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CITY OF , Comprehensive Annual Financial report

For the Fiscal Year ended June 30, 2004

Kwame M. Kilpatrick Sean K. Werdlow Mayor Chief Financial Officer/Finance Director A view of Jefferson Avenue from the GM World Headquarters Building. Photo courtesy of City of Detroit - Communications and Creative Services Department. CityCity ofof Detroit, Detroit, Michigan Michigan ComprehensiveComprehensive Annual Annual Financial Financial Report Report FForor thethe FiscalFiscal Year Year Ended Ended June June 30, 30, 2004 2003 Kwame M.M. Kilpatrick Kilpatrick MayorMayor

Prepared by the Finance Department Sean K. Werdlow Chief Financial OÇcer/Finance Director

1 FOUNDED 1701 INCORPORATED 1806 AREA (Square Miles) 137.9 POPULATION 911,402 i ii iii

I N Introductory T R O D U C T O R Y

The Introductory Section contains:

Letter of Transmittal GFOA Certificate of Achievement for Excellence in Financial Reporting Auditor General's Letter City of Detroit Organizational Chart List of Principal Officials I-1 I-2 I-3 I-4 I-5 I-6 I-7 I-8 I-9 I-10 I-11 PRINCIPAL OFFICIALS Of The CITY OF DETROIT, MICHIGAN Executive (Elected)

Mayor KWAME M. KILPATRICK Legislative (Elected) City Council

MARYANN MAHAFFEY KENNETH V. COCKREL, JR. ALONZO W. BATES President President Pro Tem

SHEILA M. COCKREL KAY EVERETT SHARON McPHAIL (Deceased - November 24, 2004)

I-12 PRINCIPAL OFFICIALS Of The CITY OF DETROIT, MICHIGAN

BARBARA-ROSE COLLINS ALBERTA TINSLEY-TALABI JOANN WATSON

City Clerk JACKIE L. CURRIE

Other Executive Officials (Appointed)

SEAN K. WERDLOW MATTHEW A. GRADY III MIKE D. BRIDGES, CPA Chief Financial Officer/Finance Director Deputy Finance Director Chief Accounting Officer

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I-14 financial

The Financial Section contains:

Independent Auditors' Report F Management's Discussion and Analysis I Basic Financial Statements N Notes to Basic Financial Statements A Required Supplementary Information N C I A L House Construction

San Juan Townhomes

Bridgeview Townhomes 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 18% 18%

Charges for Servics

Operating Grants and Contributions Property Taxes

Municipal Income Tax

16% Shared Taxes

Other Revenues

18% 16% 14%

17 18.0% 3.0% 38.6% Public Protection

Health

Educational Development Recreation and Culture Economic Development Transportation Facilitation Housing 13.7% Supply/Conditions Physical 8.8% 5.2% 4.9% Environment 1.1% Development & 2.5% 4.2% Management Interest on Long- term Debt

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56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 City of Detroit, Michigan NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2004 Retired Year Ended June 30, 2004 Outstanding June 30, 2004 Bond Amount Interest Range of Maturity Date Issued Rate Amount Interest Rates Date Amount

Business type Activities: Water Fund

Water Supply System Revenue Bonds (notes C and D) Series 1993...... 10-15-93$ 38,225,000 4.65%$ 157,490,000 4.70 to 6.5% 7/1/04-15 $ 14,270,000 Series 1993...... 10-15-93 128,035,000 - - 4.70 to 6.50 7/1/04-23 12,910,000 c Series 1995A...... 10-15-95 102,100,000 4.70 73,495,000 4.70 to 5.55 7/1/04-12 70,130,000 Series 1995A...... 10-15-95 70,830,000 - - 5.50 7/1/13-25 12,150,000 c Series 1997A...... 9-1-97 29,080,000 4.40 3,845,000 4.30 to 5.25 7/1/04-06 12,655,000 Series 1997A...... 9-1-97 186,220,000 - - 4.80 to 6.00 7/1/07-27 186,220,000 c Series 1997B...... 9-1-97 30,555,000 6.00 6,655,000 5.0 to 5.25 7/1/04-06 22,040,000 Series 1999A...... 11-1-99 18,000,000 4.50 2,000,000 4.50 to 5.25 7/1/04-09 12,000,000 Series 1999A...... 11-1-99 238,340,000 - - 5.125 to 5.75 7/1/10-18 58,700,000 c Series 2001A...... 5-1-01 302,485,000 - - 4.50 to 5.75 7/1/11-33 167,675,000 c Series 2001B...... 5-1-01 108,985,000 - - 4.50 to 5.50 7/1/12-33 108,985,000 c Series 2001C...... 6-7-01 192,290,000 - - Variable 7/1/04-29 192,290,000 Series 2003A...... 1-28-03 234,805,000 - - 4.75 to 5.25 7/1/04-34 234,805,000 c Series 2003B...... 1-28-03 172,945,000 - - 2.0 to 5.25 7/1/04-34 172,945,000 c Series 2003C...... 1-28-03 46,355,000 2.00 2,665,000 2.0 to 5.25 7/1/04-22 43,690,000 c Series 2003D...... 1-28-03 151,370,000 - - Variable 7/1/04-34 151,370,000 c Series 2004A...... 5-04-04 77,010,000 - - 3.94 7/1/04-23 77,010,000 Series 2004B...... 5-04-04 163,590,000 - - 3.94 7/1/04-23 163,590,000 Total Water Supply System Revenue Bonds...... $ 1,713,435,000

