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                                                                                  City of Muskegon
                                                                                  Proprietary Funds

                                                            STATEMENT OF FUND NET ASSETS

                                                                                  December 31, 2002

                                                                                               Business-Type Activities                                                                        Governmental
                                                                                                        Enterprise Funds                                                                            Activities

                                                                                                                                 Marina and                                                          Internal 
                                                              Sewer                               Water                     Launch Ramp                                         Total                Service
ASSETS
Current assets
   Cash and cash equivalents (note A and B)            $      1,231,951
                                                                                         $          3,366,901
                                                                                                                            $                  -                 $       4,598,852
                                                                                                                                                                                               $       1,643,365
                                                                                                                                                                                                         
   Accounts receivable                                         1,220,463
                                                                                                     1,262,766
                                                                                                                                      37,943
                                                                                                                                                                          2,521,172
                                                                                                                                                                                                                  29,900
                                                                                                                                                                                                              
   Inventories (note A)                                             13,014
                                                                                                          56,369
                                                                                                                                                -                              69,383
                                                                                                                                                                                                               6,419
                                                                                                                                                                                                                   
   Prepaid items (note A)                                             8,564
                                                                                                          10,183
                                                                                                                                           664
                                                                                                                                                                               19,411
                                                                                                                                                                                                                  23,739
                                                                                                                                                                                                              
Total current assets                                           2,473,992
                                                                                                     4,696,219
                                                                                                                                      38,607
                                                                                                                                                                          7,208,818
                                                                                                                                                                                                        1,703,423
                                                                                                                                                                                                         

Restricted assets
   Revenue bond reserve
      Cash and cash equivalents (note A and B)                                -                         822,559
                                                                                                                                                -                            822,559
                                                                                                                                                                                                                       - 
Total restricted assets                                                       -                         822,559
                                                                                                                                                -                            822,559
                                                                                                                                                                                                                       - 

Noncurrent assets
   Deferred debt expense (note A)                                             -                         170,228
                                                                                                                                                -                            170,228
                                                                                                                                                                                                                       - 
   Contract receivable (note A)                                4,100,419
                                                                                                                    -                           -                         4,100,419
                                                                                                                                                                                                                       - 
   Wastewater facility rights (net of
    accumulated amortization of
    $1,655,696) (note A)                                       1,808,398
                                                                                                                    -                           -                         1,808,398
                                                                                                                                                                                                                       - 
   Capital assets (note A and C)                                                                                                                                                                
      Land, construction in progress and other                                                                                                                                                  
       assets not being depreciated                            1,225,169
                                                                                                     6,550,397
                                                                                                                                    639,753
                                                                                                                                                                          8,415,319
                                                                                                                                                                                                                       - 
      Other capital assets, net of depreciation              10,586,968
                                                                                                   21,156,989
                                                                                                                                    782,928
                                                                                                                                                                        32,526,885
                                                                                                                                                                                                        3,080,881
                                                                                                                                                                                                         
   Total capital assets                                      11,812,137
                                                                                                   27,707,386
                                                                                                                                 1,422,681
                                                                                                                                                                        40,942,204
                                                                                                                                                                                                        3,080,881
                                                                                                                                                                                                         
Total noncurrent assets                                      17,720,954
                                                                                                   27,877,614
                                                                                                                                 1,422,681
                                                                                                                                                                        47,021,249
                                                                                                                                                                                                        3,080,881
                                                                                                                                                                                                         

TOTAL ASSETS                                           $    20,194,946
                                                                                         $        33,396,392
                                                                                                                            $   1,461,288
                                                                                                                                                                 $     55,052,626
                                                                                                                                                                                               $       4,784,304
                                                                                                                                                                                                         

LIABILITIES AND NET ASSETS
Liabilities
   Current liabilities
      Current maturities of long-term debt             $      1,151,091
                                                                                         $             405,000
                                                                                                                            $                 -                  $       1,556,091
                                                                                                                                                                                               $                      - 
      Accounts payable                                              21,016
                                                                                                        137,526
                                                                                                                                      72,238
                                                                                                                                                                             230,780
                                                                                                                                                                                                           445,729
                                                                                                                                                                                                              
