HomeMy WebLinkAbout2004 Annual Financial ReportCity of Livonia, Michigan
Financial Report
with Supplemental Information
November 30, 2004
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
2658
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
2658
Required Supplemental Information
Budgetary Companson Schedule - General Fund 59-61
Budgetary Companson Schedule - Major Special Revenue Funds 62-63
City of Livonia, Michigan
Contents (Continued)
Required Supplemental Information (Continued)
Pension System:
Schedule of Funding Progress
64
Schedule of Employer Contributions
64
Postemployment Benefit Plans:
Schedule of Funding Progress
65
Schedule of Employer Contributions
65-66
Notes to Required Supplemental Information
67-68
Other Supplemental Information
Nonmajor Governmental Funds:
Combining Balance Sheet
69-72
Combining Statement of Revenue, Expenditures, and Changes in Fund
Balances
7376
Fiduciary Funds - Pension and Other Employee Benefit Trust Funds:
Combining Statement of Net Assets
77
Combining Statement of Changes in Net Assets
78
plate n
moran
Independent Auditors Report
To the Honorable Mayor and
Members of the City Council
City of Livonia, Michigan
Plante B Moran, PLLC
27400 NM tem HghwW
PO. ew am
SMhfiep, MI 43S 037
rd 24a25225a
Fav 243962W13
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, 2004, 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, 2004 and the respective
charges in financial position and cash flows, where applicable, thereof for the year then 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.
J
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.
In accordance with Gommment Auditing Standards, we have also issued our report dated
February 18, 2005 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 Gommment Auditing
Standard's and should be read in conjunction with this report in considering the results of our
audit.
q&& I PLLt.
February 18, 2005
City of Livonia, Michigan
Management's Discussion and Analysis
Overview of the Financial Statements
The City of Livonia, Michigan's 2004 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, proprietary 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. All of the current year's revenues
and expenses are accounted for in the statement of activities regardless cf when cash is received
or paid.
The two government -wide statements report the City's net assets and him they have changed.
Net assets, the difference between the City's assets and liabilities, are 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 non-
federal 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.
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 otherfnancial 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 you determine if there are
more or fewer financial resources available to spend in the near future to finance the City's
programs.
0 Proprietary Funds - Services that are intended to be entirely self-supporting by customer
fees are generally reported in proprietary funds. Proprietary fund statements, like
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. We exclude these activities from the government -wide
financial statements because the City cannot use these assets to finance its operations.
City of Livonia, Michigan
Management's Discussion and Analysis (Continued)
The City as a Whole
In a condensed format, the table below shows a comparison of the net assets as of
November 30, 2004 to the prior year.
Net Assets (in millions of dollars)
Gmernmental Mhvnes Busiresslype Mbvites Total
2004 2003 2004 2003 2004 2003
Asseb
Current set other assets $ 472 $ 458 $ 248 $ 265 $ 720 $ 723
Cagtal assets 1616 1685 824 821 2440 2426
TRal assets 2088 2063 1072 1086 3160 3149
Liablities
Merliatalities 92 87 35 39 127 126
Longterm liadlites 543 565 176 198 719 763
Total liabilities 635 652 211 237 846 889
Net Assets
ImesMincagtalassets -
Not ofrelat debt 1188 1145 661 644 1849 1789
Restnded 200 176 194 280 39.4 376
Unrestnc 65 90 86 85 71 95
Total net assets $ 145.3 $ 141.1 $ 96.1 $ B4.9 $ 231A $ 226.0
City of Livonia - Net Assets
The City's assets exceed its liabilities at the end of the fiscal year by $231.4 million (net assets).
However, a major portion (80 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 illiquid and not available for future spending.
Unrestricted net assets of the City decreased from $9.5 million at November 30, 2003 to $7.1
million at the end of this year. The amount represents the part of net assets that am 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 government as a whole, as well as for its separate governmental and business -type activities.
5
City of Livonia, Michigan
Management's Discussion and Analysis (Continued)
The following table shows the changes in net assets during the current year, and as compared to
the prior year.
Changes in Net Assets (in millions of dollars)
6
Govemmental Activilies
Businessty"Activdies
Total
2004
2083
2004
2003
2004
2083
Revenue
Program revenue:
Charges for services
$ 167 $
128
$ 256 $
276
$ 423 $
404
Operating grants and
contributions
91
82
-
-
91
82
Capital grants and
contributions
05
01
13
08
18
09
Gereral revenue:
Properly taxes
50.0
485
-
-
500
485
StaRshared revenue
92
100
-
-
92
100
Rental income and fees
14
13
-
-
14
13
Interest
09
11
02
02
11
13
Gain an sale of capital
assets
—
01
—
—
—
01
Transfer and
miscellaneous
06
03
(01)
03
05
06
Total revenue
884
82.4
20
289
1154
1113
Program Expenses
Genaal govemment
94
83
-
-
94
83
Public safely
340
32.0
-
-
340
32.0
Publicworks
235
200
-
-
235
200
Community and economic
@velopment
18
18
-
-
18
18
Recreation and culture
132
116
-
-
132
116
Interest on longturm debt
23
25
-
-
23
25
Water and sewer
-
-
233
246
233
246
Galfcourse
-
-
16
15
16
15
Housing
09
09
09
09
Total program
expenses
842
762
258
270
1100
1032
Charge in Net Assets
42
62
12
19
54
81
Net Assets- Beginning of }ear
1411
1349
849
830
2260
2179
Net Assets - EM of year
$ 145.3 $
141.1
$ 86.1 $
84.9
$ 231.4 $
226.9
6
City of Livonia, Michigan
Management's Discussion and Analysis (Continued)
Governmental Activities
In reviewing the above table, it can be noted that revenues increased by $6.0 million and
expenses increased by $8.0 million. The significant factors impacting revenue include increases
to charges for services ($3.9 million), operating grants and contributions ($ .9 rrillion) and
property taxes ($1.5 million). The most significant factor impacting the expenses was increases
to personnel costs, particularly health insurance for employees and retirees.
Business -type Activities
Livonia has three business -Type activities. These include the water and sewer system, the
operating fund for the Fox Creek, Idyl Wy1d, and Whispering Willows golf courses, and non-
federal senior housing at Silver Village, Newburgh Village, and 13 scattered site homes.
The following table shows the income (loss) before contributions and transfers for each of these
activities in the current and prior year:
(in thousands of dollars)
Water and Sewer Goll Courses Housing
2004 2003 2004 2003 2004 2003
Total Revenue
$
22,946 $
24,931
$
1,757 $
1969
$
1,244
$
1,230
Total Expenws
23,503
24,785
(1730)
1,698
970
952
Income (Loss) - Before
mntnbutions and
transfers $ (557) $ 146 $ 27 $ 271 $ 274 $ 278
Capital Assets and Debt Distribution
At the end of fiscal year 2004, the City has $379.2 million invested, before depreciation, in a
wide range of capital assets, including land, buildings, infrastructure, public safety equipment,
computer equipment, and water and sewer lines.
Debt of $45.0 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.
Debt related to the water and sewer system totaling $11.9 rrillion and debt related to the
housing and golf course activities of $5.1 rrillion 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.
7
City of Livonia, Michigan
Management's Discussion and Analysis (Continued)
Significant additions to capital assets during fiscal year 2004 include $4.5 million invested in the
construction of and improvements to roads and $3.0 million invested in the construction of and
improvements to water and sewer lines. There were no significant disposals of capital assets
during fiscal year 2004.
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 2004 include the General
Fund, Community Recreation Fund, and Refuse Disposal Fund.
The City's governmental funds reported combined fund balance of $29 million. This is an
increase of approximately $1.0 million for the year. The primary cause for the increase was an
increase of $942,000 in the Community Recreation Fund balance. Membership and program
activity at the facility has exceeded projections.
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 $1.7 million more
revenue and $1.4 million more expenditures than the original adopted budget. The primary
causes of the budget increases were a result of amending the General Fund budget to reflect the
issuance of $485,000 of debt for the purchase of a fire engine and to reflect the additional court
fines revenue and related costs generated by the Police Department's Strategic Traffic Accident
Reduction (STAR) program.
Actual General Fund revenues were approximately $1.8 million below the final budget.
Specifically, state -shared revenues were $941,000 less than the final budget because of mid -year
reductions implemented by the State of Michigan, court fine revenue was $520,000 less than the
final budget because collection of traffic fines was lower than expected, and interest income was
$257,000 less than the final budget because interest rates are at historic lows.
Actual General Fund expenditures were approximately $1.6 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
eighty (80) positions were vacant, resulting in over $4.0 million in reduced wage and benefit
costs city-wide.
City of Livonia, Michigan
Management's Discussion and Analysis (Continued)
Current Economic Conditions
The City continues to maintain positive fund balances in each of its funds. However, concerns
arse 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 68 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 historic lows have
dirrinished the City's return on investments.
On the expense side, certain expenses continue to rise at a rate far in excess of inflation. In
particular, health care expenses have continued their trend of double-digit increase. Hiring and
capital outlay freezes, among other measures, have been implemented to reduce expenses to
the level ofavailable revenue. We are committed to living within our means, although the result
may be diminished programs and service response capabilities.
Contacting the City's Financial Management
The financial report is deigned to provide our citizens, taxpayers, customers, investors, and
creditors with a general overview of the City's finances and to show the City's accountability for
the money it receives. If you have quetions about this report or need additional financial
information, contact the Director of Finance at the City of Livonia, 33000 Civic Center Drive,
Livonia, Michigan 48154.
City of Livonia, Michigan
Statement of Net Assets
November 30, 2004
The Notes to Financial Statements are an tp
Integral Part of this Statement.
Govemmmdal
Busineserlde
Activaiea
Adivaiea
Total
Cemgunem units
insets
Cash wild investments 3)
8 36.046,726 8
12873,265 8
48,119,991
8 369.553
Reconvenes
Taxes
121,1£
-
1274166
-
customers
cusisrers
-
9,SZ1,461
9,823461
-
DueTomdhergwemmmdalunits
3,85],29]
-
3,85],29]
-
EnnomeesRetirement System and VEBA
r i,Y£
-
82355
-
Specialasesoments
663,949
-
f£8,9E
-
TraMcfines
1,261,350
-
1263,35o
-
Wwke�s'<wnpmatim
126,311
-
126,311
-
Other
rl
353,999
1209,709
-
Invenlory,ppedwpendWres,anddeposits
85,25
all
1147,693
-
Imia'Imentcmiracts
-
756,221
756,221
-
Restri<tedasets(Note 8)
2602,19
2ayi
4,824,609
-
Cool riots IN de 4):
N mdepeci be sptal assets
321,235,903
6,6'L,aa
48994915
474,448
Oepeciade spia'asets-Net
12],285,]48
75,748,24]
203,033,995
12,001030
Tda'asets
208,819,379
10711
315973,535
12,84,031
Lai
Accounts pryade
3,925,71g1
1,&5310
5,]]2031
76,032
AcauedantldherliadlAis
4,090,176
192,190
4282315
23944
Debarredrevenue(Note 13)
1212,753
1193,735
2,401
-
Bmdanddeposts
-
232029
mom
-
NmmrrenlliaNities(Note 71:
Due within one year
6,8b,010
1901,840
8,715,85
295,000
Due in more than me year:
Bonds and eaptal leases teraabe
41261,74
15,341,590
sfis]2321
5,740,000
Cempematedcreamed and insurance daims
5,59,8s4
39TW
59939,om
-
landglldosurehadlity
65175
-
65175
-
PmpeMtaxhabhly
-
-
-
515,939
Total liabli8s
63,5Pt,128
21071,795
84571921
6,654915
Net liseis
Imrestedlnsptalaseld Netofrelateddeb
118,811
66,035,373
181818,890
6,40,478
Restricted
Command, recreation
5,041766
-
5,04175
-
all refrse
3,977,919
-
3977919
-
Street,ro d, andsi ewalks
5,83o,244
-
5,830,244
-
Gratsadd SAN street lighting
1l
-
174,081
-
Trial
5115]]
-
511,577
-
Pubi<sfelycommunstim
135,74
-
1,386,74
-
AcIudsledbrkiWrs
662,200
-
6622W
-
rebservice
696,991
-
698,591
Daniel projects
1673,50
-
161366
-
RstrieedVordnancereryrements
-
136,197
1,38514]
-
Wderandsewer
-
18,06,05
18,06105
-
Ecmwnicoeselnpmentcwperdion
-
-
-
275
Unmoral
6,wB,43o
600,781
7,149]73
(250 668
Tda'not assets
$ 145}19,251 $
86,082,361 $
231p01,612
$ 6,193,116
The Notes to Financial Statements are an tp
Integral Part of this Statement.
City of Livonia, Michigan
The Notes to Financial Statements are an 11
Integral Part of th'e Statement.
Program Revenues
operating crams
Charges rnr
and
Calla cramsand
�xpenss seM<es
Contributions
contributions
wrctiomlPrograns
PNrerygouemmam:
Governmental :
G eneralgo government
S 9,913595 S 1523]
S 192,444
S -
Pudi<sarery
33,992,597 62 6215,4]5
624,318
-
Pudicumly
23,993$6] 1399,123
6,620276
0]]295
Commnnnrantlulture Rvelopneni
1]87699 343,715
15542]6
-
Rea®ion atl<term
13595,939 0325,761
548639
-
In@resimlm9-1erm Rd
2297,991
Total governmental xliviiies
80,162301 16,]4]214
9,453,320
0]]295
Busnesentrpe a<liviiies:
Winer and sewer
23262,763 22356312
-
1289,826
Cnlfccurse
1582]94 1756,194
-
-
Housing
916322 1233,961
Total dsinesenlrpe actiites
25]81,3]5 25306E63
1289826
Total
$ 149,903,916 $ 02253,68
$ 9,011
$ 1,]6],121
Component wits:
E<onom: oeuelopremcapra4on
s 1544 s -
s -
s -
PlrmomhRoatloeuelopmemanhaiq
22013,837 -
me
-
Totalcomponent note
$ 2214,3:7 $
$ 380
$
General revenues
Property taxes
srateshared revenue
Unrestricted Gesanmmer
Interest
Missl6neom
Transfers
Total general revenues and
transfers
Change in Net Assets
Net Asseb- Binning ofrear
Net Asseb-Endofrear
The Notes to Financial Statements are an 11
Integral Part of th'e Statement.
Statement of Activities
Year Ended November 30, 2004
Net(Expense) Rmme aM ChaMes in Net F ek
Prim Government
Governmental Bwn�[y
MIMtes MIMtes 3wa Cnmponem Nnte
s (5,W.V8)(5,Wq
) s
(140
- (147B, 98)
.38)
(10(4N.68)
- (16,]93,858)
(09,E88)
-
(8,19 )
,169598)
- (8169,599)
2�0 w1l)
(Z29,Ml
(57,9M,M)
-
(57,,M,712) -
-
WN5
WN5 -
-
173,wo
173,wo -
-
3n,439
3n,a
%E,25
i ow,914
i ov,914
9,373
332245
181,526
(s7,9M,nz)
? ow,%4
283168
(1,500)
(2.M8. 57)
(2.M957)
50,0%,no
-
50,0%,no
1,wiw3
9,16a,W4
-
9,16a,W4
-
1,373,721
-
1,373,721
-
%E,25
217,89
1,13874
9,373
332245
181,526
5G7M
-
283168
(281168)
62118,183
117,%7
62 ,ff8
1,450016
4,193671
1,172,%1
5,3 ,M
(749j41)
141,125%0
849%,458
22683518
6,912,657
S 145}191251
$ 86,082361 $
231p01,612 $
6,193,116
12
City of Livonia, Michigan
Governmental Funds
Balance Sheet
November 30, 2004
Major Special Revenue Funds
Other Nommjor
Tota'
community Refine Disposal
Governmental
Governmental
General Fund recreation System
Finds
Finds
lbmie
Current assets
Cash and investments
s
5,620750
s 6,209,3!1 s
6,862,369 s
11666,68
s 29.399.162
Receal.
