View the PDF version Google Docs PDF Viewer
CITY OF MUSKEGON,
MICHIGAN
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED
JUNE 30, 2021
Prepared By
FINANCIAL SERVICES DIVISION
Kenneth D. Grant James Maurer
Finance Director Information Systems Director
Jessica Rabe Hayden Nickell
Assistant Finance Director Management Assistant
Sarah Wilson
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 (Deficits) ........................................................................................................ 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 Net Position .............................................................................................................. 43
Statement of Changes in Net Position ........................................................................................... 44
Discretely Presented Component Units
Statement of Net Position ................................................................................................................. 45
Statement of Activities ...................................................................................................................... 46
Notes to Financial Statements .............................................................................................................. 47
Required Supplementary Information
Budgetary Comparison Schedule—General Fund ............................................................................... 86
Budgetary Comparison Schedule—Major Street and Trunkline Fund ................................................ 91
Schedule of Changes in Net Pension Liability and Related Ratios ...................................................... 92
Pension System Schedule of Contributions ......................................................................................... 93
Retiree Healthcare System Schedule of Changes in the
Net OPEB Liability and Related Ratios ............................................................................................. 94
Retiree Healthcare System Schedule of Contributions ........................................................................ 95
Retiree Healthcare System Schedule of Investment Returns ............................................................... 96
1
City of Muskegon
TABLE OF CONTENTS
Other Supplemental Information
Other Governmental Funds
Description of Other Governmental Funds ....................................................................................... 98
Combining Balance Sheet ............................................................................................................... 100
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances (Deficits) ............................................................................................................. 101
Other Special Revenue Funds
Combining Balance Sheet............................................................................................................ 102
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances .......................................................................................................................... 103
Budgetary Comparison Schedule—Other Special Revenue Funds ............................................. 104
Other Capital Projects Funds
Combining Balance Sheet............................................................................................................ 108
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances (Deficits) .......................................................................................................... 109
Internal Service Funds
Description of Internal Service Funds ............................................................................................ 111
Combining Statement of Net Position ............................................................................................ 112
Combining Statement of Revenues, Expenses and
Changes in Fund Net Position ..................................................................................................... 113
Combining Statement of Cash Flows.............................................................................................. 114
Fiduciary Funds
Description of Fiduciary Funds....................................................................................................... 115
Custodial Funds
Combining Statement of Net Position ......................................................................................... 116
Combining Statement of Changes in Net Position ...................................................................... 117
Discretely Presented Component Units
Description of Discretely Presented Component Units .................................................................. 119
Combining Balance Sheet ............................................................................................................... 120
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position .................................................................................................. 121
Combining Statement of Revenues, Expenditures and Changes
in Fund Balances (Deficits) ......................................................................................................... 122
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balances (Deficits) to the Statement
of Activities ................................................................................................................................. 123
Schedule of Indebtedness ................................................................................................................... 125
2
City of Muskegon
TABLE OF CONTENTS
STATISTICAL SECTION
Financial Trends
Net Assets/Net Position by Component ............................................................................................. 130
Changes in Net Assets/Net Position ................................................................................................... 131
Fund Balances of Governmental Funds ............................................................................................. 133
Changes in Fund Balances of Governmental Funds .......................................................................... 134
Revenue Capacity
Governmental Activities Revenues by Source ................................................................................... 135
Taxable, Assessed and Equalized and Estimated Actual Valuation of Property................................ 136
Principal Property Taxpayers ............................................................................................................. 137
Property Tax Rates – Direct and Overlapping Government Units ..................................................... 138
Property Tax Levies and Collections ................................................................................................. 139
Total Income Tax Collected and Number of Returns Filed ............................................................... 140
Debt Capacity
Ratio of Outstanding Debt by Type ................................................................................................... 142
Direct and Overlapping Debt ............................................................................................................. 143
Legal Debt Margin Information ......................................................................................................... 144
Revenue Bond Coverage .................................................................................................................... 145
Demographic and Economic Information
Demographic and Economic Statistics ............................................................................................... 146
Principal Employers ........................................................................................................................... 147
Operation Information
Full-time Equivalent Government Employees ................................................................................... 148
Operating Indicators by Function/Program ........................................................................................ 149
Capital Asset Statistics by Function/Program .................................................................................... 150
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 .................................................................................................... 152
Independent Auditor’s Report on Compliance for Each Major
Program and on Internal Control over Compliance Required by
the Uniform Guidance .................................................................................................................... 154
Schedule of Expenditures of Federal Awards ..................................................................................... 156
Notes to Schedule of Expenditures of Federal Awards ....................................................................... 159
Schedule of Findings and Questioned Costs ....................................................................................... 160
Client Documents
Summary Schedule of Prior Audit Findings ................................................................................... 162
Corrective Action Plan ................................................................................................................... 163
3
[This page was intentionally left blank.]
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 9, 2021
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 statements.
Technology
(231)724-4126 This report is published to fulfill that requirement for the fiscal year ended June 30,
FAX (231)722-4301 2021.
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 internal
Finance
(231)724-6713 control that it has established for this purpose. Because the cost of internal control
FAX (231)726-2325 should not exceed anticipated benefits, the objective is to provide reasonable, rather
Fire Department 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, 2021. 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 be
Planning/Zoning 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 and
Public Works
(231)724-4100 provides a full range of traditional municipal services. Policy-making and legislative
FAX (231)722-4188 authority are vested in the governing board (Commission) consisting of the mayor and
SafeBuilt six commissioners. Two commissioners are elected at large and each of the four ward
(Inspections)
(231)724-6715
commissioners is elected by the voters of their respective wards. Commission
FAX (231)728-4371 members serve four-year terms, with the two at large members elected every four years
Treasurer in odd years and the four ward commissioners elected every four years in even years.
(231)724-6720 The Mayor is also elected at-large for a four-year term. The Mayor and Commission
FAX (231)724-6768
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 2020 census population of
37,633, 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 has been the eastern terminus for the high-speed cross-lake ferry connecting
Muskegon with Milwaukee, Wisconsin since 2004. The Lake Express service ferries
100,000-plus passengers each season between the two cities.
Muskegon has been home to the annual Miss Michigan pageant since 1950.
Pere Marquette beach is nationally recognized as one of the best beaches in the nation,
and welcomes hundreds of thousands of visitors.
Muskegon is home to successful summertime festivals that attract more than 100,000
visitors to the community annually. These include Taste of Muskegon, the Discover
Muskegon Festival, Bike Time and Rebel Road, the Unity Christian Music Festival, the
Shoreline Jazz Festival, the Great Lakes Surf Festival, the Burning Foot Beer Festival,
the Muskegon Polish Festival, and the Michigan Irish Music Festival.
6
Muskegon is the cultural hub for west Michigan with numerous museums and live
performance venues: The Muskegon Museum of Art has one of the largest premier art
collections in the Midwest, while the Lakeshore Museum Center provides insight into the
area’s storied past. The Lakeshore Museum Center’s attractions include the Muskegon
Heritage Museum, the former residences of lumber barons Charles H. Hackley and
Thomas Hume, the Fire Barn Museum, and the Scolnik Depression Era House.
Frauenthal Center for the Performing Arts operates throughout the year, hosting the West
Michigan Symphony Orchestra and the Muskegon Civic Theater.
Muskegon’s downtown is home to dozens of monumental public art pieces, and new
pieces are acquired each year. In 2021, local philanthropist Patrick O’Leary provided a
$100,000 fund to provide for the maintenance of the City’s public art collection.
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, recreational items, and
automotive parts. The City of Muskegon also benefits from being home to large government,
corrections, healthcare, and educational employers. While many of 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 experienced some significant adjustments to the COVID-19 pandemic.
However, headed into the pandemic, all local indicators pointed to a strong economy – with both
corporate profits and income tax withholdings significantly higher than previous years.
Indications are that the local economy will recover to pre-COVID-19 levels in 2022.
The City fully recognizes the difficulties it faces as an older urban community. Thus, we have
attempted to position ourselves as a leader in fiscal stability and sustainability, while making key
investments in areas that grow the city’s financial resources over the long-term.
7
Long-term financial planning and major initiatives
Unassigned fund balance in the General Fund at year end was 30.8% of total actual General
Fund revenues for the preceding year. 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, while
accounting for identifiable factors, recent trends, and management’s judgment as to future
developments.
Among the City's major initiatives and accomplishments in fiscal year 2020-21 were the
following:
Downtown Muskegon experienced the commencement and/or completion of a number of
development projects. The 1021 Jefferson project is complete and now provides low-
and moderate-income workforce housing adjacent to city hall in a mixed-use setting; the
Leonard Building mixed use building is nearing completion, and the five story structure is
set to open in January 2022; Samaritas broke ground on a 50+ unit senior affordable
apartment building, and they expect to open in 2022.
Staff has made significant progress in addressing the former rail line that bisects the
Windward Pointe development site – this is the last major hurdle to commencing
development on the 120-acre site. An agreement has been reached to allow the City to
acquire the site and convert much of the corridor into pedestrian and bike trails.
The City completed construction on the $24 Million convention center. The center is
connected to the both the Delta Marriott hotel and the Mercy Health Arena. A naming-
rights partnership was identified and implemented, resulting in the naming of the facility
the VanDyk Mortgage Convention Center, and generating $150,000 in fees.
Construction of Midtown Square Phase 2, which consists of 10 townhouses and 6 single
family homes in the Nelson neighborhood, was started in 2019. The City sold the last
house in October 2021. In total, nearly 100 new homes have been constructed in the City
over the past three years.
Developer broke ground on the Hartshorn Marina Village Development, the Adelaide
Point Development, and the Viridian Shores Development. These three waterfront
developments will feature more than $200 Million in investments and create hundreds of
new housing opportunities.
8
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, 2019. This was the 33rd consecutive year that the City has received this award. The City
has submitted the June 30, 2020 CAFR for consideration but has not received award
confirmation at this time. 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,
Franklin Peterson Kenneth D. Grant
City Manager Finance Director
10
11
Organizational Structure 2020-21
Mayor and City Commission
City Manager External Auditors
City Attorney
Planning Commission
Finance and Public Works Zoning Board of Appeals
Public Safety Development Services
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
Parks and Recreation Planning/Zoning
12
Fire Public Relations BID Board
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, 2021
ELECTED OFFICIALS
Mayor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stephen J. Gawron
At Large
Vice Mayor-Commissioner. . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . Eric Hood
Ward 1
Commissioner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Willie German
Ward 2
Commissioner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Teresa Emory
Ward 3
Commissioner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Michael Ramsey
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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Kenneth D. Grant
13
[This page was intentionally left blank.]
14
FINANCIAL SECTION
15
[This page was intentionally left blank.]
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, 2021, 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, 2021, 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 86 through 96 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 9, 2021
19
[This page was intentionally left blank.]
20
2021 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, 2021. 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 $102,344,375 as of June 30, 2021. The City has a deficit in unrestricted net
position of $29,938,870. 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 increased by $12,905,583 during the year ended June 30, 2021.
The City’s governmental funds reported combined ending fund balance of $16,292,528, a decrease of
$5,279,036 (24%) from the prior year.
The City’s General Fund reported a total fund balance of $11,197,840, an increase of $3,295,985 from
the prior year balance of $7,901,855.
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.
• 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.
21
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 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.
22
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 net
position and a statement of changes in 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.
• Component units – Finally, the City of Muskegon’s Comprehensive Annual Financial report includes
four 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), which is comprised of six designated brownfield areas.
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.
23
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 $102,344,375 as of June 30, 2021. This is an increase of
$12,905,583 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
6/30/2021 6/30/2020 6/30/2021 6/30/2020 6/30/2021 6/30/2020 Change
Current and other assets $40,446 $32,662 $8,568 $4,899 $49,014 $37,561 30.49%
Capital assets 102,697 88,046 63,314 51,152 166,011 139,198 19.26%
Total Assets 143,143 120,708 71,882 56,051 215,025 176,759 21.65%
Deferred outflow s of resources 2,006 4,278 139 297 2,145 4,575 -53.11%
Total Assets and Deferred Outflow s of Resources 145,149 124,986 72,021 56,348 217,170 181,334 19.76%
Long-term liabilities 71,213 67,333 10,793 8,880 82,006 76,213 7.60%
Other liabilities 22,650 10,208 6,804 4,624 29,454 14,832 98.58%
Total Liabilities 93,863 77,541 17,597 13,504 111,460 91,045 22.42%
Deferred inflow s of resources 3,147 795 219 55 3,366 850 296.00%
Total Liabilities and Deferred Outflow s of Resources 97,010 78,336 17,816 13,559 114,826 91,895 24.95%
Net Position `
Net investment in capital assets 72,201 70,275 54,257 44,543 126,458 114,818 10.14%
Restricted 5,003 4,460 822 599 5,825 5,059 15.14%
Unrestricted -29,065 -28,085 -874 -2,353 -29,939 -30,438 -1.64%
Total Net Position $48,139 $46,650 $54,205 $42,789 $102,344 $89,439 14.43%
The bulk of the City’s net position $126,457,976 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.
Another $5,825,269 of the City’s net position are legally restricted as to use. The City has a deficit in
unrestricted net position of $29,938,870. 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
improved $499,707 during the year.
24
Changes in net position. The City’s total revenues were $77,714,171 for the year ended June 30, 2021.
This represents a 27.3% increase over total revenues collected during the prior fiscal year.
Approximately 33.6% of the City’s revenue stream came from charges to users of specific services such
as water or sewer. Another 18.3% came from grants from the state and federal governments and 23.7%
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, 2021 was $64,843,588. This
represents a 12.7% decrease from reported expenses for the last fiscal year ended June 30, 2020. 73.4%
of the City’s expenses were for governmental activities such as police and fire protection, streets, parks,
and general administration. The remaining 26.6% 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 increased $1,489,017 and the net position for
business-type activities increased by $11,416,566. For governmental activities, most of these changes
are related to the changes in net pension liability and net other postemployment benefits liability. For
business-type activities, the changes represent forgiveness of State Revolving Fund debt
25
Changes in City’s Net Position
(In thousands of dollars)
Governmental Business-Type
Activities Activities Total Percentage
6/30/2021 6/30/2020 6/30/2021 6/30/2020 6/30/2021 6/30/2020 Change
Program revenues
Charges for services $7,951 $7,980 $18,229 $16,789 $26,180 $24,769 5.70%
Operating grants and contributions 9,839 7,398 - 94 9,839 7,492 31.33%
Capital grants and contributions 2,901 4,064 10,354 - 13,255 4,064 226.16%
General revenues
Property taxes 8,813 8,467 - - 8,813 8,467 4.09%
Income taxes 9,609 9,437 - - 9,609 9,437 1.82%
State shared revenues 6,427 5,276 - - 6,427 5,276 21.82%
All other 3,580 1,508 10 9 3,590 1,517 136.65%
Total revenues 49,120 44,130 28,593 16,892 77,713 61,022 27.35%
Governmental activities expenses
Public representation 1,604 1,501 - - 1,604 1,501 6.86%
Administrative services 826 962 - - 826 962 -14.14%
Financial services 5,040 3,007 - - 5,040 3,007 67.61%
Public safety 18,249 25,982 - - 18,249 25,982 -29.76%
Public w orks 4,026 4,582 - - 4,026 4,582 -12.13%
Highw ays, streets and bridges 6,863 7,593 - - 6,863 7,593 -9.61%
Community and economic development 5,000 5,359 - - 5,000 5,359 -6.70%
Culture and recreation 4,507 5,270 - - 4,507 5,270 -14.48%
General administration 404 390 - - 404 390 3.59%
Interest on long-term debt 1112 732 - - 1,112 732 51.91%
Business-type activities expenses
Sew er - - 8,085 9,902 8,085 9,902 -18.35%
Water - - 8,612 8,438 8,612 8,438 2.06%
Marina and launch ramp - - 515 529 515 529 -2.65%
Total expenses 47,631 55,378 17,212 18,869 64,843 74,247 -12.67%
Change in net position before transfers 1,489 (11,248) 11,381 (1,977) 12,870 (13,225) -197.32%
Transfers - - 35 - 35 - -
Change in net position 1,489 (11,248) 11,416 (1,977) 12,905 (13,225) -197.58%
Net position at beginning of year 46,650 57,898 42,789 44,766 89,439 102,664 -12.88%
Net position at end of year $48,139 $46,650 $54,205 $42,789 $102,344 $89,439 14.43%
26
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, 2021 was
$47,613,260.
• The net cost that City taxpayers paid for these activities through local property taxes and income
taxes was $18,422,373, or about 38% 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 or use of net position.
Net Cost of Selected City Functions
(in thousands of dollars)
Total Cost of Services Net Cost of Services
6/30/2021 6/30/2020 % Change 6/30/2021 6/30/2020 % Change
Governmental activities
Public safety $18,249 $25,982 -29.76% $14,257 $23,528 -39.40%
Public w orks 4,026 4,581 -12.12% 3,131 3,746 -16.42%
Highw ays, streets and bridges 6,863 7,593 -9.61% 864 897 -3.68%
Community and economic development 5,000 5,359 -6.70% (78) (38) 105.26%
Culture and recreation 4,507 5,270 -14.48% 2,102 2,853 -26.32%
All other 8,986 6,593 36.30% 6,664 4,950 34.63%
Total governmental activities $47,631 $55,378 -13.99% $26,940 $35,936 -25.03%
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, 2021, the City’s total business-type activities realized an
overall increase in net position of $11,416,566.
Sewer Fund net position increased $10,849,375 primarily as result of forgiveness of debt. The Water
Fund saw a net position increase of $1,052,490. Marina and Launch Ramp Fund net position decreased
$326,924.
27
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, 2021 were the General Fund, the Major
Street and Trunkline Fund, the State Grants Fund, and Convention Center 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 considering changing economic conditions and
policy priorities. The following table shows the General Fund year-end unassigned fund balance for the
last five years.
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%)
6/30/2021 $9,121,955 54.06% $29,653,448 30.76%
6/30/2020 $5,920,869 -9.79% 28,747,772 20.60%
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 19.10% 25,821,114 23.81%
For the year ended June 30, 2021, General Fund revenues were $1,571,480 higher than the final
amended budget estimate due to higher than anticipated income taxes and revenue sharing.
General Fund expenditures were $903,355 lower than projected in the final amended budget.
Major Street and Trunkline, State Grant, and Convention Center 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, 2021, the fund balance of the Major Street and Trunkline Fund increased $156,869.
The State Grants Fund received $11,440,947 in funding from the American Rescue Plan Act (ARPA)
which will be expended over the next few years.
The Convention Center Fund is accounting for the construction of the Convention Center and is being
funded by the 2019 Capital Improvement Bond of $19,420,000. The Convention Center Construction
Fund has a fund deficit of $1,892,438 as of June 30, 2021.
28
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
As of June 30, 2021, the City had invested $166,011,106 in a variety of capital assets, including land,
streets, equipment, buildings, water and sewer lines, and vehicles. This is an increase of $26,813,518
from capital assets reported as of June 30, 2020. The increase is due to current year additions offset by
normal depreciation of assets. Note F of the notes to the basic
financial statements provides detailed information on the
Bond Ratings
City’s capital asset investment.
Long-Term Debt The City’s limited full faith and credit bonds
(bonds guaranteed by the City’s taxing
At June 30, 2021, the City had $42,109,969 in bonds and other powers) were upgraded by Standard &
long-term obligations outstanding. This represents a 20.32% Poor’s from a rating of “A+” to “AA-“ in
increase from the prior year. The City issued new debt for a early 2016. The City’s rating remained at
improvements to the City central fire station and water and
“AA-“ in 2021. The City’s Water System
sewer improvements.
revenue bonds carry the “AA-“ S&P rating.
Additional information concerning the City’s long-term debt is
presented in Note I 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
6/30/2021 6/30/2020 6/30/2021 6/30/2020 6/30/2021 6/30/2020 Change
Due within one year $1,526 $1,340 $1,312 $803 $2,838 $2,143 32.43%
Due in more than one year 31,257 26,793 8,015 6,061 39,272 32,854 19.53%
Total bonds & other obligations $32,783 $28,133 $9,327 $6,864 $42,110 $34,997 20.32%
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 $1,352,248 at year-end
as shown in the table below. This represents a decrease of 23.18% 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 I to the basic financial statements and
is summarized as follows:
Component Unit Long Term Debt – Bonds and Other Obligations
(In thousands of dollars)
Local Development
Total Percentage
Finance Authority
6/30/2021 6/30/2020 6/30/2021 6/30/2020 Change
Due within one year $245 $395 $245 $395 -37.97%
Due in more than one year 1,107 1,365 1,107 1,365 -18.90%
Total bonds & other obligations $1,352 $1,760 $1,352 $1,760
-23.18%
29
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES
The City’s fiscal year 2021-22 capital budget anticipates spending $20,734,537 for capital projects,
consisting of street improvements, water and sewer system improvements, scheduled equipment
replacements, the rehab of houses in a city neighborhood and the replacement of fire department
rescue equipment.
From an operating standpoint, the City’s 2021-22 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 remain stable at approximately 257.5.
• 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 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 increased 1.3% from $9,137,714 for the year ended June 30, 2020 to $9,256,826
for the year ended June 30, 2021. For 2021-22, the City has estimated income tax revenue to be
$9,100,000.
Year City Income Tax Revenues Percent Change
6/30/2021 $9,256,826 1.3%
6/30/2020 $9,137,714 5.1%
6/30/2019 $8,691,673 -0.8%
6/30/2018 $8,758,674 1.7%
6/30/2017 8,610,812 5.6%
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 2021-22, the City tax levy will be at 10 mills for general operations and 3 mills for sanitation service.
We project that $7,705,754 in total property tax revenue will be collected during fiscal year 2021-22.
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 13% 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:
Year State Shared Revenues Percent Change
6/30/2021 $4,733,888 14.9%
6/30/2020 $4,117,935 -3.6%
6/30/2019 $4,271,438 2.8%
6/30/2018 $4,153,072 2.8%
6/30/2017 $4,046,147 4.1%
For 2021-22, the City projects $4,399,008 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:
Street Revenues from Percent
Year State Change
6/30/2021 $5,961,524 9.4%
6/30/2020 $5,450,220 6.2%
6/30/2019 $5,134,277 1.4%
6/30/2018 $5,060,936 25.9%
6/30/2017 $4,020,630 1.0%
31
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 2021-22 up
to $5,624,629.
