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                                                                                        City of Muskegon
                                                                                        Proprietary Funds

                                  STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS

                                                           Year Ended December 31, 2002

                                                                                                        Business-Type Activities                                                                           Governmental
                                                                                                                       Enterprise Funds                                                                        Activities

                                                                                                                                        Marina and 
                                                               Sewer                                    Water                         Launch Ramp                                Total                     Internal Service

Operating revenues
   Charges for services                             $      3,941,994
                                                                                               $    3,645,582
                                                                                                                                      $         262,447
                                                                                                                                                                      $      7,850,023
                                                                                                                                                                                                          $                      - 
   Charges to other funds                                         -                                         -                                        -                               -                              5,569,027
                                                                                                                                                                                                                        
   Other revenues                                                75,191
                                                                                                         320,966
                                                                                                                                                   14,864
                                                                                                                                                                                  411,021
                                                                                                                                                                                                                       277,053
                                                                                                                                                                                                                             
Total operating revenues                                    4,017,185
                                                                                                     3,966,548
                                                                                                                                                 277,311
                                                                                                                                                                              8,261,044
                                                                                                                                                                                                                    5,846,080
                                                                                                                                                                                                                        

Operating expenses
   Operating and administrative                                370,396
                                                                                                         389,093
                                                                                                                                                 228,796
                                                                                                                                                                                  988,285
                                                                                                                                                                                                                    2,550,752
                                                                                                                                                                                                                        
   Insurance premiums and claims                                          -                                         -                                        -                               -                      3,683,992
                                                                                                                                                                                                                        
   Wastewater treatment                                     2,343,279
                                                                                                                    -                                        -                2,343,279
                                                                                                                                                                                                                                  - 
   Filtration plant operations                                            -                              987,923
                                                                                                                                                             -                    987,923
                                                                                                                                                                                                                                  - 
   Water distribution                                                     -                          1,645,977
                                                                                                                                                             -                1,645,977
                                                                                                                                                                                                                                  - 
   Bad debts                                                     13,300
                                                                                                             7,966
                                                                                                                                                             -                      21,266
                                                                                                                                                                                                                                  - 
   Depreciation and amortization                               601,586
                                                                                                         569,884
                                                                                                                                                   64,414
                                                                                                                                                                              1,235,884
                                                                                                                                                                                                                       752,977
                                                                                                                                                                                                                             
Total operating expenses                                    3,328,561
                                                                                                     3,600,843
                                                                                                                                                 293,210
                                                                                                                                                                              7,222,614
                                                                                                                                                                                                                    6,987,721
                                                                                                                                                                                                                        

   Operating income (loss)                                     688,624
                                                                                                         365,705
                                                                                                                                                  (15,899)
                                                                                                                                                                              1,038,430
                                                                                                                                                                                                                  (1,141,641)
                                                                                                                                                                                                                   

Nonoperating revenues (expenses)
   Investment income                                             22,263
                                                                                                           84,467
                                                                                                                                                        600
                                                                                                                                                                                  107,330
                                                                                                                                                                                                                         27,589
                                                                                                                                                                                                                                  
   Gain on sale of capital asset                                          -                                         -                                        -                               -                           93,170
                                                                                                                                                                                                                                  
   State grants                                                462,131
                                                                                                                    -                              37,352
                                                                                                                                                                                  499,483
                                                                                                                                                                                                                                  - 
   Interest expense                                          (137,622)
                                                                                                       (453,666)
                                                                                                                                                             -                  (591,288)
                                                                                                                                                                                                                                  - 
Total nonoperating revenues (expenses)                         346,772
                                                                                                       (369,199)
                                                                                                                                                   37,952
                                                                                                                                                                                    15,525
                                                                                                                                                                                                                       120,759
                                                                                                                                                                                                                             

   Income (loss) before operating transfers                 1,035,396
                                                                                                           (3,494)
                                                                                                                                                   22,053
                                                                                                                                                                              1,053,955
                                                                                                                                                                                                                  (1,020,882)
                                                                                                                                                                                                                   

Operating transfers
   Operating transfers in                                                 -                                         -                                        -                               -                      1,206,722
                                                                                                                                                                                                                        
   Operating transfers out                                       (1,845)
                                                                                                                    -                                        -                      (1,845)
                                                                                                                                                                                                                                  - 
Total operating transfers                                        (1,845)
                                                                                                                    -                                        -                      (1,845)
                                                                                                                                                                                                                    1,206,722
                                                                                                                                                                                                                        

   Change in net assets                                     1,033,551
                                                                                                           (3,494)
                                                                                                                                                   22,053
                                                                                                                                                                              1,052,110
                                                                                                                                                                                                                       185,840
                                                                                                                                                                                                                             

Net assets at beginning of year                           11,961,559
                                                                                                   23,372,757
                                                                                                                                              1,178,662
                                                                                                                                                                            36,512,978
                                                                                                                                                                                                                    4,035,917
                                                                                                                                                                                                                        
 Net assets at end of year                          $    12,995,110
                                                                                               $  23,369,263                                  1,200,715
                                                                                                                                      $                               $    37,565,088                     $        4,221,757
                                                                                                                                                                                                                    


Reconciliation to the statement of activities

Total change in net assets of enterprise funds                                                                                                                        $      1,052,110
                                                                                                                                                                                  

Some amounts reported for business-type activities
 in the statements of activities are different because
 the net revenue (expense) of certain internal service 
 funds is reported with business-type activities                                                                                                                                    41,644
                                                                                                                                                                                                 

Change in net assets of business-type activities                                                                                                                      $      1,093,754








The accompanying notes are an integral part of this statement.