Tarns
61,s88
8,774
28,760
22866
tt],N£
Stull assessoments
-
-
-
668,90.9
&9949
Workereccenpenslim
126,311
726,311
Due Rom other governmental note
2,05],1]
-
-
1,]93,960
3,851
Empbyeee Retirement System add WBH
sai
-
-
-
al
Other
]21,13]
-
13312
121,301
Sol
Due Rom other thus IN de 5)
-
-
11
3,682
ii
Inventory, aeteid expenses, and&"to
542,820
-
-
-
542,823
Reduced assets IN de 8)
2602160
2,602,108
T dal assets
$
9,955,88
$ 6978,145 $
6,117,505 $
16,664,716
$ 39,020,258
Hai and Fund Balances
Liabilities
Aaounis revive
8
975935
8 PII,%R 8
1661085 8
1,338,763
8 3,926]81
Due to other Once (Side S)
13,144
-
-
3,682
16,826
H¢rued add otherliadlities
3,681
50,361
23608
Mal
3,854225
Denied revenue (Side T)
331,869
1,01,020
23,193
810473
2,1130$55
Total liabities
5,006}32
1,236,31)
1,487,886
2247,790
9,9]8,38]
FuN Balances
RservedM peteid add ovenlory
439,058
-
-
-
439,058
RservedMaptal construction
-
-
-
2,133983
2,33,968
Unreserved Uncontested
4$14022
5,041 ]66
6,629699
-
14,185087
Unreserved Reponedh:
Specal Revenue Fund
-
-
-
9680,746
9,830744
Ded Sensce Fund
-
-
-
698,591
®8$91
Cental Projects Fund
1903,623
1933623
Total findinslanas
4,953,480
5,041]66
6,629693
14616,926
29,601071
Total liatilitiesand and dances
$
9,959,812
$ 6278,145 S
6,117,505 $
16,664,716
$ 39,020,258
The Notes to Financial Statements are an 13
Integral Part of the Statement.
City of Livonia, Michigan
Governmental Funds
Reconciliation of Fund Balances of Governmental Funds to Net Assets of
Governmental Activities
November 30, 2004
Total Fund Balances of Governmental Funds
$ 29,041,871
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
161,581,651
Certain receivables are expected to be collected over several years
relating to special assessments and delinquent personal property taxes
967,802
Fines and fees are not available to pay for current
year expenditures
1,263,350
Compensated absences are not due and payable in the current period
and are not reported in the funds
(7,052,045)
Long-term liabilities are not due and payable in the current period and
are not reported in the funds
(45,487,192)
Accrued interest payable on long-term debt is not recorded in the funds
(235,951)
A portion of the Internal Service Fund (self-insurance) is included as
part of governmental activities
5,239,765
Net Assets of Governmental Activities
$ 145,319,251
The Notes to Financial Statements are an 14
Integral Part of this Statement.
City of Livonia, Michigan
Governmental Funds
Statement of Revenue, Expenditures, and
Changes in Fund Balances
Year Ended November 30, 2004
uA-orSce<ia Revenue Fund
Other Nonnpr Total
Community Refine oiap®I G.wernini Governmental
General Fund Recreation System Fund Find
Norman
Propertytaxes
s 26,62,535
s 3437552 s
11268,625
s 8,6412,310
s 5o,oa7,oa2
Licenses antl permits
2,495,82
-
-
-
2,495,896
Specie' asseesments
1,8%1,742
1,8&3,742
INergovemnmNal revenue:
Slate annual
9,1668]4
50,000
-
7,211,161
11
Federal sources
112893
-
-
lora 8
1581,191
Charges M services
332,635
3,621
118888
1,326,924
8,427,464
I merest
414,58
86444
948]8
248,719
844623
Fines and forfeitures
3,738818
-
-
238,971
3,21789
Miscellaneous revenue
1833891
35588
236o
1489,916
3,455697
T otal revenue
47,811
7,28521
11,48743
2178(31
88324,699
Expenditure
General government
8,82884
-
-
12,Wo
8)26]64
Pudicsakly
31,185,717
-
-
614,259
31799.976
Pubi<wmks
2,733,682
-
11535.193
186el
24,968663
Recreation and culture
2,784,915
4,181
-
4,9,11
11922,148
Community and economic development
730,414
-
-
1058,235
1]88693
Empmyee deneec, insurance. andother
2,821
-
-
-
2,829885
Captal outlay
-
-
-
1591,7118
1594,788
Debaerviae
4,924,642
4,924672
Total expenditures
4829259]
4,189712
11535.193
23,931165
88,058,]4]
Excess d l@vere Osser(under) Expenditure
(4]3,2]3)
3,012,749
(14,450)
R289,M)
265,932
Other financing smuree (Uses)
Issuance of long-term deb
gal
-
-
-
485,000
Transfers ln(Note S
1187,636
-
-
8,231,016
9,418,652
Transfers out(Note 5)
(1141,
(2100718)
(5891818)
grim4181)
Total other financing source Nses)
530FM
(2,108718)
-
2331,9341
768,168
Net Change in FuN Balanres
57,615
912,031
(14,450)
48,904
1034100
FuNBalances-Beginningofyar
4895,855
4,(99,735
4,614,149
14,3831122
28,007,771
FuNBalances-Endofyar
S 41953AW
$ 5,041,766 $
4,89,699
$ 14A16,926
$ 29,041,871
The Notes to Financial Statements are an 15
Integral Part of this Statement.
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, 2004
Net Change in Fund Balances - Total Governmental Funds
$ 1,034,100
Amounts reported for governmental activities in the statement of
activities are different because:
3,325,040
Governmental funds report capital outlays as expenditures;
in the statement of activities, these costs are allocated over
34,865
their estimated useful lives as depreciation
7,452,118
Depreciation, net of disposals, is recorded as an expense in the
(485,000)
statement of activities but not in the governmental funds
(6,364,571)
Certain revenue reported in the governmental funds was
405,076
recorded as revenue in the statement of activities in previous
year;
(7,937)
Repayment of bond principal is an expenditure in the
governmental funds, but not in the statement of activities
(where it reduces long-term debt)
3,325,040
Interest expense is recorded when incurred in the statement
of activities
34,865
Bond proceeds are not reported as financing sources (uses)
on the statement of activities
(485,000)
Decrease in accumulated employee sick and vacation pay is
recorded when incurred in the statement of activities
405,076
Increase in landfill liability is recorded when incurred in the
statement of activities
(651,780)
A portion of the Internal Service Fund (self-insurance) is also
induded as governmental activities in the statement of activities
(548,440)
Change in Net Assets of Governmental Activities
$ 4,193,471
The Notes to Financial Statements are an 16
Integral Part of this Statement.
City of Livonia, Michigan
Proprietary Funds
Statement of Net Assets
November 30, 2004
Assts
Current assets:
Cash and Investments
Accounts re<eisebe:
Customers
Other
Inventoric aeteld expenditures. add & "sito
Installment<mtracts
R¢trided assets IN de 8)
Told current assets
N assured assets (IN de 4)
NonRlxeciade assts
Oelseciadeasets Net
Tical nonrurrent asses
Ticalassets
Normai
Major Fnteronse Fund Fnteronse Find
Taal Fnterorbe Internal Samoa
WaleranalSzxer Housing CdfCwr Fund: Find
s 10,600976 s
S52,494 s
- s
1?M.470 s
7,481
9,823 Nil
-
-
9'adi
-
332929
111
20,919
353959
-
258911
-
4.263
263P4
341,697
]56221
-
-
756221
-
2222501
-
-
2,222501
-
23275,001
S52,605
25,182
21,851
7,821
1,538576
1,581918
3582088
6,095,812
-
6sas1800
4,81
2,415,150
75,]4824]
620,617
69,962,376
6,45120.5
5,997,636
az,44a259
93257,3]]
7,0115,858
6,82282➢
iW,296G,M7
],82985]
Liabilities
Current histories:
accounts lords
1,475,053
10,559
359690
iftr (
-
/x<medatlotherladlities
119,191
61,1131
11817
202139
-
Oefirredrevenue mde13)
1193,735
-
-
?103,]35
-
BmdanddepcsAs
114,735
117,3M
-
22,039
-
Curtentpertionoflorg-term odigdiom
12x2,925
421,623
26]292
?9a?Mo
T oral current liabhg¢
4,105,639
620,617
638807
5,365063
-
Non<urrenthabhges-Longterm Ra-Netof
current rortion(Nde 7)
11052,374
4442]15
44651
15539]63
1E9a152
Trial hadlnies
15,151
5,061,352
603061
20,904826
1890152
Net msete
Invested in aplal assets Not of rebted RN
58,653162
1,643,236
5,738,928
6x,6353]8
-
RaViaedbrordnan<ereryrements
1,365,167
-
-
1,105,167
-
Unratneed
18,(61005
309,210
13995691
17,970,616
5930,95
Trial net assets
$ 78,01 $
1952,498
$ 5,339,359
05391221 $
5930905
Pmonts reported for Wsineslype adir is in the statement of net assets are
dfkred beausea
pinion of the Internal Samoa Fund is IndRtlas
Wsinesrpe x(rvities
®1140
Net Assets of Businm-type Activilina
$ 8610821361
The Notes to Financial Statements are an 17
Integral Part of this Statement.
City of Livonia, Michigan
Proprietary Funds
Statement of Revenue, Expenses, and Changes in Net Assets
Year Ended November 30, 2004
Nmmmjor
i Enterprise Fund Enterprise Fund
Taal Enterprise Internal Samoa
waterandsewer Nouana Gnlrco,rse Fund Fund
Operating Revenue
customer Olt s
s 21705,585
s -
s -
s 21705585 s
-
Finesandforstures
702,520
-
-
702520
Samoa connections
5s,2go
-
5s290
-
Greem%es
-
-
1,611
1,611
Trail Gas
-
-
8],]86
8],]86
-
citycmOiimtims
-
-
-
-
7,935356
Rental income
-
1,232,990
-
12.32,990
Other revenue
2711,911
3,098
49,605
323,614
T otal operating revenue
22]3],306
1236,86
1,755595
25,729,989
7,935356
Operating Expenm
Cost ofwater
5,78,993
-
-
5,758,969
-
Costofsewagedspmal
8,923,291
-
-
8,9232g1
-
Srstemmaintenanceandoperation
4,854,0E
-
-
4,854695
-
GeneralandadmmistraRre
1000,917
-
-
1,000,917
-
Beaeaation
2403,802
1(l
195?09
2,334244
-
Reimurancemargesanddams
-
-
-
-
8,150070
Sara andwages
-
303,89
26328
571842
-
Suppres
-
9,919
01,991
187,910
-
Otherservic¢mdcharges
-
240,786
1,071,119
1,311905
-
Totaloperatingexpenses
2294],0]4
]21,82]
1]062]2
25363,173
8,150970
Operating lncome(Lms)
(203,763)
503,261
48,323
346816
(215614)
Ncnat erating Revenue (Formas)
Interest Income
203,316
8,256
57
211
868]6
Interest expense
(556 D3)
(2423K)
(212]%
(s199a5)
-
Totalnmoreratingrevenue
(expznsel
(35983)
(234 W0)
(212131
(6022]6)
868]6
Ircune(Lms)- Before conOiWtions and transfers
(556.751)
274,821
27,110
(255E60)
(126,736)
Carter Contributed Roan Densest
and Carl
1239,825
-
-
1269,806
-
Trandersln(Nde5)
-
-
43919
43919
-
transersOut wde5)
ta71
(3270001
(3270871
Change in Net Assets
733,075
274,034
(255071)
751,196
(126,738)
Natal Beginningofyear
RFragx.289
168.404
5595330
84648023
6,057,643
Natal Endofyear
$ 78,099,364
$ 1,952,498
S 5,339}59
$ 85,391,II1 $
5,930,9115
Net Change in Net Assts -Tata Enterais Fund
g 751,198
Amounts reported for Wsineslype activities In the statement of activities
are diferent
because the Internal Service Fund is allocated pertiallyto Wsineslype activities
421]03
Chagein Net Ametsd Bminastyre ActwRm
$ 1,18,9111
The Notes to Financial Statements are an 18
Integral Part of th'e Statement.
City of Livonia, Michigan
Proprietary Funds
Statement of Cash Flows
Year Ended November 30, 2004
The Notes to Financial Statements are an 19
Integral Part of this Statement.
No mi
Wjw Entertains Fund
Entertains Fund
Total Entertains Internal
Service
Water atlSmer
Housing
GcAfCourse
Fund
Fund
Can Flwrs from OPerating Activities
Receips from customers
8 22,008,162
8 1236,403
8 1]429]6
$ 25,387,561 8
7,935,356
Payments to su0pliers
(17,018,04)
(251[,527)
ty402]4)
(18212813)
(8,035,3N)
Payments to empbyess
(4p 956)
(318553)
(249,144)
(0.42651)
Other racei*(dsWrsements)
( 3]4)
16
-
(20,713)
-
Net ash pwidtl by (used in) operating
aeiwia
1044.822
shi
55 s
2,271,36a
(99998)
Can Roses; from Nonni Flnancing Acctivilies -Net
transfers to other fund
-
(s>)
(263081)
(93168)
-
CmM1 Nwvs from retailer and Related! Flnancing
Activities
CmViWtimsfrwn<ustwners
256,317
-
-
2`b,317
Grad reimbursements
113,109
-
-
113,169
-
fiscelandin@rest teach or -term debt
(1781352)
(645921)
(320581)
(2,747,957)
-
PurclaseofaPtalasets
(2140622)
(699%
(2158289)
Net ash used In cartel andrehted
financing activitis
(3j Z(410)
(656,596)
(32]5]4)
(4,536820)
Can Flwrs from Investing Activities
Interest received on Investments
20,316
8,256
57
21
88876
Nat(purclases) sales of investment activities
deetio]
(61
41639
ddd5
3,003
Net ash pwidtl by hosing
adiMis
601
1572
41,696
652,191
918]9
Net increase (decrease) in Cash and Can homesteads
(1898,903)
11
(15301)
(1896E33)
(8,119)
CohaNCash Equhalents-0eamber12003
11957831
3a54W
15,401
12,358,731
5373,892
CohaNCash Equhalents-November302004
$ 10,058y]I
$ 403321
$ -
$ 10,462298 $
5,4161
Balance Sheet Classification of Can and Cash homesteads
Cash and investments
$ 106809766
a 552491
8 -
S 1193370 8
],481
Rstri<tedasets(N de 8)
196659
1arr S
rotor ash coram eyavolents
12,669,596
552491
-
3,222,033
7,481
Lesinvestments
(2618562)
(149173)
-
(2,759735)
(2,021587)
Net ash crash eryclents
$ 10,05897)
$ 401
$
$ 10,462298 $
5,461
The Notes to Financial Statements are an 19
Integral Part of this Statement.
