratings issued by nationally
recognized statistical rating organizations. The Plans have no investment policy that would further
limit its investment choices. As of June 30, 2025, the credit quality ratings of debt securities (other
than the U.S. government) subject to credit risk are as follows:
Rating
Investment Fair Value Rating Organization
Mutual funds, bonds $ 100,482,077 Not rated Not rated
As of June 30, 2024, the credit quality ratings of debt securities (other than the U.S. government)
are as follows:
Rating
Investment Fair Value Rating Organization
Mutual funds, bonds $ 96,482,199 Not rated Not rated
Certificates of deposit (negotiable) 100,039 Not rated Not rated
Concentration of Credit Risk
Concentration of credit risk is the risk of loss attributed to the magnitude of a government's
investment in a single issuer. The Plans have no investments subject to concentration of credit
risk as of June 30, 2025 and June 30, 2024.
24
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
Fair Value - Pension Trust Funds
The framework for measuring fair value provides a fair value hierarchy that prioritizes the inputs
to valuation techniques used to measure fair value. The hierarchy gives the highest priority to
unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the
lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under
authoritative guidance are described as follows:
Level 1 - Inputs to the valuation methodology are unadjusted quoted market prices for
identical assets in active markets that the Plan has the ability to access.
Level 2 - Inputs to the valuation methodology include:
• quoted prices for similar assets or liabilities in active markets;
• quoted prices for identical or similar assets or liabilities in inactive markets;
• inputs other than quoted prices that are observable for the asset or liability; and
• inputs that are derived principally from or corroborated by observable market data by
correlation or other means.
If the asset or liability has a specified (contractual)term, the Level 2 input must be observable
for substantially the full term of the asset or liability.
Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair
value measurement.
The asset's or liability's fair value measurement level within the fair value hierarchy is based on
the lowest level of any input that is significant to the fair value measurement. Valuation
techniques maximize the use of relevant observables and minimize the use of unobservable
inputs.
The following is a description of the valuation methodologies used for assets measured at fair
value. There have been no changes in the methodologies used at June 30, 2025 and 2024:
Common Stock, Corporate Bonds and Notes, U.S. Government Obligations and Fixed
Income Securities -Valued at the most recent closing price reported on the market on which
individual securities are traded.
Mutual Funds -Valued at the daily closing price as reported by the fund. Mutual funds held
by the Plan are open-end mutual funds that are registered with the Securities and Exchange
Commission. These funds are required to publish their daily NAV and to transact at that price.
The mutual funds held by the Plan are deemed to be actively traded.
Stable Value Fund - Seeks safety of principal, adequate liquidity and returns superior to
shorter maturity alternatives by actively managing a diversified portfolio of assets issued by
highly rated financial institutions and corporations as well as obligations of the U.S.
government or its agencies.
Self-Directed Brokerage Account- Participants meeting minimum balance and transaction
requirements may transfer funds to a self-directed brokerage account providing access to
additional investment options including a large selection of mutual funds.
25
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
The preceding methods may produce a fair value calculation that may not be indicative of net
realizable value or reflective of future fair values. Furthermore, while the Plan believes its
valuation methods are appropriate and consistent with other market participants, the use of
different methodologies or assumptions to determine the fair value of certain financial
instruments could result in a different fair value measurement at the reporting date.
The following table sets forth by level, within the fair value hierarchy, the Plan's assets at fair
value as of June 30, 2025 and 2024:
June 30, 2025
Investment Type Level 1 Level 2 Level 3 Total
Mutual funds, bonds $ 77,927,338 $ 22,554,739 $ - $ 100,482,077
Mutual funds, equities 302,281,953 62,527,268 - 364,809,221
Self-directed brokerage
account, equities 18,377,421 - - 18,377,421
Self-directed brokerage
account, mutual funds, equity 827,483 - - 827,483
Total investments by
fair value level $ 399,414,195 $ 85,082,007 $ - $ 484,496,202
Investments measured at the
net asset value (NAV):
Real estate fund
investments 40,244,890
Total investments
measured at fair
value $ 524,741,092
June 30, 2024
Investment Type Level 1 Level 2 Level 3 Total
Mutual funds, bonds $ 17,497,649 $ 78,984,550 $ - $ 96,482,199
Mutual funds, equities 279,521,028 54,059,769 - 333,580,797
Self-directed brokerage
account, equities 12,507,716 - - 12,507,716
Self-directed brokerage
account, mutual funds, equity 598,099 - - 598,099
Certificates of deposit - 100,039 - 100,039
Total investments by
fair value level $ 310,124,492 $ 133,144,358 $ - $ 443,268,850
Investments measured at the
net asset value (NAV):
Real estate fund
investments 42,233,893
Total investments
measured at fair
value $ 485,502,743
26
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
3. Restricted Assets
Restricted assets are required under the 2013A, 2017A, 2019A, 2019B, 2021A, 2021 B and 2024A
Revenue Bond resolutions and the related Nonarbitrage and Tax Compliance Certificates. These assets
are segregated into the following funds:
Carrying Value
2025 2024
Operations and maintenance fund $ 39,230,603 $ 39,896,170
Bond and interest redemption fund 53,408,138 61,457,542
Construction Fund 144,247,959 259,946,436
Total $ 236,886,700 $ 361,300,148
The carrying value in excess of the required value for the current portion is reported as cash and cash
equivalents or investments for the years ended 2025 and 2024.
The restrictions of the various funds required per the bond resolutions are as follows:
Operations and Maintenance Fund - By the end of each month, this fund shall include sufficient
funds to provide for payment of the succeeding month's expenses.
Bond and Interest Redemption Fund - Restricted for payment of the current portion of bond
principal and interest on the 2013A, 2017A, 2019A, 2019B, 2021A, 2021B and 2024A Revenue
Bonds.
Construction Fund - Restricted for utility system upgrades as required by the 2024A Revenue
Bonds.
In addition, restricted assets have been reported in connection with the net pension and OPEB asset
balances since this balance must be used to fund employee benefits.
4. Utility Plant
The tables below reflect the capital asset activity of the utility plant categories for the years ended
June 30, 2025 and 2024:
Capital Asset Activity for Year Ended June 30, 2025
Capital Assets Capital Assets
FY Start Transfers Acquisition Retirement FY End
Water $ 380,759,488 $ 16,322,362 $ 813,607 $ (738,776) $ 397,156,681
Electric 1,278,077,851 63,211,913 - (6,427,500) 1,334,862,264
Steam 100,366,159 4,288,802 - (2,930,269) 101,724,692
Chilled 34,105,305 - - - 34,105,305
Common 131,931,308 11,056,016 751,681 (5,470,637) 138,268,368
AUC 142,601,832 (94,879,093) 197,628,220 (819,448) 244,531,511
Total $ 2,067,841,943 $ - $ 199,193,508 $ (16,386,630) $ 2,250,648,821
27
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
Accumulated Depreciation for Year Ended June 30, 2025
Depreciation/
Amortization
Accumulated and Accumulated
Depreciation Depreciation Impairment for Depreciation Depreciation
FY Start Transfers Year Retirement FY End
Water $ (143,459,691) $ (889) $ (8,785,741) $ 369,291 $ (151,877,030)
Electric (514,235,813) 136,333 (45,998,483) 2,105,014 (557,992,949)
Steam (34,104,264) - (2,889,472) 1,651,967 (35,341,769)
Chilled (19,616,585) - (747,255) - (20,363,840)
Common (82,565,510) (135,444) (9,511,433) 5,466,841 (86,745,546)
Total $ (793,981,863) $ - $ (67,932,384) $ 9,593,113 $ (852,321,134)
Nondepreciable Assets - Included in the table above are nondepreciable assets of$2,204,045 for
water, $18,678,915 for electric, $124,099 for steam, $412,339 for common facilities and
$244,531,511 for AUC.
Capital Asset Activity for Year Ended June 30, 2024
Capital Assets Capital Assets
FY Start Transfers Acquisition Retirement FY End
Water $ 367,082,687 $ 15,216,703 $ - $ (1,539,902) $ 380,759,488
Electric 1,246,833,576 34,269,839 - (3,025,564) 1,278,077,851
Steam 96,662,683 3,708,614 - (5,138) 100,366,159
Chilled 34,105,305 - - - 34,105,305
Common 123,933,055 2,206,851 8,055,371 (2,263,969) 131,931,308
AUC 45,813,286 (55,402,008) 154,272,797 (2,082,243) 142,601,832
Total $ 1,914,430,592 $ - $ 162,328,168 $ (8,916,816) $ 2,067,841,943
Accumulated Depreciation for Year Ended June 30, 2024
Depreciation/
Amortization
Accumulated and Accumulated
Depreciation Depreciation Impairment for Depreciation Depreciation
FY Start Transfers Year Retirement FY End
Water $ (135,995,162) $ (9,230) $ (8,301,141) $ 845,842 $ (143,459,691)
Electric (471,205,697) - (44,860,132) 1,830,016 (514,235,813)
Steam (31,341,987) - (2,767,415) 5,138 (34,104,264)
Chilled (18,451,534) - (1,165,051) - (19,616,585)
Common (74,127,245) 9,230 (10,710,340) 2,262,845 (82,565,510)
Total $ (731,121,625) $ - $ (67,804,079) $ 4,943,841 $ (793,981,863)
Nondepreciable Assets - Included in the table above are nondepreciable assets of$2,204,045 for
water, $17,449,965 for electric, $124,099 for steam, $412,339 for common facilities and
$142,601,832 for AUC
28
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
5. Long-Term Debt
Long-term debt as of June 30 consists of the following:
2025 2024
Water Supply, Steam, Chilled Water and Electric Utility System
Revenue and revenue refunding Bonds, Series 2024A, due in
annual principal installments beginning July 1, 2025, and continuing
through July 1, 2054, plus interest at rates ranging from 5.00%to
5.25%. Original amount of issue$364,625,000. $ 364,625,000 $ 364,625,000
Utility System Junior Lien Revenue Bonds, Series 2023, due in
annual principal installments beginning October 1, 2026, and
continuing through October 1, 2066, plus interest at a rate of
1.875%. Original amount of issue$8,590,875 as of June 30, 2025. 8,590,875* (1) -
Water Supply, Steam, Chilled Water and Electric Utility System
Revenue Taxable Bonds, Series 2021 B, due in annual principal
installments beginning July 1, 2026 and continuing through July 1,
2051, initial term rate is 2%,with an assumed interest rate of 3.5%
following the mandatory tender in 2026. Original amount of issue
$70,875,000 70,875,000 70,875,000
Water Supply, Steam, Chilled Water and Electric Utility System
Revenue Taxable Bonds, Series 2021A, due in annual principal
installments beginning July 1, 2025 and continuing through July 1,
2051, plus interest at a rate of 5.00%. Original amount of issue
$56,020,000. 56,020,000 56,020,000
Water Supply, Steam, Chilled Water and Electric Utility System
Revenue Refunding Taxable Bonds, Series 2019B, due in annual
principal installments beginning July 1, 2022 and continuing through
July 1, 2041, plus interest at rates ranging from 1.95%to 3.53%.
