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CITY OF MUSKEGON
CITY COMMISSION MEETING
DECEMBER 10, 2019 @ 5:30 P.M.
MUSKEGON CITY COMMISSION CHAMBERS
933 TERRACE STREET, MUSKEGON, MI 49440
AGENDA
□ CALL TO ORDER:
□ PRAYER:
□ PLEDGE OF ALLEGIANCE:
□ ROLL CALL:
□ HONORS AND AWARDS:
A. Recognition of LLS, Inc – Good Buddy Bucks Program
B. Recognition of Max McKee/Mart Dock for Sponsorship and Participation in
Youth Activities
C. Firearm Activity Information Presentation Public Safety
□ PUBLIC COMMENT ON AGENDA ITEMS:
□ CONSENT AGENDA:
A. Approval of Minutes City Clerk
B. Transmittal of June 30, 2019 Comprehensive Annual Financial Report
Finance
https://www.muskegon-
mi.gov/cresources/2019%20CAFR%20Web%20Version.pdf
C. Equipment Replacement DPW/Equipment Division
D. MDOT Agreement – Lakeshore Drive at Beach Street Public Works
E. Coastal Zone Grant Application Public Works
F. Allocation of Expected Muskegon County Senior Millage Additional Funds
Community & Neighborhood Services
G. Approval of Lead Abatement Contract for 602 Ada
Community & Neighborhood Services
Page 1 of 2
H. Approval of Rehab Contract for 602 Ada
Community & Neighborhood Services
I. Approval of Rehab Contract for 567 Leonard
Community & Neighborhood Services
J. Approval of Neighborhood Enterprise Zone Certificate for 1245 5th Street
Planning
K. Revocation of Alley Vacation Resolutions Planning
L. Non-Union Pay Benefits City Manager
M. Arena Restrooms – Phase 2 City Manager
N. Community Relations Committee Recommendations Clerk
□ PUBLIC HEARINGS:
A. Public Hearing on the Docks Brownfield Plan, 1490 Edgewater Economic
Development
□ UNFINISHED BUSINESS:
□ NEW BUSINESS:
A. 1601 Beach Lessor Agreement Development Services
B. Arena Naming Rights Sponsorship City Manager
□ ANY OTHER BUSINESS:
□ PUBLIC COMMENT ON NON-AGENDA ITEMS:
► Reminder: Individuals who would like to address the City Commission shall do the following:
► Fill out a request to speak form attached to the agenda or located in the back of the room.
► Submit the form to the City Clerk.
► Be recognized by the Chair.
► Step forward to the microphone.
► State name and address.
► Limit of 3 minutes to address the Commission.
► (Speaker representing a group may be allowed 10 minutes if previously registered with City Clerk.)
□ CLOSED SESSION:
□ ADJOURNMENT:
ADA POLICY: THE CITY OF MUSKEGON WILL PROVIDE NECESSARY AUXILIARY AIDS AND SERVICES TO INDIVIDUALS
WHO WANT TO ATTEND THE MEETING UPON TWENTY-FOUR HOUR NOTICE TO THE CITY OF MUSKEGON. PLEASE
CONTACT ANN MARIE MEISCH, CITY CLERK, 933 TERRACE STREET, MUSKEGON, MI 49440 OR BY CALLING (231) 724-
6705 OR TTY/TDD DIAL 7-1-1-22 TO REQUEST A REPRESENTATIVE TO DIAL (231) 724-6705.
Page 2 of 2
Memorandum
To: Mayor and Commissioners
From: Frank Peterson
Re: City Commission Meeting
Date: December 5, 2019
Here is a quick outline of the items on our agendas:
Work Session:
1. State Representative Terry Sabo will be in attendance to recognize Commissioners
Turnquist and Warren for their years of service.
2. The City’s Auditor will be in attendance to present the audit findings. This is usually done
at a regular session, but he is unavailable Tuesday. The formal action to accept the audit
will not take place until Tuesday’s regular session.
3. Staff will be prepared to discuss a proposal from Platinum Contracting to renovate the
men’s and women’s restrooms along the Shoreline Drive side of the arena. Originally,
staff thought this could wait until next fiscal year, but a number of logistical and
maintenance issues have arisen, and staff feels that undertaking the renovation this
winter will be in the best interest of the city and the facility. Key decision points include
the following:
1. Leaky pipes that cannot be easily addressed without removing a number of toilet
fixtures, bathroom partitions, and likely some cinder block walls. Note that much
of the plumbing is original to the building – and most of the toilets and sinks are
pushing 25 years old.
2. We are below required counts for women’s restrooms. The renovation will
include slightly shrinking the men’s room to provide more space to expand the
women’s room.
3. We originally committed to adding a nursing mother area on the concourse. That
has proven more difficult than originally anticipated because of the impacts of
both the convention center and the plumbing requirements for more women’s
toilets. The construction will create two adjacent areas that will become nursing
mother areas – one accessed from outside of the women’s restroom (that full
families can use) and one accessed from inside the women’s restroom.
4. Impact of deferred maintenance on the locker rooms below the restrooms. Wet
spots on the lockers and the rubber flooring, and inability to address lighting
issues.
5. The timing is better now than it ever will be. We are booking some potential major
events this summer, which will make losing these restrooms difficult – even for a
few weeks. However, we have a window of time right now where we have three
sets of restrooms – that window will close when the new restaurant breaks ground
later this winter. From a timing and logistics standpoint, this is the absolute best
time to temporarily close the restrooms.
4. Naming Rights Sponsorship for the LC Walker Arena. Staff worked diligently with Mercy
Health to finalize the proposed contract for naming rights. Here are some highlights to
note:
1. The agreement is for 15 years – expiring 12/31/2034.
2. The naming provides exclusivity – stopping us from selling other sponsorships to
their competitors without their written approval. This is normal, and it exists in
many other sponsorship arrangements at the arena. Note that this section
requires the use of their logo along Western Ave and on the marquee sign.
3. The payment schedule has the city collecting the full $1.6 Million over 8.5 years.
Additionally, Mercy agrees to invest $10,000 (matching a city investment of
$10,000) to memorialize LC Walker in the arena in some way.
4. This section governs how we treat our trademarked logos.
5. This section states that the City and WC Hockey believe they have to power/ability
to enter into this agreement.
6. This section states that Mercy believes they have to power/ability to enter into
this agreement.
7. This section talks about the ways in which the agreement could be terminated,
and what happens if it is the Team/City’s fault or Mercy’s fault. Note, if we default,
we may have to pay back some dollars on a prorated basis because Mercy is paying
for much of the sponsorship in advance. If Mercy defaults, we would keep those
dollars, plus, if they default before 7/1/2021, they would pay to remove their own
signage.
8. If litigation occurs as a result of the naming, we would come together and have
the option of either making changes to address the litigation or jointly defending
the terms of the agreement – with a 50/50 split on costs.
9. We agree to try to protect each other’s confidential information, but are still able
to comply with FOIA.
10. Allows us to sign the agreement in counterparts.
11. Provides for contact info regarding each entity.
12. This section talks about how/if the agreement could be assigned to other parties.
Essentially, we need to get each other’s consent. However, we can assign the WC
Hockey portion in the event of a change in team ownership/affiliation.
Regular Session:
1. Under Honors/Awards:
a. Recognition of LLS, Inc for their commitment to the Good Buddy Bucks program.
b. Recognition of Max McKee and the Mart Dock for their sponsorship and
participation in youth activities.
c. Presentation from Department of Public Safety on firearm information and
activity (this was rescheduled from the previous meeting).
2. Under the Consent Agenda, we are asking the Commission to consider the following:
a. Approval of meeting minutes from the most-recent City Commission meeting.
b. Transmittal of the 6/30/19 Audited Financial Statements.
c. Purchase of one aerial truck for $179,509.80
d. Approval of the contract with MDOT to construct the traffic circle at Beach and
Lakeshore Drive.
e. Authorization of an application to the Coastal Zone Grant program.
f. Approval of the allocation of Senior Millage dollars to a number of programs
throughout the community.
g. Approval of the lead abatement contract for the CNS home remodel project at 602
Ada.
h. Approval of the rehabilitation contract for the CNS home remodel project at 602
Ada.
i. Approval of the rehabilitation contract for the CNS home remodel project at 567
Leonard.
j. Approval of an NEZ Certificate for 1245 5th Street.
k. Approval of a request to rescind the resolution originally vacating the alley way
behind the MATS bus station. The requirements of the 1992 vacation were never
met, and the City would prefer to maintain the alley to assist in the redevelopment
of the Western Avenue side of that block.
l. Staff is seeking approval of the non-union pay/benefit schedule for 2020.
m. Staff is seeking approval to accept the proposal from Platinum Contracting to
remodel the restrooms in the LC Walker Arena.
3. Under Public Hearings hear the following:
a. Public hearing on The Docks Brownfield Plan Amendment.
4. Under New Business, we are asking the Commission to consider the following:
a. We are asking that a lessor agreement be signed for the Deck expansion project
at 1601 Beach. This document is required for the business owners to secure the
funding necessary to undertake their expansion.
b. We are seeking approval of the naming rights contract with Mercy Health to
rename the LC Walker Arena as “Mercy Health Arena.”
Let me know if you have any questions/comments/concerns
Frank
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: December 10, 2019 Title: Approval of Minutes
Submitted By: Ann Marie Meisch, MMC Department: City Clerk
Brief Summary: To approve the minutes of the November 26, 2019 Regular Meeting.
Detailed Summary: N/A
Amount Requested: N/A Amount Budgeted: N/A
Fund(s) or Account(s): N/A Fund(s) or Account(s): N/A
Recommended Motion: To approve the minutes.
For City Clerk Use Only:
Commission Action:
CITY OF MUSKEGON
CITY COMMISSION MEETING
NOVEMBER 26, 2019 @ 5:30 P.M.
MUSKEGON CITY COMMISSION CHAMBERS
933 TERRACE STREET, MUSKEGON, MI 49440
MINUTES
The Regular Commission Meeting of the City of Muskegon was held at City Hall,
933 Terrace Street, Muskegon, MI at 5:30 p.m., Tuesday, November 26, 2019,
Pastor EJ Wood, All Shores Wesleyan Church, opened the meeting with a prayer,
after which the Commission and public recited the Pledge of Allegiance to the
Flag.
ROLL CALL FOR THE REGULAR COMMISSION MEETING:
Present: Mayor Stephen J. Gawron, Vice Mayor Eric Hood, Commissioners
Byron Turnquist, Ken Johnson, Debra Warren, Dan Rinsema-Sybenga, and Willie
German, Jr., City Manager Frank Peterson, City Attorney John Schrier, and City
Clerk Ann Meisch.
HONORS AND AWARDS:
A. City of Muskegon Employees – Years of Service Awards
The Mayor and Commissioners congratulated and thanked city employees for
various levels of years of distinguished, loyal service. Certificates of Appreciation
were presented to those employees that were in attendance.
B. LC Walker Arena Renaming to Mercy Health Arena Information
Presentation City Manager
City Manager Frank Peterson presented information relevant to the naming
rights sponsorship opportunity for the LC Walker Arena.
PUBLIC COMMENT ON AGENDA ITEMS: Public comments were received.
2019-91 CONSENT AGENDA:
A. Approval of Minutes City Clerk
SUMMARY OF REQUEST: To approve the minutes of the November 12, 2019
Regular Meeting.
STAFF RECOMMENDATION: To approve the minutes.
B. Extension of Temporary Employment Services Agreement EEO &
Employee Relations
Page 1 of 7
SUMMARY OF REQUEST: To approve a one-year contract extension with
GoodTemps Temporary Staffing Services, Inc. for temporary and seasonal
employment services. The current agreement expires on December 31, 2019
and has an option for a one-year extension.
STAFF RECOMMENDATION: To approve the agreement with GoodTemps
Temporary staffing Services, Inc. and authorize the Mayor and City Clerk to sign
the agreement extension.
C. First Quarter 2019-2020 Budget Reforecast Finance
SUMMARY OF REQUEST: At this time staff is transmitting the First Quarter 2019-20
Budget Reforecast which outlines proposed changes to the budget that have
come about as result of changes in revenue projects, policy priorities, labor
contracts, updated economic conditions, or other factors.
General Fund revenue adjustments include the City of Muskegon receiving an
additional $91,000 from the State of Michigan for Fire Protection.
Building Code Inspections and Enforcement has reduced contractual expenses
by $200,000 mostly due to reduction in the cost of mowing/maintaining City
owned lots.
The Major Street Fund and the Water and Sewer Funds have significant changes
to their capital budgets mostly due to projects coming in over budget.
STAFF RECOMMENDATION: To approve the 1st Quarter 2019-20 Budget
Reforecast.
D. New Copiers and Updated Maintenance Agreement with Applied
Imaging Finance
SUMMARY OF REQUEST: Staff is seeking approval to purchase 14 new copiers on
a 60-month lease and update our maintenance agreement with Applied
Imaging.
All but one of the copiers are replacing existing copiers we have had since 2011
One of the copiers is a new copier for the office at the LC Walker Arena. The
City has had a relationship with Applied Imaging for copiers and printers since
2011 and have been very happy with the product and their service. Applied
Imaging is the current supplier under the State of Michigan MITN Cooperative.
The new copiers will lower our maintenance costs to .007 cent per copy for
black and white copies and .059 for color copies. This is down from .01232 and
.07885 respectively. The proposed monthly savings will be $681.80 for an annual
savings of $8,181.60
STAFF RECOMMENDATION: To authorize staff to enter into agreements to
lease 14 new copiers and lower the per copy maintenance agreement
currently in place with Applied Imaging.
Page 2 of 7
E. Police Cruiser Replacement DPW/Equipment
SUMMARY OF REQUEST: The Equipment Division is requesting permission to
purchase four Chevy Tahoe Police Cruisers from Berger Chevrolet, the Mi Deal
State Contract holder. The cost is $35,822.00 each, for a total of $143,288.00.
STAFF RECOMMENDATION: To authorize staff to move forward with the
purchase.
F. Hurst Combi Rescue Tool Sets Public Safety/Fire Department
SUMMARY OF REQUEST: To authorize the purchase of two Hurst Combi Rescue
Tool Sets. Cost for one set is $13,550 from Apollo Fire Equipment, offered to the
City of Muskegon at consortium pricing. Each set includes shipping, training, and
the additional equipment needed to use and mount the rescue tools. The
purchase equals $27,100, which is $100 more than the budgeted $27,000.
STAFF RECOMMENDATION: To approve the purchase of two Hurst Combi
Rescue Tool Sets for Fire Department rescue efforts.
G. Setting The Docks Brownfield Public Hearing Economic Development
SUMMARY OF REQUEST: The Brownfield Redevelopment Authority
recommended approval of Brownfield Plan Amendment for The Docks (Damfino
Development, LLC) at 1490 Edgewater Street and now the city commission must
schedule a public hearing on that plan for December 10, 2019.
Damfino Development LLC submitted a Brownfield Plan Amendment for the
Docks at 1490 Edgewater to the Brownfield Redevelopment Authority, which
approved it on November 12, 2019. The city commission must set a public
hearing on the plan for December 10, 2019 A resolution setting the December
10 public hearing is provided.
STAFF RECOMMENDATION: To approve the resolution setting a public
hearing for December 10, 2019 on the Docks Brownfield Plan Amendment and
notify the appropriate taxing units.
J. PILOT Ordinance Revision City Manager
SUMMARY OF REQUEST: Staff is seeking an amendment to Section 82-51(1) of
the Code of Ordinances regulating Payment in Lieu of Taxes to allow for a 1%
PILOT fee. The change is necessary to reduce the Royale Glen PILOT to 1%.
STAFF RECOMMENDATION: To adopt the ordinance as presented.
Motion by Commissioner Rinsema-Sybenga, second by Vice Mayor Hood, to
accept the consent agenda, except items H, I, K, and L.
ROLL VOTE: Ayes: Warren, German, Rinsema-Sybenga, Turnquist, Johnson,
Gawron, and Hood
Nays: None
Page 3 of 7
MOTION PASSES
2019-92 ITEMS REMOVED FROM CONSENT AGENDA:
H. Brownfield Agreement for 1208 Eighth Economic Development
SUMMARY OF REQUEST: A request to approve a brownfield redevelopment and
reimbursement agreement for 1208 Eight Street among the city, Core
Development and the city’s Brownfield Redevelopment Authority.
The Muskegon City Commission approved a Brownfield Plan for Core
Development on November 12, 2019. The next step is for the city, Core
Development and the Brownfield Redevelopment Authority to approve a
development and reimbursement agreement. The BRA unanimously approved
that agreement on November 12, 2019. The brownfield plan is for a former
Volkswagen dealership building to be renovated into a commercial-office
building with a private investment of $700,000. The Brownfield Plan calls for
eligible costs of $145,129 to be reimbursed the developer over the next 30 years
from property tax increments, included in that is $40,000 for the city’s public
improvements for on-street parking.
STAFF RECOMMENDATION: To approve the Development and
Reimbursement Agreement for the 1208 Eighth Street Brownfield and authorize
the mayor to sign the agreement.
Motion by Commissioner Johnson, second by Commissioner Rinsema-Sybenga,
to approve the Development and Reimbursement Agreement for the 1208 Eighth
Street Brownfield and authorize the mayor to sign the agreement.
ROLL VOTE: Ayes: German, Rinsema-Sybenga, Turnquist, Johnson, Gawron,
Hood, and Warren
Nays: None
MOTION PASSES
I. Veteran’s Memorial Park Pump City Manager
SUMMARY OF REQUEST: Staff is seeking to commit $24,233 toward the cost to
install a water control structure at Veteran’s Memorial Park.
In an effort to address flooding at the memorial park, staff is seeking to partner
with Muskegon County, the City of North Muskegon, and NOAA to install a
replacement seawall and a new pump. NOAA funds will be used to replace the
seawall, while the funds from the local government will be used to replace the
pump that operated for many years in the reservoir. The arrangement is the
same as had been in place for approximately 30 years before the previous
seawall was removed. This partnership should address the ongoing flooding.
STAFF RECOMMENDATION: To authorize the expense of up to $24,233 toward
the replacement of the Veteran’s Memorial Causeway reservoir pump.
Page 4 of 7
Motion by Commissioner Warren, second by Commissioner German, to
authorize the expense of up to $24,233 toward the replacement of the Veteran’s
Memorial Causeway reservoir pump.
ROLL VOTE: Ayes: Rinsema-Sybenga, Turnquist, Johnson, Gawron, Hood,
Warren, and German
Nays: None
MOTION PASSES
K. Royale Glen PILOT Extension City Manager
SUMMARY OF REQUEST: Staff is seeking approval of the Second Amendment to
the Contract for Housing Exemption as well as the Development Agreement
with Hackley-Barclay Limited Dividend Housing Association.
In an effort to free up capital for necessary improvements at Royale Glen
Townhomes, staff has negotiated two agreements. The first agreement is the
Second Amendment to the Contract for Housing Exemption and the second
agreement is a Development Agreement for Campbell Field. The owner will
receive a reduction in taxes and fees in exchange for a commitment to invest
$600,000 in residential improvements and contribute $156,000 for the city to use
as desired on improvements to Campbell Field. Staff is currently seeking
community input on Campbell Field, and would expect to make the
improvements in the next 12-18 months.
STAFF RECOMMENDATION: To approve the Second Amendment to the
Contract for Housing Exemption and the corresponding Development
Agreement with Hackley-Barclay Limited Dividend Housing Association, and
authorize the Mayor and Clerk to sign.
Motion by Commissioner German, second by Commissioner Warren, to approve
the Second Amendment to the Contract for Housing Exemption and the
corresponding Development Agreement with Hackley-Barclay Limited Dividend
Housing Association, and authorize the Mayor and Clerk to sign.
ROLL VOTE: Ayes: Turnquist, Johnson, Gawron, Hood, Warren, German, and
Rinsema-Sybenga
Nays: None
MOTION PASSES
L. Convention Center Naming Rights City Manager
STAFF RECOMMENDATION: Staff is seeking authorization to enter into a
contract with WC Hockey, LLC to assist in selling the naming rights to the
Muskegon Convention Center.
In an effort to raise additional capital to ensure the highest quality convention
center without levying additional taxes or fees, staff is seeking strategic
Page 5 of 7
advertising partners with in the new convention center. The goal is to raise at
least $1 Million over a period not to exceed 20 years. The proposed agreement
would allow the city to partner with WC Hockey to identify an advertising
partner and negotiate the best deal for the convention center. WC Hockey
would be paid a commission based on the income created.
STAFF RECOMMENDATION: To approve the agreement and authorize the
City Manager to sign.
Motion by Commissioner German, second by Commissioner Rinsema-Sybenga,
to approve the agreement and authorize the City Manager to sign.
ROLL VOTE: Ayes: Johnson, Gawron, Hood, Warren, German, and Rinsema-
Sybenga
Nays: Turnquist
MOTION PASSES
2019-93 NEW BUSINESS:
A. Marihuana Facilities Application Planning
SUMMARY OF REQUEST: Request to approve the Marihuana Facilities
Application that includes a social equity component.
STAFF RECOMMENDATION: To approve the Marihuana Facilities Application.
Motion by Commissioner German, second by Commissioner Rinsema-Sybenga,
to approve the Marihuana Facilities Application.
Motion by Commissioner Rinsema-Sybenga, second by Vice Mayor Hood,
to call the question.
ROLL VOTE: Ayes: Hood, Rinsema-Sybenga, Turnquist, and Gawron
Nays: Warren, German, and Johnson
MOTION FAILS
Motion by Commissioner Johnson, second by Commissioner Warren, to
amend the original motion to approve the Marihuana Facilities
Application by amending Appendix 3 under MSEP REVENUE by removing
the $35,000 cap from the 35% of all local excise tax receipts being
allocated to the City’s MSEP, and under ALLOCATION OF MSEP RESOURCES
by amending number 3 to include youth support and changing the
ALLOCATION OF MSEP RESOURCES percentages to:
1. From 55% to 30% for business micro-loans/grants for those that have
had a low-level marihuana conviction.
2. From 30% to 35% will be dedicated towards facilitating marihuana
related expungement clinics. and,
Page 6 of 7
3. From 15% to 35% for education and community outreach for responsible
marihuana consumption related to harm reduction (and youth support).
ROLL VOTE: Ayes: Warren, German, Turnquist, and Johnson
Nays: Rinsema-Sybenga, Gawron, and Hood
MOTION PASSES
VOTE ON ORIGINAL MOTION – WITH AMENDMENT:
ROLL VOTE: Ayes: Gawron, Hood, Warren, Rinsema-Sybenga, Turnquist, and
Johnson
Nays: German
MOTION PASSES
ANY OTHER BUSINESS:
A. Firearm Activity Information Presentation Public Safety
This presentation was postponed to December 10, 2019.
PUBLIC COMMENT ON NON-AGENDA ITEMS: Comments were received from the
public.
ADJOURNMENT: The City Commission meeting adjourned at 9:12 p.m.
Respectfully Submitted,
Ann Marie Meisch, MMC – City Clerk
Page 7 of 7
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: December 10, 2019 Title: Transmittal of 6/30/19 Comprehensive
Annual Financial Report
Submitted By: Beth Lewis Department: Finance
Brief Summary: The City’s June 30, 2019 Comprehensive Annual Financial Report (CAFR) will be distributed to
the City Commissioners via email and hard copy. The CAFR will also be available on the City’s website. The
CAFR includes the annual independent auditor’s report as required by state law. At this time the CAFR is being
formally transmitted to the City Commission. The CAFR has been prepared in accordance with all current
Governmental Accounting Standards Board (GASB) pronouncements and also includes the single audit of
federal grants received by the City.
Detailed Summary:
Amount Requested: N/A Amount Budgeted: N/A
Fund(s) or Account(s): Fund(s) or Account(s):
Recommended Motion: To accept the June 30, 2019 CAFR and authorize staff to transmit the
CAFR to appropriate federal, state and private agencies.
Check if the following Departments need to approve the item first:
Police Dept.
Fire Dept.
IT Dept.
For City Clerk Use Only:
Commission Action:
Comprehensive Annual
Financial Report
City of Muskegon
Fiscal Year Ended June 30, 2019
[This page was intentionally left blank.]
CITY OF MUSKEGON,
MICHIGAN
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED
JUNE 30, 2019
Prepared By
FINANCIAL SERVICES DIVISION
Elizabeth Lewis James Maurer
Finance Director Information Systems Director
Kenneth Grant Mike VanderMolen
Assistant Finance Director Management Assistant
Sarah Petersen
City Treasurer
[This page was intentionally left blank.]
City of Muskegon
TABLE OF CONTENTS
INTRODUCTORY SECTION
Letter of Transmittal .................................................................................................................................. 5
Certificate of Achievement for Excellence in Financial Reporting......................................................... 11
Organization Chart .................................................................................................................................. 12
List of Principal Officials ........................................................................................................................ 13
FINANCIAL SECTION
Independent Auditor’s Report ................................................................................................................. 17
Management’s Discussion and Analysis ................................................................................................. 21
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Position ................................................................................................................. 34
Statement of Activities ...................................................................................................................... 35
Fund Financial Statements
Governmental Funds
Balance Sheet ................................................................................................................................ 36
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position ................................................................................................. 37
Statement of Revenues, Expenditures and Changes
in Fund Balances ........................................................................................................................ 38
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balances to the Statement of
Activities .................................................................................................................................... 39
Proprietary Funds
Statement of Net Position .............................................................................................................. 40
Statement of Revenues, Expenses and Changes in Net Position ................................................... 41
Statement of Cash Flows ............................................................................................................... 42
Fiduciary Funds
Statement of Fiduciary Assets and Liabilities ............................................................................... 43
Discretely Presented Component Units
Statement of Net Position ................................................................................................................. 44
Statement of Activities ...................................................................................................................... 45
Notes to Financial Statements .............................................................................................................. 46
Required Supplementary Information
Budgetary Comparison Schedule—General Fund ............................................................................... 84
Budgetary Comparison Schedule—Major Street and Trunkline Fund ................................................ 89
Schedule of Changes in Net Pension Liability and Related Ratios ...................................................... 90
Pension System Schedule of Contributions ......................................................................................... 91
Retiree Healthcare System Schedule of Changes in the
Net OPEB Liability and Related Ratios ............................................................................................. 92
Retiree Healthcare System Schedule of Contributions ........................................................................ 93
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City of Muskegon
TABLE OF CONTENTS
Other Supplemental Information
Other Governmental Funds
Description of Other Governmental Funds ....................................................................................... 96
Combining Balance Sheet ................................................................................................................. 98
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances................................................................................................................................ 99
Other Special Revenue Funds
Combining Balance Sheet............................................................................................................ 100
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances .......................................................................................................................... 101
Budgetary Comparison Schedule—Other Special Revenue Funds ............................................. 102
Other Capital Projects Funds
Combining Balance Sheet............................................................................................................ 105
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances .......................................................................................................................... 106
Internal Service Funds
Description of Internal Service Funds ............................................................................................ 107
Combining Statement of Net Position ............................................................................................ 108
Combining Statement of Revenues, Expenses and
Changes in Fund Net Position ..................................................................................................... 109
Combining Statement of Cash Flows.............................................................................................. 110
Fiduciary Funds
Description of Fiduciary Funds....................................................................................................... 111
Agency Funds
Combining Statement of Assets and Liabilities ........................................................................... 112
Statement of Changes in Assets and Liabilities ........................................................................... 113
Discretely Presented Component Units
Description of Discretely Presented Component Units .................................................................. 115
Combining Balance Sheet ............................................................................................................... 116
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position .................................................................................................. 117
Combining Statement of Revenues, Expenditures and Changes
in Fund Balances (Deficits) ......................................................................................................... 118
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balances (Deficits) to the Statement
of Activities ................................................................................................................................. 119
Schedule of Indebtedness ................................................................................................................... 121
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City of Muskegon
TABLE OF CONTENTS
STATISTICAL SECTION
Financial Trends
Net Assets/Net Position by Component ............................................................................................. 126
Changes in Net Assets/Net Position ................................................................................................... 127
Fund Balances of Governmental Funds ............................................................................................. 129
Changes in Fund Balances of Governmental Funds .......................................................................... 130
Revenue Capacity
Governmental Activities Revenues by Source ................................................................................... 131
Taxable, Assessed and Equalized and Estimated Actual Valuation of Property................................ 132
Principal Property Taxpayers ............................................................................................................. 133
Property Tax Rates – Direct and Overlapping Government Units ..................................................... 134
Property Tax Levies and Collections ................................................................................................. 135
Total Income Tax Collected and Number of Returns Filed ............................................................... 136
Debt Capacity
Ratio of Outstanding Debt by Type ................................................................................................... 138
Direct and Overlapping Debt ............................................................................................................. 139
Legal Debt Margin Information ......................................................................................................... 140
Revenue Bond Coverage .................................................................................................................... 141
Demographic and Economic Information
Demographic and Economic Statistics ............................................................................................... 142
Principal Employers ........................................................................................................................... 143
Operation Information
Full-time Equivalent Government Employees ................................................................................... 144
Operating Indicators by Function/Program ........................................................................................ 145
Capital Asset Statistics by Function/Program .................................................................................... 146
SINGLE AUDIT OF FEDERAL FINANCIAL ASSISTANCE PROGRAMS
Independent Auditor’s Report on Internal Control over Financial
Reporting and on Compliance and Other Matters Based on an
Audit of Financial Statements Performed in Accordance with
Government Auditing Standards .................................................................................................... 148
Independent Auditor’s Report on Compliance for Each Major
Program and on Internal Control over Compliance Required by
the Uniform Guidance .................................................................................................................... 150
Schedule of Expenditures of Federal Awards ..................................................................................... 152
Notes to Schedule of Expenditures of Federal Awards ....................................................................... 154
Schedule of Findings and Responses................................................................................................... 155
Client Documents
Summary Schedule of Prior Audit Findings ................................................................................... 158
Corrective Action Plan ................................................................................................................... 159
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4
Affirmative Action
(231)724-6703
FAX (231)722-1214
Assessor/
Equalization Co.
(231)724-6386
FAX (231)724-1129
Cemetery/Forestry
(231)724-6783
FAX (231)724-4188
City Manager
(231)724-6724
FAX (231)722-1214 December 2, 2019
Clerk
(231)724-6705
FAX (231)724-4178
To the Honorable Mayor, Members of the City Commission and Citizens of the City of
Comm. & Neigh.
Services
Muskegon:
(231)724-6717
FAX (231)726-2501
State law requires that every general purpose local government publish, within six
Computer Info. months of the close of each fiscal year, a complete set of audited financial
Technology
(231)724-4126 statements. This report is published to fulfill that requirement for the fiscal year ended
FAX (231)722-4301 June 30, 2019.
Engineering
(231)724-6707
FAX (231)727-6904 Management assumes full responsibility for the completeness and reliability of the
information contained in this report, based upon a comprehensive framework of
Finance
(231)724-6713 internal control that it has established for this purpose. Because the cost of internal
FAX (231)726-2325 control should not exceed anticipated benefits, the objective is to provide reasonable,
Fire Department rather than absolute, assurance that the financial statements are free of any material
(231)724-6795
FAX (231)724-6985
misstatements.
Human Resources
Co. (Civil Service) Brickley Delong, PC, Certified Public Accountants, have issued an unmodified
(231)724-6442 (“clean”) opinion on the City of Muskegon’s financial statements for the year ended
FAX (231)724-6840
June 30, 2019. The independent auditor’s report is located at the front of the financial
Income Tax
(231)724-6770
section of this report.
FAX (231)724-6768
Mayor’s Office
Management’s discussion and analysis (MD&A) immediately follows the independent
(231)724-6701 auditor’s report and provides a narrative introduction, overview, and analysis of the
FAX (231)722-1214
basic financial statements. MD&A complements this letter of transmittal and should
Planning/Zoning be read in conjunction with it.
(231)724-6702
FAX (231)724-6790
Police Department
(231)724-6750 Profile of the government
FAX (231)722-5140
The City of Muskegon operates under a commission-manager form of government
Public Works
(231)724-4100 and provides a full range of traditional municipal services. Policy-making and
FAX (231)722-4188 legislative authority are vested in the governing board (Commission) consisting of the
SafeBuilt mayor and six commissioners. Two commissioners are elected at large and each of
(Inspections) the four ward commissioners is elected by the voters of their respective wards.
(231)724-6715
FAX (231)728-4371 Commission members serve four-year terms, with the two at large members elected
Treasurer every four years in odd years and the four ward commissioners elected every four
(231)724-6720 years in even years. The Mayor is also elected at-large for a four-year term. The
FAX (231)724-6768
Mayor and Commission appoint the City of Muskegon’s manager.
Water Billing
(231)724-6718
FAX (231)724-6768
Water Filtration
(231)724-4106
FAX (231)755-5290 5
The City of Muskegon provides a full range of services, including police and fire protection;
solid waste collection; parks and recreation activities; the construction and maintenance of
streets and roadways; street snowplowing; traffic control; building inspections; licenses and
permits; water distribution and sewer disposal services; community and economic
development; and general administrative support services. The City also provides treated
drinking water to several surrounding communities.
The Commission is required to adopt an initial budget for the fiscal year no later than the last
regular meeting in June preceding the beginning of the fiscal year on July 1. This annual
budget serves as the foundation for the City of Muskegon’s financial planning and control. The
budget is prepared by fund, function (e.g., public safety), and department (e.g., police). The
City Manager and department heads may transfer resources within a department as they see
fit. Transfers between departments, however, need special approval from the Commission.
Local economy
The City of Muskegon is located in western Michigan on the shores of Lake Michigan. The
City covers 18 square miles (including 4 miles of water) and, with a 2010 census population of
38,401, is the largest city on the eastern shore of Lake Michigan. The City is located in
Muskegon County and is part of the Muskegon-Norton Shores Metropolitan Statistical Area
(MSA).
Muskegon is home to many outstanding sports, recreation and cultural activities:
• Muskegon is the eastern terminus for the high speed cross-lake ferry. Connecting
Muskegon with Milwaukee, Wisconsin, the Lake Express service ferries 100,000-plus
passengers each season between the two cities. 2019 marks the ferry service’s
sixteenth successful year of operations.
• Muskegon is home to the annual Miss Michigan pageant.
• Pere Marquette beach is nationally recognized as one of the best beaches in the nation
and is the only beach in Michigan to receive and maintain the Blue Wave Certification
by the Clean Beaches Council. The Blue Wave certification identifies the nation's
cleanest, safest and most environmentally well-managed beaches.
• Muskegon is home to successful summertime festivals that attract thousands of visitors
to the community. These include Taste of Muskegon, which attracts thousands of
visitors to Muskegon each June, Bike Time and Rebel Road, which attract motorcycle
enthusiasts to the City in July, the Unity Christian Music Festival, Shoreline Jazz
Festival, Great Lakes Surf Festival, and the Burning Foot Beer Fest in August, and the
Muskegon Polish Festival and Michigan Irish Music Festival in September.
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• Muskegon is the cultural hub for west Michigan with numerous museums and live
performances. The Muskegon Museum of Art has one of the largest and premier art
collections in the Midwest, and the Muskegon County Museum provides insight into the
area’s history. The former residences of Muskegon’s lumber barons, Charles H.
Hackley and Thomas Hume, proudly display the glory of the Victorian age. The Fire
Barn Museum takes visitors back to an 1890’s Muskegon Fire Station. The West Shore
Symphony and Muskegon Civic Theater bring the stage of the Frauenthal Center for the
Performing Arts to life throughout the year. The Heritage Museum provides historic
perspective on the city’s industrial roots.
• Muskegon’s port welcomed 15 Great Lakes cruise ships in 2019 and expects nearly 30
ships to visit in 2020.
• Muskegon is home to three historic museum ships that attract thousands of visitors
each year:
• USS Silversides, a rare surviving World War II submarine maintained in pristine
condition is docked at the Muskegon Lake Channel;
• LST-393, a landing craft used in the D-day invasion and one of only two such
vessels remaining in existence is docked downtown Muskegon at the West Michigan
Dock and Market; and the
• Milwaukee Clipper, a Great Lakes passenger ship built before the Titanic that for
many years served as a cross-lake ferry between Muskegon and Milwaukee is
docked in the Lakeside Business District.
Muskegon has a diverse local economy. The manufacturing sector is strong in the areas of
aerospace, plastics, defense, metals and castings, office furniture and automotive parts. The
City of Muskegon also benefits from being home to large government, corrections, healthcare,
and educational employers. Even though these institutions are exempt from paying property
taxes, local income tax withholdings remitted by these employers provide stability to City
finances.
The local economy has seen slight decrease in the unemployment rate which stood at 4.8
percent at the end of the fourth quarter of 2018 compared with 4.2 percent at the end of the
second quarter of 2019.
The City fully recognizes the difficulties it faces as an older urban rust-belt community. Thus,
we have attempted to position ourselves as a leader in fiscal stability and sustainability.
7
Long-term financial planning and major initiatives
Unassigned fund balance in the General Fund at year end was 23.0% of total General Fund
revenues. This amount was well above the policy guidelines set by the Commission for
budgetary and planning purposes (i.e., 13% of total actual General Fund revenue for the
preceding year). Adequate fund balances are maintained to allow the City to continue
providing services to the community in case of unexpected emergencies or requirements
and/or economic downturns.
The City incorporates a five-year fiscal forecast into its yearly budget process. The forecast is
a macro-level projection of major revenue sources, expenses and fund balances, taking into
account identifiable factors, recent trends and management’s judgment as to future
developments. The City recently purchased a new web-based information source providing
financial information and forecasting for municipal governments and schools. This new system
should provide staff with enhanced information to improve forecasting.
Among the City's major initiatives and accomplishments in fiscal year 2018-19 were the
following:
• Downtown Muskegon experienced the commencement of a number of mixed use
development projects. Two adaptive reuse projects were undertaken in the, with a total
investment in excess of $5 million. Three major new construction projects have been
announced with the Lakeview Lofts Phase 2 project, The Leonard project, and the
Foundry Square Project, with a total investment in excess of $25 million. Other
downtown projects of note include a $6 million investment from Platinum Construction in
the Western Place Townhomes, an $8 million investment to upgrade the former Holiday
Inn to a Delta Marriott Hotel, and the construction of Pigeon Hill Brewing’s new 20,000
square foot brewing facility.
• After several years of perseverance, a plan was put forth to redevelop the former Sappi
Paper Mill site in Lakeside. The 120-acre site has already experienced the demolition
of more than 1-million square feet of industrial buildings, and the owners have
completed a multi-phased visioning process with Miami, Florida-based DPZ Co-Design
– a world-renown master-planning group that focuses on high-value developments that
embrace the design philosophies of New Urbanism.
• The City broke ground on a new $19.5 Million convention center that will be attached to
the both the Delta Marriott hotel and the L.C. Walker Arena.
• Construction of Midtown Square Phase 2, which consists of 10 townhouses and 6 single
family homes in the Nelson neighborhood, was started in 2019.
• KL Outdoor, the world’s largest manufacturer of kayaks, opened its new 500,000 square
foot distribution center in the Port City Industrial Park in early 2019.
8
• Mercy Health Partners, Muskegon’s largest employer completed a $280 million
expansion to its existing hospital. The hospital organization is currently exploring
opportunities for redevelopment of its other underutilized facilities.
Relevant financial policies
The City of Muskegon has adopted a comprehensive set of financial policies used to ensure
adequate protection of the City’s assets from loss, theft, or misuse, and provide adequate
accounting data to allow for preparation of financial statements in conformity with generally
accepted accounting principles.
Budgetary control is maintained through an annual budget resolution passed by the City
Commission. Budgetary control at the functional level is maintained by review of estimated
expenditures prior to making purchases. Encumbrances are not recorded in the City’s funds.
The City does, however, utilize an informal monitoring system to facilitate budgetary control
over proposed purchases. Essentially, this system entails the use of on-line budgetary
information that details year-to-date “actual versus budgeted” expenditure comparisons by
budget category. This information is accessible to appropriate personnel to enable them to
ascertain the budget status of an expenditure category prior to authorizing additional
purchases.
Awards and Acknowledgements
The Government Finance Officers Association of the United States and Canada (GFOA)
awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of
Muskegon for its comprehensive annual financial report (CAFR) for the fiscal year ended June
30, 2018. This was the 32nd consecutive year that the City has received this award. In order
to be awarded a Certificate of Achievement, a government must publish an easily readable
and efficiently organized CAFR that satisfies both generally accepted accounting principles
and applicable program requirements.
A Certificate of Achievement for Excellence in Financial Reporting is valid for a period of one
year only. However, we believe our current CAFR continues to meet the Certificate of
Achievement for Excellence in Financial Reporting Program’s requirements, and we are
submitting it to the GFOA to determine its eligibility for another certificate.
9
The preparation of this report would not have been possible without the skill, effort, and
dedication of the Finance Division and the entire city staff. We express appreciation to those
staff members who assisted and contributed to the preparation of this report. Credit also must
be given to the Mayor and Commissioners for their support for maintaining the highest
standards of professionalism in the management of the City of Muskegon’s finances.
Respectfully submitted,
Frank Peterson Elizabeth Lewis
City Manager Finance Director
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Muskegon
Text38:
Michigan
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2018
Executive Director/CEO
11
Organizational Structure 2019-20
Mayor and City Commission
City Manager External Auditors
City Attorney
Planning Commission
Finance and Public Works
Public Safety Development Services Zoning Board of Appeals
Administrative Services Historic District Commission
Housing Code Board of Appeals
Board of Review
Finance Administration Income Tax Board of Review
Treasury/Income Tax Community Civil Service Commission
City Clerk Streets/Highways Development DDA/BRA
Police Information Systems Utilities Neighborhood Services LDFA
Fire Public Relations Parks and Recreation Planning/Zoning BID Board
12
Code Enforcement Elections Cemeteries Sanitation Economic Development Equal Opportunities Committee
Risk Management Streetlights Strategic Planning Local Officers Compensation
Employee Relations Special Events Committee
Farmers Market Citizen's Police Review Board
CDBG District Council
Election Commission
Environmental Code Construction Board of Appeals
(SAFEbuilt) Human Resources (County) Consumers Energy
Inspections (SAFEbuilt) Assessing (County) Republic Waste Services Muskegon Area First Housing Commission
Prosecutions (Parmenter LC Walker Arena (Two T's LLC) County Wastewater
O'Toole)
Elected Officials
Independent Bodies Municipal Executive Division Heads
Frontline Staff Contractual
COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF MUSKEGON, MICHIGAN
LIST OF PRINCIPAL OFFICIALS
June 30, 2019
ELECTED OFFICIALS
Mayor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stephen J. Gawron
At Large
Vice Mayor-Commissioner. . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . Eric Hood
Ward 1
Commissioner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Willie German
Ward 2
Commissioner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Debra Warren
Ward 3
Commissioner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Byron Turnquist
Ward 4
Commissioner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ken Johnson
At Large
Commissioner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Dan Rinsema-Sybenga
At Large
APPOINTED OFFICIALS
City Manager. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Frank Peterson
City Attorney. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . John C. Schrier
Finance Director. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Elizabeth Lewis
13
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14
FINANCIAL SECTION
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16
INDEPENDENT AUDITOR’S REPORT
City Commission
City of Muskegon
Muskegon, Michigan
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund
information of the City of Muskegon, Michigan as of and for the year ended June 30, 2019, and the related notes
to the financial statements, which collectively comprise the City's basic financial statements as listed in the table
of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with accounting principles generally accepted in the United States of America; this includes the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial
statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our
audit in accordance with auditing standards generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the
risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no
such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions.
Grand Haven | Grand Rapids | Hart | Muskegon
www.brickleydelong.com
17
BRICKLEY DELONG
City Commission
City of Muskegon
Page 2
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, the business-type activities, the aggregate discretely presented
component units, each major fund, and the aggregate remaining fund information of the City of Muskegon,
Michigan, as of June 30, 2019, and the respective changes in financial position and, where applicable, cash flows
thereof for the year then ended in accordance with accounting principles generally accepted in the United States
of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis, budgetary comparison schedules, and pension and other post-employment benefit
information on pages 21 through 32 and 84 through 93 be presented to supplement the basic financial statements.
Such information, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic
financial statements in an appropriate operational, economic, or historical context. We have applied certain
limited procedures to the required supplementary information in accordance with auditing standards generally
accepted in the United States of America, which consisted of inquiries of management about the methods of
preparing the information and comparing the information for consistency with management’s responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial
statements. We do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City of Muskegon, Michigan's basic financial statements. The introductory section, combining and
individual nonmajor fund financial statements, budgetary comparison information for nonmajor funds, schedule
of indebtedness, and statistical section, are presented for purposes of additional analysis and are not a required
part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of
additional analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a
required part of the basic financial statements.
18
BRICKLEY DELONG
City Commission
City of Muskegon
Page 3
Other Matters—Continued
Other Information—Continued
The combining and individual nonmajor fund financial statements, budgetary comparison information for
nonmajor funds, schedule of indebtedness, and the schedule of expenditures of federal awards are the
responsibility of management and were derived from and relate directly to the underlying accounting and other
records used to prepare the basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures, including
comparing and reconciling such information directly to the underlying accounting and other records used to
prepare the basic financial statements or to the basic financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of America. In our
opinion, the combining and individual nonmajor fund financial statements, budgetary comparison information for
nonmajor funds, schedule of indebtedness, and the schedule of expenditures of federal awards are fairly stated in
all material respects in relation to the basic financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of
the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.
Muskegon, Michigan
December 2, 2019
19
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2019 MANAGEMENT’S DISCUSSION AND ANALYSIS
This section of the City of Muskegon’s annual financial report presents our discussion
and analysis of the City’s financial performance during the fiscal year ended June 30,
2019. Please read it in conjunction with the City’s financial statements, which follow this
section.
FINANCIAL HIGHLIGHTS
• The assets/deferred outflows of resources of the City of Muskegon exceeded its
liabilities/deferred inflows of resources by $102,663,852 as of June 30, 2019. The
City has a deficit in unrestricted net position of $11,930,527. The deficit in
unrestricted net position is caused by the City’s long-term pension and other
postemployment benefits liabilities.
• The City’s total combined net position decreased by $1,581,766 during the year
ended June 30, 2019.
• The City’s governmental funds reported combined ending fund balance of
$16,575,017, a decrease of $1,155,778 (7%) from the prior year.
• The City’s General Fund reported a total fund balance of $8,505,195, an increase
of $113,629 from the prior year balance of $8,391,566. The favorable increase is
primarily the result of conservative budgeting.
OVERVIEW OF THE FINANCIAL STATEMENTS
This annual report consists of three parts—
management’s discussion and analysis (this section),
the basic financial statements, and required
supplementary information. The basic financial
statements include two kinds of statements that present
different views of the City.
• The first two statements are government-wide
financial statements that provide both long-term
and short-term information about the City’s overall
financial status.
• The remaining statements are fund financial
statements that focus on individual parts of the
government, reporting individual City operations in
greater detail than the government-wide
statements.
21
° The governmental funds statements tell how general government services
were financed in the short-term as well as what remains available for future
spending.
° Proprietary fund statements offer short- and long-term financial information
about activities the City operates like private businesses.
° Fiduciary fund statements provide information about the financial relationships
in which the City acts solely as a trustee or agent for the benefit of others, to
whom the resources in question belong.
The financial statements also include detailed notes that explain some of the
information in the financial statements and provide additional data. The statements are
followed by a section of required supplementary information that further explains and
supports the information in the financial statements. The figure above shows how the
required parts of this annual report are arranged and related to one another.
The remainder of this overview section of management’s discussion and analysis
explains the structure and contents of each of the statements.
Government-Wide Statements
The government-wide statements report information about the City as a whole using
accounting methods similar to those used by private-sector companies. The statement
of net position includes all of the government’s assets/deferred outflows of resources
and liabilities/deferred inflows of resources. All of the current year’s revenues and
expenses are accounted for in the statement of activities regardless of when cash is
received or paid.
The two government-wide statements report the City’s net position and how they have
changed. Net position—the difference between the City’s assets/deferred outflows of
resources and liabilities/deferred inflow of resources—is one way to measure the City’s
overall financial health or position. Over time, increases or decreases in the City’s net
position are an indicator of whether its financial health is improving or deteriorating,
respectively. However, to assess the overall health of the City, one needs to consider
additional nonfinancial factors such as changes in the City’s tax base.
The government-wide financial statements include not only the City of Muskegon itself
(known as the primary government), but also legally separate component units for which
the City is financially accountable. Financial information for these component units is
reported separately from the financial information presented for the primary government
itself.
The government-wide financial statements of the City include the governmental
activities. Most of the City’s basic services are included here, such as public
22
representation services, administrative services, financial services, public safety, public
works, highways, streets and bridges, community and economic development, culture
and recreation, general administration, and interest on long-term debt. Income taxes,
federal grants, property taxes and revenues from the State of Michigan finance most of
these activities.
Also included in the government-wide statements are the City’s business-type activities:
water, sewer and marina operations.
Fund Financial Statements
The fund financial statements provide more detailed information about the City’s major
funds—not the City as a whole. Funds are accounting devices that the City uses to
keep track of specific sources of funding and spending for particular purposes.
The City has the following kinds of funds:
• Governmental funds—Most of the City’s basic services are included in
governmental funds, which focus on (1) how cash and other financial assets that
can readily be converted to cash flow in and out and (2) the balances left at year-
end that are available for spending. Consequently, the governmental fund
statements provide a detailed short-term view that helps the user determine
whether there are more or fewer financial resources that can be spent in the near
future to finance the City’s programs. Because this information does not
encompass the additional long-term focus of the government-wide statements, we
provide additional information on the subsequent page of the governmental funds
statements that explain the relationship (or differences) between them.
• Proprietary funds—Services for which the City charges customers a fee and are
intended to be self-supporting are generally reported in proprietary funds. The
City uses three proprietary funds: water, sewer, and marina and launch ramp.
Proprietary funds, like the government-wide statements, provide both long-term
and short-term financial information.
• The City uses internal service funds to report activities that provide supplies and
services for the City’s other programs and activities.
• Fiduciary funds—The City is the trustee, or fiduciary, for certain funds. It is also
responsible for other assets that—because of a trust arrangement—can be used
only for the trust beneficiaries. The City is responsible for ensuring that the assets
reported in these funds are used for their intended purposes. All of the City’s
fiduciary activities are reported in a separate statement of fiduciary net position
and a statement of changes in fiduciary net position. We exclude these activities
from the City’s government-wide financial statements because the City cannot use
these assets to finance its operations.
23
• Component units – Finally, the City of Muskegon’s Comprehensive Annual
Financial report includes six component units: the Downtown Development
Authority (DDA), the Tax Increment Finance Authority (TIFA), the Local
Development Finance Authority (LDFA) and, the Brownfield Redevelopment
Authority (BRA 1, BRA 2 and BRA 3). Component units are separate legal entities
for which the City of Muskegon has some level of financial accountability. The
component units of the City exist primarily for the issuance and repayment of debt
to finance projects in specific areas of the City. Accordingly, they are discussed
below under the Capital Assets and Debt Administration heading.
FINANCIAL ANALYSIS OF THE CITY AS A WHOLE
Net position. The Statement of Net Position provides an overview of the City’s
assets/deferred outflows of resources, liabilities/deferred inflow of resources and net
position. Over time this can provide a good indicator of the City’s fiscal health. The total
net position of the City was $102,663,852 as of June 30, 2019. This is a decrease of
$1,581,766 from reported net position for the prior year. An overview of the City’s net
position follows:
City's Net Position
(In Thousands of Dollars)
Governmental Business-Type
Activities Activities Total Percentage
6/30/2019 6/30/2018 6/30/2019 6/30/2018 6/30/2019 6/30/2018 Change
Current and other assets $23,349 $23,800 $6,718 $9,781 $30,067 $33,581 -10.46%
Capital assets 73,229 66,940 47,886 45,594 121,115 112,534 7.63%
Total Assets 96,578 90,740 54,604 55,375 151,182 146,115 3.47%
Deferred outflow s of resources 10,997 2,282 764 159 11,761 2,441 381.81%
Total Assets and Deferred Outflow s of Resources 107,575 93,022 55,368 55,534 162,943 148,556 9.68%
Long-term liabilities 42,851 27,960 7,517 7,200 50,368 35,160 43.25%
Other liabilities 6,482 3,876 3,061 2,995 9,543 6,871 38.89%
Total Liabilities 49,333 31,836 10,578 10,195 59,911 42,031 42.54%
Deferred inflow s of resources 344 2,131 24 148 368 2,279 -83.85%
Total Liabilities and Deferred Outflow s of Resources 49,677 33,967 10,602 10,343 60,279 44,310 36.04%
Net Position
Net investment in capital assets 66,734 61,268 41,742 38,550 108,476 99,818 8.67%
Restricted 5,519 6,138 599 599 6,118 6,737 -9.19%
Unrestricted -14,355 -8,351 2,425 6,041 -11,930 -2,310 416.45%
Total Net Position $57,898 $59,055 $44,766 $45,190 $102,664 $104,245 -1.52%
The bulk of the City’s net position of $108,475,672 represents investments in capital
assets net of accumulated depreciation, less the remaining balance of debt issued to
acquire those assets. These infrastructure assets are used to provide public services to
citizens and are not available for spending.
24
Another $6,118,707 of the City’s net position are legally restricted as to use. The City
has a deficit in unrestricted net position of $11,930,527. The deficit in unrestricted net
position is caused by the City’s long-term pension and other postemployment benefits
liabilities. The City’s unrestricted net position decreased $9,620,984 during the year.
Changes in net position. The City’s total revenues were $60,502,468 for the year
ended June 30, 2019. This represents a 7.27% increase over total revenues collected
during the prior fiscal year. Approximately 39.6% of the City’s revenue stream came
from charges to users of specific services such as water or sewer. Another 18.9%
came from grants from the state and federal governments and 28.4% was from local
property and income taxes. The remainder was comprised of state revenues and other
sources such as franchise fees and investment income.
The total cost of all City programs and services for the year ended June 30, 2019 was
$62,084,234. This represents a 20.0% increase from reported expenses for the last
fiscal year ended June 30, 2018. 72.1% of the City’s expenses were for governmental
activities such as police and fire protection, streets, parks, and general administration.
The remaining 28.9% represents the costs of the City’s business-type activities,
specifically, water, sewer and marina operations.
The table on the following page (Changes in City’s Net Position) further breaks down
the change in total net position into period-to-period changes in individual revenue and
expense categories.
As can be seen, net position for governmental activities decreased $1,157,410 and the
net position for business-type activities decreased by $424,356. For governmental
activities, most of these changes are related to the increased net pension liability and
net other postemployment benefits liability. For business-type activities, the changes
similarly represent the impact of the increased net pension liability and other
postemployment benefits liability.
