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Annual Comprehensive
Financial Report
City of Muskegon
Fiscal Year Ended June 30, 2022
CITY OF MUSKEGON,
MICHIGAN
ANNUAL COMPREHENSIVE
FINANCIAL REPORT
FOR THE YEAR ENDED
JUNE 30, 2022
Prepared By
FINANCIAL SERVICES DIVISION
Kenneth D. Grant Jason Boes
Finance Director Information Systems Director
Jessica Rabe Hayden Nickell
Assistant Finance Director Management Assistant
Sarah Wilson
City Treasurer
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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 ...................................................................................................................... 36
Fund Financial Statements
Governmental Funds
Balance Sheet ................................................................................................................................ 37
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position ................................................................................................. 38
Statement of Revenues, Expenditures and Changes
in Fund Balances ........................................................................................................................ 39
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balances to the Statement of
Activities .................................................................................................................................... 40
Proprietary Funds
Statement of Net Position .............................................................................................................. 41
Statement of Revenues, Expenses and Changes in Net Position ................................................... 43
Statement of Cash Flows ............................................................................................................... 44
Fiduciary Funds
Statement of Net Position .............................................................................................................. 45
Statement of Changes in Net Position ........................................................................................... 46
Discretely Presented Component Units
Statement of Net Position ................................................................................................................. 47
Statement of Activities ...................................................................................................................... 48
Notes to Financial Statements .............................................................................................................. 49
Required Supplementary Information
Budgetary Comparison Schedule—General Fund ............................................................................... 90
Budgetary Comparison Schedule—Major Street and Trunkline Fund ................................................ 95
Budgetary Comparison Schedule—Trinity Health Arena Fund .......................................................... 96
Schedule of Changes in Net Pension Liability and Related Ratios ...................................................... 97
Pension System Schedule of Contributions ......................................................................................... 98
Retiree Healthcare System Schedule of Changes in the
Net OPEB Liability and Related Ratios ............................................................................................. 99
Retiree Healthcare System Schedule of Contributions ...................................................................... 100
Retiree Healthcare System Schedule of Investment Returns ............................................................. 101
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City of Muskegon
TABLE OF CONTENTS
Other Supplemental Information
Other Governmental Funds
Description of Other Governmental Funds ..................................................................................... 104
Combining Balance Sheet ............................................................................................................... 106
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances (Deficits) ............................................................................................................. 107
Other Special Revenue Funds
Combining Balance Sheet............................................................................................................ 108
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances .......................................................................................................................... 109
Budgetary Comparison Schedule—Other Special Revenue Funds ............................................. 110
Other Capital Projects Funds
Combining Balance Sheet............................................................................................................ 113
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances (Deficits) .......................................................................................................... 114
Internal Service Funds
Description of Internal Service Funds ............................................................................................ 115
Combining Statement of Net Position ............................................................................................ 116
Combining Statement of Revenues, Expenses and
Changes in Fund Net Position ..................................................................................................... 117
Combining Statement of Cash Flows.............................................................................................. 118
Fiduciary Funds
Description of Fiduciary Funds....................................................................................................... 119
Custodial Funds
Combining Statement of Net Position ......................................................................................... 120
Combining Statement of Changes in Net Position ...................................................................... 121
Discretely Presented Component Units
Description of Discretely Presented Component Units .................................................................. 123
Combining Balance Sheet ............................................................................................................... 124
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position .................................................................................................. 125
Combining Statement of Revenues, Expenditures and Changes
in Fund Balances (Deficits) ......................................................................................................... 126
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balances (Deficits) to the Statement
of Activities ................................................................................................................................. 127
Schedule of Indebtedness ................................................................................................................... 129
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City of Muskegon
TABLE OF CONTENTS
STATISTICAL SECTION
Financial Trends
Net Position by Component ............................................................................................................... 134
Changes in Net Position ..................................................................................................................... 135
Fund Balances of Governmental Funds ............................................................................................. 137
Changes in Fund Balances of Governmental Funds .......................................................................... 138
Revenue Capacity
Governmental Activities Revenues by Source ................................................................................... 139
Taxable, Assessed and Equalized and Estimated Actual Valuation of Property................................ 140
Principal Property Taxpayers ............................................................................................................. 141
Property Tax Rates – Direct and Overlapping Government Units ..................................................... 142
Property Tax Levies and Collections ................................................................................................. 143
Total Income Tax Collected and Number of Returns Filed ............................................................... 144
Debt Capacity
Ratio of Outstanding Debt by Type ................................................................................................... 146
Direct and Overlapping Debt ............................................................................................................. 147
Legal Debt Margin Information ......................................................................................................... 148
Revenue Bond Coverage .................................................................................................................... 149
Demographic and Economic Information
Demographic and Economic Statistics ............................................................................................... 150
Principal Employers ........................................................................................................................... 151
Operation Information
Full-time Equivalent Government Employees ................................................................................... 152
Operating Indicators by Function/Program ........................................................................................ 153
Capital Asset Statistics by Function/Program .................................................................................... 154
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 .................................................................................................... 156
Independent Auditor’s Report on Compliance for Each Major
Program and on Internal Control over Compliance Required by
the Uniform Guidance .................................................................................................................... 158
Schedule of Expenditures of Federal Awards ..................................................................................... 161
Notes to Schedule of Expenditures of Federal Awards ....................................................................... 164
Schedule of Findings and Questioned Costs ....................................................................................... 165
Client Documents
Summary Schedule of Prior Audit Findings ................................................................................... 168
Corrective Action Plan ................................................................................................................... 169
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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 21, 2022
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 2022.
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, 2022. 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 its
residents and 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 US Census population of
37,552 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), and the
larger Grand Rapids-Wyoming-Muskegon Combined Statistical Area (CSA).
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.
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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, with new
pieces acquired each year. In 2022, “One Drop,” a 27-foot sculpture of a single drop of
water, by Georgia artist Marc Moulton, was added to the public art collection outside the
City’s VanDyke Mortgage Convention Center along Shoreline Drive.
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,
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 in previous years.
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.
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Long-term financial planning and major initiatives
The unassigned fund balance in the General Fund at year-end was 24.1% 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 the fiscal year 2021-22 were the
following:
Downtown Muskegon’s Leonard Building, a five-story mixed-use building, began
welcoming tenants in 2022; Samaritas opened a 50+ unit senior affordable apartment
building; Terrace Street was reconstructed and turned into a traditional two-lane road from
a large boulevard allowing for better connections between the core of downtown and
businesses east of Terrace Street, including the Pine Street commercial corridor.
Staff is nearing completion of an agreement to allow the City to acquire an old railroad
line through the Nims and Lakeside neighborhoods. The acquisition will allow for the
development of Windward Point in Lakeside and the conversion of much of the corridor
into pedestrian and commuter bike trails.
In 2019 the City started an ambitious infill housing program to provide new housing stock
across the community. In 2022 the program constructed new homes in the Jackson Hill,
Angell, McLaughlin, Nelson, and Campbell Field neighborhoods. Since the program’s
inception, the City has completed or initiated the construction of more than 125 homes. A
portion of homes are available for rent or purchase to individuals and families at 120% or
less of the Area Median Income (AMI).
Progress continues to move forward on the Adelaide Point (which now includes the former
Hartshorn Marina Village Development) and Viridian Shores Developments. These two
waterfront developments will feature more than $200 million in investments and create
hundreds of new housing opportunities in the City.
Parkland Properties announced in December 2022 it would be purchasing and
redeveloping the former Shaw Walker property into a mix-use development.
In 2022, the City approved site plans for the Lakeside Dunes development at the
Muskegon Country Club. Phase one is underway and will see 34 single-family semi-
custom club homes built and designed by David C. Bos Homes.
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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 the 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 annual comprehensive financial report (ACFR) for the fiscal year ended June
30, 2020. This was the 34th consecutive year that the City has received this award. The City
has submitted the June 30, 2021 ACFR 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 ACFR 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 ACFR 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.
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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 in maintaining the highest standards
of professionalism in the management of the City of Muskegon’s finances.
Respectfully submitted,
Jonathan C. Seyferth Kenneth D. Grant
City Manager Finance Director
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Organizational Structure 2021-22
Mayor and City Commission
City Manager External Auditors
City Attorney
Planning Commission
Finance and Public Works
Public Safety Development Services Zoning Board of Appeals
Administrative Services Historic District Commission
Housing Code Board of Appeals
Board of Review
Finance Administration Income Tax Board of Review
Treasury/Income Tax Community Civil Service Commission
City Clerk Streets/Highways Development DDA/BRA
Police Information Systems Utilities Neighborhood Services LDFA
Fire Public Relations Parks and Recreation Planning/Zoning BID Board
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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
ANNUAL COMPREHENSIVE FINANCIAL REPORT
CITY OF MUSKEGON, MICHIGAN
LIST OF PRINCIPAL OFFICIALS
June 30, 2022
ELECTED OFFICIALS
Mayor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ken Johnson
At Large
Vice Mayor-Commissioner. . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . .Willie German
Ward 2
Commissioner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Eric Hood
Ward 1
Commissioner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Michael Ramsey
Ward 3
Commissioner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Teresa Emory
Ward 4
Commissioner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rachel Gorman
At Large
Commissioner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rebecca St. Clair
At Large
APPOINTED OFFICIALS
City Manager. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jonathan Seyferth
City Attorney. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . John C. Schrier
Finance Director. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Kenneth D. Grant
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FINANCIAL SECTION
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INDEPENDENT AUDITOR’S REPORT
City Commission
City of Muskegon
Muskegon, Michigan
Opinions
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, 2022, and the related notes
to the financial statements, which collectively comprise the City of Muskegon, Michigan’s basic financial
statements as listed in the table of contents.
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, 2022, 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.
Basis for Opinions
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. Our responsibilities under those standards are further described in
the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to
be independent of the City of Muskegon, Michigan, and to meet our other ethical responsibilities, in accordance
with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our audit opinions.
Change in Accounting Principle
As discussed in Note O to the financial statements, in the year ended June 30, 2022 the City adopted new
accounting guidance, GASB Statement No. 87, Leases. Our opinions are not modified with respect to this matter.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with
accounting principles generally accepted in the United States of America, and for 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.
Grand Haven | Grand Rapids | Hart | Muskegon
www.brickleydelong.com
17
BRICKLEY DELONG
City Commission
City of Muskegon
Page 2
Responsibilities of Management for the Financial Statements–Continued
In preparing the financial statements, management is required to evaluate whether there are conditions or events,
considered in the aggregate, that raise substantial doubt about the City of Muskegon, Michigan’s ability to
continue as a going concern for twelve months beyond the financial statement date, including any currently
known information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee
that an audit conducted in accordance with generally accepted auditing standards and Government Auditing
Standards will always detect a material misstatement when it exists. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are
considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence
the judgement made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards and Government Auditing
Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, and design and perform audit procedures responsive to those risks. Such procedures include
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit 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 City of Muskegon, Michigan’s internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgement, there are conditions or events, considered in the aggregate, that raise
substantial doubt about the City of Muskegon, Michigan’s ability to continue as a going concern for a
reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit, significant audit findings, and certain internal control-related matters that we
identified during the audit.
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BRICKLEY DELONG
City Commission
City of Muskegon
Page 3
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis, budgetary comparison information, and pension and other post-employment benefit
information be presented to supplement the basic financial statements. Such information is the responsibility of
management and, 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.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise City of Muskegon, Michigan’s basic financial statements. The accompanying combining and individual
nonmajor fund financial statements, budgetary comparison information for nonmajor funds, schedule of
indebtedness, and the schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards, are presented for purposes of additional analysis and are not a required part of the basic financial
statements. Such information is the responsibility of management and was derived from and relates directly to the
underlying accounting and other records used to prepare the basic financial statements. The 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.
Other Information
Management is responsible for the other information included in the annual report. The other information
comprises the introductory and statistical sections but does not include the basic financial statements and our
auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and
we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other information
and consider whether a material inconsistency exists between the other information and the basic financial
statements, or the other information otherwise appears to be materially misstated. If, based on the work
performed, we conclude that an uncorrected material misstatement of the other information exists, we are required
to describe it in our report.
Muskegon, Michigan
December 21, 2022
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2022 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, 2022. 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 $114,024,323 as of June 30, 2022. The City has a deficit in unrestricted net
position of $22,513,368. The deficit in unrestricted net position is caused by the City’s pension and
other postemployment benefits plans liabilities.
The City’s total combined net position increased by $11,679,948 during the year ended June 30, 2022.
The City’s governmental funds reported combined ending fund balance of $19,965,055, an increase of
$3,672,527(23%) from the prior year.
The City’s General Fund reported a total fund balance of $10,861,373, a decrease of $336,467 from the
prior year balance of $11,197,840.
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.
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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.
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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 $114,024,323 as of June 30, 2022. This is an increase of
$11,679,948 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
6/30/2022 6/30/2021 6/30/2022 6/30/2021 6/30/2022 6/30/2021 Change
Current and other assets $53,203 $40,446 $6,947 $8,568 $60,150 $49,014 22.72%
Capital assets 105,605 102,697 69,088 63,314 174,693 166,011 5.23%
Total Assets 158,808 143,143 76,035 71,882 234,843 215,025 9.22%
Deferred outflow s of resources 2,692 2,006 187 139 2,879 2,145 34.22%
Total Assets and Deferred Outflow s of Resources 161,500 145,149 76,222 72,021 237,722 217,170 9.46%
Long-term liabilities 62,472 71,213 15,516 10,793 77,988 82,006 -4.90%
Current liabilities 23,700 22,650 3,225 6,804 26,925 29,454 -8.59%
Total Liabilities 86,172 93,863 18,741 17,597 104,913 111,460 -5.87%
Deferred inflow s of resources 17,219 3,147 1,564 219 18,783 3,366 458.02%
Total Liabilities and Deferred Outflow s of Resources 103,391 97,010 20,305 17,816 123,696 114,826 7.72%
Net Position `
Net investment in capital assets 75,202 72,201 54,669 54,257 129,871 126,458 2.70%
Restricted 5,845 5,003 822 822 6,667 5,825 14.45%
Unrestricted -22,938 -29,065 425 -874 -22,513 -29,939 -24.80%
Total Net Position $58,109 $48,139 $55,916 $54,205 $114,025 $102,344 11.41%
The bulk of the City’s net position $129,870,436 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 $6,667,255 of the City’s net position are legally restricted as to use. The City has a deficit in
unrestricted net position of $22,513,368. The deficit in unrestricted net position is caused by the City’s
long‐term pension and other postemployment benefits plans liabilities. The City’s unrestricted net
position improved $7,425,502 during the year.
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Changes in net position. The City’s total revenues were $80,880,919 for the year ended June 30, 2022.
This represents a 4.12% increase over total revenues collected during the prior fiscal year.
Approximately 37.9% of the City’s revenue stream came from charges to users of specific services such
as water or sewer. Another 13.7% 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 revenue sharing 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, 2022 was $69,200,971. This
represents a 6.7% increase from reported expenses for the last fiscal year ended June 30, 2021. 74.2%
of the City’s expenses were for governmental activities such as police and fire protection, streets, parks,
and general administration. The remaining 25.8% 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 $9,969,730 and the net position for
business‐type activities increased by $1,710,218. For governmental activities, most of these changes are
related to the changes in the pension and other postemployment benefits plans. For business‐type
activities, the changes similarly represent the impact of the changes in the pension and other
postemployment benefits plans.
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Changes in City’s Net Position
(In thousands of dollars)
Governmental Business-Type
Activities Activities Total Percentage
6/30/2022 6/30/2021 6/30/2022 6/30/2021 6/30/2022 6/30/2021 Change
Program revenues
Charges for services $11,148 $7,951 $19,495 $18,229 $30,643 $26,180 17.05%
Operating grants and contributions 11,024 9,839 - - 11,024 9,839 12.04%
Capital grants and contributions 2,815 2,901 103 10,354 2,918 13,255 -77.99%
General revenues
Property taxes 9,182 8,813 - - 9,182 8,813 4.19%
Income taxes 10,020 9,609 - - 10,020 9,609 4.28%
State shared revenues 15,303 6,427 - - 15,303 6,427 138.10%
All other 1,802 3,580 24 10 1,826 3,590 -49.14%
Total revenues 61,294 49,120 19,622 28,593 80,916 77,713 4.12%
Governmental activities expenses
Public representation 1,715 1,604 - - 1,715 1,604 6.92%
Administrative services 914 826 - - 914 826 10.65%
Financial services 5,473 5,040 - - 5,473 5,040 8.59%
Public safety 13,387 18,249 - - 13,387 18,249 -26.64%
Public w orks 4,688 4,026 - - 4,688 4,026 16.44%
Highw ays, streets and bridges 7,309 6,863 - - 7,309 6,863 6.50%
Community and economic development 9,857 5,000 - - 9,857 5,000 97.14%
Culture and recreation 6,589 4,507 - - 6,589 4,507 46.19%
General administration 511 404 - - 511 404 26.49%
Interest on long-term debt 881 1112 - - 881 1,112 -20.77%
Business-type activities expenses
Sew er - - 8,154 8,085 8,154 8,085 0.85%
Water - - 9,261 8,612 9,261 8,612 7.54%
Marina and launch ramp - - 461 515 461 515 -10.49%
Total expenses 51,324 47,631 17,876 17,212 69,200 64,843 6.72%
Change in net position before transfers 9,970 1,489 1,746 11,381 11,716 12,870 -8.97%
Transfers - - (35) 35 (35) 35 -
Change in net position 9,970 1,489 1,711 11,416 11,681 12,905 -9.48%
Net position at beginning of year 48,138 46,650 54,205 42,789 102,343 89,439 14.43%
Net position at end of year $58,108 $48,139 $55,916 $54,205 $114,024 $102,344 11.41%
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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, 2022 was
$51,324,518.
The net cost that City taxpayers paid for these activities through local property taxes and income
taxes was $19,202,554, or about 37% 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
6/30/2022 6/30/2021 % Change 6/30/2022 6/30/2021 % Change
Governmental activities
Public safety $13,387 $18,249 -26.64% $10,703 $14,257 -24.93%
Public w orks 4,688 4,026 16.44% 3,831 3,131 22.36%
Highw ays, streets and bridges 7,309 6,863 6.50% 672 864 -22.22%
Community and economic development 9,857 5,000 97.14% 6,329 (78) -8214.10%
Culture and recreation 6,589 4,507 46.19% -2,430 2,102 -215.60%
All other 9,494 8,986 5.65% 7,233 6,664 8.54%
Total governmental activities $51,324 $47,631 7.75% $26,338 $26,940 -2.23%
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, 2022, the City’s total business‐type activities realized an
overall increase in net position of $1,710,218.
Sewer Fund net position increased $2,086,272 primarily from the result of adjustments to utility rates.
The Water Fund saw a net position decrease of $323,415. Marina and Launch Ramp Fund net position
decreased $171,475.
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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, 2022 were the General Fund, the Major
Street and Trunkline Fund, and the State Grants Fund.
General Fund Highlights
The General Fund receives most public attention since it is where local tax revenues are accounted for
and where the most visible municipal services such as police, fire and parks are funded. The City
reforecasts its General Fund budget on a quarterly basis 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
Change Revenues Prior Year Revenues
Fund Balance
(Policy Target=13%)
6/30/2022 $7,981,674 -12.50% $33,056,483 24.15%
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%
For the year ended June 30, 2022, General Fund revenues were $326,085 higher than the final amended
budget estimate due to higher than anticipated income taxes and revenue sharing.
General Fund expenditures were $42,712 lower than projected in the final amended budget.
Major Street and Trunkline and State Grant Fund Highlights
The Major Street and Trunkline Fund accounts for all of the City’s street construction and maintenance
activities on its primary road system. Primary funding comes from the State of Michigan. For the year
ended June 30, 2022, the fund balance of the Major Street and Trunkline Fund increased $1,112,193.
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.
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CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
As of June 30, 2022, the City had invested $174,692,339 in a variety of capital assets, including land,
streets, equipment, buildings, water and sewer lines, and vehicles. This is an increase of $8,681,233
from capital assets reported as of June 30, 2021. The increase is due to current year additions offset by
normal depreciation of assets. Note G of the notes to the
basic financial statements provides detailed information on
Bond Ratings
the 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, 2022, the City had $47,507,897 in bonds and other powers) were upgraded by Standard &
long‐term obligations outstanding. This represents a 12.8% 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
fire truck and water and sewer improvements.
“AA‐“ in 2022.
Additional information concerning the City’s long‐term debt is
presented in Note J 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
6/30/2022 6/30/2021 6/30/2022 6/30/2021 6/30/2022 6/30/2021 Change
Due within one year $1,720 $1,526 $1,359 $1,312 $3,079 $2,838 8.49%
Due in more than one year 31,094 31,257 13,335 8,015 44,429 39,272 13.13%
Total bonds & other obligations $32,814 $32,783 $14,694 $9,327 $47,508 $42,110 12.82%
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 $1,096,547 at year‐end
as shown in the table below. This represents a decrease of 18.9% 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 J 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
6/30/2022 6/30/2021 6/30/2022 6/30/2021 Change
Due within one year $255 $245 $255 $245 4.08%
Due in more than one year 842 1,107 842 1,107 -23.94%
Total bonds & other obligations $1,097 $1,352 $1,097 $1,652
-18.86%
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ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES
The City’s fiscal year 2022‐23 capital budget anticipates spending $20,841,772 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 2022‐23 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 increase slightly to approximately 260.5.
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 8.1% from $9,256,826 for the year ended June 30, 2021 to $10,002,623
for the year ended June 30, 2022. For 2022‐23, the City has estimated income tax revenue to be
$10,250,000.
Year City Income Tax Revenues Percent Change
6/30/2022 $10,002,623 8.1%
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%
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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 2022‐23, the City tax levy will be at 9.7880 mills for general operations and 2.9364 mills for
sanitation service. We project that $8,150,000 in total property tax revenue will be collected during
fiscal year 2022‐23.
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
6/30/2022 $5,087,587 7.5%
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%
For 2022‐23, the City projects $5,063,948 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
6/30/2022 $6,271,210 5.2%
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%
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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 street revenues for fiscal year 2022‐23 of $5,791,000.
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 $18,871,053 during the year ended June 30, 2022. 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, 2022 water rates increased by 4%. Water rates will
increase by 4% in the next fiscal year 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.
