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Home My WebLink About1989 Board of Water and Light Annual ReportLANSING BOARD OF WATER AND LIGHT A Public Power Community 110hh- _A901116, 1989 Annual Report 7 ISO � s wff-'� FA ft me LANSING BOARD OF WATER AND LIGHT A Public Power Community TABLE OF CONTENTS Introduction .................. Recognizing Excellence .. Share the Success..........................................................................2 Suggestion Awards........................................................................ 2 Environmental Excellence................................................................ 3 Customer Satisfaction..................................................................... 3 ElectricUtility ................................................................................4 WaterUtility ................................................................................. 5 SteamUtility .................................................................................6 Serving our Community ...................................................................7 Renewed Commitment to Safety ....................................................... 8 Commissioners and Executive Staff ................................................. 10 Financial Report.......................................................................... 11 INTRODUCTION The Board of Water and Light serves Lansing, Michigan, and surrounding areas with electricity, water and steam. Chartered in 1885 by a vote of Lansing's citizens the BWL remains pub is power utility in its second century of service. Lansing's city charter vests the BWL with full and exclusive management of water, heat, steam and electric services for the city. An eight -person board of commissioners establishes policy which is carried out by a staff of 928 employees under the direction of a general manager. Board members serve without pay. They are appointed to four-year terms by the mayor with the advice and consent of city council. 6 S 0 / 110l W Ni N In 1989 the American Public Power Association honored the Board of Water and Light as one of the country's best publicly -owned utilities. This report M-E summarizes our activities for the 1989 fiscal year. RECOGNIZING EXCELLENCE On June 6, 1989, the American Public Power Association honored the Board of Water and Light with its E. F. Scattergood System Achievement Award. APPA gives the award each year in recognition of sustained achievement and improved customer service in the publicly owned electric utility industry. The award cited the BWL for its leadership in strategic planning that has improved the utility's productivity, reliability, quality and cost of service, and public image. SHARE THE SUCCESS A key part of the BWL's strategic planning process is an innovative gain sharing program called, "Share the Success." The program draws all of the utility's employees into the organization's business plan by offering pay and benefit incentives for reaching or exceeding established goals. Employees themselves establish proposed performance measures that are reviewed by a management committee. Depending on the utility's performance the Share the Success program results in bonuses ranging from zero to five percent of base annual pay. Employee repre- sentatives also recommend benefit options that may be purchased with Share the Success credits. These range from cash, to purchased vacation time, to long term disability or other insurance options. In its first two years of operation, the BWL's Share the Success program resulted in net utility savings of $3.9 million while distributing $2.2 million in employee bonuses. The program, believed to be one of the first of its kind, has been widely acclaimed by other public power utilities and by community leaders in the Lansing area. SUGGESTION AWARDS The BWL's Suggestion Award Plan recorded a record individual payout in September. Dave Nico, a shift supervisor at the Ottawa Station, was awarded $2,962 for his suggestion to cut costs by shutting down some of the station's equipment during specific hours. Nico's suggestion saved an estimated $29,000 in its first year of operation. The award was the highest made since a recent plan revision increased the maximum award from $1,000 to $5,000. For the fiscal year, 232 BWL employees submitted suggestions that save the utility an estimated $96,902 per year in operating costs. Award payouts totaled $14,244 to 71 employees. ENVIRONMENTAL EXCELLENCE In April, the BWL was one of 13 Michigan companies honored with an Environmental Excellence Award from the Michigan Department of Natural Resources. The award recognized two projects that recycle by-products as an alternative to disposal in solid waste landfills. The first project involves BWL experiments that use flyash on agricultural land to increase crop yields. The second utilizes a combination of fl asl and cement as a substitute or sand for backfill in construction projects. The projects support a long-term BWL goal to eliminate all landfill disposal of its by-products. CUSTOMER SATISFACTION Each ear, the BWL conducts a survey of Y - Y its residential customers to gauge attitudes . and perceptions. For the fourth straight Year, customers gave the utility high marks in nearly all areas. When asked to rate their overall feelings about the BWL, 80 percent gave a favorable response. This was 10 percent above the average among some 26 utilities for which Market Opinion Research (MOR) conducts customer attitude surveys. Favorability was highest among electric customers, who gave the BWL an 84 percent rating. More significantly, 86 percent said the electric rates charged by the BWL are reasonable. This was eight percentage points better than the next highest utility and 25 percent above the average of utilities surveyed by MOR. The survey consisted of telephone interviews with a random sample of 500 residential customers. The estimated sampling error is plus or minus 4.5 percent at a 95 percent confidence level. ELECTRIC UTILITY Electric and Water utility employees responded to the hottest and driest summer in memory in FY 1988-89. Four new net system peak demands were established between July 6 and August 3, 1988. During that period the system peak demand skyrocketed from 394,936 kilowatts (KW) on July 9, 1987, to 445,373 KW on August 3, 1988. During the summer, the BWL met electric demand of its own retail customers while selling additional power to capacity -short utilities in the midwest. Generating units produced 2,817,284 megawatt hours (MWH) of electricity during the fiscal year, an increase of more than 144,000 MWH over the previous year. At the some time, the BWL enjoyed the third lowest heat rate in its history. ft The BWL continued expansion of electric service to suburban customers. Voters in Delhi, Meridian and DeWitt townships confirmed 30-year electric franchises negotiated with their townships. The Watertown Township Board of Trustees approved a new 20-year franchise. The BWL has new franchises in place in