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 $17,581,112 during the year ended June 30, 2021. 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, 2021 water rates increased by 4%. Water rates will
increase by 4% in each of the next two 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, 2021
Governmental Business-type Component
Activities Activities Total Units
ASSETS
Current assets
Cash and investments $ 30,258,368 $ 2,290,366 $ 32,548,734 $ 323,582
Assets managed by others 1,490,799 - 1,490,799 -
Receivables 4,331,651 3,462,792 7,794,443 -
Due from other governmental units 2,277,455 942,769 3,220,224 -
Internal balances (674,327) 674,327 - -
Due from component units 652,132 - 652,132 -
Inventories 7,318 235,287 242,605 -
Prepaid items 555,994 144,657 700,651 -
Total current assets 38,899,390 7,750,198 46,649,588 323,582
Noncurrent assets
Restricted cash and investments - 818,000 818,000 -
Advances to component units 593,307 - 593,307 -
Notes receivable, less amounts due within one year 953,966 - 953,966 -
Capital assets, net
Nondepreciable 43,354,368 12,054,782 55,409,150 400,000
Depreciable 59,342,824 51,259,132 110,601,956 762,529
Total noncurrent assets 104,244,465 64,131,914 168,376,379 1,162,529
Total assets 143,143,855 71,882,112 215,025,967 1,486,111
DEFERRED OUTFLOWS OF RESOURCES
Related to pension 1,356,700 94,316 1,451,016 -
Related to other postemployment benefits 648,880 45,110 693,990 -
Total deferred outflows of resources 2,005,580 139,426 2,145,006 -
Total assets and deferred outflows of resources 145,149,435 72,021,538 217,170,973 1,486,111
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 5,585,663 4,538,040 10,123,703 101,053
Due to other governmental units 26,549 841,429 867,978 -
Due to primary government - - - 652,132
Short-term draw note 1,108,007 - 1,108,007 -
Unearned revenues - unused Farmers Market tokens 150,187 - 150,187 -
Unearned revenues - expenditure-driven grants 14,216,861 - 14,216,861 -
Unearned revenues - prepaid events 36,687 - 36,687 -
Unearned revenues - prepaid fees - 112,994 112,994 -
Bonds and other obligations, due within one year 1,526,100 1,311,750 2,837,850 245,000
Total current liabilities 22,650,054 6,804,213 29,454,267 998,185
Noncurrent liabilities
Advances from primary government - - - 593,307
Bonds and other obligations, less amounts due within one year 31,256,965 8,015,154 39,272,119 1,107,248
Net pension liability 30,755,115 2,138,057 32,893,172 -
Net other postemployment benefits liability 9,200,956 639,639 9,840,595 -
Total noncurrent liabilities 71,213,036 10,792,850 82,005,886 1,700,555
Total liabilities 93,863,090 17,597,063 111,460,153 2,698,740
DEFERRED INFLOWS OF RESOURCES
Related to pension 2,544,270 176,874 2,721,144 -
Related to other postemployment benefits 603,356 41,945 645,301 -
Total deferred inflows of resources 3,147,626 218,819 3,366,445 -
Total liabilities and deferred inflows of resources 97,010,716 17,815,882 114,826,598 2,698,740
NET POSITION
Net investment in capital assets 72,200,515 54,257,461 126,457,976 (189,719)
Restricted
Highways, streets and bridges 2,483,456 - 2,483,456 -
Debt service - 822,000 822,000 -
Mercy Health Arena 54,928 - 54,928 -
Law enforcement 22,229 - 22,229 -
Business improvement districts 136,968 - 136,968 -
Perpetual care
Expendable 597,217 - 597,217 -
Non-expendable 1,652,408 - 1,652,408 -
Other purposes 56,063 - 56,063 -
Unrestricted (29,065,065) (873,805) (29,938,870) (1,022,910)
Total net position $ 48,138,719 $ 54,205,656 $ 102,344,375 $ (1,212,629)
The accompanying notes are an integral part of this statement.
34
City of Muskegon
STATEMENT OF ACTIVITIES
For the year ended June 30, 2021
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 $ 1,603,410 $ 280,395 $ - $ - $ (1,323,015) $ - $ (1,323,015) $ -
Administrative services 826,344 504,281 - 433,580 111,517 - 111,517 -
Financial services 5,039,787 988,501 50,000 - (4,001,286) - (4,001,286) -
Public safety 18,249,379 2,207,996 1,783,920 - (14,257,463) - (14,257,463) -
Public works 4,025,982 828,098 66,965 - (3,130,919) - (3,130,919) -
Highways, streets and bridges 6,862,862 187,478 5,797,955 13,110 (864,319) - (864,319) -
Community and economic development 4,999,907 912,247 2,058,974 2,106,828 78,142 - 78,142 -
Culture and recreation 4,507,120 1,976,029 81,431 347,658 (2,102,002) - (2,102,002) -
General administration 404,303 65,592 - - (338,711) - (338,711) -
Interest on long-term debt 1,112,166 - - - (1,112,166) - (1,112,166) -
Total governmental activities 47,631,260 7,950,617 9,839,245 2,901,176 (26,940,222) - (26,940,222) -
Business-type activities
Sewer 8,084,729 9,298,156 - 9,568,000 - 10,781,427 10,781,427 -
Water 8,612,574 8,752,570 - 780,250 - 920,246 920,246 -
Marina and launch ramp 515,025 178,706 - 6,294 - (330,025) (330,025) -
Total business-type activities 17,212,328 18,229,432 - 10,354,544 - 11,371,648 11,371,648 -
35
Total primary government $ 64,843,588 $ 26,180,049 $ 9,839,245 $ 13,255,720 (26,940,222) 11,371,648 (15,568,574) -
Component units
Local Development Finance Authority - SmartZone $ 206,969 $ - $ - $ 350,000 - - - 143,031
Downtown Development Authority 580,098 - 168,325 - - - - (411,773)
Tax Increment Finance Authority 50,000 - - - - - - (50,000)
Brownfield Redevelopment Authorities 1,256,102 - - - - - - (1,256,102)
Total component units $ 2,093,169 $ - $ 168,325 $ 350,000 - - - (1,574,844)
General revenues
Property taxes 8,813,155 - 8,813,155 1,393,555
Income taxes 9,609,218 - 9,609,218 -
Cable franchise agreement 374,219 - 374,219 -
Grants and contributions not restricted to specific programs 6,427,138 - 6,427,138 29,359
Unrestricted investment earnings 229,177 9,918 239,095 1,760
Miscellaneous 370,268 - 370,268 -
Gain on sale of capital asset 2,641,064 - 2,641,064 304
Transfers (35,000) 35,000 - -
Total general revenues 28,429,239 44,918 28,474,157 1,424,978
Change in net position 1,489,017 11,416,566 12,905,583 (149,866)
Net position at beginning of year 46,649,702 42,789,090 89,438,792 (1,062,763)
Net position at end of year $ 48,138,719 $ 54,205,656 $ 102,344,375 $ (1,212,629)
The accompanying notes are an integral part of this statement.
City of Muskegon
BALANCE SHEET
Governmental Funds
June 30, 2021
Convention
Major Street Center Other Total
General and Trunkline State Grants Construction Governmental Governmental
Fund Fund Fund Fund Funds Funds
ASSETS
Cash and investments $ 9,992,054 $ 2,359,634 $ 12,990,641 $ 162,646 $ 2,943,588 $ 28,448,563
Assets managed by others - - - - 1,490,800 1,490,800
Receivables
Accounts and loans (net of allowance for uncollectibles) 231,419 38,019 18,859 - 1,749,722 2,038,019
Property taxes 58,670 - - - - 58,670
Income taxes 1,578,153 - - - - 1,578,153
Due from other governmental units 904,628 840,915 49,628 12,036 470,248 2,277,455
Due from other funds 1,050,377 - - - - 1,050,377
Due from component units 652,132 - - - - 652,132
Advances to component units - - - - 202,227 202,227
Prepaid items 259,920 30,716 - - 35,876 326,512
Total assets $ 14,727,353 $ 3,269,284 $ 13,059,128 $ 174,682 $ 6,892,461 $ 38,122,908
LIABILITIES
Accounts payable $ 2,250,444 $ 844,089 $ 32,562 $ 1,067,120 $ 235,717 $ 4,429,932
Accrued liabilities 524,363 13,579 - - 46,580 584,522
Due to other governmental units 20,519 3,563 - - 2,466 26,548
Due to other funds - - - - 627,636 627,636
Short-term draw note - - - - 1,108,007 1,108,007
Unearned revenues - unused Farmers Market tokens - - - - 150,187 150,187
Unearned revenues - expenditure-driven grants 84,187 - 13,025,018 1,000,000 107,656 14,216,861
Unearned revenues - prepaid events - - - - 36,687 36,687
Total liabilities 2,879,513 861,231 13,057,580 2,067,120 2,314,936 21,180,380
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - income taxes 650,000 - - - - 650,000
FUND BALANCES (DEFICITS)
Nonspendable
Prepaid items 259,920 30,716 - - 35,876 326,512
Perpetual care 10,000 - - - 1,642,408 1,652,408
Restricted
Highways, streets and bridges 66,965 2,377,337 - - 1,181,198 3,625,500
Mercy Health Arena - - - - 26,490 26,490
Law enforcement - - - - 22,229 22,229
Business improvement districts - - - - 136,968 136,968
Perpetual care - - - - 597,217 597,217
Other purposes - - - - 56,063 56,063
Committed for social equity program 39,000 - - - - 39,000
Assigned for capital projects and public improvements 1,700,000 - 1,548 - 1,906,042 3,607,590
Unassigned 9,121,955 - - (1,892,438) (1,026,966) 6,202,551
Total fund balances (deficits) 11,197,840 2,408,053 1,548 (1,892,438) 4,577,525 16,292,528
Total liabilities, deferred inflows of
resources and fund balances (deficits) $ 14,727,353 $ 3,269,284 $ 13,059,128 $ 174,682 $ 6,892,461 $ 38,122,908
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, 2021
Total fund balance—governmental funds $ 16,292,528
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 $ 174,623,761
Accumulated depreciation (74,625,986) 99,997,775
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 650,000
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 (251,700)
Bonds and notes payable (30,496,677)
Compensated absences (2,125,762)
Net pension liability and related deferred outflows/inflows of resources (30,576,152)
Net other post employment benefits liability and related
outflows/inflows of resources (8,763,755) (72,214,046)
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 4,125,149
Internal balances representing the cumulative difference between
actual costs and amounts charged to business-type activities (712,687) 3,412,462
Net position of governmental activities $ 48,138,719
The accompanying notes are an integral part of this statement.
37
City of Muskegon
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (DEFICITS)
Governmental Funds
For the year ended June 30, 2021
Convention
Major Street Center Other Total
General and Trunkline State Grants Construction Governmental Governmental
Fund Fund Fund Fund Funds Funds
REVENUES
Taxes $ 17,700,658 $ - $ - $ - $ - $ 17,700,658
Licenses and permits 2,246,375 - - - - 2,246,375
Intergovernmental revenues
Federal 1,667,916 - - - 1,811,560 3,479,476
State 5,752,393 4,573,237 1,518,800 - 1,391,287 13,235,717
Local 50,000 - - 790,749 575,151 1,415,900
Charges for services 3,672,008 11,521 - - 1,214,796 4,898,325
Fines and forfeitures 584,471 - - - 10,342 594,813
Investment earnings and rental income 198,408 10,039 373 6,509 33,036 248,365
Income from assets managed by others - - - - 229,194 229,194
Other 1,184,254 27,003 - 202,500 1,012,769 2,426,526
Total revenues 33,056,483 4,621,800 1,519,173 999,758 6,278,135 46,475,349
EXPENDITURES
Current
Public representation services 1,556,327 - - - - 1,556,327
Administrative services 783,403 - - - - 783,403
Financial services 4,810,339 - - - - 4,810,339
Public safety 14,641,568 - - - - 14,641,568
Public works 3,442,980 - - - 161,742 3,604,722
Highways, streets and bridges - 4,234,631 - - 1,336,973 5,571,604
Community and economic development 838,868 - - - - 838,868
Culture and recreation 1,949,114 - - - 1,886,678 3,835,792
Other governmental functions 380,232 - - - - 380,232
Debt service
Principal 2,285,300 220,000 - 175,000 133,504 2,813,804
Interest and fees 250,991 10,300 - 615,749 66,176 943,216
Bond issuance costs 140,750 - - - - 140,750
Capital outlay 4,358,050 - 1,518,801 10,473,442 4,884,443 21,234,736
Total expenditures 35,437,922 4,464,931 1,518,801 11,264,191 8,469,516 61,155,361
Excess of revenues over (under) expenditures (2,381,439) 156,869 372 (10,264,433) (2,191,381) (14,680,012)
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets - - - - 2,908,552 2,908,552
Long-term debt issued 4,325,000 - - - - 4,325,000
Refunding bonds issued 2,055,000 - - - - 2,055,000
Premium on bonds issued 772,424 - - - - 772,424
Transfers in - - - - 895,000 895,000
Transfers out (1,475,000) - - (40,000) (40,000) (1,555,000)
Total other financing sources (uses) 5,677,424 - - (40,000) 3,763,552 9,400,976
Net change in fund balances (deficits) 3,295,985 156,869 372 (10,304,433) 1,572,171 (5,279,036)
Fund balances at beginning of year 7,901,855 2,251,184 1,176 8,411,995 3,005,354 21,571,564
Fund balances (deficits) at end of year $ 11,197,840 $ 2,408,053 $ 1,548 $ (1,892,438) $ 4,577,525 $ 16,292,528
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, 2021
Net change in fund balances—total governmental funds $ (5,279,036)
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 $ (4,737,533)
Capital outlay 19,695,829 14,958,296
Revenues reported in the Statement of Activities that do not provide current
financial resources are not reported as revenues in the governmental funds.
Income taxes 50,000
Special assessments (7,520) 42,480
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.
Issuance of long-term debt (6,380,000)
Premium on long-term debt issued (772,424)
Repayment of principal on long-term debt 2,813,804 (4,338,620)
Changes in accrual of interest and amortization of premiums and discounts
Change in accrued interest payable (53,700)
Amortization of premiums and discounts 25,500 (28,200)
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 (302,519)
Change in net pension liability and related deferred outflows/inflows of resources (4,060,345)
Change in net other post employment benefits liability
and related deferred outflows/inflows of resources 192,483 (4,170,381)
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 146,103
Change in internal balances representing the current year difference
between actual costs and amounts charged to business-type activities 158,375 304,478
Change in net position of governmental activities $ 1,489,017
The accompanying notes are an integral part of this statement.
39
City of Muskegon
STATEMENT OF NET POSITION
Proprietary Funds
June 30, 2021
Governmental
Activitie s -
Business-type Activitie s - Ente rprise Funds Internal
Marina and Service
Sewer Water Launch Ramp Total Funds
ASSETS
Current assets
Cash and investments $ - $ 2,290,366 $ - $ 2,290,366 $ 1,809,803
Receivables 1,838,310 1,586,042 38,440 3,462,792 1,610,774
Due from other governmental units 729,884 212,885 - 942,769 -
Inventories 30,234 205,053 - 235,287 7,318
Prepaid items 59,943 82,257 2,457 144,657 229,482
Total current assets 2,658,371 4,376,603 40,897 7,075,871 3,657,377
Noncurrent assets
Restricted cash and investments 101,000 717,000 - 818,000 -
Advances to component units - - - - 391,080
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 30,903,618 74,043,369 2,322,488 107,269,475 1,668,215
Machinery and equipment 157,622 3,101,790 60,620 3,320,032 9,750,170
Construction in progress 5,843,401 5,999,917 69,214 11,912,532 -
Less accumulated depreciation (12,050,218) (45,779,289) (3,452,781) (61,282,288) (9,085,683)
Net capital assets 24,870,611 37,532,235 911,068 63,313,914 2,699,417
Total noncurrent assets 24,971,611 38,249,235 911,068 64,131,914 3,090,497
Total assets 27,629,982 42,625,838 951,965 71,207,785 6,747,874
DEFERRED OUTFLOWS OF RESOURCES
Related to pension 21,765 72,551 - 94,316 58,040
Related to other postemployment benefits 10,410 34,700 - 45,110 27,760
Total deferred outflows of resources 32,175 107,251 - 139,426 85,800
Total assets and deferred outflows of resources 27,662,157 42,733,089 951,965 71,347,211 6,833,674
LIABILITIES
Current liabilities
Accounts payable 2,237,687 2,065,484 62,948 4,366,119 269,193
Accrued liabilities 47,008 122,930 1,983 171,921 50,316
Due to other governmental units 831,845 9,584 - 841,429 -
Due to other funds 29,970 - 8,390 38,360 384,381
Unearned revenues - prepaid fees - - 112,994 112,994 -
Bonds and other obligations, due within one year 284,400 1,026,050 1,300 1,311,750 26,700
Total current liabilities 3,430,910 3,224,048 187,615 6,842,573 730,590
Noncurrent liabilities
Bonds and other obligations, less amounts due within one year 2,429,718 5,578,663 6,773 8,015,154 133,925
Net pension liability 493,398 1,644,659 - 2,138,057 1,315,727
Net other postemployment benefits liability 147,609 492,030 - 639,639 393,624
Total noncurrent liabilities 3,070,725 7,715,352 6,773 10,792,850 1,843,276
Total liabilities 6,501,635 10,939,400 194,388 17,635,423 2,573,866
DEFERRED INFLOWS OF RESOURCES
Related to pension 40,817 136,057 - 176,874 108,846
Related to other postemployment benefits 9,680 32,265 - 41,945 25,813
Total deferred inflows of resources 50,497 168,322 - 218,819 134,659
Total liabilities and deferred inflows of resources 6,552,132 11,107,722 194,388 17,854,242 2,708,525
NET POSITION
Net investment in capital assets 22,231,078 31,115,315 911,068 54,257,461 2,699,417
Restricted for debt service 101,000 721,000 - 822,000 -
Unrestricted (1,222,053) (210,948) (153,491) (1,586,492) 1,425,732
Total net position $ 21,110,025 $ 31,625,367 $ 757,577 53,492,969 $ 4,125,149
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 712,687
Net position of business-type activities $ 54,205,656
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, 2021
Governmental
Activities -
Business-type Activities - Enterprise Funds Internal
Marina and Service
Sewer Water Launch Ramp Total Funds
OPERATING REVENUES
Charges for services $ 9,139,883 $ 8,441,229 $ 178,286 $ 17,759,398 $ 8,889,155
Other 158,273 311,341 420 470,034 97,102
Total operating revenues 9,298,156 8,752,570 178,706 18,229,432 8,986,257
OPERATING EXPENSES
Administration 593,928 1,263,568 8,119 1,865,615 791,527
Insurance premiums and claims - - - - 4,839,612
Wastewater treatment 5,271,658 - - 5,271,658 -
Wastewater maintenance 1,615,456 - - 1,615,456 -
Filtration plant operations - 2,419,539 - 2,419,539 -
Water distribution - 2,798,889 - 2,798,889 -
Other operations - - 397,807 397,807 3,400,274
Depreciation 450,685 1,860,487 106,040 2,417,212 542,440
Total operating expenses 7,931,727 8,342,483 511,966 16,786,176 9,573,853
Operating income (loss) 1,366,429 410,087 (333,260) 1,443,256 (587,596)
NONOPERATING REVENUES (EXPENSES)
Investment earnings 138 9,738 42 9,918 24,721
Gain on sale of capital assets - - - - 83,978
Interest expense (6,452) (112,860) - (119,312) -
Bond issuance costs (78,740) (69,725) - (148,465) -
Total nonoperating revenue (expenses) (85,054) (172,847) 42 (257,859) 108,699
Income (loss) before capital contributions and transfers 1,281,375 237,240 (333,218) 1,185,397 (478,897)
CAPITAL CONTRIBUTIONS AND TRANSFERS
Capital grants and contributions 9,568,000 780,250 6,294 10,354,544 -
Transfers in - 35,000 - 35,000 625,000
Total capital contributions and transfers 9,568,000 815,250 6,294 10,389,544 625,000
Change in net position 10,849,375 1,052,490 (326,924) 11,574,941 146,103
Net position at beginning of year 10,260,650 30,572,877 1,084,501 3,979,046
Net position at end of year $ 21,110,025 $ 31,625,367 $ 757,577 $ 4,125,149
Adjustment for the net effect of the current year activity between
the internal service funds and the enterprise funds (158,375)
Change in net position of business-type activities $ 11,416,566
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, 2021
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 $ 8,057,091 $ 7,938,041 $ 259,133 $ 16,254,265 $ 53,808
Receipts from interfund services provided 57,183 155,775 - 212,958 7,297,489
Other receipts - - - - 1,502,594
Payments to suppliers (6,275,093) (3,483,675) (277,989) (10,036,757) (6,671,503)
Payments to employees (721,796) (1,999,003) (38,550) (2,759,349) (1,336,543)
Payments for interfund services used (620,526) (822,809) (29,140) (1,472,475) (868,416)
Net cash provided by (used for) operating activities 496,859 1,788,329 (86,546) 2,198,642 (22,571)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Transfers in - 35,000 - 35,000 625,000
Interfund borrowing (1,269,042) - 8,390 (1,260,652) (10,136)
Advances to component units - - - - 90,140
Net cash provided by (used for) noncapital financing activities (1,269,042) 35,000 8,390 (1,225,652) 705,004
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Proceeds from long-term debt 10,662,794 2,893,953 - 13,556,747 -
Issuance costs on long-term debt (78,740) (69,725) - (148,465) -
Capital contributions 9,568,000 780,250 6,294 10,354,544 -
Purchases of capital assets (9,707,858) (3,222,070) (14,214) (12,944,142) (322,030)
Principal paid on capital debt (9,568,000) (1,540,250) - (11,108,250) -
Interest paid on capital debt (3,151) (107,860) - (111,011) -
Proceeds from sale of capital assets - - - - 170,913
Net cash provided by (used for) capital and related financing activities 873,045 (1,265,702) (7,920) (400,577) (151,117)
CASH FLOW FROM INVESTING ACTIVITIES
Investment earnings 138 9,738 42 9,918 24,721
Net increase (decrease) in cash and investments 101,000 567,365 (86,034) 582,331 556,037
Cash and investments at beginning of year - 2,440,001 86,034 2,526,035 1,253,766
Cash and investments at end of year $ 101,000 $ 3,007,366 $ - $ 3,108,366 $ 1,809,803
Reconciliation of cash and investments to the Statement of Net Position
Cash and investments $ - $ 2,290,366 $ - $ 2,290,366 $ 1,809,803
Restricted cash and investments 101,000 717,000 - 818,000 -
$ 101,000 $ 3,007,366 $ - $ 3,108,366 $ 1,809,803
Reconciliation of operating income (loss) to net cash provided by (used for)
operating activities
Operating income (loss) $ 1,366,429 $ 410,087 $ (333,260) $ 1,443,256 $ (587,596)
Adjustments to reconcile operating income (loss) to net cash provided by
(used for) operating activities
Depreciation expense 450,685 1,860,487 106,040 2,417,212 542,440
Change in assets and liabilities
Receivables (1,183,882) (658,754) (26,384) (1,869,020) (132,366)
Inventories (14,729) (95,949) - (110,678) (1,285)
Prepaid items (1,748) (4,889) 1,818 (4,819) 14,393
Accounts payable (201,319) 44,882 51,120 (105,317) (77,132)
Unearned revenues - - 106,811 106,811 -
Accrued liabilities 81,423 232,465 7,309 321,197 218,975
Net cash provided by (used for) operating activities $ 496,859 $ 1,788,329 $ (86,546) $ 2,198,642 $ (22,571)
The accompanying notes are an integral part of this statement.
42
City of Muskegon
STATEMENT OF NET POSITION
Fiduciary Funds
June 30, 2021
Other Post-
Employment
Benefits Custodial
Trust Fund Funds
ASSETS
Cash and investments $ 25,146,235 $ 842,960
Accounts receivable - 145,552
Total assets 25,146,235 988,512
LIABILITIES
Accounts payable - 125,849
Due to other governmental units - 763,408
Deposits held for others - 99,255
Total liabilities - 988,512
NET POSITION
Restricted for other post-employment benefits $ 25,146,235 $ -
The accompanying notes are an integral part of this statement.
43
City of Muskegon
STATEMENT OF CHANGES IN NET POSITION
Fiduciary Funds
For the year ended June 30, 2021
Other Post-
Employment
Benefits Custodial
Trust Fund Funds
ADDITIONS
Tax collections for other governments $ - $ 22,844,643
Other collections for third parties - 1,268,438
Employer contributions 1,270,526 -
Net investment income 4,279,670 -
Total additions 5,550,196 24,113,081
DEDUCTIONS
Payment of taxes to other governments - 22,844,643
Other payments to third parties - 1,268,438
Benefit payments 1,622,024 -
Administrative expenses 45,288 -
Total deductions 1,667,312 24,113,081
Change in net position 3,882,884 -
Net position at beginning of year, as restated 21,263,351 -
Net position at end of year $ 25,146,235 $ -
The accompanying notes are an integral part of this statement.
44
City of Muskegon
STATEMENT OF NET POSITION
Discretely Presented Component Units
June 30, 2021
Local
Development Tax
Finance Downtown Increment Brownfield
Authority - Development Finance Redevelopment
SmartZone Authority Authority Authorities Total
ASSETS
Current assets
Cash and investments $ 40,168 $ 159,587 $ 17,885 $ 105,942 $ 323,582
Noncurrent assets
Capital assets, net
Nondepreciable 400,000 - - - 400,000
Depreciable 762,529 - - - 762,529
Total noncurrent assets 1,162,529 - - - 1,162,529
Total assets 1,202,697 159,587 17,885 105,942 1,486,111
LIABILITIES
Current liabilities
Accounts payable - 69,446 - 20,550 89,996
Accrued liabilities 7,000 4,057 - - 11,057
Due to primary government - - - 652,132 652,132
Bonds and other obligations, due within one year 245,000 - - - 245,000
Total current liabilities 252,000 73,503 - 672,682 998,185
Noncurrent liabilities
Advances from primary government - - - 593,307 593,307
Bonds and other obligations, less amounts due
within one year 1,107,248 - - - 1,107,248
Total noncurrent liabilities 1,107,248 - - 593,307 1,700,555
Total liabilities 1,359,248 73,503 - 1,265,989 2,698,740
NET POSITION
Net investment in capital assets (189,719) - - - (189,719)
Unrestricted 33,168 86,084 17,885 (1,160,047) (1,022,910)
Total net position $ (156,551) $ 86,084 $ 17,885 $ (1,160,047) $ (1,212,629)
The accompanying notes are an integral part of this statement.