Original amount of issue$251,995,000. During fiscal year 2024
$45,625,000 of the 2019B original issuance was tendered as part of
the 2024A issuance. 187,010,000 193,605,000
Water Supply, Steam, Chilled Water and Electric Utility System
Revenue Refunding Bonds, Series 2019A, due in annual principal
installments beginning July 1, 2022 and continuing through July 1,
2048, plus interest at rates ranging from 4.00%to 5.00%. Original
amount of issue$319,875,000. 310,425,000 313,730,000
Water Supply, Steam, Chilled Water and Electric Utility System
Revenue Refunding Bonds, Series 2017A, due in annual principal
installments beginning July 1, 2019 and continuing through July 1,
2032, plus interest at a rate of 5.00%. Original amount of issue
$30,365,000. 19,635,000 21,625,000
29
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
2025 2024
Water Supply, Steam, Chilled Water and Electric Utility System
Revenue Refunding Bonds, Series 2013A, due in annual principal
installments beginning July 1, 2014 through July 1, 2026, plus
interest at rates ranging from 2.00%to 5.00%. Original amount of
issue$21,085,000. During fiscal year 2024, $4,330,000 of the
2013A original issuance was refunded as part of the 2024A
issuance. $ - $ 2,000,000
Promissory note, due to the City of Lansing in semi-annual
installments through October 1, 2031, plus interest at a rate of
2.50%. Original amount of issue$13,225,385. 2,717,630* 3,368,762*
Charter Township of Lansing Special Assessment pertaining to the
Groesbeck II Park Drain. Due in annual installments ranging from
$132,000 to$291,000 with final payment in 2044. 2,526,107* 2,652,412*
Total 1,022,424,612 1,028,501,175
Less current portion (14,261,153) (14,667,438)
Plus unamortized premium 113,441,842 118,160,932
Total $ 1,121,605,301 $ 1,131,994,669
The unamortized premium and deferral on refunded bonds is being amortized over the life of the bonds,
using the straight-line method.
*The debt noted is directly placed with a third party.
(1)- During 2023, the BWL was authorized to issue $32,220,000 of Drinking Water State Revolving Fund
(DWSRF) revenue bonds, of which the first$20,000,000 is eligible for principal forgiveness. As of
June 30, 2025, $28,590,875 has been drawn down. The repayment schedule will be determined
upon project completion or upon disbursement of the total authorized amount. The repayment
schedules will reflect DWSRF repayments in the first fiscal year that the schedule is finalized.
Therefore, the future debt service is not included in the current repayment schedule.
Aggregate principal and interest payments applicable to revenue debt are as follows:
Years Ending
June 30: Principal Interest Total
2026 $ 13,495,000 $ 44,790,523 $ 58,285,523
2027 14,025,000 44,772,718 58,797,718
2028 18,665,000 44,636,718 63,301,718
2029 19,435,000 43,877,996 63,312,996
2030 20,180,000 43,112,406 63,292,406
2031-2035 113,910,000 202,195,630 316,105,630
2036-2040 140,035,000 175,363,616 315,398,616
2041-2045 172,985,000 141,411,528 314,396,528
2046-2050 219,740,000 93,368,750 313,108,750
2051-2055 276,120,000 35,678,788 311,798,788
Total $ 1,008,590,000 $ 869,208,673 $ 1,877,798,673
30
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
Aggregate principal and interest payments applicable to direct placement debt are as follows:
Years Ending
June 30: Principal Interest Total
2026 $ 766,153 $ 165,789 $ 931,942
2027 712,205 147,609 859,814
2028 658,250 130,396 788,646
2029 575,934 114,230 690,164
2030 423,896 99,906 523,802
2031-2035 844,244 374,508 1,218,752
2036-2040 631,527 227,170 858,697
2041-2045 631,528 85,189 716,717
Total $ 5,243,737 $ 1,344,797 $ 6,588,534
All Water Supply and Electric Utility System Revenue Bonds were issued by the authority of the BWL. All
bonds were issued on a parity basis and are payable solely from the net revenue of the combined water,
electric, chilled water and steam operations of the BWL.
The Series 2024A Bonds maturing in the years 2025 through 2034, inclusive, shall not be subject to
optional redemption prior to maturity. The Series 2024A Bonds, or portions of the Series 2024A Bonds in
multiples of$5,000 maturing or subject to mandatory redemption in the years 2035 and thereafter shall be
subject to redemption at the option of the Board in such order of maturity as the Board shall determine,
and within a single maturity by lot, on any date on or after July 1, 2034 at par plus accrued interest to the
date fixed for redemption. The Term Bonds maturing on July 1, 2049, the 5.00% Term Bonds maturing on
July 1, 2054, and the 5.25% Term Bonds July 1, 2054 are subject to mandatory redemption prior to
maturity in part by lot on July 1 in the years and in the principal amounts set forth below at a redemption
price equal to the principal amount to be redeemed plus accrued interest, if any, without premium.
The 2021 B Bonds are payable in annual installments in the years 2026 through 2051, inclusive, and are
subject to optional and mandatory redemption prior to maturity. The put bonds maturing on or after
January 1, 2026 shall be subject to redemption at the option of the BWL in such order of maturity as the
BWL shall determine, and within a single maturity by lot, on any date on or after January 1, 2026 at par
plus accrued interest to the fixed date for redemption. The mandatory tender for purchase date of the
Bonds is July 1, 2026—the first business day following the last day of the Initial Term Interest Rate
Period. In the event not all the Bonds are purchased on or before the Purchase Date, a Delayed
Remarketing Period shall commence during which the Bonds will bear interest at a Stepped Interest Rate.
Additional information is available in the Official Statement for the Series 2021 B Bonds.
The 2021A Bonds are payable in annual installments in the years 2025 through 2051, inclusive, and shall
not be subject to optional redemption prior to maturity. The bonds maturing on or after July 1, 2031 shall
be subject to redemption at the option of the BWL in such order of maturity as the BWL shall determine,
and within a single maturity by lot, on any date on or after July 1, 2031 at par plus accrued interest to the
fixed date for redemption.
The 2019B Bonds are payable in annual installments in the years 2022 through 2041, inclusive, and shall
not be subject to optional redemption prior to maturity. The bonds maturing on or after July 1, 2030 shall
be subject to redemption at the option of the BWL in such order of maturity as the BWL shall determine,
and within a single maturity by lot, on any date on or after July 1, 2029 at par plus accrued interest to the
fixed date for redemption. During fiscal year 2024 $45,625,000 of the 2019B original issuance was
tendered as part of the 2024A issuance.
31
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
The 2019A Bonds are payable in annual installments in the years 2022 through 2048, inclusive, and shall
not be subject to optional redemption prior to maturity. The bonds maturing on or after July 1, 2028 shall
be subject to redemption at the option of the BWL in such order of maturity as the BWL shall determine,
and within a single maturity by lot, on any date on or after July 1, 2028 at par plus accrued interest to the
fixed date for redemption.
The 2017A Bonds are payable in annual installments in the years 2019 through 2027, inclusive, and shall
not be subject to optional redemption prior to maturity. The bonds, or portions of the bonds in multiples of
$5,000 maturing or subject to mandatory redemption in the years 2028 and thereafter, shall be subject to
redemption at the option of the BWL in such order of maturity as the BWL shall determine, and within a
single maturity by lot, on any date on or after July 1, 2027 at par plus accrued interest to the fixed date for
redemption.
The 2013A Bonds are payable in annual installments in the years 2014 to 2025, inclusive, and shall not
be subject to optional redemption prior to maturity. The bonds maturing on or after July 1, 2025 shall be
subject to redemption at the option of the BWL on or after July 1, 2024 as a whole or in part at any time
and by lot within a maturity at par plus accrued interest to the redemption date. During fiscal year 2024,
$4,330,000 of the 2013A original issuance was refunded as part of the 2024A issuance.
Current Refunding
On January 31, 2024, BWL issued $364,625,000 in bonds (new bonds), which included a premium of
$41,845,754, at a rate of 5.00%to refund $4,364,100 (Principal & Interest) in outstanding 2013A
Bonds and $41,597,960 (Principal & Interest) in outstanding 2019B Bonds with an average rate of
4.3% and 3.25%, respectively. Of the principal amount issued, $39,625,000 went to refund the
aforementioned bonds and $325,000,000 was new money.
The cash flow requirements on the old bonds prior to the current refunding were $45,962,060 through
July 1, 2037. The cash flow requirements for the new bonds are $58,314,774 through July 1, 2054.
The current refunding resulted in an economic gain of$4,987,279.
The net proceeds were used to purchase U.S. government securities. Those securities were
deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments
on the 2013A Bonds and a portion of the 2019B Bonds. As a result, the 2013A Bonds and a portion of
the 2019B Bonds are considered defeased and the liability for these bonds has been removed from
the Statement of Net Position.
32
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
The long-term debt activity for the year ended June 30, 2025 is as follows:
Revenue Bonds
(Net of
Unamortized
Premiums) Other Notes Total
Beginning balance $ 1,140,640,932 $ 6,021,175 $ 1,146,662,107
Additions 8,590,875 - 8,590,875
Reductions (18,609,090) (777,438) (19,386,528)
Ending balance $ 1,130,622,717 $ 5,243,737 $ 1,135,866,454
Due with-in one year $ 13,495,000 $ 766,153 $ 14,261,153
The BWL has pledged substantially all revenue, net of operating expenses, to repay the revenue
bonds. Proceeds from the bonds provided financing for the construction of the utility plant. The bonds
are payable solely from the net revenues of the BWL. In fiscal year 2025, the remaining principal and
interest to be paid on the bonds total $1,877,798,673. During fiscal year 2025, net revenues of the
BWL were $137,302,035 compared to the annual debt requirements of$41,915,898. In fiscal year
2024, the remaining principal and interest to be paid on the bonds total $1,935,516,206. During fiscal
year 2024, net revenues of the BWL were$106,854,384 compared to the annual debt requirements
of$41,859,344.
The long-term debt activity for the year ended June 30, 2024 is as follows:
Revenue Bonds
(Net of
Unamortized
Premiums) Other Notes Total
Beginning balance $ 802,300,266 $ 6,840,810 $ 809,141,076
Additions 406,470,754 - 406,470,754
Reductions (68,130,088) (819,635) (68,949,723)
Ending balance $ 1,140,640,932 $ 6,021,175 $ 1,146,662,107
Due with-in one year $ 13,890,000 $ 777,438 $ 14,667,438
33
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
6. Costs/Credits Recoverable in Future Years
Environmental Remediation
During the fiscal year ended June 30, 2004, the GASB 49 environmental remediation liability related
to a landfill site operated by the BWL was approved for regulatory accounting under GASB 62. The
balance of the regulatory asset related to this first landfill site at June 30, 2025 and 2024 was
$470,113 and $0, respectively. During the fiscal year ended June 30, 2006, the GASB 49
environmental remediation liability related to a second landfill was approved for regulated entity
accounting under GASB 62. The balance of the regulatory asset at June 30, 2025 and 2024 was
$98,899 and $0, respectively. The BWL reviews the adequacy of its rates to recover its cost of
service on an annual basis. During the year ended June 30, 2009, regulatory accounting as per
GASB 62 was authorized by the Board of Commissioners to collect rates for all environmental
remediation sites. The balance as of June 30, 2025 and 2024 for additional sites was $51,923,867
and $20,853,276 respectively. The increase in environmental liabilities is primarily driven by a
groundwater remediation project. During fiscal 2025, the BWL received information regarding
potential remedies that may be used at the site.
Recoverable Cost Adjustments
During the year ended June 30, 2005, the Board of Commissioners approved the use of regulatory
accounting as per GASB 62 in accounting for the BWL's power supply cost recovery (PSCR)
adjustment, power chemical adjustment(PCA), fuel cost adjustment(FCA) and chilled water fuel cost
adjustment (CWFCA). These affect the amount to be billed to retail electric, water, steam and chilled
water customers to reflect the difference between the BWL's actual material costs and the amounts
incorporated into rates. This resulted in recoverable assets of$5,858,054 and $26,154,048 at
June 30, 2025 and 2024, respectively. This amount represents costs to be billed (credited)to
customers in future years because actual costs of providing utilities were higher(lower)than the costs
incorporated into the BWL's rates.