The City of Muskegon along other jurisdictions in the area have an agreement in place with the
Muskegon County Wastewater Treatment System starting in 2022 to pay waste water treatment fees
based of the flow percentage contributed to the system and the annual revenue required from all
jurisdictions to run treatment plant. In the past, our fees were based on actual flow. By changing to
this method, we will be able to stabilized our monthly payments.
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).
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FINANCIAL STATEMENTS
33
City of Muskegon
STATEMENT OF NET POSITION
June 30, 2022
Governmental Business-type Component
Activities Activities Total Units
ASSETS
Current assets
Cash and investments $ 34,483,950 $ 1,883,569 $ 36,367,519 $ 403,928
Assets managed by others 1,356,585 - 1,356,585 -
Receivables
Accounts and notes 4,081,055 3,142,057 7,223,112 32,616
Leases 384,081 83,003 467,084 -
Due from other governmental units 2,201,173 132,610 2,333,783 -
Internal balances 458,620 (458,620) - -
Due from component units 64,211 - 64,211 -
Inventories 38,867 327,524 366,391 -
Prepaid items 560,480 149,850 710,330 -
Total current assets 43,629,022 5,259,993 48,889,015 436,544
Noncurrent assets
Restricted cash and investments - 829,000 829,000 -
Advances to component units 1,046,980 - 1,046,980 -
Leases receivable, less amounts due within one year 7,868,565 857,733 8,726,298 -
Notes receivable, less amounts due within one year 658,160 - 658,160 -
Capital assets, net
Nondepreciable 22,269,876 14,966,408 37,236,284 400,000
Depreciable 83,334,823 54,121,232 137,456,055 589,881
Total noncurrent assets 115,178,404 70,774,373 185,952,777 989,881
Total assets 158,807,426 76,034,366 234,841,792 1,426,425
DEFERRED OUTFLOWS OF RESOURCES
Related to pension 1,741,007 121,033 1,862,040 -
Related to other postemployment benefits 951,112 66,120 1,017,232 -
Total deferred outflows of resources 2,692,119 187,153 2,879,272 -
Total assets and deferred outflows of resources 161,499,545 76,221,519 237,721,064 1,426,425
The accompanying notes are an integral part of this statement.
34
City of Muskegon
STATEMENT OF NET POSITION—CONTINUED
June 30, 2022
Governmental Business-type Component
Activities Activities Total Units
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities $ 5,865,462 $ 848,762 $ 6,714,224 $ 119,386
Due to other governmental units 22,189 903,943 926,132 2,000
Due to primary government - - - 64,211
Short-term note 84,297 - 84,297 -
Unearned revenues - unused Farmers Market tokens 26,331 - 26,331 -
Unearned revenues - expenditure-driven grants 15,914,190 - 15,914,190 -
Unearned revenues - prepaid events 67,658 - 67,658 -
Unearned revenues - prepaid fees - 113,943 113,943 -
Bonds and other obligations, due within one year 1,720,469 1,358,700 3,079,169 255,000
Total current liabilities 23,700,596 3,225,348 26,925,944 440,597
Noncurrent liabilities
Advances from primary government - - - 1,046,980
Bonds and other obligations, less amounts due within one year 31,093,831 13,334,897 44,428,728 841,547
Net pension liability 29,044,232 2,019,117 31,063,349 -
Net other postemployment benefits liability 2,333,505 162,222 2,495,727 -
Total noncurrent liabilities 62,471,568 15,516,236 77,987,804 1,888,527
Total liabilities 86,172,164 18,741,584 104,913,748 2,329,124
DEFERRED INFLOWS OF RESOURCES
Related to leases 8,252,646 940,736 9,193,382 -
Related to pension 6,498,416 451,762 6,950,178 -
Related to other postemployment benefits 2,467,870 171,563 2,639,433 -
Total deferred inflows of resources 17,218,932 1,564,061 18,782,993 -
Total liabilities and deferred inflows of resources 103,391,096 20,305,645 123,696,741 2,329,124
NET POSITION
Net investment in capital assets 75,201,511 54,668,925 129,870,436 (106,666)
Restricted
Highways, streets and bridges 3,244,753 - 3,244,753 -
Debt service - 822,000 822,000 -
Trinity Health Arena 61,968 - 61,968 -
Law enforcement 23,161 - 23,161 -
Business improvement districts 176,733 - 176,733 -
Perpetual care
Expendable 477,332 - 477,332 -
Non-expendable 1,687,702 - 1,687,702 -
Other purposes 173,606 - 173,606 -
Unrestricted (22,938,317) 424,949 (22,513,368) (796,033)
Total net position $ 58,108,449 $ 55,915,874 $ 114,024,323 $ (902,699)
The accompanying notes are an integral part of this statement.
35
City of Muskegon
STATEMENT OF ACTIVITIES
For the year ended June 30, 2022
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 $ 1,715,050 $ 324,314 $ - $ - $ (1,390,736) $ - $ (1,390,736) $ -
Administrative services 913,923 715,421 - 10,691 (187,811) - (187,811) -
Financial services 5,473,498 1,085,220 50,000 - (4,338,278) - (4,338,278) -
Public safety 13,387,378 2,680,675 3,447 - (10,703,256) - (10,703,256) -
Public works 4,687,660 854,793 2,000 - (3,830,867) - (3,830,867) -
Highways, streets and bridges 7,308,858 522,779 6,114,381 - (671,698) - (671,698) -
Community and economic development 9,857,082 498,766 3,029,193 - (6,329,123) - (6,329,123) -
Culture and recreation 6,588,542 4,389,524 1,825,037 2,804,428 2,430,447 - 2,430,447 -
General administration 511,323 76,182 - - (435,141) - (435,141) -
Interest on long-term debt 881,204 - - - (881,204) - (881,204) -
Total governmental activities 51,324,518 11,147,674 11,024,058 2,815,119 (26,337,667) - (26,337,667) -
Business-type activities
Sewer 8,153,673 10,298,642 - - - 2,144,969 2,144,969 -
Water 9,261,276 8,903,549 103,208 - - (254,519) (254,519) -
Marina and launch ramp 461,504 292,416 - - - (169,088) (169,088) -
Total business-type activities 17,876,453 19,494,607 103,208 - - 1,721,362 1,721,362 -
36
Total primary government $ 69,200,971 $ 30,642,281 $ 11,127,266 $ 2,815,119 (26,337,667) 1,721,362 (24,616,305) -
Component units
Local Development Finance Authority - SmartZone $ 197,647 $ - $ - $ 200,000 - - - 2,353
Downtown Development Authority 810,219 - 655,765 - - - - (154,454)
Tax Increment Finance Authority 50,000 - - - - - - (50,000)
Brownfield Redevelopment Authorities 666,005 - - - - - - (666,005)
Total component units $ 1,723,871 $ - $ 655,765 $ 200,000 - - - (868,106)
General revenues
Property taxes 9,182,184 - 9,182,184 1,139,110
Income taxes 10,020,370 - 10,020,370 -
Cable franchise agreement 369,420 - 369,420 -
Grants and contributions not restricted to specific programs 15,303,423 - 15,303,423 36,895
Unrestricted investment earnings (644,067) 23,856 (620,211) 1,357
Miscellaneous 918,179 - 918,179 674
Gain on sale of capital asset 1,122,888 - 1,122,888 -
Transfers 35,000 (35,000) - -
Total general revenues and transfers 36,307,397 (11,144) 36,296,253 1,178,036
Change in net position 9,969,730 1,710,218 11,679,948 309,930
Net position at beginning of year 48,138,719 54,205,656 102,344,375 (1,212,629)
Net position at end of year $ 58,108,449 $ 55,915,874 $ 114,024,323 $ (902,699)
The accompanying notes are an integral part of this statement.
City of Muskegon
BALANCE SHEET
Governmental Funds
June 30, 2022
Major Street Trinity Health Other Total
General and Trunkline Arena State Grants Governmental Governmental
Fund Fund Fund Fund Funds Funds
ASSETS
Cash and investments $ 8,027,306 $ 2,900,461 $ - $ 16,995,473 $ 3,001,131 $ 30,924,371
Assets managed by others - - - - 1,356,585 1,356,585
Receivables
Accounts and loans (net of allowance for uncollectibles) 254,404 66,400 1,456,956 - 989,779 2,767,539
Property taxes 60,397 - - - - 60,397
Income taxes 1,578,087 - - - - 1,578,087
Leases 3,794,403 - 4,458,243 - - 8,252,646
Due from other governmental units 939,809 707,096 - 49,049 505,219 2,201,173
Due from other funds 2,396,560 - - - - 2,396,560
Due from component units 64,211 - - - - 64,211
Advances to component units 600,000 - - - 148,994 748,994
Prepaid items 271,961 25,067 26,451 - 7,905 331,384
Total assets $ 17,987,138 $ 3,699,024 $ 5,941,650 $ 17,044,522 $ 6,009,613 $ 50,681,947
LIABILITIES
Accounts payable $ 2,165,692 $ 154,402 $ 263,449 $ 1,229,639 $ 303,168 $ 4,116,350
Accrued liabilities 588,110 19,681 17,599 - 41,424 666,814
Due to other governmental units 16,706 4,695 - - 788 22,189
Due to other funds - - 1,072,733 - 33,684 1,106,417
Short-term note - - - - 84,297 84,297
Unearned revenues - unused Farmers Market tokens - - - - 26,331 26,331
Unearned revenues - expenditure-driven grants 100,854 - - 15,813,336 - 15,914,190
Unearned revenues - prepaid events - - 67,658 - - 67,658
Total liabilities 2,871,362 178,778 1,421,439 17,042,975 489,692 22,004,246
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - income taxes 460,000 - - - - 460,000
Related to leases 3,794,403 - 4,458,243 - - 8,252,646
Total deferred inflows of resources 4,254,403 - 4,458,243 - - 8,712,646
FUND BALANCES
Nonspendable
Prepaid items 271,961 25,067 26,451 - 7,905 331,384
Long-term advances 600,000 - - - - 600,000
Perpetual care 10,000 - - - 1,677,702 1,687,702
Restricted
Highways, streets and bridges 8,701 3,495,179 - - 789,134 4,293,014
Trinity Health Arena - - 35,517 - - 35,517
Law enforcement - - - - 23,161 23,161
Business improvement districts - - - - 176,733 176,733
Perpetual care - - - - 477,332 477,332
Other purposes - - - - 173,606 173,606
Committed for social equity program 189,037 - - - - 189,037
Assigned for capital projects and public improvements 1,800,000 - - 1,547 2,194,348 3,995,895
Unassigned 7,981,674 - - - - 7,981,674
Total fund balances 10,861,373 3,520,246 61,968 1,547 5,519,921 19,965,055
Total liabilities, deferred inflows of
resources and fund balances $ 17,987,138 $ 3,699,024 $ 5,941,650 $ 17,044,522 $ 6,009,613 $ 50,681,947
The accompanying notes are an integral part of this statement.
37
City of Muskegon
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION
June 30, 2022
Total fund balance—governmental funds $ 19,965,055
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 $ 179,639,742
Accumulated depreciation (76,858,507) 102,781,235
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 460,000
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 (242,800)
Bonds and notes payable (30,403,188)
Compensated absences (2,215,261)
Net pension liability and related deferred outflows/inflows of resources (32,355,582)
Net other post employment benefits liability and related
outflows/inflows of resources (3,685,546) (68,902,377)
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 4,636,059
Internal balances representing the cumulative difference between
actual costs and amounts charged to business-type activities (831,523) 3,804,536
Net position of governmental activities $ 58,108,449
The accompanying notes are an integral part of this statement.
38
City of Muskegon
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
Governmental Funds
For the year ended June 30, 2022
Major Street Trinity Health Other Total
General and Trunkline Arena State Grants Governmental Governmental
Fund Fund Fund Fund Funds Funds
REVENUES
Taxes $ 18,795,646 $ - $ - $ - $ - $ 18,795,646
Licenses and permits 2,306,048 - - - - 2,306,048
Intergovernmental revenues
Federal 291,918 - 625,498 9,234,029 2,952,413 13,103,858
State 6,479,990 4,809,424 - 1,244,987 2,538,375 15,072,776
Local 50,000 - - - 261,057 311,057
Charges for services 4,566,029 - 2,683,567 - 495,403 7,744,999
Fines and forfeitures 581,369 - - - 1,264 582,633
Investment earnings and rental income (93,350) 11,627 79,782 - 36,959 35,018
Income from assets managed by others - - - - (134,215) (134,215)
Other 1,167,117 323,508 14,904 - 1,104,169 2,609,698
Total revenues 34,144,767 5,144,559 3,403,751 10,479,016 7,255,425 60,427,518
EXPENDITURES
Current
Public representation services 1,758,928 - - - - 1,758,928
Administrative services 945,841 - - - - 945,841
Financial services 5,668,254 - - - - 5,668,254
Public safety 15,520,982 - - - 443 15,521,425
Public works 3,728,293 - - - 156,277 3,884,570
Highways, streets and bridges - 3,798,863 - - 1,998,785 5,797,648
Community and economic development 743,693 - - - - 743,693
Culture and recreation 2,839,480 - 2,274,570 - 484,929 5,598,979
Other governmental functions 485,024 - - - - 485,024
Debt service
Principal 907,462 230,000 - - 205,000 1,342,462
Interest and fees 390,771 3,503 - - 616,730 1,011,004
Bond issuance costs 1,000 - - - - 1,000
Capital outlay 4,662,678 - 1,987,141 4,721,218 4,835,674 16,206,711
Total expenditures 37,652,406 4,032,366 4,261,711 4,721,218 8,297,838 58,965,539
Excess of revenues over (under) expenditures (3,507,639) 1,112,193 (857,960) 5,757,798 (1,042,413) 1,461,979
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets - - - 1,204,675 1,204,675
Long-term debt issued 1,370,873 - - - - 1,370,873
Transfers in 5,798,549 - 865,000 40,750 3,128,500 9,832,799
Transfers out (3,998,250) - - (5,798,549) (401,000) (10,197,799)
Total other financing sources (uses) 3,171,172 - 865,000 (5,757,799) 3,932,175 2,210,548
Net change in fund balances (336,467) 1,112,193 7,040 (1) 2,889,762 3,672,527
Fund balances at beginning of year 11,197,840 2,408,053 54,928 1,548 2,630,159 16,292,528
Fund balances at end of year $ 10,861,373 $ 3,520,246 $ 61,968 $ 1,547 $ 5,519,921 $ 19,965,055
The accompanying notes are an integral part of this statement.
39
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, 2022
Net change in fund balances—total governmental funds $ 3,672,527
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 $ (4,992,455)
Capital outlay 7,775,915 2,783,460
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 (190,000)
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 (1,370,873)
Repayment of principal on long-term debt 1,342,462 (28,411)
Changes in accrual of interest and amortization of premiums and discounts
Change in accrued interest payable 8,900
Amortization of premiums and discounts 121,900 130,800
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 (89,499)
Change in net pension liability and related deferred outflows/inflows of resources (1,779,430)
Change in net other post employment benefits liability
and related deferred outflows/inflows of resources 5,078,209 3,209,280
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 510,910
Change in internal balances representing the current year difference
between actual costs and amounts charged to business-type activities (118,836) 392,074
Change in net position of governmental activities $ 9,969,730
The accompanying notes are an integral part of this statement.
40
City of Muskegon
STATEMENT OF NET POSITION
Proprietary Funds
June 30, 2022
Governmental
Activities -
Business-type Activities - Enterprise Funds Internal
Marina and Service
Sewer Water Launch Ramp Total Funds
ASSETS
Current assets
Cash and investments $ 1,883,569 $ - $ - $ 1,883,569 $ 3,559,579
Receivables
Accounts 1,636,556 1,490,380 15,121 3,142,057 333,192
Leases - 83,003 - 83,003 -
Due from other governmental units 50,101 82,509 - 132,610 -
Inventories 44,157 283,367 - 327,524 38,867
Prepaid items 62,653 83,677 3,520 149,850 229,096
Total current assets 3,677,036 2,022,936 18,641 5,718,613 4,160,734
Noncurrent assets
Restricted cash and investments 101,000 728,000 - 829,000 -
Leases receivable, less amounts due within one year - 857,733 - 857,733 -
Advances to component units - - - - 297,986
Capital assets
Land 16,188 103,500 22,562 142,250 65,000
Land improvements - 62,948 1,923,404 1,986,352 301,715
Buildings, improvements and systems 34,456,135 75,761,108 2,535,088 112,752,331 1,668,215
Machinery and equipment 157,622 3,101,790 60,620 3,320,032 10,313,517
Construction in progress 5,478,995 9,345,163 - 14,824,158 -
Less accumulated depreciation (12,681,088) (47,696,197) (3,560,198) (63,937,483) (9,524,983)
Net capital assets 27,427,852 40,678,312 981,476 69,087,640 2,823,464
Total noncurrent assets 27,528,852 42,264,045 981,476 70,774,373 3,121,450
Total assets 31,205,888 44,286,981 1,000,117 76,492,986 7,282,184
DEFERRED OUTFLOWS OF RESOURCES
Related to pension 27,931 93,102 - 121,033 74,482
Related to other postemployment benefits 15,258 50,862 - 66,120 40,689
Total deferred outflows of resources 43,189 143,964 - 187,153 115,171
Total assets and deferred outflows of resources 31,249,077 44,430,945 1,000,117 76,680,139 7,397,355
The accompanying notes are an integral part of this statement.
41
City of Muskegon
STATEMENT OF NET POSITION—CONTINUED
Proprietary Funds
June 30, 2022
Governmental
Activities -
Business-type Activities - Enterprise Funds Internal
Marina and Service
Sewer Water Launch Ramp Total Funds
LIABILITIES
Current liabilities
Accounts payable $ 73,830 $ 562,003 $ 23,581 $ 659,414 $ 779,382
Accrued liabilities 54,043 134,267 1,038 189,348 60,116
Due to other governmental units 898,388 5,555 - 903,943 -
Due to other funds - 1,014,690 275,453 1,290,143 -
Unearned revenues - prepaid fees - - 113,943 113,943 -
Bonds and other obligations, due within one year 294,700 1,064,000 - 1,358,700 39,200
Total current liabilities 1,320,961 2,780,515 414,015 4,515,491 878,698
Noncurrent liabilities
Bonds and other obligations, less amounts due within one year 6,084,589 7,250,308 - 13,334,897 156,651
Net pension liability 465,950 1,553,167 - 2,019,117 1,242,534
Net other postemployment benefits liability 37,436 124,786 - 162,222 99,829
Total noncurrent liabilities 6,587,975 8,928,261 - 15,516,236 1,499,014
Total liabilities 7,908,936 11,708,776 414,015 20,031,727 2,377,712
DEFERRED INFLOWS OF RESOURCES
Related to leases - 940,736 - 940,736 -
Related to pension 104,253 347,509 - 451,762 278,007
Related to other postemployment benefits 39,591 131,972 - 171,563 105,577
Total deferred inflows of resources 143,844 1,420,217 - 1,564,061 383,584
Total liabilities and deferred inflows of resources 8,052,780 13,128,993 414,015 21,595,788 2,761,296
NET POSITION
Net investment in capital assets 21,147,238 32,540,211 981,476 54,668,925 2,823,464
Restricted for debt service 101,000 721,000 - 822,000 -
Unrestricted 1,948,059 (1,959,259) (395,374) (406,574) 1,812,595
Total net position $ 23,196,297 $ 31,301,952 $ 586,102 55,084,351 $ 4,636,059
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 831,523
Net position of business-type activities $ 55,915,874
The accompanying notes are an integral part of this statement.
42
City of Muskegon
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
Proprietary Funds
For the year ended June 30, 2022
Governmental
Activities -
Business-type Activities - Enterprise Funds Internal
Marina and Service
Sewer Water Launch Ramp Total Funds
OPERATING REVENUES
Charges for services $ 10,104,566 $ 8,483,668 $ 282,819 $ 18,871,053 $ 10,433,668
Other 194,076 523,089 9,597 726,762 158,582
Total operating revenues 10,298,642 9,006,757 292,416 19,597,815 10,592,250
OPERATING EXPENSES
Administration 664,312 1,439,537 11,169 2,115,018 958,063
Insurance premiums and claims - - - - 5,386,649
Wastewater treatment 4,847,582 - - 4,847,582 -
Wastewater maintenance 1,990,288 - - 1,990,288 -
Filtration plant operations - 2,621,015 - 2,621,015 -
Water distribution - 3,195,179 - 3,195,179 -
Other operations - - 345,305 345,305 3,701,160
Depreciation 630,870 1,916,908 107,417 2,655,195 499,466
Total operating expenses 8,133,052 9,172,639 463,891 17,769,582 10,545,338
Operating income (loss) 2,165,590 (165,882) (171,475) 1,828,233 46,912
NONOPERATING REVENUES (EXPENSES)
Investment earnings 4,421 19,435 - 23,856 25,649
Gain on sale of capital assets - - - - 38,349
Interest expense (83,739) (141,968) - (225,707) -
Total nonoperating revenue (expenses) (79,318) (122,533) - (201,851) 63,998
Income (loss) before transfers 2,086,272 (288,415) (171,475) 1,626,382 110,910
TRANSFERS
Transfers in - - - - 400,000
Transfers out - (35,000) - (35,000) -
Total transfers - (35,000) - (35,000) 400,000
Change in net position 2,086,272 (323,415) (171,475) 1,591,382 510,910
Net position at beginning of year 21,110,025 31,625,367 757,577 4,125,149
Net position at end of year $ 23,196,297 $ 31,301,952 $ 586,102 $ 4,636,059
Adjustment for the net effect of the current year activity between
the internal service funds and the enterprise funds 118,836
Change in net position of business-type activities $ 1,710,218
The accompanying notes are an integral part of this statement.