45
City of Muskegon
STATEMENT OF ACTIVITIES
Discretely Presented Component Units
For the year ended June 30, 2021
Net (Expense) Revenue and Changes in Net Position
Local
Program Revenue Development Tax
Operating Capital Finance Downtown Increment Brownfield
Grants and Grants and Authority - Development Finance Redevelopment
Functions/Programs Expenses Contributions Contributions SmartZone Authority Authority Authorities Total
Local Development Finance Authority - SmartZone
Community and economic development $ 172,648 $ - $ - $ (172,648) $ - $ - $ - $ (172,648)
Interest on long-term debt 34,321 - 350,000 315,679 - - - 315,679
Total Local Development Finance
Authority - SmartZone 206,969 - 350,000 143,031 - - - 143,031
Downtown Development Authority
Economic development 580,098 168,325 - - (411,773) - - (411,773)
Tax Increment Finance Authority
Community and economic development 50,000 - - - - (50,000) - (50,000)
46
Brownfield Redevelopment Authorities
Community and economic development 1,233,732 - - - - - (1,233,732) (1,233,732)
Interest on long-term debt 22,370 - - - - - (22,370) (22,370)
Total Brownfield Redevelopment Authorities 1,256,102 - - - - - (1,256,102) (1,256,102)
Total discretely presented component units $ 2,093,169 $ 168,325 $ 350,000 143,031 (411,773) (50,000) (1,256,102) (1,574,844)
General revenues
Property taxes 99,568 490,931 42,184 760,872 1,393,555
Grants and contributions not restricted to specific programs 3,349 - 9,744 16,266 29,359
Unrestricted investment income 205 579 69 907 1,760
Miscellaneous - - - 304 304
Total general revenues 103,122 491,510 51,997 778,349 1,424,978
Change in net position 246,153 79,737 1,997 (477,753) (149,866)
Net position at beginning of year (402,704) 6,347 15,888 (682,294) (1,062,763)
Net position at end of year $ (156,551) $ 86,084 $ 17,885 $ (1,160,047) $ (1,212,629)
The accompanying notes are an integral part of this statement.
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
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 six separate designated areas under the aegis of the
BRA – the Betten-Henry Street site, the former downtown mall site, the Terrace Point site, the Pigeon Hill
site, the Hartshorn Marina site, and the scattered housing 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.
47
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
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, 2021, 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, 2019, the date
of its latest audited financial statements is as follows:
Total assets and deferred outflows of resources $ 3,637,610
Total liabilities and deferred inflows of resources (452,090)
Total net position $ 3,185,520
Total operating income $ 2,016,544
Total operating expenses (2,332,975)
Total nonoperating revenues 383
Capital contributions 127,240
Prior period adjustment 91,707
Change in net position $ (97,101)
48
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
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.
The Convention Center Construction Fund accounts for proceeds from debt issuance for the construction
of a convention center in downtown Muskegon.
49
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
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 Other Post-Employment Benefit Trust Funds are used to report resources that are administered
through irrevocable trusts for the benefit of City employees and retirees.
The Custodial Funds are used to report fiduciary activities that are not required to be reported in pension
(and other employee benefit) trust funds, investment trust funds, or private-purpose trust funds.
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.
50
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
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 and fiduciary funds are reported using the economic resources measurement focus and the
accrual basis of accounting.
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.
51
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
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 Other Post-Employment Benefit Trust Fund is held in trust by the Municipal Employees’ Retirement
System (MERS) and is subject to the investment policies of MERS and State of Michigan statutes allowing
diverse investments in stocks, corporate and government bonds, mortgages, real estate, and other investments.
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 acquisition value.
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:
52
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
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 single-employer, 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.
53
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
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 of the General Fund 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.
54
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
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 2020 state taxable value for real/personal property of the City totaled approximately $599,786,000 of
which approximately $33,468,000 was captured by the component units. The ad valorem taxes levied
consisted of 9.993, 2.9979 and .0824 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, and BRA 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. In addition, certain items in the 2020 financial statements have been reclassified to conform
to the 2021 presentation.
55
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
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, 2021, actual expenditures exceeded appropriations for:
Final
Budget Actual
General Fund
Public representation services
City attorney $ 380,000 $ 431,961
Public safety
Police department 9,707,553 9,862,730
Transfers out 1,205,000 1,475,000
Mercy Health Arena Fund
Culture and recreation 1,465,881 1,715,865
Downtown BID Fund
Public works 113,681 159,762
These overexpenditures were funded with available fund balance.
Fund Deficits
As of June 30, 2021, the City’s Sewer Fund, Water Fund, Marina and Launch Ramp, and Public Service
Building Fund had unrestricted fund net position deficits of $1,222,053, $210,948, $153,491, and $383,186,
respectively. The Public Improvement Fund and the Convention Center Construction Fund had unassigned
fund deficits of $1,026,966 and $1,892,438, respectively. These deficits will be eliminated through future
operations or an interfund transfer.
56
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE C—DEPOSITS AND INVESTMENTS
As of June 30, 2021, the City had the following investments:
Weighted
Average
Maturity
Fair Value (Months) S&P Percent
Investment Type
Money market funds $ 517,687 1 AAA 1.1 %
Negotiable certificates of deposit 1,774,038 30 not rated 3.7
US agency obligations 8,264,742 297 AA+ 17.2
Local units of government obligations 510,105 10 AA 1.1
External investment pool 11,758,887 3 AAA 24.5
MERS investment funds 25,146,235 N/A not rated 52.4
Total fair value $ 47,971,694 100.0 %
Portfolio weighted average maturity 112
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 5.2%
Government National Mortgage Association obligations 11.8%
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, 2021, $11,842,021 of the City’s bank balance of $12,342,021 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.
57
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE C—DEPOSITS AND INVESTMENTS—Continued
Deposit and Investment Risks—Continued
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, 2021, restricted
cash and investments in the Sewer and Water Fund of $101,000 and $717,000, respectively, 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 six 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.
City of Muskegon Parks Fund
The City of Muskegon Parks Fund (Muskegon Parks Fund) was established by the City to primarily be used
for general maintenance and improvements to parks 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.
58
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE D—ASSETS MANAGED BY OTHERS—Continued
The Funds—Continued
City of Muskegon Events and Sponsorships Fund
The City of Muskegon Events and Sponsorships Fund (Events and Sponsorships Fund) was established after
the Community Foundation received monies from donors intended to be used for various events within 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.
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,
2021 follows:
Lakeshore
Trails Cemetery Marquette Staley Muskegon Events and
Improvement Perpetual and Elliot Charity Parks Sponsorships
Fund Care Fund Park Fund Fund Fund Fund Totals
Revenues
Contributions $ 1,652 $ - $ - $ - $ - $ 10,000 $ 11,652
Dividends and interest 1,467 17,807 2,315 9,632 537 3 31,761
Realized and unrealized gain
(loss) on investments 16,561 201,378 25,602 109,044 6,074 - 358,659
Other income - 12,843 - - - - 12,843
19,680 232,028 27,917 118,676 6,611 10,003 414,915
Expenses
Grants and scholarships - - 25,534 - - - 25,534
Administration fees 601 10,149 1,916 5,068 214 100 18,048
Revenues over expenses 19,079 221,879 467 113,608 6,397 9,903 371,333
Total assets at beginning of year 59,464 1,234,737 114,871 398,942 22,200 4,785 1,834,999
Total assets at end of year 78,543 1,456,616 115,338 512,550 28,597 14,688 2,206,332
Less assets recorded as those
of the Foundation (54,845) - (115,338) (512,550) (18,111) (14,688) (715,532)
Assets reported on the Balance
Sheet/Statement of Net Position $ 23,698 $ 1,456,616 $ - $ - $ 10,486 $ - $ 1,490,800
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.
59
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
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, 2021.
Money market funds: Valued at amortized cost, which approximates fair value.
Negotiable certificates of deposit, US agency obligations, and local units of government obligations:
Valued at the closing price reported on the active market on which the individual securities are traded.
60
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE E—FAIR VALUE MEASUREMENTS—Continued
External investment pools, MERS investment funds, and assets managed by others: The assets are
valued based upon the City’s allocable share of the Michigan CLASS, MERS, 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, 2021:
Assets at Fair Value as of June 30, 2021
Level 1 Level 2 Level 3 Total
Money market funds $ - $ 517,687 $ - $ 517,687
Negotiable certificates of deposit 1,774,038 - - 1,774,038
US agency obligations 8,264,742 - - 8,264,742
Local units of government
obligations 510,105 - - 510,105
External investment pools - 11,758,887 - 11,758,887
MERS investment funds - 25,146,235 - 25,146,235
Assets managed by others - 1,477,957 - 1,477,957
Total assets at fair value $ 10,548,885 $ 38,900,766 $ - $ 49,449,651
61
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE F—CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2021 was as follows:
Balance Balance
July 1, 2020 Additions Deductions June 30, 2021
Governmental activities:
Capital assets, not being depreciated:
Land $ 14,258,844 $ - $ - $ 14,258,844
Construction in progress 18,729,886 17,265,687 6,900,049 29,095,524
Total capital assets, not being depreciated 32,988,730 17,265,687 6,900,049 43,354,368
Capital assets, being depreciated:
Land improvements 5,446,304 - - 5,446,304
Leasehold improvements 534,821 - - 534,821
Buildings and improvements 29,914,552 2,192,125 - 32,106,677
Furniture, vehicles and equipment 16,373,852 868,200 450,369 16,791,683
Infrastructure 74,757,641 6,512,074 - 81,269,715
Shared improvements 6,905,293 - - 6,905,293
Total capital assets, being depreciated 133,932,463 9,572,399 450,369 143,054,493
Less accumulated depreciation:
Land improvements 2,252,853 160,917 - 2,413,770
Leasehold improvements 491,710 5,674 - 497,384
Buildings and improvements 18,245,653 552,034 - 18,797,687
Furniture, vehicles and equipment 12,706,346 750,583 443,256 13,013,673
Infrastructure 40,031,075 3,465,500 - 43,496,575
Shared improvements 5,147,315 345,265 - 5,492,580
Total accumulated depreciation 78,874,952 5,279,973 443,256 83,711,669
Total capital assets, being
depreciated, net 55,057,511 4,292,426 7,113 59,342,824
Capital assets, net $ 88,046,241 $ 21,558,113 $ 6,907,162 $ 102,697,192
Business-type activities:
Capital assets, not being depreciated:
Land $ 142,250 $ - $ - $ 142,250
Construction in progress 8,942,883 14,891,135 11,921,486 11,912,532
Total capital assets, not being depreciated 9,085,133 14,891,135 11,921,486 12,054,782
Capital assets, being depreciated:
Land improvements 1,951,913 - - 1,951,913
Buildings, improvements and systems 95,715,965 11,553,510 - 107,269,475
Machinery and equipment 3,263,412 56,620 - 3,320,032
Total capital assets, being depreciated 100,931,290 11,610,130 - 112,541,420
Less accumulated depreciation:
Land improvements 1,840,598 9,522 - 1,850,120
Buildings, improvements and systems 54,183,758 2,343,340 - 56,527,098
Machinery and equipment 2,840,720 64,350 - 2,905,070
Total accumulated depreciation 58,865,076 2,417,212 - 61,282,288
Total capital assets, being
depreciated, net 42,066,214 9,192,918 - 51,259,132
Capital assets, net $ 51,151,347 $ 24,084,053 $ 11,921,486 $ 63,313,914
62
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE F—CAPITAL ASSETS—Continued
Depreciation
Depreciation expense was charged to functions as follows:
Governmental activities:
Public representation services $ 4,007
Adminstrative services 2,484
Public safety 133,741
Public works 8,280
Highways, streets and bridges 3,940,374
Community and economic development 70,993
Culture and recreation 553,583
General administration 24,071
Internal Service Fund depreciation 542,440
$ 5,279,973
Business-type activities:
Sewer $ 450,685
Water 1,860,487
Marina and Launch Ramp 106,040
$ 2,417,212
Balance Balance
July 1, 2020 Additions Deductions June 30, 2021
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 2,863,081 172,648 - 3,035,729
Total capital assets, being
depreciated, net 935,177 (172,648) - 762,529
Capital assets, net $ 1,335,177 $ (172,648) $ - $ 1,162,529
Depreciation expense was charged to economic development.
63
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE G—INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
The composition of interfund balances as of June 30, 2021 is as follows:
Due To/From Other Funds:
Receivable Fund Payable Fund Amount
General Fund Mercy Health Arena Fund $ 204,874
General Fund Public Improvement Fund 299,481
General Fund Lead Abatement Fund 33,938
General Fund Community Development Block Grant Fund 89,343
General Fund Sewer Fund 29,970
General Fund Marina and Launch Ramp Fund 8,390
General Fund General Insurance Fund 384,381
$ 1,050,377
The outstanding balances between funds result from the payable funds having negative positions in the City’s
cash and investment pool. In addition, the Brownfield Redevelopment Authorities owe the General Fund
$652,132 for having a negative position in the City’s cash and investment pool.
Interfund Transfers:
Transfers In Amount Transfers Out Amount
Nonmajor Governmental Funds
Public Improvement Fund $ 50,000 General Fund $ 850,000
Mercy Health Arena Fund 725,000
Farmers Market and
Kitchen 242 Fund 75,000
850,000 850,000
Internal Service Funds
Public Service Building Fund 625,000 General Fund 625,000
Nonmajor Governmental Funds
Mercy Health Arena Fund 40,000 Convention Center Fund 40,000
Nonmajor Governmental Funds
Farmers Market and Nonmajor Governmental Funds
Kitchen 242 Fund 5,000 Senior Millage Fund 5,000
Nonmajor Governmental Funds
Water Fund 35,000 Senior Millage Fund 35,000
$ 1,555,000 $ 1,555,000
64
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE G—INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS—Continued
The General Fund transferred funds to the Mercy Health Arena Fund, Public Service Building Fund, and
other funds for operation subsidies. The Senior Millage Fund transferred funds to the Farmers Market and
Kitchen 242 Fund and the Water Fund to provide services to seniors. The Convention Center Fund
transferred funds to the Mercy Health Arena Fund as reimbursement for upgrades caused by convention
center construction. Other transfers between funds were made to meet grant matching requirements or other
operational needs.
NOTE H—SHORT-TERM DEBT
Summary of Changes in Short-Term Liabilities
The following is a summary of short-term liabilities activity for the City for the year ended June 30, 2021.
Balance Balance
July 1, 2020 Additions Deductions June 30, 2021
Governmental activities:
Short-term draw note $ 1,102,021 $ 2,494,268 $ 2,488,282 $ 1,108,007
The purpose of all short-term borrowings are to provide resources for infill housing within the City of
Muskegon. The form of financing used is a short-term non-revolving draw note with amounts advanced at
the City’s discretion. Interest amounts are at a variable interest rate of 1.25 percent above the 30 day LIBOR,
adjusted monthly. Borrowed amounts will be repaid as infill housing units are sold with final payment being
due three years from the closing date.
65
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE I—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, 2021.
Balance Balance Due Within
July 1, 2020 Additions Deductions June 30, 2021 One Year
Governmental activities:
Public placement debt
General obligation debt $ 23,980,000 $ 6,380,000 $ 690,000 $ 29,670,000 $ 1,145,000
Discount (143,150) - (7,500) (135,650) -
Premium 222,903 772,424 33,000 962,327 -
Direct borrowings and
direct placements
Installment purchase
agreements 2,123,804 - 2,123,804 - -
Compensated absences 1,949,435 1,601,300 1,264,347 2,286,388 381,100
Governmental activities
long-term liabilities $ 28,132,992 $ 8,753,724 $ 4,103,651 $ 32,783,065 $ 1,526,100
Business-type activities:
Public placement debt
Revenue obligations $ 6,607,956 $ 13,556,747 $ 11,108,250 $ 9,056,453 $ 1,266,750
Compensated absences 255,712 254,094 239,355 270,451 45,000
Business-type activities
long-term liabilities $ 6,863,668 $ 13,810,841 $ 11,347,605 $ 9,326,904 $ 1,311,750
Component units:
Public placement debt
General obligation debt $ 1,720,000 $ - $ 395,000 $ 1,325,000 $ 245,000
Premium 40,377 - 13,129 27,248 -
Component unit long-
term liabilities $ 1,760,377 $ - $ 408,129 $ 1,352,248 $ 245,000
66
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE I—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.
During the year ended June 30, 2021, the City issued $2,055,000 of Capital Improvement Bonds, Series
2020B to redeem the 2019 Capital Improvement Installment Loan. The proceeds from the refunding bond
were used to pay off the outstanding balance of the 2019 Capital Improvement Installment Loan in full, and
the liability for that loan has been removed from long-term obligations.
The City refunded the 2019 Capital Improvement Installment Loan to improve short-term cash flows and
simplify the structure of their debt service. As a result of the refunding transaction, the City’s total debt
service payment will increase over the next 20 years by approximately $220,000 and it will recognize an
economic loss (difference between the present values of the debt service payments on the old and new debt)
of approximately $26,000.
General obligation debt outstanding as of June 30, 2021 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 $ 230,000
2016 Limited Tax General Obligation
Refunding Bonds 4,535,000 3% - 4% October 2032 3,815,000
2019 Capital Improvement Bonds 19,420,000 1.83% - 3.58% December 2049 19,245,000
2020A Capital Improvement Bonds 4,325,000 2.5% - 5% October 2040 4,325,000
2020B Capital Improvement Bonds 2,055,000 .68% - 3.2% October 2041 2,055,000
$ 29,670,000
Component units:
2012 LDFA Tax Increment Refunding Bonds $ 4,100,000 3% - 4% November 2025 $ 1,325,000
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, 2021 are as follows:
Original Date of
Borrowing Interest Rate Maturity Balance
Revenue obligations:
Business-type activities:
2004 Drinking Water State Revolving Fund $ 13,900,000 2.13% October 2025 $ 4,040,000
2019 Water Supply System Junior Lien Bond 1,991,874 2% October 2025 1,591,874
2019 Sanitary Sewer System Junior Lien Bond 10,809,459 2% October 2033 2,184,459
2020 Water Supply System Junior Lien Bond 1,165,296 2% April 2041 785,046
2020 Sanitary Sewer System Junior Lien Bond 1,398,074 2% April 2041 455,074
$ 9,056,453
67
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE I—LONG-TERM DEBT—Continued
Revenue Obligations—Continued
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
$4,258,133. Principal and interest paid for the year ended June 30, 2021 and total customer net revenues were
$853,925 and $2,280,312, respectively.
During the year ended June 30, 2021, revenue obligations were forgiven and recognized as capital grants and
contributions in the Sewer and Water Funds for $9,568,000 and $780,250, respectively.
The City was in compliance in all material respects with all the revenue bond ordinances at June 30, 2021.
For governmental activities, pension liabilities (i.e. net pension and OPEB liabilities), 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, 2021 was approximately $2,158,000. 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, 2021 follow:
Governmental Activites Business-type Activities
Year Ending Public Placement Debt
June 30, Principal Interest Principal Interest
2022 $ 1,145,000 $ 987,637 $ 1,266,750 $ 190,718
2023 970,000 957,231 1,295,000 164,255
2024 1,050,000 926,991 1,318,074 137,105
2025 1,100,000 892,982 1,190,000 109,572
2026 1,140,000 856,998 1,175,296 84,531
2027-2031 6,355,000 3,627,560 1,060,000 302,500
2032-2036 4,030,000 2,691,759 1,160,000 191,950
2037-2041 4,385,000 2,060,507 591,333 42,900
2042-2046 4,720,000 1,287,468 - -
2047-2050 4,775,000 352,719 - -
$ 29,670,000 $ 14,641,852 $ 9,056,453 $ 1,223,531
68
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE I—LONG-TERM DEBT—Continued
Component Units
Year Ending Public Placement Debt
June 30, Principal Interest
2022 $ 245,000 $ 37,300
2023 255,000 28,575
2024 265,000 20,775
2025 275,000 12,675
2026 285,000 4,275
2027-2031 - -
2032-2036 - -
2037-2041 - -
2042-2046 - -
2047-2050 - -
$ 1,325,000 $ 103,600
Annual debt service requirements to maturity by type of debt as of June 30, 2021 follow:
Revenue
General Obligation Debt Obligations
Year Ending Governmental Component Business-type
June 30, Activities Units Activities
2022 $ 2,132,637 $ 282,300 $ 1,457,468
2023 1,927,231 283,575 1,459,255
2024 1,976,991 285,775 1,455,179
2025 1,992,982 287,675 1,299,572
2026 1,996,998 289,275 1,259,827
2027-2031 9,982,560 - 1,362,500
2032-2036 6,721,759 - 1,351,950
2037-2041 6,445,507 - 634,233
2042-2046 6,007,468 - -
2047-2050 5,127,719 - -
$ 44,311,852 $ 1,428,600 $ 10,279,984
69
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE J—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 2021 and 2020 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, 2021 $ 133,364 $ 138,186 $ 167,904 $ 103,646
June 30, 2020 224,580 94,465 185,681 133,364
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, 2021, the claims liability including incurred but
not reported claims was $63,118. 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 2021 and 2020
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, 2021 $ 111,410 $ 1,676,498 $ 1,724,790 $ 63,118
June 30, 2020 51,401 2,267,390 2,207,381 111,410
70
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE J—OTHER INFORMATION—Continued
Contingencies
Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies,
principally the federal and state governments. 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.
Commitments
The City has several contracts for street projects including water and sewer system improvements as of June
30, 2021 with a remaining amount of approximately $15,009,000. Approximately $3,630,000 and $3,068,000
of the commitments in the Sewer and Water funds, respectively, are being financed by long-term debt with
the remainder being paid out of available funds as follows:
Fund Amount
Major Street and Trunkline $ 4,248,000
Local Street 350,000
Public Improvement 100,000
Sewer 3,630,000
Water 6,681,000
$ 15,009,000
The City has also committed to allocating 35 percent of local marihuana excise taxes received to their
Michigan Social Equity Program. As of June 30, 2021, the City has committed approximately $39,000 of
fund balance in the General Fund to this program.
Leases
The City leases an office facility under a noncancellable operating lease that expires December 2045 with the
option by the tenant to renew the term of the lease for five successive periods of five years each. The City
received rental income (including pro-rata utility usage) of $101,084 for the year ended June 30, 2021. The
future minimum rental income for this lease is as follows:
Year Ending
June 30, Amount
2022 $ 481,075
2023 463,060
2024 464,617
2025 463,429
2026 464,782
2027-2031 2,295,708
2032-2036 352,832
2037-2041 402,902
2042-2045 350,419
$ 5,738,824
71
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE K—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, 2021, the City abated property taxes revenues totaling $109,028 under this
program.
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, 2021, the City abated property taxes revenues totaling $167,665 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, 2021, the City abated property taxes revenues totaling $146,690 under this
program.
NOTE L—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.
72
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE L—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, 2020 valuation date, the following employees were covered by the benefit terms:
Inactive employees or beneficiaries currently receiving benefits 332
Inactive employees entitled to but not yet receiving benefits 37
Active employees 71
Total employees covered by MERS 440
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, 2021, the City had a flat-dollar employer contribution to the Plan of $2,902,032
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, 2020, and the total pension liability used to
calculate the net pension liability was determined by an annual actuarial valuation as of that date.
