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                                                                                            City of Muskegon

                                                                        STATEMENT OF NET ASSETS

                                                                                            December 31, 2003



                                                                                                Primary Government
                                                          Governmental                             Business-Type                                                       Component                    Total Reporting 
                                                              Activities                                Activities                             Total                        Units                            Entity
ASSETS
   Cash and cash equivalents (note A and B)            $            8,721,894
                                                                                                   $         3,646,033
                                                                                                                                               12,367,927
                                                                                                                                   $                                               925,999
                                                                                                                                                                    $                              $          13,293,926
                                                                                                                                                                                                                  
   Investments (note A and B)                                        6,824,653
                                                                                                                             -                    6,824,653
                                                                                                                                                                                             -                   6,824,653
                                                                                                                                                                                                                       
   Receivables (net of allowance for 
    uncollectibles) (note A)
      Accounts and loans                                             1,773,505
                                                                                                              2,249,014
                                                                                                                                                  4,022,519
                                                                                                                                                                                             -                   4,022,519
                                                                                                                                                                                                                       
      Special assessments
         Current                                                         571,721
                                                                                                                             -                      571,721
                                                                                                                                                                                             -                      571,721
                                                                                                                                                                                                                            
         Non-current                                                 3,896,039
                                                                                                                             -                    3,896,039
                                                                                                                                                                                             -                   3,896,039
                                                                                                                                                                                                                       
      Taxes
         Property                                                    6,056,493
                                                                                                                             -                    6,056,493
                                                                                                                                                                                   707,651
                                                                                                                                                                                                                 6,764,144
                                                                                                                                                                                                                       
         Income                                                      2,533,649
                                                                                                                             -                    2,533,649
                                                                                                                                                                                             -                   2,533,649
                                                                                                                                                                                                                       
   Internal balances                                                (1,147,985)
                                                                                                              1,147,985
                                                                                                                                                              -                              -                                  - 
   Due from components units (note E)                                    177,304
                                                                                                                             -                      177,304
                                                                                                                                                                                             -                      177,304
                                                                                                                                                                                                                            
   Due from other governmental units                                 3,009,112
                                                                                                                 540,535
                                                                                                                                                  3,549,647
                                                                                                                                                                                             -                   3,549,647
                                                                                                                                                                                                                       
   Inventories (note A)                                                    10,404
                                                                                                                   93,364
                                                                                                                                                    103,768
                                                                                                                                                                                             -                      103,768
                                                                                                                                                                                                                            
   Prepaid items (note A)                                                151,055
                                                                                                                   22,767
                                                                                                                                                    173,822
                                                                                                                                                                                             -                      173,822
                                                                                                                                                                                                                            
   Restricted cash and cash 
    equivalents (note A and B)                                                      -                            822,559
                                                                                                                                                    822,559
                                                                                                                                                                                             -                      822,559
                                                                                                                                                                                                                            
   Deferred debt expense (note A)                                          76,433
                                                                                                                 143,455
                                                                                                                                                    219,888
                                                                                                                                                                                   135,793
                                                                                                                                                                                                                    355,681
                                                                                                                                                                                                                            
   Contract receivable (note A)                                                     -                         3,422,522
                                                                                                                                                  3,422,522
                                                                                                                                                                                             -                   3,422,522
                                                                                                                                                                                                                       
   Wastewater facility rights (net of accumlated
    amortization of $2,012,722) (note A)                                            -                         1,451,372
                                                                                                                                                  1,451,372
                                                                                                                                                                                             -                   1,451,372
                                                                                                                                                                                                                       
                                                                   32,654,277
                                                                                                            13,539,606
                                                                                                                                               46,193,883
                                                                                                                                                                                 1,769,443
                                                                                                                                                                                                               47,963,326
                                                                                                                                                                                                                  

   Capital assets (note A and C)
      Land, construction in progress and other
       assets not being depreciated                                22,939,199
                                                                                                              9,504,729
                                                                                                                                               32,443,928
                                                                                                                                                                                   400,000
                                                                                                                                                                                                               32,843,928
                                                                                                                                                                                                                  
      Other capital assets, net of depreciation                    16,263,521
                                                                                                            31,847,505
                                                                                                                                               48,111,026
                                                                                                                                                                                 3,783,871
                                                                                                                                                                                                               51,894,897
                                                                                                                                                                                                                  
   Total capital assets                                            39,202,720
                                                                                                            41,352,234
                                                                                                                                               80,554,954
                                                                                                                                                                                 4,183,871
                                                                                                                                                                                                               84,738,825
                                                                                                                                                                                                                  

TOTAL ASSETS                                           $          71,856,997
                                                                                                   $       54,891,840
                                                                                                                                           126,748,837
                                                                                                                                   $                                             5,953,314
                                                                                                                                                                    $                              $        132,702,151
                                                                                                                                                                                                             