25
Changes in City’s Net Position
(In thousands of dollars)
Governmental Business-Type
Activities Activities Total Percentage
6/30/2019 6/30/2018 6/30/2019 6/30/2018 6/30/2019 6/30/2018 Change
Program revenues
Charges for services $7,632 $7,440 $16,344 $15,989 $23,976 $23,429 2.33%
Operating grants and contributions 6,893 6,479 511 43 7,404 6,522 13.52%
Capital grants and contributions 4,015 2,306 - - 4,015 2,306 74.11%
General revenues
Property taxes 8,230 8,450 - - 8,230 8,450 -2.60%
Income taxes 8,940 8,995 - - 8,940 8,995 -0.61%
State shared revenues 5,102 4,955 - - 5,102 4,955 2.97%
All other 2,811 1,719 24 28 2,835 1,747 62.28%
Total revenues 43,623 40,344 16,879 16,060 60,502 56,404 7.27%
Governmental activities expenses
Public representation 1,336 1,348 - - 1,336 1,348 -0.89%
Administrative services 801 507 - - 801 507 57.99%
Financial services 2,701 1,995 - - 2,701 1,995 35.39%
Public safety 20,433 12,404 - - 20,433 12,404 64.73%
Public w orks 4,438 3,472 - - 4,438 3,472 27.82%
Highw ays, streets and bridges 7,186 6,917 - - 7,186 6,917 3.89%
Community and economic development 2,890 5,015 - - 2,890 5,015 -42.37%
Culture and recreation 4,542 3,995 - - 4,542 3,995 13.69%
General administration 302 376 - - 302 376 -19.68%
Interest on long-term debt 151 165 - - 151 165 -8.48%
Business-type activities expenses
Sew er - - 9,120 8,094 9,120 8,094 12.68%
Water - - 7,753 7,091 7,753 7,091 9.34%
Marina and launch ramp - - 430 377 430 377 14.06%
Total expenses 44,780 36,194 17,303 15,562 62,083 51,756 19.95%
Change in net position (1,157) 4,150 (424) 498 (1,581) 4,648 -134.01%
Net position at beginning of year 59,055 54,906 45,190 44,692 104,245 99,598 4.67%
Net position at end of year $57,898 $59,056 $44,766 $45,190 $102,664 $104,246 -1.52%
Governmental Activities
The following table (Net Cost of Selected City Functions) presents the cost of each of
the City’s largest functions as well as each function’s net cost (total cost less fees
generated by the activities and intergovernmental aid specifically related to the
function). The net cost reflects the portion of costs funded by local tax dollars and other
general resources:
• The operational cost of all governmental activities during the year ended June 30,
2019 was $44,781,159.
• The net cost that City taxpayers paid for these activities through local property
taxes and income taxes was $17,170,460, or about 39% of the total.
• The remaining cost was paid by user charges to those directly benefitting from the
programs or by state and federal grants and contributions.
26
Net Cost of Selected City Functions
(in thousands of dollars)
Total Cost of Services Net Cost of Services
6/30/2019 6/30/2018 % Change 6/30/2019 6/30/2018 % Change
Governmental activities
Public safety $20,433 $12,404 64.73% $18,049 $9,550 88.99%
Public w orks 4,438 3,472 27.82% 3,747 2,726 37.45%
Highw ays, streets and bridges 7,186 6,917 3.89% 544 721 -24.55%
Community and economic development 2,890 5,015 -42.37% (1,118) 2,174 -151.43%
Culture and recreation 4,542 3,995 13.69% 1,600 2,162 -25.99%
All other 5,291 4,391 20.50% 3,419 2,637 29.65%
Total governmental activities $44,780 $36,194 23.72% $26,241 $19,970 31.40%
Business-Type Activities
The financial goal of the City’s business-type activities (i.e. water, sewer and marina
and launch ramp operations) is to operate on a self-supporting basis without making
significant profit or needing general tax subsidies. For the fiscal year ended June 30,
2019, the City’s total business-type activities realized an overall decrease in net position
of $424,356.
Sewer Fund net position decreased $979,425 primarily as result of an increased
wastewater treatment costs. The Water Fund saw a net position increase of $798,122.
This is primarily attributable to the managing costs and achieving economies of scale
with the addition of Fruitport Township and the City of Norton Shores as wholesale
customers. Marina and Launch Ramp Fund net position decreased $128,974 due to
lower revenues.
FINANCIAL ANALYSIS OF THE CITY’S FUNDS
The fund financial statements provide detailed information about the major City funds,
not the City as a whole. The City’s major funds for the fiscal year ended June 30, 2019
were the General Fund, the Major Street and Trunkline Fund, and the State Grants
Fund.
General Fund Highlights
The General Fund receives most public attention since it is where local tax revenues
are accounted for and where the most visible municipal services such as police, fire and
parks are funded. The City reforecasts its General Fund budget on a quarterly basis
taking into account changing economic conditions and policy priorities. The following
table shows the General Fund year-end unassigned fund balance for the last five years.
27
Unassigned Fund
Year-End
Year-to-Year % Prior Year’s Balance as a % of
Year Ended Unassigned
Fund Balance Change Revenues Prior Year Revenues
(Policy Target=13%)
6/30/2019 $6,563,511 1.46% $28,729,919 22.85%
6/30/2018 6,469,108 5.22% 27,051,766 23.91%
6/30/2017 6,148,292 0.81% 25,821,114 23.81%
6/30/2016 6,098,977 3.67% 24,890,399 24.50%
6/30/2015 5,883,318 19.10% 23,960,758 24.55%
For the year ended June 30, 2019, General Fund revenues were $67,827 higher than
the final amended budget estimate. This variance is primarily due to higher than
expected property tax income.
General Fund expenditures were $164,907 higher than projected in the final amended
budget. This was mostly due to salary and wages in Police and Fire coming in higher
than expectations.
Major Street and Trunkline and State Grant Fund Highlights
The Major Street and Trunkline Fund accounts for all of the City’s street construction
and maintenance activities on its primary road system. Primary funding comes from the
State of Michigan. For the year ended June 30, 2019, the fund balance of the Major
Street and Trunkline Fund decreased $533,616 which is attributable to an increase in
construction projects including Lakeshore Drive from Laketon to McCracken.
The State Grants Fund received an upfront payment of $4,000,000 on a Michigan
Enhancement Grant at the former prison site. The project is expected to be complete in
FY2019-20.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
As of June 30, 2019, the City had invested $119,363,274 in a variety of capital assets,
including land, streets, equipment, buildings, water and sewer lines, and vehicles. This
is an increase of $6,828,680 from capital assets reported as of June 30, 2018. The
increase is due to current year additions exceeding normal depreciation of assets. Note
F of the notes to the basic financial statements provides detailed information on the
City’s capital asset investment.
Bond Ratings
Long-Term Debt
The City’s limited full faith and
credit bonds (bonds guaranteed
At June 30, 2019, the City had $12,855,959 in bonds and by the City’s taxing powers)
other long-term obligations outstanding. This represents were upgraded by Standard &
Poor’s from a rating of “A+” to
“AA-“ in early 2016. The City’s
rating remained at ”AA-“ in 2019
The City’s Water System
revenue bonds carry the “AA-“
28 S&P rating.
an 11.0% decrease from the prior year. The City did not issue any new debt during the
fiscal year.
Additional information concerning the City’s long-term debt is presented in Note H to the
basic financial statements.
City’s Long Term Debt – Bonds and Other Obligations
(In thousands of dollars)
Governmental Business-Type
Activities Activities Total Percentage
6/30/2019 6/30/2018 6/30/2019 6/30/2018 6/30/2019 6/30/2018 Change
Due w ithin one year $818 $550 $780 $1,529 $1,598 $2,079 -23.14%
Due in more than one year 6,283 6,655 4,975 5,719 11,258 12,374 -9.02%
Total bonds & other obligations $7,101 $7,205 $5,755 $7,248 $12,856 $14,453 -11.05%
In addition to direct City debt, component units such as the Downtown Development
Authority (DDA) and Local Development Finance Authority (LDFA) had outstanding debt
totaling $3,167,419 at year-end as shown in the table below. This represents a
decrease of 11.1% from the prior year.
Debt issued by component units typically is secured by the limited full faith and credit of
the City and so is an important consideration in assessing the City’s overall fiscal health.
Additional information concerning component units’ long-term debt is presented in Note
H to the basic financial statements and is summarized as follows:
Component Unit Long Term Debt – Bonds and Other Obligations
(In thousands of dollars)
Dow ntow n Development Local Development
Total Percentage
Authority Finance Authority
6/30/2019 6/30/2018 6/30/2019 6/30/2018 6/30/2019 6/30/2018 Change
Due w ithin one year $1,000 $0 $390 $375 $1,390 $375 270.67%
Due in more than one year 0 1,000 1,777 2,188 1,777 3,188 -44.26%
Total bonds & other obligations $1,000 $1,000 $2,167 $2,563 $3,167 $3,563 -11.11%
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES
The City’s fiscal year 2019-20 capital budget anticipates spending $24,906,226 for
capital projects, consisting of street improvements, water and sewer system
improvements, scheduled equipment replacements, improvements to the L. C. Walker
Arena, the rehab of houses in a city neighborhood and the replacement of fire
department rescue equipment. These improvements will be funded by anticipated
29
grants ($4,650,000), State Revolving Loan revenue ($13,500,000) revenues generated
from operations and fund balance.
From an operating standpoint, the City’s 2019-20 budget will be relatively stable while
the City attempts to maintain a healthy fund balance and allow time to plan for and
address economic challenges with a long-term solution:
• The full-time personnel complement will be increased from 232 positions to 245
positions for a net gain of 13.
• Some user fees will be increased and new fees recommended during the course
of the year.
• The City will continue to look for opportunities to partner with other entities to
deliver quality services in a cost effective manner (e.g. Farmers’ Market kitchen
management, Marsh Field and recreation programs).
City operations depend on five major sources of revenue: local income taxes, local
property taxes, state-shared revenues, state street funds, and water and sewer utility
fees. Together, these five income sources account for about three-quarters of total
revenues.
Local Income Tax
The City income tax was approved by voters in 1993 and now is the primary source of
funding for police, fire, parks and other general operations. The income tax rate is 1%
on City residents and ½ of 1% on non-residents working in the City. The income tax
provides key advantages for core cities such as Muskegon. First, it allows the City to
regionalize its tax structure by taxing non-residents who work here and use City
services. Second, it allows the City to benefit from development occurring outside City
limits because City residents employed by non-City employers pay income taxes.
Finally, the income tax generates revenue from workers at not-for-profit hospitals,
churches, government agencies, colleges and other institutions that are traditionally
exempt from paying local property taxes. This is particularly important for Muskegon
since it is the regional center for many such institutions.
Income tax revenues decreased 0.8% from $8,758,674 for the year ended June 30,
2019 to $8,691,673 for the year ended June 30, 2019. For 2019-20, the City has
estimated income tax revenue to be $8,700,000.
City Income Percent
Year
Tax Revenues Change
6/30/2019 $8,691,673 -0.8%
6/30/2018 8,758,674 1.7%
6/30/2017 8,610,812 5.6%
6/30/2016 8,151,902 -1.5%
6/30/2015 8,274,666 5.7%
30
Local Property Tax
City charter and state law authorize the City to levy a general operating millage up to 10
mills and a maximum sanitation millage of 3 mills. Millage rates are applied to the
taxable value of property in the City to arrive at the City’s property tax levy.
For 2019-20, the City tax levy will be at 10 mills for general operations and 3 mills for
sanitation service. We project that $7,040,000 in total property tax revenue will be
collected during fiscal year 2019-20.
It should be noted that several property tax appeals are currently pending. The impact
of these appeals on City finances is being monitored closely.
State Shared Revenues
State shared sales tax revenues represent about 14% of total General Fund revenue.
The City’s state shared revenue allocation is made up of two parts. The constitutional
component is a fixed percentage of total state sales tax collections that is allocated to
cities on a per capita basis and that cannot be reduced by the legislature. The non-
constitutional component is determined by a complex formula and is subject to
adjustment through the State’s annual budget process. Both components depend, of
course, on overall state sales tax collections. The City’s recent state shared revenue
history is summarized as follows:
State Shared Percent
Revenues Change
Year
6/30/2019 $4,271,438 2.8%
6/30/2018 4,153,072 2.8%
6/30/2017 4,046,147 4.1%
6/30/2016 3,886,514 -0.1%
6/30/2015 3,889,178 2.0%
For 2019-20, the City projects $4,376,711 in state shared revenues.
Street Funds
The State also returns to the City a share of gasoline tax revenues to help fund
maintenance and construction of major and local streets within the City. These
revenues have been more stable than general state sales tax state-shared revenues
have been:
31
Street Revenues Percent
Year from State Change
6/30/2019 $5,134,277 1.4%
6/30/2018 5,060,936 25.9%
6/30/2017 4,020,630 10.8%
6/30/2016 3,981,345 1.0%
6/30/2015 3,592,756 10.8%
Based on recent legislative changes, the City began seeing increases in street funding
that will carry into future years. At this time, the City is projecting an increase in street
revenues for fiscal year 2019-20 up to $5,507,650.
Water and Sewer Fees
From a government-wide entity perspective, combined water and sewer fees represent
one of the City’s largest income streams, totaling $15,616,060 during the year ended
June 30, 2019. Charges to customers are based on the amount of metered services
used times rates periodically set by the City Commission. During the year ended June
30, 2019 water rates increased by 4%. Water rates will increase by 4% in each of the
next four fiscal years to pay for improvements being made at the Water Filtration Plant.
The City began providing treated water to the City of Norton Shores and Fruitport
Charter Township in May 2015. The addition of these two new large municipal
customers allows the spreading of water treatment costs over a larger customer base
while remaining well within the plant’s rated treatment capacity.
Due to the impact of continued increases in wastewater treatment charges from the
Muskegon County Wastewater Treatment System, the City Commission passed a
resolution effective July 1, 2016, which ties the sewer rate the City will charge to its
customers to a multiplier of the rate that the county bills the City for wastewater
treatment. This rate change is expected to help maintain the financial viability of the
City’s sewer system.
CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and
investors and creditors with a general overview of the City’s finances and to
demonstrate the City’s accountability for the money it receives. If you have questions
about this report, need additional financial information, or wish to obtain separate
financial statements for the City’s component units, contact the City’s Finance
Department at (231) 724-6713 or by e-mail (finance@shorelinecity.com).
32
FINANCIAL STATEMENTS
33
City of Muskegon
STATEMENT OF NET POSITION
June 30, 2019
Governmental Business-type Component
Activities Activities Total Units
ASSETS
Current assets
Cash and investments $ 16,619,698 $ 2,312,963 $ 18,932,661 $ 167,080
Assets managed by others 1,234,689 - 1,234,689 -
Receivables 3,868,011 2,767,193 6,635,204 -
Due from other governmental units 1,982,232 471,664 2,453,896 -
Internal balances (926,936) 926,936 - -
Inventories 9,325 125,717 135,042 -
Prepaid items 562,101 113,029 675,130 -
Total current assets 23,349,120 6,717,502 30,066,622 167,080
Noncurrent assets
Restricted cash and investments - 599,500 599,500 -
Advances to component units 852,752 - 852,752 -
Notes receivable, less amounts due within one year 299,250 - 299,250 -
Capital assets, net
Nondepreciable 18,855,320 3,866,864 22,722,184 400,000
Depreciable 53,221,288 43,419,802 96,641,090 1,107,825
Total noncurrent assets 73,228,610 47,886,166 121,114,776 1,507,825
Total assets 96,577,730 54,603,668 151,181,398 1,674,905
DEFERRED OUTFLOWS OF RESOURCES
Related to pension 8,431,476 586,145 9,017,621 -
Related to other postemployment benefits 2,565,944 178,381 2,744,325 -
Total deferred outflows of resources 10,997,420 764,526 11,761,946 -
Total assets and deferred outflows of resources 107,575,150 55,368,194 162,943,344 1,674,905
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 2,837,431 780,413 3,617,844 12,250
Due to other governmental units 115,294 1,501,360 1,616,654 -
Unearned revenues - unused Farmers Market tokens 106,366 - 106,366 -
Unearned revenues - expenditure-driven grants 2,604,645 - 2,604,645 -
Bonds and other obligations, due within one year 817,899 779,900 1,597,799 1,390,000
Total current liabilities 6,481,635 3,061,673 9,543,308 1,402,250
Noncurrent liabilities
Advances from primary government - - - 852,752
Bonds and other obligations, less amounts due within one year 6,283,492 4,974,668 11,258,160 1,777,419
Net pension liability 27,664,870 1,923,226 29,588,096 -
Net other postemployment benefits liability 8,902,759 618,908 9,521,667 -
Total noncurrent liabilities 42,851,121 7,516,802 50,367,923 2,630,171
Total liabilities 49,332,756 10,578,475 59,911,231 4,032,421
DEFERRED INFLOWS OF RESOURCES
Related to other postemployment benefits 344,324 23,937 368,261 -
Total liabilities and deferred inflows of resources 49,677,080 10,602,412 60,279,492 4,032,421
NET POSITION
Net investment in capital assets 66,734,006 41,741,666 108,475,672 (659,594)
Restricted
Highways, streets and bridges 3,397,011 - 3,397,011 -
Debt service - 599,500 599,500 -
L.C. Walker Arena 26,636 - 26,636 -
Law enforcement 36,337 - 36,337 -
Downtown BID 137,794 - 137,794 -
Perpetual care
Expendable 336,104 - 336,104 -
Non-expendable 1,577,180 - 1,577,180 -
Other purposes 8,145 - 8,145 -
Unrestricted (14,355,143) 2,424,616 (11,930,527) (1,697,922)
Total net position $ 57,898,070 $ 44,765,782 $ 102,663,852 $ (2,357,516)
The accompanying notes are an integral part of this statement.
34
City of Muskegon
STATEMENT OF ACTIVITIES
For the year ended June 30, 2019
Net (Expense) Revenue and Changes in Net Position
Program Revenue Primary Government
Charges for Operating Grants Capital Grants Governmental Business-type Component
Functions/Programs Expenses Services and Contributions and Contributions Activities Activities Total Units
Primary government
Governmental activities
Public representation services $ 1,336,014 $ 250,931 $ - $ - $ (1,085,083) $ - $ (1,085,083) $ -
Administrative services 800,887 604,290 15,000 - (181,597) - (181,597) -
Financial services 2,700,775 921,748 40,000 - (1,739,027) - (1,739,027) -
Public safety 20,433,642 2,292,158 92,989 - (18,048,495) - (18,048,495) -
Public works 4,438,358 691,312 - - (3,747,046) - (3,747,046) -
Highways, streets and bridges 7,185,642 191,883 5,620,645 828,688 (544,426) - (544,426) -
Community and economic development 2,890,216 786,120 1,035,805 2,186,409 1,118,118 - 1,118,118 -
Culture and recreation 4,541,739 1,853,547 88,091 1,000,000 (1,600,101) - (1,600,101) -
General administration 302,582 40,400 - - (262,182) - (262,182) -
Interest on long-term debt 151,304 - - - (151,304) - (151,304) -
Total governmental activities 44,781,159 7,632,389 6,892,530 4,015,097 (26,241,143) - (26,241,143) -
Business-type activities
Sewer 9,119,941 8,098,828 - - - (1,021,113) (1,021,113) -
Water 7,752,703 7,946,983 510,533 - - 704,813 704,813 -
Marina and launch ramp 430,431 298,312 - - - (132,119) (132,119) -
Total business-type activities 17,303,075 16,344,123 510,533 - - (448,419) (448,419) -
35
Total primary government $ 62,084,234 $ 23,976,512 $ 7,403,063 $ 4,015,097 (26,241,143) (448,419) (26,689,562) -
Component units
Local Development Finance Authority - SmartZone $ 230,341 $ - $ - $ 360,000 - - - 129,659
Downtown Development Authority 1,010,930 - - - - - - (1,010,930)
Tax Increment Finance Authority 40,000 - - - - - - (40,000)
Brownfield Redevelopment Authority I 30,813 - - - - - - (30,813)
Brownfield Redevelopment Authority II 162,000 - - - - - - (162,000)
Brownfield Redevelopment Authority III 205,552 - - - - - - (205,552)
Total component units $ 1,679,636 $ - $ - $ 360,000 - - - (1,319,636)
General revenues
Property taxes 8,230,573 - 8,230,573 1,728,439
Income taxes 8,939,887 - 8,939,887 -
Cable franchise agreement 380,343 - 380,343 -
Grants and contributions not restricted to specific programs 5,102,602 - 5,102,602 19,425
Unrestricted investment earnings 546,533 24,063 570,596 1,476
Miscellaneous 550,381 - 550,381 -
Gain on sale of capital asset 1,333,414 - 1,333,414 -
Total general revenues 25,083,733 24,063 25,107,796 1,749,340
Change in net position (1,157,410) (424,356) (1,581,766) 429,704
Net position at July 1, 2018 59,055,480 45,190,138 104,245,618 (2,787,220)
Net position at June 30, 2019 $ 57,898,070 $ 44,765,782 $ 102,663,852 $ (2,357,516)
The accompanying notes are an integral part of this statement.
City of Muskegon
BALANCE SHEET
Governmental Funds
June 30, 2019
Major Street Other Total
General and Trunkline State Grants Governmental Governmental
Fund Fund Fund Funds Funds
ASSETS
Cash and investments $ 7,302,304 $ 2,675,521 $ 2,265,863 $ 2,967,912 $ 15,211,600
Assets managed by others - - - 1,234,689 1,234,689
Receivables
Accounts and loans (net of allowance for uncollectibles) 199,254 37,098 18,555 1,032,316 1,287,223
Property taxes 17,778 - - - 17,778
Income taxes 1,576,085 - - - 1,576,085
Special assessments - 5,448 - 2,072 7,520
Due from other governmental units 763,628 680,166 77,741 460,697 1,982,232
Due from other funds 814,694 - - - 814,694
Advances to component units - - - 284,251 284,251
Prepaid items 231,684 24,033 - 33,524 289,241
Total assets $ 10,905,427 $ 3,422,266 $ 2,362,159 $ 6,015,461 $ 22,705,313
LIABILITIES
Accounts payable $ 1,436,433 $ 126,967 $ 64,456 $ 306,754 $ 1,934,610
Accrued liabilities 414,048 8,866 - 28,461 451,375
Due to other governmental units 28,897 86,262 - 135 115,294
Due to other funds - - - 390,487 390,487
Unearned revenues - unused Farmers Market tokens - - - 106,366 106,366
Unearned revenues - expenditure-driven grants 854 - 2,286,435 317,356 2,604,645
Total liabilities 1,880,232 222,095 2,350,891 1,149,559 5,602,777
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - income taxes 520,000 - - - 520,000
Unavailable revenues - special assessments - 5,447 - 2,072 7,519
Total deferred inflows of resources 520,000 5,447 - 2,072 527,519
FUND BALANCES
Nonspendable
Prepaid items 231,684 24,033 - 33,524 289,241
Perpetual care 10,000 - - 1,567,180 1,577,180
Restricted
Highways, streets and bridges - 3,170,691 - 932,055 4,102,746
Law enforcement - - - 36,337 36,337
Downtown BID - - - 137,794 137,794
Perpetual care - - - 336,104 336,104
Other purposes - - - 8,145 8,145
Assigned for capital projects and public improvements 1,700,000 - 11,268 1,812,691 3,523,959
Unassigned 6,563,511 - - - 6,563,511
Total fund balances 8,505,195 3,194,724 11,268 4,863,830 16,575,017
Total liabilities, deferred inflows of
resources and fund balances $ 10,905,427 $ 3,422,266 $ 2,362,159 $ 6,015,461 $ 22,705,313
The accompanying notes are an integral part of this statement.
36
City of Muskegon
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION
June 30, 2019
Total fund balance—governmental funds $ 16,575,017
Amounts reported for governmental activities in the Statement of Net Position
are different because:
Capital assets used in governmental activities are not current financial
resources and, therefore, are not reported in the governmental funds.
Cost of capital assets $ 136,662,003
Accumulated depreciation (67,529,371) 69,132,632
Other long-term assets are not available to pay for current period
expenditures and, therefore, are reported as unavailable revenues
in the governmental funds.
Income taxes 520,000
Special assessments 7,520 527,520
Long-term liabilities in governmental activities are not due and payable in the
current period and, therefore, are not reported in the governmental funds.
Accrued interest payable (47,700)
Bonds and notes payable (5,342,602)
Compensated absences (1,643,495)
Net pension liability and related deferred outflows/inflows of resources (18,410,575)
Net other post employment benefits liability and related
outflows/inflows of resources (6,395,314) (31,839,686)
Internal service funds are used by management to charge the costs of certain activities
to individual funds. The assets and liabilities of the internal service funds are reported
with governmental activities in the Statement of Net Position.
Net position of the internal service funds 4,500,167
Internal balances representing the cumulative difference between
actual costs and amounts charged to business-type activities (997,580) 3,502,587
Net position of governmental activities $ 57,898,070
The accompanying notes are an integral part of this statement.
37
City of Muskegon
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
Governmental Funds
For the year ended June 30, 2019
Major Street Other Total
General and Trunkline State Grants Governmental Governmental
Fund Fund Fund Funds Funds
REVENUES
Taxes $ 16,582,030 $ - $ - $ - $ 16,582,030
Licenses and permits 2,452,807 - - - 2,452,807
Intergovernmental revenues
Federal 57,894 627,218 77,287 1,035,785 1,798,184
State 5,134,277 4,544,248 2,032,776 1,212,348 12,923,649
Local 40,000 - - 1,014,500 1,054,500
Charges for services 2,841,826 21,582 - 1,567,011 4,430,419
Fines and forfeitures 462,120 - - 26,458 488,578
Investment earnings and rental income 716,917 15,628 - 25,366 757,911
Income from assets managed by others - - - 38,668 38,668
Other 459,901 92,669 - 1,022,239 1,574,809
Total revenues 28,747,772 5,301,345 2,110,063 5,942,375 42,101,555
EXPENDITURES
Current
Public representation services 1,281,107 - - - 1,281,107
Administrative services 739,301 - - - 739,301
Financial services 2,394,866 - - - 2,394,866
Public safety 16,094,531 - - 36,665 16,131,196
Public works 3,493,577 - - 169,238 3,662,815
Highways, streets and bridges - 5,601,688 - 1,691,544 7,293,232
Community and economic development 736,679 - - - 736,679
Culture and recreation 1,824,540 - - 2,080,437 3,904,977
Other governmental functions 281,711 - - - 281,711
Debt service
Principal 65,000 210,000 19,313 - 294,313
Interest and fees 165,851 23,273 781 - 189,905
Capital outlay 801,483 - 2,104,074 4,982,715 7,888,272
Total expenditures 27,878,646 5,834,961 2,124,168 8,960,599 44,798,374
Excess of revenues over (under) expenditures 869,126 (533,616) (14,105) (3,018,224) (2,696,819)
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets - - - 1,541,041 1,541,041
Transfers in 5,989 - - 1,204,247 1,210,236
Transfers out (761,486) - (5,989) (442,761) (1,210,236)
Total other financing sources (uses) (755,497) - (5,989) 2,302,527 1,541,041
Net change in fund balances 113,629 (533,616) (20,094) (715,697) (1,155,778)
Fund balances at July 1, 2018 8,391,566 3,728,340 31,362 5,579,527 17,730,795
Fund balances at June 30, 2019 $ 8,505,195 $ 3,194,724 $ 11,268 $ 4,863,830 $ 16,575,017
The accompanying notes are an integral part of this statement.
38
City of Muskegon
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
For the year ended June 30, 2019
Net change in fund balances—total governmental funds $ (1,155,778)
Amounts reported for governmental activities in the Statement of Activities are
different because:
Governmental funds report outlays for capital assets as expenditures. However,
in the Statement of Activities, the cost of these assets is allocated over their
estimated useful lives and reported as depreciation expense.
Depreciation expense $ (4,683,977)
Capital outlay 9,363,862 4,679,885
Revenues reported in the Statement of Activities that do not provide current
financial resources are not reported as revenues in the governmental funds. 15,347
The issuance of long-term debt provides current financial resources to
governmental funds, but increases liabilities in the Statement of Net Position.
Repayment of debt is an expenditure in the governmental funds, but reduces
long-term liabilities in the Statement of Net Position.
Repayment of principal on long-term debt 294,313
Changes in accrual of interest and amortization of premiums and discounts
Change in accrued interest payable 2,600
Amortization of premiums and discounts 36,000 38,600
Some expenses reported in the Statement of Activities do not require the use
of current financial resources and, therefore, are not reported as expenditures
in the governmental funds.
Change in compensated absences (227,454)
Change in net pension liability and related deferred outflows/inflows of resources (3,561,112)
Change in net other post employment benefits liability
and related deferred outflows/inflows of resources (995,975) (4,784,541)
The internal service funds are used by management to charge the costs of
certain activities used to individual funds. The net revenue of certain activities
of the internal service fund is reported with governmental activities.
Change in net position of the internal service funds (359,315)
Change in internal balances representing the current year difference
between actual costs and amounts charged to business-type activities 114,079 (245,236)
Change in net position of governmental activities $ (1,157,410)
The accompanying notes are an integral part of this statement.
39
City of Muskegon
STATEMENT OF NET POSITION
Proprietary Funds
June 30, 2019
Governmental
Activities -
Business-type Activities - Enterprise Funds Internal
Marina and Service
Sewer Water Launch Ramp Total Funds
ASSETS
Current assets
Cash and investments $ - $ 1,864,757 $ 448,206 $ 2,312,963 $ 1,408,098
Receivables 1,349,103 1,400,782 17,308 2,767,193 1,278,655
Due from other governmental units - 471,664 - 471,664 -
Inventories 16,952 108,765 - 125,717 9,325
Prepaid items 48,658 61,835 2,536 113,029 272,860
Total current assets 1,414,713 3,907,803 468,050 5,790,566 2,968,938
Noncurrent assets
Restricted cash and investments - 599,500 - 599,500 -
Advances to component units - - - - 568,502
Capital assets
Land 16,188 103,500 22,562 142,250 65,000
Land improvements - 62,948 1,888,965 1,951,913 301,715
Buildings, improvements and systems 21,969,809 70,358,328 2,322,488 94,650,625 1,559,334
Machinery and equipment 113,289 3,073,170 60,620 3,247,079 9,650,051
Construction in progress 624,436 3,045,178 55,000 3,724,614 -
Less accumulated depreciation (11,136,687) (42,052,427) (3,240,701) (56,429,815) (8,632,124)
Net capital assets 11,587,035 34,590,697 1,108,934 47,286,666 2,943,976
Total noncurrent assets 11,587,035 35,190,197 1,108,934 47,886,166 3,512,478
Total assets 13,001,748 39,098,000 1,576,984 53,676,732 6,481,416
DEFERRED OUTFLOWS OF RESOURCES
Related to pension 135,264 450,881 - 586,145 360,705
Related to other postemployment benefits 41,165 137,216 - 178,381 109,773
Total deferred outflows of resources 176,429 588,097 - 764,526 470,478
Total assets and deferred outflows of resources 13,178,177 39,686,097 1,576,984 54,441,258 6,951,894
LIABILITIES
Current liabilities
Accounts payable 118,653 503,621 38,456 660,730 367,339
Accrued liabilities 19,782 98,249 1,652 119,683 36,409
Due to other governmental units 630,357 871,003 - 1,501,360 -
Due to other funds 70,644 - - 70,644 353,563
Bonds and other obligations, due within one year 8,500 771,400 - 779,900 19,300
Total current liabilities 847,936 2,244,273 40,108 3,132,317 776,611
Noncurrent liabilities
Bonds and other obligations, less amounts due within one year 42,400 4,932,268 - 4,974,668 95,994
Net pension liability 443,821 1,479,405 - 1,923,226 1,183,524
Net other postemployment benefits liability 142,825 476,083 - 618,908 380,867
Total noncurrent liabilities 629,046 6,887,756 - 7,516,802 1,660,385
Total liabilities 1,476,982 9,132,029 40,108 10,649,119 2,436,996
DEFERRED INFLOWS OF RESOURCES
Related to other postemployment benefits 5,524 18,413 - 23,937 14,731
Total liabilities and deferred inflows of resources 1,482,506 9,150,442 40,108 10,673,056 2,451,727
NET POSITION
Net investment in capital assets 11,587,035 29,045,697 1,108,934 41,741,666 2,943,976
Restricted for debt service - 599,500 - 599,500 -
Unrestricted 108,636 890,458 427,942 1,427,036 1,556,191
Total net position $ 11,695,671 $ 30,535,655 $ 1,536,876 43,768,202 $ 4,500,167
Adjustment to report the cumulative internal balance for the net effect of the activity
between the internal service funds and the enterprise funds over time 997,580
Net position of business-type activities $ 44,765,782
The accompanying notes are an integral part of this statement.
40
City of Muskegon
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
Proprietary Funds
For the year ended June 30, 2019
Governmental
Activities -
Business-type Activities - Enterprise Funds Internal
Marina and Service
Sewer Water Launch Ramp Total Funds
OPERATING REVENUES
Charges for services $ 7,936,080 $ 7,679,980 $ 294,969 $ 15,911,029 $ 9,056,117
Other 162,748 777,536 3,343 943,627 83,569
Total operating revenues 8,098,828 8,457,516 298,312 16,854,656 9,139,686
OPERATING EXPENSES
Administration 495,523 1,007,771 5,354 1,508,648 333,374
Insurance premiums and claims - - - - 5,166,291
Wastewater treatment 6,587,735 - - 6,587,735 -
Wastewater maintenance 1,542,751 - - 1,542,751 -
Filtration plant operations - 2,349,699 - 2,349,699 -
Water distribution - 2,315,052 - 2,315,052 -
Other operations - - 318,193 318,193 3,707,321
Depreciation 459,109 1,857,523 106,040 2,422,672 449,622
Total operating expenses 9,085,118 7,530,045 429,587 17,044,750 9,656,608
Operating income (loss) (986,290) 927,471 (131,275) (190,094) (516,922)
NONOPERATING REVENUES (EXPENSES)
Investment earnings 6,865 14,897 2,301 24,063 30,081
Gain on sale of capital assets - - - - 127,526
Interest expense - (144,246) - (144,246) -
Total nonoperating revenue (expenses) 6,865 (129,349) 2,301 (120,183) 157,607
Change in net position (979,425) 798,122 (128,974) (310,277) (359,315)
Net position at July 1, 2018 12,675,096 29,737,533 1,665,850 4,859,482
Net position at June 30, 2019 $ 11,695,671 $ 30,535,655 $ 1,536,876 $ 4,500,167
Adjustment for the net effect of the current year activity between
the internal service funds and the enterprise funds (114,079)
Change in net position of business-type activities $ (424,356)
The accompanying notes are an integral part of this statement.
41
City of Muskegon
STATEMENT OF CASH FLOWS
Proprietary Funds
For the year ended June 30, 2019
Governmental
Activities -
Business-type Activities - Enterprise Funds Internal
Marina and Service
Sewer Water Launch Ramp Total Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 7,988,174 $ 7,571,644 $ 302,122 $ 15,861,940 $ 83,823
Receipts from interfund services provided 35,637 158,243 - 193,880 7,741,332
Other receipts - - - - 657,986
Payments to suppliers (7,642,117) (2,322,817) (203,936) (10,168,870) (6,646,662)
Payments to employees (634,222) (1,863,317) (29,091) (2,526,630) (1,420,335)
Payments for interfund services used (663,210) (923,190) (66,447) (1,652,847) (815,458)
Net cash provided by (used for) operating activities (915,738) 2,620,563 2,648 1,707,473 (399,314)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Interfund borrowing 70,644 - - 70,644 353,563
Advances to component units - - - - 84,512
Net cash provided by (used for) noncapital financing activities 70,644 - - 70,644 438,075
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Purchases of capital assets (919,685) (2,290,586) (33,904) (3,244,175) (941,398)
Principal paid on capital debt - (1,495,000) - (1,495,000) -
Interest paid on capital debt - (158,260) - (158,260) -
Proceeds from sale of capital assets - - - - 163,012
Net cash provided by (used for) capital and related financing activities (919,685) (3,943,846) (33,904) (4,897,435) (778,386)
CASH FLOW FROM INVESTING ACTIVITIES
Investment earnings 6,865 14,897 2,301 24,063 30,081
Net increase (decrease) in cash and investments (1,757,914) (1,308,386) (28,955) (3,095,255) (709,544)
Cash and investments July 1, 2018 1,757,914 3,772,643 477,161 6,007,718 2,117,642
Cash and investments at June 30, 2019 $ - $ 2,464,257 $ 448,206 $ 2,912,463 $ 1,408,098
Reconciliation of cash and investments to the Statement of Net Position
Cash and investments $ - $ 1,864,757 $ 448,206 $ 2,312,963 $ 1,408,098
Restricted cash and investments - 599,500 - 599,500 -
$ - $ 2,464,257 $ 448,206 $ 2,912,463 $ 1,408,098
Reconciliation of operating income (loss) to net cash provided by (used for)
operating activities
Operating income (loss) $ (986,290) $ 927,471 $ (131,275) $ (190,094) $ (516,922)
Adjustments to reconcile operating income (loss) to net cash provided by
(used for) operating activities
Depreciation expense 459,109 1,857,523 106,040 2,422,672 449,622
Change in assets and liabilities
Receivables (75,017) (727,629) 3,810 (798,836) (656,545)
Inventories (150) (20,781) - (20,931) (552)
Prepaid items 913 3,134 (102) 3,945 (8,650)
Accounts payable (398,567) 311,525 23,203 (63,839) 137,588
Accrued liabilities 84,264 269,320 972 354,556 196,145
Net cash provided by (used for) operating activities $ (915,738) $ 2,620,563 $ 2,648 $ 1,707,473 $ (399,314)
The accompanying notes are an integral part of this statement.
42
City of Muskegon
STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES
Fiduciary Funds
June 30, 2019
Agency
Funds
ASSETS
Cash and investments $ 944,538
Accounts receivable 30,521
Total assets $ 975,059
LIABILITIES
Accounts payable $ 333,678
Due to other governmental units 446,320
Deposits held for others 195,061
Total liabilities $ 975,059
The accompanying notes are an integral part of this statement.
43
City of Muskegon
STATEMENT OF NET POSITION
Discretely Presented Component Units
June 30, 2019
Local
Development Tax
Finance Downtown Increment Brownfield Brownfield Brownfield
Authority - Development Finance Redevelopment Redevelopment Redevelopment
SmartZone Authority Authority Authority I Authority II Authority III Total
ASSETS
Current assets
Cash and investments $ 25,897 $ 80,457 $ 13,181 $ 15,763 $ 16,067 $ 15,715 $ 167,080
Noncurrent assets
Capital assets, net
Nondepreciable 400,000 - - - - - 400,000
Depreciable 1,107,825 - - - - - 1,107,825
Total noncurrent assets 1,507,825 - - - - - 1,507,825
Total assets 1,533,722 80,457 13,181 15,763 16,067 15,715 1,674,905
LIABILITIES
44
Current liabilities
Accrued liabilities 12,250 - - - - - 12,250
Bonds and other obligations, due within one year 390,000 1,000,000 - - - - 1,390,000
Total current liabilities 402,250 1,000,000 - - - - 1,402,250
Noncurrent liabilities
Advances from primary government - - - 852,752 - - 852,752
Bonds and other obligations, less amounts due
within one year 1,777,419 - - - - - 1,777,419
Total noncurrent liabilities 1,777,419 - - 852,752 - - 2,630,171
Total liabilities 2,179,669 1,000,000 - 852,752 - - 4,032,421
NET POSITION
Net investment in capital assets (659,594) - - - - - (659,594)
Unrestricted 13,647 (919,543) 13,181 (836,989) 16,067 15,715 (1,697,922)
Total net position $ (645,947) $ (919,543) $ 13,181 $ (836,989) $ 16,067 $ 15,715 $ (2,357,516)
The accompanying notes are an integral part of this statement.
City of Muskegon
STATEMENT OF ACTIVITIES
Discretely Presented Component Units
For the year ended June 30, 2019
Program
Revenue Net (Expense) Revenue and Changes in Net Position
Local
Development Tax
Capital Finance Downtown Increment Brownfield Brownfield Brownfield
Grants and Authority - Development Finance Redevelopment Redevelopment Redevelopment
Functions/Programs Expenses Contributions SmartZone Authority Authority Authority I Authority II Authority III Total
Local Development Finance Authority - SmartZone
Community and economic development $ 172,648 $ - $ (172,648) $ - $ - $ - $ - $ - $ (172,648)
Interest on long-term debt 57,693 360,000 302,307 - - - - - 302,307
Total Local Development Finance
Authority - SmartZone 230,341 360,000 129,659 - - - - - 129,659
Downtown Development Authority
Economic development 1,010,930 - - (1,010,930) - - - - (1,010,930)
Tax Increment Finance Authority
Community and economic development 40,000 - - - (40,000) - - - (40,000)
Brownfield Redevelopment Authority I
Interest on long-term debt 30,813 - - - - (30,813) - - (30,813)
45
Brownfield Redevelopment Authority II
Community and economic development 162,000 - - - - - (162,000) - (162,000)
Brownfield Redevelopment Authority III
Community and economic development 205,552 - - - - - - (205,552) (205,552)
Total discretely presented component units $ 1,679,636 $ 360,000 129,659 (1,010,930) (40,000) (30,813) (162,000) (205,552) (1,319,636)
General revenues
Property taxes 97,583 1,085,354 37,658 134,828 163,340 209,676 1,728,439
Grants and contributions not restricted to specific programs 2,871 - 7,170 4,362 5,022 - 19,425
Unrestricted investment income 55 549 40 30 261 541 1,476
Total general revenues 100,509 1,085,903 44,868 139,220 168,623 210,217 1,749,340
Change in net position 230,168 74,973 4,868 108,407 6,623 4,665 429,704
Net position at July 1, 2018 (876,115) (994,516) 8,313 (945,396) 9,444 11,050 (2,787,220)
Net position at June 30, 2019 $ (645,947) $ (919,543) $ 13,181 $ (836,989) $ 16,067 $ 15,715 $ (2,357,516)
The accompanying notes are an integral part of this statement.
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the City of Muskegon (City) have been prepared in conformity with accounting
principles generally accepted in the United States of America (GAAP) as applied to government units. The
Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing
governmental accounting and financial reporting principles. The more significant of the City's accounting
policies are described below.
Reporting Entity
The City of Muskegon was incorporated October 6, 1919, under the provisions of the Home Rule Act of the
State of Michigan. The City is a municipal corporation governed by an elected mayor and six-member City
Commission and is administered by a city manager appointed by the City Commission. The accompanying
financial statements present the City and its component units, entities for which the government is considered
to be financially accountable. Blended component units, are, in substance, part of the primary government's
operations, even though they are legally separate entities. Thus, blended component units are appropriately
presented as funds of the primary government. Each discretely presented component unit is reported in a
separate column in the government-wide financial statements (see note below for description) to emphasize
that it is legally separate from the City.
Discretely Presented Component Units
Downtown Development Authority (DDA). The DDA’s sole purpose is the collection of property tax
incremental revenues, the issuance and repayment of debt and the construction of public facilities to promote
and facilitate economic growth in the downtown district. Members of the DDA are appointed by the City
Commission and the Authority is fiscally dependent on the City since the City Commission approves the
DDA budget and must approve any debt issuance. The DDA is presented as a governmental fund type.
Tax Increment Finance Authority (TIFA). The TIFA’s sole purpose is the collection of property tax
incremental revenues and promotion of economic development activities (including issuance of debt) in a
sub-section of the downtown district. Members of the TIFA are appointed by the City Commission and the
Authority is fiscally dependent on the City since the City Commission approves the TIFA budget and must
approve any debt issuance. The TIFA is presented as a governmental fund type.
Local Development Finance Authority (LDFA). The City has created three separate local development
finance authority districts under the aegis of the LDFA to promote and facilitate economic growth in the Port
City Industrial Park, the Medendorp Industrial Park, and the SmartZone Hi-Tech Park (SmartZone).
Currently only the SmartZone is active. The LDFA’s sole purpose is the collection of property tax
incremental revenues and the construction of public facilities within the districts. Members of the LDFA are
appointed by the City Commission and the Authority is fiscally dependent on the City since the City
Commission approves budgets and must approve any debt issuance. The LDFA districts are presented as
governmental fund types.
Brownfield Redevelopment Authority (BRA). There are three separate designated areas under the aegis of the
BRA – the Betten-Henry Street site, the former downtown mall site, and the Terrace Point site. The
Authority’s sole purpose is the collection of property tax incremental revenues and promotion of
environmental remediation (including issuance of debt) in designated brownfield areas. Members of the BRA
are appointed by the City Commission and the Authority is fiscally dependent on the City since the City
Commission approves the BRA budget and must approve any debt issuance. The BRA areas are presented as
governmental fund types.
46
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued
Reporting Entity—Continued
Discretely Presented Component Units—Continued
Complete financial statements of the component units can be obtained from their administrative offices,
933 Terrace Street, Muskegon, Michigan 49443.
Related Organizations
The following organizations are related to the City’s financial reporting entity:
Muskegon Hospital Finance Authority. The Muskegon Hospital Finance Authority was created by the City of
Muskegon in accordance with the laws of the State of Michigan. Members of the Hospital Finance Authority
are appointed by the City, but the City is not financially accountable for the Authority and therefore the
Authority is excluded from the accompanying financial statements. The Hospital Finance Authority’s sole
purpose is to issue tax-exempt debt for the benefit of Mercy Health Partners Hospital which is located within
the City. The Authority has no assets or financial activity and does not prepare financial statements. The
Hospital Finance Authority has no taxing power. As of June 30, 2019, there was no outstanding debt issued
by the Hospital Finance Authority. The City is not obligated in any manner for repayment of debt issued by
the Hospital Finance Authority, as any debt is payable solely from contractual payments from the hospitals.
Muskegon Housing Commission. The Muskegon Housing Commission was created by the City of Muskegon
in accordance with the laws of the State of Michigan. Members of the Housing Commission are appointed by
the City, but the City is not financially accountable for the Commission and therefore the Commission is
excluded from the accompanying financial statements. The Housing Commission’s main purpose is to
administer activities that provide adequate housing facilities for low-income families and the elimination of
housing conditions that are detrimental to the public peace, health, safety, and welfare. The Commission’s
policy is to prepare its financial statements on the basis prescribed by the Department of Housing and Urban
Development. Accordingly, the summary information below (which is required by federal regulations), is not
intended to present financial position and results of operations in conformity with generally accepted
accounting principles. Summary financial information for the fiscal year ended September 30, 2018, the date
of its latest audited financial statements is as follows:
Total assets and deferred outflows of resources $ 3,767,019
Total liabilities and deferred inflows of resources (484,398)
Total net position $ 3,282,621
Total operating income $ 1,909,539
Total operating expenses (2,304,825)
Total nonoperating revenues 565
Capital contributions 32,686
Change in net position $ (362,035)
47
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued
Basis of Presentation—Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities)
report information on all of the nonfiduciary activities of the primary government and its component units.
All fiduciary activities are reported only in the fund financial statements. Governmental activities, which
normally are supported by taxes, intergovernmental revenues, and other nonexchange transactions, are
reported separately from business-type activities, which rely to a significant extent on fees and charges to
external customers for support. Likewise, the primary government is reported separately from certain legally
separate component units for which the primary government is financially accountable.
While separate government-wide and fund financial statements are presented, they are interrelated. The
governmental activities column incorporates data from governmental funds and internal service funds, while
business-type activities incorporate data from the City’s enterprise funds. Separate financial statements are
provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded
from the government-wide financial statements.
As discussed earlier, the City’s discretely presented component units are reported in a separate column in the
government-wide financial statements.
As a general rule, the effect of interfund activity has been eliminated from the government-wide financial
statements. Exceptions to this general rule are payments-in-lieu of taxes where the amounts are reasonably
equivalent in value to the interfund services provided and other charges between the City's water and sewer
functions and various other functions of the government. Elimination of these charges would distort the
direct costs and program revenues reported for the various functions concerned.
The fund financial statements provide information about the City’s funds, including its fiduciary funds and
blended component units. Separate statements for each fund category – governmental, proprietary, and
fiduciary – are presented. The emphasis of fund financial statements is on major governmental and enterprise
funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated
and reported as nonmajor funds. Major individual governmental and enterprise funds are reported as separate
columns in the fund financial statements.
The City reports the following major governmental funds:
The General Fund is the government's primary operating fund. It accounts for all financial resources of
the general government, except those required to be accounted for in another fund.
The Major Street and Trunkline Fund accounts for gas and weight tax allocations to the City by the
Michigan Department of Transportation for construction and maintenance of major streets within the
City.
The State Grants Fund accounts for grant revenues received from the State of Michigan for the purpose of
improvements and/or rehabilitation of City property, environmental remediation at lakeshore sites or new
infrastructure in the City’s downtown.
48
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued
Basis of Presentation—Government-wide and Fund Financial Statements—Continued
The City reports the following three major proprietary funds:
The Sewer Fund accounts for user charges, operating expenses and debt service of the City’s sewer
system.
The Water Fund accounts for user charges, operating expenses and debt service of the City’s water
system.
The Marina and Launch Ramp Fund accounts for user fees collected and operating expenses for the
Hartshorn Marina and boat launch ramp facilities.
Additionally, the City reports the following fund types:
Internal Service Funds account for internal engineering services for City projects; the purchase, operation,
and depreciation of all City owned equipment; the payment of insurance claims and benefits; and the
operation, maintenance, and depreciation of the City’s public service building to other funds of the
government on a cost reimbursement basis.
The Agency Funds are used to account for employee payroll withholdings, property taxes collected by the
City on behalf of other governments, and deposits made by housing rehabilitation program participants.
During the course of operations, the City has activity between funds for various purposes. Any residual
balances outstanding at year-end are reported as due from/to other funds and advances to/from other funds.
While these balances are reported in fund financial statements, certain eliminations are made in the
preparation of the government-wide financial statements. Balances between funds included in governmental
activities (i.e., the governmental and internal service funds) are eliminated so that only the net amount is
included as internal balances in the governmental activities column. Similarly, balances between the funds
included in business-type activities (i.e., enterprise funds) are eliminated so that only the net amount is
included as internal balances in the business-type activities column.
Further, certain activity occurs during the year involving transfers of resources between funds. In fund
financial statements these amounts are reported at gross amounts as transfers in/out. While reported in fund
financial statements, certain eliminations are made in the preparation of the government-wide financial
statements. Transfers between the funds included in governmental activities are eliminated so that only the
net amount is included as transfers in the governmental activities column. Similarly, balances between funds
included in business-type activities are eliminated so that only the net amount is included as transfers in the
business-type activities column.
Measurement Focus and Basis of Accounting
The accounting and financial reporting treatment is determined by the applicable measurement focus and
basis of accounting. Measurement focus indicates the type of resources being measured such as current
financial resources or economic resources. The basis of accounting indicates the timing of transactions or
events for recognition in the financial statements.
49
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued
Measurement Focus and Basis of Accounting—Continued
The government-wide financial statements are reported using the economic resources measurement focus and
the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a
liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues
in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all
eligibility requirements imposed by the provider have been met.
The governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both
measurable and available. Revenues are considered to be available when they are collectible within the
current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City
considers revenues to be available if they are collected within 60 days of the end of the current fiscal period.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt
service expenditures, as well as expenditures related to compensated absences and claims and judgments, are
recorded only when payment is due. General capital asset acquisitions are reported as expenditures in
governmental funds. Issuance of long-term debt and acquisitions under capital leases are reported as other
financing sources.
Income taxes, property taxes, franchise taxes, licenses, and interest associated with the current fiscal period
are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal
period. Entitlements are recorded as revenues when all eligibility requirements are met, including any time
requirements, and the amount is received during the period or within the availability period for this revenue
source (within 60 days of year-end). Expenditure-driven grants are recognized as revenue when the
qualifying expenditures have been incurred and all other eligibility requirements have been met. Only the
portion of special assessments receivable within 60 days of the end of the current fiscal period is considered
to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be
measurable and available only when cash is received by the government.
The proprietary funds are reported using the economic resources measurement focus and the accrual basis of
accounting. The agency fund has no measurement focus but utilizes the accrual basis of accounting for
reporting its assets and liabilities.
Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balance
Cash and Investments
The City's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term
investments with original maturities of three months or less from the date of acquisition.
Investments for the City are reported at fair value (generally based on quoted market prices).
The City has adopted an investment policy in compliance with State of Michigan statutes. Those statutes
authorize the City to invest in obligations of the United States, certificates of deposit, prime commercial
paper, securities guaranteed by United States agencies or instrumentalities, United States government or
federal agency obligation repurchase agreements, bankers’ acceptances, state-approved investment pools and
certain mutual funds.
50
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued
Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balance—Continued
Cash and Investments—Continued
The component unit’s cash and investments are maintained within the City’s investment pool.
For the purpose of the statement of cash flows, the City considers all assets held in the cash and investment
pool to be cash and cash equivalents because the investments are not identifiable to the specific funds and the
assets can be withdrawn at any time, similar to a demand deposit account.
Inventories and Prepaid Items
All inventories are valued at cost using the first-in/first-out (FIFO) method. The cost of such inventories is
recorded as expenses when consumed rather than when purchased in the business-type activities.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid
items in both government-wide and fund financial statements. The cost of prepaid items is recorded as
expenditures/expenses when consumed rather than when purchased.
Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges,
sidewalks, and similar items), are reported in the applicable governmental or business-type activities column
in the government-wide financial statements. Capital assets are defined by the City as assets with an initial,
individual cost of more than $10,000 and an estimated useful life in excess of two years.
In the case of initial capitalization of general infrastructure assets (i.e., those reported by governmental
activities) the City chose to include all such items regardless of their acquisition date or amount. The City
was able to obtain the historical cost of the initial reporting of these assets by recording the actual costs
incurred by the City.
As the City constructs or acquires additional capital assets each period, including infrastructure assets, they
are capitalized and reported at historical cost. The reported value excludes normal maintenance and repairs
which are essentially amounts spent in relation to capital assets that do not increase the capacity or efficiency
of the item or increase its estimated useful life. Donated capital assets are recorded at their estimated fair
value at the date of donation.
Interest incurred during the construction phase of capital assets of enterprise funds is included as part of the
capitalized value of the assets constructed. The amount of interest capitalized depends on the specific
circumstances.