Renewable Energy Plan (REP) and Energy Optimization (EO)
During the year ended June 30, 2010, the Board of Commissioners approved the implementation of
regulatory accounting as per GASB 62 to account for Public Act 295 of 2008 (PA. 295). PA. 295 set
forth requirements for all Michigan utilities to meet the new renewable energy standards and
undertake energy optimization programs. As a municipally owned electric utility, the BWL was
required to file a proposed energy plan with the Michigan Public Service Commission (MPSC)and
this plan was approved on July 1, 2009. These changes will affect the amount to be billed to electric
customers. This resulted in deferred inflow of resources of$549,482 and $1,292,134 as of June 30,
2025 and 2024, respectively.
Chiller Plant
During the year ended June 30, 2010, the BWL chose to use regulatory accounting as per GASB 62
to recognize the contribution in aid of construction (CIAC)for the development of a new chilled water
plant. The remaining recoverable inflow of resources of$0 and $220,271 as of June 30, 2025 and
2024, respectively. The BWL will recognize this as revenue monthly over the life of the new chilled
water plant to offset depreciation expense.
Wise Road
During the year ended June 30, 2012, the BWL chose to use regulatory accounting as per GASB 62
to recognize the insurance proceeds for the damaged equipment at the Wise Road Water
Conditioning Plant (see Note 13). The remaining recoverable inflow of resources as of June 30, 2025
and 2024 was $3,848,616 and $4,831,242, respectively.
34
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
7. Transactions With the City of Lansing, Michigan
Operations
The BWL recognized revenue of$10,301,584 and $10,547,324 in 2025 and 2024, respectively, for
water, electric and steam services provided to the City. The BWL incurred expenses for sewerage
services purchased from the City of$2,250,103 and $2,213,195 in 2025 and 2024, respectively.
Additionally, the BWL bills and collects sewerage fees for the City. In connection with these services,
the BWL received sewerage collection fees of$1,313,699 and $1,333,054 in 2025 and 2024,
respectively, included in other income.
Return on Equity
Effective July 1, 1992, the BWL entered into an agreement with the City to provide payment of a
return on equity in accordance with a formula based on net billed retail sales from its water, steam
heat and electric utilities for the preceding 12-month period ending May 31 of each year. Effective
March 1, 2002, the formula to calculate the amount owed to the City was modified to include
wholesale revenue generated from the BWL's electric, water, steam and chilled water utilities for the
preceding 12-month period ending May 31 of each year. Subject to the provisions of Act 94 Public
Acts of 1933, as amended, and the BWL's various bond covenants, this amount is payable to the City
in semi-annual installments. Effective July 1, 2020, the BWL and the City agreed to pay a flat amount
for fiscal years 2021 through 2022. In fiscal year 2023, a flat percentage of 6%was applied to
reported operating revenues, excluding inter-utility sales from providing retail water, electric, steam
and chilled water services. In fiscal year 2024 and 2025, a flat percentage of 6%was applied to
budgeted operating revenues, excluding inter-utility sales from providing retail water, electric, steam
and chilled water services. Under terms of these agreements, the BWL paid to the City$28,057,140
and $26,028,591 for 2025 and 2024, respectively, of operational cash flow in excess of debt service
requirements.
8. Retirement Plans
The BWL has three retirement plans. The BWL administers a tax-qualified, single-employer,
noncontributory, defined benefit public employee retirement pension plan (Defined Benefit Plan) and the
BWL has a tax-qualified, single-employer, noncontributory, defined contribution public employee
retirement plan (Defined Contribution Plan). The BWL also has a tax-qualified, single-employer, retiree
benefit plan to administer and fund retiree benefits (Retiree Benefit Plan).
Defined Benefit Plan
Plan Description -The BWL administers the Lansing Board of Water and Light Defined Benefit Plan
and Trust for Employees' Pensions (Defined Benefit Plan), a noncontributory single-employer defined
benefit pension plan for employees of the BWL. The benefit terms were established by the BWL and
may be amended by future BWL actions.
The Defined Benefit Plan issues a publicly available financial report that includes financial statements
and required supplementary information. That report may be obtained by writing to the Lansing Board
of Water and Light Defined Benefit Plan and Trust for Employees' Pensions, Attn: Retirement Plan
Committee, P.O. Box 13007, Lansing, Michigan 48901-3007.
Effective July 1, 1999, the Defined Benefit Plan was amended to include a medical benefit
component, in addition to the normal retirement benefits, to fund a portion of the postretirement
obligations for certain retirees and their beneficiaries. The funding of the medical benefit component
is limited to the amount of excess pension plan assets available for transfer, as determined by the
actuary. No medical benefits were paid by the Defined Benefit Plan during the years ended June 30,
2025 and 2024.
35
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
Employees Covered by Benefit Terms-At February 28, 2025 and February 29, 2024 (the most
recent actuarial valuation for funding purposes), Defined Benefit Plan membership consisted of the
following:
2025 2024
Inactive plan members or beneficiaries currently receiving
benefits 236 255
Inactive plan members entitled to but not yet receiving benefits 1 1
Active plan members 3 3
Total 240 259
The Defined Benefit Plan, by resolution of the Board of Commissioners, was closed to employees
hired subsequent to December 31, 1996, and a defined contribution retirement savings plan was
established for employees hired after December 31, 1996. Effective December 1, 1997, all active
participants in this plan were required to make an irrevocable choice to either remain in this plan
(defined benefit)or move to the newly established defined contribution plan. Those participants who
elected to move to the defined contribution plan received lump-sum distributions from this plan that
were rolled into their accounts in the newly established defined contribution plan. Of the 760
employees who were required to make this election, 602 elected to convert their retirement benefits
to the newly established defined contribution plan. As a result of this action, effective December 1,
1997, the Board of Commissioners transferred $75,116,470 to the newly established defined
contribution plan, reflecting the plan participants' accumulated benefits as of said date.
Benefits Provided -The Defined Benefit Plan provides retirement, early retirement, disability,
termination and death benefits. The Plan provides for an annual benefit upon normal retirement age
equal to the product of the total number of years of credited service multiplied by a percentage equal
to 1.80% of the highest annual pay during the last 10 years of service, paid in equal monthly
installments.
Payments will either be nonincreasing or increase only as follows: (a) By an annual percentage
increase that does not exceed the annual percentage increase in a cost-of-living index that is based
on prices of all items and issued by the Bureau of Labor Statistics; (b)To the extent of the reduction
in the amount of the employee's payments to provide for a survivor benefit upon death, but only if the
beneficiary whose life was being used to determine the distribution period described in Subsection 8
dies or is no longer the employee's beneficiary pursuant to a qualified domestic relations order within
the meaning of Internal Revenue Code Section 414(p); (c)To provide cash refunds of employee
contributions upon the employee's death; or(d)To pay increased benefits that result from a plan
amendment.
Contributions -Article 9, Section 24 of the State of Michigan constitution requires that financial
benefits arising on account of employee service rendered in each year be funded during that year.
Accordingly, the BWL retains an independent, external actuary to determine the annual contribution.
The actuarially determined contribution is the estimated amount necessary to finance the costs of
benefits earned by plan members during the year, with an additional amount to finance any unfunded
accrued liability. There was no contribution required for the years ended June 30, 2024 and 2025.
Plan documents do not require participant contributions.
36
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
Net Pension Asset-The components of the net pension asset of the BWL at June 30, 2025 and
June 30, 2024 were as follows (in thousands):
2025 2024
Total pension liability $ 39,344 $ 42,054
Plan fiduciary net pension 47,990 48,534
Total $ (8,646) $ (6,480)
Plan fiduciary net position, as a percentage of the total pension
liability 121.98 % 115.41 %
The BWL has chosen to use June 30, 2025 as its measurement date for fiscal year 2025. The
June 30, 2025 reported net pension asset was determined using a measure of the total pension
liability and the pension net position as of June 30, 2025. The June 30, 2025 total pension liability
was determined by an actuarial valuation as of February 28, 2025, which used update procedures to
roll forward the estimated liability to June 30, 2025.
The BWL has chosen to use June 30, 2024 as its measurement date for fiscal year 2024. The
June 30, 2024 reported net pension asset was determined using a measure of the total pension
liability and the pension net position as of June 30, 2024. The June 30, 2024 total pension liability
was determined by an actuarial valuation as of February 29, 2024, which used update procedures to
roll forward the estimated liability to June 30, 2024.
37
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
Changes in the net pension asset during the measurement years were as follows:
In Thousands
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability(Asset)
Balance, June 30, 2023 $ 44,514 $ 49,523 $ (5,009)
Changes for the year:
Service cost 31 - 31
Interest 2,523 - 2,523
Differences between expected and actual
experience (18) - (18)
Changes in assumptions - - -
Net investment income - 4,134 (4,134)
Benefit payments, including refunds (4,996) (4,996) -
Administrative expenses - (127) 127
Miscellaneous other charges - - -
Net changes (2,460) (989) (1,471)
Balances, June 30, 2024 42,054 48,534 (6,480)
Changes for the year:
Service cost 32 - 32
Interest 2,382 - 2,382
Differences between expected and actual
experience (352) - (352)
Changes in assumptions - - -
Net investment income - 4,393 (4,393)
Benefit payments, including refunds (4,772) (4,772) -
Administrative expenses - (165) 165
Miscellaneous other charges - - -
Net changes (2,710) (544) (2,166)
Balance, June 30, 2025 $ 39,344 $ 47,990 $ (8,646)
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to Pensions - For the year ended June 30, 2025, the BWL recognized pension expense of
($1,217,045). At 2025, the BWL reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Deferred
Outflows of Deferred Inflows
Resources of Resources
Net difference between projected and actual earnings on
pension plan investments $ - $ 744,696
38
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
For the year ended June 30, 2024, the BWL recognized pension expense of($39,352). At June 30,
2024, the BWL reported deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
Deferred
Outflows of Deferred Inflows
Resources of Resources
Net difference between projected and actual earnings on
pension plan investments $ 204,912 $ -
Amounts reported as deferred outflows of resources and deferred inflows of resources related to
pensions will be recognized in pension expense as follows:
Years Ending
June 30:
2026 $ 1,007,204
2027 (838,231)
2028 (588,209)
2029 (325,460)
Total $ (744,696)
Actuarial Assumptions-The total pension liability in the June 30, 2025 and June 30, 2024 actuarial
valuation was determined using the following actuarial assumptions, applied to all periods included in
the measurement:
2025 2024
Inflation 2.25 % 2.25 %
Salary increases 3.50 3.50
Investment rate of return 6.00 6.00
Mortality rates were based on the PUB-2010 General Mortality Table with MP-2021 Improvement
Scale for the June 30, 2025 and 2024 valuations.
The most recent experience review was completed in 2014. Since the Defined Benefit Plan covered 3
active participants in fiscal year 2025 and fiscal year 2024, assumptions like termination, retirement
and disability have an immaterial impact on the results and have not been changed.
Discount Rate -The discount rate used to measure the total pension liability was 6.0% in 2025 and
2024. The projection of cash flows used to determine the discount rate assumed that BWL
contributions will be made at rates equal to the actuarially determined contribution rates.
Projected Cash Flows
Based on those assumptions, the Defined Benefit Plan's fiduciary net position was projected to be
available to make all projected future benefit payments of current active and inactive employees.
Therefore, the long-term expected rate of return on the Defined Benefit Plan investments was applied
to all periods of projected benefit payments to determine the total pension asset.