43
City of Muskegon
STATEMENT OF CASH FLOWS
Proprietary Funds
For the year ended June 30, 2022
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 $ 11,047,199 $ 8,975,052 $ 316,684 $ 20,338,935 $ 169,736
Receipts from interfund services provided 132,980 257,743 - 390,723 10,433,668
Other receipts - - - - 1,266,428
Payments to suppliers (6,213,667) (3,421,627) (329,730) (9,965,024) (6,865,909)
Payments to employees (994,237) (2,655,749) (51,457) (3,701,443) (1,954,355)
Payments for interfund services used (846,355) (1,353,616) (24,735) (2,224,706) (848,990)
Net cash provided by (used for) operating activities 3,125,920 1,801,803 (89,238) 4,838,485 2,200,578
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Transfers in - - - - 400,000
Transfers out - (35,000) - (35,000) -
Interfund borrowing (29,970) 1,014,690 267,063 1,251,783 (384,381)
Advances to component units - - - - 93,094
Net cash provided by (used for) noncapital financing activities (29,970) 979,690 267,063 1,216,783 108,713
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Proceeds from long-term debt 3,913,081 2,671,931 - 6,585,012 -
Purchases of capital assets (4,773,444) (6,610,907) (177,825) (11,562,176) (659,722)
Principal paid on capital debt (272,000) (994,750) - (1,266,750) -
Interest paid on capital debt (84,439) (146,568) - (231,007) -
Proceeds from sale of capital assets - - - - 74,558
Net cash provided by (used for) capital and related financing activities (1,216,802) (5,080,294) (177,825) (6,474,921) (585,164)
CASH FLOW FROM INVESTING ACTIVITIES
Investment earnings 4,421 19,435 - 23,856 25,649
Net increase (decrease) in cash and investments 1,883,569 (2,279,366) - (395,797) 1,749,776
Cash and investments at beginning of year 101,000 3,007,366 - 3,108,366 1,809,803
Cash and investments at end of year $ 1,984,569 $ 728,000 $ - $ 2,712,569 $ 3,559,579
Reconciliation of cash and investments to the Statement of Net Position
Cash and investments $ 1,883,569 $ - $ - $ 1,883,569 $ 3,559,579
Restricted cash and investments 101,000 728,000 - 829,000 -
$ 1,984,569 $ 728,000 $ - $ 2,712,569 $ 3,559,579
Reconciliation of operating income (loss) to net cash provided by (used for)
operating activities
Operating income (loss) $ 2,165,590 $ (165,882) $ (171,475) $ 1,828,233 $ 46,912
Adjustments to reconcile operating income (loss) to net cash provided by
(used for) operating activities
Depreciation expense 630,870 1,916,908 107,417 2,655,195 499,466
Change in assets and liabilities
Receivables 881,537 226,038 23,319 1,130,894 1,277,582
Inventories (13,923) (78,314) - (92,237) (31,549)
Prepaid items (2,710) (1,420) (1,063) (5,193) 386
Accounts payable (511,981) 40,412 (39,367) (510,936) 510,189
Unearned revenues - - 949 949 -
Accrued liabilities (23,463) (135,939) (9,018) (168,420) (102,408)
Net cash provided by (used for) operating activities $ 3,125,920 $ 1,801,803 $ (89,238) $ 4,838,485 $ 2,200,578
The accompanying notes are an integral part of this statement.
44
City of Muskegon
STATEMENT OF NET POSITION
Fiduciary Funds
June 30, 2022
Other Post-
Employment
Benefits Custodial
Trust Fund Funds
ASSETS
Cash and investments $ 22,146,026 $ 816,055
Accounts receivable - 13,835
Total assets 22,146,026 829,890
LIABILITIES
Accounts payable - 19,517
Due to other governmental units - 622,373
Deposits held for others - 188,000
Total liabilities - 829,890
NET POSITION
Restricted for individuals, organizations, and other governments $ 22,146,026 $ -
The accompanying notes are an integral part of this statement.
45
City of Muskegon
STATEMENT OF CHANGES IN NET POSITION
Fiduciary Funds
For the year ended June 30, 2022
Other Post-
Employment
Benefits Custodial
Trust Fund Funds
ADDITIONS
Tax collections for other governments $ - $ 24,329,719
Other collections for third parties - 1,521,847
Employer contributions 2,091,172 -
Net investment income (loss) (2,001,928) -
Total additions 89,244 25,851,566
DEDUCTIONS
Payment of taxes to other governments - 24,329,719
Other payments to third parties - 1,521,847
Benefit payments 3,041,543 -
Administrative expenses 47,910 -
Total deductions 3,089,453 25,851,566
Change in net position (3,000,209) -
Net position at beginning of year 25,146,235 -
Net position at end of year $ 22,146,026 $ -
The accompanying notes are an integral part of this statement.
46
City of Muskegon
STATEMENT OF NET POSITION
Discretely Presented Component Units
June 30, 2022
Local
Development Tax
Finance Downtown Increment Brownfield
Authority - Development Finance Redevelopment
SmartZone Authority Authority Authorities Total
ASSETS
Current assets
Cash and investments $ 46,925 $ 336,989 $ 20,014 $ - $ 403,928
Accounts receivable - 32,616 - - 32,616
Total current assets 46,925 369,605 20,014 - 436,544
Noncurrent assets
Capital assets, net
Nondepreciable 400,000 - - - 400,000
Depreciable 589,881 - - - 589,881
Total noncurrent assets 989,881 - - - 989,881
Total assets 1,036,806 369,605 20,014 - 1,426,425
LIABILITIES
Current liabilities
Accounts payable - 109,697 - - 109,697
Accrued liabilities 5,400 4,289 - - 9,689
Due to other governmental units - 2,000 - - 2,000
Due to primary government - - - 64,211 64,211
Bonds and other obligations, due within one year 255,000 - - - 255,000
Total current liabilities 260,400 115,986 - 64,211 440,597
Noncurrent liabilities
Advances from primary government - - - 1,046,980 1,046,980
Bonds and other obligations, less amounts due
within one year 841,547 - - - 841,547
Total noncurrent liabilities 841,547 - - 1,046,980 1,888,527
Total liabilities 1,101,947 115,986 - 1,111,191 2,329,124
NET POSITION
Net investment in capital assets (106,666) - - - (106,666)
Unrestricted 41,525 253,619 20,014 (1,111,191) (796,033)
Total net position $ (65,141) $ 253,619 $ 20,014 $ (1,111,191) $ (902,699)
The accompanying notes are an integral part of this statement.
47
City of Muskegon
STATEMENT OF ACTIVITIES
Discretely Presented Component Units
For the year ended June 30, 2022
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 24,999 - 200,000 175,001 - - - 175,001
Total Local Development Finance
Authority - SmartZone 197,647 - 200,000 2,353 - - - 2,353
Downtown Development Authority
Economic development 810,219 655,765 - - (154,454) - - (154,454)
Tax Increment Finance Authority
Community and economic development 50,000 - - - - (50,000) - (50,000)
48
Brownfield Redevelopment Authorities
Community and economic development 648,065 - - - - - (648,065) (648,065)
Interest on long-term debt 17,940 - - - - - (17,940) (17,940)
Total Brownfield Redevelopment Authorities 666,005 - - - - - (666,005) (666,005)
Total discretely presented component units $ 1,723,871 $ 655,765 $ 200,000 2,353 (154,454) (50,000) (666,005) (868,106)
General revenues
Property taxes 85,861 321,446 42,475 689,328 1,139,110
Grants and contributions not restricted to specific programs 3,084 - 9,596 24,215 36,895
Unrestricted investment income 112 543 58 644 1,357
Miscellaneous - - - 674 674
Total general revenues 89,057 321,989 52,129 714,861 1,178,036
Change in net position 91,410 167,535 2,129 48,856 309,930
Net position at beginning of year (156,551) 86,084 17,885 (1,160,047) (1,212,629)
Net position at end of year $ (65,141) $ 253,619 $ 20,014 $ (1,111,191) $ (902,699)
The accompanying notes are an integral part of this statement.
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
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.
49
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
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, 2022, 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, 2021, the date
of its latest audited financial statements is as follows:
Total assets and deferred outflows of resources $ 3,562,172
Total liabilities and deferred inflows of resources (526,830)
Total net position $ 3,035,342
Total operating income $ 2,222,489
Total operating expenses (2,408,929)
Total nonoperating revenues 8
Capital contributions 4,557
Prior period adjustment 12,823
Change in net position $ (169,052)
50
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
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 Trinity Health Arena Fund accounts for revenues received for the operation and maintenance of
Trinity Health Arena.
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.
51
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
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 and pays for access to the County’s sewage treatment plant.
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.
52
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
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.
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.
53
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued
Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balance—Continued
Cash and Investments—Continued
The component unit’s cash and investments are maintained within the City’s investment pool.
For the purpose of the statement of cash flows, the City considers all assets held in the cash and investment
pool to be cash and cash equivalents because the investments are not identifiable to the specific funds and the
assets can be withdrawn at any time, similar to a demand deposit account.
Inventories and Prepaid Items
All inventories are valued at cost using the first-in/first-out (FIFO) method. The cost of such inventories is
recorded as expenses when consumed rather than when purchased in the business-type activities.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid
items in both government-wide and fund financial statements. The cost of prepaid items is recorded as
expenditures/expenses when consumed rather than when purchased.
Leases Receivable
The City is a lessor for certain noncancelable leases. The City recognizes a lease receivable and a deferred
inflow of resources in the government-wide and fund financial statements for each lease.
At the commencement of a lease, the City initially measures the lease receivable at the present value of
payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the
principal portion of lease payments received. The deferred inflow of resources is initially measured as the
initial amount of the lease receivable, adjusted for lease payment received at or before the lease
commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of
the lease term.
Key estimates and judgements include how the City determines (1) the discount rate is uses to discount the
expected lease receipts to present value, (2) lease term, and (3) lease receipts.
The City uses its estimated incremental borrowing rate as the discount rate for leases.
The lease term includes the noncancelable period of the lease. Lease receipts included in the measurement of
the lease receivable is composed of fixed payments from the lessee.
The City monitors changes in circumstances that would require a remeasurement of a lease, and will
remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to
significantly affect the amount of the lease receivable.
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.
As the City constructs or acquires additional capital assets each period, including infrastructure assets, they
are capitalized and reported at historical cost. The reported value excludes normal maintenance and repairs
which are essentially amounts spent in relation to capital assets that do not increase the capacity or efficiency
of the item or increase its estimated useful life. Donated capital assets are recorded at their estimated
acquisition value at the date of donation.
54
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued
Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balance—Continued
Capital Assets—Continued
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:
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 assets 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 assets that applies to a future period(s) and so will not be recognized as an inflow of
resources (revenue) until that time.
55
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
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.
56
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
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 2021 state taxable value for real/personal property of the City totaled approximately $628,694,000 of
which approximately $32,406,000 was captured by the component units. The ad valorem taxes levied
consisted of 9.918, 2.9754 and .0788 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 2021 financial statements have been reclassified to conform
to the 2022 presentation.
57
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
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, 2022, actual expenditures exceeded appropriations for:
Final
Budget Actual
General Fund
Culture and recreation
Parks maintenance $ 2,379,089 $ 2,482,189
Capital outlay 4,552,706 4,662,678
Transfers out 3,130,000 3,998,250
Trinity Health Arena Fund
Culture and recreation 2,160,000 2,274,570
These overexpenditures were funded with available fund balance.
Fund Deficits
As of June 30, 2022, the City’s Water Fund, Marina and Launch Ramp Fund, and Public Service Building
Fund had unrestricted fund net position deficits of $1,959,259, $395,374, and $204,432, respectively. These
deficits will be eliminated through future operations or an interfund transfer.
58
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE C—DEPOSITS AND INVESTMENTS
As of June 30, 2022, the City had the following investments:
Weighted
Average
Maturity
Fair Value (Months) S&P Percent
Investment Type
Money market funds $ 229,997 1 AAA 0.5 %
Negotiable certificates of deposit 1,440,497 25 not rated 3.0
US agency obligations 8,606,409 318 AA+ 18.0
Commercial paper 597,900 2 AA 1.2
External investment pool 14,913,867 2 AAA 31.1
MERS investment funds 22,146,026 N/A not rated 46.2
Total fair value $ 47,934,696 100.0 %
Portfolio weighted average maturity 109
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 7.4%
Government National Mortgage Association obligations 9.6%
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, 2022, $12,371,824 of the City’s bank balance of $12,871,824 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.
59
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
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, 2022, restricted
cash and investments in the Sewer and Water Fund of $101,000 and $728,000, 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.
60
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
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,
2022 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 $ 2,155 $ - $ - $ - $ - $ 28,006 $ 30,161
Dividends and interest 1,733 37,167 2,407 11,099 619 11 53,036
Realized and unrealized gain
(loss) on investments (13,227) (158,498) (17,993) (83,654) (4,675) - (278,047)
(9,339) (121,331) (15,586) (72,555) (4,056) 28,017 (194,850)
Expenses
Grants and scholarships - - 4,316 - - 41,592 45,908
Administration fees 619 7,711 1,932 5,210 228 560 16,260
Revenues over expenses (9,958) (129,042) (21,834) (77,765) (4,284) (14,135) (257,018)
Total assets at beginning of year 78,543 1,456,616 115,338 512,550 28,597 14,688 2,206,332
Total assets at end of year 68,585 1,327,574 93,504 434,785 24,313 553 1,949,314
Less assets recorded as those
of the Foundation (48,489) - (93,504) (434,785) (15,398) (553) (592,729)
Assets reported on the Balance
Sheet/Statement of Net Position $ 20,096 $ 1,327,574 $ - $ - $ 8,915 $ - $ 1,356,585
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.
61
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
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 has 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, 2022.
Money market funds: Valued at amortized cost, which approximates fair value.
Negotiable certificates of deposit, US agency obligations, and commercial paper: Valued at the closing
price reported on the active market on which the individual securities are traded.
62
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
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, 2022:
Assets at Fair Value as of June 30, 2022
Level 1 Level 2 Level 3 Total
Money market funds $ - $ 229,997 $ - $ 229,997
Negotiable certificates of deposit 1,440,497 - - 1,440,497
US agency obligations 8,606,409 - - 8,606,409
Commercial paper 597,900 - - 597,900
External investment pools - 14,913,867 - 14,913,867
MERS investment funds - 22,146,026 - 22,146,026
Assets managed by others - 1,356,585 - 1,356,585
Total assets at fair value $ 10,644,806 $ 38,646,475 $ - $ 49,291,281
63
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE F—LEASES RECEIVABLE
The City has entered into the following lease agreements as a lessor:
Cell Towers
The City leases the right to use space on land and buildings owned by the City to various third parties as part
of three separate lease agreements for the operation of cell phone antennas. These lease terms are generally
for 5 years with automatic renewals and the City receives monthly payments totaling $94,615, increasing by 3
percent each year.
Trinity Health Arena
The City leases the right to use shared space at Trinity Health Arena to a third party as part of an agreement
with a term of 5 years and with automatic renewals. The City receives monthly payments totaling $127,500,
increasing by 4 percent each renewal period.
The City also leases the right to use and manage restaurant space at Trinity Health Arena to various third
parties as part of two separate lease agreements. These lease terms are generally for 5 years with automatic
renewals and the City receives monthly payments totaling $49,034, increasing by 5-10 percent each year.
Fire Station
The City leases the right to use office space at the West Western Avenue Fire Station to a third party as part
of an agreement with terms through December 2045. The City receives monthly payments totaling $465,667,
which are tied to the reimbursement of payments on the City’s 2016 Limited Tax General Obligation
Refunding and 2020A Capital Improvement Bonds at a rate of 20.24 percent and 100 percent of the bond
payments attributable to improvements and additions of the fire station, respectively.
For the year ended June 30, 2022, the City recognized $412,760 and $79,027 in lease revenue for
governmental activities and business-type activities, respectively. For the year ended June 30, 2022, the City
also recognized $223,157 and $15,588 in interest revenue for governmental activities and business-type
activities, respectively. The City has deferred inflows of resources associated with these leases that will be
recognized as revenue over the term of the leases. As of June 30, 2022, the balances of these deferred inflows
of resources were $8,252,646 and $940,736 for governmental activities and business-type activities,
respectively.
The future minimum payments to be received for these leases are as follows:
Year Ending Governmental Activities Business-type Activities
June 30, Principal Interest Principal Interest
2023 $ 384,081 $ 258,752 $ 83,003 $ 14,451
2024 395,885 245,088 87,286 13,091
2025 408,699 230,893 72,822 11,725
2026 424,591 216,160 57,495 10,746
2027 447,353 200,622 60,484 9,804
2028-2032 2,099,022 752,842 154,762 39,837
2033-2037 845,416 536,767 175,718 27,377
2038-2042 1,086,360 396,733 223,961 11,481
2043-2047 1,023,496 235,271 25,205 118
2048-2052 824,394 116,289 - -
2053-2057 307,540 27,774 - -
2058 5,809 24 - -
$ 8,252,646 $ 3,217,215 $ 940,736 $ 138,630
64
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE G—CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2022 was as follows:
Balance Balance
July 1, 2021 Additions Deductions June 30, 2022
Governmental activities:
Capital assets, not being depreciated:
Land $ 14,258,844 $ 45,538 $ - $ 14,304,382
Construction in progress 29,095,524 7,078,678 28,208,708 7,965,494
Total capital assets, not being depreciated 43,354,368 7,124,216 28,208,708 22,269,876
Capital assets, being depreciated:
Land improvements 5,446,304 532,932 - 5,979,236
Leasehold improvements 534,821 - - 534,821
Buildings and improvements 32,106,677 23,863,141 - 55,969,818
Furniture, vehicles and equipment 16,791,683 2,631,539 96,375 19,326,847
Infrastructure 81,269,715 2,492,517 2,759,934 81,002,298
Shared improvements 6,905,293 - - 6,905,293
Total capital assets, being depreciated 143,054,493 29,520,129 2,856,309 169,718,313
Less accumulated depreciation:
Land improvements 2,413,770 159,223 - 2,572,993
Leasehold improvements 497,384 5,674 - 503,058
Buildings and improvements 18,797,687 510,135 - 19,307,822
Furniture, vehicles and equipment 13,013,673 872,833 60,166 13,826,340
Infrastructure 43,496,575 3,598,791 2,759,934 44,335,432
Shared improvements 5,492,580 345,265 - 5,837,845
Total accumulated depreciation 83,711,669 5,491,921 2,820,100 86,383,490
Total capital assets, being
depreciated, net 59,342,824 24,028,208 36,209 83,334,823
Capital assets, net $ 102,697,192 $ 31,152,424 $ 28,244,917 $ 105,604,699
Business-type activities:
Capital assets, not being depreciated:
Land $ 142,250 $ - $ - $ 142,250
Construction in progress 11,912,532 8,394,483 5,482,857 14,824,158
Total capital assets, not being depreciated 12,054,782 8,394,483 5,482,857 14,966,408
Capital assets, being depreciated:
Land improvements 1,951,913 34,439 - 1,986,352
Buildings, improvements and systems 107,269,475 5,482,856 - 112,752,331
Machinery and equipment 3,320,032 - - 3,320,032
Total capital assets, being depreciated 112,541,420 5,517,295 - 118,058,715
Less accumulated depreciation:
Land improvements 1,850,120 10,901 - 1,861,021
Buildings, improvements and systems 56,527,098 2,578,528 - 59,105,626
Machinery and equipment 2,905,070 65,766 - 2,970,836
Total accumulated depreciation 61,282,288 2,655,195 - 63,937,483
Total capital assets, being
depreciated, net 51,259,132 2,862,100 - 54,121,232
Capital assets, net $ 63,313,914 $ 11,256,583 $ 5,482,857 $ 69,087,640
65
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE G—CAPITAL ASSETS—Continued
Depreciation
Depreciation expense was charged to functions as follows:
Governmental activities:
Public representation services $ 4,503
Adminstrative services 2,832
Public safety 261,386
Public works 18,017
Highways, streets and bridges 4,073,665
Community and economic development 66,269
Culture and recreation 539,484
General administration 26,299
Internal Service Fund depreciation 499,466
$ 5,491,921
Business-type activities:
Sewer $ 630,870
Water 1,916,908
Marina and Launch Ramp 107,417
$ 2,655,195
Balance Balance
July 1, 2021 Additions Deductions June 30, 2022
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 3,035,729 172,648 - 3,208,377
Total capital assets, being
depreciated, net 762,529 (172,648) - 589,881
Capital assets, net $ 1,162,529 $ (172,648) $ - $ 989,881
Depreciation expense was charged to economic development.
66
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE H—INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
The composition of interfund balances as of June 30, 2022 is as follows:
Due To/From Other Funds:
Receivable Fund Payable Fund Amount
General Fund Trinity Health Arena Fund $ 1,072,733
General Fund Lead Abatement Fund 32,418
General Fund Healthy Homes Fund 1,266
General Fund Water Fund 1,014,690
General Fund Marina and Launch Ramp Fund 275,453
$ 2,396,560
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
$64,211 for having a negative position in the City’s cash and investment pool.
The Brownfield Redevelopment Authorities have also been advanced $1,046,980 from the City’s
governmental activities as a long-term loan.
Interfund Transfers:
Transfers In Amount Transfers Out Amount
Nonmajor Governmental Funds
Local Streets Fund $ 100,000 General Fund $ 3,557,500
Trinity Health Arena Fund 865,000
Tree Replacement Fund 2,500
Farmers Market and
Kitchen 242 Fund 40,000
Public Improvement Fund 50,000
Convention Center Fund 2,500,000
3,557,500 3,557,500
Internal Service Funds
Public Service Building Fund 400,000 General Fund 400,000
General Fund 5,798,549 State Grants Fund 5,798,549
State Grants Fund 40,750 General Fund 40,750
Nonmajor Governmental Funds Nonmajor Governmental Funds
Farmers Market and Senior Millage Fund 85,000
Kitchen 242 Fund 85,000 HOME Rehabilitation Fund 316,000
Public Improvement Fund 316,000
401,000 401,000
Nonmajor Governmental Funds
Lakeshore BID Fund 35,000 Water Fund 35,000
$ 10,232,799 $ 10,232,799
67
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE H—INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS—Continued
The General Fund transferred funds to the Trinity Health Arena Fund, Public Service Building Fund, and
other funds for operation subsidies. The General Fund transferred funds to the Local Streets Fund and
Convention Center Fund for capital purposes. The State Grants Fund transferred funds to the General Fund
for various American Rescue Plan Act projects. The Senior Millage Fund transferred funds to the Farmers
Market and Kitchen 242 Fund to provide services to seniors. Other transfers between funds were made to
meet grant matching requirements or other operational needs.
NOTE I—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, 2022.
Balance Balance
July 1, 2021 Additions Deductions June 30, 2022
Governmental activities:
Short-term note $ 1,108,007 $ 233,503 $ 1,257,213 $ 84,297
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.
68
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE J—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, 2022.