73
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE L—EMPLOYEE RETIREMENT SYSTEM AND PENSION PLAN—Continued
Defined Benefit Pension Plan—Continued
Actuarial Assumptions
The total pension liability in the December 31, 2020 actuarial valuation was determined using the following
actuarial assumptions, applied to all periods included in the measurement:
Inflation 2.5 percent
Salary increases 3.0 percent in the long-term
Investment rate of return 7.35 percent, net of administrative and investment expenses
Although no specific price inflation assumptions are needed for the valuation, the 3.0 percent long-term wage
inflation assumption would be consistent with a price inflation of 3-4 percent. Mortality rates used were
based on a version of Pub-2010 and fully generational MP-2019.
The actuarial assumptions used in valuation were based on the results of the most recent actuarial experience
study of 2014 through 2018.
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 60.0% 7.45% 4.47% 2.50% 2.97%
Global fixed income 20.0% 4.90% 0.98% 2.50% 0.48%
Private assets 20.0% 9.50% 1.90% 2.50% 1.40%
Total 100.0% 7.35% 4.85%
Discount Rate
The discount rate used to measure the total pension liability was 7.60 percent for 2020. 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. The projection of cash flows used to determine the discount rate assumed
that employer and employee contributions will be made at rates agreed upon for employees and the actuarially
determined rate for employers. 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.
74
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE L—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, 2020 $ 119,926,123 $ 88,994,708 $ 30,931,415
Changes for the year
Service cost 615,293 - 615,293
Interest 8,787,617 - 8,787,617
Difference between expected and
actual experience 2,829,299 - 2,829,299
Changes in assumptions 2,974,495 - 2,974,495
Contributions - employer - 2,468,311 (2,468,311)
Contributions - employee - 374,806 (374,806)
Net investment income - 10,575,596 (10,575,596)
Administrative expenses - (173,766) 173,766
Benefit payments including refund of
employee contributions (9,214,462) (9,214,462) -
Net changes 5,992,242 4,030,485 1,961,757
Balance at December 31, 2020 $ 125,918,365 $ 93,025,193 $32,893,172
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 7.6 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 (6.6 percent) or 1-percentage-point higher (8.6 percent) than the current rate:
1% Decrease Current Discount 1% Increase
(6.6%) Rate (7.6%) (8.6%)
City's net pension liability $ 46,316,744 $ 32,893,172 $ 21,580,702
75
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE L—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, 2021, the City recognized pension expense of $7,438,731. At June 30, 2021, 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
Net differences between projected
and actual net investment income $ - $ 2,721,144
Contributions subsequent to the
measurement date* 1,451,016 -
Total $ 1,451,016 $ 2,721,144
*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,
2022.
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
2022 $ (524,288)
2023 360,334
2024 (1,742,199)
2025 (814,991)
Payables to the Pension Plan
At June 30, 2021, the City reported a payable of $109,822 for the outstanding amount of contributions to the
pension plan required for the year ended June 30, 2021.
76
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE L—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 13 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, 2021, City and employee
contributions were $1,041,141 and $454,302, 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, 2021, forfeitures reduced the City’s pension expense by $60,905.
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 M—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 single-employer
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.
77
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE M—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, 2019 valuation, the following employees were covered by the benefit terms:
Active members 109
Inactive members 40
Retirees and beneficiaries 302
Total employees covered by OPEB Plan 451
Contributions
The OPEB Plan’s funding policy is that the City will contribute any required amounts as determined by an
annual actuarial valuation as a reference but not as a definitive requirement. 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, 2021, the City made payments for postemployment healthcare benefits of $1,206,464.
Net OPEB Liability
The City’s net OPEB liability was measured as of December 31, 2019, and the total OPEB liability used to
calculate the net OPEB liability was determined by an actuarial valuation as December 31, 2019, which was
rolled forward to December 31, 2020.
78
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE M—OTHER POSTEMPLOYMENT BENEFITS—Continued
Retiree Healthcare Plan—Continued
Actuarial Assumptions
The total OPEB liability in the December 31, 2019 actuarial valuation rolled forward to December 31 2020
was determined using the following actuarial assumptions, applied to all periods included in the
measurement:
Inflation 2.5 percent
Salary increases 3.0 percent
Investment rate of return 6.24 percent (including inflation), net of administrative
and investment expenses
Healthcare cost trend rates Pre-Medicare: 8.25 percent graded down to 7.5 percent after one year and
then by .25 percent per year to an ultimate rate of 4.5 percent
Post-Medicare: 6.5 percent graded down to 5.75 percent after one year and
then by .25 percent per year to an ultimate rate of 4.5 percent
Mortality
Mortality rates for police and fire were as set forth in the Public Safety 2010 Employee and Healthy Retiree,
headcount weighted, MP-2020 improvement scale. Mortality rates for others were as set forth in the Public
General 2010 Employee and Healthy Retiree, headcount weighted, MP-2020 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
investment 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 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
Total market portfolio 55.0% 7.35% 4.04% 2.50% 2.67%
Est market port (60/40) 25.0% 6.70% 1.68% 2.50% 1.05%
Divers bond port (0/100) 16.0% 3.00% 0.48% 2.50% 0.08%
Short-term income 4.0% 1.00% 0.04% 2.50% -0.06%
Total 100.0% 6.24% 3.74%
Discount Rate
The discount rate used to measure the total OPEB liability was 6.24 percent. The projection of cash flows
used to determine the discount rate assumed that the City will make future contributions at levels consistent
with the contributions made in 2019 and 2020. Based on this assumption, the OPEB plan’s fiduciary net
position was 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 be covered by the projected
assets (the “depletion 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. As of December 31,
2019 the discount rate used to value OPEB liabilities was 6.24 percent.
79
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE M—OTHER POSTEMPLOYMENT BENEFITS—Continued
Retiree Healthcare Plan—Continued
Changes in the Net OPEB Liability
Increase (Decrease)
Net OPEB
Total OPEB Plan Fiduciary Liability
Liability (a) Position (b) (a)-(b)
Balance at January 1, 2020 $ 33,642,202 $ 21,215,561 $ 12,426,641
Changes for the year
Service cost 156,214 - 156,214
Interest 2,058,432 - 2,058,432
Difference between expected and
actual experience (325,146) - (325,146)
Changes of assumptions (1,152,266) - (1,152,266)
Contributions - employer - 1,154,926 (1,154,926)
Net investment income - 2,210,729 (2,210,729)
Administrative expenses - (42,375) 42,375
Benefit payments including refund of
employee contributions (1,621,453) (1,621,453) -
Net changes (884,219) 1,701,827 (2,586,046)
Balance at December 31, 2020 $ 32,757,983 $ 22,917,388 $ 9,840,595
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 6.24 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 (5.24 percent) or 1-percentage-point higher (7.24 percent) than the current rate:
1% Decrease Current Discount 1% Increase
(5.24%) Rate (6.24%) (7.24%)
City's net OPEB liability $ 13,400,901 $ 9,840,595 $ 6,868,906
80
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE M—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-Medicare of 8.25 percent, decreasing to 4.5 percent and post-Medicare of 6.5 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 (7.25 percent decreasing to 3.5 percent or 5.5 percent decreasing
to 3.5 percent) or 1-percentage-point higher (9.25 percent decreasing to 5.5 percent or 7.5 percent decreasing
to 5.5 percent) than the current rate:
Current
Healthcare Cost
1% Decrease Trend Rate 1% Increase
City's net OPEB liability $ 6,583,520 $ 9,840,595 $ 13,728,259
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, 2021, the City recognized OPEB expense of $1,055,549. At June 30, 2021, 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
Net difference between projected
and actual net investment income $ - $ 645,301
Contributions subsequent to the
measurement date* 693,990 -
Total $ 693,990 $ 645,301
*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,
2022.
81
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE M—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
2022 $ (88,659)
2023 41,015
2024 (417,106)
2025 (180,551)
Payables to the OPEB Plan
At June 30, 2021, 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, 2021, City and employee contributions were $183,564 and $202,353,
respectively.
82
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE N—RISKS AND UNCERTAINTIES
The COVID-19 pandemic that the world is experiencing is unprecedented. It is nearly impossible to fully
understand the impact that it will have on the economy and the City’s operations. As of June 30, 2021, the
City is continuing to implement risk mitigation tactics including all aspects of the City’s operations.
NOTE O—CHANGE IN ACCOUNTING PRINCIPLE
The net position of the fiduciary activities and Other Post-Employment Benefit Trust were restated effective
July 1, 2020 to reflect the implementation of GASB Statement No. 84, Fiduciary Activities.
GASB Statement 84 was issued by the GASB in January 2017 and is effective for the City’s 2021 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
established 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 on the basic financial statements. Governments with activities meeting the criteria should
present a statement of fiduciary net position and a statement of changes in fiduciary net position.
Other Post-
Employment Benefit
Trust Fund
Net position at July 1, 2020 $ -
Other post-employment benefit trust funds 21,263,351
Net position at July 1, 2020, as restated $ 21,263,351
NOTE P—UPCOMING ACCOUNTING PRONOUNCEMENTS
GASB Statement 87—Leases was issued by the GASB in June 2017 and will be effective for the City’s 2022
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.
83
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
NOTE P—UPCOMING ACCOUNTING PRONOUNCEMENTS—Continued
GASB Statement 96—Subscription-Based Information Technology Arrangements was issued by the GASB in
May 2020 and will be effective for the City’s 2023 fiscal year. This Statement provides guidance on the
accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for
government end users (governments). This Statement (1) defines a SBITA; (2) establishes that a SBITA
results in a right-to-use subscription asset—an intangible asset—and a corresponding subscription liability;
(3) provides the capitalization criteria for outlays other than subscription payments, including implementation
costs of a SBITA; and (4) requires note disclosures regarding a SBITA. To the extent relevant, the standards
for SBITAs are based on the standards established in Statement No. 87, Leases, as amended.
84
REQUIRED SUPPLEMENTARY INFORMATION
85
City of Muskegon
BUDGETARY COMPARISON SCHEDULE
General Fund
For the year ended June 30, 2021
(with comparative actual amounts for the year ended June 30, 2020)
2021 2020
Budgeted Amounts Variance with
Original Final Actual Final Budget Actual
REVENUES
Taxes
City income taxes $ 7,750,000 $ 8,650,000 $ 9,256,826 $ 606,826 $ 9,137,714
Property taxes 7,566,060 7,550,017 7,624,483 74,466 7,373,617
Industrial facilities taxes 76,468 76,468 211,811 135,343 128,212
Payments in lieu of taxes 566,877 566,877 607,538 40,661 614,314
Total taxes 15,959,405 16,843,362 17,700,658 857,296 17,253,857
Licenses and permits
Business licenses 75,000 42,000 45,415 3,415 42,520
Liquor licenses 50,000 50,000 45,808 (4,192) 49,557
Marihuana facilities licenses 90,000 100,000 189,200 89,200 143,300
Cable TV fees 370,000 370,000 374,219 4,219 361,405
Rental property registration 397,500 360,500 397,236 36,736 354,830
Burial permits 80,000 80,000 74,435 (5,565) 76,615
Building permits 1,100,000 705,000 683,883 (21,117) 911,057
Electrical permits 196,000 196,000 194,056 (1,944) 172,531
Plumbing permits 95,000 95,000 99,165 4,165 103,139
Mechanical permits 143,500 143,500 136,858 (6,642) 144,730
Vacant building fees 40,000 3,500 6,100 2,600 60,570
Other inspections - - - - 350
Total licenses and permits 2,637,000 2,145,500 2,246,375 100,875 2,420,604
Intergovernmental revenues
Federal grants 40,000 1,646,586 1,667,916 21,330 147,191
State
Grants 776,000 941,004 1,018,505 77,501 913,590
State shared revenue 4,130,818 4,347,882 4,733,888 386,006 4,117,935
Total intergovernmental revenues - State 4,906,818 5,288,886 5,752,393 463,507 5,031,525
Local 50,000 50,000 50,000 - 40,000
86
City of Muskegon
BUDGETARY COMPARISON SCHEDULE—CONTINUED
General Fund
For the year ended June 30, 2021
(with comparative actual amounts for the year ended June 30, 2020)
2021 2020
Budgeted Amounts Variance with
Original Final Actual Final Budget Actual
Charges for services
Tax administration fees $ 327,000 $ 327,000 $ 369,323 $ 42,323 $ 350,742
Utility administration fees 310,000 310,000 310,000 - 310,000
Reimbursement for elections - - 75 75 50,142
Brownfield authority admin fee 175,000 200,000 175,000 (25,000) 180,000
Indirect cost reimbursements 1,302,797 1,302,797 1,278,590 (24,207) 1,066,967
Site plan review fee 6,500 6,000 8,900 2,900 7,600
Sale of cemetery lots 25,000 30,900 47,339 16,439 28,440
Police miscellaneous 143,500 130,000 130,990 990 116,108
Police impound fees 37,000 40,000 46,309 6,309 38,293
Landlord's alert fee 30,000 30,000 25,766 (4,234) 25,990
Fire protection - state property 173,718 119,574 119,574 - 173,718
Zoning fees 15,000 21,000 21,580 580 29,855
Muskegon Heights zoning 11,000 9,000 11,270 2,270 5,670
Clerk fees 5,000 750 1,387 637 1,329
Clerk fees - passport fees 40,000 2,000 5,555 3,555 63,520
Tax abatement application fees 6,000 1,000 4,085 3,085 8,890
Treasurer fees 67,000 24,000 57,618 33,618 67,177
False alarm fees 7,000 7,000 5,880 (1,120) 6,780
Miscellaneous cemetery income 16,000 25,000 34,956 9,956 16,383
Senior transit program fees - 4,231 7,281 3,050 -
Fire miscellaneous 9,500 12,500 16,334 3,834 1,681
Sanitation stickers 396,100 405,100 435,659 30,559 336,827
Lot cleanup fees 39,500 42,000 34,615 (7,385) 31,566
Reimbursements - lot mowing and demolitions 5,000 5,000 - (5,000) 124
Special events reimbursements 15,000 - (34,762) (34,762) 61,625
Recreation program fees 4,500 13,550 14,890 1,340 8,634
Parking 200,000 500,000 543,794 43,794 146,821
Other charges for services - - - - 400
Total charges for services 3,367,115 3,568,402 3,672,008 103,606 3,135,282
Fines and forfeitures
Income tax - penalty and interest 200,000 280,000 286,818 6,818 201,614
Late fees on current taxes 20,000 20,000 15,574 (4,426) 18,123
Interest on late invoices 11,000 17,000 16,179 (821) 11,006
Parking fines 55,000 140,000 149,864 9,864 76,543
Court fines 120,000 90,000 97,979 7,979 83,061
Civil infractions 16,000 15,000 18,057 3,057 21,978
Total fines and forfeitures 422,000 562,000 584,471 22,471 412,325
Investment earnings and rental income
Interest income 100,000 100,000 98,623 (1,377) 153,093
Net increase (decrease) in the fair value of investments - (100,000) (163,278) (63,278) 193,005
City right of way rental 6,800 6,800 2,000 (4,800) 6,800
Fire station lease - Central Dispatch 54,000 96,319 101,084 4,765 56,772
Parking rentals 68,750 68,750 61,935 (6,815) 48,500
Great Lakes Naval Memorial lease 15,000 - - - -
McGraft Park rentals 97,000 55,000 48,016 (6,984) 44,637
Other park rentals 55,000 31,000 50,028 19,028 34,858
Total investment earnings and rental income 396,550 257,869 198,408 (59,461) 537,665
87
City of Muskegon
BUDGETARY COMPARISON SCHEDULE—CONTINUED
General Fund
For the year ended June 30, 2021
(with comparative actual amounts for the year ended June 30, 2020)
2021 2020
Budgeted Amounts Variance with
Original Final Actual Final Budget Actual
Other
Police sale and auction proceeds $ 1,000 $ 1,000 $ 385 $ (615) $ 28,818
CDBG program reimbursements 548,967 461,984 495,554 33,570 482,833
Fisherman's Landing reimbursement 17,500 17,500 23,706 6,206 24,842
Contributions 20,000 503,380 558,945 55,565 22,227
Contributions - Veteran's Park maintenance 18,500 18,500 12,904 (5,596) 16,811
Community Foundation for Muskegon County 10,000 35,534 10,144 (25,390) 9,982
Miscellaneous and sundry 83,000 84,500 82,616 (1,884) 89,486
Total other 698,967 1,122,398 1,184,254 61,856 674,999
Total revenues 28,477,855 31,485,003 33,056,483 1,571,480 29,653,448
EXPENDITURES
Current
Public representation services
City commission 85,642 94,600 96,287 (1,687) 93,898
City promotions and public relations 58,000 58,000 56,041 1,959 92,409
City manager 442,010 427,800 430,424 (2,624) 432,401
Contributions to outside agencies 425,363 568,000 541,614 26,386 386,779
City attorney 380,000 380,000 431,961 (51,961) 373,919
Total public representation services 1,391,015 1,528,400 1,556,327 (27,927) 1,379,406
Administrative services
City clerk 622,802 585,500 569,368 16,132 621,603
Civil service 224,437 234,100 214,035 20,065 222,645
Affirmative action - - - - 22
Total administrative services 847,239 819,600 783,403 36,197 844,270
Financial services
Finance administration 640,541 647,000 643,392 3,608 587,625
Assessing 349,000 349,000 348,753 247 258,238
Arena administration - - 10,797 (10,797) 24,049
Income tax administration 400,220 413,837 400,206 13,631 363,889
Information systems 530,926 527,963 524,565 3,398 535,954
City treasurer 625,823 637,377 615,675 21,702 589,093
Pension administration - 2,267,000 2,266,951 49 -
Total financial services 2,546,510 4,842,177 4,810,339 31,838 2,358,848
Public safety
Police department 10,766,690 9,707,553 9,862,730 (155,177) 10,445,491
Fire department 3,360,760 3,198,615 2,908,093 290,522 4,353,377
Fire safety inspections 2,349,360 1,983,915 1,870,745 113,170 1,996,679
Total public safety 16,476,810 14,890,083 14,641,568 248,515 16,795,547
88
City of Muskegon
BUDGETARY COMPARISON SCHEDULE—CONTINUED
General Fund
For the year ended June 30, 2021
(with comparative actual amounts for the year ended June 30, 2020)
2021 2020
Budgeted Amounts Variance with
Original Final Actual Final Budget Actual
Public works
Street lighting $ 350,000 $ 350,000 $ 382,729 $ (32,729) $ 390,116
Community event support 91,539 97,642 100,206 (2,564) 81,049
General sanitation 2,267,799 2,267,262 2,285,497 (18,235) 2,216,029
Storm water management 14,000 14,000 4,000 10,000 13,340
City hall maintenance 295,402 315,750 310,492 5,258 309,388
Cemeteries maintenance 498,897 473,433 360,056 113,377 429,404
Total public works 3,517,637 3,518,087 3,442,980 75,107 3,439,326
Community and economic development
Planning, zoning and economic development 441,257 480,000 488,691 (8,691) 405,688
Environmental services - - 177 (177) 7,413
Edison Landing subsidy 350,000 350,000 350,000 - 360,000
Total community and economic development 791,257 830,000 838,868 (8,868) 773,101
Culture and recreation
Parks maintenance 1,832,600 1,800,004 1,665,740 134,264 1,873,339
McGraft Park maintenance 122,975 130,100 131,222 (1,122) 18,142
General and inner city recreation programs - - 305 (305) 1,928
Forestry - 61,000 56,567 4,433 656
Parking operations - 86,200 89,542 (3,342) 30,524
Farmers market and flea market - - 99 (99) 204
Social district - - 5,639 (5,639) -
Total culture and recreation 1,955,575 2,077,304 1,949,114 128,190 1,924,793
Other governmental functions
Insurance premiums 360,000 363,180 351,344 11,836 340,189
Other 100,000 100,000 28,888 71,112 31,272
Total other governmental functions 460,000 463,180 380,232 82,948 371,461
Debt service
Principal 194,100 2,294,000 2,285,300 8,700 290,000
Interest and fees 251,000 251,000 250,991 9 160,811
Bond issuance costs - 141,000 140,750 250 -
Total debt service 445,100 2,686,000 2,677,041 8,959 450,811
Capital outlay 50,000 4,686,446 4,358,050 328,396 786,725
Total expenditures 28,481,143 36,341,277 35,437,922 903,355 29,124,288
Excess of revenues over (under) expenditures (3,288) (4,856,274) (2,381,439) 2,474,835 529,160
89
City of Muskegon
BUDGETARY COMPARISON SCHEDULE—CONTINUED
General Fund
For the year ended June 30, 2021
(with comparative actual amounts for the year ended June 30, 2020)
2021 2020
Budgeted Amounts Variance with
Original Final Actual Final Budget Actual
OTHER FINANCING SOURCES (USES)
Long-term debt issued $ - $ 3,243,399 $ 4,325,000 $ 1,081,601 $ -
Refunding bonds issued - 2,055,000 2,055,000 - -
Premium on bonds issued - 770,000 772,424 2,424 -
Transfers in - 225,000 - (225,000) -
Transfers out (390,000) (1,205,000) (1,475,000) (270,000) (1,132,500)
Total other financing sources (uses) (390,000) 5,088,399 5,677,424 589,025 (1,132,500)
Net change in fund balance $ (393,288) $ 232,125 3,295,985 $ 3,063,860 (603,340)
Fund balance at beginning of year 7,901,855 8,505,195
Fund balance at end of year $ 11,197,840 $ 7,901,855
Note: Both budgets and actual figures are prepared in accordance with generally accepted accounting principles.
90
City of Muskegon
BUDGETARY COMPARISON SCHEDULE
Major Street and Trunkline Fund
For the year ended June 30, 2021
Budgeted Amounts Variance with
Original Final Actual Final Budget
REVENUES
Intergovernmental revenues
Federal $ 385,824 $ - $ - $ -
State 5,191,586 4,476,000 4,573,237 97,237
Charges for services - - 11,521 11,521
Investment earnings 10,000 10,000 10,039 39
Other - - 27,003 27,003
Total revenues 5,587,410 4,486,000 4,621,800 135,800
EXPENDITURES
Current
Highways, streets and bridges 4,737,046 4,531,273 4,234,631 296,642
Debt service
Principal 220,000 220,000 220,000 -
Interest and fees 11,000 11,000 10,300 700
Total expenditures 4,968,046 4,762,273 4,464,931 297,342
Excess of revenues over (under) expenditures 619,364 (276,273) 156,869 433,142
OTHER FINANCING SOURCES
Transfers in - 715,222 - (715,222)
Net change in fund balance $ 619,364 $ 438,949 156,869 $ (282,080)
Fund balance at beginning of year 2,251,184
Fund balance at end of year $ 2,408,053
Note: Both budgets and actual figures are prepared in accordance with generally accepted accounting principles.