39
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
The long-term expected rate of return on Defined Benefit Plan investments was determined using a
building-block method in which best-estimate ranges of expected future real rates of return (expected
returns, net of pension plan investment expense and inflation) are developed for each major asset
class. These ranges are combined to produce the long-term expected rate of return by weighting the
expected future real rates of return by the target asset allocation percentage and by adding expected
inflation. Best estimates of arithmetic real rates of return as of June 30, 2025 and 2024 for each major
asset class included in the Defined Benefit Plan's target asset allocation, as disclosed in the Defined
Benefit Plan's financial statements, are summarized in the following table:
2025 Long- 2024 Long-
Term Term
Expected Expected
Real Rate of Real Rate of
Asset Class Return Return
Core bonds 2.52 % 2.56 %
Multi-sector 3.44 3.50
Liquid absolute return 3.25 3.25
U.S. large cap equity 7.20 7.15
U.S. small cap equity 8.59 8.58
Non-U.S. equity 8.20 8.26
Core real estate 6.45 6.49
Sensitivity of the Net Pension Asset to Changes in the Discount Rate -The following presents
the net pension asset of the BWL at June 30, 2025, calculated using the discount rate of 6.00%, as
well as what the BWL's net pension asset would be if it were calculated using a discount rate that is
1-percentage point lower(5.00%) or 1-percentage-point higher(7.00%)than the current rate:
Current
1% Decrease Discount Rate 1% Increase
(5.00%) (6.00%) (7.00%)
Net pension liability (asset) of the BWL $ (4,981,548) $ (8,646,252) $ (10,354,287)
The following presents the net pension asset of the BWL at June 30, 2024, calculated using the
discount rate of 6.00%, as well as what the BWL's net pension asset would be if it were calculated
using a discount rate that is 1-percentage-point lower(5.00%) or 1-percentage-point higher(7.00%)
than the current rate:
Current
1% Decrease Discount Rate 1% Increase
(5.00%) (6.00%) (7.00%)
Net pension liability (asset)of the BWL $ (2,557,349) $ (6,479,599) $ (8,368,884)
Defined Benefit Plan Fiduciary Net Position - Detailed information about the Defined Benefit Plan's
fiduciary net position is available in the separately issued financial report. For the purpose of
measuring the net pension asset, deferred outflows of resources and deferred inflows or resources
related to pension and pension expense, information about the Defined Benefit Plan's fiduciary net
position and addition to/deduction from fiduciary net position have been determined on the same
basis as they are reported by the Defined Benefit Plan. The Defined Benefit Plan uses the economic
resources measurement focus and the full accrual basis of accounting. Investments are stated at fair
value. Contribution revenue is recorded as contributions are due, pursuant to legal requirements.
Benefit payments and refunds of employee contributions are recognized as expense when due and
payable in accordance with the benefit terms.
40
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
Defined Contribution Plan
The Lansing Board of Water and Light Defined Contribution Plan and Trust 1 (Defined Contribution
Plan)was established by the BWL in 1997 under Section 5-203.10 of the City Charter. The Defined
Contribution Plan covers substantially all full-time employees hired after December 31, 1996. In
addition, 602 employees hired before January 1, 1997 elected to convert their retirement benefits
from the Defined Benefit Plan effective December 1, 1997.
The Defined Contribution Plan issues a publicly available financial report. That report may be
obtained by writing to the Lansing Board of Water and Light Defined Contribution Plan and Trust 1,
Attn: Retirement Plan Committee, P.O. Box 13007, Lansing, Michigan 48901-3007.
The Defined Contribution Plan operates as a money purchase pension plan and meets the
requirements of Sections 401(a) and 501(a)of the IRC of 1986, as amended from time to time.
For employees hired before January 1, 1997, the BWL is required to contribute 15.0% of the
employees' compensation. For employees hired after January 1, 1997, the BWL is required to
contribute 9.5% of the employees' compensation. In addition, the BWL is required to contribute 3.0%
of the employees'compensation for all employees who are not eligible to receive overtime pay and
0.5% of the employees' compensation for all nonbargaining employees. No participant contributions
are required.
During the years ended June 30, 2025 and 2024, the BWL contributed $8,970,407 and $9,435,006,
respectively. The BWL's contributions are recognized in the period that the contributions are due.
Basis of Accounting -The Defined Contribution Plan's financial statements are prepared using the
accrual method of accounting in accordance with Governmental Accounting Standards Board (GASB)
Statement No. 67, Financial Reporting for Pension Plans.
Valuation of Investments and Income Recognition -The Defined Contribution Plan investments
are stated at fair market value based on closing sales prices reported on recognized securities
exchanges on the last business day of the year, or, for listed securities having no sales reported and
for unlisted securities, upon the last reported bid prices on that date. The mutual funds are valued at
quoted market prices, which represent the net asset values of shares held by the Defined
Contribution Plan at year end.
Purchases and sales of investments are recorded on a trade-date basis. Interest income is accrued
when earned. Dividend income is recorded on the ex-dividend date.
Regulatory Status -The Defined Contribution Plan is not subject to the reporting requirements of the
Employee Retirement Income Security Act of 1974 (ERISA)as it has been established for the benefit
of a governmental unit.
Retiree Benefit Plan (OPEB)
Plan Description -The Postretirement Benefit Plan and Trust for Eligible Employees of Lansing
Board of Water and Light (Retiree Benefit Plan) is a single-employer retiree benefit plan. The Plan
provides medical, dental and life insurance benefits in accordance with Section 5-203 of the City
Charter. Substantially all of the BWL's employees may become eligible for healthcare benefits and life
insurance benefits if they reach normal retirement age while actively employed full-time by working for
the BWL. There were 748 participants eligible to receive benefits at June 30, 2025 and 755
participants eligible at June 30, 2024.
41
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
In October 1999, the BWL formed a Voluntary Employee Benefit Administration (VEBA)trust for the
purpose of accumulating assets sufficient to fund retiree healthcare insurance costs in future years.
During the years ended June 30, 2025 and 2024, the cost to BWL of maintaining the Retiree Benefit
Plan and Trust was$61,852 and $65,286, of which respectively, was incurred as direct costs of
benefits.
The Retiree Benefit Plan issues a publicly available financial report. That report may be obtained by
writing to the Postretirement Benefit Plan and Trust for Eligible Employees of Lansing Board of Water
and Light, Attn: Retirement Plan Committee, P.O. Box 13007, Lansing, Michigan 48901-3007.
Benefits Provided -The Plan provides medical, dental and life insurance benefits in accordance with
Section 5-203 of the City Charter. Benefits are provided through third-party insurers carriers. The plan
coverage includes payment of deductibles and co-pays for health services to all employees hired
before January 1, 2009. All employees hired after that date must pay a percentage of their health
premium.
Employees covered by benefit terms. At June 30, 2025, the following employees were covered by the
benefit terms:
Active plan members (not eligible to receive benefits) 791
Disabled participants 65
Retired participants 534
Surviving spouses 149
Total 1,539
At June 30, 2024, the following employees were covered by the benefit terms:
Active plan members (not eligible to receive benefits) 778
Disabled participants 67
Retired participants 532
Surviving spouses 156
Total 1,533
Contributions - Section 5-203 of the City Charter grants the authority to establish and amend the
contribution requirement to the BWL. The BWL establishes its minimum contribution based on an
actuarially determined rate. For the years ended June 30, 2025 and 2024, the actual contribution
rates of the BWL were 0.08% of covered-employee payroll.
Net OPEB Liability(Asset) -The BWL has chosen to use June 30, 2025 as its measurement date
for fiscal year 2025. The June 30, 2025 reported net OPEB liability(asset)was determined using a
measure of the total OPEB liability and the OPEB net position as of June 30, 2025. The June 30,
2025 total OPEB liability was determined by an actuarial valuation as of February 28, 2025, which
used update procedures to roll forward the estimated liability to June 30, 2025.
The BWL has chosen to use June 30, 2024 as its measurement date for fiscal year 2024. The
June 30, 2024 reported net OPEB liability (asset)was determined using a measure of the total OPEB
liability and the OPEB net position as of June 30, 2024. The June 30, 2024 total OPEB liability was
determined by an actuarial valuation as of February 29, 2024, which used update procedures to roll
forward the estimated liability to June 30, 2024.
42
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
Actuarial Assumptions-The total OPEB liability in the June 30, 2025 actuarial valuations were
determined using the following actuarial assumptions, applied to all periods included in the
measurements, unless otherwise specified:
Inflation: 2.25%
Payroll Growth: 9.0%growth at age 25 and decreases to 5.3%for ages
60+. This percentage includes general wage inflation
and merit/productivity increases.
Investment rate of return: 6.5%, net of OPEB plan investment expense, including
inflation
Healthcare cost trend rates: Medical/RX
FYE Pre-65 Post-65 Part B Dental
2025 7.50% 5.75% 4.00% 4.00%
2026 7.25 5.50 4.25 4.00
2027 7.00 5.25 4.50 4.00
2028 6.75 5.00 4.75 4.00
2029 6.50 4.75 5.00 4.00
2030 6.25 4.50 5.00 4.00
2031 6.00 4.50 5.00 4.00
2032 5.75 4.50 5.00 4.00
2033 5.50 4.50 5.00 4.00
2034 5.25 4.50 5.00 4.00
2035 5.00 4.50 5.00 4.00
2036 4.75 4.50 5.00 4.00
2037+ 4.50 4.50 5.00 4.00
The total OPEB liability in the June 30, 2024 actuarial valuations were determined using the following
actuarial assumptions, applied to all periods included in the measurements, unless otherwise
specified:
Inflation: 2.25%
Payroll Growth: 9.0%growth at age 25 and decreases to 5.3%for ages
60+. This percentage includes general wage inflation
and merit/productivity increases.
Investment rate of return: 6.5%, net of OPEB plan investment expense, including
inflation
Healthcare cost trend rates: Medical/RX
FYE Pre-65 Post-65 Part B Dental
2024 7.25% 5.50% 3.75% 4.25%
2025 7.00 5.25 4.00 4.00
2026 6.75 5.00 4.25 4.00
2027 6.50 4.75 4.50 4.00
2028 6.25 4.50 4.75 4.00
2029 6.00 4.50 5.00 4.00
2030 5.75 4.50 5.00 4.00
2031 5.50 4.50 5.00 4.00
2032 5.25 4.50 5.00 4.00
2033 5.00 4.50 5.00 4.00
2034 4.75 4.50 5.00 4.00
2035+ 4.50 4.50 5.00 4.00
43
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
2025 and 2024 Mortality rates were based on the PUBH-2010 General Employee Mortality Table fully
generational using Scale MP-2021.
Best actuarial practices call for a periodic assumption review and BWL completed an experience
study in 2022.
BWL's policy in regard to the allocation of invested assets is established and may be amended by the
BWL by a majority vote of the Board of Commissioners. It is the policy of the BWL to pursue an
investment strategy that reduces risk through the prudent diversification of the portfolio across a
broad selection of distinct asset classes. The following was the adopted asset allocation policy as of
June 30, 2025 and 2024:
2025 Target 2024 Target
Asset Class Allocation Allocation
Core bonds 15.00 % 15.00 %
Multi-sector 5.00 5.00
Liquid absolute return 5.00 5.00
U.S. large cap equity 25.00 25.00
U.S. small cap equity 15.00 15.00
Non-U.S. equity 20.00 20.00
Core real estate 8.00 8.00
Value add real estate 7.00 7.00
The long-term expected rate of return on OPEB plan investments was determined using a building-
block method in which best-estimate ranges of expected future real rates of return (expected returns,
net of OPEB plan investment expense and inflation) are developed for each major asset class. These
ranges are combined to produce the long-term expected rate of return by weighting the expected
future real rates of return by the target asset allocation percentage and by adding expected inflation.