Balance Balance Due Within
July 1, 2021 Additions Deductions June 30, 2022 One Year
Governmental activities:
Public placement debt
General obligation debt $ 29,670,000 $ - $ 1,145,000 $ 28,525,000 $ 970,000
Discount (135,650) - (7,500) (128,150) -
Premium 962,327 - 129,400 832,927 -
Direct borrowings and
direct placements
Installment purchase
agreements - 1,370,873 197,462 1,173,411 268,269
Compensated absences 2,286,388 1,944,694 1,819,970 2,411,112 482,200
Governmental activities
long-term liabilities $ 32,783,065 $ 3,315,567 $ 3,284,332 $ 32,814,300 $ 1,720,469
Business-type activities:
Public placement debt
Revenue obligations $ 9,056,453 $ 6,585,012 $ 1,266,750 $ 14,374,715 $ 1,295,000
Compensated absences 270,451 336,577 288,146 318,882 63,700
Business-type activities
long-term liabilities $ 9,326,904 $ 6,921,589 $ 1,554,896 $ 14,693,597 $ 1,358,700
Component units:
Public placement debt
General obligation debt $ 1,325,000 $ - $ 245,000 $ 1,080,000 $ 255,000
Premium 27,248 - 10,701 16,547 -
Component unit long-
term liabilities $ 1,352,248 $ - $ 255,701 $ 1,096,547 $ 255,000
69
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE J—LONG-TERM DEBT—Continued
Public Placement Debt
General Obligation Debt
The City has issued general obligation debt to provide funds for the acquisition and construction of major
capital facilities. General obligation debt is a direct obligation and pledges the full faith and credit of the City.
This debt is generally issued as serial bonds with varying amounts of principal maturing each year. Certain
debt issued by the City’s component units is also backed by the full faith and credit of the City if there is a
shortfall in tax increment revenues.
General obligation debt outstanding as of June 30, 2022 is as follows:
Original Date of
Borrowing Interest Rate Maturity Balance
General obligation debt:
Governmental activities:
2016 Limited Tax General Obligation
Refunding Bonds $ 4,535,000 3% - 4% October 2032 $ 3,510,000
2019 Capital Improvement Bonds 19,420,000 1.88% - 3.58% December 2049 19,040,000
2020A Capital Improvement Bonds 4,325,000 2.5% - 5% October 2040 4,005,000
2020B Capital Improvement Bonds 2,055,000 .68% - 3.2% October 2041 1,970,000
$ 28,525,000
Component units:
2012 LDFA Tax Increment Refunding Bonds $ 4,100,000 3% - 4% November 2025 $ 1,080,000
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, 2022 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 $ 3,265,000
2019 Water Supply System Junior Lien Bond 2,000,000 2% October 2025 1,535,000
2019 Sanitary Sewer System Junior Lien Bond 11,500,000 2% October 2033 2,755,000
2020 Water Supply System Junior Lien Bond 3,829,101 2% April 2041 3,294,101
2020 Sanitary Sewer System Junior Lien Bond 4,620,614 2% April 2041 3,525,614
$ 14,374,715
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 48
percent of net revenues through 2025. The total principal and interest remaining to be paid on the bond is
$3,405,517. Principal and interest paid for the year ended June 30, 2022 and total customer net revenues were
$852,616 and $1,770,461, respectively.
The City was in compliance in all material respects with all the revenue bond ordinances at June 30, 2022.
70
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE J—LONG-TERM DEBT—Continued
Public Placement Debt—Continued
Installment Purchase Agreements
The City has entered into an installment agreement for a ladder truck in 2021. The installment purchase
agreement is secured by the equipment purchase if the City defaults under the agreement. Installment
purchase agreements outstanding as of June 30, 2022 are as follows:
Original Date of
Borrowing Interest Rate Maturity Balance
Installment purchase agreements:
Governmental activities:
2021 Equipment Installment Loan $ 1,370,873 1.78% October 2025 $ 1,173,411
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, 2022 was approximately $1,813,000. 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, 2022 follow:
Governmental Activities
Direct Borrowings and Business-type Activities
Year Ending Public Placement Debt Direct Placements Public Placement Debt
June 30, Principal Interest Principal Interest Principal Interest
2023 $ 970,000 $ 957,231 $ 268,269 $ 18,471 $ 1,295,000 $ 283,870
2024 1,050,000 926,991 273,023 13,717 1,330,000 256,720
2025 1,100,000 892,982 277,860 8,880 1,355,000 228,948
2026 1,140,000 856,998 282,784 3,956 1,380,000 200,607
2027 1,180,000 817,356 71,475 210 550,000 180,882
2028-2032 6,105,000 3,399,345 - - 2,925,000 734,260
2033-2037 3,890,000 2,570,905 - - 3,210,000 430,510
2038-2042 4,440,000 1,913,763 - - 2,329,715 107,546
2043-2047 4,980,000 1,117,090 - - - -
2048-2050 3,670,000 201,554 - - - -
$ 28,525,000 $ 13,654,215 $ 1,173,411 $ 45,234 $ 14,374,715 $ 2,423,343
71
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE J—LONG-TERM DEBT—Continued
Public Placement Debt—Continued
Component Units
Year Ending Public Placement Debt
June 30, Principal Interest
2023 $ 255,000 $ 28,575
2024 265,000 20,775
2025 275,000 12,675
2026 285,000 4,275
2027 - -
2028-2032 - -
2033-2037 - -
2038-2042 - -
2043-2047 - -
2048-2050 - -
$ 1,080,000 $ 66,300
Annual debt service requirements to maturity by type of debt as of June 30, 2022 follow:
Installment
Revenue Purchase
General Obligation Debt Obligations Agreements
Year Ending Governmental Component Business-type Governmental
June 30, Activities Units Activities Activities
2023 $ 1,927,231 $ 283,575 $ 1,578,870 $ 286,740
2024 1,976,991 285,775 1,586,720 286,740
2025 1,992,982 287,675 1,583,948 286,740
2026 1,996,998 289,275 1,580,607 286,740
2027 1,997,356 - 730,882 71,685
2028-2032 9,504,345 - 3,659,260 -
2033-2037 6,460,905 - 3,640,510 -
2038-2042 6,353,763 - 2,437,261 -
2043-2047 6,097,090 - - -
2048-2050 3,871,554 - - -
$ 42,179,215 $ 1,146,300 $ 16,798,058 $ 1,218,645
72
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE K—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 2022 and 2021 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, 2022 $ 103,646 $ 556,421 $ 173,314 $ 486,753
June 30, 2021 133,364 138,186 167,904 103,646
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, 2022, the claims liability including incurred but
not reported claims was $33,172. 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 2022 and 2021
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, 2022 $ 63,118 $ 4,738,715 $ 4,768,661 $ 33,172
June 30, 2021 111,410 4,414,715 4,463,007 63,118
73
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE K—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 and other
capital improvements as of June 30, 2022 with a remaining amount of approximately $13,605,000.
Approximately $1,722,000 and $1,351,000 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
General $ 621,000
Major Street and Trunkline 4,078,000
Mercy Health Arena 833,000
Public Improvement 105,000
State Grant 2,203,000
Sewer 2,237,000
Water 3,528,000
$ 13,605,000
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, 2022, the City has committed approximately $189,000 of
fund balance in the General Fund to this program.
74
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE L—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, 2022, the City abated property taxes revenues totaling $107,143 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, 2022, the City abated property taxes revenues totaling $185,801 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, 2022, the City abated property taxes revenues totaling $149,880 under this
program.
NOTE M—EMPLOYEE RETIREMENT SYSTEM AND PENSION PLAN
Defined Benefit Pension Plan
Plan Description
The City’s defined benefit pension plan provides certain retirement, disability and death benefits to plan
members and beneficiaries. 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
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.
75
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE M—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, 2021 valuation date, the following employees were covered by the benefit terms:
Inactive employees or beneficiaries currently receiving benefits 337
Inactive employees entitled to but not yet receiving benefits 33
Active employees 62
Total employees covered by MERS 432
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, 2022, the City had a flat-dollar employer contribution to the Plan of $3,724,080
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, 2021, and the total pension liability used to
calculate the net pension liability was determined by an annual actuarial valuation as of that date.
76
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE M—EMPLOYEE RETIREMENT SYSTEM AND PENSION PLAN—Continued
Defined Benefit Pension Plan—Continued
Actuarial Assumptions
The total pension liability in the December 31, 2021 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 7.00 percent, net of investment and administrative expenses
including inflation
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 geometric 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% 7.00% 4.20% 2.50% 2.70%
Global fixed income 20.0% 4.50% 0.90% 2.50% 0.40%
Private assets 20.0% 9.50% 1.90% 2.50% 1.40%
Total 100.0% 7.00% 4.50%
Discount Rate
The discount rate used to measure the total pension liability was 7.25 percent for 2021. 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.
77
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE M—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, 2021 $ 125,918,365 $ 93,025,193 $ 32,893,172
Changes for the year
Service cost 529,832 - 529,832
Interest 9,237,064 - 9,237,064
Difference between expected and
actual experience 256,636 - 256,636
Changes in assumptions 4,396,829 - 4,396,829
Contributions - employer - 3,313,056 (3,313,056)
Contributions - employee - 304,680 (304,680)
Net investment income - 12,779,029 (12,779,029)
Administrative expenses - (146,581) 146,581
Benefit payments including refund of
employee contributions (9,285,923) (9,285,923) -
Net changes 5,134,438 6,964,261 (1,829,823)
Balance at December 31, 2021 $ 131,052,803 $ 99,989,454 $ 31,063,349
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 7.25 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 (6.25 percent) or 1-percentage-point higher (8.25 percent) than the current rate:
1% Decrease Current Discount 1% Increase
(6.25%) Rate (7.25%) (8.25%)
City's net pension liability $ 45,217,643 $ 31,063,349 $ 19,159,352
78
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE M—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, 2022, the City recognized pension expense of $5,712,267. At June 30, 2022, 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 $ - $ 6,950,178
Contributions subsequent to the
measurement date* 1,862,040 -
Total $ 1,862,040 $ 6,950,178
*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,
2023.
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
2023 $ (827,997)
2024 (2,930,530)
2025 (2,003,322)
2026 (1,188,329)
Payables to the Pension Plan
At June 30, 2022, the City reported a payable of $329,476 for the outstanding amount of contributions to the
pension plan required for the year ended June 30, 2022.
79
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE M—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 8 percent of
annual compensation depending on employee group. For the year ended June 30, 2022, City and employee
contributions were $1,225,250 and $520,495, 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, 2022, forfeitures reduced the City’s pension expense by $83,099.
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 N—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.
80
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE N—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, 2021 valuation, the following employees were covered by the benefit terms:
Active members 81
Inactive members 31
Retirees and beneficiaries 309
Total employees covered by OPEB Plan 421
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, 2022, the City made payments for postemployment healthcare benefits of $650,383.
Net OPEB Liability
The City’s net OPEB liability was measured as of December 31, 2021, and the total OPEB liability used to
calculate the net OPEB liability was determined by an actuarial valuation as December 31, 2021.
81
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE N—OTHER POSTEMPLOYMENT BENEFITS—Continued
Retiree Healthcare Plan—Continued
Actuarial Assumptions
The total OPEB liability in the December 31, 2021 actuarial valuation was determined using the following
actuarial assumptions, applied to all periods included in the measurement:
Inflation 2.5 percent
Salary increases 0.0 percent
Investment rate of return 7.35 percent (including inflation), net of administrative and investment expenses
Healthcare cost trend rates Pre-Medicare: 7.25 percent graded down by .25 per year to an ultimate rate of 4.5 percent
Post-Medicare: 5.5 percent graded down by .25 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-2021 improvement scale. Mortality rates for others were as set forth in the Public
General 2010 Employee and Healthy Retiree, headcount weighted, MP-2021 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
Global equity 60.0% 7.75% 4.65% 2.50% 3.15%
Global fixed income 20.0% 3.75% 0.75% 2.50% 0.25%
Private investments 20.0% 9.75% 1.95% 2.50% 1.45%
Total 100.0% 7.35% 4.85%
Discount Rate
The discount rate used to measure the total OPEB liability was 7.35 percent. The projection of cash flows
used to determine the discount rate assumed that the City will make future contributions at levels at least as
high as the 2021 contribution up to 8 percent higher per year. 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”, not applicable for this plan), 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, 2020 the discount rate used to value OPEB liabilities was 6.24 percent.
82
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE N—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, 2021 $ 32,757,983 $ 22,917,388 $ 9,840,595
Changes for the year
Service cost 142,556 - 142,556
Interest 1,999,639 - 1,999,639
Difference between expected and
actual experience (2,420,665) - (2,420,665)
Changes of assumptions (2,771,809) - (2,771,809)
Contributions - employer - 1,767,843 (1,767,843)
Net investment income - 2,574,713 (2,574,713)
Administrative expenses - (47,967) 47,967
Benefit payments including refund of
employee contributions (1,710,064) (1,710,064) -
Net changes (4,760,343) 2,584,525 (7,344,868)
Balance at December 31, 2021 $ 27,997,640 $ 25,501,913 $ 2,495,727
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate
The following presents the net OPEB liability of the City, calculated using the discount rate of 7.35 percent,
as well as what the City's net OPEB liability would be if it were calculated using a discount rate that is 1-
percentage-point lower (6.35 percent) or 1-percentage-point higher (8.35 percent) than the current rate:
1% Decrease Current Discount 1% Increase
(6.35%) Rate (7.35%) (8.35%)
City's net OPEB liability $ 5,123,437 $ 2,495,727 $ 271,550
83
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE N—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 7.25 percent, decreasing to 4.5 percent and post-Medicare of 5.5 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 (6.25 percent decreasing to 3.5 percent or 4.5 percent decreasing
to 3.5 percent) or 1-percentage-point higher (8.25 percent decreasing to 5.5 percent or 6.5 percent decreasing
to 5.5 percent) than the current rate:
Current
Healthcare Cost
1% Decrease Trend Rate 1% Increase
City's net OPEB liability $ 310,673 $ 2,495,727 $ 5,044,676
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, 2022, the City recognized OPEB expense of ($3,582,893). At June 30, 2022, the
City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the
following sources:
Deferred Outflows of Deferred Inflows of
Resources Resources
Differences in experience $ - $ 544,181
Changes in assumptions - 623,120
Net difference between projected
and actual net investment income - 1,472,132
Contributions subsequent to the
measurement date* 1,017,232 -
Total $ 1,017,232 $ 2,639,433
*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,
2023.
84
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE N—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
2023 $ (1,355,158)
2024 (645,978)
2025 (409,423)
2026 (228,874)
Payables to the OPEB Plan
At June 30, 2022, 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, 2022, City and employee contributions were $530,720 and $248,630,
respectively.
85
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE O—CHANGE IN ACCOUNTING PRINCIPLE
For the year ended June 30, 2022, the City implemented the following new pronouncement: GASB Statement
No. 87, Leases.
Governmental Accounting Standards Board (GASB) Statement No. 87, Leases, was issued by the GASB in
June 2017. The objective of this Statement is to increase 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 the 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.
The restatement of beginning of the year has no impact on net position or fund balance. The change in
receivables and deferred inflows are as follows:
Balance Sheet - General Fund
Leases Receivable Deferred Inflows
Balances as of July 1, 2021, as previously stated $ - $ -
Adoption of GASB Statement 87 4,114,819 4,114,819
Balances as of July 1, 2021, as restated $ 4,114,819 $ 4,114,819
Balance Sheet - Trinity Health Arena Fund
Leases Receivable Deferred Inflows
Balances as of July 1, 2021, as previously stated $ - $ -
Adoption of GASB Statement 87 3,324,454 3,324,454
Balances as of July 1, 2021, as restated $ 3,324,454 $ 3,324,454
Statement of Net Position - Water Fund
Leases Receivable Deferred Inflows
Balances as of July 1, 2021, as previously stated $ - $ -
Adoption of GASB Statement 87 1,019,762 1,019,762
Balances as of July 1, 2021, as restated $ 1,019,762 $ 1,019,762
86
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2022
NOTE O—CHANGE IN ACCOUNTING PRINCIPLE—Continued
Statement of Net Position - Governmental
Activities
Leases Receivable Deferred Inflows
Balances as of July 1, 2021, as previously stated $ - $ -
Adoption of GASB Statement 87 7,439,273 7,439,273
Balances as of July 1, 2021, as restated $ 7,439,273 $ 7,439,273
Statement of Net Position - Business-type
Activities
Leases Receivable Deferred Inflows
Balances as of July 1, 2021, as previously stated $ - $ -
Adoption of GASB Statement 87 1,019,762 1,019,762
Balances as of July 1, 2021, as restated $ 1,019,762 $ 1,019,762
NOTE P—UPCOMING ACCOUNTING PRONOUNCEMENT
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.
NOTE Q—SUBSEQUENT EVENT
On September 20, 2022, the City issued Revenue Bonds for the Water Fund of $4,843,000 for improvements
to the drinking water system.