seven surrounding townships, the maximum service territory currently permitted by Michigan law. New developers in the fringe areas of the BWL's territory can now choose between Consumers Power Company and the BWL. In 35 situations in which customers j had a choice in 1989, 29 chose to ■ take electricity from the BWL. Suburban customers account for 33.8 percent of the BWL's electric revenue, an increase of Mir eight percent in the last three years. ■ For the second straight year, two teams of Line Department employees competed in the National Linemen's Rodeo in Kansas City, Missouri. Linemen Roger Sherman and Dan Bailey, and Apprentice Lineman Ken Dudley II walked off with first place honors in two events. Linemen AI Simpson and Frank Baron and Apprentice lineman Marianne Edington placed first in the Single Phase Transformer Changeout event. For the second year, Dudley won the Hurt Man Rescue event in competition with 22 other apprentice linemen. Edington placed fifth and received a standing ovation from the crowd as the first and only woman to compete in the national rodeo. WATER UTILITY Dry weather challenged several water systems in the Lansing area in the summer of 1988. Suburban systems on either side of the BWL imposed lawn sprinkling bans but BWL customers were free to use water as they desired. Maximum daily pumr-age fnr� r }uV7-at--3-&.--�-3 m4im on - gallons. This was one million gallons below the all-time daily record set 12 years earlier. The system's pumpage capacity is 52 million gallons. Water sales for the year totaled 7,059 million gallons. All municipal systems in the Lansing area draw their water from deep water wells drilled into the Saginaw Aquifer which underlies the entire region. Some municipal systems experienced water shortages while others, including \ the BWL, had enough for their own customers with capacity left over. Currently, however, no large scale inter- e it connections exist. In February, 1989, BWL officials convened a meeting of all area water systems to discuss regional cooperation in meeting future water needs. As a result of that meeting, ten area municipalities are participating in a study to determine the feasibility of various regional approaches. The study will look into interconnecting . distribution systems as well at joint ownership of future facilities built to meet water needs in the area. The BWL's Water Utility was honored with the American Water Works Association safety award of excellence. It was the third straight year water utility employees and support staff won the award. In February, a team of Water Distri- bution employees won a statewide water tap contest sponsored by the Michigan Section of the American Water Works Association. The team was coached by Bill DeClercq and consisted of Leon Flores, Mary Hall and Scott Wilkinson. The contest is held to determine which team can tap a 314 inch residential water service on a pressurized six-inch main in the fastest time, and with no safety violations. The BWL team's winning time was one minute, 55 seconds, a full 30 seconds faster than the second place finishers. Taste, like beauty, is a subjective measurement. But`the judgment of area residents that BWL water tastes good was confirmed in 1989 by a national slate of judges. At a national symposium in Tucson, Arizona, BWL water finished second among 20 entries in a taste testing contest. The contest was sponsored by the America Water Resources Association. STEAM UTILITY The BWL Steam Uti.lity plays an important role in redeveloping downtown Lansing. Several major new developments connected or committed to the district heating system during 1989, The new Michigan Library and Historical Center is the largest of these, with 3.20,000 square feet of . building space. The 168,000 square foot Victor Office Building, 302,000 square foot Grand Tower, and 194,000 square foot Capitol Commons Commerce Center also signed long-term commitments to heat their build- ings with central district steam at an estimated annual consumption of 21,322 mlb. This represents a four percent load increase in the down- town business district. Steam Utility rules and regulations were revised in 1989 to encourage new development. These revisions permit the BWL to absorb certain costs to extend steam service to new.customers who sign long-term commitments to take that service. The new rules resulted in the system's first service main extension in seven years. Over 90 percent of the commercial buildings within the central steam district use BWL steam during the winter heating season. Steam's market pene- tration for summer cooling, however, is relatively low. In 1989 Board of Water and Light Commissioners authorized a district cooling feasibility study, conducted by SFT, Inc. Under this concept, steam would be used to power cooling equip- ment at a centrally located chiller plant. The equipment would produce chilled water that would be delivered through an underground distribution system to cool downtown buildings. The study examined the potential market for a central chilled water district. It also analyzed the capital costs for constructing the system and the rates necessary to support it. The study compared those rates with the costs that downtown building owners incur when cooling their buildings with customer -owned equipment. The consultant concluded that a central chilled water district is feasible and could provide building owners with chilling capability at a lower cost than they incur by providing their chilling needs independently. Based on the findings BWL commissioners have authorized staff to proceed with a more detailed analysis and to seek preliminary commitments from potential customers. F� SERVING OUR COMMUNITY The utility's commitment to safety extends beyond the walls of its own facilities. For the third year, Electric Utility employees traveled to area elementary schools. Aided by an energized model of an overhead electric distribution system and a cartoon character named "Louie the Lightning Bug," they teach youngsters to "play it.safe around electricity." The pro- gram was presented to 117 elementary school classes during the 1988- 89 school year and was seen. by 3,300 students. In its three years of existence, the electric safety program has been delivered to more than 8,000 young students in the BWL service' area.. From December through February, the BWL used billing stuffers to solicit help for those without funds to meet basic energy needs. As in past years,. customers responded generously, donating $32,000 to the. Energy Bank Envelope Campaign. The Community Services and Referral Center administers ■ ■ the program and Clinton Bank and Trust donates free accounting services. Since the program began in 1982, BWL customers have.donoted more ■ than $150,000 through the Energy Bank campaign. In October, BWL employees celebrated Public Power Week by urging customers to register to vote. Registration booths were set up at several locations and 100 new voters registered in time to partici- pate.in the .November general election.: i ■ ■ Once a month, some 45 BWL employees give .up a lunch hour'to ensure others may enjoy a nutritious meal. They deliver hot meals to home -bound older citizens in .the greater Lansing area. The TrPCounty Office on Aging operates.the. program, helping elderly people maintain independent lives while staying in their own homes. BWL employees also continued their tradition of generosity towards the annual United Way campaign, pledg- ing a record $104,000 in contributions. Some 87 percent of all BWL employees participated, pledging an average of $1 10 per employee to United Way. On the fourth Tuesday of every month, BWL commissioners meet in public session to establish policy for our utility. The public is invited to -attend these meetings, which begin at 5:30 p.m. on the second floor of the BWL office building, 123 West Ottawa. 