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City of Muskegon, Michigan
Annual Comprehensive
Financial Report
Fiscal Year Ended June 30, 2023
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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 ............................................................................... 88
Budgetary Comparison Schedule—Major Street and Trunkline Fund ................................................ 93
Budgetary Comparison Schedule—Trinity Health Arena Fund .......................................................... 94
Schedule of Changes in Net Pension Liability and Related Ratios ...................................................... 95
Pension System Schedule of Contributions ......................................................................................... 96
Retiree Healthcare System Schedule of Changes in the
Net OPEB Liability and Related Ratios ............................................................................................. 97
Retiree Healthcare System Schedule of Contributions ........................................................................ 99
Retiree Healthcare System Schedule of Investment Returns ............................................................. 100
1
City of Muskegon
TABLE OF CONTENTS
Other Supplemental Information
Other Governmental Funds
Description of Other Governmental Funds ..................................................................................... 102
Combining Balance Sheet ............................................................................................................... 104
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances.............................................................................................................................. 105
Other Special Revenue Funds
Combining Balance Sheet............................................................................................................ 106
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances .......................................................................................................................... 107
Budgetary Comparison Schedule—Other Special Revenue Funds ............................................. 108
Other Capital Projects Funds
Combining Balance Sheet............................................................................................................ 111
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances .......................................................................................................................... 112
Internal Service Funds
Description of Internal Service Funds ............................................................................................ 113
Combining Statement of Net Position ............................................................................................ 114
Combining Statement of Revenues, Expenses and
Changes in Fund Net Position ..................................................................................................... 115
Combining Statement of Cash Flows.............................................................................................. 116
Fiduciary Funds
Description of Fiduciary Funds....................................................................................................... 117
Custodial Funds
Combining Statement of Net Position ......................................................................................... 118
Combining Statement of Changes in Net Position ...................................................................... 119
Discretely Presented Component Units
Description of Discretely Presented Component Units .................................................................. 121
Combining Balance Sheet ............................................................................................................... 122
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position .................................................................................................. 123
Combining Statement of Revenues, Expenditures and Changes
in Fund Balances (Deficits) ......................................................................................................... 124
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balances (Deficits) to the Statement
of Activities ................................................................................................................................. 125
Schedule of Indebtedness ................................................................................................................... 127
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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 27, 2023
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 issued to fulfill that requirement for the fiscal year ending June 30, 2023.
FAX (231)722-4301
Engineering Management assumes full responsibility for the completeness and reliability of the
(231)724-6707
FAX (231)727-6904 information in this report, based upon a comprehensive internal control framework
established for this purpose. Because the cost of internal control should not exceed
Finance
(231)724-6713 anticipated benefits, the objective is to provide reasonable, rather than absolute,
FAX (231)726-2325 assurance that the financial statements are free of any material misstatements.
Fire Department
(231)724-6795
FAX (231)724-6985
Brickley DeLong, PC, Certified Public Accountants, have issued an unmodified
(“clean”) opinion on the City of Muskegon’s financial statements for the year ended
Human Resources
Co. (Civil Service) June 30, 2023. The independent auditor’s report is located at the front of the financial
(231)724-6442 section of this report.
FAX (231)724-6840
Income Tax
(231)724-6770
Management’s discussion and analysis (MD&A) follows the independent auditor’s
FAX (231)724-6768 report and provides a narrative introduction, overview, and analysis of the basic
Mayor’s Office financial statements. MD&A complements this letter of transmittal and should be read
(231)724-6701 in conjunction with it.
FAX (231)722-1214
Planning/Zoning
(231)724-6702
FAX (231)724-6790 Profile of the government
Police Department The City of Muskegon operates under a Commission-Manager form of government and
(231)724-6750
FAX (231)722-5140
provides a full range of traditional municipal services. Policy-making and legislative
authority are vested in the governing board (Commission) consisting of the mayor and
Public Works
(231)724-4100 six commissioners. Two commissioners are elected at large, and voters from the four
FAX (231)722-4188 respective wards elect each of the four ward commissioners. Commission members
SafeBuilt serve four-year terms, with the two at large members elected every four years in odd
(Inspections)
(231)724-6715
years preceding the Michigan Gubernatorial election and the four ward commissioners
FAX (231)728-4371 elected every four years in odd years preceding the Presidential election. The Mayor is
Treasurer also elected at-large for a four-year term in the year prior to the Michigan Gubernatorial
(231)724-6720 election. The Mayor and Commission appoint the City of Muskegon’s manager, who
FAX (231)724-6768
oversees day-to-day operations in the City.
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 (contracted); 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 must 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 is 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, division
heads, 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
38,401, is the largest city on the eastern shore of Lake Michigan. The City is in Muskegon
County and 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 an active port of call for the Great Lakes cruise industry, with nearly 20 cruise
ship visits annually, bringing more than 170,000 passengers.
Muskegon is home to successful summertime festivals that attract more than 100,000
visitors to the community annually. These include Taste of Muskegon, 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, the
Muskegon County Latino Festival, and the Michigan Irish Music Festival, among others.
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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 and is currently undergoing a $10 million expansion. At the
same time, 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.
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 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.
As we are several years out of the COVID-19 pandemic, City revenues continue to recover, with
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.
7
Long-term financial planning and major initiatives
The unassigned fund balance in the General Fund at year-end was 17.2% of total actual General
Fund revenues for the preceding year. This amount was 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 of future
developments. The City anticipates general fund revenues will grow over the next five years.
Among the City's major initiatives and accomplishments in the fiscal year 2022-23 were the
following:
The City acquired an old railroad line through the Nims and Lakeside neighborhoods. The
acquisition will allow for the development of Windward Pointe 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 2023, 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 150 homes.
To date, 50% of homes of homes sold as part of this program have been purchased by
individuals or families at 120% or less of the Area Median Income (AMI).
Construction began at Adelaide Pointe in 2023. The waterfront developments will feature
more than $200 million in investments and create hundreds of new housing opportunities
in the City.
Parkland Properties purchased and began initial steps to redevelop the former Shaw
Walker property on lower West Western Ave. This will be a $220 million mixed-use
development that will bring hundreds of additional housing options to the City at various
price points. The project was also awarded an $18 million allocation from the State of
Michigan, the largest in the City’s history.
8
Enterprise Funds (Water & Sewer)
For several years, the City has actively engaged in the State of Michigan’s Drinking Water
State Revolving Fund (DWSRF) and Clean Water State Revolving Fund (SRF) programs to aid
in the replacement of water and sewer infrastructure throughout the City. Infrastructure that, in
many cases, has been in use for a century or more. Use of these funding options expanded
during the pandemic as more federal and state dollars became available.
These programs are run as a reimbursement of funds spent by the local municipality.
Reimbursements come several weeks to months after reimbursement documentation is
submitted to the State. Because the City’s fiscal year ends in the middle of construction
season, the Water Fund will often show a larger deficit than might exist during the non-
construction season because the City is waiting on reimbursements from the State. For
example, at the end of FY 2023, the City was waiting on nearly $1 million in reimbursements
from the State.
This situation has highlighted two things:
1. The Water Fund has been operating at a loss primarily because of the construction
activity and there is a need for additional revenue.
2. Building up the Water Fund’s net position to the American Water Works Association’s
(AWWA) recommended six months of operational expenses is needed.
To achieve these two goals, the City Commission has already instituted a debt service fee paid
by all water and sewer users in the City. This debt service fee is based on the previous fiscal
year’s debt payments. Additionally, the City anticipates adjusting commodity rates to build up
the Water Fund’s net position to reach the AWWA’s six months of operational cushion.
This financial cushion will allow the Water Fund to absorb construction costs while waiting for
reimbursements.
It is worth noting that despite these challenges, it is still in the City’s best interest to take
advantage of these state revolving loan fund programs for water and sewer replacement. The
City of Muskegon, like all municipalities in the State of Michigan, must replace all its lead
service lines by the end of the 2030s per state mandates. The most economical way to
achieve this is by taking advantage of the state revolving loan funds, which allow projects to be
completed at an overall discount.
9
Relevant financial policies
The City of Muskegon has adopted a comprehensive set of financial policies to ensure adequate
protection of its assets from loss, theft, or misuse and to provide good accounting data to prepare
financial statements in conformity with generally accepted accounting principles.
Budgetary control is maintained through an annual budget resolution passed by the City
Commission. A review of estimated expenditures retains fiscal control at the functional level
before purchasing is approved. Encumbrances are not recorded in the City’s funds. However,
the City utilizes an informal monitoring system to facilitate budgetary control over proposed
purchases. This system uses online 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 before 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 ending June
30, 2022. This was the 36th consecutive year that the city has received this award. The City
has submitted the June 30, 2023, ACFR for consideration but has not received award
confirmation at this time. To be awarded a Certificate of Achievement, a government must
publish an easily readable and efficiently organized ACFR that satisfies generally accepted
accounting principles and applicable program requirements.
A Certificate of Achievement for Excellence in Financial Reporting is valid for one year.
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.
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 preparing this report. Credit also must be given
to the Mayor and Commissioners for their support in maintaining the highest standards of
professionalism in managing the City of Muskegon’s finances.
Respectfully submitted,
Jonathan C. Seyferth Kenneth D. Grant
City Manager Finance Director
10
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Muskegon
Michigan
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2022
Executive Director/CEO
11
Organizational Structure 2022-23
Mayor and City Commission
City Manager External Auditors
City Attorney
Planning Commission
Finance and Public Works Zoning Board of Appeals
Public Safety Development Services
Administrative Services Historic District Commission
Housing Code Board of Appeals
Board of Review
Finance Administration Income Tax Board of Review
Treasury/Income Tax Community Civil Service Commission
City Clerk Streets/Highways Development DDA/BRA
Police Information Systems Utilities Neighborhood Services LDFA
Parks and Recreation Planning/Zoning
12
Fire Public Relations BID Board
Code Enforcement Elections Cemeteries Sanitation Economic Development Equal Opportunities Committee
Risk Management Streetlights Strategic Planning Local Officers Compensation
Employee Relations Special Events Committee
Farmers Market Citizen's Police Review Board
CDBG District Council
Election Commission
Environmental Code Construction Board of Appeals
(SAFEbuilt) Human Resources (County) Consumers Energy
Inspections (SAFEbuilt) Assessing (County) Republic Waste Services Muskegon Area First Housing Commission
Prosecutions (Parmenter LC Walker Arena (Two T's LLC) County Wastewater
O'Toole)
Elected Officials
Independent Bodies Municipal Executive Division Heads
Frontline Staff Contractual
ANNUAL COMPREHENSIVE FINANCIAL
REPORT CITY OF MUSKEGON, MICHIGAN
LIST OF PRINCIPAL OFFICIALS
June 30, 2023
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
13
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14
FINANCIAL SECTION
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16
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, 2023, 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, 2023, 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.
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.
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.
Grand Haven | Grand Rapids | Hart | Muskegon
www.brickleydelong.com
17
BRICKLEY DELONG
City Commission
City of Muskegon
Page 2
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 judgment 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 judgment, 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.
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.
18
BRICKLEY DELONG
City Commission
City of Muskegon
Page 3
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 27, 2023
19
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20
2023 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, 2023. 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 $122,316,268 as of June 30, 2023. The City has a deficit in unrestricted net
position of $20,398,681. 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 $8,291,945 during the year ended June 30, 2023.
The City’s governmental funds reported combined ending fund balance of $21,964,039, an increase of
$1,998,984 (10.01%) from the prior year.
The City’s General Fund reported a total fund balance of $10,017,908, a decrease of $843,465 from the
prior year balance of $10,861,373.
OVERVIEW OF THE FINANCIAL STATEMENTS
This annual report consists of three parts - management’s discussion and analysis (this section), the
basic financial statements, and required supplementary information. The basic financial statements
include two kinds of statements that present different views of the City.
The first two statements are government-wide financial
statements that provide both long-term and short-term
information about the City’s overall financial status.
The remaining statements are fund financial statements
that focus on individual parts of the government, reporting
individual City operations in greater detail than the government-
wide statements.
The governmental funds statements tell how general
government services were financed in the short-term as
well as what remains available for future spending.
Proprietary fund statements offer short- and long-term
financial information about activities the City operates like
private businesses.
Fiduciary fund statements provide information about the
financial relationships in which the City acts solely as a trustee or agent
for the benefit of others, to whom the resources in question belong.
21
The financial statements also include detailed notes that explain some of the information in the financial
statements and provide additional data. The statements are followed by a section of required
supplementary information that further explains and supports the information in the financial
statements. The figure above shows how the required parts of this annual report are arranged and
related to one another.
The remainder of this overview section of management’s discussion and analysis explains the structure
and contents of each of the statements.
Government-Wide Statements
The government-wide statements report information about the City as a whole using accounting
methods similar to those used by private-sector companies. The statement of net position includes all
of the government’s assets/deferred outflows of resources and liabilities/deferred inflows of resources.
All of the current year’s revenues and expenses are accounted for in the statement of activities
regardless of when cash is received or paid.
The two government-wide statements report the City’s net position and how they have changed. Net
position—the difference between the City’s assets/deferred outflows of resources and
liabilities/deferred inflow of resources—is one way to measure the City’s overall financial health or
position. Over time, increases or decreases in the City’s net position are an indicator of whether its
financial health is improving or deteriorating, respectively. However, to assess the overall health of the
City, one needs to consider additional nonfinancial factors such as changes in the City’s tax base.
The government-wide financial statements include not only the City of Muskegon itself (known as the
primary government), but also legally separate component units for which the City is financially
accountable. Financial information for these component units is reported separately from the financial
information presented for the primary government itself.
The government-wide financial statements of the City include the governmental activities. Most of the
City’s basic services are included here, such as public representation services, administrative services,
financial services, public safety, public works, highways, streets and bridges, community and economic
development, culture and recreation, general administration, and interest on long-term debt. Income
taxes, federal grants, property taxes and revenues from the State of Michigan finance most of these
activities.
Also included in the government-wide statements are the City’s business-type activities: water, sewer
and marina operations.
22
Fund Financial Statements
The fund financial statements provide more detailed information about the City’s major funds—not the
City as a whole. Funds are accounting devices that the City uses to keep track of specific sources of
funding and spending for particular purposes.
The City has the following kinds of funds:
Governmental funds—Most of the City’s basic services are included in governmental funds, which
focus on (1) how cash and other financial assets that can readily be converted to cash flow in and
out and (2) the balances left at year-end that are available for spending. Consequently, the
governmental fund statements provide a detailed short-term view that helps the user determine
whether there are more or fewer financial resources that can be spent in the near future to finance
the City’s programs. Because this information does not encompass the additional long-term focus
of the government-wide statements, we provide additional information on the subsequent page of
the governmental funds statements that explain the relationship (or differences) between them.
Proprietary funds—Services for which the City charges customers a fee and are intended to be self-
supporting are generally reported in proprietary funds. The City uses three proprietary funds:
water, sewer, and marina and launch ramp. Proprietary funds, like the government-wide
statements, provide both long-term and short-term financial information.
The City uses internal service funds to report activities that provide supplies and services for the
City’s other programs and activities.
Fiduciary funds—The City is the trustee, or fiduciary, for certain funds. It is also responsible for
other assets that—because of a trust arrangement—can be used only for the trust beneficiaries.
The City is responsible for ensuring that the assets reported in these funds are used for their
intended purposes. All of the City’s fiduciary activities are reported in a separate statement of net
position and a statement of changes in net position. We exclude these activities from the City’s
government-wide financial statements because the City cannot use these assets to finance its
operations.
Component units – Finally, the City of Muskegon’s Annual Comprehensive Financial Report includes
four component units: The Downtown Development Authority (DDA), the Tax Increment Finance
Authority (TIFA), the Local Development Finance Authority (LDFA) and, the Brownfield
Redevelopment Authority (BRA), which is comprised of six designated brownfield areas.
Component units are separate legal entities for which the City of Muskegon has some level of
financial accountability. The component units of the City exist primarily for the issuance and
repayment of debt to finance projects in specific areas of the City. Accordingly, they are discussed
below under the Capital Assets and Debt Administration heading.
23
FINANCIAL ANALYSIS OF THE CITY AS A WHOLE
Net position. The Statement of Net Position provides an overview of the City’s assets/deferred outflows
of resources, liabilities/deferred inflow of resources and net position. Over time this can provide a good
indicator of the City’s fiscal health.
The total net position of the City was $122,316,268 as of June 30, 2023. This is an increase of
$8,291,945 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
6/30/2023 6/30/2022 6/30/2023 6/30/2022 6/30/2023 6/30/2022 Change
Current and other assets $49,557 $53,203 $9,644 $6,947 $59,201 $60,150 -1.58%
Capital assets 106,949 105,605 71,643 69,088 178,592 174,693 2.23%
Total Assets 156,506 158,808 81,287 76,035 237,793 234,843 1.26%
Deferred outflow s of resources 12,239 2,692 851 187 13,090 2,879 354.67%
Total Assets and Deferred Outflow s of Resources 168,745 161,500 82,138 76,222 250,883 237,722 5.54%
Long-term liabilities 81,305 62,472 16,544 15,516 97,849 77,988 25.47%
Current liabilities 18,217 23,700 3,774 3,225 21,991 26,925 -18.32%
Total Liabilities 99,522 86,172 20,318 18,741 119,840 104,913 14.23%
Deferred inflow s of resources 7,869 17,219 858 1,564 8,727 18,783 -53.54%
Total Liabilities and Deferred Inflow s of Resources 107,391 103,391 21,176 20,305 128,567 123,696 3.94%
Net Position `
Net investment in capital assets 77,169 75,202 57,496 54,669 134,665 129,871 3.69%
Restricted 7,228 5,845 822 822 8,050 6,667 20.74%
Unrestricted -23,043 -22,938 2,644 425 -20,399 -22,513 -9.39%
Total Net Position $61,354 $58,109 $60,962 $55,916 $122,316 $114,025 7.27%
The bulk of the City’s net position $134,664,677 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 $8,050,272 of the City’s net position are legally restricted as to use. The City has a deficit in
unrestricted net position of $20,398,681. 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 $2,114,687 during the year.
24
Changes in net position. The City’s total revenues were $91,248,701 for the year ended June 30, 2023.
This represents a 12.82% increase over total revenues collected during the prior fiscal year.
Approximately 35.3% of the City’s revenue stream came from charges to users of specific services such
as water or sewer. Another 14% came from grants from the state and federal governments and 24.6%
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, 2023 was $82,956,756. This
represents a 19.9% increase from reported expenses for the last fiscal year ended June 30, 2022.
76.06% of the City’s expenses were for governmental activities such as police and fire protection,
streets, parks, and general administration. The remaining 23.94% 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 $3,245,873 and the net position for
business-type activities increased by $5,046,072. 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.
25
Changes in City’s Net Position
(In thousands of dollars)
Governmental Business-Type
Activities Activities Total Percentage
6/30/2023 6/30/2022 6/30/2023 6/30/2022 6/30/2023 6/30/2022 Change
Program revenues
Charges for services $11,393 $11,148 $20,818 $19,495 $32,211 $30,643 5.12%
Operating grants and contributions 12,341 11,024 427 - 12,768 11,024 15.82%
Capital grants and contributions 3,801 2,815 2,290 103 6,091 2,918 108.74%
General revenues
Property taxes 10,260 9,182 - - 10,260 9,182 11.74%
Income taxes 12,196 10,020 - - 12,196 10,020 21.72%
State shared revenues 13,168 15,303 - - 13,168 15,303 -13.95%
All other 4,527 1,767 28 24 4,555 1,791 154.33%
Total revenues 67,686 61,259 23,563 19,622 91,249 80,881 12.82%
Governmental activities expenses
Public representation 1,978 1,715 - - 1,978 1,715 15.34%
Administrative services 1095 914 - - 1,095 914 19.80%
Financial services 6,146 5,473 - - 6,146 5,473 12.30%
Public safety 18,908 13,387 - - 18,908 13,387 41.24%
Public w orks 4,561 4,688 - - 4,561 4,688 -2.71%
Highw ays, streets and bridges 7,480 7,309 - - 7,480 7,309 2.34%
Community and economic development 13,217 9,857 - - 13,217 9,857 34.09%
Culture and recreation 7,870 6,589 - - 7,870 6,589 19.44%
General administration 978 511 - - 978 511 91.39%
Interest on long-term debt 866 881 - - 866 881 -1.70%
Business-type activities expenses
Sew er - - 8,609 8,154 8,609 8,154 5.58%
Water - - 10,759 9,261 10,759 9,261 16.18%
Marina and launch ramp - - 490 461 490 461 6.29%
Total expenses 63,099 51,324 19,858 17,876 82,957 69,200 19.88%
Change in net position before transfers 4,587 9,935 3,705 1,746 8,292 11,681 -29.01%
Transfers (1,341) 35 1,341 (35) - - -
Change in net position 3,246 9,970 5,046 1,711 8,292 11,681 -29.01%
Net position at beginning of year 58,108 48,138 55,916 54,205 114,024 102,343 11.41%
Net position at end of year $61,354 $58,108 $60,962 $55,916 $122,316 $114,024 7.27%
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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, 2023 was
$63,099,130.