87
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88
REQUIRED SUPPLEMENTARY INFORMATION
89
City of Muskegon
BUDGETARY COMPARISON SCHEDULE
General Fund
For the year ended June 30, 2022
(with comparative actual amounts for the year ended June 30, 2021)
2022 2021
Budgeted Amounts Variance with
Original Final Actual Final Budget Actual
REVENUES
Taxes
City income taxes $ 9,100,000 $ 9,300,000 $ 10,002,623 $ 702,623 $ 9,256,826
Property taxes 7,916,754 8,263,500 7,980,885 (282,615) 7,624,483
Industrial facilities taxes 200,000 175,000 155,353 (19,647) 211,811
Payments in lieu of taxes 662,541 662,541 656,785 (5,756) 607,538
Total taxes 17,879,295 18,401,041 18,795,646 394,605 17,700,658
Licenses and permits
Business licenses 43,000 45,000 43,875 (1,125) 45,415
Liquor licenses 50,000 65,000 65,054 54 45,808
Marihuana facilities licenses 102,500 195,000 175,500 (19,500) 189,200
Cable TV fees 370,000 370,000 369,420 (580) 374,219
Rental property registration 397,500 399,500 412,225 12,725 397,236
Burial permits 80,000 75,000 69,200 (5,800) 74,435
Building permits 800,000 775,000 755,346 (19,654) 683,883
Electrical permits 201,000 190,000 172,506 (17,494) 194,056
Plumbing permits 98,000 98,000 87,562 (10,438) 99,165
Mechanical permits 146,000 135,000 130,775 (4,225) 136,858
Vacant building fees 3,500 30,000 24,585 (5,415) 6,100
Total licenses and permits 2,291,500 2,377,500 2,306,048 (71,452) 2,246,375
Intergovernmental revenues
Federal grants 333,344 270,000 291,918 21,918 1,667,916
State
Grants 924,000 1,393,000 1,392,403 (597) 1,018,505
State shared revenue 4,399,008 4,399,008 5,087,587 688,579 4,733,888
Total intergovernmental revenues - State 5,323,008 5,792,008 6,479,990 687,982 5,752,393
Local - - 50,000 50,000 50,000
90
City of Muskegon
BUDGETARY COMPARISON SCHEDULE—CONTINUED
General Fund
For the year ended June 30, 2022
(with comparative actual amounts for the year ended June 30, 2021)
2022 2021
Budgeted Amounts Variance with
Original Final Actual Final Budget Actual
Charges for services
Tax administration fees $ 327,000 $ 386,000 $ 389,161 $ 3,161 $ 369,323
Utility administration fees 310,000 310,000 310,000 - 310,000
Reimbursement for elections - 20,000 2,464 (17,536) 75
Brownfield authority admin fee 275,000 275,000 275,000 - 175,000
Indirect cost reimbursements 1,481,624 1,440,116 1,440,116 - 1,278,590
Site plan review fee 5,800 12,000 10,900 (1,100) 8,900
Sale of cemetery lots 30,000 40,000 33,493 (6,507) 47,339
Police miscellaneous 145,200 224,200 250,874 26,674 130,990
Police impound fees 40,000 40,000 37,903 (2,097) 46,309
Landlord's alert fee 30,000 30,000 25,783 (4,217) 25,766
Fire protection - state property 119,574 101,158 101,158 - 119,574
Zoning fees 19,500 30,300 27,785 (2,515) 21,580
Muskegon Heights zoning 15,000 7,600 2,310 (5,290) 11,270
Clerk fees 2,000 9,000 32,493 23,493 1,387
Clerk fees - passport fees 40,000 44,000 45,480 1,480 5,555
Tax abatement application fees 14,400 9,500 7,280 (2,220) 4,085
Treasurer fees 42,000 34,900 76,621 41,721 57,618
False alarm fees 7,000 7,000 7,785 785 5,880
Miscellaneous cemetery income 16,000 40,000 32,615 (7,385) 34,956
Downtown social district 36,750 75,000 79,102 4,102 7,281
Fire miscellaneous 14,000 14,500 10,922 (3,578) 16,334
Sanitation stickers 404,100 437,700 451,038 13,338 435,659
Lot cleanup fees 39,500 37,500 27,808 (9,692) 34,615
Reimbursements - lot mowing and demolitions 5,000 - - - -
Special events reimbursements 50,000 15,000 22,621 7,621 (34,762)
Recreation program fees 8,000 21,500 22,192 692 14,890
Parking 500,000 720,000 837,125 117,125 543,794
Other charges for services - 10,000 6,000 (4,000) -
Total charges for services 3,977,448 4,391,974 4,566,029 174,055 3,672,008
Fines and forfeitures
Income tax - penalty and interest 200,000 200,000 189,868 (10,132) 286,818
Late fees on current taxes 20,000 20,000 17,878 (2,122) 15,574
Interest on late invoices 11,000 17,400 17,777 377 16,179
Parking fines 135,000 242,000 249,725 7,725 149,864
Court fines 120,000 90,000 74,789 (15,211) 97,979
Civil infractions 15,000 31,000 31,332 332 18,057
Total fines and forfeitures 501,000 600,400 581,369 (19,031) 584,471
Investment earnings and rental income
Interest income 100,000 75,000 254,524 179,524 98,623
Net increase (decrease) in the fair value of investments - - (918,392) (918,392) (163,278)
City right of way rental 6,800 2,400 2,400 - 2,000
Fire station lease - Central Dispatch 480,708 490,000 353,579 (136,421) 101,084
Parking rentals 68,750 68,750 55,239 (13,511) 61,935
Great Lakes Naval Memorial lease 15,000 - - - -
McGraft Park rentals 97,000 97,000 92,841 (4,159) 48,016
Other park rentals 49,000 68,500 66,459 (2,041) 50,028
Total investment earnings and rental income 817,258 801,650 (93,350) (895,000) 198,408
91
City of Muskegon
BUDGETARY COMPARISON SCHEDULE—CONTINUED
General Fund
For the year ended June 30, 2022
(with comparative actual amounts for the year ended June 30, 2021)
2022 2021
Budgeted Amounts Variance with
Original Final Actual Final Budget Actual
Other
Sale of land and assets $ - $ - $ 356 $ 356 $ -
Police sale and auction proceeds 1,000 500 4,872 4,372 385
CDBG program reimbursements 438,910 399,910 412,269 12,359 495,554
Fisherman's Landing reimbursement 17,500 28,039 28,039 - 23,706
Contributions 62,000 302,000 265,700 (36,300) 558,945
Contributions - Veteran's Park maintenance 18,500 16,900 16,889 (11) 12,904
Community Foundation for Muskegon County 35,534 10,691 10,691 - 10,144
Miscellaneous and sundry 95,000 426,069 428,301 2,232 82,616
Total other 668,444 1,184,109 1,167,117 (16,992) 1,184,254
Total revenues 31,791,297 33,818,682 34,144,767 326,085 33,056,483
EXPENDITURES
Current
Public representation services
City commission 87,223 107,877 106,980 897 96,287
City promotions and public relations 76,200 76,200 66,682 9,518 56,041
City manager 529,550 504,900 490,999 13,901 430,424
Contributions to outside agencies 405,329 577,622 567,952 9,670 541,614
City attorney 380,000 505,000 526,315 (21,315) 431,961
Total public representation services 1,478,302 1,771,599 1,758,928 12,671 1,556,327
Administrative services
City clerk 688,230 683,500 709,596 (26,096) 569,368
Civil service 241,545 255,965 236,245 19,720 214,035
Total administrative services 929,775 939,465 945,841 (6,376) 783,403
Financial services
Finance administration 643,850 642,300 642,543 (243) 643,392
Assessing 415,948 416,500 415,917 583 348,753
Arena administration - - 8,196 (8,196) 10,797
Income tax administration 414,753 409,000 403,538 5,462 400,206
Information systems 550,571 675,500 651,932 23,568 524,565
City treasurer 647,227 625,500 637,622 (12,122) 615,675
Pension administration 2,908,506 2,908,506 2,908,506 - 2,266,951
Total financial services 5,580,855 5,677,306 5,668,254 9,052 4,810,339
Public safety
Police department 10,234,869 10,738,500 10,758,657 (20,157) 9,862,730
Fire department 3,164,026 3,021,811 3,034,373 (12,562) 2,908,093
Fire safety inspections 2,007,745 2,022,000 1,727,952 294,048 1,870,745
Total public safety 15,406,640 15,782,311 15,520,982 261,329 14,641,568
92
City of Muskegon
BUDGETARY COMPARISON SCHEDULE—CONTINUED
General Fund
For the year ended June 30, 2022
(with comparative actual amounts for the year ended June 30, 2021)
2022 2021
Budgeted Amounts Variance with
Original Final Actual Final Budget Actual
Public works
Street lighting $ 350,000 $ 350,000 $ 356,973 $ (6,973) $ 382,729
Community event support 92,100 121,000 130,198 (9,198) 100,206
General sanitation 2,037,262 2,345,700 2,344,186 1,514 2,285,497
Storm water management 14,000 30,000 22,233 7,767 4,000
City hall maintenance 325,711 350,000 365,188 (15,188) 310,492
Cemeteries maintenance 473,402 481,382 509,515 (28,133) 360,056
Total public works 3,292,475 3,678,082 3,728,293 (50,211) 3,442,980
Community and economic development
Planning, zoning and economic development 556,100 565,500 542,191 23,309 488,691
Environmental services - 1,500 1,502 (2) 177
Edison Landing subsidy 200,000 200,000 200,000 - 350,000
Total community and economic development 756,100 767,000 743,693 23,307 838,868
Culture and recreation
Parks maintenance 1,899,516 2,379,089 2,482,189 (103,100) 1,665,740
McGraft Park maintenance 123,075 148,175 142,840 5,335 131,222
General and inner city recreation programs - 5,500 5,482 18 305
Forestry 80,000 82,500 81,501 999 56,567
Parking operations 45,600 51,330 100,522 (49,192) 89,542
Farmers market and flea market - - 41 (41) 99
Social district 36,750 47,000 26,905 20,095 5,639
Total culture and recreation 2,184,941 2,713,594 2,839,480 (125,886) 1,949,114
Other governmental functions
Insurance premiums 389,881 464,000 450,719 13,281 351,344
Other 50,000 50,000 34,305 15,695 28,888
Total other governmental functions 439,881 514,000 485,024 28,976 380,232
Debt service
Principal 710,000 907,462 907,462 - 2,285,300
Interest and fees 372,000 390,593 390,771 (178) 250,991
Bond issuance costs - 1,000 1,000 - 140,750
Total debt service 1,082,000 1,299,055 1,299,233 (178) 2,677,041
Capital outlay 1,829,588 4,552,706 4,662,678 (109,972) 4,358,050
Total expenditures 32,980,557 37,695,118 37,652,406 42,712 35,437,922
Excess of revenues over (under) expenditures (1,189,260) (3,876,436) (3,507,639) 368,797 (2,381,439)
93
City of Muskegon
BUDGETARY COMPARISON SCHEDULE—CONTINUED
General Fund
For the year ended June 30, 2022
(with comparative actual amounts for the year ended June 30, 2021)
2022 2021
Budgeted Amounts Variance with
Original Final Actual Final Budget Actual
OTHER FINANCING SOURCES (USES)
Long-term debt issued $ 1,085,275 $ 289,176 $ 1,370,873 $ 1,081,697 $ 4,325,000
Refunding bonds issued - - - - 2,055,000
Premium on bonds issued - - - - 772,424
Transfers in 1,080,000 6,828,548 5,798,549 (1,029,999) -
Transfers out (915,000) (3,130,000) (3,998,250) (868,250) (1,475,000)
Total other financing sources (uses) 1,250,275 3,987,724 3,171,172 (816,552) 5,677,424
Net change in fund balance $ 61,015 $ 111,288 (336,467) $ (447,755) 3,295,985
Fund balance at beginning of year 11,197,840 7,901,855
Fund balance at end of year $ 10,861,373 $ 11,197,840
Note: Both budgets and actual figures are prepared in accordance with generally accepted accounting principles.
94
City of Muskegon
BUDGETARY COMPARISON SCHEDULE
Major Street and Trunkline Fund
For the year ended June 30, 2022
Budgeted Amounts Variance with
Original Final Actual Final Budget
REVENUES
Intergovernmental revenues
Federal $ 1,109,848 $ 566,848 $ - $ (566,848)
State 4,881,000 5,111,000 4,809,424 (301,576)
Investment earnings 5,000 10,000 11,627 1,627
Other - 360,000 323,508 (36,492)
Total revenues 5,995,848 6,047,848 5,144,559 (903,289)
EXPENDITURES
Current
Highways, streets and bridges 5,892,486 5,040,138 3,798,863 1,241,275
Debt service
Principal - 230,000 230,000 -
Interest and fees - 3,503 3,503 -
Total expenditures 5,892,486 5,273,641 4,032,366 1,241,275
Net change in fund balance $ 103,362 $ 774,207 1,112,193 $ 337,986
Fund balance at beginning of year 2,408,053
Fund balance at end of year $ 3,520,246
Note: Both budgets and actual figures are prepared in accordance with generally accepted accounting principles.
95
City of Muskegon
BUDGETARY COMPARISON SCHEDULE
Trinity Health Arena Fund
For the year ended June 30, 2022
Budgeted Amounts Variance with
Original Final Actual Final Budget
REVENUES
Intergovernmental revenues
Federal $ - $ 625,498 $ 625,498 $ -
Charges for services 1,075,267 1,961,518 2,683,567 722,049
Investment earnings - - 79,782 79,782
Other 9,500 662,202 14,904 (647,298)
Total revenues 1,084,767 3,249,218 3,403,751 154,533
EXPENDITURES
Current
Culture and recreation 1,723,805 2,160,000 2,274,570 (114,570)
Capital outlay 125,000 2,137,760 1,987,141 150,619
Total expenditures 1,848,805 4,297,760 4,261,711 36,049
Excess of revenues over (under) expenditures (764,038) (1,048,542) (857,960) 190,582
OTHER FINANCING SOURCES
Transfers in 1,029,203 779,203 865,000 85,797
Net change in fund balance $ 265,165 $ (269,339) 7,040 $ 276,379
Fund balance at beginning of year 54,928
Fund balance at end of year $ 61,968
Note: Both budgets and actual figures are prepared in accordance with generally accepted accounting principles.
96
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)
2021 2020 2019 2018 2017 2016 2015 2014
TOTAL PENSION LIABILITY
Service cost $ 529,832 $ 615,293 $ 732,228 $ 806,565 $ 1,018,541 $ 1,130,408 $ 1,194,909 $ 1,190,507
Interest 9,237,064 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 256,636 2,829,299 1,830,804 3,642,392 1,326,122 (1,697,797) (647,017) -
Changes in assumptions 4,396,829 2,974,495 4,134,788 - - - 4,779,382 -
Benefit payments, including refunds of employee contributions (9,285,923) (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 5,134,438 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 125,918,365 119,926,123 112,728,195 107,675,977 108,324,914 106,964,467 99,966,407 97,366,329
Total pension liability at end of year (a) $ 131,052,803 $ 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 $ 3,313,056 $ 2,468,311 $ 2,712,204 $ 2,671,175 $ 1,801,016 $ 1,996,512 $ 1,420,218 $ 1,166,652
Contributions-employee 304,680 374,806 491,814 848,562 687,391 563,898 566,045 564,409
Net investment income 12,779,029 10,575,596 11,059,388 (3,452,538) 10,964,115 8,890,951 (1,237,895) 5,282,031
Benefit payments, including refunds or employee contributions (9,285,923) (9,214,462) (8,218,689) (7,512,608) (6,937,544) (6,417,825) (6,363,249) (6,407,932)
Administrative expense (146,581) (173,766) (190,108) (173,509) (173,921) (175,718) (183,599) (193,139)
- - -
97
Net change in plan fiduciary net position 6,964,261 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 93,025,193 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) $ 99,989,454 $ 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) $ 31,063,349 $ 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 76.30% 73.88% 74.21% 73.75% 84.29% 77.93% 74.38% 85.39%
Covered payroll $ 4,608,816 $ 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 674.00% 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)
2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
Actuarially determined contribution $ 3,724,080 $ 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
Contributions in relation to the actuarially
determined contribution 3,724,080 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
Contribution deficiency (excess) $ - $ - $ (922,393) $ (315,967) $ (166,074) $ (379,042) $ (206,832) $ - $ (500,000) $ -
Covered payroll $ 4,608,816 $ 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
Contributions as percentage of covered
payroll 80.8% 53.7% 45.5% 33.8% 25.7% 26.9% 19.2% 14.1% 16.8% 10.2%
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 normal
Amortization method Level percentage of payroll, Closed
98
Remaining amortization period 17 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)
2021 2020 2019 2018 2017
TOTAL OPEB LIABILITY
Service cost $ 142,556 $ 156,214 $ 165,306 $ 178,243 $ 165,423
Interest 1,999,639 2,058,432 2,191,233 2,035,720 1,954,979
Differences between expected and actual experience (2,420,665) (325,146) (2,119,868) (992,432) -
Changes of assumptions (2,771,809) (1,152,266) 6,288,823 2,349,210 -
Benefit payments, including refunds of employee contributions (1,710,064) (1,621,453) (1,983,928) (1,118,442) (1,064,376)
Net change in total OPEB liability (4,760,343) (884,219) 4,541,566 2,452,299 1,056,026
Total OPEB liability at beginning of year 32,757,983 33,642,202 29,100,636 26,648,337 25,592,311
Total OPEB liability at end of year (a) $ 27,997,640 $ 32,757,983 $ 33,642,202 $ 29,100,636 $ 26,648,337
PLAN FIDUCIARY NET POSITION
Contributions-employer $ 1,767,843 $ 1,154,926 $ 1,001,447 $ 671,363 $ 736,039
Net investment income 2,574,713 2,210,729 2,660,470 (699,603) 2,110,019
Benefit payments, including refunds or employee contributions (1,710,064) (1,621,453) (1,983,928) (1,118,442) (1,064,376)
99
Administrative expense (47,967) (42,375) (41,397) (53,927) (52,313)
Net change in plan fiduciary net position 2,584,525 1,701,827 1,636,592 (1,200,609) 1,729,369
Plan fiduciary net position at beginning of year 22,917,388 21,215,561 19,578,969 20,779,578 19,050,209
Plan fiduciary net position at end of year (b) $ 25,501,913 $ 22,917,388 $ 21,215,561 $ 19,578,969 $ 20,779,578
City's net OPEB liability at end of year (a)-(b) $ 2,495,727 $ 9,840,595 $ 12,426,641 $ 9,521,667 $ 5,868,759
Plan fiduciary net position as a percentage of the total OPEB liability 91.09% 69.96% 63.06% 67.28% 77.98%
Covered payroll $ 6,978,841 $ 7,848,543 $ 8,952,683 Not Available $ 8,095,840
City's net OPEB liability as a percentage of covered payroll 35.76% 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)
2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
Actuarially determined contribution $ 1,344,010 $ 2,289,405 $ 2,115,188 $ 1,470,562 $ 956,532 $ 606,506 $ 639,428 $ 659,451 $ 696,634 $ 728,863
Contributions in relation to the actuarially
determined contribution 650,383 1,206,464 1,233,505 1,260,887 687,642 606,506 639,428 659,451 696,634 728,863
Contribution deficiency (excess) $ 693,627 $ 1,082,941 $ 881,683 $ 209,675 $ 268,890 $ - $ - $ - $ - $ -
Covered payroll $ 6,978,841 $ 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
Contributions as percentage of covered
payroll 9.3% 15.4% 13.8% Not Available 8.5% 5.6% 5.9% 6.6% 7.0% 5.9%
Notes to Schedule
Valuation Date:
Actuarially determined contribution rates are calculated as of December 31, 2021.
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
100
Remaining amortization period 7 years
Asset valuation method Equal to market value of assets
Inflation 2.5 percent
Salary increases 0.0 percent
Investment rate of return 7.35 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-2021 improvement scale.
Mortality rates for others were as set forth in the Public General 2010 Employee and Healthy Retiree, headcount weighted, MP-2021 improvement scale.
City of Muskegon
REQUIRED SUPPLEMENTARY INFORMATION
RETIREE HEALTHCARE SYSTEM SCHEDULE OF INVESTMENT RETURNS
Last Ten Fiscal Years (Amounts were determined as of December 31 of each fiscal year)
2021 2020 2019 2018 2017
Annual money-weighted rate of return, net of investment expense 11.23% 10.55% 13.95% -3.41% 11.19%
Notes to Schedule
Additional data is not available and will be provided in subsequent years
101
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102
OTHER SUPPLEMENTAL INFORMATION
103
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.
Farmers Market and Kitchen 242 – to account for revenues received for the City’s Farmers Market and Kitchen
242.
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.
Capital Projects Funds
Capital projects funds are used to account for financial resources to be used for the acquisition or construction of
major capital assets other than those financed by proprietary funds and trust funds.
Public Improvement Fund – to account for grants, private contributions, sale of property, and other resources used
to finance various capital projects.
Michcon Remediation – to account for reimbursements received from Michcon Gas Company for environmental
remediation of their former downtown site.
EDC Revolving Loan – to account for funds received upon repayment of Urban Development Action Grant loans
and subsequently reloaned to small business enterprises.
Community Development Block Grant – to account for categorical grants received from the U. S. Department of
Housing and Urban Development for the construction of major city public improvements and the rehabilitation of
residential housing and other qualifying expenditures.
104
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.
Convention Center Construction – to account for proceeds from debt issuance for the construction of a convention
center in downtown Muskegon.
Healthy Homes – to account for grant revenues received from the U. S. Department of Housing and Urban
Development for the purpose of addressing multiple residential health and safety hazards.
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.