      Accrued payroll                                               14,508
                                                                                                          28,975
                                                                                                                                           892
                                                                                                                                                                               44,375
                                                                                                                                                                                                                  20,354
                                                                                                                                                                                                              
      Accrued interest                                                        -                           72,000
                                                                                                                                                -                              72,000
                                                                                                                                                                                                                       - 
      Due to other funds (note E)                                             -                                     -               183,560
                                                                                                                                                                             183,560
                                                                                                                                                                                                               1,018
                                                                                                                                                                                                                   
      Due to other governmental units                               75,695
                                                                                                                    -                           -                              75,695
                                                                                                                                                                                                                       - 
      Compensated absences payable (note A)                         50,603
                                                                                                        132,042
                                                                                                                                        3,883
                                                                                                                                                                             186,528
                                                                                                                                                                                                                  95,446
                                                                                                                                                                                                              
   Total current liabilities                                   1,312,913
                                                                                                        775,543
                                                                                                                                    260,573
                                                                                                                                                                          2,349,029
                                                                                                                                                                                                           562,547
                                                                                                                                                                                                              

   Noncurrent liabilities (note A and D)
      Contracts payable-Muskegon County                        7,038,014
                                                                                                                    -                           -                         7,038,014
                                                                                                                                                                                                                       - 
      Bonds payable (net of 
       unamortized discount of $93,414)                                       -                      9,656,586
                                                                                                                                                -                         9,656,586
                                                                                                                                                                                                                       - 
      Less current maturities                                 (1,151,091)
                                                                                                       (405,000)
                                                                                                                                                -                        (1,556,091)
                                                                                                                                                                                                                       - 
   Total noncurrent liabilities                                5,886,923
                                                                                                     9,251,586
                                                                                                                                                -                       15,138,509
                                                                                                                                                                                                                       - 
Total liabilities                                              7,199,836
                                                                                                   10,027,129
                                                                                                                                    260,573
                                                                                                                                                                        17,487,538
                                                                                                                                                                                                           562,547
                                                                                                                                                                                                              

Net assets (note A)
   Invested in capital assets, net of related debt             6,582,521
                                                                                                   18,221,028
                                                                                                                                 1,422,681
                                                                                                                                                                        26,226,230
                                                                                                                                                                                                        3,080,881
                                                                                                                                                                                                         
   Restricted for
      Debt service                                                            -                         822,559
                                                                                                                                                -                            822,559
                                                                                                                                                                                                                       - 
   Unrestricted                                                6,412,589
                                                                                                     4,325,676
                                                                                                                                   (221,966)
                                                                                                                                                                        10,516,299
                                                                                                                                                                                                        1,140,876
                                                                                                                                                                                                         
Total net assets                                             12,995,110
                                                                                                   23,369,263
                                                                                                                                 1,200,715
                                                                                                                                                                        37,565,088
                                                                                                                                                                                                        4,221,757
                                                                                                                                                                                                         

TOTAL LIABILITIES AND NET ASSETS                       $    20,194,946
                                                                                         $        33,396,392
                                                                                                                            $   1,461,288
                                                                                                                                                                 $     55,052,626
                                                                                                                                                                                               $       4,784,304
                                                                                                                                                                                                         


Reconciliation to the statement of net assets

Total net assets of enterprise funds                                                                                                                             $     37,565,088
                                                                                                                                                                       

Some amounts reported for business-type
 activities in the statement of net assets are
 different because certain internal service fund
 assets and liabilities are included with business-                                                                                                                       1,131,644
                                                                                                                                                                                 
 type activities

Net assets of business-type activities                                                                                                                           $     38,696,732
                                                                                                                                                                       


The accompanying notes are an integral part of this statement.