7 RENEWED COMMITMENT TO SAFETY From 1984 to 1988 the BWL recorded major improvements in its safety record. In the span of four years, the utility's accident incident rate dropped from double the national average for electric utilities, to half the national average. Employee efforts were rewarded by three straight national safety awards from the. American Public Power Association between 1985 and 1987. The American Water Works Association conferred national safety awards on the BWL from 1986 through 1988. In the span of eight months, the BWL family was shaken by two work - related fatal accidents. The deaths of veteran employees William Duskey and Ronald Ruby were the first work -related fatalities in more than 17 years at the utility. The dual tragedies triggered an intensive review of safety practices at the BWL. General Manager Joseph Pandy, Jr. directed each division, as well as the Joint Safety Committee and individual depart- ment safety committees to conduct independent reviews of the BWL safety program. The dual path approach assured the broadest input from all employees in the organization. Employ- ees were specifically asked to review: • BWL safety programs • Procedures and traffic control • Resources dedicated to safe working conditions • Management/employee interaction on safety matters • Joint Safety Committee activities • Safety attitudes at the BWL The BWL system -wide safety task force responded with 194 recommendations covering 30 broad areas of safety activity. As a result, the following CAUTIO .AM measures are being taken to assure that safety remains foremost on the minds of all BWL employees: Organizational emphasis —The organization's basic measurement of safety performance, called total safety performance, or TSP, has been given top priority in the Share the Success gain -sharing program. Monthly safety meetings are established throughout the.organization. Pre -job safety planning sessions are held prior to beginning each field job. Individual emphasis —Employees are now individually rewarded for their safety performance during the year. Employees who work for an entire year with no work -related accidents may qualify.for a special safety bonus equal to one percent of base annual pay. Specific responsibilities to encourage safe work habits have been added to all —bevels of BWL supervision and are incorporated in the performance ap- W6&6& praisal system. Staff realignment —Safety and training responsibilities have been centralized under the Human Resources Division. The Safety Section has added the position of Field Safety Representative to help departments develop safety pro- grams and encourage safe work habits. ■ ■ Safety Communication —Safety bulletin ■ , boards have been set up at all BWL work locations and a safety orientation hand- book written and distributed to all employ- , ees. A new utility -wide safety newsletter is published on a regular basis. Safety Manual Update — A complete overhaul of the BWL safety manual has been undertaken by a six - member committee consisting of union and management representatives. Overall, our goal is to keep safety uppermost in the minds of all BWL employees. N COMMISSIONERS Phillip E. Hassler Chairman Jack R. Sebolt Vice Chairman Gerald W. Williams Chairman Pro Tern Sister Mary Janice Belen, R.S.M. Eva L. Evans E. Lane Jessop Bruce E. McComb R. John Strolle EXECUTIVE STAFF Joseph Pandy, Jr. General Manager Joseph D. Wolfe Assistant General Manager Wallace R. Nourse Treasurer/Controller Clyde R. Dugan Director, Water Utility Roy E. Peffley Director, Electric Utility Joette C. Woodard-Yauk Director, Steam Utility John Elash.kar Director, Engineering Terry D. Graham Director, Administrative Services Neal Housler Director, Consumer Services Oliver O. Kingsbury Director, Information Systems Roger A. Ophaug Director, Engineering Planning Richard A. Sevic Director, Electric Utility Coordination John Strickler Director, Communications and Marketing Dana W. Tousley Director, Financial Planning Mark Vander Jagt Director, Human Resources Lawrence H. Wilhite Staff Attorney, Special Assistant City Attorney Mary E. Sova Secretary of the Board Kellie L. Willson Internal Auditor INDEPENDENT AUDITOR'S REPORT Honorable Mayor, Members of City Council, and Commissioners of the Board of Water and Light We have audited the accompanying balance sheets of the Board of Water and Light —City of Lansing as of June 30, 1989 and 1988, and the related statements of income, changes in city equity, and changes in financial position for the years then ended. These financial statements are the responsibility of the Board's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial state- ments. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Board of Water and Light —City of Lansing, as of June 30, 1989 and 1988, and the results of its operations and changes in financial position for the years then ended in conformity with generally accepted accounting principles. Our audits of the financial statements of the Board of Water and Light — City of Lansing for the years ended June 30, 1989 and 1988, were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The information on pages 20 through 23 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, the information is fairly stated in all material respects in relation to the basic financial statements taken as a whole. Certified Public Accountants August 25, 1989 BALANCE SHEETS ASSETS UTILITY PLANT (Note A): Water Electric Steam Common facilities J U N E 30 $388,829,870 Less accumulated depreciation 210,935,075 $177,894,795 Construction in progress (Note C) 17,317,236 NONCURRENT RESTRICTED FUNDS (Notes D and K) OTHER ASSETS: Project funds (Notes C and K) Deferred compensation plan assets (Notes A and J) Deferred costs (Note A) Other work in progress CURRENT ASSETS: Demand deposits (Note K) Other cash and securities (Notes A and K) Accounts receivable, less allowance for uncollectible accounts of $615,000 in 1989 and 1988 Interest and dividends receivable Inventories (Note A) Prepaid expenses Restricted funds (Notes D and K) Deferred compensated absences Total current assets $195,212,031 7,746,880 $ 20,850,757 10,502,527 1,794,528 75,005 $ 33,222,817 $30,500 25,150,273 14,648,091 