105
City of Muskegon
COMBINING BALANCE SHEET
Other Governmental Funds
June 30, 2022
Other Other Permanent
Total Other Special Capital Fund -
Governmental Revenue Projects Cemetery
Funds Funds Funds Perpetual Care
ASSETS
Cash and investments $ 3,001,131 $ 1,040,460 $ 1,285,084 $ 675,587
Assets managed by others 1,356,585 - 29,011 1,327,574
Receivables
Accounts and loans (net of allowance for uncollectibles) 989,779 13,085 973,815 2,879
Due from other governmental units 505,219 196,197 309,022 -
Advances to component units 148,994 - - 148,994
Prepaid items 7,905 7,905 - -
Total assets $ 6,009,613 $ 1,257,647 $ 2,596,932 $ 2,155,034
LIABILITIES
Accounts payable $ 303,168 $ 37,286 $ 265,882 $ -
Accrued liabilities 41,424 22,703 18,721 -
Due to other governmental units 788 788 - -
Due to other funds 33,684 - 33,684 -
Short-term draw note 84,297 - 84,297 -
Unearned revenues - unused Farmers Market tokens 26,331 26,331 - -
Total liabilities 489,692 87,108 402,584 -
FUND BALANCES
Nonspendable
Prepaid items 7,905 7,905 - -
Perpetual care 1,677,702 - - 1,677,702
Restricted
Highways, streets and bridges 789,134 789,134 - -
Law enforcement 23,161 23,161 - -
Business improvement districts 176,733 176,733 - -
Perpetual care 477,332 - - 477,332
Other purposes 173,606 173,606 - -
Assigned for capital projects and public improvements 2,194,348 - 2,194,348 -
Total fund balances 5,519,921 1,170,539 2,194,348 2,155,034
Total liabilities and fund balances $ 6,009,613 $ 1,257,647 $ 2,596,932 $ 2,155,034
106
City of Muskegon
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (DEFICITS)
Other Governmental Funds
For the year ended June 30, 2022
Other Other Permanent
Total Other Special Capital Fund -
Governmental Revenue Projects Cemetery
Funds Funds Funds Perpetual Care
REVENUES
Intergovernmental revenues
Federal $ 2,952,413 $ - $ 2,952,413 $ -
State 2,538,375 1,461,786 1,076,589 -
Local 261,057 - 261,057 -
Charges for services 495,403 401,906 58,204 35,293
Fines and forfeitures 1,264 1,264 - -
Investment earnings 36,959 4,445 23,356 9,158
Income from assets managed by others (134,215) - (5,173) (129,042)
Other 1,104,169 275,176 828,993 -
Total revenues 7,255,425 2,144,577 5,195,439 (84,591)
EXPENDITURES
Current
Public safety 443 443 - -
Public works 156,277 156,277 - -
Highways, streets and bridges 1,998,785 1,998,785 - -
Culture and recreation 484,929 484,929 - -
Debt service
Principal 205,000 - 205,000 -
Interest and fees 616,730 - 616,730 -
Capital outlay 4,835,674 - 4,835,674 -
Total expenditures 8,297,838 2,640,434 5,657,404 -
Excess of revenues over (under) expenditures (1,042,413) (495,857) (461,965) (84,591)
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets 1,204,675 - 1,204,675 -
Transfers in 3,128,500 262,500 2,866,000 -
Transfers out (401,000) - (401,000) -
Total other financing sources (uses) 3,932,175 262,500 3,669,675 -
Net change in fund balances (deficits) 2,889,762 (233,357) 3,207,710 (84,591)
Fund balances (deficits) at beginning of year 2,630,159 1,403,896 (1,013,362) 2,239,625
Fund balances at end of year $ 5,519,921 $ 1,170,539 $ 2,194,348 $ 2,155,034
107
City of Muskegon
COMBINING BALANCE SHEET
Other Special Revenue Funds
June 30, 2022
Total Other Farmers
Special Revenue Local Market and Criminal Downtown Lakeshore Tree
Funds Street Kitchen 242 Forfeitures BID BID Replacement
ASSETS
Cash and investments $ 1,040,460 $ 613,349 $ 222,106 $ 23,161 $ 135,442 $ 45,791 $ 611
Receivables
Accounts 13,085 7,550 5,535 - - - -
Due from other governmental units 196,197 196,197 - - - - -
Prepaid items 7,905 7,905 - - - - -
Total assets $ 1,257,647 $ 825,001 $ 227,641 $ 23,161 $ 135,442 $ 45,791 $ 611
LIABILITIES
Accounts payable $ 37,286 $ 8,503 $ 24,283 $ - $ 4,500 $ - $ -
Accrued liabilities 22,703 19,459 3,244 - - - -
Due to other governmental units 788 - 788 - - - -
108
Unearned revenues - unused Farmers Market tokens 26,331 - 26,331 - - - -
Total liabilities 87,108 27,962 54,646 - 4,500 - -
FUND BALANCES
Nonspendable - prepaid items 7,905 7,905 - - - - -
Restricted
Highways, streets and bridges 789,134 789,134 - - - - -
Law enforcement 23,161 - - 23,161 - - -
Business improvement districts 176,733 - - - 130,942 45,791 -
Other purposes 173,606 - 172,995 - - - 611
Total fund balances 1,170,539 797,039 172,995 23,161 130,942 45,791 611
Total liabilities and fund balances $ 1,257,647 $ 825,001 $ 227,641 $ 23,161 $ 135,442 $ 45,791 $ 611
City of Muskegon
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
Other Special Revenue Funds
For the year ended June 30, 2022
Total Other Farmers
Special Revenue Local Market and Criminal Downtown Lakeshore Tree
Funds Street Kitchen 242 Forfeitures BID BID Replacement
REVENUES
Intergovernmental revenues
State $ 1,461,786 $ 1,461,786 $ - $ - $ - $ - $ -
Charges for services 401,906 2,800 399,106 - - - -
Fines and forfeitures 1,264 - - 1,264 - - -
Investment earnings 4,445 2,960 614 111 641 82 37
Other 275,176 39,642 61,778 - 117,193 43,126 13,437
Total revenues 2,144,577 1,507,188 461,498 1,375 117,834 43,208 13,474
EXPENDITURES
Current
Public safety 443 - - 443 - - -
109
Public works 156,277 - - - 119,880 36,397 -
Highways, streets and bridges 1,998,785 1,998,785 - - - - -
Culture and recreation 484,929 - 455,886 - - - 29,043
Total expenditures 2,640,434 1,998,785 455,886 443 119,880 36,397 29,043
Excess of revenues over (under) expenditures (495,857) (491,597) 5,612 932 (2,046) 6,811 (15,569)
OTHER FINANCING SOURCES
Transfers in 262,500 100,000 125,000 - - 35,000 2,500
Net change in fund balances (233,357) (391,597) 130,612 932 (2,046) 41,811 (13,069)
Fund balances at beginning of year 1,403,896 1,188,636 42,383 22,229 132,988 3,980 13,680
Fund balances at end of year $ 1,170,539 $ 797,039 $ 172,995 $ 23,161 $ 130,942 $ 45,791 $ 611
City of Muskegon
BUDGETARY COMPARISON SCHEDULE
Other Special Revenue Funds
For the year ended June 30, 2022
Local Street Farmers Market and Kitchen 242
Final Variance with Final Variance with
Budget Actual Final Budget Budget Actual Final Budget
REVENUES
Intergovernmental revenues
State $ 1,460,000 $ 1,461,786 $ 1,786 $ - $ - $ -
Charges for services 5,000 2,800 (2,200) 363,225 399,106 35,881
Investment earnings 3,500 2,960 (540) 500 614 114
Other 40,000 39,642 (358) 36,000 61,778 25,778
Total revenues 1,508,500 1,507,188 (1,312) 399,725 461,498 61,773
EXPENDITURES
Current
110
Highways, streets and bridges 2,117,950 1,998,785 119,165 - - -
Culture and recreation - - - 429,200 455,886 (26,686)
Total expenditures 2,117,950 1,998,785 119,165 429,200 455,886 (26,686)
Excess of revenues over (under) expenditures (609,450) (491,597) 117,853 (29,475) 5,612 35,087
OTHER FINANCING SOURCES
Transfers in 100,000 100,000 - 40,000 125,000 85,000
Net change in fund balances $ (509,450) (391,597) $ 117,853 $ 10,525 130,612 $ 120,087
Fund balances at beginning of year 1,188,636 42,383
Fund balances at end of year $ 797,039 $ 172,995
City of Muskegon
BUDGETARY COMPARISON SCHEDULE─CONTINUED
Other Special Revenue Funds
For the year ended June 30, 2022
Criminal Forfeitures Downtown BID
Final Variance With Final Variance With
Budget Actual Final Budget Budget Actual Final Budget
REVENUES
Fines and forfeitures $ - $ 1,264 $ 1,264 $ - $ - $ -
Investment earnings 100 111 11 - 641 641
Other - - - 114,888 117,193 2,305
Total revenues 100 1,375 1,275 114,888 117,834 2,946
EXPENDITURES
Current
Public safety 500 443 57 - - -
Public works - - - 114,888 119,880 (4,992)
111
Total expenditures 500 443 57 114,888 119,880 (4,992)
Net change in fund balances $ (400) 932 $ 1,332 $ - (2,046) $ (2,046)
Fund balances at beginning of year 22,229 132,988
Fund balances at end of year $ 23,161 $ 130,942
City of Muskegon
BUDGETARY COMPARISON SCHEDULE─CONTINUED
Other Special Revenue Funds
For the year ended June 30, 2022
Lakeshore BID Tree Replacement
Final Variance with Final Variance with
Budget Actual Final Budget Budget Actual Final Budget
REVENUES
Investment earnings $ - $ 82 $ 82 $ - $ 37 $ 37
Other 26,944 43,126 16,182 13,500 13,437 (63)
Total revenues 26,944 43,208 16,264 13,500 13,474 (26)
EXPENDITURES
Current
Public works 41,944 36,397 5,547 - - -
Culture and recreation - - - 30,000 29,043 957
- -
Total expenditures 41,944 36,397 5,547 30,000 29,043 957
112
Excess of revenues over (under) expenditures (15,000) 6,811 21,811 (16,500) (15,569) 931
OTHER FINANCING SOURCES
Transfers in - 35,000 35,000 5,000 2,500 (2,500)
Net change in fund balances $ (15,000) 41,811 $ 56,811 $ (11,500) (13,069) $ (1,569)
Fund balances at beginning of year 3,980 13,680
Fund balances at end of year $ 45,791 $ 611
City of Muskegon
COMBINING BALANCE SHEET
Other Capital Projects Funds
June 30, 2022
Total Other EDC Community Convention
Capital Projects Public Michcon Revolving Development HOME Lead Senior Center Healthy
Funds Improvement Remediation Loan Block Grant Rehabilitation Abatement Millage Construction Homes
ASSETS
Cash and investments $ 1,285,084 $ 317,741 $ 228,686 $ 506,837 $ 21,197 $ 25,768 $ - $ 31,377 $ 153,478 $ -
Assets managed by others 29,011 29,011 - - - - - - - -
Receivables
Accounts and loans (net of
allowance for uncollectibles) 973,815 299,916 - 661,160 12,739 - - - - -
Due from other governmental units 309,022 - - - 174,570 57,713 74,724 - - 2,015
Total assets $ 2,596,932 $ 646,668 $ 228,686 $ 1,167,997 $ 208,506 $ 83,481 $ 74,724 $ 31,377 $ 153,478 $ 2,015
LIABILITIES
Accounts payable $ 265,882 $ 10,976 $ - $ - $ 77,606 $ 80,854 $ 41,801 $ 13,003 $ 41,642 $ -
Accrued liabilities 18,721 - - - 16,323 1,144 505 - - 749
Due to other funds 33,684 - - - - - 32,418 - - 1,266
Short-term draw note 84,297 84,297 - - - - - - - -
Total liabilities 402,584 95,273 - - 93,929 81,998 74,724 13,003 41,642 2,015
113
FUND BALANCES
Assigned for capital projects
and public improvements 2,194,348 551,395 228,686 1,167,997 114,577 1,483 - 18,374 111,836 -
Total liabilities and fund balances $ 2,596,932 $ 646,668 $ 228,686 $ 1,167,997 $ 208,506 $ 83,481 $ 74,724 $ 31,377 $ 153,478 $ 2,015
City of Muskegon
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (DEFICITS)
Other Capital Projects Funds
For the year ended June 30, 2022
Total Other EDC Community Convention
Capital Projects Public Michcon Revolving Development HOME Lead Senior Center Healthy
Funds Improvement Remediation Loan Block Grant Rehabilitation Abatement Millage Construction Homes
REVENUES
Intergovernmental revenues
Federal $ 2,952,413 $ - $ - $ - $ 1,748,418 $ 580,355 $ 621,625 $ - $ - $ 2,015
State 1,076,589 - - - - - 21,804 - 1,054,785 -
Local 261,057 261,057 - - - - - - - -
Charges for services 58,204 52,204 - 6,000 - - - - - -
Investment earnings 23,356 - 1,141 21,879 - - - 298 38 -
Income from assets managed by others (5,173) (5,173) - - - - - - - -
Other 828,993 471,709 - 107,916 5,758 6 3 243,601 - -
Total revenues 5,195,439 779,797 1,141 135,795 1,754,176 580,361 643,432 243,899 1,054,823 2,015
EXPENDITURES
Debt service
Principal 205,000 - - - - - - - 205,000 -
Interest and fees 616,730 4,519 - - - - - - 612,211 -
Capital outlay 4,835,674 647,099 - 410,900 1,707,058 426,476 643,432 265,356 733,338 2,015
Total expenditures 5,657,404 651,618 - 410,900 1,707,058 426,476 643,432 265,356 1,550,549 2,015
114
Excess of revenues over (under) expenditures (461,965) 128,179 1,141 (275,105) 47,118 153,885 - (21,457) (495,726) -
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets 1,204,675 1,084,182 - - 67,459 53,034 - - - -
Transfers in 2,866,000 366,000 - - - - - - 2,500,000 -
Transfers out (401,000) - - - - (316,000) - (85,000) - -
Total other financing sources (uses) 3,669,675 1,450,182 - - 67,459 (262,966) - (85,000) 2,500,000 -
Net change in fund balances (deficits) 3,207,710 1,578,361 1,141 (275,105) 114,577 (109,081) - (106,457) 2,004,274 -
Fund balances (deficits) at beginning of year (1,013,362) (1,026,966) 227,545 1,443,102 - 110,564 - 124,831 (1,892,438) -
Fund balances at end of year $ 2,194,348 $ 551,395 $ 228,686 $ 1,167,997 $ 114,577 $ 1,483 $ - $ 18,374 $ 111,836 $ -
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.
115
City of Muskegon
COMBINING STATEMENT OF NET POSITION
Internal Service Funds
June 30, 2022
Total Internal Engineering General Public Service
Service Funds Services Equipment Insurance Building
ASSETS
Current assets
Cash and investments $ 3,559,579 $ 67,853 $ 1,534,275 $ 1,012,141 $ 945,310
Accounts receivable 333,192 24,619 9,357 299,216 -
Inventories 38,867 - 38,867 - -
Prepaid items 229,096 2,906 62,719 158,586 4,885
Total current assets 4,160,734 95,378 1,645,218 1,469,943 950,195
Noncurrent assets
Advances to component units 297,986 - 148,993 148,993 -
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 10,313,517 51,346 10,167,807 - 94,364
Less accumulated depreciation (9,524,983) (33,645) (7,676,636) - (1,814,702)
Net capital assets 2,823,464 17,701 2,491,171 - 314,592
Total noncurrent assets 3,121,450 17,701 2,640,164 148,993 314,592
Total assets 7,282,184 113,079 4,285,382 1,618,936 1,264,787
DEFERRED OUTFLOWS OF RESOURCES
Related to pension 74,482 - 27,931 - 46,551
Related to other postemployment benefits 40,689 - 15,258 - 25,431
Total deferred outflows of resources 115,171 - 43,189 - 71,982
Total assets and deferred outflows of resources 7,397,355 113,079 4,328,571 1,618,936 1,336,769
LIABILITIES
Current liabilities
Accounts payable 779,382 4,808 210,469 520,956 43,149
Accrued liabilities 60,116 14,296 16,094 1,825 27,901
Bonds and other obligations, due within one year 39,200 8,800 14,100 900 15,400
Total current liabilities 878,698 27,904 240,663 523,681 86,450
Noncurrent liabilities
Bonds and other obligations, less amounts due within one year 156,651 34,990 56,497 3,722 61,442
Net pension liability 1,242,534 - 465,950 - 776,584
Net other postemployment benefits liability 99,829 - 37,436 - 62,393
Total noncurrent liabilities 1,499,014 34,990 559,883 3,722 900,419
Total liabilities 2,377,712 62,894 800,546 527,403 986,869
DEFERRED INFLOWS OF RESOURCES
Related to pension 278,007 - 104,253 - 173,754
Related to other postemployment benefits 105,577 - 39,591 - 65,986
Total deferred inflows of resources 383,584 - 143,844 - 239,740
Total liabilities and deferred inflows of resources 2,761,296 62,894 944,390 527,403 1,226,609
NET POSITION
Net investment in capital assets 2,823,464 17,701 2,491,171 - 314,592
Unrestricted 1,812,595 32,484 893,010 1,091,533 (204,432)
Total net position $ 4,636,059 $ 50,185 $ 3,384,181 $ 1,091,533 $ 110,160
116
City of Muskegon
COMBINING STATEMENT OF REVENUE, EXPENSES AND CHANGES IN NET POSITION
Internal Service Funds
For the year ended June 30, 2022
Total Internal Engineering General Public Service
Service Funds Services Equipment Insurance Building
OPERATING REVENUES
Charges for services $ 10,433,668 $ 575,183 $ 3,328,303 $ 5,208,979 $ 1,321,203
Other 158,582 69,709 81,105 7,768 -
Total operating revenues 10,592,250 644,892 3,409,408 5,216,747 1,321,203
OPERATING EXPENSES
Administration 958,063 111,814 198,505 46,960 600,784
Insurance premiums and claims 5,386,649 - - 5,386,649 -
Other operations 3,701,160 516,787 2,189,569 49,469 945,335
Depreciation 499,466 2,500 469,305 - 27,661
Total operating expenses 10,545,338 631,101 2,857,379 5,483,078 1,573,780
Operating income (loss) 46,912 13,791 552,029 (266,331) (252,577)
NONOPERATING REVENUES (EXPENSES)
Investment earnings 25,649 336 12,892 8,751 3,670
Gain (loss) on sale of capital assets 38,349 - 38,349 - -
Total nonoperating revenues (expenses) 63,998 336 51,241 8,751 3,670
Income (loss) before transfers 110,910 14,127 603,270 (257,580) (248,907)
TRANSFERS
Transfers in 400,000 - - - 400,000
Change in net position 510,910 14,127 603,270 (257,580) 151,093
Net position at beginning of year 4,125,149 36,058 2,780,911 1,349,113 (40,933)
Net position at end of year $ 4,636,059 $ 50,185 $ 3,384,181 $ 1,091,533 $ 110,160
117
City of Muskegon
COMBINING STATEMENT OF CASH FLOWS
Internal Service Funds
For the year ended June 30, 2022
Total Internal Engineering General Public Service
Service Funds Services Equipment Insurance Building
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 169,736 $ 48,212 $ 121,524 $ - $ -
Receipts from interfund services provided 10,433,668 575,183 3,328,303 5,208,979 1,321,203
Other receipts 1,266,428 - - 1,266,428 -
Payments to suppliers (6,865,909) (150,664) (1,169,326) (5,081,357) (464,562)
Payments to employees (1,954,355) (370,696) (502,520) (52,826) (1,028,313)
Payments for interfund services used (848,990) (91,098) (633,632) - (124,260)
Net cash provided by (used for) operating activities 2,200,578 10,937 1,144,349 1,341,224 (295,932)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Transfers in 400,000 - - - 400,000
Interfund borrowing (384,381) - - (384,381) -
Collections on advances to component units 93,094 - 46,547 46,547 -
Net cash provided by (used for) noncapital financing activities 108,713 - 46,547 (337,834) 400,000
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Purchases of capital assets (659,722) - (659,722) - -
118
Proceeds from sale of capital assets 74,558 - 74,558 - -
Net cash provided by (used for) capital and related financing activities (585,164) - (585,164) - -
CASH FLOW FROM INVESTING ACTIVITIES
Investment earnings 25,649 336 12,892 8,751 3,670
Net increase (decrease) in cash and investments 1,749,776 11,273 618,624 1,012,141 107,738
Cash and investments at beginning of year 1,809,803 56,580 915,651 - 837,572
Cash and investments at end of year $ 3,559,579 $ 67,853 $ 1,534,275 $ 1,012,141 $ 945,310
Reconciliation of operating income (loss) to net cash provided by (used for)
operating activities
Operating income (loss) $ 46,912 $ 13,791 $ 552,029 $ (266,331) $ (252,577)
Adjustments to reconcile operating income (loss) to net cash provided by
(used for) operating activities
Depreciation expense 499,466 2,500 469,305 - 27,661
Change in assets and liabilities
Receivables 1,277,582 (21,497) 40,419 1,258,660 -
Inventories (31,549) - (31,549) - -
Prepaid items 386 (1,129) 4,217 (4,286) 1,584
Accounts payable 510,189 (429) 147,804 353,703 9,111
Accrued liabilities (102,408) 17,701 (37,876) (522) (81,711)
Net cash provided by (used for) operating activities $ 2,200,578 $ 10,937 $ 1,144,349 $ 1,341,224 $ (295,932)
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.
119
City of Muskegon
COMBINING STATEMENT OF NET POSITION
Custodial Funds
June 30, 2022
Total Current Rehab Loan
Custodial Funds Collector Tax Escrow
ASSETS
Cash and investments $ 816,055 $ 815,674 $ - $ 381
Accounts receivable 13,835 13,835 - -
Total assets 829,890 829,509 - 381
LIABILITIES
Accounts payable 19,517 19,136 - 381
Due to other governmental units 622,373 622,373 - -
Deposits held for others 188,000 188,000 - -
Total liabilities 829,890 829,509 - 381
NET POSITION
Restricted for individuals, organizations,
and other governments $ - $ - $ - $ -
120
City of Muskegon
COMBINING STATEMENT OF CHANGES IN NET POSITION
Custodial Funds
For the year ended June 30, 2022
Total Current Rehab Loan
Custodial Funds Collector Tax Escrow
ADDITIONS
Tax collections for other governments $ 24,329,719 $ 378,627 $ 23,951,092 $ -
Other collections for third parties 1,521,847 1,521,847 - -
Total additions 25,851,566 1,900,474 23,951,092 -
DEDUCTIONS
Payment of taxes to other governments 24,329,719 378,627 23,951,092 -
Other payments to third parties 1,521,847 1,521,847 - -
Total deductions 25,851,566 1,900,474 23,951,092 -
Change in net position - - - -
Net position at beginning of year - - - -
Net position at end of year $ - $ - $ - $ -
121
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122
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.
123
City of Muskegon
COMBINING BALANCE SHEET
Discretely Presented Component Units
June 30, 2022
Local
Total Discretely Development
Presented Finance Downtown Tax Increment Brownfield
Component Authority - Development Finance Redevelopment
Units SmartZone Authority Authority Authorities
ASSETS
Cash and investments $ 403,928 $ 46,925 $ 336,989 $ 20,014 $ -
Accounts receivable 32,616 - 32,616 - -
Total assets $ 436,544 $ 46,925 $ 369,605 $ 20,014 $ -
LIABILITIES
Accounts payable $ 109,697 $ - $ 109,697 $ - $ -
Accrued liabilities 4,289 - 4,289 - -
124
Due to other governmental units 2,000 - 2,000 - -
Due to primary government 64,211 - - - 64,211
Advances from primary government 1,046,980 - - - 1,046,980
Total liabilities 1,227,177 - 115,986 - 1,111,191
FUND BALANCES (DEFICITS)
Unassigned (790,633) 46,925 253,619 20,014 (1,111,191)
Total liabilities and fund
balances (deficits) $ 436,544 $ 46,925 $ 369,605 $ 20,014 $ -
City of Muskegon
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO THE STATEMENT OF NET POSITION
Discretely Presented Component Units
June 30, 2022
Total fund balances (deficits)—governmental funds $ (790,633)
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 $ (987,352)
125
City of Muskegon
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (DEFICITS)
Discretely Presented Component Units
For the year ended June 30, 2022
Local
Total Discretely Development
Presented Finance Downtown Tax Increment Brownfield
Component Authority - Development Finance Redevelopment
Units SmartZone Authority Authority Authorities
REVENUES
Property taxes $ 1,139,110 $ 85,861 $ 321,446 $ 42,475 $ 689,328
Intergovernmental revenues
State 36,895 3,084 - 9,596 24,215
Local 217,000 200,000 17,000 - -
Investment earnings 1,357 112 543 58 644
Other 639,439 - 638,765 - 674
Total revenues 2,033,801 289,057 977,754 52,129 714,861
126
EXPENDITURES
Current
Community and economic development 1,508,284 - 810,219 50,000 648,065
Debt service
Principal 245,000 245,000 - - -
Interest and fees 55,240 37,300 - - 17,940
Total expenditures 1,808,524 282,300 810,219 50,000 666,005
Net change in fund balances (deficits) 225,277 6,757 167,535 2,129 48,856
Fund balances (deficits) at beginning of year (1,015,910) 40,168 86,084 17,885 (1,160,047)
Fund balances (deficits) at end of year $ (790,633) $ 46,925 $ 253,619 $ 20,014 $ (1,111,191)
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, 2022
Net change in fund balances (deficits)—total governmental funds $ 225,277
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 $ 463,408
127
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128
SCHEDULE OF INDEBTEDNESS
129
City of Muskegon
SCHEDULE OF INDEBTEDNESS
June 30, 2022
Annual
Date Amount Interest Date of Interest
of Issue of Issue Rate Maturity 6/30/2021 6/30/2022 Payable
Business-Type Activities Bonds and Loans Payable:
Drinking Water State Revolving 3/2/2004 $ 13,900,000 2.13% 10/01/21 $ 775,000 $ - $ -
Fund 2.13% 10/01/22 790,000 790,000 60,988
2.13% 10/01/23 810,000 810,000 43,988
Type of debt: state loan 2.13% 10/01/24 825,000 825,000 26,616
Revenue pledged: water system net revenues 2.13% 10/01/25 840,000 840,000 8,925
4,040,000 3,265,000 140,517
Drinking Water State Revolving Fund* 8/30/2019 $ 1,600,000 2.00% 10/01/21 65,000 - -
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 70,000 70,000 27,900
Forgiveness: 20% 2.00% 10/01/25 70,000 70,000 26,500
2.00% 10/01/26 75,000 75,000 25,100
2.00% 10/01/27 75,000 75,000 23,600
2.00% 10/01/28 75,000 75,000 22,100
2.00% 10/01/29 75,000 75,000 20,600
2.00% 10/01/30 80,000 80,000 19,100
2.00% 10/01/31 80,000 80,000 17,500
2.00% 10/01/32 80,000 80,000 15,900
2.00% 10/01/33 85,000 85,000 14,300
2.00% 10/01/34 85,000 85,000 12,600
2.00% 10/01/35 85,000 85,000 10,900
2.00% 10/01/36 90,000 90,000 9,200
2.00% 10/01/37 90,000 90,000 7,400
2.00% 10/01/38 90,000 90,000 5,600
2.00% 10/01/39 95,000 95,000 3,800
2.00% 10/01/40 86,874 95,000 1,900
1,591,874 1,535,000 324,000
Sanitary Sewer State Revolving Fund* 8/30/2019 $ 2,875,000 2.00% 10/01/21 120,000 - -
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% 10/01/32 145,000 145,000 27,150
2.00% 10/01/33 150,000 150,000 24,200
2.00% 10/01/34 150,000 150,000 21,200
2.00% 10/01/35 155,000 155,000 18,150
2.00% 10/01/36 139,459 160,000 15,000
2.00% 10/01/37 - 160,000 11,800
2.00% 10/01/38 - 165,000 8,550
2.00% 10/01/39 - 170,000 5,200
2.00% 10/01/40 - 175,000 1,750
2,184,459 2,755,000 555,750
Drinking Water State Revolving Fund* 9/30/2020 $ 3,844,750 2.00% 04/01/22 154,750 - -
2.00% 04/01/23 160,000 160,000 65,882
Type of debt: state loan 2.00% 04/01/24 165,000 165,000 62,682
Revenue Pledged: water system net revenues 2.00% 04/01/25 170,000 170,000 59,382
Forgiveness: 9% 2.00% 04/01/26 135,296 170,000 55,982
2.00% 04/01/27 - 175,000 52,582
2.00% 04/01/28 - 180,000 49,082
2.00% 04/01/29 - 180,000 45,482
2.00% 04/01/30 - 185,000 41,882
2.00% 04/01/31 - 190,000 38,182
2.00% 04/01/32 - 195,000 34,382
2.00% 04/01/33 - 195,000 30,482
2.00% 04/01/34 - 200,000 26,582
2.00% 04/01/35 - 205,000 22,582
2.00% 04/01/36 - 210,000 18,482
2.00% 04/01/37 - 215,000 14,282
2.00% 04/01/38 - 220,000 9,982
2.00% 04/01/39 - 220,000 5,582
2.00% 04/01/40 - 59,101 1,182
785,046 3,294,101 634,676
130
City of Muskegon
SCHEDULE OF INDEBTEDNESS
June 30, 2022
Annual
Date Amount Interest Date of Interest
of Issue of Issue Rate Maturity 6/30/2021 6/30/2022 Payable
Business-Type Activities Bonds and Loans Payable—Continued:
Sanitary Sewer State Revolving Fund* 9/30/2020 $ 3,772,000 2.00% 04/01/22 $ 152,000 $ - $ -
2.00% 04/01/23 155,000 155,000 72,400
Type of debt: state loan 2.00% 04/01/24 148,074 160,000 69,300
Revenue Pledged: water system net revenues 2.00% 04/01/25 - 165,000 66,100
Forgiveness: 20% 2.00% 04/01/26 - 170,000 62,800
2.00% 04/01/27 - 170,000 59,400
2.00% 04/01/28 - 175,000 56,000
2.00% 04/01/29 - 180,000 52,500
2.00% 04/01/30 - 185,000 48,900
2.00% 04/01/31 - 185,000 45,200
2.00% 04/01/32 - 190,000 41,500
2.00% 04/01/33 - 190,000 37,700
2.00% 04/01/34 - 195,000 33,900
2.00% 04/01/35 - 200,000 30,000
2.00% 04/01/36 - 205,000 26,000
2.00% 04/01/37 - 210,000 21,900
2.00% 04/01/38 - 215,000 17,900
2.00% 04/01/39 - 220,000 13,400
2.00% 04/01/40 - 225,000 9,000
2.00% 04/01/41 - 130,614 4,500
455,074 3,525,614 768,400
TOTAL BUSINESS TYPE ACTIVITIES BONDS AND LOAN PAYABLE: $ 9,056,453 $ 14,374,715 $ 2,423,343
*If certain conditions are met, a portion of the principal amount on these debts may be forgiven.
