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HomeMy WebLinkAbout2003 Annual Financial ReportCity of Livonia, Michigan Financial Report with Supplemental Information November 30, 2003 planrc 11101 City of Livonia, Michigan Contents Report Letter 1-2 Management's Discussion and Analysis 3-6 Basic Financial Statements Govemment-wide Financial Statements: Statement of Net Assets 10 Statement of Activities 11-12 Fund Financial Statements: Governmental Funds: 23 Balance Sheet 13 Reconciliation of Fund Balances of Governmental Funds to Net Assets 2659 of Governmental Activities 14 Statement of Revenue, Expenditures, and Changes in Fund Balances 15 Reconciliation of the Statement of Revenue, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 16 Propnetary Funds: Statement of Net Assets 17 Statement of Revenue, Expenses, and Changes in Net Assets 18 Statement of Cash Flows 19-20 Fiduciary Funds: Statement of Net Assets 21 Statement of Changes in Net Assets - Pension and Other Employee Benefits Trust Funds 22 Conponent Units: Statement of Net Assets 23 Statement of Activities 24-25 Notes to Financial Statements 2659 Required Supplemental Information Budgetary Companson Schedule - General Fund 60-62 Budgetary Companson Schedule - Major Special Revenue Funds 63-64 plane n City of Livonia, Michigan Contents (Continued) Required Supplemental Information (Continued) Pension System: Schedule of Funding Progress 65 Schedule of Employer Contributions 65 Postemployment Benefit Plans: Schedule of Funding Progress 66 Schedule of Employer Contributions 66-67 Notes to Required Supplemental Information 68-69 Other Supplemental Information Nonmajor Governmental Funds: Combining Balance Sheet 70.73 Combining Statement of Revenue, Expenditures, and Changes in Fund Balances 7477 Fiduciary Funds - Pension and Other Employee Benefit Trust Funds Combining Statement of Net Assets 78 Combining Statement of Changes in Net Assets 79 plane n Independent Auditors Report To the Honorable Mayor and Members of the City Council City of Livonia, Michigan We have audited the accompanying financial statements of the governmental activities, the business -type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Livonia, Michigan as of and for the year ended November 30, 2003, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City of Livonia, Michigan's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairy, in all material respects, the respective financial position of the governmental activities, the business -type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Livonia, Michigan as of November 30, 2003 and the respective charges in financial position and cash flows, where applicable, thereof forthe yearthen ended, in conformity with accounting principles generally accepted in the United States of America. The management's discussion and analysis, pension system schedule of funding progress and employer contributions, postemployment benefit plans schedule of funding progress and employer contributions, and the budgetary comparison schedules, as identified in the table of contents, are not a required part of the basic financial statements but are supplemental information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management, regarding the methods of measurement and presentation of the required supplemental information. However, we did not audit the information and express no opinion on it. To the Honorable Mayor and Members of the City Council City of Livonia, Michigan Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Livonia, Michigan's basic financial statements. The accompanying other supplemental information, as identified in the table ofcontents, is presented for the purpose of additional analysis and is not a required part of the basic financial statements. The other supplemental information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. As described in Note 1, the City has implemented a new financial reporting model, as required by the provisions of GASB Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, and related statements, as of December 1, 2002. In accordance with Goverment Auditing Standard's, we have also issued our report dated February 23, 2004 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contacts, and grants. That report is an integral part of an audit performed in accordance with Goverment Auditing Standards and should be read in conjunction with this report in considering the results of our audit. I &"W, Ptc e February 23, 2004 plane n City of Livonia, Michigan Management's Discussion and Analysis Overview of the Financial Statements The City of Livonia's 2003 annual report follows a different format than in previous years. This annual report consists of four parts: (1) management's discussion and analysis, (2) basic financial statements, (3) required supplementary information, and (4) other supplemental information that presents combining statements for nonmajor governmental funds and fiduciary funds. 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 are intended to provide longer-term information about the City's overall financial status. The remaining statements are fund financial statements that focus on individual parts of the City's government, reporting the City's operations in more detail than the government -wide statements. Government -wide Financial Statements The government -wide financial statements report information about the City as a whole using accounting methods similar to those used by private -sector companies. The statement of net assets includes all of the government's assets and liabilities. The statement of activities includes all of the current year's revenues and expenses regardless of when cash is received or paid. The two government -wide statements report the City's net assets and how they have changed. Net assets, the difference between the Citys assets and liabilities, is one way to measure the City's financial health or position. The government -wide financial statements of the City are divided into three categories: 0 Government Activities - Most of the City's basic services are included here, such as the police, fire, public works, pads departments, and general administration. Property taxes, state -shared revenue, and charges for services provide most of the funding for these activities. 0 Business -type Activities - The City charges fees to customers to cover the costs of certain services it provides. The City's water and sewer system, golf course operations, and nonfederal senior housing are treated as business -type activities. 0 Component Units - The City includes two other entities in its report, the Plymouth Road Development Authority and the Economic Development Corporation. Although legally separate, these 'component units" are important because the City is financially accountable for them, including debt, which is issued on behalf of the authorities by the City. plane City of Livonia, Michigan Management's Discussion and Analysis (Continued) Fund Financial Statements The fund financial statements provide more detailed information about the City's most significant funds - not the City as a whole. Funds are accounting tools that the City uses to keep track of specific sources of funding and spending for particular purposes. Some funds are required by State law and bond covenants. Other funds are established to control and manage money for particular purposes. The City has three kinds of funds: 0 Governmental Funds - Most of the City's basic services are included in governmental funds, which focus on how cash and other financial assets that can be converted to cash, flow in and out; and the balance left at year end that is available for spending. The governmental fund statements provide a detailed short-term view that helps the reader determine if there are more or fewer financial resources available to spend in the near future to finance the Citys programs. 0 Proprietary Funds - Services which are intended to be entirely self-supporting by customer fees are generally reported in proprietary funds. Proprietary fund statements, such as government -wide statements, provide both short- and long-term financial information. 0 Fiduciary Funds - The City is responsible for ensuring that the assets in these funds are used for their intended purposes. These activities are excluded from the government -wide financial statements because the City cannot use these assets to finance its operations. The City as a Whole The City's combined net assets are $226 million at November 30, 2003. Business -type activities make up $84.9 million and governmental activities make up $141.1 million of the total. Future reports will provide an analysis of comparative data from the statement of activities. Comparative data is not required during the first year of reporting under GASB Statement No. 34, and therefore, a comparative condensed statement of activities is not part of the management's discussion and analysis. In a condensed format, the table below shows a comparison of the net assets as of November 30, 2003 to the prior year. plane n City of Livonia, Michigan Management's Discussion and Analysis (Continued) City of Livonia - Net Assets The City's assets exceed its liabilities at the end of the fiscal year by $226 million (net assets). However, a major portion (79 percent) of the City's net assets represents its investments in capital assets (e.g., land, roads, infrastructure, buildings, and equipment) less any related debt used to acquire or construct these assets. The City uses these physical assets to provide services to its citizens. These assets are not liquid and not available for future spending. Unrestricted net assets of the City decreased from $10.9 million at November 30, 2002 to $9.5 million at the end of this year. The amount represents the part of net assets that can be used to finance day-to-day operations without constraints established by debt covenants, enabling legislation, or other legal requirements. Further, the City is able to report positive balances in all three categories of net assets, both for the govemment as a whole, and for its separate governmental and business -type activities. City of Livonia - Net Assets (in millions of dollars) Governmental hv9ies Busiresslype Activities Total 2083 2002 2003 2002 2003 2002 Assets Current ox! other assets $458 $ 543 $ 265 $259 $ 723 $ 882 Cap9al assets 1685 1522 82.1 837 242.6 2359 Total assets 2063 2065 108.6 109.6 3149 3161 Liabilities Longterm liabilities 565 680 198 154 763 754 Otherliabilibas 87 115 39 112 12.6 22.7 Total liabilities 65.2 715 237 266 889 96.1 Net Assets Investof inmgfdl assets - NemtxI feddebt 1175 1098 644 642 1789 1740 190 144 280 181 37.6 33.1 Uniosctetl Unrestiided 90 188 5 1 95 ms Total net assets $141.1 $IW.0 84.9 $113.0 $U6.0 $218.0 plane 5 n City of Livonia, Michigan Management's Discussion and Analysis (Continued) The following table shows the changes in net assets for 2003: City of Livonia - Changes in Net Assets (in millions of dollars) Expenses General government 83 Governmental Busincsslype - 320 Public works 200 Activities Activities Total Revenues - 116 I nterest on long-term debt 25 - 25 Program revenues: 246 246 Gulfcourse - 15 15 Chargesforseroce $11.6 $ 276 $39.2 Operating grants and contributions 84 - 84 Capital grants and contributions 5 8 13 General revenues: for the City's governmental activities totaled $82.4 million. Property taxes accounted for 60 percent of the total revenues, or $49.0 million. Charges for services such as court fines, building permits, and recreation fees accounted for Pmperlytoaas 490 - 490 State-sharedrownues 100 - 180 Rental income and fees 13 - 13 Interest 1.1 2 13 Gain on sale ofcapital assets 1 - 1 Miscellaneous 4 3 ] Total revenues 82.4 289 1113 Expenses General government 83 - 83 Public safety 320 - 320 Public works 200 - 260 Community and economic@velopment 18 - 18 Recreation and culture 116 - 116 I nterest on long-term debt 25 - 25 Water and sewer - 246 246 Gulfcourse - 15 15 Housing 9 9 Tolalestenses 762 270 1032 Change in Net Assets 62 19 81 Net Assets - December 1, 2002 1349 830 2179 Net Assets- N ovember 30, 2003 141.1 $ a4.9 szz6.a Governmental Activities For the year ended November 30, 2003, revenues for the City's governmental activities totaled $82.4 million. Property taxes accounted for 60 percent of the total revenues, or $49.0 million. Charges for services such as court fines, building permits, and recreation fees accounted for 14 percent of the total, or $11.6 million. State -shared revenues were 12 percent, or $10.0 million; these revenues continue to be a concern as to future funding levels. plane fi n City of Livonia, Michigan Management's Discussion and Analysis (Continued) Expenses for the City's governmental activities totaled $76.2 million. Ofths total, $32.0 million (42 percent) was spent on public safety and $20.0 million (26 percent) was spent on public works. Business -Type Activities Livonia has three business -type activities. These include the water and sewer system, the operating fund for the Fox Creek, Idyl Wyld, and Whispering Willows golf courses, and nonfederal senior housing at Silver Village, Newburgh Village, and 13 scattered site homes. The following table shows the income before contributions and transfers for each of these activities in 2003: Waterand Golf (in thousands of dollars) Sewer Courses Housing Total revenues $24,931 $1,969 $1,230 Total expenses 26 785 1 698 952 Income before contributions and transfers 146 271 278 Capital Assets and Debt Administration At the end of fiscal year 2003, the City has $369.5 million invested, before depreciation, in a wide range of capital assets, including land, buildings, public safety equipment, computer equipment, and water and sewer lines. In addition, for the first time, the City is reporting infrastructure assets, which include roads, bridges, sidewalks, storm drains, and other assets in which the City has invested since its inception. The value of the infrastructure assets, net of depreciation, contained in this report is $48.9 million at November 30, 2003. Debt of $47.7 million related to the construction of the above-mentioned capital assets is reported as a liability in the governmental activities in the statement of net assets. During the year, the City issued bonds that were used to advance refund the 1991 General Obligation Unlimited Tax Bonds and the 1992 General Obligation Unlimited Tax Bonds. By doing this, the City reduced interest payments over the next five years by approximately $110,000, or a present value savings of approximately $104,000. Debt related to the water and sewer system totaling $13.2 million and debt related to the housing and golf course activities of $5.8 million is recorded as a liability in the business -type activities in the statement of net assets. This debt represents construction of and improvements to existing water and sewer lines and improvements to the golf course and City residential rental facilities. plane n City of Livonia, Michigan Management's Discussion and Analysis (Continued) Significant additions to capital assets during fiscal year 2003 include $5.2 million invested in the construction of and improvements to roads; completion of a Community Recreation Center totaling $29.1 million, which includes $6.6 million of capital outlay in 2003; and $4.2 million invested in the construction of and improvements to water and sewer lines. There were no significant disposals ofcapital assets during fiscal year 2003. The City's Funds The fund financial statements begin on page 13 and provide detailed information on the most significant governmental funds - not the City as a whole. Funds are created to help manage money for special purposes, as well as to show accountability for certain activities, such as special property tax millages. The Citys major governmental funds for 2003 include the General Fund, the Community Recreation Fund, and the Refuse Disposal Fund. The City's governmental funds reported a combined fund balance of $28 million. This is a decrease of approximately $5.7 million for the year. The primary cause for the decrease was a reduction of $6.5 million in the community recreation construction fund balance. These