The net cost that City taxpayers paid for these activities through local property taxes and income
taxes was $22,456,227, or about 35% 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
6/30/2023 6/30/2022 % Change 6/30/2023 6/30/2022 % Change
Governmental activities
Public safety $18,908 $13,387 41.24% $15,634 $10,703 46.07%
Public w orks 4,562 4,688 -2.69% 3,184 3,831 -16.89%
Highw ays, streets and bridges 7,480 7,309 2.34% 0 672 -100.00%
Community and economic development 13,217 9,857 34.09% 7,702 6,329 21.69%
Culture and recreation 7,870 6,589 19.44% 1,331 -2,430 -154.77%
All other 11,062 9,494 16.52% 7,714 7,233 6.65%
Total governmental activities $63,099 $51,324 22.94% $35,565 $26,338 35.03%
Business-Type Activities
The financial goal of the City’s business-type activities (i.e. water, sewer and marina and launch ramp
operations) is to operate on a self-supporting basis without making significant profit or needing general
tax subsidies. For the fiscal year ended June 30, 2023, the City’s total business-type activities realized an
overall increase in net position of $5,046,072.
Sewer Fund net position increased $2,302,493 primarily from the result of adjustments to utility rates.
The Water Fund saw a net position increase of $2,413,874. Marina and Launch Ramp Fund net position
increased $379,027.
27
FINANCIAL ANALYSIS OF THE CITY’S FUNDS
The fund financial statements provide detailed information about the major City funds, not the City as a
whole. The City’s major funds for the fiscal year ended June 30, 2023 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%)
6/30/2023 $5,857,568 -26.61% $34,144,767 17.16%
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%
For the year ended June 30, 2023, General Fund revenues were $1,002,550 higher than the final
amended budget. City income tax collections were driving force behind this revenue surge. Income Tax
collections came in $957,105 above the final amended budget. Income tax collections up $1,900,000
from the previous fiscal year.
Intergovernmental revenues up by $141,216 from last year. Despite receiving less Federal grant this
fiscal year. Funds received from State Grants were up around $63,000. State sales tax constitutional and
County Village Township Revenue Sharing (CVTRS) funds were up by $93,000 from the last fiscal year.
Overall this year, General Fund expenditures exceed revenues reducing overall fund balance by
$843,465. Our fund balance is $10,017,908 which exceeds our Financial Policy standard which requires
the City to maintain an unassigned fund balance equal to at least 13% of actual General Fund Revenues
for the preceding year.
General Fund expenditures were $300,545 higher than projected in the final amended budget. The
variance from the final budgeted expenditures was a very insignificant less than 1%. Some of the key
areas that were higher than budgeted were Sanitation, Parks & Recreation, and Insurance Premiums.
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, 2023, the fund balance of the Major Street and Trunkline Fund increased $1,188,078.
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CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
As of June 30, 2023, the City had invested $178,591,749 in a variety of capital assets, including land,
streets, equipment, buildings, water and sewer lines, and vehicles. This is an increase of $3,899,410
from capital assets reported as of June 30, 2022. 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, 2023, the City had $47,111,364 in bonds and other powers) received a rating of A+ from
long-term obligations outstanding. This represents a .83% Standard & Poor’s in 2023.
decrease from the prior year. The City issued new debt for a
fire truck and water and sewer improvements.
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
6/30/2023 6/30/2022 6/30/2023 6/30/2022 6/30/2023 6/30/2022 Change
Due within one year $2,025 $1,720 $1,505 $1,359 $3,530 $3,079 14.65%
Due in more than one year 30,565 31,094 13,016 13,335 43,581 44,429 -1.91%
Total bonds & other obligations $32,590 $32,814 $14,521 $14,694 $47,111 $47,508 -0.84%
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 $833,373 at year-end as
shown in the table below. This represents a decrease of 24% 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
6/30/2023 6/30/2022 6/30/2023 6/30/2022 Change
Due w ithin one year $265 $255 $265 $255 3.92%
Due in more than one year 568 842 568 842 -32.54%
Total bonds & other obligations $833 $1,097 $833 $1,097 -24.07%
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ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES
The City’s fiscal year 2023-24 capital budget anticipates spending $35,317,595 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 2023-24 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 268.5.
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 19.5% from $10,002,623 for the year ended June 30, 2022 to
$11,957,105 for the year ended June 30, 2023. For 2023-24, the City has estimated income tax revenue
to be $11,250,000.
Year City Income Tax Revenues Percent Change
6/30/2023 $11,957,105 19.5%
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%
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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 2023-24, the City tax levy will be at 9.7880 mills for general operations and 2.9364 mills for
sanitation service. We project that $8,716,349 in total property tax revenue will be collected during
fiscal year 2023-24.
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
6/30/2023 $5,180,344 1.8%
6/30/2022 $5,087,587 7.5%
6/30/2021 $4,733,888 15.0%
6/30/2020 $4,117,935 -3.6%
6/30/2019 $4,271,438 2.8%
For 2023-24, the City projects $5,323,726 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
6/30/2023 $7,471,277 19.1%
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%
31
Based on recent legislative changes, the City began seeing increases in street funding that will carry into
future years. At this time, the City is projecting street revenues for fiscal year 2023-24 of $6,025,000
due to fewer State grants.
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 $20,167,303 during the year ended June 30, 2023. 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, 2023. Water rates will increase by debt service fees 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 wastewater 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 stabilize 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).
32
FINANCIAL STATEMENTS
33
City of Muskegon
STATEMENT OF NET POSITION
June 30, 2023
Governmental Business-type Component
Activities Activities Total Units
ASSETS
Current assets
Cash and investments $ 30,025,808 $ 3,400,476 $ 33,426,284 $ 639,463
Assets managed by others 1,465,078 - 1,465,078 -
Receivables
Accounts and notes 3,416,329 3,692,465 7,108,794 13,936
Leases 395,885 87,286 483,171 -
Due from other governmental units 3,227,732 1,973,771 5,201,503 -
Internal balances 1,630,184 (1,630,184) - -
Inventories 17,624 354,934 372,558 -
Prepaid items 395,522 153,585 549,107 -
Total current assets 40,574,162 8,032,333 48,606,495 653,399
Noncurrent assets
Restricted cash and investments - 841,000 841,000 -
Advances to component units 891,561 - 891,561 -
Leases receivable, less amounts due within one year 7,472,680 770,447 8,243,127 -
Notes receivable, less amounts due within one year 618,841 - 618,841 -
Capital assets, net
Nondepreciable 20,207,552 8,569,081 28,776,633 400,000
Depreciable 86,741,536 63,073,580 149,815,116 417,233
Total noncurrent assets 115,932,170 73,254,108 189,186,278 817,233
Total assets 156,506,332 81,286,441 237,792,773 1,470,632
DEFERRED OUTFLOWS OF RESOURCES
Related to pension 9,139,784 635,387 9,775,171 -
Related to other postemployment benefits 3,098,824 215,427 3,314,251 -
Total deferred outflows of resources 12,238,608 850,814 13,089,422 -
Total assets and deferred outflows of resources 168,744,940 82,137,255 250,882,195 1,470,632
The accompanying notes are an integral part of this statement.
34
City of Muskegon
STATEMENT OF NET POSITION—CONTINUED
June 30, 2023
Governmental Business-type Component
Activities Activities Total Units
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities $ 5,585,799 $ 1,301,765 $ 6,887,564 $ 96,629
Due to other governmental units 942,790 842,760 1,785,550 -
Short-term note 750,000 - 750,000 -
Unearned revenues - unused Farmers Market tokens 145,397 - 145,397 -
Unearned revenues - expenditure-driven grants 8,755,077 - 8,755,077 -
Unearned revenues - prepaid events 13,012 - 13,012 -
Unearned revenues - prepaid fees - 124,529 124,529 -
Bonds and other obligations, due within one year 2,025,000 1,504,800 3,529,800 265,000
Total current liabilities 18,217,075 3,773,854 21,990,929 361,629
Noncurrent liabilities
Advances from primary government - - - 891,561
Bonds and other obligations, less amounts due within one year 30,565,206 13,016,358 43,581,564 568,373
Net pension liability 45,195,991 3,141,967 48,337,958 -
Net other postemployment benefits liability 5,543,781 385,397 5,929,178 -
Total noncurrent liabilities 81,304,978 16,543,722 97,848,700 1,459,934
Total liabilities 99,522,053 20,317,576 119,839,629 1,821,563
DEFERRED INFLOWS OF RESOURCES
Related to leases 7,868,565 857,733 8,726,298 -
Total liabilities and deferred inflows of resources 107,390,618 21,175,309 128,565,927 1,821,563
NET POSITION
Net investment in capital assets 77,169,106 57,495,571 134,664,677 (16,140)
Restricted
Highways, streets and bridges 4,341,409 - 4,341,409 -
Housing repairs 201,500 - 201,500 -
Debt service - 822,000 822,000 -
Trinity Health Arena 42,636 - 42,636 -
Law enforcement 23,276 - 23,276 -
Business improvement districts 139,150 - 139,150 -
Perpetual care
Expendable 589,321 - 589,321 -
Non-expendable 1,725,012 - 1,725,012 -
Other purposes 165,968 - 165,968 -
Unrestricted (23,043,056) 2,644,375 (20,398,681) (334,791)
Total net position $ 61,354,322 $ 60,961,946 $ 122,316,268 $ (350,931)
The accompanying notes are an integral part of this statement.
35
City of Muskegon
STATEMENT OF ACTIVITIES
For the year ended June 30, 2023
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 $ 1,977,993 $ 367,723 $ - $ - $ (1,610,270) $ - $ (1,610,270) $ -
Administrative services 1,094,528 697,070 - 10,885 (386,573) - (386,573) -
Financial services 6,145,566 1,129,918 50,000 - (4,965,648) - (4,965,648) -
Public safety 18,908,078 3,270,826 3,305 - (15,633,947) - (15,633,947) -
Public works 4,561,496 1,361,232 16,300 - (3,183,964) - (3,183,964) -
Highways, streets and bridges 7,480,486 243,319 6,343,826 894,105 764 - 764 -
Community and economic development 13,217,161 609,408 4,906,016 - (7,701,737) - (7,701,737) -
Culture and recreation 7,869,866 3,624,178 1,021,167 1,893,673 (1,330,848) - (1,330,848) -
General administration 977,506 89,072 - - (888,434) - (888,434) -
Interest on long-term debt 866,450 - - 1,002,527 136,077 - 136,077 -
Total governmental activities 63,099,130 11,392,746 12,340,614 3,801,190 (35,564,580) - (35,564,580) -
Business-type activities
Sewer 8,608,922 10,177,369 - 707,000 - 2,275,447 2,275,447 -
Water 10,758,625 10,311,141 427,075 1,582,819 - 1,562,410 1,562,410 -
Marina and launch ramp 490,079 329,518 - - - (160,561) (160,561) -
Total business-type activities 19,857,626 20,818,028 427,075 2,289,819 - 3,677,296 3,677,296 -
36
Total primary government $ 82,956,756 $ 32,210,774 $ 12,767,689 $ 6,091,009 (35,564,580) 3,677,296 (31,887,284) -
Component units
Local Development Finance Authority - SmartZone $ 191,749 $ - $ - $ 200,000 - - - 8,251
Downtown Development Authority 812,350 - 557,944 - - - - (254,406)
Tax Increment Finance Authority 50,000 - - - - - - (50,000)
Brownfield Redevelopment Authorities 692,375 - - - - - - (692,375)
Total component units $ 1,746,474 $ - $ 557,944 $ 200,000 - - - (988,530)
General revenues
Property taxes 10,259,863 - 10,259,863 1,500,595
Income taxes 12,196,364 - 12,196,364 -
Cable franchise agreement 349,044 - 349,044 -
Grants and contributions not restricted to specific programs 13,168,368 - 13,168,368 37,629
Unrestricted investment earnings 765,542 27,463 793,005 2,074
Miscellaneous 688,390 - 688,390 -
Gain on sale of capital asset 2,724,195 - 2,724,195 -
Transfers (1,341,313) 1,341,313 - -
Total general revenues and transfers 38,810,453 1,368,776 40,179,229 1,540,298
Change in net position 3,245,873 5,046,072 8,291,945 551,768
Net position at beginning of year 58,108,449 55,915,874 114,024,323 (902,699)
Net position at end of year $ 61,354,322 $ 60,961,946 $ 122,316,268 $ (350,931)
The accompanying notes are an integral part of this statement.
City of Muskegon
BALANCE SHEET
Governmental Funds
June 30, 2023
Major Street Trinity Health Other Total
General and Trunkline Arena State Grants Governmental Governmental
Fund Fund Fund Fund Funds Funds
ASSETS
Cash and investments $ 5,994,405 $ 4,960,350 $ - $ 8,503,599 $ 6,163,693 $ 25,622,047
Assets managed by others - - - - 1,465,078 1,465,078
Receivables
Accounts and loans (net of allowance for uncollectibles) 260,870 66,301 432,231 - 1,100,272 1,859,674
Property taxes 43,066 - - - - 43,066
Income taxes 1,777,832 - - - - 1,777,832
Leases 3,493,277 - 4,375,289 - - 7,868,566
Due from other governmental units 920,341 819,624 - 560,947 926,820 3,227,732
Due from other funds 3,235,277 - - - - 3,235,277
Advances to component units 588,797 - - - 100,922 689,719
Prepaid items 274,429 26,497 - - 7,763 308,689
Total assets $ 16,588,294 $ 5,872,772 $ 4,807,520 $ 9,064,546 $ 9,764,548 $ 46,097,680
LIABILITIES
Accounts payable $ 2,298,236 $ 239,677 $ 42,870 $ 408,776 $ 1,169,551 $ 4,159,110
Accrued liabilities 259,851 10,273 5,436 - 11,238 286,798
Due to other governmental units 28,169 914,498 - - 123 942,790
Due to other funds - - 328,277 - 494,615 822,892
Short-term note - - - - 750,000 750,000
Unearned revenues - unused Farmers Market tokens - - - - 145,397 145,397
Unearned revenues - expenditure-driven grants 100,853 - - 8,654,223 - 8,755,076
Unearned revenues - prepaid events - - 13,012 - - 13,012
Total liabilities 2,687,109 1,164,448 389,595 9,062,999 2,570,924 15,875,075
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - income taxes 390,000 - - - - 390,000
Related to leases 3,493,277 - 4,375,289 - - 7,868,566
Total deferred inflows of resources 3,883,277 - 4,375,289 - - 8,258,566
FUND BALANCES
Nonspendable
Prepaid items 274,429 26,497 - - 7,763 308,689
Long-term advances 588,797 - - - - 588,797
Perpetual care 10,000 - - - 1,715,012 1,725,012
Restricted
Highways, streets and bridges - 4,681,827 - - 730,944 5,412,771
Housing repairs 201,500 - - - - 201,500
Trinity Health Arena - - 42,636 - - 42,636
Law enforcement - - - - 23,276 23,276
Business improvement districts - - - - 139,150 139,150
Perpetual care - - - - 589,321 589,321
Other purposes - - - - 165,968 165,968
Committed for social equity program 295,113 - - - - 295,113
Assigned for
Capital projects and public improvements 1,800,000 - - 1,547 3,822,190 5,623,737
Subsequent year's budget appropriation of fund balance 990,501 - - - - 990,501
Unassigned 5,857,568 - - - - 5,857,568
Total fund balances 10,017,908 4,708,324 42,636 1,547 7,193,624 21,964,039
Total liabilities, deferred inflows of
resources and fund balances $ 16,588,294 $ 5,872,772 $ 4,807,520 $ 9,064,546 $ 9,764,548 $ 46,097,680
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, 2023
Total fund balance—governmental funds $ 21,964,039
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 $ 182,643,369
Accumulated depreciation (78,666,414) 103,976,955
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 390,000
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 (235,800)
Bonds and notes payable (29,779,982)
Compensated absences (2,575,323)
Net pension liability and related deferred outflows/inflows of resources (34,513,696)
Net other post employment benefits liability and related
outflows/inflows of resources (2,340,360) (69,445,161)
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 5,250,690
Internal balances representing the cumulative difference between
actual costs and amounts charged to business-type activities (782,201) 4,468,489
Net position of governmental activities $ 61,354,322
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, 2023
Major Street Trinity Health Other Total
General and Trunkline Arena State Grants Governmental Governmental
Fund Fund Fund Fund Funds Funds
REVENUES
Taxes $ 21,804,988 $ - $ - $ - $ - $ 21,804,988
Licenses and permits 3,074,012 - - - - 3,074,012
Intergovernmental revenues
Federal 182,483 - - 7,074,143 2,512,647 9,769,273
State 6,621,206 5,951,632 - 3,709,566 1,582,287 17,864,691
Local 50,000 - - - 1,155,110 1,205,110
Charges for services 4,702,642 - 1,849,384 - 650,392 7,202,418
Fines and forfeitures 604,038 - - - - 604,038
Investment earnings and rental income 1,075,391 19,664 112,768 - 26,171 1,233,994
Income from assets managed by others - - - - 108,492 108,492
Other 1,043,113 1,953 40,017 - 958,280 2,043,363
Total revenues 39,157,873 5,973,249 2,002,169 10,783,709 6,993,379 64,910,379
EXPENDITURES
Current
Public representation services 1,905,638 - - - - 1,905,638
Administrative services 1,079,807 - - - - 1,079,807
Financial services 6,089,585 - - - - 6,089,585
Public safety 17,798,350 - - - - 17,798,350
Public works 4,071,985 - - - 167,332 4,239,317
Highways, streets and bridges - 4,785,171 - - 1,587,995 6,373,166
Community and economic development 913,215 - - - - 913,215
Culture and recreation 3,379,385 - 2,569,816 - 660,818 6,610,019
General administration 950,789 - - - - 950,789
Debt service
Principal 1,022,509 - - - 250,000 1,272,509
Interest and fees 377,330 - - - 608,420 985,750
Capital outlay 5,198,799 - 1,000,446 5,234,184 5,021,844 16,455,273
Total expenditures 42,787,392 4,785,171 3,570,262 5,234,184 8,296,409 64,673,418
Excess of revenues over (under) expenditures (3,629,519) 1,188,078 (1,568,093) 5,549,525 (1,303,030) 236,961
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets - - - - 2,976,733 2,976,733
Long-term debt issued 761,603 - - - - 761,603
Transfers in 4,251,451 - 1,548,761 - 316,000 6,116,212
Transfers out (2,227,000) - - (5,549,525) (316,000) (8,092,525)
Total other financing sources (uses) 2,786,054 - 1,548,761 (5,549,525) 2,976,733 1,762,023
Net change in fund balances (843,465) 1,188,078 (19,332) - 1,673,703 1,998,984
Fund balances at beginning of year 10,861,373 3,520,246 61,968 1,547 5,519,921 19,965,055
Fund balances at end of year $ 10,017,908 $ 4,708,324 $ 42,636 $ 1,547 $ 7,193,624 $ 21,964,039
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, 2023
Net change in fund balances—total governmental funds $ 1,998,984
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 $ (5,740,214)
Capital outlay 6,935,934 1,195,720
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 (70,000)
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 (761,603)
Repayment of principal on long-term debt 1,272,509 510,906
Changes in accrual of interest and amortization of premiums and discounts
Change in accrued interest payable 7,000
Amortization of premiums and discounts 112,300 119,300
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 (360,062)
Change in net pension liability and related deferred outflows/inflows of resources (2,158,114)
Change in net other post employment benefits liability
and related deferred outflows/inflows of resources 1,345,186 (1,172,990)
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 614,631
Change in internal balances representing the current year difference
between actual costs and amounts charged to business-type activities 49,322 663,953
Change in net position of governmental activities $ 3,245,873
The accompanying notes are an integral part of this statement.
40
City of Muskegon
STATEMENT OF NET POSITION
Proprietary Funds
June 30, 2023
Governmental
Activities -
Business-type Activities - Enterprise Funds Internal
Marina and Service
Sewer Water Launch Ramp Total Funds
ASSETS
Current assets
Cash and investments $ 3,222,882 $ - $ 177,594 $ 3,400,476 $ 4,403,761
Receivables
Accounts 1,760,159 1,884,633 47,673 3,692,465 354,597
Leases - 87,286 - 87,286 -
Due from other governmental units 799,038 1,174,733 - 1,973,771 -
Inventories 107,067 247,867 - 354,934 17,624
Prepaid items 65,711 83,915 3,959 153,585 86,833
Total current assets 5,954,857 3,478,434 229,226 9,662,517 4,862,815
Noncurrent assets
Restricted cash and investments 101,000 740,000 - 841,000 -
Leases receivable, less amounts due within one year - 770,447 - 770,447 -
Advances to component units - - - - 201,842
Capital assets
Land 16,188 103,500 22,562 142,250 65,000
Land improvements - 120,713 1,923,404 2,044,117 301,715
Buildings, improvements and systems 39,788,436 81,985,521 2,535,088 124,309,045 1,668,215
Machinery and equipment 237,141 3,116,030 60,620 3,413,791 10,712,508
Construction in progress 1,922,069 6,504,762 - 8,426,831 -
Less accumulated depreciation (13,383,985) (49,636,321) (3,673,067) (66,693,373) (9,775,305)
Net capital assets 28,579,849 42,194,205 868,607 71,642,661 2,972,133
Total noncurrent assets 28,680,849 43,704,652 868,607 73,254,108 3,173,975
Total assets 34,635,706 47,183,086 1,097,833 82,916,625 8,036,790
DEFERRED OUTFLOWS OF RESOURCES
Related to pension 146,628 488,759 - 635,387 391,007
Related to other postemployment benefits 49,714 165,713 - 215,427 132,570
Total deferred outflows of resources 196,342 654,472 - 850,814 523,577
Total assets and deferred outflows of resources 34,832,048 47,837,558 1,097,833 83,767,439 8,560,367
The accompanying notes are an integral part of this statement.