Governmental Activities Bonds and Loan Payable:
Capital Improvement Refunding Bonds of 2016 3/8/2016 $ 4,815,000 3.00% 10/01/21 $ 305,000 $ - $ -
($159,903 unamortized premium) 3.00% 10/01/22 300,000 300,000 132,900
3.00% 10/01/23 300,000 300,000 122,400
Type of debt: limited general obligation bonds 4.00% 10/01/24 320,000 320,000 110,000
Revenue pledged: general revenues 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
3,815,000 3,510,000 778,500
Capital Improvement Bonds of 2011 9/30/2011 $ 2,000,000 2.98% 09/01/21 230,000 - -
(streets) 230,000 - -
Type of debt: limited general obligation bonds
Revenue pledged: gas tax, general revenues
Capital Improvement Bonds of 2019 10/9/2019 $ 19,420,000 1.83% 10/01/21 205,000 - -
Convention Center 1.88% 10/01/22 250,000 250,000 607,985
($128,150 unamortized discount) 1.93% 10/01/23 300,000 300,000 602,740
2.00% 10/01/24 320,000 320,000 596,645
Type of debt: limited general obligation bonds 2.10% 10/01/25 340,000 340,000 589,875
Revenue Pledged: excise tax on hotel rooms levied by the 2.24% 10/01/26 360,000 360,000 582,273
County of Muskegon pursuant to Act 263 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
19,245,000 19,040,000 11,355,555
131
City of Muskegon
SCHEDULE OF INDEBTEDNESS
June 30, 2022
Annual
Date Amount Interest Date of Interest
of Issue of Issue Rate Maturity 6/30/2021 6/30/2022 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 $ - $ -
Series 2020A 4.00% 10/01/22 335,000 335,000 170,800
($673,024 unamortized premium) 4.00% 10/01/23 360,000 360,000 156,900
4.00% 10/01/24 370,000 370,000 142,300
Type of debt: limited general obligation bonds 4.00% 10/01/25 385,000 385,000 127,200
Revenue pledged: general revenues 5.00% 10/01/26 405,000 405,000 109,375
5.00% 10/01/27 420,000 420,000 88,750
5.00% 10/01/28 445,000 445,000 67,125
5.00% 10/01/29 470,000 470,000 44,250
5.00% 10/01/30 485,000 485,000 20,375
2.50% 10/01/31 30,000 30,000 7,875
2.50% 10/01/32 30,000 30,000 7,125
2.50% 10/01/33 30,000 30,000 6,375
2.50% 10/01/34 30,000 30,000 5,625
2.50% 10/01/35 35,000 35,000 4,813
2.50% 10/01/36 35,000 35,000 3,937
2.50% 10/01/37 35,000 35,000 3,063
2.50% 10/01/38 35,000 35,000 2,187
2.50% 10/01/39 35,000 35,000 1,313
2.50% 10/01/40 35,000 35,000 437
4,325,000 4,005,000 969,825
Capital Improvement Bonds of 2020 11/12/2020 $ 2,055,000 0.68% 10/01/21 85,000 - -
Series 2020B 0.68% 10/01/22 85,000 85,000 45,546
0.68% 10/01/23 90,000 90,000 44,951
Type of debt: limited general obligation bonds 1.35% 10/01/24 90,000 90,000 44,038
Revenue pledged: general revenues 1.35% 10/01/25 90,000 90,000 42,823
1.35% 10/01/26 90,000 90,000 41,608
2.00% 10/01/27 95,000 95,000 40,050
2.00% 10/01/28 95,000 95,000 38,150
2.00% 10/01/29 95,000 95,000 36,250
2.00% 10/01/30 100,000 100,000 34,300
2.60% 10/01/31 100,000 100,000 32,000
2.60% 10/01/32 105,000 105,000 29,335
2.60% 10/01/33 105,000 105,000 26,605
2.60% 10/01/34 110,000 110,000 23,810
3.20% 10/01/35 110,000 110,000 20,950
3.20% 10/01/36 115,000 115,000 17,680
3.20% 10/01/37 120,000 120,000 13,920
3.20% 10/01/38 120,000 120,000 10,080
3.20% 10/01/39 125,000 125,000 6,160
3.20% 10/01/40 130,000 130,000 2,080
2,055,000 1,970,000 550,335
Installment Purchase Agreement of 2021 9/15/2021 $ 1,370,873 1.78% 09/25/22 - 268,269 18,471
(fire tower ladder truck) 1.78% 09/25/23 - 273,023 13,717
1.78% 09/25/24 - 277,860 8,880
Type of debt: installment purchase agreements 1.78% 09/25/25 - 282,784 3,956
Revenue pledged: general revenues 1.78% 09/25/26 - 71,475 210
- 1,173,411 45,234
TOTAL GOVERNMENTAL ACTIVITIES BONDS AND LOANS PAYABLE $ 29,670,000 $ 29,698,411 $ 13,699,449
TOTAL PRIMARY GOVERNMENT BONDS AND LOANS PAYABLE $ 38,726,453 $ 44,073,126 $ 16,122,792
Discretely Presented Component Unit Bonds and Loans Payable:
Local Development Finance Authority 3/20/2012 $ 4,100,000 4.00% 11/01/21 $ 245,000 $ - $ -
Smartzone Refunding Bonds 3.00% 11/01/22 255,000 255,000 28,575
($16,547 unamortized premium) 3.00% 11/01/23 265,000 265,000 20,775
3.00% 11/01/24 275,000 275,000 12,675
Type of debt: limited general obligation bonds 3.00% 11/01/25 285,000 285,000 4,275
Revenue pledged: LDFA tax increments, general revenues 1,325,000 1,080,000 66,300
TOTAL DISCRETELY PRESENTED COMPONENT UNIT BONDS AND LOANS PAYABLE $ 1,325,000 $ 1,080,000 $ 66,300
TOTAL REPORTING ENTITY BONDS AND LOANS PAYABLE $ 40,051,453 $ 45,153,126 $ 16,189,092
132
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. 134
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. 139
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. 146
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. 150
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. 152
Sources: Unless otherwise noted, the information in these schedules is derived from the Comprehensive Annual
Financial Reports for the relevant year.
133
City of Muskegon
NET POSITION BY COMPONENT
Last Ten Fiscal Years
2013 2014 2015 (a) 2016 2017 2018 (b) 2019 2020 2021 2022
Governmental Activities
Net Investment in Capital Assets $ 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 $ 75,201,511
Restricted 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 5,845,255
Unrestricted 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) (22,938,317)
Total Governmental Net Position $ 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 $ 58,108,449
Business-type Activities
Net Investment in Capital Assets $ 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 $ 54,668,925
Restricted 599,500 599,500 599,500 599,500 599,500 599,500 599,500 599,500 822,000 822,000
Unrestricted 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) 424,949
Total Business-type Activities Net Position $ 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 $ 55,915,874
Primary Government
Net Investment in Capital Assets $ 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 $ 129,870,436
Restricted 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 6,667,255
Unrestricted 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) (22,513,368)
Total Primary Government Net Position $ 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 $ 114,024,323
134
(a) In 2015, the City implemented GASB 68 and 71 which changed how governments measure and report pension liabilities.
(b) 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 POSITION
Last Ten Fiscal Years
2013 2014 2015 (a) 2016 2017 2018 (b) 2019 2020 2021 2022
EXPENSES
Governmental Activities
Public representation $ 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 $ 1,715,050
Administrative services 565,307 543,425 614,757 663,077 679,139 507,275 800,887 962,981 826,344 913,923
Financial services 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 5,473,498
Public safety 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 13,387,378
Public works 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 4,687,660
Highways, streets and bridges 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 7,308,858
Community and economic development 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 9,857,082
Culture and recreation 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 6,588,542
General administration 322,348 366,634 389,248 326,452 301,287 376,112 302,582 389,863 404,303 511,323
Interest on long-term debt 291,535 277,345 271,607 248,223 172,591 165,023 151,304 732,065 1,112,166 881,204
Total Governmental Activities Expenses 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 51,324,518
Business-type Activities
Water 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 9,261,276
Sewer 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 8,153,673
Marina and launch ramp 426,553 503,997 305,990 327,832 336,912 377,614 430,431 529,007 515,025 461,504
Total Business-type Activities Expenses 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 17,876,453
Total Primary Government Expenses $ 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 $ 69,200,971
PROGRAM REVENUES
Governmental Activities
Charges for Services
Public representation $ 173,739 $ 189,444 $ 188,638 $ 226,559 $ 228,767 $ 232,736 $ 250,931 $ 253,511 $ 280,395 $ 324,314
135
Administrative services 268,535 325,937 415,308 474,737 572,739 539,178 604,290 538,791 504,281 715,421
Financial services 830,919 871,632 823,547 925,474 895,924 903,322 921,748 913,968 988,501 1,085,220
Public safety 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 2,680,675
Public works 671,494 796,739 571,426 379,877 646,876 743,110 691,312 835,149 828,098 854,793
Highways, streets and bridges 245,609 351,962 258,475 234,861 256,190 188,248 191,883 193,267 187,478 522,779
Community and economic development 432,240 477,486 576,863 444,632 706,195 348,933 786,120 769,860 912,247 498,766
Culture and recreation 606,818 535,211 368,168 1,229,067 1,463,839 1,651,304 1,853,547 2,124,968 1,976,029 4,389,524
General administration 287,729 50,728 48,764 52,512 37,892 38,549 40,400 59,537 65,592 76,182
Operating grants and contributions 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 11,024,058
Capital grants and contributions 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 2,815,119
Total Governmental Program Revenues 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 24,986,851
Business-type Activities
Water 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 8,903,549
Sewer 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 10,298,642
Marina and launch ramp 234,229 228,339 255,638 287,547 278,753 325,917 298,312 74,659 178,706 292,416
Operating grants and contributions 6,188 - - - 2,436 42,531 510,533 94,462 - 103,208
Capital grants and contributions 88,046 327,240 474,681 765,363 784,969 - - - 10,354,544 -
Total Business-type program revenues 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 19,597,815
Total Primary Government program revenues $ 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 $ 44,584,666
NET (EXPENSE) REVENUE
Governmental Activities $ (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) $ (26,337,667)
Business-type Activities (604,788) (813,821) (1,343,747) (904,650) (303,486) 469,478 (448,419) (1,985,873) 11,371,648 1,721,362
Total Primary Government net expense $ (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) $ (24,616,305)
City of Muskegon
CHANGES IN NET POSITION
Last Ten Fiscal Years
2013 2014 2015 (a) 2016 2017 2018 (b) 2019 2020 2021 2022
GENERAL REVENUES AND OTHER CHANGES IN NET POSITION
Governmental Activities
Property taxes $ 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 $ 9,182,184
Income taxes 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 10,020,370
Franchise fees 358,785 358,754 369,965 372,117 378,955 368,495 380,343 361,405 374,219 369,420
Grants and contributions not restricted for specific programs 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 15,303,423
Unrestricted investment earnings 73,157 146,590 99,733 189,408 106,653 92,771 546,533 568,408 229,177 (644,067)
Miscellaneous 102,388 124,085 805,432 626,014 512,738 545,536 550,381 577,677 370,268 918,179
Gain on sale of capital asset 44,899 23,836 20,302 99,031 844,062 712,415 1,333,414 317 2,641,064 1,122,888
Transfers - - - - - - - - (35,000) 35,000
Total Governmental Program Revenues 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 36,307,397
Business-type Activities
Unrestricted investment earnings 33,148 31,251 29,879 25,688 25,277 28,550 24,063 9,181 9,918 23,856
Transfers - - - - - - - - 35,000 (35,000)
Total Business-type program revenues 33,148 31,251 29,879 25,688 25,277 28,550 24,063 9,181 44,918 (11,144)
Total Primary Government program revenues $ 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 $ 36,296,253
CHANGE IN NET POSITION
Governmental Activities $ (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 $ 9,969,730
Business-type Activities (571,640) (782,570) (1,313,868) (878,962) (278,209) 498,028 (424,356) (1,976,692) 11,416,566 1,710,218
Total Primary Government $ (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 $ 11,679,948
(a) In 2015, the City implemented GASB 68 and 71 which changed how governments measure and report pension liabilities.
136
(b) 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
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
General fund
Nonspendable $ 447,341 $ 300,952 $ 220,178 $ 232,332 $ 209,353 $ 222,458 $ 241,684 $ 280,986 $ 269,920 $ 881,961
Restricted - - - - - - - - 66,965 8,701
Committed - - - - - - - - 39,000 189,037
Assigned 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 1,800,000
Unassigned 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 7,981,674
Total general fund $ 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 $ 10,861,373
All other governmental funds
Nonspendable $ 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 $ 1,737,125
Restricted 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 5,170,662
Assigned 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 2,195,895
Unassigned (82,048) (100,054) - - - - - (1,601,331) (2,919,404) -
Total all other governmental funds $ 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 $ 9,103,682
SOURCE: The information in these schedules
137
(unless otherwise noted) is derived from the
comprehensive annual financial reports for the
relevant year.
City of Muskegon
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Revenues
Taxes $ 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 $ 18,795,646
Intergovernmental 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 28,487,691
Charges for services 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 7,744,999
Other 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 5,399,182
Total revenues 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 60,427,518
Expenditures
Public representation 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 1,758,928
Administrative services 508,130 497,025 554,330 577,454 624,284 537,913 739,301 844,270 783,403 945,841
Financial services 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 5,668,254
Public safety 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 15,781,113
Public works 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 4,472,813
Highways, streets and bridges 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 3,330,669
Community and economic development 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 10,306,669
Culture and recreation 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 6,085,847
Other governmental functions 299,812 643,666 369,408 305,807 280,416 355,241 281,711 371,461 380,232 485,024
Debt service
138
Principal 395,211 402,492 417,842 428,199 283,563 288,934 294,313 818,285 2,813,804 1,342,462
Interest 292,554 278,412 272,946 257,516 211,242 197,723 189,905 543,740 943,216 1,011,004
Issuance costs - - - 97,578 - - - 70,525 140,750 1,000
Capital outlay 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 7,775,915
Total expenditure 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 58,965,539
Excess of revenues over (under) expenditures (258,569) (817,667) 2,039,529 (1,397,999) 497,687 992,021 (2,696,819) (17,167,117) (14,680,012) 1,461,979
Other financing sources (uses)
Transfers in 1,356,229 743,035 853,910 1,563,094 1,805,000 1,370,000 1,210,236 2,017,077 895,000 9,832,799
Transfers out (784,275) (771,081) (942,933) (1,638,094) (1,818,000) (1,385,000) (1,210,236) (2,037,077) (1,555,000) (10,197,799)
Long-term debt issued - - - 97,578 - - - 21,691,740 7,152,424 1,370,873
Proceeds from sale of capital assets 190,263 176,887 244,685 190,957 1,529,325 741,803 1,541,041 491,924 2,908,552 1,204,675
Total other financing sources (uses) 762,217 148,841 155,662 213,535 1,516,325 726,803 1,541,041 22,163,664 9,400,976 2,210,548
Net change in fund balances $ 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) $ 3,672,527
Debt service as a percentage of noncapital
expenditures 2.56% 2.43% 2.42% 2.09% 1.52% 1.36% 1.37% 3.40% 9.06% 4.60%
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
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%
2022 8,793,023 14.6% 10,002,623 16.6% 28,487,691 47.1% 7,744,999 12.8% 2,306,048 3.8% 582,633 1.0% 35,018 0.1% 2,475,483 4.1% 60,427,518 30.0%
SOURCE: The information in these schedules (unless otherwise noted) is derived from the comprehensive annual financial reports for the relevant year.
139
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
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%
2021 411,808,285 143,992,198 53,700,376 609,500,859 73,874,500 683,375,359 15,756,956 1,312,300 17,069,256 700,444,615 12.9722 93.98%
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
140
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
2021 580,236,600 186,202,700 58,746,100 825,185,400 73,866,200 899,051,600 16,273,300 1,312,300 17,585,600 916,637,200 1,833,274,400
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
6/30/2022 6/30/2013
Percent of Percent of
Taxable Total Taxable Taxable Total Taxable
Taxpayer Valuation Rank Valuation Valuation Rank Valuation
Consumers Energy $ 19,074,117 1 2.86% $ 46,472,581 1 7.4%
DTE Gas Company 15,309,976 2 2.30% 6,918,200 2 1.1%
James Street Capital Holdings 10,214,100 3 1.53%
Muskegon SC Holdings LLC 6,147,883 4 0.92% 4,240,100 6 0.7%
Michigan Electric Transmission 5,871,800 5 0.88% 0.0%
Glen Oaks Apartments LLC 3,607,163 6 0.54% 3,914,200 7 0.6%
Mercy Health Partners 3,246,556 7 0.49%
141
Core Sherman LLC 3,160,129 8 0.47%
Verplank Port Facility LLC 3,035,700 9 0.46%
Hinman Lake LLC 2,902,866 10 0.44%
Adac Plastics 6,079,926 5 1.0%
Esco Company 6,798,181 3 1.1%
GE Aviation 6,123,500 4 1.0%
Coles Quality Foods 3,491,200 9 0.6%
Lorin Industries 3,854,731 8 0.6%
P&G Holdings NY LLC 3,462,180 10 0.5%
Total - 10 Largest 72,570,290 10.90% 91,354,799 14.5%
Total - All Other 593,289,262 89.10% 539,286,370 85.5%
$ 665,859,552 100.0% $ 630,641,169 100.0%
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
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
2021 9.9180 0.0788 2.9754 12.9722 2.3821 0.4351
Overlapping - County-Wide Rates
Muskegon Intermediate Special Vocational Community MAISD Community
Year County School Education Education College Gen Ed College Debt
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
2021 6.8490 0.4562 2.2815 0.9922 2.1888 0.9926 0.3400
Overlapping - School District Grand Total
State Non-
Year Operating Debt Total Education Homestead Homestead
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
2021 17.7518 9.3467 27.0985 6.0000 45.2364 62.9882
SOURCE: City of Muskegon Treasurer' Office
142
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
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%
2021 9,987,802 9,121,784 91.3% 637,083 9,758,867 97.7% - 19,026 41,200 0.60%
143
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 2012 ‐ 2022
$12,000,000
$10,000,000
INCOME TAX $
$8,000,000
$6,000,000
$4,000,000
$2,000,000
$‐
2012 ‐ 2013 2013 ‐ 2014 2014 ‐ 2015 2015 ‐ 2016 2016 ‐ 2017 2017 ‐ 2018 2018 ‐ 2019 2019‐20 2020‐21 2021‐22
Resident $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 $3,771,609
Non‐Resident 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 4,609,744
Other 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 1,621,270
Total Income Tax $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 $10,002,623
144
FISCAL YEAR
NUMBER OF RETURNS 2012 ‐ 2022
20,000
18,000
1,750
1,750 1,750 1,750 1,750
1,650 1,650
16,000
1,650
14,000 1,650
1,650
12,000
RETURNS
11,009 10,631 10,713 10,578
10,997 10,278 10,256
10,000 Other
9,426
8,524
8,301 Non‐Resident
8,000
Resident
6,000
4,000
5,110 5,463 5,458 5,337 5,464 5,352 5,493
4,852 4,302 4,732
2,000
‐
2012 ‐ 2013 2013 ‐ 2014 2014 ‐ 2015 2015 ‐ 2016 2016 ‐ 2017 2017‐ 2018 2018‐19 2019‐20 2020‐21 2021‐22
FISCAL YEAR
City of Muskegon
TOTAL INCOME TAX COLLECTED AND NUMBER OF RETURNS FILED - DATA
Last Ten Fiscal Years
Income Tax 2012 ‐ 2022
Year 2012 ‐ 2013 2013 ‐ 2014 2014 ‐ 2015 2015 ‐ 2016 2016 ‐ 2017 2017 ‐ 2018 2018 ‐ 2019 2019‐20 2020‐21 2021‐22
Resident $ 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 $ 3,771,609
Non‐Resident 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 4,609,744
Other 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 1,621,270
Total Income Tax $ 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 $ 10,002,623
Number of Returns 2012‐2022
Year 2012 ‐ 2013 2013 ‐ 2014 2014 ‐ 2015 2015 ‐ 2016 2016 ‐ 2017 2017‐ 2018 2018‐19 2019‐20 2020‐21 2021‐22
Resident 5,110 5,463 5,458 5,337 5,464 5,352 5,493 4,852 4,302 4,732
Non‐Resident 10,997 11,009 10,631 10,713 10,578 10,278 10,256 9,426 8,301 8,524
Other 1,750 1,750 1,750 1,750 1,750 1,650 1,650 1,650 1,650 1,650
145
Total Returns 17,857 18,222 17,839 17,800 17,792 17,280 17,399 15,928 14,253 14,906
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
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
146
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
2022 29,229,777 1,173,411 - 30,403,188 - 14,374,715 14,374,715 44,777,903 1,192
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, 2022
Total Debt Debt Supported by City
Name of Governmental Unit Outstanding Self Supporting General Revenues
Direct Debt
City of Muskegon:
Revenue Bonds $ 14,374,715 $ 14,374,715 $ -
Capital Improvement Bonds 29,229,777 - 29,229,777
Installment Purchase Agreements 1,173,411 - 1,173,411
Component Unit Debt:
Local Development Finance Authority 1,096,547 1,096,547 -
Total City Direct Debt $ 45,874,450 $ 15,471,262 $ 30,403,188
City Share as
Gross Percent of Gross Net
Overlapping Debt
Muskegon School District $ 81,265,000 95.82% $ 77,868,123
Orchard View School District 35,479,418 16.93% 6,006,665
Reeth's Puffer School District 60,921,723 0.95% 578,756
Hackley Public Library 1,775,000 95.82% 1,700,805
Muskegon County 100,828,458 12.98% 13,087,534
Muskegon Community College 28,360,000 12.98% 3,681,128
Total Overlapping Debt $ 308,629,599 102,923,012
Total City Direct and Overlapping Debt $ 133,326,200
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 overlapping 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.