funds, which originated from the proceeds ofa bond issue in 2001, were used to substantially complete the new Livonia Community Recreation Center. The facility's construction was completed on time and below budget. Membership activity has exceeded projections. Also included in the combined governmental funds is the Roads and Sidewalks Fund. This fund was established in fiscal year 2003 to account for the activity of the voter -approved 0.89 mill special levy for rehabilitation and reconstruction of City public roads, sidewalks, and trees. General Fund Budgetary Highlights Over the course of the year, the City administration and City Council monitor and amend the budget, primarily to prevent expenditures in excess of budget, as required by the State of Michigan Budget Act The final amended budget included approximately $1.8 million less revenue and $940,000 less expenditures than the original adopted budget. The primary cause of the budget reductions was a result of amending the General Fund budget to remove the operations of the golf courses, which are now accounted for as a business -type activity. Actual General Fund revenues were approximately $2.0 million below the final budget. Specifically, State -shared revenue was $768,000 less than the final budget because of mid -year reductions implemented by the State of Michigan, court fine revenue was $387,000 less than the final budget because collection of traffic fines from a special enforcement project occurred later than expected, and interest income was $207,000 less than the final budget because interest rates are at historic lows. plane n City of Livonia, Michigan Management's Discussion and Analysis (Continued) Actual General Fund expenditures were approximately $2.3 million below the final budget. All departments held expenditures below the final budget. Major savings were achieved by continuing an across-the-board hiring freeze that began in 2002. At year end, approximately fifty (50) positions were vacant, resulting in approximately $2.9 million in reduced wage and benefit costs City-wide. Current Economic Conditions The City continues to maintain positive fund balances in each of its funds. However, concerns arise when considering the revenues and expenses that the City is facing in upcoming years. The majority of the City's revenue base is constrained by factors outside the City's control. Property taxes, State -shared revenue, and interest income total 73 percent of the City's total governmental activities revenue. Property tax revenue increases are limited to very small increases because of Proposal A and Headlee state constitutional limitations. The State of Michigan has experienced budget deficits and has significantly reduced revenue-sharing payments to local governments to help reduce their deficit. Interest rates that are at historic lows have diminished the City's return on investments. On the expenditure side, certain expenditures continue to rise at a rate far in excess of inflation. In particular, health care expenditures have continued their trend of double-digit increases. Hiring and capital outlay freezes, among other measures, have been implemented to reduce expenditures to the level of available revenue. The City's management is committed to living within its means, although the result may be diminished programs and service response capabilities. Contacting the City's Financial Management The financial report is designed to provide Livonia's citizem, taxpayers, customers, investors, and creditors with a general overview of the Citys finances and to show the Citys accountability for the money it receives. If you have questions about this report or need additional financial informationcontact the Director of Finance at the City of Livonia, 33000 Civic Center Drive, Livonia, Michigan 48154. plane n City of Livonia, Michigan Statement of Net Assets November 30, 2003 The Notes to Financial Statements are an 10 plan Integral Part of this Statement. rnoian Governmental Bisinearlype Activities Activities Total Component Units musedis Cash andinvestirrenls more 3) 8 34848,096 8 12018,165 8 07256F51 8 511 Reconvenes Taxes 1324M15 - 132E0.5 - Customers - tfiesi319 tfiesi319 - DuehomothergwemmentalunAs 3,E0.3,690 - 3,EE3698 - EmgvAeerRetirementSfidem 82454 - s22543 - SPecalasesments 734300 - 731,3o8 Trend fines 1209,23 - 1209239 - Workarecom0enstiw 383,859 - 383,859 - Other 54,518 2195M 769,182 5!6 reentwy, transit estendmes, and&"te 348,524 238,76] 1087291 - Imtaumemcontracts - s58625 s58625 - Restated assets (Nde8) 281 4,051638 6?14,125 - Cantalassets (Note 4): NondePre=iade antal assets 34,181310 5,a6o200 39c41510 474,448 Oelxeciade aPtalasets-Net 126312]91 ]6,6]8618 202,991,412 12078214 Total assets 286289,212 12,611,916 311 11 Debilities Accounts rapids 3,43223 2296]81 5,]29061 1]2]93 Accrued add other liadlities 3,949,936 187241 4,137,177 25,817 Dekrtedrevenue 1323200 1286214 2,531,414 - BmdandRpaits - 218338 218338 - Ncrcurrentroutines (Nde7J: Due within one year 6,448,88 2,174,811 8,622557 280,000 Due in more than we year 500 11 17,625879 61,635}so 6,835,888 T otal liadlities 65,16343 23,782,455 88,E65889 6512818 Net Assets Invested In denial assets Not of related Rd 114,464,172 edides,865 178,831 6612978 Reh ic@d Community recreation 4,09,735 - 4,099,735 - Municikal rehse 4,6M,14 - 4,6M,149 Rest, rosds, and sidewalk 4,950,028 - 4,950,020 - GrankandO%Dstreetlghting 201,649 - 281649 - LiMary 42a418 - 422,418 - Pudcsedicom niation 1354,597 - 1354597 - PQudatediufeAures 618422 - 610,422 - Dedaen7ce 406,001 - 406,001 - ruralpoPcts 969161 - 969,166 - ResVotediuordmncere4irements - 2,798123 2,798123 - Waterandsewer - 11,173232 11,173232 - %ymMh Road Developnent Authority - - - 325,496 Ecmomic Deueloprent Coronation - - - 4,191 Unrestricted 9,883,4`3 57],848 9588699 Total net snots $ 141,125,788 $ 84,989,468 $ 226,035240 $ 6,942651' The Notes to Financial Statements are an 10 plan Integral Part of this Statement. rnoian City of Livonia, Michigan The Notes to Financial Statements are an 11 Integral Part of th'e Statement. Program Revenues Operating Gants antl Qatar Gants atl Brands Charges M Services Contributions CmViMiw FurctiomlProgrms PriGrery9n+ernmenl: cnGemmentalerniment al government $ 8,975,065 $ 3 $ - $ sadly Pubic sadly Pubic saga 31,(1 5,2'4,115 23S,iM - 20,021 R0 1,2%,40 6,277,138 0S,Y5 CommuwVs Cm�nnyantlulture velopanem 176'_+,789 - w1io1 Recreation atl<term 11,68,671 I,E6a,536 3R 639 - In@resimlm9-@rm Rd 2,E61,611 Total governmental activities 76,231,015 11,618,0.58 8,45,962 05,565 Busnearlype activities: Mier and sewer 20,571,625 20.50.5.087 - ]92,20] C-alhwrse 1,535503 1,826.236 - - Housing 903,M 1,221 204 Total dainearlype scheme 27,010,206 27,592,817 ]92,20] Total piamrygwemared $ 1032C],IIt $ 19211,ZI5 $ 8,45,982 $ 128),1)2 Component units: Economo oevelopaaamcaporagon s him s - s - s - PlymoulhRoatlOeuelopnemPNhaily 1,591519 2,318 Total component note $ 1,61 $ $ 2,318 $ General revenues Property taxes Statesharetl revenue Unrestricted fides anmmer Interest Gain on ale ofaplal assets Miscalinena Transkrs Total general revenues and transfers Change in Net Assts Nel Assts- Binning ofyear Net Assts-Entlofyear The Notes to Financial Statements are an 11 Integral Part of th'e Statement. Statement of Activities Year Ended November 30, 2003 Not (Expense)Rm ue and Changes In Net Assets Prig ryGwernnnent Gwemmental Bwn�type MOOS MOOS ]wa Carnpnnent tints s (4,835,062) $ - $ (4,835,062) $ (2',892516)1 - (2',892516)1 (11944,]47) - (11944,747) (791.M) - (]91.M) 1,376,818 1,376,818 (zdw Q71) (zdw Q71) (ss,]m,m0) - (ss,]m,m0) - ]65,(119 ]65,(119 - - 2,(1M 2,(1M - 318,416 316,416 9,9(1,(11 - 1,376,818 1,376,818 (55]4] 818) 1,376,818 (543]2192) (11877) (1x9201) 48,9 ,M - 48,9 ,M z,M,M 9,9(1,(11 - 9,9(1,(11 - 1,321369 - 1,321369 - I,GL, 2T1,936 1,3D, 9,158 10,655(M - 10,655(M - 4x,459 311 763,YS - (3f ]113) !6,]113 61,914,X0 5]2,,45 6z487,fG5 2,105,189 6,16!,250 1,941,(13 8,ib,HG3 504111 134,9x,x8 82,9(114] 21192➢,3T7 6,,utj S 141,125,780 $ 84909,460 $ 226,035,240 $ 6,942,657 plane 12 n City of Livonia, Michigan Governmental Funds Balance Sheet November 30, 2003 MalorSpecial Revenue Funds Other Nmmajor Total community Refine Dlsp®I Governmental Governmental General Fund Recreation Ovalem Finds Finds Assele Curremasete: Cash and investment; s 5,4739,11 s 5,401,246 s 5,932j0.5 s 11218,395 s 23,831,127 Recieval. Taxes 78585 9,111 21,868 need 13a,40.5 Spe<blases�renis 73,395 ]3,388 Warlersiconeensatim 383,859 - - - 383,859 Due tam other governmental units 2,882,837 - - 1,361,653 3,4,13698 Fmggreei Retirement System sai - - - a225,13 Other 493,821 - 11,498 44991 M9518 Due ham other Once (N de 5) - - - 26983 26,968 Irtrenlory, peteid expenses, add Rpm3s 549244 Sf9244 Restrictedasets IN de 8) 2,8621 2,852687 Trial assets $ 9,795,150 $ 5A18,357 S 5,98,911 $ 16271,771 $ 37,459,189 Hai and! Ruder 61ai Liabilities Accounts psyche a 1.08,322 $ 65,37 $ 1,295,893 a 997,518 a 3,432288 Due to other Once (Nate S) - - - 26983 26,968 Accrued add other liadlities 355],]98 37,951 9,10 75,836 3,619,128 Dethedrevenue 268,173 1,215,104 25586 sci 2,313,858 Trial liadpties 4,899285 1,38,622 1329,762 1983,749 9,451,418 FUN Balances Reservedrw aepeid and dvemdy t32d37 - - - 432,U7 Reservedrwaptal crostrudim - - - 2,'.:58,26/ 2,56826] Unreserved Undesignated 4,463528 4,099,735 4,644,149 - 13,207,412 Unreserved Reported in Specal Revenue Fund: - - - ewl'6a3 8,]!1,626 Deb is Find: - - - 40,881 486,881 Carl Projects Fund: 2,622126 2,622,126 Trial Nnd drams 4895,465 4,899,735 4,619,149 14368,822 23,007,771 T dal liatililies and and dramas $ 9,795,150 $ 5A18,357 S 5,98,911 $ 16271,771 $ 37,459,189 The Notes to Financial Statements are an 13 planet Integral Part of th'e Statement. moian City of Livonia, Michigan Governmental Funds Reconciliation of Fund Balances of Governmental Funds to Net Assets of Governmental Activities November 30, 2003 Total Fund Balances for Governmental Funds Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and are not reported in the funds Certain receivables are expected to be collected over several years relating to special assessments. Additionally, fines and fees are not available to pay for current year expenditures Compensated absences are not due and payable in the current pedod and are not reported in the funds Long-term liabilities are not due and payable in the current pedod and are not reported in the funds Accrued interest payable on long-term debt is not recorded in the funds A portion ofthe Internal Service Fund (self-insurance) is included as part of governmental activities Net Assets of Governmental Activities $ 28,007,771 160,494,104 2,239,089 (7,457,121) (47,675,452) (270,816) 5,788,205 $ 141,125,780 The Notes to Financial Statements are an 14 plants Integral Part of this Statement.rnOlanan City of Livonia, Michigan Governmental Funds Statement of Revenue, Expenditures, and Changes in Fund Balances Year Ended November 30, 2003 ua n is Revenue Fund: Other Normal Trial Community Refuse oiap®I Godemmema Governmental General Fund Recreation System Fund: Fund: Warsaw Propertrtaxe s 25,862917 s 3333.396 s 10,927,653 8,402,,189 s 4866,055 Licenses and permed 1574,65 - - - 1574,656 Strei assesments - - - 1,3212,313 3}212$03 Imergwemmremal favo e: side annus Tamara - - 6,682812 36,n5,n3 Federal sources 5,517 - - 1,531,621 3539,398 Charges M servces 3203,650 I,ID5849 139,719 951,317 6,333535 Interest 517,821 69,763 W,613 28,202 953,TA Fines and Mkitures 3299W - - 256,269 3,554,736 Miscellaneous revenue 182i 216 1130330 ]51]30 2,710,100 T offal revenue 46014,821 5,240224 11275,315 20203,20 83,138603 Expenditure General go+ermrent 7,841815 7,841835 Pudi<sakly, 30$03,98 - - itm' 9 31$95937 Pubi<wmks 2,311621r - 10,]!4,6]5 10453,893 23,140,188 Recreation and culture 3,108,299 2,51,058 - 4,7(al 10, ,sect Community and economic development 791831 - - 115r,tt6 1948$0] Empbyee benefit Insurance, anaother 1216,30 - - - 1$16,303 Captal oNgy 8,245,179 82,1SP9 OeNservice 4,732,396 4,732.396 Total expenditures 45,473656 2,51,058 10,174,615 23,984,750 Sarral Exes d Warsaw Over(Under) Expenditure 941,125 2,939,166 500,640 (9,]]6,507) (5,64557171 Other Financing goal (Uses) Proceeds hamihe issuance of Iran term debt - - - z3al 2,385,000 Payment to reNndeabcnaescrox agent - - - (238,516) (2.358.846) Transfers in (Note S) 504,200 m,01 - 8,691,246 9,189,697 Transfers out (Note 5) (296os'S) (2005799) (519185) tyy3800) Total other Thai sources(uses) (158616) Nsai 34711215 (8.349) Net Change in FuN Bali (615,491) 767,018 80,618 (6,30,62) (51654,125) FundBelande- Begnnng oOsar-!s restated (N de 1) 551735 3,332,717 411113509 20,674,314 33661 E96 FundBalande-Enaofyear $ 4,895,865 $ 4,099,735 $ 4,614,149 $ u,3frl $ 28,001 The Notes to Financial Statements are an 15 plants Integral Part of this Statement. rnoian City of Livonia, Michigan Governmental Funds Reconciliation of the Statement of Revenue, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year Ended November 30, 2003 Net Change in Fund Balances - Total Governmental Funds $ (5,654,125) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures; in the statement of activities, these costs are allocated over their estimated useful lives as depredation 8,340,557 Certain revenue reported in the statement of activities in previous years did not provide current financial resources in the governmental funds until the current year (619,548) Repayment of bond principal is an expenditure in the governmental funds, but not in the statement of activities (where it reduces long-term debt) 3,475,100 Interest expense is recorded when incurred in the statement of activities 25,733 Bond proceeds and payment to bond escrow agent are not reported as financing sources (uses) on the statement of activities (26,154) Increase in accurrulated employee sick and vacation pay is recorded when paid in the governmental funds (202,939) A portion of the Internal Service Fund (self-insurance) is also included as governmental activities in the statement of activities 828,626 Change in Net Assets of Governmental Activities $ 6,167,250 The Notes to Financial Statements are an 16 plants Integral Part of this Statement.rnOlanan City of Livonia, Michigan Proprietary Funds Statement of Net Assets November 30, 2003 Assts Current aceta: Cash and investments Accounts reconvene: Customers Other Inventory, prepaid eryenatures, and&P"to Instaument<mVxts amtndea assets IN we 81 Total current aceta N encu rrent assets IN pre 4[ Nontlzpreciade snots Oepreciade assets -Net Taal nonarreI mets Total snots Nommjor Major nterturse Fund Enterturse Fund Taal Enterprise Internal Semce Mier anaSewer Housing GcAfCourse Fund Fund s 11,149072 s 527,940 s 57,040 s 11,T31.32 s 7,498.482 besidi9 - - 8,691,319 - 211,858 42] 7239 21eW - 206387 - 42(3 210,650 327,398 35662 - - isgs25 - 4,051638 - - 4,053618 - 25,163s99 528,36' 6asre 2,760,868 7,325se0 291 69,035,394 1581,948 5,039,1Y 3582088 260V1,070 5,460,aro - 76,673,618 69331158 6621,102 6,186558 82138818 94695,057 7,149,4W 6255160 107,899,636 7,825880 Liabilities Current oatelt es: Pi<wma pe}ade 2233,14.3 13913 49,825 z236.781 - ac<rueaanamherladhges 111sm 62546 12891 13',241 - oefirreareuenue 122214 - - 1,203214 - emdanadp�s8s 94687 111 - 218310 - Currempxtiunofbng-term odisaiws 1,462,111 418,255 30fi 2114,011 - Toldcurrentroutgn 5,108159 610,3A 366,161 tudiri - Nonaurrentliat hies-Loug@rmdN-Netof current portion (Note 7) 12,028669 4,360,760 233,769 17,181 1,761 Total liatifties 1],123,]63 5071,065 659,830 2,T8,6il 1,761 Net Assets Invested in spial assets IN at of siatea dN 57,402934 1}4z351 5,62]80 64,3®,065 - Rntri<tetlbrordnancerecurmmms 2,79812 - - z]W.12 - Uninitiated 0,03232 336,053 (2345% 17,431,815 6,3],643 T dal net assets $ 77,366,289 $ 1,678,14 $ 5595340 81,643,02 $ 6,051 Nnounts Cinched for rareness 4W aaiwin in the statement of net mob are of arena bemuse a portion of the Internal Service Funtlthat is induced as duineariype activities 269,437 Net resets of Business 1i Activiiss $ m4 o946o The Notes to Financial Statements are an 17 planet Integral Part of this Statement. rnoian City of Livonia, Michigan Proprietary Funds Statement of Revenue, Expenses, and Changes in Net Assets Year Ended November 30, 2003 NonnnPr XAprtnterpiso Fund