41
City of Muskegon
STATEMENT OF NET POSITION—CONTINUED
Proprietary Funds
June 30, 2023
Governmental
Activities -
Business-type Activities - Enterprise Funds Internal
Marina and Service
Sewer Water Launch Ramp Total Funds
LIABILITIES
Current liabilities
Accounts payable $ 515,723 $ 673,857 $ 7,811 $ 1,197,391 $ 878,944
Accrued liabilities 28,145 75,865 364 104,374 25,147
Due to other governmental units 842,760 - - 842,760 -
Due to other funds - 2,412,385 - 2,412,385 -
Unearned revenues - prepaid fees - - 124,529 124,529 -
Bonds and other obligations, due within one year 421,300 1,083,500 - 1,504,800 46,900
Total current liabilities 1,807,928 4,245,607 132,704 6,186,239 950,991
Noncurrent liabilities
Bonds and other obligations, less amounts due within one year 6,711,323 6,305,035 - 13,016,358 188,001
Net pension liability 725,069 2,416,898 - 3,141,967 1,933,518
Net other postemployment benefits liability 88,938 296,459 - 385,397 237,167
Total noncurrent liabilities 7,525,330 9,018,392 - 16,543,722 2,358,686
Total liabilities 9,333,258 13,263,999 132,704 22,729,961 3,309,677
DEFERRED INFLOWS OF RESOURCES
Related to leases - 857,733 - 857,733 -
Total liabilities and deferred inflows of resources 9,333,258 14,121,732 132,704 23,587,694 3,309,677
NET POSITION
Net investment in capital assets 21,553,580 35,073,384 868,607 57,495,571 2,972,133
Restricted for debt service 101,000 721,000 - 822,000 -
Unrestricted 3,844,210 (2,078,558) 96,522 1,862,174 2,278,557
Total net position $ 25,498,790 $ 33,715,826 $ 965,129 60,179,745 $ 5,250,690
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 782,201
Net position of business-type activities $ 60,961,946
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, 2023
Governmental
Activities -
Business-type Activities - Enterprise Funds Internal
Marina and Service
Sewer Water Launch Ramp Total Funds
OPERATING REVENUES
Charges for services $ 9,980,216 $ 9,860,128 $ 326,959 $ 20,167,303 $ 9,442,916
Other 197,153 878,088 2,559 1,077,800 2,120,346
Total operating revenues 10,177,369 10,738,216 329,518 21,245,103 11,563,262
OPERATING EXPENSES
Administration 719,708 1,513,323 11,734 2,244,765 1,063,561
Insurance premiums and claims - - - - 5,134,457
Wastewater treatment 4,926,860 - - 4,926,860 -
Wastewater maintenance 2,092,102 - - 2,092,102 -
Filtration plant operations - 3,208,690 - 3,208,690 -
Water distribution - 3,859,623 - 3,859,623 -
Other operations - - 365,909 365,909 4,898,895
Depreciation 702,897 1,940,124 112,869 2,755,890 566,059
Total operating expenses 8,441,567 10,521,760 490,512 19,453,839 11,662,972
Operating income (loss) 1,735,802 216,456 (160,994) 1,791,264 (99,710)
NONOPERATING REVENUES (EXPENSES)
Investment earnings 12,991 14,451 21 27,463 25,374
Gain on sale of capital assets - - - - 53,967
Interest expense (123,855) (165,121) - (288,976) -
Bond issuance costs (29,445) (36,044) - (65,489) -
Total nonoperating revenue (expenses) (140,309) (186,714) 21 (327,002) 79,341
Income (loss) before capital contributions and transfers 1,595,493 29,742 (160,973) 1,464,262 (20,369)
CAPITAL CONTRIBUTIONS AND TRANSFERS
Capital grants and contributions 707,000 1,582,819 - 2,289,819 -
Transfers in - 801,313 540,000 1,341,313 635,000
Total capital contributions and transfers 707,000 2,384,132 540,000 3,631,132 635,000
Change in net position 2,302,493 2,413,874 379,027 5,095,394 614,631
Net position at beginning of year 23,196,297 31,301,952 586,102 4,636,059
Net position at end of year $ 25,498,790 $ 33,715,826 $ 965,129 $ 5,250,690
Adjustment for the net effect of the current year activity between
the internal service funds and the enterprise funds (49,322)
Change in net position of business-type activities $ 5,046,072
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, 2023
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 $ 9,977,824 $ 10,186,377 $ 307,552 $ 20,471,753 $ 183,150
Receipts from interfund services provided 75,942 157,587 - 233,529 9,442,916
Other receipts - - - - 1,915,791
Payments to suppliers (5,596,945) (3,864,874) (330,246) (9,792,065) (7,279,334)
Payments to employees (1,043,302) (2,981,949) (41,658) (4,066,909) (2,397,034)
Payments for interfund services used (927,747) (1,726,339) (22,622) (2,676,708) (1,117,064)
Net cash provided by (used for) operating activities 2,485,772 1,770,802 (86,974) 4,169,600 748,425
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Transfers in - 801,313 540,000 1,341,313 635,000
Interfund borrowing - 1,397,695 (275,453) 1,122,242 -
Advances to component units - - - - 96,144
Net cash provided by (used for) noncapital financing activities - 2,199,008 264,547 2,463,555 731,144
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Proceeds from long-term debt 271,718 46,720 - 318,438 -
Issuance costs on long-term debt (29,445) (36,044) - (65,489) -
Capital contributions 707,000 490,595 - 1,197,595 -
Purchases of capital assets (1,709,268) (3,296,111) - (5,005,379) (714,728)
Principal paid on capital debt (275,000) (1,020,000) - (1,295,000) -
Interest paid on capital debt (124,455) (157,421) - (281,876) -
Proceeds from sale of capital assets - - - - 53,967
Net cash provided by (used for) capital and related financing activities (1,159,450) (3,972,261) - (5,131,711) (660,761)
CASH FLOW FROM INVESTING ACTIVITIES
Investment earnings 12,991 14,451 21 27,463 25,374
Net increase (decrease) in cash and investments 1,339,313 12,000 177,594 1,528,907 844,182
Cash and investments at beginning of year 1,984,569 728,000 - 2,712,569 3,559,579
Cash and investments at end of year $ 3,323,882 $ 740,000 $ 177,594 $ 4,241,476 $ 4,403,761
Reconciliation of cash and investments to the Statement of Net Position
Cash and investments $ 3,222,882 $ - $ 177,594 $ 3,400,476 $ 4,403,761
Restricted cash and investments 101,000 740,000 - 841,000 -
$ 3,323,882 $ 740,000 $ 177,594 $ 4,241,476 $ 4,403,761
Reconciliation of operating income (loss) to net cash provided by (used for)
operating activities
Operating income (loss) $ 1,735,802 $ 216,456 $ (160,994) $ 1,791,264 $ (99,710)
Adjustments to reconcile operating income (loss) to net cash provided by
(used for) operating activities
Depreciation expense 702,897 1,940,124 112,869 2,755,890 566,059
Change in assets and liabilities
Receivables (123,603) (394,253) (32,552) (550,408) (21,405)
Inventories (62,910) 35,500 - (27,410) 21,243
Prepaid items (3,058) (238) (439) (3,735) 142,263
Accounts payable 240,639 (53,607) (15,770) 171,262 99,562
Unearned revenues - - 10,586 10,586 -
Accrued liabilities (3,995) 26,820 (674) 22,151 40,413
Net cash provided by (used for) operating activities $ 2,485,772 $ 1,770,802 $ (86,974) $ 4,169,600 $ 748,425
The accompanying notes are an integral part of this statement.
44
City of Muskegon
STATEMENT OF NET POSITION
Fiduciary Funds
June 30, 2023
Other Post-
Employment
Benefits Custodial
Trust Fund Funds
ASSETS
Cash and investments $ - $ 1,415,754
MERS Total Market Portfolio 24,113,248 -
Accounts receivable 10,338 26,232
Total assets 24,123,586 1,441,986
LIABILITIES
Accounts payable - 22,836
Due to other governmental units - 1,089,362
Deposits held for others - 329,788
Total liabilities - 1,441,986
NET POSITION
Restricted for individuals, organizations, and other governments $ 24,123,586 $ -
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, 2023
Other Post-
Employment
Benefits Custodial
Trust Fund Funds
ADDITIONS
Tax collections for other governments $ - $ 25,890,949
Other collections for third parties - 1,734,024
Employer contributions 1,984,403 -
Net investment income (loss) 1,685,972 -
Total additions 3,670,375 27,624,973
DEDUCTIONS
Payment of taxes to other governments - 25,890,949
Other payments to third parties - 1,734,024
Benefit payments 1,646,094 -
Administrative expenses 46,721 -
Total deductions 1,692,815 27,624,973
Change in net position 1,977,560 -
Net position at beginning of year 22,146,026 -
Net position at end of year $ 24,123,586 $ -
The accompanying notes are an integral part of this statement.
46
City of Muskegon
STATEMENT OF NET POSITION
Discretely Presented Component Units
June 30, 2023
Local
Development Tax Lakeside
Finance Downtown Increment Corridor Brownfield
Authority - Development Finance Improvement Redevelopment
SmartZone Authority Authority Authority Authorities Total
ASSETS
Current assets
Cash and investments $ 53,019 $ 471,256 $ 23,921 $ 7,484 $ 83,783 $ 639,463
Accounts receivable - 13,936 - - - 13,936
Total current assets 53,019 485,192 23,921 7,484 83,783 653,399
Noncurrent assets
Capital assets, net
Nondepreciable 400,000 - - - - 400,000
Depreciable 417,233 - - - - 417,233
Total noncurrent assets 817,233 - - - - 817,233
Total assets 870,252 485,192 23,921 7,484 83,783 1,470,632
LIABILITIES
Current liabilities
Accounts payable - 82,469 - - 8,732 91,201
Accrued liabilities 4,100 1,328 - - - 5,428
Bonds and other obligations, due
within one year 265,000 - - - - 265,000
Total current liabilities 269,100 83,797 - - 8,732 361,629
Noncurrent liabilities
Advances from primary government - - - - 891,561 891,561
Bonds and other obligations, less
amounts due within one year 568,373 - - - - 568,373
Total noncurrent liabilities 568,373 - - - 891,561 1,459,934
Total liabilities 837,473 83,797 - - 900,293 1,821,563
NET POSITION
Net investment in capital assets (16,140) - - - - (16,140)
Unrestricted 48,919 401,395 23,921 7,484 (816,510) (334,791)
Total net position $ 32,779 $ 401,395 $ 23,921 $ 7,484 $ (816,510) $ (350,931)
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, 2023
Net (Expense) Revenue and Changes in Net Position
Local
Program Revenue Development Tax Lakeside
Operating Capital Finance Downtown Increment Corridor Brownfield
Grants and Grants and Authority - Development Finance Improvement Redevelopment
Functions/Programs Expenses Contributions Contributions SmartZone Authority Authority Authority Authorities Total
Local Development Finance Authority - SmartZone
Community and economic development $ 172,648 $ - $ - $ (172,648) $ - $ - $ - $ - $ (172,648)
Interest on long-term debt 19,101 - 200,000 180,899 - - - - 180,899
Total Local Development Finance
Authority - SmartZone 191,749 - 200,000 8,251 - - - - 8,251
Downtown Development Authority
Community and economic development 812,350 557,944 - - (254,406) - - - (254,406)
Tax Increment Finance Authority
Community and economic development 50,000 - - - - (50,000) - - (50,000)
Brownfield Redevelopment Authorities
Community and economic development 679,010 - - - - - - (679,010) (679,010)
48
Interest on long-term debt 13,365 - - - - - - (13,365) (13,365)
Total Brownfield Redevelopment Authorities 692,375 - - - - - - (692,375) (692,375)
Total discretely presented component units $ 1,746,474 $ 557,944 $ 200,000 8,251 (254,406) (50,000) - (692,375) (988,530)
General revenues
Property taxes 86,205 401,043 44,105 7,473 961,769 1,500,595
Grants and contributions not restricted to specific programs 3,339 - 9,728 - 24,562 37,629
Unrestricted investment income 125 1,139 74 11 725 2,074
Total general revenues 89,669 402,182 53,907 7,484 987,056 1,540,298
Change in net position 97,920 147,776 3,907 7,484 294,681 551,768
Net position at beginning of year (65,141) 253,619 20,014 - (1,111,191) (902,699)
Net position at end of year $ 32,779 $ 401,395 $ 23,921 $ 7,484 $ (816,510) $ (350,931)
The accompanying notes are an integral part of this statement.
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
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. The discretely presented component units are reported in a separate column in
the government-wide financial statements (see note below for description) to emphasize that they are 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.
Lakeside Corridor Improvement Authority (CIA). The CIA’s purpose is the collection of property tax
incremental revenues and to promote economic growth in the Lakeside Business District corridor. Members
of the CIA are appointed by the City Commission and the Authority is fiscally dependent on the City since
the City Commission approves the CIA budget and must approve any debt issuance. The CIA is presented as
a governmental fund type.
Brownfield Redevelopment Authority (BRA). There are seven 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, the scattered housing site, and Sweetwater. 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, 2023
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 Trinity Health Muskegon 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, 2023, 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, 2022, the date
of its latest audited financial statements is as follows:
Total assets and deferred outflows of resources $ 3,801,143
Total liabilities and deferred inflows of resources (750,273)
Total net position $ 3,050,870
Total operating income $ 2,857,458
Total operating expenses (2,925,533)
Total nonoperating revenues 917
Capital contributions 95,009
Prior period adjustment (12,323)
Change in net position $ 15,528
50
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
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, 2023
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 Fund is 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, 2023
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, 2023
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, 2023
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
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. The City also reports unavailable revenues from one source: leases.
These amounts are long-term leases entered not by the City in which the City is the lessor. These amounts are
recognized as revenue over the term of the lease obligations.
55
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
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, 2023
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 2022 state taxable value for real/personal property of the City totaled approximately $677,686,000 of
which approximately $38,930,000 was captured by the component units. The ad valorem taxes levied
consisted of 9.788, 2.9364 and .0727 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 2022 financial statements have been reclassified to conform
to the 2023 presentation.
57
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
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, 2023, actual expenditures exceeded appropriations for:
Final
Budget Actual
General Fund
Public works
General sanitation $ 2,246,089 $ 2,558,983
Culture and recreation
Parks maintenance 2,369,983 2,640,748
Trinity Health Arena Fund 3,468,991 3,570,262
These overexpenditures were funded with available fund balance.
Fund Deficits
As of June 30, 2023, the City’s Water Fund had an unrestricted fund net position deficit of $2,078,558. This
deficit will be eliminated through future operations or an interfund transfer.
58
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
NOTE C—DEPOSITS AND INVESTMENTS
As of June 30, 2023, the City had the following investments:
Weighted
Average
Maturity
Fair Value (Months) S&P Percent
Investment Type
Money market funds $ 261,621 1 not rated 0.5 %
Negotiable certificates of deposit 1,670,970 16 not rated 3.1
U.S. agency obligations 7,883,226 275 AA+ 14.8
Local units of government obligations 688,899 21 A to AA 1.3
Commercial paper 643,929 2 A- 1.2
External investment pool 18,020,309 3 AAA 33.8
MERS investment funds 24,113,248 N/A not rated 45.3
Total fair value $ 53,282,202 100.0 %
Portfolio weighted average maturity N/A
The City voluntarily invests certain excess funds in an external investment pool (Pool). The Pool is an
external investment pool of "qualified" investments for Michigan municipalities. The Pool is not regulated nor
registered with the SEC. The fair value of the City's investments is the same as the value of the Pool’s shares.
Deposit and Investment Risks
Interest rate risk
The City has a formal investment policy that limits investment maturities as a means of managing its
exposure to fair value losses arising from increasing interest rates. At least 10 percent of the City’s total
portfolio must be in instruments maturing in 30 days.
Credit risk
State law limits investments in commercial paper and corporate bonds to the two highest classifications issued
by nationally recognized statistical rating organizations. The City has no investment policy that would further
limit its investment choices.
Concentration of credit risk
Concentration of credit risk is the risk of loss attributed to the magnitude of the City investment in a single
issuer, by diversifying the investment portfolio so that the impact of potential losses from any one type of
security or issuer will be minimized. The City has a concentration of credit risk policy that limits investment
in commercial paper, eligible bankers’ acceptances and time certificates of deposit to 25 percent each of the
total portfolio. The City has more than 5 percent of its investments in the following securities:
Percent of
Security Total Investments
Federal Home Loan Mortgage Corporation obligations 5.5%
Government National Mortgage Association obligations 7.1%
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, 2023, $6,872,136 of the City’s bank balance of $7,372,136 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, 2023
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, 2023, restricted
cash and investments in the Sewer and Water Fund of $101,000 and $740,000, 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 Staleys’ 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, 2023
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,
2023 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 $ 2,265 $ - $ - $ - $ - $ 29,750 $ 32,015
Dividends and interest 1,818 46,273 2,393 11,171 625 578 62,858
Realized and unrealized gain
(loss) on investments 5,436 65,819 7,175 33,537 1,879 - 113,846
9,519 112,092 9,568 44,708 2,504 30,328 208,719
Expenses
Grants and scholarships - - - - - 27,000 27,000
Administration fees 671 8,183 1,890 5,476 246 595 17,061
Revenues over expenses 8,848 103,909 7,678 39,232 2,258 2,733 164,658
Total assets at beginning of year 68,585 1,327,574 93,504 434,785 24,313 553 1,949,314
Total assets at end of year 77,433 1,431,483 101,182 474,017 26,571 3,286 2,113,972
Less assets recorded as those
of the Foundation (53,581) - (101,182) (474,017) (16,828) (3,286) (648,894)
Assets reported on the Balance
Sheet/Statement of Net Position $ 23,852 $ 1,431,483 $ - $ - $ 9,743 $ - $ 1,465,078
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, 2023
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, 2023.
Money market funds: Valued at amortized cost, which approximates fair value.
Negotiable certificates of deposit, U.S. agency obligations, local units of government 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, 2023
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, 2023:
Assets at Fair Value as of June 30, 2023
Level 1 Level 2 Level 3 Total
Money market funds $ - $ 261,621 $ - $ 261,621
Negotiable certificates of deposit 1,670,970 - - 1,670,970
U.S. agency obligations 7,883,226 - - 7,883,226
Local units of government obligations 688,899 - - 688,899
Commercial paper 643,929 - - 643,929
External investment pools - 18,020,309 - 18,020,309
MERS investment funds - 24,113,248 - 24,113,248
Assets managed by others - 1,465,078 - 1,465,078
Total assets at fair value $ 10,887,024 $ 43,860,256 $ - $ 54,747,280
63
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
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 payments annually of approximately $97,500,
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 payments annually of approximately
$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 payments annually of approximately $50,000, 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
approximately $450,000, 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, 2023, the City recognized $397,109 and $83,003 in lease revenue for
governmental activities and business-type activities, respectively. For the year ended June 30, 2023, the City
also recognized $241,097 and $14,451 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, 2023, the balances of these deferred inflows
of resources were $7,868,565 and $857,732 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
2024 $ 395,885 $ 244,214 $ 87,286 $ 13,091
2025 408,699 229,974 72,822 11,725
2026 424,591 215,194 57,495 10,746
2027 447,353 199,742 60,484 9,804
2028 465,197 183,504 43,526 8,880
2029-2033 1,783,089 681,052 142,921 37,526
2034-2038 895,440 509,708 184,687 24,500
2039-2043 1,104,394 365,599 208,512 7,907
2044-2048 992,887 217,859 - -
2049-2053 692,971 107,757 - -
2054-2058 258,059 27,774 - -
$ 7,868,565 $ 2,982,377 $ 857,733 $ 124,179
64
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
NOTE G—CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2023 was as follows:
Balance Balance
July 1, 2022 Additions Deductions June 30, 2023
Governmental activities:
Capital assets, not being depreciated:
Land $ 14,304,382 $ - $ - $ 14,304,382
Construction in progress 7,965,494 6,528,478 8,590,802 5,903,170
Total capital assets, not being depreciated 22,269,876 6,528,478 8,590,802 20,207,552
Capital assets, being depreciated:
Land improvements 5,979,236 290,469 - 6,269,705
Buildings and improvements 56,504,639 5,438,348 - 61,942,987
Furniture, vehicles and equipment 19,326,847 2,052,770 907,692 20,471,925
Infrastructure 81,002,298 1,931,399 3,340,352 79,593,345
Shared improvements 6,905,293 - - 6,905,293
Total capital assets, being depreciated 169,718,313 9,712,986 4,248,044 175,183,255
Less accumulated depreciation:
Land improvements 2,572,993 179,637 - 2,752,630
Buildings and improvements 19,810,880 1,242,456 - 21,053,336
Furniture, vehicles and equipment 13,826,340 1,058,785 907,692 13,977,433
Infrastructure 44,335,432 3,602,582 3,340,352 44,597,662
Shared improvements 5,837,845 222,813 - 6,060,658
Total accumulated depreciation 86,383,490 6,306,273 4,248,044 88,441,719
Total capital assets, being
depreciated, net 83,334,823 3,406,713 - 86,741,536
Capital assets, net $ 105,604,699 $ 9,935,191 $ 8,590,802 $ 106,949,088
Business-type activities:
Capital assets, not being depreciated:
Land $ 142,250 $ - $ - $ 142,250
Construction in progress 14,824,158 5,809,766 12,207,093 8,426,831
Total capital assets, not being depreciated 14,966,408 5,809,766 12,207,093 8,569,081
Capital assets, being depreciated:
Land improvements 1,986,352 57,765 - 2,044,117
Buildings, improvements and systems 112,752,331 11,556,714 - 124,309,045
Machinery and equipment 3,320,032 93,759 - 3,413,791
Total capital assets, being depreciated 118,058,715 11,708,238 - 129,766,953
Less accumulated depreciation:
Land improvements 1,861,021 11,286 - 1,872,307
Buildings, improvements and systems 59,105,626 2,673,996 - 61,779,622
Machinery and equipment 2,970,836 70,608 - 3,041,444
Total accumulated depreciation 63,937,483 2,755,890 - 66,693,373
Total capital assets, being
depreciated, net 54,121,232 8,952,348 - 63,073,580
Capital assets, net $ 69,087,640 $ 14,762,114 $ 12,207,093 $ 71,642,661
65
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
NOTE G—CAPITAL ASSETS—Continued
Depreciation
Depreciation expense was charged to functions as follows:
Governmental activities:
Public representation services $ 7,438
Financial services 14,133
Public safety 389,212
Public works 18,017
Highways, streets and bridges 3,955,004
Community and economic development 117,720
Culture and recreation 1,211,973
General administration 26,717
Internal Service Fund depreciation 566,059
$ 6,306,273
Business-type activities:
Sewer $ 702,897
Water 1,940,124
Marina and Launch Ramp 112,869
$ 2,755,890
Balance Balance
July 1, 2022 Additions Deductions June 30, 2023
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 3,208,377 172,648 - 3,381,025
Total capital assets, being
depreciated, net 589,881 (172,648) - 417,233
Capital assets, net $ 989,881 $ (172,648) $ - $ 817,233
Depreciation expense was charged to economic development.