Land and construction in progress are not depreciated. The other property, plant, equipment, and
infrastructure of the City are depreciated using the straight-line method over the following estimated useful
lives:
51
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued
Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balance—Continued
Capital Assets—Continued
Capital Asset Classes Years
Land improvements 5-25
Leasehold improvements 10-25
Buildings and improvements 25-50
Utility buildings, improvements and systems 40-100
Furniture, vehicles and equipment 5-20
Infrastructure 15-50
Shared improvements 20
Defined Benefit Plan
The City offers a defined benefit pension plan to its employees through Municipal Employees Retirement
System (MERS). The City records a net pension liability for the difference between the total pension liability
calculated by the actuary and the Plan’s fiduciary net position. For purposes of measuring the net pension
liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension
expense, information about the fiduciary net position of the Plan and additions to/deductions from the Plan’s
fiduciary net position have been determined on the same basis as they are reported by MERS. For this
purpose, benefit payments (including refunds of employee contributions) are recognized when due and
payable in accordance with the benefit terms. Investments are reported at fair value.
Other Postemployment Benefit Costs
The City offers a defined benefit retiree healthcare benefits to retirees. The City records a net other
postemployment benefit (OPEB) liability for the difference between the total OPEB liability calculated by the
actuary and the OPEB Plan’s fiduciary net position. For purposes of measuring the net OPEB liability,
deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense,
information about the fiduciary net position of the OPEB Plan and additions to/deductions from the OPEB
Plan’s fiduciary net position have been determined on the same basis as they are reported by the OPEB Plan.
For this purpose, benefit payments (including refunds of employee contributions) are recognized when due
and payable in accordance with the benefit terms. Investments are reported at fair value.
Deferred Outflows/Inflows of Resources
In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred
outflows of resources. This separate financial statement element, deferred outflows of resources, represents a
consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of
resources (expense/expenditures) until then.
In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred
inflows of resources. This separate financial statement element, deferred inflows of resources, represents an
acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of
resources (revenue) until that time.
52
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued
Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balance—Continued
Net Position Flow Assumption
Sometimes the government will fund outlays for a particular purpose from both restricted (e.g., restricted
bond or grant proceeds) and unrestricted resources. In order to calculate the amounts of net position to report
as restricted and unrestricted in the government-wide and proprietary fund financial statements, a flow
assumption must be made about the order in which the resources are considered to be applied. It is the City’s
policy to consider restricted net position to have been depleted before unrestricted net position is applied.
Fund Balance Flow Assumptions
Sometimes the City will fund outlays for a particular purpose from both restricted and unrestricted resources
(the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as
restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a
flow assumption must be made about the order in which the resources are considered to be applied. It is the
City’s policy to consider restricted fund balance to have been depleted before using any of the components of
unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the
same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund
balance is applied last.
Fund Balance Policies
Fund balance of governmental funds is reported in various categories based on the nature of any limitations
requiring the use of resources for specific purposes. The City itself can establish limitation on the use of
resources through either a commitment (committed fund balance) or an assignment (assigned fund balance).
The committed fund balance classification includes amounts that can be used only for the specific purposes
determined by a formal action of the City’s highest level of decision-making authority. The City Commission
is the highest level of decision-making authority for the City that can, by adoption of a resolution prior to the
end of the fiscal year, commit fund balance. Once adopted, the limitation imposed by the resolution remains
in place until a similar action is taken (the adoption of another resolution) to remove or revise the limitation.
Amounts in the assigned fund balance classification are intended to be used by the City for specific purposes
but do not meet the criteria to be classified as committed. The City Commission has by resolution authorized
the city manager to assign fund balance. The City Commission may also assign fund balance as it does when
appropriating fund balance to cover a gap between estimated revenue and appropriations in the subsequent
year’s appropriated budget. Unlike commitments, assignments generally only exist temporarily. In other
words, an additional action does not normally have to be taken for the removal of an assignment. Conversely,
as discussed above, an additional action is essential to either remove or revise a commitment.
The City has a minimum fund balance policy requiring unassigned fund balance be at least 13 percent of prior
year actual revenues.
Revenues and Expenditures/Expenses
Program Revenues
Amounts reported as program revenues include 1) charges to customers or applicants who purchase, use, or
directly benefit from goods, services or privileges provided by a given function or segment and 2) grants and
contributions (including special assessments) that are restricted to meeting the operational or capital
requirements of a particular function or segment. All taxes, including those dedicated for specific purposes,
and other internally dedicated resources are reported as general revenues rather than as program revenues.
53
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued
Revenues and Expenditures/Expenses—Continued
Property Taxes
All trade and property tax receivables are shown net of allowance for uncollectibles.
The City bills and collects its own property taxes and also collects taxes for the county, school and State of
Michigan. Taxes are levied and liened on December 1 on the taxable valuation of property (as defined by
state statutes) located in the Local Governmental Unit as of the preceding December 31. Uncollected real
property taxes as of the following March 1 are turned over by the City to the County for collection. The
County advances the City all of these delinquent real property taxes. The delinquent personal property taxes
remain the responsibility of the City. The City recognizes all available revenue from the current tax levy.
Available means collected within the current period or expected to be collected soon enough thereafter to be
used to pay liabilities of the current period (60 days).
The 2018 state taxable value for real/personal property of the City totaled approximately $555,616,000 of
which approximately $33,373,000 was captured by the component units. The ad valorem taxes levied
consisted of 10.0, 3.0 and .0899 mills for the City’s general operating, sanitation and community promotion
purposes. These amounts are recognized in the General Fund with captured amounts shown in the TIFA,
LDFA SmartZone, DDA, BRA I, BRA II, and BRA III component units.
Compensated Absences
City employees are granted vacation and sick leave in varying amounts based on length of service and
employee group. Unused vacation and sick leave days are paid to employees upon termination under limits
that vary by employee group. The liability for these compensated absences is accrued when incurred in the
government-wide and proprietary fund financial statements. The current portion of this debt is estimated
based on historical trends. A liability for these amounts is reported in the governmental funds only if they
have matured, for example, as a result of employee resignations and retirements.
Proprietary Funds Operating and Nonoperating Revenues and Expenses
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues
and expenses generally result from providing services and producing and delivering goods in connection with
a proprietary fund's principal ongoing operations. The principal operating revenues are charges to customers
for sales and services. The enterprise funds also recognize as operating revenue the portion of tap fees
intended to recover the cost of connecting new customers to the system. Operating expenses for enterprise
funds and internal service funds include the cost of sales and services, administrative expenses, and
depreciation on capital assets. All revenues and expenses not meeting this definition are reported as
nonoperating revenues and expenses.
Comparative Data
Comparative total data for the prior year have been presented in selected sections of the accompanying
financial statements in order to provide an understanding of changes in the City’s financial position and
operations. However, comparative (i.e. presentation of prior year’s totals by fund type) data has not been
presented in each of the statements since its inclusion would make the statements unduly complex and
difficult to read. Also, certain items in the 2018 financial statements have been reclassified to conform to the
2019 presentation.
54
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE B—STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
Budgetary Information
Annual budgets are adopted on a basis consistent with generally accepted accounting principles for the
General Fund and special revenue funds.
The appropriated budget is prepared by fund, function and department. The City Manager and department
heads may make transfers of appropriations within a department. Transfers of appropriations between
departments require the approval of the City Commission. The legal level of budgetary control is the
department level for the General Fund and the total expenditure or “fund” level for all other funds.
Appropriations in all budgeted funds lapse at the end of the fiscal year.
Excess of Expenditures Over Appropriations
During the year ended June 30, 2019, actual expenditures exceeded appropriations for:
Final
Budget Actual
General Fund
Administrative Services
Clerk $ 460,548 $ 542,248
Public safety
Police department 9,678,626 9,880,736
Fire department 3,925,000 3,989,048
Public sworks
Street lighting 490,000 551,818
General sanitation 1,932,345 2,107,545
L.C. Walker Arena Fund
Culture and recreation 1,582,871 1,805,697
These overexpenditures were funded with available fund balance.
Fund Deficit
As of June 30, 2019, the City’s Public Service Building Fund had an unrestricted net position deficit of
$154,992. This deficit will be eliminated through future operations and an interfund transfer.
55
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE C—DEPOSITS AND INVESTMENTS
As of June 30, 2019, the City had the following investments:
Weighted
Average
Maturity
Fair Value (Months) S&P Percent
Investment Type
Money market funds $ 10,378 1 AAA 0.2 %
Negotiable certificates of deposit 1,702,078 31 not rated 10.7
US agency obligations 3,301,972 198 AA+ 20.7
Local units of government obligations 503,280 10 AAA 3.2
Local units of government obligations 295,056 3 A+ 1.9
Local units of government obligations 610,127 32 AA- 3.8
External investment pool 2,009,569 2 AAA 12.6
Commercial paper 6,117,413 2 A2/P2 38.4
Commercial paper 1,383,200 6 A1/P1 8.5
Total fair value $ 15,933,073 100.0 %
Portfolio weighted average maturity 47
The City voluntarily invests certain excess funds in an external investment pool (Pool). The Pool is an
external investment pool of "qualified" investments for Michigan municipalities. The Pool is not regulated nor
registered with the SEC. The fair value of the City's investments is the same as the value of the Pool’s shares.
Deposit and Investment Risks
Interest rate risk
The City has a formal investment policy that limits investment maturities as a means of managing its
exposure to fair value losses arising from increasing interest rates. At least 10 percent of the City’s total
portfolio must be in instruments maturing in 30 days.
Credit risk
State law limits investments in commercial paper and corporate bonds to the two highest classifications issued
by nationally recognized statistical rating organizations. The City has no investment policy that would further
limit its investment choices.
Concentration of credit risk
Concentration of credit risk is the risk of loss attributed to the magnitude of the City investment in a single
issuer, by diversifying the investment portfolio so that the impact of potential losses from any one type of
security or issuer will be minimized. The City has a concentration of credit risk policy that limits investment
in commercial paper, eligible bankers’ acceptances and time certificates of deposit to 25 percent each of the
total portfolio. The City has more than 5 percent of its investments in the following securities:
Percent of
Security Total Investments
Federal Home Loan Mortgage Corporation obligations 15.9%
General Electric Co commercial paper 10.6%
Intesa Funding LLC commercial paper 15.3%
Catholic Health Initiatives commercial paper 18.1%
Bank of China LTD commercial paper 9.9%
56
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE C—DEPOSITS AND INVESTMENTS—Continued
Deposit and Investment Risks—Continued
Custodial credit risk - deposits
In the case of deposits, this is the risk that in the event of a bank failure, the City's deposits may not be
returned to it. As of June 30, 2019, $5,439,391 of the City’s bank balance of $5,939,391 was exposed to
custodial credit risk because it was uninsured and uncollateralized. The City’s investment policy sets certain
credit requirements that a bank must meet for the City to deposit funds in it.
Custodial credit risk - investments
This is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the
value of its investments or collateral securities that are in the possession of an outside party. The City has a
custodial credit risk policy for investments that requires that all investments that are held with a third-party
for safekeeping be in the City’s name.
Foreign currency risk
The City is not authorized to invest in investments which have this type of risk.
Restricted Assets
Restrictions are placed on assets by bond ordinance and City Commission action. At June 30, 2019, restricted
cash and investments in the Water Fund of $599,500 were restricted by bond ordinance.
NOTE D—ASSETS MANAGED BY OTHERS
As allowed by MCL 123.874 and MCL 128.4, the City is permitted to place monies in community foundations.
The Funds
The City has four funds with the Community Foundation of Muskegon County (Community Foundation).
Lakeshore Trails Improvement Fund
The Lakeshore Trails Improvement Fund was established by the City primarily to be used for the general
support of the bike trails, which are located in the City of Muskegon. The agreement with the Community
Foundation allows the use of the Fund’s income in accordance with the Community Foundation’s spending
policy and principal in certain circumstances.
Cemetery Perpetual Care Fund
The City of Muskegon Cemetery Perpetual Care Fund was established by the City primarily to be used for the
care and maintenance of the cemeteries that are operated by the City. The agreement with the Community
Foundation allows the use of the Fund’s income in accordance with the Community Foundation’s spending
policy and principal in certain circumstances.
Pere Marquette and Margaret Drake Elliot Park Fund
The Pere Marquette and Margaret Drake Elliot Park Fund (Marquette and Elliot Park Fund) was established by
the City to be used for capital improvements at Pere Marquette and Margaret Drake Elliot Parks. The
agreement with the Community Foundation allows the use of the Fund’s income in accordance with the
Community Foundation’s spending policy and principal in certain circumstances.
Darl and Kathleen Staley Charity Fund
The Darl and Kathleen Staley Charity Fund (Staley Charity Fund) was established after the City received
monies from the Staley’s estate. The Fund is to be used for capital improvements needs at City parks. The
agreement with the Community Foundation allows the use of the Fund’s income in accordance with the
Community Foundation’s spending policy and principal in certain circumstances.
57
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE D—ASSETS MANAGED BY OTHERS—Continued
The Funds—Continued
The Community Foundation invests the contributions to the funds in various types of marketable equity and debt
securities, U.S. Treasuries, commercial paper, and certificates of deposit. The majority of investments are
uninsured and uncollateralized.
Reporting of the Assets of the Funds
The investments held at the Community Foundation, which were contributed by the City to the funds along with
the earnings on these investments, are reported at fair value as assets of the City. The contributions to these funds
made by third party donors directly to the Community Foundation have been excluded from the assets of the City.
Summary of the Community Foundation Funds
A summary of revenues, expenses, and changes in the assets at fair value of the funds for the year ended June 30,
2019 follows:
Lakeshore
Trails Cemetery Marquette Staley
Improvement Perpetual and Elliot Charity
Fund Care Fund Park Fund Fund Totals
Revenues
Contributions $ 3,132 $ - $ - $ - $ 3,132
Dividends and interest 1,391 18,021 2,840 9,797 32,049
Realized and unrealized loss on investments 1,871 23,158 3,636 12,577 41,242
6,394 41,179 6,476 22,374 76,423
Expenses
Administration fees 264 5,725 1,610 3,703 11,302
Revenues over expenses 6,130 35,454 4,866 18,671 65,121
Total assets at beginning of year 51,035 1,181,335 107,622 370,573 1,710,565
Total assets at end of year 57,165 1,216,789 112,488 389,244 1,775,686
Less assets recorded as those of the Foundation (39,265) - (112,488) (389,244) (540,997)
Assets reported on the Balance Sheet/
Statement of Net Position $ 17,900 $ 1,216,789 $ - $ - $ 1,234,689
The Board of Trustees of the Community Foundation has the power to modify any restriction or condition on the
distribution of funds for any specified charitable purpose or to a specified organization if, in the sole judgment of
the Board, such restriction or condition becomes, in effect, unnecessary, incapable of fulfillment, or inconsistent
with the charitable needs of the community served. The authority to modify restrictions is sometimes referred to
as “variance power” and is a legal standard imposed on all community foundations.
58
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE E—FAIR VALUE MEASUREMENTS
The framework for measuring fair value provides a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in
active markets for identical assets or liabilities (level 1) and the lowest priority to unobservable inputs (level
3). The three levels of the fair value hierarchy are described below:
Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical
assets or liabilities in active markets that the City the ability to access.
Level 2 Inputs to the valuation methodology include the following:
- Quoted prices for similar assets or liabilities in active markets;
- Quoted prices for identical or similar assets or liabilities in inactive markets;
- Inputs other than quoted prices that are observable for the asset or liability;
- Inputs that are derived principally from or corroborated by observable
market data by correlation or other means.
If the asset or liability has a specified (contractual) term, the level 2 input must be
observable for substantially the full term of the asset or liability.
Level 3 Inputs to the valuation methodology are unobservable and significant to the fair
value measurement.
The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest
level of any input that is significant to the fair value measurement. Valuation techniques used need to
maximize the use of observable inputs and minimize the use of unobservable inputs.
Following is a description of the valuation methodologies used for assets measured at fair value. There have
been no changes in the methodologies used at June 30, 2019.
Money market funds: Valued at amortized cost, which approximates fair value.
Negotiable certificates of deposit, US agency obligations, local units of government obligations,
commercial paper: Valued at the closing price reported on the active market on which the individual
securities are traded.
59
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE E—FAIR VALUE MEASUREMENTS—Continued
External investment pools and assets managed by others: The assets are valued based upon the City’s
allocable share of the Michigan CLASS and Community Foundation of Muskegon County (Pools) pooled
investment portfolios. The allocable shares are based on the value of the underlying assets owned by the
Pools, minus their liabilities.
The assets managed by others are valued monthly by the Pools and are allocated based upon each
organization’s calculated share of the Pools’ pooled investment portfolios. Each entity with an interest
within the pooled investments receives statements from the Pools indicating the additions to the
investments (via contributions), withdrawals from the investments (via grants), and the investment returns
allocated via a unitization process. The City calculates the fair value of its share of the pooled investment
assets held by the Pools based on the estimated fair value of the underlying assets. The Pools control the
investments and make all management and investment decisions.
The preceding methods described may produce a fair value calculation that may not be indicative of net
realizable value or reflective of future fair values. Furthermore, while the City believes its valuation methods
are appropriate and consistent with other market participants, the use of different methodologies or
assumptions to determine the fair value of certain financial instruments could result in a different fair value
measurement at the reporting date.
The following table sets forth by level, within the fair value hierarchy, the City’s assets at fair value on a
recurring basis as of June 30, 2019:
Assets at Fair Value as of June 30, 2019
Level 1 Level 2 Level 3 Total
Money market funds $ - $ 10,378 $ - $ 10,378
Negotiable certificates of deposit 1,702,078 - - 1,702,078
US agency obligations 3,301,972 - - 3,301,972
Local units of government
obligations 1,408,463 - - 1,408,463
External investment pools - 2,009,569 - 2,009,569
Commercial paper 7,500,613 - - 7,500,613
Assets managed by others - 1,234,689 - 1,234,689
Total assets at fair value $ 13,913,126 $ 3,254,636 $ - $ 17,167,762
60
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE F—CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2019 was as follows:
Balance Balance
July 1, 2018 Additions Deductions June 30, 2019
Governmental activities:
Capital assets, not being depreciated:
Land $ 12,649,465 $ 2,002,863 $ - $ 14,652,328
Construction in progress 1,640,959 7,258,894 4,696,861 4,202,992
Total capital assets, not being depreciated 14,290,424 9,261,757 4,696,861 18,855,320
Capital assets, being depreciated:
Land improvements 4,685,117 624,913 - 5,310,030
Leasehold improvements 534,821 - - 534,821
Buildings and improvements 24,212,249 782,393 - 24,994,642
Furniture, vehicles and equipment 15,158,636 1,078,798 235,691 16,001,743
Infrastructure 74,424,280 3,254,260 2,042,286 75,636,254
Shared improvements 6,905,293 - - 6,905,293
Total capital assets, being depreciated 125,920,396 5,740,364 2,277,977 129,382,783
Less accumulated depreciation:
Land improvements 1,930,968 160,495 - 2,091,463
Leasehold improvements 476,110 9,598 - 485,708
Buildings and improvements 17,337,487 445,794 - 17,783,281
Furniture, vehicles and equipment 11,799,624 614,761 200,205 12,214,180
Infrastructure 37,269,412 3,557,687 2,042,286 38,784,813
Shared improvements 4,456,786 345,264 - 4,802,050
Total accumulated depreciation 73,270,387 5,133,599 2,242,491 76,161,495
Total capital assets, being
depreciated, net 52,650,009 606,765 35,486 53,221,288
Capital assets, net $ 66,940,433 $ 9,868,522 $ 4,732,347 $ 72,076,608
Business-type activities:
Capital assets, not being depreciated:
Land $ 142,250 $ - $ - $ 142,250
Construction in progress 699,869 4,056,558 1,031,813 3,724,614
Total capital assets, not being depreciated 842,119 4,056,558 1,031,813 3,866,864
Capital assets, being depreciated:
Land improvements 1,888,965 62,948 - 1,951,913
Buildings, improvements and systems 93,652,787 997,838 - 94,650,625
Machinery and equipment 3,217,433 29,646 - 3,247,079
Total capital assets, being depreciated 98,759,185 1,090,432 - 99,849,617
Less accumulated depreciation:
Land improvements 1,824,072 7,004 - 1,831,076
Buildings, improvements and systems 49,458,687 2,359,163 - 51,817,850
Machinery and equipment 2,724,384 56,505 - 2,780,889
Total accumulated depreciation 54,007,143 2,422,672 - 56,429,815
Total capital assets, being
depreciated, net 44,752,042 (1,332,240) - 43,419,802
Capital assets, net $ 45,594,161 $ 2,724,318 $ 1,031,813 $ 47,286,666
61
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE F—CAPITAL ASSETS—Continued
Depreciation
Depreciation expense was charged to functions as follows:
Governmental activities:
Adminstrative services $ 2,485
Financial services 806
Public safety 157,792
Public works 2,126
Highways, streets and bridges 4,029,931
Community and economic development 75,717
Culture and recreation 394,249
General administration 20,871
Internal Service Fund depreciation 449,622
$ 5,133,599
Business-type activities:
Sewer $ 459,109
Water 1,857,523
Marina and Launch Ramp 106,040
$ 2,422,672
Balance Balance
July 1, 2018 Additions Deductions June 30, 2019
Component units:
Capital assets, not being depreciated:
Land $ 400,000 $ - $ - $ 400,000
Capital assets, being depreciated:
Building and improvements 3,798,258 - - 3,798,258
Less accumulated depreciation:
Building and improvements 2,517,785 172,648 - 2,690,433
Total capital assets, being
depreciated, net 1,280,473 (172,648) - 1,107,825
Capital assets, net $ 1,680,473 $ (172,648) $ - $ 1,507,825
Depreciation
Depreciation expense was charged to economic development.
62
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE G—INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
The composition of interfund balances as of June 30, 2019 is as follows:
Due To/From Other Funds:
Receivable Fund Payable Fund Amount
General Fund L.C. Walker Arena Fund $ 229,130
General Fund Senior Millage Fund 2,346
General Fund Lead Abatement Fund 32,146
General Fund Community Development Block Grant Fund 126,865
General Fund Sewer Fund 70,644
General Fund General Insurance Fund 353,563
$ 814,694
The outstanding balances between funds result from the payable funds having negative positions in the City’s
cash and investment pool.
Component Unit Advance:
The Cemetery Perpetual Care Fund, Equipment Fund, and General Insurance Fund advanced the BRA I
$852,752 to enable the BRA I to retire a redevelopment commitment early. The advance will be repaid with
future tax captures.
Interfund Transfers:
Transfers In Amount Transfers Out Amount
Nonmajor Governmental Funds
General Fund $ 5,989 State Grants Fund $ 5,989
Nonmajor Governmental Funds
Local Streets Fund 250,000 General Fund 761,486
L.C. Walker Arena Fund 476,486
Farmers Market and
Kitchen 242 Fund 35,000
761,486 761,486
Nonmajor Governmental Funds Nonmajor Governmental Funds
Economic Development -
EDC Revolving Loan Fund 442,761 Sappi Fund 442,761
$ 1,210,236 $ 1,210,236
The General Fund transferred funds to the Major Streets and Trunkline Fund for future capital improvements
and to the L.C. Walker Arena Fund and other funds for operation subsidies. The Economic Development –
Sappi Fund was closed into the EDC Revolving Loan Fund. Other transfers between funds were made to
meet grant matching requirements or other operational needs.
63
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE H—LONG-TERM DEBT
Summary of Changes in Long-Term Liabilities
The following is a summary of long-term liabilities activity for the City for the year ended June 30, 2019.
Balance Balance Due Within
July 1, 2018 Additions Deductions June 30, 2019 One Year
Governmental activities:
Public placement debt
General obligation debt $ 5,340,000 $ - $ 275,000 $ 5,065,000 $ 505,000
Premium 293,903 - 36,000 257,903 -
Direct borrowings and
direct placements
Intergovernmental obligations 39,012 - 19,313 19,699 19,699
Compensated absences 1,531,745 1,596,272 1,369,228 1,758,789 293,200
Governmental activities
long-term liabilities $ 7,204,660 $ 1,596,272 $ 1,699,541 $ 7,101,391 $ 817,899
Business-type activities:
Public placement debt
Revenue obligations $ 7,040,000 $ - $ 1,495,000 $ 5,545,000 $ 745,000
Premium 4,614 - 4,614 - -
Compensated absences 203,558 192,728 186,718 209,568 34,900
Business-type activities
long-term liabilities $ 7,248,172 $ 192,728 $ 1,686,332 $ 5,754,568 $ 779,900
Component units:
Public placement debt
General obligation debt $ 2,485,000 $ - $ 375,000 $ 2,110,000 $ 390,000
Premium 78,326 - 20,907 57,419 -
Direct borrowings and
direct placements
Intergovernmental obligations 1,000,000 - - 1,000,000 1,000,000
Component unit long-
term liabilities $ 3,563,326 $ - $ 395,907 $ 3,167,419 $ 1,390,000
64
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE H—LONG-TERM DEBT—Continued
Public Placement Debt
General Obligation Debt
The City has issued general obligation debt to provide funds for the acquisition and construction of major
capital facilities. General obligation debt is a direct obligation and pledges the full faith and credit of the City.
This debt is generally issued as serial bonds with varying amounts of principal maturing each year. Certain
debt issued by the City’s component units is also backed by the full faith and credit of the City if there is a
shortfall in tax increment revenues. General obligation debt outstanding as of June 30, 2019 is as follows:
Original Date of
Borrowing Interest Rate Maturity Balance
General obligation debt:
Governmental activities:
2011 Capital Improvement Bonds $ 2,000,000 2.98% September 2021 $ 665,000
2016 Limited Tax General Obligation
Refunding Bonds 4,535,000 2% - 4% October 2032 4,400,000
$ 5,065,000
Component units:
2012 LDFA Tax Increment Refunding Bonds $ 4,100,000 3% - 4% November 2025 $ 2,110,000
Revenue Obligations
The City has issued bonds where the income derived from the acquired or constructed assets is pledged to pay
debt service. Revenue obligations outstanding as of June 30, 2019 are as follows:
Original Date of
Borrowing Interest Rate Maturity Balance
Business-type activities:
Revenue obligations:
2004 Drinking Water State Revolving Fund $ 13,900,000 2.13% October 2025 $ 5,545,000
The City has pledged future water customer revenues, net of specified operating expenses, to repay the 2004
Drinking Water State Revolving Fund Loan. Proceeds from the issuance were used to make improvements to
the City’s water supply system. The bond is payable solely from water customer net revenues and is payable
through 2025. Annual principal and interest payments on the bond are expected to require less than 35
percent of net revenues through 2025. The total principal and interest remaining to be paid on the bond is
$5,966,974. Principal and interest paid for the year ended June 30, 2019 and total customer net revenues were
$1,653,259 and $2,799,891, respectively.
The City was in compliance in all material respects with all the revenue bond ordinances at June 30, 2019.
65
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE H—LONG-TERM DEBT—Continued
Direct Borrowings and Direct Placements
Intergovernmental Obligations
The City has long-term contractual obligations with other governmental entities for program purposes.
Intergovernmental contractual obligations outstanding as of June 30, 2019 are as follows:
Original Date of
Borrowing Interest Rate Maturity Balance
Intergovernmental Contractual Obligations:
Governmental activities:
2008 State of Michigan Brownfield
Redevelopment Loan $ 500,000 2% March 2020 $ 19,699
Component units:
1989 DDA Promissory Note to
Muskegon County $ 1,000,000 0% August 2019 $ 1,000,000
For governmental activities, claims and judgments and compensated absences are generally liquidated by the
General Fund.
In 2005, the County of Muskegon began making improvements to the regional sewer treatment facilities. The
project was funded with $17,500,000 bonds issued through the State of Michigan Clean Water Revolving
Fund Loan Program. The County operates the system and makes payments on the bonds with user charges to
the local units. The City has pledged its limited tax full faith and credit for the payment of its portion of the
debt should user charges collected by the County be insufficient to make the debt payments. The City’s
portion of the debt on June 30, 2019 was approximately $2,832,000. The City is unaware of any
circumstances that would cause a shortfall in the near future.
Annual debt service requirements to maturity for public placement debt and for direct borrowings and direct
placements outstanding as of June 30, 2019 follow:
Governmental Activites
Direct Borrowings and Business-type Activities
Year Ending Public Placement Debt Direct Placements Public Placement Debt
June 30, Principal Interest Principal Interest Principal Interest
2020 $ 505,000 $ 176,364 $ 19,699 $ 394 $ 745,000 $ 109,916
2021 515,000 161,107 - - 760,000 93,925
2022 535,000 145,402 - - 775,000 77,616
2023 300,000 132,900 - - 790,000 60,988
2024 300,000 122,400 - - 810,000 43,988
2025-2029 1,620,000 420,400 - - 1,665,000 35,541
2030-2033 1,290,000 102,800 - - - -
$ 5,065,000 $ 1,261,373 $ 19,699 $ 394 $ 5,545,000 $ 421,974
66
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE H—LONG-TERM DEBT—Continued
Component Units
Direct Borrowings and
Year Ending Public Placement Debt Direct Placements
June 30, Principal Interest Principal Interest
2020 $ 390,000 $ 65,800 $ 1,000,000 $ -
2021 395,000 50,100 - -
2022 245,000 37,300 - -
2023 255,000 28,575 - -
2024 265,000 20,775 - -
2025-2029 560,000 16,950 - -
2030-2033 - - - -
$ 2,110,000 $ 219,500 $ 1,000,000 $ -
Annual debt service requirements to maturity by type of debt as of June 30, 2019 follow:
Revenue
General Obligation Debt Obligations Intergovernmental
Year Ending Governmental Component Business-type Governmental Component
June 30, Activities Units Activities Activities Units
2020 $ 681,364 $ 455,800 $ 854,916 $ 20,093 $ 1,000,000
2021 676,107 445,100 853,925 - -
2022 680,402 282,300 852,616 - -
2023 432,900 283,575 850,988 - -
2024 422,400 285,775 853,988 - -
2025-2029 2,040,400 576,950 1,700,541 - -
2030-2033 1,392,800 - - - -
$ 6,326,373 $ 2,329,500 $ 5,966,974 $ 20,093 $ 1,000,000
67
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE I—OTHER INFORMATION
Risk Management
The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets;
errors and omissions; injuries to employees and natural disasters. The City manages its liability and property
risk by participating in the Michigan Municipal Risk Management Authority (MMRMA), a public entity risk
pool providing property and liability coverage to its participating members. The City pays an annual
premium to MMRMA for its insurance coverage. The MMRMA is self-sustaining through member
premiums and provides, subject to certain deductibles, occurrence-based casualty coverage for each incident
and occurrence-based property coverage to its members by internally assuring certain risks and reinsuring
risks through commercial companies. A $150,000 deductible is maintained to place the responsibility for
small charges with the City. Settled claims resulting from these risks have not exceeded insurance coverage
in any of the past three fiscal years. Changes in the fund’s claim liability amount in 2019 and 2018 were as
follows:
Current Year
Balance Claims and Balance
at Beginning Changes in Claims at End
Year Ended of Year Estimates Payments of Year
June 30, 2019 $ 78,289 $ 227,646 $ 81,355 $ 224,580
June 30, 2018 110,132 94,450 126,293 78,289
The City manages its workers' compensation risk by participating in the Michigan Municipal Workers'
Compensation Fund (MMWCF), a public entity risk pool providing workers' compensation coverage to its
participating members. The City pays an annual premium to MMWCF for its workers' compensation
coverage. The MMWCF is self-sustaining through member premiums and provides statutory workers'
compensation coverage to its members by internally assuring certain risks and reinsuring risks through
commercial companies. Settled claims resulting from these risks have not exceeded insurance coverage in
any of the past three fiscal years.
The City is self-insured for employee health care benefits for those employees selecting the City plan over
other options. Under this plan, the General Insurance Fund provides coverage for up to a maximum of up to
$500,000 per covered individual’s lifetime. As of June 30, 2019, the claims liability including incurred but
not reported claims was $51,401. A liability was recorded in the accompanying financial statements for the
estimated claims liability. The claims liability was based on past experience, a review of pending claims and
other social and economic factors. The above estimate was not discounted and there were no outstanding
claims for which annuity contracts have been purchased in the claimant’s name. No significant reductions in
insurance coverage were made in the last fiscal year. Settled claims have not exceeded the commercial
coverage in any of the past three fiscal years. Changes in the fund’s claim liability amount in 2019 and 2018
were as follows:
Current Year
Balance Claims and Balance
at Beginning Changes in Claims at End
Year Ended of Year Estimates Payments of Year
June 30, 2019 $ 33,784 $ 1,643,632 $ 1,626,015 $ 51,401
June 30, 2018 53,504 1,267,269 1,286,989 33,784
68
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE I—OTHER INFORMATION—Continued
Contingencies
Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies,
principally the federal government. Any disallowed claims, including amounts already collected, may
constitute a liability to the applicable funds. The amount, if any, of expenditures that may be disallowed by
the grantor cannot be determined at this time, although the City expects such amounts, if any, to be
immaterial.
The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently
determinable, in the opinion of the City's counsel the resolution of these matters will not have a material
adverse effect on the financial condition of the City.
Commitment
The City has a contract for street projects including water system improvements as of June 30, 2019 with a
remaining amount of approximately $4,694,000. Approximately $800,000 of these costs is being financed by
a grant with the remainder coming from the Major Street and Trunkline and Water funds.
Leases
The City leases an office facility under a noncancelable operating lease that expires June 2022 with the option
by the tenant to renew the term of the lease for two successive periods of five years each. The City received
rental income (including pro-rata utility usage) of $45,292 for the year ended June 30, 2019. The future
minimum rental income for this lease is as follows:
Year Ending
June 30, Amount
2020 $ 55,919
2021 55,463
2022 55,584
$ 166,966
NOTE J—TAX ABATEMENTS
Industrial Facilities Exemption
The City entered into property tax abatement agreements with local businesses under the Plant Rehabilitation
and Industrial Developments Act, (known as the Industrial Facilities Exemptions or IFTs) PA 198 of 1974, as
amended. The IFTs provides a tax incentive to manufacturers to enable renovation and expansion of aging
facilities, assist in the building of new facilities, and to promote the establishment of high tech facilities.
Properties qualifying for IFT status are taxed at half the local property tax millage rate applicable to other real
and personal property in the City for a term of one to twelve years as determined by the City.
For the year ended June 30, 2019, the City abated property taxes revenues totaling $48,914 under this
program.
69
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE J—TAX ABATEMENTS—Continued
Brownfield Redevelopment Authority
The City entered into property tax abatement agreements with local businesses under the Brownfield
Redevelopment Act, PA 381 of 1996, as amended. Brownfield properties are those in which the
redevelopment or reuse of property may be complicated by the presence or perception of contamination.
Brownfields use tax increment financing where growth in taxable value above the initial value of the
Brownfield is captured and used to repay the developer for remediation costs.
For the year ended June 30, 2019, the City abated property taxes revenues totaling $134,118 under this
program.
Payment in Lieu of Taxes (PILOT)
The City uses the State Housing Development Authority Act, PA 346 of 1966, as amended, to enter into
agreements that provide for a service charge in lieu of taxes to encourage the development of housing of its
elderly citizens of low and moderate income.
For the year ended June 30, 2019, the City abated property taxes revenues totaling $190,106 under this
program.
NOTE K—EMPLOYEE RETIREMENT SYSTEM AND PENSION PLAN
Defined Benefit Pension Plan
Plan Description
The City participates in the Municipal Employees Retirement System (MERS) of Michigan. MERS is an
agent multiple-employer, statewide public employee pension plan established by the Michigan Legislature
under Public Act 135 of 1945 and administered by a nine member Retirement Board. MERS issues a publicly
available financial report that includes financial statements and required supplementary information. This
report may be obtained accessing the MERS website at www.mersofmich.com.
Benefits Provided
The City’s defined benefit pension plan provides certain retirement, disability and death benefits to plan
members and beneficiaries. Public Act 427 of 1984, as amended, established and amends the benefit
provisions of the participants in MERS. The Plan covers all full-time employees hired prior to January 2005.
Beginning in January 2005, the various employee divisions began to be closed. By July 2006, all employee
divisions were closed.
70
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE K—EMPLOYEE RETIREMENT SYSTEM AND PENSION PLAN—Continued
Defined Benefit Pension Plan—Continued
Benefits Provided—Continued
Benefits provided are based on the following by employee division:
Normal Reduced
Vesting Retirement Early Early
Mulitplier Period Age Retirement Retirement
Non-Union General 2.25%* 5 years 60 55/25 50/25 or 55/15
Non-Union Police 3.00% 10 years 55 53/25 50/25
Clerical 2.25%* 5 years 60 55/25 50/25 or 55/15
Department of Public Works 2.25%* 10 years 60 55/30 50/25 or 55/15
Police Patrol 3.00%* 10 years 55 50/25 Not applicable
Police Command 3.00% 10 years 55 50/25 Not applicable
Fire 2.75% 10 years 55 53/25 50/25
*Effective January 2017, the multiplier for Non-Union General and Department of Public Works was changed
to 2.00% and the multiplier for Police Patrol was changed to 2.675%. Effective December 2018, the multiplier
for Clerical was changed to 2.00%.
Final average compensation is calculated based on 3 years.
Employees Covered by Benefit Terms
At December 31, 2018 valuation date, the following employees were covered by the benefit terms:
Inactive employees or beneficiaries currently receiving benefits 325
Inactive employees entitled to but not yet receiving benefits 39
Active employees 98
Total employees covered by MERS 462
Contributions
The City is required to contribute amounts at least equal to the actuarially determined rate, as established by
the MERS Retirement Board. The actuarially determined rate is the estimated amount necessary to finance the
cost of benefits earned by employees during the year, with an additional amount to finance any unfunded
accrued liability. The City may establish contribution rates to be paid by its covered employees.
For the year ended June 30, 2019, the City had a flat-dollar employer contribution to the Plan of $1,902,696 in
lieu of a percentage of covered employee payroll, as the Plan is closed to new employees. Member
contributions range from 4 percent to 6.5 percent.
Net Pension Liability
The City’s net pension liability was measured as of December 31, 2018, and the total pension liability used to
calculate the net pension liability was determined by an annual actuarial valuation as of that date.
71
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE K—EMPLOYEE RETIREMENT SYSTEM AND PENSION PLAN—Continued
Defined Benefit Pension Plan—Continued
Actuarial Assumptions
The total pension liability in the December 31, 2018 actuarial valuation was determined using the following
actuarial assumptions, applied to all periods included in the measurement:
Inflation 2.5 percent
Salary increases 3.75 percent, in the long-term
Investment rate of return 7.75 percent, net of administrative and investment expenses
Although no specific price inflation assumptions are needed for the valuation, the 2.5 percent long-term wage
inflation assumption would be consistent with a price inflation of 3-4 percent. Mortality rates used were based
on the RP-2014 Group Annuity Mortality Table of a 50 percent Male and 50 percent Female blend.
The actuarial assumptions used in valuation were based on the results of the most recent actuarial experience
study of 2009 through 2013.
The long-term expected rate of return on pension plan investments was determined using a model method in
which the best-estimate ranges of expected future real rates of return (expected returns, net of investment and
administrative expenses and inflation) are developed for each major asset class. These ranges are combined to
produce the long-term expected rate of return by weighting the expected future real rates of return by the target
asset allocation percentage and by adding expected inflation. The target allocation and best estimates of
arithmetic real rates of return for each major asset class are summarized in the following table:
Target Long-Term Long-Term
Allocation Expected Expected
Target Gross Rate of Gross Rate Inflation Real Rate
Asset Class Allocation Return of Return Assumption of Return
Global equity 55.5% 8.65% 4.80% 2.50% 3.42%
Global fixed income 18.5% 3.76% 0.70% 2.50% 0.23%
Real assets 13.5% 9.72% 1.31% 2.50% 0.97%
Diversifying strategies 12.5% 7.50% 0.94% 2.50% 0.63%
Total 100.0% 7.75% 5.25%
Discount Rate
The discount rate used to measure the total pension liability was 8.00 percent for 2018. The projection of cash
flows used to determine the discount rate assumed that employee contributions will be made at the current
contribution rate and that City contributions will be made at rates equal to the difference between actuarially
determined contribution rates and the employee rate. Based on those assumptions, the pension plan's fiduciary
net position was projected to be available to pay all projected future benefit payments of current active and
inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied
to all periods of projected benefit payments to determine the total pension liability.
72
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE K—EMPLOYEE RETIREMENT SYSTEM AND PENSION PLAN—Continued
Defined Benefit Pension Plan—Continued
Changes in the Net Pension Liability
Increase (Decrease)
Plan Net Pension
Total Pension Fiduciary Liability
Liability (a) Position (b) (a)-(b)
Balance at January 1, 2018 $ 107,675,977 $ 90,759,017 $ 16,916,960
Changes for the year
Service cost 806,565 - 806,565
Interest 8,345,836 - 8,345,836
Difference between expected and
actual experience 3,642,392 - 3,642,392
Contributions - employer - 2,671,175 (2,671,175)
Contributions - employee - 848,562 (848,562)
Net investment income - (3,452,538) 3,452,538
Administrative expenses - (173,509) 173,509
Benefit payments including refund of
employee contributions (7,512,608) (7,512,608) -
Other changes (229,967) - (229,967)
Net changes 5,052,218 (7,618,918) 12,671,136
Balance at December 31, 2018 $ 112,728,195 $ 83,140,099 $ 29,588,096
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the net pension liability of the City, calculated using the discount rate of 8.00 percent,
as well as what the City's net pension liability would be if it were calculated using a discount rate that is 1-
percentage-point lower (7.00 percent) or 1-percentage-point higher (9.00 percent) than the current rate:
Current Discount
1% Decrease (7%) Rate (8%) 1% Increase (9%)
City's net pension liability $ 41,105,878 $ 29,588,096 $ 19,768,942
Note: The current discount rate shown for GASB 68 purposes is higher than the MERS assumed rate of
return. This is because for GASB 68 purposes, the discount rate must be gross of administrative expenses,
whereas for funding purposes, it is net of administrative expense.
73
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE K—EMPLOYEE RETIREMENT SYSTEM AND PENSION PLAN—Continued
Defined Benefit Pension Plan—Continued
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions
For the year ended June 30, 2019, the City recognized pension expense of $6,178,991. At June 30, 2019, the
City reported deferred outflows of resources and deferred inflows of resources related to pensions from the
following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences in experience $ 1,821,196 $ -
Net differences between projected
and actual net investment income 6,244,567 -
Contributions subsequent to the
measurement date* 951,858 -
Total $ 9,017,621 $ -
*The amount reported as deferred outflows of resources resulting from contributions subsequent to the
measurement date will be recognized as a reduction in the net pension liability for the year ending June 30,
2020.
Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will
be recognized in pension expense as follows:
Year Ending
June 30, Amount
2020 $ 4,069,409
2021 675,908
2022 1,217,912
2023 2,102,534
Payables to the Pension Plan
At June 30, 2019, the City reported a payable of $185,266 for the outstanding amount of contributions to the
pension plan required for the year ended June 30, 2019.
74
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE K—EMPLOYEE RETIREMENT SYSTEM AND PENSION PLAN—Continued
Defined Contribution Pension Plan
The City also maintains a defined contribution plan offered by MERS for its full-time employees hired after
the defined benefit plan was closed to new participants.
Benefit terms, including contribution requirements, for the MERS defined contribution plan are established
and may be amended by the City Commission as determined by negotiated labor contracts. The City is
required to contribute 3 percent to 12.5 percent of a qualified employees’ annual compensation each year
depending on employee group. Qualified employees are required to contribute 0 percent to 6 percent of
annual compensation depending on employee group. For the year ended June 30, 2019, City and employee
contributions were $628,802 and $307,981, respectively.
Employees are immediately vested in their own contributions and earnings on those contributions and become
vested in City contributions and earnings on City contributions by 20 percent for each full year of service,
leaving employees fully vested after five years of service. Nonvested City contributions are forfeited upon
termination of employment. Such forfeitures are used to cover a portion of the pension plan’s administrative
expenses. For the year ended June 30, 2019, forfeitures reduced the City’s pension expense by $54,132.
Deferred Compensation Plan
The City offers its employees a deferred compensation plan created in accordance with Internal Revenue
Code Section 457. The Plan, available to all full-time employees at their option, permits participants to defer
a portion of their salary until future years. Payments from the deferred compensation plan are not available to
participants until termination, retirement, death, or unforeseeable emergency. Active participants are allowed
to borrow from their accumulated assets for limited purposes such as family education costs, medical costs, or
down payment for a new home. The City must approve program loans.
The Plan has created a trust for the exclusive benefit of the Plan’s participants and beneficiaries under rules
provided by Internal Revenue Code Section 401(f).
NOTE L—OTHER POSTEMPLOYMENT BENEFITS
Retiree Healthcare Plan
Plan Description
The City’s defined benefit OPEB Plan, the City of Muskegon Retiree Healthcare Plan (OPEB Plan),
provides healthcare benefits to certain employees and their spouses upon retirement. The Plan is a defined
benefit plan administered by the City Commission. The benefits are provided under collective bargaining
agreements and at the discretion of the City Commission. The OPEB Plan does not issue a publicly
available report.
75
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE L—OTHER POSTEMPLOYMENT BENEFITS—CONTINUED
Retiree Healthcare Plan—Continued
Benefits Provided
The OPEB Plan provides medical and dental insurances for eligible retirees and spouses who meet the
following criteria:
Normal
Vesting Retirement Early
Eligibility Period Age Retirement
Non-Union General Hired before January 1, 2011 5 years 60 55/25
Non-Union Police Hired before January 1, 2011 10 years 55 53/25
Clerical Hired before January 1, 2009 10 years 60 55/30
Department of Public Works Hired before January 1, 2011 10 years 60 55/30
Police Patrol Hired before January 1, 2012 10 years 55 50/25
Police Command Hired before January 1, 2010 10 years 55 50/25
Fire Hired before January 1, 2010 10 years 55 53/25
Benefits are provided through a third party insurer.
Employees Covered by Benefit Terms
At the December 31, 2017 valuation, the following employees were covered the benefit terms:
Inactive employees or beneficiaries currently receiving benefits 283
Inactive employees entitled to but not yet receiving benefits 44
Covered spouses/dependents 124
Active employees 140
Total employees covered by OPEB Plan 591
Contributions
The OPEB Plan’s funding policy is that the City will make contributions equal to the recommended annual
contribution. There are no long-term contracts for contributions to the OPEB Plan. The OPEB Plan has no
legally required reserves. For the year ended June 30, 2019, the City made payments for postemployment
healthcare benefits of $1,260,887.
Net OPEB Liability
The City’s net OPEB liability was measured as of December 31, 2018, and the total OPEB liability used to
calculate the net OPEB liability was determined by an actuarial valuation as December 31, 2017, which was
rolled forward to December 31, 2018.
76
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE L—OTHER POSTEMPLOYMENT BENEFITS—Continued
Retiree Healthcare Plan—Continued
Actuarial Assumptions
The total OPEB liability in the December 31, 2017 actuarial valuation, rolled forward to the measurement
date, was determined using the following actuarial assumptions, applied to all periods included in the
measurement:
Inflation 2.5 percent
Salary increases 2.0 percent
Investment rate of return 7.75 percent (including inflation), net of administrative
and investment expenses
Healthcare cost trend rates Pre-65: 8.5 percent graded down to 4.5 percent by .25 percent per year
Post-65: 7.5 percent graded down to 4.5 percent by .25 percent per year
Mortality
Mortality rates for police and fire were as set forth in the Public Safety 2010 Employee and Healthy Retiree,
headcount weighted, MP-2018 improvement scale. Mortality rates for others were as set forth in the Public
General 2010 Employee and Healthy Retiree, headcount weighted, MP-2018 improvement scale.
Investment Rate of Return
The long-term rate of return on retirement plan investments was determined using a building-block method
in which best-estimate ranges of expected future real rates of return (expected returns, net of OPEB Plan
expense and inflation) are developed for each major asset class. These ranges are combined to produce the
long-term expected rate of return by weighting the expected future real rates of return by the target asset
allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for
each major asset class included in the OPEB Plan’s target asset allocation as of December 31, 2017 actuarial
valuation, rolled forward to the measurement date, are summarized in the following table:
Target Long-Term Long-Term
Allocation Expected Expected
Target Gross Rate of Gross Rate Inflation Real Rate
Asset Class Allocation Return of Return Assumption of Return
Global equity 55.5% 8.65% 4.80% 2.50% 3.42%
Global fixed income 18.5% 3.76% 0.70% 2.50% 0.23%
Real assets 13.5% 9.72% 1.31% 2.50% 0.97%
Diversifying strategies 12.5% 7.50% 0.94% 2.50% 0.63%
Total 100.0% 7.75% 5.25%
Discount Rate
The discount rate used to measure the total OPEB liability was 7.75%. The employer is assumed to
make annual contributions to the trust contributions equal to the actuarially determined contribution in
future years. Given this assumption, the assets are projected to be sufficient to make projected future
benefit payments of current plan members. For projected benefits that are covered by projected assets,
the long-term expected rate was used to discount the projected benefits. From the year that benefit
payments were not projected to be covered by the projected assets (the “depletion/crossover date”),
projected benefits were discounted at a discount rate reflecting a 20-year AA/Aa tax-exempt municipal
bond yield. A single equivalent discount rate that yields the same present value of benefits is calculated.
This discount rate is used to determine the total OPEB liability. The discount rate used for December
31, 2017 was 7.75%.
77
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE L—OTHER POSTEMPLOYMENT BENEFITS—Continued
Retiree Healthcare Plan—Continued
Changes in the Net OPEB Liability
Increase (Decrease)
Plan Net OPEB
Total OPEB Fiduciary Liability
Liability (a) Position (b) (a)-(b)
Balance at January 1, 2018 $ 26,648,337 $ 20,779,578 $ 5,868,759
Changes for the year
Service cost 178,243 - 178,243
Interest 2,035,720 - 2,035,720
Difference between expected and
actual experience (992,432) - (992,432)
Changes of assumptions 2,349,210 - 2,349,210
Contributions - employer - 671,363 (671,363)
Net investment income - (699,603) 699,603
Administrative expenses - (53,927) 53,927
Benefit payments including refund of
employee contributions (1,118,442) (1,118,442) -
Net changes 2,452,299 (1,200,609) 3,652,908
Balance at December 31, 2018 $ 29,100,636 $ 19,578,969 $ 9,521,667
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate
The following presents the net OPEB liability of the City, calculated using the discount rate of 7.75 percent,
as well as what the City's net OPEB liability would be if it were calculated using a discount rate that is 1-
percentage-point lower (6.75 percent) or 1-percentage-point higher (8.75 percent) than the current rate:
1% Decrease Current Discount 1% Increase
(6.75%) Rate (7.75%) (8.75%)
City's net OPEB liability $ 12,438,007 $ 9,521,667 $ 7,056,199
78
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE L—OTHER POSTEMPLOYMENT BENEFITS—Continued
Retiree Healthcare Plan—Continued
Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rate
The following presents the net OPEB liability of the City, calculated using the healthcare cost trend rate for
pre-65 of 8 percent, decreasing to 4.5 percent and post-65 of 7.5 percent decreasing to 4.5 percent, as well as
what the City’s net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-
percentage-point lower (7 percent decreasing to 3.5 percent or 6.5 percent decreasing to 3.5 percent) or 1-
percentage-point higher (9 percent decreasing to 5.5 percent or 8.5 percent decreasing to 5.5 percent) than
the current rate:
Current Healthcare
1% Decrease Cost Trend Rate 1% Increase
City's net OPEB liability $ 6,751,322 $ 9,521,667 $ 12,803,283
OPEB Plan Fiduciary Net Position
Detailed information about the OPEB Plan’s fiduciary net position is not available in a separately issued
financial report. For purposes of measuring the net OPEB liability, deferred outflows of resources and
deferred inflows of resources related to OPEB, and OPEB expenses, information about the fiduciary net
position of the OPEB Plan and additions to/deductions from the City’s fiduciary net position have been
determined on the same basis as they are reported by the City. For these purposes, benefit payments
(including refunds of employee contributions) are recognized when due and payable in accordance with the
benefit terms. Investments are reported at fair value.
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
For the year ended June 30, 2019, the City recognized OPEB expense of $1,858,653. At June 30, 2019, the
City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the
following sources:
Deferred Outflows of Deferred Inflows of
Resources Resources
Differences in experience $ - $ 368,261
Changes in assumptions 871,719 -
Net difference between projected
and actual net investment income 1,443,458 -
Contributions subsequent to the
measurement date* 429,148 -
Total $ 2,744,325 $ 368,261
*The amount reported as deferred outflows of resources resulting from contributions subsequent to the
measurement date will be recognized as a reduction in the net pension liability for the year ending June 30,
2020.
79
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE L—OTHER POSTEMPLOYMENT BENEFITS—Continued
Retiree Healthcare Plan—Continued
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to
OPEB—Continued
Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will
be recognized in OPEB expense as follows:
Year Ending
June 30, Amount
2020 $ 831,904
2021 328,447
2022 328,447
2023 458,118
Payables to the OPEB Plan
At June 30, 2019, the City did not have a payable to the OPEB Plan.
Healthcare Savings Plan
The City also maintains a defined contribution OPEB Plan (Health Care Savings Plan or HCSP) which
provides certain health care benefits to plan member and legal dependents upon termination of employment.
The HCSP covers all City employees hired after July 1, 2012 in lieu of the traditional retiree healthcare plan.
The City participates in the Municipal Employees Retirement System (MERS) of Michigan. MERS is an
agent multiple employer, statewide public employee defined contribution OPEB Plan established by the
Michigan Legislature under Public Act 135 of 1945 and administered by a nine-member Retirement Board.
Public Act 427 of 1984, as amended, establishes and amends the benefit provisions of the participants in
MERS. MERS issues a publicly available financial report that includes financial statements and required
supplementary information. This report may be obtained accessing the MERS website at
www.mersofmich.com.
Depending on employee group, the Plan covers all qualified City employees hired after January 2009 to
December 2012 in lieu of the traditional retiree healthcare plan. The City is required to contribute 1 or 2
percent of a qualified employees’ annual compensation each year depending on employee group. Qualified
employees are also required to contribute 1 or 2 percent of annual compensation. Qualified employees are
also required to contribute 1 or 2 percent of annual compensation. Additionally, some employees, regardless
of hire date, may make voluntary contributions to the HCSP.
Employees are immediately vested in all contributions and earnings of those contributions.
For the year ended June 30, 2019, City and employee contributions were $118,996 and $162,069,
respectively.