LIABILITIES AND NET ASSETS
Liabilities
   Accounts payable                                    $            1,059,956
                                                                                                   $            190,287
                                                                                                                                                  1,250,243
                                                                                                                                   $                                $                       -      $            1,250,243
                                                                                                                                                                                                                       
   Accrued payroll                                                       352,786
                                                                                                                   53,307
                                                                                                                                                    406,093
                                                                                                                                                                                             -                      406,093
                                                                                                                                                                                                                            
   Accrued interest                                                        26,700
                                                                                                                   72,000
                                                                                                                                                       98,700
                                                                                                                                                                                      48,400
                                                                                                                                                                                                                    147,100
                                                                                                                                                                                                                            
   Due to primary government (note E)                                               -                                        -                                -                    177,304
                                                                                                                                                                                                                    177,304
                                                                                                                                                                                                                            
   Due to other governmental units                                                  -                            128,647
                                                                                                                                                    128,647
                                                                                                                                                                                             -                      128,647
                                                                                                                                                                                                                            
   Deferred revenue (note A)                                       14,721,112
                                                                                                                             -                 14,721,112
                                                                                                                                                                                   591,709
                                                                                                                                                                                                               15,312,821
                                                                                                                                                                                                                  
                                                                   16,160,554
                                                                                                                 444,241
                                                                                                                                               16,604,795
                                                                                                                                                                                   817,413
                                                                                                                                                                                                               17,422,208
                                                                                                                                                                                                                  

   Long-term liabilities (note A and D)
      Due within one year
         Bonds payable                                               1,335,000
                                                                                                              1,527,267
                                                                                                                                                  2,862,267
                                                                                                                                                                                   180,000
                                                                                                                                                                                                                 3,042,267
                                                                                                                                                                                                                       
         Compensated absences                                            242,658
                                                                                                                   31,659
                                                                                                                                                    274,317
                                                                                                                                                                                             -                      274,317
                                                                                                                                                                                                                            
      Due in more than one year
         Bonds payable                                               5,824,019
                                                                                                            13,611,002
                                                                                                                                               19,435,021
                                                                                                                                                                                 9,206,403
                                                                                                                                                                                                               28,641,424
                                                                                                                                                                                                                  
         Compensated absences                                        1,213,294
                                                                                                                 158,298
                                                                                                                                                  1,371,592
                                                                                                                                                                                             -                   1,371,592
                                                                                                                                                                                                                       
   Total long-term liabilities                                       8,614,971
                                                                                                            15,328,226
                                                                                                                                               23,943,197
                                                                                                                                                                                 9,386,403
                                                                                                                                                                                                               33,329,600
                                                                                                                                                                                                                  
Total liabilities                                                  24,775,525
                                                                                                            15,772,467
                                                                                                                                               40,547,992
                                                                                                                                                                            10,203,816
                                                                                                                                                                                                               50,751,808
                                                                                                                                                                                                                  

Net assets (note A)
   Invested in capital assets, net of related debt                 32,120,134
                                                                                                            27,808,792
                                                                                                                                               59,928,926
                                                                                                                                                                                             -                 59,928,926
                                                                                                                                                                                                                  
   Restricted for
      Streets and highways                                           4,336,952
                                                                                                                             -                    4,336,952
                                                                                                                                                                                             -                   4,336,952
                                                                                                                                                                                                                       
      Debt service                                                       127,255
                                                                                                                 822,559
                                                                                                                                                    949,814
                                                                                                                                                                                             -                      949,814
                                                                                                                                                                                                                            
      Perpetual care
        Expendable                                                         63,798
                                                                                                                             -                         63,798
                                                                                                                                                                                             -                        63,798
                                                                                                                                                                                                                                 
        Non-expendable                                               1,146,782
                                                                                                                             -                    1,146,782
                                                                                                                                                                                             -                   1,146,782
                                                                                                                                                                                                                       
   Unrestricted                                                      9,286,551
                                                                                                            10,488,022
                                                                                                                                               19,774,573
                                                                                                                                                                             (4,250,502)
                                                                                                                                                                                                               15,524,071
                                                                                                                                                                                                                  
Total net assets                                                   47,081,472
                                                                                                            39,119,373
                                                                                                                                               86,200,845
                                                                                                                                                                             (4,250,502)
                                                                                                                                                                                                               81,950,343
                                                                                                                                                                                                                  

TOTAL LIABILITIES AND NET ASSETS                       $          71,856,997
                                                                                                   $       54,891,840
                                                                                                                                           126,748,837
                                                                                                                                   $                                             5,953,314
                                                                                                                                                                    $                              $        132,702,151
                                                                                                                                                                                                             

The accompanying notes are an integral part of this statement.