66
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
NOTE H—INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
The composition of interfund balances as of June 30, 2023 is as follows:
Due To/From Other Funds:
Receivable Fund Payable Fund Amount
General Fund Trinity Health Arena Fund $ 328,277
General Fund Lead Abatement Fund 417,667
General Fund Healthy Homes Fund 76,948
General Fund Water Fund 2,412,385
$ 3,235,277
The outstanding balances between funds result from the payable funds having negative positions in the City’s
cash and investment pool.
The Brownfield Redevelopment Authorities have also been advanced $891,561 from the City’s governmental
activities as a long-term loan.
Interfund Transfers:
Transfers In Amount Transfers Out Amount
Internal Service Funds
Public Service Building Fund $ 510,000 General Fund $ 635,000
Engineering Fund 125,000
635,000 635,000
General Fund 4,251,451 State Grants Fund 4,251,451
Trinity Health Arena Fund 1,052,000 General Fund 1,052,000
Trinity Health Arena Fund 496,761 State Grants Fund 496,761
Water Fund 801,313 State Grants Fund 801,313
Marina and Launch Ramp Fund 540,000 General Fund 540,000
HOME Rehabilitation Fund 316,000 Public Improvement Fund 316,000
$ 8,092,525 $ 8,092,525
67
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
NOTE H—INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS—Continued
The General Fund transferred funds to the Trinity Health Arena Fund, Public Service Building Fund,
Engineering Fund, and Marina and Launch Ramp Fund for operation subsidies. The State Grants Fund
transferred funds to the General Fund, Trinity Health Arena Fund, and Water Fund for various American
Rescue Plan Act projects. 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, 2023.
Balance Balance
July 1, 2022 Additions Deductions June 30, 2023
Governmental activities:
Short-term note $ 84,297 $ 750,000 $ 84,297 $ 750,000
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 note payable. Interest amounts are at a
variable interest rate of 2.5 percent above the prime rate. Borrowed amounts will be repaid as infill housing
units are sold.
68
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
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, 2023.
Balance Balance Due Within
July 1, 2022 Additions Deductions June 30, 2023 One Year
Governmental activities:
Public placement debt
General obligation debt $ 28,525,000 $ - $ 970,000 $ 27,555,000 $ 1,050,000
Discount (128,150) - (7,300) (120,850) -
Premium 832,927 - 119,600 713,327 -
Direct borrowings and
direct placements
Installment purchase
agreements 1,173,411 761,603 302,509 1,632,505 413,000
Compensated absences 2,411,112 1,982,115 1,583,003 2,810,224 562,000
Governmental activities
long-term liabilities $ 32,814,300 $ 2,743,718 $ 2,967,812 $ 32,590,206 $ 2,025,000
Business-type activities:
Public placement debt
Revenue obligations $ 14,374,715 $ 1,067,375 $ 1,295,000 $ 14,147,090 $ 1,430,000
Compensated absences 318,882 349,680 294,494 374,068 74,800
Business-type activities
long-term liabilities $ 14,693,597 $ 1,417,055 $ 1,589,494 $ 14,521,158 $ 1,504,800
Component units:
Public placement debt
General obligation debt $ 1,080,000 $ - $ 255,000 $ 825,000 $ 265,000
Premium 16,547 - 8,174 8,373 -
Component unit long-
term liabilities $ 1,096,547 $ - $ 263,174 $ 833,373 $ 265,000
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.
69
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
NOTE J—LONG-TERM DEBT—Continued
Public Placement Debt—Continued
General obligation debt outstanding as of June 30, 2023 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 $ 3,210,000
2019 Capital Improvement Bonds 19,420,000 1.93% - 3.58% December 2049 18,790,000
2020A Capital Improvement Bonds 4,325,000 2.5% - 5% October 2040 3,670,000
2020B Capital Improvement Bonds 2,055,000 .68% - 3.2% October 2041 1,885,000
$ 27,555,000
Component units:
2012 LDFA Tax Increment Refunding Bonds $ 4,100,000 3% - 4% November 2025 $ 825,000
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, 2023 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 $ 2,475,000
2019 Water Supply System Junior Lien Bond 2,000,000 2% October 2025 1,465,000
2019 Sanitary Sewer System Junior Lien Bond 11,500,000 2% October 2033 2,635,000
2020 Water Supply System Junior Lien Bond 4,630,623 2% April 2041 3,145,390
2020 Sanitary Sewer System Junior Lien Bond 3,829,101 2% April 2041 3,397,498
2022B Water Supply System Junior Lien Bond 35,431 1.88% October 2045 35,431
2022 Sanitary Sewer System Junior Lien Bond 993,771 1.88% October 2043 993,771
$ 14,147,090
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 39
percent of net revenues through 2025. The total principal and interest remaining to be paid on the bond is
$2,554,529. Principal and interest paid for the year ended June 30, 2023 and total customer net revenues were
$850,988 and $2,171,031, respectively.
During the year ended June 30, 2023, revenue obligations were forgiven and recognized as capital grants and
contributions in the Sewer and Water Funds for $707,000 and $1,000,520.
The City was in compliance in all material respects with all the revenue bond ordinances at June 30, 2023.
70
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
NOTE J—LONG-TERM DEBT—Continued
Direct Borrowings and Direct Placements
Installment Purchase Agreements
The City has entered into an installment agreement for a ladder truck in 2021 and for a pumper truck in 2023.
The installment purchase agreements are secured by the equipment purchases if the City defaults under the
agreements. Installment purchase agreements outstanding as of June 30, 2023 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 $ 905,142
2023 Equipment Installment Loan 761,603 4.40% March 2028 727,363
$ 1,632,505
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, 2023 was approximately $1,460,000. 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, 2023 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
2024 $ 1,050,000 $ 926,991 $ 413,803 $ 42,904 $ 1,430,000 $ 274,153
2025 1,100,000 892,982 424,961 31,747 1,452,000 244,605
2026 1,140,000 856,998 436,490 20,218 1,482,000 214,474
2027 1,180,000 817,356 232,082 9,571 662,000 193,523
2028 1,220,000 773,695 125,169 2,306 677,000 180,402
2029-2033 5,850,000 3,185,054 - - 3,261,202 699,418
2034-2038 3,760,000 2,453,176 - - 3,135,000 387,540
2039-2043 4,500,000 1,763,355 - - 2,047,888 77,614
2044-2048 5,245,000 936,445 - - - -
2049-2050 2,510,000 90,932 - - - -
$ 27,555,000 $ 12,696,984 $ 1,632,505 $ 106,746 $ 14,147,090 $ 2,271,729
71
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
NOTE J—LONG-TERM DEBT—Continued
Component Units
Year Ending Public Placement Debt
June 30, Principal Interest
2024 $ 265,000 $ 20,775
2025 275,000 12,675
2026 285,000 4,275
2027 - -
2028 - -
2029-2033 - -
2034-2038 - -
2039-2043 - -
2044-2048 - -
2049-2050 - -
$ 825,000 $ 37,725
Annual debt service requirements to maturity by type of debt as of June 30, 2023 follow:
Installment
Revenue Purchase
General Obligation Debt Obligations Agreements
Year Ending Governmental Component Business-type Governmental
June 30, Activities Units Activities Activities
2024 $ 1,976,991 $ 285,775 $ 1,704,153 $ 456,707
2025 1,992,982 287,675 1,696,605 456,708
2026 1,996,998 289,275 1,696,474 456,708
2027 1,997,356 - 855,523 241,653
2028 1,993,695 - 857,402 127,475
2029-2033 9,035,054 - 3,960,620 -
2034-2038 6,213,176 - 3,522,540 -
2039-2043 6,263,355 - 2,125,502 -
2044-2048 6,181,445 - - -
2049-2050 2,600,932 - - -
$ 40,251,984 $ 862,725 $ 16,418,819 $ 1,739,251
72
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
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 2023 and 2022 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, 2023 $ 486,753 $ 738,953 $ 574,164 $ 651,542
June 30, 2022 103,646 556,421 173,314 486,753
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, 2023, the claims liability including incurred but
not reported claims was $35,406. 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 2023 and 2022
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, 2023 $ 33,172 $ 4,838,292 $ 4,836,058 $ 35,406
June 30, 2022 63,118 4,738,715 4,768,661 33,172
73
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
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, 2023 with a remaining amount of approximately $24,2725,000.
Approximately $1,834,000 and $4,217,000 of the commitments in the Sewer and Water funds, respectively,
are being financed by long-term debt with the remainder being paid out with grants or available funds as
follows:
Fund Amount
General $ 928,000
Major Street and Trunkline 2,965,000
Local Street 30,000
Mercy Health Arena 383,000
Public Improvement 118,000
State Grant 1,470,000
Sewer 5,485,000
Water 12,893,000
$ 24,272,000
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, 2023, the City has committed $295,113 of fund balance in
the General Fund to this program.
74
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
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, 2023, the City abated property taxes revenues totaling $110,995 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, 2023, the City abated property taxes revenues totaling $217,547 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, 2023, the City abated property taxes revenues totaling $179,579 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, 2023
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, 2022 valuation date, the following employees were covered by the benefit terms:
Inactive employees or beneficiaries currently receiving benefits 336
Inactive employees entitled to but not yet receiving benefits 30
Active employees 53
Total employees covered by MERS 419
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, 2023, the City had a flat-dollar employer contribution to the Plan of $4,052,695
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, 2022, 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, 2023
NOTE M—EMPLOYEE RETIREMENT SYSTEM AND PENSION PLAN—Continued
Defined Benefit Pension Plan—Continued
Actuarial Assumptions
The total pension liability in the December 31, 2022 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 2022. 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 these 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, 2023
NOTE M—EMPLOYEE RETIREMENT SYSTEM AND PENSION PLAN—Continued
Defined Benefit Pension Plan—Continued
Changes in the Net Pension Liability
Increase (Decrease)
Net Pension
Total Pension Plan Fiduciary Liability
Liability (a) Position (b) (a)-(b)
Balance at January 1, 2022 $ 131,052,803 $ 99,989,454 $ 31,063,349
Changes for the year
Service cost 510,157 - 510,157
Interest 9,162,662 - 9,162,662
Difference between expected and
actual experience 1,074,817 - 1,074,817
Changes in assumptions 1,800,812 - 1,800,812
Contributions - employer - 3,896,659 (3,896,659)
Contributions - employee - 291,821 (291,821)
Net investment income (loss) - (10,311,712) 10,311,712
Administrative expenses - (180,011) 180,011
Benefit payments including refund of
employee contributions (9,852,666) (9,852,666) -
Other changes (1,577,082) - (1,577,082)
Net changes 1,118,700 (16,155,909) 17,274,609
Balance at December 31, 2022 $ 132,171,503 $ 83,833,545 $ 48,337,958
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 $ 62,506,678 $ 48,337,958 $ 36,410,389
78
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
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, 2023, the City recognized pension expense of $6,463,995. At June 30, 2023, 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 $ 7,757,095 $ -
Contributions subsequent to the
measurement date* 2,018,076 -
Total $ 9,775,171 $ -
*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,
2024.
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
2024 $ 539,289
2025 1,466,497
2026 2,281,490
2027 3,469,819
Payables to the Pension Plan
At June 30, 2023, the City reported a payable of $358,801 for the outstanding amount of contributions to the
pension plan required for the year ended June 30, 2023.
79
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
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 6 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, 2023, City and employee
contributions were $1,506,211 and $655,830, 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, 2023, forfeitures reduced the City’s pension expense by $53,509.
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, 2023
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, 2022 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, 2023, the City made payments for postemployment healthcare benefits of $1,865,895.
Net OPEB Liability
The City’s net OPEB liability was measured as of December 31, 2022, and the total OPEB liability used to
calculate the net OPEB liability was determined by an actuarial valuation as December 31, 2021 which was
rolled forward to December 31, 2022.
81
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
NOTE N—OTHER POSTEMPLOYMENT BENEFITS—Continued
Retiree Healthcare Plan—Continued
Actuarial Assumptions
The total OPEB liability in the December 31, 2022 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 7.00 percent (including inflation), net of administrative and investment expenses
Healthcare cost trend rates Pre-Medicare: 7.25 percent for two years, then graded down by .25 per year to
an ultimate rate of 4.5 percent
Post-Medicare: 5.5 percent for two years, then 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% 7.00% 4.20% 2.50% 2.70%
Global fixed income 20.0% 4.50% 0.90% 2.50% 0.40%
Private investments 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 OPEB liability was 7.00 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 2022 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, 2021 the discount rate used to value OPEB liabilities was 7.35 percent.
82
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
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, 2022 $ 27,997,640 $ 25,501,913 $ 2,495,727
Changes for the year
Service cost 47,962 - 47,962
Interest 1,995,623 - 1,995,623
Difference between expected and
actual experience (433,044) - (433,044)
Changes of assumptions 1,161,708 - 1,161,708
Contributions - employer - 1,997,928 (1,997,928)
Net investment income (loss) - (2,613,129) 2,613,129
Administrative expenses - (46,001) 46,001
Benefit payments including refund of
employee contributions (1,788,553) (1,788,553) -
Net changes 983,696 (2,449,755) 3,433,451
Balance at December 31, 2022 $ 28,981,336 $ 23,052,158 $ 5,929,178
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 7.00 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 (6.00 percent) or 1-percentage-point higher (8.00 percent) than the current rate:
1% Decrease Current Discount 1% Increase
(6.00%) Rate (7.00%) (8.00%)
City's net OPEB liability $ 8,674,731 $ 5,929,178 $ 3,610,001
83
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
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 $ 3,422,121 $ 5,929,178 $ 8,864,344
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, 2023, the City recognized OPEB expense of $481,402. At June 30, 2023, the
City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the
following sources:
Deferred Outflows of Deferred Inflows of
Resources Resources
Net difference between projected
and actual net investment income $ 2,310,544 $ -
Contributions subsequent to the
measurement date* 1,003,707 -
Total $ 3,314,251 $ -
*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,
2024.
84
City of Muskegon
NOTES TO FINANCIAL STATEMENTS
June 30, 2023
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
2024 $ 252,727
2025 489,282
2026 669,831
2027 898,704
Payables to the OPEB Plan
At June 30, 2023, the City reported a payable of $10,338 for the outstanding amount of contributions to the
OPEB Plan for the year ended June 30, 2023.
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, 2023, City and employee contributions were $779,696 and $344,718,
respectively.