91
City of Muskegon
Required Supplemental Information
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS
Last Ten Fiscal Years (Amounts were determined as of December 31 of each fiscal year)
2020 2019 2018 2017 2016 2015 2014
TOTAL PENSION LIABILITY
Service cost $ 615,293 $ 732,228 $ 806,565 $ 1,018,541 $ 1,130,408 $ 1,194,909 $ 1,190,507
Interest 8,787,617 8,718,797 8,345,836 8,429,233 8,345,661 8,034,035 7,817,503
Differences between expected and actual experience 2,829,299 1,830,804 3,642,392 1,326,122 (1,697,797) (647,017) -
Changes in assumptions 2,974,495 4,134,788 - - - 4,779,382 -
Benefit payments, including refunds of employee contributions (9,214,462) (8,218,689) (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 5,992,242 7,197,928 5,052,218 (648,937) 1,360,447 6,998,060 2,600,078
Total pension liability at beginning of year 119,926,123 112,728,195 107,675,977 108,324,914 106,964,467 99,966,407 97,366,329
Total pension liability at end of year (a) $ 125,918,365 $ 119,926,123 $ 112,728,195 $ 107,675,977 $ 108,324,914 $ 106,964,467 $ 99,966,407
PLAN FIDUCIARY NET POSITION
Contributions-employer $ 2,468,311 $ 2,712,204 $ 2,671,175 $ 1,801,016 $ 1,996,512 $ 1,420,218 $ 1,166,652
Contributions-employee 374,806 491,814 848,562 687,391 563,898 566,045 564,409
Net investment income 10,575,596 11,059,388 (3,452,538) 10,964,115 8,890,951 (1,237,895) 5,282,031
92
Benefit payments, including refunds or employee contributions (9,214,462) (8,218,689) (7,512,608) (6,937,544) (6,417,825) (6,363,249) (6,407,932)
Administrative expense (173,766) (190,108) (173,509) (173,921) (175,718) (183,599) (193,139)
- -
Net change in plan fiduciary net position 4,030,485 5,854,609 (7,618,918) 6,341,057 4,857,818 (5,798,480) 412,021
Plan fiduciary net position at beginning of year 88,994,708 83,140,099 90,759,017 84,417,960 79,560,142 85,358,622 84,946,601
Plan fiduciary net position at end of year (b) $ 93,025,193 $ 88,994,708 $ 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) $ 32,893,172 $ 30,931,415 $ 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 73.88% 74.21% 73.75% 84.29% 77.93% 74.38% 85.39%
Covered payroll $ 5,408,268 $ 6,110,950 $ 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 608.20% 506.16% 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 (Amounts were determined as of June 30 of each fiscal year)
2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Actuarially determined contribution $ 2,902,032 $ 1,855,248 $ 1,902,696 $ 1,798,140 $ 1,897,158 $ 1,546,440 $ 1,293,996 $ 1,043,040 $ 1,035,772 $ 1,160,870
Contributions in relation to the actuarially
determined contribution 2,902,032 2,777,641 2,218,663 1,964,214 2,276,200 1,753,272 1,293,996 1,543,040 1,035,772 1,160,870
Contribution deficiency (excess) $ - $ (922,393) $ (315,967) $ (166,074) $ (379,042) $ (206,832) $ - $ (500,000) $ - $ -
Covered payroll $ 5,408,268 $ 6,110,950 $ 6,561,169 $ 7,645,789 $ 8,460,078 $ 9,108,948 $ 9,171,511 $ 9,198,938 $ 10,185,425 $ 10,650,990
Contributions as percentage of covered
payroll 53.7% 45.5% 33.8% 25.7% 26.9% 19.2% 14.1% 16.8% 10.2% 10.9%
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
Amortization method Level percentage of payroll, Closed
93
Remaining amortization period 18 years
Asset valuation method 5-year smoothed market
Inflation 2.5 percent
Salary increases 3.0 percent in the long-term
Investment rate of return 7.35 percent, net of administrative and investment expenses
Retirement age Varies depending on plan adoption
Mortality Based on a version of Pub-2010 and fully generational MP-2019
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)
2020 2019 2018 2017
TOTAL OPEB LIABILITY
Service cost $ 156,214 $ 165,306 $ 178,243 $ 165,423
Interest 2,058,432 2,191,233 2,035,720 1,954,979
Differences between expected and actual experience (325,146) (2,119,868) (992,432) -
Changes of assumptions (1,152,266) 6,288,823 2,349,210 -
Benefit payments, including refunds of employee contributions (1,621,453) (1,983,928) (1,118,442) (1,064,376)
Net change in total OPEB liability (884,219) 4,541,566 2,452,299 1,056,026
Total OPEB liability at beginning of year 33,642,202 29,100,636 26,648,337 25,592,311
Total OPEB liability at end of year (a) $ 32,757,983 $ 33,642,202 $ 29,100,636 $ 26,648,337
PLAN FIDUCIARY NET POSITION
Contributions-employer $ 1,154,926 $ 1,001,447 $ 671,363 $ 736,039
Net investment income 2,210,729 2,660,470 (699,603) 2,110,019
94
Benefit payments, including refunds or employee contributions (1,621,453) (1,983,928) (1,118,442) (1,064,376)
Administrative expense (42,375) (41,397) (53,927) (52,313)
Net change in plan fiduciary net position 1,701,827 1,636,592 (1,200,609) 1,729,369
Plan fiduciary net position at beginning of year 21,215,561 19,578,969 20,779,578 19,050,209
Plan fiduciary net position at end of year (b) $ 22,917,388 $ 21,215,561 $ 19,578,969 $ 20,779,578
City's net OPEB liability at end of year (a)-(b) $ 9,840,595 $ 12,426,641 $ 9,521,667 $ 5,868,759
Plan fiduciary net position as a percentage of the total OPEB liability 69.96% 63.06% 67.28% 77.98%
Covered payroll $ 7,848,543 $ 8,952,683 Not Available $ 8,095,840
City's net OPEB liability as a percentage of covered payroll 125.38% 138.80% 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)
2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Actuarially determined contribution $ 2,289,405 $ 2,115,188 $ 1,470,562 $ 956,532 $ 606,506 $ 639,428 $ 659,451 $ 696,634 $ 728,863 $ 832,891
Contributions in relation to the actuarially
determined contribution 1,206,464 1,233,505 1,260,887 687,642 606,506 639,428 659,451 696,634 728,863 832,891
Contribution deficiency (excess) $ 1,082,941 $ 881,683 $ 209,675 $ 268,890 $ - $ - $ - $ - $ - $ -
Covered payroll $ 7,848,543 $ 8,952,683 Not Available $ 8,095,840 $ 10,830,000 $ 10,830,000 $ 10,005,000 $ 10,005,000 $ 12,365,000 $ 12,365,000
Contributions as percentage of covered
payroll 15.4% 13.8% Not Available 8.5% 5.6% 5.9% 6.6% 7.0% 5.9% 6.7%
Notes to Schedule
Valuation Date:
Actuarially determined contribution rates are calculated as of December 31, 2020.
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age normal (level percentage of compensation)
Amortization method Level percentage of payroll, Closed
95
Remaining amortization period 7 years
Asset valuation method Equal to market value of assets
Inflation 2.5 percent
Salary increases 3.0 percent
Investment rate of return 6.24 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-2020 improvement scale.
Mortality rates for others were as set forth in the Public General 2010 Employee and Healthy Retiree, headcount weighted, MP-2020 improvement scale.
City of Muskegon
REQUIRED SUPPLEMENTARY INFORMATION
RETIREE HEALTHCARE SYSTEM SCHEDULE OF INVESTMENT RETURNS
Last Ten Fiscal Years (Amounts were determined as of June 30 of each fiscal year)
2021 2020 2019 2018
Annual money-weighted rate of return, net of investment expense 10.55% 13.95% -3.41% 11.19%
Notes to Schedule
Additional data is not available and will be provided in subsequent years
96
OTHER SUPPLEMENTAL INFORMATION
97
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.
Mercy Health Arena – to account for revenues received for the operation and maintenance of Mercy Health
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.
Lakeshore BID – to account for the collection of special assessment revenue in the lakeshore area to be used for
improvement and maintenance of lakeshore 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.
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.
98
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.
Public Improvement Fund – to account for grants, private contributions, sale of property, and other resources used
to finance various capital projects.
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.
99
City of Muskegon
COMBINING BALANCE SHEET
Other Governmental Funds
June 30, 2021
Other Other Permanent
Total Other Special Capital Fund -
Governmental Revenue Projects Cemetery
Funds Funds Funds Perpetual Care
ASSETS
Cash and investments $ 2,943,588 $ 1,376,197 $ 990,386 $ 577,005
Assets managed by others 1,490,800 - 34,184 1,456,616
Accounts and loans receivable (net of allowance for uncollectibles) 1,749,722 337,501 1,408,444 3,777
Due from other governmental units 470,248 197,019 273,229 -
Advances to component units 202,227 - - 202,227
Prepaid items 35,876 35,876 - -
Total assets $ 6,892,461 $ 1,946,593 $ 2,706,243 $ 2,239,625
LIABILITIES
Accounts payable $ 235,717 $ 62,413 $ 173,304 $ -
Accrued liabilities 46,580 33,496 13,084 -
Due to other governmental units 2,466 112 2,354 -
Due to other funds 627,636 204,874 422,762 -
Short-term draw note 1,108,007 - 1,108,007 -
Unearned revenues - unused Farmers Market tokens 150,187 150,187 - -
Unearned revenues - expenditure-driven grants 107,656 - 107,656 -
Unearned revenues - prepaid events 36,687 36,687 - -
Total liabilities 2,314,936 487,769 1,827,167 -
FUND BALANCES
Nonspendable
Prepaid items 35,876 35,876 - -
Perpetual care 1,642,408 - - 1,642,408
Restricted
Highways, streets and bridges 1,181,198 1,181,198 - -
Mercy Health Arena 26,490 26,490 - -
Law enforcement 22,229 22,229 - -
Business improvement districts 136,968 136,968 - -
Perpetual care 597,217 - - 597,217
Other purposes 56,063 56,063 - -
Assigned for capital projects and public improvements 1,906,042 - 1,906,042 -
Unassigned (1,026,966) - (1,026,966) -
Total fund balances 4,577,525 1,458,824 879,076 2,239,625
Total liabilities, deferred inflows of
resources and fund balances $ 6,892,461 $ 1,946,593 $ 2,706,243 $ 2,239,625
100
City of Muskegon
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (DEFICITS)
Other Governmental Funds
For the year ended June 30, 2021
Other Other Permanent
Total Other Special Capital Fund -
Governmental Revenue Projects Cemetery
Funds Funds Funds Perpetual Care
REVENUES
Intergovernmental revenues
Federal $ 1,811,560 $ - $ 1,811,560 $ -
State 1,391,287 1,391,287 - -
Local 575,151 - 575,151 -
Charges for services 1,214,796 1,128,975 39,033 46,788
Fines and forfeitures 10,342 10,342 - -
Investment earnings 33,036 5,550 17,318 10,168
Income from assets managed by others 229,194 - 7,316 221,878
Other 1,012,769 199,343 813,426 -
Total revenues 6,278,135 2,735,497 3,263,804 278,834
EXPENDITURES
Current
Public works 161,742 161,742 - -
Highways, streets and bridges 1,336,973 1,336,973 - -
Culture and recreation 1,886,678 1,886,678 - -
Debt service
Principal 133,504 - 133,504 -
Interest and fees 66,176 - 66,176 -
Capital outlay 4,884,443 30,745 4,853,698 -
Total expenditures 8,469,516 3,416,138 5,053,378 -
Excess of revenues over (under) expenditures (2,191,381) (680,641) (1,789,574) 278,834
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets 2,908,552 - 2,908,552 -
Transfers in 895,000 845,000 50,000 -
Transfers out (40,000) - (40,000) -
Total other financing sources (uses) 3,763,552 845,000 2,918,552 -
Net change in fund balances (deficits) 1,572,171 164,359 1,128,978 278,834
Fund balances (deficits) at beginning of year 3,005,354 1,294,465 (249,902) 1,960,791
Fund balances at end of year $ 4,577,525 $ 1,458,824 $ 879,076 $ 2,239,625
101
City of Muskegon
COMBINING BALANCE SHEET
Other Special Revenue Funds
June 30, 2021
Total Other Farmers
Special Revenue Local Mercy Health Criminal Downtown Lakeshore Tree Market and
Funds Street Arena Forfeitures BID BID Replacement Kitchen 242
ASSETS
Cash and investments $ 1,376,197 $ 998,052 $ - $ 22,229 $ 132,988 $ 3,980 $ 13,680 $ 205,268
Accounts receivable 337,501 11,518 321,798 - - - - 4,185
Due from other governmental units 197,019 197,019 - - - - - -
Prepaid items 35,876 7,438 28,438 - - - - -
Total assets $ 1,946,593 $ 1,214,027 $ 350,236 $ 22,229 $ 132,988 $ 3,980 $ 13,680 $ 209,453
LIABILITIES
Accounts payable $ 62,413 $ 7,192 $ 40,495 $ - $ - $ - $ - $ 14,726
Accrued liabilities 33,496 18,199 13,140 - - - - 2,157
Due to other governmental units 112 - 112 - - - - -
Due to other funds 204,874 - 204,874 - - - - -
Unearned revenues - unused Farmers Market tokens 150,187 - - - - - - 150,187
Unearned revenues - prepaid events 36,687 - 36,687 - - - - -
102
Total liabilities 487,769 25,391 295,308 - - - - 167,070
FUND BALANCES
Nonspendable - prepaid items 35,876 7,438 28,438 - - - - -
Restricted
Highways, streets and bridges 1,181,198 1,181,198 - - - - - -
Mercy Health Arena 26,490 - 26,490 - - - - -
Law enforcement 22,229 - - 22,229 - - - -
Business improvement districts 136,968 - - - 132,988 3,980 - -
Other purposes 56,063 - - - - - 13,680 42,383
Total fund balances 1,458,824 1,188,636 54,928 22,229 132,988 3,980 13,680 42,383
Total liabilities, deferred inflows of
resources and fund balances $ 1,946,593 $ 1,214,027 $ 350,236 $ 22,229 $ 132,988 $ 3,980 $ 13,680 $ 209,453
City of Muskegon
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
Other Special Revenue Funds
For the year ended June 30, 2021
Total Other Farmers
Special Revenue Local Mercy Health Criminal Downtown Lakeshore Tree Market and
Funds Street Arena Forfeitures BID BID Replacement Kitchen 242
REVENUES
Intergovernmental revenues - State $ 1,391,287 $ 1,388,287 $ - $ - $ - $ - $ 3,000 $ -
Charges for services 1,128,975 2,349 995,142 - - - 14,300 117,184
Fines and forfeitures 10,342 - - 10,342 - - - -
Investment earnings 5,550 4,502 - 43 631 1 45 328
Other 199,343 62,356 9,836 - 115,306 5,959 5,886 -
Total revenues 2,735,497 1,457,494 1,004,978 10,385 115,937 5,960 23,231 117,512
EXPENDITURES
Current
Public works 161,742 - - - 159,762 1,980 - -
Highways, streets and bridges 1,336,973 1,336,973 - - - - - -
Culture and recreation 1,886,678 - 1,715,865 - - - 10,570 160,243
103
Capital outlay 30,745 - 30,745 - - - - -
Total expenditures 3,416,138 1,336,973 1,746,610 - 159,762 1,980 10,570 160,243
Excess of revenues over (under) expenditures (680,641) 120,521 (741,632) 10,385 (43,825) 3,980 12,661 (42,731)
OTHER FINANCING SOURCES
Transfers in 845,000 - 765,000 - - - - 80,000
Net change in fund balances 164,359 120,521 23,368 10,385 (43,825) 3,980 12,661 37,269
Fund balances at beginning of year 1,294,465 1,068,115 31,560 11,844 176,813 - 1,019 5,114
Fund balances at end of year $ 1,458,824 $ 1,188,636 $ 54,928 $ 22,229 $ 132,988 $ 3,980 $ 13,680 $ 42,383
City of Muskegon
BUDGETARY COMPARISON SCHEDULE
Other Special Revenue Funds
For the year ended June 30, 2021
Local Street Mercy Health Arena
Final Final
Budget Actual Variance Budget Actual Variance
REVENUES
Intergovernmental revenues - State $ 1,390,000 $ 1,388,287 $ (1,713) $ - $ - $ -
Charges for services - 2,349 2,349 798,876 995,142 196,266
Investment earnings 3,500 4,502 1,002 - - -
Other 60,000 62,356 2,356 5,700 9,836 4,136
Total revenues 1,453,500 1,457,494 3,994 804,576 1,004,978 200,402
EXPENDITURES
Current
Highways, streets and bridges 1,719,140 1,336,973 382,167 - - -
104
Culture and recreation - - - 1,465,881 1,715,865 (249,984)
Capital outlay - - - 35,930 30,745 5,185
Total expenditures 1,719,140 1,336,973 382,167 1,501,811 1,746,610 (244,799)
Excess of revenues over (under) expenditures (265,640) 120,521 386,161 (697,235) (741,632) (44,397)
OTHER FINANCING SOURCES
Transfers in 100,000 - (100,000) 740,000 765,000 25,000
Net change in fund balances $ (165,640) 120,521 $ 286,161 $ 42,765 23,368 $ (19,397)
Fund balances at beginning of year 1,068,115 31,560
Fund balances at end of year $ 1,188,636 $ 54,928
City of Muskegon
BUDGETARY COMPARISON SCHEDULE─CONTINUED
Other Special Revenue Funds
For the year ended June 30, 2021
Criminal Forfeitures Downtown BID
Final Final
Budget Actual Variance Budget Actual Variance
REVENUES
Fines and forfeitures $ 7,407 $ 10,342 $ 2,935 $ - $ - $ -
Investment earnings 40 43 3 - 631 631
Other - - - 113,681 115,306 1,625
Total revenues 7,447 10,385 2,938 113,681 115,937 2,256
EXPENDITURES
Current
Public works - - - 113,681 159,762 (46,081)
Net change in fund balances $ 7,447 10,385 $ 2,938 $ - (43,825) $ (43,825)
105
Fund balances at beginning of year 11,844 176,813
Fund balances at end of year $ 22,229 $ 132,988
City of Muskegon
BUDGETARY COMPARISON SCHEDULE─CONTINUED
Other Special Revenue Funds
For the year ended June 30, 2021
Lakeshore BID Tree Replacement
Final Final
Budget Actual Variance Budget Actual Variance
REVENUES
Intergovernmental revenues - State $ - $ - $ - $ 3,000 $ 3,000 $ -
Charges for services - - - - 14,300 14,300
Investment earnings - 1 1 - 45 45
Other - 5,959 5,959 14,800 5,886 (8,914)
Total revenues - 5,960 5,960 17,800 23,231 5,431
EXPENDITURES
Current
Public works - 1,980 (1,980) - - -
Culture and recreation - - - 14,800 10,570 4,230
- -
106
Total expenditures - 1,980 (1,980) 14,800 10,570 4,230
Net change in fund balances $ - 3,980 $ 3,980 $ 3,000 12,661 $ 9,661
Fund balances at beginning of year - 1,019
Fund balances at end of year $ 3,980 $ 13,680
City of Muskegon
BUDGETARY COMPARISON SCHEDULE─CONTINUED
Other Special Revenue Funds
For the year ended June 30, 2021
Farmers Market and Kitchen 242
Final
Budget Actual Variance
REVENUES
Intergovernmental revenues - State $ - $ - $ -
Charges for services 115,500 117,184 1,684
Investment earnings 170 328 158
Other 6,710 - (6,710)
Total revenues 122,380 117,512 (4,868)
EXPENDITURES
Current
Culture and recreation 211,953 160,243 51,710
107
Excess of revenues over (under) expenditures (89,573) (42,731) 46,842
OTHER FINANCING SOURCES
Transfers in 105,000 80,000 (25,000)
Net change in fund balance $ 15,427 37,269 $ 21,842
Fund balance at beginning of year 5,114
Fund balance at end of year $ 42,383
City of Muskegon
COMBINING BALANCE SHEET
Other Capital Projects Funds
June 30, 2021
Total Other EDC Community
Capital Projects Michcon Revolving Development HOME Lead Senior Public
Funds Remediation Loan Block Grant Rehabilitation Abatement Millage Improvement
ASSETS
Cash and investments $ 990,386 $ 227,545 $ 624,078 $ - $ 110,635 $ - $ 28,128 $ -
Assets managed by others 34,184 - - - - - - 34,184
Receivables
Accounts and loans (net of
allowance for uncollectibles) 1,408,444 - 935,911 11,773 - - - 460,760
Due from other governmental units 273,229 - - 108,067 1,781 56,290 101,556 5,535
Total assets $ 2,706,243 $ 227,545 $ 1,559,989 $ 119,840 $ 112,416 $ 56,290 $ 129,684 $ 500,479
LIABILITIES
Accounts payable $ 173,304 $ - $ 116,887 $ 21,442 $ 400 $ 17,849 $ 4,425 $ 12,301
Accrued liabilities 13,084 - - 9,055 1,452 2,149 428 -
Due to other governmental units 2,354 - - - - 2,354 - -
Due to other funds 422,762 - - 89,343 - 33,938 - 299,481
Short-term draw note 1,108,007 - - - - - - 1,108,007
Unearned revenues - expenditure-driven grants 107,656 - - - - - - 107,656
Total liabilities 1,827,167 - 116,887 119,840 1,852 56,290 4,853 1,527,445
108
FUND BALANCES (DEFICITS)
Assigned for capital projects and public improvements 1,906,042 227,545 1,443,102 - 110,564 - 124,831 -
Unassigned (1,026,966) - - - - - - (1,026,966)
Total fund balances (deficits) 879,076 227,545 1,443,102 - 110,564 - 124,831 (1,026,966)
Total liabilities and fund balances (deficits) $ 2,706,243 $ 227,545 $ 1,559,989 $ 119,840 $ 112,416 $ 56,290 $ 129,684 $ 500,479
City of Muskegon
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (DEFICITS)
Other Capital Projects Funds
For the year ended June 30, 2021
Total Other EDC Community
Capital Projects Michcon Revolving Development HOME Lead Senior Public
Funds Remediation Loan Block Grant Rehabilitation Abatement Millage Improvement
REVENUES
Intergovernmental revenues
Federal $ 1,811,560 $ - $ - $ 1,069,842 $ 55,069 $ 681,114 $ - $ 5,535
Local 575,151 - - - - - - 575,151
Charges for services 39,033 - 6,000 - - - - 33,033
Investment earnings 17,318 1,134 15,853 - - - 331 -
Income from assets managed by others 7,316 - - - - - - 7,316
Other 813,426 - 405,448 6,838 - - 200,266 200,874
Total revenues 3,263,804 1,134 427,301 1,076,680 55,069 681,114 200,597 821,909
EXPENDITURES
Debt service
Principal 133,504 - - - - - - 133,504
Interest and fees 66,176 - - - - - - 66,176
Capital outlay 4,853,698 - 27,023 1,128,054 244,597 681,114 117,960 2,654,950
Total expenditures 5,053,378 - 27,023 1,128,054 244,597 681,114 117,960 2,854,630
109
Excess of revenues over (under) expenditures (1,789,574) 1,134 400,278 (51,374) (189,528) - 82,637 (2,032,721)
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets 2,908,552 - - 51,374 300,092 - - 2,557,086
Transfers in 50,000 - - - - - - 50,000
Transfers out (40,000) - - - - - (40,000) -
Total other financing sources (uses) 2,918,552 - - 51,374 300,092 - (40,000) 2,607,086
Net change in fund balances (deficits) 1,128,978 1,134 400,278 - 110,564 - 42,637 574,365
Fund balances (deficits) at beginning of year (249,902) 226,411 1,042,824 - - - 82,194 (1,601,331)
Fund balances (deficits) at end of year $ 879,076 $ 227,545 $ 1,443,102 $ - $ 110,564 $ - $ 124,831 $ (1,026,966)
[This page was intentionally left blank.]
110
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.