147
City of Muskegon
LEGAL DEBT MARGIN INFORMATION
Last Ten Fiscal Years
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Debt Limit $ 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 $ 144,430,377
Total net debt applicable to limit 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 31,499,735
Legal debt margin $ 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 $ 112,930,642
Total net debt applicable to the limit as 19.92% 20.82% 19.46% 18.56% 16.78% 14.41% 8.42% 25.70% 24.72% 21.81%
a percentage of debt limit
Legal Debt Margin Calculation for 2022:
Assessed Valuation: $ 1,444,303,769
Legal Debt Limit (10% ) 144,430,377
Total Indebtedness: $ 45,874,450
Debt not Subject to Limitation:
Paid by Special Assessment -
Revenue Bonds (14,374,715)
Debt Subject to Limitation 31,499,735
148
Legal Debt Margin $ 112,930,642
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
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
2022 9,026,192 7,255,731 1,770,461 994,750 146,568 1,141,318 1.55
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
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) $ - $ - $ - $ -
2021 9,298,294 7,481,042 1,817,252 - 3,151 3,151 576.72
2022 10,303,063 7,502,182 2,800,881 272,000 84,439 356,439 7.86
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.
149
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
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%
2022 37,552 946,458,144 25,204 34.9 3,478 1,051 65,634,790 10.3%
150
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
2022 2013
Percentage Percentage
of total of total
City City
Employer Employees Rank employment Employees Rank employment
Mercy General Health Partners 4,003 1 32.72% 3,657 1 24.7%
ADAC Automotive 1,168 2 9.55% 750 5 5.1%
County of Muskegon 990 3 8.09% 1,028 2 7.0%
G.E. Aviation 624 4 5.10% 644 6 4.4%
Port City Group Companies 421 5 3.44% 419 7 2.8%
KL Outdoors 375 6 3.07%
Muskegon Public School District 360 7 2.94% 941 3 6.4%
151
Muskegon Area Intermediate School District 355 8 2.90%
Knoll Inc 270 9 2.21% 403 8 2.7%
Muskegon Community College 214 10 1.75% 211 10 1.4%
State of Michigan 772 4 5.2%
Baker College
SAF Holland USA 330 9 2.2%
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 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Administration 0.40 0.40 - - - - - - - -
Affirmative Action 1.10 1.10 1.30 1.30 1.46 0.40 1.00 1.00 1.00 1.00
Cemetaries 1.25 1.25 1.25 1.25 1.25 1.25 1.25 2.25 2.25 2.25
City Clerk & Elections 3.00 3.00 3.00 3.00 3.54 3.80 3.80 4.80 5.80 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 1.05 1.00 1.00
City Manager's Office 2.25 2.25 2.05 2.05 1.75 2.75 2.75 2.75 3.30 3.30
City Treasurer's Office 5.00 4.50 5.50 5.50 5.50 5.50 5.50 5.50 5.30 5.30
Environmental Services 5.00 5.00 2.00 2.00 2.00 2.00 - -
Farmers Market 0.05 0.05 0.05 0.05 - 0.20 1.20 1.20 0.70 0.70
Finance Administration 2.00 2.00 3.00 3.00 3.00 3.60 3.00 3.45 3.70 3.70
Fire 28.00 28.83 32.00 35.00 35.00 35.00 26.00 29.00 29.50 29.50
Fire Safety Inspections 6.00 0.83 - - - - - -
Income Tax Administration 5.00 4.50 3.50 3.50 3.50 3.50 3.50 3.50 3.70 3.70
Information Systems 3.00 3.00 3.00 3.00 3.00 3.50 3.50 3.50 3.50 3.50
Parks 6.05 6.00 6.00 6.00 7.05 7.05 10.05 10.05 10.05 10.05
Planning, Zoning & Economic Development 3.00 3.00 3.40 3.40 3.45 3.45 5.45 6.00 7.00 7.00
Police 88.00 87.34 88.00 88.00 88.00 88.00 89.00 89.00 91.00 91.00
152
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 - - - - - -
MVH-Major Streets 10.70 10.70 10.70 10.70 10.70 10.70 12.20 12.20 13.20 13.20
MVH-Local Streets 6.70 6.70 6.70 6.70 6.70 6.70 7.20 7.20 7.20 7.20
Community Development 4.00 4.00 4.00 4.00 4.00 3.55 3.55 4.30 5.30 5.30
Home Program - - - - - - - - -
Lead Program - - - - - - - - -
Sewer Maintenance 9.75 9.80 9.80 9.80 9.80 9.80 9.80 10.80 10.95 10.95
Water Filtration 10.00 10.00 10.00 10.00 10.00 10.00 10.00 11.00 12.15 12.15
Water Maintenance 11.75 11.75 11.75 11.75 11.75 11.75 11.75 12.75 14.90 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 6.00
Public Service Building 8.45 8.45 8.50 8.50 8.50 8.50 8.50 8.75 8.75 8.75
Engineering 4.95 4.95 4.95 4.95 4.95 4.95 5.95 5.20 4.25 4.25
Equipment 6.25 6.25 6.25 6.25 6.25 6.25 6.25 6.25 6.25 6.25
233.00 227.00 228.00 231.00 232.45 233.50 232.50 245.25 257.50 257.50
SOURCE: City of Muskegon Finance Department
City of Muskegon
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
Function/Program 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Administrative Services
Elections
Number of registered voters 26,098 26,025 24,014 24,005 24,612 26,136 25,182 28,127 27,889 28,004
Number of votes cast:
Last general election 13,487 3,029 7,763 2,547 13,179 15,271 11,407 3,105 15,156 15,519
Last city election 2,131 3,029 7,763 2,547 13,179 2,254 1,938 3,105 2,968 4,459
Percentage of registered voters voting:
Last general election 52% 12% 32% 11% 54% 58% 45% 11% 54% 55%
Last city election 8% 12% 32% 11% 54% 9% 8% 11% 12% 16%
Financial Services
Property Tax Bills 15,291 15,211 14,528 14,611 14,243 14,229 14,180 15,090 15,117 15,103
Income Tax Returns 17,857 18,222 17,839 17,800 17,792 17,280 17,399 15,928 14,253 14,906
Paper Check Issued to Vendors 1,677 1,404 1,527 1,608 1,675 1,782 1,863 1,946 1,676 1,853
Electronic Payments to Vendors 1,251 1,579 1,471 1,849 1,998 2,104 2,307 2,494 2,465 3,654
153
Public Safety
Fire Protection
Number of firefighter and officer positions 41 38 35 35 35 23 29 26 29 25
Number of emergency calls 4,563 4,354 4,881 4,938 4,895 4,948 5,106 5,147 4,203 6,018
Police Protection
Number of sworn officer positions 79 76 76 76 75 79 80 80 89 80
Part I (Major) Crimes 2,647 2,240 2,107 1,989 2,816 2,357 1,728 1,621 1,442 808
Public Works
Refuse Collected (Tons per Year) 9,958 10,217 10,512 10,994 11,009 10,801 10,753 11,534 12,289 10,326
Recyclables Collected (Tons per Year) - - - - - - - 160 224 341
Water & Sewer
Number of consumers 13,144 13,086 13,223 13,307 13,248 13,104 13,343 13,422 12,660 12,821
Average daily water consumption (GPD) 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 10,789,900
Water main breaks repaired 11 30 15 16 12 15 11 17 13 15
Sewer flows (Millions Gallons per Year) 1,777 1,833 2,013 1,794 1,815 1,832 2,048 2,138 1,596 1,462
Sewer Service Calls 508 532 501 521 462 451 443 475 541 426
SOURCE: City of Muskegon Departments
City of Muskegon
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
Function/Program 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
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 196.95 196.95 196.95 196.95 196.95 196.95 197.19 187.34 187.34 187.28
Number of streetlights 2,838 2,838 2,838 2,900 2,984 2,967 2,930 2,995 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 2 2
Sewer
154
Sanitary sewers (miles) 177.04 177.04 177.04 177.04 177.04 177.04 177.04 177.04 176.69 166.63
Storm sewers (miles) 184.35 184.25 184.35 184.35 184.35 184.35 184.35 184.35 147.58 148.38
Water
Water mains (miles) 195.95 195.95 195.95 195.95 195.95 195.95 195.27 195.27 213.92 214.70
SOURCE: City of Muskegon Departments
SINGLE AUDIT OF FEDERAL FINANCIAL ASSISTANCE PROGRAMS
155
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 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, 2022, 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 21, 2022.
Report on 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) as a basis for designing 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 or significant deficiencies
may exist that were not identified.
Grand Haven | Grand Rapids | Hart | Muskegon
www.brickleydelong.com
156
BRICKLEY DELONG
City Commission
City of Muskegon
Page 2
Report on 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.
City of Muskegon’s Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on City of Muskegon’s
response to the findings identified in our audit and described in the accompanying Schedule of Findings and
Questioned Costs. City of Muskegon’s response was not subjected to the other auditing procedures applied in the
audit of the financial statements and, accordingly, we express no opinion on the response.
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 21, 2022
157
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
Opinion on Each Major Federal Program
We have audited City of Muskegon’s compliance with the types of compliance requirements identified as subject
to audit 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, 2022. 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.
In our opinion, City of Muskegon complied, in all material respects, with the 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, 2022.
Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United
States of America (GAAS); the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States (Government Auditing Standards); 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). Our responsibilities under those
standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of
Compliance section to our report.
We are required to be independent of City of Muskegon and to meet our other ethical responsibilities, in
accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal
program. Our audit does not provide a legal determination of City of Muskegon’s compliance with the
compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design,
implementation, and maintenance of effective internal control over compliance with the requirements of laws,
statutes, regulations, rules and provisions of contracts or grant agreements applicable to City of Muskegon’s
federal programs.
Grand Haven | Grand Rapids | Hart | Muskegon
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158
BRICKLEY DELONG
City Commission
City of Muskegon
Page 2
Report on Compliance for Each Major Federal Program—Continued
Auditor’s Responsibility for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance
requirements referred to above occurred, whether due to fraud or error, and express an opinion on City of
Muskegon’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute
assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government
Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The
risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control. Noncompliance with the compliance requirements referred to above is considered material, if there is a
substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable
user of the report on compliance about City of Muskegon’s compliance with the requirements of each major
federal program as a whole.
In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance,
we
exercise professional judgment and maintain professional skepticism throughout the audit.
identity and assess the risks of material noncompliance, whether due to fraud or error, and design and
perform audit procedures responsive to those risks. Such procedures include examining, on a test basis,
evidence regarding City of Muskegon’s compliance with the compliance requirements referred to above
and performing such other procedures as we considered necessary in the circumstances.
obtain an understanding of City of Muskegon’s internal control over compliance relevant to the audit in
order to design audit procedures that are appropriate in the circumstances 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 City of Muskegon’s internal control over compliance.
Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over
compliance that we identified during the audit.
Report on 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.
159
BRICKLEY DELONG
City Commission
City of Muskegon
Page 3
Report on Internal Control Over Compliance—Continued
Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s
Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in
internal control over compliance that might be material weaknesses or significant deficiencies in internal control
over compliance. Given these limitation, during our audit we did not identify any deficiencies in internal control
over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or
significant deficiencies in internal control over compliance may exist that were not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over
compliance. Accordingly, no such opinion is expressed.
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 21, 2022
160
City of Muskegon
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the year ended June 30, 2022
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, 2021 Transfers (Cash Basis) Expenditures June 30, 2022 Subrecipents
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 - - 118,732 118,732 - -
B-17-MC-26-0026 871,542 - - 3,973 13,922 9,949 -
B-18-MC-26-0026 937,658 - - - 71,725 71,725 -
B-19-MC-26-0026 973,451 8,404 - 201,592 213,897 20,709 -
B-20-MC-26-0026 994,698 54,405 - 82,924 43,563 15,044 -
COVID-19 - B-20-MW-26-0026 794,564 27,855 - 533,440 541,595 36,010 -
B-21-MC-26-0026 988,508 - - 723,851 744,984 21,133 100,000
Program Income 73,217 - - 73,217 73,217 - -
Total CDBG - Entitlement Grants Cluster 7,417,325 108,067 - 1,755,132 1,821,635 174,570 100,000
161
Home Investment Partnerships Program 14.239
M-17-MC-26-0215 249,537 - - 10,902 10,902 - -
M-18-MC-26-0215 327,681 - - 49,152 49,152 - -
M-19-MC-26-0215 334,818 - - 235,951 245,770 9,819 -
M-20-MC-26-0215 343,362 1,781 - 214,690 218,493 5,584 -
M-21-MC-26-0215 336,456 - - 13,728 56,038 42,310 -
Program Income 53,040 - - 53,040 53,040 - -
Total Home Investment Partnerships Program 1,644,894 1,781 - 577,463 633,395 57,713 -
Healthy Homes Production Program 14.913
MIHHP0083-22 1,500,000 - - - 2,015 2,015 -
Total U.S. Department of Housing and Urban Development 10,562,219 109,848 - 2,332,595 2,457,045 234,298 100,000
City of Muskegon
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS—Continued
For the year ended June 30, 2022
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, 2021 Transfers (Cash Basis) Expenditures June 30, 2022 Subrecipents
U.S. Department of Justice
Direct programs
Bulletproof Vest Partnership Program 16.607
2020 Grant $ 6,615 $ - $ - $ - $ 6,615 $ 6,615 $ -
Edward Byrne Memorial Justice Assistance Grant Program 16.738
2020-DJ-BX-0470 32,996 17,866 - 27,751 9,885 - 9,885
15PBJA-21-GG-01586-JAGX 40,467 - - 21,906 21,906 - -
73,463 17,866 - 49,657 31,791 - 9,885
Criminal and Juvenile Justice and Mental Health Collaboration Program 16.745
2019-MO-BX-0006 100,000 4,837 - 63,909 59,072 - -
Total direct programs 180,078 22,703 - 113,566 97,478 6,615 9,885
Passed through Michigan Department of Health and Human Services
Violence Against Women Formula Grants 16.588
162
E20211656-002 177,934 9,965 - 26,844 16,879 - -
E20221719-001 282,512 - - 117,173 132,952 15,779 -
460,446 9,965 - 144,017 149,831 15,779 -
Passed through Battle Creek Community Foundation
Project Safe Neighborhoods 16.609
2018 Project Safe Neighborhoods Grant 6,420 - - 6,420 6,420 - -
2019 Project Safe Neighborhoods Grant 21,905 - - 21,905 21,905 - -
28,325 - - 28,325 28,325 - -
Passed through Ottawa County
Edward Byrne Memorial Justice Assistance Grant Program 16.738
2020-MU-BX-0011 16,284 - - 16,284 16,284 - -
Total U.S. Department of Justice 685,133 32,668 - 302,192 291,918 22,394 9,885
U.S. Department of Treasury
Passed through Michigan Department of Treasury
Coronavirus State and Local Fiscal Recovery Funds 21.027
COVID-19 - American Rescue Plan Act 22,881,894 - (11,440,947) 11,440,947 9,234,029 (13,647,865) 3,000,000
U.S. Small Business Administration
Direct programs
Shuttered Venue Operators Grant Program 59.075
SBAHQ21SV010622 625,498 - - 625,498 625,498 - -
City of Muskegon
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS—Continued
For the year ended June 30, 2022
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, 2021 Transfers (Cash Basis) Expenditures June 30, 2022 Subrecipents
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 $ 497,694 $ - $ 924,976 $ 427,282 $ - $ -
5679-01 4,715,000 232,190 - 3,297,075 3,114,986 50,101 -
16,215,000 729,884 - 4,222,051 3,542,268 50,101 -
Drinking Water State Revolving Fund Cluster
Capitalization Grants for Drinking Water State Revolving Funds 66.468
7446-01 4,225,000 - - 124,394 124,394 - -
Total Environmental Protection Agency 20,440,000 729,884 - 4,346,445 3,666,662 50,101 -
U.S. Department of Health and Human Services
Passed through Michigan Department of Health and Human Services
163
Children's Health Insurance Program 93.767
E20211485-002 943,785 56,290 - 125,354 69,064 - -
E20221736-001 880,100 - - 477,837 552,561 74,724 -
Total Department of Health and Human Services 1,823,885 56,290 - 603,191 621,625 74,724 -
TOTAL FEDERAL ASSISTANCE $ 57,018,629 $ 928,690 $ (11,440,947) $ 19,650,868 $ 16,896,777 $ (13,266,348) $ 3,109,885
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, 2022
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, 2022. 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. Unearned revenue for the American Rescue Plan Act at June 30, 2021 was inadvertently ommitted from the prior year Schedule of Expenditures of Federal Awards.
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, 2022 and federal expenditures per the Schedule of Expenditures of Federal Awards.
164
Federal revenues per City of Muskegon financial statements
General Fund $ 291,918
Other governmental funds 12,811,940
13,103,858
Plus drawdowns on federal loans 3,666,662
Plus program income 126,257
Federal expenditures per the Schedule of Expenditures of Federal Awards $ 16,896,777
City of Muskegon
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For the year ended June 30, 2022
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:
Assistance Listing Number(s) Name of Federal Program/Cluster
U.S. Department of Treasury
21.027 ● Coronavirus State and Local Recovery Funds
U.S. Small Business Administration
59.075 ● Shuttered Venue Operators Grant
Environmental Protection Agency
66.458 ● Capitalization Grants for Clean 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
165
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166
CLIENT DOCUMENTS
167
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 21, 2022
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 advises you that there were no audit findings reported in our single
Finance audit report, dated December 9, 2021, for the year ended June 30, 2021.
(231)724-6713
FAX (231)726-2325
Sincerely,
Fire Department
(231)724-6795
FAX (231)724-6985
Human Resources
Co. (Civil Service)
(231)724-6442
FAX (231)724-6840 Ken Grant
Income Tax Finance Director
(231)724-6770
FAX (231)724-6768
Mayor’s Office
(231)724-6701
FAX (231)722-1214
Planning/Zoning
(231)724-6702
FAX (231)724-6790
Police Department
(231)724-6750
FAX (231)722-5140
Public Works
(231)724-4100
FAX (231)722-4188
SafeBuilt
(Inspections)
(231)724-6715
FAX (231)728-4371
Treasurer
(231)724-6720
FAX (231)724-6768
Water Billing
(231)724-6718
FAX (231)724-6768
Water Filtration 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 168
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 CORRECTIVE ACTION PLAN
Comm. & Neigh.
Services
(231)724-6717 December 21, 2022
FAX (231)726-2501
Computer Info.
Technology U.S. Department of Housing and Urban Development
(231)724-4126
FAX (231)722-4301 Washington D.C.
Engineering
(231)724-6707
FAX (231)727-6904 City of Muskegon respectfully submits the following Corrective Action Plan for the year ended June
Finance 30, 2022.
(231)724-6713
FAX (231)726-2325
Name and address of independent public accounting firm:
Fire Department
(231)724-6795 Brickley DeLong, P.C.
FAX (231)724-6985 P.O. Box 999
Human Resources Muskegon, MI 49443
Co. (Civil Service)
(231)724-6442 Audit period: June 30, 2022
FAX (231)724-6840
Income Tax The findings from the Schedule of Findings and Questioned Costs for the year ended June 30, 2022
(231)724-6770 provided no findings in either Section II or Section III. Accordingly, there are no matters requiring
FAX (231)724-6768
corrective action as shown below.
Mayor’s Office
(231)724-6701 SECTION II – FINANCIAL STATEMENT FINDINGS
FAX (231)722-1214
Planning/Zoning There were no findings in relation to the financial statement audit.
(231)724-6702
FAX (231)724-6790
SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
Police Department
(231)724-6750
FAX (231)722-5140 There were no findings in relation to the major federal award programs.
Public Works
(231)724-4100 If the U.S. Department of Housing and Urban Development has questions regarding this plan, please
FAX (231)722-4188 call Ken Grant at (231) 724-6932.
SafeBuilt
(Inspections) Sincerely,
(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 169
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