Entertains Fmtl Taal Enterpr¢e Internal Samoa Wooter andSewer Noaino CdfCmrse Ford Fund Operating Revenue Customer brings $ 23,772,655 a - a - a 23,]]2465 a - Finesandfin iWr¢ Wan - - 697,966 - Serviscmnectims 75,487 - - ]508] Greene fides - - 1689268 1,689268 Trail has - - 81 111 City Contractions - - - - 6,616,361 Rental lmmnm - 1220260 - 1228$68 Other revenue 166245 1,982 191450 359,67] Total operating revenue 26,712,185 1222262 1,968,486 27,902913 6,616,361 Operating Expema Cel ofwater 7003096 - - 7009,096 - Costofsmagedsp®I 9,353,066 - - 9353686 - Srstemnaintenanceandcreaton 6,589,132 - - 6589,192 - Generalandadninistrative 189,180 - - 859,180 - Deaeciation 23W,1H2 166,131 19VI,]56 2,]36,02] - Reinsuranschargesanadaiinno - - - - 5511 Salaries andwages - dasmir 213618 562,158 - Sulatees - 8,753 ill 195522 - Other normal andcharges - 208090 1,061095 1261565 - Totalcreatingdrenses 26,187,616 701516 1,655636 26,5,t5826 551],46] Operating Increase 524,511 528726 311,650 1357,089 1158,936 Nanaperating Revenue (Expeme) Interest lnconre 218,916 8,181 901 227,996 95,002 Interest ex(ense (591 (250550) Ni 6b) (889692] - Total nwwperating revenue (expense) (186) (262379) (60]33) (169v'7 95,002 Indoor¢-BeMecmlriMiom antliram(ers 165.927 276369 211;117 695,393 1253,936 Coli (Contribute! fran Developers and Gram. 792,207 - - 792207 - Transitions in 36,703 34,703 Change in Net Assets 972,837 276369 211117 1522303 1253,95 Net insets Bearninsingoi oesrestated IN de 1) 76,393,652 1,400,055 5,326213 83,11],]20 6803,7W Notional Endoi $ 77366289 $ 1,678,606 S 5,595,330 $ 86,640,023 S 6,057,64[3 Net Change in Net Asset -Trial En@raise Fmd 8 1522303 Aunt reported br bainesslype activities In the statement of adiwies are afferent because the Internal Samoa Fund iaallocated artialNm real 1I accedes 425,310 Change in Net Asset of radium -Type MtfrRis $ 1,947,613 The Notes to Financial Statements are an 18 planet Integral Part of this Statement. rnoian City of Livonia, Michigan Proprietary Funds Statement of Cash Flows Year Ended November 30, 2003 Can Flwn from Operating Activities Receipts from customers Payments to suppliers Payments to emp'ore¢ Other re<eipte disbursements) Net ash Goaded by operating scrams s Can Flwrs from Nanupital mancing Activilia- Net transfers in hon other Lnd Can Flwrs from Capital add Related meaning Actirilian Connriretims sewn <ustwners Grant eimWrsements sundial antlln@raat ssets lmg-@ret di Purchase ufapul assts Net ash used In cartel antlrehtetl tans activities Can Flwrs from Investing Activities Interest received on Investments Net(Wrcases) miss of Investment activities Net ash aw'idetl by(used in) investing activities Net increase (decre (decrease) in Can and Can Equrvaknts Gersh and iGersh Egurvalents- December 1, tom Cmh andCmh Epurvalents- Nwemher382003 Balance street Classification of Can and Cash Equrvaknts Cash and ash egrtalents Ratridecaaets(N de 8) Taal ash andash eylvalents Lea investments Net cash antlash eryvalents Nomajor XAjw Entertains Funds Entertains Fund Taal Entertains Internal Sem<e Water atlSeaer Honors GdfCourse Fund Fund 8 24.111 8 12224M 8 1.961.187 8 27,381281 8 6,676381 (17,989,61) (203 539) (1,11 (19,311,632) (5,511 (0511,356) (299463) (212803) (51(631622) - 11 (13984) (69181 119573 (80980,1) 1889,0E ]05,1]1 510,997 3,(65520 319,130 31,7113 - - 31,703 - 258519 - - 250519 - 22,08 - - 22,088 - (1']s3sso) (560,5w) (353259) (2,31726) - Ne0719) 7, (1316001 insists (1,921,561) (718,109) (181&581 (3,121528) 28,911 8,181 901 227,996 95,002 (20]Sr) 1202 (4169) (61221) (119916) 19812] 9383 (60]381 1661]Y2 (26916) 120,318 (3,22) 15,401 fres 6 324216 11837,54 388]02 57,Mo Y2,226266 5,149676 f 11i9WAW f 381 f 15AOt f U.M8,7311 f 5,473,892 8 11;169,072 8 527,9E 8 57,M0 8 8,731,052 8 7,498682 3818,976 3,8189]6 14,968,048 527,9E 57,Mo 15,553,o2a 7,498p82 (3810,163) (162090) (01,6391 (3,19,1p7) (2024590) f 11y5]FAW f 381 f 15AO1 f 12,M8,731 f 5,473,892 The Notes to Financial Statements are an 19 planet Integral Part of this Statement. rnoian City of Livonia, Michigan Proprietary Funds Statement of Cash Flows (Continued) Year Ended November 30, 2003 Doi What Fnterturse Funds Enterprise Fund Taal Enterturse Internal Samoa Water adSeaer Hocsine GdfCocrse Find Fun Reconciliation d Operating Ircune to Net Cash Van Operating Activities Operating lmmnre $ 526,511 $ 520728 $ 311,850 $ 1,357,889 $ 1;158931 Fdimtmentsto remmile operating Incoare to net :ash a m operating activities: Deprecoton 2,3]],142 161,131 191,75! 2,]36,82] - Chmgeslnasetsandliadlities: Resisades (183,711) 218 (7299, (198,825) Due froadoother Lnd 71,250 - - 71ZD - Inuentwy,arsons,anddpmns 18,348 - (12" 11,oF5 360,710 Reslrmlenasel receil - - - - - AcmuitsR@ede (706,662) 5,301 19,825 (651,533) - HccmedandotherliatiNies 31,118 11 (39]0) 10010 (1170511 Deferredrevenue (2i (22911) Bmdanddpol 2301 2,301 Net was provided by operating adiMis $ ta0l $ ]OSp]4 $ 51099] $ 3,055,40 $ Magn1 NanrmM1 Inresti�g, Cagtal, aN Flnancing Activities- During the year ended November 30, 200, developers crostmded water andsewer lines with an enthral of$519600 and dsm@dthem to the Diggs Water andSewer Fund The Cilyalso amodizedthe dekrtedcharge on refunds totaling $60,014 The Notes to Financial Statements are an 20 planet Integral Part of this Statement.rnolanan City of Livonia, Michigan Fiduciary Funds Statement of Net Assets November 30, 2003 Assets Cash and cash equivalents (Note 3) Investments (Note 3): U.S. government securities Common stock Corporate bonds Foreign stock Mutual funds Bank investment pools Investments held by broker-dealer and banks under securities loans: U.S. government securities U.S. corporate fixed income U.S. equities Securities lending short-term collateral bank investment pool Other receivables Total assets Liabilities Accounts payable Due to other governmental units Accrued and other liabilities Bonds and deposits Amounts due to broker under securities lending agreement Total liabilities Net Assets- Held in trust for pension and other employee benefits Pension and Other Employee Benefits Agency Funds $ 56,451 $ 1,037,625 29,135,070 - 86,340,208 - 41,666,639 - 720,563 - 40,257,804 - - 5,204,394 5,494,239 - 3,474,095 - 7,812,655 - 17,335,693 - 1,573,529 1,750 233,866,946 $ 6,243,769 878,794 $ 75,026 - 4,339,356 822,543 - - 1,829,387 17,335,693 - 19,037,030 $ 6,243,769 $ 214,829,916 The Notes to Financial Statements are an 21 plants Integral Part of this Statement. rnoian City of Livonia, Michigan Fiduciary Funds Statement of Changes in Net Assets Pension and Other Employee Benefits Trust Funds Year Ended November 30, 2003 Additions Investment income: Interest and dividends Net appreciation in fair value of investments Less investment expenses Net investment income Securities lending income: Interest and fees Less borrower rebates and bank fees Total lending income Contributions: Employer Employee Total contributions Total additions Deductions Benefit payments Medical benefit payments Refunds of contributions Total deductions Net Increase Net Assets Held in Trust for Pension and Other Employee Benefits Beginning of year End of year f 7,233,181 19,858,677 (409,479) 26,682,379 311,680 (276,413) 35,267 5,352,856 586,066 5,938,922 32,656,568 10,070,752 4,105,453 364,784 iLUALO "A 18,115,579 196,714,337 $ 214,829,916 The Notes to Financial Statements are an 22 plants Integral Part of this Statement. rnoian City of Livonia, Michigan Component Units Statement of Net Assets November 30, 2003 Assets Cash am cash equivalents Accaunts receivables Capital assets (Note 4): NoiWepeciade capital assets Depreciable capital assets - Net Total assets Liadlities Accaunts payable Accmetl am other liabilities Noncurrentliadlities: Due within ane }ear Due in more than ane }ear Trial liabilities Net Assets I nested in capital assets- Net of related debt Unrestricted Total ret assets The Notes to Financial3tatements are an 23 Integral Part of this Statement. Economic Plymouth Road Development Dewlapment Total Component Contemner Autrunty Units $ 4,564 $ 497,695 $ 582,259 4 542 546 - 474,448 474,448 12,478,214 12,478,214 4,568 13,450,899 13,455,467 37 172,416 172,793 - 25,017 25,017 - 280,000 280,000 6,035,000 6,035,000 37 6,512,433 6,512,818 - 6,612,978 6,612,978 4,191 325,496 329,667 $ 4,191 $ 6,939,466 $ 6,942,657 City of Livonia, Michigan Total governmental adivdies $ 1180.11396 $ $ 2,318 $ General rownues: Taxes Interest and other inveslmentearnings Total general reienues and tanstrs Change in Net Aswts Net Assets- Beginning of year Net Assets- End of year The Notes to Financial Statements are an 24 Integral Part of this Statement. Program Revenues Operating Capdal Grants Chargesfor Gants and and Expenses Services Conlbuhons Contributions Economic Deielopmant Corporation - Ganeal government $ 118A $ - $ - $ - Plymou8i Road Deielopment AuBwnty: Community and economicdeielopment 1289,736 - 2,318 - Interestenbngtermdebt 381]83 Total governmental adivdies $ 1180.11396 $ $ 2,318 $ General rownues: Taxes Interest and other inveslmentearnings Total general reienues and tanstrs Change in Net Aswts Net Assets- Beginning of year Net Assets- End of year The Notes to Financial Statements are an 24 Integral Part of this Statement. Net (Expense) Rownue an Changes in Net Assets Emmmic Plymo Road Dewlapment De bpmenl Corporation Au my Total $ (118A) $ - $ (118A) - (1287,418) (1287,418) (301,783) (301,7W) (i 1,811) (1589201) (1601,078) - 2,096,09 2,096,M 52 9,098 9,150 52 2,105,137 2,105,189 (11825) 515,936 504,111 16,016 6,422,530 6,438,546 $ 4,191 $ 6,939,466 $ 6,942,657 Component Units Statement of Activities November 30, 2003 plane 25 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 1 - Summary of Significant Accounting Policies The accounting policies of the City of Livonia, Michigan (the "City") conform to accounting principles generally accepted in the United States of America (GAAP) as applicable to governmental units. The following is a summary of the significant accounting policies used by the City of Livonia, Michigan: Reporting Entity The City of Livonia, Michigan's legislative branch consists of an elected seven - member council. The City's administration operates under the overall direction of an elected mayor. The accompanying financial statements present the City and its component units. The component units are entities for which the City is considered to be financially accountable. Although blended component units are legally separate entities, in substance, they are part of the City's operations. Each discretely presented component unit is reported in a separate column in the government -wide financial statements to emphasize that it is legally separate from the aty (see discussion below for description). Blended Component Units - The Municipal Building Authority of Livonia is governed by a board that is appointed by the mayor. Although it is legally separate from the City, it is reported as if it were part of the primary government because its pnmary purpose is to finance and construct the City's public buildings. The operations of the Authority are reported as a nonmajor Debt Service Fund. The City of Livonia Employees' Retirement System and the City of Livonia Health and Disability Plan have been blended into the Citys financial statements. These systems are governed by a five -member Pension Board that includes three individuals chosen by the City Council and/or the mayor. The systems are reported as if they were part of the primary government because of the fiduciary responsibility that the City retains relative to the operations of each system. The operations of the Employees' Retirement System and the City of Livonia Health and Disability Plan are reported as a Pension and Other Employee Benefits Fiduciary Fund. plane 26 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 1 - Summary of Significant Accounting Policies (Continued) Discretely Presented Component Units - The Economic Development Corporation was created to provide means and methods for the encouragement and assistance of industrial and commercial enterprises in relocating, purchasing, constructing, improving, or expanding within the City so as to provide needed services and facilities of such enterprises to the residents of the City. The Corporation's governing body, which consists of eight individuals, is selected by the mayor and approved by the City Council. Complete financial statements for the EDC can be obtained from the City of Livonia Finance Department at 33000 Civic Center Drive, Livonia, MI 48154. The Plymouth Road Development Authority was created to encourage additional economic activity and growth in the Plymouth Road business district The Authority's governing body, which consists of 12 individuals, is selected by the mayor and approved by the City Council. Internally prepared financial statements for the Plymouth Road Development Authority can be obtained from the City of Livonia Finance Department at 33000 Civic Center Drive, Livonia, MI 48154. The City has excluded the Housing Commission from this report. Even though the City appoints the Housing Commission's directors, it does not have the ability to inpme its will. Government -wide and Fund Financial Statements The govemment-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the nonfiduciary activities of the City (the primary government) and its discretely presented component units. The effect of interfund activity has been removed from these statements. Governmental activities, normally supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function (governmental activities) or segment (business -type activities) are offset by program revenues. Direct expenses are those that are dearly identifiable with a specific function or segment. 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 that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not applicable to specific programs are reported instead as general revenue. planrc 27 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 1 - Summary of Significant Accounting Policies (Continued) 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. Major individual governmental funds and major individual Enterprise Funds are reported as separate columns in the fund financial statements. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The govemment-wide financial statements are reported using the economic resources measurement focus and the accrual bass of accounting, as are the proprietary fund, fiduciary fund, and component unit financial statements. Revenue is 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 revenue in the year for which they are levied. Gants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenue is recognized as soon as it is both measurable and available. Revenue is considered to be available if it is collected 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. The following major revenue sources meet the availability criterion: state -shared revenue, state gas and weight tax revenue, district court fines, and interest associated with the current fiscal period. Conversely, special assessments and certain federal grant reimbursements will be collected after the period of availability; receivables have been recorded for these, along with a "deferred revenue" liability. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. Havever, debt service expenditures, expenditures relating to compensated absences, and claims and judgments are recorded only when payment is due. The City reports the following major governmental funds: General Fund - The General Fund is the Citys primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. plane 28 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 1 - Summary of Significant Accounting Policies (Continued) Refuse Disposal Fund - The Refuse Disposal Fund accounts for the operations of the refuse disposal activities of the City. Funding is provided primarily through a local propertytax levy. Community Recreation Fund - The Community Recreation Fund accounts for the activities of the Livonia Community Recreation Center, ice rinks, and certain other recreation activities. Funding is provided primarily by a local property tax levy and user charges. The City reports the following major proprietary funds: Water and Sewer Fund - The Water and Sewer Fund accounts for the activities of the water distribution system and sewage collection system. Funding is provided primarilythrough usercharges. Housing Fund - The Housing Fund accounts for the Newburgh and Silver Village residential rental facilities. Funding is provided primarily through user charges. Additionally, the City reports the following fund types: Internal Service Fund - The Internal Service Fund is used to fund general, workers' compensation, and employee health care liability claims and to purchase insurance that provides excess general liability coverage for City employees and property. The fund is financed primarily by charges to the various departments of the City. Pension and Other Employee Benefits Trust Funds - The Pension and Other Employee Benefits Trust Fund accounts for the activities of employee benefit plans that accumulate resources for pension and other postemployment benefit payments to qualified employees. Agency Funds - The Agency Funds account for assets held by the City in a trustee capacity. Agency Funds are custodial in nature (assets equal liabilities) and do not involve the measurement of results of operations. Private sector standards of accounting issued prior to December 1, 1989 are generally followed in both the government -wide and proprietary fund financial statements to the extent that those standards do not conflict with the standards of the Governmental Accounting Standards Board. The City has elected not to follow private sector standards issued after November 30, 1989 for its business -type activities. plane 29 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 1 - Summary of Significant Accounting Policies (Continued) As a general rule, the effect of interfund activity has been eliminated from the government -wide financial statements. Exceptions to this general rule are charges between the City's water and sewer function and various other functions of the City. Eliminations of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenue include: (1) charges to customers or applicants for goods, services, or privileges provided; (2) operating grants and contributions; and (3) capital grants and contributions, induding special assessments. Internally dedicated resources are reported as general revenue rather than as program revenue. Likewise, general revenue includes all taxes. Proprietary funds distinguish operating revenue and expenses from nonoperating items. Operating revenue 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 revenue of the City's proprietary fund (Water and Sewer Fund) relates to charges to customers for sales and services. The Water and Sewer Fund also recognizes the portion of tap fees intended to recover current costs (e.g., labor and materials to hook up new customers) as operating revenue. The portion intended to recover the cost of the infrastructure is recognized as nonoperating revenue. Operating expenses for proprietary funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenue and expenses not meeting this definition are reported as nonoperating revenue and expenses. Property Tax Revenue Properties are assessed as of December 31 and the related property taxes become a lien when billed. These taxes are billed on July 1 and December 1 of the following year, and are due on September 14 and February 14, respectively. After the final collection date of February 28, real property taxes are added to the county tax rolls. plane 30 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 1 - Summary of Significant Accounting Policies (Continued) The 2002 taxable valuation of the City of Livonia totaled $4.487 billion (a portion of which is abated and a portion of which is captured by the PRDA), on which ad valorem taxes levied consisted cf 4.0476 mills for operating purposes, .8094 mills for police, 1.2143 mills for police and fire, .8094 mills for the library, 2.5768 mills for refuse and recycling, .7861 mills for recreation, .0117 mills for industrial development, .2816 mills for debt service, and .8900 mills for roads, sidewalks, and trees. This resulted in $17.09 million for operating purposes, $3.37 million for police, $5.18 million for police and fire, $3.43 million for the library, $10.93 million for refuse and recycling, $.26 million for industrial development, $1.19 million for debt service, and $3.78 million for roads, sidewalks, and trees. These amounts are recognized in the respective General, Special Revenue, and Debt Service Funds financial statements as tax revenue. The delinquent real property taxes of the City are purchased by Wayne County. The county sells tax notes, the proceeds of which are used to pay the Cityfor these property taxes. Wayne County remitted its purchased delinquent real property taxes in August 2003. Wayne County delinquent real property taxes have been recorded as revenue in the current year. Assets Liabilities and Net Assets or Equity Bank Deposits and Investments - Cash and cash equivalents include cash on hand, demand deposits, and short-term investments with a maturity of three months or less when acquired. Investments are stated at fair value. Pooled investment income from the Investment Agency Fund is generally allocated to each fund using a weighted average of balance for the principal held for each fund on a daily basis. Receivables and Payables - In general, outstanding balances between funds are reported as "due tothrom other funds." Any residual balances outstanding between the governmental activities and the business -type activities are reported in the government -wide financial statements as "internal balances" All trade and property tax receivables are shown as net of allowance for uncollectible amounts. Inventories and Prepaid Items - Inventories are valued at cost, on a first -in, first - out basis. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. Certain payments to vendors refiect costs applicable to future fiscal years and are recorded as prepaid items in both govemment-wide and fund financial statements. plane n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 1 - Summary of Significant Accounting Policies (Continued) Restricted Assets - The revenue bonds of the Enterprise Funds require amounts to be set aside for construction, debt service principal and interest, operations and maintenance, and a bond reserve. These amounts have been classified as restricted assets, as well as amounts on deposit at the county and the state being held for the construction and debt service. 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 $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. Buildings, equipment, and vehicles are depredated using the straight-line method over the following useful lives: Infrastructure 33 to 40 years Road rights 33 years Buildings and improvements 20 to 50 years Machinery, equipment, and vehicles 2 to 20 years Water and sewer distribution systems 50 years Compensated Absences (Vacation and Sick Leave) - It is the City's policy to permit employees to accumulate earned but unused sick and vacation pay benefits. Under the City's policy, employees earn benefits based on time of service with the City. All vacation and sick pay is accrued when incurred in the government -wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only for employee terminations as of year end. plane 32 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 1 - Summary of Significant Accounting Policies (Continued) Long-term Obligations - In the government -wide financial statements and the proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund -type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond preniunu and discounts, as well as bond issuance costs during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts are reported as other financing uses. Issuance costs are reported as debt service expenditures. Fund Equity - In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. Accounting Changes GASB Statement No. 34 - Effective December 1, 2002, the City implemented the provisions of Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments (GASB Statement No. 34). Changes to the City's financial statements as a result of GASB Statement No. 34 are as follows: 0 A management's discussion and analysis (MD&A) section providing analysis of the City's overall financial position and results of operations has been included. 0 Government -wide financial statements (statement of net assets and statement of activities) prepared using full accrual accounting for all of the City's activities have been provided. plane 33 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 1 - Summary of Significant Accounting Policies (Continued) 0 Capital assets in the governmental activities column of the statement of net assets includes infrastructure assets (roads, bridges, etc.) not previously accounted for by the City. Capital assets at December 1, 2002 previously reported in the General Fixed Assets Account Group have been adjusted by approximately $94,000,000 to reflect the historical cost of the City's capital assets, using this broader definition, at that date. 0 In addition, the governmental activities column incudes bonds and other long- term obligations totaling approximately $60,485,000 previously reported in the General Long-term Debt Account Group. 0 The fund financial statements focus on major funds rather than fund types. 0 The activity from the Internal Service Fund has been allocated to the governmental activities and business -type activities. 0 Water and sewer capital asset balances at November 30, 2002 were adjusted to a physical inventory perfomled in 2003. As a result, net assets in the Water and Sewer Fund decreased by $1,104,965. Interpretation 6 Due to GASB 16, Interpretation 6, Adjustment of Compensated Absences, the following fund balances as of November 30, 2002 have been restated as indicated below: General Fund Refuse Fund binary Fund Fund Balance- November 30, 2012 -As previously reported $ 4,836,355 $ 4,137509 $ 188,642 GASB916, Lrterpretationfi-Adjustmentof compensated alu ences in the governmental funds, reclassifiedasalong-termfiaulq 675,11G 6,111 36,110 Fund Balan<e- Noven1er30,20o2-As restated $ 5,511356 $ 4,143,509 $ 224,642 Net change in fund balance for the year ended November 30, 2002 was understated by $150,000 in the General Fund and overstated by $140 and $912 in the Refuse Fund and Library Funds, respectively, as previously reported. plane 34 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 1 - Summary of Significant Accounting Policies (Continued) Change in Accounting Principle During the year ended November 30, 2002, the City changed its method of accounting for the Golf Course activity as a part of the General Fund to accounting for the activity in a separate Enterprise Fund. The General Fund uses the modified accrual basis of accounting in which revenues are recognized when they are measurable and available. Enterprise Funds use the full accrual basis of accounting in which revenues are recorded when earned. As a result of this change in accounting, beginning fund balance of the General Fund was not decreased. Beginning net assets of the Golf Course Fund is increased by $5,324,213 as a result of recording capital assets and long-term obligations not previously recorded in the General Fund. During the year ended November 30, 2002, the City changed its method of accounting for the Housing Fund activity as a Special Revenue Fund to an Enterprise Fund. Special Revenue Funds use the modified accrual basis of accounting, in which revenues are recognized when they are measurable and available. Enterprise Funds use the full accrual bass of accounting, in which revenues are recorded when earned. As a result of this change in accounting, beginning fund balance of the Special Revenue Funds is decreased by $405,674 and beginning net assets of the Housing Fund, as adjusted, is increased by $1,400,055. These changes resulted from Enterprise Funds recording capital assets and long- term obligations, which were not previously recorded in the Special Revenue Funds. plane 35 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 2 - Stewardship, Compliance, and Accountability Construction Code Fees - The City oversees building construction, in accordance with the State's Construction Code Act, including inspection of building construction and renovation, to ensure compliance with the building codes. The City charges fees for these services. The law requires that collection of these fees be used only for construction code costs, including an allocation of estimated overhead costs. A summary of the current year activity and the cumulative surplus or shortfall generated since January 1, 2000 is as follows: Cumulative shortfall at December 1, 2002 $ (1,611,813) Current year building permit revenue 1,551,931 Related expenses: Direct costs $ 1,495,170 Estimated indirect costs 402,740 Total construction code expenses 1,897,910 Cumulative shortfall at November 30, 2003 $ (1,957,792) Note 3 - Deposits and Investments Michigan Compiled Laws Section 129.91 (Public Act 20 of 1943, as amended) authorizes local govemmental units to make deposits and invest in the accounts of federally insured banks, credit unions, and savings and loan associations that have offices in Michigan. The local unit is allowed to invest in bonds, securities, and other direct obligations of the United States or any agency or instrumentality of the United States; repurchase agreements; bankers' acceptances of United States banks; commercial paper rated within the two highest classifications, which matures not more than 270 days after the date of purchase; obligations of the State of Michigan or its political subdivisions, which are rated as investment grade; and mutual funds composed of investment vehicles that are legal for direct investment by local units of government in Michigan. The Pension Trust Fund is authorized by Michigan Public Act 485 of 1996 to invest in certain reverse repurchase agreements, stocks, diversified investment companies, annuity investment contracts, real estate leased to public entities, mortgages, real estate (if the trust fund's assets exceed $100 million), debt or equity of certain small businesses, certain state and local government obligations, and certain other specified investment vehicles. plane 36 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 3 - Deposits and Investments (Continued) As permitted by State statutes, and under the provisions of a Securities Lending Authorization Agreement, the City of Livonia's Employees' Retirement System lends securities to broker-dealers and banks for collateral that will be returned for the same securities in the future. The City of Livonia Employees' Retirement System custodial bank manages the securities lending program and receives cash, government securities, or irrevocable bank letters of credit as collateral. Borrowers are required to deliver collateral for each loan equal to not less than 100 percent of the market value of the loaned securities. During the year ended November 30, 2003, only United States currency was received as collateral. The City of Livonia Employees' Retirement System and the borrower maintain the right to terminate all securities lending transactions on demand. The cash collateral received on each loan was invested, together with the cash collateral of other lenders, in an investment pool. The average duration of such investment pool as of November 30, 2003 was 133 days. Because the loans are terminable on demand, their duration did not generally match the duration of the investments made with cash collateral. On November 30, 2003, the City of Livonia Employees' Retirement System had no credit risk exposure to borrowers. The collateral held and the fair market value of underlying securities on loan for the City of Livonia Employees' Retirement System as of November 30, 2002 were $17,335,693 and $16,780,989, respectively. The City of Livonia Employees' Retirement System did not impose any restrictions during the fiscal year on the amount of loans made on its behalf by the custodial bank. There were no failures by any borrowers to return loaned securities or pay distributions thereon during