Automobile Parking Fund

Detroit Building Authority Bonds - Revenue Refunding Bonds: Parking & Arena System-Series 1997A.... 2-15-97 $ 3,050,000 0.05%$ 340,000 4.60 to 4.80% 7/1/04-06 $ 1,110,000 Parking & Arena System-Series 1997B.... 2-15-97 37,695,000 6.60 4,250,000 6.68 to 6.79 7/1/04-06 14,535,000 Parking & Arena System-Series 1998A... 7-1-98 8,385,000 4.50 925,000 4.50 7/1/04-03 4,140,000 Parking & Arena System-Series 1998A... 7-1-98 18,615,000 - - 4.70 to 5.25 7/1/08-19 18,615,000 c Parking & Arena System-Series 1999A... 10-22-99 29,900,000 7.75 400,000 7.75 7/18/04-29 28,700,000 Total Authority Revenue Refunding Bonds...... 67,100,000 Total Business-type Bonds...... $ 4,155,687,599

Note A - As of June 30,2004, the City had $59,120,000 in outstanding General Obligation Bonds which have been defeased or advanced refunded. Note B - As of June 30,2004, the City had $490,565,000 in outstanding Sewage Disposal System Revenue Bonds which have been defeased or advanced refunded. Note C - Stated Principal amount of State Revolving Fund Bonds issued as part of the State of Michigan's Revolving Loan Program. As the System draws additional amounts from time to time hereafter, the outstanding principal amounts of such Bonds will correspondingly increase. Note D - As of June 30,2004, the City had $546,360,000 in outstanding Water Supply System Revenue Bonds which have been defeased or advanced refunded.

87 (Continued)

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122 123 124 125 126 127 128 statistical

The Statistical Section contains for the last ten fiscal years:

General Governmental Revenues by Source General Governmental Expenditures by Function Property Tax Levies and Collections Adjusted Tax Levies and Tax Collections by Levies Assessed and Estimated Actual Value of Taxable Property Property Tax Rates and Levies — All Overlapping Governments Special Assessment Additions and Deductions Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt per Capita Legal Debt Margin Computation of Direct and Overlapping Debt Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Governmental Expenditures Revenue Bond Coverage Real Property Value, Construction Permits and Bank Deposits — and — Principal Taxpayers Largest Private Employers S Miscellaneous Statistics T A T I S T I C A L Building 7DVWH)HVW   &RPHULFD 7DVWH)HVW WKHDQQXDO1HZ&HQWHU&RXQFLOIXQGUDLV LQJHYHQWIHDWXUHGIDPLO\IULHQGO\HQWHU WDLQPHQW LQ 'HWURLW¶V 1HZ &HQWHU$UHD 7KHRXWGRRUHYHQWLQFOXGHGPXVLFIRRG DQG EHYHUDJHV 2FFXUULQJ DURXQG WKH )RXUWKRI-XO\KROLGD\WKHIHVWLYDOWDNHV SODFHDORQJ:HVW*UDQG%OYGEHWZHHQ :RRGZDUG DQG WKH /RGJH )UHHZD\ 6HYHUDO VWDJH DQG HQWHUWDLQPHQW YHQ XHVDUHORFDWHGDURXQGWKH)LVKHU%XLOG LQJ DQG &DGLOODF 3ODFH WKH IRUPHU *0 %XLOGLQJ