80
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
NOTE M—UPCOMING ACCOUNTING PRONOUNCEMENTS
GASB Statement 84—Fiduciary Activities was issued by the GASB in January 2017 and will be effective for
the City’s 2020 fiscal year. The objective of this Statement is to improve guidance regarding the
identification of fiduciary activities for accounting and financial reporting purposes and how those activities
should be reported. This Statement establishes criteria for identifying fiduciary activities for all state and
local governments. The focus on the criteria generally is on (1) whether a government is controlling the
assets of the fiduciary activity and (2) the beneficiaries with whom a fiduciary relationship exists. An
activity meeting the criteria should be reported in a fiduciary fund in the basic financial statements.
GASB Statement 87—Leases was issued by the GASB in June 2017 and will be effective for the City’s 2021
fiscal year. The objective of this Statement is to better meet the information needs of financial statement
users by improving accounting and financial reporting for leases by governments. This Statement increases
the usefulness of governments' financial statements by requiring recognition of certain lease assets and
liabilities for leases that previously were classified as operating leases and recognized as inflows of resources
or outflows of resources based on the payment provisions of the contract. It establishes a single model for
lease accounting based on the foundational principle that leases are financings of the right to use an
underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible
right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of
resources, thereby enhancing the relevance and consistency of information about governments' leasing
activities.
NOTE N—SUBSEQUENT EVENTS
On August 30, 2019, the City obtained a State Revolving Fund (SRF) Loan for the Sewer Fund of
$11,500,000 and a Drinking Water Revolving Fund (DWRF) Loan for the Water Fund of $2,000,000.
On October 29, 2019, the City issued Capital Improvement Bonds of $19,420,000 for the construction of a
convention center and a Capital Improvement Note of $3,000,000 for various housing projects in the Nelson
neighborhood.
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82
REQUIRED SUPPLEMENTARY INFORMATION
83
City of Muskegon
BUDGETARY COMPARISON SCHEDULE
General Fund
For the year ended June 30, 2019
(with comparative actual amounts for the year ended June 30, 2018)
2019 2018
Variance with
Final Budget-
Budgeted Amounts Positive
Original Final Actual (Negative) Actual
REVENUES
Taxes
City income taxes $ 8,600,000 $ 8,700,000 $ 8,691,673 $ (8,327) $ 8,758,674
Property taxes 7,462,325 7,110,078 7,168,126 58,048 7,439,738
Industrial facilities taxes 76,468 76,468 106,297 29,829 95,774
Payments in lieu of taxes 580,877 580,877 615,934 35,057 582,869
Total taxes 16,719,670 16,467,423 16,582,030 114,607 16,877,055
Licenses and permits
Business licenses 75,000 75,000 52,345 (22,655) 81,650
Liquor licenses 50,043 55,000 55,467 467 53,487
Marihuana facilities licenses 25,000 100,000 115,700 15,700 -
Cable TV fees 370,000 380,000 380,343 343 368,495
Rental property registration 353,500 367,500 363,915 (3,585) 369,509
Burial permits 80,000 80,000 68,275 (11,725) 82,645
Building permits 1,800,000 1,100,000 933,745 (166,255) 1,458,084
Electrical permits 220,000 180,000 169,690 (10,310) 225,271
Plumbing permits 80,000 80,000 102,101 22,101 85,789
Mechanical permits 130,000 130,000 137,826 7,826 146,354
Vacant building fees 75,000 40,000 72,665 32,665 94,315
Other inspections - 2,000 735 (1,265) -
Total licenses and permits 3,258,543 2,589,500 2,452,807 (136,693) 2,965,599
Intergovernmental revenues
Federal grants 40,000 40,000 57,894 17,894 23,988
State
Grants 715,000 826,000 862,839 36,839 837,603
State shared revenue 4,180,392 4,268,904 4,271,438 2,534 4,153,072
Total intergovernmental revenues - State 4,895,392 5,094,904 5,134,277 39,373 4,990,675
84
City of Muskegon
BUDGETARY COMPARISON SCHEDULE—CONTINUED
General Fund
For the year ended June 30, 2019
(with comparative actual amounts for the year ended June 30, 2018)
2019 2018
Variance with
Final Budget-
Budgeted Amounts Positive
Original Final Actual (Negative) Actual
Charges for services
Tax administration fees $ 327,000 $ 327,000 $ 340,217 $ 13,217 $ 331,723
Utility administration fees 310,000 310,000 310,000 - 310,000
Reimbursement for elections - - 13,455 13,455 100
Brownfield authority admin fee 162,000 162,000 162,000 - 154,800
Indirect cost reimbursements 1,119,973 1,119,973 1,114,735 (5,238) 1,027,986
Site plan review fee 6,000 6,000 6,900 900 6,800
Sale of cemetery lots 25,000 25,000 31,159 6,159 39,103
Police miscellaneous 136,638 141,638 143,322 1,684 140,223
Police impound fees 35,000 35,000 39,470 4,470 39,935
Landlord's alert fee 30,000 30,000 30,323 323 35,627
Fire protection - state property 74,000 81,750 81,766 16 74,342
Zoning fees 15,000 15,000 19,070 4,070 18,430
Muskegon Heights zoning 6,000 6,000 10,465 4,465 8,190
Clerk fees - 5,000 5,432 432 7,851
Clerk fees - passport fees 80,000 80,000 82,662 2,662 71,672
Tax abatement application fees 3,000 3,000 3,802 802 4,970
Treasurer fees 67,000 67,000 84,289 17,289 68,022
False alarm fees 3,500 9,000 10,365 1,365 9,540
Miscellaneous cemetery income 16,000 16,000 14,547 (1,453) 17,902
Fire miscellaneous 9,500 15,500 14,506 (994) 17,755
Sanitation stickers 271,100 276,100 249,043 (27,057) 238,312
Lot cleanup fees 48,000 39,500 35,697 (3,803) 59,452
Reimbursements - lot mowing and demolitions 5,000 5,000 1,067 (3,933) 7,376
Special events reimbursements 55,000 55,000 26,505 (28,495) 55,671
Recreation program fees 4,500 4,500 11,029 6,529 9,066
Total charges for services 2,812,211 2,834,961 2,841,826 6,865 2,754,848
Fines and forfeitures
Income tax - penalty and interest 200,000 200,000 207,424 7,424 229,678
Late fees on current taxes 20,000 20,000 16,790 (3,210) 15,942
Interest on late invoices 11,000 11,000 11,516 516 14,534
Parking fines 55,000 55,000 57,782 2,782 53,336
Court fines 115,000 130,000 137,732 7,732 120,989
Civil infractions 17,000 15,500 30,876 15,376 21,785
Total fines and forfeitures 418,000 431,500 462,120 30,620 456,264
Investment earnings and rental income
Interest income - 100,000 108,155 8,155 95,057
Net increase (decrease) in the fair value of investments - 300,000 344,122 44,122 (122,586)
City right of way rental 6,800 6,800 6,800 - 6,800
Fire station lease - Central Dispatch 30,000 50,000 45,292 (4,708) 30,528
Parking rentals 48,750 68,750 68,500 (250) 48,750
Great Lakes Naval Memorial lease 15,000 - - - -
McGraft Park rentals 70,000 97,000 96,084 (916) 63,510
Other park rentals 44,800 55,000 47,964 (7,036) 45,631
Total investment earnings and rental income 215,350 677,550 716,917 39,367 167,690
85
City of Muskegon
BUDGETARY COMPARISON SCHEDULE—CONTINUED
General Fund
For the year ended June 30, 2019
(with comparative actual amounts for the year ended June 30, 2018)
2019 2018
Variance with
Final Budget-
Budgeted Amounts Positive
Original Final Actual (Negative) Actual
Other
Police sale and auction proceeds $ 1,000 $ 1,000 $ - $ (1,000) $ -
CDBG program reimbursements 325,000 351,726 332,857 (18,869) 346,481
Fisherman's Landing reimbursement 17,500 17,500 - (17,500) -
Contributions 20,000 20,000 2,046 (17,954) 11,871
Contributions - Veteran's Park maintenance 18,500 18,500 - (18,500) -
Community Foundation for Muskegon County 10,000 10,000 24,892 14,892 9,772
Miscellaneous and sundry 83,000 85,381 100,106 14,725 85,676
Total other 475,000 504,107 459,901 (44,206) 453,800
Total revenues 28,874,166 28,679,945 28,747,772 67,827 28,729,919
EXPENDITURES
Current
Public representation services
City commission 91,290 91,290 88,892 2,398 77,876
City promotions and public relations 55,000 80,000 81,890 (1,890) 65,353
City manager 429,299 399,299 379,819 19,480 409,564
Contributions to outside agencies 430,173 430,173 384,968 45,205 489,687
City attorney 350,000 360,000 345,538 14,462 341,093
Total public representation services 1,355,762 1,360,762 1,281,107 79,655 1,383,573
Administrative services
City clerk 455,048 460,548 542,248 (81,700) 424,224
Civil service 198,440 206,990 195,275 11,715 113,554
Affirmative action - - 1,778 (1,778) 135
Total administrative services 653,488 667,538 739,301 (71,763) 537,913
Financial services
Finance administration 578,651 561,000 570,805 (9,805) 576,620
Assessing 332,000 332,000 335,977 (3,977) 329,708
Arena administration - - 13,510 (13,510) 15,487
Income tax administration 349,936 353,936 362,595 (8,659) 328,809
Information systems 489,914 579,914 550,516 29,398 444,386
City treasurer 567,034 567,734 561,463 6,271 496,235
Total financial services 2,317,535 2,394,584 2,394,866 (282) 2,191,245
Public safety
Police department 10,439,994 9,678,626 9,880,736 (202,110) 9,538,680
Fire department 3,431,866 3,925,000 3,989,048 (64,048) 3,930,210
Fire safety inspections 3,215,780 2,415,100 2,224,747 190,353 1,611,103
Total public safety 17,087,640 16,018,726 16,094,531 (75,805) 15,079,993
86
City of Muskegon
BUDGETARY COMPARISON SCHEDULE—CONTINUED
General Fund
For the year ended June 30, 2019
(with comparative actual amounts for the year ended June 30, 2018)
2019 2018
Variance with
Final Budget-
Budgeted Amounts Positive
Original Final Actual (Negative) Actual
Public works
Street lighting $ 490,000 $ 490,000 $ 551,818 $ (61,818) $ 529,471
Community event support 103,159 103,159 73,216 29,943 100,611
General sanitation 1,849,345 1,932,345 2,107,545 (175,200) 1,924,434
Storm water management 10,000 4,000 4,000 - 13,365
City hall maintenance 329,502 337,253 316,868 20,385 242,222
Cemeteries maintenance 428,582 428,582 440,130 (11,548) 420,155
Total public works 3,210,588 3,295,339 3,493,577 (198,238) 3,230,258
Community and economic development
Planning, zoning and economic development 574,189 417,648 376,679 40,969 434,867
Environmental services - - - - 1,094,602
Edison Landing subsidy 360,000 360,000 360,000 - 350,000
Downtown Development Authority subsidy - - - - 315,000
Total community and economic development 934,189 777,648 736,679 40,969 2,194,469
Culture and recreation
Parks maintenance 1,756,158 1,671,228 1,676,222 (4,994) 1,569,234
McGraft Park maintenance 87,576 87,576 133,573 (45,997) 96,916
General and inner city recreation programs - - 12,050 (12,050) 2,551
Forestry - - 92 (92) -
Graffiti removal - - - - 153
Parking operations - - 2,393 (2,393) 1,988
Farmers market and flea market - - 210 (210) 8
Total culture and recreation 1,843,734 1,758,804 1,824,540 (65,736) 1,670,850
Other governmental functions
Insurance premiums 268,695 287,041 292,037 (4,996) 294,675
Other 100,000 100,000 (10,326) 110,326 60,566
Total other governmental functions 368,695 387,041 281,711 105,330 355,241
Debt service
Principal 65,000 65,000 65,000 - 70,000
Interest and fees 164,750 164,750 165,851 (1,101) 167,081
Total debt service 229,750 229,750 230,851 (1,101) 237,081
Capital outlay 555,000 823,547 801,483 22,064 130,375
Total expenditures 28,556,381 27,713,739 27,878,646 (164,907) 27,010,998
Excess of revenues over (under) expenditures 317,785 966,206 869,126 (97,080) 1,718,921
87
City of Muskegon
BUDGETARY COMPARISON SCHEDULE—CONTINUED
General Fund
For the year ended June 30, 2019
(with comparative actual amounts for the year ended June 30, 2018)
2019 2018
Variance with
Final Budget-
Budgeted Amounts Positive
Original Final Actual (Negative) Actual
OTHER FINANCING SOURCES (USES)
Transfers in $ - $ - $ 5,989 $ 5,989 $ -
Transfers out (460,000) (695,000) (761,486) (66,486) (1,385,000)
Total other financing sources (uses) (460,000) (695,000) (755,497) (60,497) (1,385,000)
Net change in fund balance $ (142,215) $ 271,206 113,629 $ (157,577) 333,921
Fund balance at beginning of year 8,391,566 8,057,645
Fund balance at end of year $ 8,505,195 $ 8,391,566
Note: Both budgets and actual figures are prepared in accordance with generally accepted accounting principles.
88
City of Muskegon
BUDGETARY COMPARISON SCHEDULE
Major Street and Trunkline Fund
For the year ended June 30, 2019
Variance with
Final Budget-
Budgeted Amounts Positive
Original Final Actual (Negative)
REVENUES
Intergovernmental revenues
Federal $ 880,000 $ - $ 627,218 $ 627,218
State 4,196,906 4,762,671 4,544,248 (218,423)
Charges for services - - 21,582 21,582
Investment earnings 10,000 10,000 15,628 5,628
Other 71,000 100,000 92,669 (7,331)
Total revenues 5,157,906 4,872,671 5,301,345 428,674
EXPENDITURES
Current
Highways, streets and bridges 6,989,695 7,079,923 5,601,688 1,478,235
Debt service
Principal 210,000 210,000 210,000 -
Interest and fees 25,000 25,000 23,273 1,727
Total expenditures 7,224,695 7,314,923 5,834,961 1,479,962
Net change in fund balance $ (2,066,789) $ (2,442,252) (533,616) $ 1,908,636
Fund balance at July 1, 2018 3,728,340
Fund balance at June 30, 2019 $ 3,194,724
Note: Both budgets and actual figures are prepared in accordance with generally accepted accounting principles.
89
City of Muskegon
Required Supplemental Information
SCHEDULE OF CHANGES IN NET PENSION LIAIBILITY AND RELATED RATIOS
Last Ten Fiscal Years (Amounts were determined as of December 31 of each fiscal year)
2018 2017 2016 2015 2014
TOTAL PENSION LIABILITY
Service cost $ 806,565 $ 1,018,541 $ 1,130,408 $ 1,194,909 $ 1,190,507
Interest 8,345,836 8,429,233 8,345,661 8,034,035 7,817,503
Differences between expected and actual experience 3,642,392 1,326,122 (1,697,797) (647,017) -
Changes in assumptions - - - 4,779,382 -
Benefit payments, including refunds of employee contributions (7,512,608) (6,937,544) (6,417,825) (6,363,249) (6,407,932)
Other changes (229,967) (4,485,289) - - -
Net change in total pension liability 5,052,218 (648,937) 1,360,447 6,998,060 2,600,078
Total pension liability at beginning of year 107,675,977 108,324,914 106,964,467 99,966,407 97,366,329
Total pension liability at end of year (a) $ 112,728,195 $ 107,675,977 $ 108,324,914 $ 106,964,467 $ 99,966,407
PLAN FIDUCIARY NET POSITION
Contributions-employer $ 2,671,175 $ 1,801,016 $ 1,996,512 $ 1,420,218 $ 1,166,652
90
Contributions-employee 848,562 687,391 563,898 566,045 564,409
Net investment income (3,452,538) 10,964,115 8,890,951 (1,237,895) 5,282,031
Benefit payments, including refunds or employee contributions (7,512,608) (6,937,544) (6,417,825) (6,363,249) (6,407,932)
Administrative expense (173,509) (173,921) (175,718) (183,599) (193,139)
Net change in plan fiduciary net position (7,618,918) 6,341,057 4,857,818 (5,798,480) 412,021
Plan fiduciary net position at beginning of year 90,759,017 84,417,960 79,560,142 85,358,622 84,946,601
Plan fiduciary net position at end of year (b) $ 83,140,099 $ 90,759,017 $ 84,417,960 $ 79,560,142 $ 85,358,622
City's net pension liability at end of year (a)-(b) $ 29,588,096 $ 16,916,960 $ 23,906,954 $ 27,404,325 $ 14,607,785
Plan fiduciary net position as a percentage of the total pension liability 73.75% 84.29% 77.93% 74.38% 85.39%
Covered payroll $ 6,565,169 $ 7,645,789 $ 8,460,078 $ 9,108,948 $ 9,171,511
City's net pension liability as a percentage of covered payroll 450.68% 221.26% 282.59% 300.85% 159.27%
Notes to Schedule
Additional actuarial data is not available and will be provided in subsequent years.
City of Muskegon
Required Supplemental Information
PENSION SYSTEM SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years
Period Ended
Year Ended June 30 June 30*
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
Actuarially determined contribution $ 1,902,696 $ 1,798,140 $ 1,897,158 $ 1,546,440 $ 1,293,996 $ 1,043,040 $ 1,035,772 $ 1,160,870 $ 1,211,612 $ 688,832
Contributions in relation to the actuarially
determined contribution 2,218,663 1,964,214 2,276,200 1,753,272 1,293,996 1,543,040 1,035,772 1,160,870 2,211,612 688,832
Contribution deficiency (excess) $ (315,967) $ (166,074) $ (379,042) $ (206,832) $ - $ (500,000) $ - $ - $ (1,000,000) $ -
Covered payroll $ 6,561,169 $ 7,645,789 $ 8,460,078 $ 9,108,948 $ 9,171,511 $ 9,198,938 $10,185,425 $10,650,990 $ 11,533,186 $12,613,654
Contributions as percentage of covered
payroll 33.8% 25.7% 26.9% 19.2% 14.1% 16.8% 10.2% 10.9% 19.2% 5.5%
Notes to Schedule
Valuation Date:
Actuarially determined contribution rates are calculated as of December 31, two years prior to the end of the fiscal year in which contributions are reported.
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age
91
Amortization method Level percentage of payroll, Closed
Remaining amortization period 5 to 14 years depending on division
Asset valuation method 5-year smoothed market
Inflation 2.5 percent
Salary increases 3.75 percent
Investment rate of return 7.75 percent, net of investment and administrative expenses
Retirement age Varies depending on plan adoption
Mortality 50 percent Female/50 percent Male RP-2014 Group Annuity Mortality Table
* The City changed its fiscal year end from December 31 to June 30. 2010 figures are for six months.
City of Muskegon
REQUIRED SUPPLEMENTARY INFORMATION
RETIREE HEALTHCARE SYSTEM SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS
Last Ten Fiscal Years (Amounts were determined as of December 31 of each fiscal year)
2018 2017
TOTAL OPEB LIABILITY
Service cost $ 178,243 $ 165,423
Interest 2,035,720 1,954,979
Differences between expected and actual experience (992,432) -
Changes of assumptions 2,349,210 -
Benefit payments, including refunds of employee contributions (1,118,442) (1,064,376)
Net change in total OPEB liability 2,452,299 1,056,026
Total OPEB liability at beginning of year 26,648,337 25,592,311
Total OPEB liability at end of year (a) $ 29,100,636 $ 26,648,337
PLAN FIDUCIARY NET POSITION
92
Contributions-employer $ 671,363 $ 736,039
Net investment income (699,603) 2,110,019
Benefit payments, including refunds or employee contributions (1,118,442) (1,064,376)
Administrative expense (53,927) (52,313)
Net change in plan fiduciary net position (1,200,609) 1,729,369
Plan fiduciary net position at beginning of year 20,779,578 19,050,209
Plan fiduciary net position at end of year (b) $ 19,578,969 $ 20,779,578
City's net OPEB liability at end of year (a)-(b) $ 9,521,667 $ 5,868,759
Plan fiduciary net position as a percentage of the total OPEB liability 67.28% 77.98%
Covered payroll Not Available $ 8,095,840
City's net OPEB liability as a percentage of covered payroll Not Available 72.49%
Notes to Schedule
Additional actuarial data is not available and will be provided in subsequent years.
City of Muskegon
REQUIRED SUPPLEMENTARY INFORMATION
RETIREE HEALTHCARE SYSTEM SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years (Amounts were determined as of June 30 of each fiscal year)
Period Ended
Year Ended June 30 June 30*
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
Actuarially determined contribution $ 1,470,562 $ 956,532 $ 606,506 $ 639,428 $ 659,451 $ 696,634 $ 728,863 $ 832,891 $ 1,079,000 $ 530,000
Contributions in relation to the actuarially
determined contribution 1,260,887 687,642 606,506 639,428 659,451 696,634 728,863 832,891 1,079,000 530,000
Contribution deficiency (excess) $ 209,675 $ 268,890 $ - $ - $ - $ - $ - $ - $ - $ -
Covered payroll Not Available $ 8,095,840 $10,830,000 $10,830,000 $10,005,000 $10,005,000 $12,365,000 $12,365,000 $13,293,000 $13,293,000
Contributions as percentage of covered
payroll Not Available 8.5% 5.6% 5.9% 6.6% 7.0% 5.9% 6.7% 8.1% 4.0%
Notes to Schedule
Valuation Date:
Actuarially determined contribution rates are calculated as of December 31, 2017 and rolled forward to December 31, 2018.
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age normal (level percentage of compensation)
93
Amortization method Level percentage of payroll, Closed
Remaining amortization period 8 years
Asset valuation method Equal to market value of assets
Inflation 2.5 percent
Salary increases 3.5 percent
Investment rate of return 7.75 percent (including inflation), net of administrative and investment expenses
Retirement age 55 - 60 years of age
Mortality Mortality rates for police and fire were as set forth in the Public safety 2010 Employee and Healthy Retiree, headcount weighted, MP 2018 improvement scale.
Morality rates for others were as set forth in the Public General 2010 Employee and Healthy Retiree, headcount weighted, MP-2018 improvement scale.
* The City changed its fiscal year end from December 31 to June 30. 2010 figures are for six months.
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94
OTHER SUPPLEMENTAL INFORMATION
95
DESCRIPTION OF
OTHER GOVERNMENTAL FUNDS
Special Revenue Funds
The special revenue funds are used to account for the proceeds of special revenue sources that are legally
restricted to expenditures for specific purposes.
Local Street – to account for gas and weight allocations to the City by the Michigan Department of Transportation
for construction and maintenance of local streets within the City.
L.C. Walker Arena – to account for revenues received for the operation and maintenance of L.C. Walker Arena.
Criminal Forfeitures – to account for receipts generated through the sale of assets seized through criminal court
proceedings.
Downtown BID – to account for the collection of special assessment revenue in the downtown to be used for
improvement and maintenance of downtown public infrastructure.
Tree Replacement – to account for contributions and other revenues earmarked for tree replacement throughout
the City.
Farmers Market and Kitchen 242 – to account for revenues received for the City’s Farmers Market and Kitchen
242.
Capital Projects Funds
Capital projects funds are used to account for financial resources to be used for the acquisition or construction of
major capital assets other than those financed by proprietary funds and trust funds.
Public Improvement – to account for grants, private contributions, sale of property and other resources used to
finance various capital projects.
Michcon Remediation – to account for reimbursements received from Michcon Gas Company for environmental
remediation of their former downtown site.
EDC Revolving Loan – to account for funds received upon repayment of Urban Development Action Grant loans
and subsequently reloaned to small business enterprises.
Community Development Block Grant – to account for categorical grants received from the U. S. Department of
Housing and Urban Development for the construction of major city public improvements and the rehabilitation of
residential housing and other qualifying expenditures.
96
DESCRIPTION OF
OTHER GOVERNMENTAL FUNDS—CONTINUED
Capital Projects Funds—Continued
HOME Rehabilitation – to account for grant revenues received from the U. S. Department of Housing and Urban
Development for the purpose of providing housing assistance to low and moderate income households in the City.
Lead Abatement – to account for grant revenues received from the U. S. Department of Health and Human
Services for the purpose of abatement of lead from homes in the City.
Senior Millage – to account for proceeds from the County millage for senior services that were distributed to the
City for specific projects.
Economic Development - Sappi – to account for funds contributed to the City for economic redevelopment of
vacated industrial property sites.
Permanent Funds
Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not
principal, may be used for purposes that support the reporting government’s programs.
Cemetery Perpetual Care – to account for charges for services collected and investment income earned and to
account for transfers to the General Fund to partially cover cemetery care expenses.
97
City of Muskegon
COMBINING BALANCE SHEET
Other Governmental Funds
June 30, 2019
Other Other Permanent
Total Other Special Capital Fund -
Governmental Revenue Projects Cemetery
Funds Funds Funds Perpetual Care
ASSETS
Cash and investments $ 2,967,912 $ 1,172,856 $ 1,394,313 $ 400,743
Assets managed by others 1,234,689 - 17,900 1,216,789
Receivables
Accounts and loans (net of allowance for uncollectibles) 1,032,316 356,959 673,856 1,501
Special assessments 2,072 2,072 - -
Due from other governmental units 460,697 182,913 277,784 -
Advances to component units 284,251 - - 284,251
Prepaid items 33,524 33,524 - -
Total assets $ 6,015,461 $ 1,748,324 $ 2,363,853 $ 1,903,284
LIABILITIES
Accounts payable $ 306,754 $ 243,099 $ 63,655 $ -
Accrued liabilities 28,461 19,802 8,659 -
Due to other governmental units 135 - 135 -
Due to other funds 390,487 229,130 161,357 -
Unearned revenues - unused Farmers Market tokens 106,366 106,366 - -
Unearned revenues - expenditure-driven grants 317,356 - 317,356 -
Total liabilities 1,149,559 598,397 551,162 -
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - special assessments 2,072 2,072 - -
FUND BALANCES
Nonspendable
Prepaid items 33,524 33,524 - -
Perpetual care 1,567,180 - - 1,567,180
Restricted
Highways, streets and bridges 932,055 932,055 - -
Law enforcement 36,337 36,337 - -
Downtown BID 137,794 137,794 - -
Perpetual care 336,104 - - 336,104
Other purposes 8,145 8,145 - -
Assigned for capital projects and public improvements 1,812,691 - 1,812,691 -
Total fund balances 4,863,830 1,147,855 1,812,691 1,903,284
Total liabilities, deferred inflows of
resources and fund balances $ 6,015,461 $ 1,748,324 $ 2,363,853 $ 1,903,284
98
City of Muskegon
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
Other Governmental Funds
For the year ended June 30, 2019
Other Other Permanent
Total Other Special Capital Fund -
Governmental Revenue Projects Cemetery
Funds Funds Funds Perpetual Care
REVENUES
Intergovernmental revenues
Federal $ 1,035,785 $ - $ 1,035,785 $ -
State 1,212,348 1,212,348 - -
Local 1,014,500 - 1,014,500 -
Charges for services 1,567,011 1,497,098 39,654 30,259
Fines and forfeitures 26,458 26,458 - -
Investment earnings 25,366 5,231 8,097 12,038
Income from assets managed by others 38,668 - 3,213 35,455
Other 1,022,239 458,219 564,020 -
Total revenues 5,942,375 3,199,354 2,665,269 77,752
EXPENDITURES
Current
Public safety 36,665 36,665 - -
Public works 169,238 169,238 - -
Highways, streets and bridges 1,691,544 1,691,544 - -
Culture and recreation 2,080,437 2,080,437 - -
Capital outlay 4,982,715 1,116 4,981,599 -
Total expenditures 8,960,599 3,979,000 4,981,599 -
Excess of revenues over (under) expenditures (3,018,224) (779,646) (2,316,330) 77,752
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets 1,541,041 - 1,541,041 -
Transfers in 1,204,247 761,486 442,761 -
Transfers out (442,761) - (442,761) -
Total other financing sources (uses) 2,302,527 761,486 1,541,041 -
Net change in fund balances (715,697) (18,160) (775,289) 77,752
Fund balances at July 1, 2018 5,579,527 1,166,015 2,587,980 1,825,532
Fund balances at June 30, 2019 $ 4,863,830 $ 1,147,855 $ 1,812,691 $ 1,903,284
99
City of Muskegon
COMBINING BALANCE SHEET
Other Special Revenue Funds
June 30, 2019
Total Other Farmers
Special Revenue Local L.C. Walker Criminal Downtown Tree Market and
Funds Street Arena Forfeitures BID Replacement Kitchen 242
ASSETS
Cash and investments $ 1,172,856 $ 927,310 $ - $ 36,337 $ 155,839 $ 1,921 $ 51,449
Receivables
Accounts 356,959 7,550 273,223 - - - 76,186
Special assessments 2,072 2,072 - - - - -
Due from other governmental units 182,913 182,913 - - - - -
Prepaid items 33,524 6,888 26,636 - - - -
Total assets $ 1,748,324 $ 1,126,733 $ 299,859 $ 36,337 $ 155,839 $ 1,921 $ 127,635
LIABILITIES
Accounts payable $ 243,099 $ 171,758 $ 39,802 $ - $ 18,045 $ - $ 13,494
Accrued liabilities 19,802 13,960 4,291 - - - 1,551
Due to other funds 229,130 - 229,130 - - - -
100
Unearned revenues - unused Farmers Market tokens 106,366 - - - - - 106,366
Total liabilities 598,397 185,718 273,223 - 18,045 - 121,411
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - special assessments 2,072 2,072 - - - - -
FUND BALANCES
Nonspendable - prepaid items 33,524 6,888 26,636 - - - -
Restricted
Highways, streets and bridges 932,055 932,055 - - - - -
Law enforcement 36,337 - - 36,337 - - -
Downtown BID 137,794 - - - 137,794 - -
Other purposes 8,145 - - - - 1,921 6,224
Total fund balances 1,147,855 938,943 26,636 36,337 137,794 1,921 6,224
Total liabilities, deferred inflows of
resources and fund balances $ 1,748,324 $ 1,126,733 $ 299,859 $ 36,337 $ 155,839 $ 1,921 $ 127,635
City of Muskegon
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
Other Special Revenue Funds
For the year ended June 30, 2019
Total Other Farmers
Special Revenue Local L.C. Walker Criminal Downtown Tree Market and
Funds Street Arena Forfeitures BID Replacement Kitchen 242
REVENUES
Intergovernmental revenues - State $ 1,212,348 $ 1,212,348 $ - $ - $ - $ - $ -
Charges for services 1,497,098 41,330 1,306,297 - - - 149,471
Fines and forfeitures 26,458 - - 26,458 - - -
Investment earnings 5,231 4,215 - 206 598 5 207
Other 458,219 208,109 7,413 - 170,645 10,000 62,052
Total revenues 3,199,354 1,466,002 1,313,710 26,664 171,243 10,005 211,730
EXPENDITURES
Current
Public safety 36,665 - - 36,665 - - -
Public works 169,238 - - - 169,238 - -
Highways, streets and bridges 1,691,544 1,691,544 - - - - -
101
Culture and recreation 2,080,437 - 1,805,697 - - 9,437 265,303
Capital outlay 1,116 - 1,116 - - - -
Total expenditures 3,979,000 1,691,544 1,806,813 36,665 169,238 9,437 265,303
Excess of revenues over (under) expenditures (779,646) (225,542) (493,103) (10,001) 2,005 568 (53,573)
OTHER FINANCING SOURCES
Transfers in 761,486 250,000 476,486 - - - 35,000
Net change in fund balances (18,160) 24,458 (16,617) (10,001) 2,005 568 (18,573)
Fund balances at July 1, 2018 1,166,015 914,485 43,253 46,338 135,789 1,353 24,797
Fund balances at June 30, 2019 $ 1,147,855 $ 938,943 $ 26,636 $ 36,337 $ 137,794 $ 1,921 $ 6,224
City of Muskegon
BUDGETARY COMPARISON SCHEDULE
Other Special Revenue Funds
For the year ended June 30, 2019
Local Street L.C. Walker Arena
Variance - Variance -
Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative)
REVENUES
Intergovernmental revenues - State $ 1,194,979 $ 1,212,348 $ 17,369 $ - $ - $ -
Charges for services 20,000 41,330 21,330 1,195,000 1,306,297 111,297
Investment earnings 3,500 4,215 715 - - -
Other 2,000 208,109 206,109 5,000 7,413 2,413
Total revenues 1,220,479 1,466,002 245,523 1,200,000 1,313,710 113,710
EXPENDITURES
Current
Highways, streets and bridges 1,795,119 1,691,544 103,575 - - -
102
Culture and recreation - - - 1,582,871 1,805,697 (222,826)
Capital outlay - - - 70,000 1,116 68,884
Total expenditures 1,795,119 1,691,544 103,575 1,652,871 1,806,813 (153,942)
Excess of revenues over (under) expenditures (574,640) (225,542) 349,098 (452,871) (493,103) (40,232)
OTHER FINANCING SOURCES
Transfers in 250,000 250,000 - 400,000 476,486 76,486
Net change in fund balances $ (324,640) 24,458 $ 349,098 $ (52,871) (16,617) $ 36,254
Fund balances at July 1, 2018 914,485 43,253
Fund balances at June 30, 2019 $ 938,943 $ 26,636
City of Muskegon
BUDGETARY COMPARISON SCHEDULE─CONTINUED
Other Special Revenue Funds
For the year ended June 30, 2019
Criminal Forfeitures Downtown BID
Variance - Variance -
Final Positive Final Positive
budget Actual (Negative) Budget Actual (Negative)
REVENUES
Fines and forfeitures $ 1,000 $ 26,458 $ 25,458 $ - $ - $ -
Investment earnings 400 206 (194) - 598 598
Other - - - 161,647 170,645 8,998
Total revenues 1,400 26,664 25,264 161,647 171,243 9,596
EXPENDITURES
Current
Public safety 50,000 36,665 13,335 - - -
Public works - - - 161,647 169,238 (7,591)
103
Total expenditures 50,000 36,665 13,335 161,647 169,238 (7,591)
Net change in fund balances $ (48,600) (10,001) $ 38,599 $ - 2,005 $ 2,005
Fund balance at July 1, 2018 46,338 135,789
Fund balance at June 30, 2019 $ 36,337 $ 137,794
City of Muskegon
BUDGETARY COMPARISON SCHEDULE─CONTINUED
Other Special Revenue Funds
For the year ended June 30, 2019
Tree Replacement Farmers Market and Kitchen 242
Variance - Variance -
Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative)
REVENUES
Charges for services $ 5,000 $ - $ (5,000) $ 175,483 $ 149,471 $ (26,012)
Investment earnings - 5 5 200 207 7
Other - 10,000 10,000 75,021 62,052 (12,969)
Total revenues 5,000 10,005 5,005 250,704 211,730 (38,974)
EXPENDITURES
Current
Culture and recreation 5,000 9,437 (4,437) 252,614 265,303 (12,689)
104
Excess of revenues over (under) expenditures - 568 568 (1,910) (53,573) (51,663)
OTHER FINANCING SOURCES
Transfers in - - - 35,000 35,000 -
Net change in fund balances $ - 568 $ 568 $ 33,090 (18,573) $ (51,663)
Fund balance at July 1, 2018 1,353 24,797
Fund balance at June 30, 2019 $ 1,921 $ 6,224
City of Muskegon
COMBINING BALANCE SHEET
Other Capital Projects Funds
June 30, 2019
Total Other EDC Community Economic
Capital Projects Public Michcon Revolving Development HOME Lead Senior Development -
Funds Improvement Remediation Loan Block Grant Rehabilitation Abatement Millage Sappi
ASSETS
Cash and investments $ 1,394,313 $ 214,693 $ 225,282 $ 907,610 $ - $ 46,728 $ - $ - $ -
Assets managed by others 17,900 17,900 - - - - - - -
Receivables
Accounts and loans (net of
allowance for uncollectibles) 673,856 287,784 - 288,627 5,500 91,945 - - -
Due from other governmental units 277,784 - - - 143,107 94,940 36,712 3,025 -
Total assets $ 2,363,853 $ 520,377 $ 225,282 $ 1,196,237 $ 148,607 $ 233,613 $ 36,712 $ 3,025 $ -
LIABILITIES
Accounts payable $ 63,655 $ 44,429 $ - $ - $ 16,047 $ 295 $ 2,884 $ - $ -
Accrued liabilities 8,659 - - - 5,695 603 1,682 679 -
Due to other governmental units 135 - - - - 135 - - -
Due to other funds 161,357 - - - 126,865 - 32,146 2,346 -
Unearned revenues - expenditure-driven grants 317,356 317,356 - - - - - - -
Total liabilities 551,162 361,785 - - 148,607 1,033 36,712 3,025 -
FUND BALANCES
105
Assigned for capital projects and public improvements 1,812,691 158,592 225,282 1,196,237 - 232,580 - - -
Total liabilities, deferred inflows of
resources and fund balances $ 2,363,853 $ 520,377 $ 225,282 $ 1,196,237 $ 148,607 $ 233,613 $ 36,712 $ 3,025 $ -
City of Muskegon
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
Other Capital Projects Funds
For the year ended June 30, 2019
Total Other EDC Community Economic
Capital Projects Public Michcon Revolving Development HOME Lead Senior Development -
Funds Improvement Remediation Loan Block Grant Rehabilitation Abatement Millage Sappi
REVENUES
Intergovernmental revenues
Federal $ 1,035,785 $ - $ - $ - $ 757,982 $ 184,979 $ 92,824 $ - $ -
Local 1,014,500 1,014,500 - - - - - - -
Charges for services 39,654 33,154 - 6,500 - - - - -
Investment earnings 8,097 2,776 1,123 4,198 - - - - -
Income from assets managed by others 3,213 3,213 - - - - - - -
Other 564,020 473,286 - 61,846 25,863 - - 3,025 -
Total revenues 2,665,269 1,526,929 1,123 72,544 783,845 184,979 92,824 3,025 -
EXPENDITURES
Capital outlay 4,981,599 3,672,248 - 51,992 818,988 342,522 92,824 3,025 -
Excess of revenues over (under) expenditures (2,316,330) (2,145,319) 1,123 20,552 (35,143) (157,543) - - -
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets 1,541,041 1,205,888 - - 35,143 300,010 - - -
106
Transfers in 442,761 - - 442,761 - - - - -
Transfers out (442,761) - - - - - - - (442,761)
Total other financing sources (uses) 1,541,041 1,205,888 - 442,761 35,143 300,010 - - (442,761)
Net change in fund balances (775,289) (939,431) 1,123 463,313 - 142,467 - - (442,761)
Fund balances at July 1, 2018 2,587,980 1,098,023 224,159 732,924 - 90,113 - - 442,761
Fund balances at June 30, 2019 $ 1,812,691 $ 158,592 $ 225,282 $ 1,196,237 $ - $ 232,580 $ - $ - $ -
DESCRIPTION OF
INTERNAL SERVICE FUNDS
Internal service funds are used to account for the financing of goods or services provided by one department to
other departments of a governmental unit or to other governments on a cost-reimbursement basis.
A list and description of internal service funds maintained by the City follows:
Engineering Services – to account for salary, benefit and other costs related to the provision of internal
engineering services for City projects; to account for charges to the user funds and projects to cover those
expenses.
Equipment – to account for the purchase, operation, maintenance and depreciation of all City-owned vehicles and
equipment; to account for charges to the user funds and departments to cover those expenses.
General Insurance – to account for the payment of claims and benefits, excess liability premiums and operating
expenses; to account for charges to other funds and departments to cover the expenses.
Public Service Building – to account for the operation, maintenance and depreciation of the City's Public Service
Building; to account for charges to the user funds and departments to cover these expenses.
107
City of Muskegon
COMBINING STATEMENT OF NET POSITION
Internal Service Funds
June 30, 2019
Total Internal Engineering General Public Service
Service Funds Services Equipment Insurance Building
ASSETS
Current assets
Cash and investments $ 1,408,098 $ 106,203 $ 680,873 $ - $ 621,022
Accounts receivable 1,278,655 410 682 1,277,563 -
Inventories 9,325 - 9,325 - -
Prepaid items 272,860 1,564 61,744 204,130 5,422
Total current assets 2,968,938 108,177 752,624 1,481,693 626,444
Noncurrent assets
Advances to component units 568,502 - 284,251 284,251 -
Capital assets
Land 65,000 - - - 65,000
Land improvements 301,715 - - - 301,715
Buildings and improvements 1,559,334 - - - 1,559,334
Machinery and equipment 9,650,051 26,355 9,529,332 - 94,364
Less accumulated depreciation (8,632,124) (26,355) (6,893,427) - (1,712,342)
Net capital assets 2,943,976 - 2,635,905 - 308,071
Total noncurrent assets 3,512,478 - 2,920,156 284,251 308,071
Total assets 6,481,416 108,177 3,672,780 1,765,944 934,515
DEFERRED OUTFLOWS OF RESOURCES
Related to pension 360,705 - 135,264 - 225,441
Related to other postemployment benefits 109,773 - 41,165 - 68,608
Total deferred outflows of resources 470,478 - 176,429 - 294,049
Total assets and deferred outflows of resources 6,951,894 108,177 3,849,209 1,765,944 1,228,564
LIABILITIES
Current liabilities
Accounts payable 367,339 1,030 66,691 283,849 15,769
Accrued liabilities 36,409 5,466 12,282 1,211 17,450
Due to other funds 353,563 - - 353,563 -
Bonds and other obligations, due within one year 19,300 1,900 7,400 800 9,200
Total current liabilities 776,611 8,396 86,373 639,423 42,419
Noncurrent liabilities
Bonds and other obligations, less amounts due within one year 95,994 9,311 36,765 3,803 46,115
Net pension liability 1,183,524 - 443,822 - 739,702
Net other postemployment benefits liability 380,867 - 142,825 - 238,042
Total noncurrent liabilities 1,660,385 9,311 623,412 3,803 1,023,859
Total liabilities 2,436,996 17,707 709,785 643,226 1,066,278
DEFERRED INFLOWS OF RESOURCES
Related to other postemployment benefits 14,731 - 5,524 - 9,207
Total liabilities and deferred inflows of resources 2,451,727 17,707 715,309 643,226 1,075,485
NET POSITION
Net investment in capital assets 2,943,976 - 2,635,905 - 308,071
Unrestricted 1,556,191 90,470 497,995 1,122,718 (154,992)
Total net position $ 4,500,167 $ 90,470 $ 3,133,900 $ 1,122,718 $ 153,079
108
City of Muskegon
COMBINING STATEMENT OF REVENUE, EXPENSES AND CHANGES IN NET POSITION
Internal Service Funds
For the year ended June 30, 2019
Total Internal Engineering General Public Service
Service Funds Services Equipment Insurance Building
OPERATING REVENUES
Charges for services $ 9,056,117 $ 403,437 $ 2,665,596 $ 4,937,950 $ 1,049,134
Other 83,569 29,006 51,151 2,892 520
Total operating revenues 9,139,686 432,443 2,716,747 4,940,842 1,049,654
OPERATING EXPENSES
Administration 333,374 33,594 107,283 39,384 153,113
Insurance premiums and claims 5,166,291 - - 5,166,291 -
Other operations 3,707,321 358,627 2,266,018 73,342 1,009,334
Depreciation 449,622 - 404,484 - 45,138
Total operating expenses 9,656,608 392,221 2,777,785 5,279,017 1,207,585
Operating income (loss) (516,922) 40,222 (61,038) (338,175) (157,931)
NONOPERATING REVENUES
Investment earnings 30,081 212 14,793 12,030 3,046
Gain on sale of capital assets 127,526 - 127,526 - -
Total nonoperating revenues 157,607 212 142,319 12,030 3,046
Change in net position (359,315) 40,434 81,281 (326,145) (154,885)
Net position at July 1, 2018 4,859,482 50,036 3,052,619 1,448,863 307,964
Net position at June 30, 2019 $ 4,500,167 $ 90,470 $ 3,133,900 $ 1,122,718 $ 153,079
109
City of Muskegon
COMBINING STATEMENT OF CASH FLOWS
Internal Service Funds
For the year ended June 30, 2019
Total Internal Engineering General Public Service
Service Funds Services Equipment Insurance Building
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 83,823 $ 30,310 $ 50,621 $ 2,892 $ -
Receipts from interfund services provided 7,741,332 403,437 2,665,596 3,623,165 1,049,134
Other receipts 657,986 - - 657,466 520
Payments to suppliers (6,646,662) (75,945) (1,344,629) (4,872,611) (353,477)
Payments to employees (1,420,335) (231,025) (390,347) (230,141) (568,822)
Payments for interfund services used (815,458) (91,862) (613,103) (3,801) (106,692)
Net cash provided by (used for) operating activities (399,314) 34,915 368,138 (823,030) 20,663
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Interfund borrowing 353,563 - - 353,563 -
Collections on advances to component units 84,512 - 42,256 42,256 -
Net cash provided by (used for) noncapital financing activities 438,075 - 42,256 395,819 -
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Purchases of capital assets (941,398) - (941,398) - -
Proceeds from sale of capital assets 163,012 - 163,012 - -
110
Net cash provided by (used for) capital and related financing activities (778,386) - (778,386) - -
CASH FLOW FROM INVESTING ACTIVITIES
Investment earnings 30,081 212 14,793 12,030 3,046
Net increase (decrease) in cash and investments (709,544) 35,127 (353,199) (415,181) 23,709
Cash and investments at July 1, 2018 2,117,642 71,076 1,034,072 415,181 597,313
Cash and investments at June 30, 2019 $ 1,408,098 $ 106,203 $ 680,873 $ - $ 621,022
Reconciliation of operating income (loss) to net cash provided by (used for)
operating activities
Operating income (loss) $ (516,922) $ 40,222 $ (61,038) $ (338,175) $ (157,931)
Adjustments to reconcile operating income (loss) to net cash provided by
(used for) operating activities
Depreciation expense 449,622 - 404,484 - 45,138
Change in assets and liabilities
Receivables (656,545) 1,304 (530) (657,319) -
Inventories (552) - (552) - -
Prepaid items (8,650) 114 (5,415) (3,893) 544
Accounts payable 137,588 391 (46,811) 171,691 12,317
Accrued liabilities 196,145 (7,116) 78,000 4,666 120,595
Net cash provided by (used for) operating activities $ (399,314) $ 34,915 $ 368,138 $ (823,030) $ 20,663
DESCRIPTION OF
FIDUCIARY FUNDS
Fiduciary funds are used to account for assets held by a government in a trustee capacity for individuals, private
organizations, other governments or other funds.
A list and description of the fiduciary funds maintained by the City follows:
AGENCY FUNDS are used to account for assets held as an agent for another organization or individual.
Collector – to account for the collections and disbursement of funds to other entities and individuals and to
account for payroll withholdings and their remittance to the appropriate governmental agencies.
Current Tax – to account for levy, collection and payment of taxes levied for the general and other funds of the
City, county, public school districts, and other governmental entities.
Rehab Loan Escrow – to account for deposits made by housing rehabilitation program participants and their
expenditures for the intended purposes.
111
City of Muskegon
COMBINING STATEMENT OF ASSETS AND LIABILITIES
Agency Funds
June 30, 2019
Total Current Rehab Loan
Agency Funds Collector Tax Escrow
ASSETS
Cash and investments $ 944,538 $ 944,157 $ - $ 381
Accounts receivable 30,521 30,521 - -
Total assets $ 975,059 $ 974,678 $ - $ 381
LIABILITIES
Accounts payable $ 333,678 $ 333,297 $ - $ 381
Due to other governmental units 446,320 446,320 - -
Deposits held for others 195,061 195,061 - -
Total liabilities $ 975,059 $ 974,678 $ - $ 381
112
City of Muskegon
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
Agency Funds
For the year ended June 30, 2019
Balance Balance
July 1, June 30,
COLLECTOR FUND 2018 Additions Deductions 2019
ASSETS
Cash and investments $ 946,219 $ 9,512,447 $ 9,514,509 $ 944,157
Accounts receivable 17,482 388,662 375,623 30,521
Total assets $ 963,701 $ 9,901,109 $ 9,890,132 $ 974,678
LIABILITIES
Accounts payable $ 663,816 $ 4,986,228 $ 5,316,747 $ 333,297
Due to other governmental units 90,460 2,637,303 2,281,443 446,320
Deposits held for others 209,425 2,842,514 2,856,878 195,061
Total liabilities $ 963,701 $ 10,466,045 $ 10,455,068 $ 974,678
CURRENT TAX FUND
ASSETS
Cash and investments $ - $ 22,353,959 $ 22,353,959 $ -
LIABILITIES
Due to other governmental units $ - $ 22,945,162 $ 22,945,162 $ -
Due to component units - 1,728,439 1,728,439 -
Deposits held for others - 141,759 141,759 -
Total liabilities $ - $ 24,815,360 $ 24,815,360 $ -
REHAB LOAN ESCROW FUND
ASSETS
Cash and investments $ 381 $ - $ - $ 381
LIABILITIES
Accounts payable $ 381 $ - $ - $ 381
ALL AGENCY FUNDS
ASSETS
Cash and investments $ 946,600 $ 31,866,406 $ 31,868,468 $ 944,538
Accounts receivable 17,482 388,662 375,623 30,521
Total assets $ 964,082 $ 32,255,068 $ 32,244,091 $ 975,059
LIABILITIES
Accounts payable $ 664,197 $ 4,986,228 $ 5,316,747 $ 333,678
Due to other governmental units 90,460 25,582,465 25,226,605 446,320
Due to component units - 1,728,439 1,728,439 -
Deposits held for others 209,425 2,984,273 2,998,637 195,061
Total liabilities $ 964,082 $ 35,281,405 $ 35,270,428 $ 975,059
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114
DESCRIPTION OF
DISCRETELY PRESENTED COMPONENT UNITS
A list and description of the discretely presented component units maintained by the City are as follows:
Downtown Development Authority – to account for the collection of tax increment revenues, the issuance and
repayment of debt and the construction of public facilities to promote and facilitate economic growth in the
downtown.
Local Development Finance Authority - SmartZone – to account for the collection of tax increment revenues and
the construction of public facilities to promote and facilitate economic growth in the SmartZone Hi-Tech Park.
Tax Increment Finance Authority – to account for the collection of tax increment revenues, the issuance and
repayment of debt to promote and facilitate economic growth in a sub section of the downtown.
Brownfield Redevelopment Authority – to account for the collection of tax increment revenues for environmental
remediation in designated brownfield areas. Currently there are two designated brownfield areas capturing tax
increments.
Area I – Betten-Henry Street brownfield site.
Area II – Former downtown mall brownfield site.
Area III – Terrace Point brownfield site.
115
City of Muskegon
COMBINING BALANCE SHEET
Discretely Presented Component Units
June 30, 2019
Local
Total Discretely Development
Presented Finance Downtown Tax Increment Brownfield Brownfield Brownfield
Component Authority - Development Finance Redevelopment Redevelopment Redevelopment
Units SmartZone Authority Authority Authority I Authority II Authority III
ASSETS
Cash and investments $ 167,080 $ 25,897 $ 80,457 $ 13,181 $ 15,763 $ 16,067 $ 15,715
LIABILITIES
Advances from primary government $ 852,752 $ - $ - $ - $ 852,752 $ - $ -
FUND BALANCES (DEFICITS)
Unassigned (685,672) 25,897 80,457 13,181 (836,989) 16,067 15,715
Total liabilities and fund
balances (deficits) $ 167,080 $ 25,897 $ 80,457 $ 13,181 $ 15,763 $ 16,067 $ 15,715
116
City of Muskegon
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO THE STATEMENT OF NET POSITION
Discretely Presented Component Units
June 30, 2019
Total fund balances (deficits)—governmental funds $ (685,672)
Amounts reported for governmental activities in the Statement of Net Position
are different because:
Capital assets used in governmental activities are not current financial
resources and, therefore, are not reported in the governmental funds.
Cost of capital assets $ 4,198,258
Accumulated depreciation (2,690,433) 1,507,825
Long-term liabilities in governmental activities are not due and payable in the
current period and, therefore, are not reported in the governmental funds.
Accrued interest payable (12,250)
Bonds and notes payable (3,167,419) (3,179,669)
Net position of governmental activities $ (2,357,516)
117
City of Muskegon
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (DEFICITS)
Discretely Presented Component Units
For the year ended June 30, 2019
Local
Total Discretely Development
Presented Finance Downtown Tax Increment Brownfield Brownfield Brownfield
Component Authority - Development Finance Redevelopment Redevelopment Redevelopment
Units SmartZone Authority Authority Authority I Authority II Authority III
REVENUES
Property taxes $ 1,728,439 $ 97,583 $ 1,085,354 $ 37,658 $ 134,828 $ 163,340 $ 209,676
Intergovernmental revenues
State 19,425 2,871 - 7,170 4,362 5,022 -
Local 360,000 360,000 - - - - -
Investment earnings 1,476 55 549 40 30 261 541
Total revenues 2,109,340 460,509 1,085,903 44,868 139,220 168,623 210,217
EXPENDITURES
Current
Community and economic development 1,418,482 - 1,010,930 40,000 - 162,000 205,552
118
Debt service
Principal 375,000 375,000 - - - - -
Interest and fees 111,913 81,100 - - 30,813 - -
Total expenditures 1,905,395 456,100 1,010,930 40,000 30,813 162,000 205,552
Net change in fund balances (deficits) 203,945 4,409 74,973 4,868 108,407 6,623 4,665
Fund balances (deficits) at July 1, 2018 (889,617) 21,488 5,484 8,313 (945,396) 9,444 11,050
Fund balances (deficits) at June 30, 2019 $ (685,672) $ 25,897 $ 80,457 $ 13,181 $ (836,989) $ 16,067 $ 15,715
City of Muskegon
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCES (DEFICITS)
TO THE STATEMENT OF ACTIVITIES
Discretely Presented Component Units
For the year ended June 30, 2019
Net change in fund balances—total governmental funds $ 203,945
Amounts reported for governmental activities in the Statement of Activities are
different because:
Governmental funds report outlays for capital assets as expenditures. However,
in the Statement of Activities, the cost of these assets is allocated over their
estimated useful lives and reported as depreciation expense.
Depreciation expense (172,648)
The issuance of long-term debt provides current financial resources to
governmental funds, but increases liabilities in the Statement of Net Position.
Repayment of debt is an expenditure in the governmental funds, but reduces
long-term liabilities in the Statement of Net Position.