551,463 13,841,452 351,645 18,757,749 1,845,393 $ 75,176,566 $311,358,294 1988 $ 60,543,558 267,033,273 11,914,154 29,101,610 $368,592,595 199,291,588 $169,301,007 15,429,697 $184,730,704 7,089,762 $ 12,830,156 8,721,395 2,392,704 176,631 $ 24,120,886 $30,500 22,787,360 13,109,018 444,853 17,540,122 175,696 15,728,992 1,757 920 $ 71,574,461 $287,515,813 CITY EQUITY AND LIABILITIES CITY EQUITY: Contribution in aid of construction Retained income Total city equity LONG-TERM DEBT, LESS CURRENT PORTION (Note E) DEFERRED COMPENSATION (Notes A and J) ADVANCES FOR CONSTRUCTION CURRENT LIABILITIES: Accounts payable Compensation and related amounts withheld Customer deposits and related accrued interest Accrued compensated absences Accrued interest Current portion of long-term debt Total Current Liabilities CONTINGENCIES (Note H) See notes to financial statements. J U N E 30 $278,485,810 7,356,845 10,502,527 44,765 $ 7,860,977 1,429,693 1,543,382 1,845,393 179,396 2,109,506 $ 14,968,347 1988 $ 17,329,387 237,547,260 $254,876,647 9,466,351 8,721,395 107,547 $ 7,524,071 1,355,748 1,371,417 1,757,920 232,116 2,102,601 $ 14,343,873 11,358,294 $287,515,813 STATEMENTS OF INCOME OPERATING REVENUES (Note A): Water Electric Steam OPERATING EXPENSES: Production: Fuel and other operation expenses Maintenance Transmission and distribution: Operating expenses Maintenance Administrative and general Depreciation (Note A) OTHER INCOME: Interest Other INTEREST EXPENSE: Bonded debt See notes to financial statements. STATEMENTS OF CHANGES IN CITY EQUITY Balances at July 1, 1987 Contributions (Note A) Net income EquitKreturned to City (Note FJ Balances at June 30, 1988 Contributions (Note A) Net income Equity returned to City F) Balances at June 30, 1989 See notes to financial statements YEAR ENDED 1UNE 30 1989 1988 $12,062,053 $1 1,799,140 126,180,462 1 1,968,891 122,906,297 1 1,867,399 $150,211,406 $146,572,836 $ 74,591,562 $ 77,017,549 8,368,330 8,614,986 3,959,608 3,783,041 2,619,923 2,777,794 26,507,364 24,538,035 13,475,144 12,314,071 $129,521,931 $129,045,476 Operating Income $ 20,689,475 $ 17,527,360 $ 6,260,501 $ 4,435,926 501,825 525,638 $ 6,762,326 $ 41961,564 $ 305,000 $ 405,000 291,838 308,375 $ 596,838 $ 713,375 Net Income $ 26,854,963 $ 21,775,549 CONTRIBUTIONS IN AID OF CONSTRUCTION RETAINED INCOME $16,471,018 $220,417,965 858,369 21,775,549 (4,646,254) $17,329,387 $237,547,260 1,427,699 26,854,963 (4,673,499) $18,757,086 $259,728,724 TOTAL $236,888,983 858,369 21,775,549 (4,646,254) $254,876,647 1,427,699 26,854,963 (4,673,499) $278,485,810 S T A T E M E N T S O F C H A N G E S I N F I N A N C I A L P 0 S I T 1 0 N SOURCES OF WORKING CAPITAL: Net income Charge to income not affecting working capital: Depreciation Amortization of deferred costs Decrease in other work in progress Increase in deferred compensation Contributions in aid of water construction Increases in long-term debt USES OF WORKING CAPITAL: Additions to utility plant and construction in progress (net of electric and steam contributions in aid of construction of $306,124 in 1989 and $883,724 in 1988) Payments of long-term debt Increase in noncurrent restricted funds Increase in deferred compensation plan assets increase in project funds Decrease in advances for construction Eauitv returned to Citv WORKING CAPITAL AT BEGINNING OF YEAR WORKING CAPITAL AT END OF YEAR CHANGES IN COMPONENTS OF WORKING CAPITAL: Increase (decrease) in current assets: Other cash and securities Accounts receivable Interest and dividends receivable Inventories Prepaid expenses Restricted funds Deferred compensated absences Increase (decrease) in current liabilities: Accounts payable Compensation and related amounts withheld Customer deposits Accrued compensated absences Accrued interest Current portion of long-term debt See notes to financial statements. YEAR ENDED J U N E 30 1989 $26,854,963 13 475,144 598,176 Total From Operations $40,928,283 101,626 1,781,132 1,427,699 $44,238,740 $23,956,471 2,109,506 657,118 1,781,132 8,020,601 62,782 4,673,499 41,261,109 Increase in Working Capital $ 2,977,631 57 230588 $60,208,219 Increase in Working Capital $ 2,362,913 1,539,073 106,610 (3,698,670) 175,949 3,028,757 87,473 $ 3,602,105 $ 336,906 73,945 171,965 87,473 (52,720) _ 6,905 $ 624,474 $ 2,977,631 19U $21,775,549 12,314,071 598,150 $34,687,770 129,900 1,278,943 858,369 183,270 $37,138,252 $22,658,763 2,113,511 1,028,959 1,278,943 1,049,819 ,563 4,64646, 254 32,798,812 $ 4,339,440 L 52,891,148 $57,230,588 $ 1,529,068 891,010 38,871 (596,824) 75,014 809,901 8 486) $ 2,728,554 $ (1,881,301) 231,240 76,553 (18,486) (36,241) 17, 349 $ (1,610,886) $ 4,339,440 NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 1989 AND 198 NOTE A —SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY —The financial statements include the financial activities of the water, electric, and steam operations of the Board of Water and Light (Board). The Charter of the City of Lansingestablished the Board to manage the utility systems of the City, and the commissioners of the governing board are appointed by the Mayor with approval oFthe City Council. The Board of Water and Light, by City Charter, is an agency of the City but is not included in the financial statements of the City .The Board is exempt from taxes on income because it is a municipal entity. SYSTEM OF ACCOUNTS —The Board's accounts are maintained substantially in accordance with the Uniform Systems of Accounts of the Federal Energy Regulatory Commission for the electric and steam systems and in accordance with the Uniform Systems of Accounts of the National Association of Regulatory Utility Commissioners for the water system. UTILITY PLANT —Utility plant is stated on the basis of cost, which includes expenditures for new facilities and those which extend the useful life of existing facilities and equipment. Expenditures for normal repairs and maintenance are charged to maintenance expense as incurred. DEPRECIATION —Depreciation of utility plant is computed using the straight-line method based on estimated useful lives. The resulting provisions for depreciation in 1989 and 1988 expressed as a percentage of the average depreciable cost of the related assets are as follows: CLASSIFICATION OF AVERAGE RATE UTILITY PLANT 1989 1988 Water 2.1 % 2.1 % Electric 3.5 3.3 Steam 1.5 1.8 Common facilities 6.5 7.3 When units of property are retired, their cost is removed from utility plant and charged to accumulated depreciation. INVENTORIES —Inventories are stated at weighted average cost and consist of the following at June 30: 1989 1988 - Coal $ 9,355,465 $13,426,186 Materials and supplies 4,485,987 A,113,936 $13,841,452 $17,540,122 CONTRIBUTIONS IN AID OF CONSTRUCTION --Contributions in aid of construction represent nonrefundable amounts received from customers for construction of utility plant. In accordance with Board policy, contributions for water are credited to city equity upon receipt and electric and steam contributions are credited against the related assets. REVENUE —Revenue is recorded when the customer