111
City of Muskegon
COMBINING STATEMENT OF NET POSITION
Internal Service Funds
June 30, 2021
Total Internal Engineering General Public Service
Service Funds Services Equipment Insurance Building
ASSETS
Current assets
Cash and investments $ 1,809,803 $ 56,580 $ 915,651 $ - $ 837,572
Accounts receivable 1,610,774 3,122 49,776 1,557,876 -
Inventories 7,318 - 7,318 - -
Prepaid items 229,482 1,777 66,936 154,300 6,469
Total current assets 3,657,377 61,479 1,039,681 1,712,176 844,041
Noncurrent assets
Advances to component units 391,080 - 195,540 195,540 -
Capital assets
Land 65,000 - - - 65,000
Land improvements 301,715 - - - 301,715
Buildings and improvements 1,668,215 - - - 1,668,215
Machinery and equipment 9,750,170 51,346 9,604,460 - 94,364
Less accumulated depreciation (9,085,683) (31,145) (7,267,497) - (1,787,041)
Net capital assets 2,699,417 20,201 2,336,963 - 342,253
Total noncurrent assets 3,090,497 20,201 2,532,503 195,540 342,253
Total assets 6,747,874 81,680 3,572,184 1,907,716 1,186,294
DEFERRED OUTFLOWS OF RESOURCES
Related to pension 58,040 - 21,765 - 36,275
Related to other postemployment benefits 27,760 - 10,410 - 17,350
Total deferred outflows of resources 85,800 - 32,175 - 53,625
Total assets and deferred outflows of resources 6,833,674 81,680 3,604,359 1,907,716 1,239,919
LIABILITIES
Current liabilities
Accounts payable 269,193 5,237 62,665 167,253 34,038
Accrued liabilities 50,316 10,827 16,613 1,405 21,471
Due to other funds 384,381 - - 384,381 -
Bonds and other obligations, due within one year 26,700 4,900 8,800 900 12,100
Total current liabilities 730,590 20,964 88,078 553,939 67,609
Noncurrent liabilities
Bonds and other obligations, less amounts due within one year 133,925 24,658 43,866 4,664 60,737
Net pension liability 1,315,727 - 493,398 - 822,329
Net other postemployment benefits liability 393,624 - 147,609 - 246,015
Total noncurrent liabilities 1,843,276 24,658 684,873 4,664 1,129,081
Total liabilities 2,573,866 45,622 772,951 558,603 1,196,690
DEFERRED INFLOWS OF RESOURCES
Related to pension 108,846 - 40,817 - 68,029
Related to other postemployment benefits 25,813 - 9,680 - 16,133
Total deferred inflows of resources 134,659 - 50,497 - 84,162
Total liabilities and deferred inflows of resources 2,708,525 45,622 823,448 558,603 1,280,852
NET POSITION
Net investment in capital assets 2,699,417 20,201 2,336,963 - 342,253
Unrestricted 1,425,732 15,857 443,948 1,349,113 (383,186)
Total net position $ 4,125,149 $ 36,058 $ 2,780,911 $ 1,349,113 $ (40,933)
112
City of Muskegon
COMBINING STATEMENT OF REVENUE, EXPENSES AND CHANGES IN NET POSITION
Internal Service Funds
For the year ended June 30, 2021
Total Internal Engineering General Public Service
Service Funds Services Equipment Insurance Building
OPERATING REVENUES
Charges for services $ 8,889,155 $ 503,187 $ 2,212,782 $ 5,067,567 $ 1,105,619
Other 97,102 32,586 64,516 - -
Total operating revenues 8,986,257 535,773 2,277,298 5,067,567 1,105,619
OPERATING EXPENSES
Administration 791,527 101,932 171,867 46,806 470,922
Insurance premiums and claims 4,839,612 - - 4,839,612 -
Other operations 3,400,274 400,980 1,936,098 74,644 988,552
Depreciation 542,440 2,499 508,412 - 31,529
Total operating expenses 9,573,853 505,411 2,616,377 4,961,062 1,491,003
Operating income (loss) (587,596) 30,362 (339,079) 106,505 (385,384)
NONOPERATING REVENUES (EXPENSES)
Investment earnings 24,721 30 12,121 10,640 1,930
Gain (loss) on sale of capital assets 83,978 - 83,978 - -
Total nonoperating revenues (expenses) 108,699 30 96,099 10,640 1,930
Income (loss) before transfers (478,897) 30,392 (242,980) 117,145 (383,454)
TRANSFERS
Transfers in 625,000 - - - 625,000
Change in net position 146,103 30,392 (242,980) 117,145 241,546
Net position at beginning of year 3,979,046 5,666 3,023,891 1,231,968 (282,479)
Net position at end of year $ 4,125,149 $ 36,058 $ 2,780,911 $ 1,349,113 $ (40,933)
113
City of Muskegon
COMBINING STATEMENT OF CASH FLOWS
Internal Service Funds
For the year ended June 30, 2021
Total Internal Engineering General Public Service
Service Funds Services Equipment Insurance Building
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 53,808 $ 29,948 $ 23,860 $ - $ -
Receipts from interfund services provided 7,297,489 503,187 2,212,782 3,475,901 1,105,619
Other receipts 1,502,594 - - 1,502,594 -
Payments to suppliers (6,671,503) (164,578) (1,005,157) (4,794,074) (707,694)
Payments to employees (1,336,543) (228,949) (364,830) (226,006) (516,758)
Payments for interfund services used (868,416) (95,033) (655,123) (3,989) (114,271)
Net cash provided by (used for) operating activities (22,571) 44,575 211,532 (45,574) (233,104)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Transfers in 625,000 - - - 625,000
Interfund borrowing (10,136) - - (10,136) -
Collections on advances to component units 90,140 - 45,070 45,070 -
Net cash provided by (used for) noncapital financing activities 705,004 - 45,070 34,934 625,000
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Purchases of capital assets (322,030) - (322,030) - -
Proceeds from sale of capital assets 170,913 - 170,913 - -
114
Net cash provided by (used for) capital and related financing activities (151,117) - (151,117) - -
CASH FLOW FROM INVESTING ACTIVITIES
Investment earnings 24,721 30 12,121 10,640 1,930
Net increase (decrease) in cash and investments 556,037 44,605 117,606 - 393,826
Cash and investments at beginning of year 1,253,766 11,975 798,045 - 443,746
Cash and investments at end of year $ 1,809,803 $ 56,580 $ 915,651 $ - $ 837,572
Reconciliation of operating income (loss) to net cash provided by (used for)
operating activities
Operating income (loss) $ (587,596) $ 30,362 $ (339,079) $ 106,505 $ (385,384)
Adjustments to reconcile operating income (loss) to net cash provided by
(used for) operating activities
Depreciation expense 542,440 2,499 508,412 - 31,529
Change in assets and liabilities
Receivables (132,366) (2,638) (40,656) (89,072) -
Inventories (1,285) - (1,285) - -
Prepaid items 14,393 868 (2,378) 15,648 255
Accounts payable (77,132) 4,604 16,349 (78,641) (19,444)
Accrued liabilities 218,975 8,880 70,169 (14) 139,940
Net cash provided by (used for) operating activities $ (22,571) $ 44,575 $ 211,532 $ (45,574) $ (233,104)
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:
CUSTODIAL FUNDS are used to report fiduciary activities that are not required to be reported in pension (and
other employee benefit) trust funds, investment trust funds, or private-purpose trust funds.
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.
115
City of Muskegon
COMBINING STATEMENT OF NET POSITION
Custodial Funds
June 30, 2021
Total Current Rehab Loan
Custodial Funds Collector Tax Escrow
ASSETS
Cash and investments $ 842,960 $ 842,579 $ - $ 381
Accounts receivable 145,552 145,552 - -
Total assets 988,512 988,131 - 381
LIABILITIES
Accounts payable 125,849 125,468 - 381
Due to other governmental units 763,408 763,408 - -
Deposits held for others 99,255 99,255 - -
Total liabilities 988,512 988,131 - 381
NET POSITION
Restricted for individuals, organizations,
and other governments $ - $ - $ - $ -
116
City of Muskegon
COMBINING STATEMENT OF CHANGES IN NET POSITION
Custodial Funds
For the year ended June 30, 2021
Total Current Rehab Loan
Custodial Funds Collector Tax Escrow
ADDITIONS
Tax collections for other governments $ 22,844,643 $ 406,974 $ 22,437,669 $ -
Other collections for third parties 1,268,438 1,268,438 - -
Total additions 24,113,081 1,675,412 22,437,669 -
DEDUCTIONS
Payment of taxes to other governments 22,844,643 406,974 22,437,669 -
Other payments to third parties 1,268,438 1,268,438 - -
Total deductions 24,113,081 1,675,412 22,437,669 -
Change in net position - - - -
Net position at beginning of year, as restated - - - -
Net position at end of year $ - $ - $ - $ -
117
[This page was intentionally left blank.]
118
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 Authorities – to account for the collection of tax increment revenues for
environmental remediation in designated brownfield areas. Currently there are six 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.
Area IV – Pigeon Hill brownfield site.
Area V – Hartshore Marina site.
Area VI – Scattered housing site.
119
City of Muskegon
COMBINING BALANCE SHEET
Discretely Presented Component Units
June 30, 2021
Local
Total Discretely Development
Presented Finance Downtown Tax Increment Brownfield
Component Authority - Development Finance Redevelopment
Units SmartZone Authority Authority Authorities
ASSETS
Cash and investments $ 323,582 $ 40,168 $ 159,587 $ 17,885 $ 105,942
LIABILITIES
Accounts payable $ 89,996 $ - $ 69,446 $ - $ 20,550
Accrued liabilities 4,057 - 4,057 - -
Due to primary government 652,132 - - - 652,132
Advances from primary government 593,307 - - - 593,307
120
Total liabilities 1,339,492 - 73,503 - 1,265,989
FUND BALANCES (DEFICITS)
Unassigned (1,015,910) 40,168 86,084 17,885 (1,160,047)
Total liabilities and fund
balances (deficits) $ 323,582 $ 40,168 $ 159,587 $ 17,885 $ 105,942
City of Muskegon
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO THE STATEMENT OF NET POSITION
Discretely Presented Component Units
June 30, 2021
Total fund balances (deficits)—governmental funds $ (1,015,910)
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 (3,035,729) 1,162,529
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 (7,000)
Bonds and notes payable (1,352,248) (1,359,248)
Net position of governmental activities $ (1,212,629)
121
City of Muskegon
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (DEFICITS)
Discretely Presented Component Units
For the year ended June 30, 2021
Local
Total Discretely Development
Presented Finance Downtown Tax Increment Brownfield
Component Authority - Development Finance Redevelopment
Units SmartZone Authority Authority Authorities
REVENUES
Property taxes $ 1,393,555 $ 99,568 $ 490,931 $ 42,184 $ 760,872
Intergovernmental revenues
State 29,359 3,349 - 9,744 16,266
Local 400,000 350,000 50,000 - -
Investment earnings 1,760 205 579 69 907
Other 118,629 - 118,325 - 304
Total revenues 1,943,303 453,122 659,835 51,997 778,349
122
EXPENDITURES
Current
Community and economic development 1,863,830 - 580,098 50,000 1,233,732
Debt service
Principal 395,000 395,000 - - -
Interest and fees 72,470 50,100 - - 22,370
Total expenditures 2,331,300 445,100 580,098 50,000 1,256,102
Net change in fund balances (deficits) (387,997) 8,022 79,737 1,997 (477,753)
Fund balances (deficits) at beginning of year (627,913) 32,146 6,347 15,888 (682,294)
Fund balances (deficits) at end of year $ (1,015,910) $ 40,168 $ 86,084 $ 17,885 $ (1,160,047)
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, 2021
Net change in fund balances (deficits)—total governmental funds $ (387,997)
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 395,000
Changes in accrual of interest and amortization of premiums and discounts
Change in accrued interest payable $ 2,650
Amortization of premiums 13,129 15,779
Change in net position of governmental activities $ (149,866)
123
[This page was intentionally left blank.]
124
SCHEDULE OF INDEBTEDNESS
125
City of Muskegon
SCHEDULE OF INDEBTEDNESS
June 30, 2021
Annual
Date Amount Interest Date of Interest
of Issue of Issue Rate Maturity 6/30/2020 6/30/2021 Payable
Business-Type Activities Bonds and Loans Payable:
Drinking Water State Revolving 3/2/2004 $ 13,900,000 2.13% 10/01/20 $ 760,000 $ - $ -
Fund 2.13% 10/01/21 775,000 775,000 77,616
2.13% 10/01/22 790,000 790,000 60,988
Type of debt: state loan 2.13% 10/01/23 810,000 810,000 43,988
Revenue pledged: water system net revenues 2.13% 10/01/24 825,000 825,000 26,616
2.13% 10/01/25 840,000 840,000 8,925
4,800,000 4,040,000 218,133
Drinking Water State Revolving Fund* 8/30/2019 $1,600,000 2.00% 10/01/21 65,000 65,000 32,000
2.00% 10/01/22 70,000 70,000 30,700
Type of debt: state loan 2.00% 10/01/23 70,000 70,000 29,300
Revenue Pledged: water system net revenues 2.00% 10/01/24 58,217 70,000 27,900
Forgiveness: 20% 2.00% 10/01/25 - 70,000 26,500
2.00% 10/01/26 - 75,000 25,100
2.00% 10/01/27 - 75,000 23,600
2.00% 10/01/28 - 75,000 22,100
2.00% 10/01/29 - 75,000 20,600
2.00% 10/01/30 - 80,000 19,100
2.00% 10/01/31 - 80,000 17,500
2.00% 10/01/32 - 80,000 15,900
2.00% 10/01/33 - 85,000 14,300
2.00% 10/01/34 - 85,000 12,600
2.00% 10/01/35 - 85,000 10,900
2.00% 10/01/36 - 90,000 9,200
2.00% 10/01/37 - 90,000 7,400
2.00% 10/01/38 - 90,000 5,600
2.00% 10/01/39 - 95,000 3,800
2.00% 10/01/40 - 86,874 1,900
263,217 1,591,874 356,000
Sanitary Sewer State Revolving Fund* 8/30/2019 $2,875,000 2.00% 10/01/21 120,000 120,000 56,300
2.00% 10/01/22 120,000 120,000 53,900
Type of debt: state loan 2.00% 10/01/23 125,000 125,000 51,450
Revenue Pledged: sanitary sewer system net revenues 2.00% 10/01/24 125,000 125,000 48,950
Forgiveness: 75% 2.00% 10/01/25 130,000 130,000 46,400
2.00% 10/01/26 130,000 130,000 43,800
2.00% 10/01/27 135,000 135,000 41,150
2.00% 10/01/28 135,000 135,000 38,450
2.00% 10/01/29 140,000 140,000 35,700
2.00% 10/01/30 140,000 140,000 32,900
2.00% 10/01/31 145,000 145,000 30,050
2.00% 10/01/32 99,739 145,000 27,150
2.00% 10/01/33 - 150,000 24,200
2.00% 10/01/34 - 150,000 21,200
2.00% 10/01/35 - 155,000 18,150
2.00% 10/01/36 - 139,459 15,000
1,544,739 2,184,459 584,750
Drinking Water State Revolving Fund* 9/30/2020 $ 3,844,750 2.00% 10/01/21 - 154,750 15,701
2.00% 10/01/22 - 160,000 12,606
Type of debt: state loan 2.00% 10/01/23 - 165,000 9,406
Revenue Pledged: water system net revenues 2.00% 10/01/24 - 170,000 6,106
Forgiveness: 9% 2.00% 10/01/25 - 135,296 2,706
- 785,046 46,525
Sanitary Sewer State Revolving Fund* 9/30/2020 $ 3,772,000 2.00% 10/01/21 - 152,000 9,101
2.00% 10/01/22 - 155,000 6,061
Type of debt: state loan 2.00% 10/01/23 - 148,074 2,961
Revenue Pledged: water system net revenues 2.00% 10/01/24 - - -
Forgiveness: 20% 2.00% 10/01/25 - - -
- 455,074 18,123
TOTAL BUSINESS TYPE ACTIVITIES BONDS AND LOAN PAYABLE $ 6,607,956 $ 9,056,453 $ 1,223,531
*If certain conditions are met, a portion of the principal amount on these debts may be forgiven.
126
City of Muskegon
SCHEDULE OF INDEBTEDNESS
June 30, 2021
Annual
Date Amount Interest Date of Interest
of Issue of Issue Rate Maturity 6/30/2020 6/30/2021 Payable
Governmental Activities Bonds and Loan Payable:
Capital Improvement refunding bonds of 2016 3/8/2016 $ 4,815,000 3.00% 10/01/20 $ 295,000 $ - $ -
($189,903 unamortized premium) 3.00% 10/01/21 305,000 305,000 141,975
3.00% 10/01/22 300,000 300,000 132,900
Type of debt: limited G.O. bonds 3.00% 10/01/23 300,000 300,000 122,400
Revenue pledged: general revenues 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
4,110,000 3,815,000 920,475
Capital improvement bonds 9/30/2011 $ 2,000,000 2.98% 09/01/20 220,000 - -
of 2011 (streets) 2.98% 09/01/21 230,000 230,000 3,427
450,000 230,000 3,427
Type of debt: limited G.O. bond
Revenue pledged: gas tax, general revenues
Installment Purchase Agreements $ 2,417,390 4.4% - 5.3% 04/22/21 324,944 - -
Mercy Health Arena 4.4% - 5.3% 04/22/22 340,307 - -
Type of debt: installment purchase 4.4% - 5.3% 04/22/23 356,217 - -
Revenue pledged: general revenues 4.4% - 5.3% 04/22/24 372,871 - -
4.4% - 5.3% 04/22/25 390,306 - -
4.4% - 5.3% 04/22/26 339,159 - -
2,123,804 - -
Capital Improvement Bonds of 2019 10/9/2019 $ 19,420,000 1.90% 10/01/20 175,000 - -
Convention Center 1.83% 10/01/21 205,000 205,000 612,211
($135,650 unamortized discount) 1.88% 10/01/22 250,000 250,000 607,985
1.93% 10/01/23 300,000 300,000 602,740
Type of debt: limited G.O. bonds 2.00% 10/01/24 320,000 320,000 596,645
Revenue Pledged: excise tax on hotel rooms levied by the 2.10% 10/01/25 340,000 340,000 589,875
County of Muskegon pursuant to Act 263 2.24% 10/01/26 360,000 360,000 582,273
2.34% 10/01/27 380,000 380,000 573,795
2.43% 10/01/28 405,000 405,000 564,429
2.60% 10/01/29 430,000 430,000 553,918
2.60% 10/01/30 455,000 455,000 542,412
2.68% 10/01/31 480,000 480,000 530,066
2.78% 10/01/32 510,000 510,000 516,544
2.83% 10/01/33 540,000 540,000 501,815
2.93% 10/01/34 570,000 570,000 485,822
3.30% 10/01/35 605,000 605,000 467,399
3.30% 10/01/36 640,000 640,000 446,670
3.30% 10/01/37 680,000 680,000 424,692
3.30% 10/01/38 720,000 720,000 401,382
3.30% 10/01/39 760,000 760,000 376,740
3.48% 10/01/40 800,000 800,000 350,166
3.48% 10/01/41 845,000 845,000 321,543
3.48% 10/01/42 895,000 895,000 291,267
3.48% 10/01/43 940,000 940,000 259,338
3.48% 10/01/44 995,000 995,000 225,669
3.58% 10/01/45 1,045,000 1,045,000 189,651
3.58% 10/01/46 1,105,000 1,105,000 151,165
3.58% 10/01/47 1,160,000 1,160,000 110,622
3.58% 10/01/48 1,225,000 1,225,000 67,931
3.58% 10/01/49 1,285,000 1,285,000 23,001
19,420,000 19,245,000 11,967,766
127
City of Muskegon
SCHEDULE OF INDEBTEDNESS
June 30, 2021
Annual
Date Amount Interest Date of Interest
of Issue of Issue Rate Maturity 6/30/2020 6/30/2021 Payable
Governmental Activities Bonds and Loan Payable—Continued:
Capital Improvement Bonds of 2020 11/12/2020 $ 4,325,000 4.00% 10/01/21 $ - $ 320,000 $ 183,900
Series 2020A 4.00% 10/01/22 - 335,000 170,800
($772,424 unamortized premium) 4.00% 10/01/23 - 360,000 156,900
4.00% 10/01/24 - 370,000 142,300
Type of debt: limited G.O. bonds 4.00% 10/01/25 - 385,000 127,200
Revenue pledged: general revenues 5.00% 10/01/26 - 405,000 109,375
5.00% 10/01/27 - 420,000 88,750
5.00% 10/01/28 - 445,000 67,125
5.00% 10/01/29 - 470,000 44,250
5.00% 10/01/30 - 485,000 20,375
2.50% 10/01/31 - 30,000 7,875
2.50% 10/01/32 - 30,000 7,125
2.50% 10/01/33 - 30,000 6,375
2.50% 10/01/34 - 30,000 5,625
2.50% 10/01/35 - 35,000 4,813
2.50% 10/01/36 - 35,000 3,937
2.50% 10/01/37 - 35,000 3,063
2.50% 10/01/38 - 35,000 2,187
2.50% 10/01/39 - 35,000 1,313
2.50% 10/01/40 - 35,000 437
- 4,325,000 1,153,725
Capital Improvement Bonds of 2020 11/12/2020 $ 2,055,000 0.68% 10/01/21 - 85,000 46,124
Series 2020B 0.68% 10/01/22 - 85,000 45,546
0.68% 10/01/23 - 90,000 44,951
Type of debt: limited G.O. bonds 1.35% 10/01/24 - 90,000 44,038
Revenue pledged: general revenues 1.35% 10/01/25 - 90,000 42,823
1.35% 10/01/26 - 90,000 41,608
2.00% 10/01/27 - 95,000 40,050
2.00% 10/01/28 - 95,000 38,150
2.00% 10/01/29 - 95,000 36,250
2.00% 10/01/30 - 100,000 34,300
2.60% 10/01/31 - 100,000 32,000
2.60% 10/01/32 - 105,000 29,335
2.60% 10/01/33 - 105,000 26,605
2.60% 10/01/34 - 110,000 23,810
3.20% 10/01/35 - 110,000 20,950
3.20% 10/01/36 - 115,000 17,680
3.20% 10/01/37 - 120,000 13,920
3.20% 10/01/38 - 120,000 10,080
3.20% 10/01/39 - 125,000 6,160
3.20% 10/01/40 - 130,000 2,080
- 2,055,000 596,459
TOTAL GOVERNMENTAL ACTIVITIES BONDS AND LOANS PAYABLE $ 26,103,804 $ 29,670,000 $ 14,641,852
TOTAL PRIMARY GOVERNMENT BONDS AND LOANS PAYABLE $ 32,711,760 $ 38,726,453 $ 15,865,383
Discretely Presented Component Unit Bonds and Loans Payable:
Local Development Finance Authority 3/20/2012 $ 4,100,000 4.00% 11/01/20 $ 395,000 $ - $ -
Smartzone Refunding Bonds 4.00% 11/01/21 245,000 245,000 37,300
($27,248 unamortized premium) 3.00% 11/01/22 255,000 255,000 28,575
3.00% 11/01/23 265,000 265,000 20,775
Type of debt: limited G.O. bond 3.00% 11/01/24 275,000 275,000 12,675
Revenue pledged: LDFA tax increments, general revenues 3.00% 11/01/25 285,000 285,000 4,275
1,720,000 1,325,000 103,600
TOTAL DISCRETELY PRESENTED COMPONENT UNIT BONDS AND LOANS PAYABLE $ 1,720,000 $ 1,325,000 $ 103,600
TOTAL REPORTING ENTITY BONDS AND LOANS PAYABLE $ 34,431,760 $ 40,051,453 $ 15,968,983
128
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. 130
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. 135
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. 142
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. 146
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. 148
Sources: Unless otherwise noted, the information in these schedules is derived from the Comprehensive Annual
Financial Reports for the relevant year.