City of Livonia, Michigan
Proprietary Funds
Statement of Cash Flows (Continued)
Year Ended November 30, 2004
Reconciliation d Operating l rcune(Los)to Net Cash
Van Operating Activities
Operating income (loss)
Fdjustments to reconcile operating income (bs)
to net car Tom operating activitis:
oeptecotnn
Charges In assets and liatehres:
Resides
Inventory, pretacs, and deposAs
Accounts R@ebe
Acauedandnmer habl4ies
oeferredrevenue
Bmdand Rpaits
Net war prm+Rd by (used in) operating
actenties
Nonnsiior
uajw Enterase Fund: Enterprise Fund
Taal Enterprse Internal Samoa
Water adSeaer Torahs GdfCourse Fund Ford
8 (269.763) 8 588,261 8 48,323 8 346,816 8 (215614)
2069,802
168531
195969
2,7!4244 -
(357.01
315
(136191
(3 i0i
(52524)
(52524) (14233)
(757,990)
(3,352)
30,873
(451469)
26867
(2434)
13,072
37505 123,915
(14,mB)
-
-
(14p78) -
1,561
Test
$ 1,041 $ 61 $ 553558 $ 2ZI1,364 S(999981
Nourish Investing, Gpiltl, and Financing Activitis- Oumg the year endadNwmrber30,2004, developers comVm@dwaterandseaer lines with an
estimated wine of $920600 and mm@d them to the Citys Wester And Sewer Fund The City Aso command the @kited charge on refunding ridding
$51,014.
The Notes to Financial Statements are an 20
Integral Part of this Statement.
City of Livonia, Michigan
Fiduciary Funds
Statement of Net Assets
November 30, 2004
The Notes to Financial Statements are an 21
Integral Part of this Statement.
Pension and Other
Employee Benefits
Agency Funds
Assets
Cash and cash equivalents (Note 3)
$ 67,119
$
1,429,617
Investments (Note 3):
-
U.S. government securities
36,364,736
704,321
Common stock
102,174,014
-
Corporate bonds
41,479,011
-
Foreign stock
1,102,500
-
Mutual funds
19,718,176
-
Real estate investment trust
10,000,000
Bank investment pools
-
4,606,197
Investments held by broker-dealer and banks
under securities loans:
U.S. government securities
8,021,673
-
U.S. corporate fixed income
4,305,450
-
U.S.equities
12,738,801
-
Securities lending short-term collateral bank
-
investment pool
25,788,274
-
Other receivables
777,138
2,949
Total assets
262,536,892
$
6,743,084
Liabilities
Accounts payable
4,160,707
$
40,518
Due to other governmental units
-
4,289,657
Accrued and other liabilities
681,746
-
Bonds and deposits
-
2,412,909
Amounts due to broker under securities lending
agreement
25,788,274
Total liabilities
30,630,727
$
6,743,084
Net Assets - Held in trust for pension and other
employee benefits
$ 231,906,165
The Notes to Financial Statements are an 21
Integral Part of this Statement.
City of Livonia, Michigan
Fiduciary Funds
Statement of Changes in Net Assets
Pension and Other Employee Benefits Trust Funds
Year Ended November 30, 2004
Additions
10,560,882
Investment income:
4,685,004
Interest and dividends
$ 8,270,151
Net appreciation in fair value of investments
18,967,478
Less investment expenses
(291,924)
Net investment income
26,945,705
Securities lending income:
Interest and fees
287,761
Less borrower rebates and bank fees
(264,654)
Total securities lending income
23,107
Contributions:
Employer
5,859,287
Employee
569,371
Total contributions
6,428,658
Total additions
33,397,470
Deductions
Benefit payments
10,560,882
Medical benefit payments
4,685,004
Administrative expenses
153,725
Refunds of contributions
921,610
Total deductions
16,321,221
Net Increase
17,076,249
Net Assets Held in Trust for Pension and Other Employee
Benefits
Beginning of year
214,829,916
End ofyear $ 231,906,165
The Notes to Financial Statements are an 22
Integral Part of this Statement.
City of Livonia, Michigan
Component Units
Statement of Net Assets
November 30, 2004
Assets
Cash and cash equivalents
Capital assets (Note 4):
NoiWepn:oable capital assets
DepreciaNe captal assets- Net
Total assets
LiaNlities
A ounts payable
A rydl andother liabilities
Noncurrent liabilities:
Pmpertytax liability
Duewithinoneyear
Due in more than ore year
Total liatialte;
Net Assts
Infested in capital assets - Net of related debt
Unrestncted
Total net assets
The Notes to Financial3tatements are an 23
Integral Part of this Statement.
Economic Plymouth Road
Deielapment Development Total Comporent
Corporation Authonty Units
$ 2,706 $ 365,847 $ 368,563
- 474,448 474448
12,001 030 12,001 00
2,706 12,841325 12,844,031
76,032 76,02
23,944 23,944
- 515,939
515,939
- 295,001)
295,000
5,740,000
5,740,000
6,651),915
6,651)915
- 6,440,478 6,440,478
2,706 (250,068) (247,362)
$ 2,706 $ 6,190,410 $ 6,10,116
City of Livonia, Michigan
Program Revenues
Operating Cagtal Grants
Charges for Grants and and
Expenses SerHces Contributrous Contributions
Economic Development Comormon - General
government $ 1,500 $ - $ - $ -
Plymou0n Road Development Authority
Community and economicdevelopment
1919,646 - 360
Intereston bngterm debt
289,191
Total Plymouth Road Development
Authority
2,208,837 380
Total govemmental sonatas $ 2,210,W7 $ $ M $
General revenues:
Taxes
Interest
Total general revenues
Change in Net Assets
Net Assets- Beginning of year
Net Assets- End of year
The Notes to Financialstatements 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
$ (1500) $ - $ (1500)
- (1919,266) (1919,266)
(289191) (289191)
(2,209a57) (2,208,W)
(1500) (2,209a57) (2,2N,%7)
- 1,451943 1,451,043
15 9,358 9,373
15 1,468,401 1,460,416
(1,485) pa8p56) ,449,541)
4,191 6,939466 6,942,657
$ 2,706 $ 6,190,410 $ 6,10,116
25
Component Units
Statement of Activities
November 30, 2004
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
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.
26
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
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. Internally prepared 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
impose its will.
Government- ide and Fund Financial Statements
The government -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.
27
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
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 basis 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.
IN
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
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.
29
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
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 expemes.
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.
30
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 1 - Summary of Significant Accounting Policies (Continued)
The 2003 taxable valuation of the City of Livonia totaled $4.577 billion (a portion of
which is abated and a portion of which is captured by the PRDA), on which ad
valorem taxes levied consisted of 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, .0114 mills for industrial
development, .2757 mills for debt service, and .8900 mills for roads, sidewalks, and
trees. This resulted in $17.62 million for operating purposes, $3.47 million for police,
$5.34 million for police and fire, $3.54 million for the library, $11.27 million for
refuse and recycling, $.27 million for industrial development, $1.21 million for debt
service, and $3.90 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 City for these
property taxes. Wayne County remitted its purchased delinquent real property
taxes in August 2004. 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 foreach 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 ofallowance 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 reflect costs
applicable to future fiscal years and are recorded as prepaid items in both
government -wide and fund financial statements.
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
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. Unspent bond proceeds have also been set aside
for construction. These amounts have been dassifed as restricted assets, as well as
amounts on deposit at the county and the state being held for the construction and
debt service. The Street Improvement Capital Projects Fund, 1990 Street
Improvement Capital Projects Fund, and the Community Recreation Capital
Projects Fund all have unspent bond proceeds that have been set aside for
construction and that have been dassified as restricted assets. The Municipal
Building Authority and Other Debt Service Fund has unspent bond prooeeds set
aside for debt service that has been classified as restricted assets.
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 depreciated using the straight-line method
overthe following useful lives:
Infrastructure 33 to 40 year;
Road rights 33 year;
Buildings and improvements 20 to 50 year;
Machinery, equipment, and vehides 2 to 20 year;
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.
32
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
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 premium
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, govemmental 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.
33
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
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, 2003 $ (1,957,792)
Current year building permit revenue 2,274,666
Related expenses:
Direct costs $ 1,469,157
Estimated indirect costs 432,546
Total construction code expenses 1,901,703
Cumulative shortfall at November 30, 2004 $ (1,584,829)
Fund Deficits - The City has an accumulated fund deficit in the Plymouth Road
Development Authority Fund that will be eliminated through future tax collections.
A plan is being filed with the Local Audit and Finance Division of the State of
Michigan.
Note 3 - Deposits and Investments
Michigan Compiled Laws Section 129.91 (Public Act 20 of 1943, as amended)
authorizes local governmental 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 alloyed to invest in bonds, securities, and other
direct obligations of the United States or any agency or instrumentality ofthe United
States; repurchase agreements; bankers' acceptances of United States banks;
commercial paper rated within the two highest dassifications, which matures not
more than 270 days after the date of purdiase; 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.
34
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 3 - Deposits and Investments (Continued)
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.
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,
2004, 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, 2004 was 140 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, 2004, 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, 2004 were $25,788,273 and $25,065,924,
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
the fiscal year resulting from a default of the borrowers or custodial bank.
The City of Livonia, Michigan's deposits and investment policies are in accordance
with statutory authority.
35
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 3 - Deposits and Investments (Continued)
At year end, the deposits and investments were reported in the basic financial
statements in the following categories:
Governmental Businesstype Total Pnmary Fiduciary Component
Pdivans mtvihos Government Funds Unit
Cash and inveshnents $ 36,846,726 $ 12,873,265 $ 48,119,991 $ 268,499,889 $ 368,553
Restricted assets (Note 8) 2,484782 1988,563 4393,265
Total cash, inveshnents,
and restnctetl assets $ 38,451428 $ 14,061,828 $ 52,513,256 $ 268,499,889 $ 368,553
Deposits
The breakdown between deposits and investments for the City is as follows:
Pnmary FOusuary Component
Govemmant Funds Unit
Bankdeposits (chedting accounts, mongs
accounts, and certificates of deposit)
$ 28,467,551 $ 1496,736 $ 368,553
Inveshnents in securities, mutual Funds, and
similarvehidas
24828,978 267,883,153 -
Pettycashars! cash onhand
16,735 - -
Total $ 52,513,256 $ 268,499,869 $ 368,553
The bank balance of the City's deposits is $30,478,886, of which $900,000 is
covered by federal depository insurance. The remainder was uninsured and
uncollateralized. 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.
36
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 3 - Deposits and Investments (Continued)
Component Units
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 $414,270, of which
$100,000 is covered by federal depository insurance. The remainder was uninsured
and uncollateralized.
Investments
The City's investments are categorized below to give an indication of the level of risk
assumed by the entity at November 30, 2004. Risk Category 1 includes those
investments that meet any one ofthe follming criteria:
a. Insured
b. Registered
c. Held bythe City oritsagent 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 counterpzrtys trust
department (or agent) in the City's 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
37
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 3 - Deposits and Investments (Continued)
At year end, the Citys investment balances were categorized as follows:
Primarygovemment
Bankieaeshnentpools
US government semnhas
Total primarygovemment
Fduciaryfuids:
US government semnhas
Common stocks
Corporate bonds
Toone bmds
Real estate invesInenttrnst
Subtotal
Investments net subWtto mtegonzatan
Mutual funds and other
Bankieaeshnentpools
Investments held by bmkerdealer and banks
under seembas bans:
US government secuntes
US corporate fixed income
US equities
SecurNes lending shortterm cdlateral bank
investment pool
Totalfdmiaryfunds
Reported
Mount
2 3 (Fair Value)
$ 10,413,117
$
- $
- $
10,413,147
13, 615,823
13, 615,823
$ 24,028910
$
$
$
24,028910
$ 36,364736
$
- $
- $
3],068,05]
102,114014
-
-
102,174,014
41,419,011
-
-
41,479,011
1,102,500
-
-
1,102500
10,000,000
10,00 000
191120,261
191 824,582
- - - 19,118,116
- - - 4,606,191
8,021 613
12,138801
4,305,458
25,188,214
$ 191,120,261 $ $ $ 26100.3153
The bank investment pools 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.
ON
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 3 - Deposits and Investments (Continued)
Included in the City Pension Trust Fund investments at November 30, 2004 are the
following:
I Approximately $2,997,000 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 $42,536,000 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.
o Approximately $7,481,000 of collateralized debt securities issued by various
corporations. These investments are backed by the full faith and credit of each
respective corporation. The yields provided by these securities historically have
exceeded the yields on other types of corporate debt 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.
39
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 4 - Capital Assets
Capital asset activity of the City's governmental and business -type activities was as
follows:
40
Balance
Balance
Cesmbei 1,
Cisimalsand Niminber M,
2003
Hd9ims
Hdpdinmds
20M
Governmental Activities
Cap(al mob nd bung depecia(ed
land
$ 34,181,310 $
-
$ - $
34,181310
Construction In pcgless
114593
114,593
Suddal
36,181,310
114593
-
M4 5,9N
Capitol mob Wing Rpeaa(ed
Inhadmdwe
59,]28669
4,3&1213
-
66,024,682
Rcodlighb
14,811,951
462j69
-
152]4,3W
Buicingsandlmpouemeds
98146624
250,486
-
91
E4ipren(andvehides
245786&1
2XD4
(8392fl)
26,059,84
SuWdal
18)257,&18
7X7525
"I")
195,]55956
HcmmulaWd deinreciatim
Inhadmdwe
22,315,691
1n1568
-
24,067,039
Rcad rights
3} 505
449,431
-
3,]&3936
Buicingsandimpouemeds
22123361
2,053E41
-
24,11
E4ipren(andvehides
15,11
2,058,765
(807631)
11
Suddal
62,964 &5M1
6,332,985
(807631)
63078206
N e( aPlal mob Wing Rpecia(ed
1263127%
1004560
(3158,3
12]285]48
N e( govemnrental aptal mob
$ 160694,104 $
1119,133
$ (3158,3 s
161581651
40
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 4 - Capital Assets (Continued)
41
Balance
Balance
December 1,
Bisg®k antl Nwemker
38,
2883
AdItims
PQusMents
28M
Businw:Ire Activities
Water and sever capital agate:
Qata1 agate not being maedated-
Construction inprogress
s 295,761
s 1.01. 5
s (416n3) s
1538576
Qatal awls now Rpeciated
Birldmandimpwwrents
931285
-
-
931285
Vehi<Ies
1527,469
2A,714
(1L',955)
1661228
Wdiineryanderypnent
rdi,
M3,ry38
(W'Mir)
93],45]
MterandsewerdstriMonryaterrs
189744246
1b6,8b
111 89 8 26 8
Subtotal
11303],48]
1]66.818
(11
114,643,158
H cumilated tlzpeciatim:
turnings and impwerrents
411
11
-
436]88
Vehicles
1;182223
13],38]
(2D,545)
1018,965
Mai and erypnent
667,624
57,822
-
]25446
Mier andsewer dstriibi rys@nrs
41014,158
2,11
44,818,139
Subtotal
",882,893
24898M
Wf)545)
46191}58
Net wptamob being Rpeciated
69,835,394
(6289")
31,A8
66 Q51888
Net water antl server water made
69331158
1038,541
(3A,323)
69962376
Gdf course water mets:
Qatal awls not being Rpeaated-
latl
3582086
-
-
3582086
Gptal assets being tlzpeciated
turnings and amgrwerrents
1682329
-
-
1682329
andimprwerrants
2,342,792
-
-
2,342,792
Madiinery and e4ipnent
815549
6,989
822536
Subtotal
4,]68,6]8
6,989
-
4,]6],659
Mcumdated Rpeciatim:
Buildngsandimpwwrents
4 'adr;
32M7
-
486665
�ndimpwerrents
1362289
WIND
-
10]9}49
Madiinery and erypnent
339753
46]22
386475
Subtotal
2,155688
11
2}52589
Net wptamob being Rpeciated
260,1,878
(11
-
2415,158
Net gdf course water made
6,186558
(188928)
-
5,97,636
41
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 4 - Capital Assets (Continued)
Balance Balance
Fesvben 1, Dish alsand Noverninal
2883 Piliiom HduaMenls 20M
Business type Activities(Cmiinuedo
Balance
Housing Fund
Decorator 1,
Capial snob had being Rpecaiea-
Neal 33,
2003
lana
8 1.81.9,18
8 - 8
- 8 1.81.9,18
Capial mob being tlzpeciated
BuildngsanalWavements
bFil E6
186]6
- 6,892,962
FundiWavements
87,95,1
-
- 87,95,1
Vehicles
Uhdio
-
- Uhdio
Marninery and eq,ipmenl
3s 'no
3s 'no
14819,142
264,32
subiwal
15)3430
18616
- 1511
Accumulated depeciaiion
inpovements
Buildings antllWavements
2,89503
137,825
- 2,2P,328
FundiWavements
350,991
20$10
- 311,86]
Vehicles
ill
63E6
- 24,667
NacNnery and e4ipnenl
5,495
3,452
8,941
suddal
2,,51216
11
- 2,612,80
Net apil assets being depeaatea
5,039,154
(1518511
4,81261
Net Housing Fund aptal snots
6,(21 02
(1518511
6,46320.5
N at bnsineel actodyaplal assets
$ 8213$818
$ 683,164 $
(379}23) $ 82,443259
Capital asset activity for the City
of Livonia's component
units
for the year was as
follows:
42
Balance
Balance
Decorator 1,
Disp®b and!