is billed. Accordingly, the current year revenue from customers whose billing period ends after June 30 will be recognized when billed. The water, electric, and steam operations of the Board 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 $2,844,600 and $4,319,000 in 1989 and 1988, respectively. DEFERRED COMPENSATION —In accordance with the provisions of Governmental Accounting Standards Board Statement (GASB) No.2 (which became effective December 15, 1986), deferred compensation funds and the associated liability (see Note J) are reflected in the financial statements. DEFERRED COSTS —The Board has adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 71, which provides for the deferral of costs which will be recovered through future rate increases. The Board began amortizing deterred costs on the straight-line basis over five years effective with the June 1987 rate increase. OTHER CASH AND SECURITIES —The Board has established special purpose cash funds designated to meet specific operating requirements. These funds consist of cash, certificates of deposit, and United States Government securities and are segregated as follows. CARRYING VALUE AT JUNE 30 DESIGNATED PURPOSE 1989 1988 Coal inventory fluctuation $3,783,710 $3,142,002 Litigation, environmental,and uninsured losses 7,035,513 6,451,832 Future power requirements 12,444,424 11,461,366 General purpose 1,886,626 1,732,160 $25,150,273 $22,787,360 NOTE 8—RATE MATTERS Rates charged to customers are established solely by the governing board. The Board has agreed to charge rates sufficient to meet certain requirements of the bond ordinances for the outstanding revenue bonds. NOTE C—CONSTRUCTION IN PROGRESS Construction in progress consists of major projects for expansion or addition to utility plant. The estimated additional cost to complete these projects, based on Board authorizations, approximates $49,626,000, including commitments on existing construction contracts approximating $5,520,000. These projects will be funded through operational cash flow, including the project funds reported as other assets, and, to the extent that favorable rates can be obtained, through the issuance of bonded debt. NOTE D—RESTRICTED FUNDS The restricted funds are required under Revenue Bond Ordinances 18A, 18B, and 26A. These funds consist of cash, certificates of deposit, and United States Government securities and are segregated into the following funds: CURRENT: Operation and Maintenance Fund Bond and Interest Redemption Fund Total Current NONCURRENT: Bond Reserve Account Depreciation, Extension, and Improvement Fund Total Noncurrent The restrictions of the various funds are as follows REQUIRED AT JUNE 30, 1989 $11,448,000 2,254,500 2,254,500 1,600,000 CARRYING VALUE AT JUNE 30 1989 1988 $15,367,462 3,390,287 $18,757,749 $ 5,756,469 1,990,411 $ 7,746,880 $12,250,075 3,478,917 $15,728,992 $ 5,295,434 1,794,328 $ 7,089,762 $22,818,754 • 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 —This fund is restricted for payment of the current portion of bond principal and interest. • Bond Reserve Account —This account shall include sufficient funds to cover the maximum annual principal and interest requirements for the outstanding bonds. • Depreciation, Extension, and Improvement Fund —This fund is restricted for major repairs, replacements, improvements, enlargements, and extensions of the utility. NOTE E—LONG-TERM DEBT Long-term debt as of June 30 consists of the following: City Utilities System Revenue Bonds, Series 1973, due serially through July 1, 1991, plus interest at rates ranging from 4.3% to 5.0% City Utilities System Revenue Bonds, Series 7976, due serially through July 1, 1991, plus interest at rates ranging from 4.75% to 5.2% 8.0% land contract, due in annual installments of $40,000, including interest, through July 26, 1994 Amount due Plan for Employees' Pensions in annual installments of $242,500, including interest at 5.5%, through June 30, 2012 Note payable, due in annual installments of $31,245, including imputed interest at 7.0%, with final payment September 30, 1996 Less current Aggregate annual principal payments applicable to long-term debt are as follows: 1990 $2,109,506 1991 2,116,912 1992 2,124,860 1993 133,393 1994 142,556 Thereafter 2,839,124 $9,466,351 1989 $ 3,000,000 3,000,000 184,916 1988 $ 4,000,000 4,000,000 208,256 3,121,194 1 3,188,336 160,241_ I _ _ 172,360 $ 9,466,351 $11,568,952 2,109 506 2,102,601 $ 7,356,845 $ 9,466,351 All City Utilities System Revenue Bonds were issued by authority of the City of Lansin Michigan and are subject to the requirements of the appropriate bond ordinances. These bonds were issued on a parity basis and are payable solely�lrom the net revenues of combined water, electric, and steam operations of the City. The Board may redeem outstanding City Utilities System Revenue Bonds prior to maturity at a premium and in the manner specified in the ordinances. NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 1989 AND 1988 NOTE F—TRANSACTIONS WITH THE CITY OF LANSING, MICHIGAN OPERATIONS —The Board recognized revenues of $5,245,133 and $5,004,565 in 1989 and 1988 respectively, for water, electric, and steam services provided to the City. The Board recognized expenses for sewerage services purchased from the City of $157,985 and $183,751 in 1989 and 1988, respectively. EQUITY RETURNED —The Board returned to the City $4,673,499 in 1989 and $4,646,254 in 1988 of operational cash flow in excess of debt service requirements. NOTE G—RETIREMENT PLAN PLAN DESCRIPTION —The Board has a noncontributory pension plan covering substantially all full-time employees. A participant's interest shall be fully vested when the participant has been credited with 10 years of vesting service. FUNDING STATUS AND PROGRESS —The amount labeled as the "pension benefit obligation' in the accompanying table is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases, estimated to be pa able in the future as a result of employee ser- vice to date. The measure is the actuarial present value of credited projected benefits and is intended to (a) help users assess the pension plan's funding status on a going -concern basis, (6) assess progress being made in accumulating sufficient assets to pay benefits when due, and (c) allow for comparisons among other municipal utility pension plans. The measure is independent of the actuarial funding method used to determine contributions to the pension plan. The pension benefit obligation was determined as part of an actuarial valuation of the Plan as of February 28, 1989 and 1988. Valuation data was projected forward to June 30, 1989 and 1988. Significant actuarial assumptions used in determining the pension benefit obligation include (a) a rate of return on the investment of present and future assets of 7.5% in 1989 and 1988, compounded annually, (b) projected salary increases of 5.5% in 1989 and 1988, compounded annually, attributable to inflation, (c) additional projected salary increases ranging from 0.0% to 5.3 % in 1989 and 1988, depending on age, attributable