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CITY OF MUSKEGON,
MICHIGAN
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED
DECEMBER 31, 2003
Prepared By
FINANCIAL SERVICES DIVISION
Timothy Paul
Director of Finance
Elizabeth Lewis Derrick Smith
Assistant Finance Director City Treasurer
Kenneth Grant James Maurer
Income Tax Administrator Information Systems Director
Candace Baker
Kathy Coleman
COMPREHENSIVE ANNUAL FINANCIAL REPORT
City of Muskegon
December 31, 2003
TABLE OF CONTENTS
I. INTRODUCTORY SECTION
Letter of Transmittal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Certificate of Achievement for Excellence in Financial Reporting. . . . . . . . . 12
Organization Chart. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
List of Principal Officials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
II. FINANCIAL SECTION
Independent Auditors' Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Management's Discussion and Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Financial Statements
Government-Wide Financial Statements
Statement of Net Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Statement of Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Fund Financial Statements
Balance Sheet Governmental Funds. . . . . . . . . . . . . . . . . . . . . . . . . . 34
Reconciliation of Total Governmental Fund Balances to Net
Assets of Governmental Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Statement of Revenues, Expenditures and Changes in Fund
Balances Governmental Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Statement of Fund Net Assets Proprietary Funds. . . . . . . . . . . . . . . . 38
Statement of Revenues, Expenses and Changes in Fund Net
Assets Proprietary Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Statement of Cash Flows Proprietary Funds. . . . . . . . . . . . . . . . . . . . 40
Statement of Fiduciary Net Assets Fiduciary Funds. . . . . . . . . . . . . . 41
Statement of Changes in Fiduciary Net Assets Fiduciary Funds. . . . 42
Statement of Net Assets Discretely Presented Component Units. . . . 43
Statement of Activities Discretely Presented Component Units. . . . . . 44
Balance Sheet Discretely Presented Component Units. . . . . . . . . . . . 45
Reconciliation of Total Discretely Presented Component Unit Fund
Balances to Net Assets of Discretely Presented Component Unit
Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Statement of Revenues, Expenditures and Changes in Fund
Balances Discretely Presented Component Units. . . . . . . . . . . . . . 47
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Discretely Presented Component
Units to the Statement of Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
COMPREHENSIVE ANNUAL FINANCIAL REPORT
City of Muskegon
December 31, 2003
TABLE OF CONTENTS CONTINUED
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Required Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund
Balances Budget and Actual
General Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Major Special Revenue Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Schedule of Funding Progress and Employer Contributions
Pension Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Supplemental Financial Information
Non-Major Governmental Funds
Description of Non-Major Governmental Funds. . . . . . . . . . . . . . . . . . . 86
Combining Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Combining Statement of Revenues, Expenditures and Changes
in Fund Balances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Combining Balance Sheet Non-Major Special Revenue Funds. . . . . 90
Combining Statement of Revenues, Expenditures and Changes
in Fund Balances Non-Major Special Revenue Funds. . . . . . . . . . 91
Statement of Revenues, Expenditures and Changes in Fund
Balances Budget and Actual - Non-Major
Special Revenue Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Combining Balance Sheet Non-Major Debt Service Funds. . . . . . . . 94
Combining Statement of Revenues, Expenditures and Changes
in Fund Balances Non-Major Debt Service Funds. . . . . . . . . . . . . . 95
Combining Balance Sheet Non-Major Capital Projects Funds. . . . . . 96
Combining Statement of Revenues, Expenditures and Changes
in Fund Balances Non-Major Capital Projects Funds. . . . . . . . . . . . . 97
Internal Service Funds
Description of Internal Service Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Combining Statement of Fund Net Assets. . . . . . . . . . . . . . . . . . . . . . . 100
Combining Statement of Revenues, Expenses and Changes
in Fund Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .101
Combining Statement of Cash Flows. . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Fiduciary Funds
Description of Fiduciary Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Pension Trust Funds
Combining Statement of Plan Net Assets. . . . . . . . . . . . . . . . . . . . . . 104
Combining Statement of Changes in Plan Net Assets. . . . . . . . . . . . .105
COMPREHENSIVE ANNUAL FINANCIAL REPORT
City of Muskegon
December 31, 2003
TABLE OF CONTENTS CONTINUED
Agency Funds
Combining Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Statement of Changes in Assets and Liabilities. . . . . . . . . . . . . . . . . . 107
Schedule of Indebtness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
III. STATISTICAL SECTION
General Fund Revenues and Other Financing Sources by Source. . . . . . . 114
General Fund Expenditures and Other Uses by Function. . . . . . . . . . . . . . 115
Assessed and Estimated Actual Value of Taxable Property. . . . . . . . . . . . . 116
Ten Largest Property Assessments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
Ten Largest Taxpayers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
Tax Rates per $1,000 State Equalized Valuation. . . . . . . . . . . . . . . . . . . . . 119
Property Tax Levies and Collections. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .120
Special Assessment Levies and Collections. . . . . . . . . . . . . . . . . . . . . . . . .121
Statement of Bonded Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Statement of Legal Debt Margin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
Statement of Direct and Overlapping Debt. . . . . . . . . . . . . . . . . . . . . . . . . . 124
Ratio of Debt Service for General Bonded Debt to
Total General Fund Expenditures and Other Uses. . . . . . . . . . . . .. . . . . . 125
Revenue Bond Coverage
Sewage Disposal System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Water Supply System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
Ratio of Net Bonded Debt to Assessed Value and
Net Bonded Debt Per Capita. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
Property Values, Construction Activity and Bank Deposits. . . . . . . . . . . . . .129
Demographic Statistics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
Labor Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
Schedule of Insurance in Force. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
Salaries of Principal Officials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
CITY OF MUSKEGON, MICHIGAN
LIST OF PRINCIPAL OFFICIALS
December 31, 2003
ELECTED OFFICIALS
Mayor-Commissioner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Steve Warmington
At Large
Vice Mayor-Commissioner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . William Larson
At Large
Commissioner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Chris Carter
Ward 1
Commissioner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Clara Shepherd
Ward 2
Commissioner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Lawrence O. Spataro
Ward 3
Commissioner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Robert A. Schweifler
Ward 4
Commissioner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stephen J. Gawron
At Large
APPOINTED OFFICIALS
City Manager. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bryon L. Mazade
City Attorney. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . John C. Schrier
Director of Finance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Timothy J. Paul