The best estimates of arithmetic real rates of return for each major asset class as of June 30, 2025
and 2024 are summarized in the following table:
2025 Long- 2024 Long-
Term Term
Expected Expected
Real Rate of Real Rate of
Asset Class Return Return
Core bonds 2.52 % 2.56 %
Multi-sector 3.44 3.50
Liquid absolute return 3.25 3.25
U.S. large cap equity 7.20 7.15
U.S. small cap equity 8.59 8.58
Non-U.S. equity 8.20 8.26
Core real estate 6.45 6.49
Value add real estate 7.95 7.99
44
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
For the June 30, 2025 valuation, the long-term expected rate of return was 6.50%. The discount rate
used when the OPEB plan investments are insufficient to pay for future benefit payments was
selected from the range of indices as shown in the table below, where the range is given as the
spread between the lowest and highest rate shown. The final equivalent single discount rate used for
the June 30, 2025 valuation was 6.50% with the expectation that BWL will continue contributing the
actuarially determined contribution and/or paying for the pay-go cost.
Long-Term Long-Term
Expected Expected
Real Rate of Real Rate of
Return Return Prior
Asset Class Current Year Year
Fidelity 20-year GO Municipal Bond Index 4.71 % 3.97 %
Actual Discount Rate Used 6.50 6.50
Discount Rate -The discount rate used to measure the total OPEB liability was 6.50%for June 30,
2025 and 2024. The projection of cash flows used to determine the discount rate assumed that BWL
contributions will be made at rates equal to the actuarially determined contribution rates. Based on
those assumptions, the OPEB plan's fiduciary net position was projected to be available to make all
projected OPEB payments for current active and inactive employees. Therefore, the long-term
expected rate of return on OPEB plan investments was applied to all periods of projected benefit
payments to determine the total OPEB liability.
In Thousands
Total Pension Plan Fiduciary Net OPEB
Liability Net Position Liability(Asset)
(a) (b) (a)-(b)
Balance, June 30, 2024 $ 168,403 $ 253,396 $ (84,993)
Changes for the year:
Service cost 4,479 - 4,479
Interest 10,640 - 10,640
Change in benefit terms - - -
Differences between expected and actual
experience 11,189 - 11,189
Changes in assumptions 2,901 - 2,901
Contributions, employer - 62 (62)
Contributions, employee - - -
Net investment income - 24,832 (24,832)
Benefit payments (9,563) (9,563) -
Administrative expenses - (370) 370
Net changes 19,645 14,961 4,684
Balance, June 30, 2025 $ 188,049 $ 268,357 $ (80,308)
45
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
In Thousands
Total Pension Plan Fiduciary Net OPEB
Liability Net Position Liability(Asset)
(a) (b) (a)-(b)
Balance, June 30, 2023 $ 163,829 $ 238,471 $ (74,642)
Changes for the year:
Service cost 4,201 - 4,201
Interest 10,355 - 10,355
Change in benefit terms - - -
Differences between expected and actual
experience (801) - (801)
Changes in assumptions - - -
Contributions, employer - 65 (65)
Contributions, employee - - -
Net investment income - 24,300 (24,300)
Benefit payments (9,181) (9,181) -
Administrative expenses - (259) 259
Net changes 4,575 14,925 (10,350)
Balance, June 30, 2024 $ 168,403 $ 253,396 $ (84,993)
Sensitivity of the Net OPEB Liability (Asset)to Changes in the Discount Rate-The following
presents the net OPEB liability (asset)of BWL, as well as what BWL's net OPEB liability (asset)
would be if it were calculated using a discount rate that is 1 percentage point lower(5.5%)or
1-percentage-point higher(7.5%)than the current discount rate (6.5%) as of June 30, 2025:
June 30, 2025
Current
1% Decrease Discount Rate 1% Increase
NET OPEB liability (asset) $ (56,789,611) $ (80,308,338) $ (99,892,293)
Sensitivity of the Net OPEB Liability (Asset) to Changes in the Discount Rate-The following
presents the net OPEB liability (asset)of BWL, as well as what BWL's net OPEB liability (asset)
would be if it were calculated using a discount rate that is 1 percentage point lower(5.5%)or
1-percentage-point higher(7.5%)than the current discount rate (6.5%) as of June 30, 2024:
June 30, 2024
Current
1% Decrease Discount Rate 1% Increase
NET OPEB liability (asset) $ (65,718,636) $ (84,992,538) $ (101,207,086)
46
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
Sensitivity of the Net OPEB Liability(Asset) to Changes in the Healthcare Cost Trend Rates -
The following presents the net OPEB liability (asset)of BWL, as well as what BWL's net OPEB
liability (asset)would be if it were calculated using healthcare cost trend rates that are 1-percentage-
point lower or 1-percentage-point higher than the current healthcare cost trend rates as of June 30,
2025:
June 30, 2025
Healthcare Cost
1% Decrease Trend Rates 1% Increase
Net OPEB liability (asset) $ (101,368,187) $ (80,308,338) $ (54,595,655)
Sensitivity of the Net OPEB Liability(Asset) to Changes in the Healthcare Cost Trent Rates -
The following presents the net OPEB liability (asset)of BWL, as well as what BWL's net OPEB
liability (asset)would be if it were calculated using healthcare cost trend rates that are 1-percentage-
point lower or 1-percentage-point higher than the current healthcare cost trend rates as of June 30,
2024:
June 30, 2024
Healthcare Cost
1% Decrease Trend Rates 1% Increase
Net OPEB liability (asset) $ (102,871,148) $ (84,992,538) $ (63,323,723)
OPEB Plan Fiduciary Net Position - Detailed information about the OPEB plan's fiduciary net
position is available in the separately issued Postretirement Benefit Plan and Trust for Eligible
Employees of Lansing Board of Water and Light June 30, 2025 GASB 74/75 Report, issued July 29,
2025.
For the year ended June 30, 2025, the Plan recognized OPEB expense of($6,536,734). At June 30,
2025, the Plan reported deferred outflows of resources and deferred inflows of resources related to
OPEB from the following sources:
Deferred
Outflows of Deferred Inflows
Resources of Resources
Differences between expected and actual experience $ 12,031,440 $ 3,146,457
Changes of assumptions 6,269,367 840,143
Net difference between projected and actual earnings on
OPEB plan investments - 7,784,221
Total $ 18,300,807 $ 11,770,821
Amounts reported as deferred outflows of resources and deferred inflows of resources related to
OPEB will be recognized in OPEB expense as follows:
Years Ending
June 30:
2026 $ 4,721,458
2027 (1,555,111)
2028 (677,517)
2029 460,656
2030 2,011,348
Thereafter 1,569,152
Total $ 6,529,986
47
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
For the year ended June 30, 2024, the Plan recognized OPEB expense of$(11,728,112). At June 30,
2024, the Plan reported deferred outflows of resources and deferred inflows of resources related to
OPEB from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Differences between expected and actual experience $ 3,256,591 $ 6,079,101
Changes of assumptions 6,625,332 4,762,702
Net difference between projected and actual earnings on OPEB plan
investments - 3,792,920
Total $ 9,881,923 $ 14,634,723
Other Postretirement Benefits
The BWL offers its employees a deferred compensation plan, created in accordance with IRC 457.
The BWL makes contributions of$1,000 annually for the employees as of January 1 of each year,
during the month of January. The BWL also will match employee contributions at one dollar for every
one dollar up to $1,500 in a calendar year.
9. Commitments and Contingencies
At June 30, 2025 and 2024, the BWL has two letters of credit in the amounts of$817,000 issued to the
Michigan Department of Natural Resources. The letters of credit were issued to satisfy requirements of
the Michigan Department of Natural Resources to provide financial assurance to the State of Michigan for
the cost of closure and post closure monitoring and maintenance of a landfill site operated by the BWL.
Through monitoring tests performed on the landfill sites operated by the BWL, it has been discovered that
the sites are contaminating the groundwater. The contamination does not pose a significant health risk
but does lower the quality of the groundwater. The BWL received landfill closure approval as well as
interim remediation approval. The BWL has estimated the total cost for remediation, including closure and
post closure cost of the landfills, and has recorded a liability of$5,451,766 and $5,389,412 for the years
ended June 30, 2025 and 2024, respectively. Certain remediation activities have commenced and are in
progress. The landfill sites are no longer receiving waste products. Landfill closure and post closure
requirements are associated with the Michigan Department of Environmental Quality. Annual post closure
costs of these landfill sites are not expected to exceed $380,000 annually and are included in the liability
above. Estimates will be revised as approvals are received from the State. In accordance with the
regulatory basis of accounting as per GASB 62 (see Note 1), the BWL recorded a corresponding
regulatory asset (see Note 6).
The BWL is subject to various laws and regulations with respect to environmental matters such as air and
water quality, soil contamination, solid waste disposal, handling of hazardous materials and other similar
matters. Compliance with these various laws and regulations could result in substantial expenditures. The
BWL has established a Designated Purpose Fund (see Note 1), of which one of the purposes of the fund
is to meet extraordinary expenditures resulting from responsibilities under environmental laws and
regulations. Management believes that all known or expected responsibilities to these various laws and
regulations by the BWL will be sufficiently covered by the Designated Purpose Fund and the
environmental remediation liability.
The BWL is involved in various other legal actions which have arisen in the normal course of business.
Such actions are usually brought for claims in excess of possible settlement or awards, if any, that may
result. After taking into consideration legal counsel's evaluation of pending actions, management has
recorded litigation reserve of$1,350,000 as of June 30, 2025, and $1,300,000 as of June 30, 2024 in
regard to specific pending legal cases.
48
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
Construction in progress consists of projects for expansion or additions to the utility plant. The estimated
additional cost to complete various projects is approximately$311,018,326 and $382,841,704 at June 30,
2025 and 2024, respectively. These projects will be funded through operational cash flow, revenue bonds
and grant funding, including the project funds reported as other assets.
10. Power Supply Purchase
In 1983, the BWL entered into power supply and project support contracts with MPPA, of which the BWL
is a member. Under the agreement, the BWL has the ability to purchase power from MPPA, will sell
power to MPPA at an agreed-upon rate, and will purchase 64.29% of the energy generated by MPPA's
37.22% ownership in Detroit Edison's Belle River Plant (Belle River), which became operational in August
1984.
Under the terms of its contract, the BWL must make minimum annual payments equal to its share of
capital and its share of the fixed operating costs of Belle River. The estimated required payments
presented below assume no early calls or refinancing of existing revenue bonds and a 3.0% annual
inflation of fixed operating costs, which include expected major maintenance projects.
Estimated Fixed Total
Years Capital Operating Costs Required
2026 $ 7,209,374 $ 19,089,625 $ 26,298,999
2027 7,206,328 17,752,801 24,959,129
2028 7,015,895 15,121,539 22,137,434
2029 4,314,902 16,093,497 20,408,399
2030 4,314,699 16,969,952 21,284,651
In addition to the above required payments, the BWL must pay for fuel, other operating costs and
transmission costs related to any kilowatt hours (KWHs) purchased under these contracts.
The BWL recognized expenses for 2025 and 2024 of$45,472,716 and $41,402,193, respectively, to
purchase power under the terms of this contract. The price of this power was calculated on a basis, as
specified in the contracts, to enable MPPA to recover its production, transmission and capital costs.