Neal 33,
2003
Pbitions
Petustments
20M
Canponent Unit- Plymouth Raa
Developnnenl Author ty
capulanet na berg �peaaiea-Lana
s 414,4"8
s -
s -
s 474,a48
espial anet being Rpecialea- Lana
inpovements
14819,142
264,32
-
11
M<urrulaletl Rpe<ialim - latl
inpovements
2,3"0,926
141,52
3,M,436
Net carol assets being Rpeciatea
12618214
(41118f)
12,001,030
Net corryanenl unit aptal assets
$ 12952662
$ (417,181)
$
$ 12,415,418
42
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 4 - Capital Assets (Continued)
Depreciation expense was charged to programs of the pdrmry government as
follows:
Governmental activities:
General government
$
502,280
Public safety
1,358,524
Public works
2,785,144
Recreation and culture
1,687,037
Total governmental activities
$
6,332,985
Business -type activities:
Water and sewer
$
2,409,802
Housing
195,909
Golfcourse
168,533
Total business -type activities
$
2,774,244
Construction Commitments - The City has active construction projects
at year
end. At year end, the City's commitments with contractors are as follows:
Spent to
Remaining
Date
Commitment
Street projects
$ 6,188,125
$
1,045,438
Storm water retention project
677,301
512,199
Total
$ 6,865,426
$
1,557,637
43
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 5 - Interfund Receivables, Payables, and Transfers
The cor position of interfund balances is as follows:
Receivable Fund Payable Fund Amount
Nonmajorgaaemmental fund Nonmajar gmernmenlal land $ 3,682
Refusa Disposal System Fund General Fund 13,144
Taal $ 16,826
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 Transferred Fran Fund Tmnsfeaad To Amount
General Fund Nonmajorgovammental llrnds $ 1141 ]48
Community Recreation Fund Nonmajorgovammental llrnds 2,188,718'
Housing Fund Nonmajorgovammental llrnds 87
Nonmajorgaaammental fords General Fwd 868,636
Nonmajorgovammental lords 4988,463 ...
Nonmajor Enterprise Funds 43919
Total nanmajor W%aammental lords 5,893,818
Nonmajor Enterpnsa Funds General Fwd 327,888
Taal $ 9462571
Transiarof unrestricted! resources to finance capital pmjects and general obligation debt service in
accardence with butlgetary authonzations
Transiarto a Debt Samoa Fund to de used! to sarmw Community Recreation Fund debt
... Pnmantytisnsfers of gas and weighttax rownues among the Major Streets Fund, Loral Streets Fund,
and Road Fund in accordance with &t51
44
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 6 - Leases
Capital Leases -The City has entered into a lease agreement as lessee for financing
the purchase of police and fire, distract 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 minimum lease
payments as of the inception date. The future minimum lease obligations and the
net present value are as follow:
Years Ending Govemmental
November 30 Activities
2005
$ 1,021,245
2006
1,005,096
2007
676,512
2006
69,421
2009
69,421
2010
69,421
2011
69,421
Total minimum lease payments 2,980,537
Less amount representing interest (241,458)
Present value at November 30, 2004 $ 2,739,079
45
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
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 distinct)
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:
Interert arlrapal
We Maturity Beginning ow Wthln
Rudeo Rudeo Balanw Manors ReAMoos En419Bahnw OneV®r
Cownrwrtal a¢Moer
B u Il4lig nuthorlry Bnnw.
1931 Outrot Cost I nrdddv ei6 Bmw
nrroamorlerue-$YA,BIB
5()%
.Y9,OYJ-
h4turlrythrog52O6
670%
$R5$(XX] $
19$(XX] $
- $ Lb,Dll) S
135" $
65"
1M M61 Refirergry Bass
MosRotlsue-W72614
270M-
Matunrythrogh204
575%
IoPW313
3 313
- ( 313)
-
-
1M M61 Refirergry Bass
Mourn rclerue-.¢91 m
Maturlrp mouth 2m5
4m%
MM
3mim
- -
3mim
3mm
1M M61 ROnanory Bonds
arrwntrclsue-$4,9B"
3vM
5433,Om-
Maturlrymwth2M
4m%
s4a5BBB
1385888
- (430")
dos"
4s)"
1M M61 Fre 5ffign Bm6[
nrrwn[rclsue-$11(O0.11
4mn-
Ni"
Matuhrymggh2018
5D]%
$130"
1A uaxo
- t#Ri")
13fi50Y1
65"
209 Re7eatlon Bonw
nrroummlrsue-Soo0o09
same-
YIJ,"
Maturlr3trrou9h2(25
5w%
317s"
2050W9
- mama)
2M(XX)
51"
20T Re7eatlon Bonw
nrrwmmluue-Sa35moBB
4mn-
1235,09-
Maturlmtrrou9h2ma
525%
31650M
35,2450m
- (ns")
Mono"
mmB
Street and Highway Cereal Oollwuun
Onllmdw Tst Bonw.
199JStrw[Itryrwertm[Bmw
nrwumrclerue-slsaoam
3150m]-
tR[uhry [kagh205
fiO]%
$17$Dlt
P$Dlt
- (150,D1)
17$Dlt
175"
46
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 7 - Long-term Debt (Continued)
47
Intent
annopal
Me
kawrlh
Beginning
Gew3hn
Barred
Nar9a'
Mane
Additions
Radii Ending Balance
OneV®r
Go'remrerGl adietet(Connnsla)
Street and Hlglmry Boren(Cortlnsla)
1913 Road rwertert Binds
Mdrn[ol45ue-13i5009A
V75iM
Wunrg though Book
125%
510]W3
5 1850]] 5
-
5 (95")3
1AW03]
5 3 03]
2M Genaa101algabon PeNnlalrg Bm6[
Mom[oHsue-5239595]
21)(14r-
$.O,01)
wANrinatkngn2007
3O]%
5)100.11
23150.11
-
d" 030)
1 rodarrad
30003]
SparaIM1'S®'rtert Bonds.
19®5penalPs arrert Llmlela Ta Bm6[
Nrounw also -3170503]
mrturng trcagn2915
75036
Va"
1wgrB
-
050301
7o"
d5 Brad
1 M 5 penal Areas Front Fri Ta Bonds
Mamw also -3175003]
T15
wwiMthrough 2[05
sin%
$0000
170000
-
(85,030)
053rd
did,Bre
< pial Loreeblaai
BankOne-Ene�cdeneiwllnn Ewlprrem
arrounw adark -3301137
wi M through 2Bi7
257%
.4297(G-
16949D
-
(38$81)
1ffiIOB
4101)52
1399909
Fire Truck Brander
Frri ug
205001)
natunnd through All
339%
135283
-
4435 ran
(55,7971
425203
55,239
w red
Corner a Bank
Bay, Fre. and GBw wdlo
1ah Genrla Cwrt-Corrpuwer5nternLeae
nrrwmmisoe-515000OO
Warne Fir dean aua
215%
313354
13354
-
(13354)
-
-
Fa�Cndlis
resn-sl5wdoo
th da
Fi
Fir
Nardi rough Alfi
510%
1314037
9`1303]
-
(3IfiO3))
A3
31603)
Fro Truck Brander
nrrwn[alse-13121350
srrF 3
Maturagthrough All
378%
sra5tl
0.90958
-
(117@3)
03115
122318
Other dM termenlletkins:
General abmhamrra di
Cdeme�tlnn, and herrcn Ieraane
Jan
1mddid
405,737
-
1731181
-
Lanailloowreandp<dt emrel ai
-
361»]
361703
-
Couperawedaheca
740121
-
(43!im)
70521)15
3243372
ToblgwerrtreRnla6IMIs
501358017
1512517
(3,79)116)
54270418
6314M
47
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 7 - Long-term Debt (Continued)
Imerert Pnndpal
Pate Wturty Beginning Beewahn
Farees Fames dans Melons Ill Ennlg Bal OneYer
Buelneatypeadrvl0ei
5?" s
19W Wayne evenly soeele okg®I-senesul
(led 182)
Buildup Author/ Sento
-
Maturngtrouch284
3W% 32413999
19® MBA Fox Creek C ntral Brea
(270,013)
Valley W Yewaer Gunnel System
2E4955
Annuum misue-We"
339%-
Wtumgtrwgn AR1
225% 32508
h4[unry [rcngnRmd
920%
.&`A W] $
10OW]Anneunt$
1�MBA Pnssue
Wtumgtrough Mp4
215% weed
3Bow
rclevuah2Cx4 s
2
General labllly dalra, workers
ill
MatunrytrcggnRO)d
Worn
5%-
575%
S19e1az
19e1az
1913 MBA Pelnenory Bantle
Teal ndsnan-type aamber
Annual awe -52931111
delnesnWeaembes
Wunnu though 2@5
4M
$203711
203711
1913 MBA Pe0nanory Bans
Annual oawe -549399W
3�
%ndM
Wunnu though 2015
520%
$13013
45W956
19de MBA Pe0nanory Bans
Artoun1o115ue-511210013
3386-
$130M
Wunnu though 2WG
415%
$135013
61]013
Water Supply and Wastewater Sptenn Bonds
290) wanxSupply and twateSworn
Revenue Bonds
ArrwmmIdaue-$5913999
5125%-
3125,®-
Malurligmrmen MO
533%
Nm®
4675000
IDP water Su ppN and twate3 tern
Revenue P4undlig Bonds
Anneal 593FX)CDO
20396-
$35108
Wurlmthrovgn AlR
335%
31015,08
3395W0
FemdelerredartoumonrefnduM
(161434)
counlymrlradoal ubugatlons:
5?" s
19W Wayne evenly soeele okg®I-senesul
(led 182)
Arroul 133WW1
-
Maturngtrouch284
3W% 32413999
State Pevolvng Fund Lean -N. Mrton Wllry/Page
(270,013)
Valley W Yewaer Gunnel System
2E4955
rtowlNlSue-5144291793
320108
Wtumgtrwgn AR1
225% 32508
(apI@ILe-3e ObIIls0oie
CortehmBank- Fa Creeklrhga11a Saari
rtwilNlSue-5991029
Wtumgtrough Mp4
215% weed
aherlonp Frtn ubueelum:
2191331/3
General labllly dalra, workers
ill
srryersatlun, and heelhinsnans
$5( R1.ALJ
Jame
3 375M
Gnpeimleeaheica
Teal ndsnan-type aamber
Tetalgwerm¢laland
delnesnWeaembes
48
S M") 3
5?" s
`ll,O]]
(led 182)
-
-
-
203711
213,711
(270,013)
4319955
2E4955
(im")
593011
131811
(13000) 45W999 13999
(lel 7450000 8B "
W,013 (401421)
353999 -
Qo,999)
331999
m999
d2W3 -
(42,993)
dd2 /593
(95824)
1$9W
-
13dfi®
�:xx,1f1T3
19l�
2191331/3
17"une!
ill
3 M2!x7W 31W_517
$5( R1.ALJ
S 7181 M
3 375M
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 7 - Long-term Debt (Continued)
Imeret Phnapll
Me Wturlh BnnnM DmMhn
Fames Wr9a' dans Masers FeAMays E dra Balm a OneV®r
ComponeM1 unt
Govem Trental AcBVRies
BusinesstypeActwities
Pnnapal
Interest
1990 8ourrovm Da9opmert Bonds
Principal
Interest
Total
M05
$ 3,5u(tB8
nrrmmmloe-.z7,5 " 4CUt aseggm-
$ 5699,929
$ 4643654
$ 705,764
$ 2349,418
MOB
vaturmthwgh2010 4]0% $5850.11
$
6315" 5
- 5
(MUM) 5 6(c5" 5
MUM
cher erg-rarm obugateana:
1,814955
1,878239
3753,194
1,479,981
606,007
PrOpehTar mmenert515M
2008
1,166,175
1,802,221
5
1,524981
Total mmpmeRunRa mry
$
6315" 5
515M 5
(MUM) 3 65 flc9 $
2S,W]
1,459,985
493,939
1,953924
M10-2014
Annual debt service requirements
to
maturity
for the
above bonds and
note
obligations are as follms:
8putat0
6015,6:9
14,835,659
2,T11,185
488,705
49
Govem Trental AcBVRies
BusinesstypeActwities
Pnnapal
Interest
Total
Principal
Interest
Total
M05
$ 3,5u(tB8
$ 2129,261
$ 5699,929
$ 4643654
$ 705,764
$ 2349,418
MOB
3,097204
1,987,816
5085020
1,429,981
655262
2,085,249
M07
1,814955
1,878239
3753,194
1,479,981
606,007
2085994
2008
1,166,175
1,802,221
2968,396
1,524981
552,191
2077,178
MM
813 15
1,753953
269,228
1,459,985
493,939
1,953924
M10-2014
6,283135
7947,207
14,230342
6252,025
1,568729
7,828754
211 2019
8putat0
6015,6:9
14,835,659
2,T11,185
488,705
3265890
2002024
9,015000
3,738750
12811,750
443436
23,850
467286
20252029
8,425000
1,502274
9,99,94
-
-
-
2)30
1,650,000
4$313
1,693313
Total
$ 44,835,412
$ 28,798693
$ 73,fi ,105
$ 17011246
$ 5,034447
$ 22105,693
49
Component Units
Principal
Interest
Total
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
365,000
214,673
579,673
2010-2014
2,180,000
785,605
2,965,605
2015-2019
2,205,000
213,263
2,418,263
Total
$ 6,035,000
$ 2,231,568 $
8,266,568
49
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 7 - Long-term Debt (Continued)
Defeased Debt
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 defeated bonds
are not included in the general purpose financial statements. At November 30,
2004, $20,995,000 of bonds outstanding are considered defeased.
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, 2004, there is
approximately $61,367,000 no commitment debt outstanding.
Note 8 - Restricted Assets
The balances of the restricted asset accounts are as follows:
Business type
cwemmenta Mantes Activates
Total resVi<@daseld $ 419,951 $ 436679 $ 1667,721 $ M7A $ 26021,08 $ 2,222501
50
murra el
Burning
Street
1990ureet
Csmmunily
aumwityand
imaQ+ermnt
iWovement
Recreation
Taal
Omer Deu
Rapid Project
Rapid Project
Rapid Project
Governmental
Waterandsev,er
Servae Fund
Fund
Fund
Fund
Activates
Fund
Cash and cash e4ivalents:
Revenue bond reserves
8 -
8 -
8 -
8 -
8 -
8 1,385,197
Bond posed:
419,951
436,679
1270,315
227,7A
2401,M
973,
Total cash and cash
equivalents
419,951
436,679
1270,315
227,757
2404,702
1 A8$63
Assts heldtyWayne Cooly
D3938
Resiwde from Wayne County
197,,406
-
197,406
-
Total resVi<@daseld $ 419,951 $ 436679 $ 1667,721 $ M7A $ 26021,08 $ 2,222501
50
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 8 - Restricted Assets (Continued)
Governmental Activities - The governmental activities have unspent bond
proceeds relating to debt issued for the construction of streets, police computer
upgrades, and the Livonia Community Recreation Center. The City also has a
receivable from Wayne County relating to street construction finanoed by the City
on behalf of the County with bond proceeds.