to seniority/merit, and (d) the assumption that benefits will not increase after retirement. At June 30, 1989 and 1988, the assets in excess of pension benefit obligation were $15,295,002 and $7,477,525, respectively, as follows: JUNE 30 1989 1988 Net assets available for plan benefits, at market $98,993,574 $85,945,213 Pension benefit obligation: Retirees and beneficiaries currently receiving benefits and terminated employees with vested benefits $31,494,631 $28,169,649 Current employees•. Vested benefits —employer financed 45,749,298 44,044,705 Nonvested benefits —employer financed 6,454,643 6,253,334 TOTAL PENSION BENEFIT OBLIGATION $83,698,572 $78,467,688 ASSETS IN EXCESS OF PENSION BENEFIT OBLIGATION _4 $15,295,002 $7,477,525 CONTRIBUTIONS REQUIRED AND CONTRIBUTIONS MADE —The pension plan's funding policy provides for periodic employer contributions at actuarially determined rates that , expressed as percentages of annual covered payroll, are designed to accumulate sufficient assets to pay benefits when due. The normal cost and amortization payment for the years ended June 30, 1989 and 1988, were determined usingg an attained age actuarial funding method. Clverfunded actuarial accrued liabilities were amortized as a level dollar contribution over a period of 30 years. During the year ended June 30, 1989 and 1988, employer contributions totalin $3,894,037 and $3,413,062, respectively, were made in accordance with contribution requirements determined by an actuarial valuation of the Plan as ofFebruary28, 1988 and 1987. In 1989 and 1988, employer contributions consisted of $4,414,306 and $3,939,304, respectively, for normal costs less $520,269 and $526,242, respectively, for amortization of the overfunded actuarial accrued liability. The employer contributions for 1989 and 1988 represented 12.20% and 1 1.35%, respectively, of projected covered payroll (projected payroll is equal to 1.036822 times February 28, 1988 and 1987, valuation payroll). There were no changes in the actuarial assumptions or methods or changes in benefit provisions affecting the February 28, 1988, actuarial valuation. A change in benefit provisions reflected in the February 28, 1987, actuarial valuation increased the contribution by $54,128. Significant actuarial assumptions used to compute contribution requirements were the same as those used to compute the standardized measure of the pension benefit obligation. ANALYSIS OF FUNDING PROGRESS —Analysis of the dollar amounts of net assets available for plan benefits, pension benefit obligation and assets in excess of the pension benefit obligation, in isolation, can be misleading Expressing net assets available for plan benefits as a percentage o� the pension benefit obligation provides one indication of the extent to which the Plan is funded. Analysis of this percentage over time indicates whether the Plan is becoming financially stronger or weaker. Trends in unfunded pension benefit obligation and annual covered payroll are both affected by inflation. Expressing the assets in excess of the pension benefit obligation as a percentage of the annual covered payroll approximately adjusts for the effects of inflation and aids analysis of the Plan's funding progress. (1) (6) NET ASSETS (2) (3) (4) ASSETS IN EXCESS OF AVAILABLE FOR PENSION BENEFIT PERCENTAGE ASSETS IN (5) PBO AS A PERCENTAGE FISCAL PLAN BENEFITS OBLIGATION FUNDED EXCESS OF PBO ANNUAL OF COVERED PAYROLL YEAR (AT MARKET) (PBO) (1) / (2) (1) - (2) COVERED PAYROLL (4) / (5) 1987 $80,536,399 $71,581,468 1 12.5% $ 8,954,931 $26,375,807 33.9% 1988 85,945,213 78,467,688 109.5 7,477,525 29,003,074 25.8 1989 98,993,574 83,698,572 118.3 15,295,002 30,784,780 49.7 A separate report —Plan for Employees' Pension of the Board of Water and Light —provides historical trend information regarding progress made in accumulating sufficient assets to pay benefits when due. The amount due the pension plan (see Note E) results from unfunded current service costs for the years 1968 through 1972 and is included in plan assets for actuarial valuation purposes. In addition to providing pension benefits, the Board provides certain hospitalization major medical, and life insurance benefits for retired employees. Substantially all of the Board's employees may become eligible for these benefits if Ly reach normal retirement age while working for the Board. These benefits are provided through an insurance company whose premiums are based on the benefits paid during the year. The Board recognizes the cost of providing these benefits by expensing the annual insurance premiums, which were $994,164 for 1989 and $866,880 for 1988. NOTE H—CONTINGENCIES The Board is involved in various legal actions which have arisen in the normal course of business. Such actions are usually brought for claims in excess c possible settlement or awards, if anyy, that may result. After taking into consideration legal counsel's evaluation of pending actions, management is of the opinion that the outcome thereof will not have a material effect on the financial position of the Board. NOTE I —POWER SUPPLY PURCHASE In 1983, the Board entered into power supply and project support contracts with the Michigan Public Power Agency (MPPA), of which the Board is a member. Under the agreement the Board will purchase 64.29% of the energy generated by MPPA's 37.22% ownership in Detroit Edison's Belle River Unit #1, which became operational'in August 1984. These contracts require the Board to purchase approximately 15 megawatts of power in 1991, increasing to 156 megawatts in 1995 and thereafter. Detroit Edison has agreed to repurchase 100% of MPPAs entitlement from 1984 to 1991. The price of this power will be calculated on a basis, as specified in the contracts, to enable MPPA to recover its production, transmission, and debt service costs. During the repurchase period, MPPA will use the net cash flow generated from the sell back to Edison to retire a portion of the outstanding bonds. In connection with the Belle River purchase, MPPA issued $590,000,000 of Belle River Project Revenue Bonds in September 1983. In March 1986, MPPA defeased $335,000,000 of the initial Revenue Bonds with interest rates ranging from 10-3/8% to 10-5/8% through the sale of $369,365,000 of refunding bonds with interest rates ranging from 5% to 7-3/8%. NOTE J—DEFERRED COMPENSATION The Board of Water and Light offers its employees a deferred compensation plan created in accordance with I.R.C. Section 457. All amounts of compensation deferred under the plan have been recorded as Board assets (Note A) and all property ri�hts purchased with such amounts, and all income attributable to such amounts, property, or rights are (until made available to the employee or other bene iciary) solely the property and rights of the Board of Water and Light and (without being restricted to the provisions of benefits under the Ian) subject only to the claims of the Board of Water and Light's general creditors. In the past, the plan assets have been used only to pay benefits. The BoardofWater and Light