11. Estimated Liability for Excess Earnings on Water Supply and Electric Utility System Revenue
Bonds
In accordance with Section 148(f)(2) of the IRC of 1986, as amended, the BWL is required on each
anniversary date (July 1)of the Water Supply, Electric Utility and Steam Utility System Revenue Bonds,
Series 2013A, 2017A, 2019A, 2021A, 2021B and 2024A to compute amounts representing the
cumulative excess earnings on such bonds. That amount essentially represents a defined portion of any
excess of interest earned on funds borrowed over the interest cost of the tax-exempt borrowings.
Expense is charged (credited)annually in an amount equal to the estimated increase (decrease) in the
cumulative excess earnings for the year. On every fifth anniversary date and upon final maturity of the
bonds, the BWL is required to remit to the Internal Revenue Service the amount of any cumulative excess
earnings computed on the date of such maturity plus an amount equal to estimated interest earned on
previous years' segregated funds. The estimated liability for excess earnings was$4,403,955 and $0 at
2025 and 2024, respectively. In accordance with the requirements of the bond indenture, the BWL is
required to set aside any current year additions to this estimated liability in a rebate fund within 60 days of
the anniversary date of the bonds.
49
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Financial Statements
June 30, 2025 and 2024
12. Risk Management and Insurance
The BWL is exposed to various risks of loss related to property loss, torts, errors and omissions and
employee injuries (workers' compensation), as well as medical benefits provided to employees. The BWL
has purchased commercial insurance for certain general liability, business auto, excess liability, property
and boiler and machinery, public officials and employee liability claims, specific excess health insurance
claims and specific excess workers' compensation claims, subject to policy terms, limits, limitations and
deductibles. The BWL is self-insured for most workers' compensation and health insurance claims.
Settled claims relating to the commercial insurance have not exceeded the amount of insurance coverage
in any of the past three fiscal years.
The BWL estimates the liability for self-insured workers' compensation and health insurance claims that
have been incurred through the end of the fiscal year, including claims that have been reported as well as
those that have not yet been reported. Changes in the estimated liability for the past three fiscal years
were as follows:
Workers'Compensation Health Insurance
2025 2024 2023 2025 2024 2023
Unpaid claims,beginning $ 2,200,000 $ 2,200,000 $ 2,200,000 $ 1,893,351 $ 1,686,723 $ 1,773,595
Incurred claims,including
claims incurred but not
reported 52,674 49,474 24,127 26,150,581 23,176,317 20,178,663
Claim payments (52,674) (49,474) (24,127) (25,952,169) (22,969,689) (20,265,535)
Liability reduction (500,000) - - - - -
Unpaid claims
ending $ 1,700,000 $ 2,200,000 $ 2,200,000 $ 2,091,763 $ 1,893,351 $ 1,686,723
The liability for health insurance is included with accounts payable on the statement of net position.
13. Upcoming Pronouncements
GASB has approved, Statement No. 103, Financial Reporting Model Improvements and Statement No.
104, Disclosure of Certain Capital Assets. When they become effective, application of these standards
may restate portions of these financial statements.
14. Subsequent Events
The Board evaluated subsequent events through October 3, 2025, the date that the financial statements
were available to be issued, for events requiring recording or disclosure in the financial statements. There
are no subsequent events warranting disclosures.
50
REQUIRED SUPPLEMENTARY INFORMATION
Lansing Board of Water and Light
Defined Benefit Plan and Trust for Employees'Pensions
Required Supplementary Information Unaudited
Schedule of Changes in the BWL's
Net Pension Asset and Related Ratios
Last Ten Fiscal Years
(In Thousands)
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Total Pension Liability
Service cost $ 32 $ 31 $ 29 $ 26 $ 26 $ 42 $ 60 $ 50 $ 113 $ 223
Interest 2,382 2,523 2,721 2,974 3,212 3,566 3,691 4,031 4,317 4,625
Differences between expected and actual experience (352) (18) (981) 179 (968) (919) (743) (230) (383) 299
Changes in assumptions - - - 1,730 (366) 1,555 1,210 1,419 (857) (1,468)
Benefit payments,including refunds (4,772) (4,996) (5,142) (5,466) (5,658) (5,872) (6,143) (6,414) (7,473) (7,896)
Net Change in Total Pension Liability (2,710) (2,460) (3,373) (557) (3,754) (1,628) (1,925) (1,144) (4,283) (4,217)
Total Pension Liability,Beginning 42,054 44,514 47,887 48,444 52,198 53,826 55,751 56,895 61,178 65,395
Total Pension Liability,Ending 39,344 42,054 44,514 47,887 48,444 52,198 53,826 55,751 56,895 61,178
Plan Net Position
Net investment income 4,393 4,134 4,134 (5,399) 11,853 1,658 4,381 3,112 8,272 47
Administrative expenses (165) (128) (127) (134) (123) (145) (183) (255) (317) (388)
Benefit payments,including refunds (4,772) (4,996) (5,142) (5,466) (5,658) (5,872) (6,143) (6,414) (7,473) (7,896)
Other (477) -
Net change in Net Position Held in Trust (544) (990) (1,135) (10,999) 6,072 (4,836) (1,945) (3,557) 482 (8,237)
Net Position Restricted for Pensions,Beginning 48,534 49,523 50,659 61,658 55,586 60,422 62,367 65,924 65,442 73,679
Net Position Restricted for Pensions,Ending 47,990 48,534 49,523 50,659 61,658 55,586 60,422 62,367 65,924 65,442
BWL Net Pension Asset,Ending $ (8,646) $ (6,480) $ (5,009) $ (2,772) $ (13,214) $ (3,388) $ (6,596) $ (6,616) $ (9,029) $ (4,264)
Plan Net Position as a%of Total Pension Liability 122% 115% 111% 106% 127% 106% 112% 112% 116% 107%
Covered Employee Payroll $ 266 $ 262 $ 248 $ 238 $ 237 $ 240 $ 406 $ 603 $ 586 $ 772
BWL's Net Pension Asset as a%of Covered Employee Payroll (3,250%) (2,473%) (2,020%) (1,165%) (5,576%) (1,412%) (1,625%) (1,097%) (1,541%) (552%)
See notes to required supplementary information
51
Lansing Board of Water and Light
Defined Benefit Plan and Trust for Employees' Pensions
Required Supplementary Information(Unaudited)
Schedule of Employer Contributions
Last Ten Fiscal Years
(In Thousands)
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Actuarially determined contribution $ $ $ $ $ $ $ $ $ $
Contributions in relation to the actuarially determined contribution
Contribution Deficiency(Excess) $ $ $ $ $
Covered Employee Payroll $ 266 $ 262 $ 248 $ 238 $ 237 $ 240 $ 406 $ 603 $ 586 $ 772
Contributions as a Percentage of Covered Employee Payroll 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
See notes to required supplementary information
52
Postretirement Benefit Plan and Trust for
Eligible Employees of Lansing Board of Water and Light
Required Supplemental Information(Unaudited)
Schedule of Changes in BWL's
Net OPEB Liability(Asset)and Related Ratios
Last Ten Fiscal Years'
(In Thousands)
2025 2024 2023 2022 2021 2020 2019 2018 2017
Total OPEB Liability
Service cost $ 4,479 $ 4,201 $ 3,452 $ 3,299 $ 3,396 $ 3,245 $ 4,403 $ 4,827 $ 3,130
Interest 10,640 10,355 9,827 9,871 10,535 10,804 14,920 15,039 14,226
Changes in benefit terms - - - - - - (415) - -
Differences between expected and actual experience 11,189 (801) 4,770 (1,084) (8,794) (6,093) (5,231) (9,880) 5,281
Changes in assumptions 2,901 - - 10,173 (3,752) 7,254 (59,336) (1,728) (2,027)
Benefit payments,including refunds (9,563) (9,181) (10,628) (13,493) (8,344) (9,157) (9,278) (10,395) (9,574)
Net Change in Total OPEB Liability 19,646 4,574 7,421 8,766 (6,959) 6,053 (54,937) (2,137) 11,036
Total OPEB Liability,Beginning 168,403 163,829 156,410 147,644 154,603 148,550 203,487 205,624 194,588
Total OPEB Liability,Ending 188,049 168,403 163,831 156,410 147,644 154,603 148,550 203,487 205,624
Trust Net Position
Contributions,employer 62 65 68 13,493 8,344 9,157 9,278 10,395 9,574
Net investment income 24,832 24,300 21,226 (19,247) 49,387 4,158 11,688 11,039 18,040
Administrative expenses (370) (259) (336) (354) (449) (512) (569) (634) (705)
Benefit payments,including refunds (9,563) (9,181) (10,628) (13,493) (8,344) (9,157) (9,278) (10,395) (9,574)
Net change in Net Position Held in Trust 14,961 14,925 10,330 (19,601) 48,938 3,646 11,119 10,405 17,335
Trust Fiduciary Net Position,Beginning 253,396 238,471 228,142 247,743 198,805 195,159 184,040 173,635 156,300
Trust Fiduciary Net Position,Ending 268,357 253,396 238,472 228,142 247,743 198,805 195,159 184,040 173,635
BWL Net OPEB Liability(Asset),Ending $ (80,308) $ (84,993) $ (74,641) $ (71,732) $(100,099) $(44,202) $(46,609) $19,447 $31,989
Trust Fiduciary Net Position as a%of Total OPEB Liability(Asset) 142.71% 150.47% 145.56% 145.86% 167.80% 128.59% 131.38% 90.44% 84.44%
Covered Employee Payroll $ 82,440 $ 77,109 $ 69,744 $ 62,976 $ 60,269 $ 58,198 $ 56,785 $55,650 $54,383
BWL's Net OPEB Liability(Asset)as a%of Covered Employee Payroll (97.41%) (110.22%) (107.02%) (113.90%) (166.09%) (75.95%) (82.08%) 34.95% 58.82%
`GASB Statement No.74 was implemented as of June 30,2017. Information from 2016 is not available and this schedule will be presented on a prospective basis.
See notes to required supplementary information
53
Postretirement Benefit Plan and Trust for
Eligible Employees of Lansing Board of Water and Light
Required Supplemental Information (Unaudited)
Schedule of Employer Contributions
Last Ten Fiscal Years
(In Thousands)
Employer Contributions Difference of Percentage of
Required to Covered Actual
Fiscal Year Actual Employee Contributions to
Ended Required Actual Contributions Payroll Covered Payroll
6/30/2016 $ 5,788 $ 9,423 $ 3,635 $ 53,893 17%
6/30/2017 7,508 9,574 2,066 54,383 18%
6/30/2018 7,535 10,395 2,860 55,650 19%
6/30/2019 7,031 9,278 2,247 56,785 16%
6/30/2020 - 9,157 9,157 58,198 16%
6/30/2021 220 8,344 8,124 60,269 14%
6/30/2022 - 13,493 13,493 62,976 21%
6/30/2023 - 68 68 69,744 0%
6/30/2024 - 65 65 77,109 0%
6/30/2025 - 62 62 82,440 0%
See notes to required supplementary information
54
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Required Supplementary Information (Unaudited)
Years Ended June 30, 2024 and 2024
1. Defined Benefit Plan
Actuarial valuation information relative to the determination of contributions:
Valuation date June 30, 2025, based on roll-forward of February 28, 2025
valuation
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age method
Amortization method Level dollar over a 15-year period
Remaining amortization period 15 years
Asset valuation method Market value of the assets
Inflation 2.25%
Salary increases 3.5% per year
Investment rate of return 6.0% per year compounded annually
Mortality PUB-2010 General Mortality Table with MP-2021
Improvement Scale
Changes to assumptions: No changes in assumptions.
