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                                                          City of Muskegon
                                          Discretely Presented Component Units

 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
               OF DISCRETELY PRESENTED COMPONENT UNITS TO THE STATEMENT OF ACTIVITIES

                                                      December 31, 2003


Net change in fund balances - total discretely presented component 
 unit funds                                                                                                     $             (3,643,102)
                                                                                                                            

Amounts reported for discretely presented component unit activities  
 in the statement of activities are different because:

   Discretely presented component unit funds report capital outlays 
    as expenditures. However, in the statement of activities, the cost of 
    those assets is depreciated over their estimated useful lives.
      Expenditures for capital assets                                         $          3,479,455
                                                                                        
      Less current year depreciation                                                          (14,387)
                                                                                                                                3,465,068
                                                                                                                                 

   The issuance of long-term debt provides current financial resources
     to discretely presented component unit funds, while the repayment 
     of the principal of long-term debt consumes the current financial 
     resources of discretely presented component unit funds.  
     Neither transaction, however, has any effect on net assets.  Also, 
     discretely presented component units report the effect of issuance 
     costs, premiums, discounts and similar items when debt is first 
     issued, whereas these amounts are deferred and amortized in the 
     statement of activities.
       Amortization of discount and issuance costs                                              (6,752)
                                                                                                       
       Principal payments                                                                    995,000
                                                                                             
       Change in accrued interest                                                                4,000
                                                                                                                                   992,248
                                                                                                                                      

Change in net assets of discretely presented component unit activities                                          $                 814,214
























The accompanying notes are an integral part of this statement.