believes it is unlikely that it will use the assets to satisfy the claims of general creditors in the future. The plan is administered by a trustee, The International City Management Association Retirement Corporation. The value of the plan assets at June 30, 1989 and 1988, was $10,502,527 and $8,721,395, respectively. NOTE K—CASH AND INVESTMENTS The Board maintains special purpose cash and investment funds designated to meet specific operating requirements. The total of these special purpose funds is presented on the combined balance sheet as "Other cash and securities." In addition, investments are separately held by several of the Board's funds. The captions on the June 30, 1989, balance sheet related to cash and investments are as follows: Other cash and securities $25,150,273 Current restricted funds 18,757,749 Project funds 20,850,757 Noncurrent restricted funds 7,746,880 Demand deposits 30,500 $72,536,159 DEPOSITS —At year-end, the carrying amount of the Board's deposits was $55,307,537. Of the amount, $800,000 was covered by federal depository insurance and $54,507,537 was uninsured and uncollateralized. Collateral is not required for deposits not covered by federal deposit insurance. INVESTMENTS —Statutes limit the Board to investing in the obligations of the United States Government and its agencies. The Board's investments are categorized in the following table to give an indication of the level of risk assumed by the Board at year-end. Category 1 includes investments that are insured or registered or for which the securities are held by the Board or its agent in the Board's name. Category 2 includes uninsured and unregistered investments for which the securities are held by the bank's trust department or agent in the Board's name. Category 3 includes ard uninsured and unregistered investments for which the securities are held by the bank or by its trust department or agent but not in the Bo's name. C A T E G 0 R Y 1 2 United States Government Securities $300,000 $11,273,388 3 CARRYING MARKET AMOUNT VALUE I $5,655,234 $17,228,622 $17,210,524 Due to higher cash flows at certain times of the year, the Board's investment in uncollateralized deposits, unregistered securities, and in repurchase agreements for which the underlying securities were held by the bank increased significantly at times. The maximum amount during the year of "Uninsured and unregistered" securities was $16,928,622, and "Uninsured and uncollateralized" deposits was $61,730,213. The Board did not violate any legal or contractual provisions for deposits and investments during the year. DETAILS OF STATEMENTS OF INCOME OPERATING REVENUES: Water Electric: Retail Sales for resale Steam OPERATING EXPENSES: Production: Fuel and other operating expenses Maintenance Transmission and distribution: Operating expenses Maintenance Administrative and general Depreciation OTHER INCOME: Interest Other INTEREST EXPENSE: Bonded debt Other Operating Income Net Income DETAILS OF STATEMENTS OF CHANGES IN CITY EQUITY Balances at July 1, 1987 Contributions Net income Equity returned to City Balances at June 30,1988 Contributions Net income Equity returned to Cif Balances at June 30, 1989 COMBINED YEAR ENDED JUNE 30 1989 1988 $ 12,062,053 $ 11,799,140 112,153,191 112,311 ,505 14,027, 271 10, 594,792 11,968,891 11,867,399 $150,211,406 $146,572,836 $ 74,591,562 $ 77,017,549 8,368,330 8,614,986 3,959,608 3,783,041 2,619,923 2,777,794 26,507,364 24,538,035 13,475,144 12,314,071 $129,521,931 $129,045.,476 $ 20,689,475 $ 17,527,360 $ 6,260,501 $ 4,435,926 501,825 525,638 $ 6,762,326 $ 4,961,564 $ 305,000 $ 405,000 291,838 308,375 $ 596,838 $ 713,_375 $ 26,854,963 I $ 21,775,549 COMBINED ELIMINATIONS YEAR ENDED JUNE 30 1989 1988 $(477,524) $ (477,524) $(477,524) $(477,524) $ 0 $(167,036) $(515,252) $(167,036) $(515,252) $(167,036) $(515,252) $(167,036) $(515,252) S 0 r $ 0 WATER CONTRIBUTIONS CONTRIBUTIONS IN AID OF RETAINED IN AID OF RETAINED CONSTRUCTION INCOME CONSTRUCTION INCOME $16,471,018 $220,417,965 $16,471,018 $6,728,541 858,369 1 858,369 21,775,549 1,892,1 12 _(4,646,254) (410,154) $17,329,387 $2 37,547,260 $17,329,387 $8,210,499 1,427,699 1,427,699 26,854,963 'i 1,996,107 ----�— (4,673,499) (415,135) $18,757,086 $259,728,724 $18,757,086 $9,791,471 WATER ELECTRIC STEAM YEAR ENDED JUNE 30 YEAR ENDED JUNE 30 YEAR ENDED JUNE 30 1989 1988 1989 1988 1989 $12,062,053 $11,799,140 $112,630,715 $112,311,505 14,027, 271 10,594, 792 _ $1 1,968,891 $12,062,053 $11,799,140 $126,657,986 $122,906,297 $11,968,891 $3,903,943 $4,0511441 $64,354,455 $65,499,236 $6,810,688 970,047 914,590 6,695,015 6,910,868 703,268 721,458 621,418 712,51 A 653,512 3,191,394 1,832,913 3,01 1,345 1,975,547 46,756 165,592 3,088,938 3,025,492 22,778,795 20,862,422 639,631 1,699,004 $11,004,808 1,530,394 $10,887,943 11,519,404 $110,371,976 10,510,891 $108,770,309 256,736 $8,622,671 $3,346,220 $1,057,245 $911,197 $16,286,010 $14,135,988 $621,516 456,643 $692,871 459,056 $5,175,883 _ 44,803 $3,796,498 66,098 $630,138 379 $630,517 $1,078,159 $1,151,927 $5,220,686 $3,862,596 $96,611 $128,290 $203,139 $269,745 $5,250 42,686 42,722 _ _ 237,745 253,955 178,443 $183,693 $139,297 $1,996,107 $171,012 $1,892,112 $440,884 $21,065,812 $523,700 $17,474,884 $3,793,044 ELECTRIC CONTRIBUTIONS IN AID OF RETAINED CONSTRUCTION INCOME $0 $204,939,965 17,474,884 (3,833,384) $0 $218,581,465 21,065,812 (3,856,1 13) $0 $235,791,164 STEAM CONTRIBUTIONS IN AID OF RETAINED CONSTRUCTION INCOME $0 $ 8,749,459 2,408,553 402,716) $0 $10,755,296 3,793,044 402,251) $0 $14,146,089 1988 $1 1,867,399 $11,867,399 $7,466, 872 789,528 59,182 148,735 650,121 272,786 $9,387,224 $2,480,175 $461,809 484 $462,293 $6,965 526,950 $533,915 DETAILS OF SOURCES AND USES OF CASH (NOTE A) SOURCES OF CASH: Net income Charge to income not affecting cash: Depreciation Amortization of deferred costs COMBINED YEAR ENDED 1UNE 30 1989 1988 $26,854,963 $21,775,549 13,475,144 598,176 Total from Operations $40,928,283 Contributions in aid of construction 1,4271699 Additional borrowings of long-term debt Decrease (increase) in inventories 3,698,670 Increase (decrease) in customer deposits 171,965 Increase (decrease) in allowance for uncollectible accounts 0 Increase (decrease) in accounts payable and other accrued expenses 498,324 Total Sources of Cash $46,724,941 USES OF CASH: Additions to utility plant --major construction Additions to (reallocations of ) utility plant —normal construction Payments of long-term debt Bonded Other Equity returned to the City Advances between utilities Increase in accounts receivable Increase (decrease) in deferred compensated absences Decrease in accrued interest payable Increase (decrease) in interest and dividends receivable Increase in prepaid expenses Decrease (increase) in customer advances Total Uses of Cash Net Cash Generated (Used) $10,595,671 13,259,174 2,000,000 102,601 4,673,499 0 1,539,073 87,473 52,720 106,610 175,949 62,782 $32,655,552 $14,069,389 12,314,071 598,150 $34,687,770 858,369 183,270 596,824 76,553 0 (1,668,547 $34,734,239 $1 1,606,939 10,921,924 2,000,000 96,162 