Repayment of principal on long-term debt 375,000
Changes in accrual of interest and amortization of premiums and discounts
Change in accrued interest payable $ 2,500
Amortization of premiums 20,907 23,407
Change in net position of governmental activities $ 429,704
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120
SCHEDULE OF INDEBTEDNESS
121
City of Muskegon
SCHEDULE OF INDEBTEDNESS
June 30, 2019
Annual
Date Amount Interest Date of Interest
of Issue of Issue Rate Maturity 6/30/2018 6/30/2019 Payable
Business-Type Activities Bonds and Loans Payable:
Water supply system bonds 4/1/2010 $ 5,995,000 4.25% 05/01/19 $ 770,000 $ - $ -
770,000 - -
Type of debt: revenue bond
Revenue pledged: water system net revenues
Drinking Water State Revolving 3/2/2004 $ 13,900,000 2.13% 10/01/18 725,000 - -
Fund 2.13% 10/01/19 745,000 745,000 109,916
2.13% 10/01/20 760,000 760,000 93,925
Type of debt: state loan 2.13% 10/01/21 775,000 775,000 77,616
Revenue pledged: water system net revenues 2.13% 10/01/22 790,000 790,000 60,988
2.13% 10/01/23 810,000 810,000 43,988
2.13% 10/01/24 825,000 825,000 26,616
2.13% 10/01/25 840,000 840,000 8,925
6,270,000 5,545,000 421,974
TOTAL BUSINESS-TYPE ACTIVITIES BONDS AND LOANS PAYABLE $ 7,040,000 $ 5,545,000 $ 421,974
Governmental Activities Bonds and Loans Payable:
Capital Improvement refunding bonds 3/8/2016 $ 4,815,000 2.00% 10/01/18 $ 65,000 $ - $ -
of 2016 2.00% 10/01/19 290,000 290,000 159,750
($257,903 unamortized premium) 3.00% 10/01/20 295,000 295,000 150,975
3.00% 10/01/21 305,000 305,000 141,975
Type of debt: limited G.O. bonds 3.00% 10/01/22 300,000 300,000 132,900
Revenue pledged: general revenue 3.00% 10/01/23 300,000 300,000 122,400
4.00% 10/01/24 320,000 320,000 110,000
4.00% 10/01/25 325,000 325,000 97,100
4.00% 10/01/26 325,000 325,000 84,100
4.00% 10/01/27 325,000 325,000 71,100
4.00% 10/01/28 325,000 325,000 58,100
4.00% 10/01/29 325,000 325,000 45,100
4.00% 10/01/30 325,000 325,000 32,100
4.00% 10/01/31 320,000 320,000 19,200
4.00% 10/01/32 320,000 320,000 6,400
4,465,000 4,400,000 1,231,200
Capital improvement bonds 9/30/2011 $ 2,000,000 2.98% 09/01/18 210,000 - -
of 2011 (streets) 2.98% 09/01/19 215,000 215,000 16,614
2.98% 09/01/20 220,000 220,000 10,132
Type of debt: limited G.O. bond 2.98% 09/01/21 230,000 230,000 3,427
Revenue pledged: gas tax, general revenues 875,000 665,000 30,173
State of Michigan 6/18/2010 $ 500,000 2.00% 03/18/19 19,313 - -
environmental assessment loan 2.00% 03/18/20 19,699 19,699 394
39,012 19,699 394
Type of debt: state loan
Revenue pledged: general revenues
TOTAL GOVERNMENTAL ACTIVITIES BONDS AND LOANS PAYABLE $ 5,379,012 $ 5,084,699 $ 1,261,767
TOTAL PRIMARY GOVERNMENT BONDS AND LOANS PAYABLE $ 12,419,012 $ 10,629,699 $ 1,683,741
122
City of Muskegon
SCHEDULE OF INDEBTEDNESS
June 30, 2019
Annual
Date Amount Interest Date of Interest
of Issue of Issue Rate Maturity 6/30/2018 6/30/2019 Payable
Discretely Presented Component Unit Bonds and Loans Payable:
Downtown Development Authority 8/10/1989 $ 1,000,000 0.00% 08/30/19 $ 1,000,000 $ 1,000,000 $ -
promissory note to Muskegon County 1,000,000 1,000,000 -
Type of debt: intergovernmental note
Revenue pledged: DDA tax increments
Local Development Finance Authority 3/20/2012 $ 4,100,000 4.00% 11/01/18 375,000 - -
Smartzone Refunding Bonds 4.00% 11/01/19 390,000 390,000 65,800
($57,419 unamortized premium) 4.00% 11/01/20 395,000 395,000 50,100
4.00% 11/01/21 245,000 245,000 37,300
Type of debt: limited G.O. bond 3.00% 11/01/22 255,000 255,000 28,575
Revenue pledged: LDFA tax increments, general revenues 3.00% 11/01/23 265,000 265,000 20,775
3.00% 11/01/24 275,000 275,000 12,675
3.00% 11/01/25 285,000 285,000 4,275
2,485,000 2,110,000 219,500
TOTAL DISCRETELY PRESENTED COMPONENT UNIT BONDS AND LOANS PAYABLE $ 3,485,000 $ 3,110,000 $ 219,500
TOTAL REPORTING ENTITY BONDS AND LOANS PAYABLE $ 15,904,012 $ 13,739,699 $ 1,903,241
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124
Statistical Section
This part of the City of Muskegon’s Comprehensive Annual Financial Report presents detailed
information as a context for understanding what the information in the financial statements,
note disclosures, and required supplementary information says about the City’s overall
financial health.
Contents Page
Financial Trends
These schedules contain trend information to help the reader understand how the
City’s financial performance and well-being have changed over time. 126
Revenue Capacity
These schedules contain information to help the reader assess the factors affecting
the City’s ability to generate its property and sales taxes. 131
Debt Capacity
These schedules present information to help the reader assess the affordability of
the City’s current levels of outstanding debt and the City’s ability to issue additional
debt in the future. 138
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader
understand the environment within which the City’s financial activities take place
and to help make comparisons over time and with other governments. 142
Operating Information
These schedules contain information about the City’s operations and resources to help
the reader understand how the City’s financial information relates to the services the
City provides and the activities it performs. 144
Sources: Unless otherwise noted, the information in these schedules is derived form the Comprehensive Annual
Financial Reports for the relevant year.
125
City of Muskegon
NET ASSETS/NET POSITION BY COMPONENT
Last Ten Fiscal Years
2010 2011 2012 2013 (a) 2014 2015 (b) 2016 2017 2018 (c) 2019
Governmental Activities
Net Investment in Capital Assets $ 67,809,630 $ 67,944,957 $ 66,862,806 $ 63,842,092 $ 63,731,255 $ 63,514,691 $ 64,326,891 $ 62,520,466 $ 61,267,518 $ 66,734,006
Restricted 3,059,208 3,656,410 3,526,343 4,572,848 4,023,895 4,807,531 4,140,342 3,777,410 6,138,596 5,519,207
Unrestricted 13,828,231 12,598,197 12,836,573 13,299,523 12,811,852 491,914 (4,142,119) (5,566,349) (8,350,634) (14,355,143)
Total Governmental Net Assets/Net Position $ 84,697,069 $ 84,199,564 $ 83,225,722 $ 81,714,463 $ 80,567,002 $ 68,814,136 $ 64,325,114 $ 60,731,527 $ 59,055,480 $ 57,898,070
Business-type Activities
Net Investment in Capital Assets $ 41,105,739 $ 40,419,728 $ 40,147,600 $ 40,032,858 $ 39,365,043 $ 39,231,223 $ 39,013,529 $ 38,114,686 $ 38,549,547 $ 41,741,666
Restricted 672,000 672,000 672,000 599,500 599,500 599,500 599,500 599,500 599,500 599,500
Unrestricted 7,630,396 9,211,610 8,961,713 8,491,848 8,377,093 6,423,540 5,762,272 6,382,906 6,041,091 2,424,616
Total Business-type Activities Net Assets/Net Position $ 49,408,135 $ 50,303,338 $ 49,781,313 $ 49,124,206 $ 48,341,636 $ 46,254,263 $ 45,375,301 $ 45,097,092 $ 45,190,138 $ 44,765,782
Primary Government
Net Investment in Capital Assets $ 108,915,369 $ 108,364,685 $ 107,010,406 $ 103,874,950 $ 103,096,298 $ 102,745,914 $ 103,340,420 $ 100,635,152 $ 99,817,065 $ 108,475,672
Restricted 3,731,208 4,328,410 4,198,343 5,172,348 4,623,395 5,407,031 4,739,842 4,376,910 6,738,096 6,118,707
Unrestricted 21,458,627 21,809,807 21,798,286 21,791,371 21,188,945 6,915,454 1,620,153 816,557 (2,309,543) (11,930,527)
Total Primary Government Net Assets/Net Position $ 134,105,204 $ 134,502,902 $ 133,007,035 $ 130,838,669 $ 128,908,638 $ 115,068,399 $ 109,700,415 $ 105,828,619 $ 104,245,618 $ 102,663,852
126
(a) In 2013, the City implemented GASB 63 and 65 which changed the elements of the financial statements.
(b) In 2015, the City implemented GASB 68 and 71 which changed how governments measure and report pension liabilities.
(c) In 2018, the City implemented GASB 75 which changed how governments measure and report other postemployment benefit liabilities.
SOURCE: The information in these schedules (unless
otherwise noted) is derived from the comprehensive annual
financial reports for the relevant year.
City of Muskegon
CHANGES IN NET ASSETS/NET POSITION
Last Ten Fiscal Years
Period Ended
June 30 Year Ended June 30
2010 2011 2012 2013 (a) 2014 2015 (b) 2016 2017 2018 (c) 2019
EXPENSES
Governmental Activities
Public representation $ 445,251 $ 854,249 $ 866,809 $ 893,981 $ 1,030,006 $ 939,907 $ 1,107,551 $ 1,113,897 $ 1,347,618 $ 1,336,014
Administrative services 317,873 645,585 566,161 565,307 543,425 614,757 663,077 679,139 507,275 800,887
Financial services 1,209,694 2,373,141 2,399,147 2,241,061 2,171,958 2,547,766 2,331,236 2,483,519 1,995,426 2,700,775
Public safety 6,332,728 13,390,888 13,213,251 12,987,842 12,946,466 14,243,233 17,118,742 16,910,473 12,404,126 20,433,642
Public works 1,640,946 3,471,051 2,958,367 3,201,806 3,361,422 3,183,627 3,109,454 3,551,230 3,471,618 4,438,358
Highways, streets and bridges 3,680,196 7,013,216 6,568,448 6,672,374 7,053,326 7,165,703 7,251,882 6,996,540 6,917,260 7,185,642
Community and economic development 1,275,026 2,830,867 2,447,373 2,499,404 2,417,518 2,712,131 5,223,431 3,738,566 5,015,160 2,890,216
Culture and recreation 759,392 1,524,331 1,601,316 1,592,358 1,671,185 1,806,790 3,551,692 3,918,814 3,994,582 4,541,739
General administration 210,117 794,115 791,197 322,348 366,634 389,248 326,452 301,287 376,112 302,582
Interest on long-term debt 139,006 272,940 283,186 291,535 277,345 271,607 248,223 172,591 165,023 151,304
Total Governmental Activities Expenses 16,010,229 33,170,383 31,695,255 31,268,016 31,839,285 33,874,769 40,931,740 39,866,056 36,194,200 44,781,159
Business-type Activities
Water 2,958,795 5,869,241 5,974,173 6,228,788 6,016,192 6,047,244 6,750,826 7,206,564 7,090,770 7,752,703
Sewer 2,525,067 5,288,622 6,202,359 7,226,839 7,582,602 8,460,509 8,669,469 8,876,690 8,093,752 9,119,941
Marina and launch ramp 150,055 292,889 310,174 426,553 503,997 305,990 327,832 336,912 377,614 430,431
Total Business-type Activities Expenses 5,633,917 11,450,752 12,486,706 13,882,180 14,102,791 14,813,743 15,748,127 16,420,166 15,562,136 17,303,075
Total Primary Government Expenses $ 21,644,146 $ 44,621,135 $ 44,181,961 $ 45,150,196 $ 45,942,076 $ 48,688,512 $ 56,679,867 $ 56,286,222 $ 51,756,336 $ 62,084,234
127
PROGRAM REVENUES
Governmental Activities
Charges for Services
Public representation $ 100,177 $ 196,886 $ 196,886 $ 173,739 $ 189,444 $ 188,638 $ 226,559 $ 228,767 $ 232,736 $ 250,931
Administrative services 129,630 263,473 270,886 268,535 325,937 415,308 474,737 572,739 539,178 604,290
Financial services 475,031 879,905 881,229 830,919 871,632 823,547 925,474 895,924 903,322 921,748
Public safety 536,419 1,109,659 1,136,942 1,133,666 1,407,722 1,218,644 1,248,911 1,824,114 2,794,347 2,292,158
Public works 209,203 642,082 480,487 671,494 796,739 571,426 379,877 646,876 743,110 691,312
Highways, streets and bridges 139,009 451,473 230,241 245,609 351,962 258,475 234,861 256,190 188,248 191,883
Community and economic development 186,572 457,952 617,379 432,240 477,486 576,863 444,632 706,195 348,933 786,120
Culture and recreation 129,025 300,367 315,010 606,818 535,211 368,168 1,229,067 1,463,839 1,651,304 1,853,547
General administration 59,373 116,690 116,690 287,729 50,728 48,764 52,512 37,892 38,549 40,400
Operating grants and contributions 3,131,811 5,425,165 4,651,576 4,681,345 4,664,098 5,071,239 5,330,825 5,208,818 6,478,526 6,892,530
Capital grants and contributions 255,234 2,257,163 1,568,005 886,108 1,408,424 3,496,623 3,804,656 862,074 2,305,620 4,015,097
Total Governmental Program Revenues 5,351,484 12,100,815 10,465,331 10,218,202 11,079,383 13,037,695 14,352,111 12,703,428 16,223,873 18,540,016
Business-type Activities
Water 2,891,169 5,454,760 5,254,095 5,890,614 6,099,480 6,375,869 7,485,013 7,430,314 7,445,669 7,946,983
Sewer 3,441,924 6,652,851 6,455,634 7,058,315 6,633,911 6,363,808 6,305,554 7,620,208 8,217,497 8,098,828
Marina and launch ramp 156,767 194,311 208,370 234,229 228,339 255,638 287,547 278,753 325,917 298,312
Operating grants and contributions - - - 6,188 - - - 2,436 42,531 510,533
Capital grants and contributions - 20,074 - 88,046 327,240 474,681 765,363 784,969 - -
Total Business-type program revenues 6,489,860 12,321,996 11,918,099 13,277,392 13,288,970 13,469,996 14,843,477 16,116,680 16,031,614 16,854,656
Total Primary Government program revenues $ 11,841,344 $ 24,422,811 $ 22,383,430 $ 23,495,594 $ 24,368,353 $ 26,507,691 $ 29,195,588 $ 28,820,108 $ 32,255,487 $ 35,394,672
NET (EXPENSE) REVENUE
Governmental Activities $ (10,658,745) $ (21,069,568) $ (21,229,924) $ (21,049,814) $ (20,759,902) $ (20,837,074) $ (26,579,629) $ (27,162,628) $ (19,970,327) $ (26,241,143)
Business-type Activities 855,943 871,244 (568,607) (604,788) (813,821) (1,343,747) (904,650) (303,486) 469,478 (448,419)
Total Primary Government net expense $ (9,802,802) $ (20,198,324) $ (21,798,531) $ (21,654,602) $ (21,573,723) $ (22,180,821) $ (27,484,279) $ (27,466,114) $ (19,500,849) $ (26,689,562)
City of Muskegon
CHANGES IN NET ASSETS/NET POSITION
Last Ten Fiscal Years
Period Ended
June 30 Year Ended June 30
2010 2011 2012 2013 (a) 2014 2015 (b) 2016 2017 2018 (c) 2019
GENERAL REVENUES AND OTHER CHANGES IN NET ASSETS/NET POSITION
Governmental Activities
Property taxes $ 8,681,256 $ 8,844,004 $ 8,383,224 $ 7,592,847 $ 7,383,236 $ 7,894,189 $ 8,366,212 $ 8,389,243 $ 8,450,103 $ 8,230,573
Income taxes 3,505,264 6,866,967 7,663,534 8,057,145 7,762,719 8,478,231 8,386,775 8,707,279 8,995,294 8,939,887
Franchise fees 178,239 362,103 342,376 358,785 358,754 369,965 372,117 378,955 368,495 380,343
Grants and contributions not restricted for specific programs 1,832,066 3,846,859 3,577,848 3,700,871 3,813,221 3,989,178 4,051,050 4,630,111 4,955,168 5,102,602
Unrestricted investment earnings 104,086 193,435 100,073 73,157 146,590 99,733 189,408 106,653 92,771 546,533
Miscellaneous 51,638 432,880 154,531 102,388 124,085 805,432 626,014 512,738 545,536 550,381
Gain on sale of capital asset 65,155 25,815 34,496 44,899 23,836 20,302 99,031 844,062 712,415 1,333,414
Transfers (3,760) - - - - - - - - -
Total Governmental Program Revenues 14,413,944 20,572,063 20,256,082 19,930,092 19,612,441 21,657,030 22,090,607 23,569,041 24,119,782 25,083,733
Business-type Activities
Unrestricted investment earnings 15,990 23,959 46,582 33,148 31,251 29,879 25,688 25,277 28,550 24,063
Gain on sale of capital asset - - - - - - - - - -
Transfers 3,760 - - - - - - - - -
Total Business-type program revenues 19,750 23,959 46,582 33,148 31,251 29,879 25,688 25,277 28,550 24,063
Total Primary Government program revenues $ 14,433,694 $ 20,596,022 $ 20,302,664 $ 19,963,240 $ 19,643,692 $ 21,686,909 $ 22,116,295 $ 23,594,318 $ 24,148,332 $ 25,107,796
CHANGE IN NET ASSETS/NET POSITION
Governmental Activities $ 3,755,199 $ (497,505) $ (973,842) $ (1,119,722) $ (1,147,461) $ 819,956 $ (4,489,022) $ (3,593,587) $ 4,149,455 $ (1,157,410)
128
Business-type Activities 875,693 895,203 (522,025) (571,640) (782,570) (1,313,868) (878,962) (278,209) 498,028 (424,356)
Total Primary Government $ 4,630,892 $ 397,698 $ (1,495,867) $ (1,691,362) $ (1,930,031) $ (493,912) $ (5,367,984) $ (3,871,796) $ 4,647,483 $ (1,581,766)
(a) In 2013, the City implemented GASB 63 and 65 which changed the elements of the financial statements.
(b) In 2015, the City implemented GASB 68 and 71 which changed how governments measure and report pension liabilities.
(c) In 2018, the City implemented GASB 75 which changed how governments measure and report other postemployment benefit liabilities.
SOURCE: The information in these schedules (unless otherwise noted) is
derived from the comprehensive annual financial reports for the relevant year.
City of Muskegon
FUND BALANCE OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
2010 2011 (a) 2012 2013 2014 2015 2016 2017 2018 2019
General fund
Reserved $ 300,969 $ - $ - $ - $ - $ - $ - $ - $ - $ -
Nonspendable - 251,173 178,468 447,341 300,952 220,178 232,332 209,353 222,458 241,684
Restricted - - - - - - - - - -
Assigned - 2,385,728 2,075,738 2,292,495 1,700,000 1,700,000 1,700,000 1,700,000 1,700,000 1,700,000
Unassigned - 3,374,481 4,265,839 4,613,722 5,495,145 5,883,318 6,098,977 6,148,292 6,469,108 6,563,511
Unreserved 5,737,485 - - - - - - - - -
Total general fund $ 6,038,454 $ 6,011,382 $ 6,520,045 $ 7,353,558 $ 7,496,097 $ 7,803,496 $ 8,031,309 $ 8,057,645 $ 8,391,566 $ 8,505,195
All other governmental funds
Reserved $ 3,887,289 $ - $ - $ - $ - $ - $ - $ - $ - $ -
Nonspendable - 1,704,256 1,568,318 1,547,793 1,556,347 2,073,747 1,597,371 1,716,825 1,589,699 1,624,737
Restricted - 1,375,779 3,485,073 2,749,396 2,305,385 3,159,130 2,995,610 2,726,754 5,130,188 4,621,126
Assigned - 2,073,027 2,055,904 2,087,359 1,729,457 2,146,050 1,373,669 3,510,747 2,619,342 1,823,959
Unassigned - (238,104) (191,282) (82,048) (100,054) - - - - -
Unreserved, reported in:
129
Special revenue funds 2,163,041 - - - - - - - - -
Capital project funds 6,035 - - - - - - - - -
Permanent funds 16,979 - - - - - - - - -
Total all other governmental funds $ 6,073,344 $ 4,914,958 $ 6,918,013 $ 6,302,500 $ 5,491,135 $ 7,378,927 $ 5,966,650 $ 7,954,326 $ 9,339,229 $ 8,069,822
(a) In fiscal 2011, the City adopted GASB 54 which changed fund balance classifications.
SOURCE: The information in these schedules
(unless otherwise noted) is derived from the
comprehensive annual financial reports for the
relevant year.
City of Muskegon
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
Period Ended
June 30 Year Ended June 30
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Revenues
Taxes $ 11,855,182 $ 15,146,430 $ 15,506,668 $ 14,832,027 $ 14,954,904 $ 15,830,137 $ 16,178,761 $ 16,667,272 $ 16,877,055 $ 16,582,030
Intergovernmental 4,785,494 11,525,749 9,899,379 9,403,554 9,945,065 12,301,594 11,711,788 10,743,434 13,488,014 15,776,333
Charges for services 1,338,194 2,769,204 2,596,328 2,769,227 2,569,335 2,468,889 3,468,938 3,918,217 4,229,797 4,430,419
Other 1,768,895 3,461,292 3,237,189 2,795,952 3,256,324 4,003,105 3,868,958 4,005,126 5,251,208 5,312,773
Total revenues 19,747,765 32,902,675 31,239,564 29,800,760 30,725,628 34,603,725 35,228,445 35,334,049 39,846,074 42,101,555
Expenditures
Public representation 448,703 851,918 867,762 892,113 1,031,984 930,788 1,064,503 1,080,032 1,383,573 1,281,107
Administrative services 303,555 586,328 515,988 508,130 497,025 554,330 577,454 624,284 537,913 739,301
Financial services 1,241,430 2,352,709 2,407,131 2,196,917 2,197,651 2,476,740 2,068,208 2,236,941 2,191,245 2,394,866
Public safety 6,578,735 13,087,976 12,963,122 12,724,094 12,987,898 13,285,004 13,476,557 14,086,619 15,156,977 16,131,196
Public works 1,589,090 3,079,342 2,835,000 2,878,328 2,918,305 2,876,576 2,864,878 3,206,050 3,377,174 4,176,904
Highways, streets and bridges 1,823,089 3,226,377 2,756,010 2,815,337 3,011,611 2,986,909 3,102,391 3,096,875 4,554,968 2,963,498
Community and economic development 1,330,794 3,109,693 2,850,593 2,578,073 2,687,933 2,957,071 5,415,436 3,878,547 3,962,759 2,930,725
Culture and recreation 639,852 1,197,020 1,265,743 1,248,174 1,308,481 1,444,471 3,100,338 3,523,178 3,713,177 4,050,986
Other governmental functions 200,623 1,775,128 770,910 299,812 643,666 369,408 305,807 280,416 355,241 281,711
130
Debt service
Principal 303,466 1,345,183 289,597 395,211 402,492 417,842 428,199 283,563 288,934 294,313
Interest 136,013 267,258 268,315 292,554 278,412 272,946 257,516 211,242 197,723 189,905
Issuance costs - - - - - - 97,578 - - -
Capital outlay 980,822 3,301,273 2,948,610 3,230,586 3,577,837 3,992,111 3,867,579 2,328,615 3,134,369 9,363,862
Total expenditure 15,576,172 34,180,205 30,738,781 30,059,329 31,543,295 32,564,196 36,626,444 34,836,362 38,854,053 44,798,374
Excess of revenues over (under) expenditures 4,171,593 (1,277,530) 500,783 (258,569) (817,667) 2,039,529 (1,397,999) 497,687 992,021 (2,696,819)
Other financing sources (uses)
Transfers in 342,188 1,348,694 510,907 1,356,229 743,035 853,910 1,563,094 1,805,000 1,370,000 1,210,236
Transfers out (359,971) (1,376,740) (613,953) (784,275) (771,081) (942,933) (1,638,094) (1,818,000) (1,385,000) (1,210,236)
Bonds issued - - 2,000,000 - - - 97,578 - - -
Sale of capital assets 75,465 120,118 113,981 190,263 176,887 244,685 190,957 1,529,325 741,803 1,541,041
Total other financing sources (uses) 57,682 92,072 2,010,935 762,217 148,841 155,662 213,535 1,516,325 726,803 1,541,041
Net change in fund balances $ 4,229,275 $ (1,185,458) $ 2,511,718 $ 503,648 $ (668,826) $ 2,195,191 $ (1,184,464) $ 2,014,012 $ 1,718,824 $ (1,155,778)
Debt service as a percentage of noncapital
expenditures 3.01% 5.22% 2.01% 2.56% 2.43% 2.42% 2.09% 1.52% 1.36% 1.37%
SOURCE: The information in these schedules
(unless otherwise noted) is derived from the
comprehensive annual financial reports for the
relevant year.
City of Muskegon
GOVERNMENTAL ACTIVITIES REVENUES BY SOURCE
Last Ten Fiscal Years
Fiscal Property % of Income % of Intergo- % of Charges for % of Licenses % of Fines % of Interest % of % of %
Year Tax Total Tax Total vernmental Total Service Total and Permits Total and Fees Total and Rent Total Other Total Total Change
2010* $ 8,487,125 43.0% $ 3,368,057 17.1% $ 4,785,494 24.2% $ 1,338,194 6.8% $ 584,162 3.0% $ 297,043 1.5% $ 193,873 1.0% $ 693,817 3.5% $ 19,747,765 -39.9%
2011 8,546,677 26.0% 6,599,753 20.1% 11,525,749 35.0% 2,769,204 8.4% 1,179,639 3.6% 447,254 1.4% 412,498 1.3% 1,421,901 4.3% 32,902,675 66.6%
2012 8,093,864 25.9% 7,412,804 23.7% 9,899,379 31.7% 2,596,328 8.3% 1,223,034 3.9% 459,401 1.5% 307,891 1.0% 1,246,863 4.0% 31,239,564 -5.1%
2013 7,325,555 24.6% 7,506,472 25.2% 9,403,554 31.6% 2,769,227 9.3% 1,238,285 4.2% 435,893 1.5% 267,397 0.9% 854,377 2.9% 29,800,760 -4.6%
2014 7,123,481 23.2% 7,831,423 25.5% 9,945,065 32.4% 2,569,335 8.4% 1,570,137 5.1% 418,691 1.4% 352,153 1.1% 915,343 3.0% 30,725,628 3.1%
2015 7,555,471 21.8% 8,274,666 23.9% 12,301,594 35.5% 2,468,889 7.1% 1,361,721 3.9% 452,004 1.3% 343,105 1.0% 1,846,275 5.3% 34,603,725 12.6%
2016 8,026,859 22.8% 8,151,902 23.1% 11,711,788 33.2% 3,468,938 9.8% 1,443,144 4.1% 459,181 1.3% 455,671 1.3% 1,510,962 4.3% 35,228,445 1.8%
2017 8,056,460 22.8% 8,610,812 24.4% 10,743,434 30.4% 3,918,217 11.1% 1,884,341 5.3% 494,369 1.4% 290,578 0.8% 1,335,838 3.8% 35,334,049 0.3%
2018 8,118,381 20.4% 8,758,674 22.0% 13,488,014 33.9% 4,229,797 10.6% 2,965,599 7.4% 457,172 1.1% 212,069 0.5% 1,616,368 4.1% 39,846,074 12.8%
2019 7,890,357 18.7% 8,691,673 20.6% 15,776,333 37.5% 4,430,419 10.5% 2,452,807 5.8% 488,578 1.2% 757,911 1.8% 1,613,477 3.8% 42,101,555 5.7%
* The City changed its fiscal year end from December 31 to June 30. 2010 figures are for six months.
SOURCE: The information in these schedules (unless otherwise noted) is derived from the comprehensive annual financial reports for the relevant year.
131
City of Muskegon
Taxable, Assessed and Equalized and Estimated Actual Valuation of Property
Last Ten Fiscal Years
Taxable Valuation of Property
Ad Valorem Assessment Roll Industrial and Commercial Facilities Assessment Roll
Total Industrial Industrial Commercial Total Taxable Value
Real Personal Total Real Personal Real Total Taxable Total As a Percent
Year Residential Agriculture Commercial Industrial Property Property Ad Valorem Property Property Property IFT and CFT Valuation City Actual
2009 $ 376,545,791 $ 157,682 $ 147,276,887 $ 114,185,691 $ 638,166,051 $ 111,493,852 $ 749,659,903 $ 5,259,649 $ 25,616,400 $ - $ 30,876,049 $ 780,535,952 11.0680 91.48%
2010 332,105,030 - 144,721,736 109,507,141 586,333,907 104,029,037 690,362,944 4,111,154 9,129,000 - 13,240,154 703,603,098 12.0680 94.04%
2011 331,901,631 - 144,675,509 87,261,346 563,838,486 93,465,537 657,304,023 3,071,654 9,129,000 - 12,200,654 669,504,677 12.0749 94.95%
2012 312,930,252 - 134,635,427 81,575,476 529,141,155 91,750,891 620,892,046 3,587,223 6,161,900 - 9,749,123 630,641,169 12.0789 96.40%
2013 310,252,865 - 118,856,014 76,331,458 505,440,337 91,730,093 597,170,430 6,677,737 7,472,900 - 14,150,637 611,321,067 12.0865 96.97%
2014 312,031,296 - 115,070,943 61,196,955 488,299,194 91,020,452 579,319,646 3,874,303 6,512,600 - 10,386,903 589,706,549 13.0875 96.26%
2015 314,055,244 - 116,448,947 54,898,389 485,402,580 95,098,912 580,501,492 3,149,352 7,772,000 - 10,921,352 591,422,844 13.0869 95.28%
2016 314,299,363 - 114,855,236 50,232,295 479,386,894 74,155,243 553,542,137 3,628,098 5,690,600 - 9,318,698 562,860,835 13.0905 93.60%
2017 319,768,625 - 113,497,599 50,381,292 483,647,516 67,760,237 551,407,753 3,692,357 4,627,400 - 8,319,757 559,727,510 13.0908 91.38%
2018 331,347,976 - 113,370,852 48,272,032 492,990,860 65,728,440 558,719,300 3,990,263 3,739,800 - 7,730,063 566,449,363 13.0899 89.69%
Assessed and Equalized Valuation of Property
Ad Valorem Assessment Roll Industrial and Commercial Facilities Assessment Roll
Total Industrial Industrial Commercial Total Estimated
Real Personal Total Real Personal Real Total Assessed Actual
132
Year Residential Agriculture Commercial Industrial Property Property Ad Valorem Property Property Property IFT and CFT Valuation Value
2009 $ 426,002,850 $ 191,100 $ 161,996,600 $ 122,301,800 $ 710,492,350 $ 111,497,300 $ 821,989,650 $ 5,606,100 $ 25,616,400 $ - $ 31,222,500 $ 853,212,150 $ 1,706,424,300
2010 354,044,700 - 154,185,000 122,703,400 630,933,100 104,020,200 734,953,300 4,120,400 9,129,000 - 13,249,400 748,202,700 1,496,405,400
2011 354,307,945 - 154,700,200 90,467,700 599,475,845 93,456,700 692,932,545 3,080,900 9,129,000 - 12,209,900 705,142,445 1,410,284,890
2012 327,226,000 - 141,238,834 84,084,000 552,548,834 91,740,800 644,289,634 3,719,300 6,161,900 - 9,881,200 654,170,834 1,308,341,668
2013 321,604,220 - 123,831,400 79,037,400 524,473,020 91,720,300 616,193,320 6,766,000 7,472,900 - 14,238,900 630,432,220 1,260,864,440
2014 326,690,900 - 120,803,800 63,704,200 511,198,900 91,004,400 602,203,300 3,877,300 6,512,600 - 10,389,900 612,593,200 1,225,186,400
2015 335,445,400 - 122,235,800 57,024,100 514,705,300 95,084,900 609,790,200 3,149,800 7,772,000 - 10,921,800 620,712,000 1,241,424,000
2016 342,767,600 - 122,574,300 52,323,600 517,665,500 74,140,100 591,805,600 3,851,200 5,690,600 - 9,541,800 601,347,400 1,202,694,800
2017 363,318,800 - 120,587,210 52,278,900 536,184,910 67,745,200 603,930,110 3,957,900 4,639,600 - 8,597,500 612,527,610 1,225,055,220
2018 382,994,200 - 124,938,600 50,130,470 558,063,270 65,713,100 623,776,370 4,017,100 3,739,800 - 7,756,900 631,533,270 1,263,066,540
Property is assessed at 50% of true cash value. The assessed and equalized valuation of taxable property is determined as of December 31st of each year and is the basis upon which taxes are levied during the succeeding fiscal year. The passage of Proposal A in May, 1994 altered how
tax values are determined. Beginning in the 1995-1996 fiscal year, property taxes are based on taxable value instead of state equalized value. Proposal A also capped taxable value of each parcel of property, adjusted for additions and losses, at the previous year's rate of inflation or 5%
whichever is less, until the property is sold or transferred. When ownership of a parcel of property is transferred, the taxable value becomes 50% of true cash value, or the state equalized valuation. The Industrial and Commercial Facilities Tax Acts permit certain property to be taxed at one-
half the tax rate for a period up to twelve years.
City of Muskegon
Principal Property Taxpayers
June 30, 2019
6/30/2019 6/30/2009
Percent of Percent of
Taxable Total Taxable Taxable Total Taxable
Taxpayer Valuation Rank Valuation Valuation Rank Valuation
Consumers Energy $ 21,607,450 1 3.8% $ 78,615,856 1 10.1%
DTE Gas Company 8,875,500 2 1.5% 5,852,200 6 0.7%
Melching 5,703,429 3 1.0%
Michigan Electric Transmission 5,251,200 4 0.9%
Muskegon SC Holdings LLC 4,256,304 5 0.7%
Mercy Health 4,160,820 6 0.7%
Muskegon Investments I LLC 3,600,000 7 0.6%
133
Glen Oaks Apartments LLC 3,422,070 8 0.6% 4,776,500 7 0.6%
Adac Plastics 2,907,135 9 0.5%
RCG Muskegon LLC 2,654,600 10 0.5%
Sappi (S.D. Warren Co.) 31,205,687 2 4.0%
Johnson Technology 7,679,263 3 1.0%
Adac Plastics 7,379,563 4 0.9%
Esco Company 6,578,855 5 0.8%
Honeywell Inc 4,738,900 8 0.6%
Faram Muskegon LLC 4,570,300 9 0.6%
Lorin Industries 4,318,889 10 0.6%
Total - 10 Largest 62,438,508 10.9% 155,716,013 19.9%
Total - All Other 510,872,320 89.1% 624,819,939 80.1%
$ 573,310,828 100.0% $ 780,535,952 100.0%
Source: Muskegon County Equalization Department; City of Muskegon Treasurer's Office
City of Muskegon
Property Tax Rates - Direct and Overlapping Government Units
Property Tax Rates Per $1,000 Taxable Valuation
Last Ten Fiscal Years
City-Wide Rates
Total Library Library
Year Operating Promotion Sanitation City District Debt
2009 8.9000 0.0680 2.1000 11.0680 2.4000 -
2010 9.5000 0.0680 2.5000 12.0680 2.4000 -
2011 9.5000 0.0749 2.5000 12.0749 2.4000 -
2012 9.5000 0.0789 2.5000 12.0789 2.4000 -
2013 9.5000 0.0865 2.5000 12.0865 2.4000 -
2014 10.0000 0.0875 3.0000 13.0875 2.4000 -
2015 10.0000 0.0869 3.0000 13.0869 2.4000 0.5611
2016 10.0000 0.0905 3.0000 13.0905 2.4000 0.4962
2017 10.0000 0.0908 3.0000 13.0908 2.4000 0.4999
2018 10.0000 0.0899 3.0000 13.0899 2.4000 0.4866
Overlapping - County-Wide Rates
Muskegon Intermediate Special Vocational Community MAISD Community
Year County School Education Education College Gen Ed College Debt
2009 6.6957 0.4597 2.2987 0.9996 2.2037 - -
2010 6.6957 0.4597 2.2987 0.9996 2.2037 - -
2011 6.6957 0.4597 2.2987 0.9996 2.2037 - -
2012 6.6957 0.4597 2.2987 0.9996 2.2037 - -
2013 6.6957 0.4597 2.2987 0.9996 2.2037 - -
2014 6.6557 0.4597 2.2987 0.9996 2.2037 1.0000 0.3400
2015 6.6357 0.4597 2.2987 0.9996 2.2037 1.0000 0.3400
2016 6.8957 0.4597 2.2987 0.9996 2.2037 1.0000 0.3400
2017 6.8957 0.4597 2.2987 0.9996 2.2037 1.0000 0.3400
2018 6.8957 0.4597 2.2987 0.9996 2.2037 1.0000 0.3400
Overlapping - School District Grand Total
State Non-
Year Operating Debt Total Education Homestead Homestead
2009 18.0000 5.6000 23.6000 6.0000 37.7254 55.7254
2010 18.0000 5.7500 23.7500 6.0000 38.8754 56.8754
2011 18.0000 6.2500 24.2500 6.0000 39.3823 57.3823
2012 18.0000 7.1000 25.1000 6.0000 40.2363 58.2363
2013 18.0000 7.1000 25.1000 6.0000 40.2439 58.2439
2014 18.0000 7.6000 25.6000 6.0000 43.0449 61.0449
2015 18.0000 6.8000 24.8000 6.0000 42.7854 60.7854
2016 18.0000 6.3500 24.3500 6.0000 42.5341 60.5341
2017 18.0000 7.6800 25.6800 6.0000 43.8681 61.8681
2018 18.0000 8.3600 26.3600 6.0000 44.5339 62.5339
134
City of Muskegon
PROPERTY TAX LEVIES AND COLLECTIONS
Last Ten Fiscal Years
Charge backs
Total Current Percent Delinquent Total Tax On Uncollected Outstanding Outstanding Percent of
Fiscal Tax Tax Of Levy Tax Total Tax Collections Delinquent Delinquent Delinquent Delinquent
Year Levy Collections Collected Collections Collections as % of Levy Taxes Personal Specific Taxes to Levy
2009 $ 8,700,017 $ 7,522,462 86.5% $ 1,102,891 $ 8,625,353 99.1% $ 25,755 $ 73,440 $ 34,758 1.54%
2010 8,945,500 7,784,052 87.0% 1,077,056 8,861,108 99.1% 58,027 70,745 13,647 1.59%
2011 8,583,284 7,457,610 86.9% 1,030,902 8,488,512 98.9% 54,707 80,068 12,935 1.72%
2012 7,872,541 6,882,534 87.4% 915,950 7,798,484 99.1% 27,163 68,945 5,113 1.29%
2013 7,668,166 6,703,147 87.4% 912,362 7,615,509 99.3% 102,713 45,361 7,296 2.03%
2014 8,032,955 7,069,804 88.0% 917,806 7,987,610 99.4% 57,680 41,074 2,788 1.26%
2015 8,132,782 7,247,701 89.1% 848,266 8,095,967 99.5% 62,345 33,407 1,862 1.20%
2016 7,719,829 6,828,816 88.5% 853,639 7,682,455 99.5% 42,063 23,671 1,365 0.87%
2017 7,633,290 6,776,856 88.8% 795,164 7,572,020 99.2% 51,584 43,665 11,728 1.40%
2018 9,545,232 8,631,502 90.4% 839,208 9,470,710 99.2% - 53,873 13,529 0.71%
135
SOURCE: City of Muskegon Treasurer' Office
City of Muskegon
Total Income Tax Collect and Number of Returns Filed - Graphical
Last Ten Fiscal Years
Income Tax 2009 - 2019
$4,500,000
$4,000,000
$3,500,000
$3,000,000
INCOME TAX $
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$-
2009 2010 2010 - 2011 2011 - 2012 2012 - 2013 2013 - 2014 2014 - 2015 2015 - 2016 2016 - 2017 2017 - 2018 2018 - 2019
Resident $2,541,951 $1,276,521 $2,566,198 $2,755,079 $2,692,211 $2,849,530 $3,070,581 $2,925,036 $3,284,777 $3,278,759 $3,457,902
Non-Resident 3,106,829 1,560,193 3,136,464 3,367,318 3,290,480 3,482,760 3,752,932 3,575,045 4,014,691 4,007,372 4,226,325
Other 833,510 530,956 897,091 1,290,407 1,523,781 1,499,133 1,451,153 1,651,821 1,311,374 1,472,517 1,007,446
FISCAL YEAR
136
NUMBER OF RETURNS 2009 - 2019
25,000
20,000 1,850
1,800 1,750
1,750
1,750 1,750 1,750 1,750 1,750 1,650
1,650
15,000
RETURNS
12,433
11,797 11,612 Other
11,259 11,009
10,997 10,631 10,713 10,578 10,278 10,256 Non-Resident
10,000
Resident
5,000
6,788 6,366 6,326 5,690 5,110 5,463 5,458 5,337 5,464 5,352 5,493
-
2009 2010 2010 - 2011 2011 - 2012 2012 - 2013 2013 - 2014 2014 - 2015 2015 - 2016 2016 - 2017 2017 - 2018 2018 - 2019
FISCAL YEAR
* The City changed its fiscal year end from December 31 to June 30. 2010 figures are for six months.
City of Muskegon
Total Income Tax Collect and Number of Returns Filed - Data
Last Ten Fiscal Years
Income Tax 2009 - 2019
Year 2009 2010 2010 - 2011 2011 - 2012 2012 - 2013 2013 - 2014 2014 - 2015 2015 - 2016 2016 - 2017 2017 - 2018 2018 - 2019
Resident $ 2,541,951 $ 1,276,521 $ 2,566,198 $ 2,755,079 $ 2,692,211 $ 2,849,530 $ 3,070,581 $ 2,925,036 $ 3,284,777 $ 3,278,759 $ 3,457,902
Non-Resident 3,106,829 1,560,193 3,136,464 3,367,318 3,290,480 3,482,760 3,752,932 3,575,045 4,014,691 4,007,372 4,226,325
Other 833,510 530,956 897,091 1,290,407 1,523,781 1,499,133 1,451,153 1,651,821 1,311,374 1,472,517 1,007,446
Total Income Tax $ 6,482,290 $ 3,367,670 $ 6,599,753 $ 7,412,804 $ 7,506,472 $ 7,831,423 $ 8,274,666 $ 8,151,902 $ 8,610,842 $ 8,758,648 $ 8,691,673
Number of Returns 2009 - 2019
Year 2009 2010 2010 - 2011 2011 - 2012 2012 - 2013 2013 - 2014 2014 - 2015 2015 - 2016 2016 - 2017 2017 - 2018 2018 - 2019
Resident 6,788 6,366 6,326 5,690 5,110 5,463 5,458 5,337 5,464 5,352 5,493
Non-Resident 12,433 11,797 11,612 11,259 10,997 11,009 10,631 10,713 10,578 10,278 10,256
Other 1,850 1,800 1,750 1,750 1,750 1,750 1,750 1,750 1,750 1,650 1,650
Total Returns 21,071 19,963 19,688 18,699 17,857 18,222 17,839 17,800 17,792 17,280 17,399
137
* The City changed its fiscal year end from December 31 to June 30. 2010 figures are for six months.
City of Muskegon
RATIO OF OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
Governmental Activities Business-Type Activities
General
Obligation Special Total
Limited Tax Assessment Governmental Revenue Total Business- Total Primary Per
Year Bonds Bonds State Loans Activities Bonds State Loans Type Activities Government Capita
2010* $ 6,444,605 $ - $ 1,065,428 $ 7,510,033 $ 5,995,000 $ 11,570,000 $ 17,565,000 $ 25,075,033 $ 639
2011 5,920,000 - 244,850 6,164,850 5,415,000 10,955,000 16,370,000 22,534,850 587
2012 7,725,000 - 150,253 7,875,253 4,815,000 10,325,000 15,140,000 23,015,253 599
2013 7,350,000 - 130,042 7,480,042 4,205,000 9,685,000 13,890,000 21,370,042 577
2014 6,954,535 - 112,550 7,067,085 3,630,728 9,030,000 12,660,728 19,727,813 533
138
2015 6,555,436 - 94,708 6,650,144 2,949,368 8,360,000 11,309,368 17,959,512 483
2016 6,243,903 - 76,509 6,320,412 2,246,962 7,675,000 9,921,962 16,242,374 436
2017 5,940,903 - 57,946 5,998,849 1,523,661 6,980,000 8,503,661 14,502,510 378
2018 5,633,903 - 39,012 5,672,915 774,614 6,270,000 7,044,614 12,717,529 331
2019 5,322,903 - 19,699 5,342,602 - 5,545,000 5,545,000 10,887,602 284
* The City changed its fiscal year end from December 31 to June 30. 2010 figures are for six months.
NOTE: None of the debt issued by the City is payable through the levy of property tax millages.
SOURCE: The information in these schedules (unless otherwise noted) is derived from the comprehensive annual financial reports for the relevant year.
City of Muskegon
DIRECT AND OVERLAPPING DEBT
June 30, 2019
Total Debt Debt Supported by City
Name of Governmental Unit Outstanding Self Supporting General Revenues
Direct Debt
City of Muskegon:
Revenue Bonds $ 5,545,000 $ 5,545,000 $ -
Capital Improvement Bonds 5,322,903 - 5,322,903
Intergovernmental Bonds 19,699 - 19,699
Component Unit Debt:
Downtown Development Authority 1,000,000 1,000,000 -
Local Development Finance Authority 2,167,419 2,167,419 -
Total City Direct Debt $ 14,055,021 $ 8,712,419 $ 5,342,602
City Share as
Gross Percent of Gross Net
Overlapping Debt
Muskegon School District $ 7,470,000 95.40% $ 7,126,380
Orchard View School District 39,635,467 18.05% 7,154,202
Reith's Puffer School District 64,727,524 0.73% 472,511
Hackley Public Library 2,305,000 95.40% 2,198,970
Muskegon County 113,057,178 12.49% 14,120,842
Muskegon Community College 33,835,000 12.49% 4,225,992
Total Overlapping Debt $ 261,030,169 35,298,896
Total City Direct and Overlapping Debt $ 40,641,498
NOTE: None of the debt issued by the City is payable through the levy of property tax millages.
The percentage of overlapping debt is estimated using taxable property values. Applicable percentages were estimated by
determining the portion of the City's taxable value that is within each overalapping government unit's boundaries. Details regarding
the City's outstanding debt can be found in the notes to the financial statements.
SOURCE: Municipal Advisory Council of Michigan and City of Muskegon Finance Department. The information in these schedules
(unless otherwise noted) is derived from the comprehensive annual financial reports for the relevant year.
139
City of Muskegon
LEGAL DEBT MARGIN INFORMATION
Last Ten Fiscal Years
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Debt Limit $ 82,198,965 $ 78,308,925 $ 73,585,150 $ 68,555,700 $ 61,706,477 $ 61,510,980 $ 60,962,090 $ 61,333,841 $ 64,124,907 $ 101,083,635
Total net debt applicable to limit 14,435,033 12,929,850 14,375,253 13,655,042 12,847,550 11,969,708 11,313,794 10,290,785 9,240,855 8,510,021
Legal debt margin $ 67,763,932 $ 65,379,075 $ 59,209,897 $ 54,900,658 $ 48,858,927 $ 49,541,272 $ 49,648,296 $ 51,043,056 $ 54,884,052 $ 92,573,614
Total net debt applicable to the limit as 17.56% 16.51% 19.54% 19.92% 20.82% 19.46% 18.56% 16.78% 14.41% 8.42%
a percentage of debt limit
Legal Debt Margin Calculation for 2019:
Assessed Valuation: $ 1,010,836,357
Legal Debt Limit (10% ) 101,083,635
Total Indebtedness: $ 14,055,021
Debt not Subject to Limitation:
Paid by Special Assessment -
Revenue Bonds (5,545,000)
140
Debt Subject to Limitation 8,510,021
Legal Debt Margin $ 92,573,614
SOURCE: The information in these schedules
(unless otherwise noted) is derived from the
comprehensive annual financial reports for the
relevant year.
City of Muskegon
REVENUE BOND COVERAGE
Last Ten Fiscal Years
Water Supply System
Direct Net Revenue
Fiscal Gross Operating Available For Debt Service Requirements
Year Revenue (a) Expenses (b) Debt Service Principal Interest Total Coverage
2010* $ 2,904,735 $ 1,575,275 $ 1,329,460 $ 535,000 $ 271,522 $ 806,522 1.65
2011 5,467,785 3,294,530 2,173,255 1,195,000 451,323 1,646,323 1.32
2012 5,273,720 3,441,078 1,832,642 1,230,000 410,187 1,640,187 1.12
2013 5,907,784 3,729,276 2,178,508 1,250,000 384,694 1,634,694 1.33
2014 6,109,144 3,511,477 2,597,667 1,295,000 352,634 1,647,634 1.58
2015 6,388,474 3,774,508 2,613,966 1,330,000 320,857 1,650,857 1.58
2016 7,498,376 4,460,076 3,038,300 1,370,000 283,360 1,653,360 1.84
2017 7,449,646 4,997,912 2,451,734 1,405,000 246,434 1,651,434 1.48
2018 7,507,323 4,949,807 2,557,516 1,450,000 203,106 1,653,106 1.55
2019 8,472,413 5,672,522 2,799,891 1,495,000 158,260 1,653,260 1.69
Sewage Disposal System
Direct Net Revenue
Fiscal Gross Operating Available For Debt Service Requirements
Year Revenue (a) Expenses (b) Debt Service Principal Interest Total Coverage
2010* No Direct System Indebtedness
2011 No Direct System Indebtedness
2012 No Direct System Indebtedness
2013 No Direct System Indebtedness
2014 No Direct System Indebtedness
2015 No Direct System Indebtedness
2016 No Direct System Indebtedness
2017 No Direct System Indebtedness
2018 No Direct System Indebtedness
2019 No Direct System Indebtedness
* The City changed its fiscal year end from December 31 to June 30. 2010 figures are for six months.
For years in which "revenue bond coverage" is less than 1.00, the shortfall was made up either by use of net position or by transfer in.
(a) "Gross Revenue" equals total operating revenues plus interest income.
(b) "Direct Operating Expenses" equal total operating expenses net of depreciation expense.
SOURCE: The information in these schedules (unless otherwise noted) is derived from the comprehensive annual financial reports for the
relevant year.
141
City of Muskegon
DEMOGRAPHIC AND ECONOMIC STATISTICS
Last Ten Fiscal Years
Fiscal Personal Per Capita Median Public School Building Permits
Year Population Income Income Age Enrollment Number Value Unemployment
2010 39,259 $ 735,734,614 18,741 32.8 5,931 374 $ 11,900,915 17.8%
2011 38,401 737,646,617 19,209 34.1 5,162 835 18,829,825 13.8%
2012 38,225 752,622,470 19,689 34.1 5,428 891 21,932,738 8.5%
2013 37,046 747,644,037 20,182 34.1 4,367 826 24,613,938 12.0%
2014 37,213 769,789,707 20,686 34.1 4,808 1,108 54,065,115 9.6%
2015 37,213 789,034,450 21,203 35.8 4,387 1,102 46,541,966 10.3%
2016 37,213 808,760,311 21,733 35.8 4,206 1,112 58,924,856 8.3%
2017 38,349 854,285,543 22,277 35.8 3,985 1,075 78,271,395 4.8%
2018 38,401 876,830,025 22,834 35.4 3,732 1,202 171,523,877 4.1%
142
2019 38,401 898,750,775 23,404 35.4 3,589 1,295 94,667,004 4.2%
SOURCE: US Census Bureau, Muskegon Area Intermediate School Distrct (MAISD), City of Muskegon Inspections Department, Michigan Department of Technology,
Management, & Budget
City of Muskegon
PRINCIPAL EMPLOYERS
Current Year and Ten Years Ago
2019 2009
Percentage Percentage
of total of total
City City
Employer Employees Rank employment Employees Rank employment
Mercy General Health Partners* 4,709 1 31.3% 3,227 1 19.3%
County of Muskegon 1,056 2 7.0% 980 2 5.9%
ADAC Automotive 901 3 6.0% 400 8 2.4%
G.E. Aviation (formerly Johnson Technology Inc.) 454 4 3.0% 474 5 2.8%
Port City Group 430 5 2.9%
Muskegon Area Intermediate 415 6 2.8%
Muskegon Public Schools 403 7 2.7% 697 4 4.2%
Muskegon Community College 355 8 2.4%
143
Betten 255 9 1.7%
SAF Holland USA 175 10 1.2%
State of Michigan 772 3 4.6%
Verizon 325 9 1.9%
City of Muskegon 281 10 1.7%
Knoll Group 450 6 2.7%
Baker College 430 7 2.6%
* Hackley Hospital merged with the former Mercy Hospital to become Mercy General Health Partners.
SOURCE: City of Muskegon; Muskegon Area First; Michigan Department of Energy, Labor & Economic Growth
City of Muskegon
BUDGETED FULL-TIME CITY GOVERNMENT POSITIONS BY DEPARTMENT
Last Ten Fiscal Years
Department 2010* 2011 2012 2013 2014 2015 2016 2017 2018 2019
Administration - 0.40 0.40 0.40 0.40 - - - - -
Affirmative Action 1.50 1.10 1.10 1.10 1.10 1.30 1.30 1.46 0.40 1.00
Cemetaries 2.50 2.20 1.75 1.25 1.25 1.25 1.25 1.25 1.25 1.25
City Clerk & Elections 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.54 3.80 3.80
City Commission 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25
City Hall Maintenance 1.00 0.55 0.55 0.55 0.55 0.55 0.55 0.55 0.55 0.55
City Manager's Office 2.25 2.25 2.25 2.25 2.25 2.05 2.05 1.75 2.75 2.75
City Treasurer's Office 5.00 5.00 5.00 5.00 4.50 5.50 5.50 5.50 5.50 5.50
Civil Service 2.00 1.00 - - - - - - - -
Environmental Services 2.00 2.00 5.00 5.00 5.00 2.00 2.00 2.00 2.00 -
Farmers Market 0.05 0.05 0.05 0.05 0.05 0.05 0.05 - 0.20 1.20
Finance Administration 3.00 3.00 3.00 2.00 2.00 3.00 3.00 3.00 3.60 3.00
Fire 36.00 33.00 35.00 28.00 28.83 32.00 35.00 35.00 35.00 26.00
Fire Safety Inspections 9.00 8.00 6.00 6.00 0.83 - - - - -
General Recreation 2.00 - - - - - - - - -
Income Tax Administration 5.00 5.00 5.00 5.00 4.50 3.50 3.50 3.50 3.50 3.50
Information Systems 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.50 3.50
Parks 7.15 6.00 6.05 6.05 6.00 6.00 6.00 7.05 7.05 10.05
144
Planning, Zoning & Economic Development 5.00 4.00 3.00 3.00 3.00 3.40 3.40 3.45 3.45 5.45
Police 88.00 88.00 88.00 88.00 87.34 88.00 88.00 88.00 88.00 89.00
Sanitation - 0.30 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20
Senior Transit - - 0.05 0.05 0.05 - - - - -
MVH-Major Streets 12.00 12.00 11.70 10.70 10.70 10.70 10.70 10.70 10.70 12.20
MVH-Local Streets 7.00 7.00 6.70 6.70 6.70 6.70 6.70 6.70 6.70 7.20
Community Development 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 3.55 3.55
Home Program 0.25 0.25 - - - - - - - -
Lead Program 0.75 0.75 - - - - - - - -
Sewer Maintenance 10.20 10.20 9.75 9.75 9.80 9.80 9.80 9.80 9.80 9.80
Water Filtration 10.00 10.00 9.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00
Water Maintenance 12.40 12.40 11.75 11.75 11.75 11.75 11.75 11.75 11.75 11.75
Hartshorn Marina Fund 0.05 0.05 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30
Public Service Building 8.95 8.05 7.95 8.45 8.45 8.50 8.50 8.50 8.50 8.50
Engineering 5.45 4.95 4.95 4.95 4.95 4.95 4.95 4.95 4.95 5.95
Equipment 7.25 6.25 6.25 6.25 6.25 6.25 6.25 6.25 6.25 6.25
256.00 244.00 241.00 233.00 227.00 228.00 231.00 232.45 233.50 232.50
* The City changed its fiscal year end from December 31 to June 30. 2010 figures are for six months.