129
City of Muskegon
NET ASSETS/NET POSITION BY COMPONENT
Last Ten Fiscal Years
2012 2013 (a) 2014 2015 (b) 2016 2017 2018 (c) 2019 2020 2021
Governmental Activities
Net Investment in Capital Assets $ 66,862,806 $ 63,842,092 $ 63,731,255 $ 63,514,691 $ 64,326,891 $ 62,520,466 $ 61,267,518 $ 66,734,006 $ 70,274,679 $ 72,200,515
Restricted 3,526,343 4,572,848 4,023,895 4,807,531 4,140,342 3,777,410 6,138,596 5,519,207 4,459,799 5,003,269
Unrestricted 12,836,573 13,299,523 12,811,852 491,914 (4,142,119) (5,566,349) (8,350,634) (14,355,143) (28,084,776) (29,065,065)
Total Governmental Net Assets/Net Position $ 83,225,722 $ 81,714,463 $ 80,567,002 $ 68,814,136 $ 64,325,114 $ 60,731,527 $ 59,055,480 $ 57,898,070 $ 46,649,702 $ 48,138,719
Business-type Activities
Net Investment in Capital Assets $ 40,147,600 $ 40,032,858 $ 39,365,043 $ 39,231,223 $ 39,013,529 $ 38,114,686 $ 38,549,547 $ 41,741,666 $ 44,543,391 $ 54,257,461
Restricted 672,000 599,500 599,500 599,500 599,500 599,500 599,500 599,500 599,500 822,000
Unrestricted 8,961,713 8,491,848 8,377,093 6,423,540 5,762,272 6,382,906 6,041,091 2,424,616 (2,353,801) (873,805)
Total Business-type Activities Net Assets/Net Position $ 49,781,313 $ 49,124,206 $ 48,341,636 $ 46,254,263 $ 45,375,301 $ 45,097,092 $ 45,190,138 $ 44,765,782 $ 42,789,090 $ 54,205,656
Primary Government
Net Investment in Capital Assets $ 107,010,406 $ 103,874,950 $ 103,096,298 $ 102,745,914 $ 103,340,420 $ 100,635,152 $ 99,817,065 $ 108,475,672 $ 114,818,070 $ 126,457,976
Restricted 4,198,343 5,172,348 4,623,395 5,407,031 4,739,842 4,376,910 6,738,096 6,118,707 5,059,299 5,825,269
Unrestricted 21,798,286 21,791,371 21,188,945 6,915,454 1,620,153 816,557 (2,309,543) (11,930,527) (30,438,577) (29,938,870)
Total Primary Government Net Assets/Net Position $ 133,007,035 $ 130,838,669 $ 128,908,638 $ 115,068,399 $ 109,700,415 $ 105,828,619 $ 104,245,618 $ 102,663,852 $ 89,438,792 $ 102,344,375
130
(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
2012 2013 (a) 2014 2015 (b) 2016 2017 2018 (c) 2019 2020 2021
EXPENSES
Governmental Activities
Public representation $ 866,809 $ 893,981 $ 1,030,006 $ 939,907 $ 1,107,551 $ 1,113,897 $ 1,347,618 $ 1,336,014 $ 1,501,079 $ 1,603,410
Administrative services 566,161 565,307 543,425 614,757 663,077 679,139 507,275 800,887 962,981 826,344
Financial services 2,399,147 2,241,061 2,171,958 2,547,766 2,331,236 2,483,519 1,995,426 2,700,775 3,007,018 5,039,787
Public safety 13,213,251 12,987,842 12,946,466 14,243,233 17,118,742 16,910,473 12,404,126 20,433,642 25,982,246 18,249,379
Public works 2,958,367 3,201,806 3,361,422 3,183,627 3,109,454 3,551,230 3,471,618 4,438,358 4,581,526 4,025,982
Highways, streets and bridges 6,568,448 6,672,374 7,053,326 7,165,703 7,251,882 6,996,540 6,917,260 7,185,642 7,593,019 6,862,862
Community and economic development 2,447,373 2,499,404 2,417,518 2,712,131 5,223,431 3,738,566 5,015,160 2,890,216 5,359,282 4,999,907
Culture and recreation 1,601,316 1,592,358 1,671,185 1,806,790 3,551,692 3,918,814 3,994,582 4,541,739 5,269,578 4,507,120
General administration 791,197 322,348 366,634 389,248 326,452 301,287 376,112 302,582 389,863 404,303
Interest on long-term debt 283,186 291,535 277,345 271,607 248,223 172,591 165,023 151,304 732,065 1,112,166
Total Governmental Activities Expenses 31,695,255 31,268,016 31,839,285 33,874,769 40,931,740 39,866,056 36,194,200 44,781,159 55,378,657 47,631,260
Business-type Activities
Water 5,974,173 6,228,788 6,016,192 6,047,244 6,750,826 7,206,564 7,090,770 7,752,703 8,437,862 8,612,574
Sewer 6,202,359 7,226,839 7,582,602 8,460,509 8,669,469 8,876,690 8,093,752 9,119,941 9,902,515 8,084,729
Marina and launch ramp 310,174 426,553 503,997 305,990 327,832 336,912 377,614 430,431 529,007 515,025
Total Business-type Activities Expenses 12,486,706 13,882,180 14,102,791 14,813,743 15,748,127 16,420,166 15,562,136 17,303,075 18,869,384 17,212,328
Total Primary Government Expenses $ 44,181,961 $ 45,150,196 $ 45,942,076 $ 48,688,512 $ 56,679,867 $ 56,286,222 $ 51,756,336 $ 62,084,234 $ 74,248,041 $ 64,843,588
PROGRAM REVENUES
Governmental Activities
Charges for Services
Public representation $ 196,886 $ 173,739 $ 189,444 $ 188,638 $ 226,559 $ 228,767 $ 232,736 $ 250,931 $ 253,511 $ 280,395
Administrative services 270,886 268,535 325,937 415,308 474,737 572,739 539,178 604,290 538,791 504,281
131
Financial services 881,229 830,919 871,632 823,547 925,474 895,924 903,322 921,748 913,968 988,501
Public safety 1,136,942 1,133,666 1,407,722 1,218,644 1,248,911 1,824,114 2,794,347 2,292,158 2,290,640 2,207,996
Public works 480,487 671,494 796,739 571,426 379,877 646,876 743,110 691,312 835,149 828,098
Highways, streets and bridges 230,241 245,609 351,962 258,475 234,861 256,190 188,248 191,883 193,267 187,478
Community and economic development 617,379 432,240 477,486 576,863 444,632 706,195 348,933 786,120 769,860 912,247
Culture and recreation 315,010 606,818 535,211 368,168 1,229,067 1,463,839 1,651,304 1,853,547 2,124,968 1,976,029
General administration 116,690 287,729 50,728 48,764 52,512 37,892 38,549 40,400 59,537 65,592
Operating grants and contributions 4,651,576 4,681,345 4,664,098 5,071,239 5,330,825 5,208,818 6,478,526 6,892,530 7,398,202 9,839,245
Capital grants and contributions 1,568,005 886,108 1,408,424 3,496,623 3,804,656 862,074 2,305,620 4,015,097 4,064,216 2,901,176
Total Governmental Program Revenues 10,465,331 10,218,202 11,079,383 13,037,695 14,352,111 12,703,428 16,223,873 18,540,016 19,442,109 20,691,038
Business-type Activities
Water 5,254,095 5,890,614 6,099,480 6,375,869 7,485,013 7,430,314 7,445,669 7,946,983 8,316,552 8,752,570
Sewer 6,455,634 7,058,315 6,633,911 6,363,808 6,305,554 7,620,208 8,217,497 8,098,828 8,397,838 9,298,156
Marina and launch ramp 208,370 234,229 228,339 255,638 287,547 278,753 325,917 298,312 74,659 178,706
Operating grants and contributions - 6,188 - - - 2,436 42,531 510,533 94,462 -
Capital grants and contributions - 88,046 327,240 474,681 765,363 784,969 - - - 10,354,544
Total Business-type program revenues 11,918,099 13,277,392 13,288,970 13,469,996 14,843,477 16,116,680 16,031,614 16,854,656 16,883,511 28,583,976
Total Primary Government program revenues $ 22,383,430 $ 23,495,594 $ 24,368,353 $ 26,507,691 $ 29,195,588 $ 28,820,108 $ 32,255,487 $ 35,394,672 $ 36,325,620 $ 49,275,014
NET (EXPENSE) REVENUE
Governmental Activities $ (21,229,924) $ (21,049,814) $ (20,759,902) $ (20,837,074) $ (26,579,629) $ (27,162,628) $ (19,970,327) $ (26,241,143) $ (35,936,548) $ (26,940,222)
Business-type Activities (568,607) (604,788) (813,821) (1,343,747) (904,650) (303,486) 469,478 (448,419) (1,985,873) 11,371,648
Total Primary Government net expense $ (21,798,531) $ (21,654,602) $ (21,573,723) $ (22,180,821) $ (27,484,279) $ (27,466,114) $ (19,500,849) $ (26,689,562) $ (37,922,421) $ (15,568,574)
City of Muskegon
CHANGES IN NET ASSETS/NET POSITION
Last Ten Fiscal Years
2012 2013 (a) 2014 2015 (b) 2016 2017 2018 (c) 2019 2020 2021
GENERAL REVENUES AND OTHER CHANGES IN NET ASSETS/NET POSITION
Governmental Activities
Property taxes $ 8,383,224 $ 7,592,847 $ 7,383,236 $ 7,894,189 $ 8,366,212 $ 8,389,243 $ 8,450,103 $ 8,230,573 $ 8,466,886 $ 8,813,155
Income taxes 7,663,534 8,057,145 7,762,719 8,478,231 8,386,775 8,707,279 8,995,294 8,939,887 9,437,451 9,609,218
Franchise fees 342,376 358,785 358,754 369,965 372,117 378,955 368,495 380,343 361,405 374,219
Grants and contributions not restricted for specific programs 3,577,848 3,700,871 3,813,221 3,989,178 4,051,050 4,630,111 4,955,168 5,102,602 5,276,036 6,427,138
Unrestricted investment earnings 100,073 73,157 146,590 99,733 189,408 106,653 92,771 546,533 568,408 229,177
Miscellaneous 154,531 102,388 124,085 805,432 626,014 512,738 545,536 550,381 577,677 370,268
Gain on sale of capital asset 34,496 44,899 23,836 20,302 99,031 844,062 712,415 1,333,414 317 2,641,064
Transfers - - - - - - - - - (35,000)
Total Governmental Program Revenues 20,256,082 19,930,092 19,612,441 21,657,030 22,090,607 23,569,041 24,119,782 25,083,733 24,688,180 28,429,239
Business-type Activities
Unrestricted investment earnings 46,582 33,148 31,251 29,879 25,688 25,277 28,550 24,063 9,181 9,918
Transfers - - - - - - - - - 35,000
Total Business-type program revenues 46,582 33,148 31,251 29,879 25,688 25,277 28,550 24,063 9,181 44,918
Total Primary Government program revenues $ 20,302,664 $ 19,963,240 $ 19,643,692 $ 21,686,909 $ 22,116,295 $ 23,594,318 $ 24,148,332 $ 25,107,796 $ 24,697,361 $ 28,474,157
CHANGE IN NET ASSETS/NET POSITION
Governmental Activities $ (973,842) $ (1,119,722) $ (1,147,461) $ 819,956 $ (4,489,022) $ (3,593,587) $ 4,149,455 $ (1,157,410) $ (11,248,368) $ 1,489,017
Business-type Activities (522,025) (571,640) (782,570) (1,313,868) (878,962) (278,209) 498,028 (424,356) (1,976,692) 11,416,566
Total Primary Government $ (1,495,867) $ (1,691,362) $ (1,930,031) $ (493,912) $ (5,367,984) $ (3,871,796) $ 4,647,483 $ (1,581,766) $ (13,225,060) $ 12,905,583
(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.
132
(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
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
General fund
Nonspendable $ 178,468 $ 447,341 $ 300,952 $ 220,178 $ 232,332 $ 209,353 $ 222,458 $ 241,684 $ 280,986 $ 269,920
Restricted - - - - - - - - - 66,965
Committed - - - - - - - - - 39,000
Assigned 2,075,738 2,292,495 1,700,000 1,700,000 1,700,000 1,700,000 1,700,000 1,700,000 1,700,000 1,700,000
Unassigned 4,265,839 4,613,722 5,495,145 5,883,318 6,098,977 6,148,292 6,469,108 6,563,511 5,920,869 9,121,955
Total general fund $ 6,520,045 $ 7,353,558 $ 7,496,097 $ 7,803,496 $ 8,031,309 $ 8,057,645 $ 8,391,566 $ 8,505,195 $ 7,901,855 $ 11,197,840
All other governmental funds
Nonspendable $ 1,568,318 $ 1,547,793 $ 1,556,347 $ 2,073,747 $ 1,597,371 $ 1,716,825 $ 1,589,699 $ 1,624,737 $ 1,663,979 $ 1,709,000
Restricted 3,485,073 2,749,396 2,305,385 3,159,130 2,995,610 2,726,754 5,130,188 4,621,126 3,842,461 4,397,502
Assigned 2,055,904 2,087,359 1,729,457 2,146,050 1,373,669 3,510,747 2,619,342 1,823,959 9,764,600 1,907,590
Unassigned (191,282) (82,048) (100,054) - - - - - (1,601,331) (2,919,404)
Total all other governmental funds $ 6,918,013 $ 6,302,500 $ 5,491,135 $ 7,378,927 $ 5,966,650 $ 7,954,326 $ 9,339,229 $ 8,069,822 $ 13,669,709 $ 5,094,688
SOURCE: The information in these schedules
(unless otherwise noted) is derived from the
133
comprehensive annual financial reports for the
relevant year.
City of Muskegon
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Revenues
Taxes $ 15,506,668 $ 14,832,027 $ 14,954,904 $ 15,830,137 $ 16,178,761 $ 16,667,272 $ 16,877,055 $ 16,582,030 $ 17,253,857 $ 17,700,658
Intergovernmental 9,899,379 9,403,554 9,945,065 12,301,594 11,711,788 10,743,434 13,488,014 15,776,333 16,777,402 18,131,093
Charges for services 2,596,328 2,769,227 2,569,335 2,468,889 3,468,938 3,918,217 4,229,797 4,430,419 4,563,652 4,898,325
Other 3,237,189 2,795,952 3,256,324 4,003,105 3,868,958 4,005,126 5,251,208 5,312,773 5,745,006 5,745,273
Total revenues 31,239,564 29,800,760 30,725,628 34,603,725 35,228,445 35,334,049 39,846,074 42,101,555 44,339,917 46,475,349
Expenditures
Public representation 867,762 892,113 1,031,984 930,788 1,064,503 1,080,032 1,383,573 1,281,107 1,379,406 1,556,327
Administrative services 515,988 508,130 497,025 554,330 577,454 624,284 537,913 739,301 844,270 783,403
Financial services 2,407,131 2,196,917 2,197,651 2,476,740 2,068,208 2,236,941 2,191,245 2,394,866 2,358,848 4,810,339
Public safety 12,963,122 12,724,094 12,987,898 13,285,004 13,476,557 14,086,619 15,156,977 16,131,196 16,820,356 14,641,568
Public works 2,835,000 2,878,328 2,918,305 2,876,576 2,864,878 3,206,050 3,377,174 4,176,904 4,187,956 3,604,722
Highways, streets and bridges 2,756,010 2,815,337 3,011,611 2,986,909 3,102,391 3,096,875 4,554,968 2,963,498 2,965,598 2,666,529
Community and economic development 2,850,593 2,578,073 2,687,933 2,957,071 5,415,436 3,878,547 3,962,759 2,930,725 4,986,000 5,281,825
Culture and recreation 1,265,743 1,248,174 1,308,481 1,444,471 3,100,338 3,523,178 3,713,177 4,050,986 4,662,534 3,836,817
Other governmental functions 770,910 299,812 643,666 369,408 305,807 280,416 355,241 281,711 371,461 380,232
Debt service
134
Principal 289,597 395,211 402,492 417,842 428,199 283,563 288,934 294,313 818,285 2,813,804
Interest 268,315 292,554 278,412 272,946 257,516 211,242 197,723 189,905 543,740 943,216
Issuance costs - - - - 97,578 - - - 70,525 140,750
Capital outlay 2,948,610 3,230,586 3,577,837 3,992,111 3,867,579 2,328,615 3,134,369 9,363,862 21,498,055 19,695,829
Total expenditure 30,738,781 30,059,329 31,543,295 32,564,196 36,626,444 34,836,362 38,854,053 44,798,374 61,507,034 61,155,361
Excess of revenues over (under) expenditures 500,783 (258,569) (817,667) 2,039,529 (1,397,999) 497,687 992,021 (2,696,819) (17,167,117) (14,680,012)
Other financing sources (uses)
Transfers in 510,907 1,356,229 743,035 853,910 1,563,094 1,805,000 1,370,000 1,210,236 2,017,077 895,000
Transfers out (613,953) (784,275) (771,081) (942,933) (1,638,094) (1,818,000) (1,385,000) (1,210,236) (2,037,077) (1,555,000)
Bonds issued 2,000,000 - - - 97,578 - - - 21,691,740 7,152,424
Sale of capital assets 113,981 190,263 176,887 244,685 190,957 1,529,325 741,803 1,541,041 491,924 2,908,552
Total other financing sources (uses) 2,010,935 762,217 148,841 155,662 213,535 1,516,325 726,803 1,541,041 22,163,664 9,400,976
Net change in fund balances $ 2,511,718 $ 503,648 $ (668,826) $ 2,195,191 $ (1,184,464) $ 2,014,012 $ 1,718,824 $ (1,155,778) $ 4,996,547 $ (5,279,036)
Debt service as a percentage of noncapital
expenditures 2.01% 2.56% 2.43% 2.42% 2.09% 1.52% 1.36% 1.37% 3.40% 9.06%
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
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%
2020 8,116,143 18.3% 9,137,714 20.6% 16,777,402 37.8% 4,563,652 10.3% 2,420,604 5.5% 412,575 0.9% 742,567 1.7% 2,169,260 4.9% 44,339,917 5.3%
2021 8,443,832 18.2% 9,256,826 19.9% 18,131,093 39.0% 4,898,325 10.5% 2,246,375 4.8% 594,813 1.3% 477,559 1.0% 2,426,526 5.2% 46,475,349 4.8%
SOURCE: The information in these schedules (unless otherwise noted) is derived from the comprehensive annual financial reports for the relevant year.
135
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
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%
2019 346,233,797 - 120,836,165 48,156,907 515,226,869 61,993,800 577,220,669 6,561,033 3,146,800 - 9,707,833 586,928,502 13.0865 87.80%
2020 362,796,641 - 125,649,743 48,231,815 536,678,199 67,398,400 604,076,599 14,874,922 2,612,700 - 17,487,622 621,564,221 13.0865 83.40%
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
Year Residential Agriculture Commercial Industrial Property Property Ad Valorem Property Property Property IFT and CFT Valuation Value
136
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
2019 409,745,000 - 135,884,102 51,070,400 596,699,502 61,981,500 658,681,002 6,649,100 3,146,800 - 9,795,900 668,476,902 1,336,953,804
2020 461,026,400 - 146,950,200 52,388,900 660,365,500 67,388,800 727,754,300 14,929,600 2,612,700 - 17,542,300 745,296,600 1,490,593,200
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
Current Year and Ten Years Ago
6/30/2021 6/30/2012
Percent of Percent of
Taxable Total Taxable Taxable Total Taxable
Taxpayer Valuation Rank Valuation Valuation Rank Valuation
Consumers Energy $ 19,074,754 1 2.99% $ 53,088,067 1 7.9%
DTE Gas Company 12,833,825 2 2.01% 5,026,600 5 0.8%
James Street Capital Holdings 9,563,718 3 1.50%
Muskegon SC Holdings LLC 6,066,243 4 0.95% 4,503,400 6 0.7%
Michigan Electric Transmission 4,871,200 5 0.76% 4,381,900 7 0.7%
Glen Oaks Apartments LLC 3,559,381 6 0.56% 4,280,600 8 0.6%
Mercy Health Partners 3,327,016 7 0.52%
137
Core Sherman LLC 3,116,500 8 0.49%
Verplank Port Facility LLC 2,770,017 9 0.43%
Hinman Lake LLC 2,886,824 10 0.45%
Adac Plastics 5,648,200 4 0.8%
Esco Company 6,793,300 2 1.0%
GE Aviation 6,695,200 3 1.0%
Sappi (S.D. Warren Co.) 3,943,179 9 0.6%
Lorin Industries 3,825,278 10 0.6%
Total - 10 Largest 68,069,478 10.67% 98,185,724 14.7%
Total - All Other 570,103,144 89.33% 571,318,953 85.3%
$ 638,172,622 100.0% $ 669,504,677 100.0%
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
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
2019 10.0000 0.0865 3.0000 13.0865 2.4000 0.4522
2020 9.9930 0.0824 2.9979 13.0733 2.3997 0.4532
Overlapping - County-Wide Rates
Muskegon Intermediate Special Vocational Community MAISD Community
Year County School Education Education College Gen Ed College Debt
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
2019 6.8957 0.4597 2.2987 0.9996 2.2037 1.0000 0.3400
2020 6.8947 0.4593 2.2968 0.9988 2.2034 0.9992 0.3400
Overlapping - School District Grand Total
State Non-
Year Operating Debt Total Education Homestead Homestead
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
2019 18.0000 8.3600 26.3600 6.0000 44.4961 62.4961
2020 17.9838 8.3581 26.3419 6.0000 44.4765 62.4603
138
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
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%
2019 9,737,757 8,873,258 91.1% 821,601 9,694,859 99.6% - 20,987 15,355 0.37%
2020 9,943,231 9,114,832 91.7% 749,195 9,864,027 99.2% - 35,111 31,560 0.67%
139
SOURCE: City of Muskegon Treasurer' Office
City of Muskegon
TOTAL INCOME TAX COLLECTED AND NUMBER OF RETURNS FILED - GRAPHICAL
Last Ten Fiscal Years
Income Tax 2011 ‐ 2021
$10,000,000
$9,000,000
$8,000,000
$7,000,000
$6,000,000
$5,000,000
$4,000,000
INCOME TAX $
$3,000,000
$2,000,000
$1,000,000
$‐
2010 ‐ 2011 2011 ‐ 2012 2012 ‐ 2013 2013 ‐ 2014 2014 ‐ 2015 2015 ‐ 2016 2016 ‐ 2017 2017 ‐ 2018 2018 ‐ 2019 2019‐20 2020‐21
Resident $2,566,198 $2,755,079 $2,692,211 $2,892,906 $3,070,581 $2,925,036 $3,284,777 $3,278,759 $3,457,902 $3,655,458 $3,531,695
Non‐Resident 3,136,464 3,367,318 3,290,480 3,535,773 3,752,932 3,575,045 4,014,691 4,007,372 4,226,325 4,467,781 4,316,516
Other 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 1,014,475 1,408,615
Total Income Tax $6,599,753 $7,412,804 $7,506,472 $7,927,812 $8,274,666 $8,151,902 $8,610,842 $8,758,648 $8,691,673 $9,137,714 $9,256,826
140
FISCAL YEAR
NUMBER OF RETURNS 2011 ‐ 2021
25,000
20,000
1,750
1,750
1,750 1,750 1,750 1,750 1,750 1,650
1,650
15,000 1,650
1,650
11,612 Other
11,259 11,009
10,997 10,631 10,713 10,578 10,278 10,256 Non‐Resident
RETURNS
10,000
9,426 Resident
8,301
5,000
6,326 5,690 5,110 5,463 5,458 5,337 5,464 5,352 5,493 4,852 4,302
‐
2010 ‐ 2011 2011 ‐ 2012 2012 ‐ 2013 2013 ‐ 2014 2014 ‐ 2015 2015 ‐ 2016 2016 ‐ 2017 2017 ‐ 2018 2018 ‐ 2019 2019‐20 2020‐21
FISCAL YEAR
City of Muskegon
TOTAL INCOME TAX COLLECTED AND NUMBER OF RETURNS FILED - DATA
Last Ten Fiscal Years
Income Tax 2011 ‐ 2021
Year 2010 ‐ 2011 2011 ‐ 2012 2012 ‐ 2013 2013 ‐ 2014 2014 ‐ 2015 2015 ‐ 2016 2016 ‐ 2017 2017 ‐ 2018 2018 ‐ 2019 2019‐20 2020‐21
Resident $ 2,566,198 $ 2,755,079 $ 2,692,211 $ 2,892,906 $ 3,070,581 $ 2,925,036 $ 3,284,777 $ 3,278,759 $ 3,457,902 $ 3,655,458 $ 3,531,695
Non‐Resident 3,136,464 3,367,318 3,290,480 3,535,773 3,752,932 3,575,045 4,014,691 4,007,372 4,226,325 4,467,781 4,316,516
Other 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 1,014,475 1,408,615
Total Income Tax $ 6,599,753 $ 7,412,804 $ 7,506,472 $ 7,927,812 $ 8,274,666 $ 8,151,902 $ 8,610,842 $ 8,758,648 $ 8,691,673 $ 9,137,714 $ 9,256,826
Number of Returns 2010‐2020
Year 2010 ‐ 2011 2011 ‐ 2012 2012 ‐ 2013 2013 ‐ 2014 2014 ‐ 2015 2015 ‐ 2016 2016 ‐ 2017 2017 ‐ 2018 2018 ‐ 2019 2019‐20 2020‐21
Resident 6,326 5,690 5,110 5,463 5,458 5,337 5,464 5,352 5,493 4,852 4,302
Non‐Resident 11,612 11,259 10,997 11,009 10,631 10,713 10,578 10,278 10,256 9,426 8,301
Other 1,750 1,750 1,750 1,750 1,750 1,750 1,750 1,650 1,650 1,650 1,650
Total Returns 19,688 18,699 17,857 18,222 17,839 17,800 17,792 17,280 17,399 15,928 14,253
141
City of Muskegon
RATIO OF OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
Governmental Activities Business-Type Activities
General
Obligation Installment Total
Limited Tax Purchase Governmental Revenue Total Business- Total Primary Per
Year Bonds Agreements State Loans Activities Bonds State Loans Type Activities Government Capita
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
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
142
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
2020 24,059,753 2,123,804 - 26,183,557 - 6,607,956 6,607,956 32,791,513 854
2021 30,496,677 - - 30,496,677 - 9,056,453 9,056,453 39,553,130 1,051
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, 2021
Total Debt Debt Supported by City
Name of Governmental Unit Outstanding Self Supporting General Revenues
Direct Debt
City of Muskegon:
Revenue Bonds $ 9,056,453 $ 9,056,453 $ -
Capital Improvement Bonds 30,496,677 - 30,496,677
Component Unit Debt:
Local Development Finance Authority 1,352,248 1,352,248 -
Total City Direct Debt $ 40,905,378 $ 10,408,701 $ 30,496,677
City Share as
Gross Percent of Gross Net
Overlapping Debt
Muskegon School District $ 4,965,000 95.65% $ 4,749,023
Orchard View School District 37,410,784 17.29% 6,468,325
Reeth's Puffer School District 62,747,604 0.91% 571,003
Hackley Public Library 1,960,000 95.65% 1,874,740
Muskegon County 113,756,041 12.60% 14,333,261
Muskegon Community College 30,230,000 12.66% 3,827,118
Total Overlapping Debt $ 251,069,429 31,823,469
Total City Direct and Overlapping Debt $ 62,320,146
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.