85
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86
REQUIRED SUPPLEMENTARY INFORMATION
87
City of Muskegon
BUDGETARY COMPARISON SCHEDULE
General Fund
For the year ended June 30, 2023
(with comparative actual amounts for the year ended June 30, 2022)
2023 2022
Budgeted Amounts Variance with
Original Final Actual Final Budget Actual
REVENUES
Taxes
City income taxes $ 9,300,000 $ 11,000,000 $ 11,957,105 $ 957,105 $ 10,002,623
Property taxes 8,350,000 8,972,222 8,939,622 (32,600) 7,980,885
Industrial facilities taxes 175,000 175,000 242,192 67,192 155,353
Payments in lieu of taxes 662,541 662,541 666,069 3,528 656,785
Total taxes 18,487,541 20,809,763 21,804,988 995,225 18,795,646
Licenses and permits
Business licenses 50,000 40,000 40,745 745 43,875
Liquor licenses 65,000 60,000 60,036 36 65,054
Marihuana facilities licenses 195,000 195,000 141,337 (53,663) 175,500
Cable TV fees 370,000 370,000 349,044 (20,956) 369,420
Rental property registration 403,700 485,000 520,590 35,590 412,225
Burial permits 75,000 75,000 68,240 (6,760) 69,200
Building permits 810,000 1,400,000 1,395,235 (4,765) 755,346
Electrical permits 195,000 210,000 210,651 651 172,506
Plumbing permits 105,000 112,000 113,789 1,789 87,562
Mechanical permits 146,000 157,000 159,145 2,145 130,775
Vacant building fees 30,000 30,000 15,200 (14,800) 24,585
Total licenses and permits 2,444,700 3,134,000 3,074,012 (59,988) 2,306,048
Intergovernmental revenues
Federal grants 250,000 250,000 182,483 (67,517) 291,918
State
Grants 1,360,000 1,530,000 1,440,862 (89,138) 1,392,403
State shared revenue 4,803,553 5,063,948 5,180,344 116,396 5,087,587
Total intergovernmental revenues - State 6,163,553 6,593,948 6,621,206 27,258 6,479,990
Local - - 50,000 50,000 50,000
88
City of Muskegon
BUDGETARY COMPARISON SCHEDULE—CONTINUED
General Fund
For the year ended June 30, 2023
(with comparative actual amounts for the year ended June 30, 2022)
2023 2022
Budgeted Amounts Variance with
Original Final Actual Final Budget Actual
Charges for services
Tax administration fees $ 386,000 $ 386,000 $ 411,981 $ 25,981 $ 389,161
Utility administration fees 310,000 310,000 310,000 - 310,000
Reimbursement for elections - 37,749 29,999 (7,750) 2,464
Brownfield authority admin fee 201,850 201,850 201,851 1 275,000
Indirect cost reimbursements 1,587,749 1,587,749 1,587,749 - 1,440,116
Site plan review fee 10,000 10,000 7,400 (2,600) 10,900
Sale of cemetery lots 40,000 41,000 36,881 (4,119) 33,493
Police miscellaneous 237,000 124,500 118,143 (6,357) 250,874
Police impound fees 40,000 40,000 34,658 (5,342) 37,903
Landlord's alert fee 30,000 41,000 45,407 4,407 25,783
Fire protection - state property 119,574 99,233 99,233 - 101,158
Zoning fees 22,800 22,800 14,563 (8,237) 27,785
Muskegon Heights zoning 15,000 15,000 - (15,000) 2,310
Clerk fees 2,000 5,000 4,489 (511) 32,493
Clerk fees - passport fees 50,000 70,000 68,415 (1,585) 45,480
Tax abatement application fees 14,400 14,400 9,272 (5,128) 7,280
Treasurer fees 42,000 42,000 84,315 42,315 76,621
False alarm fees 7,000 7,000 4,005 (2,995) 7,785
Miscellaneous cemetery income 40,000 40,000 25,694 (14,306) 32,615
Downtown social district 100,000 100,000 45,450 (54,550) 79,102
Fire miscellaneous 17,000 26,000 21,403 (4,597) 10,922
Sanitation stickers 562,100 592,100 595,690 3,590 451,038
Lot cleanup fees 39,500 39,500 34,480 (5,020) 27,808
Reimbursements - lot mowing and demolitions 5,000 5,000 - (5,000) -
Special events reimbursements 27,000 31,500 35,918 4,418 22,621
Recreation program fees 12,000 12,000 9,803 (2,197) 22,192
Parking 730,000 800,000 841,843 41,843 837,125
Other charges for services 10,000 25,000 24,000 (1,000) 6,000
Total charges for services 4,657,973 4,726,381 4,702,642 (23,739) 4,566,029
Fines and forfeitures
Income tax - penalty and interest 230,000 290,000 288,786 (1,214) 189,868
Late fees on current taxes 20,000 20,000 20,473 473 17,878
Interest on late invoices 19,400 23,000 21,713 (1,287) 17,777
Parking fines 250,000 250,000 174,945 (75,055) 249,725
Court fines 90,000 90,000 79,246 (10,754) 74,789
Civil infractions 23,500 23,500 18,875 (4,625) 31,332
Total fines and forfeitures 632,900 696,500 604,038 (92,462) 581,369
Investment earnings and rental income
Interest income 100,000 480,000 901,798 421,798 254,524
Net increase (decrease) in the fair value of investments - (250,000) (428,700) (178,700) (918,392)
City right of way rental 6,800 6,800 4,400 (2,400) 2,400
Fire station lease - Central Dispatch 480,708 480,708 322,925 (157,783) 353,579
Parking rentals 70,000 70,000 94,295 24,295 55,239
Great Lakes Naval Memorial lease 15,000 15,000 - (15,000) -
McGraft Park rentals 65,000 140,000 126,633 (13,367) 92,841
Other park rentals 40,000 51,000 54,040 3,040 66,459
Total investment earnings and rental income 777,508 993,508 1,075,391 81,883 (93,350)
89
City of Muskegon
BUDGETARY COMPARISON SCHEDULE—CONTINUED
General Fund
For the year ended June 30, 2023
(with comparative actual amounts for the year ended June 30, 2022)
2023 2022
Budgeted Amounts Variance with
Original Final Actual Final Budget Actual
Other
Sale of land and assets $ - $ - $ - $ - $ 356
Police sale and auction proceeds 500 1,100 1,100 - 4,872
CDBG program reimbursements 438,910 473,910 375,542 (98,368) 412,269
Fisherman's Landing reimbursement 25,000 28,319 28,319 - 28,039
Contributions 284,000 168,000 104,882 (63,118) 265,700
Contributions - Veteran's Park maintenance 18,500 18,500 73,122 54,622 16,889
Community Foundation for Muskegon County 35,534 36,419 10,885 (25,534) 10,691
Miscellaneous and sundry 102,069 224,975 449,263 224,288 428,301
Total other 904,513 951,223 1,043,113 91,890 1,167,117
Total revenues 34,318,688 38,155,323 39,157,873 1,002,550 34,144,767
EXPENDITURES
Current
Public representation services
City commission 125,960 137,960 137,289 671 106,980
City promotions and public relations 76,000 114,000 123,219 (9,219) 66,682
City manager 579,296 579,296 546,886 32,410 490,999
Contributions to outside agencies 535,285 572,785 492,375 80,410 567,952
City attorney 420,000 420,000 605,869 (185,869) 526,315
Total public representation services 1,736,541 1,824,041 1,905,638 (81,597) 1,758,928
Administrative services
City clerk 705,904 825,872 842,713 (16,841) 709,596
Civil service 231,240 231,240 237,094 (5,854) 236,245
Total administrative services 937,144 1,057,112 1,079,807 (22,695) 945,841
Financial services
Finance administration 647,662 655,662 665,136 (9,474) 642,543
Assessing 416,026 428,026 429,591 (1,565) 415,917
Arena administration - - - - 8,196
Income tax administration 429,054 476,754 474,611 2,143 403,538
Information systems 629,530 643,530 656,777 (13,247) 651,932
City treasurer 596,842 662,292 695,791 (33,499) 637,622
Pension administration 3,393,940 3,393,940 3,167,679 226,261 2,908,506
Total financial services 6,113,054 6,260,204 6,089,585 170,619 5,668,254
Public safety
Police department 10,360,165 11,087,525 11,073,924 13,601 10,758,657
Fire department 3,182,485 3,877,864 3,894,030 (16,166) 3,034,373
Building inspections 1,940,504 2,850,504 2,830,396 20,108 1,727,952
Total public safety 15,483,154 17,815,893 17,798,350 17,543 15,520,982
90
City of Muskegon
BUDGETARY COMPARISON SCHEDULE—CONTINUED
General Fund
For the year ended June 30, 2023
(with comparative actual amounts for the year ended June 30, 2022)
2023 2022
Budgeted Amounts Variance with
Original Final Actual Final Budget Actual
Public works
Street lighting $ 350,000 $ 340,000 $ 296,561 $ 43,439 $ 356,973
Community event support 141,851 104,106 121,143 (17,037) 130,198
General sanitation 2,378,589 2,246,089 2,558,983 (312,894) 2,344,186
Storm water management 28,500 43,200 35,929 7,271 22,233
City hall maintenance 354,542 463,150 493,912 (30,762) 365,188
Cemeteries maintenance 601,550 558,380 565,457 (7,077) 509,515
Total public works 3,855,032 3,754,925 4,071,985 (317,060) 3,728,293
Community and economic development
Planning, zoning and economic development 572,331 677,331 675,384 1,947 542,191
Environmental services - 2,177 37,831 (35,654) 1,502
Edison Landing subsidy 200,000 200,000 200,000 - 200,000
Total community and economic development 772,331 879,508 913,215 (33,707) 743,693
Culture and recreation
Parks maintenance 2,369,983 2,369,983 2,640,748 (270,765) 2,482,189
McGraft Park maintenance 159,344 190,448 206,870 (16,422) 142,840
General and inner city recreation programs - 1,111 77 1,034 5,482
Forestry 73,625 33,927 64,684 (30,757) 81,501
Parking operations 308,320 434,320 425,909 8,411 100,522
Farmers market and flea market - - - - 41
Social district 70,636 70,636 41,097 29,539 26,905
Total culture and recreation 2,981,908 3,100,425 3,379,385 (278,960) 2,839,480
General administration
Insurance premiums 407,941 945,000 1,003,306 (58,306) 450,719
Other 47,500 47,500 (52,517) 100,017 34,305
Total other governmental functions 455,441 992,500 950,789 41,711 485,024
Debt service
Principal 981,000 1,027,000 1,022,509 4,491 907,462
Interest and fees 374,986 378,074 377,330 744 390,771
Bond issuance costs - - - - 1,000
Total debt service 1,355,986 1,405,074 1,399,839 5,235 1,299,233
Capital outlay 3,653,000 5,397,165 5,198,799 198,366 4,662,678
Total expenditures 37,343,591 42,486,847 42,787,392 (300,545) 37,652,406
Excess of revenues over (under) expenditures (3,024,903) (4,331,524) (3,629,519) 702,005 (3,507,639)
91
City of Muskegon
BUDGETARY COMPARISON SCHEDULE—CONTINUED
General Fund
For the year ended June 30, 2023
(with comparative actual amounts for the year ended June 30, 2022)
2023 2022
Budgeted Amounts Variance with
Original Final Actual Final Budget Actual
OTHER FINANCING SOURCES (USES)
Long-term debt issued $ - $ 761,603 $ 761,603 $ - $ 1,370,873
Transfers in 3,903,150 4,504,650 4,251,451 (253,199) 5,798,549
Transfers out (875,000) (2,277,000) (2,227,000) 50,000 (3,998,250)
Total other financing sources (uses) 3,028,150 2,989,253 2,786,054 (203,199) 3,171,172
Net change in fund balance $ 3,247 $ (1,342,271) (843,465) $ 498,806 (336,467)
Fund balance at beginning of year 10,861,373 11,197,840
Fund balance at end of year $ 10,017,908 $ 10,861,373
Note: Both budgets and actual figures are prepared in accordance with generally accepted accounting principles.
92
City of Muskegon
BUDGETARY COMPARISON SCHEDULE
Major Street and Trunkline Fund
For the year ended June 30, 2023
Budgeted Amounts Variance with
Original Final Actual Final Budget
REVENUES
Intergovernmental revenues
Federal $ 853,497 $ - $ - $ -
State 5,171,000 5,801,000 5,951,632 150,632
Charges for services - 12,000 - (12,000)
Investment earnings 5,000 - 19,664 19,664
Other 50,000 3,000 1,953 (1,047)
Total revenues 6,079,497 5,816,000 5,973,249 157,249
EXPENDITURES
Current
Highways, streets and bridges 5,848,269 6,390,251 4,785,171 1,605,080
Net change in fund balance $ 231,228 $ (724,251) 1,188,078 $ 1,912,329
Fund balance at beginning of year 3,520,246
Fund balance at end of year $ 4,708,324
Note: Both budgets and actual figures are prepared in accordance with generally accepted accounting principles.
93
City of Muskegon
BUDGETARY COMPARISON SCHEDULE
Trinity Health Arena Fund
For the year ended June 30, 2023
Budgeted Amounts Variance with
Original Final Actual Final Budget
REVENUES
Charges for services $ 1,755,500 $ 1,931,082 $ 1,849,384 $ (81,698)
Investment earnings - 13,538 112,768 99,230
Other 5,000 41,000 40,017 (983)
Total revenues 1,760,500 1,985,620 2,002,169 16,549
EXPENDITURES
Current
Culture and recreation 1,533,301 2,484,548 2,569,816 (85,268)
Capital outlay 590,000 984,443 1,000,446 (16,003)
Total expenditures 2,123,301 3,468,991 3,570,262 (101,271)
Excess of revenues over (under) expenditures (362,801) (1,483,371) (1,568,093) (84,722)
OTHER FINANCING SOURCES
Proceeds from sale of capital assets 10,000 - - -
Transfers in 450,000 1,527,508 1,548,761 21,253
Total other financing sources 460,000 1,527,508 1,548,761 21,253
Net change in fund balance $ 97,199 $ 44,137 (19,332) $ (63,469)
Fund balance at beginning of year 61,968
Fund balance at end of year $ 42,636
Note: Both budgets and actual figures are prepared in accordance with generally accepted accounting principles.
94
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)
2022 2021 2020 2019 2018 2017 2016 2015 2014
TOTAL PENSION LIABILITY
Service cost $ 510,157 $ 529,832 $ 615,293 $ 732,228 $ 806,565 $ 1,018,541 $ 1,130,408 $ 1,194,909 $ 1,190,507
Interest 9,162,662 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 1,074,817 256,636 2,829,299 1,830,804 3,642,392 1,326,122 (1,697,797) (647,017) -
Changes in assumptions 1,800,812 4,396,829 2,974,495 4,134,788 - - - 4,779,382 -
Benefit payments, including refunds of employee contributions (9,852,666) (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 (1,577,082) - - - (229,967) (4,485,289) - - -
Net change in total pension liability 1,118,700 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 131,052,803 125,918,365 119,926,123 112,728,195 107,675,977 108,324,914 106,964,467 99,966,407 97,366,329
Total pension liability at end of year (a) $ 132,171,503 $ 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 $ 3,896,659 $ 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 291,821 304,680 374,806 491,814 848,562 687,391 563,898 566,045 564,409
Net investment income (loss) (10,311,712) 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 (9,852,666) (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 (180,011) (146,581) (173,766) (190,108) (173,509) (173,921) (175,718) (183,599) (193,139)
- - - -
Net change in plan fiduciary net position (16,155,909) 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 99,989,454 93,025,193 88,994,708 83,140,099 90,759,017 84,417,960 79,560,142 85,358,622 84,946,601
95
Plan fiduciary net position at end of year (b) $ 83,833,545 $ 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) $ 48,337,958 $ 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 63.43% 76.30% 73.88% 74.21% 73.75% 84.29% 77.93% 74.38% 85.39%
Covered payroll $ 4,200,465 $ 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 1150.78% 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.
The following were significant changes to actuarial assumptions:
2015 Valuation - The investment rate of return assumption was reduced from 8.25 percent to 8.0 percent, the wage inflation assumption was reduced from 4.5 percent to 3.75 percent, inflation rates changed
from 3.0 - 4.0 percent to 2.5 percent.
2019 Valuation - The investment rate of return assumption was reduced from 8.0 percent to 7.6 percent, the wage inflation assumptioon was reduced from 3.75 percent to 3.0 percent.
2020 Valuation - Mortality rates were changed to the recently issued Pub-2010 mortality general rates as published by the Society of Actuaries along with a change to sex-distinct assumptions.
2021 Valuation - The investment rate of return assumption was reduced from 7.6 percent to 7.25 percent.
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)
2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Actuarially determined contribution $ 4,052,695 $ 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
Contributions in relation to the actuarially
determined contribution 4,052,695 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
Contribution deficiency (excess) $ - $ - $ - $ (922,393) $ (315,967) $ (166,074) $ (379,042) $ (206,832) $ - $ (500,000)
Covered payroll $ 4,200,465 $ 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
Contributions as percentage of covered
payroll 96.5% 80.8% 53.7% 45.5% 33.8% 25.7% 26.9% 19.2% 14.1% 16.8%
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
96
Remaining amortization period 16 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 7.00 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)
2022 2021 2020 2019 2018 2017
TOTAL OPEB LIABILITY
Service cost $ 47,962 $ 142,556 $ 156,214 $ 165,306 $ 178,243 $ 165,423
Interest 1,995,623 1,999,639 2,058,432 2,191,233 2,035,720 1,954,979
Differences between expected and actual experience (433,044) (2,420,665) (325,146) (2,119,868) (992,432) -
Changes of assumptions 1,161,708 (2,771,809) (1,152,266) 6,288,823 2,349,210 -
Benefit payments, including refunds of employee contributions (1,788,553) (1,710,064) (1,621,453) (1,983,928) (1,118,442) (1,064,376)
Net change in total OPEB liability 983,696 (4,760,343) (884,219) 4,541,566 2,452,299 1,056,026
Total OPEB liability at beginning of year 27,997,640 32,757,983 33,642,202 29,100,636 26,648,337 25,592,311
Total OPEB liability at end of year (a) $ 28,981,336 $ 27,997,640 $ 32,757,983 $ 33,642,202 $ 29,100,636 $ 26,648,337
PLAN FIDUCIARY NET POSITION
Contributions-employer $ 1,997,928 $ 1,767,843 $ 1,154,926 $ 1,001,447 $ 671,363 $ 736,039
Net investment income (loss) (2,613,129) 2,574,713 2,210,729 2,660,470 (699,603) 2,110,019
Benefit payments, including refunds or employee contributions (1,788,553) (1,710,064) (1,621,453) (1,983,928) (1,118,442) (1,064,376)
97
Administrative expense (46,001) (47,967) (42,375) (41,397) (53,927) (52,313)
Net change in plan fiduciary net position (2,449,755) 2,584,525 1,701,827 1,636,592 (1,200,609) 1,729,369
Plan fiduciary net position at beginning of year 25,501,913 22,917,388 21,215,561 19,578,969 20,779,578 19,050,209
Plan fiduciary net position at end of year (b) $ 23,052,158 $ 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) $ 5,929,178 $ 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 79.54% 91.09% 69.96% 63.06% 67.28% 77.98%
Covered payroll $ 6,711,986 $ 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 88.34% 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.
See the following page for significant changes to actuarial assumptions.
City of Muskegon
REQUIRED SUPPLEMENTARY INFORMATION
RETIREE HEALTHCARE SYSTEM SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIO—CONTINUED
Last Ten Fiscal Years (Amounts were determined as of December 31 of each fiscal year)
Notes to Schedule—Continued
The following were significant changes to actuarial assumptions
2019 Valuation
Mortality improvement scale updated.
Medical trend rates updated.
Salary scale updated from 3.5 percent to 3.0 percent.
Discount rate changed from 7.75 percent to 6.24 percent.
2020 Valuation
Mortality improvement scale updated.
Medical and dental trend updated.
2021 Valuation
Salary scale updated from 3.0 percent to 0.0 percent.
Mortality improvement scale updated.
Discount rate updated from 6.24 percent to 7.35 percent.
98
2022 Valuation
Medical trend rates updated.
Discount rate changed from 7.35 percent to 7.0 percent.
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)
2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Actuarially determined contribution $ 908,913 $ 1,344,010 $ 2,289,405 $ 2,115,188 $ 1,470,562 $ 956,532 $ 606,506 $ 639,428 $ 659,451 $ 696,634
Contributions in relation to the actuarially
determined contribution 1,865,895 650,383 1,206,464 1,233,505 1,260,887 687,642 606,506 639,428 659,451 696,634
Contribution deficiency (excess) $ (956,982) $ 693,627 $ 1,082,941 $ 881,683 $ 209,675 $ 268,890 $ - $ - $ - $ -
Covered payroll $ 6,711,986 $ 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
Contributions as percentage of covered
payroll 27.8% 9.3% 15.4% 13.8% Not Available 8.5% 5.6% 5.9% 6.6% 7.0%
Notes to Schedule
Valuation Date:
Actuarially determined contribution rates are calculated as of December 31, 2021 rolled forward to December 31, 2022.
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
99
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 7.00 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)
2022 2021 2020 2019 2018 2017
Annual money-weighted rate of return, net of investment expense -10.21% 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
100
OTHER SUPPLEMENTAL INFORMATION
101
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.
102
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.