Business -type Activities - At November 30, 2004, the City was in compliance with
the provisions of the Water Supply and Wastewater System Revenue bonds. Net
assets have been restricted for $1,385,197 at November 30, 2004.
Bond proceeds held in the amount of $603,366 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, 2004.
The City also has assets of $233,938 held at Wayne County that are restricted for
future water and sewer obligations. Net assets have not been restricted at
November 30, 2004.
Note 9 - Risk Management
The City is exposed tovarious 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
claims 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
claims remains with the City.
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 9 - Risk Management (Continued)
The City estimates the liability for general liability, workers' compensation, and
medical daims that have been incurred through the end of the fiscal year, induding
claims 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 claims 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 Liablily Workers' Cornrensarim Medal Claire
20W 200 2881 20M 2834 2833
Eslimsled liablAy
Beginning ofyeaa
$ 479,891
$ 8]6,244
$ 958,40
$ 1524,361
$ 329,913
$ 538,14.9
Estiimted da"
incurred inducing
charges In estiimta
15321]11
811
459,62b
357,2W
6,20,2L9
4,69,675
Chim reyiren61�1(210
X923,
(6210f34)
(4867
EslimsledliablAy-
Endofyeaf
8 536.371
$ 479,891
$ 1033,30
$ 958,40
$ 328,398
$ 329,913
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
0 Police lieutenant and sergeant members - All members hired prior to
December 8, 1997 and their benefidaries
0 Police officer members - All members hired prior to November 24, 1998 and
their beneficiaries
0 Fire fighter members - All members hired prior to duly 1, 1998 and their
beneficiaries
52
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 10 - Pension Plans (Continued)
The System provides retirement, disability, and death benefits to plan members
and their beneficiaries. At November 30, 2003, the date of the most recent
actuarial valuation, membership consisted of 556 retirees and beneficiaries
currently receiving benefits and terminated employees entitled to benefits but not
yet receiving them, and 304 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
significant accounting policies.
The obligation to contribute to and maintain the System for these employees 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.
Annual Pension Cost- For the year ended November 30, 2004, the City was not
required to and did not make a contribution. The annual required contribution
was determined as part of an actuarial valuation at November 30, 2002 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) indude 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 a closed basis. The
remaining amortization period is the expected future working lifetime.
53
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 10 - Pension Plans (Continued)
Reserves - As of November 30, 2004, the plan's reserves have been fully funded
asfollows
Legally required reserves:
Reserve for employees' contributions $ 8,818,306
Reserve for retired benefit payments 78,494,446
Additional reserves- Reserve for employer contributions 107,068,503
Total reserves $ 194,381,255
Fiscal Year Ended November 30
2002 2003 2004
Annual pemion cost (APC)
$
417,464
$
392,639
$ -
Percent of APC contributed
100%
100%
100%
Net pemion obligation
$
-
$
-
$ -
Postemployment Health Care Benefit Plan
Plan Description - The City of Livonia Postemployment Health Care Benefit Plan
is a single -employer defined benefd plan that is administered by the City of Livonia
Employees' Retirement System; this plan covers all full-time enployees 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, 2003, the date of the most recent
actuarial valuation, membership consisted of 556 retirees and beneficiaries
currently receiving benefits and terminated employees entitled to benefits but not
yet receiving them, and 304 current active employees. The plan does not issue a
separate financial report.
54
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 10 - Pension Plans (Continued)
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 Citys 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 November 4, 1998.
Reserves - As of November 30, 2004, 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
$6,336,563.
Fiscal Year Ended November 30
2002 2003 2004
Annual pension coat (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 for the following employees:
o General employee members - All merrbers hired on or after March 17, 1997
o Police lieutenant and sergeant members - All members hired on or after
December 8, 1997
I Police officer members - All members hired on or after November 24, 1998
1 Fire fighter members -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).
55
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
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:
Empbyees Transferring
New Employees Hired
from the Defined Benefit
After the Effective Dates
Pension Plan
NdedAbove
Eiryleyer Employee
Employer Eiryleyee
CantribNion Contribution
Gantribution CmiribNion
General 12% 31%t0366% 7% 31%to 366°%
Police lieutenants 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 $1,888,396
during the current year, and employees contributed $671,860.
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 City's Other Employee Benefits Trust Fund.
56
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 12 - Postemployment Benefits (Continued)
Eligibility - All retirees of the Defined Benefit Pension Plan and the Defined
Contribution 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, 2004, the City's annual post -
employment cost of $5,859,287 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, 2002, using the entry actual age cost
method. Significant actuarial assumptions used include (a) an 8.25 percent
investment rate of return and (b) projected 6.5 percent annual rate for medical
care inflation. 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, 2004, the trust reserves for employees' post -
employment benefits have been fully funded as follows:
Reserve for health insurance $ 30,361,435
Reserve for disability insurance 826,912
Total reserves $ 31,188,347
57
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 12 - Postemployment Benefits (Continued)
Fiscal Year Ended November 30
2002 2003 2004
Annual pension cost (APC) $ 4,575,001 $ 4,960,217 $ 5,859,287
Percent of APC contributed 100% 100% 100%
Net pension obligation $ - $ - $ -
Upcoming Reporting Change - The Governmental Accounting Standards Board
has recently released Statement Number 45, Accounting and Reporting by Employers
for Postemployment Benefits Other Than Pensions. The new pronouncement
provides guidance for local units of government in recognizing the cost of retiree
health care, as well as any "other' postemployment benefits (other than pensions).
The new rules will cause the government -wide financial statements to recognize
the cost of providing retiree health care coverage over the working life of the
employee, rather than at the time the health care premiums are paid. The new
pronouncement is effective forthe year ending November 30, 2009.
Note 13 - Deferred Revenue
Governmental funds report deferred revenue in connection with revenue that is
not considered to be available to liquidate liabilities of the arrent period.
Governmental funds and Enterprise Funds also defer revenue recognition in
connection with resources that have been received but not yet eamed. At the end
of the current fiscal year, the various components of deferred revenue are as
follows:
Total $ 9cre02 $ 1212,Ts3 s 2,180s s 1,212,7v $ 1pa3,735
58
Governmental
Bmrewtyge
Governmental Farm
atedles
xuhtles
uoeagabe unearned
Taal
unearned
unearned
aroperti apodal assessment
aoddeer reaeimbe;
s 9Br,802 s - s
gram
$ -
$ -
Gommudry Rearedioo comer
mai rose
- 1y07,943
i o)7,sa3
i oar,sa3
-
Interest rerelmbe W sewer
connections
- -
-
-
sser2B
Assets eemat Wayne county
- -
-
-
227,007
Grad payment received prom
meeting all eigibgry requirement;
204a10
ana,sto
207,810
Total $ 9cre02 $ 1212,Ts3 s 2,180s s 1,212,7v $ 1pa3,735
58
Required Supplemental Information
City of Livonia, Michigan
Required Supplemental Information
Budgetary Comparison Schedule - General Fund
Year Ended November 30, 2004
59
Whence with Final
Original Budget
Furl Budget
HcLel
Budget
Revenues
Properly Taxes
s 26'ri s
26.&52]29 s
26.698.535
s n51.19!)
federalaN Permits
Business
139,4W
139,488
1482M
8,816
Noubsines;
1625,20
1,681780
2}4],658
09,950
T dal licenses and Perak
1.561,60
1827,100
2691
H9]96
Intergovernmental Revenue
State and local
18,107,352
10107,352
9,166,074
09412]8)
Federal
Seem
80,000
112,893
32893
Trial intergovernini revenue
10,18],3'7
10,187,352
92]8,96]
(908,385)
Charges la Services
3612305
3,643,672
3,35£635
(2]],037)
related
672oW
6n,000
414532
(251418)
Hnes and Rodeiture.
3,371
4251,000
3,730,818
(520,182)
MiecelNnews Revenue
Red and inserted
1201
1200,627
1112506
(33,121)
Sale erfixed assets
2500W
Mean
32.540
(211455)
Other miscellaneous
18]9,80
1,949,890
18]6,4]6
(73414)
T dal miscellaneous revenue
3X0,517
3,400,517
3,021527
(378990)
Isuaree d Debt
485.000
485,000
T dal revenue
S 49591504 S
51 S
49,491960
$ (LWAID1
E:Penditure:
Generali ral
Legislative:
Cl
$ 353,061 $
355.466 $
355,331
$ 85
City Clerk
500,161
49],]61
459.551
36210
Sections
290,]91
n0,]91
261,310
29,481
Tdauegialdive
1144,013
1144.18
1076242
6ly16
Se l
2,420,573
2,420,573
2,392,902
216+1
Exanaive
bkyerg office
224,10
224,103
M'Sal
i45s
ndarnbvative aanzes
232332
232,332
1s564o
96,742
Total executive
506,485
506,485
438236
93200
Hurre
Iabxrelatrmg
13],00)
137,000
58}49
]8651
Civil Samoa
]2g.8A
629839
624594
5245
T dal hurren resources
866,83)
765,839
632943
83896
59
City of Livonia, Michigan
Total protective inspection 1,215,23 1215,285 1;194882 20,323
Total Wdicsfely 31917,418 3262],2]6 31837356 Tril 8
60
Required Supplemental Information
Budgetary Comparison
Schedule - General
Fund (Continued)
Year Ended November 30, 2004
Vallance with Final
Original Budget
Final Budget
/actual
Budget
Expenditures (cunlinued5
Deaaml Government (Continued)
Financial adnnirvat on:
Accounting
8 426,346 8
426,3,18 8
421637 8
4,711
Assessing
511
537,661
569,836
28613
Finance
2]5,28]
2]6,18]
276,866
39
Independent audit
53,5ffi
53082
53j92
98
Board of Review
3,153
3,153
2,865
266
Treasurer
Sbddd
534}33
497,611
16]22
Dab processing
557,702
55],]82
519225
360]]
Total financial adainstratim
239,886
2,366,886
2271
12,950
Otheractivities:
Le9a'
6642
6645
632093
1765
Utilities andsuDdes
556,741
554841
548314
6527
Acryisitiou of land
9,800
10,900
10,818
82
reason and Investigation
24,800
24,888
24,888
Ethics heard
268
2,658
16]8
968
Dug and su5anprions
57,060
57,000
50,756
62U
Total other adieg¢
129,651,
1263.657
1266.859
155%
Total general gmvemnent
8fifirg 6
8518376
8,186267
482,891
wdc surety
Tons
Traffic waau
Iffil
1009372
1o09292
s0
Adainstratim
3,63945
297]336
2,005286
12,138
Detective Wrwu
2386.429
2,343,11
2,343,836
93
Automotive service
369,402
364,882
383,903
99
Coal :atimsRemrds Wreau
816,124
816,]26
]95226
21582
Crossing guards
63,83]
63837
51235
11882
Dare5tlool union
420,09
469369
469335
33
Rene farce
331,188
346,486
346,487
1
Patrd Wrwu
ffir'l 25
1857111
18571;188
17
intelligence bri
1583449
1530149
1530146
3
Total podce
20362234
201
20,464074
45,760
Fire
Adainstraiim
763489
761,769
741235
285321
Firefighting
9884891
9,56!,968
9817,568
558,128
Fire prevention
571,588
571586
418,485
153183
Total fire
1835,9n
18?81337
ffir'l 88
71837
Protective Infection:
Budding Coude Board ofAffiffiels
1,592
1592
465
1187
Irsfectiou
1,117166
1,111
1188955
16218
Office of Emergenq Prederecines
896(3
fill
fill
1326
Traffic Commsim
6,]Bf
6,]64
5,186
16]8
Total protective inspection 1,215,23 1215,285 1;194882 20,323
Total Wdicsfely 31917,418 3262],2]6 31837356 Tril 8
60
City of Livonia, Michigan
61
Required Supplemental Information
Budgetary Comparison Schedule
- General Fund (Continued)
Year Ended November 30, 2004
W once with Final
Original Budget
Final Budget
Ictal
Budget
raaenditures(Continaeat
Puacwarks
Putlicsom es- Highways, streets, and
intenance
Engineering
$ W228
$ 511 $
503$88 $
10710
Pilninistratim
1'M
1813
2
1811
E4iprent maintenance
MEW)
14,935
10,810
95
Bunning maintenance
1769950
1]!1163
1]!1;155
]
Street lighting
32],536
29]538
29]2(4
274
Wscen nae
Streets
163
76,664
]65]5
89
TraRnserviss
60,354
312M
31,07P1
127
Fw¢try
246
181
86
95
Tonal Wtli<wwVs
2734,983
2,711355
2694288
17,068
Recreation and cultural
Parksand recreation:
Parks maintenance
002291
895918
887,018
8,900
Administration
495,025
492,7PF1
46396o
26,]91
Recreation halides
39,121
39,121
33,452
5,659
SWimmng pads
1826M
182608
171343
11265
Recreation athletic
153882
11
134,093
11
Recreation program;
69.714
71966
63,751
8217
Tonal Wrksand recreation
1912,641
1836266
1]5364]
82621
Cultural:
Heard Presemtion Commision
4,706
4,706
3327
1361
Historicl Cameraman
65,855
]2961
]2861
80
iibaryCommison
450,000
450,000
450,000
-
HBCommision
20,793
20,793
18022
2371
Hunan Relations Commision
],]8
],]58
6200
1558
Youth Corral
9,806
9,706
88]2
834
commission on aging
20,125
20,125
19,038
1067
Cnmmnnily resources
963.SV
979313
902528
]6,]85
Tonal cultural
154,8'B
1,`55,3M
1681268
84,096
Tonal recreation and cultural
3075,500
3001632
3234,915
165717
conanunity and Ecanumic Be nalopmem
City Planning Commision
702932
702,992
618017
M575
Zonate Board ofHWesls
134265
134265
111937
22266
Tonal commnnilyand wonomh
devebprent
83],25]
83]25]
730614
1W,M3
5nployee Benellt; Insurance, and Other
2,039,M0
2932240
2829,085
103,155
Tonal erpendlures
$ 49590,168
$ 51,01 $
49,434345 $
1,585794
61
City of Livonia, Michigan
Community Recreation
Orginal Final Vanaceewith
Budget Budget &Mal Final Budget
Revenues
Pmperly taxes
$ 3,463,861
$ 3,463,861
$ 3,437,552
$ (26309)
Charges lar services
2,896,455
3,155,455
3,623,025
46],5]0
Slate sources
-
-
50,000
50,000
interest
50,000
50,000
86,444
36,444
Miscellanwus revenue
-
-
35500
35500
Transiars in
Total revenues
6,410,316
6,669,316
7,232521
563,205
Expenditures
5anitabon
-
-
-
-
Recmatonandculture
3873,840
4,692,563
4,189,M
502,791
Transiars out
2,101,193
2,101,193
2,100,718
475
Totalexpend9ums
5975833
6,]93,]56
6,290,490
503,266
Excess of Revenues Over (Under)
Expenditums
435,283
(124,440)
942,031
1866,471
Fund Balance-BNinniM of }ear
4098735
4099735
4090735
Fund Balance - End ofyear
$ 4,535,019
$ 3,975,295
$ 5,041,766
$ 1,066,471
62
Required Supplemental Information
Budgetary Comparison Schedule
Major Special Revenue Funds
Year Ended November 30, 2004
Refuse
Onginal Final Vanance with
BuOgel Budget Adual Final Budjet
$ 11,354,378
$ 11,354,378
$ 11,268,625 $
(85,753)
95,000
95,000
110,861)
15,861)
60,000
60,000
94,878
34,878
5,000
5,000
96,360
91,360
11514,378 11514,378 115]8,]43 56,365
12, 533,182 12, 909, 864 11,5&5,1W 1,324,671
12, 533,182 12, 909, 864 11,5&5,1W 1,324,671
(1018,804) (1395,486) (14,450) 1381,836
4,644,149 4,644,149 4,644,149
$ 3,625,345 $ 3,2A6,663 $ 4,629,699 $ 1,391,036
63
City of Livonia, Michigan
Required Supplemental Information
Pension System
Schedule of Funding Progress
(000s omitted)
Actuarial cost method
Amortizgtion method
Remaining amortizgtion period
Asset valuation method
Actuarial assumptions:
Investment ate of return
Projected salary increases,
including inflation at 4.75
Cost of living adjustments
64
Aggregate
Level percent, closed
Expected future working lifetime
Five-year smoothed market
8.25
4.75 % 12.67
Up to $240 annually for up to the
first six years after retirement
Unfunded
Actuarial
actuarial unfunded
Funded
(overfunded)
Actuarial
value of
xrrued Liatiity (overfunded)
Ratio
Covered A asa
Valuation
Assets
(Any En"Age Aal NAu)
(Percent)
Payroll Percentage of
Date
(a)
(b) (ria)
(alh)
(c) Covered Payroll
1113098
$ 1Hom `
$ 151,085 $ (25,95))
1172
$ 20,653 (1256)
11130'%
184,782 `
149,052 (35,M)
1240
18,6&1 (1912)
11130.00
192,4n `
148,670 (x3,817)
129.5
17,132 (2557)
11130.01
",937 `
151,x38 (49,49))
132.7
16,721 (2960)
11130.02
199627 `
159,2n (4),355)
1253
17285 (2335)
11130.03
x3,505 `
159," (43,m5)
lH3
11103 (2549)
valued using the fiveyear^s000thed funding
rarket value
Schedule of Employer Contributions
Annual
Year Ended
Required
Percentage
November 30
Contribution
Contributed
1999
$ 1,919,594
100
2000
837,116
100
2001
645,335
100
2002
417,464
100
2003
392,639
100
2004
-
100
The information presented
above was determined as part of the actuarial
valuations at the dates
indicated. Additional
infomation as
of November 30, 2003, the
latest actuarial valuation, follows:
Actuarial cost method
Amortizgtion method
Remaining amortizgtion period
Asset valuation method
Actuarial assumptions:
Investment ate of return
Projected salary increases,
including inflation at 4.75
Cost of living adjustments
64
Aggregate
Level percent, closed
Expected future working lifetime
Five-year smoothed market
8.25
4.75 % 12.67
Up to $240 annually for up to the
first six years after retirement
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 five-year "smon ed funding" no rlet value
"In fon nation not available
Actuanal
Actuarial
Annual
Funded
Required Percentage
November 30
Aauanal
Value of
Aorued Liability
Unfunded
Ratio
Covered
DAAL as
Valuation
Assets
(ML)En"Age
AAL(DAAL)
(Percent)
Payroll
Percentage of
Date
(a)
(b)
Oha)
left
(0)
Covered Payroll
11/3W8
E 23250 `
E 51,118
E Zr,868
45.5
E 28,989
961
11/3059
24,360 `
61,35]
36,997
33.7
383]5
1218
1113N00
25,337 `
71,464
46,127
35.5
31,523
1,463
11/3051
11/3tl03
W475
104386
73.911
232
34064
2168
`Valued using the five-year "smon ed funding" no rlet value
"In fon nation not available
65
Schedule of Employer Contributions
Annual
Year Ended
Required Percentage
November 30
Contribution Contributed
1999
f 3,066,032 100
2000
3,542,404 100
2001
4,318,306 100
2002
4,575,001 100
2003
4,960,217 100
2004
5,859,287 100
65
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, 2003, 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
Five-year smoothed market
Actuarial assumptions:
Investment rate of return
8.25
Projected annual premum increases,
including inflation at4.75%
10%
66
City of Livonia, Michigan
Notes to Required Supplemental Information
November 30, 2004
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 CwnmmAy Recreation Refuse
Taal Total Trial Trial Taal Todd
Revenue l3penJlwes Revenue �pendturrs Revenge l3penJlwes
Amank per creating statement 8 47,819,324 $ 48.292.597 $ ]23'{521 $ 0,189,]]2 $ 115]8,]43 $ 11585,193
Issuance of ceN b d3etedas
485,888 - - - - -
Operatmgtransfers usual as
revenue and expenciturss 1187,636 1141]48 - 2,188,718
Amounts per Wtlget statement $ 49,491,960 $
49,431,3!5 $
7232521
$ 6298098 $
115]8,]0.3 $
11585,193
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.
I 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 approve
or disapprove the adopted budget, in whole or in part.
67
City of Livonia, Michigan
Notes to Required Supplemental Information
November 30, 2004
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.
Other Supplemental Information
City of Livonia, Michigan
Gants and SAD PON<4kgy
Streets Local Streets Street LmhTna Cabe Telemson LiNary Cwnmination
Assts
Cash adlnvest"nis
8
1.96466f 8
1,V3,3212 8
123,993 8
1.213,33 8
639.101 8
1,Trtm
Reawbes:
Taxes
9,0321
-
SPecialasesments
-
-
2,736
-
-
-
Other
6,999
-
-
@10
-
0],9]2
Due hwn other find
Due hwn other govemnrenlal snits
6 rist
maziri3
W,719
-
-
-
Restric@aasets
T dal assets
S
2,6WAM S
1,455805 S
9TFAas S
1210,132 S
fim,175 $
t,3a6,]u
LiaNlities aN FUM Balances
Liabilities
Accounts Myabe
$
69375 $
10,750 $
575,891 $
859]1 $
65,370 $
Accrued and other 0ad00es
-
-
22,666
8,333
63943
-
Derariedrevenue
-
-
2M,810
-
7285
-
Due to other firvd
Total liabBies
69375
10,750
803,
KZ21
1658
-
From] Balances
Ra:ervearwal*tal construction
-
-
-
-
-
-
Unreserved Undesignated
2591,061
1A0.5,055
176,081
1,11,898
5115T
1,386746
TOUINnafulanaes
2591,061
1A0.5,055
176,081
1,115,898
5115T
1,386746
Tdalliablitiesana
Nna balances
$
2,6WAM S
1,455805 S
9TFA48 $
1210,132 S
fiaa,175 $
1}86,]44
m
Other Supplemental Information
Combining Balance Sheet
Nonmajor Governmental Funds
November 30, 2004
s0eaal Revenue Fina;
8
Dort serve Fina;
MW10MI
Bultlrg
ngwwted Revd: and
1%D!rtreet spe<al
Mhar�tyaM
Fwrnwrea S&MIrt
imuwermm Assessments
other
714,12 8 2,M7,1A 8 11714 8 122,3 8 iw8
- 9,931 3,8T] - -
64822
65,535
419,951
S
714,12 $ 2,1n5W $ 14,N1 $ 186,3ZI $ 560,286
s 52,142 s 32o,4 $ - $ - $
- 8,011 2,482 60,331
52,142 M8 2,482 60,U1
662200 1194,128 12,309 125,996 sw286
w 200 1194,128 12,309 125,996 56026
S
714,12 $ 2,1n5W $ 14,)91 $ 186,311 $ 560,286
70
City of Livonia, Michigan
71
Qpbl 9rog<ia Fmd:
orange
Cercooise
Street
Prgecb
1%09ree1
Capbl
Caplal
IWovement
Construction
Imaovemem
Fire station
Imaovermn1
lWowment
stens
Cashandinvesbnents
8 -
8 113,67l)
8 -
8 -
8 261,266
8
816,117
Rea wb6:
Taxes
sI> easessmems
-
-
-
-
-
-
Other
Due nom other Nnra
3682
-
-
-
-
-
ooenomothergovernmentalonns
-
-
-
-
-
-
Resbiaeaaseta
4866i79
1'a6T,721
Total asels
S 490}61
S 113,670
$ ipQRi
S
S 2QM6
$
816,117
ueu6Bg and Fund Balances
HabiliUes
Accounts Made
8 -
5 -
S 24.976
S -
5 -
8
86.755
A<aoeaanaomer liaames
-
-
-
-
-
-
Berarrearevenoe
-
-
-
-
-
-
BoetootherNnra
Total ladmles
-
-
26,974
-
-
86,755
Fund Deadens
ReseiwaNrwptal construction
4866i79
-
1a ,747
-
-
-
Unrservetl-ondeagna@tl
3,662
113,67l)
29,3£
]29,3fi2
Total Nntl babncs
490,361
113,67l)
1,442,]4]
-
261,3£
]23,352
Total Iia ellis and
Nntl babncs
$ 4911,361
S 113,670
$ ipQRi
S
S 2QM6
$
816,117
71
Other Supplemental Information
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
November 30, 2004
Qrui argecle Fm�
Ca Unry 7wa Nwn ji
swim ae<reaow can BUIUM �rn"dai
rimes"me cwalrucow i� Gwmema Funa
55,183 0,215 - z241,T
-
2w,W
22 046
z133,9
5 ,757
668949
243886
1z2K,%8
121361
3,6�
S ,]5]
2M,W
1,]93969
16,416,926
W,751
z62,1%
$ 1,100,860 $
2W,7W $
2,0,806 $ 16,664,716
8 23.86] 8
0,215 8
- 8 1330763
918]2
'Y],554
-
- 8104]3
3682
-
- 3682
55,183 0,215 - z241,T
-
2w,W
-
z133,9
5 ,757
243886
1z2K,%8
S ,]5]
2M,W
243886
16,416,926
$ 1,100,860 $ 22),75) $ 243,806 $ 16,664,716
72
City of Livonia, Michigan
73
Grandaunt
San street
aide
PUNC&Gty
XAjm SBeets
Local Streets
Lighting
Televzon
UNary
Commination
Revenue
Pmpetytaxes
8 -
8 -
8 -
8 -
8 35 605
8 -
Sinecialasessments
83,07
-
-
Intergovernmental revenue
State and lural
6805,169
1818,942
58],0]0
-
-
-
Federal
-
-
1,145,0033
Charges M services
-
-
53,A5
-
300,990
598,030
Interest
b,623
7,101
1,035
11
18,738
11
Fines and MkiWres
-
-
-
-
73538
Miscellaneous revenue
W,E83
5!7,016
500
T dal revenue
4,831
1,826M6
Ztas' 3
563,M9
3933,371
61],60]
Expenditures
General government
-
-
ii
-
-
-
Pudi<skty
-
-
9K)'M
PUNICWmb
253it,3,12
1803,3P
851,tt8
-
-
-
RecreationantlNture
-
-
0896Ti1
639,701
3818,691
-
Community and economcmvelop�m
-
-
1,050'M
-
-
-
Carol
Caroladay
-
-
-
-
-
-
BeN- Principal retirement
-
-
-
-
-
-
BeN-mterestanddeer
TdalexpenaWres
25313t42
1,8033n
2thi
639.701
3,818,091
854W
Excessop Re.en e0ver(Bnden
Expenditures
2,305,,130
nr]
(21,568)
p6,63T,
115280
532147
rnlerRmnceg saurees (Be:(
Transfars in
-
2,301,M
-
-
456,000
-
Trasfersod
(250128]
(111,400
(4000N
(476,11
(5000W)
Total other financing sources(uses)
(250128]
4612BE
(40,00
il
(5000W)
Net Charge in WM BaNnces
(11
484,016
(T1,568)
(116,02)
8816]
32M]
FundBalances-Beginning mfyar-Mresta@t
27E6918
Sri
201649
1232530
422410
1,3W,5w
FundBahanca-Entmfyar
$ 259t,ofit
$ 10345,055
$ 17,081
$ 1,115,a98
$ 5115H
$ "M,7a4
73
Other Supplemental Information
Combining Statement of Revenue, Expenditures,
and Changes in Fund Balances
Nonmajor Governmental Funds
Year Ended November 30, 2004
Sgeael Revenue Fug oew SeMce Funa
P4utl tea Rmdwd 1998SIree1 Specal Municipl Buidng
FwWureg SI&WAs lmuQ "nt Hammed: Mh"endomer
8 - 8 3897,131 $ 12055% $ - $ -
58607
323215
9,083 420]3 280 6,860 7,T@
157,Q33 - - - -
69 85,882 773,682
489400 4,025,086 1205474 65247 now
50]3,021
- - 1,085,000 168,000 1547,8W
U8169 15,312 19]8381
438822 5073,821 1,223,169 175,312 3526,191
51]]6 (1447,935) (17295) (110,065) (2,]45251)
-
2,040,000
-
-
3,165,382
(1181)
2,040,000
3165201
51 TB
592065
(17295)
(110,065)
419,959
610,422
1202063
23,604
236,061
140,336
S 662200 $
1,794,128 $
12,309 $
125y96
$ 560286
74
City of Livonia, Michigan
75
Cardial Francis Funds
orange
GdfCa,rse
Street
Propels
1991
Cardtal
tnnarwemem
Conduction
innaro emem
Fire Maton
innaruvement
demand
Propenytaxes-
specialaesemmems
-
-
-
-
-
imergaveminental revenue:
State anclonl
-
-
-
-
-
Federal
-
-
-
-
-
ClergesMservices
131,855
Interest
8,313
1,0.31
16,368
3%
2,710
Finn and MkAures
-
-
-
-
Miscellaneous revenue
6
Total immune
8,313
1431
16,368
3%
136576
Expenditures
Genera govarnment
Pudicsakty
Pudic Wods
-
-
-
-
-
Recreationandcu8ure
-
-
-
-
-
Comnunty add ecmwni< Rvelopnent
Capta ootlry
-
-
130006
-
13500
oeal Principal reorennm
-
-
-
-
-
oeN-mtermtanaumer
Total expenditures
136468
13500
Excess of Revenue Over(Under)
Expenditures
8,313
1431
(116,060)
326
121076
Other Financing Sources (Use)
Transfers in-
-
-
-
-
TransfersoN
(169,862)
(70,635)
(63919)
Total other Funding sources(useg
(16986]]
,
(0.3919)
Net Change in Fund Balances
(161569)
1,631
(116,060)
(70,322)
]],157
Fund Balances- Beginning ofyear-M resta@tl
01,930
112,239
1,556]8]
70,322
190,109
Fund Balances -End of year
$ 690,361
$ 113,670
$ 1,442]4]
$
$ 267,266
75
Other Supplemental Information
Combining Statement of Revenue, Expenditures,
and Changes in Fund Balances (Continued)
Nonmajor Governmental Funds
Year Ended November 30, 2004
capul aropcb Fund
76
Community
Trial Nw�jw
Captal
Special
Recreation
Cmtl Buidng
Gw rnmenbl
Iml mement
P en"nte
Construction
Imlx menti
Fund
8,642330
-
MZE
-
-
1083,742
7211,161
-
-
-
-
I1Ma29B
-
-
-
242,a63
1326924
22,W£
38519
2,931
969
248,719
2389]1
2192
1088M6
44874
MW
2,931
243,3]2
21,782,91
-
-
-
-
198000
614y9
-
-
-
-
10,661988
-
-
-
-
4,W.