Actuarial valuation information relative to the determination of contributions:
Valuation date June 30, 2024, based on roll-forward of February 29, 2024
valuation
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age method
Amortization method Level dollar over a 15-year period
Remaining amortization period 15 years
Asset valuation method Market value of the assets
Inflation 2.25%
Salary increases 3.5% per year
Investment rate of return 6.0% per year compounded annually
Mortality PUB-2010 General Mortality Table with MP-2021
Improvement Scale
Changes to assumptions: No changes in assumptions.
55
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Required Supplementary Information (Unaudited)
Years Ended June 30, 2024 and 2024
Significant Changes
June 30, 2025
• Difference between actual and expected experience-The $352.41K actuarial gain on the
Total Pension Liability for the fiscal year ending June 30, 2025 is primarily attributable to
favorable demographic experience.
• Assumption change- None.
• Investment gain -The plan experienced a $1.63M gain on plan assets during the fiscal year
ending June 30, 2025 due to the actual return on assets equaling 9.52%vs. an expected
return of 6.00%.
June 30, 2024
• Difference between actual and expected experience-The$18.1 K actuarial gain on the Total
Pension Liability for the fiscal year ending June 30, 2024 is primarily attributable to favorable
demographic experience.
• Assumption change- None.
June 30, 2023
• Difference between actual and expected experience-The $981 K actuarial gain on the Total
Pension Liability for the fiscal year ending June 30, 2023 is primarily attributable to participant
deaths.
• Assumption change- None.
June 30, 2022
• Difference between actual and expected experience-The $179K actuarial gain on the Total
Pension Liability for the fiscal year ending June 30, 2022 is primarily attributable to the
difference between actual experience and demographic assumptions.
• Assumption change -The plan experienced a $1.73MM actuarial loss due to the change in
the mortality improvement scale and the decrease in the discount rate from 6.50% to 6.00%.
Updating the mortality improvement scale to the MP-2021 scale resulted in a $120K actuarial
loss and decreasing the discount rate resulted in a $1.61 MM actuarial loss. The combination
of these two changes resulted in an overall actuarial loss of$1.73MM.
June 30, 2021
• Difference between actual and expected experience-The $968K actuarial gain on the Total
Pension Liability for the fiscal year ending June 30, 2021 is primarily attributable to participant
deaths.
• Assumption change-The plan experienced a $366K actuarial gain due to the change in the
mortality improvement scale.
June 30, 2020
• Difference between actual and expected experience-The $.92MM actuarial gain on the Total
Pension Liability for the fiscal year ending June 30, 2020 is primarily attributable to participant
deaths.
56
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Required Supplementary Information (Unaudited)
Years Ended June 30, 2024 and 2024
• Assumption change-The plan experienced a $1.55MM actuarial loss due to the change in
the mortality improvement scale and the decrease the discount rate from 7.00% to 6.50%.
Updating the mortality improvement scale to the MP-2019 scale resulted in a $.22MM
actuarial gain and decreasing the discount rate resulted in a $1.77MM actuarial loss. The
combination of these two changes resulted in an overall actuarial loss of$1.55MM.
June 30, 2019
• Difference between actual and expected experience-The $.74MM gain on the Total Pension
Liability for the fiscal year ending June 30, 2019 is primarily attributable to participant deaths.
• Assumption change-The plan experienced a $1.21 MM loss due to the change of the
mortality assumption from the RP-2014 Total Dataset Mortality adjusted to 2006 and
projected generationally using the MP-2017 improvement scale to the PUB-2010 General
Employees Mortality, projected generationally using the MP-2018 improvement scale.
June 30, 2018
• Difference between actual and expected experience-The $230,000 gain on the Total
Pension Liability for the fiscal year ending June 30, 2018 is primarily attributable to participant
deaths.
• Assumption change-Assumptions for the discount rate and expected return on assets were
decreased from 7.50% to 7.00% to reflect the expected long term rate of return on the trust.
June 30, 2017
• Difference between actual and expected experience-The $383,000 gain on the Total
Pension Liability for the fiscal year ending June 30, 2017 is primarily attributable to participant
deaths.
• Assumption change -The plan experienced a $.86MM gain due to the change of the mortality
assumption from the RP-2014 table projected generationally with Scale MP-2014 with
MP-2016 Improvement Scale.
June 30, 2016
• Difference between actual and expected experience-The $299,000 loss on the Total
Pension Liability for the fiscal year ending June 30, 2016 is primarily attributable to participant
deaths.
• Assumption change-The plan experienced a $1.47MM gain due to the change of the
mortality assumption from the RP-2014 table projected generationally with Scale MP-2014
with MP-2015 Improvement Scale.
57
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Required Supplementary Information (Unaudited)
Years Ended June 30, 2024 and 2024
2. Postretirement Benefit Plan
Actuarial valuation information relative to the determination of contributions:
Valuation date June 30, 2025, based on roll-forward of February 28, 2025
valuation
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age normal level % of salary method
Amortization method Level dollar over a 30-year closed period
Remaining amortization period 23 years
Inflation 2.25%
Salary increases 9.0% growth at age 25 and decreases to 5.3%for ages 60+.
This percentage includes general wage inflation and merit/
productivity increases.
Investment rate of return 6.5% per year compounded annually
Mortality PUBH-2010 General Employees Mortality Table projected
generationally using MP-2021 scale
Actuarial valuation information relative to the determination of contributions:
Valuation date June 30, 2024, based on roll-forward of February 29, 2024
valuation
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age normal level % of salary method
Amortization method Level dollar over a 30-year closed period
Remaining amortization period 24 years
Inflation 2.25%
Salary increases 9.0% growth at age 25 and decreases to 5.3%for ages 60+.
This percentage includes general wage inflation and merit/
productivity increases.
Investment rate of return 6.5% per year compounded annually
Mortality PUBH-2010 General Employees Mortality Table projected
generationally using MP-2021 scale
58
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Required Supplementary Information (Unaudited)
Years Ended June 30, 2024 and 2024
Significant Changes:
June 30, 2025
• Difference between actual and expected experience-The $11.2M actuarial loss on the Total
OPEB Liability for the fiscal year ending June 30, 2025 is primarily attributable to higher than
expected 2025 per capita claims cost. The 2025 Humana premiums for post-65 participants
increased 46% when compared to premiums for 2024.
• Assumption Change -The $2.9M actuarial loss on the Total OPEB Liability for the fiscal year
ending June 30, 2025 is attributable to updating the medical trend assumptions to those
described in the Michigan Uniform Assumptions for 2025.
• Investment gain -The $8.7M investment gain during the fiscal year ending June 30, 2025 is
attributable an actual return on assets of 9.99% vs. an expected return of 6.50%.
June 30, 2024
• Difference between actual and expected experience-The $800.91K actuarial gain on the
Total OPEB Liability for the fiscal year ending June 30, 2024 is attributable to the combination
of favorable demographic experience and lower than expected per capita claims cost.
• Assumption change- None.
• Investment gain -The $9.1 M investment gain during the fiscal year ending June 30, 2024 is
attributable an actual return on assets of 10.39%vs. an expected return of 6.50%.
June 30, 2023
• Difference between actual and expected experience-The $4.77M actuarial loss on the Total
OPEB Liability for the fiscal year ending June 30, 2023 is attributable to the combination of
unfavorable demographic experience and unfavorable claims experience for the pre-
Medicare retirees. $1.86M of the actuarial loss is associated with demographic experience.
The remaining $2.91 M of the actuarial loss is due to higher than expected 2023 per capita
claims cost.
• Assumption change- None.
• Investment gain -The $6.75M investment gain during the fiscal year ending June 30, 2023 is
attributable an actual return on assets of 9.52% vs. an expected return of 6.50%.
June 30, 2022
• Difference between actual and expected experience-The $1.08MM actuarial gain on the
Total OPEB Liability for the fiscal year ending June 30, 2022 is attributable to favorable
demographic experience. The favorable demographic experience is mainly attributable to
deaths (25 participants), termination of active participants and changes in coverage elections.
• Assumption change -The $10.17MM actuarial loss on the Total OPEB liability for the fiscal
year ending June 30, 2022 is attributable to updating the mortality improvement scale to the
MP-2021 scale, updating the demographic assumptions to reflect the results of the 2022
experience analysis and decreasing the discount rate from 7.0% to 6.5%. Updating the
mortality improvement scale resulted in a $.38MM actuarial loss. Updating the demographic
assumptions resulted in a $1.73MM actuarial loss. The remaining $8.06MM of actuarial loss
is attributable to decreasing the discount rate from 7.0% to 6.5%.
59
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Required Supplementary Information (Unaudited)
Years Ended June 30, 2024 and 2024
June 30, 2021
• Difference between actual and expected experience-The $8.79MM actuarial gain on the
Total OPEB Liability for the fiscal year ending June 30, 2021 is attributable to the combination
of favorable demographic experience and lower than expected 2021 per capita claims cost.
$3.94MM of the actuarial gain is associated with demographic experience and is mainly
attributable to deaths (37 participants), termination of active participants and changes in
coverage elections. The remaining $4.85MM of the actuarial gain is due to less than
expected 2021 per capita claims cost. The 2021 Humana premiums are slightly lower than
what was expected for 2021 ($321.92 per month vs. $347.80 per month)
• Assumption change-The$3.75MM actuarial gain on the Total OPEB liability for the fiscal
year ending June 30, 2021 is attributable to updating the mortality improvement scale to the
MP-2020 scale and reflecting the updated healthcare trend assumptions set forth in the
Michigan Uniform Assumptions memo for the 2021 fiscal year. Updating the mortality
improvement scale resulted in a $1.18MM actuarial gain. The remaining $2.57MM of the
actuarial gain is attributable to reflecting the updated trend assumptions.
June 30, 2020
• Difference between actual and expected experience-The $6.09MM gain on the Total OPEB
Liability for the fiscal year ending June 30, 2020 is attributable to the combination of
unfavorable demographic experience and a reduction in the per capita claims cost used in
the June 30, 2020 valuation. The $1.13MM loss associated with demographic experience is
mainly attributable to active participant retirements. The$7.22MM gain due to a reduction in
per capita claims cost is attributable a decrease in the Pre-65 medical and prescription drug
premiums for 2021. The 2020 Pre-65 medical and Rx monthly premium for a retiree was
$1,073.13. For 2020, the Pre-65 medical and Rx monthly premium for a retiree is $957.99.
An 11% reduction in monthly premium. The combination of the demographic loss and the
reduction in monthly premiums resulted in the overall $6.09MM actuarial gain.
• Assumption change -The$7.25MM loss on the Total OPEB liability for the fiscal year ending
June 30, 2020 is attributable to updating the mortality improvement scale to the MP-2019
scale and decreasing the discount rate from 7.50% to 7.00%. Updating the mortality
improvement scale resulted in a $.53MM actuarial gain. Whereas, decreasing the discount
rate resulted in a $7.78MM actuarial loss. The combination of these changes resulted in the
overall $7.25MM actuarial loss.
June 30, 2019
• Difference between actual and expected experience -The $5.2 million gain on the Total
OPEB Liability for the fiscal year ending June 30, 2019 is primarily due to favorable
demographic experience. The favorable experience is mainly attributable to terminations of
active participants and deaths of participants with and without beneficiaries.