the fiscal year. Moreover, there were no losses during thefiscal year resulting from a default ofthe borrowers or custodial bank. The City of Livonia, Michigan's deposits and investment polides are in accordance with statutory authority. plane 37 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 3 - Deposits and Investments (Continued) At year end, the deposits and investments were reported in the basic financial statements in the following categories: Total rash, invesM1rents, and and restricted assets $ 31513,&6 $ 16231141 $ 53,]50,111 $ 238,535,436 $ 502,2:9 Deposits The breakdown between deposits and investments for the City is as follows: Bankdeposits (chedting accounts, saHms accounts, anal norti0cates of deposit) Inveshnents in securilies, mutual funds, anal similarvehides Pettycash anal msh on ham Total Primary G Wrdant Government FiduciaryFunds Unit $ 39515,128 $ 1094,016 $ 10,130 14,219,062 231,441360 492,129 16,535 $ 53,150,111 $ 238,535,436 $ 502,259 The bank balance of the City's deposits is $39,649,000, of which $800,000 is covered by federal depository insurance. The remainder was uninsured and uncollatealized. The City believes that due to the dollar amounts of cash deposits and the limits of FDIC insurance, it is impractical to insure all deposits. As a result, the City evaluates each financial institution with which it deposits City funds and assesses the level of risk of each institution; only those institutions with an acceptable estimated risk level are used as depositories. plane 38 n Govamnental Buonesstype Total Prinery Cmryon ant Actwities Actrities Governnent Fiduciary Funds Unit Bash andcash equivalents $ 25,011,85/ $ 9,865,395 $ 34,&6,452 $ 1,894,&6 $ 10139 Investnents 9,831,439 3,352,110 13,190209 231,441,360 492123 Total rash andinvestments 34,848496 12,418,165 47^661 238,535,436 502,2:9 Restricted asets(Note 8) 2,665,W 3818,9]6 6,484,055 Total rash, invesM1rents, and and restricted assets $ 31513,&6 $ 16231141 $ 53,]50,111 $ 238,535,436 $ 502,2:9 Deposits The breakdown between deposits and investments for the City is as follows: Bankdeposits (chedting accounts, saHms accounts, anal norti0cates of deposit) Inveshnents in securilies, mutual funds, anal similarvehides Pettycash anal msh on ham Total Primary G Wrdant Government FiduciaryFunds Unit $ 39515,128 $ 1094,016 $ 10,130 14,219,062 231,441360 492,129 16,535 $ 53,150,111 $ 238,535,436 $ 502,259 The bank balance of the City's deposits is $39,649,000, of which $800,000 is covered by federal depository insurance. The remainder was uninsured and uncollatealized. The City believes that due to the dollar amounts of cash deposits and the limits of FDIC insurance, it is impractical to insure all deposits. As a result, the City evaluates each financial institution with which it deposits City funds and assesses the level of risk of each institution; only those institutions with an acceptable estimated risk level are used as depositories. plane 38 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 3 - Deposits and Investments (Continued) Comoonent Units The deposits and investments of the City's component units consist of bank deposits of $10,130 and investments of $492,129. The deposits were reflected in the accounts of the bank (without recognition of checks written but not yet cleared or of deposits in transit) at $34,724, which was fully covered by federal depository insurance. The investments of $492,129 were in bank investment pools. The bank investment pools are regulated by the Michigan Banking Act, and the fair value of the position in the pool is the same as the value of the pool shares. Investments are normally categorized to give an indication of the level of risk assumed by the component units; however, bank investment pools are not categorized because they are not evidenced by securities that eAt in physical or book entry form. The City believes that the investments in these funds comply with the investment authority noted above. Investments The City's investments are categorized below to give an indication of the level of risk assumed by the entity at November 30, 2003. Risk Category 1 indudes those investments that meet any one of the following criteria: a. Insured b. Registered c. Held bythe City orits agent in the City's name Risk Categories 2 and 3 include investments that are neither insured nor registered. Category 2 includes investments that are held by the counterpartys trust department (or agent) in the Citys name. Category 3 includes investments held by: a. The counterparty b. The counterparty's trust department (or agent) but not in the City's name plane 39 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 3 - Deposits and Investments (Continued) At year end, the City's investment balances were categorized as follows: Primarygoiemment- Bank imesMent pools Fakciaryfuids: US. government smunhes Common stacks Corporate bonds Foregn bands Subtatal Investments not subject m categaraabon: Mutual funds Bank investment pmts Inveshnents Bed by bmkerAaaler and banks order secunhes lmns: US government securities U$ Wwate nixed lnanrm US suit es Secunhes lending shart-tenm collateral bank investment pool Total Tdwary funds Compment unRs- Inveshnents not subject m categonzabons- Bank investment pools Reported M unt 1 2 3 (Fair Value) $ 14,219,862 $ $ $ 14,219,862 $ 29,135,070 $ - $ - $ 29,135,070 86,348,288 - - 86,348,288 41666,639 - - 41,666,639 728,563 728563 157, 862,488 157, 862,488 48,25 804 5,204,394 5,494239 3,4]4 895 ],812,655 17335693 $ 157,862,488 $ $ $ 237,441368 $ $ $ $ 492,129 The bank investment pods and mutual funds are not categorized because they are not evidenced by securities that exist in physical or book entry form. The investments held by broker-dealers and banks under securities loans are not categorized because the corresponding collateral is recorded in the financial statements. The mutual funds are registered with the SEC. The bank investment pools are regulated by the Michigan Banking Act. The fair value of the position in the pool is the same as the value of the pool shares. Investments under the interlocal agreement (MBIA -CLASS) are regulated by the Urban Cooperation Act. The fair value of the position in the bank investment pools and irRedocal agreement pools is the same as the value of the pool shares. plane 4ori"�ora� City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 3 - Deposits and Investments (Continued) Included in the City Pension Trust Fund investments at November 30, 2003 are the following: I Approximately $3,045,000 of securities issued by the Government National Mortgage Association (GNMA). These investments are backed by the full faith and credit of the U.S. government. The yields provided by these mortgage - related securities historically have exceeded the yields on other types of U.S. government securities with comparable maturities, in large measure due to the potential for prepayment. Prepayment could result in difficulty in reinvesting the prepaid amounts in investments with comparable yields. o Approximately $25,393,000 of collateralized mortgage obligations (or obligations of the Federal National Mortgage Association). These investments are usually not backed by the full faith and credit of the U.S. government, but are generally considered to offer modest credit asks. The yields provided by these mortgage - related securities historically have exceeded the yields on other types of U.S. government securities with comparable maturities, in large measure due to the potential for prepayment. Prepayment could result in difficulty in reinvesting the prepaid amounts in investments with comparable yields. I Asset-backed securities of approximately $5,380,000. These obligations typically include credit enhancements in the form of Overcollateralization, third -party letters of credit, seller recourse, insurance company guarantees, and/or senior subordinated structures. These securities are generally considered to offer modest credit risk but such risk varies depending on the type of asset being securitized and the extent and nature of the credit enhancement. Prepayment for these "pay through" securities could result in difficulty in reinvesting the prepaid amounts in investments with comparable yields. plane City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 4 - Capital Assets Capital asset activity of the City's governmental and business -type activities was as follows: Balance Balance Cecennmg 1, lisp sand Nwembea 38 2002 Hd9icis Pciust"nts 2883 f emmenNU¢givites Capel aeeets nw tieing eeuecatee And 8 36,114,925 8 66,385 8 - 8 34,181310 Cmstmctim In przgress 23 159 905 (23159905 subi 5]2]4,8M ssi,385 (23;159905) 3,981,390 Captal assets being Rlxeciated Ii 54659$99 5,M ,sn - 59,]204® R®arights 94,]96$82 95369 - 94891,959 Bultlngs anaiinninrwements 589]8o]2 39166$52 - 90,11 E4iprent antlwhi 22957,953 1,841,044 (220 24$78,609 subi 11 38,11 (220j93) 189257,646 A¢umilated Rlxeciatim: I1 20694,321 1629,370 - 22,395,691 R®arights 2888627 446,078 - 3 ,,53 Bultlngs anaiinninrwements 20154.087 1969294 - 2292336, E4iprent antlwhi 12688,646 2,]03,024 (220 15,11,2W subi 56625481 6,]39,]66 (220 UW,,854 N et aptal assets being Rlxecated 948]8,]1 31E,M - 126,312]99 Net gwemneNal aphi assets $ 152,153$1] $ 31$00,452 $-(2I159905 8 16069,iW plane 42 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 4 - Capital Assets (Continued) Busloaatype Activities Water and Sewer rapid assets: Captal assets not being depeaated Construction In progress Captal assets being depreciated turnings antl improverrents Vehicles Madnineryatle4ipnent Mier andsewer distribution rys@rre suaotal accurrulated depreciation: turnings and impre+errents Vehicles Madnineryade4ipnent Mterandsewer distribution,yaterre suaotal Net apta'assets being depreciated Net water antl sewer capital assets Gdf course capital assets: Captal assets not being depreaa@d- tand Captal assets being depreciated Buildings antl improvenents undimpre+errents Madnineryade4ipnent Sublotal &cumdated depreciation: Buildings and Improvmrents and imgrovemaas Madninery and e4ipnent Snail Net aptal assets being depreciated Net gdf course capital assets 43 Balance Balance Oecenrider 1, Bisg®bam November 38, 2882 AdItims Mustments 2883 8 3,16d589 8 4199 8 (3,2A,733) 8 295,751 934285 - - 934285 1527,469 - - 1527,469 83155] - - 83155] 185955183 3,]89851 169744246 65],624 39691$71 169248,424 3] ()E3 - 11383],48] 3 ,413 11 - 411 934,3]] 161,8M15 - 1jw8 599296 69,334 - 65],624 39691$71 2,11 - 41,814,158 41624?51 2,3n,142 - a4,66z,693 6],623,4]3 1,411,921 69835 78,]8],982 1,8229M (327)]33) 69U1; 158 3582p8B 3582p8B 1682, - - 1682, 2,3212,79z - - 2,3212,79z 683949 11 - 815549 4,629878 131,6W - 4,]68,6]8 422592 nw - 454636 120.5869 11i - 1,352269 294,185 0.5,581 339753 1?6194s 190.74 2,11 266]224 (6314) 260,1878 6249,712 (6311 - 6,186558 plane City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 4 - Capital Assets (Continued) Balance Balance Fesvben 1, Dish alsana Noverninal 2882 feel Hdusimenls 2883 Business type Activities(Coniinuetll Balance Balance Housing Fund Detonator 1, Disp®b and Neal 33, Capial snob had being Rpecaiea- 2082 Pbiiions Petusimenb 2003 lana 8 1.81.918 8 - 8 - 8 1.81.918 Capial mob being tlzpeciated BuildngsanalWavements 6,81,dsB - - 6,81,dsB FundiWavements 87,951 - - 87,951 Vehicles 35 i 23,169 (11,850) 11,310 Marninely and eq,ipmenl 6,000 ddno 39'no innerovemenb 1,610,496 700,432 subiwal 7,460,131 51,519 (14,350) 7,5)3130 Accumulated depeciaiion 12678214 Net coneanenl unit aptal assets $ 12,8111,34 $ 145}09 Buildings antllWavements 1,951815 1W,628 - 2,89503 FundiWavemenia 330,121 20,870 - 350,991 Vehicles Dj13 3588 (14,11 18$81 NacNnery and e4ipnenl 3,Q50 2,015 5,495 suddal 2,314,995 164,131 (14,850) 3464216 N at aPial assets being depeaatea 5145136 (106 58 5039151 N at Housing Fund espial snob 6721681 (106 58 6,621,102 N at bnsineel actodyaplal assets $ 83,165,318 $ 1,653,173 $ (3219,83) $ 82138,818 Capital asset activity for the City of Livonia's component units for the year was as follows: plant 44 n Balance Balance Detonator 1, Disp®b and Neal 33, 2082 Pbiiions Petusimenb 2003 Conditional PynnilnRaa Developnenl authority capulaneb na bong �pedaiea-Lana s 474,118 s - s - s 474,aa8 ampul snob bei Rpecialea- lana Inaovemenb 13,973,401 815141 - 14819,142 M<umnlaletl Rpe<ialim-latl innerovemenb 1,610,496 700,432 2 0,bi Net carol snob being Rpeciatea 12,331 14553le 12678214 Net coneanenl unit aptal assets $ 12,8111,34 $ 145}09 $ $ 12,952,662 plant 44 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 4 - Capital Assets (Continued) Depreciation expense was charged to programs of the pnmary government as follows: Governmental activities: General government $ 508,650 Public safety Nonmajorgmernmanlalfunds 1,275,981 Public works Nonmajorgoremmantalfunds 2,638,413 Recreation and culture General Fund 2,316,722 Total governmental activities $ 6,739,766 Business -type activities: Nonmajorgmernmentalfunds 4534,631 Water and sewer $ 2,377,142 Housing Total nonmajorgovemmental funds 194,754 Got course Total 164,131 Total business -type activities $ 2,736,027 Note 5 - Interfund Receivables, Payables, and Transfers The cor position of interfund balances is as follows ReceivaNe Fund Payable Fund Arnounl Nonmajor Governmental Funds Nonmajor Governmental Funds $ 26,968 These balances result from the time lag between the dates that goods and services are provided or reimbursable expenditures occur, transactions are recorded in the accounting system, and payments between funds are made. Interfund transfers reported in the fund financial statements are comprised of the following: Fund Tanstarretl Form Fund Transferred! To Arnount General Fund Nonmajorgmernmanlalfunds $ 2,86 816 Community Recreahan Fund Nonmajorgoremmantalfunds 2,885,799 Nonmajorgovemmental funds General Fund 584,288 Refuse Fund 83,651 Nonmajorgmernmentalfunds 4534,631 Water and Sewer Fund 34783 Total nonmajorgovemmental funds 5,157,185 Total $ 9,223,888 plane 45 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 5 - Interfund Receivables, Payables, and Transfers (Continued) The transfers from the General Fund to the nonmajor governmental funds of $2,060,816 represent transfers of unrestricted resources to finance capital projects and general obligation debt service in accordance with budgetary authorizations; the transfer between the nonmajor governmental funds of $4,534,631 represents the sharing of gas and weight tax revenues between the Major Streets Fund and the Local Streets Fund, in accordance with Act 51 and a transfer from the Local Streets Fund to the Road Fund to help fund local road construction; the transfer from the Community Recreation Fund to the nonmajor governmental funds of $2,005,799 represents the movement of resources to a Debt Service Fund to be used to service Community Recreation Fund debt. Note 6 - Leases Capital Leases - The City has entered into a lease agreement as lessee for financing the purchase of police and fire, election, district court, golf course, and energy conservation equipment. This lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the present value of the future mnimum lease payments as of the inception date. The future minimum lease obligations and the net present value are as follows: Years Ending Governmental Business -type November 30 Activities Activities 2004 $ 981,614 $ 43,917 2005 951,823 - 2006 935,673 - 2007 606,865 Total minimum lease payments 3,475,975 43,917 Less amount representing interest (328,674) (924) Present value at November 30, 2003 $ 3,147,301 $ 42,993 plane 46 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 7 - Long-term Debt The City issues bonds to provide for the acquisition and construction of major capital facilities. General obligation bonds are direct obligations and pledge the full faith and credit of the City. Capital lease obligations are also general obligations of the government. Special assessment bonds provide for capital improvements that benefit specific properties, and will be repaid from amounts levied against those properties benefited from the construction. In the event that a deficiency exists because of unpaid or delinquent special assessments at the time a debt service payment is due, the City is obligated to provide resources to cover the deficiency until other resources (such as tax sale proceeds or a reassessment of the district) are received. Revenue bonds involve a pledge of specific income derived from the acquired or constructed assets to pay debt service. Long-term obligation activity can be summarized as follows: arlmlwl o-rteet Mawro Timm Pmrtsm are xahln We WMes NMes Baha Qie im) Fnrtlrg Bahr OneYmr Govanrr ll aNwtes BUllrtlm Aliuro Bm6e. 1m1 Garr¢ Cwrt Irmrwer rm mss Prrwr aline-wv,a 5m%- MOT - Maturlmthroimhm3 6M% 5255," S 255" S (®Bin) S MOM S W,Bm 1%2 MBP Rgraram BwLLr Prtwn aIme-.