-
-
-
-
1,50285
1212,922
A,939
157,939
-
1594,788
-
-
-
-
2,]9280]
2,131 E65
1212,922
A,939
157,939
23991;185
(1,10,m)
1]I1,M
(150,088)
2439]2
(2289,94)
103,au
10)'sae
-
-
8231,16
( 0,00q
-
-
-
(5893,018)
(1M53s
1®M
2337,99a
(1314593)
3 JW
(105,008)
243,3n
48,904
2,03
201,99]
359550
514
14,368,022
$ 929,362
$ 545,]5]
$ m4,542
$ 243,806
$ 14,416,926
76
City of Livonia, Michigan
Other Supplemental Information
Combining Statement of Net Assets
Pension and Other Employee Benefit Trust Funds
November 30, 2004
Assets
Cash and cash equivalents
Investments:
US government sawnhes
Common stack
Corporate bends
Foreign stock
Mutual funds
Real estate investment bust
Investments held by boker-0 alar and banks
order smunbes loans:
US. gosemment smunbes
US calFarBte iIXed Income
US. equities
Seventies leeching short-term collateral bank
investment pool
Other mmnsbles
Total assets
Liabilities
Amounts potable
Ammed and other liabilities
Amounts due to broker uncler smunbas lancing
agreement
Total liadlities
Net Assets - Reserved
Empicnees' Retirement System
Empicnees' postemployment health corn and
disability benefits
Total net assets
T7
Employees'
Retirement
$ 67,119 $
- $
67,119
29,579,928
6,784,816
36,364736
94,986,083
],18],931
102,174,014
35,342,327
6,136,684
41,479,011
996,146
166,354
1,102,506
8,114,259
1100.1,917
19,118,176
10006.000
-
10.006.000
8,021613 - 8,021673
4305,450 - 4,305,458
12138801 - 12138801
25,188,214 - 25,188,214
208 692 568.446 M 138
230,148,144 31]88,148 262,536,892
3568,906
599,801 4,160,101
681,746
- 681,746
25,188,214
25,188,214
30,030,926
599,801 30,630,121
194,381,255 - 194,381,255
6,336,563 31,188,341 31,524,910
$ 200,]1],818 $ 31,188,381 $ 231,906,165
City of Livonia, Michigan
Other Supplemental Information
Combining Statement of Changes in Net Assets
Pension and Other Employee Benefit Trust Funds
Year Ended November 30, 2004
Additions
I mestment income:
Interest and dividends
Net appreciation in for value of investments
Less inveshnent expenses
Net investment indame
Securities landing incone_
Interest and fees
Less borrower rebates and bank tees
Total kndiny income
Contributions:
Employer
Employee
Total contributions
Total additions
Deductions
Benefit payments
Medical benefit payments
Adm inistrabso expenses
Refunds ofcontnbutions
Total deductions
Net Increase
Net Assets Held in Trust for Pension and other
Employee Benefits
Beginning of year
End of year
78
Employees'
Retirement
$ 6974,977 $
1295174 $
8,270,151
17,374,773
1592,785
18,96/,478
(258,836)
(33,866)
(291924)
921 610
-
921 610
24,090,914
2,854,791
26,9as,705
287,761
-
287,761
(264,654)
(264,654)
23,187
-
23,187
-
5,859,287
5,859,287
569,371
569,371
569,371
5,859,287
6,428,658
24,683,392
8,714,878
33,397,478
10 545,996
14,886
10,560,882
4,279,357
485,647
4,685,004
139,143
14,582
153,725
921 610
-
921 610
ikb".R1I111 RRIN16iraiai{%il
8,79286 8,278,963 17,076,249
191,920,532
22,969,384
214,829916
$ 208,717,818
$
31,188,347
$
231,986,165
District Court Funds of District No. 16
City of Livonia, Michigan
Financial Report
with Supplemental Information
November 30, 2004
District Court Funds of District No. 16
City of Livonia, Michigan
Contents
Report Letter
Basic Financial Statements
Statement of Net Assets - Fiduciary Funds
2
Notes to Financial Statements
34
Other Supplemental Information
Schedules of Cash Receipts and Disbursements
plate n
moran
Independent Auditors Report
District Judges of the 16th District Court
Honorable Kathleen McCann and
Honorable Robert Brzezinski
Livonia, Michigan
Plante B Moran, PLLC
27400 NM tem HghwW
PO. ew am
SMhfiep, MI 4a 037
rd 24a25225a
Fav 248962W19
We have audited the financial statements of the District Court Funds of District No. 16, City of
Livonia, Michigan as of November 30, 2004. These financial statements are the responsibility of
the Court's management. Our responsibility is to express an opinion 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. 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 opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the financial position of the District Court Funds of District No. 16, City of Livonia, Michigan at
November 30, 2004, in conformity with accounting principles generally accepted in the United
States of America
The accompanying financial statements do not present a management's discussion and analysis,
which would be an analysis of the financial performance for the year. The Governmental
Accounting Standards Board has determined that this analysis is necessary to supplement,
although not required to be a part of, the basic financial statements.
Our audit was conducted for the purpose of forming an opinion on the District Court Funds of
District No. 16, City of Livonia's basic financial statements. The accompanying other
supplemental information, as identified in the table of contents, 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.
January 20, 2005 ' J^
1
District Court Funds of District No. 16
City of Livonia, Michigan
Statement of Net Assets
Fiduciary Funds
November 30, 2004
Agency Funds
Depository Bond
Account Account Total
Assets
Cash and cash equivalents (Note 2) $ 448,969 $ 329,255 $ 778,224
Due from bond account 1,521 1,521
Total assets $ 450,490 $ 329,255 $ 779,745
Liabilities
Due to.
Depository account $ - $ 1,521 $ 1,521
City of Livonia 313,792 7,622 321,414
State of Michigan 129,715 - 129,715
Wayne County 6,983 - 6,983
Bond deposits, voluntary work program, and other 320,112 320,112
Total liabilities $ 450,490 $ 329,255 $ 779,745
See Notes to Fir ancial Statements. 2
District Court Funds of District No. 16
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 1 - Significant Accounting Policies
The accounting policies of the District Court Funds of Distinct No. 16, City of
Livonia, Michigan (the "District Court") conform to accounting principles generally
accepted in the United States of America (GAAP) as applicable to govemmental
units. The District Court is governed by two elected judges. There are no
conpment units.
The following is a summary of the significant accounting policies used by the District
Court Funds of District No. 16:
The funds of the District Court are Agency Funds. The financial activities of the
funds are limited to collections of amounts that are subsequently returned or paid to
third parties. The Agency Funds are reported using the current financial resources
measurement focus and the modified accrual bass of accounting. The funds are
custodial in nature (assets equal liabilities) and do not involve the measurement of
results of operations. The District Court is responsible for traffic and moving
violations, certain civil matters, and misdemeanors within the city limits.
Note 2 - Cash and Cash Equivalents
The District Court is authorized by Michigan Public Act 20 of 1943 (as amended) to
invest surplus monies in U.S. bonds and notes, certain commercial paper, U.S.
government repurchase agreements, bankers' acceptances, and mutual funds and
investment pools that are composed of authorized investment vehicles. The cash
and investments of the District Court are classified by Governmental Accounting
Standards Board Statement Number 3 as deposits in financial institutions (checking
accounts, savings accounts, and money market accounts. The District Court
deposits of $778,224 were reflected in the accounts of the bank (without
recognition of checks written but not yet cleared or of deposits in transit) at
$745,455. Of that amount, up to $236,498 is covered by federal depository
insumnce and the remainder would be uninsured and uncollateralized. The District
Court has designated three banks for the deposit of its funds.
The District Court believes that due to the dollar amounts of cash deposits and the
limits of FDIC insurance, it is impactical to insure all bank deposits. As a result, the
District Court evaluates each financial institution with which it deposits District
Court funds and assesses the level of risk of each institution; only those institutions
with an acceptable estimated risk level are used as depositories.
District Court Funds of District No. 16
City of Livonia, Michigan
Notes to Financial Statements
November 30, 2004
Note 3 - Court Operations
The costs relating to the operation of the District Court (including risk management)
are a budgeted item of the City of Livonia, Michigan General Fund and, accordingly,
such costs are paid by the General Fund.
The District Court 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.
General Liability - The District Court participates in the Michigan Municipal Risk
Management Authority for claims relating to general and auto liability, auto physical
damage, and property loss claims.
The Michigan Municipal Risk Management Authority (the "Authority") risk pool
program operates as a claims 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 claims up to the retention lirrits, the
ultimate liability for those claims remains with the City of Livonia. In addition to the
Imes retained, the City of Livonia is responsible for certain defense costs.
Workers' Compensation - The District Court employees are covered under the
City of Livonia's self-insured workers' compensation program. The workers
assigned to the Court Voluntary Work Program in lieu of jail are not covered.
However, the District Court does have a policy that covers up to the first $1,000
per occurrence and the City of Livonia's self insured plan covers claims in excess of
$1,000 for the workers assigned to the Court VoluntaryWork Program.
Medical Claims - The City of Livonia has purchased commercial insurance for
medical benefits for the District Court employees. The District Court participates in
this plan in the same manner as the City of Livonia employees.
Other Supplemental Information
District Court Funds of District No. 16
City of Livonia, Michigan
Other Supplemental Information
Schedules of Cash Receipts and Disbursements
Year Ended November 30, 2004
5
Depository
Bond
Account
Account
Cash and Cash Equivalents - December 1, 2003
$ 370,302
$ 325,518
Receipts
Fines and fees collected
5,652,971
-
Bond receipts
-
1,059,205
Wayne County penal fines
116,842
-
Work program
-
198,087
Garnishments
-
1,139
Restitution, judgments, and other
3,889
98,708
Interest income
6,999
2,866
Total receipts
5,780,701
1,360,005
Disbursements
Transfers:
City of Livonia
3,671,104
-
CourtBuildingFund- City of Livonia
242,733
-
State ofMichigan
1,639,658
-
Wayne County
115,673
-
Bond transfers and refunds
-
937,572
Bond forfeitures
-
124,413
Work program
-
181,071
Garnishments
-
1,139
Restitution, judgments, and other
32,866
112,073
Total disbursements
5,702,034
1,356,268
Cash and Cash Equivalents - November 30, 2004
$ 448,969
$ 329,255
5
City of Livonia, Michigan
Federal Awards
Supplemental Information
November 30, 2004
City of Livonia, Michigan
Contents
Independent Auditors Report
Report Letter on Compliance with Laws and Regulations and Internal Control -
Basic Financial Statements 2-3
Report Letter on Compliance with Laws and Regulations and Internal Control -
Major Federal Awards
4-5
Schedule of Expenditures of Federal Awards
6-7
Reconciliation of Basic Financial Statements Federal Revenue with Schedule of
Expenditures of Federal Awards
8
Notes to Schedule of Expenditures of Federal Awards
9
Schedule of Findings and Questioned Costs 10-11
plate n
moran
Independent Auditors Report
To the Honorable Mayor and
Members of the City Council
City of Livonia, Michigan
Plante B Moran, PLLC
27400 NM tem HghwW
PO. ew am
SMhfiep, MI 43S 037
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We have audited the basic financial statements of the City of Livonia, Michigan for the year
ended November 30, 2004 and have issued our report thereon dated February 18, 2005. Those
basic financial statements are the responsibility of the management of the City of Livonia,
Michigan. Our responsibility was to express an opinion on those basic 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
Audifing 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
basic financial statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the basic 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 bass for our opinion.
Our audit was made for the purpose of forming an opinion on the basic financial statements of
the City of Livonia, Michigan taken as a whole. The accorrpanying schedule of expenditures of
federal awards and reconciliation of financial statements federal revenue with schedule of
expenditures of federal awards are presented for the purpose of additional analysis and are not a
required part of the basic financial statements. The information in these schedules has been
subjected to the auditing procedures applied in the audit of the basic financial statements and, in
our opinion, is fairy stated in all material respects in relation to the basic financial statements
taken as a whole.
rf(ae& O Aol�, PLLIt.
February 18, 2005
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Report Letter on Compliance with Laws and Regulations and
Internal Control - Basic Financial Statements
To the Honorable Mayor and
Members of the City Council
City of Livonia, Michigan
We have audited the financial statements of the City of Livonia, Michigan as of and for the year
ended November 30, 2004 and have issued our report thereon dated February 18, 2005. 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.
Compliance
As part of obtaining reasonable assurance about whether the City of Livonia, Michigan's financial
statements are free of material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, contracts, and grants, noncompliance with which could have a
direct and material effect on the determination of financial statement amounts. However,
providing an opinion on compliance with those provisions was not an objective of our audit and,
accordingly, we do not express such an opinion. The results of our tests disclosed no instances
of noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City of Livonia, Michigan's internal
control over financial reporting in order to determine our auditing procedures for the purpose
of expressing our opinion on the financial statements and not to provide assurance on the
internal control over financial reporting. Our consideration of the internal control over financial
reporting would not necessarily disclose all matters in the internal control over financial
reporting that might be material weaknesses. A material weakness is a condition in which the
design or operation of one or more of the internal control components does not reduce to a
relatively low level the risk that misstatements in amounts that would be material in relation to
the financial statements being audited may occur and not be detected within a timely period by
employees in the normal course of performing their assigned functions. We noted no matters
involving the internal control over financial reporting and its operation that we consider to be
material weaknesses.
To the Honorable Mayor and
Members of the City Council
City of Livonia, Michigan
This report is intended solely for the infomation and use of the City Council, management,
federal awarding agencies, and other pass-through entities and is not intended to be and should
not be used by anyone other than these specified parties.
%mac&. t , FL4C
February 18, 2005
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Report Letter on Compliance with Laws and Regulations and
Internal Control - Major Federal Awards
To the Honorable Mayor and
Members of the City Council
City of Livonia, Michigan
Compliance
We have audited the compliance of the City of Livonia, Michigan with the types of compliance
requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133
Compliance Supplement that are applicable to each its major federal programs for the year
ended November 30, 2004. The major federal programs of the City of Livonia, Michigan are
identified in the summary of auditor's results section of the accompanying schedule of findings
and questioned costs. Compliance with the requirements of laws, regulations, contracts, and
grants applicable to each of its major federal programs is the responsibility of the City of Livonia,
Michigan's management. Our responsibility is to express an opinion on the City of Livonia,
Michigan's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted
in the United States of America; the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States; and
OMB Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations. Those
standards and OMB Circular A-133 require that we plan and perform the audit to obtain
reasonable assurance about whether noncompliance with the types of compliance requirements
referred to above that could have a direct and material effect on a major federal program
occurred. An audit includes examining, on a test basis, evidence about the City of Livonia,
Michigan's compliance with those requirements and performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable
basis for our opinion. Our audit does not provide a legal determination on the City of Livonia,
Michigan's compliance with those requirements.
In our opinion, the City of Livonia, Michigan complied, in all material respects, with the
requirements referred to above that are applicable to each of its major federal programs for the
year ended November 30, 2004. However, the results of our auditing procedures disclosed an
instance of noncompliance with those requirements that is required to be reported in
accordance with OMB Circular A-133 and which is described in the accompanying schedule of
findings and questioned costs as item 2004-1.
To the Honorable Mayor and
Members of the City Council
City of Livonia, Michigan
Internal Control Over Compliance
The management of the City of Livonia, Michigan is responsible for establishing and maintaining
effective internal control over compliance with requirements of laws, regulations, contracts, and
grants applicable to federal programs. In planning and performing our audit, we considered the
City of Livonia, Michigan's internal control over compliance with requirements that could have a
direct and material effect on a major federal program in order to determine our auditing
procedures for the purpose of expressing our opinion on compliance and to test and report on
internal control over compliance in accordance with OMB Circular A-133.
Our consideration of the internal control over compliance would not necessarily disclose all
matters in the internal control that might be material weaknesses. A material weakness is a
condition in which the design or operation of one or more of the internal control components
does not reduce to a relatively low level the risk that noncompliance with applicable
requirements of laws, regulations, contracts, and grants that would be material in relation to a
major federal program being audited may occur and not be detected within a timely period by
employees in the normal course of performing their assigned functions. We noted no matters
involving the internal control over compliance and its operation that we consider to be material
weaknesses.