143
City of Muskegon
LEGAL DEBT MARGIN INFORMATION
Last Ten Fiscal Years
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Debt Limit $ 73,585,150 $ 68,555,700 $ 61,706,477 $ 61,510,980 $ 60,962,090 $ 61,333,841 $ 64,124,907 $ 101,083,635 $ 108,732,428 $ 128,830,259
Total net debt applicable to limit 14,375,253 13,655,042 12,847,550 11,969,708 11,313,794 10,290,785 9,240,855 8,510,021 27,943,934 31,848,925
Legal debt margin $ 59,209,897 $ 54,900,658 $ 48,858,927 $ 49,541,272 $ 49,648,296 $ 51,043,056 $ 54,884,052 $ 92,573,614 $ 80,788,494 $ 96,981,334
Total net debt applicable to the limit as 19.54% 19.92% 20.82% 19.46% 18.56% 16.78% 14.41% 8.42% 25.70% 24.72%
a percentage of debt limit
Legal Debt Margin Calculation for 2021:
Assessed Valuation: $ 1,288,302,587
Legal Debt Limit (10% ) 128,830,259
Total Indebtedness: $ 40,905,378
Debt not Subject to Limitation:
Paid by Special Assessment -
Revenue Bonds (9,056,453)
Debt Subject to Limitation 31,848,925
Legal Debt Margin $ 96,981,334
144
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
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
2020 8,417,771 6,374,033 2,043,738 745,000 109,916 854,916 2.39
2021 8,762,308 6,481,996 2,280,312 760,000 107,860 867,860 2.63
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
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
2020 $ 8,399,047 $ 9,307,397 $ (908,350) $ - $ - $ - #DIV/0!
2021 9,298,294 7,481,042 1,817,252 - 3,151 3,151 576.72
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.
145
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
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%
2019 38,401 898,750,775 23,404 35.4 3,589 1,295 94,667,004 4.2%
2020 38,401 921,219,545 23,989 36.3 3,625 1,233 92,319,998 17.7%
2021 37,633 925,365,524 24,589 35.8 3,472 1,266 53,810,437 5.0%
146
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
2021 2012
Percentage Percentage
of total of total
City City
Employer Employees Rank employment Employees Rank employment
Mercy General Health Partners 4,003 1 34.26% 3,657 1 24.7%
ADAC Automotive 1,168 2 10.00% 592 5 4.0%
County of Muskegon 990 3 8.47% 980 3 6.6%
G.E. Aviation (formerly Johnson Technology Inc.) 624 4 5.34% 327 10
Port City Group Companies 421 5 3.60%
KL Outdoors 375 6 3.21%
Muskegon Public School District 360 7 3.08% 1,570 2 10.6%
Muskegon Area Intermediate School District 355 8 3.04%
147
Knoll Inc 270 9 2.31% 450 6 3.0%
Muskegon Community College 214 10 1.83% 446 7 3.0%
State of Michigan 772 4 5.2%
Baker College 400 8 2.7%
SAF Holland USA 335 9 2.3%
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 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Administration 0.40 0.40 0.40 - - - - - - -
Affirmative Action 1.10 1.10 1.10 1.30 1.30 1.46 0.40 1.00 1.00 1.00
Cemetaries 1.75 1.25 1.25 1.25 1.25 1.25 1.25 1.25 2.25 2.25
City Clerk & Elections 3.00 3.00 3.00 3.00 3.00 3.54 3.80 3.80 4.80 5.80
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 0.55 0.55 0.55 0.55 0.55 0.55 0.55 0.55 1.05 1.00
City Manager's Office 2.25 2.25 2.25 2.05 2.05 1.75 2.75 2.75 2.75 3.30
City Treasurer's Office 5.00 5.00 4.50 5.50 5.50 5.50 5.50 5.50 5.50 5.30
Civil Service - - - - - - - -
Environmental Services 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 - 0.20 1.20 1.20 0.70
Finance Administration 3.00 2.00 2.00 3.00 3.00 3.00 3.60 3.00 3.45 3.70
Fire 35.00 28.00 28.83 32.00 35.00 35.00 35.00 26.00 29.00 29.50
Fire Safety Inspections 6.00 6.00 0.83 - - - - -
General Recreation - - - - - - - -
Income Tax Administration 5.00 5.00 4.50 3.50 3.50 3.50 3.50 3.50 3.50 3.70
Information Systems 3.00 3.00 3.00 3.00 3.00 3.00 3.50 3.50 3.50 3.50
Parks 6.05 6.05 6.00 6.00 6.00 7.05 7.05 10.05 10.05 10.05
Planning, Zoning & Economic Development 3.00 3.00 3.00 3.40 3.40 3.45 3.45 5.45 6.00 7.00
148
Police 88.00 88.00 87.34 88.00 88.00 88.00 88.00 89.00 89.00 91.00
Sanitation 0.20 0.20 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 11.70 10.70 10.70 10.70 10.70 10.70 10.70 12.20 12.20 13.20
MVH-Local Streets 6.70 6.70 6.70 6.70 6.70 6.70 6.70 7.20 7.20 7.20
Community Development 4.00 4.00 4.00 4.00 4.00 4.00 3.55 3.55 4.30 5.30
Home Program - - - - - - - - -
Lead Program - - - - - - - - -
Sewer Maintenance 9.75 9.75 9.80 9.80 9.80 9.80 9.80 9.80 10.80 10.95
Water Filtration 9.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 11.00 12.15
Water Maintenance 11.75 11.75 11.75 11.75 11.75 11.75 11.75 11.75 12.75 14.90
Hartshorn Marina Fund 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30
Mercy Health Arena - - - - - - - - 3.00 6.00
Public Service Building 7.95 8.45 8.45 8.50 8.50 8.50 8.50 8.50 8.75 8.75
Engineering 4.95 4.95 4.95 4.95 4.95 4.95 4.95 5.95 5.20 4.25
Equipment 6.25 6.25 6.25 6.25 6.25 6.25 6.25 6.25 6.25 6.25
241.00 233.00 227.00 228.00 231.00 232.45 233.50 232.50 245.25 257.50
SOURCE: City of Muskegon Finance Department
City of Muskegon
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
Function/Program 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Administrative Services
Elections
Number of registered voters 26,324 26,098 26,025 24,014 24,005 24,612 26,136 25,182 28,127 27,889
Number of votes cast:
Last general election 1,933 13,487 3,029 7,763 2,547 13,179 15,271 11,407 3,105 15,156
Last city election 1,933 2,131 3,029 7,763 2,547 13,179 2,254 1,938 3,105 2,968
Percentage of registered voters voting:
Last general election 7% 52% 12% 32% 11% 54% 58% 45% 11% 67%
Last city election 7% 8% 12% 32% 11% 54% 9% 8% 11% 12%
Financial Services
Property Tax Bills 15,261 15,291 15,211 14,528 14,611 14,243 14,229 14,180 15,090 15,117
Income Tax Returns 18,699 17,857 18,222 17,839 17,800 17,792 17,280 17,399 15,928 14,253
Paper Check Issued to Vendors 3,746 1,677 1,404 1,527 1,608 1,675 1,782 1,863 1,946 1,676
Electronic Payments to Vendors 1,334 1,251 1,579 1,471 1,849 1,998 2,104 2,307 2,494 2,465
149
Public Safety
Fire Protection
Number of firefighter and officer positions 36 41 38 35 35 35 23 29 26 29
Number of emergency calls 4,676 4,563 4,354 4,881 4,938 4,895 4,948 5,106 5,147 4,203
Police Protection
Number of sworn officer positions 79 79 76 76 76 75 79 80 80 89
Part I (Major) Crimes 2,772 2,647 2,240 2,107 1,989 2,816 2,357 1,728 1,621 1,442
Public Works
Refuse Collected (Tons per Year) 10,153 9,958 10,217 10,512 10,994 11,009 10,801 10,753 11,534 12,289
Recyclables Collected (Tons per Year) - - - - - - - - 160 224
Water & Sewer
Number of consumers 13,109 13,144 13,086 13,223 13,307 13,248 13,104 13,343 13,422 12,660
Average daily water consumption (GPD) 7,700,000 7,651,000 7,666,000 8,293,570 11,027,945 10,947,233 9,559,304 10,867,590 10,674,712 7,570,000
Water main breaks repaired 5 11 30 15 16 12 15 11 17 13
Sewer flows (Millions Gallons per Year) 1,695 1,777 1,833 2,013 1,794 1,815 1,832 2,048 2,138 1,596
Sewer Service Calls 522 508 532 501 521 462 451 443 475 541
SOURCE: City of Muskegon Departments
City of Muskegon
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
Function/Program 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
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 196.95 196.95 196.95 196.95 196.95 196.95 196.95 197.19 187.34 187.34
Number of streetlights 2,838 2,838 2,838 2,838 2,900 2,984 2,967 2,930 2,995 2,995
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 2
Sewer
Sanitary sewers (miles) 177.04 177.04 177.04 177.04 177.04 177.04 177.04 177.04 177.04 176.69
150
Storm sewers (miles) 184.35 184.35 184.25 184.35 184.35 184.35 184.35 184.35 184.35 147.58
Water
Water mains (miles) 195.40 195.95 195.95 195.95 195.95 195.95 195.95 195.27 195.27 213.92
SOURCE: City of Muskegon Departments
SINGLE AUDIT OF FEDERAL FINANCIAL ASSISTANCE PROGRAMS
151
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, 2021, 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 9, 2021.
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.
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. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough
to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section
and was not designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies. Given these limitations, during our audit, we did not identify any deficiencies in internal
control that we consider to be material weaknesses. However, material weaknesses may exist that have not been
identified.
Grand Haven | Grand Rapids | Hart | Muskegon
www.brickleydelong.com
152
BRICKLEY DELONG
City Commission
City of Muskegon
Page 2
Compliance and 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
financial statements. 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.
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 9, 2021
153
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, 2021. City of Muskegon’s major federal programs are identified in
the Summary of Auditor’s Results section of the accompanying Schedule of Findings and Questioned Costs.
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.
Grand Haven | Grand Rapids | Hart | Muskegon
www.brickleydelong.com
154
BRICKLEY DELONG
City Commission
City of Muskegon
Page 2
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, 2021.
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 9, 2021
155
City of Muskegon
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the year ended June 30, 2021
CFDA/ Accrued Cash or Accrued
Assistance Program or (Unearned) Adjustments Payments In- Amount of (Unearned) Passed
Federal Grantor/Pass-Through Grantor/ Listing Award Revenue and Kind Received Grant Revenue Through to
Program or Cluster Title/Identifying Number Number Amount July 1, 2020 Transfers (Cash Basis) Expenditures June 30, 2021 Subrecipents Notes
U.S. Department of Housing and Urban Development
Direct programs
CDBG - Entitlement Grants Cluster
Community Development Block Grants/Entitlement Grants 14.218
B-14-MC-26-0026 $ 897,025 $ - $ - $ - $ 17,403 $ 17,403 $ -
B-16-MC-26-0026 886,662 - - 1,125 1,125 - -
B-17-MC-26-0026 871,542 - - 3,626 3,626 - -
B-18-MC-26-0026 937,658 - - 126,527 126,527 - -
B-19-MC-26-0026 973,451 11,131 - 42,179 39,452 8,404 -
B-20-MC-26-0026 994,698 - - 644,566 698,971 54,405 -
COVID-19 - B-20-MW-26-0026 794,564 - - 154,883 182,738 27,855 150,000
Program Income 58,212 - - 58,212 58,212 - -
Total CDBG - Entitlement Grants Cluster 6,413,812 11,131 - 1,031,118 1,128,054 108,067 150,000
Home Investment Partnerships Program 14.239
M-15-MC-26-0215 268,639 - - 4,334 4,334 - -
M-17-MC-26-0215 249,537 - - 5,343 5,343 - -
156
M-18-MC-26-0215 327,681 - - 12,421 12,421 - -
M-19-MC-26-0215 334,818 7,417 - 22,026 14,609 - -
M-20-MC-26-0215 343,362 - - 16,580 18,361 1,781 -
Program Income 300,092 - - 300,092 300,092 - -
Total Home Investment Partnerships Program 1,824,129 7,417 - 360,796 355,160 1,781 -
Total U.S. Department of Housing and Urban Development 8,237,941 18,548 - 1,391,914 1,483,214 109,848 150,000
City of Muskegon
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS—CONTINUED
For the year ended June 30, 2021
CFDA/ Accrued Cash or Accrued
Assistance Program or (Unearned) Adjustments Payments In- Amount of (Unearned) Passed
Federal Grantor/Pass-Through Grantor/ Listing Award Revenue and Kind Received Grant Revenue Through to
Program or Cluster Title/Identifying Number Number Amount July 1, 2020 Transfers (Cash Basis) Expenditures June 30, 2021 Subrecipents Notes
U.S. Department of Justice
Direct programs
Coronavirus Emergency Supplemental Funding Program 16.034
COVID-19 - 2020-VD-BX-1081 $ 65,931 $ 32,602 $ - $ 65,931 $ 33,329 $ - $ -
Bulletproof Vest Partnership Program 16.607
2018 Grant 8,876 5,513 - 5,513 - - -
2019 Grant 6,944 - - 1,838 1,838 - -
15,820 5,513 - 7,351 1,838 - -
Edward Byrne Memorial Justice Assistance Grant Program 16.738
2018-DJ-BX-0619 37,971 11,507 - 11,507 - - -
2019-DJ-BX-0927 35,195 463 - 12,795 12,332 - -
2020-DJ-BX-0470 32,996 - - - 17,866 17,866 -
106,162 11,970 - 24,302 30,198 17,866 -
Criminal and Juvenile Justice and Mental Health Collaboration Program 16.745
2019-MO-BX-0006 100,000 2,221 - 31,185 33,801 4,837 -
Total direct programs 287,913 52,306 - 128,769 99,166 22,703 -
157
Passed through Michigan Department of Health and Human Services
Violence Against Women Formula Grants 16.588
E20203703-00 73,100 5,108 - 5,108 - - -
E20211656-002 177,934 - - 61,455 71,420 9,965 -
251,034 5,108 - 66,563 71,420 9,965 -
Passed through Ottawa County
Edward Byrne Memorial Justice Assistance Grant Program 16.738
2019-MU-BX-0061 15,000 15,000 - 15,000 - - -
Total U.S. Department of Justice 553,947 72,414 - 210,332 170,586 32,668 -
U.S. Department of Transportation, National Highway Safety Administration
Passed through Michigan State Police
Highway Safety Cluster
National Priority Safety Programs 20.616
Bicycle and Pedestrian Safety Initiative Grant 19,944 1,772 - 5,743 3,971 - -
U.S. Department of Treasury
Passed through Michigan Department of Treasury
Coronavirus Relief Fund 21.019
COVID-19 - Coronavirus Relief Local Government Grants 303,760 - - 303,760 303,760 - -
COVID-19 - Public Safety and Public Health Payroll Reimbursement Program 1,089,599 - - 1,089,599 1,089,599 - -
COVID-19 - First Responder Hazard Pay Premiums Program 100,000 - - 100,000 100,000 - -
Total U.S. Department of Treasury 1,493,359 - - 1,493,359 1,493,359 - -
City of Muskegon
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS—CONTINUED
For the year ended June 30, 2021
CFDA/ Accrued Cash or Accrued
Assistance Program or (Unearned) Adjustments Payments In- Amount of (Unearned) Passed
Federal Grantor/Pass-Through Grantor/ Listing Award Revenue and Kind Received Grant Revenue Through to
Program or Cluster Title/Identifying Number Number Amount July 1, 2020 Transfers (Cash Basis) Expenditures June 30, 2021 Subrecipents Notes
Environmental Protection Agency
Passed through Department of Environment, Great Lakes, and Energy
Clean Water State Revolving Fund Cluster
Capitalization Grants for Clean Water State Revolving Funds 66.458
5675-01 $ 11,500,000 $ - $ - $ 8,592,794 $ 9,090,488 $ 497,694 $ - 3
5679-01 4,715,000 - - 971,531 1,203,721 232,190 -
16,215,000 - - 9,564,325 10,294,209 729,884 -
Drinking Water State Revolving Fund Cluster
Capitalization Grants for Drinking Water State Revolving Funds 66.468
7449-01 2,000,000 - - 848,418 848,418 - - 3
7446-01 4,225,000 - - 380,250 380,250 - -
6,225,000 - - 1,228,668 1,228,668 - -
Total Environmental Protection Agency 22,440,000 - - 10,792,993 11,522,877 729,884 -
U.S. Department of Health and Human Services
Passed through Michigan Department of Health and Human Services
Children's Health Insurance Program 93.767
158
E20202333-00 880,005 84,579 - 292,580 208,001 - -
E20211485-002 943,785 - - 416,824 473,114 56,290 -
Total Department of Health and Human Services 1,823,790 84,579 - 709,404 681,115 56,290 -
Department of Homeland Security
Passed through Federal Emergency Management Agency
Disaster Grants - Public Assistance (Presidentially Declared Disasters) 97.036 27,600 - - 5,535 5,535 - -
TOTAL FEDERAL ASSISTANCE $ 34,596,581 $ 177,313 $ - $ 14,609,280 $ 15,360,657 $ 928,690 $ 150,000
The accompanying notes are an integral part of this statement.
City of Muskegon
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the year ended June 30, 2021
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, 2021. 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. Amounts expended reflect drawdown for both the year ended June 30, 2021 and June 30, 2020 in accordance with guidance from the Michigan Department of
Environment, Great Lakes, and Energy.
4. 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, 2021 and federal expenditures per the Schedule of Expenditures of Federal Awards.
159
Federal revenues per City of Muskegon financial statements
General Fund $ 1,667,916
Other governmental funds 1,811,560
3,479,476
Plus drawdowns on federal loans 11,522,877
Plus program income 358,304
Federal expenditures per the Schedule of Expenditures of Federal Awards $ 15,360,657
City of Muskegon
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the year ended June 30, 2021
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? yes X 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/Assistance Listing Number(s) Name of Federal Program/Cluster
U.S. Department of Treasury
21.019 ∙ Coronavirus Relief Fund
Environmental Protection Agency
66.458 ∙ Capitalization Grants for Clean Water
State Revolving Funds
66.468 ∙ Capitalization Grants for Drinking Water
State Revolving Funds
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
SECTION II – FINANCIAL STATEMENT FINDINGS
NONE
SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
NONE
160
CLIENT DOCUMENTS
161
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
(231)724-6705
FAX (231)724-4178 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
Comm. & Neigh.
Services
(231)724-6717 December 9, 2021
FAX (231)726-2501
Computer Info.
Technology
(231)724-4126 U.S. Department of Housing and Urban Development
FAX (231)722-4301 Washington, D.C.
Engineering
(231)724-6707
FAX (231)727-6904 City of Muskegon respectfully submits the following summary of the current status of prior audit
Finance findings contained in the single audit report for the year ended June 30, 2020 dated December 22,
(231)724-6713 2020.
FAX (231)726-2325
Fire Department SECTION II – FINANCIAL STATEMENT FINDINGS
(231)724-6795
FAX (231)724-6985
Finding 2020-001: MATERIAL WEAKNESS—Budgetary Process
Human Resources
Co. (Civil Service)
(231)724-6442 Condition: We noted a number of significant budget variances including cost centers that had
FAX (231)724-6840 expenditures in excess of the amount budgeted.
Income Tax
(231)724-6770 Recommendation: The City should review its budgetary policies and procedures to ensure a regular
FAX (231)724-6768 review of the budget is performed and budgets are amended as necessary to ensure compliance with the
Mayor’s Office Budget Act. In addition to complying with the Budget Act, this is also a good governance policy to
(231)724-6701 monitor spending and ensure that all purchases are properly budgeted and authorized.
FAX (231)722-1214
Planning/Zoning Current Status: This recommendation was implemented during the year ended June 30, 2021. No
(231)724-6702 similar finding was reported during the single audit for the year ended June 30, 2021.
FAX (231)724-6790
Police Department SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
(231)724-6750
FAX (231)722-5140
There were no findings reported in relation to major federal award programs during the single audit for
Public Works the year ended June 30, 2020.
(231)724-4100
FAX (231)722-4188
SafeBuilt Sincerely,
(Inspections)
(231)724-6715
FAX (231)728-4371
Treasurer
(231)724-6720
FAX (231)724-6768
Ken Grant
Water Billing
(231)724-6718 Finance Director
FAX (231)724-6768
Water Filtration City of Muskegon, 933 Terrace Street, P.O. Box 536, Muskegon, MI 49443-0536
(231)724-4106 http://www.shorelinecity.com
FAX (231)755-5290 162
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
(231)724-6705 CORRECTIVE ACTION PLAN
FAX (231)724-4178
Comm. & Neigh.
Services December 9, 2021
(231)724-6717
FAX (231)726-2501
Computer Info.
Technology
U.S. Department of Housing and Urban Development
(231)724-4126 Washington, D.C.
FAX (231)722-4301
Engineering
(231)724-6707 City of Muskegon respectfully submits the following Corrective Action Plan for the year ended June
FAX (231)727-6904 30, 2021.
Finance
(231)724-6713 Name and address of independent public accounting firm:
FAX (231)726-2325
Brickley DeLong, P.C.
Fire Department
(231)724-6795 P.O. Box 999
FAX (231)724-6985 Muskegon, Michigan 49443
Human Resources Audit period: June 30, 2021
Co. (Civil Service)
(231)724-6442
FAX (231)724-6840 The findings from the Schedule of Findings and Questioned Costs for the year ended June 30, 2021
provided no findings in either Section II or Section III. Accordingly, there are no matters requiring
Income Tax
(231)724-6770
corrective action as shown below.
FAX (231)724-6768
SECTION II – FINANCIAL STATEMENT FINDINGS
Mayor’s Office
(231)724-6701
FAX (231)722-1214 There were no findings in relation to the financial statement audit.
Planning/Zoning
(231)724-6702 SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
FAX (231)724-6790
Police Department
There were no findings in relation to the major federal award programs.
(231)724-6750
FAX (231)722-5140 If the U.S. Department of Housing and Urban Development has questions regarding this plan, please
Public Works call Ken Grant at (231) 724-6917.
(231)724-4100
FAX (231)722-4188
SafeBuilt Sincerely,
(Inspections)
(231)724-6715
FAX (231)728-4371
Treasurer
(231)724-6720
FAX (231)724-6768
Ken Grant
Water Billing
(231)724-6718
Finance Director
FAX (231)724-6768
Water Filtration City of Muskegon, 933 Terrace Street, P.O. Box 536, Muskegon, MI 49443-0536
(231)724-4106 http://www.shorelinecity.com
FAX (231)755-5290 163
Sign up for City of Muskegon Emails