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129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 &DUROD&DUOWRQ/RIW&RQGRV

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145 146 Table 16

Public Lighting: Electric Plant: Number of Street Lights...... 87,000 Number of Revenue Customers...... 1,302 Size of Generating Station in Kilowatts...... 184,000 Kilowatt Hours Generated (Net)...... 253,271,700 Kilowatt Hours Delivered to System...... 541,722,900 Steam Heating Plants - Steam Produced in Pounds...... 75,226,300 Recreation Department: Number of Parks, Ornamental Areas, Playfields and Playgrounds Owned (5,108 Acres)...... 391 Number of Summer Camps (199 Acres)...... 1 Number of Recreation Centers, Playgrounds and School Facilities Operated...... 30 Number of Skating Rinks...... 1 Number of Swimming Pools Operated (Including 2 School Pools)...... 18 Number of Municipal Beaches...... 1 Total Playing Permits Issued at 6 Municipal Golf Courses...... 269,870 Sewage Disposal System: Number of Sewage Disposal Plants...... 1 Number of Pumping Stations...... 12 Miles of (Trunk Line 788) + (Lateral 2,125) Sewers...... 2,913 Transportation Department: Number of Employees...... 1,750 Number of Revenue Vehicles...... 572 Seating Capacity...... 23,887 Number of Route Miles...... 1,324 Total Number of Passengers (Estimated)...... 38,000,000 Regular Fare...... $ 1.50 Tickets...... 5 for $6.50 Transfers...... $ 0.25 Water System: Number of Customer Accounts...... 262,415 Average Pumpage - Millions of Gallons per Day...... 605.9 Greatest Pumpage for a Single Day During Fiscal Year (6-30-04) - July 31, 2003 Gallons ...... 1,082,200,000 Greatest Pumpage for a Single Hour During Fiscal Year (6-30-04) - July 31, 2003 9 pm Gallons...... 48,667,000 Filtration Plant Rated Capacity - Millions of Gallons per Day...... 1,680.0 Number of Miles of Water Mains...... 3,846 Average Cost (Includes Domestic, Industrial and Commercial) per 1,000 Cubic Feet...... $ 10.64 Employees on Payroll on June 30, 2004: Classified (Tax Supported 7,754) + (Revenue Supported 5,710)...... 13,464 Elective (Tax Supported 42) + (Revenue Supported 0)...... 42 Appointive (Tax Supported 311) + (Revenue Supported 32)...... 343 Uniform Police (Tax Supported 4,623) + (Revenue Supported 0)...... 4,623 Library (Tax Supported 457) + (Revenue Supported 0)...... 457 Total Employees (Tax Supported 13,187) + (Revenue Supported 5,742)...... 18,929 Total Pensioners as of June 30, 2004...... 20,027

The miscellaneous statistics are for the most part compiled by the respective City Departments.

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148 Our Special Thanks To: City of Detroit, Michigan www.ci.detroit.mi.us Finance Department Financial Reporting and Grants Management Sections and Staff Almon G. Turner Jr, MSA, Manager II Robert Blaszkowski and Kenneth R. Ford - Consultants General Accounting Section and Staff Richard E. Williams, Manager II Saied S. Rouhani, Manager I David Capobres Jr. Manager I Cynthia Lampkin, Manager I and all Finance Department staff for their commitment and dedicated service in the preparation of this report

City of Detroit - Agencies for their full cooperation in providing us all the necessary information needed to compile this report

Detroit Resource Management System and staff Joan Moss, General Manager Communications and Creative Services Department Chris Kopicko, Supervising Publicist Lona L. Reeves, PhD, Publicist Cornell Stubbs, Chief Photographer Kwabena Shabu, Supervising Photographer

KPMG LLP and staff Alan C. Young & Associates, P.C. and Staff BOWNE of Detroit for printing this report Kwame M. Kilpatrick, Mayor

Detroit City Council Maryann Mahaffey, President Kenneth V. Cockrel, Pres. Pro-Tem Alonzo W. Bates Sheila M. Cockrel Barbara-Rose Collins Kay Everett (In Memoriam) Sharon McPhail Alberta Tinsley-Talabi JoAnn Watson

Detroit City Clerk Jackie L. Currie

Communications & Creative Services Department-2005 Photos by Kwabena Shabu and Cornell Stubbs