This report is intended solely for the information and use of the City Council, management,
federal awarding agencies, and other pass-through entities and is not intended to be and should
not be used by anyone other than these specified parties.
February 18, 2005
City of Livonia, Michigan
Schedule of Expenditures of Federal Awards
Year Ended November 30, 2004
US DeMn"d of Housing and urmn Deeloprem:
Comnun iy Developnem Blockcram:
Pmgramyear2003-B03MC25r8008
Programyear2006- BM M C 2s000a
Tool ComnuntyDevelopneN Bloakcrant
Passed/hroyh the Midrigan Spa/e Hosing Oevebpren/
ANhsrty- HOME Investment Partnership
Programyear2003
HOME Buyer Gant
Total HOME Invetnent PannershipGrat
Total U S. Determent of Homing and Urban Developnent
us. DetartnaN aNusoce- Federal Enplane Sharing Program
US Depannentsf Health and Huren Service- need
through Slate sf Mkhi9an DeMn"nt sfCsmm nlyHea'th-
SencrCente"aRug
Pasihrough Entry 20M Federal
CFDANumeer Prosed/GaNNumbir PwardAnaount E.oandwre
16218
N/A
16218
N/A
1021)
Wards 5068
1021)
W200150w
160000
N/A
13635
Protect 9/30/M
13635
Project 9/30/05
Total U S. Detannent of Health and Huren Service
6+5531 (1)
687000
U S. Department ofTranspar m- Passecithrogh the Michigan
6,862
347.236
Once of Highways fety Passing:
526]5
333300
Click it or Ticket
20600
PT 04V
Drive Michigan SklyTask Force
266M
F1 J0,11.
Total D.S. DepannentofTransinar n
],661
5,882
Detenmenl sf HsmelandSecurty- Federal Emergency
1,10
M4nagemenl Pgenq
67,302
32537
Emergency Preparedness and Rei Grant
970M
N/A
Peseathroyh Michigan Department of date Pope:
Sato
5505
s 506,000 s
6+5531 (1)
687000
M1.705 (1)
6,862
347.236
2T 200
526]5
333300
60,372
200 Pourer Outage
M3,M7
FEM,3189£M
302a3
380,116
380,116
],661
5,882
6,9T
1,10
7,00.5
67,302
32537
289,751
1276
33,813
Sato
5505
Emergency MAmgenent Perfonreree Gant
83552
NONE
6,882
6,862
20M Pre-0isaster Mitigatios Grant
8355]
NONE
35,SW
5278
200 Pourer Outage
9].835
FEM,3189£M
31
37,092
Total Department of HomehndSecurly
0,757
(1) Current year eapendWre include use of Ircgramincorre gong housing relatilAatim andCAyoxned Mmes
See Notes to Schedule of Expenditures 6
of Federal Awards.
City of Livonia, Michigan
Schedule of Expenditures of Federal Awards (Continued)
Year Ended November 30, 2004
US DeloHinnem of us6<e:
20W Loaf u<, Enbrement Blockcrank Program
2883 Loal lary Enbrsment BlockGrant Program
Total TocaI law Enfor<mmN BI¢k Dank Program
Drug Enforcement Achninstra4m Task Force
Passed throneh the Midiigan Slate Pdi<e:
2883 SHSGP I Assessment andStrategy
2003 SHSGa Exercise Grant
Tota u S. oekodinmnt of Justice
US DeleNnent of Agriculture - Posed through the Michgan
0eledment of Natural Reswraes:
DNR Community Forehiry Grant
DNR Community Foreh ry Grant
Pasedmroreh the Michigan DeloNrem of Agriculture
Delodmem of Agriculture Ash Borer Tree Removal
Tota u S. Delodinrent of Agriculture
Ds Ennsroninenkl Protection Agency
vwneraalryAsessment Grant
Pasedthroreh Wayne Cnomy
Retention nalityat 1* w}1d
Regional Storm Project
Tota u s Ennaronmemal Protection Agency
Total kRral award
See Notes to Schedule of Expenditures 7
of Federal Awards.
Pasermrough Entry 20M Forks
CFDANum6er Prgee/crantNumeer AwardAmonN Exenmurs
16592
N/A
$ 0.5,5T1 a
15571
5.A2
N/A
N,fias
0,815
50,416
16 unknown
N/A
10,116
1106]
97 ON
NONE
28,888
5,892
97 ON
NONE
17,800
4ENS
]1623
10660
CFG-04-11
500
500
10664
CFG-04-10
4,000
4,000
10025 791 sam Sai
sel
66476 N/A 115,000 35,345
FS unknown %P-9'5]03-02 188,800 69,115
FS unknown %P-5935NA5 305858 8,619
113,169
$ 1,8116,298
City of Livonia, Michigan
Reconciliation of Basic Financial Statements
Federal Revenue with Schedule of Expenditures of Federal Awards
Year Ended November 30, 2004
Revenue fromfedeal sources -As reported on the basic financial statements
(includes all funds)
$ 1,581,191
Less other grant revenue reported as federal revenue
(27,056)
Add federal drug forfeiture expenditures in excess of revenues
56,901
Add federal revenue reported as capital contributed from grants
113,109
Add federal revenue reported as other revenue
82,145
Federal expenditures per the schedule of expenditures of federal awards $ 1,806,290
City of Livonia, Michigan
Notes to Schedule of Expenditures of Federal Awards
Year Ended November 30, 2004
Note 1 - Significant Accounting Policies
The accompanying schedule of expenditures of federal awards includes the federal
grant activity of the City of Livonia, Michigan and is presented on the same basis of
accounting as the basic financial statements. The information in this schedule is
presented in accordance with the requirements of OMB Circular A-133, Audits of
States, Local Govemments, and Non -Profit Organizations. Therefore, some amounts
presented in this schedule may differ from amounts presented in, or used in the
preparation of, the basic financial statements.
Note 2 - Noncash Assistance
The value of the noncash assistance received was determined in accordance with the
provisions of OMB Circular A-133.
Summary of Noncash Assistance - The grantee received the following noncash
assistance during the year ended November 30, 2004 that is not included on the
schedule of expenditures of federal awards:
CFDA
Federal Program Number Description Amount
U.S. Department of Agriculture - Passed
through the Wayne - Metropolitan USDA Food
Community Services Agency 10.569 Distribution $ 27,655
Note 3 - Subrecipient Awards
Of the federal expenditures presented in the schedule, federal awards were
provided to subrecipients as follows:
Federal
Community Development Block Grant
91
14.218 $ 36,100
Amount
CFDA
Provided to
Number
Subredpients
14.218 $ 36,100
City of Livonia, Michigan
Schedule of Findings and Questioned Costs
Year Ended November 30, 2004
Section I - Summary of Auditor's Results
Financial Statements
Type of auditors report issued: Unqualified
Internal control over financial reporting:
0 Material weakness(es) identified? Ya
X No
0 Reportable condition(s) identified that are
not considered to be anterial weaknesses? Ya
X None reported
Noncompliance material to financial
statements noted? Ya
X No
Federal Awards
Internal control over major programs
0 Material weakness(es) identified? Yes X No
0 Reportable condition(s) identified that are
not considered to be anterial weaknesses? Yes X None reported
Type of auditors report issued on compliance for major programs: Unqualified
Any audit findings disclosed that are required
to be reported in accordance with
Section 510(a) of Circular A-133? X Yes No
Identification of major programs:
CFDA Number(s) Name of Federal Program or Cluster
14.218 Community Development Block Grant
16.000 Federal Equitable Sharing Program
Dollar thresh old used to distinguish between type Aand type B programs: $300,000
Auditee qualified as low-risk auditee? X Yes No
10
City of Livonia, Michigan
Schedule of Findings and Questioned Costs (Continued)
Year Ended November 30, 2004
Section II -Financial Statement Audit Findings
None
Section III - Federal Program Audit Findings
Reference
Number Findings
2004-1 Program Name- Community Development Block Grant -14.218
Finding Type -Material noncompliance
Criteria - The Consolidated Annual Performance and Evaluation Report
(CAPER) should include all expenditures and program income for the program
year in the financial summary section of the report.
Condition - The City did not include the proper program expenditures and
program income in the 2004 CAPER.
Questioned Costs- None
Context - The City did not include all of the proper expenditures and
program income of the 2004 program year in the financial summary section of
the 2004 CAPER.
Cause/Effect - The 2004 CAPER was submitted without all of the proper
program expenditures and income reported. The calculation in the financial
summary section of the CAPER for the percentage of funds disbursed for
public services exceeded the maximum allowable of 15 percent.
Recommendation - We recommend that the City file an amended 2004
CAPER with HUD.
Grantee Response - The City is in the process of resolving the issue and
plans to file an amended 2004 CAPER with HUD.
plate -e
Moran
February 18, 2005
The Honorable Mayor and Members
of the City Council
City of Livonia
33000 Civic Center Drive
Livonia, MI 481543097
Dear Mayor and Council Members:
PN02G S Momn, PLLC
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We have recently completed our audit of the financial statements of the City of Livonia for the year
ended November 30, 2004. In addition to our audit report, we offer the following comments and
recommendations for your consideration:
State Revenue Sharing
State shared revenue accounts for approximately 20% of the Citys total General Fund revenue.
Because of slower than anticipated growth In the State's sales tax collections (the sole source of
revenue sharing payments to local units of government) and the Stme's budget problems which have
resulted in additional appropriation reductions to the revenue sharing line item in the State's budget,
revenue sharing payments for the last several years have been lower than anticipated.
2005
As you are probably aware, the Governor's budget for the State's 2005 fiscal year contains a
provision to not pay counties statutory revenue sharing (the counties only source of revenue
sharing). Instead, the counties will change their property tax levy date for their operating millage
from December to July (beginning in 2005). A portion of the additional funds generated from the
early property tax levy will be used by the counties over a multiple year period to replace statutory
revenue sharing that will not be paid "a State. The plan calls for the return of statutory revenue
sharing for the counties when their restricted monies from the early levy run out. A key part tothis
plan allows the State to hold revenue sharing payments to cities, villages and townships for the
State's 2005 fiscal year m the prioryear levels. This plan was approved by the Michigan legislature
and signed by the Governor.
In February 2005, the Governor did unveil and Executive Order to remedy a $375 million shortfall
for the State's 2005 budget and it appears to propose no further cuts to revenue sharing. The
Executive Order has not been approved to date.
1
The Honorable Mayor and Members February 18, 2005
of the City Council
City of Livonia
State Revenue Sharing (Continued)
2006
The Governor also Introduced her 2006 budget with a $773 million shortfall in February 2005. At
this time, the budgeted amount for revenue sharing in 2006 is approximately the same as the 2005
funding level. The details on how the monies will be distributed on an individual community basis
are yet to be confirmed.
Although Increased sales tax revenue would support an increase to state shared revenue payments,
the State's budget situation remains troublesome at best. It is generally acknowledged that the
State's budget woes will continue for several more years. As a result, we continue to urge the City
to be conservative in its estimation of state shared revenue as this line item in the State's budget
remains vulnerable.
The table below derails the actual and projected revenue sharing payments for the City since 2000
compared to the fully funded amount adjusted for inflation at 3%. If revenue sharing payments had
increased by just 3% annually since 2000, the City would have received an additional $10.3 million
more in revenue.
State Fiscal
Year
Actual
Amount
Received
Fully Funded
Amount •
Shortfall
2000(Actual)
$11,212,225
$11,212,225
$
2001 Actual
11,202,409
11,548,592
346,183
2002 Actual
10,848,806
11,895,050
1,046,244
2003 Actual
10,368,950
12,251,901
1,882,951
2004 Act
9,318,799
12,619,458
3,300,659
2005 Estimate
9,246,560
12,998,042
3,751,482
Total
$62,197,749
$72,525,268
$10,327,519
* Adjusted for 3 percent annual inflation.
We will cominue to update the City as developments occur.
play n�
moran
The Honorable Mayor and Members February 18, 2005
of the City Council
City of Livonia
Funding of Post -Employment Benefit Obligations
The Governmental Accounting Standards Board has recently released Statement Number 45,
Accounting and Reporting by Employers for Post -employment Benefits Other Than Pensions. The new
pronouncement provides guidance for local units of government in recognizing the cost of retiree
health care benefits. The intent of the new, rules is to recognize the cost of providing retiree health
care coverage over the working life of the employee, rather than at the time the health care
premiums are paid. These new rules will applyto the govemment-wide financial swtements, rather
than the individual fund level. Asa result, the City will need to continue to budget for contributions
to a pre -funding plan. For many communities, the funding of port -employment benefits is the most
significant financial challenge they will face in coming years. The statement will not be effective until
the City's 2009 fiscal year. The cost of health care currently paid each year as premiums become
due has been increasing and the trend is expected to continue.
Unlike most cities, the City anticipated the significance of these costs and in 1986 began
accumulating funds on an actuarial basis for future health care payments. The VEBA fund currently
has approximately $31 million dollars set aside for these costs. The following table shows the
actuarial calculated funding progess:
Actuarial
Valuation
Date
Actuarial
Value of
Assets
Actuarial
Accrued
LiabilityUsbil'
Unfunded
Actuarial
Accrued
Funded
Ratio
11/30/98
$ 23,250,000
$ 51,118,000
$ 27,868,000
45.5%
11/30/99
24,360,000
61,357,000
36,997,000
39.7%
11/30/00
25,337,000
71,464,000
46,127,000
35.5%
11/30/01
*
'
11/30/02
11/30/03
30,475,000
104,386,000
73,911,000
29.2%
Not provided by actuary
As noted above, the actuanal calculated liability for retiree health care has more than doubled from
$51 million in 1998 to $104 million in 2003. As a result, the City's contribution to fund these costs
has almost doubled from $3 million in 1998 to $5.9 million in 2004.
4l
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The Honorable Mayor and Members February 18, 2005
of the City Council
City of Livonia
Internal Control and Fraud Prevention
Statement on Auditive Standards No. 99
Designing and maintaining a sound system of internal controls over City assets, as well as fraud
prevention and detection, are on the forefront in today's business environment. As part of our audit
of the City's 2004 financial statements, we performed additional procedures as required by
Statement on Auditing Standards No. 99, Consideration of Fraud in a Financial Statement Audit (SAS
99). While SAS 99 does not change the focus of the financial statement audit to a "fraud audit", the
new standard Incorporates a change in mindset for auditors to search for and identify significant
fraud riskfactors. SAS 99 requires auditors to perform specific procedures to search for significant
fraud riskfactors, including inquiries with key members of the administration and other employees
throughout the Organization; a retrospective review of accounting estimates; adetailed review of all
journal entries; and Other related procedures. Wewepleasedtomportthatnosignificantfraudnsk
factors or instances of fraud were identified as a result of our procedures.
We encourage the City to continue Its own efforts to reduce the risk of fraud which can be done
through a combination of prevention, deterrence, and detection measures. Fraud is often difficukto
detect because it frequently involves concealment through falsification of document or collusion
among management, employees, or third parties. Fraud prevention and deterrence measures are
typically much less costly than the time and expense required for fraud detection and investigation.
SAS 99 includes an appendix, Management Antifraud Programs and Controls; Guidance to Help
Prevent, Deter, and Detect Fraud, which discusses the fundamental elements of measures to
prevent, deter and detect fraud. Please contact us if you would like assistance in obtaining this
importarn document.
We would like to thank the Mayor and City Council forthe opportunity to serve as auditors forthe
City. We would also like to express our appreciation for the courtesy and cooperation extended
to us by the administration during the audit. If you would like to discuss any of these matters, or
would like assistance in their implementation, please contact us.
Verytrulyyours,
PLANTE & MORAN, PLLC
eo��
Bruce M. Serend
lam" K.A.,
Denise A Buckley V./-
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Moran