SOURCE: City of Muskegon Finance Department
City of Muskegon
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
Function/Program 2010* 2011 2012 2013 2014 2015 2016 2017 2018 2019
Administrative Services
Elections
Number of registered voters 26,136 26,330 26,324 26,098 26,025 24,014 24,005 24,612 26,136 25,182
Number of votes cast:
Last general election 15,271 8,106 1,933 13,487 3,029 7,763 2,547 13,179 15,271 11,407
Last city election 2,254 8,106 1,933 2,131 3,029 7,763 2,547 13,179 2,254 1,938
Percentage of registered voters voting:
Last general election 58% 31% 7% 52% 12% 32% 11% 54% 58% 45%
Last city election 9% 31% 7% 8% 12% 32% 11% 54% 9% 8%
Financial Services
Property Tax Bills - 15,351 15,261 15,291 15,211 14,528 14,611 14,243 14,229 14,180
Income Tax Returns 19,963 19,688 18,699 17,857 18,222 17,839 17,800 17,792 17,280 17,399
Paper Check Issued to Vendors 1,486 2,986 3,746 1,677 1,404 1,527 1,608 1,675 1,782 1,863
Electronic Payments to Vendors 450 884 1,334 1,251 1,579 1,471 1,849 1,998 2,104 2,307
145
Public Safety
Fire Protection
Number of firefighter and officer positions 37 37 36 41 38 35 35 35 23 29
Number of emergency calls 2,062 4,402 4,676 4,563 4,354 4,881 4,938 4,895 4,948 5,106
Police Protection
Number of sworn officer positions 79 79 79 79 76 76 76 75 79 80
Part I (Major) Crimes 1,305 2,859 2,772 2,647 2,240 2,107 1,989 2,816 2,357 1,728
Public Works
Refuse Collected (Tons per Year) 6,042 12,703 10,153 9,958 10,217 10,512 10,994 11,009 10,801 10,753
Recyclables Collected (Tons per Year) - - - - - - - - - -
Water & Sewer
Number of consumers 12,966 13,037 13,109 13,144 13,086 13,223 13,307 13,248 13,104 13,343
Average daily water consumption (GPD) 7,163,000 8,417,000 7,700,000 7,651,000 7,666,000 8,293,570 11,027,945 10,947,233 9,559,304 10,867,590
Water main breaks repaired 6 12 5 11 30 15 16 12 15 11
Sewer flows (Millions Gallons per Year) 965 1,625 1,695 1,777 1,833 2,013 1,794 1,815 1,832 2,048
Sewer Service Calls 263 591 522 508 532 501 521 462 451 443
* The City changed its fiscal year end from December 31 to June 30.
SOURCE: City of Muskegon Departments
City of Muskegon
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
Function/Program 2010* 2011 2012 2013 2014 2015 2016 2017 2018 2019
Public Safety
Fire Protection
Number of stations 3 3 3 3 3 3 3 3 3 3
Police Protection
Number of stations 1 1 1 1 1 1 1 1 1 1
Highways, Streets and Bridges
Miles of Streets 196.95 196.95 196.95 196.95 196.95 196.95 196.95 196.95 196.95 197.19
Number of streetlights 3,125 3,065 2,838 2,838 2,838 2,838 2,900 2,984 2,967 2,930
Culture and Recreation
Number of parks (acres) 701 701 701 701 701 701 701 701 701 701
Lake Michigan beaches (acres) 119 119 119 119 119 119 119 119 119 119
Hockey/Entertainment Arena 1 1 1 1 1 1 1 1 1 1
Sewer
146
Sanitary sewers (miles) 177.04 177.04 177.04 177.04 177.04 177.04 177.04 177.04 177.04 177.04
Storm sewers (miles) 184.35 184.35 184.35 184.35 184.25 184.35 184.35 184.35 184.35 184.35
Water
Water mains (miles) 195.69 195.69 195.40 195.95 195.95 195.95 195.95 195.95 195.95 195.27
* The City changed its fiscal year end from December 31 to June 30. 2010 figures are for six months.
SOURCE: City of Muskegon Departments
SINGLE AUDIT OF FEDERAL FINANCIAL ASSISTANCE PROGRAMS
147
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
City Commission
City of Muskegon
Muskegon, Michigan
We have audited, in accordance with the auditing standards generally accepted in the United States of America
and the standards applicable to financial audits contained in the Government Auditing Standards issued by the
Comptroller General of the United States, the financial statements of the governmental activities, the business-
type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining
fund information of City of Muskegon, as of and for the year ended June 30, 2019, and the related notes to the
financial statements, which collectively comprise City of Muskegon’s basic financial statements, and have issued
our report thereon dated December 2, 2019.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered City of Muskegon’s internal
control over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of
expressing an opinion on the effectiveness of City of Muskegon’s internal control. Accordingly, we do not
express an opinion on the effectiveness of City of Muskegon’s internal control.
Our consideration of internal control was for the limited purpose described in the preceding paragraph and was
not designed to identify all deficiencies in internal control that might be material weaknesses or significant
deficiencies and therefore, material weaknesses or significant deficiencies may exist that have not been identified.
However, as described in the accompanying Schedule of Findings and Responses, we identified a certain
deficiency in internal control that we consider to be a material weakness.
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent, or detect and correct
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal
control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements
will not be prevented, or detected and corrected on a timely basis. We consider the deficiency described in the
accompanying Schedule of Findings and Responses to be a material weakness, as Finding 2019-001.
Compliance or Other Matters
As part of obtaining reasonable assurance about whether City of Muskegon’s financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of
our tests disclosed no instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards.
Grand Haven | Grand Rapids | Hart | Muskegon
www.brickleydelong.com
148
BRICKLEY DELONG
City Commission
City of Muskegon
Page 2
City of Muskegon’s Response to Finding
City of Muskegon’s response to the finding identified in our audit is described in the accompanying Schedule of
Findings and Responses. City of Muskegon’s response was not subjected to auditing procedures applied in the
audit of the financial statements and, accordingly, we express no opinion on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the
results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on
compliance. This report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not
suitable for any other purpose.
Muskegon, Michigan
December 2, 2019
149
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL
PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM
GUIDANCE
City Commission
City of Muskegon
Muskegon, Michigan
Report on Compliance for Each Major Federal Program
We have audited City of Muskegon’s compliance with the types of compliance requirements described in the
OMB Compliance Supplement that could have a direct and material effect on each of City of Muskegon’s major
federal programs for the year ended June 30, 2019. City of Muskegon’s major federal programs are identified in
the Summary of Auditor’s Results section of the accompanying Schedule of Findings and Responses.
Management’s Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its
federal awards applicable to its federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of City of Muskegon’s major federal programs
based on our audit of the types of compliance requirements referred to above. We conducted our audit of
compliance in accordance with auditing standards generally accepted in the United States of America; the
standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller
General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200,
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform
Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain
reasonable assurance about whether noncompliance with the types of compliance requirements referred to above
that could have a direct and material effect on a major federal program occurred. An audit includes examining, on
a test basis, evidence about City of Muskegon’s compliance with those requirements and performing such other
procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal
program. However, our audit does not provide a legal determination of City of Muskegon’s compliance.
Opinion on Each Major Federal Program
In our opinion, City of Muskegon complied, in all material respects, with the types of compliance requirements
referred to above that could have a direct and material effect on each of its major federal programs for the year
ended June 30, 2019.
Grand Haven | Grand Rapids | Hart | Muskegon
www.brickleydelong.com
150
BRICKLEY DELONG
City Commission
City of Muskegon
Page 2
Report on Internal Control Over Compliance
Management of City of Muskegon is responsible for establishing and maintaining effective internal control over
compliance with the types of compliance requirements referred to above. In planning and performing our audit of
compliance, we considered City of Muskegon’s internal control over compliance with the types of requirements that
could have a direct and material effect on each major federal program to determine the auditing procedures that are
appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal
program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not
for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we
do not express an opinion on the effectiveness of City of Muskegon’s internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over compliance
does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A
material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal
control over compliance, such that there is a reasonable possibility that material noncompliance with a type of
compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A
significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal
control over compliance with a type of compliance requirement of a federal program that is less severe than a
material weakness in internal control over compliance, yet important enough to merit attention by those charged with
governance.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control over compliance that might be
material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over
compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been
identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal
control over compliance and the results of that testing based on the requirements of the Uniform Guidance.
Accordingly, this report is not suitable for any other purpose.
Muskegon, Michigan
December 2, 2019
151
City of Muskegon
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the year ended June 30, 2019
Accrued Cash or Accrued
Federal Program or (Unearned) Adjustments Payments In- Amount of (Unearned) Passed
Federal Grantor/Pass-Through Grantor/ CFDA Award Revenue and Kind Received Grant Revenue Through to
Program or Cluster Title/Identifying Number Number Amount July 1, 2018 Transfers (Cash Basis) Expenditures June 30, 2019 Subrecipents
U.S. Department of Housing and Urban Development
Direct programs
Community Development Block Grants/Entitlement Grants 14.218
B-14-MC-26-0026 $ 897,025 $ 106,372 $ (18,111) $ 88,261 $ - $ - $ -
B-15-MC-26-0026 895,410 6,544 (286) 6,258 - - -
B-16-MC-26-0026 886,662 166,991 (128,469) 38,147 - 375 -
B-17-MC-26-0026 871,542 211,843 146,866 589,758 258,702 27,653 -
B-18-MC-26-0026 937,658 - - 384,201 499,280 115,079 -
Program Income 61,006 - - 61,006 61,006 - -
Total Community Development Block Grants/
Entitlement Grants 4,549,303 491,750 - 1,167,631 818,988 143,107 -
HOME Investment Partnerships Program 14.239
M-15-MC-26-0215 268,639 17,527 (3,075) 14,452 - - -
M-16-MC-26-0215 264,277 146,173 32,388 149,195 2,093 31,459 -
152
M-17-MC-26-0215 249,537 174,316 (29,313) 145,003 - - -
M-18-MC-26-0215 327,681 - - 119,405 182,886 63,481 -
Program Income 300,010 - - 300,010 300,010 - -
Total HOME Investment Partnerships Program 1,410,144 338,016 - 728,065 484,989 94,940 -
Total U.S. Department of Housing and Urban
Development 5,959,447 829,766 - 1,895,696 1,303,977 238,047 -
City of Muskegon
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS—CONTINUED
For the year ended June 30, 2019
Accrued Cash or Accrued
Federal Program or (Unearned) Adjustments Payments In- Amount of (Unearned) Passed
Federal Grantor/Pass-Through Grantor/ CFDA Award Revenue and Kind Received Grant Revenue Through to
Program or Cluster Title/Identifying Number Number Amount July 1, 2018 Transfers (Cash Basis) Expenditures June 30, 2019 Subrecipents
U.S. Department of Justice
Direct programs
Bulletproof Vest Partnership Grant 16.607
2017 Grant $ 5,570 $ - $ - $ 4,739 $ 4,739 $ - $ -
Edward Byrne Memorial Justice Assistance Grant 16.738
Program
2017-DJ-BX-0961 39,155 - - 39,155 39,155 - -
Total direct programs 44,725 - - 43,894 43,894 - -
Passed through Ottawa County
Edward Byrne Memorial Justice Assistance Grant 16.738
Program
153
2017-MU-BX-0191 14,000 - - - 14,000 14,000 -
Total U.S. Department of Justice 58,725 - - 43,894 57,894 14,000 -
U.S. Environmental Protection Agency
Direct programs
Brownfields Assessment and Cleanup 66.818
Cooperative Agreements
00E01538 400,000 71,753 - 149,040 77,287 - -
U.S. Department of Health and Human Services
Passed through Michigan Department of Health and
Human Services
Children's Health Insurance Program 93.767
E20192797-001 880,005 - - 56,112 92,824 36,712 -
TOTAL FEDERAL ASSISTANCE $ 7,298,177 $ 901,519 $ - $ 2,144,742 $ 1,531,982 $ 288,759 $ -
The accompanying notes are an integral part of this schedule.
City of Muskegon
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the year ended June 30, 2019
1. The accompanying Schedule of Expenditures of Federal Awards (the “schedule”) includes the federal award activity of the City under programs of the federal
government for the year ended June 30, 2019. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule
presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position or change in net position of the City.
2. Please see the financial statement footnotes for the significant accounting policies used in preparing this schedule. Expenditures are recognized following the cost
principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on
the schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. The City is not using the ten-
percent de minimis indirect cost rate as allowed under the Uniform Guidance.
3. The following is a reconciliation of federal revenues as reported on the Statement of Revenues, Expenditures and Changes in Fund Balances of the City of Muskegon's
financial statements for the year ended June 30, 2019 and federal expenditures per the Schedule of Expenditures of Federal Awards.
Federal revenues per City of Muskegon financial statements
General Fund $ 57,894
Major Street and Trunkline Fund 627,218
Other governmental funds 1,113,072
154
1,798,184
Plus program income 361,016
Less MDOT contracted projects as shown below (627,218)
Federal expenditures per the Schedule of Expenditures of Federal Awards $ 1,531,982
4. The Michigan Department of Transportation (MDOT) requires that cities report all federal and state grants pertaining to their city. During the year ended June 30, 2019
the federal aid received and expended by the City of Muskegon was $627,218 for contracted projects as shown below. Contracted projects are defined as projects
performed by private contractors and paid for and administrated by MDOT (they are included in MDOT's single audit). Negotiated projects are projects where the City
of Muskegon administers the grant and either performs the work or contracts it out.
Federal
CFDA Revenue Federal
Number Recognized Expenditures
U.S Department of Transportation, Federal Highway Administration (contracted projects)
Passed through the Michigan Department of Transportation
Highway Planning and Construction (Federal-Aid Highway Program) 20.205
Proj EMRP 1761(016) Fed Item HK 1620 Contract 17-5353 $ 287,218 $ 287,218
Proj 1800(854)(853) Contract 18-5340 340,000 340,000
Total U.S. Department of Transportation,
Federal Highway Administration (contracted projects) $ 627,218 $ 627,218
City of Muskegon
SCHEDULE OF FINDINGS AND RESPONSES
June 30, 2019
SECTION I—SUMMARY OF AUDITOR’S RESULTS
A. Financial Statements
1. Type of report the auditor issued on whether the financial statements audited were prepared in accordance
with GAAP: Unmodified
2. Internal control over financial reporting:
Material weakness(es) identified? X yes no
Significant deficiency(ies) identified? yes X none reported
3. Noncompliance material to financial statements noted? yes X no
B. Federal Awards
1. Internal control over major federal programs:
Material weakness(es) identified? yes X no
Significant deficiency(ies) identified? yes X none reported
2. Type of auditor’s report issued on compliance for major federal programs: Unmodified
3. Any audit findings disclosed that are required to be reported in
accordance with 2 CFR 200.516(a)? yes X no
4. Identification of major programs:
CFDA Number(s) Name of Federal Program/Cluster
U.S. Department of Housing and Urban Development
14.218 Community Development Block Grants/Entitlement
Grants
5. Dollar threshold used to distinguish between type A and type B programs: $750,000
6. Auditee qualified as low-risk auditee? yes X no
155
City of Muskegon
SCHEDULE OF FINDINGS AND RESPONSES
June 30, 2019
SECTION II – FINANCIAL STATEMENT FINDINGS
Finding 2019-001: MATERIAL WEAKNESS—Year-End Closing Procedures for Accounts Payable
Criteria: Costs should be recognized as an expenditure in the appropriate accounting period.
Condition: Certain costs paid after the end of the year were not recorded as payables at year-end.
Cause: The City properly recorded payables for expenditures incurred during the year under audit and paid
after year-end in July, but did not record payables for expenditures incurred during the year under audit and
paid in August or later.
Effect: The City’s expenditures and payables were understated and required adjustment.
Context: We tested disbursements after year-end and identified $307,558 in unrecorded payables.
Repeat Finding: This is not a repeat finding.
Recommendation: The City should review its policies and procedures surrounding year-end payables and
improve them to insure that expenditures are recorded in the correct accounting period.
Views of Responsible Officials: The City agrees with the finding.
SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
There were no findings reported in relation to major federal awards during the single audit for the year ended
June 30, 2019
156
CLIENT DOCUMENTS
157
Affirmative Action
(231)724-6703
FAX (231)722-1214
Assessor/
Equalization Co.
(231)724-6386
FAX (231)724-1129
Cemetery/Forestry
(231)724-6783
FAX (231)724-4188
City Manager
(231)724-6724
FAX (231)722-1214
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
Clerk
(231)724-6705
FAX (231)724-4178
Comm. & Neigh.
December 2, 2019
Services
(231)724-6717 U.S. Department of Housing and Urban Development
FAX (231)726-2501
Washington, D.C.
Computer Info.
Technology
(231)724-4126
FAX (231)722-4301 City of Muskegon respectfully submits the following summary of the current status of prior audit
findings contained in the single audit report for the year ended June 30, 2018 dated December 21,
Engineering 2018.
(231)724-6707
FAX (231)727-6904
SECTION II – FINANCIAL STATEMENT FINDINGS
Finance
(231)724-6713
FAX (231)726-2325 There were no findings reported in relation to the financial statement audit.
Fire Department
(231)724-6795
FAX (231)724-6985 SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
Human Resources
Co. (Civil Service) Finding 2018-001: Time and Effort Documentation Procedures
(231)724-6442
FAX (231)724-6840
U.S. Department of Housing and Urban Development
Income Tax Community Development Block Grant/Entitlement Grants (CDBG)
(231)724-6770 CFDA: 14.218
FAX (231)724-6768
Award Numbers: B-14-MC-26-0026
Mayor’s Office B-15-MC-26-0026
(231)724-6701 B-16-MC-26-0026
FAX (231)722-1214
B-17-MC-26-0026
Planning/Zoning Award Year Ends: No expiration
(231)724-6702
FAX (231)724-6790
Specific Requirement: Allowable Costs/Cost Principles
Police Department
(231)724-6750
FAX (231)722-5140 Recommendation: The City should require all employees who fall under Uniform Guidance
requirements for documenting time charged to federal award programs to properly prepare the
Public Works appropriate after-the-fact time and effort documentation.
(231)724-4100
FAX (231)722-4188
Current Status: The recommendation was implemented during the year ended June 30, 2019. No
SafeBuilt
(Inspections) findings were noted during the single audit for the year ended June 30, 2019.
(231)724-6715
FAX (231)728-4371 Sincerely,
Treasurer
(231)724-6720
FAX (231)724-6768
Elizabeth Lewis
Water Billing Finance Director
(231)724-6718
FAX (231)724-6768
Water Filtration
(231)724-4106
FAX (231)755-5290 158
Affirmative Action
(231)724-6703
FAX (231)722-1214
Assessor/
Equalization Co.
(231)724-6386
FAX (231)724-1129
Cemetery/Forestry
(231)724-6783
FAX (231)724-4188
City Manager
(231)724-6724
FAX (231)722-1214
Clerk
CORRECTIVE ACTION PLAN
(231)724-6705
FAX (231)724-4178 December 2, 2019
Comm. & Neigh.
Services U.S. Department of Housing and Urban Development
(231)724-6717
FAX (231)726-2501 Washington, D.C.
Computer Info.
Technology
(231)724-4126 City of Muskegon respectfully submits the following Corrective Action Plan for the year ended June
FAX (231)722-4301 30, 2019.
Engineering
(231)724-6707 Name and address of independent public accounting firm:
FAX (231)727-6904
Finance
Brickley DeLong, P.C.
(231)724-6713 P.O. Box 999
FAX (231)726-2325 Muskegon, Michigan 49443
Fire Department Audit period: June 30, 2019
(231)724-6795
FAX (231)724-6985
The findings from the Schedule of Findings and Responses for the year ended June 30, 2019 are
Human Resources
Co. (Civil Service) discussed below. The findings are numbered consistently with the numbers assigned in the schedule.
(231)724-6442
FAX (231)724-6840
SECTION II – FINANCIAL STATEMENT FINDINGS
Income Tax
(231)724-6770
FAX (231)724-6768 Finding 2019-001: MATERIAL WEAKNESS – Year-End Closing Procedures for Accounts
Payable
Mayor’s Office
(231)724-6701
FAX (231)722-1214 Recommendation: The City should review its policies and procedures surrounding year-end payables
and improve them to insure that expenditures are recorded in the correct accounting period.
Planning/Zoning
(231)724-6702
FAX (231)724-6790 Action Taken: The Assistant Finance Director will review all payables entered from June 30th until the
Police Department beginning of the audit each year to ensure that payables are posted to the correct fiscal year.
(231)724-6750
FAX (231)722-5140
Responsible Person and Anticipated Completion Date: Assistant Finance Director – September 1,
Public Works 2020.
(231)724-4100
FAX (231)722-4188
SafeBuilt
(Inspections)
(231)724-6715
FAX (231)728-4371
Treasurer
(231)724-6720
FAX (231)724-6768
Water Billing
(231)724-6718
FAX (231)724-6768
Water Filtration
(231)724-4106
FAX (231)755-5290 159
U.S. Department of Housing and Urban Development
December 2, 2019
Page 2
SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
There were no findings reported in relation to major federal awards during the single audit for the year ended June
30, 2019
If the U.S. Department of Housing and Urban Development has questions regarding this plan, please call
Elizabeth Lewis at (231) 724-6917.
Sincerely,
Elizabeth Lewis
Finance Director
160
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: 12/10/2019 Title: Equipment Replacement
Submitted By: Joe Buckingham Department: DPW/Equipment
Brief Summary: The Equipment Division is requesting permission to purchase one (1)
International 2021 HV607 Cab and Chassis from West Michigan International, the Mi Deal
State contract holder. We are also asking permission for Terex Utilities to build and assemble
the aerial boom and body of the truck. The amount requested is $179,509.80.
Detailed Summary:
Amount Requested: $179,509.80 Amount Budgeted: $185,000.00
Fund(s) or Account(s): Equipment CIP fund Fund(s) or Account(s): 661-60932-5730
Recommended Motion: Authorize staff to move forward with purchase.
Check if the following Departments need to approve the item first:
Police Dept.
Fire Dept.
IT Dept.
For City Clerk Use Only:
Commission Action:
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: 12/10/2019 Title: MDOT Agreement – Lakeshore Drive
@ Beach Street
Submitted By: Leo Evans Department: Public Works
Brief Summary: Staff is requesting approval of the contract with MDOT for the construction of the
round-a-bout at Lakeshore Drive and Beach Street and approval of the resolution authorizing the
Mayor and Clerk to sign the contract.
Detailed Summary: This is the standard contract governing projects that are constructed using
federal funds through MDOT. The estimated cost for the project construction is $274,800 with
$250,000 of that being eligible for reimbursement with federal funds through the Congestion,
Mitigation and Air Quality (CMAQ) program.
Amount Requested: $ 0 Amount Budgeted: $ 0
Fund(s) or Account(s): Fund(s) or Account(s):
Recommended Motion:
Approve the attached contract and resolution and authorize the mayor and clerk to sign both.
Check if the following Departments need to approve the item first:
Police Dept.
Fire Dept.
IT Dept.
For City Clerk Use Only:
Commission Action:
RESOLUTION __________
RESOLUTION FOR APPROVAL OF A CONTRACT AGREEMENT BETWEEN THE
MICHIGAN DEPARTMENT OF TRANSPORTATION AND THE CITY OF
MUSKEGON FOR ROUNDABOUT CONSTRUCTION WORK ALONG
LAKESHORE DRIVE AT BEACH STREET, INCLUDING HOT MIX ASPHALT
SURFACING, CONCRETE CURB AND GUTTER, AND PERMANENT PAVEMENT
MARKING WORK.
Moved by Commissioner ______________ and supported by Commissioner
____________ that the following Resolution be adopted:
WHEREAS, entry by the City of Muskegon into Contract no. 19-5543 between the
Michigan Department of Transportation and the City of Muskegon for the
Roundabout construction at the intersection of Lakeshore Drive and Beach
Street within the City is in the best interests of the City of Muskegon.
RESOLVED, that entry by the City into Contract Agreement Number 19-5543 be and
the same is hereby authorized and approved and the Mayor and Clerk are
authorized to execute said contract for and on behalf of the City of Muskegon.
Adopted this ____ day of _______________, 2019.
BY
Stephen J. Gawron, Mayor
ATTEST
Ann Meisch, City Clerk
CERTIFICATION
This resolution was adopted at a meeting of the City Commission, held on
DECEMBER 10, 2019. The meeting was properly held and noticed pursuant to
the Open Meetings Act of the State of Michigan, Act 267 of the Public Acts of
1976.
CITY OF MUSKEGON
By___________________________
Ann Meisch, City Clerk
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: 12/10/2019 Title: Coastal Zone Grant Application
Submitted By: Leo Evans Department: Public Works
Brief Summary: Staff is requesting Commission approval to apply for a Coastal Zone Grant
through the Michigan Department of Environment, Great Lakes, and Energy (MDEGLE) and
approval of the attached resolution.
Detailed Summary: Staff is working towards the submittal of a grant application to the MDEGLE
for a Coastal Zone Grant. The focus of the grant application will be based on providing the city
with a management plan for the 10+ miles of coastline on Lake Michigan and Muskegon Lake that
can be incorporated into the Cities Master Plan to guide decisions about projects that fall along the
coastline. The grant is also intended to help identify best practices for mitigating damage from
flooding and erosion. Grants provide a 50/50 match and applications are due December 20th.
Amount Requested: $ 15,000 +In-Kind Amount Budgeted: $ 0
Services
Fund(s) or Account(s): Split between 101- Fund(s) or Account(s):
80400-5300 (Planning) & 643-60447-5300
(Engineering)
Recommended Motion:
Authorize staff to apply for the coastal zone grant and approve the resolution of support.
Check if the following Departments need to approve the item first:
Police Dept.
Fire Dept.
IT Dept.
For City Clerk Use Only:
Commission Action:
MICHIGAN DEPARTMENT OF ENVIRONMENT, GREAT LAKES, AND ENERGY
WATER RESOURCES DIVISION
COASTAL MANAGEMENT PROGRAM GRANT FUNDING OPPORTUNITY
RESOLUTION OF SUPPORT
Resolution No. __________
City of Muskegon Commission
RESOLUTION APPROVING SUBMISSION OF COASTAL GRANT APPLICATION
FOR Coastal Zone Management Plan
WHEREAS, the City of Muskegon contains over 10 miles of Lake Michigan and Muskegon Lake coastline, and
WHEREAS, there are currently no management plans specifically targeted towards the coastline within the City, and
WHEREAS, funding is available through the Coastal Management Program, and
WHEREAS, total project cost is estimated at about $15,000 + In-Kind Services, 50 percent of which would be funded through the Coastal Program
and 50 percent would be a local match;
NOW, THEREFORE, BE IT RESOLVED, that the Muskegon City Commission approves the submission of the grant application to the Michigan Coastal
Management Program in the amount of $15,000 + In-Kind Services for the development of a Coastal Zone Management Plan and
commits that the local match shall be provided if the project is funded.
Adopted this 10th day of December, 2019.
AYES:
NAYS:
ABSENT:
BY: ______________________________________
ATTEST: __________________________________
MICHIGAN DEPARTMENT OF NATURAL RESOURCES
OFFICE OF THE GREAT LAKES
COASTAL ZONE MANAGEMENT PROGRAM
COASTAL HEATLHY HABITAT, WATERS AND COMMUNITIES INITIATIVE GRANT FUNDING OPPORTUNITY
The State is authorized to provide grant assistance pursuant to the Coastal Zone Management Act of 1972, as amended.
Coastal Zone Management Program
Coastal Healthy Habitat, Waters and Communities Initiative
Table of Contents
I. Introduction .......................................................................................................................... 2
II. CZM Program Objectives .................................................................................................... 3
III. Planning Project Considerations.......................................................................................... 3
IV. Funding Availability .............................................................................................................. 3
A. Who is Eligible............................................................................................................ 3
B. Who is Ineligible ......................................................................................................... 3
C. Grant Amounts ........................................................................................................... 4
D. Match Requirement .................................................................................................... 4
E. Project Award Period ................................................................................................. 4
F. Ineligible Uses for Grant Funds .................................................................................. 4
G. Application Deadline .................................................................................................. 4
H. Application Submittal .................................................................................................. 4
V. Information for Applicants .................................................................................................... 4
VI. Application Package ............................................................................................................ 5
A. Application Cover Page .............................................................................................. 5
B. Proposed Project Summary ....................................................................................... 5
C. Detailed Proposed Project Description ....................................................................... 5
D. Project Tasks and Schedule .......................................................................................... 6
E. Organizational Capability ........................................................................................... 6
F. Detailed Project Budget ............................................................................................. 6
VI. Resolution of Support ............................................................................................................ 7
VII. Supporting Information ........................................................................................................ 7
A. Information Required for Projects Creating Geospatial and Environmental Data ........... 7
B. Data Sharing and Quality Control Requirements ........................................................... 7
Michigan Department of Natural Resources, Office of the Great Lakes | 517-284-5035 | www.michigan.gov/OGL | July 2018
COASTAL ZONE MANAGEMENT PROGRAM
COASTAL HEALTHY HABITAT, WATERS, AND COMMUNITIES INITIATIVE
GRANT FUNDING OPPORTUNITY
The State is authorized to provide grant assistance pursuant to the Coastal Zone Management Act of 1972, as amended.
I. Introduction
Bordered by four Great Lakes, Michigan is graced with the world’s longest freshwater coastline containing
vibrant communities and coastal habitats. The Michigan Coastal Zone Management (CZM) Program,
housed in the Office of the Great Lakes, is committed to protecting, managing, and restoring healthy
coastal habitats and ensuring water quality.
Healthy habitats and waters offer recreational and tourism opportunities in addition to a variety of
beneficial ecological services. Coastal wetlands serve a vital function as habitat for plant and wildlife
species, helps maintain water quality, provides flood storage and erosion control. Michigan has the
world’s largest expanse of freshwater sand dunes and many miles of beaches providing not only scenic
beauty and abundant recreational opportunities, but also provides habitat and erosion control benefits.
These coastal ecosystems support important resources, improve quality of water, provide recreational
opportunities for the public’s use and enjoyment, and increase the resilience of Michigan’s coastal
communities to the effects of changing climate conditions.
The CZM Program is pleased to announce this special funding opportunity made available by the National
Oceanic and Atmospheric Administration (NOAA), pursuant to the Coastal Zone Management Act (CZMA)
of 1972. The CZM Program anticipates $300,000 in grant funds available in the funding cycle covered by
this Grant Funding Opportunity (GFO).
This GFO seeks planning projects that support CZM Program’s mission to preserve, protect, restore, and
enhance coastal ecosystems and facilitate natured-based infrastructure solutions while improving access
to the coast to enhance public use and enjoyment. Successful planning projects selected may be
considered for future Department of Natural Resource funding.
The documents referenced in this GFO can be found at www.michigan.gov/coastalmanagement.
Complete applications will be evaluated for funding based on the following considerations:
• Extent to which the project furthers CZM Program Objectives.
• Clearly identifies the area covered by the planning project.
• Overall quality and clarity of the application.
• Organizational capability of the applicant to complete the project as proposed.
• Project readiness and feasibility for completion within the specified grant period.
• Cost-effectiveness.
• Degree of public benefit to be derived from the project.
• Measurability of project results.
• Level of local support.
The CZM Program encourages interested applicants to contact program staff early in the proposal
development process for assistance and guidance. Questions may be directed to:
Karen Rae Boase, Coastal Habitat Coordinator Madeleine Gorman, Water Quality Coordinator
Phone: (517) 284-5037 Phone: (517) 284-5042
Email: BoaseK@michigan.gov Email: GormanM1@michigan.gov
2
COASTAL ZONE MANAGEMENT PROGRAM
COASTAL HEALTHY HABITAT, WATERS, AND COMMUNITIES INITIATIVE
GRANT FUNDING OPPORTUNITY
The State is authorized to provide grant assistance pursuant to the Coastal Zone Management Act of 1972, as amended.
II. CZM Program Objectives
The CZM Program provides technical assistance and funding opportunities to local partners for creative
coastal projects to assist in the development of vibrant and resilient coastal communities through the
preservation, protection, restoring, and enhancing coastal ecosystems and ensuring water quality and
facilitating nature-based solutions.
III. Planning Project Considerations
Consideration will be given to projects that contain one or more of the following elements:
• Planning projects that lead to implementation.
• Enhance coastal habitats and water quality, utilizing nature-based solutions that creates and
enhance safe access for the public.
• Incorporate community engagement and outreach, including design and installation of
interpretative signage/display.
• Demonstrate the interconnectedness between the protection of critical coastal resources such
as beaches, coastal wetlands, sand dunes, and high-quality waters.
• Build knowledge and utilize metrics on the methodologies, effectiveness, costs, and challenges
associated with implementing nature-based infrastructure solutions.
• Develop and/or utilize metrics for tracking the water quality impacts of the project and incorporate
data collection into the project work plan.
• Provide protection for coastal resources, including activities to prevent the introduction and
spread of new invasive species such as design and installation of interpretive signage/displays
at high quality sites or cleaning/disposal stations for boaters and other recreational users.
• Decreases a coastal community’s negative impacts on their water quality through increased
stormwater infiltration, decreased pollutant loading, and decreased impervious surfaces.
• Recognize the connections between protecting coastal habitats and achieving healthy coastal
waters.
Note: Planning projects shall be located entirely within the approved Michigan CZM Program
coastal boundary.
IV. Funding Availability
A. Who is Eligible
• Coastal units of government including cities, counties, villages and townships.
• Regional planning agencies.
• Universities and school districts.
• Tribal governments.
B. Who is Ineligible
An applicant for whom any of the following existing conditions prior to this GFO is not eligible for
funding:
• Inability to demonstrate financial stability.
• History of inability to manage or meet DNR contractual terms and conditions.
3
COASTAL ZONE MANAGEMENT PROGRAM
COASTAL HEALTHY HABITAT, WATERS, AND COMMUNITIES INITIATIVE
GRANT FUNDING OPPORTUNITY
The State is authorized to provide grant assistance pursuant to the Coastal Zone Management Act of 1972, as amended.
C. Grant Amounts
No less than $10,000 and no greater than $100,000.
D. Match Requirement
A one-to-one, non-federal match is required for all projects. Applicants are to provide documentation of
committed match funds. Match may be in the form of cash, in-kind services, or donations.
E. Project Award Period
The anticipated project start date is January 1, 2019, with an end date no later than December 31,
2019. Projects will be evaluated on project readiness and feasibility for completion within this time
frame.
F. Ineligible Uses for Grant Funds
• Land acquisition projects.
• Plans and designs for general recreational and athletic facilities, such as playground equipment,
ball fields and courts.
• Plans and designs for restroom facilities.
• Dredging projects, including removal of contaminated sediments.
• Purchase of general purpose equipment, such as computers, cameras and/or printers.
• Large-scale beach renourishment projects.
• Shoreline hardened erosion control structures, such as groins, seawalls, etc.
• Private entity benefit.
• Permit fees.
G. Application Deadline
Complete applications must be postmarked or hand-delivered no later than September 4, 2018.
H. Application Submittal
Provide an electronic copy of the application (MS Word, PDF, or other text file) and associated
materials as described below on a CD or USB flash drive (non-returnable) with a hard copy of the
complete package submitted, including a cover letter signed by an authorized representative of the
applicant on the applicant’s letterhead.
Note: Faxed or e-mailed submissions will not be accepted. Late or incomplete applications will
not be considered for funding.
V. Information for Applicants
Applications are considered public information under the Michigan Freedom of Information Act, PA 442
of 1976, as amended.
Successful applicants will be required to enter into a grant agreement with the DNR which includes
standard terms and conditions, which are not subject to modifications. Failure of a successful applicant
to accept these obligations will result in withdrawal of grant offer.
4
COASTAL ZONE MANAGEMENT PROGRAM
COASTAL HEALTHY HABITAT, WATERS, AND COMMUNITIES INITIATIVE
GRANT FUNDING OPPORTUNITY
The State is authorized to provide grant assistance pursuant to the Coastal Zone Management Act of 1972, as amended.
VI. Application Package
Applications can be no more than 12 pages in length with text no smaller than 11-point font size. Maps,
photographs, illustrations, and letters of resolution and support are not subject to overall application
page limit.
A cover letter signed by an authorized representative of the applicant and on the applicant’s letterhead
must accompany the application. Applications are to be submitted to the following:
Ronda Wuycheck, Program Manager
Michigan Coastal Zone Management Program
Office of the Great Lakes
Department of Natural Resources
P.O. Box 30028
Lansing, Michigan 48909-7528
A. Application Cover Page
The cover page should list the project title, location (e.g., city, township, village), county and the
relevant Great Lake or connecting waterway. It must clearly state the grant amount requested, match
amount provided, and total project cost. Information about the applicant must include:
• Applicant agency or organization name.
• Applicant mailing address.
• Authorized representative’s e-mail address.
• Authorized representative’s telephone number.
• Vendor ID/Address code.
• Applicant Federal ID number.
• Applicant DUNS number.
• Name, title and contact information of an organization contact person, if different from that of the
applicant’s authorized representative.
• Congressional District, State Senate District and State House District numbers of the project
location.
B. Proposed Project Summary
Provide a summary (150 words or less) of the proposed project to explain the scope, coastal resources
that are the focus of the effort, coastal significance and primary outcomes of the project.
C. Detailed Proposed Project Description
Provide the following information in the detailed proposed project description:
Project scope, why the project is needed and how it addresses project considerations.
List of key project tasks and the outcome(s) of each task.
List of work products.
Project schedule showing the progress and completion of key project tasks by quarter. The
schedule must show that all tasks will be completed within the project period.
Project includes a field component such as survey(s), educational, training or volunteer
program/activities. The applicant must provide details on how these activities will be conducted
in accordance with the appropriate regulations and will follow recognized best practices and
take the necessary steps to minimize the risk of spreading invasive species and to minimize the
impact to the human environment during this period.
Source of secured match.
5
COASTAL ZONE MANAGEMENT PROGRAM
COASTAL HEALTHY HABITAT, WATERS, AND COMMUNITIES INITIATIVE
GRANT FUNDING OPPORTUNITY
The State is authorized to provide grant assistance pursuant to the Coastal Zone Management Act of 1972, as amended.
Project coordinates in decimal degree format or degrees, minutes, seconds format. If there is
no specific project point location (e.g., regional or statewide study), please provide coordinates
for the location of your organization and label as such.
D. Project Tasks and Schedule
Display time lines for major tasks, target milestones for critical intermediate and final products, and key
project outcomes/deliverables.
Tasks Jan.- April- July- Oct- Work Products /
March June Sept Dec Performance Metrics
2019 2019 2019 2019
1.
2.
3.
4.
5.
E. Organizational Capability
Describe the qualifications of the individual(s) anticipated to work on the project and the experience of
the applicant in managing grant projects.
F. Detailed Project Budget
Download and use one of the following budget forms based on your organization’s approach towards
project indirect costs:
• Use this budget form if the project does not require any reimbursement of indirect costs.
OGL Project Budget Worksheet – Federal and Non Federal Funds
(www.michigan.gov/documents/deq/deq-ogl-BudgetProposal-
FedandNonFedFunds_536539_7.xlsx).
• Use this budget form if the project requires reimbursement of indirect costs, but the applicant
does not have a Negotiated Indirect Cost Rate Agreement (NICRA). This budget form will
calculate the indirect costs utilizing a 10% de minimis rate.
OGL Project Budget Worksheet - 10 Percent De minimis
(www.michigan.gov/documents/deq/deq-ogl-Budget_Proposal-10percent-de-
minimis_536541_7.xlsx).
• Use this budget form if the applicant has a NICRA and is asking for reimbursement of indirect
costs.
OGL Project Budget Worksheet – (NICRA) Federally Negotiated Indirect Cost Rate
(www.michigan.gov/documents/deq/deq-ogl-Budget-Proposal-NICRAFederally-Negotiated-
Rate_536547_7.xlsx).
The completed budget spreadsheet file should be included in the CD or USB flash drive with the
application and will not count toward the application page limit.
Applicants must provide proof of a successful audit for a period ending within the 24 months
immediately preceding the proposal due date and, as appropriate, the organizational NICRA.
6
COASTAL ZONE MANAGEMENT PROGRAM
COASTAL HEALTHY HABITAT, WATERS, AND COMMUNITIES INITIATIVE
GRANT FUNDING OPPORTUNITY
The State is authorized to provide grant assistance pursuant to the Coastal Zone Management Act of 1972, as amended.
VI. Resolution of Support
Applications from local units of government must include a resolution of support or equivalent
authorization from the legislative body. The resolution of support may be included in the submittal as a
hard copy or PDF file and will not count toward the 12-page application limit. An example can be found
at www.mi.gov//documents/deq/deq-ogl-czmp-ResolutionofSupport_407111_7.doc
VII. Supporting Information
A. Information Required for Projects Creating Geospatial and Environmental Data
Environmental Data are defined as recorded and derived observations and measurements of the
physical, chemical, biological, geological and geophysical properties and conditions of the oceans,
atmosphere, space environment, sun and solid earth, as well as correlative data such as
socio-economic data, related documentation and metadata.
Applicants with projects that include such data must submit a completed NOAA Data Sharing Plan
(http://www.michigan.gov/documents/deq/FINAL_NOAA_Data_Sharing_Plan_Document_-_MTW-
GB_434732_7.doc?20130930092422) for each data set to be developed through the project.
The OGL may, at its discretion, make publicly visible the NOAA Data Sharing Plan from funded
proposals, or use information from the NOAA Data Sharing Plan to produce a formal metadata record
and include that metadata in an online inventory to indicate the pending availability of new data.
Projects creating new geospatial or environmental data, if funded, must comply with NOAA data
sharing and quality control requirements summarized below.
B. Data Sharing and Quality Control Requirements
• Geospatial data and environmental data collected and/or created under the project are posted
online.
• Data are provided free of charge or are available at a minimal cost (not to exceed the cost of
distribution to the user).
• Data are made available in a timely manner (typically no later than two (2) years after creation)
except when limited by law, regulation, policy or security requirements.
• Data are understandable to users and available in a form that permits further analysis or reuse.
• Data are in a machine-readable format, and sufficiently documented using open metadata
standards to enable users to independently read and understand the data.
• Data undergo quality control provisions, and a description of the QC process and results are
referenced in the metadata.
The following information, if relevant, is encouraged to increase the competitiveness of the application:
• Explanation of how the proposed project is consistent with existing plans and ordinances.
• Indication of local support for the project, and identification of agencies or organizations
partnering on the project. Letters of support from the public and letters of commitment from
project partners may be included in the application submittal as hard copies or Portable
Document Format (PDF) files and will not count toward the application page limit.
• A letter from each entity contributing match, with amount specified, must be received and will
not count toward the application page limit.
• Description of how the proposed project leverages other technical or financial resources.
The Michigan Department of Natural Resources will not discriminate against any individual or
7
COASTAL ZONE MANAGEMENT PROGRAM
COASTAL HEALTHY HABITAT, WATERS, AND COMMUNITIES INITIATIVE
GRANT FUNDING OPPORTUNITY
The State is authorized to provide grant assistance pursuant to the Coastal Zone Management Act of 1972, as amended.
group on the basis of race, sex, religion, age, national origin, color, marital status, disability,
political beliefs, height, weight, genetic information, or sexual orientation. Questions or
concerns should be directed to the Quality of Life – Office of Human Resources, P.O. Box
30473, Lansing, MI 48909-7973.
8
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Title: Allocation of Expected Muskegon County
Date:12/10/19 Senior Millage (MCSM) Additional Funds
Submitted By: Oneata Bailey Department: CNS
Brief Summary: To approve the described allocations for $85,546 of Muskegon County Senior
Millage funds. This funding is specific to our Senior Citizens, age 60 and older, to coordinate and
provide services, programs, and/or activities in our jurisdiction.
Detailed Summary:
Planning Division is asking for Commission approval to fund the following programs:
The Power of Produce for Senior Citizens on Tuesdays at the Farmers Market. The Fruitport
Lions and the Shoreline Branch of the Lions manage the program to reimburse Farmer’s
through a token-reimbursement system. The Clerk’s Office is asking for funds to extend the
program period into the fall season.
$5,000
Department of Public Works has been replacing water lines in the city. For every
replacement ($6000), these allocated dollars will cover ½ the cost of a Senior Citizen, age 60
or above. The Water Department will use these funds to offset their annual cost of water lines
replaced in our city.
$35,000
Muskegon County Senior Millage Major Home Repair program through the Community
and Neighborhood Services department is currently closed. This Major repair program will
allow for us to serve our citizens who live in housing that is substandard – a threat to safety,
health and life. The need has been greater than our budget.
We will utilize these funds to stretch our CDBG funding of Priority Housing repairs to cover us
until we receive our 2020 allocations from HUD.
$42,046
Muskegon Senior Housing Assistance is a newly framed program to offer Seniors (60 or
older) rental deposits if moving into any of our 4 Senior high-rise locations: Jefferson Tower,
Hartford Terrace, Bayview Towers, or Berkshire. These deposits are to be kept in-house for
other seniors who do not have an adequate deposit to move in.
$3,000
Amount Requested: Amount Budgeted:
Fund(s) or Account(s): MCSM 2020 Fund(s) or Account(s):
Recommended Motion: To accept and allocate additional MCSM award for 2020.
Check if the following Departments need to approve the item first:
Police Dept.
Fire Dept.
IT Dept.
For City Clerk Use Only:
Commission Action:
=
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Title: Approval of Lead Abatement Contract:602
Date:12/10/19 Ada
Submitted By: Oneata Bailey Department: CNS
Brief Summary: To award the Building Contract for the lead abatement of 602 Ada to Badgerows
Building and Remodeling for the City of Muskegon’s Homebuyers Program through CNS.
Detailed Summary:
Lead Abatement Contract for 602 Ada received two bids (below). CNS would like to award the
contract to Badgerows Building and Remodeling for $39,925.
• Nassau Construction $39,950*
• Badgerows Building & Remodel $39,925
*Incomplete bid received.
Amount Requested: Amount Budgeted:
Fund(s) or Account(s): HOME 2018 Fund(s) or Account(s):
Recommended Motion: To award Badgerows Building and Remodeling the lead abatement
contract for 602 Ada; in the amount of $39,925, for the Community and Neighborhood Services
Office.
Check if the following Departments need to approve the item first:
Police Dept.
Fire Dept.
IT Dept.
For City Clerk Use Only:
Commission Action:
=
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date:12/10/19 Title: Approval of Rehab Contract:602 Ada
Submitted By: Oneata Bailey Department: CNS
Brief Summary: To award the Building Contract for the rehabilitation of 602 Ada to Custom Exterior
for the City of Muskegon’s Homebuyers Program through CNS.
Detailed Summary:
Rehabilitation Contract for 602 Ada received three bids (below). CNS would like to award the
contract to Custom Exteriors for $82,560. The following bids include Roof/Alternative
Bids.
• Nassau Construction $80,135
• Badgerows Building & Remodel $87,049**
• Custom Exteriors $82,560
**Excludes Plumbing, Electrical, and Mechanical Costs
Amount Requested: Amount Budgeted:
Fund(s) or Account(s): HOME 2018 Fund(s) or Account(s):
Recommended Motion: To award Custom Exterior the rehabilitation contract for 602 Ada; in the
amount of $ 82,560, for the Community and Neighborhood Services Office.
Check if the following Departments need to approve the item first:
Police Dept.
Fire Dept.
IT Dept.
For City Clerk Use Only:
Commission Action:
=
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date:12/10/19 Title: Approval of Rehab Contract:567 Leonard
Submitted By: Oneata Bailey Department: CNS
Brief Summary: To award the Building Contract for the rehabilitation of 567 Leonard to Badgerows
Building and Remodeling for the City of Muskegon’s Homebuyers Program through CNS.
Detailed Summary:
Rehabilitation Contract for 567 Leonard has been bid twice with no bidders*. Since the
property has been owned by the City for 10 months, CNS sought out a contractor to finish
the rehab project. Badgerows Building and Remodeling has given a price of $47,850.00 –
excluding the Plumbing, Electrical, and Mechanical costs, which are as follows:
• Shields Plumbing $7,230.00
• Jewett Heating and Cooling $6,200.00
• Belasco Electric $10,663.00
*The only other bid received was from an ineligible contractor.
Amount Requested: Amount Budgeted:
Fund(s) or Account(s): HOME 2018 Fund(s) or Account(s):
Recommended Motion: To award Badgerows Building and Remodeling the rehabilitation
contract for 567 Leonard; in the amount of $ 47,850.00 ($71,943 including plumbing, mechanical,
and electrical), for the Community and Neighborhood Services Office.
Check if the following Departments need to approve the item first:
Police Dept.
Fire Dept.
IT Dept.
For City Clerk Use Only:
Commission Action:
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: 12/10/19 Title: NEZ Certificate
Submitted By: Mike Franzak Department: Planning
Brief Summary: Community enCompass has requested the issuance of a Neighborhood
Enterprise Zone Certificate for the newly constructed home at 1245 5th St. The estimated cost of
the new home is $177,000.
Detailed Summary:
Amount Requested: Amount Budgeted:
Fund(s) or Account(s): Fund(s) or Account(s):
Recommended Motion: Approve the NEZ Certificate for 1245 5th Street.
Check if the following Departments need to approve the item first:
Police Dept.
Fire Dept.
IT Dept.
For City Clerk Use Only:
Commission Action:
Resolution No. ________
MUSKEGON CITY COMMISSION
RESOLUTION TO APPROVE THE ISSUANCE
OF A NEIGHBORHOOD ENTERPISE ZONE CERTIFICATE
WHEREAS, an application for a Neighborhood Enterprise Zone Certificate has been filed with
the City Clerk by Community enCompass to construct a home at 1245 5th St in the Nelson
neighborhood, and;
WHEREAS, the applicant has satisfied both the local and state eligibility criteria for a
Neighborhood Enterprise Zone Certificate;
WHEREAS, the local unit of government is allowing the six (6) month grace period after
construction commencement to apply, which is allowed under the law;
WHEREAS, the Neighborhood Enterprise Zone Certificate will be granted for twelve (12) years;
NOW, THEREFORE, BE IT RESOLVED that the application for a Neighborhood Enterprise
Zone Certificate for the new construction of a home by Community enCompass be approved.
Adopted this 10th day of December, 2019.
Ayes:
Nays:
Absent:
By: __________________________
Stephen J. Gawron, Mayor
Attest: _________________________
Ann Meisch
City Clerk
12/5/2019
CERTIFICATION
I hereby certify that the foregoing constitutes a true and complete copy of a resolution adopted
by the City Commission of the City of Muskegon, County of Muskegon, Michigan at a regular
meeting held on December 10, 2019.
By: ________________________
Ann Meisch
City Clerk
12/5/19
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: 12/10/19 Title: Revoking Alley Vacation
Submitted By: Mike Franzak Department: Planning
Brief Summary: Request to rescind the resolution that vacated the alley behind the MATS bus
station and the proposed Leonard building that fronts Western Ave.
Detailed Summary:
Amount Requested: Amount Budgeted:
Fund(s) or Account(s): Fund(s) or Account(s):
Recommended Motion: To rescind the resolution that vacated the alley behind the MATS bus
station and the proposed Leonard building that fronts Western Ave.
Check if the following Departments need to approve the item first:
Police Dept.
Fire Dept.
IT Dept.
For City Clerk Use Only:
Commission Action:
CITY OF MUSKEGON
RESOLUTION #2019-_____
WHEREAS, the City of Muskegon vacated certain streets and alleys in the Muskegon Mall by
Resolution No. 93-141(f), which is recorded at the office of the Muskegon County Register of
Deeds at Liber 1743, pages 316-319; and
WHEREAS, Resolution No. 93-141(f) specifically provided, in paragraph 10 as follows:
10. The 18 foot alley adjacent to Lots 5 through 10 of Block 564, EXCEPT any part thereof
previously vacated, provided the said alleys shall not be vacated until the County of
Muskegon and the Mall owner or their successors reach and execute agreements
regarding easements and access.
WHEREAS, the City of Muskegon amended Resolution 93-141(f) by Resolution No. 94-028(t),
which is recorded at the offices of the Muskegon County Register of Deeds at Liber 1757, page
854 for the purpose of correcting the legal descriptions;
WHEREAS, Resolution No. 94-028(t) specifically provided as follows
(b) That part of Second Street, from the Southeasterly line of Morris Avenue to the
Southeasterly line of the 18 foot alley in Block 564 extended to the Southeasterly line of
the 18 foot alley in Block 565, EXCEPT any part thereof previously vacated, shall not be
vacated until agreements are reached and executed between the Mall owner and the
County of Muskegon or their successors for access and easements to property presently
owned by the County of Muskegon.
WHEREAS, no agreement between the County of Muskegon and Muskegon Properties
Company, Inc., the “Mall owner” in 1993, or any successor, has been reached and executed
relating to easements and access in and around the former Muskegon Mall.