103
City of Muskegon
COMBINING BALANCE SHEET
Other Governmental Funds
June 30, 2023
Other Other Permanent
Total Other Special Capital Fund -
Governmental Revenue Projects Cemetery
Funds Funds Funds Perpetual Care
ASSETS
Cash and investments $ 6,163,693 $ 1,018,998 $ 4,377,950 $ 766,745
Assets managed by others 1,465,078 - 33,595 1,431,483
Receivables
Accounts and loans (net of allowance for uncollectibles) 1,100,272 24,513 1,070,576 5,183
Due from other governmental units 926,820 223,493 703,327 -
Advances to component units 100,922 - - 100,922
Prepaid items 7,763 7,763 - -
Total assets $ 9,764,548 $ 1,274,767 $ 6,185,448 $ 2,304,333
LIABILITIES
Accounts payable $ 1,169,551 $ 57,135 $ 1,112,416 $ -
Accrued liabilities 11,238 5,134 6,104 -
Due to other governmental units 123 - 123 -
Due to other funds 494,615 - 494,615 -
Short-term draw note 750,000 - 750,000 -
Unearned revenues - unused Farmers Market tokens 145,397 145,397 - -
Total liabilities 2,570,924 207,666 2,363,258 -
FUND BALANCES
Nonspendable
Prepaid items 7,763 7,763 - -
Perpetual care 1,715,012 - - 1,715,012
Restricted
Highways, streets and bridges 730,944 730,944 - -
Law enforcement 23,276 23,276 - -
Business improvement districts 139,150 139,150 - -
Perpetual care 589,321 - - 589,321
Other purposes 165,968 165,968 - -
Assigned for capital projects and public improvements 3,822,190 - 3,822,190 -
Total fund balances 7,193,624 1,067,101 3,822,190 2,304,333
Total liabilities and fund balances $ 9,764,548 $ 1,274,767 $ 6,185,448 $ 2,304,333
104
City of Muskegon
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
Other Governmental Funds
For the year ended June 30, 2023
Other Other Permanent
Total Other Special Capital Fund -
Governmental Revenue Projects Cemetery
Funds Funds Funds Perpetual Care
REVENUES
Intergovernmental revenues
Federal $ 2,512,647 $ - $ 2,512,647 $ -
State 1,582,287 1,519,645 62,642 -
Local 1,155,110 - 1,155,110 -
Charges for services 650,392 583,880 29,201 37,311
Investment earnings 26,171 3,958 14,134 8,079
Income from assets managed by others 108,492 - 4,583 103,909
Other 958,280 205,224 753,056 -
Total revenues 6,993,379 2,312,707 4,531,373 149,299
EXPENDITURES
Current
Public works 167,332 167,332 - -
Highways, streets and bridges 1,587,995 1,587,995 - -
Culture and recreation 660,818 660,818 - -
Debt service
Principal 250,000 - 250,000 -
Interest and fees 608,420 - 608,420 -
Capital outlay 5,021,844 - 5,021,844 -
Total expenditures 8,296,409 2,416,145 5,880,264 -
Excess of revenues over (under) expenditures (1,303,030) (103,438) (1,348,891) 149,299
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets 2,976,733 - 2,976,733 -
Transfers in 316,000 - 316,000 -
Transfers out (316,000) - (316,000) -
Total other financing sources (uses) 2,976,733 - 2,976,733 -
Net change in fund balances 1,673,703 (103,438) 1,627,842 149,299
Fund balances at beginning of year 5,519,921 1,170,539 2,194,348 2,155,034
Fund balances at end of year $ 7,193,624 $ 1,067,101 $ 3,822,190 $ 2,304,333
105
City of Muskegon
COMBINING BALANCE SHEET
Other Special Revenue Funds
June 30, 2023
Total Other Farmers
Special Revenue Local Market and Criminal Downtown Lakeshore Tree
Funds Street Kitchen 242 Forfeitures BID BID Replacement
ASSETS
Cash and investments $ 1,018,998 $ 526,435 $ 298,147 $ 23,276 $ 114,947 $ 34,298 $ 21,895
Receivables
Accounts 24,513 7,549 16,964 - - - -
Due from other governmental units 223,493 223,493 - - - - -
Prepaid items 7,763 7,763 - - - - -
Total assets $ 1,274,767 $ 765,240 $ 315,111 $ 23,276 $ 114,947 $ 34,298 $ 21,895
LIABILITIES
Accounts payable $ 57,135 $ 22,309 $ 24,731 $ - $ 10,005 $ 90 $ -
Accrued liabilities 5,134 4,224 910 - - - -
Unearned revenues - unused Farmers Market tokens 145,397 - 145,397 - - - -
106
Total liabilities 207,666 26,533 171,038 - 10,005 90 -
FUND BALANCES
Nonspendable - prepaid items 7,763 7,763 - - - - -
Restricted
Highways, streets and bridges 730,944 730,944 - - - - -
Law enforcement 23,276 - - 23,276 - - -
Business improvement districts 139,150 - - - 104,942 34,208 -
Other purposes 165,968 - 144,073 - - - 21,895
Total fund balances 1,067,101 738,707 144,073 23,276 104,942 34,208 21,895
Total liabilities and fund balances $ 1,274,767 $ 765,240 $ 315,111 $ 23,276 $ 114,947 $ 34,298 $ 21,895
City of Muskegon
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
Other Special Revenue Funds
For the year ended June 30, 2023
Total Other Farmers
Special Revenue Local Market and Criminal Downtown Lakeshore Tree
Funds Street Kitchen 242 Forfeitures BID BID Replacement
REVENUES
Intergovernmental revenues
State $ 1,519,645 $ 1,519,645 $ - $ - $ - $ - $ -
Charges for services 583,880 7,285 576,595 - - - -
Investment earnings 3,958 2,023 917 115 685 169 49
Other 205,224 710 48,573 - 104,655 24,240 27,046
Total revenues 2,312,707 1,529,663 626,085 115 105,340 24,409 27,095
EXPENDITURES
Current
Public works 167,332 - - - 131,340 35,992 -
Highways, streets and bridges 1,587,995 1,587,995 - - - - -
107
Culture and recreation 660,818 - 655,007 - - - 5,811
Total expenditures 2,416,145 1,587,995 655,007 - 131,340 35,992 5,811
Net change in fund balances (103,438) (58,332) (28,922) 115 (26,000) (11,583) 21,284
Fund balances at beginning of year 1,170,539 797,039 172,995 23,161 130,942 45,791 611
Fund balances at end of year $ 1,067,101 $ 738,707 $ 144,073 $ 23,276 $ 104,942 $ 34,208 $ 21,895
City of Muskegon
BUDGETARY COMPARISON SCHEDULE
Other Special Revenue Funds
For the year ended June 30, 2023
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 $ 1,465,000 $ 1,519,645 $ 54,645 $ - $ - $ -
Charges for services 7,285 7,285 - 504,962 576,595 71,633
Investment earnings 3,500 2,023 (1,477) 700 917 217
Other 20,000 710 (19,290) 47,500 48,573 1,073
Total revenues 1,495,785 1,529,663 33,878 553,162 626,085 72,923
EXPENDITURES
Current
Highways, streets and bridges 1,710,482 1,587,995 122,487 - - -
108
Culture and recreation - - - 681,550 655,007 26,543
Total expenditures 1,710,482 1,587,995 122,487 681,550 655,007 26,543
Excess of revenues over (under) expenditures (214,697) (58,332) 156,365 (128,388) (28,922) 99,466
OTHER FINANCING SOURCES
Transfers in 150,000 - (150,000) 80,000 - (80,000)
Net change in fund balances $ (64,697) (58,332) $ 6,365 $ (48,388) (28,922) $ 19,466
Fund balances at beginning of year 797,039 172,995
Fund balances at end of year $ 738,707 $ 144,073
City of Muskegon
BUDGETARY COMPARISON SCHEDULE─CONTINUED
Other Special Revenue Funds
For the year ended June 30, 2023
Criminal Forfeitures Downtown BID
Final Variance With Final Variance With
Budget Actual Final Budget Budget Actual Final Budget
REVENUES
Fines and forfeitures $ 5,000 $ - $ (5,000) $ - $ - $ -
Investment earnings 20 115 95 - 685 685
Other - - - 114,678 104,655 (10,023)
Total revenues 5,020 115 (4,905) 114,678 105,340 (9,338)
EXPENDITURES
Current
Public safety 12,000 - 12,000 - - -
Public works - - - 134,900 131,340 3,560
109
Total expenditures 12,000 - 12,000 134,900 131,340 3,560
Net change in fund balances $ (6,980) 115 $ 7,095 $ (20,222) (26,000) $ (5,778)
Fund balances at beginning of year 23,161 130,942
Fund balances at end of year $ 23,276 $ 104,942
City of Muskegon
BUDGETARY COMPARISON SCHEDULE─CONTINUED
Other Special Revenue Funds
For the year ended June 30, 2023
Lakeshore BID Tree Replacement
Final Variance with Final Variance with
Budget Actual Final Budget Budget Actual Final Budget
REVENUES
Investment earnings $ - $ 169 $ 169 $ - $ 49 $ 49
Other 26,944 24,240 (2,704) 7,500 27,046 19,546
Total revenues 26,944 24,409 (2,535) 7,500 27,095 19,595
EXPENDITURES
Current
Public works 41,944 35,992 5,952 - - -
Culture and recreation - - - 7,500 5,811 1,689
- -
Total expenditures 41,944 35,992 5,952 7,500 5,811 1,689
110
Net change in fund balances $ (15,000) (11,583) $ 3,417 $ - 21,284 $ 21,284
Fund balances at beginning of year 45,791 611
Fund balances at end of year $ 34,208 $ 21,895
City of Muskegon
COMBINING BALANCE SHEET
Other Capital Projects Funds
June 30, 2023
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 $ 4,377,950 $ 3,092,077 $ 229,832 $ 560,531 $ 82,708 $ 268,998 $ - $ 31,639 $ 112,165 $ -
Assets managed by others 33,595 33,595 - - - - - - - -
Receivables
Accounts and loans (net of
allowance for uncollectibles) 1,070,576 434,151 - 625,961 - 8,399 105 - 1,960 -
Due from other governmental units 703,327 - - - 107,626 17,751 477,392 - - 100,558
Total assets $ 6,185,448 $ 3,559,823 $ 229,832 $ 1,186,492 $ 190,334 $ 295,148 $ 477,497 $ 31,639 $ 114,125 $ 100,558
LIABILITIES
Accounts payable $ 1,112,416 $ 980,760 $ - $ - $ 40,634 $ 1,000 $ 58,758 $ 8,198 $ - $ 23,066
Accrued liabilities 6,104 - - - 3,217 1,271 1,072 - - 544
Due to other governmental units 123 - - - 123 - - - - -
Due to other funds 494,615 - - - - - 417,667 - - 76,948
Short-term draw note 750,000 750,000 - - - - - - - -
Total liabilities 2,363,258 1,730,760 - - 43,974 2,271 477,497 8,198 - 100,558
111
FUND BALANCES
Assigned for capital projects
and public improvements 3,822,190 1,829,063 229,832 1,186,492 146,360 292,877 - 23,441 114,125 -
Total liabilities and fund balances $ 6,185,448 $ 3,559,823 $ 229,832 $ 1,186,492 $ 190,334 $ 295,148 $ 477,497 $ 31,639 $ 114,125 $ 100,558
City of Muskegon
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
Other Capital Projects Funds
For the year ended June 30, 2023
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 $ 2,512,647 $ - $ - $ - $ 1,151,380 $ 83,537 $ 994,208 $ - $ - $ 283,522
State 62,642 - - - - - 62,642 - - -
Local 1,155,110 152,583 - - - - - - 1,002,527 -
Charges for services 29,201 23,201 - 6,000 - - - - - -
Investment earnings 14,134 5,807 1,146 6,497 - - - 355 329 -
Income from assets managed by others 4,583 4,583 - - - - - - - -
Other 753,056 591,195 - 54,474 2,189 100 - 105,098 - -
Total revenues 4,531,373 777,369 1,146 66,971 1,153,569 83,637 1,056,850 105,453 1,002,856 283,522
EXPENDITURES
Debt service
Principal 250,000 - - - - - - - 250,000 -
Interest and fees 608,420 435 - - - - - - 607,985 -
Capital outlay 5,021,844 1,852,394 - 48,476 1,142,652 394,982 1,056,850 100,386 142,582 283,522
Total expenditures 5,880,264 1,852,829 - 48,476 1,142,652 394,982 1,056,850 100,386 1,000,567 283,522
112
Excess of revenues over (under) expenditures (1,348,891) (1,075,460) 1,146 18,495 10,917 (311,345) - 5,067 2,289 -
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets 2,976,733 2,669,128 - - 20,866 286,739 - - - -
Transfers in 316,000 - - - - 316,000 - - - -
Transfers out (316,000) (316,000) - - - - - - - -
Total other financing sources (uses) 2,976,733 2,353,128 - - 20,866 602,739 - - - -
Net change in fund balances 1,627,842 1,277,668 1,146 18,495 31,783 291,394 - 5,067 2,289 -
Fund balances at beginning of year 2,194,348 551,395 228,686 1,167,997 114,577 1,483 - 18,374 111,836 -
Fund balances at end of year $ 3,822,190 $ 1,829,063 $ 229,832 $ 1,186,492 $ 146,360 $ 292,877 $ - $ 23,441 $ 114,125 $ -
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.
113
City of Muskegon
COMBINING STATEMENT OF NET POSITION
Internal Service Funds
June 30, 2023
Total Internal Engineering General Public Service
Service Funds Services Equipment Insurance Building
ASSETS
Current assets
Cash and investments $ 4,403,761 $ 150,724 $ 1,468,094 $ 1,611,139 $ 1,173,804
Accounts receivable 354,597 7,951 - 346,646 -
Inventories 17,624 - 17,624 - -
Prepaid items 86,833 3,321 76,264 - 7,248
Total current assets 4,862,815 161,996 1,561,982 1,957,785 1,181,052
Noncurrent assets
Advances to component units 201,842 - 100,921 100,921 -
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 10,712,508 51,346 10,566,798 - 94,364
Less accumulated depreciation (9,775,305) (36,144) (7,896,963) - (1,842,198)
Net capital assets 2,972,133 15,202 2,669,835 - 287,096
Total noncurrent assets 3,173,975 15,202 2,770,756 100,921 287,096
Total assets 8,036,790 177,198 4,332,738 2,058,706 1,468,148
DEFERRED OUTFLOWS OF RESOURCES
Related to pension 391,007 - 146,628 - 244,379
Related to other postemployment benefits 132,570 - 49,714 - 82,856
Total deferred outflows of resources 523,577 - 196,342 - 327,235
Total assets and deferred outflows of resources 8,560,367 177,198 4,529,080 2,058,706 1,795,383
LIABILITIES
Current liabilities
Accounts payable 878,944 5,321 132,841 687,611 53,171
Accrued liabilities 25,147 7,015 6,232 652 11,248
Bonds and other obligations, due within one year 46,900 11,100 16,900 1,900 17,000
Total current liabilities 950,991 23,436 155,973 690,163 81,419
Noncurrent liabilities
Bonds and other obligations, less amounts due within one year 188,001 44,568 67,586 7,651 68,196
Net pension liability 1,933,518 - 725,069 - 1,208,449
Net other postemployment benefits liability 237,167 - 88,938 - 148,229
Total noncurrent liabilities 2,358,686 44,568 881,593 7,651 1,424,874
Total liabilities 3,309,677 68,004 1,037,566 697,814 1,506,293
NET POSITION
Net investment in capital assets 2,972,133 15,202 2,669,835 - 287,096
Unrestricted 2,278,557 93,992 821,679 1,360,892 1,994
Total net position $ 5,250,690 $ 109,194 $ 3,491,514 $ 1,360,892 $ 289,090
114
City of Muskegon
COMBINING STATEMENT OF REVENUE, EXPENSES AND CHANGES IN NET POSITION
Internal Service Funds
For the year ended June 30, 2023
Total Internal Engineering General Public Service
Service Funds Services Equipment Insurance Building
OPERATING REVENUES
Charges for services $ 9,442,916 $ 682,361 $ 3,346,478 $ 3,539,653 $ 1,874,424
Other 2,120,346 67,739 89,386 1,963,196 25
Total operating revenues 11,563,262 750,100 3,435,864 5,502,849 1,874,449
OPERATING EXPENSES
Administration 1,063,561 137,912 203,463 49,529 672,657
Insurance premiums and claims 5,134,457 - - 5,134,457 -
Other operations 4,898,895 675,830 2,655,595 58,167 1,509,303
Depreciation 566,059 2,499 536,064 - 27,496
Total operating expenses 11,662,972 816,241 3,395,122 5,242,153 2,209,456
Operating income (loss) (99,710) (66,141) 40,742 260,696 (335,007)
NONOPERATING REVENUES (EXPENSES)
Investment earnings 25,374 150 12,624 8,663 3,937
Gain (loss) on sale of capital assets 53,967 - 53,967 - -
Total nonoperating revenues (expenses) 79,341 150 66,591 8,663 3,937
Income (loss) before transfers (20,369) (65,991) 107,333 269,359 (331,070)
TRANSFERS
Transfers in 635,000 125,000 - - 510,000
Change in net position 614,631 59,009 107,333 269,359 178,930
Net position at beginning of year 4,636,059 50,185 3,384,181 1,091,533 110,160
Net position at end of year $ 5,250,690 $ 109,194 $ 3,491,514 $ 1,360,892 $ 289,090
115
City of Muskegon
COMBINING STATEMENT OF CASH FLOWS
Internal Service Funds
For the year ended June 30, 2023
Total Internal Engineering General Public Service
Service Funds Services Equipment Insurance Building
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 183,150 $ 84,407 $ 98,743 $ - $ -
Receipts from interfund services provided 9,442,916 682,361 3,346,478 3,539,653 1,874,424
Other receipts 1,915,791 - - 1,915,766 25
Payments to suppliers (7,279,334) (190,673) (1,466,301) (4,859,221) (763,139)
Payments to employees (2,397,034) (500,632) (585,164) (53,935) (1,257,303)
Payments for interfund services used (1,117,064) (117,742) (859,872) - (139,450)
Net cash provided by (used for) operating activities 748,425 (42,279) 533,884 542,263 (285,443)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Transfers in 635,000 125,000 - - 510,000
Collections on advances to component units 96,144 - 48,072 48,072 -
Net cash provided by (used for) noncapital financing activities 731,144 125,000 48,072 48,072 510,000
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Purchases of capital assets (714,728) - (714,728) - -
Proceeds from sale of capital assets 53,967 - 53,967 - -
116
Net cash provided by (used for) capital and related financing activities (660,761) - (660,761) - -
CASH FLOW FROM INVESTING ACTIVITIES
Investment earnings 25,374 150 12,624 8,663 3,937
Net increase (decrease) in cash and investments 844,182 82,871 (66,181) 598,998 228,494
Cash and investments at beginning of year 3,559,579 67,853 1,534,275 1,012,141 945,310
Cash and investments at end of year $ 4,403,761 $ 150,724 $ 1,468,094 $ 1,611,139 $ 1,173,804
Reconciliation of operating income (loss) to net cash provided by (used for)
operating activities
Operating income (loss) $ (99,710) $ (66,141) $ 40,742 $ 260,696 $ (335,007)
Adjustments to reconcile operating income (loss) to net cash provided by
(used for) operating activities
Depreciation expense 566,059 2,499 536,064 - 27,496
Change in assets and liabilities
Receivables (21,405) 16,668 9,357 (47,430) -
Inventories 21,243 - 21,243 - -
Prepaid items 142,263 (415) (13,545) 158,586 (2,363)
Accounts payable 99,562 513 (77,628) 166,655 10,022
Accrued liabilities 40,413 4,597 17,651 3,756 14,409
Net cash provided by (used for) operating activities $ 748,425 $ (42,279) $ 533,884 $ 542,263 $ (285,443)
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.
117
City of Muskegon
COMBINING STATEMENT OF NET POSITION
Custodial Funds
June 30, 2023
Total Current Rehab Loan
Custodial Funds Collector Tax Escrow
ASSETS
Cash and investments $ 1,415,754 $ 1,415,373 $ - $ 381
Accounts receivable 26,232 26,232 - -
Total assets 1,441,986 1,441,605 - 381
LIABILITIES
Accounts payable 22,836 22,455 - 381
Due to other governmental units 1,089,362 1,089,362 - -
Deposits held for others 329,788 329,788 - -
Total liabilities 1,441,986 1,441,605 - 381
NET POSITION
Restricted for individuals, organizations,
and other governments $ - $ - $ - $ -
118
City of Muskegon
COMBINING STATEMENT OF CHANGES IN NET POSITION
Custodial Funds
For the year ended June 30, 2023
Total Current Rehab Loan
Custodial Funds Collector Tax Escrow
ADDITIONS
Tax collections for other governments $ 25,890,949 $ 719,937 $ 25,171,012 $ -
Other collections for third parties 1,734,024 1,734,024 - -
Total additions 27,624,973 2,453,961 25,171,012 -
DEDUCTIONS
Payment of taxes to other governments 25,890,949 719,937 25,171,012 -
Other payments to third parties 1,734,024 1,734,024 - -
Total deductions 27,624,973 2,453,961 25,171,012 -
Change in net position - - - -
Net position at beginning of year - - - -
Net position at end of year $ - $ - $ - $ -
119
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120
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.
Lakeside Corridor Improvement Authority – to account for the collection of tax increment revenues to facilitate
and promote economic growth in the Lakeside Business District corridor.
Brownfield Redevelopment Authorities – to account for the collection of tax increment revenues for
environmental remediation in designated brownfield areas. Currently there are seven 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.