4,646,254 0 891,010 (18,486) 36,241 38,871 75,014 22,563 $30,316,492 S 4.417.747 NOTE A —Allocation to water, electric, and steam operations —components affecting cash and funds are allocated to the respective operation based on actual sources or uses of cash by operation or on a basis derived from an identifiable source or use of cash. WATER YEAR ENDED JUNE 30 1989 $ 1,996,107 1,699,004 $ 3,695,111 1,427,699 (109,447) 24,379 6 30,330 $ 5,068,078 $ 2,304,573 3,784,840 633,300 9,742 415,135 283,512 (2,633) 15,839 (1,458) 22,350 76,576 $ 7,541,776 $(2,473,698) ELECTRIC STEAM YEAR ENDED JUNE 30 YEAR ENDED JUNE 30 1988 1989 1988 1989 $ 1,892,1 12 $21,065,812 117,474,884 $3,793,044 1,530,394 11,519,404 10,510,891 256,736 598,176 598,150 $4,049,780 $ 3,422,506 $33,183,392 $28,583,925 858,369 183,270 1988 $2,408,553 272,786 $2,681,339 210,291 3,306,060 625,181 502,057 (238,648) 33,136 147,988 59,546 (A02) (16,129) (64) 26 137 (32) (73) 87,239) 572,013 (1,705,012) (104,019) $ 4,436,999 $37,209,479 $27,747,047 $4,447,384 _123,704 $2,550,193 $ 1,658,827 $ 6,348,31 1 $ 8,281 117 $1,942,787 $1,666,995 3,167,796 8,692,188 8,861:635 782,146 (1,107,507) 633,300 1,331,700 9,235 89,018 410,154 3,856,1 13 30,163 1,173,358 29,048 141,810 15,523 36,023 (3,171) 112,585 6,709 146,644 11,394 (1,325) $ 5,968,978 $21,926,425 $(1,531,979) $15,283,054 INCOME AVAILABLE FOR REVENUE BOND DEBT RETIREMENT Net income per income statement Add: Depreciation expense Amortization of deferred costs Interest on long-term debt notes Interest on long-term debt -revenue bonds INCOME AVAILABLE FOR REVENUE BONDS AND INTEREST REDEMPTION Debt retirement pertaining to revenue bonds: Principal Interest INCOME IN EXCESS OF REVENUE BONDS AND INTEREST REQUIREMENTS PERCENT COVERAGE OF REVENUE BONDS AND INTEREST REQUIREMENTS 1,331,700 35,000 35,000 83,287 3,841 3,640 3,833,384 402,251 402,716 8,839 (8,839) 766,376 82,203 94,471 (116,11 A) (51,704) 68,580 19,878 858 840 24,444 (4,517) 17,598 66,629 6,955 1,676 11,169 12,469) 3,172,344 $3,187,351 $1,175,170 4,574,703 $1,260,033 $1,375,023 YEAR ENDED JUNE 30 1989 1988 $26,854,963 $21,775,549 $13,475,144 $12,314,071 598,176 598,150 33,055 51,484 305,000 _ 405,000 $14,411,375 $13,368,705 $41,266,338 $35,144,254 $ 2,000,000 $ 2,000,000 305,000 405,000 $ 2,305,000 F $ 2,405,000 $38,961,338 $32,739,254 1,790% 1,461 % FINANCIAL 8 STATISTICAL INFORMATION FISCAL YEAR ENDING JUNE 30 WATER UTILITY Number of Customers (Average) Residential Commercial IVIWI Water Sales (CCF) Residential Commercial Industrial Other Total Operating Revenues Residential Commercial Industrial Other Total Operating Expenses (Incl. Depr.) Operating Income Net Income ELECTRIC UTILITY Number of Customers (Average) Residential Commercial Industrial Total Electric Sales (MWH) Residential Commercial Industrial Sales for Resale Total Operating Revenues Residential Commercial Industrial Sales for Resale Total Operating Expenses (Incl. Depr.) Operating Income Net Income 1989 39,646 4,869 93 44,608 3,91 1,286 3,414,421 1,998,869 112,237 9,436,813 $ 5,360,249 3,842,497 1,849,247 1,010,060 $ 12,062,053 $ 11,004,808 $ 1,057,245 $ 1,996,107 75,281 10,818 138 86,237 512,571 895,886 781,014 514,321 36,309 2,740,101 $ 27,902,245 44,799,077 34,302,585 14,027,271 5,626,808 $126,657,986 $110,371,976 $ 16,286,010 $ 21,065,812 1988 39,472 4,819 84 44,375 3,796,992 3,380,632 1,925,283 1 12,934 9,215,841 $ 5,190,686 3,818,295 1,791,290 998,869 $ 11,799,140 $ 10,887,943 $ 911,197 $ 1,892,112 1987 39,319 4,765 73 44,157 3,560,054 3,300,521 2,1 16,538 1 12.764 9,089,877 $ 4,853,182 3,432,291 1,786,510 918,591 $ 10,990,574 $ 9,192,907 $ 1,797,667 $ 2,587,122 1986 39,152 4,710 73 43,935 3,748,806 3,324,685 2,768,810 112,764 9,955,065 $ 4,749,877 3,123,489 2,096,942 849,204 $ 10,819,512 $ 9,229,788 $ 1,589,724 $ 2,325,668 1985 38,953 4,674 74 43,701 3,636,785 3,187,802 3,052,057 114,064 9,990,708 $ 4,124,126 2,641,983 2,110,745 749,816 $ 9,626,670 $ 9,432,887 $ 193,783 $ 890,101 74,625 73,507 72,569 72,017 10,672 10,460 10,240 10,059 143 150 150 169 85,440 84,117 82,959 82,245 499,143 467,054 449,082 438,190 855,939 810,016 756,718 723,975 777,907 785,710 803,120 853,884 406,488 491,946 178,160 58,083 34,672 35,690 35,276 35,374 2,574,149 2,590,416 2,222,356 2,109,506 $ 27,534,055 $ 24,194,221 $ 23,598,597 $ 23,980,509 43,725,161 37,814,429 36,032,832 36,074,460 34,790,986 31,772,070 32:956:309 36,865,675 10,594,792 11,876,581 4283466 1,724,401 6,261,303 4,346,241 5,012,412 4,412,626 $122,906,297 $110,003,542 $101,883,616 $103,057,671 i $108,770,309 $103,977,472 $ 97,012,706 $ 96,481,546 $ 14,135,988 $ 6,026,070 $ 4,870,910 $ 6,576,125 $ 17,474,884 $ 9,073,867 $ 8,789,896 $ 10,237,431 FINANCIAL 8 STATISTICAL INFORMATION FISCAL YEAR ENDING JUNE 30 1989 STEAM UTILITY Number of Customers (Average) Residential 36 Commercial 380 Industrial _ 1 Total 417 Steam Sales (MLB) 1988 1987 36 38 379 381 1 1 A16 A20 Residential 41242 ! 4,033 3,872 Commercial 566,138 567,860 493,115 Industrial 968,208 928,641 1,016,980 Other 58,042 46,392 60,501 Total 1,596,630 1,546,926 1,574,468 Operating Revenues Residential $ 28,468 $ 29,972 $ 29,484 Commercial 3,733,638 4,111,781 3,630,298 Industrial 7,804,956 7,369417 6,929,046 Other _ 401,829 356:229 _ 351,006 Total $ 11,968,891 $ 11,867,399 $ 10,939,834 Operating Expenses (Incl. Depr.) __t $ $ 8,622,671 3,346220 $9,387,224 $ 2,480,175 $ $ 9,156,902 1,782,932 Operating Income Net Income $ 3,793:044 $ 2,408,553 $ 1,630,010 CONSOLIDATED UTILITIES BALANCE SHEET Plant in Service (Incl. Common) Reserve for Depreciation Construction Work $ 388,829,870 $ 368,592,595 $(210,935,075) $(199,291,588) $ 351,666,565 $(188,965,460) 1986 1985 37 36 388 397 1 1 426 434 4,051 3,839 514,173 515,984 974,561 965,713 63,134 64,169 1,555,919 1,549,705 $ 30,669 $ 30,136 3,827,901 3,951,431 6,651,837 6,852,304 359,421 372,373 $ 10,869,828 $ 11,206,244 $ 9,480,442 $ 9,283,939 $ 1,389,386 $ 1,922,305 $ 1,256,489 I $ 1,956,061 $ 333,196,710 $ 323,572,986 $(179,329,555) $(169,365,169) in Progress 17,317,236 1 15,429,697 1 1,684,907 11,875,170 1,905,638 Current Assets 75,176,566 71,574,461 68,845,907 62,505,788 65,243,155 Other Assets 40,969,697 �$ 31,210,648 28,580,977 33,476,498 22,991,429 Total 311,358,294 $ 287,515,813 $ 271,812,896 $ 261,724,611 $ 244,348,039 City Equity $ 278,485810 $ 254,876,647 $ 236,888,983 $ 226,670,175 $ 217,629,876 Long Term Debt 7,356:845 9,466351 11,396,592 13,481,843 15,562,178 Current Liabilities 14,968,347 14,343:873 15,954,759 15,557,284 10,946,021 Other Liabilities 10,547,292 8 828,942 7,572 562 6,015,309 209,964 Total $ 311,358,294 $ 287,515,813 $ 271,812,896 $ 261,724,611 $ 244,348,039 INCOME STATEMENT Operating Revenues $ 150,21 1,406 $ 146,572,836 $ 131,933,950 $ 123,572,956 $ 123,890,585 Operating Expenses (Incl. De r. 129,521,931 129,045,476 122,327,281 115,722,936 115,198,372 Operating Income $ 20,689,475 $ 17,527,360 $ 9,606,669 $ 7,850,020 $ 8,692,213 Net Income $ 26,854,963 $ 21,775,549 $ 13,290,999 $ 12,372,053 $ 13,083,593 LANSING BOARD OF WATER AND LIGHT 123 W. Ottawa Lansing, Michigan 48933