NOW, THEREFORE:
BE IT RESOLVED that the City of Muskegon hereby revokes Resolutions 93-141(f) and 94-
028(t) relating to the 18 foot alley adjacent to Lots 5 through 10 of Block 564.
BE IT FURTHER RESOLVED, that this Resolution shall be recorded with the Register of
Deeds.
Adopted this ___ day of ___________, 2019.
O:\CLERK\Common\Word\Agenda Items for Next Meeting\2019\121019\10b_12N9028-To rescind an alley vacation.DOC
AYES: ________________________________________________________________
NAYES: _______________________________________________________________
ABSENT: ______________________________________________________________
By_____________________________
Stephen J. Gawron
Its Mayor
By_____________________________
Ann Marie Meisch, MMC
Its Clerk
CERTIFICATE
(Resolution rescinding and revoking prior Resolutions vacating the 18 foot alley adjacent
to Lots 5 through 10 of Block 564)
I hereby certify that the foregoing constitutes a true and complete copy of a resolution adopted
by the City Commission of the City of Muskegon, County of Muskegon, Michigan, at a regular
meeting held on _____________, 2019.
CITY OF MUSKEGON
By: ___________________________
Ann Marie Meisch, MMC
Its Clerk
O:\CLERK\Common\Word\Agenda Items for Next Meeting\2019\121019\10b_12N9028-To rescind an alley vacation.DOC
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: December 10, 2019 Title: Non-Union Pay/Benefits
Submitted By: Frank Peterson Department: City Manager
Brief Summary: Staff is seeking approval of the attached 2020 Non-Union Employee Wage and
Benefit Program.
Detailed Summary: The following changes are proposed:
1. Cost of living adjustment of 1.9%
2. Increase in employee residency incentive from 4% to 4.5%
3. Increase in employer contribution to retirement for non-pension employees from 6% to 9%
4. One-time bonus for employees: 0-10 years ($250); 11-20 years ($500; 21+ years ($750).
The additional cost for the fiscal year will be $87,380. No budget amendment will be necessary.
Amount Requested: Amount Budgeted:
Fund(s) or Account(s): Fund(s) or Account(s): N/A
Recommended Motion: Approve the 2020 Non-Union Employee Wage and Benefit Program.
Check if the following Departments need to approve the item first:
Police Dept. Fire Dept. IT Dept.
For City Clerk Use Only:
Commission Action:
SALARY RANGE
RANGE OCCUPANT
START MAXIMUM
RANGE A $ 91,898.47 $ 122,040.60
Assistant City Manager VACANT (NOT HIRING)
RANGE B $ 87,522.36 $ 116,229.15
Public Safety Director Jeff Lewis
Municipal Services Director LeighAnn Mikesell
Finance and Administrative Services Director Beth Lewis
Director of Public Works Leo Evans
RANGE C $ 81,885.67 $ 98,579.03
Assistant Finance Director/Income Tax Administrator Ken Grant
Water Filtration Plant Superintendent Sanjeev Mungarwadi
Information Systems Director Jim Maurer
RANGE D $ 75,511.56 $ 94,412.85
City Clerk Ann Meisch
Deputy Director of Public Safety - Fire Jay Paulsen
City Engineer VACANT
RANGE E $ 63,470.20 $ 84,161.04
City Treasurer Sarah Petersen
Network Administrator Jason Boes
Superintendent of Public Utilities Dave Baker
Superintendent of Public Works Doug Sayles
Community & Neighborhood Services Director Oneata Bailey
RANGE F $ 59,136.35 $ 79,133.40
EEO/Risk Management Director Dwana Thompson
Economic Development Director Jake Eckholm
Director of Strategic Initiatives Peter Wills
Arena Director VACANT
Planning Director Mike Franzak
RANGE G $ 51,510.37 $ 68,581.40
Fleet Maintenance Supervisor* Joe Buckingham
Public Works Supervisor * Amy Behler
Parks Supervisor* Bernadette Young
Public Works Supervisor* Vern Berndt
Public Utility Supervisor* Mike Hannan
Public Utility Supervisor* Wyatt Eggleton
Administrative Services Supervisor - DPW Leigh Ann Archer
Management Assistant - Finance* Mike Vandermolen
Technology Support Specialist Denzel Thomas
Treasury Services Supervisor Peggy Straley
Income Tax Auditor Karen Cornell
Police Records Supervisor Amy Smiley
Assistant City Engineer Joel Brookens
Business Development Manager (DDA) Dave Alexander
Deputy City Clerk Kim Young
RANGE H $ 43,884.38 $ 58,049.48
Special Projects Coordinator Tim Harvey
Police Community Coordinator VACANT
Executive Assistant to City Manager Barb Shullenberger
Executive Assistant to Public Safety Director Danielle Thomas
Code Coordinator Hope Mitchell
Arena Finance Manager VACANT
Planner II Jamie Pesch
Administrative Assistant/Event Coordinator Jacqueline Erny
RANGE I $ 38,835.94 $ 51,315.00
Planner I VACANT
Administrative Assistant - Planning Diane Renkenberger
City Hall Building Maintenance Worker Matt Beerman
City Hall Building Maintenance Worker Terry Spyke
RANGE J $ 34,421.00 $ 46,258.96
Arena Box Office Manager Ambur Lenartowicz
Farmers Market Manager Michelle Primmer
RANGE K $ 29,185.79 $ 42,114.86
Arena Maintenance Worker Ryan Van Ness
Arena Maintenance Worker Gerald Ream
Arena Maintenance Worker VACANT
Arena Maintenance Worker VACANT
2020 NON-UNION SALARY SCHEDULE
CLASSIFICATION STEP 1 STEP 2 STEP 3 STEP 4 STEP 5 STEP 6 STEP 7 STEP 8 STEP 9 STEP 10 STEP 11
RANGE A $ 91,898.47 $ 94,912.69 $ 97,926.90 $ 100,941.11 $ 103,955.32 $ 106,969.54 $ 109,983.75 $ 112,997.96 $ 116,012.17 $ 119,026.38 $ 122,040.60
RANGE B $ 87,522.36 $ 90,393.04 $ 93,263.72 $ 96,133.32 $ 99,004.00 $ 101,875.75 $ 104,733.52 $ 107,616.04 $ 110,486.72 $ 113,357.39 $ 116,229.15
RANGE C $ 81,885.67 $ 83,555.01 $ 85,224.34 $ 86,893.68 $ 88,563.02 $ 90,232.35 $ 91,901.69 $ 93,571.02 $ 95,240.36 $ 96,909.70 $ 98,579.03
RANGE D $ 75,511.56 $ 77,401.69 $ 79,291.82 $ 81,181.95 $ 83,072.08 $ 84,962.21 $ 86,852.33 $ 88,742.46 $ 90,632.59 $ 92,522.72 $ 94,412.85
RANGE E $ 63,470.20 $ 65,539.28 $ 67,608.37 $ 69,678.53 $ 71,746.53 $ 73,815.62 $ 75,884.70 $ 77,952.71 $ 80,023.95 $ 82,093.03 $ 84,161.04
RANGE F $ 59,136.35 $ 61,134.06 $ 63,131.76 $ 65,129.46 $ 67,127.17 $ 69,124.87 $ 71,122.58 $ 73,120.28 $ 75,117.99 $ 77,115.69 $ 79,113.40
RANGE G $ 51,510.37 $ 53,217.47 $ 54,924.57 $ 56,631.67 $ 58,338.77 $ 60,045.87 $ 61,752.97 $ 63,460.07 $ 65,167.17 $ 66,874.26 $ 68,581.40
RANGE H $ 43,884.38 $ 45,300.35 $ 46,716.32 $ 48,134.45 $ 49,550.42 $ 50,966.39 $ 52,381.29 $ 53,826.59 $ 55,215.38 $ 56,633.51 $ 58,049.48
RANGE I $ 38,835.94 $ 40,082.99 $ 41,330.03 $ 42,580.31 $ 43,827.35 $ 45,075.47 $ 46,322.52 $ 47,570.64 $ 48,818.76 $ 50,066.88 $ 51,315.00
RANGE J $ 34,421.00 $ 35,453.63 $ 36,517.24 $ 37,612.76 $ 38,741.14 $ 36,800.52 $ 41,100.42 $ 42,333.49 $ 43,603.50 $ 44,911.60 $ 46,258.96
RANGE K $ 29,185.79 $ 30,478.70 $ 31,771.60 $ 33,064.51 $ 34,357.42 $ 35,650.33 $ 36,943.23 $ 38,236.14 $ 39,529.05 $ 40,821.96 $ 42,114.86
CITY OF MUSKEGON
2020 WAGE MATRIX FOR NON-UNION PART-TIME AND LIMITED TERM EMPLOYEES
Michigan Minimum Wage is $9.65 as of January 1, 2020
JOB TITLE STEP 1 STEP2 STEP 3 STEP 4 STEP 5 STEP 6 STEP 7
GRADE 1 Min. Min +.50 Min + $1
INTERNS AGE 16-17 (Minimum wage for Employees under Age 18)
GRADE 2 11.00 11.50 12.00 12.50 13.00
BUILDING FACILITY CARETAKER
SCHOOL CROSSING GUARD
GRADE 3 12.00 13.00 14.00 15.00 16.00 17.00
INTERN, EXCLUDING PARK INTERN
GRADE 4 11.00 11.50 12.00 12.50
MARINA AIDE
PARK RANGER
GRADE 5 11.50 12.00 12.50 13.00 13.50 14.00
FACILITY SUPERVISOR I
BEACH/PARK RANGERS (PUBLIC SAFETY)
GRADE 6 12.50 13.00 13.50 14.00 14.50 15.50 16.50
FACILITY SUPERVISOR II
ASSISTANT HARBOR MASTER
GRADE 7 12.00 12.50 13.00 14.00 15.00 16.00 17.00
PARK INTERN
GRADE 7 A 12.50 13.00 14.00 15.00 16.00 17.00 18.00
HARBOR MASTER
GRADE 7 B 15.20 15.75 16.28
POLICE RECRUIT
START 500 HRS 1,000 HRS SERVICE
GRADE 8
BOARD OF CANVASSERS $10.00 per hour / 2 hour minimum
BOARD OF REVIEW $12.00 per hour / 4 hour minimum
RECEIVING BOARD $60.00 per day
ELECTION WORKERS (INSPECTORS $11.00 per hour
ELECTION WORKER CHAIRPERSON $13.50 per hour
ELECTION WORKER CO-CHAIRPERS $12.50 per hour
GRADE 9 A 15.00 15.38 15.76 16.15 16.56 16.97 17.40
EVENT SECURITY MANAGER
GRADE 9 B 19.67 20.65 21.68 22.76 23.90
PART TIME POLICE OFFICER
STEP-2 (500 hours); STEP-3 (1000 hours); STEP-4 (1500 hours); STEP-5 (2000 hours)
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: December 10, 2019 Title: Arena Restrooms – Phase 2
Submitted By: Frank Peterson Department: City Manager
Brief Summary: Staff is seeking approval of the attached proposal from Platinum Construction to
renovate the two remaining public restrooms in the arena.
Detailed Summary: The construction of the two new restrooms along the concourse is now
complete. Platinum provided the lowest qualified bid for that work earlier this Fall. They
completed the work on-time and on-budget. In the time since the onset of the original restroom
construction project, it has become clear that a number of major repairs/improvements are needed
in the other existing restrooms (much of the plumbing is original to the building). Additionally, we
remain under code requirements for female toilets. The timing for those repairs is very good from
a project sequencing standpoint, as we still have the Western Ave. restrooms in place (demolition
will occur starting in March) and Platinum is still on site finishing their punch list. Staff asked
Platinum to extend their pricing from the first phase to the second phase. Staff is satisfied that
they have done so, and expects that the best value for the project will come from awarding the
renovation of the second phase of restroom work to Platinum as well. The price is slightly higher
because additional work will be required in the locker rooms below the restroom – but will result in
much-needed improvements to locker room lighting and aesthetics, and will make future restroom
renovations easier because plumbing will be more accessible.
Amount Requested: $281,000 Amount Budgeted: $0
Fund(s) or Account(s): Fund(s) or Account(s): N/A
Recommended Motion: Authorize the City Manager to accept the proposal of $266,173.69 from
Platinum Contracting Group, and authorize a contingency budget of $14,826.31 (5.5%).
Check if the following Departments need to approve the item first:
Police Dept. Fire Dept. IT Dept.
For City Clerk Use Only:
Commission Action:
1 of 3 11/21/2019
Owner Name LC Walker Arena Phase 2 Estimator Anisko
Building SF Checked by:
Location LC Walker - Muskegon Mi Architect AJR
Description Restroom - Budget Pricing Project duration 2.00 months
QB Item Spec Section Description Qty Unit $/Unit Sub Contractor Total
1 Division 1 General Requirements
01-180 Site Superintendent 100% 8 Week $1,817.31 Platinum $ 14,538.46
01-180 Project Manager 30% 8 Week $759.63 Platinum $ 6,077.08
01-140 Project sign 1 Each $400.00 Platinum $ 400.00
01-160 Office supplies 1 LSUM $200.00 Platinum $ 200.00
01-120 Reproductions 2 Month $200.00 Platinum $ 400.00
01-250 Progress Clean-up (4 hrs. / wk.) 4 Week $200.00 Platinum $ 800.00
01-260 Final Clean-Up -- 24 laborer hrs 1 days $1,000.00 Platinum $ 1,000.00
01-280 Dumpsters--20 c.y.. 4 ea $400.00 Platinum $ 1,600.00
01-030 Safety Mtgs.--First Aid--Etc. 2 Month $150.00 Platinum $ 300.00
01-270 FINAL Punch List 5 Days $240.00 Platinum $ 1,200.00
01-010 Permits 1 LSUM $4,500.00 ALLOWANCE $ 4,500.00
01-080 Temporary Gas - Month $0.00 By Owner $ -
01-080 Temporary Electric - Month $0.00 By Owner $ -
01-075 Temporary Enclosures - LSUM $0.00 By Owner $ -
01-075 Temporary Protection / Wall 1 LSUM $500.00 Platinum $ 500.00
Division 1 Total $ 31,515.54
2 Division 2 Site work / Demo
Demolition 1 LSUM $12,600.00 Walsh $ 12,600.00
Division 2 Total $ 12,600.00
3 Division 3 Concrete
Concrete Patch 1 LSUM $750.00 Allowace $ 750.00
Division 3 Total $ 750.00
4 Division 4 Masonry
Division 4 Total $ -
5 Division 5 Metals
Division 5 Total $ -
6 Division 6 Woods and Plastics
Rough Lumber - Blocking 1 LSUM $1,250.00 Allowance $ 1,250.00
General Trades 1 LSUM $6,951.22 Calstra $ 6,951.22
Division 6 Total $ 8,201.22
7 Division 7 Thermal and Moisture Protection
2 of 3 11/21/2019
Insulation - Sound 1 LSUM $0.00 In Drywall $ -
Roofing - Penetrations 5 ea $300.00 Allowance $ 1,500.00
Caulking 1 LSUM $1,560.00 Custom Caulking $ 1,560.00
Division 7 Total $ 3,060.00
8 Division 8 Doors and Windows
Division 8 Total
9 Division 9 Finishes
Framing / Drywall 1 LSUM $15,920.00 D9 $ 15,920.00
Epoxy Flooring - Patching at Sawcuts - Existing flooring 1 LSUM $10,000.00 Bid / Allowance $ 10,000.00
Tile Wet Walls 1 LSUM $12,477.79 Bid $ 12,477.79
Painting - Locker Room Included 1 LSUM $13,980.00 Bid $ 13,980.00
Division 9 Total $ 52,377.79
10 Division 10 Specialties
Toilet Partitions - Includes Install 1 LSUM $23,695.00 SA Morman $ 23,695.00
Bath Accessories 1 LSUM $5,200.00 SA Morman $ 5,200.00
Division 10 Total $ 28,895.00
11 Division 11 Equipment
Division 11 Total $ -
12 Division 12 Furnishings
FFE - Excluded By Owner $ -
Division 12 Total $ -
13 Division 13 Special Construction
By Owner $ -
Division 13 Total $ -
14 Division 14 Conveying Systems
Division 14 Total $ -
15 Division 15 Mechanical
Plumbing: $ -
1 LSUM $62,285.00 Accurate $ 62,285.00
HVAC: $ -
Distribution from Existing 1 LSUM $11,350.00 Allowance $ 11,350.00
Fire Protection: $ -
Relocation / Distribution 1 LSUM $13,175.00 Brigade $ 13,175.00
Division 15 Total $ 86,810.00
16 Division 16 Electrical
Service / Distribution / Finishes / Lighting 1 Lsum $29,289.20 Newton Electric $ 29,289.20
Division 16 Total $ 29,289.20
Project Direct Cost $ 253,498.75 $ 253,498.75
3 of 3 11/21/2019
Insurance - Builders Risk by Owner $ -
Sub total $ 253,498.75
Overhead $ - 0.0%
Profit $ 12,674.94 5%
Total Project Cost $ 266,173.69
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: December 10, 2019 Title: Community Relations Committee
Recommendations
Submitted By: Ann Marie Meisch Department: Clerk
Brief Summary: To accept the addition, resignations, removals and appointments as follows:
• Addition of two positions to the Lakeside Business Improvement District.
• Resignations of Doug Pollock of the downtown Business Improvement District, Gary Post
of the downtown Business Improvement District, and Poppy Sias Hernandez of the
Community Development Block Grant/Citizen’s District Council.
• Removals of Diane Murray-McKinley of the Equal Opportunity Committee and Destinee
Keener of the Equal Opportunity Committee.
• Appointments of Ron Jenkins to the Lakeside Business Improvement District, Allen Serio to
the Lakeside Business Improvement District, Kim Martens to the Farmers Market Advisory
Board, Bruce Lindstrom reappointed to the downtown Business Improvement District, and
Bob Tarrant reappointed to the downtown Business Improvement District.
Amount Requested: N/A Amount Budgeted: N/A
Fund(s) or Account(s): N/A Fund(s) or Account(s): N/A
Recommended Motion: To concur with the recommendations of the Community Relations
Committee and approve the additions, resignations, removals, and appointments.
For City Clerk Use Only:
Commission Action:
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: 12-10-2019 Title: Public Hearing on The Docks
Brownfield Plan, 1490 Edgewater
Submitted By: Dave Alexander Department: Economic Development
Brief Summary: To hold a public hearing on the request for a Brownfield Plan Amendment for The
Docks, 1490 Edgewater for Damfino Development LLC and to consider the attached resolution.
Detailed Summary: Damfino Development proposes a local-only tax capture brownfield plan for the
former Pigeon Hill sand mine property at the west end of Muskegon Lake. Plans are for 240
residential site condominiums needing $18.5 million in initial private capital. The 30-year plan
identifies $20,097,500 in eligible expenses plus interest on borrowing until tax increments pay for
the expenses. Part of eligible expenses is of an estimated $3 million for public infrastructure for the
city’s construction of the traffic circle at Beach Street and Lakeshore Drive, improvements to
Edgewater Street and other roads surrounding the development. The plan estimates The Docks
would create $111.4 million in new property value in the city after 30 years. The plan also includes
$10,000 a year administrative fee to the city. If the 30-year plan pays off expenses early, the city
can have up to five years of additional tax capture for a brownfield revolving fund. The
reimbursement to the developer vs. city would be done on a prorated basis.
Amount Requested: N/A Amount Budgeted: N/A
Fund(s) or Account(s): Fund(s) or Account(s):
Recommended Motion: To close the public hearing and approve the Brownfield Plan Amendment
for The Docks, 1490 Edgewater for Damfino Development LLC with the attached resolution,
authorizing the Mayor and City Clerk to sign.
Check if the following Departments need to approve the item first:
Police Dept.
Fire Dept.
IT Dept.
For City Clerk Use Only:
Commission Action:
RESOLUTION APPROVING THE BROWNFIELD PLAN AMENDMENT
The Docks, 1490 Edgewater
City of Muskegon
County of Muskegon, Michigan
Minutes of a Regular Meeting of the City Commission of the City of Muskegon, County of
Muskegon, Michigan (the “City”), held in the City Commission Chambers on the 10th day of
December, 2019 at 5:30 p.m., prevailing Eastern Time.
PRESENT:
ABSENT:
The following preamble and resolution were offered by Commissioner
___________________ and supported by Commissioner __________________.
WHEREAS, in accordance with the provisions of Act 381, Public Acts of Michigan, 1996,
as amended (“Act 381”), the City of Muskegon Brownfield Redevelopment Authority (the
“Authority”) has prepared and approved a Brownfield Plan Amendment to add The Docks, 1490
Edgewater; and
WHEREAS, the Authority has forwarded the Brownfield Plan Amendment to the City
Commission requesting its approval of the Brownfield Plan Amendment; and
WHEREAS, the City Commission has provided notice and a reasonable opportunity to
the taxing jurisdictions levying taxes subject to capture to express their views and
recommendations regarding the Brownfield Plan Amendment, as required by Act 381; and
WHEREAS, not less than 10 days has passed since the City Commission provided
notice of the proposed Brownfield Plan to the taxing units; and
WHEREAS, the City Commission held a public hearing on the proposed Brownfield Plan
on December 10, 2019.
NOW, THEREFORE, BE IT RESOLVED THAT:
1. That the Brownfield Plan constitutes a public purpose under Act 381.
2. That the Brownfield Plan meets all the requirements of Section 13(1) of Act 381.
3. That the proposed method of financing the costs of the eligible activities, as identified
in the Brownfield Plan and defined in Act 381, is feasible and the Authority has the
authority to arrange the financing.
4. That the costs of the eligible activities proposed in the Brownfield Plan are
reasonable and necessary to carry out the purposes of Act 381.
5. That the amount of captured taxable value estimated to result from the adoption of
the Brownfield Plan is reasonable.
6. That the Brownfield Plan in the form presented is approved and is effective
immediately.
7. That all resolutions or parts of resolutions in conflict herewith shall be and the same
are hereby rescinded.
Be it Further Resolved that the Mayor and City Clerk are hereby authorized to execute
all documents necessary or appropriate to implement the provisions of the Brownfield Plan.
AYES:
NAYS:
RESOLUTION DECLARED APPROVED.
Ann Marie Meisch, City Clerk
Stephen J Gawron, Mayor
I hereby certify that the foregoing is a true and complete copy of a resolution adopted by
the City Commission of the City of Muskegon, County of Muskegon, State of Michigan, at a
regular meeting held on December 10, 2019 and that said meeting was conducted and public
notice of said meeting was given pursuant to and in full compliance with the Open Meetings Act,
being Act 267, Public Acts of Michigan, 1976, as amended, and that the minutes of said meeting
were kept and will be or have been made available as required by said Act.
Ann Marie Meisch, City Clerk
CITY OF MUSKEGON
BROWNFIELD REDEVELOPMENT
AUTHORITY
BROWNFIELD PLAN AMENDMENT
FOR THE DAMFINO DEVELOPMENT, LLC
DEVELOPMENT PROJECT
Original Plan Approved by the Board of the City of Muskegon Brownfield Redevelopment
Authority on February 23, 1998, with subsequent amendments individually approved for
each project.
Original Plan Approved by the City Commission of the City of Muskegon on
April 14, 1998, with subsequent amendments individually approved for each project.
City of Muskegon Brownfield Plan Amendment
Damfino Development, LLC Development Project
CITY OF MUSKEGON
BROWNFIELD REDEVELOPMENT AUTHORITY
BROWNFIELD PLAN
INDEX
Page
I. INTRODUCTION 1
II. GENERAL PROVISIONS 1
A. Costs of the Brownfield Plan 1
B. Method for Financing Costs of Plan 2
C. Duration of the Brownfield Plan 2
D. Displacement/Relocation of Individuals on
Eligible Properties 2
E. Local Brownfield Revolving Fund 2
III. SITE SPECIFIC PROVISIONS 3
A. Kirksey/Anaconda Property (Approved 4/14/98)
B. Dilesco Corporation Property (Approved 8/11/98)
C. Beacon Recycling (Approved 7/11/00)
D. Verplank Dock Company (Approved 5/27/03)
E. Gillespie Development Property (Approved 8/12/03))
F. Loft Properties, LLC Property (Approved 8/12/03)
G. Parmenter O’Toole Property (Approved 8/12/03)
H. “The WaterMark” Project (Approved 5/25/04)
I. Northern Machine Tool (Approved July 13, 2004)
J. Terrace Lots Office Building (Approved July 13, 2004)
K. Art Works Apartments (Approved July 27, 2004)
L. Former Muskegon Mall (Approved October 12, 2004)
M. Vida Nova at Edison Landing (Approved 10/10/06)
N. Western Ave. Properties LLC and Port City Development Services, LLC
(Approved 10/10/06)
O. Viridian Place at Edison Landing (Approved 10/24/06)
P. Hot Rod Harley (Approved March 27, 07)
Q. Sidock Building Project (Approved June 12, 07)
R. Heritage Square Town Homes (Approved 1/8/08)
S. Betten Auto Dealerships (Approved 5/13/08)
T. Parkland Muskegon Mixed Use Project (Approved 6/24/08)
U. Terrace Point Landing Redevelopment Project (Approved 5/14/13)
V. P&G Holdings NY, LLC (01/10/17)
W. Sweetwater Development - The Leonard (3/12/19)
X. 1208 Eighth/Core Development LLC (10/8/19)
Y. Damfino Development, LLC (_______)
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I. INTRODUCTION
In order to promote the revitalization of commercial, industrial, and residential properties
within the boundaries of the City of Muskegon (the “City”), the City established the City
of Muskegon Brownfield Redevelopment Authority (the “Authority”) pursuant to Act 381,
Public Acts of Michigan, as amended (“Act 381) and a resolution adopted by the
Muskegon City Commission on February 10, 1998. Terms defined in Act 381 and
applicable sections of the statute are noted in italics throughout this document.
This Brownfield Plan (“Plan”) was originally intended to address the redevelopment of
eligible properties within the City that are impacted by the presence of hazardous
substances in concentrations that exceed Michigan’s Part 201 Generic Cleanup Criteria
(“facilities”) or that have been determined to be Functionally Obsolete or Blighted. By
facilitating redevelopment of underutilized eligible properties, the Plan is intended to
promote economic growth for the benefit of the residents of the City and all taxing units
located within and benefited by the Authority.
This Plan is intended to be a living document, which can be amended as necessary to
achieve the purposes of Act 381. It is specifically anticipated that properties will be
continually added to the Plan as new projects are identified. The Plan contains general
provisions applicable to the Plan, as well as property-specific information for each
project. The applicable Sections of Act 381 are noted throughout the Plan for reference
purposes.
This Brownfield Plan contains the information required by Section 13(2) of Act 381, as
amended. Additional information is available from the Muskegon City Manager or the
Director of Planning and Economic Development.
II. GENERAL PROVISIONS
A. Costs of the Brownfield Plan (Section 13(2)(a))
Any site-specific costs of implementing this Plan are described in the site-specific
section of the Plan. Site-specific sources of funding may include tax increment financing
revenue generated from new development on eligible brownfield properties, state and
federal grant or loan funds, and/or private parties. Where private parties finance the
costs of eligible activities under the Plan, tax increment revenues may be used to
reimburse the private parties. The initial costs related to preparation of the Brownfield
Plan were funded by the City’s general fund. Subsequent amendments to the Plan may
be funded by the person requesting inclusion of a project in the Plan, and if eligible, may
be reimbursed through tax increment financing.
The Authority intends to pay for administrative costs and all of the things necessary or
convenient to achieve the objectives and purposes of the Authority with fees charged to
applicants to be included in the Plan, and any eligible tax increment revenues collected
pursuant to the Plan, in accordance with the provisions of Act 381, including, but not
limited to:
i) the cost of financial tracking and auditing the funds of the Authority,
ii) costs for amending and/or updating this Plan, including legal fees and
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City of Muskegon Brownfield Plan Amendment
Damfino Development, LLC Development Project
iii) costs for Plan implementation
Tax increment revenues that may be generated and captured by this Plan are identified
in the site-specific sections of this Plan.
B. Method for Financing Costs of Plan and Bonded Indebtedness(Section 13(2)(d)
and (e))
The City or Authority may incur some debt on a site-specific basis. Please refer to the
site-specific section of the Plan for details on any debt to be incurred by the City or
Authority. When a property proposed for inclusion in the Plan is in an area where tax
increment financing is a viable option, the Authority intends to enter into Development
and Reimbursement Agreement with the property owners/developers of properties
included in the Plan to reimburse them for the costs of eligible activities undertaken
pursuant to the Plan. Financing arrangements will be specified in a Development and
Reimbursement Agreement, and also in the Site Specific section of the Plan.
C. Duration of the Brownfield Plan (Section 13(2)(f))
The Plan, as it applies to a specific eligible property, shall be effective up to five (5)
years after the year in which the total amount of any tax increment revenue captured is
equal to the total costs of eligible activities attributable to the specific eligible property, or
thirty (30) years from the date of first tax capture under the Plan as it relates to an
individual site, whichever is less. The total costs of eligible activities include the cost of
principal and interest on any note or obligation issued by the Authority to pay for the
costs of eligible activities, the reasonable costs of a Work Plan, the actual costs of the
Michigan Environmental Great Lakes & Energy or Michigan Strategic Fund’s review of
the Work Plan and implementation of the eligible activities.
D. Displacement/Relocation of Individuals on Eligible Properties
(Section 13(2)(i),(j)(k)(l)
At this time, eligible properties identified in the Plan do not contain residences, nor are
there any current plans or intentions by the City for identifying eligible properties that will
require the relocation of the residences. Therefore the provisions of Section 13(2)(i-l)
are not applicable at this time.
E. Local Brownfield Revolving Fund (Section 8; Section 13(5)(b))
Whenever the Plan includes a property for which taxes will be captured through Tax
Increment Financing (“TIF”) provided by Act 381, it is the Authority's intent to establish a
Local Brownfield Revolving Fund ("Fund"). The Fund will consist of tax increment
revenues that exceed the costs of eligible activities incurred on an eligible property, as
specified in Section 13(5) of Act 381. Section 13(5) authorizes the capture of TIF from
an eligible property for up to 5 years after the time that capture is required for the
purposes of reimbursing the costs of eligible activities identified in the Plan. It is the
intention of the Authority to continue to capture tax increment revenues for 5 years after
eligible activities are funded from those properties identified for tax capture in the Plan,
provided that the time frame allowed by Act 381 for tax capture is sufficient to
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Damfino Development, LLC Development Project
accommodate capture to capitalize a Fund. The amount of school operating taxes
captured for the Fund will be limited to the amount of school operating taxes captured for
eligible department specific activities under the Plan. It may also include funds
appropriated or otherwise made available from public or private sources.
The Fund may be used to reimburse the Authority, the City, and private parties for the
costs of eligible activities at eligible properties and other costs as permitted by Act 381.
It may also be used for eligible activities on an eligible property for which there is no
ability to capture tax increment revenues. The establishment of the fund will provide
additional flexibility to the Authority in facilitating redevelopment of brownfield properties
by providing another source of financing for necessary eligible activities.
III. SITE SPECIFIC PROVISIONS
Y. Damfino Development, LLC Redevelopment Project
Eligibility and Project Description(Sec. 13(2)(h))
Project Description
Damfino Development, LLC (“Damfino”) intends to develop the approximately 76.17
acres of vacant land consisting of 1490 Edgewater St, 1875 Waterworks Rd and 3400,
3460 & 3474 Wilcox Ave in Muskegon, MI (collectively, the “Property”) into a residential
site condominium project (the “Project”). The Project will include the development of 240
new market-rate site condominiums that will range in size from 900 to 3,500 square feet,
as well as construction of a marina, green space, site improvements and landscaping.
Additionally, the City of Muskegon will construct a traffic circle at Lakeshore Drive and
Beach Street and road improvements to Edgewater Street. A proposed site plan is
included in Attachment U-2.
The private capital investment to complete the Project is estimated to be approximately
$18.5 million with approximately $8.9 million required to address the Site Preparation
costs alone.
The eligible property comprising the Damfino Development, LLC Redevelopment Project
included in this Plan consists of the Property in Muskegon, Michigan (see Attachment U-
1). The Property includes the following addresses and parcel numbers that make up the
Property’s legal description below:
Address: 1490 Edgewater Street (#24-205-735-0001-00)
1875 Waterworks Rd (#24-205-733-0001-00)
3400 Wilcox Ave (#24-205-727-0008-00)
3460 Wilcox Ave (#24-205-727-0005-00)
3474 Wilcox Ave (#24-505-001-0016-00)
Legal Description:
PUD DESCRIPTION:
PART OF SECTIONS 27, 28 AND 33. TOWN 10 NORTH, RANGE 17 WEST, CITY OF
MUSKEGON, MUSKEGON COUNTY. MICHGAN MORE PARTICULARLY DESCRIBED AS:
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City of Muskegon Brownfield Plan Amendment
Damfino Development, LLC Development Project
BEGINING AT THE NORTHWEST CORNER OF THE PLAT Of EDGEWATER SUBDIVISION,
MUSKEGON COUNTY, RECORDED IN LIBER 3, PAGE 82 OF PLATS, MUSKEGON COUNTY
RECORDS; THENCE SOUTH 89°29’03” EAST 552.46 FEET ALONG THE NORTH LINE OF SAID
PLAT; THENCE NORTH 43°49’09” EAST 253.30 FEET TO AN INTERMEDIATE TRAVERSE LINE:
THENCE SOUTH 28°34’30” EAST 210.94 FEET ALONG SAID TRAVERSE LINE; THENCE NORTH
89°29’03” WEST 59.11 FEET; THENCE SOUTH 34°09’03” EAST 355.45 FEET; THENCE SOUTH
40°59’03” EAST 339.11 FEET; THENCE SOUTH 28 09 03 EAST 161.84 FEET THENCE SOUTH 13
06 00 EAST 41.29 FEET; THENCE SOUTH 12 28 31 EAST 22.46 FEET; THENCE SOUTH 77 33 28
WEST 40.00 FEET; THENCE SOUTHWESTERLY 137.93 FEET ALONG A 42.00 FOOT RADIUS
CURVE TO THE LEFT THE LONG CHORD 0F WHICH BEARS SOUTH 05°38’30” WEST 83.79
FEET; THENCE SOUTHEASTERLY 17.20 FEET ALONG A 13.00 FOOT RADIUS CURVE TO THE
RIGHT THE LONG CHORD OF WHICH BEARS SOUTH 50°34’18” EAST 15.97 FEET; THENCE
SOUTH 12°40’12” EAST 16.70 FEET TO THE NORTH LINE OF LOT 80 EDGEWATER
SUBDIVISION; THENCE NORTH 88°52’41” WEST ALONG SAID LINE 111.50 FEET TO THE WEST
LINE OF LOTS 8O, 79 AND 78 THENCE SOUTH 01°26’07” WEST 149.95 FEET ALONG SAID
LINES TO THE NORTH LINE OF BRIGHTON AVENUE; THENCE NORTH 88°51’47” WEST 50.20
FEET ALONG SAID NORTH LINE THENCE SOUTH 01°14’28” WEST 50.00 FEET TO THE SOUTH
LINE OF BRIGHTON AVENUE; THENCE SOUTH 00°20’44” WEST 125.07 FEET ALONG THE
WEST LINE OF LOT 66 TO THE NORTH LINE OF LOT 58 THENCE NORTH 88°52’43” WEST 47.22
FEET ALONG SAID NORTH LINE TO THE WEST LINE OF LOT 56; THENCE SOUTH 01°30’48”
WEST 130.68 FEET ALONG SAID WEST LINE TO THE NORTH LINE OF WINDWARD DRIVE;
THENCE NORTH 89°50’32” WEST 49.87 FEET ALONG SAID NORTH LINE; THENCE SOUTH
00°48’23” WEST 49.88 FEET TO THE SOUTH LINE OF WINDWARD DRIVE; THENCE SOUTH
01°27’15” WEST 247.99 FEET ALONG THE WEST LINE Of LOTS 46 AND 30 TO THE NORTH LINE
OF ARLINGTON AVENUE; THENCE NORTH 88°56’52” WEST 195.83 FEET ALONG SAID NORTH
LINE; THENCE SOUTH 01°03’08” WEST 49.41 FEET TO THE SOUTH LINE OF ARLINGTON
AVENUE; THENCE SOUTH 02°50’00” WEST 153.95 FEET ALONG THE WEST LINE OF LOT 25;
THENCE SOUTH 01°02’00” WEST ALONG THE WEST LINE OF LOT 96 106.00 FEET; THENCE
NORTH 88°40’16” WEST 4.66 FEET; THENCE SOUTH 00°59’44” WEST 96.55 FEET: THENCE
NORTH 81°17’14” EAST 54.31 FEET TO THE NORTHWEST CORNER OF LOT 9; THENCE
SOUTH 22°01’33” WEST ALONG THE WEST LINE OF LOTS 9 AND 8. 70.00 FEET; THENCE
SOUTH 13°03’15” WEST ALONG THE WEST LINE OF LOT 8, 30.00 FEET; THENCE NORTH
89°22’50” EAST ALONG THE SOUTH LINE OF LOT 8, 30.00 FEET TO THE NORTHWEST
CORNER OF LOT 7; THENCE SOUTH 08°39’17” WEST ALONG THE WEST LINE OF LOTS 7
THROUGH 1, 400.75 FEET TO THE NORTH LINE OF LOTS 1 THROUGH 13 BLOCK 726 AND
LOTS 1 THROUGH 4 BLOCK 727 OF THE REVISED PLAT OF 1903 OF THE CITY OF
MUSKEGON; THENCE SOUTH 64°37’05” WEST 405.01 FEET ALONG SAID NORTH LINE;
THENCE NORTH 88°19’39” WEST 585.28 FEET; THENCE SOUTH 06°38’09” WEST 115.76 FEET;
THENCE SOUTHWESTERLY 41.54 FEET ALONG A 374.00 FOOT RADIUS CURVE TO THE
RIGHT THE LONG CORD OF WHICH BEARS SOUTH 09°49’04” WEST 41.52 FEET; THENCE
SOUTH 13°00’00” WEST 145.00 FEET; THENCE SOUTHEASTERLY 77.19 FEET ALONG A 126.00
FOOT RADIUS CURVE TO THE LEFT THE LONG CHORD OF WHICH BEARS SOUTH 04°32’57”
EAST 75.98 FEET TO THE NORTHERLY LINE OF WILCOX AVENUE; THENCE NORTH 60°53’14”
WEST 9.25 FEET ALONG SAID NORTH LINE TO THE WEST LINE Of WILCOX AVENUE; THENCE
SOUTH 28°52’03” WEST 65.92 FEET ALONG SAID WEST LINE TO THE SOUTHERLY LINE OF
WILCOX AVENUE; THENCE SOUTH 61°06’53” EAST 38.40 FEET ALONG SAID SOUTHERLY LINE
TO THE WESTERLY LINE OF WATERWORKS ROAD; THENCE SOUTH 43°38’07” WEST 26.57
FEET ALONG SAID WESTERLY LINE; THENCE NORTH 23°38’13” WEST 71.22 FEET; THENCE
NORTHERLY 80.57 FEET ALONG A 126.00 FOOT RADIUS CURVE TO THE RIGHT THE LONG
CHORD OF WHICH BEARS NORTH 05°19’06” WEST 79.20 FEET; THENCE NORTH 13°00’00”
EAST 179.32 FEET; THENCE NORTHEASTERLY 36.21 FEET ALONG 326.00 FOOT RADIUS
CURVE TO THE LEFT THE LONG CHORD OF WHICH BEARS NORTH 09°49’04” EAST 36.19 FEET;
THENCE NORTH 06°38’09” EAST 111.50 FEET; THENCE NORTH 88°19’39” WEST 343.68 FEET TO
A PONT ON THE WESTERLY LINE OF LOT 16, LAKE MICHIGAN PARK SUBDIVISION; THENCE
4 11/7/2019
City of Muskegon Brownfield Plan Amendment
Damfino Development, LLC Development Project
NORTH 10°53’28” EAST 132.41 FEET ALONG THE WEST LINE OF SAID LOT 16 TO THE NORTH
LINE OF LAKE MICHIGAN PARK SUBDIVISION; THENCE NORTH 89°09’46” WEST 421.63 FEET
ALONG SAID NORTH LINE; THENCE NORTH 24°28’10” WEST 562.33 FEET ALONG SAID
SUBDIVISION; THENCE NORTH 60°19’21” WEST 60.35 FEET ALONG SAID SUBDIVISION TO THE
SOUTH LINE OF CENTRAL LAND CO’S SUBDIVISION NO 1; THENCE SOUTH 89°01’47” EAST
271.08 FEET ALONG SAID SOUTH LINE TO THE SOUTHWEST CORNER OF HARBOUR TOWNE
CONDOMINIUM, AS RECORDED IN LIBER 4077, PAGE 496; THENCE SOUTH 89°01’47” EAST
902.40 FEET (RECORDED AS N89’58’46’W 902.68’) ALONG THE SOUTH LINE OF SAID
CONDOMINIUM TO THE SOUTHEAST CORNER OF SAID CONDOMINIUM; THENCE NORTH
02°47’15” EAST 2002.66 FEET (RECORDED AS S01°52’29”W 2002.66’) ALONG THE EAST LINE OF
SAID CONDOMINIUM TO THE NORTHEAST CORNER OF SAID CONDOMINIUM AND THE
NORTHWEST CORNER OF THE PLAT OF EDGEWATER SUBDIVISION AND THE PONT OF
BEGINNING. INCLUDING THE LAND BETWEEN THE INTERMEDIATE TRAVERSE LINE AND THE
SHORE OF MUSKEGON LAKE.
ALSO INCLUDING THE LAND BETWEEN VACATED LAKE (ALSO KNOWN AS EDGEWATER)
STEET AND THE SHORE OF MUSKEGON LAKE LYING SOUTHERLY OF THE NORTH LINE
OF LOT 95 EXTENDED TO THE WATER AND NORTHERLY OF THE SOUTH LINE OF LOT 82
EXTENDED TO THE SHORE.
SAID PARCEL CONTAINS 3,317.981 SQ FT WHICH IS 76.17 ACRES OF LAND MORE OR LESS.
This eligible property includes all existing real and all new personal property.
The eligible property is considered a “facility” pursuant to Part 201. The eligible property
had concentrations of chromium (total) in excess of residential direct contact cleanup
criteria. Therefore, the eligible property is considered a “facility” pursuant to Part 201
and is therefore an eligible property pursuant to Act 381 of 1996, as amended.
Eligible Activities, Financing, Cost of Plan (Sec. 13(2)(a),(b),(c),(g))
Eligible activities included for reimbursement consist of demolition, site preparation,
infrastructure improvements, interest, and brownfield plan/work plan preparation and
development (see chart below).
Eligible Activities
Demolition $ 550,000
Site Preparation $ 8,950,000
Infrastructure Improvements
- Private (Damfino) $ 4,900,000
- Public (City) $ 3,050,000
Sub-total $ 17,450,000
Contingency (15%) $ 2,617,500
Interest – Calculated annually at the current Applicable
Federal Rate (Currently 1.94%) TBD
Brownfield Plan/Work Plan Preparation and Development $ 30,000
Total Eligible Activities
to be paid for under this Plan $ 20,097,500*
5 11/7/2019
City of Muskegon Brownfield Plan Amendment
Damfino Development, LLC Development Project
The eligible activities described above will occur on the Property and are further
described as follows:
1. Demolition: Demolition will include site demolition of the conveyor
tunnel and foundations and removal of the water based mooring cells.
Demolition is necessary in order to prepare the Property for the proposed
improvements.
2. Site Preparation: Site Preparation on the Property will include
geotechnical engineering, mass grading/land balancing, clearing and
grubbing, dewatering, erosion control, wetland mitigation, and retaining
wall installation that are necessary to prepare the Property for the
proposed improvements.
3. Infrastructure Improvements: Infrastructure Improvements will include civil
engineering and construction of new public roadways, curb, gutter,
installation of new utilities (i.e. water mains, sanitary sewer, storm sewer,
electrical, gas, lift station upgrades), sidewalks, landscaping, and lighting.
In addition, the City of Muskegon will be completing road improvements
on Lakeshore Drive, Beach Street, Waterworks Road, Edgewater Street,
Pere Marquette Boardwalk paving, and repaving ovals.
4. Contingency: A contingency of 15% is included to account for any
unexpected costs during completion of the eligible activities.
5. Interest: Eligible Activities will be reimbursed with interest calculated
annually at the Applicable Federal Rate.
6. Brownfield/Work Plan Preparation and Development: Costs incurred
to prepare and develop this brownfield plan and a work plan, as required
per Act 381 of 1996, as amended.
An estimate of the captured taxable value and tax increment revenues, which includes
the impact on the taxing jurisdictions, is attached as Attachment U-3.
The cost to conduct the Project eligible activities included in this Plan will be initially
provided by Damfino Development, LLC and they will seek reimbursement for eligible
activities through tax increment financing from local taxes as applicable. The City will
incur the costs for the City eligible activities and they will seek reimbursement for eligible
activities through tax increment financing from local taxes as applicable. It is intended
that the Authority will capture 100% of the captured taxable value from the Property to
reimburse the Developer and City for eligible activities incurred for the Project. The
Developer and City will be reimbursed on a prorata basis based on the total eligible
activities approved for reimbursement. No advances via bond or notes will be made
from the City for this Plan.