60
Lansing Board of Water & Light - City of Lansing, Michigan
Notes to Required Supplementary Information (Unaudited)
Years Ended June 30, 2024 and 2024
• Assumption changes - (1)The plan experienced a $54.4 million gain on the Total OPEB
Liability due to a change of the assumed per capita claims cost. The Board changed the
Plan's insurance provider for Medicare eligible participants from The Hartford and Envision
Insurance to Humana. Doing so resulted in a dramatic decrease in both the medical and
prescription drug monthly premiums from the prior fiscal year($98.99 per month vs. $219.54
per month for medical coverage and $213.47 per month vs. $305.00 per month for
prescription drug coverage); (2)The Plan experienced a $3.8 million loss on the mortality
assumption change. The mortality assumption was updated from the RPH-2014 Total
Dataset mortality, adjusted to 2006 and projected generationally using the MP-2017
improvement scale to the PUBH-2010 General Employees mortality, projected generationally
using the MP-2018 improvement scale; and (3)The Plan experienced a $8.7 million gain on a
change to the medical and prescription drug trend assumptions. The trend assumptions were
changed to those prescribed under the Michigan Uniform Assumptions for the 2019 fiscal
year.
• Change in benefit terms -The Plan experienced a $.4 million gain due to an expected
increase in the retiree contribution percentage for employees hired on or after January 1,
2009. The expected contribution percentage was increased from 14% to 20% of the premium
charged to active employees.
June 30, 2018
• Difference between actual and expected experience-The $9.9 million gain on the Total
OPEB Liability for the fiscal year ending June 30, 2018, is attributable to a reduction in the
per capita claims cost used in the June 30, 2018 valuation. Better than expected claims
experience during the fiscal year resulted in a decrease in the projected claims when
compared to those used in the June 30, 2017, valuation.
• Assumption change-The mortality improvement scale was updated to the MP-2017 scale.
61
SUPPLEMENTARY INFORMATION
Lansing Board of Water & Light - City of Lansing, Michigan
Income Available for Revenue Bond Debt Retirement
Years Ended June 30, 2025 and 2024
2025 2024
Income, Before Capital Contributions Per Statement
of Revenues, Expenses and Changes in Net Position $ 27,611,097 $ 9,892,222
Adjustments to Income
Depreciation 68,414,785 68,302,725
Interest on long-term debt:
Notes 502,882 35,748
Revenue bonds 40,773,265 32,361,141
Total additional income 109,690,932 100,699,614
Income Available for Revenue Bonds
and Interest Redemption 137,302,029 110,591,836
Debt Retirement Pertaining to Revenue Bonds
Principal 13,495,000 13,890,000
Interest 28,420,898 26,892,515
Total $ 41,915,898 $ 40,782,515
Percent Coverage of Revenue Bonds
and Interest Requirements 328% 271%
62
Lansing Board of Water&Light-City of Lansing,Michigan
Detail of Statements of Revenues and Expenses
Years Ended June 30,2025 and 2024
Combined Water Electric Steam Chilled Water
2025 2024 2025 2024 2025 2024 2025 2024 2025 2024
Operating Revenues
Water $ 61,455,925 $ 55,757,309 $ 61,455,925 $ 55,757,309 $ - $ - $ $ $ $
Electric:
Retail 339,811,950 320,953,423 - - 339,811,950 320,953,423
Sales for resale 45,712,660 21,022,840 45,712,660 21,022,840
Steam 14,691,575 12,785,927 - - 14,691,575 12,785,927
Chilled water 6,775,779 6,915,341 - - 6,775,779 6,915,341
Total operating revenues 468,447,889 417,434,840 61,455,925 55,757,309 385,524,610 341,976,263 14,691,575 12,785,927 6,775,779 6,915,341
Operating Expenses
Production:
Fuel,purchased power and
other operating expenses 162,042,369 138,777,452 13,104,702 11,937,645 143,170,294 120,777,854 3,544,070 3,748,279 2,223,303 2,313,674
Maintenance 21,288,260 22,732,499 4,914,461 4,829,509 14,408,264 16,417,358 977,292 847,694 988,243 637,938
Transmission and distribution:
Operating expenses 13,841,237 14,757,338 2,109,194 1,723,667 11,459,984 12,824,290 272,059 209,381 - -
Maintenance 23,522,155 23,933,835 5,344,811 4,318,783 17,600,971 18,930,788 576,373 684,264 - -
Administrative and general 98,253,370 93,398,015 20,791,617 20,268,440 73,130,801 67,809,873 3,058,116 3,331,409 1,272,836 1,988,293
Return on equity 28,057,140 26,028,591 3,458,385 3,052,498 23,417,418 21,813,339 798,642 793,022 382,695 369,732
Depreciation 68,414,785 68,302,725 9,346,893 9,296,051 54,739,935 54,230,343 3,420,854 3,400,940 907,103 1,375,391
Total operating expenses 415,419,316 387,930,455 59,070,063 55,426,593 337,927,667 312,803,845 12,647,406 13,014,989 5,774,180 6,685,028
Operating income 53,028,573 29,504,385 2,385,862 330,716 47,596,943 29,172,418 2,044,169 (229,062) 1,001,599 230,313
Nonoperating Income(Expenses)
Investment income(loss) 18,181,899 14,264,806 1,897,918 1,155,936 15,306,399 12,267,458 767,911 619,445 209,671 221,967
Other(expense)income (2,323,228) (1,480,080) 1,951,263 736,040 (3,226,442) (2,470,239) (1,263,259) 28,970 215,210 225,149
Bonded debt interest expense (40,773,265) (32,361,141) (1,290,088) (1,383,139) (37,766,806) (28,982,836) (1,645,586) (1,818,781) (70,785) (176,385)
Other interest expense (502,882) (35,748) (84,546) (3,682) (417,722) (32,026) (614) (40) -
Total nonoperating expense (25,417,476) (19,612,163) 2,474,547 505,155 (26,104,571) (19,217,643) (2,141,548) (1,170,406) 354,096 270,731
Net income(loss) $ 27,611,097 $ 9,892,222 $ 4,860,409 $ 835,871 $ 21,492,372 $ 9,954,775 $ (97,379) $ (1,399,468) $ 1,355,695 $ 501,044
63
Lansing Board of Water & Light - City of Lansing, Michigan
Detail of Statements of Changes in Net Position
Years Ended June 30, 2025 and 2024
Combined Water Electric Steam Chilled Water
Net Position, June 30, 2023 $ 712,953,773 $ 103,184,771 $ 612,552,311 $ (14,494,666) $ 11,711,357
Income (loss) before contributions 9,892,222 835,871 9,954,775 (1,399,468) 501,044
Net Position, June 30, 2024 722,845,995 104,020,642 622,507,086 (15,894,134) 12,212,401
Income (loss) before contributions 27,611,097 4,860,409 21,492,372 (97,379) 1,355,695
Net Position, June 30, 2025 $ 750,457,092 $ 108,881,051 $ 643,999,458 $ (15,991,513) $ 13,568,096
64
Lansing Board of Water& Light-City of Lansing, Michigan
Detail of Fiduciary Statements of Net Position-
Pension and OPEB Trust Funds
Years Ended June 30,2025 and 2024
2025
Defined
Contribution Defined Benefit
Plan Plan VEBA Total
Assets
Receivable, investment interest receivable $ - $ 116,055 $ 699,657 $ 815,712
Cash and cash equivalents 24,667,291 605,254 495,903 25,768,448
Investments at fair value:
Mutual funds,bonds 18,283,837 22,554,739 59,643,501 100,482,077
Mutual funds,equity 166,998,488 21,790,236 176,020,497 364,809,221
Real estate fund investment - 3,038,367 37,206,523 40,244,890
Self-directed brokerage account
Equity securities/stocks 18,377,421 - - 18,377,421
Mutual funds,equity 827,483 827,483
Participants note receivable 3,422,732 - 3,422,732
Total assets 232,577,252 48,104,651 274,066,081 554,747,984
Liabilities
Trade payable,due to broker/other - 114,244 697,927 812,171
Reimbursement for benefits paid by employer - - 5,011,279 5,011,279
Net Position,Held in Trust for Pension
and Other Employee Benefits $ 232,577,252 $ 47,990,407 $ 268,356,875 $ 548,924,534
2024
Defined
Contribution Defined Benefit
Plan Plan VEBA Total
Assets
Receivable, investment interest receivable $ - $ - $ 14,641 $ 14,641
Cash and cash equivalents 26,073,272 437,821 1,857,276 28,368,369
Investments at fair value:
Mutual funds,bonds 17,497,649 23,149,441 55,835,109 96,482,199
Mutual funds,equity 152,413,555 21,335,946 159,831,296 333,580,797
Real estate fund investment - 3,668,689 38,565,204 42,233,893
Self-directed brokerage account
Equity securities/stocks 12,507,716 - - 12,507,716
Certificates of deposit(negotiable) 100,039 100,039
Mutual funds,equity 598,099 598,099
Participants note receivable 3,532,182 3,532,182
Total assets 212,722,512 48,591,897 256,103,526 517,417,935
Liabilities
Trade payable,due to broker/other - 58,122 259,187 317,309
Reimbursement for benefits paid by employer - - 2,448,357 2,448,357
Net Position,Held in Trust for Pension
and Other Employee Benefits $ 212,722,512 $ 48,533,775 $ 253,395,982 $ 514,652,269
65
Lansing Board of Water& Light -City of Lansing, Michigan
Detail of Statement of Changes in Fiduciary Net Position-
Pension and OPEB Trust Funds
Years Ended June 30,2025 and 2024
2025
Defined
Contribution Defined
Plan Benefit Plan VEBA Total
Increases
Investment income:
Net appreciation in
fair value of investments $ 22,795,649 $ 3,355,509 $ 19,493,611 $ 45,644,769
Interest and dividend income 3,648,273 1,037,880 5,338,815 10,024,968
Net investment income 26,443,922 4,393,389 24,832,426 55,669,737
Employer contributions 8,970,407 - 61,852 9,032,259
Interest from participant notes receivable 226,953 - - 226,953
Other 480,908 - - 480,908
Total increases 36,122,190 4,393,389 24,894,278 65,409,857
Decreases
Retiree benefits paid 15,686,771 4,771,884 9,562,998 30,021,653
Loan defaults 412,246 - - 412,246
Participants'note and administrative fees 168,433 164,873 370,387 703,693
Total decreases 16,267,450 4,936,757 9,933,385 31,137,592
Change in net position held in trust 19,854,740 (543,368) 14,960,893 34,272,265
Net Position Held in Trust for Pension
and Other Employee Benefits
Beginning 212,722,512 48,533,775 253,395,982 514,652,269
Ending $ 232,577,252 $ 47,990,407 $ 268,356,875 $ 548,924,534
66
Lansing Board of Water& Light -City of Lansing, Michigan
Detail of Statement of Changes in Fiduciary Net Position-
Pension and OPEB Trust Funds
Years Ended June 30,2025 and 2024
2024
Defined
Contribution Defined
Plan Benefit Plan VEBA Total
Increases
Investment income:
Net appreciation in
fair value of investments $ 22,518,517 $ 2,980,011 $ 19,047,703 $ 44,546,231
Interest and dividend income 3,363,114 1,153,670 5,252,303 9,769,087
Net investment income 25,881,631 4,133,681 24,300,006 54,315,318
Employer contributions 9,435,006 - 65,286 9,500,292
Interest from participant notes receivable 189,210 - - 189,210
Other 269,948 - - 269,948
Total increases 35,775,795 4,133,681 24,365,292 64,274,768
Decreases
Retiree benefits paid 13,525,681 4,995,541 9,180,680 27,701,902
Loan defaults 331,152 - - 331,152
Participants'note and administrative fees 152,962 127,598 259,201 539,761
Total decreases 14,009,795 5,123,139 9,439,881 28,572,815
Change in net position held in trust 21,766,000 (989,458) 14,925,411 35,701,953
Net Position Held in Trust for Pension
and Other Employee Benefits
Beginning 190,956,512 49,523,233 238,470,571 478,950,316
Ending $ 212,722,512 $ 48,533,775 $ 253,395,982 $ 514,652,269
67