Area VII - Sweetwater
121
City of Muskegon
COMBINING BALANCE SHEET
Discretely Presented Component Units
June 30, 2023
Local
Total Discretely Development Lakeside
Presented Finance Downtown Tax Increment Corridor Brownfield
Component Authority - Development Finance Improvement Redevelopment
Units SmartZone Authority Authority Authority Authorities
ASSETS
Cash and investments $ 639,463 $ 53,019 $ 471,256 $ 23,921 $ 7,484 $ 83,783
Accounts receivable 13,936 - 13,936 - - -
Total assets $ 653,399 $ 53,019 $ 485,192 $ 23,921 $ 7,484 $ 83,783
LIABILITIES
Accounts payable $ 91,201 $ - $ 82,469 $ - $ - $ 8,732
Accrued liabilities 1,328 - 1,328 - - -
122
Advances from primary government 891,561 - - - - 891,561
Total liabilities 984,090 - 83,797 - - 900,293
FUND BALANCES (DEFICITS)
Unassigned (330,691) 53,019 401,395 23,921 7,484 (816,510)
Total liabilities and fund
balances (deficits) $ 653,399 $ 53,019 $ 485,192 $ 23,921 $ 7,484 $ 83,783
City of Muskegon
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO THE STATEMENT OF NET POSITION
Discretely Presented Component Units
June 30, 2023
Total fund balances (deficits)—governmental funds $ (330,691)
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 (3,381,025) 817,233
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 (4,100)
Bonds and notes payable (833,373) (837,473)
Net position of governmental activities $ (350,931)
123
City of Muskegon
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (DEFICITS)
Discretely Presented Component Units
For the year ended June 30, 2023
Local
Total Discretely Development Lakeside
Presented Finance Downtown Tax Increment Corridor Brownfield
Component Authority - Development Finance Improvement Redevelopment
Units SmartZone Authority Authority Authority Authorities
REVENUES
Property taxes $ 1,500,595 $ 86,205 $ 401,043 $ 44,105 $ 7,473 $ 961,769
Intergovernmental revenues
State 40,254 3,339 2,625 9,728 - 24,562
Local 217,000 200,000 17,000 - - -
Investment earnings 2,074 125 1,139 74 11 725
Other 538,319 - 538,319 - - -
Total revenues 2,298,242 289,669 960,126 53,907 7,484 987,056
124
EXPENDITURES
Current
Community and economic development 1,541,360 - 812,350 50,000 - 679,010
Debt service
Principal 255,000 255,000 - - - -
Interest and fees 41,940 28,575 - - - 13,365
Total expenditures 1,838,300 283,575 812,350 50,000 - 692,375
Net change in fund balances (deficits) 459,942 6,094 147,776 3,907 7,484 294,681
Fund balances (deficits) at beginning of year (790,633) 46,925 253,619 20,014 - (1,111,191)
Fund balances (deficits) at end of year $ (330,691) $ 53,019 $ 401,395 $ 23,921 $ 7,484 $ (816,510)
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, 2023
Net change in fund balances (deficits)—total governmental funds $ 459,942
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 255,000
Changes in accrual of interest and amortization of premiums and discounts
Change in accrued interest payable $ 1,300
Amortization of premiums 8,174 9,474
Change in net position of governmental activities $ 551,768
125
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126
SCHEDULE OF INDEBTEDNESS
127
City of Muskegon
SCHEDULE OF INDEBTEDNESS
June 30, 2023
Annual
Date Amount Interest Date of Interest
of Issue of Issue Rate Maturity 6/30/2022 6/30/2023 Payable
Business-Type Activities Bonds and Loans Payable:
Drinking Water State Revolving 3/2/2004 $ 13,900,000 2.13% 10/01/22 $ 790,000 $ - $ -
Fund 2.13% 10/01/23 810,000 810,000 43,988
2.13% 10/01/24 825,000 825,000 26,616
Type of debt: state loan 2.13% 10/01/25 840,000 840,000 8,925
Revenue Pledged: water system net revenues 3,265,000 2,475,000 79,529
Drinking Water State Revolving Fund* 8/30/2019 $ 1,600,000 2.00% 10/01/22 70,000 - -
2.00% 10/01/23 70,000 70,000 29,300
Type of debt: state loan 2.00% 10/01/24 70,000 70,000 27,900
Revenue Pledged: water system net revenues 2.00% 10/01/25 70,000 70,000 26,500
Forgiveness: 20% 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 95,000 95,000 1,900
1,535,000 1,465,000 293,300
Sanitary Sewer State Revolving Fund* 8/30/2019 $ 2,875,000 2.00% 10/01/22 120,000 - -
2.00% 10/01/23 125,000 125,000 51,450
Type of debt: state loan 2.00% 10/01/24 125,000 125,000 48,950
Revenue Pledged: sanitary sewer system net revenues 2.00% 10/01/25 130,000 130,000 46,400
Forgiveness: 75% 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% 10/01/36 160,000 160,000 15,000
2.00% 10/01/37 160,000 160,000 11,800
2.00% 10/01/38 165,000 165,000 8,550
2.00% 10/01/39 170,000 170,000 5,200
2.00% 10/01/40 175,000 175,000 1,750
2,755,000 2,635,000 501,850
Drinking Water State Revolving Fund* 9/30/2020 $ 3,844,750 2.00% 04/01/23 160,000 - -
2.00% 04/01/24 165,000 150,000 62,855
Type of debt: state loan 2.00% 04/01/25 170,000 150,000 59,908
Revenue Pledged: water system net revenues 2.00% 04/01/26 170,000 155,000 56,908
Forgiveness: 9% 2.00% 04/01/27 175,000 155,000 53,808
2.00% 04/01/28 180,000 160,000 50,708
2.00% 04/01/29 180,000 165,000 47,508
2.00% 04/01/30 185,000 170,000 44,208
2.00% 04/01/31 190,000 170,000 40,808
2.00% 04/01/32 195,000 175,000 37,408
2.00% 04/01/33 195,000 175,000 33,908
2.00% 04/01/34 200,000 180,000 30,408
2.00% 04/01/35 205,000 180,000 26,808
2.00% 04/01/36 210,000 185,000 23,208
2.00% 04/01/37 215,000 185,000 19,508
2.00% 04/01/38 220,000 190,000 15,808
2.00% 04/01/39 220,000 190,000 12,008
2.00% 04/01/40 59,101 200,000 8,208
2.00% 04/01/41 - 210,390 4,208
3,294,101 3,145,390 628,191
128
City of Muskegon
SCHEDULE OF INDEBTEDNESS—CONTINUED
June 30, 2023
Annual
Date Amount Interest Date of Interest
of Issue of Issue Rate Maturity 6/30/2022 6/30/2023 Payable
Business-Type Activities Bonds and Loans Payable—Continued:
Sanitary Sewer State Revolving Fund* 9/30/2020 $ 3,772,000 2.00% 04/01/23 $ 155,000 $ - $ -
2.00% 04/01/24 160,000 157,000 67,927
Type of debt: state loan 2.00% 04/01/25 165,000 162,000 64,810
Revenue Pledged: sanitary sewer system net revenues 2.00% 04/01/26 170,000 167,000 61,570
Forgiveness: 20% 2.00% 04/01/27 170,000 167,000 58,230
2.00% 04/01/28 175,000 172,000 54,890
2.00% 04/01/29 180,000 176,000 51,450
2.00% 04/01/30 185,000 181,000 47,930
2.00% 04/01/31 185,000 181,000 44,310
2.00% 04/01/32 190,000 186,000 40,690
2.00% 04/01/33 190,000 186,000 36,970
2.00% 04/01/34 195,000 191,000 33,250
2.00% 04/01/35 200,000 196,000 29,430
2.00% 04/01/36 205,000 201,000 25,510
2.00% 04/01/37 210,000 206,000 21,490
2.00% 04/01/38 215,000 211,000 17,370
2.00% 04/01/39 220,000 216,000 13,150
2.00% 04/01/40 225,000 221,000 8,830
2.00% 04/01/41 130,614 220,498 4,410
3,525,614 3,397,498 682,217
Drinking Water State Revolving Fund* 9/30/2022 $ 3,240,000 1.875% 10/01/23 - - -
1.875% 10/01/24 - - -
Type of debt: state loan 1.875% 10/01/25 - - -
Revenue Pledged: water system net revenues 1.875% 10/01/26 - 10,000 664
Forgiveness: 92.5% 1.875% 10/01/27 - 10,000 477
1.875% 10/01/28 - 10,000 289
1.875% 10/01/29 - 5,431 102
- 35,431 1,532
Sanitary Sewer State Revolving Fund* 9/30/2022 $ 3,535,000 1.875% 10/01/23 - 118,000 18,633
1.875% 10/01/24 - 120,000 16,421
Type of debt: state loan 1.875% 10/01/25 - 120,000 14,171
Revenue Pledged: sanitary sewer system net revenues 1.875% 10/01/26 - 125,000 11,921
Forgiveness: 20% 1.875% 10/01/27 - 125,000 9,577
1.875% 10/01/28 - 130,000 7,233
1.875% 10/01/29 - 130,000 4,796
1.875% 10/01/30 - 125,771 2,358
- 993,771 85,110
TOTAL BUSINESS TYPE ACTIVITIES BONDS AND LOAN PAYABLE: $ 14,374,715 $ 14,147,090 $ 2,271,729
*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 $ 4,535,000 3.00% 10/01/22 $ 300,000 $ - $ -
($132,903 unamortized premium) 3.00% 10/01/23 300,000 300,000 122,400
3.00% 10/01/24 320,000 320,000 110,000
Type of debt: limited general obligation bonds 4.00% 10/01/25 325,000 325,000 97,100
Revenue pledged: general revenues 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
3,510,000 3,210,000 645,600
129
City of Muskegon
SCHEDULE OF INDEBTEDNESS—CONTINUED
June 30, 2023
Annual
Date Amount Interest Date of Interest
of Issue of Issue Rate Maturity 6/30/2022 6/30/2023 Payable
Governmental Activities Bonds and Loan Payable—Continued:
Capital Improvement Bonds of 2019 10/9/2019 $ 19,420,000 1.83% 10/01/22 $ 250,000 $ - $ -
Convention Center 1.88% 10/01/23 300,000 300,000 602,740
($120,850 unamortized discount) 1.93% 10/01/24 320,000 320,000 596,645
2.00% 10/01/25 340,000 340,000 589,875
Type of debt: limited general obligation bonds 2.10% 10/01/26 360,000 360,000 582,273
Revenue Pledged: excise tax on hotel rooms levied by the 2.24% 10/01/27 380,000 380,000 573,795
County of Muskegon pursuant to Act 263 2.34% 10/01/28 405,000 405,000 564,429
2.43% 10/01/29 430,000 430,000 553,918
2.60% 10/01/30 455,000 455,000 542,412
2.60% 10/01/31 480,000 480,000 530,066
2.68% 10/01/32 510,000 510,000 516,544
2.78% 10/01/33 540,000 540,000 501,815
2.83% 10/01/34 570,000 570,000 485,822
2.93% 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
3.30% 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
3.48% 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
19,040,000 18,790,000 10,747,570
Capital Improvement Bonds of 2020 11/12/2020 $ 4,325,000 4.00% 10/01/22 335,000 - -
Series 2020A 4.00% 10/01/23 360,000 360,000 156,900
($580,424 unamortized premium) 4.00% 10/01/24 370,000 370,000 142,300
4.00% 10/01/25 385,000 385,000 127,200
Type of debt: limited general obligation bonds 4.00% 10/01/26 405,000 405,000 109,375
Revenue pledged: general revenues 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
5.00% 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
4,005,000 3,670,000 799,025
Capital Improvement Bonds of 2020 11/12/2020 $ 2,055,000 0.68% 10/01/22 85,000 - -
Series 2020B 0.68% 10/01/23 90,000 90,000 44,951
0.68% 10/01/24 90,000 90,000 44,038
Type of debt: limited general obligation bonds 1.35% 10/01/25 90,000 90,000 42,823
Revenue pledged: general revenues 1.35% 10/01/26 90,000 90,000 41,608
1.35% 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
2.00% 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
2.60% 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
1,970,000 1,885,000 504,789
130
City of Muskegon
SCHEDULE OF INDEBTEDNESS—CONTINUED
June 30, 2023
Annual
Date Amount Interest Date of Interest
of Issue of Issue Rate Maturity 6/30/2022 6/30/2023 Payable
Governmental Activities Bonds and Loan Payable—Continued:
Installment Purchase Agreement of 2021 9/15/2021 $ 1,370,873 1.78% 09/25/22 $ 268,269 $ - $ -
(fire tower ladder truck) 1.78% 09/25/23 273,023 273,023 13,717
1.78% 09/25/24 277,860 277,860 8,880
Type of debt: installment purchase agreements 1.78% 09/25/25 282,784 282,784 3,956
Revenue pledged: general revenues 1.78% 09/25/26 71,475 71,475 210
1,173,411 905,142 26,763
Installment Purchase Agreement of 2023 3/20/2023 $ 761,603 4.40% 04/20/24 - 140,780 29,187
(fire pumper truck) 4.40% 04/20/25 - 147,101 22,867
4.40% 04/20/26 - 153,706 16,262
Type of debt: installment purchase agreements 4.40% 04/20/27 - 160,607 9,361
Revenue pledged: general revenues 4.40% 04/20/28 - 125,169 2,306
- 727,363 79,983
TOTAL GOVERNMENTAL ACTIVITIES BONDS AND LOANS PAYABLE $ 29,698,411 $ 29,187,505 $ 12,803,730
TOTAL PRIMARY GOVERNMENT BONDS AND LOANS PAYABLE $ 44,073,126 $ 43,334,595 $ 15,075,459
Discretely Presented Component Unit Bonds and Loans Payable:
Local Development Finance Authority 3/20/2012 $ 4,100,000 3.00% 11/01/22 $ 255,000 $ - $ -
Smartzone Refunding Bonds 3.00% 11/01/23 265,000 265,000 20,775
($8,373 unamortized premium) 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 1,080,000 825,000 37,725
TOTAL DISCRETELY PRESENTED COMPONENT UNIT BONDS AND LOANS PAYABLE $ 1,080,000 $ 825,000 $ 37,725
TOTAL REPORTING ENTITY BONDS AND LOANS PAYABLE $ 45,153,126 $ 44,159,595 $ 15,113,184
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132
Statistical Section
This part of the City of Muskegon’s Annual Comprehensive 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 Annual Comprehensive
Financial Reports for the relevant year.
133
City of Muskegon
NET POSITION BY COMPONENT
Last Ten Fiscal Years
2014 2015 (a) 2016 2017 2018 (b) 2019 2020 2021 2022 2023
Governmental Activities
Net Investment in Capital Assets $ 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 $ 77,169,106
Restricted 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 7,228,272
Unrestricted 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) (23,043,056)
Total Governmental Net Position $ 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 $ 61,354,322
Business-type Activities
Net Investment in Capital Assets $ 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 $ 57,495,571
Restricted 599,500 599,500 599,500 599,500 599,500 599,500 599,500 822,000 822,000 822,000
Unrestricted 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 2,644,375
Total Business-type Activities Net Position $ 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 $ 60,961,946
Primary Government
Net Investment in Capital Assets $ 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 $ 134,664,677
Restricted 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 8,050,272
Unrestricted 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) (20,398,681)
Total Primary Government Net Position $ 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 $ 122,316,268
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 annual comprehensive financial reports for
the relevant year.
City of Muskegon
CHANGES IN NET POSITION
Last Ten Fiscal Years
2014 2015 (a) 2016 2017 2018 (b) 2019 2020 2021 2022 2023
EXPENSES
Governmental Activities
Public representation $ 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 $ 1,977,993
Administrative services 543,425 614,757 663,077 679,139 507,275 800,887 962,981 826,344 913,923 1,094,528
Financial services 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 6,145,566
Public safety 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 18,908,078
Public works 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 4,561,496
Highways, streets and bridges 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 7,480,486
Community and economic development 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 13,217,161
Culture and recreation 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 7,869,866
General administration 366,634 389,248 326,452 301,287 376,112 302,582 389,863 404,303 511,323 977,506
Interest on long-term debt 277,345 271,607 248,223 172,591 165,023 151,304 732,065 1,112,166 881,204 866,450
Total Governmental Activities Expenses 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 63,099,130
Business-type Activities
Water 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 10,758,625
Sewer 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 8,608,922
Marina and launch ramp 503,997 305,990 327,832 336,912 377,614 430,431 529,007 515,025 461,504 490,079
Total Business-type Activities Expenses 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 19,857,626
Total Primary Government Expenses 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 82,956,756
PROGRAM REVENUES
Governmental Activities
Charges for Services
Public representation 189,444 188,638 226,559 228,767 232,736 250,931 253,511 280,395 324,314 367,723
Administrative services 325,937 415,308 474,737 572,739 539,178 604,290 538,791 504,281 715,421 697,070
135
Financial services 871,632 823,547 925,474 895,924 903,322 921,748 913,968 988,501 1,085,220 1,129,918
Public safety 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 3,270,826
Public works 796,739 571,426 379,877 646,876 743,110 691,312 835,149 828,098 854,793 1,361,232
Highways, streets and bridges 351,962 258,475 234,861 256,190 188,248 191,883 193,267 187,478 522,779 243,319
Community and economic development 477,486 576,863 444,632 706,195 348,933 786,120 769,860 912,247 498,766 609,408
Culture and recreation 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 3,624,178
General administration 50,728 48,764 52,512 37,892 38,549 40,400 59,537 65,592 76,182 89,072
Operating grants and contributions 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 12,340,614
Capital grants and contributions 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 3,801,190
Total Governmental Program Revenues 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 27,534,550
Business-type Activities
Water 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 10,311,141
Sewer 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 10,177,369
Marina and launch ramp 228,339 255,638 287,547 278,753 325,917 298,312 74,659 178,706 292,416 329,518
Operating grants and contributions - - - 2,436 42,531 510,533 94,462 - 103,208 427,075
Capital grants and contributions 327,240 474,681 765,363 784,969 - - - 10,354,544 - 2,289,819
Total Business-type program revenues 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 23,534,922
Total Primary Government program revenues 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 51,069,472
NET (EXPENSE) REVENUE
Governmental Activities (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) (35,564,580)
Business-type Activities (813,821) (1,343,747) (904,650) (303,486) 469,478 (448,419) (1,985,873) 11,371,648 1,721,362 3,677,296
Total Primary Government net expense (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) (31,887,284)
City of Muskegon
CHANGES IN NET POSITION
Last Ten Fiscal Years
2014 2015 (a) 2016 2017 2018 (b) 2019 2020 2021 2022 2023
GENERAL REVENUES AND OTHER CHANGES IN NET POSITION
Governmental Activities
Property taxes $ 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 $ 10,259,863
Income taxes 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 12,196,364
Franchise fees 358,754 369,965 372,117 378,955 368,495 380,343 361,405 374,219 369,420 349,044
Grants and contributions not restricted for specific programs 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 13,168,368
Unrestricted investment earnings 146,590 99,733 189,408 106,653 92,771 546,533 568,408 229,177 (644,067) 765,542
Miscellaneous 124,085 805,432 626,014 512,738 545,536 550,381 577,677 370,268 918,179 688,390
Gain on sale of capital asset 23,836 20,302 99,031 844,062 712,415 1,333,414 317 2,641,064 1,122,888 2,724,195
Transfers - - - - - - - (35,000) 35,000 (1,341,313)
Total Governmental Program Revenues 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 38,810,453
Business-type Activities
Unrestricted investment earnings 31,251 29,879 25,688 25,277 28,550 24,063 9,181 9,918 23,856 27,463
Transfers - - - - - - - 35,000 (35,000) 1,341,313
Total Business-type program revenues 31,251 29,879 25,688 25,277 28,550 24,063 9,181 44,918 (11,144) 1,368,776
Total Primary Government program revenues 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 40,179,229
CHANGE IN NET POSITION
Governmental Activities (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 3,245,873
Business-type Activities (782,570) (1,313,868) (878,962) (278,209) 498,028 (424,356) (1,976,692) 11,416,566 1,710,218 5,046,072
Total Primary Government $ (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 $ 8,291,945
(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.
136
SOURCE: The information in these schedules (unless otherwise noted) is
derived from the annual comprehensive financial reports for the relevant year.
City of Muskegon
FUND BALANCE OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
General fund
Nonspendable $ 300,952 $ 220,178 $ 232,332 $ 209,353 $ 222,458 $ 241,684 $ 280,986 $ 269,920 $ 881,961 $ 873,226
Restricted - - - - - - - 66,965 8,701 201,500
Committed - - - - - - - 39,000 189,037 295,113
Assigned 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 2,790,501
Unassigned 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 5,857,568
Total general fund $ 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 $ 10,017,908
All other governmental funds
Nonspendable $ 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 $ 1,749,272
Restricted 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 6,373,122
Assigned 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 3,823,737
Unassigned (100,054) - - - - - (1,601,331) (2,919,404) - -
Total all other governmental funds $ 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 $ 11,946,131
SOURCE: The information in these schedules
(unless otherwise noted) is derived from the annual
137
comprehensive financial reports for the relevant
year.