Effective Date of Inclusion in Brownfield Plan
6 11/7/2019
City of Muskegon Brownfield Plan Amendment
Damfino Development, LLC Development Project
The Damfino Development, LLC Redevelopment Project was added to this Plan on
______, 2019.
19131419
7 11/7/2019
City of Muskegon Brownfield Plan Amendment
Damfino Development, LLC Development Project
ATTACHMENT U-1
SITE MAP
DAMFINO DEVELOPMENT, LLC DEVELOPMENT
PROJECT
8 11/7/2019
City of Muskegon Brownfield Plan Amendment
Damfino Development, LLC Development Project
ATTACHMENT U-2
PROPOSED SITE PLAN
DAMFINO DEVELOPMENT, LLC DEVELOPMENT
PROJECT
9 11/7/2019
City of Muskegon Brownfield Plan Amendment
Damfino Development, LLC Development Project
ATTACHMENT U-3
TAX INCREMENT FINANCING TABLE
DAMFINO DEVELOPMENT, LLC DEVELOPMENT
PROJECT
10 11/7/2019
Tax Increment Revenue Capture Estimates
Damfino Development
Muskegon, Michigan
November 7, 2019
Estimated Taxable Value (TV) Increase Rate:
1.00% per year
Plan Year 1 2 3 4 5 6 7 8 9 10 11
Calendar Year 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Base Taxable Value $ 819,679 $ 819,679 $ 819,679 $ 819,679 $ 819,679 $ 819,679 $ 819,679 $ 819,679 $ 819,679 $ 819,679 $ 819,679
Estimated New TV $ 819,679 $ 819,679 $ 1,000,000 $ 7,573,500 $ 15,893,235 $ 21,012,667 $ 27,679,294 $ 33,822,087 $ 38,422,308 $ 42,635,531 $ 47,759,886
Incremental Difference (New TV - Base TV) $ - $ - $ 180,321 $ 6,753,821 $ 15,073,556 $ 20,192,988 $ 26,859,615 $ 33,002,408 $ 37,602,629 $ 41,815,852 $ 46,940,207
School Capture Millage Rate
State Education Tax (SET) 6.0000 $ - $ - $ 1,082 $ 40,523 $ 90,441 $ 121,158 $ 161,158 $ 198,014 $ 225,616 $ 250,895 $ 281,641
School Operating Tax 18.0000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
School Total 24.0000 $ - $ - $ 1,082 $ 40,523 $ 90,441 $ 121,158 $ 161,158 $ 198,014 $ 225,616 $ 250,895 $ 281,641
Local Capture Millage Rate
City Operating 10.0869 $ - $ - $ 1,819 $ 68,125 $ 152,045 $ 203,685 $ 270,930 $ 332,892 $ 379,294 $ 421,792 $ 473,481
County Operating 5.6984 $ - $ - $ 1,028 $ 38,486 $ 85,895 $ 115,068 $ 153,057 $ 188,061 $ 214,275 $ 238,283 $ 267,484
City Sanitation 3.0000 $ - $ - $ 541 $ 20,261 $ 45,221 $ 60,579 $ 80,579 $ 99,007 $ 112,808 $ 125,448 $ 140,821
County Museum 0.3221 $ - $ - $ 58 $ 2,175 $ 4,855 $ 6,504 $ 8,651 $ 10,630 $ 12,112 $ 13,469 $ 15,119
Senior Services 0.4998 $ - $ - $ 90 $ 3,376 $ 7,534 $ 10,092 $ 13,424 $ 16,495 $ 18,794 $ 20,900 $ 23,461
County Veterans 0.0752 $ - $ - $ 14 $ 508 $ 1,134 $ 1,519 $ 2,020 $ 2,482 $ 2,828 $ 3,145 $ 3,530
County Qual Life 0.2400 $ - $ - $ 43 $ 1,621 $ 3,618 $ 4,846 $ 6,446 $ 7,921 $ 9,025 $ 10,036 $ 11,266
Central Dispatch 0.3000 $ - $ - $ 54 $ 2,026 $ 4,522 $ 6,058 $ 8,058 $ 9,901 $ 11,281 $ 12,545 $ 14,082
Comm College 2.2037 $ - $ - $ 397 $ 14,883 $ 33,218 $ 44,499 $ 59,191 $ 72,727 $ 82,865 $ 92,150 $ 103,442
MAISD 4.7580 $ - $ - $ 858 $ 32,135 $ 71,720 $ 96,078 $ 127,798 $ 157,025 $ 178,913 $ 198,960 $ 223,342
Hackley Library 2.4000 $ - $ - $ 433 $ 16,209 $ 36,177 $ 48,463 $ 64,463 $ 79,206 $ 90,246 $ 100,358 $ 112,656
Local Total 29.5841 $ - $ - $ 5,335 $ 199,806 $ 445,938 $ 597,391 $ 794,618 $ 976,347 $ 1,112,440 $ 1,237,084 $ 1,388,684
Non-Capturable Millages Millage Rate
Comm College Debt 0.3400 $ - $ - $ 61 $ 2,296 $ 5,125 $ 6,866 $ 9,132 $ 11,221 $ 12,785 $ 14,217 $ 15,960
Hackley Debt 0.5611 $ - $ - $ 101 $ 3,790 $ 8,458 $ 11,330 $ 15,071 $ 18,518 $ 21,099 $ 23,463 $ 26,338
MPS Debt - 1995 4.0700 $ - $ - $ 734 $ 27,488 $ 61,349 $ 82,185 $ 109,319 $ 134,320 $ 153,043 $ 170,191 $ 191,047
MPS Debt - 2009 3.2900 $ - $ - $ 593 $ 22,220 $ 49,592 $ 66,435 $ 88,368 $ 108,578 $ 123,713 $ 137,574 $ 154,433
Total Non-Capturable Taxes 8.2611 $ - $ - $ 1,490 $ 55,794 $ 124,524 $ 166,816 $ 221,890 $ 272,636 $ 310,639 $ 345,445 $ 387,778
Total Tax Increment Revenue (TIR) Available for Capture $ - $ - $ 6,417 $ 240,329 $ 536,379 $ 718,549 $ 955,775 $ 1,174,361 $ 1,338,056 $ 1,487,979 $ 1,670,325
Footnotes:
Assumes millage rate remains the same
with 1% inflation on
taxable values and homestead units
April 2017
Tax Increment Revenue Capture Estimates
Damfino Development
Muskegon, Michigan
November 7, 2019
Estimated Taxable Value (TV) Increase Rate:
Plan Year 12 13 14 15 16 17 18 19 20 21 22
Calendar Year 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040
Base Taxable Value $ 819,679 $ 819,679 $ 819,679 $ 819,679 $ 819,679 $ 819,679 $ 819,679 $ 819,679 $ 819,679 $ 819,679 $ 819,679
Estimated New TV $ 48,237,485 $ 48,719,860 $ 49,207,059 $ 49,699,129 $ 50,196,120 $ 50,698,082 $ 51,205,062 $ 51,717,113 $ 52,234,284 $ 52,756,627 $ 53,284,193
Incremental Difference (New TV - Base TV) $ 47,417,806 $ 47,900,181 $ 48,387,380 $ 48,879,450 $ 49,376,441 $ 49,878,403 $ 50,385,383 $ 50,897,434 $ 51,414,605 $ 51,936,948 $ 52,464,514
School Capture Millage Rate
State Education Tax (SET) 6.0000 $ 284,507 $ 287,401 $ 290,324 $ 293,277 $ 296,259 $ 299,270 $ 302,312 $ 305,385 $ 308,488 $ 311,622 $ 314,787
School Operating Tax 18.0000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
School Total 24.0000 $ 284,507 $ 287,401 $ 290,324 $ 293,277 $ 296,259 $ 299,270 $ 302,312 $ 305,385 $ 308,488 $ 311,622 $ 314,787
Local Capture Millage Rate
City Operating 10.0869 $ 478,299 $ 483,164 $ 488,079 $ 493,042 $ 498,055 $ 503,118 $ 508,232 $ 513,397 $ 518,614 $ 523,883 $ 529,204
County Operating 5.6984 $ 270,206 $ 272,954 $ 275,731 $ 278,535 $ 281,367 $ 284,227 $ 287,116 $ 290,034 $ 292,981 $ 295,958 $ 298,964
City Sanitation 3.0000 $ 142,253 $ 143,701 $ 145,162 $ 146,638 $ 148,129 $ 149,635 $ 151,156 $ 152,692 $ 154,244 $ 155,811 $ 157,394
County Museum 0.3221 $ 15,273 $ 15,429 $ 15,586 $ 15,744 $ 15,904 $ 16,066 $ 16,229 $ 16,394 $ 16,561 $ 16,729 $ 16,899
Senior Services 0.4998 $ 23,699 $ 23,941 $ 24,184 $ 24,430 $ 24,678 $ 24,929 $ 25,183 $ 25,439 $ 25,697 $ 25,958 $ 26,222
County Veterans 0.0752 $ 3,566 $ 3,602 $ 3,639 $ 3,676 $ 3,713 $ 3,751 $ 3,789 $ 3,827 $ 3,866 $ 3,906 $ 3,945
County Qual Life 0.2400 $ 11,380 $ 11,496 $ 11,613 $ 11,731 $ 11,850 $ 11,971 $ 12,092 $ 12,215 $ 12,340 $ 12,465 $ 12,591
Central Dispatch 0.3000 $ 14,225 $ 14,370 $ 14,516 $ 14,664 $ 14,813 $ 14,964 $ 15,116 $ 15,269 $ 15,424 $ 15,581 $ 15,739
Comm College 2.2037 $ 104,495 $ 105,558 $ 106,631 $ 107,716 $ 108,811 $ 109,917 $ 111,034 $ 112,163 $ 113,302 $ 114,453 $ 115,616
MAISD 4.7580 $ 225,614 $ 227,909 $ 230,227 $ 232,568 $ 234,933 $ 237,321 $ 239,734 $ 242,170 $ 244,631 $ 247,116 $ 249,626
Hackley Library 2.4000 $ 113,803 $ 114,960 $ 116,130 $ 117,311 $ 118,503 $ 119,708 $ 120,925 $ 122,154 $ 123,395 $ 124,649 $ 125,915
Local Total 29.5841 $ 1,402,813 $ 1,417,084 $ 1,431,497 $ 1,446,055 $ 1,460,758 $ 1,475,608 $ 1,490,606 $ 1,505,755 $ 1,521,055 $ 1,536,508 $ 1,552,115
Non-Capturable Millages Millage Rate
Comm College Debt 0.3400 $ 16,122 $ 16,286 $ 16,452 $ 16,619 $ 16,788 $ 16,959 $ 17,131 $ 17,305 $ 17,481 $ 17,659 $ 17,838
Hackley Debt 0.5611 $ 26,606 $ 26,877 $ 27,150 $ 27,426 $ 27,705 $ 27,987 $ 28,271 $ 28,559 $ 28,849 $ 29,142 $ 29,438
MPS Debt - 1995 4.0700 $ 192,990 $ 194,954 $ 196,937 $ 198,939 $ 200,962 $ 203,005 $ 205,069 $ 207,153 $ 209,257 $ 211,383 $ 213,531
MPS Debt - 2009 3.2900 $ 156,005 $ 157,592 $ 159,194 $ 160,813 $ 162,448 $ 164,100 $ 165,768 $ 167,453 $ 169,154 $ 170,873 $ 172,608
Total Non-Capturable Taxes 8.2611 $ 391,723 $ 395,708 $ 399,733 $ 403,798 $ 407,904 $ 412,050 $ 416,239 $ 420,469 $ 424,741 $ 429,056 $ 433,415
Total Tax Increment Revenue (TIR) Available for Capture $ 1,687,320 $ 1,704,485 $ 1,721,821 $ 1,739,331 $ 1,757,016 $ 1,774,878 $ 1,792,919 $ 1,811,139 $ 1,829,542 $ 1,848,130 $ 1,866,903
Footnotes:
Assumes millage rate remains the same
with 1% inflation on
taxable values and homestead units
April 2017
Tax Increment Revenue Capture Estimates
Damfino Development
Muskegon, Michigan
November 7, 2019
Estimated Taxable Value (TV) Increase Rate:
Plan Year 23 24 25 26 27 28 TOTAL
Calendar Year 2041 2042 2043 2044 2045 2046
Base Taxable Value $ 819,679 $ 819,679 $ 819,679 $ 819,679 $ 819,679 $ 819,679 $ 819,679
Estimated New TV $ 53,817,035 $ 54,355,206 $ 54,898,758 $ 55,447,745 $ 56,002,223 $ 56,562,245 $ 56,562,245
Incremental Difference (New TV - Base TV) $ 52,997,356 $ 53,535,527 $ 54,079,079 $ 54,628,066 $ 55,182,544 $ 55,742,566 $ 55,742,566
School Capture Millage Rate
State Education Tax (SET) 6.0000 $ 317,984 $ 321,213 $ 324,474 $ 327,768 $ 331,095 $ 334,455 $ 6,621,150
School Operating Tax 18.0000 $ - $ - $ - $ - $ - $ - $ -
School Total 24.0000 $ 317,984 $ 321,213 $ 324,474 $ 327,768 $ 331,095 $ 334,455 $ 6,621,150
Local Capture Millage Rate
City Operating 10.0869 $ 534,579 $ 540,008 $ 545,490 $ 551,028 $ 556,621 $ 562,270 $ 11,131,147
County Operating 5.6984 $ 302,000 $ 305,067 $ 308,164 $ 311,293 $ 314,452 $ 317,643 $ 6,288,327
City Sanitation 3.0000 $ 158,992 $ 160,607 $ 162,237 $ 163,884 $ 165,548 $ 167,228 $ 3,310,575
County Museum 0.3221 $ 17,070 $ 17,244 $ 17,419 $ 17,596 $ 17,774 $ 17,955 $ 355,445
Senior Services 0.4998 $ 26,488 $ 26,757 $ 27,029 $ 27,303 $ 27,580 $ 27,860 $ 551,542
County Veterans 0.0752 $ 3,985 $ 4,026 $ 4,067 $ 4,108 $ 4,150 $ 4,192 $ 82,985
County Qual Life 0.2400 $ 12,719 $ 12,849 $ 12,979 $ 13,111 $ 13,244 $ 13,378 $ 264,846
Central Dispatch 0.3000 $ 15,899 $ 16,061 $ 16,224 $ 16,388 $ 16,555 $ 16,723 $ 331,058
Comm College 2.2037 $ 116,790 $ 117,976 $ 119,174 $ 120,384 $ 121,606 $ 122,840 $ 2,431,838
MAISD 4.7580 $ 252,161 $ 254,722 $ 257,308 $ 259,920 $ 262,559 $ 265,223 $ 5,250,572
Hackley Library 2.4000 $ 127,194 $ 128,485 $ 129,790 $ 131,107 $ 132,438 $ 133,782 $ 2,648,460
Local Total 29.5841 $ 1,567,879 $ 1,583,800 $ 1,599,881 $ 1,616,122 $ 1,632,526 $ 1,649,094 $ 32,646,796
Non-Capturable Millages Millage Rate
Comm College Debt 0.3400 $ 18,019 $ 18,202 $ 18,387 $ 18,574 $ 18,762 $ 18,952 $ 375,199
Hackley Debt 0.5611 $ 29,737 $ 30,039 $ 30,344 $ 30,652 $ 30,963 $ 31,277 $ 619,188
MPS Debt - 1995 4.0700 $ 215,699 $ 217,890 $ 220,102 $ 222,336 $ 224,593 $ 226,872 $ 4,491,347
MPS Debt - 2009 3.2900 $ 174,361 $ 176,132 $ 177,920 $ 179,726 $ 181,551 $ 183,393 $ 3,630,598
Total Non-Capturable Taxes 8.2611 $ 437,816 $ 442,262 $ 446,753 $ 451,288 $ 455,869 $ 460,495 $ 9,116,331
Total Tax Increment Revenue (TIR) Available for Capture $ 1,885,863 $ 1,905,014 $ 1,924,355 $ 1,943,891 $ 1,963,621 $ 1,983,549 $ 39,267,947
Footnotes:
Assumes millage rate remains the same
with 1% inflation on
taxable values and homestead units
April 2017
Tax Increment Financing Reimbursement Table
Damfino Development Project
Muskegon, Michigan
November 7, 2019
Developer
Maximum School & Local
Reimbursement Proportionality Taxes Local-Only Taxes Total Estimated Capture $ 32,646,796
State 0.0% $ - $ - $ - Estimated Total Administrative Fees $ 255,335
Local 100.0% $ - $ 24,977,109 $ 24,977,109 Years of Plan: 28 State Revolving Fund $ -
TOTAL $ 24,977,109 LBRF $ 7,414,353
EGLE 0.0% $ - $ - $ -
MSF 100.0% $ - $ 24,977,109 $ 24,977,109
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Total State Incremental Revenue $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
State Brownfield Revolving Fund (50% of SET) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
State TIR Available for Reimbursement $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Total Local Incremental Revenue $ - $ - $ 5,335 $ 199,806 $ 445,938 $ 597,391 $ 794,618 $ 976,347 $ 1,112,440 $ 1,237,084 $ 1,388,684 $ 1,402,813 $ 1,417,084 $ 1,431,497 $ 1,446,055
BRA Administrative Fee $ - $ - $ (5,335) $ (10,000) $ (10,000) $ (10,000) $ (10,000) $ (10,000) $ (10,000) $ (10,000) $ (10,000) $ (10,000) $ (10,000) $ (10,000) $ (10,000)
Local TIR Available for Reimbursement $ - $ - $ - $ 189,806 $ 435,938 $ 587,391 $ 784,618 $ 966,347 $ 1,102,440 $ 1,227,084 $ 1,378,684 $ 1,392,813 $ 1,407,084 $ 1,421,497 $ 1,436,055
Total State & Local TIR Available $ - $ - $ - $ 189,806 $ 435,938 $ 587,391 $ 784,618 $ 966,347 $ 1,102,440 $ 1,227,084 $ 1,378,684 $ 1,392,813 $ 1,407,084 $ 1,421,497 $ 1,436,055
Beginning
DEVELOPER Balance
DEVELOPER Reimbursement Balance $ 13,789,000 $ 13,789,000 $ 13,789,000 $ 14,056,507 $ 17,711,260 $ 17,610,464 $ 17,353,320 $ 19,030,876 $ 18,414,981 $ 18,363,004 $ 17,468,356 $ 16,401,812 $ 15,300,173 $ 14,162,616 $ 12,988,296 $ 11,776,355
MSF Non-Environmental Costs $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
State Tax Reimbursement #DIV/0! $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Local Tax Reimbursement $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Total MSF Reimbursement Balance $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
EGLE Environmental Costs $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
State Tax Reimbursement $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Local Tax Reimbursement $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Total EGLE Reimbursement Balance $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Local Only Costs $ 13,789,000 $ 13,789,000 $ 13,789,000 $ 13,789,000 $ 17,564,007 $ 17,711,260 $ 17,610,464 $ 19,453,320 $ 19,030,876 $ 19,115,981 $ 18,363,004 $ 17,468,356 $ 16,401,812 $ 15,300,173 $ 14,162,616 $ 12,988,296
Local Tax Reimbursement $ - $ - $ - $ 189,806 $ 435,938 $ 587,391 $ 784,618 $ 966,347 $ 1,102,440 $ 1,227,084 $ 1,378,684 $ 1,392,813 $ 1,407,084 $ 1,421,497 $ 1,436,055
Total Local Only Reimbursement Balance $ 13,789,000 $ 13,789,000 $ 13,789,000 $ 17,374,201 $ 17,275,323 $ 17,023,073 $ 18,668,703 $ 18,064,529 $ 18,013,541 $ 17,135,919 $ 16,089,672 $ 15,008,999 $ 13,893,090 $ 12,741,119 $ 11,552,242
Interest** $ - $ - $ 267,507 $ 337,059 $ 335,141 $ 330,248 $ 362,173 $ 350,452 $ 349,463 $ 332,437 $ 312,140 $ 291,175 $ 269,526 $ 247,178 $ 224,113
Total Annual Developer Reimbursement $ - $ - $ - $ 189,806 $ 435,938 $ 587,391 $ 784,618 $ 966,347 $ 1,102,440 $ 1,227,084 $ 1,378,684 $ 1,392,813 $ 1,407,084 $ 1,421,497 $ 1,436,055
LOCAL BROWNFIELD REVOLVING FUND
LBRF Deposits * $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
State Tax Capture $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Local Tax Capture $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Total LBRF Capture
* Up to five years of capture for LBRF Deposits after eligible activities are reimbursed. May be taken from DEQ & Local TIR only.
Footnotes:
(1) Assumes taxable value increases based on proposed build out,
plus 1% annual increases for inflation thereafter.
Total Eligible Activities are $20,097,500 with costs of $13.79 incurred initially
and the remainder phased in from 2020-2027.
April 2017
Tax Increment Financing Reimbursement Table
Damfino Development Project
Muskegon, Michigan
November 7, 2019
2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 TOTAL
Total State Incremental Revenue $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
State Brownfield Revolving Fund (50% of SET) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
State TIR Available for Reimbursement $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Total Local Incremental Revenue $ 1,460,758 $ 1,475,608 $ 1,490,606 $ 1,505,755 $ 1,521,055 $ 1,536,508 $ 1,552,115 $ 1,567,879 $ 1,583,800 $ 1,599,881 $ 1,616,122 $ 1,632,526 $ 1,649,094 $ 32,646,796
BRA Administrative Fee $ (10,000) $ (10,000) $ (10,000) $ (10,000) $ (10,000) $ (10,000) $ (10,000) $ (10,000) $ (10,000) $ (10,000) $ (10,000) $ (10,000) $ (10,000) $ (255,335)
Local TIR Available for Reimbursement $ 1,450,758 $ 1,465,608 $ 1,480,606 $ 1,495,755 $ 1,511,055 $ 1,526,508 $ 1,542,115 $ 1,557,879 $ 1,573,800 $ 1,589,881 $ 1,606,122 $ 1,622,526 $ 1,639,094 $ 32,391,462
Total State & Local TIR Available $ 1,450,758 $ 1,465,608 $ 1,480,606 $ 1,495,755 $ 1,511,055 $ 1,526,508 $ 1,542,115 $ 1,557,879 $ 1,573,800 $ 1,589,881 $ 1,606,122 $ 1,622,526 $ 1,639,094 $ 32,391,462
DEVELOPER
DEVELOPER Reimbursement Balance $ 10,525,914 $ 9,236,077 $ 7,905,926 $ 6,534,529 $ 5,120,930 $ 3,664,154 $ 2,163,206 $ 617,070 $ - $ - $ - $ - $ - $ -
MSF Non-Environmental Costs $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
State Tax Reimbursement $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Local Tax Reimbursement $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Total MSF Reimbursement Balance $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
EGLE Environmental Costs $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
State Tax Reimbursement $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Local Tax Reimbursement $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Total EGLE Reimbursement Balance $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Local Only Costs $ 11,776,355 $ 10,525,914 $ 9,236,077 $ 7,905,926 $ 6,534,529 $ 5,120,930 $ 3,664,154 $ 2,163,206 $ 617,070 $ - $ - $ - $ - $ -
Local Tax Reimbursement $ 1,450,758 $ 1,465,608 $ 1,480,606 $ 1,495,755 $ 1,511,055 $ 1,526,508 $ 1,542,115 $ 1,557,879 $ 617,070 $ - $ - $ - $ - $ 24,977,109
Total Local Only Reimbursement Balance $ 10,325,598 $ 9,060,307 $ 7,755,470 $ 6,410,172 $ 5,023,474 $ 3,594,422 $ 2,122,038 $ 605,327 $ - $ - $ - $ - $ - $ -
Interest** $ 200,317 $ 175,770 $ 150,456 $ 124,357 $ 97,455 $ 69,732 $ 41,168 $ 11,743 $ - $ - $ -
Total Annual Developer Reimbursement $ 1,450,758 $ 1,465,608 $ 1,480,606 $ 1,495,755 $ 1,511,055 $ 1,526,508 $ 1,542,115 $ 1,557,879 $ 617,070 $ - $ - $ - $ - $ -
LOCAL BROWNFIELD REVOLVING FUND
LBRF Deposits * $ - $ - $ - $ - $ - $ - $ - $ - $ 956,731 $ 1,589,881 $ 1,606,122 $ 1,622,526 $ 1,639,094
$ 7,414,353
State Tax Capture $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Local Tax Capture $ - $ - $ - $ - $ - $ - $ - $ - $ 956,731 $ 1,589,881 $ 1,606,122 $ 1,622,526 $ 1,639,094 $ 7,414,353
Total LBRF Capture
* Up to five years of capture for LBRF Deposits after eligible activities are reimbursed. May be taken from DEQ & Local TIR only.
Footnotes: 0 $ -
(1) Assumes taxable value increases based on proposed build out,
plus 1% annual increases for inflation thereafter.
Total Eligible Activities are $20,097,500 with costs of $13.79 incurred initially
and the remainder phased in from 2020-2027.
April 2017
City of Muskegon Brownfield Plan Amendment
Damfino Development, LLC Development Project
ATTACHMENT U-4
FACILITY CONFIRMATION
DAMFINO DEVELOPMENT, LLC DEVELOPMENT
PROJECT
11 11/7/2019
November 5, 2019
Mr. Scott Musselman
Damfino Development, LLC
560 Mart Street
Muskegon, Michigan 49440
Re: Limited Phase II Environmental Site Assessment
3460, 3400 & 3474 Wilcox Avenue, 1875 Waterworks Road and 1490 Edgewater
Street, Muskegon, Muskegon County, Michigan
(Parcels #61-24-205-727-0005-00, 61-24-205-727-0008-00, 61-24-205-733-0001-00,
61-24-205-735-0001-00 & 61-24-505-001-0016-00)
LEI Project #18-3058-02
Dear Mr. Musselman,
On behalf of Damfino Development, LLC, Lakeshore Environmental, Inc. (LEI) has completed a
Limited Phase II Environmental Site Assessment (ESA) at the above-referenced location (the Site).
The Phase II ESA was completed in general conformance with the scope and limitations set forth in
the ASTM International (ASTM) Standard Practice for Environmental Site Assessments: Phase II ESA
Process (ASTM designation E1903-11).
The Phase II ESA was completed as a result of potential environmental concerns identified through
a Site walkover in May/June 2018. The goal of the Phase II ESA was to determine if the identified
environmental concerns resulted in a release of hazardous substances to the subsurface as defined
under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).
EXECUTIVE SUMMARY
Based on the results of this Phase II ESA, hazardous substances were detected above Michigan
Department of Environment, Great Lakes and Energy (EGLE) Part 201 Generic Residential Cleanup
Criteria (GRCC) in soil samples collected from the Site. Therefore, the Site is considered to be a
facility, as defined in Section 324.20101(1)(s) of Part 201 of the Natural Resources and
Environmental Protection Act (NREPA), Public Act 451 of 1994, as amended.
BACKGROUND - PHASE I ESA FINDINGS
Based on a review of available historical resources, the Site was developed prior to 1938 for use as
a sand mine. Sand mining operations continued through the 1980’s. Since the 1980’s the Site has
been vacant.
Grand Rapids Office
800 Monroe Avenue NW, Suite 120
Grand Rapids, Michigan 49503
Phone: 800.844.5050
www.MY-LEI.com
Grand Haven, MI Grand Rapids, MI Muskegon, MI Vestaburg, MI
Limited Phase II Environmental Site Assessment Page 2 of 4
Attn: Scott Musselman November 5, 2019
The Site walkover identified the following environmental concerns:
™ An area of petroleum stained soil within the northwestern portion of the Site.
™ Evidence of a potential dumping area within the northeastern portion of the Site.
™ A mound pile of dredge sediments from Muskegon Lake within the central portion of the
Site.
™ Evidence of trash, metal scrap and discarded debris was identified within the southern
portion of the Site.
FIELD INVESTIGATION
The Phase II soil sampling investigation was conducted on June 14, 2018. Subsurface investigation
and sampling activities were performed in general conformance with LEI’s Standard Operating
Procedures (SOPs), which are provided in Attachment A. A Site Location Map (Figure 1), Site
Features Map (Figure 2), and Sample Location Map (Figure 3), are provided in Attachment B.
The investigation activities consisted of the following:
™ Completion of four soil borings using a stainless-steel hand auger.
™ Collection of four soil samples (LSB-1, LSB-2, LSB-3 and LSB-4) from the soil borings for
laboratory analysis.
Subsurface soils, recovered as core samples from the soil borings, were evaluated for the presence
of stains, odors, and/or other indicators of contamination. In addition, soils were screened with a
portable photoionization detector (PID) to measure for the potential presence of volatile organic
compounds (VOCs) in the soil gas.
Soil samples were collected directly into laboratory-provided containers and stored in an iced cooler
until submittal to Trace Analytical Laboratories, a state certified laboratory located in Muskegon,
Michigan. Chain-of-custody documentation procedures were followed in order to keep a record of
sample collection and handling information, and to identify the requested analytical parameters.
The soil borings were completed to depths of 4.0 feet below ground surface (bgs). Soils consisted
primarily of a light brown within a majority of the Site with the exception of topsoil/organics
identified in the forested areas within the southern portion of the Site. Evidence of fill material was
observed in soil borings LSB-2 and LSB-3. Groundwater was not encountered during the
investigation.
In general, the soil samples were analyzed for polynuclear aromatic hydrocarbons (PNAs), volatile
organic compounds (VOCs) and/or Michigan 10 Metals. The following table summarizes the
evaluated environmental concerns with corresponding soil boring information, field observations,
sample depths, and selected laboratory analytical parameters.
www.My-LEI.com .com
Limited Phase II Environmental Site Assessment Page 3 of 4
Attn: Scott Musselman November 5, 2019
Soil PID
Environmental Soil Boring Boring Depth/ Sample Evidence of Laboratory
Boring/ Readings
Concern Evaluated Location Depth (ft) Contamination Analysis
Sample ID (ppm)
Northwest
Petroleum stained Petroleum odor VOCs
LSB-1 portion of the 4.0 / 0.5-1.5 40
soils identified PNAs
Site
Northeast PNAs
Potential area of Fill material
LSB-2 portion of the 4.0 / 0.5-1.5 0 MI 10
dumping identified
Site Metals
PNAs
Potential dredge Central portion Fill material
LSB-3 4.0 / 0.5-1.5 0 MI 10
sediment disposal of the Site identified
Metals
Southern PNAs
LSB-4 Discarded debris portion of the 4.0 / 0.5-1.5 0 None MI 10
Site Metals
VOCs – Volatile Organic Compounds
PNAs - Polynuclear Aromatic Hydrocarbons
MI 10 – Michigan 10 Metals
LABORATORY ANALYTICAL RESULTS
Laboratory analytical results for the soil samples were compared to the EGLE Part 201 GRCC. A table
summarizing the results is provided in Attachment C and the laboratory analytical report and chain
of custody documentation is provided in Attachment D. A summary of the laboratory analytical
results is provided in the following paragraphs:
Soil Sample Results
™ A concentration of chromium (total) was identified in soil sample LSB-3 above the EGLE Part
201 GRCC for groundwater surface water interface protection (GSIP).
™ Concentrations of benzene, toluene, arsenic, barium, cadmium, copper, lead selenium and
zinc were identified in soil samples LSB-1, LSB-2, LSB-3 and LSB-4; however, the
concentrations at or below the EGLE Part 201 GRCC.
CONCLUSIONS
Based on the results of this investigation, LEI concludes the following:
™ Chromium (total) has been detected at a concentration above EGLE Part 201 GRCC.
Therefore, the Site is a facility as defined in Section 324.20101(1)(s) of Part 201.
CLOSING
While all appropriate inquiries have been completed to assess environmental conditions related to
the Site, LEI cannot guarantee that additional unknown environmental concerns do not exist. In the
event that suspect environmental conditions are observed in the future, please contact LEI.
If you have any questions or concerns, please contact us at 616-844-5050. We appreciate the
opportunity to assist you on this project.
www.My-LEI.com .com
Limited Phase II Environmental Site Assessment Page 4 of 4
Attn: Scott Musselman November 5, 2019
Sincerely,
Lakeshore Environmental, Inc.
Kirk W. Perschbacher, EP
Due Diligence Manager|Brownfield Planner
Attachment A - SOPs
Attachment B – Figures
Attachment C – Analytical Summary Tables
Attachment D - Laboratory Analytical Report
www.My-LEI.com .com
ATTACHMENT A
Standard Operating Procedures
Standard Operating Procedure
Stainless Steel Hand Auger
Equipment Required:
™ Stainless steel hand auger (Handle, at least 1 extension, and a sampling bucket).
™ Basic field tool kit, map of site, field notebook
™ Photo-Ionization Detector or Organic Vapor Analyzer (If soil vapor screening is needed)
™ Appropriate decontamination materials (see below)
™ Appropriate Personal Protective Equipment (per project requirements)
Background:
Method for manually collecting shallow-depth soils and sediments using a stainless steel auger.
Additional references can be found in ASTM D1452-[a SStandard Practice for Soil Exploration and
Sampling by Auger BoringsT +&) HF8F ",1 ;4A7 4H:8EF J<G; ] GB _-inch diameter buckets designed
for a variety of soil types and moisture content. Only hand augers with closed side buckets are to
be used for collection of soil samples to be analyzed for volatile organic compounds (VOCs).
Methodology:
A. Calibration W Not applicable
B. Operation
™ Attach the handle to either a four or five foot extension.
™ "GG46; 4CCEBCE<4G8 F4@C?<A: 5H6>8G BA G;8 8A7 B9 G;8 8KG8AF<BA X]TO ^T BE _T 7<4@8G8EYR
™ Turn handle clockwise in desired soil boring location until sampling bucket is filled with soil.
™ Once sampling bucket is full, take note of the depth interval of each soil sample.
™ Remove hand auger assembly from boring.
™ Carefully extract soil sample from auger head. Field screening of soils for VOCs should be
done by performing headspace analysis in accordance with the LEI Field Screening with PID
SOP.
™ Place soils into appropriate sampling containers following procedures in the LEI Soil
Sampling SOP.
C. Record Keeping
™ Complete a soil boring log for each sample location including total depth of boring, and
soils encountered (see attached soil boring log).
Decontamination:
Standard decontamination SOP applies; see Decontamination SOP.
Special decontamination requirements: none.
References:
ASTM D1452-[a S1G4A74E7 /E46G<68 9BE 1B<? &KC?BE4G<BA 4A7 14@C?<A: 5L "H:8E #BE<A:FT
Page 1 of 1 Revised 3/2015
ATTACHMENT B
Figures
ATTACHMENT C
Analytical Summary Table(s)
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Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: December 10, 2019 Title: 1601 Beach Lessor Agreement
Submitted By: LeighAnn Mikesell Department: Development Services
Brief Summary: Staff is requesting authorization to sign a lessor agreement to facilitate funding for
the expansion of The Deck restaurant by 1601 Beach LLC at Pere Marquette Park.
Detailed Summary: The owners of 1601 Beach LLC are planning an expansion to their restaurant,
The Deck, and require funding to do so. Their loan is being guaranteed by the Small Business
Administration who requires a lessor agreement be made between Community Shores Bank
(lender) and the City of Muskegon (property owner). This agreement outlines procedures and
remedies for a potential default on the loan.
Amount Requested: None Amount Budgeted: N/A
Fund(s) or Account(s): N/A Fund(s) or Account(s): N/A
Recommended Motion:
Approve the lessor agreement with Community Shores Bank related to the lease with 1601 Beach
LLC and authorize the mayor and clerk to sign.
Check if the following Departments need to approve the item first:
Police Dept.
Fire Dept.
IT Dept.
For City Clerk Use Only:
Commission Action:
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: December 10, 2019 Title: Arena Naming Rights Sponsorship
Submitted By: Frank Peterson Department: City Manager
Brief Summary: Staff is seeking approval of the attached naming-rights sponsorship with Mercy
Health.
Detailed Summary: As part of the current lease with the Muskegon Lumberjacks, both parties
agreed to actively sell sponsorships that would mutually benefit the City and the team. WC
Hockey has facilitated the development of the attached sponsorship agreement between the City,
Mercy Health, and WC Hockey. The gross revenue associated with the sponsorship is $1.6
Million, to be paid over the next 8.5 years. The Mercy Health name will remain on the arena for 15
years.
Amount Requested: $0 Amount Budgeted: $0
Fund(s) or Account(s): Fund(s) or Account(s): N/A
Recommended Motion: Approve the Agreement and authorize the Mayor to sign.
Check if the following Departments need to approve the item first:
Police Dept. Fire Dept. IT Dept.
For City Clerk Use Only:
Commission Action:
NAMING RIGHTS AND SPONSORSHIP AGREEMENT
THIS NAMING RIGHTS AGREEMENT (the “Agreement”) is made and entered into this
____ day of ____________________________, 2019 (the “Effective Date”), by and between
Mercy Health Partners d/b/a Mercy Health Muskegon, a Trinity Health Ministry and Michigan
non-profit corporation (“Mercy”), the City of Muskegon (“City”), and WC Hockey, LLC (“WC”).
Recitals:
A. City is the owner and WC is the Manager of a multi-use arena located in Muskegon,
Michigan. Historically known as the L.C. Walker Arena.
B. The Arena is used for athletic events, concerts and other public events.
C. Mercy desires to acquire from City certain naming, access and signage rights
associated with the Arena.
D. Mercy also desires to acquire from WC sponsorship rights for the Muskegon
Lumberjacks ("Sponsorship Rights"), a minor league hockey club which utilizes the Arena as its
home venue. Details regarding the Sponsorship Rights will be set forth in Exhibit A of this
Agreement.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises of the
parties set forth herein, and of other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Mercy, City of Muskegon, and WC Hockey, LLC hereby agree
as follows:
1. Term. The term of this Agreement (the “Term”), shall commence on the 1st day of
January, 2020 ("Commencement Date"), and shall continue for a period of fifteen (15) years,
terminating on the 31st day of December 2034 (the “Termination Date”), unless terminated earlier
in accordance with the terms of this Agreement.
2. Arena Naming and Signage Rights.
(a) Exclusivity. As of the Commencement Date, the City hereby grants to Mercy
the exclusive right to name the Arena the Mercy Health Arena (the “Approved Name”).
The Approved Name shall be used with all physical, electronic and other references to
the Arena by City and WC and affiliates. This exclusivity shall extend any hospital,
health system or entity which engages in healthcare services, including but not limited
to the following categories of health care services:
a. ambulatory surgery center
b. bariatric
c. breast care
d. cancer
e. children’s health (unless programs are promoting health generally and are not
affiliated with a competing hospital or health system)
f. endoscopy
g. hospital
h. neurosciences
i. orthopedics
j. pharmacy
k. primary care physicians
l. rehabilitation
m. specialty care physicians
n. women’s health (unless programs are promoting health generally and are not
affiliated with a competing hospital or health system)
o. emergency care
p. urgent care
q. sports medicine
r. hospice
s. home health
t. senior living centers
u. workplace health/occupational health
v. athletic training
w. durable medical equipment sales
With respect to these exclusivities, City agrees not to enter into any
advertising/marketing arrangements at the Arena, during the Term of this Agreement,
with any hospital, health system or entity that competes with Mercy, without Mercy’s
advance written consent.
(b) Exterior Signage Rights. With the exclusive right to name the Arena, Mercy shall
have the right to the following exterior signage, subject to local zoning requirements:
(i) a large marquee sign bearing the full color backlit logo of Mercy Health on the
Western Avenue side of Arena, to be installed at the expense of City, no later than
March 2020. The size of the logo will be mutually agreed upon in advance by the
parties.
(ii) a large marquee sign bearing the full color backlit logo of Mercy Health on the
Shoreline Drive side of Arena, to be installed at the expense of City, no later than
March 2020. The size of the logo will be mutually agreed upon in advance by the
parties.
(iii) additional types of exterior Arena signage shall be permissible with the written
consent of the City which consent shall not be unreasonably withheld. City
acknowledges the rights granted herein with respect to exterior signage are
exclusive and City shall grant no new exterior signage rights to any other third
parties without advance written consent from Mercy, which consent shall not be
unreasonably withheld if the proposed exterior signage is consistent in size and
scope to that which existed at the time the Agreement was executed. Further,
parties acknowledge that renovations to Arena and the adjoining conference center
may create additional opportunities for sponsorship signage. Mercy shall not
unreasonably withhold its consent to any new third party sponsor signage at these
locations so long as it complies with Paragraph 2(c) of this Agreement, does not
detract from Mercy's existing signage, and Mercy is offered additional signage at
these locations so as to ensure that it is clear to members of the public they are
entering the Mercy Health Arena.
(c) Interior Arena Signage. Mercy acknowledges the rights granted herein with respect
to interior signage are not exclusive and that City shall have complete discretion as to the
rental or leasing of interior signage to third parties, subject to the limitations pertaining to
other hospital or health care providers contained above. Mercy shall have the right to the
following interior signage:
(i) inside the western Arena entrance, a large full color logo on large backlit sign to
be installed by March 2020. The size of the logo will be agreed upon in advance by
the parties.
(ii) a large logo by/above box office, final size to be agreed upon in advance by the
parties.
(iii) one dasherboard advertisement in the opposite end zone to the large backlit
sign.
(d) Cost of Signage. City shall be responsible, at its expense, for the cost of the signage
and any necessary maintenance/replacement of such signage, except to the extent any
necessary repair or replacement is caused by actions of Mercy or any Mercy agents and
representatives, in which event Mercy shall be responsible at its expense for any necessary
repair or replacement. In addition, City shall be responsible, at its expense, for the cost of
mounting all signage to the Arena, as well as the cost of providing reasonably suitable
lighting for the exterior signage, including, but not limited to the cost of providing power
for said lighting.
(e) Sign Removal and Substitute Exposure. The City reserves the right (subject to the
prior approval of Mercy, not to be unreasonably withheld), to change the nature and
location of the signage, at City’s own expense, in connection with any renovation,
alteration or repairs of the Arena, so long as Mercy receives (i) equivalent exposure both
before and after any such renovation, alteration or repairs and (ii) at least thirty (30) days’
prior notice of such change.
(f) Naming Ceremonies. Mercy, City and WC will agree in advance on any press
announcements regarding the naming of the Arena, and the timing of the release of any
such announcements. Mercy shall have the right to have representatives contribute to the
official naming ceremonies for the Arena. Mercy will also have the right to approve in
advance (such approval not to be unreasonably withheld) any press announcements, press
releases or other materials to be distributed to the general public by or on behalf of the City
and WC relating to the initial naming of the Arena.
(g) Change of Mercy Name. In the event that Mercy changes its name, Mercy shall
have the right to change the name of the Arena, as well as the Logos, with the prior approval
of the City, which approval shall not be unreasonably withheld. In the event that the name
of the Arena is changed under this provision, all costs of effectuating the name change shall
be borne solely and entirely by Mercy, and any and all costs and expenses incurred by City
in connection with effectuating such change of the name or Logo shall be paid by Mercy
promptly upon request by City.
3. Payments and Fees.
(a) Fee Schedule. In consideration of the naming, signage and sponsorship rights
granted to Mercy under this Agreement, Mercy shall pay to City a naming rights and
sponsorship fee ("Naming Rights Fee") of $100,000 per year, for a total amount of One
Million and Six Hundred Thousand and No/100 ($1,600,000.00) Dollars. The Naming
Rights Fee will be paid as follows:
(i) $125,000 paid in December of 2019, or within 15 days of execution of this
Agreement.
(ii) $125,000 paid on June 1, 2020.
(iii) $125,000 paid on June 1, 2021.
(iv) $225,000 paid on June 1, 2022.
(v) $225,000 paid on June 1, 2023.
(vi) $225,000 paid on June 1, 2024.
(vii) $225,000 paid on June 1, 2025.
(viii) $225,000 paid on June 1, 2026.
(ix) $100,000 paid on June 1, 2027.
(b) Late Fees and Interest.
(i) Any amounts due from Mercy under this Agreement which are not received
by City within thirty (30) days of when due shall begin to accrue interest on the amount
due and owing at the rate of ten percent (10%) per annum from the date such amount first
became due.
(ii) Whenever any payment to be made under this Agreement shall fall on a day
which is not a Business Day, the payment shall be made on the next succeeding Business
Day. The Term “Business Day,” as used in this Agreement, shall mean any day that banks
are open for business in the State of Michigan (excluding Saturdays and Sundays).
(c) Recognition of L.C. Walker. Due to the generosity of L.C. Walker, and his family,
City and Mercy believe it to be appropriate to have an exhibit within the Arena
memorializing the gift of the Arena to the City. As such, City and Mercy shall discuss and
decide on an appropriate memorial to be located in the Arena. Mercy will contribute ½ the
cost, not to exceed $10,000.
4. Intellectual Property.
(a) Names, Trademarks and Service Marks.
(i) Mercy acknowledges that WC Hockey, LLC is the exclusive owner of the
name, trademark or service mark of the names or phrases “Muskegon Lumberjacks,” as
well as, any logos associated therewith or containing such phrases.
(ii) Mercy acknowledges that the City of Muskegon is the exclusive owner of
the Arena and its name.
(iii) City and WC acknowledges that Mercy is the exclusive owner of the name,
trademark or service mark of the names or phrases "Mercy Health," “Mercy Health
Muskegon,” “Mercy Health West Michigan," and "Mercy Health System," as well as, any
logos associated therewith or containing such phrases.
(b) License of Mercy Marks to City and WC. Subject to the terms of this Agreement,
Mercy grants to City a non-exclusive, royalty-free license during the Term to use and to
grant others the right to use the name Mercy Health Arena and the related Logo, including,
without limitation, any copyrights, trademarks, service marks, and other intellectual
property relating to the same, and any derivatives, modifications or alterations thereof
(collectively “Mercy Marks”) in connection with the promotion, marketing and operations
of the Arena and events held at the Arena and directional signage to the Arena; provided,
however, that any such rights granted by City to third parties to use the Mercy Marks shall
expire contemporaneously with this Agreement. City may, subject to the prior approval of
Mercy, grant non-exclusive rights to providers of goods and services and advertisers to use
the Mercy Marks for purposes of promoting itself and the Arena; provided, that such uses
are consistent with the terms and conditions of this Agreement. The grant by Mercy herein
of a license to City shall not convey any right, title or interest in the Mercy Marks for any
use or purpose other than expressly provided herein, or to modify any such Marks or logos
except as approved by Mercy, and Mercy specifically reserves all such rights for itself. In
addition, Mercy reserves the right to inspect City’s use of the Mercy Marks at any time
during the Term.
(c) License of City of Muskegon Marks to Mercy. Subject to the terms of this
Agreement, the City grants to Mercy a non-exclusive, royalty-free license during the Term
to use and to grant others the right to use, without limitation, any copyrights, trademarks,
service marks, and other intellectual property relating to the Mercy Health Arena, and any
derivatives, modifications or alterations thereof (collectively “Arena Marks”) in
connection with the promotion, marketing and operations of the Arena and events held at
the Arena; provided, however, that any such rights granted by Mercy to third parties to use
the Arena Marks shall expire contemporaneously with this Agreement. Mercy may,
subject to the prior approval of the City, grant non-exclusive rights to providers of goods
and services and advertisers to use the Arena Marks for purposes of promoting itself and
the Arena; provided, that such uses are consistent with the terms and conditions of this
Agreement. The grant by the City herein of a license to Mercy shall not convey any right,
title or interest in the Arena Marks for any use or purpose other than expressly provided
herein, or to modify any such Marks or logos except as approved by the City, and the City
specifically reserves all such rights for itself. In addition, the City reserves the right to
inspect Mercy’s use of the Arena Marks at any time during the Term.
(d) License of WC Hockey, LLC Marks to Mercy. Subject to the terms of this
Agreement, WC Hockey, LLC grants to Mercy a non-exclusive, royalty-free license during
the Term to use and to grant others the right to use, without limitation, any copyrights,
trademarks, service marks, and other intellectual property relating to the Muskegon
Lumberjacks and any derivatives, modifications or alterations thereof (collectively
“Lumberjack Marks”) in connection with the promotion, marketing and operations of the
Arena and events held at the Arena; provided, however, that any such rights granted by
Mercy to third parties to use the Lumberjack Marks shall expire contemporaneously with
this Agreement. Mercy may, subject to the prior approval of WC Hockey, LLC, grant non-
exclusive rights to providers of goods and services and advertisers to use the Lumberjack
Marks for purposes of promoting itself and the Arena; provided that such uses are
consistent with the terms and conditions of this Agreement. The grant by WC Hockey,
LLC, herein of a license to Mercy shall not convey any right, title or interest in the
Lumberjack Marks for any use or purpose other than expressly provided herein, and WC
Hockey, LLC specifically reserves all such rights for itself. In addition, WC Hockey, LLC
reserves the right to inspect Mercy’s use of the Lumberjack Marks at any time during the
Term.
(e) Marks. Except as provided above, neither party shall use any names, trademarks,
service marks, copyrights, trade names or photographs of the facilities or products of the
other party for any purpose, except as provided for in this Agreement, without the prior
written consent of the other party, such consent to be required for each proposed use and
each use to be accompanied by the appropriate trademark, service mark, copyright, or other
designation required by the owner of such property. Notwithstanding the above, the parties
acknowledge and agree that each party shall have the unlimited right to photograph
(including, but not limited to motion picture, still, or video device photography) the Arena
and to exhibit and exploit such photography in any medium presently existing or hereafter
developed.
5. Representations and Warranties of City and WC. The City as to the City and WC as
to WC represents and warrants to Mercy as follows:
(a) Due Organization and Good Standing. The City and WC are duly organized,
validly existing and in good standing under the laws of the state of Michigan; and has all
the requisite power and authority to execute, deliver and perform its obligations under this
Agreement, and no consent of a third party is necessary to execute, deliver and perform its
obligations under this Agreement.
(b) Binding Effect. This Agreement has been duly authorized, executed and delivered
by City and WC and constitutes the legal, valid and binding obligation of it, enforceable
against it, in accordance with the term hereof.
(c) No Conflict. The execution, delivery and performance of this Agreement by City
and WC does not conflict with, nor will it result in, a breach or violation of (i) the City’s
or WC’s organizational documents, or (ii) any material agreement to which it is a party.
6. Representations and Warranties of Mercy. Mercy represents and warrants to City and
WC that:
(a) Due Organization and Good Standing. Mercy is duly organized, validly existing
and in good standing under the laws of the jurisdiction in which it is incorporated; and has
all the requisite power and authority to execute, deliver and perform its obligations under
this Agreement, and no consent of a third party is necessary to execute, deliver and perform
its obligations under this Agreement.
(b) Binding Effect. This Agreement has been duly authorized, executed and delivered
by Mercy and constitutes the legal, valid and binding obligation of it, enforceable against
it, in accordance with the term hereof.
(c) No Conflict. The execution, delivery and performance of this Agreement by Mercy
does not conflict with, nor will it result in, a breach or violation of (i) the Mercy’s
organizational documents, or (ii) any material agreement to which it is a party.
7. Termination.
(a) Mercy Default.
(i) The occurrence of any one or more of the following constitutes a “Mercy
Default” under this Agreement:
(A) Mercy’s failure to pay the Naming Rights Fee within thirty business
(30) days of when due and owing hereunder, subject to cure provisions contained
in paragraph 7(a)(C) below;
(B) If at any time during the Term, Mercy shall file or have filed against
it, in any court pursuant to any statute either of the United States or of any state, a
petition (w) in bankruptcy, (x) for reorganization, (y) for the appointment of a
receiver or (z) for an arrangement under the Bankruptcy Act or Code or similar type
of proceeding and such petition is not dismissed within sixty (60) days of such
initial filing; or
(C) Mercy’s (and/or its affiliates’) breach of any of the material
covenants, agreements, representations or warranties contained in this Agreement,
if such breach (x) has not been waived in writing, (y) is not cured or remedied by
Mercy within thirty (30) days after delivery of written notice specifying the nature
of the breach or (z) if such breach is capable of being cured but not within such
thirty (30) day period and Mercy is using diligent efforts to cause such breach to be
cured, then the cure period set forth herein shall be extended to ninety (90) days.
(ii) Upon the occurrence of a Mercy Default, Operator may, at its option, upon
written notice to Mercy, terminate this Agreement and any monies already then
paid by Mercy may be retained by the City and/or WC. If Mercy Default occurs
before July 1, 2021, Mercy agrees to pay to City the cost of removing all signage
bearing any Mercy Marks.
(b) City and/or WC Default.
(i) The occurrence of any one or more of the following constitutes a
“Default” under this Agreement:
(A) City loses the ability to grant naming rights to the Arena for any
reason;
(B) The Arena is shut-down for any reason (including a Force Majeure
as defined in Section 12 hereof) for a period of twelve (12) months or more.
(C) WC ceases to operate the Muskegon Lumberjacks at Arena or
decreases the number of Lumberjacks home games by more than 10% of the
average number of home games in the three years preceding the Agreement. In the
event that the Muskegon Lumberjacks cease to operate at Arena, City may cure the
default by ensuring a replacement hockey franchise from a comparable or better
level hosts no fewer than 27 home games at the Arena. However, at the end of the
season, the City and Mercy will evaluate the average home attendance for the
replacement franchise and if it declined more than 15% from the previous
Lumberjacks' season, Mercy may, at its sole discretion, determine that City is in
Default.
(D) If at any time during the Term, City or WC shall file or have filed
against it, in any court pursuant to any statute either of the United States or of any
state, a petition (w) in bankruptcy, (x) for reorganization, (y) for the appointment
of a receiver or (z) for an arrangement under the Bankruptcy Act or Code or similar
type of proceeding and such petition is not dismissed within sixty (60) days of such
initial filing; or
(E) City’s or WC’s breach of any of the material covenants, agreements,
representations or warranties contained in this Agreement, or any other agreement
between the parties, if such breach (x) has not been waived in writing, (y) is not
cured or remedied within thirty (30) days after delivery of written notice specifying
the nature of the breach or (z) if such breach is capable of being cured but not within
such thirty (30) day period and City and/or WC are using diligent efforts to cause
such breach to be cured, then the cure period set forth herein shall be extended to
ninety (90) days.
(ii) Upon the occurrence of a Default by City or WC, Mercy may, at its option,
upon written notice to both City and WC:
(A) Terminate this Agreement, in which case Mercy shall not be
obligated to make any additional Naming Rights Fee Payments due after such
termination; provided, however, that Mercy shall be obligated to pay any amounts
due on or prior to such termination; and/or
(B) Enforce the provisions of this Agreement by a suit in equity or at
law for the specific performance of any covenant or agreement contained in this
Agreement; or for the enforcement of any other legal or equitable remedy available
at law.
(c) No Continued Use of Name. Upon termination of this Agreement, City shall be
free to rename the Arena and City and Mercy shall no longer use the name or Logos, and
shall make reasonable efforts to notify parties contracting with City or Mercy not to use
the names or Logos; provided, however, that City shall have a maximum of ninety (90)
days after termination of this Agreement to remove any references to, or displays of, the
name and Logos, the costs of which shall be borne by City.
(d) Right of Mercy to recoup Naming Rights Fee. The Naming Rights Fee is being
paid in a front loaded manner in order to facilitate improvements to the Arena, but will be
considered fully earned at the rate of $8,888.89 per month ($1,600,000/180 months). In the
event that City and/or WC Defaults and Mercy exercises its right to terminate this
Agreement, Mercy shall be entitled to a prorated refund from City and or WC of any of the
Naming Rights Fee which has not been fully earned within thirty (30) days of the effective
date of termination. Any amounts due which are not received by Mercy within thirty (30)
days of when due shall begin to accrue interest at the rate of ten percent (10%) per annum
from the date such amount first became due.
8. Litigation concerning Naming Rights. Should individuals or entities whom are not
signatories to this Agreement sue or threaten to sue City, Mercy and/or WC concerning this
Agreement and/or the substance of this Agreement, City, Mercy, and WC shall meet and discuss
amending this Agreement in order to avoid litigation or the threat of litigation. Any amendment
will require consent of both City and Mercy. In the event that parties cannot come to a mutually
agreeable amendment to avoid litigation or threatened litigation, either party may choose to
terminate this Agreement and the parties would each bear half the cost of removing the Mercy
signage and logos from Arena. If the parties choose to defend the litigation or threatened litigation,
City and Mercy shall select legal counsel to represent both entities and enter into a joint
representation agreement and legal fees and expenses in defending the then pending litigation or
threatened litigation shall be split evenly between City and Mercy.
9. Force Majeure. Neither party shall be in breach of this Agreement if the conduct of any
event at the Arena is prevented or preempted because of an act of God, natural disaster,
catastrophe, accident, fire, labor dispute, lockout, strike, riot or civil commotion, act of public
enemy, governmental act, regulation or rule, failure of technical facilities, a day of national
mourning, emergency or other circumstance or event beyond the control of the parties to this
Agreement (a “Force Majeure”).
10. Confidentiality. To the extent possible, each party agrees to treat as confidential all
information regarding the other party furnished, or to be furnished, pursuant to this Agreement,
including the terms and conditions of this Agreement. However, either party may disclose that
portion of the confidential information that is required to be disclosed by law, including the
Freedom of Information Act.
11 Counterparts. This Agreement may be executed in one or more counterparts, all of
which together shall constitute one instrument.
12. Notice. Each notice, request, demand, consent, approval or other communication
required or permitted under this Agreement (collectively, “notices”) shall be in writing and shall
be deemed to be given if hand-delivered or sent by overnight delivery service at the address set
forth below, or sent electronically (with confirmation of receipt) at the applicable number set forth
below:
If to City of Muskegon:
City Manager
City of Muskegon
933 Terrace St.
Muskegon, MI 49443-0536
With a copy to:
City Attorney
Parmenter Law
601 Terrace St.
Muskegon, MI 49440
If to WC Hockey, LLC
With a copy to:
If to Mercy: 1500 E. Sherman Blvd
Muskegon, MI 49444
Attn: Office of the President
With a copy to: 1500 E. Sherman Blvd
Muskegon, MI 49444
Attn: Office of the General Counsel
Any such notice shall be deemed given when actually delivered, when delivery is refused,
or upon confirmation of receipt of a facsimile.
13. Successors and Assigns. This Agreement shall be binding on, and shall inure to the
benefit of, the parties hereto and their successors and permitted assigns. This Agreement may not
be assigned by any party hereto without the prior written consent of the other party; provided,
however, that (i) the City and WC may assign this Agreement to any existing or future affiliate,
whose business includes the operation of the Arena; (ii) Mercy may assign this Agreement to any
existing or future affiliate, provided that Mercy shall continue to be obligated to City and WC
under this Agreement; and (iii) Mercy may assign this Agreement in connection with the direct or
indirect transfer or sale of all or substantially all of its assets, or in the event of a merger,
consolidation, or similar transaction, provided that (a) the acquirer or surviving entity has
creditworthiness or credit rating at least equal to that of Mercy immediately prior to the transaction,
(b) the acquirer or surviving entity is another health care provider, and (c) such assignee expressly
agrees to assume unconditionally all of the obligations of Mercy hereunder for the balance of the
Term and agrees to bound hereby.
14. Severability. If any portion of this Agreement is judged to be illegal, invalid or
unenforceable, such portion will be given effect to the maximum extent possible by narrowing, or
enforcing in part, such portion to the minimum extent necessary to make it enforceable. Any such
invalidity or unenforceability will not in any way affect the validity or enforceability of the
remainder of this Agreement which will continue in full force and effect.
15. Captions. The captions used in this Agreement are for convenience only and will not
define, limit, or otherwise be used in the construction of this Agreement.
16. Entire Agreement. With the exception of an Agreement between City and WC as to
sharing the income from naming rights and advertisements in and on the Arena, this Agreement
sets forth the entire agreement between the parties with respect to the subject matter hereof, and,
except as provided herein, there are no agreements between them, written or oral, relating to the
subject matter hereof, other than as set forth in this Agreement.
17. Governing Law. This Agreement and the rights and obligations of the parties shall be
governed by, and construed and interpreted in accordance with, the laws of the State of Michigan.
Venue shall lie in Muskegon County, Michigan.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and
year first above written.
City MUSKEGON
By:______________________________________
Its:______________________________________
WC HOCKEY LLC
By:______________________________________
Its:______________________________________
MERCY HEALTH PARTNERS
d/b/a Mercy Health Muskegon
By:______________________________________
Its: President
Exhibit
Sponsorship Terms
During the Term of this Agreement, Mercy shall be entitled to the following permanent
recognition:
1. Creative - Jersey Patch. Mercy Health will be the exclusive sponsor of the Lumberjacks
home and road game jerseys and will be designated with a jersey patch (2.5" tall x 3.5"
wide) approved in advance by Mercy Health.
2. Creative - In-Game Video Support. During the Term of this Agreement, Mercy will be
entitled to the following acknowledgement during Lumberjack home games:
○ 3 Stars of the Game segment will include acknowledgment
■ Both Graphic and PA Read
○ Mercy Logo will appear on videoboard
○ Graphic of Mercy Health Arena to appear 3x per game accompanied by PSA
about what Mercy Health does for the community
○ 10-15 sec in-game spots including “Welcome to Mercy Health Arena” and other
branding pieces for Mercy Health to be mutually agreed upon in advance by both
parties.
3. Exposure - WZZM Broadcast Acknowledgment
o On Air Promotional Placements - “Muskegon Newsroom at Mercy Health Arena”
o Co-Branded Promotional Announcements - Including “Mercy Health Arena” in
live broadcasts from downtown Muskegon.
4. Event Activation. Two (2) Tabling Opportunities (separate from the EVENT
ACTIVATION in the annual review section).
5. Arena Related Marketing and Communications.
o Website
■ Placement of ‘Mercy Health Arena’ to be finalized and in place by March
2020
■ MercyHealthArena.com domain to be secured by March 2020
o Social Media. All mentions of L.C. Walker to be swapped over to Mercy Health
Arena for both Lumberjacks and for the Arena by March 2020.
o Email Advertisements (Timber Times). All mentions of L.C. Walker to be swapped
over to Mercy Health Arena before March 2020.
o Letterhead. All mentions of L.C. Walker to be swapped over to Mercy Health
Arena before March 2020.
o Google listings. All Google listings to be updated before March 2020.
During the Term of this Agreement, Mercy shall be entitled to the following recognition/
benefits, which will be reviewable each season and subject to change, subject to mutual
agreement:
VIP ASSETS / SEASON
● Two (2) Party Deck Nights
○ 40 People including food and beverage (soft drinks and beer)
● Twelve (12) Jacks Club Memberships
● VIP Parking (1) Per Night, (2) Parking Passes per night (game) Western Ave
CREATIVE
● Interior Signage
○ Logo on blimp
● Print
○ Mercy Health Arena logo on cover of Game Program (starting in January 2020)
○ 1-page print ad in all Game Programs starting in 2020-2021
● Jerseys
○ Logo on Timber’s jersey (size of patch to be mutually agreed upon by both
parties)
■ Appearances / hospital visits
○ ‘Mercy Health’ on back top of Mites on Ice jerseys (~12 appearances per year)
● Hockey TV (Online streaming) (BONUS ELEMENT)
○ :30 and/or :60 spots
EVENT ACTIVATION
● In-Arena Usage with Advertising and Marketing of Each Event
○ Presenting Sponsor of Jacks Corporate Partner Night
○ Ability to use Arena to host Mercy's The Ride event, at no extra cost
○ Mercy Health Employee Night (MHEN) - no extra cost for Mercy Health (Group
meal deal and ticket at a reasonable price. Cost per person for MHEN in 2020 is
$10)
○ Use of the Arena for two Mercy Health events per calendar year at no additional
charge (leadership meetings, movie night, etc)
● Fan Engagement Opportunities
○ Mercy Health has the opportunity to supply give-a-ways that the Lumberjacks
would distribute at games.
*Mercy Health reserves the right to replace creative throughout the season at Mercy Health's
own cost. Creative elements swapped out on an annual basis will be the cost of the Arena.
**Mercy Health signage to be in full color unless otherwise agreed upon between Mercy Health
and the Arena.
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