@, B12614 2A%- Wurimthroimh2504 575% 5f1 M3 R1, 485 ( WI) W313 W313 1%S MBP Rgranmg Bait Prrwm also¢ -33m 133 Wurlrgthroimh2W5 470% 591m Tim - P1m - 193MBA ReNanmgBwLLr Prrwn[alsue-3250500 3T% 3(9,03- Maturlrgthroimh2005 450% &185500 135000 (4m,OW) im" 4w,0o0 198 MBP Flre SYMgnBw6r Arto alsue-s1 7q,0.11 4A%- PES Wurim throim h 2018 550% 31WOM 1@] (B),W3) 1*T 66 20] Rm Sion Bora Prrwmawoe-.409,00 5m%- 3WOM Wurlrgthroixh2045 550% 317500 203,00 (51,03) 28000 W,OW 201 Rm dlon Bc n Prto aF45ne-8335Wi0O 49%- $5iO3_ Maturlrgthroixh200 525% 3164000 3310000 (15+,00) 3324500 MOT 4r aasw ONm[el Tax Bon6v. UdimaJTa Bonds 1WBsrwto-wrwer Mris Prt aF45ue-31iO3i01 31M03Wurrqthroixh20o5 450% 3175OB V50M (10,00) 32508 150,000 plane 47 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 7 - Long-term Debt (Continued) plane 48 n Principal Interest Mai Belldam Additions E)i 161e Wigs' Ri Baan BierAr6lae) Ending Ba4ns OneYear aovunrrencl acevnl® tcortmueg) Buunllg Autmrlty Fired Contmuenl need R and lrrprove'nern Bonds Arra ne-315nW 5m%- WurngNroign2O]5 645% 5 - 5 1"" 5- 1ee2 Pmn Irrprove'nern Boned ArrwntmFind -33oxi Wurlrg Nroign2W7 550% 5 - 195 W] (1275,Wl) - - 1ee3 Pmn lrrprove'nern Boned ArwrtmFind -33:000 595000- WurlrgNroign2WB 125% 5101,03 20[1 (275,Wl) 1R5W3 95" 252 Genual Oblgaaon Renaming Bored Arrwrtmddne-deMe" 2OF% Sff0,000- Wurlrgtnroign2W7 3W% 5)10,01 - 231501 231501 f,0.V Speoal A,e®mern Boned. 1WB5petlal<.t3mmm[ LlrntedTa Bands Arrourtmddne -sqg " Maturing NroignRW3 735% 5 - 75" MOW) - - 1 iE0 5petlal <.t3mmm[ Llanted Ta Bands Arrourtmddne-51,red" Maturing NruignR(XF5 750% 5/500 R250B0 MOU10) 150000 7501 1 900 5petlal <.t3mmm[ Llanted Ta Bands Arrourtmddoe-51,r50poo e5," Munrg NroignRW5 6fl[% Si lei (001) in" 85,01 r pial rdaseoblg:none Brain RecordsCorrparry-EIe6M ENlprrert rurtorddue-.M,dO5 Wtumg NroignRW3 10]% 5 - 195 (1951fi) - - Baasnaii nugy Cae ENlprreil 1237 loue-9i51iffV Wurnat h4[unrgtnroignRW] 25]96 599,]61- 205,510 Fiernme 1fiB090 38,08 Ir3439300 Cortese Bark aoueFire add Cnm Red* crdnm�nonsnem Arden rrwrtmddue-s;sW,Om MMUIig NrggnRW3 515% 5 - 231,01 (20,01) - - 1dsn Clxnrt Conn-Corrputer 3raensLamee Arrwrtmddne-31599m MMUIrg NrwgnRW4 215% 51351 39227 (25,873) 13351 133E Fear CoupNu Arrwrtmlerne-51MM Mardi di Fadden 2016 510% ri6w 12W,667 (31fi S7) 9`A dren 316W plane 48 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 7 - Long-term Debt (Continued) Principal Imuest Mawrro Beginning Mende are Wthh Pale Parges Rugg Balance Feel Ending Balance OneYmr Govenrmrtalacdvrtl®(corrtlmed) correnm Bark (cormnuelak Bre Trudwrtper 5f,SO MawmeBandd 2W,450 MMulig NrwglaRW) 3]896 $i,5tl 5 6I2159 5 (113A92) 5 193953 5 11793 Mix aga�ternnoblgaoow: General Iabl mina, worlan• mrmermt , andhmlthinnaance mlre 219,533 (m,o91 1325u4 - Cortpeim[elabse�' 7 19X939 7 121 31ANfi Teal gwennnneiRl a6Mne W,p 03 (4023916) Mfi 3017 fiU38 Bi uldreAnthornyB B Bulldlrg Fox Bonds. MBA 1999 MBA rm crazkclubl00 ¢Bonds o0.5ue-6905000 ff2i%- Natur h4[udrg NroigbR004 920% YA,OL 150,99] (50,D13) 1O]Dl3 50,013 19]] MBP Newburgh Village Bonds ArrwrnaHal WECOC99 Naturlmthroigh2W3 67 5 - 95,0)3 (as") - - 1912 MBA 8e02nmg Binds rumeaw-51,49s29 2m%- WturinVthruigh2W4 575% 519ff19 M515 (inddog 19P19 Tic 19 1996 MBA. Be02norg Bonds rumeaw-9m711 WturinVthruighRWS 4.70% 5 - M711 - M711 - 1995 MBA 8e02nmg Bonds Artountonlal-SQ99i955 30%- 59000)3 Naturmthroigh2015 520% $10,09 41339,955 (s)") 459955 900)3 19A MBA 8e02nmg Bonds ArtmanaHaue-5102100992 3ID 31300)3- Naturmthroigh2WB 415% 513509 Ai,O)3 (130,0)3) 61]0)3 133,0)3 "er Arpp)yandW YevaterSystenn Bonds 2IDWMu5llppband Wasbeel Spiem Revenue Bone Arroumeaoe-.s5099,Om 5125%- 5125,099- Meuligihrwgh2020 53]% 5150,09 48A,O)3 (13") 46750)3 1250.11 M WMU Supply and Wasbeelder 5Wem Revenue ReNndlig Bone Arroumeaoe-s9309Am 209%- �099- Meuligihrwgh2012 335% 51810" 9"" (900,09) 395O9 led" L®'deenedanouRonrelundlg (52]449 ®014 (W6 ) plane 49 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 7 - Long-term Debt (Continued) Bonnets typeanviteas (Continued) County sontrauosl oblgauone 19ddwasnecounysevage Capem-5ener w Arrwntatial 54349900 MMUIngthrmgh20s4 Sh1ePrvW lrg Furtl Lwn-N. Hurmealry/Poge taewweteneter Contra 3nten Anountblssre-514422001 MaWnathragh Ml opal 1sene0ball: Caxnernaidande- Fm CredlrrgrtbnSpiem Artounta 45ue-6291029 MMu9glhroah20s4 Other bryrerneml3aeole: General liability done waWns mrmereaton andh®Imlneul can Cwmer®[elabseri®' Trial bebeetype MrvRle Tonal gwemrrenhl and busme-rypeemrrtle G xanent note 19X Deal Ceebi Bonds Mgrnt Nlaue-97.500i(803 hffiuorgthroah Al9 Roll Interest Mal Bal Addable ouewtl.n Metal Ranges Fall reAMIa¢) Fn4bJ Mande oner®r 3096 3201 5 400,0.00 S W") 5 M" 5 2A3W3 520W3- 225% S25(00 900.11 (20,Wl) 34%33 2D 215% 512903 126,22[ tab del ) 129J3 42,9J3 M 219 (311,126) 112791 - 353m81225434649all Total 31W $ 3,268470 22,1,022 (2221,813) 19799993 2174211 5 22,293,69 5 (62'0746) 5 7625/967 5 EME2557 460%- $820,000 470% $50503 $ deal 5 (265,") 5 6315" 5 all Annual debt service requirements to maturity for the above bonds and note obligations are as fdlnvs: plane Gove m mental AcOVRies BusinesstypeActivities Printlpal Interest Total Principal Interest Total 31W $ 3,268470 $ 2,tn71,941 $ 5541,411 $ 1,911.162 3 778,314 $ 2689476 2005 3,515,38(1 2115,12] 5630.507 1643654 705,764 2,349,418 20M 3,010020 1975,579 5,015,599 1.429987 655262 2,085249 2007 1,815582 1,81 3,683,54fi 1479,987 606,007 2085991 2008 1,105000 1,793,975 2898,975 1624,987 552,191 2071 2009-2013 5,450,000 8231,406 13,681406 6,778,572 1,859,303 8,0 711 2014-2018 8,530000 6,452457 14,981 3,242185 siTues9 3,885,274 31192023 9,050000 4,194,525 13,244,525 911,874 71,831 983,705 3124-2028 8600,000 1935,fi63 10,535sel - - - 203 2030 3,300900 173,249 3,473249 Total $ 47,675,452 $ 31,011,805 $ 78687338 $ 18922408 $ 5872761 $ 24795169 plane City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 7 - Long-term Debt (Continued) Advance Refundings - During the year, the City issued $2,385,000 in General Obligation Unlimited Tax bonds with an average interest rate of 2.80 percent. The proceeds of these bonds were used to advance refund $1,250,000 of outstanding 1991 General Obligation Unlimited Tax bonds and $1,050,000 of outstanding 1992 General Obligation Unlimited Tax bonds with an average interest rate of 5.56 percent and 5.50 percent, respectively. The net proceeds of $2,358,846 (after payment of $26,154 in underwriting fees, insurance, and other issuance costs) was used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the original bond. As a result, the bonds are considered to be defeased and the liability for the bonds has been removed from the statement of net assets. The advance refunding reduced total debt service payments over the next five years by approximately $110,000, which represents an economic gain of approximately $104,000. In prior years, the City defeased certain bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust accounts' assets and liabilities for the defessed bonds are not included in the general purpose financial statements. At November 30, 2003, $24,290,000 of bonds outstanding are considered defeased. plane n Component Units Principal Interest Total 2004 $ 280,000 $ 289,864 $ 569,864 2005 295,000 276,602 571,602 2006 310,000 262,495 572,495 2007 330,000 247,455 577,455 2008 350,000 231,475 581,475 2009-2013 2,060,000 885,246 2,945,246 2014-2018 2,690,000 328,295 3,018,295 Total f 6,315,000 $ 2,521,432 $ 8,836,432 Advance Refundings - During the year, the City issued $2,385,000 in General Obligation Unlimited Tax bonds with an average interest rate of 2.80 percent. The proceeds of these bonds were used to advance refund $1,250,000 of outstanding 1991 General Obligation Unlimited Tax bonds and $1,050,000 of outstanding 1992 General Obligation Unlimited Tax bonds with an average interest rate of 5.56 percent and 5.50 percent, respectively. The net proceeds of $2,358,846 (after payment of $26,154 in underwriting fees, insurance, and other issuance costs) was used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the original bond. As a result, the bonds are considered to be defeased and the liability for the bonds has been removed from the statement of net assets. The advance refunding reduced total debt service payments over the next five years by approximately $110,000, which represents an economic gain of approximately $104,000. In prior years, the City defeased certain bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust accounts' assets and liabilities for the defessed bonds are not included in the general purpose financial statements. At November 30, 2003, $24,290,000 of bonds outstanding are considered defeased. plane n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 7 - Long-term Debt (Continued) No Commitment Debt - The City has issued Industrial Development Revenue Bonds and Economic Development Corporation bonds, under state law which authorizes municipalities under certain circumstances to acquire and lease industrial sites, buildings, and equipment and lease them to third parties. The revenue bonds issued are payable solely from the net revenue derived from the respective leases and are not a general obligation of the City. After these bonds are issued, all fimncial activity is taken over by the paying agent. The bonds and related lease contracts are not reflected in the City's financial statements. Information regarding the status of each bond issue, including possible default, must be obtained from the paying agent or other knowledgeable source. As of November 30, 2003, there is approximately $61,367,000 no commitment debt outstanding. Note 8 - Restricted Assets The balances ofthe restricted asset accounts areas follows: Buainesstype Govern nentaI Atnabes Aanaties Street 1990 Street hryrownent hryrownent C rnnu no Total Capital Project Capital Project Recreation Capital Govemnental Wateraod Fund Fund Project Fund Aaiaties Sewer Fund Caeh and neer equwalents Revenue bond reserves $ - $ - $ - $ - $ 2,790,123 Bond proceeds 631,930 1,414,729 598,421 2655,089 1028853 Total cash and near equivalents 631,930 1,414,729 598,421 2665,080 3,818,96 Assets held M Wgne County - 232,662 Reneivaue homwame County 197,407 197,49 Total restricted assets $ 631,930 $ 1,612,136 $ 539,421 $ 2,862,487 $ 4,051,638 Governmental Activities - The governmental activities have unspent bond proceeds relating to debt issued for the construction of streets and the Livonia Community Recreation Center. The City also has a receivable from Wayne County relating to street construction financed by the City on behalf of the County with bond proceeds. Business -type Activities - At November 30, 2003, the City was in compliance with the provisions of the Water Supply and Wastewater System Revenue bonds. Net assets have been restricted for $2,790,123 at November 30, 2003. plane 52 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 8 - Restricted Assets (Continued) Bond proceeds held in the amount of $1,028,853 in the Water and Sewer Fund relate to excess funds from the 2000 Water Supply and Wastewater System Revenue bonds to be used for future water and sewer obligations. Net assets have not been restricted at November 30, 2003. The City also has assets of $232,662 held at Wayne County that are restricted for future water and sewer obligations. Net assets have not been restricted at November 30, 2003. Note 9 - Risk Management The City is exposed to various risks of loss related to property loss, torts, errors and omissions, and employee injuries (workers' Compensation), as well as medical benefits provided to employees. The City has purchased commercial insurance for medical benefits and workers' compensation and participates in the Michigan Municipal Risk Management Authority (the' Authority"). The Michigan Municipal Risk Management Authority risk pool program operates as a calms servicing pool for amounts up to member retention limits, and operates as a Common risk -sharing management program for losses in excess of member retention amounts. Although premiums are paid annually to the Authority that the Authority uses to pay daims up to the retention limits, the ultimate liability for those daims remains with the City. The City estimates the liability for general liability, workers' compensation, and medical claims that have been incurred through the end of the fiscal year, including daims that have been reported as well as those that have not yet been reported. These estimates are recorded in the Self-insurance Internal Service Fund. The estimated liability for property loss, general liability, workers' compensation, and medical daims is recorded within the governmental activities and business -type activities columns of the statement of net assets. Changes in the estimated liability for the past two fiscal years were as follows: General LiaNiry Workers Conpenatam Medal Claire 2883 2X2 2W3 2X2 2633 7982 Estimated liabliry Beginnir6 ofpar $ 81 $ 6 ,W $ 1,52i[,3 $ 1,82b,716 $ S ,Wr $ 551,073 Esiirreied claims incurred, lndudng dung¢ in estimates 813,792 1,532312 35],2➢] 18l 0,69,6!5 0,651,]23 Claim rapnents1,2� (1,M, 3Wp11 (68678]5) 6 Esiirreiedliabliry- Endofpar 8 679,891 8 81 8 98.W3 8 I.524.S 8 329.913 8 538,163 planrc 53 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 10 - Pension Plans Retirement System Plan Description - The City of Livonia Employees' Retirement System (the "System") is a single -employer defined benefit pension plan that is administered by the City of Livonia Employees' Retirement System; this plan covers the following employees of the City unless they elected to transfer to the City's 401(a) defined contribution pension plan (see Note 11): 0 General employee members - All members hired prior to March 17, 1997 and their beneficiaries H Police lieutenant and sergeant members - All members hired prior to December 8, 1997 and their benefidaries H Police officer members - All members hired prior to November 24, 1998 and their beneficiaries H Fire fighter members - All members hired prior to duly 1, 1998 and their beneficiaries The System provides retirement, disability, and death benefits to plan members and their beneficiaries. At November 30, 2002, the date of the most recent actuarial valuation, membership consisted of 551 retirees and beneficiaries currently receiving benefits and terminated employees entitled to benefits but not yet receiving them, and 317 current active employees. The System does not issue a separate financial report. Contributions - Plan member contributions are recognized in the period in which the contributions are due. Employer contributions to the plan are recognized when due and the employer has made a formal commitment to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Please refer to Note 1 for further significantacmunting policies. The obligation to contribute to and maintain the System for these enployees was established by negotiation with the City's collective bargaining units and requires a contribution from the employees from 2.55 percent to 5.21 percent. The funding policy provides for periodic employer contributions at actuarially determined rates. Administrative costs of the plan are financed through investment earnings. plane 54 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 10 - Pension Plans (Continued) Annual Pension Cost- For the yearended November 30, 2003, the City's annual pension cost of $392,639 for the plan was equal to the City's required and actual contribution. The annual required contribution was determined as part of an actuarial valuation at November 30, 2001 using the aggregate actuarial cost method. Significant actuarial assumptions used include (a) an 8.25 percent rate of return, (b) projected salary increases of 4.75 percent to 12.67 percent per year, and (c) $240 increases annually in each of the first six years after retirement. Both (a) and (b) include an inflation component of 4.75 percent. The actuarial value of assets was determined using techniques that smooth the effects of short -tern volatility over a five-year period. The unfunded actuarial liability is being amortized as a level percentage of payroll on a closed basis. The remaining amortization period is the expected future worldrig lifetime. Reserves - As of November 30, 2003, the plan's reserves have been fully funded as follow: Legally required reserves: Reserve for employees contributions $ 8,977,045 Reserve for retired benefit payments 76,387,998 Additional reserves- Reserve for employer contributions 100,033,752 Total reserves $ 185,398,795 Fiscal Year Ended November 30 2001 2002 2003 Annual pemion cost (APC) If 645,335 If 417,464 If 392,639 Percent of APC contributed 100% 100% 100% Net pemion obligation If - If - If - plane 55 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 10 - Pension Plans (Continued) Postemolovment Health Care Benefit Plan Plan Description - The City of Livonia Postemployment Health Care Benefit Plan is a single -employer defined benefit plan that is administered by the City of Livonia Employees' Retirement System; this plan covers all full-time employees included in the City's Defined Benefit Pension Plan (1) retiring on or after December 1, 1979, (2) retiring under disability provisions, and (3) retiring before December 1, 1979 if the person has attained age 65. The system provides postemployment health care benefits to plan members and their beneficiaries. On November 4, 1998, the City created a separate plan to cover all postemployment health care benefits of all defined benefit pension plan and defined contribution pension plan members. After this date, all postemployment health care benefit contributions are recorded as revenue in this new plan (see Note 11). However, benefit payments will continue to be paid out of the Postemployment Health Care Benefit Plan as long as reserve balances remain. At November 30, 2002, the date of the most recent actuarial valuation, membership consisted of 551 retirees and beneficiaries currently receiving benefits and terminated employees entitled to benefits but not yet receiving them, and 317 current active employees. The plan does not issue a separate financial report. Contributions - Employer contributions to the plan are recognized when due and the employer has made a formal commitment to provide the contributions. Benefits are recognized when due and payable in accordance with the terms of the plan. Please refer to Note l for further significant accounting policies. The obligation to contribute to and maintain the system for these employees was established by negotiation with the City's competitive bargaining units and requires no contributions from the employees. The funding policy provides for periodic employer contributions at actuarially determined rates. Administrative costs of the plan are financed through investment earnings. As discussed above, there will be no contributions to the plan subsequent to November4, 1998. plane 56 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 10 - Pension Plans (Continued) Reserves - As of November 30, 2003, the plan's legally required reserve for employees' postemployment health care benefits has been fully funded in accordance with the actuarial determined contributions in the amount of $6,521,737. Fiscal Year Ended November 30 2001 2002 2003 Annual pension cost (APC) $ - $ - $ - Percent ofAPC contributed 100% 100% 100% Net pension obligation $ - $ - $ - Note 11 - Defined Contribution Pension Plan The City established a defined contribution pension plan under Section 401(a) of the Internal Revenue Code forthe following employees: I General employee members - All merrbers hired on or after March 17, 1997 1 Police lieutenant and sergeant members - All members hired on or after December 8, 1997 Police officer members - All members hired on or after Nover ber24, 1998 i Fire fighter merrbers -All members hired on or after July 1, 1998 In addition, the plan covers all employees electing to transfer from the City's defined benefit pension plan (see Note 10). plane 57 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 11 - Defined Contribution Pension Plan (Continued) In a defined contribution plan, benefits depend solely on amounts contributed to the plan plus investment earnings. As established by the City of Livonia through collective bargaining agreements, the City contributes a percentage of employees' earnings as follows: Employees Trdmtenmiram the New Employees Hired After the Befimtl Benefit Emotive Bates Pensim Plan NotedAbove Employer Employee Employer Employee Contributim Conuibutlon Contribution Cwhibutim General 12% 31%[0366% 1% 31%to 366% Pollee leutmants and sergeants 13% 521% 9% 521% Police 13% 5% 9% 5% Fire 13% 356% 11% 356% The employee contribution percentages noted above represent the minimum required contribution. Employees are permitted to contribute additional amounts up to the maximum allowed by law. The City's contributions for each employee (plus interest allocated to the employee's account) are fully vested after four years of service and are vested immediately for employees transferring from the existing defined benefit pension. In accordance with the above requirements, the City contributed $1,808,440 during the current year, and employees contributed $628,916. Note 12 - Postemployment Benefits Effective November 4, 1998, the City created the City of Livonia Retiree Health and Disability Benefits Plan. The plan provides medical and health care benefits, including hospitalization and disability benefits, for the welfare of all retirees and their spouses and eligible dependents. After November 4, 1998, all contributions related to postemployment benefits for all members of the Defined Benefit Pension Plan and Defined Contribution Pension Plan and their benefidaries will be recorded as revenue in the Citys Expendable Trust Fund. In addition, all contributions related to postemployment benefits for all members of the Defined Contribution Pension Plan are recorded as revenue in the City's VEBA Expendable Trust Fund. plane 58 n City of Livonia, Michigan Notes to Financial Statements November 30, 2003 Note 12 - Postemployment Benefits (Continued) Eligibility - All retirees of the Defined Benefit Pension Plan and their beneficiaries and future retirees who complete 10 years or more of credited service are eligible. Contributions - Employer contributions to the trust are recognized when due and the employer has made a formal commitment to provide the contributions. Benefits are recognized when due and payable in accordance with the terms of the plan. Please refer to Note l for further significant accounting policies. The obligation to contribute to and maintain the trust for these employees was established by negotiation with the City's collective bargaining units and requires no contributions from the employees. The funding policy provides for periodic employer contributions at actuarially determined rates. Administrative costs of the plan are financed through investment earnings. Annual Cost - For the year ended November 30, 2003, the City's annual post - employment cost of $4,960,217 for the plan was equal to the City's required and actual contribution. The annual required contribution was determined as part of an actuarial valuation at November 30, 2001, using the entry actual age cost method. Significant actuarial assumptions used include (a) an 8.25 percent investment ate of return and (b) projected 10 percent annual increases in premiums. Both (a) and (b) include an inflation component of 4.75 percent. The actuarial value of assets was determined using techniques that smooth the effects of short-term volatility over a five-year period. The unfunded actuarial liability is being amortized as a level percentage of payroll on an open basis. The remaining amortization period is 50 years for health and 30 years for disability. Reserves - As of November 30, 2003, the trust reserves for employees' post - employment benefits have been fully funded as follows: Reserve for health insurance $ 22,240,322 Reserve for disability insurance 669,062 Total reserves $ 22,909,384 Fiscal Year Ended November 30 2001 2002 2003 Annual pemion cost (APC) $ 4,318,306 $ 4,575,001 $ 4,960,217 Percent of APC contributed 100% 100% 100% Net pension obligation $ - $ - $ - plane 59 n Required Supplemental Information 1�11alllaon 1110, City of Livonia, Michigan Required Supplemental Information Budgetary Comparison Schedule - General Fund Year Ended November 30, 2003 plane 60 n Maronce.nd Original Budget Fnal Budget H<Wa' Fina'Bute1 1@venres Prcgerty Taxes 8 26.817,85 8 26.617,855 8 25.8929P 8 (124,938) Lkemes and Permits Business 185,000 105,400 118781 5,381 Nonbusiness 1525200 ', 288 I,E63,9'Y (61248) Total licenses and termts 1638600 1,638688 1570,65 (55944) Intergoverranenlal Revenue Stale and local 188684]! 18850,4W 18,mgm (761,572) Federal 5,800 5,000 5,5a 5a Total idergovemnrental revenue 1trrrz' ] 18855,421 18098,485 (755,991) Charges to services 5,368,6'9 3,2]6,659 3283,658 (73,009) merest ]25000 M'000 517,821 (207,179) Rnes and Fanenures 3,380,000 3636,400 3299,46] (38(,521) Miscellaneous Revenue Rent and rorneties 7131,096 721896 ]94}42 13,245 Ste of fixedasets 258800 258000 119,65 (138345) Other mecataneore 1149,K6 1®1906 1018,0Z] (273872) Total mecataneous revenue 2788422 2,]23002 2332024 (390972) Total revenue S 50,768,013 S 48924,:53 S 46y19,021 S 272855211 EipenmWres General Government Legislative: cityco al s 32(um s 325244 s 31xB18 s 1z431 CityClerk 5zs,sm 2sam a ,,056 63744 Elections 256.412 Z`b,413 218,]4] 37,fi6(3 Total legislative 1;111300 111845s 9966b 113,&4 Ldcal 2,44(309 2,M6059 2}44,172 101887 Executive Mayor's office 221100 221;160 207,60 13,55/ PuknFiaVative seMces 27x181 272,181 278192 1,989 Taa'executive 493341 493,341 4217% 15,5 Hurran resources Ubx relations 147,200 U7200 87,343 59,88] Cad servce 748,310 748310 tinrad6 7832 Tdd lurnernresources 895,510 895510 765341 138109 plane 60 n City of Livonia, Michigan plane 61 n Required Supplemental Information Budgetary Comparison Schedule - General Fund (Continued) Year Ended November 30, 2003 Wane with Original Budget Final Budget Actual Final Budget E:penmwres (Continued) Geneml (3o arnment (Continaeal Financed administration_ Accounting $ 081 $ 4)3257 $ 384,215 $ 19,042 Becoming 481,28 01288 671201 18,886 Finance 26!,825 3!,825 256564 8,261 Intlzpendentaucit 61,68[ 07,601 02882 6,719 Board of Renew 6,191 6,191 2]© 1,40 Treasurer 535751 5 ,757 51193) 23818 Dale processing 531191 531;191 683851 67,3E0 Total fronded adnnistratim 2268110 2,38110 2,153,373 116,731 O[heractiMis: Legal 6887N 008718 597,861 3,7W !hilitis and surfiis 553385 aiB3 517,596 35]89 Acquisition of and 11,000 11,000 3,6/3 7,321 Research antllmestgaton 26,000 26,000 26,000 Read board 268 2,658 1983 75 Duesannsuo- igona 52ooe 52,000 45,178 6,830 Total other actlrities 12USO 1M,813 1,189,63 54,600 Total general government 8,458,161 8,65]291 ],9z6,]00 538591 Puac Wei Pdi<e Tragic bi 6561tt 735120 735,(W64 56 Pffininistration 3572756 3,357,855 3,318,961 389tl3 Detective bureau 2282730 231)1 2,305,210 3 Autnmaive aeMe 36285 362,050 353,517 8,43) cnmm�n�9ons-Re<wd: bureau ]99,63) 718,651 661,656 50,95 Crying guard: 63831 0,037 51,394 11,643 Darersrnnd oaann 42793) 446699 460,700 (1) Reserve pdice 313,731 312,931 3M,761 8,1n Patrol bureau 9878132 9,3)1632 9,005,631 15,001 Intelligence bureau 1001,974 181,`4974 1684,861 iW Total oce 19,748,1@1 19,88188 19,]48,]82 133,33) Fire Poministration 731,1V 717,968 769964 B4OW Firefighting 8085,336 8,%1}45 8,6(23W 3) Fre pevention 471,081 N3512 573,319 193 Total fire 9,693,530 9,'!53825 9,945598 8,235 Protective inspection: Bunning Coce Board ofApp®Is 1,392 1592 ]21 671 Inspection 1175,076 1,175,006 1888815 86261 Total potectrve inspecton 1176,483 1,176,469 1,88953] 86,931 Total Iskly 30618,13 31,812073 38783.983 228564 Pnacwerks Other protective: Office of Enmrgenq Prelerediegs 3),874 57,874 51,436 6,43) TraRi<Commsim 6,784 6,784 5,700 1,03 Total other protective 64.658 64658 57142 7515 plane 61 n City of Livonia, Michigan plane 62 n Required Supplemental Information Budgetary Comparison Schedule - General Fund (Continued) Year Ended November 30, 2003 W aee with Original Budget Fnal Budget Hdua' Final Budget E:oenmwrg(Continued) Panic works (Coidnuec) Pubicsoraces- Hignamys,streets,and innindenance Engi eerrg 8 615,332 8 68,332 8 0]815 8 ii Hdnnstration 5,879 189]8 6,W] 0,311 E4iprent innaidenance (121,211) 1289 362 92] Binding nn^tenan<e I,]MM 1,631,921 1087,898 1M,831 Street lgnng 33f,291 ddd 9i 251,097 82]91 Wintenance Streets 1,891 17,940 1,825 16,ifl TraH<serviss 89,gW 88,038 38881 58,379 Fw¢try 49,591 33j 1 33,513 Tidal and seraoin Hghwa}s, street; am innindenance 2,]2],69 2,]29]29 22 d% 073,251 Tidal add wwk 2,]9233] 2,T J87 2,311 088767 Recreation and Cmwral Parts and recreation: Cef<oae 3n5,w - - - Pirfaeaimenance 1po4,522 1, W,an 1264,x5 136,em ammianation 580v Si6,013 45Dm 125]5 Recreation fa<ifties 32866 32,888 31,9% 11 SWimmirg"a PI,935 231,617 22854 11,85 Reaeaton atfati¢ 195,022 W0611 136,261 6,338 Recreation lxogrmrs 65.714 6],]00 50279 13,53 Tidal teris am recreation 0226822 2,050, 2,159,711 2b,83f CulWra: Hanna Presemtion Commison 5,333 5} 28v 2521 Hi Cidnision non 82806 78986 11,948 linarycidnision 6588W 00,000 6588W - MsCommiaion 28643 20,643 11 1,270 Husren Labor Relations ],]8 ],]58 6,53 1,253 Youth Cion ion 9,656 9,655 8,053 1,20 Cion inion on aging 28125 20,125 15,85 0,579 Coemintyresoudes 91 %8989 891 569'P Totalcuitural 1]4],314 1,707}58 1,141,514 ]9,]4 T otal recreation and cuitural 591 0,M1,895 3,82/,299 370,5% Canmuniq and Ecmanic oevebpnent Cily Planning Cion inion 688,591 B38$91 661,891 6,714 Zoning Board ofAnpeals 12],53] 128,387 189,]9] 11 Tidal <ona�n9yand e<ononai< tlzvelopnent 816,12b 8169]8 ]91,681 25,24] Ennii Benefits, Insurance, and OMer 2,181 2,48516 1891,30 649,213 T otal expenditures $ 51 $ 49,623,508 $ 41 $ 2289.028 plane 62 n City of Livonia, Michigan Community Recreation Original Final Vanexe with Budget Budget P ual Final Budget Revenues Pmpartytaxes $ 3,355,800 $ 3,355,800 $ 3,333396 $ (22,404) Charges for services 1523,625 1523,625 1,836,849 313,224 Interest - - 69,763 69,763 Miscellancus revenue - - 216 216 Transfers in 500,000 500,000 83,651 (416,349) Total revenues 5379,425 5,379,425 5,323875 (55,550) Expenditures 5andabon - - - - Recreatonand culture 2,916,541 3,070,478 2,551858 519,420 Transfers out 2,032,078 2,032,078 2,005,799 26,279 Total expen5tures 4948,619 5,102,556 4556,857 545,699 Excess of Revenues Over (Under) Expenditures 430,806 276,869 ]6],018 490,149 Fund Balance- Beginning ofyear-As restated 3,332,]1] 3,332,]1] 3,332,717 Fund Balance -Endof }ear $3,763,523 $3,609,586 $4,099,]35 $ 490,149 plane 63 n Required Supplemental Information Budgetary Comparison Schedule Major Special Revenue Funds Year Ended November 30, 2003 Refuse OMinal Final Vanance with Budget Bud3et Actual Final BLKIWt $ 11900,159 $ 11,000,159 $ 10,927,653 $ (/2,506) 90,000 90,000 13s,719 49,719 60,000 60,000 77,613 17,613 5,000 5,000 130,330 125,330 11 155,159 11,155,159 11,275,315 120,156 12,49306 12,601,671) 10,774,675 1 U6,9% 12,49306 12,601,671) 10,774,675 1 U6,9% (1342,147) (1,446511) 500,640 1947,151 4,143,509 4143509 4143509 $ 2,901,362 $ 2,696,999 $ 4,644,149 $ 1,947,151 plane 64 n City of Livonia, Michigan -Valued using the &year'snmoned fundingrrerlet value Required Supplemental Information Annual Year Ended Required Percentage November 30 Pension System 1998 $ 2,798,760 100 1999 Schedule of Funding Progress 837,116 100 2001 645,335 100 2002 417,464 100 (000s omitted) 392,639 100 The information presented above was determined as part of the actuarial valuations at the dates indicated. Additional information as of November 30, 2002, the latest actuarial valuation, follows: ummnded Actuarial Actuarial unfunded Funded (Dverrunded) Actuarial Value of Accrued Lialulay (Dvermnced) Ratio