City of Muskegon
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Revenues
Taxes $ 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 $ 21,804,988
Intergovernmental 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 28,839,074
Charges for services 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 7,202,418
Other 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 7,063,899
Total revenues 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 64,910,379
Expenditures
Public representation 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 1,905,638
Administrative services 497,025 554,330 577,454 624,284 537,913 739,301 844,270 783,403 945,841 1,079,807
Financial services 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 6,089,585
Public safety 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 17,798,350
Public works 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 4,239,317
Highways, streets and bridges 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 3,355,487
Community and economic development 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 13,450,233
Culture and recreation 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 6,610,019
Other governmental functions 643,666 369,408 305,807 280,416 355,241 281,711 371,461 380,232 485,024 950,789
Debt service
138
Principal 402,492 417,842 428,199 283,563 288,934 294,313 818,285 2,813,804 1,342,462 1,272,509
Interest 278,412 272,946 257,516 211,242 197,723 189,905 543,740 943,216 1,011,004 985,750
Issuance costs - - 97,578 - - - 70,525 140,750 1,000 -
Capital outlay 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 6,935,934
Total expenditure 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 64,673,418
Excess of revenues over (under) expenditures (817,667) 2,039,529 (1,397,999) 497,687 992,021 (2,696,819) (17,167,117) (14,680,012) 1,461,979 236,961
Other financing sources (uses)
Transfers in 743,035 853,910 1,563,094 1,805,000 1,370,000 1,210,236 2,017,077 895,000 9,832,799 6,116,212
Transfers out (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) (8,092,525)
Long-term debt issued - - 97,578 - - - 21,691,740 7,152,424 1,370,873 761,603
Proceeds from sale of capital assets 176,887 244,685 190,957 1,529,325 741,803 1,541,041 491,924 2,908,552 1,204,675 2,976,733
Total other financing sources (uses) 148,841 155,662 213,535 1,516,325 726,803 1,541,041 22,163,664 9,400,976 2,210,548 1,762,023
Net change in fund balances $ (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 $ 1,998,984
Debt service as a percentage of noncapital
expenditures 2.43% 2.42% 2.09% 1.52% 1.36% 1.37% 3.40% 9.06% 4.60% 3.91%
SOURCE: The information in these schedules (unless
otherwise noted) is derived from the annual comprehensive
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
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%
2023 9,847,883 15.2% 11,957,105 18.4% 28,839,074 44.4% 7,202,418 11.1% 3,074,012 4.7% 604,038 0.9% 1,233,994 1.9% 2,151,855 3.3% 64,910,379 7.4%
SOURCE: The information in these schedules (unless otherwise noted) is derived from the annual comprehensive 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
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 76.41%
2022 409,432,249 - 142,894,033 53,700,376 606,026,658 73,772,100 679,798,758 15,713,408 1,575,400 - 17,288,808 696,087,566 12.7971 75.94%
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
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
140
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
2022 576,926,300 - 185,097,800 58,746,100 820,770,200 73,763,800 894,534,000 16,227,500 1,575,400 - 17,802,900 912,336,900 1,824,673,800
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
6/30/2023 6/30/2014
Percent of Percent of
Taxable Total Taxable Taxable Total Taxable
Taxpayer Valuation Rank Valuation Valuation Rank Valuation
Consumers Energy $ 20,171,325 1 2.80% $ 43,086,282 1 7.0%
DTE Gas Company 16,026,939 2 2.23% 6,655,800 4 1.1%
James Street Capital Holdings 10,911,200 3 1.52%
Muskegon SC Holdings LLC 6,601,287 4 0.92% 3,971,900 7 0.6%
Michigan Electric Transmission 5,659,600 5 0.79%
Glen Oaks Apartments LLC 3,720,098 6 0.52% 3,432,300 9 0.6%
Mercy Health Partners 3,335,100 7 0.46%
141
Core Sherman LLC 3,284,412 8 0.46%
Verplank Port Facility LLC 2,941,212 9 0.41%
Hinman Lake LLC 2,568,825 10 0.36%
Adac Plastics 8,975,700 2 1.5%
Esco Company 6,860,454 3 1.1%
GE Aviation 5,526,800 5 0.9%
Fleet Engineers 4,176,400 6 0.7%
Lorin Industries 3,837,267 8 0.6%
Coles Quality Foods 3,263,824 10 0.5%
Total - 10 Largest 75,219,998 10.46% 89,786,727 14.7%
Total - All Other 644,226,433 89.54% 521,534,340 85.3%
$ 719,446,431 100.0% $ 611,321,067 100.0%
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
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
2022 9.7880 0.0727 2.9364 12.7971 2.3516 0.4999
Overlapping - County-Wide Rates
Muskegon Intermediate Special Vocational Community MAISD Community
Year County School Education Education College Gen Ed College Debt
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
2022 6.7878 0.4518 2.2597 0.9827 2.1693 0.9831 0.3400
Overlapping - School District Grand Total
State Non-
Year Operating Debt Total Education Homestead Homestead
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
2022 17.3754 8.9712 26.3466 6.0000 44.5942 61.9696
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
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%
2022 11,061,640 9,944,396 89.9% 904,123 10,848,519 98.1% - 49,489 96,863 1.32%
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 2013 - 2023
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
INCOME TAX $
$4,000,000
$2,000,000
$-
2013 - 2014 2014 - 2015 2015 - 2016 2016 - 2017 2017 - 2018 2018 - 2019 2019-20 2020-21 2021-22 2022-23
Resident $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 $4,416,692
Non-Resident 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 5,398,179
Other 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 2,142,234
Total Income Tax $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 $11,957,105
144
FISCAL YEAR
NUMBER OF RETURNS 2013 - 2023
20,000
18,000
1,750
1,750 1,750 1,750
1,650 1,650
16,000
1,650
14,000 1,650 1,650
1,650
12,000
11,009 10,631 10,713 10,578 10,278 10,256
10,000 Series3
9,426
8,524 8,343
8,301 Series2
RETURNS
8,000
Series1
6,000
4,000
5,463 5,458 5,337 5,464 5,352 5,493
4,852 4,302 4,732 4,868
2,000
-
2013 - 2014 2014 - 2015 2015 - 2016 2016 - 2017 2017- 2018 2018-19 2019-20 2020-21 2021-22 2022-23
FISCAL YEAR
TOTAL INCOME TAX COLLECTED AND NUMBER OF RETURNS FILED - DATA
Last Ten Fiscal Years
Income Tax 2013 - 2023
Year 2013 - 2014 2014 - 2015 2015 - 2016 2016 - 2017 2017 - 2018 2018 - 2019 2019-20 2020-21 2021-22 2022-23
Resident $ 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 $ 4,416,692
Non-Resident 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 5,398,179
Other 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 2,142,234
Total Income Tax $ 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 $ 11,957,105
Number of Returns 2013-2023
Year 2013 - 2014 2014 - 2015 2015 - 2016 2016 - 2017 2017- 2018 2018-19 2019-20 2020-21 2021-22 2022-23
Resident 5,463 5,458 5,337 5,464 5,352 5,493 4,852 4,302 4,732 4,868
Non-Resident 11,009 10,631 10,713 10,578 10,278 10,256 9,426 8,301 8,524 8,343
Other 1,750 1,750 1,750 1,750 1,650 1,650 1,650 1,650 1,650 1,650
Total Returns 18,222 17,839 17,800 17,792 17,280 17,399 15,928 14,253 14,906 14,861
145
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
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
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
146
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
2023 28,147,477 1,632,505 - 29,779,982 - 14,147,090 14,147,090 43,927,072 1,170
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, 2023
Total Debt Debt Supported by City
Name of Governmental Unit Outstanding Self Supporting General Revenues
Direct Debt
City of Muskegon:
Revenue Bonds $ 14,147,090 $ 14,147,090 $ -
Capital Improvement Bonds 28,147,477 - 27,555,000
Installment Purchase Agreements 1,632,505 - 1,632,505
Component Unit Debt:
Local Development Finance Authority 833,373 833,373 -
Total City Direct Debt $ 44,760,445 $ 14,980,463 $ 29,187,505
City Share as
Gross Percent of Gross Net
Overlapping Debt
Muskegon School District $ 79,755,000 95.82% $ 76,421,241
Orchard View School District 33,412,823 16.58% 5,539,846
Reeth's Puffer School District 56,263,184 0.78% 438,853
Hackley Public Library 1,585,000 95.82% 1,518,747
Muskegon County 111,815,512 12.97% 14,502,472
Muskegon Community College 26,440,000 12.97% 3,429,268
Total Overlapping Debt $ 309,271,519 101,850,427
Total City Direct and Overlapping Debt $ 131,037,932
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
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Debt Limit $ 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 $ 167,769,346
Total net debt applicable to limit 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 30,613,355
Legal debt margin $ 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 $ 137,155,991
Total net debt applicable to the limit as 20.82% 19.46% 18.56% 16.78% 14.41% 8.42% 25.70% 24.72% 21.81% 18.25%
a percentage of debt limit
Legal Debt Margin Calculation for 2022:
Assessed Valuation: $ 1,677,693,463
Legal Debt Limit (10% ) 167,769,346
Total Indebtedness: $ 44,760,445
Debt not Subject to Limitation:
Paid by Special Assessment -
Revenue Bonds (14,147,090)
Debt Subject to Limitation 30,613,355
Legal Debt Margin $ 137,155,991
148
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
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
2023 10,752,667 8,581,636 2,171,031 1,020,000 157,421 1,177,421 1.84
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
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
2023 10,190,360 7,738,670 2,451,690 275,000 124,455 399,455 6.14
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
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%
2023 38,220 987,376,731 25,834 35.3 3,353 1,050 158,396,766 8.8%
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
2023 2014
Percentage Percentage
of Total of Total
City City
Employer Employees Rank Employment Employees Rank Employment
Mercy General Health Partners 4,003 1 32.72% 3,881 1 26.3%
ADAC Automotive 1,028 2 8.40% 1,000 3 6.8%
County of Muskegon 1,000 3 8.17% 1,250 2 8.5%
G.E. Aviation 666 4 5.44% 647 6 4.4%
Muskegon Public School District 449 5 3.67% 676 5 4.6%
Port City Group Companies 421 6 3.44% 622 7 4.2%
Muskegon Community College 380 7 3.11% 209 10 1.4%
KL Outdoors 375 8 3.07%
151
Muskegon Area Intermediate School District 341 9 2.79%
Knoll Inc 270 10 2.21% 375 8 2.5%
State of Michigan 750 4 5.1%
SAF Holland USA 350 9 2.4%
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 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Administration 0.40 - - - - - - - - -
Affirmative Action 1.10 1.30 1.30 1.46 0.40 1.00 1.00 1.00 1.00 1.00
Cemetaries 1.25 1.25 1.25 1.25 1.25 1.25 2.25 2.25 2.25 2.25
City Clerk & Elections 3.00 3.00 3.00 3.54 3.80 3.80 4.80 5.80 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 1.05 1.00 1.00 1.00
City Manager's Office 2.25 2.05 2.05 1.75 2.75 2.75 2.75 3.30 3.30 4.30
City Treasurer's Office 4.50 5.50 5.50 5.50 5.50 5.50 5.50 5.30 5.30 5.50
Environmental Services 5.00 2.00 2.00 2.00 2.00 - - - - -
Farmers Market 0.05 0.05 0.05 - 0.20 1.20 1.20 0.70 0.70 1.20
Finance Administration 2.00 3.00 3.00 3.00 3.60 3.00 3.45 3.70 3.70 3.70
Fire 28.83 32.00 35.00 35.00 35.00 26.00 29.00 29.50 29.50 29.50
Fire Safety Inspections 0.83 - - - - - - - - -
Income Tax Administration 4.50 3.50 3.50 3.50 3.50 3.50 3.50 3.70 3.70 3.50
Information Systems 3.00 3.00 3.00 3.00 3.50 3.50 3.50 3.50 3.50 3.50
Parks 6.00 6.00 6.00 7.05 7.05 10.05 10.05 10.05 10.05 11.00
Planning, Zoning & Economic Development 3.00 3.40 3.40 3.45 3.45 5.45 6.00 7.00 7.00 6.75
Police 87.34 88.00 88.00 88.00 88.00 89.00 89.00 91.00 91.00 92.00
Sanitation 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20
152
Senior Transit 0.05 - - - - - - - - -
MVH-Major Streets 10.70 10.70 10.70 10.70 10.70 12.20 12.20 13.20 13.20 12.75
MVH-Local Streets 6.70 6.70 6.70 6.70 6.70 7.20 7.20 7.20 7.20 6.75
Community Development 4.00 4.00 4.00 4.00 3.55 3.55 4.30 5.30 5.30 5.30
Sewer Maintenance 9.80 9.80 9.80 9.80 9.80 9.80 10.80 10.95 10.95 10.70
Water Filtration 10.00 10.00 10.00 10.00 10.00 10.00 11.00 12.15 12.15 11.90
Water Maintenance 11.75 11.75 11.75 11.75 11.75 11.75 12.75 14.90 14.90 16.65
Hartshorn Marina Fund 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.25
Mercy Health Arena - - - - - - 3.00 6.00 6.00 6.50
Public Service Building 8.45 8.50 8.50 8.50 8.50 8.50 8.75 8.75 8.75 9.50
Engineering 4.95 4.95 4.95 4.95 4.95 5.95 5.20 4.25 4.25 5.50
Equipment 6.25 6.25 6.25 6.25 6.25 6.25 6.25 6.25 6.25 6.25
227.00 228.00 231.00 232.45 233.50 232.50 245.25 257.50 257.50 263.50
SOURCE: City of Muskegon Finance Department
City of Muskegon
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
Function/Program 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Administrative Services
Elections
Number of registered voters 26,025 24,014 24,005 24,612 26,136 25,182 28,127 27,889 28,004 28,004
Number of votes cast:
Last general election 3,029 7,763 2,547 13,179 15,271 11,407 3,105 15,156 15,519 15,519
Last city election 3,029 7,763 2,547 13,179 2,254 1,938 3,105 2,968 4,459 4,459
Percentage of registered voters voting:
Last general election 12% 32% 11% 54% 58% 45% 11% 54% 55% 55%
Last city election 12% 32% 11% 54% 9% 8% 11% 12% 16% 16%
Financial Services
Property Tax Bills 15,211 14,528 14,611 14,243 14,229 14,180 15,090 15,117 15,103 15,145
Income Tax Returns 18,222 17,839 17,800 17,792 17,280 17,399 15,928 14,253 14,906 14,861
Paper Check Issued to Vendors 1,404 1,527 1,608 1,675 1,782 1,863 1,946 1,676 1,853 1,689
Electronic Payments to Vendors 1,579 1,471 1,849 1,998 2,104 2,307 2,494 2,465 3,654 3,948
153
Public Safety
Fire Protection
Number of firefighter and officer positions 38 35 35 35 23 29 26 29 25 26
Number of emergency calls 4,354 4,881 4,938 4,895 4,948 5,106 5,147 4,203 6,018 5,729
Police Protection
Number of sworn officer positions 76 76 76 75 79 80 80 89 80 80
Part I (Major) Crimes 2,240 2,107 1,989 2,816 2,357 1,728 1,621 1,442 808 1,364
Public Works
Refuse Collected (Tons per Year) 10,217 10,512 10,994 11,009 10,801 10,753 11,534 12,289 10,326 11,233
Recyclables Collected (Tons per Year) - - - - - - 160 224 341 356
Yard Waste - - - - - - - - - 7,252
Water & Sewer
Average daily water consumption (GPD) 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 10,950,579
Number of consumers 13,086 13,223 13,307 13,248 13,104 13,343 13,422 12,660 12,821 12,876
Water main breaks repaired 30 15 16 12 15 11 17 13 15 7
Sewer flows (Millions Gallons per Year) 1,833 2,013 1,794 1,815 1,832 2,048 2,138 1,596 1,462 1,464
Sewer Service Calls 532 501 521 462 451 443 475 541 426 463
SOURCE: City of Muskegon Departments
City of Muskegon
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
Function/Program 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
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 196.95 196.95 196.95 196.95 196.95 197.19 187.34 187.34 187.28 187.28
Number of streetlights 2,838 2,838 2,900 2,984 2,967 2,930 2,995 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 2 2 2
Sewer
Sanitary sewers (miles) 177.04 177.04 177.04 177.04 177.04 177.04 177.04 176.69 166.63 166.63
154
Storm sewers (miles) 184.25 184.35 184.35 184.35 184.35 184.35 184.35 147.58 148.38 148.38
Water
Water mains (miles) 195.95 195.95 195.95 195.95 195.95 195.27 195.27 213.92 214.70 214.70
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 (Government Auditing Standards), 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 the City of Muskegon as of and for the year ended
June 30, 2023, and the related notes to the financial statements, which collectively comprise the City of
Muskegon’s basic financial statements, and have issued our report thereon dated December 27, 2023.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the 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 the City of Muskegon’s internal control. Accordingly, we do not
express an opinion on the effectiveness of the 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.
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156
BRICKLEY DELONG
City Commission
City of Muskegon
Page 2
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Muskegon’s financial statements are free
from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
financial statements. However, providing an opinion on compliance with those provisions was not an objective of
our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of
noncompliance or other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the
results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on
compliance. This report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not
suitable for any other purpose.
Muskegon, Michigan
December 27, 2023
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, 2023. The 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, the 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, 2023.
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 of our report.
We are required to be independent of the 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 the 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 the City of Muskegon’s
federal programs.
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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 Responsibilities 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 the 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 the 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 the 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 the 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 the 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 27, 2023
160
City of Muskegon
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the year ended June 30, 2023
Entitlement 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, 2022 Transfers (Cash Basis) Expenditures June 30, 2023 Subrecipients Notes
U.S. Department of Housing and Urban Development
Direct programs
CDBG - Entitlement Grants Cluster
Community Development Block Grants/Entitlement Grants 14.218
B-17-MC-26-0026 $ 871,542 $ 9,949 $ - $ 9,949 $ - $ - $ -
B-18-MC-26-0026 937,658 71,725 - 71,725 - - -
B-19-MC-26-0026 973,451 20,709 - 61,460 47,463 6,712 -
B-20-MC-26-0026 994,698 15,044 - 191,958 187,558 10,644 -
COVID-19 - B-20-MW-26-0026 794,564 36,010 - 86,855 52,890 2,045 -
B-21-MC-26-0026 988,508 21,133 - 59,485 70,675 32,323 -
B-22-MC-26-0026 912,894 - - 736,892 792,794 55,902 130,692
Program Income 23,055 - - 23,055 23,055 - -
Total CDBG - Entitlement Grants Cluster 6,496,370 174,570 - 1,241,379 1,174,435 107,626 130,692
Home Investment Partnerships Program 14.239
M-19-MC-26-0215 334,818 9,819 - (21,596) (25,174) 6,241 - 3
M-20-MC-26-0215 343,362 5,584 - (145,763) (151,347) - - 3
M-21-MC-26-0215 336,456 42,310 - 285,669 243,808 449 -
161
M-22-MC-26-0215 339,650 - - 5,189 16,250 11,061 -
Program Income 602,839 - - 602,839 602,839 - -
Total Home Investment Partnerships Program 1,957,125 57,713 - 726,338 686,376 17,751 -
Healthy Homes Production Program 14.913
MIHHP0083-22 1,500,000 2,015 - 184,979 283,522 100,558 -
Total U.S. Department of Housing and Urban Development 9,953,495 234,298 - 2,152,696 2,144,333 225,935 130,692
City of Muskegon
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS—Continued
For the year ended June 30, 2023
Entitlement 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, 2022 Transfers (Cash Basis) Expenditures June 30, 2023 Subrecipients Notes
U.S. Department of Justice
Direct programs
Bulletproof Vest Partnership Program 16.607
2020 Grant $ 11,721 $ 6,615 $ - $ 11,722 $ 5,107 $ - $ -
2021 Grant 4,410 4,410 - 551 551 4,410 -
16,131 11,025 - 12,273 5,658 4,410 -
Edward Byrne Memorial Justice Assistance Grant Program 16.738
2019-DJ-BX-0927 35,195 - - 2,400 2,400 - 2,400
Criminal and Juvenile Justice and Mental Health Collaboration Program 16.745
2019-MO-BX-0006 100,000 - (1,913) (1,574) 339 - - 4
Total direct programs 151,326 11,025 (1,913) 13,099 8,397 4,410 2,400
Passed through Michigan Department of Health and Human Services
Violence Against Women Formula Grants 16.588
E20221719-001 282,512 15,779 - 49,793 34,014 - -
E20231736-00 282,512 - - 105,036 123,788 18,752 -
565,024 15,779 - 154,829 157,802 18,752 -
Passed through Ottawa County
Edward Byrne Memorial Justice Assistance Grant Program 16.738
2018-MU-BX-0886 16,284 - - 16,284 16,284 - -
162
Total U.S. Department of Justice 732,634 26,804 (1,913) 184,212 182,483 23,162 2,400
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 (13,647,865) - - 7,074,143 (6,573,722) -
City of Muskegon
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS—Continued
For the year ended June 30, 2023
Entitlement 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, 2022 Transfers (Cash Basis) Expenditures June 30, 2023 Subrecipients Notes
Environmental Protection Agency
Passed through Department of Environment, Great Lakes, and Energy
Clean Water State Revolving Fund Cluster
Capitalization Grants for Clean Water State Revolving Funds 66.458
5679-01 $ 4,715,000 $ 50,101 $ - $ 60,110 $ 10,009 $ - $ -
5767-01 3,535,000 - - 718,207 718,207 - -
Total Environmental Protection Agency 8,250,000 50,101 - 778,317 728,216 - -
U.S. Department of Health and Human Services
Passed through Michigan Department of Health and Human Services
Children's Health Insurance Program 93.767
E20221736-00 880,100 74,724 - 258,465 183,741 - -
E20231461-00 1,395,100 - - 560,849 810,467 249,618 -
Total Department of Health and Human Services 2,275,200 74,724 - 819,314 994,208 249,618 -
TOTAL FEDERAL ASSISTANCE $ 44,093,223 $ (13,261,938) $ (1,913) $ 3,934,539 $ 11,123,383 $ (6,075,007) $ 133,092
163
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, 2023
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, 2023. 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. Certain program costs in previous years were determined to not be allowable in the current year and were returned to the Home Investment Partnerships Program. The
Department of Housing and Urban Development treated these returned funds as negative draws as the funds are available to spend again and they are reported
accordingly in the Schedule of Expenditures of Federal Awards.
4. The beginning accrual for the Criminal and Juvenile Justice and Mental Health Collaboration Program was restated to reflect amounts that were unspent at the end of the
previous year.
164
5. 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, 2023 and federal expenditures per the Schedule of Expenditures of Federal Awards.
Federal revenues per City of Muskegon financial statements
General Fund $ 182,483
Other governmental funds 9,586,790
9,769,273
Plus drawdowns on federal loans 728,216
Plus program income 625,894
Federal expenditures per the Schedule of Expenditures of Federal Awards $ 11,123,383
City of Muskegon
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For the year ended June 30, 2023
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 or Cluster
U.S. Department of Housing and Urban Development
14.218 • Community Development Block Grants/Entitlement
Grants
21.027 U.S. Department of Treasury
• Coronavirus State and Local Fiscal Recovery Funds
93.767 U.S. Department of Health and Human Services
• Children’s Health Insurance Program
5. Dollar threshold used to distinguish between type A and type B programs: $750,000
6. Auditee qualified as low-risk auditee? X yes 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
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Assessor/
Equalization Co.
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Cemetery/Forestry
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City Manager
(231)724-6724
FAX (231)722-1214
Clerk
(231)724-6705 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
FAX (231)724-4178
Comm. & Neigh.
Services December 27, 2023
(231)724-6717
FAX (231)726-2501
Computer Info.
Technology U.S. Department of Housing and Urban Development
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FAX (231)722-4301
Engineering
(231)724-6707 City of Muskegon respectfully advises you that there were no audit findings reported in our single
FAX (231)727-6904
audit report, dated December 21, 2022, for the year ended June 30, 2022.
Finance
(231)724-6713
FAX (231)726-2325 Sincerely,
Fire Department
(231)724-6795
FAX (231)724-6985
Human Resources Ken Grant
Co. (Civil Service)
(231)724-6442 Finance Director
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Income Tax
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Mayor’s Office
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SafeBuilt
(Inspections)
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Treasurer
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Water Billing
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Water Filtration
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FAX (231)755-5290 168
Affirmative Action
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Assessor/
Equalization Co.
(231)724-6386
FAX (231)724-1129
Cemetery/Forestry
(231)724-6783
FAX (231)724-4188
City Manager
(231)724-6724
FAX (231)722-1214
Clerk
(231)724-6705 CORRECTIVE ACTION PLAN
FAX (231)724-4178
Comm. & Neigh.
Services December 27, 2023
(231)724-6717
FAX (231)726-2501
Computer Info.
Technology U.S. Department of Housing and Urban Development
(231)724-4126 Washington D.C.
FAX (231)722-4301
Engineering
(231)724-6707 City of Muskegon respectfully submits the following Corrective Action Plan for the year
FAX (231)727-6904
ended June 30, 2023.
Finance
(231)724-6713
FAX (231)726-2325 Name and address of independent public accounting firm:
Fire Department Brickley DeLong, P.C.
(231)724-6795 P.O. Box 999
FAX (231)724-6985
Muskegon, Michigan 49443]
Human Resources
Co. (Civil Service) Audit period: June 30, 2023
(231)724-6442
FAX (231)724-6840
The findings from the Schedule of Findings and Questioned Costs for the year ended June
Income Tax 30, 2023 provided no findings in either Section II or Section III. Accordingly, there are no
(231)724-6770
FAX (231)724-6768 matters requiring 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 There were no findings in relation to the major federal award programs.
FAX (231)722-5140
Public Works If the U.S. Department of Housing and Urban Development has questions regarding this
(231)724-4100
FAX (231)722-4188 plan, please call Ken Grant at (231) 724-6932.
SafeBuilt
(Inspections)
(231)724-6715 Sincerely,
FAX (231)728-4371
Treasurer
(231)724-6720
FAX (231)724-6768
Water Billing
Ken Grant
(231)724-6718 Finance Director
FAX (231)724-6768
Water Filtration
(231)724-4106
FAX (231)755-5290 169
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