Covered A asa Valuation Assets (ML)En"Age A (uAAL) (Percent) Payroll Percentage of Date (a) (b) (na) (alh) (0) Covered Payroll 11IMN $ 168,884 ` $ 148,806 $ (21,078) 1135 $ 20,598 [975) 11/3058 1H'On ` 151,085 (25,950) 1172 20,653 (1256) 11/30'% 184]82 ` 149,052 (35T.x1) 1240 18,684 (1912) 11130'00 192,4n ` 148,6]0 (43,807) 129.5 17,132 (2557) 11130'01 210,937 ` 151,438 (49,499) 132.7 16,721 (2960) 11130'02 199,627 ` 159,2n (40,355) 1253 17285 (2335) -Valued using the &year'snmoned fundingrrerlet value Schedule of Employer Contributions Annual Year Ended Required Percentage November 30 Contribution Contributed 1998 $ 2,798,760 100 1999 1,919,594 100 2000 837,116 100 2001 645,335 100 2002 417,464 100 2003 392,639 100 The information presented above was determined as part of the actuarial valuations at the dates indicated. Additional information as of November 30, 2002, the latest actuarial valuation, follows: Actuarial cost method Amortizgtion method Remaining amortizgtion period Asset valuation method Actuarial assumptions: Investment rate of return Projected salary increases, including inflation at 4.75 Cost of living adjustments Aggregate Level percent, closed Expected future working lifetime 5 -year smoothed market 8.25 4.75%-12.65% Up to $240 annually for up to the first six years after retirement plane 65 n City of Livonia, Michigan Required Supplemental Information Postemployment Benefit Plans Schedule of Funding Progress (000s omitted) The following schedules include both the Postemployment Health Care Benefit Plan and the Retiree Health and Disability Benefits Plan: `Valued using the Syear'sr oothed fundingvarlet value "In furcation not available Schedule of Employer Contributions Actuanal Actuarial Year Ended Funded Percentage November 30 Actuanal Value of Aocrued Liability Unfunded Ratio Covered UML as Valuation Assets (ML)En"Age AAL(UAAL) (Percent) Payroll Percentage of rate (a) (b) thus) (A) (0) Covered Payrull 11/3W7 E 15286 ` E 0.5,584 E 39,318 33.4 E 28,592 1862 11/3858 23250 ` 51,118 H'am 45.5 28,989 961 11/3859 24,360 ` 61,35] 36,997 33.7 30,3]5 1218 11/3N00 25,337 ` 71,464 45,127 35.5 31,523 1,453 11/3N01 1113002 `Valued using the Syear'sr oothed fundingvarlet value "In furcation not available Schedule of Employer Contributions # Contribution made to the Postenployment Health Care Benefit Plan ## Contribution made to the Retiree Health and Disability Benefit Plan plane 66 n Annual Year Ended Required Percentage November 30 Contribution Contributed 1998# f 2,255,501 100 1998## 1,418,379 100 1999## 3,066,032 100 2000## 3,542,404 100 2001## 4,318,306 100 2002## 4,575,001 100 2003## 4,960,217 100 # Contribution made to the Postenployment Health Care Benefit Plan ## Contribution made to the Retiree Health and Disability Benefit Plan plane 66 n City of Livonia, Michigan Required Supplemental Information (Continued) Postemployment Benefit Plans Schedule of Funding Progress (000s omitted) The information presented above was determined as part of the actuarial valuations at the dates indicated. Additional information as of November 30, 2002, the latest actuarial valuation, follows: Actuarial cost method Entry age Amortization method Level percent, open Remaining amortization period: Health 50 years Disability 30 years Asset valuation method 5 -year smoothed market Actuarial assumptions: Investment rate of return 8.25 Projected annual premium increases, including inflation at4.75% 10% plane 67 n City of Livonia, Michigan Notes to Required Supplemental Information November 30, 2003 Note 1 - Reconciliation of Budgeted Amounts to Basic Financial Statements The budgetary comparison schedules for the General and Major Special Revenue Funds are presented on the same basis of accounting used in preparing the adopted budget. Following is a reconciliation of the budgetary comparison schedule to the governmental funds (statement of revenues, expenditures, and changes in fund balances): Major Special Revenue Funds General Fmtl Communry Rea®ton Refuse Todl Taal Todd Taal Taal Twa Revenue Fspenames Revenue Fspenames Revenue Fxedrituies Arrou,d per operates statement $ 4414.021 $ a5.n3,69s $ 5,2a0224 $ 2,551058 $ 11215815 $ 10.7FFa,�5 Operating transfers Wd3eted as revenue and expenmures wa200 2,050816 s3651 2,005,159 - Amounts per wyet statement 8 4.919,021 8 m,50,1512 8 5,323815 8 0.56851 8 11215,315 8 10.1]0,6]5 Note 2 - Budgetary Information Budgetary Information - Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for the General Fund and all Special Revenue Funds except that operating transfers and debt Proceeds have been included in the 'revenue" and "expenditures" categories, rather than as "other financing sources (uses)." All annual appropriations lapse at fiscal year end; encumbrances are not included as expenditures. During the year, the budget was amended in a legally permissible manner. The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1. On or before September 15, the mayor submits to the City Council a proposed operating budget for the fiscal year commencing the following December 1. The operating budget includes proposed expenditures and the means offinancing them. 2. Public hearings are conducted to obtain citizen comments. 3. As provided for by the City Charter, not later than November 1, the Council shall adopt the budget through the passage of a budget resolution and transmit the budget to the mayor. Not later than November 15, the mayor shall either approce or disapprove the adopted budget, in whole or in part. plank 68 n City of Livonia, Michigan Notes to Required Supplemental Information November 30, 2003 Note 2 - Budgetary Information (Continued) 4. The legislative budget is adopted at a functional level for the General Fund, and at the fund level for other governmental and proprietary funds. The budget document presents information by fund, function, department, and line items. Management may amend the budget at the detail level within the legislative summary constraints. Appropriations that exceed the summary budget constraints require City Council approval. Excess of Expenditures Over Appropriations in Budgeted Funds - The City did not have significant expenditure budget variances. plane 69 n Other Supplemental Information 1�11alllaon 1110, City of Livonia, Michigan 70 Gants aJ W Street Cade Pudi<Skly X4jor Sheets Lou' Streets Lighting Telemson Libary Commmialim Amets Cash andinvestmmnts 8 ZlAu 6 8 ]]9.9113 8 103]9] 8 1.250.103 8 513,730 8 1,1],N] Rea vabes: Taxes 9382 SPecia' asesments - - 710 Other 6,93E 70 37,931 Due km other find Due km other govermrenlal units Y ,219 270208 361;186 ResVi<@tlasets T otal assets $ 2,860,199 S 1,0E,2M $ 505,697 S 1250,103 $ 43,186 S "MA78 uaMillms and! Fund Balances Liabilities Accounts Mnabe 8 ]32d1 8 93,187 8 145115 8 11,'9] 8 03.011 8 881 Accmedand other liablities - - 19}7 5,W6 09,753 - Dekrtedrevenue - - 139336 - 8,012 - Duetootherfind Total hablties ]3241 93187 3M,M8 P,73 100,n6 881 Fund Balances Resmaedracaptsl<ncswdion - - - - - - unresemd-undasigmted zmusn8 961039 201,649 I,z32530 42,410 1} 5w Total Nnd Wlanss zmusn8 961039 201,649 IM530 42,410 1} 5w Tntsuiablitesand Nnd Wlances $ 2,860,199 S 1,054,2M $ 505,697 S 1250,103 $ 43,186 S I, MA]8 70 Other Supplemental Information Combining Balance Sheet Nonmajor Governmental Funds November 30, 2003 sgecial Revenue Fina; Dort seMce Funce MuniciMI 6uildng aqudcaled 199osrreel sgecal numoriryane Wayne Counry Forro6ures R®a; andsida.alse unan+enem Assessments Omer Connection Rale 8 658,TA 8 1j 1,919 8 29.126 8 22 7M 8 114j 8 - 16,315 3$ - - 127,M6 26,966 S 656,399 $ 1,40226,1 $ 32}92 $ 3MAN $ 141501 $ 8 41,W] 8 191j 1- - 6$10 2,]66 118,M - - 1ss 47,9n 200201 2,186 118,M 1,165 - 610,422 1202,063 23,6M 236,061 140,336 - 610,422 1202063 23,6M 236,061 140,336 S 656,399 $ 1,402264 $ 32}92 $ 354,800 $ 141501 $ plane 71 n City of Livonia, Michigan Assets Cash adinvestments Re@Wbes: Taxes Species assessments Ocher Due horn other find Due horn other govemunaal cock Restri<tecesets T OUlasets Liadliies and Fund Balances Liabilities A¢ouds Mnabe namedand other hatelites Deferredrevenue Due to other Funds; Taal gamines Fund Balances Reservenroraapel conswdion Unreserved Undasigmied Tobl Fnd Wlanss TOUlliablitiesand Nnd Wlances Orange Cd(Course Sheet Pr%eds 19'A Street Ca Pial Ca Pial InneTnvemea Coravucton ImPre+erna Fre Station ImPre+erna ImPre+erna SS b9 Iil1Y30 - 1, ,N/ 23,800 - 112'm - 70,TY2 190,109 2,OQ W 01,930 112'm 1,555]0] 70,]22 190,109 2,OQ W $ 651,9311 $ 112239 $ 1,612136 $ ]0,3]1 $ 190,109 $ 2073,74 72 ]0,3}2 8 190.109 $ 2,0]3,]53 01,930 1612,136 $ 651,9311 $ 112,239 $ 1,612,136 $ 70,3]1 $ 1911,109 $ 2,08,]4 $ - $ - $ 55}59 $ - $ - $ 29.800 SS b9 Iil1Y30 - 1, ,N/ 23,800 - 112'm - 70,TY2 190,109 2,OQ W 01,930 112'm 1,555]0] 70,]22 190,109 2,OQ W $ 651,9311 $ 112239 $ 1,612136 $ ]0,3]1 $ 190,109 $ 2073,74 72 Other Supplemental Information Combining Balance Sheet (Continued) Nonmajor Governmental Funds November 30, 2003 plane 73 n cammwlly Trial Nw�jw Special BUIUM Recrmtiw CwNBuildng C rnmedA r e%menb imuwememg Cwgvudiw lWmemenb Funa; s 2175 s - s - s 5% s 11,m8,395 961 696j18 ]b,368 M 933 26,966 ,361,653 598621 2,HG2A87 $ 824p0 $ $ 598pm $ 514 $ 16,n1,n1 8 92613 8 - 8 213,W 8 - 8 97518 - - - - 75,M 526,092 - - - Wb 25,803 26,966 619,105 - 236,871 - 1,903,709 359, 0 - 2,S 8j61 204,%7 - - 5% 11F ,755 206,937 359550 5% UAB'022 $ 824,182 $ $ 598A21 $ 514 $ 16,H1,n1 plane 73 n City of Livonia, Michigan 74 Special Revenue Fund cradle add 6ao street Quo Pum<Sa%m, Wjm Streets Local Streets lighting Teleuisim final Communication Rimsermse Propetylaxe 8 - 8 - 8 - 8 - 8 3,x32,558 8 Specialmovements - - 820,964 - - Intergovernmental revenue Slate am load 4, 2H9 1,724,E69 395,670 Federal - - 1,352055 - - - clargesfor SON es - - 50,3]8 - 272,m5 x982xx I merest 23,175 11 2,302 11 15,517 13,833 Fines and forfeitures - - - - 81'11 Miscellaneous revenue 10,713 - 52,150 52],]16 - - T otal revenue 0606j7 1,701,166 2,681 WM 3,8D1191 511 Expandlwre: Pudicvkty 220,857 - - D2j51 Pudicworks 250],]60 2,215,627 806659 - - - RecreationandculWre - - 405,813 520,101 3,]]0,3il - Communiryande<odom< 1157,126 - - - Qpuloulhy - - - - - - Bad - Principal retirement - - - - - - BaN-mterestandmeer Total expenawres 2507,760 2,215,627 2596,x55 524,101 37nx,2s3 302581 Excel of Dreman Own (under) Expendilure 2,o9B,797 (nx,x59) 91 20,273 29,928 ;➢9516 rnher financing Sour« (uses) Proceed hommeieuance of long term dela - - - - - - Paymemmleruncedmddescro.agem - - - - - Transfers;in - iM'w - - 6 'oo - Transrersan f15x89o71 1 Tmal othergmnang sources suses) (15x890 (BBO 1i Net Change in Fula Balance 519890 (829951) 3217 20,279 197,768 799516 Fula Balarees- Beginning of year -M restated 2237,028 1]65$93 leal 1212251 22x,612 1;'5,081 FUNBalarees-Endofyear $ 2,786,918 $ 961,039 $ 201,6419 $ 1232531) $ x22.410 $ 1,354,59] 74 Other Supplemental Information Combining Statement of Revenue, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds Year Ended November 30, 2003 6Re<ia Revenue Funa; - oeasemce Fina: 240,000 1101667 - ngmmtea Rma;ana 1%Mreet aReaal MmiaMl suians Mr0cmmy FwWures slid alb ImOr "nt A mmenb AdM1 ril andOther CmnKtiim Rate w4561 4,5n e4] 1261,W6 268080 3109s59 8 - 8 3,] .W 8 119474 8 - 8 - 8 - - - - 83,015 - - 171 Y£ 9,716 22,9M3 E6Y 9,619 615 186 1]1M 8!8!8 13582 13]}58 3,8!1,588 1;195,1'% 9263! 615 186 564551 0,52 8f] - - 1070,OW 240,000 1101667 - 191,816 28080 2,W7,E9z w4561 4,5n e4] 1261,W6 268080 3109s59 (127203) (6W,35) (65,ffi1) (175.E46) (3,12914) 186 - - 2, ,,DW - - - - 397,682 3,169j58 - I34]W) 1,8K,102 26,14 397,482 3,189558 (347W) (127283) 1,202863 (39,667) 221956 614 (N,417) ]3],625 - 69,271 14,105 139692 N,5P $ 610An $ 1202063 $ 29,604 $ D6,061 $ 140,336 $ plane 75 n City of Livonia, Michigan Rimserme Proaaylaxes aPecial movements Intergovernmental revenue: State and local Federal Clerges for SON aes I merest Fines and MkiWres Miscellaneous revenue Total revenue Expenditures Pudicvkl Pudic works Recreation and culture Community and economic develornmed (spin omay oeN- Principal retirement oeN-mler¢lanameer Total exBonatures Excessd Rimemen over (under)Expena lures rnMr Ransi g sources (uses) Provisions finnihe issuance of long term dN Payment to reNnda bcna escrwv aged Trangkrs in Trangkrs out Total other financing sources (uses) Net Charge in fund! BaNnces fund! Balances;Beginningofyem Oes restated Fund Balances- End ofyear Capbl Projects Fund Drainage cefcarse Street Projects 1990 street NOW NOW Improvement congwcton Improvement Fre station Improvement Imprmemd - - - - vo,6zo - 1,218 1,s36 18,107 942 2,196 90,235 4 1,218 1836 18,107 9,16 132816 90,235 - 44061 Bck 3 - 81,836 1479,524 - 189,211 (SW Wo) 2593 44061 Bck 3 81,836 1479,524 3,816 (42625) (15,ffi5) 946 1,218 (4262) (15,825) 946 4498u (1am,m9) 4000W (3974re) - - - - 189,211 (SW Wo) 2593 2139,211 3,816 (42625) (15,ffi5) 946 44980 (11W,M) 648,1W 1548fd 15522612 691376 115,129 3,2D107 $ 651930 $ 112,219 $ 1,556,181 $ 10,322 $ 190,109 $ 2,043,945 76 Other Supplemental Information Combining Statement of Revenue, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds Year Ended November 30, 2003 Communl Trial Nw�ju Special Buil&g Recreaiim CouN BUIUM C rnmedJ �mmenb lir menb cwstruaion lmuw "qs Fug $ - $ - $ - $ - $ 8,ao2,489 434824 - - - 1 M2 803 6,832,812 533521 'L13P 51,9!2 2'D 42971 236 m282 5269 26,]9] Fo l,]38 515',43 2'D 42971 236 2P,D8243 1,8319]9 10, G ,M 4,] ,M 1,15],126 NS - 6588111 18,2511 8,X519 2,41166] 93,741 2,328]29 NS 93,741 6588111 18,2511 D,' ,758 515,698 (93,448) (6537,148) MOM) (9,16507) - - - - 2,385,000 - - - - (2358,846) - - - - S,w1246 (403,00 (5,157,18 (403,00 3,470215 112,098 (93M8) (6537,148) (18,9v) (6,306292) 92893 93,448 6896690 18,5D 211,674,314 $ M1 97 $ $ 359,558 $ 514 $ 14,368,02 plane T7 n City of Livonia, Michigan Other Supplemental Information Combining Statement of Net Assets Pension and Other Employee Benefit Trust Funds November 30, 2003 plank 78 n Empigoes Retirement VEBAUpencable Sstem TmA Total Assets Cash and cash egiivalents $ 56,451 $ - $ 5SW Imeshnents: U S gmemment securdk:s 29,135,070 - 29,135,070 Common stock 86340,208 - 86,340,208 Corparab bonds 41666,639 - 41666,639 Foregn stock 720,563 - 720,563 MUWal tams 17,815,089 22,442,715 40,257,804 I mestments held by bmkerd aler and banks order secunties loans: US. government sewnties 5,494,239 - 5,494,239 US. carporate fixed income 3,474,095 - 3,474,095 US. equities 7,812,655 - 7,812,655 Sacunties lending shortterm cdlateral - bankinveslmentpod 17,335,693 - 17,335,693 Other receivables 1,100,637 472,892 1573,529 Total assets 210,951339 22,915,607 233,866,946 UaNlities &counts payable 872,571 6,223 878,794 &cmed and other liabilities 822543 - 822,543 Amounts due to boker under secunties lending agreement 17,335,693 17,335,693 Total liabildk:s 19630607 6,223 19,037630 Net Assets - Reserved Employees Retirement System 185398,795 - 185,398,795 Employeesposlemployment health care and disabildy berelds 6,521,737 22,909,384 29,431,121 Total net assets $ 191,920,632 $ 22,909,384 $ 214,929,916 plank 78 n City of Livonia, Michigan Other Supplemental Information Combining Statement of Changes Net Assets Pension and Other Employee Benefit Trust Funds Year Ended November 30, 2003 Additions I mestment income: Interest and dividends Net appreciation in air value of ionstinents Less imestinent expenses Net investment indame Securities landing incone_ Interest and fees Less borrower rebates and bank kes Total kndiny indnme Contributions: Employer Empbyee Total contributions Total additions Deductions Bereft payments Medical bereft payments Refunds of contributions Total@ductions Net Increase Net Assets Held in Taut br Pension and Offer Employee Benefits BNinniNofyear End of year 79 Empbyee5 WBA Retirement Expendable sMem Trost Total $ 6,865,664 $ 367,517 $ 7,233,181 17,944 209 1914,468 19,858, 6A (375,530) (33,949) (409,479) 24,434343 2,248,036 26,682379 311680 - 311,680 (276,413) (276,413) 35,267 - 35,267 392639 4,960,217 5,352,856 586,066 586,066 978,705 4,960,217 5,938,922 25,448315 7,208,253 32,656,568 10,070,752 - 10,070,752 3,775,198 330,255 4,105,453 364784 - 364784 14,210,734 330,255 14,540,989 11 237,581 6,877,998 18,115,579 Unti 951 16,031,386 196,714,337 $ 191,920,532 $ 22909,384 $ 214,829,916 plane n